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Special Report: An ObamaCare Presidential Appeal

Posted By Administration, Tuesday, September 20, 2016
President Barack Obama

When President Obama began his push to pass the Affordable Care Act, he talked a lot about reducing the cost of insurance to individuals, to employees and to employers. That hasn’t happened.


Now prices are rising, not as many people are signing up as anticipated and many insurers are reconsidering whether they want to participate. That has led President Obama to work furiously to convince them otherwise and to save his administration’s biggest accomplishment.


Since ObamaCare’s passage in March of 2010, rates have continued to rise and — worse — employees are now picking up a higher percentage of their employer’s health insurance tab. The Kaiser Family Foundation said the average annual premium shared by employers and employees jumped 3% this year to $18,142. That’s double what coverage cost in 1999.


Here’s more:


  Premiums for families have gone up 20% over the last five years.

  Earnings have gone up just 11%.

  Inflation is up 6% in the same time frame.

  Workers are paying an average of 18% for individual coverage and 30% for families.

  Deductibles on average run about $1,000 a year.


For the last year statistics like that have made many wonder about the wisdom of keeping the Affordable Care Act. Add to that — as noted earlier — insurers dropping out of the ObamaCare exchanges at an alarming rate or are considering giving up.


Part of that problem is because the reinsurance program set up in the law has expired. It was designed to help insurance companies with financial losses in the program’s first few years. But too many unhealthy people signed up and too few healthy people did the same.


That meant the reinsurance price tag became much higher than expected.


Two years ago Republicans noted the program wasn’t taking in enough money to cover the payouts so they put a provision in a funding program that said the Obama administration could not shift funds from other areas to make up that difference. In the end the shortfall hit $2.5 billion and insurers got just 12.6% of the money owed.


Democrats — including President Obama — are regretting not fighting harder to exclude the provision. But some say it wouldn’t have mattered anyway. There is no way the administration could get enough money from the Medicare and Medicaid account’s $4 billion to offset the losses.


Washington Democrat Rep. Jim McDermott is the ranking member of the House Ways and Means Committee’s health subcommittee. He said, The president could have vetoed it, but it was buried in other things. That’s one of the problems, when you get these bills and they’ve got 20 provisions and 18 are OK. So that’s how they got through it.”


The loss of insurers has President Obama concerned. He’s so worried that he summoned a dozen health insurance industry execs to the White House early last week. They included Humana’s CEO Bruce Broussard and Cigna’s CEO David Cordani. Joining them from his staff was Health and Human Services (HHS) Secretary Sylvia Mathews Burwell and Obama advisor Valerie Jarrett.


The president’s goals were two-fold:


1)      To underscore the importance of continuing a law the president says has brought the rate of uninsured to record low levels.

2)      To find ways to strengthen the marketplace — or exchanges as most of you know them as.


Obama also sent a letter to insurers who will continue to offer plans on HealthCare.gov and on the exchanges run by the states. In the president’s words, the letter was to emphasize the Administration’s commitment to working with them [insurers], discuss recent actions to further strengthen the marketplace, and ask for their help in signing up uninsured Americans.”


In the letter Obama said the progress that has been made has not been made without challenges. Most new enterprises have growing pains and opportunities for improvement. The marketplace, while strong, is no exception. Time and experience will help drive that improvement, as well constructive policy changes,” the president wrote.


Clare Krusing of America’s Health Insurance Plans (AHIP) said the meeting “was focused on how to build on the continued progress in reducing the uninsured rate and moving forward with policy solutions that will support a stable, affordable market for 2017 and beyond.”


Republicans note the high premium hikes for 2017 and how it’s a sign ObamaCare is doomed. They also continue to criticize ObamaCare and call for its repeal. To counter, the administration is desperately working on getting younger, healthier people to enroll.


One idea is the Millennial Outreach and Engagement Summit which will be held later this month. The goal is to get the attention of Millennials and to get them to support the president and his signature achievement. Since the remaining uninsured are disproportionately younger and healthier, signing them up improves the risk pool and consequently the affordability of coverage for all enrollees,” Obama wrote.


