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The latest news on Obamacare from Business Insider

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    doctors listening obama concerned

    Obamacare has a millennials problem, and the healthcare program is struggling to get rid of it.

    To recap, one of the main reasons that large health insurance firms such as Aetna and United Healthcare care ditching the public insurance exchanges of the Affordable Care Act — also known as Obamacare — is because not enough young, healthy people are signing up.

    Insurers need young people to, in a basic sense, pay into the system, since they tend to be healthier and use fewer healthcare services — thus partially subsidizing the older and less healthy people that cost more to cover than they pay in.

    Since the rollout of the exchanges, the number of young, healthy people signing up has not been enough to offset the sicker population, leading to millions of dollars in losses for many insurers.

    According to new data from the Centers for Disease Control and Prevention's National Center for Health Statistics division, it appears that the gap between the percentage of younger and older people without insurance is not closing.

    About 16% of Americans ages 25 to 34 do not have health insurance, according to NCHS data released on Wednesday. About 14% of those ages 35 to 44 go without coverage as well.

    When you get to the ages 45 to 64 bracket, however, that figure drops to just 8.1%.

    Screen Shot 2016 09 07 at 3.10.58 PM

    While the uninsured rate for each of the three age groups has declined, the gap among the age brackets has stayed stubbornly consistent. The roughly 8 percentage point gap between the youngest non-Medicare-eligible cohort and the oldest is slightly smaller than it was before the ACA, but evidently it has not closed enough to make a difference for the risk pools in the exchanges.

    The hope of Obamacare was that with the combination of accessibility and penalties, more young people would get covered. If the gap were to close, this could recalibrate the risk and make the exchanges more financially viable for large insurers.

    There is still some hope. The gap has closed some — but not as much as Obamacare's architects had hoped. Additionally, the full financial penalties for not having coverage are going into effect this year, potentially spurring more healthy young people to purchase insurance.

    In order to address this, the Centers for Medicare and Medicaid Services proposed new outreach funding as part of a larger package of adjustments to the ACA's administration.

    SEE ALSO: Obamacare can succeed, but it needs a huge amount of work

    DON'T MISS: The percentage of Americans without health insurance just hit an all-time low

    Join the conversation about this story »

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    elizabeth warren

    US senators have some questions for health insurance giant Aetna.

    Elizabeth Warren (D-Massachusetts), Bernie Sanders (I-Vermont), and three other Democratic senators sent a letter on Thursday to Aetna CEO Mark Bertolini questioning the motivations of the company in its decision to ditch 70% of its Affordable Care Act — better known as Obamacare — business.

    Aetna said in August it was leaving the ACA exchanges in 70% of the counties in which it offers insurance because of losses sustained through the ACA business.

    The day after the announcement, however, a letter from Bertolini to the Department of Justice revealed the firm believed that if a proposed merger with rival Humana were blocked it would have to pull out of the exchanges.

    In the letter, which was in response to a direct request from the department to outline the impact of the merger on Aetna's ACA business, Bertolini said that if the merger did not go through, it would pull back immediately from its ACA business. He also stated that if it did go through, the company would expand its ACA coverage.

    The Justice Department sued in late July to stop the merger with Humana. In its quarterly earnings report, a week after the department's announcement, Aetna expressed concern over the future of its ACA business because of a $200 million loss in the second quarter.

    In their letter, the senators noted that there was reason for the company to be wary of a possible Justice Department lawsuit and that the $1 billion merger break-up fee was a "expensive and risky bet on a highly uncertain outcome." By attaching a break-up fee of that size to the deal, the senators argue, Aetna was attempting to force the department's hand into approving the merger.

    "Aetna's letter describes a dangerous and irresponsible bet that the Justice Department would not block the deal because Aetna has structured the deal in a way that would cause significant damage to itself and, by extension, to the public exchanges, if it was blocked," the letter said.

    "Because the risks of the merger were obvious from the beginning, these actions are both inexplicable and irresponsible."

    Bertolini noted in his July letter to the Justice Department that if the deal were to fall through, the firm would need to "recover those costs plus a ... break-up fee" and litigation expenses.

    Aetna has since said the losses, not the lawsuit against the merger, were the primary reason for the Obamacare pullback, but that the lawsuit did play a factor.

    The senators also pointed to a number of statements from Bertolini and Aetna in support of the sustainability and long-term commitment of Aetna to the ACA exchanges, saying the company was supportive of the exchanges from a business perspective up until the merger was scuttled.

    In a statement to Business Insider, Aetna spokesperson TJ Crawford said the company is not the only one rolling back coverage from the exchanges, and that the letter is unfairly singling out Aetna:

    "We are one of many insurers, large and small, that has been forced to reduce its public exchange participation due to an increasingly unstable marketplace. This isn't a recent development, as more than 40 companies exited certain geographies for the 2016 plan year.

    "Singling Aetna out may be politically convenient during election season, but this letter ignores realities and takes the focus away from needed reforms. The ACA is not sustainable without bipartisan action that improves access, affordability and quality of care for consumers."

    In addition to Warren and Sanders, Sens. Sherrod Brown of Ohio, Edward Markey of Massachusetts, and Bill Nelson of Florida signed the letter.

    You can read the full letter to Aetna here (PDF) »

    SEE ALSO: One of the main reasons insurance companies are ditching Obamacare isn't going away

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    Paul Krugman stopped by Business Insider to talk to senior editor Josh Barro and discuss his criticisms of the Affordable Care Act.

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    Obama doctors Obamacare

    President Barack Obama is enlisting the help of some health insurance companies to try to fix the Affordable Care Act, better known as Obamacare.

    Obama dropped by a meeting with Secretary of Health and Human Services Sylvia Burwell and 13 health insurance CEOs, including the CEOs of Humana and Cigna, to emphasize the need to work together on the ACA's public marketplaces.

