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The latest news on Obamacare from Business Insider

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    Obama shadow

    Aetna, one of America's largest insurers, has decided to roll back much of its health-insurance plans offered through the Affordable Care Act (ACA), aka Obamacare.

    According to a filing from the company, it will stop doing business in roughly 70% of the counties in which it offers plans through the public exchanges set up by the ACA. This will lead to only 20% of the lives Aetna insures through the exchanges covered come 2017.

    Based on the 838,000 lives insured through public exchanges at the end of the second quarter, this means that only 167,600 people who have Aetna's Obamacare coverage will be able to keep it next year.

    There is a chance, however, that even those people will be forced to change plans no matter what. It all hinges on a deal to combine Aetna and Humana.

    In a letter to the US Department of Justice uncovered by Huffington Post reporters Jonathan Cohn and Jeffrey Young, Aetna CEO Mark Bertolini outlined the company's plans to roll back much of its Obamacare business if the DOJ blocked a proposed merger with rival Humana.

    In late July, the DOJ decided to file a lawsuit to stop the merger of Aetna and Humana, which contributed to the decision to roll back its ACA offerings.

    According to an Aetna representative, the DOJ ruling has affected business, since there will be costs involved in fighting the lawsuit and synergies from the deal would not be realized.

    While Aetna said that it believes the deal will eventually be approved, there would be larger consequences if it is not.

    "If the Humana transaction is eventually blocked, which we don't believe it will be, the underlying logic of our written response to DOJ would still apply with regard to the public exchanges where we will participate in 2017," said the representative.

    This appears to be in reference to a line from Bertolini's original letter to the DOJ, which stated (emphasis added):

    "Finally, based on our analysis to date, we believe it is very likely that we would need to leave the public exchange business entirely and plan for additional business efficiencies should our deal ultimately be blocked."

    In other words, if the deal with Humana dies on the vine, so does all of Aetna's public-exchange business.

    SEE ALSO: Now we know the real reason why Aetna bailed on Obamacare

    Join the conversation about this story »

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    obama obamacare doctors

    Some healthcare providers may be steering patients toward Obamacare instead of Medicare and Medicaid, according to a release from the Centers for Medicare and Medicaid Services, or CMS.

    CMS, the government organization in charge of Medicare and Medicaid, solicited public comment on Thursday for instances in which healthcare providers, such as doctors and treatment centers, misled people toward policies on the public exchanges set up by the Affordable Care Act.

    "The request for information and letters to providers focus on situations where patients may be steered away from Medicare or Medicaid benefits, which can among other concerns, result in beneficiaries experiencing a disruption in the continuity and coordination of their care as a result of changes to their network of providers,"a CMS release said.

    Healthcare providers typically earn more from the Obamacare plans than from Medicare and Medicaid; thus, it is more profitable to direct patients toward Obamacare plans.

    "We are concerned about reports that some organizations may be engaging in enrollment activities that put their profit margins ahead of their patients' needs," Andy Slavitt, the acting administrator of CMS, said in the release.

    One of the largest issues with the public exchanges set up by the Affordable Care Act is that healthier people have not been signing up for Obamacare plans, leaving the pool of people paying into the system older and sicker. This makes the exchanges unprofitable for many insurers.

    While the CMS solicitation does not name particular providers, it is likely that the regulator heard of such activities before asking for public comment. CMS also said it was thinking about possible enforcement action against providers undertaking the practice.

    "In particular, CMS is looking at authorities to impose civil monetary penalties on healthcare providers when their actions result in late enrollment penalties for Medicare-eligible individuals who are steered to an individual market plan and, as a result, are delayed in enrolling in Medicare," the release said.

    This news comes in the same week that Aetna, one of the nation's largest insurers, announced that it would pull out of 70% of the counties in which it offers Obamacare plans because of a $200 million loss on the exchange business in the second quarter.

    SEE ALSO: AETNA: Here's what it would take for us to abandon Obamacare

    Join the conversation about this story »

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    obama sad frown

    It has not been a good week for the Affordable Care Act (ACA), better known as Obamacare.

    A slew of news, from insurers dropping out to possible fraud among healthcare providers, has all accumulated in a deluge of negative headlines for one of President Obama's signature laws.

    In fact, it's gotten so bad that it appears that the whole program itself may be in doubt.

    While there are issues, and this past week highlighted many of them, it does appear that there is a long road ahead before we have a definitive understanding of Obamacare's survival, and there's a good chance that it makes it.

    Obamacare's terrible, no good, very bad week

    On Monday night, Aetna announced that it would be dropping around 80% of their policies offered through the ACA's public-health exchanges after sustaining large losses on the Obamacare business.

    This makes Aetna the third of the "big five" insurance firms (which includes Humana, United Health Care, Cigna, and Anthem) to announce a serious cut to their Obamacare business.

    Whether Aetna did this due to business losses, as the company claims, or because of the Department of Justice's lawsuit blocked their merger with Humana is still up for debate, but regardless, the firm will be out of nearly all of the exchanges by 2017.

    In addition to the Aetna news, the New York Federal Reserve put out a study Tuesday that showed one out of every five businesses in the bank's district — which includes parts of New Jersey and Connecticut — said they were reducing hiring due to Obamacare.

    On top of all of that, the Center of Medicare and Medicaid Services (CMS) asked for public comment on instances in which healthcare providers directed patients to Obamacare over Medicare or Medicaid in order to make higher profits.

    All in all, not a great week.

    'This goes against the whole idea of insurance'

    The biggest news was obviously the announcement by Aetna, which also highlighted some of the biggest issues with the ACA's exchanges.

    Aetna lost $200 million pretax in the second quarter on its public exchange, and it is not the only insurer to sustain large losses. For patients, this means that premium costs are also increasing dramatically year-over-year.

    This happened for a few reasons, according to Cynthia Cox of the Kaiser Family Foundation, a nonpartisan healthcare-policy think tank.

    For one thing, the types of people signing up for the exchanges are generally sicker and more expensive to cover than insurers like Aetna expected.

    "A lot of the people signing up currently are expensive to insure, and that's why you're seeing so many companies losing significant amounts of money," Cox told Business Insider.

    This mirrors Aetna CEO Mark Bertolini's statement on the reasons for leaving the exchanges. Bertolini said that the people signing up for Aetna's offer were more "high-cost" than the firm expected.

    obama obamacare doctors

    Jeffrey Anderson, a senior fellow at the conservative Hudson Institute, said that the problem is that there is a high likelihood that no young people will ever sign up for Obamacare.

    "There are too many loopholes, too many ways to get around paying if you don't get insurance," Anderson told Business Insider.

    For this reason, Anderson does not believe that Obamacare will ever work and shows it is in a "slow-motion death spiral." Basically, in his opinion, the only incentive structure to enter the exchanges will be when a person gets ill and needs the coverage. Since the ACA forces insurers to take people with pre-existing conditions, the insurers are forced to take on people they know will be a net negative to their bottom line.

    "This goes against the whole idea of insurance," said Anderson. "You're supposed to pay it in the event that you get sick, not have it only when you are sick."

    Cox, on the other hand, said there is a chance that young people eventually get onto the exchanges once the full tax penalty goes into effect.

    "People haven't seen this show up on their taxes yet, and they won't until April when they file for 2016," said Cox. "There's a good chance that people will see the penalty come and that will push them into the market."

    This would mean that sign-ups in the 2017 enrollment period could be slanted more toward younger people and inspire large companies to come back to the market.

    The only issue, according to Cox, is that the tax hit may not be broken out in returns in such a way that people recognize that the individual mandate was the reason for the hit.

    Screen Shot 2016 08 19 at 4.49.38 PM

    Additionally, according to Cox, there is a second reason that these companies aren't making money: They didn't offer the right plans.

    Some smaller insurers have been able to actually turn a profit on the exchanges, unlike the larger companies. According to Cox, this is mainly because they have experience dealing heavily in government markets like Medicaid and Medicare. In those instances, the profitable companies learned how to keep costs lean and used that knowledge for their Obamacare coverage.

    On the other hand, large insurers are trying to run their exchange business much like employer-sponsored plans, which are more expensive and offer a larger swath of coverage options.

    "It's not so much a size problem, it's the people that have experience with these types of markets" said Cox. "The exchanges are very different from the employer-based plans companies like Aetna and United are used to. Companies that focus more on Medicaid are able to offer low-cost plans people want, but also know how to control costs."

    Possible solutions

    According to both Anderson and Cox, there are a few fixes that can be done to help improve the law and make it more palatable for insurers like Aetna and United Health.

    The biggest is bringing back what is known as the "risk corridors." Essentially, during the first three years of the exchanges, this ensured that companies were spending enough money on patients. It mandated that insurers had to spend 80% of their premium payments on patients.

    If companies spent less, they had to pay into the corridor pool. If they spent more, they could receive money from the pool.

    In practice, this meant that companies that were willing to take on high-cost sick patients could do so while maintaining some profits. For those that only signed up young, healthy people, this penalized them.

