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Obamacare Nears Major Goal With One Month To Go

Jeffrey Young   |   January 27, 2015    3:27 PM ET

More than 9.5 million people have signed up for private health insurance coverage this year using the Obamacare exchanges, the Department of Health and Human Services disclosed Tuesday, putting the program within striking distance of meeting its enrollment targets.

The deadline to choose a health insurance plan on the Affordable Care Act's exchange marketplaces like HealthCare.gov and Covered California is Feb. 15. Federal officials projected at least 10.3 million would be enrolled by that date, and that at least 9 million would have this form of health coverage by the end of the year. The new figures do not reflect how many enrollees have paid for their insurance, which is the final step to securing coverage.

With the technical failings of HealthCare.gov and several state-run health insurance exchange websites behind them, the marketplaces mostly are managing this year's sign-up period smoothly. The Department of Health and Human Services estimates that 42 percent of enrollees through mid-January -- 3 million people -- are new to the exchanges, while most others are renewing coverage. Enrollment for 2015 insurance plans began Nov. 15.

"We still have a lot of work to do before Feb. 15, but are encouraged by the strong interest we've seen so far," Health and Human Services Secretary Sylvia Mathews Burwell said in a press release.

The federal government is handling enrollment in 37 states, while 13 states and the District of Columbia operate their own health insurance exchanges. More than 7.1 million of the sign-ups came from those federal exchanges, while more than 2.3 million were via state-run marketplaces. The vast majority of those signing up are eligible for financial assistance: 87 percent on the federal exchanges and 70 percent in the nine state exchanges that provided this information to the Department of Health and Human Services.

The enrollment figures from state-based health insurance exchanges undercount the total number of sign-ups. Hawaii, Maryland and Massachusetts did not report how many customers automatically re-enrolled into the policies they had in 2014. Idaho launched its own exchange for 2015, and also is not reporting what share of its residents who used a federally run exchange last time are signing up again.

The Congressional Budget Office projects greater enrollment in health insurance from the exchanges this year than the Department of Health and Human Services. According to a report issued Monday, the CBO expects an average of 12 million people to have this form of coverage over the course of 2015. The same report also estimates the Affordable Care Act will cost taxpayers about 20 percent less than projected in 2010, partly because of enrollment totals and health insurance premiums that are lower than expected.

GOP Governor Expands Medicaid Under Obamacare

Jeffrey Young   |   January 27, 2015   12:14 PM ET

Indiana Gov. Mike Pence on Tuesday became the latest Republican governor to accept an expansion of Medicaid to cover more poor residents under the Affordable Care Act.

Like the expansions in other Republican-led states, Pence's plan doesn't merely broaden Medicaid, but rather uses the federal funding available to remake the program. Enrollment starts immediately, and coverage begins Feb. 1. The expansion eventually will reach 350,000 people, Pence said when announcing federal approval for the proposal at a news conference in Indianapolis.

Republican resistance to the Medicaid expansion at the state level has worn down since a Supreme Court ruling in 2012 made this part of Obamacare optional for states.

GOP governors and legislators in states like Arkansas, Ohio and Pennsylvania have extracted concessions, including increasing the role of private health insurance plans in Medicaid, from President Barack Obama's administration, which is eager to provide Medicaid coverage to as many poor Americans as possible. Including Indiana, 28 states and the District of Columbia have expanded Medicaid under the Affordable Care Act.

Pence's plan is the biggest departure from traditional, government-run Medicaid yet. The so-called Healthy Indiana Plan 2.0, as Pence dubbed it, ties benefits to monthly payments by beneficiaries below the poverty line, a first for Medicaid, and includes other features Pence billed as conservative and market-based.

"We have worked hard to ensure that low-income Hoosiers have access to a health care plan that empowers them to take charge of their health and prepares them to move to private insurance as they improve their lives," Pence said in a press release.

The Healthy Indiana Plan 2.0, or HIP 2.0, differs greatly from traditional Medicaid, under which people with low incomes and people with disabilities are covered by a government program that pays for their medical care.

Pence's program builds on the state's 7-year-old Healthy Indiana Plan, which currently covers 60,000 people with high-deductible health insurance and health savings accounts. Adults without disabilities who are currently enrolled in traditional Medicaid will be moved to the Healthy Indiana Plan, also known as HIP.

The most novel aspect of the so-called HIP 2.0 is that enrollees will have to make contributions into "POWER accounts," modeled after private-sector health savings accounts. People with incomes above poverty, which is about $11,500 for a single person, must deposit between $3 and $25 into these accounts per month. People who fail to make these payments can get their benefits taken away for six months. These contributions are optional for people making below poverty wages, but if these beneficiaries don't contribute, they receive less generous health coverage. Individuals who use these POWER accounts and receive required preventive health services will pay less for their benefits.

In addition, Healthy Indiana Plan 2.0 will provide financial assistance to qualified workers to buy into their employers' health insurance programs. The plan will also link Healthy Indiana Plan enrollees to voluntary job-training and referral services.

The Affordable Care Act provides full federal funding of Medicaid expansions through next year. States will be required to cover a portion of the cost in future years, but never more than 10 percent. State cigarette taxes will fund a share of Indiana's future expenses, and members of the Indiana Hospital Association agreed to finance another share starting in 2017. The hospital financing also will cover the cost of increasing payments to doctors and other medical providers. Hospital associations in most states support expanding Medicaid because they currently lose money when they treat uninsured patients who can't afford the care they receive.

Republicans in states including Alaska, Tennessee and Utah also are debating expanding Medicaid in some form this year.

“I continue to be encouraged by interest from governors from all across the country who want to bring health care coverage to low-income people in their states by expanding Medicaid," U.S. Health and Human Services Secretary Sylvia Mathews Burwell said in a press release. "The administration will continue to work with governors interested in expanding Medicaid to devise approaches that work for their states while keeping faith with the law’s goals and consumer protections."

CORRECTION: A previous version of this story incorrectly stated Indiana is the first state to require Medicaid enrollees above the poverty level to make monthly payments for their coverage. It also incorrectly described how much states are required to pay for the Affordable Care Act's expansion of Medicaid.

Here's How Obamacare Is Going To Affect Your Taxes

Jeffrey Young   |   January 26, 2015    9:33 AM ET

Taxes are a pain. Health insurance is a pain. This year, Americans will suffer both when they file their income taxes. Ouch.

The Affordable Care Act, aka Obamacare, inserted health insurance into tax season in two ways, affecting nearly all of us. The first is the law's mandate that almost all U.S. residents get health coverage or pay a penalty. The second is the tax-credit subsidy millions of Americans received via Obamacare's exchanges to lower their health insurance premiums.

Oh, and there are new IRS forms, too.

"The ACA has made health care a tax issue and, in that sense, everyone will see an impact on their tax return this year," said Kathy Pickering, the executive director of The Tax Institute at H&R Block. "It may potentially impact their refund."

Before you freak out, rest assured that little has changed for about 80 percent of Americans. Still, some people will have to jump through new hoops -- and might see big effects on their tax refunds or bills.

It's easy enough to figure out which camp you fall into. Here's what each group of Americans will have to do:

I Get Health Coverage From An Employer Or A Government Program Such As Medicare Or Medicaid

When you file your return, you hardly have to do anything different. There's a new line on the 1040 -- line 61, to be precise -- where you attest that you do, in fact, have health coverage. If that's the case, then mark it down here, and you're done.

"All that they will need to do is, in effect, check a box on the front of the return," Pickering said.

Make sure it's true that everyone in your household was covered, though, including those who may have had different insurance from you, she said.

For the more than 8 in 10 Americans who have one of these forms of coverage, tax filing is pretty much business as usual this year. So it's horrible, but not more horrible.

I Bought My Health Insurance From An Obamacare Exchange And Got Tax Credits

The good news is, tax credits made your health insurance more affordable. The bad news is, you now have to prove you still have insurance, and that you didn't get too much or too little of a subsidy. If your tax credit was too large, you'll have to pay back at least some of it.

But first, you'll need one of those new forms, a 1095-A. The health insurance exchanges for each state -- whether federal or state-run -- will send these to households that bought private insurance policies from them (as opposed to Medicaid or the Children's Health Insurance Program). This is your proof of insurance.

Those 1095-A forms are supposed to arrive in your mailbox by Feb. 2, so be on the lookout. You also can download them from the exchange website or call the exchange and ask it to send you one. You may get more than one form, depending on how each member of the family is covered. If you see any inaccuracies on these documents, contact your insurance exchange.

