Tag Archives: Health Insurance Individual Market

What Could Happen If The Administration Stops Cost-Sharing Reduction Payments To Insurers?

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http://healthaffairs.org/blog/2017/08/02/what-could-happen-if-the-administration-stops-cost-sharing-reduction-payments-to-insurers/

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Although the decision of the Court of Appeals for the District of Columbia Circuit to allow attorneys general from 17 states and the District of Columbia to join the House v. Price cost-sharing reduction (CSR) litigation as parties complicates President Trump’s ability to simply stop the CSR payments, rumors continue that he is preparing to do so. The CSR payments are made monthly; the next installment is due on August 21, 2017. If the administration intends not to make the August payment, it must announce its decision soon.

Changes to qualified health plan (QHP) applications in the federally facilitated exchange (FFE) are due on August 16, 2017, as are final rates for single risk pool plans including QHPs. Final contracts with insurers for providing QHP coverage through the FFE must be signed by September 27. If the Trump administration is going to defund the CSRs, now is the time it will do it.

The back story on the CSR issue can be found in my post on July 31, while the intervention decision is analyzed in my post on August 1. This post focuses on issues that will need to be resolved going forward if the Trump administration decides to defund the CSRs.

The Choices Insurers Would Face If CSR Payments Were Ended

First, insurers would have to decide whether to continue to participate in the exchanges. Those in the FFE have a contractual right to drop participation for the rest of 2017, but how exactly they would do this would depend on state law, and would probably require 90 days notice. Insurers would also not be able to terminate the policies of individuals covered through the exchange, although once the insurers left the exchange premium tax credits would cease and many policyholders would drop coverage. Insurers that tried to leave immediately would likely suffer reputational damage, and those that could financially would likely try to hold on until the end of the year.

Some insurers might well decide that the government is an unreliable partner and give up on the exchanges for 2018. Indeed, some would conclude that the individual market is too risky to play in at all. The individual market makes up a small part of the business of large insurers; even though it has become more profitable in the recent past, some insurers might conclude that the premium increases that would be needed to make up for the loss of the CSRs would drive healthy enrollees out of the individual market. Rather than deal with a deteriorating risk pool, they might leave the individual market entirely (although they would probably have to give 180 days notice to do so.)

Insurers that decide to stay would have to charge rates that would allow them to survive without the $10 billion dollars the CSR payments would provide. They would need to raise premiums significantly to accomplish this. How they did so would depend on guidance that they got from their state department of insurance or possibly from the Centers for Medicare and Medicaid Services.

The California Experience

On August 1, 2017, Covered California announced its 2018 rates. The California state-based marketplace is an example of how the Affordable Care Act can work in a state that fully supports it and has a big enough market to form a balanced risk pool. For 2018, the average weighted rate increase in California is 12.5 percent, of which 2.8 percent is attributable to the end of the moratorium on the federal health insurance tax. Consumers can switch to plans that will limit their rate change to 3.3 percent in the same metal tier. All 11 health insurers in California are returning to the market for 2018 (although one insurer, Anthem, is leaving 16 of the 19 regions in which it participated for 2017) and 82 percent of consumers will be able to choose between three or more insurers. About 83 percent of hospitals in California participate in at least one plan.

Covered California instructed its insurers to file alternate rates that would go into effect if the Trump administration abandons the CSR payments. The insurers were instructed to load the extra cost onto their silver (70 percent actuarial value) plans, since the CSRs only apply to silver plans. The alternative rates filed by the insurers project that if the CSRs are not funded, they would have to essentially double their premium increases, hiking premiums by an additional 12.4 percent.

Virtually all of this increase would be absorbed by increased federal premium tax credits for those with incomes below 400 percent of the federal poverty level. As the premium of the benchmark second-lowest cost silver plan increased, so would the tax credits. A Covered California study concluded that the premium tax credit subsidy in California would increase by about a third if the CSR subsidies are defunded.

Bronze, gold, and platinum plan premiums would not be affected by the silver plan load. As the premium tax credits increased, many more enrollees might be able to get bronze plans for free, and gold plans would become competitive with silver plans in price. More people would likely be eligible for premium tax credits as people higher up the income scale found that premiums cost a higher percentage of their household income.

Consumers who are not eligible for premium tax credits would have to pay the full premium increase themselves. Covered California has suggested, however, that insurers load the premium increase only onto silver plans in the exchange, since CSRs are only available in the exchange. Insurers would likely encourage their enrollees who are in silver plans in the exchange to move to similar products off the exchange that are much more affordable. Bronze, gold, and platinum plans would cost more or less the same on or off the exchange.

Other States Would Likely Make Different Choices Than California’s

It is likely that not all states would follow California’s lead. If state departments of insurance do not allow insurers to increase their premiums, more insurers would leave the individual market. If state departments require insurers to load the CSR surcharge onto all metal-level plans, both on and off the exchange, bronze, gold, and platinum plans would be more expensive and individual insurance would become much more costly for all consumers who are not eligible for premium tax credits. If insurers leave the market or consumers drop coverage, more consumers would end up using care they cannot afford, increasing medical debt and the uncompensated care burden of providers, and of hospitals in particular.

