Tuesday, December 31, 2013

PPACA Minimum Essential Coverage and Shared Responsibility Reporting and Disclosure Requirements

This is from ERISA Diagnostics

... Where do the proposed regulations stand?

Comment letters were due and hearings held in November. A quick review of a sample of the comment letters revealed:

    • a request for further simplification of the reporting requirements
    • the tremendous burden that will be placed on reporting entities
    • request for use of a certification regarding the provisions of the shared responsibility requirements

Key points for plan sponsors to remember

    1. Insurance companies will be responsible for the reporting and disclosure for insured plans; employers will be responsible for the reporting and disclosure for self-insured plans but may outsource the requirement to their third party administrator.
    2. The reporting is on a calendar year basis regardless of the plan or policy year.
    3. If you are part of a controlled group, the reporting is required for each member of the controlled group.
    4. A written statement must be provided to the individuals/employees included in the IRS reports. As noted earlier, the IRS is considering consolidating the statements into one report.
    5. The reports and statements are first due in 2016; (January 31 to the individual; February 28 to the IRS if filed on paper, March 31 if filed electronically). Note the filing due date is the same as W-2 and 1099 reporting.
    6. The reporting requirements are detailed and numerous; confirm that either your insurance company or third party administrator are aware of the requirements and will be able to comply. Don’t forget to get it in writing, stay tuned for more developments and hope for continued simplification. ...

Market Freeing Tweaks to Obamacare

This is from Jonathan Weismann at the New York Times

... [Obamacare opponents] are considering several ideas for how to proceed. [Senator Ron] Johnson argued that 

  • Congress should do away with the mandate that most people obtain insurance, but not the online exchanges at the heart of the law. Instead, he said, 
  • the options in the marketplaces should be augmented by other choices that fall short of the law’s coverage standards, such as catastrophic health plans. ...

“The hardest problem for us is what to do next,” [Senator Lindsay] Graham said. “Should we just get out of the way and point out horror stories? Should we come up with a mini Contract With America on health care, or just say generally if you give us the Congress, the House and the Senate in 2014, here’s what we will do for you on multiple issues including health care? You become a more effective critic when you say, ‘Here’s what I’m for,’ and we’re not there yet. So there’s our struggle.”

Senator Kelly Ayotte, Republican of New Hampshire, said she was teaming up with Democrats on a host of incremental changes to the law, such as 

  • expanding health savings accounts and 
  • repealing a tax on medical devices. ...

Representative Tom Price, Republican of Georgia, a physician and a prominent conservative voice on health care, is pushing what he calls the Empowering Patients First Act, which would 

  • repeal the health care law but keep its prohibition on exclusions for pre-existing conditions in private health insurance.  The bill would 
  • allow for insurance to be sold across state lines, 
  • push small businesses to pool together to buy insurance for their employees, 
  • expand tax-free health savings accounts, 
  • cap malpractice lawsuits, and 
  • offer tax credits of $2,163 for individuals and $5,799 for families to buy health plans.

The American Action Forum, a conservative advocacy group run by Douglas Holtz Eakin, a former director of the Congressional Budget Office, analyzed the Price plan this month. The group concluded that it would lower insurance premiums by as much as 19 percent by 2023, while leaving the ranks of the uninsured about five percentage points higher than the Affordable Care Act would by then.

Representative Paul D. Ryan of Wisconsin, the Republican vice-presidential nominee in 2012 and a possible 2016 presidential hopeful, is preparing his own health insurance plan for release early next year.

Mr. Ryan’s plan will build on one that he and Senator Tom Coburn, Republican of Oklahoma, introduced in 2009, according to aides familiar with it. The proposal, called the Patients’ Choice Act, would have 

  • eliminated the tax break for employer-provided health care to finance 
  • a tax credit of about $5,700 for families and $2,300 for individuals. 
  • States would have been asked to create insurance marketplaces like the ones many have created under the Affordable Care Act. ...
  • [I]nstead of mandating penalties for failing to buy insurance, the approach would have automatically enrolled people unless they opted out.

Mr. Price said on Thursday that he was “cautiously optimistic” that he, other lawmakers and House Republican leaders could meld the different approaches into one alternative health plan to take to voters — and possibly the House floor — in the 2014 election season. ...

Monday, December 30, 2013

Obama Admin Tells Federal Community Service Workers That Obamacare Outlaws Their Government Provided Healthcare

  • If you like your government provided plan - you can't keep it
  • AmeriCorps workers were just told their plans don't comply with Obamacare
  • Those workers are at what Obama called, "the central cause" of his presidency 
  • I put the over/under for the next unilateral, anti-constitutional, Presidential exemption for them at 4 weeks.  
    • Announcement the Friday before the MKL three-day weekend is our odds-on favorite 

The Obama administration has told Vista volunteers and other AmeriCorps [one of Obama's pet programs] workers that their government-provided health coverage does not measure up to the standards of the new health care law, and that they may be subject to financial penalties unless they obtain insurance elsewhere.

The notice has surprised and worried workers in AmeriCorps, the federal community service program that is often described as a domestic version of the Peace Corps.

Mary Strasser, the director of AmeriCorps’ Vista program, described the changes in a bulletin to members on Dec. 16.

The coverage provided by the agency — the AmeriCorps Health Care Benefits Plan — “does not satisfy the individual responsibility requirement of the Affordable Care Act,” which takes effect on Jan. 1, Ms. Strasser said. Accordingly, she said, Vista members may be required to pay a tax penalty if they do not have other coverage and do not receive an exemption.

The impact on community service workers is another unanticipated consequence of the health care law, which is making coverage available at little or no cost to many uninsured people but disrupting coverage for others who already had it.

Abby Grosslein, a Vista member in New Orleans, said she thought it was strange that the health benefits provided by a federal agency did not meet the standards of a law adopted more than three and a half years ago. “It would be nice if the government waived the penalty because we are a federally funded program,” said Ms. Grosslein, 24, who is completing her third year of service with AmeriCorps. “It’s as if the right hand does not know what the left hand is doing.”

Moreover, she said: “The Affordable Care Act has been on the books since 2010. Why are we hearing only now that our health plan is not compliant?”

Thousands of private employers and state and local government agencies have revamped their employee health plans to meet the law’s requirements. But AmeriCorps says that its members are technically not employees, and that it does not have to provide them with the “minimum essential coverage” they need to comply with the individual mandate. “There will be no changes to the AmeriCorps Health Care Benefits Plan,” Ms. Strasser wrote.

Vista, or Volunteers in Service to America, was proposed by President John F. Kennedy in 1963, authorized by Congress in 1964 and folded into the AmeriCorps network of programs in 1993. Its members work in education, housing, jobs and social service programs.

President Obama — a onetime community organizer — is a big supporter, and he has called public service “a central cause” of his administration. In March, the White House said that “AmeriCorps may be one of America’s best assets,” transforming communities every day.

Rick Christman of Lexington, Ky., a former member of the board of AmeriCorps’ parent organization, the Corporation for National and Community Service, said no one expected that Vista workers would be subject to penalties because their health coverage was inadequate.

“It’s unfortunate,” Mr. Christman said. ...

New ObamaCare Fees Coming in 2014

This is from S. A. Miller and Geoff Earl at The New York Post

Here comes the ObamaCare tax bill.

