March 5, 2014
The findings from HRMS show that nearly one in five (18.6 percent) of those with nongroup health insurance at the time of the survey report the plan they had in 2013 will no longer be offered to them because it did not meet new coverage requirements. Estimates from the NHIS indicate that approximately 14 million people had non-group coverage at a point in time. Identifying the number of people enrolled in non-group insurance is challenging. Estimates in Abraham et al. (2013) ranged from 9.55 million in the Medical Expenditure Panel Survey to 25.3 million in the American Community Survey. We use the NHIS estimate since it corresponds with more recent estimates based on new NAIC enrollment data reported in the Supplemental Health Care Exhibit (SHCE).
Using this estimate, our findings imply that roughly 2.6 million people would have reported that their plan would no longer be offered due to noncompliance with the ACA. Another 6 percent reported that their plan was cancelled for other reasons, and 75.4 percent reported that they did not receive a notice of cancellation
via How Many Nongroup Policies Were Canceled? Estimates From December 2013 – Health Affairs Blog.
March 5, 2014
The good news is you won’t have insurance companies to kick around much longer. The system is changing. As a result, insurance companies as they are now will be going away. Indeed, they are already evolving. For the next few years insurance companies will both continue to provide services to employers and, increasingly, compete against each other in the health insurance exchanges. In that role they will put together networks of physicians and hospitals and other services and set a premium. But because of health care reform, new actors will force insurance companies to evolve or become extinct. The accountable care organizations (ACOs) (which I discuss in Chapter 8 of my new book) and hospital systems will begin competing directly in the exchanges and for exclusive contracts with employers. These new organizations are delivery systems with networks of physicians and hospitals that provide comprehensive care. This health delivery structure is in its infancy.
via Ezekiel Emanuel Book Excerpt: End of Health Insurance Companies | New Republic.
February 20, 2014
The ACA’s individual tax penalty for not having health insurance is widely known. What is less well-known is that the ACA also imposed a tax that will fall on those who do buy health insurance. Recently, I examined this tax with an eye toward estimating how much this tax would increase average premiums. (The full report is here; a summary by Philip Klein of the Washington Examiner is here.)
via The Strange Effects Of The Health Insurance ‘Annual Fee’ Tax.
February 18, 2014
Industry sources tell the Washington Examiner’s Susan Ferrechio that the Barack Obama administration is thinking of extending the Affordable Care Act’s “risk corridors,” the federal reimbursement program for health-insurance companies that lose money by participating in the newly created health-care exchanges. This is not the first time we’ve seen this idea floated, and frankly, believing that the administration is considering it is all too easy.
via Obamacare’s Latest Surprise for Taxpayers? – Bloomberg.
February 8, 2014
Cigna Corp. CI -9.25% became the latest insurer to say it expected to lose money on the health-law marketplaces this year, citing smaller-than-expected enrollment and a skew toward older enrollees.
Humana Inc. HUM -0.71% and Aetna Inc. AET -1.71% also said this week that they expect negative margins on their exchange business in 2014.
The shortfalls stem at least partly from early glitches in the federal HealthCare.gov site that slowed sign-ups and the move to allow people to keep old, pre-health-law plans for an extra year.
Cigna Chief Executive David M. Cordani said the company is seeing “a much smaller book of business than anyone anticipated,” while “on average you have an older book of business.”
Cigna is now projecting around 50,000 to 60,000 exchange enrollees for 2014, less than half of its original expectation, he said. Cigna is selling marketplace plans in five states, and it is a small part of the company’s overall business. Analysts said the projections raise concerns that insurers may seek large premium hikes.
via Cigna Expects to Lose Money on Health-Law Marketplaces – WSJ.com.
February 7, 2014
Here’s the bottom line: Obamacare has failed miserably on nearly every major promise made about it (Grade: F). The processes used to enact and implement the law have been tarnished by actions of questionable legality and a pervasive lack of transparency (Grade: D). On actual outcomes, Obamacare has fared better in the short term (Grade: C+), but there are worrisome signs that by most measures, the law’s performance will get significantly worse by the time final grades are handed out.
I’ll admit, I’m a pretty tough grader. In this era of grade inflation, some Americans may be inclined to be more generous. But after doing this for nearly four decades, I think I’m a fairly good judge of health policy work and its likelihood of success when put into practice. We’re only at midterm, but I’d have to say the long-term outlook for Obamacare is very poor indeed.
via An Obamacare Report Card | The Weekly Standard.
February 7, 2014
Humana announced that it expects to tap the three risk adjustment mechanisms in ObamaCare for between $250 and $450 million in 2014. This amounts to about 25 percent of the insurer’s expected exchange revenue. This money is needed to offset losses that the insurer will take as a result of slower enrollment in its ObamaCare plans, and a skewed risk pool that weighs more heavily toward older and less healthy members than it originally budgeted.
More than half of the money will come from the $25 billion reinsurance pool that ObamaCare provides (collected through a tax on employer-sponsored health plans). The other half will come mostly from the risk corridors. Humana is expected to book the money as revenue to offset shortfalls between what it collects in exchange premiums and pays out in medical claims.
via Obamacare ‘Bailout’ For One Insurer Will Cost Up To $450 Million In 2014 – Forbes.
February 5, 2014
Humana estimates the insurance industry could one day reap revenue of about $100 billion annually from ACA exchanges. But revenue from Medicare Advantage is already above that and could reach about $600 billion as more baby boomers enroll. That demographic boost aside, growth could be strong simply because less than 30% of eligible people buy these add-ons today.
Unfortunately, the news from Washington on Medicare Advantage hasn\’t been good either. There has been a 13% cut in reimbursements over two years. One interpretation of such news on top of ACA uncertainty might be that insurers reliant on government programs like Humana make for riskier bets.
But the bungled Obamacare rollout suggests private-sector expertise is indispensable. Anyone who doubts that can visit HealthCare.gov.
via Humana Can Recover Fast From Obamacare Bug–Ahead of the Tape – WSJ.com.
February 5, 2014
WellPoint is also increasing the number of people it insures through Medicaid, as states rely more heavily on private companies to manage the program. About a year ago, the company bought Amerigroup, a large Medicaid managed care company. Selling coverage to the government now accounts for 45 percent of the company’s overall revenue, compared with 10 percent just a couple of years ago.
“We’ve made a big bet on the partnership with government,” said Mr. Swedish, a former hospital system executive who took over as chief executive of WellPoint less than a year ago and is at least partly responsible for the change in the company’s tone.
via WellPoint, a Onetime Critic of Health Law, May Yet Profit – NYTimes.com.
January 23, 2014
CEO Mark Bertolini told CNBC on Wednesday that Obamacare has failed to attract the uninsured, and he offered a scenario in which the insurance company could be forced to pull out of program.
The company will be submitting Obamacare rates for 2015 on May 15.
\”Are they going to be double-digit [increases] or are we going to get beat up because they\’re double-digit or are we just going to have to pull out of the program?\” Bertolini asked in a \”Squawk Box\” interview from the World Economic Forum in Davos, Switzerland. \”Those questions can\’t be answered until we see the population we have today. And we really don\’t have a good view on that.\”
via Aetna could be forced out of Obamacare: CEO Mark Bertolini.