Archive | Health Care Bill – Washington

Will New Health Insurance Be Too Expensive for America’s Lowest-Paid?

  • Starting next year, firms with 50 or more full-time equivalent employees will need to offer health insurance to all their workers who average 30 or more hours a week. In addition, employers must not ask employees to contribute more than 9.5% of their income to health-insurance premiums. Otherwise, the employer could face penalties.
  • Chris Angelo, president of a landscaping company in Santa Clarita, Calif., believes most of his low-wage workers will opt out of health coverage. But Chris Angelo, a second-generation owner of the landscaping firm, Stay Green Inc., doesn’t expect a groundswell of enrollments next year from lower-wage workers.
  • While the employees might say they’re interested in employer coverage, “we believe they will opt out,” says Mr. Angelo. His reasoning? “They’d rather have the cash than pay the employee portion of the premium.”
  • He says: “On the surface, it sounds appealing to them. There might be optimism without having all the facts.” Indeed, an employee who earns $10.50 an hour, says he’d love to have insurance, but he can’t afford the estimated $140 monthly cost for his share of the premium next year.
  • For an employee earning $30,000, for instance, a 9.5% salary contribution to the premiums is $2,850 a year. But under the law, the 1% penalty for that same employee who forgoes health insurance is only $300 a year.
  • Experience suggests that employers may struggle to figure out how many of their low-wage workers will opt in for employer coverage in 2014. By the same token, it suggests that many low-wage workers could remain uninsured next year, despite the law’s subsidies and penalties.

“Of course I prefer to have health insurance because I need it for my children, for my family,” says Romérico Herrera, a 48-year-old crewman who earns $11.50 an hour. Mr. Herrera, also speaking in Spanish, says he’s had health insurance through previous employers but hasn’t been insured since he started working at Stay Green two years ago. But Mr. Herrera would like to find out what kind of coverage he would get before signing up for health insurance. He says that he wouldn’t be able to contribute more than $100 a month. “I make so little that [contributing] more would mean working just to pay for insurance,” he said.

Mr. Angelo says he is working with a broker to find a plan that will be as affordable as possible for his workers. As he evaluates different plans, he must also consider his company’s bottom line. For instance, in one scenario, where all 270 employees participate and pay no more than 9.5% of their income to the premiums, it would cost the company $1 million a year—essentially wiping out the company’s profits.

One in three low-wage workers are employed by firms with fewer than 100 employees, according to the National Employment Law Project, an organized-labor-backed advocacy group for low-wage workers. “Employers are in limbo,” says Paul Fronstin, director of Health Research and Education Programs at the Employee Benefit Research Institute in Washington, D.C. “You never know what the low-wage worker’s position is—whether they have other family members who are working, or whether there is another member of the family who has benefits.”

Mr. Angelo says he believes the majority of his low-wage workers will opt out, based on past experience. For instance, the company offers a 401(k) program that most of the workers skip—even though Mr. Angelo offers to match their contributions, up to 4% of their salaries. “It’s been a struggle to get them to participate,” he says.

Also come January, under the law’s individual-mandate provisions, most U.S. residents will be required to have health insurance or pay a penalty. Low-wage earners who can’t afford their employers’ plans may seek coverage through Medicaid, if they are eligible, or through an individual plan available through a government-run exchange.

Alternatively, the workers may forgo insurance altogether and pay the small penalty, which could be their most affordable option. Low-wage workers who forgo employer-sponsored insurance may be able to claim a hardship exemption from the penalty.

Bill Reeder, owner of Campus Cooks in Glenview, Ill., says the insurance plan he intends to offer next year could cost the company $200,000 or $500,000, depending on the number of employees who sign on.Today, Campus Cooks, a food-service firm that operates in sorority and fraternity houses on 20 university campuses in the Midwest and Southeast, doesn’t offer insurance. Mr. Reeder polled his staff recently and found that about half of the staff is interested in an employer-sponsored health plan.

