Thursday, February 4, 2016

Obamacare Hits 12.7 Million Enrollments––But Only Grows 8.5%

Today the administration announced that 12.7 million people signed up for coverage in the Affordable Care Act's insurance exchanges.

Said the HealthCare.gov CEO, "We knocked the lights out this year. We did a great job."

Let's take a closer look.

In 2015, the exchange enrollment totaled 11.7 million. By year-end 2015, that had shrunk to 9.1 million––a 22% decrease. The administration has said their goal is to have 10 million insured through the exchanges by the end of 2016.

If all 12.7 million of these enrollments complete their enrollment and pay for their coverage––those who signed up for March 1 effective dates have until the end of February to pay––and the same lapse occurs as occurred in 2015, they would have 9.8 million still covered at year end.

Again presuming all 12.7 million end up completing their enrollments, the Obama administration achieved an 8.5% growth over the 2015 open-enrollment.

According to an October Urban Institute study, by the end of June 2015, only 35% of those eligible for a subsidy in the Obamacare exchanges had enrolled.

If the administration can increase that by 8.5% this year, the Obamacare take-up rate for those subsidy eligible would be about 38%. Historically, insurers want to see a 75% participation rate to ensure they have enough healthy people signed up to pay for the sick.

A couple of observations:
  • This 8.5% increase in enrollment took place in the year the fines for not having insurance increased to the maximum under the health care law––obviously not having a big impact.
  • Obamacare is a monopoly for the individual health insurance market; if you don't buy it you are subject to fine, yet only a small percentage of those eligible have signed up after three open enrollments.
  • Most health insurers are famously losing money in Obamacare. They were hoping for a material improvement in the risk pool with an enrollment that did "knock the lights out." Since that has not happened there is little reason for optimism that the pending 2017 rate increases can be moderated especially in light of the fact that two of the three "3Rs" reinsurance provisions are going away in 2017.
As Carolyn Peterson of Avalere Consulting so diplomatically put it, "While exchange enrollment will meet the administration's modest 10 million goal, it does appear growth in this market has slowed. Efforts to expand participation in the long-term will be important to sustain robust plan participation and support continued improvement in the risk pool."

That is putting it mildly.

Monday, February 1, 2016

Why the Obamacare 2016 Open Enrollment Stalled: The Big Unwritten Story About Obamacare––How Unaffordable It Is For the Working and Middle Class

Back on December 22nd when the President triumphantly announced 6 million enrollments on HealthCare.gov and the administration pointed to "unprecedented demand" on the exchanges, I was the skunk at the garden party arguing in the Washington Post that it was all just churn as existing customers were only trying to escape all of the big rate increases.

Well guess what? It was all churn.

The administration will shortly announce the total number of people who signed up for Obamacare under the Affordable Care Act.

The number signing up in 2016 will turn out to be not much more than the number who signed up last year after those who don't pay are netted out––no sizeable gain in enrollment has been accomplished on a national basis. [February 4 Update: The increase was 8.5% over 2015.]

Tuesday, January 5, 2016

2016 Obamacare Outlook

One of the more Obamacare fluent reporters just emailed me a set of questions regarding the 2016 outlook for Obamacare.

I thought I would share my responses with you:

Thursday, November 19, 2015

UnitedHealth Group Losing Big Money and Threatening to Leave the Obamacare Exchanges--Because the Obamacare Insurance Business Model Does Not Work

It's official. The Obamacare insurance company business model does not work.

UnitedHealth Group just announced they expect to lose $700 million in the Obamacare exchanges and are seriously considering withdrawing from the program in the coming year.

This morning, the Wall Street Journal reported just about everybody else is losing their shirts in Obamacare as well:
Several other big publicly traded insurers also flagged problems with their exchange business in their third-quarter earnings Anthem Inc. said enrollment is less than expected, though it is making a profit. Aetna Inc. said it expects to lose money on its exchange business this year, but hopes to improve the result in 2016. Humana Inc. and Cigna Corp. also flagged challenges...

There are signs that broad pattern has continued--and in some cases worsened--this year. A Goldman Sachs Group Inc. analysis of state filings for 30 not-for-profit Blue Cross and Blue Shield insurers found that their overall company wide results were "barely break-even" for the first half of 2015.

Goldman analysts projected the group would post an aggregate loss for the full year--the first since the late 1980s. The analysis said the health-law exchanges appeared to be a "key driver" for the faltering corporate results, and the medical-loss ratio for the Blue insurers' individual business was 99% in the first half of 2015--up from 91% at that point in 2014, and 82% for the first six months of 2013.
Every health plan I talk to tells me that they don't expect their Obamacare business to be profitable even in 2016 after their big rate increases. That does not bode well for the rate increases we can expect to be announced in the middle of next year's elections.

