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Taxpayers on Hook Again After New Obamacare Failure

A new report examining the collapse of Health Republic of New York, Obamacare’s largest co-op, said its failure—which may lead to a $265-million loss of taxpayer dollars—can be attributed in part to heightened regulatory control by the state.

According to the analysis from the Albany, New York-based Empire Center, a “breakdown” in oversight from the state Department of Financial Services and artificial cuts in Health Republic’s premiums may have led to the ultimate failure of the consumer operated and oriented plan, or co-op.

Of the 23 co-ops created under the health care law, just 12 remain.

“The rapid rise and costly fall of Health Republic Insurance of New York … is a cautionary tale for policymakers in Albany as well as in Washington,” the report’s author, Bill Hammond, wrote. “Despite heavy federal subsidies and robust enrollment growth, Health Republic lost money at such a clip that state regulators forced it to shut down as of Nov. 30, on barely two months’ notice.”

Health Republic, one of 23 co-ops implemented under Obamacare, sold the cheapest plans available on New York’s state-run exchange and enrolled more than 200,000 customers in coverage. According to the Empire Center, Health Republic offered consumers broad networks, and its plans were significantly cheaper than those sold by competitors like UnitedHealthcare and Aetna.

As a result of its low premiums, Health Republic experienced significant losses in 2014, as its customers’ medical claims and administrative costs outpaced the revenue it was bringing in through premiums.

To remedy its losses, Health Republic requested a 15.4 percent increase in rates for individuals and 5.9 percent increase in rates for small group plans in 2015. The state Department of Financial Services, though, approved lower rate-hikes, which the Empire Center said squeezed the market.

“Although Health Republic’s premiums were already among the very lowest in the state—and though its financial report showed it was losing money—the fledgling company did not escape the state’s rate-setting knife,” the report said.

Health Republic did not immediately return The Daily Signal’s request for comment.

For 2016 coverage, Health Republic requested a 14.4 percent rate hike for individual plans and a 20 percent increase for small group plans. The state lessened the hike for individuals to 14 percent, and approved Health Republic’s request for small group plans.

Like many of the other 23 co-ops—which received a total of $2.5 billion from the federal government—Health Republic relied on money from Obamacare’s risk corridor program to boost its bottom line. The risk corridor program sought to limit the risk for insurers in the market.

According to the Empire Center, Health Republic requested $243 million from the risk corridor program. However, the Centers for Medicare and Medicaid Services announced in October it would pay just 12.6 percent of the requested payments.

As a result, Health Republic, along with seven other co-ops, announced it would be closing its doors after experiencing significant losses and receiving lower-than-expected payments from the risk corridor program.

“Had New York’s regulators ordered higher rates for Health Republic from the beginning, the company could have avoided some of the steep losses that made it so dependent on risk-corridor funding,” Hammond wrote. “While it’s unclear that such action would have been enough to save the company, DFS’s rate-cutting, in retrospect, was unquestionably productive.”

Health Republic closed its doors Nov. 30, leaving some of its 215,000 customers to find coverage for a month—or go without—and secure new insurance for 2016 through the state-run exchange.

“If the goal is making health coverage more affordable, the surest way to achieve that objective is not for the state to impose price controls, but for it to roll back its own high taxes and costly coverage mandates,” the report said. (For more from the author of “Taxpayers on Hook Again After New Obamacare Failure” HERE)

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HHS: Bailing out Obamacare Insurers an ‘Obligation’ of the Federal Government

The Department of Health and Human Services attempted to reassure private insurers on Thursday that they’ll be able to recover losses from participating in Obamacare by claiming it was an “obligation” of the U.S. government to bail them out.

At issue is a provision within the law known as the risk corridors program. Under the program, which runs from 2014 through 2016, the federal government is to collect money from health insurers doing better than expected and use those funds to provide a federal backstop to other insurers who incur larger than expected losses from rising medical claims. The idea was to provide training wheels to insurers in the first years of Obamacare’s implementation, and to take away any incentive for insurers to cherry pick only the healthiest customers.

Republicans, fearing that this could turn into an open-ended government bailout in the event of industry-wide losses, included a provision in last year’s spending bill that limited the program, requiring HHS to pay out only from the pool of money collected, rather than supplementing it with other sources of government funding. President Obama signed that bill.