Mr. Reeder is hoping at least 75% will sign on. But he says it could be a challenge to get the chefs, who tend to be younger, healthier and lower-paid, earning between $10 and $20 an hour, to find value in a health-insurance plan when, for most of them, paying the penalty is so much cheaper. “We want the plan to be simple, be compliant and to get people on board,” Mr. Reeder says. “We are grappling with how much we can contribute and make it so everyone can be on the plan.”

*Modified from a WSJ article

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Rate Shock: In California, Obamacare To Increase Individual Health Insurance Premiums By 64-146%

Last week, the state of California claimed that its version of Obamacare’s health insurance exchange would actually reduce premiums. “These rates are way below the worst-case gloom-and-doom scenarios we have heard,” boasted Peter Lee, executive director of the California exchange.

  • But the data that Lee released tells a different story: Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.

Lee’s claims that there won’t be rate shock in California were repeated uncritically in some quarters. “The rates submitted to Covered California for the 2014 individual market,” the state said in a press release, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”

  • Except that Lee was making a misleading comparison. He was comparing apples—the plans that Californians buy today for themselves in a robust individual market—and oranges—the highly regulated plans that small employers purchase for their workers as a group. The difference is critical.

Obamacare to double individual-market premiums

  • If you’re a 25 year old male non-smoker, buying insurance for yourself, the cheapest plan on Obamacare’s exchanges is the catastrophic plan, which costs an average of $184 a month. (That’s the median monthly premium across California’s 19 insurance rating regions.)
  • The next cheapest plan, the “bronze” comprehensive plan, costs $205 a month. On eHealthInsurance.com or Healthinsbrokers.com, the average cost of the five cheapest plans was only $92.
  • For the average 25-year-old male non-smoking Californian, Obamacare will drive premiums up by between 100 and 123 percent. Under Obamacare, only people under the age of 30 can participate in the slightly cheaper catastrophic plan. So if you’re 40, your cheapest option is the bronze plan.
  • In California, the median price of a bronze plan for a 40-year-old male non-smoker will be $261. But, the average cost of the five cheapest plans was $121. That is, Obamacare will increase individual-market premiums by an average of 116 percent.
  • For both 25-year-olds and 40-year-olds, then, Californians under Obamacare who buy insurance for themselves will see their insurance premiums double.

Impact highest in Bay Area, Orange County, and San Diego

  • For each of the state’s 19 insurance regions, Obamacare’s impact on 40-year-olds is steepest in the San Francisco Bay area, especially in the counties north of San Francisco, like Marin, Napa, and Sonoma. Also hard-hit are Orange and San Diego counties.

Spinning a public-relations disaster

How did Lee and his colleagues explain the sleight-of-hand they used to make it seem like they were bringing prices down, instead of up? “It is difficult to make a direct comparison of these rates to existing premiums in the commercial individual market,” Covered California explained in last week’s press release, “because in 2014, there will be new standard benefit designs under the Affordable Care Act.”

  • That’s a polite way of saying that Obamacare’s mandates and regulations will drive up the cost of premiums in the individual market for health insurance.
  • But rather than acknowledge that truth, the agency decided to ignore it completely, instead comparing Obamacare-based insurance to a completely different type of insurance product, that bears no relevance to the actual costs that actual Californians face when they shop for coverage today.

A number of writers did call out California for the apples-to-oranges comparison last week.  These writers point out the useful exercise of showing that even for plans with the same generous benefit package that Obamacare requires, current individual plans are significantly cheaper.

There are many plans on the individual market in California today that offer a structure and benefits that are almost identical to those that will be available on the state’s health insurance exchange next year.

An apples-to-apples comparison for the hypothetical 25-year-old male living in San Francisco and making more than $46,000 a year.

  • Today, he can buy a PPO plan from a major insurer with a $5,000 deductible, 30 percent coinsurance, a $10 co-pay for generic prescription drugs, and a $7,000 out-of-pocket maximum for $177 a month.
  • According to Covered California, a “Bronze” plan from the exchange with nearly the same benefits, including a slightly lower out-of-pocket maximum of $6,350, will cost him between $245 and $270 a month. That’s anywhere from 38 percent to 53 percent more than he’ll have to pay this year for comparable coverage.
  • The comparison offered in the California press release helps make it clear why that is: Obamacare’s new insurance rules. Those rules would certainly help some people—people with pre-existing conditions in the individual market will find it easier to buy coverage for instance—but they will also raise premium costs very significantly.

