"Politics is the art of looking for trouble, finding it, misdiagnosing it,then misapplying the wrong remedies" ....Groucho Marx
"Giving money and power to government is like giving whiskey and car keys to teenage boys." ....P.J. O'Rourke
"I don't make jokes. I just watch the government and report the facts." .Will Rogers
..
This is a crusher. No doubt given the magnitude of what is at stake, this is going to wind up in front of the Supreme Court, but this decision is a huge blow to the Affordable Care Act. In essence, it makes it the Unaffordable Care Act because the states that have not set up their own exchanges will not be able to offer subsidies for the Silver plan (the only plan for which subsidies are offered). Apparently, the language of the bill was not as clear as its supporters claimed it to be.
The quandary for the Administration is, that if the law has to be amended to legally offer the subsidies to the states that don't have exchanges, how on earth is that going to get through the present Congress more or less one where the Republicans may potentially control both houses? What will happen to the people who have already registered and received subsidies that they may not be entitled to? To put it politely, the fecal waste is about to contact the oscillating air circulation mechanism. Stayed tuned.
Federal appeals court panel deals major blow to health law
A
man looks over the signup page on the HealthCare.gov website. The
controversial Affordable Care Act launched the federal health insurance
exchange in October 2013. (Mike Segar/Reuters)
A federal appeals court panel
in the District struck down a major part of the 2010 health-care law
Tuesday, ruling that the tax subsidies that are central to the program
may not be provided in at least half of the states.
The ruling,
if upheld, could potentially be more damaging to the law than last
month’s Supreme Court decision on contraceptives.
The
three-judge panel of the D.C. Circuit Court of Appeals sided with
plaintiffs who argued that the language of the law barred the government
from giving subsidies to people in states that chose not to set up
their own insurance marketplaces. Twenty-seven states, most with
Republican leaders who oppose the law, decided against setting up
marketplaces, and another nine states partially opted out.
The
government could request an “en banc” hearing, putting the case before
the entire appeals court, and the question ultimately may end up at the
Supreme Court.
But if subsidies for half the states are barred,
it represents a potentially crippling blow to the health-care law, which
relies on the subsidies to make insurance affordable for millions of
low- and middle-income Americans.
California and Florida lead the way for state and federal healthcare sign-up markets.
The
subsidies are in many cases sizeable, sharply reducing the cost of
coverage. In Wyoming, for example, the average consumer who bought a
mid-grade plan on the federal marketplace is receiving a subsidy of
around $444 per month, cutting the monthly payments to $99, according to federal figures.
Starting this year, it is mandatory to carry health insurance or pay a fine.
About
5.4 million people signed up for health insurance on the federal
marketplace through the spring, the government says. Of them, about 87
percent received subsidies.
The plaintiffs in the lawsuit — three
private employers and four individual taxpayers — argued that Congress
intended for the subsidies to go to people in states that set up their
own insurance exchanges. They cited language in the law that said the
subsidies would be available to those “enrolled through an Exchange
established by the State.”
Lower courts, however, have sided with
the government, which has argued that Congress’s intent was for
subsidies to be available in all states — a meaning it said is obvious
from the law’s context.
Eduard A. Shevardnadze, center, then the Soviet
foreign minister, with President George Bush, left, and Secretary of
State James A. Baker III in the White House Rose Garden in 1989.
Mr. Shevardnadze helped hone the “new thinking” that transformed the
Soviet Union, and then led his native Georgia through its turbulent
start as an independent state.
Di Stéfano, an Argentine, built a legendary career when he moved to
Europe in the 1950s and led Real Madrid to five straight Continental
club championships.
His conviction on espionage charges in 1978 raised alarms about the
federal government’s use of wiretaps without court orders and spurred
passage of the 1978 Federal Intelligence Surveillance Act.
Mr. Zumino proposed a theory called supersymmetry that promised to help
tie together the fundamental laws of the universe but that has yet to be
borne out in experiments.