BlueCross Blue Shield’s CEO Scott Serota said it’s important for all of us to work toward making sure there are affordable health care options in this country. To achieve this, the rules must encourage people to be continuously insured so they get the ongoing care they need. We continue to work with the administration toward this critical goal,” he said.


Conspicuously absent from the meeting — however — was executives from Aetna and UnitedHealth.


And if Obama’s efforts don’t work? The president has also suggested a government option. That — for those not knowing — is a government insurance company.


The idea has the support of Democratic presidential candidate Hilary Clinton and other key Democrats like Sen. Chuck Schumer of New York, Illinois Sen. Dick Durbin and Washington’s Patty Murray.


Oregon Sen. Jeff Merkley is one of the leaders of the movement. He said, “The Affordable Care Act has already expanded health coverage to millions who were previously uninsured and given countless Americans greater peace of mind. We should build on this success by driving competition and holding insurance companies accountable with a public, Medicare-like option available to every American.”


Is it a good idea? Maybe says the Congressional Budget Office (CBO). In 2013 it looked at the public option and concluded it could “reduce federal budget deficits by $158 billion through 2023.”


Yale University’s insurance expert Jacob Hacker agrees with the CBO. He said, “A public-insurance plan for working-age people that could compete with private insurers and use its bargaining power to push back against drug-makers, medical-device manufacturers, hospital systems and other health-care providers.”


Source links: Insurance Journal, The Hill, Insurance Business America, Employee Benefit AdvisorOregonLive.com

Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  Special Report: An ObamaCare Presidential Appeal  The Affordable Care Act  Weekly Industry News 

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In Depth: Is the Affordable Care Act Unraveling?

Posted By Administration, Wednesday, September 7, 2016

The reinsurance payments from the federal government to health insurers participating in the Affordable Care Act exchanges ends this year. The money was put into the bill to help insurers with financial losses the first few years of ObamaCare.


BlueCross BlueShield wants Congress to extend the reinsurance. Some in Congress — mostly Republicans — say forget it and don’t even want this year’s payments to be distributed. In its statement BlueCross BlueShield — who insures 100 million people — said, Recently, some are proposing to stop the scheduled 2016 reinsurance payments to health plans, claiming these payments are a ‘bailout. This would result in higher premiums and less choice for consumers.”


Like other insurers participating in the ObamaCare experiment, BlueCross BlueShield has seen a huge influx of high risk, not very healthy people signing up. When the Affordable Care Act was put together, Congress factored that possibility into the law and established the reinsurance program and two other programs to help with losses and keep insurers in the program.


Last year there were 500 insurers participating in the reinsurance program. Each paid a fee into the account. Payments are then issued from that fund to the insurers losing the most money. The pool in 2015 hit $1.8 billion and almost every insurer received some of that money.


This is where critics are having trouble with the program. The law says the administration is supposed to give some of that money to the U.S. Treasury. Those payments have not been made. That has led Republicans in Congress to wonder why insurers have been placed in a higher priority than the people.


Critics — like the Americans for Tax Reform and Freedom Partners — call it a cash grab.


Another problem is the underestimation of the administration as to how much would be put into the pool from the three programs. It was supposed to be $10 billion the first year but ended up at just $8.7 billion.


Just 11.1 million people are enrolled now. The Congressional Budget Office (CBO) thought by now there would be 24 million. So with enrollment hitting about half of the original projection insurers are either pulling out all together or they’re pulling out of the less-populated markets.


The Kaiser Family Foundation is very concerned. It predicts only those areas with large risk pools will survive. You only have to look at the PIA Western Alliance state of Arizona to know how bad it is getting. One county in that state will have no insurance plans available at all.


And small cities and sparsely populated counties around the country may soon suffer the same fate. Most — however — are remembering what the president said when ObamaCare went into effect in 2013. He said the law creates what he called a one-stop shop and people could compare costs like they do when looking for airline tickets.