    Recently, a number of high-profile insurers have rolled back their offerings on the ACA exchanges. This has led to questions about the long-term sustainability of the ACA.

    In addition to the meeting, Obama sent a letter to the CEO of every health insurance company participating in the exchanges asking for help improving them.

    Obama acknowledged that there have been struggles during the first few years of the exchanges.

    "We know that this progress has not been without challenges," the letter said. "Most new enterprises have growing pains and opportunities for improvement. The marketplace, while strong, is no exception. Time and experience will help drive that improvement, as will constructive policy changes."

    Obama said Burwell and her department are working on making needed changes, as is his administration, but that the government needed the support of the companies to make it work.

    "To that end, I want to enlist your help as we head into this fourth annual open enrollment period," the letter said. "We know that signing up more uninsured Americans for coverage generates benefits all around."

    The letter says the administration is attempting to address some challenges, including the fact that fewer young people than expected are signing up through the public exchanges, making it costlier for insurers.

    Here's Obama (emphasis added):

    "And since the remaining uninsured are disproportionately younger and healthier, signing them up improves the risk pool and consequently the affordability of coverage for all enrollees.

    "Secretary Burwell has developed a data-driven plan to find and enroll those who still lack coverage, including by stepping up the outreach activities that worked best over the last 3 years; working with the Department of the Treasury to reach out to uninsured people who paid the individual responsibility fee for 2015; and increasing our focus on enrolling young adults.

    "We are also hosting a Millennial Outreach and Engagement Summit at the White House on September 27 focused exclusively on how to enroll more youth in the Marketplace during open enrollment. We welcome efforts to increase your outreach during this open enrollment period."

    Obama said the "work is not over" in implementing the ACA.

    Of note, the CEOs of Aetna and United Healthcare were not in attendance. Both companies are part of the "Big Five" nationwide insurers and have announced plans to substantially roll back their Obamacare coverage.

    SEE ALSO: The future of Obamacare

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    obamacare

    Six years after Congress passed the Affordable Care Act the percentage of Americans without health insurance hit record lows with more than 90 percent of people now covered, the US Census Bureau said on Tuesday.

    The uninsured population dropped to 29 million people in the US without health insurance in 2015, or 9.1 percent of the population, according to the bureau's 2015 health insurance statistics released on Tuesday. This is down from 33.0 million people and a rate of 10.4 percent the year before.

    A rise in both private and government coverage contributed to the increase in 2015, which follows a trend of declining uninsured rates since the bulk of the Affordable Care Act, dubbed "Obamacare," went into effect in 2014.

    The largest increase was seen in direct-purchase coverage plans, according to the census bureau. These types of plans include the healthcare exchanges set up by under the Affordable Care Act, as opposed to plans paid for by private employers or government funded health insurance like Medicaid or Medicare.

    obamacare healthcare.gov health insurance

    The uninsured population might be decreasing in size, but the rate at which its shrinking has slowed down. In 2015, uninsured rates dropped by less between 2014 and 2015 than they did the year before.

    Uninsured rates were the highest among lower-income groups and Hispanics. For households making less than $25,000 a year 14.8 percent were uninsured, compared to 4.5 percent for those taking in more than $100,000. Hispanics reported 16.2 percent without health coverage compared to 6.7 percent among whites.

    States that expanded medicaid as part of the Affordable Care act, saw more success in lowering the percent of its population that does not have health insurance compared to states that chose to reject the option.

    While Massachusetts saw the lowest rates at 2.8 percent, Texas has the largest uninsured rates at 17.1 percent of the population. The southern state has been reeling from a series of reports maternal death rates rose in recent years, with 30 deaths per 100,000 births in 2014, — nearly twice as high as the rate in 2010. While no singular cause is to blame, critics have highlighted restrictions to reproductive healthcare access and the decision not to expand medicaid coverage.

    Join the conversation about this story »

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    Obama doctors Obamacare

    The Federal Reserve has an inflation conundrum on its hands, and it is due in part to the Affordable Care Act (ACA), better known as Obamacare.

    The Fed has a dual mandate to maintain full employment and a sustainable and stable rate of inflation, currently targeted at 2% growth in prices year-over-year.

    To measure its progress on that second mandate, the Fed uses core personal consumption expenditures (PCE) inflation which has been running consistently under the 2% target.

    While the measure is generally thought of as showing a clear picture of price increases in the US, it is facing a healthcare problem partly brought on by Obamacare.

    Core PCE and the other widely-cited measure of inflation, the consumer price index (CPI), use two different methods of tracking healthcare expenses, which we've noted before. CPI tracks only what Americans personally are spending out of pocket on their healthcare, whereas PCE takes into account the insurance costs picked up by the government via Medicaid or Medicare, and the costs private insurers pay.

    This difference is a large reason why core PCE and core CPI (both of which strip out volatile energy and food prices) are vastly different. Core CPI is running at a 2.3% increase year-over-year while core PCE is around 1.6%.

    Screen Shot 2016 09 19 at 1.56.10 PM

    According to Paul Ashworth, chief economist at Capital Economics, this presents the Fed with a problem. Using CPI's method of tracking healthcare inflation, core PCE would be at 2.3%, over the Fed's stated target.

    The bigger conundrum is that each of the measures, CPI and PCE, are being pulled in opposite directions due to policy impacts on government healthcare and drug pricing. Here's Ashworth's breakdown (emphasis added):

    "This represents something of a dilemma for the Fed. After all, the surge in health care insurance premiums, particularly for the new Obamacare plans, and the surge in drugs prices are so severe that they have become legitimate campaign issues in the election. But is that upward pressure on medical care prices a genuine signal of tight economic conditions or is it due to a one-off structural shift? Probably the latter. Similarly, we have argued before that the Fed should ignore the declines in the administered prices set by Congress for Medicare and Medicaid because those are also not a signal of what conditions are like in the market economy."

