ObamaCare Update
"I Don't Mind A Parasite. I Object To A Cut-Rate One."

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In case you missed them – here are a few headlines regarding ObamaCare from earlier this month:

*”Barney Frank: They “Just Lied to People” About ObamaCare

That’s right – Barney Frank, Democrat and former long-term congressman FINALLY made this admission in a recent interview with the Huffington Post:

“The rollout was so bad, and I was appalled -- I don't understand how the president could have sat there and not been checking on that on a weekly basis." (See the USATODAY.com link below for more on this lack of oversight.) "But frankly, he should never have said as much as he did, that if you like your current health care plan, you can keep it. That wasn't true. And you shouldn't lie to people"

See: http://www.weeklystandard.com/blogs/barney-frank-obama-just-lied-people-about-obamacare_800489.html

*”Poll: Obamacare ‘More Unpopular Than Ever’”

As reported by The Weekly Standard:

“The Kaiser Family Foundation's latest poll on public opinion of the Affordable Care Act, aka Obamacare, has found the law is more unpopular with Americans than ever before. Kaiser found in its July survey that 53 percent of Americans say they have an unfavorable opinion of the law, with just 37 percent saying they have a favorable opinion. That's among the lowest favorability rating Obamacare has ever received, and it's the highest unfavorability rating since Kaiser first began its monthly poll of Obamacare in April 2010.”

See: http://www.weeklystandard.com/blogs/poll-obamacare-more-unpopular-ever_800453.html

And why is ObamaCare so unpopular? Two of the reasons are:


As reported by USATODAY.com:

“A new report finds that the government did not plan well or properly provide oversight for the new federal health exchange launched last October. (Editorial Note: DUHHHHHHHHHHHHHHHHH!)
And the website faces new headaches for open enrollment in the fall if officials don't control spending, increase oversight and ensure back-end issues are properly fixed.

The Department of Health and Human Services "needs a mitigation plan to address these issues," wrote the report author, William Woods, director of acquisitions and sourcing management for the Government Accountability Office. Unless the government "improves contract management and adheres to a structured governance process, significant risks remain that upcoming enrollment periods could encounter challenges."

A new contract went to Accenture Federal Services to take over the site in January after the original contractor, CGI Federal, was essentially dropped after the poor launch. But Accenture's original contract for $91 million has increased to more than $175 million, and some of the back-end issues on the site are still not working, according to the report, which will be presented in a House hearing Thursday.

When HealthCare.gov went live, consumers shopping for private insurance through the site faced long wait times, frozen pages and a broken log-in system. The government had the site working properly for consumers by the end of November but still faced problems on the back end with insurer and financial transactions even after open enrollment ended in the spring.”

Here are just a few of the flaws pointed out in the report:

“• Contracting officials had to finalize new contracts without knowing exactly what the requirements would be, leading to more money spent than was originally expected;

• Contracts with unusual amounts of flexibility because of changing requirements should have had more oversight to prevent overspending;

• The federal marketplace was originally expected to cost $30 million, but increased to $85 million;

• The site was launched without verification that it met performance requirements;

• Because of inconsistent contractor oversight, there was confusion about who had the authority to approve contractor extensions. $40 million worth of work, though it may have been necessary, was improperly approved.

For the entire article, see: http://www.usatoday.com/story/news/politics/2014/07/30/gao-report-obamacare-rollout/13368543/

The above just goes to show you that Big Government equals Big Blunders and Big Wasteful Spending


- - As reported by the Miami Herald:

“Floridians who buy health insurance on the individual market for next year will face an average increase of 13.2 percent in their monthly premiums, according to rate proposals unveiled Monday by the state’s Office of Insurance Regulation.

The rate proposals affect all Affordable Care Act-compliant health plans on the individual market, whether they’re sold through the federally-run exchange or not. Small and large group health plans typically offered by employers were not included in the data released by the state..”

See: http://www.miamiherald.com/2014/08/04/4271376/proposed-prices-for-health-plans.html

--And Florida is only one example. In his article titled: “If You Like Your Obamacare Plan, It'll Cost You,” Sam Baker of the National Journal breaks down IN DETAIL why some people will see huge premium spikes:

“People who decide to stick with the coverage they've already gotten through Obamacare, rather than switching plans, are at risk for some of the biggest premium spikes anywhere in the system. And some people won't even know their costs went up until they get a bill from the IRS.

