In 3 Years, His Insurance Premiums Double as Options Decline Under Obamacare

For the past 15 years, Warren Jones has had the same health insurance plan with Blue Cross and Blue Shield of Kansas City.

But over the years, Jones, of Kansas City, Missouri, has watched the coverage offered in his policy “erode” over time.

First, the company got rid of the dental and vision coverage he had.

Then, Jones’ deductible increased—to $2,500—for his plan alone.

But perhaps the most significant change for Jones, a veterinarian, has been the rising cost of his monthly premiums.

In 2014, the year Obamacare took effect, Jones paid $318 in monthly premiums. In 2015, the price went up to $394 per month, then to $491 for 2016.

For 2017, Blue Cross and Blue Shield of Kansas estimates that Jones will pay $716 each month for his premiums—a 45.8 percent increase—according to a letter the insurer sent him.

“You can’t keep doing this because people’s wages don’t increase by that amount,” Jones told The Daily Signal. “Nobody’s wages are increasing, so it’s taking a bigger chunk of the budget.”

“That’s the scariest part,” he continued. “It takes a bigger chunk of the budget, and there’s no relief in sight.”

Like millions of other Americans nationwide, Jones, 55, doesn’t buy his insurance on Obamacare’s state and federal exchanges.

And even if he did, he wouldn’t qualify for the subsidies that lessened the cost of health insurance for 7.3 million Americans who received the tax credits last year, according to regulatory filings.

Instead, the veterinarian falls into an overlooked subset of consumers who pay full price for their health insurance in a time of skyrocketing premiums and deductibles.

They don’t qualify for the tax credits offered under the health care law, and they don’t receive their coverage from employers, since many are self-employed.

“I have seen so many people, self-employed people, many started their own little business and make whatever they do, they have a small business, and they buy their individual policy or buy for their family, and what are their options?” said Beverly Gossage, a broker who has worked in the Kansas City area for 14 years.

“Do they no longer be self-employed? Maneuver taxes to make less than the income threshold to get subsidies?” Gossage continued. “They don’t want to do that, but they’re being pushed to do that. I get this question every day—‘What am I supposed to do?’”

Gossage ran as a Republican for Kansas insurance commissioner in 2014.

Hooked

Over the past few months, insurers have been submitting rates to state regulators for the 2017 benefit year.

In most states, companies are requesting double-digit rate hikes for those selecting plans sold in the individual market both on and off the Obamacare exchanges.

Experts say insurers are playing catch-up after setting rates too low in the early years of the health care law and enrolling a sicker—and costlier—population than anticipated.

“A lot of insurers didn’t understand that the market was going to be skewed in terms of income and health status as severely as it was,” Ed Haislmaier, a senior research fellow in health policy studies at The Heritage Foundation, told The Daily Signal. “Generally, the pool was much worse than anybody expected because of things the administration did that made it worse.”

In response to questions about the growing cost of health insurance for consumers who buy plans sold in the individual market, the Obama administration has said that many Americans are shielded from premium hikes since they buy coverage on the exchanges and receive a subsidy from the government.

Many of the exchange enrollees who qualify for a subsidy may end up paying as little as $75 per month in premiums, Health and Human Services Secretary Sylvia Mathews Burwell said earlier this month.

But that’s not the case for people like Jones and the 10 million others paying full price for their coverage.

“The traditional individual market, which consisted largely of middle-class people who are self-employed, those people are hooked onto this,” Haislmaier said. “It’s kind of a situation where you have an anchor that’s too big, and it’s pulling the boat under.”

Jones is considering selecting a new health insurance plan altogether, but because Missouri hasn’t yet approved rates for 2017, he’s unsure if he’ll even be able to find a cheaper alternative.

“The big thing is the unknown still,” Jones said. “But we know we’re getting inundated with increases in premiums.”

The Missouri man said he is familiar with Blue Cross and Blue Shield of Kansas City, and switching to another carrier may leave him with even less coverage.

“You get a comfort level, and at least you know what you’re getting,” Jones said. “If I had to change insurance, you miss the changes that occur. You don’t know what you’re signing up for.”

‘50-50’

While Missouri residents like Jones are confronting a spike in rates, consumers across the state’s western border also are facing fewer insurers to choose from.