    Both Cox and Anderson agreed that some sort of reinstitution and adjustment to these corridors could incentivize more companies to stay in the market and alleviate the losses.

    obamacare premium map

    Anderson also proposed that the link between prices be done away with. Currently, prices for the highest-cost plan (for those with chronic illnesses, that are older, etc.) can only be a certain percentage above the lowest-cost plans for generally healthy people.

    This, in Anderson's opinion, makes it cheaper for sick people and more expensive for healthy people, exacerbating the enrollment issue.

    "You're just totally changing the incentive structure and it makes no sense for anyone that isn't already seriously ill," Anderson told us.

    Making these changes may not be a cure-all, but they could help the law become more sustainable in the future.

    A political football

    Obamacare, however, is also about more than just health insurance. It has become one of the biggest political touch points since President Obama first proposed the law in 2009. In the succeeding seven years, the cries for repeal or change have continued.

    "This doesn't get resolved until either the Republicans win the presidency and both houses of Congress, or the Democrats do," said Anderson.

    If the Republican Party takes ahold of all three pieces of the government, said Anderson, the law is likely to be repealed and a plan, similar to the one he has proposed, would be enacted. If it is the Democrats in control, it would go the opposite way and a single payer, government-run offering could come into play.

    Cox agreed with the polarization and said that the exit of companies like Aetna and other recent issues with the law have raised calls for a government option to be implemented. If the government were allowed to offer a plan, this would be an insurer of last resort and could create competitions with only one private insurer.

    For now, however, with the split legislature and presidential election upcoming, Obamacare appears to be hanging around.

    The uncertain road ahead

    Cox, who previously expressed confidence in the sustainability of Obamacare after United Health's exit, said the fact that so many companies are leaving does raise questions about the future of the law.

    "It is still too soon to say what this is really going to mean," said Cox. "As long as there is one insurer, people will still have access to subsidies and want to buy insurance."

    Anderson, for his part, believes that the current course is "unsustainable" but when it gets a huge shake-up is unclear.

    But for the near future, Obamacare is here to stay, with or without Aetna.

    SEE ALSO: AETNA: Here's what it would take for us to completely abandon Obamacare

    Join the conversation about this story »

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    doctor patient concern worry

    Pinal County, Arizona, right next to Phoenix, was founded in 1875 and is home to roughly 400,000 people.

    It's also the county that Obamacare forgot.

    After Aetna's announcement that it will roll back 70% of its offerings in public exchanges, Pinal County appears to be the only county in the US with a public exchange but zero insurers offering Affordable Care Act plans in 2017.

    This leaves people that need insurance through the ACA in Pinal County with limited options. Currently, Blue Cross Blue Shield of Arizona is participating in the county, but it has plans to pull out in 2017.

    According to Cynthia Cox of the Kaiser Family Foundation, a nonpartisan healthcare-focused think tank, convincing BCBS to stick around seems to be the easiest option.

    "Plan A is to try and work with the Blue Cross Blue Shield in that state or another provider in the state to get them to move in," Cox said. "The question is if there is any plan B."

    The plan B could simply be that there is no exchange offering and people have to buy insurance on their own, but that presents issues as well.

    "If that's the case, it's mostly going to be unaffordable for those who are already receiving subsidies," Cox told Business Insider. "They're no longer going to be eligible for the subsidies, and it is likely that private coverage is not going to be affordable without the subsidies."

    Cox said that these people would not be subject to any penalties under the individual mandate, but if they were injured or got sick during the year, they "could be faced with significant medical bills."

    To be fair, even before Obamacare, many areas of the country had limited options when it came to health insurance, but that probably isn't much relief for people in Pinal County and other places around the US.

    Even if BCBS stays in Pinal County, the situation will be far from ideal.

    The number of insurers available and competing in a market is linked closely to the cost of premiums, and the withdrawals are leaving more and more areas with only one or two insurers. With that sort of monopoly or duopoly, premiums can increase even more than they already are.

    Cox told Business Insider that the situation in Pinal County will likely raise calls for a public option, or a government-run health insurance option similar to Medicare or Medicaid. This would provide an insurer of last resort for a county like Pinal and would drive competition where there are limited private options.

    As it stands now, however, there is no such option for Pinal County and it appears that unless someone steps in, there will be an Obamacare marketplace, but no one selling anything in it.

    SEE ALSO: Obamacare has gone from the president's greatest achievement to a 'slow-motion death spiral'

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    barack obama

    Oscar, the $2.8 billion health-insurance startup, is pulling out of some Obamacare exchanges.

    According to a release from the company on Tuesday, the firm will no longer offer individual market plans through the Affordable Care Act in Dallas, Texas, and New Jersey.

    The release said there were "uncertainties in those two markets that will make it challenging for us to operate effectively and continue to deliver access to quality healthcare to all of our members across the country."

    "We hope to return to these markets as we carry on with our mission to change healthcare in the US," it added.

    The company has set out to revolutionize the way people get their health insurance by simplifying the offerings and making them easily accessible in its online platform. It offers all of its plans through the individual market, though it plans to begin small-group coverage soon, and the firm has embraced the Obamacare exchanges since its inception.

    Despite the attempts at disruption and focus on Obamacare exchanges, it appears to be facing the same challenges that the largest insurance providers — such as UnitedHealthcare, Aetna, and Humana — are facing in the ACA exchanges. Each of those insurers has rolled back a significant chunk of its Obamacare business this year.

    In an interview with Bloomberg's Zachary Tracer, Oscar CEO Mario Schlosser said problems with the exchanges were forcing the firm to focus only on markets the company was comfortable with.

    "The individual market isn't working as intended, and there are weaknesses in the way it's been set up," Schlosser told Tracer. "We want to focus on the markets we understand well. We want to focus on the markets where we have our own model in place."

    Oscar currently covers 7,000 people in Dallas and 26,000 in New Jersey.

    In the release, Schlosser said the company would assist those it currently covers in the two markets to find new plans and expressed concerns over prices in the exchanges.

    "We do not reach these decisions lightly, and will do our utmost to help our members in the affected regions find coverage for 2017," the release said.

    "We also look forward to seeing the individual market stabilize, allowing us to serve more people across the US in a meaningful way, while maintaining affordable pricing for consumers."

    The company said it still planned to expand its offerings to the San Francisco market in 2017. The firm also will continue to offer coverage in New York, San Antonio, Los Angeles, and Orange County, California.

    SEE ALSO: Obamacare has gone from the president's greatest achievement to a 'slow-motion death spiral'

    Join the conversation about this story »

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    Obama scowl

    It's going to be a lot easier for people to pick an Obamacare plan in 2017, if only because there will be fewer to choose from.

    One of the biggest drivers of increased healthcare costs is the lack of competition in some markets. This problem is acutely present for the Affordable Care Act's public insurance exchanges, according to a new study by Avalere Health.

    According to the healthcare consulting firm, the high-profile exits of large insurers such as Aetna, United Healthcare, and Humana have eliminated a significant amount of competition within the exchange market.

    "Nearly 36 percent of exchange market rating regions may have only one participating insurance carrier offering plans for the 2017 plan year and there may be some sub-region counties where no plans are available," Avalere President Dan Mendelson wrote in a post on the study.

    "Nearly 55 percent of exchange market rating regions may have two or fewer carriers."

    Screen Shot 2016 08 24 at 7.40.06 AM

    Avalere went through each of the coverage regions (the size of which can vary by state) and analyzed the current offerings by health insurers in 2016 and the so-far announced offerings for 2017.

    The firm found that there are seven states — Alaska, Alabama, Kansas, North Carolina, Oklahoma, South Carolina, and Wyoming — in which every coverage region has only one participating insurer. This essentially gives the insurer a monopoly and forces patients in that region to accept the premium that company offers.

    Competition in the health insurance market has been a focus of government regulators for some time. One of the main reasons cited by the Department of Justice for blocking the mergers of Anthem and Cigna as well as Aetna and Humana was concern about decreased competition.

    This analysis only takes into account the announced moves from the three companies that plan to roll back their offerings, so there is a chance some insurers may step into the underserved markets.

    As it stands now, however, it appears one of the largest drivers of high healthcare costs for the Affordable Care Act's public exchanges is only getting worse.

    SEE ALSO: For the first time, a county in America has lost all of its Obamacare insurers

    Join the conversation about this story »

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    Obama sad tennessee

    Tennessee's Obamacare market is in serious trouble, according to the person who runs the state's exchanges.

    Julie Mix McPeak, the commissioner for Tennessee's Department of Commerce and Insurance, told Nashville's The Tennessean on Tuesday that increases in premium prices and the dwindling number of insurers in the state are causing serious stress in the state's Affordable Care Act exchanges.

    "I would characterize the exchange market in Tennessee as very near collapse ... and that all of our efforts are really focused on making sure we have as many writers in the areas as possible, knowing that might be one," McPeak said in an interview with The Tennessean's Holly Fletcher.

