Archive | Health Care Bill – Washington

Fiscal Diagnosis Only Gets Tougher for Health Care Law

For Democratic lawmakers who were hesitant to sign onto the sweeping 2010 health care law, one of the most powerful selling points was that the Affordable Care Act would actually reduce the federal budget deficit, despite the additional costs of extending health insurance coverage to the uninsured. Four years after enactment it’s unclear whether the health care law is still on track to reduce the deficit or whether it may actually end up adding to the federal debt. In fact, the answer to that question has become something of a mystery.

  • In its latest report on the law, the Congressional Budget Office said it is no longer possible to assess the overall fiscal impact of the law. That conclusion came as a surprise to some fiscal experts in Washington and is drawing concern. And without a clear picture of the law’s overall financing, it could make it politically easier to continue delaying pieces of it, including revenue raisers, because any resulting cost increases might be hidden.

Charles Blahous, a senior research fellow at George Mason University’s free market-oriented Mercatus Center, calls the CBO’s inability to estimate the net effect of the law “a real problem.”

“The ACA’s financing provisions were assumed to be effective so as to get a favorable score out of CBO upon enactment, but no one is keeping track of whether they’re being enforced,” says Blahous, a public trustee for Social Security and Medicare. “We receive occasional updates on the gross costs of the law, but none on whether the previously projected savings provisions are producing what was originally projected.” “There’s no barrier to continually rolling back the financing mechanisms without the effect on the ACA’s finances ever being fully disclosed.”

  • When Congress passed the health care law in 2010, the CBO estimated it would reduce the deficit by more than $120 billion over a decade, compared to the agency’s current-law baseline projection of spending, revenue and the deficit. That meant the health care law would, in effect, pay for itself and deliver an additional fiscal bonus.

The CBO based its estimate on the assumption that the law, which included hundreds of billions of dollars’ worth of Medicare cuts and tax increases to pay for health care subsidies, would be implemented as written. Now, after a chaotic start and a series of delays or adjustments in various provisions of the act, including an employer mandate that was expected to bring in new tax revenue, it’s unclear to what extent those promised savings are being realized.

Limited Analysis

  • In a little-noticed footnote to a report issued in April, “Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act,” the CBO wrote that it and the Joint Committee on Taxation “can no longer determine exactly how the provisions of the ACA that are not related to the expansion of health insurance coverage have affected their projections of direct spending and revenues.”

The CBO nevertheless maintained in the report that, based on an earlier analysis in 2012, apart from the insurance provisions in the law, “many other provisions, on net, are expected to reduce budget deficits.” Still, that analysis is effectively a ballpark figure since the CBO did not include a precise estimate of the law’s overall budgetary impact. “They don’t want to admit that what they assumed two years ago is no longer correct because the administration has not implemented many provisions of the law.”

But Dan Mendelson, who runs Avalere Health, a consulting company, says that after a number of years, it’s always hard to track the fiscal effects of a law.

  • “It becomes very difficult in a fiscally valid way to assess the impact of legislation because so many other things change at the same time,” says Mendelson, who served as associate director for health at the Office of Management and Budget during the Clinton administration. “It gets hard to isolate the effects.”

Mendelson adds that “at a certain point it becomes irrelevant because it’s all part of the baseline of expenditures. It’s current law. And if somebody wants to repeal some portion of that law, then you can assess in a targeted way what that would cost or what the spending impact would be.”

  • The CBO did say that one element of the law’s fiscal impact is relatively clear: its changes to insurance coverage.

In its April report, the CBO updated its estimates of the budgetary effects of the health insurance coverage provisions of the law, including insurance subsidies, the Medicaid expansion, penalties paid by employers and individuals for not providing or purchasing insurance, and the excise tax on high-premium insurance plans.

Compared with its February 2014 baseline, the CBO said payments of penalties generated by the employer and individual mandates were projected to fall by $18 billion over a 10-year period. Still, because the cost of subsidies and related spending was estimated to fall even more, the agency said the insurance provisions would cost $104 billion less over the 10-year period than projected two months before.

Beyond insurance changes, though, the deficit effects of the law are much harder to analyze.

