Friday, June 23, 2017

Comparing the Major Provisions of PPACA to the House and Senate Replacement Proposals with Audio from Armstrong & Getty

Overarching Thoughts

1) The Senate absolutely did not “start over” but simply made a few tweaks to the Obamacare Lite bill passed by the House. I’d call this Senate version Obamacare Lite Plus.

2) If you didn’t think the House bill went far enough to repeal Obamacare, you will really hate the Senate bill because, on the whole, it backtracks a few steps toward Obamacare.

3) If I were evaluating these bills based upon how they addressed the problems we faced in healthcare in 2010, I’d grade Obamacare an F, House Bill a D- and Senate Bill an F+.

4) If evaluating these bills today, knowing Obamacare is the law of the land I’d grade the House bill as a C+ and the Senate bill as a C.

Pros:
  • Both the House and Senate bill repeal all but one Obamacare tax. 
  • Both the House and Senate bill eliminate the Individual and Employer mandates. 
  • Both bills allow for larger use of HSAs and FSAs. 
  • Both bills permit the states a bit more freedom in dealing with many of Obamacare’s coverage mandates. 
  • Both bills phase out the Medicaid expansion ushered in by Obamacare. The House bill does it sooner but the Senate bill does it in greater degree in the long run assuming politicians could stick to benefit reductions – but we know they cannot. 
Cons:
  • All three plans cement a redistribution of wealth and new federal entitlement of $1.5 to $1.75 trillion dollars. 
  • None of the three laws significantly work to reduce the cost of healthcare in America in a meaningful enough way to avert future economic turmoil. 
  • The House or Senate bill probably prolong our slide into socialized medicine but only by a couple of years. At this pace the U.S. will have to go to some form of rationed and socialized healthcare in 7 to 10 years.
I spent a few minutes on the Armstrong & Getty Show this morning discussing this:



Obamacare
House Bill
Senate Bill
10 Year Cost
$1.75 T
1.63 T
Unknown, but not significantly different

Uninsured After 10 Years
28 million people
51 million people (note that HHS scored it at 41 million)

Unknown, but we estimate it at 40 million
26 Year olds
Can stay on parents’ insurance irrespective of college enrollment or dependent status.

Same
Same
Taxpayer dollars to buy insurance
Individuals making less than 400% of FPL get money. This is about $100K of income for a family of 4. Not required to pay more than 9.5% of income for health ins.
Abandoned income based subsidies and allowed refundable tax credits based on age bands. Credits did phase out for higher income levels.

Hybrid approach for incomes up to 350% of FPL (about $86K for family of 4). Adults 59-64 could pay up to 16.2% of income.

Amount of taxpayer dollars to buy insurance

Subsidy amounts based on an ins. plan designed to cover 70% of medical expenses. 

Bases subsidy amounts on age as opposed to income or plan cost. Would be least dollars redistributed of the three plans. 

Subsidy amounts based on a plan that is designed to cover 58% of medical expenses.
Preexisting Conditions
Coverage cannot be denied or cost more.
States can get permission to let insurers charge more for some preexisting conditions. States would have access to federal money to help those with expensive policies or conditions.
Insurance companies would be required to accept all applicants regardless of health status and charge them the same premium just like in O’care. But the draft bill would let states ask permission to reduce some required coverages.

Tax Burden
Implemented 21 new taxes on business, individuals, and various industries. 
Eliminates 20 of the 21 new taxes, delays Cadillac Tax from 2020 to 2026
Eliminates 20 of the 21 new taxes, delays Cadillac Tax from 2020 to 2026

Medicaid
Obamacare expanded Medicaid from persons at 100% FPL to 138% FPL and promised the federal government will pay 90% of that expansion. 31 states took that deal. 
Would limit Medicaid reimbursement by a per-enrollee cost, based on 2016 average costs. And phase out the expansion in 2020. 
Allows the 31 states that expanded Medicaid to continue getting federal funding through 2023, with reduced funding starting in 2021. The bill sharply curtails federal support for Medicaid expansion in 2024, likely causing many states to end the expansion. Deeper proposed cuts could begin in 2025. 

Subsidies for Out of Pocket Costs
Provides subsidies to help people with lower incomes pay for out-of-pocket costs like deductibles and co-payments.

Eliminates these subsidies immediately. 
Preserves the subsidies through 2019, then eliminates them altogether.
Prohibitions on annual
and lifetime limits
Bars insurers from setting a limit on how much they have to pay to cover someone.
Preserves this rule, but gives states the option to eliminate it as part of a waiver of insurance market rules.