Among the insurers that will continue to sell coverage in Kansas, the number of plans they’re offering both on and off the Obamacare exchange is decreasing.

Many insurers, large and small, have decided to leave the exchanges after losing millions of dollars last year; they either withdrew from states altogether or decreased the number of policies offered.

According to an August study from the Kaiser Family Foundation, six in 10 counties may have a maximum of two insurers on the exchanges next year. Additionally, five states will have one insurer selling coverage on an exchange.

In Kansas, 17 carriers sold policies in the state before Obamacare’s implementation, Gossage said.

This year, the majority of consumers in Kansas will have only two insurers to choose from on the exchange, according to the Kansas Department of Insurance.

Those buying plans sold in the individual market off the exchange have five insurers, according to the state.

It’s a similar landscape in Missouri, where four insurance companies are selling coverage on the exchange, according to regulatory filings.

Off the exchange, consumers can choose from at least seven different companies.

Gossage said that over the last few years, she has seen insurers significantly lessen the number of policies they’re offering.

“What we did is we went from a very vibrant, competitive marketplace with extremely low rates and lots of different plans to pick from to over-overregulation with the type of plan you have and to mandates placed on insurance companies which led to high premiums and fewer carriers in the marketplace,” Gossage said.

While much of the focus has been on the declining number of choices for consumers selecting coverage on Obamacare’s exchanges, those with plans sold in the individual market off the exchanges are hurting, too.

Rochelle Bird, who is self-employed and lives in Overland Park, Kansas, has had a policy through Coventry, a subsidiary of Aetna, for two years.

In that time, her monthly premiums have risen from $335 to $487, and her deductible went from $1,200 to $6,200.

Late last month, Bird received a letter from Coventry notifying her that her policy will cease to exist at the end of the year.

“We may still offer coverage in your area, but most of the options available today will not be available for 2017,” the letter stated.

Bird said she wasn’t surprised to learn her policy was being canceled. Rather, she expected it.

“I know that this act has created chaos,” she said of Obamacare, formally the Affordable Care Act. “When I get a thing [in the mail] saying that my rate has changed, I know it’s 50-50 when I open it. It’s either a letter saying this is what you’re going to pay starting Jan. 1, or we’re no longer offering that plan anymore. It wasn’t a total shock to me.”

Bird said she has started researching other policies with different insurance companies, but because officials in Kansas only recently finalized rates, she hasn’t yet made a final decision on her coverage for next year.

She has, however, set expectations for the terms of her next plan.

“I am now faced with the fact that unless something changes, there will be one health care provider presumably with two different health plans that I will have a choice of [while] living in the state of Kansas,” Bird said. “That’s absurd. How is that helpful?”

“I’m expecting (a) I’ll pay more, (b) I’ll have less, and (c) I may or may not have the same doctors,” she said. “Those are always the moving parts.”

Backward

Bird herself didn’t purchase her plan on the Obamacare exchange, and she wouldn’t qualify for a subsidy if she did.

While going without insurance and paying the fine—$695 per adult or 2.5 percent of household income for 2016—isn’t an option for her, it is for other Kansas and Missouri residents.

Jessica Huayaban of Olathe, Kansas, and her husband, Joel, each purchased plans in the individual market off the exchange in 2014.

Jessica, 36, bought a plan through Humana, and her husband, 35, through Coventry.

The couple, who own a painting and remodeling company, previously were uninsured and saving money each month to pay for a costly knee surgery Joe needed.

Jessica and Joel had insurance before, but when the recession hit in 2009, coverage was too expensive so they decided to go without.

“It was way cheaper to cash pay,” she said of the years they needed medical services but didn’t have insurance.

In 2014, when Obamacare was implemented, the couple purchased their own coverage, but only because the law required it.

“I wasn’t getting [insurance] for even the coverage part,” Jessica told The Daily Signal. “I was getting it for the compliance.”

Over the past two years, the monthly premiums Jessica pays for her Humana plan have gone up minimally, but her plan has a high deductible.

Then, last month, the 36-year-old mother received a letter from her insurer notifying her they’re canceling her policy.

“This is just something that continues to happen, and I don’t have a choice in it,” Jessica said.

She said she isn’t sure whether she and her husband will purchase plans on Obamacare’s exchange when the open enrollment period opens in November.

