‘Taxpayers will spend $9.8 billion more on Obamacare subsidies next year than this year due to double-digit increases in premiums, according to a report from the Center for Health and Economy.
The Obama administration announced in October that Obamacare premiums were set to increase by double digits, increasing at a faster rate than they have in the past.
“For the median HealthCare.gov consumer, the benchmark second-lowest silver plan premium is increasing by 16 percent this year, before taking into account the effects of financial assistance,” the administration said. According to the center, the silver benchmark plan premiums will increase by 22 percent.
The administration rarely admits that taxpayer subsidies are increasing to cover rising costs, although they often tout those subsidies for protecting Obamacare customers from higher premiums.
Of the 11.1 million individuals enrolled in Obamacare last year, 9.4 million received tax credits averaging $291. The report estimates that $32.8 billion was spent last year on tax subsides for Obamacare premiums.
“Because of the distributions of the population in the marketplace and the lack of household income growth to match premiums, we expect the average monthly tax credit to increase by 26 percent to $367,” the report said. “If we assume that the proportion of enrollees receiving premium tax credits remains the same from 2016 to 2017, then the expected federal spending on premium tax credits for 2017 would be $42.6 billion.”- Obamacare Tax Subsidies Will Increase by $9.8 Billion Due to Premium Hikes
Tax credit spending will rise to $42.6 billion in 2017 from $32.8 billion in 2016,
freebeacon.com, 12/16/2017
Link to the entire article appears below:
http://freebeacon.com/issues/obamacare-tax-subsidies-will-increase-9-8-billion-due-premium-hikes/
“Only four of the original 24 Obamacare health co-ops remain standing after Maryland’s co-op announced Dec. 8 it was suspending the sale of individual health insurance policies, the Daily Caller News Foundation Investigative Group has found.
With the near-collapse of Maryland’s co-op — called Evergreen Health — at least 989,000 individuals nationwide have lost their health insurance coverage when the nonprofit co-ops stopped selling insurance to customers, according to TheDCNF’s tally.
The losses cost taxpayers at least $2.2 billion in upfront federal loans awarded by the Obama administration to 24 nonprofit co-ops under Obamacare. The co-ops were intended to help keep health care costs down by providing non-profit competition with commercial for-profit insurers.
The losses do not include statewide costs where the state or local governments were forced to cover doctor and hospital bills that the failed co-ops could not pay from remaining revenues.
In many cases, those losses were substantial. In New York alone, state taxpayers face at least $200 million in costs owed to medical providers that the bankrupt Health Republic co-op could not cover, according to the Albany Business Review.
Evergreen Health had hoped to find a for-profit partner to bail it out of its precarious financial situation. It owes the federal government $22 million in risk payments, and is unable to cover it, according to the Baltimore Business Journal.
About 9,000 individual customers who went with the co-op out of 264,000 who signed up for all Obamacare health insurance programs available in the state, according to the Baltimore Sun. All 9,000 are being dropped and must find new health insurance coverage during the holiday season.” - Repealing Itself? Only Four of 24 Obamacare Co-Ops Remain Open, dailycaller.com, 12/12/2016
Link to the entire article appears below:
http://dailycaller.com/2016/12/12/repealing-itself-only-four-of-24-obamacare-exchanges-remain-open/
"Fifteen Obamacare co-ops have now failed. Oregon announced Friday that its second taxpayer funded Obamacare co-op would close its doors, leaving 40,000 to find new insurance. The co-op, known as “Oregon’s Health CO-OP now joins a list of 14 other Obamacare co-ops that have collapsed including Health Republic Insurance of Oregon which closed last year. Failed co-ops have now cost taxpayers more than $1.5 billion in funds that may never be recovered.
Co-ops were created as not-for-profit alternatives to traditional insurance companies created under Obamacare. The Centers for Medicare and Medicaid Services (CMS) financed co-ops with startup and solvency loans, totaling more than $2.4 billion in taxpayer dollars. Co-ops were envisioned as innovative providers that could provide member-driven care without needing to worry about recording a profit. In practice, they have failed to become sustainable with many collapsing amid the failure of Obamacare exchanges.
Since September, 12 Obamacare co-ops have collapsed, with only 8 of the original 23 co-ops remaining. Oregon’s Health co-op faced losses of $18.4 million last year and owed the federal government close to $1 million. Co-op across the country have struggled to operate in Obamacare exchanges, losing millions despite receiving multiple government subsidies.
