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Issues in Health Reform

Category: ACA and workers

The ACA’s first five years

Posted on by rriporte

Recent testimony to the Senate shows different perspectives on the success and continuing challenges of the Affordable Care Act.

The Commonwealth’s testimony provides a well documented report on the different ways in which the ACA has changed health care delivery in the US. The Commonwealth used Congressional Budget Office figures, usually considered an unbiased source.

Basically, the good news for consumers:

  • more people, of all races and ages, are insured
  • most of those people are satisfied with their insurance
  • less people report being unable to get needed care because of costs…a reflection of lessening financial difficulties due to medical care costs
  • people have found paying for insurance easier in the Marketplace (subsidies have gone a long way…and yes, a pending King v Burwell judgment may change all of that)
  • the markets themselves have proved quite stable
  • states that have not expanded Medicaid (including Kansas) continue to have higher rates of uninsured
  • the rate of growth of health care spending has slowed allowing reduction in projected costs
  • young adults remaining on parents’ plans is significant

Know that other testimony was not as positive. Small businesses find that they are still struggling to provide insurance, sometimes in a volatile market. (See the testimony from the National Federation of Independent Business.) Note though that since the ACA does not mandate small businesses to provide insurance, many of those workers are able to seek insurance in the Marketplaces.  So while it may impact the small businesses in that being able to provide employer sponsored coverage is a currently a marketing and recruitment tool for the best and most skilled workers, those workers still have options.  It will be interesting to watch how this part of the market responds, especially as the SHOP (Small Business Health Options Programs) becomes more popular. The SHOPs offer businesses under 50 employees a marketplace of their own to find plans at better rates. Those under 25 employees are also eligible for subsidies to assist them in paying for premiums for their employees.

And testimony from the Mr. Holtz-Eakin, President of the American Action Forum,was most negative of all:

“The main promise that we heard repeated over and over again was that the ACA would provide universal access to affordable coverage of high-quality health care. In these remarks I will discuss (1) coverage, (2) affordability, (3) quality, and (4) access to care under the ACA.

The ACA has been riddled with wasted money and broken promises. It has proven to be poor growth policy, red-ink budget policy, flawed insurance policy, and poor health care policy. Instead of growth, it has contributed to a mediocre recovery. Instead of fiscal responsibility, it has exacerbated the red ink that plagues the government. Instead of universal coverage for the uninsured, the retention of valued policies and lower premiums, it has produced spotty, uneven coverage expansions, the forcible loss of valued polices and higher premiums for all. And instead of bending the cost curve and raising quality, it has delivered limited access to doctors and the loss of preferred providers.”

This testimony seems focused more on technical glitches and precise wording of promises, rather than an ability to understand the major successes that have accrued to millions of Americans as noted in the CBO figures and Commonwealth report. Mr. Holtz-Eakin speaks to premium increases without regard to the significant impact the tax subsidies are having on the actual out of pocket costs to consumers of those premiums. He complains that Medicaid is not doing as it had intended, yet it was the Supreme Court’s decision that limited significantly the impact Medicaid expansion could have on decreasing the numbers of uninsured, not the ACA itself. Mr. Holtz-Eakin seems concerned with not having access to preferred providers but those decisions are really within the realm of the insurance plans, and they have been changing those, without any laws, for years. Suffice it to say that I find this testimonial to be mostly emotionally charged, focused on specifics of language, rather than seeing the millions who have been helped by ACA consumer protections (including no exclusions for pre-existing conditions, no annual or lifetime maximums of coverage, no non-issuance of plans, and coverage of preventive service, free at time of service).

There are problems with ACA, as noted by the business community, and there is still a long way to go on reforming the system of health care delivery. But as noted by the Commonwealth testimony:

“ At the five-year mark, there is strong evidence that the Affordable Care Act has resulted in gains in coverage, affordability, and access to health care services. It may also have created the foundation for significant changes to the way we deliver and pay for care. Taken together, a promising picture emerges. Five years, however, is a short time in the life of legislation as ambitious and sweeping as the ACA. Additional studies and evaluations will be necessary to paint a fuller picture of the law’s impact on Americans and their health care system.”

