Archive | Health Care Bill – Washington

Report: Obama administration knew millions would be forced to change insurance

Before the Affordable Care Act became law in 2010, President Barack Obama promised Americans they could keep their health care plans if they liked them. But already hundreds of thousands of citizens are receiving notification that their plans are being canceled because they don’t comply with the new law, and, according to NBC News, the Obama administration has known for at least three years the cancellations were coming.

  • While campaigning for health care reform in 2009, Obama went out of his way to make one thing perfectly clear: If you like your current health care plan, you will be able to keep it. On June 15, 2009, Obama said this: “We will keep this promise to the American people. If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period.”
  • In 2012, he echoed that sentiment, saying, ““If [you] already have health insurance, you will keep your health insurance.”
  • However, many are finding that not to be the case. More than 300,000 cancellation notices have been sent out in Florida, according to Kaiser Health News, and another 180,000 in California. In New Jersey, the number of cancellations tops 800,000, the Star-Ledger reports.
  •  According to NBC News, approximately 50 to 75 percent of the 14 million Americans who buy their health insurance individually should expect to receive a cancellation letter over the next year “because their existing policies don’t meet the standards mandated by the new health care law.” This could result in millions of Americans being forced to purchase different policies, potentially at higher premiums.

So how did the Obama administration know the cancellations would be coming?

  • The Affordable Care Act states that people who had health insurance prior to March 23, 2010 — the day Obama signed the bill into law — will be able to keep those policies even if they don’t meet the requirements of the new law. However, the Department of Health and Human Services tightened that provision so that “if any part of a policy was significantly changed since that date — the deductible, co-pay or benefits, for example — the policy would not be grandfathered,” NBC News reports.
  • Because the market for individual insurance experiences significant turnover, the insinuation is the Obama administration had to have known many policies “grandfathered” in would not qualify for the Affordable Care Act. NBC News reports that the administration knew in 2010 that “more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.”
  • “This says that when they made the promise [that individuals could keep their plans], they knew half the people in this market outright couldn’t keep what they had and then they wrote the rules so that others couldn’t make it either,” Robert Laszewski of Health Policy and Strategy Associates told NBC News.

On Monday, former Obama adviser David Axelrod said on MSNBC’s “Morning Joe” that “most people are going to keep their own plan.” When asked about Axelrod’s admission of “most” as opposed to all, White House spokesman Jay Carney acknowledge that some individual’s plans will be canceled, but countered that the plans they switch to will be better and affordable.

“What the president said and what everybody said all along is that there are going to be changes brought about by the Affordable Care Act to create minimum standards of coverage,” Carney said. “… So it’s true that there are existing health care plans on the individual market that don’t meet those minimum standards and therefore do not qualify for the Affordable Care Act.”

Actually, what the president said back in 2009 was “[the Affordable Care Act] is for people who aren’t happy with their current plan. If you like what you’re getting, keep it. Nobody is forcing you to shift.”

Only now, some who like their plans are being forced, including Laszewski. According to NBC News, he has a so-called “Cadillac plan” — “the best health insurance policy you can buy,” he said — but recently received notice in the mail that it was being canceled.

*Modified from a Yahoo News article

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Some health insurance gets pricier as Obamacare rolls out

Thousands of Californians are discovering what Obamacare will cost them — and many don’t like what they see. Many middle-class Californians with individual health plans are surprised they need policies that cover more — and cost more. Nearly 2 million Californians have individual insurance, and several hundred thousand of them are losing their health plans in a matter of weeks.

These middle-class consumers are staring at hefty increases on their insurance bills as the overhaul remakes the healthcare market. Their rates are rising in large part to help offset the higher costs of covering sicker, poorer people who have been shut out of the system for years. 

