Author Archive | John Barrett

Health care law deadline updated

You’ll have to get health coverage by Valentine’s Day or thereabouts to avoid penalties for being uninsured, the Obama administration confirmed Wednesday. That is about six weeks earlier than a March 31 deadline often cited previously.

  • The explanation: Health insurance coverage typically starts on the first day of a given month, and it takes up to 15 days to process applications. You still have to be covered by March 31 to avoid the new penalties for remaining uninsured. But to successfully accomplish that you have to send in your application by the middle of February. Coverage would then start Mar. 1.
  •  The Jackson Hewitt tax preparation company first pointed out the wrinkle with the health care law’s least popular requirement. An administration official confirmed it. The official was not authorized to speak publicly and insisted on anonymity.
  • It’s the latest bit of confusion involving complex requirements of President Obama’s health care law, known as the Affordable Care Act. Adjustments to the law have ranged from the momentous to the mundane. The biggest one was a one-year delay of a requirement that larger employers offer coverage, announced this summer. More recently, the administration has postponed some Spanish-language capabilities of its enrollment website, as well as full functionality on the site small businesses use to sign up.
  • Brian Haile, senior vice president for health policy at Jackson Hewitt, said government agencies initially had different interpretations of the enrollment deadline. The Health and Human Services department, which is taking the lead in implementing the law, kept referring to a March 31 deadline. The Internal Revenue Service, which handles the financial aspects, suggested that the deadline had to be in February.
  • ‘‘There were inconsistencies,’’ said Haile, adding it took several inquiries by Jackson Hewitt in the last few weeks to clear up the uncertainty. The health care law was designed to cover the uninsured through a mix of government-subsidized private insurance and a major expansion of the Medicaid safety net program.

The rollout of online insurance markets this month has been snarled by technical glitches that frustrated many consumers. House Republicans are still pressing their demand for a delay of ‘‘Obamacare’’ provisions, if not its total repeal, as a condition for lifting the partial government shutdown now in its second week.

Starting next year, the law requires virtually all Americans to have insurance or face a tax penalty, triggered after a coverage gap of three months. The penalty starts as low as $95 for 2014, but escalates in subsequent years.

*Modified from a Boston Globe article.

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Study: Premiums for Young People to Rise in all 50 States

Health insurance premiums for young people will rise in all 50 states under Obamacare, with an average increase of 260 percent, according to a study released Thursday. Forty-four out of 50 states saw a three-digit percent increase.

  • According to a study released by the American Action Forum, post-Obamacare premiums will average $187.08 per month, up from $62 per month in 2013, a 202 percent increase.  Overall, states averaged an increase of 260 percent. The report, written by Sam Cappellanti, a health care policy analyst at the AAF, points to numerous policies within Obamacare as the reason for higher premiums, most importantly “guaranteed issue” and “community rating.”
  • The group analyzed plans for a 30 year-old male non-smoker as the model for the so-called “young invincible.”  After analyzing each bronze-tier plan for a 30-year-old single male, every state saw an increase.  Only those who earn up to 133 percent of the poverty line will have a financial incentive to join the health exchange.  An individual with an income of $15,281.70 would receive a subsidy to cover 100 percent of their health care premiums.
  • Moving up the income bracket creates disincentives for the young to enroll.  Those making $20,107.50, or 175 percent of the poverty line, will still face a $449 premium, which is three times higher than the penalty they would incur in 2014 ($103.57) if they did not purchase insurance. An individual earning $37,342.50 will receive no subsidy at all and will face a minimum premium of $2,839, as opposed to a $275.92 penalty in 2014.
  • “Premium subsidies will do little to defray increased rates for young people, while penalties for noncompliance appear paltry when compared to the costs associated with coverage,” the study said.
  • Guaranteed issue is the portion of the law that restricts health insurers from denying coverage on the basis of preexisting conditions.  The study notes that the policy forces insurers to pay more for high-risk individuals and enables others to apply for coverage after they get sick, making premiums go up for everyone else.
  • Community rating under Obamacare mandates that insurance companies charge the same premium to individuals regardless of health history and current health status.
  • “In a guaranteed issue and community rating system, healthy individuals are perversely incentivized to wait to enroll in coverage until there is a true need,” the study said. Other factors driving up premiums are the Health Insurance Tax (HIT) and fees insurance companies must pay in the exchange, which are likely to be passed onto the consumer.
  • The policies work together to create what Cappellanti calls a “death spiral,” making premiums jump “exponentially” in 2014. “In response to rising costs, young healthy enrollees opt out of coverage, seeing the investment as financially disadvantageous given their low medical costs,” the study said. “The insurance risk pool becomes disproportionately older and sicker, further increasing prices and driving insurers out until the system becomes unsustainable.”