Who gets tax subsidies to pay for health insurance anyway?

Posted on by rriporte
As the Supreme Court is set next week to hear King v Burwell, the case against tax subsidies’ eligibility for non state Exchange state purchasers of health insurance, earlier post, this essay points out how most of us receive subsidies to pay for health insurance..whether it’s the Medicare population who paid into the system no where near what they are taking out, or those of us whose employers get our insurance premiums as a business write-off, and we get the benefit as pre-tax income.  As Rampell points out, these facts are important to understand in the face of the resistance many have to the tax subsidies received by most of the folks who purchase insurance through the Marketplace Exchanges.  The tax subsidies for those who work but don’t have employer sponsored insurance levels the playing field.   http://www.washingtonpost.com/opinions/if-you-want-to-know-who-gets-health-care-handouts-look-in-the-mirror/2015/02/26/53e2de84-bdf9-11e4-bdfa-b8e8f594e6ee_story.html?wpisrc=nl_opinions&wpmm=1

How do I get health insurance before the next open enrollment period starting Nov 15, 2014?

Posted on by rriporte

 

 

 

Everyone with few exceptions (see https://www.healthcare.gov/exemptions) must have health insurance or may have to pay a penalty. Medicare Tri-Care, VA and Indian Health Service all remain the main insurance for those eligible for those programs. Because these programs qualify as insurance beneficiaries are not subject to penalties for being uninsured.

 Here are health insurance options for you to consider.

Your Job

 •   Your insurance stays the same unless your employer decides to make changes. If this work-based insurance is not affordable (costs more than 9.5% of your household income for a single policy) you may be eligible for financial help if purchasing a policy in the Marketplace.

 The Marketplace at healthcare.gov

 •   The Marketplace refers to a place for specific kinds of insurance policies that have been approved by the federal government to offer policies in Kansas.  Most think of it as the website where those policies can be found but it exists regardless of the website.  People can enroll via phone, mail, in person, or yes at the website.  The website offers an easy way to view and compare plans for providers, services and price. Anyone can shop in the Marketplace however, open enrollment is closed for 2014.

  •   Open enrollment for 2014 ended March 31. Only people with special circumstances can purchase in the Marketplace now   marketplace.cms.gov/help-us/enroll-limited-circumstances.pdf

  On November 15, 2014 the Marketplace will reopen for everyone else. KHN has a good story about those circumstances http://www.kaiserhealthnews.org/Stories/2014/May/09/Andrew-reader-question-on-insurance-between-open-enrollments .aspx?utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_source=hs_email &utm_medium=email&utm_contnt=12736814&hsenc+p2ANqtz-8xGUxlk04t5iCJ8D7Y8Jwxuv9SS7HSFMuLR4B3eRiCwWSwqRzCZzABM9aYnlvSyRfYLombN4pnWb0OtxE6FVYARW2m7A&_hsmi=12736814

  •   U.S. citizens, nationals and lawfully present immigrants living in the United States and not in prison can enroll in health insurance in the Marketplace.

  •   If you purchase in the Marketplace AND your household income is less than 400% of the federal poverty level (FPL), you may get tax credits to reduce the cost of the premium.  If it is less than 250% of FPL, you may also get help paying for out-of-pocket costs. This is not true for those who have work-based insurance that is considered adequate and affordable. Adequate means that the plan pays on average 60% of all your medical costs in a given year. Affordable is considered less than 9.5% of your annual household income. If work based insurance meets those criteria than you are not eligible for tax credits.

 KanCare at http://www.kancare.ks.gov/

 •   KanCare is the Kansas Medicaid program for U.S. citizens and lawfully present immigrants of low income who are over 65, under 18, or disabled.

 •   Children and pregnant women may be eligible with household incomes less than 225% FPL.

  •      Those over 65 have both income and asset limits, depending on the specific program.