  • The 16 million Californians who get health insurance through their employers aren’t affected. Neither are individuals who have “grandfathered” policies bought before March 2010, when the healthcare law was enacted. It’s estimated that about half of policyholders in the individual market have those older plans.
  • All these cancellations were prompted by a requirement from Covered California, the state’s new insurance exchange. The state didn’t want to give insurance companies the opportunity to hold on to the healthiest patients for up to a year, keeping them out of the larger risk pool that will influence future rates.
  • Although recent criticism of the healthcare law has focused on website glitches and early enrollment snags, experts say sharp price increases for individual policies have the greatest potential to erode public support for President Obama’s signature legislation. “This is when the actual sticker shock comes into play for people,” said Gerald Kominski, director of the UCLA Center for Health Policy Research. “There are winners and losers under the Affordable Care Act.”
  • Fullerton resident Jennifer Harris thought she had a great deal, paying $98 a month for an individual plan through Health Net Inc. She got a rude surprise this month when the company said it would cancel her policy at the end of this year. Her current plan does not conform with the new federal rules, which require more generous levels of coverage. Now Harris, a self-employed lawyer, must shop for replacement insurance. The cheapest plan she has found will cost her $238 a month. She and her husband don’t qualify for federal premium subsidies because they earn too much money, about $80,000 a year combined.
  • Middle-income consumers face an estimated 30% rate increase, on average, in California due to several factors tied to the healthcare law. Some may elect to go without coverage if they feel prices are too high. Penalties for opting out are very small initially. Defections could cause rates to skyrocket if a diverse mix of people don’t sign up for health insurance.

Pam Kehaly, president of Anthem Blue Cross in California, said she received a recent letter from a young woman complaining about a 50% rate hike related to the healthcare law. “She said, ‘I was all for Obamacare until I found out I was paying for it,'” Kehaly said.

Blue Shield of California sent termination letters to 119,000 customers last month whose plans don’t meet the new federal requirements. About two-thirds of those people will experience a rate increase from switching to a new health plan, according to the company.

HMO giant Kaiser Permanente is canceling coverage for about half of its individual customers, or 160,000 people, and offering to automatically enroll them in the most comparable health plan available.

Peter Lee, executive director of Covered California, said the state and insurers agreed that clearing the decks by Jan. 1 was best for consumers in the long run despite the initial disruption. Lee has heard the complaints — even from his sister-in-law, who recently groused about her 50% rate increase.

“People could have kept their cheaper, bad coverage, and those people wouldn’t have been part of the common risk pool,” Lee said. “We are better off all being in this together. We are transforming the individual market and making it better.”

Lee said consumers need to consider all their options. They don’t have to stick with their current company, and higher premiums are only part of the cost equation. Lee said some of these rate hikes will be partially offset by smaller deductibles and lower limits on out-of-pocket medical expenses in the new plans.

Still, many are frustrated at being forced to give up the plans they have now. They frequently cite assurances given by Obama that Americans could hold on to their health insurance despite the massive overhaul.

“All we’ve been hearing the last three years is if you like your policy you can keep it,” said Deborah Cavallaro, a real estate agent in Westchester. “I’m infuriated because I was lied to.”

Supporters of the healthcare law say Obama was referring to people who are insured through their employers or through government programs such as Medicare. Still, they acknowledge the confusion and anger from individual policyholders who are being forced to change.

Cavallaro received her cancellation notice from Anthem Blue Cross this month. The company said a comparable Bronze plan would cost her 65% more, or $484 a month. She doubts she’ll qualify for much in premium subsidies, if any. Regardless, she resents losing the ability to pick and choose the benefits she wants to pay for. “I just won’t have health insurance because I can’t pay this increase,” she said.

A number of factors are driving up rates. In a report this year, consultants hired by the state said the influx of sicker patients as a result of guaranteed coverage was the biggest single reason for higher premiums. Bob Cosway, a principal and consulting actuary at Milliman Inc. in San Diego, estimated that the average individual premium in 2014 will rise 27% because of that difference alone.

Individual policies must also cover a higher percentage of overall medical costs and include 10 “essential health benefits,” such as prescription drugs and mental health services. The aim is to fill gaps in coverage and provide consumers more peace of mind. But those expanded benefits have to be paid for with higher premiums.

The federal law also adjusts how rates are set by age, a change that gives older consumers a break and shifts more costs to younger people. Rates by age can vary by only 3 to 1 starting next year as opposed to 6 to 1 in some cases now in California. People in their 20s just starting their careers may earn so little they qualify for subsidies. But that might not be the case for consumers who are slightly older and earning more.

“It has the effect of benefiting people in their 50s and 60s and shifting costs to people in their 20s and 30s,” said Patrick Johnston, president of the California Assn. of Health Plans. “Benefits are being increased for all, but it’s not government subsidies for all. Some will pay more.”

Rates would be going up regardless of changes from the healthcare expansion. The average individual premium will climb 9% next year because of rising healthcare costs and increases in medical provider reimbursement, according to Milliman’s estimates.

