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February 14, 2016

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March 24, 2015

Health Law Credits Boosted Coverage in 2014, GAO Says

A look at the early numbers suggests that the premium tax credit offered via the health care law boosted health care coverage in 2014.

A Government Accountability Office report released Monday found that the tax credit, which was intended to make premiums more affordable under the law, expanded coverage among uninsured, eligible people by as much as 5 percent in 2014.

The GAO looked at studies on insurance rates and interviewed experts from 11 research groups, as well as from the Department of Health and Human Services.

The report found that the advanced premium tax credit, or APTC, reduced premiums by 76 percent from 2013 to 2014.  Although data were not yet available for 2015, studies found the tax credit saw caused only modest changes between 2014 and 2015.

The GAO on Monday also released a report recommending that Congress require Medicare to pay certain exempt cancer hospitals in the same way in pays teaching hospitals, saying that methodologies for paying the exempt hospitals provided little incentive to control costs.

In 2012, the report found, Medicare payments to the exempt hospitals and the teaching hospitals, were substantially higher – roughly 42 percent more for inpatient services.

By Adriel Bettelheim Posted at 11:42 a.m.

March 18, 2015

Children’s Health Coverage Losses Outlined in Multiple Scenario Study

More than 3.3 million children could lose their health care coverage if Congress does not renew the Children’s Health Insurance Program, the Supreme Court strikes down subsidies in the federal marketplace and states scale back coverage.

That scenario is the most dramatic of seven situations affecting children’s coverage that the Urban Institute analyzed in a report released Tuesday.

Coverage for kids faces a number of challenges in the next few months. Funding for CHIP expires Sept. 30 absent congressional action. The Supreme Court could rule in the King v. Burwell case that federal health law subsidies are only allowed in state-run marketplaces and not in the federal marketplace, which could erode coverage for families.

And if Congress does not renew a requirement in the health care law that states must maintain coverage for children through 2019, some states could decide to scale back eligibility levels. States might decide to stop offering Medicaid coverage for kids in families with income above 138 percent of the federal poverty level. States that choose to expand Medicaid have to offer Medicaid benefits up to that amount.

The Urban Institute researchers looked at several possible scenarios in which the Supreme Court allowed tax credit subsidies to continue for people in all marketplaces. If the credits remained available but coverage under certain CHIP programs that stand apart from the Medicaid program is eliminated, the researchers estimate that about 1.1 million children would lose coverage. If Congress also got rid of the requirement that states maintain their current eligibility for children and states stopped providing Medicaid coverage for kids in families over 138 percent of the poverty level, an additional 828,000 kids would lose coverage.

The report also examined what would happen if the Supreme Court struck down subsidies in the federal marketplace. That type of ruling would leave about 730,000 more children without coverage compared to what would occur if the marketplace tax credits were available in those states. The researchers noted that under that scenario, eligibility for Medicaid and CHIP would not change. If CHIP under standalone state programs expired on top of a court ruling eliminating subsidies in the federal marketplace, another 1.2 million kids in addition to the 730,000 kids would lose coverage.

Adding the possibility of states cancelling Medicaid coverage for families above 138 percent of the poverty level, an additional 1.4 million children would lose coverage. Altogether, those three categories of children who would lose coverage would total more than 3.3 million kids.

If none of these circumstances happen, the health care law under current law is expected to reduce the number of uninsured children by roughly half, said the report.

By Rebecca Adams Posted at 9:41 a.m.

March 17, 2015

Racial, Ethnic Health Coverage Disparities on the Decline, HHS Says

Minorities have gained health insurance at higher rates than white Americans since the marketplaces created by the health care law opened in October 2013, Health and Human Services officials said Monday in releasing a report that found 16.4 million people gained insurance since 2010.

African-American and Latino adults still remain less likely to have health coverage than white people. However, the disparities are declining.

HHS Secretary Sylvia Mathews Burwell called the increases in insurance rates “the largest reduction in the uninsured in four decades.”

