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The Election’s Choice on Health Care Reform

On the issue of health care reform, your choice on Election Day comes down to Obamacare or “repeal and replace.”

President Barack Obama’s position can be “summed up” in 2,400 pages. That’s the length of his Affordable Care Act, the landmark 2010 health care overhaul informally known as Obamacare, which makes sweeping consumer-centric changes to common health insurance practices.

The law is closely modeled after the Massachusetts health insurance reform that Republican challenger Mitt Romney championed when he was governor of that state in 2006. But now, the former Massachusetts governor vows that if he’s elected president, he’ll repeal the Obama law and replace it with a more conservative alternative.

But what that might look like is one of the campaign’s big questions.

  • Obama touts health care law in his campaign

Obama is promoting the Affordable Care Act as he makes his case for a second term. Go to the health care section of his campaign website to find out where he stands, and what you’ll find are links where you can “learn how Obamacare benefits you.”

Under the law, insurers by 2014 may no longer: deny coverage to individuals with pre-existing conditions; impose lifetime or annual dollar limits on coverage; cancel coverage arbitrarily; limit doctor choice and out-of-network emergency services; or charge higher premiums based on gender or health status.

The act also allows young adults to remain on their parents’ policy until age 26, and it provides a laundry list of preventive care screenings and services to all ages at no additional cost.

To help pay for this expansion of benefits, the law’s “individual mandate” requires most Americans to obtain health insurance or pay a penalty. To help consumers find affordable coverage, new state marketplaces called exchanges will open in 2014, government tax credits will be available for low-income individuals and families, and states are encouraged to expand their Medicaid programs to millions of uninsured, lower-income Americans.

The Medicaid expansion had been a requirement under the law, but the U.S. Supreme Court made it optional for states.

  • Romney plan short on details

Romney’s campaign website says Obama’s approach to health care reform takes the country in the wrong direction, by relying on “a dense web of regulations, fees, subsidies, excise taxes, exchanges, and rule-setting boards to give the federal government extraordinary control over every corner of the health care system.”

But while the Republican has been very specific about wanting to repeal the Obama health care law, he has been vague on how a Romney administration would replace it, says Jonathan Oberlander, professor of social medicine and health policy at The University of North Carolina at Chapel Hill.

“On one hand, there is reason to think they might seek ambitious health reform. On the other hand, the base of the Republican Party is more interested in ‘repeal.’ That makes it very hard for him to talk specifics about ‘replace,'” Oberlander says.

Romney “would be part of a Republican government, and the Republican Party has shown some pretty strong preferences about health care,” according to Joe White, professor of public policy and political science at Case Western Reserve University in Cleveland.

According to the Romney website, his reforms would promote individual responsibility for health care and ease government regulation on health insurers so that free-market competition can drive down costs.

The states rather than the federal government would run the show and “have both the incentive and the flexibility to experiment, learn from one another, and craft the approaches best suited to their own citizens,” the website says. Federal standards and requirements would be limited on both private insurance and Medicaid.

“The Republican position all along has been that the problem with health care is that people are not individually responsible for their health care, so when they need it, they consume too much,” White says. “Basically, their solution is to encourage less generous or less adequate insurance.”

Romney has said he would retain some popular features of the Affordable Care Act, including allowing young adults to remain on their parents’ plan and enabling people with pre-existing conditions to obtain coverage. But while he has said, “I like everybody being insured,” it is unclear whether he would require that.

  • What do voters want?

The Obama law is already starting to transform U.S. health care into the president’s vision, to mixed reviews. In a recent tracking poll from the Kaiser Family Foundation, 43% of Americans viewed the law unfavorably, while 38% felt favorably.

What effect would a Romney overhaul of the overhaul have on U.S. health care, and would the public approve?

Judy Feder, health policy expert with the Urban Institute, a nonpartisan think tank in Washington, D.C., says stripping the market of regulation would leave consumers less empowered to find affordable health coverage.

“It would essentially undo the employer-based insurance market,” she says. “Individual shoppers are much less effective than larger purchasers, particularly in a highly concentrated health care market.”