Some consumer groups have questioned whether insurers are inflating their rates under the guise of the healthcare law changes.

“We believe the prices are higher than they should be,” said Jamie Court, president of Consumer Watchdog, a Santa Monica advocacy group. “This is giving a bad name to the Affordable Care Act.”

State regulators checked the insurance companies’ math and underlying cost projections for next year, but they don’t have the authority to deny increases. Under federal rules, insurers can be ordered to issue rebates if they don’t spend a minimum amount of every premium dollar on customers’ medical care.

“The rates aren’t going up because insurance companies are pocketing more money,” Lee said. “That is what it takes to pay the claims and deliver the healthcare.”

*Modified from a LA Times.com article

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Why Obama Should Be Freaked Out Over Obamacare

President Obama said Monday he’s “frustrated” by the disastrous launch of an online computer marketplace for Obamacare. It’s worse than we know, this is the easy part, and millions of Americans could be hurt.

Here are five reasons why frustration isn’t enough. He should be frightened.

  • 1. It’s worse than his team has let on. The White House has tried to position the failed first days of Obamacare as mere hiccups caused by the site’s popularity. Obama called them “kinks.” An administration spokesman told the Washington Post on Sunday that the “main driver of the problem is volume.” This is intentionally misleading.

The White House has heard complaints from insurance companies, consumers, and health policy experts about issues embedded deeply in the online system. For example: inaccurate information provided to people about federal tax credits; low-income people erroneously told they don’t qualify for Medicaid; and insurance companies getting confusing information about who has signed up.

The administration refuses to say how many people have enrolled through the federal exchange, the key metric for determining how well the online service is working in states that didn’t set up their own exchanges. There are two possible explanations for the Obama administration’s unconscionable lack of transparency. Their process is so screwed up that they don’t have the data, which would be embarrassing. Or they have the data – and it’s embarrassing.

  • 2. This is the easy part. Finding and motivating people to take action online is the founding strength of Team Obama. This is what they do best. Managing a complex law is a different matter, and it’s fair to question whether the president and his team are up to it.

How do you convince healthy young Americans to pay for insurance they may not need in order to fund the program? Do companies shed workers and working hours to avoid coming under the law? Are people with cheap catastrophic plans forced to pay more in the exchanges? Tricky questions likes these will soon make the hard art of website design look like fingerpainting. “The online federal health care exchange, the heart of the Obamacare project, is such a rolling catastrophe that it may end up creating a major policy fiasco immediately rather than eventually,” wrote Ross Douthat in a New York Times column titled, “Obamacare, Failing Ahead of Schedule.”

  • 3. It reflects poorly on the president. Nobody expects the chief executive to be reviewing computer code or hosting East Room “hackathons.” But this falls on him. The CEO of a corporation or country is uniquely responsible for making sure the team is on task, and he or she is ultimately responsible if it’s not. In Obama’s case, did he demand thorough updates on the progress of the site? If so, did he ask the right questions? Did he put the right people on the job in the first place? Given the horrid first days of Obamacare, the answer to at least one of those questions must be “no.” 
  • 4. It reflects poorly on government. The public’s faith in government is at a record low, just as Obama is fighting Republicans on several fronts over the size and power of the federal bureaucracy. His administration needs to rapidly improve the online exchanges to stand any chance of convincing, say, young Americans to pay for insurance they don’t think they need. Beyond Obamacare, the Democratic Party’s reputation for competency is as stake.  The cost of the site is already $394 million, a massive amount compared to private-sector CMS work, and sure to grow.
  • 5. It could hurt Americans. For decades, politicians in both parties pledged to ease one of the leading causes of anxiety in the post-industrial age, the lack of affordable health care. Nearly 50 million Americans are uninsured, or about 15.4 percent of the population. Millions more are underinsured. Obamacare, enacted three years ago over the objections of Republicans, may or may not be the answer. But, as the White House likes to remind Republicans, it’s the law and it deserves a shot.

“The Affordability Care Act is not just a website,” Obama said Monday, “it’s much more.” True to a point, but the website is critical to the law’s purpose: helping millions of Americans bargain for better health care. Dismissing the extent of the problem and reminding voters that Republicans fought the law — which is essentially all Obama did in his Rose Garden remarks — is a deflection, which shouldn’t be confused with implementation or governing.

*Modified from a NationalJournalonline.com article

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Are they signing up for Obamacare, or for Medicaid (MediCal)?

