Archive | Health Care Bill Impact on Business

Five Things To Watch in Health Care in 2013

California Healthline Contributing Editor by Dan Diamond –

December 12, 2012:

“Prediction is indispensable to our lives,” forecaster extraordinaire Nate Silver writes in his new book, “The Signal and the Noise.” Every day, whether wearing a raincoat to work or setting aside funds for future spending, “we are making a forecast about how the future will proceed — and how our plans will affect the odds for a favorable outcome.”

In health care, the mix of ever-shifting technologies, laws and competitive landscape means that many patients’ lives (and industry dollars) rest on whether providers and regulators can make the right bets. And some years, the industry’s direction is relatively easy to predict.

For example, when “Road to Reform” did a similar forecasting exercise last year, the 2012 signposts were clear. March’s Supreme Court case. The November election.

What will be significant in 2013 is a bit murkier, though several major developments await in the months ahead. A slew of ACA-related provisions are slated to take effect, with new taxes and programs like the Bundled Payments for Care Improvement Initiative slated to come online. Both parties continue to discuss entitlement reforms, which could include raising the Medicare eligibility age. The Independent Payment Advisory Board may submit its first draft spending control proposal.

Here are five broader trends that industry observers are watching.

Premium Growth

The Affordable Care Act was supposed to help tamp down health care costs, and some supporters have suggested (possibly prematurely) that the law has been responsible for a slowdown in health spending growth.

But average Americans haven’t seen much of a difference yet. A new analysis released on Wednesday found that workers’ spending on premiums swelled by 74% between 2003 and 2011.

And while the ACA contains measures to control premiums — like new rules on insurer oversight and administrative spending — observers don’t expect any immediate relief.

“Hold onto your hat,” consultant Robert Laszewski warns. Having spoken with a number of insurers in the individual and small group markets, Laszewski says to “expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms.”

Those premium hikes may disproportionately hit people in their 20s and 30s, given new regulations that will narrow the difference in health insurance rates between younger and older consumers.

They also allow opponents of the ACA to score political points. The ongoing rise in premium costs “breaks a promise made by the president to lower premiums for families by $2,500,” according to Rep. Phil Roe (R-Tenn.).

Employer Decisions

One of the most significant industry questions post-ACA: Will employers continue to provide traditional health benefits for their workers, drop coverage or adopt new models in hopes of controlling spending?

It’s been hard to get a clear answer, partly because firms have been slow to announce their changes, fearing public backlash. “Road to Reform” recently reviewed a slew of employer efforts to control benefit costs, such as possibly shifting more full-time workers into part-time arrangements, and the accompanying critical news reports.

One of those companies was Darden Restaurants, which has since clarified that it would not be modifying workers’ hours.

“The program was only a test,” Darden spokesperson Matt Kobussen tells California Healthline, and “none of [the company’s] current full-time employees, hourly or salaried, will have their full-time status changed as a result of health care reform.”

But less-public changes to benefit design and provision are well in the works, at Darden and elsewhere. For example, the restaurant company is among several major firms exploring whether using defined contribution — where employers pay a fixed amount into employees’ health plans and allow workers to choose their coverage from an online marketplace — would be a more cost-effective way to provide health coverage.

Exchange Implementation

While HHS moved the deadline for states to decide whether they’re operating their own health insurance exchange, it’s kept the Oct. 1, 2013 deadline for all exchanges to begin enrolling consumers. And most observers agree: It will be a sprint to hit that deadline, especially with more states opting to let the government set up the model.

“Will the [federal government] be ready to provide an insurance exchange in all of the states that don’t have one on Oct. 1, 2013?” Laszewski asks.

“I have no idea. And neither does anyone else I talk to … We only hear vague reports that parts of the new federal exchange information systems are in testing.”

Merger and Integration Activity

The case doesn’t carry the weight of Florida v. Sebelius, but FTC v. Phoebe Putney Health System — and FTC v. ProMedica, for that matter — reflects the broad tension between regulators and providers.

In both lawsuits, FTC is attempting to prevent provider consolidation that the agency says would lead to anti-competitive behavior and higher prices for patients. And victories in those cases would further embolden FTC to intervene in merger activity, lawyers tell “Road to Reform.”

But hospitals, physicians and other providers say that they must move into new arrangements in hopes of navigating the changes wrought by the ACA, which is intended to reward more integration and care networks.