    Put another way, CPI may be too high due to one time spikes in Obamacare premiums and drug prices, but PCE may be too low because of adjustments to costs associated with Medicare and Medicaid.

    As Goldman Sachs economists Zach Pandl and Daan Struyven pointed out in a note to clients, the gap between the CPI and PCE healthcare services measures is incredibly wide. Additionally, if you closed that gap to its long-term average there would be a very different picture of inflation.

    "Inflation in the CPI for health care services is currently 3pp above the equivalent measure in the PCE deflator—the largest difference since 1961," said the note from Goldman. "If instead this gap were at its 10­ or 20 ­year average, core PCE inflation would be running 0.3pp higher at 1.9%, or core CPI would be running 0.1pp lower at 2.1%."

    Screen Shot 2016 09 19 at 1.54.24 PM

    What is true is that Americans are paying more out of pocket for their medical care than ever before, partially due to the rise of high deductible plans, and drug prices for everything from insulin to EpiPens are skyrocketing. Additionally, the percentage of Americans' income spent on healthcare is increasing. 

    On the other hand, total healthcare spending in the US is growing at the slowest pace in decades, according to the Kaiser Family Foundation. Also, the shift to high deductible plans has made insurance cheaper for employers, while recent changes to provider reimbursement have dragged down cost increases for private payers.

    To Ashworth, this means the Fed will eventually have to recognize the increasing costs of healthcare.

    "Underlying inflation is accelerating and the Fed will eventually have to respond," he concluded.

    The Goldman economists note that there are some non-policy related factors keeping core PCE inflation low.

    "However, health care PCE inflation also looks low for non­policy related reasons, held back by modest inflation in medical care inflation for private payers—a message at odds with the CPI," wrote Pandl and Struyven. "We think reality is somewhere in between, and that health care inflation in the PCE index will pick up, helping narrow the large CPI­-PCE gap."

    Either way, the differences between the two measures create a conundrum for Chair Janet Yellen and the Fed.

    SEE ALSO: Americans' out-of-pocket healthcare costs are skyrocketing

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    Obama Obamacare young people

    Obamacare needs millennials, so the White House is going after them.

    The White House, the Department of Health and Human Services, the secretary of education, and private groups convened in Washington on Tuesday for the Affordable Care Act Millennial Outreach and Engagement Summit.

    The summit was the launch of a campaign to reach out to young people and get them to sign up for plans through the exchanges set up by the Affordable Care Act, the healthcare law better known as Obamacare.

    The push is important because the people signing up through the exchanges over the past few years have skewed older and have led to significant losses for some insurersoffering plans through Obamacare.

    Generally, people who are young and healthy pay into the system while older, sicker people are net losses for insurers, so having an older customer base can be problematic for the companies.

    Yet in the first quarter of this year, the percentage of adults ages 25 to 34 lacking insurance, 15.9%, was double what it was for people ages 45 to 64 (8.1%), according to a report from the Centers for Disease Control and Prevention.

    In turn, health-insurance companies have started to cut bait on the losses and remove their plans from some states. Major insurers including Aetna, UnitedHealthcare, and Cigna have all reduced their exchange business.

    To reach millennials in the crucial open-enrollment period, it appears the administration is ready to dramatically expand its outreach channels.

    U.S. President Barack Obama (R) talks next to Secretary of Health and Human Services Sylvia Burwell before the start of a Cabinet Meeting in the Cabinet Room at the White House in Washington, November 7, 2014.  REUTERS/Larry DowningSylvia Burwell, the secretary of Health and Human Services, said that in addition to typical emails and phone calls to young people without coverage, the administration was even partnering with the social live-stream platform Twitch to reach young people where they get their entertainment. Twitch is used primarily to stream people playing video games.

    Burwell also said that the Health and Human Services Department would take part in other "paid partnerships with online platforms that are on the cutting edge, reaching young people when they're most likely to be plugged into media and entertainment," and that the HHS had updated its mobile site, since mobile has become an increasingly important mode of consumption for millennials.

    Another element that should prod more millennials to sign up is the full tax penalty for not having coverage taking effect this year. Additionally, proposed plans from the Centers for Medicare and Medicaid Services will make it harder for millennials to sign up outside the open-enrollment period. These policy penalties will make it more urgent for young people to get covered.

    Thus, with the ACA open-enrollment period starting in a little over a month, on November 1, the Obama administration is in do-or-die mode to get the word out on signing up for healthcare. With the slew of insurers pulling out of the ACA marketplaces and a loud chorus declaring Obamacare to be in a "death spiral," the outreach takes on a sense of urgency in the final year of the Obama presidency.

    If the administration can sign up more millennials and start to show that the exchanges can work, it could inspire more insurers to get back into the exchanges. If not, it could be another blow to one of Obama's signature legislative achievements.

    SEE ALSO: Millennials are finally defying one of the economy's most troubling trends

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    Barack Obama

    WASHINGTON (AP) — The Obama administration failed to follow the president's health care law in a $5 billion dispute over compensating insurers for high costs from seriously ill patients, Congress' investigative arm said Thursday.

    The opinion from the Government Accountability Office is a setback for the White House and bolsters Republican complaints that administration officials bent the law as problems arose carrying out its complex provisions. The finding may complicate efforts to stabilize premiums in the law's insurance marketplaces, where about 11 million people get coverage.

    At issue is how the administration has handled a little-known, but important program called "transitional reinsurance." Working in the background of the law's coverage expansion, the three-year program collects fees from employer and other private health insurance plans and channels the money to health plans that face large claims for treating patients with catastrophic medical problems.

    The law specified that the fee would collect $25 billion from 2014-2016, and $5 billion of that would go directly to the Treasury. But when fee collections fell short, the Health and Human Services Department failed to allocate a share of money to the Treasury, saying it would do so later as more money came in.

    Republicans cried foul and asked the GAO to examine the issue. On Thursday, Republicans got the ruling they had hoped for.

