House Ways and Means Committee Chairman Kevin Brady (R-Texas) said Friday that House Republicans would unveil their ObamaCare replacement plan sometime in the next 45 days.
“The task force is working on it,” Brady said at a Bloomberg Government event. “We’ll be laying that out here over the next month and a half.”
Republicans have said that they plan to have Speaker Paul Ryan’s (R-Wis.) policy task forces lay out their plans before the Republican National Convention in July.
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UnitedHealthcare’s decision to quit insurance exchanges in about 30 states next year has patient advocates concerned that fewer options could force consumers to pay more for coverage and have a smaller choice of network providers.
The company’s departure could be felt most acutely in several counties in Florida, Oklahoma, Kansas, North Carolina, Alabama and Tennessee that could be left with only one insurer, according to an analysis by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
To sell policies next year on the health law’s exchanges, also called marketplaces, insurers must apply within the next few weeks and get state approval this summer.
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Even before President Obama leaves office, ObamaCare has begun unraveling.
The law was passed over the objections of a majority of Americans, it is still opposed by a majority of Americans — and their opposition has been vindicated. Last week, UnitedHealth Group announced that, after estimated losses of more than $1 billion for 2015 and 2016 under ObamaCare, the company was pulling out of most of its ill-fated exchanges. In fact, commercial insurers across the country are hemorrhaging money on ObamaCare at alarming rates.
The president promised these insurers taxpayer bailouts if they lost money, but Congress in its wisdom passed legislation barring the use of taxpayer dollars to prop up the insurers. Without the bailouts, commercial insurers are being forced to eat their losses — while more than half of the ObamaCare nonprofit insurance cooperatives created under the law failed.
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The ACA significantly altered the rules governing the individual insurance market, and the general effect was to lower premiums for older and less healthy people and raise premiums for younger and healthier people. To induce younger and healthier people to enroll, the law contained the individual mandate and subsidies for both buyers and, for the first few years of the program, sellers of insurance in the form of premium stabilization programs.
This study analyzes data from HHS from 2014, the first year of the ACA’s implementation, and finds that insurers suffered significant losses despite eventually receiving much larger payments from the law’s reinsurance program (one of the premium stabilization programs) than they expected when setting their 2014 premiums. Given the same population and same utilization of services from that population, insurers would have had to price average premiums more than 25 percent higher to avoid losses in the absence of the reinsurance program.
While insurers’ performance varied significantly across carriers and states, the large overall losses in 2014 raise questions about the long-term stability of the changes made by the ACA, particularly after 2016 when the reinsurance and risk corridor programs end and premium revenue must be sufficient to cover expenses.
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It’s not surprising that UnitedHealthcare is high-tailing it out of Arizona’s health-insurance marketplace. The exchanges — a major part of the Affordable Care Act — are money losers. Not enough young, healthy people have signed up in Arizona and elsewhere to use the plans. Some rural counties in Arizona may have no options on the exchange, which could complicate things for those who are required to have insurance but don’t qualify for coverage through an employer.
The exchanges have never been viable options for healthy, working people. They are not affordable for those who are in the middle class and patients have to be careful to choose a plan that offers decent doctor choices.
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The conservative Republican Study Committee (RSC) on Friday submitted its recommendations for a Republican replacement for ObamaCare as it seeks to shape a plan being formed by a group of House chairmen. The recommendations come from the RSC’s already-existing legislation, the American Health Care Reform Act, which would completely repeal ObamaCare and replace it with a new system.
“This bill relies on conservative principles and increased state flexibility to transform our top-down health care system into one that creates competition, growth and increased access for all Americans,” the group said in a statement.
The proposal would replace ObamaCare’s refundable tax credits with a tax deduction, which tends to provide less help to low-income people by reducing the taxes people owe rather than allowing for the possibility of getting money back in a refund.
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Beginning next year, the annual out-of-pocket limits for all health plans sold in the (Obamacare) health insurance exchanges will be $7,150 for an individual and $14,300 for a family. To put those numbers in perspective, a $10-an-hour employee only earns about $20,000 a year.
One way to help families meet the burden of these medical expenses is with a Health Savings Account. But because the requirements for HSAs are so rigid, roughly four out of five plans sold in the exchanges are incompatible with them. One of the most nettlesome rules is the requirement that HSA plans cover only “preventive care” below the deductible. To compete for customers, especially young healthy enrollees, the insurers believe they need to make more services available with a minimum of out-of-pocket costs.
Things are about to get much worse. New rules and regulations, which become mandatory in 2018, will impose minimum and maximum deductibles and out-of-pocket limits that are inconsistent with the HSA rules.
A new note from JPMorgan economist Jesse Edgerton looks at what is happening with Americans who are working part-time for “economic reasons” — or Americans involuntarily working part time. As you can see in the above chart — the red line — the numbers remains elevated despite big declines in the U-3 and U-6 jobless rates. Edgerton:
There has been little recent relationship between the number of “extra” part-time workers and the level of U3 unemployment, questioning the idea that driving U3 down further will reduce involuntary part-time employment. . . In a note last year, we pointed out that the shift strikingly coincided with the passage of the ACA, which included an employer mandate to provide health insurance to employees working 30 or more hours per week. . . passage of the ACA preceded a large and unprecedented shift from workers working more than 30 hours per week to just under 30 hours. We continue to believe that the ACA can explain a significant number of the “extra” involuntary part-time workers.
The Republican Study Committee submitted their recommendations for health reform to the House Republican Health Care Reform Task Force on Friday, pointing to several provisions of an already-introduced bill to guide its proposals.
“The Republican Study Committee has led the way on a comprehensive repeal and replace strategy for ObamaCare,” the group says of its recommendations. “Currently, the American Health Care Reform Act, H.R. 2653, is the most cosponsored ObamaCare alternative in the House. This bill relies on conservative principles and increased state flexibility to transform our top-down health care system into one that creates competition, growth and increased access for all Americans.”
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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