$621 billion is a pretty eye-glazing number. Most readers will find it easier to think about how this number translates to a typical American family—the very family candidate Obama promised would see $2,500 in annual savings as far as the eye could see. So I have taken the latest year-by-year projections, divided by the projected U.S. population to determine the added amount per person and multiplied the result by 4.
Monday, September 30, 2013
Here is how Democrats mapped out the future in March 2010: Law passes on party-line vote, using slightly sketchy but hardly unprecedented parliamentary maneuver. Public gets excited about finally having affordable, easy-to-access, high-quality coverage. Obama, Democratic legislators, greeted with flowers when they attend public meetings in advance of midterms. All right, maybe that doesn’t happen, but the bill is growing more popular, and people are starting to ask uncomfortable questions of Republicans who didn’t vote for it, and besides, everyone hates Republicans. Hopefully 60-vote Senate majority is regained in 2010 midterms, but even if not, given the growing public support, Republican minority has to start cooperating with Democrats to fix all the weaknesses in the law, which, after all, was a draft bill that was never supposed to pass as-is.Republican opposition hasn’t helped, obviously, but I don’t think they can take that much of the blame for the problems in the exchanges, because computer programming is not one of those things where adding lots of bodies solves the problem. Although more appropriations might have helped, they wouldn’t have solved the fundamental problem, which is that the people who were describing this amazing system seemed to think that if something could be easily described in English, it must not be that hard to do. I asked a couple of people who should have known how this was all going to work shortly after the bill had passed. They were quite certain that everything was under control -- of course there might be a few bugs on the first day, because that happens, but there would be no serious issues with the IT side.There’s no cabinet-level IT position -- a mistake, in my view. When your processes depend heavily on information technology, your IT policy is your policy. Hedge funds get this, and corporations are starting to. But too many organizations don’t. They set goals and expectations without a voice in the room who can tell them what is realistic, and what isn’t.Go back to the specificity: You don’t know how long something takes until you’ve broken it down into tiny little parts. As I saw one developer point out online recently, if you’ve done something a bunch of times, someone will already have automated that process. So big new jobs definitionally involve a sizable number of relatively novel problems, which means that you definitionally don’t really know how long it will take. Because people are biased toward optimism, the natural result is that most projects slip their deadlines.Politically, this made sense: They didn’t want to risk letting Republicans get into office and screw with their historic law. But that left them with no authority to set more realistic deadlines for the exchanges to go live. In a private-sector implementation, someone would have gone to the client last year and told them that they needed to push back a year, or more. For all I know, this did happen, but this was politically DOA.It was crazy to let states wait until early 2013 to declare whether they’d run an exchange. It was a desperate play for political legitimacy that got them little and cost them much-needed time in the states. Decisions like this are why I say that IT did not have nearly enough of a seat at the table.I’ve banged this drum before, but it’s a tune worth playing again: We are obsessed with the price of government contracts and the process of putting them out to bid, and we therefore ignore little things like the quality of the contractors, or getting things done in a timely fashion. In a system like this, where you’ve already set an unrealistic deadline that can’t really be changed, this is disastrous. We should trust our government agencies more, and then fire people who are caught hiring their brother-in-law at inflated prices.
Sunday, September 29, 2013
[California's version of ObamaCare] uses activist organizations connected to theDemocratic Party to register people to vote. The funding also will boost the budgets of these organizations.
In addition, the newly created Obamacare health exchange “Assisters” will be trained to sign people up for social services, including welfare, food stamps and housing assistance, according toCommunity Health Councils, Inc.
In 2012, the California Legislature passed Senate Bill 35, by Sen. Alex Padilla, D-Pacoima. It required that voter registration be part of the health insurance exchange.
SB35 creates “voter registration agencies” largely through state social services agencies. The law requires anyone applying online for service or assistance, or submitting a recertification, renewal or change of address form, to be provided an online “voter preference form.”
Effective January 1, the California Department of Social Services issued a new All County Information NoticeInformation Notice to county welfare directors and state and local National Voter Registration Act agencies regarding compliance with SB35.
CalFresh, California Work Opportunity and the Responsibility to Kids (formerly CALWORKs) programs are now required to provide welfare and food stamp recipients a voter registration card, “regardless of whether they indicate they want to register of not,” according to the Department of Social Services. “Under federal law, the NVRA requires states to provide voter registration opportunities at all offices that provide public assistance and all offices that provide state-funded programs primarily engaged in providing services to person(s) with disabilities. All applicants and continuing clients must be given a voter registration card (VRC) and an NVRA Voter Preference Form, regardless of whether they indicate they want to register or not.”
The agencies are required to “Provide and collect a voter registration card, and provide and collect a NVRA Voter Preference Form.”
Saturday, September 28, 2013
Friday, September 27, 2013
“There’s no way I could not vote for it,” Manchin said at a Bloomberg Government breakfast today. “It’s very reasonable and sensible.” [...]
“Don’t put the mandate on the American public right now,” Manchin said. “Give them at least a year. If you know you couldn’t bring the corporate sector, you gave them a year, don’t you think it’d be fair?”
Manchin's defection will put pressure on other red state Senate Democrats to agree to a compromise delaying the individual mandate. According to a paper by the liberal-leaning Urban Institute, a one-year delay of the individual mandate could "seriously disrupt" the entire law.
Link to full story at the Weekly Standard quoting Bloomberg.
