Affordable Care Act

7 things to know about health insurance post ACA.

September 30, 2016 by Frank West

http://www.beckersasc.com/asc-coding-billing-and-collections/7-things-to-know-about-health-insurance-post-aca.html

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

Two more Obamacare health insurance plans collapse.

October 17, 2015 by Frank West

https://www.washingtonpost.com/national/health-science/two-more-obamacare-health-insurance-plans-collapse/2015/10/16/cc324fd0-7449-11e5-8d93-0af317ed58c9_story.html

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

Tardy tax filers at risk of losing health insurance subsidies.

August 25, 2015 by Frank West

http://www.jsonline.com/business/tardy-tax-filers-at-risk-of-losing-health-insurance-subsidies-b99563280z1-322743301.html

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

5 Reasons Your Health Insurance Premium Will Likely Rise in 2016.

June 1, 2015 by Frank West

If you don’t want to pay more for health insurance, look away now! Here are five reasons why you should be prepared to pay more per month for your health insurance plan in 2016. The Motely Fool Sean Williams May 25, 2015

Cdc Fb
Source: Centers for Disease Control and Prevention via Facebook

It’s been a little over a year since the Patient Protection and Affordable Care Act was officially implemented and U.S. citizens were required to purchase health insurance or face a penalty come tax time.

Obamacare’s two main goals
The goals of this healthcare reform law, which you probably know better as Obamacare, are twofold. First, it’s designed to encourage people to enroll for health insurance and lower the number of uninsured people in the United States. Uninsured people are a strain on the healthcare system, from hospitals to insurers, so getting more people involved helps spread the cost of medical care across a greater percentage of the population. That leads to the second point: controlling medical cost inflation. Obamacare is designed to help increase competition among insurers by making the process of shopping for health insurance more transparent.

Through two full enrollment periods Obamacare appears to be decisively taking care of the first point. Nearly 12 million people enrolled through a state-run exchange or Healthcare.gov for the 2015 calendar year, well ahead of tempered Department of Health and Human Services estimates of 9.1 million by year’s end. Even with some expected attrition throughout the year from non-payees, Obamacare will have notably lowered the uninsured rate in the U.S.

The second point, though, leaves much to be desired still. Although healthcare premiums have been rising at a slower rate over the past five years than at any time over the previous five decades, this has more to do with pricing pressure caused by the Great Recession than Obamacare making the health insurance process more transparent.

Five reasons your health insurance premium may be on the rise
In actuality, it looks as if health insurance premiums could potentially be in for a healthy price hike in 2016. Here are five reasons why.

1. Targeted therapies are pressuring insurers
To begin with, a new trend in targeted therapies, known also as personalized medicine, is hurting insurers. Instead of focusing on one-size-fits-all therapies for chronic diseases, biopharmaceutical companies are aiming their research and development dollars at rare diseases and/or lesser-common diseases that have specific genetic markers.

Source: Bristol-Myers Squibb

There are two reasons drug developers have recently seized the opportunity to focus on targeted therapies. First, there’s little competition among rare diseases and gene-targeted therapies. Secondly, it allows these drug developers to set astronomical price tags on these drugs in order to ensure they recoup their development costs — and not just for the approved drug, but for other clinical and preclinical therapies that didn’t make the grade.

For example, recently approved PD-1 checkpoint inhibitors Opdivo from Bristol-Myers Squibb and Keytruda from Merck both work to enhance the immune systems’ ability to recognize and attack cancer cells, which often go undetected. However, both drugs come with an annual wholesale cost of $143,000 and $150,000, respectively. Admittedly, insurers are possibly getting some discount from these levels, but it’s still difficult for insurers to support paying these targeted therapy costs profitably, so they may choose to boost premium pricing across the board.

2. The individual mandate penalty isn’t encouraging enough people to enroll
The primary purpose of the individual mandate, the actionable component of the PPACA, is to encourage healthy young adults (whose premium payments are direly needed for Obamacare to work) to enroll. Having these individuals sitting on the sidelines, especially when they’re less likely to go to the doctor anyway, isn’t helping insurers spread their medical costs around.