While CBO can isolate and reassess the provisions of the ACA that expanded insurance coverage, it cannot perform the same analysis on the portions of the law that modified existing federal programs and made changes to the tax code. “Isolating the incremental effects of those provisions on previously existing programs and revenue four years after enactment of ACA is not possible,” the CBO said.

In its original score of the law in March 2010, the CBO said the insurance provisions would cost $788 billion between 2010 and 2019. But that cost would be more than offset by $511 billion in spending cuts, primarily to Medicare, and $420 billion in new revenue, much of it generated by new taxes on hospital insurance and manufacturers of drugs and medical devices. As a result, the CBO estimated at the time, the health care law would reduce the deficit by $143 billion over 10 years, compared to the agency’s current law baseline. The vast majority of the savings — $124 billion — was supposed to come from the health care portion of the law, but another $19 billion would be derived from changes to student loans and grants.

Two-Year-Old Estimate

The last time the CBO produced an estimate based on the entire law was in 2012, when the agency said that a GOP proposal to repeal the law would add $109 billion to the deficit over a 10-year period. That implies the CBO still thought two years ago that the law would save money.

Since then, the administration has made numerous adjustments to the implementation of the law, reducing the revenue it was supposed to raise or savings it was expected to achieve. Last year, for example, the IRS delayed the employer mandate until 2015 from 2014. And earlier this year, the agency extended the delay for another year for certain employers. In its April report, CBO estimated the delay in the employer mandate would cost the government $3 billion in penalty payments in 2016.

The health care law also mandated cuts to Medicare, but the savings related to the Medicare Advantage program have been somewhat reduced by an administration pilot project that boosted bonus payments to Medicare Advantage plans since 2011.

In 2010, the CBO projected the health care law would cut Medicare as well as some Medicaid and related spending by $455 billion between 2010 and 2019.

But in a letter to House Speaker John A. Boehner in 2012, the CBO provided an updated estimate that suggested those savings may be increasing. According to that letter, repealing the law would increase Medicare and related spending by $741 billion from 2013 to 2022, which implies that keeping the law on the books would save the same amount.

Paul N. Van de Water, a senior fellow at the left leaning Center on Budget and Policy Priorities and former assistant director for budget analysis at the CBO, argues the adjustments in the law will have little fiscal impact as long as they remain temporary.

“I don’t think that any of the delays that you’re talking about are likely to turn the law from one that reduces the deficit into one that increases it,” he says. Van de Water argues that the specific Medicare cuts in the ACA are being implemented. Two of the key tax increases in the law took effect last year, he added — a 0.9 percent increase in Medicare payroll tax rate, and a 3.8 percent tax on dividends and interest, both for upper income brackets. “My strong instinct is that all of these changes are going to leave the basic financial impact picture of the law much the same,” he says.

But to Blahous, the delays stoke doubts about the viability of other cost-saving measures in the law that have yet to be implemented and may be more painful and politically challenging. “The question is, if things haven’t been enforced to date, is it really a valid assumption to assume they will be fully enforced going forward?” he says. “You have this sort of invisible undoing of the financing of the ACA. But it doesn’t appear anywhere in the scorekeeping, because we assume it’s not going to happen in the future, and we’re not keeping track of it happening in the past.”

If the employer mandate were repealed rather than just delayed, for example, it would cost the government an estimated $106 billion in lost revenue between 2013 and 2022, the CBO said in 2012.

Blahous notes the delays are not surprising, since the law was pushed through Congress with little Republican input or support.

“This is what happens when a vast new spending program is passed on a partisan basis,” Blahous says. “Those who opposed the law have no stake in enforcing the provisions required to finance it. Those who enacted the ACA don’t want sole political ownership of its tax increases, penalties and Medicare spending cuts, so they scale them back.”

*Modified from a Rollcall.com article

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Analysts predict most employer-provided insurance will disappear as ObamaCare takes hold

Across the political spectrum, analysts now say that 80 to 90 percent of employer-provided insurance, the mainstay of American health coverage for decades, will disappear as ObamaCare takes hold.

The research firm S&P IQ predicts less than 10 percent of those who get insurance at work will still get it there ten years from now.

