United Healthcare Bails on Obamacare

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Nancy Pelosi, call holding on line 3.  There are other healthcare providers that are likely to bow out of Obamacare in 2017.

UnitedHealth pulls back on ObamaCare exchanges amid huge losses

FNC: The nation’s largest health insurer, fearing massive financial losses, announced Tuesday that it plans to pull back from ObamaCare in a big way and cut its participation in the program’s insurance exchanges to just a handful of states next year – in the latest sign of instability in the marketplace under the law.

UnitedHealth CEO Stephen Hemsley said the company expects losses from its exchange business to total more than $1 billion for this year and last.

Despite the company expanding to nearly three dozen state exchanges for this year, Hemsley said the company cannot continue to broadly serve the market created by the Affordable Care Act’s coverage expansion due partly to the higher risk that comes with its customers.

UnitedHealth Group Inc. said it now expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million. The insurer lost $475 million in 2015, a spokesman said.

UnitedHealth has already decided to pull out of Arkansas, Georgia and Michigan in 2017, and Hemsley told analysts during a Tuesday morning conference call that his company will not carry financial exposure from the exchanges into 2017.

“We continue to remain an advocate for more stable and sustainable approaches to serving this market,” he said.

The state-based exchanges are a key element behind the Affordable Care Act’s push to expand insurance coverage. But insurers have struggled with higher-than-expected claims from that business.

A recent study by the Blue Cross Blue Shield Association detailed how many new customers nationwide under ObamaCare are higher-risk. It found new enrollees in individual health plans in 2014 and 2015 had higher rates of hypertension, diabetes, depression, coronary artery disease, HIV and Hepatitis C than those enrolled before ObamaCare.

On the heels of Tuesday’s announcement, Sen. Ben Sasse, R-Neb., said in a statement it’s a sign of “the President’s broken promise that families would have more choices under ObamaCare.”

The Kaiser Family Foundation, in an analysis on the prospect of United’s exit, said “the effect on insurer competition could be significant in some markets – particularly in rural areas and southern states” if it is not replaced.

In the most extreme scenario, “If United were to leave the exchange market overall, 1.8 million Marketplace enrollees would be left with two insurers, and another 1.1 million would be left with one insurer as a result of the withdrawal,” the analysis said.

UnitedHealth had moved slowly into the newly created market by participating in only four exchanges in their first year, 2014. But the company then expanded to two dozen exchanges last year and said in October it would add to that total. It currently participates in exchanges in 34 states and covers 795,000 people

A month after announcing its latest exchange expansion, UnitedHealth started voicing second thoughts. The insurer said in November that it would decide by the first half of this year whether to even participate in the market for 2017.

Insurers say they have struggled, in particular, with customers who have signed up for coverage outside regular enrollment windows and then dumped expensive claims on their books, a problem the government has said it would address.

A dozen nonprofit health insurance cooperatives created by the ACA to sell coverage on the exchanges have already folded, and the survivors all lost millions last year.

Other publicly traded insurers like Aetna have said that they have lost money on this business as well. But some companies, like Molina Healthcare, have said they have managed to turn a profit from the exchanges.

Analysts expect other insurers to also trim their exchange participation in 2017, especially if they continue to struggle with high costs.

Gitmo Closing: The Race to Shutter

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DNI’s estimate on released detainees re-engaging on the battlefield.

InquisitR: There are 22 “forever prisoners” who could possibly be imprisoned in the U.S. remaining at Guantanamo Bay. As reported by The Guardian,“they are joined by 32 men in some stage of the long-stalled military tribunals process, although 22 of those have been referred for prosecution and not yet charged.”

HouseCmteForeignAffairs: On Saturday afternoon, the administration released nine detainees from the terrorist prison at Guantanamo Bay to Saudi Arabia.

VOA reports the move “came just weeks after President Barack Obama announced an accelerated plan to try to shutter the prison before he leaves office in January 2017.”  And it follows the April 4th release of two Al Qaeda bomb makers, one of which “fought coalition forces at Usama bin Laden’s Tora Bora complex in Afghanistan,” according to FOX News.

In all, the Obama administration is expected to push to release an additional 26 detainees before the end of summer.  This mad rush comes despite the fact that:

  • Nearly 30 percent of former detainees return to the terrorist battlefield.  According to the Office of the Director of National Intelligence’s latest report, 30.2 percent of former detainees are either confirmed or suspected to have returned to terrorism.  Notably, one detainee freed in 2012 has emerged publicly in a “key position” for Al-Qaeda in east Africa.  Another former detainee, who was reportedly trained in explosives and working as part of an ISIS recruiting cell, was arrested by Spanish and Moroccan authorities in February.
  • Released detainees have killed Americans.  In testimony before the House Foreign Affairs Committee last month, the Obama administration openly admitted terrorists released from the Guantanamo Bay prison have killed Americans.   “What I can tell you is, unfortunately, there have been Americans that have died,” the Pentagon’s special envoy for Guantanamo detention closure said.

