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Insurance News Update for April 6, 2017

News Update for April 6, 2017

Insurance Companies Withhold Commissions, Brokers Forced to Leave Marketplace

In order to mitigate losses in the individual market, insurance companies are refusing to pay brokers on platinum tier and special enrollment plans that brokers have already sold. Additionally, companies are lowering commission rates for those being delivered.

Despite their moral conflict over leaving consumers without an advocate, 36,000 brokers (35% of those representing the Marketplace) have had to exit the Marketplace in order to protect their livelihood. This mass exodus may negatively impact the Marketplace’s enrollment because 50% of enrollments are attributed to brokers.

House GOP Schedule Emergency Meeting to Amend Latest Healthcare Reform Draft

House Republicans are scheduled to meet today (Thursday) to add a “risk-sharing fund” to their current healthcare reform draft. This addition would allocate $15 billion to health insurance companies to help subsidize care for those with pre-existing conditions or high medical costs. Sources do not believe that this meeting will affect the upcoming 2-week recess.

Fate of Cost-Sharing Subsidies Still Unknown

Trump’s advisers, who had expected Congress to have passed a repeal bill by now, have not agreed what to do about the subsidies, which help low-income people covered by Obamacare pay for their out-of-pocket health costs. One senior official said that the Department of Health and Human Services and the White House Office of Management and Budget were studying the impact of abruptly stopping billions of payments to the health plans that participate in the Obamacare markets. Insurers would have to pick up these costs, regardless of whether the federal funds are released.”

The fate of cost-sharing subsidies hinges on the lawsuit. “The House Republicans won the first round of the lawsuit over the cost-sharing subsidies, although the Obama administration appealed the decision. The Trump administration asked for some extra time, and the next deadline for the Trump Justice Department is May 22.”

Another complicating factor is how the government will decide to budget for the subsidies, at least until the outcome of the lawsuit is decided. “Congress must approve a spending bill for the rest of the year by late April to avoid a government shutdown.”

News Update for April 4, 2017

Revisions to Republican Healthcare Bill Stir Hope for Winning Vote

Accompanied by White House officials, Vice President Mike Pence presented an offer for healthcare reform to the Freedom Caucus during a closed-door meeting Monday night. While it was not an official revision, the offer included:

  • Allowing states to apply for coverage requirement waivers (specifically the essential health benefits) and pre-existing condition coverage exemptions
  • Removing the “community rating” rule, which “requires insurance companies to charge the same price to everyone who is the same age.”

States would apply for waivers if they could “improve coverage and reduce costs” without the essential health benefits. There was also discussion of creating high-risk pools for those with pre-existing conditions, redirecting money from state stability funds to cover the cost.

The Freedom Caucus will not make a final decision until the members can review the new bill in writing.

Proposed NIH Funding Cuts Meet Strong Opposition

Months after increasing biomedical research funding, Republicans and Democrats are visibly unhappy with proposed cuts to the National Institutes of Health (NIH). Representatives are “extremely concerned about the potential impact of the 18 percent cut” and believe that patients and researchers could see “catastrophic results” if the funding cuts are approved.

Joe Biden, former Vice President, had this to say about the proposed cuts. “[President Trump is] proposing draconian cuts—not only to biomedical research, but also to the entire scientific expertise across the board. This would set the NIH budget, and biomedical research, back 15 years—and that’s not hyperbole.”

A Proposed Rule Could Lower the Value of Your Health Plan

A rule proposed by the Trump administration in February could lower the actuarial value of all metal tier health plans by 2%. This means insurance companies could offer “bronze plans with actuarial values as low as 56 percent instead of the 60 percent standard” coverage of medical costs. While it may lower expenses for insurance companies, consumer advocates and insurance experts think the rule falls short of consumer needs and concerns. The lower actuarial value both reduces potential subsidies and increases out-of-pocket costs.

Wellmark Blue Cross and Blue Shield Withdraws from Iowa’s ACA Marketplace and Regulations

Without clarity into the future of healthcare reform, Iowa’s Wellmark Blue Cross and Blue Shield has had to make a difficult decision. Wellmark will stop offering health plans on the Marketplace, and it will no longer offer ACA-compliant plans in 2018. The company cites a $90 million dollar loss, 43% premium rate increases, and unclear healthcare reform as its primary reasons for making such enormous changes. Without Wellmark on the Marketplace, 21,400 individual enrollees will have to weigh the changes to their plans or seek new coverage in 2018.

News Update for April 3, 2017

Trump Meets with Zeke Emanuel and Rand Paul on Healthcare

The Trump administration met with both Obamacare architect Zeke Emanuel and Republican Senator Rand Paul last week. White House press secretary Sean Spicer said, “I think that despite our political and policy differences, [Trump] wants to hear ideas not just of [Emanuel] but a lot of people.” Trump and Rand Paul golfed together on Sunday, Paul commenting that he “had a great day with the president. Played some golf, and we talked and we talked about a little bit of healthcare. I continue to be very optimistic that we are getting closer and closer to an agreement on repealing Obamacare.”