Comparative Effectiveness Research

While many experts polled by “Road to Reform” highlighted some of the ongoing policy issues that will spill into next year — from states’ decisions on expanding Medicaid to “fiscal cliff” negotiations — one pointed to potential changes in care quality as a top 2013 priority.

“I’m thinking a lot about” the Patient-Centered Outcomes Research Institute, economist Austin Frakt tells California Healthline.

“Comparative effectiveness research is far more important than most of the tinkering that gets proposed (like raising the Medicare age),” Frakt adds.

But is PCORI properly designed to help transform health care, or is it just another pool of research funding? As Michael Millenson writes, the institute is slated to spend $300 million on patient-centered outcomes research next year, which could make it a major player in funding new quality initiatives. But PCORI’s designers intentionally tamped down, worried that too much focus on “comparative effectiveness” would be seen as prioritizing “cost-effectiveness,” and even rationing.

“PCORI is the offspring of a shotgun marriage” between regulators who favor government-led reforms and those who are skeptical of them, Millenson concludes. “[And] no one is quite sure yet what this child will be once it grows up.”

Looking Forward

As forecasts go, all observers that “Road to Reform” talked to agreed: It will be another fast-paced year for the industry.

Of course, there’s always this maxim from expert prognosticator Silver: “It is amusing to poke fun at the experts when their predictions fail.”

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Aetna CEO Sees Obama Health Law Doubling Some Premiums

Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna’s chief executive officer said.

While subsidies in the law will shield some people, other consumers who make too much for assistance are in for “premium rate shock,” Mark Bertolini, who runs the third-biggest U.S. health-insurance company, told analysts yesterday at a conference in New York. The prospect has spurred discussion of having Congress delay or phase in parts of the law, he said.

“We’ve shared it all with the people in Washington and I think it’s a big concern,” the CEO said. “We’re going to see some markets go up as much as as 100 percent.”

Bertolini’s prediction is at odds with Congressional Budget Office estimates that the law will have little effect on small and large-employer plans and the Obama administration’s projections that middle-class families will actually save money. The 2010 law is expected to extend health care to about 30 million people who otherwise couldn’t get insurance, paid for by new taxes and fees on companies and wealthier individuals.

Those taxes will make coverage more expensive for insurers, as will other provisions such as a ban on discriminating against people with pre-existing medical conditions, Bertolini said. Premiums are likely to increase 25 percent to 50 percent on average in the small-group and individual markets, he said, citing projections by his Hartford, Connecticut-based company.

High Estimate

The one-time jump in rates also includes increases in costs that would come even without the law, Bertolini said.

“That just seems silly,” said Gary Claxton, a vice president at Kaiser Family Foundation, aMenlo Park, California- based nonprofit that studies health issues. “I can’t imagine anything going on in the small-group market that would change the average premium that much. On the individual market, there’s arguments for things changing, but those magnitudes seem high.”

The Obama administration said last year that “middle-class families” buying insurance through the law’s new online exchanges may save as much as $2,300 a year starting in 2014. Nick Papas, a White House spokesman, declined to comment on Bertolini’s predictions.

The CBO estimated in 2009 that the law will increase premiums 10 percent to 13 percent for individuals and have little effect on small and large-employer plans. After the subsidies are factored in, individual bills will go down by about 60 percent, the agency predicted.

About 43 percent of people who buy on the exchanges, or individual markets outside of them, won’t be eligible for subsidies, according to the report. They would see premium increases “somewhat less” than 10 percent to 13 percent, CBO predicted.

*Modified from a Bloomberg article

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Business That Drop Health Care Coverage Could Face Backlash

Many U.S. businesses — particularly those that are small or primarily depend on low-wage workers — are considering whether to stop providing health coverage to their employees and instead pay penalties under the Affordable Care Act, a move some experts say could result in a worker backlash, Bloomberg reports.

Background

Under the ACA, businesses with at least 50 workers beginning in 2014 must pay a penalty of $2,000 per employee if they do not provide affordable coverage to their employees. Meanwhile, the average annual premium for family coverage is expected to cost $12,000 in 2014, of which employers typically cover 80%, or about $9,600, according to estimates from Towers Watson.

