Puerto Rico now exempt from Obamacare


White House ‘Quietly’ Exempts 4.5 Million People In 5 “Territories” From Obamacare
Submitted by Tyler Durden on 07/20/2014 21:52

As WSJ reports, last week’s geopolitical chaos and distraction was ideal for a news dump, and the White House didn’t disappoint: On no legal basis, all 4.5 million residents of the five U.S. territories were quietly released from ObamaCare. It seems the costs of healthcare soared in these five territories due to uneconomic mandates – which would have been a disaster PR-wise for the administration and so, under cover of catastrophe, WSJ reports all of a sudden last week HHS discovered new powers after “a careful review of this situation and the relevant statutory language,” that enabled them to ‘selectively exempt’ American Samoa, Guam, Puerto Rico, Northern Mariana Islands, and Virgin Islands from Obamacare. And all while vacationing…

As WSJ reports,

The original House and Senate bills that became the Affordable Care Act included funding for insurance exchanges in these territories, as President Obama promised when as a Senator he campaigned in Puerto Rico, the Virgin Islands and other 2008 Democratic primaries. But the $14.5 billion in subsidies for the territories were dumped in 2010 as ballast when Democrats needed to claim the law reduced the deficit.

As a consolation, Democrats opened several public-health programs to the territories and bestowed most of ObamaCare’s insurance regulations, which liberals euphemize as “consumer protections,” such as requiring insurers to accept all comers and charge the same premiums regardless of patient health.

However, costs soared as no insurer would touch them…

These uneconomic mandates promptly caused insurance rates to soar and many insurers to flee the territorial markets. You can’t buy any policy at any price in the Mariana Islands. So the territories have spent the last two years beseeching HHS for a regulatory exemption.

So time to change the rules… from this…

As recently as last year, HHS instructed the territories that they “have enjoyed the benefits of the applicable consumer protections” and HHS “has no legal authority to exclude the territories” from ObamaCare.

To this…

Laws are made by Congress, but all of a sudden last week HHS discovered new powers after “a careful review of this situation and the relevant statutory language.”

And thus 4.5 million people in the following 5 territories are now free of the tyrannical demands of Obamacare…

American Samoa, Guam, Puerto Rico, Northern Mariana Islands, and Virgin Islands.

* * *

Which leaves only one question… where does everybody else apply for their ‘uneconomic’ exemption?



Obama Administration Takes More Obamacare Benefits from Puerto Ricans After Gov’s Request
Posted on July 20, 2014

The Obama Administration acted questionably late last week to take more benefits of the 2010 healthcare law known as ‘Obamacare’ away from Puerto Rico and the other territories of the U.S.

Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner wrote that healthcare insurers in the territories would no longer have to provide insurance to all who want it, meet minimum coverage requirements, or have their rates reviewed.

Government of Puerto Rico officials estimate that 282,000 Puerto Ricans lack health insurance.

Tavenner’s letter reversed repeated, previous HHS decisions that the law treated the territories equally with the States for these provisions.

A year ago, CMS Center for Consumer Information and Insurance Oversight Director Gary Cohen wrote that “In letters dated July 29, 2010 and December 10, 2012, HHS clarified that the insurance market reforms in … the Public Health Services Act (PHS Act), as amended by … the Affordable Care Act [one of the two Obamacare laws], apply to health insurance issuers in the territories because the definition of “State” in the PHS Act includes territories … HHS is not authorized to choose which provisions … might apply in the territories … HHS has no authority to exclude the territories.”

Cohen was responding to a unpublicized request from Puerto Rico Insurance Commissioner Angela Weyne that insurers not have to provide insurance to all Puerto Ricans who want it.

And Cohen warned Weyne that “if HHS determines” a “territory is not substantially enforcing the” insurance market reform “requirements, HHS has the responsibility to enforce these provisions” itself in the territory.

Disclosure of Weyne’s request by PUERTO RICO REPORT caused a scandal. Weyne defended herself by saying that Governor Alejandro Garcia Padilla (‘Commonwealth’ party) had approved her request. But Garcia had claimed that he supported Obamacare in its entirety and he had gotten elected criticizing his major opponent, then Governor Luis Fortuno (statehood), for supporting a change in Obamacare that would not have taken away benefits from Puerto Ricans.

Cohen noted that Fortuno and Puerto Rico’s representative to the Federal government, Pedro Pierluisi, who now heads the statehood party, had asked that Obamacare’s “insurance market reforms … apply to the territories” along with the governor of Puerto Rico’s neighboring territory of the U.S. Virgin Islands.

