The Affordable Care Act (ACA) established health insurance marketplaces where consumers can buy individual coverage. Leveraging novel credit card and bank account micro-data, we identify new enrollees in the California marketplace and measure their health spending and premium payments. Following enrollment, we observe dramatic spikes in individuals’ health care consumption. We also document widespread attrition, with more than half of all new enrollees dropping coverage before the end of the plan year. Enrollees who drop out re-time health spending to the months of insurance coverage. This drop-out behavior generates a new type of adverse selection: insurers face high costs relative to the premiums collected when they enroll strategic consumers. We show that the pattern of attrition undermines market stability and can drive insurers to exit, even absent differences in enrollees’ underlying health risks. Further, using data on plan price increases, we show that insurers largely shift the costs of attrition to non-drop-out enrollees, whose inertia generates low price sensitivity. Our results suggest that campaigns to improve use of social insurance may be more efficient when they jointly target take-up and attrition.
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Republicans are in a predictable spot as they head to the midterm election: The party failed to repeal ObamaCare, and the press is waving around double-digit premium increases for 2019. Democrats are pinning the blame on Republicans, though the basic problem is still the structure of the Affordable Care Act.
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Last week was an amazing and unusual week at the Department of Justice, and it went largely unnoticed by the mainstream media. Attorney General Jeff Sessions, with the approval of President Trump, submitted court filings in two lawsuits agreeing that Obamacare will be unconstitutional as of Jan. 1, 2019, and that DACA is and always has been unlawful. Thus, DOJ will not defend Obamacare nor will it defend DACA on the merits.
Not since the Obama administration flipped its position on DOMA has the DOJ declined to defend something this important. And unlike the DOMA case, in both the Obamacare case and the DACA case, DOJ is relying on existing rulings from the Supreme Court and the 5th Circuit, respectively, in formulating its positions.
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Senate Majority Leader Mitch McConnell said “everybody” in the Senate wants to preserve consumer protections for people with pre-existing conditions, an Obamacare provision that the Trump administration last week said is unconstitutional and should be struck down in court.
“Everybody I know in the Senate — everybody — is in favor of maintaining coverage for pre-existing conditions,” McConnell told reporters in the Capitol. “There is no difference in opinion about that whatsoever.”
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Health and Human Services Secretary Alex Azar told lawmakers Tuesday that he wants to preserve access to affordable insurance for Americans with preexisting medical conditions, but he declined to disclose his view of an administration move that could undercut such consumer protections.
Calling it “a constitutional position . . . not a policy position,” Azar sidestepped grilling on whether he agreed with a legal brief filed last week by Justice Department attorneys stating they would not defend the Affordable Care Act in a federal lawsuit by Texas and 19 other Republican-led states.
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The next great health care war is already starting. It’ll be about costs this time, not coverage, and Democrats are the ones firing the first shots — though neither party has a complete strategy just yet.
Why it matters: After a bruising, decade-long fight over the Affordable Care Act, plenty of candidates and lawmakers would love to keep their distance from the politics of health care. But the issue is so personal, and the system is so dysfunctional, that may be impossible.
Consumers and insurers face new uncertainty with the Justice Department’s assertion this week that key provisions of the Affordable Care Act are invalid.
In a brief filed Thursday, the department asked a federal court to unwind the health law’s protections for individuals with existing medical conditions, such as diabetes or asthma. The law, known as Obamacare, prohibits insurers from refusing to sell coverage to people with pre-existing conditions or from charging them more than healthy consumers.
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House Democratic Leader Nancy Pelosi (Calif.) said Thursday that “Medicare for All” proposals should be “evaluated” if Democrats win back the House this year, adding “it’s all on the table.”
Pelosi has long backed a public option for health insurance, but has not supported going further — as many Democrats want — and setting up government-run, universal health insurance.
The Democratic leader did not explicitly endorse the idea of Medicare for All during a press conference Wednesday, but she also did not rule out the proposal.
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Federal officials will not block insurance companies from again using a workaround to cushion a steep rise in health premiums caused by President Donald Trump’s cancellation of a program established under the Affordable Care Act, Health and Human Services Secretary Alex Azar announced Wednesday.
The technique — called “silver loading” because it pushed price increases onto the silver-level plans in the ACA marketplaces — was used by many states for 2018 policies. But federal officials had hinted they might bar the practice next year.
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The Republican-led Michigan Legislature on Thursday gave final approval to a bill requiring able-bodied adults in the state’s Medicaid expansion program to meet work or job-related requirements, sending it to Gov. Rick Snyder for his expected signature.
Starting in 2020, adults age 18 to 62 would have to show workforce engagement averaging 80 hours a month — through work, school, job or vocational training, an internship, substance abuse treatment or community service. Michigan would first seek a federal waiver to implement such requirements that have been embraced by President Trump’s administration.
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