Feds Admit More Obamacare Co-Op Flops Ahead



Federal officials admitted for the first time Monday that the collapse of the largest and most costly of nearly two dozen Obamacare-funded health insurance co-ops may not be the program’s last failure.

The admission followed the collapse Friday of Health Republic of New York after regulators ordered the co-op “to cease writing new health insurance policies,” leaving 155,000 customers scrambling to find new coverage by the end of the year.

“If a co-op has solvency issues, and we cannot rule out that others may this year, we will work with the states so that consumers have affordable options on the marketplace,” said Department of Health and Human Services spokesman Aaron Albright. “As a startup business, we recognize not all will succeed.” Albright is a spokesman for the department’s Centers for Medicare and Medicaid Services (CMS), which administers Obamacare.

The federal government gave Health Republic $265 million in start-up money in 2012. Taxpayers also funded an additional $91 million in emergency “solvency loans” last year, for a total of $356 million. The startup funds were to be paid back after the co-ops became financially viable.

The $356 million for Health Republic went to Sarah Horowitz, a liberal New York political activist who previously launched the Freelancers Insurance Company that state officials have ranked as providing the poorest consumer service among Empire State health insurers.

Horowitz was awarded another $170 million to start Obamacare health co-ops in New Jersey and Oregon. Health Republic is the sixth of 23 Obamacare co-ops to fail since the $2.4 billion program was launched in 2011. Co-ops in Vermont, Iowa, Nebraska, Nevada and Louisiana have also been terminated.

Critics of the program said that CMS was only recognizing the reality of the disaster unfolding for the remaining co-ops.

“CMS is begrudgingly acknowledging reality,” said Grace-Marie Turner, president of the Galen Institute, a free-market health policy think tank. “They recognize that failures are going to be popping up in the near future.”
Thomas Miller, a resident scholar and health insurance expert at the American Enterprise Institute (AEI), said it’s possible up to 10 co-ops could fail this year.

Louisiana Insurance Commissioner Jim Donelon, who presided over the collapse of the Louisiana Health CO-OP, believes all of the Obamacare co-ops were doomed from the beginning.

“I think the challenge of rolling out a new health insurer at the same time as the roll out of the Affordable Care Act was a near impossible task,” Donelon said.

“It’s playing out that way in 22 of the 23 states,” he said, noting that insurance industry ratings experts found that last year all but one of the co-ops suffered large net losses.

New York insurance regulators refused to disclose financial data about Health Republic’s problems and gave no explanation for why the co-op failed.

Data collected by the independent National Association of Insurance Commissioners (NAIC), however, show that Health Republic lost $94 million in 2014, more than a third of the $241 million the co-op had in cash on hand. The total amount of losses by all co-ops was released in a report filed by the Galen Institute and AEI’s Miller.

Louisiana co-op documents obtained by TheDCNF from the Louisiana insurance department also illustrate why most co-ops are failing.

The Louisiana co-op reported it had received $60 million in federal funds, but faced $46 million in liabilities in the last two quarters of 2014. Net losses last year were $21 million. The co-op was far behind in payments to hospitals and doctors, with more than half of its accounts due being unpaid from 90 to more than 120 days.

Turner said the next co-op to go belly up could be the Kentucky Health Cooperative, which serves customers there and in West Virginia. It is the second largest co-op behind Health Republic and claimed 57,000 customers in 2014.

“Kentucky is one that we have our eye on. It’s the second biggest enrollment after NY,” Turner said.

Because the co-op was unprepared for a large enrollment, Turner said it has had to pay higher premiums to other insurers for access to their doctors, clinics and hospitals.

“Most have to rent networks from established carriers for which they have to pay a premium. And they attracted a sicker population, so they had to pay higher costs,” she said.

CMS gave the Kentucky co-op $65 million in emergency solvency funding in November 2014. The infusion of capital was to assure the co-op met state requirements for minimum cash on hand.

NAIC reported that last year the Kentucky co-op faced net losses of $127 million, with $124 million in federal cash.

Like New York, the co-op with customers in Iowa and Nebraska had high enrollment. ut because the co-op was paying $1.40 in benefits for every $1 it got in premiums, the higher enrollment only meant bigger losses.

