Health Care MarketplaceNews & Research

5 Ways Trump Will Improve Obamacare

Election coverage for the 2017 presidential election promises to define the future of Obamacare and the health insurance industry. According to Donald Trump, he would dismantle the whole system and both the industry and its providers would no longer have to abide by the laws regulations. Without the Affordable Care Act, there would also be no individual mandate to require every American to have insurance coverage. After repealing the law, Trump intends to boost competition of insurers by allowing them to sell products across state lines, create more Health Savings Account options, and use block grants to fund state-run Medicaid programs. Trump healthcare and Hillary healthcare are at complete odds with each other.

  1. Trumpcare would immediately call for a repeal of the Affordable Care Act (ACA), removing the individual mandate and stopping the expansion of Medicaid program eligibility. Millions of people would become uninsured and there would be an economic penalty to pay until a solid replacement plan is put in force. Without regulations in place, quality and availability of insurance plans for those who could continue to afford them would also be impacted. Federal funding to states, communities, and providers would also be altered or withdrawn. Insurers would be caught in a situation of losing an estimated 12.3 million policyholders and have to offset predicted gains of 56 percent since 2010 along with anticipated losses of 25 percent for those who no longer have to carry insurance. They would do this through expected increased pricing, layoffs, consolidation, and even bankruptcy for less prepared companies. Those left would have to absorb the additional members and costs, increasing their financial burdens temporarily. Those still insured in the marketplace would see roughly an 8 percent increase in premiums.
  2. Donald Trump believes the market forces in the health care industry can absorb the changes through premium tax deductions and increased use of tax- free health savings accounts (HSA) limiting costs and need for private insurance coverage. Insurance companies would design new products and premiums. In addition, HSA funds would transfer to heirs without a tax penalty.
  3. In an effort to promote free enterprise, Trump would also allow the sale of health insurance across state lines and shift Medicaid from federal to state control. However, he would not require insurance companies to develop and sell products to every state or every population. It would naturally increase competition and decrease costs, possibly allowing smaller insurance providers to compete with larger ones. People would be able to comparison shop for prices on coverage, procedures, and exams. Because the insurance industry is also part of the banking and finance industry, there does seem to be a need for Federal regulations, but Trump has not addressed them. This goes against his general philosophy of government interference and reducing the countries dependence on public health programs. He would need to have congress repeal The McCarran-Ferguson Act passed by Congress in 1945 taking back the power for states to regulate insurance companies.
  4. Mr. Trump believes Medicare should be able to negotiate drug pricing and save $300 billion a year by allowing the purchase of drugs overseas. He wants to rework the Medicaid system somehow and still be able to provide coverage to those with pre-existing conditions, but on both those initiatives, he is unclear about the process or direction he would take.
  5. He believes the illegal immigrant population has put the US health care system under duress and, by restricting visas, he can reduce health care costs to state and local governments.

Donald Trump repeals the Affordable Care Act in order to base a health care system on a free market economy designed to balance out supply and demand, automatically decreasing costs to a reasonable level, insisting that the best social program is maintaining employment and reducing dependence on public assistance. Repealing Obamacare deregulates the health care industry once again, block grants for Medicaid give states a specific budget to control, Medicare can negotiate lower drug costs, and everyone has a choice to participate in coverage or not. Election coverage for Trump’s health care provisions are certain to be vastly different than Hillary Clinton’s healthcare plans.

Resources and Links:

Luhby, T., 2016. Trump’s Healthcare Plan: What He Promises and What it Really Says, http://money.cnn.com/2016/03/03/news/economy/trump-health-care/

Axelson, B., 2016. Donald Trump’s Healthcare Plan Revealed: 5 Fast Facts You Need to Know, http://www.syracuse.com/politics/index.ssf/2016/03/donald_trumps_health_care_plan.html

Appold, K., 2016. How Trump Would Change Healthcare. http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/how-trump-and-kasich-would-change-healthcare

2017 Obamacare Rates: Requested Rates Up 20%, But Final Rates Expected to Be Lower

Charles Gaba is a healthinsurance.org contributor and founder of ACAsignups.net site designed to track the Affordable Care Act enrollments since 2014. According to Gaba’s blog titled, Presenting the ACA Signups 2017 Requested Rate Hike Challenge!!, requested rates from each state average just over the 20 percent mark. Previous annual reports tracked the difference between the requested rate and the actual rate imposed.

Premium Rate Requests and Approval

2016 projections started at 12 to 13 percent nationally and were estimated to reduce to 9 percent. Once the requests were processed and adjusted, they ended up being 11.6 percent nationally, while the approved average ended up at 8 percent.