Members of the Chicago-based Service Employees International Union Local 1 have gone on strike over recent job cuts by a janitorial company called Professional Maintenance.
The reason for the cuts? The employer says it is because of the Affordable Care Act, also known as Obamacare. This is ironic since SEIU is a major supporter of the law.
Tyler French, Local 1's organizing director, told Mediatrackers Ohio the company claimed it had to cut its employees' hours due to Obamacare mandates.
French did not believe the explanation, though, calling it the “latest excuse in a long line of many that we’ve seen from corporate America.”
But others throughout the organized labor movement have warned that such actions will be a direct consequence of the President Obama's health care law.
At the AFL-CIO's convention in Los Angeles earlier this month, Loretta Johnson, secretary-treasurer of the American Federation of Teachers, said it was already happening in her union.
"We are seeing employer after employer cut hours so as to avoid the 30-hour definition of a full-time job," Johnson said. The AFL-CIO passed a resolution demanding either Congress or Obama fix the law to stop it from hurting union members.
Under Obamacare, once a person works more than 30 hours a week, that person counts toward the requirement that companies provide insurance if they have more than 50 employees.
SEIU enthusiastically backed Obamacare when it passed and remains a booster of the law today. Earlier this month, it announced that it was sending nurses, doctors and other health care professionals out to promote the law in 30 cities over the coming months.
Thursday, September 26, 2013
Visit with Armstrong & Getty on 9/25/13 re: Upcoming PPACA Exchange Glitches, Doc Shortages & Subsidy/Tax Nightmares
- Doctor shortages
- Technology glitches
- Difficulty in calculating, receiving and rebating federal subsidies
And a link to a playlist of all past appearances.
Wednesday, September 25, 2013
On September 18th, the DOL released guidance for employers on how same-sex marriage will be handled under ERISA. The Compliance Bulletin linked below discusses how this guidance will impact individuals and employers.
Tuesday, September 24, 2013
Here's something else to be scared of: drug-resistant superbugs.
According to a new report from the Centers for Disease Control and Prevention, "more than two million people are sickened every year with antibiotic-resistant infections, with at least 23,000 dying as a result."
Oh, and those numbers are probably too low: "The estimates are based on conservative assumptions and are likely minimum estimates."
The basic issue here is that we're using too many antibiotics — both on ourselves and our animals. The CDC doesn't mince words here:
The use of antibiotics is the single most important factor leading to antibiotic resistance around the world. Antibiotics are among the most commonly prescribed drugs used in human medicine. However, up to 50% of all the antibiotics prescribed for people are not needed or are not optimally effective as prescribed. Antibiotics are also commonly used in food animals to prevent, control, and treat disease, and to promote the growth of food-producing animals. The use of antibiotics for promoting growth is not necessary, and the practice should be phased out.
They've even got a helpful graphic showing how overuse of antibiotics leads to killer superbugs:
Like a lot of things in health care, there isn't a lot of rhyme or reason to the overuse of antibiotics. One way you see that is to look at the tremendous variation in antibiotic prescriptions by state. It is very hard to imagine that North Dakota and Louisiana need to be prescribing antibiotics at twice the rate of California and Colorado.
It wouldn't be such a big deal for diseases to be developing resistance to the antibiotics we have if we were coming up with new antibiotics at a sufficiently quick clip. But — and this is the really scary part — the antibiotics pipeline has slowed down. This is, perhaps, the most unnerving graph in the whole report: It shows the sharp drop in applications for new antibacterial drugs over the last three decades.
To make a policy point here, Washington spends a lot more time arguing about how to finance health insurance than how to deliver health. But if you're securely in the middle class with employer-sponsored health insurance, these debates probably don't affect you much. What does affect you is the possibility of dying of a hospital-acquired superbug when you go in for a routine surgery at age 62.
These kinds of quality issues get a lot less attention in the Beltway, but given that about 85 percent of Americans have health insurance of some sort or another, they probably affect more people. And, in theory at least, preventing superbugs shouldn't be the kind of thing that Democrats and Republicans disagree over.
Monday, September 23, 2013
Government’s software can’t reliably determine how much people need to pay for coverage in Exchanges
Less than two weeks before the launch of insurance marketplaces created by the federal health overhaul, the government’s software can’t reliably determine how much people need to pay for coverage, according to insurance executives and people familiar with the program. ...
A failure by consumers to sign up online in the hotly anticipated early days of the “exchanges” is worrisome to insurers, which are counting on enrollees for growth, and to the Obama administration, which made the exchanges a centerpiece of its sweeping health-care legislation.
If not resolved by the Oct. 1 launch date, the problems could affect consumers in 36 states where the federal government is running all or part of the exchanges. About 32 million uninsured people live in those states, but only a fraction of them are expected to sign up in the next year.
It was one of candidate Obama’s most vivid and concrete campaign promises. Forget about high minded (some might say high sounding) but gauzy promises of hope and change. This candidate solemnly pledged on June 5, 2008: “In an Obama administration, we’ll lower premiums by up to $2,500 for a typical family per year….. We’ll do it by the end of my first term as President of the United States. States.” Unfortunately, the experts working for Medicare’s actuary have (yet again) reported that in its first 10 years, Obamacare will boost health spending by “roughly $621 billion” above the amounts Americans would have spent without this misguided law.What this means for a typical family of four
Simplistic? Maybe, but so too was the President’s campaign promise. And this approach allows us to see just how badly that promise fell short of the mark. Between 2014 and 2022, the increase in national health spending (which the Medicare actuaries specifically attribute to the law) amounts to $7,450 per family of 4.
