HHS secretary: Obamacare sustainable even without help from Congress

The secretary of the Health and Human Services Department sought to reassure America that Obamacare is sustainable even without any action by Congress.

Sylvia Burwell told reporters that the changes to the law being made by the White House will improve the viability of the state exchanges.

The Hill:

The question of whether Congress would need to step in to fix ObamaCare has risen in prominence since announcements by Aetna, UnitedHealthcare and other large insurers saying they will pull out of ObamaCare exchanges next year because of financial losses.

But Congress remains deadlocked in political fighting over the law, raising the stakes for changes the administration is taking on its own.

“Stability exists even using the administrative tools that we have,” Burwell said.

She noted that despite all the talk of premium increases for next year, premiums came in 15 percent below Congressional Budget Office projections for the first year, 2014.

She said there would be less discussion of premium hikes if premiums had simply originally come in a bit higher. She said this year is a “transition year” during which the market can adjust premiums upward to a more sustainable level. 

Republicans have been pouncing on reports of the steeper increases.

Burwell acknowledged: “We understand premiums going up is a difficult issue, it’s an important issue.”

But she noted that the health law’s financial assistance increases for most people to shield them from the effects of premium hikes.

Regarding changes made with insurers in mind, Burwell pointed to actions her department has taken to tighten up the rules for extra sign-up periods that insurers said people used to game the system.

She also pointed to changes her department announced this week to a program called risk adjustment, which shifts money from insurers with healthier enrollees to those with sicker, costlier ones.  

Clearly, the HHS secretary is trying to put lipstick on a pig.  The one big issue she can't address or do anything about is the number of older, sicker enrollees far outstripping the number of younger, healthier sign-ups.  This is killing insurers, who are paying out far more in benefits than is being collected in premiums. 

The risk adjustment program has been a failure.  But the problem of insurance companies losing hundreds of millions of dollars persists, and there just aren't enough insurance companies making money from the exchanges to fully fund the program.

Nothing the administration is doing will entice insurance companies to continue to sell policies on the exchanges unless the flow of red ink can be slowed considerably.  Given the profile of new enrollees, this isn't likely to happen.

The secretary of the Health and Human Services Department sought to reassure America that Obamacare is sustainable even without any action by Congress.

Sylvia Burwell told reporters that the changes to the law being made by the White House will improve the viability of the state exchanges.

The Hill:

The question of whether Congress would need to step in to fix ObamaCare has risen in prominence since announcements by Aetna, UnitedHealthcare and other large insurers saying they will pull out of ObamaCare exchanges next year because of financial losses.

But Congress remains deadlocked in political fighting over the law, raising the stakes for changes the administration is taking on its own.

“Stability exists even using the administrative tools that we have,” Burwell said.

She noted that despite all the talk of premium increases for next year, premiums came in 15 percent below Congressional Budget Office projections for the first year, 2014.

She said there would be less discussion of premium hikes if premiums had simply originally come in a bit higher. She said this year is a “transition year” during which the market can adjust premiums upward to a more sustainable level. 

Republicans have been pouncing on reports of the steeper increases.

Burwell acknowledged: “We understand premiums going up is a difficult issue, it’s an important issue.”

But she noted that the health law’s financial assistance increases for most people to shield them from the effects of premium hikes.

Regarding changes made with insurers in mind, Burwell pointed to actions her department has taken to tighten up the rules for extra sign-up periods that insurers said people used to game the system.

She also pointed to changes her department announced this week to a program called risk adjustment, which shifts money from insurers with healthier enrollees to those with sicker, costlier ones.  

Clearly, the HHS secretary is trying to put lipstick on a pig.  The one big issue she can't address or do anything about is the number of older, sicker enrollees far outstripping the number of younger, healthier sign-ups.  This is killing insurers, who are paying out far more in benefits than is being collected in premiums. 

The risk adjustment program has been a failure.  But the problem of insurance companies losing hundreds of millions of dollars persists, and there just aren't enough insurance companies making money from the exchanges to fully fund the program.

Nothing the administration is doing will entice insurance companies to continue to sell policies on the exchanges unless the flow of red ink can be slowed considerably.  Given the profile of new enrollees, this isn't likely to happen.