Thursday, August 25, 2016

ACA/Obamacare: Schemes Unravel Then Schemes Implode

“It has not been a good week for the Affordable Care Act (ACA), better known as Obamacare.

A slew of news, from insurers dropping out to possible fraud among healthcare providers, has all accumulated in a deluge of negative headlines for one of President Obama's signature laws.

In fact, it's gotten so bad that it appears that the whole program itself may be in doubt.

While there are issues, and this past week highlighted many of them, it does appear that there is a long road ahead before we have a definitive understanding of Obamacare's survival, and there's a good chance that it makes it.


Obamacare's terrible, no good, very bad week


On Monday night, Aetna announced that it would be dropping around 80% of their policies offered through the ACA's public-health exchanges after sustaining large losses on the Obamacare business.

This makes Aetna the third of the "big five" insurance firms (which includes Humana, United Health Care, Cigna, and Anthem) to announce a serious cut to their Obamacare business.

Whether Aetna did this due to business losses, as the company claims, or because of the Department of Justice's lawsuit blocked their merger with Humana is still up for debate, but regardless, the firm will be out of nearly all of the exchanges by 2017.

In addition to the Aetna news, the New York Federal Reserve put out a study Tuesday that showed one out of every five businesses in the bank's district — which includes parts of New Jersey and Connecticut — said they were reducing hiring due to Obamacare.

On top of all of that, the Center of Medicare and Medicaid Services (CMS) asked for public comment on instances in which healthcare providers directed patients to Obamacare over Medicare or Medicaid in order to make higher profits.

All in all, not a great week.” - Obamacare has gone from the president’s greatest achievement to a ‘slow-motion death spiral’, business insider.com, 08/21/2016

Link to the entire article appears below:

http://www.businessinsider.com/obamacare-is-in-slow-motion-death-spiral-2016-8


Related article: Aetna Warned U.S. Before Exiting Health Exchanges, WSJ.com, 08/17/2016:

http://www.wsj.com/articles/aetna-warned-it-would-withdraw-from-exchanges-if-humana-deal-was-blocked-1471436663


 


 



Wednesday, August 10, 2016

ACA/Obamacare: Blue Fairy Tales in Alabama

“Blue Cross Blue Shield of Alabama is seeking an average rate increase of 39 percent on individual plans offered through the Obamacare marketplace, according to the Centers for Medicare & Medicaid Services.

The proposed rate hikes will affect more than 160,000 people in Alabama who purchase insurance through the federal exchange, or about 5 percent of Blue Cross membership.

Rate increases range from 26 to 41 percent, depending on the type of plan. Proposed increases are lowest for bronze plans, which offer the least amount of coverage, and greatest for the most popular silver plans.

Blue Cross is the only insurance company that will offer Alabamians individual insurance plans through the exchange next year after the departure of Humana and UnitedHealth. Those departures were announced earlier this year.

The hefty rate hikes for Blue Cross customers will come on the heels of another increase in 2016 that averaged 28 percent for individual plans. The company lost more than $250 million on marketplace plans from 2014 to 2016, according to Blue Cross executives.

The high costs of individual marketplace customers in Alabama also factored into the departures of UnitedHealth and Humana, according to statements by those companies.” - Blue Cross proposes rate hike of nearly 40 percent on some Obamacare plans, al.com, 08/08/2016

The entire article appears in the link below:

http://www.al.com/news/index.ssf/2016/08/blue_cross_proposes_rate_hike_1.html

Tuesday, August 9, 2016

ACA/Obamacare: And About the Price of the Medicaid Expansion Component of ACA ……..

‘The implementation of major legislation such as the Affordable Care Act (ACA) often results in fiscal outcomes that differ significantly from prior projections. Whenever this happens it leads to many questions, much confusion, and several claims and counter-claims. Rarely is it immediately clear whether the law is working differently than envisioned, or whether the unexpected outcomes are due to inevitable projection errors having nothing to do with the law.

On rare occasion, however, a prior projection proves so far off that its significance must be noted. Two weeks ago my colleague Brian Blase uncovered such a development with respect to the ACA’s Medicaid expansion. Recall that the ACA considerably expanded Medicaid eligibility – an expansion made optional for the states in a later Supreme Court ruling. It turns out that the 2015 per-capita cost of this Medicaid expansion is a whopping 49% higher than projections made just one year before.