Now that insurers have been able to look at medical claims, what they’ve found is that enrollees in Obamacare are disproportionately sicker, and losses are piling up. For the 2014 benefit year, insurers losing more than expected asked for $2.87 billion in government payments through the risk corridors program, but HHS only collected $362 million from insurers performing better than expected. Thus, the funds available to the federal government only amounts to 12.6 percent of what insurers argue that they’re owed.

So insurers are not happy. And now the industry lobbying group America’s Health Insurance Plans — which happens to be helmed by Marilyn Tavenner, who previously oversaw the implementation of Obamacare as head of the Centers for Medicare and Medicaid Services — is aggressively fighting for more money. (Read more from “HHS: Bailing out Obamacare Insurers an ‘Obligation’ of the Federal Government” HERE)

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UnitedHealth CEO: Obamacare Losses Worsening, Not Sustainable Past 2016

The chief executive officer of the largest U.S. health insurance company on Thursday told investors that the company’s losses from Obamacare were worsening, showed no signs of improvement, and would be unsustainable beyond 2016.

UnitedHealth Group CEO Stephen J. Hemsley made the comments in a conference call after the insurer warned investors about $425 million in losses primarily due to its participation in Obamacare, even though the company previously expected that the exchanges would have a neutral effect on profits. He even expressed some regret about participating in the program in the first place.

Asked whether the company would be willing to tolerate losses beyond 2016, Hemsley was emphatic: “No. We cannot sustain these losses. We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

The news from UnitedHealth comes at a fragile time for Obamacare, as enrollment stalls in its third year and insurers have been forced to cut premiums and access to providers. Republican presidential candidates have continued to call for the repeal of the law heading into the presidential election year, and the Senate is gearing up to pass a partial repeal by the end of this year.

“In our view, in recent weeks, market performance expectations for exchange products have further declined,” Hemlsey said, pointing toward a combination of weak enrollment trends in the healthcare exchanges and more costs associated with covering disproportionately sicker enrollees. (Read more from “UnitedHealth CEO: Obamacare Losses Worsening, Not Sustainable Past 2016” HERE)

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Obamacare: Big Brother vs. The Little Sisters

The Supreme Court has announced that it will hear another Obamacare case, this one connected to the Obama administration’s mandate that religious employers help their workers buy contraceptives, including abortifacients such as the “morning after pill.” In this case we can see the stark outlines of the struggles Christians will face over future decades in America. Can we maintain any freedom of action in a country where a massive and growing federal government believes that it has a mandate to impose a godless utilitarian worldview into every nook and cranny of life? Or will we have to settle for a narrow “freedom of worship,” which covers a couple of hours every Sunday?

When Obamacare was proposed, it received broad support from naive religious leaders because it rectified a supposed injustice: unequal access to health care in America. Some, like Chicago’s Archbishop Blaise Cupich, still argue that supporting an egalitarian system of health care is the genuinely pro-life position to take: Since better health care can save lives, if you aren’t willing to do whatever it takes to offer everyone the same level of health care, then you are really not much different from doctors who abort unborn children.

This kind of sloppy thinking smooshes together the intentional murder of unborn children for convenience with the sad but stubborn fact that in a fallen world, man is mortal. There is a radical, absolute difference between directly killing someone, and not diverting all your resources to postponing his death. Otherwise, every time you switch the channel away from some hunger appeal on TV, you might as well have hired a hitman to knock off a neighbor — since either way, people die. To use “pro-life” this way is to make it mean everything and nothing, which is handy if your other political priorities make you lean toward the rabidly pro-choice Democratic party.

Conservative critics, many of them Christians, warned that federalizing health care would pose a grave threat to the independence of employers — including religious employers, such as Hobby Lobby and the Little Sisters of the Poor — to follow their consciences and make their own free decisions on how to spend their own money, time and talents. And the Obama administration’s fierce fight over this subject proves that conservatives were right. The Democrats know that letting religious employers opt out of paying for abortifacients won’t “force” working women into pregnancy. They are fighting on principle, the principle that no citizen’s conscience can be permitted to trump federal policy. If the mandarins in Washington, D.C., decide that a practice is in the best interest of the masses, then the masses will comply. They must be forced to be free.

It was independence of conscience which our country’s founders thought that they were declaring in 1776. They rejected those systems of government which tried to micromanage the religious and moral decisions of their citizens “for their own good,” like the Inquisition’s Spain or Calvin’s Geneva. Our government would not be closing churches because they taught the “wrong” doctrine, nor banning books because they spread “pernicious” ideas that led people astray.