The mass failure of co-ops should not be surprising. Larger insurance companies have also struggled to operate in Obamacare exchanges with many announcing they will stop providing coverage.
The web of government subsidies have also failed to provide insurances the funds they were promised. One of these programs, Risk corridors recouped just 12.6 percent of the funds that insurers requested. The program, which was created to encourage insurers to take on higher risk individuals by transferring funds from insurers who made money to those that posted losses, was required to be budget neutral under law leaving Obamacare insurers with a significant shortfall.
Obamacare co-ops have also been plagued by inept management and unrealistic business models.
As a report by the Daily Caller’s Richard Pollock found, 17 of the 21 co-ops paid out gratuitous salaries to executives reaching as high as $587,000, which is more than four times as much as the $135,000 median health insurance executive salary. Worse still, many of these executives had little to no experience in the insurance industry and some of these excessive salaries were disguised in financial documents as “management fees”. Last year, 21 of 23 co-ops posted losses." - Oregon Obamacare Co-op Becomes 15th to Collapse, Americans for Tax Reform, 07/11/2016
Link to the entire article appears below:
https://www.atr.org/oregon-obamacare-co-op-becomes-15th-collapse
‘The dozen failed ObamaCare cooperatives have not repaid any of the $1.2 billion in federal loans they received and still owe more than $1 billion in additional liabilities, according to recent financial statements cited Thursday at a congressional hearing.
“We shouldn’t hold our breath on repayment,” Sen. Rob Portman, R-Ohio, chairman of the Senate Permanent Subcommittee on Investigations, said in his opening statement at the hearing.
“In some states, these losses will be absorbed by other insurance companies—which means, by the policyholders of other insurance companies who have to pay increased … premiums,” he said. “In other states, doctors, hospitals and individual patients stand to suffer large out-of-pocket losses due to the co-op failures—as our report details.”
Portman’s statement, first obtained by Fox News, refers to an investigation by the committee’s majority staff.
It claims the most recent balance sheets provided to the subcommittee show the failed cooperatives owe more than $700 million to doctors and hospitals for plan year 2015.
The failed cooperatives lost $376 million and exceeded the projected worst-case-scenario losses outlined in their loan applications by more than $260 million in 2014. They lost an additional billion dollars in 2015, according to the report.
“Once the co-ops got going in 2014, things went south in a hurry—both in terms of financial losses and enrollment figures that wildly deviated from the co-ops’ own projections,” Portman said. “Despite getting regular reports that the co-ops were hemorrhaging cash, HHS [the Department of Health and Human Services] took essentially no corrective action for over a year.”’ - Failed ObamaCare co-ops have not repaid $1.2B in federal loans, docs say, foxnews.com, 03/10/2016
Link to the entire article appears below:
http://www.foxnews.com/politics/2016/03/10/failed-obamacare-co-ops-have-not-repaid-1-2b-in-federal-loans-docs-say.html
‘NEW YORK (AP) — The sudden collapse of the largest nonprofit insurance cooperative created by President Barack Obama's health care law is causing headaches in New York, especially for medical providers owed millions of dollars for treating the failed plan's patients.
More than 200,000 people insured through Health Republic Insurance of New York have until Monday to sign up with another company if they want to maintain coverage in December.
State regulators ordered the insurer to shut down at the end of the month because of severe financial problems. They are also investigating what they say were inaccurate financial filings by the company.
The closure - part of a wave of failures of the new co-ops nationwide - has been a big hassle for Health Republic policyholders, who have had to shop around quickly for alternative coverage.
The situation may be worse, though, for doctors, hospitals and other clinicians. They are legally obligated to continue treating Health Republic patients through the end of the month but have been given no assurances they will ever be paid for that care.
"I'm aware of at least two physicians who have gotten checks from Health Republic, and those checks have bounced," said Dr. Joseph Maldonado, president of the Medical Society of the State of New York.
Two groups that represent hospitals, the Health Care Association of New York State and the Greater New York Hospital Association, said their member facilities are already owed at least $150 million, not including care provided in much of November.
