ObamaCare Watch Newsletter 6/15/18

  • The Autumn of ObamaCare
  • The Coming Health Care Wars
  • HSAs Expansion Is a Key to Health Care Freedom
  • Federal Government Doesn’t Have to Pay Billions to Health Insurers, Court Rules
  • Trump and Sessions Create Amazing and Unusual Week at the Justice Department
  • Azar Backs Protections for Preexisting Conditions
  • Health Care Premiums Will Soar Again In 2019 — Thanks, Obama
  • Take-Up, Drop-Out, and Spending in ACA Marketplaces
  • State Spending on Medicaid Expected to Significantly Slow in Short Term
  • As Medicaid Costs Soar, States Try A New Approach

Need for Reform

The Autumn of ObamaCare
By Editorial Board
The Wall Street Journal, June 11, 2018

Republicans are in a predictable spot as they head to the midterm election: The party failed to repeal ObamaCare, and the press is waving around double-digit premium increases for 2019. Democrats are pinning the blame on Republicans, though the basic problem is still the structure of the Affordable Care Act.State regulators approve increases and rates are set in the fall, so this pot will reach a boil as Republicans are campaigning for re-election. The Wall Street Journal editorial board writes that some on the right are working on another bill to repeal and replace the law this year, and they would welcome nothing more.

The Coming Health Care Wars
By Sam Baker
Axios, June 7, 2018

The next great health care war is already starting. It’ll be about costs this time, not coverage, and Democrats are the ones firing the first shots—though neither party has a complete strategy just yet. After a bruising, decade-long fight over the ACA, plenty of candidates and lawmakers would love to keep their distance from the politics of health care. But the issue is so personal, and the system is so dysfunctional, that may be impossible.

HSAs Expansion Is a Key to Health Care Freedom
By Adam Brandon
The Hill, June 7, 2018

In the fight for free-market principles in the health insurance market, there is one policy in particular that all conservatives can agree on: the expansion of health savings accounts. These accounts allow consumers to save their own money tax-free to be used for medical expenses, putting individuals in charge of their own health care dollars.The expansion of HSAs has been one centerpiece of every replacement plan that Republicans have put forth.


Legal Challenges

Federal Government Doesn’t Have to Pay Billions to Health Insurers, Court Rules
By Armour and Kendall
The Wall Street Journal, June 14, 2018

The federal government doesn’t have to pay insurers billions of dollars under an ACA program aimed at enticing them into the markets by helping cover their financial risks, a divided federal appeals court ruled Thursday. In a case brought by Moda Health Plan Inc., the ruling is a blow to insurers hoping to recoup money they say they were owed under the ACA.The ruling, from a three-judge panel at the U.S. Court of Appeals for the Federal Circuit, had been eagerly awaited by insurers who say they are owed more than $8 billion under the ACA’s “risk corridors” mechanism, but the court concluded the law says the program can only pay out as much as it collected.

Trump and Sessions Create Amazing and Unusual Week at the Justice Department
By Ken Cuccinelli
The Washington Examiner, June 11, 2018

Last week was an amazing and unusual week at the Department of Justice, and it went largely unnoticed by the mainstream media. Attorney General Jeff Sessions, with the approval of President Trump, submitted a court filing agreeing that Obamacare will be unconstitutional as of Jan. 1, 2019. Thus, DOJ will not defend Obamacare on the merits. The DOJ is relying on existing rulings from the Supreme Court and the 5th Circuit, respectively, in formulating its position.

Azar Backs Protections for Preexisting Conditions
By Goldstein and McGinley
The Washington Post, June 12, 2018

HHS Secretary Alex Azar told lawmakers Tuesday that he wants to preserve access to affordable insurance for Americans with preexisting medical conditions, but he declined to disclose his view of an administration move that could undercut such consumer protections. Calling it “a constitutional position…not a policy position,” Azar sidestepped grilling on whether he agreed with a legal brief filed last week by Justice Department attorneys stating they would not defend the ACA in a federal lawsuit by Texas and 19 other Republican-led states.


ACA Marketplaces

Health Care Premiums Will Soar Again In 2019 — Thanks, Obama
By Sally C. Pipes
Investor’s Business Daily, June 8, 2018

ObamaCare enrollees should brace themselves for another year of double-digit premium hikes. Average premiums for plans sold through the state and federal insurance exchanges will jump as much as 32% next year, according to a recent report from actuarial firm Milliman. It’s true that Republicans have made significant changes to ObamaCare in recent months, but ObamaCare premiums were rising well before Republicans took over Washington. Average individual market premiums increased 99% from 2013, the year before the exchanges opened, to 2017, when President Obama left office. And last fall, before these changes were implemented, insurers hiked 2018 individual plan premiums by an average of 34%.

Take-Up, Drop-Out, and Spending in ACA Marketplaces
By Diamond, Dickstein, et al.
The National Bureau of Economic Research, May 2018

In the California ACA market, there is widespread attrition with more than half of all new enrollees dropping coverage before the end of the plan year. Enrollees who drop out re-time health spending to the months of insurance coverage. This drop-out behavior generates a new type of adverse selection: insurers face high costs relative to the premiums collected when they enroll strategic consumers. This pattern undermines market stability and can drive insurers to exit, even absent differences in enrollees’ underlying health risks. Insurers largely shift the costs of attrition to non-drop-out enrollees, whose inertia generates low price sensitivity.


Medicaid

State Spending on Medicaid Expected to Significantly Slow in Short Term
By Kimberly Leonard
The Washington Examiner, June 14, 2018

Growth in state spending on the Medicaid program is expected to fall significantly in the short term, according to a new report by state budget officers. The findings, published Thursday from the National Association of State Budget Officers, shows that state Medicaid spending is expected to carry a median growth rate of 4.5% in fiscal 2018, and then growth is projected to slow significantly in fiscal 2019, to a median growth rate of 1.5%. In the long term, however, costs are expected to grow faster than revenue, which will put additional strain on state budgets. Medicaid is the second-largest expenditure in most states, and in future years, the program is expected to grow closer to historic levels of 5.5%, according to the Congressional Budget Office.

As Medicaid Costs Soar, States Try A New Approach
By Phil Galewitz
Kaiser Health News, June 15, 2018

Minnesota is at the forefront of a growing number of states testing a Medicaid payment system. It rewards hospitals and physician groups holding down costs by keeping enrollees healthy.
Under this arrangement, those health care providers are asked to do more than just treat medical issues such as diabetes and heart disease. They are called on to address the underlying social issues—such as homelessness, lack of transportation and poor nutrition—that can cause and exacerbate health problems.