  • “The companies will really be hard pressed to justify why they would continue to have to spend the kind of money they spend by offering insurance through corporate plans when there’s an alternative that’s subsidized by the government” said Michael Thompson, head of S&P IQ.

Even a former adviser to President Obama, Zeke Emanuel, predicted less than 20 percent who now get employer-provided insurance will still get it ten years from now. He wrote in his book “Reinventing American Health Care” that “By 2025 few private-sector employers will still be providing health insurance.”

  • The reason analysts see this historic change in health coverage is because the tax penalty for not offering insurance — $2,000 per worker– is so much less than the cost of providing it.

John Goodman of the National Center for Policy Analysis explained that, “for a worker making only $15 an hour, typical employer coverage for a family costs $15,000 or $16,000, that’s more than half of that worker’s annual wage.”

  • “It would be too compelling for companies to not put their employees into exchanges. It’s just way too compelling.” To make it compelling to workers, as well, employers can bump up workers’ pay to help cover the deductibles and other costs in ObamaCare.

Former Congressional Budget Office Director Doug Holtz-Eakin  said,”you could give them more, so after taxes they end up with the same and the math says you still come out ahead. And so employers have been doing this math ever since the law passed. I expect for them to get to the exits pretty quickly.”

  • Employers would also get rid of the headache and uncertainty of providing insurance, he noted. “Most people are not in the health insurance business they are manufacturers, exporters, they are service providers. And they would rather stick to that than worry about health insurance.”

Goodman added, “they don’t want to be in the health insurance business. So if they see a low cost way to get out of it, many will jump at the chance.”

  • So employers can offer more pay to workers, pay the fine and still come out ahead, while workers would still get health care.

The only losers in all this would be the federal deficit and taxpayers, since many workers going into ObamaCare would qualify for subsidies, driving up the cost.

*Modified from a Foxnews.com article

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Employees hit with higher health insurance premiums

More employees are getting hit with higher health insurance premiums and co-payments, and many don’t have the money to cover unexpected medical expenses, a new report finds.

  • More than half of companies (56%) increased employees’ share of health care premiums or co-payments for doctors’ visits in 2013, and 59% of employers say they intend to do the same in 2014, according to the annual Aflac WorkForces Report. It’s based on a survey of 1,856 employers and 5,209 employees at small, medium and large-size companies.

In 2013, 19% of companies implemented a major medical plan with a high deductible (more than $1,000) and Health Savings Accounts as an alternative to a traditional medical plan, the study finds.

  • Employees are worried about covering their medical costs: 49% have less than $1,000 to pay for unexpected out-of-pocket medical expenses; 53% would borrow from their 401(k)s or credit cards to cover unexpected medical costs; 66% say they wouldn’t be able to adjust to the large financial costs associated with a serious injury or illness.

The survey also showed 69% of workers at least somewhat agree that they regularly underestimate the total costs of an injury or illness, including medical, household and out-of-pocket expenses. Many employees are in a “fragile financial situation” and couldn’t afford the out-of-pocket expenses of many medical situations.

The need to control costs is driving many companies’ decisions on benefits, Owenby says. The report shows that almost half of employers (49%) agree that controlling costs is the primary objective, and took steps to contain costs, including:

• 39% hired independent contractors or consultants.

• 32% eliminated or delayed raises.

• 22% eliminated or cut back on benefits.

• 21% changed some full-time workers to part-time workers.

The report notes that the Kaiser Family Foundation finds that health care premiums have increased 80% since 2003, nearly three times as fast as wages (31%) and inflation (27%).

*Modified from a USA Today article

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Cost-control plan for health care could cost you

You just might want to pay attention to the latest health insurance jargon. It could mean thousands of dollars out of your pocket.

  • The Obama administration has given the go-ahead for a new cost-control strategy called “reference pricing.” It lets insurers and employers put a dollar limit on what health plans pay for some expensive procedures, such as knee and hip replacements.

*Some experts worry that patients could be surprised with big medical bills they must pay themselves, undercutting financial protections in the new health care law. That would happen if patients picked a more expensive hospital — even if it’s part of the insurer’s network.