*Modified from a Forbes Online article

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Insurers limit doctors, hospitals in state-run exchange plans

California’s health insurance rates for a new state-run marketplace came in lower than expected this week, but one downside for many consumers will be far fewer doctors and hospitals to choose from.

  • People who want UCLA Medical Center and its doctors in their health plan network next year, for instance, may have only one choice in California’s exchange: Anthem Blue Cross.
  • Another major insurer in the state-run market, Blue Shield of California, said its exchange customers will be restricted to 36% of its regular physician network statewide.
  • Blue Shield’s exchange network in the Los Angeles area doesn’t include UCLA or Cedars-Sinai. Blue Shield said its statewide network for exchange policies will include about 24,000 physicians, compared with 66,000 doctors in its full preferred provider organization roster.
  • Cedars-Sinai Medical Center, one of Southern California’s most prestigious and expensive hospitals, said it’s not included in any exchange plans at the moment.
  • Health Net Inc., another exchange option in Southern California, said it expects to seek state approval to use its existing network, which includes both UCLA and Cedars-Sinai, for one of its exchange plans.
  • State officials sought to blunt that criticism this week, pointing out that the 13 health insurers selected will offer access to about 80% of California’s practicing physicians and hospitals. Covered California, the state agency implementing the federal healthcare law, said these trade-offs are necessary in many cases to keep premiums reasonable for California’s families.
  • Meanwhile, some insurance agents said it’s hard to judge these proposed prices in the state exchange without knowing what’s on the menu in terms of available providers. “Trying to determine whether these rates are low or high without knowing the provider networks is like trying to tell the value of a car when you can only see the tires — you don’t know if you are looking at a Ferrari or a Yugo.”

*Modified from a Los Angeles Times article

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Like your health care policy? You may be losing it

  • Many people who buy their own health insurance could get surprises in the mail this fall: cancellation notices because their current policies aren’t up to the basic standards of President Barack Obama’s health care law. They, and some small businesses, will have to find replacement plans — and that has some state insurance officials worried about consumer confusion.

Also, it doesn’t seem to square with one of the president’s best known promises about his health care overhaul: “If you like your health care plan, you’ll be able to keep your health care plan.”

  • The National Association of Insurance Commissioners says it is hearing that many carriers will cancel policies and issue new ones because administratively that is easier than changing existing plans.

For the most part, state insurance commissioners are giving insurers the option of canceling existing plans or changing them to comply with new federal requirements. Large employer plans that cover most workers and their families are unlikely to be affected.

  • Seen as consumer safeguards by the administration, the new requirements limit costs paid by policyholders, and also expand benefits. That includes better preventive care, and also improved prescription coverage in many cases. The most important feature may be protection for your pocketbook if you get really sick: The new plans limit copayments and other out-of-pocket costs to $6,400 a year for individuals. “Your costs involve more than your premiums, It’s also what you would have to pay out of pocket if you had actually used your health plan.”
  • Other bumps on the road to the new health care law include potentially unaffordable premiums for smokers unless states act to waive them, a new $63-per-head fee that will hit companies already providing coverage to employees and dependents, and a long-term care insurance program that had to be canceled because of the risk it could go belly up

“You’re going to be forcibly upgraded,” said Bob Laszewski, a health care industry consultant. “It’s like showing up at the airline counter and being told, ‘You have no choice, $300 please. You’re getting a first-class ticket, why are you complaining?'”

Obama’s promise dates back to June of 2009, when Congress was starting to grapple with overhauling the health care system to cover uninsured Americans. Later that summer, public anxieties about changes would erupt at dozens of angry congressional town hall meetings with constituents.