This disclosure can be found on page 27 of the 2015 Actuarial Report for Medicaid, released this July. Here is how the report described the issue:

“While the newly eligible adult per enrollee costs in 2014 were slightly lower than estimated in last year’s report ($5,488 compared to $5,517, or about 1 percent lower), the estimated per enrollee costs for 2015 in this year’s report are substantially greater ($6,366 compared to $4,281, or about 49 percent higher).”’ - The Soaring Costs of the ACA’s Medicaid Expansion, economics21.org, 08/01/2016

Link to the entire essay appears below:

http://www.economics21.org/html/soaring-costs-aca%E2%80%99s-medicaid-expansion-1989.html

Thursday, July 28, 2016

ACA/Obamacare: The Incredible Shrinking Selection

“Humana will stop marketing Obamacare exchange plans in several states next year and will exit many off-exchange individual markets as well, the company announced today.

The decision means the company will only offer individual plans in 156 counties in 11 states, down from 1,351 counties across 19 states this year. It had sold plans on Affordable Care Act exchanges in 15 states this year.” - Humana pulling out of many Obamacare markets, Politico, 07/21/2016

Link to the entire article appears below:

http://www.politico.com/story/2016/07/humana-obamacare-markets-225963

Wednesday, July 27, 2016

ACA/Obamacare: Want to Lose Some Serious Money? Be an ACA Exchange Co-Op or Insurer

“Since Obamacare’s rollout in the fall of 2013, 16 co-ops that launched with money from the federal government have collapsed.

The co-ops, or consumer operated and oriented plans, were started under the Affordable Care Act as a way to boost competition among insurers and expand the number of health insurance companies available to consumers living in rural areas.

Now, just seven co-ops—Wisconsin’s Common Ground Healthcare Cooperative; Maryland’s Evergreen Health Cooperative; Maine Community Health Options; Massachusetts’ Minuteman Health; Montana Health Cooperative; New Mexico Health Connections; and Health Republic Insurance of New Jersey—remain.”

“The Centers for Medicare and Medicaid Services awarded $2.4 billion to 23 co-ops that were eventually created. However, the majority of the co-ops struggled to turn a profit, resulting in the collapse of 16 of the original 23 that received $1.5 billion in startup and solvency loans.

Now, with just seven co-ops remaining, regulatory filings show that many ended 2015 in the red.”

“Since Obamacare’s implementation, it’s not only co-ops that have struggled to make money.

Oscar, a startup insurance company serving New York and New Jersey that launched in 2012, lost $105 million in 2015.

Additionally, UnitedHealth Group CEO Stephen Hemsley said the company expects to lose more than $1 billion from its exchange business—$650 million in 2016 and $475 million in 2015.

The company, which is the nation’s largest insurer, decided to pull out of at least 26 of the 34 exchanges it offered coverage on last year after warning the marketplaces were a risky investment.

And Health Care Service Corporation, which operates Blue Cross Blue Shield plans in five states, reported losses totaling $65.9 million in 2015. The company lost $281.9 million in 2014.” - 16 Obamacare Co-Ops Collapsed. Here’s How the Rest Are Faring, The Daily Signal, 07/26/2016

Link to the entire article appears below:

http://dailysignal.com/2016/07/26/16-obamacare-co-ops-collapsed-heres-how-the-rest-are-faring/?utm_source=TDS_Email&utm_medium=email&utm_campaign=MorningBell&mkt_tok=eyJpIjoiWlRCbU5qTXpNalJsTnpZMSIsInQiOiJodlpIdHFmVUJWeE9FZXJpR2g3XC9qN3lGWExTT3BGazduUjFydUg1QWREZHphakJLcjg5T3dWa3hXeTdDUGVrZThwZllUbjAxQXlGT25FYjBZTEhZSk5CV0RadXdtSmduME9Cd1RqMjdhdTA9In0%3D


 


 

Wednesday, July 13, 2016

ACA/Obamacare: Oops for the Fifteenth Time! Yet Another Co-Op Implodes

"Fifteen Obamacare co-ops have now failed. Oregon announced Friday that its second taxpayer funded Obamacare co-op would close its doors, leaving 40,000 to find new insurance. The co-op, known as “Oregon’s Health CO-OP now joins a list of 14 other Obamacare co-ops that have collapsed including Health Republic Insurance of Oregon which closed last year. Failed co-ops have now cost taxpayers more than $1.5 billion in funds that may never be recovered.