Let us hope this family hasn’t already spent or borrowed the $22,500 in savings they might have expected over this same period had they taken candidate Obama’s promise at face value. In truth, no well-informed American ever should have believed this absurd promise. At the time, Factcheck.org charitably deemed this claim as “overly optimistic, misleading and, to some extent, contradicted by one of his own advisers.” The Washington Post less charitably awarded it Two Pinocchios (“Significant omissions or exaggerations”). Yet rather than learn from his mistakes, President Obama on July 16, 2012 essentially doubled-down on his promise, assuring small business owners “your premiums will go down.” He made this assertion notwithstanding the fact that in three separate reports between April 2010 and June 2012, the Medicare actuaries had demonstrated that the ACA would increase health spending. To its credit, the Washington Post dutifully awarded the 2012 claim Three Pinocchios (“Significant factual error and/or obvious contradictions.”)
The past is not prologue: The burden increases ten-fold in 2014
As it turns out, the average family of 4 has only had to face a relatively modest burden from Obamacare over the past four years—a little over $125. Unfortunately, this year’s average burden ($66) will be 10 times as large in 2014 when Obamacare kicks in for earnest. And it will rise for two years after that, after which it hit a steady-state level of just under $800 a year. Of course, all these figures are in nominal dollars. In terms of today’s purchasing power, this annual amount will rise steadily.
But what happened to the spending slowdown?
Some readers may recall that a few months ago, there were widespread reports of a slow-down in health spending. Not surprisingly, the White House has been quick to claim credit for the slowdown in health spending documented in the health spending projections report, arguing that it “is good for families, jobs and the budget.”
On this blog, Avik Roy pointed out that a) since passage of Obamacare, U.S. health spending actually had risen faster than in OECD countries, whereas prior to the law, the opposite was true. Moreover, to the degree that U.S. health spending was slowing down relative to its own recent past, greater cost-sharing was likely to be the principal explanation. Medicare’s actuarial experts confirm that the lion’s share of the slowdown in health spending could be chalked up to slow growth in the economy and greater cost-sharing. As AEI scholar Jim Capretta pithily puts it:
An important takeaway from these new projections is that the CMS Office of the Actuary finds no evidence to link the 2010 health care law to the recent slowdown in health care cost escalation. Indeed, the authors of the projections make it clear that the slowdown is not out of line with the historical link between health spending growth and economic conditions (emphasis added).
In the interests of fair and honest reporting, perhaps it is time the mainstream media begin using “Affordable” Care Act whenever reference is made to this terribly misguided law. Anyone obviously is welcome to quarrel with the Medicare actuary about their numbers. I myself am hard-put to challenge their central conclusion: Obamacare will not save Americans one penny now or in the future. Perhaps the next time voters encounter a politician making such grandiose claims, they will learn to watch their wallet. Until then, let’s spare strapped Americans from having to find $657 in spare change between their couch cushions next year. Let’s delay this law for a year so that policymakers have time to fix the poorly designed Rube Goldberg device known as Obamacare. For a nation with the most complicated and expensive health system on the planet, making it even more complicated and even more expensive never was a good idea.
 The Medicare actuary first issued a report carefully estimating the cost impact of Obamacare on April 22, 2010. Its annual national health expenditure projections reports for 2010, 2011 and 2012 all have contained tabulations showing that Obamacare will increase health spending over the next 10 years compared to a counterfactual scenario in which the law was never enacted.
Saturday, September 21, 2013
In less than two weeks, Obamacare’s health insurance exchanges will be open for enrollment. Three months after that, the law’s major coverage provisions officially go into effect. It’s the biggest expansion of the entitlement state in decades, and a massive bureaucratic undertaking. Even the law’s biggest supporters don’t expect it to go off without a hitch: President Obama warned earlier this year that the law will likely come with some “glitches and bumps.” Here are eight things that could go awry with the law when it opens for business, and in the years beyond.
1) When more people have health insurance, it could be harder to see primary care physicians: There’s already a shortage of primary care physicians relative to national demand. Increasing the number of people who have health insurance tends to increase the demand for physicians’ services. As the Associated Press reported this week, “A shortage of primary care physicians in some parts of the country is expected to worsen as millions of newly insured Americans gain coverage under the federal health care law next year. Doctors could face a backlog, and patients could find it difficult to get quick appointments.”
2) Health insurers will limit doctor networks in order to keep prices down: When California’s insurance regulators first released information on health premiums through the state’s insurance exchange, they touted lower than expected rates. But the comparison was misleading, stacking the exchange’s individual premiums up against small business rates. And there was something else they didn’t say either: Many of the state’s health insurers held down prices by strictly limiting the available providers. “To hold down premiums,” the L.A. Times reported this week, “major insurers in California have sharply limited the number of doctors and hospitals available to patients in the state's new health insurance market opening Oct. 1.”
3) Employers will cut hours for workers. Jed Graham of Investor's Business Daily has put together a list of more than 300 employers who have already reduced hours or full-time employment in order to avoid potential requirements under Obamacare. Labor leader Richard Trumka, who supported the law, has saidthat employers are now cutting hours to avoid the law's mandates. And this is with the employer mandate delayed for a year.
