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16
Dec

Don’t Like Your Plan? You May Have to Keep It

Written by dreilly. Posted in Blog, health care reform, PPACA, premium costs

The President said “if you like your health plan, then you can keep it.  We heard it over and over during the health reform debate.  More recently we’ve heard it over and over again, only now it’s to point out the inaccuracy of that statement. 

Millions of individual policies are set to terminate on January 1st because they do not meet the new requirements established by the Affordable Care Act.  Millions more face the same as small businesses also learn their policies are no longer available.  We all now know the statement was false.  You really can’t keep your health plan if you like it. 

What we also now know is that millions and millions of people are forced to select new plans, not to mention the millions of uninsured the ACA is supposed to newly enroll.  Additionally, higher costs associated with the newly qualified small business plans will shift a large percentage of small business policies to the individual market over as we proceed through 2014. 

All of these members will select a new plan.  And many will select plans they don’t like.  Some will make hasty decisions due to the shortened open enrollment window created by the website difficulties.  Many won’t understand the meaning of higher deductibles and other out of pocket expenses.  Many won’t realize their access to doctors may be limited.  Many will find higher pharmacy costs.   

So that begs the question.  What if you don’t like your plan?  The ACA creates an annual open enrollment for individual policies beginning in November and ending in December of each year.  Enrollment outside this annual window is not allowed without a qualifying life status change.   This means if you decide that you don’t like your plan, then you’ll just have to keep it, at least until the next open enrollment period. 

11
Mar

Smartphone to be Taxed as Medical Device?

Written by dreilly. Posted in Blog, health care reform, PPACA, premium costs

iphone

ObamaCare imposed a tax on medical device manufacturers.  Items like wheelchairs, crutches, and leg braces are included.   So are things like tongue depressors, syringes, and latex gloves.  The tax, at 2.3%, increases the cost of just about every medical item you might see in a doctor’s office or emergency room, including…… your smartphone? 

That’s right.  The Food and Drug Administration is considering whether to designate smartphones, tablets, and apps as medical devices subject to the new tax!  Millions of us use apps to measure calories, track weight loss, stick to drug regimens, monitor diabetes, etc.  We might soon pay the price. 

So, should the use of an app determine whether a smartphone or tablet is subject to the 2.3% medical device tax?  Well, that’s exactly what the Committee on Energy and Commerce would like to know.  They’ve sent a letter to the FDA and requested a response by March 15th.

04
Mar

Rates to Increase for Young People, For All

Written by dreilly. Posted in Blog, health care reform, premium costs

Warning over the weekend from the National Association of Health Underwriters……

“Rates could rise significantly for small employers and younger individuals in the individual and small group markets. An Oliver Wyman study shows that rates for young participants in the individual market would increase 45% and a survey of insurers conducted by the American Action Forum shows that rates could go up for young, healthy individuals by 189%.”

The reason?  Recently published rules established by the Department of Health and Human Services limit the ability of insurance policies to charge younger members lower costs than older members. 

Under current rules, in many cases, the oldest policy-holder can be charged as much as 5 times as much the youngest policy-holder.  Effective in 2014 the new rule will limit the difference to 3 times.  This means younger members will see a significant increase to rates as the outer limits of the rate tables squeeze inward.  

With this in mind it makes sense that older members should see lower rates, but this may not necessarily materialize.  As rate shock sets in for millions of young, statistically healthy, policy-holders in 2014, it’s expected many will forego the more expensive coverage and opt instead to pay the much-lower $95 annual tax penalty.

As this occurs, the variety of State-based risk pools will see a demographic shift to an older, statistically more-unhealthy population.  This will lead to higher claim costs relative to premium dollars received, so naturally rates must rise to keep pace.

Fortunately this rate shock should be short term as the market will eventually adjust to higher costs.   Then we can get back to the normal significant increases.

01
Feb

IRS: Family Health Plan Cost $20K in 2016!