Dr. Álvarez was an ophthalmologist, former guerrilla, political
prisoner, diplomat and trenchant critic of dictatorship, and he was
often called the wisest man in Nicaragua.
Mr. Zamperini’s experiences as an airman who crashed into the Pacific
and spent 47 days adrift before his capture by the Japanese were told in
a best-selling biography.
Mr. Hastings played Lt. Elroy Carpenter, a bumbling yes-man on that
1960s sitcom, and he also had roles on many popular TV series of the
’60s, ’70s and ’80s.
Mr. Gaskin was a Marine veteran and hippie leader who founded the Farm,
an archetypical hippie commune that has lasted longer than its
counterparts while accepting elements of capitalism.
Gen. Anatoly Kornukov ordered Korean Air Lines Flight 007, a commercial
jet with 269 people aboard, shot down in 1983 after it strayed into
Soviet airspace.
In 2000, School Library Journal named “Annie on My Mind,” for which Ms.
Garden remained best known, to its list of 100 books that shaped the
20th century.
Ms. Matute’s explorations of alienation and the loss of innocence that
children experienced during and after the Spanish Civil War made her one
of Spain’s most acclaimed writers.
Mr. Brown wrote industrial musicals for American corporations, which
were meant to rally employees, and used some of his earnings to support
Harper Lee while she wrote “To Kill a Mockingbird.”
Mr. Kasem, the longtime host of “American Top 40,” was known for his
homey sentiment and an optimism that ran headlong into the prevailing
spirit of rebellion in 1970s music culture.
In his 20-year major league career, all with the San Diego Padres, Gwynn
had a batting average of .338, including .394 in 1994. He was inducted
into the Baseball Hall of Fame in 2007.
I'm not opposed to disconnecting healthcare coverage from work. Frankly, it was bogus to being with; a ploy around the wage and price controls imposed during WW II. In order to attract workers employers offered healthcare coverage as a benefit. What did healthcare amount to in the 1940's? Births, removal of tonsils, appendectomies, setting broken bones, and a few other basic tings. There were no cat scans, pet scans, MRI's organ transplants neo-natal care or many of he other advanced procedures that are routinely done today. The cost was very minimal. Costs have now become a huge buren to employers, however, this not the way to go about decoupling healthcare from work.
Americans aren’t all that optimistic about ObamaCare, according to a recent Kaiser Family Foundation poll: Fifty-seven percent say the law isn’t working as planned.
That number will shoot even higher if employer health insurance vanishes, as an S&P Capital IQ report predicts.
The financial-research firm forecasts that 90 percent of Americans who
now have employer-sponsored coverage will lose it by 2020 — and have to
turn to government exchanges for policies.
The Obama administration has long denied that its health-reform law
would cause companies to stop providing insurance. But thanks to an
ObamaCare-fueled increase in health costs, employer-sponsored coverage
may soon become a thing of the past.
The S&P report comes three years after the consulting firm McKinsey & Co. suggested that 30 percent of employers would dump workers into exchanges to save money.
Democrats weren’t convinced. The White House attacked the McKinsey report as “flawed”; Senate Finance Committee then-Chairman Max Baucus blasted its “faulty analysis and misguided conclusions.”
ObamaCare’s defenders even argued that more employers would provide
health insurance once the law went into full effect. Recent history
hasn’t borne them out.
Health-benefits consultants around the country report that businesses
are considering dumping their least-healthy employees onto the
exchanges. By doing so, they can lower their own premiums — and stick
taxpayers with the tab for covering their most costly workers.
North Carolina benefits consultant Todd Yates recently told Kaiser Health News about this trend, saying that “employers are inquiring about it and brokers and consultants are advocating for it.”
Offloading workers onto the exchanges could pay huge dividends.
According to the S&P Capital IQ report, if all employers with more
than 50 workers adopted this strategy, they’d collectively save $3.25
trillion. Among 500 of the country’s biggest companies, the total
savings could amount to $700 billion over 10 years.
Firms will be hard pressed to leave these savings on the table — especially as their costs shoot up.