Before the marketplaces opened, about 14.3 percent of white adults did not have coverage, compared to 22.4 percent of African-Americans and 41.8 percent of Hispanics, according to the HHS report. As of March 4, about 9 percent of white adults were uninsured, compared to 13.2 percent of African-Americans and 29.5 percent of Latinos.

The improvement is “not probably exactly where you want to be because the numbers are still high,” Burwell told reporters Monday morning.

“We did a lot of things to highly target those communities,” said Burwell. “I believe we can do more.”

She noted that she held a large number of events focused on urging minorities to sign up for coverage, including Google hangouts, visits to African-American churches, and an increased percentage of ad buys on Spanish-language media. HHS officials are now analyzing which efforts worked.

Hispanic adults stand out because they are less likely to have employer-sponsored insurance and because people who are in the country illegally are not eligible to buy insurance through marketplace plans created by the health law. Those who live in states that have not expanded Medicaid to more people also have fewer opportunities for coverage.  Nationwide, about 1.5 million Latinos would gain coverage if all states expanded, said Steven Lopez, a health policy expert at the National Council of La Raza, an advocacy group. About one million of them live in just two states: Florida and Texas.

“We’re encouraged by what we see as an upward trajectory,” said Lopez. “But we know it’s going to take time to bring those numbers down.”

Lopez and other advocates are encouraging HHS officials to tweak their outreach efforts and make it easier for people without a long credit history to verify their identities so that they can get coverage.

The HHS numbers indicate the percentage of adults over the age of 18 who have coverage. HHS officials are expected to release more comprehensive data including children later this year.

For young adults between the ages of 19 to 25, the uninsured rate dropped from 34.1 percent to 26.7 percent since 2010. The law allows young adults to stay on their parents’ coverage until age 26, in addition to providing new coverage options for some young adults through marketplace insurance or Medicaid.

The HHS analysis was based in part on previously-reported survey data from 27,800 adults through the Gallup-Healthways Well-Being Index survey, which was released on March 4. That information showed that 12.3 percent of the U.S. population is uninsured. The organization will release new numbers in early April.  The agency also used previously-reported data from the National Health Interview Survey conducted by the U.S. Census Bureau.

About 40 million adults were uninsured before insurers started selling insurance through the marketplaces in 2013, and about 26 million adults are currently uninsured, based on data extrapolated from the uninsured rates.

The report and remarks by Burwell come as part of the administration’s publicity around the upcoming anniversary of the health care law, which President Barack Obama signed almost five years ago.

The news comes as federal and state officials are waiting for a ruling, expected to probably come in June, on whether federal tax subsidies should be available in states that did not create their own state-run enrollment marketplaces.

By Rebecca Adams Posted at 11:07 a.m.

March 16, 2015

Admininstration Behind in Sending Corrected Health Tax Information

Federal officials are behind schedule in sending out corrected health insurance tax subsidy information that people who obtained coverage through the health law marketplace need to file their taxes.

Centers for Medicare and Medicaid Services officials last week declined to say how many of 800,000 incorrect tax forms they have fixed and sent to taxpayers. In February, CMS officials acknowledged that the health insurance tax credit subsidy information was wrong and pledged to mail out new forms by the first week of March. CMS and Treasury spokespersons wouldn’t say if people who are still waiting for the Obama administration to fix their forms will get any automatic extensions in filing their taxes or other assistance.

Administration officials also have declined to specify how many people are affected by the 800,000 incorrect tax forms, known as 1095A forms.

The error affected about 20 percent of the tax forms for people who bought marketplace coverage last year.

Consumer advocates are concerned about the delays in providing accurate information for these people because many of the individuals are low-income and depend on getting their tax refunds quickly so that they can pay their bills.

About 87 percent of the people who bought federal marketplace coverage through in 2014 had incomes that were low enough that they qualified for subsidies to discount their coverage. Subsidies are available for people with income at the federal poverty level, which was $11,490 for 2014 coverage, up to those with income that is four times that much.

