ACA/Obamacare: The Death Spiral of Rising Prices

ACA/Obamacare: The Incredible Shrinking ‘Competitive’ Co-Ops

‘Another Obamacare co-op, Connecticut’s HealthyCT, is closing its doors, and at least two most could follow suit as the nonprofit insurers decide whether they will be able to remain on firm financial footing.

The nine remaining co-ops of the original 23 co-ops must make payments totaling at least $130 million through Obamacare’s risk adjustment program, which could damage their viability.

The Connecticut Insurance Department announced Tuesday that HealthyCT was placed under state supervision, leaving approximately 40,000 Connecticut residents to find new health insurance during the next open enrollment period.

HealthyCT is the 14th co-op created under Obamacare to fail since the health care law’s exchanges opened in 2013.

The co-ops, or consumer operated and oriented plans, were created to inject competition and choice in areas where little existed. The Centers for Medicare and Medicaid Services awarded the 23 co-ops $2.4 billion in startup and solvency loans to help the new nonprofit insurance companies get off the ground.

However, more than half of the co-ops have failed to succeed in the health insurance market, despite the $1.5 billion in loans the 14 collapsed co-ops collectively received.

HealthyCT alone received nearly $128 million in loans, which included an infusion of $48.4 million in solvency loans awarded in September 2014.

Katharine Wade, state insurance commissioner, said HealthyCT’s “hazardous financial condition” led her to close the co-op’s doors. The nonprofit insurer’s financial issues were compounded after the Centers for Medicare and Medicaid Services announced last week the payments insurers must make under Obamacare’s risk adjustment program.

The Department of Health and Human Services asked HealthyCT to pay $13.4 million into the risk adjustment program, which redistributes money from insurers with healthy customers to insurers with sicker, more costly consumers.

“Unfortunately HealthyCT’s financial health is unstable, having been seriously jeopardized by a federal requirement issued June 30, 2016, that it pay $13.4 million to the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services as part of the Affordable Care Act’s risk adjustment program,” Wade said in a statement Tuesday. “As a result, it became evident that this risk adjustment mandate would put the company under significant financial strain.”’- Obamacare’s 14th Co-Op Is Closing Its Doors, and at Least 2 More Could Close Soon, dailysignal.com, 07/06/2016

Link to the entire article appears below:

http://dailysignal.com/2016/07/06/obamacares-14th-co-op-is-closing-its-doors-and-at-least-2-more-could-close-soon/

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, dailysignal.com, 05/12/2016

Link to the entire article appears below:

http://dailysignal.com/2016/05/12/obama-administration-loses-key-obamacare-case/?utm_source=TDS_Email&utm_medium=email&utm_campaign=MorningBell&mkt_tok=eyJpIjoiTWpka05XVmpZalEzT0RnMiIsInQiOiJiMGhZK0o2K0dOY1Q3aXBKNWtCZGdjd3hJd0s0UEk2K0tJYVJTQ3plaVd0RzFPMXcwVFpLWDdxNDBMYnZ0dHNhbzVNWkcybGNuV0lDTTN6Rmp3WEtHclFUS2d0ajB2Q29GYzFyaDNpeFdtND0ifQ%3D%3D

Updated: 

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

http://www.latimes.com/nation/la-na-obamacare-court-ruling-20160512-snap-story.html

 

 

ACA/Obamacare: Yet Another Co-Op Bites the Dust -or- Your Tax Dollars Down An Endless Rabbit Hole

“The largest private provider of health insurance policies on Kynect, Kentucky's health insurance exchange, is going out of business.

The Louisville-based Kentucky Health Cooperative Inc. announced Friday that it will end current memberships on Dec. 31 and will not add new members because of financial problems. It will not offer health insurance plans on Kynect when open enrollment for 2016 coverage starts on Nov. 1.

The cooperative has about 51,000 members in all 120 Kentucky counties.”

“Glenn Jennings, the interim chief executive officer of Kentucky Health Cooperative, said the decision to shut down was a result of not receiving adequate federal funding "on which the organization had relied."

The co-op, financed by loans under the reform law, lost $50 million last year after selling 75 percent of the private insurance policies purchased on Kynect in its first year. That was far more than the 30,000 customers it was projected to lure.

Many of those members did not previously have health insurance, which led to "a lot of people with pent up medical needs," Jennings said. "When they suddenly had health insurance ... they began using their benefits."

Jennings said the co-op had reversed a trend of significant financial losses, but needed further support under a temporary program meant to keep prices lower by sharing losses between insurance plans and the federal government.

The company's losses had slowed to $4 million by the end of the first half of 2015, he said.

"We were on track to reverse direction and begin operating in the black, and we expected this to come about in 2016," Jennings said.

But the federal government announced last week that it would provide just 12.6 percent of the money requested by insurance providers through the assistance program.

Kentucky had hoped to get $77 million but got $9.7 million, he said.” - Kentucky Health Cooperative Going Out Of Business, 10/09/2015, insurancenewsnet.com

Link to the entire article appears below:

https://insurancenewsnet.com/oarticle/2015/10/09/kentucky-health-cooperative-going-out-of-business-51000-insurance-customers-affected.html