4) Obamacare navigators and other enrollment aides could violate the privacy of exchange users: The health law budgets some $67 million for “navigators” to help people sign up for coverage. By necessity, these individuals will handle sensitive personal information required to apply for coverage through the law’s exchanges. That creates an enormous opportunity for fraud and deception. And yet the navigators, and the enrollment assisters working in state-run exchanges will receive only minimal oversight and training. They’ll be approved after just 20 or 30 hours of training. And the federal government won’t provide navigators with IDs, or maintain a list of individuals who are approved by the program. That could make it easy for unscrupulous individuals to present themselves as navigators when they are not in order to steal personal data — a fraud that consumer advocates are already expecting.
5) The online exchange technology won’t be ready — or won’t work as well as its supposed to. The state of Oregon, one of the states that has been most enthusiastic about implementing the law, has already said that online enrollment will not be available on October 1. Health officials working on the law, meanwhile, have begun to view the beginning of enrollment in October as a “soft launch,” according to The Washington Post. And independent health care investment analysts are warning that when the exchanges are launched that “technical glitches and functional issues” are “probable.”
6) Employers could move many more workers than expected onto the exchanges, and increase the price of the law as a result. Small changes in household premium contributions for workers in employer sponsored insurance could make the exchanges much more attractive to millions of people, according to arecent study in Health Affairs. “As household premium contributions rise,” the study explains, “people are increasingly eligible and motivated to participate in the exchange, because they will receive a federal premium subsidy and an effective wage increase (to compensate for leaving employer-provided insurance).” Adjusting the average national premium contribution by just $100 could push 2.2 million people to move into the exchange, the study warns, and, thanks to greater reliance on public subsidies for coverage, increase the law’s federal price tag by $6.7 billion.
7) The exchanges will grant subsidies that are wrong, or need to be repaid: It’s difficult to figure out how to calculate an individual’s household income for an upcoming year — and even if you can calculate it, there’s no guarantee it won’t change. Problems with income estimation will likely lead to inaccuracies regarding eligibility for the law’s subsidies. One study last year estimated that roughly 2.6 percent of exchange applicants “judged eligible for subsidies would receive advance payments on those subsidies that were too high by $208 per year, on average.” Others will get subsidies that are too low. Meanwhile, families with fluctuating paychecks could be on the hook for repaying subsidies to the Internal Revenue Service if their incomes change throughout the year. Even with proper reporting, one recent study estimated that “22.6 percent of subsidy recipients could owe repayments when they file their taxes.”
8) Individuals whose income hovers near the Medicaid eligibility line could be forced on and off the program. Income fluctuations are also a big potential headache for individuals and families whose incomes hover right around the eligibility line for Medicaid. This creates a problem known as Medicaid churn. And it could affect a lot of people. A 2011 study by health professors at Harvard and George Washington University found that over six months, “more than 35 percent of all adults with family incomes below 200 percent of the federal poverty level will experience a shift in eligibility from Medicaid to an insurance exchange, or the reverse.” Over a year, that figure rises to 50 percent. Administering benefits to that population could be a big bureaucratic headache. Having their coverage elgibility constantly shifting back and forth's also likely to cause problems for the individuals affected themselves.
Friday, September 20, 2013
Patients Don't Know What Drugs will be Offered in ObamaCare Exchanges and as Many as 45% of Drugs Won't be Covered
Among the most troubling questions facing consumers as they shop for insurance under the Obama administration’s new health care law is whether the plans will cover the drugs they take — and how much they will have to pay for them.
But with less than two weeks remaining until enrollment opens on Oct. 1, the answers are still elusive and anxiety is growing for consumers whose well-being depends on expensive medications.
States running the marketplaces where the plans will be offered have not released details about which drugs will be covered. Insurers have said little about how much consumers will be asked to contribute or what types of restrictions will be placed on certain medicines. Of the few states that have revealed specifics, some have plans that will require patients to contribute as much as 50 percent of the cost of the most expensive drugs. ...
The plans offered in the marketplaces must cover a minimum number of drugs in every treatment category, with the exact count set by a representative commercial plan, known as a benchmark plan, that is designated in each state.
Oregon, Virginia, Connecticut and other states plan to cover more than 97 percent of drugs, while others like Maryland, Colorado and California plan to cover 54 to 84 percent, according to an analysis by Avalere Health, a consulting firm. Patients can lobby for an exception if they can demonstrate that a drug not covered by their plan is medically necessary. ...
It draws your eye immediately. It's also one of the highest calorie counts on the whole menu. That's because the high calorie count is, in this case, the selling point.
McDonald's is using the calorie count for the exact opposite purpose public-health advocates intended: It's using high calorie counts to convey what an incredible deal their food is. Look how many calories you get for only $5.69! That's a way better per-calorie deal than pretty much anything else on the board.
Most studies have found little effect from the introduction of calorie counts -- and some studies even hinted at an increase in calories ordered -- so this kind of thing isn't a big surprise. But it's still a nice reminder of how hard it is to get people to change their health habits, and how often well-intentioned interventions end up disappointing.
Thursday, September 19, 2013
The doctor can't see you now.
Consumers may hear that a lot more often after getting health insurance under President Obama's Affordable Care Act.
To hold down premiums, major insurers in California have sharply limited the number of doctors and hospitals available to patients in the state's new health insurance market opening Oct. 1.
New data reveal the extent of those cuts in California, a crucial test bed for the federal healthcare law.
These diminished medical networks are fueling growing concerns that many patients will still struggle to get care despite the nation's biggest healthcare expansion in half a century.
Consumers could see long wait times, a scarcity of specialists and loss of a longtime doctor.
