Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.
Tuesday, March 11, 2014
Obamacare updates - March 11 , 2014 --- ObamaCare's Secret Mandate Exemption HHS quietly repeals the individual purchase rule for two more years ! Query , how is it that the White House argued at the Supreme Court that the individual mandate to buy insurance was indispensable to the law's success, and President Obama continues to say he'd veto the bipartisan bills that would delay or repeal it - in light of the above exemption in applying the individual mandate ?
ObamaCare's Secret Mandate Exemption
HHS quietly repeals the individual purchase rule for two more years.
ObamaCare's implementers continue to roam the battlefield and shoot their own wounded, and the latest casualty is the core of the Affordable Care Act—the individual mandate. To wit, last week the Administration quietly excused millions of people from the requirement to purchase health insurance or else pay a tax penalty.
This latest political reconstruction has received zero media notice, and the Health and Human Services Department didn't think the details were worth discussing in a conference call, press materials or fact sheet. Instead, the mandate suspension was buried in an unrelated rule that was meant to preserve some health plans that don't comply with ObamaCare benefit and redistribution mandates. Our sources only noticed the change this week.
That seven-page technical bulletin includes a paragraph and footnote that casually mention that a rule in a separate December 2013 bulletin would be extended for two more years, until 2016. Lo and behold, it turns out this second rule, which was supposed to last for only a year, allows Americans whose coverage was cancelled to opt out of the mandate altogether.
In 2013, HHS decided that ObamaCare's wave of policy terminations qualified as a "hardship" that entitled people to a special type of coverage designed for people under age 30 or a mandate exemption. HHS originally defined and reserved hardship exemptions for the truly down and out such as battered women, the evicted and bankrupts.
Agence France-Presse/Getty Images
But amid the post-rollout political backlash, last week the agency created a new category: Now all you need to do is fill out a form attesting that your plan was cancelled and that you "believe that the plan options available in the [ObamaCare] Marketplace in your area are more expensive than your cancelled health insurance policy" or "you consider other available policies unaffordable."
This lax standard—no formula or hard test beyond a person's belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that "you experienced another hardship in obtaining health insurance," which only requires "documentation if possible." And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one.
Keep in mind that the White House argued at the Supreme Court that the individual mandate to buy insurance was indispensable to the law's success, and President Obama continues to say he'd veto the bipartisan bills that would delay or repeal it. So why areObamaCare liberals silently gutting their own creation now?
The answers are the implementation fiasco and politics. HHS revealed Tuesday that only 940,000 people signed up for an ObamaCare plan in February, bringing the total to about 4.2 million, well below the original 5.7 million projection. The predicted "surge" of young beneficiaries isn't materializing even as the end-of-March deadline approaches, and enrollment decelerated in February.
Meanwhile, a McKinsey & Company survey reports that a mere 27% of people joining the exchanges were previously uninsured through February. The survey also found that about half of people who shopped for a plan but did not enroll said premiums were too expensive, even though 80% of this group qualify for subsidies. Some substantial share of the people ObamaCare is supposed to help say it is a bad financial value. You might even call it a hardship.
HHS is also trying to pre-empt the inevitable political blowback from the nasty 2015 tax surprise of fining the uninsured for being uninsured, which could help reopen ObamaCare if voters elect a Republican Senate this November. Keeping its mandate waiver secret for now is an attempt get past November and in the meantime sign up as many people as possible for government-subsidized health care. Our sources in the insurance industry are worried the regulatory loophole sets a mandate non-enforcement precedent, and they're probably right. The longer it is not enforced, the less likely any President will enforce it.
The larger point is that there have been so many unilateral executive waivers and delays that ObamaCare must be unrecognizable to its drafters, to the extent they ever knew what the law contained.
More items of note regarding Obamacare......
Yikes: ObamaCare signups slowed down in February
POSTED AT 6:01 PM ON MARCH 11, 2014 BY ERIKA JOHNSEN
That the 7 million people the Obama administration once hopefully projected would enroll in ObamaCare before the end of the open enrollment period on March 31st, haven’t, was to be expected; after all, they did rather tremendously screw up the rollout of their flagship website, but once they patched the federal exchange up a little (and that’s to say nothing of several individual states’ exchange calamities), signups started trickling in more smoothly. If the Obama administration was really hoping that a better-functioning website and their various PR efforts would help to spread national enthusiasm and set off a late enrollment “surge,” however… things aren’t looking too great so far. The administration just released a report on February’s ObamaCare signups, coming in at 942,000+ — a significant deceleration from January, and a lot less than their February prediction of 1.3 million. Philip Klein breaks it down:
Weeks before the health care law’s exchanges launched Oct. 1, an HHS memo projected that 5.7 million individuals would enroll in a plan through one of Obamacare’s exchanges by the end of February. In reality, HHS said Tuesday, just 4.2 million Americans had signed up in the first five months.