“HHS does not have authority to grant your request,” Cohen wrote Weyne. “HHS, at the request of and with the full support from the territories … confirmed that the … market reform provisions … including the guaranteed availability provision, are applicable in the territories,” he added.

Tavenner last week wrote that HHS would no longer treat territories equally with the States for Obamacare “PHS Act requirements and funding opportunities.” It is, instead, appropriate to interpret the law to only treat the territories as States for the provisions of the PHS Act that existed prior to Obamacare, she rationalized.

As of last year, Cohen wrote that, under treatment as a State, Puerto Rico had received $3 million from the Federal government to review insurance rates and $396,744 to provide advice for individuals buying insurance. Tavenner wrote that “territories will not have to pay back” funds already spent because of the new “interpretation” of the law but “all unspent grant funding must be returned to CMS.”

Weyne justified her exemption request by noting that Puerto Rico was left out of the Obamacare provisions requiring employers to provide health insurance and individuals who do not qualify for Medicaid government health insurance for low-income individuals or Medicare health insurance for older and disabled individuals to buy health insurance.

But Cohen pointed out that “Territories are free to establish their own … individual minimum coverage or employer responsibility mandates similar to those required” by Obamcaare.

HHS’ ‘interpreting’ the Public Health Services Act in the case of Puerto Rico and other territories as if President Obama’s signature achievement never became law not only reversed its own repeated decisions, it contradicted candidate Barack Obama’s promise to Puerto Ricans that they would be treated equally in his healthcare reform.

But, although Obama repeated that promise as President-Elect and President, his administration made no effort to apply benefits of the law as it was being written to Puerto Rico and other territories until Pierluisi confronted the President on the issue in front of other members of the U.S. House of Representatives Hispanic Caucus and Representative Jose Serrano (D-NY) prompted then House Speaker Nancy Pelosi to also press White House staff for a funding proposal for the territories.

Their efforts and those of Fortuno and others resulted in substantial but not equal funding. Obamacare allotted Puerto Rico a total of $925 million to subsidize the purchase of health insurance by middle-income Puerto Ricans for the six years from this year through 2019. Pierluisi, with the assistance of the respected Government Accountability Office (GAO), calculated that equal treatment with the States would provide the Commonwealth with $1.5 billion each year.

And, while funding for Puerto Rico in Medicaid was tripled to about $1 billion a year, GAO has estimated that equal treatment with the States would mean up to $1.415 billion a year more and an additional $1.5 billion a year more if Puerto Rico had in-patient facilities for long-term care.

The Federal government can treat the Commonwealth and individual Puerto Ricans far worse than a State and residents of a State because of Puerto Rico’s territory status.



ObamaCare getaway: 5 US territories released from health care law
By Barnini Chakraborty
Published July 24, 2014

The Obama administration is coming under fire for once again making a unilateral change to ObamaCare — this time, quietly exempting the five U.S. territories and their more than 4 million residents from virtually all major provisions of the health care law.

The decision was made a week ago, and was a long time coming. For months, the territories have been complaining that the law was implemented so poorly in their regions that it destabilized their insurance markets.

Until now, the Department of Health and Human Services claimed its hands were tied. But last Wednesday, the department reversed course.

The about-face has some questioning the department’s authority to suddenly grant 4.1 million Americans an out from ObamaCare. It follows a cascade of prior unilateral actions delaying and nixing parts of the law for certain groups — actions which in part prompted House Republicans to launch a lawsuit against President Obama challenging his use of executive power.

“The White House knows that ObamaCare is a train wreck,” Republican National Committee spokesman Raffi Williams told FoxNews.com. “Excluding the territories from their train wreck of a law is just the latest example of delays and waivers the administration has issued to quietly limit the damage of the law without admitting that they have ruined the American health care system.”

The decision covers residents in Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa and the Northern Mariana Islands.

Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner acknowledged in her notice last week that the law was “undermining the stability” of the territories’ insurance markets.

That’s because the territories were subject to some parts of the law but exempt from others. Namely, their residents did not receive subsidies to help defray the cost of insurance and their residents were largely exempt from the requirement to buy insurance. But insurance companies were still supposed to follow the law’s requirements to cover everyone with a certain minimum set of benefits, and other standards.

