“Who Knew?”: Obamacare Is Such A Disaster That Even More Insurers Want To Be Part Of It
There are still plenty of days when Obamacare looks bad. Tuesday wasn’t one of them.
The Department of Health and Human Services announced that more insurers were joining the Affordable Care Act’s new marketplaces—you know, the places where people can buy coverage on their own and, depending on their incomes, qualify for subsidies. How many more insurers are participating? Quite a few, it turns out. According to HHS, the net increase is more than 25 percent. That should translate to more options for people buying coverage. The increased competition should also help keep premiums relatively low.
The data is preliminary, based on 44 states for which HHS had information. And of course the sheer number of insurers offering coverage is just one sign of how the law is doing. If you’re actually buying insurance, you don’t simply want choices. You want good choices. You want to know that the insurance will give you access to doctors and hospitals when you need them. You want to know that the coverage pays your bills adequately. And so on.
Still, Obamacare critics hadn’t predicted the markets would evolve this way. On the contrary, they expected that young and healthy people would stay far away from the new marketplaces, because the new coverage would be pricier than what they were paying before. Without enough business, the argument went, insurers would get skittish and withdraw. At best, the marketplaces would all become oligopolies and monopolies, with just a handful of insurers continuing to sell policies. At worst, the whole scheme would fall apart. That quite obviously isn’t happening.
Trouble could still arise. By design, Obamacare includes a series of provisions designed to insulate insurers from major losses in the first three years. I usually describe them as “shock absorbers.” Many other policy wonks refer to them as the three Rs, for reinsurance, risk corridors, and risk adjustment. Two of the three, risk corridors and reinsurance, are temporary measures set to expire in 2016. More knowledgeable critics of the law, like Bob Laszewski and Megan McArdle, have warned that more insurers could abandon the market or at least jack up their premiums once those measures expire.
I can’t tell you with certainty whether they are right or wrong. Always in motion is the future, as a famous prophet once said. But keep in mind that gloomy, even dire, predictions about Obamacare’s marketplaces are nothing new. One of my favorites was an op-ed that ran in the Wall Street Journal at the end of last year. The author was John Cochrane, a professor of finance at the University of Chicago. The headline was “What to Do When Obamacare Unravels”—not “if,” mind you, but “when.”
At the time, with unexpected plan cancellations and the website problems very much on people’s minds, betting against the program working probably seemed like a good idea. Who wants to make that kind of bet now?
By: Jonathan Cohn, The New Republic, September 24, 2014
“She Surely Paid Her Dues”: Will Kathleen Sebelius Win In The End? Legacy Tied To Obamacare’s Outcome
Yes, there was utter failure, but there was also one hell of a recovery. As time goes on, she’ll get less blame for the former and more credit for the latter.
It was always going to be a tough job, Health and Human Services secretary under this president. Even so, I’d bet Kathleen Sebelius was plenty shocked at the whole business.
True, she was only a second-string nominee, after Tom Daschle had to bow out because of those tax problems. But Sebelius still should have had little to fear. After all, she’d been the Democratic governor of a ruby-red state, Kansas. In a state where Republicans outnumbered Democrats roughly two-to-one, she won reelection in 2006 with 57 percent of the vote. She got one of the state’s prominent Republicans to switch parties and run with her for lieutenant governor.
So yes, it must have shocked when only eight Republicans voted to confirm her, while 31 voted against. Four-to-one against?! What had she done that was so bad? The answer was: nothing. Oh, Republicans invoked her “ties” to a Wichita doctor who performed abortions. But really, it was what she was going to do. She was going to be a point person on health-care reform, and they needed to ding her.
Today, and in the near future, she will have to endure being associated with the massive fiasco that was the launch of healthcare.gov. And that’s deserved. It’s hard to imagine what she was doing last summer instead of spending every waking minute ensuring that the initiative for which this administration will be remembered, the one thing that will color and even determine its historical legacy, was going to launch well. But it happened.
I don’t know how many times she got dragged up to the Hill and asked the same questions by all those Republican solons, striving to win the “let’s use this guy!” competition for the cable nets and NPR and the nightly newscasts, but it seemed like she was up there almost every day for a spell. On the surface, it all looked disastrous.
