Sunday, November 22, 2015

Obamacare Schadenfreude Out of Control

Acck! I've let it go too long again; time for a quick catch up.

Bombshell: United Healthcare may exit individual insurance exchanges after 2016
UnitedHealth Group (NYSE: UNH) today reported revised expectations for 2015, reflecting a continuing deterioration in individual exchange-compliant product performance, and provided an initial outlook for 2016.

“In recent weeks, growth expectations for individual exchange participation have tempered industrywide, co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated, so we are taking this proactive step,” said Stephen J. Hemsley, chief executive officer of UnitedHealth Group. “We continue to be pleased with the growth and overall performance of our Company outside of the individual exchange products and look forward to strong, positive and broad based earnings growth across our enterprise in 2016.” …

UnitedHealthcare has pulled back on its marketing efforts for individual exchange products in 2016. The Company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.
Covered California: Hey, United Healthcare will expand in our markets
Denial ain’t just a river in Egypt — it’s a government policy in California. After United Healthcare announced that it would not commit to remaining in individual health insurance markets — the ObamaCare exchanges — Covered California insisted that United didn’t mean they would exit all markets. California is different, they insisted:
Peter Lee, executive director of Covered California, said he spoke with UnitedHealth officials Thursday and remains confident about the company’s continued expansion in the state.
“We have every indication they are all in for 2016 and 2017,” Lee said in an interview. “The fact United did badly in other parts of the country, like many health plans did, is exactly why they want to be in California.”
UnitedHealthcare seems to have a different take on matters:
A spokesman for United Health said no decision has been made on its future participation in Covered California. “We will make an assessment of 2017 markets in the first quarter of 2016,” spokesman Tyler Mason said. …
UnitedHealth Chief Executive Stephen Hemsley told analysts and investors that “we cannot sustain these losses…. We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”
Anything is possible, of course, but if United Healthcare considers California to be a different case, they certainly didn’t tell investors that. Their announcement yesterday didn’t relate to pulling out of a certain number of specific markets; they announced that they would consider pulling out of the individual-plan market altogether. If they planned to not just stay in California but expand in that market, why not say so? It might have kept their stock price a little higher yesterday.
The Slow-Motion Implosion of ObamaCare
In other words, ObamaCare expanded coverage in 2014 to the extent that it gave people free or nearly free insurance. That goal could have been accomplished without the Affordable Care Act. To justify its existence, ObamaCare must make affordable private insurance available to a broad cross-section of uninsured Americans who are ineligible for Medicaid.

But with fewer people buying insurance through the exchanges, the economics aren’t holding up. Ten of the 23 innovative health-insurance plans known as co-ops—established with $2.4 billion in ObamaCare loans—will be out of business by the end of 2015 because of weak balance sheets.

And while rates vary widely by state, the cost for private insurance through the exchanges is also increasing dramatically. An analysis by consulting firm Avalere Health released on Friday shows that some of the most popular insurance plans in the ObamaCare exchanges will experience double-digit premium hikes in 2016.
 Obamacare death spiral a gift to 2016 GOP candidates
It goes without saying that all the stuff President Obama said while selling Obamacare — that it would save the average family $2,500, that people who liked their coverage could keep it, etc. — have long ago gone up in smoke.

This is a potent political issue. Republican base voters have never gone along with the party's Beltway elites in making their peace with Obamacare. Any candidate who pledges on the stump to repeal every word of the Affordable Care Act wins a raucous round of applause. And in light of recent news, look for them to do it more and more.
ObamaCare Enrollment Flatlines As 6th Insurance Co-Op Fails
Amid massive premium increases, the administration says that ObamaCare enrollment will flatline next year. This news comes just as health insurance co-op No. 6 goes belly-up. The train wreck continues.

With less than a month to go before ObamaCare open enrollment starts, the Health and Human Services Department has massively downgraded how many it expects will sign up. In a report released Thursday, HHS said that enrollment will be between 9.4 million and 11.4 million by the end of next year.

In other words, enrollment will be about half what the Congressional Budget Office projected. And at the low end, it means that ObamaCare enrollment will have declined from where it was in March of this year, when HHS bragged that 10.2 million were covered.
Many Say High Deductibles Make Their Health Law Insurance All but Useless
. . . for many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage.

“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance, but can’t afford to use it.”

In many states, more than half the plans offered for sale through, the federal online marketplace, have a deductible of $3,000 or more, a New York Times review has found. Those deductibles are causing concern among Democrats — and some Republican detractors of the health law, who once pushed high-deductible health plans in the belief that consumers would be more cost-conscious if they had more of a financial stake or skin in the game.
Obamacare’s Bait and Switch Has Left Consumers Scrambling in 2016
Instead of “affordable care” promised by President Obama and Democrats, consumers have instead discovered they have effectively been forced to pay for catastrophic health insurance at comprehensive-plan prices. They have become victims of a bait-and-switch scheme that the government would vigorously prosecute – if it wasn’t masterminding the scheme itself. The consumers interviewed by Robert Pear in The New York Times figured out that they’ve been had.