HHS still hasn’t disclosed how many Americans who have signed up for a plan through the website have consistently paid their premiums, which is how enrollment is typically measured. Thus, HHS figures could overstate enrollment by around 20 percent to 25 percent. …
In January, 1,146,071 individuals signed up for insurance on the exchanges, according to HHS. In February, that number declined to 942,800.
That ever-present caveat — that “selecting a plan” and “actually purchasing said plan” are not necessarily one and the same thing — means that enrollment could really be somewhere in the three-to-four million range. If the pace of March’s signups don’t pick up a lot, that could be bad news for the president’s crowning legislative achievement (or, perhaps I should say, bad news for the taxpayer dollars that will then be used to bail out the president’s crowning legislative achievement, for the increasingly expensive healthcare plans consumers will have to buy, and for the overall hot mess that the administration has managed to make of the entire insurance industry and economy at large).
The even worse news, as ever, is that the proper mix of young people evidently remain oh-so-stubbornly disinterested in following the administration’s desperate recommendations that they sign up for ObamaCare. The White House was originally hoping that 40 percent of those hoped-for 7 million enrollees would be those relatively low-risk, low-cost young people to help keep prices down, but so far, it’s not even close.
Figure 1 and Table 1 show that, consistent with expectations, the proportion of young adults (ages 18 to 34) who have selected a Marketplace plan through the SBMs and FFM has remained strong.Young adults continued to account for 27 percent of the Marketplace plan selections during the fifth month, which was consistent with their share of plan selections during the fourth month (27 percent) and 3 percentage points higher than their share of plan selections during the first three months (24 percent). Meanwhile, the proportion of older adults (ages 35 and over) selecting a Marketplace plan has continued to decrease (from 70 percent during the first three months to 67 percent during the fifth month).
The law’s supporters are banking on young people being procrastinators and waiting until the tail end of the enrollment period, and no doubt some of them will — but the January-to-February ratios didn’t budge, and those ratios only barely budged from December. Hence…this.
Problems with state exchanges .....
Video: Feds probing Maryland ObamaCare exchange
POSTED AT 1:21 PM ON MARCH 11, 2014 BY ED MORRISSEY
We’ve been following the breakdowns of ObamaCare closely for some time, not just at the federal level, but also in state exchanges such as in Hawaii, Oregon, and Minnesota. The Maryland exchange will get more than just a few critical looks, though. The $200 million in federal funds spent on the exchange in Maryland will be the subject of a federal probe by the Inspector General’s office at HHS, as Baltimore’s WJZ reported yesterday afternoon.
At least someone is looking into the disaster. Rep. Andy Harris, who is the only Republican from Maryland in Congress, demanded a federal probe when it became clear that Maryland wasn’t going to look into the issue:
First a troubled rollout, now a federal investigation into Maryland’s healthcare exchange. …
“How $200 million could have been frittered away in that exchange,” said Congressman Andy Harris.
Maryland Congressman Andy Harris says his request for an investigation has been taken up by the Inspector General’s office.
“I’m not hearing about any state investigation, which is one of the reasons I thought the federal government should get involved,” Harris said.
The Maryland Health Benefit Exchange is among the worst performing in the country, having enrolled just 39,000 people in private plans as of last week. And that’s despite the enthusiastic embrace of the law by state officials. State legislators are already reviewing the array of problems, which have political as well as fiscal implications. …
The inspector general’s office will be investigating five areas flagged by Harris and Rep. Jack Kingston (R-Ga.), who chairs the House Appropriations subcommittee that oversees HHS. In particular, the IG will be looking at the contracting process, which awarded a $193 million contract to Noridian Healthcare Solutions to build the exchange. State officials fired the company last month.
Harris’s office also said the IG would be looking into problems with Medicaid enrollment, specifically the computer systems that determine who is eligible for the public health insurance program. The state has already received a waiver from federal health officials to wait six months before conducting so-called re-determinations, a process in which some enrollees typically fall off the Medicaid rolls. State officials estimated that the cost of the delay would total about $30 million in 2014 and 2015.