Written by dreilly. Posted in Blog, health care reform, PPACA, premium costs

A recently released IRS final regulation makes an assumption that the average cost for a family health insurance plan in 2016 under ObamaCare will be $20,000.  And that’s for the lowest plan benefit!   

Beginning in 2014, the individual mandate, upheld by the Supreme Court last summer, requires U.S. citizens to either carry qualified health coverage or pay a tax.  Qualified plans are established as metal options, with a bronze design offering the lowest benefit availability and platinum offering the highest.  Silver and gold fall incrementally in between. 

In an effort to help educate consumers about the potential for tax penalty under the law the regulation provides several situational examples.   Making the assumption “The annual national average bronze plan premium for a family of 5 is $20,000,” IRS goes on to explain how that same family of five (2 adults, 3 children) with household income of $120,000 would face an annual tax penalty of $2,400.  

For the uninsured, a new $20,000 health plan or a $2,400 tax….what’s a family to do? 

For those of us who are insured….The Kaiser Family Foundation showed family premiums topped $15,000 a year in 2011.  IRS now projects $5,000 more, or 25%, by 2016.  So what happened to the ObamaCare promise of  “a health care plan that would save the average family$2,500 on their premiums?”

24
Jan

Feds to Delay Employer PPACA Notice

Written by dreilly. Posted in Blog, compliance, employee communications, health care reform, PPACA

The Patient Protection and Affordable Care Act (PPACA) requires employers to provide notice to employees about the existence of State-based insurance exchanges.  The purpose of the notice is to provide employees necessary information to understand the availability of new health plan options and to help employees compare those options against costs and benefits available through the employment-based coverage.   PPACA requires employers to provide this notice by March 1, 2013 or, you guessed it, face potential penalties!  So what are employers to provide?

Well, we don’t quite know.  To date, neither the federal government nor the state exchanges have provided guidance regarding the layout or content of the notice.  As with several other areas of reform implementation the reality of delays in the regulatory process trump the stated deadlines.  With no guidance employers have nothing to provide. 

Fortunately, it is expected the federal government will delay the notice requirement, and employers will escape the looming deadline, at least for the time being.  A new date has not yet been issued, but it is widely anticipated the feds will enforce a new deadline in the Fall, closer to the October 1, 2013 kick-off date for open enrollment in the exchanges.   Employers should watch for an announcement soon.

11
Dec

5 Taxes to Increase Health Premiums

Written by dreilly. Posted in Blog, education, health care reform, PPACA, premium costs

You might think the goal of health reform is to make healthcare more affordable.  The bill after all is called the Patient Protection and Affordable Care Act.  

Well the truth is this.  Affordability is a key component.  But sadly for many of us who already have health insurance, we won’t reap the benefit of lower costs.  Premiums will rise for many of us to offset the massive costs of federal subsidies designed to help the uninsured, as well as many currently insured, pay for coverage.   But subsidies must be paid for. 

Back in 2009 when the politic debate raged over the legislation, Congress and the Administration realized the public would never support sweeping taxes on individuals to finance the bill.  So instead they raised taxes on the large healthcare corporations that, they argued, could more easily absorb the costs.  

Well, let’s take a look at a few financing mechanisms that begin between in 2013 and 2014 and consider how these requirements will assist in the goal of affordability.   

1)      Big Pharma will be required to kick in between $2.3 to $4.8 billion from the profits they receive from selling brand name prescriptions.  Let us not forget that U.S. pharmacy companies reap the benefit of U.S. laws that allow them to sell the same drugs to U.S. citizens at costs far above the costs they sell to citizens of other countries.  One can certainly argue they should pay the price for those protections.  However, the simple truth is that higher taxes on pharmaceuticals results in higher costs to health insurance carriers that pay claims.  Premiums will rise to cover.

2)      Medical device manufacturers will be charged a new 2.3% tax on the products they make.  So add 2.3% to the cost for things like crutches, braces, and titanium joint replacements, also items like tongue depressors and latex gloves.  Premiums will rise to cover.