“If you like your health care plan, you’ll be able to keep your health care plan, period,” the president reassured the American Medical Association. “No one will take it away, no matter what.” At the time, some saw the promise as too broad, given that health plans are constantly being changed by the employers that sponsor them or by insurers directly.

Nonetheless, Democrats in Congress devised a complicated scheme called “grandfathering” to try to deliver on Obama’s pledge. It can shield plans from many of the law’s requirements, provided the plans themselves change little. State officials said it has proven impractical in most cases for insurers to “grandfather” plans sold to individuals.

*Modified from an AP article

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Sharp shoppers scuttle Obamacare – The young drop coverage to avoid higher premiums

A recent poll sponsored by the American Action Forum, though, shows that the nuts and bolts of consumer decision-making may be its real Achilles heel. Evidence of these changes was gathered in late March and early April of this year, when the American Action Forum sponsored the first national poll of this demographic, specifically testing what effects various premium increases would have on consumers’ willingness to purchase coverage.

At the heart of Obamacare is the goal of expanded health insurance coverage, and the law as originally passed envisioned coverage for an additional 30 million or so Americans.

Younger Americans are central to this vision of broader insurance coverage.

  • First, they are supposed to participate in insurance coverage, and the mandate and penalty are there to make sure that this comes to fruition.
  • Second, by having the young in the insurance pool with their low health care costs, the insurance offered in the exchanges would be more attractive and affordable to older and sicker Americans. In effect, young Americans are supposed to be both key participants and the piggy bank of the expansion effort.
  • Health insurance is a product, not a social vision. What we know to be true thanks to ample survey and analytic research is that in 2014, Obamacare will cause insurance premiums to rise sharply for the healthy and young. When it comes to products, Americans aged 18 to 40 act like consumers of all ages everywhere: They have a price point, and when the price gets too high, they get busy making changes.
  • Respondents were those who already purchase insurance and had very specific information regarding their monthly premiums and the penalty they would pay if they failed to continue to buy insurance.In this group of current insurance purchasers, only 83 percent will still purchase if premiums rise 10 percent; 65 percent, if premiums rise 20 percent; and only 55 percent, if premiums rise 30 percent. The economic lesson is simple: As premiums rise, eventually, some consumers reach a price point at which they simply stop buying health insurance.

The policy lesson is twofold.

  • First, a law intended to expand coverage will to some extent do exactly the opposite.
  • Second, young Americans are exceedingly rational. If premiums rise 10 percent, 7 percent of those polled would pay the penalty, but then turn around and buy insurance (as the law dictates they must be permitted to do) if they got sick. The fraction rises to 11 percent and 20 percent for the larger premium hikes, respectively.

Choosing the penalty over insurance, or conveniently buying insurance (from the ambulance) just when it is needed, has been caricatured as responses only dreamed up by opponents of Obamacare. Not so, as it turns out. While the respondents are price-conscious consumers, they are not anti-Obamacare.

The poll shows a response to the health care law split more or less right down the middle: 29 percent viewing it favorably, 33 percent unfavorably, and 38 percent “half-and-half.” Within the law, some features are viewed favorably (coverage for pre-existing conditions is a positive for 68 percent), while others are frowned on (55 percent have a negative view of the individual mandate and penalty.)

Obamacare is a controversial law whose provisions have received a mixed public reception. These results are echoed by the sentiments of the 18- to 40 year-olds polled by the American Action Forum. Obamacare is intended to expand insurance coverage by mandating that those same young Americans form a lower-cost insurance pool. This group, however, powerfully undercuts this goal. Behaving like all price-conscious consumers, young Americans will drop their insurance in the face of sharp premium increase

*Modified from a Washington Times article

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Employers Eye Bare-Bones Health Plans Under New Law

Employers are increasingly recognizing they may be able to avoid certain penalties under the federal health law by offering very limited plans that can lack key benefits such as hospital coverage.