  • The administration’s decision affects most job-based plans as well as the new insurance exchanges.

How does “reference pricing” work? It treats anything above the flat-rate limit covered by insurers as out-of-network costs, even if a patient is seeing a provider inside the network. Before ObamaCare, insurers would negotiate in-network prices for these procedures, and providers were forced to accept them as payment in full. Now providers will have much less incentive to agree to that kind of pricing structure, and instead go after the patients for the balance.

  • As if to rub salt in the wounds, the overage won’t count as out-of-pocket expenses. The Obama administration loudly insisted on such caps to protect consumers, and used those caps as proof that the ACA would keep Americans from facing bankruptcy over an illness. Reference pricing all but buries the caps, though. If a patient needed a $40,000 operation but the insurer only had a $30K reference price on it, the patient would have to cough up the other $10,000 plus all of the deductibles and out-of-pocket expenses otherwise under the cap. The AP notes this with some concern:

*That’s crucial because under the health care law, most plans have to pick up the entire cost of care after a patient hits the annual out-of-pocket limit, currently $6,350 for single coverage and $12,700 for a family plan. Before the May 2 administration ruling, it was unclear whether reference pricing violated this key financial protection for consumers.

It’s not on the radar yet for most people, but the new approach is gaining ground. The Mercer benefits consulting firm said 12 percent of the largest employers were using reference pricing last year, nearly double the 7 percent in 2012.

*Modified from an AP.org, and Hotmail.com web articles.

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New McKinsey Survey: 74% Of Obamacare Sign-Ups Were Previously Insured

As stated by Avik Roy in a May 10th Forbes.com article, “One of the principal flaws in the coverage of Obamacare’s exchange enrollment numbers to date has been that the press has not made distinctions between those who have “signed up” for Obamacare-based plans, and those who have actually paid for those plans and thereby achieved enrollment in health insurance. A new survey from McKinsey indicates that a large majority of people signing up are now paying for their coverage. This is progress for the health law. But the survey still indicates that three-fourths of enrollees were previously insured.”

“Two months ago, I wrote about a prior McKinsey survey that found that the vast majority of people signing up for individual-market coverage in 2014 were previously insured, and that of the minority who had been previously uninsured, only 53 percent had paid their first month’s premium.”

The upshot of that figure was that of the people shopping for coverage on their own who had actually enrolled in a new plan in 2014, the vast majority had been previously insured. Another way to say that is that for all of the talk about 7-million this and 8-million that, the Obamacare exchanges’ expansion of coverage to the uninsured was far smaller.

  • New data: 83% of previously uninsured have paid up

The new McKinsey report, authored by Amit Bhardwaj, Erica Coe, Jenny Cordina, and Ruchira Sara, indicates that the proportion of uninsured individuals paying for coverage has shot up, from 53 percent in February to 83 percent in April. For previously insured individuals, the percentage of payers increased from 86 to 89 percent.

The survey data was collected from 2,874 individuals whose incomes made them ineligible for Medicaid: above 100 percent of the Federal Poverty Level in states that haven’t expanded Medicaid, and above 138 percent in states that have. (For a childless adult, this means incomes above $11,670 or $16,105, respectively.) 1,434 of those polled—roughly half of the sample—were previously uninsured, of which 83 percent were eligible for exchange-based subsidies.

53 percent of those who enrolled in 2014 coverage did so by renewing their 2013 plan or enrolling in a plan before the January 1 deadline that made many old plans illegal. The remainder of enrollees “selected a new 2014 ACA plan,” of which nearly two-thirds signed up through an ACA exchange.

  • Only 22% of Obamacare sign-ups are paid, previously uninsured enrollees

*However, the proportion of individuals purchasing ACA plans who had been previously uninsured remained low. In February, McKinsey reported that only 27 percent of those selecting a new 2014 plan were previously uninsured; in April, the proportion was 26 percent.

Combining that with the payment figures: of the people signing up for new ACA plans in 2014, only 22 percent were previously uninsured individuals who have paid for coverage and therefore enrolled in health insurance. That’s a meaningful improvement from February’s 14 percent figure, but it’s still low.