Reasons To Continue Providing Insurance

Mercer partner Tracy Watts said that although it might seem like an easy decision for such employers to forgo providing coverage, companies have several compelling reasons to continue providing insurance, including:

 

  • Using the coverage as a recruitment tool
  • Keeping workers healthy
  • The fear of backlash from higher-earning employees whose out-of-pocket insurance costs could go up

 

If their work-based coverage is dropped, low-wage workers might pay lower premiums for health insurance by purchasing coverage through the ACA’s insurance exchanges. However, those whose incomes are too high to qualify for federal subsidies would pay more, according to Randall Abbott, a senior consultant at Towers Watson.

In addition, while health coverage is tax deductible for employers, the $2,000 penalty is not. Further, workers who are forced to find their own health coverage might expect additional compensation, and wages also are not tax deductible, Abbott said.

According to a survey by Mercer, just 6% of businesses are planning to drop health coverage by 2014, and only 9% of retail and hospitality businesses are likely to take that step.

Meanwhile, the Congressional Budget Office in July estimated that the ACA would result in a loss of benefits for 2.5% of the U.S.’s 161 million employees, or about four million individuals (Nussbaum/Wayne, Bloomberg, 12/05)

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IRS aims to clarify investment income tax under healthcare law

(Reuters) – The Internal Revenue Service has released new rules for investment income taxes on capital gains and dividends earned by high-income individuals that passed Congress as part of the 2010 healthcare reform law.

The 3.8 percent surtax on investment income, meant to help pay for healthcare, goes into effect in 2013. It is the first surtax to be applied to capital gains and dividend income.

The tax affects only individuals with more than $200,000 in modified adjusted gross income (MAGI), and married couples filing jointly with more than $250,000 of MAGI.

The tax applies to a broad range of investment securities ranging from stocks and bonds to commodity securities and specialized derivatives.

The 159 pages of rules spell out when the tax applies to trusts and annuities, as well as to individual securities traders.

Released late on Friday, the new regulations include a 0.9 percent healthcare tax on wages for high-income individuals.

Both sets of rules will be published on Wednesday in the Federal Register.

The proposed rules are effective starting January 1. Before making the rules final, the IRS will take public comments and hold hearings in April.

Together, the two taxes are estimated to raise $317.7 billion over 10 years, according to a Joint Committee on Taxation analysis released in June.

To illustrate when the tax applies, the IRS offered an example of a taxpayer filing as a single individual who makes $180,000 in wage income plus $90,000 from investment income. The individual’s modified adjusted gross income is $270,000.

The 3.8 percent tax applies to the $70,000, and the individual would pay $2,660 in surtaxes, the IRS said.

The IRS plans to release a new form for taxpayers to fill out for this tax when filing 2013 returns.

The new rules leave some questions unanswered, tax experts said. It was unclear how rental income will be treated under the new rules, said Michael Grace, managing director at Milbank, Tweed, Hadley & McCloy LLP law firm in Washington.

“The proposed regulations surely will increase tax compliance burdens for individuals,” said Grace, a former IRS official. “There’s clearly some drafting left to be done.”

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Obama Administration Releases Three Proposed ACA Rules

On Tuesday, the Obama administration proposed three rules outlining how provisions under the Affordable Care Act would work, the Washington Post reports.

The three rules — one that prohibits insurers from discriminating against individuals with pre-existing conditions, another that establishes essential health benefits, and a third that expands employer-based wellness programs — are not yet final and will be open for comment until Dec. 26 (Aizenman, Washington Post, 11/20).

Proposed Rule To Prohibit Insurers From Discriminating Against Certain Patients

HHS proposed a rule implementing an ACA provision that prevents insurers from discriminating against individuals with pre-existing or chronic conditions.

The rule would prevent insurers from denying coverage to patients with pre-existing or chronic conditions. It also would prevent insurers from charging higher premiums to certain beneficiaries because of current or past insurance programs, gender, occupation and industry or employer size.

However, the rule would allow insurance companies to vary premiums — within limits — based on age, tobacco use, family size and geography (HHS release, 11/20). For example, insurers would be able to charge elderly individuals up to three times more than younger customers (Baker, “Healthwatch,” The Hill, 11/20).

According to HHS, the rule targets 50 million to 129 million U.S. residents who have conditions that insurance companies have cited in coverage denials or insurance cost increases (Wayne, Bloomberg, 11/20).

