Health Care Reform

Health insurance carriers fear many young people will opt to go without coverage.

July 9, 2013 by Frank West

Youth weighing a $100 fine against the cost of insurance.

Dan Lopez rarely gets sick and hasn’t been to a doctor in 10 years, so buying health insurance feels like a waste of money.

Even after the federal health overhaul takes full effect next year, the 24-year-old said he will probably decide to pay the $100 penalty for those who skirt the law’s requirement that all Americans purchase coverage.

“I don’t feel I should pay for something I don’t use,” said the Milwaukee resident, who makes about $48,000 a year working two part-time jobs.

Because he makes too much to qualify for government subsidies, Lopez would pay a premium of about $3,000 a year if he chose to buy health insurance.

“I shouldn’t be penalized for having good health,” he said.

Persuading young, healthy adults such as Lopez to buy insurance under the Affordable Care Act is becoming a major concern for insurance companies as they scramble to comply with the law, which prohibits them from denying coverage because of pre-existing conditions and limits what they can charge to older policyholders.

Experts warn that a lot of these so-called “young invincibles” could opt to pay the fine instead of spending hundreds or thousands of dollars each year on insurance premiums. If enough young adults avoid the new insurance marketplace, it could throw off the entire equilibrium of the Affordable Care Act. Insurers are betting on the business of that group to offset the higher costs they will incur for older, sicker beneficiaries.

The nonpartisan Congressional Budget Office estimates that about 6 million people of various ages will pay the tax penalty for not having insurance in 2014, the first year the law championed by President Barack Obama will be fully implemented.

It’s hard to estimate how many of those will be the young and healthy adults that insurers are trying to reach, but that subgroup makes up a very small portion of the overall market. Even though it’s small, experts say it could be enough to throw the system’s financing off-kilter.

About 3 million 18-to-24-year-olds in the U.S. currently purchase their own insurance. Many pay high prices for scant benefits, with high deductibles and co-pays because they make too much to qualify for Medicaid and have no coverage options from their employers or parents. The Urban Institute estimates that the majority of adults in their 20s will qualify for government subsidies under the Affordable Care Act.

Premium hikes could be a disincentive for young people weighing their options. Premiums for people aged 21 to 29 with single coverage who are not eligible for government subsidies would increase by 42 percent under the law, according to an analysis by actuaries at the consulting firm Oliver Wyman. By comparison, an adult in his or her early 60s would see about a 1 percent average increase in premiums under new federal health rules.

“The key to keeping health care affordable is you really want to balance the pool, where you have enough young and healthy people to balance off the care of the older, sicker people who are likely to utilize much more health care services,” said Justine Handelman, the Blue Cross and Blue Shield Association’s vice president for legislative and regulatory policy.

She said younger people use about a fifth of the services that older beneficiaries do.

Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology who helped craft that state’s law, said he thinks the first-year federal penalty should be higher.

The penalty under the Massachusetts law, which served as the model for Obama’s overhaul, was $218 the first year in 2007. Gruber said that amount proved effective.

“People hate paying money and getting nothing for it,” he said.

Francois Louis, a 20-year-old college student in South Florida who works part-time, can’t remember the last time he went to the doctor and gets by on over-the-counter medication whenever he’s sick. He’d love to get a checkup, but says it’s too expensive on his income of less than $15,000 a year.

“I probably would do the $100 fine because it’s just cheaper and you don’t have to worry about paying off monthly costs,” said Louis, a student at Broward Community College near Fort Lauderdale.

By Kelli Kennedy
The Associated Press

Filed Under: Affordable Care Act, Health Care Reform, Health Insurance, San Diego Health Insurance Tagged With: Affordable Care Act, Health Care Reform, individual mandate, Obamacare

Patient Protection and Affordable Care Act (PPACA) Trainwreck.

July 3, 2013 by Frank West

The Obama administration’s move to delay until 2015 a requirement that employers offer health insurance or else face stiff penalties is yet another indication that the embattled law is a failure and should be repealed, Republicans and conservatives said on Tuesday.

“The president’s healthcare law is already raising costs and costing jobs,” House Speaker John Boehner said. “This announcement means even the Obama administration knows the ‘train wreck’ will only get worse.

