Delaying the Employer Mandate Has Minimal Impact on ACA

Much has been said about the employer mandate over the past few weeks.  It’s been in the news a lot because of the delay of its implementation to 2015, and it’s been a popular for politicians – who are opposed to the ACA – to take the position that the obvious next course of action should be a similar delay of the individual mandate.  I’ve explained why that doesn’t make sense – just because they’re both referred to as a mandate doesn’t make them comparable elements of the ACA.  The employer mandate will help to provide the ACA with financial strength, but the individual health insurance mandate is a much more crucial leg of the legislation – without it, other aspects of the law (like guaranteed issue coverage in the individual market) would topple.

 So what is the employer mandate and what does it involve?  Rather than relying on articles and talking points that can be easily biased for or against the ACA, let’s take a look at what’s actually written in the legislation.  The ACA is a very long document, so here are the three pages that ACA Employer Mandate Delay has minimal impactcontain the wording about the employer shared responsibility for health coverage.  And since the ACA wording is rather convoluted and full of legalese, here’s an excellent summary from Cigna that explains it in more clear language.
As I explained in a post last week, the employer mandate will impact a very small percentage of businesses in the US.  That’s because 96% of businesses with 50 or more employees already offer health insurance.  And businesses with fewer than 50 employees aren’t required to offer health insurance under the employer mandate.  The vast majority of companies in the US have fewer than 50 employees.  Out of the roughly 5.9 million US firms that have employees, only 635,162 have 20 or more employees (many of these – the ones that have more than 20 employees but fewer than 50 – are not impacted by the employer mandate).  So for most American companies, the employer mandate is a non-issue (on the other hand, the ACA-created tax credits that help small businesses pay for health insurance should be of interest to a lot of those small business owners who are not required to provide health insurance but might want to anyway).
So the employer mandate really only becomes an issue for large employers who are not already offering health insurance to their employees.  But what does it mean?  What exactly do they have to provide in order to avoid a penalty?  And how much is the penalty?  Here are the highlights:
  • The employer shared responsibility mandate applies to employers with 50 or more full time or full time equivalent employees.  “Full time equivalent” applies when a business has part time employees:  The total amount of hours worked per month by all of the part-time employees is added up and then divided by 120 to get the number of “full time equivalent” workers.  So if you have 100 workers who each work 80 hours per month, you have 67 full-time equivalent workers (8000/120).
  • The requirement to offer coverage applies to all full-time workers, which is defined as 30 or more hours per week.
  • The coverage has to cover at least 60% of total allowed costs, which is comparable to the bronze level of coverage in the individual market.
  • The coverage has to be “affordable”, which means that the employee contribution cannot be more than 9.5% of the employee’s wages.
  • Coverage has to be offered for the employee and any dependent children up to age 26, with total employee contributions not exceeding 9.5% of the employee’s wages (employees are not required to keep their children on their policies until age 26, but they have to be given the option to do so if they want).
  • Employers are not required to pay for coverage for a spouse.  Employees can choose to add their spouse to their plan if they want (this is no different from the way employer coverage currently works), but the employee is not required to contribute financially towards the spouse’s premium.
  • If a large employer does not offer 60%+ actuarial value, “affordable” health insurance to eligible workers and at least one worker ends up getting individual health insurance through a state exchange and getting premium subsidies or a cost-sharing reduction on their policy, the penalty will be applied to the business.
  • The details of the penalty assessment are explained on the first page here, but they’re much more clearly illustrated in the example that Cigna put together (see page 3). The amount of the penalty depends on whether the employer isn’t offering coverage at all, or if they’re offering coverage that isn’t up to the minimum standards and/or affordability requirements.  For the purpose of penalty calculation, the first 30 employees are subtracted from the equation (so if you have 150 employees, the penalty is calculated based on 120 instead).

I’ve heard some people say that the employer mandate requires employers to pick up the entire tab for employees’ health insurance, and this is incorrect.  I’ve also heard […]

A Midsummer Wonk’s Dream

Welcome to the Midsummer Health Wonk Review!  It’s always a pleasure to host, and this edition actually isn’t a Shakespeare theme, but it is jam-packed with excellent articles from some of the best writers in the healthcare blog world.  The HWR had a break before this edition and will have a hiatus after this one too. We’re starting things off with a few articles that help to shed light on some aspects of health care reform that should be straight-forward but sometimes get a bit convoluted with political rhetoric.  Then we’ve got several posts about corruption in healthcare and healthcare policy, and lots of posts that provide contrasting and well-reasoned viewpoints on healthcare reform and healthcare in general.  We’ll keep things cool with some winter and spring pictures we took around us here in Northern Colorado.  Enjoy!

Colorado mountains near Fort CollinsIn an excellent piece debunking popular “wisdom” regarding immigrants and healthcare, Joe Paduda of Managed Care Matters explains that when it comes to the Medicare Trust Fund, immigrants put in a lot more than they take out:  In 2009, immigrants paid in 14.7% of trust fund contributions but only accounted for 7.9% of its spending, with a net surplus of almost $14 billion.  US-born people accounted for a deficit of almost $31 billion in the Medicare Trust Fund that same year.  This appears to be a long-term trend:  From 2002 to 2009, immigrants contributed $115.2 billion more to the Medicare Trust Fund than they received in Medicare benefits.  Joe goes on to explain the details and warn those who rally behind strict immigration reform that they may want to rethink their position.  Our Medicare Trust Fund would be in a lot worse shape without the immigrant population.