And although she may qualify for a subsidy, the young mother fears she’ll be stuck with an expensive tax bill when she files with the IRS for 2017, since her income—she is self-employed—fluctuates drastically from month to month.

“All of it is so backward,” she said of the health insurance system.

The post In 3 Years, His Insurance Premiums Double as Options Decline Under Obamacare appeared first on The Daily Signal.

In 3 Years, His Insurance Premiums Double as Options Decline Under Obamacare

For the past 15 years, Warren Jones has had the same health insurance plan with Blue Cross and Blue Shield of Kansas City.

But over the years, Jones, of Kansas City, Missouri, has watched the coverage offered in his policy “erode” over time.

First, the company got rid of the dental and vision coverage he had.

Then, Jones’ deductible increased—to $2,500—for his plan alone.

But perhaps the most significant change for Jones, a veterinarian, has been the rising cost of his monthly premiums.

In 2014, the year Obamacare took effect, Jones paid $318 in monthly premiums. In 2015, the price went up to $394 per month, then to $491 for 2016.

For 2017, Blue Cross and Blue Shield of Kansas estimates that Jones will pay $716 each month for his premiums—a 45.8 percent increase—according to a letter the insurer sent him.

“You can’t keep doing this because people’s wages don’t increase by that amount,” Jones told The Daily Signal. “Nobody’s wages are increasing, so it’s taking a bigger chunk of the budget.”

“That’s the scariest part,” he continued. “It takes a bigger chunk of the budget, and there’s no relief in sight.”

Like millions of other Americans nationwide, Jones, 55, doesn’t buy his insurance on Obamacare’s state and federal exchanges.

And even if he did, he wouldn’t qualify for the subsidies that lessened the cost of health insurance for 7.3 million Americans who received the tax credits last year, according to regulatory filings.

Instead, the veterinarian falls into an overlooked subset of consumers who pay full price for their health insurance in a time of skyrocketing premiums and deductibles.

They don’t qualify for the tax credits offered under the health care law, and they don’t receive their coverage from employers, since many are self-employed.

“I have seen so many people, self-employed people, many started their own little business and make whatever they do, they have a small business, and they buy their individual policy or buy for their family, and what are their options?” said Beverly Gossage, a broker who has worked in the Kansas City area for 14 years.

“Do they no longer be self-employed? Maneuver taxes to make less than the income threshold to get subsidies?” Gossage continued. “They don’t want to do that, but they’re being pushed to do that. I get this question every day—‘What am I supposed to do?’”

Gossage ran as a Republican for Kansas insurance commissioner in 2014.

Hooked

Over the past few months, insurers have been submitting rates to state regulators for the 2017 benefit year.

In most states, companies are requesting double-digit rate hikes for those selecting plans sold in the individual market both on and off the Obamacare exchanges.

Experts say insurers are playing catch-up after setting rates too low in the early years of the health care law and enrolling a sicker—and costlier—population than anticipated.

“A lot of insurers didn’t understand that the market was going to be skewed in terms of income and health status as severely as it was,” Ed Haislmaier, a senior research fellow in health policy studies at The Heritage Foundation, told The Daily Signal. “Generally, the pool was much worse than anybody expected because of things the administration did that made it worse.”

In response to questions about the growing cost of health insurance for consumers who buy plans sold in the individual market, the Obama administration has said that many Americans are shielded from premium hikes since they buy coverage on the exchanges and receive a subsidy from the government.

Many of the exchange enrollees who qualify for a subsidy may end up paying as little as $75 per month in premiums, Health and Human Services Secretary Sylvia Mathews Burwell said earlier this month.

But that’s not the case for people like Jones and the 10 million others paying full price for their coverage.

“The traditional individual market, which consisted largely of middle-class people who are self-employed, those people are hooked onto this,” Haislmaier said. “It’s kind of a situation where you have an anchor that’s too big, and it’s pulling the boat under.”

Jones is considering selecting a new health insurance plan altogether, but because Missouri hasn’t yet approved rates for 2017, he’s unsure if he’ll even be able to find a cheaper alternative.

“The big thing is the unknown still,” Jones said. “But we know we’re getting inundated with increases in premiums.”

The Missouri man said he is familiar with Blue Cross and Blue Shield of Kansas City, and switching to another carrier may leave him with even less coverage.