Some insurers in other states have likely already loaded a substantial surcharge onto their 2018 premiums in anticipation of CSR defunding and of other problems, such as uncertainty about the Trump administration enforcing the individual mandate. If insurers in fact profit from excessive rates, consumers might eventually receive medical loss ratio rebates, but 2018 rebates would not be paid out until late in 2019, if the requirement is still on the books by then.

Other Ramifications Of Ending CSR Payments To Insurers

CSR defunding could have other effects as well. Insurers have been reimbursed each month for CSRs based on an estimation of what they are paying out to actually reduce cost sharing. Each year the insurers must reconcile the payments they have received with those they were actually due. Insurers were supposed to have filed their reconciliation data for 2016 by June 2, 2017, and were supposed to be paid any funds due them, or to refund overpayments, in August. Reconciliation payments may also be due in some situations for 2015. If the administration cuts off CSR payments, it could conceivably cut off reconciliation payments as well.

Finally, defunding of CSRs would likely have an effect on risk adjustment payments as well. The risk adjustment methodology has been set for 2018 in the 2018 payment rule. It would likely not be amended for 2018 in light of the CSR defunding. Defunding would increase the statewide average premium on which risk adjustment payments are based. This would generally exaggerate the effects that risk adjustment would otherwise have. In particular, insurers with heavy bronze plan enrollment would end up paying more in, while insurers with more gold or platinum plans might receive higher payments.

Looking Forward

President Trump claims to see the CSR payments as a “bailout” to insurers, which surely they are not. They are a payment for services rendered, much like a Medicare payment to a Medicare Advantage plan. The effects of defunding would reverberate throughout out health care system, likely causing problems far beyond those identified in this post.

Fortunately, Senators Alexander (R-TN) and Murray (D-WA), the chair and ranking member of the Health, Education, Labor, and Pensions Committee, have announced that they will begin hearings on a bipartisan approach to health reform when the Senate returns in September, and funding of the CSR payments for at least a year seems to be at the top of their list. A bipartisan group of House members has also called for funding the CSRs. And pressure to fund the CSRs continues from the outside, with the National Association of Insurance Commissioners calling for it again last week. It is to be hoped that President Trump will not take steps that would sabotage the individual market and that a solution can quickly be found to the CSR issue that will bring stability to the market going forward.

 

MinnesotaCare Buy-In: Maybe Not A Long Shot

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http://healthaffairs.org/blog/2017/08/02/minnesotacare-buy-in-maybe-not-a-long-shot/

Capitol Building St Paul Minnesota

States are developing creative policy options to address the high cost of premiums for those purchasing coverage in the individual market. Given the inaction and lack of leadership at the federal level, states need to continue to move forward. Minnesota, of course, is leading the way.

Under a proposal introduced in the Minnesota state legislature earlier this year, Minnesotans shopping for health insurance on the individual market would have been able to purchase public coverage through MinnesotaCare, Minnesota’s Basic Health Plan (BHP). The public buy-in was supported by the Democratic-Farmer-Labor (DFL) Party Governor Mark Dayton and introduced by key DFL legislators (Senator Tony Lourey and Representative Clark Johnson), but it was not seriously considered by the Republican-controlled legislature.

Nevada’s Democratic state legislature also passed a Medicaid Buy-In bill which was subsequently vetoed by Republican Governor, Brian Sandoval. The Nevada Care Plan would have allowed Nevada’s uninsured to buy into Nevada’s Medicaid program, a current Medicaid expansion state. The buy-in plan would have been offered on the Health Insurance Marketplace, Nevada Health Link, and income-eligible applicants would access federal advanced premium tax credits (APTCs). These latter provisions were contingent on approval of a 1332 State Innovation Waiver.

These state buy-in proposals are really not too far out of the mainstream of viable policy options. Over the years, public program buy-ins have been used to target specific populations whose incomes fall just above program eligibility guidelines and where health insurance coverage is considered essential. Below, I present a few of these programs to highlight the well-established use of public buy-in programs to achieve state coverage goals. I also include additional detail on Minnesota’s public buy-in proposal and encourage additional discussion and debate about these and other state options to secure access to affordable coverage for all.

Medicaid Buy-In For People With Disabilities And Children

Most states already have at least one Medicaid buy-in program tailored specifically to the needs of people with disabilities. Medicaid allows states to offer coverage to adults with disabilities who earn more than would otherwise be allowed in order to keep their Medicaid coverage. The policy goal of the program was to provide opportunities for those with disabilities to work and retain their health insurance coverage. It allows the disabled to work in jobs that may not provide health insurance coverage, including part-time work, low-wage positions, and intermittent employment. Participants pay premiums based on a sliding fee scale, and states receive federal matching payments to help offset the costs of the program. As of December 2011, 44 states have implemented this program.

Similarly, the Family Opportunity Act of 2005 provides federal matching payments to states that offer Medicaid Buy-In coverage to children with disabilities and incomes below 300 percent of the federal poverty level (FPL). This bill was initially introduced by Representative Pete Sessions (R-Texas) in 2003 to honor a young child born with Down syndrome and a severe heart defect. The family was deemed ineligible for public coverage when the father accepted a bonus at work, raising his income above the eligibility levels. The goal of this Medicaid Buy-In option was to protect families from the need to become impoverished in order to receive Medicaid-covered services for their child with disabilities. To date, five states have implemented this program: Colorado, Iowa, Louisiana, North Dakota, and Texas.