*Modified from a Freebeacon.com article

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Exchange Conflicts Come Into Sharper Focus

The polarizing effects of the Affordable Care Act have become even sharper since the launch of public health insurance purchasing exchanges on Oct. 1.

Those effects were highlighted by a panel of experts convened by Employee Benefit News for a web seminar titled, “It’s Oct. 2, Now What? Catching Up on ACA Implementation.”

  • Some of the conflicts center around the search for evidence that public exchange rates present either a great bargain for individuals, or no savings at all. However, explorers have found wide rate variations not only from state to state, but within state. For example, a 35 year-old male nonsmoker from Massachusetts shopping for an entry-level Bronze Plan was found to have options ranging from $192.66 a month to $375.83. Nearby Connecticut, in comparison, had premiums start higher for this applicant profile but cap at a lower ceiling with a premium range of $241.85 to $299.93.
  • Moreover, anyone attempting to gauge what kind of bargains are available through the exchanges should ensure they are making like comparisons, according to web seminar panelist Rodger Bayne, president of Benefit Indemnity Corporation. “Quotes might be cheaper because of the Bronze rates, with lower premiums but higher out-of-pocket costs,” he observed. “Certainly there will be some disputed claims and concerns about what’s best.”
  • Other envisioned conflicts stem from lack of employer compliance with employee notification requirements. These could arise if, for example, an employee without coverage receives medical treatment from a provider who might then be on the hook for uncompensated care. If that provider discovers the employee was not properly notified about the exchanges and his coverage options, there could be the makings of a lawsuit.
  • “We believe that, over time, providers holding bad debt will join with employees and that this will become a civil court issue,” according to Randy Spicer, health services consultant for the National Restaurant Association. To help members comply with ACA notifications and avoid such liability, the association has created an online Compliance Portal which assists with notification delivery and recordkeeping. The group is also exploring whether to make the Portal available to non-member organizations.
  • On other fronts, attorney Anusha Rasalingam, a partner with Friedman & Wolf, notes that Obama administration rulings on ACA implementation have alienated labor unions. At issue is the status of multiemployer plans as qualified health plans on the exchanges. However, efforts to have multiemployer plans included in the exchanges were rejected last month by the Labor Department and Department of Health and Human Services.

*Modified from a Benefitnews.com article

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What Does New Health Law Mean For Me?

Beginning today October 1st, individuals will begin selecting health insurance plans that will become effective January 1, 2014. These are some questions and answers to clarify the process. 

I already have health coverage at my job. What happens to me?

  • Changes may not affect you much if you’re one of the 171 million Americans with coverage through your job or your spouse’s job. You might be able to use new health-insurance exchanges opening Tuesday, but you probably wouldn’t be eligible for a subsidy.

I heard some companies that offer health coverage are making changes—is that true?

  • Yes. The law already mandates allowing people to keep children on their plans up to age 26. Plans with very limited benefits offered by some companies—particularly in retail, restaurants and agriculture—are generally being phased out. A few firms are giving workers a fixed sum and letting them choose their own plan from what’s called a private exchange. This isn’t the same as the health law’s exchange.

I’ve been buying my own health coverage. What now?

  • On Tuesday, you’ll see new private insurance plans through insurance exchanges in most parts of the country. Singles making less than $46,000 a year, couples making less than $62,000 and families with slightly higher income levels may be eligible for subsidies to pay for coverage.