"These narrow networks won't work because they cut off access for patients," said Dr. Richard Baker, executive director of the Urban Health Institute at Charles Drew University of Medicine and Science in Los Angeles. "We don't want this to become a roadblock."
To see the challenges awaiting some consumers, consider Woodland Hills-based insurer Health Net Inc.
Across Southern California the company has the lowest rates, with monthly premiums as much as $100 cheaper than the closest competitor in some cases. That will make it a popular choice among some of the 1.4 million Californians expected to purchase coverage in the state exchange next year.
But Health Net also has the fewest doctors, less than half what some other companies are offering in Southern California, according to a Times analysis of insurance data.
In Los Angeles County, for instance, Health Net customers in the state exchange would be limited to 2,316 primary-care doctors and specialists. That's less than a third of the doctors Health Net offers to workers on employer plans. In San Diego, there are only 204 primary-care doctors to serve Health Net patients.
Other major insurers have pared their list of medical providers too, but not to Health Net's degree. Statewide, Blue Shield of California says exchange customers will be restricted to about 50% of its regular physician network. ...
The differences in network size are noticeable across Southern California. Health Net has 920 physicians in Orange County, compared with more than 2,500 for Blue Shield, according to company data. Health Net has fewer than 800 doctors in San Diego County, while nearly 3,000 physicians are available in an Anthem Blue Cross plan.
In addition to doctors, some big-name hospitals may be left out. A spokesman for Cedars-Sinai Medical Center said the hospital has received many calls from patients who were worried about keeping their access to the hospital and its affiliated doctors in the new health plans next year.
Cedars-Sinai is available only on two lower-priced Health Net plans in the state-run market, according to the hospital and insurer. Anthem Blue Cross says that it's the only insurer that includes UCLA Medical Center and other UC facilities statewide.
In some ways, insurers are mimicking HMO giant Kaiser Permanente, which has limited patients to its own hospitals and doctors for decades. Kaiser is offering its full slate of in-house providers in the exchange, totaling more than 5,700 doctors in the Los Angeles area. ...
Excerpted from LA Times - Insurers limiting doctors, hospitals in health insurance market.
What Does It Mean When One of America's Best Care Facilities Has to Fire Staff to Deal with Obamacare?
The world-renowned Cleveland Clinic said on Wednesday it would cut jobs and slash five to six percent of its $6 billion annual budget to prepare for President Barack Obama's health reforms.The clinic, which has treated celebrities and world leaders such as musician Lou Reed, former Italian Prime Minister Silvio Berlusconi and former Olympic gold medal skater Scott Hamilton, did not say how many of its 44,000 employees would be laid off. But a spokeswoman said that $330 million would be cut from its annual budget."Some of the initiatives include offering early retirement to 3,000 eligible employees, reducing operational costs, stricter review of filling vacant positions, and lastly workforce reductions," said Eileen Sheil, Executive Director of Corporate Communications for the Cleveland Clinic Foundation.The clinic is Cleveland's largest employer and the second largest in Ohio after Wal-Mart. It is the largest provider in Ohio of Medicaid health coverage for the poor, the program that will expand to cover uninsured Americans under Obamacare."We know we are going to be reimbursed less," under Medicaid, Sheil said.Cleveland Clinic has almost 100 locations around Ohio employing 3,000 doctors. Its main campus is world renowned for cancer and cardiovascular treatment."To prepare for healthcare reform, Cleveland Clinic is transforming the way care is delivered to patients," Sheil said without elaborating.The clinic's Lerner Research Institute had a total annual research expenditure of $255 million in 2012 and recently announced breakthroughs in creating a breast cancer vaccine, drugs to treat Alzheimer's patients and research into the genetic mutations in prostate cancer. ...
Last week I wrote about Trader Joe's decision to cut health insurance benefits for employees who work fewer than 30 hours a week. After that, one reader forwarded along a response received from Trader Joe's after inquiring about the matter. It's one of the more thorough explanations I've seen from a company cutting in benefits, so I've posted it here. It acknowledges, surprisingly bluntly, that some employees will be worse off for the decision and that others might benefit. Here is the full response:
Thank you for writing to us. It's possible you have been misled, at least to some degree, by the headlines in some articles regarding our reasons for implementing the [Affordable Care Act] in January. We'd like to take this opportunity to clarify some facts.For over 77% of our Crew Members there is absolutely no change to their healthcare coverage provided by Trader Joe's.
The ACA brings a new potential player into the arena for the acquisition of health care. Stated quite simply, the law is centered on providing low cost options to people who do not make a lot of money. Somewhat by definition, the law provides those people a pretty good deal for insurance ... a deal that can't be matched by us -- or any company. However, an individual employee (we call them Crew Member) is only able to receive the tax credit from the exchanges under the act if we do not offer them insurance under our company plan.
Perhaps an example will help. A Crew Member called in the other day and was quite unhappy that she was being dropped from our coverage unless she worked more hours. She is a single mom with one child who makes $18 per hour and works about 25 hours per week. We ran the numbers for her. She currently pays $166.50 per month for her coverage with Trader Joe's. Because of the tax credits under the ACA she can go to an exchange and purchase insurance that is almost identical to our plan for $69.59 per month. Accordingly, by going to the exchange she will save $1,175 each year ... and that is before counting the $500 we will give her in January.
While we understand her fear of change, at her income level this is a big benefit that we will help her achieve.