“Basically I was paying for insurance I could not afford to use,” said one Texas man who decided to drop his coverage. Another 60-year-old New Jersey man told Pear, “We have insurance, but can’t afford to use it,” thanks to a $3,000 deductible on top of his premiums. One woman told Pear that she’d be better off saving the money from her premiums as a form of self-insurance against catastrophe – since Obamacare no longer allows for low-premium catastrophic coverage in most cases.
The ever sensible Megan McArdle: Deductibles Are the Price You Pay for Obamacare
. . .This is actually good insurance design. Insurance that covers routine expenses isn’t really insurance; it’s a sort of inefficiently expensive prepayment plan. If Obamacare forces people away from "first dollar" coverage with low or no deductible, and toward plans that cover people only for unanticipated emergencies, that would be a win for economic logic.

The problem with this is twofold: First, unless they’re pegged to income, high deductibles are regressive, forcing the poorest people to pay the largest share of their income. And second, people absolutely hate economically logical health-care plans. This is why you see unions giving up quite a lot of other concessions on wages and benefits in order to keep those gold-plated health-care plans.

The regressiveness of the deductibles is mitigated by Obamacare’s cost-sharing reduction subsidies, which limit your deductibles if you make less than 250 percent of the federal poverty line (about $60,000 for a family of four). But those subsidies are available only on Silver plans, which carry higher premiums. And economically strapped families often have trouble spending more money now to save money later.

Regardless of subsidies, the political problem remains: Insurance on the exchanges is quite expensive considering how high the deductibles are, and how limited the provider networks are. That’s making people unhappy, and seems likely to generate political pressure to make the policies more generous, which is to say, more expensive. 
And her next article: Obamacare Insurers Are Suffering. That Won't End Well.
What UnitedHealth’s action suggests is that the company is not sure it can make money in this market at any price. Executives seem to be worried about our old enemy, the adverse selection death spiral, where prices go up and healthier customers drop out, which pushes insurers' costs and customers' prices up further, until all you’ve got is a handful of very sick people and a huge number of very expensive claims.
. . .
But on the conference call, Stephen Helmsley, the CEO of UnitedHealth, expressed concerns that the exchanges were seeing adverse selection anyway. Not just that the Obamacare insurance pool is sicker and more expensive than expected, which we already knew. But that the pool is experiencing adverse selection over the course of the year, as healthy people stop paying their premiums, and sicker people buy in. According to Helmsley, the people who bought insurance from them through the exchange, but outside of the open enrollment period, are averaging about 20 percent more expensive than the rest of the pool.

This is potentially extremely bad news for Obamacare. It may be that UnitedHealth simply had an especially bad experience, but with more than 500,000 people covered, that doesn’t seem actuarially likely. Which raises the worrying possibility that only two years in, people have figured out how to game the special enrollment process so that it’s safe for them to go without insurance, and then sign up for coverage if they get sick. That’s not the only possible explanation. Perhaps people who have “qualifying life events” are simply more likely to buy insurance if they need a lot of health care. But we can’t dismiss the possibility of gaming, either -- or that healthier people are dropping insurance as they realize they won’t hit their deductible.
Merry Christmas from the Obama and the Democrats! Shopping for Health Insurance Is New Seasonal Stress for Many
“Every year I feel like I’m starting all over again, and I just dread it,” said Ms. Galen, 63, of Warrenton, Ore. “My stress level just shoots up.”

Over the past two years, the Affordable Care Act has created entirely new markets for health insurance, and a new way of buying it, via online exchanges that allow comparison shopping. They have brought coverage to nine million people, many of whom could not afford it or were rejected by insurers before. But these new markets have also seen sharp price swings, or changes in policies, that are driving many consumers to switch plans each year.
. . .
For many consumers, the volatility in the markets has been a source of anxiety and disruption. To have any choice at all is a welcome development, many say. But switching plans is also becoming an unwelcome ritual, akin to filing taxes, that is time-consuming and can entail searching for new doctors and hospitals each year.

“I don’t have a regular doctor anymore, so I avoid going,” said David Saphier, a self-employed technology consultant in Manhattan who will be switching to his third exchange plan for 2016.
Ratings of U.S. Healthcare Quality No Better After ACA, Worse, really.
Fifty-three percent of Americans rate the quality of healthcare in the U.S. as "excellent" or "good." This is similar to what Gallup has found since 2013, but is down from the more positive ratings of 2008 to 2012.