According to a recent study from the American Health Policy
Institute, ObamaCare will saddle large firms — those with more than
10,000 employees — with an added $163 million to $200 million apiece in
new costs over 10 years. That’s equivalent to $4,800 to $5,900 per worker.
Brokers in Nevada are already reporting premium spikes of 35 to 120
percent for businesses in the state renewing their policies this year.
Rate hikes of this magnitude could put 90,000 employer policies in the state at risk of cancellation, according to William Wright, head of Las Vegas-based Chamber Insurance and Benefits.
The IRS is trying to stop employers from dumping their workers in the exchanges by threatening fines of up to $36,500 per worker. But that fine only applies if an employer tries to subsidize his worker’s exchange coverage with untaxed income.
So firms can still offload their employees onto the exchanges — and
even cover a portion of their premiums, as long as they do so with
income that’s taxed like regular wages.
The IRS may not want employers to dump their workers into the exchanges. But the law’s architects seem to want them to.
Former Obama health adviser Ezekiel Emanuel predicts that within the
next three years, “a few big, blue-chip companies will announce their
intention to stop providing health insurance. . . Then the floodgates
will open.”
By 2025, he estimates, fewer than one in five Americans will get insurance through work.
Another Obama ally, MIT economist Jonathan Gruber, recently admitted
that employer-sponsored insurance isn’t long for this world, calling it “a crumbling building.”
As the employer insurance marketplace starts to crumble, President
Obama continues to say of ObamaCare, “this thing is working.”
Tens of millions of employees will soon find out what “working”
really means when they are kicked off the health plans they were
promised they could keep. Sally C. Pipes is president, CEO and Taube Fellow in Health Care Studies at the Pacific Research Institute.
So much for the $2,500 savings the average couple would realize. We have been sold a bill of goods plain and simple. As someone who lives in New York, my company has just gone through an excruciating chnage of plans after our current carrier hit us with an enormous increase. I;m sure that when our two year cointract with ou new carrier is up we're going to get it again. This is a direct result of combining guaranteed issue with community rating, and it is only going o get worse. This isn'twhat the founders had in mind.
New York Healthcare Premiums Are About To Explode
View photo
.
AP
Insurance companies operating in New York State's marketplace are
expected to ask for double-digit premium hikes next year, according to
new filings from the companies.
Capital New York reports the average requested increase was 13%. The New York Post reports
that number at about 12%. But the bigger insurers are seeking a bigger
premium hike — according to Capital, the six most popular plans in New
York are requesting an average increase of almost 15%.
The Post reports that Excellus
Health Plan, which has about 24,000 customers, is requesting a 19.7%
hike. MVP Health Plan, which has nearly 33,000 customers, is seeking a
19% increase. New York's largest insurer on the exchange — Health
Republic Insurance of New York, which has 68,000 customers — is
requesting a 15% increase.
The requests from states are being closely watched, after the end of the first open-enrollment period of the Affordable Care Act.
According to the reports, insurers cited a number of reasons for the
proposed premium hikes in their filings, including rising medical costs,
having a sicker and/or older pool of customers, and new regulations and
taxes levied by Obamacare.
"Our goal in pricing is to match expected medical spending —
including medical costs, utilization and mandated coverage — with
premiums. Other factors include plan design and new taxes and fees,"
Maria Gordon Shydlo, a spokeswoman at UnitedHealthCare, told the Post.
Health insurance premiums rise
every year. But insurers' proposed increase is markedly higher than
average — though there is little data with which it can directly be
compared. According to a study
released by the Commonwealth Fund, which supports the Affordable Care
Act, individual health insurance premiums rose by more than 10% on
average in the three years before President Barack Obama signed the
Affordable Care Act into law.
In 2008, according to the study
premiums grew by an average of 9.9%, by 10.8% the following year, and
by 11.7% in 2011. According to the study, there was also considerable
variation across states. For example, in 2008, premiums increased by
about 3% in Iowa, compared with about 20% in Connecticut.