  • Benefits advisers and insurance brokers—bucking a commonly held expectation that the law would broadly enrich benefits—are pitching these low-benefit plans around the country. They cover minimal requirements such as preventive services, but often little more. Some of the plans wouldn’t cover surgery, X-rays or prenatal care at all. Others will be paired with limited packages to cover additional services, for instance, $100 a day for a hospital visit.
  • Federal officials say this type of plan, in concept, would appear to qualify as acceptable minimum coverage under the law, and let most employers avoid an across-the-workforce $2,000-per-worker penalty for firms that offer nothing. Employers could still face other penalties they anticipate would be far less costly.
  • Larger employers, generally with more than 50 workers, need cover only preventive services, without a lifetime or annual dollar-value limit, in order to avoid the across-the-workforce penalty. Such policies would generally cost far less to provide than paying the penalty or providing more comprehensive benefits, say benefit-services firms. Some low-benefit plans would cost employers between $40 and $100 monthly per employee, according to benefit firms’ estimates.
  • Administration officials confirmed in interviews that the skinny plans, in concept, would be sufficient to avoid the across-the-workforce penalty. Several expressed surprise that employers would consider the approach.
  • San Antonio-based Bill Miller Bar-B-Q, a 4,200-worker chain, will replace its own mini-med with a new, skinny plan in July and will aim to price the plan at less than $50 a month, about the same as the current policy, said Barbara Newman, the chain’s controller. The new plan will have no dollar limits on benefits, but will cover only preventive services, six annual doctors’ visits and generic drugs. X-rays and tests at a local urgent care chain will also be covered. It wouldn’t cover surgeries or hospital stays.
  • Tex-Mex restaurant chain El Fenix also said it would offer limited plans to its 1,200 workers, covering doctors visits, preventive care and drugs, but not hospital stays or surgery. “What our goal was all along was to make [offering coverage] financially palatable for the company as a whole, so we didn’t do damage and have to let people go or slow down our growth,” said Brian Livingston, chief financial officer of Dallas-based Firebird Restaurant Group LLC, owner of El Fenix.

It is unclear how many employers will adopt the strategy, but a handful of companies have signed on and an industry is sprouting around the tactic. More than a dozen brokers and benefit-administrators in 10 states said they were discussing the strategy with their clients.

“There had to be a way out” of the penalty for employers with low-wage workers, said Todd Dorton, a consultant and broker for Gallagher Benefit Services Inc., a unit of Arthur J. Gallagher & Co., who has enrolled several employers in the limited plans.

Pan-American Life Insurance Group Inc. has promoted a package including bare-bones plans, according to brokers in California, Kansas and other states and company documents. Carlo Mulvenna, an executive at New Orleans-based Pan-American, confirmed the firm is developing these types of products, and said it would adjust them as regulators clarify the law.

The idea that such plans would be allowable under the law has emerged only recently. Some benefits advisers still feel they could face regulatory uncertainty. The law requires employers with 50 or more workers to offer coverage to their workers or pay a penalty. Many employers and benefits experts have understood the rules to require robust insurance, covering a list of “essential” benefits such as mental-health services and a high percentage of workers’ overall costs. Many employers, particularly in low-wage industries, worry about whether they—or their workers—can afford it.

But a close reading of the rules makes it clear that those mandates affect only plans sponsored by insurers that are sold to small businesses and individuals, federal officials confirm. That affects only about 30 million of the more than 160 million people with private insurance, including 19 million people covered by employers, according to a Citigroup Inc. report.

“For certain organizations, it may be an ideal solution to minimize the cost of opting out,” said David Ellis, chief executive of Youngtown, Ariz.-based LifeStream Complete Senior Living, which employs about 350 workers, including low-wage housekeepers and kitchen staff. Mr. Ellis, who was recently pitched a low-benefit plan, said it is one option the firm may consider to lower costs and still comply with the law, he said.

“We wouldn’t have anticipated that there’d be demand for these types of band-aid plans in 2014,” said Robert Kocher, a former White House health adviser who helped shepherd the law. “Our expectation was that employers would offer high quality insurance.” Part of the problem: lawmakers left vague the definition of employer-sponsored coverage, opening the door to unexpected interpretations, say people involved in drafting the law.

