Tag: "Health Reform"

ObamaCare Subsidies Wrong for More Than One in Eight ObamaCare Beneficiaries

The government may be paying incorrect subsidies to more than 1 million Americans for their health plans in the new federal insurance marketplace and has been unable so far to fix the errors…

So piles of unprocessed “proof” documents are sitting in a federal contractor’s Kentucky office, and the government continues to pay insurance subsidies that may be too generous or too meager. Administration officials do not yet know what proportion are overpayments or underpayments. Under current rules, people receiving unwarranted subsidies will be required to return the excess next year.

The problem means that potentially hundreds of thousands of people are receiving bigger subsidies than they deserve. They are part of a large group of Americans who listed incomes on their insurance applications that differ significantly — either too low or too high — from those on file with the Internal Revenue Service, documents show.

The government has identified these discrepancies but is stuck at the moment. Under federal rules, consumers are notified if there is a problem with their application and asked to upload or mail in pay stubs or other proof of their income. Only a fraction have done so, according to the documents. And, even when they have, the federal computer system at the heart of the insurance marketplace cannot match this proof with the application because that capability has yet to be built, according to the three individuals.

Source: Washington Post.

Wellness Fails Again

UntitledPepsiCo is the latest large employer to report that its wellness program has a negative return on investment, returning $0.48 for every dollar invested.

A voluntary program to help people manage actual diseases returned $3.78 per dollar invested.

The authors note that the results likely overstate the return on investment because they did not include the cost of program staff or the cost of employee time.

Beginning this year, ObamaCare requires that the government spend $200 million on wellness grants for small businesses that did not have a program in place when the law passed in 2010.

Urban Institute: Kill the Employer Mandate

Caduceus with First-aid KitA new report from the Urban Institute urges the end of the employer mandate. The mandate has little effect on coverage: 251.1 million people would have health insurance if the employer mandate is fully implemented, versus 250.9 million if it were repealed. However, the mandate hurts low-income workers, by influencing some employer to cut back both hours and headcount:

Creating arbitrary thresholds (e.g., potential penalties for firms of 50 or more workers not providing coverage for employees typically working 30 or more hours per week) for financial requirements will change the employment decisions in some firms, and at least some workers will be adversely affected by them.

(Linda Blumberg, John Holahan, & Matthew Buettgens, Why Not Just Eliminate The Employer Mandate?)

Update: Federal Taxpayers Have Spent $655 Million on Three State Exchanges That Have Shut Down

Here’s the list:

Maryland                 $171,013,111

Massachusetts        $179,036,455

Oregon                    $305,206,587

Total                       $655,256,153

(Phil Kerpen, The Federalist). See previous posts here and here.

ObamaCare Will More than Double Profit Margins for Hospitals’ Emergency Departments

Think ObamaCare is all bad news for hospitals? Not according to a new study:

Physician and Nurse Pushing GurneyWe estimated that hospital revenue from ED care exceeded costs for that care by $6.1 billion in 2009, representing a profit margin of 7.8 percent (net revenue expressed as a percentage of total revenue). However, this is primarily because hospitals make enough profit on the privately insured ($17 billion) to cover underpayment from all other payer groups, such as Medicare, Medicaid, and unreimbursed care. Assuming current payer reimbursement rates, ACA reforms could result in an additional 4.4-percentage-point increase in profit margins for hospital-based EDs compared to what could be the case without the reforms.

(Michael Wilson & David Cutler, Health Affairs)

Only 25 Percent of Eligible, Unsubsidized, Applicants Selected a Policy

After five months of open enrollment, the final ObamaCare numbers are in:

  • Of 13.5 million eligible enrollees, 8 million (59 percent) “selected” policies on ObamaCare exchanges;
  • Of 4.8 million eligible enrollees who will not get subsidies, 1.2 million (25 percent) “selected” policies; and
  • Of 8.7 million eligible enrollees who will get subsidies, 6.8 million (77 percent) “selected” policies.

Although the report gives excruciating details of age, gender, and ethnic identities of the applicants, the Administration still declines to report how many of those who “selected” policies have paid premiums, claiming that only insurers themselves have this information.

Even If You Pay Your ObamaCare Fine, You Won’t Be Able To Choose Your Own Health Plan

According to Sarah Kliff, the Administration has made…”a decision that industry officials say could trigger yet another wave of cancellation notices.”

The administration is targeting a type of coverage called fixed benefit or indemnity insurance, which give patients a fixed sum of money whenever they visit the doctor or land in a hospital.

The new rule would mainly affect people who had chosen to pay the individual mandate, or who were exempt from the mandate, and who bought a fixed-benefit plan as a stopgap. The Obama administration is saying that they can’t do that unless they also buy a more comprehensive plan.

The Cost of Failure

American Commitment’s Phil Kerpen has calculated the cost in the five states that have closed or are at risk of closing their exchanges:


Why ObamaCare is Never Likely to be Popular

Jonathan Bernstein at Bloomberg View:

Caduceus with First-aid KitFor most of us, ObamaCare isn’t that visible, and the benefits often are the least visible part. The biggest winners are probably those on expanded Medicaid, and I’m confident many of them don’t know they were helped by ObamaCare. Don’t expect it to get better; it’s going to be less and less likely that people will identify the benefits they are receiving with “ObamaCare.” In five years, plenty of those in the exchanges won’t realize that under the old system they would have had a pre-existing condition that would have barred them from being insured. Even if they realize that such a restriction once existed, they almost certainly won’t realize that their minor medical condition would have qualified.

Given all that, once Republican opposition guaranteed that the ACA would be controversial it was likely that it would poll badly, even if it worked well — and even if it worked so well it couldn’t be repealed.

Employers Switch from Commercial Insurance to Self-Insured Plans

According to Citibank’s top ranked analyst Carl McDonald:

By our analysis, since 2002, risk enrollment at the publicly traded plans has fallen by over 14 million lives…The emergence of private exchanges that rely on a risk model (like the exchange product offered by Aon Hewitt) could help slow the loss of risk enrollment but the benefits of self-funding are so significant for many employers that we believe risk enrollment will continue to shrink.