Bacon's Rebellion

Democracy Thrives in Sunlight

Uh, Oh, Optima Retracting Its Obamacare Coverage

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by

James A. Bacon
in

First Aetna pulled out of Virginia’s Affordable Care Act insurance exchange. Then United Health did. Then Anthem cut back. Now Optima, a division of the Sentara Health Care system, is retracting to core markets in Hampton Roads plus the Harrisonburg, Charlottesville and Halifax-Mecklenburg areas. Oh, and it’s increasing rates on average by 81.8%.

“For now,” sums up the Daily Press, “it appears as if 48 Virginia counties and 15 cities have no insurer offering Obamacare coverage through the federal health care exchange. … The three insurers’ cuts leave 350,000 Virginians needing to find new coverage.”

While the health exchanges implode, a dysfunctional government in Washington, D.C., appears unable to devise either a patch to Obamacare or an alternative to it. Republicans are saying, in effect, “See, we told you that Obamacare was melting down.” Democrats are responding, “It’s melting down because you sabotaged it.”

As the system collapses, the issue of whom to blame will dominate the public discourse. It seems clear to me that Obamacare was melting down on its own, but the political uncertainty created by Washington dysfunction has accelerated the downward spiral. There’s so much flak and so much smoke, however, that Americans have no idea what to believe. In the meantime, Virginians will suffer.

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7 responses to “Uh, Oh, Optima Retracting Its Obamacare Coverage”

  1. V N Avatar
    V N

    Obamacare was built on giving our tax dollars to already wealthy health care corporations. They can shed a lot of useless admin (I don’t mean coders, etc. I’m referring to a nurse manager for every 2 floor nurses, etc.) and even without that, would have money to pay for some basic care for a few more people. While we are at it, the hospitals with the billions they have can kick in to pay for more residents. Raise their salaries a bit while you are at it.

  2. LarrytheG Avatar
    LarrytheG

    Here’s what we know now after the months-long post-election blatherfest on health care.

    Most folks do not have a clue how Obamacare “works” but for that matter how other health insurance “works” including employer-provided.

    That ignorance has brought a crap-load of propandizers into the fray who fog the air with all manner of disingenuous stuff that is readily sucked up by more than a few folks – many of whom feel secure because they have employer-provided insurance.

    Only a tiny sliver of Ocare opponents who are informed, will admit that employer-provided health care is ALSO heavily taxpayer subsidized to the tune of about 330 billion dollars a year and by far the largest tax expenditure in the US budget – and that THEIR own insurance is required by the HIPPA law to be offered to ANY employee in the employer workforce – REGARDLESS of their health status or age – and for the SAME premium cost!

    Folks take that for granted in their own “coverage” but oppose it for others under Ocare.. it makes no sense what-so-ever – but that’s the “thinking” of many.

    Active sabotagery of Ocare may well result in it’s failure which is a mindless exercise because opponents have no clear idea of what to do instead and truth be known – they never did – “Replace and Repeal” was/is a propaganda product for the folks who themselves don’t understand healthcare – it’s like ignorance on steroids and what the GOP has figured out is that they CAN SELL all manner of dishonest proposals to the uninformed .. it “works” just like ADs for other worthless products work.

    But, a “replacement” could well include stealth changes to HIPPA and employer-provided insurance. Some of the GOP proposals would effectively cap how much money is FICA/Income tax exempt…like other tax breaks. Currently the average person with employer-provided enjoys about $6000 in tax-free income spent on health insurance.

    Also afoot are proposals to re-institute annual and lifetime caps for ALL insurance INCLUDING employer-provided.

    The average opponent of Ocare who themselves have employer-provided are blithely unaware of the magnitude of changes that are actually on the table in many of the GOP replacement proposals..

    Perhaps when the folks who have employer-provided had their own Ox gored.. they’ll become more interested in what happens to Ocare, eh?

  3. TooManyTaxes Avatar
    TooManyTaxes

    Larry – your argument about taxpayer subsidy of employer-pr0vided health care doesn’t fly well. On the assumption higher paid workers tend to have employer paid health insurance, rather than lower paid workers, those with insurance are essentially subsidizing themselves. In one pocket, and out the other.

    As Mitt Romney used to say, 47% of American residents don’t pay FIT. As such, they aren’t subsidizing other taxpayers. And we probably see those at the top subsidizing other, taxpaying, but lower-income people with employer paid insurance. A progressive tax!

    If anything, since Obamacare subsidies aren’t taxable income, those folks are being subsidized by all the others who pay FIT, including those who get tax-free employer insurance.

  4. LarrytheG Avatar
    LarrytheG

    TMT – I give you credit for a REAL valid point but essentially aren’t you arguing that the progressive tax system is wrong and that people who earn more deserve to not be taxed at a rate any more than lower income folks and so they are “getting back’ via tax breaks what they should have not paid to start with (if we did not tax progressively)? Right? Do you consider Govt employees are people who should not be subject to progressive income taxes?

    You are also right about Obamacare subsidies not being taxed – true.

    but you’re wrong about the concept because what we have now in our economy where many workers who are not necessarily “low income” don’t get the same tax treatment for insurance they buy that people do who have employer provided.

    Further – people who buy, prior to Obamacare, did not have the same HIPPA protections on pre-existing or community rating which basically says that the young and healthy who have Employer-Provided essentially subsidize the older and less healthy because the premiums are the same and this is the big argument against ObamaCare and it’s being made often by people who have EP and benefit from pre-existing and community rating protections that then argue it’s wrong for Obamacare to provide those protections.

    Finally.. I’d say that anyone who is getting their EP as a Govt employee is on weak ground themselves as I’m quite sure most Conservatives would argue that Govt workers are _not_ high-paid workers who deserve to not pay taxes…progressively…

    The GOP.. bless their worthless pea picking souls are now saying they will deal with tax reform… and are reported to be targeting tax breaks including for EP and most of the itemization items… Big talk .. but if they don’t produce and deliver any more than they have for other tough issues like health care and immigration…good luck on that..

    and perhaps that’s the real point.. “talk” … but “no do”…

  5. TooManyTaxes Avatar
    TooManyTaxes

    Larry, I’m not arguing against a progressive FIT. My points are just: 1) people who don’t pay FIT or pay it in an amount that is smaller than w0uld be necessary to recover a fair share of the costs of the federal government simply aren’t subsidizing those people who get employer-paid health insurance tax free; 2) people who pay high FIT are subsidizing those who pay lesser amounts and that is consistent with a progressive FIT; and 3) if the tax law is amended to allow taxation of the amounts of employer-provided health insurance, the law should also allow taxation of the amount of government subsidies received by Obamacare purchasers.

    1. Acbar Avatar
      Acbar

      Your last point, (3), is right on. That’s what should happen but I expect/fear will not happen if there’s tax reform which goes after those big deductions for health and housing.

      The larger point you both make is, our tax system is full of offsets and counter-balanced provisions that it’s misleading to discuss in isolation. The NET effect is what drives policy. But that principle does not apply to someone who pays no FIT — there’s no tax to net against; there’s no counter-balance. That makes it a much bigger subsidy than it is to those who do pay taxes, a fact that ends to get overlooked when discussing it in isolation.

      1. TooManyTaxes Avatar
        TooManyTaxes

        If the law makes Social Security benefits taxable for people above an income floor, it should also make other government benefits taxable while taking away some of the sting by increasing the standard deduction.

        And there should be a time limit on the tax exempt status of private foundations.

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