Category: Implementation

One provision of the Patient Protection and Affordable Care Act that has been delayed until 2017 is a federal mandate for standard menu items in restaurants and some other venues to contain nutrition labeling.

Drawing on nearly 300,000 respondents from the Behavioral Risk Factor Surveillance System from 30 large cities between 2003 and 2012, we explore the effects of menu mandates. We find that the impact of such labeling requirements on BMI, obesity, and other health-related outcomes is trivial, and, to the extent it exists, it fades out rapidly.

One of the reasons that ACA Exchange plans are losing money is their inability to attract enough healthy enrollees. Healthy people are, disproportionately, young people. And large numbers of young adults don’t have to enroll in ACA Exchange plans – because the ACA mandates that their parents’ employer provide them with coverage, and that coverage is almost invariably priced lower.

Anyone up to age 26 with a parent who has employer-based health coverage that includes dependents can enroll in the parent’s plan. This is called the “dependent care mandate,” and is a requirement of the ACA. There are no other requirements for this coverage option: the “child” does not have to live with the parent or be financially dependent or a dependent for tax purposes on the parent. The “child” could be employed and eligible for employer-based coverage on his/her own, but elect to take the parent’s coverage if it’s preferable.

Exchanges are being undermined, in part, by the ACA’s dependent care mandate.

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On Tuesday UnitedHealth Group reported a terrific first quarter, with strong performance across nearly all business lines. There was one exception: The conglomerate’s insurance exchange unit raised its projected Affordable Care Act losses for 2016 to $650 million from $525 million, after booking $475 million in red ink last year.

CEO Stephen Hemsley said ObamaCare’s instability, small market size and costly patient population “continue to suggest we cannot broadly serve it on an effective and sustained basis.” He said UnitedHealth will withdraw to “only a handful of states” in 2017.

Normally sedate insurance markets have been roiled by everything from the federally chartered co-op failures to enrollment well below projections. ObamaCare’s architecture also makes it economically rational for consumers to wait until they are about to incur major medical expenses to get covered, and administratively created “special enrollment periods” encourage such gaming.

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United Healthcare’s announcement that it is pulling out of most of the exchanges established by the Affordable Care Act is one of many indications of the law’s continuing instability.

There are many other insurance plans in the same boat. Blue Cross Blue Shield plans have dominated the individual and small-group markets in most states for decades. If they were to abandon this market, they would have less ability than United does to grow their business elsewhere. But many of these plans are nonetheless contemplating such a move.

ObamaCare isn’t likely to enter an insurance death spiral; there’s too much federal money propping the whole thing up. But it isn’t on track to become a stable, self-sustaining insurance pool either, because very few middle-class families want to get their insurance through the exchanges. Which means the law is not only unstable financially, it is politically unstable as well.

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UnitedHealth is withdrawing from most of the 34 ObamaCare Exchanges in which it currently sells, citing losses of $650 million in 2016. A recent Kaiser Family Foundation report indicates UnitedHealth’s departure will leave consumers on Oklahoma’s Exchange with only one choice of insurance carriers.

Michael Cannon of the Cato Institute explains five results of UnitedHealth’s withdrawal from the exchanges:

1. UnitedHealth’s departure shows ObamaCare is suffering from self-induced adverse selection.

2. UnitedHealth’s departure is bad news for other carriers.

3. UnitedHealth’s departure shows ObamaCare premiums will continue to rise.

4. There will be more exits.

5. UnitedHealth’s departure shows quality of coverage under ObamaCare will continue to fall.

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The Medicare Advantage Value-Based Insurance Design Model kicks off Jan. 1, 2017 and will run for five years.

Value-based insurance design, or VBID, refers to health plans that waive or lower out-of-pocket costs for healthcare and prescription drugs that are proven effective for patients with chronic health conditions.

The CMS wants feedback on ways to promote quality of care and reduce cost of care for enrollees in the Medicare Advantage program.

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The Food and Drug Administration said this month that it will delay enforcement of menu labeling rules – again – until next year. Passed as part of the health care overhaul in 2010, the rules will eventually require restaurants and other establishments that sell prepared foods and have 20 or more locations to post the calorie content of food “clearly and conspicuously” on their menus, menu boards and displays.

The Centers for Medicare and Medicaid Services released a white paper detailing the Centers for Medicare and Medicaid’s risk adjustment model Thursday.

“CMS has implemented a risk adjustment program to mitigate the effects of risk selection on health insurance premiums for non-grandfathered plans in the individual and small group markets,” the paper concludes. “The risk adjustment program, supports market stability by pooling risk and transferring funds from plans with more low-risk (i.e., healthier and lower cost) enrollees to those plans with more high-risk (i.e., less healthy and higher cost) enrollees.”

The paper also suggests potential modifications for the 2018 and 2019 benefit years.

The Congressional Budget Office reduced the projected number of people who will enroll on the federal insurance exchanges to 12 million from 21 million in a report released Thursday.

Still, between 2017 and 2026, the CBO projects the number of insured people in the U.S. will grow from 246 million to 253 million. While the number of uninsured is expected to grow from 26 million to 28 million, the portion of uninsured people younger than 65 is expected to stay around 10 percent, according to the report.

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