Unexpected delays, changes, "fixes," postponements and exemptions have become staples of Obamacare, so additional tumult shouldn't come as a surprise to anyone at this point. Let the frantic -- and quite possibly illegal -- seat-of-their-pants revisions continue:
The Obama administration is considering an extension of the president's decision to let people keep their individual insurance policies even if they are not compliant with the health care overhaul, industry and government officials said Thursday. Avalere Health CEO Dan Mendelson said Thursday that the administration may let policyholders keep that coverage for as long as an additional three years, stressing that no decision has been made. Policymakers are waiting to see what rate hikes health insurers plan for the insurance exchanges that are key to the overhaul's coverage expansions.
In November, the White House responded to the firestorm over millions of canceled plans by issuing an "administrative fix" wherein the administration gave insurers the option to basically un-cancel policies that failed to comply with Obamacare's slew of extra mandates. Companies were, in essence, given permission to violate the new law -- at least for awhile -- in order to alleviate a political problem. Various state insurance commissioners from both political parties quickly shot down the idea, explaining that it was unworkable. Eleven state Attorneys General issued statements condemning the change as "flatly illegal." Insurers had spent major time and resources tailoring their offerings to comply with Obamacare; "allowing" last-second do-overs wasn't realistic or fair, and would also undermine the viability of the law. The president knew all of this, of course, but didn't care. He was interested in giving embattled Democrats a flimsy talking point to lean on. And now it looks like he'd like to grant them access to that same empty excuse for a few more years -- until after the next election, in fact. What a convenient coincidence. Meanwhile, the administration is also moving to tamp down complaints about the restricted coverage networks being offered on the exchanges. Stories like this aren't good news, especially when the president made a big deal about people being able to keep their doctors:
And thus, a new Obamacare alteration is under consideration:
The Centers for Medicare and Medicaid Services on Tuesday proposed a new guidance for 2015 aimed at expanding choices of doctors and hospitals on plans offered through the exchanges in President Obama's health care law. But in an effort to answer one complaint of Obamacare, the proposed regulations could exacerbate another, by further driving up premiums. Starting on Jan. 1, Obamacare imposed a raft of new regulations on insurance – such as requiring that insurers offer certain benefits and cover those with pre-existing conditions – that naturally made insurance more expensive. To contain the growth of premiums, insurers responded to the requirements by trimming the number of doctors and hospitals that were part of their networks of providers.
This is the latest round of Obamacare nightmare whack-a-mole. Force exchanges to expand their options (residents in a majority of US counties in states using the federal exchange have only one or two plans to choose from), and premiums go up. Limit access to hold down premium increases, and you have people upset about their scaled-back options, which may not include their preferred doctors or medical facilities. The same logic applies to the untenable "keep your plan" fix. There are costs associated with re-jiggering the system (again), and if some people move back to their technically illegal plans, they'll likely do so to pay less for less comprehensive coverage. That will impact risk pools and revenue streams. To compensate, rates will likely get bumped higher for others. Beyond that, what happens after three years? Another round of cancellations? Obama's "if you like your plan, you can keep it -- period," promise didn't mention an expiration date. Don't forget that Moody's just downgraded health insurers' credit outlook, with one of the primary factors being the seemingly endless uncertainty dogging the program. Well, here's yet another political wrinkle that adds to the confused state of flux with which these companies are being asked to contend. The other major factor Moody's reported were problematic risk pools with too few young, healthy consumers signing up. Which brings us to the case of Humana, a major insurer which is setting the table for what amounts to a nine-figure, taxpayer-funded Obamacare bailout. Due to all of the administration's careening revisions and far too few "young invincibles" in their risk pool, they're going to seek up to $450 million in effective bailout help this year alone:
Humana announced that it expects to tap the three risk adjustment mechanisms in ObamaCare for between $250 and $450 million in 2014. This amounts to about 25 percent of the insurer’s expected exchange revenue. This money is needed to offset losses that the insurer will take as a result of slower enrollment in its ObamaCare plans, and a skewed risk pool that weighs more heavily toward older and less healthy members than it originally budgeted....The mix of people enrolling in Humana plans still skews toward older individuals. Only 20 percent of enrollees are below the age of 30, while 42 percent are aged 50-64.
Obamacare's actuaries were hoping that nearly 40 percent of the risk pools would be comprised of young people. That was the target for sustainability, sudden "never mind!" downward revisions notwithstanding. In Humana's case, they've only attracted half of that goal so far, which will lead to bailouts and/or higher premiums. How will the American people feel about bailing out a major insurance company for losses caused by the failures of a program they didn't even want in the first place?
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