In the Kaiser Family Foundation tracking poll, a 49% plurality said the Affordable Care Act should be kept as is or even expanded. Oberlander says whether voters would accept a Republican health insurance alternative may not be as important to a President Romney as whether he could convince his own party to act at all.

“If he wins, he’s got more freedom, but they would also face a very conservative House, and they’re certainly not going to have a 60-vote (filibuster-proof) majority in the Senate,” Oberlander says, of the challenges for a Republican White House on health care reform. “Even if they wanted to do something ambitious, how do you pass it? And from a purely political viewpoint, why in the world would anybody want to start another health reform fight?”

*Modified from a Fox Business News Article




Illinois Democratic Sen. Dick Durbin: Cuts to workers’ hours a ‘bad result’ of Obamacare

Illinois Democratic Sen. Dick Durbin, the second-ranking Democrat in the Senate, told The Daily Caller that “several” areas of President Barack Obama’s Affordable Care Act could be “improved” and acknowledged that a “bad result” of the law is that companies are cutting workers’ hours to avoid paying for their health insurance.

For example, Darden Restaurants, which operates the Olive Garden and Red Lobster restaurants, is reportedly limiting employees’ hours due to the health care law’s regulations on businesses.

“It’s a bad result. It is a bad result, and I’d like to – I’ve worked with them [Darden] on many issues, and I’d like to sit-down with them and find out what it is,” Durbin, who voted for Obamacare, told TheDC in a video interview at Hofstra University before Tuesday night’s presidential debate.

“Like I say, the only perfect law that was ever written was carried down on stone tablets from the mountain by Senator Moses,” Durbin said. “Everything else is subject to improvement, and that’s the way I look at the health care reform bill. Let’s sit down with these businesses, large and small, and find out how we can strike a happy medium.”

The law requires businesses with more than 50 full-time employees to provide health insurance for their workers, or pay a fine to the IRS.

Describing himself as a “single-payer guy,” Durbin also told TheDC he would like to see states adopt single-payer health care systems.

“I hope states will exercise their option to create a single-payer plan,” said Durbin.

“Let’s test it against the private insurance market, and over a period of time decide if that has some value in other places.”

*Modified from a Daily Caller article


Examiner Editorial: Companies cut hours and jobs to dodge Obamacare

If you want to know how Obamacare will affect future U.S. employment, look no further than this week’s Orlando Sentinel report on Darden Restaurants — the company that owns popular chains like the Olive Garden and Red Lobster. Currently, all 185,000 Darden employees are offered health insurance, but that’s about to change, thanks to Obamacare.

Obamacare fines large companies that fail to offer health insurance to their full-time employees. This would not be a problem for Darden, except that many of its employees have affordable health plans whose coverage is not robust enough to fulfill the requirements of Obamacare’s individual mandate. Such plans are popular with restaurants, whose profit margins tend to be small, because they let employers offer benefits at a very reasonable cost. But such plans have coverage limits and other features that Obamacare bans, so they will likely be discontinued beginning in 2014, if not sooner.

And so in order to avoid paying fines or buying massively more expensive health plans that are Obamacare-compliant, Darden is now experimenting with limiting its employees’ hours instead. By keeping workers to fewer than 30 hours per week, Darden can categorize them as “part-time.” Thus, the company avoids the Obamacare fines and leaves employees to the new government health insurance exchanges, where they may receive subsidies to purchase insurance. At least two other restaurant chains — White Castle and McDonald’s — are considering similar plans.

  • So to sum up, Obamacare is leading to fewer hours worked, less tax revenue for the government and bigger government subsidies for health insurance for people who were already insured in the first place. If enough companies do this, Obamacare will become a massive dead weight on the federal budget, even as it does little more than shuffle people from one insurance plan to another, whether they like it or not. The Congressional Budget Office estimates, at the high end, that 20 million workers could see their health plans dropped thanks to Obamacare.
  • That’s how Obamacare will affect the restaurant industry, beginning in 2014. The medical device industry, which is far more closely connected to health care, only has until this January before it is hit with a 2.3 percent industrywide excise tax. Medical device makers have been cutting back in anticipation of the tax. Cook Medical Inc., an Indiana-based manufacturer, announced this summer it was canceling plans to build five plants that would have employed about 1,500 people. Those would have all been manufacturing jobs — the kind of jobs that President Obama keeps saying he wants to create, but then keeps smothering through his grand agenda.