“You get a comfort level, and at least you know what you’re getting,” Jones said. “If I had to change insurance, you miss the changes that occur. You don’t know what you’re signing up for.”

‘50-50’

While Missouri residents like Jones are confronting a spike in rates, consumers across the state’s western border also are facing fewer insurers to choose from.

Among the insurers that will continue to sell coverage in Kansas, the number of plans they’re offering both on and off the Obamacare exchange is decreasing.

Many insurers, large and small, have decided to leave the exchanges after losing millions of dollars last year; they either withdrew from states altogether or decreased the number of policies offered.

According to an August study from the Kaiser Family Foundation, six in 10 counties may have a maximum of two insurers on the exchanges next year. Additionally, five states will have one insurer selling coverage on an exchange.

In Kansas, 17 carriers sold policies in the state before Obamacare’s implementation, Gossage said.

This year, the majority of consumers in Kansas will have only two insurers to choose from on the exchange, according to the Kansas Department of Insurance.

Those buying plans sold in the individual market off the exchange have five insurers, according to the state.

It’s a similar landscape in Missouri, where four insurance companies are selling coverage on the exchange, according to regulatory filings.

Off the exchange, consumers can choose from at least seven different companies.

Gossage said that over the last few years, she has seen insurers significantly lessen the number of policies they’re offering.

“What we did is we went from a very vibrant, competitive marketplace with extremely low rates and lots of different plans to pick from to over-overregulation with the type of plan you have and to mandates placed on insurance companies which led to high premiums and fewer carriers in the marketplace,” Gossage said.

While much of the focus has been on the declining number of choices for consumers selecting coverage on Obamacare’s exchanges, those with plans sold in the individual market off the exchanges are hurting, too.

Rochelle Bird, who is self-employed and lives in Overland Park, Kansas, has had a policy through Coventry, a subsidiary of Aetna, for two years.

In that time, her monthly premiums have risen from $335 to $487, and her deductible went from $1,200 to $6,200.

Late last month, Bird received a letter from Coventry notifying her that her policy will cease to exist at the end of the year.

“We may still offer coverage in your area, but most of the options available today will not be available for 2017,” the letter stated.

Bird said she wasn’t surprised to learn her policy was being canceled. Rather, she expected it.

“I know that this act has created chaos,” she said of Obamacare, formally the Affordable Care Act. “When I get a thing [in the mail] saying that my rate has changed, I know it’s 50-50 when I open it. It’s either a letter saying this is what you’re going to pay starting Jan. 1, or we’re no longer offering that plan anymore. It wasn’t a total shock to me.”

Bird said she has started researching other policies with different insurance companies, but because officials in Kansas only recently finalized rates, she hasn’t yet made a final decision on her coverage for next year.

She has, however, set expectations for the terms of her next plan.

“I am now faced with the fact that unless something changes, there will be one health care provider presumably with two different health plans that I will have a choice of [while] living in the state of Kansas,” Bird said. “That’s absurd. How is that helpful?”

“I’m expecting (a) I’ll pay more, (b) I’ll have less, and (c) I may or may not have the same doctors,” she said. “Those are always the moving parts.”

Backward

Bird herself didn’t purchase her plan on the Obamacare exchange, and she wouldn’t qualify for a subsidy if she did.

While going without insurance and paying the fine—$695 per adult or 2.5 percent of household income for 2016—isn’t an option for her, it is for other Kansas and Missouri residents.

Jessica Huayaban of Olathe, Kansas, and her husband, Joel, each purchased plans in the individual market off the exchange in 2014.

Jessica, 36, bought a plan through Humana, and her husband, 35, through Coventry.

The couple, who own a painting and remodeling company, previously were uninsured and saving money each month to pay for a costly knee surgery Joe needed.

Jessica and Joel had insurance before, but when the recession hit in 2009, coverage was too expensive so they decided to go without.

“It was way cheaper to cash pay,” she said of the years they needed medical services but didn’t have insurance.

In 2014, when Obamacare was implemented, the couple purchased their own coverage, but only because the law required it.

“I wasn’t getting [insurance] for even the coverage part,” Jessica told The Daily Signal. “I was getting it for the compliance.”

Over the past two years, the monthly premiums Jessica pays for her Humana plan have gone up minimally, but her plan has a high deductible.

