US budget deficit approaches $600bn, public debt to reach 77% of GDP

Slower revenue growth and large spending will expand the US budget deficit to $590 billion in the fiscal year ending September 30, according to the Congressional Budget Office (CBO).
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The deficit is expected to be $152 billion more than last year and $56 billion larger than CBO’s forecast in March and will equal 3.2 percent of the country’s economic output.

Such a budget deficit is more than the GDP of Sweden, Poland or Iran. In July, the US posted a $113 billion budget gap, bigger than the economies of Ukraine or Slovakia.

The largest deficit America has seen is $1.4 trillion in 2009, which dropped to $485 billion in 2014. US public debt will continue to grow and is projected at 77 percent of the country’s GDP by year-end.

On Wednesday, US public debt was more than $19.4 trillion, or almost $60,000 per citizen and $164,432 per taxpayer. Federal spending was approaching $4 trillion with Medicare/Medicaid, social security and the military being the largest budget items.

American revenues have grown by less than one percent in 2016 instead of the expected five percent. The reasons are mandatory spending for Social Security and Medicare, the federal retirement and healthcare programs for the elderly, CBO said.

The economy grew only one percent in the first half of the year, but the last months of the year will see a boost, according to CBO, bringing a two percent growth this year and 2.4 percent in 2017. This will add to hiring, putting pressure on inflation and interest rates.

Obamacare splitting in two…

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This Election Opens Final Act for ‘Obamacare’ Controversy
Inform

Increasingly, there are two ObamaCares.
There’s the one in coastal and northern areas, where the marketplaces include multiple insurers and plans. And there’s the one in southern and rural areas, where there is often little competition, a situation that can lead to higher premiums.
“There’s really two kind of stories that are playing out,” said Cynthia Cox, who studies insurer competition at the Kaiser Family Foundation.

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The trend is likely to be accelerated by the departure of Aetna and UnitedHealthcare from ObamaCare marketplaces in 2017. The loss of those insurers won’t affect all parts of the country equally, experts say.

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“The combined effect of these exits is mostly concentrated in southern states and particularly rural counties within those states,” Cox said.

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According to an analysis from the consulting firm Avalere, as of now, there will be just one insurer offering ObamaCare coverage next year in seven states: Alabama, Oklahoma, South Carolina, Wyoming, Alaska, North Carolina and Kansas. It is possible that more insurers could enter these markets before next year.

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In one county in Arizona, there might not be an ObamaCare plan available at all.
Aetna had been the only insurer offering a plan in Pinal County. Unless federal and state officials can find another insurer to fill the void in 2017, the county’s 400,000 residents will not be able to buy coverage on an ObamaCare exchange.

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The dearth of options in rural, sparsely populated areas is a far cry from what Democrats promised when selling the Affordable Care Act.

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Obama talked at the time about how the law would create a “one-stop shop” for insurance, comparing it to websites where people can look for airline tickets.
“Just visit healthcare.gov, and there you can compare insurance plans, side by side, the same way you’d shop for a plane ticket on Kayak or a TV on Amazon,” Obama said in 2013. “You enter some basic information, you’ll be presented with a list of quality, affordable plans that are available in your area, with clear descriptions of what each plan covers, and what it will cost.  You’ll find more choices, more competition, and in many cases, lower prices.” 

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In states like Oklahoma, the reality is different, with just one insurer to choose from in the online marketplace.

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“We certainly see this as an issue,” said Mike Rhoads, Oklahoma’s deputy insurance commissioner. “With only a single carrier out there, there is no competition.”
“I think competition drives price sensitivity by these carriers,” Rhoads said.

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Adding to the geographic disparities under ObamaCare, many of the same states where insurance competition is lacking declined the health law’s expansion of Medicaid. Because of that, many lower-income people have no insurance option at all.

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Still, many rural areas had few insurance options before ObamaCare came along. Back then, individual plans were pricey and difficult to find, and insurers could reject people with preexisting conditions.

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Under ObamaCare, insurers cannot deny coverage for health conditions, and lower-income people receive financial assistance to offset the cost of premiums.