Monday, October 26, 2015

Crocodile Tears Over the Failing Obamacare Co-Ops--The Canaries in the Obamacare Coal Mine

I can't believe what I've been hearing recently from Obamacare defenders over the failing Obamacare co-ops--the most recent count has eight of them going bust.

The biggest complaint seems to be that those mean Republicans forced these co-ops out of business because of a provision they included in the last budget.
Read my post at Forbes

Sunday, October 18, 2015

Flat Enrollment Estimates For 2016--Has the Obama Administration Given Up on Obamacare?

On Thursday, the Obama administration said they expect to have 10 million people enrolled on the Obamacare insurance exchanges in 2016. They further said they expect to sign-up only one in four of those still uninsured and eligible during the 2016 open enrollment scheduled to begin on November 1.

These are astonishing admissions.

In 2013 the Congressional Budget Office (CBO) estimated that the Obamacare insurance exchanges would enroll an average of 22 million people during 2016.

Given the original expectations how can we now not say this program is a terrible failure?

Read my post at Forbes




Wednesday, October 14, 2015

Ohio Governor John Kasich's Medicaid Expansion: Successful Governance is Very Hard Work

Presidential candidate John Kasich (R-Ohio) has taken a lot of criticism on the campaign trail for expanding Medicaid under Obamacare. But if his Medicaid expansion isn’t an extraordinary example of successful conservative governance I don’t know what would be.

See My Post at Forbes

Monday, August 17, 2015

Has Obamacare Really Reduced The Uninsured By 16 Million And Continued To Show Strong Growth?

Recent reports have touted a significant drop in the number of uninsured and generally credited Obamacare for it. And, other reports have recently highlighted about 950,000 more people signing up for Obamacare since the 2015 open enrollment closed but haven’t said anything about the number of people who dropped their coverage during the same period.

Many of these reports may be technically correct but hardly give an accurate picture.
See my post at Forbes

Monday, July 27, 2015

Health Insurer Merger Mania -- Muscle-Bound Competitors And A New Cold War In Health Care

It is doubtful that the dramatically escalating consolidation in both the health insurance industry and among hospitals and doctors will make our health care system either more efficient or more competitive.

This reminds me of the Cold War. Each side gets more powerful so that the other side can’t come to dominate it. The two sides finally get so big and powerful they reach a point of détente—let’s just agree to get along. Or, in the case of the Cold War, one side just ultimately spends the other side into submission.

That kind of environment doesn’t create more efficiency or innovation but undermines real competition just like you would expect one oligopoly facing off against another to do. We just end up with a few muscle bound players creating sizable barriers for new innovative and disruptive players to enter.
Read more on my Post at Forbes

Tuesday, July 21, 2015

California Senate Votes To Open Up Obamacare To 2.5 Million Illegal Residents

King V. Burwell Opponents Said Killing Subsidies Would Blow Up Obamacare­­––Now They Want To Open Up Unsubsidized Care To Illegal Californians

And consider this. Passage of the California legislation that has already cleared the Senate (SB 4) could be a real boon to the business of health care delivery in California. California’s impressive medical system could be the leader in international medical tourism. SB 4 would also make it clear that a foreign person could land at LAX, give Covered California a call and sign up for an almost full pay Platinum plan for a few hundred dollars a month, on the first of the following month when their coverage became effective show up at Cedars-Sinai Medical Center and have thousands of dollars of treatment, get back on the plane and go home, and then drop the coverage.

See my post at Forbes

Monday, June 29, 2015

Why The Affordable Care Act Isn't 'Here to Stay'­­­­--In One Picture

Why is Obamacare still so unpopular? Why aren’t the working class and middle-class signing up for it? Why is the Obamacare population sicker and causing so many big rate increases a year earlier than expected? Is Obamacare financially sustainable in its present form? Is it politically sustainable as it is?

Here is one picture that tells you just about everything you need to know to understand where Obamacare stands--politically and financially.

See my post at Forbes



Thursday, June 25, 2015

The King V. Burwell Decision

First, as any of us who know the market can appreciate, the Court just saved the Republicans from themselves. They were in no way ready to avoid the crisis that would have engulfed the individual market––half of those people on the exchange who would have lost their subsidies and the other half off-exchange that would have seen 30% to 50% rate increases––on top of the big increases already announced––without a quick fix.

Does this mean that Obamacare has cleared its last major hurdle?

Not a chance.

