Wednesday, February 18, 2015

Obamacare is "Working a Little Better Than We Expected"––Judge for Yourself

Here is what President Obama said in a recent video, "The Affordable Care Act is working. It's working a little better than we expected."

On Tuesday, the administration announced that 11.4 million people signed up for Obamacare in the second open enrollment.

That number is higher than the number that will ultimately pay for their coverage and complete the enrollment. Even after they complete signing up the stragglers, it is more likely the paid for number will be about 10.5 million based upon a number of conversations I have had with carriers.

But let's assume they end up with as many as 11 million people. Would that exceed expectations?

Here is what the Congressional Budget Office projected in May of 2013:


As you can see, the CBO estimated back in 2013 that there would be an average of 13 million people in the insurance exchanges during 2015.

You will recall that the administration started out with 8 million at the end of the first open enrollment period but that number dropped to 6.7 million by the end of 2014. A similar attrition would take an 11 million person enrollment to about 9 million by the end of 2015. The administration's own 2015 estimate is for 9.1 million.

Perhaps most importantly, I would call your attention to the CBOs original enrollment projection for 2016––that 22 million people would be in the Obamacare insurance exchanges.

Do you think the administration will make the original expectation of 22 million enrollments during 2016? They enrolled 6.7 million by the end of 2014, and will likely have about 9 million at the end of 2015 if this year plays out like last year.

6.7 million in 2014, 9 million in 2015, and 22 million in 2016?

Why does this matter?
Because we went through all of the trouble of seeing the Affordable Care Act become law in order to reduce the number of those uninsured in this country.

The CBO projected that there would still be 31 million people uninsured in 2016. For every million people the administration misses the enrollment expectation that is another one million people still uninsured.

Looking at the Obamacare results to date, how many people do you think will still be uninsured in 2016 compared to the CBOs original expectations?

It also matters politically––low enrollments will mean less political support.

It also matters financially––only about half of the subsidy eligible people appear to have so far signed up bringing into question the rates health plans will have to charge when the underwriting subsidies end in 2017.

Back Room Problems Persist
The original expectations for Obamacare extend beyond the enrollment.

The administration spent $2.2 billion on developing and fixing Healthcare.gov.

But 17 months after its original launch––and five years after the law passed––the backroom still has not been completely built.

There are now about 7 million people receiving health insurance premium subsidies in the federally run exchanges. But HealthCare.gov can't pay the insurance companies. Insurers are still getting paid based upon a workaround that involves them manually filling out worksheets––for 7 million people. There is no formal date for when this will be fixed.

HealthCare.gov also can't reconcile the cost sharing subsidies the lowest income people get form Obamacare––like lower deductibles and co-pays.

This lack of an automated enrollment process not only causes lots of headaches but also makes the enrollment numbers the administration is reporting awfully soft. One carrier told me they only ended up with half of the net January enrollments HealthCare.gov originally reported to them.

So, has Obamacare met your expectations?

Tuesday, February 10, 2015

A Detailed Analysis of the Republican Alternative to Obamacare

House Energy and Commerce Chairman Fred Upton along with Senate Finance Chairman Orin Hatch and Senator Richard Burr have outlined what is, at least for now, the Republican alternative to Obamacare.

Republicans will now argue they have a better health insurance reform plan and that Obamacare should be repealed and replaced by it––particularly if the Supreme Court plunges the new health law into chaos by throwing the subsidies out in 37 states.

They will have an uphill battle. Not because these Republicans don't have a lot of good ideas, but because they have put a list of big and complicated changes on the table. Lots of people may not like Obamacare but Republicans have now really muddied the waters with a huge take it or leave it alternative that will have plenty of its own reasons to give voters pause.

My sense is that voters will end up liking parts of both Republican and Democratic ideas. They might ask a reasonable question: Why can't we take the best from both sides?

If Democrats would just admit Obamacare needs some pretty big fixes, and Republicans would be willing to work on making those fixes by putting some of these good ideas on the table, the American people would be a lot better off.

In fact, I am hopeful that this is eventually what will happen once Obamacare's failings become even more clear (particularly the real premium costs) and both sides come to understand that neither will have a unilateral political upper hand.

See my recent op-ed on how to fix Obamacare here.

Let's take an in-depth look at the Republican alternative, "The Patient Choice, Affordability, Responsibility, and Empowerment Act." 

It's key provisions include:

Wednesday, January 14, 2015

Rethink "Repeal and Replace" and Consumer Friendly Obamacare Fixes - Two Op-Eds in USA Today

I have no doubt Republicans will insist on proposing their own complex plan to reform the health insurance system that will include repealing and replacing Obamacare.

But I think it is going to get them into more political trouble than it's worth.

Here's the first of my two of op-eds in Thursday's USA Today: Rethink "Repeal and Replace"

Of course that begs a question, Just what should we do to make health insurance reform politically and financially viable?

Proposals the Republicans are now considering will have no chance of getting by a Presidential veto––even if they can muster 60 votes in the Senate––so long as Obama is President. Even if the Supreme Court takes away insurance subsidies in the state exchanges I doubt this President and this Congress can agree on anything.