And if you’re curious about the implementation track for the ACA (and understandably confused by the constant talk of repeal, delay, replace, etc. that we keep hearing from some politicians) Linda Bergthold has what I consider to be a straight-forward and factual review of the situation.  To sum it up, she’s predicting that the employer mandate will go into effect in 2015, as currently scheduled (following a one-year delay, but not a repeal), and that the individual mandate will be implemented in 2014, as planned.  And while some states that delayed the creation of an exchange marketplace will likely have a tougher time getting everything up and running by 2014, the exchanges will be operational next year.  I imagine there will be some bumps in the road as the ACA is fully implemented over the next few years.  But we can work on ironing those out as we go – there’s no need to start from scratch.

Although the exchanges are likely to be successful in the long run, it won’t be without significant effort on the part of the people running them.  At Health Affairs Blog, Barbara Markham Smith and Jack Meyer explain their recommendations for strategies that can help the exchanges be successful both out of the gates and for the long haul.  They discuss pricing (don’t make it too high!) as well as communication/advertising programs that need to be unified, clear, concise and nation-wide in order to generate awareness and interest in as many people as possible.  Baby pine tree in snow(Unfortunately, there’s a significant portion of the country’s leadership who seem to want the exchanges to fail – even to the detriment of the American people – and are content to spread mis-information about the entire law.  This is a considerable hurdle that the exchanges will have to overcome.)  Barbara and Jack recommend a temporary respite from the tax reconciliation that will be done to determine whether a person or family that received a subsidy is required to pay back a portion of it due to increased income compared with the prior year.  And they also call for fostering increased competition and CO-OP creation in the states have not yet done so.  All in all, pretty solid ideas for success in the exchanges and policy-makers would be wise to take heed.

I think of Dr. Roy Poses as the healthcare blog world whistleblower – he can always be counted on to expose nefarious acts in the healthcare industry, and Health Care Renewal is a must-read blog.  Here is his take on the recent Transparency International poll that found 43% of US respondents believe that the US healthcare system is corrupt, and that 64% believe that the government is run by big money and special interests.  Roy notes that unfortunately, most of the media coverage of the Transparency International poll has focused on world-wide data and/or specifics from far-away lands.  Instead of focusing on our own serious problems with corruption in healthcare, it seems that a lot of media outlets (keep in mind that media is sometimes beholden to special interests too…) prefer to present the problem as something that happens in other countries as opposed to something that we need to work on here in the US.

Continuing with the corruption theme, Eric Turkewitz of the NY Personal Injury Law Blog shares a multi-part series about Dr. Katz, who has been rebuked for lying on the stand in a personal injury trial that resulted in a mistrial because of the doctor’s actions.  Central to the issue is the practice of independent medical exams (with the word “independent” being very loosely used in this case) conducted by doctors who are hired by insurance companies when they are defending personal injury cases.  In the case that Eric is writing about, the doctor makes a 7 figure income creek in Fort Collins Coloradofrom his medical-legal practice, but in one case that has been made public, he grossly over-stated the amount of time he spent with a patient (he claimed it was 10 – 20 minutes, but a secretly-made video recording of the visit showed that it was under two minutes).  Eric has looked at additional data and found that the average length of Dr. Katz’s exams was around 4 minutes.  Additional details on this story are here.  Wow.  The doctor was obviously concerned first and foremost with money, but the insurance companies who hired him were likely not doing due diligence to make sure that he was providing accurate data.  They may have been more concerned with finding a doctor who would tell them what they wanted to hear rather than the actual details of the patients’ medical cases.  Sad all around, but sadder still is the fact that it’s probably not all that unusual.

And for a little more on the cronyism/corruption topic (maybe those corruption figures Roy mentioned from the Transparency International poll were skewed a bit too low?), Hank Stern of InsureBlog writes about agencies and individuals who have been involved with the Obama Administration for some time, and are now finding themselves in lucrative financial and/or influential positions as the ACA gets implemented.  In other words, business as usual in the government.  Government appointments, grants, etc. are often awarded this way (ie, appearing to be rewards for donations and/or loyalty), in every administration, regardless of which party is in power.  There’s ample room for opponents to cry foul, but it also has to be pointed out that presidents and secretaries and others in power have to be able to select people they trust for top leadership positions.  And trust is earned over time.  There’s a fine line between selecting the right candidate for the job, having that person be someone trusted by the top officials, and avoiding cronyism.  I don’t know what the right answer is, but it’s easy to see how the appointments and grants and leadership roles being handed out with the ACA could be construed as rewards for political support and loyalty.

At Health Beat, Maggie Mahar writes a thoughtful and thorough review of Miriam Zoll’s Cracked Open: Liberty, Fertility and the Pursuit of High Tech Babies.  After reading Maggie’s article, I’m eager to read the book itself (Maggie leaves a bit of a cliff hanger at the end…).  Assisted reproductive technology is certainly a blessing to many families.  But it can also be fraught with problems that stem from both overly-optimistic expectations on the part of patients (and society in general), over-promising on the part of providers, and a medical field that is largely unregulated and often not covered by health insurance policies.

At Health Business Blog, David Williams explains his skepticism about DealWell, a new Priceline-style website for healthcare services.  I am very much in favor of increasing transparency in healthcare pricing and moving away from the proprietary pricing system we have now, where even the most dedicated patient “shoppers” can find it impossible to obtain real healthcare prices before having a procedure.  And to that end, I love thePut a bird on it! idea of a website where people can bid on the care they need and providers can accept or decline the offer depending on their current workload and the payment offered.  But David makes some excellent points about the downsides:  not being integrated with health insurance is a big one, especially since nearly everyone will have to have health insurance starting in 2014 (even if a procedure is lower than your deductible, it makes sense to stay in network and have the amount you pay be credited towards your deductible, in case you need additional care later in the year).  Although DealWell might be a good option for people looking for one-time services that aren’t covered by health insurance (such a LASIK or a dental implant, for example), it’s probably not going to be the next big thing in healthcare price transparency.