Several states also use state funds only (i.e., no federal match) to allow families to buy-in to Children’s Health Insurance Program (CHIP) coverage. For example, Maine provides a Full Cost Purchase Option for Children under 19 Years of Age for families with incomes between 140 and 213 percent FPL and charges premiums on a sliding scale. Until 2014, New Jersey also offered a CHIP Buy-In for children with family incomes above 350 percent FPL who were not eligible for the subsidized New Jersey FamilyCare coverage.

Minnesota’s Public Buy-In: The Details

The drafters of the MinnesotaCare Buy-In thought through many of the details of how a public buy-in program would work. MinnesotaCare would offer two plans on Minnesota’s Health Insurance Marketplace, MNsure—a Silver plan that covers 70 percent of health care expenses—and a Gold plan that would cover 80 percent (i.e., 30 percent and 20 percent consumer cost sharing, respectively). Enrollees would pay the full cost of the premiums, so there would be no ongoing cost to the state after the program is set up.

If a federal 1332 State Innovation Waiver were secured, Minnesotans who purchase coverage through the public buy-in option would be eligible for federal premium tax credits offered through MNsure. Each health plan that currently contracts with the state of Minnesota to provide managed care services for Medicaid and the BHP would be required to offer at least one buy-in product on MNsure — either through its existing managed care contract or through a Medicaid Accountable Care Organization.

How The Public Buy-In Option Would Help In Minnesota

Key benefits of the MinnesotaCare buy-in include a lower-cost coverage option to compete with private plans on the Marketplace and increased access to coverage, particularly for areas with limited or no plan options. The buy-in would provide access to the broad network of physicians and care providers that are available through MinnesotaCare, ensuring that people could keep their local doctors and hospitals.

The concerns raised by health plans is that the low-cost public MinnesotaCare Buy-In would edge them out of the market with its significantly lower rates achieved through paying providers at the lower Medicaid payment rate. If everyone was allowed to purchase the buy-in plan, most would chose the lowest-cost plan. Private plans worry about being priced out of some markets completely through an unfair competitive advantage. Providers worry about the low Medicaid provider rates with additional concern about the willingness of providers to accept Medicaid enrollees or at least new enrollees.

Yet, given the uncertainty of health reform activity at the federal level, there is a real possibility that non-metro areas in Minnesota as well as in other states, now estimated at 38 of the 3,000 counties, will go without any health plan option in the non-group market. The buy-in plan could be limited to rating areas with one or fewer plan offerings and/or targeted to families where premiums exceeded more than 9 percent of their income (i.e., the current limit for federal tax credits). To encourage provider support and participation, the Minnesota legislation included a provision that for buy-in enrollees, providers would be paid 100 percent of Medicare payment rates.

Public Buy-In, Other Creative Solutions Must Be On The Table

State policy analysts have learned with the implementation of the Affordable Care Act that a one-size-fits-all policy did not work for states. Targeted and creative solutions, including a public program buy-in, should be considered in an effort to ensure affordable and accessible coverage. Waiting for Washington to act becomes a less viable strategy daily — states must develop innovative policy strategies of their own that align with their policy objectives and their unique health insurance markets. Minnesota is well situated to move forward with one such strategy by putting the MinnesotaCare buy-in back on the table and giving it a full opportunity for public debate.

Fitch: Failed ACA replacement efforts add to healthcare sector uncertainty

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http://www.beckershospitalreview.com/finance/fitch-failed-aca-replacement-efforts-add-to-healthcare-sector-uncertainty.html

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As ACA repeal and replace efforts stall, significant uncertainty remains surrounding how federal policy will affect nonprofit healthcare organizations, leading to a negative sector outlook for healthcare, according to Fitch Ratings.

The uncertainty and negative outlook comes as the Trump administration looks for ways to weaken the ACA even if the health reform law is not repealed.

Nonprofit hospitals experienced declines in uncompensated care under the ACA because of an increase in healthcare coverage due to Medicaid expansion, rollout of healthcare exchanges and allowing children to stay on their parent’s health insurance plan until age 26.

While repeal efforts cause uncertainty for hospitals, current discussions regarding a bipartisan healthcare bill could be beneficial for nonprofit hospitals. A bipartisan effort could potentially reduce the insurance premium price hikes, according to Fitch.

Trump’s Tweets Threaten To Destabilize Insurance Markets

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http://www.npr.org/sections/health-shots/2017/08/01/540656651/trumps-tweets-threaten-to-destabilize-insurance-markets?utm_campaign=KHN%3A%20Daily%20Health%20Policy%20Report&utm_source=hs_email&utm_medium=email&utm_content=54841830&_hsenc=p2ANqtz-_BS8nGbOG01O1u0VECBzsFH5X_-bRiY3X7lsxQ8ybqJDve3xJppemqizvSfn4B0RH50L84DFNZaG18htzfxHToUJIq2g&_hsmi=54841830

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President Trump took to Twitter this week to threaten insurance companies that he may withhold crucial government payments in an effort to undermine the Affordable Care Act.