The cost of President Obama’s massive health-care law will hit Americans in 2014 as new taxes pile up on their insurance premiums and on their income-tax bills.

Most insurers aren’t advertising the ObamaCare taxes that are added on to premiums, opting instead to discretely pass them on to customers while quietly lobbying lawmakers for a break.

But one insurance company, Blue Cross Blue Shield of Alabama, laid bare the taxes on its bills with a separate line item for “Affordable Care Act Fees and Taxes.”

The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.

The new taxes and fees include a 2 percent levy on every health plan, which is expected to net about $8 billion for the government in 2014 and increase to $14.3 billion in 2018.

There’s also a $2 fee per policy that goes into a new medical-research trust fund called the Patient Centered Outcomes Research Institute.
Insurers pay a 3.5 percent user fee to sell medical plans on the HealthCare.gov Web site.

ObamaCare supporters argue that federal subsidies for many low-income Americans will not only cover the taxes, but pay a big chunk of the premiums.

But ObamaCare taxes don’t stop with health-plan premiums.

Americans also will pay hidden taxes, such as the 2.3 percent medical-device tax that will inflate the cost of items such as pacemakers, stents and prosthetic limbs.

Those with high out-of-pocket medical expenses also will get smaller income-tax deductions.

Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.

Then there’s the new Medicare tax.

Under ObamaCare, individual tax filers earning more than $200,000 and families earning more than $250,000 will pay an added 0.9 percent Medicare surtax on top of the existing 1.45 percent Medicare payroll tax.

They’ll also pay an extra 3.8 percent Medicare tax on unearned income, such as investment dividends, rental income and capital gains.

Meanwhile, the Obama administration touted a surge of more than 2 million visitors Monday at HealthCare.gov, plus about 250,000 calls to ObamaCare call centers.

“Volumes remain high but not equal to [Monday] and we have not had to deploy our queuing system on the site,” said Julie Bataille, a spokeswoman for the Centers for Medicare and Medicaid Services, referring to a virtual waiting room that is activated when the site is overloaded.

“We are taking thousands of calls at our call centers, which remain open until midnight, and we are seeing thousands of visitors complete enrollment online,” she said.

It wasn’t smooth sailing for everyone on the troubled site.

Software techie Jeff Karaaro tweeted in frustration: “Got three different codes trying to submit plan choices. No [one] can tell me what they mean. I nor call center can complete my application due to error.”

Sunday, December 29, 2013

Brain function 'boosted for days after reading a novel'

This is from Thomas Jivanda at the Independent

Being pulled into the world of a gripping novel can trigger actual, measurable changes in the brain that linger for at least five days after reading, scientists have said.

The new research, carried out at Emory University in the US, found that reading a good book may cause heightened connectivity in the brain and neurological changes that persist in a similar way to muscle memory.

The changes were registered in the left temporal cortex, an area of the brain associated with receptivity for language, as well as the the primary sensory motor region of the brain.

Neurons of this region have been associated with tricking the mind into thinking it is doing something it is not, a phenomenon known as grounded cognition - for example, just thinking about running, can activate the neurons associated with the physical act of running.

“The neural changes that we found associated with physical sensation and movement systems suggest that reading a novel can transport you into the body of the protagonist,” said neuroscientist Professor Gregory Berns, lead author of the study. ...

21 students took part in the study, with all participants reading the same book -  Pompeii, a 2003 thriller by Robert Harris, which was chosen for its page turning plot. ...

Over 19 days the students read a portion of the book in the evening then had fMRI scans the following morning. Once the book was finished, their brains were scanned for five days after.

The neurological changes were found to have continued for all the five days after finishing, proving that the impact was not just an immediate reaction but has a lasting influence.

“Even though the participants were not actually reading the novel while they were in the scanner, they retained this heightened connectivity,” added Prof Berns. “We call that a ‘shadow activity,’ almost like a muscle memory.”

Saturday, December 28, 2013

State Obamacare exchanges halt payments for 'substandard, messed-up' websites – built by the same contractor that botched healthcare.gov

This is from David Martosko at The Daily Mail
    • 'If we could do it all over again,' a Massachusetts official said, 'we would have been better off hiring a half-dozen undergrads at MIT'
    • Vermont, Hawaii and Massachusetts are among the states complaining about how CGI Global's U.S. arm handled their Obamacare sites
    • Massachusetts is holding back all but $11 million of $69 million in contract payments until its site works properly
    • Vermont is stopping payment on at least $6.1 million to the same firm
    • Hawaii's Web portal launched two weeks late and performed so badly that the executive director of the state insurance exchange resigned in disgrace

Several Obamacare exchanges in states that didn't participate in the healthcare.gov fiasco are now having so much trouble with their own health insurance websites that they're withholding payments to their biggest IT contractor – and it's the same company that botched the federal government's insurance portal.

CGI Group, the Montreal company behind the White House's error-prone, $677 million online white elephant, is under fire in Massachusetts, Vermont and Hawaii after those states' Affordable Care Act websites suffered from some of the same problems that first made Obamacare a late-night punchline in October.

The Commonwealth Health Connector has paid just $11 million to CGI for the Massachusetts project, although the website contract carried a $69 price tag, according to Fox News

A Massachusetts government official who requested anonymity told MailOnline that his state was 'just one of the governments that got substandard, messed-up results' from the contractors it chose.

'If we could do it all over again,' the official said, 'we would have been better off hiring a half-dozen undergrads at MIT.'

During his end-of-year press conference, President Obama blamed some of his administration's health care website woes on the rules that govern how IT work is contracted

During his end-of-year press conference, President Obama blamed some of his administration's health care website woes on the rules that govern how IT work is contracted. ...

Coral Andrews, executive director of the Hawaii Health Connector, resigned on Dec. 6 because her state's Obamacare website was weeks late and registered hundreds -- instead of tens of thousands -- of new insurance customers

Coral Andrews, executive director of the Hawaii Health Connector, resigned on Dec. 6 because her state's Obamacare website was weeks late and registered hundreds -- instead of tens of thousands -- of new insurance customers

Spokesman Jason Lefferts told The Boston Globe that 'CGI has consistently underperformed, which is frustrating and a serious concern.'

'We are holding the vendor accountable for its underperformance and will continue to apply nonstop pressure to work to fix defects and improve performance.'

The state's officials will hold a January 9 meeting to determine how to proceed, but they're not pleased with the progress so far.

Vermont Health Connect, saddled with an $89 million contract on a website that wouldn't reliably let taxpayers enroll in coverage until early December, has held back $5.1 million of the $11 million CGI has billed to date, and is challenging other invoices totaling more than another $1 million.

'I've lost confidence in the contractors that were supposed to deliver a fully functioning website on Oct. 1,' Vermont Governor Peter Shumlin told the Globe. 'I'm going to continue to hold their feet to the fire until they get it right.'

Typical: Kathleen Sebelius (R), the secretary of Health and Human Services and the White House's chief Obamacare cheerleader, was left ashen-faced during a November photo-op when volunteers couldn't use healthcare.gov

Typical: Kathleen Sebelius (R), the secretary of Health and Human Services and the White House's chief Obamacare cheerleader, was left ashen-faced during a November photo-op when volunteers couldn't use healthcare.gov

Hawaii, Colorado, Kentucky, New Mexico, and California all used CGI as their principal Obamacare website contractor, and some have fared better than others. ...