Medical practices are likely owed millions of dollars more. A survey of 800 doctors by the medical society found that 43 percent were owed money by the company. Nearly 8 percent reported being owed $25,000 or more. One practice of 22 physicians reported being owed more than $5 million, the society said.’ - Health Co-Op Failure Leaves Doctors Owed Millions, insurancenewsnet.com, 11/24/2015
Link to the entire article appears below:
https://insurancenewsnet.com/oarticle/2015/11/24/health-co-op-failure-leaves-doctors-owed-millions.html
“Two nonprofit health insurance co-ops that were established under the ACA announced on Friday that they were going out of business for financial reasons. The two organizations in Colorado and Oregon are the latest in a string of eight such coops that have closed their doors in recent months, according to The Hill. That means that only 15 of the original 23 co-ops will remain in business next year – unless of course more decide to fold in the coming weeks.
We should know fairly soon whether other co-ops will fold because the sign-up period for next year’s Affordable Care Act coverage begins November 1 and the remaining co-ops must decide whether to stay in business.
Amy Goldstein of TheWashington Post first reported on the full extent of the co-ops financial crisis last week. The non-profit health plans were conceived of as a “consumer-friendly counterweight” to traditional for-profit insurers – and as a way to encourage more competition and greater consumer choice, according to the report.
The federal government provided billions of dollars in loans to help get these co-ops off the ground. But many of them had ragged startups and were troubled by highly flawed enrollment and business models.
Alarmed by these serious shortcomings, the Centers for Medicare and Medicaid Services (CMS), which oversees Obamacare, issued warning letters to 11 of the co-ops, placing them under special scrutiny and requiring that they produce a plan of “corrective action.”
Instead of finding a way out of the morass, many of the co-ops simply threw in the towel. It began in February when a program that served residents of Iowa and Nebraska announced it was folding. That was followed in July by the shuttering of a co-op in Louisiana, according to The Post.” - Obamacare Falls Short on Sign-Ups While Co-Op System Crumbles, thefiscaltimes.com, 10/18/2015
Link to the entire article appears below:
http://www.thefiscaltimes.com/2015/10/18/Obamacare-Falls-Short-Sign-Ups-While-Co-Op-System-Crumbles
‘A Nevada health insurance provider that received more than $65 million in taxpayer-funded loans from the federal government announced last week that it is discontinuing operations at the end of the year.
The Nevada Health Co-Op will close its doors beginning Jan. 1 because of “challenging market conditions.” The co-op will be the third of the 23 consumer-oriented and operated plans created under Obamacare to shutter.’
‘The 23 co-ops received $2.5 billion in loans from the Centers for Medicare and Medicaid Services to help get off the ground and remain solvent. The federal government awarded the Nevada Health Co-Op $65.9 million in startup loans. It’s unclear whether the co-op will be able to repay the loans.
According to the Nevada Health Co-Op, it enrolled 14,000 consumers in 2014. However, the nonprofit insurer projected it would enroll 33,748, according to a July audit of co-ops from the Department of Health and Human Services inspector general.’
‘The analysis from the Department of Health and Human Services also found that the Nevada Health Co-Op projected that it would make $371,000 in 2014. However, it lost more than $15 million.’ - This Obamacare Co-Op Was Supposed to Make Money. Instead, It Lost Over $15 Million, 08/31/2015, dailysignal.com
Link to the entire article appears below:
http://dailysignal.com/2015/08/31/this-obamacare-co-op-was-supposed-to-make-money-instead-it-lost-over-15-million/?utm_source=heritagefoundation&utm_medium=email&utm_campaign=morningbell&mkt_tok=3RkMMJWWfF9wsRohvq3OZKXonjHpfsX56OgvWa%2BylMI%2F0ER3fOvrPUfGjI4ATMpnMK%2BTFAwTG5toziV8R7jHKM1t0sEQWBHm
“More than 500,000 people enrolled in health plans offered by nonprofit insurance companies created under the Affordable Care Act.
And with the co-ops receiving an average of $108.7 million from the federal government, taxpayer-backed funding per enrollee topped $17,000.
Twenty-three co-ops received a total of $2.5 billion from the federal government and enrolled more than 520,000 people in plans through September. However, an analysis conducted by The Daily Signal published yesterday found that just one, Maine Community Health Options, was profitable last year.
