White House weighing plan to extend ObamaCare’s “risk corridor,” i.e. bailout, program beyond 2016?
POSTED AT 4:41 PM ON FEBRUARY 18, 2014 BY ALLAHPUNDIT
The program’s supposed to be transitional, sunsetting in 2016 after the new exchanges have had a few years to launch and then stabilize.
Emphasis on “supposed to be.”
Industry insiders told the Washington Examiner a plan to extend the Affordable Care Act’s “risk corridors” are under discussion, but that administration officials have not made a final decision…The Obama Administration is now weighing a plan to grant an additional three-year extension for non-complaint plans on the individual market. Such a move would prevent millions of people from losing their policies in the critical weeks and months before the 2014 election.But it would also allow people on the individual market to keep non-compliant plans beyond the risk corridor’s 2016 expiration date, leaving health insurance companies serving the exchange vulnerable to financial losses as the more healthy customers continue to stay out of the exchanges.Health insurance companies are looking for something in exchange for the three-year extension, which will make it much harder for them to sign up healthier and younger customers. Extending the risk corridor program is part of that conversation with the White House, industry sources said.
Remember back in November when Obama was eating truckloads of crap for breaking his “if you like your plan” promise? His solution was to let insurers “un-cancel” canceled plans — but lost in the hubbub at the time was the fact that he said he’d allow it for just one year. The obvious problem with that timeline is that it means this issue will bubble up again this fall, just in time for the midterms. New solution, then: Quietly allow insurers to keep un-canceled plans in effect past the midterms, for another three years. That’s how Obama just “solved” his little electoral problem with the employer mandate, isn’t it? Three-year extensions across the board, to minimize the damage to Democrats from his pet boondoggle in November. The problem is, because the old un-canceled plans are typically cheaper than expensive new “comprehensive” ObamaCare exchange plans, the extension means insurers are suddenly looking at less revenue than they counted on all the way through 2017. That’s where the “risk corridors” come in. Assuming the Examiner’s report is true, the White House is going to make this worth the industry’s while by extending the timeline for the bailout program too. Any losses they suffer in 2017 would, presumably, be partly offset by Uncle Sam even though the “risk corridor” is supposed to have terminated by then. Your tax dollars will buy insurers’ complicity in yet another illegal extension.
Bob Laszewski kinda sorta saw this coming, by the way. Last month he published a post arguing that, for all its faults, ObamaCare won’t cause a death spiral in the insurance industry anytime soon. The reason: The “risk corridor” program. Since Uncle Sam’s on the hook for any heavy losses in the industry, insurers are under no immediate pressure to raise premiums, the potential trigger of a death spiral. They can keep premiums artificially low — at least for a few years, until the “risk corridor” sunsets. Laszewski figured insurers would give the White House one more chance next year to get their act together on implementation and to start signing up the uninsured en masse; if they failed, he said, he expected companies to start parachuting out of the exchanges in 2016 before the “risk corridor” program expires. Which is to say, it’s very much in the White House’s interest to keep the program in effect, if it can, to keep insurers from abandoning the exchanges, especially if HHS has reason to think the risk pools they’re projecting will be less young and healthy than they had hoped. (And they do have such a reason at the moment.) The last thing Democrats need in a presidential election year is “Insurers give up on ObamaCare” headlines. Promise them some more sugar and you can avoid that. Maybe.
It seems naive at this point to ask whether the White House could extend the “risk corridor” unilaterally or whether that would be illegal. If they want to do it, they’ll do it regardless. O’s theory in issuing periodic delays or extensions for ObamaCare’s provisions is that, during the law’s transitional phase, he has some latitude legally to tweak implementation to make it go more smoothly. Extending the “risk corridors” past 2016, though, would mean the “transitional” phase had lasted past the end of his own presidency. It’s dubious, but it’s also in character. Here’s a question, though: Why would insurers leak this info now, when Marco Rubio’s trying to build support within the GOP for a bill to repeal the “risk corridor” program? He’s had little luck getting it on the leadership’s radar but his luck could change now that rumors are swirling that the bailout provisions might be extended into 2017 and beyond. The recent CBO numbers that found that the “risk corridor” could actually make money for taxpayers is a problem for the GOP, but (a) CBO’s numbers can be challenged and (b) CBO assumed that the “risk corridor” would be gone by 2016. Even if O decides to unilaterally extend the program, a new Republican Senate next year could join forces with some red-state Dems and Boehner’s House majority to repeal it, forcing Obama to either acquiesce in the repeal or to veto it and be seen as singlehandedly defending indefinite bailouts for insurers. Very strange that insurance industry sources, who stand to benefit, would be blabbing about this now.