The rule also requires states to establish a single statewide risk pool for individual and small employer markets, unless a state opts to combine the two pools. Premiums and yearly rates would be based on the entire pool. In addition, the rule calls for a catastrophic plan in the individual market for young adults and individuals who cannot find affordable coverage (Zigmond, Modern Healthcare, 11/20).

Proposed Rule To Establish Essential Health Benefits

A second proposed rule delineates an ACA provision that creates essential health benefits for plans in the individual and small group markets, National Journal reports (Sanger-Katz, National Journal, 11/20).
Specifically, the rule ties essential benefits to a state’s benchmark plan, including the state’s largest small group plan, and must include items and services in at least the following 10 categories:

  1. Ambulatory patient services;
  2. Emergency services;
  3. Hospitalization;
  4. Laboratory services;
  5. Maternity and newborn care;
  6. Mental health and substance use disorder services;
  7. Pediatric services;
  8. Prescription drugs;
  9. Preventive and wellness services and chronic disease managements; and
  10. Rehabilitative services and devices (Fox, NBC News, 11/20).

Most states are using the benefits provided by the largest health plan in the state’s small-group insurance market as a benchmark. However, the rule requires insurers to provide additional benefits, including dental care and vision services for children, mental health and drug misuse treatment, and “habilitative services” for individuals with conditions such as autism or cerebral palsy.

HHS’ proposed rule goes beyond the informal guidelines issued last year by expanding comprehensive prescription drug coverage to include at least two drugs in each therapeutic class (Pear, New York Times, 11/20).

The proposed rule also addresses the actuarial value component of the essential health benefits, which is the percentage of the total average costs for benefits that a plan covers.

In 2014, a “bronze” plan must cover 60% of all covered benefits, a “silver” plan must cover 70%, a “gold” plan must cover 80% and a “platinum” plan must cover 90%.

The rule would allow plans to be within two percentage points of the standard. For example, a silver plan could cover 68% of the benefits (Modern Healthcare, 11/20).

Proposed Rule To Establish, Expand Wellness Programs

HHS, the Department of Labor and the Treasury Department proposed a rule that would establish and expand workplace wellness programs that promote health and control health spending, Modern Healthcare reports (Modern Healthcare, 11/20).

The rule allows employers to award employees as much as 30% of their health coverage costs for participating in wellness programs, an increase from the current 20%. Meanwhile, workers that enroll in smoking cessation programs could earn back as much as 50% of their coverage costs, HHS said.

The rule also requires employer-based wellness programs to provide alternative ways to qualify for rewards for individuals with special medical conditions (Viebeck, “Healthwatch,” The Hill, 11/20).

Insurers, Executives React To Rules

Meanwhile, Karen Ignagni, president and CEO of America’s Health Insurance Plans, in a statement on Tuesday said the “additional flexibility” on deductible limits is a “positive step.” However, she added, “[W]e remain concerned that many families and small businesses will be required to purchase coverage that is more costly than they have today” (Washington Post, 11/20).

Although insurance executives likely will not be satisfied with every decision HHS makes, Caroline Pearson, director at Avalere Health, said that “clear guidance and certainty is better than anything else” (Sanger-Katz, National Journal, 11/20).

In regard to the proposed increased access to prescription drugs, Stephen Finan, a health economist at the American Cancer Society, said the rule is an “improvement” from last year but “still does not guarantee that cancer patients will have access to all the major cancer drugs they need” (New York Times, 11/20).

Details About Federal Health Insurance Exchange Still Unknown

Meanwhile, states still are waiting for details about how federally run insurance exchanges will operate, CQ HealthBeat reports. During a press call about the rules on Tuesday, Gary Cohen, a senior official at CMS, said the agency “will be putting out additional guidance on the federally facilitated exchange in the near future.”

Cohen noted that in a federally run exchange, decisions about cost and coverage options will be determined by the government, not the state. He added that consumers “will have the same access to quality affordable care whether the state is running the exchange or whether the federal government is running the exchange” (Reichard, CQ HealthBeat, 11/20).

 

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Sears Switches to Defined Contribution & Private Exchange Model

Sears Holdings Corp. has joined the ranks of thousands of businesses small and large, by announcing it will move to a Defined Contribution model for employee health benefits in 2013. Through the plan, Sears will allocate a fixed dollar amount for employees and their dependents to purchase health insurance through a private health exchange.