These are just two examples of industries where there will be less work and workers will be hurt, all because of Obamacare, should its provisions go into effect. Voters should take notice – Obamacare may soon be reaching out to disrupt your job and your health care situation as well.

*Modified from a Washington Examiner article


Franchisors warn Obamacare will halve profits

The International Franchise Association held a convention in Washington this week where most of the Radio Shack, Dunkin Donuts, Curves and other franchisers were grumbling about new federal regulations, especially the impact of Obamacare.

Most, said Atlanta Taco Bell and Kentucky Fried Chicken franchiser David Barr, presumed that the reports about how hard Obamacare will hit them were overblown. “They had their head in the sand,” he told Secrets.

That is until he pulled out his powerpoint showing how funding Obamacare will cut his–and likely their–profits in half overnight. With simple math the small business folks understood, he spelled out that their only choice is to slash employee hours so they aren’t eligible for company-paid health care or stop offering insurance and pay the $2,000 per employee fine.

Barr has 23 stores with 421 employees, 109 of whom are full-time. Of those, he provides 30 with health insurance. Barr said he pays 81 percent of their Blue Cross Blue Shield policy, or $4,073 of $5,028 for individuals, more for families, for a total bill of $129,000 a year. Employees pay $995.

Under Obamacare, however, he will have to provide health insurance for all 109 full-time workers, a cost of $444,000, or two and half times more than his current costs. That $315,000 increase is equal to just over half his annual profit, after expenses, or 1.5 percent of sales. As a result, he said, “I’m not paying $444,000.”

Providing no insurance would result in a federal fine of $158,000, $29,000 more than he now spends but the lowest cost possible under the Obamacare law. So he now views that as his cap and he’ll either cut worker hours or replace them with machines to get his costs down or dump them on the public health exchange and pay the fine. “Every business has a way to eliminate jobs,” he said, “but that’s not good for them or me.”

But that’s not all. His experience tells him that most low-wage workers he would have to cover under Obamacare won’t take it because their $995 share is too high, meaning those the program was set up for won’t see any benefit. And those who do will because they have major health issues, likely resulting in higher premiums to him.

*Modified from the Washington Examiner


Obamacare: It’s Still a Gateway to Single-Payer Health Care

By Sen. Tom Coburn
September 6, 2012

More than two years after the passage of Obamacare, the data overwhelming show the law will fail to achieve its core objectives of lowering costs and improving access. That, ironically, may have been the design. By making private insurance unaffordable for everyone, it will become available to no one. All that will be left is government-centered, government-run, single-payer health care.

Let’s look at the law’s promises that were rigged to fail.

  • First, supporters of the law said the law would bend the cost curve down and reduce health-insurance costs. Yet health-insurance premiums are increasing faster than before the law was passed and experts confirm costs will increase along with federal health spending.
  •  Second, defenders of the law said the bill would massively extend health-insurance coverage. But in June the Supreme Court threw out the forced Medicaid expansion which the Congressional Budget Office originally estimated was responsible for half of new coverage under the law. And despite claims of increasing coverage, more Americans are without health coverage today than when President Obama took office.
  •  Third, supporters claimed the law would reduce the deficit. Yet, none of the law’s gimmicks has managed to hide its true costs. One gimmick was omitting a $300 billion payment to doctors who care for seniors on Medicare. Another illusion was the promise of $70 billion in savings — half of the bill’s projected deficit reduction in the first decade — from a now-defunct long-term care program. The Congressional Budget Office’s most recent analysis shows the law is jammed with $1 trillion in tax hikes and will spend more than $1.7 trillion over the next decade.
  •  Fourth, and most important, the law’s individual mandate was rigged to fail. Unless the law is repealed, in 2014, the new individual-mandate tax will effectively force all Americans to buy insurance. Health-insurance companies will be forced to offer coverage to virtually every American, regardless of their pre-existing condition or health status. Employers will be penalized if they do not offer health coverage. The problem is this approach will never work, which the lawmakers who backed the “public option” new full well.