How many people have tried to sign up for Obamacare? How many have completed the process? Those numbers are important, but let’s keep something else in mind here — there’s another important number that a lot of publications are failing to separate out. That is, how many people are enrolling in the private insurance plans within the Obamacare exchanges — as opposed to those applying who report very low incomes and get steered into the Medicaid program?

  • In terms of getting more people insured, it might seem like a minor detail. But the private insurance exchanges, a centerpiece of Obamacare, need a very large number of people to sign up if they are to be viable insurance pools. By the Obama administration’s estimate, they need about 7 million people to sign up for the exchanges nationwide. (They also estimate they need 2.7 million of those to be young/healthy types, a separate but related issue.) There is a separate goal of enrolling another 8 million poor people in Medicaid.
  • Yesterday, The Washington Post suggested that at least 185,000 people have signed up for Obamacare:. That sounds promising for the program even if it’s still well short of the pace needed to meet the goals. And then Oregon has just reported 56,000 enrollments. So isn’t everything going just fine?
  • In fact, no. When you see state enrollment numbers, you have to ask yourself this question: How many of those people are actually becoming Obamacare private insurance exchange customers, as opposed to people who (1) were always eligible but are just signing up for Medicaid for the first time, and (2) people who are newly eligible for Medicaid under the expanded coverage thresholds in some states?
  • In Oregon, that 56,000 number you’re hearing today is all Medicaid. Their online exchange doesn’t even work yet. Something similar is happening in many other states as well. Minnesota, for example, said it had 3,800 applicants. But when you scratch the surface, only 406 of these are Obamacare exchange applicants — again, most of the signups were low-income customers who were steered to Medicaid instead.  
  • California, has put 600,000 new people on Medicaid, but their last hard number of actual, completed applications for the exchanges was under 17,000. That’s over a week old, but I’m still skeptical when I see them say that 100,000 “are in some stage of applying for insurance on the marketplaces.” Why all those weasel words? Have those people completed applications — in which case California is doing great — or have they merely entered their zip code and started looking at plans? California may not release any reliable numbers on their exchange enrollment until next year.
  • Are these numbers going to add up to viable health insurance exchanges? A very sober assessment yesterday on the Corner, noting among other things that the slow trickle of signups, from the insurers’ perspective, is a true nightmare and even worse than if no one was signing up at all. If only “highly motivated consumers” are spending the hours it takes to get through right now, the exchanges are filling up with the people most likely to be very sick or old.

*Modified from a conservativeintel.com article

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Health Website Woes Widen as Insurers Get Wrong Data

Insurers say the federal health-care marketplace is generating flawed data that is straining their ability to handle even the trickle of enrollees who have gotten through so far, in a sign that technological problems extend further than the website traffic and software issues already identified. Emerging errors include duplicate enrollments, spouses reported as children, missing data fields and suspect eligibility determinations, say executives at more than a dozen health plans.

  • The latest round of problems has emerged after a technical bottleneck that blocked many potential customers from accessing the marketplace began to clear this week. People familiar with the development of the exchange said some technical problems improved this week.
  • HHS, which is running all or part of the marketplaces in 36 states, has repeatedly declined to answer specific questions about its handling of the rollout, including specific glitches, enrollment figures, or its plans to fix the problems. Health-department officials have pressured insurers to refrain from commenting publicly about the problems, according to executives at four health plans, who asked not to be named. The HHS declined to comment.
  • Of 209,000 users who began to register on healthcare.gov on Monday or Tuesday of this week, just over one-quarter finished the process, according to an estimate made by the analytics firm comScore for The Wall Street Journal. In the first week, only 10% did so. The estimates are based on a sampling of Internet users tracked by the company.
  • As more of those users attempted to sign up for plans this week, insurers began noticing problems with enrollment data. For now, they say they are largely able to manually correct the errors. But as enrollment increases—up to 7 million consumers are expected to sign up in the next 5½ months—that may not be possible, they worry.
  • After realizing that some applications listed up to three spouses in a single family, Blue Cross & Blue Shield of Nebraska, which has about 50 health-law enrollees, had to “stop those enrollments from going through the automated process,” said Matt Leonard, the insurer’s sales manager. “It takes an automated process and turns it into a manual process,” he said.
  • Sioux Falls, S.D.,-based Avera Health Plans has called each of its 21 incoming customers to make sure the data are correct. As consumers struggle to navigate healthcare.gov, some health-plan executives worry that only the sickest—those who most expect to need insurance—will persist in seeking coverage. If younger consumers who are on the fence about buying coverage find the process too onerous, insurers may end up with too few healthier members to offset the costs of less-healthy enrollees.
  • Tara Seidenberg, a 48-year-old paralegal from suburban Houston with multiple sclerosis, says she is likely to put up with all kinds of hurdles to buy coverage. After days of failed attempts to sign up on healthcare.gov, she is taking a break to wait for the glitches to resolve. She takes medications that cost $4,600 a month and her current coverage won’t be available next year. “I’m pretty much guaranteed to try it again,” Ms. Seidenberg said.

