Affordable Care Act Hits Another “Glitch,” Mid-Term Elections.

July 10, 2013 by

Affordable Care Act Hits Another “Glitch,” Mid-Term Elections

July 8, 2013

Actions speak louder than words. The Obama administration knows the health care law is a train wreck.

WASHINGTON, July 3, 2013 /PRNewswire/ — Tuesday the Obama administration has announced it would give employers until 2015 to provide insurance to employees.  Officially, the administration made its decision for two reasons: 1) to give themselves time to ease up on the rigorous reporting standards that will be required of employers; and 2) to give employers an extra year to comply, since the employer mandate is based on the reporting standards.

FreedomWorks President Matt Kibbe responded with the following statement:

“Concerns about paperwork seem a weak excuse for a full year’s delay, especially since the employer mandate was not set to go into effect until next year.  The administration’s sudden concern for businesses is clearly an attempt to assuage hard feelings about the Affordable Care Act as the 2014 elections draw near, and to avoid the potential political fallout of significant layoffs and hour reductions at companies looking to avoid the extra costs of mandatory coverage.  Requiring all mid-size and large employers to cover all their full-time employees is a disaster, both for businesses and for workers. The cost burden to employers will result in hours cut and jobs lost, as companies scrounge to make ends meet.

“Actions speak louder than words. The Obama administration knows the health care law is a train wreck. They rammed it through in 2010 claiming it was urgently needed – so urgent, in fact, that they had ‘to pass the bill so [we] can find out what’s in it,’ as one representative infamously declared. Now, three years later, it still isn’t “ready.

“Obamacare is an unwieldy, unwise and un-American piece of legislation. It places undue burdens on employers and threatens countless jobs. Worse, it threatens the freedoms we hold dear as Americans.”

 

SOURCE FreedomWorks

Filed Under: Affordable Care Act Tagged With: , ,

Administration quietly announces another PPACA delay.

July 9, 2013 by

For a year, consumers will be on the honor system for subsidies under the Patient Protection and Affordable Care Act.

That’s what the Obama administration quietly announced Friday, days after unexpectedly announcing they would delay the employer mandate penalty for another year.

In a new 606-page rule published Friday, the administration said they would significantly scale back on the law’s requirements that the new exchanges verify consumers’ income and health insurance status until 2015, when stronger verification systems are in place.

In the meantime, the government will rely on consumers’ self-reported information.

Health insurance exchanges set up under PPACA are set to begin open enrollment Oct. 1. Enrollees with incomes ranging from 100 percent to 400 percent of the federal poverty line are eligible to receive tax subsidies to help them buy insurance. They also must not have access to insurance through their employer to qualify.

“The exchange may accept the applicant’s attestation regarding enrollment in eligible employer-sponsored plan . . . without further verification,” according to the final rule.

The administration has said they would conduct random checks to verify whether new applicants receive employer-sponsored insurance benefits, while also verifying income status.

But the new regulations from the Department of Health and Human Services said the 17 state-based exchanges would have until 2015 to do random checks, citing “legislative and operational barriers.”

In all 50 states, though, the federal government will scale back oversight of what applicants say they earn.

That move, some critics say, could lead some consumers to under report their income in order to qualify for federal tax subsidies, at least in states that are not expanding Medicaid coverage.

In the same rule, the government said it would give states until 2015 to roll out electronic notices because “states are at different places in the development of their eligibility and enrollment systems,” HHS said.

The rule is the latest setback in the health care overhaul law.

Last week, the administration announced it would not require employers with 50 workers or more to provide insurance benefits until 2015, a move business groups applauded but Republicans slammed as confirmation that “Obamacare costs too much and it isn’t working the way the administration promised.”

The administration has said the exchanges and other parts of the law are on target, and they are making delays and changes to better suit the public and employers.

Troy Underwood, CEO of Benefits Connect in Rancho Cordova, Calif. said, though, that he expects to see more PPACA delays and missed deadlines as the months go by.

“Platitudes, political favors and hope never replace a solid and realistic plan,” Underwood said. “As an expert in the processing and administration of employee benefits I can tell you the government’s efforts, even if well-intentioned, are grossly inefficient.

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

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

July 9, 2013 by
 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: , , ,

Patient Protection and Affordable Care Act (PPACA) Trainwreck.

July 3, 2013 by

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: ,

Can a state force business onto an health exchange?

July 3, 2013 by

 

Can a state force business onto an health insurance exchange?

        Rep. Darrell Issa, R-Calif. (File photo)                   Rep. Darrell Issa, R-Calif. (File photo)

Republicans are asking whether officials in Vermont and the District of Columbia really have the authority to force some or all health insurance business onto the new Patient Protection and Affordable Care Act (PPACA) exchanges.

Rep. Darrell Issa, R-Calif., and other leaders of the House Oversight and Government Reform have sent a letter asking about local officials’ ability to shut down non-exchange markets to U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius.

The lawmakers also have sent similar letters asking about the matter to officials in Vermont and the District of Columbia.

D.C. officials are trying to get all individuals to buy coverage through its district-based exchange, and for all small groups to get their coverage through the exchange by 2015. Health insurance agents and brokers could still sell the coverage but would have to work with the exchange.

Vermont is trying to move its individual and small-group markets onto the Vermont exchange.

The D.C. proposal and the Vermont proposal are “inconsistent with principles of consumer choice and competition,” Issa and colleagues wrote in the letters.

State or D.C. efforts to eliminate non-exchange markets conflict with PPACA, which states that nothing in PPACA is supposed to keep companies from selling coverage outside an exchange or to keep individuals from buying coverage outside an exchange, the lawmakers said.

