Category Archives: ObamaCare

The subsidies keep coming!

Don’t expect anything that looks intelligent for a few years yet… mrossol

The WSJ. 2/24/2021 

We’ve been telling readers about the progressive policy priorities hitching a ride on Congress’s “Covid relief” bill. That includes shoveling billions into the Affordable Care Act, with the goal of making government insurance a middle-class entitlement on the way to Medicare for All.

Provisions of the $1.9 trillion bill moving through the House make Affordable Care Act subsidies more generous and available even to the affluent. Buying an ObamaCare policy makes sense if a subsidy shields you from fearsome premiums and out-of-pocket costs; more than 85% of enrollees receive such a subsidy. But those who earn too much to qualify for government subsidies have been fleeing the exchanges. The Centers for Medicare and Medicaid Servicessaid last fall that unsubsidized enrollment dropped 45% between 2016 and 2019.


Instead of making the underlying product better or less expensive, Democrats now want to pass more of the cost onto taxpayers. More low-income buyers would pay little to nothing for insurance. Democrats would also remove the income cap for receiving subsidies, which is 400% of the poverty line, and reduce a person’s maximum contribution to 8.5% of income from 10%.


The ObamaCare “subsidy cliff” is poor policy that punishes Americans for working and earning more, but now government will spend scarce resources on those who don’t need help. Brian Blase of the Galen Institute has pointed out that a family of four headed by a 60-year-old earning $240,000 could qualify for a nearly $9,000 subsidy. These are not the folks hit hard by the pandemic, many of whom are eligible for Medicaid.

The supersized subsidies would cost $34 billion over two years but that is merely the beginning. The politics are such that the benefit will never be revoked. The more generous subsidies will be captured by insurers, who will continue to raise premiums, and the specter of high costs will push lawmakers to intervene again. Rinse, repeat. Smaller businesses may move their workers onto the exchanges instead of offering their own insurance.

The House bill also offers a temporary five-percentage-point increase in federal funding to states that decide to expand Medicaid to childless, prime-age adults above the poverty line. This has nothing to do with Covid relief.

Texas, Florida and 10 other states declined to expand Medicaid as part of the Affordable Care Act, and that decision looks smart in retrospect. States have spent more money on more enrolleeswithout improving emergency room visit rates or other health outcomes, while burning a hole in state budgets. State legislators will have to tie themselves to the mast amid interest-group demands to take advantage of “free” money from the feds.

Oh, and would you like to pay more at the counter for your prescription drugs? Democrats have you covered. Here’s how: Drug manufacturers are required to offer steep discounts to Medicaid, and these discounts are capped at 100% of the average manufacturer price of the drug. House Democrats would remove that cap.

Some companies could end up paying state Medicaid programs to take their drugs. The cost of such Medicaid dysfunction is spread across commercial markets, raising drug prices elsewhere, and it is one reason some diabetics pay too much for insulin.

Democrats will talk all of this up as merely helping struggling Americans get health coverage. The true plan is to continue to chip away at private health insurance, creating more market dysfunction that they will later claim to solve with more government insurance.


Trump has no Ideas??

Oh how I wish Republicans would learn how to sell what they have accomplished? They are absolute _ _ _ _ _ _ _ s.
WSJ 11/5/2018
Americans say health care is a leading concern in Tuesday’s election, and voters say they trust Democrats over Republicans by double-digit margins. Yet the Trump Administration has put together an impressive suite of reforms that allow consumers more freedom and personal choice, not that you’ll read about it anywhere else.

Last month the Trump Administration rolled out a rule on health-reimbursement arrangements that would allow employers to offer workers tax-exempt dollars to buy insurance in the individual market. The Obama Administration banned this via regulation as part of the Affordable Care Act.

The Administration’s thinking is that these arrangements will be most attractive to small firms that lack the economies of scale that make offering insurance affordable. About 30% of workers at firms with three to 24 employees are covered by employer health benefits, down from 44% in 2010, according to Kaiser Family Foundation data. Eight in 10 companies with fewer than 200 employees offer only one plan.

Health reimbursements would be a cheap and easy option for, say, startups. This is also a way to offer more individuals the tax break on health care that employer insurance receives. Ending this economic distortion for everyone would be preferable, but equal treatment is a step forward.