*Modified from a WSJ.com article

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Obamacare: Who will ignore law’s requirements?

Millions of Americans may be wrestling with computer glitches to try to sign up for Obamacare — but many people eligible just won’t bother and will pay a price for it. Some will flout the mandate to buy coverage on ideological grounds, a health insurance version of civil disobedience.

  • Some will opt for the penalty because it’s cheaper than paying for insurance, even with subsidies — as long as they don’t get sick and have to pay their own medical bills. And some are so confused about the president’s health care law that they may not even realize they have to pay a penalty — or a tax, as the Supreme Court called it — until they get slapped with the fine when they file their 2014 tax returns. And sign-up rates may be affected, too, if the technical problems on the exchange websites persist.

The new health exchanges need younger and healthier people to balance out the risk and prevent spiraling insurance costs. The mandate is one way of nudging them in. Here’s a look at who may opt out — and why they’ll do it.

The Card-Burners

  • In reality, there are no “Obamacare cards,” but some conservative groups, notably FreedomWorks, are using the imagery to promote resistance to the law, especially among younger and healthier people. “My guess is they need about 40 percent of the people in the exchanges to be young, healthy adults under 35,” Dean Clancy, vice president of public policy for FreedomWorks, said in an interview. “If they don’t get that, the premiums will go up in the second year. Insurance companies may back out because they can’t get enough people to sign up, … and the whole thing will collapse.”

The Calculators

  • Most people who sit out Obamacare will be motivated by math, not politics. These people — mostly the so-called young invincibles — would rather take their chances that they won’t need costly health care, pay the 95 bucks and not spend money on insurance. “The main reason the people will skip the exchange is not ideological but financial,” he said. “This sticker shock will be our best friend in the fight,” he said, referring to the cost of insurance in the exchanges.
  • Pro- and anti-Obamacare forces agree that much of people’s decisions on whether to sign up will boil down to dollars and cents. Individuals won’t know until they check out the exchanges — and access the troubled websites — exactly what their particular coverage options are and what those would cost.

The Confused

  • Many experts, including people interviewed at Intuit and H&R Block, expect that a large chunk of the people who pay the tax just won’t know the rules. “I would say a huge portion of the population is confused or ignorant of what will happen,” Clancy said. “I think a lot of people will drift along passively, unaware that the mandate applies to them.”

What Next?

  • The $95 penalty number is well-known — but it’s only part of the story. It’s actually $95 or 1 percent of taxable income, whichever is more. (The income penalty would be based on earnings over the so-called filing threshold — the amount earned before someone owes taxes.) For someone making $40,000 with standard deductions, it would mean about $300 more in taxes (or $300 less of a refund).
  • “I think that the $95 has been really well communicated, … but what has not been communicated as well is the 1 percent, and that is what we heard from clients this year and was really eye-opening,” said Meg Sutton, senior adviser on tax and health care services at H&R Block. By 2016, the tax will be higher — $695 or 2.5 percent of income, whichever is more.
  • The CBO broke down its projection of 6 million penalty payers by income. About 30 percent will have incomes too high for federal subsidies. Forty percent will have incomes between 200 percent and 400 percent of the federal poverty line, which makes them eligible for the middle range of subsidies. The remaining 30 percent will make less than 200 percent of poverty and would qualify for the highest subsidies — but low-income groups can be hard to reach and skeptical of government assistance.
  • “I think a lot of people will factor in things like, ‘Well, I ought to have health insurance,’ or, ‘I have kids and want to make sure they’re covered.’ … Or, ‘Oh I haven’t had health insurance for years, but I’m getting older and having health problems,’” Intuit’s Williams said. “So you can envision all sorts of rationales that economists may or may not get to that are personal. … All of that is an art, not a science.

*Modified from a Politico.com article

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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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