December 11, 2013
In the meantime, HHS has set up a “fix” of dubious legality, in which the government pays insurers based on insurers’ own estimates of what they are owed. In addition, insurance industry sources tell me that the administration is leaning on carriers to pay for claims retroactively, so that people who consume medical services while uninsured will not blame the administration for it.
For the insurers who have been cooperating with the administration and participating in the exchanges—companies like Aetna, Humana, UnitedHealth, WellPoint, and Molina—this is a slap in the face. It’s starting to look like the insurers have battered-wife syndrome: they have such a dim view of their own political standing that they feel they have no choice but to do whatever the administration tells them to do.
via Obamacare Exchanges Claim 258,497 Sign-Ups In November, But No Word On How Many Are Actually Enrolled – Forbes.
December 4, 2013
With the automated payment system for the federal health insurance marketplace still under construction, the Obama administration will temporarily require insurers to manually submit their payment requests beginning in January.
The marketplace was supposed to calculate the amount of premium tax credits and cost-sharing benefits that low- and middle-income enrollees were eligible for after they sign up for marketplace coverage. The financial assistance would then be sent electronically to insurers to help pay for coverage.
But that payment delivery system is still under construction and will not be ready for use when insurers are due to receive the federal subsidies in January.
If the subsidy payments aren\’t received on time, consumers\’ health coverage could be jeopardized.
To avoid that possibility, insurers will submit their subsidy payment requests to the U.S. Department of Health and Human Services, which will verify the amounts and pay them electronically using the Medicare automated payment system.
via Washington: HHS temporarily scraps automated payments for insurers | Washington Watch | McClatchy DC.
December 3, 2013
Certain health plans sponsored by labor unions would be exempted from new fees imposed on insurance companies and on many self-insured group health plans.
Labor unions have been lobbying for such an exemption, saying the fees could be “highly disruptive” to Taft-Hartley plans administered jointly by labor and management representatives in construction, entertainment and other industries.
But Republicans denounced the administration proposal. Senator John Thune, Republican of South Dakota, said it would provide “special treatment to President Obama’s political allies.”
via Insurers Are Offered Assistance for Losses – NYTimes.com.
December 2, 2013
Even if it’s legal, though, the administration’s proposal won’t be popular. The risk-corridor program was supposed to be budget neutral: payments to plans that underestimated their medical losses would be matched by payments from plans that overestimated them. The assumption of budget neutrality was never very plausible, but this modification tosses it out the window. The revamped program will be expensive—and all in service of an administrative fix of questionable legality.
Just how expensive? The administration can’t say. “Because of the difficulty associated with predicting State enforcement of 2014 market rules and estimating the enrollment in transitional plans and in [qualified health plans], we cannot estimate the magnitude of this impact on aggregate risk corridors payments and charges at this time.”
In other words, the price tag will depend on how many old plans are renewed. The better the administrative fix works, the more it’ll cost.
via How and why the risk corridor program will cost more | The Incidental Economist.
November 22, 2013
Many middle-class Americans will be harmed by the design of Obamacare’s cost-sharing subsidies for lower-income exchange enrollees. Though relatively little attention has been given to this feature, understanding it is crucial to accurately projecting the results of its implementation.
Heritage Foundation Senior Fellow Ed Haislmaier has studied this feature of the bill and found that its effects will be unattractive for many Americans.
How do these cost-sharing subsidies work? Haislmaier explains that
they only apply to Silver plans…[that] are paid directly to the insurer, without the enrollee knowing the amount…. Thus, different individuals can purchase the same plan for the same, nominal premium, while, based on their different incomes, ending up with different deductible and co-pay levels for their coverage.
via Obamacare: How the Cost-Sharing Subsidies Produce Limited Access to Providers.
November 22, 2013
The dilemma for Democrats: If additional states go California\’s way, more people who may have preferred their old plans will lose them, despite the president\’s promise, now withdrawn, that the health law would allow people to keep plans they liked.
Among states with Democratic governors, nine including California have said they won\’t allow carriers to renew the plans in 2014, seven have said they will and four were still deciding as of Thursday.
via Health-Law Change Spurs Tussle Among Overhaul Backers – WSJ.com.
November 22, 2013
The Obama administration plans to push back by a month the second-year start of enrollment in its health program to give insurers more time to adjust to growing pains in the U.S. law, a move that may stave off higher premiums before the 2014 congressional elections.
The enrollment period, previously scheduled to begin Oct. 15, 2014, will now start Nov. 15, said an official with the U.S. Department of Health and Human Services who asked not to be identified because the decision isn’t public. The change is important to insurers that need more time to evaluate the first year of the government-run marketplaces.
via Insurers to Get Extra Month to Set 2015 Obamacare Rates – Bloomberg.
November 21, 2013
In theory, insurer payments to and from the program should cancel each other out, with no need for payments from the federal treasury. That’s what the Congressional Budget Office assumed when it scored the provision as revenue neutral back in 2010. And Obama recently told insurers that the government’s financial support has limits.
But the text of the law is clear, and it places no limits on how much this program may pay insurers. It gives, in essence, a blank check to the secretary of health and human services to make payments to insurers to cover their losses.
Insurers may very well need it. They stand to suffer major financial losses, because Obama’s action incentivizes healthy individuals to stick with “grandfathered” plans that offer fewer benefits and higher out-of-pocket costs, while pushing sick individuals into the mandate-laden health insurance policies being offered on Obamacare’s exchanges. But the Obama administration has already hinted that it will use the risk corridors program to “provide additional assistance” to insurance companies looking for a bailout. Senator Marco Rubio of Florida and Representative Tim Griffin of Arkansas, both Republicans, are out with legislation this week to repeal the risk corridor program — undoubtedly a populist stroke that will win plaudits in many circles.
via Obamacare’s New Blank Check for Insurers – Bloomberg.
November 16, 2013
“This is absurd,” he said. The president, he said, made a “purely political decision” that punts his problem squarely into the laps of state insurance commissioners. “It’s unfair to us and our citizens.” A number of other state officials, both Democrats and Republicans, echoed Mr. Harrison’s frustration but were not willing to speak on the record.
This issue is arguably the biggest headache for the dozen or so states — from New York to California — that have their own exchanges, some of which are working reasonably well. “We did everything Obama wanted, and this is the thanks we get,” said one high-ranking official in a state with its own exchange. “I can’t tell you how fed up we are.”
Insurance commissioners who had not decided how to proceed Friday were kicking around various compromises, according to officials who declined to be identified because of policies against speaking to the news media.
via After Obama Meeting, Insurers Question Plan’s Workability – NYTimes.com.
November 8, 2013
A provision in the Affordable Care Act that waived patients\’ payments for colonoscopies is an example of how good intentions in the law can lead to a tangle of unforeseen consequences.
Colonoscopies are on the ACA\’s list of screening procedures for which patients are not supposed to pay a cost share — the deductible and copayment. The requirement took effect in September 2010 and applies to most members of health plans.
This provision has been widely praised. At a time when rising deductibles can push the patient\’s cost share for a colonoscopy to well over $1,000, financial disincentives are removed for a procedure that clearly has been shown to save lives.
Reality Behind \”Good Concept\”
However, insurance plans are still forcing colonoscopy patients to pay the cost share in many cases.
via ACA: When Is a Screening Not a Screening?.