Thursday, November 6, 2014

We've Had 3 Obamacare Changes in 7 Days: And I Predict a Fourth Tomorrow

*** Updated - November 17th.  My prediction in point 4 below was off by a week.  I'm going to need to take in my crystal ball for a tune up.  On Sunday, November 16th, because they know everybody is checking their website on a Sunday, CMS postponed the filing deadline for the Transitional Reinsurance Fee by simply stating:
We have received requests for an extension of the deadline for contributing entities to submit their 2014 enrollment counts for the transitional reinsurance program contributions under 45 CFR 153.405(b).  The deadline has now been extended until 11:59 p.m. on December 5, 2014.  The January 15, 2015 and November 15, 2015 payment deadlines remain the same. 

1) On Friday, Halloween Afternoon: the federal government suspended the Health Plan Identifier registration requirement for large employer plans as their instructions, links and website befuddled the sharpest business people who tried to simply register for something that should have been no more difficult than getting an employer ID number.

2)  On Election Day: The IRS reversed course on an Obamacare plan calculator that the federal government created in order to help employers. After a full year of employers relying on a flawed government creation ("flawed government creation" - I repeat myself) which permitted PPACA-compliant health plans with no hospital benefit, the IRS basically said, Oops, our bad. That wasn't right. We are going to change that in 2015 so please stop using the tools we give you.  

3) Today, the IRS, HHS and DOL issued a joint FAQ on PPACA and made up a new form of discrimination. Discrimination by giving the person a choice of extra money. Sounds horrible, doesn't it? PPACA does not contain an anti-dumping provision like Medicare does. This means that it is not expressly illegal for employers to entice high-claims individuals off of their employer-plan with an extra cash offer not made to other plan enrollees. Existing law makes it clear that one may not discriminate against a person based on medical conditions, but employers are generally allowed to discriminate in favor of sick participants with better offers of coverage. 
  • This has horrified the Administration for policy reasons. Once we get all of the sickest enrollees onto PPACA Exchange plans these Exchanges are going to start to look a whole lot more like "high risk pools." And there will be no way to sustain that after the Three-Rs risk transfer (insurer bailout) provisions expire in 2017. So, with a pen and a phone the Administration sent three federal bureaucracies out today to claim that when you give a sick person an extra option of cash that nobody else has, you are in effect, discriminating in a harmful way against that sick person. 
    • Example: Imagine offering a slice of pepperoni pizza to a class full of third graders for $1 per piece.  And then singling out one child who is generally hungrier than the rest and offering that child the same $1 per slice as everyone else, or, a gift of $500.  That one lucky child can choose to pay a dollar for a slice or to receive a gift of $500 with which he can buy as much pizza as he can eat.  Our federal government is arguing that this is unlawful and harmful discrimination against this child because if the child elects to pay his dollar for a slice of pizza, the poor little fellow would have to forgo the $500 offered to him instead of pizza.  Hence, the IRS, HHS and DOL conclude, this slice of pizza actually costs the child $501.  Only in the land of federal bureaucracy can you come to such a tortured conclusion. 
  • I understand why the Administration wants to end this practice for macroeconomic reasons. But, by trying to fix this policy problem with a trumped up claim of discrimination-by-gift, they are trying to fix a broken arm with a hammer. 
4)  My Prediction for Tomorrow: The government will suspend the Transitional Reinsurance Fee Registration Requirement. Large self-funded plans have to report the average number of members enrolled on their plans during the past year to the government by Nov. 15th. Once again, the government's numerous and recently changed reporting and calculation requirements for "average enrollment" has caused mass confusion and wasted thousands of man-hours, nationwide. If it goes ahead as planned it will be another disjointed mess.