The low-benefit plans are just one strategy companies are exploring. Major insurers, including UnitedHealth Group Inc., Aetna Inc., and Humana Inc. are offering small companies a chance to renew yearlong contracts toward the end of 2013. Early renewals of plans, particularly for small employers with healthy workforces, could yield significant savings because plans typically don’t need to comply with some health law provisions that could raise costs until their first renewal after Jan. 1, 2014.

Insurers and health-benefits administrators are also offering small companies a chance to switch to self-insurance, a form of coverage traditionally used by bigger employers that will face fewer changes under the law. Employers are also considering limiting workers’ hours to avoid the coverage requirements that apply only to full-time employees.

Regulators worry that some of these strategies, if widely employed, could pose challenges to the new online health-insurance exchanges that are a centerpiece of the health law. Among employees offered low-benefit plans, sicker workers who need more coverage may be most likely to opt out of employer coverage and join the exchanges. That could drive up costs in the marketplaces.

Officials at the Department of Health and Human Services said they haven’t seen widespread evidence of such strategies. They said the health law would bring new options, including the subsidized exchange plans, to low-income workers, and that most employers who offer coverage now choose to provide much more robust benefits.

Limited plans may not appeal to all workers, and while employers would avoid the broader $2,000-per-worker penalty for all employees not offered coverage, they could still face a $3,000 individual fee for any employee who opts out and gets a subsidized policy on the exchanges.

But the approach could appeal to companies with a lot of low-wage workers such as retailers and restaurant operators, who are willing to bet that those fees would add up slowly because even with subsidies, many workers won’t want to pay the cost of the richer exchange coverage.

A full-time worker earning $9 an hour would have to pay as much as $70 a month for a midlevel exchange plan, even with the subsidies, according to Kaiser. At $12 an hour, the workers’ share of the premium would rise to as much as $140 a month.

Firms now offering low-cost policies known as mini-meds, generally plans that cap benefits at low levels, could favor the tactic. Companies sought federal health department waivers to cover nearly four million with mini-meds and other similar plans, which will be barred next year.

Because the coverage is limited, workers who need richer benefits can still go to the exchanges, where plans would likely be cheaper than a more robust plan Bill Miller has historically offered to management and that costs more than $200 per month. The chain plans to pay the $3,000 penalty for each worker who gets an exchange-plan subsidy.

Many more workers will continue to go without insurance, despite the exchanges and the limited plan. Currently, only one-quarter of workers eligible for the mini-med plan take it.

*Modified from a WSJ article

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Labor unions break ranks with White House on ObamaCare

Months after the president’s reelection, a variety of unions are publicly balking at how the administration plans to implement the landmark law. They warn that unless there are changes, the results could be catastrophic.

The United Food and Commercial Workers International Union (UFCW) — a 1.3 million-member labor group that twice endorsed Obama for president — is very worried about how the reform law will affect its members’ healthcare plans.

  • In a new op-ed published in The Hill, UFCW President Joe Hansen homed in on the president’s speech at the 2009 AFL-CIO convention. Obama at the time said union members could keep their insurance under the law, but Hansen writes “that the president’s statement to labor in 2009 is simply not true for millions of workers.”
  • Last month, the president of the United Union of Roofers, Waterproofers and Allied Workers released a statement calling “for repeal or complete reform of the Affordable Care Act.”
  • Republicans have long attacked Obama’s promise that “nothing in this plan will require you to change your coverage or your doctor.” But the fact that unions are now noting it as well is a clear sign that supporters of the law are growing anxious about the law’s implementation.
  •  Many UFCW members have what are known as multi-employer or Taft-Hartley plans.According to the administration’s analysis of the Affordable Care Act, the law does not provide tax subsidies for the roughly 20 million people covered by the plans. Union officials argue that interpretation could force their members to change their insurance and accept more expensive and perhaps worse coverage in the state-run exchanges.

Hansen, who is also the head of the Change to Win labor federation, told The Hill that his members often negotiate with their employers to receive better healthcare services instead of higher wages. Those bargaining gains could be wiped away because some employers won’t have the incentive to keep their workers’ multi-employer plans without tax subsidies.