    "I'm doing everything I can to prevent a situation where that turns to zero."

    Parts of Tennessee have seen the number of insurers offering plans drop significantly, with four of the state's eight exchange rating regions having one or zero choices for insurance companies, according to an analysis from healthcare consulting firm Avalere.

    McPeak is trying to avoid something similar to what is happening in Pinal County, Arizona. After health insurance giant Aetna left the county, it has zero insurers offering plans on the county's ACA exchange. In Pinal County's case, many people who rely on subsidized ACA plans may be left without insurance entirely.

    Like many insurers across the country, those offering plans in Tennessee are losing serious amounts of money on the exchanges, leading to significant premium increases for patients and substantial losses for insurers.

    According to The Tennessean, Blue Cross Blue Shield of Tennessee — the only insurer to offer plans statewide — has lost roughly $500 million from the state's exchanges in the three years since it entered them.

    Essentially, the people signing up for insurance in the exchanges like in Tennessee have been sicker and more expensive to cover than health insurance companies predicted, leading to large losses.

    To avoid these losses, many insurance companies have increased prices dramatically in the state, with BCBST requesting a 62% increase for premiums in 2017 after a 36.3% hike in 2016. Both of the big-five insurers that do business in the state, Humana and Cigna, are also requesting premium increases of over 40% for next year.

    While regulators told The Tennessean that they plan to use a number of tax breaks and other strategies to keep patients' monthly costs from skyrocketing in the state, the huge jumps in the requested headline premiums are hard to ignore.

    Of note, requests must be approved by McPeak's office at the Department of Commerce and Insurance, so the numbers for 2017 are projections.

    While many states face challenges, based on the comments by McPeak, the situation seems to be dire in Tennessee.

    Read the full breakdown of Tennessee's situation at The Tennessean »

    SEE ALSO: One of the biggest problems with Obamacare is only getting worse

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    Obama shadow

    Since the Affordable Care Act – or what many call Obamacare – has been labeled a failure since the day it started, according to some political types, it’s difficult to know if the recent defections by large insurance companies are really a death knell or just growing pains.

    Aetna dropped a bombshell Aug. 15 when it announced that it was pulling back dramatically in the individual market, dropping coverage in about two-thirds of the 778 counties throughout the U.S. in which it has offered coverage.

    UnitedHealthcare announced in April it was pulling out of most Affordable Care Act marketplaces that offer health insurance plans, mostly where there were few enrollees or their market share was very low.

    This has led critics and even those who support the ACA to wonder if this could be the beginning of the end for the ACA.

    The answer is: We don’t know yet, but reports of its demise are greatly exaggerated.

    As someone who has spent years researching health insurance and who has testified before Congress, as well as being CEO of a health insurance company, I hope I can offer some insights that may not have surfaced in recent discussions. Here’s what explains theses defections and what I think all Americans should know about the debate.

    In addition to insurers backing out, Congress has failed to support the law in ways that could help insurers. Congress is supposed to help insurers cover their losses and thus be more likely to stay in the market.

    A new – and complicated – insurance landscape

    Insurers file preliminary premium and plan design proposals with federal and state governments in May of each year for the coming year’s open enrollment. They have until Oct. 1 to finalize these.

    The facts are that almost all insurers on the ACA exchanges pull some of their plans by the October deadline. UnitedHealthcare and Aetna are just more public and extreme than most. This is because insurers have almost no information in May from the current year’s enrollment to know how to set premium prices for the next year.

    The companies state that they end up pulling back because of major losses on some of their plans. That is true. But every company lists more plans in the spring than they intend to offer in November enrollment. This is because of the lack of data in May.

    In other words, as experience reveals actual costs, each company will cut some losing plans. More promising ones survive. This culling is a normal reaction to timing problems imposed by government deadlines. That said, there are also more serious problems behind withdrawals.

    Riskier business

    The fact is that Obamacare is forcing insurers to take on far more risk than they previously did. They must offer insurance to more people who didn’t have health insurance previously. They must cover pre-existing conditions, and they must offer less of a differential among premiums for individuals than ever before.

    Most insurance in the U.S. has been offered through employers, Medicare or Medicaid. Having large numbers of people within a group plan allows insurers to spread the risk among a large group of people. The switch to covering millions of people individually is unprecedented.

    This creates a new landscape for insurance companies, who survive by the balancing of risk among large groups. It is an entirely new business model.

    Think of past experiences in areas devastated by floods or hurricanes, where insurers drop coverage or raise rates. Or, consider your homeowner’s insurance, and the increase in premiums you are charged if you file too many claims.

    A big problem: Congress has not kept its bargain

    paul ryanThere’s another problem that is not often discussed when the insurance companies announce their premiums and their coverage areas. Obamacare offers payments to insurers to offset their losses in covering high-risk individuals. Congress is not living up to this part of the law.

    These payments, called premium stabilization features, are part of the law.

    Republicans in Congress who are opposed to Obamacare, however, last year allowed only 12 percent of the compensation for early losses promised by the ACA.

    The ACA law says insurers are due the full amount, but the courts say any shortfalls must be appropriated by Congress, rather than just taken from other funds. This was adjudicated in the courts after the ACA was passed, and initial premiums were set based on this safety net.

    Because Congress has only allowed 12 percent of the amount due to insurance companies, the premium stabilization features have been insufficient to limit losses as the law envisioned.

    This gap was not anticipated in prior year rates by insurers, but it is built into the premiums this year. That’s part of the reason for the increases.

    This higher risk coupled with enrollment that was less than anticipated and biased toward those with poorer health resulted in much higher than anticipated costs for insurers. Although insurers are in the business of managing risk, it is the unexpected nature of these changes that have made them much more cautious.

    The nature of the insurance market for individuals and the requirement that no one can be turned away creates large and ongoing insurance challenges. Historically, people who posed too high a risk were routinely turned away. Without the ACA, premiums for these previously uninsured people would have to rise to outrageous levels to cover their costs.

    What is affordable, anyway?

    But having everyone in the pool and reducing out-of-pocket costs to “affordable” levels via sliding scale subsidies allows differences in net premiums to vary only by income levels, not age or other normal factors insurers use.

    The “affordable” in the ACA is not based on the gross premiums that are bandied around in the press but net costs after subsidies, as a fixed percentage of income. Net premiums that enrollees actually pay are the objective of the law.

    Affordable premiums range from 2 percent of income at the bottom to 9.5 percent at the top. Subsidies are varied to reach these objectives. Thus, the higher premiums being sought now will result in larger subsidies for most out-of-pocket expenses relative to income.

    The problem is that not all people receive these variable subsidies. Young people have low premiums to begin with since they use little health care and thus have low subsidies, while those in higher age brackets benefit greatly. The problem is that insurance company premiums must rise to reflect the overall risk of the population rather than the lower level for some groups.

    Those with higher incomes not receiving subsidies at all see a net rise in cost. Thus, while most in the market benefit, it is undeniable that some pay more– and they are not happy about it.

    But that’s what insurance is supposed to be all about – sharing the risk across everyone in the insured population. It’s just that we didn’t do that prior to the ACA.

    And all the good things that people actually do like (guaranteed insurability and fixed premiums regardless of age or gender, no preexisting conditions, etc.) aren’t possible unless everyone is in the pool together.

    Are we in this together, or going it alone?

    Fundamentally, this is a clash between the rugged individualist view of self-sufficiency and a collaborative view of the responsibility of the group for shared objectives. You can’t have both, although the ACA tries to balance the two. We have to share the risk, but we still have choice of plans.

    But the balancing act fails when it appears there will not be enough players to provide the choices promised. This is why the loss of choice of plans in many areas of the country is a serious challenge, although a dominant insurer actually may be able to negotiate lower payments from providers and pass it on in lower premiums, as is the case in several states.

    So is the sky falling on the Affordable Care Act or not? Making this model work in all areas of the country has always been a challenge, especially where there is a single hospital or dominant provider system or where one insurer has an overwhelming market share. This is where a “public option” or “Medicare for All” might help keep everyone honest.

    As Medicare is more aggressive about fostering change and efficiency, it may be that the most innovative payer is the government. On the other hand, competition has worked well in most sectors of the economy, although it is less clear the marketing and administrative overhead that comes with it here is worth the gain. This should be the debate – whether we want to provide access to insurance for all – rather than knee-jerk political responses.

    J.B. Silvers, Professor of Health Finance, Case Western Reserve University. This article was originally published on The Conversation. Read the original article

    SEE ALSO: For the first time, a county in America has lost all of its Obamacare insurers

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    Obama doctors Obamacare

    Mylan, the maker of the EpiPen, is embroiled in a controversy over the pricing of the allergy-treatment medicine.

    The company has increased the price of the drug over 500% since 2007, from a list price of $93.88 to $608.81 today.

    This increase drew criticism from lawmakers and even Democratic presidential nominee Hillary Clinton, leading the company to released an announcement defending its business practices on Thursday morning.

