The Real Reason Why Obamacare Premiums Have Gone Up So Much

[red dog 1]

From March 23, 2017 (Yesterday)
"How Republicans Quietly Sabotaged Obamacare Long Before Trump"
http://www.democraticunderground.com/1016181713

BILLIONS THAT SHOULD GO TO OBAMACARE ARE MISSING: THANKS TO REPUBLICAN SENATORS LIKE MARCO RUBIO


Let's step back to 2015 for the entire story, which is bizarre and fascinating.

When the ACA was rolled out, telling insurance companies that they had to insure anybody who signed up regardless of previous conditions or sickness, everybody realized that the insurance companies would probably lose money in the first decade or so, until previously uninsured but sick people got into the system, got better, and things evened out.

To get the insurance companies to go along with this risk of losing money, the ACA promised to make them whole for any loses in the first decade..At the end of each fiscal year, the insurance companies merely had to document their loses and the government would reimburse them out of ACA funds provided for by the law.

The possibility of their losing money was referred to as the "risk corridor," and the ACA explicitly filled those risk corridors with a guarantee of making the insurance companies, at the very least, whole.

Then something happened. .As the New York Times noted on Dec. 9, 2015,
"A little-noticed health care provision slipped into a giant spending law last year has tangled up the Obama administration, sent tremors through health insurance markets and rattled confidence in the durability of President Obama's signature health law."

Marco Rubio and a number of other Republicans had succeeded in gutting the risk corridors.
The result was in that just in 2015, end-of-fiscal-year corridor payments to insurance companies that were supposed to total around $2.9 billion were only reimbursed, according to Rubio himself in the Times, to the tune of around $400 million.
Rubio bragged that he'd "saved taxpayers $2.5 billion."

And indeed he had. But the insurance companies were thrown into a crisis. And with Republicans in Congress absolutely refusing to refund the risk corridors, that crisis would get worse as time went on, at least over a few years.

So the insurance companies did the only thing they could..In (mostly red) states with lower incomes and thus poorer health, they simply pulled out of the marketplace altogether.
This has left some states with only a single insurer left.
In other states, they jacked up their prices to make up their loses.

As Robert Pear in the New York Times noted, Rubio's "plan limiting how much the government can spend to protect insurance companies against financial losses has shown the effectiveness of quiet legislative sabotage."

More:
http://www.alternet.org/right-wing/thom-hartmann-how-republicans-quietly-sabotaged-obamacare-long-trump-came-office

[gordianot]

1. Yes Republicans sabotaged the ACA so they could complain about it.

[Luciferous]

2. Very interesting, thanks for sharing!

[red dog 1]

4. You're welcome.

[grantcart]

3. the collary to this is that since the Medical Loss Ratio fixes the maximum percent that

can go to insurance companies the only incentive to increase premiums is because increase care has gone up.

In other words they don't get to keep anything over the MLR (they have to return it to policy holders) so they are spending more than anticipated to get people healthy.

That means that more people were worse off than expected. The sooner they get treated the better it is for them, the country (less expenses, higher taxable income) and especially medicare. If people go into medicare healthier it will stop the disastrous first couple of years where doctors are treating all kinds of pent up demand.

[Gabi Hayes]

36. your third paragraph is the ONLY mention of this, even tangentially,

I've seen on TV, which is all that matters, right?

nothing at all about this today

wtf IS it with the dem surrogates, who are apparently unaware of this lodestone when confronted with the aholes who unendingly scream about the death spiral of medicare

this is the PERFECT rejoinder: your pals in the senate CAUSED this to happen! I just don't understand the fecklessness

exactly like the way they were completely inept in easily countering the BS about the socalled classified 30 K emails, when, in fact, it boiled down to three mismarked ones, which, boiled down, in the end to ZERO

JFC

[Tatiana]

5. Well, Rubio's poison may end up leading to a long-term cure.

The real issue is the cost of health care. We spend too much. We spend too much on tests, on specialists, on prescriptions... we spend much more than other European nations with national health care systems.

We need to bring down the actual cost of health care, not continue to subsidize the profits of insurance companies. Single-payer or Medicare would do this, as well as a public option (because it would force insurance companies to compete).

I think most of the public is aware that we pay a ridiculous amount of money for health care. Now we just have to find the best way to provide quality health care to everyone, while driving down the current costs. This is a victory -- most people now believe we have to FIX Obamacare, not END it ("mend it, not end it&quot .

