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Editor/Founder: Bill Smith, Ph.D. [aka: OzarkGuru & 2010 AFP National Blogger of the Year]
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One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors. -- Plato (429-347 BC)

Monday, October 26, 2015

Obamacare Consequences: 9th Co-op Insurer Collapses; Premiums Up 49% In Minnesota, 22% In Utah

Today in Washington, D.C. - Oct. 26, 2015:
The Justice Department on Friday notified members of Congress that it is closing its two-year investigation into whether the IRS improperly targeted the tea party and other conservative groups. There will be no charges against former IRS official Lois Lerner or anyone else at the agency, the Justice Department said in a letter.

The probe found "substantial evidence of mismanagement, poor judgment and institutional inertia leading to the belief by many tax-exempt applicants that the IRS targeted them based on their political viewpoints. But poor management is not a crime," Assistant Attorney General Peter Kadzik said in the letter.

DOJ and the IRS both work for President Obama. The decision of the DOJ to close the IRS targeting investigation without a single charge or prosecution is a new low point for the Obama administration. We need accountability in our government, and House Republicans hopefully are not going to let Obama’s cronies off the hook that easily.

The House will reconvene at Noon today but no recorded votes will be considered until 6:30 PM.

The Senate will reconvene at 3 PM today and begin a period of morning business.

At 5:30 PM, the Senate will vote on confirmation of the nomination of Lawrence Vilardo to be United States District Judge for the Western District of New York.

On Tuesday, the Senate will vote on 7 amendments to S. 754, the Cybersecurity Information Sharing Act and then on cloture on the bill.

In The News:
Last week, The AP reported, “A South Carolina health insurer has become the ninth insurance cooperative formed nationwide under the Affordable Care Act to fold. Consumers' Choice Health Insurance Co. said Thursday that it will not sell policies in 2016, a decision that will leave 67,000 individuals and business customers looking for new coverage.

“Ray Farmer, director of the South Carolina Department of Insurance, said Consumers' Choice and state regulators reached a mutual decision to shut down the company's business. He said the company was in a ‘financially hazardous condition.’ ‘I did not have the confidence that this company would be a viable entity throughout the entire year of 2016,’ Farmer said.”

The New York Times surveys the landscape of shuttered co-op insurers, writing, “The grim announcements keep coming, picking up pace in recent weeks. About a third, or eight, alternative health insurers created under President Obama’s health care law to spur competition that might have made coverage less expensive for consumers are shutting down. The three largest are among that number. Only 14 of the so-called cooperatives are still standing, some precariously. The toll of failed co-op insurers . . . has left about 500,000 customers scrambling to find health insurance for next year. A ninth co-op, which served Iowa and Nebraska, closed in February. . . . The failures include co-ops in New York, Colorado, Kentucky and South Carolina.

“The shuttering of these start-ups amounts to what could be a loss of nearly $1 billion in federal loans provided to help them get started. And the cascading series of failures has also led to skepticism about the Obama administration’s commitment to this venture.

“Some policy analysts say they were doomed from the beginning. Republican critics of the health law are seizing upon the issue, and many leaders of the closing co-ops say the government’s actions contributed to their problems. ‘They may have been the kamikaze pilots for health care reform,’ said Mark A. Hall, a health policy professor at Wake Forest University. . . .

“[T]he co-ops’ low prices left them vulnerable to significant losses. Without the necessary financing to keep them afloat, many are crashing. After the Republicans insisted late last year on limiting the ability of the administration to pay for one of the programs to protect the insurers from losses in the early years, administration officials say they had few, if any, options.”

The editors of The Oklahoman discussed the lessons that should have been learned from this fiasco on Friday: “No matter how many times big-government theories fail upon exposure to reality, many liberals insist the solution is to embrace even bigger government. The demise of Obamacare's insurance co-ops provides the latest example.

“Among other things, the Affordable Care Act authorized creation of ‘nonprofit’ co-ops to sell insurance. Supposedly, these would operate free of greedy market influences to provide lower-cost, quality insurance than private insurers.

“Instead, many co-ops are now collapsing. They were created in 23 states; eight have already gone belly up. That's quite an accomplishment since those co-ops were given more than $2 billion in federal loans and granted other advantages to stack the deck in their favor, including the ability to count loans as ‘assets’ on financial reports.

“Yet the anti-business mentality that animated the co-ops' creation also planted the seeds of their destruction. . . .