The lopsided requirements crippled the individual markets in some of the territories. In the Northern Mariana Islands, the top provider, for example, told the insurance commissioner it would stop selling new plans to residents. Premiums shot through the roof and the idea of long-term affordable health care became more myth than reality.

Last year, HHS told the territories it had no legal authority to exclude them from the provisions in ObamaCare. It furthered its case by saying the law adopted an explicit definition of “state” that includes the territories for the purpose of the mandates.

But late last week, Tavenner sent a letter to the governments of those same five territories exempting their individual health insurance markets from virtually all the major remaining provisions. She said that after a “careful review,” the department determined the definition of “state” actually means “these new provisions do not apply to the territories.”

“This means that the following Affordable Care Act requirements will not apply to individual or group health insurance issuers in the U.S. territories: guaranteed availability (PHS Act section 2702), community rating (PHS Act section 2701), single risk pool (Affordable Care Act section 1312(c)), rate review (PHS Act section 2794), medical loss ratio (PHS Act section 2718), and essential health benefits (PHS Act section 2707),” she wrote. According to CMS, the territories would still have to follow certain requirements for group health plans.

The legal issues for Obama’s landmark legislation have been piling on in recent days.

On Tuesday, two federal appeals court rulings put the issue of ObamaCare subsidies in limbo, with one invalidating some of the subsidies and the other upholding them.

The first decision came Tuesday morning from a three-judge panel of the U.S. Court of Appeals for the District of Columbia. The panel, in a major blow to the law, ruled 2-1 that the IRS went too far in extending subsidies to those who buy insurance through the federally run exchange, known as HealthCare.gov.

A separate federal appeals court — the Fourth Circuit Court of Appeals — hours later issued its own ruling on a similar case that upheld the subsidies in their entirety.

The conflicting rulings could eventually put the issue before the Supreme Court.

Calls to the HHS for comment were not returned.



The administration just took Obamacare away from the territories

By Jason Millman July 17, 2014 

That’s not what they’re saying in the U.S. territories. (Photo by Andrew Harrer/Bloomberg)

Looking for a place where Obamacare doesn’t exist? Try moving to the U.S. Territories, where the Obama administration just provided a pretty big waiver from the law’s major coverage provisions.

The Affordable Care Act’s design dealt a pretty big problem to the territories. It required insurers there to comply with the law’s major market reforms — guaranteed coverage, mandated benefits, limits on profits, etc. — without requiring residents to get coverage or providing subsidies to help them afford coverage. The territories — Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam and the Northern Mariana Islands — have been warning for years that would destroy their insurance markets. The individual mandate and the subsidies are the major ways the ACA tries to bring healthy people into the individual insurance market to balance out sick patients who can no longer be denied coverage.

That was until Wednesday, when the Obama administration told the territories that the coverage requirements actually don’t apply to them. The exemption was posted on a Health and Human Services Web site on Thursday.

It’s an apparent reversal from last July, when a HHS official told the territories there was nothing HHS could do to help them out.

“However meritorious your request might be, HHS is not authorized to choose which provisions…might apply to the territories,” wrote Gary Cohen last year. He was then the head of the HHS office overseeing the ACA’s insurance market reforms and left the department earlier this year.

What sparked the latest change? The definition of “state” in the Public Health Service Act indicates that the ACA market rules don’t apply to the territories, HHS wrote. The department said group health plans in the territories must still comply with other requirements in the law, like the ban on lifetime and annual limits, a ban on rescission and a coverage of preventive benefits (which includes contraception coverage).

A spokesman for the Centers for Medicare and Medicaid Services, which is overseeing ACA implementation, said the agency recognized that the territories’ insurers saw a greater share of sicker patients as a result of the way the law had been implemented there.

“The Department is committed to working with states and the U.S. territories in order to implement the health care law in a way that maximizes coverage options for consumers,” the spokesman said. “As such, we are providing additional flexibility to the territories in order to implement the law in a way that recognizes their unique situations.”



Hate Obamacare? You should move to Guam.
Updated by Sarah Kliff on July 17, 2014, 3:00 p.m. ET @sarahkliff sarah@vox.com

Guam and the four other American territories got some good news this week: they will no longer be held hostage by a byzantine set of Obamacare rules and regulations.

In letters sent July 16, the Obama administration notified territorial regulators that their residents would be largely exempted from health law requirements. The decision was meant to settle a months’ long dispute between insurance regulators and the White House over how Obamacare effects American territories, which had made a mess of their insurance markets.