According to analysis by the Congressional Research Service, the IRS does not have the authority to enforce the individual-mandate tax. Moreover, because the tax penalty is far less than the price of purchasing health coverage and insurers are forced to cover Americans at any time, millions will choose to pay the tax and only sign up for coverage when they get sick.

As a result, insurers will be left paying for people who are comparably older and sicker than the general population. The result is a classic death spiral where the costs of covering the insured skyrocket, discouraging even more people from buying insurance. States that have tried similar approaches have seen their costs skyrocket.

At the same time, employers will make a similar economic decision, choosing to pay a $2,000 penalty per worker, instead of paying four to ten times that for a worker’s health coverage.  As former Democrat Governor Phil Bredesen said, when employers do the math, dropping workers’ coverage “will make good financial sense.”

Many workers who are not offered coverage through their employer will be eligible for federal subsidies to buy government-approved insurance through insurance exchanges.  If workers seek health coverage through the exchange, the costs of the subsidies to taxpayers will skyrocket – likely by hundreds of billions of dollars. Yet, if workers chose to simply pay the mandate tax and go without insurance, health insurance costs will climb still further.

The scenario outlined above is not speculation but is a forecast based on current trends described by nonpartisan experts.

Taxpayers should remember that liberal Democrats — who have made “catching up with Europe” and imposing a single-payer, government-run health system on America their life’s mission — celebrated the law’s passage for a reason. For them, it was a win-win outcome. Either the law would succeed and expand government’s role in health care, contrary to their own understanding of how market-economies work, or it would fail and pave the way for single-payer health care in a politically feasible way. If the private insurance market crumbled, government could mount a rescue operation and “save” patients.

Thankfully, that future is not yet written. Lawmakers who believe patients and doctors, not politicians, should manage our health-care system have plenty of ideas on how to repeal and replace Obamacare. What we need, however, is for the American people to see the urgency of the problem and replace not just the law but the politicians who put it in place.


Pre-Tax Healthcare Accounts for Medical Expenses

Due to rising health insurance costs, the majority of U.S. businesses are increasing the employees’ share of health care.  This “cost-shifting” from employers to employees comes in many different forms, including: pre-tax healthcare accounts

  • Increased employee share of premiums
  • Increased deductibles
  • Increased coinsurance
  • Increased or elimnated co-pays

Many businesses are looking for ways to lower the expense of medical benefits without reducing coverage for employees. Pre-tax health care accounts can help businesses and employees save money by paying for health care expenses with pre-tax dollars.

What are the Different Types of Pre-tax Healthcare Accounts?

The most common forms of Pre-tax Healthcare Accounts include:

Health Reimbursement Arrangements – A Health Reimbursement Arrangement, or HRA, is an IRS approved, employer-funded, tax advantaged employer health benefit plan that reimburses employees for out of pocket medical expenses and individual health insurance premiums. A health reimbursement arrangement is not health insurance. A health reimbursement arrangement allows the employer to make contributions to an employee’s account and provide reimbursement for eligible expenses. A health reimbursement arrangement is an excellent way to supplement health insurance benefits and allow employees to pay for a wide range of medical expenses not covered by insurance.  It is often referred to (incorrectly) as a health reimbursement account.

Premium Only Plans – A Section 125 Premium-Only-Plan, or POP, is a cafeteria plan which allows employees to pay their health insurance premiums with tax-free dollars.  Traditionally, these POP plans have been used in combination with employer-sponsored group health insurance plans. However, beginning January 1st, 2009, employees can now use POP plans to pay individual health insurance premiums with tax-free dollars.

Health Flexible Spending Accounts – With a Health Flexible Spending Account, or FSA, employees direct their employer to lower their pre-tax wages next year by $200/month, and the employee, on the first day of the next plan year, receives a $2,400 FSA allowance for medical expenses. The employee must be given access to the full $2,400 on the first day of the plan year. If an employee spends the full $2,400 in the first month and quits, the employer is not allowed to recover the unpaid balance.

Health Savings Accounts  – Health Savings Accounts, or HSAs, are individual bank accounts owned by employees that allow tax-free medical expense reimbursement.  While HSAs are often packages as “employer benefits”, they are really more like IRAs in that individuals can set them up and contribute to them on their own.
What are the Benefits of Pre-tax Healthcare Accounts?