Obamacare has only enrolled about 40% of the subsidy eligible market in two years worth of open enrollments. That level of consumer support does not make Obamacare either financially sustainable or politically sustainable. The surveys say the 40% who have enrolled like their plans. Of course they do, they are the poorest with the biggest subsidies and the lowest deductibles. The working and middle-class have most often not signed up for Obamacare because it costs too much and delivers too little.

That Obamacare is not financially sustainable is evidenced by the first wave of big 2016 rate increases by so many large market share insurers. The next wave of rate increases a year from now will also be large and will be in the middle of the 2016 election.

These rate increases will further undermine the political sustainability of the law that has been reflected in five years of polling.

The attempt to scuttle the law through the Supreme Court was ill conceived and Republicans are very lucky it did not happen.

Now Obamacare has to stand on its own going into the 2016 elections and the growing evidence is that won't be any easier.

Thursday, June 18, 2015

The Republican Proposals to Extend the Obamacare Subsidies If the Supreme Court Ends Them Would Create a Huge Market Mess

While both the House and Senate plans would create a means for people to continue to be covered in the wake of any Supreme Court finding that ended the subsidies in the federally run states, what we so far know about these proposals is clearly unworkable in the market and would lead to very big and unfortunate unintended consequences.

See my post at Forbes

Wednesday, June 10, 2015

Why Are the Proposed 2016 Obamacare Rate Increases So Large?

Why The Big Obamacare Rate Increases Have Begun a Year Early?


One state after another is reporting big Obamacare rate increases––particularly from many high market share health insurers who have the best claim data.

Where are the rates going up and by how much?

Will regulators cut these rate increases back as they often did last year?

What is causing this a full year before the insurance company "3Rs" claim and risk corridor support payments are set to go away?

Are carriers just being conservative worried about the upcoming Supreme Court decision?

I tried to answer these questions and more in my latest post at Forbes.

Monday, June 1, 2015

The Eye Popping 2016 Obamacare Rate Increases Are Out

The Big Rate Increases Are Coming a Year Early


The Obama administration has posted the 2016 rate increases in excess of 10% that the Obamacare health plans are requesting.

There are a lot of them.

All of the federally run states have been posted and some for the state exchanges as well. Both California and New York do not have their rates on this site yet.

Some will quickly argue that many of these rate increases are subject to regulatory approval and can be rolled back. That's right. But this year the health plans have hard claim data to show the regulators and a 35% rate increase is hardly going to be rolled back to 5%.

Big rate increases like this are driven by a lot of claims experience––a lot of really lousy claim experience.

You will also notice that this list most often includes the big market share players, such as the Blues plans, in each of these states. These are the players with the best data.

That these big rate increases are coming a year before the "3Rs" reinsurance program is to end, that was supposed to subsidize the health plan's high claims experience, is not good news.

You can access the administration's website and look at all of them by state here.

To quickly see all of the 10%+ rate increases in a particular state just click on the state and enter a date range of 01/01/2016 to 01/01/2016. Leave the company field blank.

If you leave the dates blank, you can see the carriers' rate submission history since 2013. It's interesting to see what a particular carrier increased rates at the time of Obamacare's original launch and what they have layered on to costs since.

If you click on the company name on the left side, you will see a brief description of their justification for the rates.

For example, Blue Cross of Texas commented that it covered 730,833 individuals in 2014 with premium of $2.1 billion and claims totaling $2.5 billion––for a medical loss ratio of 119%. The plan further commented that, after the "3Rs" reinsurance adjustments, they lost 17% to 20% of premium in 2014––that would be more than $400 million. And, they are only asking for a 20% rate increase.

Sunday, May 31, 2015

The Columbia Journalism Review: "Why We Need Stronger Coverage of Covered California"

The California Press Gets a Critique It Has Long Deserved


Covered California, the Obamacare state-run health insurance exchange, has long been the subject of occasional posts on this blog––none of them flattering.

The constant spin in the face of facts that comes out of Covered California and the way the press, particularly in California, has often just reprinted that spin hasn't been appreciated here.

I am happy to report––and admittedly relieved––that it isn't just me that thinks the reporting has been less than objective.

But would you believe that conclusion would have come from the esteemed Columbia Journalism Review (CJR) in a story titled, "Why We Need Stronger Coverage of Covered California"? The journal is part of the Columbia Graduate School of Journalism.

In past months I have pointed out that:
And then there was former CBS News Emmy winning investigative journalist, Sharyl Attkisson, with her two part expose, "Incompetence, Mismanagement Plague California's Obamacare Insurance Exchange" and "Insider's Detail Culture of Secrecy at California's Obamacare Exchange" on The Daily Signal, that filled in the details behind all of the high expense, poor consumer service, and now dismal enrollment results for the more than $1 billion taxpayers spent in California on that Obamacare exchange.