“I hope the administration recognizes the need to release American families from the mandates of this law as well,” the Ohio Republican said. “This is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms.”

“Obamacare costs too much and it isn’t working the way the administration promised,” said Senate Minority Leader Mitch McConnell of Kentucky. “The White House seems to slowly be admitting what Americans already know: Obamacare needs to be repealed and replaced with common-sense reforms that actually lowers costs for Americans.”

And Barney Keller, spokesman for the Club for Growth, called the delay “a transparently political ploy to help the Democrats who voted for it avoid the consequences at the ballot box in 2014. This just helps make the case that Obamacare should be completely repealed — period, exclamation point.”

The IRS, which is charged with implementing Obamacare, remains under fire for widespread mismanagement and for the targeting of tea party, conservative, and religious groups in evaluating their applications for tax-exempt status.

And the American Action Forum, a Washington advocacy group, said that Obamacare had so far cost a total of $30.8 billion and 111.4 million hours for completing paperwork alone.

The group said 55,742 employees — working 2,000 hours per year — would be needed to process all the red tape associated with Obamacare.

While the employer mandate was delayed with Tuesday’s announcement, the individual mandate — which requires individuals to obtain health insurance — presumably remains on schedule for 2014.

Filed Under: Affordable Care Act, Health Care Reform, Health Insurance, Health Insurance Exchange, San Diego Health Insurance Tagged With: Affordable Care Act, Health Care Reform

Boehner: Obamacare ‘Train Wreck,’ ‘Unworkable’.

July 3, 2013 by Frank West

The announcement tonight of the delay of part of the implementation of Obamacare prompted Speaker of the House John Boehner to release this statement, saying the entire bill is a “train wreck” and “unworkable.”

“The president’s health care law is already raising costs and costing jobs. This announcement means even the Obama administration knows the ‘train wreck’ will only get worse. I hope the administration recognizes the need to release American families from the mandates of this law as well. This is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms,” the statement reads.

Filed Under: Affordable Care Act, Health Care Reform, Health Insurance Exchange Tagged With: Affordable Care Act, Health Insurance Exchange, individual mandate, Obamacare

The Tax Penalty Won’t Push People to Buy Health Insurance.

June 27, 2013 by Frank West

The Tax Penalty Won’t Push People to Buy Health Insurance

Two-thirds of people surveyed by HealthPocket say a $95 IRS penalty for being uninsured won’t motivate them to buy insurance. Nearly 30% are not sure whether the penalty will motivate them to buy insurance, and only 8% say it would.

Beginning in 2014, the Affordable Care Act requires consumers to buy health insurance or face a tax penalty, with some exceptions for people with financial hardships or religious beliefs that preclude them from purchasing health insurance, among others.

The tax penalty starts at $95 per individual or 1% of household income, whichever is greater. By 2016, the penalty rises to 2.5% of annual household income or a minimum of $695 per person, whichever is greater. Bruce Telkamp, CEO of HealthPocket said, “The law will be most effective if consumers see real value in obtaining the insurance coverage. Only insurers that offer high quality and affordable health plans should expect to see significant new enrollments this fall.”

The tax penalty is not the only strategy that Obamacare will use to promote enrollment. Some premium and out-of-pocket assistance is available for individuals making less than 400% of the federal poverty level or $45,960. However, 63% of consumers who fall in this income band say a tax penalty will not motivate them, indicating that that they need more outreach. For more information, visitwww.HealthPocket.com

Filed Under: Affordable Care Act, Health Care Reform, Health Insurance, Health Savings Account Tagged With: Affordable Care Act, Health Care Reform, Health Insurance Exchange, individual mandate

15 PPACA provisions that will take effect in 2014.

June 27, 2013 by Frank West

The effective date of the Patient Protection and Affordable Care Act (PPACA) was March 23, 2010, although various provisions have their own effective dates from January 1, 2010, (the small business income tax credit) through 2018. The start of 2013 saw the launch of a number of key provisions, among them Medicare tax increases, limits on Health FSA deferrals and the requirement that W-2 reporting note employer and employee payments for certain health care items in 2012.