The reflexive response from Democrats is that this is another effort to undermine the Affordable Care Act, but they need a new script. The rule will draw more young and healthy workers into the individual market, which currently skews toward the sick or those poor enough to be eligible for tax-credit subsidies. Reimbursements should make the ObamaCare exchanges more stable, which is what Democrats claim to want.

The rule includes guardrails to prevent employers from dumping sick employees onto the exchanges, and to prevent a person from getting both employer contributions and public subsidies. The Administration expects that some 800,000 employers will provide reimbursement arrangements to more than 10 million employees. Some three million will have been buying coverage on the individual market, meaning the rule should save the fisc money on increasingly expensive tax credits.

By failing to repeal ObamaCare, Republicans can’t address all of its dysfunctions. But at the margin by expanding choices they are making the individual market better, not worse, even as Democrats accuse them of sabotaging ObamaCare. Other new Trump options include short-term plans and association health plans. And unlike ObamaCare, the government isn’t coercing you to buy these products.

Speaking of association plans, the returns are coming in on the Democratic claim that allowing The Administration is improving the individual market by expanding insurance choices.

Employers to band together to offer coverage is “junk insurance.” The plans are still nascent, but look at what the Las Vegas Metro Chamber of Commerce is offering: nine plan choices; dental, vision and life coverage available; pre-existing conditions covered; and more, with premium rates locked in for two years.

This is no surprise. The selling point of association plans is that businesses can pool risk and cut overhead costs. Businesses want to offer generous coverage that helps to attract workers in a tight labor market.

There may also be more relief ahead with the recent announcement that Health and Human Services rescinded a 2015 guidance for Section 1332 waivers. This is the Affordable Care Act’s waiver process for states to opt out of parts of the law. But Democrats designed the waivers to ensure that only progressive fantasies like single payer in Vermont could win approval. The Obama crowd then restricted the statute further in regulation.

The Trump Administration will interpret this in more rational ways, versus Obama guidance that applied the standards down to how plans would affect subpopulations in the state. The guidance was so prescriptive that most states didn’t bother coming up with ideas. The question now is how many enterprising Governors will decide they can do better than the status quo even within the restrictions.


You haven’t heard about all this because Democrats want to define the election as a choice between them and Republicans who supposedly want to deny insurance to people with lung cancer. [And because the Republicans are so STUPID that they don’t know how to capitalize on what they have accomplished.] But political control of health insurance is not the only way to care for the sick. The GOP tends to favor block grants for high-risk pools that subsidize those who need help paying for expensive treatments.

ObamaCare set up an interim high-risk pool to cover anyone with pre-existing conditions who had been denied coverage, at least until the exchanges went live. Peak enrollment: 115,000, even as Democrats claim now that 130 million people have pre-existing conditions and are at risk from Republican policy.

The GOP’s incremental progress on healthcare freedom would have been hard to imagine a year ago when it failed to repeal and replace ObamaCare. Repeal is still desirable given the law’s fundamental flaws. But the Administration is working within the law’s limits to allow as much freedom as possible. If these products prove to be popular, Democrats may find it harder to eliminate the choices to stand up single payer.


Here Come the Increases

You can’t pay out more than you take in.
Costs drive behavior.

A growing number of major insurers are seeking premium increases averaging 20% or more for next year on plans sold under the Affordable Care Act, according to rate proposals in more than 10 states that provide the broadest picture so far of the strains on the marketplaces.

As Republicans try to pass a health-care bill to overhaul the ACA, the attention has focused on insurers’ withdrawals that may leave certain areas in at least a few states with no company selling coverage through the online insurance market- place, or exchange, next year. But the rate requests by major insurers show stress on the marketplaces stretches beyond those trouble spots.

The biggest ACA-plan insurers in Delaware, Virginia and Maryland are asking for average increases greater than 30% for next year. In Oregon, North Carolina and Maine, the rate proposals from market leaders were around 20% or higher.

The insurers’ proposals reflect continuing struggles under the 2010 health law to enroll enough healthy people to offset the costs of the sick—but also uncertainty at the federal level about the law’s future. Insurers are particularly concerned about the fate of federal government payments that are used to reduce out-of-pocket costs like deductibles for lowincome ACA-plan enrollees, which the Trump administration has threatened to halt, and enforcement of the individual mandate meant to prod young, healthy people to buy insurance.