Insurers within individual
states have requested varying increases — and even decreases — so far
next year. In Connecticut, two insurers are proposing to raise premiums
by more than 10%, while one insurer, HealthyCT, is proposing almost a 9%
decrease.
Another example: In
Arizona, Cigna requested an average rate hike of 14.4%. Humana, though,
is looking for a startling 25.5% increase, according to The Arizona Republic.
One of the main side stories of the prisoner swap surrounds the issue of whether Sgt. Bergdahl is a deserter. Several former military members have spoken out strongly indicating their belief that Bergdahl did in fact walk away from his post. That remains to be investigated by the military, and Section 85 of the Uniform Code of Military Justice is not as cut and dried as it may appear. It will be very interesting to see how the military handles this case given the notoriety that has attached to it. Stay tuned.
Desertion
Desertion is an aggravated type of Unauthorized Absence (UA) or Absence Without Leave (AWOL).Military prosecutors charge desertion under UCMJ Article 85.
Article 85 provides:
Any member of the armed forces who:
(1)without
authority, goes or remains absent from his unit, organization, or place
of duty with intent to remain away therefrom permanently; or
(2) quits his unit, organization, or place of duty with intent to avoid hazardous duty or to shirk important service
The charge of desertion is more aggravated if it is committed in time of war or to avoid hazardous service.
The key to any desertion charge is the intent or mental state of the service member.Since
it is usually difficult to prove what someone is actually thinking at
any given time, prosecutors will look to circumstantial evidence to
prove the intent to remain away permanently.Factors
like destruction of uniforms or an identification card, changing a name
or SSN, remarks of intent, failure of the member to turn himself in
when he had the opportunity to do so, moving to foreign countries, and
remaining absent for many years are the types of circumstantial evidence
that can help to establish intent to remain away permanently.
Almost
always, the best course of action for a member in an unauthorized
absence status is to return to military authority voluntarily for
resolution of the situation.Very
few people can live an entire lifetime in an unauthorized absence
status without someday being forced to answer to authorities.It
is particularly difficult today, with the advent of pervasive and
interconnected databases that reflect unauthorized absence status.
Most unauthorized absence cases are resolved administratively.However, a command always has the option of resolving more aggravated cases at court-martial.Many unauthorized absence cases have important extenuating and mitigating circumstances.When
presented properly, by a competent military lawyer, such circumstances
can reduce punishment or lead to a better characterization of discharge
in the event of administrative discharge.
I barely know where to begin to comment on the five for one trade that President Obama made with the Taliban to secure the release of Sgt. Bowe Bergdahl. Aside from the fact that the President clearly violated a law that he himself signed requiring 30 day notification to relevant committees in Congress when such releases are contemplated, the fact that he would "celebrate" this action in the Rose Garden and then send Susan "Pinocchio" Rice out to once again lie to the American people is mind boggling. What is this man thinking about?
Let's put aside for a moment the allegations about whether Sgt. Bergdahl deserted (although they seem to be quite real based on statements of troops who were there and what the Army has said). Let's also put aside whether it made sense to turn loose five Taliban higher ups who are clearly going to get back into the fray rather than taking up golf or stamp collecting. We supposedly live in a constitutional democracy with three co-equal branches of government. The President at one time was a lecturer on the constitution, so one would think that he is familiar with the details of that document. Reality seems to be indicating something else. Judging by the universally negative reaction to this episode, particularly from high ranking Democrats such as Sen. Diane Feinstein and constitution scholar Jonathan Turley, there is real and valid concerns about the President ignoring the law. Even the N.Y. Times editorial page has circled the wagons and is playing zone defense. The President is clearly trying to make the Presidency a bit more co-equal the the legislature and the judiciary, and that is not the way things are supposed to work.
Perhaps we need one of the" right wing nut jobs" like Sen. Ted Cruz to stand up and call Obama to account. Even the mainstream media that almost blindly supports and makes excuses for Obama would be hard pressed to justify a cogently reasoned attack on him. Someone needs to draw a red line for Obama.