The goal of the shift is to combat the rising cost of providing health benefits to Sears’ 90,000 eligible employees.

The cost per participant under traditional group health plans is on the rise. Employers are also feeling the pinch from minimum requirements such as the minimum percentage of the premium that must be paid by the employer, and the requirement that a minimum percentage of employees join the group plan. If either of those minimums is not met, the entire plan is canceled.

Sears’ Defined Contribution Model

Under the new plan, Sears will be able to cap their monthly health benefits cost per employee by giving a fixed dollar amount (the “defined contribution”) to each employee. Each employee will choose a health insurance plan on the private exchange that works for them, their spouses, and their dependents.

For decades, U.S. employers have been offering a one-size-fits-all plan with benefits that some employees may not need. Defined Contribution gives employees more choice and mitigates an employer’s financial risk from unexpected claims.

About the Private Health Exchange

The states and feds may still be hashing out the details of the state health exchanges, but businesses like Sears are pushing private exchanges forward. Sears employees will now have 15 choices for health insurance instead of the existing 4. Coverage options are available from five different medical insurers.

The objective of providing more choice through an exchange is to create competition and drive prices down for the policyholders.

“The more insurance providers compete, the better,” said Chris Brathwaite, spokesman for Hoffman Estates-based Sears. “I will have an opportunity to shop for a health care provider who meets my medical and my pocketbook needs.”*

Sears has not revealed how much it will allot for employees, but the amount will generally cover the insurance premium of one of the plans under the exchange. Depending on the amount and class of employee, employees could be responsible for paying a portion of the remainder of expenses they incur. All of the available plans provide catastrophic protection and cannot reject people for medical history or pre-existing conditions.

Health Reform and Companies’ Defined Contribution Shift

It is anticipated that more companies will adopt the Defined Contribution healthcare model as they are faced with rising expenses as 2014 nears.

“The best decision for most employers and their employees will be to eliminate their company-sponsored health insurance in favor of a defined contribution HRA solution,” says renowned economist and Zane Benefits founder, Professor Paul Zane Pilzer.

“That’s because employees no longer need employers to purchase quality health insurance, and, starting in 2014, employees earning less than 400% of the FPL (~$92,000 for a family of four) per year who purchase a personal policy will receive a large federal subsidy on their premium if their company doesn’t offer a group plan.”

As a result, all of the following Defined Contribution plans are expected to become mainstream:

  • Health Reimbursement Arrangement (HRA)
  • Medical Expense Reimbursement Plan (MERP)
  • Fixed Contribution Plan
  • Section 105 Plan

Modified from a Zane Benefits Blog 11/20/2012

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Here’s Those Layoffs We Voted For Last Night

Last night’s victory for the President marks the first time since its inception that Obamacare is no longer a what-if; it is the future of health care in America.

It also means a near immediate impact on the economy.  With 20 or so new or higher taxes set to be implemented, ranging from a $123 billion surtax on investment income, through the $20 billion medical device tax, all the way down to the $600 million executive compensation limit, Obamacare will be a nearly unbearable tax burden on the economy.

Who will pay?  The middle-class workforce, of course.

So with another four years for President Obama to look forward to, and the obvious inevitability of Obamacare that this entails, let’s examine the very real jobs that will be lost, and the very real lives that will be affected.

Welch Allyn

Welch Allyn, a company that manufactures medical diagnostic equipment in central New York, announced in September that they would be laying off 275 employees, or roughly 10% of their workforce over the next three years.  One of the major reasons discussed for the layoffs was a proactive response to the Medical Device Tax mandated by the new healthcare law.

Dana Holding Corp.

As recently as a week ago, a global auto parts manufacturing company in Ohio known as Dana Holding Corp., warned their employees of potential layoffs, citing “$24 million over the next six years in additional U.S. health care expenses”.  After laying off several white collar staffers, company insiders have hinted at more to come.  The company will have to cover the additional $24 million cost somehow, which will likely equate to numerous cuts in their current workforce of 25,500 worldwide.

Stryker

One of the biggest medical device manufacturers in the world, Stryker will close their facility in Orchard Park, New York, eliminating 96 jobs in December.  Worse, they plan on countering the medical device tax in Obamacare by slashing 5% of their global workforce – an estimated 1,170 positions.