The employer and employee benefits of pre-tax healthcare account include:

  • Reduced payroll costs – Pre-tax Healthcare Accounts saves employers and employees thousands of dollars in payroll taxes
  • Increases employee’s benefits and take home pay – Pre-tax Healthcare Accounts increase employee compensation because the does not have to pay income taxes on reimbursements.

*Modified from a Zane Benefits article


Washington Post Examines Impact of Health Reform Law on Premiums

The article noted five factors that could lead to higher insurance premiums:

1. Currently insurance companies offer lower premiums to younger Americans, since they generally have lower health costs. But starting in 2014, the law implements an age band so that the amount an older individual pays will be no more than three times what a younger individual pays. So if a state currently allows an age band of 5:1, older Americans might see a premium decrease — but younger Americans would see a premium spike.

2. A similar dynamic exists with the law’s requirement that insurers selling policies through the health exchanges will no longer be able to charge different premiums based on a person’s health status when coverage is first purchased. This is known as a community rating. So healthier individuals generally will see higher premiums.

3. The popular provision that requires insurers to accept everyone regardless of their health status (i.e., pre-existing conditions) also will transfer costs to healthier individuals.

4. Insurers must offer an “essential health benefits” package, providing coverage in 10 categories. The list includes: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

It’s a great package, but the benefits are more extensive than what most individuals and small businesses already purchase. So that will also boost premiums, especially if you currently have a less extensive plan. A report in the June edition of Health Affairs found that “more than half of Americans who had individual insurance in 2010 were enrolled in plans that would not qualify as providing essential coverage under the rules of the exchanges in 2014.”

5. The law also contains various taxes and fees, including a health insurance tax. Those costs presumably would be passed on to consumers, resulting in higher premiums.


*Modified from a Washington Post Article


Ambiguity in Health Law Could Make Family Coverage Too Costly for Many

The New York Times, By Robert Pear -August 11, 2012: The new health care law is known as the Affordable Care Act. But Democrats in Congress and advocates for low-income people say coverage may be unaffordable for millions of Americans because of a cramped reading of the law by the administration and by the Internal Revenue Service in particular.

Under rules proposed by the service, some working-class families would be unable to afford family coverage offered by their employers, and yet they would not qualify for subsidies provided by the law.

The fight revolves around how to define “affordable” under provisions of the law that are ambiguous. The definition could have huge practical consequences, affecting who gets help from the government in buying health insurance.

Under the law, most Americans will be required to have health insurance starting in 2014. Low- and middle-income people can get tax credits and other subsidies to help pay their premiums, unless they have access to affordable coverage from an employer.

The law specifies that employer-sponsored insurance is not affordable if a worker’s share of the premium is more than 9.5 percent of the worker’s household income. The I.R.S. says this calculation should be based solely on the cost of individual coverage for the employee, what the worker would pay for “self-only coverage.”

Critics say the administration should also take account of the costs of covering a spouse and children because family coverage typically costs much more.

In 2011, according to an annual survey by the Kaiser Family Foundation, premiums for employer-sponsored health insurance averaged $5,430 a year for single coverage and $15,070 for family coverage. The employee’s share of the premium averaged $920 for individual coverage and more than four times as much, $4,130, for family coverage.

Under the I.R.S. proposal, such costs would be deemed affordable for a family making $35,000 a year, even though the family would have to spend 12 percent of its income for full coverage under the employer’s plan.

The debate over the meaning of affordable pits the Obama administration against its usual allies. Many people who support the new law said the proposed rules could leave millions of people in the lower middle class uninsured and frustrate the intent of Congress, which was to expand coverage.
“The effect of this wrong interpretation of the law will be that many families remain or potentially become uninsured,” said a letter to the administration from Democrats who pushed the bill through the House in 2009-10. The lawmakers include Representatives Henry A. Waxman of California and Sander M. Levin of Michigan.

Bruce Lesley, the president of First Focus, a child advocacy group, said: “This is a serious glitch. Under the proposal, millions of children and families would be unable to obtain affordable coverage in the workplace, but ineligible for subsidies to buy private insurance in the exchanges” to be established in each state.