The D.C. and Vermont efforts to shut down non-exchange markets “violate the principle of voluntary participation in exchanges that was codified in PPACA and reaffirmed in your guidance when you wrote that ‘participation in a [small business exchange] is strictly voluntary for small employers,” the lawmakers told Sebelius.

D.C. officials have argued that they need to unify their individual and small-group markets on the district’s exchange because the district is too small to have successful, separate exchange and non-exchange markets.

In Vermont, state officials told the Associated Press that they believe PPACA gives states broad authority over regulation of any non-exchange health insurance markets under their jurisdiction and clearly gives states the authority to impose rules that are more strict than the rules imposed by PPACA.

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

White House delays employer mandate requirement until 2015.

July 3, 2013 by

White House delays employer mandate requirement until 2015

By Sarah Kliff, Updated:

The Obama administration will not penalize businesses that do not provide health insurance in 2014, the Treasury Department announced Tuesday.

Instead, it will delay enforcement of a major Affordable Care Act requirement that all employers with more than 50 employees provide coverage to their workers until 2015.

(Photo by Jessica Rinaldi/Reuters)

(Photo by Jessica Rinaldi/Reuters)

The administration said it would postpone the provision after hearing significant concerns from employers about the challenges of implementing it.

“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Mark Mazur, Assistant Secretary for Tax Policy, wrote in a late Tuesday blog post. “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”

The Affordable Care Act requires all employers with more than 50 full-time workers provide health insurance or pay steep fines. That policy had raised concerns about companies downsizing their workforce or cutting workers’ hours in order to dodge the new mandate.

In delaying the enforcement of that rule, the White House sidesteps those challenges for one year. It is also the second significant interruption for the Affordable Care Act, following a one-year delay on key functions of the small business insurance marketplaces.

Together, the moves could draw criticism that the administration will not be able to put into effect its signature legislative accomplishment on schedule.

 

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

Will Small Firms Self-Insure After Jan. 1, 2014?

June 27, 2013 by

Starting Jan. 1, 2014, the Affordable Care Act (ACA) will bring about significant changes in the regulatory landscape for small firms offering health insurance to their employees.

Regulations affecting small firms include “guaranteed issue” and “guaranteed renewal” which require health insurers to offer and renew plans to all enrollees, regardless of health status. Additionally, three-to-one age rate banding will require that the premium paid by the oldest adult enrollee in a health plan will not exceed the premium paid by the youngest adult enrollee by more than a factor of three for the same set of benefits. Such regulations could have the effect of raising premiums for firms with young and healthy workers.

The ACA’s small group regulations will apply to firms with 100 or fewer workers. The impact of ACA’s regulations could be particularly strong for firms with 51 to 100 workers, because health plans available to firms with 50 or fewer workers are already subject to significant regulation, including guaranteed issue requirements, under federal and state law.

Because of the ACA’s regulations, some smaller employers with young and healthy workers are considering avoiding the purchase of health care coverage in the regulated market, opting instead to self-insure their employees. Firms that self-insure pay directly for employees’ health care expenses, and assume the financial risk associated with unpredictable health costs incurred by employees and their family members.

Historically, concerns about these financial risks have dissuaded most small firms from self-insuring. According to the most recent Kaiser Family Foundation Survey, only 15 percent of insured workers at firms with fewer than 200 employees are enrolled in self-insured plans, compared to 81 percent of insured workers at larger firms. However, if their premiums increase due to regulations, small employers may find self-insurance more attractive. This will have broader consequences. If small firms with young and healthy workers self-insure, premiums could increase for firms remaining on the regulated market.

RAND has developed the COMPARE computer micro-simulation model, which uses what is known about the health care system to estimate what will happen as a result of changes such as those prescribed under the ACA. Recent RAND work provides estimates of the proportion of small firms that will self-insure after implementation of the ACA. These simulations suggest that a critical factor affecting self-insurance decisions will be the pricing and availability of stop-loss coverage, a type of reinsurance for self-insured firms.

One common type of stop-loss policy reimburses the self-insured firm if an enrollee’s health care claims exceed a specific dollar value, called the attachment point. An attachment point of $10,000 per enrollee is considered generous. COMPARE predicts that a large proportion of small firms will self-insure only if generous stop-loss coverage becomes widely available, at an affordable price.

Moreover, COMPARE predicts that such increases in self-insurance would occur even if the ACA were not implemented, as long as affordable and comprehensive stop-loss coverage is available. Therefore, we estimate that any increase in self-insurance would be due to the availability of generous stop-loss coverage, not to a strong interest in avoiding ACA regulations.

Will small firms self-insure? The answer will largely depend on actions taken by stakeholders other than small employers, namely, companies selling stop-loss coverage, and the government. There are already many signs that insurers are trying to lure small firms into self-insuring by advertising low stop-loss attachment points. This inducement to self-insurance could be counterbalanced by government action, in order to maintain a balance of healthy and less healthy employees across the marketplace (including the exchanges, the regulated market outside the exchanges, and the self-insured market).

Currently only a handful of states impose limits on how low attachment points can be set. What should the government do to maintain balance among the different segments of the small business health insurance market? One option is to mandate limits on stop-loss attachment points so as to discourage small firms from self-insuring. However, this option could have the drawback that consumers in self-insured plans would have less financial protection in the event that their firms self-insure.

This commentary appeared on The RAND Blog on June 17, 2013.

Filed Under: Affordable Care Act, Group Health Benefits, Group Health Insurance, Health Insurance Tagged With: , , , ,

15 PPACA provisions that will take effect in 2014.

June 27, 2013 by
  

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: , ,

Tackling the New Health-Care Rules.

June 21, 2013 by

 

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: ,
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