On Thursday, the U.S. Court of Appeals for the D.C. Circuit issued a per curiam order (a decision handed down by the court as a whole, without identifying any particular judge as the author) without a written opinion in PHH Corp., et al. v. Consumer Financial Protection Bureau, No. 15-01177 (D.C. Cir. Feb. 2, 2017). The order denied an attempt by 17 Democrat attorneys general to intervene in the appeals court case that found the Consumer Financial Protection Bureau’s structure was unconstitutional. The coalition was led by Connecticut’s Attorney General George Jepsen.

The PHH case is being closely watched because of its potential importance to the future of the CFPB.

As ACA reported previously, the appeals court panel ruled last October in a 2-1 split decision that a provision of the Dodd-Frank Act allowing the CFPB’s director to be removed only for cause was unconstitutional. The panel sought to strike that provision, allowing the president to remove the director at any time. The CFPB went back to the Court in November and asked the entire appeals court to revisit the decision. The CFPB’s petition for en banc review (for the entire court to consider) remains currently pending before the appellate court.

In the unusual legal move in late January the state attorneys general, two Democratic lawmakers and several consumer advocacy groups all filed motions arguing that they have legal standing to intervene (or to become involved in the lawsuit as third parties). The attorneys general argued that they have a vital interest in defending an independent and effective CFPB. They also asserted that the D.C. Circuit Court’s ruling, if permitted to stand, would undermine the power of state attorneys general to effectively protect consumers against abuse in the consumer finance industry, and significantly lessen the ability of the CFPB to withstand political pressure and act effectively and independently of the President.

In its opposition, PHH Corp. argued that “[t]he motion [to intervene] is egregiously untimely, there is no good cause for the delay in seeking to intervene, and there is no standing to intervene.” Counsel for PHH Corp. called the state AGs’ argument that they had a “legally cognizable interest in the ‘independence’ of the CFPB” as a “bridge too far.” And PHH Corp. argued that granting intervention for the state AGs would give them the ability to circumvent one of the only means Congress provided for the president to supervise litigation involving the CFPB.

ACA will continue to follow the PHH Corp. case and will keep its members posted on any new developments, which will be most likely a decision for the D.C. Circuit Court of Appeals with respect to the CFPB’s Petition for Rehearing En Banc. If you want to read more about the most recent significant judicial and CFPB decisions involving the credit and collection industry, ACA members can always find concise case summaries on ACA International’s Industry Advancement Program website.

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A majority of consumers “spend very little” on healthcare in any given year since the Affordable Care Act health insurance marketplaces opened in 2014, according to an issue brief from researchers for The Commonwealth Fund.

“Since 2014, when the Affordable Care Act's health insurance marketplaces opened and states were able to expand Medicaid eligibility under the law, the rate of growth in out-of-pocket spending has slowed and the share of Americans reporting medical bill programs and cost-related delays has declined,” according to the brief's authors Sherry A. Glien, dean at the Robert F. Wagner School of Public Service, New York University; Claudia Solís-Román, research scientist at New York University; and Shivani Parikh, M.P.A. student at the New York University Robert F. Wagner Graduate School of Public Service.

The researchers evaluated the change in out-of-pocket cost-sharing expenses and out-of-pocket spending on premiums between 2013 and 2014, when Affordable Care Act coverage expansions occurred, for consumers who do not qualify for Medicaid based on their income.

“The probability of incurring high out-of-pocket costs and premium expenses declined as marketplace enrollment increased,” according to the report.

The researchers' data analysis focuses on consumers living between 133 and 249 percent of the federal poverty level (FPL) who qualify for cost-sharing reductions and premium subsidies; consumers between 250 and 399 percent of the FPL who qualify for the subsidies but not cost-sharing reductions; and consumers at 400 percent of the FPL or higher who do not qualify for cost-sharing reductions or subsidies, according to the report.

In 2013, before the Affordable Care Act marketplaces opened, approximately 31 percent of consumers with incomes at more than 133 of the FPL spent at least $500 on out-of-pocket cost sharing, according to the report. “Relatively few people—less than 3 percent—in any income group—incurred out-of-pocket cost-sharing expenses as high as $5,000.”

Between 2013 and 2014 the number of consumers in that group spending more than $500 on cost sharing expenses declined by about 2.3 percent, according to the report. “The share who spent more than $2,000 declined by 0.3 points, with this decline concentrated among those with lower incomes; and the share who spent more than $5,000 decreased by 0.2 percentage points.”

Overall, in 2013, about 50 percent of consumers with incomes outside of the Medicaid-eligibility range spent more than $500 on premiums and out-of-pocket costs, according to the report. Approximately 10 percent spent more than $5,000 on those expenses.