Over at Disease Management Care Blog, Jaan Sidorov takes a closer look at the glowing picture painted by CMS regarding ACO pilot programs, digs a little deeper, and gives us a slightly less rosy view of the results.  And there’s even a T-Rex analogy, to keep things even more interesting.  Jaan points out that the ACOs that didn’t meet the pilot program goals are likely feeling the sting of losing millions of dollars, since the initial investment costs are not cheap.  Although 9 of the 32 pilot ACO providers have said that they want to leave the program, I wonder if results will be better as time goes by, mitigating the initial investment costs somewhat?  Stay tuned.

Julie Ferguson of Workers’ Comp Insider writes about the July 6th 777 crash at SFO, detailing how the flight attendants did an excellent job of putting their emergency training into practice, saving lives in the process.  Julie notes that while it’s easy to shrug off emergency plans simply because we rarely come face-to-face with an emergency, such preparedness can mean the difference between life and death.  Does your business have a solid plan in place to deal with emergencies?  Has everyone at the business been trained on it?  How fast can your building be evacuated if necessary?  All good things to think about.

Writing at Health Access Blog, Anthony Wright discusses the one-year delay of the employer mandate portion of the ACA that will require employers with more than 50 employees to provide health insurance to eligible full-time workers.  Anthony makes some very important points:  the delay doesn’t impact anyone’s eligibility for health insurance and/or subsidies.  People who would have been offered health insurance from an sledding in Coloradoemployer with the employer mandate in place will still be able to get coverage through their state’s exchange – and if they make up to 400% of the federal poverty level, they’ll qualify for subsidies to help pay for it.  In addition, the vast majority of large employers in the US already offer health insurance to their employees and have historically done so without a mandate requiring it.  It’s unlikely that a large amount of those employers will suddenly drop their coverage in 2014.  But Anthony goes on to note that if the delay were extended for additional years, it could begin to destabilize the financial foundation of the ACA and employers might begin to shift more workers onto exchange plans, relying on tax-funded subsidies to foot a portion of the bill.

The Healthcare Economist, aka Jason Shafrin, brings us a great summary of health insurance in China over the past half century.  Until the end of the 1970s, there were three main health insurance systems in China that covered nearly everyone.  But the wheels started to come off after that; by 1998 almost half of the urban population had no health insurance, and by 2003, 95% of the rural population in China was uninsured.  In the last ten years, China has tackled health care reform in order to try to remedy the problem.  While plenty of progress has been made, there is still a long way to go.

Jared Rhoads has written a review of The Autistic Brain by Temple Grandin.  His review is a good read, and the book looks like it is as well.  Professor Grandin teaches at Colorado State University – my alma mater –  and consults for the livestock industry as well as being a bestselling author.   She’s an inspiring and accomplished person even without taking into account her own autism.  Her book combines her personal Temple Grandin professor at CSU - Colorado State Universityexperiences with the latest that science has to offer us with regards to autism.  If you’re interested in autism, Jared’s summary is that this book is a good place to start learning more.  I’m adding it to my list of books to read, so thanks for the tip Jared!

John Goodman lays out some of the results of the ACA thus far (fair enough, but keep in mind that most of the law hasn’t been implemented yet).  He details some positives and negatives, both expected and unintended, although his overall take is that the ACA is not a great solution.  Strongly worded opinions about the ACA will likely meet with a round of applause from one side of the political spectrum, and boos from the other side.  But regardless of your position, I would say that it’s tough to argue with John’s point about high deductible, consumer-driven health plans.  I think he’s correct in saying that they’re probably going to be quite popular starting in 2014, when they will be among the least-expensive plans available.  This is probably particularly true among people who won’t qualify for subsidies.

That’s it for this mid-summer edition of the Health Wonk Review.  Many thanks to Julie and Joe for keeping such a great blog carnival going all these years!  The HWR now has a summer hiatus. Don’t miss the next edition on August 15th, which will be hosted by David Williams at Health Business Blog.

Apples And Oranges: Employer Mandate And Individual Mandate

On the heels of last week’s employer mandate delay and a few other smaller – but not insignificant – delays in ACA implementation, it’s not surprising to see that Republicans in Congress are pushing hard for a delay of the individual mandate too, with Speaker Boehner echoing many of his conservative colleagues’ position with his thoughts on the matter: “Is it fair for the president of the United States to give American businesses an exemption from his health care law’s mandates without giving the same exemption to the rest of America? Hell no, it’s not fair.

It’s anyone’s guess what will happen in Congress between now and the end of the year.  States like Colorado that opted to run their own exchanges and got going on the process soon after the ACA passed in 2010 are likely to be less impacted by relaxed federal guidelines, since they’re probably exceeding minimum standards already.  Patty Fontneau, CEO of Connect for Health Colorado (the Colorado exchange) noted in a meeting this week that the delay of the employer mandate doesn’t change anything for the Colorado exchange, since the exchange will be offering health insurance for individuals and small businesses, while the employer mandate focuses on businesses with more than 50 employees.   If anything, the delay would mean that that Connect for Health Colorado might have more eligible enrollees, since some people who Mandate for Individuals to purchase health insurance is different than the employer mandatework for large employers might still be on their own to purchase individual health insurance next year instead of getting it through their employers (as might have been the case if the employer mandate had not been pushed back a year).

