Consumer Power Report #437
Obamacare’s passage through the House of Representatives was possible thanks to a supposed compromise among conservative Democrats who opposed taxpayer funding for abortion. The compromise included an executive order from President Barack Obama purportedly preventing such funding.
Opponents of the law decried this approach as a fig leaf that would not actually prevent taxpayer funding of abortions. According to a new GAO report, they were right to be skeptical:
There are widespread instances of Obamacare insurance plans violating the rigid rules surrounding whether customers can use federal health care subsidies on insurance policies that cover abortion procedures, according to a Government Accountability Office investigation.
The report, commissioned by House Republican leadership and obtained by POLITICO on Monday night, found that 15 insurers in a sample of 18 are selling Obamacare plans that do not segregate funds to cover abortion (except in cases of rape, incest or the mother’s life) from their Obamacare subsidies.
The Affordable Care Act requires that insurers collect separate payments from customers for abortion coverage so that taxpayer money in the form of subsidies do not cover abortions. Adoption of the complex payment scheme — which essentially requires customers to send two separate payments to their insurers — was pivotal to getting the health law through Congress. Anti-abortion Democrats brokered the arrangement shortly before the law passed, threatening to vote against it without the restrictive language.
The report’s release is likely to elicit new election-year attacks on congressional Democrats from anti-abortion groups and Republicans who warned that Obamacare would allow for taxpayer subsidized abortions.
The Government Accountability Office said in a report released late Monday that only 1 of 18 insurers it reviewed was separately itemizing a charge for coverage of elective abortions on enrollees’ bills.
That detail is important because the original compromise that President Barack Obama sealed with anti-abortion Democrats stipulated that no federal funds would be used to pay for elective abortions. Instead, private health plans covering the procedure would collect a separate premium, which would be segregated from federal subsidies for other medical services.
Although abortion is a legal medical procedure, longstanding federal laws prohibit taxpayer funds from being used to pay for it, except in cases of rape, incest or to save the life of the mother.
The new GAO review did not address the fundamental question of whether federal subsidies under the health law are being used for elective abortions, but abortion opponents said the findings underscore their view that the compromise is an accounting gimmick.
Writing at National Review, Arina Grossu makes the case that additional steps are necessary to prevent the funding of abortions via Obamacare.
Of course, taxpayers in many states are already funding abortions. As I have noted in the past, while the Hyde Amendment prohibits federal funding of abortion except in cases of rape, incest, and life endangerment, state funding has no such prohibition. Medicaid is the primary payer for 41% of births nationwide, including 60% in New York City and 70% in Louisiana. It also pays for a sizable number of abortions.
States that currently fund abortions under their Medicaid programs for virtually any health-related reason include: Alaska, Arizona, California, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Montana, New Jersey, New Mexico, New York, Oregon, Vermont, Washington, and West Virginia. By themselves, California and New York spend tens of millions of taxpayer dollars every year funding these non-rape/incest/life-of-the-mother abortions – New York remains the abortion capital of America, per capita. There were 133,000 publicly funded abortions in just those two states in 2010, representing roughly 10% of total abortions in the country (taxpayers in those respective states paid for all of those).
The trendline for Medicaid-funded abortions has increased during the recession and will continue to increase under Obama’s Medicaid expansion. And funding has a dramatic impact–this survey of academic literature from Guttmacher notes: “Approximately one-fourth of women who would have Medicaid-funded abortions instead give birth when this funding is unavailable.”
The myth that taxpayers do not already pay for abortions is one precipitated by those rent-seekers who want taxpayer funding for this practice, and the fiction that Obamacare would not also represent an expansion of taxpayer funding for abortions was one of the most obvious of the many convenient lies the president made to pass his signature domestic policy.
— Benjamin Domenech
IN THIS ISSUE:
For the roughly 8 million people who signed up this year, the administration has set up automatic renewal. But consumers who go that route may regret it. They risk sticker shock by missing out on lower-premium options. And they could get stuck with an outdated and possibly incorrect government subsidy. Automatic renewal should be a last resort, consumer advocates say.
