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Is Obamacare Really Dead?
23 21 19 18 17 15 14 13 12 CO-OPs offering plans in 25 22 20 19 18 17 16 15 14 states
There’s currently a lot of talk about Obamacare heading into a “death spiral,” which most of Ricochet’s readership predicted before Barack, Nancy and Harry whipped, bribed, and bamboozled a Democrat-led Congress to drag ACA across the reconciled finish line.
National Review’s free market proponent Kevin Williamson wrote a great article “Obamacare is Dead” which is being joyfully retweeted among the conservative Twitterverse.
The fact is that Obamacare has fallen apart without Republicans’ dismantling it. Almost all of its basic promises have failed, it is an economic shambles, and it is a political mess: Unsurprisingly, people still don’t like it. Less than a third of Americans support the individual mandate, three-fourths oppose Obamacare’s tax on high-end health-care programs, and more voters oppose the law categorically than support it. A quarter of voters say the law has hurt them personally.
I am personally in that quarter of voters and documented it in my very first post here on Ricochet.
Williamson also points to the CO-OP failures which are the raison d’être of the current news about Obamacare’s demise.
Many of us — myself included — assumed that the federal government under President Obama would simply write these co-ops huge checks to keep them afloat. We were half right: The government is writing them huge checks, but they are failing anyway, so fundamental is their economic unsustainability.
What President Obama and the ACA proponents didn’t predict was the 2014 cRomnibus spending bill requiring the CO-OPs to be “budget neutral.” This was a major deathblow to the CO-OPs and shows how Congress can effectively use the power of the purse (reminder to Paul Ryan).
Now there’s news that, depending on who you believe, Obamacare (sorry Nancy, I will always call it Obamacare, not the ACA … he owns it) premiums are about to increase from 7.5 percent to 20.3 percent.
The great thing about Twitter is getting instant responses from people when you have a question. I asked Louise Norris from HealthInsurance.org and The Colorado Health Insurance Insider (who represents herself as “Focused on healthcare reform and Medicaid expansion”) about the CMS 7.5 percent estimated increase in Obamacare premiums, and why the Daily Caller stated it was really a 20.3 percent increase in premiums (because the stats used were primarily Silver Plans, not the rest of the metals).
From Monday’s Daily Caller:
Obamacare premium costs will soar 20.3 percent on average in 2016 instead of the 7.5 percent increase claimed by federal officials, according to an analysis by The Daily Caller News Foundation.
The discrepancy is because the government excluded price data for three of the four Obamacare health insurance plans when the officials issued their recent forecast claiming enrollees would face only a 7.5 percent average rate increase in 2016.
Norris pointed me to Charles Gaba‘s article countering Daily Caller. But when you read the article it shows not a 7.5 percent increase in premiums but a 12-13 percent increase. The muddy justification was that the DC article looked at the full ACA-compliant individual market, including off-exchanges. In other words, not the laser-focused, benchmark specific numbers the ACA proponents want you to look at, but all the numbers. They only wanted to include 25 percent of the plans. Selective accounting or fuzzy math, this is the way reporting is now done in the Beltway. Either way, premiums are skyrocketing.
So how does this effect the CO-OPs and just what is a CO-OP anyway? From Louise Norris’ own HealthInsurance.org:
Consumer Operated and Oriented Plans (CO-OPs) were created under a provision of the Affordable Care Act. CO-OP plans were proposed by Senator Kent Conrad (D-ND) when the original public plan option was jettisoned during the health care reform debate. Lawmakers added the CO-OP provision to the Affordable Care Act to placate Democrats who had pushed for a government-run, Medicare-for-all type of health insurance program.
At the time, progressives who preferred a public option derided CO-OPs as a poor alternative because they can’t utilize the efficiencies of scale that would come with Medicare For All, nor do they have the market clout that a single payer system would have when negotiating reimbursement rates with providers.
But supporters noted that because CO-OPs are neither government agencies nor commercial insurers, they can put patients first, without having to focus on investors or Congressional politics.
Instead of paying shareholders, CO-OP profits are reinvested in the plan to lower premiums or improve benefits (in 2014, only one CO-OP, Maine Community Health Options, had revenue that exceeded claims and administrative expenses – but the reinvestment of profits is the plan for all CO-OPs, once they become profitable). And customers’ health insurance needs and concerns become a top priority because the CO-OP’s customers/members elect their own board of directors. And a majority of these directors must themselves be members of the CO-OP.
CO-OPs are private, nonprofit, state-licensed health insurance carriers. Their plans can be sold both inside and outside the health insurance exchanges, depending on the state, and can offer individual, small group, and large group plans. But they’re are limited to having no more than a third of their policies in the large group market (a more lucrative market than individual or small group).