California has been a rare bright spot in President Obama's plan to replace the nation's medical insurance system with government-brokered insurance marketplaces. But Hawaii's opened two weeks later than promised, and has performed so poorly that its executive director resigned on December 6.

CGI Global's U.S. arm also has a $93.7 million contract with the federal government, but a Health and Human Services official told MailOnline that the amount of its billings would not be made public.

Overall, Uncle Same has paid out $319 million to the contractors responsible for building healthcare.gov, a yet-to-be-completed project that Silicon Valley experts have told reporters should have cost no more than $10 million to bring online.

President Obama said during a Dec. 20 press conference that the federal government's contracting rules were partly responsible for the debacle.

'Part of it, as I've said before, had to do with how IT procurement generally is done,' he said.

A month earlier, Obama told a group of Wall Street CEOs that 'the way the federal government does procurement and does IT is just generally not very efficient.'

'In fact, there's probably no bigger gap between the private sector and the public sector,' he lamented.

McDonald's Warns Employees Not to Eat McDonald's Food

This is from the DailyMail:

McDonald's doesn't think its employees should eat the food they serve.

The fast food giant has advised employees to avoid meals with burgers and fries and to eat healthier options like salad and sandwiches.

The advice was dispensed on the now-infamous McResource Line, the employees-only website that has told workers to sell their things and get second jobs to make ends meet.

The advice is given with graphics depicting the ‘unhealthy choice’ and the ‘healthier choice.’ McDonald’s own food is in the former column.

Despite featuring a vast array of deep fried delicacies, the Golden Arches reminds employees that ‘avoiding items that are deep fried are your best bet.’

The sensible advice also tells McWorkers to ‘limit the extras such as cheese, bacon and mayonnaise.’ Tasty add-ons that are staples of many menu items they serve on a daily basis.

A hamburger, fries and soda are warned against, because ‘eating a diet high in fat puts people at rick for becoming overweight.’

Many locations offer steep food discounts and short breaks to employees, virtually forcing them to eat the unhealthy food, often forcing the hand of workers without the time or means to eat elsewhere. ...

Friday, December 27, 2013

Government Not Required to Report Security Breaches of Obamacare Exchange Website

This is from Eric Boehm Watchdog.org:
Americans who buy health insurance through the federal Obamacare exchange website could have their personal information stolen by hackers and never even know it. 
Most of the state-run health exchange websites will be covered by state laws that require notification when government databases are breached by hackers. But there is no law requiring notification when databases run by the federal government are breached, and even though the Department of Health and Human Services was asked to include a notification provision in the rules being drawn up for the new federal exchange, it declined to do so. 
Other protections for individuals’ privacy, like the Health Insurance Portability and Accountability Act, or HIPAA, do not apply to the government-run exchange, only to health providers and insurance companies operating within the exchange. 
Privacy advocates and cyber-security experts have had concerns about the lack of a federal notification law for years and hope the scrutiny of the Obamacare exchange will finally bring change. ... 
The lack of a notification requirement is particularly bad for the health insurance exchange website because of all the questions surrounding the site’s security. Poor security, coupled with the website’s high-profile problems, could make it a target for hackers either seeking to steal identities or embarrass the government. ... 
Together it creates a possible nightmare scenario. Without strong security on the front end, the hastily built and not fully operational website could become a treasure trove for hackers looking to steal identities. But without any laws requiring that those victims be notified by the federal government users of the Federal health exchange will be in the dark about any potential security breaches of their private data. ... 

DOL, HHS and Treasury Department Proposed Regs: Amendments to Excepted Benefits (Dental, and Vision under PPACA)

The full release is 43 pages, here is an excerpt:
In response to [employer] concerns, and to level the playing field between insured and self- insured coverage, these proposed regulations would eliminate the requirement under the HIPAA regulations that participants pay an additional premium or contribution for limited-scope vision or dental benefits to qualify as benefits that are not an integral part of a plan (and therefore as excepted benefits). The Departments invite comments on this approach.... the Departments have developed these proposed regulations to treat certain wraparound coverage provided under a group health pl an as excepted benefits when it is offered to individuals who could receive such benefits through their group health plan if they could afford the premiums, but who do not enroll in the employer-sponsored plan because the premium is unaffordable under the law. As excepted benefits, the coverage would generally be exempt from the HIPAA and Affordable Care Act market reform requirements of ERISA, the PHS Act, and the Code. Wraparound coverage would only qualify as excepted benefits under limited circumstances ... these proposed regulations set forth criteria for an EAP to qualify as excepted benefits beginning in 2015. Under these proposed regulations, benefits provided under EAPs are excepted if four criteria are met.
Under HIPAA Regulations currently in effect, insured limited scope vision and dental plans are considered Excepted Benefits. However self-funded dental and vision plans must meet two additional requirements to be considered Excepted Benefits: 
  • Employee must elect the coverage separately from any medical plan; and, 
  • Employees must contribute toward the cost of coverage (i.e employee contribution requirements).
If these additional conditions are not met, then the plans would be subject to the Affordable Care Act (ACA). 
ACA Risks. For calendar year group health plans, the self-funded plan must include minimum essential benefits and meet other standards specified in IRC Section 9815 or be subject to a $100/day per participant penalty. Fiscal year health plans become subject to these rules on the first day of the 2014 plan year. 
The Requirements of IRC Section 9815. The rule will require ACA-compliant health plans to include, inter alia:
  • No lifetime or annual limits
  • Elimination of preexisting condition limitations (e.g. dental 5 year replacement rules; extraction in conjunction with remediation)
  • Coverage for preventive care services
  • Mandatory coverage for dependents
  • More elaborate claims appeals processes
  • Other patient protections
  • Coverage for clinical trials
  • No excessive waiting periods
  • Additional notice requirements
The Proposed Ruling
  • Effective Date. The proposed relief for self-funded dental and vision plans (as well as Employee Assistance Plans (EAPs)) will become effective as of January 1, 2015. However, the Agencies will consider limited scope dental and visions plans, as well as EAPs, as meeting the conditions of these proposed regulations through 2014 or later, pending the release of final regulations. In the event the final regulations are more restrictive than these proposed regulations, the final regulations will not become effective prior to January 1, 2015. In other words, these proposed regulations are in effect for 2014!
  • The Importance of These Regulations. Generally, employers now may adopt self-funded dental and vision plans without requiring employee contributions. It is our understanding, however, that employees still must be given the option to elect the coverage on a freestanding basis, separately from the election to participate in medical coverage. If the self-funded dental and medical coverage is offered on a combined basis, the dental or vision plan will become subject to ACA, including the preexisting condition limitations and elimination of annual or lifetime maximums. It’s worth noting that certain dental procedures are subject to preexisting condition limitations such as the five-year replacement rule and the one-tooth extraction requirements. ...  

Thursday, December 26, 2013

Obamacare's Never Ending Deadline Shifts - Christmas Edition

This is from Peter Landers at the Wall Street Journal

... As darkness fell on Christmas Eve, the federal HealthCare.gov site posted a further modification, saying people who "might have run into delays" and missed the deadline should contact a call center. "We still may be able to help you get covered as soon as January 1," it said.

