Category Archives: Obamacare

New Study: Cheapest Obamacare Plans Are “Unaffordable” In 94% Of American Cities

We’ve frequently warned that Obamacare is locked in an inescapable death spiral that will result in its inevitable failure.  The problem is that the folks who make too much to qualify for subsidies (currently defined as roughly $80,000 for a family of 3) are increasingly being priced out of the market for individual insurance by Obamacare’s 30%+ price hikes that consistently come year after year.  Meanwhile, those “rich” families making $80,000 a year are the ones expected to overpay for their health insurance so that a portion of their premiums can be “spread around a little bit” (as Obama likes to say) to subsidize the premiums of others.  Of course, it’s easy to see the circularity here as higher premiums equals less “full-paying” customers and less subsidies equals higher premiums…until the whole system collapses.  

Luckily you no longer have to take our word for it as eHealth.com has just published a new study that finds that, even by Obamacare’s own definition of “affordability”, residents in 47 out of 50 cities surveyed can’t afford the cheapest Obamacare plan.

According to a study released today by eHealth, Inc., which operates eHealth.com, the average family of three earning slightly too much to qualify for subsidies in 2018 would need to increase its household income by nearly $29,000 before health insurance became “affordable” based on Obamacare criteria.

The Affordable Care Act (ACA or Obamacare) considers health insurance to be “unaffordable” when annual premiums for the lowest-priced plan in a market cost more than 8.16% of a household’s modified adjusted gross income (or MAGI). When health insurance is unaffordable by this standard, individuals and families may qualify for an exemption from Obamacare’s individual mandate to buy health insurance.

“Coverage under the Affordable Care Act is becoming seriously unaffordable for many families, even by Obamacare’s own rules,” said eHealth CEO Scott Flanders. “I find it hard to believe that the framers of the law ever intended the cost of family health insurance to rival that of a second mortgage. Without the introduction of lower-cost options into the market or expanded government subsidies, many middle-income Americans are in danger of being priced out of the health insurance market entirely.”

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Meanwhile, if anything, the study conducted by eHealth was somewhat conservative as it only assumed a 10% premium increase in 2018.

In preparing its analysis, eHealth reviewed the lowest-price 2017 plan available for families of three comprised of two adults age 35 and one child. The same family model was analyzed using data from Healthcare.gov in 40 cities, data from eHealth.com in 9 cities not utilizing Healthcare.gov, and data from the New York state exchange for New York City.

After applying a relatively modest annual rate increase of 10% to 2017 rates to project 2018 rates, eHealth discovered the following:

  • In 47 of 50 cities surveyed, the lowest-priced plan would be officially unaffordable under Obamacare affordability standards for families earning 401% of the federal poverty level (about $82,000 per year in the contiguous US, making them ineligible for Obamacare subsidies).
  • Among these, the average three-person household would need to earn an additional $28,939 per year before the lowest-cost plan becomes affordable according to Obamacare rules.

To put eHealth’s findings in perspective, a family of 3 in Charlotte, NC, with an annual income of $81,884, would have to spend 18% of their gross income in 2018 just to purchase the cheapest Obamacare plan for their family.  On a post-tax basis, that expenditure would be well over 20%.  Moreover, as eHealth points out, that family of 3 would have to find a way to make an extra $102,245 per year to meet the “affordability” test included in the Obamacare legislation.

Here’s how other cities compared on Obamacare “affordability”:

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Steve Bannon famously said, “If you think they’re going to give you your country back without a fight, you’re sadly mistaken.” This is a long war. The alt-right would be wise to think about how to win a long, low grade culture war. That means building up the intellectual and cultural side, while also systematically throwing sand in the gears of the colonial machine. The path to victory is to make neo-liberalism too expensive to maintain and too unappealing to support.

Source: ZeroHedge

 

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Death Spiral: 6.5 Million People Choose To Pay Tax Rather Than Buy Obamacare

For those who still aren’t convinced that Obamacare is trapped in an inescapable death spiral that will inevitably end in nothing short of an epic collapse of the federal and state health insurance exchanges, perhaps you should consider the following facts from the National Review and Mark Farrah and Associates.

–  Four heavily promoted open enrollments have taken place run by the Obama administration and the state exchanges.