Boston Scientific

In October of 2009, Boston Scientific CEO Ray Elliott, warned that proposed taxes in the health care reform bill could “lead to significant job losses” for his company.  Nearly two years later, Elliott announced that the company would be cutting anywhere between 1,200 and 1,400 jobs, while simultaneously shifting investments and workers overseas – to China.

Medtronic

In March of 2010, medical device maker Medtronic warned that Obamacare taxes could result in a reduction of precisely 1,000 jobs.  That plan became reality when the company cut 500 positions over the summer, with another 500 set for the end of 2013.

Others

A short list of other companies facing future layoffs at the hands of Obamacare:

Smith & Nephew – 770 layoffs
Abbott Labs – 700 layoffs
Covidien – 595 layoffs
Kinetic Concepts – 427 layoffs
St. Jude Medical – 300 layoffs
Hill Rom – 200 layoffs

  • Beyond the complete elimination of a significant number of American jobs is another looming problem created by the health care law – a shift from full-time to part-time workers.

Sean Hackbarth of Free Enterprise explains:

A JP Morgan economist “points out that 8.3 million people are working in part-time jobs even though they’d prefer full-time work. Unfortunately, because of President Obama’s health care law, the Patient Protection and Affordable Care Act (PPACA), workers in the hotel, restaurant, and retail industries could be pushed into part-time jobs working less than 30 hours per week.”

“Under the health care law, if a company has more than 50 “full time equivalent” workers, a combination of full and part-time employees, but doesn’t offer “affordable” coverage that meets the government’s minimum value standard, the company will have to pay a penalty. This penalty is determined by the number of full-time employees minus 30 full-time employees. So to reiterate a very important point: part-time workers are not part of the penalty formula. The health care law creates a perverse incentive to hire part-time versus full-time workers.”

Tangible examples of Obamacare causing a reduction in full-time workers:

Darden Restaurants

According to the Orlando Sentinel, Darden Restaurants, a casual dining chain best known for their Red Lobster, Olive Garden and LongHorn Steakhouse restaurants, is “experimenting with limiting the hours of some of its workers to avoid health care requirements under the Affordable Care Act when they take effect in 2014”.

JANCOA Janitorial Services

The CEO of JANCOA, Mary Miller, testified to Congress that Obamacare was a “dream killer”, adding that one option she had to consider “is reducing the majority of my team members to part-time employment in order to reduce the amount that I will be penalized.”

Kroger

The American retailer in Cincinnati, Ohio recently was reported to be planning a significant slashing of their hourly workers.  Doug Ross writes:

Operative Faith (a mid-level manager with the company) reveals that Kroger will soon join the ranks of Darden Restaurants and slash the hours of its non-exempt (hourly) workers to avoid millions in Obamacare penalties.

According to the source, Obamacare could result in tens of thousands of Kroger employees being limited to working 28 hours per week.

Summary

This is by no means, meant to be an exhaustive list.  But it is meant to provide examples of real companies, real jobs, and real names, soon to be added to the growing list of employment casualties provided by the inevitable implementation of Obamacare.

*Modified from a Freedom Works article by  By Rusty Weiss on November 07, 2012

 

 

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Could Romney Repeal The Health Law? It Wouldn’t Be Easy

Npr.org, by Julie Rovner – October 30, 2012:You can barely listen to former Massachusetts Gov. Mitt Romney make a speech or give an interview with hearing some variation of this vow:

“On day one of my administration, I’ll direct the Secretary of Health and Human Services to grant a waiver from Obamacare to all 50 states. And then I’ll go about getting it repealed.” That’s what he told Newsmax TV in September, 2011.

But there are two big questions in there. First of all, could a President Romney actually stop the health law in its tracks? And if he did try, what would happen?

First, it turns out that stopping the law may be harder than the law’s opponents realize. For one thing, if he’s elected, Romney can’t just grant waivers letting states ignore the law on his first day as president.

“There are waivers under the law, but not an across-the-board waiver,” said Tom Miller, a lawyer with the conservative American Enterprise Institute. For the record, Miller is an avid opponent of the health law. But he’s also a veteran of Capitol Hill and knows what can and can’t happen.

“You can try anything under the law,” says Miller. But in many cases, “a federal court will usually step in and say ‘you’ve gone a little bit too far.'”

