Tag: "insurance"

Why Does the Government Need More Money for ObamaCare?

I’ve asked Secretary of the Treasury Jack Lew and Secretary of Health and Human Services Kathleen Sebelius to explain the massive jump in costs for premium subsidies. The projected figure for subsidy expenditures has gone from nearly $16 billion in the president’s 2012 budget up to nearly $22 billion in his 2014 budget. Why is the administration expecting these costs to soar? Is it because they are seeing employers dropping coverage, leaving more employees to get ObamaCare insurance through an exchange subsidized with these tax credits? Is it because they expect insurance premiums to soar, driving up the percentage-figure the government must cover with subsidies? Maybe both.

Orrin Hatch.

Jun 19, 2013 | 12 comments | by

Exchanges: Re-inventing the Wheel

eHealthInsurance.com — along with smaller websites providing similar services — is, in virtually all respects, an existing healthcare exchange and has operated as such for long before the Affordable Care Act introduced the concept of the health insurance exchange into the vernacular of national health care policy…

[Yet] while states such as California and Maryland had initially indicated that they would move forward in a relationship with eHealthInsurance.com — the largest privately run health insurance exchange in the nation — these states have recently backed off their commitment to bring the web-based company into the mix right from the start, suggesting instead that they might permit eHealth to participate in “a year or so.”

…by failing to include companies like eHealthInsurance.com, the state exchanges are dramatically increasing the odds that the first year of ObamaCare may be less successful than it could be were they to open up to the participation of the private sector.

Whatever the reason for the reluctance of the state created exchanges to include private business participants, the end result is that taxpayers will spend millions of dollars unnecessarily while fewer people are likely to be enrolled in qualified health insurance programs — and that is just wrong.

Rick Ungar at Forbes.

Jun 13, 2013 | 13 comments | by

Will Employers Intentionally Offer Unaffordable Coverage?

This is from Avik Roy:

The law requires that every employer with 50 or more “full-time employees” offer “minimum essential coverage” in an “affordable” manner…

The penalty is triggered if at least one employee seeks federal exchange subsidies instead of gaining insurance form his employer. In that case, the employer will have to pay a non-tax-deductible fine of the lesser of $2,000 times the number of full-time employees ― 30.

If the employer does offer a health plan, but it isn’t “affordable” to all workers or fails to meet the “minimum essential coverage” requirements, then the employer pays the lesser of the fine described above, or $3,000 times the number of full-time employees receiving exchange subsidies.

What does this mean in reality? It means that employers have an incentive to offer coverage that is either “unaffordable” according to ObamaCare or that fails to meet the law’s “minimum essential requirements.” That way, the employer pays a penalty only for those workers who gain subsidized coverage on the exchanges. So the best way for employers to “dump” coverage onto the exchanges is not by offering no coverage at all, but by offering coverage that doesn’t meet ObamaCare’s requirements.

Jun 07, 2013 | 17 comments | by

Quote of the Day

Health insurance is going to cost a lot more than it did…You either pay higher prices in higher premiums, or you pay a higher price in limited access to which doctors and hospital you can go to.

Robert Laszewski

Jun 06, 2013 | 15 comments | by

Why Your Health Insurance Benefits May Be Shrinking

The trend is accelerating. The percentage of employers revising their plans as a result of the [Cadillac] tax has increased to 17 percent this year from 11 percent in 2011, according to a survey of United States companies released this month by the International Foundation of Employee Benefit Plans.

Although the tax does not start until 2018, employers say they have to start now to meet the deadline and they are doing whatever they can to bring down the cost of their plans. Under the law, an employer or health insurer offering a plan that costs more than $10,200 for an individual and $27,500 for a family would typically pay a 40 percent excise tax on the amount exceeding the threshold. (NYT)

May 28, 2013 | 11 comments | by

How Small Business May Escape the Effects of ObamaCare

UnitedHealth Group Inc. and Humana Inc. will begin offering smaller employers — including firms with as few as 10 members in UnitedHealth’s case — the option of so-called self-insurance in some markets later this year. Self-insured businesses pay their workers’ medical costs directly, instead of joining a traditional managed-care plan. Usually, they hire benefits firms or insurance companies just to administer their plans.