[Gabi Hayes]

6. I remember when this came out, and was briefly discussed.

then dropped from the public dialogue.

you're right: it's the KEY to the problem with both the inability for those who need insurance to get it AND the drastic increase in premiums in places like AZ.

too bad the dems haven't hammered this home...or is it just that they weren't given the opportunity to do so, much the same as almost all voices against the phony Iraq war war were stifled in the runup, under the guise of patriotism?

thanks for bringing this back up!

[red dog 1]

9. I agree with you about the fact that Democratic leaders "haven't hammered this home"

(It's not too late for them to do so)

[MichMan]

7. Fines were not high enough either

One major premise of the ACA was that everyone would buy in thus spreading the risk. This would ensure everyone had coverage and avoid people going to the ER for routine care. This was intended to ensure that a lot of healthy young people would be buying insurance that had not had it previously.

Instead a certain number of people have decided to pay the fine and go without since it is cheaper than buying insurance. Since the only enforcement method is losing your tax refund, it isn't that hard to make sure you aren't going to have much of one by altering your withholding. Of course, now if they need care, they still go to the ER same as before.

That has created the problem that without an influx of young healthy people enrolled in the exchanges, they have had to raise the premiums higher and higher for those that did enroll.

[dhill926]

8. K & R...

thanks for this...

[red dog 1]

11. You're welcome

(Thanks to Thom Hartmann for writing the Alternet article).

[Ccarmona]

10. I posted This on March 14.

[link:http://www.democraticunderground.com/?com=view_post&forum=1002&pid=8791614|

[red dog 1]

12. Excellent!

[Sunlei]

13. yup, Republicans deliberately try to ruin the ACA. That should be fixed ASAP & shouted to Congress.

[busterbrown]

14. Oh Christ!

So Important...To understand what those shits did

But Red Dog...Why the hell was this a story which very few heard of.?.

Jesus once again......and Red Dog... why wouldn’t Obama and other heads of the Dem Party..Publicly
blast Republicans for passing this shit piece of legislation? Why did I have to learn about this today. from a
DU POST...?


AND I THANK YOU FOR YOUR POST....So Much

[Crash2Parties]

15. About that brag of Rubio's...

"Rubio bragged that he'd "saved taxpayers $2.5 billion. And indeed he had"

If that money was to keep the corporations profitable, and when it was taken away they raised their costs to cover the loss, then taxpayers who had insurance saved nothing. Maybe less than nothing.

[BadgerMom]

16. Kick

[KittyWampus]

17. Will study this later.

[littlemissmartypants]

18. Thanks for this post red dog 1.

This needs broadcasting.

♡lmsp

[LAS14]

19. Why am I only hearing about this now?

Why isn't it mentioned every time anyone talks about insurance companies leaving exchanges?

[BREMPRO]

20. Me too, first I've heard this!

Why weren't the the Dems yelling foul and screaming from the rooftops about this deliberate sabotage when it happened?? Where was the reporting/ media?? Where was Clinton and Obama and Sanders? Why didn't Dems explain why this was done?? I'm stunned to hear this just now.. I know the deliberately tried to sink the ACA by letting states opt out of Medicaid expansion, but this is new and disturbing that it wasn't discussed more.

[YOHABLO]

21. You mean 'Medicaid' expansion.

[BREMPRO]

22. Yes, spell check failed me!

[LAS14]

30. Kick

[progree]

23. I'm surprised this is news to anyone -- but maybe because I'm in Minnesota and we have a crisis

of insurance companies leaving many markets and premiums soaring. My premiums went from $373/mo in 2014 to $853/mo in 2017 (for a single person, and I don't get any subsidy because the subsidy AGI income threshold is $48,000 or so income -- less than the median household income).

Minnesota actually had to kick in some money for people who get relatively low or no subsidy. A lot of states don't have the money or political will for that.

And the risk corridors thing was mentioned in articles that I have read that were of any length when discussing the problem of insurers leaving the market and soaring premiums.

Maybe this is a very controversial and non-progressive thing to say, but I've long thought the ACA is eroding, and yes, will implode eventually without some help from Congress. It wouldn't take much help to keep it going, but some help is needed, and I don't see that help coming. (Yes, I know the CBO says it's not imploding, but I doubt very much that they think it can go along indefinitely on auto-pilot either, let alone where the administration does its utmost to sabotage it).

House Pulls GOP Health Insurance Bill, but Some Changes Already Are Underway, [font color = blue]Consumer Reports[/font], 3/24/17

“The Trump administration has a great deal of flexibility to make changes that don’t require congressional approval,” says Elizabeth Carpenter, a senior vice president at Avalere Health, a healthcare consulting company.

The changes could result in sharply higher premiums and less coverage for many. For example, Health and Human Services Secretary Tom Price has said he wants to water down regulations requiring insurers to offer comprehensive coverage in 10 areas, including maternity care, prescription drugs and mental health services.