3)      Health insurance companies will be required to pay a new Comparative Effectiveness Research Fee.  This is a relatively inexpensive fee, first payable as of July 2013 that is designed to fund studies to determine which types of procedures and treatments perform better than others.  Insurance carriers will pay just one dollar per participant per year to start.  The fee increases to two dollars per participant in year two and then indexes to medical inflation after that.  The fee is set to expire in 2019.  This of course assumes that a tax intended to end actually ends.  Although relatively inexpensive, it adds cost.  Premiums will rise to cover.

4)      Health insurance companies will be required to pay a new health insurance industry fee.  Fees are estimated to be between 2 to 2.5% of premiums beginning in 2014, rising to 3 to 4% of premiums in later years.   Premiums will rise to cover.

5)      Health insurance companies will be required to pay a reinsurance assessment fee.  This is which is estimated to cost between $60 to $90 per participant per year in 2014, $40 to $60 in 2015, and $25-$35 in 2016.  Premiums will rise to cover.   

Affordability in the Affordable Care Act is going to be tough to achieve.  We’ll have to hope for patient protection.

26
Jun

Healthcare Reform Supreme Court Decision

Written by dreilly. Posted in Blog, health care reform, PPACA

The Supreme Court will rule in less than 48 hours on the fate of Obama’s signature legislation, the Patient Protection and Affordable Care Act (PPACA). 

This has been one of the most watched cases and most anticipated decisions in at least a generation.  Arguably, not since Roe V. Wade has a case stirred so much emotion, so much controversy.  

The U.S. Supreme Court is expected to release its landmark healthcare reform decision this Thursday, June 28, 2012.

Sure, the Court has heard plenty of important battles since that divisive decision forty years ago – death penalty, immigration, gays in the military, even the outcome of a presidential election.  But none of these decisions could have been expected to directly touch every man, woman, and child in this country. 

The Pundits and industry-watchers have debated and surmised the outcome for months.  White papers, panelist presentations, debates, commentaries, protests, commercials, and the endless discussion across the 24-hour news cycle – none of it matters anymore.  Nobody sways the outcome.  And nobody knows the outcome, except for nine Justices who secretly decided the case many weeks ago. 

We can only wait, and wait we have.  But it’s almost over.  This Thursday, 10am is decision day.  And then we’ll know the outcome.  We’ll know where we’re going, what health care in the country will look like, how it will touch each and every one of us, right?  Don’t bet on it.

We seek clarity.   Yes, we’ll have a decision.  And it will be, decidedly, disappointing. Confusion!  And, the campaigns will fill their war rooms.    The lobbyists will schedule their appointments. The lawyers will start their research.  The pundits will hit the air waves. 

And you and I and our doctors will know less than we did on Wednesday.  Welcome to Healthcare Reform, Round Two.

10
Apr

What is Your Opinion of ObamaCare?

Written by dreilly. Posted in Blog, health care reform, PPACA

Since it’s passage on march 23, 2010, public opinion about the Patient Protection and Affordable Care Act (PPACA) has remained deeply divided.  For two years now we’ve been treated to an endless supply of polls that demonstrate the philosophical differences amoung Democrats and Republicans.   It’s been great fodder for campaign commercials and weekend news shows.  But what do the party polls really tell us – that Democrats and Republicans disagree?  We should all be surprised! 

The Henry J. Kaiser Family Foundation recently released an interesting tracking tool that looks at public opinion of PPACA in a more detailed, more interesting, way.  This tracker looks at opinions and how they may or may not have changed for of a variety of groups since President Obama signed the legislation.  The data demonstrates differences among party affiliation, but more importantly, it also demonstrates the differences among groups based upon age, gender, income, and even insurance status.  While these results may not be so surprising either, the data certainly paints a better picture of how deeply divided the country remains over ObamaCare.  

