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January 27, 2015

Posts in "Insurance"

January 26, 2015

40-Hour Workweek Bill Will Need More Democratic Support

The first GOP-led attempt this year at changing the Affordable Care Act is slowly advancing toward a Senate vote. Further action looms on legislation changing the health care law’s employer coverage threshold for a full-time worker from 30 hours to 40 hours per week. Earlier this month the House passed its measure (HR 30) adjusting the threshold by a vote of 252-172. Senate Republicans are aware of the need to gain Democratic support for the measure, in order to possibly over-ride an expected White House veto. Two Democrats, Joe Manchin of West Virginia and Joe Donnelly of Indiana are among the 34 backers of the Senate version of the bill (S 30). However, many more Democrats will be needed to overcome a presidential veto. Only 12 Democrats voted for the House version of the bill.

Last week, a Senate panel last week debated the merits of a bill and Democrats on Health, Education, Labor and Pensions Committee Democrats appeared unified and seemingly adamant in opposition to the bill.

January 20, 2015

IRS Sets 2015 Coverage Mandate Tax Penalty Levels

The IRS on Friday weighed in with one data point some taxpayers will need to know when planning their tax returns for the 2015 tax year. A taxpayer who is without minimum insurance coverage and is not eligible for an exemption,  is liable for a tax penalty — dubbed an individual shared responsibility payment. Part of the calculation of the penalty hinges on the national average charge for bronze plans offered under the various state health insurance exchanges.

The overall tax penalty is primarily calculated on a percentage of income or a minimum set penalty amount but it is capped by the sum of the monthly national average bronze plan premium. The IRS has calculated the average monthly bronze premium rate for the 2015 tax year at $207 for an individual and $1,035 for a family of five or more. The calculation of the average premium ignores allowed premium differences for age and tobacco use and is based upon the 21-year old, non-smoker premium level. This year’s amount is slightly higher than the rate set for the 2014 tax year of $204 for individuals and $1,020 for families.

 

 

 

 

January 13, 2015

Health Industry Investor Conference Keeps an Eye on Washington

A health care investment conference this week in San Francisco might as well have been held in Washington, DC since much of the market of the health care industry hinges on the actions of Congress and federal agencies. The 33rd annual JPMorgan Healthcare Conference is an annual event in January and attendees usually look toward developing plans ahead in Congress.

CQ HealthBeat’s (@CQHealthTweet) Kerry Young reports that an upcoming congressional plan to entice medical advances, focusing in part streamlining Food and Drug Administration regulations, is one topic of interest for medical device manufacturers. However, a medical device industry leader noted that venture capital investors have recently cut investments in the device industry in part due to concerns about the pace of regulatory developments.

The JPMorgan conference last year served as a venue for health insurance company executives to give an early report on the launch of new health insurance exchanges. The 2013 exchange roll out was disastrous but health insurers at the January conference maintained optimism about overall profitability. Several insurers also noted enrollment increases in the separate Medicare Advantage program. This year, insurer presentations will discuss  their second year performance of the expanded health insurance marketplace.

 

 

 

 

January 12, 2015

Public Option Bill Hides Amid Health Law Adjustment Measures

Much of new health care legislation introduced so far this year addresses some aspect of adjusting, cutting or repealing the 2010 Affordable Care Act. The bills are spurred by the new Republican majority in the Senate, which offers a more receptive pathway for some of the health overhaul adjustment measures. However, not all of the new health law adjustment measures seek to limit the law or are likely to gain the attention of GOP leaders. One particular bill adds a pivotal option to health plans offered on health insurance exchanges.

Illinois Democratic Rep. Jan Schakowsky last week introduced a bill (HR 265) seeking to add a publicly run health insurance plan to the health insurance exchanges. The ‘public option’ concept seeks to effectively replicate a Medicare-like coverage option for the broader population. The plan would charge premiums to cover costs and pay providers based on Medicare provider payment rates.

Rep. Schakowsky has couched the measure as a deficit reduction bill. The Congressional Budget Office in 2013 estimated that a public option could reduce the federal budget deficit by $158 billion through 2023. The reduction estimate is pegged on a decrease in insurance subsidies — since the public plan could lower the benchmark plan premiums and subsidy calculation levels. Also, the CBO estimates a public plan would increase revenues in part because more employers could forgo offering health coverage and possibly shift the share of employee compensation from non-taxable health coverage to taxable wages and salaries.

The 114th: CQ Roll Call’s Guide to the New Congress

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By Paul Jenks Posted at 10:36 a.m.
Insurance

January 9, 2015

Supreme Court Holds Keys to the Fate of Health Law

While Congress wrestles with various bills addressing the Affordable Care Act, immediate action to entirely repeal the law is unlikely. President Obama will not sign any repeal bill and even some Republicans are wary of an immediate repeal effort.

However, the Supreme Court this year may provide the catalyst for a major restructuring of the health overhaul law. The court later this year will offer an opinion on a challenge to insurance subsidies offered to plans purchased through federally operated insurance exchanges. The federal government operates exchanges in 34 states and the elimination of subsidies would drastically change insurance enrollment and premium prices.

Two studies released this week examine the impact of the elimination of insurance subsidies. A RAND report notes that an end to subsidies would cause a dramatic drop in enrollment and a 47 percent hike in premiums. A separate Urban Institute study also estimates levels of lost of coverage and higher premiums.