    "HHS lacks the authority to ignore the statute's directive to deposit amounts (collected under the program) in the Treasury," the GAO's general counsel, Susan A. Poling, wrote.

    The administration's interpretation of the law "is inconsistent with the plain language of the statute," she said.

    Republicans accuse the administration of shortchanging the Treasury to "bail out" the health care law.

    "The administration should end this illegal scheme immediately, and focus on providing relief from the burdens of this law," Sen. John Barrasso, R-Wyo., said in a statement. Barrasso is a leader on health care issues.

    Previously, Republicans have complained that the administration was flouting the law when it delayed a requirement that larger employers must offer coverage to their workers.

    It didn't help the administration's case with GAO that the original HHS plan for distributing the fee money called for paying the Treasury.

    The administration had no immediate response to the GAO opinion. The GAO has no enforcement power over its ruling, but congressional opponents of the health law could use the finding to write legislation that forces HHS to pay the Treasury. Generally, lawmakers of both parties respect GAO's rulings on federal budget issues.

    The reinsurance program is one of three financial backstops created by President Barack Obama's law to support insurers as they built their customer base in the new markets for subsidized private insurance. Reinsurance provides a safety net for insurers by helping to pay large claims, an important consideration for companies selling coverage to a customer pool they didn't know.

    The marketplaces have been tough for insurers, due in part to less-than-promised support from a different government stabilization program. Insurers also say they've been swamped by higher-than-expected claims and by customers who sign up for coverage, use it on expensive care and then stop paying premiums. Major carriers such as UnitedHealth Group and Aetna have scaled back their role after forecasting annual losses that will top $300 million.

    ___

    Associated Press Health Writer Tom Murphy contributed to this report.

    SEE ALSO: The White House is kicking off a big push to fix Obamacare's largest problem

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    Harken Health Insurance, a startup and part of UnitedHealthcare that offered low-cost health plans through the Affordable Care Act (ACA) exchanges, is leaving the marketplace.

    Harken had been launched in early 2016 to create tailored plans that would make money in the ACA, better known as Obamacare exchanges.

    UnitedHealthcare, the parent company, has also rolled back its offerings through the exchanges due to financial losses.

    Harken offered plans in Chicago and Georgia, but will no longer in 2017. The insurer had previously announced in August that it would not expand into the South Florida exchanges as it had planned.

    "Harken Health remains committed to our innovative model of insurance paired with access to relationship-based care and we look forward to continuing to offer plans to individuals and employers who purchase coverage outside of the exchange," said the company in a statement to Business Insider.

    The firm said it will continue to offer plans in various states to individuals outside of the Obamacare exchanges.

    The move by Harken is the second Obamacare-focused startup that has rolled back ACA plans. Oscar, the online health-insurance startup that works through the exchanges, announced in August that it would pull out of two exchanges — in Dallas and New Jersey.

    Large firms such as Aetna, UnitedHealth, and Humana have also pulled large portions of their Obamacare offerings earlier in 2016.

    All of the firms have said that the pool of customers they have covered through the exchanges have been older and sicker (and thus more expensive) than they expected. 

    SEE ALSO: The White House is kicking off a big push to fix Obamacare's largest problem

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    The "Thanks, Obama" joke has been a part of pop culture for a few years now. Here's its origin story.

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    obama minnesota frown

    Another state is seeing its Affordable Care Act — better known as Obamacare — exchanges hit some serious roadblocks.

    In a release on Friday, Minnesota Commerce Commissioner Mike Rothman, who oversees the exchanges on which Minnesotans not receiving insurance through their employers or government programs can get insured, said premiums will rise as much as 67% for some insurers.

    According to the release, Rothman said the exchanges are "on the verge of collapse" as Blue Cross Blue Shield pulled out of the market, citing large financial losses. This exit is indicative of the mood of the other insurers, who Rothman said are "prepared to exit this market."

    Part of the problem is that the federal reinsurance program, which used to assist insurers that may have taken on sicker patients and endured losses, is expiring this year, removing a safety net for many insurers.

    "The Commerce Department pursued every option within its power to avert a collapse this year," Rothman said in the release. "We succeeded in saving the market for 2017, with only Blue Cross leaving. But the rates insurers are charging will increase significantly to address their expected costs and the loss of federal reinsurance support."

    According to The St. Paul Pioneer Press, Rothman described it in even more dire terms.

    "These rising insurance rates are unsustainable and unfair," Rothman told The Pioneer Press' David Montgomery. "This is a real emergency situation."

    The issues facing Minnesota are familiar — states like Tennessee are also seeing large premium increases and a lack of competition among providers as companies exit the market. Even large, national insurers like Aetna, Humana, and United Healthcare have been rolling back their Obamacare coverage.

    According to US Department of Health and Human Services spokesperson Jonathan Gold, the rise in premiums would be offset by subsidies, and many Minnesotans would not be affected.

    From Gold's statement (emphasis added):

    "Headline rate changes do not reflect what these consumers actually pay because tax credits reduce the cost of coverage below the sticker price and shopping helps consumers find the best deal. Meanwhile, for consumers with employer coverage, premiums have grown at some of the slowest rates on record since the Affordable Care Act was enacted.

    "All Minnesota consumers, no matter where they get their coverage, are benefiting from ACA protections like no more exclusions for preexisting conditions, no annual limits on coverage, and no cost sharing for preventive services."

    About 250,000 people, or 5% of the state population, get insurance through the exchanges. Additionally, subsidies are available for people who make $47,520 or less a year, or for a family of four making less than $97,200 in total.

    Rothman said that for those not receiving subsidies, the premium increases are "unsustainable and unfair" and called for reform. Unfortunately, on the federal level, the standoff between the Republican-led Congress and President Barack Obama make any reform unlikely until at least after the election in November.

