The”Affordable Care Act” has never proven to be affordable, despite what we were promised by President Obama. Now, as insurance costs continue to rise, support for ObamaCare is taking yet another hit.
As we head into the enrollment period for next year, “the general consensus today is that the cost of Obamacare will significantly rise for millions of Americans in 2016.” The rise of plan costs will vary from state to state, but plan on those insurance bills taking a bigger hit out of your pocketbook.
All of this is caused by the law’s miscalculated “risk pools.”
The presumption was that young, healthy individuals would enroll in ObamaCare plans, spreading out the risk and balancing the plan’s costs with the older, sicker enrollees. That hasn’t happened. Instead insurers are facing steep losses as their pools of insured are older, sicker, and more expensive than they anticipated.
Here are some highlights, or perhaps lowlights, of the problem:
Pittsburgh-based Highmark Health lost $318 million in the first six months of 2015. Since then they have been scaling back the plans, realizing that the premiums they collected were not covering the sicker patients that came to their plan and were suffering from costly, long-term chronic conditions.
In Texas, Blue Cross and Blue Shield reported that they could no longer afford to cover some 367,000 people. They paid out $400 million more in claims than they collected.
The insurance industry was looking forward to ObamaCare’s individual mandate as a means of swelling their rolls, and thus their bottom lines. Turns out that hasn’t worked out quite like they planned.
Doctors and business owners don’t seem thrilled by ObamaCare these days either.
Physicians have to deal with more paperwork, sicker patients, and perhaps less money for their services from insurance companies.
Businesses are now struggling with how to and who to offer health insurance plans to in this ever changing regulatory landscape created by ObamaCare. This has left some businesses with the reducing their coverage, while others are faced with offering their employees plans that include high deductibles and expensive premiums.
But their may be some good news on the horizon, as the House of Representatives scored a win in court this week that could deal a blow to ObamaCare.
A federal court judge in Washington, D.C., granted the House legal standing to bring a lawsuit against the administration for illegally spending billions of dollars on cost-sharing provisions of the Affordable Care Act without specific congressional authorization.
In the latest in a long series of court cases challenging Obamacare, U.S. District Judge Rosemary Collyer ruled that the House was justified in challenging the administration in spending money never appropriated by Congress to cover the law’s cost-sharing provisions, including reduced deductibles and co-payments for low-income people.
These subsidies are estimated to have cost $3 billion in 2014, “and would amount to $175 billion between 2015 and 2024,” according to the Congressional Budget Office.
Judge Collier, a George W. Bush appointee, wrote that “if the Republicans’ allegations prove to be true, then the House has been “injured in a concrete and particular way” by Health and Human Services Secretary Sylvia Mathews Burwell and Treasury Secretary Jack Lew and that the improper spending can be remedied by the court.”
If you’ll remember back to your American history class from grade school, the so-called “power of the purse” belongs to the legislative branch. The judge noted that, “Neither the President nor his officers can authorize appropriations; the assent of the House of Representatives is required before any public monies are spent.”
Here’s a breakdown of the stakes in this case:
The ruling places in jeopardy an important component of Obamacare essential to enabling federal and state health insurance exchanges to offer reasonably priced insurance to millions of low- and middle-income Americans.
Under the law, the governemnt essentially pays insurance companies to significantly reduce the cost of deductibles and co-payments for many low-income families and individuals. While those people would still be entitled to much larger federal subsidies to defray the cost of their premiums, an adverse ruling by the court would strip away any funding for cost-sharing subsidies, making insurance coverage look more expensive to those lower-income people.
Although this doesn’t have the same potential to kill the entire ObamaCare law that some previous legal challenges had, “it is still significant that a federal court judge has said that [the administration] had passed the normal stopping point of following the law,” according to American Enterprise Institute fellow and health care policy expert, Thomas P. Miller.
At heart, the case challenges something that Republicans, and many outside observers, have said is a perpetual problem with the Obama Administration: executive over-reach. Whether it’s the EPA, immigration, or health care, some argue that the White House has implemented policy as they see fit, regardless of the applicable laws passed by Congress.
Should the House of Representatives prevail in a case that will ultimately be decided by the Supreme Court, it could deal a heavy blow to an already unpopular and expensive law. The challenge gives Americans hope that change is right around the corner.