Jan 12, 2016

CMS Scrambles To Comfort Insurers While Millions Struggle Under Obamacare

Post by Derek Yale

Arlington, VA — Yesterday the Centers for Medicare and Medicaid Services Acting Administrator Andy Slavitt spoke to JP Morgan’s health care conference in an attempt to quell industry investors’ concerns over the increasingly unstable Obamacare marketplaces.

Slavitt’s visit comes in light of the insurance industry’s obvious worries about the wavering exchanges. In November, UnitedHealthcare — the nation’s largest insurance provider — announced that the company is considering pulling out of the marketplaces in 2017. Just last week, Humana, another major insurance company, publicly disclosed its losses due to the failing markets.

Freedom Partners Senior Policy Adviser Nathan Nascimento issued the following statement: 

“The Obama administration is scrambling to reassure big insurers and investors they’ll do whatever it takes to protect their crony interests while millions of Americans continue to struggle under Obamacare’s rising costs and crushing mandates. This administration’s priorities speak for themselves.”

Andy Slavitt Is Spending The Week Convincing Investors Obamacare Isn’t Failing

CMS Acting Administrator Andy Slavitt Will Visit JP Morgan To Discuss “Exchange Stability.” “Officials were pleased with the strong figures, which came only days before Acting CMS Administrator Andy Slavitt was slated to speak at JP Morgan’s health care conference during which he was expected to discuss ways CMS could improve exchange market stability.” (“Coverage Sign-Ups Pass 11.3M, Slavitt To Talk Exchange Stability At JP Morgan Meeting,” Inside Health Policy, 1/7/16)

Slavitt “Touted” His Speech. “In a call with reporters, Slavitt also touted his upcoming speech at the J.P. Morgan health care industry conference in San Francisco Jan. 11, where he plans to highlight new improvements to marketplace stability and ways HHS will enforce exchange rules to make them more successful. That may include new approaches to special enrollment periods to cut down on fraud, Slavitt suggested. CMS is also seeking comments on ways to improve special enrollment periods as part of its rulemaking process.” (“Coverage Sign-Ups Pass 11.3M, Slavitt To Talk Exchange Stability At JP Morgan Meeting,” Inside Health Policy, 1/7/16)

Insurance Companies Aren’t Buying Slavitt’s Pitch — They’re Worried About The Failing Exchanges

CNBC: “‘Big’ Bad Day For Obamacare As UnitedHealth Considers Exit.” “On Thursday, [Obamacare] got a very loud warning shot across its bow. Leading insurance company UnitedHealth said on Thursday that it expects to take big losses on its Obamacare health plans, and it’s pulling back on marketing 2016 plans. The insurer revealed it may exit the exchanges that sell those plans in 2017 because of fears that it won’t be able to make money.” (Dan Mangan, “‘Big’ bad day for Obamacare as UnitedHealth considers exit,” CNBC, 11/19/15)

The Hill: “Shockwaves” Sent Through Industry After United Announcement. “UnitedHealthcare’s warning sent new shockwaves across the healthcare sector after weeks of mounting anxiety among private insurers whose participation in the exchanges is critical to the viability of the president’s signature law.” (Sarah Ferris, “New ObamaCare angst as top insurer threatens to bail,” The Hill, 11/20/15)

United Announcement “Underscores Financial Challenges Facing Insurers.” “Obamacare observers said that UnitedHealth’s announcement underscores financial challenges facing insurers that sell coverage on Affordable Care Act marketplaces, challenges that could lead to less choice and higher prices for exchange customers if UnitedHealth bolts the exchanges, and if other insurers follow suit.” (Dan Mangan, “‘Big’ bad day for Obamacare as UnitedHealth considers exit,”CNBC, 11/19/15)

United Healthcare CEO: “We Cannot Sustain These Losses.” “’We cannot sustain these losses,’ said UnitedHealth Chief Executive Stephen Hemsley. ‘We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.’” (Caroline Humor, “UnitedHealth may exit Obamacare individual exchanges,” Reuters, 11/19/15)

Humana: We’re Also Losing Money On Obamacare Market Plans. “Humana will lose money on its 2016 individual market health plans, and the health insurer expects up to 300,000 will drop their coverage by the end of this year, according to a Securities and Exchange Commission filing released late Friday.It marks the second investor-owned insurer to publicly disclose the problems it is having with the Affordable Care Act’s insurance markets.” (Bob Herman, “Humana expects ACA membership to deteriorate,” Modern Healthcare, 1/8/16)

The Truth Is: Systemic ACA Failures Can No Longer Be Ignored

United’s Announcement “Came Amid A Spate Of Tough News For Obamacare.” “[ACA failures have] included the planned shuttering of what will be more than half of the new co-ops created to sell insurance on the exchanges, the government’s announcement that insurers will receive just a small fraction of the money they could have expected under a financial risk protection program, and stories detailing how rising premium prices and deductibles are causing consumers to question whether to buy exchange-sold plans.” (Dan Mangan, “‘Big’ bad day for Obamacare as UnitedHealth considers exit,” CNBC, 11/19/15)

Wall Street Journal: “Health Insurance Companies Seek Big Rate Increases For 2016.” “Several regulators around the country…have approved all or most of the big premium increases sought by the largest health plans in their states for the new sign-up season that begins Nov. 1.” (Louise Radnofsky and Stephanie Armour “Insurers Win Big Health-Rate Increases,” Wall Street Journal, 8/27/15)

New York Times: “In Many Obamacare Markets, [Health Care Plan] Renewal Is Not An Option.” “There are 499 markets for Obamacare plans in the United States. In 89 of them, the insurance company that offered this year’s best deal in the ‘silver’ category will not be returning for 2016….Most of those exits are a result of insurance co-op plans that failed. A few exits came as insurers that are still operating elsewhere decided to leave particular markets. People in these canceled plans can’t simply renew their current policy if they like it — they have to go back into the marketplace and find a new insurer.” (Amanda Cox and Margot Sanger-Katz, “In Many Obamacare Markets, Renewal Is Not An Option,” The New York Times, 11/18/15)