The quickening downward spiral of the co-ops, which represented a vision of President Barack Obama and co-op activists in 2010, now is taking a toll on their once friendly relations.

The National Alliance of State Health CO-OPs, a trade association representing the Obamacare co-ops, has blamed the problems on the Obamacare law itself and programming decisions by Obama administration officials.

Following Health Republic’s collapse, Kelly Crowe, NASHCO’s CEO, released a statement saying “from practically their inception, health insurance co-ops have been hamstrung by both the structure of the program and the way in which [Obamacare] was implemented.”

Capitalization levels “were insufficient” and the program contained numerous “regulatory obstacles,” she said.

Read more: http://dailycaller.com/2015/09/28/feds-admit-more-obamacare-co-op-flops-ahead/#ixzz3n8srGutu

Newsflash! Bernie Sanders Fans: All That “Free Stuff” Will Break the Middle Class

My latest Townhall column is called, Newsflash! Bernie Sanders Fans: All That “Free Stuff” Will Break the Middle Class. Here’s an excerpt from the column.



Science fiction writer Arthur C. Clarke once said, “Any sufficiently advanced technology is indistinguishable from magic.” Similarly, it could be said that for liberals, how the real world works is indistinguishable from magic.

They want “free” birth control, health care, college, “Cash for Clunkers,” free housing for the poor and paid time off for women who are having a child. They want welfare with no preconditions for anyone who wants it, a $15 minimum wage and they want to open our borders to anyone who wants to come here illegally, have a child and live off the American people for the next 18 years.

Unfortunately, as Thomas Sowell has often said, “There are no solutions; there are only trade-offs.”Put another way, giving away “free” stuff may seem appealing, but it often has terrible consequences.

First and foremost among them, if you give too much away, you can go bankrupt. It’s not the least bit controversial to say that even with our current level of spending, we’re on pace to become Greece. You don’t have to take my word for it because even a diehard liberal socialist like Bernie Sanders admits that we can’t keep piling on debt.

“Everyone agrees that over the long-term we have got to reduce the record-breaking $13.7 trillion national debt and unsustainable federal deficit.”

Incidentally, our record-breaking debt is now up to almost $18.4 trillion and Bernie Sanders is proposing another $18 trillion in spending over the next decade on NEW programs. That’s in addition to the deficit spending we’re already doing, all of which is theoretical because at some point in the next decade or two, no one will be willing to loan us any more money and our economy will splatter like a bug on a windshield.

At that point, your kids will be wearing potato sacks, you’ll be bartering your family heirlooms for fuel and the grandparents will be eating their shoe leather after the Social Security and Medicare checks stop coming.

Is that an exaggeration? Maybe, but MAYBE NOT.


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About Half Of LEGAL Immigrant Households Use Welfare


Legal immigrant households dominate immigrant welfare use in the United States, a new study shows.

About half of all legal immigrant households use welfare, and they account for 75 percent of all immigrant household welfare use, reported the Center for Immigration Studies in a follow up to last week’s report that more than half of all immigrants in the United States use welfare.

Using Census Bureau data, CIS estimated 49 percent of households headed by legal immigrants used one or more welfare programs in 2012, compared to 30 percent of households headed by natives and 62 percent of households headed by illegal immigrants.

That number jumps to 70 percent if the legal immigrant households include kids.

There is a worker present in 85 percent of legal immigrant households, but many of them are eligible for welfare because they are not highly educated and earn low wages. Those legal immigrant households that do take advantage of welfare make up 75 percent of all immigrant welfare use.

CIS, an advocate for reduced immigration levels, found a lack of education is a bigger driver of immigrant welfare use than legal status. And because most illegal immigrants are only modestly educated, CIS concludes granting them legal status would increase welfare costs, especially for cash and housing programs. (RELATED: WSJ Admits There IS A Cost To Massive Migration Across Insecure Borders)

Legal immigrant households use more welfare overall and cash, food and Medicaid programs, CIS found. Fourteen percent of legal immigrant households use cash programs, compared to 10 percent of native households. Thirty-six percent of legal immigrant households use food programs, compared to 22 percent of native households.