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Cox, the Kaiser Family Foundation expert, said the main consequences of insurers leaving ObamaCare next year will be enrollees having to switch plans. The cost to the federal government of providing ObamaCare, meanwhile, could rise if premiums increase.

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In Oklahoma, Rhoads said he has been trying to recruit more insurers to join the ObamaCare marketplace, but found no takers.

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“We see no other carriers willing to come in,” he said. “We certainly have had conversations with some of the national players.”

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Rhoads said he spoke with two insurers that participated in ObamaCare’s first year about returning. They declined, citing the financial losses they suffered before.

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“There’s a little bit of giggling in the background when we ask this question, and we understand that they’ve been there, they’ve done that, they’ve taken their lumps,” Rhoads said.

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“As we discussed with one of the CEOs of a large HMO, who had competitive rates, they had their losses and their board of directors was just incensed that they hadn’t made money, and it caused some turmoil within the organization,” he added.

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Relying on just one insurer to offer coverage runs the risk of having ObamaCare disappear, should that insurer bail from the marketplace.

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In areas with just one insurer, it is almost always a Blue Cross Blue Shield plan. While those plans have generally expressed their commitment to continuing to offer ObamaCare coverage, they have also pressed the Obama administration for policy changes like tightening up the rules for extra sign-up periods that sick people can use to game the system.

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Some Blue Cross plans, including one in North Carolina, have expressed reservations about continuing to offer ObamaCare plans, particularly if they do not win their preferred policy changes.

Sabrina Corlette, an expert on the health law at Georgetown University, cited the geographic divergence when asked whether Aetna’s exit made her worried about the future of ObamaCare.

Corlette said her concern is “going to depend on what county somebody might live in.”

CLINTON: JOINING A GANG IS LIKE HAVING A FAMILY

Candidate cynically panders to welfare class voting Democrat

JULY 18, 2016

Hillary Clinton believes gangs are an adequate substitute for the family. She makes the remark in the video below posted by Dinesh D’Souza on July 15.
“Joining a gang is like having a family,” Clinton said during a discussion on gun violence in Connecticut. “It’s feeling like you are a part of something bigger than yourself. So we’re either going to have gangs that murder and rob and do the things that are so destructive to their members and to the community, or we’re going to have positive gangs, we’re going to have positive alternatives for young people.”

Sociologists have conclusively demonstrated the formation of gangs correlates to the breakdown of the family under state-run social welfare and is the largest contributor to crime.
“The relationship [between single-parent families and crime] is so strong that controlling for family configuration erases the relationship between race and crime and between low income and crime,” notes Barbara Dafoe. “This conclusion shows up time and again in the literature. The nation’s mayors, as well as police officers, social workers, probation officers, and court officials, consistently point to family break up as the most important source of rising rates of crime.”

Clinton ignores the fact the family is the foundation of civilization and the welfare system destroys that foundation.

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In Losing Ground: American Social Policy 1950-1980, Charles Murray reveals how welfare under Lyndon Johnson’s “Great Society” destroyed families and resulted in violence and social nihilism. Since 1964, the federal government has spent approximately $16 trillion on welfare, a figure that translates to 15% of the GNP.

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“Broken families are causally related to all sorts of indices of social failure: criminal behavior, gang membership, lower education, less general achievement, unemployment, jail sentences, out-of-wedlock births, etc.,” writes Walter E. Block.
“[Gang activity] is dysfunctional culture. For her to sit up there and embrace this as if it’s something that’s socially acceptable in the black community,” Milwaukee County Sheriff David A. Clarke Jr. said after Clinton praised gangs as a viable alternative to the traditional family.

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“She should have brought that up and said ‘we gotta change these policies so we can help the black community reconstruct their family experience so kids can make better lifestyle choices.”

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Clinton was not attempting to provide a solution to a serious social problem, however. She was courting Democrat voters ahead of the November election.