*”Combining all of this data: of the 8 million sign-ups on the exchange, we can only be confident that around 1.7 million are previously uninsured and enrolled. We can add another 865,000 or so for those purchasing coverage off the exchange, for a total of 2.6 million previously uninsured individual-market enrollees.”

  • McKinsey data consistent with feedback from insurers

Earlier this week, representatives of the insurance industry testified before the House Energy and Commerce Committee regarding enrollment trends in the exchanges. Four of the five witnesses stated that more than 80 percent of their sign-ups had paid for coverage. That’s consistent with what McKinsey found, and also with my own discussions with insurers.

  • Bottom line: Exchanges are having modest impact on the uninsured

Obamacare is beginning to expand coverage to the uninsured; however, it’s far from clear that the exchanges specifically are a primary engine. At most around 930,000 people have gained coverage from Obamacare’s under-26 “slacker mandate” (not 3 million, as is commonly suggested); another 3 million or so have gained coverage from the law’s expansion of Medicaid. Approximately 2.6 million previously uninsured individuals have obtained coverage through the ACA exchanges and the related off-exchange individual markets; however, the off-exchange purchases are mostly unsubsidized, and therefore can’t necessarily be credited to Obamacare.

  • What the exchanges appear to be doing is mainly helping people who were previously insured. If you’re 62 years old, say, and your income is $30,000, and you were paying for your own coverage before, you’re now eligible for plans that are much cheaper for you, thanks to taxpayer-funded subsidies and higher premiums for young people.

Of course that means that other people are paying more. “My old plan was canceled under Obamacare,” an exasperated Californian told me last week. “The new Obamacare plan costs twice as much, and the deductibles are higher. And yet Obama is counting me as one of his 8 million people!” But hey—at least he has maternity coverage.

*Modified from a Forbes.com article, and a just released McKinsey survey

 

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2.7 Million ObamaCare Enrollees Still Unaccounted For

Affordable Care Act: President Obama has for a while been bragging that 8 million people have signed up for ObamaCare. But the administration still hasn’t released the state-by-state numbers to back up that number.

As a result, we still don’t know where 2.7 million ObamaCare enrollees came from.

Here’s what we do know:

  • The exchanges run by 15 states and Washington, D.C., have reported final enrollment numbers at least through March, and most have numbers through April 15. The combined total for these exchanges is 2.6 million.

  • For the remaining 36 states, all we have are the numbers HHS released through February. At that point, these states accounted for 2.7 million sign-ups.

  • Add the two together, and you get 5.3 million. That means roughly 2.7 million must have signed up in just these 36 states after March 1 to reach the 8 million mark. And that means enrollment in these states must have doubled in just the last six weeks of a 28-week open enrollment period.

  • To call this an incredible achievement is putting it mildly, particularly since the state-run exchanges saw enrollment climb only 62% in those final six weeks.

So where did these 2.7 million come from? We won’t know until the HHS report comes out, which presumably could be any day now. But even if Obama can account for these fantastic gains, there are still several questions that need answering.

First, of course, is: How many have paid?

  • Georgia says that only 48% of the 221,604 who enrolled through March 31 have paid their premiums. In South Carolina, only 59% of the 114,789 who enrolled through April 15 had done so.

  • Another question: Do the numbers account for people who dropped coverage earlier? We know at least some have been kicked off for nonpayment, and others canceled their plans for one reason or another. Is HHS netting out these losses, or is it simply adding new enrollment numbers on top of the old ones?

  • And, did the agency screen out duplicate enrollments? One broker told us that in the last month his company was encouraged to simply start a new application if something went wrong during the process, so as to speed things up. He figures 30% of the ObamaCare applications his firm handled in the home stretch were duplicates. Did these get counted in the final tally?

The mainstream media, unfortunately, have shown zero interest in trying to make sense of these numbers, much less independently verify them. Instead, they obeyed Obama’s command to “move on.”

But until we get more data, and get answers to these questions, we’re reluctant to accept any ObamaCare numbers put out by this administration.