The 1095-A shows how much your total insurance premium was and how large a tax credit you got each month you were covered. You'll need that information to fill out another form, called the 8962. (Yes, a form to fill out a form.)

There's a lot of gobbledygook behind it, but basically the IRS needs to make sure you got the right amount of financial assistance for your health coverage.

When you applied for a credit, you told the exchange what you expected to earn in 2014, and that number was used to calculate your subsidy. Now, when you file the 8962 with your taxes, you're running the numbers again based on what you really made. If those amounts are different, your tax credits have to be adjusted. Those who owe the IRS can set up payment plans.

How many people will see their refunds cut (or face a tax bill), and how many will get money back? No one can say for sure. But H&R Block projects that about half of all exchange customers didn't estimate their incomes correctly, and should expect some kind of adjustment, either higher or lower, Pickering said.

It makes sense: People's incomes and lives change all the time. Maybe you got a raise. Maybe you got married. Obamacare customers are supposed to report such changes to the exchanges so their subsidies can be adjusted during the year.

Oh, here's another annoying thing: If you got Obamacare subsidies, you can't file your income taxes with the 1040-EZ. Instead, you have to use the longer 1040.

I Have Health Insurance That Isn't From A Job Or The Government And I Didn't Get Any Tax Credits

About 15 percent of people who bought their policies through an exchange didn't get subsidies, and a few million more bought policies directly from an insurance company, bypassing the exchanges. These folks have to do more than people with job-based insurance or Medicare, but less than their subsidized neighbors.

Basically, if you bought an unsubsidized plan from an Obamacare exchange, take the information from your 1095-A and put it on your 8962, and check off line 61 of your 1040. If you didn't use an exchange, you just need to care about line 61. When it comes to taxes, that counts as easy.

One more thing for unsubsidized people who used an exchange: You might still be able to get tax credits. If you earned less than four times the federal poverty level -- $46,680 for a single person and $95,400 for a family of four -- you can apply for a subsidy via the exchange. If you skipped the exchange, then this isn't possible, no matter what your income was.

I Don't Have Health Coverage At All

Obamacare's individual mandate requires most legal U.S. residents to get covered, so you might be subject to a tax penalty if you were uncovered for more than three months. The formula is complicated, but the penalty starts at $95 and goes all the way up to about $11,000. (Read this for more information.) If you didn't earn enough money to pay taxes, meaning you made less than $10,150 as a single person under 65 or more for other types of households, then there's no health insurance mandate for you, and you don't have to file a return.

There are tons of exemptions to the Obamacare mandate, but you must apply for most of them. The majority of exemptions are granted by the IRS, but some have to come from the exchange. You'll need form 8965 to include a mandate exemption on your tax return.

The idea behind the mandate was that everyone who can "afford" insurance should buy it, to avoid saddling the rest of us with the cost of their medical care. The Affordable Care Act says insurance is "affordable" if it costs 8 percent of your income. If insurance was available to you below that price and you didn't get coverage, you'll have to pay a penalty.

If you really couldn't find "affordable" coverage, then you're exempt. But you do have to document that to the IRS. Other exemptions you can claim on your tax return include living abroad or being in prison.

For some exemptions, though, you'll have to apply to your insurance exchange. Those include belonging to a religion that objects to insurance, or living in a state that didn't expand Medicaid under Obamacare and left you ineligible for low-cost or free coverage, or getting your pre-Obamacare insurance policy canceled. And the exchanges will provide "hardship" exemptions for a slew of reasons, like being evicted or filing for bankruptcy.

You can file your taxes and claim those exemptions while waiting for your exchange to tell you whether you're exempt. If it says no, then you can sort that out with the IRS later.

I Need Help!

About that. The IRS telephone hotline will probably be a nightmare this year, in large part because of budget cuts. And the exchanges' help lines will be pretty tied up through Feb. 15, when Obamacare enrollment for this year ends. There are other options, thankfully, but hurry to seek assistance so you're not last in line as April 15 approaches.

Companies such as H&R Block and accountants in your area will do your taxes with you, for a price. There are online applications such as Intuit TurboTax that also charge money. Some of these companies offer some free assistance as promotions for their paid services.

If you make less than $60,000 a year, you can use the IRS' Free File option, but you'll still have to do a lot of math yourself. If you make less than $53,000 a year, you can take advantage of tax preparers participating in the IRS' free Volunteer Income Tax Assistance program. The IRS' Tax Counseling for the Elderly program is available at no charge to people 60 and older. And Enroll America will offer no-cost local help using Intuit TurboTax.

Key Obamacare Official Stepping Down

Jonathan Cohn   |   January 16, 2015    9:14 AM ET

A senior government official with almost unparalleled authority over the U.S. health care system is stepping down, ending a tenure that included one highly publicized, highly consequential failure on Obamacare as well as significant, if less heralded, successes.

Marilyn Tavenner will resign as administrator of the Centers for Medicare and Medicaid Services, effective at the end of February, officials in President Barack Obama’s administration told The Huffington Post. Andrew Slavitt, the agency’s second-ranking official, will take over in an acting capacity. An announcement is planned for Friday.

Tavenner is the latest high-profile resignation after the botched early implementation of the Affordable Care Act. The biggest change came at the top of the chain, when Health and Human Services Secretary Kathleen Sebelius ended the second-longest tenure in the 62-year history of that cabinet position in June. Sylvia Mathews Burwell succeeded Sebelius, bringing her reputation as a seasoned manager to the position.

Like Burwell, Slavitt boasts a background in corporate management, which may aid his prospects for Senate confirmation should the president ultimately decide to nominate him for the top post. But any nominee would face a confirmation battle in a Senate newly controlled by Republicans more interested in derailing Obamacare than assuring a smooth transition of its leadership.

Tavenner isn’t a household name, but she heads an agency that spends more money than the Pentagon every year -- and, through Medicare and Medicaid, provides health insurance to nearly one in three Americans. Modern Healthcare magazine, in its most recent ranking of the 100 most influential people in health care, ranked Tavenner fifth.

Tavenner’s responsibilities have included one task that her predecessors never faced: implementation of the Affordable Care Act. Many will remember her for her management of that episode -- and, in particular, the development of HealthCare.gov, the Obamacare insurance-shopping website that launched and promptly crashed on Oct. 1, 2013. The website essentially was nonfunctional for nearly two months, creating a severe political crisis for the Obama administration and nearly unraveling Obamacare itself.

Exactly who in the administration was chiefly responsible for the debacle, and how they failed, remains the subject of great debate -- even among those who were on the inside. Steven Brill’s new book, America’s Bitter Pill, gives one deeply reported account and pins a large share of the blame on poor management by Tavenner’s agency. Tavenner herself apologized for the HealthCare.gov disaster at a House hearing in October, during which she underwent withering question by committee members. The Centers for Medicare and Medicaid Services also was later responsible for reporting inflated enrollment figures.

Less publicly, but no less importantly, Tavenner’s agency has received criticism from consumer advocates, who say that, in crafting the new rules for the Obamacare marketplaces, it went too easy on insurers, drugmakers and other key players in the health care industry.

But Tavenner’s many defenders, inside and outside the administration, point to the obstacles she faced -- including a bureaucracy not up to the task of developing such a website and enormous political pressure, sometimes from Republicans in Congress and sometimes from higher-ups in the administration. "When bad information from the bottom meets unrealistic expectations from the top," one health care lobbyist sympathetic to Tavenner told HuffPost, "bad things happen to the person in the middle."

Others cite the law’s successes, which haven’t always received the same level of publicity.

After some heroic repair work, HealthCare.gov, along with the health insurance exchange systems operated by 13 states and the District of Columbia, proved capable enough to process more than 8 million enrollments as of April. And among the more than half of the states that adopted Obamacare’s Medicaid expansion, millions more signed up for that program. On one key metric of the Affordable Care Act, its success is clear: The uninsured rate dramatically dropped after the first enrollment period, and the progress of this year’s sign-up campaign suggests more will gain coverage.

Tavenner, a nurse by training who rose to become an executive at the for-profit hospital chain HCA and the top health official in Virginia, also has a longstanding interest in finding better ways for Medicare and Medicaid to encourage medicine that is better, cheaper, or both. Here, too, there are real, if tentative, signs of progress: Health care spending is rising at historically slow rates, and research suggests hazardous medical errors inside hospitals are on the decline, although most experts think it’s too soon to know how significant or permanent these changes are.