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A survey by the Maxwell Poll on the political affiliation of Americans receiving government aid shows that 81% of those in public housing, 74% on Medicaid, 67% on food stamps, and 63% receiving welfare or public assistance vote for Democrats.

Obamacare Insurers Looking for Taxpayer Bailout…

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Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration. As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits.

Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled — not through superior products and services, but through lawsuits.

Related: Get Ready for Huge Obamacare Premium Hikes in 2017

Earlier this month, Blue Cross Blue Shield of North Carolina joined a growing list of insurers suing the Department of Health and Human Services for more subsidies from the risk-corridor program. Congress set up the program to indemnify insurers who took losses in the first three years of Obamacare with funds generated from taxes on “excess profits” from some insurers. The point of the program was to allow insurers to use the first few years to grasp the utilization cycle and to scale premiums accordingly.

As with most of the ACA’s plans, this soon went awry. Utilization rates went off the charts, in large part because younger and healthier consumers balked at buying comprehensive coverage with deductibles so high as to guarantee that they would see no benefit from them. The predicted large windfall from “excess profit” taxes never materialized, but the losses requiring indemnification went far beyond expectations.

In response, HHS started shifting funds appropriated by Congress to the risk-corridor program, which would have resulted in an almost-unlimited bailout of the insurers. Senator Marco Rubio led a fight in Congress to bar use of any appropriated funds for risk-corridor subsidies, which the White House was forced to accept as part of a budget deal. As a result, HHS can only divvy up the revenues from taxes received through the ACA, and that leaves insurers holding the bag.

Related: Obamacare: Costs Go Up, Insurers Drop Out and Consumers Get Screwed

They now are suing HHS to recoup the promised subsidies, but HHS has its hands tied, and courts are highly unlikely to have authority to force Congress to appropriate more funds. In fact, the Centers for Medicare and Medicaid Services formally responded by telling insurers that they have no requirement to offer payment until the fall of 2017, at the end of the risk-corridor program.

That response highlights the existential issue for both insurers and Obamacare. The volatility and risk was supposed to have receded by now. After three full years of utilization and risk-pool management, ACA advocates insisted that the markets would stabilize, and premiums would come under control. Instead, premiums look set for another round of big hikes for the fourth year of the program.

Consumers seeking to comply with the individual mandate will see premiums increase on some plans from large insurers by as much as 30 percent in Oregon, 32 percent in New Mexico, 38 percent in Pennsylvania, and 65 percent in Georgia.

Thus far, insurers still claim to have confidence in the ACA model – at least, those who have not pulled out of their markets altogether. However, massive annual premium increases four years into the program demonstrate the instability and unpredictability of the Obamacare model, and a new study from Mercatus explains why.

Related: Obamacare: Costs Go Up, Insurers Drop Out and Consumers Get Screwed

The claims costs for qualified health plans (QHPs) within the Obamacare markets far outstripped those from non-QHP individual plan customers grandfathered on their existing plans – by 93 percent. They also outstripped costs in group QHP plans by 24 percent. In order to break even without reinsurance subsidies (separate from the risk-corridor indemnification funds), premiums would need to have been 31 percent higher on average for individual QHPs.

The main problem was that younger and healthier people opted out of the markets, skewing the risk pools toward consumers with much higher utilization rates – as Obamacare opponents predicted all along. With another round of sky-high premium increases coming, that problem will only get worse, the study predicts.

“[H]igher premiums will further reduce the attractiveness of individual QHPs to younger and healthier enrollees, resulting in a market that will appeal primarily to lower-income individuals who receive large subsidies and to people with expensive health conditions,” it concludes. “To avoid such an outcome, it is increasingly likely that the individual insurance market changes made by the ACA will have to be revised or reversed.”

Related: It’s Time to Blame Obamacare for Losing So Many Full-Time Jobs

Galen Institute senior fellow Doug Badger, one of the study’s co-authors, wonders how long insurers will continue to publicly support Obamacare. In an interview with me this week, Badger noted how critical that political cover is for the White House, but predicted it won’t last – because the system itself is unsustainable, and no one knows this more than the insurers themselves, even if they remain reluctant to voice that conclusion. Until they speak up, however, the Obama administration can keep up their happy talk while insurers quietly exit these markets, an act that should be speaking volumes all on its own.

