"The omnibus spending bill recently passed by Congress and signed into law by President Obama delays the onset of the Affordable Care Act (ACA)’s so-called “Cadillac plan tax” for two years. The new law also weakens the effect of the tax (assuming it’s ever collected) by making it deductible, as noted by my Mercatus Center colleague Brian Blase. I agree with former OMB director Peter Orszag’s observation that the delay may simply be a first instance of a “rolling permanent deferral” of the Cadillac plan tax.
The tax has long been on shaky political ground and the new law considerably reduces the chances of its ever taking effect. It is worth understanding what caused the unraveling of the tax, and what lessons can be drawn from this.
The Cadillac plan tax is (was) a 40% excise tax on the amount by which health insurance plan costs exceeded annual thresholds of $10,200 (individuals) or $27,500 (families), starting in 2018. These thresholds were indexed to grow more slowly than historical health cost growth, so that over time more and more plans would be subject to the tax, producing escalating federal revenues necessary to help fund the ACA’s ambitious health entitlement expansion. A key policy intent of the tax was to offset the damaging effects of the longstanding federal tax preference for employer-sponsored insurance (ESI), one of which is to drive excess health cost inflation.
Lesson #1: Save before you spend.
Lesson #2: Don’t assume a favorable future political alignment.
Lesson #3: Be transparent.
Lesson #4: Partisan victories can be short-lived.
Lesson #5: Don’t campaign against necessary policy steps."
- Five Lessons of the Cadillac Plan Tax Failure, Economics 21, Manhattan Institute, 12/22/2015
Link to the entire article appears below:
http://economics21.org/commentary/cadillac-tax-obamacare-charles-blahous-12-23-15
“Obamacare enrollees will pay more next year, as new data found a roughly 10 percent increase on all types of marketplace plans.
The Robert Wood Johnson Foundation released datasets on average premiums for 2015 and 2016 on Wednesday. The data showed that every tier of Obamacare plans — bronze, silver and gold — raised average premiums by about 10 percent in 2016 from 2015.
Gold plans had the largest increase with 11 percent, while bronze came in with 10 percent and silver with just under 10 percent, the foundation data shows.” - Obamacare enrollees face higher premiums next year, Washington Examiner, 12/16/2015
Link to the entire article appears below:
http://www.washingtonexaminer.com/obamacare-enrollees-face-higher-premiums-next-year/article/2578518
“Americans like to think that our health care system is very different from “socialized medicine” in Canada. In fact, the two health care systems are far more similar than they are different. In Canada, when people go to the doctor the visit is free. In America, it’s almost free.
On the average, every time Americans spend a dollar at a doctor’s office only 10 cents is coming out of our own pockets. The rest is paid by an employer, an insurance company or government. Like the Canadians, we do not primarily pay for health care with money. We pay with time.
According to a Merritt Hawkins survey:
The average wait time to see a primary care doctor in the United States is almost three weeks.
In Boston (where we are told there was universal coverage even before there was Obamacare), the average wait is more than two months.
Compare that with how long you have to wait to get your cellphone repaired.
Waiting in the US is becoming more like waiting in Canada and in some cases it can be worse.” - What Everyone Should Know About Rationing By Waiting, Forbes, 11/09/2015
Link the entire article appears below:
http://www.forbes.com/sites/johngoodman/2015/11/09/what-everyone-should-know-about-rationing-by-waiting/
‘According to enrollment data, more than 500,000 Americans using the exchanges purchased plans from UnitedHealthcare. Those consumers will have to purchase new plans in 2017 should the insurance company leave the exchanges, Ed Haislmaier, a health policy expert at The Heritage Foundation, told The Daily Signal.
“What we’re seeing is that insurers are re-evaluating whether this is a good market to go into,” he said. “Some are expanding; others are having problems, and they pulled back. Over time, what you’ll probably see is fewer insurers offering coverage in the exchanges. We’re already seeing that, even though United expanded in 2015 and 2016, insurers offering coverage is down. It’s going to take a few years to play out.”