Nor would our government try to iron out all the inequalities that naturally arise among human beings, who freely choose to use their talents wisely or squander them, to save their money or waste it, to run marathons or to smoke cigarettes, to invest in health insurance or face the tender mercies of the public emergency ward (which should offer a basic, minimum level of care to all comers). Instead of viewing its people as hapless children to be coddled and protected from themselves, America’s leaders were supposed to see its citizens as their equals, moral equals who could make their own decisions and face the consequences, like grown-ups. And grown-ups can decide where they want to work, who they want to hire, and what kind of priorities govern the way they run their businesses. They can also decide how to pray, and how to obey their consciences, so long as they do not violate the fundamental rights of others.

Inflate and distort those rights in the name of equality, and you take away that freedom. If everyone has the right to equal health care, why not equal housing? Interchangeable education? Equally well-cooked, nutritious food? Equal amounts of healthy exercise? That all sounds lovely at first blush, very small “c” Christian. Such a vision appeals to college sophomores still living on their parents’ dimes in spaces kept “safe” from pointy, dissenting ideas. But what such a vision yields in practice is a gray world of uniform public hospitals, public schools, mandatory gymnastics and federal cafeterias in government dormitories, where no one’s talents or choices matter since everyone’s outcome is the same. Such a system, created in the name of equality, once dominated half the world. We fought the Cold War to stop it from conquering the rest.

Our new battle is not with overt Marxist tyranny, but with something more subtle — an irreligious government that wants to agglomerate ever more power over our lives in the name of making things fairer and keeping people happier, of smoothing over our differences and soothing our fragile egos. If two men want to get married, then it is the Supreme Court’s job to protect their “dignity” and open the way for them — and the state’s job to punish those florists, caterers, or preachers who won’t cooperate. If an employee wants the abortion pill (and in five years, if the Democrats win you count on it, a sex change operation), then Mt. Zion Baptist or Our Lady of Sorrows will have to pay for it. There is no logical stopping point for this kind of radical secularism and statism. It is an ideology, which means that its appetite only grows, the more that it feeds.

Because our government is by its very nature secular, the larger the sphere of government action, the less freedom there is for Christians — full stop. The only free spaces for conscientious action by believers are those that we carve out by cutting the state down to size. Like kudzu, this invasive species won’t give up, but will keep growing back, trying to smother us. So keep your weed-whacker fueled. The price of liberty is eternal vigilance. (Read more from “Obamacare: Big Brother vs. The Little Sisters” HERE)

Watch a recent interview with the author below:

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EXPOSED: There’s a Big Cover-Up With Obama’s Pet Project He Won’t Want You to See

By Kevin Whitson. When it comes to Olympic medals, the winners are clearly the ones wearing gold medals. Runners-up wear silver, and third place finishers don the bronze medal. When it comes to Obamacare, it seems that everyone is a loser. The Daily Caller News Foundation, in their investigative reporting of the costs of the Affordable Care Act, have concluded that the costs are much higher than the government claims.

The government claims that the cost for healthcare insurance will only rise by 7.5 percent. However, the Daily Caller News Foundation dug a little deeper into those claims and has concluded that the costs are much higher. The government’s claim, that the costs have only risen by 7.5 percent, is based on an averaging of the cost increases of the healthcare exchanges from 37 participating states and only looked at their Silver level plan. Depending on where one lives, the increases can be higher than 45 percent. Also, the 7.5 percent increase reported by the government does not take into consideration increases in all available plans, only the Silver-level plans. The Daily Caller News Foundation claims that if one averages all the increases from all available plans, then the cost increases to 20.3 percent. In other words, the government only reported on the cost increases of one plan, apparently in an effort to portray the ACA as a success. The losers, in the case of the ACA and healthcare coverage premiums, are the consumers who will be forced to pay much higher premiums and co-pays in the government run healthcare insurance exchanges.

The reason why the increases are happening is because the insurance companies are losing money. Only 36 percent of the insurers made money through the ACA exchanges. The other 64 percent of the insurers lost money, and 28 percent of those insurers reported losses of over 10 million dollars each. (Read more from “EXPOSED: There’s a Big Cover-Up With Obama’s Pet Project He Won’t Want You to See” HERE)

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Obamacare’s ‘Cheap’ Plans Just Got Even More Expensive

By Dan Mangan. “Cheap” could cost you more for Obamacare next year.

People who buy the cheapest health plans on the biggest Obamacare exchange without getting financial assistance are facing the largest increases for premiums and out-of-pocket costs in 2016, new analyses show.

