Just think of it...Obamacare on Broadway! Healthcare meets Monty
Python! Fabulous tongue in cheek lyrics, frenetic side stepping dance
routines, and one great knee slapping line after another. Audiences will
roar at all of the hidden traps in the law that they have no idea
about...like how your subsidy can morph into a tax bill if your life
circumstances change.
The saga will continue after the
first of the year when new things will explode and the President will
institute more unilateral changes. Trust me boys and girls, this one is
not going away any time soon. When all of the temporary adjustments that
the President has made to try and take this off the table as a
political factor in the 2014 elections (fat chance that will work) expire,
we'll be right back to square one. There is no way to fix something that
was totally broken to begin with.
Ask yourselves a
simple question: If the Democrats in Congress who voted for this bill
knew then what they knew know, you think the outcome might have been a
bit different?
Happy New Year to one and all, and that you for stopping by to read my posts.
Monday, December 30, 2013
Friday, December 20, 2013
Obamacare Unravels
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Utter Chaos: White House Exempts Millions From Obamacare's Insurance Mandate, 'Unaffordable' Exchanges
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It’s hard to come up with new ways to describe the Obama administration’s improvisational approach to the Affordable Care Act’s troubled health insurance exchanges. But last night, the White House made its most consequential announcement yet. The administration will grant a “hardship exemption” from the law’s individual mandate, requiring the purchase of health insurance, to anyone who has had their prior coverage canceled and who “believes” that Obamacare’s offerings “are unaffordable.” These exemptions will substantially alter the architecture of the law’s insurance marketplaces. Insurers are at their wits’ end, trying to make sense of what to do next.
Previous fixes were failing
Here’s how we got to where we are. As many as six million Americans who purchase health coverage on their own have seen their plans canceled, because they don’t comply with Obamacare’s newly-imposed regulations. On the other hand, the bungled rollout of the law’s healthcare.gov website has meant that only tens of thousands of Americans have been able to enroll in new coverage under the law. This means that by January 1, 2014, less people will have health coverage under Obamacare than before.
The White House has been working hard to fix the problems with the exchanges, with modest success. Henry Chao, the deputy Chief Information Officer at the Centers for Medicare and Medicaid Services, testified to Congress in November that 30 to 40 percent of Obamacare’s exchange software had yet to be constructed. Most critically, the systems needed to pay insurers—and thereby enroll people in coverage—had not yet been built.
The administration announced in November that it would decline to enforce the provisions of Obamacare responsible for the cancellations, thereby giving states the option to allow insurers to attempt to keep the old plans operational. But the reality turned out to be more challenging; it’s not easy for insurers to turn on a dime and re-create insurance products that they had previously canceled in compliance with federal law.
In other words, for all of the seeming flurry of activity, as of yesterday the fundamental problem—people losing their old health plans, and failing to gain new ones—remained.
White House admits that Obamacare plans may be ‘unaffordable’
Last night, in a stunning reversal, the Centers for Medicare and Medicaid Services announced that Americans who have had their plans canceled will be exempt from enrolling in the exchanges, “because some consumers were finding other coverage options to be more expensive than their cancelled plans or policies.”
For years, these pages have raised the concern that the “Affordable Care Act” will drive up the cost of health insurance. “What is remarkable about the Patient Protection and Affordable Care Act,” I wrote in 2010, is “its devastating consequences for the cost of health insurance.” A 49-state analysis I conducted along with two colleagues at the Manhattan Institute found that the average state will see underlying premiums increase by an average of 41 percent in the individual market, the market where people shop for coverage on their own, instead of getting it through an employer or the government. (Our state-by-state interactive map can be found here.)
But this most recent announcement from the Obama administration is the first time it has publicly admitted that Obamacare is making health insurance less affordable, not more so, for millions of Americans.
The new ‘hardship exemption’ applies to those with canceled coverage
Section 1411(c)(5)(A) of the Affordable Care Act grants the Secretary of the U.S. Department of Health and Human Services the power to grant a “hardship exemption” from the individual mandate that requires most Americans to purchase health insurance or pay a fine. The administration has, in effect, declared that Obamacare’s regulations are themselves a “hardship” worthy of mass exemption.
“If you have been notified that your individual market policy will not be renewed, you will be eligible for a hardship exemption,” announced the Centers for Medicare and Medicaid Services. All you have to do is “complete a hardship exemption form, and indicate that your current health insurance policy is being cancelled and you consider other available policies unaffordable.”
Obamacare’s ‘catastrophic plans’ are also unaffordable
The administration has also expanded the availability of the law’s so-called “catastrophic” plans. But the catastrophic plans under Obamacare aren’t like the ones you might be familiar with. ACA-compliant “catastrophic plans” have to cover all of the services defined as “preventive” by the government, along with all of the Obamacare-defined “essential health benefits,” like drug-addiction therapy.
The major difference between the regular Obamacare “bronze” plan and the Obamacare “catastrophic” plan is that the catastrophic plan covers three primary care visits prior to hitting the deductible. Which isn’t that much of a difference at all.
The catastrophic plans are supposed to be available only to those under 30, and those older than 30 who can’t find coverage for less than 8 percent of their income. And the catastrophic plans are not eligible for Obamacare’s premium support subsidies.
The upshot of all this is that the catastrophic plans aren’t that much cheaper than the regular Obamacare plans. In California, for example, the median cost of a pre-Obamacare plan on eHealthInsurance.com, for a 25-year-old male non-smoker, was $92. The Obamacare bronze plans cost an average of $205 a month. The Obamacare catastrophic plans? $184. In some parts of the country, the catastrophic plans are actually more expensive than the bronze plans.