But 2014 is the year when most core pieces of PPACA will be put into effect, notably the mandates that employers with 50+ employees provide health insurance and that individuals obtain minimum essential health coverage for themselves and their dependents, whether or not they have access to coverage through their employer.

Equally momentous, beginning Jan. 1, 2014, states are required to have opened a state-run health insurance exchange, or to have partnered with the federal government to open an exchange. In theory, within these exchanges, insurance companies will compete for business on a transparent, level playing field, which should reduce costs and give individuals and small businesses the purchasing power enjoyed by big businesses. However, health reform does many things to increase costs by covering those who are now uninsurable and by increasing mandated benefits. Many predict these factors will far outweigh any efficiencies created by the exchanges and that health insurance prices will increase. If exchanges succeed, they will create the first viable alternative to the group markets for the younger than age sixty-five population.

Filed Under: Affordable Care Act, Health Care Reform, Health Insurance, Health Insurance Exchange Tagged With: Affordable Care Act, Health Care Reform, Health Insurance Exchange

Tackling the New Health-Care Rules.

June 21, 2013 by Frank West

Ready or not, here it comes!

The launch of new marketplaces for buying your own health insurance—a key piece of the “Obamacare” plan—is just four months away.

The launch of new marketplaces for buying your own health insurance—a key piece of the “Obamacare” plan—is just four months away, and the so-called insurance exchanges are starting to take shape.

In late May, the state of California said 13 health-care plans will participate in its exchange, offering insurance in the state’s 19 regions, and insurers in several other states are proposing rates and plans. The federal government will run exchanges in states that don’t provide their own.

If you get your health insurance through your job or through Medicare or Medicaid, you probably won’t be affected by the exchanges. But if you don’t have health insurance through work or you have been buying your own as a sole proprietor, the exchanges will provide central sites for comparing plans and buying individual and family insurance.

For many people who currently buy individual insurance, premiums could go up, reflecting new fees, taxes and a requirement that 10 essential areas be covered. Among those are maternity care, substance abuse and mental-health services and prescription-drug coverage, which aren’t standard in individual policies today, says Sarah Lueck, a senior policy analyst at the Center on Budget and Policy Priorities, a nonprofit group in Washington.

In addition, plans can’t exclude pre-existing conditions. While a typical 60-year-old today might pay five to seven times more for health insurance than a 20-year-old, the new law limits that ratio to three times what a typical young person might pay, says Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s trade group.

Those who buy through the exchanges and have incomes below certain limits also will get tax credits to reduce their costs.

Beginning next year, those who choose to forgo health insurance could pay a tax penalty of 1% of their family income, or at least $95. Those penalties are set to increase in 2015 and 2016.

Here’s an overview of the new twists and turns coming this fall.

Know your metals. When you go to an exchange, such as Covered California you will see four different levels of plans.

“Bronze” plans are priced so that approximately 60% of the average person’s health-care costs are covered by insurance. “Silver” should cover about 70% of the average person’s costs, “gold” 80% and “platinum” 90%. (In addition, those under 30 can buy a limited “catastrophic plan” intended to provide insurance only when costs reach a certain point.)

Generally, bronze plans should have the lowest premiums and platinum the highest, but prices can vary widely. Proposed premiums for a 40-year-old single person in Portland, Ore., for instance, range from $169 to $401 a month for a bronze plan and $276 to $591 a month for a gold plan.

Bronze plans might look cheap, but that will hold true only if you don’t need much medical care. If you suffer a serious illness or are hurt in an accident, you might have to meet a deductible of up to $5,000 for an individual or $10,000 for a family or pay half the hospital bill.

Under the law, annual out-of-pocket expenses are capped at $6,350 for a single person and $12,700 for a family.

• Check the details. Some states, including California and New York, are standardizing at least some of their plans. For instance, some silver plans will have the same copayments for specialists or emergency-room visits, so buyers can compare apples to apples.

But in most states, plans under a category like silver might have very different deductibles and copays, which you will need to take into account in calculating your actual cost.

“You don’t shop for this the way you do for peaches,” says Karen Pollitz, a senior fellow at the Kaiser Family Foundation, a nonprofit that focuses on health-care issues.

