Stanley Feld M.D.,FACP,MACE
These days there is very little news in the traditional mainstream media about Obamacare.
The average person thinks everything is fine. President Obama has told us over and over again that Obamacare is a great success.
Unfortunately, this is far from the truth as the Obama administration prepares for the 2016 enrollment period.
Open enrollment is supposed to start November I, 2015 and end January 15, 2016 for 2016.
In 2013 and 2014 open enrollment was extended many months because of poor enrollment. I suspect the same will happen during the 2016 enrollment period.
The disastrous web site is still not fixed.
The healthcare insurance industry has increased Obamacare insurance premiums by double digits. The Obamacare deductibles remain in the thousands.
Even with large Obamacare subsidies people making under $50,000 cannot afford the subsidized premiums or deductibles.
Some people are registered through both the health insurance exchanges and Medicaid. This has been recently discovered by the Obama administration.
These people have received the Obamacare cash subsidy and Medicaid coverage. Now the Obama administration expects to be paid by these recipients for the government’s overpayment.
The Obama administration has refused to publish the number of people affected.
None of these issues have appeared in the traditional mainstream media.
The Obama administration continues to publish conflicting figures about how many people are actually enrolled through its federal health insurance exchanges.
The administration needs the healthcare insurance industry to do the administrative services for the health insurance exchanges.
At the onset of enrollment in 2013 healthcare insurance companies did not want sign up to do the administrative services. The companies figured that high-risk people without insurance would sign up for insurance and they would lose money. Obamacare required that the premium would be equal for everyone regardless of the health risk.
Obamacare originally wrote into the law three risk corridor programs that would be activated if necessary to subsidize the healthcare insurance industry against undo risk.
As a result of the healthcare industry’s lack of participation in the federal and state insurance exchanges, the risk corridors were activated.
“The healthcare reform law established three “market stabilization” programs to help insurers weather the first few years of covering a new population with unpredictable healthcare needs. At issue is the risk corridors program.”
I was astonished when I learned of these risk corridors. The corridors encouraged the healthcare insurance industry to participate in providing administrative services for each state and federal exchange at no risk of loss.
It was amazing that the leading Republicans for repeal of Obamacare did not make this clear to the public.
The insurance industry was actually guaranteed a profit because they provided its own profit and lost data. The Obama administration simply accepted its data. The healthcare insurance industry was supposed to receive the subsidy for its loss.
The government’s hope was to provide enough insurance choices to enrollees in the health insurance exchanges so there would be competitive pricing.
Unfortunately for Obamacare it did not work out as planned.
“ The government had planned on releasing risk corridors data in August but waited until October 1, 2015 due to discrepancies in the data.”
I suspect the delay was for political reasons and to provide enough time for the government to present the data in a less negative fashion.
The data shows the Obama administration has short changed the healthcare insurers that participated in Obamacare $2.5 billion dollars promised to them in the safety value risk corridor subsidies.
The Obama administration now is promising those insurance companies that the $2.5 billion dollars to cover the deficiency will be covered with budgeted monies from 2015 and 2016 if possible.
President Obama is now sowing the seeds to blame the nonpayment on Republicans since Republicans control congress.
Republicans thought the health insurance risk corridors were a stupid idea to begin with and predicted failure. Now the Obama administration is trapping the Republicans for not wanting to pay bills that are owed.
Some smaller insurance companies who were seduced into participating in this no risk insurance policy folly are now worried about experiencing “solvency and liquidity problems”.
CMS would not give the number of companies affected. It said the cases are isolated.
“The insurers requested $2.87 billion in payments to cover their losses. The CMS will only reimburse 12.6% of the payment requests, meaning insurers will still be owed more than $2.5 billion.”
“ Names of companies that are owed money were not released.”
Does anyone think the insurance companies are going to sign up for the 2016 enrollment cycle?
Insurance companies do not know how much Obamacare will short- change them for the 2015 subsidies yet.
One can also begin to understand why insurance rates for both government and private insurance are increasing when physician and hospital reimbursement are falling.
The insurance industry feels it has to make up its loss.
Why are the Republicans not saying anything about this to the public?
Why aren’t Republican candidates for President not pointing out this folly?
Why are they letting themselves be set up to be blamed for not wanting to pay the government's bill?
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
Please have a friend subscribe