“Trump, who took a political hit last month when House Republicans failed to agree on an alternative health care plan, also tweeted: ‘Talks on Repealing and Replacing ObamaCare are, and have been, going on, and will continue until such time as a deal is hopefully struck.’”

Wisconsin Works on Medicaid, Florida House Passes Legislation

Scott Walker, the Republican Governor of Wisconsin, wants to implement drug tests and work requirements for Medicaid recipients. Both ideas have drawn criticism because they could further stigmatize the poor and waste money. Two state examples and a Kaiser Family Foundation (KFF) analysis support critics of Walker’s proposal:

  • North Carolina and Michigan, who screen their welfare applicants, have seen little use in drug testing—less than 0.3% of North Carolina’s applicants and 0% of Michigan’s applicants tested positive.
  • An analysis done by the KFF broke down the work status of Medicare beneficiaries. Of those not working, 35% were disabled or unwell, 28% were taking care of family members, 18% were enrolled in school, 8% were retired, and 8% were not able to find work. This leaves only 3% of those not working to fail proposed work requirements.

The Florida House passed a “direct primary care” bill on Thursday. This bill allows patients to directly negotiate regular payments and costs with doctors.

News Update for March 31, 2017

The Importance of CSRs to the Marketplace and Current Litigation Threatening Them

Under the Obama administration, subsidies used to lower the cost of out-of-pocket expenses were created. These subsidies, called cost-sharing reductions (CSRs), guaranteed payments to health insurance companies if they offered reduced out-of-pocket pricing to certain customers. However, “the GOP argued the payments were being made unconstitutionally, without a congressional appropriation.”

Republican House members sued the Obama administration over the funding of CSRs, and Trump’s administration inherited this ongoing lawsuit. If the lawsuit is won, or if the current administration dismisses the case, insurance companies stand to lose millions (which have already been used to fund CSRs) promised by the government. The potential loss is influencing many insurance companies to drop out of the Marketplace or increase premiums.

Speaker Paul Ryan stated on Thursday that payments will continue to be made to insurance companies that offer CSRs. However, his guarantee was limited to the ongoing case. “While the lawsuit is being litigated, then the administration funds these benefits. That’s how they’ve been doing it and I don’t see any change in that. We don’t want to drop the lawsuit because we believe in the separation of powers. We believe in Congress retaining its lawmaking power, but this lawsuit hasn’t run its full course,” Ryan said.

Ryan’s statement has done little to comfort insurance companies. Kristine Grow, spokesperson for America’s Health Insurance Plans, doesn’t think payments continuing only during the lawsuit are enough. “Insurers need certainty that the payments will be there throughout 2018, or else they might need to raise premiums for next year to factor in the uncertainty.” Grow said, “As soon as this lawsuit stops the CSRs no longer have a guarantee.”

Chairman of the House Energy and Commerce Committee, Greg Walden, gave a stronger guarantee with the hope of keeping insurance companies in the marketplace. “I will do everything I can to make sure the cost-sharing reduction payments get made, especially this year where they were promised by the federal government under the contracts. That’s an obligation not only to insurers but also to the people who took on those plans. We cannot leave them high and dry.”

Healthcare Reform Vote Doesn’t Have a Set Date, or Enough Support, According to Speaker Ryan

House Speaker Paul Ryan addressed questions surrounding Republican healthcare reform during his weekly news conference. When asked about the timeline and bill details, Ryan stated, “I’m not going to commit to when and what the vote is going to look like, because it’s my job to make sure that House Republicans can coalesce and come together and draw a consensus.”

Ryan also commented on President Trump’s frustrations with Republicans’ inability to pass the first reform bill, shared during conferences and on Twitter. “I understand the president’s frustration. I share that frustration. About 90 percent of our conference is for this bill and about 10 percent are not. And that’s not enough to pass the bill.”

States Continue to Move Forward With Their Own Healthcare Reforms

In California, Democratic Senator Ricardo Lara released proposed details for a state-wide single-payer healthcare system. “With Republicans’ failure to repeal the Affordable Care Act, Californians really get what is at stake with their healthcare. We have the chance to make universal healthcare a reality now. It’s time to talk about how we get to healthcare for all that covers more and costs less,” Lara said in a statement.

In Florida, the State House passed two bills that support “a free-market, consumer-driven healthcare system.” HB 161 allows individuals and employers to negotiate and contract with doctors directly for healthcare services (this is normally done by health insurance companies). HB 145 lets surgical centers hold patients for 24-hours and makes new recovery centers to care for post-operative patients for 72 hours.

In Kansas, Governor Sam Brownback has vetoed a Medicaid expansion bill previously approved by the state’s House and Senate. In his veto message, Brownback stated, “I am vetoing this expansion of Obamacare because it fails to serve the truly vulnerable before the able-bodied, lacks work requirements to help able-bodied Kansans escape poverty, and burdens the state budget with unrestrainable entitlement costs.” The House and Senate have 30 days to override the veto.

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