It’s not the first time the president has threatened to cut off these payments to insurers, which he refers to as “BAILOUTS.

But these payments aren’t designed to compensate insurers for business failures. Rather, they reimburse insurance companies for discounts the law requires them to give to low-income people who buy insurance through the Affordable Care Act exchanges. The federal money that goes to insurers in these payments, known as cost-sharing reductions, or CSRs, offsets the money insurers lose by lowering the deductibles and co-payments they require of these policyholders.

Trump, who is angry that the Congress failed to pass a law to repeal and replace the Affordable Care Act, or Obamacare, is wielding his threat to withhold these CSRs — which could cause chaos in the insurance markets – in hopes of forcing lawmakers back to the table to try again to get rid of the health care law.

The next cost-sharing payments are due to be paid in a few weeks and the president has said he’ll announce this week whether he’ll pay the money or keep it in the Treasury.

“In the absence of the CSR, the rate increases could be astonishing,” says Dr. Marc Harrison, CEO of Intermountain Healthcare, which operates nonprofit hospitals and clinics and insures more than 800,000 people across Utah.

“We’ll see [the number of] people who are uninsured, or functionally uninsured, go way, way up,” he adds.

Harrison says he and his company filed two sets of proposed rates for policies sold on the insurance exchange next year. If the president cuts off the cost-sharing payments, he says, the rates will be much higher.

The Congressional Budget Office estimates the payments, if they’re all made, will total $7 billion this year. Margaret Murray is CEO of the Association for Community Affiliated Plans, which represents these “safety net health plans” aimed at people with lower incomes. She says she has been in touch with the Department of Health and Human Services to urge them to fund the payments.

“Should the payments cease, insurers will be required to fund cost-sharing reductions on their own,” Murray says. If that happens, “they will either raise their rates – our plans indicate that it could be by up to 23 percent – to compensate for these losses, or they will withdraw from the markets altogether.”

If Trump does decide to stop making the payments, it may end up costing the U.S. Treasury more, while insurance companies who remain in the markets could do just fine.

That’s because insurance companies will charge more in premiums to make up for the lost payments. And that will lead the Treasury to spend more on subsidies to policyholders who qualify, according to an analysis by the consulting firm Oliver Wyman.

If those subsidies go up enough, more people could be lured into the exchange markets.

Here’s the wonky reason why:

The Obamacare exchanges require insurance policies to conform to one of four “metal” levels — bronze, silver, gold or platinum — which coincide with how much an individual is expected to pay in premiums, deductibles and other out-of-pocket expenses. A bronze plan covers about 60 percent of a customer’s health care costs, with relatively low monthly premiums, while a platinum plan will cost more each month but pay 90 percent of total health costs.

The law provides income-based tax credits to people to buy insurance, and those credits are calculated based on the price of silver plans. Last year about 85 percent of people who bought Obamacare insurance got a credit, according to the Center for Medicare and Medicaid Services.

People with the lowest incomes also get those discounted deductibles and co-payments if they buy a silver plan; and then the government reimburses insurers through CSR payments.

If Trump decides not to make those payments, insurance companies are likely to raise rates about 19 percent, according to an analysis by the Kaiser Family Foundation.

That means subsidies will have to rise for many people to meet those higher premiums. Some people may take that bigger subsidy to buy a cheaper policy — and many could even get insurance for free, according to Oliver Wyman, because premiums on bronze plans probably would not rise as much as those on silver plans.

The higher subsidies could cost the government as much as $2.3 billion in 2018, according to the Kaiser Family Foundation’s Larry Levitt. Levitt notes that Congress could end the ambiguity over the payments by appropriating the money for them.

Sen. Orrin Hatch, R-Utah, said in an interview with Reuters that he thinks Congress will do just that.

“I’m for helping the poor; always have been,” Hatch said. “And I don’t think they should be bereft of health care.”

The reason CSRs are in limbo at all is because House Republican who did not want Obamacare to succeed sued the administration, claiming the payments to insurers were illegal because they had not appropriated money for them.

A federal judge agreed, but the Obama administration appealed. When Trump took the White House he continued the appeal, to allow lawmakers time to pass a bill to repeal Obamacare and make the payments disappear altogether.

Now that that effort has failed, the lawsuit and the cost-sharing money are once again in play.

Trump on tricky legal ground with ‘Obamacare’ threat

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http://abcnews.go.com/Health/wireStory/trump-tricky-legal-ground-obamacare-threat-48962076

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President Donald Trump’s threat to stop billions of dollars in government payments to insurers and force the collapse of “Obamacare” could put the government in a legal bind.

Law experts say he’d be handing insurers a solid court case, while undermining his own leverage to compel Democrats to negotiate, especially if premiums jump by 20 percent as expected after such a move.

“Trump thinks he’s holding all the cards. But Democrats know what’s in his hand, and he’s got a pair of twos,” said University of Michigan law professor Nicholas Bagley. Democrats “aren’t about to agree to dismantle the Affordable Care Act just because Trump makes a reckless bet.”

For months, the president has been threatening to stop payments that reimburse insurers for providing required financial assistance to low-income consumers, reducing their copays and deductibles.

Administration officials say the decision could come any day.

