The disappearing Obamacare insurers

David Nather
Apr 12

Featured

The disappearing Obamacare insurers

Republicans aren't wrong when they say Obamacare lost a lot of insurers last year. Here's a look at the biggest losers among the 39 states that use the federal marketplace, based on HHS data. It shows you the drop between 2016 and 2017. (Twelve states had no change, so they're not listed.)

The big question: Will it get worse next year if insurers get tired of waiting for the Trump administration and Congress to make some clear plans?

Data: Department of Health and Human Services; Chart: Lazaro Gamio / Axios

Sara Fischer
47 mins ago

Featured

The global online terror crackdown

Axios / Rebecca Zisser

China announced Friday that it's investigating its own tech companies, like Tencent and Baidu, for giving users an avenue to spread violence and terror. The announcement follows government campaigns earlier this year in the UK, France and Germany that intend to place legal liability on tech companies for failing to control the presence of terrorist-related content on their platforms.

Why it matters in general: U.S. regulators have largely remained silent when it comes to policing the role of tech giants in distributing terrorist content, leaving the companies to police themselves in accordance to their own standards.
Why it matters now: In the past, tech companies have reacted to crises in a uniform fashion, but the attack in Charlottesville shows a a split. Some sites, like Google and GoDaddy, announced Monday that they would cut ties to a white nationalist website, while others have yet to comment. Neither Facebook nor Twitter updated their policies in response to the attack, although both groups do already have policies about violence.

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The Facebook issue: Critics argue that Facebook didn't do enough to prevent the attack, as the marches had apparently been organized through Facebook (see the image below). In a statement, Facebook tells Axios it "does not allow hate speech or praise of terrorist acts or hate crimes, and [it's] actively removing any posts that glorify the horrendous act committed in Charlottesville."

Sound smart: Facebook's business model is built around scale. It's corporate vision is based on inclusivity of all voices and perspectives. These goals are directly challenged when the company filters out content or restricts user privileges.

Facebook says it uses both technology and people to determine whether users take advantage of that openness with posts that glorify violence, or otherwise violate their community standards. In this case, the tech company didn't find that the event that brought together the Charlottesville rally violated community standards until the weekend of the event. Posts related to the "Daily Stormer" website Google and GoDaddy have disassociated with have mostly been removed by Facebook.

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David McCabe
1 hr ago

Featured

A spacey startup shoots for a comeback

Illustration: Rebecca Zisser / Axios

A startup that wants to build a mobile data network to fuel the Internet of Things is trying to convince regulators to let it use crucial airwaves.

It's the second time the company, now called Ligado Networks, has fought this battle. Its previous iteration, backed by Phil Falcone and called LightSquared, hit a dead-end 5 years ago. Now it's back with a new name, lots of money and well-connected allies as it tries to strike gold with connected devices, which it says it can serve using a combination of satellite airwaves and traditional spectrum — creating a sort of hybrid network.

Why it matters: If successful, Ligado could become an important IoT player and produce a big payout for big-name investors like Centerbridge Partners, Fortress Investment Group and J.P. Morgan Chase (the IoT market could be worth $110 billion by 2020, according to estimates). But Ligado's years-long corporate drama shows the risks involved in making bets on technologies that hinge on regulatory approval.

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The setup: Ligado began life as LightSquared, which wanted to use satellite frequencies to build a nationwide wireless network. But the FCC halted that plan based on objections of major GPS players that said the plan would interfere with GPS systems. LightSquared filed for bankruptcy in 2012.

Now, it's back with a new idea: creating a network to service IoT, or the increasing number of devices (cars, fridges, etc.) being connected to the web. It still needs sign-off from the FCC to use some of its spectrum for a combined terrestrial-satellite network, rather than the pure satellite services it provides right now.

Pushback: Ligado argues it's dealt with the interference issues that sunk its last bid for airwaves. Critics say the new plan could interfere with signals used in aviation, the government's National Oceanic and Atmospheric Administration and other commercial satellite providers. Critics include Iridium, a satellite company, AccuWeather and Airlines for America, a major trade group.