Then, last month, the 36-year-old mother received a letter from her insurer notifying her they’re canceling her policy.

“This is just something that continues to happen, and I don’t have a choice in it,” Jessica said.

She said she isn’t sure whether she and her husband will purchase plans on Obamacare’s exchange when the open enrollment period opens in November.

And although she may qualify for a subsidy, the young mother fears she’ll be stuck with an expensive tax bill when she files with the IRS for 2017, since her income—she is self-employed—fluctuates drastically from month to month.

“All of it is so backward,” she said of the health insurance system.

The post In 3 Years, His Insurance Premiums Double as Options Decline Under Obamacare appeared first on The Daily Signal.

Blue States Pursue Public Option Using Obamacare ‘Innovation’ Waivers, as Red States Proceed With Caution

A rarely discussed aspect of Obamacare, one that appeared to give states an “exit strategy” to avoid provisions of the health care law, is likely to become more widely known next year.

But while states led by Democrat governors are beginning to see “innovation waivers” as a way to change their health care systems—and move toward proposals such as a public option—states with Republican governors are proceeding with caution.

The waivers come with strings attached by the Obama administration that some policy experts say constrain free market health care reforms as an alternative to government mandates.

“As we approach this issue and read the federal statute, all states can really do is make Obamacare worse,” one said.

Section 1332 of the Affordable Care Act allows states to pursue new approaches to health care by applying for what it calls State Innovation Waivers. The waivers, which the federal government must approve, exempt states from aspects of the health care law related to private insurance, including individual and employer mandates, tax credits, and exchanges.

However, for a waiver application to win approval from the Department of Health and Human Services, the proposed state program must adhere to four requirements, which the Obama administration released in December. The program must:

  • Provide coverage that is “at least as comprehensive” as coverage required under Obamacare.
  • Provide coverage and cost-sharing protections against “excessive out-of-pocket spending.”
  • Provide coverage to at least as many state residents covered under the Affordable Care Act.
  • Be deficit neutral.

The waivers become available at the start of 2017. Nine states have enacted laws related to Section 1332 waivers, according to the National Conference of State Legislatures.

Lawmakers in two states with Democrat governors, Minnesota and Rhode Island, introduced legislation that would use waivers to pursue “health care for all” models such as what are called public options.

Early drafts of the Affordable Care Act, popularly known as Obamacare, included a public option, or a government-run plan that competes with private insurers. Lawmakers, however, eventually stripped it out.

Now, President Barack Obama and other Democrats have been pushing for creation of a public option as choice and competition declined under Obamacare. Health care experts point to Section 1332 waivers as a way for Democrats to accomplish that goal at the state level.

“It’s something that’s very feasible, to create a system that enrolls more and more people with more and more benefits, paid for by taxpayers,” Nic Horton, a senior research fellow at the Florida-based Foundation for Government Accountability, told The Daily Signal. “I don’t know if that was the goal, but that is an outcome that’s possible.”

In addition to Minnesota and Rhode Island, officials in California also plan to apply for a Section 1332 waiver.

Gov. Jerry Brown, a Democrat, signed a bill directing state officials to submit an application to the federal Department of Health and Human Services for a waiver that would allow illegal immigrants to purchase insurance on California’s state-run exchange, Covered California.

The state released a draft of its waiver application in August. More than 35 members of California’s 53-member congressional delegation sent a letter to the Obama administration earlier this month urging it to approve California’s request for a waiver.

But Republican state lawmakers have approached Section 1332 with hesitation, as health care experts warn that the federal regulations have policymakers walking a thin line.

“How do you construct a waiver that is cost neutral and doesn’t shift any more cost, but also saves the state money, while also covering all the same benefits and all the same people, and not shifting cost onto consumers?” Horton said.

“That’s quite a puzzle, and I don’t know if any state is going to figure it out,” he added.

High Guardrails

Though more than a dozen states have moved to take advantage of State Innovation Waivers, Vermont was the first to flirt with the idea of using one.

In 2011, Gov. Peter Shumlin, a Democrat, signed legislation that would move Vermont toward a single-payer system—where the government pays for health care costs—by 2017 and use a Section 1332 waiver to implement the plan.

