The Obama administration went to court Thursday to block two major health insurance mergers, siding with consumer advocates and medical groups worried that the consolidation of large national health plans could lead to higher premiums.
The long-anticipated move by the Justice Department and attorneys general in California and 10 other states, will at least temporarily prevent Anthem Inc.’s $48-billion purchase of Cigna Corp., a combination that would create the nation’s largest health insurer.
And it will stop Aetna Inc.’s $34-billion bid to acquire Humana Inc., a merger that would have combined the nation’s third- and fifth-biggest health plans.
. . .
Politicians tend to be most enraged by the problems they cause, and the liberal fury against insurance mergers is a classic of the genre. ObamaCare was designed to create government-directed oligopolies, but now its authors claim to be alarmed by less competition.
Last week federal and 11 state antitrust regulators filed a double lawsuit to block the pending $54 billion insurance tie-up between Anthem and Cigna and the $37 billion acquisition of Humana by Aetna.
. . .
Today’s headline in The Los Angeles Times: “California Obamacare rates to rise 13% in 2017, more than three times the increase of the last two years.” The increase will be 17.2% for Anthem and 19.9% for Blue Shield–the largest Obamacare insurers.
Obamacare supporters have long pointed to Covered California as the example of just how good Obamacare could be if the entire program were run as well as it is in California.
Covered California’s average rate increase for 2017 will be 13.2%.
But half of the California market is controlled by two carriers who will be asking for much bigger increases. Blue Shield of California said its average rate increase for 2017 will be 19.9%, the biggest statewide increase. Anthem Blue Cross said it will increase its rates by an average of 17.2% for 2017.
. . .
Humana will exit eight of the 19 individual health insurance markets where it has sold Obamacare plans this year, the insurer announced Thursday.
The company is still struggling to make a profit on the exchanges, according to its second quarter earnings guidance released Thursday. The company expects to offer individual plans in 156 counties across 11 states compared to the 1,351 counties in 19 states it has offered plans in the year, according to a release.
. . .
House Speaker Paul Ryan says he has heard personally from actuaries for a major health insurer that Obamacare is “failing.” Speaking at a Wednesday breakfast for Ohio delegates to the Republican National Convention, Ryan said that actuaries for Blue Cross Blue Shield have told him the Affordable Care Act is going downhill faster than they expected.
“As I said in the beginning, this healthcare law is going to collapse under its own weight,” Ryan said. “I met with all these actuaries from Blue Cross Blue Shield a little while ago, and they said ‘Well, congressman, the law is failing two years ahead of schedule,'” he added. “Meaning, basically, they saw it coming, but they didn’t think it would be this bad so fast.”
. . .
Only about one-third of health insurers came out ahead in their first year in the ObamaCare marketplace, according to a study by the Commonwealth Fund released Wednesday.
While insurers made nearly twice as much money from healthcare premiums in 2014, overall profits “diminished noticeably” because of higher payouts, according to the expansive new analysis on companies participating in the exchanges.
Overall, health insurers underestimated their total medical costs by about 5.7 percent in their first year.
. . .
State and federal officials have negotiated a deal to delay a federal policy that threatened to destabilize health insurance rates at small businesses across Massachusetts.
Governor Charlie Baker’s administration said Tuesday that the agreement will postpone for one year a piece of the Affordable Care Act that requires a change in the way small businesses’ insurance rates are calculated. Massachusetts will have to phase out its current rules and switch to the federal formula by 2019.
The rules apply to businesses with 50 or fewer employees.
. . .
Top insurer UnitedHealth Group said Tuesday its 2017 earnings will benefit as it mostly exits the ObamaCare exchanges, its worst-performing business line.
UnitedHealth reported second-quarter earnings of $1.96 per share, up 13% from a year earlier, handily beating analysts’ estimates of $1.89. Still, the company just slightly raised its full-year earnings outlook to $7.80-$7.95 a share from $7.75-$7.95, roughly in line with consensus estimates for $7.89.
The high end of its full-year 2016 earnings guidance held steady because worse-than-expected results in its ObamaCare individual market business called for a conservative outlook, management said in an earnings call.
. . .
In 2013, one Affordable Care Act component taking effect — a medical device excise tax — imposed a new financial burden on American Laboratory Products Co.
The 2.3 percent tax on revenue took a bite out of the company’s bottom line, “no question about it,” said Sean Conley, president of the family-owned-and-operated Alpco. “This obviously has an impact on where our funds go and makes it a bit more challenging to continue to create new jobs.”
The controversial medical device tax was a focus of conversation Friday when U.S. Sen. Kelly Ayotte visited the company for a discussion and tour.
. . .
Oregon’s nonprofit ObamaCare health insurance co-op is winding down operations due to financial problems, the second such announcement this week for the troubled co-op program.
The announcement is just the latest in a long string of failures of ObamaCare’s co-ops, non-profit health insurers set up to increase competition with established insurers. Before this week, just 10 of the original 23 co-ops remained functioning, and Republicans have seized on the problems.
Oregon’s Department of Consumer and Business Services announced Friday that it is taking over the insurer, known as Oregon’s Health CO-OP, and will liquidate the company.
. . .