Adding to the confusion is the Senate bill that was introduced this spring to officially define full time as 40 hours a week (S 701, Forty Hours is Full Time Act of 2013).  Since the employer mandate for large businesses to provide health insurance to their employees only applies to full-time employees, the definition of full time is critical to the discussion.  While most of the public generally accepts the idea that full time is 40 hours a week (although my nurse friends who work three 12 hour shifts per week most definitely consider their job to be full time…), the ACA is worded so that employees working over 30 hours per week (assuming there are at least 50 total employees) would have to be provided with health insurance in order for the employer to avoid a fine.  Senate Bill 701 has received a lot of attention in the media, but Govtrack gives it a 0% chance of being enacted, so it appears that the 30 hour rule in the ACA will likely still be in place when the employer mandate goes into effect in 2015.

Getting back to the issue of the individual mandate, there are a few […]

Subsidies Are Key To Limiting Rate Shock for Coverage in Exchanges

[…] because it provides premiums for bronze-level plans as well as the standard silver-level (subsidies are calculated based on premiums for silver plans, and premiums that have been discussed in the media thus far have been almost entirely for silver plans).  Healthy individuals and families who currently opt for higher deductible plans will be the ones who see the biggest change in premiums, since the ACA generally shifts plans towards richer benefits.  So while benefits will be greater in the future, premiums will be too – and families who would rather have lower premiums and higher out-of-pocket exposure will be herded onto higher-priced, richer-benefit plans.  Bronze-level plans will be their obvious choice, although even those planpremiums for bronze-level plans in Colorado health insurance exchanges will have richer benefits than many of the high deductible plans that are currently available in the individual market.  Families and individuals who prefer richer benefits already will find that their premium changes are not as dramatic, since they will likely end up with an ACA-compliant plan that is more similar in design to what they currently buy (they will be more likely to opt for silver or gold plans).

I’m using a family of four modeled after my own family so that I can compare premiums with what we pay now.  Our current plan is $403/month for two adults (mid/late 30s) and two small children.  That’s $4836 per year, and we spend an additional $540 per year on an accident supplement that would cover most of our out-of-pocket exposure if we were to have a claim because of an injury.

According to the KFF subsidy calculator, a bronze plan for our family would cost $9330/year – almost double what we pay now.  The benefits would be richer than what we have now (more in line with HSA-qualified plans, which we’ve opted not to have anymore because of their higher cost), but the premiums will be significantly higher too.  Of course we have to assume that even if the ACA had not passed, our premiums would continue to increase each year.  Over the last several years, premiums in the individual market in Colorado have increased for most of our clients by double digits most years, so we can safely assume that we’d probably have had at least a $500/year premium increase next year anyway.  But that’s not even close to the 93% increase to the bronze level premium for an ACA-compliant plan.

Those numbers don’t take subsidies into account though.  The $9330 is the base price for a bronze plan for a family similar to ours.  The actual amount the family will pay in premiums depends entirely on the family’s modified adjusted gross income (MAGI).  Here are the premium amounts that the family would pay for a bronze plan at various income levels, assuming that they purchase their coverage through their state’s exchange and take advantage of the available subsidy:

  • $40,000 annual income:  Bronze plan premium = $38/year (subsidy pays $9292)
  • $50,000 annual income:  Bronze plan premium = $1438/year (subsidy pays $7892)
  • $60,000 annual income:  Bronze plan premium = $2986/year (subsidy pays $6344)
  • $70,000 annual income:  Bronze plan premium = $4667/year (subsidy pays $4663)
  • $80,000 annual income:  Bronze plan premium = $5673/year (subsidy pays $3657)
  • $90,000 annual income:  Bronze plan premium = $6623/year (subsidy pays $2707)
  • $95,000 annual income (and above):  Bronze plan premium = $9330/year, with no subsidy.

The estimated median income for FY 2013 for four-person households in the US is $74,964 (note that this is higher than the overall estimated median household income, because it’s specific to four-person households, which often include two working parents and people who are further along in their careers, as opposed to people who have just finished school and entered the workforce for the first time).  And keep in mind the math[…]

Subsidy Calculations Not As Simple As They Seem

If you’re confused about the subsidies for health insurance starting in the exchanges in 2014, you’re probably not alone.  Although the basic math is quite simple in terms of the maximum amount a family or individual will have to pay based on their income if they earn less than 400% of federal poverty level, it’s still tough to pin down specifics in terms of who will end up getting subsidies, especially for people who are right on the border of the income cut-off.

There have been subsidy calculators online for quite some time.  The first one we found was from the Kaiser Family Foundation, but numerous others have appeared recently.  Connect for Health Colorado, the Colorado exchange, has a calculator on its website, but their calculations aren’t calculatin subsidies for health insurance exchangebased on Colorado data yet.  On the contrary, the calculator includes language explaining that “The premiums in this calculator reflect national estimates from the Congressional Budget Office for silver plans, adjusted for premium inflation and age rating.”  So for the time being anyway, you can’t use the Connect for Health Colorado calculator to generate Colorado-specific subsidy numbers.

That might change after the Division of Insurance releases official rates at the end of July.  Part of the confusion around rates and subsidies stems from the fact that rates are not yet finalized.  There’s still a lot of number-crunching (and maybe some “do-overs” from carriers) going on, and July 31 has been set as the date for final numbers to be released in Colorado.

