{"id":3819,"date":"2015-11-03T08:34:02","date_gmt":"2015-11-03T13:34:02","guid":{"rendered":"http:\/\/www.dougsbriefcase.com\/blog\/?p=3819"},"modified":"2015-11-06T08:55:41","modified_gmt":"2015-11-06T13:55:41","slug":"what-we-know-and-dont-know-about-obamacare-part-ii","status":"publish","type":"post","link":"https:\/\/www.dougsbriefcase.com\/blog\/what-we-know-and-dont-know-about-obamacare-part-ii\/","title":{"rendered":"What We Know And Don\u2019t Know About Obamacare, Part II<\/span>"},"content":{"rendered":"
\"More<\/a>

More than five years after its enact\u00adment there still are many ques\u00adtions about whether Oba\u00admacare is work\u00ading. Here are four of them.<\/p><\/div>\n

My pre\u00advi\u00adous post<\/a> dis\u00adcussed what we know about Oba\u00admacare as its third open enroll\u00adment sea\u00adson begins.  Here are four major ques\u00adtions about the future of Oba\u00admacare that remain unanswered.<\/p>\n

Can insur\u00adance com\u00adpa\u00adnies make mon\u00adey in the exchanges with\u00adout cor\u00adpo\u00adrate wel\u00adfare? <\/strong>Oba\u00admacare con\u00adtains some very expen\u00adsive sweet\u00aden\u00aders to entice insur\u00adance com\u00adpa\u00adnies to sell through the exchanges. These include risk cor\u00adri\u00addor pay\u00adments and $20 bil\u00adlion over three years in inapt\u00adly named \u201crein\u00adsur\u00adance\u201d pay\u00adments, mon\u00adey gov\u00adern\u00adment takes from par\u00adtic\u00adi\u00adpants in group health plans and gives to insur\u00aders that par\u00adtic\u00adi\u00adpate in the exchanges. Both are sched\u00aduled to end in 2017.<\/p>\n

<\/p>\n


\n<\/strong>The risk cor\u00adri\u00addor pay\u00adments \u2013 in which the gov\u00adern\u00adment trans\u00adfers mon\u00adey from insur\u00aders with \u201cexcess\u201d prof\u00adits to insur\u00aders with \u201cexcess\u201d loss\u00ades \u2013 have become polit\u00adi\u00adcal\u00adly prob\u00adlem\u00adat\u00adic.  They were expect\u00aded to be bud\u00adget neu\u00adtral, since it was assumed that \u201cexcess\u201d gains by some com\u00adpa\u00adnies would off\u00adset \u201cexcess\u201d loss\u00ades by others.<\/p>\n

It hasn\u2019t turned out that way.  Insur\u00aders\u2019 \u201cexcess\u201d loss\u00ades amount\u00aded to $2.9 bil\u00adlion<\/a> in 2014, while their \u201cexcess\u201d gains totaled just $360 mil\u00adlion.  The Admin\u00adis\u00adtra\u00adtion want\u00aded to force tax\u00adpay\u00aders to pro\u00advide the $2.5 bil\u00adlion dif\u00adfer\u00adence to plans with \u201cexcess\u201d loss\u00ades.  Con\u00adgress blocked those pay\u00adments.  A stop\u00adgap fund\u00ading bill pro\u00adhibits CMS<\/span> from mak\u00ading risk cor\u00adri\u00addor pay\u00adments that exceed receipts.<\/p>\n

As a con\u00adse\u00adquence, the com\u00adpa\u00adnies that report\u00aded $2.9 bil\u00adlion in \u201cexcess\u201d loss\u00ades \u2013 rather than tax\u00adpay\u00aders \u2013 will have to eat the bulk of those loss\u00ades.  The Admin\u00adis\u00adtra\u00adtion and the insur\u00adance lob\u00adby are push\u00ading Con\u00adgress to drop this lim\u00adi\u00adta\u00adtion, which is set to expire Decem\u00adber 11.<\/p>\n

The bud\u00adget neu\u00adtral\u00adi\u00adty require\u00adment on risk cor\u00adri\u00addors has been one fac\u00adtor in the fail\u00adure of more than half<\/a> of the health insur\u00adance coops although, as Grace-Marie Turn\u00ader has writ\u00adten<\/a>,<\/span> the co-ops have nev\u00ader been a viable propo\u00adsi\u00adtion.  But the restric\u00adtion also has adverse\u00adly affect\u00aded large, pub\u00adlicly-trad\u00aded companies.<\/p>\n