The data received by mid-June for 35 states as well as DC, currently represents 79 percent of the population with a 21.67 percent increase requested. Approval numbers are expected to be less, nationally, due to the numerous filings of each state. Requests have to be justified by regulators and the data history has shown that it often leads to rather large decreases from the original request to the actually approved numbers.

As the last few states are added to the data, national numbers are not expected to change very much and the estimate will still hover around the 22 percent range. The current estimate on approval of the requested changes is closer to 18 percent nationally, and effective rates based on full policy premium price should reduce to 14 percent by next spring. Data continues to be pulled and adjusted throughout the year.

These projections do not take into account the co-pays, deductibles, or provider network structure. It is based on 100 percent of enrollees auto-renewing their current plans, then weighted based on qualifying health plans and population in each individual state.

Example of Changes from Requested to approved Rates:

Anthem Blue Cross and Blue Shield health plans serve 55,000 people on Connecticut’s individual market. It is approved to rise by an average of 2.4 percent next year. The insurance company, ConnectiCare has 34,400 customers with an average rate increase of 8.5 percent. They both requested higher rate increases, but the Connecticut Insurance Department regulators felt they were unwarranted and forced revisions to initial proposals.

Another company, Golden Rule, covering 3,414 people, requested an 18.5 percent hike that was knocked down to only 1.1 percent.

Overall, whether products were purchased on or off the marketplace, the average was only a 3.5 percent increase on the individual market. The small group market did even better at a 2.9 percent reduction.

Final Rates Versus Subsidized Rates

Keep in mind that the approved final rates are dramatically different between the full price for those above 400% of the Federal Poverty Line (FPL) and subsidized rates.

Example of Tax Credits Impact:

Most Florida residents still get coverage from employer plans or government programs such as Medicare, but roughly 1. 7 million purchased from the Obamacare marketplace plans in 2016.

About 91 percent qualified for tax credits. The average monthly full-price premium was $386. After the credits were applied it was reduced to $84 with only a 2 percent increase from the prior year.

Benchmark Basis

Benchmark pricing for the marketplace plans refers to the base rate of the metal categories (bronze, silver, gold) used to determine the ACA’s Advance Premium Tax Credit (APTC). The variation of these rates is actually more important than the change in other premium rates because these determine the amount of the federal tax credit being given.

If the benchmark policy rate in your area changes, it will change your tax credit formula and amount of credit received even if your income level, household dependents, policy type, and premium are the same. The Kaiser Family Foundation website shows how this worked from 2015 to 2016. Inquire about changes to base plan rates and compare pricing before auto-renewing annually.

It is clear, estimates based on requests by each state are far from the approved numbers and in many cases, much less. The final stated premiums are based on the full price before the tax cuts or subsidies are applied, and new benchmark base plan pricing encourages shopping for the best price each year regardless.

Five Ways Hillary Clinton Will Improve Obamacare

As election coverage continues for the 2017 presidential race, we will certainly be hearing more regarding healthcare coverage. Hillary has made us all aware that she will continue to expand the current Obamacare coverage because she believes in the results. She believes the ACA law is directly responsible for 16 million additionally insured people, many of whom are young, have pre-existing conditions, and are women who were not receiving the coverage or care the deserved.

To achieve her goals, it requires more government influence to oversee processes in the health insurance industry and medical facilities in order to maintain compliance with the laws, greater stimulus for services to continue the growth of the Medicare Advantage and Medicaid programs, and a move toward centralization of services similar to a single-payer system.

  1. Clinton will continue to enforce the existing law requiring health insurers to disclose costs of medical services, claims payment processes, and quality data to consumers. She will block or modify health insurance rate increases if they are found to be unreasonable. Hillary talks about tax credits of up to $5,000 per family intended to offset some of the excessive out-of-pocket and premium costs if they go above 5% of their income. This is in addition to ensuring that families buying health care coverage on the exchange will not have to pay more than 8.5% of their household income for premiums.
  2. She extends these out-of-pocket costs and premium restrictions to include the family glitch created when employers’ coverage exceeds the cost of health care marketplace coverage. Further, she includes three sick visits a year without having to meet a deductible. She is very aware that deductibles have tripled in the last 10 years while copays have continued to rise and proposes to reduce these costs. Self-insured employers, including hospitals, will need to partner with national insurers to control the payroll contribution costs of insurance and work toward true cost reduction rather than simply shifting risk from employers over to consumers.
  3. Emergency services will not be subject to additional costs because they were not provided by a participating network provider. Fees to the hospital and physicians will be the same if it is a true emergency. High health care costs keep people out of the hospital when they really need help and that goes against the purpose of providing the coverage in the first place.
  4. Clinton wants to expand Obamacare and the incentives to states to expand Medicaid coverage. This includes adding a public option to choose between government offered and privately offered coverage, providing health care to all residents regardless of immigration status, and expanding the delivery system and technology for plans available through exchanges. Innovations in the delivery system can increase efficiency and maintain more accurate and accessible records. There will be rewards offered to insurers and providers contributing ideas for increased quality, consumer experience, and cost control.
  5. Hillary will improve the value of Medicare and Medicaid coverage by standardizing the evaluation and improvement process. This means insurers need to work with large regional providers and America’s Health Insurance Plans (AHIP) which is part of The Core Quality Measures Collaborative (CQMC), along with many national physician organizations to remove poor quality hospital and physician services from networks and produce information to positively affect each facility’s business practices, cost, and patient satisfaction.