For now, it appears that most subsidy calculators are using generalized national average data, estimated by the CBO.  But the numbers turn out differently depending on what calculator you use.  Let’s consider a family of four, with an income right around the cut-off for subsidy qualification.  We’ll do a calculation based on an income of $94,000 and another using $94,500 (which puts them just above the subsidy qualification limit of 400% of FPL).  For two parents (age 37 and 35) and two young children with an annual household income of $94,000, the Kaiser Family Foundation calculator estimates a total subsidy of […]

Guaranteed Issue Health Insurance Increases Entrepreneurship

Removing the pre-existing condition barrier to entry in the individual health insurance market is a good way to make people more likely to take the leap into self-employment instead of feeling tied to their guaranteed-issue group health insurance

[caption id="attachment_5992" align="alignleft" width="169"]Guaranteed Issue Health Insurance Increases Entrepreneurship A local Fort Collins business – New Belgium Brewing[/caption]

policy.  There’s definitely room to debate the issue on an individual basis.  Some people, especially younger, healthy people who have always qualified for underwritten health insurance and who earn enough money to be above the subsidy cutoff (about $46,000 for an individual and $94,000 for a family of four), might find themselves financially worse off under Obamacare (although they will likely have better quality health insurance going forward, which could improve their financial situation if they ever needed to use it).  But from the perspective of benefiting as many people as possible, the new rules regarding individual health insurance are good ones.  Most young people (the population hardest hit by rate hikes related to making individual policies guaranteed issue) will qualify for subsidies to lower their out-of-pocket spending on premiums.  And nobody will have to deal with the frustration of not being able to qualify for health insurance outside of an employer group plan.  A few years ago, in states that didn’t have high risk pools available, people who couldn’t qualify for […]

Clearing Up Confusion Around The Health Insurance Provider Fee

One of the funding mechanisms for the health insurance exchanges is the implementation of the health insurer fee that will go into effect in 2014.  I’ve seen this referred to as a health insurance provider fee (a bit confusing as it might lead people to believe that the fee is imposed on medical providers rather than insurers), a health insurance industry fee, and an ACA health insurance carrier fee, among others.  But whatever you want to ACA health insurance provider or carrier fee to fund exchangescall it, the fee is an amount that will be collected from health insurance carriers starting next year, and the funds will be used to help pay for the state and federal health insurance exchanges.

The fee will generate $8 billion in 2014, and will increase each year up to $14.3 billion in 2018.  After that, it will increase annually in line with health insurance premiums.  Insurance carriers will be responsible for remitting their share of the fee, which is calculated based on the insurer’s total collected premiums from the prior year.

As is generally the case with any new fees or mandates that increase costs for insurance companies, this fee will be passed on to companies and individuals who purchase policies.  However, it won’t necessarily be easy to determine how much the fee is impacting your health insurance premiums, since many carriers are expected to just roll the fee into their total premiums.

In Colorado, Rocky Mountain Health Plans has stated that they will be adding the health insurance provider fee as a separate line item on their bills in an effort to be as transparent as possible.  They will begin collecting the fee next month (July 2013) in order to spread the fee over a longer time horizon and thus lessen the impact on next year’s premiums.  Carriers can choose to wait to begin collecting the fee, but the total amount collected will be the same regardless:  Roughly 2% – 2.5% of total premiums in 2014, and 3% – 4% of total premiums in future years.  In the individual market, RMHP will be Rocky Mountain Health Plans HMO Coloradocollecting $4.12 per member per month, for the rest of 2013.  If you have a SOLO plan with RMHP and notice a line item on your bill labeled “Health Insurance Providers Fee”, now you’ll know what it is (be aware that the total collected is per member per month, so if you have a family of five on a RMHP policy, your bill will reflect a charge of $20.60/month starting in July).  If you have coverage with another carrier, you’ll still be paying the fee (some carriers […]

Comparing Individual Marketplace Premiums to Small Group is Disingenuous

After a lot of confusion late last month regarding 2014 health insurance rates in Colorado and information about which carriers would be offering policies in the exchange (Connect for Health Colorado), off the exchange, or both, a lot of the dust started to settle late last week and more information has become available both in terms of rates (although they won’t be finalized for another couple months) and carriers.  The Colorado Division of Insurance has released a full list of the carriers that submitted rates for next year, including details regarding whether each plan will be for individual or small group, and sold on exchange, off exchange, or both.  Detailed rate information is available from some carriers on the Colorado Division of Insurance website, although there will likely be a lot of change between now and October.

As soon as rate data started becoming available in a few states, both supporters and opponents of the ACA jumped on the info and used it to paint two very different pictures.  HealthBeat’s Maggie Mahar (who has astutely and accurately rebuked a lot of political spin and fear-mongering from opponents of the ACA ever since it was signed into law) called out Avik Roy for his critical view of the new rates, noting that he was comparing “apples to rotten apples” in his Forbes article about rate shock.  But Roy did make a very good point is his article, which was based on the release of rates in CA.  He noted that

“The rates submitted to Covered California for the 2014 individual market,” the state said in a press release, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”

That’s the sentence that led to all of the triumphant commentary from the left. “This is a home run for consumers in every region of California,” exulted Peter Lee.

Comparing Individual Marketplace Premiums to Small Group is DisingenuousRoy went on to point out the key words there, which might have gone unnoticed by people who aren’t in the health insurance industry or paying very close attention to the details:  The rates for the new individual market are being compared to the existing rates in the small group market.

It is not at all surprising that the new individual rates are looking similar to existing small group rates.  Earlier this year I wrote about how difficult it was going to be for the individual market to be priced significantly lower than the small group market once medical underwriting was no longer a factor.

