Thousands of Doctors Dropped by Insurer After Obamacare Funding Cuts

Photo Credit: WNDBy Newsmax Wires.

United Health Group has dropped thousands of doctors from its networks in recent weeks, leaving many elderly patients unsure whether they need to switch plans to continue seeing their doctors, the Wall Street Journal reported Saturday.

The insurer said in October that underfunding of Medicare Advantage plans for the elderly could not be fully offset by the company’s other healthcare business.

The company also reported spending more healthcare premiums on medical claims in the third quarter, due mainly to government cuts to payments for Medicare Advantage services.

“Medicare Advantage, an alternative to traditional Medicare, combines hospital and doctor coverage and often includes prescription drugs and perks like gym memberships,” the Journal explained. “Enrollment has more than doubled since 2004 to 13 million in 2012, which represents about 27 percent of Americans on Medicare.

“The federal government pays private insurers a per-capita fee to manage the benefits. The rate is currently about 12 percent more than the average Medicare patient spends annually. The Obama administration plans to cut those extra payments to insurers by about $150 billion over the next 10 years to help pay” for the Affordable Care Act, or Obamacare.

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Why the Obamacare Insurance Delay Isn’t Legal

By John Yoo.

I agree with Adam below that President Obama does not have the legal authority for his health care decision yesterday, though the issue is not easy to resolve. The legal complexity might allow the White House to get away with another lawless act—as it has with the delay of the employer mandate, the waiving of welfare work rules, the free pass for marijuana users, and the non-enforcement of immigration laws.

The President announced on Thursday that, for the next year, anyone can keep the health plans that they held before the passage of Obamacare. Obamacare requires all individual to purchase health care. The problem is that the Administration, acting pursuant to the Affordable Care Act, has the authority to define what qualifies as health insurance. The Obama administration notoriously defined acceptable health care policies to only include those that met minimum requirements, including prenatal care (even for men). Pre-existing health care plans will be lost, because most of them do not meet these criteria.

Initially, Obama’s decision might seem to rely on the safe ground of the delegated authority under the ACA to define insurance policies. Obama could just order HHS to alter its regulation so that any and all insurance policies could meet the insurance mandate.

The problem with Obama’s suspension, as I understand it, is that any regulation must undergo what is known as “notice-and-comment” under the Administrative Procedure Act. All regulations—issued pursuant to authority delegated to the executive branch by Congress—must first be publicly proposed, and then wait for a period of time for the public to make comments. Then the agency must issue the regulation with reasoned explanations for its policy choices. Changes to existing regulations usually must undergo the same process.

Obama’s decision yesterday, however, apparently is not to forego “notice-and-comment” rulemaking. If the President wants to snuff out the raging political fires engulfing his Administration, his one-year delay has to have immediate effect. Obama cannot wait around for the normal procedures required by the Administrative Procedure Act.

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