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November 26, 2014

Posts in "Insurance"

November 19, 2014

Workers Like Workplace Health Plans As Employer Mandate Looms

On January 1, the Affordable Care Act’s controversial mandate for employers to offer health care coverage begins for large employers and a small employer requirement begins in 2016. While the coverage requirement has generated concerns about job losses, plus complaints over added employer expenses and regulatory burdens, the concept of providing insurance coverage is popular with employees.

This week, the Employee Benefit Research Institute released its annual workplace benefits survey and found that 86 percent of workers rate health insurance as the most important employee benefit. Health insurance ranks higher than other benefits such as retirement savings plans. Additionally, nearly half of workers polled indicate that an employers benefit package is important in their decision to accept or reject a job offer.

By Paul Jenks Posted at 11:19 a.m.
Insurance

November 17, 2014

Exchanges Open to Less Turmoil

Round two of policy enrollment on the Affordable Care Act’s health insurance exchanges began this weekend and the main healthcare.gov website is functioning this morning. Later this week a House committee offers a reminder on last year’s exchange website opening failure in a hearing with the former chief federal technology officer about planning for the 2014 enrollment disaster.

In a Sunday interview, Department of Health and Human Services Secretary Sylvia Mathews Burwell claimed that 100,000 people had submitted insurance applications over the weekend, though she did not elaborate on whether they were new polices or renewal applications.

The exchanges are challenged this year by higher expectations of enrollment activity. However, Burwell reiterated that an original estimate of 13 million enrollees has been reduced to less than 10 million. Also, Burwell did not directly address the topic of the cost of insurance plans and HHS released a trove of data on plan pricing only a few hours before the Nov. 15 exchange opening. An initial analysis by the Washington Post shows wide regional disparity of premium levels with increased premiums for many of the most popular policies offered on federal exchanges.

However, this year’s premium levels are largely based upon estimates compiled earlier this year and HealthBeat’s (@CQHealthTweet) Rebecca Adams reported (subscription) in April that insurance company financial risk protection provisions offered by the health law would likely minimize major price increases for 2015 plans. The insurer risk protection provisions are temporary and are also subject to likely congressional scrutiny next year. Additionally, actual consumer payments are also greatly aided by premium subsidies. The Supreme Court next year will weigh in on the legal applicability of the special tax breaks for policies purchased in states covered by the federal insurance exchanges.

 

November 13, 2014

Federal and State Regulators Continue to Mull Employer Stop Loss Plans as Way Around the Affordable Care Act

In 2012, three federal agencies quietly asked the public for information on identifying the scope and implications of business using stop-loss insurance policies to possibly avoid coverage requirements of the Affordable Care Act. A stop-loss policy is purchased by a self-insured employer as protection from large employee health claims. The policy kicks in and pays for the employers expenses beyond a set level of coverage. CQ HealthBeat’s (@CQHealthTweet) John Reichard reported (subscription) earlier this year on a congressional panel’s examination of the possible role for stop-loss coverage for small business and any federal guidance on managing the plans.

Possible widespread use of stop-loss plans could siphon healthy employees out of the broader insurance pool and the policies could entice employers into self-insured plans, which avoid Affordable Care Act mandates. However, information is limited about the extent of actual use of stop-loss plans. A Department of Labor sponsored report questioned the reliability of current reporting on self insurance coverage and state insurance regulators are mulling limits on the point at which stop-loss coverage kicks in and the possible management of an employee’s health care by the stop-loss insurer.

By Paul Jenks Posted at 11:42 a.m.
Insurance

November 7, 2014

Employers Face Huge Tax For Reimbursing Employees for Separate Health Policies

The administration on Thursday quietly offered an emphatic negative response to the idea that employers could provide cash reimbursement to employees to purchase individual health insurance polices on their own. The Department of Labor, in a periodic update of frequently asked questions about compliance with the health care law, said that cash reimbursement for policies does not absolve the employer from the requirement to offer health coverage. The agency also noted that offering high health risk employees cash to purchase insurance is discriminatory and also forbidden. Separately, the IRS noted that cash payments for separate policies may be subject to a $100/day excise tax, per employee.