  •   Check eligibility at http://www.kancare.ks.gov/ or the Marketplace healthcare.gov

  Additional options for young adults

  •   Stay on parents’ policies until age 26.

  •   Buy a catastrophic plan (for those under age 30 or with special financial circumstances).

  •   For higher education students, ask about student health insurance.

  Buy a private plan from an agent or broker.

  To get help or learn more to enroll in the Marketplace or KanCare

 •   Call the National Help Center at 1-800-318-2596 available 24/7.

 

Marketplace Eligibility Monthly Income

Marketplace Eligibility Monthly Income

Group Size

Up to 250% FPL Help with out-of-pocket costs

Up to 400% FPL Income limit for Tax Credits

1

$2,394

$3,830

2

$3,231

$5,170

3

$4,069

$6,510

For each additional person add

For each additional person add

$837

$1340

 

Report argues for Medicaid expansion in Kansas

Posted on by rriporte

A recent report from the Kansas Center for Economic growth makes the case the expanding Medicaid would be good for Kansas local economies, especially rural communities, and the state as a whole. “Medicaid expansion would go a long way toward increasing economic security for uninsured workers.  It also would be an asset for small businesses—which will benefit from healthier and more productive employees—and the economy as a whole—which will benefit from the flow of federal dollars into the state.” The report details the types of occupations, and the wages in those occupations, where working class people are most likely to be uninsured and eligible for Medicaid if the state chose to expand within new federal guidelines.

The Affordable Care Act was crafted in a way that relied on states expanded their Medicaid programs to cover individuals who made less than 133% of the federal poverty line (138% in actuality when tax deductions were considered).  The federal government is set to pick up 100% of the expenses for 3 years and then 90% thereafter.  The Supreme Court decision of June 2012 made Medicaid expansions voluntary.  Kansas is one of 25 states that has not chosen to expand.

 

 

Smaller large employers (50-99) are now being given until Jan 2016 to come into compliance with ACA employer mandate

Posted on by rriporte

The Obama administration has made what many consider a political move by extending the deadline for compliance with the employer mandate for smaller large employers (50-99).  The Kaiser Foundation has rounded up several news article that have covered the story.

Previous blogs (July 4, 12, August 20, 2013) discussed how the original delay in the employer mandate really didn’t matter much in terms of getting Americans insured.  That argument is still relevant here. It’s the Individual Mandate that matters…even if some may prefer the idea of having employers be more responsible for offering health insurance as a benefit to their employees.

As we may remember the original employer mandate was to apply Jan 1, 2014 for all businesses with over 50 employees.  These businesses were going to be required to offer insurance to all of their full time employees (defined as 30 hrs week or more).

The other requirements were that the insurance must be

  • affordable, defined as premiums that cost no more to the worker than 9.5% of annual household income AND
  • adequate, an insurance term that categorizes the type of shared costs of the plan.  To be adequate, the plans must overall pay for about 60% of the annual costs of care on average for their workers. These plans in the Marketplace are categorized as Bronze plans.

The first delay was giving those businesses until Jan 1, 2015.  This extended that delay for the smallest of those larger businesses til Jan 1, 2016. 

While trying to quell one political concern (having insurance policies cancelled or changed around November election time 2014) it raises a new one:  why do businesses keep getting a delay in their mandate but not individuals?  The answer to that may have to do more with the economics of how ACA is designed rather than political expediency or out-right unfairness. (And this was addressed in that Aug 20 blog.)

The goal of the ACA was to get as many people insured, as fully as possible.  Even if employers aren’t mandated to provide insurance to their workers there are now alternatives with relatively affordable plans:  the Marketplaces.

The plans being offered in the Marketplaces are both “affordable” and at least “adequate” as defined above.  That is, they are much better than many of the plans that people in the private market, and even those in employer-sponsored plans, were holding.  While some have complained that the premiums of the policies in the Marketplaces are too high, there are tax credits to help share the cost of those premiums for individuals and families under 400% of poverty (roughly $94,200 for a family of four).  BUT those Marketplace plans are really very affordable for people who had previously been locked out of insurance all together, usually because they had pre-existing conditions.