Preserves this rule, but gives states the option to eliminate it as part of a waiver of insurance market rules.
Underwriting Premiums for Older vs. Younger Americans
Bans insurers selling policies directly to individuals from charging their oldest customers more than three times what they charge their youngest ones.

Allows insurers to charge older customers the mathematically correct number of five times as much as younger ones.
Allows insurers to charge older customers the mathematically correct number of five times as much as younger ones.
Individual Mandate
Requires all Americans to buy health insurance or pay a tax penalty, with exceptions for 30+ categories of ‘hardship’

Eliminates the penalties. Instead, when people who've gone uninsured decide to buy health insurance, they'll have to pay a 30% surcharge on their premiums for one year.

Eliminates the penalties. Unclear what will dissuade persons from gaming this system.
Employer Mandate
Requires companies with 50 or more employees to offer government approved, affordable health insurance to persons working 30 or more hours per week. 

Eliminates the penalties.
Eliminates the penalties.
Health Savings Accounts
In 2017, allows an individual to put $3,400 and a family to put $6,750 into a tax-free health savings account.

Effectively doubles the Obamacare amounts. 
Effectively doubles the Obamacare amounts. 
Flexible Spending Accounts
Prevents Americans from using these pre-tax accounts for over-the-counter medications without also obtaining a prescription.  Caps overall use of an FSA to $2,500 per person per year. 

Allows over-the-counter use of FSAs without first obtaining a prescription.  Removes annual cap on the amount of money a person may put in an FSA. 
Allows over-the-counter use of FSAs without first obtaining a prescription.  Removes annual cap on the amount of money a person may put in an FSA. 
Allow States to Impose Work Requirements for Able Bodied Persons Seeking Medicaid
PPACA did not allow for this. 
Gives states the option of requiring some Medicaid recipients to work or pursue job training.

Gives states the option of requiring some Medicaid recipients to work or pursue job training.


Thursday, June 22, 2017

CalPERS Premiums Only Set to Increase 2.33% in 2018

From CalPERS
The California Public Employees' Retirement System Board of Administration today approved health care rate and plan changes for 2018 that include an average 2.33 percent overall premium increase. Individual plan increases may vary, but the overall Medicare and Basic (non-Medicare) increase is the lowest in 20 years. ... 
Lower overall premiums were driven largely by an average decrease of 2.5 percent for Preferred Provider Organization (PPO) plans. Premiums for members enrolled in Health Maintenance Organization (HMO) plans increased an average of 3.71 percent, including an 8.2 percent increase for Kaiser. 
CalPERS Medicare plan enrollees will see premiums increase by 1 percent overall, with HMOs rising an average of 4.27 percent and PPOs averaging a decrease of 2.04 percent. 
The rates will take effect on January 1, 2018. ...

Senate GOP Unveils PPACA Repeal Bill Today - Initial Thoughts on Armstrong and Getty

Senate Republican leaders unveiled their PPACA repeal bill this morning giving a first look at the bill designed to repeal Obamacare. We are still analyzing the bill, but upon initial review it appears to shrink the Obamacare Medicaid expansion more slowly than the House bill would have and proposes eliminating nearly all PPACA taxes. The bill also creates a new system of federal tax credits to help people purchase health insurance that is more generous than the House bill; extending up to 350% of the federal poverty level (as opposed to PPACA's 400%).

It is important to remember that this bill is not in finalized form, and there will likely be changes. We will continue to update you on pertinent developments and will advise if and when action must be taken.

I was on the Armstrong and Getty show this morning in a brief segment with my initial thoughts.  I'll be on for a more full explanation tomorrow.


Here is what some media outlets are saying about the proposed law (the best one is the last one from Megan McArdle at Bloomberg):

Senate Leaders Unveil Bill to Repeal the Affordable Care Act
June 22, 2017 –New York Times
Excerpt: “The Senate bill — once promised as a top-to-bottom revamp of the health bill passed by the House last month — instead maintains its structure, with modest adjustments. The Senate version is, in some respects, more moderate than the House bill, offering more financial assistance to some lower-income people to help them defray the rapidly rising cost of private health insurance.”

Senate health-care draft repeals Obamacare taxes, provides bigger subsidies for low-income Americans than House bill

June 22, 2017 – Washington Post
Excerpt: “The bill eliminates the employer and employee mandates; replaces the ACA’s income-based subsidies with tiered tax credits, gradually increasing for older Americans; allows states to apply for waivers to define their own essential health benefit requirements; expands the limits for Health Savings Accounts; discontinues Medicaid expansion in 2020; and repeals most of the ACA’s taxes. The legislation would delay implementation of the Cadillac Tax by five years, from 2020 to 2025, and it importantly preserves the tax exclusion for employer sponsored insurance.”

