A Jump in Obamacare Premiums Projected for 2016

USA Today: “Consumers buying health insurance through federal and state exchanges will see their monthly premiums for the popular silver-level plans jump by an average of more than 11%, while also likely facing higher deductibles, a new analysis of exchange data by the Robert Wood Johnson Foundation shows.”

“These increases will hike the cost of health insurance especially for customers who don’t receive federal subsidies to buy insurance, which may also limit the number of people insured under the Affordable Care Act. Average health insurance premiums for silver plans rose to nearly $300 a month for a 27 year old male, while deductibles were up 8%.”

“These increases will hike the cost of health insurance especially for customers who don’t receive federal subsidies to buy insurance, which may also limit the number of people insured under the Affordable Care Act. Although the 7.5% average premium increase for the benchmark plan was higher than the 5% increase in 2015, the Department of Health and Human Services said in an October report that ‘this rate increase is relatively modest compared to those in the individual market before the Affordable Care Act, when consumers in the individual market regularly experienced double-digit rate increases on average.'”

The Reason Behind the Obamacare Premium Increases

Sarah Kliff in Vox: “Insurance markets are complicated. But the story of Obamacare’s 2016 premium increase is actually pretty simple: Many health plans — even those with decades of experience selling insurance — underestimated how sick health law enrollees would be.”

“This meant that in 2014, many insurers spent more paying out medical bills than members paid in premiums. Premera Blue Cross Blue Shield of Alaska lost $9 million covering just under 8,000 Obamacare enrollees that year. In Colorado, Rocky Mountain HMO found medical bills to be about 36 percent higher than premiums.”

“Now insurers are raising their rates to make sure premiums do cover claims. In some states, that means double-digit rate hikes.”

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“Insurance plans are likely going to watch 2016 to see whether enrollment continues to increase, which would be a sign of healthier consumers entering the market after sitting out earlier sign-up periods.”

“‘Enrollment has to grow to make the market attractive,’ Kaiser’s Levitt says. ‘If it plateaus, some might think twice about participating.'”

Kentuckians: Luke Warm on Obamacare, But Like Medicaid Expansion

According to the Kaiser Family Foundation 12/11/15 newsletter, A Kaiser Family Foundation poll of Kentucky residents finds that a strong majority opposes scaling back the state’s Medicaid expansion to cover fewer people as new Gov. Matt Bevin proposed.

About seven in ten Kentuckians (72%) say they would prefer to keep the state’s Medicaid expansion as it is today rather than change it to cover fewer people. A much smaller share (20%) say they would prefer to scale back the expansion to cover fewer people.

Taken before Gov. Bevin’s inauguration on Tuesday, the poll finds Republicans in the state are more divided about the Medicaid expansion, but a majority (54%) favors keeping it over changes that would reduce the number of people with coverage. Among those who say they voted for Gov. Bevin on Nov. 3, somewhat fewer (43%) support the Medicaid program as it exists, while half (50%) say they want it scaled back to cover fewer people.

“Kentuckians don’t particularly like the Affordable Care Act, but they do like their state’s Medicaid expansion and marketplace, and most want to keep them,” Foundation CEO and President Drew Altman said. “The findings in a red state may show other governors considering expansion that it could be equally popular with their state’s residents, and illustrate to Republicans in Washington how difficult it may be to take away health coverage from people who have it.”

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Obamacare on Track to Beat 2015 Enrollment Goal

The Hill: “ObamaCare officials are on a path to beat this year’s enrollment goal just about halfway through the current sign-up season.”

“More than 1 million new customers — and 2.8 million people overall — have signed up for ObamaCare in the first six weeks of the new enrollment period, according to data from the Centers for Medicare and Medicaid Services (CMS) released Wednesday.”

“While not all of the people who signed up will ultimately pay their premiums and become enrolled, it’s a strong sign that the administration will reach, if not outpace, its goal of adding 900,000 new customers to the marketplace this year.”

Average Obamacare Penalty to Rise by 47% in 2016

Kaiser Family Foundation 12/9/15 Newsletter: “A new analysis from the Kaiser Family Foundation finds that among uninsured people who are eligible for an Affordable Care Act marketplace plan, the average penalty for remaining without coverage in 2016 would be $969 per household – 47 percent higher than the 2015 estimated average of $661.”

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“The new analysis finds a bronze plan would cost $0 in premiums or less money than the individual mandate penalty for about 3.5 million uninsured people eligible for ACA marketplace plans, due to premium subsidies. The subsidies are available to low- and middle-income households to defray the costs of premiums in ACA marketplaces.”