Playing defense, some insurers are preemptively raising premiums for next year. For example, BlueCross BlueShield of Arizona this week announced a 7.2 percent average hike for 2018. But there would likely be no increase if the subsidies are guaranteed, the company said. And BlueCross BlueShield of North Carolina earlier requested a 22.9 percent average increase. With the subsidies, the company said that would have been 8.8 percent.

The “cost-sharing” subsidies are under a legal cloud because of a dispute over whether the Obama health care law properly approved the payments. Other parts of the health care law, however, clearly direct the government to reimburse insurers.

With the issue unresolved, the Trump administration has been paying insurers each month, as the Obama administration had done previously.

Trump returned to the subject last week after the GOP drive to repeal the health care law fell apart in the Senate, tweeting, “As I said from the beginning, let ObamaCare implode, then deal. Watch!”

He elaborated in another tweet, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies…will end very soon!”

It’s not accurate to call the cost-sharing subsidies a bailout, said Tim Jost, a professor emeritus at Washington and Lee University School of Law in Virginia.

“They are no more a bailout than payments made by the government to a private company for building a bomber,” he said.

That’s at the root of the Trump administration’s potential legal problem if the president makes good on this threat.

The health law clearly requires insurers to help low-income consumers with their copays and deductibles. Nearly 3 in 5 HealthCare.gov customers qualify for the assistance, which can reduce a deductible of $3,500 to several hundred dollars. The annual cost to the government is about $7 billion.

The law also specifies that the government shall reimburse insurers for the cost-sharing assistance that they provide.

Nonetheless, the payments remain under a cloud because of a disagreement over whether they were properly approved in the health law, by providing an “appropriation.”

The Constitution says the government shall not spend money without a congressional appropriation.

Think of an appropriation as an electronic instruction to your bank to pay a recurring monthly bill. You fully intend to pay, and the money you’ve budgeted is in your account. But the payment will not go out unless you specifically direct your bank to send it.

House Republicans trying to thwart the ACA sued the Obama administration in federal court in Washington, arguing that the law lacked specific language appropriating the cost-sharing subsidies.

A district court judge agreed with House Republicans, and now the case is on hold before the U.S. appeals court in Washington. A group of state attorneys general is asking the appeals court to let them join the case, in defense of the subsidies.

Both Bagley and Jost have followed the matter closely, and disagree on whether the health law properly approved the payments to insurers. Bagley says it did not; while Jost says it did.

However, the two experts agree that insurers would have a solid lawsuit if Trump stops the payments. Insurers could sue in the U.S. Court of Federal Claims, which hears claims for money against the government.

“The ACA promised to make these payments — that could not be clearer — and Congress has done nothing to limit that promise,” said Bagley.

“I think there would very likely be litigation if the Trump administration tries to cut off the payments,” said Jost.

Another way to resolve it: Congress could appropriate the money, even if temporarily, for a couple of years. Some prominent GOP lawmakers have expressed support for that.

If the president makes good on his threat, experts estimate that premiums for a standard “silver” plan would increase by about 19 percent. Insurers could recover the cost-sharing money by raising premiums, since those are also subsidized by the ACA, and there’s no question about their appropriation.

But millions of people who buy individual health care policies without any financial assistance from the government would face prohibitive cost increases.

And more insurers might decide to leave already shaky markets.

“This is not a game,” said California Attorney General Xavier Becerra. “Millions of people would not be able to afford health insurance for their families.”

Trump’s threats to end CSR payments may mean hospitals will see a rise in uncompensated care costs

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http://www.fiercehealthcare.com/finance/trump-s-threats-to-end-csr-payments-may-mean-hospitals-will-see-a-rise-uncompensated-care?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiT0RKaVpETTRORE5sTURNeSIsInQiOiJ0QlwvRURDeTZRRnpcL2g1eVp4ek4yVTgwM3hcL1lqcjVJdzlqcER3S0JMbFpcL3FwVzI4VEhkYktjWDdiZ3VRcTdBVVZmMml0cHIrc3lrRmhTYWlcL1wvaVRTZTA5VlczZ3I3Z3JkN0FYYTI4VWlJb3grTXZ2UDA5XC9hVTVVN2M3U2UxT3gifQ%3D%3D

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Hospitals had better brace themselves for a possible rise in uncompensated care costs if President Donald Trump makes good on an implied threat to end cost-sharing reduction payments to health insurers.

Trump indicated on Twitter this weekend that he may end “bailouts” for both insurance companies and Congress. Those bailouts refer to CSR payments, which subsidize the out-of-pocket healthcare costs of low-income Affordable Care Act exchange customers.

And if he follows through and decides this week to end those payments, the individual marketplaces could see disastrous consequences. And that means doctors and hospitals may see a spike in uncompensated care costs and bad debt, reports Forbes.

Hospitals have seen a drop in uncompensated care costs and bad debt in the years under the ACA. A recent Politico report found that spending on charity care at the top seven hospitals in the U.S. dropped from $414 million in 2013 to $272 million in 2015.

Furthermore, a recent Kaiser Family Foundation report said that if the CSR payments are withheld, premiums for silver plans would rise by 19% and more payers will likely leave the marketplaces. Doctors and hospitals are concerned that means millions of patients who have purchased insurance through the ACA exchanges won’t be able to afford their out-of-pocket costs for care.

