#FullRepeal Daily Digest

Item of the Day

Health Care Policy and Marketplace Review: The Next Chapter of Obamacare

• The 2015 rate increases have been largely modest. Does that prove Obamacare is sustainable? No. You might recall that on this blog months ago my 2015 rate increase prediction was for increases of 9.9%.
  • You might also recall my reason for predicting such a modest increase. With almost no valid claims data yet and the "3Rs" Obamacare reinsurance program [aka the insurer bailout] insurers have little if any useful information yet on which to base 2015 rates and the reinsurance program virtually protects the carrier from losing any money through 2016. I've actually had reports of actuarial consultants going around to the plans that failed to gain substantial market share suggesting they lower their rates in order to grab market share because they have nothing to lose with the now unlimited (the administration took the lid on payments off this summer) Obamacare reinsurance program covering their losses.  
  • We won't know what the real Obamacare rates will be until we see the 2017 rates––when there will be plenty of valid claim data and the Obamacare reinsurance program, now propping the rates up, will have ended.
• To say this fall's 2015 Obamacare open-enrollment has the potential to be problematic is an understatement.
  • The HealthCare.gov backroom is not built yet––a year and counting after it should have been. How many people are enrolled in Obamacare? Without a government to insurance company accounting system yet built, no one knows.
• While the administration tells Obamacare policyholders their automatic renewal will go smoothly, the fact is every one of these subsidy-eligible people needs to go to the exchange website and re-enroll.
  • The biggest reason is that in most cases the baseline second lowest cost Silver plan, upon which their personal subsidy is based, has changed and with it the subsidy they are eligible for. The only way a participant will know the impact of price changes in their community's baseline plan on their own net of subsidy premium is to re-enroll. If they do not, they could be surprised by a big jump in their 2015 out-of-pocket premium come January, or a big tax bill a year later. And, if their income data is not up-to-date, they could be getting a much smaller or bigger subsidy than they are entitled to.
• Five to ten million people all trying to get through exchange websites between November 15 and December 15?
  • Add however many people are going to sign-up for the first time this November to all of those existing participants re-enrolling for January 1, who will all be hitting the still fragile Healthcare.gov and state exchanges during that four week period, and it is not hard to see how Obamacare could be back in the news.
  • While the open-enrollment is now scheduled to begin until 11 days after the November election there will be plenty of renewal and cancellation letters going out in October––not the least will be more pre-Obamacare policies being cancelled this year now that their one-year extension is up––carriers aren't necessarily allowing policies to be extended further.
  • Just wait until we approach the next open-enrollment with millions of people hearing about all of this complexity and having just four weeks to get their enrollment validated for January 1. The Obamacare anxiety index is going to be off the charts well before November 15th.
  • Add to all of this bigger deductibles for 2015 (those go up with cost trend as well as the rates) and more narrow networks as well as generally larger rate increases for the plans that got the most enrollment and there will be lots to talk about.

Associated Press: Study: Rise in ER Visits After Medicaid Expansion

• Looking at the broad sample of 25 states, the study found that the average number of ER visits in states that expanded Medicaid increased by 5.6 percent, when the second three months of this year were compared with the same period in 2013. That increase was more than three times bigger than experienced by hospitals in states that did not expand. It was also outside the range of normal year-to-year fluctuations...
• It also found indications that newly insured Medicaid patients admitted to hospitals may be sicker than patients previously covered under the same program, which serves more than 60 million low-income and disabled people.

Wall Street Journal: Americans Still Not Sold on Obamacare – WSJ/NBC Poll

• Among all registered voters captured in the September poll, 34% are in favor of the 2010 Affordable Care Act, and 48% are against it.
• Sentiment is about the same as it was among registered voters ahead of 2012 and 2010 elections [but slightly worse than both previous elections]. In 2012, 40% of registered voters in the NBC/Journal poll thought the law was a good idea and 44% thought it was bad. In 2010, 36% of registered voters thought it was good and 46% thought it was bad.
• Most respondents who have an opinion say they feel strongly about it, and there are also clear party divisions in position: 82% of Republicans feel the law is bad, and 63% of Democrats say it’s good. Independents are more divided, with 26% saying it’s good, 51% saying it’s bad, and the rest saying they don’t know.