Will Obamacare Really Kill Jobs?

Fiscal Times: “The Congressional Budget Office released a new working paper this week predicting that the Affordable Care Act will have a negative effect on the size of the U.S. labor supply over the coming decade.”

“Republican foes of Obamacare and some news organizations seized on the CBO report as evidence that the controversial health care law would eliminate or ‘kill’ 2 million jobs by 2025.”

“But the CBO isn’t looking specifically at job loss. It’s making projections about aggregate hours worked and the total number of workers who choose to stay in the workforce: ‘The labor force is projected to be about 2 million full-time-equivalent workers smaller in 2025 under the ACA than it would have been otherwise,’ the agency wrote. That is, fewer work hours will be logged and paid for, the rough equivalent of 2 million jobs. But those two things — reduced hours across the economy and total jobs — are different things. And it’s important to note that the reduction in hours worked is relative to the number of hours that would have been worked in the absence of the law; in either case, total work hours continue to grow into 2025, it’s just a matter of by how much.”

The Biggest Killer of Them All? Fossil Fuels.

Quartz: “Global warming will affect billions of lives in the future. But, by one estimate, our love for fossil fuels may already be responsible for more deaths than those caused by wars, murders, and traffic accidents combined.”

“These figures come from the 2012 Climate Vulnerability Monitor. In 2010, some 4.5 million deaths could be attributed to air pollution, because of the production of carbon particles and nitrogen oxides. Another 500,000 deaths that year could be attributed to changes in climate, which lead to extreme weather events, flare ups in infectious diseases, and other disastrous phenomena.”

How Will the Newly Insured Vote?

Drew Altman asks: “How will the newly insured behave at the ballot box? Will they vote? Will they become a Democratic constituency? The ACA may be an issue in the 2016 elections, but the newly insured are unlikely to become an important electoral factor themselves.”

“One potential indicator of future behavior is how the newly insured behaved politically when they didn’t have health coverage … While the uninsured shade Democratic as a group, they are a reasonably heterogeneous … The largest share of uninsured independents describe themselves as not leaning Republican or Democratic. These uninsured independents are the most likely to be disengaged from the political process.”

“Surveys have found that most of the previously uninsured like their coverage–a Kaiser Family Foundation poll found that 76% do–but it’s not known whether appreciation for that coverage will be a factor when they vote or if they will vote in significant numbers. It is a fair bet that in the short term the newly insured will behave politically much like the uninsured have: Many will not vote, and they will continue to represent a very small slice of the electorate.”

Americans Say Health Premiums Increased in 2015

Gallup: “Nearly three in four American adults (74%) who pay all or some of their health insurance premiums say the amount they pay has gone up over the past year. This percentage is up marginally from the 67% who last year said their costs increased, but it is generally in line with what Gallup has found in yearly updates since 2003.”

Self-Reports of Cost Changes Among Adults Who Pay All or Some of Their Health Premiums

“Though Americans are still more likely to be satisfied than dissatisfied with their personal healthcare costs, the latest poll indicates they are more likely to be grappling with higher premium costs than in previous years.”

“What Americans pay for their healthcare premiums has not noticeably improved since the ACA’s implementation, and experts have stressed that a rise in premiums will continue for several years. Meanwhile, the White House contends that recent premium increases would have been larger if not for the ACA.”

Health Spending Grew 5.3% to $3 Trillion

Wall Street Journal: “Growth in U.S. health-care spending is accelerating after reaching historic lows … Spending on all health care increased 5.3% in 2014 [to $3 trillion], according to a report Wednesday from actuaries at the Centers for Medicare and Medicaid Services. That compares with the 2.9% growth in 2013, which marked the lowest rate since the government began tracking the gains 55 years ago.”

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L.A. Times: “Experts aren’t predicting a return to double-digit increases in medical spending. But the latest trend underscores how difficult it will be for policymakers, employers and insurers to control healthcare costs going forward.”

“‘Two main factors were responsible for health spending growth in 2014 — coverage expansion associated with the Affordable Care Act and faster growth in prescription drug spending,’ said Anne B. Martin, an economist at the Centers for Medicare and Medicaid Services.”

“Wednesday’s report by government actuaries found that the percentage of Americans with health insurance reached 88.8% in 2014, the highest share since 1987.”

“The Obama administration pointed out that the 5.3% increase in 2014 is still below the 6.9% average growth rate during the decade prior to the 2010 health law being enacted. Officials also predicted the spending increases tied to the coverage expansion will fade in the coming years.”

Is Obamacare Saving Lives?