    In the release, the company also laid part of the blame at the feet President Barack Obama and the Affordable Care Act, the healthcare law better known as Obamacare.

    Here is Mylan from the release (emphasis ours):

    "Mylan has worked to help patients with commercial insurance pay as little as $0 for EpiPen Auto-Injector using the My EpiPen Savings Card. In 2015, this resulted in nearly 80% of these patients paying nothing out of pocket for their EpiPen Auto-Injector. However, as the health insurance environment has evolved, driven by the implementation of the Affordable Care Act, patients and families enrolled in high deductible health insurance plans, who are uninsured, or who pay cash at the pharmacy, have faced higher costs for their medicine."

    On the firm's quarterly earnings call on August 9, Mylan CEO Heather Bresch also noted the impact of Obamacare on the payment model for EpiPen. Here are Bresch's comments (emphasis again ours):

    "But this point, I think there has been a lot of discussion and some headlines around patients going from paying a copay to now paying the entire cost of a product. And where EpiPen falls, because if you look on an annual basis, as a life-saving drug, to have a WAC [Wholesaler Acquisition Cost] price at just under $600, I think that you can see it falls as not an expensive product.

    "And so when employers were incentivized to increase high-deductible plans through Obamacare, as employers shift more cost to employees and everything's got to come out of pocket before you hit your deductible is where you're seeing a lot of noise around EpiPen."

    Essentially, Mylan and Bresch are arguing that people are noticing the high price of the EpiPen more because they are paying out of pocket through plans with high deductibles, which have high thresholds for out-of-pocket costs before their coverage kicks in.

    It is true that many more Americans are on high-deductible plans. About a quarter of the population now has such plans versus just 4% in 2006. Many of those enrolled on the public exchanges established by Obamacare also have high-deductible plans.

    It is also true that many employers have shifted to high-deductible plans because the costs they were bearing, including higher drug prices for things such as EpiPen, were too high. Half of people in the US receive their insurance through their employer, while 6% buy insurance as individuals, including through Obamacare. Additionally, many employers were shifting to these high-deductible plans even before Obamacare.

    In response to the backlash, Mylan announced on Thursday that it would increase its savings card for people purchasing two-packs of EpiPens to $300 from $100.

    SEE ALSO: The makers of the EpiPen just made a move to try and put an end to growing fury over the drug's price

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    Obamacare has a competition problem.

    The number of insurers in some parts of the country has been decreasing, especially with the loss of major insurers Aetna, Humana, and UnitedHealthcare. The number of pricing regions — areas set by the state regulator that are covered by a particular exchange — with only one insurer is on the rise.

    As more insurers pull out of the public exchanges, concerns grow over how that will filter to consumers. The thought is that lower competition among insurers can lead to higher prices. If there were a monopoly or duopoly, then there would be less incentive to lower costs in order to draw in consumers.

    Based on an analysis by Avalere Health, we've compiled a map of the percentage of pricing regions in each state where there is only one insurer.

    There are seven states — Wyoming, Kansas, Oklahoma, Alabama, South Carolina, Alaska, and North Carolina — where the entire state is down to just one choice. Five other states have at least 50% of their ratings regions offering only one insurer.

    Check below and see how many areas in your state are facing the competition problem:

    obamacare competition problems map

    SEE ALSO: One of the biggest problems with Obamacare is only getting worse

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    obama affordable care act obamacareOn May 20, about a month after UnitedHealthcare, one of the country’s major health insurers, announced that it would pull out of Arizona’s exchanges, Rep. Ann Kirkpatrick wrote a letter asking for help.

    It was addressed to Health and Human Services Secretary Sylvia Mathews Burwell, and in her note Kirkpatrick, who had lost her seat in the Tea Party putsch of 2010 in no small part because of her vote in favor of health care reform, related her concern about the wobblier parts of Obamacare.

    “I represent a sprawling, mostly rural district in Arizona,” wrote Kirkpatrick, the Democratic challenger for Sen. John McCain’s seat this November. “In several counties, United Healthcare is one of only two health insurance carriers selling marketplace plans.”

    After noting that the Affordable Care Act has “significantly dropped the uninsured rate in Arizona,” she addressed the problems it’s still facing. “[W]hat can we do to incentivize insurers to continue participation in the marketplace?” she asked. “How can we ensure that the people in these rural counties have sufficient choices in health care plans?”

    The news in Arizona has only worsened since then. Blue Cross Blue Shield, which had been the only carrier submitting 2017 insurance plans for all of Arizona’s counties—at an average requested premium increase of 64.9 percent—pulled its options for Maricopa County, by far the state’s most populous, and the more rural Pinal County to its south, citing $185 million in losses in the state over two years.

    And last Monday, Aetna, another of the country’s largest carriers, withdrew from markets in 11 of 15 states, including Arizona. Aetna, suddenly bearish on the sustainability of the exchanges where it had recently been so bullish, made the announcement not long after the Justice Department had challenged its merger with the carrier Humana. The timing of the move is now under major scrutiny. Whatever hardball tactics Aetna may or may not have been employing don’t change the fact that it was losing hundreds of millions of dollars on the exchanges (on a market capof some $42 billion) and was seeking consolidation as a remedy. With Aetna and UnitedHealthcare out of the picture and Blue Cross paring back, the competition in much of Arizona, particularly its rural areas, will be sparse or nonexistent in 2017. And unless Blue Cross, sniffing out a monopolistic business opportunity, decides to re-enter, Pinal County will have no insurers offering plans on its exchanges.

    Is Obamacare working? The question assumes a single national program. “There are, in some ways, 3,000 different ACAs playing out across the country, because it’s playing out very differently county by county,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. Some carriers, especially in denser areas, are able to broaden their risk pools and participate in flourishing exchanges, and some, usually the less brand-name ones that offer narrow-network plans at cheap cost, are making profits. Some 12.7 million people signed up for coverage through health exchanges in the 2016 open enrollment period, with many millions more covered under the law’s Medicaid expansion.

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

    But it’s becoming clearer that the Affordable Care Act, for all its advances, is due for the sort of legislative maintenance that most major laws require after implementation. Two temporary federal programs,reinsurance and risk corridors, designed to cushion losses for insurers as they determined sustainable premium price points in new markets, expire in 2017 as the exchanges enter their fourth year of operation. Carriers serving sicker-than-expected pools or rural areas find that their options are either to sharply increase premiums or to leave the exchanges altogether.

    Average premium increase requests from insurers on the individual exchanges are well into the double digits across much of the country. And a Kaiser estimate in May projected the number of counties that could have a single exchange insurer in 2017 to be 664—70 percent of which are mostly rural—up from 225 in 2016. That number will increase following Aetna’s withdrawal and could reach roughly a quarter of all counties in the country. Alabama, Alaska, South Carolina, and Wyomingare set to have just one insurer offering coverage on their exchanges in 2017. Most of North Carolina, except for the Raleigh metropolitan region, will be down to one insurer as well.

    One problem with legislative redress for Obamacare is that the legislators who are supposed to do the redressing seem less than eager to return to the front where not long ago they’d declared victory. The second problem is that, once again, the fight will almost certainly involve the public option.

    You remember the public option, don’t you? It’s exhausting just to recall the debate. Despite the virtues of a government-offered health care plan that, with lower administrative costs, no profit expectations, and the bargaining power of the federal government, would compete aggressively alongside private plans, the debate over it was the scene of much garment-rending and commie-punching last time around. The public option’s ultimate exclusion from the ACA remains, at least in some flawed tellings, the biggest knife President Obama ever stuck in the back of the left. But now both Obama and Hillary Clinton have come out in support of a public option, and the Democratic caucus is not what it was in 2010.

    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

    “The book was really closed on health care reform issues since Obamacare passed,” said Adam Green, a co-founder of the Progressive Change Campaign Committee. The progressive pressure group, Green said, is considering a “big campaign on [the public option] very soon” and released a statement following Aetna’s announcement stressing the need for a public option. Obama and Clinton’s support for the issue, he said, reopened the book. “To have the two biggest figures in the Democratic Party calling for it and a clear villain”—Aetna—“the stars are aligned for a big campaign now.” But are the Democrats ready?

    The ACA is undoubtedly a mixed bag, and mixed bags always make for terrible political discourse. Republicans wield each and every suboptimal data point about the Affordable Care Act’s implementation as concrete proof that the law has failed and must be repealed in full if the republic is to survive, but they offer no replacement plan that comes anywhere close to meeting the ACA’s coverage figures. In the meantime, they refuse to be party to any legislative improvements that might shore up the program and help their rural constituents.

    Many Democrats, meanwhile, are content to hide behind Republican incoherence and nefariousness instead of confronting the shortcomings of their signature legislative achievement. When I spoke with Kirkpatrick in late June and asked what specific policy changes she would propose to prop up the exchanges, she couldn’t name any off the top of her head—though she did point to the letter to demonstrate that she was asking HHS for advisement. Instead she gave me the usual anecdotes about people she’s met whose lives were saved by the coverage they received under the ACA, and how the Republicans want to reverse all of that.

