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
February 19, 2016
The Department of Health and Human Services (HHS) announced Friday night that it was in the process of shorting the U.S. Treasury $3.5 billion.
Well, they didn’t exactly announce it. You had to read between the lines.The theft of $3.5 billion will help prop up insurers that have agreed to sell Obamacare policies in the individual market. Behind all the happy talk from Administration officials about the program’s success lies an unpleasant truth: insurers that participate in Obamacare exchanges are bleeding money.
Those losses are coming despite billions of dollars in handouts the government is providing the industry. Some of those handouts are entirely lawful; others, not so much.
Source: HHS $3.5 Billion Heist? | Doug’s Brief Case
February 17, 2016
Private Health Insurance Market Reforms in the Patient Protection and Affordable Care Act (ACA)
Annie L. Mach Analyst in Health Care Financing Bernadette Fernandez Specialist in Health Care Financing February 10, 2016
Full report: http://www.fas.org/sgp/crs/misc/R42069.pdf
February 12, 2016
On February 11, 2016, the Congressional Budget Office (with the Joint Committee on Taxation) released a report on Private Health Insurance Premiums and Federal Policy. The report examines the effects of federal subsidies, fees, and taxes; federal regulations; and actions taken by insurers on health insurance premiums. In particular it considers how the Affordable Care Act (ACA) has affected health insurance premiums. The Congressional Budget Office (CBO) did not conduct any original research on these topics. Rather the report describes what economic theory would predict regarding these effects and the limited empirical work that has been done as to what has happened so far under the ACA.
Source: CBO Releases Report On Private Health Insurance Premiums And Federal Policy
February 2, 2016
Today the Mercatus Center unveiled a study by Bradley Herring (Johns Hopkins University) and Erin Trish (University of Southern California) finding that the much-discussed health spending slowdown that continued in 2010-13 “can likely be explained by longstanding patterns” over more than two decades, rather than suggesting a recent policy correction. Projecting these factors forward and incorporating the effects of the Affordable Care Act’s health insurance coverage expansion provisions, Herring-Trish predict the expansion will produce a “likely increase in health care spending.”
Source: Obamacare Will Drive Health Care Costs Up | Economics21
January 11, 2016
In most states, health insurance premiums on the individual marketplace are rising by double digits under Obamacare. 17 states will face average premium increases of 20 percent or more. Iowans, for instance, will see their premiums spike by 22 percent this year. In Minnesota, Alaska, Tennessee, and Hawaii, rates will rise by 30 percent or more.
Source: 2016 Obamacare Premium Increases by State
December 16, 2015
Consumers buying health insurance through federal and state exchanges will see their monthly premiums for the popular silver-level plans jump by an average of more than 11%, while also likely facing higher deductibles, a new analysis of exchange data by the Robert Wood Johnson Foundation shows.
Source: State by state data show bigger 2016 exchange premium, deductible jumps