Ligado makes its case:

The company says that a series of agreements with some of its former critics shows it's solved many of the issues that plagued its previous iteration. "The top five GPS manufacturers and Ligado agree that Ligado's operations and GPS consumers can coexist, and those agreements have been before the Commission for over eighteen months," said Ashley Durmer, the company's policy chief, in a statement. "We also have worked with the FAA and the aviation community to protect aviation safety by agreeing to meet all FAA standards related to certified devices."
The company has hired three lobbying firms since emerging from bankruptcy in December 2015. The company's board is stacked with connected individuals. That includes Ivan Seidenberg, the former CEO of Verizon, and Reed Hundt, who was FCC Chairman during the Clinton administration. Ligado has been extremely active in lobbying the FCC, disclosure filings show.

What's next: FCC Chairman Ajit Pai hasn't tipped his hand, and there are no indications that a decision is imminent. "We have no update to provide that this point. We're studying the issue," he said recently, adding the agency is listening to all stakeholders. But Ligado is on the clock: Reuters reported earlier this year that the company was working with bankers to explore a possible sale or find another investment.

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Steve LeVine
1 hr ago

Featured

Where the robots are

Robots are coming, but, at least in the United States, they're landing in clusters. Most are in Michigan and Ohio, the base of the U.S. auto industry, and the home of one of every five robots in the U.S. In all, the auto industry accounts for nearly half of all industrial robots in use in the country, with Detroit alone having almost five times the number of any other major U.S. city (see the enormous red circle), per a new Brookings study.

Data: Brookings Institution; Graphic: Chris Canipe / Axios

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Mark Muro, a senior fellow at Brookings, tells Axios that the data for this map came from the International Federation for Robotics. The resulting pattern is dense concentration in the industrial upper Midwest, Northeast and Upper South, along with the San Francisco and Los Angeles areas; vast parts of the country have none, while a few secondary cities, like Kokomo (auto parts) and Elkhart-Goshen (RVs) in Indiana, have 35 robots for every 1,000 people (even Detroit has just 8.5).

"They aren't everywhere," Muro said. "They are in industrial parts of the country associated with heightened social and labor market anxiety."

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Erica Pandey
35 mins ago

Featured

Trump-backed and Trumpian candidates face off in Alabama

Olivier Matthys / AP

Alabama Republicans will cast votes for their Senate nominee today. If no candidate takes 50% of the vote, there will be a runoff election on Sept. 26 — a likely outcome. The choice is between a candidate that has the support of the president and one of two opposers who echo Trump's populist message.

Luther Strange, the incumbent, was appointed after Sen. Jeff Sessions became attorney general. Strange has the support of President Trump and Majority Leader Mitch McConnell, whose allies have funneled millions of ad dollars into his campaign.
Roy Moore, the front-runner, is a former Alabama chief justice. His campaign strategy most closely aligns with Trump's, with ads that promise he'll "drain the swamp."
Rep. Mo Brooks, the anti-McConnell candidate, echoes Moore's anti-establishment message. His ad addresses Trump directly: "Mr. President, isn't it time we tell McConnell and Strange, 'You're fired?'"

Bob Herman
1 hr ago

Featured

The collapse of Community Health Systems

Just three years ago, Community Health Systems was the largest for-profit operator of hospitals with more than 200 facilities scattered in rural and suburban areas with growing populations. Now, the company is hemorrhaging money, sitting atop a mountain of debt and teetering on the edge of bankruptcy — all major reasons why CHS has lost almost 90% of its market value.

Data: Money.net; Chart: Andrew Witherspoon / Axios

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"I think the company has a nontrivial chance of defaulting," said one CHS investor who asked to be unnamed because of the sensitivity of the issue. Tomi Galin, a CHS spokeswoman, did not make any company officials available for an interview, but said the company is confident it will have "a stronger core group of hospitals that are better positioned for long-term growth."

Why it matters: CHS sits in a massive hole after a string of missteps, according to industry insiders. And it's not likely to get better for CHS, or the local communities that rely on a CHS facility, as more people get treated in lower-cost outpatient centers instead of the hospital.

The collapse: It began in 2013 and continued into January 2014. That's when CHS completed its acquisition of Health Management Associates, a for-profit hospital chain that had a slew of financial and legal problems. The deal was worth $7.6 billion, including debt, and made CHS the largest for-profit hospital company by number of facilities.

"That was the death knell," a health care investment banker said. "HMA was a troubled company, and (CHS) thought bigger would be better."

