President Obama and the Supreme Court have effectively replaced the ACA with something we now call “ObamaCare.”
Unfortunately, ObamaCare doesn’t work much better than the ACA. ObamaCare is still causing Americans to lose their health plans, still driving premiums higher, and still causing their coverage to erode.
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The administration has decided to explore the ‘next chapter’ of healthcare reform, rather than focusing on the issues of access and affordability.
The administration continues with an aggressive agenda to make administrative changes that impact millions of people without benefit of congressional input.
The latest changes that the Obama administration wants to make to Medicare Advantage plans offered to retirees of companies, labor unions, and municipal governments—called Medicare Advantage Employer-Group Waiver Plans (EGWP, pronounced “egg whips”).
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Along with releasing end-of-the-year 2015 enrollment data for the Affordable Care Act exchanges last Friday afternoon, the Department of Health and Human Services also released data for the 2016 open enrollment period. Just like the end-of-the year 2015 enrollment data, which I discussed on Monday, a close look at the 2016 open enrollment data reveals that the ACA is significantly underperforming initial expectations.
The big story is how little has changed from 2015 to 2016. The number of 2016 exchange enrollees is up only slightly from last year, and the make-up of the risk pool—as proxied by income and age of enrollees—is virtually identical.
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There’s much more to fix in the health care system than the lack of price and quality information. And given the status quo of blunt benefit designs, the benefits of greater transparency may be limited. But transparency initiatives can and should help improve insurance benefit designs, directing patients to more cost-effective providers. This can happen with or without patients spending their own money.
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Theresa O’Donnell, a Democratic-leaning voter complained that Obamacare caused her family’s health insurance premiums to double from $5,880 per year to $12,972 per year. “I would like to vote Democratic, but it’s costing me a lot of money,” O’Donnell pleaded. “I am just wondering if Democrats really realize how difficult it’s been on working-class Americans to finance Obamacare.” The audience applauded O’Donnell, showing once again that, really, not even Democrats like Obamacare.
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The central feature of the latest plan in Nebraska is to deliver Medicaid expansion benefits through health plans sold on the Obamacare exchange, instead of through the state’s managed care system. But, at the end of the day, this is really just a more expensive way to expand Medicaid under Obamacare.
Nebraska’s own actuaries estimate that using these plans to expand Medicaid would increase per-person costs by 94% next fiscal year. By 2021, the cost difference is expected to reach 150%. Overall, this plan would cost taxpayers billions of dollars more (as if regular Medicaid expansion wasn’t expensive enough) and leave even fewer dollars for the truly needy.
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When agencies release information on a Friday afternoon, it is generally because of unfavorable news they hope will lose potency over the weekend. On Friday, the Department of Health and Human Services (HHS) released 2015 end-of-the-year exchange enrollment data. After reviewing the numbers, it is understandable why HHS would want this release to attract as little attention as possible.
Most news stories reporting the numbers have focused on the large overall decline in exchange enrollment throughout 2015—down 25% from the number of people who selected a plan at the end of open enrollment—or how the end-of-the-year number failed to meet even HHS’ downgraded target. The most striking number from the data, however, is the large drop in exchange enrollment—equal to about 1.13 million people—during the last six months of the year. As I explain below, this large net decline is problematic for the future of the Affordable Care Act (ACA) as it likely exacerbates other adverse selection problems induced by the law.
In its release of wonk beach reading late last month, the 539-page HHS Notice of Benefit and Payment Parameters for 2017 and the 87-page 2017 Letter to Issuers in the Federally-facilitated Marketplace, the federal government displayed its latest efforts to apply science to the issue of network adequacy. Beginning in 2018, for policies sold on healthcare.gov, the federal government will rate and display plans as “Basic,” “Standard” or “Broad.”
This network rating will be in addition to the federal government’s current efforts to ensure that networks established by an insurer are not so sparse as to be useless to the consumer. It does not appear as if states running their own exchanges will be required to do more than assess insurer networks for adequacy; state websites will not have to grade the quality of insurer networks for policies sold on their exchanges.
California politicians and interest groups have been working overtime to figure out a way to fix an illegal Medicaid provider tax—the subject of my recent Mercatus Center study. These taxes are problematic because they are generally accompanied with the guarantee of increased Medicaid payments to the providers paying the tax—payments largely financed with federal matching funds. As a result, provider taxes, which reek of government favoritism because of how the benefits often target select providers, raise Medicaid spending.
California’s tax is illegal under federal law because the state was holding numerous insurers harmless from the tax that should not have been. The state has recently come up with a revised tax plan that it is submitting for federal approval.
Last week at the Houston GOP presidential debate, Marco Rubio hammered Donald Trump on his ignorance of health care policy. “What is your plan, Mr. Trump?” asked Rubio. “The lines around the states,” Trump feebly responded. When Trump was asked if his plan had any other provisions, Trump said “no, there’s nothing to add.” That embarrassing performance has led the Trump campaign to put out what now purports to be the official Donald Trump health reform plan. And all you need to know to understand this plan is that it bears little relation to the things Trump has actually said on health care.