And they have reason to be concerned, Marc Harrison, M.D., president and CEO of Intermountain Healthcare, which operates nonprofit hospitals and clinics and insures more than 800,000 people in Utah, told NPR. Without the CSR payments, rate increases will likely skyrocket. “We’ll see [the number of] people who are uninsured, or functionally uninsured, go way, way up,” he said.

“The American people need this funding to lower what they pay for coverage and be able to see their doctor,” Kristine Grow, a spokeswoman for America’s Health Insurance Plans told Forbes.

Trump is threatening a move that could make Obamacare implode — here’s which states have the most to lose

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http://www.businessinsider.com/obamacare-cost-sharing-reductions-states-benefit-2017-8

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The Trump administration is threatening a move that could make Obamacare implode.

On Tuesday, the administration is expected to make a decision on whether it will stop payments  to insurers that that help offset healthcare costs. President Donald Trump referred to these payments as “bailouts” in a a tweet on Saturday.

“If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” Trump tweeted.

If the Trump administration does decide to end the payments, known as cost-sharing reductions, it could lead to higher premiums and fewer insurance plan choices in the exchanges. CSRs are paid to insurance companies to help offset the cost of discount health plans they provide to Americans making 200% of the federal poverty limit.

Deadline for 2018 coverage

Insurance companies have until late September to raise rates and finalize their coverage areas for 2018. Not receiving CSRs in 2018 could have a serious impact on what those look like.

Already, the market is in flux. On Wednesday, Anthem, the second-largest insurer in the US, said it might leave more markets in 2018. And on Monday, Ohio said it had managed to find insurers for 19 of the 20 counties that had no insurance plans on the exchanges. Ultimately, without the CSRs, many Americans could lose their health insurance.

Molina to cut 1,400 positions to improve financial performance

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http://www.healthcarefinancenews.com/news/molina-cut-1400-positions-improve-financial-performance?mkt_tok=eyJpIjoiTXpVelkyRXhZMkpqTmpKaSIsInQiOiJFVjFscVRVVDdXZmZqek02STNMSVNjelwvREEwMmZmckZrWmNyZjNrQnVcL0szTGZuNXA4ZGdrOGRhT1V5bnREanBwWitPbTNkQllLZW5BTmd4VDk5TDg0ak1NNStnTllqdEllQlNpQmRZbDUwcm5JdVNaZ1lJcmpVVXJNYWxcL0JcL28ifQ%3D%3D

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The cuts follow removal of CEO and CFO due to financial losses blamed on Affordable Care Act market.

Molina Healthcare, which fired its CEO and CFO in May due to the poor financial performance of the company, will eliminate about 1,400 jobs over the next few months, according to an internal memo obtained by Reuters.

The cuts are due to financial losses blamed on Molina’s individual business in the Affordable Care Act market, in which it has been a major player.

Molina will reduce its workforce by the elimination of 10 percent of its 6,400 corporate positions and about 10 percent of 7,700 health plan jobs, according to Reuters. It will not affect Molina’s Pathways behavioral health business, which employs about 5,500 people.

Interim CEO and CFO Joe White sent the memo to employees saying the cuts aim to contribute to savings by 2018 in what he called “Project Nickel,” to do more with less.

In March, Molina was touted as an ACA success story.

Former CEO J. Mario Molina, MD, was an outspoken opponent of the Republican plan to repeal and replace the ACA. His brother, John C. Molina, who served as CFO. was also let go in a decision by the board to turn around the company’s financial position.

Last week Molina said it was concerned about Republicans repealing the ACA without having a replacement plan in place, the roll back of Medicaid expansion and the lack of a guarantee of federal cost-sharing reduction payments, which allows insurers to offer lower-income consumers lower deductibles and out-of-pocket expenses.

Molina also argued for the continuation of the individual mandate to get insurance.

“The bedrock of any coverage system is a requirement that people must obtain health insurance,” Molina said. “The lack of such a requirement will be detrimental to the individual market risk pool and will result in adverse selection, which would significantly increase costs.”

In June, Molina said it would file rates for 2018 to remain in the exchange market in Florida.

The California Department of Insurance is releasing on August 1 the insurers which have filed rates for the ACA market in 2018.

States Have Already Tried Versions Of ‘Skinny Repeal.’ It Didn’t Go Well

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Betting that thin is in — and might be the only way forward — Senate Republicans are eyeing a “skinny repeal” that would roll back an unpopular portion of the federal health law. But health policy analysts warn that the idea has been tried before, and with little success.

Senators are reportedly considering a narrow bill that would eliminate the Affordable Care Act’s “individual mandate,” which assesses a tax on Americans who don’t have insurance. The bill would also eliminate the ACA’s penalties for some businesses – those that have 50 or more workers and fail to offer their employees health coverage.

Details aren’t clear, but it appears that — at least initially — much of the rest of the 2010 health law would remain, under this strategy, including the rule that says insurers must cover people who have pre-existing medical problems.

In remarks on the Senate floor Wednesday, Sen. Minority Leader Charles Schumer, D-N.Y., said that “we just heard from the nonpartisan Congressional Budget Office that under such a plan … 16 million Americans would lose their health insurance, and millions more would pay a 20 percent increase in their premiums.” The CBO posted its evaluation of the GOP’s proposed plan Wednesday evening.