Modified from an IBD.com article

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Obama Says Health-Insurance Enrollees Reach Eight Million

WASHINGTON—President Barack Obama said Thursday that eight million people had picked health-insurance plans through the Affordable Care Act, a number that significantly outstripped initial projections and emboldened him to step up criticism of Republicans seeking to repeal the law.

The eight million sign-ups go beyond earlier projections by the Congressional Budget Office that six or seven million people would enroll through the exchanges in 2014. Mr. Obama pointed to the number to declare the law a success and that Republicans should stop trying to overturn it.

“The point is, the repeal debate is and should be over,” the president said. “The Affordable Care Act is working and I know the American people don’t want us spending the next 2½ years refighting the settled political battles of the last five years.”

Some 35% of those who signed up through the federal health-insurance exchange were in the coveted under-35 demographic, Mr. Obama said. The participation of younger, relatively healthy people is needed to balance out the cost of medical claims from older and sicker ones.

The announcement contained few other new details about enrollment. Republicans quickly pointed to missing information—such as the number of people who had actually gained coverage after being uninsured, as opposed to those replacing an existing policy—to suggest the figures could be overblown as a measure of success.

Democrats up for re-election in the fall have been bracing for a renewed debate around the law as the Senate prepares to hold confirmation hearings for a successor to Health and Human Services Secretary Kathleen Sebelius, whose resignation was announced last week.

Rep. Carol Shea-Porter (D., N.H.), who has come under strong criticism from Republicans for supporting the law and is in a tough race for re-election, called the development great news. She has made her frustrations with the law known to the Obama administration, but she said Thursday she has also heard from constituents in both parties who have been helped by the law. “The Affordable Care Act still has challenges, but today’s news is clearly a giant step forward,” she said in a statement.

Polls regularly show that while opinion remains sharply divided over the law and more people dislike it than like it, a majority of Americans don’t want it repealed. The White House has seized on that finding, and on Thursday Mr. Obama also suggested that the final enrollment numbers could provide Democrats with some measure of political cover amid a likely barrage of election-year attacks.

“If Republicans want to spend all their time talking about repealing a law that’s working, that’s their business,” Mr. Obama said. “I think what Democrats should do is not be defensive, but we need to move on and focus on the things that are really important to the American people right now.”

GOP lawmakers continued to emphasize information not contained in the numbers, including how many people have paid their first month’s premium, the final step in enrolling for insurance.

“How many of those who have signed up were among the millions who had their plans canceled? How many were already insured but forced to sign up for an Obamacare plan?” said Sen. Lamar Alexander (R., Tenn.). “This law promised to insure the uninsured, let those who liked their insurance keep it, and lower the cost of insurance—let’s talk about what the law was supposed to do instead of how many millions of people the president has so far forced into Obamacare.”

The new total reflects people who had signed up through April 15 through the federal and state exchanges, the last date on which most Americans were allowed to finish applications. The official enrollment deadline had been March 31, but the federal exchanges gave people who tried to sign up but got stuck in long lines or computer overloads an additional 15 days to finish their applications. Most states offered similar extensions.

Bringing the uninsured into the health system was a key promise in Mr. Obama’s push for the law. Federal officials said earlier that only insurers know how many people have paid their first month’s premium, and that they aren’t collecting information on what proportion of enrollees had been uninsured.

The president’s announcement didn’t include state-by-state information about enrollment, which will be key to determining premiums for 2015 and beyond since each state’s insurance market is different and rates are based on the makeup of people who sign up within each.

White House officials said Thursday that 28% of the enrollees in the federally run exchanges serving 36 states are in the 18-34 demographic. Some 7% are children covered by family plans. The administration didn’t release demographic information for the 14 states running their own exchanges.

Insurance officials previously said 80% to 85% of enrollees paid the first month’s premium, a proportion that would suggest the administration will ultimately hit enrollment targets for the exchanges for 2014 even if some people drop out or have picked more than one plan and are overrepresented in the numbers, especially since some people who have a change in their life circumstances such as a divorce or job loss are still allowed to sign up after March 31.

The figures represent a slight increase in young people compared with the previous five months. The administration said earlier that through Feb. 28, about 4.2 million people were covered by plans picked via the federal and state-run exchanges. Of those, 25% were 18 to 34, and 6% were children covered by family plans.