These five areas listed encompass many parts of the existing healthcare system and ACA law. Hillary Clinton’s election coverage will also show concerns for defending women’s rights for access to full healthcare, greater initiatives in autism research, Veteran’s health care, children’s vaccines, and the need for more research into the use of medical marijuana. Many of her enterprises go beyond the United States to become global health concerns as well. Overall, she wants greater culpability and better availability of health care and services and lower costs without disrupting Obamacare’s momentum. There is a continual need for improvement and she is focused on the parts of the law that need revising and expanding but with the same goal in mind: universal affordable healthcare coverage for all US residents.

Resources and Links:

ACA enrollment figures boosted by Young Invincibles

With the third Open Enrollment Period (OEP) having come to an end, things have gone very smoothly. As of Jan. 23, 2016, a total of 11.6 million Americans had either signed up for Affordable Care Act (ACA)-compliant health insurance plans or renewed their coverage. This OEP also marked an enrollment experience relatively free of problems.

The 2016 OEP is also notable for having attracted large numbers of, younger, healthier consumers. These millennials (18-34 years old) are favored by the large insurance carriers that comprise about half of all Obamacare policies. With fewer older, sicker enrollees, plan premiums are typically reduced for all members. The increases in younger, healthier consumers should also enable the healthcare law to succeed in years to come.

An upswing ends 2016 enrollment

With the OEP’s closing, the only way to still obtain coverage is through a Special Enrollment Period (SEP), offered by the government. Or, you may be offered a personal SEP if specific life changes, known as Qualifying Life Events (QLEs) (e.g. marriage, childbirth, loss of coverage), occur. Those without ACA-compliant coverage may face tax penalties (the individual mandate); the 2016 amounts are substantially higher last year’s, although hardship exemptions may be available. If found liable, consumers will have to pay the greater of:

  • $695 per adult and $347.50 per child, for a maximum of $2,085 per family, compared to 2015’s $325 and $162.50
  • 2.5 percent of your income above the tax filing threshold, compared to 2015’s 2 percent

While these penalties are a major financial burden, they have persuaded Americans to purchase health coverage. By the OEP’s 12th week (Jan. 17-26, 2016), the Centers for Medicare and Medicaid Services (CMS), the agency overseeing the ACA, calculated an estimated 8.9 million sign-ups in the 38 states utilizing the government’s HealthCare.gov platform. And with state-run exchanges (and the District of Columbia) included, the current tally of plan sign-ups and renewals increases to 11.6 million.

Some states (and the District of Columbia) with their own exchanges are offering enrollment extensions. For instance, both Covered California and The Maryland Health Connection have extended their deadlines until Feb. 6. While extensions were provided in past years, due to technical issues and other issues, the OEP saw few problems. In fact, the Obama administration reported that there will be no official SEP in 2016.

Millennials smoothing out the risk pool

Of these sign-ups, the CMS found that 2.1 million 18-34-year-old consumers – also known as Young Invincibles (YIs) — had purchased coverage by Dec. 15, 2015. For this time in 2015, 1.1 million in this age range had purchased coverage. This offers evidence that the ACA’s continued efforts to draw enough YIs to balance out the risk pool is succeeding. Insurance carriers feel that this age group is generally healthier than older members, thereby increasing profits and decreasing medical costs for the coming year.

But these lower costs and happier carriers are expected to make Obamacare financially stronger in years to come. “Having people of good health participating in the marketplaces will contribute to the long-term financial stability of those marketplaces,” stated White House Press Secretary Josh Earnest. “That’s why that was a focus of our efforts, and the early indications are that those efforts were successful.”

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