Just visit healthcare.gov, and there you can compare insurance plans, side by side, the same way you’d shop for a plane ticket on Kayak or a TV on Amazon. You enter some basic information, you’ll be presented with a list of quality, affordable plans that are available in your area, with clear descriptions of what each plan covers, and what it will cost.  You’ll find more choices, more competition, and in many cases, lower prices,” Obama said.


That just hasn’t happened.


Oklahoma Deputy Insurance Commissioner Mike Rhoads said in his state — and others — many counties have just one insurer to choose from and, With only a single carrier out there, there is no competition.”


The Oklahoma Insurance Department has been actively recruiting insurers with no success. “They declined, citing the financial losses they suffered before. There's a little bit of giggling in the background when we ask this question, and we understand that they've been there, they've done that, they've taken their lumps,” he said.


Tennessee Insurance Commissioner Julie Mix McPeak agrees with Rhoads and goes a step farther. She thinks the law is on the verge of collapse. Much of her state only has one insurer. And at this point I don’t feel like we have a successful exchange because, like I said, half of our counties have only one option on the exchange today and so having any change in the level of competition may not allow our exchange to survive.”


And by 2017 a lot of states will be struggling with the same issue. A report by Avalere looked at 500 regions in the U.S. and found by 2017:


  36% will have just one carrier

  19% will have just two


Avalere’s Elizabeth Carpenter said, Lower-than-expected enrollment in the exchange market and concerns related to both stability and the risk-mitigation programs have led carriers to reconsider their participation.”


This has led supporters of ObamaCare to insist that a government option or even a single payer system needs to be established. Both ideas have been received negatively by insurers. America’s Health Insurance Plans (AHIP) said, A government-run plan would underpay doctors and hospitals rather than driving real reforms that bring down costs and improve quality. It’s time we focus instead on broad-based reforms that will ensure the affordability and sustainability of our healthcare system.”


The predictions of ObamaCare’s collapse are nonsense according to the Department of Health and Human Services (HHS). Spokeswoman Marjorie Connolly said most shoppers will have multiple choices next year. All of this talk is just speculation and is premature and incomplete.”


Meanwhile the — what some call — failure of ObamaCare and its seeming collapses has put state insurance regulators under incredible pressure. McPeak said to keep insurers the Tennessee Department of Insurance has allowed premium rate hikes for three carriers of 44%, 46% and 62%.


I didn't feel like I had any choice but to approve those rates when it came back to be actuarially justified,” she said.


HHS officials pooh-pooh the notion this is a crisis. It says most consumers won’t feel the pinch because they get ObamaCare subsidies. Even if rates jumped 25% next year, 73% of those on the Medicaid supplements will be able to pick up a plan for under $75 a month.


However, about 15% of the 11.1 million enrolled now will have to bear the brunt of what will likely be very high price hikes.


President Obama also chimed in and said the reports of ObamaCare’s collapse are premature. In a visit to Tennessee last year Obama said, There were a lot [of] stories in the newspaper, just like there are this year, about, oh, premiums are skyrocketing and this is going to be terrible and all that. When all the dust settled and the commissioners who were empowered to review these rates forced insurance companies to justify what they were seeking, what you discovered was, is that the rates actually didn't go up as much as people thought.”


Source links: Three from The Hill — link 1, link 2, link 3, three from Insurance Business America — link 1, link 2, link 3, Employee Benefit Advisor


Tags:  Healthcare  HealthCare.gov  In Depth: Is the Affordable Care Act Unraveling?  Insurance Content  Insurance Industry  Insurance News  ObamaCare  The Affordable Care Act  Weekly Industry News 

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Oregon Vs. Oracle Cover Oregon Suit — Round 1

Posted By Administration, Wednesday, August 31, 2016

In the defense of its big dollar suit by Oregon, Oracle told Judge Mary Merten James the state violated its own public records act. Oracle’s complaint is the state withholding or delaying the release of some Cover Oregon-related emails it sent to Oracle officials and others.


The judge disagrees and denied the motion. Oregon Governor Kate Brown called it a big win for Oregon.