Although most life changes can now be reported online at Healthcare.gov or over the phone with a customer service representative, the final paragraph alerts consumers that any changes in contact information must be reported twice [emphasis in original]: “To change your home address, email address, or phone number, update the information on your Marketplace Profile page. Be sure to report address, email, and phone changes to your insurance company too. Otherwise they may not know about your new contact information.” …
Since Healthcare.gov must report changes in coverage or tax credits to insurance companies in order for coverage and billing to be accurate, it is unclear why the Marketplace is unable to communicate simple address, phone, and email changes. The site does not indicate when this capability will be added, so it’s up to consumers to do it themselves or face the risk that their insurance company won’t know how to reach them.
Hawaii ponders: It might be time to start taxing insurers for not participating in our ObamaCare exchange
POSTED AT 2:41 PM ON MARCH 11, 2014 BY ERIKA JOHNSEN
Five months and approaching a coupla’ hundred million dollars in federal grants later, Hawaii still hasn’t made much progress on mending their terrifically botched ObamaCare exchange website, and the clock is ticking. With barely a few weeks to go until the open enrollment period ends (for now — I have very little faith that His Highness won’t issue another royal decree somehow extending that deadline, too), the state government is entering panic mode over their super-low enrollment figures and their definitive lack of a long-term financing plan for the exchange, which needs to be self-sustaining by the start of 2015. As of mid-February, only about 4,400 people were signed up for health insurance through ObamaCare — a rather conspicuous dip from the hundred thousand people Gov. Neil Abercrombie once predicted would hop to it:
The exchange had originally planned to stay afloat by collecting a 2% fee on every plan sold through the exchange, but with the slow pace of enrollment and changing federal rules — delaying the employer mandate and allowing canceled plans to continue — Interim Director Tom Matsuda said Wednesday that the math simply does not add up. …
Of the 100,000 uninsured in Hawaii, about half are expected to be eligible for Medicaid — meaning just 50,000 people would buy individual plans through the Health Connector under the best-case scenario. And while Hawaii hoped to sell thousands of plans through the exchange’s small-business marketplace, Matsuda said so few small businesses are eligible for tax credits that officials are simply not seeing the demand. “What people can get on the Connector versus outside the Connector is the same, so there isn’t really a strong incentive for small employers to use the Connector,” he said.
Further complicating matters, only two insurers offer plans on Hawaii’s exchange, so many companies are continuing to rely on their longtime brokers (who, having essentially been cut out of the process, have no incentive to help Hawaiians buy plans on the exchange).
The fee would help prop up the financially troubled Hawaii Health Connector, which could run out of money to pay its bills by year’s end.
“This is not something we want to do,” said Rep. Angus McKelvey, chairman of the House Consumer Protection and Commerce Committee. “It’s federally mandated that we have to have our exchanges be sustainable.”
The unspecified fee would be charged by the state insurance commissioner until mid-2018, based on the number of people the carrier insures. …
The new insurance fee is part of a flurry of House proposals that were rolled into one overarching bill (HB 2529) now being considered by the Senate. …
A “fee,” i.e., slapping a tax on any insurer (and, subsequently, its customers) that decided it was not in their company’s interest to participate in ObamaCare just yet. As the LA Timespiece above notes, there are only two insurers currently participating in Hawaii’s exchange — meaning that, if the proposal passes, everybody else is going to have to pay to subsidize ObamaCare’s poor technical, logistical, and financial functionality in the state. And here I was, thinking that ObamaCare was supposed to improve the market and lower everybody’s costs, or something?
GAO to audit Oregon’s failed ObamaCare exchange site
POSTED AT 10:01 PM ON MARCH 11, 2014 BY MARY KATHARINE HAM
Congress’s investigative arm said Wednesday it will audit Oregon’s broken healthcare exchange site, which has yet to enroll even one person despite spending $304 million in federal funds.
The U.S. Government Accountability Office said in a letter to Sen. Jeff Merkley (D-Ore.) it would look into how the funds were spent, and whether that money could be recovered from third-party contractors, among other things.
The GAO letter was in response to a request sent last month by Merkley and Sen. Ron Wyden (D-Ore.), both of whom are ObamaCare supporters. The senators noted their frustration with their home-state’s exchange in their request for a GAO investigation.
Four Republicans on the House Energy and Commerce Committee, led by Rep. Greg Walden (R-Ore.), sent a similar request to the agency last month.
“It is great news that the GAO has responded to our request to carefully examine what has gone wrong with the Cover Oregon website,” Merkley told The Hill in a statement. “I look forward to reading their recommendations about how to fix the system and avoid this happening in the future.”
The state has been relying on paper applications and gotten a fair number of them, but uh oh:
The Cover Oregon health insurance exchange is one of the worst in the country at attracting younger enrollees, according to a new federal report.
Only 18 percent of those who’ve enrolled through the Oregon exchange fall between the ages of 18-34, a healthier age bracket considered crucial to keeping future premiums down. The age-related data for Oregon is available for the first time.