Currently, in an effort to limit public scrutiny, the administration only releases information about upcoming releases in classified documents.  This needs to change.

That’s why Chairman Royce has introduced legislation, the Terrorist Release Transparency Act (H.R. 4850), to ensure the American people, and our foreign partners, have critical details about detainee transfers.  Royce’s legislation would require the administration, in advance of each release, to publicly post details including:

  • The name, country of origin, and country of destination of the individual being transferred;
  • The number of individuals detained at Guantanamo previously transferred to that country, and;
  • The number of individuals who have reengaged in terrorist activity after being transferred to that country.

If the White House truly believed its race to empty out the terrorist prison at Guantanamo Bay was good for America’s national security, it could be taking these steps on its own – right now.  Instead, it’s pushing an incomplete and illegal plan to bring some terrorists to U.S. soil while releasing others to foreign countries.  Once again, Congress needs to step in.

READ MORE:

It is the Fighting Season in Afghanistan

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USAToday: WASHINGTON — The Afghan Taliban announced Tuesday the start of a new fighting season against the U.S.-backed government as the White House weighs future troop levels for the war-torn country.

In an email to the media, the Taliban warned it would launch “large scale attacks” but would attempt to avoid civilian casualties, according to the Associated Press.

The United States has nearly 10,000 service members in Afghanistan. The White House is considering proposals to maintain a future military presence in the country after President Obama last year reversed a plan to remove all U.S. troops by 2016.

That reversal came as Afghan forces faced intense pressure from Taliban militants throughout the country. The Pentagon said no decisions have been made yet.

“Ultimately, Afghanistan has not achieved an enduring level of security and stability that justifies reduction in our support in 2016,” Gen. John Campbell, who recently stepped down as the top coalition commander in Afghanistan, testified to Congress recently.

This fighting season is likely to be another significant test for Afghan security forces, which number about 350,000, including police and soldiers.

The Taliban have emerged strong in parts of the country, including Helmand province, a significant opium growing region in the south, challenging local police and Afghan army forces.

The militants said in the email that the spring offensive began at 5 a.m. local time. They dubbed the campaign “Operation Omari” in honor of Taliban founder Mullah Mohammad Omar, who died three years ago, according to the AP.

The Taliban added that in areas under their control, “mechanisms for good governance will be established so that our people can live a life of security and normalcy.”

 

Taliban kills dozens in suicide assault in Kabul

LWJ: The Taliban targeted a unit responsible for providing security for Afghan officials in a coordinated suicide assault in the Afghan capital today. The Taliban claimed credit for the deadly attack, in which at least 28 people were killed and more that 300 were wounded, according to reports on the ground.

The Taliban took responsibility for the attack on its official propaganda outlet, Voice of Jihad, and said it was part of Operation Omari, the 2016 spring offensive named after Mullah Omar, its founder and first emir. The Taliban reported a suicide bomber detonated a vehicle at the gate, which allowed armed fighters to breach the compound. This is a tactic that has been effectively employed by the Taliban and other jihadist groups throughout the world over the past decade.

“Amid the ongoing ‘Omari’ annual campaign at around 09:00 am local time this morning, a martyrdom seeking unit of Islamic Emirate launched a heavy attack on 10th directorate intelligence building located in PD1 of Kabul city,” the statement said. “The operation began when a martyrdom seeker detonated his explosives laden vehicle at the gate of the building, removing all barriers and killing the guards followed by a number of other martyrdom seekers rushing inside and engaging the remaining enemy targets.”

The Taliban’s account was substantiated by press reporting from Afghanistan. According to TOLONews, the compound that was attacked belonged to a “Secret Service Unit tasked with protecting VIPs.” Afghan officials said the attack began when a suicide bomber detonated at the gate, and one or more Taliban fighters then penetrated the perimeter and began firing on the survivors inside the compound. At least 28 people were killed and 327 more were wounded, according to the Afghan Ministry of Public Health.

The commander of NATO forces in Afghanistan claimed that the attack was proof that the Taliban were unable to fight Afghan forces face to face “on the battlefield.”

“Today’s attack shows the insurgents are unable to meet Afghan forces on the battlefield and must resort to these terrorist attacks,” General John Nicholson, the commander of Resolute Support, NATO’s mission in Afghanistan, said in an email sent to The Long War Journal. “We strongly condemn the actions of Afghanistan’s enemies and remain firmly committed to supporting our Afghan partners and the National Unity Government.”