–  Federal law has required people to purchase insurance or pay a fine — and the individual mandate was administered through 2016 by the Obama administration. In fact, in 2015, 7.5 million people paid the fine, while 6.5 million paid the fine in 2016, according to the IRS.

–  Every one of the people in the insurance market earning less than 400 percent of the federal poverty level were eligible for premium assistance — and those below 250 percent of the poverty level were also eligible to have their deductibles and co-pays subsidized.

–  After all of this, only about 40 percent of those eligible for subsidies have signed up for coverage. In what other business or government program would such a dismal acceptance by those it was targeted to serve be considered a success?

–  The number of insurance companies participating is on track to shrink by 38 percent in 2018.

And then there is the chart below…if people really saw “value” in Obamacare wouldn’t you expect that more than 2% of the people who don’t qualify for subisidies would sign up?

Finally, I will suggest the real test of whether a health-insurance program is stable is whether the consumers for whom it is intended believe that it provides them with value. Here is a chart of the take-up rate on the federal exchanges under the Affordable Care Act; excluding the “Over 400%” category, all of these individuals are eligible for subsidies. This chart represents data from last year, but with only a 4 percent reduction in those purchasing on the exchanges between 2016 and 2017, it should remain a fair indication of consumer approval of the program.

The health-insurance industry has long considered a 75 percent take-up rate to be the gold standard in evaluating whether an insurance pool is stable — i.e., whether there are enough healthy people signed up to pay the claims of the sick. While the exchanges appear to have achieved this for the lowest-income consumers — those who get the biggest premium subsidies and also have their out-of-pocket costs subsidized — only 17 percent of those making 301 to 400 percent of the poverty level have signed up.

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Still not convinced, how about this?  The “off-exchange market” (i.e. people who make too much money to quality for subsidies and whose premiums are required to subsidize everyone else who does qualify) contracted by 2.1mm in 2016, or a 29% drop.  With those kind of declines, it’s only a matter of time until there are no more rich fools in the pool willing to continue subsidizing a broken system.

Also, MFA published the same report in 2016, facilitating a year-over-year comparison. The on-exchange market fell from 12,681,874 to 12,216,003 individuals, a reduction of 465,871 or 4 percent. However, the off-exchange market fell from 7,520,939 to 5,361,451, a reduction of 2,159,488 or 29 percent. In other words, enrollment is steady among those who receive subsidies but declining dramatically among those who do not.

Much has been made of the question of whether the individual markets are in a “death spiral.” Given that the on-exchange market enrollment is relatively stable, there is clearly not a death spiral in the subsidized market. However, with a reduction in the unsubsidized market of 29 percent in just one year, that pattern certainly looks like one we would expect in a market spiraling down.

Meanwhile, of course, that 29% drop exactly why insurance companies are expected to hike their rates by 20-40% in certain markets again in 2018…

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…and why rates have soared an average of 113% over the past 4 years, or nearly 30% per year.

Source: ZeroHedge

Covered California Plans To Jack 2018 Premiums Up 12.5%

Covered California announced this week that its 2018 rates will increase about eight times faster than the rate of inflation, as the Obamacare law and the state’s liberal legislature continue to destroy private insurance in California.

Despite the latest United States Department of Labor Consumer Price Index for the month of June estimating that inflation rose by only 1.6 percent over the last twelve months, Covered California, Obamacare for the state, just announced that the average health insurance premiums on the California insurance exchanges would rise by 12.5 percent, or about 7.81 times faster than the rate of inflation.

Covered California’s spiking prices are actually a relative bargain compared to the even worse Obamacare price increases insurers are about to extract across the rest of the nation. The Wall Street Journal recently reported that “big insurers in Idaho, West Virginia, South Carolina, Iowa, and Wyoming are seeking to raise premiums by 30 percent or more.”

The insurance industry lobbied the Democrat-controlled Congress in 2010 to design Obamacare to be more expensive than traditional private insurance by dramatically expanding services covered in the health benefit packages.

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Section 1302 of the law granted also the Department of Health and Human Services the right to periodically revise an “essential health benefits package” of minimum health insurance coverage requirements. That allowed insurance companies to lobby federal bureaucrats to add more benefits and eliminate the standard lifetime caps on spending for wildly expensive treatments, such as inpatient drug rehabilitation.