 

 

November 6, 2014

IRS Nixes No-Hospital Coverage Plans

The role of IRS in supervising health plans significantly changed with the enactment the 2010 Affordable Care Act. The tax agency now plays a central role in documenting all health plan coverage and accounting for insurance subsidies. A key element of the IRS management of insurance coverage involves determination if a health plan meets coverage requirements stipulated by the health law. If it doesn’t, the taxpayer and employers are subject to possible tax penalties.

However, the complexities of calculating minimum coverage requirements of a health plan exposed a loophole that allowed some plans to exclude coverage for some hospital and physician services. The allure of low premiums for non-hospital coverage plans has prompted some employers, particularly in low wage industries, to offer the plans. This week, the IRS announced that the loophole will be closed by new regulations planned for next year.

As a result, health plans that begin after this week (Nov. 4) that exclude hospital coverage will not qualify as offering the minimum level of coverage and individuals and employers will be subject to tax penalties. The no-hospital coverage plans that started before Nov. 4 have a one-year reprieve from the rules. The IRS notice also requires employers to notify employees that all limited coverage plans will no longer be health law compliant plans.

October 30, 2014

Report: Out-of-Pocket Spending Increases but Hospital Utilization Drops

Earlier this month, the Congressional Budget Office reported that federal health care spending has increased, largely due to new health insurance subsidies and an expanded Medicaid program.

This week, the Health Care Cost Institute released its annual health cost report for persons covered by private sector employer-offered plans. The report indicates that health care spending per enrolled person increased by $183 in 2013 and out-of-pocket spending increased 4 percent to an average of $800 per person. However, while costs have increased, the utilization of brand-name prescription drugs, hospital inpatient admissions and outpatient services declined.  The report noted an increase in utilization rates for physician specialist office visits and generic prescriptions.

 

October 28, 2014

Health Insurance Group Chief Comments on Upcoming Exchange Enrollment

CQ HealthBeat’s (CQHealthTweet) John Reichard and Rebecca Adams sat down last week with Karen Ignagni, the president and CEO of America’s Health Insurance Plans. Their report (subscription) noted that the top lobbyist for health insurers expressed optimism that the next open enrollment period under the health law will better than last year but warned that a lobbying battle looms over networks that could lead to higher premiums.

Here are a few brief excerpts from their wide-ranging interview. Questions have been condensed.

Ignagni, speaking about the enrollment experience that consumers will have this year compared to last year, when the federal Healthcare.gov website did not work initially:

Because of where we started last year, I don’t expect that kind of situation – we had a problem getting people on the website [Healthcare.gov] entirely last year – so we’re really talking about a very different experience. For consumers that are new to the exchange, they will see a considerably shortened application and they’ll be able to go through the process fairly quickly and be able to get enrolled and that’s a very positive thing. So there’s been a lot of effort to improve the front end…. But we’re in uncharted waters because we’ve never gone through a re- enrollment or renewal process. So we are working very hard to make sure that from a health plan standpoint we’re reaching out to consumers, letting them know that they need to update their information so they can get their latest APTC [advanced payment tax credit] information, their subsidies. That’ll be important for them to know their subsidies as they’re evaluating their choices in the exchange.  That is a very important job that health plans are doing a great deal of outreach [on] to make sure people know about that. We were very pleased to see the administration launching an effort to communicate this message very clearly to consumers – that they need to go back to the exchange and update their information.

Question: One thing consumers ask is “Is my doctor covered?” … Are you thinking of doing anything more to ensure provider directories are accurate?

Plans have on their websites their provider directories and are working very hard to make sure that if a particular clinician decides that he or she doesn’t want to be part of network that we’re updating that when the information comes to us, it gets updated. Sometimes the info doesn’t come from a provider for a month or two to the health plan. So we’re making sure when we get that, we get that on the website. Over time the exchanges, both state as well as federal, will be able to have that information on the exchange websites and we’re very supportive of that … We also are releasing a consumer guide to networks – questions consumers should have at their kitchen table and think about posing.

 

By Paul Jenks Posted at 2:06 p.m.
Insurance

October 7, 2014

Sequestration Hits Some Small Business Health Care Tax Credits

Congress has long wrestled with an automatic deficit reduction tool dubbed — sequestration. The automatic spending cuts were required due to the inability of Congress and the administration to agree on specific spending reductions or tax increases. Last year, the impact of sequestration spending cuts was reduced by a bipartisan budget accord, but the sequestration process is still in place.

