Category: New Health Care Law

Obamacare Exchanges are as Broken as Ever

Let’s go into the Labor Day weekend with a reminder of something that the Administration would like us to forget: Obamacare’s exchanges are as broken as they ever were.

From October through March, the media enjoyed reporting on the countless glitches people were suffering as they tried to apply for Obamacare coverage at either healthcare.gov or a state exchange. Since the Administration announced that it had slightly exceeded its target enrollment, with 8.1 million people signed up, it decided to stop reporting subsequent enrollment in the exchanges.

Since April, these stories have receded from the headlines; but you don’t have to look very far to see that nothing has really been fixed in the exchanges. Here are a few stories from the last day or two:

Where’s the Obamacare Health Spending Boom?

A version of this post appeared at Forbes.

The Bureau of Economic Analysis has released the second estimate of second quarter Gross Domestic Product (GDP). There is good news — especially for those of us concerned with health policy.

First, the BEA seems to have figured out how to measure health spending under Obamacare, no longer giving huge updates to initial estimates, like it did in the first quarter. The second estimate is little revised from the advanced estimate: Real GDP increased by 4.2 percent (annualized) versus an advanced estimate of 4.0 percent; and health spending accounted for just 0.05 percent of the increase, versus an advanced estimate of 0.08 percent.

Can Taxpayers Recover Hundreds Of Millions of Dollars from Obamacare Exchanges?

The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services has just released a report on the contracts issued to private vendors to set up the federal pieces of Obamacare’s disastrous health insurance exchanges. This is only the first of a series of reports, and limits itself to describing the extent of the problem, not recommending solutions.

The OIG identified 60 contracts that started between January 2009 and January 2014. (That start date is a little mysterious, because Obamacare was not signed into law until March 2010.) The total estimated value of the contracts, when they were signed, was $1.7 billion.

Obamacare vs. America’s National Pastime

In case you still doubt that Obamacare’s costly mandates are causing employers to cut workers’ hours, you need to learn what it is doing to the game of baseball.

Last Tuesday’s game between the San Francisco Giants and the Chicago Cubs was marred by a farcical unrolling of the tarp when rain started pouring down. According to the Chicago Sun-Times:

The staffing issues that hamstrung the grounds crew Tuesday during a mad dash with the tarp under a sudden rainstorm were created in part by a wide-ranging reorganization last winter of game-day personnel, job descriptions and work limits designed to keep the seasonal workers — including much of the grounds crew — under 130 hours per month, according to numerous sources with direct knowledge.

Obamacare Enrollment is Shrinking

After Obamacare’s first open enrollment ended, the Administration stopped releasing enrollment figures. Jed Graham (no relation) of Investors Business Daily has been following the health insurers, and has come to a startling conclusion — Obamacare enrollment is dropping:

The nation’s third-largest health insurer had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects to fall to “just over 500,000″ by the end of the year.

Cigna (NYSE:CI) said that it expects its individual market customers, including more than 100,000 in the exchanges, to “move from 300,000 down to 280,000 in that range,” Cigna CEO David Cordani said in a conference call.

Good News for Obamacare? IRS Calculates Subsidies Right 99.97 Percent of the Time

We’ve previously discussed that income, citizenship, or immigration data cannot be reconciled for one quarter of Obamacare beneficiaries.

Well, it appears that the IRS (which pays tax credits to insurers based on the income and family size of people who enroll) has its act together, according to a July audit:

Our review of the IRS’s response to 101,018 IFSV (income and family size verification) information requests received by the IRS between October 1, 2013, and October 4, 2013, showed that the IRS provided accurate responses for 100,985 (99.97 percent) of the 101,018 requests based on the information furnished by the Exchange. We identified 33 requests for which the information contained in the CDR (Coverage Data Repository) did not reflect the most current name control for an individual for whom the Exchange was requesting information from the IRS. A name control is the first four letters in an individual’s last name, e.g., the name control for Smith would be SMIT. As a result, the IRS incorrectly notified the Exchange that it could not provide tax information for these individuals because the IRS was unable to match the name on the application to name control information maintained in the CDR. Our analysis of taxpayer account information for the individuals in these 33 requests showed that there was not a mismatch between the name provided by the Exchange and the name information contained in the individual’s tax account.

So, are Obamacare’s data problems solved? By no means: The critical term in the passage is “based on information furnished by the Exchange.” In other words: Garbage In, Garbage Out.

Obamacare Threatens Free Clinics

Obamacare’s most significant effect is an expansion in the number of people dependent on Medicaid, the joint state-federal welfare program for low-income people. Kaiser Health News points out that this is threatening the existence of free clinics. Some are signing up for Medicaid, while others are closing:

“We used to say…’wouldn’t it be great if we no longer had uninsured and we could close our doors and go out of business,’” said Michelle Goldman, CEO at the Eastern Panhandle Care Clinic in Ranson, W.Va., which is one of the free clinics now also taking Medicaid. “But the truth is we like the work we do and enjoy helping this population and believe we still have a lot to offer them.”

While a few free health clinics have shut their doors in Arkansas and Washington, most expansion-state non-profit free clinics are reassessing their business strategies. Medicaid offers the potential to give their patients better access to specialists, diagnostic testing and hospital care, and that’s created a sense of unease for operators of the clinics that for decades have played a key role in the nation’s health-care safety net.

Obamacare Architect: No Tax Credits for Federal Exchanges

Halbig versus Burwell is the famous lawsuit that claims that Obamacare federal health insurance exchanges cannot pay tax credits to health insurers. The plain language of the law is that only state-based Obamacare health insurance exchanges can channel these tax credits. The real champions of this argument are Michael Cannon and Jonathan Adler of the Cato Institute, who recently encapsulated their argument in the Wall Street Journal.

The question is still unsettled. Last week, two different Circuit Appeals Court panels came to different conclusions: The DC Circuit agreed that the subsidies could only go to insurers in state exchanges; while the 4th Circuit ruled that they could go through federal exchanges too.

The Administration is horrified that the Supreme Court could decide that it is illegal to subsidize insurers in federal exchanges. Most states have declined to set up their own exchanges. Further, some of those that did are closing up shop.

Obamacare Enrollment is Out of Control

Obamacare supporters have cheered an article in the New England Journal of Medicine that purports to show that 10.3 million people obtained coverage through June 30 due to Obamacare. Wow! That’s, like, over two million more than the Administration reported after the end of open enrollment in April! The article is essentially a re-purposing of the Gallup-Healthways surveys of the uninsured (which I have criticized) for an academic audience.

Let’s accept that after open enrollment, over two million more people have signed up for taxpayer-subsidized Obamacare coverage, either via health-insurance exchanges or Medicaid. Consider:

  • The Government Accountability Office recently sent a dozen “secret shoppers” to Obamacare exchanges, armed with false information about their eligibility for enrolment. Eleven of them were approved and enrolled.
  • Weeks after the open enrollment closed, the “back end” of Obamacare’s information-technology infrastructure was yet unbuilt; and the Administration has declined to report on its progress so far.

How Good is Obamacare for the Healthcare Industry?

Last Wednesday, NCPA hosted a briefing on Capitol Hill, where professors Tom Saving and Andy Rettenmaier discussed the findings of their latest issue brief on health spending and the Affordable Care Act. Part of their presentation was an analysis of the stock-market performance of companies in the health sector in the wake of Obamacare. As the chart below shows, the healthcare sector has outperformed the overall market on either side of the passage of Obamacare. Obamacare has not punished listed healthcare firms, and may well have boosted them.

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