Insurance plans generally raise their premiums every year, but those costs are just the tip of the iceberg for millions of Obamacare enrollees. A series of other, largely invisible factors will also push up many consumers' premiums.

In some cases, even if an insurance company doesn't raise its rates at all, its customers could still end up owing thousands of dollars more for their premiums. It's all a byproduct of complicated technical changes triggered, ironically enough, by the law's success at bolstering competition among insurers.

Many consumers will need to switch plans in order to keep their costs steady, but health care experts question how many people will do that. Switching plans can entail changing your doctor and adjusting to new out-of-pocket costs, never mind the fresh trek through HealthCare.gov. The White House has already set up an auto-renewal process, making it easier to stick with the status quo.”

And with so many behind-the-scenes factors at play, most people might not even know that they need to go back through HealthCare.gov just to keep the deal they already have.

"A lot of people aren't going to understand this," said Susan Pantely, an actuary at the Milliman consulting firm.

Hidden cost of doing nothing

Let's break down the complex factors that make inertia so expensive for Obamacare enrollees.

First, there are the standard premium increases insurers seek from year to year. The lowest-cost plans in each state's marketplace were generally the ones that attracted the most customers in 2014. But in many cases, they're also the plans seeking above-average rate hikes.

"The prices of the lowest-cost [plans] tend to be going up more," said Caroline Pearson, vice president at the consulting firm Avalere Health. "Most people, if re-enrolled, will be enrolled in a plan that has a premium increase."

But that's only part of the reason inertia is so expensive for Obamacare enrollees. The vast majority of enrollees don't pay the full cost of their premiums—85 percent are getting financial help from the government. And many of those consumers will find that their subsidies don't go as far next year, even for the same plans.

The size of each person's subsidy is tied to a "benchmark" plan. Poorer consumers only have to spend a certain percentage of their income for that plan; the government pays the rest of the premium. If you choose a more expensive policy, you have to pay the difference on your own.

This year, about 3.4 million people picked the benchmark plan or went one option cheaper. But as those plans raise their rates and new options come to the market, they'll often lose their benchmark status to cheaper competitors—and their customers will find themselves on the hook for a bigger share of their premiums.

"I would expect that probably the majority of 2014 enrollees are going to be impacted pretty substantially," said Milliman analyst Paul Houchens.

Let's say your income is at about 150 percent of the poverty line—roughly $17,000 per year. The law says you don't have to pay more than 4 percent of your income for the benchmark plan in your area. You chose that plan this year, and you're getting a pretty generous subsidy.

Your plan wants to raise its rates by 5 percent next year—not great, but not the end of the world when you're only paying about $50 per month out of your pocket. You like the plan, the premium increase doesn't seem like a lot, and HealthCare.gov was a headache last time, so you just auto-renew.

Unbeknownst to you, though, new insurers have started offering cheaper plans in your area. Your plan is no longer the benchmark plan; a cheaper one is. So now your subsidy is based on the cost of that plan, not the one you have. This means you're on the hook not only for every dollar of your plan's 5 percent premium increase, but also for every dollar of the difference in price between your plan and the new benchmark plan.

These technical changes in subsidies could turn a 5 percent premium increase into a spike of 30 to 100 percent in the net costs for low-income consumers, according to a recent Milliam analysis.

There's already evidence this is happening: In an Avalere Health survey of nine states, the benchmark plan will change next year in six of them. The lowest-cost plan will change in seven of the nine states.

'The totally crazy part'

As cheaper plans come into the marketplace, millions of consumers will see the cost of keeping their plan rise. But they might not know it.

HealthCare.gov isn't able to automatically recalculate the subsidies existing consumers are eligible for. So, while the dollar value of your financial assistance drops, you can only find out that's happening by going back into the system and asking for a redetermination as part of the shopping process.

Consumers who auto-renew their policies will get the same dollar value of subsidies they got last year—even though changes in the marketplace all but guarantee that will no longer be the right subsidy amount for millions of people.

"That's the totally crazy part," Pearson said. "They're basically going to send them what they know to be the wrong subsidy."

The IRS will eventually figure out how much financial assistance you should have received, and will reconcile the difference on your taxes. If you should have gotten a bigger subsidy, the government will issue you a tax credit. If your subsidy was too big, which would be the case if you keep your plan and lower-cost options come to the market, you'll owe the IRS money.