“We found the likelihood that people with incomes above 133 percent [of the] FPL spent above the out-of-pocket cost-sharing thresholds general decreased as the marketplace enrollment increased,” according to the report.

Enrollment in marketplace plans, among consumers younger than age 65, increased from 0 percent in 2013 to 2.6 percent by mid-year 2014.

“This rise in enrollment … was associated with about a two-percentage-point decline in the share of Americans spending more than $500 on out-of-pocket expenses, a one-point decline in the share of spending more than $2,000, and a 0.4-point decline in the share spending more than $5,000. These reductions are large relative to the baseline rates: they are equal to 7 percent, 9 percent, and 17 percent, respectively, of the share of individuals who had out-of-pocket costs exceeding these thresholds in 2013,” according to the report.

The net effect of increased healthcare coverage for consumers is in turn a reduction in the number “facing substantial costs,” the researchers conclude. “Despite this good news, it is important to note that many Americans continue to find that premiums and cost-sharing impose a large burden that makes it difficult to access care.”

The researchers also note that a majority of consumers have health insurance through their employers and “for them, increases in healthcare costs lead to rising spending, particularly on premiums. Containing overall healthcare costs is therefore critical to maintaining both access to care and protection against high out-of-pocket spending.”

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National health spending, including Medicare, medical price growth and prescription drugs, is expected to grow over the next decade, but at a rate lower than the average of the last two decades.

The national health spending is projected to increase at an average rate of 5.8 percent per year from 2015-2025, according to a report from the Centers for Medicare and Medicaid Services Office of the Actuary.

“The Affordable Care Act continues to keep overall health spending growth at a modest level and at a lower growth rate than the previous two decades. This progress is occurring while also helping more Americans get coverage, often for the first time,” said CMS Acting Administrator Andy Slavitt in a news release. “Per-capita spending and medical inflation also remain at historically very modest levels, demonstrating the importance of continuing to reform our delivery systems.”

CMS also reports health spending is projected to increase 1.3 percentage points faster than the Gross Domestic Product per year from 2015 to 2025. “As a result, the health share of the GDP is expected to rise from 17.5 percent in 2014 to 20.1 percent by 2025,” according to the CMS.

The report also includes findings on Medicare, Medicaid, out-of-pocket costs for consumers and expenses for hospitals and physicians.

The share of health expenses consumers pay out-of-pocket is expected to decline from 10.9 percent in 2014 to 9.9 percent in 2025.

Medicare spending growth slowed to 4.6 percent in 2015, in part due to declines in physician incentive payments, reduced utilization of hospital services and deceleration in spending on medicine, according to CMS.

“After 2015, Medicare spending growth is projected to accelerate to a projection-period peak of 7.9 percent in 2020 (and average growth of 7.6 percent for 2020 through 2025,)” according to CMS. Estimated annual enrollment gains as more Baby Boomers approach the age for Medicare eligibility and increasing growth in beneficiary spending are expected to influence the Medicare growth rate.

Growth in consumers' out-of-pocket spending is expected to continue to increase annually through 2018, “as the impact of the coverage expansions from the Affordable Care Act subsides, and as the number of individuals covered through high-deductible health plans continue to grow,” according to CMS.

CMS also reports hospital price growth is expected to increase from 0.9 percent in 2015 to 2.8 percent by 2019. Total hospital spending is expected to have accelerated from 4.1 percent in 2014 to 4.9 percent in 2015 due to the continued influence of the Affordable Care Act's insurance growth on utilization, according to CMS.

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Bankruptcy filings from U.S. businesses increased 26 percent in 2016 when compared to last year, according to a news release from the American Bankruptcy Institute and data provided by Epiq Systems, Inc.

Business filings during calendar year 2016 (Jan. 1-Dec. 31) were 37,771, compared to 29,920 filings in 2015.

Business filings totaled 2,911 in December 2016 compared to 2,674 in December 2015. According to the release, “average total filings per day in December 2016 were 2,685, a 10 percent increase from the 2,447 total daily filings in December 2015.”

The total bankruptcy filings in December 2016, 56,394, increased 5 percent from 53,844  filings in December 2015 , according to the news release. “The 53,483 total noncommercial filings for December also represented a 5 percent increase from the December 2015 noncommercial filing total of 51,170.”

However, comparing total bankruptcy filings, the 771,894 filings during 2016 represented a 6 percent drop from 2015’s total filings of 819,431. Total noncommercial filings also decreased by 7 percent overall from 2015.

