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ObamaCare's Failures Continue To Pile Up

- August 16, 2016

Aetna Is The Latest Insurer To Withdraw From ObamaCare Exchanges Announcing Withdrawals In 11 Of The 15 States It Operates In. "Aetna Inc. will withdraw from 11 of the 15 states where it currently offers plans through the Affordable Care Act exchanges, becoming the latest of the major national health insurers to pull back sharply from the law's signature marketplaces after steep financial losses." (Anna Wilde Mathews, "Aetna To Drop Some Affordable Care Act Markets," The Wall Street Journal, 8/15/16)

  • Aetna Will Reduce Counties It Offers Exchange Plans On From 778 To 242. "Aetna will reduce the number of counties where it sells exchange plans next year to 242 from 778, a dramatic turn that came a few weeks after the insurer said it expected steep losses for the year and would reconsider its participation in the market, which it had previously called an important opportunity." (Anna Wilde Mathews, "Aetna To Drop Some Affordable Care Act Markets," The Wall Street Journal, 8/15/16)

Aetna's Pull Back Comes After 2 Other Major ObamaCare Providers Announced They Would Stop Offering Plans

"Aetna's Move Comes After UnitedHealth Group Inc. And Humana Inc. Already Unveiled Major Reductions In Their ACA-Plan Offerings, And As More Nonprofit Cooperative Insurers Have Said They Will Fold." (Anna Wilde Mathews, "Aetna To Drop Some Affordable Care Act Markets," The Wall Street Journal, 8/15/16)

UnitedHealthcare Announced That It Would Stop Offering Plans Through The ObamaCare Exchange In 30 States. "The company announced last month it planned to exit Obamacare exchanges in 30 states, including Florida. A UnitedHealthcare spokeswoman confirmed this week it will send out its required 180-day advanced withdrawal notice to policyholders in June. 'Individuals will continue to have access to their health benefits until the end of 2016,' said UnitedHealthcare spokeswoman Maria Gordon Shydlo. 'This decision will not impact our commercial, Medicare and Medicaid businesses in Florida.'"(Frank Gluck, "UnitedHealthcare Leaving Florida Obamacare Exchange," NewsPress.Com, 5/27/16)

Humana Announced Earlier This Year That It Will Stop Offering Plans In 8 Different States. "The company has also notified relevant DOIs of its intent to discontinue certain on-exchange Individual products across a number of geographies for 2017 and exit substantially all Affordable Care Act (ACA) compliant off-exchange Individual markets. As a result, the company's 2017 geographic presence for its Individual offerings is expected to cover no more than 156 counties across 11 states, down from 1,351 counties across 19 states in 2016. Humana expects 2017 premiums associated with ACA-compliant offerings in the range of $750 million to $1 billion versus approximately $3.4 billion projected for FY16. The rate review and approval processes with the related states are ongoing." (Humana Increases Earnings Guidance, Humana, 7/21/16)

AS INSURERS PULL OUT OF THE OBAMACARE EXCHANGES, PREMIUMS ARE SKYROCKETING

Insurers Leaving ObamaCare Exchanges Reduces Competition Which Leads To Increased Premiums. "Americans who were enrolled in the Aetna plans and who can no longer receive it will need to find a new plan for next year, and some will need to find new doctors and hospitals. Depending on where they live, some people will have few health insurance options to choose from, making the marketplaces less competitive when it comes to pricing premiums and different health care benefits. Rate increases for some premiums are already expected to be in the double-digits next year." (Kimberly Loenard, "Trouble for Obamacare: Aetna Reduces Exchange Presence," U.S. News, 8/15/16)

The Associated Press Headline: "Significant Premium Hikes Expected Under Obama Health Law" For 2017. (Ricardo Alonso-Zaldivar and Tom Murphy, "Significant Premium Hikes Expected Under Obama Health Law," The Associated Press , 4/28/16)

  • "Insurers Say The Law's Coverage Has Been A Financial Drain" Setting The Stage For Double Digit Premium Hikes. "Insurers say the law's coverage has been a financial drain for many of them, and they're setting the stage for 2017 hikes that in some cases could reach well into the double digits." (Ricardo Alonso-Zaldivar and Tom Murphy, "Significant Premium Hikes Expected Under Obama Health Law," The Associated Press , 4/28/16)

Former Obama CMS Official Michael Adelberg: "It Only Makes Sense That Most Exchange Insurers Will Request Significant Rate Increases For 2017." "'Given that most carriers have experienced losses in the exchanges, often large losses, it only makes sense that most exchange insurers will request significant rate increases for 2017,' said Michael Adelberg, a former CMS official under President Obama and now a consultant at FaegreBD." (Peter Sullivan, "Insurers Warn Losses From Obamacare Are Unsustainable," The Hill, 4/15/16)

Proposed Premium Hikes Average Double Digit Increases In Many States And Roughly 24% Nationwide

According To Independent Analyst Charles Gaba, Proposed ObamaCare Hikes Average 24% "Average rate request of 24 percent this year. That's according to findings from independent analyst Charles Gaba, who has crunched the numbers for insurers participating in the ACA exchanges in all 50 states, including a handful of recent updates. For instance, Cigna and Humana recently revised their rate requests in Tennessee, and the new filings are dramatically higher. Cigna is now asking for a 46 percent average increase, up from 23 percent, and Humana is requesting a 44 percent increase, up from 29 percent, The Tennessean reported on Friday." (Dan Diamond, "Obamacare Hikes: Average Rate Request Of 24 Percent," Politico, 8/15/16)