“Oracle contends that the public records law permits it to litigate how a public agency searches for or maintains documents and that somehow the Governor's office's efforts fall short. Oracle is wrong, both on the law and the facts,” Judge James wrote.


Brown’s spokeswoman Kristen Grainger gushed over the victory. “It's a double win: Governor Brown is fully vindicated, and Oracle is foiled yet again in its repeated and desperate attempts to burden and harass the state and waste public resources,” she said.


Oregon contends Oracle defrauded the state when it billed it $240 million for the software to run Cover Oregon. It never worked. The suit also contends Oracle filed false claims and engaged in racketeering and the state wants damages of $6 billion.


The trial for the suit starts in January of next year.


Source link: OregonLive.com


Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  Oregon Vs. Oracle Cover Oregon Suit — Round 1  The Affordable Care Act  Weekly Industry News 

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Aetna’s Decision Leads to ObamaCare’s Biggest Crisis

Posted By Administration, Wednesday, August 24, 2016

As we have been reporting, Aetna is making major cuts in the individual coverage it is offering on the Affordable Care Act’s exchanges. Some of us know them as marketplaces. The company is leaving 11 of the 15 states it now serves. As a result, 80% of Aetna’s customers will be impacted.


Experts say the exit could be the future for ObamaCare. Humana cut its participation in exchanges from 15 states to 11. United Health did a much publicized exit last year. Anthem is predicting losses of somewhere around 5% this year. Cigna also admits to losing money. It is — however — the only insurer that is now planning on expanding. Cigna will move into three new states in 2017.


Everyone from politicians to the general public are asking why? They are also asking who is next?


The why is much easier. Insurers are losing money on the Affordable Care Act participation and reinsurance offered by the federal government hasn’t offset losses and when it goes away at the end of this year, the losses will grow even greater. And as insurers exit, health insurance rates are expected to rise for those participating in the exchanges.


Insurer losses are easily traced to the huge number of people signing up that have serious health issues. Not enough healthy people are registering to offset those losses.


That leads to a very important question. Will the Affordable Care Act — President Obama’s signature legislation — survive? Maybe. Maybe not. To survive healthier people — says former White House health policy advisor Zeke Emanuel — must sign up and participate. You have here a situation which all of us who care about the exchanges have to worry about. There is a problem with the risk pool. There is a problem with the numbers of people signing up,” he said.


But do the exchanges really need the big insurers? Robert Wood Johnson Foundation senior advisor Katherine Hempstead says no. In fact, she suggests they haven’t been that important all along.


I think the market could survive without these guys. Obviously, it would be better to see lots of people seeing a lot of opportunity in this space. But I don’t think it’s a chapter in a Greek tragedy,” she said.


The Aetna news also sparked — no surprise — a political explosion from both sides of the aisle and from the two presidential candidates. Donald Trump said the Aetna move is further evidence that the Affordable Care Act is broken and slowly imploding under its regulatory red tape.”


Trump continues to promise repeal and to do away with the individual mandate, cut Medicaid expansion and to create a system where health insurers can sell across state lines. We will have alternatives that will be so good, so much less expensive, so much better that you will actually be able to keep your doctor and have your plan. That was the biggest [ObamaCare] lie of all of them. Premiums are going up 45% to 55% and we are just going to do something and it’s going to be great. We’re going to end up having great, great healthcare,” Trump said.


Hilary Clinton said the departure of Aetna means we need to “defend and improve” ObamaCare. She proposes cutting out-of-pocket costs to consumers and adding a public insurance option.


On the public insurance option, Clinton said a government health insurance company is a way of giving Americans, in every state, a choice of a public option health insurance plan that will help everybody afford coverage. It will strengthen competition and drive down costs.”


