October 18, 2016
Blue Cross and Blue Shield of North Carolina has announced it will increase premiums for Affordable Care Act plans on the individual market by an average 24.3 percent for 2017. Some consumers will pay more and some will pay less.
That is higher than the company’s original rate request filed in May for an 18.8 percent increase. The rate was approved by the state Department of Insurance, and Blue Cross announced it in a blog post.
Blue Cross received an average 32.5 percent rate increase for 2016 – one of the highest in the country. Critics of the ACA have contended the health reform law has been failing partly because premium increases for the individual market plans have been rising beyond expectations.
Source: Blue Cross and Blue Shield of North Carolina will increase premiums for Affordable Care Act plans on the online marketplace by an average 24.3 percent for 2017 | News & Observer
October 13, 2016
In a recent though little-noticed study, economist Ann C. Foster at the Bureau of Labor Statistics found that health costs made up a record 8% of an average household’s budget in 2014, the last year for which data is available. That’s a 40% jump compared to 10 years ago, and a 21% increase since 2010, the year the Patient Protection and Affordable Care Act was passed. Parts of the law were implemented shortly afterward but it wasn’t until 2014 that most of it took effect.
Source: Health-care costs eat up record 8% of household budgets in wake of Obamacare – MarketWatch
October 6, 2016
More than six years after the ACA’s passage, these promises can be measured against reality.
- It turns out that while the percentage of individuals without insurance has declined, enrollment in the exchanges is far below projections;
- exchange enrollees are much older and poorer than expected;
- competition in the individual market has decreased, rather than increased;
- rather than falling, premiums have increased significantly in both the individual and employer-sponsored markets;
- the law’s Medicaid expansion, which is responsible for the vast majority of rate decline in uninsured Americans, came at a far higher cost than expected;
- the law has increased, rather than decreased, overall healthcare spending; and
- the ACA has negatively affected economic growth, despite promises to the contrary.
Source: The Broken Promises of the Affordable Care Act | Mercatus Center
October 5, 2016
A growing proportion of Medicare beneficiaries are opting out of the government-run insurance program. They are instead choosing a private plan alternative, one of the Medicare Advantage plans. The strength of this trend defies predictions from the Congressional Budget Office, and nobody can fully explain it.
Here’s another mystery. Traditional Medicare spending growth has slowed, bucking historical trends and expectations. Though there are theories, we don’t fully know what’s causing that either.
Source: The two mysteries of Medicare | The Incidental Economist
August 19, 2016
UnitedHealth expects to lose $850 million on Obamacare in 2016, while Aetna, Anthem, and Humana are all on track to lose at least $300 million each on their ACA plans this year, according to company reports and estimates from Bloomberg Intelligence. UnitedHealth says it’s quitting 31 of the 34 states where it sells ACA policies. Humana is exiting 8 of 19 states and reducing its presence to just 156 counties, from 1,351 a year ago. Anthem hasn’t announced plans to change its participation in the program.
On Aug. 15, Aetna said it will stop selling Obamacare plans in 11 of the 15 states where it had participated in the program, reversing its plan to expand into five new state exchanges in 2017. “The exchanges are a mess as they exist today,” says Aetna Chief Executive Officer Mark Bertolini. “They’re losing a lot of money for a lot of people.”
Source: Obamacare’s in Trouble as Insurers Tire of Losing Money – Bloomberg
August 18, 2016
Barack Obama’s signature health-care law is struggling for one overriding reason: Selling mispriced insurance is a precarious business model.
Aetna Inc. dealt the Affordable Care Act a severe setback by announcing Monday it would drastically reduce its participation in its insurance exchanges. Its reason: The company was attracting much sicker patients than expected. Indeed, all five of the largest national insurers say they are losing money on their ACA policies and three, including Aetna, are pulling back from the exchanges as a result.
The problem isn’t technical or temporary; it’s intrinsic to how the law was written. By incentivizing insurers to misprice risk, the law has created an unstable dynamic. Total enrollment this year will be barely half the 22 million the Congressional Budget Office projected just three years ago. Premiums, meanwhile, are set to skyrocket, which will further hamper enrollment. It isn’t clear how this can be fixed.
Source: The Unstable Economics in Obama’s Health Law – WSJ
August 17, 2016
Exhibit 1 compares insurers’ projected per-member-per-month (pmpm) medical expenses with actual medical claims for ACA-compliant individual coverage in 2014.10 Across the market, medical claims were 5.7 percent higher than projected ($429 vs. $406 pmpm). Some insurers did considerably worse than others. The quartile of insurers with the highest claims (75th percentile) underestimated their claims by an average of 35 percent, whereas the lowest-claim quartile projected their claims much more accurately, within 4 percent, on average, similar to the average claims underestimate of 6 percent marketwide.
Source: How Has the Affordable Care Act Affected Health Insurers’ Financial Performance? – The Commonwealth Fund