"If I could rewind the clock, we would have had a smoother implementation last October," Tavenner acknowledged in an interview with HuffPost. But she said she was proud of what the law has accomplished. "Our quality work was huge. We were able to make progress. We're now seeing data out there, showing reduction of patient harm and increasing quality. And we've been able to do a lot on costs. Whether you look at our own actuary data or reports from outside the government, we're doing better on costs than we have in a long time."

Tavenner first joined the agency in 2010, became Obama’s nominee to lead it and won Senate confirmation in 2013 with just seven dissenting votes.

"Marilyn Tavenner has devoted five years and countless hours to the cause of improving health care quality, holding down costs, protecting the Medicare Trust Fund and expanding access to affordable health care coverage to millions of Americans," HHS Secretary Burwell said in a statement to be released Friday. "In so doing, she delivered historic results that have impacted countless lives -- both today and for decades to come -- all for the better."

At the health agency, Tavenner maintained good relationships across the aisle, according to insiders, despite the toxic political environment around Obamacare. "She’s not been viewed in town as a particularly political figure. She’s viewed as a manager, which says something about her leadership," said Karen Ignagni, president of America’s Health Insurance Plans, an industry lobbying organization.

Maintaining that reputation will be no less a challenge for Slavitt, who assumes command of the agency just months before the Supreme Court hears a new, existential challenge to Obamacare -- one that threatens to take back the subsidies millions of consumers receive to cut their health insurance costs. Slavitt, a Harvard Business School graduate, was deeply involved in HealthCare.gov development as an executive at one of the contractors that built it, Optum, a unit of the health insurance giant UnitedHealth Group. He has been the principal deputy administrator at the health agency since June.

Whatever Slavitt’s qualifications, filling the position of Centers for Medicare and Medicaid Services administrator has been a major challenge for Obama and his predecessor, President George W. Bush, in contrast to the relative ease previous presidents had with their nominees to the agency.

Before Tavenner, the last Senate-confirmed administrator was Mark McClellan, who stepped down in 2006 -- a gap of more than six years. Senate Democrats quietly obstructed Bush’s nominee, career civil servant Kerry Weems. They were outdone by their Republican counterparts when Obama took office and nominated pediatrician and health care quality expert Donald Berwick. Berwick served under a recess appointment for more than a year.

This story has been updated to include comment from Marilyn Tavenner.

Why We're Picking Walmart And CVS Over Doctors' Offices

Jeffrey Young   |   January 12, 2015    2:31 PM ET

The American health care system may finally be catching up to the rest of the 21st-century economy, in which convenience is not only expected, but demanded -- and massive retailers are driving the change.

Patients suffering everyday complaints like chest colds or ankle sprains have long faced the lamentable choice between waiting days to see their family doctors or enduring time-sucking, unpleasant and expensive visits to hospital emergency rooms, especially at night and on weekends when physicians typically aren't open for business. It's one of the most annoying aspects of the way medical care is provided in the United States.

Big chains like CVS, Walgreens and Walmart are stepping in to try to correct this market failure. These and other retailers are opening hundreds of new walk-in clinics, staffed by medical professionals such as nurse practitioners and physician assistants. They're betting that Americans craving speed, convenience and easy-to-understand prices will be willing to break their habit of expecting a doctor to handle all of their medical issues.

"People are demanding health care to react similarly to other service industries, where people have a need and they want it relatively easy," said Nancy Gagliano, a primary care physician and chief medical officer for CVS Health's MinuteClinic. "The traditional health care system really is not adequate to support the need."

Although still vastly outnumbered by doctors' offices and hospitals, retail clinics are spreading rapidly: There currently are almost 1,900 across the U.S., up more than sevenfold since 2007, according to data compiled by Merchant Medicine, a consulting firm that tracks the sector.

The time seems right for the health care landscape to include places such as CVS MinuteClinic, Walgreens Healthcare Clinic and Walmart Care Clinic, along with similar locations housed inside retailers such as Kroger, Target and Rite Aid.

For starters, patients appear eager for the clinics. When the Advisory Board Co., a Washington-based consulting firm, surveyed consumers last year, it found respondents valued being treated by a physician less than the convenience of night and weekend hours, getting seen without an appointment, and being able to fill prescriptions on-site.

"People are also more sophisticated than, I think, in the past, health care has given them credit for," Gagliano said. "They have a really good sense of when the MinuteClinic-type visit is appropriate for their needs and when it's worth waiting for their doctor for a more complex issue or more chronic and preventative-care follow-up."

CVS Health's MinuteClinic, the market leader with close to 1,000 locations in 31 states and the District of Columbia, had more than 18 million patient visits in 2013, up from 5 million just two years prior, according to the company. It plans to have 1,500 clinics by 2017.

Eric Knudtson of New York might be the prototypical retail clinic patient. Knudtson, a 23-year-old student, visited a clinic inside a New York City Duane Reade -- owned by Walgreens -- last week for a check-up. He opted for the clinic because it was convenient and because he doesn't have a regular doctor in the city, he told HuffPost.

"I just came here because it was on my way home from school," said Knudtson. The two times he used the Duane Reade clinic weren't as time-consuming as visiting a physician's office, he said. His visit last week took less than an hour, including wait time. "It seems like it's gone pretty quickly."

Locations like these offer basic check-ups plus vaccinations and treatment for minor ailments, and their medical professionals can write prescriptions. Unlike the pharmacy and grocery chains, Walmart is positioning itself as a true primary care provider, while both Walmart and Walgreens tout their services for patients with chronic diseases. Walmart sets a flat price of $40 per visit (or $4 for company employees), while CVS Health and Walgreens charge less than $100 for most treatments. Lab work, drugs, vaccines and other things carry additional fees.

Retail clinics can't replace the physician's office or the emergency room, retail executives emphasized. Doctors are better-trained than nurse practitioners and physician assistants and are more knowledgeable about their patients' medical histories. ERs are equipped to handle life-threatening medical problems that retailers cannot, and can admit the sickest patients directly to the hospitals. Retail clinics also typically offer a less-comprehensive set of services than urgent-care centers, and don't have as much high-tech equipment.

Medical societies like the American Academy of Family Physicians and the American Academy of Pediatrics have expressed other concerns about these clinics.

Records of what services a patient gets at a retail clinic may not be shared with their doctors, even though retailers can transmit them electronically or on paper. That could lead to problems such as unsafe mixing of medicines, physicians being unaware of changes to their patients' health, or tests and treatments being needlessly duplicated.

But there's also a well-documented shortage of primary care physicians in the U.S., making it harder for people to get timely appointments or even to find a family doctor. And medical schools can't churn them out quickly enough to meet the demand. This problem could become even more acute as millions of Americans get health care coverage because of the Affordable Care Act. Inadequate access to doctors also has prompted some states to loosen restrictions on what non-physician practitioners are allowed to do.

Between 40 percent and 50 percent of the patients who have visited the clinics at CVS, Walgreens and Walmart reported they have no regular primary care provider, according to executives at those companies.

At the same time, health insurance -- from employers and from the Obamacare exchanges -- increasingly requires patients to pay more when they get medical care. Retail clinics offer services at clearly marked prices that often are lower than at physician's offices and hospitals.

"We have what I term as a new age of consumerism," said Patrick Carroll, the chief medical officer for Walgreens Healthcare Clinics and a primary care physician. "They're making choices based on convenience and economics."

Another draw is that Americans are working longer -- and less flexible -- hours. Employers and employees alike welcome retail clinics that can treat workers' minor ailments quickly and get them back to work sooner, said Jennifer LaPerre, senior director of health and wellness at Walmart U.S.

"It's hard to leave work during the day hours when you need to get care. But if they need to, they certainly don't want to be gone long," LaPerre said.

For the struggling retail industry, medical clinics offer both a new source of revenue linked to the massive and growing U.S. health care market, as well as a means of driving foot traffic into their stores, where customers may buy other products.

"We really want to be able to serve that audience who probably is shopping in our stores, but who may not have access to affordable health care," LaPerre said.

Jillian Berman contributed reporting.

Supreme Court Could Kick 10 Million People Off Health Insurance

Jeffrey Young   |   January 8, 2015    3:19 PM ET

The Supreme Court might be about to blow a hole in Obamacare large enough to fit nearly 10 million people, a new analysis shows.

The high court is scheduled to hear arguments this March in a lawsuit claiming President Barack Obama's administration does not have the legal authority to give tax credit subsidies to millions of people who have insurance under the Affordable Care Act. The argument is over a small bit of wording in the law, which says subsidies can go to people buying insurance on state-run marketplaces, but not to people buying on federally run ones.

