October 19, 2019

As ObamaCare Fades, What’s the Future of American Health Care?

Press Release from the National Center for Public Policy Research:

Free Market Leader Plans to Question Pharmaceutical Giant Walgreens About Its Promotion of ObamaCare While Dumping Private Plans for its Employees

National Center for Public Policy Research Set to Ask Walgreens Executives Whether the Company is Willing to Support President Trump’s Plan to Repeal and Replace ObamaCare

New York, N.Y./Washington, D.C.  –  Less than two blocks from Trump Tower in New York City, at today’s annual meeting of Walgreens Boots Alliance shareholders, a representative of the National Center for Public Policy Research plans to ask the pharmaceutical giant’s CEO – Stefano Pessina – about the company’s promotion of the Affordable Care Act while it simultaneously dropped health care coverage for many of its employees. Pessina will also be asked whether the company will work with President Donald Trump’s administration to repeal and replace ObamaCare.

“Walgreens is in a unique position when it comes to the American health care system.  As a leading pharmaceutical chain, it worked closely with the Obama Administration to promote the Affordable Care Act by having its employees help customers navigate the ObamaCare exchanges.  However, many of those same employees were dropped from the company’s private health care plan because of high compliance costs associated with ObamaCare.  This burdened more than 150,000 Walgreens employees with the rising costs of health care,” said National Center General Counsel and Free Enterprise Project Director Justin Danhof, Esq., who will attend today’s meeting in New York City.  “Walgreens should commit to covering the increased health insurance costs for its employees who lost their coverage.  The company should also seize upon the current political climate and work with the Trump Administration to improve health care choice and access while controlling costs.”

Beginning in 2014, Walgreens dropped 160,000 employees from its private health insurance plans and directed them to enroll in a health care exchange.  It was reported that this move was done, in part, because of high ObamaCare compliance costs.   This shifted the burden of potential higher future health-related insurance costs from the company to its employees.  While Walgreens apparently covered these costs in 2014, it is unclear what the company plans to do going forward.  That’s one question Danhof will ask Walgreens executives later today. 

“Walgreens employees are the face of the company.  It was rather duplicitous of company executives to ask their staff to push ObamaCare onto Walgreens customers while concurrently dropping them from the company’s health plan.  It appears that Walgreens employees, like so many other Americans, could not keep their plan if they liked their plan,” added Danhof.  “Walgreens employees got a bad deal.  The company choose to support ObamaCare, but decided it didn’t want to bear the brunt of increased health insurance costs.  Today, I am going to ask that the company to do right by its employees and pledge to cover these health care costs.  One way that the company might control costs is by working with the Trump Administration as they repeal and replace ObamaCare.” 

President Trump has already begun the process of dismantling the Affordable Care Act.  Last Friday, he issued an executive order requesting that federal agencies relieve the financial burdens of ObamaCare for the American people.  He also expressed a strong willingness to work with Congress on a large-scale repeal and replacement of ObamaCare.  Danhof plans to ask Walgreens executives whether the company will work with President Trump’s Administration as it implements a new health care agenda. 

“The opportunities for the large-scale reforms being sought by President Trump and his team are rare in Washington, D.C.  The President has shown a strong desire to work with American corporations to ensure quality American jobs and growth at home.  The health care sector is no exception,” said Danhof.  “Walgreens has a unique opportunity to help shape a better health care system for all Americans.  In doing so, it can amend for past support of ObamaCare and its top-down system that has harmed so many American families.”  

The National Center for Public Policy Research is a Walgreens Boots Alliance shareholder. 

The National Center’s Free Enterprise Project is the nation’s preeminent free-market activist group focusing on shareholder activism and the confluence of big government and big business.  Since 2014, National Center representatives have participated in 89 shareholder meetings advancing free-market ideals in the areas of health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers’ rights and many other important public policy issues.  Today’s Walgreens meeting marks the National Center’s first shareholder meeting of 2017. 

In 2016, the Free Enterprise Project was featured in the Washington Post, the Washington Times, Fox News Channel’s “Cavuto,” the Drudge Report, the Financial Times, Crain’s Chicago Business, Hollywood Reporter, the Los Angeles Times, Fortune, Newsmax, Daily Caller, Lifezette, the Seattle Times, the Quad City Times, the San Francisco Chronicle, and the Chicago Tribune among many others.  The Free Enterprise Project was also featured in Wall Street Journal writer Kim Strassel’s 2016 book The Intimidation Game: How the Left is Silencing Free Speech (Hachette Book Group).

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank.  Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations.  It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.  Sign up for free issue alerts here or follow us on Twitter at @NationalCenter for general announcements.  To be alerted to upcoming media appearances by NationalCenter staff, follow our media appearances Twitter account at @NCPPRMedia.