For this reason, I don’t expect that many Americans to sign up for the catastrophic plans. If you think that the Obamacare bronze plans are unaffordable, you’re likely to feel the same way about the catastrophic plans. Instead, you’re going to take advantage of the “hardship exemption” and go without insurance altogether.
Insurers have no idea what to do now
This decision by the administration—characterized by HHS Secretary Kathleen Sebelius as an attempt to provide “the smoothest possible transition” into the Obamacare era—has instead thrown the individual insurance market into chaos.
Here’s why. Insurers like Aetna and Humana, when they priced their plans for the Obamacare exchanges, did so by averaging the expected health spending by the people who would sign up for those plans. This new “hardship exemption” will encourage healthier individuals, whose expected spending would be low, from dropping out of the pool. As a result, average spending per enrollee on the exchanges is likely to be substantially higher than the insurers had planned for, forcing them to lose money on their policies.
“This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” said Karen Ignagni, president of AHIP, the insurer trade group, last night. That’s especially true if enterprising Americans generate fake cancellation letters, in order to avoid Obamacare’s individual mandate.
And the catastrophic plans, as I noted above, were priced by the insurers on the assumption that the vast majority of enrollees would be under the age of 30. If healthy but older people sign up for these plans, insurers will lose money on them, too. “Panic mode” is how insurance executives are describing the administration’s moves—but the insurers themselves are going to have to wonder about the financial viability of their exchange-based plans.
Why exempt only some people from the individual mandate?
The mass exemption appears to have been precipitated by several Democratic senators in Republican-leaning states who were concerned about the political blowback from the cancellation conflagration. Secretary Sebelius sent a letter yesterday to Sen. Mark Warner (D., Va.) thanking him for his “constructive leadership on this issue.”
Republicans, however, are certain to repeat their calls to exempt everyone from the individual mandate. Why, after all, should some people be forced to buy unaffordable coverage, but not others?
And it’s worth remembering that these exemptions are only a temporary reprieve, for the 2014 plan year. In 2015, without further decrees from the White House, all of the delayed Obamacare provisions will snap back to attention. In the meantime, we’re left to wonder: what will they think of next?
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Read Avik’s new book, How Medicaid Fails the Poor (Encounter, 2013), available at Amazon and other major retailers.
Or, sign up to receive a weekly e-mail digest of articles from The Apothecary.
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INVESTORS’ NOTE: The biggest publicly-traded players in Obamacare’s health insurance exchanges are Aetna (NYSE:AET), Humana (NYSE:HUM), Cigna (NYSE:CI), Molina (NYSE:MOH), WellPoint (NYSE:WLP), and Centene (NYSE:CNC), in order of the number of uninsured exchange-eligible Americans for whom their plans are available.
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From Around the Web
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The Insurance companies supported and lobbied for ACA, alias ObamaCare… Now it’s time to implement this monster and they are complaining, so what! The problem with ACA is that the Democrats attempted to fix something that was not really broken… Many things happen in life and if you want to change 16% of our economy, you really should have support from BOTH political party’s, Oh well… Repeal ObamaCare, then start over with medical tort reform, interstate health insurance and individual health polices which cover your specific medical needs….how’s that for a new plan of action! Now, how’s that “Hope and Change” thingy working for you…
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more like “Hoax and Chains” thingy
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What I find most disturbing is that this whole fiasco was written and concocted by Ivy League educated progressives who are alleged to be our best & brightest. So if that’s the case, who do we get to fix it…
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It’s impossible to implement something that keeps on changing on an hourly basis. Obama and Democrats created this chaos,
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Insurance as we’ve known it, has been a market and risk driven business that has done its job well, and it requires revenue and profit to offer and maintain its benefit. These “experts” in the White House and Congress disdain business. They cannot be trusted with managing the expenses and paying the bills of our country, “living within their means” as they have cautioned their fellow citizens. They cannot be trusted with our finances, and now we are to trust them with our very lives?
Bleeding hearts and theory do not feed, clothe or insure a family. A free market, exercising the right to choose where and how you earn and spend your money – which includes helping those less fortunate if you choose – cannot be “managed” by politicians. It takes business people working with reasonable laws to produce wealth enough to care for all who would participate.
Say what you will – we needed Mytt Romney’s business acumen to pull us out of this quagmire and move us up the road. Having lost the opportunity, we must find another strong businessman/woman who lives above and beyond the charms of political “power” and privilege to find the right tracks and set us back on them.- Called-out comment
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Somewhere out there is a company which is very happy it never hired Obama to be a manager.
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no doubt about that…and it’s a good thing he’ll be able to live on his connections and speech making capabilities. Now, to derail the Hillary in 2016 push, which would lead us further down the gilded path
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So this means that Obozo’s “Law of The Land” leaves those who paid for their own insurance and carried their own weight in society WITHOUT INSURANCE. They have been dropped from their insurance, and now they can’t afford the Obamacrap premiums, so they will be “exempt” from it? GREAT PLAN! Now, all this idiot has done is screw over millions of people. Great plan. If they voted for him, then they deserve to be screwed. If they knew better than to vote for him, they need to thank the dumb@$$%% that did.
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And the first big law firm to file a Class Action law suit over myriad 14th Amendment violations of extending exemptions to certain parts of the same class, but denied to others….Wins.
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What’s sad is that everything that’s transpired because of Obamacare is something that the GOP warned about years ago. They were demonized as uncaring, idiotic racists. Now that the ACA is turning out to be a worse disaster than even the critics predicted, all you hear from the liberals is silence.
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