Archive | State Health Exchanges

Will Obamacare Hurt Jobs? It’s Already Happening, Poll Finds

Small business owners’ fear of the effect of the new health-care reform law on their bottom line is prompting many to hold off on hiring and even to shed jobs in some cases, a recent poll found.

“We were startled because we know that employers were concerned about the Affordable Care Act and the effects it would have on their business, but we didn’t realize the extent they were concerned, or that the businesses were being proactive to make sure the effects of the ACA actually were minimized,” said attorney Steven Friedman of Littler Mendelson. His firm, which specializes in employment law, commissioned the Gallup poll.

  • “If the small businesses’ fears are reasonable, then it could mean that the small business sector grows slower than what economic conditions otherwise would indicate. And small businesses have been a growth engine in the economy,” Friedman told CNBC.
  • Forty-one percent of the businesses surveyed have frozen hiring because of the health-care law known as Obamacare. And almost one-fifth—19 percent— answered “yes” when asked if they had “reduced the number of employees you have in your business as a specific result of the Affordable Care Act.
  • The poll was taken by 603 owners whose businesses have under $20 million in annual sales. Another 38 percent of the small business owners said they “have pulled back on their plans to grow their business” because of Obamacare.
  • The prevalent pessimism tracks other answers in the poll, which showed that 55 percent of small business owners believe that the ACA will lead to higher health-care costs. By contrast, about 5 percent said the law would lead to lower costs.
  • Just 9 percent of the small employers surveyed agreed that Obamacare would be “good for your business,” while another 39 percent saw “no impact.”
  • In addition to restricting hiring or cutting jobs, small companies are considering other ways to mitigate the expected financial fallout. Twenty-four percent are weighing whether to drop insurance coverage, while 18 percent have “reduced the hours of employees to part-time” in anticipation of the ACA’s effects, the poll found.

Those are “some pretty startling answers,” Friedman said.

“To think that [nearly] 20 percent of small businesses have already reduced the numbers they have in their business because they’re concerned about the medical coverage is significant, and a bit troubling,” Friedman said.

Friedman said that Littler Mendelson, which recently created a health-care reform consulting group, had heard small business clients talk about their fear that the rules and other effects of the ACA will lead to higher costs. The poll supported that anecdotal data with the finding that 48 percent of owners think the law will be bad for their bottom line.

And more than half—52 percent—said they expected a reduction in the quality of health care under Obamacare, while just 13 percent expected an improvement.

“I can’t say that the fears appear overstated, because the potential for big problems seems rather large,” Friedman said about law’s implementation.

“We don’t know until 2014 and beyond what the impact of the ACA will be on businesses,” he said. “There is tremendous fear that the premiums will be much higher, for small businesses especially. At this point we can’t look a client straight in the eye and say, ‘Don’t worry about it. Everything will be fine.’ ”

Gallup Chief Economic Dennis Jacobe said small business owners’ answers in the poll “is consistent with owners’ tendency to be more Republican than Democratic, higher-income, more against big government, more conservative and less optimistic than Americans overall.”

*Modified from a CNBC.com article

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What to Expect of the Small-Business Insurance Exchanges

Looking to buy a small group plan from your state’s new health-insurance exchange? There’s a risk it won’t be ready to open on time in October.

  • Eleven percent of 783 firms with less than $20 million in annual revenue said that their biggest concern regarding the health-care law is how the insurance exchanges will operate, according to an April survey by The Wall Street Journal and Vistage International Inc., a San Diego-based executive-mentoring group. That compares with 33% who said the cost of health care is their top concern.

If you own a small business and are looking to purchase a small-group plan from your state’s exchange, here’s what you need to know:

Is my small business eligible to buy insurance from an exchange?

  • The exchanges are limited to only businesses with 100 or fewer full-time-equivalent employees. Full-time equivalent is the number of employees on full-time schedules plus the number of employees on part-time schedules, converted to a full-time basis.

How would an exchange benefit my business?

The small-business exchanges are expected to make it easier for small employers to manage their health-benefits programs. An employer could make a single payment to an exchange, which would disburse the money to the various insurance providers covering its staff, among other benefits.

Also, small group plans purchased through an exchange could be less expensive than what’s available in the private marketplace. This is because the exchanges are expected to attract a large pool of participants, which theoretically would create more competition among insurers, thus resulting in lower insurance premiums.

Husband-and-wife business owners Chris and Maria Guertin of Minneapolis are among those hoping to find a small-group insurance plan within their budget through their state’s exchange. They say they currently can’t afford one to cover themselves, their one full-time employee and any recruits they hire in the future for Sport Resource Group Inc., a retail and wholesale company they started in 2006. But they would like to be able to offer health insurance as an employee benefit to attract and retain top talent in order to grow the business. “A group plan right now is too much,” says Mr. Guertin.