Using the latest quarterly filings for 22 co-ops, The Daily Signal examined how much money (in federal dollars) co-ops received per consumer who enrolled in a group or individual plan. On average, each co-op received $17,344 from the Centers for Medicare and Medicaid Services per enrollee. Data for New Jersey’s co-op, Health Republic Insurance of New Jersey, was not available.” - Obamacare Co-Ops Cost Taxpayers $17,000 Per Enrollee, dailysignal.com, 02/11/2015
Link to the entire article appears below:
http://dailysignal.com/2015/02/11/much-taxpayer-money-obamacare-co-op-receive-per-enrollee/?utm_source=heritagefoundation&utm_medium=email&utm_campaign=morningbell&mkt_tok=3RkMMJWWfF9wsRoiu6zBZKXonjHpfsX56OgvWa%2BylMI%2F0ER3fOvrPUfGjI4ESsNrI%2BSLDwEYGJlv6SgFQrLBMa1ozrgOWxU%3D
Late last month, the Congressional Budget Office reported that the provisions within Obamacare expanding access to insurance coverage would cost 20% less than the agency estimated in 2010, when the law passed.
The White House was ecstatic. “The estimates released today by CBO once again confirm the progress we’ve made,” said deputy press secretary Eric Schultz.
Taxpayers, however, should worry. A closer look at the CBO’s numbers shows that Obamacare is growing much more expensive — and disruptive.
The CBO now expects Obamacare to cover far fewer uninsured than it previously thought. In a March 2011 report, the nonpartisan agency predicted that Obamacare would extend coverage to 34 million uninsured by 2021. It has since downgraded that number to 27 million — and concluded that Obamacare will leave 31 million Americans without insurance.
So the law’s overall price tag has declined only because it’s covering fewer people.
Left unsaid is the fact that Obamacare is set to spend more per person. If the law is not repealed, Obamacare will shell out $7,740 in subsidies for every person who gains coverage in 2021. That’s a 7% increase over the agency’s per-person estimate in 2011.
The CBO now projects that the law will cost nearly $2 trillion over the next ten years. Obamacare’s subsidies alone will cost $1.1 trillion. In 2010, the agency put the cost of the entire law at $940 billion over its first decade.
Obamacare hasn’t just failed to expand coverage as projected — it’s caused more people to lose their insurance than its architects intended. The CBO now estimates that 10 million people will lose their employer-provided health benefits by 2021. That’s a tenfold increase over the agency’s 2011 projections. - Buried In The Numbers: Obamacare's Costs Are Climbing, Not Receding, Forbes, 02/09/2015
Link to the entire article appears below:
http://www.forbes.com/sites/sallypipes/2015/02/09/buried-in-the-numbers-obamacares-costs-are-climbing-not-receding/#comment_reply
“More and more businesses are figuring out that continuing to offer health benefits puts them at a competitive disadvantage vis-Ã -vis firms who socialize the cost of health care by shifting their employees onto Obamacare exchanges. These crafty firms, however, probably don’t realize they are putting their employees at enormous risk. If they are operating in one of 36 states where Obamacare might come to a screeching halt in the second half of 2015, their workers could lose their subsidized Obamacare plans as early as July.
This is what will happen if the Supreme Court decides in favor of the petitioner in the Obamacare case of King v. Burwell. This case addresses the question of whether or not the federal government can pay subsidies to insurers in states that did not establish their own health-insurance exchanges.
The Court will hear oral arguments on March 4, and is expected to announce its decision in June or July. If it finds in favor of King, tax credits to health insurers via the federally operated exchanges in 36 states will likely stop within a few weeks. Enrollees would then face the true premiums of their policies for the first time. Many would not be able to afford them.
Enrollees are likely unaware of this possibility, because the exchanges were designed to camouflage the subsidies. The Obama administration likes to pretend that it has actually lowered the cost of health insurance in the individual market. Thus, the exchanges are designed show applicants only the premiums net of subsidies.
According to a recent report from the Department of Health and Human Services, the agency headed by the very same Sylvia Burwell named in the lawsuit, the average Bronze plan for a single person in 2015 is $265 per month. Silver, the most popular plan, has an average premium of $336 per month. Platinum, the most expensive, costs $439. However, the agency also notes that 8 of 10 returning enrollees will be able to get a plan for less than $100, regardless of the metal level they selected in 2014.
A 27-year old single woman earning a little over $25,000, for example, would pay a maximum of $148 for the second-lowest-cost Silver plan. However, the actual premium of that plan is $222. So, if the Supreme Court knocks out the subsidy, her premium will jump by $74, an increase of 50 percent!” - Administration should fully disclose risks to enrollees in Obamacare exchanges, The Hill, 02/06/2015
Link to the entire article appears below:
http://thehill.com/blogs/congress-blog/healthcare/231918-administration-should-fully-disclose-risks-to-enrollees-in
"A startup insurance company loaned $145 million by the U.S. government under Obamacare is running out of money and being taken over by state officials in Iowa.