Compared to its competitors, UnitedHealthcare was slow to offer products on the exchange when Obamacare first went into effect in October 2013 and sold plans in just four states—Colorado, Maryland, Nevada, and New York—in 2014, according to the state-run exchanges and federal exchange, HealthCare.gov.
However, the insurer expanded its exchange coverage substantially in 2015 and 2016, selling plans in 22 states during the 2015 open enrollment period and 34 states during this year’s open enrollment period.
Competitors Aetna and Humana, by comparison, are offering coverage on the exchanges in 15 states.
Haislmaier said that insurers like UnitedHealthcare may not have prepared for how much plans sold on the exchanges would cost them.
“What you’re seeing is the market itself, and this is attributable to Obamacare, is turning out to be a market that’s predominately low-income individuals between 100 to 200 percent of the poverty line,” Haislmaier said. “They’re buying coverage, getting a substantial subsidy, but gravitating toward the low cost-sharing plans where they get extra subsidies. The enrollees have more of an incentive to use more health care, and that makes those plans more expensive [for the insurer].”
For insurers to profit from the coverage offered on the exchanges, Haislmaier said, they must narrow networks or raise prices, both of which impact consumers.
“The ones who have not narrowed the networks or have been behind the curve on pricing are having losses and reevaluating participation,” he said.’ - How Obamacare Could Limit Insurance Options for Americans in These 34 States, daily signal.com, 11/25/2015
‘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
‘UnitedHealth Group, the largest insurance company in the U.S., on Thursday slashed its earnings outlook, citing new problems related to Obamacare, and told investors it may exit the program's exchanges.
"In recent weeks, growth expectations for individual exchange participation have tempered industrywide, co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated," Stephen J. Hemsley, chief executive officer of UnitedHealth Group, said in a press release.
The release added that, "UnitedHealthcare has pulled back on its marketing efforts for individual exchange products in 2016. The company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017."
In a conference call with investors, Hemsley offered a sober assessment of the exchanges' future viability. He said that claims data have been getting worse as time has gone on, and there's no evidence pointing toward improvement.
Asked about whether the company could sustain losses past 2016, he was blunt: "No. We cannot sustain these losses. We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself."
The year 2017 is significant for insurers, because that's the year when several programs designed to mitigate risk for insurers through federal backstops go away. The hope was that those programs would act as training wheels for Obamacare in its first few years of implementation, but after that, the insurers were supposed to be able to thrive on their own. UnitedHealth's statement suggests otherwise.’ - Nation's largest insurer may exit Obamacare due to losses, Washington Examiner, 11/19/2015
Link to the entire story appears below:
http://www.washingtonexaminer.com/article/2576726
‘The latest objection to the Affordable Care Act before the U.S. Supreme Court won't derail President Barack Obama's federal health care law but could carve out an exception for religious nonprofits, attorneys and legal experts said.
The court said Friday it will hear challenges by the Catholic Dioceses of Pittsburgh and Erie and Geneva College, a Beaver Falls school affiliated with the Reformed Presbyterian Church, along with six other lawsuits from religious organizations around the country objecting to provisions in the federal health care law mandating the church and its affiliate agencies provide coverage for birth control or file a form opting out.
"This has nothing to do with the particulars of the issue, and that's why the court took it," said Bruce Ledewitz, a Duquesne University professor who studies religion and law.
"This isn't about abortion. It isn't about conception. It's not about Obamacare, either."
The court will instead consider whether the government has the right to dictate what religious nonprofits can and can't do, Ledewitz said.
Bishop David Zubik of the Pittsburgh diocese said the issue is one of religious freedom.
"The insurance mandate, which is one small provision of the Affordable Care Act, would require us to facilitate access to contraceptives, sterilization and abortifacients contrary to our teaching," Zubik said in a statement Friday. "We are encouraged that the Supreme Court will hear our case and are hopeful that they will rule to protect not only our religious liberty but that of all Americans."‘ - Supreme Court Agrees To Hear Church Groups’ ACA Challenge, insurancenewsnet.com, 11/07/2015
Link to entire article appears below:
https://insurancenewsnet.com/oarticle/2015/11/07/u-s-supreme-court-agrees-to-hear-western-pennsylvania-catholic-challenges-to-obamacare.html