In this case, the part of the law that allows the president to grant states waivers doesn’t actually kick in until 2017. And even the waivers that are allowed require states to cover as many uninsured people as would be covered by the Affordable Care Act.

Health industry consultant Robert Laszewski – also no big fan of the law – says federal courts would likely block a lot of things Romney might try to do unilaterally, like simply cut off funding or tell his staff to stop enforcing it.

“Sure, he can re-write the regulations for example… but fundamentally, he can’t change the law,” he says.

And even rewriting regulations would take months, at best.

Which brings us to the repeal part of Romney’s promise.

If Republicans gain control of Congress, they plan to use a fast-track procedure called budget reconciliation to repeal major chunks of the measure. That’s because budget reconciliation can’t be filibustered and needs only 51 Senate votes rather than the usual 60.

But there are a couple of problems with that, says Laszewski. One is that’s more time-consuming than many people realize.

“Budget reconciliation rules require them to have a budget resolution, and require them to be able to vote out the changes, and that timetable will take him to at least mid-year,” he said.

Indeed, since 1980 Congress has passed 19 budget reconciliation bills; the one that moved fastest got signed into law May 28, 2003. (A few took more than a year to become law.)

Meanwhile, the health law will still be in effect and the clock will still be counting down. So even as Congress may be working to undo the law, he says, states will still face deadlines to put important features in place.

“Every state legislature’s got a decision to make about whether they build an insurance exchange or not,” says Laszewski. “Everyone has sort of treaded water until the election – then we’re go or no go. If Romney’s elected, it’s like – we don’t know what’s going to go or not. And it’s just going to be one hell of a mess.”

And there’s still another complication. It turns out that not all of the law can be undone using the budget process. Things like requiring insurers to accept people with preexisting health conditions would almost certainly need the same 60 votes to undo as they needed to pass in the first place. Laszewski says that could cause problems of its own.

“So now we could be sitting here with reconciliation having stripped out all the money, on January 1 every sick person in America is showing up, getting their guaranteed-issue health insurance, and it’s just going to ravage the insurance pools, drive the cost of insurance way high,” says Laszewski.

That, he says, is a recipe for total chaos.

“We’re playing with gasoline here,” he said. “This is one-sixth of the economy … sitting on the ledge here wanting to know which way we’re going to go.”

Tom Miller of the AEI agrees that key parts of the health care sector have been doing a lot of waiting around for the election — and that given the short timelines, chaos is likely next year no matter who wins.

“If you implement it in its entirety you’ll also cause chaos in the market — would be my rejoinder.

We’re going to have chaos in either case.”

But the law has already put a lot of changes in place. So taking it apart, particularly given the potential legal and legislative difficulties, will be no easy task.

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New Obamacare Tax Form Mandates Americans Report Personal Health ID Info to IRS

Here’s why the IRS will require Americans to disclose their personal health ID information starting in 2014

When Obamacare’s individual mandate takes effect in 2014, all Americans who file income tax returns must complete an additional IRS tax form. The new form will require disclosure of a taxpayer’s personal identifying health information in order to determine compliance with the Affordable Care Act’s individual mandate.

As confirmed by IRS testimony to the tax-writing House Committee on Ways and Means, “taxpayers will file their tax returns reporting their health insurance coverage, and/or making a payment”.

So why will the Obama IRS require your personal identifying health information?

Simply put, there is no way for the IRS to enforce Obamacare’s individual mandate without such an invasive reporting scheme.  Every January, health insurance companies across America will send out tax documents to each insured individual.  This tax document—a copy of which will be furnished to the IRS—must contain sufficient information for taxpayers to prove that they purchased qualifying health insurance under Obamacare.

This new tax information document must, at a minimum, contain: the name and health insurance identification number of the taxpayer; the name and tax identification number of the health insurance company; the number of months the taxpayer was covered by this insurance plan; and whether or not the plan was purchased in one of Obamacare’s “exchanges.”

This will involve millions of new tax documents landing in mailboxes across America every January, along with the usual raft of W-2s, 1099s, and 1098s.  At tax time, the 140 million families who file a tax return will have to get acquainted with a brand new tax filing form.  Six million of these families will end up paying Obamacare’s individual mandate non-compliance tax penalty

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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

 

 

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