What kinds of policies are they selling on these exchanges?

  • Policies must cover certain preventive care and can’t have lifetime caps. Also, your premium won’t be based on your medical history—good news if you’ve been sick. Healthy people who previously could buy inexpensive policies may pay more. Plans are labeled gold, silver or bronze depending on how much they cover.

Do I get to keep my doctor?

  • If you’re buying a new policy on an exchange or switching insurers, you’ll likely find they have different networks of providers. Some of the lowest-priced policies are likely to have smaller networks.

What if I’ve been going without coverage?

  • Some of the 46 million uninsured Americans may be subject to a penalty starting at $95 next year if they don’t have coverage starting Jan. 1. You can go to the new insurance exchanges to shop for plans, or if your income is below 138% of the federal poverty level, you may qualify for Medicaid, depending on your state.

Those of us on Medicare?

  • If you’re one of 49 million in the Medicare program, with or without a supplemental insurance plan, you’ll continue to enroll the same way. The law cuts spending by billions of dollars over a decade—largely by reducing payments to hospitals and doctors and increasing incentives for more-efficient care—but it doesn’t directly affect benefits. Supporters say this will strengthen Medicare. Opponents say seniors will find it harder to access their benefits if providers are squeezed.

*Modified from a WSJ.com article

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Ten states where Obamacare wipes out existing health care plans

Here are the ten states where consumers may like their health care plans, but they won’t be able to keep them.

1) California: 58,000 will lose their plans under Obamacare. The first bomb dropped in California with a mass exodus from the most populated state’s Obamacare exchange. Aetna, the country’s largest insurer, left first in July and was closely followed by UnitedHealth. Anthem Blue Cross pulled out of California’s Obamacare exchange for small businesses as well. *Fifty-four percent of Californians expect to lose their coverage, according to an August poll.

2) Missouri: Patients of the state’s largest hospital system — which spans 13 hospitals including the St. Louis Children’s Hospital — will not be covered by the largest insurer on Obamacare exchanges, Anthem BlueCross BlueShield. Anthem covers 79,000 patients in Missouri who may seek subsidies on Obamacare exchanges, but won’t be able to see any doctors in the BJC HealthCare system.

3) Connecticut: Aetna, the third largest insurer in the nation, won’t offer insurance on the Obamacare exchange in its own home state, where it was founded in 1850. The reason? “We believe the modification to the rates filed by Aetna will not allow us to collect enough premiums to cover the cost of the plans and meet the service expectations of our customers,” said Aetna spokesman Susan Millerick.

4) Maryland: 13,000 individuals covered by Aetna and its recently-purchased Coventry Health Care won’t be able to keep their insurance plans if they want Obamacare subsidies on the exchanges. Aetna and Coventry canceled plans to offer insurance in the exchange when state officials wouldn’t allow them to charge premiums high enough to cover costs.

5) South Carolina: 28,000 people were insured by Medical Mutual of Ohio, SC’s second-largest insurance company, until it decided to leave the state entirely in July due to Obamacare’s “vast and quite complex” new regulations. Company spokesman Ed Byers said Medical Mutual’s patients would be switched over to United Healthcare plans instead.

6) New York: Aetna pulled out of New York’s exchange in late August in an effort to keep their plans “financially viable,” said Aetna spokeswoman Cynthia Michener.

7) New Jersey: 1.1 million Aetna customers are at risk in New Jersey, where the leading insurer also won’t be a part of the exchange. Just 2,600 patients purchase individual plans with the company, but any looking to take advantage of subsidies on the exchange for unaffordable employer-based insurance won’t be able to do with Aetna.

8) Iowa: Wellmark Blue Cross and Blue Shield, Iowa’s largest health insurer, decided not to offer plans in the Obamacare exchange. It sells 86 percent of Iowa’s individual health insurance plans.

9) Wisconsin: Two of the three largest insurers in the state won’t offer plans on the exchange. United Healthcare and Humana patients will have to get a new health insurer to buy insurance on Obamacare exchanges.