Blue Cross Blue Shield Of Alabama Is Seeking An Average Rate Increase Of 39%. "Blue Cross Blue Shield of Alabama is seeking an average rate increase of 39 percent on individual plans offered through the Obamacare marketplace, according to the Centers for Medicare & Medicaid Services. The proposed rate hikes will affect more than 160,000 people in Alabama who purchase insurance through the federal exchange, or about 5 percent of Blue Cross membership." (Amy Yurkanin, "Blue Cross proposes rate hike of nearly 40 percent on some Obamacare plans," AL.com, 8/8/16)

The Weighted Average Proposed Premium Increases For Iowa Insurers In 2017 Is Roughly 32 Percent. "The average weighted rate hike tops 56% in Tennessee. In Oklahoma it's 53%, and Iowa 32%." (Editorial, "ObamaCare Rate Shocks Are Here, And They're Getting Worse," Investor's Business Daily, 06/15/16)

In Pennsylvania, "The Statewide Average Rate Increase Sought By Health Insurers Was 23.6 Percent, According To The State Department of Insurance." (Kris B. Mamula, "Insurers Seek Hefty Rate Increases For ACA Coverage," The Pittsburgh Post-Gazette , 05/25/16)

For 2017, "The Average Weighted Premium-Hike Request Appears To Be 17.9%..." In Virginia. "Overall, the average weighted premium-hike request appears to be 17.9%, says Charles Gaba of ACASignups. The rate increases may turn out to be quite small for those who qualify for subsidies. The average premium hike for the subsidized population was just 4% in 2016, the Obama administration said on Tuesday." (Jed Graham, "Virginia Insurers Seek 18% Obamacare Premium Hike," Investor's Business Daily, 4/13/16)

INSURER CLOSURES COME ON THE HEALS OF RECENT CO-OP FAILURES

16 Out Of The 23 ObamaCare Co-Ops Have Failed With 3 Announcing Failure In July

"The Failure Of 16 Out Of 23 Co-Ops Within Three Years Confirms That Government Experts Should Not Impose An 'Optimal' Form Of Healthcare Organization From On High." "The failure of 16 out of 23 co-ops within three years confirms that government experts should not impose an "optimal" form of healthcare organization from on high. ACA programs that sounded great on paper have failed in real life. Allowing healthcare policy to evolve through the market is more likely to result in workable, efficient solutions than any government plan." (Joel M. Zinberg, "The Continuing Failure Of Centrally Planned Health Care," The American Enterprise Institute, 8/1/16)

Illinois, Oregon And Connecticut Have Been The Latest Co-Ops To Fail

In July 2016, Illinois, Oregon And Connecticut Co-Ops All Failed. "In July alone, three co-ops, HealthyCt in Connecticut, Community Care of Oregon, and Land of Lincoln in Illinois announced they are closing up shop. They join 13 other failed co-ops out of the original 23 that were a centerpiece of the Affordable Care Act's vision for the future of healthcare organization - an unrealistic vision based on wishful thinking and sabotaged by the ACA itself." (Joel M. Zinberg, "The Continuing Failure Of Centrally Planned Health Care," The American Enterprise Institute, 8/1/16)

Illinois' Obamacare Co-Op Announced Its Failure. "An Illinois health insurance co-op with 49,000 policyholders in the state has become the latest casualty among a dwindling group of nonprofit alternative insurers set up under the Affordable Care Act. Illinois regulators took steps Tuesday to shut down Land of Lincoln Health, a 3-year-old startup that lost $90 million in 2015 and more than $17 million through May 31." (Karla K. Johnson, "Illinois Move To Shut Down Failing Obamacare Health Insurance Co-Op," The Associated Press, 7/12/16)

Oregon's Second Co-Op Announced It Was Closing Due To Financial Struggles. "Oregon regulators are moving to take control of a federally funded health insurer, Oregon's Health CO-OP, saying its finances put the well-being of 20,000 Oregon consumers at risk. The state is placing the nonprofit insurer into receivership and will dissolve it. Current members are encouraged to find other plans by July 31, when the CO-OP's plans expire." (Nick Budnick, "Oregon To Take Over Troubled Nonprofit Health Insurer As 20,000 Must Change Plans," Portland Tribune , 7/8/16)

Connecticut's ObamaCare Co-Op Also Announced Failure Due To Financial Instability. "Connecticut's financially 'unstable' Obamacare health-insurance co-op was placed under state supervision on Tuesday, as regulators said 40,000 people covered by the company will ultimately have to find new plans for the coming year. HealthyCT is the 14th of 23 original Obamacare co-ops to fail since they began selling health plans on government-run Affordable Care Act insurance exchanges. Several of the other remaining co-ops, at least, are believed to be on shaky financial ground. Until last week, the nonprofit HealthyCT had "adequate capital and sustainable liquidity" - but that fell apart Thursday with a federal requirement that hit HealthyCT with a $13.4 million bill, according to the Connecticut Insurance Department." (Dan Mangan, "'Financially Unstable' Connecticut Obamacare Co-Op Now Under State Supervision," CNBC, 07/05/16)


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