Insurance giant Aetna’s decision to stop offering much of its individual coverage through the Affordable Care Act is exposing a problem in President Obama’s signature health-care law that could lead to another fraught political battle in Congress.
Aetna’s announcement Monday night was the latest sign that large insurers are losing money in the Affordable Care Act’s marketplaces, heightening concerns about the long-term stability of a key part of Obama’s domestic policy legacy. But addressing this issue could open the door to a nasty political fight, given that some Republicans have vowed to repeal the law outright.
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OF ALL the big health-insurance companies, Aetna may have been the last anyone expected to pour cold water on Obamacare. The company has over the past several years enthusiastically participated in the marketplaces the law created. Now, Aetna just announced, it is canceling plans to expand its Affordable Care Act (ACA) business and reviewing its existing products.
Aetna is not alone. UnitedHealth Group and Humana have recently made announcements in a similar vein. Among other things, many big insurers complain that their Obamacare divisions are losing money, requiring them to pay out more in medical bills than they collect in premiums. The law’s critics have seized on the news, using it as fresh evidence that Obamacare is deeply, perhaps fatally, flawed.
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A provision of the Affordable Care Act that allows insurers to charge smokers higher premiums may have discouraged smokers from signing up for insurance, undercutting a major goal of the law, according to a study published this month.
The surcharges, of up to 50 percent over nonsmokers’ premiums, also showed no sign of encouraging people to quit.
The Affordable Care Act eliminated insurers’ ability to charge higher premiums based on whether a person was sick. But it does allow them to vary premiums with age, geography, family size and smoking status.
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Health spending in the U.S. grew to $3.2 trillion in 2015, fueled partly by the expansion of health insurance to millions of people under the Affordable Care Act, according to a new estimate published in the journal Health Affairs.
The study also looks forward, projecting that through the next decade, national health spending will climb at 5.8 percent per year, on average, to encompass a fifth of the economy by 2025.
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The number of insurers carrying out one of the Affordable Care Act’s most idealistic goals continues to plummet, with just seven nonprofit member-run health plans set to take part in the law’s fourth enrollment season this fall.
That’s down from 23 such plans — co-ops, as they are commonly known — that started in 2014. Eleven are still in business, but four in Oregon, Ohio, Connecticut and Illinois will fold soon because of financial insolvency. Just Tuesday, the Land of Lincoln Mutual Health Insurance Co. was ordered to close by Illinois regulators.
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Friday, the U.S. Court of Appeals for the D.C. Circuit released two opinions in Patient Protection and Affordable Care Act (PPACA) cases. In one case, the federal government prevailed. In the other, it did not.
In the first case, West Virginia v. Department of Health and Human Services, a unanimous panel concluded that the state of West Virginia lacks Article III standing to challenge the Obama administration’s decision to waive some of the PPACA’s requirements governing minimum coverage requirements. This litigation responds to the Obama administration’s response to outrage over insurance plan cancellations — cancellations that were politically problematic because they revealed that the president’s promise that “if you like your health insurance plan, you can keep it” was a lie. (Indeed, it was Politifact’s “Lie of the Year” for 2013.)
In a second case decided Friday, the administration did not fare so well. In Central United Life Insurance, Co. v. Burwell, another unanimous panel invalidated an HHS regulation for exceeding the scope of its delegated powers under the Public Health Service Act (PHSA), as amended by the PPACA. Specifically, HHS had adopted regulations seeking to prevent consumers from obtaining fixed indemnity policies that fail to satisfy the PPACA’s minimum essential coverage requirements, despite the PHSA’s exemption of such plans from such requirements.
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Premiums for health plans sold through the federal insurance exchange could jump substantially next year, perhaps more than at any point since the Affordable Care Act marketplaces began in 2013.
An early analysis by the Kaiser Family Foundation shows that proposed rates for benchmark silver plans — the plans in that popular tier of coverage that determine enrollees’ tax subsidies — are projected to go up an average of 10 percent across 14 major metropolitan areas.
The analysis, released Wednesday, is based on insurers’ initial filings in 13 states and the District of Columbia.
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Sen. Bernie Sanders has proposed paying for his policies that transform large sectors of the government and the economy mainly through increased taxes on wealthy Americans. A pair of new studies published Monday suggests Sanders would not come up with enough money using this approach, and that the poor and the middle class would have to pay more than Sanders has projected in order to fund his ideas.
The studies, published jointly by the nonpartisan Tax Policy Center and the Urban Institute in Washington, concludes that Sanders’s plans are short a total of more than $18 trillion over a decade. His programs would cost the federal government about $33 trillion over that period, almost all of which would go toward Sanders’s proposed system of national health insurance. Yet the Democratic presidential candidate has put forward just $15 trillion in new taxes, the authors concluded.
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 failures of a dozen nonprofit health insurance plans created by the Affordable Care Act could cost the government up to $1.2 billion, according to a harsh new congressional report that concludes federal officials ignored early warnings about the plans’ fragility and moved in too late as problems arose.
The report, released Thursday by a Senate investigations panel, says that the bulk of those loans are unlikely to be recovered, with some plans unable to pay “a substantial amount of money” they still owe doctors and hospitals for members’ care.