A Department of Health and Human Services spokeswoman, Joanne Peters, said the call centers "are doing casework on an individual basis."

Many of the states running their own exchanges have announced similar delays. California set a new deadline of Friday at 8 p.m. local time for people who didn't finish filling out their applications, telling them to contact a call center. Massachusetts, Minnesota and Rhode Island said residents could sign up as late as New Year's Eve for coverage starting the next day. ...

40 Minutes of Walking Per Day Reduces Cardiovascular Risk by 20 Percent

This is from the DailyMail summarizing a study by researchers at University of Leicester who looked at 9,306 adults:
Taking just 2,000 extra steps a day could help people prone to heart attacks and stroke cut their risk by eight per cent, claim researchers.
The exercise is equivalent to walking 20 minutes a day at a moderate pace, says a study in The Lancet medical journal. ... 
But doing 4,000 extra steps - 40 minutes of additional daily walking - matches the benefits from taking a statin, says study leader Dr Thomas Yates, of the Diabetes Research Unit at Leicester University. 
He said ‘Doing 4,000 extra steps a day reduces your cardiovascular risk by about 16-20 per cent, which is the equivalent of taking a statin.
‘However, a statin has side effects and only reduces cholesterol, whereas walking has a much bigger range of health benefits.’...

Wednesday, December 25, 2013

Merry Christmas from the Oregon Exchange: Ya Know That Insurance You Thought You Had? Well Not So Much, Good Luck with That!

The state of Oregon is sending out some festive robo-calls this Christmas Season.  How fun would it be that get this call with one week to "look elsewhere?"  But don't worry. It will all work out fine when you and your sick child show up for urgent care.  This is from Oregon Live:
Oregon's troubled health insurance exchange began robocalling applicants Friday, warning them that if they don't receive enrollment confirmation by Monday, they should seek coverage elsewhere for Jan. 1. 
"If you haven't heard from us by Dec. 23, it is unlikely your application will be processed for Jan. 1 insurance coverage," a woman's voice on the pre-recorded call from Cover Oregon says. "If you want to be sure you have insurance coverage starting Jan. 1, you have other options." ... 
Cover Oregon spokesman Michael Cox said Friday he did not know how many recorded calls were being made. They targeted individuals whose eligibility for tax credits has not been determined, Cox said, including those with incorrect applications. ... 
The recorded call tells applicants that they can get coverage directly from an insurance company or through an agent. But they won't qualify for tax credits. Cox said he did not know if Cover Oregon would compensate individuals for tax credits or subsidies they lose in January because of the exchange's shortcomings. ...

'Obama' Rap Video Encourages Individuals To Sign Up For Health Care 'Cause It's Hot'

Merry Christmas!

Tuesday, December 24, 2013

The Procrastinator's Guide To Buying Obamacare and the 15th Unilateral Delay to the Law

This is from Megan McArdle at Bloomberg. The entire post is worth reading:
Today is the last day to sign up for Obamacare if you want your insurance to start on Jan. 1.
Just kidding! The Washington Post just reported that the administration has “quietly” delayed the sign-up date by another 24 hours. As someone I know drily noted, “I want coverage that starts January 1st, but at this rate, I think I'll just wait and sign up in June."  
Still, I imagine that some of you are planning to buy insurance via the exchanges today. If you’re planning to sign up, here are some things to remember: 
Bronze plans have subsidies; Catastrophic plans don’t. This is actually most of the difference between them, which is why Catastrophic plans seem to be, at best, only modestly cheaper. If your household income is under 300 percent to 400 percent of the federal poverty line, you may want the Bronze plan, even if you’re under 30, or had your insurance cancelled by Obamacare. 
People whose income is between 100 percent to 250 percent of the federal poverty line qualify for a special subsidy, but only for Silver plans. This subsidy limits your out-of-pocket expenditures if you buy a qualified Silver plan. If your income falls into this range, regardless of other situations, this is what you should buy. 
Pay attention to doctor networks, not just price. A lot of the new plans kept premiums low -- often at the behest of regulators -- by sharply limiting doctor networks. Yes, corporate health insurance does this too. But these networks seem to be quite narrow. Don’t just check to see that your kids’ pediatrician is covered; make sure that the area’s top hospitals are also included. The most important feature of insurance is not allowing you to prepay your doctor bills; it’s covering you in the event that something goes terribly wrong. And when your kid gets cancer, or your husband is horribly injured in a car wreck, you will want access to the top programs, not the underutilized community hospital that was willing to take the price your low-priced insurer offered. It is much better to pay extra for a good network than it is to pay extra for lower deductibles. 
Better check that prescription drug coverage, too. All Obamacare plans have to offer prescription drug coverage. But that doesn’t mean they have to cover the drugs you’re taking. If the drugs you take are generic, who cares? But if you’ve got AIDS or rheumatoid arthritis, you and your doctor are probably pretty specific about your regime. Make sure that you can stay on it with your new plan; don’t just assume it’s covered. 
The mandate penalty is not $95 unless you are really poor. The administration has been trying to soften the negative image of Obamacare by de-emphasizing the penalty. As a result, a lot of people think that the mandate penalty for the first year is only $95. It’s not; it’s $95 or 1 percent of income, whichever is greater, up to the cost of the cheapest health insurance plan you could have bought. I agree with Yuval Levin that a one-year delay of the entire mandate looks more likely by the day. But understand that if you do not buy insurance by March 31, you at least risk paying much more than $95. I won’t yell at you if you decide you’re better off not buying insurance. But it should be an informed decision. ... 

Must a Self-Funded Employer in California Offer Medical Coverage to Married Same-Sex Couples?

After the U.S. Supreme Court’s recent ruling last summer on Section 3 of the Defense of Marriage Act, I've received the above question numerous times.

Recall, that while PPACA mandates coverage for employees and those employees' children, it does not mandate you offer coverage to spouses. But that is probably a distinction with no practical difference as I have no clients excluding spouses from their benefit offering.  So in states that have legalized same-sex marriage, employers must offer coverage to same-sex spouses under insured contracts. That is an easy one as both insurance contracts and marriages are governed by state law.

However what about a self-funded medical plan that is governed under federal law - ERISA?

Here is the best practical advice I can give and it comes from Todd Solomon and Brian Tiemann of McDermott Will & Emery:
... Employers located in states where same-sex marriage is legal and with insured medical, dental or vision benefits must extend coverage to same-sex spouses. Some states where civil unions or domestic partnerships are legal also may require employers with insured medical, dental or vision plans to extend coverage to employees’ same-sex partners. Although employers with self-insured medical, dental or vision plans technically are not required to extend spousal benefit coverage to same-sex spouses regardless of the state in which the employer is located, employers that continue to provide coverage only to opposite-sex spouses face a significant risk of federal and state discrimination lawsuits if they do not cover same-sex spouses. ...
The underscoring is mine. 

Monday, December 23, 2013

Compliance Bulletin: FSAs, HSAs, and Same-Sex Spouses

BB&T Insurance Services, Inc.; McGriff, Seibels & Williams, Inc.; BB&T Insurance Services of California, Inc.; and Precept Insurance Solutions, LLC  

On December 16, 2013, the Internal Revenue Service (IRS) released Notice 2014-1 (Notice) addressing the impact of the Supreme Court's Windsor decision on the participation of same-sex spouses in cafeteria plans, FSAs, and HSAs.