Earlier in the day, some Republicans seemed determined to find some way to keep the health care debate alive.

“We need an outcome, and if a so-called skinny repeal is the first step, that’s a good first step,” said Sen. Thom Tillis, R-N.C.

Several Republican senators, including Dean Heller of Nevada and Jeff Flake of Arizona, appear to back this approach, according to published reports. It is, at least for now, being viewed as a step along the way to Republican health reform.

“I think that most people would understand that what you’re really voting on is trying to keep the conversation alive,” said Sen. Bob Corker, R-Tenn. “It’s not the policy itself … it’s about trying to create a bigger discussion about repeal between the House and Senate.”

But what if, during these strange legislative times, the skinny repeal were to be passed by the Senate and then go on to become law? States’ experiences with insurance market reforms and rollbacks highlight the possible trouble spots.

Considering the parallels

By the late 1990s, states such as Washington, Kentucky and Massachusetts felt a backlash when some of the coverage requirement rules they’d previously put on the individual market were lifted. “Things went badly,” said Mark Hall, director of the health law and policy program at Wake Forest University.

Premiums rose and insurers fled these states, leaving consumers who buy their own coverage (usually because they don’t get it through their jobs) with fewer choices and higher prices.

That’s because — like the Senate plan — the states generally kept popular parts of their laws, including protections for people with pre-existing conditions. At the same time, they didn’t include mandates that consumers carry coverage.

That goes to a basic concept about any kind insurance: People who don’t file claims in any given year subsidize those who do. Also, those healthy people are less likely to sign up, insurers said, and that leaves insurance companies with only the more costly policyholders.

Bottom line: Insurers end up “less willing to participate in the market,” said Hall.

It’s not an exact comparison, though, he added, because the current federal health law offers something most states did not: significant subsidies to help some people buy coverage. Those subsidies could blunt the effect of not having a mandate.

During the debate that led to passage of the federal ACA, insurers flat-out said the plan would fail without an individual mandate. On Wednesday, the Blue Cross Blue Shield Association weighed in again, saying that if there is no longer a coverage requirement, there should be “strong incentives for people to obtain health insurance and keep it year-round.”

Individual mandate is still unpopular in voter polls

About 6.5 million Americans reported owing penalties for not having coverage in 2015.

Polls consistently show, though, that the individual mandate is unpopular with the public. Indeed, when asked about nine provisions in the ACA, registered voters in a recent Politico/Morning Consult poll said they want the Senate to keep eight, rejecting only the individual mandate.

Even though the mandate’s penalty is often criticized as not strong enough, removing it would still affect the individual market.

“Insurers would react conservatively and increase rates substantially to cover their risk,” said insurance industry consultant Robert Laszewski.

That’s what happened after Washington state lawmakers rolled back rules in 1995 legislation. Insurers requested significant rate increases, which were then rejected by the state’s insurance commissioner. By 1998, the state’s largest insurer — Premera Blue Cross — said it was losing so much money that it would stop selling new individual policies, “precipitating a sense of crisis,” according to a study published in 2000 in the Journal of Health Politics, Policy and Law.

“When one pulled out, the others followed,” said current Washington Insurance Commissioner Mike Kreidler, who was then a regional director in the federal department of Health and Human Services.

The state’s individual market was volatile and difficult for years after. Insurers did come back, but won a concession: For a time, the insurance commissioner lost the power to reject rate increases. Kreidler, first elected in 2000, reclaimed that authority.

Predicting the effect of removing the individual mandate is difficult, although Kreidler said he expects the impact would be modest, at least initially. Subsidies that help people purchase insurance coverage — if they remain as they are under current law — could help blunt the impact. But if those subsidies are reduced — or other changes are made that further drive healthy people out of the market — the impact could be greater.

“Few markets can go bad on you as fast as a health insurance market,” said Kreidler.

As for employers, dropping the requirement that those with 50 or more workers must offer health insurance or face a financial penalty could mean some workers would lose coverage. But their jobs might be more secure, said Joseph Antos, a health care economist and resident scholar at the American Enterprise Institute.

That’s because the requirement under the ACA meant that some smaller firms didn’t hire people or give workers more than 30 hours a week — the minimum needed under the ACA to be considered a full-time worker who qualified for health insurance.

The individual mandate, he added, may not be as much of a factor in getting people to enroll in coverage as some think, because the Trump administration has indicated it might not enforce it anyway — and the penalty amount is far less than most people would have to pay for health insurance.

However, the individual market could be roiled by other factors, Antos said.

“The real impact would come if feds stopped promoting enrollment and did other things to make the exchanges [— the state and federal markets through which insurance is offered —] work more poorly.”

‘Skinny’ Obamacare repeal still lacks votes to pass

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A bare-bones plan picks up some key GOP support, but centrists and conservatives are skeptical.

Even a bare-bones repeal of Obamacare is no sure thing in the Senate.

A handful of key Republican senators who had spurned earlier overtures from GOP leadership endorsed the latest plan to gut Obamacare’s individual and employer coverage mandates and its medical device tax. But several centrists said they’re undecided on the so-called skinny repeal, leaving the GOP in limbo through at least the end of the week.