CMS Marketplace CEO Kevin Counihan told reporters on a call Friday that federal officials would “soon” release more information on the administration’s efforts to fix the mistake. CMS Deputy Administration Andrew Slavitt said that it was “not correct” that no 1095A forms at all have been corrected and sent back, but he declined to elaborate.

Some of the people with incorrect forms may owe more money than the original forms indicate, while others may get bigger refunds.

Taxpayers represented in about 50,000 of the forms had already filed their taxes when administration officials informed the public about the error. Treasury Department officials said last month that the administration would not chase taxpayers who had already filed, using the wrong information, and may actually owe more than they paid.

Counihan said that administration officials are focused on building awareness of a special enrollment period that begins Sunday and runs through April 30 for people who had to pay a tax penalty for foregoing coverage in 2014 and still need to buy insurance this year. People will still have to pay the 2014 penalty and any penalty they may owe for not getting covered yet this year, but they would have the opportunity to buy insurance and stop accruing additional fines.

The Affordable Care Act requires people who went without coverage last year for at least three months to pay an annual fee of 1 percent of their income, or $95 per person, whichever is more.  In 2015, the fee rises to 2 percent of income or $325 per person.  If people are covered for part of the year, the fee is reduced and is based on how many months they did not have coverage.

By Rebecca Adams Posted at 9:14 a.m.

March 12, 2015

Many Households Lack Liquid Savings to Pay Deductibles, Study Shows

More than a third of non-elderly U.S. households have enough liquid savings to pay the annual mid-range deductible for a private insurance plan, raising the prospect that many Americans could forego care, according to a new Kaiser Family Foundation study.

While concerns about cost-sharing are not new, the study notes that coverage expansions under the health care law have put a new focus on defining affordable coverage. Family expenses can easily exceed $10,000 when someone becomes seriously ill, the study notes.

“The goal of the law was to cover more of the uninsured, many of whom have limited means,” the study’s authors note. “The issue for some families … is that the policies with affordable premiums may have cost-sharing requirements that would be difficult for them to meet when they access services.”

The study uses Federal Reserve data to compare households’ liquid financial assets with cost-sharing representative of health plans offered by employers or available on the individual market, including in health law exchanges.

Researchers found 32 percent of lower-income households have sufficient liquid resources — defined as bank accounts, CD’s and stocks — to pay a $1,200 annual deductible for an individual or a $2,400 deductible for a family. Only 20 percent of those households can afford an annual deductible of $2,500 for an individual or $5,000 for a family. The cohort is defined as having income of 100 percent to 250 percent of the poverty level, or $11,770 to $29,425 for an individual.

The study also found 38 percent of moderate-income households lack the liquid savings to cover a mid-range deductible. Moderate-income is defined as 250 percent to 400 percent of the poverty level, or $29,425 to $47,080. Because the health law doesn’t provide cost-sharing for this group, individuals would have to borrow money or become indebted to health providers if they get seriously ill.

The study found less than half, or 47 percent, of households without enough assets to pay deductibles could obtain $3,000 from friends or family to help in an emergency.

By Roll Call Staff Posted at 12:46 p.m.

March 10, 2015

Burwell Defends Nationwide Subsidies for Health Law

The fact that 87 percent of the 11.7 million people who got covered in the health law’s individual exchange market received subsidies shows “just how important the tax credits are to millions of Americans and to the insurance markets in those states,”Health and Human Services Secretary Sylvia Burwell said on Monday.

The subsidies are at the core of a Supreme Court case against Burwell and the Obama administration that was argued March 4. The challengers contend that people in the 34 states that did not set up their own marketplaces should not get federal tax credits to subsidize the costs of their insurance under the health care law.

Burwell said the Obama administration is “confident that we will prevail” because she said the structure of the law is clear.

