April 5, 2016

Obamacare over the Recess

  • While the Obama administration celebrated the law’s sixth birthday, Americans continued to get more bad news.

  • New reports from the Government Accountability Office, Kaiser Family Foundation, Congressional Budget Office, and Blue Cross Blue Shield spotlight the law’s failures.

  • Obamacare is at the Supreme Court again, this time regarding the law’s contraception mandate “accommodation.”


When insurance policies attract those who are the riskiest and the most expensive to insure, premiums go up. As premiums rise, the insurance coverage becomes less attractive to people who are healthiest and the least expensive to insure. This eventually leads to what the industry calls a “death spiral,” and the whole system collapses. That’s what is happening in the Obamacare exchanges now.

Obamacare's death spiral

Obamacare death spiral - insurance

The average premium increase from 2015 to 2016 for benchmark silver plans on the federal exchange was 7.5 percent – more than triple the increase the year before. For bronze plans, premiums jumped by an average of 12.7 percent this year, and deductibles jumped by 7.4 percent. Insurers have said that they are struggling in the exchange market, and their Obamacare enrollees tend to be sicker and more costly to insure. A new analysis from Avalere Health shows only one-third of HealthCare.gov enrollees kept the same plan from 2015 to 2016, likely because of rising costs.

Last week, BlueCross BlueShield released a report analyzing claims data from around the country. It found that newly enrolled people had:

  1. higher rates of certain conditions such as hypertension, diabetes, depression, coronary artery disease, HIV, and hepatitis C;
  2. higher use of medical services; and
  3. higher costs of care. On average, medical costs for new individual market customers were 19 percent higher than employer-based group members in 2014 – and 22 percent higher in 2015.

BCBS may have released the report to lay the groundwork for raising premiums again or leaving certain exchange markets.


The Government Accountability Office issued a new report on HealthCare.gov that found that CMS reported more than 300 security incidents between October 2013 and March 2015. GAO identified significant weaknesses in technical controls meant to protect data. These included insufficiently restricted administrator privileges, inconsistent application of security patches, and insecure configuration of an administrative network. GAO identified flaws that could put people’s sensitive information at risk.


The Kaiser Family Foundation released its March tracking poll on Obamacare’s sixth birthday, March 23. It did not include news worth celebrating. The report said, “Americans’ opinion of the health care law is tilting negative, with 41 percent saying they have a favorable view and 47 percent saying they have an unfavorable view.” These are the highest negatives in this poll since the 2014 mid-term elections. Among independents, 45 percent have an unfavorable opinion of the law and 40 percent have a favorable opinion. Among people who say health care is an extremely important issue in their vote for president, three times as many oppose the health care law as favor it.


The Congressional Budget Office and Joint Committee on Taxation released a new report last week updating health care projections for the next 10 years. The agencies predict that the costs associated with Obamacare insurance coverage will be $1.4 trillion, which is $136 billion higher than they projected just one year ago. The increase is largely due to higher spending for Medicaid expansion. Although spending projections for Obamacare are lower than before the law was enacted, this is due to significantly lower enrollment than CBO had expected. CBO currently expects 12 million people to enroll in Obamacare exchanges, down from the 21 million people it projected one year ago.

The agencies say that 22 million fewer people will be uninsured this year due to Obamacare. Most of the newly insured people were simply thrown into an already overcrowded Medicaid program. This form of health insurance is not the same thing as health care. CBO says that there will be 11 million more people in the Medicaid program this year because of Obamacare expansion. By 2026, CBO expects that Medicaid will cover one in four people under the age of 65. Americans deserve better than to be relegated to this second-tier health care.


In 2014, the Supreme Court ruled in the Hobby Lobby case that the law’s birth control mandate violated the Religious Freedom Restoration Act when applied to closely held, for-profit corporations owned by people with religious objections to the mandate. On March 23, the Supreme Court heard arguments in a related group of seven cases, known collectively as Zubik v. Burwell. The plaintiffs include the Little Sisters of the Poor – an order of Roman Catholic nuns that runs nursing homes – Christian universities, and Catholic dioceses, schools, and charities. The issue is the Obama administration’s workaround for businesses and non-profit religious institutions. Under this religious “accommodation,” organizations are still required to offer their employees health care plans providing no-cost access to contraceptives. An organization that objects to the coverage on religious grounds can notify its insurer of its objections, and the insurer must cover the expense of the contraceptives.

The court will decide whether this system continues to violate RFRA when applied to religious non-profit institutions. The plaintiffs argue that the accommodation still forces them to participate in a process that results in their employees receiving birth control, an act that violates their religious beliefs. For many of the objecting organizations, the concern arises specifically over four of the 20 types of birth control covered by the mandate, including the “morning after pill.”

Following arguments, the court issued an uncharacteristically long order directing the parties to file supplemental briefs addressing whether and how contraceptive coverage could be obtained by employees through insurance companies in a way that does not require the employers’ involvement. During oral arguments, the court appeared likely to split 4-4. The new order may be an attempt to avoid that result. A decision is expected in June.

Issue Tag: Health Care