Clearly, there are others who will go to the exchanges and will be required to pay more. That is usually because they have other income and typically a spouse who had a job with no benefits and they do not qualify for the subsidies under the ACA.
One example of that we had yesterday was the male Crew Member who worked an average of 20 hours per week but had a spouse who is a contract consultant who makes more than $200,000 per year. The Crew Member worked for the medical benefits and unfortunately for them they are likely to have to pay more because of their real income. We understand how important healthcare coverage is to our Crew Members and we are pleased to be able to provide and support this program.
We do hope this information helps, and we appreciate your interest in Trader Joe's.
Wednesday, September 18, 2013
If you’re feeling lucky, maybe not. But following the rules wouldn’t be a bad idea.
As implementation of key parts of the PPACA approach, the U.S. Department of Labor is underscoring two themes:
- Employers are required to comply with rules like notifying employees of options, but …
- if they don’t comply, it’s really up to them to report the infraction themselves, because the DOL says it isn’t going to enforce the rules.
So, as an employer, why bother if there’s no penalty?
Because fines might come from somewhere else aside from the DOL, says attorney Keith McMurdy, a partner with Fox Rothschild LLP in New York.
McMurdy has been wrestling with the comply-don’t comply dilemma for a while. Now, he said, he is recommending that companies simply comply, because failure to do so could come back to bite you.
McMurdy told BenefitsPro.com that the byzantine sanctions process surrounding the act offer several agencies the option to go after non-compliant employers – if they so choose. Among those who might come after a non-compliant employer:
- The IRS.
- DOL’s Wage and Hour Division, which administers the Fair Labor Standards Act, where the law’s notification requirement can be found (section 18B).
- An employee or an employee’s representative (i.e., a union or a labor lawyer) that might decide to file a lawsuit.
McMurdy posted a blog recently addressing this very subject, shortly after the DOL had released, in Q&A format on its website, information indicating it would not penalize those who don’t notify workers. Here’s what he wrote:
“1. The (DOL) FAQ provided on 9/11 says “(i)f your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.”
1. Technical Release 2013-02, from the DOL, says that Section 18B of the FLSA generally provides that “an applicable employer must provide” each employee a notice.
2. Section 18B of the FLSA definitely says that any employer subject to the FLSA “shall provide” written notice to current and future employees.
“My experience with the federal laws and the enforcement of said laws by federal agencies is that when things say “shall” and “must,” there are penalties when you don’t do them. So when the DOL now takes the position that it is not a “shall” or “must” scenario, but rather only a “should” and “even if you don’t we won’t punish you” proposition, I get suspicious. But I also think this confirms what I have said since the beginning about PPACA compliance for employers. It is all about your risk-tolerance.
“Employers have to decide how much risk they are willing to take, either in the cost ofcomplying, the potential penalties or the risks associated with managing their workforce to comply with eligibility requirements. In the face of uncertainty, employers have to decide how much money is worth saving now as compared to possible future costs of penalties or loss of employees.”
It’s not just the insurance options notification situation that McMurdy says puts employers at risk. He offered the following examples of potential penalty-triggering act violations where employers could face $100-a-day fines:
1. PPACA limits restrictions. Group health plans may not establish any annual or lifetime dollar limits on essential health benefits — those core health benefits that have been defined by the act as basic elements for any coverage plan.
2. Failure to offer coverage to dependents up to the age of 26. Children of parents with health coverage up to age 26 must be offered coverage.
3. Retroactive rescission of benefits. Health plans can’t cancel or discontinue coverage retroactively unless premiums/contributions aren’t paid for a certain period of time.
4. Failing to cover the preventative care services specified by the act. The law specifies certain preventative care services that all plans must cover without charging a co-pay or cost-sharing. While coverage of contraception tools has been the most controversial of these, it is but one of many listed by the PPACA. Others include various screenings, well-baby services and breast feeding support.
5. Failing to have a revised appeal process (including external appeals) so people can challenge a claim denial. Designed to support patients faced with rejected insurance claims by their providers, this regulation requires health plans to include an appeals process for denied claims.
6. Failing to provide timely notices. Insurance options isn’t the only one, it’s a long list. For instance, new employees must receive notification of their plan options, participants must receive notice that dependents up to age 26 are eligible for coverage and the list goes on and on.
7. Restrictions on emergency room visits. The act says patients don't need pre-authorization for ER visits, and any plan that requires such faces penalties.
8. Restrictions on designation of primary care physicians so employees know they can choose any primary care physician if their plan requires them to pick on. Plans may recommend primary care practitioners but employees have the right to choose whoever they want to.
9. Improper pre-existing condition exclusions. Of course, this was one of the matters at the heart of healthcare reform. No one can be denied affordable coverage due to a pre-existing medical condition. No exceptions.
10. Failing to follow new out-of-pocket costs as outlined in the act. The act has created a formula for calculating out-of-pocket expenses that caps them for each plan. Exceeding these limits triggers the penalty clause. Figuring out the limit will be the real test, however.
11. Violations of the 90-day waiting period limit for coverage under an employer-sponsored plan. Employers offering health coverage to employees cannot make employees wait longer than 90 days to be eligible for that coverage.
12. Nondiscrimination rules. These rules prohibit employers from offering current or former workers healthcare coverage levels that aren’t available to all employees within the company. This is a sticky one, because top execs often get healthcare perks that grunts don’t receive.
Story from Dan Cook at BenefitsPro.