The company, CoOportunity Health, which also serves Nebraska, was placed under Iowa Insurance Commissioner Nick Gerhart’s supervision this week and is no longer accepting new enrollees, according to a statement from his office. While Gerhart’s agency will operate the company for the time being, it’s urging policyholders to seek a new insurer.
CoOportunity Health is a co-op, or Consumer Operated and Oriented Plan, one of 23 nonprofit health insurers providing coverage in 26 states. They were created under the Patient Protection and Affordable Care Act to increase competition. The fate of CoOportunity provides new fodder for Obamacare opponents who argue that the law wastes government money." - Insurer That Got $145 Million Loan Under Obamacare Is Almost Broke, conservativeread.com, 12/27/2014
Link to the entire article appears below:
http://conservativeread.com/insurer-that-got-145-million-loan-under-obamacare-is-almost-broke/
“Starting this year, the United States’ working population will face three major employment disincentives resulting from the very benefits the Affordable Care Act (ACA) provides: (1) an explicit tax on full-time work, (2) an implicit tax on full-time work for those who are ineligible for the ACA’s health insurance subsidies, and (3) an implicit tax that links the amount of available subsidies to workers’ incomes.
A new study published by the Mercatus Center at George Mason University advances the understanding of how much these ACA taxes will reduce overall employment, and why. It concludes that the reduction will be nearly double that projected by previous analyses. Labor markets ultimately will reduce weekly employment per person by about 3 percent—translating to roughly 4 million fewer full-time-equivalent workers.” - Mercatus Center, George Mason University, 10/07/2014
Link to the working paper by Casey Mulligan:
http://mercatus.org/publication/affordable-care-act-and-new-economics-part-time-work?utm_source=Email&utm_medium=Hill&utm_campaign=Newsletter
Assume for a moment you are one of the many millions that have already procured an on-exchange health insurance policy through Healthcare.gov. Yes, assume for a moment you were one of the persistent people that had the patience to pass through seventy six web-based pages of data collection on a highly glitch prone web site and acquired a health insurance policy. One would assume you weathered the storm, made a gallant effort and now there is nothing but blue skies ahead. Congratulations are in order, right? Maybe not so much. How so?
Now it’s renewal time and the yellow brick road forks. Here are several items one will encounter at the fork in the road known as open enrollment renewal:
(a) as one approaches open enrollment renewal, the directional sign is blank at the fork in the road . One will not be able to know plan prices or plan availability until 11/15/2014 which is the first day of open enrollment (and a politically convenient date falling after the mid-term elections), (1)
(b) one’s current plan selected on-exchange at Healthcare.gov, for a multitude of reasons, may no longer be available. Yes, do not pass go, do not collect two hundred dollars and merely start all over again by searching for a plan, (2)
(c) your plan may still be available but the price has risen in a substantial manner. If the price rise is extreme, merely start all over again by searching for a plan, (3)
(d) if one was/is receiving a subsidy then income must be projected again in regards to subsidy eligibility. One must further consider the change in price of the second lowest silver plan price now available upon the exchange, which is a determinant of subsidy, and then considerer the new price of the second lowest silver plan in relation to the plan one considers selecting, (4)
(e) one might do nothing. Huh? That’s right, if you already have an on-exchange health insurance policy through Healthcare.gov, and if the plan is continued, and you do nothing you are automatically re-enrolled. Sweet! An easy way out! Nada. The plan may continue and yes one is re-enrolled, but the price has likely changed upward. If one is receiving a subsidy and since one did nothing, one’s income was not re-projected and the new price of the second lowest silver plan in relation to the new price of the old plan you selected (automatically re-enrolled) still holds as a determinant, so your subsidy likely remains the same while your plan’s price rises substantially and one ends this zero effort exercise with a nasty premium increase, (5)
(f) meanwhile the process outlined above needs initiated between 11/15/2014 and 12/15/2014. Renewal open enrollment is a thirty day window and is not the same as the open enrollment period for new comers which is 11/15/2014 to 02/15/2015. (6)
Happy holidays! One might consider that holiday shopping after 12/15/2014 and don’t be late for Thanksgiving dinner!