Businesses dislike the idea of insurance mandates and penalties, but said the I.R.S. had correctly interpreted the law.

“Employers who offer health coverage do so primarily on behalf of their employees,” said Kathryn Wilber, a lawyer at the American Benefits Council, which represents many Fortune 500 companies. “Although many employers do provide family coverage to full-time employees, many do not.”

The I.R.S. issued final rules for the health insurance premium tax credit in May, but deferred its final decision on the affordability of family coverage. Sabrina Siddiqui, a Treasury Department spokeswoman, said, “We welcome comments from stakeholders and consumer groups and look forward to continuing to work with them to implement these rules and to ensure families get the affordable care they need.”

The administration is trying to strike a balance. If the rules allow more people to qualify for subsidies, it would increase costs to the federal government. If the rules require employers to provide affordable coverage to dependents as well as workers, it would increase costs for many employers.
Wayne Goodwin, a Democrat who is the insurance commissioner of North Carolina, said the proposed federal policy would create a hardship for many state employees. North Carolina pays all or nearly all of the premium for health insurance covering state government employees, but it has never paid the cost for their dependents, Mr. Goodwin said.

“The average salary of North Carolina state employees is about $41,000,” Mr. Goodwin added, “and the cost of family coverage in the basic plan is $516 a month, which is not affordable for many state employees. Because employee-only coverage for this plan is provided at no cost to the employee, based on the proposed regulations, all family members would be prohibited from obtaining subsidies through the exchange.”

Dr. David I. Bromberg, a spokesman for the American Academy of Pediatrics, said, “The I.R.S.’s interpretation of the law could unravel much of the progress that has been made in covering children in recent years.” The Service Employees International Union said the proposal “discriminates against marriage and families.”

Some of the most important provisions of the law will be carried out by the I.R.S. Besides offering tax credits to individuals and families, it will impose tax penalties on people who go without insurance and on businesses that do not offer it.

The agency said its reading of the law was supported by the Congressional Joint Committee on Taxation. The health care rules were drafted by “our legal experts — career civil servants who are some of the best tax lawyers in the world,” said Douglas H. Shulman, the I.R.S. commissioner.

The law says an employer with 50 or more full-time employees may be subject to a tax penalty if it fails to offer coverage to “its full-time employees (and their dependents).” However, more than two years after President Obama signed the law, the employer’s obligation to dependents is unclear.
In explaining how the penalty is to be computed, the law does not mention dependents. Employers pay a penalty only if one or more full-time employees receive subsidies.

Companies are less likely to offer or pay for coverage of dependents in industries with low wages and high turnover, like restaurants.

Some employers and members of Congress have suggested a possible compromise. The government would still look at the cost of “self-only coverage” in deciding whether insurance was affordable to an employee. If family coverage under the employer’s plan was too expensive, a family could get subsidies to buy insurance for dependents in the exchange, and the employer would not be penalized.


Doctor Shortage Likely to Worsen With Health Law

RIVERSIDE, Calif. — In the Inland Empire, an economically depressed region in Southern California, President Obama’s health care law is expected to extend insurance coverage to more than 300,000 people by 2014. But coverage will not necessarily translate into care: Local health experts doubt there will be enough doctors to meet the area’s needs. There are not enough now.

Other places around the country, including the Mississippi Delta, Detroit and suburban Phoenix, face similar problems. The Association of American Medical Colleges estimates that in 2015 the country will have 62,900 fewer doctors than needed. And that number will more than double by 2025, as the expansion of insurance coverage and the aging of baby boomers drive up demand for care. Even without the health care law, the shortfall of doctors in 2025 would still exceed 100,000.

Health experts, including many who support the law, say there is little that the government or the medical profession will be able to do to close the gap by 2014, when the law begins extending coverage to about 30 million Americans. It typically takes a decade to train a doctor.

“We have a shortage of every kind of doctor, except for plastic surgeons and dermatologists,” said Dr. G. Richard Olds, the dean of the new medical school at the University of California, Riverside, founded in part to address the region’s doctor shortage. “We’ll have a 5,000-physician shortage in 10 years, no matter what anybody does.”

