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Average Premiums for Popular ACA Plans Rising 25 Percent

Insurers are raising the 2017 premiums for a popular and significant group of health plans sold through by an average of 25 percent, more than triple the percentage increase of this year’s plans, according to new government figures.

The steep increase in rates serves broadly to confirm what has become evident piecemeal in recent months: Prompted by a burden of unexpectedly sick Affordable Care Act customers, some insurers are dropping out while many remaining companies are struggling to cover their costs.

The figures, announced by federal officials Monday, injected a new round of uncertainty into the future of the insurance exchanges that are a core feature of the 2010 health-care law. Health policy experts said the rising prices and shrinking insurance options add tumult to the coming ACA enrollment season. The data immediately touched off a fresh round of criticism among the ACA’s persistent Republican congressional opponents.

In disclosing the 2017 rates, officials played down the impact of higher prices on consumers. They said that more than 8 in 10 consumers will qualify for ACA subsidies that will cushion them from the effects of more-expensive insurance. And they noted that as premiums go up, more Americans will be eligible for the tax credits.

In a conference call with reporters, two Department of Health and Human Services officials did not mention the average percentage increase in price. Instead, they briefly mentioned the smaller, 16 percent median increase — a statistic that has not been in previous years’ analyses.

Read the full article here.

Will the Administration’s Making Good on Billions of Dollars Due the Health Plans Solve Obamacare’s Exchange Problems?

Amy Goldstein at the Washington Post is out with a story reporting that the Obama administration is looking to use an obscure federal law to pay billions of dollars in Obamacare risk corridor liabilities to participating insurance companies.

You might recall that the administration was only able to pay 12.5% of what insurers were owed for 2014 under the reinsurance program designed to protect health plans from losses in the insurance exchanges. It has been assumed that payments for 2015 losses would fare no better.

The fundamental problem was that carriers who lost money did so at a rate eight times greater than the level of carriers who made money in 2014––there just wasn’t enough money coming from profitable carriers to pay the carriers losing money all that they were owed under the reinsurance scheme. When the administration said they would try to make up any deficit from other funds, Republicans put a provision in a budget bill that prohibited that.

Because these payments were not made, most insurance companies took a major hit to their bottom lines. The hit was so bad that many of the new Obamacare co-ops collapsed at least in part because of the incomplete payments.

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With Health Care in the Spotlight, Experts Discuss Affordability of Medicines

Last week, the Bipartisan Policy Center hosted an educational forum on affordable medicines. This forum was the first in a series of conversations BPC plans to convene in the coming months to better understand how private sector decisions and public sector policies impact the prices of drugs and their costs to America’s health care system.

Bill Hoagland, senior vice president at BPC, opened the forum by acknowledging the timeliness of the issue in a year where there has been vibrant media coverage of the rise in pharmaceutical prices and spending. He also outlined the goals of the discussion: describing the delicate balance between the cost and pricing structures of medicines, along with issues of affordability and access.

Jack Hoadley, PhD, of Georgetown University, provided the event’s keynote address and gave the audience an overview of drug prices and the supply chain, highlighting recent spending trends and the value pharmaceuticals provide in the broader health system.

After Dr. Hoadley’s presentation, BPC Senior Advisor Dr. Anand Parekh moderated a panel discussion that explored the present system of pricing medicines. Our panel of experts represented a wide-range of viewpoints from stakeholders, including: Kirsten Axelsen, vice president in worldwide policy, Pfizer; Mary Dwight, senior vice president for policy and patient assistance programs, Cystic Fibrosis Foundation; Tom Moriarty, executive vice president, chief health strategy officer and general counsel, CVSHealth; Dr. Edmund Pezalla, vice president and national medical director for pharmaceutical policy and Strategy, Aetna; and Dr. Wayne Riley, president, American College of Physicians.

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Is Obamacare’s Failure Intentional, to Promote Medicaid-for-All?

A recent commentary in the Wall Street Journal announced, “Obamacare’s meltdown has arrived.” Health insurance premiums all over the country have skyrocketed. Numerous insurers have pulled out of state and federal exchange marketplaces. Many consumers have only one choice of health insurer and can choose from only a couple different plans. State health insurance CO-OPs have been falling like dominos and the program is now all but defunct.

None of this should have come as a surprise. Over the years I’ve heard conspiracy theories that Obamacare was designed to fail to nudge a reluctant nation one step closer to a single-payer system of socialized medicine. Think of this as Medicaid-for-All.

Bernie Sanders famously advocated for single-payer socialized medicine during his campaign. In 2011, the Vermont legislature passed a bill to create a single-payer initiative. Green Mountain Care was abandoned in 2014 by Vermont’s governor — a Democrat — as being too costly. Green Mountain Care was going to require an 11.5 percent payroll tax and an additional sliding-scale income tax that topped out at 9.5 percent. Despite the heavy tax burden, a single-payer system in Vermont was projected to run deficits by 2020.

A similar initiative is now taking place in the pothead capitol of Colorado. Amendment 69, popularly called ColoradoCare, would create a taxpayer-funded health insurer. ColoradoCare would replace most forms of private health insurance and would cover nearly all state residents, including Medicaid enrollees. Federal health insurance programs, Medicare, TRICARE and the VA would remain separate.

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CMS Details Open Enrollment Strategy (With Risk Corridor Litigation Update)

On October 13, 2016, the United States House of Representatives requested permission of the Court of Claims to file an amicus brief in Health Republic v. United States. Health Republic was the first of at least eight cases that have now been filed by insurers challenging the failure of the government to pay the full amount they claimed under the risk corridor formula contained in the ACA. The risk corridor program is one of the three premium stabilization programs created by the ACA. It collects contributions from participating insurers that make profits that exceed certain statutory “risk corridors” and make payments to insurers whose losses fall outside those risk corridors.

Although the risk corridor statute seems to require payments to insurers with excessive losses regardless of the amount actually collected under the program from profitable insurers, Congress adopted appropriations riders in 2015 and 2016 making the program budget neutral—that is, limiting the administration to paying out only as much as it collected under the program. In fact, HHS paid out only 12.6 cents on the dollar for claims for 2014 and has announced that all 2015 collections will go to 2014 claims.

The administration moved to dismiss the Health Republic case in June, but argued only that the case was premature because the risk corridor program was still ongoing and more money might be paid later. In guidance released in September, HHS suggested that the full amount due insurers under the program would have to be paid and that it was open to settling the cases against it. This provoked a furious outcry from Republicans in Congress, who accused the administration of trying to make an end run around the appropriations rider. In late September, the administration filed motions and briefs in other risk corridor cases arguing that in fact the appropriations rider cut off any further risk corridor funding for 2014.

Read the full article here.