Then there are the \u201crein\u00adsur\u00adance\u201d pay\u00adments.  The fed\u00ader\u00adal gov\u00adern\u00adment gave insur\u00aders $10 bil\u00adlion in such pay\u00adments last year.  Despite this tsuna\u00admi of free mon\u00adey, insur\u00aders man\u00adaged to lose $2.5 bil\u00adlion in the indi\u00advid\u00adual mar\u00adket in 2014, an aver\u00adage of $163 per cus\u00adtomer, accord\u00ading to research<\/a> by McK\u00adin\u00adsey and Company.<\/p>\n

Large insur\u00aders with mul\u00adti\u00adple lines of busi\u00adness can absorb such loss\u00ades in the near term.  Whether they can make a go of it in the long run with\u00adout the nar\u00adcot\u00adic of cor\u00adpo\u00adrate wel\u00adfare remains to be seen.<\/p>\n

Will more states expand Med\u00adic\u00adaid?<\/strong> Most of the net increase in health cov\u00ader\u00adage is attrib\u00adut\u00adable to Med\u00adic\u00adaid enroll\u00adment<\/a> in the states that expand\u00aded their pro\u00adgrams. If most or all of the 20 states that have so far resist\u00aded expan\u00adsion change their poli\u00adcies, then the num\u00adber of new\u00adly insured peo\u00adple is like\u00adly to rise sub\u00adstan\u00adtial\u00adly in future years.<\/p>\n

Will exchange enroll\u00adment con\u00adtin\u00adue to under\u00adper\u00adform?<\/strong> HHS<\/span> projects that only ten mil\u00adlion<\/a> peo\u00adple will be enrolled in cov\u00ader\u00adage through the exchanges at the end of 2016.   Even allow\u00ading for the fact that the Admin\u00adis\u00adtra\u00adtion wants to man\u00adage expec\u00adta\u00adtions rather than deliv\u00ader dis\u00adap\u00adpoint\u00ading news in a Pres\u00adi\u00adden\u00adtial elec\u00adtion year, the esti\u00admate is a tac\u00adit admis\u00adsion that the exchanges won\u2019t become a major source of cov\u00ader\u00adage in the near future.<\/p>\n

This is a sig\u00adnif\u00adi\u00adcant shift, since many ana\u00adlysts have long pre\u00addict\u00aded that 2016 would be Obamacare\u2019s break\u00adout year.  As Bri\u00adan Blase of the Mer\u00adca\u00adtus Insti\u00adtute has point\u00aded out<\/a>,<\/span> CBO<\/span> only four months ago fore\u00adcast that 20 mil\u00adlion peo\u00adple \u2013 twice the Administration\u2019s most recent esti\u00admate \u2013 would enroll in 2016.  That fig\u00adure was already three mil\u00adlion low\u00ader than a pre\u00advi\u00adous CBO<\/span> estimate.<\/p>\n

CBO<\/span> wasn\u2019t alone in pre\u00addict\u00ading that plans sold through the exchanges would catch on by next year.  Blase notes that the Urban Insti\u00adtute pre\u00addict\u00aded there would be 23.1 mil\u00adlion enrollees in 2016; the Oba\u00adma Admin\u00adis\u00adtra\u00adtion pre\u00advi\u00adous\u00adly said there would be 24.8 mil\u00adlion; the RAND<\/span> Cor\u00adpo\u00adra\u00adtion antic\u00adi\u00adpat\u00aded that 27 mil\u00adlion would sign up.<\/p>\n

All expect\u00aded that the threat of IRS<\/span> tax penal\u00adties, cou\u00adpled with soci\u00adetal expec\u00adta\u00adtions, would induce most unin\u00adsured peo\u00adple to enroll in plans.  That hasn\u2019t hap\u00adpened.  Health pol\u00adi\u00adcy ana\u00adlyst Chris Jacobs has not\u00aded that some 19.5 mil\u00adlion<\/a> peo\u00adple either request\u00aded an exemp\u00adtion from the tax penal\u00adty or paid it \u2014 rough\u00adly twice as many as signed up for exchange-based cov\u00ader\u00adage \u2014 a devel\u00adop\u00adment that few experts foresaw.<\/p>\n

What\u2019s going wrong?  The answer may well be quite sim\u00adple: most unin\u00adsured peo\u00adple who are in rea\u00adson\u00adably good health don\u2019t want insur\u00adance cov\u00ader\u00adage \u2014 unless its cost-shar\u00ading require\u00adments are min\u00adi\u00admal and its pre\u00admi\u00adums steeply dis\u00adcount\u00aded \u2014 and nei\u00adther peer pres\u00adsure nor fear of the IRS<\/span> has changed their minds.<\/p>\n