But I’m not sure that most people (other than business owners) are completely aware of how high small group health insurance premiums are.  As we’ve noted many times, people who have employer-based health insurance are often insulated from the true cost of the coverage, thanks to the fact that at least a portion of the premium is paid by the employer.  Some people started […]

No Colorado Health Insurance Rate Information Yet

May 15th was the deadline for health insurance carriers in Colorado to submit rates for new plans that will be sold in the individual and small group markets in Colorado, both in and outside of the exchange/marketplace (Connect for Health Colorado).  Much has been said about today – May 22nd – being the date when those rates are available to the public, and there has been a lot of anticipation about getting to find out what health insurance premiums are going to look like next year in Colorado.  We know that in the Pacific Northwest, rates have come in lower than expected, attributed partially to the “heavy competition” in the WA and OR marketplaces (9 and 12 insurers, respectively).  Colorado has even more competition than that, with 19 different carriers submitting rates for plans to be sold through Connect for Health Colorado and on the open market (I’ve seen other reports that say 17 carriers, but either way, it will be a robustly competitive market – just as we’ve always had in Colorado).

No Colorado Health Insurance Rate Information YetThere has been much speculation about what the new rates will look like.  9News did a piece last week that highlighted the concerns that rates – particularly in the individual market – could be much higher next year.  Over the last year or so, in talking with knowledgeable representatives from the various health insurance carriers (who are themselves talking with knowledgeable actuaries), we’ve heard predictions that range from rate decreases for older policy-holders to rates more than doubling for younger insureds… and just about everything in between.  So we are very curious to see how things look once the DOI releases rates.

Today’s the day that those rates are scheduled to be made public, but I doubt that things will be particularly clear anytime soon […]

ACA – We Need Solutions Instead Of Repeal Votes

By now it’s probably not surprising to anyone to hear that the House voted – yet again – to repeal the ACA yesterday.  This is the 37th time in the last three years that they’ve voted to repeal and/or defund all or part of the law.  They are fully aware of the fact that their vote will – as usual – end with them, as it’s highly unlikely to get through the Senate.  But they continue to focus a rather significant portion of their (taxpayer funded) time on this issue.

It’s understandable that there are objections to the ACA.  To say otherwise is to be blind to some of the obvious problems that are inherent in the law.  We’ve written numerous posts in support of the ACA over the past few years, but we’ve also noted several concerns that we have, and I think ACA - We Need Solutions Instead Of Repeal Votesthey’re valid ones.  Premiums in the individual market might end up being higher after full ACA implementation for a lot of people who receive little or no subsidies (we’re expecting to see rates published by the end of this month for policies that will be sold in the Colorado health insurance exchange.  The deadline for carriers to file them was Wednesday).  New restrictions on age-banded rate ratios might end up making younger, healthier people (the ones who are most needed in the health insurance pool in order to stabilize premiums for older, sicker insureds) less likely to obtain coverage.  This problem might be exacerbated by a less-than-robust individual mandate, at least for the next year or two.  We’ve also wondered whether the exchanges will be capable of providing a high level of customer service, given the complexity of the enrollment process (assuming an applicant qualifies for subsidies) and the fact that many of the applicants will be applying for health insurance for the first time.  Will the exchanges have enough staff to rise to the customer service level provided by private industry, or will contacting a knowledgeable representative during the open enrollment period be on a par with getting a hold of a knowledgeable representative at the IRS between January and April?

The concerns that we have about the ACA are outweighed by the positives though:  More people with health insurance, guaranteed issue individual plans, better preventive care, and numerous[…]

Comparing CEO Compensation in Various Healthcare Industries

Joe Paduda of Managed Care Matters did an excellent job with the most recent Health Wonk Review – be sure to stop by his blog and check it out.  I thought this article from Dr. Roy Poses was especially interesting.  Writing at Health Care Renewal, Dr. Poses shines the spotlight on UnitedHealth Group’s CEO Stephen Hemsley’s oversized compensation.  Roy notes that while the increase in CEO compensation does mirror the company’s overall financial success of late, it must also be considered in light of the fact that the company has made some missteps in terms of fulfilling its stated mission to provide health care “at an affordable price” and “expand access to quality health care.”  Roy’s article cites several examples of allegedly unethical behavior, and concludes by noting that “Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.”

Comparing CEO Compensation in Healthcare - Health Insurance vs Pharmaceutical CompaniesI definitely do not disagree with Dr. Poses, and we’ve noted in the past that UnitedHealth Group has had issues with large executive compensation and backdating stock options (that was with a previous CEO, however).  But I do want to use this as an opportunity to remind our readers and clients that most health insurance companies have CEO compensation packages that are far lower.  Forbes compiled a list of the 498 highest-paid CEOs in 2012, and I scrolled through the first 150 on the list.  UnitedHealth Group is there on the first page, ranked number 8 (they’re also ranked number 31 in Fortune 500 total profits, so as Roy said, the CEO salary is at least in the same ballpark with the company’s financial performance).

But you have to click through several pages of the CEO compensation list to get to the next health insurance carrier.  Humana was the next one I found, ranked at […]

Colorado Health Insurance Exchange Won’t Be A Train Wreck

When Max Baucus predicted that the implementation of key aspects of the ACA could be a “huge train wreck coming down“, his comments were met with a lot of “see, I told you so!” comments from the right, and some surprise from the left, given how instrumental Baucus was in drafting the legislation.  Now Harry Reid has stated that he agrees with Baucus.  Reid noted that there is still much work to be done, and that significant Colorado Health Insurance Exchange Won't Be A Train Wreckadditional funding is needed in order to make the remaining implementation of the ACA successful.  HHS Secretary Kathleen Sebelius pointed out that her requests for additional funding were rejected in a recent short-term funding plan, but she’s optimistic about the ACA implementation, saying “…we are on track to fully implement marketplaces in January 2014 and to be open for open enrollment.”