The Oregon number, which ties with West Virginia as the nation’s worst, falls well below the national average of 25 percent. Exchange officials and insurers had expected a higher portion of enrollees would be young, and premiums were set accordingly.
Cover Oregon had gone out of its way to attract the young, spending millions on television and radio ads that featured Oregon musicians such as Laura Gibson and the hip hop band Lifesavas. A Washington Post reporter observed that the ads “seriously could have been pulled straight out of Portlandia.”
As of March 1 about 4.2 million Americans had signed up for medical insurance coverage through the Affordable Care Act, according to numbers released Tuesday by the Obama administration. But it remains unclear how many of those enrollees have put their money where their mouse is.
Combined figures published by Obamacare marketplaces in California, Connecticut, Maryland, Nevada, Rhode Island, Vermont and Washington indicate that just 79 per cent of signups in those states have come with checks attached.
If those numbers were to hold up nationally, it would mean that about 1.1 million Obamacare enrollees have selected insurance plans without paying for them – bringing the actual total of Obamacare-insured Americans down to 3.3 million.
Health and Human Services Secretary Kathleen Sebelius continues to plug the Obamacare insurance coverage system despite enrollment numbers that have been less than expected
Desperate or smart? On Tuesday the White House defended its decision to send President Barack Obama out to do an interview with 'Funny or Die' mini-show host Zach Galifinakis, saying the satire website immediately became the number-one online referrer to healthcare.gov
The Newark Star-Ledger reported in late February that 'at least three-quarters' of plans sold by three insurers in New Jersey have been paid for.
February brought 943,000 new people into the Obamacare fold, bringing the Centers for Medicare and Medicaid services 60 per cent of the way to the Department of Health and Human Services' original goal of enrolling 7 million Americans by the end of March.
HHS Secretary Kathleen Sebelius told reporters on a conference call Tuesday that the administration expects a March surge to close the gap.
Last month she backed off from the prediction of 7 million new insurance customers, saying the new target was 6 million. The 4.2 million total is 70 per cent of that lower benchmark number.
The reconfiguration of the administration's goal came after a chronically ill beginning for Obamacare, marked by national confusion, website outages and an implementation cost that has exceeded two-thirds of 1 trillion dollars.
About one-quarter of the enrollees since the program's October 1 launch have been adults in the 18-35 age range. Those desirable, mostly healthy people were originally expected to be one-third of the total, paying into the system to offset the staggering costs of treating older, sicker Americans.
As the March 31 deadline ending the open-enrollment season approaches, the White House has yet to release any statistics showing how many people have paid the first month's premium for their new insurance policies.
Andale! Obama promoted his signature health insurance law in a town-hall event for Hispanic-Americans at the Newseum in Washington, D.C> on March 6
Controversy: Restaurants like Gator's Dockside in Clermont, Florida have begun adding 1-percent Affordable Care Act surcharges to customers' checks in order to pay for the increasing cost of coverage under the new law
A Centers for Medicare and Medicaid Services spokesman told MailOnline last month that the agency hasn't 'prioritized' reporting its payment statistics, but plans to do so 'once our automated payment systems are completed and fully tested.'
CMS manages health insurance exchanges for 14 states and the District of Columbia.
All together, the seven states where both enrollment and payment numbers have been published have signed up 1.05 million people, but reported that just 835,000 have paid premiums.
More troubling for the Obama administration is a survey published last week by the consultancy McKinsey & Co., which found that only 27 per cent of new enrollees – or 1.14 million of the total announced Tuesday – were uninsured before they signed up.
Millions of insured Americans received cancellation letters from their insurers in October, November and December, spurred by the companies' recognition that their existing offerings didn't satisfy the Affordable Care Act's stringent minimum standards.
Mixed messages: A smaller percentage of Americans are uninsured than 6 months or a year ago, but the number has gone up overall during the Obama presidency
Those requirements include a host of coverage options – maternity coverage required for male customers, for instance – that critics say policyholders shouldn't have to pay for.
McKinsey also found that just 1 in 10 Americans who are eligible for Obamacare policies have chosen to enroll.
Adding insult to injury, a Gallup poll released Monday shows that while the percentage of uninsured Americans has dropped from 17.1 per cent at the end of 2013 to just 15.9 per cent now, that number stood at just 14.4 per cent before Obama took office.
It's also not clear what will happen to taxpayers whose have not made payments by March 31.
The Obama administration has asked some insurers to extend payment deadlines and provide enrollees with a grace period, but executives at two insurance companies have told MailOnline that they don't intend to do so.