Since the 2013-4 launch of Obamacare, premiums have risen by about 15 percent per year, despite inflation averaging only about 2 percent a year.

Not only were insurance companies making huge increases in revenue during the Obamacare years, their gross profit margins jumped from 22 percent, when Obamacare was passed in 2010, to 26 percent in the last quarter of 2016. Healthcare stocks have been the second-hottest sector in the seven-year bull market for stocks. Since Obamacare was passed on March 23, 2010, the healthcare stock index has risen by 248 percent.

The Trump presidential win appeared to represent an existential threat to the healthcare industry’s Obamacare bonanza. But with the Republican Senate failing to pass any type of Obamacare repeal, the healthcare stocks hit another all-time-high on July 31.

Many major healthcare companies that supported the expansion of Obamacare benefits and costs over the last seven years are now dropping out of the program as customers begin to take full advantage of the expanded and unlimited benefits.

United Healthcare, America’s largest healthcare insurer, announced in March 2016 that it was exiting all Obamacare exchanges after stating that Obamacare claims would reduce 2016 earnings by about $850 million. Still, four months later, United Healthcare recorded all-time-record quarterly revenues of $46.5 billion, a $10 billion increase over the prior year.

Covered California had been able to keep healthcare premium growth to around 10 percent per year because 11 healthcare insurers were participating. But Aetna dropped out at the end of 2016, and Anthem Blue Cross just announced they are dumping 153,000 customers and shutting down California operations in all regions except the rural north state, Central Valley, and Santa Clara County, according to the Orange County Register.

The 12.5 percent Covered California statewide increase is just an average. Abandoned United Healthcare subscribers can still buy coverage from Blue Shield, but their annual premium cost is expected to leap by 24 percent.

Covered California premium rates could jump statewide by another 16.6 percent if the Trump administration does not contest the May 12, 2016 ruling by U.S. District Judge Rosemary M. Collyer in United States House of Representatives v. Price that the Obama administration improperly amended Obamacare in January 2014 to pay billions in cost-sharing subsidies to insurers without congressional approval.

By Chriss W. Street | Breitbart

 

More Rural Hospitals Across Tennessee At Risk Of Closing

PARSON, Tenn. – With barely 11,000 residents you could consider Decatur County to be on the front lines of a battle being fought across rural America right now, one that small town hospitals are repeated losing putting patients in life or death situations.

Built in 1964, Decatur County General Hospital lies just a few blocks from the center of the town of Parsons. The “L” shaped building is currently running with a bare minimum staff, 80 full time employees and just one doctor. Hospital officials have worked tirelessly over the last few months, trimming the staff of nurses and lab technicians down from 110 people in an effort to minimize costs. The county mayor here estimates Decatur General lost about $200,000 last year, this life line to so many is currently on life support and in danger of closing.

“If this goes away there are so many people who won’t get the care they need,” says Paulette Johnson who was at the emergency room on a recent Tuesday having x-rays done on her neck.

The 67-year-old lives in Scotts Hill, Tennessee, a town that lies about 20 minutes away from the emergency room at Decatur County General Hospital. If this hospital shuts its doors, it would take more than an hour for Paulette to get to the next closest emergency room.

That kind of drive could mean the difference between life or death in an emergency.

“They can save your life here, you’re gonna lose your life if you have to go further,” Paulette says.

Decatur County General is hardly alone in the struggle to stay open. Nationwide 81 rural hospitals have closed since 2010. Nine of those closures have happened in Tennessee, county run hospitals from the eastern mountains to the Mississippi River have disappeared. The only state with more rural hospital closures than Tennessee is Texas, where in 2013 an 18-month old died after being rushed to an emergency room that her parents didn’t realize had closed.