But in 2017, it will be a different matter. I really do expect the new President, Democratic or Republican, as well as the new Congress, will be anxious to move on past this long and tedious health care debate to other important issues.

Whoever wins the 2017 elections, I have no doubt the consensus will be that health insurance reform will need lots of reforming. And, the only way that will happen is when one political party is able to bring lots of members of the other party on board.

Democrats might think Obamacare will survive intact. It won't. Five years later it has failed to garner the support they thought it would.

Republicans might think they can do a unilateral conservative health insurance reform in 2017––just like the Democrats rammed their version through in 2010. They won't. The country has had enough of that.

So, what would fundamental changes look like that could gain bipartisan support, be politically attractive, and financially sustainable?

Here is my second op-ed in Thursday's USA Today: Consumer-Friendly Obamacare Fixes


Recent Post: Republicans Considering Proposing High-Risk Pools––Health Insurance Ghettos

Tuesday, January 6, 2015

Will Tax Season Be Obamacare's Next Big Challenge? Is There Really an Individual Mandate?

Will tax-filing season be the next reason for consumers to complain about the new health law? Come tax time, will the Obama administration really enforce the individual health insurance mandate?

The IRS is out with a 21-page publication––Publication 5187––describing what taxpayers need to know about Obamacare in order to file their 2014 taxes.

Monday, January 5, 2015

The Single-Payer Health Insurance Failure in Vermont

For 25 years I've been saying that I wished a little state like Vermont would implement a single-payer Canadian-style health insurance system––"Medicare For All." My argument has always been that such a small and limited experiment would give us the opportunity to see the ideological arguments for such a system play out in the face of fiscal reality and the stakeholders fighting it out in the political arena over who would get the money. The rest of the country would be able to learn a lot from it.

Monday, December 29, 2014

The Letter You Never Want to Get on Christmas Eve

I was reading the December 18th issue of Inside Health Insurance Exchanges and came across an article entitled, "New Kids on the Block Come Out Swinging; Co-Ops Lower Rates for Many Health Plans."

The gist of the article had to do with the success a number of Obamacare insurance co-ops have had in charging lower rates and getting lots of market share by "[underpricing] more established players inside and outside of the public insurance exchanges."

The article went on to point out that some traditional competitors are beginning to complain that the co-ops have unfair advantages.

This quote from the CEO of CoOpportunity––the market leading Iowa and Nebraska Obamacare funded co-op that enrolled 120,000 people in 2014––stood out:
For Blues plans and other carriers "with deep reserves, booming stock prices and market entrenchment to plead for relief from these nimble, undercapitalized start-ups is ludicrous and insulting," counters CoOpportunity Health CEO Cliff Gold. He says his company has been successful in attracting customers in two states despite not having the lowest cost products anywhere in Iowa or the most populous part of Nebraska. "At the end of the day, in the long term, success is determined by a company's ability to create value for customers, he tells HEX. "That critical but elusive combination of price, product features, provider network, and customer service is what separates competitors."
Here's the letter that Mr. Gold received a week later on Christmas Eve:

Thursday, November 13, 2014

How Many People Have Enrolled So Far in Obamacare's Second Open Enrollment?

Undoubtedly I will hear that question many times in the coming weeks.

The answer is that this enrollment process is so screwed up we will have no earthly idea how many new people have enrolled and how many 2014 enrollees remained on the program until at least April 2015.

Let me try to illustrate.

Monday, November 10, 2014

Is the Administration Low-Balling Their 2015 Obamacare Enrollment Estimate?

Well, with an estimate of only 9 million to 9.9 million, apparently they are. But I will suggest the focus should not be on anybody's estimate for 2015 but rather on how many people need to enroll in Obamacare to make it sustainable.

Friday, November 7, 2014

Supreme Court Takes the Obamacare Subsidy Case--Justices Will Rule Before July 1

In a Wow moment, the Supreme Court announced Friday that they will take one of the four pending "Halbig" cases––specifically King v. Burwell.

The issue is over whether the new health law actually authorizes the payment of premium subsidies in the 37 states that will rely upon the federal government to run their exchange in 2015.

This effort is being made on a number of fronts but has been generally know as the "Halbig" challenge. I guess we will now call it the King challenge.

If the Supreme Court eventually affirms this challenge, anyone receiving a health insurance subsidy in the 37 states run by the feds would immediately lose it. Given that the bulk of those currently getting subsides are at the lower income range for those subsidy eligible, most would likely drop their Obamacare insurance unless they were so sick it made sense for them to beg, borrow, or steal the money they would need to continue making premium payments.

Wednesday, November 5, 2014

Obamacare: Death By a Thousand Votes?

We didn't see a Republican tide on election night.

We saw a Republican tsunami.

A year after Obamacare went into effect and Democrats said people would come to support it voters gave one Republican candidate after another, who made Obamacare a big part of each of their campaigns, one victory after another.

