Sunday, May 22, 2016

ACA/Obamacare: Big Loses, Risk Corridors and Lawsuits

“May 19--Highmark could soon be in good company in suing the federal government over Affordable Care Act reimbursement.

Other insurers have contacted Highmark since the Pittsburgh carrier filed a lawsuit Tuesday over reimbursement for losses incurred in providing coverage under the ACA, president and CEO David Holmberg said Wednesday. The companies are weighing their options to recoup billions of dollars they say are owed, he said.

"The losses were pretty significant," Mr. Holmberg said. "We ended up with the other companies standing here holding the bag. We saw no path forward."

Highmark, the fourth-largest Blues company and dominant provider of ACA coverage in Pennsylvania, Delaware and West Virginia, sued the federal government in the U.S. Court of Federal Claims for $223 million in losses sustained in 2014. In addition, Highmark says it will be owed another $500 million for losses on member claims by July when a government accounting is due.

Through a risk-sharing tool called risk corridors, the government had promised to pick up a share of the losses during the early years of the Affordable Care Act because insurers had little information about setting appropriate rates for a new population.

Instead, insurers received payment for only about 12.6 percent of the amount claimed -- $362 million for $2.87 billion in losses claimed by the carriers, according to Ursula Taylor, partner at the Chicago law firm of Butler Rubin Saltarelli & Boyd LLP.

"It is a holy mess," Ms. Taylor said. "This is a nationwide issue and it affects plans everywhere. Litigators are just beginning to pay attention to this."

Highmark's lawsuit is among a handful that have been filed nationwide over risk corridor reimbursement, but among only a few asserting that the government breached a contract with insurers. Other challenges have focused on the wording of the ACA, which was enacted in 2010.” - Highmark Lawsuit Could Prompt Other Insurers To Recoup ACA Losses, [via Pittsburgh Post-Gazette], 05/19/2016

Link to the entire article appears below:

Friday, May 13, 2016

ACA/Obamacare: Oops! Unauthorized Subsidies of the Made-up Political Authority Kind

‘A federal district court in Washington, D.C., ruled Thursday in favor of the U.S. House of Representatives’ challenge to the Obama administration’s implementation of part of the Patient Protection and Affordable Care Act, also known as Obamacare.

The act has been “revised” dozens of times by the administration since its passage in March 2010, leading the House to sue over the administration’s payment out of the U.S. Treasury of subsidies to insurance providers for providing cost-sharing reductions to certain policyholders, even though Congress explicitly refused to appropriate funds for these subsidies.

As D.C. District Court Judge Rosemary Collyer explained in an opinion last fall, Section 1402 of the law “requires insurers to reduce the cost of insurance to certain, eligible statutory beneficiaries,” and the “federal government then offsets the added costs to insurance companies by reimbursing them with funds from the Treasury.”

This section stated that cost-sharing offsets must be funded by annual appropriations. But the House has never appropriated funds for Section 1402, so it argued that the administration violated Article I, Section 9, Clause 7 of the Constitution, which provides that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.’

‘Collyer was not concerned by the “cascading series of nonsensical and undesirable results” that the administration claimed would flow from failing to recognize a permanent appropriation for Section 1402: “Higher premiums, more federal debt, and decreased enrollment are not consequences of the [Affordable Care Act’s] text or structure,” Collyer explained, but rather those “would flow … from Congress’ continuing refusal to appropriate funds.” She concluded, “That is Congress’s prerogative; the Court cannot override it by rewriting [the statute].”

Collyer granted summary judgment to the House of Representatives, enjoining any “further reimbursements [to insurance companies] under Section 1402 until a valid appropriation is in place.” However, she stayed her injunction pending an appeal.’ - Obama Administration Loses Key Obamacare Case,, 05/12/2016

Link to the entire article appears below:


Federal judge rules Obamacare is being funded unconstitutionally, Los Angeles Times, 05/13/2016



Friday, May 6, 2016

ACA/Obamacare: Another Large Insurer, Humana, Might Leave the ACA Exchanges (see a pattern, huh?)

“Humana became the latest health insurer to serve notice that it might leave some Affordable Care Act exchanges next year, creating more uncertainty for customers ahead of this fall's enrollment window and presidential campaign, during which the law is sure to remain a hot debate topic.

The insurer, which is being acquired by rival Aetna, said Wednesday that it expects to make a number of changes to its business for 2017, and that may include leaving some markets both on and off the exchanges or changing prices. Humana Inc. sold coverage in 15 states this year.

"We do not take these changes lightly," spokesman Tom Noland said in an email. "We are striving to avoid unnecessary coverage disruption wherever possible."

Several insurers say they have struggled with sicker-than-expected customers and had a hard time attracting younger, healthy people to the coverage they sell on the ACA's state-based public insurance exchanges, which opened for enrollment in the fall of 2013. Some also have been hurt by temporary government support programs that haven't delivered as they were initially advertised.

