Category: New Health Care Law

Employer Benefit Plans’ Subsidy of Obamacare Increased

The administration has just increased the amount it will play plans under one of the “3 R’s” of Obamacare. Reinsurance, risk corridors, and risk adjustment are three mechanisms the administration uses to protect insurers from losing money in Obamacare.

Last year, I focused my efforts on limiting risk corridors, which exposed taxpayers to a potentially unlimited liability. This had a largely successful legislative result in Congress. Now, reinsurance has become a problem. As Ed Haislmaier of The Heritage Foundation has explained, reinsurance taxes all plans, including those covering the employer-based group market, to reduce risk in Obamacare.

Well, the administration collected more money than it expected from this tax:

Medical Device Excise Tax Repeal? Not So Fast

As discussed a few days ago, the House of Representatives has voted to repeal Obamacare’s medical device excise tax. The tax itself, obviously, is harmful. However, putting this at the top of the “to do” list for the repeal effort is a curious priority.

Some conservatives are turning against the notion of repealing the tax on its own. Here’s Jeff Anderson of the 2017 Project:

Repealing Obamacare Would Grow Economy; Reduce Number of Insured by 10 Million

I have asked, and the Congressional Budget Office has answered.

I have been urging the CBO to do a comprehensive estimate of all the effects of the Affordable Care Act, effectively for the first time since 2012. It did so last week. The main take-away is that “repealing the ACA would increase GDP by about 0.7 percent in the 2021–2025 period, mostly because provisions of the law that are expected to reduce the supply of labor would be repealed.”

CBO concludes repeal would increase deficits. However, this effect is much smaller than previous estimates, because this is the first time CBO has used so-called “dynamic scoring” – taking macroeconomic effects of repeal into account – instead of just the simple (“static”) book-keeping type of estimate:

Top Health Insurance Expert: Republican Responses to King v. Burwell Will Fail

Forbes colleague and insurance industry veteran Robert Laszewski has reviewed Congressional Republicans’ potential responses to a victory in King v. Burwell, the lawsuit that could upset Obamacare’s tax credits, and found them deeply wanting.

With respect to the House Republican proposal to give (what are effectively) block grants of Obamacare money to states:

I have no earthly idea how a state might opt out and build a brand new health insurance system in just a few months—and do it for what might only be two years!

With respect to Senator Johnson’s proposal (which I previously discussed), he is equally dismissive:

Obamacare’s Shrinking Revenues: Medical Device Excise Tax

The House of Representatives voted today to repeal Obamacare’s medical device excise tax, the 2.3 percent tax levied on medical devices sold in the U.S. The tax is certainly harmful. Whether it deserves the highest priority is another question.

The bill was scored by the Congressional Budget Office (CBO), which determined that it will increase the deficit by over $24 billion in the next 10 years. We seldom see explicit budget scores of individual Obamacare taxes. This score overlaps the original 2010 CBO score for four years, 2016 through 2019. Comparing the two scores (see Table 1) shows how much the taxes estimated revenues have shrunk – 36 percent, from $12.7 billion to $8.1 billion over the period.

Obamacare Payments to Health Insurers Wildly Inaccurate

debtThe Office of the Inspector General of the U.S. Department of Health & Human Services has concluded that the administration has no clue if the billions of dollars it is paying to health insurers as Obamacare tax credits and cost-sharing subsidies are accurate:

We determined that CMS’s internal controls (i.e., processes put in place to prevent or detect any possible substantial errors) for calculating and authorizing financial assistance payments were not effective. Specifically, we found that CMS:

  • relied on issuer attestations that did not ensure that advance CSR payment rates identified as outliers were appropriate,
  • did not have systems in place to ensure that financial assistance payments were made on behalf of confirmed enrollees and in the correct amounts,
  • did not have systems in place for State marketplaces to submit enrollee eligibility data for financial assistance payments, and
  • did not always follow its guidance for calculating advance CSR payments and does not plan to perform a timely reconciliation of these payments.

The internal control deficiencies that we identified limited CMS’s ability to make accurate payments to QHP issuers. On the basis of our sample results, we concluded that CMS’s system of internal controls could not ensure that CMS made correct financial assistance payments during the period January through April 2014.

Just another day of Obamacare news.

King v. Burwell Round Up

King v. Burwell, the case that challenges the administration’s illegal payments of billions of dollars of tax credits in at least 34 states without state-established exchanges, may be decided this morning or no later than June 29 (or so I learn from legal blogs).

NCPA has a list of responsible responses to King v. Burwell, that should be acceptable to both Congress and the President. Yesterday’s Health Alert described one of them. Of course, we are not the only ones. Here’s what some others have to say about it.

Let’s start with some recent polling:

Kaiser Family Foundation: Congress should act. Kaiser Family Foundation’s June poll reports that 63 percent of respondents believed that “Congress should pass a law so that people in all states can be eligible for financial help” if the Supreme Court rules for the plaintiffs. This question is framed about as gentle as it can be. Who is against “financial help”? The poll also reports that more people are opposed to Obamacare than favor it (42 percent to 39 percent).

Pa., Del. to Identify as State-Based Exchanges

There seems to be a trend in the United States of people formerly identifiable as a person with one set of easily recognized characteristics deciding that they “identify” as having another set of characteristics.

This is also happening with Obamacare exchanges. The Supreme Court will soon announce its decision in King v. Burwell, resolving the question of whether Obamacare tax credits can be paid in states using the federal exchange (healthcare.gov) or only states with their own exchanges. Some states with federal exchanges are trying to “identify” them as state exchanges.

Pennsylvania is one. Delaware is too, but it is called a State Partnership Marketplace. These State Partnership Marketplaces are not defined in the Affordable Care Act. The law defines clear blue sky between state and federal exchanges, and that tax credits can only flow through state exchanges. This difference was supposed to create the incentive for states to establish exchanges. It did not work.

Obamacare Beneficiaries Skip Care

Kaiser Health News covers an issue we’ve discussed:

A key goal of the Affordable Care Act is to help people get health insurance who may have not been able to pay for it before. But the most popular plans – those with low monthly premiums – also have high deductibles and copays. And that can leave medical care still out of reach for some.

Renee Mitchell of Stone Mountain, Georgia is…… generally pleased with her insurance — a silver-level Obamacare plan. It’s the most popular type of plan with consumers because of the benefits it provides for the money. But she still struggles to keep up with her part of the bills. She is not alone. (Jim Burress, “Some Insured Patients Still Skip Care Because of High Costs”, June 10, 2015).

Here’s something to think about: Every penny of the billions of dollars taxpayers are paying to underwrite Obamacare goes to health insurers, either as premium tax credits via exchanges or cost-sharing subsidies for low-income households. Not one penny goes to the beneficiaries directly, so they can decide themselves which health goods and services to pay for.

Render Unto Caesar: Obama Preaches to Catholic Health Association

Yesterday, President Obama made a speech on healthcare to the Catholic Health Association’s meeting in Washington, DC, where the CHA celebrated its 100th anniversary. The president recycled his campaign speech, making many claims about the cost of care, medical bankruptcy, and uninsurance, all of which we have debunked countless times in this blog.

He also asserted that Obamacare created jobs, claiming the health law was responsible for job growth since 2010. In fact, quality job growth coming out of the Great Recession has been remarkably slow in comparison with previous recessions, as I discussed in a previous blog post.

The most depressing part of the speech was his cheering the CHA for its role in passing Obamacare: “We would not have succeeded, if it had not been for you.” He got that right. Hospital lobbyists were critical in dragging Obamacare over the line, and the CHA comprises the largest denominational trade association of hospitals.