“It’s still a very volatile market,” said Rick Notter, an executive at Blue Cross Blue Shield of Michigan. “There are so many uncertainties.” The market in his state isn’t stable, he said, but the problems are being exacerbated by the lack of clarity in Washington. For health-maintenance- organization plans, the insurer seeks a 22.6% increase if the federal cost-sharing payments end, or 13.8% if they don’t.

A new survey of health insurers by consulting firm Oliver Wyman, a unit of Marsh & McLennan Cos., found that 43% were planning to propose rate increases greater than 20%, while another 36% were looking at boosts of between 10% and 20%. The average rate increase in the May survey, with responses from 14 insurers, was around 20%. Nearly all of the responses assumed that the cost-sharing payments would continue—if they didn’t, insurers said they would either seek further increases or withdraw from the market.

Insurers’ rate proposals, which often need to be approved by regulators before going into effect, are likely to give fodder to both Republicans and Democrats in the argument over the ACA.

Republicans, who have passed a health-care bill through the House and are trying to do so in the Senate, have pointed to insurers’ struggles as signs of problems with the law. “The laws of economics were in place long before today. These companies were losing hundreds of millions of dollars,” a White House official said.

Democrats argue that the markets would be poised to stabilize, but Republicans are hurting the marketplaces by threatening the cost-sharing payments and raising questions about enforcement of the ACA’s coverage mandate.

“These actions, these statements, these inactions, this uncertainty, has created a huge set of chaos in the individual marketplace leading to instability for insurance carriers, higher premiums, and reduced competition,” said Sen. Tim Kaine (D., Va.) on the Senate floor Thursday.

On Friday a bipartisan group of governors sent a letter to the Senate leadership urging Congress to focus on ways to stabilize the private insurance market.

Some of the biggest rate increases reflect a combination of lingering issues in the marketplaces and federal uncertainty. In Maryland, CareFirst Blue-Cross BlueShield is proposing a 52% average increase, which it said will need to go even higher if cost-sharing payments aren’t guaranteed. The insurer, which said it has been losing money on the exchanges, said its rates have been falling short of the costs of the relatively unhealthy group of people it enrolled. Also, CareFirst believes even more healthy people will drop out because they don’t think they will face penalties for lacking coverage.

“The attempt to get back to basic adequacy, together with a worsening risk pool, together with federal actions that lead to uncertainty, that’s what causes it,” said Chet Burrell, CareFirst’s chief executive.

In Delaware, Highmark Health said about a third of the 33.6% rate increase it seeks is due to projected loss of the cost-sharing payments and concerns about the individual coverage mandate, with the rest tied to the need to catch up to higher-than-expected costs that have been generating losses, among other factors. Highmark, set to be the only remaining exchange insurer in Delaware after Aetna Inc.’s withdrawal, said it is still weighing whether it can even offer marketplace plans in the state. “We have to let the next several months play out,” said Alexis Miller, a Highmark senior vice president.

Other insurers said they were seeing signs that markets were steadying and rate increases could be limited—if the federal cost-sharing payments were locked in. In New York, nonprofit Fidelis Care seeks an increase of 8.48%. Blue Cross and Blue Shield of Vermont wants 12.7% in that state. And Blue Cross and Blue Shield of North Carolina said its requested 22.9% boost would have been 8.8% if it could rely on the federal funds.

Insurers are also worried that if they put more rate increases into place, it will lead even more healthy people to drop their coverage, pushing rates up further in the future as there are fewer premiums to offset the higher costs of covering sicker policyholders. Many consumers’ premiums are largely funded by federal subsidies under the ACA, but some people bear the full brunt of premium rises—and may not stick around as the rates go up.

Kevin Lewis, chief executive of Maine Community Health Options, said its 19.6% requested increase is linked closely to expected lack of coverage mandate enforcement.

—Stephanie Armour contributed to this article.


The ObamaCare Republicans

These folks have lost almost all credibility with me.
WSJ 3/25/2017

House Republicans pulled their healthcare bill shortly before a vote on Friday, and for once the media dirge is right about a GOP defeat. This is a major blow to the Trump Presidency, the GOP majority in Congress, and especially to the cause of reforming and limiting government.