    It’s not that she—or any of the other Democratic Senate candidates I reached out to asking about specific policy remedies they favor, to little response—isn’t aware of the problems or doesn’t care. (In a statement following Aetna’s departure, Kirkpatrick, for example, wrote that she would be “increasing pressure on the administration, state agencies and insurance companies to work together to find a solution.”) But they still largely see the public battle as a foundational one of protecting Obamacare’s existence against a Republican Party that hasn’t accepted its legitimacy. This is a reasonable position—as well as an excuse for ignoring both the law’s problems and certain politically inconvenient solutions. To reopen the book, for many of them, is to reinvite the fury of 2010 that helped end Democratic control of the House of Representatives and left Democrats with a bare majority in the Senate. And the law’s approval rating is still underwater.

    All eyes now are on the 2017 open enrollment period that begins Nov. 1. The key question is how consumers will navigate the large projected premium increases, coupled, in many areas, with fewer options. “If open enrollment goes well and more people sign up, I expect a lot of these current concerns will fade,” Levitt said. “If enrollment for 2017 stagnates, it’s likely to trigger a debate about how to fix the law. And it’s not at all clear where that debate would go.” Republicans will be ready, as always, with their recommendation to toss the whole act. How will Democrats counter?=There is one Democratic figure who might be in office in 2017 who has treated the law’s shortcomings seriously and put together a bevy of health care proposals—and she happens to be the party’s presidential nominee.

    In the beginning of the campaign, Hillary Clinton, too, suffered from the “everything is fine!” bug, going so far as to red-bait Sen. Bernie Sanders over his Medicare-for-all plan. Sanders’ specific proposal suffered from some fuzzy math. But he understood that though the ACA was a vast improvement on an untenable status quo, its flaws really were flaws, and it made little sense to avoid confronting them just because doing so would be a pain. One staple of Sanders’ events during the campaign was to ask members of his crowds to raise their hands if they were facing sharp premium increases, and then to say how large the increase was. There was never a shortage of volunteers.

    Eventually Clinton put together a series of health care proposals. It wasn’t the overhaul Sanders wanted, but he gave his enthusiastic endorsement anyway.Clinton would add a Medicare “buy-in” option for those 55 and older, and she also committed to doubling the money for community health centers from the funding mark set in the original ACA, an important provision won by Sanders in 2009. She offered further inducement for states that haven’t already accepted the Medicaid expansion to do so and would grant the HHS secretary additional “authority to block or modify unreasonable health insurance premium rate increases,” increase resources for enrollment outreach, and expand existing exchange subsidies.

    obamacare competition problems map

    And yes, she’s also pledged to “pursue efforts to give Americans in every state in the country the choice of a public-option insurance plan.”

    It’s unclear how high a public option, and the political fight that will come with it, ranks atop Clinton’s list of priorities. But if 2017 open enrollment goes poorly and more insurers flee the exchanges, the public option—which has always polled well—would be an obvious go-to solution for restoring competition. The idea doesn’t rely on hand-holding private insurers until they feel properly incentivized to perform their societal function. It is a direct delivery of health insurance plans to health insurances exchanges. “Health care markets will inevitably differ from region to region,” Jacob Hacker, the Yale professor and so-called “father of the public option,” wrote in Vox on Thursday,“but there’s no reason every one of the existing marketplaces couldn’t offer a Medicare-like plan—a plan that’s stable; a plan with predictable costs; a plan that gives patients a broad choice of providers just as Medicare does.” It would also save money—$158 billion over 10 years, according to a 2013 Congressional Budget Office estimate.

    Progressives never gave up on the idea of the public option, even after efforts to include it in the original ACA fell short due to a combination of insurance industry pressure and red-state Democratic senators who were all afraid of being called communists and losing their seats if they supported it. (They were all called communists and lost their seats anyway.) That’s one version of the story, at least.

    The rise and fall of the public option is the subject of volumes and volumes of folklore, at least half of which seem to feature Rahm Emanuel (or Obama himself) in the role of the heavy, rapping his brass knuckles against the desk of any Democratic senator who entertained even a fleeting thought about government-sponsored health insurance.The truth, as best it’s been reconciled, is that while President Obama wanted a public option, what he wanted more was to keep industry and his own party’s senators at the table to push a law through. The public option was tradable.

    “They wanted to keep those stakeholders in the room,” former Sen. Tom Daschle, who played a behind-the-scenes role in the crafting and passage of the ACA, recalled in a 2010 interview, “and this was the price some thought they had to pay.”

    Democratic presidential nominee Hillary Clinton speaks at a rally at Truckee Meadows Community College in Reno, Nevada, August 25, 2016. REUTERS/Aaron P. Bernstein/File Photo

    Industry pressure manifested itself through a handful of conservative Democratic senators, all of whose votes were needed to break a filibuster. Sens. Ben Nelson, Blanche Lincoln, Mary Landrieu, Evan Bayh, and others all had their own beefs with the public option, along with other state-specific concerns that were addressed through a series of controversial carve-outs. If one senator in particular deserved “credit” for killing the public option, though, it was Joe Lieberman of Connecticut, the home of Yale University, the Bush dynasty, the original hamburger, and the insurance giants Aetna and Cigna.

    “The last bargain was with Joe Lieberman,” journalist Steven Brill wrote in his 2015 history of the health care reform battle, America’s Bitter Pill. “The Connecticut senator finally got rid of the public option, including a version that allowed individual states to choose to implement it or not.” (Much is made of the public option in the bill that emerged from the House—perhaps too much. In truth it was a half-a-loaf plan that the Congressional Budget Office reckoned would have premiums “somewhat higher” than those of private insurers, not to mention an unhealthier pool of enrollees.) Lieberman was also responsible for the death of another provision that Hillary Clinton has reintroduced this year in her health care plan: the Medicare buy-in for those ages 55 and older.

    Joe Lieberman is no longer a senator. And with the big-ticket exits of UnitedHealthcare, Humana, and now Aetna from so many exchanges, along with the collapse of nonprofit health insurance co-ops across the country, the talk of a nonprofit, government-sponsored health insurance option has been rekindled.

    The most prominent endorsement of new efforts to pass a public option came in the academic Journal ofthe American Medical Association this summer from author “Barack Obama, JD.” “The public plan did not make it into the final legislation,” Obama wrote.“Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited.” It was quite a pivot from the president who could turn snippy when pressed by progressives about the public option’s omission.

    The main problem with Clinton’s plans for a public option, or any other legislative patches to the ACA, or any other legislative patches to anything—the problem with passing legislation, is the point—would be congressional gridlock. But it won’t even get to the point of gridlock and crushed dreams if there’s not enough of an appetite within the Democratic caucus even to try. In a piece last week, Bloomberg’s Jonathan Bernstein surveyed 11 candidates“most likely to become new Democratic senators in 2017.” Only six of the 11 “had a ‘health care’ section on their websites.” Only one, Chris Van Hollen of Maryland, “mentions support for a public option on the issues section of his campaign website.”

    “This is the major option I’m pursuing,” Van Hollen told Slate when asked for legislative remedies to the lack of competition. He supported the public option in the original Obamacare fight, and he supports it now. “The whole purpose of having the public option in the first place was to, number one, create competition in the exchanges and, two, to ensure that there were insurance providers in every market.”

    Van Hollen, from deep-blue Maryland, is as close to a lock in his Senate race as any Democrat this year. He has some room to stretch out his arms. The enthusiasm for a public option among those in closer races in purple states, though, is far more muted.

    When I asked the campaign of Deborah Ross, the North Carolina Democratic Senate candidate seeking to unseat Sen. Richard Burr, whether she would support a public option in light of the limited insurance options in her state, she changed the subject. “I am not for a single payer system, but I do want to improve the ACA by giving consumers more options,” she said in a statement. I am not a communist.I believe it would be bad to move from a private health insurance market to a Medicare-like system. “Moreover,” she continued, “the willingness of Aetna and other insurance companies to abandon folks who need health insurance coverage is just another reason it's a bad idea to give Medicare away to the insurance companies like Senator Burr has proposed.” But I also believe it would be bad to move Medicare to a private health insurance market. The Democratic Senate campaigns of Katie McGinty in Pennsylvania and Kirkpatrick in Arizona did not respond to inquiries about support for the public option. And the Florida Senate campaign of Rep. Patrick Murphy was unwilling to commit to a position on the public option now, even though he did support oneduring his first House race in 2012.

    A trader points up at a display on the floor of the New York Stock Exchange August 20, 2012. Health insurer Aetna Inc said on Monday that it would buy rival Coventry Health Care Inc for $5.6 billion to increase its share of the fast-growing, U.S. government-backed Medicare and Medicaid programs. REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS HEALTH LOGO) - RTR36ZMH

    A lot of politicians are just getting reacquainted with the issue and will have to properly “digest” it now as it’s re-emerging, Adam Green said. “Since 2010, whenever somebody tried to bring up the public option in D.C. Democratic circles,” he said, “the answer was, ‘Yeah, we support that, but first we’ve got to defend Obamacare.’ And now we’ve done that, and now we’re ready to move on.”

