Obamacare’s sinking safety net

July 13, 2016

What’s happening in North Carolina is repeating itself in state after state across the country and represents the most acute structural threat to the marquee achievement of President Barack Obama’s presidency. A POLITICO review of 2015 financial filings from nearly 100 health plans across a dozen geographically and politically diverse states found that less than a quarter of them hit the standard break-even point for insurers, at which payouts are kept to about 85 percent of premiums taken in. And 40 percent of them had medical costs that outright exceeded the premiums they brought in. The bottom line: many of those insurers lost tens of millions of dollars on their Obamacare policies last year.

Source: Obamacare’s sinking safety net


Obamacare Going Bust | LifeZette

July 12, 2016

Haislmaier said that in the individual health insurance market, 15 companies had to pay penalties despite having a loss ratio of greater 116 percent, meaning that for every $1 they collected in premiums, they paid out $1.16 in claims. Yet those companies had to pay an average risk adjustment penalty of 7.7 percent of their premiums.

Source: Obamacare Going Bust | LifeZette


New ACA Study Considers What Happens When Generous Government Subsidies End | Mercatus

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


Five Things ACA Supporters Don’t Want You To Know About UnitedHealth’s Withdrawal From ObamaCare – Forbes

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


HHS $3.5 Billion Heist? | Doug’s Brief Case

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


CRS | Private Health Insurance Market Reforms in the Patient Protection and Affordable Care Act (ACA)

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


CBO Releases Report On Private Health Insurance Premiums And Federal Policy

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


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