Experts describe a doctor shortage as an “invisible problem.” Patients still get care, but the process is often slow and difficult. In Riverside, it has left residents driving long distances to doctors, languishing on waiting lists, overusing emergency rooms and even forgoing care.

“It results in delayed care and higher levels of acuity,” said Dustin Corcoran, the chief executive of the California Medical Association, which represents 35,000 physicians. People “access the health care system through the emergency department, rather than establishing a relationship with a primary care physician who might keep them from getting sicker.”

In the Inland Empire, encompassing the counties of Riverside and San Bernardino, the shortage of doctors is already severe. The population of Riverside County swelled 42 percent in the 2000s, gaining more than 644,000 people. It has continued to grow despite the collapse of one of the country’s biggest property bubbles and a jobless rate of 11.8 percent in the Riverside-San Bernardino-Ontario metro area.

But the growth in the number of physicians has lagged, in no small part because the area has trouble attracting doctors, who might make more money and prefer living in nearby Orange County or Los Angeles.

A government council has recommended that a given region have 60 to 80 primary care doctors per 100,000 residents, and 85 to 105 specialists. The Inland Empire has about 40 primary care doctors and 70 specialists per 100,000 residents — the worst shortage in California, in both cases.

Moreover, across the country, fewer than half of primary care clinicians were accepting new Medicaid patients as of 2008, making it hard for the poor to find care even when they are eligible for Medicaid. The expansion of Medicaid accounts for more than one-third of the overall growth in coverage in President Obama’s health care law.

Providers say they are bracing for the surge of the newly insured into an already strained system. Temetry Lindsey, the chief executive of Inland Behavioral & Health Services, which provides medical care to about 12,000 area residents, many of them low income, said she was speeding patient-processing systems, packing doctors’ schedules tighter and seeking to hire more physicians.

“We know we are going to be overrun at some point,” Ms. Lindsey said, estimating that the clinics would see new demand from 10,000 to 25,000 residents by 2014. She added that hiring new doctors had proved a struggle, in part because of the “stigma” of working in this part of California.

Across the country, a factor increasing demand, along with expansion of coverage in the law and simple population growth, is the aging of the baby boom generation. Medicare officials predict that enrollment will surge to 73.2 million in 2025, up 44 percent from 50.7 million this year.

“Older Americans require significantly more health care,” said Dr. Darrell G. Kirch, the president of the Association of American Medical Colleges. “Older individuals are more likely to have multiple chronic conditions, requiring more intensive, coordinated care.”

The pool of doctors has not kept pace, and will not, health experts said. Medical school enrollment is increasing, but not as fast as the population. The number of training positions for medical school graduates is lagging. Younger doctors are on average working fewer hours than their predecessors. And about a third of the country’s doctors are 55 or older, and nearing retirement.

Physician compensation is also an issue. The proportion of medical students choosing to enter primary care has declined in the past 15 years, as average earnings for primary care doctors and specialists, like orthopedic surgeons and radiologists, have diverged. A study by the Medical Group Management Association found that in 2010, primary care doctors made about $200,000 a year. Specialists often made twice as much.

The Obama administration has sought to ease the shortage. The health care law increases Medicaid’s primary care payment rates in 2013 and 2014. It also includes money to train new primary care doctors, reward them for working in underserved communities and strengthen community health centers.

But the provisions within the law are expected to increase the number of primary care doctors by perhaps 3,000 in the coming decade. Communities around the country need about 45,000.

Many health experts in California said that while they welcomed the expansion of coverage, they expected that the state simply would not be ready for the new demand. “It’s going to be necessary to use the resources that we have smarter” in light of the doctor shortages, said Dr. Mark D. Smith, who heads the California HealthCare Foundation, a nonprofit group.

Dr. Smith said building more walk-in clinics, allowing nurses to provide more care and encouraging doctors to work in teams would all be part of the answer. Mr. Corcoran of the California Medical Association also said the state would need to stop cutting Medicaid payment rates; instead, it needed to increase them to make seeing those patients economically feasible for doctors.

