Tag: "ObamaCare"

Have House Republicans Cast Their First Vote for Obamacare?

A similar version of this Health Alert appeared at Forbes.

Former Speaker of the U.S. Representatives Newt Gingrich said something last week that many feared, but few have been willing to admit: Republicans in Congress have no intention of repealing and replacing Obamacare with patient-centered health reform.

Faced with an interviewer who seemed to believe opposition to Obamacare is actually opposition to Barack Obama, and who suggested that after this president leaves office, opposition will soften, Mr. Gingrich accused his former colleagues of misrepresenting their commitment.

Now that we are in the twilight of the Obama presidency, and Republicans have majorities in both chambers of Congress, they should be able to put such charges to rest. Unfortunately, last week’s overwhelming bipartisan support in the House of Representatives for a deal to lock in Obamacare’s way of paying doctors sends a terrible signal.

Access to Health Care Unchanged After Obamacare’s First Year

The Centers for Disease Control and Prevention (CDC) has released early estimates of health insurance and access to health care for January through September 2014. The National Health Insurance Survey (NHIS) is (in my opinion) the most effective survey of health insurance, because it asks people three different but important questions: Are they uninsured at the time of the survey? Have they been uninsured for at least part of the year? Have they been uninsured for more than a year?

As shown in Figure 2, the proportion of long-term uninsured is about the same as it was circa 2000. The proportion of short-term uninsured has shrink a little in Obamacare’s first year.

F2

Health Insurers Just Fine Under Obamacare

New research from the Commonwealth Fund, a pro-Obamacare think tank, shows that health insurers are doing just fine under Obamacare.

Well, the stock market has been telling us that for years. The report’s purpose is to cheer the rebates that insurers which made too much money paid to consumers. Obamacare regulates the Medical Loss Ratio (MLR). If an insurer does not spend enough premium on medical claims, it has to pay a rebate to its beneficiaries.

Rebates have collapsed from over $1 billion in 2011 to $325 million in 2013. The report concludes that Obamacare caused insurers to reduce their overhead expenses and profits. Actually, there is less to this story than meets the eye. Exhibit 5 shows that there has been very little change in insurers’ income statements over the three years.

T5

(Source: Michael J. McCue & Michael A. Hall, The Federal Medical Loss Ratio Rule: Implications for Consumers in Year 3, New York, NY: Commonwealth Fund, March 2015, page 6.)

Obamacare is Driving Up Medicare Premiums

Obamacare includes a “health insurance providers fee” that is significantly increasing premiums. The fee is a fixed-dollar amount that is divvied up among insurers according to the amount of premium they write.

People who are really getting hit by this fee include Medicare Advantage beneficiaries who are enrolled in through retiree benefits. Because their former employers pay a share of their premium, the insurance fee has a disproportionate impact.

One reader sent me correspondence from his former employer’s HR department explaining why premiums are going up. In 2011, he paid $32.81 per month for both himself and his wife. In 2012 and 2013, the premium was $42.93. In 2014, it jumped up to $121.03, and $138.93 this year.

According the HR department, $40 (per person) of the 2014 increase was due to the fee, and $8-$10 of the 2015 increase:

CAM00132

Well, the total increase in premium for 2014 was $78.10. So, we can conclude that the increase was entirely accounted for by the fee. Indeed, their premium would have gone down a couple of bucks, if not for the fee. The same is true for the 2015 increase.

Premiums almost tripled, for the sole purpose of funding Obamacare. No wonder seniors want this repealed and replaced.

Congressional Budget Resolutions Shoot for the Sky; Miss Low-Hanging Fruit

The House Budget Committee and the Senate Budget Committee have passed budget resolutions that shoot for the sky with respect to health reform. Their proposals recommit the Republican majorities to patient-centered health reform and show a path forward for the next president. However, they do not harvest some low-hanging fruit offered by President Obama. Failure to do so might doom patient-centered health reform to the forever future.