So, even though many may be bothered by not requiring employers to offer insurance, others will see that as long as there are policies that cannot turn away seekers, and policies that are relatively affordable, then ACA can continue to march toward fuller insurance for all Americans.

It could also be that one of the ACA best assets is that it frees Americans from relying on the workplace for insurance.  That is, as we delink insurance from the workplace it will free up a lot more opportunities for people to work where and for whom they choose.(see blog dated Nov 12.)  The Marketplaces offer the group rated premiums that previously were only available to the largest of businesses.  Now individuals can get those policies on their own.  In fact, this latter issue is one that caused a stir last week.  A CBO report was issued that said 2 million people would leave the workforce.  Republicans claimed this was because of employers laying off workers.  The CBO actually attributed most of this chance to choices people would be making to leave jobs they no longer wanted.  Apparently many are working solely to maintain health insurance coverage which they would not be able to purchase elsewhere (or be eligible for Medicaid in states where eligibility criteria was expanding to include all who were under 138% of the poverty line).

As a reminder, businesses with less than 50 employees were NOT mandated to offer insurance and those under 25 employees were offered financial tax incentives if they were to choose to do so.

 

 

Delinking health insurance from the workplace

Posted on by rriporte

I’ve been speaking to one main advantage of Obamacare being the lifting of job lock, where folks get to choose to work where they want and not be afraid of being cut off from health insurance. Thomas Friedman’s opinion in the New York Times adds a particular urgency to this issue…that new jobs being creating are going to be less and less those that will come with insurance as a fringe benefit, so that the new economy dictates the need for delinking insurance from the workplace or at the least, having affordable options for workers and their families.

Job lock is lifted because now no one can be denied health insurance because of pre-existing conditions, there is place to purchase health insurance that offers large group level premiums similar to those in workplace (that’s what the Exchanges are about), and where feds operate similarly to employers by helping folks pay for those plans.  With the feds, they help those with less than 400% of the federal poverty line pay for insurance by way of the tax credits.  Employers usually paid a portion of the premium as well but rarely based on salary level of employee.

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

Posted on by rriporte

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 the Marketplace works even in spite of delayed employer mandate

Posted on by rriporte

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.

 

Will companies stop offering health insurance because of ACA?

Posted on by rriporte

This Wall Street Journal article poses this interesting question to three expert: Kevin Kuhlman, a manager of legislative affairs at the National Federation of Independent Business, a research and lobbying group for small business; Christine Eibner, an economist at RAND Corp. who has studied the possible effects of the law on health-insurance markets; and David Marini, managing director, strategic advisory services, at Automatic Data Processing Inc.,ADP +0.52% who also has studied the law’s effects.

They speak to the potential for some employers to decrease work hours to avoid the penalty for not offering insurance to all workers, but note that this is not a certainty.  Kuhlman notes that employer based insurance had already been declining significantly pre ACA.   Their discussion is worth a read.  Eibner presents more data to back up her assertions.

Here is a journal article by Arthur Tacchino that covers much of the same topic but really challenges: A new way to think about employer-sponsored health care coverage strategies.

More businesses due to ACA

Posted on by rriporte

Job lock has been one of resulting problems with the way Americans currently purchase health insurance.  Because the individual market is so expensive, and because many people would have pre-existing conditions that would have excluded them from purchasing a new insurance plan, many people stay at jobs they do not like.

So, with the ability to purchase insurance in the marketplace with no exclusions due to pre-existing conditions it is predicted that more people will change jobs and even pursue new entrepreneurial ventures.  This is detailed in a new report from the Robert Wood Johnson Foundation, the Urban Institute and Georgetown University’s Health Policy Institute. The number of self-employed people is expected to rise by 1.5 million — a relative increase of more than 11 percent — as a direct result of the health care overhaul.