Senate finally unveils secret health care bill
June 22, 2017 – CNN
Excerpts: “The bill is very similar to the version of the House bill that passed last month but with some key changes. The text released Thursday showed the Senate legislation would still make major changes to the nation's health care system, repealing Obamacare's individual mandate, drastically cutting back federal support of Medicaid, eliminating Obamacare's taxes on the wealthy, insurers and others. The Senate plan however would keep Obamacare's subsidies to help people pay for individual coverage.”

"Four conservative Republican senators -- Rand Paul, Ted Cruz, Ron Johnson and Mike Lee -- said they opposed the current version. And key votes such as Sens. Dean Heller and Susan Collins have also withheld support."
  
Senate GOP brings Obamacare repeal bill out of the shadows
June 22, 2017 – Politico
Excerpt: “The Senate bill — blandly dubbed the Better Care Reconciliation Act of 2017 — eliminates Obamacare’s mandates and hundreds of millions of dollars in taxes on the wealthy and the health industry. Notably, it doesn’t impose any new requirement that people purchase or maintain coverage — a major element that Republican leaders said they’re still working on.

The bill also would phase out Obamacare's Medicaid expansion over three years beginning in 2021 and would make deep cuts to the long-term Medicaid program. It keeps the structure of Obamacare's insurance subsidies to help low-income people buy insurance, but tweaks them to cover only those making up to 350 percent of the federal poverty line — down from the 400 percent covered under Obamacare.”

And the the single best analysis I've seen yet, once again, comes from Megan McArdle.

Republicans' Health-Care Bills Boil Down to ... More Obamacare
June 22, 2017 - Megan McArdle writing at Bloomberg
Excerpt: "You know, if you tilt your head to one side and squint a little, you can sort of see … Obamacare.  I called the House health care bill “Obamacare Lite,” but compared to the Senate bill, the House was offering a radical new taste sensation. The Senate bill touches very little of the underlying architecture of Obamacare; all it does is eliminate the insurance mandates, cut spending and give states somewhat more autonomy in how those dollars are spent. Repeal Obamacare, you say? They’re barely even worrying it.

Probably this was necessary to negotiate the tricky Senate math; supporters need almost every Republican to vote for it. Keeping the moderates and the conservatives on board means no radical shifts, or angry hospital lobbyists calling Republican senators whose states participated in the Medicaid expansion.

But while there are a few things to like in this bill, overall, it’s a mess."
  

Friday, June 16, 2017

PwC: Medical Costs to Increase 6.5% in 2018

From Healthcare Finance:
The era if wild swings and double-digit growth in employer medical costs appears to be ending, at least according to PricewaterhouseCoopers: according to the firm's Health Research Institute, there will likely be a 6.5 percent growth rate in 2018, only half a percentage point higher than this year. 
And after anticipated changes in benefit plan design, such as changes to copays and network size, the net growth rate is expected to be one percentage point lower, at 5.5 percent. ...
 

DOL Withdraws Administrative Interpretations on Worker Classification and Joint Employer Status

On June 7, 2017, the U.S. Department of Labor (DOL) withdrew two administrative interpretations issued during the Obama administration. The withdrawal of these administrative interpretations are effective immediately.

The DOL withdrew a 2015 interpretation concerning the classification of workers as employees or independent contractors under the Fair Labor Standards Act (FLSA).

The DOL also withdrew a 2016 interpretation on when two employers will be determined joint employers under the FLSA and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). This 2016 interpretation was intended to prevent employers from using intermediaries as a shield for liability under these two acts.

The DOL, however, emphasized that: "Removal of the administrator interpretations does not change the legal responsibilities of employers under the FLSA and MSPA, as reflected in the department's long-standing regulations and case law." The DOL indicated that it will "continue to fully and fairly enforce all laws within its jurisdiction" including the FLSA and MSPA.

Our legislative alerts provide a summary of the withdrawal of these administrative interpretations as well as action steps for employers.

Legislative Alerts:
  

Monday, June 12, 2017

Who Gets the Blame When Obamacare Fails?

I agree with part of Mr. Laszewski's opinion. Where I think he is off is in assuming that the below offer would be enough. If the Trump Administration didn't also commit to pass new legislation with Democrats to bolster elements of PPACA, Republicans would still take the blame from NBC, CBS, ABC, NYT, Wa Po, Huff Po, Politico, etc. The GOP will never win the public relations battle with respect to healthcare in an industry dominated by personnel who only identify with their side at a 7% rate.