Pelosi: No, there won’t be a mandate delay for
the little people because this is sound policy
POSTED AT 7:21 PM ON FEBRUARY 14, 2014 BY MARY KATHARINE HAM
A variation on the “you’re gonna love it once it’s fully enacted” chorus of fibs we’ve been hearing since this thing was passed in 2009. It isn’t really news, per se, that Rep. Nancy Pelosi is willing to support a pass for employers for this law that doesn’t go to individuals about to be hit with the mandate tax. It’s not news that she’s willing to ignore the many failings of the law and its implementation and refer to it as utterly “sound policy,” even as the worst Jenga tower every constructed is crumbling before her. But it is illustrative of the Democratic plan to put blinders on and say “but, but, we passed a law!” when faced with the unfairness of the system they’ve created and the waivers they’re granting. It’s also illustrative of how lazy an answer Democrats offer on this stuff. “It’s a totally different issue,” she says. Well, that settles that. Enjoy your sound policy. Unless their sound policy took your formerly sound policy away.
For more on the lazy answer front see this from Sen. Joe Manchin, who thinks we should delay the whole thing. Imagine that!
“You’re just picking and choosing,” the West Virginia Democrat said of the administration’s decision. “First it’s basically the large employers, then it’s medium groups, then it’s 50 to 100 — medium-sized. If there’s a problem, there’s a problem.” He said there’s bipartisan support for legislation postponing the implementation of the entirety of the Affordable Care Act until 2015. “We’re sure in a transition period and they keep changing the dates,” the senator said, frustrated. “So I wish everyone would come to grips.”
Sen. Barbara Mikulski, via Betsy Woodruff, who does push the senator and gets more silliness:
“I think it’s more important than we get it done right than fast,” she told NRO. “So I support the president’s decision. Typically these businesses that have to negotiate and — so I support the president’s decision.”When I asked her if she thought it was valid to argue that delaying the employer mandate but not the individual one favors companies over individuals, she said, “I think I support the president’s initiative.”
And, Sen. Jon Tester:
“You know, it’s probably the right thing to do,” he told NRO. “I mean, he probably looked at some metrics that caused him to make that decision. The rollout was rocky, everybody knows that.”
These are the people writing the “sound policy” that would shape a sixth of the American economy. What could go wrong (that hasn’t already) ?
Obamacare enrollment push for the young enters 11th hour
(Reuters) - One of the latest Obamacare pitches to get young adults to sign up for health insurance starts out with a mother's kitchen note reminding her grown son to enroll.
"Mom, you know I can't afford it," the young black man protests, as he sits down at a kitchen table next to a bespectacled woman with a laptop computer linked to the U.S. federal enrollment website, HealthCare.gov.
"But for the first time you can," she replies reassuringly. "You go to the HealthCare.gov website, compare quality plans and you could get help paying for it."
The government-sponsored television ad, which is airing on five national cable-TV channels, including ABC Family and TVLand, is part of an uphill battle to increase youth participation in President Barack Obama's signature domestic policy achievement. Youth participation in the program is a key factor in whether the program succeeds or fails in its first year.
U.S. government data released this week show the demographic of adults aged 18-34 rose only slightly by the end of January to 25 percent of total enrollment in private Obamacare plans.
That is well below the 38 percent that administration officials have talked about achieving to give insurers a strong mix of healthier members, whose premium payments help offset the cost of older, sicker policyholders.
Several top insurers have expressed unease about the mix of enrollment so far, and Republican opponents of the law see weak youth participation as the start of a downward spiral that will put the government on the hook for more spending to keep it alive.
The Obamacare marketing push has already been delayed repeatedly by the botched rollout of HealthCare.gov in October, requiring the administration to focus its efforts on fixing the website. Given those delays, experts say the Obamacare marketplaces could have trouble getting much above the 30 percent mark by the time enrollment ends on March 31.