Lawmakers had originally planned to provide $10 billion in grants to get the CO-OPs up and running in every state. But insurance industry lobbyists and fiscal conservatives in Congress succeeded in reducing the total to $6 billion, and turning it into loans – with relatively short repayment schedules – instead of grants (and CO-OPs are not permitted to use federal loan money for marketing purposes). Then, during budget negotiations in 2011, those loans were cut by another $2.2 billion. And in 2012, during the fiscal cliff negotiations, CO-OP funding was reduced even further – and applications from 40 prospective CO-OPs were rejected.
Ultimately, the Centers for Medicare and Medicaid (CMS) awarded about $2.4 billion in loans to 23 CO-OPs across the country (there were 24 CO-OPs, but Vermont Health CO-OP never became operational. CMS retracted their loan in September 2013 – before the exchanges opened for the first open enrollment – because there were doubts that the program could be viable with Vermont’s impending switch to single-payer healthcare in 2017; ironically,Vermont pulled the plug on their single payer vision in late 2014).
The Obamacare cheerleaders (MSM) are taking note, and although they are putting the onus on the Republicans, they have no answer for the failure of the largest entitlement program in generations.
Co-op customers will be able to shop for insurance sold by other carriers in the three-month open enrollment period that began Sunday and continues through Jan. 31.
Daniel R. Levinson, the inspector general at the Department of Health and Human Services, said in July that most of the co-ops were losing money and falling short of their enrollment goals. But the administration expressed confidence in the program at that time, saying the co-ops “may experience short-term ups and downs,” like start-ups in any industry.
In a separate initiative, the administration said on Tuesday that it would hold a forum on the high prices of some prescription drugs.
Sylvia Mathews Burwell, the secretary of health and human services, said the conference, scheduled for Nov. 20, would seek ways to speed the discovery of innovative drug treatments while making them more affordable.
Squirrel alert! Don’t worry about the collapse of our only first-term achievement, let’s talk about high prescription prices, which will ultimately need another government program.
So, the CO-OPs are closing. Premiums are going through the roof. Higher deductibles are requiring the insured to learn the art of negotiation for cash prices, and this is before the hammer drops on the Employer market.
Is Obamacare dead? Not quite yet, but doctors are standing by with the defibrillator. Let’s hope they still take insurance.
Published in General
“Daniel R. Levinson, the inspector general at the Department of Health and Human Services, said in July that most of the co-ops were losing money and falling short of their enrollment goals. But the administration expressed confidence in the program at that time, saying the co-ops “may experience short-term ups and downs,” like start-ups in any industry.” – Why is it government clowns with no experience at all in running a real business, insist on comparing their tax-funded sinkholes to the private sector?
One of the most irritating aspects of Democrat Jennifer Granholm’s punishing governorship of my home state of Michigan, was the grating experience of listening to her husband’s weekly lecture on how people should just “start a business in their garage” -Like Steve Jobs!
Obamacare was born to die. Nothing in its structure suggested it is or ever was intended as a durable solution.
Even Nancy Pelosi, the greatest legislator of the 21st century (absolutely serious and I own that statement) could ram through single payer to Obama’s desk.
The only way single payer/Medicare eligibility age = birth can be foisted on us is by our choosing it as a last ditch option. The choice gets much easier once all healthcare cost risk mitigation enterprise (fancy description of insurance) is destroyed.
I think the crash of Obamacare is right on schedule. This is the crisis the left hopes will sweep the next democrat wave into office.
David – world class research and post. Well done sir.
Agreed! Solid!
I love being lectured to by bureaucrats who have never once had to make payroll.
There should be a law that any civil servant who determines public fiscal policy and budgetary decisions should show proof they have started up and run a successful enterprise.
It’s shocking that the exchanges are failing! Apparently there are far too many sick and elderly signing up and far too few young and healthy! (this is apparently being reported as news) Who could have seen that coming????
Unfortunately I agree with you. They knew this would happen, but I would suggest they didn’t think it would happen so fast. With the rapidity of the increases in premiums and cancellations of policies, maybe (just maybe) voters will realize that the evil Republicans who didn’t want this were right.
Now the GOP better get their butts in gear to market a cross state, free market solution, and effectively communicate it before 2016.
Thanks Brent!
A couple of days ago after informing a leftie friend of mine that my HMO monthly costs went up 34%, I was directed to the cost control solution to this problem. The Bernie Sanders website with Medicare for all. So yeh, Obamacare was never meant to work.
Maybe John Roberts has some ideas, since rescuing this disastrous law is his apparent calling.
History will show the key word of this administration will be “Unexpected”.
“The GDP landed with a 1.5% unexpected thud.”
“Millions lose their insurance, Dr. and see unexpected massive deductible increases.”.
2010, 2014: “U.S. Congress, Senate and State Houses see unexpected Republican wave.”
QED for what Brent just said. Good luck with that BGM.
Roberts tortured thought experiment justifying O’Care will never ever be understood. Claiming the ‘intentions’ of the law should be followed, instead of the legality of it. This was the stuff of student council decisions, not SCOTUS.