Obamacare Beneficiaries 2.5 Times More Likely to Have HIV/AIDS Than Commercially Insured

One of our themes is that Obamacare causes health plans to attract the healthy and shun the sick. However, they do not succeed, according to a report by Prime Therapeutics, a pharmacy-benefit manager:

During tVariety of Medicine in Pill Bottleshe first year public health exchanges existed, Prime Therapeutics’ (Prime) members who enrolled in plans on these exchanges filled an average of 11.7 prescriptions, exceeding fills by commercial members by 13.6 percent. Public exchange members were also 2.5 times more likely to have hepatitis C or HIV, driving an almost 200 percent higher spend on related medicines.

More specifically, nearly $1 out of every $5 spent on drugs for public exchange members was spent to treat                                               hepatitis C or HIV.

The report also states that exchange beneficiaries are significantly older than commercially insured persons: 42.6 years versus 34.7 years old, on average. 28 percent of Obamacare beneficiaries were between 55 and 64 years old, versus only 16 percent of commercially insured persons.

Why does this matter? While Obamacare beneficiaries are older and sicker than people with employer-based benefits, they have less access to health services. Obamacare is not the right way to take care of these peoples’ needs.

Government and the Private Sector: The Case of eHealth, Inc.

Businessman Sitting at His DeskFor years now, Wall Street has cheered as Obamacare fuelled the stock prices of corporations in the healthcare industry. One of them was eHealth, Inc., a private health-insurance exchange that was founded in 1997.

Obamacare – in case you need reminding – mandates the purchase of private health insurance for working-age Americans above a low income. Last April, The Motley Fool’s Keith Speights speculated that eHealth might have been “Obamacare’s biggest winner”.

Well, that’s not how things turned out.

eHealth, has announced that it will lay off 15 percent of its workforce and take a restructuring charge of up to $4.7 million. This announcement followed horrific fourth quarter earnings.

Obamacare is Expensive and Difficult or Impossible to Afford

Obamacare is crushing agents and brokers, according to industry sources:

Amid the national debate over raising the federal minimum wage to $10 per hour, Scott Leavitt of Boise says he and his fellow advisors have been enrolling clients in their state’s health insurance exchange for an hourly wage that works out to about $4.50 – and sometimes even less. (Susan Rupe, InsuranceNewsNet)

And that is just the advisors. The same article also reports results from neutral or pro-Obamacare organizations like HealthPocket, Kaiser Family Foundation, and the Commonwealth Fund to show how much pain Obamacare is causing patients: Deductibles too high, premiums too expensive, and he whole shebang unaffordable.

 

Health Wonk Review

The latest Health Wonk Review (“Spring Forward Edition”) curated by Professor Brad Wright is posted at HealthWorks Collective. There are a lot of items about King vs. Burwell, the case against Obamacare’s subsidies to insurers in states that do not have their own exchanges.

Referring to my article, Professor Bradley writes that “Graham…… anticipates that the Court will find for the plaintiffs…..”, which is not quite the impression I wanted to give. I think that the plaintiffs are correct. However, I make no prediction whatsoever as to the Court’s decision.

Obamacare’s Second Open Season: Average Premium Up 23 Percent – After Subsidies

With enrollment data through February 22, the administration finally declared Obamacare’s second enrollment season closed and released its report on the results. (Although, people who have to pay Obamacare’s mandate/penalty/fine/tax as a result of information disclosed in their 2014 tax returns will have a special open enrollment in April).

Obamacare’s supporters cheered that enrollment hit 11.7 million people, exceeding the low-ball estimate of 9.1 million the administration made last November. Lost in the enthusiasm for Obamacare’s new high-water mark are a few uncomfortable facts.

First, the average premium — net of subsidies — has jumped 23 percent from 2014. In both years, insurers covering almost nine in ten Obamacare subscribers received subsidies to reduce premiums. The average monthly premium, before insurers receive subsidies, across all “metal” plans, is $364 in 2015. The average subsidy is $263, resulting in a net premium of $101 (Table 6). In 2014, the administration reported an average premium of $346, less an average tax credit of $264, for a net premium of $82 (Table 2). Therefore, the gross premium increased 5 percent but the subsidy declined by a scratch. Due to the power of leverage, this resulted in subscribers seeing an average premium jump of 23 percent.