Source: Flickr user Reynemedia.

The individual mandate institutes a penalty on U.S. citizens come tax time if they were without health insurance for more than three months during a calendar year. In 2014, this penalty was the greater of $95 or 1% of a taxpayer’s modified-adjusted gross income. In 2015, the penalty soared to the greater of $325 or 2% of modified-AGI.

However, based on data from H&R Block, the median penalty during 2014 for those without insurance was just $178. This works out to less than one month’s payment if an individual had purchased the lowest level of insurance on an Obamacare exchange, known as a bronze plan. In other words, unless the penalty for not having insurance approaches the cost of purchasing insurance for the full year, it’s cheaper for non-purchasers to continue to simply pay the penalty.

Not to mention, the IRS’ hands are tied when it comes to penalty collection. The IRS can’t garnish wages or seize property, thus its only means to get you to pay is to take money out of your refund if you’re owed one, or to ask nicely.

3. Risk corridor funding gaps are hurting insurers
According to a recent report from Standard & Poor’s, and as reported by FierceHealthPayer, the risk corridor payments designed to protect insurers who simply aren’t doing as well as others may wind up hurting rather than helping insurers.

Source: Centers for Disease Control and Prevention via Facebook

The risk corridor is a program put in place to collect funds from some of Obamacare’s best-performing insurers and funnel it to insurers who are losing significant amounts of money on enrollments. If you’re wondering how an insurer can lose money after more than 11 million people enrolled over the past two enrollment periods, it pretty much comes down to the makeup of their new members. Too many sick enrollees and the scales tips toward higher medical costs and losses for the insurer. With a new state-level adjustment risk added last year by the Department of Health and Human Services, the risk corridors budget is now neutral, and many insurers who are due payments from the program aren’t collecting or getting paid.

More than half of insurers included in S&P’s report neither made a payment to the risk corridor program nor received one. Some insurers didn’t even post receivable payments on their financial statements because they frankly don’t expect to be able to collect money from the program.

It’s believed that struggling insurers that aren’t receiving these payments, especially smaller insurers, could be forced to propose hefty premium increases just to make up the difference.

4. Insurers still maintain some degree of pricing power
Fourth, it’s important to realize that despite becoming part of a transparent marketplace exchange, insurers still maintain some degree of power when it comes to setting the pricing of their plans.

Source: Centers for Disease Control and Prevention via Facebook

Prior to Obamacare, the checks and balances on premium increases simply weren’t there. It wasn’t uncommon for insurers to hit consumers with a double-digit percentage increase in their health insurance premium rates within a state or region if its costs were higher than expected.

Under Obamacare, insurers are required to submit their premium rate proposals to their states’ Office of the Insurance Commissioner for review. From there some “bargaining” between both sides ensues and a rate is often set that’s between what the Office of the Insurance Commissioner would like, and what the insurer would prefer.

But, insurers still control what states they operate in, thus they maintain the upper hand on overall insurance plan “supply.” In states where there is little competition among insurers, it’s not out of the question that insurers could propose hefty increases, even with the new Obamacare checks and balances in place. While insurers may have given up some of their power when transitioning to Obamacare, they are far from helpless. Expect them to use their clout to help health insurance rates move higher in 2016.

5. Inflation is taking its toll
Finally, don’t forget that inflation plays a role too. Regardless of targeted therapies increasing insurers’ medical costs, the average cost of most healthcare goods is on the rise — be it expensive diagnostic services or the needles used in IVs.

Generally speaking, as long as the Consumer Price Index, one of the more common gauges of inflation, is rising, there’s a good chance that health insurance premiums will need to rise as well, at least to match inflation. If there’s one piece of solace that readers can take here, it’s that overall inflation levels have been pacing well below their historic average since the Great Recession.

Keep your eyes peeled
Consumers will also want to keep their eyes peeled for the upcoming King vs. Burwell ruling from the Supreme Court next month, which could have a definitive effect on premium pricing in 2016. Obviously we’ll have to watch and wait to see whether prices do indeed rise in 2016 — insurers just submitted their 2016 pricing this past week — but my personal belief is we can expect a noticeable uptick in health insurance premiums in 2016, so prepare accordingly.