10) Georgia: Just five insurers are participating in Georgia’s Obamacare exchange. Medical Mutual of Ohio left Georgia and Indiana as well as South Carolina, due to Obamacare regulations. Aetna, along with Coventry, also decided against participating in the George health exchange.
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*Modified from a DailyCaller.com article

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Insurers limiting doctors, hospitals in health insurance market

THE DOCTOR CAN’T SEE YOU NOW! In recent months, the top priority for state officials and insurers has been affordable premiums. A smaller panel of doctors and hospitals generally yields lower rates because insurers can negotiate better discounts. Insurers in California’s new health insurance exchange are holding down premiums by limiting choices, raising concerns that patients will struggle to get care.

  • Major insurers have limited the number of doctors and hospitals available in California’s new health insurance market. Cedars-Sinai Medical Center, for example, is available only on two lower-priced Health Net plans in the state-run market. To hold down premiums, major insurers in California have sharply limited the number of doctors and hospitals available to patients in the state’s new health insurance market opening Oct. 1.
  • New data reveal the extent of those cuts in California, a crucial test bed for the federal healthcare law. These diminished medical networks are fueling growing concerns that many patients will still struggle to get care despite the nation’s biggest healthcare expansion in half a century. Consumers could see long wait times, a scarcity of specialists and loss of a longtime doctor. “These narrow networks won’t work because they cut off access for patients,” said Dr. Richard Baker, executive director of the Urban Health Institute at Charles Drew University of Medicine and Science in Los Angeles.
  • To see the challenges awaiting some consumers, consider Woodland Hills-based insurer Health Net Inc. Across Southern California the company has the lowest rates, with monthly premiums as much as $100 cheaper than the closest competitor in some cases. That will make it a popular choice among some of the 1.4 million Californians expected to purchase coverage in the state exchange next year.
  • But Health Net also has the fewest doctors, less than half what some other companies are offering in Southern California, according to a Times analysis of insurance data. In Los Angeles County, for instance, Health Net customers in the state exchange would be limited to 2,316 primary-care doctors and specialists. That’s less than a third of the doctors Health Net offers to workers on employer plans. In San Diego, there are only 204 primary-care doctors to serve Health Net patients.
  • Health Net says price will probably matter most to the uninsured and people who buy their own health insurance now, so it built a narrow network to serve those “value seekers.” “We have more than enough doctors for our projected enrollment through 2014, and we have time to adjust if it becomes necessary,” Health Net spokesman Brad Kieffer said. “We continue reaching out to providers, and we are bringing more on board.”
  • Other major insurers have pared their list of medical providers too, but not to Health Net’s degree. Statewide, Blue Shield of California says exchange customers will be restricted to about 50% of its regular physician network. In response, California officials have been pressing Health Net and other insurers to add more doctors since companies filed their initial rosters in May. The state exchange, Covered California, says it will monitor enrollment closely once it begins next month and it’s prepared to step in if problems arise.
  • Rather than mere head count, officials say they are scrutinizing what capacity physicians have to accept new patients. And to assist consumers, California will enable people to search for specific doctors online during enrollment to determine what, if any, health plans they will be part of in Covered California. “Does the doctor have room for one more patient or 40 patients? It’s about available seats,” Lee said. “We want to make sure every network has enough doctors.”
  • In recent months, the top priority for state officials and insurers has been affordable premiums. A smaller panel of doctors and hospitals generally yields lower rates because insurers can negotiate better discounts with providers who receive more patients.
  • Insurers and some consumer advocates think people are willing to trade some choice in order to pay less. More employers have been adopting these narrower networks in recent years to trim their own healthcare bills. The California Medical Assn., which represents more than 37,000 doctors statewide, thinks the state is underestimating the difficulties ahead.
  • The differences in network size are noticeable across Southern California. Health Net has 920 physicians in Orange County, compared with more than 2,500 for Blue Shield, according to company data. Health Net has fewer than 800 doctors in San Diego County, while nearly 3,000 physicians are available in an Anthem Blue Cross plan.
  • In addition to doctors, some big-name hospitals may be left out. A spokesman for Cedars-Sinai Medical Center said the hospital has received many calls from patients who were worried about keeping their access to the hospital and its affiliated doctors in the new health plans next year. Cedars-Sinai is available only on two lower-priced Health Net plans in the state-run market, according to the hospital and insurer. Anthem Blue Cross says that it’s the only insurer that includes UCLA Medical Center and other UC facilities statewide.
  • Newly released data show the pricing power of these tighter networks. In Los Angeles County, Health Net is consistently the lowest-cost option for a mid-level Silver plan across various age groups. A family of four in Norwalk earning $65,000 annually would pay $384 a month for a Health Net policy, after taking into account a federal subsidy based on their income. For a policy with identical benefits, Blue Shield was next at $477 a month and Kaiser was the most expensive at $602.