The damage is all the more acute because it was self-inflicted. President Trump was right to say on Friday that Democrats provided no help, but Democrats were never going to vote to repeal President Obama’s most important legislation. And that’s no excuse. Republicans have campaigned for more than seven years on repealing and replacing Obama-Care, and they finally have a President ready to sign it. In the clutch they choked.

Speaker Paul Ryan and Mr. Trump worked together and to their credit to broker a compromise between the GOP’s moderate and conservative wings. Their bill worked off the reality that the U.S. health system has changed under ObamaCare and thus an orderly transition is necessary to get to a free-market system without throwing millions off insurance. The GOP also is a center-right coalition with competing views and priorities. The bill had flaws but was the largest entitlement reform and spending reduction in recent decades.

That wasn’t good enough for the 29-or-so members of the House Freedom Caucus who sabotaged this fragile legislative balance. When one of their demands was met, they dug in and made another until they exceeded what the rest of the GOP conference could concede. You can’t have a good-faith negotiation when one party doesn’t know how to say yes—or won’t.

The Washington chorus now claims Mr. Ryan made a mistake by leading with health care, and perhaps in retrospect he did. But he was responding to demands for immediate repeal by the same conservatives who later abandoned him. They wanted a repeal-only vote that had no chance of passing, which is why Mr. Ryan and Senate Republicans worked on the compromise of repeal and replace.

The critics assailed the bill as “ObamaCare Lite,” but the result of their rule-or-ruin strategy will now be the ObamaCare status quo, and Mark Meadows (North Carolina), Jim Jordan (Ohio), Louie Gohmert (Texas) and the rest own all of its problems. Please spare everyone your future grievances about rising health spending or an ever-larger government.

The grand prize for cynicism goes to Senator Rand Paul, who campaigned against the bill while offering an alternative that hasn’t a prayer of passing. “I applaud House conservatives for keeping their word to the American people and standing up against ObamaCare Lite,” said Dr. Paul. “I look forward to passing full repeal of ObamaCare in the very near future.”

There will be no such repeal in this Congress, and probably not in any other. Republicans run the government and that means they are responsible for what happens in health care. Messrs. Trump and Ryan are right that the ObamaCare markets are imploding, and prices will rise and choices will shrink again next year on present trends. Republicans can try to blame Democrats, but they’re in charge. Health and Human Services Secretary Tom Price can use regulation to improve insurance markets at the margin, but the bill would have given him more reform tools. The Trump Administration is inevitably invested in improving ObamaCare instead of standing up a replacement, and the voters harmed by rising premiums and declining choices may punish Republicans in the 2018 midterms.

This failure also reveals the unfortunate skills gap between Democrats and modern Republicans in practical legislative politics. Democrats have their Bernie Sanders faction, which claimed to “oppose” ObamaCare in 2009-10 for lacking a government-run public insurance option. But the far left voted for the bill anyway because they concluded, rightly, that a new entitlement was a great leap toward single-payer national health care.

An ideal free health-care market is never going to happen in one sweeping bill. The American political system is designed to make change slow and difficult, thank goodness. Republicans have to build their vision piece by piece, carefully gauging how to sustain their policy gains politically—the same way Democrats expanded the welfare and entitlement state over the last century.

But much of the current conservative establishment profits from fanning resentments, not governing. Legislative compromises don’t help Heritage Action raise money for its perpetual outrage machine. An earlier generation of leaders at Heritage understood that the goal of winning elections was to achieve something. The current leaders seem happy with failure.

Heritage was joined in opposition by the Club for Growth and the Koch brothers’ political machinery, also on grounds that the bill was imperfect. But good luck finding any comparable chance to shrink government. This demonstration of GOP dysfunction will make Members even more skittish about taking other difficult votes, including tax reform.

Mr. Trump said Friday he wants to move forward on cutting taxes, and Ways and Means Chairman Kevin Brady wants to do the same. We wish them luck and support the effort. But health reform is about a single industry. Tax reform implicates every industry and its denizens are the definition of the Washington swamp. Success on health care would have produced momentum and confidence that Republicans could fulfill their promises. Now Democrats and the swamp rats smell blood.

Perhaps Mr. Trump and the GOP can recover from this debacle, but as an opening act to a new Presidency the collapse of his first legislative campaign is ominous. In business Mr. Trump liked to “get even.” He’s got some scores to settle with the Freedom Caucus.