Since the federal government operates the exchanges in two-thirds of the states, a ruling for the plaintiffs would gut the Affordable Care Act.

The result: 9.6 million people living in 34 states would be forced to give up their health insurance policies, according to a report issued Thursday by the Rand Corp., a nonprofit consulting firm and think tank. That's 70 percent of the 13.7 million people Rand projects will have health insurance through the exchanges this year. The administration projects 9.1 million enrollees this year; 70 percent of that total would be 6.4 million people.

This latest legal challenge to the Affordable Care Act, called King v. Burwell, alleges that seven words in the statute -- "through an exchange established by the state" -- signify that only state-run health insurance marketplaces are permitted to dole out federal subsidies. The Obama administration, along with the congressional Democrats who wrote the law, reject this argument, and contend a full reading of the statutory language makes plain the ACA's intent is to provide subsidized health coverage to low- and middle-income households in every state.

The Supreme Court agreed to hear this case, one of several similar ones, in November, even though no federal appeals court had ruled in the plaintiffs' favor. Previously, the administration asked the justices to postpone any consideration of the suits until appeals courts issued different decisions. The Supreme Court upheld the Affordable Care Act in another major case against it in 2012, when conservative Chief Justice John Roberts joined four liberal justices in a 5-4 ruling.

The dire effects of a ruling against Obamacare subsidies in states with federal exchanges wouldn't be limited to the people who get tax credits, Rand economists Evan Saltzman and Christine Eibner conclude. At least 85 percent of enrollees get financial assistance via the federal health insurance marketplaces.

In addition to low- and middle-income subsidy recipients finding their health insurance policies unaffordable, unsubsidized customers also would be affected. The sudden withdrawal of 70 percent of enrollees, including large numbers of young and healthy policyholders, would trigger a chain reaction known in industry jargon as a "death spiral."

Health insurance companies would respond to the exit of so many customers, especially the more price-sensitive healthy ones vital to keeping overall costs down, by raising prices. Those high prices would then drive out more consumers, and those who are most expensive to insure because of poor health would be likeliest to remain. That, in turn, would lead to higher costs for insurers, causing them to further increase prices, or to leave exchanges entirely. For a 40-year-old nonsmoker, the premium for a mid-level "Silver" insurance plan initially would jump from $3,450 to $5,060 a year, the study says.

The Robert Wood Johnson Foundation and the Urban Institute issued findings similar to Rand's in a separate report published Thursday. Invalidating tax credits in federal exchange states would increase the number Americans without health coverage by 8.2 million, take away $28.8 billion in subsidies and shrink the exchange markets in those states from 14.2 million customers to 3.4 million.

State governments could forestall these consequences by establishing their own exchanges, but none have made efforts to do so since the Supreme Court announced it would hear the King case. Now, little time remains before justices issue a ruling, which will likely come in June. Similarly, Congress could rectify any ambiguity in the law's language to prevent major disruption in the majority of states, but it has not.

The threat to the Affordable Care Act comes at a time when enrollment on the exchanges is climbing and the share of Americans without health insurance is falling.

From the beginning of the 2015 enrollment period on Nov. 15 through Jan. 2, almost 6.6 million people signed up for private health plans for 2015 on the federal exchanges, along with an estimated 1.5 million or more who enrolled on state-run exchanges. And Gallup survey results issued Wednesday show the national uninsured rate dropped to 12.9 percent during the fourth quarter of last year, the lowest since the polling firm began tracking the statistic in 2008.

The Uninsured Rate Just Keeps Falling, New Survey Shows

Jeffrey Young   |   January 7, 2015   11:07 AM ET

The share of Americans without health insurance fell below 13 percent by the end of 2014, a rapid drop from just a year before and a clear sign that one of Obamacare's primary missions is succeeding, according to new data from the polling firm Gallup.

In the fourth quarter of last year, 12.9 percent of Americans were uninsured, a steep drop from 17.1 percent a year before. The change was driven mainly by increased coverage through the Affordable Care Act's health insurance exchanges and by the expansion of Medicaid access in more than half the country, the Gallup-Healthways Well-Being Index shows, based on more than 43,000 interviews conducted between Oct. 1 and Dec. 30.

President Barack Obama and the congressional Democrats who enacted the Affordable Care Act had broader aims for the law than just covering the uninsured, including providing stronger consumer protections for health insurance customers and curtailing unsustainable increases in national health care spending. But extending coverage to uninsured people, especially those with low and moderate incomes eligible for financial assistance, is the most tangible effect of the law, and survey after survey shows it's working. These gains are threatened, however, by the newly empowered Republican Congress and the Supreme Court.

"The Affordable Care Act has accomplished one of its goals: increasing the percentage of Americans who have health insurance coverage," the Gallup report says. "The uninsured rate as measured by Gallup has dropped 4.2 points since the requirement to have health insurance or pay a fine went into effect. It will likely drop further as plans purchased during the current open enrollment period take effect."

obamacare uninsured
Source: Gallup-Healthways Well-Being Index

The second Obamacare sign-up period began Nov. 15 and ends Feb. 15. As of late December, 6.4 million people had enrolled into private health insurance policies for 2015, about 2 million of whom were new to the Obamacare exchanges.

The Department of Health and Human Services estimates that more than 9 million people will be covered by private Obamacare exchange plans by the end of the year. In addition, nearly 10 million more people are covered by Medicaid or the Children's Health Insurance Program, two joint federal-state benefits for low-income households, than were covered before Obamacare enrollment kicked off in October 2013.

The new Gallup survey shows declines in the uninsured rate for all segments of the working-age population, and the share of people ages 18-64 without coverage stood at 15.5 percent in the fourth quarter of 2014. The largest decrease was among people ages 18-25, a population that experienced a 6.1 percentage point drop in uninsurance since 2013 to 17.4 percent. Almost all people 65 and older have coverage through Medicare. Low-income Americans and blacks also saw disproportionate declines in their uninsured rates, Gallup found.

Other surveys have shown the improvements in the uninsured rate to be geographically uneven. Southern states with higher-than-average uninsured populations, for instance, rejected the Medicaid expansion, which the Supreme Court made optional for states in 2012, leaving millions of low-income residents uninsured.

And Obamacare's coverage expansion is in grave jeopardy this year.

Republicans newly in control of Congress after the November midterm elections aim to dismantle the law, starting with a House vote this week on a bill that would weaken the Affordable Care Act's requirement that large employers provide health benefits or pay penalties. Obama has vowed to resist these efforts.

But the more serious danger for Obamacare, and for the millions who have gained coverage under the law, is King v. Burwell, a case now pending before the Supreme Court. The plaintiffs claim the federal government lacks the legal authority to provide health insurance subsidies to people living in states that didn't establish health insurance exchanges and allowed the Department of Health and Human Services to do so instead. A ruling against the Obama administration would invalidate the tax credits 85 percent of exchange enrollees receive, making their insurance policies unaffordable and likely causing most to drop their coverage.

Obamacare Sign-Ups Reach 6.4 Million

Jeffrey Young   |   December 23, 2014   10:32 AM ET

Enrollments via the federally run Obamacare health insurance exchanges on HealthCare.gov surged leading up to a big deadline last week and reached almost 6.4 million after the first month of sign-ups, the Department of Health and Human Services announced Tuesday.

That tally, including about 1.9 million new customers and the re-enrollments of millions more already covered by Obamacare plans, combined with more than 1 million sign-ups so far through the exchanges operated by 13 states and the District of Columbia, appears to put the program on target to surpass Burwell’s self-imposed target of 9.1 million total enrollments by the end of next year. The open enrollment period for health insurance policies purchased on these exchanges for 2015 started Nov. 15 and ends Feb. 15, 2015.

“We still have a ways to go and a lot of work before Feb. 15, but we do have an encouraging start,” Health and Human Services Secretary Sylvia Mathews Burwell said at a press conference Tuesday. “This law is working, and families and businesses and taxpayers are better off as a result.”

Compared to the chaotic rollout of the Affordable Care Act’s exchanges in October 2013 that resulted in sluggish sign-ups for the first months of enrollment into 2014 health coverage, the second enrollment period is running remarkably smoothly at the federal and state level. That’s in spite of lingering technical issues and major public outreach and educational challenges facing exchange authorities and insurance companies seeking to usher existing customers through a potentially confusing renewal process while searching for millions of uninsured to sign up.

