Tags: health | insurance | Obamacare | UnitedHealth

IBD: Health Insurers Raise Stakes on House's ObamaCare Lawsuit

IBD: Health Insurers Raise Stakes on House's ObamaCare Lawsuit

By    |   Tuesday, 24 November 2015 06:00 AM

UnitedHealth Group Inc., the biggest U.S. health insurer, last week warned that losses on ObamaCare may lead the company to stop offering coverage through government-run health exchanges.

Other big insurers may also leave the exchanges after an upcoming court ruling that will decide how the U.S. government subsidizes insurance coverage to make it more affordable, according to Jed Graham in Investor’s Business Daily.

“Another huge, red-ink-imperiling curveball could come this spring with a ruling in House v. Burwell,” he writes. “Nearly 20 percent of total exchange subsidies paid out to insurers — or $136 billion over the next decade, by Congressional Budget Office estimates — is at stake.”

The Republican-led U.S. House of Representatives last year filed suit against Secretary of Health and Human Services Sylvia Burwell and other executive branch defendants over the implementation of the the Affordable Care Act, also known as ObamaCare. The case is now before U.S. District Judge Rosemary Collyer, who is expected to make a ruling in the spring, when insurers are figuring out where to set premiums in 2017.

“Insurers who sell ObamaCare-compliant policies both on and off the exchange have to offer the same price for the same coverage,” Graham writes. “But if the cost of exchange coverage spikes to make up for the loss of cost-sharing subsidies, insurers who exit the exchange may find a significant pricing advantage in selling off the exchange to higher-income customers who don't qualify for subsidies.”

The Supreme Court is likely to have the final say on how health insurance subsidies are handled.

“The Affordable Care Act clearly requires insurers to provide these enhanced benefits to those who qualify based on income, and it directs the government to compensate insurers for those benefits,” Graham writes. “The problem is that, as the nonpartisan Congressional Research Service has said, ‘unlike the refundable (premium) tax credits, these payments to health plans do not appear to be funded through a permanent appropriation.’”

Meanwhile, Paul Krugman, the Nobel-winning economist who writes the “Conscience of a Liberal” blog, says UnitedHealth’s possible withdrawal from the health exchanges doesn’t spell doom for Obamacare.

“UnitedHealth, while a huge provider of employment-based insurance, is actually a fairly small player in this market, and that other players are sounding much more positive,” he writes for The New York Times. “Surprisingly few employers are dropping coverage; overall projections for the number of uninsured Americans still look pretty good.”

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UnitedHealth Group Inc., the biggest U.S. health insurer, last week warned that losses on ObamaCare may lead the company to stop offering coverage through government-run health exchanges.
health, insurance, Obamacare, UnitedHealth
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2015-00-24
Tuesday, 24 November 2015 06:00 AM
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