Tag: "ObamaCare"

Obamacare 2016 Rate Hikes Still Double Digits

When the first wave of Obamacare’s 2016 double-digit rate hit, defenders insisted that these were outliers. Well, those rate hikes keep coming, especially from insurers with large market share:

Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected. Federal officials say they are determined to see that the requests are scaled back.

Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, according to documents posted online by the federal government and state insurance commissioners and interviews with insurance executives.

(Robert Pear, “Health Insurance Companies Seek Big Rate Increases for 2016,” New York Times, July 3, 2015)

Oregon Health Plans Ordered to Raise Rates!

All that complaining about double-digit Obamacare rate hikes for 2016? Well, at least one Insurance Commissioner thinks they’re not high enough. Plans in Oregon have lost so much money on Obamacare that the state’s Insurance Commissioner fears for their solvency unless they hike premiums more than they have asked for:

The Oregon Insurance Division says it is pushing health insurers to charge higher individual rates in 2016 because they are reporting huge underwriting losses for 2014.

The insurers collected just $703 million in premiums for 2014 and spent $830 million on 2014 claims, officials say.

(Alison Bell, “5 Oregon insurers under orders to raise their rates,” LifeHealthPro, June 19, 2015)

Strict Antitrust Review for Health Insurers, Hospitals

As Obamacare accelerates the transformation of the U.S. health sector into a complex of regulated utilities, providers are concentrating into oligopolies. The Wall Street Journal reports that the U.S. Department of Justice will use “strict review” when considering mergers of health insurers, while the Federal Trade Commission will also review hospital mergers closely:

The prospect of consolidation poses high stakes for the Obama administration, whose signature domestic policy legacy is the 2010 health-care law. Some aspects of the health law were designed to increase insurance-industry competition, including marketplaces for health coverage and the creation of new nonprofit cooperative health plans around the country.

But the law also includes provisions that may have helped inspire consolidation, at least indirectly.

(B. Kendall & A. Wilde Mathews, “DOJ Girds for Strict Review of Any Health-Insurers Mergers,” Wall Street Journal, June 28, 2015)

Obamacare and Employer-Based Benefits

(A version of this Health Alert was published by American Thinker.)

Now that we have over one full year of ObamaCare under our belts, a mystery is unfolding: What is happening to employer-based benefits? Data from different sources convey widely different messages, but until we solve this mystery, it is difficult to predict the political future of President Obama’s troubled health reform law.

The puzzle is obscured by the media’s focus on topline figures, which indicate significant increases in the number of insured people, including millions added to Medicaid, the joint state-federal program for low-income households. In truth, it is inappropriate to categorize Medicaid dependents as “insured” — for the same reason it is inappropriate to consider jobless people who receive cash welfare benefits as “employed.” The fiscal difference between people who depend on government benefits and those who do not is one of kind, not of degree.

But how should we classify consumers covered through the ObamaCare exchanges? Are they government dependents or not? The issue is tricky.

41 Percent of Obamacare Silver Plans Have “Small” or “Extra Small” Networks

Since the King v. Burwell decision, some have re-branded Obamacare as SCOTUScare, per Justice Scalia’s dissent. However, a better term may be “Medicaid Plus,” because Obamacare beneficiaries have little access to care.

New research sponsored by the pro-Obamacare Robert Wood Johnson Foundation confirms that Obamacare plans have limited access to physicians. The research defines a network as small if no more than 25 percent of physicians in an area are covered, and extra small if it covers less than 10 percent. The results:

  • The “narrowness” or size of a network can be quantified, and 41 percent of silver plan physician networks in the ACA marketplace are small or extra small.
  • While consumers are likely to select plans with low premiums, they are not fully aware of the characteristics of narrow networks.
  • Well-functioning narrow networks will survive only if their characteristics are communicated more clearly to consumers and they are regulated to ensure adequacy.