More doctors might be part of the answer as well. The U.C. Riverside medical school is hoping to enroll its first students in August 2013, and is planning a number of policies to encourage its graduates to stay in the area and practice primary care.

But Dr. Olds said changing how doctors provided care would be more important than minting new doctors. “I’m only adding 22 new students to this equation,” he said. “That’s not enough to put a dent in a 5,000-doctor shortage.”

*Modified from a New York Times article



Employees Favor Employer Health Plans (Even as Some Employers May Dump Them)

Most U.S. workers are satisfied with employer-provided health coverage, according to a new survey by the Washington, D.C.-based National Business Group on Health.

The report, “Perceptions of Health Benefits in a Recovering Economy: A Survey of Employees,” was conducted from late May through early June. A total of 1,545 employees at organizations with 2,000 or more employees responded. Respondents were between the ages of 22 and 69 and receive their health care benefits through their employer or union.

  • Higher premiums and out-of-pocket costs for health care benefits rule the roost, as most covered employees realize. But the survey finds that roughly one in three employees are not confident in their ability to shop for health insurance on their own.

More than half are not confident they can purchase the same or better quality insurance on their own. Reports coming out after the U.S. Supreme Court upheld the Affordable Care Act do not bode well for employees, the reports suggesting they may be forced to buy insurance in health insurance exchanges.

About one in 10 employers in the United States say they’ll drop health coverage for employees in the next few years as the major provisions of the Patient Protection and Affordable Care Act take effect. And more indicate they may do so over time, a survey by consulting company Deloitte finds, an article in BenefitsPro reported this week.

A health insurance exchange is an online marketplace set up under the health reform law wherein individuals and small businesses can shop for health plans from private insurance companies. Each state’s exchange is set to offer coverage beginning Jan. 1, 2014. People may seek federal financial assistance when they apply.

  • There is also a third option tickling some fancies: As recapped in an article published July 19 on, an Employee Benefit Research Institute brief suggests the PPACA exchange system could lead to a return to an employer-sponsored defined contribution health benefits system.

Under this system, employers would give a set amount of cash to employees, the funds used by the employees to buy guaranteed-issue, mostly community-rated coverage through the exchanges.

Nearly two thirds of workers have experienced higher premiums and out-of-pocket costs, according to the survey. The new law mandates that, starting in 2014, any company with 50 or more full-time employees has to provide coverage or pay a penalty.

  • There have been conflicting reports over how many employers will drop coverage for employees. Deloitte’s report predicts a lesser impact than some. Last year, consulting firm McKinsey & Co. drew fire from when it stated 30% of respondents will “definitely” or “probably” stop offering employer-sponsored health insurance after 2014. According to the Deloitte survey, 9% of companies expect to stop offering insurance in the next one to three years.

But U.S. workers’ satisfaction levels with employer-provided health care coverage has risen or remained the same compared to three years ago, according to a survey of employees conducted by the NBGH, a non-profit association of nearly 350 large employers.

The survey found that nearly two in three workers (63%) are very satisfied with health coverage provided by their employer or union. Roughly one-third (35%) are more satisfied with their coverage compared to three years ago, the survey found.

The survey also found that 87% of employees rate health benefits as very important when making a decision about accepting a new job or remaining with their employer. Fewer than 8 in 10 (78%) rate retirement benefits as very important, which is up sharply from 63% in 2007. Only 12% are less satisfied; the remaining 53% say their satisfaction level has remained the same.

Thirty-nine percent of employees rank biometric screenings as a very important health benefit program, followed by exercise programs (31%) and on-site fitness centers (31%). Less healthy respondents give a higher rating to programs in stress management, weight loss, and coaching, programs; however, most employees (68%) do not believe employees should be required to participate in a wellness program to qualify for health insurance. And even more (71%) don’t think employers should charge employees more for health coverage if they don’t meet specific health goals, the report finds.

“Employers continue to make significant investments in the health of their employees, even though the slow recovery has left many employers and the economy struggling,” states NBDH President and CEO Helen Darling. “In the wake of the Supreme Court’s ruling to uphold the health care reform law and a future that will include health exchanges where individuals can shop for and buy insurance, some employers will be carefully weighing their options.

*Modified from article