• Network, network. The best copays and rates will apply only to in-network providers, so you will want to be sure that you are comfortable with your choices of doctors and hospitals. While a broad network might be appealing, a smaller one could save you money.

Paul Wingle, head of exchange strategy and implementation at insurer Aetna, AET +1.59%notes that a silver plan with a small network might be cheaper than a bronze plan because the insurer has negotiated better deals with a smaller group of providers.

• What’s your real cost? The majority of people who need to buy insurance are expected to receive some help from the government, depending on their income.

Through tax credits, the government will help fund some of the premiums for those whose household income is up to 400% of the federal poverty level. That’s $45,960 for an individual or $94,200 for a family of four, based on 2013 numbers.

Experts expect those subsidies to reduce some of the cost sting, especially for young people. Those with incomes below 250% of the federal poverty level should also pay smaller deductibles and copays.

• Be prepared. Open enrollment for coverage starting Jan. 1, 2014, will begin Oct. 1 and run through March 31. After that, open enrollment for 2015 will run only from Oct. 15 to Dec. 7, 2014.

To get a head start, you might want to evaluate your medical needs and calculate what will most affect your budget: overall deductibles or copays for specialists or prescription medicine. If you don’t already have a good rainy-day fund, you also should set aside money so that a large deductible or out-of-pocket expense doesn’t put you into debt.

Finally, if you smoke, this is a good time to kick the habit. Under the law, tobacco users could pay as much as 50% more in premiums than nonsmokers.

Write to Karen Blumenthal at karen.blumenthal@wsj.com

A version of this article appeared June 1, 2013, on page B8 in the U.S. edition of The Wall Street Journal, with the headline: Tackling the New Health-Care Rules.

Filed Under: Health Care Reform, Health Insurance Exchange Tagged With: Health Care Reform, Health Insurance Exchange

Individual Health Care Mandate Q&A

May 15, 2013 by Frank West

Beginning in 2014, the Affordable Care Act includes a mandate for most individuals to have health insurance or potentially pay a penalty for noncompliance. Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance.

What type of coverage satisfies the individual mandate?

“Minimum essential coverage”

What is minimum essential coverage?

Minimum essential coverage is defined as:

Coverage under certain government-sponsored plans
Employer-sponsored plans, with respect to any employee
Plans in the individual market,
Grandfathered health plans; and
Any other health benefits coverage, such as a state health benefits risk pool, as recognized by the HHS Secretary.

Minimum essential coverage does not include health insurance coverage consisting of excepted benefits, such as dental-only coverage.

How does “Minimum Essential Coverage” differ from “Essential Health Benefits”?

Essential health benefits are required to be offered by certain plans starting in 2014 as a component of the essential health benefit package. They are also the benefits that are subject to the annual and lifetime dollar limit requirements.

This is different than minimum essential coverage, which refers to the coverage needed to avoid the individual mandate penalty. Coverage does not have to include essential benefits to be minimum essential coverage.

What is the penalty for noncompliance?

The penalty is the greater of:

For 2014, $95 per uninsured person or 1 percent of household income over the filing threshold,
For 2015, $325 per uninsured person or 2 percent of household income over the filing threshold, and
For 2016 and beyond, $695 per uninsured person or 2.5 percent of household income over the filing threshold.

There is a family cap on the flat dollar amount (but not the percentage of income test) of 300 percent, and the overall penalty is capped at the national average premium of a bronze level plan purchases through an exchange. For individuals under 18 years old, the applicable per person penalty is one-half of the amounts listed above.

Beginning in 2017, the penalties will be increased by the cost-of-living adjustment.

Who will be exempt from the mandate?

Individuals who have a religious exemption, those not lawfully present in the United States, and incarcerated individuals are exempt from the minimum essential coverage requirement.

Are there other exceptions to when the penalty may apply?

Yes. A penalty will not be assessed on individuals who:

cannot afford coverage based on formulas contained in the law,
have income below the federal income tax filing threshold,
are members of Indian tribes,
were uninsured for short coverage gaps of less than three months;
have received a hardship waiver from the Secretary, or are residing outside of the United States, or are bona fide residents of any possession of the United States.

Filed Under: Affordable Care Act, Health Care Reform Tagged With: Health Care Reform, individual mandate

Health Care Reform: What is a health insurance exchange?