The mix of younger people buying coverage is considered by health plans to be crucial in determining future insurance prices. Under the law, insurers no longer can charge premiums based on health histories, and are restricted in how much more they can charge older consumers.

Mr. Obama offered a muted warning about premiums next year, saying he expected them to rise, though he also said they had done so before the law was passed because of the increase in health costs.

The president also criticized states that opted not to expand their Medicaid programs to include all adults making around the poverty line, a decision made available to them after the Supreme Court ruled in June 2012 that they couldn’t be required to participate in that part of the health law.

Governors and legislators in 24 states, most of whom are Republicans, say they don’t believe state budgets or Washington can withstand the additional costs of expanding Medicaid.

Mr. Obama on Thursday characterized the decision as one motivated by “political spite.”

“That’s wrong. It should stop,” he said. “Those folks should be able to get health insurance like everybody else.

*Modified from a WSJ.com article

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ObamaCare makes it more difficult to buy insurance year-round

Here’s more fallout from the health care law: Until now, customers could walk into an insurance office or go online to buy standard health care coverage any time of year. Not anymore.

Many people who didn’t sign up during the government’s open enrollment period that ended Monday will soon find it difficult or impossible to get insured this year, even if they go directly to a private company and money is no object.

  • With limited exceptions, insurers are refusing to sell to individuals after the enrollment period for HealthCare.gov and the state marketplaces. They will lock out the young and healthy as well as the sick or injured. Those who want to switch plans also are affected. The next wide-open chance to enroll comes in November for coverage in 2015.

It’s a little-noted consequence of President Obama’s health care overhaul, which requires nearly all Americans to be insured or pay a fine and requires insurers to accept people with health problems.

  • Those who act now may still be able to get in, depending on where they live. Following the lead of the government marketplaces, some companies are extending off-marketplace sales for a week or a month to help people who hit snags trying to enroll by this week’s deadline. Rules vary from state to state.

After those extensions, eligibility for coverage during 2014 is guaranteed only for people who experience certain qualifying life events, such as losing a job that provided insurance, moving to a new state, getting married, having a baby or losing coverage under a parent’s health plan.

  • The federal law doesn’t prevent companies from selling policies to everyone all year. But insurers consider it too risky now that the law prohibits them from rejecting people in poor health.

“If you didn’t have an open enrollment period, you would have people who would potentially enroll when they get sick and dis-enroll when they get better,” said a spokesman for insurer Kaiser Permanente. “The only insured people would be sick people, which would make insurance unaffordable for everyone.”

  • A survey by the Kaiser Family Foundation in mid-March found that 6 out of 10 people without insurance weren’t aware of the marketplace deadline on March 31. The Obama administration, insurance companies and nonprofit groups scrambled to spread the word, often with messages that focused on the cost savings available to many people through the government marketplaces.

There wasn’t much public discussion about people who prefer to buy policies outside the marketplaces, sometimes finding better deals or options more to their liking.

  • A Health and Human Services spokesman pointed to a cryptic note on the HealthCare.gov website: It says “in some limited cases some insurance companies may sell private health plans outside the marketplace and outside open enrollment” that satisfy the law’s coverage mandate. It doesn’t say how to find any companies doing that.

A health law expert at the Kaiser Family Foundation, said it’s “highly unlikely” that companies will offer such coverage after the deadline window fully closes. Some do still offer temporary plans, lasting from a month to a year. But those plans don’t cover pre-existing conditions and don’t get buyers off the hook for the law’s tax penalty.

*Modified from a FoxNews.com article

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15-20 Percent Aren’t Paying Obamacare Premiums, Insurer Says

New data from a major insurer suggest real enrollment is at roughly 6 million. One of the biggest players in Obamacare’s exchanges says 15 to 20 percent of its new customers aren’t paying their first premium—which means they’re not actually covered.

  • The latest data come from the Blue Cross Blue Shield Association, whose members—known collectively as “Blues” plans—are participating in the exchanges in almost every state. Roughly 80 to 85 percent of people who selected a Blues plan through the exchanges went on to pay their first month’s premium, a BCBSA spokeswoman said Wednesday.