“A month ago, people were raising questions about whether or not consumers would actually come to the marketplace,” Burwell said. But the HealthCare.gov website is working, more insurance companies are offering policies compared to last year, and premium increases are modest on average, she said.

These private health insurance plan enrollments as of Dec. 19 are in addition to the almost 10 million people who have signed up for Medicaid or the Children’s Health Insurance Program since last October. The Affordable Care Act broadens Medicaid access in states that elect to participate, but 22 states have not done so, leaving millions of low-income Americans uninsured.

Just 106,000 people managed to sign up during the first month of the inaugural enrollment period, while more than half a million chose policies during the first week of this year’s campaign.

The improvements at the federal level are mirrored in the states with their own insurance marketplaces. States with troubled exchanges last time around, including Maryland and Massachusetts, have rebounded, and other states still having technical problems, such as Minnesota, nevertheless are signing up consumers. The exchanges in the populous states of California and New York performed well during the first enrollment period and continue to enroll large numbers of residents.

“It definitely looks like it’s going to work," Caroline Pearson, vice president of the health care reform practice at the consulting firm Avalere Health, said before the HHS announcement. "All signs are that the markets are working really effectively. You’ve got an increased insurer participation and very stable premiums,” she said. The average nationwide price increase for next year is 5.4 percent, but there's a lot of variation and some premiums even went down, according to PricewaterhouseCoopers.

In addition to the 1.9 million new customers who signed up, about 4.5 million current customers have re-enrolled for next year. Most of them automatically were rolled over into their current plans -- or the next closest thing if their policies have been discontinued -- for 2015.

Significantly, however, more than one-third of existing customers took active steps to re-enroll, rather than opting to be automatically re-enrolled, Burwell said. According to the department’s preliminary analysis, a share of current enrollees in the mid-to-high 30 percent range did so; this was more than expected based on how people with other types of coverage, including job-based health benefits, tend to keep the same plans every year rather than comparison shop, she said.

“In looking at what happens with people in employer-based plans and other things, I think probably wouldn’t have expected a number that high in terms of people’s behavior,” Burwell said. This could mean fewer of consumers than feared will suffer sticker shock next month.

Shopping around is crucial to consumers looking to avoid big rate hikes, especially for the more than 8 in 10 enrollees who receive Obamacare tax credits. Volatility in health insurance premiums, especially among those plans used to set the value of the Obamacare subsidies, means more than 70 percent of people who signed up for these plans could save money by changing to new policies, according to HHS.

Consumers who are automatically re-enrolled can switch to a cheaper policy for February if they make a change by Jan. 15, and all enrollees can choose a different plan for the rest of the year by Feb. 15. But anyone who didn’t choose a new plan by Dec. 15 will have to keep what they have in January, unless they opt to go uninsured for the month instead.

Avalere Health expects 4.5 million to 6 million new customers will sign up for health insurance via the exchanges by Feb. 15 and that total enrollments will reach 9.5 million to 11 million, including renewed coverage for current customers. The Congressional Budget Office projected enrollments would reach 13 million by the end of 2015.

Despite the positive trends for 2015 enrollment, projections from Avalere, the Congressional Budget Office and the Department of Health and Human Services are lower than before the beginning of the first-sign up period, and evaluations of the exchanges’ performance during the 2015 sign-up phase should consider that, Pearson said.

“It looks good relative to the expectations or the goals that HHS set for themselves, but it looks a bit disappointing relative to where we thought we would be a year ago,” Pearson said. “It has proven harder to do the outreach and get people to sign up than we expected and it’s been harder to keep people enrolled.”

Exchange enrollments for 2014 peaked at more than 8 million, but dipped to 6.7 million as of October as a share of customers gave up their plans, for reasons including not being able to afford the premiums, not valuing the coverage, gaining employment at companies that offer health benefits or enrolling into Medicaid because their incomes fell. HHS expects 83 percent of the total number of enrollees as of Feb. 15 to still be covered by exchange plans at the close of 2015.

Pearson expects enrollments to spike again by Jan. 15, as current customers who didn’t shop around scramble for lower-cost policies for the rest of the year, and then again when the final deadline arrives on Feb. 15.

This article has been updated with additional information from a news conference with Health and Human Services Secretary Sylvia Mathews Burwell and from a federal report.

To see an estimate of how much your health insurance might cost, use this calculator from the Henry J. Kaiser Family Foundation:

Hurry Up! Big Obamacare Deadline Coming Monday

Jeffrey Young   |   December 12, 2014    7:30 AM ET

The first Obamacare enrollment deadline for next year is just three days away, meaning Monday is the last day for people in most states who buy their own health insurance to choose a plan they can begin using Jan. 1.

If you're already a customer of a plan selected from a health insurance exchange marketplace or directly from an insurance provider, or if you're uninsured now and looking for coverage for the beginning of the year, there's no more time to waste. Here's are some don't's and do's that last-minute health insurance consumers should consider before the deadline in your home states.

"Don't wait until Sunday. Don't wait until Monday after work," said DeAnn Friedholm, the health care reform campaign director at Consumers Union. "It is complicated."

Don't delay!

If you're one of these people and don't visit HealthCare.gov or your state's exchange, you won't be able to get a new plan until February, and the last chance to choose a plan for any part of next year is Feb. 15 (except under special circumstances). Five state's exchanges have different deadlines: Dec. 18 in Maryland and Dec. 23 in Idaho, Massachusetts, Rhode Island and Washington state. These deadlines only apply to people who buy health insurance through an exchange, a broker or directly from an insurer -- not those who get health benefits from their jobs or a government program like Medicare or Medicaid.

There are a lot of factors to consider, like what doctors and hospitals you can access, what drugs and medical services are covered, how much you'll have to pay out of pocket when you get health care, and what the monthly premium is. Sorry -- there will be some math.

To prepare, you should have some information and documentation handy, like your family members' Social Security numbers and last year's tax returns or something else to verify your income, which is how subsidies are calculated.

Don't Stand Pat!

Maybe you got a really good deal on the health insurance you have now, and you like it, so you figure you're all set. While it's true that the health insurance exchanges in most states (check with the exchange to find out about where you live) will automatically roll you into the same plan for next year if it's still available, there are a lot of good reasons shop around.

"Don't assume because you have something from last year that it's still the best value for you," Friedholm said. "There are real savings here to be had for many, many people." The Department of Health and Human Services estimates that more than 70 percent of current Obamacare enrollees could save money next year by switching to a new plan with a similar level of coverage.

Monthly premiums for exchange policies are going up and down all over the place and there are new plans on the marketplaces. It's smart to check whether you can find something more affordable.

Don't assume you don't qualify for financial assistance: 85 percent of this year's Obamacare enrollees did, and tax credits are available to people who earn up to four times the federal poverty level, or about $94,000 for a family of four.

For those who get subsidies, shopping is crucial because of the complicated way the tax credits are calculated. The value of the subsidy is linked to the cost of the so-called benchmark plan in every geographic area, and those prices went down in many places. These lower premiums mean smaller subsidies. Even if the sticker price for your current plan isn't going up much, you could end up paying much more by not finding a less expensive alternative because your tax credits will be worth less. (Read a more detailed explanation here.)

If you are automatically renewed into your existing plan and get a scary bill for January, you can switch to something else for the rest of the year, but you're stuck with that plan for at least a month (unless you cancel it outright and go without coverage).

It's also vital to visit HealthCare.gov or a state exchange to update your household's income information. If you expect your income to rise and you and don't notify the exchange, you may have to pay back part of your subsidy.

Do Your Research!

The plan you have now may have changed in ways other than price. Your doctor or hospital may not be in the network anymore, or may be available through a different plan. The amount you pay when you get health care may be different, as might the services the policy covers. The journalism nonprofit ProPublica created a useful tool that helps you compare benefits in this year's insurance plans with next year's. Find it here.

The trickiest thing about choosing insurance is finding a balance between a decent monthly premium while not exposing yourself to out-of-pocket costs like deductibles and copayments you can't afford. For example, if you know you'll have frequent or big-ticket health care needs next year, it may make sense to pay a higher monthly premium so your out-of-pocket costs are lower, Friedholm said.

Do Ask For Help!

To get information about the basics, like what health insurance jargon means or what factors you should consider when choosing a plan, try the Consumer Reports Health Law Helper. The exchanges also have telephone hotlines, and can direct you to in-person help at no cost in your community. Private insurance brokers also can assist consumers at no charge.