Source links: MSN Money, The Hill, two from Insurance Business America — link 1 and link 2


Tags:  Aetna’s Decision Leads to ObamaCare’s Biggest Cris  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  The Affordable Care Act  Weekly Industry News 

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Special Report: Inheriting the ObamaCare Mess

Posted By Administration, Tuesday, August 16, 2016

The next president — and the next Congress, as well — is going to have to deal with the disaster known to the nation as ObamaCare. To be more technical and more accurate, it’s the Affordable Care Act and the fourth sign-up period starts just a week before the November election.


Enrollment numbers — as well see in a bit — are critical to the Affordable Care Act’s continuation. So is the number of insurers participating in the federal and state insurance exchanges or marketplaces as they are now known. Losses on insureds have some insurers thinking of dropping out.


That means either a president Trump or a president Clinton — when they take office — will need to make some critical decisions and quickly. What are their plans for ObamaCare? Corporate Synergies — an employee benefits consultancy — looked at what both candidates have said and did an analysis.


Surprisingly, they agree on more than they disagree. One area of disagreement is the Affordable Care Act itself. Clinton wants to build on ObamaCare successes. Her idea is to tweak it in some places and increase access to pharmaceutical benefits.


Trump wants ObamaCare repealed but he’ll keep some parts like the pre-existing condition regulations.


The two candidates agree on repeal of the Cadillac Tax. If you don’t remember, the Cadillac Tax puts an excise tax of 40% on every dollar spent for health insurance over $10,200 for an individual or $27,500 for a family. It is set to happen in 2020.


On the high cost of coverage, Trump wants to increase consumer choices for health insurance. To help consumers pay for insurance he’d do tax relief for individuals rather than fund it through Medicaid.


Trump also wants to modify laws to allow people to buy insurance across state lines. Clinton hasn’t commented on the topic.


Both Trump and Clinton don’t like what Corporate Synergies terms “health insurance monopolies.” Clinton — in particular — has a plan to dramatically cut out of pocket health insurance costs. Trump and Clinton are against the Humana and Aetna and Anthem and Cigna mergers.


They agree it leads to fewer options for consumers.


And when it comes to insurers, both want more transparency and Clinton says she’s going to do some work on surprise medical bills and will do away with them.


Trump and Clinton also agree on the cost of medication. It needs to drop and fast. The two agree Medicare ought to set drug prices to cut the cost of health care.


On the topic of consumer driven health care, Trump wants tax free HSAs and more access to CDHPs. Clinton has made no comments on the subject.


Here’s where they separate. As noted earlier, Trump wants to do away with the Affordable Care Act and Clinton says it just needs some fixes. Surprisingly, Trump says he’s open to a single-payer system and free health care for all.


And what do they need to fix? The number of people registering this year is critical to the act’s survival. And within that number more people need to be healthy. To date a huge percentage of those registering are not. Because of that insurers lost lots of money in 2015 and in the three previous years. Young, healthy people are needed in the marketplaces — or exchanges — to offset costs and losses. If more healthy people don’t register the cost of insurance will continue to go up and up.


The Kaiser Foundation’s senior vice president Larry Levitt said, The next open enrollment period is key.” How key you ask? The average price hike is going to be an unacceptable average of 9%.


At least that’s the analysis from data collected in 17 cities. Some will see even greater increases.


As a P.S. to that figure, most larger corporations say the health insurance costs to employees is only going up an average of 6%. While that’s unacceptably high, it’s much lower than what people forced to use the exchanges are going to see.


Last year 11 million people participated in the exchanges. That shocked the Obama White House because the Congressional Budget Office predicted a figure 21 million — or nearly double the actual amount.


That leads us back to the need for healthy people signing up. Without them insurers can’t make their participation work. In fact many like UnitedHealth are saying — to quote boxer Roberto Duran — “No mas.”


Adding to the problem is the failure of the administration’s market stabilization program. Cash strapped — probably because of the high number of unhealthy people signing up and the low number of healthy people participating — the program hasn’t been able to subsidize insurers as much as expected.


The original idea was to have insurers in the red at the end of two years. It didn’t happen and — again — without the government help via the market stabilization program insurers had access to just $1 for every $10 in claims.