Average prices of the so-called bronze plans on the HealthCare.gov marketplace are rising 11 percent for nonsubsidized customers over 2015 prices. Average deductibles for individuals are increasing by the same percentage, to $5,731, according to a study by HealthPocket.com, an insurance comparison site.

Average premiums for the most popular types of plans, known as “silver plans,” are going up nearly as much — 10 percent — for HealthCare.gov customers who are unsubsidized, HealthPocket found.

Silver plan deductibles, however, are rising more modestly next year, by 6 percent for an individual, to $3,117. (Read more from “Obamacare’s ‘Cheap’ Plans Just Got Even More Expensive” HERE)

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Why Did Paul Ryan and Marco Rubio Promise an Alternative Plan to Obamacare but Never Deliver? [+video]

As Congress comes back this week to additional speculation about whether or not Rep. Paul Ryan (R-WI) will throw his hat into the race for Speaker, there’s another question surrounding the House Ways and Means Committee Chairman:

Where’s the Obamacare alternative that Sen. Marco Rubio (R-FL) said he was working with Paul Ryan on…?

Eighteen Months—And Counting

In an interview with a Denver radio station just before the midterm elections, Sen. Rubio, when asked what would happen with Obamacare in the new Congress, said “I’ve actually been working on one [Obamacare alternative] with Paul Ryan that we hope to introduce soon.” He then went on to outline some general principles for an alternative, including more personalized health insurance options, and equalizing the tax treatment of health insurance.

That was nearly one year ago—and eighteen months since the first rumors appeared that Rubio and Ryan were working on a plan. Since then, the rumor mill among health wonks on and off Capitol Hill has speculated about what was, or was not, in this supposed alternative.

Since then, Sen. Rubio has written two health care op-eds—the first around the time of the Supreme Court heard arguments in King v. Burwell, and the second days before Gov. Scott Walker released his own health care proposal. Chairman Ryan co-signed neither. Both pieces included three carefully-parsed paragraphs outlining an alternative—and I know they were carefully parsed because those three paragraphs are nearly identical in each article.

But two op-eds—which dedicated more time bashing Obamacare than explaining what should replace it—do not a “plan” make. For instance, the op-eds propose a new refundable credit for health coverage, and says, “we should set the tax preference for employer-sponsored insurance on a glide path to ensure that it will equal the level of the credits at the end of the decade.” But that language doesn’t begin to explain how this quite novel approach to the tax treatment of health care would work in practice. And it also doesn’t explain why the Chairman of the Ways and Means Committee, which happens to have jurisdiction over tax policy, decided not to endorse it.

The questions ask themselves: Where’s the Rubio-Ryan plan? Did Rubio decide to go off on his own? If so, why exactly did Paul Ryan decide not to endorse the Rubio plan?

The next Republican debate is a week from Wednesday. Perhaps we’ll find out then. (For more from the author of “Why Did Paul Ryan and Marco Rubio Promise an Alternative Plan to Obamacare but Never Deliver?” please click HERE)

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Topping Turmoil: Big Pizza Company Fights ObamaCare Menu Mandate

dominos_hoboken_15The pizza lobby is mounting a double-extra-large battle against looming government regulations that would force their franchises to post a dizzying array of calorie counts on their menus.

Under ObamaCare, a Food and Drug Administration rule would require restaurants and food retail shops with over 20 locations, like pizza delivery chains, to post in-store menus displaying nutritional information.

Pizza chains argue this would be particularly tough for them, and take extraordinarily large menu boards. Domino’s Pizza claims it offers 34 million different pie combinations; Pizza Hut boasted last year it can make 2 billion different pizzas. While the FDA has suggested restaurants can institute calorie “ranges” for each pizza, one Domino’s franchise owner in Missouri guessed it would cost him $5,000 to build the boards — though over 90 percent of Domino’s business comes in over the phone or online, and so most customers never see the in-store board.

“You can’t possibly fit all the iterations of pizza on a typical menu board like you can for burgers, for example,” Lynn Liddle, executive vice president of communications for Domino’s, said in testimony before Congress in June. According to this Domino’s video, menu boards are used in less than 1.5 percent of their total orders each day. She told FoxNews.com Thursday that Domino’s has been providing nutritional information voluntarily online for 10 years.