“Those who support this lawsuit believe that the law should be dismantled or repealed and they are content to back the progress that we have achieved,” she told supporters at a White House event.

The numbers that Burwell released Monday update previous estimates that the administration released on Feb. 17 showing that 11.4 million people had enrolled. A week later, administration officials provided a partial update with data from federal exchanges only.

The new numbers include data from both federal and state-run marketplaces through Feb. 22.

By Rebecca Adams Posted at 11:37 a.m.

February 26, 2015

Republicans Miffed IRS May Exclude Occupations from Cadillac Tax

It may still be three years away, but the health care law’s “Cadillac Tax” is very much on the minds of some powerful Senate Republicans, who are miffed that the IRS is considering excluding some occupations from the levy. The 40 percent excise tax on high-cost health plans was designed to help pay for the law’s coverage expansion while discouraging overuse of generous health benefits and services that drive up medical spending. Unions, with their generous health packages, stood to be among the losers.
So the first IRS notice of rulemaking on how it intends to implement the tax caught the notice of some on the political right this week, by raising the possibility certain high-risk occupations could be excluded from applicable coverage. Senate Finance Chairman Orrin G. Hatch of Utah, along with Judiciary Chairman Charles E. Grassley of Iowa, sent a letter to Treasury Secretary Jacob J. Lew questioning whether the rule could provide carve-outs for occupations they maintain are mostly affiliated with organized labor is not the answer. As CQ’s Melanie Zanona reports, the letter requests that Lew answer how many of the employee categories referred to in the notice are unionized, which other consumers could be considered for an exemption and whether the department is contemplating delaying the regulation in any way.

The tax takes effect in 2018 and is one of the last provisions in the law that will be implemented.

February 25, 2015

HHS Auditor Prepares ACA Oversight Plan

The inspector general of the Health and Human Services Department  has devoted a large chunk of its annual work plan to monitoring the implementation of the Affordable Care Act, and this week released a health law oversight plan to focus on fraud, waste and abuse, program value, consumer safety and agency efforts to promote innovation. The IG expects 5-10 reports this year specifically focusing on the ACA.

The top priority will be reviews of insurance exchange operations and examination of exchange infrastructure, management and spending, plus the security of plan enrollment information. The IG also will examine internal federal and state process relating to an expanded Medicaid program, Medicare and Medicaid payment changes and program integrity, plus reviews of public health and preventive health grant programs

Initial reports planned for delivery over the next few months include a review of the accuracy of payments to health plans for premium tax credits and payments to federal insurance exchange contractors. Other reports this year include security reviews of state exchanges and an audit of grants to states to establish exchanges.


Early Bird Filers Gain Health Law Subsidy Reprieve

About 50,000 tax filers who were given incorrect information about subsidies they received under the health law and had already filed their 2014 returns won’t have to pay anything else they might owe because it was the government’s mistake.

Centers for Medicare and Medicaid Services officials announced last week that about 800,000 tax filers, which could be more than 1 million individuals, got incorrect tax statements. Principal Deputy Administrator Andy Slavitt said some of those people may have gotten tax refunds that were too big, while others didn’t receive all they were owed.

A Treasury Department spokesperson said Tuesday that people who have filed do not need to amend their returns. “The IRS will not pursue the collection of any additional taxes from these individuals based on updated information in the corrected forms,” said the spokesperson.

The remaining people affected, who have not yet filed their returns, should wait until they get corrected forms as early as next week.

But Treasury officials are encouraging people who have filed already to check if their refunds should have been bigger and re-file their taxes if need be to recoup the difference. If the taxpayer sees that the monthly premium for the local benchmark plan on the original form is less than the premium listed on the corrected form, it may be worth refiling.

“Individuals may want to consult with their tax preparers to determine if they would benefit from filing amended returns,” said the spokesperson.

The tax problem is separate from longstanding concerns about whether some consumers underestimate how much they would earn and took subsidy credits last year that were too generous. If someone claimed too much of a credit to discount the price of their insurance premium, that person will have to pay it back.