Even the Kaiser Foundation, which has supported Obamacare, has admitted that the flood of red ink has become a major issue. “I don’t know if we’re at a point where it’s completely worrisome,” spokesperson Cynthia Cox told NPR, “but I think it does raise some red flags in pointing out that insurance companies need to be able to make a profit or at least cover their costs.”

Red flags have flown all over the Obamacare model for six years. Instead of suing the federal government for losses created by a system for which they bear more than a little responsibility, insurers should finally admit out loud that the ACA is anythingbut affordable – not for insurers, and certainly not for consumers or taxpayers. When that finally happens, we can then start working on a viable solution based on reality rather than fealty to a failed central-planning policy.

*(WHERE IS PUAL RYAN?)* – OBAMA IMPORTS 1 MILLION MUSLIMS DURING PRESIDENCY

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by CAROLINE MAY

The Obama Administration is on pace to issue more than a million green cards to migrants from majority-Muslim countries, according to an analysis of Department of Homeland Security data.

A chart released by the Senate Subcommittee on Immigration and the National Interest Friday details the surge in immigration to the U.S. from majority-Muslim countries since President Barack Obama took office in 2009.

Specifically, in the first six fiscal years of Obama’s presidency (FY2009 – FY2014), his administration issued 832,014 green cards to migrants majority-Muslim countries, the most of which were issued to migrants from Pakistan (102,000), Iraq (102,000), Bangladesh (90,000), Iran (85,000), Egypt (56,000), and Somalia (37,000).

The total 832,014 new permanent residents do not include migrants on temporary, nonimmigrant visas — which allow foreign nationals to come to the U.S. temporarily for work, study, tourism and the like. As the subcommittee notes, the number also does not include those migrants who overstayed the terms of their visas.

Obama Admin On Track To Issue 1M GCs (1)

Regardless, as the subcommittee explained in its analysis, the U.S. is playing host to immigrants from majority Muslim countries at an increasing pace.

Between FY 2013 and FY 2014, the number of green cards issued to migrants from Muslim-majority countries increased dramatically – from 117,423 in FY 2013, to 148,810 in FY 2014, a nearly 27 percent increase. Throughout the Obama Administration’s tenure, the United States has issued green cards to an average of 138,669 migrants from Muslim-majority countries per year, meaning that it is nearly certain the United States will have issued green cards to at least 1.1 million migrants from Muslim-majority countries on the President’s watch. It has also been reported that migration from Muslim-majority countries represents the fastest growing class of migrants.

Green cards, or Lawful Permanent Residency, puts immigrants on the path to citizenship and allows for lifetime residency, federal benefits, and work authorization. Included in the totals are refugees, who are required to apply for a green card after one year of residency in the U.S. Unlike other types of immigrants, refugees are immediately eligible for welfare benefits including Temporary Assistance to Needy Families (TANF), food stamps, and Medicaid.

A report from the Office of Refugee Resettlement (ORR) indicated that in FY 2013, 91.4 percent of Middle Eastern refugees (accepted to the U.S. between 2008-2013) received food stamps, 73.1 percent were on Medicaid or Refugee Medical Assistance and 68.3 percent were on cash welfare.

Green Card Totals, FY09-FY14:

Pakistan (102K), Iraq (102K), Bangladesh (90K), Iran (85K), Egypt (56K), Somalia (37K), Uzbekistan (30K), Turkey (26K), Morocco (25K), Jordan (25K), Albania (24K), Afghanistan (21K), Lebanon (20K), Yemen (20K), Syria (18K), Indonesia (17K), Sudan (15K), Sierra Leone (12K), Guinea (9K), Senegal (8K), Saudi Arabia (9K), Algeria (8K), Kazakhstan (8K), Kuwait (6K), Gambia (6K), United Arab Emirates (5K), Azerbaijan (4K), Mali (4K), Burkina Faso (3K), Kyrgyzstan (3K), Kosovo (3K), Mauritania (3K), Tunisia (2K), Tajikistan (2K), Libya (2K), Turkmenistan (1K), Qatar (1K), Chad (1K)

Cashing in: Illegal immigrants get $1,261 more welfare than American families, $5,692 vs. $4,431

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BY  PAUL BEDARD

Illegal immigrant households receive an average of $5,692 in federal welfare benefits every year, far more than the average “native” American household, at $4,431, according to a new report on the cost of immigration released Monday.