    The best argument against pursuing a public option is that it would be a waste of legislative time and capital, since there’s no way it would pass Speaker Paul Ryan’s House of Representatives (assuming that Republicans are able to hold the chamber this fall). “The public option was a good idea in 2009, and it’s a still a good idea today. [But] I don’t know that the politics have changed at all on it,” Sen. Chris Murphy of Connecticut—who replaced Lieberman in 2013—told the Hill last week.

    It’s true that passage of a public plan, at least in the near future, would be almost impossible. It’s hard enough to pass anything, and especially hard to pass something on which even the faintest traces of socialism can be detected.

    But even a strong push for a public option can be useful. If fixing the Affordable Care Act reaches the congressional docket with some urgency, it can serve as a central piece of Democrats’ opening offer that eventually gives way to other compromise solutions. Republicans en masse won’t abandon their desire to eliminate the act. But with a new Democratic president beginning a term, it might be possible to peel off some Republican members of Congress who recognize that the law isn’t going anywhere, so why not improve on it in the meantime for their rural constituents? That may come in the form of increased exchange subsidies for families, doubled subsidies for community health centers, or a reauthorization of the reinsurance program.

    For Republicans, the health care wars never paused. Whether Democrats like it or not, and for all the good the Affordable Care Act has done for the sizable majority of its enrollees, Obamacare’s holes are being exposed, and Republicans are more than ready to fill them with the narrative that the law is beyond repair. If Democrats don’t rally around any ideas for a fix out of a craven wish not to summon the ghosts of 2010, the GOP will have succeeded in weaponizing its opponents’ political fear against their greatest accomplishment.

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    doctor patient

    The deluge of negative news surrounding the Affordable Care Act (ACA), better known as Obamacare, has been met with a call for change from both sides of the aisle.

    With healthcare companies moving out of the ACA's exchanges citing falling profits, counties faced with fewer and fewer options for coverage, and even the regulator in charge of Tennessee's exchanges saying the system is "very near collapse," there has been recognition from many politicians that change is needed.

    The public option would be a government-backed plan that could enter the public exchanges set up by the ACA to compete with other private insurers in the market. Proponents of the law believe that this would drive down costs for consumers and prevent a situation such as Pinal County, Arizona, where there is projected to be no insurer offering plans through the exchange.

    The public option has long been championed by Democratic politicians. It was part of the original Obamacare proposal before being removed to ensure the passage of the bill. A government healthcare option, whether in competition with or replacing private insurance, has been proposed for decades.

    In the wake of major health insurance providers Aetna, Humana, and UnitedHealthcare all leaving behind a significant majority of their Obamacare exchange business, this has been seen by some on the left as the spark to renew the push for the public option.

    "Aetna provides the perfect example of why we need the public option," Adam Green, co-founder of the liberal Progressive Change Campaign Committee, told Business Insider. "After that we've had the two most powerful Democrats — Barack Obama and Hillary Clinton — come out in support of it, and in many ways it looks like we're on the way to reform."

    Both President Obama and Democratic presidential nominee Hillary Clinton have reignited their calls for a public option to help alleviate issues with the ACA. Democratic politicians in the House of Representatives and Senate have brought up the issue on the campaign trail as well.

    Green's group pushed for the inclusion of the public option in the ACA originally, and with the recent news, he views it as the best chance since 2009 to get the policy back on the table.

    "We've been able to open up political space, to open up the window to this change," said Green. "There's fresh oxygen for a passage of the public option."

    Republicans, however, are not as thrilled. Many Republicans have called for Obamacare to be repealed, including Republican presidential nominee Donald Trump. Even those that are open to merely adjusting the ACA would most likely be against some form of the public option.

    "I mean the question really is, do you want the people that have given you the disaster that is Obamacare even more involved in health insurance," said Jeffrey Anderson, a senior fellow at the conservative Hudson Institute in an interview with Business Insider last week.

    Anderson, however, did acknowledge that it would come down to whichever party gained control of both houses of Congress and the presidency first.

    "If it's the Democrats, then we'll probably get the government run public option, if its Republicans, we'll get a repeal and replace," said Anderson.

    Like almost everything else in politics there days, however, it appears there will be little movement on the issue until at least after the election in November and the new president, and perhaps more importantly Congress, are installed in January.

    SEE ALSO: For the first time, a county in America has lost all of its Obamacare insurers

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    obama obamacare doctors

    The government is offering some ideas to try to fix the Affordable Care Act, the healthcare law known as Obamacare, amid a series of missteps that have befallen President Barack Obama's signature legislative achievement.

    With Obamacare having being dogged by negative news over the past few weeks — as major insurers have pulled out of some public exchanges and regulators have said the exchanges are "near collapse"— the US Centers for Medicare and Medicaid Services, or CMS, proposed a series of changes on Monday to try to correct some of the exchange issues.

    CMS, the division of the US Department of Health and Human Services that oversees the exchanges, proposed tweaks that would make it less risky for insurers in the marketplace to take on sick patients.

    Two of the biggest problems for the exchanges have been a lack of young people, who help offset higher-cost patients, signing up for insurance and generally sicker-than-expected people getting coverage through the exchanges, leading to huge losses for some insurers.

    A few of the 14 total proposals include:

    1. Using some of the fees from the federally funded marketplace for outreach to get more young people to sign up.
    2. Strengthening rules for signing up for insurance outside the open-enrollment period to ensure that people are not waiting until they are sick to get coverage.
    3. Take prescription-drug use into account when evaluating the risk profile of potential patients. Previously, this had not been taken into account, and insurers argued that it prevented them from getting a full picture of possible patients' health status.
    4. Creating more flexibility for insurers in their bronze plan offerings to reduce cost burdens.

    Kevin Counihan, the insurance marketplace CEO at the CMS, said the proposed changes would fix numerous issues with the exchanges.

    "These proposed actions and others we have taken over the last six months would help to: support issuers with high-cost enrollees, while updating risk adjustment; strengthen the risk pool; promote additional enrollment; and support issuers in entering the Marketplace or growing their Marketplace business," Counihan wrote in a post summarizing the proposals.

    All of these changes serve as attempts to make it more economically sound for insurance companies to be in the market, to get more people into the exchanges (roughly 10% of Americans are still uncovered), and to eliminate loopholes that allow people to game the exchanges.

    The public exchanges are just part of the ACA, representing only 6% of health-insurance coverage nationwide. But, as one of the signature parts of the law, their survival is a huge deal to the long-term future of the ACA.

    Comments on the proposals close on October 6.

    Check out the full blog post from the CMS on the changes here »

    SEE ALSO: A divisive solution to Obamacare's problems is making a comeback

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    bigfoot store

    If you didn't know better, then it would appear that healthcare costs are skyrocketing.

    The amount that the US spends on healthcare passed $3 trillion for the first time in 2014. Obamacare premiums are on the rise. There's seemingly always a controversy over a new drug with a massively inflated price.

    Appearances are not reality, however, according to new research from the Federal Reserve Bank of Dallas.

    In a monthly economic letter, Mine Yücel and the Dallas Fed research team pointed out that healthcare-services costs are actually running below core personal consumption expenditure (PCE) inflation. Put another way, healthcare services are actually a drag on inflation right now.

    For one thing, according to the research from Yücel and company, prices for healthcare services — which include things like the cost of a hospital visit, the cost of nursing-home services, and net health-insurance costs — have been growing at a much slower rate than in the past.

    "The growth rate of health care services prices has slowed dramatically, from around 4 percent per year in 2004 to a low of about 0.5 percent in 2015,"said the Dallas Fed team."The rate has since moved slightly higher, to just less than 1.2 percent on a 12-month basis in 2016."

    According to the Dallas Fed, this measure includes not just spending from households, but also those paying for households by proxy. Thus, government spending through programs such as Medicare and employers spending through group health plans are also included.

    The impact on core PCE — which is used by such groups as the Federal Reserve in interest-rate decisions and strips out volatile food and energy prices — from healthcare services is significant. Core PCE has been running well under the Fed's target of 2% for some time now, but without the drag from healthcare services, it would be very close to the goal.

    "For the ex-food-and-energy index, excluding health care services raises current 12-month inflation to 1.69 percent from 1.57 while lowering longer-term average inflation to 1.61 percent from 1.94 percent," said the Dallas Fed study."That means ex-food-and-energy inflation is 0.08 percentage points above its longer-term average rate rather than 0.37 percentage points below, the deviation when health care services are included."

    Screen Shot 2016 08 30 at 1.30.36 PM

    Of note, this data is on an aggregate level. It is not to say that individual health-insurance plans or experiences at the hospital were not more expensive in recent years. But, in total, price growth slowed.

    Additionally, according to data from the Kaiser Family Foundation, the growth for total health spending in the US based on data from the US Center for Medicare and Medicaid Services hit the lowest point in decades in 2013 and remains well below the long-run average.