To see an estimate of how much your health insurance might cost, use this calculator from the Henry J. Kaiser Family Foundation:

CORRECTION: An earlier version of this story misreported the deadlines in five states. The post has been updated.

Grubergate Hearing Is Gamechanger For Obamacare. Just Kidding

Jeffrey Young   |   December 9, 2014    6:22 PM ET

It took nearly four hours, but the House Oversight and Government Reform Committee finally settled the question once and for all about whether Obamacare was a good idea or a bad idea.

Yeah, right. Of course that’s not what happened.

The committee came together for a hearing on Tuesday that was intended to make Massachusetts Institute of Technology economist and Obamacare consultant Jonathan Gruber answer for his demeaning comments about American voters and his assertions that President Barack Obama’s administration and Democratic lawmakers designed the Affordable Care Act in a convoluted way to fool the public.

Gruber's comments sparked controversy last month after videos of them surfaced online. "Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical to get anything to pass," he said of the health care overhaul.

Rep. Elijah Cummings (Md.), the senior Democrat on the committee, summed up the purpose of the hearing this way: “As far as I can tell, we are here today to beat up on Jonathan Gruber for stupid -- I mean absolutely stupid -- comments he made over the past few years.” He was only partly right.

Beyond the nominal focus on an uncharacteristically diffident Gruber, the hearing was also about providing Republicans on the committee a chance to remind everyone how terrible Obamacare is and how much they hate it, helping them make the case that it’s OK for the Supreme Court to gut it.

“The history of design, passage and implementation with the law is fraught with half-truths and deception,” committee Chairman Darrell Issa (R-Calif.) said at the top of the hearing, in case anyone watching was unfamiliar with the GOP position on Obamacare.

Meanwhile, Democrats emphasized things like how the law has signed up millions of people into health coverage, including 10 million who had none before. They also noted that Congress debated the Affordable Care Act for more than a year, holding dozens of hearings, as opposed to engaging in a shadowy conspiracy to dupe the public.

This went on for hours -- four more hours in a campaign of more than four years by Republicans to undermine the Affordable Care Act, and the less-effective Democratic efforts to counter it. The net result: The law is still in place, and public opinion on it has barely changed since 2010. One poll this month found that 80 percent of Americans aren't even paying attention to the Gruber situation anyway.

The speeches and questions from GOP panelists amounted to a greatest hits compilation of anti-Obamacare talking points. The list of grievances included: Obama’s broken promise that no one would lose their health plan when the law took effect, the cost of the law, the false “death panel” claim that Obamacare will cut off old people from health care, the early failure of HealthCare.gov and the administration misreporting how many people enrolled.

Rep. Paul Gosar (R-Ariz.) even brought up Benghazi for good measure.

The Gruber videos gave the GOP fresh fodder for their anti-Obamacare campaign, and the Harvard-educated professor himself proved an irresistible target -- a personification of conservative distaste for liberals, eggheads and the Democrats who wrote the Affordable Care Act.

“You said what they were all thinking when they wrote Obamacare, that they knew what was best for my constituents,” said Thomas Massie (R-Ky.).

And that’s why Cummings chastised Gruber for bringing the negative attention to Obama’s signature domestic initiative, which already isn’t very popular. “Dr. Gruber’s statements gave Republicans a public relations gift in their relentless political campaign to tear down the ACA,” he said.

Ever-present in the hearing room was the upcoming Supreme Court consideration of a lawsuit that would take away coverage from more than 4 million people. The plaintiffs in that lawsuit contend that the wording of one line in the law means the federal government can’t issue tax credit subsidies to people in states that didn’t create their own health insurance exchanges (which is about two-thirds of them).

Some Republicans, including incoming Senate Majority Leader Mitch McConnell (Ky.), see this lawsuit as the best chance to crush Obamacare. And when one of the Gruber videos featured him seemingly agreeing with the plaintiffs' argument in 2012, conservatives seized on it as the only piece of available evidence that Obamacare’s framers intended this to be the case, apart from that ambiguous phrase in the law.

At the hearing, Gruber stressed that he always calculated that tax credits would be available in every state, and couldn’t remember why he’d said the opposite. His best explanation in hindsight, he said, is that maybe he thought the federal government wouldn’t finish its exchanges in time, depriving people in those states of subsidies. “It’s a very clear reading of the law that tax credits should be available to citizens in all states, regardless runs the exchange,” he said.

“It’s not clear. That’s where there’s a Supreme Court case,” said Rep. Scott Desjarlais (R-Tenn.), one of several Republicans including Issa whose comments on the subject assumed the plaintiffs in the Supreme Court case to be right.

Gruber attempted to draw a distinction between his role as a policy adviser and his lack of role as a political or legislative strategist. Republicans, who have been promoting Gruber as the most important person behind a law nicknamed after another person, didn’t accept that.

“Professor Jonathan Gruber is considered by many as the architect of Obamacare,” Issa said.

“I was not the architect of President Obama’s health care plan,” Gruber said. Obama agrees.

Gruber also apologized over and over for his previous remarks, which didn’t do much to satisfy anyone on the committee.

It didn’t help Gruber’s case that he repeatedly dodged demands from GOP lawmakers that he fully disclose how much money he made from government contracts. “The committee can take that up with my counsel,” he said a bunch of times. Lawmakers really don’t like when you do that, and Issa said he’d subpoena Gruber if he needed to.

Gruber said it again when Rep. Jason Chaffetz (R-Utah) pressed Gruber to produce documentation of the health care reform work he did for government agencies. “Do you have documents?” Chaffetz asked during an exchange that pretty well demonstrated how little actual information would come out of this hearing.

“Do I own documents?” Gruber replied. “I have all sorts of documents. I have a piece of paper in front of me.”

U.S. Experiences Unprecedented Slowdown In Health Care Spending

Jeffrey Young   |   December 3, 2014    4:01 PM ET

The amount the United States spent on health care went up last year by the smallest amount since federal scorekeepers started tracking these dollars half a century ago, according to an audit issued Wednesday. The news might come as a shock to Americans struggling to keep up with rising costs.

Combined spending on health care by households, businesses and the government rose 3.6 percent to $2.9 trillion in 2013, the fifth straight year it increased by less than 5 percent following decades of faster growth, the Office of the Actuary, an independent office within the federal Centers for Medicare and Medicaid Services, reported in the journal Health Affairs. Health care accounted for 17.4 percent of the whole economy, the same as in 2012.

To Americans facing ever-higher health insurance premiums and bigger out-of-pocket costs at the doctor’s office, hospital and pharmacy, however, these promising trends may seem at odds with their own lives and household budgets.

There’s a disconnect between the big-picture numbers and people’s perceptions because Americans’ wages aren’t rising, meaning health care costs eat up more of people's incomes, and because insurance plans increasingly require patients to pay a bigger share of the bill when they use the health care system, said Larry Levitt, senior vice president at the Henry J. Kaiser Family Foundation.

“The fact that health care spending growth has been so low for a number of years now does trickle down to what people themselves are actually paying out of their own pockets,” Levitt said. “The problem is, even when health care spending is growing so slowly like this, when people’s incomes are stagnating, it still doesn’t necessarily feel so good.”

Even as the national numbers look rosier, the conditions for consumers seem about the same. Last year, households were responsible for 28 percent of health care spending -- like insurance premiums and out-of-pocket costs -- the same share as in 2010, the new audit shows.

Still, the broad benefits of less health care spending growth to the U.S. economy and the federal budget are clear: Less of the economy devoted to health care means more money that can be spent on other things consumers and businesses want. Lower growth in spending also eases the burden on taxpayers funding programs like Medicare and Medicaid.

The lower rise in national health care spending in 2013 was the result of a mix of factors, the Centers for Medicare and Medicaid Services actuaries report. These figures account for the prices paid for health care and the amount of services and products people used.

Spending on health insurance, Medicare, hospitals, physicians and patients’ out-of-pocket expenses rose more slowly than in 2012, as did overall prices for medical care and products. But spending on prescription drugs and Medicaid grew faster in 2013 than the year before.

The Office of the Actuary expects these record-low rates of increase won’t continue forever. Spending is projected go up faster this year and in the near future, though it’s still expected to be slower than during prior decades. U.S. health care spending more than doubled from 2000 to 2013, and it increased more than by a factor of more than 100 since 1960.

Health Care And The Economy Grow Together, And Apart

us health care spending

This year, the agency projects health care spending will increase more than 5 percent to $3.1 trillion, driven in part by faster economic growth and in part by new Obamacare spending on subsidized health insurance and Medicaid coverage for millions of people, according to a separate report published in September.