    The Centers for Medicare and Medicaid Services, the federal regulator that oversees the marketplaces, has announced reforms that could help alleviate some of the issues and mitigate losses for insurance companies. Additionally, the Health and Human Services Department last week rolled out an initiative to get young people to sign up for insurance through the Obamacare exchanges, which would reduce losses for insurers

    These reforms, however, are of little solace for Minnesotans this year.

    SEE ALSO: A startup specifically designed to sell Obamacare is quitting Obamacare

    SEE ALSO: The White House is kicking off a big push to fix Obamacare's largest problem

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    doctor patient

    Millions of American are leaving money on the table when buying health insurance, according to the Department of Health and Human Services.

    People who do not receive insurance from their employer or a government-sponsored plan such as Medicaid or Medicare are currently able to get individual insurance through the exchanges set up by the Affordable Care Act, the healthcare law better known as Obamacare, or they can buy coverage directly from a private health insurer.

    The advantage of going through the Obamacare exchanges, or marketplace, HHS said, is that buyers there could qualify for income-based federal subsidies that can alleviate some of the cost of premiums.

    "We estimate that about 2.5 million individuals currently purchasing individual market coverage off-Marketplace have incomes that could qualify them for tax credits,"the HHS report said. "If these individuals instead purchased qualified health plans (QHPs) through the Marketplace, tax credits that could cover part of the cost of their premiums would be available."

    To qualify, a household of four must make less than $100,000 in income, HHS said. Today, roughly 6.9 million people buy individual health insurance off-marketplace, meaning about a third of those not on the marketplace could receive some relief.

    Additionally, HHS estimated that most Americans who do not have insurance would qualify for a discount from the federal government.

    "In addition to those already covered in the individual market, we estimate that 10.7 million uninsured individuals are eligible for Marketplace coverage, and that 9.0 million of them (84 percent) may qualify for tax credits based on having incomes below 400 percent FPL,"the report said.

    The states with the most people with off-marketplace insurance plans were California (313,000 people with off-marketplace plans that could receive subsidies), Texas (252,000), Florida (153,000), North Carolina (138,000), Illinois (130,000), and Pennsylvania (111,000).

    The note from HHS comes just weeks before the open-enrollment period for Obamacare, in which HHS hopes to ramp up coverage for all people, but especially young people. Getting young people onto the exchanges would help to recalibrate the pool of customers that today is older and less healthy than originally hoped for, leading to losses for some insurers.

    By touting the subsidies, HHS is most likely aiming to attract reluctant people and decrease the risk in the pool of people buying Obamacare.

    SEE ALSO: The White House is kicking off a big push to fix Obamacare's largest problem

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    south carolina state flag

    South Carolina became the fifth state to have only one company offering health insurance through its Affordable Care Act exchange.

    The South Carolina Department of Insurance announced on Tuesday that Blue Cross Blue Shield of South Carolina will be the sole provider for South Carolinians looking to get covered through the ACA, better known as Obamacare, according to The Post and Courier.

    Aetna and United Healthcare both announced earlier in 2016 that they would pull out of the state's exchanges, and BCBS of SC said it would no longer offer coverage through its BlueChoice subsidiary, according to The Post and Courier's Lauren Sausser.

    Sausser also noted that Obamacare premiums will increase by an average of 27% in the state.

    South Carolina becomes the fifth state to officially be left with a single insurer in the Obamacare exchanges, with Alabama, Alaska, Oklahoma, and Wyoming. Based on current projections, North Carolina and Kansas could also be left in the same boat.

    obamacare competition problems map

    Insurance firms have struggled with a group of enrollees that have been sicker and older than expected, leading to large losses for the firms. This has been especially acute in states that did not expand their Medicaid offerings, such as South Carolina.

    This has caused insurers like Aetna and United Healthcare to ditch some of the more rural coverage areas, leaving residents of those areas high and dry. Even states with more competition are facing strains, such as Tennessee and Minnesota.

    On the positive side, most of the premium increases, while intense, appear to be a normalization after insurers underpriced plans in the first few years of the law.

    Jonathan Gold, a spokesperson for the Department of Health and Human Services, said in a statement that the changes are not representative of the experience of all of South Carolinians. From Gold's statement:

    "HHS projected that the majority of South Carolina Marketplace consumers would still be able to purchase coverage for less than $75 per month even if all Marketplace premium rates were to increase by double digits. Meanwhile, for the 50 percent of people in South Carolina with employer coverage, premiums have grown at some of the slowest rates on record since the Affordable Care Act was enacted.

    "All South Carolina consumers, no matter where they get their coverage, are benefiting from ACA protections like no more exclusions for preexisting conditions, no annual limits on coverage, and no cost sharing for preventive services."

    The 2017 open enrollment period for Obamacare begins November 1. The Obama administration and health officials are expected to make a strong push to get younger people to sign up for ACA plans to alleviate some of the stress on the system.

    SEE ALSO: 2.5 million Americans are leaving money on the table while buying health insurance

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    barack obama bill clinton

    Republicans are slamming President Barack Obama and his flagship Affordable Care Act, better known as Obamacare, by highlighting the words of another former Democratic president who happens to be the spouse of the current Democratic nominee.

    On the campaign trail on Monday, former President Bill Clinton called parts of the law the "craziest thing in the world" because of a gap in subsidies that leaves many middle-income families without support.

    Obamacare currently provides subsidies for a family of four that makes less than roughly $100,000 combined to receive health insurance through the ACA's public marketplaces if they do not have insurance through their jobs or government programs like Medicare or Medicaid.

    This leaves families making above that threshold without access to subsidies, but still requires them to get health insurance because of the law's mandate. Given the increasing costs of health insurance premiums and the problems facing the ACA exchanges, Bill Clinton bemoaned the squeezing of middle-class families.

    "It doesn't make any sense," Bill Clinton said at a campaign stop for Hillary Clinton. "The [health] insurance model doesn't work here. It's not like life insurance. It's not like causality. It's not like predicting flood. It doesn't work."

