Category: New Health Care Law

Health Spending Grew 18 Percent Faster Than GDP in Twelve Months

According to the Altarum Institute, health spending rose 4.9 percent in the twelve months through August 2014. In the twelve months to July, it rose 5.1 percent, 18 percent more than the 4.3 percent growth in Gross Domestic Product (GDP):

The health spending share of GDP was 17.4% in July. This is up from 16.0% at the start of the recession in December 2007. This increase is partly attributable to slow GDP growth rather than high health spending growth, as the July 2014 health spending share of potential GDP (PGDP) was 16.7%.

Adverse Selection Got Worse as Obamacare’s Open Enrollment Progressed

New data from Express Scripts, a leading pharmacy-benefits manager (PBM) indicates that adverse selection in Obamacare exchanges actually got worse as open enrollment reached its hard finish in mid-April. As a PBM, Express Scripts has the best data on beneficiaries’ medical costs. Pharmacy claims are adjudicated immediately, whereas other claims can take weeks or months to adjudicate. We previously discussed Express Scripts’ study of pharmacy claims for the exchanges’ early sign-ups. These beneficiaries had specialty pharma claims 47 percent higher than the commercially insured population, which led to the conclusion that they were much, much sicker than expected.

The new release covers data for everyone who has signed up for coverage in Obamacare’s exchanges. There has been a lot of happy talk in the media that the huge sales and marketing surge in March (funded by taxpayers) likely led more healthy people to sign up at the end of open enrollment. In the most general sense, this is what happened, according to the new data. The later sign-ups were younger and in better shape when we consider only the more common conditions that are increasingly affecting our society, as shown in the graph:

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Obamacare’s War on Women Reduces Employment by 4 Million Full-Time Equivalent Workers

effCasey Mulligan of the University of Chicago has just released a study examining Obamacare’s impact on employment:

  • The ACA’s employment taxes create strong incentives to work less. The health subsidies’ structure will put millions in a position in which working part time (29 hours or fewer, as defined by the ACA) will yield more disposable income than working their normal full-time schedule.
  • The reduction in weekly employment due to these ACA disincentives is estimated to be about 3 percent, or about 4 million fewer full-time-equivalent workers. This is the aggregate result of the law’s employment disincentives, and is nearly double the impact most recently estimated by the Congressional Budget Office.
  • Nearly half of American workers will be affected by at least one of the ACA’s employment taxes — and this does not account for the indirect effect on others as the labor market adjusts.
  • The ACA will push more women than men into part-time work. Because a greater percentage of women work just above 30 hours per week, it is women who will be more likely to drop to part-time work as defined by the ACA.

Obamacare Veteran Sues Obamacare to Disclose Premiums

Here’s one from the “you can’t make this up” files:

The Department of Health and Human Services is in the spotlight for claims it is violating the Affordable Care Act.

The lawsuit was filed by Mehri & Skalet attorney Jay Angoff, who used to oversee ACA implementation for HHS. Filed on behalf of a Missouri consumer advocacy group, the suit claims the federal agency is not following through on its obligation to make rate filings for 2015 publicly available in time for the public to comment on them.

Get it? Mr Angoff “used to oversee ACA implementation for HHS.” He used to run Obamacare. Now, he’s running against it. Here’s why:

There is a tension in the Obamacare coalition. Open enrollment begins on November 15, a week and a half after the election. The current story on premiums for benchmark Obamacare plans in 2015 is that they will go down by just under one percent. This comes from a Kaiser Family Foundation survey of cities in only fifteen states.

Notwithstanding serious criticism of this claim, the media have swallowed and recycled it. For obvious political reasons, it is necessary for the Administration that no further announcements of premiums for the rest of the states disturb this comfortable narrative.

On the other hand, lawyers like Mr. Angoff are eager to see rate hikes in the double digits. Obamacare has funded states to empower their insurance commissioners to roll back premiums on political grounds. Lawyers like Mr. Angoff look forward to a tidy business representing exploited consumers in such states.

I agree that all Obamacare premiums for 2015 should be announced before the November 4 election, so that voters have the freshest information about Obamacare’s consequences. Whether Mr. Angoff’s lawsuit will have an effect in so short a time, we will have wait and see.

Obamacare Not Yet One Year Old, Providers Preparing to Lobby for More Money

Now that Obamacare is rounding out its first year, and seems to be secure for the time being, providers who advocated for it are starting to change their lobbying tune. When Obamacare was less secure, the story was that it would improve the situation dramatically — for everyone.