Jockeying on the scaled-back approach came as the Senate rejected a straight repeal of Obamacare in a 45-55 vote Wednesday. The night before, senators turned aside a comprehensive replacement plan that had been crafted by Senate Majority Leader Mitch McConnell. The roll calls were the latest reminders that GOP leaders’ best hope at this point is just to get something — anything — through the chamber with a bare majority and into a conference with the House.

“Sure. There’s plenty we agree on,” said Senate Majority Whip John Cornyn (R-Texas) late Wednesday when asked whether he can get 50 votes. One challenge for GOP leaders is “trying to explain the concept that we need to do it this way, as opposed to solving all the problems in a Senate bill now.”

Cornyn said broader negotiations on Medicaid reforms and other divisive issues would likely re-emerge in bicameral negotiations with the House. But some Republicans are worried that those talks would revive efforts to wind down a Medicaid expansion that’s benefited their states.

Centrist GOP Sens. Rob Portman of Ohio and Shelley Moore Capito of West Virginia were undecided on the so-called skinny repeal Wednesday. Another Republican from an expansion state, Sen. Dean Heller of Nevada indicated he would back it.

“We’ll see at the end of the day what’s in it, but overall I think I’d support it,” Heller said. He said slashing Obamacare’s Medicaid expansion or its growth rate should be a nonstarter.

Conservatives could be another matter.

“I don’t like it,” Sen. David Perdue of Georgia said of the process. “Because I don’t know where we end up. This whole [health care system] holds together or falls apart in totality. We’ve got a system that is collapsing.”

South Carolina Sen. Lindsey Graham on Tuesday called the possibility of a skeletal plan a “political punt,” but it may be able to clear the narrowly divided chamber. Graham said he would vote for the slimmed-down plan only if House and Senate lawmakers use it to go to conference and come up with a fuller replacement.

Sen. Jeff Flake of Arizona also indicated that he could get on board with the skinny option.

“In Arizona, you have 200,000 people who were paying the [Obamacare insurance mandate] fine and can’t afford insurance,” Flake told reporters. “We gotta have relief to those who, one: can’t find affordable insurance so they have to pay the fine; and, two: even those that can afford to pay the premium, generally can’t afford to utilize the coverage because the deductibles are so high.”

Whether Sen. Mike Lee of Utah can back a trimmed-down proposal “depends how skinny it is,” a spokesman said. But Sen. Rand Paul of Kentucky signaled he could live with the minimalist approach.

“I’ve always said I will vote for any permutation of repeal. Obviously, I want as much as I can get, but I’ll vote for whatever the consensus can be. It’s what I’ve been saying for months: Start on what you can agree on,” Paul said in an interview Wednesday. “Starting small and getting bigger is a good strategy.”

That would leave out the divisive issues of cuts to Medicaid spending and efforts to create a new tax credit system for the individual markets. Republicans can afford to lose just two votes to pass whatever they come up with in the end.

Many Republicans are in the dark about the emerging proposal. And aides said senators were still focused on amendment votes, floor tactics and the chaotic atmosphere, making it difficult to tell what can clinch 50 votes.

“I don’t know what would be in the skinny repeal,” said Sen. Susan Collins of Maine. “Until I see what’s in it, I’m not ruling it out because I don’t know what it would be.”

The Senate also rejected on Wednesday an attempt to send their repeal effort to congressional committees for several days.

Republicans need a score on any proposal from the Congressional Budget Office to vote at a 50-vote threshold. They are aiming for a vote on Friday on their final plan after the unlimited amendment process known as vote-a-rama, which is expected to begin sometime Thursday.

In the final bill, Republicans could try to add more elements than repealing the mandates and device tax, but that could complicate efforts to get a quick CBO score.

“Look for victories where we should find them. In my opinion, the victory will always include: individual mandate repeal, employer mandate repeal and [eliminating] the medical device tax,” said South Carolina Sen. Tim Scott. “If we can add to it, we should … as much as you can repeal, let’s get it done.”

The CBO has scored those three pieces of the proposal in the past and could deliver an analysis of the “skinny repeal” more speedily than of a more wide-ranging effort, GOP senators said. Still, Republicans will have to add additional Obamacare provisions to the bill to meet minimum savings requirements required under reconciliation, the budget mechanism that allows for a bare majority instead of 60-vote threshold.

Republicans are likely to cut the Prevention and Public Health Fund, for instance. The goal would be to increase the bill’s scope enough to meet Senate savings targets without losing political support, according to Republican sources. They may be able to do so because slashing the mandates means millions would drop insurance coverage — and the subsidies that come with it.

In the end, Senate leaders would want the House to either take up their bill or go to conference and hammer out a compromise that can pass both chambers.

“I can’t imagine at the end of the process that we haven’t agreed on something,” said Sen. Roy Blunt (R-Mo.). “And all we have to do is agree on something that keeps this going.”

But conservatives are wary of a House-Senate negotiation.

“I would [be in] favor if we have a skinny repeal, just sending it over to the House and seeing if they can pass it rather than going to conference,” Paul said. “Conference committee to me means Big Government Republicans are going to start sticking in those spending proposals.”