*Modified from a LATimes.com article

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The Administration’s War on the Young: ACA Version

It’s not news at this point that the Affordable Care Act (ACA) is built around the perverse premise that younger, healthier people should spend more for their health insurance, to subsidize the cost of health insurance for older, sicker people.

  • A new study by the Kaiser Family Foundation, released this week, brings into the light the full extent of this wealth redistribution from young and healthy to old and sick. In fact, when individuals choose less generous plans in “Bronze Tier” a 60 year old could pay 1/3 of what a 25 year old with the same income would pay!

  • Much has been made about the three to one age band rating requirements for health insurance contained in the ACA. In English that means that an insurer cannot charge a sick 60 year old more than three times what they charge a healthy 25 year old. This can be seen clearly in the Kaiser study when one looks at the cost of a so-called “Silver plan” for a 60 year old, 40 year old and 25 year old who all have identical incomes at 250 percent of the poverty level.
  • In Los Angeles, CA for example the 60 year old would pay $541 per month before subsidies for the second lowest cost silver plan (which serves as the benchmark for calculating the subsidy), the 40 year old would pay $255 before subsidies, and the 25 year old would pay $200 before subsidies. Because all three are at 250 percent of poverty their out of pocket monthly cost is capped at $193 per month. Each receives a subsidy sufficient to bring their monthly premium down to the $193 cap.
  •  Now that their subsidy is set, each individual can choose to stick with the silver plan, move up to a gold plan, or move down to a bronze plan. This is where the president’s war on the young becomes strikingly clear. Whether these three individuals buy a gold, silver or bronze plan, their monthly subsidies stay the same – in the Los Angeles example $341 for the 60 year old, $62 for the 40 year old, and $7 for the 25 year old. If all three choose to buy the same bronze plan, the 60 year old would pay $50 a month, the 40 year old would pay $125 a month, and the 25 year old would pay $140 a month
  •  What that means is that those whose health care costs are the highest pays $90 LESS per month, than the individuals whose health care costs are non-existent. Of the eighteen states Kaiser examined, the largest discrepancy was in Connecticut where a healthy 25 year old would pay $117 a month for the same insurance that a 60 year old could get for FREE. The smallest margin – excluding New York and Vermont which have full community rating in effect – was in Portland, OR where the healthy 25 year old would pay $14 more for the same bronze plan than the more expensive to insure 60 year old.

Modified from an AmericanActionForum.com article.

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Labor union frustration boils over with president on ObamaCare

Unions are frustrated the Obama administration hasn’t responded to their calls for changes to ObamaCare. Labor has watched with growing annoyance as the White House has backed ObamaCare changes in response to concerns from business groups, religious organizations and even lawmakers and their staffs.