However, the Taliban are openly engaging Afghan forces on the battlefield on multiple fronts throughout Afghanistan. In the south, the Taliban controls nearly half of Helmand province and has pressured Afghan forces to retreat from key district there. The provincial capital of Lashkar Gah is under siege. In the north, the Taliban launched a coordinated offensive in all seven districts of Kunduz just after announcing the commencement of Operation Omar last week. The Taliban are also fighting in the open in multiple provinces in the east and west.

The Long War Journal estimates that the Taliban controls or hotly contests more than 80 of Afghanistan 400 plus districts.

Today’s attack in Kabul is the largest of its kind since Aug. 7-8, 2015, when the Taliban launched two suicide bombers and a suicide assault over the course of 24 hours. Forty-four people, including 20 Afghan police recruits, 15 Afghan civilians, eight US-contracted Afghan personnel, and a US Army Green Beret were killed when the Taliban targeted a police academy, a US Special Forces base, and a residential district. [See LWJ report, Taliban continues terror attacks in Afghan capital.]

Iran Still Complains, White House Complies

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Where Iran’s Complaint About Banking Integration Misses the Mark

Levitt/WSJ: The governor of Iran’s central bank warned last week that failure to do more to integrate Iranian banks into the global economy could jeopardize the international agreement over Tehran’s nuclear program. The onus is on Washington and its allies to reassure banks that doing business in Iran is fine, Valiollah Seif said in a speech Friday at the Council on Foreign Relations. He said tellingly little about Iran’s efforts to change an environment businesses are wary of investing in, underscoring the discrepancy between Iran’s view of the nuclear deal and other international perceptions.

Mr. Seif complained that “almost nothing” has been done to reintegrate Iran into the global economy since implementation of the deal was announced in January. “Unless serious efforts are made by our partners,” he said, “in my view, they have not honored their obligations.”

Treasury official Adam Szubin said on Wednesday that Washington is not standing in the way of permissible business activities involving Iran. Some of the reasons entities might be wary of doing business there include rampant corruption, as Transparency International has documented, and the extent to which Iran’s banking sector is out of step with international banking norms, as my Washington Institute colleague Patrick Clawson has written.

“Effective implementation of the agreement,” Mr. Seif said, must be done “in such a way that Iran’s economic and business activities will be facilitated.” Otherwise, the deal “breaks up on its own terms,” he said.

Iran seems to expect the Obama administration to provide benefits beyond those in the nuclear deal, including access to the U.S. financial system and the ability to change into dollars foreign currency transactions through U.S.-based banks. U.S. officials say that neither demand will be met.

We live in a “post-sanctions environment,” Mr. Seif said. This ignores the fact that sanctions remain in place over Iran’s efforts to sponsor terrorism; its ballistic missile program; and its human rights abuses, which include executing minors and persecuting religious minorities.

Mr. Seif appeared to dismiss concerns about those activities as old hat. “If, according to our partners, it is our conduct which prevents international banks from engaging in business with us, they were fully aware of our conduct before signing. … We have not changed.”

That Iran has not changed is at the core of its problem, but that’s not how Mr. Seif seemed to see it. Asked about the risks of unwittingly doing business with the Islamic Revolutionary Guard Corps, which is still targeted by Treasury sanctions, Mr. Seif said potential investors could engage Iranian companies that run checks to determine who they would be doing business with. The use of Iranian companies to hide the IRGC’s involvement in business activities has been documented by the Treasury Department. And using in-country third parties to perform customer due diligence is seen as high-risk by international bodies that govern banking transactions.

The bottom line is that Iran has yet to curb or stop the illicit conduct that makes it a pariah state and a financial risk. It enacted a law against terrorist financing last July, but that’s done little to calm banks’ fears because its government continues to support terrorism. Until those behaviors change, banks are likely to continue to see prohibitive reputational, regulatory, and other risks to doing business there. And the only country that can do anything about that is Iran.

ALSO IN THINK TANK:

What the U.S. Has and Hasn’t Learned From Imposing Sanctions

On Iran Sanctions, Mixed News–and Warnings for Potential Investors

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Bloomberg: Iranian Foreign Minister Mohammad Javad Zarif said international banks remain wary of U.S. regulations and need “reassurances” that they can resume business with his nation even after its nuclear deal with world powers.

Zarif, speaking in New York ahead of a Tuesday meeting with U.S. Secretary of State John Kerry, said talks with his counterpart were necessary to follow up on the implementation of the agreement on the U.S. side.

The deal’s aim “was to not have the U.S. intervene in Iran’s relations with most other countries,” the Iranian Students’ News Agency cited Zarif as saying. “We should prevent past U.S. regulations from being obstacles to most financial institutions in Europe and Asia having banking relations with Iran.”