“While commercial filings increased last year, total filings fell for a seventh consecutive year and bankruptcies decreased to their lowest number recorded since 2006,” said ABI Executive Director Samuel J. Gerdano in the news release. “As the Fed raises rates in 2017 and the cost of borrowing increases, more debt-burdened consumers and businesses may seek the financial shelter of bankruptcy.”

The American Bankruptcy Institute also reports that the average nationwide per capita bankruptcy-filing rate for 2016 was 2.48 (total filings per 1,000 population), a decrease from the filing rate of 2.63 percent recording for 2015.

States with the highest per capita filing rate (total filings per 1,000 population) through December 2016 include: Tennessee (5.57); Alabama (5.48); Georgia (4.75); Utah (4.09); and Illinois (4.08).

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The Department of Health and Human Services ( HHS ) recently announced that enrollment in Medicare Advantage (or Medicare Part C) has increased while premium prices have fallen. Medicare Advantage is a type of Medicare coverage that is managed by private insurers that are approved by Medicare. According to CMS, premiums for Medicare Advantage plans have fallen by 7 percent on average and enrollment has risen by about 10 percent since early 2011.

The numbers confirm projections made last September that enrollment in Medicare Advantage plans would continue to rise and average premiums would fall. According to   HHS , average premiums have fallen from $33.97 in 2011, to $31.54 in 2012, while enrollment has risen from 11.7 million in 2011 to 12.8 million in 2012.

  HHS   also released the following statistics on the Medicare Advantage program:

• On average, there are 26 Medicare Advantage plans to choose from in nearly every county across the country;
• Access to Medicare Advantage remains strong: 99.7 percent of Medicare beneficiaries have access to a Medicare Advantage plan; and
• Since 2010, when the Affordable Care Act was passed, Medicare Advantage premiums have fallen by 16 percent and enrollment has climbed by 17 percent.

HHS   also noted, starting in 2012 as part of the Affordable Care Act, Medicare Advantage plans will begin receiving incentive payments called “quality bonus payments” which are intended to achieve high quality scores. As an extra incentive for high quality performance, the Centers for Medicare & Medicaid Services is allowing Five-Star Medicare Advantage and Part D plans to continuously market and enroll beneficiaries throughout the year.

Source:   ACA   International

According to a forecast from the American Bankers Association’s (ABA) Economic Advisory Committee, the U.S. economy will continue on a course of moderate growth with relatively low inflation and steady job growth in 2012.

The committee stated that, although the unemployment rate is expected to remain relatively stable at 8.6 percent, the economy should add 1.6 million payroll jobs – the same number as in 2011. The committee noted job recovery will be prolonged.

The report also noted that, even though consumer confidence remains weak, the committee expects consumer spending to continue to grow by a 2.0-2.6 percent pace each quarter and by 2.4 percent this year. That rate, along with strong business spending, will keep the economy on a slow but steady path forward.

The ABA committee also saw signs that housing price declines are easing nationwide, but not in all areas, and that there are risks that foreclosures could begin to pick up. Housing sales and starts climbed throughout 2011, and the committee forecast a gradual recovery throughout 2012.

Low interest rates and strengthening credit will support economic growth, according to the committee. For consumer and business credit the committee foresees a gradual reduction in delinquencies and a strengthening of credit growth in 2012. The committee also estimated consumer loans will grow 4.1 percent and business loans will grow 7.8 percent in 2012.

Despite the moderately positive outlook, the committee saw several significant negative risks to the U.S. economy. These negatives included the European debt crisis, challenges surrounding U.S. fiscal policy and geopolitical risks.

Source: ACA   International

Total bankruptcy filings in the U.S. increased 19 percent in February over last month, according to new American Bankruptcy Institute. Bankruptcy filings totaled 104,418 in February, up from the 87,981 filings in January 2012. Filings per day rose 27 percent to 3,601 from 2,838 in January. The 99,288 total noncommercial filings in February 2012 represented a 20 percent increase over the January 2012 total of 83,014. The total commercial filings of 5,130 for February 2012 increased three percent over the 4,967 filings in January 2012.

When compared to a year earlier, the   Epiq   data showed that the total February 2012 filings decreased five percent from the February 2011 total of 109,565. The total commercial filings for February 2012 fell 16 percent from the 6,076 commercial filings recorded in February 2011. Total noncommercial filings registered a four percent increase from the 103,489 filings in February 2011.

The average nationwide per capita bankruptcy-filing rate for the first two calendar months of 2012 (Jan. 1 – Feb. 29) increased to 3.73 (total filings per 1,000 per population). States with the highest per capita filing rate (total filings per 1,000 populations) for the first two months of 2012 were:

1. Tennessee (6.93)
2. Nevada (6.29)
3. Georgia (6.28)
4. Alabama (5.58)
5. California (5.28)

Source:   ACA   International