That’s the bad news. The good news for insurers is the federal government’s reinsurance program helped control costs for insurers. The Commonwealth Fund — a nonprofit group — says insurer claims were just 2% higher than projected after the reinsurance payments.


And that leads some to think the exchanges — or marketplaces as they’re officially called — are on the brink of success.


On the brink or not, insurers — even at just a 2% loss — are close to having enough of ObamaCare. Aetna and Anthem both said they are scrapping plans to expand into exchanges they have not been involved with and all five insurers say they’re losing money.


And the government reinsurance program will soon be ending.


UnitedHealth consultant Michael Abrams of Numerof & Associations said, From a policy point of view, we’re basically seeing the exchanges unravel. More than anything else, it’s a serious symbolic blow to ObamaCare,” he said.


Source links: The Hill, Employee Benefit Advisor


Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  Special Report: Inheriting the ObamaCare Mess  The Affordable Care Act  Weekly Industry News 

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More Troubles for ObamaCare & Health Insurer Mergers

Posted By Administration, Tuesday, August 9, 2016


Aetna was going to move to the health insurance exchanges of five new states in 2017. Those plans — as of last week — are on hold. And it is going to reassess those states where it is currently participating and serving 838,000 consumers.


All this happened in the light of the U.S. Justice Department nixing Aetna’s planned purchase of Humana. Aetna CEO Mark Bertolini put the decision in perspective and said, “in light of updated 2016 projections for our individual products and the significant structural challenges facing the public exchanges, we intend to withdraw all of our 2017 public exchange expansion plans, and are undertaking a complete evaluation of future participation in our current 15-state footprint.”


He told CNN Money that the company is thinking it’s going to lose $300 million — pre-tax — in 2016.


A final decision will be made at the end of September when the firm will be required to let the federal government and the states know what it’s going to do.


The other insurers backing down considerably from involvement are UnitedHealth Care who is leaving almost all of the 1,200 counties in eight states and Blue Cross Blue Shield who still hasn’t made final decisions but will be departing or scaling back in some markets.


In the meantime, Judge John Bates of the U.S. District Court for the District of Columbia threw a wrench in the Aetna-Humana and Anthem-Cigna mergers. The Justice Department — as noted earlier — has put the kibosh on both but both firms have the right to oppose the department’s lawsuit.


Aetna and Humana are demanding swift trials — like by the end of the year — so they can get on with the business of insurance. The judge says he can’t do both. I can’t do both. Unless the schedule is put off, I’m sending one of the cases back.”


What he wouldn’t say is which one.


Anthem’s attorney Christoper Curran said if Anthem’s deal is sent back it’ll doom the sale. Cigna won’t wait.


Source links: Two from Insurance Business America — link 1 and link 2


Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  More Troubles for ObamaCare & Health Insurer Merge  ObamaCare  The Affordable Care Act  Weekly Industry News 

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Update: Cover Oregon

Posted By Administration, Tuesday, August 2, 2016

Cover Oregon — the failed Oregon ObamaCare exchange — wasted over $300 million. The exchange didn’t register one single person and eventually was scrapped. Oregon has since sued the Oracle Corporation for bungling the project. Oracle — of course — denies it is responsible and blames several state agencies and governing bodies vying for control.


To date — says the Oregon Legislative Fiscal Office — Oregon has spent almost $16 million in the legal battle. And it’s not close to finished. Trial doesn’t begin until January and the price tag by that time is estimated to be $27 million.


The case has been shrouded in secrecy. Oracle has asked the court — and received permission — to keep thousands of pages of evidence out of public view. Marion County Circuit Court Judge Courtland Geyer has agreed. The Oregonian/OregonLive has pushed the judge on the secrecy and said the public has a right to know.


Courtland recently agreed so future hearings could be more public than those in the past.


Oregon Attorney General Ellen Rosenblum thinks the spending is worth it since the state could end up recouping most of that money. She’s resisting to calls for her and Governor Kate Brown to settle out of court and move on.


“This case is about making sure Oregonians are paid back fairly for the miserable job performance of a corporate contractor that we hired. We paid $240 million to Oracle to produce a health exchange that never worked,” Rosenblum said.