The IRS on Monday quietly noted the impact of sequestration cuts on a small business health care tax incentive. The tax credit is a 2010 Affordable Care Act incentive for small businesses to enroll in insurance exchange health plans. The credit for business with less than 25 employees ranges from 35-50 percent of premiums paid by the employer. However, selected tax-exempt small employers, such as charities, are offered the lower but refundable tax credit level and sequestration will reduce the amount refunded by 7.3 percent.

Here is the updated IRS statement for tax-exempt employers:

Due to sequestration, refund payments issued to certain small tax-exempt employers claiming the refundable portion of the Small Business Health Care Tax Credit under Internal Revenue Code section 45R, are subject to sequestration. This means that refund payments processed on or after Oct. 1, 2014, and on or before Sept. 30, 2015, issued to a tax-exempt taxpayer claiming the Small Business Health Care Tax Credit under section 45R will be reduced by the fiscal year 2015 sequestration rate of 7.3 percent (regardless of when the original or amended tax return was received by the IRS). The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise impacts the sequester, at which time the sequestration reduction rate is subject to change.  Sequestration only affects the refundable portion of the Small Business Health Care Tax Credit filed by tax-exempt employers.  Sequestration does not impact Small Business Health Care Tax Credit claims by non-tax-exempt employers, as the credit is not a refundable credit for non-tax-exempt employers.

 

 

By Paul Jenks Posted at 2:30 p.m.
Insurance

October 1, 2014

GAO Opinion Bolsters GOP Case on Insurer Risk Payments

A group of Republican lawmakers on Tuesday obtained a legal opinion on legislative instructions for funding a key factor enticing health insurance participation in the state and federal exchanges. Exchange health plans can be obtained without restrictions due to preexisting health conditions and eliminating insurance limitations on preexisting conditions is a primary objective of the Affordable Care Act.

However, to avoid a catastrophic insurance market breakdown, the law instituted an individual coverage mandate, which broadens the coverage pool.  Also, the law added a temporary premium stabilization program for insurers to re-balance the coverage risk. The federal government subsidizes plans that have losses above a set amount and recovers money from plans that have gains.

CQ Health Beat’s (@CQHealthTweet) Rebecca Adams reported that the Centers for Medicare and Medicaid Services, in insurance exchange rules issued in May, tweaked the amounts this year given to insurers to cover losses and offset the cost of caring for high-cost patients. CMS expects the insurer subsidies and recouped payments to offset each other, but the final rule text notes:

In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers. In that event, HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.

On Tuesday, the Government Accountability Office provided Alabama Sen. Jeff Sessions and Michigan Rep. Fred Upton with an opinion noting that legislation covering fiscal year 2015 spending, which begins today and is funded through a stopgap spending resolution through Dec. 11, should also include special funding instructions for risk payments.

 

September 30, 2014

House Committee Issues Subpoena on Exchange Subsidy Decision

While Congress is on recess, committees can continue to prepare for hearings and ongoing investigations.

Last week, the House Oversight and Government Reform Committee quietly issued a subpoena to Treasury Department officials for documents regarding internal decision-making on allowing subsidies for health insurance plans offered through the federal insurance exchange.

The House panel has been investigating the subsidy decision for several years and the subpoena is the committee’s first formal effort to compel the administration to produce documents in relation to the subsidies. The Treasury Department outlined the premium tax credit in rules published in 2012.

The House panel is seeking internal documents on how the Treasury Department justified the decision to offer premium tax credits for policies purchased on the federal exchange.

CQ Roll Call’s John Reichard reports that the committee investigation dovetails with ongoing legal challenges to the legality of the subsidies. The separate legal challenges, one of which is currently under review by an appeals court, claim that the 2010 health care overhaul law only allows subsidies for policies purchased on state-operated exchanges.

 

 

 

September 25, 2014

HHS Reports a Decline in Uncompensated Hospital Care

An objective of the health care overhaul’s provisions allowing states to expand coverage offered through the Medicaid program is the reduction in the burden on hospitals treating uninsured patients and the resulting hospital write-offs for uncompensated care. Hospitals are now beginning to recoup some the cost of treatment of previously uninsured patients through Medicaid, especially in states that have expanded the qualifications for Medicaid coverage.