Shumlin, however, abandoned his quest for a single-payer system three years later, after the state Legislature estimated his “Medicare for all” proposal would cost the state upward of $2 billion annually.

Since then, more than a dozen states have passed legislation related to State Innovation Waivers.

According to the National Conference of State Legislatures, lawmakers in 17 states filed bills authorizing or exploring the use of the waivers.

Just two states, Hawaii and Vermont, submitted applications to the federal government, according to the Centers for Medicare and Medicaid Services, the agency that oversees Obamacare. At least one more—Massachusetts—publicly released an application for Section 1332 waivers.

In Vermont’s latest proposal, the Department of Vermont Health Access asks to waive Obamacare’s requirement that the state set up a Small Business Health Options Program (SHOP).

In a SHOP exchange, businesses with fewer than 50 employees can purchase insurance for those employees. Vermont is asking the government to waive that requirement and allow small businesses to purchase plans straight from insurers, instead of through the exchange.

Other states, like California and Colorado, have discussed applying for State Innovation Waivers to implement proposals that already have garnered public attention.

Colorado voters will weigh in Nov. 8 on a controversial ballot measure, Amendment 69, which creates a government-run health plan called ColoradoCare.

If voters approve Amendment 69, state officials would need to ask the Obama administration for a waiver to implement ColoradoCare.

Some health policy experts view Section 1332 waivers as a way for opponents of the health care law to improve or eliminate aspects of the law they dislike.

In an April 2015 post for the Journal of the American Medical Association, Stuart Butler, a senior fellow in economic studies at the Brookings Institution, said pursuit of State Innovation Waivers would provide an “exit strategy” to states with Republican governors.

But few of those states have released proposals, as states with Democrat governors have.

Kentucky Gov. Matt Bevin, a Republican, expressed an interest in using the waivers to make changes to his state’s Medicaid program.

Bevin campaigned on rolling back the expansion of Medicaid spearheaded by his Democratic predecessor, and said in December that his administration would pursue a Section 1332 waiver to overhaul the Medicaid program.

But guidance from the Department of Health and Human Services released that month raised questions about whether Bevin could use the waivers for Medicaid.

The Republican governor unveiled a plan to reform Kentucky’s Medicaid system in June, but that plan didn’t include use of a Section 1332 waiver. Bevin’s administration isn’t ruling out their use in the future, though.

“While we would not preclude pursuit of some type of Section 1332 waiver in the future, we chose to utilize an 1115 waiver to develop Kentucky HEALTH, an innovative and transformative Medicaid plan designed to meet the unique needs of Kentucky’s population,” Garry Gupton, a spokesman for Bevin’s office, told The Daily Signal in an email.

When used in the Medicaid program, Section 1115 waivers allow states to implement changes that don’t adhere to federal rules for the program.

Lawmakers in Ohio and Arkansas—states led by Republican governors—also have expressed interest in pursuing Section 1332 waivers.

The Ohio Legislature passed legislation last year directing the state superintendent of insurance to apply for a Section 1332 waiver that would eliminate both the individual and employer mandates and establish its own system that “provides access to affordable health insurance coverage” for Ohio residents.

And in Arkansas, lawmakers floated the idea of making changes to the Essential Health Benefits package available under Obamacare, as well as the cost-sharing reduction subsidies.

State officials also discussed using Section 1332 waivers to make changes to the Medicaid system in Arkansas, as Bevin proposed in Kentucky.

Horton, the Foundation for Government Accountability scholar, lives in Arkansas and isn’t optimistic the state will succeed.

“[To] legislators in Arkansas, Republicans, that are proposing this, this is not a path toward less welfare, less dependency, lower burdens on taxpayers,” he said of the waiver process. “It’s hard to see anything conservative that could come out of the [administration’s] restrictions.”

Despite the efforts in Arkansas, Kentucky, and Ohio, health policy experts say the Obama administration’s guidance on how the waivers can be used has compounded such reforms in red states.

“Section 1332 waivers were called State Innovation Waivers, and right now, there’s very little innovation that can be done given the constrictions the administration put on it,” Rea Hederman, executive vice president at the Ohio-based Buckeye Institute, told The Daily Signal. “The net effect is that the Obama administration has built up really high guardrails for Section 1332 waivers that constrain how states can reform health care in a free-market direction.”

