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The latest news on Obamacare from Business Insider

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    doctor patient

    Federal government spending on health care skyrocketed last year, substantially outpacing the rate of growth of the nation’s overall health care costs.

    The trend is largely due to the expansion of Obamacare and Medicaid coverage along with a shocking increase in the cost of biologic specialty drugs like Sovaldi for the treatment of the potentially deadly hepatitis C virus.

    While total U.S. spending on health care increased 5.3 percent last year – topping $3 trillion overall – health care funded by the federal government rose by 11.7 percent, to nearly $844 billion in 2014, compared to a 3.5 percent increase in 2013, according to an annual report on health care costs released Wednesday by the Department of Health and Human Services’ Centers on Medicare and Medicaid Services.

    Among the report’s findings:

    • Medicare spending hit a total of $618.7 billion in 2014 and accounted for 20 percent of total health expenditures. Medicare spending grew by 5.5 percent last year compared to 3 percent the year before. That was the fastest growth rate since 2009 and a testament to the impact of rising prescription drug prices, among other factors. Moreover, Medicare spending averaged $11,700 per beneficiary last year, a 2.4 percent increase over the previous year.
    • Medicaid spending for the poor and disabled increased 18.4 percent in 2014, to $305 billion, compared with an increase of 6.1 percent in 2013. Overall Medicaid spending by federal, state and local authorities totaled $495.8 billion last year, or 11 percent over the previous year.
    • The federal government, which currently picks up the full tab for the cost of Medicaid expansion in nearly two thirds of the states and subsidizes private insurance coverage for many others under the Affordable Care Act, accounted for more than half of the increase in all national health spending last year.

    obama obamacare doctors

    • Although the study doesn’t specify the amount the government spent last year on subsidies for private premiums and out of pocket expenses, the Affordable Care Act marketplace subsidies together with Medicare, Medicaid and the Children’s Health Insurance Program account for 24 percent of the federal budget in 2014, or roughly $836 billion, according to the Center on Budget and Policy Priorities.
    • By comparison, state and local government spending on health care actually slowed last year, with a 1.8 percent growth rate compared with a 3.7 percent increase in 2013. That was largely due to a decrease in Medicaid enrollment and spending in states that didn’t take part in the Medicaid expansion program under Obamacare. 

    The spike in spending on both private and publicly financed health care comes after five years of remarkably slow growth and provides fresh ammunition for the raging debate over the efficacy of President Obama’s signature health insurance plan for gradually bringing down the cost of health care.

    The spike in health care spending topped the growth in the economy, reaching 17.5 percent of GDP.

    Republicans in Congress are pressing again this week to pass legislation to repeal the Obamacare legislation. And the administration has been stung by recent reports of declining enrollments and rising costs for insurance premiums and out of pocket costs.

    Obama administration officials said yesterday that the new report on rising health care costs in no way shakes their confidence in the program and that the rise in costs may be a short-term phenomenon.

    Andrew M. Slavitt, the acting administrator of CMS, told The New York Times that last year’s rate of growth in health costs “remains below the level in most years prior to the coverage expansion, while out-of-pocket costs grew at the fifth-lowest level on record.”

    Antiretroviral ARV Pills Medicine

    Still, the new report undercuts the administration’s long-term goal of “bending the cost curve” of the nation’s health care system. It also highlights government health care programs’ massive and growing drain on the federal budget as Obama and congressional Democrats have created or expanded a broad range of programs for seniors, lower income people and children.

    Bill Hoagland, a budget and health care expert and vice president of the Bipartisan Policy Center, said on Thursday that after nearly a half decade of relative stability, the rise in costs “suggests that we have not overcome the pressures in the health care system for increasing costs.” 

    Moreover, he said, despite extenuating circumstances such as soaring drug prices, the jury may be out for years in gauging the long-term fiscal impact of increased government involvement in the health care system, such as the Affordable Care Act.

    “That’s the driver here,” he said. “We thought that increasing insurance coverage would lower the overall cost. That’s not in the cards for the foreseeable future. So we have not licked the health care cost dilemma. We still have a lot of work ahead of us.”

    SEE ALSO: Calls for the demise of Obamacare 'may be premature'

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    Paul Ryan

    Congress must approve more than $1.1 trillion of funding by Friday to keep the government operating for the remainder of fiscal 2016. But congressional leaders are far from reaching an agreement, raising the possibility of yet another budget crisis by the end of the week.

    Republican and Democratic leaders in Congress spent last weekend desperately seeking a compromise on spending, taxes and key policy measures that would enable lawmakers to adjourn for the remainder of the holiday season and then turn their attention to the 2016 campaign and a new House GOP agenda in January. But they came up empty handed.

    While there appears to be little appetite even among the most rabid of conservative Republicans for a repeat of the 2013 partial government shutdown, the early signs this week is that a final deal is highly elusive and that Congress may have no choice but to kick the can down the road by adopting another short-term extensions of spending authority -- a “continuing resolution” -- to keep the government afloat.

    New House Speaker Paul D. Ryan (R-WI) made it clear in a speech last week that he has no patience with another government spending crisis and that his “number one goal for next year is to put together a complete alternative to the left’s agenda,” including a comprehensive GOP replacement for the Affordable Care Act. But in an interview on Monday with a radio station in his home town of Janesville, Ryan voiced doubt that Congress could complete its work by the end of this week, according to Politico.

    Noting that there was still much to do in resolving differences over funding the government and renewing hundreds of billions of dollars’ worth of expiring tax breaks and credits, the speaker said that “it might take us more than just this week to get these issues put together correctly.” Ryan also said that he doesn't have an "exact timeline" for releasing an Obamacare replacement next year.

    Former House Speaker John Boehner (R-OH) did Ryan a huge favor in late October by negotiating a fiscal 2016 budget agreement with the Obama administration and congressional Democrats setting the parameters for overall government spending through next Sept. 30 without Ryan having to leave his fingerprints on highly controversial legislation. 

    John Boehner

    The agreement added $50 billion to fiscal 2016 spending, equally divided between defense and domestic programs, along with $16 billion of emergency spending on the war and State Department programs. The agreement pleased many GOP defense hawks and champions of Obama’s domestic programs, but it angered many GOP conservatives who complained that it cost too much and would add to the deficit.

    Boehner left it to Ryan, Senate Majority Leader Mitch McConnell (R-KY) and House and Senate appropriators to pass legislation to divvy up the new spending in one massive appropriations bill. But the year-long spending bill has become bogged down and jeopardized by a series of disputes over policy riders or amendments ranging from the treatment of Syrian refugees and Obama environmental policy to oil exports.

    Ryan has had it easy so far, helping to shepherd through a major highway bill and reauthorization of the No Child Left Behind legislation. But now he may be getting a taste of what Boehner experienced numerous times over the years in trying to amass a majority of Republican votes on controversial spending legislation.

    The rocky weekend negotiating sessions followed House Democratic Leader Nancy Pelosi’s outright rejection of a House GOP spending plan unveiled on Friday that contained dozens of policy riders -- or “poison pills,” as some Democrats have called them. House Appropriations Committee Chair Hal Rogers (R-KY) told reporters late last week that he hoped to have a final package ready for House action by early this week, although that now seems well out of reach.

    Among the Republicans’ latest list of demands, according to The Washington Post, are the following:

    • Substantially increasing government screening of refugees from Syria and Iraq amid heightened concern that terrorists might slip into the United States masquerading as refugees. In the wake of the ISIS terrorist attacks on Paris, governors in 30 states called for a temporary pause in the resettlement of Syrian refugees until security concerns can be addressed. Republicans are also seeking to undermine President Obama’s controversial executive orders protecting millions of illegal immigrants from deportation.
    • Granting the states authority to deny some federal funds to abortion providers in the wake of the controversy over Planned Parenthood’s past practice of charging fees in providing aborted fetal tissue to research groups. House GOP leaders dropped efforts to defund Planned Parenthood after a lone gunman killed three people at a Planned Parenthood clinic in Colorado in late November, but GOP lawmakers haven’t given up on finding a way to reduce funding.
    • Scaling back the Obama administration’s initiatives to reduce pollution and greenhouse gas emissions, including the president’s Clean Power Program to set carbon dioxide emissions standards for coal-fired power plants, and the Environmental Protection Agency’s  update of the Clean Water Rule, also known as the “Waters of the United States” rule, which extends federal protection to new U.S. waterways
    • Dismantling portions of the 2010 Dodd-Frank financial industry regulations which was passed following the 2008 fiscal crisis. The financial reforms are a key part of Obama’s domestic policy legacy. The GOP is expected focus on aspects of the law that some moderate Democrats might go along with, such as easing rules for community banks.
    • Adopting additional changes in the campaign finance law, including a proposal by McConnell to raise strict limits on how much money national party committees can spending to coordinate with individual candidates.

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    Obama doctors Obamacare

    The third open enrollment period for the Affordable Care Act, best known as Obamacare, has been ongoing for roughly five weeks now. And as seems to be the trend around this time of year, more questions than answers appear to be swirling around healthcare's law of the land.

    Big changes lead to an uncertain future
    Obamacare is facing a number of changes in the 2016 calendar year, and, frankly, no one is certain yet how those changes might affect enrollment or patient mix for insurers.

    For example, insurance premiums are rising at about their fastest rate in about a decade. The Great Recession held premium rate inflation in check for years, but the failure of more than half of Obamacare's health cooperatives, coupled with many low-cost insurers coming to the realization that their rates were unsustainably low, are leading to big premium hikes in the upcoming year.

    Data from the Washington Examiner showed that 231 insurers requested double-digit percentage premium price hikes in 2016 compared to just 121 in 2015. Furthermore, the magnitude of these hikes -- 61 plans are looking for a minimum premium increase of 30% this year -- is much higher than 2015. In short, there's concern that higher premiums could reduce the affordability of the program for those who don't qualify for a subsidy, leading to a higher uninsured rate.

    Meanwhile, the employer mandate will be fully implemented on Jan. 1, 2016. The employer mandate will require that businesses with 50 or more full-time-equivalent employees (FTE's) offer eligible health coverage to those FTE's and their dependents under the age of 26, as well as provide financial assistance in instances where low-income FTE's would be paying more than 9.5% of their modified adjusted gross income out of pocket toward their premium. If qualifying businesses fail to follow the rules, they could be looking at a $2,000 to $3,000 fine per employee.

    The big question here is how businesses will respond. Will bigger companies step up and supply health insurance for their workers or will we see layoffs, hour cutbacks, or a move to private health exchanges?

    Obamacare's big changes in 2016 are leading to a seemingly uncertain enrollment outlook in the near term.

    A doctor puts his hand over his chest during a

    Obamacare's incredibly important goal that you probably overlooked
    The easiest way to measure the success of Obamacare has always been by its overall enrollment totals. Obamacare was first and foremost designed to reduce the number of uninsured and to utilize the individual mandate and employer mandate to make that happen. The Centers for Disease Control and Prevention reported in Q1 2015 that just 9.2% of U.S. adults remained uninsured, including Medicare patients, which is the lowest figure on record. By this token, Obamacare would appear to be hitting its primary goal.

    But there's an even more important long-term goal that's often lost on critics when discussing Obamacare's success or failure -- namely, the impact that preventative (and earlier) medical access could have on reducing long-term medical costs.

    For insurers, Obamacare is a bit of a give and take. Insurers are enrolling more people than ever, and they're also being required to accept members with pre-existing conditions. The result is that some insurers, such as the nation's largest, UnitedHealth Group, are dealing with adverse selection and losing money on their individual marketplace plans because they've enrolled a large number of sicker individuals. Even though some of its large peers such as Anthem are healthfully profitable, the margins most insurers are generating on Obamacare plans (if they're even profitable in the first place) are relatively small.

    Now here's the catch: In exchange for spending more money on their members up front, it's possible that chronic and serious diseases that are the primary expense culprit for insurance companies can be caught before they become a serious issue. Thus, while health benefit providers may be spending more now than they would like to, their long-term outlook is also looking brighter presuming the current generation of members is now going to be healthier than the last generation given expanded access to medical care.

    This could be the outcome we've been waiting for
    This last point sounds great on paper, but it's difficult to prove that Obamacare is really making a dent in lowering long-term healthcare costs, especially since it's only been the law of the land for about two years. All that consumers and critics can focus on at the moment are the rapidly rising premium prices.

    However, a new study from the American Cancer society that was published online in the Journal of the American Medical Association late last month appears to show that there is a correlation between Obamacare's expansion and a higher rate of cervical cancer diagnoses in select patients.

    obamacare

    Researchers from the Department of Epidemiology at Emory University and from the ACS' Department of Intramural Research analyzed a large database of cancer cases within the United States, separating cervical cancer diagnoses for women ages 21 to 25 in one group from cervical cancer diagnoses in women ages 26 to 34 in the other cohort. The reasoning behind this split? Persons under the age of 26 are still eligible to be covered under their parents' health plan under Obamacare, and thus the expansion of this dependent clause should give researchers a reasonable correlation of how well Obamacare is affecting the rate of cervical cancer diagnoses.

    After examining cervical cancer diagnosis rates for both cohorts before and after the implementation of Obamacare, researchers noted that there was a substantial increase in the number of cervical cancer diagnoses for women ages 21 to 25, whereas the age 26-34 cohort had a relatively consistent number of diagnoses before and after Obamacare's implementation.

    On the surface, a rising rate of cervical cancer diagnoses may not sound good at all. But, in a different context it could be just the news we've been hoping for. The key to beating cervical cancer is discovering it early, and presumably being able to stay on their parents' health plans until age 26 helped the 21- to 25-year-old cohort gain this vital medical access. It's possible that this early diagnoses not only saved lives, but for insurers that it kept them from shelling out big bucks in mid- to late-stage cancer treatments.

    Keep in mind that this is just one example, and one example does not make a trend. However, it's long been postulated that reducing the barriers to health insurance would lead to a higher medical utilization rate for consumers and a better chance of discovering potentially serious and chronic conditions at an earlier time, thus saving the patients' lives and cutting insurers' long-term medical expenses. It's possible we could be witnessing the first signs of that.

    Understandably, we'll want to see additional studies emerge that examine disease diagnosis and treatment rates in a pre- and post-Obamacare setting so we can make a conclusive ruling as to whether or not Obamacare could actually lower long-term healthcare costs and improve long-term patient survival rates. The initial signs, though, are very encouraging.

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    U.S. President Barack Obama speaks to reporters as he meets with Israeli President Reuven Rivlin in the Oval Office at the White House in Washington December 9, 2015.  REUTERS/Jonathan Ernst Republican and Democratic lawmakers are pressing to strike a fatal blow to two controversial tax provisions of the Affordable Care Act. They plan to postpone the effective dates of the so-called “Cadillac tax” on high-end employer provided health insurance plans and the stiff excise tax on the medical device industry until long after President Obama has left office.

    The two provisions were designed to raise billions of dollars in operating funds for Obamacare and discourage runaway growth in the cost of the health care system. However, the Cadillac tax has long been the target of an eclectic, bipartisan coalition including conservative Republicans and major labor groups, while the medical devices tax is strongly opposed by lawmakers from Minnesota, Indiana and other states where the medical devices industry employs many workers.

    The Cadillac tax is so unpopular that the Senate voted 90 to 10 last week to repeal it outright as part of a larger bill aimed at dismantling the Affordable Care Act. Both Senate Majority Leader Mitch McConnell (R-KY) and Senate Democratic Leader Harry Reid (D-NV) voted to repeal the tax.

    Meanwhile, GOP and Democratic congressional negotiators are struggling to reach agreement on a massive year-end package of spending and tax measures that would avoid a government shutdown. The agreement is likely to include Obamacare tax provisions. Congress is extending a Dec. 11 deadline for completing work on the spending and tax package through the middle of next week.

    If Congress votes to impose a two-year delay in beginning to implement the new tax measures, that would be tantamount to killing them outright. While the revenue loss would present added challenges to Obamacare, it would not necessarily jeopardize its long-term viability. But it would mean even higher premiums and deductibles to make up the shortfall.

    senator dean hellerRepublicans opposed to any tax hike, liberal Democrats and even the AFL-CIO have been working together for months to try to stop the Cadillac tax in its tracks, even though it technically does not begin to take effect until 2018. Republican Sen. Dean Heller of Nevada and Democratic Sen. Martin Heinrich of New Mexico recently introduced the “Middle Class Health Benefits Tax Repeal Act” to target the tax for extinction.

    The tax is practically the only element of the Affordable Care Act designed primarily to try to “bend the cost curve”of the U.S. health care system. It would do that by discouraging employers from providing workers with gold-plated health care and dental plans that sometimes encourage unnecessary or excessive spending.

    If the tax were allowed to take effect, health plans that cost over $10,200 for an individual or $27,500 for a family plan would be subject to the tax, according to a recent analysis by the Kaiser Family Foundation. The tax is 40 percent of the amount that exceeds those thresholds. As one example, if a family plan costs $30,000, the employer offering the plan would have to pay 40 percent of the $2,500 above the threshold, or $1,000 for each family it covers under that plan.

    Labor groups, the U.S. Chamber of Commerce and others strongly oppose the tax, arguing that it would undercut the quality of health care benefits for American workers and their families. Moreover, it would adversely affect a broad spectrum of plans. In late September, Democratic presidential frontrunner Hillary Clinton urged Congress to repeal the Cadillac tax. She argued, “Too many Americans are [already] struggling to meet the cost of rising deductibles and drug prices,” and that the tax might create an incentive “to substantially lower the value of the benefits package” and shift costs to consumers.”

    Obamacare ProtestYet repealing the Cadillac tax would add directly to the federal budget deficit unless Obamacare is repealed or revised, an estimated $91 billion over the next decade according to the Joint Committee on Taxation. As The Fiscal Times has reported, a group of 101 economists and policy analysts recently sent a letter to top lawmakers on the tax-writing committees of the House and Senate urging them to reconsider proposals for doing away with the tax. Among their concerns: The current tax system, which excludes employer-provided health care plans from taxation, has pressured employers to earmark more of their personnel spending on health benefits than they otherwise would do, to the detriment of their overall operations.

    At the same time, lawmakers in both parties have rallied to repeal Obamacare’s 2.3 percent tax on medical devices, which range from simple devices such as medical thermometers, disposable gloves and tongue depressors to advanced devices and computers that assist in conducting medical testing and implants. Industry groups and their allies say the tax is bad for business because it will drive up prices and lead to job losses—especially at smaller companies.

    However, opponents of any repeal of the tax cite a report from the Congressional Research Service that found the economic impact of the medical device tax on manufacturers would be “relatively small.” 

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    Barack Obama Harry Reid Mitch McConnell

    One of the signature provisions of the Affordable Care Act is on the chopping block. And it's largely due to President Barack Obama's fellow Democrats.

    Congressional negotiators are close to agreement on a sweeping budget deal that would keep the government funded through next September. One of the provisions included in the deal is "likely" to be a two-year delay in the implementation of the "Cadillac tax," according to a senior Democratic aide.

    A delay of the tax, which isn't scheduled to be implemented until 2018 anyway, wouldn't necessarily represent a threat to the law itself. Coverage expansion, both through federal and state-based insurance marketplaces, and through the federal Medicaid program, could go on without the tax.

    But the tax's delay could potentially pose a significant problem for one of Obamacare's main goals: constraining healthcare costs in the US.

    And opposition to the provision has come from a surprising source: Democrats, as high up as Democratic presidential front-runner Hillary Clinton and Senate Minority Leader Harry Reid (D-Nevada).

    Peter Orszag, the former director of the Office of Management and Budget under Obama, argued that for all the attempted pillorying by Republican members of Congress, Democrats are executing the biggest "attack" on the law in its five-plus years in existence.

    "A push now under way in Congress to defer or repeal the so-called Cadillac tax is the biggest legislative threat the Affordable Care Act has faced in the past five years. And, weirdly, the lawmakers to blame are Democrats," Orszag wrote in a Bloomberg View column.

    In a tweet last week, Orszag called it the "biggest threat" to the law to date:

    Economists and deficit hawks favor the Cadillac tax, as it is projected to raise revenue and lower overall health costs. But it is reviled by just about everyone else — especially labor unions, which represent a major Democratic constituency. It has crept into the presidential campaign, as both top Democratic contenders — Clinton and Sen. Bernie Sanders (I-Vermont) — have called for its repeal.

    "This anti-worker tax has got to go," said Harold Schaitberger, the president of the International Association of Firefighters, an influential labor union. "And this delay gives us the room we need to get rid of it once and for all."

    Democrats who oppose the provision often argue the tax — a 40% excise tax on employer plans whose premiums exceed $10,200 for individuals and $27,500 for families — is in reality more a tax on most employer-sponsored health plans. Proponents say that over time, employers will likely maneuver around the excise tax by looking for cheaper, more efficient plans with more affordable premiums, thereby providing employees more value in their health plans.

    But critics say employers are more likely to shift the costs to workers with higher deductibles, co-payments, and other costs. Labor unions in particular have taken pride in negotiating premium benefits for their workers — and some of those resulting plans would likely be affected by the tax.

    "Therein lies the irony," Orszag argued. "Those arguing most forcefully for gutting the Cadillac tax apparently believe it's more important to prevent shifting some costs in the short term than to lower the total cost of health care. Over time, such myopic thinking may well raise, not reduce, out-of-pocket spending."

    The White House has fiercely backed the provision of Obamacare, but it has stopped short of saying it would veto budget-deal legislation — which would, in effect, shut down the federal government — that contained a delay.

    Part of the reason for the White House's support: According to the Committee for a Responsible Federal Budget, the tax is expected to bring in $87 billion in revenue by 2025. Revenue brought in from the tax is expected to grow exponentially in the years that follow.

    cadillac_tax_2

    Economists and those who have pushed the US to rein in healthcare costs also consider it essential to balance out the cost that comes from one of Obamacare's other major goals: universal health coverage.

    The Congressional Research Service has projected that by 2024, the tax would reduce health spending by somewhere between $40 billion and $60 billion.

    Earlier this year, 101 health economists signed a letter to key congressional members defending the controversial tax. The letter included names from the administrations of both Republican and Democratic presidents who hold different views on the law as a whole.

    Some of the more notable signers of the letter included Jonathan Gruber, the MIT economist and Obamacare architect who came under fire last year for comments he made about the law leading up to its passage; Douglas Elmendorf, the director of the Congressional Budget Office from 2009 until earlier this year; and Ezekiel Emanuel, a senior fellow at the Center for American Progress whose brother, Rahm, was Obama's chief of staff.

    "We, the undersigned health economists and policy analysts, hold widely varying views on other provisions of the Affordable Care Act, and we recognize that measures other than the Cadillac tax could have been used to restrict the open-ended health insurance tax break," the economists wrote.

    SEE ALSO: One of Obamacare's biggest success stories is suddenly under serious threat

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    $949 a month? Are you serious?

    That is how much an insurance agent quoted me for a health insurance plan with a $6,000 deductible to cover my three college-aged children and me.

    Neither my children nor I have any pre-existing conditions (unless being fat counts) or smoke. We’re perfectly healthy.

    The insurance industry isn’t picking on me, though. According to the Kaiser Foundation, the average annual premium for a family health insurance plan hit $17,545 in 2015!

    Why Health Care Costs Are on the Rise

    In spite of the Affordable Care Act’s promises of savings, Americans spent $3 TRILLION on healthcare in 2014, a 5.3% year-over-year increase, which works out to $9,523 for every man, woman, and child in the US.

    healthcare

    Today, healthcare spending accounts for a whopping 17.5% of the US economy.

    Why the gigantic increases?

    “Two main factors were responsible for health spending growth in 2014; coverage expansion associated with the Affordable Care Act and faster growth in prescription drug spending,” said Anne Martin, an economist at the Centers for Medicare and Medicaid Services.

    FACT: Spending on prescription drugs jumped 12.2% in 2014, to $297.7 billion.

    An Investment Opportunity in Health Coverage Expansion

    But there’s a silver lining. Buried in all those rising healthcare costs is an investment opportunity.

    healthcare

    No, it isn’t the insurance or drug companies… it is the hospitals that are hogging 35 cents out of every dollar spent on healthcare.

    One of the consequences of the Affordable Care Act was an increase in the number of Americans with health insurance.

    Sure, there is great debate over the usefulness of the Affordable Care Act, but I believe there’s no question that more Americans have health insurance now than before.

    The two numbers I place the most confidence in are Goldman Sachs’s estimate of a 13-14 million increase and the 22 million estimate from the RAND Corporation, a nonprofit, global think tank.

    Whatever the actual number is, the point is that more Americans (millions of them) will be seeing doctors and visiting hospitals than ever before. At the same time, the number of hospitals has barely increased.

    More patients and roughly the same number of hospital beds equal a lot more business—and ultimately profits—for hospitals. There are five publicly traded hospital stocks that you should consider:

    • HCA Holdings (HCA)
    • Universal Health Services (UHS)
    • Community Health Systems (CYH)
    • LifePoint Health (LPNT)
    • Tenet Healthcare (THC)

    Alternatively, if you’re more of an ETF investor, take a look at:

    • iShares US Healthcare Providers ETF (IHF)
    • SPDR S&P Health Care Services ETF (XHS)

    I’m not suggesting you rush out and buy any of those tomorrow morning. Of course, timing is everything, so I recommend that you wait for my buy signal or for them to go on sale.

    But make no mistake, the hospital business is one of the best ways to prosper from the Affordable Care Act and the graying of America.

    Subscribe to Connecting the Dots

    Markets rise or fall each day, but when reporting the reasons, the financial media rarely provides investors with a complete picture. Tony Sagami shows you the real story behind the week’s market news in his free publication Connecting the Dots.

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    barack obama

    The $1.1 trillion omnibus spending bill headed for approval in the House on Friday contains yet another GOP blow to the Affordable Care Act. This one blocks administration efforts to bolster a special fund created under the law to compensate insurance companies for excessive losses due to a disproportionate share of very sick or elderly enrollees.

    Sen. Marco Rubio (R-FL) led a group of Senate and House Republicans have sought to prevent additional billions in funding for the so-called risk corridor program. It could also help cripple the national health insurance program Republicans have vowed to repeal and replace. Indeed, the tactic is having an effect as roughly half of the 23 non-profit insurance plans created under the 2011 Affordable Care Act at a cost of $2.4 billion have announced they will close their doors by the end of this year, largely because of inadequate compensation for unexpected losses.

    Rubio, a GOP candidate for president, has denounced the rate corridor program as a costly corporate bailout that cannot be justified. Every­one run­ning wants to dis­mantle Obama­care,” Rubio told The New York Times. “I’ve ac­tu­ally done something to­ward achiev­ing that goal.”

    Alice Rivlin, a former White House budget director and head of the Congressional Budget Office said on Thursday that the new congressional action is “very unfortunate” and will further damage the health insurance program.

    marco rubio

    “It’s forcing the government to renege on its promise to share the risk, and it has been damaging to weaker insurance companies and especially the co-ops – some of which have gone under already,” she said. “So extending [the funding restriction] for another year will just mean that companies that expected to have the government share in their risk if they underpriced their product will not get as much help, and it may discourage entry into the market.”

    Jay Courtney, a spokesperson for America’s Health Insurance Plans (AHIP), a leading health insurers advocacy group, said, “The latest budget deals do nothing to address the recent funding shortfall with the risk corridors program or make up for the losses facing health plans in the exchanges.”

    The program originally was conceived as an insurance policy of sorts for major insurers who miscalculated in projecting how many of their enrollees would be young and healthy – and thus unlikely to make big demands on their coverage – and older and sicker enrollees who would require costly medical attention and prescription drugs.

    The approach was intended to minimize the risk that insurers faced in setting their premiums and deductibles while complying with ACA requirements to accept enrollees with pre-existing medical conditions and adhere to other constraints on their profits. Rivlin, a policy expert with the Brookings Institution, recalled that during deliberations over the Obamacare legislation, insurance companies “were a little reluctant, because they weren’t familiar with this population of people who hadn’t previously had insurance.”

    Obamacare ProtestThe insurers would be required to pay into a pool if their revenues and profits far exceeded their projections while the federal government would pay in when insurers’ revenues lagged far behind their projections. This was one way the Obama administration enticed insurers to take part in Obamacare, even though Rubio and others said it was an inappropriate guarantee.

    A similar risk corridor program was set up to protect the pharmaceutical industry when the administration of President George W. Bush pushed through enactment of the Medicare Part D prescription drug program in 2003.

    Last year, the insurance companies paid just $362 million into risk corridor program while submitting $2.87 billion in claims for reimbursement. But the Republicans amended a spending bill to prevent the Department of Health and Human Services from transferring discretionary funds to bail out the program. The fiscal 2015 budget package approved last year specified that payments made to insurers under the risk corridors could not exceed collections. That is why the DHH’s payouts this year were equivalent to just 12.6 percent of the claims.

    The new omnibus spending bill awaiting final approval by Congress this week once again bars the Obama administration from shifting funds to beef up the risk corridors program. A GOP summary of the spending package praised last year’s action for being able to save over $2.5 billion from potentially being transferred out of priority HHS discretionary spending. It also said that Congress will continue to insist that the risk corridor fund be kept “budget neutral” – meaning no shifting of funds.

    The omnibus spending bill also imposes a two-year delay in implementation of a new tax on high-end, employer provided health insurance plans and a tax on the medical devices industry and postpones for one year another tax on health insurers. 

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    Barack Obama smile

    There's a "new reality" for Democratic candidates with an issue that confounded the party in the 2014 midterm elections: Obamacare is no longer much of a liability.

    A new survey by the left-leaning polling firm Public Policy Polling, the results of which were shared with Business Insider ahead of its release Monday, found support for the Affordable Care Act evenly split. Overall, 41% of Americans who were surveyed said they supported the law, compared with 39% who opposed it.

    "Public opinion on Obamacare is pretty much evenly divided — new reality that it isn't a liability for Dems anymore," Tom Jensen, the director of Public Policy Polling, told Business Insider.

    (A note: "Affordable Care Act," as PPP described the healthcare legislation when testing its popularity, generally polls better than "Obamacare.")

    Polling from the Kaiser Family Foundation has found that the law, the signature domestic achievement of President Barack Obama, did not play an overwhelming role in handing Democrats huge losses in the 2014 midterm elections. Just 8% of Republicans and 13% of Democrats said healthcare was among their top two factors.

    Yet it played significantly on the campaign trail. In the aftermath of the difficulties with the healthcare law's initial rollout, Republicans pounced, and Democrats were wary of embracing the law as it began to provide benefits to millions of Americans. Many Democrats have said their candidates' reluctance to tout the law's pros, in retrospect, was a mistake.

    Now how the public views the law depends largely on political affiliation. Liberal voters strongly support the Affordable Care Act, according to PPP, while conservative voters are staunchly opposed. A plurality of self-identified moderate voters, meanwhile, supports the healthcare law.

    Jensen said the partisan divide on Obamacare had become the norm in the firm's polling.

    "This is about where it's been over the course of the year," he said. "After the implementation difficulties had passed and people actually started receiving healthcare through the program it got a lot more popular."

    It's why Democratic candidates up to the party's presidential front-runner, former Secretary of State Hillary Clinton, have taken a vastly different approach this election cycle. Clinton often praises the law's successes and says she wants to "build" on them.

    "We want to build on it and fix it," she said at Saturday night's Democratic debate in New Hampshire.

    Still, the eventual Democratic nominee and the party's down-ballot candidates will be forced to grapple with what Clinton referred to as "glitches" on Saturday — rising healthcare premiums. Though for the most part, those premiums are increasing at a slower rate than in recent history.

    View the full poll below:

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    Obamacare ProtestWASHINGTON (AP) — It's been like a long-delayed New Year's resolution for Republicans. But 2016 will finally be the year when they put legislation on President Barack Obama's desk repealing his health care law.

    The bill undoing the president's prized overhaul will be the first order of business when the House reconvenes this coming week, marking a sharply partisan start on Capitol Hill to a congressional year in which legislating may take a back seat to politics.

    There are few areas of potential compromise between Obama and the GOP majority in the House and Senate in this election year, but plenty of opportunities for political haymaking during the presidential campaign season.

    Obama will veto the health law repeal bill, which also would cut money for Planned Parenthood. The measure already has passed the Senate under special rules protecting it from Democratic obstruction. But that's the point for Republicans, who intend to schedule a veto override vote for Jan. 22, when anti-abortion activists hold their annual march in Washington to mark the anniversary of the Supreme Court decision in 1973 that legalized abortion.

    Despite dozens of past votes to repeal the health law in full or in part, Republicans never before have succeeded in sending a full repeal bill to the White House. They insist that doing so will fulfill promises to their constituents while highlighting the clear choice facing voters in the November presidential election.

    Every Republican candidate has pledged to undo the health law. The Democrats running for president would keep it in place.

    Paul Ryan"You're going to see us put a bill on the president's desk going after Obamacare and Planned Parenthood so we'll finally get a bill on his desk to veto," House Speaker Paul Ryan, R-Wis., told conservative talk host Bill Bennett over the holidays.

    "Then you're going to see the House Republican Conference, working with our senators, coming out with a bold agenda that we're going to lay out for the country, to say how we would do things very differently," Ryan said.

    In the Senate, which reconvenes Jan. 11, a week later than the House, early action will include a vote on a proposal by Sen. Rand Paul, the Kentucky Republican who is running for president, for an "audit" of the Federal Reserve. Democrats are likely to block it. But, like the health repeal bill in the House, the vote will answer conservative demands in an election year.

    Also expected early in the Senate's year is legislation dealing with Syrian refugees, following House passage of a bill clamping down on the refugee program. Conservatives were angry when the year ended without the bill advancing. Senate Republican leader Mitch McConnell of Kentucky promised a vote, though without specifying whether it would be the House bill or something else.

    The House Benghazi committee will continue its investigation of the attacks that killed four Americans in Libya in 2012, with an interview of former CIA Director David Petraeus on Jan. 6. That comes amid new Democratic accusations of political motives aimed at Hillary Clinton after the committee chairman, Rep. Trey Gowdy, R-S.C., endorsed Sen. Marco Rubio, R-Fla. for president. Clinton, the front-runner for the Democratic presidential nomination, was secretary of state at the time of the Benghazi attacks.

    The bold agenda promised by Ryan after succeeding former Rep. John Boehner, R-Ohio, as speaker last fall will begin to take shape at a House-Senate GOP retreat this month in Baltimore. Thus far Ryan has pledged efforts to overhaul the tax system and offer a Republican alternative to the health overhaul.

    In the Senate, McConnell's primary focus is protecting the handful of vulnerable Republican senators whose seats are at risk as Democrats fight to regain the Senate majority they lost a year ago. That means weighing the political risks and benefits of every potential vote to endangered incumbents in Ohio, Illinois, Wisconsin, Pennsylvania and New Hampshire.

    That could determine whether McConnell allows criminal justice overhaul legislation — the one issue cited by Obama and lawmakers of both parties as ripe for compromise — to come to the floor.

    McConnell already has suggested that prospects for approval of Obama's long-sought Asia trade pact are dim, and the senator has ruled out major tax overhaul legislation as long as Obama is president.

    McConnell could try to put his thumb on the scales of the presidential race with two GOP senators having emerged as leading contenders.

    Sen. Ted Cruz of Texas has been a thorn in McConnell's side, once calling the GOP leader a liar, and has frosty relations with his fellow senators. Rubio is on good terms with fellow lawmakers and has been endorsed by several of them. McConnell could schedule debate on an issue with the potential to favor Rubio politically over Cruz, such as National Security Agency wiretapping authority.

    But McConnell insists he is staying out of it.

    "We all have a big stake in having a nominee for president who can win, and that means carrying purple states, and I'm sure pulling for a nominee who can do that," McConnell told The Associated Press, refusing to elaborate on who might fit that description.

     

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    FILE - In this Nov. 22, 2015 file photo, The Capitol dome is seen on Capitol Hill. It’s been like a long-delayed New Year’s resolution for the GOP. But 2016 will finally be the year congressional Republicans put legislation on President Barack Obama’s desk repealing “Obamacare.” (AP Photo/Alex Brandon, File)

    Legislation repealing President Barack Obama's health care law comes to the forefront when the House reconvenes this week, marking a sharply partisan start to a congressional year in which legislating may take a back seat to politics.

    The bill undoing the president's prized overhaul of health care has been like a long-delayed New Year's resolution for Republicans. It will be the first order of business for the House in the new year.

    There are few areas of potential compromise between Obama and the GOP majority in the House and Senate, but plenty of opportunities for political haymaking during the presidential campaign season.

    Obama will veto the health law repeal bill, which also would cut money for Planned Parenthood. The measure already has passed the Senate under special rules protecting it from Democratic obstruction. But that's the point for Republicans, who intend to schedule a veto override vote for Jan. 22, when anti-abortion activists hold their annual march in Washington to mark the anniversary of the Supreme Court decision in 1973 that legalized abortion.

    Despite dozens of past votes to repeal the health law in full or in part, Republicans never before have succeeded in sending a full repeal bill to the White House. They insist that doing so will fulfill promises to their constituents while highlighting the clear choice facing voters in the November presidential election.

    Every Republican candidate has pledged to undo the health law. The Democrats running for president would keep it in place.

    "You're going to see us put a bill on the president's desk going after Obamacare and Planned Parenthood so we'll finally get a bill on his desk to veto," House Speaker Paul Ryan, R-Wis., told conservative talk host Bill Bennett over the holidays.

    "Then you're going to see the House Republican Conference, working with our senators, coming out with a bold agenda that we're going to lay out for the country, to say how we would do things very differently," Ryan said.

    In the Senate, which reconvenes Jan. 11, a week later than the House, early action will include a vote on a proposal by Sen. Rand Paul, the Kentucky Republican who is running for president, for an "audit" of the Federal Reserve. Democrats are likely to block it. But, like the health repeal bill in the House, the vote will answer conservative demands in an election year.

    Also expected early in the Senate's year is legislation dealing with Syrian refugees, following House passage of a bill clamping down on the refugee program. Conservatives were angry when the year ended without the bill advancing. Senate Republican leader Mitch McConnell of Kentucky promised a vote, though without specifying whether it would be the House bill or something else.

    The House Benghazi committee will continue its investigation of the attacks that killed four Americans in Libya in 2012, with an interview of former CIA Director David Petraeus on Jan. 6. That comes amid new Democratic accusations of political motives aimed at Hillary Clinton after the committee chairman, Rep. Trey Gowdy, R-S.C., endorsed Sen. Marco Rubio, R-Fla. for president. Clinton, the front-runner for the Democratic presidential nomination, was secretary of state at the time of the Benghazi attacks.

    mitch mcconnellThe bold agenda promised by Ryan after succeeding former Rep. John Boehner, R-Ohio, as speaker last fall will begin to take shape at a House-Senate GOP retreat this month in Baltimore. Thus far Ryan has pledged efforts to overhaul the tax system and offer a Republican alternative to the health overhaul.

    In the Senate, McConnell's primary focus is protecting the handful of vulnerable Republican senators whose seats are at risk as Democrats fight to regain the Senate majority they lost a year ago. That means weighing the political risks and benefits of every potential vote to endangered incumbents in Ohio, Illinois, Wisconsin, Pennsylvania and New Hampshire.

    That could determine whether McConnell allows criminal justice overhaul legislation — the one issue cited by Obama and lawmakers of both parties as ripe for compromise — to come to the floor.

    McConnell already has suggested that prospects for approval of Obama's long-sought Asia trade pact are dim, and the senator has ruled out major tax overhaul legislation as long as Obama is president.

    McConnell could try to put his thumb on the scales of the presidential race with two GOP senators having emerged as leading contenders.

    Sen. Ted Cruz of Texas has been a thorn in McConnell's side, once calling the GOP leader a liar, and has frosty relations with his fellow senators. Rubio is on good terms with fellow lawmakers and has been endorsed by several of them. McConnell could schedule debate on an issue with the potential to favor Rubio politically over Cruz, such as National Security Agency wiretapping authority.

    But McConnell insists he is staying out of it.

    "We all have a big stake in having a nominee for president who can win, and that means carrying purple states, and I'm sure pulling for a nominee who can do that," McConnell told The Associated Press, refusing to elaborate on who might fit that description.

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    Kentucky Republican senatorial candidate Matt Bevin addresses the crowd during a campaign stop at Lexington Airport in Lexington, Kentucky, in this May 19, 2014, file photo.  REUTERS/John Sommers II/Files

    Newly ensconced Kentucky Gov. Matt Bevin (R) last week backed away from his campaign pledge to repeal expanded Medicaid coverage for 400,000 low-income people in the face of the widespread popularity of the program.

    Early on, the Tea Party conservative vowed to dismantle the hallmark program of outgoing Democratic governor Steve Beshear that reduced the percentage of uninsured Kentuckians by half. But with polls showing that 72 percent of state residents favored the Obamacare program, Bevin toned down his threat.

    Now the new Republican governor is sounding a different political tune, declaring he will seek a waiver from the federal Centers on Medicare and Medicaid Services to reform the program in a way that better reflects his conservative principles, that toughens standards for qualifying for coverage and that assures the long-term financial sustainability of the Medicaid program.

    Bevin contends that Beshear left behind a $128 million shortfall in the state’s overall Medicaid program this fiscal year that must be addressed through a tightening of the program. “But ultimately, this isn’t just about where we can spend the least amount of money,” he told reporters last week. “More than the dollars, we want to ensure that we have people with good health outcomes.”

    Bevin’s decision is important because it reflects the changing posture of some previously recalcitrant Republican governors who rejected the Obamacare program but now are feeling pressure to find some middle ground between a full-blown expansion of Medicaid and a more limited approach.

    Demonstrators in favor of Obamacare gather at the Supreme Court building in Washington March 4, 2015. REUTERS/Jonathan Ernst

    Currently, 20 states have rejected expanded Medicaid coverage, although several are considering changing their decision. A small handful of other Republican governors have changed their positions on terms they demanded through waiver requests like the one Bevin intends to seek.

    The financial stakes couldn’t be higher.

    Under the Affordable Care Act, the federal government is picking up 100 percent of the total cost through the end of this year and then will gradually ratchet back its share to 90 percent, with the states required to pick up the rest. If all 50 states and the District of Columbia were to take part in the program, the states would have $38 billion more to spend on Medicaid between 2015 and 2024, according to the Kaiser Family Foundation.

    Diane Rowland, executive vice president of the foundation, said on Monday that it is dawning on Bevin and other Republican governors who have fought the expanded Medicaid program that they are denying their states vital federal funding at a time of economic uncertainty and declining revenues due to a drop in oil prices.

    “A lot of Republican governors are looking at the fiscal impact of doing the expansion and it’s not as negative as they like to say,” she said. “It’s more like, ‘We have substantial needs in our state.’ This is especially the case in the states that are losing oil money.”

    Rowland added that by altering the Medicaid program, GOP governors could more easily rationalize going after the federal dollars. “Instead of doing a straight expansion, they can say, ‘I got a waiver. I got the federal government to do it my way,” she said.

    Joseph Antos, a health care expert with the American Enterprise Institute, agrees that there likely will be more adoption of expanded Medicaid coverage, but not until after the 2016 election and President Obama’s departure from office. By then, he said, some of the GOP political opposition will soften, while the CMS will be less concerned about preserving the president’s legacy than finding common ground with Republican-controlled states.

    A 2012 Supreme Court ruling essentially created a dual system of health insurance coverage for poor people by allowing states to accept or reject expanded Medicaid coverage. Most blue states jumped at the opportunity, while many red states rejected the offer to voice opposition to Obamacare.

    Obama doctors Obamacare

    However, a handful of states that initially opposed the offer — including Arkansas, Indiana, Iowa and Michigan — subsequently obtained waivers. In some cases, dramatic changes were made to the program, including imposing premiums and cost sharing on some beneficiaries depending on their incomes and other measures to bring down the overall cost.

    Indiana, for example, won waiver approval for one of the toughest and most complex expanded Medicaid programs in the country — one that not only includes premiums, co-payments and different tiers of coverage but severe penalties, including temporary loss of coverage — for some low income people who miss their payments.

    The Indiana approach implements Medicaid expansion by requiring most newly eligible adults with incomes from zero to 138 percent of the federal poverty level to pay monthly premiums by contributing to a Personal Wellness and Responsibility (POWER) health savings account. According to an analysis by the Kaiser foundation, “newly eligible adults who pay premiums will be eligible for HIP Plus, an expanded benefit package with co-payments only for non-emergency use of the ER.”

    However, those with incomes from 101 percent to 138 percent of the federal poverty level who fail to pay premiums after a 60-day grace period will be removed from coverage and barred from re-enrolling for six months. Beneficiaries with incomes at or below 100 percent of the poverty level who fail to pay premiums will receive HIP Basic, a more limited benefit package with state-plan level co-payments.

    Gov. Bevin said his new administration intends to draft a plan to overhaul the state’s expanded Medicaid program by the middle of this year with the goal of implementing it by the start of 2017. Without spelling out many details, he said that Indiana’s expanded Medicaid plan is “the model we most likely will use.”

    As the 2016 session of the Kentucky General Assembly opens, state lawmakers said they intend to carefully monitor Bevin's efforts to alter the state's Medicaid system. "It's going to be interesting to see how it shakes out," Democratic state Rep. David Watkins, a retired physician who serves as co-chair of the legislature's Medicaid Oversight and Advisory Committee, told the Courier-Journal. "We're already at the bottom of the heap here in Kentucky. We don't need to go down any further."

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    House Speaker Paul Ryan of Wis. talks to reporters as Congress begins the new year on Capitol Hill in Washington, Wednesday, Jan. 6, 2016. After dozens of failed attempts to undo President Barack Obama's health care law, the GOP-led Congress will finally put a bill on the president's desk striking at the heart of his signature legislative achievement.  (AP Photo/J. Scott Applewhite)

    WASHINGTON (AP) — Congress has sent legislation to President Barack Obama's desk repealing his signature health care law.

    There have been dozens of previous repeal attempts in the House and the Senate. Wednesday's vote in the House marks the first time such a bill will actually make it all the way to the White House.

    The legislation, which also cuts federal funding for Planned Parenthood, passed the Senate last year under special rules protecting it from a Democratic filibuster. Wednesday's House vote was 240-181 along party lines.

    Obama will veto the bill. But Republicans say that by holding the vote they have fulfilled a promise to voters in an election year. They also say they've demonstrated that if a Republican wins the presidency they will actually succeed in repealing the health law.

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    Supporters of the Affordable Care Act celebrate after the Supreme Court up held the law in the 6-3 vote at the Supreme Court in Washington June 25, 2015. REUTERS/Joshua Roberts

    In the United States, physicians practice medicine in a variety of settings, ranging from small solo practices to large, multispecialty group practices consisting of hundreds or even thousands of practitioners.

    The tradition of the solo practitioner is one that is immediately familiar to most people, in part because this is the typical depiction of physician practice in movies and television shows.

    However, this model of practice is falling by the wayside, and physicians are increasingly more likely to practice in the setting of large group practices. In 2008, only 18% of family practice physicians were employed in a solo practice, compared with 44% in 1986. This trend is being further encouraged by the Affordable Care Act on the grounds that larger practices can help curb costs by leading to better outcomes.

    But will this physician consolidation actually lead to lower health care costs? The answer to this question has important consequences. Consolidation among physician practices has typically occurred via mergers between large health care systems.

    Proponents of these mergers typically argue that they benefit patients, in large part because of their ability to reduce costs.

    Are these claims too good to be true?

    Benefits of a larger practice

    Larger practices can often offer many benefits for the physician, such as administrative support, interaction with colleagues and increased resources for professional development.

    In addition, these large practices may benefit patients as well. Sometimes, bigger is indeed better, and large practices may be able to improve patient care and reduce costs by leveraging their size to implement large-scale measures aimed at quality improvement. For example, these groups may be able to more easily employ electronic medical record systems aimed at improving coordination of care, monitoring physician performance and reducing physician errors.

    Indeed, these potential benefits form the rationale for many policies aimed at encouraging further consolidation among physicians.

    For example, the Affordable Care Act encourages physicians to form large, multispecialty groups known as Accountable Care Organizations, in large part because of the belief that these organizations will be able to reduce costs by improving coordination of care.

    However, a key question is whether these potential benefits may be outweighed by the potential disadvantages associated with large practices. Of crucial concern to antitrust authorities is that large practices may leverage their size to negotiate higher payments from insurers (and indirectly, patients), which could actually increase costs.

    Simply put, a large practice is on much better ground than a solo practitioner to negotiate higher payments from a health insurers.

    In a recent paper, we examined whether larger practices were associated with higher payments from private insurers in the case of orthopedic surgery and total knee arthroplasty, also known as “knee replacement.”

    doctor patientKnee-jerk reaction

    As a first step, we characterized the degree to which the provision of total knee arthroplasties in a given area was dominated by a single orthopedic surgery group or a small number of groups. Total knee arthroplasty is a good surgery to study because it is a commonly performed procedure whose use nearly doubled from 1991 to 2010.

    We then examined whether insurers paid higher prices for total knee arthroplasty in markets dominated by a single group or a small number of groups.

    Of course, markets that are dominated by a small number of groups may be associated with many other factors that could drive higher insurer payments. To address this possibility, rather than comparing prices across markets, our approach examined how changes in market structure were associated with changes in total knee arthroplasty payments within a given market over time.

    In other words, our approach followed individual markets and asked how the payments in those markets changed over time as the provision of total knee arthroplasty became more (or less) dominated by a small number of groups.

    Consolidation leads to higher costs

    obama obamacare doctorsOverall, our results showed that payments were higher in markets dominated by a small number of groups.

    In particular, insurer payments for total knee arthroplasty were 7% higher in the markets where the provision of total knee arthroplasty were most dominated by small number of groups, compared with markets where the provision of total knee arthroplasty was more spread out across groups.

    To put this in context, this 7% increase is almost as large as the overall long-term decline in total knee arthroplasty payments we observed during the time period we studied (2001-2010).

    Policy implications

    Our results have several important policy implications.

    First, they argue for some skepticism in evaluating the potential benefits of mergers between physician groups, as well as hospitals and health care systems more broadly.

    While proponents of these mergers typically cite many of the potential benefits –such as the benefits discussed above – our research also suggests that these potential benefits may be outweighed by the ability of large providers to leverage higher payments from health insurers.

    Second, our results suggest that antitrust authorities should closely evaluate whether any potential mergers may result in insurers (and patients) paying higher prices for medical services. For example, antitrust authorities should carefully consider the economic impact of the recently announced merger between Fairview Health and the University of Minnesota’s health system.

    At the end of the day, we are witnessing a large change in the way medical practice is being delivered, as the traditional model of solo practice gives way to a model in which physicians tend to practice in the context of larger organizations.

    While the model has the ability to benefit patients and physicians, our study suggests that more work is also needed to understand its potential pitfalls.

    Eric Sun, Instructor of Anesthesiology, Perioperative and Pain Medicine, Stanford University

    This article was originally published on The Conversation. Read the original article.

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    Kay Campos, 56, who has no health insurance and diabetes, browses leaflets at a Covered California event which marks the opening of the state's Affordable Healthcare Act, commonly known as Obamacare, health insurance marketplace in Los Angeles, California, October 1, 2013. REUTERS/Lucy Nicholson

    About 11.3 million Americans have signed up so far for individual health insurance in 2016 through HealthCare.gov and the state-based exchanges, the U.S. government said on Thursday.

    Enrollment for these plans, which were created under the Affordable Care Act, known as Obamacare, closes on Jan. 31.

    The U.S. Department of Health and Human Services said that total included about 4 million people under age 35.

    U.S. health insurers, including UnitedHealth Group Inc, have said that they are losing money on the exchanges because many of their patients are older or have high medical costs. Younger people are desirable customers because they tend to have fewer medical expenses and help balance costs.

    Higher membership also helps insurers manage costs and risk. The government said late last year that it expects about 10 million people to be enrolled in Obamacare plans at the end of 2016.

     

    (Reporting by Caroline Humer, editing by G Crosse)

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    trump crowd

    Speaker of the House Paul Ryan promised last month that passing a repeal of the Affordable Care Act would be his top priority in 2016. For those who have watched the political machinations surrounding Obamacare for the past seven years, that sounds like déjà vu. The House of Representatives has passed dozens of bills repealing Obamacare ever since Republicans took control of the lower chamber five years ago.