The Center for Immigration Studies, in an analysis of federal cost figures, found that all immigrant-headed households — legal and illegal — receive an average of $6,241 in welfare, 41 percent more than native households. As with Americans receiving benefits such as food stamps and cash, much of the welfare to immigrants supplements their low wage jobs.

The total cost is over $103 billion in welfare benefits to households headed by immigrants. A majority, 51 percent, of immigrant households receive some type of welfare compared to 30 percent of native households, said the analysis of Census data.

“While it is important for Americans to understand the rate of welfare use among immigrants, expressing that use in dollar terms offers a more tangible metric that is tied to current debates over fiscal policy. With the nation facing a long-term budgetary deficit, this study helps illuminate immigration’s impact on the problem,” wrote the report’s author Jason Richwine, a Harvard educated analyst of immigration data.

The new report follows another that found President Obama seeking$17,613 for every new illegal minor, more than Social Security retirees get.

Richwine noted that illegal immigrants are barred from directly receiving welfare, but instead get it via their legal children. “Illegal immigrants are barred from directly accessing most (though not all) welfare programs, but they can receive welfare through their U.S.-born children. Legal immigrant households, which have greater eligibility for welfare, cost $6,378 on average,” he wrote.

The key findings:

— The average household headed by an immigrant (legal or illegal) costs taxpayers $6,234 in federal welfare benefits, which is 41 percent higher than the $4,431 received by the average native household.

— The average immigrant household consumes 33 percent more cash welfare, 57 percent more food assistance, and 44 percent more Medicaid dollars than the average native household. Housing costs are about the same for both groups.

— At $8,251, households headed by immigrants from Central America and Mexico have the highest welfare costs of any sending region — 86 percent higher than the costs of native households.

— Illegal immigrant households cost an average of $5,692 (driven largely by the presence of U.S.-born children), while legal immigrant households cost $6,378.

— The greater consumption of welfare dollars by immigrants can be explained in large part by their lower level of education and larger number of children compared to natives. Over 24 percent of immigrant households are headed by a high school dropout, compared to just 8 percent of native households. In addition, 13 percent of immigrant households have three or more children, vs. just 6 percent of native households.

OBAMACARE BLEEDING OUT: Insurers warn losses unsustainable…

By Peter Sullivan

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Health insurance companies are amplifying their warnings about the financial sustainability of the ObamaCare marketplaces as they seek approval for premium increases next year.

Insurers say they are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether.

“Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.”

While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.”

In the short term, there is a growing likelihood that insurers will push for substantial premium increases, creating a political problem for Democrats in an election year.

Insurers have been pounding the drum about problems with ObamaCare pricing.

The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage from employers.

And a report from McKinsey & Company found that in the individual market, which includes the ObamaCare marketplaces, insurers lost money in 41 states in 2014, and were only profitable in 9 states.

“We continue to have serious concerns about the sustainability of the public exchanges,” Mark Bertolini, the CEO of Aetna, said in February.

The Aetna CEO noted concerns about the “risk pool,” which refers to the balance of healthy and sick enrollees in a plan. The makeup of the ObamaCare risk pools has been sicker and costlier than insurers hoped.

The clearest remedy for the losses is for insurers to raise premiums, perhaps by large amounts — something Republicans have long warned would happen under the healthcare law, known as the Affordable Care Act (ACA).

“The industry is clearly setting the stage for bigger premium increases in 2017,” said Levitt of the Kaiser Family Foundation.