It’s an interesting tool.  Check it out.    Click here.

06
Jan

Healthcare Rationing with Obamacare?

Written by dreilly. Posted in Blog, health care reform, PPACA

It depends upon the way you look at it.

A little known provision included in the healthcare law includes a new tax for health insurers.  Beginning in 2012, insurers will be required to pay $1 per member as a means to finance comparative effective research.  This fee rises to $2 in 2013.

The goal of comparative effectiveness research is to determine which procedures and approaches to health management achieve the most successful and cost effective results.  Does medicine A produce better results than medicine B?  Does one procedure outperform another procedure?  Do differences exist by geographic region?  By population segment?    By medical school?  By insurance company?

These are all of course good questions that should be answered, and a tax of dollar or two doesn’t sound so bad to pay for the research.  Understanding which medications and procedures produce the best and most cost effective results would provide enormous help in controlling health costs.

Now to be sure private industry already conducts comparative research.  But a general distrust of insurance companies and the inevitable pushback from plan participants (and from politicians) of any suggestion to change or limit choice diminishes the potential investment.  It’s driven by profit margin, many say.

Now Obamacare charges the duty to the federal government.  Makes sense.  After all, federal officials don’t make decisions based upon profit margins, right?  They have no interest in steering patients to specific hospitals or to replace higher cost medications with lower cost alternatives, do they?  They wouldn’t limit choice or procedures based upon cost, would they?

Comparative effectiveness is important.  It’s necessary.  And it’s integral to the survival of the U.S. healthcare system.  Insurance companies have pursued their own research for years.  Now the federal government will lead the way.  The question is this.  What will the government do with the research?

 

04
Nov

Wellness Programs in PPACA

Written by dreilly. Posted in education, health care reform, PPACA, premium costs

The debate over the Patient Protection and Affordable Care Act (PPACA) may have divided Congress and even theelectorate, but some areas of law have bi-partisan support.  One such area is the promotion of wellness initiatives.

It’s no secret that health costs in the United States have been increasing faster than wages or inflation for many years.  We’re on an unsustainable track.  But a close look at actual claims shows that as much as 75% of expenditures go toward the care and treatment for chronic illnesses like cancer, heart disease, asthma, blood pressure and cholesterol problems and the biggest one, obesity.   It’s been said that obesity is an epidemic in the Unites States and poor weight management can be blamed for a number of these other chronic illnesses.

But here’s the point.  Chronic diseases are often preventable, and if not, they’re at least controllable in most cases.  While many can point to genetics and heredity as root causes of disease, it’s obvious that lifestyle choices like smoking, alcohol abuse, poor eating habits, and lack of exercise are main causes for many people.

Promoting wellness as a means to change behavior isn’t a new concept, but provisions in PPACA will encourage better practices in this area.  For starters, small employers will be eligible this year for grants to launch wellness initiatives.  The program will offer up to $200 million to employers with fewer than 100 full time employees who did not have a wellness program in place when the law passed on March 23, 2010.  Details have yet to emerge, but the application process should be known by the end of the year.

Beginning in 2014 employers will be permitted to discount employee health premiums by as much as 30% for those who participate in wellness programs or for those who reach certain measurable health targets.  The discount could be increased to as much as 50% at the discretion of Secretary of Health and Human Services.  These allowances should encourage employers to support employees with wellness initiatives, which in turn could reduce health costs.

The Centers for Disease Control and Prevention will be tasked with providing technical support to employers as a means to assist employers launch and manage their programs.   Additionally, CDC will be responsible for reporting back to Congress about best practices as means for improving the law’s allowances.

The debate over PPACA is far from over.  Litigation, new legislation, funding, all are issues that could derail portions of the law or even the law itself.  But regardless of the outcomes here, it would be nice to see some true successes result from the practical wellness approaches included in the law.  We just might see some lower costs if we can get ourselves off the couch.  Fat chance?

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