Here's what has happened at CHS since then:

A market cap that crumbled from roughly $7.5 billion in 2015 to less than $800 million today.
Net losses of almost $1.9 billion from the start of 2016 through the second quarter of this year.
A ballooning debt load totaling $14.7 billion as of June 30.
Larry Robbins, a prominent hedge fund manager, dumped his entire portfolio of CHS stock. Paul Singer of Elliott Management did the same earlier this year.
A fire sale of 30 hospitals to get cash to pay down debt.
Some of those sold hospitals were HMA remnants, while others were considered CHS' better, more profitable hospitals. "It's almost like they're burning the furniture," the banker said. An investor said CHS was "selling off the fine china" to meet debt payments.
A completed spin-off of Quorum Health that, in essence, threw many struggling rural hospitals off CHS' books. Quorum isn't faring well either.
High amounts of uncompensated care. CHS owns many hospitals in the South, and most of those states did not expand Medicaid under the Affordable Care Act. That means CHS has absorbed more uncompensated care than hospitals in Medicaid expansion states.

Looking ahead: CHS plans on divesting even more hospitals, executives said during their latest earnings call. They likely will be profitable hospitals, as buyers won't touch money-losing inpatient facilities with dwindling admissions.

But large debt payments are due in 2019 through 2022. Short-term cash from transactions appears to be a bandage, and a subsequently smaller profit base won't solve the big debt picture, making bankruptcy a real possibility, an investor said.

Galin, the CHS spokeswoman, said the money from the hospital sales "are being used to reduce our debt" and that "cash flow generation remains strong."

Leadership questions: Many CHS executives have retired or left in the past two years, including longtime CFO Larry Cash. Wayne Smith, the CEO of the hospital chain since 1997, remains in his position. Smith is one of the highest earners among hospital executives and reaped more than $1 million in bonuses alone the past two years even though CHS' stock price tanked.

Numerous sources would not go on the record to talk about CHS. One hospital industry analyst said this when asked how Smith still had his job despite the company's problems: "Your question is very valid."

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Ina Fried
7 hrs ago

Featured

Intel CEO exits President Trump's manufacturing council

Asa Mathat for Vox Media

Intel said Monday that CEO Brian Krzanich was leaving President Trump's American Manufacturing Council, the latest executive to distance himself from the president following the weekend's events in Virginia.

In a blog post, Krzanich said that the decline in American manufacturing remains a serious issue, but said that "politics and political agendas have sidelined the important mission of rebuilding America's manufacturing base."
"I resigned to call attention to the serious harm our divided political climate is causing to critical issues, including the serious need to address the decline of American manufacturing," Krzanich said in a blog post. "Politics and political agendas have sidelined the important mission of rebuilding America's manufacturing base."
Go deeper: A number of CEOs have dropped out of Trump's presidential councils, including Elon Musk and Under Armour CEO Kevin Plank.

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Here is Krzanich's full statement:

Earlier today, I tendered my resignation from the American Manufacturing Council. I resigned to call attention to the serious harm our divided political climate is causing to critical issues, including the serious need to address the decline of American manufacturing. Politics and political agendas have sidelined the important mission of rebuilding America's manufacturing base.

I have already made clear my abhorrence at the recent hate-spawned violence in Charlottesville, and earlier today I called on all leaders to condemn the white supremacists and their ilk who marched and committed violence. I resigned because I want to make progress, while many in Washington seem more concerned with attacking anyone who disagrees with them. We should honor – not attack – those who have stood up for equality and other cherished American values. I hope this will change, and I remain willing to serve when it does.I am not a politician.

I am an engineer who has spent most of his career working in factories that manufacture the world's most advanced devices. Yet, it is clear even to me that nearly every issue is now politicized to the point where significant progress is impossible. Promoting American manufacturing should not be a political issue.My request—my plea—to everyone involved in our political system is this: set scoring political points aside and focus on what is best for the nation as a whole. The current environment must change, or else our nation will become a shadow of what it once was and what it still can and should be.

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Shannon Vavra
8 hrs ago

Featured

North Korea calls off Guam threat

KRT via AP Video

North Korean state media reports that Kim Jong Un is backing off from his threat to launch missiles at Guam, a U.S. territory, per the WSJ. He decided to call it off after he visited a military command post and looked over a military plan his senior officers presented him.