I would say that the job Sebelius has in front of her is a monumental one, no doubt made harder by the propagation of misinformation and outright lies (there are no death panels!).  In addition, a majority of the states opted to either have the federal government run their exchanges (26 states) or partner with the state on a joint exchange (7 states).  Only 17 states plus the District of Columbia have taken sole responsibility for running their own health insurance exchanges (Colorado is in this category).  So although HHS will likely be able to implement very similar exchanges in the 26 states where they will be fully responsible for running the exchange, making economies of scale work in their favor, the fact remains that they face a significant task: getting exchanges going in more than half the states, often in places where resistance to the ACA […]

The Impact Of the Colorado Sexual Orientation Non-Discrimination Regulation

Last month, Colorado became the third state to prohibit health insurance carriers from denying claims based on sexual orientation and/or gender identity.  At first, we were puzzled when we saw the headlines in the news, since they mostly mentioned discrimination based on sexual orientation or discrimination directed at LGBT insureds.   We were thinking mainly in terms of gay, lesbian and bisexual clients, and we couldn’t remember ever dealing with a claims denial issue based on sexual orientation.  We also had never seen any questions on a health insurance application regarding sexual orientation.

The only issue we had ever come up against in terms of LGBT discrimination had to do with same-sex partners who wanted to apply together for family health insurance policies in the individual market.  Although individual health insurance for two people was the same total price regardless of whether they were on one policy or two, it was often inconvenient for families to have to have two separate policies, and in the case of HSA-qualified plans, it was also financially detrimental to have to split up the family for health insurance purposes.

But we never had any issues with applications being rejected or claims being denied based on sexual orientation.  I posted last month on Google+ that although I’m always in favor of expanding equality, I was a bit perplexed by this new regulation, given that we weren’t aware of any carriers using sexual orientation as an initial underwriting and/or claims issue.

Then I started discussing this issue with Dede de Percin, Executive Director of the Colorado Consumer Health Initiative, and Ashley Wheeland from One Colorado, and I’ve learned a lot more about it in the last few days.  As far as I’ve been able to tell, the DOI bulletin, titled “Insurance Unfair Practices Act Prohibitions on Discrimination Based Upon Sexual Orientation” is primarily a response to broad exclusionary language in health insurance policies that allowed for claims to be denied if the insured was transgender.  The claims Impact Of the Colorado Sexual Orientation Non-Discrimination Regulationexclusions could range from specific treatment related to gender transitioning, to onerous exclusions for just about any medical care at all: De Percin notes that one transgender person was denied coverage for a broken arm because the health insurance carrier determined that the hormones the person was taking weakened the bone and thus led to the break.  This is absurd, and it does sadden me to learn that such broad exclusions were being […]

The New Individual Health Insurance Application Questions

For more than a decade now, we’ve been helping our clients complete individual health insurance applications.  Before online applications were common, we would drive to our clients’ homes and help them fill out paper applications.  These days, Jay spends many hours each week on the phone with clients who have questions at some point during […]

Healthcare Social Media Review: Which Tools Work Best For Your Patients?

Welcome to the HealthCare Social Media Review, where you’ll find all sorts of articles on the intersection of healthcare and social media.  Over the years, we’ve found social media to be an excellent way to interact with our peers, colleagues, and clients – first with our blog, and now increasingly through Google + (Jay, Louise), Twitter (Jay, Louise), and Facebook.  I relied heavily on Twitter when I was looking for articles to include in this HCSM Review, and all of the social media platforms we use are excellent resources when we’re looking for like-minded people or relevant, timely information on a particular topic.  We’re honored to be hosting this edition of the HCSM Review.  The blog posts included here are all written by people who have a strong social media presence, and we’ve included links to their Twitter, Facebook or Google+ pages so that you can follow them too.

To start things off, we have an excellent article from Nina Dunn (@Spector_health), explaining that we need to get back to basics with social media use in healthcare.  Rather than focusing on the negatives (it changes too fast!  There are no clear guidelines for how to use it!  HIPAA!, etc.), Nina encourages healthcare providers to focus instead on the ways that social media can be beneficial.  She notes that just because a platform exists doesn’t mean that you have to use it (ie, you don’t need to be on every social media channel all at once), and that it’s important to know your audience and target your social media presence accordingly.  Good content is king (that rule never changes), and social media marketing might require a different mindset when it comes to measuring success – but that’s not a reason to avoid it.  All in all, a great read, and a perfect tone for the Healthcare Social Media Review…

Healthcare and Social Media Tools

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David Harlow of HealthBlawg gives us a perfect example of how social media can be very useful in terms of gathering information and engaging people in real time to solve problems.  The Office of the National Coordinator (ONC) for Health IT issued a request for information (RFI) on interoperability, asking “What specific HHS policy changes would significantly increase standards based electronic exchange of laboratory results?”  The problem appears to basically hinge on the fact that labs receive no financial incentives to make their reports interoperable and compliant with EHR meaningful use standards (medical offices do have a financial incentive to do so).  Keith Boone (@motorcycle_guy) blogged about the question, and then the power of social media took over thanks to retweets and […]

Infographic – Affordable Care Act and How Individual Health Insurance is Changing in 2014

A quick overview of how individual health insurance will change in 2014 due to the Affordable Care Act (ACA).