Without the help of Congress, President Trump is limited in how much he can change the ACA. But here’s a rundown of what his administration already is doing to reshape parts of the current law.

I'm about at the four paragraph limit, so I will just bulletpoint the remaining items. The rest of the article gets into things like the below (the first three have already been done):

* watering down the individual mandate (which he did by forcing the IRS to process returns where the filer didn't check off the box certifying the filer had insurance).

* halting TV ads encouraging enrollment 5 days before open enrollment ended

* making it harder for people who have a change in circumstance from enrolling outside the open enrollment period

* on the 10 essential benefits - HHS Secretary Price can't simply get rid of them without legislation, but he can issue new regulations that more narrowly define what coverage means. That could lead to junk insurance being marketed.

* Insurance companies leaving many ACA marketplaces

[Kimchijeon]

24. Thanks. This is really important to know, they have been sabotaging and keep doing it

[MadLinguist]

25. The NY Times article (also cited by Ccarmona) is worth sharing widely

The link to the story in the Times (December 9, 2015) is useful for sharing how long the GOPers have been rat-fuqqing healthcare
https://www.nytimes.com/2015/12/10/us/politics/marco-rubio-obamacare-affordable-care-act.html?_r=0

Mr. Rubio’s talking point is bumper-sticker ready. The payments, he says, are “a taxpayer-funded bailout for insurance companies.” But without them, insurers say, many consumers will face higher premiums and may have to scramble for other coverage. Already, some insurers have shut down over the unexpected shortfall.

“Risk corridors have become a political football,” said Dawn H. Bonder, the president and chief executive of Health Republic of Oregon, an insurance co-op that announced in October it would close its doors after learning that it would receive only $995,000 of the $7.9 million it had expected from the government. “We were stable, had a growing membership and could have been successful if we had received those payments. We relied on the payments in pricing our plans, but the government reneged on its promise. I am disgusted.”

Blue Cross and Blue Shield executives have warned the administration and Congress that eliminating the federal payments could have a devastating impact on insurance markets.

Twelve of the 23 nonprofit insurance cooperatives created under the law have failed, disrupting coverage for more than 700,000 people, and co-op executives like Ms. Bonder have angrily cited the sharp reduction in federal payments as a factor in their demise.

But Mr. Rubio is pressing forward, demanding a provision in the final spending bill now under negotiation that continues the current risk corridor restrictions, or even eliminates the program altogether. That enormous spending bill is being worked out as Congress slides toward a deadline of Friday, when much of the federal government’s funding runs out.

(and only POS POTUS and his followers would call the NY Times fake news.)

[Hoyt]

26. Although I applaud today's lack of a vote, it is likely the end of ACA because GOPers won't fund it,

enforce mandates, etc. We'll be lucky if there are any ACA Exchange insurers in rural areas in 2018. If we do not retake at least the House, I don't think ACA will survive until 2020.

[Bayard]

27. If they can't kill the ACA up front

They will now kill it by stealth. Not fund it, or not fund portions of it. They will stick that in some other bill, and we won't hear about it till its too late.

tRump is all about revenge. He has been humiliated now. He will try to stomp ACA out of spite.

[pangaia]

28. I wish our Congressional dems would shout this from the rooftops.

[crazylikafox]

29. kick

[Exultant Democracy]

31. I seem to recall that health care cost were going up at an insane rate before ACA

It seems that for almost everyone the ACA throttled the creep of premiums while not stopping them. Like doubling is a lot better than quadrupling right?

[FailureToCommunicate]

32. Important! K&R

[Honeycombe8]

33. But the reason they have the risk in the first place is all the sick people...

the flocked to Obamacare, vs. the healthy people.

So whether that's refunded to the ins. cos. or not, the REASON the costs are there in the first place is far more really sick people had signed on, so the ins. cos. had much higher claims payouts than anticipated.

[mountain grammy]

34. Thank you. K&R

[stuffmatters]

35. Why wasn't/isn't this the kneejerk Dem response "Premiums are up because Repubs forced them up."

And also "Repubs forced insurance companies to leave because Repugs also voted to
stiff the insurance companies out of money our Gov owed them".

Why the hell isn't this common knowledge? The Dems in Congress are just self destructive in their inability to message.

The new DNC just has to hire a framer/messenger to school all of our Congressional Dems on how to represent us and our policies. This is just another glaring, avoidable example of Dem message fail and it just keeps costing us elections.

[Gabi Hayes]

37. couldn't agree MORE!!!!! so fricking FRUStrating, isn't it??????