H&R Block Inc. estimated in an analysis Tuesday that about 52 percent of people who enrolled in private health insurance through marketplaces last year are learning that they got subsidies that were too high and have to pay them back. People have had to return an average of about $530, which decreased their tax refund by about 17 percent, the company said. On the flip side, about 33 percent of marketplace customers overestimated their income and are getting bigger refunds than they expected, with the average amount totaling $365 on average, an approximately 11 percent boost.

By Rebecca Adams Posted at 9:31 a.m.

February 24, 2015

IRS Offers Guidance on Health Insurer and Cadillac Plan Taxes

The Internal Revenue Service is offering guidance on two complicated tax topics initiated by the 2010 Affordable Care Act. The health law is partially funded by an annual fee on health insurers. The fee has been in place since 2013 and new rules set to be published on Thursday set regulations for the fee for 2015. The tax is not applicable to employers who self-insure, non-profit insurers and voluntary employee benefit groups. The new rule notice offers guidance on the tax agency’s effort to clarify the definition of an entity covered by the tax. Last week, Louisiana Republican Rep. Charles Boustany, Jr. blasted the whole idea of the insurer fee as one of the ways the health law increases the cost of insurance premiums. Boustany touted legislation repealing the fee.

Separately,the health law seeks to cull the use of expensive health plans that add to health system spending. On Monday, the IRS issued a notice describing the process it will use to determine a new excise tax on high-cost, employer-sponsored plans. The tax adds a 40 percent charge on “excess benefits” in plans often dubbed “Cadillac” plans. The excise tax is due to start in 2018. The IRS is seeking comments on how the tax agency will define applicable coverage, the amount categorized as “high cost” and dollar limits on coverage.

By Paul Jenks Posted at 8:44 a.m.

February 23, 2015

CMS Releases Wide-Ranging Exchange Rule

Next year’s open enrollment period for people buying insurance in health law marketplaces will run from Nov. 1 through Jan. 31, 2016, under a 476-page rule released late Friday that affects the plans created under the statute.

The rule is a catch-all regulation affecting many aspects of the federal marketplace. The regulation touches on protections for insurers that prevent them from experiencing deep financial losses, user fees for the federal marketplace, cost-sharing subsidy information, changes to medical loss ratio calculations, new requirements for provider networks and directories and small business marketplace rules.

Many of the provisions of the rule were finalized as the Centers for Medicare and Medicaid Services proposed last year.

The total maximum out-of-pocket costs that a person with marketplace coverage would have to pay in 2016 is $6,850 for individual coverage and $13,700 for family coverage. The final rule requires plans to have updated provider directories.

The rule will help consumers get medications that are not on a plan’s formulary, or official list of medicines, by changing the process by which a consumer can request coverage and requires an external review of a request if the health plan denies the initial request.  It also clarifies that cost-sharing for drugs obtained through the exceptions process must count toward the annual limit on a consumer’s out-of-pocket costs. The rule also ensures that issuers’ formularies are developed based on expert recommendations.

Mulling Implications of Not Renewing CHIP Funding

The State Children’s Health Insurance Program (CHIP) is poised for a possible rocky-road ahead if Congress does not renew funding later this year. The CHIP program is a means-tested program providing health insurance coverage to low-income children and pregnant women. It is a joint project to the federal government and the states. Federal regulations set basic requirements and the states can design their own programs. In 2013 CHIP enrollment totaled 8.4 million and federal and state CHIP expenditures totaled $13.2 billion.

Federal funding for the CHIP program expires on Sept. 30, 2015 and funding renewal is a high bipartisan congressional priority but debate on a re-authorization bill is likely to extend to close to the deadline. If lawmakers are unable to agree on a renewal bill, the portion of federal CHIP funding assigned to the ongoing effort to expand Medicaid will be covered through regular Medicaid funding, but other state CHIP programs are subject to funding restrictions covered by ‘maintenance of effort’ rules included in the Affordable Care Act. The program maintenance rules require states to maintain current eligibility levels for CHIP children.