Health Insurance Premiums Coming To A W2 Near You

I’ve noted many times on this blog that one of the difficulties faced by proponents of health care reform is the fact that a lot of Americans are somewhat shielded from the actual cost of health insurance because a portion of their health insurance is paid for by their employer.  And when we talk about […]

Committee Kills Bill That Would Have Repealed Colorado Exchange Law

Colorado Representative Janak Joshi (R, Colorado Springs) is continuing his efforts to get government out of healthcare, but his latest bill died in a 9-2 vote in the House Health, Insurance and Environment Committee, with the no votes coming from both political parties.  Joshi’s defeated bill would have repealed the 2011 law that created Colorado’s […]

Colorado Lawmakers Push Ahead On Medicaid Expansion

Lawmakers in Colorado voted last week to reject a Republican proposal that education funding be a higher priority for the state budget than Medicaid expansion.  In my opinion, the state’s Medicaid expansion plan is a good idea, and one that’s worth funding.  The alternative is that we continue to have a significant segment of the […]

Strengthening The ACA Individual Mandate

Many people have expressed concerns that the mandate portion of the ACA isn’t strong enough to balance out the expected sharp increase in premiums that will accompany guaranteed issue coverage starting next year.  Open enrollment windows are a possibility, but I’m not the only person who has noted that compressing each year’s applications into a […]

Open Enrollment For Individual Health Insurance Plans Starting in 2014

Ever since the PPACA was first being discussed, the individual mandate has been touted as a buffer to protect health insurance carriers – and in turn, policyholders – from adverse selection that would otherwise certainly occur in a guaranteed issue individual market.  It seemed that as long as people were required to maintain health insurance coverage, adverse selection would be minimized and people would be unlikely to purchase health insurance only during periods of sickness. But there was still enough concern about adverse selection that HHS issued a proposal for open enrollment periods in the individual market starting next year.  This proposal was released at the end of November, and the specific details regarding the open enrollment period are on page 70595 of this Federal Register.

Open Enrollment For Individual Health Insurance Plans Starting in 2014To sum it up, they’re proposing an initial open enrollment period for individual/family health insurance that starts in October 2013 and runs through the end of March, 2014 (a six month window in order to accommodate the large influx of initial applications), and then open enrollment periods that mirror Medicare’s: October 15th until December 7th each year.  Beyond that window, only “qualifying event” applications would be allowed for […]

Colorado’s Medicaid Expansion Plans Make Sense

Governor Hickenlooper’s announcement last week that Colorado plans to expand Medicaid eligibility to more than 160,000 childless adults has been met with much debate from both sides of the political spectrum.  The voices opposed to the expansion come mainly from an economic perspective, saying that we just can’t afford to cover more people with Medicaid.  And as is usually the case, there are wildly different estimates of how much the Medicaid expansion will cost and/or save the state over the next decade:  The Kaiser Family Foundation says that the move will cost Colorado $858 million over the next decade, while Governor Hickenlooper’s office says that it will save $280 million instead.

Colorado Medicaid Expansion DebateAfter all of the money talk from the CBO and all of the special interest groups over the last few years regarding various aspects of the ACA, I think a lot of people have become numb to the numbers.  Predictions of how much any healthcare legislation will cost or save over any lont-term time horizon really depend on who is doing the study and what variables they took into consideration.  And we have to bear in mind that laws and reforms and healthcare in general are not static entities; they’re constantly changing, which makes long-term financial predictions murky at best.  Even if we could control for every single current variable and come up with an accurate picture of the cost and/or savings implications of the Medicaid expansion, we can’t know what additional changes might be made in the future that will increase or decrease the predicted amounts.  Given that reality, as well as the dramatically different financial predictions out there, I think it’s best to assume that the actual numbers will […]

How the Affordable Care Act Affects You

For the first couple years after the Affordable Care Act was signed into law, everything seemed to be a bit up in the air.  There was almost constant bickering about the subtle nuances of the legislation, along with uncertainty from both sides of the political spectrum insofar as whether or not the law would stand the test of time.  The Supreme Court had to weigh in, and we also had a major election cycle midway between the signing of the law and the enactment of many of its main provisions.

Most of that has settled down now.  SCOTUS upheld the law.  And there was no election upheaval in Congress to tilt the legislative body towards a crowd that would be likely to repeal it.  States – like Colorado – that had been working towards setting up a health benefits exchange can continue to do so without as much worry that their work might be in vain (there had been How the Affordable Care Act, Obamacare, Affects Yousome concern that the law would be tossed after states had invested a lot of time and money in the exchange-creation process).  We are just over a year out now from January 2014, when many of the major provisions of the ACA will go into effect; it seems relatively certain at this point that the ACA will continue to move forward now that some of the potential roadblocks are in the rearview mirror.

Several provisions of the Affordable Care Act – ACA have already been implemented over the past two years:  Young adults can remain on their parents’ health insurance policy until […]

2012 Obamacare Premium Rebates (Infographic)

Did you receive a health insurance premium rebate this year? If so, how much was it? We created a simple visualization of how the PPACA (Obamacare) health insurance premium rebates break down between the individual/family, small group and large group markets and how Colorado’s rebates compared to the national average.

2012 Obamacare Colorado Health Insurance Rebates

Healthcare Fact Checking the Presidential Debate in Denver

I think that political debates would be a lot more fun (and educational) to watch if non-partisan fact checkers were allowed to sit off to the side and hold up “pants on fire” signs when appropriate. But the next best option is the plethora of online fact-checkers who can help us sift through the statements. It’s generally been acknowledged that there were more than a few half-truths and outright lies in last night’s 1st Presidential debate here in Colorado at the University of Denver.

Specifically regarding healthcare and health insurance reform, there are a couple of PPACA-related points that need further comment. First, we have the comment from Romney regarding the “unelected board, appointed board, who are going to decide what kind of treatment you ought to have.” He’s referring to the Independent Payments Advisory Board (IPAB), whose job is to oversee general Medicare spending. They are allowed to reduce Medicare payments to hospitals with high re-admission rates and recommend ways to reduce wasteful Medicare spending through new innovations. But they cannot restrict benefits, alter Medicare eligibility, or make any decisions regarding treatment options. […]