(Center for Immigration Studies)

And 39 percent of legal immigrant households use Medicaid, compared to 23 percent of native households.

“Welfare use by illegal immigrant households is certainly a concern, but the bigger issue is welfare use by legal immigrants,” report author Steven Camarota, director of research at CIS, said in a statement Thursday.

The U.S. is set to add a bloc of new permanent immigrants — 10 million — in the next decade that is larger than the combined populations of Iowa, New Hampshire and South Carolina, if Congress does not reduce the number of green cards issued each year. (RELATED: NYT, Brookings Unwittingly Show How Immigration Affects Wages)

Green cards guarantee immigrants a lifetime work authorization, access to federal welfare, Social Security and Medicare, the ability to obtain citizenship and voting privileges and the immigration of their close relatives.

The U.S. foreign-born population has reached an all time high of 42.1 million — helped along by a rebounding Mexican immigrant population — and is now 13 percent of the U.S. population.

By 2023 the Census Bureau projects the foreign-born population will exceed 51 million — the largest share of total population ever recorded in American history. And nearly one in five U.S. residents will be an immigrant by 2060, largely because of legal immigration, not illegal immigration.

When $2.8 trn is not enough: US govt rakes in record tax revenue, but still overspends

Job seekers stand in line to meet with prospective employers at a career fair in New York City. © Mike Segar

Job seekers stand in line to meet with prospective employers at a career fair in New York City. © Mike Segar / Reuters

The federal government has collected $2.8 trillion in taxes over the 11 months of the fiscal year 2015, almost $200 billion than the year before. This means $19,346 for every working American. Yet Washington has overspent by $530 billion.

Most of the money – $1.379 trillion – came into the Treasury from individual income taxes. Payroll taxes for Social Security, Medicare and other entitlements accounted for $977.5 billion, while corporate taxes accounted for $268.4 billion, according to the monthly statement released Monday by the Department of Treasury. The US fiscal year begins and ends in October.


Given that the Bureau of Labor Statistics logged 149 million Americans with either part-time or full-time jobs in August, the total taxation would work out to $19,346 for every US worker.

In 2015 dollars, the US government took in $198.4 billion more than in the first 11 months of the fiscal year 2014. This time last year, the government’s revenue was at $2.684 trillion. However, in 2015 the government has spent $3.413 trillion so far, racking up a $529.9 billion deficit.

Most of the government spending goes to Social Security ($812 billion) and Medicare ($501 billion). Another $235 billion is dedicated to paying the interest on government debt. The second-biggest outlay is military spending, with the Pentagon receiving $536 billion.

In 2012, the Obama administration raised the top income tax rate from 3OB5 percent to 39.6 percent, increased the top tax rate on dividends and capital gains to 20 percent, and eliminated many exemptions and deductions for those who earned $250,000 or more in annual income.

Another 3.8 percent tax on dividends, interest, capital gains and royalties went into effect in 2013, embedded in the Affordable Care Act, commonly known as Obamacare.

Planned Parenthood gets $1M in ObamaCare grants

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The Obama administration on Wednesday awarded more than $1 million in grants to Planned Parenthood to help promote ObamaCare, a move that is drawing GOP criticism at a time when the healthcare provider is under congressional investigation.

Rep. Diane Black (R-Tenn.) blasted the White House’s decision as “unconscionable” in light of allegations of illegal activity in the health provider’s fetal tissue program, which has prompted key Republicans to call for a total defunding of the organization.

“A growing body of evidence suggests that Planned Parenthood broke federal law and now the Obama administration is thumbing its nose at Congress and taxpayers by using this backdoor maneuver to boost funding for the scandal-ridden abortion giant,” Black wrote in a statement Wednesday.

She is the lead author of three bills to defund Planned Parenthood, one of which she says has been promised a vote by House GOP leadership.

The Obama administration on Wednesday announced nearly $70 million in federal grants to groups promoting the healthcare law. The grants will go to 100 groups in 34 states, including three Planned Parenthood affiliates.

The provider’s affiliates in Iowa, Missouri and Montana will receive about $1 million in total.

Grants were also awarded to groups like the National Alliance for Hispanic Health, AIDS Alabama and Oak Hill Missionary Baptist Church Ministries. Any organization that helps sign people up for ObamaCare can apply for the grants, which can be used to help train navigators and promote the law generally.

