April 26, 2016
A large subsidy program that has helped insurers offering Affordable Care Act (ACA) compliant coverage in the individual market expires this year. In 2017, for the first time, insurance premiums alone must cover expenses in the individual market. A new working paper released today by the Mercatus Center at George Mason University measures the importance of this subsidy program, sheds new light on insurers’ generally poor results in 2014, and discusses what likely lies ahead for the law.
The study, authored by myself, Doug Badger of the Galen Institute and Ed Haislmaier of the Heritage Foundation contains two key findings. First, insurers incurred substantial losses overall despite receiving much larger back-end subsidies per enrollee through the ACA’s reinsurance program than they expected when they set their premiums for 2014. Second, we estimate that in the absence of the reinsurance program insurers would have had to set premiums 26% higher, on average, in order to avoid losses—assuming implausibly that the overall health of the risk pool would not have worsened as a result of the higher premiums. Our findings raise serious questions about the ACA’s future, particularly when the reinsurance program ends and premium revenue must be sufficient to cover expenses.
Source: New ACA Study Considers What Happens When Generous Government Subsidies End | Mercatus
April 19, 2016
UnitedHealth is withdrawing from most of the 34 ObamaCare Exchanges in which it currently sells, citing losses of $650 million in 2016. A recent Kaiser Family Foundation report indicates UnitedHealth’s departure will leave consumers on Oklahoma’s Exchange with only one choice of insurance carriers. Were UnitedHealth to exit all 34 states, the share of counties with only one or two carriers on the Exchange would rise from 36 percent to 52 percent, while the share of enrollees with only one or two carriers from which to choose would nearly double from 15 percent to 29 percent.
Source: Five Things ACA Supporters Don’t Want You To Know About UnitedHealth’s Withdrawal From ObamaCare – Forbes
March 26, 2016
The passage of Obamacare is perhaps the most important recent example. By CBO’s 2010 estimates, Obamacare authorized $940 billion in new spending to expand insurance coverage over its first ten years. Congress partly offset these costs with provisions for new revenue like the medical-device tax and the so-called “Cadillac tax” on expensive employer-sponsored plans. To make up the remaining difference, it relied on Medicare changes similar to proposals that had been considered previously in the Senate Finance Committee’s earlier draft of the legislation: changes to physician payments, cuts to Medicare Advantage, and new Hospital Insurance revenues. All told, the actuaries credited Obamacare with $575 billion in net Medicare savings — even as those savings were used to paper over the law’s new spending. These ten-year estimates have changed over time, as the law’s schedule did not provide for full implementation until several years into the initial ten-year budget window.
Source: Trust-Fund Budgeting > Publications > National Affairs
March 1, 2016
The Supreme Court in a 6-2 decision on Tuesday struck down Vermont’s requirement that self-funded insurers submit claims data to the state’s all-payer claims database (APCD).FROM OUR EXPERTSUsing claims to analyze physician performance? First, check your data. At issue in the case—Gobeille v. Liberty Mutual Insurance—was whether Vermont could require self-insured employer health plans to provide claims data for the state’s APCD, or whether the federal Employee Retirement Income Security Act (ERISA) prevented the state from doing so.The case has national implications: 18 states have such databases, and about 20 others are considering creating them, according to National Academy for State Health Policy Executive Director Trish Riley.
Source: SCOTUS sides against Vermont in all-payer data case | The Advisory Board Daily Briefing
March 1, 2016
Trump appears to be borrowing some of the language behind a traditional conservative Republican health reform proposal, which involves facilitating competition in health coverage through the sale and purchase of insurance products across states. It’s sometimes referred to as interstate competition or competitive federalism, or even just “consumer choice.” The origins of this proposal have a history of almost 15 years. Some business groups in the small-group market started floating the outlines of this idea in 2001. I wrote the first draft in policy terms at a Cato conference in July 2001, and subsequently published the academic-style version in the Cato Journal the following year. Then-Rep. Ernie Fletcher (R-KY) proposed the first legislative bill on this front in 2002. Subsequent tweaks to those concepts on Capitol Hill were championed by then-Rep. John Shadegg (R-AZ), and, in later years, by Rep. Tom Price (R-GA) and Rep. Marsha Blackburn (R-TN). Presidential candidate Ted Cruz introduced a bill similar to Blackburn’s in the U.S. Senate.
Source: The “Blurred Lines” of Trump’s Health Plan (He Knows You Want It) | Economics21
February 20, 2016
Earlier this month, Speaker Paul Ryan announced six task forces, each comprised of House Committee Chairmen, to develop a “bold, pro-growth agenda.” What was remarkable was that one of the task forces was on health care reform. Many had thought Congressional Republicans were investing too much time and energy grandstanding Obamacare repeal, and not enough developing a credible alternative.
That may have changed with the selection of four Committee Chairman to the Health Care Reform Task Force. They are: Budget Committee Chairman Tom Price (R-GA), Education & the Workforce Committee Chairman John Kline (R-MN), Energy & Commerce Committee Chairman Fred Upton (R-MI), and Ways & Means Committee Chairman Kevin Brady (R-TX).
Source: Believe It Or Not, The Republican Obamacare Replacement Plan Might Come Together – Forbes
February 20, 2016
Certificate-of-need (CON) laws in 36 states and the District of Columbia restrict competition in healthcare facilities markets by requiring healthcare providers to obtain permission before adding or expanding any regulated facilities or services. One such CON program, currently implemented by 26 states, regulates the establishment and expansion of ambulatory surgical centers (ASCs), “hospital substitutes” that provide select out-patient surgeries and procedures.
Proponents of regulating ASCs through a CON program express concern that ASCs will engage in “cream skimming,” selectively treating more profitable, less complicated, well-insured patients and leaving hospitals to treat the less profitable, more complicated, and uninsured patients. Under these circumstances, ASCs might cause hospitals to close, especially rural hospitals with slim profit margins—thus depriving rural populations of important medical services.
In a new empirical study for the Mercatus Center at George Mason University, scholars Thomas Stratmann and Christopher Koopman evaluate the impact of ASC CON regulations on the availability of rural health care. Their research shows that, despite the expressed goal of ensuring that rural populations have access to health care, CON states have fewer hospitals and ASCs on average—and fewer in rural areas—than non-CON states.
Source: Entry Regulation and Rural Health Care: Certificate-of-Need Laws, Ambulatory Surgical Centers, and Community Hospitals | Mercatus