This is from Bob Laszewski writing at CNBC:
All Trump and his administration are doing is giving their political opponents ammunition to argue that Obamacare was just fine before Trump showed up and wrecked it.

I offered the president some unsolicited advice in a recent column: "I would do everything from a regulatory perspective Nancy Pelosi is telling you to do to support the exchange markets. In fact, invite her in to give you the list. There aren't enough regulatory opportunities to fix this anyway. Having done that, how could the Democrats then argue a blowup was your fault?"
 

Friday, June 9, 2017

Why Not Try 'Medicare for All'? Glad You Asked

This is a fantastic summary of the issues around expanding Medicare to all. As usual Megan's language and arguments are very clear and accessible. From Megan McArdle at Bloomberg:
Because costs will spiral out of control. Because hospital care will suffer. Because the stakes are too high for a mass experiment. 
When arguing about national health care in this country, those favoring some sort of government-led system always come back to one argument. “But everyone loves Medicare,” they say. “If Medicare’s so great, why not expand it to everyone?”
Indeed, Alan Grayson, a Democratic congressman from Florida, recently introduced a bill that would allow people of any age to buy into the program. 
And what’s wrong with that? After all, if people buy in, it won’t cost the government a dime, right? 
I’m so glad you asked. 
For one thing, as Obamacare has shown, “people will be paying for it, not the government, so what’s the problem?” is not quite as simple as it sounded when you were saying it in front of a room of cheering supporters. For whom is it likely to be a good deal? Sick people. Medicare can adjust the buy-in premium to take account of this, but then next year, folks are going to be looking at the new higher premiums, and who is likely to opt in at that high price? The sickest folks in the insurance pool. Better adjust those premiums again … 
Yes, it’s our old friend, adverse selection, which pops up whenever you build an insurance market without underwriting. Medicare is a government program, so it can’t death spiral out of existence. However, there will be considerable political pressure to set the premiums well below the expected actuarial expenditure on care for beneficiaries. So instead of a death spiral, you get a fiscal crisis in Medicare. 
Yet here’s a measure of how badly thought out this idea of expanded Medicare is: Adverse selection isn’t even its biggest problem. A far bigger problem is what this might do to hospital budgets. Why? Because Medicare doesn’t necessarily pay enough to keep those hospitals running.
Deep in the weeds of health wonkdom, a long battle has been going on over whether -- and to what extent -- Medicare controls its costs by offloading them onto private insurers, a phenomenon called cost shifting. Conservatives often promote a somewhat simplistic version of this argument: Medicare pays too little, so hospitals have to charge insurers more to make up the lost reimbursements.
 
As stated, this is probably wrong. The empirical evidence to support it is weak, and even just theoretically, this misunderstands how market actors behave. It treats costs as a budget problem: Companies have to cover certain costs, and if one customer pays less, another customer has to pay more. (Liberals often make this mistake in reverse when talking about drug prices, assuming that if the U.S. cracked down on pharmaceutical reimbursements, European governments would have to raise their reimbursements to make up for the lost cash, thereby ending their free riding on the new drugs produced from U.S.-derived profits.) 
In fact, economists generally assume that sellers are charging each buyer as much as they can. Having one customer refuse to pay so much doesn’t make your other customers more willing to pay, so there’s no reason to think that you’ll be able to raise the price you charge them. 
However, there remains an undeniable fact: Medicare pays significantly less than private insurers. And this can’t simply be explained by the fact that Medicare covers a huge number of people, because so do Aetna and Humana and Anthem and Blue Cross. 
There’s some evidence that Medicare reimbursements don't quite cover the average cost of having a patient in the hospital. The hospital's fixed costs are mostly getting covered by higher reimbursements from private payers. (Though this varies by hospital, and is difficult to tease out, and therefore disputed.) 
Note that this isn’t necessarily somehow “cheating.” There are plenty of people flying around the country whose fares don’t cover the average cost of their flight. It still makes good economic sense to sell them tickets at low fares, because the airlines are getting more revenue from a cheap ticket than from an empty seat. Ditto hospitals deciding whether to have empty beds. ... 
So how you feel about this Representative Grayson's proposal should probably depend on how sure you are that there are vast, easily obtained cost efficiencies to be had in hospital operations. Myself, I’d want to be a lot surer than I am before I started running a mass experiment, for our nation's physical and fiscal health. 
 Full story here
  