Get smart: Waheguru Pal Singh Sidhu, a visiting clinical assistant professor of Global Affairs within the NYU SPS Center for Global Affairs who's an expert on North Korea, told Axios earlier today that he didn't expect North Korea to follow through on Guam because North Koreans are the "masters of evoking threats. They're trying to match Trump word for word."

This comes after a tension-filled week in which Trump said he would rain down "fire and fury" on North Korea if it threatened the U.S. again and in which the North threatened to launch missiles at Guam.

What to watch: Kim could change his mind "if the Yankees persist in their extremely dangerous reckless actions,” North Korean state media warned.

Shannon Vavra
9 hrs ago

Featured

Report: Trump campaign aide tried setting up Russia meetings

Alex Brandon / AP

Between March and September of last year, George Papadopoulous, a member of the Trump campaign's foreign policy team, sent at least half a dozen requests on behalf of Trump or his team to meet with Russian officials, The Washington Post's Tom Hamburger, Carol D. Leonnig, and Rosalind S. Helderman report. The report is based on campaign emails read to the Post and confirmed by two others with access to them.

In one email Papadopoulos wrote to seven campaign officials with the subject line "Meeting with Russian Leadership – Including Putin" in order "to discuss US-Russia ties under President Trump." An April 27 email allegedly reads, "Putin wants to host the Trump team when the time is right."

An important note: "it is unclear whether [Papadopoulos] was acting as an intermediary for the Russian government, although he told campaign officials he was," the Post reports.

Papadopoulos reportedly pressed on with his goals despite protests from his colleagues on the campaign.

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The internal reactions:

Campaign co-chairman Sam Clovis thought NATO allies should be consulted before moving forward
Adviser Retired Navy Rear Adm. Charles Kubic mentioned some legal concerns, including the Logan Act, which blocks U.S. citizens from negotiating with foreign governments. He added, "Just want to make sure that no one on the team outruns their headlights and embarrasses the campaign."
Campaign chairman Paul Manafort expressed concern and rejected a May 2016 proposal for Trump to meet with Russian officials. A month later Manafort met with a Russian government lawyer in Trump Tower along with Jared Kushner and Donald Trump Jr.

Who is Papadopoulos, per the Post: "Less than a decade out of college, Papadopoulos appeared to hold little sway within the campaign…" He used to participate in a Model UN program and served as an intern at the conservative Hudson Institute. He was signed up as a volunteer for the Trump campaign and in March 2016 Trump announced he was to be on his foreign policy team.

The exchanges were reportedly handed over this month to congressional committees after the White House and defense lawyers reviewed them.

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Steve LeVine
12 hrs ago

Featured

Fears of a U.S.-North Korea war have dropped

KRT via AP

Investors have decided that, at least for now, war between the U.S. and North Korea is much less likely than it seemed last week, sending up stocks today with their greatest gains in at least two months.

The Dow Jones was up 0.6% and the S&P 500 by 1%. Closer to the theater of potential war, South Korean stocks rose 0.6%, and Hong Kong by 1.36%.
North Korean leader Kim Jong Un "is big on using coercive diplomacy to move closer to what he wants ... but he doesn't intend to fight," said James Lewis at the Center for Strategic and International Studies, speaking to Axios last Friday.
"He'd like to split the United States and South Korea. But he doesn't want war. He knows what will happen as well as anyone."

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Looking forward, GeoQuant, a AI-based firm, said its models show a leveling-off of risk of war through the end of the year as well. The "trend supports an analysis that North Korea remains ultimately under Chinese control, checking the risk of outright war on the Korean peninsula," GeoQuant said in a blog post.

The greatest threat is miscalculation: Neither the U.S. nor North Korea seems to want war, but history shows that war often happens by its own rhythm. "Someone will decode that the other side is going to do something and take action to block it," Lewis said. Hence, geostrategists are likely to remain on edge as the brinksmanship between the two countries continues.

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Jonathan Swan
12 hrs ago

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Scoop: Sheldon Adelson disavows campaign against H.R. McMaster

Kin Cheung / AP

Las Vegas billionaire Sheldon Adelson has disavowed a campaign against National Security Adviser H.R. McMaster, which is being pushed by a group Adelson funds, the Zionist Organization of America.

Andy Abboud, who represents Adelson, tells me: "Sheldon Adelson has nothing to do with the ZOA campaign against McMaster. Had no knowledge of it. And has provided zero support, and is perfectly comfortable with the role that McMaster is playing."