 

 

 

January 8, 2015

Study: Employer Health Plan Premium Growth Slows, But Offers Little Help to Consumers

Employers have switched from rapidly increasing health insurance premiums to increasing out-of-pocket costs for health plans. A state-by-state report from the Commonwealth Fund on trends in employer health insurance coverage finds that the average deductible in 2013 for employer plans in most states exceeded $1,000. The rise in out-of-pocket spending coincides with a slowing of growth in premium increases. However, the lower 4.1 percent premium growth rate, compared to an average 5.1 percent growth rate from previous years, is not matched by overall wage increases.

CQ HealthBeat’s (@CQHealthTweet) Kerry Young reports (subscription) that workers’ 2013 contributions to their health insurance premiums in every state amount to a higher share of state median income than they did a decade earlier. In 15 states, employees’ annual payment for their share of premiums rose by 100 percent or more. Workers’ out-of-pocket costs for premium contributions and deductibles in 2013 also accounted for a higher percentage of median income in all states compared to 2003.

The 114th: CQ Roll Call’s Guide to the New Congress

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By Paul Jenks Posted at 10:29 a.m.
Insurance

January 6, 2015

Study: Medicare Preventive Care Visits Spike

A major Medicare element of the Affordable Care Act was a requirement to fully cover annual preventive care visits. Before 2005, Medicare did not cover any preventive care visits, except for mammography and Pap smears. In 2011, the health law added annual wellness visit coverage offering a range of preventive care services at no cost to the beneficiary.

A research study released this week in HealthAffairs (view abstract) indicates that the requirement appears to be enticing wellness consultations. Preventive care visits in the test group increased from 1.4 percent before the health law wellness visit addition to 27.5 percent afterwards. Patients on Medicare’s standard fee-for-service plans have flocked toward preventive care services. However, the study notes that fee-for-service preventive care visits are still lower than private and Medicare HMO plans.

See also: Preventive Health Services Recommendations for Children

By Paul Jenks Posted at 9:22 a.m.
Insurance, Medicare

House Races Toward a Vote on Changing Employer Health Insurance Coverage Threshold

Congress reassembles today for a new biennial session and all pending bills from last year must be re-introduced. This week, a measure addressing employer requirements for health insurance coverage will be quickly printed and heads toward a scheduled House vote on Thursday. The bill adjusts the Affordable Care Act’s definition of a full-time employee requiring insurance coverage from 30 hours a week to 40 hours.

Supporters of the adjustment claim that the 30-hour rule entices employers to stop hiring or reduce employee hours below the 30-hour threshold. A Hoover Institution fellow testified before a House committee in 2014 that 2.6 million Americans making less than $30,000 per year would be the ones most adversely affected by businesses reducing hours because of that definition of full-time worker.

Opponents of the bill, primarily Democrats but also some conservative commentators, say the 30-hour threshold was designed to minimize gaming, since most businesses now use a threshold higher than 30 hours and would have to substantially reduce hours and alter their business practices to avoid providing health insurance. Democrats claim that moving to 40 hours would place increase the risk of having their hours just slightly reduced so businesses could avoid the mandate.

A similar bill passed the House last year but never gained the attention of the Senate. Additionally, the $45.7 billion estimated cost of the measure  may not be offset with spending cuts or tax increases.

The 114th: CQ Roll Call’s Guide to the New Congress

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By Paul Jenks Posted at 8:21 a.m.
Insurance

December 18, 2014

Lawmakers Issue Warnings on Lost Subsidies Ahead of Supreme Court Decision

A Supreme Court decision next year could severely complicate the ongoing implementation of Affordable Care Act. A court ruling in favor of a challenge (King v. Burwell) on the legality of insurance subsidies offered on exchanges operated by the federal government could halt subsidies on the federal exchanges and cause a cascade of problems. Current subsidies for 13 million people could be voided and premium prices would effectively skyrocket.

Congressional anxiety over the impact of a possible ruling against the subsidies prompted a group of Republican senators on Wednesday to write to the Treasury Department inquiring about plans for managing the impact of voided subsidies and consumer repayments. The group also inquired about the implications for IRS rules on insurance coverage mandate tax penalties, since the availability of subsidies also triggers insurance coverage tax penalties.

Meanwhile, Democrats on the House Energy and Commerce Committee this week assembled a district-by-district analysis of the impact of a decision striking down the federal exchange subsidies.

HealthBeat’s (@CQHealthTweet) John Reichard reported (subscription) last month that the collapse of federal subsidies for 37 states with federal exchanges would not impact the 13 states that currently operate their own exchanges and could entice more states to take over exchange operations. Also, congressional action in response to a possible court decision to halt subsidies could hinge on Democrats finding a way to keep subsidies flowing nationwide and Republican efforts to halt employer and individual insurance coverage mandates.

 

 

December 1, 2014

Gallup Poll: Cost Concerns Continue to Thwart Health Care Treatment Decisions

Increasing the availability of health insurance coverage — despite expanded insurance access offered through the Affordable Care Act — has not eliminated patient concerns over the cost of health care. A Gallup poll released over the holiday noted that the rate of insured persons who have put off medical treatment because of cost has increased from 25 percent in 2013 to 34 percent in 2014. However, only 22 percent of persons covered by Medicare or Medicaid indicated delayed treatment. Overall, the survey says that 22 percent have put off serious medical treatment due to cost concerns. Gallup suggests that the uptick in persons avoiding health care is possibly due to high insurance plan deductibles and co-payments due at the time of treatment, plus possible consumer confusion over coverage options.

 

 

 

 

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

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