    While Kaiser projects that there will be some normalization in spending growth over the next 10 years, the Dallas Fed's and Kaiser's measures show that prices for healthcare aren't exactly ballooning.

    SEE ALSO: The government just announced some big changes to try to fix Obamacare

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    RTR3WGDK

    Ninety-nine percent of reproductive age U.S. women who have ever had sex have used contraception at some point in their lives. And thanks to the Affordable Care Act’s contraceptive mandate, more people have access to contraception than ever before.

    As obstetrician/gynecologists, we help patients choose the contraceptive method that best suits them and explain how they work, their failure rates and potential side effects.

    But we also know that patients (and the public) get a lot of information about health and medicine from the media in general, and TV in particular. How the media frame stories and whom they choose as sources might influence how people view an issue.

    So we decided to examine how contraception was covered during the nightly news shows on the big three television networks (ABC, CBS and NBC). And it turns out these stories often portray contraception as a political or social issue, which means that actual medical information about contraception rarely makes it onto the air.

    Medical experts are rarely quoted

    In our study, published in the journal Contraception, we looked at a total of 116 stories about contraception that aired on the nightly news programs for ABC, CBS and NBC between January 2010 and July 2014. This period covered the months leading up to the signing of the ACA through to the Supreme Court’s ruling in Hobby Lobby v. Burwell in June 2014, a case in which a privately owned company’s owners (Hobby Lobby) argued that the ACA’s contraceptive coverage requirement violated their freedom of religion.

    For each story, we determined what birth control methods were covered, the people interviewed or quoted in each story and what information the story included.

    We found that most stories focused on political or social aspects of contraception, such as controversies over contraceptive coverage by insurance plans or over the counter access to contraception.

    Fewer than one-third of stories featured any medical information at all. In fact, the information we as doctors consider most critical– like the failure rate of a method, how to use it and potential side effects – was missing from nearly all TV news stories about contraception.

    Only 11 percent of stories used a medical professional as a source, and only 3 percent of those were ob-gyns. Politicians and government leaders (40 percent of stories), the general public (25 percent of stories) or Catholic Church leaders (16 percent of stories) were quoted or interviewed more often than medical professionals.

    The stories we reviewed covered many different types of birth control, including the oral contraceptive pill, the emergency contraceptive pill, condoms and long-acting reversible contraceptives (often called LARC for short) such as intrauterine devices (IUDS) and implants, like Nexplanon.

    LARC methods are recommended as a first choice contraceptive for most people by the American College of Obstetricians and Gynecologists and the Centers for Disease Control and Prevention. They are the most effective forms of reversible contraception. But these methods were mentioned the least often. IUDs appeared in only 4 percent of stories and implants in only 1 percent.

    While our study did focus on a politically charged time period around the ACA, coverage patterns didn’t seem to change when we looked at stories about contraception unrelated to the ACA. We saw similar topic and source selection in these stories too.

    RTR3WG9Y

    Framing matters

    In 2015 almost 24 million people watched the nightly network TV news. The median age of the nightly TV news audience skews older, ranging from 45 for ABC to 52 and 53 for NBC and CBS, respectively. Women use contraception, however, throughout their reproductive years, from their teens to their 40’s. In fact, based on the most recent national data, more women in their 30’s and 40’s are using contraception than their younger counterparts.

    Even if younger women aren’t tuning into these broadcasts, their social networks may well include people who do. Research suggests that many younger reproductive aged people get health information and news from their social networks, so TV news content may impact many more people than those who view it directly.

    While most methods of contraception are intended for women, that doesn’t mean contraceptive access is only a women’s issue. It also affects men who have female partners, family and friends who share information and advice, and all of us as citizens who are affected by government policies around contraception.

    Framing contraception primarily as a political or social issue rather than as a medical issue often means that TV news stories don’t cover the most effective contraceptive methods and information on method use, benefits and harms.

    It also leaves some of the most knowledgeable sources about contraception, medical professionals like us, on the sidelines in favor of comment from political, advocacy group and church leaders. Ultimately, this could deprive the public of vital health information and understanding about contraception.

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    Providing context is part of the media’s job

    Our research identified key gaps in nightly network TV news coverage of contraception that may affect the information some people in the United States are getting about birth control.

    But these gaps aren’t insurmountable. Research analyzing media coverage of the HPV vaccine and the medication tamoxifen for breast cancer treatment and prevention found higher rates of medical professionals being used as sources. Coverage of these issues shows that it is possible to highlight both the social and medical aspects of a news story to convey the full context to the audience.

    Providing context is critical to helping viewers understand topics and events in the news. Contraception is multifaceted, and the social and political angles shouldn’t be ignored in media narratives. But the medical and public health aspects of contraception are critical to understanding this issue, and are too important to leave out.

    SEE ALSO: The supreme just dealt a minor victory to challengers of Obamacare

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    Things aren't looking so hot for Mylan CEO Heather Bresch these days. The pharmaceutical industry figure is embroiled in controversy after her company's EpiPen product (a vital resource for treating violent allergic reactions) has risen in price from less than $100 in 2007 to more than $600 in 2016.

    That price gouge came for seemingly no reason, but it did significantly raise Bresch's salary, so people are naturally unhappy about it. It's the Martin Shkreli situation all over again, but with no Wu-Tang Clan involvement and fewer Harambe jokes.

    If you want to empathize with Bresch in these trying times, the fine folks at GOP Arcade have released a free, browser-based parody video game called "EpiPen Tycoon." Here's how the game works: 

    The goal here is to jack the price of the EpiPen as high as we can without angering either investors or customers too much. Just like real life!



    On the left side of the screen, you see the outrage meter, which fills in either direction based on the price, which you raise or lower with the arrow keys. On the right side, you see your corporate headquarters evolve over time and you get warnings about certain dangerous situations.



    At first, I tried to bring about a socialist paradise by reducing the price of the EpiPen to $0. This meant I was bringing in no money and my investors were none too pleased.



    See the rest of the story at Business Insider

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    barack obama beach

    It's no secret the Affordable Care Act (ACA), better known as Obamacare, has taken it on the chin over the last six months or so.

    Here's the quick rundown: insurers are leaving the public exchanges, companies are worried about the impact on their jobs, even maligned drug companies are pinning blame on the law. In response, the Center for Medicare and Medicaid Services announced an extensive plan to try and mitigate some of the issues being raised.

    These setbacks have led critics to say that Obamacare is in a "death spiral" (anoft-usedphrase amongdetractors) and even advocates to admit that there is work to be done.

    The question, however, is whether the current spot that Obamacare finds itself in is a death sentence, or simply a setback. Despite the issues, the fact of the matter is for all of its struggles, the Affordable Care Act is probably not on its death bed.

    Insurers figuring it out

    The biggest problem for the ACA in recent weeks has been the pull out of large private insurers from public exchanges. These rollbacks have left a county in Arizona with no ACA exchange insurers and has many counties with few options to choose from.

    The problem, at its most basic, is that insurers are losing money. Aetna, the most recent company to ditch the ACA, said it lost $200 million on its exchange business in just the second quarter alone. This, however, may be as much a function of large insurers own problems as the law itself.

    Firms that have experience in lower cost government programs such as Medicaid have been far more successful in the exchanges, even making profits. These firms are able to offer competitively priced plans with a lower cost structure than the large firms like Aetna, UnitedHealthcare, and Humana. By not being able to figure out the right cost structure, some of the blame has to fall at the feet of insurers.

    If these firms do retool, there is a chance that they re-enter the market. For one thing, many of these same insurers that are pulling out of the exchanges have at one time expressed support and desire to stick with the program

    "We are committed to working constructively with the administration and lawmakers to find solutions that can improve this program, stabilize the risk pool and expand product flexibility, all with the goal of creating a sustainable program that makes healthcare more affordable and accessible for all consumers.," said Aetna CEO Marco Bertolini in an earnings call in April.

    Thus, if they can learn from other insurers and come up with a better ACA plan, there may be some reason for them to re-enter the exchanges.

    Additionally, the CMS proposals are attempting to make adjustments so that the markets are more viable for insurers. For instance, it is planning to adjust the risk pool, which essentially rewards firms for taking on sicker patients on aggregate and penalizes those that accept a more healthy, low cost group. (There's more to it, and you're welcome to read a full explanation here.) This mitigates some of the risks for insurers on losing money.

    So if there is combination of better support from the government and a little learning from the insurers themselves, there is a chance to reverse the flow of Obamacare entrants.

    Controlling costs

    A lot of attention paid to the shortcomings of Obamacare has come from the increase in the cost of premiums. While it is true that premium increases this year have been steep, it is worth noting that much of the increase may be simply insurance companies coming to terms with the economics of the exchanges.

    In fact, when the prices came out for the first year of the exchanges in 2014, many observers were surprised by how low the costs were. The average premium came in below the original projection of the Congressional Budget Office. Additionally, the cost for ACA premiums have come in well below what the price of individual market plans, the precursor to the exchanges, were projected to be during the same years.