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ObamaCare Death Spiral is on the Horizon

Leftists Claiming ObamaCare Critics Were Wrong About Death Spiral Jumped the Gun

Exorbitant Premium Hikes By Some Insurers for 2016 Show Insurance “Risk Pools” Do Not Have Enough Young and Healthy People

Washington, DC – Leftist claims that an ObamaCare death spiral won’t happen are premature, argues a new National Policy Analysis paper from the National Center for Public Policy Research.

“Pundits like Paul Krugman saw the tiny premium increases for the second year of the exchange and concluded that predictions of the death spiral were wrong,” says Dr. David Hogberg, senior fellow at the National Center and author of the paper. “But there is no rule saying that because a death spiral doesn’t happen in the first year it isn’t going to happen.”

In “The ObamaCare Death Spiral Rears Its Head,” Dr. Hogberg points out that ObamaCare’s “risk corridors” encouraged insurance companies to keep premium increases low in the first year.

“The risk corridors were going to use taxpayer money to cover a larger portion of the losses than any insurer incurred on the exchanges,” says Dr. Hogberg. “That would relieve them of any need to hike premiums in order to cover larger than expected medical claims.”

But in last year’s budget Republicans stopped any taxpayer money from being used for the risk corridors.

“Now that insurers don’t have access to that money, they have little alternative but to hike premiums if they incurred losses on the exchanges,” says Hogberg. “And given some of the premium hikes they are requesting for 2016, it’s pretty obvious that they had big losses.”

For example:

• Five insurance companies on Oregon’s exchange are proposing average premium increases ranging from 25.6 percent to 52 percent.

• In Tennessee, Blue Cross/Blue Shield is asking for an average increase of 36.6 percent and Community Health Alliance is proposing a 32.6 percent increase.

• In New Mexico, Health Care Service Corp. is requesting a premium hike of 51.6 percent.

“Once premiums go up like this, you’ll see younger and healthier people begin to drop out, leaving the insurance risk pool older and sicker and even more expensive to cover. Then premiums will increase again, and the process repeats,” says Dr. Hogberg. “It’s off to the races for the death spiral. With laws like community rating and guaranteed issue governing the exchanges, this was all but inevitable.”

David Hogberg is a Senior Fellow at the National Center for Public Policy Research. His forthcoming book, Medicare’s Victims: How the U.S. Government’s Largest Health Care Program Harms Patients and Impairs Physicians, will be available July 6.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

The National Center for Public Policy Research was founded in 1982. Sign up for free issue alerts here.

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“Glaring Flaw” In FamiliesUSA Report Being Touted by Obama Administration’s Department of Health And Human Services

Report Assumes Everyone Below 400% of the Federal Poverty Level is Eligible for a Subsidy on the ObamaCare Exchanges

Many People With Insurance Cancellations Will Receive No Financial Help on the Exchanges Because Subsidies Often Stop Well Before 400% FPL

Doesn’t HHS Know This?

Washington, DC – The following is the statement of David Hogberg, Ph.D., senior fellow for health care policy at the National Center for Public Policy Research, on the Families USA report released today in conjunction with the Department of Health and Human Services.

HHS is using a Families USA report to claim that “less than 1 percent of nation’s non-elderly are at risk of losing their current individual market plan and paying more for insurance” on the Obamacare exchanges.

The glaring flaw in the report is that it assumes anyone making less than 400% FPL, which is $45,960 for an individual, will receive a subsidy for the purchase of insurance on the exchanges. But, given the way the subsidy is calculated, many people under 400% FPL won’t receive any financial assistance.

For example, suppose you are a single 50-year-old living in Illinois. If you earn $41,000 annually, which is 357% FPL, chances are you don’t qualify for a subsidy. In Illinois, the subsidies stop, on average, for a 50-year-old at about $40,500. Yet the 50-year-old making $41,000 is included as someone who won’t be paying more for insurance on the exchange in the FamiliesUSA report.

The fact is the report low-balls the number of people who are losing their insurance and will not be eligible for assistance on the exchanges. An accurate analysis would likely reveal it is far more than 1%.

For more on how the insurance subsidy is calculated, see Dr. Hogberg and Sean Parnell’s National Center for Public Policy Research National Policy Analysis paper, “ObamaCare Exchanges: Just Because You Are Eligible For a Subsidy Doesn’t Mean You Will Qualify for One.”

For more data on the income-levels at which subsidies stop in the states on the federal exchange, see Hogberg and Parnell’s supplement to the above report, “Income At Which Premium Subsidies Disappear on the Federal Exchanges.”

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

Contributions are tax-deductible and greatly appreciated.