    Bill did, however, say that the system before the ACA was even worse. He touted Hillary's plan to expand Medicaid and Medicare to catch those people missing out on subsidies.

    Seizing on Bill's statement, some Republicans have used the former president's own words against Obama and the Democratic Party weeks ahead of the November 8 presidential election.

    Republican nominee Donald Trump on Tuesday touted the misstep, saying Bill "went through hell last night" after Hillary heard his comments. Trump added that he wanted to "thank him for being honest."

    "Can you imagine what he went through after making that statement?" Trump said. "He went through hell, but honestly there have been many nights where he's gone through hell with Hillary."

    The Trump campaign on Wednesday continued to highlight Bill's line. Campaign manager Kellyanne Conway said Bill was their campaign's "best surrogate" during an appearance on MSNBC's "Morning Joe."

    And House Speaker Paul Ryan, who has led the legislative charge to repeal the law in the chamber, said on Twitter that he agreed with Bill's comments:

    Bill walked backed his original comments during a rally in Steubenville, Ohio, on Tuesday.

    "I want to say this one thing about the healthcare law, because that’s another thing they've been trying to tangle in — I supported the Affordable Care Act," he said. "I support it today."

    Here's a video of Bill Clinton's original comments:

    SEE ALSO: 2.5 million Americans are leaving money on the table while buying health insurance

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    barack obama bill clinton

    Bill Clinton managed to get himself into hot water this week by stating the obvious about outcomes for many enrollees of the Affordable Care Act.

    “It’s the craziest thing in the world,” the former president told a Flint, Michigan audience at a rally for his wife, who plans to keep and expand Obamacare.

    People in the government-controlled individual markets gained access to health insurance Clinton said, but “wind up with their premiums doubled and their coverage cut in half.”

    Many of them, he noted, “are small business people and individuals who make just a little too much to get any of these subsidies.”

    That just covers the premiums, which will skyrocket again in 2017. Clinton neglected to mention the other part of the equation that squeezes everyone regardless of whether they qualify for premium subsidies or not – deductibles.

    Except for an annual wellness check, any health care provided to consumers has to come out of pocket until the annual deductible has been met. In 2016, the average bronze plan deductible was $5,731 for individuals and $11,601 for families.

    Obama doctors Obamacare

    For a 40-year-old individual in 2016, the cost of this care would be $3,479 in premiums plus the deductible before the first benefit could be covered – a total of $9,210 out of pocket. Even if subsidies pared premiums all the way down to Barack Obama’s promised $75 per month, it would still require the consumer to spend over $6600 for anything but a basic wellness check, a service that would cost a few hundred dollars at most, before having the first benefit covered. And that situation will only get worse in 2017, as insurers use increases in deductibles to buffer the premium hikes that have already been signaled.

    In an attempt to escape this “craziest system,” some consumers – especially lower-income workers – had tried a workaround authorized by Congress and exempted from insurance-coverage requirements more than a decade before Obamacare appeared on the horizon. Insurers have offered “fixed-benefit indemnity” plans for twenty years, which pay out set amounts for various events regardless of the actual costs incurred.

    Rather than act as third-party payers that get between the consumer and the provider and therefore hinder price signals, fixed-benefit plans act as financial backstops for consumers who then negotiate on price with the providers directly.  A day in the hospital might get $200 coverage, for instance, or a clinic visits $100. 

    Best of all for consumers with tight budgets, the premiums run around $1000 a year and have no deductibles or coinsurance requirements. That premium pricing is nearly the same as an Obamacare plan with full subsidies on the exchange, and unlike a bronze plan, would pay out immediately rather than wait for the consumer to cough up the first $5731. Younger, healthier, and less financially secure consumers can choose sufficient coverage and pay the mandate tax fee rather than get roped into high deductibles and high premiums, or perhaps use one in tandem with other coverage. Millions of consumers use that option in one form or another to this day. 

    obamacare

    That has the Obama administration seeing red. In 2014, Health and Human Services issued a rule forbidding the sale of fixed-benefit plans unless used as supplemental insurance for insurance with approved, comprehensive coverage. In essence, the rule stole a lower-cost option from those who could least afford it while allowing wealthier Americans the ability to buffer the skyrocketing deductibles in the ACA exchanges. 

    There was a big problem with this rule, however – Congress had explicitly authorized fixed-benefit plans in 1996 by statute, and nothing in the Affordable Care Act repealed that law. In July of this year, a federal appeals court struck down the rule, rejecting the Obama administration’s argument that the existence of such plans confused consumers. 

    The ruling upheld the original district court’s decision, which castigated HHS for promulgating a rule that “has no basis in the statutory text it purports to interpret and plainly exceeds the scope of the statute.” The appeals court rebuked the administration, writing, “Disagreeing with Congress’s expressly codified policy choices isn’t a luxury administrative agencies enjoy.” 

    The White House hasn’t quite gotten that memo. HHS has floated a new attempt to drive fixed-benefit plans out of the market, this time by forcing insurers to pay theexact same dollar amount for any payable event. In other words, whatever payment the insurer provides for a day in the hospital would have to equal what they pay for a doctor visit, and vice-versa.

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

    Not only is this irrational, but it also has no precedent in insurance or any other form of commerce. Rather than make fixed-benefit plans less confusing – the ostensible rationale for the Obama administration’s hostility toward such offerings – it makes them almost incomprehensible and completely unmanageable. 

    This move is a measure of the administration’s desperation with their signature legislative achievement. The White House wants to force consumers to abandon these plans so that they will have no choice but to get plans approved by bureaucrats in Washington DC, but especially those younger and healthier consumers who have every reason and financial incentive to use fixed-benefit plans. Forcing them to pay the higher premiums into the ACA risk pools with their low utilization rates might –might– slow down the rapid increases in premiums that have plagued Obamacare since its first year.