Thursday, June 8, 2017

Fiduciary Responsibility for Plan Sponsors

A great summary from Brenna Davenport over at Poyner Spruill, LLP:
In the summer of 2016, over 100 of CIGNA’s self-insured health plan clients were sued with the complaint alleging breach of the defendants’ fiduciary duties under ERISA for engaging in widespread fraudulent behavior involving the use of plan funds. This case should serve as a wake-up call for employers sponsoring health plans nationwide – this will not be the last case of its kind to be filed. 
The wake-up call has to do with fiduciary duties arising under ERISA. These duties include:
  • Acting solely in the interests of the participants and beneficiaries and avoiding conflicts of interest;
  • Administering the plan in accordance with plan terms (subject to ERISA);
  • Acting for the exclusive purpose of providing plan benefits or for defraying reasonable plan administration expenses; and
  • Acting prudently.
Much attention has been placed on these duties in the retirement context, inspired in part by the DOL’s release of regulations regarding fee disclosures and recent revamping of the fiduciary rule. However, historically, very little attention has been extended to the application of fiduciary responsibilities to welfare benefits plans.
This is unfortunate because health plans in particular are a type of welfare benefit ripe for fiduciary liability, mainly arising from well-recognized waste in the system. The Economist has reported that fraudulent health care claims consume $272 billion each year and the Institute of Medicine estimated that 30% of all health care spending is unnecessary in its 2013 “Best Care at Lower Cost” report. It is a growing thought among litigators that fiduciaries of health plans have a duty to mitigate this waste.
In order to address this responsibility, plan sponsors of health plans should pursue a more proactive approach to this benefit. Key action-items can include:
  • Incentivizing wise decisions about health care consumption through consumer-driven models such as the HDHP/HSA. While the popularity of such plans has grown over time, there is still considerable education to be done, as many participants confuse an HSA with an FSA. Likewise, plans can be structured through reimbursement tiers to incentivize the use of generic drugs, since drugs are one of the largest areas of cost and waste. Other areas of potential cost savings include narrow-network, bundled case rate benefit plans.
  • Considering the pros and cons of a self-insured group heal plan. Even smaller employers are moving to self-insurance through health insurance captives or even MEWAs. Given a sufficient number of participants, self-insurance can be a more cost-effective benefit that can provide comparable or even better coverage than traditional fully-insured options.
  • Documenting the plan accurately and in accordance with ERISA. This should include cleaning up claims procedure language. Similarly, fiduciaries (especially of self-insured plans) should monitor any third party administering the plan to ensure that third party is following the plan’s terms correctly, administering claims efficiently and accurately, utilizing plan funds appropriately, and charging a reasonable fee. This means including performance-based metrics in the services agreement, periodically auditing the service provider, and conducting RFPs or other assessments of the fees charged.
  • Instituting wellness programs and even establishing on-site clinics can lead to a healthier workforce, reduce claims, and even increase worker productivity. As on-site clinic administration services have matured, even groups of similar smaller employers can now assess the possibilities of a shared near-site clinic.
...This is an untapped area of cost-containment for many employers. And no one wants to be on the hook for personal liability arising from a breach of fiduciary duties – especially when that liability could reach hundreds of billions of dollars in the aggregate.
 

Wednesday, June 7, 2017

California Senate Passes Single-Payer Healthcare Plan (SB 562): News Coverage

June 1, 2017- SB 562, the proposed single-payer health care plan, was passed by the California Senate on Thursday, June 1, 2017 with a 23-14 vote. The legislation, titled the Healthy California Act , was coauthored by Senators Ricardo Lara and Toni Atkins and seeks to create a single-payer healthcare system in California, under which all Californians would receive health coverage regardless of immigration status or ability to pay for the coverage.

Single-payer healthcare plan advances in California Senate-without a way to pay its $400-billion tab
June 4, 2017 – Los Angeles Times
Excerpt: “A proposal to adopt a single-payer healthcare system for California took an initial step forward Thursday when the state Senate approved a bare-bones bill that lacks a method for paying the $400-billion cost of the plan. The proposal was made by legislators led by Sen. Ricardo Lara (D-Bell Gardens) at the same time President Trump and Republican members of Congress are working to repeal and replace the federal Affordable Care Act.”

California Senate passes single-payer health care proposal, but it’s already facing an uphill battle
June 4, 2017 – Salon
Excerpt: “The California state Senate passed a single-payer health care proposal on Thursday, but the bill has a long road ahead and the state must still determine how to bear the costs, according to the Los Angeles Times. The proposal has been led by Democratic Sen. Ricardo Lara, who believes that health care is a right for all citizens. If the bill comes into is ever made into law, California would become the first state in the U.S. to enact universal health care coverage. “Under a single-payer plan, the government replaces private insurance companies, paying doctors and hospitals for healthcare,” the Times reported.”