But I will say this. Behind the scenes, they did get to work. I could tell just from the way people talked, the things they said were happening there, that it really was getting better. They were (and I guess still are) sitting on this battery of IT stats about response times and how long a person had to wait to be logged in and so on and so forth, and those were being cut quickly. So Sebelius and the rescue team really did do their jobs once they were up against the wall.
Think of it this way. Did you think, last fall, that they’d actually hit the 7 million? Did you think they’d even come close? In a year-end column I wrote with my 2014 predictions, I said they’d make 5.8 million. And I thought that would be respectable. The latest report is that they’re approaching 7.5 million. So yes, there was utter failure. But there was one hell of a nice recovery. As time goes on, I think Sebelius will start getting less blame for the former, and more credit for the latter.
But her fate will be forever tied to Obamacare. If it succeeds, she’ll share the credit as the secretary who helped bring it to life. If it fails, she’ll share the blame. It’s about that simple. And I think it’ll probably succeed.
Meanwhile, there’s the question of getting a new HHS secretary installed. Obama’s nominee is Sylvia Mathews Burwell, who heads the Office of Management and Budget. Chief of staff Denis McDonough told The New York Times that “the president wants to make sure we have a proven manager and relentless implementer in the job over there,” which is both praise of Burwell and a little slap at Sebelius.
But will the Republicans let her through? Actually, forget the Republicans: Six Democratic senators are seeking reelection in red states. Are they going to vote for a new Obamacare point person during an election season? It never ends. Except it is now for Sebelius, who’s surely paid her dues.
By: Michael Tomasky, The Daily Beast, April 10, 2014
“More People Have Health Insurance”: Another Day, Another Sign That Obamacare Is Working
It’s impossible to say how big an impact the Affordable Care Act is having on the uninsured. But it’s getting impossible to deny that it’s having an impact at all.
The latest evidence comes from the Gallup organization, which surveys respondents about insurance status. According to Gallup, the percentage of adults without health insurance has been falling since the middle of last year. Now, Gallup says, it’s down to 15.6 percent. That’s the lowest rate that Gallup has recorded since late 2008.
These tracking surveys on the uninsured are far from precise. Among other things, people answering these surveys aren’t always sure of their own insurance status. Nobody should treat them as gospel.
But Gallup also found the most dramatic change in insurance status among low-income and minority populations, which would be consistent with implementation of a law that has its most dramatic impact on people with the least money. It’s also consistent with three other pieces of information
- Health Reform Monitoring Survey. In this survey, conducted by the Urban Institute and supported by the Robert Wood Johnson Foundation, the rate of uninsurance among non-elderly adults fell from 17.6 percent in the first quarter of 2013 to 15.2 percent in the first quarter of 2014.
- The Rand Corporation. According to reporting by Noam Levey of the Los Angeles Times, unpublished research from Rand suggests that the percentage of uninsured Americans fell from 20.9 in late 2013 to 16.6 percent in early 2014.
- Department of Health and Human Services. Late last week, HHS announced that enrollment in Medicaid and CHIP was 3 million higher than it had been in late 2013.
The Congressional Budget Office has projected that 13 million Americans will get health insurance because of Obamacare. Gallup’s numbers would correspond to a significantly smaller decline, although the numbers depend on what you choose as a starting point. Then again, Gallup’s numbers don’t account for the end of open enrollment—when, by all accounts, large numbers of people rushed to sign up for coverage. They also don’t account for a full year of enrollment in Medicaid and the Children’s Health Insurance Program, since people can sign up for those programs all year long.
In short, it seems pretty clear that, because of Obamacare, more people have health insurance. And, yes, that accounts for people who lost existing coverage because insurers cancelled old policies. The question is how big a difference the law is making. And it’s going to be a while before anybody knows.
By: Jonathan Cohn, The New Republic, April, 7, 2014
“The Insurance Company Bailout That Republicans Love”: The GOP Has Found A Way To Be Even More Hypocritical Than Before
Remember when Republicans found insurance company bailouts outrageous? Good, because the Republicans don’t.