Tuesday, September 17, 2013
Government Seeking Inclusion of ‘Social and Behavioral’ in Health Records
Obamacare Employee Accidentally Sends Out 2,400 Social Security Numbers
U.S. Senator trying to ensure congressional members will be treated the same as other citizens under ObamaCare is punished by colleagues.
‘Are you sexually active? If so, with one partner, multiple partners or same-sex partners?”
Be ready to answer those questions and more the next time you go to the doctor, whether it’s the dermatologist or the cardiologist and no matter if the questions are unrelated to why you’re seeking medical help. And you can thank the Obama health law.
“This is nasty business,” says New York cardiologist Dr. Adam Budzikowski. He called the sex questions “insensitive, stupid and very intrusive.” He couldn’t think of an occasion when a cardiologist would need such information — but he knows he’ll be pushed to ask for it.
The president’s “reforms” aim to turn doctors into government agents, pressuring them financially to ask questions they consider inappropriate and unnecessary, and to violate their Hippocratic Oath to keep patients’ records confidential.
Embarrassing though it may be, you confide things to a doctor you wouldn’t tell anyone else. But this is entirely different.
Doctors and hospitals who don’t comply with the federal government’s electronic-health-records requirements forgo incentive payments now; starting in 2015, they’ll face financial penalties from Medicare and Medicaid. The Department of Health and Human Services has already paid out over $12.7 billion for these incentives.
Dr. Richard Amerling, a nephrologist and associate professor at Albert Einstein Medical College, explains that your medical record should be “a story created by you and your doctor solely for your treatment and benefit.” But the new requirements are turning it “into an interrogation, and the data will not be confidential.”
Lack of confidentiality is what concerned the New York Civil Liberties Union in a 2012 report. Electronic medical records have enormous benefits, but with one click of a mouse, every piece of information in a patient’s record, including the social history, is transmitted, disclosing too much.
The social-history questions also include whether you’ve ever used drugs, including IV drugs. As the NYCLU cautioned, revealing a patient’s past drug problem, even if it was a decade ago, risks stigma.
On the other end of the political spectrum is the Goldwater Institute, a free-market think tank. It argues that by requiring everyone to have health insurance and then imposing penalties on insurers, doctors and hospitals who don’t use the one-click electronic system, the law is violating Americans’ medical privacy.
The administration is ignoring these protests from privacy advocates. ...
Patients need to defend their own privacy by refusing to answer the intrusive social-history questions. If you need to confide something pertaining to your treatment, ask your doctor about keeping two sets of books so that your secret stays in the office. Doctors take the Hippocratic Oath seriously and won’t be offended.
Are such precautions paranoid? Hardly. WikiLeaker Bradley Manning showed how incompetent the government is at keeping its own secrets; incidents where various agencies accidentally disclose personal data like Social Security numbers are legion. And that’s not to mention the ways in which commercial databases are prone to hacking and/or exploitation.
Be careful about sharing your medical secrets with Uncle Sam.
Monday, September 16, 2013
... Self-insured plans enjoy lower costs and more flexibility because they are insulated from state regulations and mandates under a 1974 federal law known by the acronym Erisa.Today a record 61% of covered workers are in a self-insured plan, according to the Kaiser Family Foundation's 2013 survey, up from 49% in 2000. Self-insurance used to be concentrated among national companies that could spread risk over large pools of employees.But self-insurance is now filtering down to businesses with 199 workers or fewer, as a hedge against ObamaCare's federal mandates and the danger that costs on its small-business exchanges will soar. Some insurers are now selling popular products that allow groups as small as 25 to self-insure. In a 2012 study, the Urban Institute found ObamaCare's incentives will cause as many as 60%of small firms to convert without regulatory changes.
So the White House, liberal pressure groups and state and federal regulators are trying to close what they call the self-insurance "loophole" before more escape. Their political and actuarial fear is that if enough businesses don't join, the exchanges could fail because too few younger and healthier people will subsidize everybody else.In a June alarm titled "The Threat of Self-Insured Plans Among Small Businesses," the liberal Center for American Progress warns that "the result of this shift could cause an insurance premium death spiral." Note how businesses that pay for their workers' health care are suddenly a "threat." Wasn't coverage the point of ObamaCare?Big business loves Erisa's freedoms, so the left's political target is so-called stop-loss insurance that is essential to the little guys. Unlike corporate America, small employers are more exposed to the risk of a single high-cost case of serious illness, so they buy this form of catastrophic coverage as a self-insurance backup.Liberals are pushing state legislatures to outlaw stop-loss policies for small and mid-sized business. Another poison pill is fixing the dollar levels where stop-loss policies are allowed to start paying—aka "attachment levels" akin to deductibles—so high that they are too risky for small businesses to buy. The standard can be as low as expenses exceeding $10,000 per enrollee, but liberals want to triple or quadruple that, or more.Democrats in California have been leading this effort as usual, though more than a dozen states including Colorado and Rhode Island have either passed or are moving such destructive bills. Insurance commissioners also love this because it gives them more regulatory power.Speaking of which, another danger is that the Obama Administration may try to unilaterally rewrite Erisa. In May 2012 the Labor Department joined Treasury and Health and Human Services on a regulatory "information request" about stop-loss that is a prelude to a new rule-making.That document muses that "It has been suggested that some employers with healthier employees may self-insure and purchase stop loss insurance policies with relatively low attachment points to avoid being subject to [ObamaCare's] requirements while exposing themselves to little risk." That sounds like a solution in search of a problem.One