• Tag Archives ACA

  • Rate hikes expose shaky foundation of Obamacare

    Posted on by Azrael 1 Comment

    Though supporters of President Obama’s healthcare program tout its success in providing insurance to millions of Americans, recent rate filings from large insurers have revealed that the law is built on a shaky foundation.

    In recent weeks, large insurers selling coverage through Obamacare have proposed massive rate increases for 2016 – even exceeding 40 percent – because they haven’t been able to sign up enough young and healthy customers.

    This is an ominous sign for the future of Obamacare, because two federal programs that were supposed to act as training wheels for insurers in the early years of Obamacare by absorbing excess risk are set to expire after 2016. If insurers don’t do a better job of attracting a healthier risk pool, 2017 promises to be a rocky year for insurance markets, regardless of which party is in control of the White House.

    In the first two years of the implementation of Obamacare’s insurance exchanges (2014 and 2015), insurers set rates with the expectation that the government would absorb a certain degree of risk and they made assumptions about the medical costs of their enrollees.

    Now that insurers have had more time to look at the claims coming in from those enrolling from Obamacare, they’re finding that the pool of customers is older and sicker than originally projected, driving up medical costs. Meanwhile, federal help isn’t what they anticipated.

    CareFirst BlueCross BlueShield, the largest health insurer in Maryland, proposed an average increase of 30.4 percent for 2016 (with a range of 19.3 percent to 45.7 percent).

    A similar story is playing out among insurers who have filed rate proposals throughout the country. BlueCross BlueShield of Tennessee asked for an average increase of 36.3 percent. In South Dakota, Wellmark proposed a 42.9 percent average increase.

    In Oregon, Moda Health, which serves roughly half of the state’s individual market, is aiming to raise rates by an average of 25.6 percent. As Jed Graham of Investor’s Business Daily noted, Moda’s costs for 2014 – the first year of Obamacare’s exchanges — exceeded its premiums by 61.5 percent.

    …

    Source: Rate hikes expose shaky foundation of Obamacare


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  • Hawaii’s $205 Million Obamacare Exchange Implodes

    Posted on by Azrael Comment

    Despite over $205 million in federal taxpayer funding, Hawaii’s Obamacare exchange website will soon shut down. Since its implementation, the exchange has somehow failed to become financially viable because of lower than expected Obamacare enrollment figures. With the state legislature rejecting a $28 million bailout, the website will now be unable to operate past this year.

    According to the Honolulu Star-Advertiser the Hawaii Health Connector will stop taking new enrollees on Friday and plans to begin migrating to the federally run Healthcare.gov. Outreach services will end by May 31, all technology will be transferred to the state by September 30, and its workforce will be eliminated by February 28.

    While the exchange has struggled since its creation, it is not for lack of funding. Since 2011 Hawaii has received a total of $205,342,270 in federal grant money from the Department of Health and Human Services (HHS). In total, HHS provided nearly $4.5 billion to Hawaii and other state exchanges, with little federal oversight and virtually no strings attached.

    Despite this generous funding, the exchange has underperformed from day one. In its first year, Hawaii enrolled only 8,592 individuals – meaning it spent almost $23,899 on its website for each individual enrolled. Currently over 37,000 individuals are enrolled in Hawaii’s exchange – well below the estimated 70,000 enrollees that is required to make the website financially viable. Unfortunately, taxpayers will have to hand out an additional $30 million so that Hawaii can migrate to the federal system.

    Source: Hawaii’s $205 Million Obamacare Exchange Implodes


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  • Because Of Obamacare, 123-Year-Old Major Health Insurance Provider Set To Close Its Doors

    Posted on by Azrael 1 Comment

    After expanding to accommodate the requirements of the Affordable Care Act (Obamacare) last year, a Wisconsin-based health insurance provider, founded in 1892, announced it will be closing its doors.

    Assurant Health opted not to participate in the first Obamacare enrollment period in 2013; however, in November of that year, the company announced it would be selling plans in 16 states in 2014.

    The company and industry watchers blamed its losses directly on the impact of Obamacare. Following implementation of the requirements to participate in the ACA exchanges, Assurant lost $63.7 million in 2014. The insurer raised its rates by 20 percent in 2015, in hopes of returning to profitability, but lost between $80 to $90 million during the first quarter of this year.

    Assurant currently provides plans for approximately 1 million people, with a revenue of about $2 billion.

    “In a letter to its shareholders, [the company] said it lost money because of a reduction in recoveries under Obamacare’s risk mitigation programs and increased claims on the health care law’s 2015 policies,” the Daily Signal reports.

    “It’s significant,” Andrew Edelsberg, a vice president of the rating agency A.M. Best, told The Daily Signal of how Obamacare affected Assurant Health. “It’s impacted the industry.”

    Ed Haislmaier, health policy expert at The Heritage Foundation, says that government intervention in the healthcare market is having the predictable effect of pushing private companies out of business.

    Source: Because Of Obamacare, 123-Year-Old Major Health Insurance Provider Set To Close Its Doors


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