This year’s funding pool is larger than last year’s of $60 million, though the new grants must last through 2018. It is the third round of grants from the Department of Health and Human Services.

“This year’s Navigator grantees will help expand access to local help in many states,” the Centers for Medicare and Medicaid Services wrote in a statement.

Much of the sign-ups for ObamaCare have been driven by outside help, including a group founded by Obama allies called Enroll America. That organization has faced funding challenges, however, and has downsized since the first enrollment period.

Enroll America praised this year’s funding pool, which it highlighted as an increase from that in 2014.

Obama-con: States approving huge spikes in health-insurance premiums



When insurance companies began discussing the necessary premium hikes for the third year of ObamaCare coverage, the White House was quick to dismiss the requests. State auditors would surely force insurers to admit that these requests were overblown. Barack Obama himself told a Nashville audience last month that he couldn’t see why insurers needed to hike premiums by more than a third in Tennessee, the Wall Street Journal recalls:

At a July town hall in Nashville, Tenn., President Barack Obama played down fears of a spike in health insurance premiums in his signature health law’s third year.

“My expectation is that they’ll come in significantly lower than what’s being requested,” he said, saying Tennesseans had to work to ensure the state’s insurance commissioner “does their job in not just passively reviewing the rates, but really asking, ‘OK, what is it that you are looking for here? Why would you need very high premiums?’”

The insurers must have come up with a pretty good explanation. Tennessee approved a 36% hike in premiums for 2016, and they’re hardly alone, as Louise Radnofsky and Stephanie Armour report:

That commissioner, Julie Mix McPeak, answered on Friday by greenlighting the full 36.3% increase sought by the biggest health plan in the state, BlueCross BlueShield of Tennessee. She said the insurer demonstrated the hefty increase for 2016 was needed to cover higher-than-expected claims from sick people who signed up for individual policies in the first two years of the Affordable Care Act.

Several regulators around the country agree with her, and have approved all or most of the big premium increases sought by the largest health plans in their states for the new sign-up season that begins Nov. 1.

Here’s the chart showing proposed and approved rate increases for 2016 over 2015:


It’s the third year in a row for huge rate hikes, all due to the uncertainties built into the mandate-driven system of ObamaCare. The White House explained the hikes after the first year as an artifact of sudden access to care, but by year three that explanation has worn thin. The cost curve isn’t bending downward in any phase of health care, and it’s not even bending upward any longer. It’s skyrocketing, and insurers are reflecting that in their premium hikes.

At the same time that premiums have escalated, of course, deductibles have expanded almost exponentially for some families. Consumers are paying outrageously high premiums for insurance they will almost certainly never access, thanks to the need to spend thousands more out of pocket on top of these premiums before insurers have to cover anything but wellness checks.

The above chart doesn’t take into account my own state of Minnesota. The state has not yet acted on rate increase requests from its insurers, which have the potential to outstrip anything on the WSJ’s radar. Blue Cross Blue Shield wants an average increase across its plans of fifty-four percent, while Health Partners requested average increases of 23%. In fact, UCare — which had been the low cost option heading into 2016 — has bumped its increase request by more than double this summer:

With the July filing, UCare upped its proposed average rate increase from 12 percent to 27 percent — a bump that’s more in line with increases being sought by other individual market carriers for 2016. …

At the time, Blue Cross and Blue Shield of Minnesota commanded attention by seeking an average increase of about 54 percent for 179,000 Minnesotans in the market for individuals who buy outside of employer groups.

HealthPartners sought an average increase of 23 percent for 51,860 people. UCare’s proposal applies to about 10,000 current policyholders.

The UCare proposal is just that — regulators are scheduled to release final rates this fall, and proposed increases could be knocked down by the rate review process at the Minnesota Department of Commerce.

They can be “knocked down,” but these insurers can also pack up and leave the ObamaCare system, too. They can stick with employer-based insurance and Medicare Advantage portfolios and leave the individual markets. That’s exactly what BCBS announced today that they will do in New Mexico. If that happens, then Minnesota politicians will be under the gun to explain why their constituents can’t get health insurance any longer, the same as in Tennessee, Oregon, Kentucky, and so on. All Obama will do is ask rhetorical questions and pretend that he knows risk-pool management better than those who operate them … which is exactly how we got the disaster of ObamaCare in the first place.