On Friday, the Obama Administration announced proposed payment rates for Medicare Advantage plans, the private insurance option within Medicare. The federal government pays insurers a fixed fee for each senior they enroll. The program’s goal is to provide seniors with more options and, ideally, foster competition that will lead to better management of care both within the traditional program and for those who get private insruance instead. But, for a long time, experts have said the federal government is actually paying the insurers too much—in other words, more than it costs to provide the same coverage through traditional Medicare.
In the late 1990s, when the program was known as “Medicare+Choice,” the Clinton Administration attempted to rectify this by reducing insurer fees. But experts subsequently found the government was still paying the plans too much, so the Obama Administration and its allies included additional Medicare Advantage cuts in the Affordable Care Act—leaving discretion over the exact rates to the Department of Health and Human Services and its actuaries. On Friday, HHS revealed its calculations for next year’s rates, based in part on projections for how health care spending for the country as a whole is changing.
The payment formula is complicated and even now, with a weekend to digest the announcement, analysts aren’t entirely sure how insurers would react and what that would mean for seniors in the plans. (As Phil Galewitz of Kaiser Health News reports, many independent experts seem to think the effects would be pretty minimal.) But insurers, who say better benefits account for whatever extra funds they get, have warned that cuts of virtually any magnitude will force insurers to offer less generous benefits, charge higher premiums, or withdraw from the program altogether—as some of them did in the late 1990s, following those cuts the Clinton Administration implemented. The insurers are lobbying the administration to use its discretion to reduce the cuts or, ideally, eliminate them altogether. If you live in Washington and have seen those ubiquitous “Seniors are Watching” advertisements on billboards and buses, you have some idea of how strongly the insurers feel about this.
But insurers aren’t the only ones making a fuss. Republicans are too—and they have been for a while. As you may recall, Republicans pounced on the new Medicare Advantage cuts as proof that Obamacare was bad for seniors—in the 2010 midterms and then, again, in the 2012 presidential election. It was pure political gold, since seniors (particularly white seniors) were among those most skeptical of Obama and his health care law in the first place. Of course, House Republicans voted for the very same cuts when Paul Ryan’s budgets had them. But that didn’t stop Republicans from attacking the cuts then—and it’s not stopping them now. “ObamaCare has already caused millions to lose the healthcare plans they liked, and now it is directly harming seniors who rely on the care they have through Medicare Advantage,” Eric Cantor, the House Majority Leader, said on Friday. “Our nation’s grandparents should not have to wake up tomorrow worried they no longer can access the care they want because of Obamacare.”
With this latest salvo, however, Republicans have actually found a way to be more hypocritical than before. For the last few weeks, Republicans and their allies have been in high dudgeon about Obamacare’s so-called risk corridor program, in which the federal government will subsidize insurers that take heavy losses for the next three years. Republicans and their allies have decried risk corridors as a “taxpayer bailout” of the insurers. But the policy justification for risk corridors is straightforward and, even to some conservatives, incontrovertible: They will ease the transition to a newly regulated insurance market, so that it’s possible to provide universal coverage through a system of private plans. And unlike the additional Medicare Advantage payments, the risk corridor program might actually end up being a net boon to the taxpayers, since the government also shares in unexpected insurer gains. (The Congressional Budget Office has actually predicted as much, though, as with many such projections, there’s a lot of uncertainty there.)
Maybe Republicans think that’s insufficient reason to pay the Obamacare insurers money—fine. But then how can they simultaneously insist government keep paying higher fees to Medicare insurers, given the case for them is a lot more dubious?
Congressional Democrats haven’t exactly covered themselves in glory over this issue. New York Senator Charles Schumer was among the Democrats who signed a bipartisan letter to HHS, urging the administration not to harm beneficiaries with payment reductions, though the senators stopped short of calling for outright reversal of the cuts. But the current Republican position makes no sense whatsoever, unless the GOP’s real priorities are (a) opposing anything the Obama Administration supports (b) sucking money away from the traditional, government-run Medicare program (c) stopping programs and spending that benefits the non-elderly uninsured. Readers can decide for themselves which of those explanations make the most sense—or whether, perhaps, it’s all of the above.
By: Jonathan Cohn, The New Republic, Fenbruary 24, 2014
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