Milliman has this example: Your plan doesn't change its premiums at all, and your income isn't changing. You auto-renew and keep receiving the same subsidy. But because of changes in the benchmark plan, you shouldn't actually be receiving the same subsidy. Although it seems to you like nothing changed—not your premium, not your income—you'll owe the IRS between $300 and $2,500 when you pay your taxes, because your subsidy should have been smaller. Unless and until HealthCare.gov is able to do this math automatically, it's up to you to figure that out.

"We get into a very dangerous situation if we just tell everybody they can just auto-enroll," Houchens said.

It pays to shop

Again, all of this is avoidable. These are the risks of auto-renewal. Anyone who goes back in to HealthCare.gov to get a new eligibility determination will see their updated subsidy as well as the current list of available plans.

If you've been on the benchmark plan and you switch to the new benchmark plan, your costs will stay exactly the same, because the subsidies work by capping how much of your income you'll have to spend for that plan. Or maybe consumers will decide it's worth the extra money to stick with the plan they have, but will get the advantage of knowing about those costs up front, rather than being hit with a tax bill.

Consumers are "largely protected if they're willing to switch plans," said Larry Levitt, vice president of special initiatives at the Kaiser Family Foundation.

But will they be willing to switch?

Experience with Medicare's prescription-drug benefit suggests not. Once seniors pick a drug plan, they're unlikely to reenter the marketplace and shop around again, even if there's a plan that might work better for them, Levitt said. The same is true of the insurance exchange that serves federal employees—people rarely switch.

"There are lots of reasons to believe inertia will take hold here and people won't switch," Levitt said. "Betting on inertia is certainly a reasonable bet here."

But Levitt also said the Obamacare exchanges might be different. Most of the people who signed up for coverage this year were previously uninsured, so they probably haven't gotten too attached to a specific doctor yet. They likely wouldn't feel like they're losing a lot by switching to a cheaper policy, Levitt said. And the way people shopped this year indicated that they're especially price-conscious.

"I think people may shop around more than they have in the past," he said.

Complicating all of this is the auto-renewal process the administration has set up. The administration is in a tough spot on auto-renewal—it wants to keep as many of this year's 8 million sign-ups as possible, but it also wants to keep real-world premium increases in check.

"It's a really tough balance. You don't want people to end up uninsured, so you want to make renewal as easy as possible, but (you) also want to make sure people understand they have other options," Levitt said. "Auto-renewing people is not a crazy idea, but how well that works will depend a lot on the communication that goes out to people."

See: http://www.nationaljournal.com/health-care/if-you-like-your-obamacare-plan-it-ll-cost-you-20140805

Confused by the above (if you managed to make your way through the "weeds")? Join the club. But one way or another, ObamaCare is here to stay because the Democrats have bastardized our health care system to such an extent that only massive “fixes” will provide relief to the vast majority of Americans. Our best hope for change is to throw out the bums who foisted this system on us in the fist place. Smart Dems in contested races (especially in the Senate) realize this. That's why they don't want Obama campaigning for them and why they are running as far away from ObamaCare as they possibly can.

We as a country need to get back on the path of health care sanity.

*First, we need to elect a Republican majority in the Senate this November.

*Then, we need to put a Republican in the White House in 2016.

The former is looking more and more likely as we approach the November election. The latter – while touted as “impossible” by Democrats – is definitely within the realm of possibility. If you’ve followed the news over the past month, Hillary is NOT “inevitable” and other - much politically weaker - Dems are already positioning to make a 2016 run. I’ve said it before and I’ll say it again: If Hillary is not the nominee, all bets are off. If the GOP fields a “mainstream candidate” that energizes their base and is palatable to independent, non-affiliated voters, they’ll have as good a chance as any of taking the White House. The anti-Democrat sentiment in this country is running very high, and with the way the Obama administration is handling foreign and domestic affairs, I only see this sentiment increasing over the next two years.

ObamaCare continues to do with work for the GOP, as its effects directly impact American voters more significantly than any esoteric political philosophy can. And by all current measures, there are substantially more of us negatively affected even now by ObamaCare than have been helped by the program.

Given this administration's track record, I only see the negative impact worsening over the next few years - which would be very good news for Republicans.

Latest Activity: Aug 13, 2014 at 3:17 PM

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