I’ve frequently noted that the timing of the implementation of the Affordable Care Act has often coincidentally worked in favor of the Obama Administration.
As we know, built on the “promises” of 2008 with the timing provisions where the “truth” of those “promises” didn’t surface in a meaningful way until 2013, after the President’s re-election, both trust, confidence and approval of the President have sagged as reality hits. But, for the President, the timing game has worked.
It should be reason for pause when your read all the GOOD NEWS coming out about Obamacare. Timing.
Consider Paul Waldman’s article of 9/24/14, in “The Washington Post,” entitled, “Some Good News about Obamacare that even conservatives should love,” http://www.washingtonpost.com/blogs/plum-line/wp/2014/09/24/some-good-news-about-obamacare-that-even-conservatives-should-love/, that ACCURATELY reports that “…the number of insurers offering coverage through the exchanges is set to increase by 25 percent next year.”
Yes, the government is reporting a 25 percent increase in the number of ISSUERS, companies participating in the “marketplace” for benefits year 2015 (http://aspe.hhs.gov/health/reports/2014/NewEntrants/ib_NewEntrants.pdf).
BUT the article is DEAD WRONG in crediting the “FREE MARKET,” with the perceived “INCREASED COMPETITION,” joyously and mistakenly used to try to persuade “reasonable” people that Obamacare is working.
Even CMS doesn’t go so far as to say that the increased participation is divorced from the Federal MONEY that makes offering plans essentially an automatic win for insurance companies because of the REINSURANCE, RISK CORRIDORS and RISK ADJUSTMENT provisions.
These provisions are in section 1341 and 1342 of the PPACA, Sec. 1341. Transitional Reinsurance Program for Individual and Small group markets in each state, and Sec. 1342, Establishment of Risk Corridors for plans in individual and small group markets.
CMS defines REINSURANCE as Federal dollars that “Provides funding to issuers that incur high claims costs for enrollees,” (which prevents the issuer insurance company from bearing those losses). RISK CORRIDORS “Limits issuer losses (and gains),” and RISK ADJUSTMENT “Transfers funds from lower risk plans to higher risk plans.”
Are you with me Mr. Waldman? This is a FEDERAL MONEY PROGRAM THAT PROTECTS ISSUERS (Insurance companies) in order to incentivize their participation in exchanges by reducing the risk of loss of dollars…Hardly FREE MARKET.
The REINSURANCE and THE RISK CORRIDORS ARE SUPPOSED TO LAST THROUGH 2016…that would be a meaningful year in the world of elections. After that, those federal dollar programs would gradually expire (as funding was no longer provided).
The RISK ADJUSTMENT, the provision that transfers money from lower risk plans to higher risk plans is supposed to be permanent (in other words spreading the money around evenly). ( Reinsurance, Risk Corridors, and Risk Adjustment Final Rule http://www.cms.gov/cciio/resources/files/downloads/3rs-final-rule.pdf).
Mr. Waldman’s article notes that “The law’s opponents, of course, predicted that the exchanges wouldn’t be attractive to insurers, partly because of a lack of young people signing up for insurance. Left with a bunch of old, sick people whom they couldn’t insure profitably, the insurers would avoid the exchanges like Ebola,” http://www.washingtonpost.com/blogs/plum-line/wp/2014/09/24/some-good-news-about-obamacare-that-even-conservatives-should-love/.
Yes that was and IS a worry. CMS knows this as it noted in May of 2014 that “As an attempt to avoid costly premium hikes, the rule hopes to lower the cost threshold at which HHS pitches in to pay for overly sick patients from $70,000 to $45,000,” Fierce Health Payer, “New CMS rule targets risk corridor program,” http://www.fiercehealthpayer.com/story/new-cms-rule-targets-risk-corridor-program/2014-05-19.
For consumers, since our benefits election is year-by-year, there is GOOD NEWS (and we all like good news that's true!) that there are more insurance companies participating on the federal exchange for THIS YEAR according to CMS. The reason is that there is little to lose for insurers trying to tap into the “marketplace.”
However, this IS NOT an Obamacare-is-working scenario in terms of increased competition. It is obviously a story of how federal dollars are pumping in funds to incentivize insurance company participation in health exchanges.
So, why does it matter? Because telling us “good news” that is only a momentary flash in the pan AND that is timed to explode in our faces conveniently around election time is really what has made Obamacare such a consumer problem to begin with.
Sure, there are more participants this year. Hopefully this will work for consumers still facing challenges of whether they’re choosing plans that will be sufficient in the event they become ill (under insurance) and in the event they need specific types of providers since there are many reports of narrowing consumer choice of providers under these plans.
But to assume this is a long-term sign that Obamacare is “working” is ridiculous since this success is dependent on provisions of federal dollars set to expire in 2016. No vote should be based on this particular “success,” like our health plans it’s as good as this year.
More importantly, this has little to do with “free markets.” This is federal dollars propping up their attempt to get the marketplace going.
I actually agree with Paul Waldman, I too was "enthusiastic" about the original promises of 2008, the “big-government” provisions of the ACA, specifically Medicaid expansion and favoring the inclusion of a “public option." That's the point, that too was false. Mandatory Medicaid expansion died in the Supreme Court and the public option died long before the thousand pages of Obamacare was committed to paper.
Neither of these came to pass. With the decision to make Medicaid expansion “optional” and the failure to include a public option, these goals that did create enthusiasm were sold out in favor of the President passing something, a party driven, ego driven mess that is Obamacare.
In a continued effort to be enthusiastic, Mr. Waldman seems to have adopted a new fiction that somehow increased participation by more insurance companies on exchanges is a sign that “competition” is working, omitting the Federal dollars financing this competition.
This particular piece of news is not about free markets, it’s about big government paying insurance company participants in the health exchange in order to make it as close to a no-loss situation as possible for them with provisions that will expire after the NEXT Presidential election.