The causes of the slowdown and what the future holds for health care spending overall and individual consumers can’t be precisely pinned down with the information available, Levitt said. “Everyone’s crystal ball is fuzzy, so there’s no telling for sure what’s going to happen,” he said.

The Office of the Actuary maintains, as it has for several years, that slower growth is mostly the result of hangover from the Great Recession that ended in 2009 and the sluggish recovery that followed, and that the spending growth will tick back up when the economy strengthens. During economic downturns, workers lose jobs -- and with them, pay and insurance -- and use less health care. When those jobs and benefits return, past experience shows health care spending tends to increase more quickly again.

But that explanation can’t account for major changes occurring in the U.S. health care system, starting with the Affordable Care Act, also known as Obamacare, which became law in 2010. Although the report issued Wednesday doesn’t account for the millions who gained health coverage this year because of Obamacare and the spending that resulted, the law had direct and indirect effects on the health care system before 2014.

President Barack Obama credits the law that bears his name with part of the slowdown in health care spending increases, and the government actuaries partly agree. According to the report, cuts in Medicare payments to health care providers and insurers and other policies in the law helped constrain spending last year. But the actuaries also note other parts of the ACA, like improved Medicare prescription drug coverage, increased some spending.

The effects of Obamacare and of health care companies operating more efficiently are hard to measure, making it impossible to prove whether the current period of slow spending growth is just a dip related to the recession or a more promising development, Levitt said.

“There is something else going on here,” Levitt said. “It sounds like a cop-out to say that we can’t quantify the effects of the Affordable Care Act or changes in health care delivery, but that doesn’t mean it’s not true,” he said. “There’s reason to be cautiously optimistic that the kinds of structural changes that have occurred in health care will help keep cost increases lower in the future, even if the economy improves.”

Who Spends All That Money?

us health care spending

Who Gets All That Money?

us health care spending

Obamacare Sign-Ups Near 500,000 After First Week

Jeffrey Young   |   November 26, 2014   10:50 AM ET

More than 460,000 people enrolled in a private health insurance plan on the federally run Obamacare exchanges in 37 states during the first week of the sign-up period for 2015 coverage, the Department of Health and Human Services announced Wednesday.

These enrollments are almost evenly split between renewals of existing customers and new sign-ups, according to a report issued by the department. More than 1 million people have submitted applications for financial assistance and coverage and almost 1.6 million have reviewed prices for insurance using HealthCare.gov's window-shopping feature between Nov. 15, the opening day of the three-month health insurance exchange enrollment period, and Nov. 21, the department disclosed.

President Barack Obama's administration aims to sign up more than 9 million people for private health insurance via these exchange marketplaces by the close of the enrollment period on Feb. 15, including renewing most of the approximately 7 million people who already have insurance policies obtained through the federally operated exchanges and those run by 13 states and the District of Columbia.

"We had a solid start, but we have a lot of work to do every day between now and February 15," Health and Human Services Secretary Sylvia Matthews Burwell said in a press release.

Last week, the Department of Health and Human Services was forced to acknowledge it overcounted Obamacare health insurance enrollments for this year by hundreds of thousands by including people who purchased dental plans, after a report by Bloomberg News revealed the error, which was uncovered by the House Oversight and Government Reform Committee.

During a conference call Wednesday with reporters, Burwell pledged greater transparency about the Obamacare exchanges. The Department of Health and Human Services will issue weekly and monthly reports on health insurance exchange enrollment, Burwell said.

The number of enrollees during the first week of the current sign-up push is more than four times the number who selected health insurance plans during all of October 2013, when the exchanges launched amid crippling technical problems.

States including Kentucky, Maryland and California that have their own exchanges also have reported strong enrollments so far.

Half a million enrollees in a week puts federal Obamacare officials on pace to sign up close to 1.8 million people during the first month, but the system remains far from the 9.1 million target for 2015 enrollees, which Burwell established earlier this month. The administration is standing by that aspiration, however, she said.

"We are staying with that number," Burwell said. "We have a lot of work before us, and we're going to continue focusing on that."

As of last month, nearly 7 million people had health insurance policies purchased through an exchange. The federal marketplaces and most state-run exchanges will automatically renew customers into their same plans for next year if they don't choose a different one. But with health insurance premium increases and decreases varying widely across the nation -- especially for the least costly and most popular policies on the market in 2014 -- consumers who fail to shop around could wind up paying much more by standing pat instead of seeking more affordable plans for next year.

"We are strongly urging and encouraging everyone to come back, make sure your information is the most up-to-date," Burwell said. "For many, many people it is very important to come back and shop."

The deadline to choose a health insurance plan that will be in place on Jan. 1 is Dec. 15. Current enrollees who automatically are renewed into their policies can still switch to a new one for the rest of next year after that date, up to the final deadline for 2015 coverage on Feb. 15.

This post has been updated with details from a conference call Burwell had with reporters.

Obamacare Penalty Could Cost More Than You Expect

Jeffrey Young   |   November 21, 2014    7:32 AM ET

Considering going without health insurance next year? Be careful -- it could cost more than you think.

As you’ve probably heard, Obamacare requires most U.S. residents to obtain some form of health coverage, either from a job, a private insurance company or a government program like Medicaid.

Failing to do so could mean taking a hit on your taxes. There’s been a lot of attention paid to the $95 tax penalty for people who are uninsured this year. But in reality, few people will pay that little, and high-income households could owe thousands of dollars when they file their 2014 taxes. Plus, the minimum penalty more than triples for the 2015 tax year.

Don’t expect to hear much about the mandate during the big enrollment push under way. Although the individual mandate is a critical part of Obamacare, it’s politically toxic. Plus, focusing on the positive benefits of the law has proven more effective at increasing enrollment -- and decreasing the number of people who’d be penalized -- than emphasizing the negative parts of it, said Anne Filipic, president of Enroll America, a nonprofit promoting Obamacare sign-ups.

“We are continuing to lead with the facts about what’s available to consumers, and especially the message about financial assistance,” Filipic said. “We want to be careful not to talk about it in a threatening way.” Information about the mandate and penalties will be secondary, and the group plans to emphasize it closer to the February deadline to use the the health insurance exchanges to sign up for coverage that will be in effect next year, she said.

An April Enroll America survey found that the mandate motivated some people who signed up during the first Obamacare enrollment period, which ended in April. Nineteen percent said they wouldn’t have enrolled without it, and another 21 percent said they weren’t sure if they would have.

Still, President Barack Obama’s administration believes promoting the subsidies available to low- and middle-income families and emphasizing the cut-off date is a better way to boost sign-ups. “Our primary focus is going to be on affordability and deadlines. That’s what we know really works and drives people,” a senior administration official told The Huffington Post.

But the individual mandate is a big and complex change in the law, and taxpayers need to understand how it affects them. That’s especially true now. Enrollment on the Affordable Care Act’s health insurance exchanges began Saturday and runs through Feb. 15. Except under special circumstances, like having a baby, consumers who want to use these online marketplaces will have to sign up now or wait until next year to get for private insurance. (However, there’s no deadline for Medicaid and Children’s Health Insurance Program applications.)

Considering an estimated 87 percent of Americans already have health coverage and the slew of exemptions from the individual mandate, not many people actually will owe penalties if they aren’t covered. For those who do owe, the penalty will likely cost less than health insurance -- but they'll be exposed to potentially unlimited expenses in the event of a serious injury or illness.

The individual mandate penalty is calculated as the greater of either a set dollar amount or a percentage of income, and it varies from $95 to about $11,000.

To protect lower-income families from big expenses, and to more strongly push higher-income people to get covered rather than pay the extra taxes, there are two methods for figuring out the penalty. You would pay either as a set dollar amount per person -- $95 per adult and $47.50 per child, up to $285 this year -- or a percentage of household income, whichever is higher.

For the 2014 tax year, higher-income people who are uninsured probably would wind up paying 1 percent of their taxable income minus $10,000 to $22,400, depending on family size and other factors. That could be as much as $11,000, which is the maximum possible penalty, and is based on the national average price for a "bronze" insurance plan available on the Obamacare exchanges.

The minimum penalties get a lot higher next year. They start out at $325 per adult and $162.50 per child, up to a maximum of $975 per household, or 2 percent of household income (after subtracting that $10,000 or more), whichever is more. The maximum penalty for 2015 will be about the same as the maximum penalty for 2014.