California’s single-payer plan costs $400 billion — twice the state’s entire budget
May 22, 2017-Vox
Excerpt: “California is undertaking an ambitious bid to establish a single-payer health care system, and now its plan has a price tag: $400 billion a year. The state legislature has been debating a plan this year to implement a government insurance program to cover all Californians, including those without legal status.”

June 1, 2017 – The Sacramento Bee
Excerpt: “Under the plan, government would negotiate prices with doctors, hospitals and other providers, acting as the “single payer” for everyone’s health care in the place of insurance companies. All Californians would receive coverage regardless of immigration status or ability to pay.”
  

Tuesday, June 6, 2017

Multi-Million-Dollar Medical Cases Increased 68% Over Past Four Years: Sun Life Report

From Sun Life and PR Newswire:
Health care claims that breach the million-dollar mark continue to rise, according to Sun Life's 5th annual catastrophic claims report. The report, which details the top 10 catastrophic medical conditions from 2013 to 2016, found that the number of multi-million-dollar claimants increased 68% from 114 to 192 during that period. While multi-million-dollar cases make up a small number of overall claimants, they are a greater proportion of reimbursement dollars. In 2016, multi-million-dollar cases made up 2.2% of claimants but generated 23% of total stop-loss reimbursements. 
Over the four-year period, total costs for catastrophic claims reached $6.1 billion, with $2.7 billion paid in stop-loss reimbursements. Sun Life Financial U.S. is the leading independent provider of stop-loss insurance for self-funded employers who currently cover 4.6 million lives. Sun Life's catastrophic claims research also found:
  • Cancer dominates the top 10 - Based on dollar amount and percentage of total stop-loss claims, malignant neoplasms and leukemia/lymphoma/multiple myeloma (cancers) took spots 1 and 2 on the top-ten catastrophic claims list, representing more than a quarter (26.7%) of total stop-loss reimbursements from 2013-2016; 
  • Breast cancer prevalence - Breast cancer is the most common form of cancer in the U.S., with an estimated 247,000 new cases reported in 2016, and an average paid claim amount of $147,100; 
  • Transplants costs are high - Bone marrow/stem cell transplants are the costliest transplant procedures, with an average paid claim cost of about $400,000. Transplants were the most common high-dollar claim condition among 20 to 39 year-olds; 
  • Highest individual claim - Of the top-10 conditions, the highest claim was $3.2 million, for malignant neoplasm (cancer). The attached chart details the highest claims in each top-10 condition; 
  • The top three highest-cost conditions - Leukemia, lymphoma and/or multiple myeloma (cancers); congenital anomalies (conditions present at birth); and malignant neoplasm (cancers) are more likely to result in million-dollar claimants due to their frequency; and 
  • IV medications tracked in the study pushed up costs - When looking at data on intravenous drugs, the report showed they accounted for 48% of total paid charges on the top five highest-dollar claimants. Of the 562 claimants exceeding $1 million between 2013 and 2016, 45 generated more than $1 million in high-cost intravenous medications. ...
 

Monday, June 5, 2017

On Armstrong & Getty Radio Discussing Various Approaches to Universal Healthcare: "The Fiscal Discipline Of The Singaporeans"

I was on the Armstrong and Getty Radio Program this morning, spending the 8 AM hour with Joe Getty discussing the degree of governmental involvement in healthcare in the U.S and how Canada, the U.K., Singapore and Switzerland deliver healthcare to their citizens.  


8 AM - 1 - Our Obamacare lawyer Craig Gottwals. 
2 - More with Craig. 3 - The News with Marshall Phillips. 4 - More Gottwals.
 
UCLA Study: Taxpayers Foot 70 Percent Of California’s Health Care Tab
 

Friday, June 2, 2017

Detailed Analysis as to How The American Health Care Act Would Change Private Employer Plans & Taxes

The Congressional Research Service issued a 72 page research paper on the resulting changes if the American Health Care Act (AHCA) were to pass and largely supplant the Patient Protection and Affordable Care Act (PPACA).

The full report can be reviewed here.  Set forth below is a 10 page summary, in table format, as to how the change would impact private employer plans and taxes.  The last two pages of the summary also include a timeline.
 

What if the Employer Mandate is Repealed?

As we watch Washington and the Republican plans to repeal and replace PPACA, it is understandable that employers are asking, "What if?"

While the AHCA has indeed passed the House, that the bill, and any repeal in general face an uncertain path in the Senate. Until a repeal and replace bill passes both the House and the Senate, and is signed by the President, Obamacare's employer mandates and penalties remain the law of the land.