Unfortunately, providers are already starting to complain that it’s not enough; they need more money.

Exhibit A: Connecticut hospitals. For the first time that I have seen, a hospital association has reported that Obamacare did not reduce uncompensated-care costs. The Connecticut Hospital Association claims that uncompensated care increased slightly from 2013:

Obamacare Might Have Enrolled Only 2.3 Million; Spent $73 Billion to Save Less than $6 Billion in Uncompensated Care

Things change fast in Obamacare. Just yesterday, I discussed evidence that Obamacare had enrolled only 6 million people in subsidized, private plans on exchanges. Having read the U.S. Department of Health & Human Services’ (HHS’) latest report, it looks like the figure is only 2.3 million: “Based on an estimated 10.3 million decrease in the total number of uninsured and an estimated 8 million increase in the number covered by Medicaid, ASPE estimates that hospital uncompensated care costs will be $5.7 billion lower in 2014 than they otherwise would have been.” The difference between 10.3 million and 8 million is only 2.3 million, and that is quite a comedown from HHS’ May estimate that 8.1 million people “selected” private coverage in exchanges.

If we were asked to give a one-sentence justification for Obamacare’s increased federal spending on Medicaid or tax credits for private health insurance, it would go something like this: “People with health insurance will get timely primary care, and that will relieve the pressure on hospitals’ emergency departments.” This feel-good statement has been rolled out countless of times by advocates of so-called universal coverage. Empirically, it falls flat: Emergency departments are jammed with both Medicaid dependents and (somewhat less so) privately insured patients.

Obamacare Might Have Enrolled Only 6 Million (Not 8.1 Million)

I’ve been discussing evidence that Obamacare enrollment has been shrinking, and that the number of uninsured might have increased in 2014. Now, there’s more.

According to new research published by SNL Financial LC, which reviewed insurers’ filings at the National Association of Insurance Commissioners (NAIC) and California Department of Managed Care, the aggregate change in individual enrollment from the third quarter of 2013 to the second quarter of 2014 was just over 6 million. That period roughly corresponds to Obamacare’s open enrollment, after which the Administration announced 8.1 million enrollees.

Obamacare Will Devour Your Pay Raise

Mercer’s latest National Survey of Employer Sponsored Health Plans reports that the cost of employer-based benefits will jump significantly in 2015

Employers in the U.S. are predicting that health benefit cost per employee will rise by 3.9 percent on average in 2015, preliminary results from a new survey by Mercer reveal. Cost growth slowed to 2.1 percent in 2013, a 15-year low, but appears to be edging back up. Moreover, a higher percentage of employees signing up for coverage through the worksite could be a wildcard driving costs higher.

The projected increase for 2015 reflects actions employers plan to take to manage cost. If they make no changes to their plans for 2015, they predict that costs will rise by 5.9 percent on average. However, only 32 percent of respondents are simply renewing their existing plans without making changes.

Commonwealth Fund: Most Who Visited Obamacare Exchanges Rated Them Fair or Poor

The media have cheered the latest Commonwealth Fund survey of Americans who have tried to enroll in Obamacare plans on health-insurance exchanges. For those who actually read the report, the results are significantly worse for Obamacare than championed by the press release.

To put it bluntly: Visiting an Obamacare health insurance exchange to choose coverage is an experience you would not wish on your worst enemy. Things have gotten a little better during the year: Last October, 61 percent of respondents reported that it was “very difficult or impossible” to “find plans they needed and could afford by end of open enrollment,” and this had dropped in the April-June quarter to 54 percent (Exhibit 2). That is a significant improvement — but it is also a tricky question.

Obamacare Has Eliminated 350,000 Jobs, Cut Small-Biz Payrolls $22.6 Billion

New research published by the American Action Forum further corroborates our conclusion that Obamacare is harming U.S. employment. In a new scholarly paper, Ben Gitis and colleagues estimate that:

…Affordable Care Act (ACA) regulations are reducing small business (20 to 99 workers) pay by at least $22.6 billion annually. In addition, ACA regulations and rising premiums have reduced employment by more than 350,000 jobs nationwide, with five states losing more than 20,000 jobs.

We found that, on average, employees who work a full year for a business with 50-99 employees lose $935 annually due to ACA regulations, while employees of businesses with 20-49 employees, on average lose $827.50 annually.