So, how will the Republicans use their convincing result on Obamacare?

Friday, October 31, 2014

Health Insurers "Expect at Least 20% Growth" From 2015 Enrollment

That was the lead in a Reuters story this morning saying, "health plans expect at least 20% growth in customers and in some states anticipate more than a doubling in sign-ups" from the 2015 Obamacare open-enrollment.

Well they better do a hell of a lot better than that!

Sunday, October 19, 2014

Figures Don't Lie But Liars Figure––Will There Be Some Obamacare Rate Shock in 2015?

Hanging around actuaries as long as I have one of the old sayings I picked up was, "Figures don't lie, but liars figure."

I have read one story after another this summer and fall about the modest Obamacare rates increases––or decreases––for 2015.

On this blog you have also seen me write about the complex way the 2015 Obamacare rates will hit people particularly because of the impact the changes in the so called second lowest cost Silver plan will have on so many people's final subsidy. You have also seen me write about the fact that we really won't know what Obamacare costs people until the now unlimited Obamacare reinsurance program stops subsidizing insurance rates in 2017.

Recently, the Kaiser Family Foundation provided a report pointing out that the cost of the benchmark Silver Plan would fall 0.8% in sixteen cities they researched:

Monday, October 13, 2014

Wednesday, October 8, 2014

The Most Transparent Administration Puts a Gag Order on HealthCare.gov Testing

With the second Obamacare open-enrollment beginning on November 15th, the enrollment system's testing begins with insurance companies this week.

Of course, last year the enrollment system testing was a real mess resulting in a humiliating Obamacare launch for the administration.

Up until now I wasn't expecting any major problems with HealthCare.gov's consumer enrollment system given all of the lessons learned and the new people running things.

But apparently, the administration is pretty worried about what could happen.

Wednesday, October 1, 2014

One Year Later: The Affordable Care Act's Launch on October 1, 2013––So How Did it Go?

Here unedited is what I posted on September 29, 2013:

The Affordable Health Care Act's Launch On October 1st––So How Did it Go?

Unavoidably, that will be the big question come Tuesday.

But there will be much more to it than that.

A 180-Day Open Enrollment––Not a One-Day Open Enrollment
What happens on the first day, for good or bad, will constitute only a tiny percentage of the open enrollment period. Consumers will likely visit the new websites many times before they make any decisions, and that is exactly as it should be.

Friday, September 19, 2014

The "7.3 Million"

The administration finally released the Obamacare enrollment count this week.

Like everything else about their scorekeeping we got a number. Just one number. A number that was conveniently better than we had expected. And, we got no real context for the number or any of the back-up information.

Sunday, September 7, 2014

The Next Chapter of Obamacare

Welcome back from the summer.

It's been pretty quiet lately on the Obamcare front.

So quiet, that there has been a flurry of articles recently over how Obamacare has dropped to a second or even third tier issue and will hardly matter come election-time.

Wishful thinking.

Obamacare has largely been out of the news cycle for a couple of months but that is about to change.

A few thoughts.

The 2015 rate increases have been largely modest. Does that prove Obamacare is sustainable? No. You might recall that on this blog months ago my 2015 rate increase prediction was for increases of 9.9%.

Tuesday, July 22, 2014

Halbig Decision Puts Obamacare Back on the Front Burner and Will Give Republicans a Huge Political Headache

Today's 2-1 decision by the DC Court of Appeals striking down federal premium subsidies, in at least the 27 states that opted for the feds to run their Obamacare insurance exchanges, has the potential to strike a devastating blow to the new health law.

The law says that individuals can get subsidies to buy health insurance in the states that set up insurance exchanges. That appears to exclude the states that do not set up exchanges––at least the 27 states that completely opted out of Obamacare. Another nine states set up partnership exchanges with the feds and the impact on those states is not clear.

The response by supporters of the law, and the IRS regulation that has enabled subsidies to be paid in the states not setting up exchanges, hinges on the argument that the language is at worst ambiguous and the Congress never intended to withhold the subsidies in the federal exchange states.

But in the DC Court ruling one of the majority judges said, "The fact is that the legislative record provides little indication one way or the other of the Congressional intent, but the statutory text does. Section 36B plainly makes subsidies only available only on Exchanges established by states."

My own observation, having closely watched the original Obamacare Congressional debate, is that this issue never came up because about everybody believed about all of the states would establish their own exchange. I think it is fair to say about everyone also believed a few states would not establish their own exchanges. Smaller states, for example, might opt out because they just didn't have the scale needed to make the program work. I don't recall a single member of Congress, Republican or Democrat, who believed that if this happened those states would lose their subsidies.

Thursday, July 17, 2014

"Biggest Insurer Drops Caution, Embraces Obamacare"

Kaiser Health News is out with that headline today reporting that UnitedHealthcare is expanding its Obamacare exchange presence planning to sell polices "in nearly half the exchanges next year." The story goes on to report that United's leadership is saying the new public marketplaces look sustainable.

There may be more to it than that.

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