Kansas State University


Issues in Health Reform

Month: July 2013

Even without expansion Medicaid enrollment changes coming to Kansas

Kansas is one of 7 states that has not yet made a formal decision about participation in ACA’s allowed expansion of the Medicaid program. (This is a good site for seeing the status of Kansas and other states re expansion.)  Regardless of whether or not Kansas expands Medicaid coverage, there are still changes that need to happen to make the process of applying comply with ACA, including new types of enrollment processes, basically linking Medicaid application with the Marketplace ones.

A recent and worthwhile publication out of the Kansas Health Institute details those changes.  As noted in the publications’ key points:

“1.  ACA adjusts how the state will enroll people in Medicaid and the Children’s Health Insurance Program, and adds requirements for coordination with the newly created health insurance exchange.
2.  Kansas will shift to a single streamlined application for individuals to access Medicaid, CHIP and federal tax credits through the exchange.
3.  Kansas must provide a “no wrong door” application and enrollment process for Medicaid, CHIP and federal tax credits through the exchange so that individuals can apply online, by phone, by mail or in person and be referred automatically to the correct program.
4.  The ACA also requires the state to convert income-counting rules for Medicaid and CHIP applicants to a new federal standard that aligns closely with the rules used for federal tax credits through the exchange.”

New report finds competition lowers premiums by nearly 20 percent in the Health Insurance Marketplace

An important new press release from the Department of Health and Human Services reports that health insurance premiums are much less than had even been anticipated given changes to hold down those costs by ACA.  The report is available at: http://aspe.hhs.gov/health/reports/2013/MarketCompetitionPremiums/rb_premiums.pdf

“Today’s report shows that the Affordable Care Act is working to increase transparency and competition among health insurance plans and drive premiums down,” said Secretary Sebelius.  “The reforms in the health care law ensure consumers will have access to better coverage at a lower cost in 2014.”

Is it legal for the Obama administration to change the date of implementation of the employer mandate?

This editorial by a lawyer in The Washington Post suggests that the administration does not have the authority to say that the date for the employer mandate be delayed.  It will be interesting to watch this particular part of the debate play out.  These has been lots of support from businesses for this delay, perhaps enough that this kind of tweaking of this massive law could make it through Congress to the President’s desk for his signature.  It appears that that might be legally necessary.

Curious that there has not been such concern over the CLASS Act, Title VIII of the Act, “Community Living Assistance Services and Support.” This is basically a bill that instituted a federally run long term care insurance program with no federal dollars. It was put on the back burner because a Department of Health and Human Services analysis revealed there would be many problems with implementation.  Most likely, it will never be implemented. I’m not sure why it was allowed to be mothballed if the administration doesn’t have authority.  The nuances here are clearly beyond my expertise.

How states considered the economic and fiscal trade offs when deciding to expand, or not, their Medicaid programs.

This report from the Urban Institute is a look at how 10 states considered the economic and fiscal trade offs if they were to expand their Medicaid programs.  The report found that in each state where relatively comprehensive analyses of costs and fiscal gains were conducted, the net result showed that, on balance, Medicaid expansion would yield state fiscal advantages.

How the Marketplace works even in spite of delayed employer mandate

Much has been made about the Obama administration’s recent decision to delay till Jan 1, 2015 the implementation of the employer mandate (requirement that all businesses over 50 full time employees provide adequate and affordable health insurance to their workforce).  This thoughtful piece from Wendell Potter (former insurance company CEO) of the Center for Public Integrity states well how this issue is being overblown from the perspective of having insurance available for citizens.  Many believe that the Marketplace will be ready to open in October for plans to begin January 1 and it is that marketplace that offers new potentials for consumers:  anyone can purchase insurance regardless of a pre-existing condition and workers will no longer be job locked because of health insurance benefits leading to the potential for more small business start ups (covered in an earlier blog).

Wendell does not deal with the individual mandate and how that will “encourage” the purchase of insurance (weak disincentive in the form of relatively minimal fines if one does not participate).  Not surprisingly, we are now seeing calls to delay the individual mandate timing to balance the delay in the employer mandate.  The NY Times had this to say about those Republican efforts.

I agree with Wendall that many of the few who work for large firms that will take advantage of this delay will welcome having an alternative Marketplace where they can go to purchase insurance and, depending on income, receive tax credits (basically have Uncle Sam share the premium bill with them).

One issue that I’ve not yet seen discussed has to do with how this is likely to increase the costs borne by the federal budget.  All along ACA has been predicated on the success of three different legs of the stool that make up how Americans are to be insured: employer-based insurance, public insurance, and now the Marketplace.

Employer-based insurance is a major leg of that stool.  Part of ACA’s success in reining in costs was the expectation that larger employers would help foot the bill by offering insurance as a work benefit.  Prices of products and services those businesses sell have always been impacted by how much their insurance costs are.  That will continue, unless and until health care prices are better controlled.

However, if some of this leg is less strong because some of the businesses over 50 don’t have to participate for another year, that means that workers may be looking to another leg of the stool, the Marketplace.  How much that Marketplace may cost the federal government may now be a heightened concern.

The initial ACA cost estimates for the federal portion of Marketplace costs were based on a certain number of individuals using the Marketplace and being eligible for tax credits.   The delay in the employee mandate is likely to increase the numbers looking to the Marketplace (after all, most Americans would have been buying insurance if it had been affordable and they had not been denied coverage).  And many of those new ones in the Marketplace will be eligible for tax credits where they would not have been had they be in employer sponsored plans.  So the costs of the delay of implementation of the employer mandate may result in a larger burden for cost sharing on the part of the federal government.

An interesting benefit of all of this is that we will be able to see more clearly just how much is really being spent on health care, at least as much as we translate the cost of premiums to be a reflection of the cost of care.  Right now many of the costs for the uninsured, the uncompensated care, get built into the cost of premiums for those of us who do purchase insurance.  And the costs borne by businesses are buried in the costs they charge for their products and services.  Perhaps more transparency of what it really is costing us for health care, and what we are really getting for those dollars (not very good population health outcomes) will help us ask the more difficult questions about the quality of what we are buying.  All thoughts for another day.


Delay in implementing large employer (over 50) requirement for offering adequate and affordable health insurance


Breaking news these past few days has been the delay til Jan 2015 in the requirement (and concomitant penalty tax) that large employers (over 50 FTEs) have to offer adequate and affordable insurance to their employees.  I’ve read several takes on this.  Most are political though they do include some truisms.  This one from Nancy Benac of Associated Press has the basics right…though I’d start from her last paragraph that explains what’s still left. 


The Baltimore Sun ran an editorial that focused on the political fallout being worse than the reality.  I think that is likely to be true.


That editorial highlights that only 5% of businesses are over 50 FTEs (most American businesses are apparently relatively small enterprises), and of those over 50 FTE already almost 95% of those offer insurance (and are likely to continue to do so since it is the way to recruit and retain the best and the brightest).  I am not sure if all of those plans would meet the affordable (less than 9.5% of the worker’s income toward premiums for a single plan) nor the adequacy provisions (no more than 40% of the total expected costs of health care out of pocket are to be paid by the worker in a given year).  So, there may be some trickiness here.

As for Extension, I believe that we still need to prepare folks to be ready for Jan 1 start date for the marketplace, and perhaps to remind folks of all of the other consumer protections already built into health  insurance that they can feel more secure about…and that if they aren’t offered health insurance at work, they will now be mandated to purchase it, and that the Marketplace with options is the place to go to find those plans.