From 2005 to 2007, a slim majority of Americans rated the quality of healthcare in the U.S. as excellent or good. But this percentage increased slightly in 2008 after President Barack Obama was elected, reaching a high of 62% in November 2010 and again in 2012 just after he was elected to his second term. Those higher ratings could reflect optimism about Obama's promises to reform healthcare and the passage of the Affordable Care Act. However, since November 2013, shortly after the ACA insurance exchanges first opened, no more than 54% of Americans have rated the quality of healthcare in the U.S. as excellent or good.
Not yet out of other people's money, Colorado to vote on single payer health care plan for the entire state
After collecting more than 150K signatures on petitions, the voters of Colorado will next year consider a ballot initiative to move to a first in the nation, single payer health care plan for the entire state. ColoradoCare would, under this plan, cover the insurance bills for all residents through whichever provider they selected. That may sound like a fiscal disaster waiting to happen, but… well, okay. It is. (Denver Post)
“We’re all excited. This is really important for the people of Colorado,” said Ivan Miller, executive director of ColoradoCare Yes and head of the Colorado Foundation for Universal Health Care.
“Gathering signatures is really tough. I think the political consensus was we didn’t have a prayer.”
The initiative calls for a 21-member governing board from seven regions of the state. Its first members would be appointed by the governor and legislative leaders, but an elected board would succeed them.
Miller said the board could use any excess revenues to pay refunds or enlarge benefits, but it could not raise the payroll tax without voter approval.
That last sentence contains a clue regarding the one “feature” of this plan which should just be massively popular. They plan to pay for it by imposing an additional ten percent payroll tax on every working person in the state. That’s right… the state would be lopping an additional ten percent right off the top of everyone’s paychecks – in addition to the many other federal, state and local government deductions which already trim down many people’s take home pay by a third or more – to pay for what is approaching a completely socialized health care plan. I bet the folks who are complaining that they either got no raise or a one percent raise last year will just be doing backflips over that.
HHS: Bailing out Obamacare insurers an 'obligation' of the federal government
The Department of Health and Human Services attempted to reassure private insurers on Thursday that they'll be able to recover losses from participating in Obamacare by claiming it was an "obligation" of the U.S. government to bail them out.

At issue is a provision within the law known as the risk corridors program. Under the program, which runs from 2014 through 2016, the federal government is to collect money from health insurers doing better than expected and use those funds to provide a federal backstop to other insurers who incur larger than expected losses from rising medical claims. The idea was to provide training wheels to insurers in the first years of Obamacare's implementation, and to take away any incentive for insurers to cherry pick only the healthiest customers.

Republicans, fearing that this could turn into an open-ended government bailout in the event of industry-wide losses, included a provision in last year's spending bill that limited the program, requiring HHS to pay out only from the pool of money collected, rather than supplementing it with other sources of government funding. President Obama signed that bill.

Now that insurers have been able to look at medical claims, what they've found is that enrollees in Obamacare are disproportionately sicker, and losses are piling up. For the 2014 benefit year, insurers losing more than expected asked for $2.87 billion in government payments through the risk corridors program, but HHS only collected $362 million from insurers performing better than expected. Thus, the funds available to the federal government only amounts to 12.6 percent of what insurers argue that they're owed.
A new taxpayer bailout to cover up ObamaCare’s failure?
Nearly all insurers are bleeding red ink trying to sell the unworkable plans. Without a bailout, more insurers will abandon ObamaCare, pushing it closer to its demise. A bailout would benefit insurers and the Democratic Party, which is desperate to cover up the health law’s failure. Ironically Democrats (including Hillary Clinton and Bernie Sanders) bad-mouth bank bailouts but are all for insurance-company bailouts. Truth is, it’s a ripoff for taxpayers, who shouldn’t have to pay for this sleazy coverup.

The pressure is building on Republicans in Congress. Industry groups like the American Health Insurance Plans and giant insurers are joining with the Obama folks to lobby ferociously for a bailout.

UnitedHealthcare’s Thursday bombshell rattled investors, health-plan subscribers and ObamaCare partisans. The insurer currently covers more than half a million ObamaCare plan subscribers in 23 states, including New York, New Jersey and Connecticut.
Reminder: if you didn’t have health insurance this year, the tax man would like a word with you
In another couple of months you’ll be getting your tax documents in the mail (assuming you have some source of income, that is) and will prepare to file your 2015 returns. That means that at least for some of you, you’ll be dealing with the Obamacare mandate penalties if you didn’t have health insurance. (Or a government accepted form of it anyway.) If you paid the penalty last year it wasn’t much of a bite, but next April the fine is going to be a bit stiffer.
People who weren’t covered under a compliant health plan in 2015 or didn’t meet some specific exemptions will have to pay what amounts to a fine when they file their 2015 tax return. The government has two ways of calculating what you’ll owe in 2015. That’s the greater of $325 for each adult and $162.50 for each child, not to exceed $975, or 2 percent of your family’s adjusted gross income.
The most you can be fined is capped at the national average cost of a bronze-level health plan available on the exchanges. For 2015, that’s $2,570 for singles and $5,140 for families.
That’s basically double what it was last year. The example they provide in the article shows that a young married couple with no children (the most likely to not want to bother paying for insurance) will be paying $1,588 for this year as compared to $797 last year. Depending on your income and how you set up your deductions, if you normally expect a refund every year that could pretty much wipe it out for some people. But maybe you won’t have to pay it after all.

When people filed their taxes for 2014, the Wall Street Journal reported that a vast majority of those without insurance were not motivated to buy a plan off the exchanges by the threat. (Of course, the penalty was lower last year.) And not all of those who should have paid the penalty ponied up the cash anyway. There are actually a couple of ways to avoid paying it even if you didn’t purchase a health insurance plan.
Read on to find out how.

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