The Notice generally allows employees to make mid-year changes to their cafeteria plan elections for 2013 in order to pay for health coverage for their same-sex spouses on a pre-tax basis (provided their employer's health plan extends coverage to same-sex spouses). Similarly, employers that extend health coverage to same-sex spouses through a cafeteria plan are required to treat that coverage on a pre-tax basis in the circumstances outlined in the Notice.

The Notice also clarifies that health FSAs may be used to reimburse expenses incurred by same-sex spouses, and that FSA and HSA limits applicable to married individuals will be applied to same-sex couples.

Note that employers that do not extend health coverage to same-sex spouses generally are not affected by the Notice. Also, the Notice applies to federal tax treatment, so employers will need to consult applicable state tax laws to determine if state taxes are treated the same way.

Linked below, you'll find a BB&T compliance update that details implementation steps for employers:

IRS Guidance on Cafeteria Plan Elections and Other Benefits for Same-Sex Spouses

Clearing the ‘Hardship’ Hurdle when FMLA and ADA Collide

The overlap of the FMLA and ADA has become a huge concern for employers. Reason: More employees are turning to the ADA to milk more job-protected leave out of their employers once their FMLA leave expires.

Once employees exhaust their FMLA leave, they can still request an accommodation of more leave under the ADA, if: 
  • they have an ADA-covered disability (which, thanks to the ADAAA, could be nearly any ailment diagnosed by a physician), and 
  • the time off helps them get back to performing the essential functions of their jobs. 
One way employers can get out of having to provide employees with additional medical leave under the ADA is to prove that providing an accommodation — whether it be more leave or some form of on-the-job-assistance — would create an “undue hardship” for their organizations. 
A big hurdle on that route, however, is that courts are placing the burden on employers to prove than an undue hardship exists — rather than asking the employee to prove that their accommodation request doesn’t present a hardship. 
Complicating the matter even further: There’s no set of standards or guidelines for what constitutes an undue hardship for an employer.
But a recent case helps paint a picture of what you can do to prove an undue hardship exists. 
Focus on co-worker impact 
After returning from 12 weeks of FMLA leave for knee-replacement surgery, a nurse employed by a senior living facility provided a note from her doctor stating she couldn’t kneel, squat or lift more than 50 lbs. She requested an additional six weeks of leave or other accommodations that would allow her to return to work. 
Her employer denied her request and terminated her. So she sued under the ADA. 
In getting the court to rule in its favor, the senior living facility successfully convinced the court that her requests under the ADA presented an undue hardship. 
For starters, the facility showed that lifting more than 50 lbs was an essential part of her job (her job description actually required her to lift at least 100 lbs), and an inability to perform that duty could be potentially dire to the patients she treated. She occasionally had to lift patients who’d fallen down. 
Secondly, it showed that granting her additional medical leave would also present an undue hardship, because in her absence under the FMLA, the facility had already spent $8,000 to add staff via a temporary overnight nurse to fill her position. 
And, in what seems to be the pivotal argument in this case, the facility explained that the modifications to its patient care procedures — which would result from the nurse’s continued absence — would put additional strain on her co-workers, thus hindering them from performing their duties and creating an unacceptable level of care.
That is a particularly compelling argument other employers should take to heart for this reason: The purpose of the ADA is to protect employees, and courts tend to enforce the law through that lens. So by convincing the court that granting the nurse additional leave under the ADA would essentially harm other employees, the senior living facility was able to show that enforcing the law would actually result in the opposite of its intended effect. 
Bottom line: If you believe an accommodation request would create an undue hardship, the best way of proving that point may be to show that the request would result in strenuous additional duties for other workers. 
Cite: Attiogbe-Tay v. Southeast Rolling Hills LLC 
This post originally ran on our sister website, HRBenefitsAlert.com.  

Sunday, December 22, 2013

Covered California Admits ‘Mistake’ That Made It Look More Successful Than It Was

These numbers make much more sense. But rest assured, everything will be fine when your sick child shows up at the doctor's office.

Published by Chris Reed at CalWatchDog:
Covered_CaliforniaSo Covered California has admitted a mistake in its initial description of signups for California’s version of Obamacare, and it was that fake description that led to stories across the nation about Obamacare getting off to a great start in California. If you’re not cynical about this, you should get professional help. KPCC, the Pasadena-based NPR radio station, has the details:
Covered California said Monday that two of the numbers it had released regarding October health insurance enrollment were wrong. The agency said it had mistakenly transposed the numbers in two categories: the people who bought plans with federal subsidies, and those who bought unsubsidized policies. 
The corrected numbers for October are 25,978 individuals who enrolled with a federal subsidy, and 4,852 individuals who enrolled without a subsidy. 
KPCC raised questions about the numbers last Thursday after Covered California issued new data for combined enrollment in October and November. The numbers indicated that unsubsidized enrollment had gone from 84 percent of all enrollment in October to just 14 percent of the total for October and November combined.

So the state agency initially said there were five unsubsidized sign-ups for every subsidized sign-up — and more than a month later, after the initial round of good reviews is in, it says, “Oh, wait a minute — it’s the other way around.” Five subsidized sign-ups for every unsubsidized sign-up is not impressive at all.

The tiny numbers of unsubsidized sign-ups makes it very likely that come Jan. 1, more people in California will have had their health insurance cancelled because of Obamacare than have signed up for Obamacare. The subsidized people are easy to attract, relatively speaking — not the unsubsidized people.

Not first time Covered California put out deceptive numbers

The explanation for this self-serving supposed screw-up?
A spokesman had initially insisted the numbers were correct, and that the huge fluctuation was due to such things as cancellations, duplicate records and changes in eligibility. Covered California now says it discovered the error after further review of its data. 
‘It was an unfortunate error, and we apologize for any confusion,’ said Covered California Communications Director Oscar Hidalgo. 
The corrected data confirm that the number of people buying unsubsidized plans has been a small part of the overall enrollment picture since Covered California opened for business on Oct. 1.
Covered California’s dishonest streak has been evident from its very first press releases, which depicted its rates as cheaper than policies available to most Californians. They may have been cheaper than alleged experts “expected.” But that is not remotely the same thing as cheaper than the alternatives they were replacing.

So count me as completely unsurprised that a “mistake” was made on reporting of enrollment figures that made Covered California seem as if it was off to a better start than it actually was.

Saturday, December 21, 2013

MSNBC's Melissa Harris-Perry Used Term "Obamacare" Two Weeks Before Condemning It As Racist

Wow.  It looks like she changed her position on that word pretty quickly!  

Utah May Substitute Private Insurance for Medicaid Expansion

This is a better solution to reform our healthcare and get more people insured. This is from Kirsten Stewart at The Salt Lake Tribune

... A Legislative Health Reform Task Force on Thursday revisited, tweaked and approved [Medicaid] expansion scenarios for recommendation to the full Legislature. ...

Two plans are being pitched. Both would allow the state to cover the same number of Utahns who would have been eligible for Medicaid under a full expansion — 111,000 adults earning up to 138 percent of the poverty level, or $32,000 for a family of four — without growing the government program.