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ObamaCare Subsidy Structure Pits Young v. Old, New Study Says

Younger, Healthier People Less Likely To Receive Subsidies Than Older, Sicker People on ObamaCare Exchanges

Subsidy Structure Makes Health Insurance Far More Attractive to ages 51-64 than 18-34, Likely Creating ObamaCare “Death Spiral”

Over 1 Million Young Adults Making 400 Percent of Federal Poverty Level or Less May Not Qualify for Exchange Subsidies

Washington, DC – Subsidies on the ObamaCare exchanges will favor older, sicker people over the young and healthy, likely leading to an insurance “death spiral,” says a just released study, “ObamaCare Exchanges: Just Because You Are Eligible for a Subsidy Doesn’t Mean You Will Qualify for One.

The study was written for the National Center for Public Policy Research by David Hogberg, Ph.D., senior fellow for health care policy at the National Center, and Sean Parnell, president of Impact Policy Management, a public policy consulting firm.

“Officially, the ObamaCare Exchanges are supposed to give a subsidy to everyone making 400 percent of the federal poverty level or below,” said Dr. Hogberg, “and that’s what the public is being told. Yet we’ve found that for most people age 18-34, the subsidies disappear well before that 400 percent level.”

The study examined the premium data of the exchange of 14 states and Washington, D.C. In ten of the exchanges, subsidies disappeared for everyone age 18-34 before they reached the 300 percent federal poverty level (FPL), about $34,470 annually for a single person.

“This is critical information because it tells us that a population that is crucial to the proper functioning of the ObamaCare exchanges, those 18-34, will be paying full price for their premiums,” said Dr. Hogberg. “This will give them considerable incentive to forego insurance and just pay the individual mandate fine.”

But, Dr. Hogberg says, the picture that emerges for those in their 50s and 60s is quite different. The study found that in most exchanges, the subsidies extend up to the 400 percent FPL ($45,960) level beginning at age 52.

“This means that, on balance, insurance on the exchanges is a much better deal for older and sicker people,” said Parnell. “An insurance system that discourages young people from buying coverage but encourages older people is likely headed for a death spiral.

“A death spiral occurs when younger and healthier people needed to stabilize the risk pool don’t sign up for insurance,” continued Parnell. “Premiums for those who do purchase insurance will climb. The higher premiums encourage even more young and healthy people to drop insurance as premiums become less affordable. This eventually leads to a rising number of uninsured while those who remain insured are only the sickest, with the highest healthcare costs.”

Finally, the study extended the analysis of the 15 exchanges to the nation as a whole and found that about 1,185,881 18-34-year-olds who are single, childless and under 400 percent FPL will not qualify for an exchange subsidy. Including in the analysis those 18-34-year-olds whose incomes exceed 400 percent FPL show about 1,961,990 will not receive subsidies.

The paper is available online at http://www.nationalcenter.org/NPA653.html

Suggested Discussion Topics:

1. Why does it matter that exchange subsides favor the older and sicker over the younger and healthier? What effect will that have?

2. When you talk of this leading to a “death spiral,” what do mean and what are the likely consequences?

3. How does the formula for subsidies on the exchanges work, and why does it lead to many younger people under 400 percent of the federal poverty level not receive subsidies?

4. In your last study you noted that about 6 million of those 18-34 who are single and childless would be eligible for the ObamaCare exchanges. If at most 1.9 million opt out because they have to pay full price for insurance because they get no subsidy, doesn’t that still leave enough to make the ObamaCare exchanges work?

In Dr. Hogberg’s most recent prior study, August 2013’s “Why The ‘Young Invincibles’ Won’t Participate In The ObamaCare Exchanges and Why It Matters,” he found that, despite both the subsidies and individual mandate, about 3.7 million 18-34-year-olds would save at least $500 by forging insurance and paying the fine. Of that group, about 3 million would save at least $1,000.

David Hogberg, Ph.D., is a health care policy analyst for the National Center for Public Policy Research. Previously, Dr. Hogberg was a Washington Correspondent for Investor’s Business Daily, specializing in health care and Medicare. Prior to his employment at IBD, he worked as a policy analyst studying health care and other issues for various think-tanks, including the National Center for Public Policy Research, and for the office of U.S. Representative Jeff Fortenberry. Dr. Hogberg holds a Ph.D. in political science from the University of Iowa. He is currently working on a book entitled “Medicare’s Victims: How The U.S. Government’s Largest Health Care System Harms Patients And Impairs Physicians.”

Sean Parnell is a public policy consultant in Alexandria, Virginia, who conducts original research and analysis as well as providing government relations and strategic consulting services. He serves as adjunct scholar in health care policy for the Rhode Island Center for Freedom & Prosperity and is working on a book entitled The Self-Pay Patient, a resource for uninsured patients as well as those with high-deductible health plans. He also runs a blog called The Self-Pay Patient and previously served as president of the Center for Competitive Politics and as vice president at the Heartland Institute.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than 4 percent from foundations, and less than 2 percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

Contributions are tax-deductible and greatly appreciated.

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