Although the ACHA's future is undecided, employers are anxious to know the repeal's impact on employers. Our legislative alert outlines the modifications of plan design that could be considered, if a repeal does take place, including:
  • Changing eligibility rules (hours worked requirements);
  • Eliminating the offer of coverage to part time, seasonal or temporary employees;
  • No longer using the monthly or look-back measurement methods to track hours;
  • Altering or increasing employee contributions 
  • Another important part of the, "What if" consideration is timing, communication and notification to participants, and ultimately written plan amendments and summary of material modifications (SMMs).
Employers that are making changes to eligibility rules, particularly mid-year changes, may want to consult with their legal counsel regarding any claims employees may assert concerning allegedly "vested" benefits or other ERISA concerns . Finally, many employers may decide to not make any changes, either at all or until next renewal, as the administrative costs and morale issues associated may not warrant a change.

As of this date, it appears certain ACA market reforms will remain in place, including waiting periods of 90 days. Our alert reviews this and other important planning points. Just remember, this is planning for "What if" and not the time to begin any implementation; For that, we await Washington and the Senate. As summer progresses, we should have a better idea of Senate actions and advise you of any plan design implications .

Thursday, June 1, 2017

The IRS Posts Obamacare Tax Implications, Report of 2015 Tax Year

In 2015:
  • 5 million tax return filers received taxpayer support totaling $18 billion to buy their health plan. 
  • 3.3 million return filers erroneously received too much taxpayer support to buy their health plan and must pay (or have already paid) back $2.6 billion. 
  • 6.6 million filers took their spanking and paid a penalty for not buying government approved healthcare.  
    • That total payment (labeled a tax not a penalty as you recall) amounted to $3 billion; 
    • or an average of $457 per tax return.  
Source: IRS.

Wednesday, May 31, 2017

California’s Single-Payer Health Care Plan Would Cost More Than the State’s Whole Budget

From Reason:
Like in Colorado, New York, and Vermont, California is learning that a single-payer plan would be prohibitively expensive. 
Stop me if you've heard this one before. A state considers implementing a single-payer health care system, then learns it would have to use its entire annual budget, plus some, to fund the idea. 
The latest stop on this magical mystery tour of progressive health care plans is California, where U.S. Sen. Bernie Sanders (I-Vermont) has been campaigning on behalf of a proposed state-run single-payer system. On Monday, state lawmakers in Sacramento got their first look at the price tag for the proposal, which rings in at a whopping $400 billion annually. 
The Sacramento Bee notes that, even after accounting for an estimated $200 billion that could be saved by replacing current state-run health programs with the single-payer program, the state would still need to come up with $200 billion annually.

This year's state budget in California, by the way, is about $180 billion. That means that implementing a single-payer health care system would require doubling (at least) the state's current tax burden. The analysis of the health care proposal presented to lawmakers on Monday suggests a 15 percent increase to the state's payroll tax to provide the necessary revenue.
 
The cost analysis is seen as "the biggest hurdle to creating a universal system," the Bee reports. ...
Gee, ya think?  
 

Under PPACA, Insurance Premiums Have Doubled Since 2013

So, are you getting twice as much value for your money?

From Modern Healthcare:
An HHS report released late Tuesday paints a grim picture of the rising health insurance premiums under the Affordable Care Act. But health policy experts explained that while premiums may have gone up since the ACA was implemented, consumers are also getting more bang for their buck. 
The report, which is the first ACA report out of HHS' Office of the Assistant Secretary for Planning and Evaluation published under the direction of the Trump administration, concluded that individual health insurance premiums grew 105% on average between 2013—before the ACA exchange went into effect—and 2017. 
For the 39 states that use HealthCare.gov, average monthly premiums rose from an average of $232 in 2013 to $476 in 2017, the report said. ...
 

Stopping (or Delaying) Obamacare's Less Known, Unlawful Subsidies Accelerates Demise of PPACA