Jonathan Cohn: “Hospitals have cut down on deadly medical errors, saving around 87,000 lives since 2010, according to a new government report … Many analysts think government initiatives within the Affordable Care Act have played a significant role in the progress so far.”

Bar graph shows total annual and cumulative deaths averted: 2011, 3,527; 2012, 12,300; 2013, 34,530; 2014 (Interim), 36,295; Cumulative (2010 - Interim 2014), 86,669.

On Tuesday, the Agency for Healthcare Research and Quality, “announced its latest findings on these ‘hospital-acquired conditions,’ based on preliminary data from 2014. For every 1,000 patients admitted to and then discharged from a hospital, the agency found, roughy 121 of them developed such a condition. That rate is unchanged from last year, but it is down 17 percent from 2010, when it was about 145 out of every 1,000 patients.”

“Based on the existing research about what happens to patients who get sick in the hospital and what it costs to treat them afterwards, that decline works out to roughly 87,000 lives saved and $19.8 billion not spent on extra medical care, according to the report.”

In the past, “hospitals made money for every new treatment and a patient who got sick in the hospital needed more care, rather than less.”

“A major goal of the Affordable Care Act was to reduce and eventually eliminate these incentives for poor quality care, while rewarding the hospitals that getter better results.”

The GOP Ties to Pharmaceutical Industry Are Strong

STAT: “A STAT analysis of thousands of pages of congressional disclosure forms found that about 30 percent of senators and 20 percent of representatives held assets in biomedical and health-care companies, or in specialty funds set up to invest in those industries, during 2014. The most common investments in the House were Pfizer, Johnson & Johnson, Merck, and Abbott Laboratories. In the Senate, investors favored Johnson & Johnson, Pfizer, and Merck.”

“Members of Congress owned more stock in health-related companies last year than in the defense and construction sectors combined, according to the Center for Responsive Politics. Their investments in the sector topped $68 million.”

“Some of the most aggressive congressional investors in the biomedical sector also sit on key committees, such as the House Judiciary Committee, which has jurisdiction over patent law, or the House Energy and Commerce Committee, which oversees the Food and Drug Administration and works on many issues of critical importance to the industry, including drug regulation, research funding, and taxes on medical devices.”

In addition, Politico reports that “Even as they try to address an issue that polls show is voters’ No. 1 health concern, the candidates are caught in the box of Republican free market orthodoxy — and also, of long-standing relationships with the pharmaceutical industry, a lobbying powerhouse on the Hill. In the 2012 election cycle, more than 60 percent of PhRMA’s spending went toward Republican candidates, compared to 25 percent of contributions to Democrats, according to the Center for Responsive Politics.”

Why Do We Pay More for Prescription Drugs?

The Wall Street Journal reports its findings on its study on “international drug-cost differences and what lies behind them.”

In the case of Norway, “U.S. prices were higher for 93% of 40 top branded drugs available in both countries in the third quarter. Similar patterns appeared when U.S. prices were compared with those in England and Canada’s Ontario province. Throughout the developed world, branded prescription drugs are generally cheaper than in the U.S.”

“The upshot is Americans fund much of the global drug industry’s earnings, and its efforts to find new medicines. ‘The U.S. is responsible for the majority of profits for most large pharmaceutical companies,’ said Richard Evans, a health-care analyst at SSR LLC.”

“The government systems also are the only large drug buyers in most of these countries, giving them substantial negotiating power.”

“Medicare, the largest single U.S. payer for prescription drugs, is by law unable to negotiate pricing. For Medicare Part B, companies report the average price at which they sell medicines to doctors’ offices or to distributors that sell to doctors. By law, Medicare adds 6% to these prices before reimbursing the doctors. Beneficiaries are responsible for 20% of the cost.”

“The arrangement means Medicare is essentially forfeiting its buying power, leaving bargaining to doctors’ offices that have little negotiating heft.”

Healthcare Costs Still a Concern for Americans

Gallup: “Slightly fewer than one in three Americans (31%) say that they or a family member have put off any sort of medical treatment in the past year because of the cost. This is essentially unchanged from the 33% who said this in 2014, and the figure has remained steady for the past decade. The majority of Americans (68%) say they did not have to put off care because of the cost.”

Trend: Percentage of Americans Putting Off Medical Treatment Because of Cost

Obamacare has “provisions that are designed to limit the cost of healthcare services, but despite all these measures, a consistent third of the country say that in the past year, they or their family has had to delay medical treatment. The ACA has achieved objectives considered important by the policymakers who crafted the law — most notably, ensuring that a greater a number of Americans have medical insurance — but on this cost-related metric, its influence has not been felt.”