Notes:
(1) Next edition of HealthCare.gov is unveiled, foxnews.com, 10/08/2014
http://www.foxnews.com/politics/2014/10/08/next-edition-healthcaregov-is-unveiled/
(2) ACA/Obamacare: Why Your Old Plan Got Cancelled and Why Your New Plan Is Likely to be Cancelled Too.
http://thelastembassy.blogspot.com/2014/10/acaobamacare-why-your-old-plan-got.html
(3) (4) How Automatic Renewal Could Cost Obamacare Enrollees, WJS, 07/02/2014
http://blogs.wsj.com/washwire/2014/07/02/how-automatic-renewal-could-cost-obamacare-enrollees/
(5) (6) Next edition of HealthCare.gov is unveiled, foxnews.com, 10/08/2014
http://www.foxnews.com/politics/2014/10/08/next-edition-healthcaregov-is-unveiled/
'Taxes? Who wants to think about taxes around Labor Day?
But if you count on your tax refund and you're one of the millions getting tax credits to help pay health insurance premiums under President Obama's law, it's not too early.
Here's why: If your income for 2014 is going to be higher than you estimated when you applied for health insurance, then complex connections between the health law and taxes can reduce or even eliminate your tax refund next year.’
‘The danger is that as your income grows, you don't qualify for as much of a tax credit. Any difference will come out of your tax refund, unless you have promptly reported the changes.
Nearly 7 million households have gotten health insurance tax credits, and major tax preparation companies say most of those consumers appear to be unaware of the risk.
"More than a third of tax credit recipients will owe some money back, and (that) can lead to some pretty hefty repayment liabilities," said George Brandes, vice president for health care programs at Jackson Hewitt Tax Service.
Two basic statistics bracket the potential exposure:
• The average tax credit for subsidized coverage on the new health insurance exchanges is $264 a month, or $3,168 for a full 12 months.
• The average tax refund is about $2,690.’
‘Concern about the complex connection between the health care law and taxes has increased recently, after the Internal Revenue Service released drafts of new forms to administer health insurance tax credits next filing season.
The forms set up a final accounting that ensures each household is getting the correct tax credit that the law provides. Various factors are involved, including income, family size, where you live and the premiums for a "benchmark" plan in your community.
Even experts find the forms highly complicated, requiring month-by-month computations for some taxpayers.
Note: The following is a link to the IRS draft of form 1095A:
http://www.irs.gov/pub/irs-dft/f1095a--dft.pdf
Taxpayers accustomed to filing a simplified 1040EZ will not be able to do so if they received health insurance tax credits this year.’
Some highlights:
—You may have heard that the IRS cannot use liens and levies to collect the law's penalty on people who remain uninsured. But there is no limitation on collection efforts in cases where consumers got too big a tax credit. If your refund isn't large enough to cover the repayment, you will have to write the IRS a check. "They are not messing around," Brandes said.
—Health insurance is expensive, and with that in mind, the repayment amount the IRS can collect is capped for most people. For individuals making less than $22,980 the IRS can only collect up to $300 in repayments. That rises to $750 for individuals making between $22,980 and $34,470. For individuals making between $34,470 and $45,960, the cap is $1,250.
For families, the cap is double the amount that individuals can be charged, but the income thresholds vary according to household size. An IRS table may help simplify computation, which is based on the federal poverty levels for 2013.
—There is no collection cap for households making more than four times the federal poverty level. They face the greatest financial risk from repayments, because they would be liable for the entire amount of the tax credit they received.
Those income thresholds are $45,960 and above for an individual, $78,120 and above for a family of three, and $94,200 for a family of four. Ciaramitaro says people facing that predicament should try to minimize their taxable income through legal means, such as putting money into an IRA. The IRS says it will work with taxpayers who can't pay in full so they understand their options.’ - Tax refunds may get hit due to health law credits, USA Today, 08/24/2014
Link to the entire article appear below:
http://www.usatoday.com/story/money/personalfinance/2014/08/24/tax-refunds-may-get-hit-due-to-health-law-credits/14529169/
'Now, a bigger and more fundamental problem may lie ahead for Obamacare. As early as this week, a D.C. appellate court could rule against the administration on the most basic question: Are the massive premium subsidies flowing to low-income people through the federal insurance exchanges legal, or should that money be cut off?
A three-judge panel of the U.S. Court of Appeals is expected to rule on a suit claiming that only those who signed up for coverage through the 14 state insurance marketplaces are entitled to subsidies. The suit, Halbig vs. Burwell, argues that the subsidies can’t be provided to people in states that signed up for the federal exchange. The impact could be huge: Only 14 states set up their own insurance marketplaces, while 36 others opted to let the federal government create and operate their exchanges. If the subsidies are ruled illegal for the federal exchanges, that could torpedo the Affordable Care Act by making insurance unaffordable for millions of people relying on the subsidies to lower the cost of their premiums.