Territories were stuck in a bizarre Obamacare no man’s land

Whatever gripes some states had about Obamacare, their complaints couldn’t hold a candle to those coming from American territories.

A weird quirk of the health care law made American territories like Guam and American Samoa subject to certain requirements but not others in way that was terrible for the insurance marketplace.

Health plans in the territories had to accept all customers, for example, but didn’t have any individual mandate or insurance subsidies. to lure the healthy people into signing up. This is pretty much a recipe for a death spiral: when the insurance market is open to everyone, but there are no incentives to sign up, its usually only the sick people who buy coverage.

“HHS and the government itself describe health care reform as a three-legged stool where you have the mandate, the subsidies and the market reforms,” John McDonald, director of the Virgin Islands’ division of banking and insurance, told me when I wrote about the issue last December. “Well, what they’ve basically done is left us with a one-legged stool.”

These regulations had screwed up territorial insurance markets so badly that health insurance plans bolted; it’s currently impossible to purchase an individual market insurance plan in the Northern Marinas Islands.

The new decision: Obamacare mostly doesn’t apply to territories

Six months into Obamacare’s insurance expansion, it appears that the territories’ big problems might be coming to an end: the Obama administration now says it will exempt them from a whole host of Obamacare requirements, perhaps most importantly the requirement that insurers offer coverage to all shoppers.

“After a careful review of this situation and the relevant statutory language, HHS has determined that [some] new provisions do not apply to the territories,” Centers for Medicare and Medicaid Services administrator Marilyn Tavenner wrote in a July 16 letters to territorial insurance regulators.

In other words: instead of getting partial-Obamacare, which really screwed up the territorial insurance markets, the territories are essentially getting no Obamacare.

The Obama administration now plans to issue regulations that say insurers selling coverage in the territories don’t have to accept all customers, as those selling in American states do. Territorial insurance plans will no longer have to cover the essential benefits package , nor will they be subject to the “80/20 rule,” which requires health plans to spend at least 80 percent of premiums on medical costs.

This is a change from the position that the Obama administration took in 2013, when it told the territories that it did not have the legal authority to pick and choose which Obamacare requirements would apply.

“However meritorious your request might be,” Gary Cohen, who was then the director of the Center for Medicare and Medicaid Services, wrote in a July 2013 letter, “HHS is not authorized to choose which provisions…might apply to the territories.”

This isn’t the ideal situation that some territorial officials had advocated for. One regulator from the Northern Marinas Island had hoped that the White House would decide to extend the individual mandate and insurance subsidies to the territories, rather than just scrapping the whole project. Territorial residents pretty much won’t have the insurance expansion that’s happened in the states.

Still, this change is near certainly an improvement over the current Obamacare situation in the territories, bringing some relief to what is arguably Obamacare’s oddest problem.



Skirting The Law: Five U.S. Territories Now Exempt From Obamacare

Blog author: ehilton
Monday, July 21, 2014
By Elise Hilton

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Last week was a busy one, news-wise, and this may have slipped by you. Suddenly, 4.5 million people in the 5 U.S. territories (American Somoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands) are now exempt from Obamacare. Just like that.

What’s the story? Obamacare costs too darn much, and insurance providers were fleeing the U.S. territories, leaving many without insurance or at least affordable insurance. These territories have spent the last two years begging to get out from under this law, only to be told the Department of Health and Human Services

has no legal authority to exclude the territories” from ObamaCare. HHS said the law adopted an explicit definition of “state” that includes the territories for the purpose of the mandates and the public-health programs, and another explicit definition that excludes the territories for the purpose of the subsidies. Thus there is “no statutory authority . . . to selectively exempt the territories from certain provisions, unless specified by law.”

Laws, let us remember, are made by Congress. Unless they’re not. For instance, last week, the Department of Health and Human Services said they’d reviewed the situation and

the territories will now be governed by the “state” definition that excludes the territories for both the subsidies and now the mandates too. But the old definition will still apply for the public-health spending, so the territories will get their selective exemption after all.

As the Wall Street Journal notes, there seems to be some elasticity in the White House’s definition of “state.” And, may I add, some elasticity in the democratic process, the Constitution and rule of law. Perhaps a review via Schoolhouse Rock will help.