The Congressional Research Service recently provided lawmakers with a report (CQ subscription) describing the impact to maintenance of effort rules for ongoing CHIP programs if funding expires in September. The report notes:

The states are provided a couple of exceptions to the MOE requirement: (1) states may impose waiting lists or enrollment caps to limit CHIP expenditures, and (2) after September 1, 2015, states may enroll CHIP-eligible children in qualified health plans in the health insurance exchanges. In addition, in the event that a state’s CHIP allotment is insufficient to fund CHIP coverage for all eligible children, a state must establish procedures to screen children for Medicaid eligibility and enroll those who are Medicaid eligible. For children not eligible for Medicaid, the state must establish procedures to enroll CHIP children in qualified health plans in the health insurance exchanges that have been certified by the Secretary of Health and Human Services to be “at least comparable” to CHIP in terms of benefits and cost sharing.

By Paul Jenks Posted at 11:58 a.m.
Children, Insurance

This Week: HHS Budget Hearings Shadowed by Exchange Enrollment Tax Woes

Congress returns from a recess break and this week dives into an examination of fiscal 2016 spending bill requirements. Health and Human Services Secretary Sylvia Burwell will defend HHS agency funding at Wednesday and Thursday House committee hearings. However, Burwell will likely be quizzed mostly on other topics such as health exchange enrollment estimates plus exchange development and contingency planning. Burwell will also get an opportunity to explain a recently announced expanded enrollment period for people who didn’t comply with the health law’s individual mandate in 2014 and the release of erroneous subsidy data to 800,000 tax filers currently preparing their 2014 tax forms. A House hearing this week will focus on the tax implications of the exchange enrollment process. Also, a Senate hearing on Thursday reviews medical and public health preparedness.

The Senate Commerce, Science and Transportation Committee on Thursday is scheduled to mark up legislation (S 142) sponsored by Democratic Sen. Bill Nelson of Florida that would direct the Consumer Product Safety Commission to issue a childproof packaging rule for liquid nicotine, which is used to refill electronic cigarettes.

Today, the US Department of Agriculture and the Department of Health and Human Services formally published a notice seeking public feedback on the 2015 Dietary Guidelines Advisory Committee Scientific Report. The new guidelines seek to change public behavior on sugary drinks and continues an effort to reduce meat consumption.

February 20, 2015

HHS Offers Enrollment Reprieve

Health and Human Services officials said on Friday that the department will give consumers who face a tax penalty for not having health care coverage in 2014 almost another seven weeks, from March 15 through April 30, to buy health insurance this year.

The original deadline for buying insurance was Feb. 15, although people who did not finish their application have until Feb. 22 to complete it.

HHS officials also said that the administration sent 800,000 people incorrect information in January about the subsidies they got in 2014, which would affect their tax refunds. The administration will send out corrected forms in March.

By Paul Jenks Posted at 11:12 a.m.

February 19, 2015

IRS Offers Some Relief on Employer Coverage Reimbursement

The administration has quietly bowed to pressure from small businesses on taxing employers who offer cash reimbursement to employees to purchase health insurance. The IRS and Department of Labor reminded taxpayers last year that premium reimbursement through health reimbursement accounts does not absolve the employer from the requirement to offer health coverage. The employer will still be subject to an excise tax for failure to provide coverage.

On Wednesday, the IRS announced transition relief from the tax until June 30, 2015. The tax agency justified the delay due to the slow development of small business insurance exchanges and some employers may need more time to obtain group health coverage. Iowa Republican Sen. Charles E. Grassley quickly welcomed the tax enforcement delay and Louisiana Republican Rep. Charles Boustany, Jr. urged a permanent delay of the tax.

By Paul Jenks Posted at 8:15 a.m.

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