    Congress approved these plans as solutions for consumers who don’t require comprehensive insurance but who do need a rational, low-cost backstop for a moderate level of use. That was a step in the right direction.The White House’s heavy-handed attempt to force everyone into their failing Obamacare system is several steps in the wrong direction.

    In fact, to quote Bill Clinton on the ACA and its irrational approach: “It’s not like life insurance, it’s not like casualty, it’s not like predicting floods – it doesn’t work.”

    SEE ALSO: Republicans are crushing Bill Clinton for calling Obamacare 'the craziest thing in the world'

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    trump clinton debate

    Donald Trump and Hillary Clinton sparred over Obamacare during the second presidential debate on Sunday, outlining how they would reform the health insurance system.

    "Obamacare is a disaster," Trump said. "You know it, we all know it."

    The candidates responded to a question on how they would bring down the costs of healthcare which surged after the Affordable Care Act — nicknamed Obamacare — was passed. 

    Americans are paying more out of pocket for their medical care than ever before, partially because of the rise of high-deductible plans. Also, the percentage of Americans' income spent on healthcare is increasing.

    Trump said the current method of fixing this is to ask Congress for more money, amid already high levels of national debt. 

    "Obamacare will never work," Trump said. "It's very bad, very bad health insurance."

    He said Obamacare was headed in the direction of Canada's "catastrophic" publicly funded health insurance, and said Canadians come to the US to treat dire, expensive conditions. 

    Clinton agreed that premiums were too high, adding that it is a good thing that many more people now have access to health insurance compared to the numbers before Obamacare was passed. 

    Clinton said, "if we rip it up and throw it away, what Donald is not telling you is we just turn it back to the insurance companies — the way it used to be. And that means the insurance companies get to do pretty much whatever they want."

    She also noted that the Affordable Care Act means women can't be charged more than men under the act, and insurance companies can't deny patients coverage because of pre-existing conditions. 

    SEE ALSO: Live coverage of the debate

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    doctors patient healthcare

    A large chunk of Americans believe that they are getting worse healthcare than they used to.

    According to a Morning Consult poll sponsored by the American College of Emergency Physicians, 30% of Americans surveyed said that their healthcare coverage has gotten worse over the past year whereas only 15% said it has improved. 51% said it was generally unchanged.

    Additionally 24% of Americans said they had lost access to their doctor in the last year due to changes in their insurance company's coverage network.

    On the cost side, 55% of those surveyed said that their healthcare costs had increased, with 20% of Americans saying their costs had gone up "much more" according to the poll. Only 11% said they were paying less or much less according to the poll.

    Perhaps most startling, the poll found that many Americans are delaying care until their condition forces them to see a doctor due to costs. 30% of those surveyed said they delayed or avoided emergency care because of the cost.

    Out-of-pocket costs for healthcare have been skyrocketing, so it isn't a surprise a large number of Americans noticed a cost increase. On the other side, however, the total amount spent on healthcare in America is growing at the slowest pace in decades and the cost of premiums is also going up slower than in years past.

    These concerns come on the eve of the open enrollment period for the Affordable Care Act, better known as Obamacare, exchanges. Healthcare policy and helping Americans control healthcare costs was also an issue of contention at Sunday night's second presidential debate.

    The poll surveyed 2,015 registered voters from across the United States.

    SEE ALSO: Republicans are crushing Bill Clinton for calling Obamacare 'the craziest thing in the world'

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    Americans are voicing growing discontent with the quality and cost of their health insurance coverage.

    Nearly one in three voters recently surveyed by Morning Consult said that their health insurance coverage has become worse in the past year, while just 15 percent said that it had improved.

    The survey, commissioned by the American College of Emergency Physicians and conducted among 2,016 registered voters Sept. 8-10, documented numerous other complaints about the health care system:

    • Fifty-five percent of those interviewed said they’re paying more for their insurance coverage than the previous year.
    • Twenty-four percent reported that they lost contact with their family physicians because they were out of network and too expensive to continue to use.
    • Perhaps most troubling, 25 percent said that a medical condition got worse after they delayed getting emergency medical care in the past year out of fear their health insurance wouldn’t cover the cost.

    On that last point, Jay Kaplan, president of the American College of Emergency Physicians, said in a statement on Tuesday that, "As a physician, it greatly concerns me that people are waiting until their medical conditions deteriorate to seek emergency care, which can have lifelong consequences.”

    Kaplan said that insurance companies bear much of the blame for selling policies that force patients to cover so much of their own costs. “Many people … are shocked at how little their insurance pays,” he wrote.

    Joseph Antos, a health care expert with the American Enterprise Institute, said on Tuesday that consumers are being swept up in an historic shift in the health insurance paradigm since the advent of Obamacare that is prompting many of the complaints.

    “Certainly one of the major sources of consumer discontent is that their insurer can’t make a profit,” Antos said in an interview. “If their insurer can’t make a profit, the insurer is going to find ways to cut costs. That means tighter networks, that means higher deductibles and co-payments – all the sorts of things we would hope that insurance would cover … They can’t eliminate coverage for certain kinds of benefits, but they can certainly make it more expensive for the consumer.”

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    Democratic Gov. Mark Dayton of Minnesota on Wednesday said the Affordable Care Act, the healthcare law better known as Obamacare, was getting too expensive for people in his state.

    "Ultimately I'm not trying to pass the buck here, but the reality is the Affordable Care Act is no longer affordable," Dayton said, according to CBS Minnesota.

    The law's public exchanges, available to people who do not receive employer-based health-insurance coverage, have lost several large insurers in the past year, and premium costs have soared.

    Mike Rothman, Minnesota's commerce commissioner, said on October 3 that the exchanges were "on the verge of collapse" after some premiums were hiked by 67% for 2017.

    Dayton echoed those same sentiments on Wednesday night.

    "The Affordable Care Act has many good features to it — it has achieved great success in terms of insuring more people, 20 million people across the country, and providing access for people who have preexisting conditions alike — but it's got some serious blemishes right now and serious deficiencies," Dayton said, according to CBS.