Obamacare's advocates from the White House to federal and state agencies, health insurers, hospitals and grassroots nonprofit groups are launching the final push on Saturday, with what they call National Youth Enrollment Day.
"We're entering the sprint to the end," said Aaron Smith, executive director of Young Invincibles, a nonprofit group that is spearheading youth outreach.
The Centers for Medicare and Medicaid Services, the federal government's lead Obamacare agency, allocated $52 million for paid media in the first three months of 2014.
The campaign has already had help from singers Lady Gaga and John Legend and actress Olivia Wilde. Focus is now on sports celebrities including former professional basketball star Magic Johnson, who appears in a promotion alongside this week's Olympic Games. CMS will also run ads during the hugely popular college basketball playoffs known as March Madness.
Administration officials say young adults are only one audience for the effort. But the campaign is targeting 25 U.S. metropolitan areas that are home to 5 million uninsured young adults, according to a Reuters analysis of U.S. Census data.
"There's a variety of tactics," said Marlon Marshall, deputy director of the White House Office of Public Engagement. "All of those things add up to one big echo chamber. And that echo chamber is going to grow."
Health insurers are expected to fork out millions more to advertise their plans. Nonprofit groups Enroll America and the nonpartisan Ad Council have a $30 million TV campaign with singing pets.
The campaign competes with counter-messaging from Republicans and other Obamacare critics including Generation Opportunity. The young conservatives group sought to discourage enrollment last year with viral online videos picturing young men and women cornered in intimate medical settings by a creepy Uncle Sam puppet. The group says it is planning "a barrage of efforts," which it declined to detail.
CONCERN OVER PRICE HIKE
Obama's Patient Protection and Affordable Care Act barred longstanding insurance market practices that imposed sharply higher prices on people who were sick or older. That puts the onus on the program to spread insurers' risks between policyholders who need lots of medical attention and younger consumers who tend to be healthy and cheaper to insure.
The concern is that the fewer young adults sign up, the higher insurance costs may have to rise for 2015.
A Massachusetts health insurance marketplace, launched in 2007 under former Republican Governor Mitt Romney and widely seen as the prototype for the Obamacare exchanges, took nine months to breach the 30 percent mark, according to an analysis by Jonathan Gruber, an MIT professor and an architect of Obamacare and Massachusetts' earlier reforms.
Gruber and other experts say reaching about 30 percent participation is a more reasonable goal for Obamacare in 2015 than 2014 given its challenges, including bitter partisan opposition, scant funding, and a public that is largely misinformed about the law and the botched HealthCare.gov launch.
"It's going to take two or three years minimum to do what Massachusetts did," said Brian Haile, senior vice president for health policy at Jackson Hewitt Tax Service Inc., a tax preparation service that is promoting Obamacare enrollment.
Analysts at the nonpartisan Kaiser Family Foundation maintain that even if youth enrollment remains unchanged at 25 percent, it would add only 2.4 percent to 2015 premiums because the law compensates insurers for unexpected losses.
Obamacare's allies cite some distinct advantages. For one thing, their youth enrollment push is getting under way just as the Internal Revenue Service distributes hundreds of billions of dollars in tax refunds that could provide the cash for initial premium payments, experts say.
The relatively low income rates for young adults are also expected to make them some of the biggest recipients of government tax credits and other subsidies to buy coverage. Census data show 27 percent of America's 18.4 million adults aged 19 to 34 have no insurance, while mean earnings range as low as $15,800, versus $46,000 for the overall population.
"By far, the biggest sweet spot is younger people. They are absolutely eligible for the largest subsidies. Many of them though are individuals who haven't had insurance before," said Peter Lee, director of California's healthcare exchange.
Standing outside Madison Square Garden in New York on a bitter February night, Steven Abramson had little luck attracting young people with flyers that read "NEED Health Insurance?" to fans headed to watch the New York Knicks take on the Portland Trail Blazers.
The few women who did stop to take the pamphlets couldn't speak English.
"The generation of older people understand the need for health insurance, but with younger people, we have to convince them to sign up, even though it is the law," said Abramson, a volunteer with the Obama group Organizing for Action.