threat is for the Labor Department to use regulation to define stop-loss as a "health insurance issuer," rather than financial reinsurance that all industries use to manage risk. The trouble is that stop-loss doesn't pay providers or medical claims or cover individuals—and in any case three of five self-funded plans use some form of stop-loss, not merely the new small business wave.The double trouble is that most companies that self-insure use an add-on company such as a brand-name insurer for processing payments, building networks, etc. Once Labor starts controlling "issuers" in the name of rescuing ObamaCare's exchanges, all Erisa benefits become subject to political tampering.That's a specialty of new Labor Secretary Thomas Perez, who has more than a few businesses worried. Mr. Perez made his name stretching the law at the Justice Department, but he cut his political teeth at HHS in the Clinton years and as special counsel to the late Ted Kennedy.One irony in all this is that the collateral damage will include union health plans covered by collective bargaining in industries like construction and services. Thousands of small Taft-Hartley union trusts rely on stop-loss and may lose that option, along with millions of other people who don't work for the Fortune 500. President Obama famously promised that if you like your health plan you can keep it, but this Erisa gambit will also scramble the plans of the businesses that already self-insure as a safe harbor.In 2009 we ran a series of editorials called "Repealing Erisa" that exposed new Labor Department oversight of self-insurance in the House ObamaCare bill. The controversy and business criticism forced Democrats to strip that provision out, but this latest assault shows that the threat is back. Liberals hate Erisa's pluralism in favor of total government control, and small business is merely the appetizer.A version of this article appeared September 13, 2013, on page A14 in the U.S. edition of The Wall Street Journal, with the headline: The Attack on Self-Insurance.
Saturday, September 14, 2013
Trader Joe’s CEO Dan Bane said in the memo that the company will issue part-time employees a $500 check in January to hold them over until they can enroll in President Barack Obama’s new health care law.
The announcement is notable considering the grocery chain has long provided health care coverage to its part-time employees. True, many larger retailers do the same, but Trader Joe’s is famous for having some of the lowest rates available for part-time workers.
However, the company has apparently decided it’d be cheaper to dump its part-time staff into the Obamacare exchanges next year where they will be eligible for tax subsidies to buy health insurance.
“Depending on income you may earn outside of Trader Joe’s … we believe that with the $500 from Trader Joe’s and the tax credits available under the ACA, many of you should be able to obtain health care coverage at very little if any net cost to you,” the Bane memo reads.
When questioned by the Huffington Post, a spokeswoman for Trader Joe’s would neither confirm nor deny the existence of the Bane memo.
“We have made some changes to our healthcare coverage that we believe will be a benefit to all Crew Members working in our stores. We are committed to providing all our Crew Members with benefits that are among the best in our industry,” she said.
A part-time employee who spoke to the HuffPo on condition of anonymity said she was unhappy with the move, citing the company’s health perks as “one of the best parts about the job.”
“There are several folks I work with who are there for the insurance as much as anything, mostly folks with young families,” she said. “I can say that when I opened and read the letter yesterday my reaction was pure panic, followed quickly by anger.”
Now whether company employees fall into the full-time or part-time category depends on their schedules, the Bane memo notes.
“It is important to note … we do not create our weekly schedules with healthcare eligibility in mind,” the memo reads. “Rather, we will continue to create weekly schedules that are solely focused on supporting the customer experience.”
The company will continue to provide employees who work 30 hours or more per week with health care coverage (Obamacare mandates that any company with 50 or more employees must provide health care coverage to its full-time staff).
But, again, being a full-time employee all depends on scheduling.
Friday, September 13, 2013
Disability fraud is in the neighborhood of 25-50% because states have an incentive to promote, not stop it
Here are some stats from "Unfit for Work"
- Every month 14 million Americans receive a disability check.
- In 1961 the leading cause of disability was heart disease and strokes, totaling 25.7% of cases. Back pain was 8.3% of cases.
- In 2011 the leading cause of disability was a hard to disprove back pain, totaling 33.8% of cases. The second leading cause was an equally difficult to disprove "mental illness" at 19.2%. Strokes and heart disease fell to 10.6%.
- In Hale County Alabama 1 in 4 receive disability checks.
- One thing nearly every case in Hale County Alabama has in common is Dr. Perry Timberlake who defines disability in a rather creative way.
- Once people go onto disability, they almost never go back to work. Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce. ...
U.S. "hunger" statistics are utterly ridiculous. Globally, obesity is now a larger threat to human health than malnutrition. And while I fully understand real starvation exists in the world, it does not in America. It is simply the various political interests pushing for either more people on the public dole or more corporate welfare for massive agricultural interests.
This is Michael Sauter from the Huffington Post:
U.S. Department of Agriculture (USDA) Economic Research Service report measures how many households have to limit their food options or even skip meals because they cannot afford enough or healthier food. According to the report, between 2010 and 2012, an average of 20% of Mississippi households had low or very low food security. In that period, an average of one in 12 Arkansas households had at least one family member skip a meal or eat less because of a lack of money. These are the states where the most people go hungry.And this is Ian Simpson at the Business Insider:
Among U.S. states, Mississippi has the highest proportion of obese adults at 34.9 percent, and Colorado has the lowest, according to a survey released on Monday.
Mississippi heads 12 states with adult obesity rates of more than 30 percent, trailed by Louisiana and West Virginia, according to the report by the Trust for America's Health (TFAH) and the Robert Wood Johnson Foundation.