The Motley Fool Sean Williams May 25, 2015

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

Of Obamacare’s Many Taxes, What Hurts Most.

May 20, 2015 by Frank West

At tax time, more of us are looking anew at the Affordable Care Act. Some of us are doing so as we hunch over our tax returns. Yet many of the panoply of taxes added by Obamacare are not open and obvious. They are more like those Lois Lerner emails, or Hillary Clinton’s for that matter. In fact, there could be a new competition for what is Obamacare’s most unfair tax. As one editorial noted, some say it is the 2.3% excise tax on medical devices, increasing their cost, hurting the industry, and designed purely to collect revenue.

Another pure revenue raiser is the 3.8% net investment income tax. Depending on your income, it adds a 3.8% tax on top of your interest, dividends and capital gains. While this one may be politically safe since it purports to target only upper income people, it is hard to explain this to someone with a modest income who sells their lifelong property and ends up with an extra 3.8% tax on top of their capital gain tax. Such a person might be in that upper income category just once year.

There are many Obamacare taxes, so many, in fact, that can even be debated how many there are. In terms of tax filings this year, Obamacare is creating a tax filing backlash. Yet most of the approximately 85% of Americans who have health insurance and who make less than $250,000 a year can relax. Most of the new taxes are unlikely to hurt you or impact your pocketbook. Even so, it’s easy to be overwhelmed, which is one reason the IRS has a 21-page Publication 5187 on the Health Care Law: What’s New for Individuals and Families.

If reading about the now-not-so-new-law triggers a need for an entertainment break, there’s always President Obama’s Buzzfeed video. Or you can review three new tax forms: the 1095-A Health Insurance Marketplace Statement, the Form 8962 Premium Tax Credit, and Form 8965 Health Coverage Exemptions. Forms 1095-A and 8962 are for people who bought health coverage through the Marketplace. Form 8965 is for those who got a Marketplace coverage exemption or plan to claim an exemption.

For ranking Obamacare’s taxes, you must first list them. That is no mean feat, since some of it depends how you count and what you regard as a tax:

2.3% Tax on medical device manufacturers (this doesn’t hit you directly, but indirectly it sure can).
3.8% Net investment income tax. This one is a big one. Depending on your income, it adds a 3.8% tax on top of your interest, dividends and capital gains.
Employer mandate on business with over 50 full-time equivalent employees to provide health insurance to full-time employees. $2,000 per employee $3,000 if employee uses tax credits to buy insurance on the exchange.
40% Excise tax on high-end (Cadillac) health insurance plans (40% excise tax on the portion of employer-sponsored health coverage that exceeds $10,200 a year and $27,500 for families).
Medical deduction threshold tax increase (threshold to deduct medical expenses as an itemized deduction increases to 10% from 7.5%).
Individual mandate (a tax for not purchasing insurance, though the tax penalty is called a Shared Responsibility Payment, the greater of 1% of your income above the filing threshold of $10,150 for singles and $20,300 for married couples filing jointly or $95 per adult ($47.50 per child), with a maximum of $285 for a family, whichever is higher. It goes up in 2015.
Excise tax on charitable hospitals which fail to comply with the requirements of Obamacare.
Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D.
Medicare Part A tax increase of .9% over $200k/$250k.
An annual $63 fee levied by Obamacare on all plans (decreased each year until 2017 when pre-existing conditions are eliminated) to help pay for insurance companies covering the costs of high-risk pools.
Medicine cabinet tax (over the counter medicines no longer qualify as medical expenses for flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), health savings accounts (HSAs), and Archer medical saving accounts (MSAs).
Additional tax on HSA/MSA distributions.
HSAs or Archer MSAs, penalties for non-qualified medical expenses of 10% to 20% in the case of an HSA and from 15% to 20% for an MSA.

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

Obamacare is About to Bankrupt a Whole Bunch of Small Businesses.