Most big companies choose the approach, because it gives them more control over benefits and can lower costs.

For small businesses, being self-insured would let them avoid new requirements under the law that call for traditional small group plans to include richer benefits, such as mental-health and maternity care. Self-insured companies can also avoid changes to pricing rules that could increase costs for groups of healthy workers. (WSJ)

May 28, 2013 | 11 comments | by

The Case against Universal Medicare

We are already hearing reports of doctors who do not take Medicare patients. In a 2010 survey of 9,000 physicians, the American Medical Association reported that 17 percent of doctors restricted the number of Medicare patients; among primary care physicians, a whopping 31 percent did. With universal Medicare, is the population really going to accept, and would Congress really allow, the continued reductions in prices?…

By some estimates, the Medicare program loses a staggering $60 billion to fraud each year. This amounts to 11 percent of the Medicare budget and would be enough to double Federal spending on primary and secondary education. No private company would ever tolerate this abuse. Imagine the fraud if Medicare covered 300 million Americans.

From Dana Goldman and Adam Leive at the Health Affairs Blog. Entire post is worth reading. See also, my Health Affairs Blog post with Tom Saving, Is Medicare More Efficient than Private Insurance?, and the NCPA study, Health Care Reform: Do Other Countries Have the Answers?

May 23, 2013 | 13 comments | by

Insurance Matters

Medigap added to Medicare means more spending:

[E]mployer-sponsored and self-purchased supplemental coverage were associated with annual spending growth rates of 7.17 percent and 7.18 percent, respectively, compared to 6.08 percent for beneficiaries without supplemental coverage. In the first empirical study of the topic, the researchers found significantly higher rates of spending growth in all supplemental insurance categories compared to the category without supplemental insurance, even while controlling for sociodemographic, disease, disability, and health behavior characteristics. Golberstein and his colleagues suggest that policy efforts to restrict the generosity of Medicare supplemental insurance plans, and the anticipated lower levels and lower generosity of employer-sponsored supplemental Medicare coverage for future retirees, could slow the rate of spending growth for Medicare beneficiaries. (Health Affairs)

May 20, 2013 | 10 comments | by

Kaiser’s Death Panel

A worrisome abdominal pain drove Jalal Afshar to seek treatment last year at healthcare giant Kaiser Permanente…Kaiser granted his request to see a specialist in Arkansas. But it ultimately declined to pay for his treatment there. By June, Afshar said, Kaiser was arranging for hospice care so that he could die at home. Afshar, 58, refused to accept that. Despite Kaiser’s stance, he went back to Arkansas for six months of stem-cell transplants, chemotherapy and other treatments that he says saved his life. Now he owes $2 million for his care and is suing the company in state court for breach of contract and unfair business practices.

Source: LA Times.

May 13, 2013 | 17 comments | by

RAND: Premium Support Best Way to Reform Medicare

In 25 years Medicare spending is projected to reach one-quarter of all federal expenditures, about 6 percent of gross domestic product (GDP). Several proposals to reduce the growth of Medicare expenditures have been debated in recent years. These include:

1)    Mean-tested premiums for Medicare Part A Hospitalization.

2)    Premium support, providing seniors a credit to purchase private plans.

3)    Raising the Medicare eligibility age to 67.

Means testing Medicare Part A premiums only reduces Medicare expenditures by 2.4 percent through 2037. Increasing the age of Medicare eligibility to age 67 reduces the cost by three times that amount — 7.2 percent. The proposal with the most potential was premium support. If a tax credit was tied to the growth in the economy, the savings is equal to 5.4 percent. However, if the premiums credit was tied to the consumer price index (i.e. merely adjusting for inflation), the program would save 24 percent.

Medicare Spending

Source: Health Affairs.

May 08, 2013 | 18 comments | by
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