They also would strengthen the private insurance market and eliminate the risk of "crowd-out," or privately insured low-wage workers migrating to Medicaid, said the task force chairman, Rep. Jim Dunnigan, R-Taylorsville.

• One option would be to use public dollars to buy private insurance for residents with incomes under the federal poverty level. Those earning at least the poverty level or up to 138 percent of that amount would shop with federal subsidies on the federal health exchange, www.HealthCare.gov.

• Another would be to use public dollars to buy private insurance for the full expansion population, those earning up to 138 percent of poverty.

... Utah Republican Gov. Gary Herbert isn’t expected to make a decision about expanding Medicaid until January, a call that must be approved by the Legislature. Any bill passed by lawmakers likely wouldn’t take effect until May, and then there’s the matter of securing federal approval. ...

In states that opt for full expansion, the federal government has agreed to pay 100 percent of those costs through 2017, and thereafter declining amounts but no less than 90 percent.

The U.S. Centers for Medicare and Medicaid (CMS) had previously said anything short of a full expansion would be funded at Utah’s current 70/30 split, with the feds picking up 70 percent of the costs.

This risked Utah losing hundreds of millions in federal funding.

But CMS has subsequently backed off, approving privatized Medicaid plans first pitched by Arkansas, and more recently, Iowa.

There are many unanswered questions, such as whether commercial health plans on the exchange have different coverage and cost-sharing than Medi­caid. Additionally, Utah wants to also allow low-income residents to put subsidies toward the purchase of employer-based coverage, which hasn’t been proposed by any other state. ... 

Friday, December 20, 2013

Obamacare Now Serves as the 'Hardship' Exempting a Person from Having to Comply with Obamacare

Yes, you read that headline correctly.  PPACA's minimum benefit requirements forced five to six million private health insurance policies, covering as many as ten to twelve million people to be cancelled because they do not meet all of the minimum standards prescribed by Obamacare.  

But now, because the PPACA Exchange websites were not working and are riddled with security leaks and because insurers and states have not all been able to reverse course on a dime and "de-ungrandfather" all of those millions of policies that PPACA mandated they cancel we have the 14th different ad hock, unilateral amendment to the President's Health Law.  

In a December 19 regulatory pronouncement by blogpost Health and Human Services (HHS)  has changed the rules in a comedically delightful way. 

Obamacare can now serve as the 'hardship' that exempts a person from having to comply with Obamacare.  Ponder that one for a few moments as you enjoy a cup of spiced eggnog this Christmas Season.  

If you believe [ah yes, you have to love those purely subjective legal standards such as one's own belief or feeeeeeeling] that the plan options available in the Marketplace in your area are more expensive than your cancelled health insurance policy, you will be eligible for catastrophic coverage. ... 
Oh I believe. Yes I believe!  Obamacare's rollout obliterates the rule of law.  The absurd supplanted the unlawful in November and now the Christmas Season brings us to a numb state of utter disbelief with nutmegy and pepperminty tinge of hilarity. 

The Latest Executive Degree Means

In short, if you are one of the five to six million policy holders (covering as many as ten to twelve million people) who have lost a plan and you feel that the standard Obamacare plan in your area is unaffordable you can now quality for a catastrophic (cheaper) plan even if you are over 30 years old.  By law, these plans are only available people under the age of 30; but who in the executive branch still holds to the antiquated notion of 'rule of law' anyway? When remaking one-sixth of the U.S. economy, the illuminati certainly need leeway to pronounce new laws as they see fit.  

This causes mass confusion and another administrative debacle two business days before individuals were to secure their 2014 Exchange coverage.  It also wreaks of desperation. 

As you can imagine, insurers are not feeling festive over the President's latest holiday game-changer.  These ten to twelve million people were underwritten to pay higher premiums for Exchange insurers to cover the higher cost patients rolling on in 2014 with no pre-existing condition limitations.  Instead, more young and healthy will be exempted or shuffled over to the catastrophic plans worsening the risk pool in the Exchanges.  

We discussed this on the air back in July.  The Individual Mandate is too unpopular for any one political party to own.  With this latest exemption we are now up to twenty-two different ways for a person to exempt themselves from that mandate.  Back in June before these latest exemptions were created magically out of thin air the Congressional Budget Office stated that only two percent of Americans would ever actually pay the Individual Mandate.  With the last couple additions to that exemption list, we are well under one-percent of Americans who will ever pay it. 

In fact, the White House won't say whether anyone will have to pay the Individual Mandate in 2014.  This is from Daniel Halper at the Weekly Standard:   

"Is there going to be a single person in 2014 that's going to pay the penalty? A single uninsured American that is going to end up paying the penalty in 2014 at this point?," asked MSNBC host Chuck Todd. 
"Chuck, I can't talk to you about how many people are going to be subject to the penalty," said White House deputy senior advisor David Simas, sidestepping the question. "I can say that in Massachusetts, you saw a rapid decrease in the number of uninsured because when they had choices, people signed up. And that's what we're seeing today."
Had the administration listened to our projections on the Armstrong and Getty Show in July when we noted that the Individual Mandate was functionally dead it would be better off because it would have buried the individual mandate permanently instead of this never-ending barrage of exceptions and exemptions. They are putting band-aids on a broken arm and it will not work. 

This Action Raises a Number of Questions
  1. Why are people whose plans were canceled more deserving of help than people who couldn't afford a plan in the first place?  
  2. Why should people who lost their plan be the only ones with special permission to access a catastrophic plan (or what was called a substandard plan two days ago)?
  3. Wouldn't it have just been easier to refrain from meddling in individual's choices in the first place?  I know, silly notion. And, 
  4. Why exactly did the Administration spend millions of dollars and thousands of hours litigating the legality of the Individual Mandate all the way up to the Supreme Court just so they could systematically gut it to a point where it will apply to less than 1% of Americans?
Put simply, ten million Americans were forced off of the health plans they liked and chose because the government deemed those plans 'substandard' for the poor Subjects who just did not know any better.  But the Ruling Class was unable to set up and deliver the plans they deemed the Subjects should have.  So now the Ruling Class is granting permission to the Subjects to go ahead and buy those substandard plans again.  Meanwhile, the best projections have ten million people losing care in 2014 while only about two million will gain it under the Rube Goldberg Machine of Obamacare.

Other Coverage and Resources  
  • You can read HHS Secretary Kathleen Sebelius' full letter to the Senate on this decision here. HHS's formal guidance is here.
  • Utter Chaos: White House Exempts Millions From Obamacare's Insurance Mandate, 'Unaffordable' Exchanges - Forbes.  It’s hard to come up with new ways to describe the Obama administration’s improvisational approach to the Affordable Care Act’s troubled health insurance exchanges. But last night, the White House made its most consequential announcement yet. The administration will grant a “hardship exemption” from the law’s individual mandate, requiring the purchase of health insurance, to anyone who has had their prior coverage canceled and who “believes” that Obamacare’s offerings “are unaffordable.” These exemptions will substantially alter the architecture of the law’s insurance marketplaces. Insurers are at their wits’ end, trying to make sense of what to do next. ...
  • The Weekly Standard, Dec. 20: - At this point, after months of on-the-fly pronouncements, delays, and exemptions (often announced, not coincidentally, in the days just before a major national holiday), perhaps nothing should surprise us anymore about Obamacare’s disastrous rollout. But yesterday’s announcement is still startling because of what it says about the state of the president’s signature domestic legislation. The law is falling apart before our eyes. ...
  • Who Says Obama Hasn’t United the Country? National Review - Yesterday the Obama administration suddenly moved to allow hundreds of thousands of people who’ve lost their insurance due to Obamacare to sign up for bare-bone “catastrophic” plans. It’s at least the 14th unilateral change to Obamacare that’s been made without consulting Congress. ...
  • Douglas Holtz-Eakin: ... I am no fan of this administration, so I say this carefully and with forethought: this is a disgraceful move. It was done effectively on Friday before the holiday (a far-too-familiar tactic for followers of the Administration). Nobody — not the president, not Sebelius, not even a press flack — took responsibility and faced the American people. Instead, it was done via a letter and leaked blog post. And it is a mere 4 days before people were supposed to be obligated to be insured. Shameful. Period. ...