UnitedHealth Group Inc., the nation's biggest insurer, said last month that it was chopping its participation in the exchanges down to only a handful of states in 2017 after expanding to 34 for this year. Aetna Inc. has said it lost more than $100 million last year on its exchange business, but it still sees potential in the new market.” - Humana Might Leave Some ACA Exchanges Next Year,, 05/04/2016

Link to the entire article appears below:

Friday, April 29, 2016

ACA/Obamacare: Total Uninsured Remains at 11.9% -or- Sound and Fury Signify Nothing

“In 2014, after accounting for attrition after the end of the first open-enrollment period (March 31, 2014), 6.7 million individuals had enrolled by December 31. In 2015, 2.6 million additional individuals enrolled (and remained on their plans), raising the total to 9.3 million people enrolled on December 31. If similar trends hold, total enrollment on the ACA exchanges will hit 10 million on December 31, 2016.

Overall, ACA-exchange enrollment has been lower than expected; in 2016, the gap between actual and forecasted enrollment is likely to widen further. For instance, in 2014, the ACA exchanges’ first year, enrollment (6.7 million) exceeded the CBO’s February 2014 forecast (6 million). But in 2015, total enrollment (9.3 million) lagged behind the CBO’s March 2015 forecast (11 million). And if current trends hold, total enrollment in 2016 (about 10 million) will be dramatically less than the CBO’s March 2015 forecast (21 million).

Are these lower-than-anticipated ACA-exchange enrollment figures the result of uninsured individuals securing coverage by other means — such as by enrolling in employer-sponsored coverage or Medicaid? Start with the former. As the Department of Health and Human Services has noted, in a growing economy, employer-sponsored coverage typically rises as more people acquire jobs. Instead, from the fourth quarter of 2013 to the fourth quarter of 2015, employer-sponsored coverage in the U.S. declined.

Or take Medicaid. Enrollment in this government-insurance program for the poor expanded during the aforementioned period; but such expansion largely matched the CBO forecast — and, therefore, was also incorporated into the CBO forecast for ACA-exchange enrollment. Indeed, if the ACA exchanges’ meager enrollment numbers were caused by a rise in coverage obtained elsewhere, America’s overall uninsured rate would have declined in 2015. Instead, it barely budged, hovering around 11.9 percent.” - Why Obamacare Is Failing at "Universal Coverage", foundation for economic education, 04/17/2016

Link to the entire essay appears below:




Tuesday, April 26, 2016

ACA/Obamacare: Without a Bail Out, Health Insurers Sing a Different Tune

“With Congress limiting the bailouts of insurance companies for two years in a row, business is not looking good for the industry that lobbied for Obamacare. The latest casualty is United Healthcare, which announced that it is withdrawing from most of its 34 Obamacare exchanges next year.

Announcing the decision during a first quarter earnings conference call, UnitedHealthcare CEO Stephen Hemsley said, “The smaller overall market size and shorter-term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis."

Due to congressional limits on insurance company bailouts, in October the Department of Health and Human Services transferred $362 million to loss-making insurance companies, rather than the $2.9 billion that they requested.

The Health Insurance Association of America, under the leadership of Karen Ignagni, lobbied heavily in favor of the Affordable Care Act. But now the pool of insured is smaller and sicker than they anticipated.”

“If Congress holds its ground during the appropriations process and refuses to bail out the insurance companies for fiscal 2017, it is likely that more of them will withdraw from the exchanges, raising prices for existing customers. Premiums rose in some markets by 20 percent in 2016, leading to more healthy young people dropping out of plans or not enrolling, accelerating the financial imbalance.

Look at UnitedHealthcare as the canary in the coal mine, and expect more withdrawal announcements in the future.” - UnitedHealthcare’s Exit Augurs Badly for Obamacare,, 04/19/2016

Link to the entire article appears below:




Saturday, April 16, 2016

ACA/Obamacare: Section 1332 and Some Universal Health-Care For You

“As Republican policymakers nationwide continue debating ways to replace Obamacare with patient-centered solutions, a Colorado group has landed a plan implementing a single-payer model of health care on November’s ballot. Coloradans are already bracing for its impact.

In the general election, Colorado residents will not only head to the polls to cast their votes for president, but they’ll also weigh in on a controversial ballot measure: Amendment 69, which would create a government-run health care plan in the Centennial State.

The plan, formally known as ColoradoCare, is the first in the country that would replace Obamacare, action made possible by Section 1332 of the Affordable Care Act, which allows states to receive a waiver from the health care law if their own plan provides residents with “access to high quality, affordable health insurance while retaining the basic protections of” the health care law.

In Obamacare’s place: universal health care.” - Beyond Obamacare: Colorado Considers Single-Payer Model, daily, 04/14/2016

Link to the entire article appears below: