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The latest news on Obamacare from Business Insider

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    Birth control

    WASHINGTON (Reuters) - The U.S. Supreme Court on Wednesday will consider appeals by Christian groups demanding full exemption on religious grounds from a requirement under President Barack Obama's healthcare law to provide health insurance covering contraceptives.

    The court was set to hear a 90-minute oral argument on seven related cases focusing on whether nonprofit entities that oppose the requirement for religious reasons can object under a 1993 U.S. law called the federal Religious Freedom Restoration Act to a compromise measure offered by the Obama administration.

    The 2010 Affordable Care Act, dubbed Obamacare, was passed by Congress over unified Republican opposition. It is considered Obama's signature legislative achievement. Conservatives have mounted numerous legal challenges to the law, with the Supreme Court in 2012 and 2015 issuing high-profile rulings leaving it intact.

    Among the groups challenging the requirement is a Colorado-based order of Roman Catholic nuns called the Little Sisters of the Poor that runs care homes for the elderly.

    The case will be heard by eight justices, with the court one short following the Feb. 13 death of Antonin Scalia. The court is now divided 4-4 between liberal and conservative justices without Scalia.

    The Christian groups object to a compromise first offered by the Obama administration in 2013. It allows groups opposed to providing insurance covering contraception to comply with the law without actually paying for the required coverage.

    Groups can certify they are opting out of the requirement by signing a form and submitting to the government. The government then asks insurers to pick up the tab for the contraception.

    The challengers contend the accommodation violates their religious rights by forcing them to authorize the coverage for their employees even if they are not paying for it.

    The case represents an uphill battle for the challengers, who lost all seven cases now before the Supreme Court in lower courts.

    Scalia, a conservative Roman Catholic, was considered a reliable vote for the religious groups. In 2014, he was in the majority when the court ruled 5-4 that family-owned companies run on religious principles, including craft retailer Hobby Lobby Stores Inc, could object to the provision for religious reasons.

    If the four conservatives who sided with Scalia in that case remain unified, the best result the challengers could get would be a 4-4 split. That would leave in place the lower-court rulings favoring the Obama administration.

    Among other challengers are: Bishop David Zubik and the Roman Catholic Diocese of Pittsburgh; the Roman Catholic archdiocese of Washington, D.C.; Priests for Life; and East Texas Baptist University.

    A ruling is due by the end of June.

    (Editing by Will Dunham)

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    A woman explains healthcare benefits 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

    WASHINGTON (AP) -- The web portal used by millions of consumers to get health insurance under President Barack Obama's law has logged more than 300 cybersecurity incidents and remains vulnerable to hackers, nonpartisan congressional investigators said Wednesday.

    The Government Accountability Office said none of the 316 security incidents appeared to have led to the release of sensitive data on, such as names, birth dates, addresses, Social Security numbers, financial information, or other personal information.

    Most of the incidents over nearly 18 months seemed to have involved electronic probing by hackers. offers subsidized private health insurance for people who don't have access to workplace coverage.

    Although GAO said the administration is making progress, its report concluded that security flaws "will likely continue to jeopardize the confidentiality, integrity and availability of"

    Investigators identified weaknesses protecting sensitive information that flows through a key part of the system, called the data services hub. Operating behind the scenes, the hub pings federal agencies such as Social Security, IRS and Homeland Security to verify the personal details of consumers.

    The report also found "significant weaknesses" in health insurance sites operated by states, which connect to the data hub. Currently, 12 states and Washington, D.C., run their own websites.

    Federal computer systems — from the Defense Department to the White House — are frequent targets for hackers. The incidents took place between October 2013 and March 2015.'s data hub is one of the administration's major technology projects, and has generally been regarded as successful. Even as the consumer-facing part of the system crashed during the botched rollout of the health care law in 2013, the hub continued to operate smoothly.

    However, GAO said it found shortcomings, including insufficiently tight restrictions on "administrator privileges" that allow a user broad access throughout the system, inconsistent use of security fixes, and an administrative network that was not properly secured.

    Overall, 41 of the security incidents involved personal information that was either not properly secured or was exposed to someone who wasn't authorized to see it. Nearly all of those were classified as having a moderately serious impact.

    In another type of incident, a list of government-employee account IDs, including passwords, was transmitted to staffers in an unencrypted email. That prompted a crash effort to create new passwords.

    The report was released by Republican committee chairmen in the House and Senate on the sixth anniversary of the Affordable Care Act, even as the administration was talking up the achievements of the law, which has extended coverage to millions previously uninsured. Lawmakers asked the administration for more detail on security issues.

    In a formal response to GAO, the Health and Human Services department said the security and privacy of consumer data is a top priority. The administration accepted the agency's recommendations for improvements.

    Separately, GAO said it also submitted 27 cybersecurity recommendations in a report that isn't being made public due to its sensitive nature.

    Join the conversation about this story »

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

    Expanded health insurance coverage under the Affordable Care Act, President Barack Obama's signature legislative legacy, will cost the government more, according to an official study released Thursday.

    Still, on balance, the measure more than pays for itself.

    The nonpartisan Congressional Budget Office said the health care law will cost $1.34 trillion over the coming decade, $136 billion more than the CBO predicted a year ago.

    That 11 percent hike is mostly caused by higher-than-expected enrollment in the expanded Medicaid program established under the law.

    All told, 22 million more people will have health care coverage this year than if the law had never been enacted, CBO said. The measure's coverage provisions are expected to cost $110 billion this year.

    The number of uninsured people this year is anticipated at 27 million.

    About 90 percent of the U.S. population will have coverage, a percentage that is expected to remain stable into the future.

    The study also projected a slight decline in employment-based coverage, although it will remain by far the most common kind among working-age people and their families.

    Employers now cover some 155 million people, about 57 percent of those under 65. That's expected to decline to 152 million people in 2019. Ten years from now, employers will be covering about 54 percent of those under 65.

    CBO said part of the shrinkage is attributable to the health care law: some workers may qualify for Medicaid, which is virtually free to them, and certain employers may decide not to offer coverage because a government-subsidized alternative is available. (Larger employers would face fines if they take that route.)

    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 NicholsonBut the agency also noted that employer coverage had been declining due to rising medical costs well before the health care law was passed, and that trend continues.

    The analysis underscores the view that the health care law is driving the nation's gains in insurance coverage, which raises political risks for Republicans who would repeal it.

    Taking seniors covered by Medicare out of the equation, the government devotes $660 billion to subsidizing health care for people under 65, including the Medicaid program for the poor and disabled and tax benefits for employer-provided health insurance.

    The budget office did not provide a new estimate of Obamacare's overall impact on the federal deficit, other than to say that it is, on net, expected to reduce the deficit. The law included a roster of tax increases and cuts in Medicare payments to hospitals and other providers to pay for coverage expansion.

    obamacareThe Obama administration said the report shows that the law is working to cover the uninsured and that the cost projections, when viewed in context, remain positive.

    "It's important to appreciate that the (health care law) is not just about some race to meet a given number of enrollees," spokesman Aaron Albright said in a statement. "It is about health care in America for all of us as we go through life ... affordable insurance is not out of reach because of costs or a pre-existing condition."

    CBO is a congressional agency that does budget forecasts and cost estimates of legislation.

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    There won’t be enough new doctors to continue providing care for the aging American population over the next decade, according to a new report released Tuesday by the Association of American Medical Colleges. 

    The report projects that by 2025 there will be between 61,700 and 94,700 fewer doctors than patients will need.

    Among primary care physicians alone, there will be a shortage of between 14,900 and 35,600 doctors.

    The group also highlighted shortages in the numbers of new psychiatrists and surgeons, which could pose problems for the mentally ill and older patients who require additional care for chronic conditions and age-related maladies.

    “These updated projections confirm that the physician shortage is real, it’s significant, and the nation must begin to train more doctors now if patients are going to be able to receive the care they need when they need it in the near future,” AAMC president and CEO Darrell Kirch said in a statement.

    A third of practicing physicians are now older than 55. Their retirement, alongside the aging population is a primary driver of the shortage, according to the AAMC, which has called for an increase of federal support for new doctor training.

    The report finds that demand for physicians will grow by 11 percent to 17 percent through 2025, while the number of doctors will increase only by 4 percent to 12 percent.

    In addition to the aging of both doctors and the general population, other factors driving the shortage include increased demand for medical services due to Obamacare, and the rising cost of malpractice insurance and getting a medical degree, which are pushing some current and future doctors to explore different career paths.

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    fred upton paul ryan obamacare

    File this one under “We’ll believe it when we see it,” but Republican members of the House of Representatives are insisting that sometime soon, they will be producing the GOP’s alternative to the Affordable Care Act.

    If that sounds familiar, it’s because Republicans have been promising that an alternative to Obamacare is just around the corner for more than six years, now. But that didn’t deter Rep. Fred Upton (R-OH), who chairs the House Energy and Commerce Committee from telling The Hill newspaper this week that this time the party is really, really close.

    Upton, a member of a small task force tapped by House Speaker Paul Ryan to deliver an alternative to President Obama’s signature domestic achievement, urged reporters to “give us a little time, another month or so” adding that by then they will be “pretty close to a Republican alternative.”

    Promising to do away with the Affordable Care Act has been part of the Republican catechism since it was signed into law in 2010, but the task became infinitely more complicated once the bill took effect in 2014, and people began receiving care. Nevertheless, some individual members of Congress have actually proposed replacements.

    Last year, House Budget Committee Chairman Tom Price, offered a plan to replace Obamacare with a system based on tax credits and insurance portability. However, it failed to collect much support from his fellow Republicans.

    In early 2014, three Republican senators, Richard Burr of North Carolina, Tom Coburn of Oklahoma, and Orrin Hatch of Utah proposed a plan to scale back Obamacare and eliminate the individual mandate -- a move that arguably could have killed the law entirely. It also went nowhere.

    Later in 2014, House Majority leader Eric Cantor had to concede that there wouldn’t be a replacement plan coming out of the House of Representatives that year. Months later, he was defeated in a primary election and retired from Congress.

    In fact, promises to produce a viable Republican replacement for the Affordable Care Act have been so frequent that for healthcare reporters like Huffington Post’s Jeffrey Young, they’ve become a years-long running joke.

    The history of failure to deliver on past promises may not even be the biggest reason to doubt that the GOP will deliver a plan soon. Upton told reporters that his task force is still in “listening” mode and is in discussions with many different experts.

    Even if the goal is a proposal, not an actual piece of legislation, the likelihood that a small task force could write up a plan to fundamentally reshape the enormous US healthcare sector in the space of a few months is exceedingly small. But the Republicans have always seemed oddly optimistic about their ability to get rid of Obamacare somehow. After all, the chances of President Obama signing a law to gut the his signature legislation were always zero; but that didn’t stop the GOP from holding dozens of votes aimed at producing bills that would have required just that.

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    Obama sad frown

    The country's largest healthcare company is getting out of the Obamacare business.

    United Healthcare, which currently covers the most Americans in the US (pending the proposed Anthem-Cigna merger), said in its quarterly earnings release on Tuesday that it is removing its offerings from almost all Affordable Care Act exchanges by 2017.

    "The smaller overall market size and shorter-term higher risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis," said CEO Stephen Hemsley in the company's quarterly earnings conference call.

    "Next year we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017. We continue to remain an advocate for more stable and sustainable approaches to serving this market and those who rely on it for their care."

    The company had previously said that it was reviewing offering plans through the ACA exchanges, but this is confirmation that the company will remove nearly all of its products come 2017 to remove any financial impact.

    The exchanges are state-by-state marketplaces that allow Americans to compare and sign up for now-mandated health-insurance coverage.

    Hemsley said that the cost of offering coverage was too high, as those who gained insurance through the exchange were less healthy and thus the company paid out more claims.

    "So as we look at it, the early indications on the health status of the members appears to be a little bit worse," said UnitedHealthcare CFO Daniel Schumacher.

    In total, the company expects to lose $650 million on people covered through the exchanges in 2016 after losing $475 million in 2015, according to Schumacher.

    The company has also noted that younger people, who are healthier and on net pay into the system to help cover older, less healthy members are not signing up through the exchanges. This is hurting revenue and making it less attractive to the healthcare companies.

    According to Hemsley, the company covers 795,000 people through the exchanges as of the end of the March 2016 and at the end if the year he expects to cover 650,000.

    SEE ALSO: GUNDLACH: If Trump wins the Republican nomination, he'll win the White House

    AND: Calls for the demise of Obamacare 'may be premature'

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    NEW YORK (Reuters) - UnitedHealth Group's decision to exit most of its Obamacare health insurance exchanges next year means rivals will need to raise prices further to prop up an unprofitable business, healthcare analysts and policy experts said on Tuesday.

    The largest U.S. health insurer's move would likely reduce consumer choices, particularly in states where UnitedHealth has been one of only a handful of players to offer insurance under President Barack Obama's healthcare law, they said.

    Large pullbacks by providers like Anthem and Aetna are unlikely as they each await approval from the administration for proposed merger deals with smaller rivals, some analysts said.

    Spokespeople for Aetna and Anthem declined to comment on Tuesday.

    UnitedHealth is one of the biggest sellers of Obamacare plans, offering them in 34 states in 2016. The company warned in November that it was losing too much money on the business due to low enrollment and high service costs. On Tuesday, it said it would exit all but a handful of those markets.

    Many of the estimated 650,000 UnitedHealth plan members at the end of 2016 would need to find another insurer.

    "You will see significant rate increases for 2017 as the (health) plans try to figure out what is a premium at which (they) can make money," said Caroline Pearson, senior vice president at research firm Avalere Health.

    The government provides income-based tax credits to most exchange users, which would help soften the blow from any higher premiums, she said.

    "In terms of viability of the exchanges, I don't think that this is going to affect that in the long term," said Yevgeniy Feyman, deputy director of health policy at the Manhattan Institute for Policy Research.

    Even if other insurers decided to leave, he said, he could not envision the exchanges being so unprofitable that they ceased to work.

    A recent Kaiser Family Foundation study found UnitedHealth's departure would leave only one insurer in 29 percent of the 1,855 counties where it offered health plans. The report found that if United had not participated in the exchanges in 2016, the national weighted average benchmark "silver" plan would have been about 1 percent higher in 2016.

    Republican lawmakers have repeatedly sought to repeal the Affordable Care Act, also known as Obamacare, which provides tax credits to help uninsured individuals buy medical coverage. They have said it creates unwarranted government intervention in personal healthcare and have warned that insurers would be left to cover sicker and older individuals.


    Tough business

    U.S. health insurers including Aetna and Anthem have also lost money on the exchanges, but have not said they would exit. The Obama administration estimates more than 12 million people signed up for private insurance on the exchanges for 2016.

    Insurers are in the midst of submitting proposed premium rates for 2017 ahead of mid-May deadlines set by state exchanges and insurance regulators.

    Aetna Chief Executive Officer Mark Bertolini has questioned whether the Obamacare business was sustainable, but said he was working with the government to improve it. Anthem CEO Joseph Swedish has said that the company was committed to the exchanges.

    "I would still be surprised if other major insurers followed United's lead. United was in some sense in a category all its own," Kaiser Family Foundation Senior Vice President Larry Levitt said. 

    Health plans sold to individual members represented a small part of UnitedHealth's revenue compared to large-scale contracts with employers, while Aetna and Anthem both had substantial business serving individuals.

    Aetna and Anthem are undergoing a U.S. Department of Justice review of what would be an historic consolidation in the health insurance industry. Aetna has proposed buying rival Humana Inc, while Anthem has agreed to buy Cigna Corp.

    (Editing by Michele Gershberg and Richard Chang)

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    Immigrants, low-income workers and racial minorities saw big gains in health care coverage in 2014, the first full year in which the Affordable Care Act was in effect, a New York Times analysis revealed Tuesday.

    Nearly one-third of the newly insured adults were Hispanic, and coverage rates soared for low-wage workers such as cooks, hairdressers, and cashiers. 

    Immigrants — including more than one million non-citizen residents — saw the largest surge in coverage rates, the Times reported.

    The health care law’s effectiveness has typically been measured by the amount of newly insured people, which was last tallied at 20 million as of February 2016.

    The Times analysis, which examined 2014 census data, determined the demographic breakdown of the newly insured.

    “The law has clearly reduced broad measures of inequality,” Harvard economics professor David Cutler, who was an adviser to President Obama during the 2008 campaign, told the Times. “These are people who blend into the background of the economy. They are cleaning your hotel room, making your sandwich. The law has helped this population enormously.

    Two-thirds of the country’s newly insured adults were minorities. Of the 1.2 million non-citizens who gained coverage, 60 percent were Hispanic and around one-third were Asian. The law also helped cover high rates of part-time workers and residents with only a high school education.

    The Times’ findings are significant given the context of 2016’s election, as both parties vie for Hispanic and minority votes. The health care law — which passed in 2010 without the help of Republicans and was later upheld by the Supreme Court in 2012 and 2015— remains a hotly disputed piece of legislation which each of the Republican presidential candidates have promised to repeal.

    affordable care act supporters

    The law still has hurdles to clear. Some Americans still cannot afford coverage, and the Pew Research Center’s Mark Hugo Lopez told the Times that the vast majority of the country’s 11 million undocumented immigrants remain uninsured.

    Furthermore, 19 states have refused to expand their Medicaid programs to cover the poor, as per the Supreme Court’s 2012 ruling. This disproportionately affected the coverage rates of black residents, the majority of whom live in those states that have refused the expansion, according to the Pew Charitable Trusts. 

    The New York Times full analysis can be found here»

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    President Obama's landmark Affordable Care Act was seemingly dealt a huge blow Tuesday when the nation's largest insurer by number of people covered, United Healthcare, announced it was leaving the state exchanges in all but a "handful" of states.

    These exchanges are the cornerstone of Obamacare, which provides a marketplace for Americans who don't have work insurance offering coverage to them and their families.

    While it would appear that United Health's exit would radically change the game for the ACA exchanges, the impact may not be that significant.

    For one thing, United Health never really entered these marketplaces head first. In fact, as of March 31, the company insures only 750,000 of the more than 12 million people enrolled in Obamacare.

    In fact, according to the nonpartisan Kaiser Family Foundation, which focuses on healthcare policy, the impact on enrollees' premiums and competition would not be substantial.

    "The effect of a United withdrawal nationally would be modest," said a study by Cynthia Cox and Ashley Semanskee of Kaiser. "The national weighted average benchmark silver plan would have been roughly 1% higher in 2016 had United not participated (less than $4 per month for an unsubsidized 40-year-old)."

    Cox and Semanskee found that United offered mostly high-cost plans in just 34 states in the US as of 2016, so by removing itself from the exchanges the impact would not be as significant as you may think in terms of increased cost or limited choice.

    In terms of competition, if United does remove itself from all exchanges Cox and Semanskee found that 53% of all counties covered by exchanges would have only one or two exchanges. While this is significant, most counties with limited options are more rural and less populated. Therefore, the total number of people with limited choice is still relatively low.

    Here's Cox and Semanskee (emphasis added):

    If United exits everywhere (again, with the exception of Harken Health in Georgia), the number of Marketplace enrollees with access to only one or two exchange insurers would increase (from 1.9 million to 3.8 million or from 15% to 30% of all enrollees), and the number of enrollees with only one insurer would also increase (from 303 thousand to 1.4 million or from 2% to 11% of all enrollees).  Still, the vast majority of Marketplace enrollees (8.9 million or 70% of enrollees nationally) would continue to have a choice of three or more insurers, even in the absence of United.

    8862 figure 22

    This isn't to say that there won't be an impact on some people trying to gain health insurance through exchanges. As the researchers note, the move will disproportionately impact those in rural areas in some Southern states. But, in aggregate, the removal of United from Obamacare isn't a massive shift for costs or competition.

    "On average nationally, based on our analysis of 2016 insurer premiums, United’s participation on the exchanges had a relatively small effect on premiums,"concluded the study.

    "As a result, the weighted average benchmark premium would have been roughly 1% higher had United not participated in 2016 (not accounting for the possible effect changes in insurer participation may have had on pricing behavior or the potential for new entrants to the market)."

    Now, as Cox and Semanskee note, the long-run effects of this move are a bit more uncertain. Insurers in communities with less competition could begin raising prices, but there are some provisions in the ACA that would prevent that. 

    Also, the impact of the move politically is another issue entirely. Republicans have been calling for the end of Obamacare since it was passed, so the optics of United Health's move are up for debate.

    In the short-run, it doesn't appear that United Health's decision to pull out of the exchanges will make a huge difference for most Americans.

    For a state by state breakdown of how United Health's move could impact you, check out the full post at the Kaiser Family Foundation website »

    SEE ALSO: The country's largest healthcare company is getting out of the Obamacare business.

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    monopoly money

    Income inequality is a huge problem in the U.S., but overall income is actually going up.

    In comparing income increases across three generations among whites, African Americans, and Hispanics, a new Brookings report suggests American incomes actually rose in 2013 and 2014.

    "The facts may not fit the narratives of Donald Trump, Ted Cruz, or Bernie Sanders, but they do help explain why President Obama's job approval and favorability ratings have finally passed the 50 percent mark,"writes Robert Shapiro, a senior fellow of the McDonough School of Business at Georgetown University.

    Shapiro's research into Census data found millennials saw the biggest gains overall — not surprising, according to the author, since younger households "have been the group with the fastest-rising incomes" for decades, and "the recent period is no exception."

    White millennials saw 2.9% growth, African Americans saw 3.0% growth, and Hispanics saw 3.2% growth.

    In fact, at every age cohort, Shapiro notes, Hispanics had the fastest-growing incomes of the three ethnicities. He attributes the prosperity to the 2.5 million net new jobs created in 2013, the 3 million in 2014, and the cash subsidies Obamacare offered to low-income households.

    graphics income chartOne of the more surprising findings was that 2013 and 2014 were good years for people without a high-school diploma. Gen Xers and Baby Boomers without a diploma made more progress raising their incomes than people who'd gotten a diploma. Millennials were the only group that didn't see the trend, Shapiro notes.

    After several years of decline, the incomes of those without high-school diplomas began to rise 3.1% in 2013 and 2014. Those with a high-school diploma, however, saw 5% gains over the same period.

    The data doesn't offer any insights about income inequality, however — only the average rise and fall of the entire group.

    Once the Census data for 2015 comes out in a few months, Shapiro expects to see even more hopeful data.

    "We already know that the economy created another 2.65 million new jobs in 2015," he explains. "If, as expected, the broad income progress seen in 2013 and 2014 persists in 2015, it will rebut much of the economic message touted by Trump and badly weaken Sanders's critique of Hillary Clinton."

    Even after November's election, the progress will be felt in millions of households across America.

    SEE ALSO: There's an even better solution to poverty than a $15 minimum wage

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    obama smile tux

    Obamacare was dealt a huge image blow on April 19 when United Healthcare announced that it was pulling its plans from all but a "handful" of the state exchanges set up by the Affordable Care Act.

    Despite United Health's move, however, any idea that it could be the end of the ACA is greatly exaggerating the impact.

    As we've noted before, for many consumers there should be very little increase in premiums or choice on the exchanges. So those shopping for health coverage on the exchanges will likely not even notice.

    The longer-term worry, according to Cynthia Cox of the Kaiser Family Foundation, would be that it could create a question over the viability of the exchanges.

    "The biggest question for everyone is 'How does this change the game?'" Cox, a researcher at the nonpartisan firm, told Business Insider. "What this says about the exchanges more broadly could have more effects on the market down the road."

    How the future of the it plays depends on three groups: insurance companies outside of United Health, possible enrollees, and politicians. While Cox said it's hard to calculate the exact moves of these groups, in the end the viability of the law probably isn't in question.

    "There are some signs that [Obamacare] is going to be sticking around for awhile," said Cox.

    Insurance companies

    The biggest long-term fear after the United Health departure is that other insurers would also exit the exchanges, leaving little competition and making the exchanges incredibly unattractive for consumers.

    "It's obviously symbolic for United to exit the exchanges," said Cox. "Their withdrawal raised the question of whether or not other companies were going to drop out."

    Based on the response immediately following the exit, however, Cox doesn't se any other businesses ditching the ACA.

    doctor patient

    Other large insurers such as Cigna and Anthem expressed their commitment to the marketplace. Centene, which covers more than 10 million nationwide, is actually going to invest further into the programs after making a solid profit from the exchanges.

    "Even a smaller insurer like Wellcare is possibly getting into exchanges in places like Iowa now that United is out," said Cox. "It's almost like one door closing and a number of other doors opening in terms of insurance companies."

    Even United Health itself may come back to the exchanges according to Cox. One of the biggest problems was that the company was offering higher cost plans in the exchanges, which are very sensitive to price. 

    "It may be that United takes a year or two to re-do their model and the re-enter after they develop lower cost, competitive plans," said Cox.

    Strike doom and gloom for insurance companies off the list.

    Everyday Americans

    The second domino that is concerning is the possibility that fewer people see the exchanges as a real option.

    Enrollment numbers are already underwhelming, and the worry is that even more people won't enter the exchanges since there will be fewer options after United Health departs.

    "One possible thing to consider is that enrollment isn't getting to its targets already," said Cox. With undershot enrollment already and possible discouragement, this could make the exchanges less profitable for companies, causing them to pull out like United Health.

    Or as Larry Levitt, a Senior Vice President at Kaiser, wrote in a recent blog post:

    Aside from investors, few people are likely to shed tears over insurance companies losing money.But they should, since the availability of affordable insurance is key to the success of the marketplaces and the ACA more generally. Unlike UnitedHealthcare, the health insurance marketplaces are core markets for these BCBS plans, so they’re likely to stick around. However, the losses suggest that bigger premium increases may be coming for 2017

    The thing is, United Health only insures a little over 700,000 of the 10 million people on the exchanges, and is not in a large number of markets. Also, a large majority of areas still have three or more insurers to choose from.

    Screen Shot 2016 04 29 at 11.42.22 AM

    In terms of the low existing enrollment, Cox believes that a combination of continued outreach by the government and private companies along with a little financial pain will spur more sign ups.

    "The full penalty from the mandate hasn't hit yet," said Cox. "It won't be until this year that people will pay the full penalty for not having health insurance, and even then it doesn't show up until their taxes in 2017 after the enrollment period is over."

    Even analysts at Citi believe that the penalties and other incentives to sign up will drive enrollment, and say it could be a "profitable end market" for many insurers.

    obamacare protest


    The real x-factor here is the political risk.

    Republicans have been clamoring for a repeal to Obamacare almost as soon as it was passed, and with an election on the way it is only going to get louder.

    "There's certainly a political risk there," said Cox. "About half the country supports it as a law, and with the election is it sure to be a topic of conversation."

    In the back pocket of President Obama and Democrats, however, are recent Supreme Court victories holding up various parts of the law. That means in order to overturn the law, Republicans would need to pass a bill and hope for a Republican victory in the presidential election in order to not receive a veto.

    The risk there depends on how you forecast of the voting in November. 

    In the end, Cox concluded that so far the ACA has accomplished a significant number of its goals.

    It's been through stumbles, so it's too soon to say it has been a resounding success," said Cox.

    And with that, outside of political risk, it is unlikely the exchanges or Obamacare are going away anytime soon.

    Concluded Cox, "A lot of the concern over the end of the law has been exaggerated."

    SEE ALSO: This is the cost impact of the nation's largest insurer leaving Obamacare

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

    The desire for autonomy and work-life balance is driving more workers into freelance roles, but at the same time there are growing incentives for companies to employ workers via contracts rather than hire them full-time.

    Chief among those incentives is the cost of providing (or not providing) health care to workers under the Affordable Care Act.

    Nearly three-quarters of companies said that they would contract with more freelancers this year because of Obamacare, according to a new survey by online work platform Field Nation and executive development firm Future Workplace.

    Last year, companies spent an average of $12,591 on healthcare for workers with family coverage, according to the Kaiser Family Foundation; that's up 54 percent over the past 10 years. This year, companies with more than 50 employees face a penalty of at least $2,160 per worker if they don't provide adequate coverage. 

    As freelancers begin to make up a greater share of the workforce, companies are focused on having them work as seamlessly as possible with staffers. Employers cited teamwork as the most important skill they look for in freelancers, although about a third said freelancers often lacked that skill.

    Businesses said that they evaluate their freelancers based on project results and teamwork, with rewards including bonuses and more money on future contracts.

    Meanwhile, nearly three-quarters of freelancers say that they would now prefer to either freelance or own a small business rather than working in a traditional full-time job. Among the freelancers surveyed, 40 percent said they liked freelancing because it gave them more control over their time. 

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    Donald trump flagAnd there shall be a great wailing and gnashing of teeth …. again. 

    Once again, movement conservatives have gone into a Republican presidential primary season arguing that the time had come to nominate a true follower of the faith. For the second time in a row, the party has chosen a moderate from the northeast instead.

    This time, conservatives cannot console themselves that voters didn’t have an option, as Ted Cruz managed to survive almost to the end as the alternate to Donald Trump. 

    For that matter, other movement conservatives fared even worse. Governors Scott Walker and Bobby Jindal had track records of successful conservative reforms in both governance and in education, and dropped out long before the first ballot was cast in the primaries. Jeb Bush, who had some baggage with his family name but also had a history of conservative governance, garnered a huge donor base and did next to nothing with it. The only Tea Party conservatives left in the race after the first rounds in the primary were the two with the least experience – Cruz and Marco Rubio; Rubio dropped out after less than two months. 

    Instead of choosing a movement conservative or a candidate who could claim to be at least close to it, voters selected Donald Trump as the last man standing in the Republican primary. After winning Indiana convincingly by over 183,000 votes, Trump saw his last two rivals exit the race within 24 hours. Cruz, who thought that the conservatives in Indiana would rally to his banner, withdrew almost immediately after the polls closed; John Kasich waited until the next afternoon. 

    This demonstrates a hard truth for movement conservatives: they and their movement no longer matter in the Republican Party. And they may not have mattered for a while. 

    Evidence for this can be found in the exit polling in many states, but Indiana’s data speaks well enough to this. A third of all Republican primary voters identified as “very conservative,” but 45 percent of those voted for Trump, not Cruz. Another 44 percent identified as “somewhat conservative,” and 55 percent of those voted for Trump, too. 

    This took place just days after declaring his conservatism irrelevant. “I’m a conservative, but at this point, who cares?” Trump commented at the California Republican Party convention. “We’ve got to straighten out the country.”

    donald trump california republican convention

    Conservatives may scoff at hearing this, arguing that conservative policies and principles offer the only path to “straighten out the country.” However, Trump’s statement resonates with voters, especially those in swing states, who have tired of intellectual arguments far removed from the reality of their lives, and want pragmatic solutions for the issues facing the country, and especially their communities. 

    That message came through loud and clear in research for my book Going Red, which focuses on how Republicans have to engage swing counties in order to start winning presidential elections. The same lessons apply to the conservative movement -- perhaps even more strongly. For too long, conservatives have failed to engage in local communities, and to apply principles in practical ways that build relevance for conservatism into the lives of everyday people. 

    On top of that, conservatives even at the national level have failed to offer solutions for issues that touch the lives of voters. Perhaps no better example exists than Obamacare. Conservatives in Congress, led in part by Cruz himself, have repeatedly voted to repeal the Affordable Care Act, and Cruz led an ill-considered partial government shutdown in order to “defund” the president’s signature health care law. 

    After six years of attacking the program, conservatives have done little to curtail it, let alone stop it – mainly because they lack the power to do so, a detail that they avoided while making lots of foolish promises about forcing Obama to jettison Obamacare in 2010, 2012, and 2014. 

    Ted Cruz

    Even worse, they have offered no coherent solution as a replacement. The debate over the ACA began almost seven years ago, and health insurance access had been a controversial issue for 15 years prior to that. Republicans and conservatives have spent seven years opposing the law, but still have not come up with an alternative that addresses the issues that prevented many from accessing health insurance – cost, pre-existing conditions, and availability. They promise a plan will come this summer … maybe

    People in swing counties see Republicans, and especially the conservative factions within it, as the party of no, not the party of solutions. Opposition parties and movements have to say no, but to succeed they have to find ways to get voters to say yes as well.

    Fortunately, conservatism is not destined for irrelevance. Some conservative organizations – Americans for Prosperity chief among them – have eschewed electoral politics and philosophical rhetoric in favor of community engagement. They make themselves part of their communities, offer real assistance to people while contextualizing free-market economics as the solution for the lives of those who live there. 

    An explosion of regulatory activity at the federal level now has Washington encroaching on the businesses and lives of more Americans than ever, the cost for which the Competitive Enterprise Institute estimates as $15,000 a year for every US household. That gives even greater opportunities for small-government conservatives to offer specific solutions that will improve the lives of people in a direct and concrete manner. 

    Conservatism has to be more than a debating society. It has to offer practical improvements, and in order to do that it has to engage people where they live. For too long, the conservative movement has mainly argued philosophy and employed obstructionism while assuming the rest of country understood the stakes. As this primary has demonstrated, even many self-identified conservatives have tired of ideology and all-or-nothing politics. 

    Until the conservative movement rolls up its sleeves and does the hard work of engaging voters and applying solutions rather than slogans, the reaction from voters they desperately need will continue to be, “Who cares? We have to straighten out the country.”

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    U.S. House Speaker Paul Ryan (R-WI) (R) hands the pen to Representative Tom Price (R-GA) (L) after signing a bill repealing Obamacare at the U.S. Capitol in Washington January 7, 2016. REUTERS/Jonathan Ernst

    A U.S. judge on Thursday ruled in favor of congressional Republicans who challenged the Obama administration's implementation of President Barack Obama's healthcare law.

    Washington-based U.S. District Judge Rosemary Collyer, appointed by Republican former President George W. Bush, ruled that the administration, in implementing the law known as Obamacare, cannot spend funds that Congress did not appropriate. The ruling will not have an immediate effect on the 2010 law because the judge stayed the ruling pending appeal. 

    (Reporting by Lawrence Hurley; Editing by Will Dunham)

    SEE ALSO: 9 prominent Republicans are backing Donald Trump — here's what they used to say about him

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

    WASHINGTON (AP) — In a setback for the Obama health care law, a federal judge ruled Thursday that the administration is unconstitutionally subsidizing medical bills for millions of people while ignoring congressional power over government spending.

    The ruling from U.S. District Judge Rosemary Collyer was a win for House Republicans who brought the politically charged legal challenge in an effort to undermine the law.

    If the decision is upheld, it could roil the health care law's insurance markets, which are still struggling for stability after three years.

    Collyer said her ruling would be put on hold while it is appealed. The White House expressed confidence it would be overturned.

    At issue is the $175 billion the government is paying to reimburse health insurers over a decade to reduce deductibles and co-payments for lower-income people.

    The House argues that Congress never specifically appropriated that money and has denied an administration request for it. Collyer agreed that the administration is exceeding its constitutional authority by spending the money anyway. She rejected the administration's argument that the law authorizes the money automatically because the program is considered an "entitlement" like Social Security, Medicare and Medicaid.

    House Republicans launched the lawsuit in 2014 over Democrats' objections. The GOP-led House had already voted dozens of times to repeal all or parts of "Obamacare," but those efforts went nowhere, failing to overcome opposition from Senate Democrats and the president.

    So the House turned its focus to tying up money spent on the law. Republican House leaders asserted that the Obama administration couldn't spend money that lawmakers refused to provide.

    House Speaker Paul Ryan called the decision "an historic win for the Constitution and the American people."

    "The court ruled that the administration overreached by spending taxpayer money without approval from the people's representatives," he said in a statement.

    Paul Ryan


    White House spokesman Josh Earnest said that House Republicans ultimately would lose the case.

    "This suit represents the first time in our nation's history that Congress has been permitted to sue the executive branch over a disagreement about how to interpret a statute," Earnest said.

    "It's unfortunate that Republicans have resorted to a taxpayer-funded lawsuit to refight a political fight that they keep losing," Earnest added. "They have been losing this fight for six years. And they'll lose it again."

    The administration is expected to appeal Thursday's ruling to the U.S. Court of Appeals for the District of Columbia Circuit, where a majority of active judges have been appointed by Democrats.

    Collyer was appointed to the district court by President George W. Bush, a Republican.

    About 12.7 million people are covered through insurance markets created by President Barack Obama's law. The disputed subsidies help lower-earning customers afford out-of-pocket costs, such as annual insurance deductibles and co-payments when they seek medical care.

    These subsidies, called "cost-sharing reductions" are separate from the financial aid provided under the law to help people pay their monthly premiums, which would not be affected.

    But that doesn't make the cost-sharing subsidies any less important. Without them, millions of people may not be able to afford to use their health insurance.

    Here's why: The most popular policies are skinny plans with low monthly premiums but high deductibles and copayments. The average annual deductible for a silver plan — the kind picked by about 7 in 10 customers — is nearly $2,900, according to the consulting firm Avalere Health.


    Under the law, insurers have to provide cost-sharing assistance to consumers picking a silver plan who make up to two-and-a-half times the federal poverty level, which is $60,750 for a family of four.

    The government is then required to reimburse insurers for the cost of the subsidies. The administration maintains that's automatically authorized, and it doesn't have to go back to Congress for approval each year.

    But Collyer rejected that argument, saying appropriating the money is up to lawmakers. "That is Congress' prerogative," Collyer wrote. "The court cannot override it by rewriting" the law.

    If congressional approval is required, Congress' GOP majority can just shut off the spending. And if that happens, the administration says the only option insurers have would be to raise premiums significantly.

    However, more insurers might just decide to bail out of the health law markets. Major companies already are struggling to make money on the program.

    The White House had earlier argued that the House had no legal authority to pursue its lawsuit, but Collyer rejected that argument and allowed it to proceed.

    In another case last year, the Supreme Court threw out a challenge to the law's subsidies for premiums. The legal issues in that case were much different.

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    obamacare protest

    Remember the now-infamous promise made by President Barack Obama when pushing the Affordable Care Act, better known as Obamacare? “If you like your plan,” the president repeated on dozens of occasions, “you can keep your plan.”

    When millions of Americans got thrown off of their existing health-insurance plans in the fall of 2013, PolitiFact called it the Lie of the Year.

    Obama ended up apologizing for the lie in an interview with NBC News’ Chuck Todd in November 2013, even if he couldn’t quite bring himself to admit that it was a lie.

    “We weren’t as clear as we needed to be in terms of the changes that were taking place,” was as far as Obama’s contrition went.

    Almost three years later, there is little evidence of any more contrition on that failure, or others in Obamacare for that matter. Earlier this week , Charlie Rose interviewed three former Obama speechwriters on a variety of topics. After discussing their work on lighter-topic speeches, Rose asked whether they felt they had an impact on Obama’s more serious addresses. Jon Lovett replied that he felt most proud of his impact on “the most serious speeches – health care, economic speeches.”

    That prompted his colleague, Jon Favreau, to interject. “Lovett wrote the line about ‘if you like your insurance, you can keep it,” he said, as the panel erupted in laughter. “How dare you!” Lovett shot back in mock indignation. “And you know what?” he asked as the laughter continued. “It’s still true … no.”

    Are incompetence and deceit humorous? Perhaps in the Obama administration, the answer might be yes. For the rest of us, especially those who find themselves stuck between a federal tax mandate and an insurance market that has narrowed as significantly as its costs have skyrocketed, no is the correct answer.

    In fact, those two dynamics continue to this day, despite promises that the ACA markets would stabilize after the first two or three years and would eventually “bend the cost curve downward.” Consumers have their plans cut out from underneath them each year as insurers have either pared back plans or exited exchanges altogether as Obamacare’s economic model continues to fail. At the same time, premiums and deductibles have continued to skyrocket, and tax subsidies cannot hide the impact on families.

    What was promised as more “choice” is becoming fewer choices as UnitedHealthcare and now Humana begin to pull out of certain regions. An AP story in 2014 reported that of the 19 nationally recognized cancer centers that responded to a survey, only 4 reported access through all Obamacare insurers. Last month, Blue Cross Blue Shield released a report warning that costs under the president’s plan are unsustainable – fully 22 percent higher than people covered by employers. And The Hill reported that Obamacare insurers lost money in 41 states in 2014, which could determine whether big companies like Aetna stick with it.

    As the fourth year of Obamacare approaches, Politico’s Paul Demko reports that consumers can expect more of the same price hikes and narrowed choices as they have seen the first three years. The Obama administration insists that prices only rose eight percent for 2016 over the previous year – even though that itself is still more than three times the rate of inflation, and ignores states like Minnesota where the average premium increase was over 30 percent.

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

    “There are reasons to think the next round may be different,” Demko warns. He quotes a Deloitte executive who agrees. “A number of carriers need double-digit increases” for 2017. Those price increases will hit the Obamacare exchanges on November 1st, one week before voters elect a new President and Congress.

    Kaiser Health News reports that 2017, far from being the year that stabilizes the Obamacare exchanges, will be another “adjustment year” for the risk pools. Even the director of Covered California expects to see higher rate increases in the fourth year of Obamacare than previously seen, although Peter Lee shrugs off the risk for his own exchange. “There are a number of reasons 2017 will have higher rate increases than the last few years,” Lee tells KHN. “But we believe in California we won’t see the significant headwinds many other states are experiencing.” However, Lee would not answer when KHN asked if UnitedHealth Group had applied to participate in Covered California for 2017.

    This brings us back to the ability to keep one’s plan. UnitedHealth has made clear its intentions to exit most of the state Obamacare markets next year, and California may well be one of them. A more troubling exit looms on the horizon – the exit of all insurers from the lowest-cost bronze plans.

    One BlueCross BlueShield subsidiary in Virginia has already filed plans to get out of the bronze plan, according to Inside Health Policy, and other insurers will follow suit if BCBS succeeds. That will destabilize the markets further, as one analyst told Leslie Small at Fierce Health Payer, because most of the younger and healthier participants in these risk pools have chosen bronze plans – and would likely bail out rather than pay higher premiums for insurance that they hardly ever use. However, that will force others who wish to comply with the mandate to once again lose their plans, and force them into finding other, more expensive coverage.

    In other words, if consumers like their third different plan in three years, many of them won’t be able to keep that one, either. Needless to say, they won’t be laughing. Perhaps they will be voting instead.

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    president barack obama lip bite

    Over the past few years the public sector has not contributed much, if anything, to GDP and the US economy's growth.

    There is one implemented policy, however, that appears to be helping.

    Aneta Markowska, an economist at Societe Generale, broke down just how consumers are spending their money that they have saved since the drop in oil prices.

    The largest increase in consumer spending since gas prices have dropped, according to Markowska, has been on healthcare.

    "In nominal terms, household spending on healthcare averaged 3.9% between 2010 and 2013," wrote Markowska in a note to clients Thursday.

    "It began to accelerate in the first half of 2014 and has averaged at 5.2% since then. Importantly, this pickup in healthcare spending was not driven by higher costs; real spending in this category accelerated from 1.9% in 2010-2013 to 3.9% thereafter."

    This would indicate that Americans have been not only been spending more because of increased costs, but also intentionally allocating more of their wallet to the sector.

    To match the increased spending, the healthcare sector's labor market has also been booming.

    "Employment data also corroborates this: as shown in chart 3, the healthcare sector produced about 240,000 jobs per year between 2010 and mid-2014," said the note. "Since then, it has averaged at 354,000/year and the sector is currently producing about 500,000 jobs annualized."

    Screen Shot 2016 05 12 at 5.09.02 PM

    Now there are a few reasons for the increase, the most notable of which is the passage of the Affordable Care Act, or Obamacare. Markowska notes that the growth in real spending closely matches the 4% increase in the number of Americans with health insurance since the implementation of the Affordable Care Act in 2012.

    Part of the increased spending no doubt has to do with the number of people spending more on insurance who did not have it before, but also higher spending on drug prescriptions.

    This increased consumer spending and labor availability is a net positive for the economy, according to Markowska.

    "So, although increased demand for healthcare may have squeezed other forms of spending, it did produce positive economic effects," said the note from Societe Generale.

    This is just one piece of Obamacare's impact. There are many other factors going into it and nominal spending on healthcare premiums is certainly worth considering, but, according to Markowska, there is reason to believe the bill has been helpful to the US economy.

    SEE ALSO: Even with the nation's largest insurer leaving, Obamacare isn't anywhere near dead

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

    The U.S. Supreme Court on Monday threw out lower-court rulings that had required Christian employers to comply with a mandate in President Barack Obama's healthcare law to provide female workers insurance covering birth control, but ducked a major ruling on the merits of the case.

    The court's unanimous action represented at least a short-term victory for the nonprofit employers, primarily Roman Catholic organizations, because it tossed out rulings in seven different cases that had endorsed the contraception mandate. The decision forces the lower courts to reconsider the dispute.

    "The court expresses no view on the merits of the cases. In particular, the court does not decide whether petitioners' religious exercise has been substantially burdened," the unsigned ruling stated.

    In a separate order, the court also sent six other cases on the same issue back to lower courts.

    The compromise decision indicated that the court, which is evenly divided with four conservative justices and four liberals following the death of conservative Justice Antonin Scalia in February, wanted to avoid a 4-4 split in the case. Such a decision would have affirmed the lower-court rulings that favored the administration but would not have provided a decision to be applied nationwide.

    Mark Rienzi, a lawyer for the Little Sisters of the Poor, an order of Roman Catholic nuns that filed suit against the Obama administration, said he was "very encouraged by the court’s decision, which is an important win for the Little Sisters."

    The justices in previous decisions since 2012 had fended off other major conservative challenges to the Obamacare law, considered President Barack Obama's signature domestic policy achievement.

    obamacareThe dispute before the justices involved seven consolidated cases focusing on whether nonprofit entities that oppose the contraception mandate on religious grounds can object under a 1993 U.S. law called the Religious Freedom Restoration Act to a compromise measure offered by the government.

    The justices declined to decide whether the accommodation crafted by the Obama administration in 2013 to ensure that the employees receive contraception coverage violates their employer's religious rights.

    The decision was announced by Chief Justice John Roberts. The court said it was opting against ruling on the merits in part because of "the gravity of the dispute and the substantial clarification and refinement in the positions of the parties" in recent weeks.

    Justice Sonia Sotomayor, joined by Justice Ruth Bader Ginsburg, wrote a concurring opinion stressing the narrow nature of the decision. Lower courts should not view the ruling "as signals of where this court stands," she wrote.

    supreme court justicesAfter the oral argument in the case on March 23, it appeared the court could split 4-4, with liberals backing the government and conservatives supporting the challengers.

    In an unusual move six days after the oral argument, the court asked both sides to file additional briefs outlining possible compromises, indicating the justices were motivated to avoid a deadlock.

    “We are disappointed that the court did not resolve once and for all whether the religious beliefs of religiously affiliated non-profit employers can block women’s seamless access to birth control," said Gretchen Borchelt, vice president for reproductive rights and health at the National Women’s Law Center.

    (Reporting by Lawrence Hurley; Editing by Will Dunham)

    SEE ALSO: Ben Carson spilled the beans on Donald Trump's possible vice presidential picks

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    Some lawmakers are still seething over an administration decision nearly two years ago that has shortchanged the Treasury of billions of dollars by shifting the funds to an obscure Obamacare program aimed at protecting insurers against major losses.

    The so-called Transition Reinsurance Program was designed as a three-year experiment to help guard against major premium hikes by offsetting the high cost to insurers of providing health care coverage to the least healthy Americans.

    Essentially, it helps to “smooth out losses” for insurance companies operating in the Obamacare individual market.

    But a tax imposed on all insurers in the country to fund the TRP and simultaneously bolster the U.S. Treasury has proven to be grossly inadequate. And an agency of the Department of Health and Human Services decided in 2014 to shift most of the funds to the reinsurance program without consulting Congress.

    The diversion of billions in funds is the latest in a series of controversies around the Affordable Care Act’s operations and funding.

    Earlier this month, United Healthcare, the nation’s largest health insurance company, said it was pulling out of most of the ACA exchanges where it currently operates by 2017 because of serious losses. And a multitude of financial and management problems forced nearly half of the original 23 non-profit insurance coops out of business by late last year.

    Earlier this month, Republicans on a House Energy and Commerce subcommittee grilled HHS official Andy Slavitt concerning his agency’s decision to divert funds away from the Treasury, which some denounced as an insurance industry “bailout” that comes at the expense of taxpayers.

    Subcommittee Chairman Rep. Tim Murphy (R-PA), argued that decision was unlawful because the Affordable Care Act specifically states that the Treasury would receive funding, according to the Morning Consult.

    “The administration cannot rewrite its own law to make it more convenient for special interests,” Murphy said. “This is a dangerous precedent and is an affront to the separation of powers. . . Moreover, this program funnels money to insurers — now with money intended for the Treasury — in an attempt to prop up Obamacare.”

    A new legal opinion prepared by former GOP White House Counsel C. Boyden Gray for the conservative, free-market Galen Institute, concludes that Slavitt’s Centers for Medicare and Medicaid Services is diverting $3.5 billion to insurance companies it was “legally obliged to remit to the Treasury.”


    The letter – reported this week by Forbes – said, “By the time the books close on TRP for the 2014 and 2015 benefit years at the end of 2016,” insurers eligible for reinsurance “will likely have received 98 percent of expected payments” – or $15.6 billion out of an expected $16 billion.

    By contrast, the Treasury will likely have received only 12 percent of expected payments, or just $495 million out of an anticipated $4 billion, according to the letter.

    TRP is one of three special programs created under the Affordable Care Act to protect the financial interests of the health insurers that ventured into a new and untested market.

    The so-called “risk corridor” program was designed to limit losses or gains beyond an allowable range. Insurers that made more than the allowable gains were obliged to return part of it to the program, while companies that badly underestimated their coverage costs could dip into the fund to avert losses.

    But Sen. Marco Rubio of Florida and other congressional Republicans criticized the risk corridors as another industry bailout and forced sharp cuts in the program’s funding over the past two years. Last October, the administration had no choice but to provide 12.6 percent of the $2.87 billion that insurers were seeking to offset losses.

    The controversy over the TRP is different because it relates to efforts to hold down premiums and it involves revenues raised by taxing the entire health care industry, not just those insurers taking part in Obamacare.

    Slavitt, the acting director of the Centers for Medicare and Medicaid Services, defended his agency’s decision to divert Treasury funds to the TRP during his appearance before the House subcommittee this month.

    Slavitt, who was not at CMS when the decision was made, told lawmakers that it is common for federal agencies to update regulations as officials learn more, according to Morning Consult.  While insisting that the agency did indeed have the legal authority, he conceded that the statute was unclear as to what officials should do if the reinsurance pool wasn’t as large as expected.

    Joseph Antos, a health care expert with the American Enterprise Institute, said on Tuesday that the controversy highlights the “porousness” of the Obamacare reinsurance provision. “If the administration gets away with this, the process will become hollow.”

    “The number was written into law, so it shouldn’t have been confusing at all, and the policy action wasn’t taken,” he said in an interview. “In other words, the money never got to the Treasury.”

    He said that Gray’s analysis was essentially right, but that he doubted the controversy would be resolved this year, before the election. 

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    obama obamacare doctors

    Prices for the average health-insurance plan under the Affordable Care Act have been taking off lately, and this year is no different.

    Linda J. Blumberg, John Holahan, and Erik Wengle at the Robert Woods Johnson Foundation and Urban Institute, decided to find out just how much prices increased between the 2015 and 2016 enrollment periods and why.

    First off, the researchers said using a national aggregate didn't make much sense as a way of understanding how and why premium prices were increasing because of the variance of the exchanges where the insurance plans are offered.

    "We conclude that a national average rate of premium increase is a fairly meaningless statistic since different markets are having very different experiences," the report said.

    "The focus of attention should be on understanding the wide variability by identifying the characteristics of markets that have experienced high premiums or high growth in premiums and of markets with lower premiums or lower growth in premiums."

    Only five states saw a decrease in premium cost this year, while 12 states had increases of more than 20% on average. The states with the biggest changes are predominantly in the Midwest, but almost every region got hit with price jumps.

    The variance is startling. The largest increase came from Oklahoma, which saw premium prices surge 41.8% this year, while on the other end Indiana's prices decreased by 12.1%.

    In all, about 48% of the US population lives in areas where prices decreased or increased by less than 5%; 26.3% of the population lives in areas that had an increase of more than 15%.

    obamacare premium map

    The researchers found a variety of reasons for the discrepancy in prices, but the biggest difference-maker was competition.

    "However, the most important factors associated with lowest-cost silver plan premiums and premium increases are those defining the contours of competition in the market," the report concluded. "Rating areas with more competitors had significantly lower premiums and lower rates of increase than those that did not."

    The paper also found that there was one player that had more of an effect on prices than any other provider.

    "Those rating areas with a Medicaid insurer competing in the marketplace also have lower premiums and lower rates of increase than those regions without a Medicaid insurer competing," Blumberg, Holahan, and Wengle said.

    This is an issue as insurance companies evaluate the profitability of the state exchanges. With considerable political pushback against expanding Medicaid, private insurers will have to carry most of the load and provide competition.

    The nation's largest insurer, United Healthcare, has already dropped out, leaving more (though not significantly more) Americans with one or two choices. If other insurers were to take a similar tact, though unlikely, it could cause an even further increase in prices.

    SEE ALSO: Obamacare is nowhere near dead

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