  • Megan McArdle at Bloomberg: ... The White House is focused on winning the news cycle, day by day, not the kind of detached technocratic policymaking that they, and the law’s other supporters, hoped this law would embody. Does your fix create problems later, cause costs to spiral or people to drop out of the insurance market, or lead to political pressure to expand the fixes in ways that critically undermine the law? Well, that’s preferable to sudden death right now. ...

Final Regulations Issued under the Mental Health Parity and Addiction Equity Act of 2008

This is from Alden Bianchi at Mintz Levin:
On November 13, 2013, the Departments of the Treasury, Labor and Health and Human Services (the “Departments”) issued final regulations under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). MHPAEA expanded previous federal mental health parity requirements to require that the conditions of coverage for behavioral health, in terms of the limitations placed on treatment and cost-sharing requirements, be no more restrictive than for coverage of medical and surgical benefits. The final regulations, which take effect for plan years commencing on and after January 1, 2014, impose standards for mental health or substance use disorder (MH/SUD) benefits that will affect most group health plans and health insurance issuers in the group insurance market and — as a result of the Patient Protection and Affordable Care Act (the “Affordable Care Act”) — qualified health plans (i.e., plans designated as “bronze,” “silver,” “gold,” and “platinum” marketed through public insurance exchanges), Medicaid non-managed care benchmark and benchmark-equivalent plans, and plans offered in the individual insurance market.
The Mental Health Parity Act of 1996 (MHPA) required generally that group health plan annual or lifetime dollar limits on mental health benefits be no less restrictive than annual or lifetime dollar limits that applied to medical and surgical benefits. The goals and scope of MHPA were modest: it addressed only annual or lifetime dollar limits on mental health benefits. Cost sharing was unaffected. Thus, plans could require higher co-pays, deductibles, and out-of-pocket maximums on mental health benefits. MHPA did not mandate the coverage of substance abuse disorders, and plans and issuers were generally free to impose maximum numbers of provider visits and/or caps on the number of mental health treatment days. Nor did MHPA apply to group health plans or coverage offered by employers with fewer than 50 employees or in cases where its application resulted in an increase in the cost under the plan or coverage of at least one percent. ... 
Parity for financial requirements and treatment limitations 
The basic parity rule for financial requirements and treatment limitations provides as follows:
A group health plan (or health insurance coverage offered by an issuer in connection with a group health plan) that provides both medical/surgical benefits and mental health or substance use disorder benefits may not apply any “financial requirement” or “treatment limitation” to mental health or substance use disorder benefits in any “classification” that is more restrictive than the “predominant financial requirement” or “treatment limitation” of that type applied to “substantially all” medical/surgical benefits in the same classification. 
The term “medical/surgical benefits” means benefits for medical or surgical services, as defined under the terms of the plan and in accordance with applicable federal and state law, but it does not include mental health or substance use disorder benefits. The terms “mental health benefits” and “substance use disorder benefits” mean benefits with respect to services for mental health conditions or substance use disorders, respectively, also as defined under the terms of the plan and in accordance with applicable federal and state law. In each case, whether they cover medical/surgical services or services for mental health conditions or substance use disorders, the benefits must be consistent with generally recognized standards of current medical practice. ...

MHPAEA requirements do not apply to non-federal governmental plans that have 100 or fewer employees or employers with 50 or fewer employees. The Affordable Care Act extends MHPAEA’s requirements to the small group and individual market. Qualified Health Plans offered through the public insurance exchanges must include coverage for mental health and substance use disorders as one of the ten categories of essential health benefits. For MHPAEA purposes, a small group is defined as an employment-based plan that includes no more than 50 employees. Under the Affordable Care Act, however, beginning in 2016, small group plans will mean plans maintained by an employer with fewer than 100 employees on average business days in the prior calendar year. Following precedent established by a 2010 FAQ, the final regulations treat group health plans of employers with 50 or fewer employees as exempt from the MHPAEA.

MHPAEA requirements also do not apply to retiree-only plans, TriCare, Medicare, and traditional Medicaid (fee-for-service, non-managed care). Prior to the Affordable Care Act, self-funded non-federal governmental employers were permitted to opt-out of the requirements of MHPAEA. The Affordable Care Act eliminated this election. Thus, after January 1, 2014, non-federal governmental employers are subject to the requirements of MHPAEA.

Large groups may qualify for an exemption from MHPAEA based on increased cost. Where the cost to a large group health plan sponsor of complying with MHPAEA results in an increased cost of at least two percent in the first year that MHPAEA applies to the plan (i.e., the first plan year beginning after October 3, 2009) or at least one percent in any subsequent plan year, the sponsor may apply for a one-year exemption from MHPAEA based on increased cost. Where the increased cost thresholds are exceeded and the application is approved, the plan is exempt from MHPAEA requirements for the plan year following the year the cost was incurred. Plan sponsors that qualify for the increased cost exemption must notify plan participants and beneficiaries that MHPAEA does not apply to their coverage. Once the exemption expires, the plan may reapply if the plan incurs an increased cost of at least one percent in a subsequent plan year. ...

An Overview of Medicaid and PPACA's Changes to It

Medicaid was considered an afterthought to Medicare, but today more Americans receive health care coverage from Medicaid than from any other program, say Jason Fichtner and John Pulito of the Mercatus Center.

  • State Medicaid participation is technically voluntary, but all states participate, with federal and state governments sharing the costs of the program.
  • Eligibility for the program varies state to state, but participants cannot have income that exceeds a certain percentage of the Federal Poverty Level (today, that number ranges from $11,490 for a single person to $39,630 for a family of eight).

The Affordable Care Act originally mandated that states expand Medicaid, but after the Supreme Court's 2012 ruling, states now have the choice to decide whether to expand eligibility for the program.

  • While the federal government is covering a significant amount of Medicaid expenses, state budgets are still affected.
  • In 1967, when Medicaid started, it represented less than 3 percent of state budgets. Today, that number is at 24 percent and is likely to rise.
  • According to the Centers for Medicare and Medicaid Services, annual Medicaid expenditures are expected to increase by $500 billion between 2012 and 2021. That is a 108 percent increase.

If Medicaid spending continues on this trajectory -- even without state eligibility expansion -- the program is going to require increased state and federal resources.