Co-ops were created as not-for-profit alternatives to traditional insurance companies created under Obamacare. The Centers for Medicare and Medicaid Services (CMS) financed co-ops with startup and solvency loans, totaling more than $2.4 billion in taxpayer dollars. Co-ops were envisioned as innovative providers that could provide member-driven care without needing to worry about recording a profit. In practice, they have failed to become sustainable with many collapsing amid the failure of Obamacare exchanges.

Since September, 12 Obamacare co-ops have collapsed, with only 8 of the original 23 co-ops remaining. Oregon’s Health co-op faced losses of $18.4 million last year and owed the federal government close to $1 million. Co-op across the country have struggled to operate in Obamacare exchanges, losing millions despite receiving multiple government subsidies.

The mass failure of co-ops should not be surprising. Larger insurance companies have also struggled to operate in Obamacare exchanges with many announcing they will stop providing coverage.

The web of government subsidies have also failed to provide insurances the funds they were promised. One of these programs, Risk corridors recouped just 12.6 percent of the funds that insurers requested. The program, which was created to encourage insurers to take on higher risk individuals by transferring funds from insurers who made money to those that posted losses, was required to be budget neutral under law leaving Obamacare insurers with a significant shortfall.

Obamacare co-ops have also been plagued by inept management and unrealistic business models.

As a report by the Daily Caller’s Richard Pollock found, 17 of the 21 co-ops paid out gratuitous salaries to executives reaching as high as $587,000, which is more than four times as much as the $135,000 median health insurance executive salary. Worse still, many of these executives had little to no experience in the insurance industry and some of these excessive salaries were disguised in financial documents as “management fees”. Last year, 21 of 23 co-ops posted losses." - Oregon Obamacare Co-op Becomes 15th to Collapse, Americans for Tax Reform, 07/11/2016

Link to the entire article appears below:

https://www.atr.org/oregon-obamacare-co-op-becomes-15th-collapse

Friday, July 8, 2016

ACA/Obamacare: The Incredible Shrinking ‘Competitive’ Co-Ops

‘Another Obamacare co-op, Connecticut’s HealthyCT, is closing its doors, and at least two most could follow suit as the nonprofit insurers decide whether they will be able to remain on firm financial footing.

The nine remaining co-ops of the original 23 co-ops must make payments totaling at least $130 million through Obamacare’s risk adjustment program, which could damage their viability.

The Connecticut Insurance Department announced Tuesday that HealthyCT was placed under state supervision, leaving approximately 40,000 Connecticut residents to find new health insurance during the next open enrollment period.

HealthyCT is the 14th co-op created under Obamacare to fail since the health care law’s exchanges opened in 2013.

The co-ops, or consumer operated and oriented plans, were created to inject competition and choice in areas where little existed. The Centers for Medicare and Medicaid Services awarded the 23 co-ops $2.4 billion in startup and solvency loans to help the new nonprofit insurance companies get off the ground.

However, more than half of the co-ops have failed to succeed in the health insurance market, despite the $1.5 billion in loans the 14 collapsed co-ops collectively received.

HealthyCT alone received nearly $128 million in loans, which included an infusion of $48.4 million in solvency loans awarded in September 2014.

Katharine Wade, state insurance commissioner, said HealthyCT’s “hazardous financial condition” led her to close the co-op’s doors. The nonprofit insurer’s financial issues were compounded after the Centers for Medicare and Medicaid Services announced last week the payments insurers must make under Obamacare’s risk adjustment program.

The Department of Health and Human Services asked HealthyCT to pay $13.4 million into the risk adjustment program, which redistributes money from insurers with healthy customers to insurers with sicker, more costly consumers.

“Unfortunately HealthyCT’s financial health is unstable, having been seriously jeopardized by a federal requirement issued June 30, 2016, that it pay $13.4 million to the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services as part of the Affordable Care Act’s risk adjustment program,” Wade said in a statement Tuesday. “As a result, it became evident that this risk adjustment mandate would put the company under significant financial strain.”’- Obamacare’s 14th Co-Op Is Closing Its Doors, and at Least 2 More Could Close Soon, dailysignal.com, 07/06/2016

Link to the entire article appears below:

http://dailysignal.com/2016/07/06/obamacares-14th-co-op-is-closing-its-doors-and-at-least-2-more-could-close-soon/