An additional 5 million people or so will be signing up for the first time on HealthCare.gov and state exchange websites. But the Nov. 15-Feb. 15 open enrollment season will be half as long the 2013-2014 sign-up period, and it overlaps with the holiday season.
Of those enrolled this year, the overwhelming majority received tax credits to help pay their premiums. Because those subsidies are tied to income, those 6.7 million consumers will have to file new forms with their 2014 tax returns to prove they got the right amount. Too much subsidy and their tax refunds will be reduced. Too little, and the government owes them.
Tens of millions of people who remained uninsured this year face tax penalties for the first time, unless they can secure an exemption.
“It’s the second open enrollment, but the first renewal and the first tax season where the requirements of the Affordable Care Act are in place,” said Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities, which advocates for low-income people, and supports the law.
“The fact that it is all going to be occurring within an overlapping and relatively short time frame … means that there will be many issues,” she added.
Millions of consumers will soon receive notices from health insurance companies stating that their coverage is being automatically renewed for 2015, along with the financial assistance they received this year from the federal government.
But consumer advocates and insurers say they see a significant potential for confusion because some of the information will be out of date and misleading on costs and other aspects of coverage. Some people who have been receiving monthly subsidy payments this year could get much less if they stay in their current health plans.
The Obama administration announced in June that most people with insurance purchased in the federal marketplace would be automatically enrolled in the same or similar plans next year, so they would not need to file applications or go back to HealthCare.gov to continue their coverage.
Now, however, the administration is emphasizing that consumers should revisit the marketplace to make sure they are getting the right amount of financial assistance and to compare other health plans.
President Obama said in April that eight million people had enrolled in private health plans through federal and state marketplaces created under the Affordable Care Act. The Congressional Budget Office estimates that the total will climb to 13 million in the next open enrollment period, which runs for three months starting on Nov. 15.
Federal officials told insurers this month to send out standard renewal notices written by the government. The notices inform consumers of the new monthly premium for their health plans in 2015 and the most recent amount of any subsidy, or tax credit, paid for a household in 2014.
In many cases, insurers will notify consumers that they face higher premiums but will not provide them any information about higher subsidies in 2015, a prospect that distresses insurers and consumer advocates.
SOURCE: New York Times
Federal health officials said Monday that more than 100,000 immigrants who bought health-care plans through the federal insurance exchange will have their coverage cut off at the end of the month, because they failed to provide proof by the Sept. 5 deadline that their citizenship or immigration status makes them eligible for insurance on the marketplace.
Those individuals can still send in the needed information to the federal exchange and if they are found eligible, they will be able to regain coverage, officials said. They will be considered under a special category reserved for people who have experienced a major life change, such as having a baby or getting divorced or losing a job with health insurance.
Separately, about 363,000 consumers who have coverage could lose financial subsidies for their insurance premiums unless they clear up information about their incomes that differs from that on federal tax records.
If those individuals don’t provide updated income information by Sept. 30, federal health officials will adjust their premiums to “reflect what we have in our records,” said Andy Slavitt, principal deputy administrator at the Centers for Medicare and Medicaid Services, which manages HealthCare.gov, the federal exchange. That means the federal government could reduce — or eliminate — those individuals’ federal insurance subsidies. It’s also possible that some consumers could get a bigger tax credit.
SOURCE: Lena Sun, Washington Post
A flaw in the federal calculator for certifying that insurance meets the health-care law’s toughest standard is leading dozens of large employers to offer plans that lack basic benefits, such as hospitalization coverage, according to brokers and consultants.
The calculator appears to allow companies enrolling workers for 2015 to offer inexpensive, substandard medical insurance while avoiding the Affordable Care Act’s penalties, consumer advocates said.
Insurance pros are also surprised such plans are permitted.
Employer insurance without hospital coverage “flies in the face of Obamacare,” said Liz Smith, president of employee benefits for Assurance, an Illinois-based insurance brokerage.
