Health insurers have not had much to cheer about lately, when it comes to Obamacare. They have been losing money on exchanges, and there is little hope that will change. So, a large health plan in Pittsburgh has asked judges to give it Obamacare money the Administration promised, but Congress declined to appropriate.
As reported by Wes Venteicher and Brian Bowling of the Pittsburgh Tribune-Review, Highmark lost $260 million on Obamacare exchanges in 2014, and claims it is owed $223 million by taxpayers. Unfortunately, it received only about $27 million. And things are getting worse. To date, Highmark has lost $773 million on Obamacare exchanges.
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Oracle has had enough of Oregon. The business technology giant has decided it will no longer take on new business with the state’s government amid an ongoing legal battle, Oracle senior vice president Ken Glueck told Fortune on Wednesday.
The decision follows a protracted legal tussle between the two parties over a disastrous state healthcare enrollment website that never came online. In 2011, Oregon enlisted Oracle to build a healthcare exchange website related to Obamacare after being impressed by the company’s sales pitch, according to a previous legal filing.
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Enrollment in individual health care plans, now dominated by the Affordable Care Act exchanges, fell 15.4 percent in the first quarter for the parent of Blue Cross and Blue Shield of Illinois.
At the end of March, Chicago-based Health Care Service Corp. had 1.39 million individual members, compared with 1.64 million as of Dec. 31.
The decline in individual members is even greater when compared with the first quarter of 2015. A year ago, HCSC had nearly 1.9 million individual market members.
Despite the decline in individual enrollment, the insurer set aside $431.5 million in reserves during in the first quarter to account for losses expected in its 2016 ACA business, according to first-quarter financial statements filed this week with the Illinois Department of Insurance.
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Top Republicans on the House Energy and Commerce Committee sent letters this week seeking more information about the financial status of the 11 remaining co-ops created under the Affordable Care Act.
Reps. Fred Upton (R-Mich.), Tim Murphy (R-Pa.) and Joe Pitts (R-Pa.) say they want to better understand the financial challenges the co-ops are facing and ensure the Centers for Medicare and Medicaid Services is taking the “necessary and appropriate steps” to keep the co-ops functioning. The agency has placed eight of the remaining co-ops on corrective action plans, and 12 had closed by the start of 2016.
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The third open enrollment period (OEP) for the public exchanges concluded in January. Many carriers—both early-OEP entrants and “wait-and-see” latecomers—believed this new market would achieve stability and sustainable margins in its third year. However, recent events— including carrier turnover (both entrances and exits), plan terminations, and pricing volatility—suggest the market is still in flux.
One reason for the flux is the variability of individual market financial performance many carriers have disclosed publicly. For some carriers, significant losses are causing marked changes in enterprise-level capital, cost structures, and strategy. Early indications of 2015 performance suggest aggregate negative margins may have doubled; to date, however, only 86% of carriers have released preliminary data publicly. We anticipate that our estimates will evolve as more information is released, such as final 3R results and rebates, as well as 2015 claim run-out and adjustments. Whether carriers’ performance in the individual market will improve in 2016 remains unclear.
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Rising rates are not solely the result of the uninsured who bought health plans on the exchanges having a tremendous pent-up demand for healthcare services. Many insurers also underpriced their plans to gain a larger share of the new market. The Congressional Budget Office found premiums in 2014 were 15% lower than expected.
The most significant factor behind next year’s sharply rising prices, experts say, is that millions of “young invincibles,” who represent a large segment of the uninsured pool, have so far not signed up for Obamacare.
“We saw very little of the young and healthy,” said Sherri Huff, a consultant and former chief financial officer of Common Ground Healthcare Cooperative in Wisconsin, one of the insurance co-ops funded by ACA loans.
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Health insurance customers in a growing number of mostly rural regions will have just one insurer’s plans to choose from on the ObamaCare exchanges next year as some companies pull out of unprofitable markets. The entire states of Alaska and Alabama are expected to have only one insurer on the health law’s signature online marketplaces next year, according to state regulators. The same is expected to be true in parts of several other states, including Kentucky, Tennessee, Mississippi, Arizona and Oklahoma, state regulators said.
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- 40% eligibility for financial assistance,
- 15% how to project income,
- 11% account creation issues, and
- 6% changes in circumstances.
The researchers say that the questions paint a picture of complex eligibility and enrollment processes, and could lend valuable insight in preparation for the fall open enrollment period, beginning November 1.
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Tens of thousands of Iowans who buy their own health insurance are about to receive a shock in the mail.
Wellmark Blue Cross & Blue Shield is sending letters this week telling about 30,000 customers it plans to raise their premiums by 38 percent to 43 percent next year.
Wellmark sells about three-quarters of individual policies in Iowa’s health-insurance market. The steep increases will affect people who bought relatively new plans that comply with rules of the Affordable Care Act.
Another 90,000 Wellmark customers who hold older individual insurance plans are expected to face smaller increases, which will be announced in June. The increases being proposed this week also don’t affect the hundreds of thousands of Wellmark customers who obtain coverage via their employers. Their premiums are expected to rise less, because they are in larger, more stable pools of customers.
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California’s health insurance exchange estimates that its Obamacare premiums may rise 8 percent on average next year, which would end two consecutive years of more modest 4 percent increases.
The projected rate increase in California, included in the exchange’s proposed annual budget, comes amid growing nationwide concern about insurers seeking double-digit premium hikes in the health law’s insurance marketplaces.
Any increases in California, a closely watched state in the health law rollout, are sure to draw intense scrutiny during a presidential election. Republicans are quick to seize on rate hikes as further proof that President Barack Obama’s signature law isn’t doing enough to hold down health care costs for the average consumer.
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