Who’s running the exchanges?

Seventeen states are running their own small business exchanges, with the federal Centers for Medicare and Medicaid Services carrying out the task on behalf of the remaining 33 states.

What kind of plans will the exchanges offer?

The exchanges will offer insurance plans from private insurance companies. For 2014, employers in states where the federal government is running the exchange will be able to select just one plan to offer to workers. Which carriers will be participating and how many will vary by state.

When will I be able to start using my state’s exchange?

  • Though enrollment is slated to begin in October of this year, with plans to take effect in January 2014, the GAO report suggests they may not open in time. The 17 states running their own exchanges were late on an average of 44% of key activities that were originally scheduled to be completed by the end of March, it said.

There have been other setbacks as well. The federal government said in April that contrary to initial plans, it wouldn’t allow workers in the first year to choose between a range of insurance options offered through employers. For the first year, companies will select one plan to offer to workers.

Can I get a tax credit?

If you have fewer than 25 full-time equivalent employees, you may qualify for a tax credit of up to 35% of your premium costs this year and up to 50% in 2014.

Do I even need to buy a small-group plan?

Once your firm reaches 50 full-time equivalent employees, a penalty will kick in if you fail to provide coverage for employees who average 30 or more hours a week in a given month, starting in January. The penalty is $2,000 for each full-time employee in excess of 30 full-time employees. There are no penalties if part-time employees are not offered coverage. The government will rely on data about the composition of employers’ workforces this year in order to determine whether a firm will be liable.

Also, if an employer with 50 or more full-time equivalent employees does offer coverage, but the insurance doesn’t meet the law’s minimum requirements, there is a penalty of $3,000 for each worker who gets a federal subsidy through state insurance exchanges.

*Modified from a WSJ.com article

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How the New Health Law Could Raise Costs for Young, Healthy Employees

  • The younger and healthier a small business’s workforce, the greater its chances of facing a big spike in health-insurance premiums next year. That is because the Affordable Care Act’s impact on small employers will split largely on generational and industry lines, putting owners of firms with mostly male employees in their 20s and 30s, at a disadvantage.
  • Starting in January, insurers will no longer be able to set premiums for small-group plans, which apply to employers with fewer than 50 employees, based on a firm’s industry or the health or gender of its staff. Insurers will still be able to take into account the age of a firm’s workers, though to a lesser extent.
  • The result: the cost of health care will be more evenly spread among small businesses, as employers with mostly young and healthy workers pick up the costs of firms that comprise the opposite. The rebalancing will drive up premiums for some companies in industries with lots of young, healthy workers, such as technology, while moderating rate increases for firms with older and sicker workers, and in higher-risk industries such as industrial manufacturing.
  • Small-business clients are considering various options for absorbing premium increases next year. For example, some are looking at cutting back on the percentage they contribute toward employees’ costs or no longer covering dependents. Others, mainly firms with fewer than 50 employees, are thinking of dropping their plans and directing workers to the state insurance exchanges.

Ms. Hasson, who started the Computer Company in 1996, pays 75% of premiums for employees and 25% for dependents. Her team, including 29-year-old Art Desrosiers, could therefore also feel the effects of the law next year. Paying for health insurance, even if it costs more next year, “would bother me but it would still be worth it,” says Mr. Desrosiers, a data-center administrator, whose premiums currently total about $113 a month. “You don’t know what’s going to happen to you.”

By comparison, Winsted, Conn.-based HDB Inc., a manufacturer of metal hinges that does business as Homer D. Bronson Co., is among those whose premiums could rise by a lower percentage next year. Owner John Zoldy says his broker estimates that the 16-employee firm, with an average age in the early 50s, could be charged a rate increase as low as 10%, down from last year’s 18% increase.

Amit Mrig, owner of Academic Impressions, an educational-services provider to colleges and universities in Denver estimates that the firm’s premiums could rise by as much as 40% next year, up from just 10% in past years, due to its mostly young and healthy workforce of 25 people. “It’s going to take money out of my pocket,” says Mr. Mrig, because he’s afraid that he could lose employees if he were to cut back benefits, hiring or pay raises to cope. “We’re a totally personnel-driven organization.”

Daniel Fusch, one of Mr. Mrig’s employees, says that health benefits play a “significant” role in where he chooses to work. The 32-year-old director of publications and research is on a family plan and has a daughter who is disabled. “That’s mainly where the package is especially important,” he says. “Her medications are pretty expensive.”

Mr. Fusch has been with Academic Impressions for seven years and describes its health benefits as “far superior” to what past employers have provided him. If the company were to drop its coverage, he says he might have to consider changing jobs. Health-insurance “is one of the two or three key factors for me

*Modified from a WSJ article

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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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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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