How will Oba\u00admacare affect the 2016 elec\u00adtions \u2026 and vice-ver\u00adsa?<\/strong> Demo\u00adc\u00adra\u00adt\u00adic Pres\u00adi\u00adden\u00adtial can\u00addi\u00addates want to expand it; their GOP<\/span> oppo\u00adnents want to repeal and replace it.  Democ\u00adrats believe they can con\u00advince most vot\u00aders that repeal\u00ading Oba\u00admacare is unre\u00adal\u00adis\u00adtic and extreme.  Repub\u00adli\u00adcans hope to use the law\u2019s con\u00adtin\u00adued unpop\u00adu\u00adlar\u00adi\u00adty<\/a> to advance their White House bid.<\/p>\n

What\u00adev\u00ader the out\u00adcome, the law itself will like\u00adly change in 2017 and beyond.  Democ\u00adrats can be expect\u00aded to table cost\u00adly pro\u00adpos\u00adals to make exchange-based cov\u00ader\u00adage more viable and attrac\u00adtive, while Repub\u00adli\u00adcans will push to relax Washington\u2019s grip on health insur\u00adance reg\u00adu\u00adla\u00adtion, make a wider vari\u00adety of insur\u00adance prod\u00aducts avail\u00adable to con\u00adsumers, and revamp and reduce fed\u00ader\u00adal subsidies.<\/p>\n

*  *  *  *  *<\/p>\n

The law\u2019s future depends less on the ide\u00ado\u00adlog\u00adi\u00adcal aims of its sup\u00adport\u00aders and detrac\u00adtors than on its prac\u00adti\u00adcal effect on tens of mil\u00adlions of Amer\u00adi\u00adcans.  Oba\u00admacare has been a good thing for peo\u00adple whose med\u00adical bills might have dri\u00adven them to bank\u00adrupt\u00adcy, as well as for their providers<\/a>,<\/span> who can cut back on pro\u00advid\u00ading char\u00adi\u00adty care<\/a>. It also is cov\u00ader\u00ading mil\u00adlions of low-income peo\u00adple who oth\u00ader\u00adwise could not afford insur\u00adance.  For tens of mil\u00adlions of oth\u00aders, it has been a source of hard\u00adship and frus\u00adtra\u00adtion, result\u00ading in can\u00adceled cov\u00ader\u00adage, high\u00ader pre\u00admi\u00adums (often to pay for ser\u00advices they don\u2019t want or need), high\u00ader deductibles and out-of-pock\u00adet med\u00adical spend\u00ading, lim\u00adit\u00aded choice of doc\u00adtors and IRS<\/span> penalties.<\/p>\n

An alter\u00adna\u00adtive approach to reform that appeals to both Oba\u00admacare\u2019s win\u00adners and losers \u2013 as well as to insur\u00aders, doc\u00adtors, hos\u00adpi\u00adtals, drug mak\u00aders and oth\u00ader health indus\u00adtry play\u00aders \u2013 so far has proven elu\u00adsive.  Until such an alter\u00adna\u00adtive emerges, Oba\u00admacare will remain a source of controversy.<\/p>\n

An ear\u00adli\u00ader ver\u00adsion of this post also appeared on the Galen Insti\u00adtute web\u00adsite<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

My pre\u00advi\u00adous post dis\u00adcussed what we know about Oba\u00admacare as its third open enroll\u00adment sea\u00adson begins.  Here are four major ques\u00adtions about the future of Oba\u00admacare that remain unan\u00adswered. Can insur\u00adance com\u00adpa\u00adnies make mon\u00adey in the exchanges with\u00adout cor\u00adpo\u00adrate wel\u00adfare? Oba\u00admacare \u2026 Con\u00adtin\u00adue read\u00ading \u2192<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":3820,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","wp_typography_post_enhancements_disabled":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"nfd_image_url":"","nfd_onboarding_generated":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[16,60,124,1238],"tags":[51,401,69,119,623,122,1184,1188,1245,1239,59],"class_list":["post-3819","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-health-care","category-medicaid","category-obamacare","category-uninsured","tag-cms","tag-exchanges","tag-health-exchanges","tag-health-insurance","tag-health-insurance-exchanges","tag-hhs","tag-medicaid","tag-obamacare","tag-open-enrollment","tag-open-season","tag-uninsured"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t