By the way, Oracle has filed counter suits — five of them to be exact. Its attorney Ken Glueck said Oregon is stalling and not providing Oracle with information it needs to fight the original suit. “The case is a complete fabrication. The Attorney General has committed fraud on the court and we intend to ask for sanctions,” he said.


The Oregonian thinks there may have been a $25 million settlement that was close to being agreed upon. Oracle was ready to give most of that money to the state in software and the agreement was between the firm Governor Kate Brown’s chief of staff. For some reason it was taken off the table.


Meanwhile, Republican House leader Rep. Mike McLane is shocked at the cost and thinks the state is throwing money away. He agrees with Oracle. The problem is the state’s and not Oracle’s. “I had feared it [the cost] would be extremely high, but my God, I'm shocked by that number,” McLane said.


Source link: OregonLive.com


Tags:  Cover Oregon  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  The Affordable Care Act  Update: Cover Oregon  Weekly Industry News 

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ObamaCare & Insurers: Most Losing Money

Posted By Administration, Tuesday, July 26, 2016

The Commonwealth Fund looked at the first year of the implementation of the Affordable Care Act. It found just a third of the 144 insurers participating in the state or federal government exchanges broke even or better.


Ironically, they made twice the income from premiums but the payouts cut profits.


Here are some details from the study:


  Most underestimated total medical costs by at least 5.7%

  25% underestimated by a whopping 35%

  Losses were recouped in many cases from ObamaCare’s reinsurance program

  With the reinsurance insurers found payouts were just 2% higher than expected


However, the bad news is the reinsurance program ends in 2017. And the researchers recommend — if the Affordable Care Act is to survive — that the reinsurance program needs to be extended until the ObamaCare marketplace has “matured.”


The latest to exit at least part of ObamaCare is Humana. It only operates in a few states but lost close to $1 billion last year. Humana will leave 11 of its 19 marketplaces. With the decision Humana joins UnitedHealth and a couple of others.


Health and Human Services Secretary Sylvia Mathews Burwell said the administration is getting the message. It’s one of the reasons the administration opposes the merger of Humana and Aetna and Anthem and Cigna. Competition makes rates fall and actually — she says — helps insurers. And since insurers are leaving the market, she — and President Obama — are pushing for the creation of a public option.


When there is competition, that creates downward price pressure, and it also creates upward quality pressure. We’ve always thought and talked about why competition is an important part of the overall picture, and that’s not just in the marketplace but overall for the nation in terms of our health care,” she said.


And what is a public option? It’s a health insurance program where people “buy” health insurance from the government. The premise is that it is not a subsidy and it supports itself. However, some “seed” money will be needed to get the program going.


It was part of the original proposal for ObamaCare but was dropped when Sen. Joe Lieberman — an independent — threatened a filibuster.


Source links: The Hill, Insurance Networking News, Insurance Journal


Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  ObamaCare & Insurers: Most Losing Money  The Affordable Care Act  Weekly Industry News 

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Obama’s Business Tax Under Fire

Posted By Administration, Wednesday, July 20, 2016

The Obama administration wants to keep U.S. companies in the U.S. To keep them from moving their headquarters overseas to avoid U.S. taxes, the administration wants Congress to tighten the tax inversion rules.


And if Congress doesn’t? The administration will do it anyway.


Currently it’s legal for a U.S. company to merge with one in another country — usually one that is smaller — and move the headquarters to that country. But the move is usually on paper only. Internal borrowing reduces the U.S. tax rate. The borrowed money usually by the U.S. company from the now foreign entity is not taxable. So the inversion lets the company move money out of the country and then back to U.S. investors.


This is a tax avoidance.


President Obama calls it one of the most insidious tax loopholes. He wants Congress to do away with the current inversion laws and lower the corporate tax rate to keep companies here. Only Congress can close [the door to inversions] for good and only Congress can make sure that all the other loopholes that are being taken advantage of are closed,” the president said.


