Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
October 25, 2014

Posts in "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.

HHS Touts $1B in Insurance Rate Review Savings

A quickly implemented element of the 2010 health care overhaul law was a process to review proposed health insurance rate increases. The program began almost immediately after the law was enacted and requires insurers to submit rate plans to the Department of Health and Human Services or state insurance regulators when a proposed rate increase exceeds 10 percent. While federal officials have no formal recourse to halt a planned increase the administration cites the rigor of the review process in reducing rate hikes.

On Friday, the administration issued the 2014 rate review report and touted nearly $1 billion in premium savings and a reduction in planned premium increases for the individual and small group markets. Additionally, a separate health law requirement requires insurers to rebate a portion of premiums if actual health claim payments are below a set percentage target. The report adds $250 million in consumer savings in 2013 due to rebate payments.

 

By Paul Jenks Posted at 10 a.m.
Insurance

September 16, 2014

Survey Records Lower Level of Uninsured

An objective of the 2010 health care overhaul law, which began offering subsidized insurance coverage starting on Jan. 1, is the reduction of the number of uninsured persons. Details released today from an annual federal survey from the Center for Disease Control and Prevention’s National Center for Health Statistics records a decrease in the uninsured rate from 20.4 to 18.4 percent for the first three months of 2014. The study pegs the total uninsured level at 41 million and 55.5 million uninsured for at least part of 2013. The largest decrease in uninsured levels was recorded for adults aged 19-25.

The survey does not directly attribute the change in uninsured levels to the health care overhaul law. Also, the estimate tallies 3.7 million covered by health insurance exchange plans purchased through the Health Insurance Marketplace or state-based exchanges through March, which contrasts with the administration’s enrollment estimate of over 8 million. However, the timing of the survey likely excluded late enrollment that stretched through April.

 

 

September 12, 2014

Will Recent Data Breaches Scare Consumers Away from Healthcare.gov?

This summer a test server behind the healthcare.gov website was infiltrated by an alien computer code, or malware. The Department of Health and Human Services notified Congress last week on the security breach and said the infected server did not contain personal information. However, the event, combined with other recent consumer site data breaches, call into question how consumers will react to the healthcare.gov site when the new open enrollment period begins on Nov. 15.  A House committee next week plans to quiz administration officials over the recent security breach and the exchange website security concerns.

CQ HealthBeat’s (@CQHealthTweet) John Reichard inquired on Thursday about any administration concerns about negative consumer reaction to the recent reports of security breaches. Former White House health reform adviser Chris Jennings commented:

I doubt the White House is losing too much sleep over this particular issue, though the commitment to privacy and security should be and I think is always there. Re-enrolling the current covered population and targeting the harder to reach folks are much higher on the list.

 

 

 

By Paul Jenks Posted at 10:33 a.m.
Insurance

September 11, 2014

Worker Premiums Ease But Deductibles Soar

Employer sponsored health insurance premiums are rising but increases in employee deductibles are soaring. The annual survey report on employer health coverage issued this week by the Kaiser Family Foundation notes that premiums have increased only 3 percent in 2014 but employee deductibles have increased 47 percent since 2009. On average a covered employee must pay $1,217 this year before their health costs are covered.

CQ HealthBeat’s (@CQHealthTweet) John Reichard reported Wednesday that the impact of new benefit requirements of the 2010 health care overhaul law are only slowly being reflected in premiums as plans are gradually adapting the health law’s new coverage requirements. Additionally, higher deductible levels entice covered employees to pay attention to health care costs.

By Paul Jenks Posted at 10:20 a.m.
Insurance

July 25, 2014

Bipartisan Health Bills: Medical Leave, Congressional Plans and Chronic Care Coverage

Despite bitter congressional wrangling over the health care overhaul law and health spending priorities, several bills introduced this week suggest there is some bipartisan consensus on health care issues.

Full story

New Tax Forms Released for Documenting Health Coverage

The IRS has fleshed out new reporting requirements stemming from the Affordable Care Act, including instructions for how taxpayers should calculate penalties if they fail to purchase insurance.

Full story

July 24, 2014

$330 Million in Premium Rebate Checks Are Coming

The Department of Health and Human Services today highlights one of the dividends stemming from the 2010 health care overhaul. HHS this morning announced the tally of this year’s consumer health insurance premium rebates.

Full story

By Paul Jenks Posted at 9:06 a.m.
Insurance

Sign In

Forgot password?

Or

Subscribe

Receive daily coverage of the people, politics and personality of Capitol Hill.

Subscription | Free Trial

Logging you in. One moment, please...