“I think what we’re doing is the right thing for our consumers and for the small business owners, so they do not have to pay for a big static menu board that won’t help the consumer anyway,” said Liddle, who also represents the American Pizza Community — a consortium including Pizza Hut, Little Caesars and Papa John’s now lobbying to relax the rules under proposed legislation. (Read more from “Topping Turmoil: Big Pizza Company Fights ObamaCare Menu Mandate” HERE)

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More Than Two-Thirds of Obamacare Enrollees Unsatisfied With Coverage

Obamacare has offered insurance to millions of people, but they’re unhappy with the coverage they’re getting and are particularly upset about the costs, according to a survey released Monday that suggests the health care law continues to struggle to win over Americans.

Just 30 percent of customers on Obamacare’s exchanges were satisfied with their coverage, the health care research arm of the Deloitte consulting firm said.

Only a quarter of Obamacare customers in the survey were confident that they could get care when they needed it, and just 16 percent felt “financially prepared” to handle future health care costs, Deloitte said.

“Those are not high numbers,” said Paul Lambdin, a director for Deloitte’s work on insurance exchanges and retail practices.

Analysts said it is hard to tell at this point whether dissatisfaction is the inevitable byproduct of a new customer base or whether the law itself has structural problems. (Read more from “More Than Two-Thirds of Obamacare Enrollees Unsatisfied With Coverage” HERE)

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Following in Obama’s Footsteps: Governor Using Exec Order to Impose Obamacare Expansion on Alaska

Alaska is about to hop aboard the Obamacare expansion train even as it’s hurtling off the rails.

Alaska Gov. Bill Walker, an independent, has given 45 days’ notice to the Alaska Legislature that he will expand Medicaid under Obamacare with or without their support.

With Obamacare expansion enrollment far exceeding projections in other states, Alaska would be the 30th state to put working-age adults with no kids and no disabilities on Medicaid.

The program comes with a promise of new federal funding, but states will be on the hook for 5 percent of benefit costs by 2017 and 10 percent by 2020.

Obamacare expansion promotional materials from Walker’s administration emphasize the benefit of bringing new federal welfare dollars to the state. (Read more from “Alaska Governor Plans to Impose Obamacare Expansion on His State” HERE)

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6.6 Million People Just Learned the Hard Way How Much It Costs to Be Uninsured Under Obamacare

The Patient Protection and Affordable Care Act, known also as Obamacare, was signed into law by President Obama in March 2010, but it didn’t go into effect until Jan. 1, 2014. Despite the more than three years for insurers, states, the federal government, physicians, and consumers to prepare for the coming overhaul of our healthcare system, there were still plenty of hiccups (and challenges) when the calendar changed over.

Pretty much from the get-go of the first enrollment period there were technical issues with the online marketplace servers and software that prevented consumers from completing the enrollment process. But even bigger challenges would be fought at the legal level with the constitutionality of the individual mandate penalties coming into question in 2012, and more recently the challenge to the federal government’s ability to divvy out subsidies to enrollees on behalf of 34 states. The defense proved victorious in both challenges, which made it to the Supreme Court . . .

The individual mandate is the actionable component of Obamacare that requires individuals to purchase health insurance or face a penalty. The penalty in 2014, the first year Obamacare was fully in effect, was the greater of $95 or 1% of your modified adjusted gross income (MAGI). This year the penalty for not having insurance, which is officially known as the Individual Shared Responsibility Payment (ISRP), jumps to the greater of $325 or 2% of your MAGI. In 2016, another sizable spike to the greater of $695 or 2.5% of your MAGI. In 2017 and beyond the penalties rise on par with the level of inflation.

Why is there even an individual mandate penalty in the first place, you wonder? When Obamacare became the law of the land, one of the stipulations was that insurers could no longer pick and choose who they wanted to become members. In other words, people with preexisting conditions couldn’t be turned away. This meant that through the process of adverse selection some sick and elderly consumers who are costly to insurers would be quick to enroll, while healthier young adults, which are needed to help offset the high costs of the elderly and terminally ill, would possibly shun being forced to buy insurance. The individual mandate penalty was put into place in order to encourage younger adults to enroll, otherwise they’d have to pay a penalty come tax time. . .

Just how many people were required to pay the penalty in 2014? According to a report released by National Taxpayer Advocate via the IRS, some 6.6 million people owed an ISRP due to not having health insurance. What may have come as a big surprise to many of those who owed was the fact that the penalty was the greater of $95 or 1% of their MAGI, not the lesser. Thus, the average penalty paid by these 6.6 million people was double the lower-bound figure, $190, since their MAGI often came into play when calculating their penalties. (Read more from “6.6 Million People Just Learned the Hard Way How Much It Costs to Be Uninsured Under Obamacare” HERE)

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