In essence, after years of conflict over the controversial health care law, the courts could end up doing what congressional Republicans have repeatedly tried and failed to do: Dismantle Obamacare.
Roughly 8 million people signed up for Obamacare through the state and federal exchanges in the first six-month enrollment period, which ended this spring. Eighty-seven percent of those who signed up for insurance in the federal exchanges received subsidies – or about 5.4 million people, according to analyses.
Ron Pollack, executive director of Families USA and a major booster of Obamacare, has been widely quoted as calling the legal challenge to the subsidies “the greatest existential threat” to the survival of the Affordable Care Act.
In an email on Sunday, Pollack said that without the subsidies, “The vast majority would be unable to afford the premiums and would re-join or join the ranks of the uninsured.”
He added, “The loss of the subsidies would make it very difficult to enroll additional low- to moderate-income people in coverage – largely because affordability is the key issue for people when they consider whether or not to enroll in coverage.”
The legal argument, at its root, is over what Congress intended when it wrote the health law back in 2010.
Four cases, including Halbig vs. Burwell, have been brought by employers and individuals in various courts. The cases are challenging the government’s contention that Congress wanted individuals in both state and federally operated exchanges to qualify for subsidies.
On March 25, a three-judge panel of the D.C. Circuit heard oral arguments in the Halbig case. Another panel in the Fourth Circuit Court of Appeals in Richmond, Virginia, heard arguments in a similar case, King vs. Burwell, on May 14. (Burwell refers to the new Health and Human Services Secretary, Sylvia Mathews Burwell.)
Michael Cannon of the Cato Institute and Jonathan Adler of Case Western Reserve University contend in a recent analysis in Health Affairs that statutory eligibility rules for the ACA’s premium-assistance tax credits “clearly say” that eligibility “depends on the applicant being enrolled in a qualified health plan ‘through an Exchange established by the State.’”
“The rules employ that restrictive phrase nine times, without deviation,” the two scholars write. “Since the Act explicitly ties its cost-sharing subsidies, employer-mandate penalties, and (in many cases) individual-mandate penalties to the availability of these tax credits, it therefore also authorizes those provisions only in states that establish Exchanges.”
They added, “This condition was not a fluke or a drafting error.”' - Court Challenges to Subsidies Threaten Obamacare, The Fiscal Times, 07/07/2014
Link to the entire article appears below:
http://www.thefiscaltimes.com/Articles/2014/07/07/Court-Challenges-Subsidies-Threaten-Obamacare
Update: Get ready for an even bigger threat to Obamacare, Jonathan Turley, 06/30/2014, latimes.com
http://www.latimes.com/opinion/op-ed/la-oe-0701-turley-obamacare-subsidy-halbig-20140701-story.html
‘Nevada has become the latest state to announce it will concede Obamacare exchange enrollment responsibilities to the federal government via healthcare.gov.’
‘Nevada received $91 million in grants and, as of April 19, had enrolled 45,390 people, for a federal taxpayer cost of $2,005 per enrollee. Cover Oregon, the exchange that was never able to successfully enroll one person online from start to finish, got $305 million in federal grants and had 68,308 enrollees, so its cost was about $4,465 per enrollee. Massachusetts’s per-enrollee cost was $5,648. Hawaii received $205 million in grant money and enrolled only 8,592 people, for an astonishing per-enrollee cost of $23,859.
Worse yet, in Nevada, the federal government is now spending even more money to transition their exchange to the federal exchange.
According to Nevada’s announcement:
“The federal government will pay all costs associated with transitioning from the BOS [Xerox’s health insurance enrollment system] to healthcare.gov. Nevada will not be required to pay a monthly per -member per-month fee to healthcare.gov for its use. The federal government will pay 90 percent of any costs incurred to disconnect Nevada’s Medicaid system from the BOS and to connect Nevada’s Medicaid system to healthcare.gov. The initial high estimates of this cost ranges between $15 – $20 million, of which Nevada must pay 10 percent.” ‘ - Nevada Gives Up on $91 Million Obamacare Exchange, hertitage.org, 05/28/2014
Link to the entire article appears below:
http://blog.heritage.org/2014/05/28/nevada-gives-91-million-obamacare-exchange/?utm_source=heritagefoundation&utm_medium=email&utm_campaign=morningbell
“The government may be paying incorrect subsidies to more than 1 million Americans for their health plans in the new federal insurance marketplace and has been unable so far to fix the errors, according to internal documents and three people familiar with the situation.