“You can’t have the same quality healthcare that you had before, despite what the president said,” Hansen said. “Now what’s going to happen is everybody is going to have to go to private for-profit insurance companies. We just don’t think that’s right. … We just want to keep what we already have and what we bought at tremendous cost.”

If the administration were to expand the subsidies to cover the Taft-Hartley plans, it’s likely that the price tag for ObamaCare would rise, though it’s unclear by how much.

Union angst over the healthcare law is being matched by some Democrats on Capitol Hill. Senate Finance Committee Chairman Max Baucus (D-Mont.) has said the law’s implementation could be a “train wreck,” while other senior Democrats, including House Minority Whip Steny Hoyer (D-Md.), have expressed reservations.

Both parties agree that ObamaCare is going to be a major issue in the 2014 midterm elections, especially because the bulk of the law is scheduled to go into effect on Jan. 1 next year.

Labor recently shared its concerns with senior Democrats. Earlier this month, the subject of how multi-employer health plans would be treated under ObamaCare was brought up at a private May 8 meeting between union leaders and the Senate Democratic Steering and Outreach Committee.

“A number of people were making this point at that meeting. People said that their members are upset about this and the more they learn about it, the more upset they are,” said one union official.

“I was pretty blunt about it,” said Hansen. “I told them it was a very serious issue. That it was wrong. Taft-Hartley plans should be deemed as qualified healthcare providers and I also said it’s going to have political repercussions if we don’t get this fixed.”

Hansen wants the Obama administration to use its regulatory powers to address the matter; a legislative remedy is all but impossible in the divided 113th Congress. “When [the Obama administration] started writing the rules and regulations, we just assumed that Taft-Hartley plans — that workers covered by those plans, especially low-wage workers — would be eligible for the subsidies and stay in their plans and they’re not,” Hansen said.

Union anger on multi-employer plans has been percolating for months. In January, The Wall Street Journal reported that UNITE HERE and the Teamsters were pressing the administration. UFCW was also mentioned in that report.

Asked why he decided to raise the volume on his worries about ObamaCare, Hansen said he needed to speak out in support of his members. “I owe it to my members to do everything I can to see if we can make this law better,” Hansen said.

He added, “[Administration officials] have given us a lot of time and attention. We just don’t agree and I still think that I have taken the correct position. They have been responsive as far as trying to get the meetings. It’s just we can’t get it across the finish line and we need to do that.”

Hansen, however, said he has no regrets about endorsing Obama or supporting the healthcare reform law. UFCW is a major Democratic donor, contributing to several of the party’s candidates and giving to last year’s convention in Charlotte, N.C., and this year’s inauguration.

The union president said changes to his members’ health insurance might lead to problems at the ballot box for candidates.

“What happens in 2014 could be at issue here. … There is going to be a lot of disenchantment with how did this happen and who was in power when it happened. No matter what I say, that’s going to be there,” Hansen said. “They are upset already and it hasn’t even taken effect already.”

*Modified from a Hill.com article

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Insurers predict 100%-400% Obamacare rate explosion

  • Internal cost estimates from 17 of the nation’s largest insurance companies indicate that health insurance premiums will grow an average of 100 percent under Obamacare, and that some will soar more than 400 percent, crushing the administration’s goal of affordability.
  • The report found that individuals will face “premium increases of nearly 100 percent on average, with potential highs eclipsing 400 percent. Meanwhile, small businesses can expect average premium increases in the small group market of up to 50 percent, with potential highs over 100 percent.”
  • One company said that new participants in the individual market could see a premium increase of 413 percent when new requirements on age rating and required benefits are taken into account, said the report. “The average yearly cost for a new customer in the individual market grows from $1,896 to $3,708 — a $1,812 cost increase,” it added.

New regulations, policies, taxes, fees and mandates are the reason for the unexpected “rate shock,” according to the House Energy and Commerce Committee, which released a report Monday based on internal documents provided by the insurance companies. The 17 companies include Aetna, Blue Cross Blue Shield and Kaiser Foundation.