All of this time hardly a critical peep came from the California press and it sure looked to me like they were all happier just to reprint Covered California's upbeat press releases.

In her Friday story, the Columbia Journalism Review's Trudy Lieberman said the following:
In recent months, Covered California has cited each of these measures ["good" enrollment news] to tout its success. And though outside analysts have raised some notes of caution, press coverage has largely followed the lead set by the exchange. The result is coverage that has too often been reactive, short on enterprise, and with missed opportunities to ask some necessary questions. Covered California may ultimately have a success story to tell––but it will need to face some sharper skepticism before we can be sure.
And also from the CJR story:
It can be exhausting to sort out all of the different metrics, and the state's healthcare reporters have had plenty of other stories. But going forward, the exchange warrants closer scrutiny than, for the most part, it got this year. And while reporters should definitely be attentive to outside evaluations both critical and positive...there is a role for journalists to play, too, in getting out there and talking to people...
With all due respect to Lieberman, I would have said it more succinctly to the press: Just do your job.

Monday, April 27, 2015

Republicans Would Extend Obamacare Subsidies If the Supreme Court Strikes Down State Exchange Payments––But With Lots of Conditions

The Republicans should offer an unconditional subsidy extension if the Supreme Court strikes them down


Wisconsin Senator Ron Johnson (R) has offered a plan to extend the Obamacare state exchange subsidies into 2017 if the Supreme Court strikes them down this summer. The Republican Senate leadership is supporting his bill.

But Johnson has some pretty big conditions:
  • Existing subsidies in the federally run exchanges would continue until September 1, 2017.
  • The individual mandate would be struck down.
  • The employer mandate would also be repealed.
  • Obamacare's benefit mandates––the essential health package requirements––would be struck down enabling insurance companies to market any health insurance plans that complied under state law. 
  • Consumers could keep any pre-Obamacare policies still in effect.
  • The subsidy extension would not apply to new enrollees––just those individuals and families getting subsidies at the time the Senator's bill became law.
On the face of it, Republicans are smart to demand the most unpopular parts of Obamacare should be immediately scrapped.

But, Democrats just aren't going to go for this. They will point out that while the individual mandate was being struck down the guarantee issue provisions of Obamacare would still be intact leading to significant anti-selection and problems for the health insurance markets without at least a viable alternative to the individual mandate.

Tuesday, April 21, 2015

$1 billion in Federal Tax Dollars and a One Star Rating on Yelp––Quite an Expose––Behind the Scenes at Covered California

California's Obamacare Insurance Exchange Posts Poor Results and is the Subject of an Expose


What a difference a year makes.

Last year the California Obamacare insurance exchange, Covered California, was touted as the poster child for the Obamacare launch. Supporters said it worked well, enrolled lots of people, and was off to the kind of start that proved how successful Obamacare could be.

But after the second open enrollment new sign-ups have hit a wall, customer renewal rates are among the worst in the country, and consumer complaints are growing:

Thursday, April 2, 2015

Wisconsin Governor Scott Walker's Medicaid Policy––and Now His Position Not to Save Insurance Subsidies if the Supreme Court Strikes Them Down––Says a Lot About How He Would Govern as President

Speaking to a conservative group in Wisconsin this week, presumptive presidential candidate Scott Walker said he would not move to establish a state exchange in order to preserve the Obamacare federal insurance exchange subsidies if the Supreme Court strikes them down in an expected June ruling:
We're going to push back. The President of the United States––they've got to come up with a solution...They're going to try to put pressure on us but we need to put the pressure right back on them.
The 186,000 Wisconsin residents now getting subsidized health insurance from Wisconsin's federally run exchange would lose their premium support if and when the Supreme Court strikes down the Obamacare subsidies.

This isn't the first time Walker has tried to clearly establish himself as the candidate with the strongest conservative credentials––and biggest opponent to Obamacare.

In 2013, Walker refused to expand Medicaid in Wisconsin under Obamacare and instead came up with a plan of his own.

About Walker's Medicaid alternative, the Milwaukee Journal Sentinel––which has supported his candidacy for governor––wrote in a recent editorial:
For the governor, it was about a conservative standing firm against Obamacare. But for taxpayers, it was about losing the chance to save up to $345 million over the next two years...

Walker's decision cost taxpayers more than $100 million in the current two-year budget. An estimated 84,700 more people could have been covered under BadgerCare [Medicaid] had he taken the additional federal money.

And, for what? To make a political statement. Wrong. Wrong. Wrong.
Two years later just how well has Walker's Medicaid alternative done? See my op-ed in Forbes here.
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