    This time, though, there is one key difference. Thanks to the Republican takeover of the Senate, Republicans can for the first time complete the legislative process and send the repeal to President Barack Obama’s desk. To manage that feat, Senate Republicans will use the budget reconciliation process to pre-empt a Democratic filibuster and keep Senate Minority Leader Harry Reid on the sidelines. Republicans learned that maneuver from Reid in 2010 – when he used it to pass the Affordable Care Act after losing a filibuster-proof majority in the Massachusetts special election six years ago. The irony and poetic justice of using Reid’s maneuver will be lost on few people, and certainly not on Harry Reid.

    Of course, President Obama will veto the bill, which also bans funding for Planned Parenthood. It has no chance of becoming law at this point. So what’s the point? Why is this such a priority for the GOP? On one level, as a show of defiance, it serves Paul Ryan’s interest as Speaker. More broadly, it demonstrates a belated effort by the Republican Party to deliver on its promises – but this effort might be too little, and too late.

    Ryan rose reluctantly to Speaker in the fall after a series of conservative revolts against John Boehner’s leadership finally left him too weak to succeed. The opening didn’t immediately generate any consensus candidates, and the support that existed for House Majority Leader Kevin McCarthy evaporated after suggesting that one purpose of the Benghazi probe was to damage Hillary Clinton. Conservative House members demanded a change in direction for caucus leadership from Boehner’s team, and Ryan was drafted into the role after first publicly rejecting it.

    In exchange for agreeing to replace Boehner, Ryan insisted that conservatives work with him to clear the decks on the FY2016 budget bill, and a return to regular order afterward. Conservatives demanded a fresh start in the New Year, with a real focus on the issues that mattered to their constituents. On the top of the list, at least on domestic policy, are Obamacare and federal funding for Planned Parenthood. Getting this bill past Senate leadership fulfills Ryan’s agreement with the conservative caucus members, at least in spirit. This success, even while limited, makes it more likely that the rest of Ryan’s year goes more smoothly than any Boehner experienced.

    Paul RyanOn the broader level, the bill’s passage in both chambers is obviously intended to blunt the frustration and anger among Republican voters who twice gave the party large midterm victories, only to see very little for their efforts.

    That anger and frustration has transformed the Republican presidential primary into a platform for outsiders in a cycle where the GOP had more fresh talent within its tent in a very long time.

    Addressing the midterm priorities of those voters could have prevented the revolt seen in 2015, and now the big question will be whether Congress matters any more to the rank-and-file.

    This effort could have been made a year ago, and should have been made a year ago, when the GOP took control of Congress. Instead, Boehner and Mitch McConnell made an understandable but mistaken choice to focus on process rather than issues. Republican leadership wanted to prove it could become a governing party in advance of the 2016 elections, but voters wanted evidence of change instead. That miscalculation not only became the undoing of Boehner but of the Republican Party’s standing with its grassroots voters, who cared much less about process and more about winning on the issues.

    In a strange way, Republicans share a failing with Barack Obama: overpromising and underdelivering. Obama spent the last three months promising dramatic action on gun control, only to offer an ambiguous (but still potentially troublesome) adjustment of the definition of a firearms dealer, thanks to the limitations of his executive authority. Republicans spent 2014 promising dramatic action on a number of priorities, especially Obamacare, on which they could never substantively deliver thanks to the limitation of their majorities in the legislative branch. On top of that, the GOP didn’t even bother to offer a symbolicvictory until now.

    This repeal would have garnered cheers in January or Feburary 2015, even with an Obama veto and no way to override it. A year later, it seems doubtful that it will do much to restore the GOP’s credibility. Bait-and-switch strategies will have that effect and send consumers looking for other options. With just weeks to go before the Iowa caucuses and New Hampshire’s first-in-the-nation primaries, there is little time and almost no opportunity to fix that problem in time to address the anti-establishment fervor in the Republican electorate. Paul Ryan will need to keep delivering in 2016, though, in order to give the GOP enough credibility to fight in the 2016 general election, no matter who the party nominates. 

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    U.S. President Barack Obama holds his end of the year news conference at the White House in Washington December 18, 2015. REUTERS/Carlos Barria

    WASHINGTON (AP) — President Barack Obama has vetoed legislation to repeal his signature health care law.

    It's one of many repeal measures pushed by Republican lawmakers since 2010, when Obama signed the health care program into law. But it's the first bill to clear both houses of Congress and make it to Obama's desk.

    The legislation would also cut federal funding for Planned Parenthood.

    The Senate passed the bill last year under special rules that protected it from a Democratic filibuster. The House followed suit this week. Both chambers are now under GOP control.

    The veto was expected.

    But Republicans say they met two goals by passing the bill: keeping a promise to voters in an election year, and showing their ability to repeal the law if a Republican wins the presidency.

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    obamacare protest

    Around the time of the passing of the Affordable Care Act, known as Obamacare, many opponents of the law argued that it would change the way Americans worked for the worse.

    A new study suggests, however, that this doom-and-gloom scenario has not come to pass.

    Robert Kaestner, Anuj Gangopadhyaya, and Caitlyn Fleming from the University of Illinois and Bowen Garrett of the Health Policy Center examined the effects on the labor market of a Medicaid expansion that was introduced as part of the ACA.

    According to the study, there was fear that to qualify for Medicaid, workers maydecrease work effortby cutting back hoursBy reducing hours, such workers would receive wages low enough to qualify for Medicaid.

    That change, the researchers said, has not materialized.

    "Estimates of the effect of Medicaid on labor supply were, in general, relatively small and not statistically significant," the study said. "In fact, most estimates of the effect of the Medicaid expansions on labor supply were positive. Overall, there was very little evidence that the Medicaid expansions decreased work effort."

    The researchers analyzed data from 22 states that expanded or initiated Medicaid coverage at the beginning of 2014. Additionally, they zeroed in on people with a high-school diploma or less, as they are most likely to earn around the Medicaid cutoff line.

    The researchers looked at changes for three indicators: employment, number of hours worked versus the previous year, and whether the person worked 30 hours or more a week.

    "To summarize, we find that the 2014 Medicaid expansions did not have substantial effects on the labor supply of low-educated persons in the US," the study said.

    For instance, the researchers found that for childless adults the combined change in the three indicators that could be attributed to the Medicaid expansion was just -0.003% to 0.003%. Most of the other samples were similarly tiny.

    "The bottom line is that we can rule out large negative effects of Medicaid on labor supply such as those in Garthwaite et al. and in the upper range of estimates from the Wisconsin study," the researchers said. "Moreover, most of our point estimates are positive suggesting that, if anything, Medicaid increased labor supply."

    While there are certainly other concerns about the impact of the ACA on workers, the study suggests the idea that the law will "keep many beneficiaries in poverty" is simply not panning out.

    SEE ALSO: There's an economic explanation for why so many more Southerners die of heart disease

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    scalia

    Applesauce and broccoli were left on the steps of the US Supreme Court on Friday in what was a makeshift memorial for a few of Justice Antonin Scalia's more memorable contributions to the Obamacare debate.

    "It's pure applesauce," Scalia said of the court's reasoning in last year's King v. Burwell case regarding Obamacare subsidies, which were upheld by the court in a 6-3 decision.

    And in the first Supreme Court case ever involving Obama's landmark health law, Scalia questioned whether the government could force people to buy broccoli.

    "Could you define the market — everybody has to buy food sooner or later, so you define the market as food, therefore, everybody is in the market; therefore, you can make people buy broccoli," he said.

    Fortune cookies and paper bags were also left at the makeshift memorial, which were both a part of one of Scalia's more memorable lines in his dissent of Obergefell v. Hodges, the case that made same-sex marriage legal in the US last summer.

    "If, even as the price to be paid for a fifth vote, I ever joined an opinion for the Court that began: 'The Constitution promises liberty to all within its reach, a liberty that includes certain specific rights that allow persons, within a lawful realm, to define and express their identity,' I would hide my head in a bag. The Supreme Court of the United States has descended from the disciplined legal reasoning of John Marshall and Joseph Story to the mystical aphorisms of the fortune cookie."

    Scalia died at a Texas ranch last weekend at 79. His casket arrived at the Supreme Court on Friday ahead of his funeral on Saturday morning.

    SEE ALSO: The judge Antonin Scalia wanted to replace him has divergent views on one of Scalia's signature issues

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    A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October 2, 2013 photo illustration. REUTERS/Mike Segar

    As mysteries go, the responsibility for the failure of the Department of Health and Human Services’ rollout of the Affordable Care Act exchanges doesn’t exactly have the same inscrutability of an Ellery Queen novel.

    In fact, it doesn’t even reach the range and wit of an Encyclopedia Brown short-story whodunit for young readers.

    Despite having three and a half years to implement the central core of Obamacare, along with $400 million in funding to develop its web portal for consumers, the massive bureaucracy at the Centers for Medicare and Medicaid Services (CMS) laid an egg on October 1, 2013.