At the same time, a kind of Catch-22 bars workers at these companies from subsidies to buy more comprehensive coverage on their own through online marketplaces. No federal tax credits for health coverage are available to people with workplace plans approved by the calculator.
SOURCE: Jay Hancock, Washington Post
The largest insurer with the lowest premium rates on Minnesota’s Obamacare exchange is dropping out because the government health-exchange is unsustainable, the company announced Tuesday.
PreferredOne Health Insurance told MNsure, the state-run exchange, Tuesday morning that it would not continue to offer its popular insurance plans on the marketplace in 2015. It’s “purely a business decision,” spokesman Steve Peterson told KSTP-TV. The company is losing money on administrative costs for plans offered on the bureaucratic and glitchy government exchange.
Part of the problem, according to PreferredOne, is that MNsure hasn’t even been able to verify its customers’ information. PreferredOne said that some of its customers have turned out not to even live in Minnesota.
Insurers are required to accept customers who’ve been approved by the exchange for coverage, but states and the federal government have been struggling for months to determine which applicants are actually eligible for the benefits.
“Our MNsure individual product membership is only a small percentage of the entire PreferredOne enrollment but is taking a significant amount of our resources to support administratively,” the company said in a statement. “We feel continuing on MNsure was not sustainable and believe this is an important step to best serve all PreferredOne members.”
PreferredOne was Minnesota’s largest exchange insurer with 59 percent of individual MNsure sign-ups, according to KSTP. Another four insurance companies — Blue Cross Blue Shield, HealthPartners, Medica and UCare — will continue to offer plans on the exchange next year.
This leaves Minnesota Obamacare customers in a tricky situation. PreferredOne had significantly lower rates than any other insurer on the exchange. When these plans disappear, customers will see a significant rate hike if they choose to continue on the Obamacare exchange, independent of yearly rate hikes.
SOURCE: Sarah Hurtubise, Daily Caller
There are only a few potential policy paths forward for the Virginia expansion, should it gain any traction. One is “Marketplace Virginia,” a virtual carbon copy of Arkansas’ failed ObamaCare expansion plan. Notably, the Arkansas program has been over budget every single month since it launched, failing to meet any of its lofty promises and leading to the exit of the state’s Medicaid director and several of its legislative architects. It’s a policy and political hot potato that’s bad for patients, bad for taxpayers and bad for the state budget.
Even the federal government may be souring on the Arkansas expansion plan, having recently rejected Pennsylvania’s request for a similar expansion, forcing the state to instead expand via managed care and denying all of the state’s unique waiver requests.
More than that, it’s clearly a headache that Virginia lawmakers don’t want to deal with. (Readers who are skeptical that Virginia is trying to copy Arkansas should read this document from the Virginia House Republican caucus.)
Another is a proposal being pushed forward by Delegate Tom Rust, the only Republican to support ObamaCare expansion in the House last session. His proposal, which borrows its Orwellian “Health Care Independence Act” title from Arkansas, is a near carbon-copy of the ObamaCare window dressing used to pass ObamaCare expansion in Iowa and New Hampshire. However, Rust takes this bad proposal one step further by providing extra subsidies to individuals above 138 percent FPL who are on the ObamaCare exchange.
Republicans in Virginia have a majority of voters on their side against the ObamaCare expansion. An April poll from Christopher Newport University found that 53 percent of Virginia voters oppose ObamaCare expansion in the state. And opposition isn’t just coming from “right-wingers” as some pundits have speculated — in fact, 55 percent of Virginia independents oppose the expansion as well.
A poll commissioned by the Foundation for Government Accountability in March found that 53 percent of Virginia voters were less likely to re-elect their legislator if their legislator supported the ObamaCare expansion.
A more recent poll, conducted by Roanoke College, also shows that a plurality of Virginians oppose expansion. Even more striking, 61 percent of those polled oppose the governor’s talk of cutting the legislature out of the debate and expanding via unilateral executive order.
SOURCE: Josh Archambault, Forbes