    The exchanges in Minnesota are relatively small: Only 250,000 people in the state receive their health insurance through the Obamacare exchanges, but the state's struggles underscore some national trends.

    Insurers have been pulling back from the exchanges as the pool of people signing up has been older and sicker than expected. With too few younger people signing up to offset that cost, some insurers have lost money and either shrank their coverage through the exchanges or raised premiums.

    Insurers that have pulled some of their Obamacare coverage include giants like Aetna, Humana, and UnitedHealthcare as well as startups like Oscar and Harken Health.

    The Obama administration hopes to offset these losses through a push to sign up more millennials and young adults during this year's open-enrollment season, which runs from November 1 through the end of January.

    The law has become an issue on the campaign trail, with both major-party presidential nominees suggesting changes to one of President Barack Obama's signature legislative achievements.

    Whether those changes can save the exchanges in Minnesota remains to be seen.

    SEE ALSO: Minnesota's Obamacare exchanges are in an 'emergency situation'

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    Mark Dayton

    Few governors in the nation greeted the Affordable Care Act (ACA) with more enthusiasm than Mark Dayton.

    The Minnesota Democrat hailed the new program as the apex of progressive governance and made sure the DFL-controlled legislature approved the Mnsure state insurance exchange. 

    Not even a series of disasters in Mnsure implementation shook Dayton’s confidence in Obamacare, refusing to accept a recommendation in January 2014 from an independent consultant to shut down Mnsure and rely on the HHS federal exchange.

    Instead, Dayton poured tens of millions more into the state exchange, insisting that the rocky beginning belied Obamacare’s glorious and successful future. 

    That was then; this is now. On Wednesday, Dayton declared the status of the individual insurance market an “emergency” and that the Affordable Care Act was an oxymoron. “Ultimately, the reality is that the Affordable Care Act is no longer affordable for an increasing number of people,” Dayton told the media.

    Dayton’s remarks came a week after Bill Clinton admitted that Obamacare was “the craziest thing in the world,” and that consumers “wind up with their premiums doubled and their coverage cut in half.” 

    Perhaps Dayton felt that Clinton gave him enough political cover to admit the obvious, but Minnesotans might need to use their coverage to remedy the whiplash from following Dayton’s lead.

    Three years ago, the governor bragged that the state exchange would have the lowest rates in the nation, thanks in large part to the number of insurers that sold policies without federal control of the marketplace. Those advantages got wiped out a year later when insurers demanded double-digit increases to stick with Mnsure. 

    The state’s largest insurer in Mnsure did not bother to ask for a rate hike for 2015 – Preferred One shut down its exchange operations instead. At that time, Preferred One had sold 59 percent of the plans purchased through Mnsure but discovered that the business model made it impossible to succeed.

    Mnsure, they announced, was “not administratively and financially sustainable,” despite all of the happy talk from Dayton and the Obama administration. 

    Two years later, Preferred One’s point has been validated. State commerce commissioner Mike Rothman approved rate hikes for 2017 that pushed prices 50 to 67 percent higher than 2016’s premiums.

    That follows price hikes for 2016 of 14 to 49 percent, making it three straight years of beatings for Minnesota consumers on the individual insurance market.    

    obama obamacare doctors

    Rothman had little choice in the matter. As the Star Tribune notes, all seven of the remaining insurers in the state had threatened to follow Preferred One out the door without the massive rate hikes.

    Even with Rothman surrendering to the realities of centrally controlled economies, Blue Cross Blue Shield will still exit Mnsure at the end of 2016. The massive price hikes, Rothman said in September, were “a stopgap for 2017.” Foreshadowing Dayton’s announcement on Wednesday, Rothman added, “It’s an emergency situation – we worked hard and avoided a collapse.” 

    Avoided? As Dayton made clear yesterday, all Minnesota has done is postpone a collapse – and probably for only another year. The biggest problem for insurers in these markets is the unstable utilization rates, which prevent them from accurately calculating risk to set a tenable premium price. 

    The reason for that instability is that higher prices are disincentivizing healthier consumers from buying expensive comprehensive insurance policies as they opt instead to pay out of pocket for their minimal utilization and pay the tax penalty for non-coverage instead.

    Thanks to skyrocketing premiums and deductible thresholds, the likelihood of many consumers to have benefits applied to anything but a basic wellness check is remote at best, which makes the risk worthwhile. 

    As prices go up, the risk for healthier consumers gets lower and lower, which means more of them will opt out rather than pay thousands of dollars every year for benefits they never use. As that continues, utilization rates for the sicker and older consumers who have incentives to stay in the system continue to escalate, necessitating even higher premiums.

    Eventually, the system exhausts itself and collapses. That “death spiral,” long predicted by Obamacare critics, would have arrived in Minnesota now except for the approval of astoundingly high premium hikes – an event that political realities will almost certainly keep from being repeated. 

    obamacare

    Dayton called for the Minnesota state legislature to take action to prop up Mnsure, but even he recognized that the problem starts with the ACA itself. “It’s got some serious blemishes right now and serious deficiencies,” Dayton admitted of the law that he once championed. 

    Unfortunately, President Barack Obama will not make the same admission. The Associated Press reported that Obama still argues that massive premium hikes in Minnesota and several other states are a “one-year market correction,” despite repeated and increasing jumps in premiums over the last three years. 

    The White House solution consists of larger subsidies, tax credits, and restoring access to the general fund for risk-corridor repayment programs to insurers – a government bailout of the sector’s Obamacare losses. None of that addresses the perverse incentives and fatal structural flaws of the ACA; in fact, bailouts and increased subsidies will only perpetuate them and do more damage. 

    It’s time for the Obama administration to admit what a former Democratic president and a current progressive governor have openly declared. Obamacare truly is “the craziest system,” and it will only get crazier every year until it’s finally discarded. 

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