Here’s how the new proposed rules will work — that is if Congress or the administration make the changes. First the government targets what it calls serial inverters. These are large companies built through multiple inversions or from the takeover of U.S. companies. Under the plan the federal government would disregard — or not accept — U.S. assets acquired over the last three years.


Earnings stripping are the second part of the plan. This is what helps these companies lower their tax burden. It will be done away with.


Businesses and trade groups — like those representing banks, retailers and manufacturers — say the plan will not help but will disrupt operations and do nothing but put more red tape on businesses already struggling with that same tape.


An unmentioned bank trade group put the objection in perspective. “A financial services group would face the choice between, on the one hand, staggering administrative complexities and a tax burden disproportionate to its true economic profit, and on the other hand, the imposition of crippling constraints on its ordinary business activities,” its statement said.


As noted earlier, the U.S. Treasury intends on moving quickly to finalize the proposed regulations if Congress does not.


Republicans have balked at the inversion change and the corporate tax rate proposal and say any tax change discussion must also include individual tax rates. And Louisiana Republican Rep. Charles Boustany explained why the Republicans don’t want to change the inversion law.


Even after Secretary Lew’s admission that Treasury has no authority to stop inversions on its own, this administration has reverted to its default stance: attempting to make law by executive action. This proposal will do little to stop actual inversions, but will make it more difficult for foreign firms to invest in the United States. This is the wrong approach to a serious problem,” he said.


House Ways and Means Committee Chairman and Texas Republican Kevin Brady called the proposal punitive and said it’ll hurt U.S. companies and discourage investment.


The president disagrees and says when these corporations leave it puts a heavier tax burden on the average American because their taxes help fund the government. They effectively renounce their citizenship. They declare that they’re based somewhere else. It sticks the rest of us with the tab, and it makes hardworking Americans feel like the deck is stacked against them,” he said.


Politics are now a big part of the inversion debate. Presidential candidates Hilary Clinton and Donald Trump have made proposals. Clinton wants an exit tax on those companies going the inversion route. Trump is proposing dropping the corporate tax rate to 15% from 35%.


Source links: The Wall Street Journal, MSN Money


Tags:  Around the PIA Western Alliance States  Business tax  Healthcare  HealthCare.gov  Insurance Content  Insurance News  Obama’s Business Tax Under Fire  ObamaCare  The Affordable Care Act  Weekly Industry News 

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Obama Wants Public Option for ObamaCare

Posted By Administration, Wednesday, July 20, 2016

In 2015 we — the nation — spent $3.2 trillion on our health. That’s a jump of 5.5% and a point and a half more than the record low of the 4% in 2013. So the question comes up is the increase because of the Affordable Care Act and is it really working.


That’s a debate that will likely rage on way past President Obama’s presidency.


The president wants Congress to authorize more help the middle class families. He’s asking legislatorsto help middle-class families who have coverage but still struggle with premiums.”


As what will likely be his last contribution to his signature legislation, the president said he wants to add a public option to the Affordable Care Act. In the Journal of the American Medical Association, Obama wrote, Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers. The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited.”


Hilary Clinton likes the idea as does most of the Democratic Party. Most but not all. North Dakota Sen. Heidi Heitkamp is a Democrat in a conservative state. She gave the most eloquent response by conservative Democrats to the public option.


I think it's critically important that we stop trying to complicate healthcare and we start taking a look at what needs to be fixed in ObamaCare. Until we actually have those conversations and we have bipartisan support, I think it's unrealistic to assume that we're going to see any kind of expansion of care,” she said.


And in reality, it has almost no chance of passing in a Republican Congress. So the administration — and the president — will be paving the road for the concept to become a reality in the future.


Obama also wrote, Simpler approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs. government vouchers for all. Yet the nation typically reaches its greatest heights when we find common ground between the public and private good and adjust along the way.”


Source link: Two stories from The Hill — link 1 and link 2


Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  Obama Wants Public Option for ObamaCare  ObamaCare  The Affordable Care Act  Weekly Industry News 

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