Even I, a consistent and at times quite a harsh critic of President Obama, have been taken aback by the latest turn of events.
To recapitulate: Mr. Obama released five high-value, high-risk
terrorists from Guantanamo Bay in exchange for Sgt. Bowe Bergdahl, who
it appears was a deserter–and has been known to be a deserter for a
couple of years. People who served with him are calling on the military
to court martial Bergdahl. Media reports indicate that at least six Americans died in their efforts to rescue him.
In de facto negotiating with the Taliban and acceding to their
demands, the president violated a law he signed, requiring him to
inform Congress 30 days in advance of any prisoner release from
Guantanamo Bay. And the effect of this deal will be to incentivize the
capture of more Americans, since it obviously pays dividends.
Yet the Obama administration took this humiliating accommodation and
portrayed it as a victory of American values and purpose. The president
held a Rose Garden event on Saturday extolling the deal. National
Security Adviser Susan Rice referred to it as
an “extraordinary day for America” that deserves to be “celebrated.”
And Ms. Rice said of Sgt. Bergdahl, “He served the United States with
honor and distinction.”
Really, now? A deserter who, according to the New York Times, “left
a note in his tent saying he had become disillusioned with the Army,
did not support the American mission in Afghanistan and was leaving to
start a new life,” is a person who served with “honor and distinction”?
By what ethical calculus does she claim this to be so?
This illustrates quite well the
fundamental differences the president and his aides and I have. My
response to what has occurred is not just intellectual but visceral. I
consider what occurred, when everything is taken into account, to be
substantively indefensible and morally dishonorable. The president, in
my estimation, has rendered a great service to our enemies, and they
know it. (Mullah Omar, the head of the Taliban, hailed the
release of the top five Taliban commanders from Guantanamo as a “great
victory” for the mujahideen of Afghanistan.) The president’s decision
may well endanger American lives down the road. And his administration
has elevated an apparent deserter–one whose actions were reported on in
the past (see this 2012 Rolling Stone article by Michael Hastings) and who is responsible for the death of fellow soldiers who tried to rescue him–into a hero.
This strikes me as morally grotesque. Yet for Mr. Obama and some of
those in the progressive movement, the events of the last few days count
as a fantastic achievement, one worth venerating and exalting.
Years ago John Gray wrote a book called Men Are from Mars, Women Are from Venus.
In this case, it’s the president and I who occupy different worlds,
including different moral worlds. Mr. Obama is proud of a series of acts
that I would think he would, after careful reflection, feel regret for
and even (when it comes to his administration lionizing Sgt. Bergdahl)
some shame.
At times individuals interpret the same events at such different
angels of vision that their actions are nearly incomprehensible one to
another. I will confess that more than I ever imagined, I have that
feeling with my president.
As we have previously posted, the costs of Obamacare are not being talked about in a cogent way. The administration can cheer all it wants about the 8,000,000 signups, but signing up and paying are two very different things. The out of pocket costs are substantial, and if people can't keep up with them they are going to be dropped. As reported below, even people with employer based healthcare are seeing their portion of the monthly premium rise along with increases in the copays and deductibles. This is not painting a pretty picture, and unfortunately, with the current conditions in Washington nothing is going to change for now.
Many employees hit with higher health care premiums
Nanci Hellmich, USA TODAY
12:05 a.m. EDT May 28, 2014
Many can't afford unexpected medical expenses, survey shows.
More
employees are getting hit with higher health insurance premiums and
co-payments, and many don't have the money to cover unexpected medical
expenses, a new report finds.
More than half of companies (56%)
increased employees' share of health care premiums or co-payments for
doctors' visits in 2013, and 59% of employers say they intend to do the
same in 2014, according to the annual Aflac WorkForces Report. It's
based on a survey of 1,856 employers and 5,209 employees at small,
medium and large-size companies.
In 2013, 19% of companies
implemented a major medical plan with a high deductible (more than
$1,000) and Health Savings Accounts as an alternative to a traditional
medical plan, the study finds.