“While many co-ops achieved significant market share through Obamacare exchanges because their policies were among the lowest priced, those rates were often too low to cover costs. So people were getting ‘cheap’ insurance that lived up to the negative stereotype of that billing

“Initially, co-ops were supposed to receive federal bailouts if they failed to make money. But the bailouts were subsequently reduced by Congress. Co-op officials now blame that change for their financial woes. Yet the real reason for their demise is that they are badly run companies. Why should taxpayers keep such companies afloat? . . .”

The Oklahoman editors concluded, “The challenges associated with co-ops wouldn't disappear under a ‘public option’ plan; they would be magnified and additional problems would be generated to the detriment of the entire health care system. And supposedly ‘low cost’ premiums would be more than offset by the higher tax burden citizens would pay to maintain the scheme.

“The failure of Obamacare's co-ops provides a worthwhile lesson. But only if officials are willing to discard ideological blinders and face reality.”

Meanwhile, the consequences of Obamacare continue to provide the same lesson they have over the last five years: that critics were correct that the unpopular health care law would result in higher premiums and Americans losing insurance policies they liked.

The AP wrote on Friday, “Premiums are expected to rise in many parts of the country as a new sign-up season under President Barack Obama's health care law starts Nov. 1. . . . Independent experts are forecasting bigger premium increases in 2016 than last year, averaging from the high single digits to the teens.”

The AP story asserts, “Most states won't be like Minnesota, where all five carriers selling individual policies on the insurance exchange have posted double-digit hikes, from 14 percent to 49 percent.” But certainly, many will be. And of course, it’s worth recalling that the promise from President Obama and other supporters of this law was that it would lower premiums.

Utah appears to be a state that will be like Minnesota, according to The Salt Lake Tribune. “Medical insurance rates are going up steeply next year for Utahns who get their insurance via brokers and the federal exchange, On average, insurance rates will be 22 percent higher next year, the Legislature's Health Reform Task Force learned Thursday afternoon. . . . The price of an average insurance plan for a 21-year-old will go up 13 percent to nearly $165 per month in Salt Lake County. But a 21-year-old living in Rich County will see a hefty 44 percent price hike to nearly $228 per month. . . .

“The steeply higher prices — and the revelation that insurance companies paid $1.37 in claims for every $1 they took in from premiums last year, the first year of the Affordable Care Act — prompted stark predictions from lawmakers. . . . ‘The individual marketplace is headed to catastrophe,’ said Rep. Dean Sanpei, R-Provo.

“An actuary for the Utah Department of Insurance, Jaak Sundberg, agreed that insurers' profits suffered during the rollout of the Affordable Care Act, also known as Obamacare. The biggest factor, he said, was that insurers had no history to rely on when they set rates back in 2013 and they miscalculated how costly it would be to provide medical care to people who were mostly uninsured before. There was a lot of demand, he said. Sundberg said he expected even higher price hikes, and he expects high price increases again in 2017.”

Along with the now-familiar premium hikes, Obamacare is again showcasing its red tape and bureaucracy, resulting in ever more problems for consumers. The New York Times reports, “Tens of thousands of people with modest incomes are at risk of losing health insurance subsidies in January because they did not file income tax returns, federal officials and consumer advocates say.

“Under federal rules, anyone who receives an insurance subsidy must file a tax return to verify that the person was eligible and received the proper amount of financial assistance based on household income.

“When the federal insurance marketplace opens for the third enrollment season next Sunday, users will see a new question: ‘Did your household file a 2014 tax return and reconcile any premium tax credit you used?’ If the answer to that question is no, consumers risk losing the subsidies they receive to help pay premiums. . . .

“In July, the Internal Revenue Service said 710,000 people who had received subsidies under the Affordable Care Act had not filed tax returns and had not requested more time to do so. If those people do not return to the marketplace this fall, they may be automatically re-enrolled in the same or similar health plans at full price. And when they receive an invoice from the insurance company next year, they may be shocked to see that their subsidies have been cut to zero. . . .

“The I.R.S. also said 760,000 taxpayers had received subsidies and filed returns but had not attached the required form comparing the subsidies paid with the amount they were entitled to receive. Taxpayers describe that document, I.R.S. Form 8962, as daunting. ‘The premium tax credit form, the dreaded 8962, is really hard,’ said Eileen P. Duggan, a piano teacher and freelance writer in Maplewood, Mo., outside St. Louis, who filed the form with her tax return. ‘It’s enough to make you cry, that form. It was almost impossible to figure out.’”

Tags: DOJ, IRS, Case Closed, Obamacare Consequences,  To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. and "Like" Facebook Page - Thanks!
Posted by Bill Smith at 11:30 AM - Post Link


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