May 15, 2013 by Frank West

In case you haven’t heard, big changes are coming in October 2013. Big changes for a lot of people. The Affordable Care Act is expected to help increase access to health care. Health insurance exchanges will be an important part of that.

Most people get health insurance through their employers. But people without this option will now be able to shop for health insurance on exchanges, as an alternative to buying coverage directly from individual health insurers. Exchanges are new and easy to use. And they’ll be open for business in October 2013, allowing consumers to shop for health plans that will begin on January 1st.

Experts predict that by 2016, more than 25 million people will use exchanges to buy health insurance.

So what are exchanges? How do they work? How will things change? And why is this important?

Let’s talk about it!

Think of an exchange as an online marketplace. It’s a website where shoppers can research all their options and then buy health insurance.

There are different types of exchanges… first let’s talk about a public exchange.

The Affordable Care Act requires every state to offer an exchange to its residents. States have a few options:

A state can choose to create and run its own exchange.
If a state decides not to run its own exchange, residents of that state can shop on an exchange that will be run by the federal government.
Or a state can partner with the federal government. In a partnership model, the state and federal government share responsibility for operating that state’s exchange.

No matter what each state decides to do, an Exchange will be available to residents in every state.

Public exchanges will exist for both individuals, who are buying insurance for themselves, and for small group employers, who can buy insurance to offer to their employees. The small group exchange is called SHOP – short for Small Business Health Options Program.

Why are exchanges expected to be so popular? There are a few reasons:

The Affordable Care Act no longer allows insurers to deny coverage or charge people more based on their health status or pre-existing conditions. So, many people who were unable to buy coverage in the past will now start shopping for a health plan.
Starting in 2014, individuals are required to buy health insurance or face penalties. This is called the “individual mandate.” Although the penalty for not buying coverage is initially low, it will grow over time. As the penalty goes up, so will participation on exchanges.
The Affordable Care Act will provide tax credits and subsidies for individuals who qualify, to help make insurance more affordable, when they shop on a public exchange.

Many individuals who shop on exchanges will be new to health insurance. To help make shopping easier, health plans on a public exchange will be labeled platinum, gold, silver or bronze. The metallic level helps shoppers understand the level of coverage a plan offers – how much they will need to pay and what the plan pays.

Platinum plans will have the lowest out of pocket cost for members but the monthly premiums will generally be higher. Bronze plans, on the other hand, will have the highest out of pocket costs for members, but will typically feature lower monthly premiums.

All plans on an exchange have to offer some core benefits – called “essential health benefits” – like preventive and wellness services, prescription drugs, and coverage for hospital stays.

Public exchanges are designed to help shoppers choose a plan that fits their needs and their budget.

So that’s the public exchange – offered by the government – either state or federal, or both.

There are also private exchanges. Private exchanges are not part of the Affordable Care Act. They are created by private sector companies – for example, by a health insurance company or a brokerage or consulting firm. A few private exchanges exist today, but they are becoming increasingly popular.

Like public exchanges, private exchanges can sell to both individuals and employer groups.

Unlike public exchanges, private exchanges are already open for business.

For employers who are trying to keep the cost of offering health benefits manageable, private exchanges offer an interesting solution. Employers can give their employees a set amount of money and then direct them to a private exchange. There, they can shop for a health plan and other benefits, like dental, based on what the employer has selected as options.

Public and private exchanges are likely to appeal to different audiences. Individuals who do not have access to affordable health insurance today are more likely to shop on a public exchange because of the subsidies, which are not available through private exchanges. Employers are more likely to send their employees to a private exchange. And both individuals and small employers will still be able to shop for coverage as they do today, directly from health insurers.

So to highlight a few key messages about exchanges:

Exchanges give people additional access and more opportunity to buy insurance.
A public exchange may be run by the state or federal government, or by the state and federal government working together.
Every state will have a public exchange available to its residents.
Subsidies and tax credits will help make insurance affordable for many individuals who shop on the public exchanges.
Small group employers can buy and offer insurance through an exchange, as well.
Private exchanges are not run by the government but by a private sector company, like a health plan or a consulting firm.
These exist today, but they will become more popular as employers look for new ways to offer affordable benefits to their employees.