The Department of Health and Human Services on Wednesday detailed the savings impact on hospitals, noting $4.2 billion in savings in states that have expanded the Medicaid program and $1.5 billion in states that have avoided an expansion. The federal government will pick up all of the expanded Medicaid program costs through 2016 and phase down to 90 percent of costs in 2020.

CQ HealthBeat’s (@CQHealthTweet) Rebecca Adams reported that the authors of the law expected a decline in charity care and bad debt as consumers gained insurance coverage. That was also one of reasons why Congress included in the health law billions of dollars in cuts in Medicare and Medicaid payments for hospitals that care for a large share of low-income patients. Additionally, the Affordable Care Act added requirements on charitable hospitals to document and justify policies and limit charges for uncompensated care.

 

 

 

 

 

September 24, 2014

Health Law Tax Forms Hint at Complex Tax Season

Earlier this year the IRS unveiled draft individual and business tax forms for documenting compliance with requirements of the Affordable Care Act. The law imposes a tax penalty on persons that do have health insurance coverage but the provision is likely to impact only little more than 1 percent of taxpayers due to a wide-range of exemptions.

However, CQ HealthBeat’s (@CQHealthTweet) John Reichard reported this week on concerns about the complex instructions for claiming the tax exemptions, especially for taxpayers that are only familiar with filing the simplest tax return — or have never filed a tax return. Additionally, taxpayers who received a subsidy — really a premium tax credit — for health insurance exchange plan coverage will have to reconcile the tax credit on their tax forms. The instructions for the form used to adjust the premium tax credit pose additional taxpayer demands and possibly additional taxes.

 

 

 

Young Adult Health Spending Surges After Parent Health Plan Expansion

On Sept. 23, 2010, one of the first elements of the 2010 health care overhaul law started and it turned out to be one of the most popular features — at least in terms of driving access to health care services. The law allowed parents to add adult children on employer-sponsored family health plans.

A new study released today by the Health Care Cost Institute reveals that young adult health care services spending in 2011 grew by 8.3 percent compared to other adult spending growth of 3.8 percent. Shortly after the insurance plan expansion allowance began, young adult emergency room visits increased along with spending on mental health services. The study also notes that health care spending grew faster for young adult men.

The study acknowledges that other factors, besides the Affordable Care Act, could also be attributed to the increase in young adult health care spending starting in 2011.  However, the report found a distinct surge in spending starting after implementation of the parent policy coverage provision.

By Paul Jenks Posted at 11:34 a.m.
Insurance

September 22, 2014

Health Insurance Auto-Renewal Process Omits Medicaid Plans

Over the next several weeks, 95 percent of people who signed up last year for a health plan through the federal insurance website, healthcare.gov, will be notified that their insurance will automatically renew for 2015. Earlier this year, the Department of Health and Human Service announced the process for the auto-renewal of policies.

However, people who signed up for a Medicaid plan may not know that they must take action to renew their coverage. CQ HealthBeat’s (@CQHealthTweet) Rebecca Adams reports that Medicaid recipients must reapply for coverage, even if their personal circumstances have not changed. The Medicaid program, which is largely administered by the states, requires each state to explain the renewal process. The varying state processes and accompanied documentation could result in some people losing coverage.

 

Economist Weighs in on Health Law and Argues Against Tax Break for Employer Coverage

Ahead of the Nov. 15 start of a new enrollment period for health insurance exchange plans, the Economist magazine this week examines impact of the health care overhaul law in reducing health care cost and providing insurance coverage to the uninsured. The report notes that the U.S. health system is “terrible at controlling costs,” largely due to the Medicare system of paying providers for services instead of patient health outcomes and an insurance marketplace that does not disclose the actual cost of treatments to patients. However, the magazine cites recent studies that indicate the insurance exchanges and an expanded Medicaid program have reduced the rate of uninsured persons.

In an accompanying editorial, the Economist opines that while some aspects of the health law have worked, the program is “costly and overcomplicated”. The first task for Congress, the magazine argues, is to move towards scrapping the existing tax break for employer offered coverage (currently health benefits are not added to an individual’s taxable income) and to eliminate the health law requirement that employers offer health coverage.

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