Let’s not forget AMA’s collaboration in getting Ocare implemented.
Can the AMA be sued as a monopoly under antitrust and unfair trade practices with the government?
I have always loved the story of George McGovern, who learned too late the lessons of liberal regulatory overreach.
I like Kevin Williamson a lot, but when I saw the headline “Obamacare is Dead,” and the byline, I discounted the report of the shape Obamacare was in.
I was just about to say that we shouldn’t be too gleeful. There are sharp avenues of attack for the left out of all this.
Agreed. But who in the world can get that done as anything other than preaching to the choir? Who can pitch it more broadly?
That’s what I keep thinking. The failure is due to greedy insurance companies and their Republican enablers. The market is a failure, time to go to single payer.
I agree , this was their plan. However, the sheer and stupid incompetence displayed on the website, the idiotic “Keep your Doctor” blatant lies and the rise in premiums will allow even the message deaf and stupid GOP to fend off the media attacks and pin this on Hillary. Healthcare will become her worst baggage and may sink her. Hillary has to either wish it away or go all in for single payer and say, “trust me, we will get it right this time”.
Even a blind squirrel can find a winning tactic politically once in a while. Who has the rights to the old Harry and Louise commercials?
“I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender.”
Why can’t people simply learn from other people’s lessons. Why is it that we must continually make the same mistakes over and over, and only await someones twilight years before we may find wisdom?
Incredible. Thanks M!
If the contenders together look macro (not Marco) and present a unified GOP plan that would be implemented no matter who wins, people would warm to both the candidates and the idea that replacing Obamacare would benefit them.
Do something like a “Healthcare Contract with America” that all candidates sign. Make it simple:
David,
“Healthcare Contract with America”
I like it. Remember Obamacare is on lying life support. With BHO constantly falsifying everything and hiding all the negative projections into the future Obamacare is dead already.
If the Republicans do your “Healthcare Contract with America” and we can sabotage the Obamite advanced lying technology they are so good at this could work.
Maybe we could chip in and have John Roberts pied.
https://youtu.be/_6tieXd6ii8
Regards,
Jim
I agree, but unfortunately, I am afraid I am likely to get caught in the undertow as it sinks. My my monthly health insurance bill is twice my mortgage payment.
I do not have benefits enjoyed by those at large corporations or working for various levels of government. I do not qualify for Obamacare subsidies (nor do I really want them). The result will be health insurance doing a Bela Lugosi act on my savings.
It reminds me of the end of the Roman Empire when the very wealthy avoided paying taxes by deferring payment until tax forgiveness was declared with the arrival of a new emperor, and the poor had no taxes to pay. Meanwhile the small farmers, craftsmen, and minor merchants were pushed to penury by taxation they could not avoid paying and could not afford to pay.
Seawriter
Can a ‘Tax’ receive a subsidy? I’m sure that Beltway, Ivy League Constitutionalist, ‘calling only balls & strikes’ will find a way to save it a third time.
If these cross-state restrictions are a matter of state regulation, leave them be. I am hardly ever in favor of federal attempts to overrule states on regulation, and do not expect any good to come from it if they succeed.
On the second point: What do you mean, “maintain pre-existing conditions”? Do you want people to stay sick with chronic conditions? Or do you want to continue that part of ObamaCare? I don’t think I would favor that, either, unless you want a Republican plan to fail so Democrats can take over again.
I couldn’t possibly disagree more. It was totally structured to live because it punishes the affluent and supports the non-productive.
Perfect!
Not as much as single payer.
If only that was the worst of it. The worse problem is that Obama and the Democrats want to punish/support the affluent, the non-productive, and everyone.
I support state rights and the 10th amendment in all cases. But this isn’t a state rights issue. This is really an anti-trust monopoly issue. Insurance is regulated by the states which limits you to your own state to buy your insurance. This is due to lobbyists who ensure mandates which raise the costs of premiums by 30-50 percent.
Those mandates are different for each state. One state may require your insurance covers birth control, while another ensures you will be covered for new euthanasia laws. If you live in that state, you are stuck with that insurance. Not even considering the religious liberty argument, why should you pay the cost for services you don’t want or would ever use?
Now lets say you had the ability to buy insurance from another state which may have less regulations, you could choose which coverage you want or don’t want and with the competitive atmosphere (breaking the state run monopolies) you are no longer forced to purchase policies that cover things you won’t ever use thereby reducing the price.
Regarding pre-existing conditions, I am in favor of maintaining this. It’s really the only good thing to come from this law. If you or a family member has had cancer or any other disease, you will understand how hard and expensive it is to get insurance once you have lost it.
Liz I’m with Brent on this one. If Hillary has a shot she will save America from Obamacare by reintroducing HillaryCare 2.0, which will be cradle to grave Medicare. Guess who pays for it? That’s their ultimate goal. Single payer is a cover all.