Insurers will begin filing their proposed premium increases for 2017 soon. State regulators will review those proposals and then can either accept or reject them.

Michael Taggart, a consultant with S&P Dow Jones Indices, pointed to data from his firm showing per capita costs for insurers are spiking in the ObamaCare marketplaces.

“We made a significant change in the rules with the ACA, and we’re still working through the process to see how that market stabilizes,” Taggart said at a panel on Wednesday. “Is [a death spiral] a possibility? Sure it’s a possibility. I wouldn’t attempt to put a probability on it, because I think there are a lot of things going on.” 

One factor helping to prevent a death spiral is ObamaCare’s tax credits, which cushion the impact of premium increases on consumers.

“What we’re likely to see is more of a market correction than any kind of death spiral,” Levitt said. “There are enough people enrolled at this point that the market is sustainable. The premiums were just too low.”  

Dr. Mandy Cohen, the chief operating officer of the Centers for Medicare and Medicaid Services (CMS), said in an interview that there is “absolutely not” a risk of a death spiral or collapse in the ObamaCare marketplaces.

While acknowledging that “companies are needing to adjust” to the new system, she pointed to the 12.7 million people who signed up this year, 5 million of whom were new customers, as a sign of success.

“What brings us the most confidence about the long term stability and health of the marketplace is its growth,” Cohen said.

Another risk, should regulators reject large premium increases, is that insurers could simply decide to cut their losses and drop off the exchanges altogether.

“Given that most carriers have experienced losses in the exchanges, often large losses, it only makes sense that most exchange insurers will request significant rate increases for 2017,” said Michael Adelberg, a former CMS official under President Obama and now a consultant at FaegreBD.

“Market exits are not out of the question if an insurer is looking at consecutive years of losses and regulators are unable to approve rates that get the insurer to break-even.”

The most prominent insurer eyeing the exits is UnitedHealth, which made waves in November by saying it was considering whether to leave ObamaCare in 2017 because of financial losses. The company last week announced that it is dropping its ObamaCare plans in Arkansas and Georgia, and more states could follow.

The Department of Health and Human Services argues that the attention on UnitedHealth is overblown, given that the insurer is actually a fairly small player in the marketplaces.

It’s more important to watch what happens with Blue Cross Blue Shield plans, which are the backbone of the ObamaCare marketplaces.

There have been some rumblings of discontent from Blue Cross plans. The plan in New Mexico already dropped off the marketplace there last year after it lost money and state regulators rejected a proposed 51.6 percent premium increase. Now, Blue Cross Blue Shield of North Carolina says that it might drop out of the marketplace because of its losses.

Blue Cross of North Carolina CEO Brad Wilson said in an interview that the company had lost $400 million due to its ObamaCare business.

“We’re not alone, and I think that that also is evidence to suggest that there are systemic and fundamental challenges that we all need to have a civilized conversation about,” Wilson said.

He said a key factor in the decision on whether to stay in the market next year will be whether regulators approve whatever premium increase the company ends up proposing so as to try to make up for its losses.

Asked about the risk of a death spiral, Wilson said he is not worried about that happening “tomorrow,” but has concerns if the situation does not change over time.

“There’s not going to be something magical happen that will cause this to turn around,” Wilson said. He is pressing for changes like further tightening up extra sign up periods that insurers say people use to game the system and repealing the Health Insurance Tax, which could help lower premiums.

Cohen of the CMS said that her agency is in close touch with insurers and Blue Cross Blue Shield of North Carolina in particular. But she pushed back on talk of Blue Cross of North Carolina dropping out of the marketplace, stating flatly, “I have no concerns about them leaving the market.”

She referred to problems the company has had with its computer systems that have led to some people being enrolled in the wrong plan, along with other issues that have added to the company’s administrative costs.

“I know that they have struggled with some of their internal operations … but that is not related to anything to the health of the market itself or the risk pool,” Cohen said.

Overall, while the system set up by ObamaCare itself might be resilient, premium increases are sure to fuel Republican arguments that the law simply isn’t working.

“There’s more political risk here than anything else,” Levitt said.