Here is a list of the eight facilities that have recently closed in Tennessee:

  • Riverview Regional Medical Center North (August 2012)
  • Gibson General Hospital (January 2014)
  • Humboldt General Hospital (January 2014)
  • Haywood Park Community Hospital (August 2014)
  • Methodist Healthcare-Fayette Hospital (March 2015)
  • Medical Center of Manchester (July 2015)
  • Tennova Healthcare McNairy Regional Hospital (May 2016)
  • Pioneer Community Hospital of Scott, formerly Scott County Hospital (July 2016 but slated to reopen August 2017)

Source: NewsChannel5

Sen. Rand Paul: Senate GOP Decide to Keep Obamacare

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I miss the old days, when Republicans stood for repealing Obamacare. Republicans across the country and every member of my caucus campaigned on repeal – often declaring they would tear out Obamacare “root and branch!”

What happened?

(Breitbart) Now too many Republicans are falling all over themselves to stuff hundreds of billions of taxpayers’ dollars into a bill that doesn’t repeal Obamacare and feeds Big Insurance a huge bailout.

Obamacare regulations? Still here. Taxes? Many still in place, totaling hundreds of billions of dollars.

Insurance company bailouts? Those, too. Remember when Republicans complained about Obamacare’s risk corridors? Remember when we called the corridors nothing more than insurance company bailouts? I remember when one prominent GOP candidate during a presidential debate explicitly called out the Obamacare risk corridors as a bailout to insurance companies. Does anyone else?

Now, the Senate GOP plan being put forward is chock full of insurance bailout money – to the tune of nearly $200 billion. Republicans, present company excluded, now support the idea of lowering your insurance premium by giving a subsidy to the insurance company.

Remarkable. If the GOP now supports an insurance stabilization fund to lower insurance prices, maybe they now support a New Car stabilization fund to lower the price of cars. Or maybe the GOP would support an iPhone stabilization fund to lower the price of phones.

The possibilities are limitless once you accept that the federal government should subsidize prices. I remember when Republicans favored the free choice of the marketplace.

The Senate Obamacare bill does not repeal Obamacare. I want to repeat that so everyone realizes why I’ll vote “no” as it stands now:

The Senate Obamacare bill does not repeal Obamacare. Not even close.

In fact, the Senate GOP bill codifies and likely expands many aspects of Obamacare.

The Senate Obamacare-lite bill codifies a federal entitlement to insurance. With the Senate GOP bill, Republicans, for the first time, will signal that they favor a key aspect of Obamacare – federal taxpayer funding of private insurance purchases.

The bill will transfer billions of dollars to people who will then transfer billions of dollars to insurance companies. What a great business model – encourage the federal government to use taxpayer money to buy a private company’s product. Great business model, that is, if you are Big Insurance. Remarkable.

The Senate Obamacare-lite bill does what the Democrats forgot to do – appropriate billions for Obamacare’s cost-sharing reductions, aka subsidies. Really? Republicans are going to fund Obamacare subsidies that the Democrats forgot to fund?

Doesn’t sound much like repeal to me. One might even argue it’s worse than Obamacare-lite because it actually creates a giant superfund to bail out the insurance companies – something even the Democrats feared to do.

I was first elected in the heady days of the Tea Party Tidal Wave, when tens of thousands of citizens gathered on the central city lawn to protest Big Government, Big Debt, and a government takeover of health care.

This citizenry won in four elections. Each time, the GOP establishment told conservatives, “We can’t repeal Obamacare until we have all three branches of government.” Finally, in 2016, that came to pass. Republicans now control all three branches of government.

And . . . the best that is offered is Obamacare-lite: keeping the Obamacare subsidies, keeping some of the Obamacare taxes, creating a giant insurance bailout superfund, and keeping most of the Obamacare regulations.

Shame. Shame on many in the GOP for promising repeal and instead affirming, keeping, and, in some cases, expanding Obamacare. What a shame.

Aetna Pulls Out Of Obamacare

Health insurer Aetna Inc (AET.N) said on Wednesday it will exit the 2018 Obamacare individual insurance market in Delaware and Nebraska – the two remaining states where it offered the plans.

Aetna has now “completely exited the exchanges,” the company said in an emailed statement.

Republicans in the U.S. House of Representatives last week voted to undo the Affordable Care Act, often called Obamacare, the signature domestic achievement of former President Barack Obama.

But even if the Republicans’ bill – known as the American Health Care Act – is passed by the Senate it would not solve a critical outstanding issue for insurers looking at 2018: Will the government continue to fund the cost-sharing subsidies that help individuals pay for care?

By Deena Beasley | Reuters