Source: Jason J. Fichtner and John Pulito, "Medicaid Overview," Mercatus Center, December 11, 2013.  Summarized by the National Center for Policy Analysis   

Thursday, December 19, 2013

The PPACA Exchanges' Demographic Nightmare

This is from Dr. John Goodman citing the New York Times:
The Obama administration hopes that 40% of enrollees in the new health care exchanges will be between the ages of 18 and 34. The worst outcome would be 40% enrollment of older people (age 55 to 64). According to The New York Times, that unfortunate outcome is occurring in many states. Here are the counts in states reporting so far:
  • The ratio of older enrollees to younger ones is 2 to 1 in Colorado, Connecticut, Rhode Island, Washington, and Minnesota. 
  • The ratio of old to young is 1½ to 1 in California and Kentucky. 
  • Only in Maryland and Massachusetts do the number of young exceed the number of older enrollees.
The ratio of 2 older enrollees for 1 younger one does not give the real flavor of the age skew in Colorado, where as of November 30, 43 percent of enrollees were over age 55, and 61 percent were over age 45. Just 17 percent are aged 18 to 34. 
No one knows the health status of exchange enrollees. Connect for Health Colorado, one of the more successful state exchanges, says that 15,074 people had enrolled as of December 9. The problem is that this is only 177 more Coloradans than were enrolled in the state and federal plans for the uninsurable, plans that are ending soon.

Massive Savings Available with Medical Tourism

When HSM Solutions, a Hickory, N.C.-based furniture manufacturer, first gave its employees the option of going overseas for medical care, many balked. 
“They looked at us like we were monsters,” said Tim Isenhower, director of benefits, describing the reaction he received six years ago when he traveled around the country to introduce the concept of medical tourism to the midsize company's 2,500 U.S.-based employees.  
Medical tourism involves patients traveling from highly developed nations to other areas of the world for medical care, usually to find treatment at a lower cost. Among the more popular destinations are India, Mexico and Costa Rica. 
As an incentive, HSM offered to waive copays and deductibles, cover the cost of travel for the employee and a companion, and even pay a bonus of 20% of the savings the company would experience, up to a cap of $20,000, he said. 
“We have about 50 locations. At the last meeting, one of the employees said he would go. So I went with him” to India, as a show of good faith on behalf of HSM, Mr. Isenhower said. 
Since that pioneering first trip abroad, approximately 250 HSM employees and dependents have taken advantage of this employee benefit, which is becoming an increasingly popular option for many self-insured employers struggling with the high cost of health care. 
Mr. Isenhower estimates the company has saved $9.5 million in health care costs over a six-year period, and that some of those savings are starting to accrue in the HSM's workers compensation program. 
“We had a lot of back injuries, and those employees didn't want to get fused anymore,” which is the typical treatment for disk injuries in the United States, he said. 
By contrast, doctors in India perform disk replacement surgery, which preserves patient mobility, he said. 
In the United States, “such a surgery would cost $300,000 to $400,000,” Mr. Isenhower estimated. “I'm paying $38,000,” which includes the cost of a $5,000 airline ticket. 
Because HSM's medical tourism benefit has been so successful, the employer has expanded it to include bariatric surgery, knee and hip replacements, and hernia operations. More recently, HSM employees began going closer to home — Costa Rica — for knee and shoulder endoscopy procedures, Mr. Isenhower said. Such procedures are significantly less expensive than most of the other types of surgical procedures HSM has outsourced to India, but the cost of travel is significantly less, making it cost-effective nonetheless, he said. 
“A plane ticket to Costa Rica is only $500,” he said. 
The Deloitte Center for Health Solutions estimated that approximately 1.6 million U.S. residents traveled outside the country for medical care in 2012, with an anticipated annual growth rate of 35%.... 
What also makes medical tourism attractive is that the hospitals that offer it bundle charges into a single bill that in many cases also includes travel expenses, unlike most U.S. hospitals, said Alex Odell, president of Medical Blossoms, a Mount Vernon, Wash.-based medical tourism facilitator. 
Such facilitators contract with medical facilities worldwide that are accredited by the Joint Commission International to participate in networks not unlike preferred provider networks in the United States, said Kevin Rude, CEO of Medical Treatments Management Inc., another facilitator based in Walnut, Calif., whose network includes 250 hospitals in 40 countries. 
To protect against the possibility of complications after a procedure, most medical tourism facilitators recommend that patients purchase “surgery complication insurance,” which pays for any subsequent medical care that might be required, said Kelly Jenkins, CEO of 360 Global Health, a Los Angeles-based facilitator.
“But I've never had anyone make a claim,” she said. 
Ms. Jenkins, who recently traveled to Puerto Vallarta, Mexico, for her own arthroscopic knee surgery, said medical tourism offers self-insured employers several advantages. 
“First off, it saves self-insured employers a lot of money,” she said. For example, her own procedure, which cost $5,800 including travel expenses, would average $14,000 in the United States for the procedure alone. Savings are even greater for hip replacements, which average about $60,000 in the United States compared with $15,000 in Mexico or as low as $8,000 in India....

Wednesday, December 18, 2013

HSA Update for 2014

This is from Ann Carrns at the New York Times, hat tip to Dr. John Goodman:
... There are now about nine million H.S.A.’s with total assets of more than $18 billion; the average account balance is about $2,000, but accounts with funds in investment options, rather than just F.D.I.C.-insured accounts, average about $10,000, according to Devenir, which is based in Minneapolis and provides investment plans for H.S.A.’s. For 2014, you can contribute as much as $3,300 as an individual and $6,550 for families. ...

[A] new website, www.hsasearch.com ... lists 31 providers, along with information on fees, interest rates, minimum balance requirements and availability of investment options; it’s expected to cover about 50 accounts by the end of the year, said Eric Remjeske, Devenir’s president. The site provides links to the providers’ websites and includes some ratings from a pool of “several hundred” early users who were asked to comment on their experience....

Exercise as Good as Drugs in Fight Against Disease

Exercise 'just as potent' as drugs against many major diseases

... A study of more than 300 trials has found that physical activity was better than medication in helping patients recovering from strokes - and just as good as drugs in protecting against diabetes and in stopping heart disease worsening.

The research, published in the British Medical Journal, analysed data about studies on 340,000 patients diagnosed with one of four diseases: heart disease, chronic heart failure, stroke or diabetes. ...

The landmark research compared the mortality rates of those prescribed medication for common serious health conditions, with those who were instead enrolled on exercise programmes.

Most of the 305 studies examined involved patients had been given drugs to treat their condition. But 57 of the trials - involving 15,000 volunteers - examined the impact of exercise as a treatment.

The research found that while medication worked best for those who had suffered heart failure, in all the other groups of patients, exercise was at least as effective as the drugs which are normally prescribed.

People with heart disease who exercised but did not use commonly prescribed medications, including statins, and drugs given to reduce blood clots had the same risk of dying as patients taking the medication.

Similarly, people with borderline diabetes who exercised had the same survival chances as those taking the most commonly prescribed drugs.

Drugs compared with exercise included statins, which are given to around five million patients suffering from heart disease, or an increased risk of the condition.

The study was carried out by researcher Huseyin Naci of LSE Health, London School of Economics and Political Science and Harvard Medical School, with US colleagues at Stanford University School of Medicine.

He said prescription drug rates are soaring but activity levels are falling, with only 14 per cent of British adults exercising regularly. ...