April 8, 2015 by Frank West

The crushing costs of compliance with the regulatory burdens of Obamacare have already been well documented, especially as they pertain to small businesses. But as small businesses prepare their corporate tax returns next year, many accountants are warning that, based on Department of Labor guidelines issued after the election, countless small businesses are about to be hit with a huge tax penalty that they simply cannot afford.

The issue here is somewhat complex, and is exactly the sort of issue that most small business owners trust to professionals to handle for them. When these businesses were notified that the health plans they offered their employees were not compliant with Obamacare, many of them sought to avoid dumping their employees on the exchanges. At the time, insurance vendors, based on a colorable reading of the law, encouraged many small businesses to work with them to either provide so-called section 105 plans where the employer would reimburse a broker for the cost of coverage bought by the employees, or to encourage their employees to buy their health insurance directly from brokers and to reimburse them for the purchase of this healthcare coverage. All year long, the Department of Labor allowed this practice to continue, only to declare at the 11th hour that this arrangement would be treated as noncompliant with Obamacare and thus subject employers to a penalty. The reasons for this decision are obvious and disgustingly political: the Obama administration wants to boast of larger numbers of people enrolled in the exchanges for political reasons:

This answer is very clear that ANY reimbursement of health insurance payments by an employer for an employee is subject to the ACA rules and therefore are subject to possible penalties under Section 4980D of the Code. These penalties can be substantial (up to $100 per day per employee). Therefore, it is extremely important to make sure that any payment of premiums for employees is as a direct result of payments withheld from an employee’s paycheck and then directly transmitted to the health insurance provider. Any gross of up wages directly related to payment of premiums may be problematic.

Additionally based on this Q & A, it is probably better for the employer not to pay any health insurance premiums (unless a qualified group plan or for only one employee employers). It appears that the DOL and the Administration is pushing all non-qualified premiums onto the exchange and those premiums are usually paid directly by the employee (and may not be reimbursed). This will increase the number of persons covered by the exchange which is the primary goal of the administration (this last part is strictly my opinion).

If you can do basic math, you can probably figure out that many small businesses are about to get hit with a penalty of $36,500 per employee through no fault of their own. If you have any familiarity with small businesses, you know that the overwhelming majority of them are simply not going to be able to pay an unforeseen penalty of $36,500 per employee and are going to be forced to simply shut their doors. As a result, who knows how many employees are about to have no health coverage at all or be forced onto the subsidies (provided that they aren’t eliminated in most states via King v. Burwell). It’s yet another example of the twisted incentive created by Obamacare where the government would actually prefer that taxpayers be on the hook for these people’s health insurance than their own employer, just because they oppose the specific payment mechanism for political reasons.

And the saddest thing of all is that many small businesses are going to get caught in the crossfire of this political fight and snuffed out. The monstrosity that is Obamacare must be repealed, and fast, no matter the political cost, or the damage it wreaks on our economy might well be permanent.

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

Small Businesses and the Affordable Care Act at Five Years.

April 8, 2015 by Frank West

Small businesses were promised lower costs and more choices once the Affordable Care Act (Obamacare) was implemented. Five years after being signed into law, small businesses have not seen many of the benefits they were promised.

Higher Insurance Costs
Very little has changed for small businesses and the self-employed when it comes to costs. They keep going up. Yes, there are exceptions here and there, but for the most part, the promise of lower costs has been an empty one for small businesses.

According to a National Small Business Association survey in 2014, “91 percent of small businesses reported increases in their health plan at their most recent renewal while 96 percent reported increased health insurance costs over the past five years. The majority expect to continue seeing cost increases in the coming year.” Indeed, that has been the case for 2015.

You can’t load up health insurance plans and the health care system with mandates, regulations and taxes (like Obamacare does) and expect lower costs. Let’s make this clear: The law has not produced lower costs. President Obama promised a $2,500 decrease in insurance costs per family. This did not happen.

Choice and Access Have Not Improved
The performance and effectiveness of the health insurance exchanges for small businesses have been underwhelming, to say the least. In most states, the exchanges have been a sad and wasteful disaster. “One year in, the new small-business insurance marketplaces born out of the new federal health-care law have fallen short of their promise in nearly every state, both in terms of functionality and enrollment,” reads an October 2014 Washington Post article.