Update: Abboud followed up with another phone call to clarify that Adelson doesn't know McMaster and hasn't developed an opinion about him. Adelson doesn't want his intervention to be interpreted as a political endorsement; but rather that he has had nothing to do with, and doesn't support, the campaign against McMaster.

Why this matters: Adelson is one of the biggest financial donors in Republican politics, and his influence over national security and Israel-related matters is substantial. His is a voice listened to by President Trump and other senior White House officials like Jared Kushner.

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The campaign Adelson is disavowing is being led by the Zionist Organization of America — a conservative pro-Israel group funded by Adelson.
ZOA's president Mort Klein, who is close to White House chief strategist Steve Bannon, has accused McMaster of being soft on Israel and unserious about the threat of radical Islamic terrorism. He's called for Trump to "reassign" McMaster "to another position where he can do no further harm on these critical national security issues."
Klein is increasingly isolated in his opposition to McMaster. His only senior ally inside the White House is Bannon; the rest of the senior staff has united in disgust at the outside campaign against McMaster.
David Friedman, Trump's staunchly pro-Israel ambassador, is vouching for McMaster, though he was unable to convince Klein.

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Shannon Vavra
14 hrs ago

Featured

FBI and DHS reported "persistent" white supremacy threat in May

Steve Helber / AP

The FBI and the Department of Homeland Security warned months ago that white supremacists "were responsible for 49 homicides in 26 attacks from 2000 to 2016 … more than any other domestic extremist movement," per Foreign Policy, which obtained the intelligence bulletin detailing the warning, entitled, "White Supremacist Extremism Poses Persistent Threat of Lethal Violence."

These kinds of attacks outnumber Islamist incidents by about 2 to 1, per the Investigative Fund at the Nation Institute.

Why it matters: Candidate Trump ran on the idea that "anyone who cannot name our enemy is not fit to lead this country," as he told a rally in Ohio, but critics point out Trump's first statement on the violence in Charlottesville included a condemnation of violence on "many sides," and it took him until Monday to specifically condemn white supremacy.

Alayna Treene
14 hrs ago

Featured

Trump "seriously considering" pardoning Joe Arpaio

Then-presidential candidate Donald Trump with Arizona Sheriff Joe Arpaio (Mary Altaffer / AP).

President Trump told Fox News Sunday that he is "seriously considering a pardon" for Joe Arpaio, the former Arizona Sheriff who was recently charged with contempt of court for refusing to obey a state judge's order to stop traffic officers from racially profiling suspected undocumented immigrants.

"He has done a lot in the fight against illegal immigration. He's a great American patriot and I hate to see what has happened to him," said Trump.

Background: 85-year-old Arpaio, nicknamed "America's toughest sheriff", received national attention for his aggressive treatment of inmates, including "forcing inmates to wear pink underwear and housing them in desert tent camps where temperatures often climbed well past 100 degrees Fahrenheit," per Fox News. Arpaio endorsed Trump in January 2016, and later handled security for some of the then-candidate's rallies.

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Arpaio's reaction to the news: The ex-sheriff said he'd accept Trump's pardon, "because I am 100 percent not guilty," but added that he would never ask for a pardon if "it causes heat... I don't want to do anything that would hurt the president."

Timing: Arpaio is set to be sentenced on October 5 and could face up to six months in jail. However, some attorneys have expressed doubt that he'll receive any jail time, due to his age and his clean record with no prior convictions.

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Dan Primack
15 hrs ago

Featured

Travis Kalanick begins to fight back

Lazaro Gamio / Axios

Former Uber CEO Travis Kalanick is beginning to fight back against a fraud lawsuit brought by venture capital firm Benchmark, which seeks to boot Kalanick from the company's board of directors.

In documents filed today in Delaware Chancery Court, Kalanick's attorneys argue that Benchmark's allegations should be submitted to arbitration, in accordance with the terms of an amended voting agreement that is at the heart of the VC firm's case. They ask that Kalanick be given until end of business this Thursday to respond to both oppose Benchmark's motion for an expedited process and to formally submit his own motion to compel arbitration.

Kalanick also issued a public statement, saying he is "baffled" by the lawsuit.

Why it matters: Benchmark is, in part, betting that Kalanick won't want to submit to publicly-available depositions. But if Kalanick can get the case kicked to arbitration, then that piece of Benchmark leverage disappears.