One thing is certain: Exchanges are going to change the way millions of Americans view their health insurance – whether it’s how they shop for a plan, what plan they decide to buy or how they use their benefits.

Here at Aetna, we’re ready to do our part to help make health care easy to shop for, easy to understand and easy to use.

Filed Under: Health Care Reform, Health Insurance, Health Insurance Exchange Tagged With: Health Insurance Exchange, individual mandate

HHS Resurrects ‘ACORN’ Through ObamaCare.

May 11, 2013 by Frank West

ObamaCare provides millions of dollars in grants to hire community activists and others as “navigators” to assist individuals enroll in health insurance provided by state or federal exchanges and, according to recent reports, register people to vote. In a new rule proposed Wednesday, HHS lays out numerous guidelines for these “navigators”, including paying them up to $48/hour for their work. The rule, guidelines and voter registration effort are a potential vehicle to resurrect ACORN or an ACORN-like entity.

One organization expected to take a lead role in distributing the funds and overseeing hiring is Enroll America, a new non-profit headed by Anne Filipic, a former Obama White House official under Valerie Jarrett. Filipic was also a senior staff member at OFA director and a former Obama campaign director. The organization was founded, in part, by Families USA, a far-left advocacy organization that lobbied aggressively for ObamaCare, a source at HHS told Breitbart News. Filipic has said she expects. Enroll America to spend $100 million on the enrollment effort. A large percentage of this is likely to come from federal funds.

Filed Under: Affordable Care Act, Health Care Reform, Health Insurance Tagged With: Affordable Care Act, individual mandate

Affordable Care Act—Whose train wreck is it anyway?

May 9, 2013 by Frank West

Whose train wreck is it anyway? Opinion By Kathryn Mayer May 1, 2013 •

By now, I’m sure you’ve heard about top Democratic senator Max Baucus predicting a “train wreck” coming for PPACA. In a budget hearing nearly two weeks ago, Baucus expressed his concern that the exchanges for consumers and small businesses wouldn’t open on time in every state. He also said the “administration’s public information campaign on the benefits of the Affordable Care Act deserves a failing grade.”

People worried about Obamacare’s implementation? Not a big surprise. But a key author of the health legislation screaming about it in a budget meeting? Not great for morale.

Recently, both HHS Secretary Kathleen Sebelius and President Obama admitted some flaws in the whole thing — Sebelius admitted the law would cause higher premiums for some, while Obama just this week said there will be “glitches and bumps” in the rollout of his health care law.

This isn’t news, but just how much higher premiums will be and just how bumpy this ride will end up — those are the questions.

One thing’s for sure: the law is losing steam. Public opinion is no longer on Obama’s side: The latest Kaiser Family Foundation poll found that a majority of Americans have a negative perception of the law. In the latest tracking poll, 40 percent said they have an unfavorable view of the law, compared with 35 percent who have a favorable view.

Oh, but here’s the worst (I mean scariest) part about all of it: Consumers still don’t get it. Like, they really, really don’t get it.

A staggering number of Americans — 42 percent — apparently didn’t realize that the Supreme Court held a huge case on the constitutionality of the law — and voted to keep it. Four in 10 Americans are unaware that the PPACA is still law and is being implemented. Among them, 12 percent believe the law has been repealed by Congress, 7 percent believe it’s been overturned by the Supreme Court and 23 percent say they don’t know enough to say what the status of the law is.

There’s not much else to say besides that’s not OK.

It makes me ask: whose train wreck is this, really? Is it the fault of the administration who passed and praised and pressed this law, but haven’t been able to successfully control its implementation? Is it Republicans who are too prideful for this to work, doing everything they can to prevent the success of the law?

Or is the trainwreck due to the ignorance of Americans, who apparently really need to pick up a newspaper or put on C-SPAN for a few minutes?

It’s a little bit of everyone. But without being embraced by each of these groups, the PPACA won’t just be off to an imperfect beginning; it will be a hot failure.

Filed Under: Affordable Care Act, Health Care Reform, Health Insurance Tagged With: Affordable Care Act, Health Care Reform

Quick Links