Iranian central bank Governor Valiollah Seif voiced similar sentiments last week, telling Bloomberg Television that the U.S. Treasury’s Office of Foreign Assets Control should issue guidelines encouraging European banks to be more receptive to Iran. Seif met Treasury Secretary Jack Lew on Thursday during the International Monetary Fund and World Bank meetings in Washington. More from Bloomberg.

 

See Who Does Exploit Offshore Tax Havens

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Offshore investment is among the murkiest sectors of the financial world. That’s by design — keeping money offshore can help shield money from tax authorities, obscure its origin and conceal the genuine owners. There are many legitimate reasons for opening an offshore banks account. Wealthy people do it to better manage their investment portfolios or protect their assets. Offshore accounts can also help the rich pay less tax — legally.

However, offshore accounts are also the lynchpin in many illegal tax avoidance schemes. Owners go to great lengths to conceal the existence of these accounts from their home governments, and they are often helped by lax disclosure rules in offshore tax havens.

Investors caught trying to hide their accounts can face steep penalties. More here from CNN.

US corporations have $1.4tn hidden in tax havens, claims Oxfam report

Charity analysis of the 50 biggest US businesses claims Apple have $181bn held offshore, while General Electric has $119bn and Microsoft $108bn

Guardian: US corporate giants such as Apple, Walmart and General Electric have stashed $1.4tn (£980bn) in tax havens, despite receiving trillions of dollars in taxpayer support, according to a report by anti-poverty charity Oxfam.

The sum, larger than the economic output of Russia, South Korea and Spain, is held in an “opaque and secretive network” of 1,608 subsidiaries based offshore, said Oxfam.

The charity’s analysis of the financial affairs of the 50 biggest US corporations comes amid intense scrutiny of tax havens following the leak of the Panama Papers.

And the charity said its report, entitled Broken at the Top was a further illustration of “massive systematic abuse” of the global tax system.

Technology giant Apple, the world’s second biggest company, topped Oxfam’s league table, with some $181bn held offshore in three subsidiaries.

Boston-based conglomerate General Electric, which Oxfam said has received $28bn in taxpayer backing, was second with $119bn stored in 118 tax haven subsidiaries.

Computing firm Microsoft was third with $108bn, in a top 10 that also included pharmaceuticals giant Pfizer, Google’s parent company Alphabet and Exxon Mobil, the largest oil company not owned by an oil-producing state.

Oxfam contrasted the $1.4tn held offshore with the $1tn paid in tax by the top 50 US firms between 2008 and 2014.

It pointed out that the companies had also enjoyed a combined $11.2tn in federal loans, bailouts and loan guarantees during the same period.

Overall, the use of tax havens allowed the US firms to reduce their effective tax rate on $4tn of profits from the US headline rate of 35% to an average of 26.5% between 2008 and 2014.

The charity said this had helped firms spend billions on an “army” of lobbyists calling for greater state support in the form of loans, bailouts and guarantees, funded by taxpayers.

The top 50 US firms spent $2.6bn between 2008 and 2014 on lobbying the US government, Oxfam said.

“For every $1 spent on lobbying, these 50 companies collectively received $130 in tax breaks and more than $4,000 in federal loans, loan guarantees and bailouts,” said Oxfam.

Robbie Silverman, senior tax adviser at Oxfam said: “Yet again we have evidence of a massive systematic abuse of the global tax system.

“We can’t go on with a situation where the rich and powerful are not paying their fair share of tax, leaving the rest of us to foot the bill.

“Governments across the globe must come together now to end the era of tax havens.”

Oxfam estimates that tax avoidance by US corporations costs the world’s largest economy some $111bn a year, but said it was also fuelling the global wealth divide by draining $100bn from the poorest countries.

“Tax dodging practised by corporations and enabled by federal policymakers contributes to dangerous inequality that is undermining our social fabric and hindering economic growth,” the report said.

Oxfam also singled out British overseas territories such as Bermuda for their popularity with US firms seeking to slash their tax bill by “profit-shifting”.

In 2012, said Oxfam, US firms reported $80bn of profit in Bermuda, more than their combined reported profits in Japan, China, Germany and France, four of the world’s five largest economies.

The charity called on the US government to pass the Stop Tax Haven Abuse Act, including a requirement for firms to report their tax contribution on a country-by-country basis, there is only one caution when doing this though and that is to not be mistaken that a country is a tax haven when in fact it isn’t, for example many people refer to Andorra as the tax haven of Andorra however Andorra is not actually a tax haven, one way to be sure whether a country is a legally classed tax haven is refer to the FATF blacklist, it lists every country that is recognised by government as an actual tax haven.

Country-by-country reporting has been recommended by a host of non-governmental organisations and charities to prevent companies from artificially shifting their income out of the poorest countries.