Butler and Hederman both are former policy experts at The Heritage Foundation.

‘When the Bill Comes Due’

Before the Obama administration released its December guidance on Section 1332 waivers, Massachusetts Gov. Charlie Baker, a Republican, and New Hampshire Gov. Maggie Hassan, a Democrat, of the National Governors Association sent the departments of Treasury and Health and Human Services letters urging them to “provide states with the guidance and flexibility needed” to pursue waivers.

“Section 1332 offers governors the chance to work with their state agencies and stakeholders to pursue innovative coverage and delivery system initiatives tailored to the unique needs of their states,” their letter, which included a list of recommendations from the National Governors Association regarding the waivers, said.

But now, states—and particularly states with Republican governors—have little wiggle room in terms of what they can do to change their approaches to health care.

The added burden of knowing that states can be on the hook for billions of dollars in the future, should any plan approved by the federal government cost more than anticipated, is a deterrent for policymakers, Hederman said.

“Right now, you’re already seeing cost overruns with the Medicaid expansion [in some states],” he said. “It’s a question of when the bill comes due.”

Horton, with the Foundation for Government Accountability, agreed:

I would pose this to lawmakers: Why would you even want to go down this path? As we approach this issue and read the federal statute, all states can really do is make Obamacare worse. They can add cost to taxpayers and add people to welfare through this waiver process, but they can’t make Obamacare better.

Hederman, though, says he remains optimistic.

His advice to states is to hold off on pursuing Section 1332 waivers until 2017, when a new administration could roll back the Obama administration’s rules or repeal Obamacare altogether.

States then would be able to regain control of their health care systems, he said, under the nation’s founding concept of federalism in which states retain powers not listed in the Constitution.

“If 1332s are modified, states have a great opportunity to take back control. If the Affordable Care Act is repealed, they’ll have the ability to take back all control,” Hederman said. “It’s incumbent on the next administration to allow federalism to have a chance.”

The post Blue States Pursue Public Option Using Obamacare ‘Innovation’ Waivers, as Red States Proceed With Caution appeared first on The Daily Signal.

Stopping Another Obamacare Bailout

When President Barack Obama made his case to the American people for Obamacare, he promised that it would both lower health insurance premiums and not add to the national debt.

Neither has been true.

One way Obamacare has been adding to the deficit is through illegal bailouts of insurance companies operating Obamacare plans through the Department of Health and Human Services.

The Government Accountability Office highlighted one bailout scheme last week when it released a report finding that since 2014, HHS has been illegally sending billions of “reinsurance” fees to insurance companies instead of sending those dollars to the United States Treasury where they belong.

But that isn’t the only way the Obama administration is plotting to illegally funnel your money to insurance companies.

A separate “risk corridor” program also promised Obamacare insurance companies a safety net if their customers used an unexpectedly high amount of health care. The way it was supposed to work was that those plans with low medical costs would pay into a fund and plans with high medical costs would take out of the fund. In theory, the fund was supposed to be deficit neutral.

But in reality far more plans experienced higher costs than they anticipated, leaving HHS with billions in claims from insurance companies but no way to pay them. The Obama administration has asked Congress to appropriate money to bail out these insurance companies, but Congress has rightly refused.

So now HHS is getting creative. On Sept. 9, HHS issued a memorandum addressing suits filed by insurance companies in federal court demanding risk corridor payments. HHS wrote that, “as in all cases where there is litigation risk, we are open to discussing resolution of those claims,” and that “we are willing to begin such discussions at any time.”

This language appears to suggest that HHS may be trying to illegally funnel money to Obamacare insurers through the Department of Justice’s Judgment Fund. In other words, since Congress has not appropriated money for nonbudget neutral risk corridor payments, HHS will just invite insurance companies to sue, and then the DOJ can pay the bill instead.

Last week, Sens. Marco Rubio, R-Fla.; Ben Sasse, R-Neb.; John Barrasso, R-Wyo.; and I wrote a letter to the DOJ and HHS to make sure that doesn’t happen. Our letter notes that the Congressional Research Service has already found that the Judgment Fund may not be used to settle risk corridor claims and asks HHS to identify how it plans to pay the risk corridor settlements mentioned in their Sept. 9 letter.

The post Stopping Another Obamacare Bailout appeared first on The Daily Signal.