From the New York Times:
The Trump administration asked a federal appeals court on Monday to delay ruling on a lawsuit that could determine whether the government will continue paying subsidies under the Affordable Care Act to health insurance companies for the benefit of low-income people — effectively prolonging uncertainty that is already rattling the health law.
The request could further destabilize insurance markets as insurers are developing rates and deciding whether to participate in 2018.
Insurers are supposed to submit their proposals to the federal government by June 21 and have already filed rate requests with several states. Loss of the cost-sharing subsidies, they say, could lead them to increase premiums by 15 percent to 20 percent or more, on top of any increases they might seek for other reasons.
In recent statements, the administration has not made any commitment to pay the subsidies beyond this month. ...
The legal fight stems from a lawsuit that the House of Representatives filed in November 2014 against the Obama administration. Last May, Judge Rosemary M. Collyer of the Federal District Court here ruled for the House, finding that the Health and Human Services Department had illegally paid billions of dollars in subsidies to health insurance companies.
The subsidies reimburse insurers for reducing deductibles and other out-of-pocket costs for low-income consumers — seven million people this year.
Judge Collyer said the spending violated the Constitution because Congress had never provided explicit authority for it. In particular, she said, the payments violated Article I of the Constitution, which states, “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”
“An appropriation must be expressly stated; it cannot be inferred or implied,” Judge Collyer declared.
President Barack Obama requested money for the cost-sharing subsidies as part of a budget he sent Congress in April 2013. Congress never approved the request. But the Obama administration saw the subsidies as essential to the success of the Affordable Care Act and began making the payments in early 2014, using money from a separate account established for tax refunds and tax credits.
Judge Collyer ordered a halt to the payments last year but suspended her order to allow the government to appeal.
The case has created an awkward situation for the Trump administration and for Republicans in Congress who began the lawsuit.
If the government continues paying the subsidies, it will, in effect, prop up the Affordable Care Act, even though Mr. Trump and congressional Republicans want to tear it down. On the other hand, if the government stops paying the subsidies, many insurers say they will sharply increase premiums or pull out of Affordable Care Act marketplaces, and Democrats will surely accuse Republicans of taking coverage away from millions of Americans.
The Trump administration has sent mixed signals, confusing insurers and consumers alike. The Health and Human Services Department said last month that it would continue paying the subsidies while the lawsuit was being litigated. But Mr. Trump has threatened to withhold the subsidies as a way to force Democrats to negotiate with him on a replacement for the 2010 health care law.
Several senior House Republicans have said they are willing to appropriate money for the subsidies, but the administration does not want that.
Mick Mulvaney, the director of the White House Office of Management and Budget, refers to the subsidies as “Obamacare bailout payments” and said on May 2 that the administration had not made a commitment to pay them beyond this month. Mr. Trump said he could stop the payments “anytime I want.”
The Congressional Budget Office estimates that the cost-sharing subsidies will cost $7 billion this year and $135 billion from 2018 to 2027.
The subsidies are available to people with incomes from 100 percent to 250 percent of the poverty level ($11,880 to $29,700 a year for an individual). 
  

California Seeks to Expand Government Healthcare for Undocumented Persons

From California Healthline:
California could become the first state to extend full Medicaid benefits to undocumented immigrants up to age 26 after two key legislative committees last week approved money for such an expansion. 
The Assembly and Senate budget committees both approved using some of the money from California’s recently passed tobacco tax to cover up to 80,000 unlawfully present young adults under the state’s version of Medicaid, known as Medi-Cal. 
The committees approved different amounts of money for the next budget year — about $54 million in the Assembly and about $86 million in the Senate — and they must agree on a single amount before starting state budget negotiations with Democratic Gov. Jerry Brown, who would have the final say. ... 
Beginning last May, California allowed eligible children who were in the U.S. without permission and under 19 to receive full Medi-Cal benefits. An estimated 190,000 such children have signed up for it since then. Previously, they were eligible for emergency services only under Medi-Cal. 
The federal government generally pays at least half of Medicaid costs, but California uses its own money to pay for these expanded Medi-Cal benefits. U.S. law largely bars the use of federal money for providing non-emergency Medicaid coverage to immigrants here without permission. 
Health Access, a Sacramento-based advocacy group, estimates that anywhere from 50,000 to 80,000 young adults without papers might enroll in Medi-Cal were the expansion to be approved. ...

Tuesday, May 30, 2017

On the Michael Berry Show Today to Discuss The Obamacare Replacement Proposal and Its CBO Score

I was on for a full hour with Michael this afternoon - only about 30 minutes once all of the commercials are edited out below.  My visit is the first half of this podcast:

  

Thursday, May 25, 2017

Benefits Opt-Out Payments Must Be Included in Overtime Calculation

Just in case employers needed any more reason to end their opt-out payment practices, this is from Kate McGovern Tornone over at the HR Daily Advisor:
The U.S. Supreme Court has left intact a 2016 appeals court ruling addressing how benefits opt-out payments interact with the Fair Labor Standards Act (FLSA). 
In a case of first impression, the 9th U.S. Circuit Court of Appeals (which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) ruled that when an employer pays an employee cash for opting out of its health insurance, that payment must be considered part of the employee’s “regular rate of pay” under the FLSA. This means it must be used in calculating compensation for overtime hours. ...
The 9th Circuit agreed with the city that its ruling may cause employers to discontinue cash-in-lieu of benefits payments, but said its hands were tied....
Full story here.