The problem means that potentially hundreds of thousands of people are receiving bigger subsidies than they deserve. They are part of a large group of Americans who listed incomes on their insurance applications that differ significantly — either too low or too high — from those on file with the Internal Revenue Service, documents show.
The government has identified these discrepancies but is stuck at the moment. Under federal rules, consumers are notified if there is a problem with their application and asked to upload or mail in pay stubs or other proof of their income. Only a fraction have done so, according to the documents. And, even when they have, the federal computer system at the heart of the insurance marketplace cannot match this proof with the application because that capability has yet to be built, according to the three individuals.
So piles of unprocessed “proof” documents are sitting in a federal contractor’s Kentucky office, and the government continues to pay insurance subsidies that may be too generous or too meager. Administration officials do not yet know what proportion are overpayments or underpayments. Under current rules, people receiving unwarranted subsidies will be required to return the excess next year.
The inability to make certain the government is paying correct subsidies is a legacy of computer troubles that crippled last fall’s launch of HealthCare.gov and the initial months of the first sign-up period for insurance under the Affordable Care Act. Federal officials and contractors raced to correct most of the technical problems hindering consumers’ ability to choose a health plan. But behind the scenes, important aspects of the Web site remain defective — or simply unfinished.”
“Because the computer capability does not yet exist, the work will start by hand, according to two people familiar with the plans. It will focus at first not on income questions, but on another roughly 1 million cases in which people enrolled — or tried to enroll — in health plans and ran into questions about their citizenship status. Throughout the sign-up period that ended earlier this spring , flaws in HealthCare.gov blocked many naturalized citizens or permanent legal residents, requiring them to submit immigration documents that are, like the income information, caught in a backlog.
The work of sorting out inaccurate incomes — and inaccurate subsidies, as a result — will likely begin sometime this summer, two individuals familiar with the plans said.”
“Of the various technical problems that remain with HealthCare.gov, the difficulty in straightening out discrepancies affects an especially large number of consumers. Of the roughly 8 million Americans who signed up for coverage this year under the health-care law, about 5.5 million are in the federal insurance exchange. And according to the internal documents, more than half of them — about 3 million people — have an application containing at least one kind of inconsistency. These inconsistencies have arisen as the information listed on their applications has been cross-checked, via a newly built federal data hub, with the Social Security Administration and other federal agencies, as well as incarceration, IRS and immigration records.
The income information is significant because the government for the first time is providing subsidies to help working-class and middle-class Americans buy private health plans. Under the federal rules, an application is “flagged” for special checking if the income someone says that they expect this year is at least 10 percent above or below the most recent income in their IRS tax returns.”
“The federal rules say that consumers have 90 days after applying to try to prove that their information is correct and, if an inconsistency is not resolved by then, whatever the federal records show is assumed to be correct. By now, about one-third of people with inconsistencies have passed their 90-day window. But because of the trouble verifying incomes, the government has not lowered or raised anyone’s subsidies.
Making sure that incomes — and subsidies — were accurate became a prominent issue during budget negotiations last year, as House and Senate Republican opponents of the health-care law warned of potential fraud. Health and Human Services Secretary Kathleen Sebelius promised to thoroughly vet the salary information that people submitted as part of their health insurance applications.” - Federal health-care subsidies may be too high or too low for more than 1 million Americans, Washington Post, 05/16/2014
Upon further review, consider for a moment Healthcare.gov and the segue to the pricing page. The questions asked on the website, just prior to finding pricing is: “What is your household's expected income for 2014?” If one asks a question about "expected" income, one might find some interesting answers.
Link to the entire Washington Post article appears below:
http://www.washingtonpost.com/national/health-science/federal-health-care-subsidies-may-be-too-high-or-too-low-for-more-than-1-million-americans/2014/05/16/8f544992-dd14-11e3-8009-71de85b9c527_story.html
Update 05/21/2014: Yes, Some People Will Have to Pay Back Their Obamacare Subsidies, heritage.org
http://blog.heritage.org/2014/05/21/yes-people-will-pay-back-obamacare-subsidies/?utm_source=heritagefoundation&utm_medium=email&utm_term=picture&utm_content=140524&utm_campaign=Saturday