The new statistics, particularly from such a large carrier, help define how many people are actually getting covered under the Affordable Care Act.

  • The Blues’ experience is in line with anecdotal estimates from other insurance executives, who indicated earlier in the enrollment process that they received payments from about 80 percent of people who selected their plans. The Blues’ latest estimate includes policies that took effect Feb. 1 or earlier, the spokeswoman said.

Some health care analysts have suggested that the payment rate could improve later in the enrollment window, as plans had more time to track down consumers who hadn’t paid.

  • Wherever the final number ends up, it will be the real measure of how many people are actually covered through the Affordable Care Act’s exchanges. The Obama administration has been releasing the number of people who selected a plan, but says it doesn’t have accurate data on how many have actually paid. And consumers don’t have coverage they can use until they make that first payment.

If the nationwide payment rate, across all carriers, remains at 80 to 85 percent, the 7.1 million sign-ups Obama announced Tuesday would translate into somewhere between 5.7 and 6 million people who are actually covered.

*Modified from a Nationaljournal.com article

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O-Care premiums to skyrocket

Health industry officials say ObamaCare-related premiums will double in some parts of the country, countering claims recently made by the administration. The expected rate hikes will be announced in the coming months, and the sticker shock would likely hamper ObamaCare insurance enrollment efforts in 2015.

The industry complaints come less than a week after Health and Human Services (HHS) Secretary Kathleen Sebelius sought to downplay concerns about rising premiums in the healthcare sector. She told lawmakers rates would increase in 2015 but grow more slowly than in the past. “The increases are far less significant than what they were prior to the Affordable Care Act,” the secretary said in testimony before the House Ways and Means Committee.

  • Her comment baffled insurance officials, who said it runs counter to the industry’s consensus about next year. “It’s pretty shortsighted because I think everybody knows that the way the exchange has rolled out … is going to lead to higher costs,” said one senior insurance executive who requested anonymity.

The insurance official, who hails from a populous swing state, said his company expects to triple its rates next year on the ObamaCare exchange. The hikes are expected to vary substantially by region, state and carrier.

Areas of the country with older, sicker or smaller populations are likely to be hit hardest, while others might not see substantial increases at all.

Much will depend on how firms are coping with the healthcare law’s raft of new fees and regulatory restrictions, according to another industry official.

  • Some insurers initially underpriced their policies to begin with, expecting to raise rates in the second year. But insurance officials are quick to emphasize that any spikes would be a consequence of delays and changes in ObamaCare’s rollout.

They point out that the administration, after a massive public outcry, eased their policies to allow people to keep their old health plans. That kept some healthy people in place, instead of making them jump into the new exchanges.

  • Perhaps most important, insurers have been disappointed that young people only make up about one-quarter of the enrollees in plans through the insurance exchanges, according to public figures that were released earlier this year. That ratio might change in the weeks ahead because the administration anticipates many more people in their 20s and 30s will sign up close to the March 31 enrollment deadline. Many insurers, however, don’t share that optimism

“We’re exasperated,” said the senior insurance official. “All of these major delays on very significant portions of the law are going to change what it’s going to cost.”

  • “My gut tells me that, for some people, these increases will be significant,” said Bill Hoagland, a former executive at Cigna and current senior vice president at the Bipartisan Policy Center. Hoagland said Sebelius was seeking to “soften up the American public” to the likelihood that premiums will rise, despite promises to the contrary.

Insurers will begin the process this spring by filing their rate proposals with state officials. Insurance commissioners will then release the rates sometime this summer, usually when they’re approved. Insurers could also leak their rates earlier as a political statement.

Jon Gruber, who also helped design the Affordable Care Act, said, “The bottom line is that we just don’t know. Premiums were rising 7 to 10 percent a year before the law. So the question is whether we will see a continuation of that sort of single digit increase, or whether it will be larger.”

In Iowa, rates are expected to rise 100 percent on the exchange and by double digits on the larger, employer-based market, according to a recent article in the Business Record.

*Modified from a Hill.com article

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