For 2015, small businesses have been promised bigger and better. The federal Small-Employer Health Option Program (SHOP) was delayed until this year and is now open. One of the original selling points was the offering of many plan choices that the employees of small businesses could select from. This feature will not be available nationwide until 2016, but some state exchanges do provide this option (albeit with limited choices). Exchange website “glitches” and lack of insurer participation have slowed SHOP down, and it remains a question mark as to whether small businesses will actually use the government exchanges. It’s a question mark as to whether more insurance companies will actually want to participate on the SHOP exchanges, thus undermining their whole purpose.

Obamacare stripped existing health care plans from many small businesses and the self-employed – most have not been (or will not be) able to keep the health care plans they liked. We knew this was going to happen, despite promises stating otherwise. Obamacare is upending Health Reimbursement Accounts (HRAs) as well, which are used by many small businesses. While the federal government announced it would delay the imposition of financial penalties on companies that use HRAs until July of this year, stripping this choice from small employers is going to hurt.

The bottom line is that small businesses and the self-employed are losing, not gaining, health insurance choices under Obamacare.

Obamacare controls the market; therefore health insurance choices are limited by government’s control, and dictates on plans. Obamacare has eliminated many preferred and affordable choices. The government exchanges are not real markets. These markets are not appealing for most small businesses, or insurers. That is probably why the federal government (HHS) will not fully release the data on the number of small businesses that are using the exchanges (despite repeated requests by former House Small Business Committee Chairman Sam Graves in 2014, and those shortly following the launch of the new HealthCare.gov.) The total numbers would be embarrassing, but we know the truth. Small business participation is abysmal.

Small Business Tax Credit a Dud
During debate on Obamacare, most members of the small business community did not see how the plan would lower costs or improve access. So the White House kept talking up the benefits of the health care exchanges (see how that worked out above?) combined with the small business tax credit. Unfortunately, and as predicted, the tax credit remains a big dud.

The tax credit is so measly and complex that only a tiny fraction of the small business sector qualifies for it, or dares to sift through the morass. To make matters worse, the tax credit is only temporary. As noted by the Government Accountability Office last year, “the credit may be too small and administratively complex to motivate many employers to enroll.” Indeed, another reason why small business participation in the health exchanges is so low.

The credit needs to be much more robust to minimally harmonize with the high cost of Obamacare and the reality of small business pay scales. Moreover, simplification, permanency and allowing more small business employees to qualify, could yield a higher adoption rate.

New Burdens, Uncertainty and Complexity
Remember when President Obama boldly claimed that buying health insurance on the exchanges would be easy peasy – as simple as purchasing something on Amazon.com? Well, it did not turn out that way. There was the dreadful launch of HealthCare.gov, but bad websites are only one aspect of Obamacare’s false starts, complexity, confusion, and the burdens impacting small businesses.

Obamacare’s incessant changes and delays have been confusing for many small businesses. According to the Galen Institute, “more than 49 significant changes already have been made to the Patient Protection and Affordable Care Act: at least 30 that President Obama has made unilaterally, 17 that Congress has passed and the president has signed, and 2 by the Supreme Court.”

Obamacare’s administrative and compliance burdens are not insignificant either. They are imposing hefty costs on top of general frustration for small businesses. In February, we also learned the Department of Health and Human Services (HHS) sent faulty tax information to 800,000 taxpayers – presumably many of these are small businesses and the self-employed. (House Small Business Chairman Steve Chabot has multiple requests into HHS about the incident.) Moreover, the complexity of Obamacare’s employer mandate (where, for example, a 30-hour work week is considered full time) and its sheer costs have forced small businesses to cut hours, wages and jobs.

The Struggle Continues for Small Businesses
From the small business perspective, Obamacare has exacerbated their 20-plus year struggle with health insurance – costs are too high and keep increasing, innovative choices are lacking, and buying coverage and administering health insurance is a burdensome hassle.