The key reasons for the surge in premiums include providing wider services than people are now paying for and adding less healthy people to the roles of insured, said the report.

It concluded: “Despite promises that the law will lower costs, [Obamacare] will in fact cause the premiums of many Americans to spike substantially. The broken promises are numerous, and the empirical data reveal that many Americans, from recent college graduates to older adults, will not be able to afford the law’s higher costs.

* Modified from a US House of Representatives Committee Report Summary.

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Obamacare: Taxpayers Must Report Personal Health ID Info to IRS

  • 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.
  • 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

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”.

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.

As a service to the public, Americans for Tax Reform has released a projected version of this tax form to help families and tax specialists prepare for this additional filing requirement. Taxpayers may view the projected IRS form at www.ObamacareTaxForm.com.  On the form, lines 3-4 show where taxpayers will disclose their personal health ID information.

*Modified from an Americans for Tax Reform article

 

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Applying for ObamaCare—Still Not Simple

President Obama boasts that the application for government health-insurance has become easier to fill out. It hasn’t.

During his news conference last week, the president sounded defensive in trying to tamp down fears of an impending ObamaCare train wreck. One positive note was his boast about whittling down from 21 pages to three the application for subsidies that individuals have to file. But even that may need some defending.

  • The new, 11-page form. It contains a strong warning not in the earlier, 21-page draft: “I’m signing this application under penalty of perjury . . . I know that I may be subject to penalties under federal law if I provide false and or untrue information.” That threat may unsettle applicants already not sure they’re correctly answering complicated questions. If they don’t, the consequences could be costly.
  • If an applicant understates his income and receives a larger health-insurance subsidy than he is eligible for, the money must be paid back. That may mean thousands of dollars.
  • Applicants may be further disturbed when they encounter, on the signature page, this message: “We’ll check your answers using information in our electronic databases and databases from the Internal Revenue Service (IRS), Social Security, the Department of Homeland Security, and/or a consumer reporting agency. If the information doesn’t match, we may ask you to send us proof.”
  • Given the complexity of the questions, many people will need help with the application. So there is a handy Appendix C that allows the applicant to “choose an authorized representative” who can gather information and sign “your application on your behalf.” You need to be very sure you can trust this person with the required confidential information (Social Security numbers, income, etc.).

The three-page application is for people who don’t get health insurance at work and are seeking coverage and subsidies for themselves. One big reason the new form is shorter: the type is smaller, with less space for answers.

The much-derided 21-page application was for families. It is now down to 11 pages, thanks to a trick. Eight pages in the longer application called for filling in information for four additional family members. The new form cuts these pages but says that if you have children, “make a copy of Step 2: Person 2 (pages 4 and 5) and complete.” The work required of the applicant remains the same.

Then there’s a 61-page online application form that is in the draft stage but hasn’t been officially released. This is the drill-down version of the three-page and 11-page printed documents. It has all of the if-then questions the government may need to have answered before it can determine if an applicant is eligible for subsidies.

For example, this online form has nine pages of questions and instructions to determine what a family is and how everyone is related. It announces that it is “governed by complex logic in order to ask the fewest number of questions possible.” Twenty-eight different options for family relationships will be displayed in drop boxes, including first cousin, former spouse and collateral dependent.

The family application (the paper version and the online draft) assumes that someone in the family has a job that offers insurance. There are two pages the applicant must complete on that front.

One question asks: Does your employer “offer a health plan that meets the minimum value standard*?” Following the asterisk is an explanation of how to make that determination: “*An employer-sponsored health plan meets the ‘minimum value standard’ if the plan’s share of the total allowed benefit costs covered by the plan is no less than 60 percent of such costs (Section 36B(c)(2)(C)(ii) of the Internal Revenue Code of 1986).”

Many of those providing help will be footsoldiers in ObamaCare’s newly formed army of hourly-paid “navigators.” But this being an Obama administration undertaking, the new application will provide a Web link to “complete a voter registration form.”

*Modified from a WSJ article

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