Post by unlawflcombatnt on Mar 8, 2014 11:45:58 GMT -6
The Obama administration is planning a $5.5 billion bailout for Health Insurance Companies, due to less-than-expected enrollment of younger healthier patients.
from Money News
Insurers' Obamacare Losses May Cost US $5.5 Billion in 2015
Tues, March 2014
"Health insurers such as WellPoint Inc. and Humana Inc. stand to gain $5.5 billion from the government next year to cover losses from Obamacare in a program the law’s opponents label a bailout.
The money, outlined in President Barack Obama’s proposed budget for the fiscal year that begins in October, is designated to help insurers who find the cost of the law higher than expected, based on the percentage of older, sicker people who sign up compared with younger enrollees.
Under the Patient Protection and Affordable Care Act, insurers who record a profit of 3% or more on their Obamacare business would put some of their gains into a government-controlled fund. Companies whose claims cost at least 3% more than their premium revenue can access the pool.
While it isn’t clear in Obama’s budget how much he expects to collect from insurers who profit on business, the $5.5 billion may signal that more insurers will be withdrawing money from the fund than are adding to it....
The president’s budget plan also calls for $117 billion more in pharmaceutical industry rebates for medicines used by Medicare and Medicaid and would spend about $14.6 billion over a decade to train new health providers, including doctors, to help reduce future shortages.
4 Million Enrollees
About 4 million people have so far signed up for private health plans from companies under the act known as Obamacare. Insurers participating in the law’s new health exchanges are required to cover everyone who applies for a plan, regardless of their health.
The risk corridors program was adopted from earlier federal health programs that rely on private insurers, including Medicare’s prescription drug benefit.
At least one insurer, Louisville, Kentucky-based Humana, has said it expects to seek money from the pool. The company said in a Jan. 9 regulatory filing that it expected new Obamacare customers to be sicker and costlier than anticipated, after the U.S. government’s decision to let healthier people keep their existing plans.
Republican opponents of the Affordable Care Act have criticized the risk corridors as a bailout for insurers, and some discussed trying to repeal the risk mechanism earlier this year.
Repeal Dropped
Those plans, though, were dropped after the Congressional Budget Office said on Feb. 4 that the health law’s programs to reduce risk for insurers, would save the government $8 billion over the next 10 years. A spokeswoman for the White House’s Office of Management and Budget, Emily Cain, didn’t immediately answer e-mailed questions about the issue.
Obama’s budget also proposes to save about $402 billion over the next decade....
The budget targets drugmakers for much of the cuts, including paying $117 billion more in rebates for medicines used by federal health program beneficiaries. Obama’s 2014 budget contained a similar proposal that Congress didn’t adopt."
from Money News
Insurers' Obamacare Losses May Cost US $5.5 Billion in 2015
Tues, March 2014
"Health insurers such as WellPoint Inc. and Humana Inc. stand to gain $5.5 billion from the government next year to cover losses from Obamacare in a program the law’s opponents label a bailout.
The money, outlined in President Barack Obama’s proposed budget for the fiscal year that begins in October, is designated to help insurers who find the cost of the law higher than expected, based on the percentage of older, sicker people who sign up compared with younger enrollees.
Under the Patient Protection and Affordable Care Act, insurers who record a profit of 3% or more on their Obamacare business would put some of their gains into a government-controlled fund. Companies whose claims cost at least 3% more than their premium revenue can access the pool.
While it isn’t clear in Obama’s budget how much he expects to collect from insurers who profit on business, the $5.5 billion may signal that more insurers will be withdrawing money from the fund than are adding to it....
The president’s budget plan also calls for $117 billion more in pharmaceutical industry rebates for medicines used by Medicare and Medicaid and would spend about $14.6 billion over a decade to train new health providers, including doctors, to help reduce future shortages.
4 Million Enrollees
About 4 million people have so far signed up for private health plans from companies under the act known as Obamacare. Insurers participating in the law’s new health exchanges are required to cover everyone who applies for a plan, regardless of their health.
The risk corridors program was adopted from earlier federal health programs that rely on private insurers, including Medicare’s prescription drug benefit.
At least one insurer, Louisville, Kentucky-based Humana, has said it expects to seek money from the pool. The company said in a Jan. 9 regulatory filing that it expected new Obamacare customers to be sicker and costlier than anticipated, after the U.S. government’s decision to let healthier people keep their existing plans.
Republican opponents of the Affordable Care Act have criticized the risk corridors as a bailout for insurers, and some discussed trying to repeal the risk mechanism earlier this year.
Repeal Dropped
Those plans, though, were dropped after the Congressional Budget Office said on Feb. 4 that the health law’s programs to reduce risk for insurers, would save the government $8 billion over the next 10 years. A spokeswoman for the White House’s Office of Management and Budget, Emily Cain, didn’t immediately answer e-mailed questions about the issue.
Obama’s budget also proposes to save about $402 billion over the next decade....
The budget targets drugmakers for much of the cuts, including paying $117 billion more in rebates for medicines used by federal health program beneficiaries. Obama’s 2014 budget contained a similar proposal that Congress didn’t adopt."