U.S. Territories Suddenly Exempt from Major Obamacare Requirements
Christine Rousselle | Jul 21, 2014

Good news for the residents of Puerto Rico, the U.S. Virgin Islands, Guam, et. al: according to a memo quietly posted on the HHS website last Thursday, Obamacare’s coverage provisions no longer apply in these areas.

After a careful review of this situation and the relevant statutory language, HHS has determined that the new provisions of the PHS Act enacted in title I are appropriately governed by the definition of “state” set forth in that title, and therefore that these new provisions do not apply to the territories. This means that the following Affordable Care Act requirements will not apply to individual or group health insurance issuers in the U.S. territories: 1 guaranteed availability (Act section 2702), community rating (PHS Act section 2701), single risk pool (Affordable Care Act section 1312(c)), rate review (PHS Act section 2794), medical loss ratio (PHS Act section 2718), and essential health benefits (PHS Act section 2707). Specifically, under this interpretation, the definition of “state” set forth in the PHS Act will apply only to PHS Act requirements in place prior to the enactment of the Affordable Care Act, or subsequently enacted in legislation that does not include a separate definition of “state” (as the Affordable Care Act does).

Naturally, this is a complete 180 from the rhetoric espoused by the HHS last year. Under Obamacare, insurance companies operating in America’s territories had to accept every insurance applicant, but residents of the territories were not subject to the individual mandate and did not have to actually purchase insurance while still healthy. Additionally, subsidies were not available to residents of territories; only for people living in the 50 states and the District of Columbia. As a result of the law, insurance companies threatened to stop selling new plans altogether in American territories.

When territory officials asked for government leniency last year, they were told that there was nothing possible to remedy this problem:

“HHS, at the request of and with full support from territories, confirmed the Affordable Care Act’s market reform provisions that are incorporated into the PHS Act, including the guaranteed availability provision, are applicable to the territories,” Center for Consumer Information and Insurance Oversight director Gary Cohen wrote in a July letter to territorial governors.

“However meritorious your request might be,” Cohen continues, “HHS is not authorized to choose which provisions…might apply to the territories.”

While it is certainly a good thing that the insurance market in these areas isn’t going to be completely destroyed, it is somewhat troubling that the administration is continuing to pick and choose its definition of a state depending on the situation. Congress is supposed to write and change laws–not the Department of Health and Human Services.



Obamacare: Health Care By Way Of Monty Python

Blog author: ehilton
Wednesday, October 16, 2013
By Elise Hilton

Just like this poor couple trying to buy a bed, we are finding out that Obamacare is a gigantic debacle, but “otherwise perfectly all right.” It’s health care, done by Monty Python’s Flying Circus. Look at the facts:
Only 51,000 people are thought to have signed up during the first week of the roll-out; the Obama Administration needs 7 million to keep the program afloat.
So far, $30 billion has been spent on a medical records system that is non-operational.
Obama projected the costs of his health care program at “around $900 billion over 10 years.” Instead, the Congressional Budget Office projects the cost at $1.8 trillion. Another group puts the cost at $2.6 trillion.
“The Obama Administration have thus far published approximately 11,588, 500 words of final Obamacare regulations, while there are only 381,517 words in the Obamacare law itself. That means unelected federal officials have now written 30 words of regulations for each word in the law.”
According to Avik Roy at Forbes, under Obamacare, the cheapest plan for men will be 99 percent more expensive than under the old law. For women in any given state, it will be 62 percent more expensive.
The Department of Health and Human Services has spent $1.5 million for a television studio to promote Obamacare.
CGI Federal, one of the computer companies involved in creating the health care websites, “received a no-bid sweetheart contract worth $93 million. Since 2009, CGI has scored $678 million in taxpayer money for 185 separate task orders.
Speaking of the website, why does it keep crashing? IT experts are saying it was specifically designed to create a bottleneck and run slowly. Who would design something like that? HHS employees who were afraid that a faster website would allow consumers to see the real cost of the Obamacare plans and be scared away.
Hospitals are cutting staff and insurance carriers are leaving the market. The cost of Obamacare is cited as the reason.

This “otherwise perfectly all right” system cries out for explanation. Why has a health care system that was supposed to make health care easier and more economical gone so terribly, terribly wrong? Avik Roy has one explanation, and you’re not going to like it:

The answer is that Obamacare wasn’t designed to help healthy people with average incomes get health insurance. It was designed to force those people to pay more for coverage, in order to subsidize insurance for people with incomes near the poverty line, and those with chronic or costly medical conditions.

Otherwise, Obamacare is perfectly all right.

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