A family of four with an income of three times the federal poverty level -- about $70,650 -- would owe around $500 this year, and more than double that in 2015, according to a calculator created by the Tax Policy Center.

People who owe these penalties will see them deducted from their income tax refunds or added to their tax bills. Unlike other taxes owed, though, not paying isn’t a crime, and the IRS can’t garnish the wages or put liens on the property of people who don’t pay it.

Plus, there are a whole lot of exemptions from the individual mandate.

They include if you earn too little to file federal income taxes or if the cheapest plan you can find costs more than 8 percent of your income. People with religious objections to insurance also don’t have to get covered. Undocumented immigrants aren’t allowed to use the Obamacare exchanges, so they also don’t have to comply with the individual mandate. People who live in states that didn't adopt Obamacare’s expansion of Medicaid are exempt if they would have qualified for the program. What’s more, there’s a “hardship” exemption the federal government has defined very broadly.

Obamacare includes the individual mandate as a way to nudge people into health coverage and discourage “free riders” who use health services when they could afford insurance. Being insured for at least nine months a year fulfills the mandate.

Obamacare’s authors call it the “individual shared responsibility provision.” As the theory goes, a health insurance market that’s open to everyone, including those with pre-existing conditions, must include as many people as possible, especially those who don’t have high medical bills and will pay into the pool without drawing down much. As healthy people age or become unlucky enough to get sick, this is supposed guarantee there’s a health insurance system in place to take care of them.

In addition, more people covered means fewer people getting treated at emergency rooms and not paying the bills, which costs taxpayers billions in the form of special Medicare and Medicaid funding that goes to hospitals treating large numbers of people who can’t afford the care they received. So people either get covered, or pay the penalty to offset the costs they incur when they get sick.

“Those who can afford health care but choose to go without are required to make a payment to help cover their medical costs and keep coverage affordable for others,” the Treasury spokesperson wrote.

Sam Stein contributed reporting.

Obamacare Train Not Wrecking As Sign-Up Period Kicks Off

Jeffrey Young   |   November 15, 2014    4:56 PM ET

MANASSAS, Virginia -- The website hasn't crashed, government officials aren't scrambling, and Americans are actually using the Obamacare exchanges to shop for health insurance. What a difference a year makes.

Open enrollment for the private health plans sold on HealthCare.gov, the online portal to exchanges for 37 states (including Virginia), and on the state-run exchanges for the other states started Saturday. Compared to Oct. 1, 2013, when the federal website and numerous state sites launched and immediately crashed -- frustrating consumers and giving Obamacare a black eye that still hasn't faded -- the beginning of the second sign-up period appears to be going smoothly.

"I am quite happy that we are where we are this morning," Health and Human Services Secretary Sylvia Mathews Burwell said during a brief news conference at Evergreen Health Center in Manassas, Virginia, on Saturday. "We are up and running."

In the eight hours since HealthCare.gov had re-opened for the three-month enrollment period at around 1:30 a.m. Eastern Time, the system had completed applications for 23,000 households, Burwell said at the press conference. Some consumers took the next step and selected a health insurance plan to use next year, but others still have to shop now that they have finished their applications for financial assistance, a department spokeswoman told reporters.

Burwell also noted that since HealthCare.gov's anonymous window-shopping tool went online last week, more than 1.2 million people had accessed it to obtain estimates of how much their insurance may cost.

Saturday did see some glitches on HealthCare.gov. Some new users experienced problems logging into their accounts, USA Today reported.

Given that HHS aims to sign up more than 9 million people for private health plans through the federally run exchange, 23,000 doesn't make a big dent either. But the deadline to buy coverage isn't until Feb. 15, and the deadline for plans that take effect on New Year's Day is still a month way. And approaching deadlines sparked huge surges in enrollments during the previous sign-up period.

Compared to last year, 23,000 is a huge number for Day 1. Just six people were able to enroll on the first day of the inaugural enrollment period because of technological failures that crippled the system. Only 106,000 enrolled during the whole month of October 2013. By April 2014, 8 million people had used health insurance exchanges to choose a health plan. More than 7 million were fully enrolled a month ago, as some consumers had given up their Obamacare plans either to switch to a different form of coverage or to go without, HHS announced earlier this month.

Jason Shriner said he enrolled in a plan for next year at Evergreen Health Center without much difficulty. "For the most part, it was fairly easy to use," said the 28-year-old from nearby Nokesville, who teaches baking classes for a living.

Shriner's current health plan isn't being offered next year, so he had to find something new -- and less expensive, because his income has gone down. He chose a "Silver" plan that's cheaper than the coverage he has now, he said.

"I'm super-excited about it. I mean, I'm going to be saving $100 a month. That's going to go a long way," said Shriner. Including a $219 monthly tax credit based on his income, he will pay about $25 a month for his insurance, which includes medical, dental and vision benefits, Shriner said.

The first year of Obamacare's health coverage expansion had a positive impact here in Northern Virginia, said Frank Principi, executive director of the Greater Prince William Community Health Center, which operates Evergreen Health Center in Manassas and Ridgewood Health Center in Woodbridge.

Before last year's enrollment period, 60 percent of the clinics' patients -- primarily Hispanic and African-American, Principi said -- had no health insurance. This year, that number is down to 52 percent, despite the problems with HealthCare.gov and despite the failure of Virginia to adopt the Affordable Care Act's expansion of Medicaid to more poor residents, Principi said.

"The first thing we say to the patient when they register in the waiting room is, 'Can we help you pay your medical bills?'" said Principi, who also is a Democratic member of the local county board of supervisors. Enrollment counselors working in the clinics helped 1,400 people sign up for coverage this year, Principi said, and he aims to get another 1,800 covered for 2015.

On Saturday, dozens of people occupied the waiting room and meeting rooms at the Manassas clinic to meet with enrollment counselors, and Principi expected 500 visitors by the end of the day's event. The health center had promoted the assistance in English and Spanish on local TV, radio and newspapers, as well as through social media channels and texts to patients, he said.

The people who visited Evergreen Health Center were a mix of those who need to renew existing coverage or switch to a new plan next year and those who currently have no health insurance, said Jabnia Murgado, of Woodbridge, who was one of the 14 enrollment counselors on hand. By mid-afternoon, Murgado had helped more than 10 people, though none who completed the process and enrolled in a plan.

Last time, clinic employees were forced to resort to filling out paper applications that they later entered into HealthCare.gov, but they weren't having serious issues on Saturday, Murgado said.

"The website is going great. I mean, there's always a little bit of glitches here and there, but the website is moving along. It has not stalled -- not as of yet, of course," she said. At times, the website ran slowly, and one consumer had to call the exchange's telephone hotline to get his password reset, she added.

In his weekly radio address on Saturday, President Barack Obama urged current exchange customers and the uninsured to visit HealthCare.gov.

"If you already buy insurance through the online marketplace, now is the time to take a look at some new options for next year. You might be able to save more money or find a plan that fits your family's needs better than the one you've got now," Obama said. "If you haven't signed up for insurance yet, this is your chance."

Obamacare officials at the federal and state level are strongly encouraging existing customers to review the health plans offered on the exchanges to avoid sticker shock. Although health insurance premium increases are in the single digits on average, there's a lot of variation. In particular, some of the least expensive and most popular plans in use now are those seeing the largest price hikes for next year, while other plans have reduced prices and more companies have entered this market.

HealthCare.gov now must cope with even greater loads than last year, as millions of consumers seek to renew their coverage and millions more attempt to sign up for the first time. Moreover, the sign-up period for 2015 runs only half as long as the initial enrollment period, which ran from October 2013 into April 2014.

The Obama administration has spent the time since that first round enhancing the system in anticipation of the next wave, adding new features and streamlining the application. States with poorly functioning websites, including Maryland and Massachusetts, also revamped their technology.

That doesn't mean officials expect this time around to be perfect, Burwell said Saturday.

"I will still always have some tension, certainly, for the next three months," the HHS secretary said. "We're going to continue to watch everything and monitor everything. As I've said all along, there will be places where we'll find things. What we're to do is quickly work to take care of anything we find."

Problems did arise Saturday. Washington Healthplanfinder, which serves Washington state residents, was miscalculating applicants' subsidies, forcing the entire system to be taken down, the state-run exchange announced in a press release just hours after enrollment began. A similar problem plagued Washington's exchange last time.

Burwell did not provide information about how many of the 23,000 applications were made by people renewing coverage versus potential new enrollees, about how many people were telephoning the federal exchange's call center and how long they waited to speak to a representative, or about how many users have visited the website.