    Additionally, in a recent study the Department of Health and Human Services noted that roughly 70% of those going into the Obamacare exchanges have a plan available for less than $75 per month after subsidies are applied.

    obama obamacare doctors

    Other cost pressures on plans could also be alleviated as well.

    In an interesting post on Wednesday, MarketWatch's Tim Mullaney made the point that much of the cost increases are also coming from one place: drugmakers.

    Essentially insurers haven't known what medicines patients who were signing up for their plans through the public exchanges were taking. With many of these drugs, Mullaney uses the example of Gilead's $94,500 per patient Hepatitis C treatment, insurers were getting hit by large, unexpected costs. 

    At the same time, the price of prescription drugs in general have been skyrocketing, but many of these are exempted from deductibles, so insurers are bearing an even larger cost load (which is in turn passed to consumers through higher premiums).

    Additionally, many employer-based plans are even shifting their behavior due to the increasing burden of drug prices. Thus, as lawmakers turn their eye to drug prices and these firms come under more and more fire, there is a possibility that the cost pressure from these medicines will alleviate.

    On the radical end, the increased calls for a public option — a plan offered by the government that would compete with private insurers — could increase competition and provide an even lower costs option.

    There's been good too

    Additionally, it's fair to point out that while the ACA exchanges certainly are facing their set of issues, a number of good things are coming out of Obamacare.

    For one thing, regardless of where it's coming from, millions of previously uninsured people now have access to healthcare and the uninsured rate has dropped to 11.0% from nearly 18%. This was even more striking for minority groups. African Americans have cut their uninsured rate in half (from 22.4% to roughly 10%) and Hispanics have seen a drop by 25% (41.8% to 30.5%).

    Healthcare costs have grown at the slowest pace in decades during Obamacare and health services inflation has slowed too.

    Surely there are problems with the law, but it's only fair to recognize the good with the bad.

    All about politics

    The fact of the matter, however, is that like any law, the future of the ACA is in the hands of politicians.

    If there is a Republican sweep in November, with Donald Trump taking the White House and both houses of Congress staying Republican, there is a good chance that Obamacare doesn't make it very long.

    On the other hand, if the Democrats sweep the White House and all of Congress, large changes and possibly the public option are on the table.

    If there is some mix-and-match government it is a bit harder to say. According to a report from Bloomberg, there may be a chance Republicans give in and go along with some reforms to the law under a President Clinton. Or, there could more hold outs and only adjustments at the margins.

    Either way, we'll have to wait until to November to see.

    Long-term survival

    At the end of the day, these are still serious problems that lawmakers and regulators alike have to tackle. Making the exchanges profitable for insurance companies is key to enduring a wide variety of choices for the Americans.

    The proposals from CMS are a good first step, though it remains to be seen how they are implemented since public comments close October 6 and adjustments may be made following that period.

    Given the improvements so far from Obamacare and the possibility of at least continued gridlock in Washington, there is a good chance that Obamacare is not going through a death spiral but maybe just some growing pains.

    SEE ALSO: The government just announced some big changes to try to fix Obamacare

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    doctor patient

    Healthcare costs are actually growing at the slowest rate in decades, Business Insider noted last week.

    Based on reader reactions, however, this idea produced a bit of cognitive dissonance. And with good reason, according to data from Neil Dutta at Renaissance Macro Research.

    Dutta, the head of US economics for Renaissance, pointed out that the two measures of healthcare services inflation — Personal Consumption Expenditures and Consumer Price Index — are very different.

    For PCE, healthcare service inflation is up just 1.1% year-over-year — and, as we noted before, is actually dragging on overall inflation.

    Healthcare services inflation in the CPI, on the other hand, is up 4.1% year-over-year. Dutta noted that this is widest gap between the two since 1967.

    This would seem to make no sense. How is it that two measures of the same economic concept end up with such different pictures of healthcare costs? The key difference between the two, according to Dutta, is how they're measured.

    "PCE covers payments on behalf of individuals and out-of-pocket healthcare expenses," he wrote. "CPI is just the latter."

    Put another way, CPI measures just what the average American is paying out of pocket. PCE includes government payments through things such as Medicaid and Medicare, along with payment by employers through workplace-based plans.

    The much bigger cost increase for consumers may be for a variety of reasons, including the increased prevalence of high-deductible plans and increased drug costs being passed on to consumers in the form of higher premiums. The end effect, however, is the burden of payments falling more on the wallets of everyday Americans than on the rest of the system.

    Screen Shot 2016 09 06 at 9.26.12 AM

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    Obama doctors Obamacare

    The government is trying to make some changes to the Affordable Care Act, also known as Obamacare, to try to weed out those gaming the system.

    In a release Tuesday, the Centers for Medicare and Medicaid Services said it plans to roll out a pilot program to assess the effect of more stringent requirements for people signing up for insurance through the ACA's public exchanges outside of the open enrollment period.

    In theory, only those in special situations — such as people losing employer-based coverage or leaving their parents' insurance when they turn 26 years old — are supposed to enroll in the exchanges outside of the designated time period. (For example, the open enrollment period for 2017 runs from November 1, 2016, to January 31, 2017.)

    The concern is that patients sign up outside of the designated window only when they are sick and need coverage.

    Since the ACA does not allow insurers to deny coverage based on preexisting conditions, this means that people who are already sick cannot be denied. This adds to costs for insurers and distorts the risk pools of the exchanges.

    "We also noted the concerns we have heard about how these actions are affecting the exchange risk pools,"the CMS release said. "Some have said that additional changes are needed to prevent individuals from misusing special enrollment periods to sign up for coverage only after they become sick."

    In order to discourage this sort of behavior, CMS has added confirmation steps to the special enrollment periods; added warnings to the exchanges' website, Healthcare.gov, about consequences from abusing special enrollment; and eliminated some of the special enrollment windows.

    This, in turn, has lowered the number of people signing up during these periods.

    "In the seven weeks prior to implementation of the confirmation process, special enrollment period plan selections in 2016 were about the same as during the same weeks in 2015," the release said.

    "In the seven weeks after implementation, special enrollment period plan selections in 2016 were almost 15 percent lower than during the same weeks last year, although why enrollments are falling in response to the new confirmation process is unclear."

    In order to better quantify the effect of these changes on the market, the CMS will launch a pilot project for 2017 to determine whether it is helping insurers control risks and if it is discouraging people who should be signing up from doing so.

    Additionally, the release said, the program will allow the CMS to determine what further measures may be necessary to ensure that people aren't abusing the special enrollment periods.

    "Our intent in conducting such a pilot would be to evaluate the impact of pre-enrollment verification of special enrollment period eligibility on compliance, enrollment, continuity of coverage, the risk pool, and other outcomes. The scope of the pilot is still being determined," the release said.

    The pilot has not been finalized, and the CMS is taking open comment until September 20 before determining the final framework.

    SEE ALSO: Here's why healthcare costs seem as if they're skyrocketing

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    doctor smile happy

    The percentage of Americans that do not have health insurance now sits at 8.6%, the lowest on record according to the Centers for Disease Control and Prevention (CDC).

    During the first three months of 2016, 11.9% of Americans aged 18 to 64 (those who do not qualify for Medicare) were without insurance, while just 5.0% of children aged 0 to 17 were lacking coverage, according to the CDC's National Center for Health Statistics (NCHS).

    "From 1997 through 2010, the percentage of adults aged 18 to 64 who were uninsured at the time of interview generally increased," said the release from the NCHS.

    "More recently, the percentage of uninsured adults aged 18 to 64 decreased, from 22.3% in 2010 to 11.9% in the first 3 months of 2016. During this 6-year period, corresponding increases were seen in both public and private coverage among adults aged 18 to 64."

    Unfortunately, the percentage of young adults, aged 25-34, had higher levels of uninsurance than those aged 45-64 at 15.9% to 8.1% respectively. While this is generally to be expected, the lack of young people seeking coverage through the Affordable Care Act's, better known as Obamacare, public exchanges has been lower than expected and made it difficult for insurers offering plans. The NCHS' report reiterates just how sizable the gap remains.

    Additionally, the NCHS estimates that 4.0%, or 10.8 million, were covered by a private insurance plan obtained through the Obamacare exchanges. This is up from 3.6%, or 9.7 million, from the previous survey.

    In a statement following the release of the report, Health and Human Services Secretary Sylvia Burwell applauded the historic uninsured rate and cited the ACA as a primary driver of the drop.

    "Under the Affordable Care Act, our nation’s uninsured ratedropped in the first quarter of the yearto 8.6 percent – the lowest level on record," said Burwell. "Because of the law, 20 million more Americans hadquality, affordable coverageas of early 2016. And it is helping to bend the cost curve, contributing to the slowest growth in the price of health care in 50 years and reducing health expenditures by billions."

    Screen Shot 2016 09 07 at 7.59.16 AM

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