SCOTUS Boosts Obamacare With Gay Marriage Ruling

I thought I knew everything about Obamacare until Charles Gaba pointed out that King v. Burwell was not the only Supreme Court decision to boost Obamacare. This morning’s decision on gay marriage may boost Obamacare enrollment numbers somewhat, because it will lead to more same-sex marriages this summer, which is an event that triggers special enrollment:

In short, there’s no way of knowing what impact today’s ruling will have, and many of my estimates above are completely pulled out of thin air, I admit, but I wouldn’t be surprised to see a minor bump in effectuated exchange enrollments of perhaps 100,000 people nationally over the summer and early fall…..

The U.S. Department of Health & Human Services lost no time promoting the opportunity, sending out this tweet a few hours ago:

SCOTUS Saves Republicans in King v. Burwell

Health insurance veteran Bob Laszweski takes a contrarian approach to the Supreme Court upholding Obamacare tax credits in at least 34 states that did not establish their own exchanges. Instead of a loss for Obamacare opponents, Mr. Laszewski believes Republicans were saved from stealing defeat from the jaws of victory in King v. Burwell:

First, as any of us who know the market can appreciate, the Court just saved the Republicans from themselves. They were in no way ready to avoid the crisis that would have engulfed the individual market––half of those people on the exchange who would have lost their subsidies and the other half off-exchange that would have seen 30% to 50% rate increases––on top of the big increases already announced––without a quick fix.

The attempt to scuttle the law through the Supreme Court was ill conceived and Republicans are very lucky it did not happen.

Now Obamacare has to stand on its own going into the 2016 elections and the growing evidence is that won’t be any easier.

Health Insurers Consolidate on Business; Fragment on Policy

A few days ago, this blog discussed the wave of consolidation among health insurers. The two main deals discussed in the business press are Anthem’s bid for CIGNA and the likely takeover of Humana by a bigger insurer which wants to beef up its Medicare Advantage and/or Medicaid managed care business.

While this consolidation plays out, the policy world was surprised to see the largest insurer, UnitedHealth Group (UNH), pull out of AHIP, the health plans’ trade association. Both parties soft-pedalled the exit of the association’s largest member.

I do not plan to speculate recklessly on the reasons for the exit. UNH noted that its “diversified portfolio” is not best served by membership in AHIP. UNH has two very distinct businesses, UnitedHealth Group and Optum. The former is a health insurer and the latter a vendor of big-data analytics. UNH consistently stresses that they are different businesses, to the degree that it sometimes verges on denying it is a health insurer at all.

King v. Burwell: Health Insurers Rally

Health insurers’ shares enjoyed a nice rally today, as the Supreme Court endorsed the tax credits they receive via Obamacare exchanges. On a day when the S&P inched up 0.30 percent, health plans jumped:

Aetna – 3.99 percent

UnitedHealth Group – 2.65 percent

Cigna – 2.43 percent

Humana – 7.13 percent

Anthem – 1.41 percent.

Obamacare Beyond the Handouts

In the wake of the Supreme Court’s ruling, Holman Jenkin’s column from this morning’s Wall Street Journal is telling:

By one standard no government program can fail, and that’s the standard being applied to ObamaCare by its supporters: If a program exists and delivers benefits, the program is working.

And the polls indeed show that 74% of ObamaCare’s eight million enrollees are “satisfied” with their plans, because the polls fail to count the 12 million who are eligible but decline to enroll.

Steve Rattner, a Wall Street figure and President Obama’s former auto-bailout czar, insists in a recent New York Times op-ed that ObamaCare “is working,” by which he apparently means it’s in operation, which nobody denies. Mr. Rattner, like a lot of analysts, writes as if costs are benefits—as if millions of people lining up for something from the wallets of their fellow citizens, ipso facto, is proof of a worthwhile program.

I think Mr. Jenkins might be too gentle on Obamacare. Nevertheless, I appreciate his point. In fact, 86 percent is a remarkably low share of satisfied customers for something they get for free.

Just think: If the government (or anyone) just gave you $3,000 or more in cash, surely 100 percent of us would be “satisfied” with the program.