Obamacare supporters point to those getting insurance (though not all are newly insured) as the key measure of its success. Yet, those meager achievements could have easily been reached without disrupting the lives and health plans of millions of people, and without spending $1.7 trillion of taxpayer dollars, including the wasted billions on bad exchanges, consultants, technology and who knows what else

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

Employers cutting worker hours to avoid PPACA.

March 24, 2015 by Frank West

About one in five U.S. employers either have reduced hours for workers they consider to be part-time, or will do so, in response to requirements of the Patient Protection and Affordable Care Act. That’s what a survey of some 740 human resources professionals conducted by the Society for Human Resource Management found.

The vast majority — nearly three-quarters — of respondents haven’t altered schedules to avoid providing health insurance for part-timers working 30 or more hours a week on average. But 14 percent have, and another 6 percent told SHRM they intend to.

It’s still a significant number as some previous studies have found that most large employers will not circumvent coverage extension by reducing full-time workers’ hours. SHRM’s survey results come as PPACA marks its 5th anniversary this week.

PPACA mandates large employers offer health care coverage to employees working 30 hours or more per week or face a penalty.

When it comes to trying to reduce full-time worker hours or reducing the number of full-time employees to duck under the requirement, SHRM reported that only about 10 percent have considered going down that road.

“As organizations learned more about the law, they found that their coverage levels were already the same or more than what the law required, minimizing the adjustments that some anticipated employers would need to make when the ACA was created,” said Evren Esen, director of SHRM’s survey programs.

Among other outcomes:

54 percent of employers require employees to work 30 hours a week to be eligible for coverage, an increase from 44 percent in 2014 and 39 percent in 2013. Another 26 percent require employees to work more than 30 hours a week to be eligible.
66 percent said their organization offered the same level of health care benefits as before PPACA was enacted.
77 percent said that their health care coverage costs increased from 2014 to 2015, and 6 percent saw a decrease.

Filed Under: Affordable Care Act, Health Insurance, Health Insurance Exchange, insurance broker Tagged With: Affordable Care Act, independent insurance agent

Open enrollment: Tips for selecting health insurance.

October 7, 2014 by Frank West

Open enrollment is the time each fall when most Americans select or change their health benefits for the following year.

Choosing health-care coverage is one of the most important decisions people make. Therefore, it’s essential that consumers fully understand their options during open enrollment so they can choose a plan that will help them enhance their health and possibly save money.

Even with health insurance coverage now available in many states through government exchanges, the vast majority of Americans, nearly 158 million, will continue to obtain health benefits through their employer. Many companies set aside a two-week period between October and December for when their employees can select health benefits, so now is the time to start getting prepared.

Here are three important tips for a successful open-enrollment season:

• Tip 1. Review your options. It may sound simple, but taking the time to review your options is very important. Ask questions. In many cases, people who review their health plan options may find ways to save money on their health-care costs — whether it’s through selecting a plan that will cover more of their expected health costs for a major event (such as having a baby or surgery), evaluating prescription drug coverage, or having the opportunity to enroll in an incentive-based wellness program.

Some insurers offer wellness programs or incentive programs that may help you lower your cholesterol, quit smoking or lose weight. These incentives may include gym membership discounts, lower premium costs or merchant gift cards.

• Tip 2. Make sure your doctor is in-network — it can usually save you money on out-of-pocket costs. Even if you don’t plan to make any changes to your health insurance this year, it’s always good to ensure that any doctor you see, or plan to visit in the coming year, is in your plan’s care provider network.

Many insurers offer a broad choice of local in-network health-care professionals, and these in-network care providers agree in advance to what they’ll charge for specific procedures. You should also call before your procedure to verify the care providers are in-network. If you plan to visit a doctor or hospital outside the network, be sure to understand how your costs will differ from those of an in-network care provider.

• Tip 3. Don’t forget about specialty benefits. Specialty benefits like dental and vision plans are often available at a minimal cost and cover annual teeth cleanings and eye exams. Many vision plans also offer reduced pricing on frames and lenses. Research suggests that there is a connection between oral health and overall health, so adding a dental plan may help prevent more serious medical problems.

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

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