CBO warns debt becoming unsustainable…


CBO report forecasts unsustainable debt in long term


The economy is sluggish but growing and inflation remains low, painting a decidedly mixed picture for the federal government, the Congressional Budget Office reported Tuesday, saying the fiscal situation is improving this year but will snap back by 2018 to swelling deficits and unsustainable debt.

The inflation rate is so low that Social Security beneficiaries probably won’t get a cost-of-living raise after this year, the CBO said. But tax revenue is up and spending has stayed pat, which is helping reduce the pool of red ink in the federal budget.

Combined, those numbers mean the government will run a deficit of $426 billion in fiscal year 2015, down about $60 billion from 2014 and marking the smallest deficit of President Obama’s tenure.

SEE ALSO: Hillary Clinton heads to Ohio to boost slipping poll numbers

The good news will continue for a couple of years as the economy belatedly but fully rebounds from the recession of December 2007 to June 2009. By 2018, though, debt will rise as government spending grows and the economy will cool again, the CBO said.

“The growth in debt is not sustainable,”CBO Director Keith Hall said in presenting the estimates. “At some point, it’s going to get to a very high level. Obviously, you can’t predict tipping points, but at some point this becomes a problem.”


Democrats saw the short-term outlook as progress and said it’s time to close tax breaks and bring in more revenue for spending on investments such as infrastructure.

SEE ALSO: Old Dominion University fraternity suspended for crude signs: ‘Freshman daughter drop off’

Republicans kept their focus on the longer-term warnings in the CBOreport. They noted that taxes will remain higher than their historic average over the past five decades but deficits will persist because spending will still outpace revenue.

Budget watchdogs pleaded with all sides to go beyond the numbers and talk about solutions to persistent debt.

“I don’t know how anyone can declare victory when trillion-dollar deficits are just on the horizon,” said Judd Gregg, a former senator and a co-chairman of the advocacy group Fix the Debt. “While deficits are down this year, the real story is that they are on the rise and that our national debt is at record-high levels and growing.”

Watchdogs pleaded with presidential candidates to start talking about the national debt in their campaigns.

For the most part, that conversation has been muted. Democrats have called for tax hikes to pay for more spending, and Republicans generally have focused on other issues.

New Jersey Gov. Chris Christie, however, has sparred with former Arkansas Gov. Mike Huckabee, a fellow Republican presidential candidate, over the fate of Social Security. Mr. Christie argues that the program needs benefit adjustments to survive.

The CBO report said Social Security spending will be slightly lower than analysts projected five months ago because fewer people will qualify for disability payments. Still, the $66-billion-a-month payout this year makes Social Security the largest single federal program, which is projected to represent 5.7 percent of gross domestic product in 2025.

Medicare and Medicaid, the government’s health care programs for the elderly and the poor, also are growing quickly and are projected to reach a combined 6.2 percent of GDP within a decade.

Defense and other basic domestic spending, however, continue to dip as a percentage of government spending and the economy, reaching levels not seen in decades.

Democrats say cuts to domestic discretionary programs such as education and infrastructure have gone deep enough and that it’s time to reverse them, and they reject Republican calls for limits on growth in entitlement spending.

The CBO said the economy is recovering, though more slowly than predicted. The GDP, the report said, will grow 2 percent this year and rise to 3.1 percent next year before slowing again.

Mr. Hall said recent turmoil in stock markets has not changed those estimates.

“The economic fundamentals, at least so far, haven’t been changed,” he said.

In a more pressing finding, the CBOsaid the government has room to stave off a debt limit breach through November or December — a longer time frame than projected a few months ago. Mr. Hall credited higher tax receipts this year as the reason.

Debt held by the public will dip this year to 73.8 percent, down from 74 percent in fiscal year 2014, and will fluctuate for a few years before beginning a steady climb by 2020 and nearing 77 percent in 2025. Those are levels unseen since 1950, when the country was getting out from under the burden of World War II.