Employees are worried about
covering their medical costs: 49% have less than $1,000 to pay for
unexpected out-of-pocket medical expenses; 53% would borrow from their
401(k)s or credit cards to cover unexpected medical costs; 66% say they
wouldn't be able to adjust to the large financial costs associated with a
serious injury or illness.
The survey also showed 69% of workers
at least somewhat agree that they regularly underestimate the total
costs of an injury or illness, including medical, household and
out-of-pocket expenses.
Many employees are in a "fragile financial
situation" and couldn't afford the out-of-pocket expenses of many
medical situations, says Matthew Owenby, vice president of human
resources for Aflac, a provider of supplemental insurance, such as
accident, cancer, critical illness, dental and vision.
Some companies are already offering high-deductible plans and, "I think we'll see more of this in the future," he says.
The
need to control costs is driving many companies' decisions on benefits,
Owenby says. The report shows that almost half of employers (49%)
agree that controlling costs is the primary objective, and took steps to
contain costs, including:
• 39% hired independent contractors or consultants.
• 32% eliminated or delayed raises.
• 22% eliminated or cut back on benefits.
• 21% changed some full-time workers to part-time workers.
The
report notes that the Kaiser Family Foundation finds that health care
premiums have increased 80% since 2003, nearly three times as fast as
wages (31%) and inflation (27%).
Once again the administration has changed the sum and substance of the Affordable Care Act without getting the law properly amended by Congress. This new giveaway to the insurance companies is totally politically motivated as an attempt to prevent premiums from rising during an election year. The " most open administration ever" continues with its behind the back maneuvers. Folks these people are making things up on the fly with something that makes up fully 18% of the Gross Domestic Product of the United States, and if you think that there are not going to be serious adverse effects from all of this improvising, you're kidding yourselves. Remember, that many of the major pieces of the act (Employer Mandate, Individual Mandate, cancellation of "sub-standard" policies, Cadillac tax on high value plans) have all been delayed by The President until 2015/2016, so things will only get worse when they finally kick in.
Given the current political standoff in Washington, the notion of making any constructive changes to the Affordable Care Act is totally off the table, so unfortunately, this bureaucratic monstrosity is going to hit full force. As I have said before, I would not want to be the Democratic presidential candidate in 2016 trying to defend this at a debate.
Read below:
Federal funds earmarked to offset Affordable Care Act insurer losses
Little-noticed adjustment to Affordable Care Act makes billions of extra dollars available to insurers
Republicans point to new provision as evidence of Obamacare 'bailout' for insurers
Obamacare insurance premium increases could affect midterm congressional campaigns
The
Obama administration has quietly adjusted key provisions of its
signature healthcare law to potentially make billions of additional
taxpayer dollars available to the insurance industry if companies
providing coverage through the Affordable Care Act lose money.
The
move was buried in hundreds of pages of new regulations issued late
last week. It comes as part of an intensive administration effort to
hold down premium increases for next year, a top priority for the White
House as the rates will be announced ahead of this fall's congressional
elections.
Administration officials for months have denied charges
by opponents that they plan a "bailout" for insurance companies
providing coverage under the healthcare law.
They continue to
argue that most insurers shouldn't need to substantially increase
premiums because safeguards in the healthcare law will protect them over
the next several years.
But
the change in regulations essentially provides insurers with another
backup: If they keep rate increases modest over the next couple of years
but lose money, the administration will tap federal funds as needed to
cover shortfalls.
Although little noticed so far, the plan was
already beginning to fuel a new round of attacks Tuesday from the
healthcare law's critics.
"If conservatives want to stop the
illegal Obamacare insurance bailout before it starts they must start
planning now," wrote Conn Carroll, an editor of the right-leaning news
site Townhall.com.
On Capitol Hill, Republicans on the Senate
Budget Committee began circulating a memo on the issue and urging
colleagues to fight what they are calling "another end-run around
Congress."