  • They say they don’t understand why their concerns so far have fallen of deaf ears. “We are disappointed that the non-profit health plans offered by unions have not been given the same consideration as the Catholic Church, big business and Capitol Hill staffers,” Unite Here President D. Taylor told The Hill. It’s an issue that Obama may have to face when he speaks to the AFL-CIO convention a week after Labor Day. Most unions backed ObamaCare’s passage, but labor argues provisions in the law could cut employee hours, unfairly tax their plans and force workers off their union health plans into the law’s potentially more costly insurance exchanges.
  • The key issue are union members who many up many of the roughly 20 million people who use non-profit multi-employer “Taft-Hartley” health plans. Unions want the administration to change ObamaCare so that those plans are treated as qualified health plans that can earn tax subsidies. Under the administration’s interpretation of the law, the multi-employer plans are not eligible for the subsidies.
  • Without those subsidies, employers may have the incentive to drop the plans and force workers onto the insurance exchanges. “The Democrats have completely given the store away to the for-profit industry,” Taylor said. “Without any question, we have a scenario set up that ObamaCare has turned all the money over to the for-profit plans and the non-profit plans will fade away.”
  • Unions also argue that the law creates an incentive for employers to cut back on work hours for employees. Under ObamaCare, companies have to provide healthcare coverage to workers who work 30 hours or more a week — which could lead some employers to cut back on employee hours to avoid the requirement. An AFL-CIO official said the labor federation supports a change to ObamaCare that extends the employer’s healthcare coverage requirement to workers working less than 30 hours per week.
  • Unions’ lobbying to change the law has grown louder as open enrollment approaches for the exchanges. “With open enrollment set to begin on October 1, time is of the essence, so we are working hard every day to find a solution to protect our members’ healthcare,” said Tim Schlittner, a spokesman for the United Food and Commercial Workers International Union (UFCW). Schlittner estimates that about 500,000 members of the 1.3 million-strong UFCW use Taft-Hartley plans. “We continue to have a dialogue but we haven’t found a solution yet,” he acknowledged.

*Modified from a Hill.com article

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Five Misconceptions about the ACA and COBRA

False impressions surrounding the ACA have fueled myths about COBRA compliance. Employers need to continue complying with COBRA. Misperceptions stem from the misunderstanding that exchanges will eliminate the need for COBRA. Yes, the ACA requires that exchanges be operational in states by Oct. 1, 2013. But this will be another option, not a replacement, for qualifying individuals who otherwise lack health insurance and also qualify for COBRA.

Following are five attributable to confusion over exchanges, and an explanation of the reality

Myth No. 1: Exchanges will be consistent in each state.

  • Reality: Each state may design its exchange differently, just as Massachusetts and Utah have. As noted, a majority of states have decided not to establish a state-run exchange. Additionally, different carriers may cause Federally-operated exchanges to run differently in each state.

Myth No. 2: Exchanges will be less expensive than employer-provided benefits.

  • Reality: This will depend on the risk pool entering each exchange. If only the sickest enter, exchanges will be more costly. “It may all come down to cost,” says Geoffrey Mann, senior manager, product compliance, for Ceridian. “It’s not at all clear today that the same coverage will cost someone less through a marketplace than COBRA. And, even if the cost is comparable, there may be other reasons to hold onto employer coverage.”

Myth No. 3 Employees will prefer exchanges to other health insurance options.

  • Reality: Several reasons might sway individuals to continue their current health insurance: Their provider networks may not be offered in exchanges. Dental and vision coverage may not be offered. Individuals may have already met deductible or out-of-pocket requirements. And, though the form to apply for exchange eligibility has been pared from 21 to four pages, applicants may find the process too confusing or complex and elect to remain on COBRA.

Myth No. 4: Exchanges will be a viable option for all employees in 2014.

  • Reality: Until 2017, exchanges will only be available to individuals and to organizations with fewer than 50 employees (in Hawaii, 100). Additionally, delays may themselves render them inoperative or short of fully operational beyond 2014.

Myth No. 5: The Marketplace will completely address the continuation of health benefits.

  • Reality: If this were the case, COBRA would have been repealed. Furthermore, the DOL recently made changes to its model COBRA Election Notice, suggesting the agency’s view that COBRA and exchanges will co-exist for the foreseeable future. Furthermore, the many practical considerations mentioned in the reality behind Myth No. 3, above, suggest COBRA’s perpetuity, too.

Changes to COBRA might come in 2017, when large employers may become eligible to participate in the Marketplace. Their workforces would expand the base of exchange-eligible individuals, and Congress might then consider revisiting provisions of COBRA. For now, however, employers must comply with all aspects of COBRA.

*Modified for an Employee Benefit Advisor.com article

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