    A whopping six people managed to navigate their site to enroll for insurance that day, as millions of Americans struggled to comply with a new federal mandate to purchase health insurance.

    Initially, HHS and the White House tried to blame the failure on tight timeframes and a purported need for an unprecedented level of technological innovation. L

    eadership wasn’t the problem, officials insisted – a renewed effort to close the programming gap was needed. CMS invested in a “tech surge” in the weeks following the disaster, and claimed victory when enrollments began working several weeks into the open enrollment period.

    More than two years later, the Inspector General of HHS has prepared what it calls a “case study” of the failures with Healthcare.gov and the 40 months that preceded its rollout.

    The IG reviewed several thousand internal documents and interviewed dozens of HHS, CMS, and contractor personnel to find the culprit. And it wasn’t the butler who did it or Colonel Mustard with the pipe in the study. The solution is much more elementary, dear Watsons.

    It was Big Government, in the bureaucracies, with unaccountability.

    The report’s executive summary notes, “The development of Healthcare.gov faced a high risk of failure, given the technical complexity required.” Perhaps, but the report fails to note that several insurance companies operated similar web portals on their own prior to Obamacare’s launch.

    The primary complicating factor for Healthcare.gov was its planned connection to the IRS database for income verification needed to calculate the taxpayer-provided subsidies that supposedly made Obamacare insurance affordable at all. 

    obamacareThe lack of that functionality forced CMS to remind consumers to keep updating their income estimates to prevent overpayment of subsidies, which triggers penalties when completed tax returns are factored in.

    In fact, the IG case study notes, “The income estimates of half of consumers were too low during the first year of enrollment and these consumers consequently owed income taxes for 2014 following the first year of reconciling estimated to actual income.”

    The actual problem in Obamacare’s execution was leadership, not technology. “Most critical was the absence of clear leadership, which caused delays in decision making, lack of clarity in project tasks, and the inability of CMS to recognize the magnitude of problems as the project deteriorated,” the IG found.

    Competing visions of the project and a move inside the hidebound bureaucracy of CMS stunted innovation.

    Even the supposed “tech surge” was actually an emergency reorganization designed to streamline the bureaucracy that had choked off productivity. “CMS didn’t need a technological surge,” one official told the IG. “We needed an organizational surge.” The IG report makes that stunningly obvious.

    It found that repeated warnings to bureaucrats had an interesting effect – they “became desensitized to bad news about progress … CMS leadership and staff took little action to respond to warnings, remaining overly optimistic about the launch, and developing few contingency plans.”

    Warnings came in abundance, The Washington Post’s Amy Goldstein reports, including “a series of 11 scathing reviews from an outside consultant — among them a top-10 list of risks drawn up in the spring of 2013” --  months before CMS knowingly rolled out a failing system.

    Of course, this covers ground from two years ago. What about today? As Goldstein notes at the end of her coverage, CMS has finally begun to roll out the back-end payment system that the Obama administration insisted was just weeks away as early as spring 2014.

    Cathey Park of Cambridge, Massachusetts wears a cast for her broken wrist with Two years later, that functionality finally exists, but only as a pilot program. Transfers of account information between insurers and consumers still gets described as one of the “ongoing challenges” of Healthcare.gov, despite its core consideration in efficient data management.

    But that’s not all, either. As it turns out, the IG isn’t the only sleuth looking into mayhem on the Obamacare Express. The Government Accountability Office conducted an audit of the system and discovered that CMS hasn’t bothered to build in oversight to combat subsidy fraud.

    According to NBC News, eligibility for subsidies gets determined by information passing through a “data services hub” that accesses systems in “federal agencies such as Social Security, IRS, and Homeland Security to verify their personal details.” CMS has no oversight in place to analyze and track this information even though it authorizes payments of billions of dollars in subsidies.

    The bureaucracy “has assumed a passive approach to identifying and preventing fraud,” according to the GAO report. The Obama administration admitted to the problem, two and a half years into paying those subsidies, but that’s all they do. House Energy and Commerce Chair Fred Upton called this response “unsettling … the agency has no urgency or plan to fix these critical errors.”

    Any insurer who failed this badly at setting up a web portal for its products, and who two years later still didn’t have anti-fraud protection in place, would be as bankrupt as the Obamacare co-ops that collapsed this year.

    We have spent hundreds of billions of dollars just to discover that government isn’t terribly good at creating consumer-products marketplaces, and flat-out terrible at running a business and accounting for outcomes, while eliminating any potential competition.

    Opponents of the Obamacare takeover of the health-insurance markets predicted this all along, so don’t expect us to feign surprise at the big reveal of the culprit. No one sincerely surprised by these outcomes really doesn’t have a Clue.   

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    Hillary Clinton

    There is good reason former Secretary of State Hillary Rodham Clinton is embracing Obamacare while others in both parties are running away from it.

    Her success so far – including presidential primary victories in South Carolina and a half dozen other southern states – have hinged on strong support from African American and Hispanic voters.

    Clinton on Super Tuesday picked up two-thirds or more of the black vote in states including Alabama, Arkansas, Georgia, Tennessee, Texas and Virginia, while Sen. Bernie Sanders of Vermont was winning the white vote and younger Americans.  

    Even though critics of the Affordable Care Act claim it is killing jobs and driving up insurance premiums and co-payments, blacks and Hispanics have emerged as the biggest winners under President Obama’s signature program.

    The administration announced on Thursday that about 20 million Americans have signed up for health insurance through Obamacare since 2010. Most of them have purchased government subsidized insurance on state or federal exchanges or through expanded Medicaid coverage.

    During that period, the uninsured rate has dropped by more than 50 percent among African Americans and by more than 25 percent among Hispanics, according to the government’s figures.

    That means that about three million African-Americans and four million Hispanic adults have gained health care coverage for the first time in recent years. 

    “We have seen progress in the last six years that the country has sought for generations,” Health and Human Services Secretary Sylvia Mathews Burwell said in a statement. “Americans with insurance through the Health Insurance Marketplace or through their employers have benefited from better coverage and a reduction in the growth in health care costs.”

    A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October 2, 2013 photo illustration. REUTERS/Mike Segar The new report also showed that 6.1 million uninsured young adults ages 19 to 25 obtained health insurance coverage because of the ACA. This was an especially important development, according to officials, because the program’s long-term success depends in part upon attracting younger, healthier people to leaven the overall cost of coverage. These coverage gains for young people began in 2010 because of a provision of the new law that allows children to remain on their parent’s health insurance plans until they turn 26.

    Joseph Antos, a health care expert with the American Enterprise Institute, described the sharp decline in the uninsured rate among minorities and young people as “startling” and “good news.”

    But he cautioned in an interview Friday that “we can’t be 100 percent certain” of the administration’s new figures because “people have a tendency on the exchanges to stop paying their premiums or never start paying,” and that there is also turnover within the Medicaid program for low-income people.

    “I would wait until the Census Bureau puts out its numbers in August or September to see what actually happened,” he added. “One of the problems with these statistics from the exchanges is that they are frankly guesswork when it comes to Medicaid. It’s really very difficult to come up with a number that you can take to the bank.”

    Obama announced the new figures yesterday during an appearance in Milwaukee to promote the Affordable Care Act. During a speech, Obama called out Republican lawmakers and presidential candidates for seeking the repeal of the 2010 law without advancing a serious replacement plan.

    “Congressional Republicans have tried and failed to repeal or undermine it about 60 times,” he said. “They’ve told you what they’d replace it with about zero times. They sure won’t tell you what would happen if they actually did repeal it. If they got their way, 20 million people would have their insurance taken away from them.”

    Clinton has echoed this theme in defending Obamacare on the Democratic presidential campaign trail. Besides her broadsides against Donald Trump and other GOP candidates, she has repeatedly attacked Sanders for his single-payer “Medicare for all” proposal that she says would undercut Obamacare and badly set back progress in health care.

    black voteClinton is promising to build on Obamacare by using tax credits and other measures to lower costs that still prevent many Americans from obtaining health care coverage. The former New York senator and first lady also favors imposing a cap on out-of-pocket drug costs and seek faster Food and Drug Administration approval of generic drugs.

    “I don't want us to start over again,” Clinton said recently in opposing Sander’s single-payer proposal. “I think that would be a great mistake, to once again plunge our country into a contentious debate about whether we should have and what kind of system we should have for health care.”

    Sanders, the self-described democratic socialist, denies that he is trying to undermine the Affordable Care Act, which he helped enact. He says that even with Obamacare, there are still tens of millions of Americans who remain uninsured and who deserve coverage under a national health care plan similar to those in Canada and Europe. 

    “Every major country on earth, whether it's the U.K., whether it's France, whether it's Canada, has managed to provide health care to all people as a right, and they are spending significantly less per capita on health care than we are,” Sanders said. “So I do not accept the belief that the United States of America can't do that.”

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