Obama
administration officials said the new regulations would not put
taxpayers at risk. "We are confident this three-year program will not
create a shortfall," Health and Human Services spokeswoman Erin Shields
Britt said in a statement. "However, we want to be clear that in the
highly unlikely event of a shortfall, HHS will use appropriations as
available to fill it."
The stakes are high for President Obama and the healthcare law.
Although
more than 8 million people signed up for health coverage under the law,
exceeding expectations, insurance companies in several states have been
eyeing significant rate increases for next year amid concerns that
their new customers are older and sicker than anticipated.
Insurers
around the country have started to file proposed 2015 premiums, just as
the midterm campaigns are heating up. Obamacare, as the law is often
called, remains a top campaign issue, and big premium increases in
states with tightly contested races could prove politically disastrous
for Democrats.
If rates go up dramatically, consumers may also turn away from insurance marketplaces in some states, leading to their collapse.
Proposed
increases in a few states where insurers have already filed 2015 rates
have been relatively low, with several major carriers seeking just
single-digit hikes. But insurers in closely watched states, such as
Florida, Pennsylvania, North Carolina and Arkansas, are still preparing
their filings.
"It's absolutely paramount to keep premiums in
check," said Len Nichols, a health economist at George Mason University
who has advised officials working on the law.
The state-based
marketplaces, which opened last year, allow consumers who do not get
health coverage at work to shop among plans that meet basic standards.
Sick consumers cannot be turned away, and low- and moderate-income
Americans qualify for government subsidies to offset their premiums.
To
stabilize this new system, the law set up a complex system of funds,
including one known as the Temporary Risk Corridors Program, that
collect money from insurers and transfer it from companies with
healthier, less expensive consumers to those with sicker, more costly
consumers.
This system was supposed to pay for itself, as does a
similar one used to shift money between drug plans in the Medicare Part D
program.
But insurance industry officials have grown increasingly anxious about the new system's adequacy.
Pressure
is most acute on insurers in states where healthy consumers were
allowed to remain in old plans that are not sold on the new online
marketplaces, an option Obama offered to states amid a political
firestorm over plan cancellations last year. The president had promised
people would be able to stick with their plans.
The renewal
temporarily solved a political problem for the White House, but created a
new one. Maintaining these old plans kept many healthy consumers out of
the marketplaces, making the pool of new customers less healthy and
therefore potentially more expensive for insurers, according to experts.
In
a series of White House meetings over the last several months, Obama
and other senior administration officials have sought to persuade
insurance company CEOs to nonetheless hold rates in check, arguing that
the marketplaces would stabilize over time.
But with proposed 2015
rates beginning to come in, the administration acceded to industry
demands for a clear guarantee that more money would be available to
cover potential losses.
"In the unlikely event of a shortfall for
the 2015 program year, HHS recognizes that the Affordable Care Act
requires the secretary to make full payments to issuers," the regulation
published Friday notes. "In that event, HHS will use other sources of
funding for the risk corridor payments, subject to the availability of
appropriations."
That
language allows the administration to tap funds appropriated for other
health programs to supplement payments to insurers, according to
administration and industry officials.
Among congressional
Republicans, the decision has raised concerns. "If the program costs
more than it brings in, the secretary would be able to divert money
intended for other programs," Republicans on the Senate Budget Committee
warned.
Whether the new regulations will be sufficient to control rates remains unclear.
America's
Health Insurance Plans, the industry's Washington-based lobbying arm,
welcomed the administration's move, saying in a statement that the
regulations "provide important clarity about how these insurer-financed
programs will work as health plans prepare their rates for 2015."
In a note to investors this week, J.P. Morgan also noted that the new rules "should improve stability of the exchange market."
But
some insurers continue to warn of bigger increases. Larry Levitt, an
insurance expert at the nonprofit Kaiser Family Foundation, cautioned
that some consumers may still be in for sticker shock.
"Premium hikes will likely be modest in much of the country," he said. "But probably not everywhere."
Notable Deaths of 2014
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