Health law’s mandate, tax credit could help or hurt employers
Original article https://www.upi.com
By Andrew Hedlund – Medill News Service
Business owners view the new health care law through many different paradigms. Some see it as onerous, while others find it helpful. Research suggests that one of its most contentious provisions, the employer mandate, will have minimal impact.
Joe Olivo is a small business owner who finds the new health care law costly and confusing, particularly next year’s employer mandate. Mark Hodesh is a small business owner who finds the law to be a boon to his business.
Some business owners like Hodesh, the owner of Downtown Home and Garden in Ann Arbor, Mich., qualify for the tax credit, which is available to businesses with fewer than 25 employees to offer health insurance, and do not worry about the mandate, which only kicks in at the 50-employee mark.
Others like Olivo, who is a co-owner of Perfect Printing in Morristown, N.J., do not qualify for the credit and say the requirement that businesses with more than 50 employees must provide health insurance or face fines prevents them from growing.
Starting next year, employers that have 50 or more workers that are full-time, defined in the law as those working more than 30 hours a week, are required to provide coverage for their workers. For those with fewer than 25 employees, they receive a tax credit now of 35 percent of the cost of their employee health insurance costs, and that will increase to 50 percent next year. According to the Congressional Research Service, more than 90 percent of businesses had fewer than 50 employees.
Olivo’s business has 40 full-time employees and offers health insurance. With that number of full-time workers, he will not be subject to the mandate, but it gives him pause when deciding whether to expand the business.
In fact, Olivo is purposely avoiding hitting the 50-employee mark. Any new employees he hires work on a part-time basis. This decision is rooted in the uncertainty surrounding health care costs.
“If I see premiums are not going through the roof,” he said, “and I see there is a stable known situation where I can reasonably expect what will happen, I will have a better incentive to take the risk with my money and grow.”
What he has seen so far is not promising though, he said.
“(What) we’ve already started to see is how the regulation, the amount of work, for a company just under 50 employees,” Olivo said, “that we have to decide to make sure we’re in compliance — start looking at our employee’s hours, making sure we don’t go over the 50 mark because of the severe ramifications,” referring to law’s penalty of $2,000 per employee for any companies with 50 or more employees that don’t provide health insurance. The penalty would not apply to the first 30 employees.
Olivo also said the lack of finality in the IRS’s rules further confuses employers as 2014 draws closer. The agency will hold a public hearing on this provision Tuesday.
However, research on similar employer requirements in San Francisco and Massachusetts by the Urban Institute, National Bureau of Economic Research and the National Opinion Research Center found that the notion the requirement to provide insurance would lead to job loss or could lead to fewer employers offering health insurance was overstated.
In fact, the National Opinion Research Center found in its 2008 study that businesses with three or more employees offering health insurance in Massachusetts increased from 73 percent to 79 percent, though employers were less inclined to consider terminating coverage than national companies.
A study sponsored by the National Bureau of Economic Research found that, based on San Francisco’s efforts, employers nationwide will be less likely to choose the penalty option of this requirement because the Affordable Care Act lacks a public option. San Francisco does offer the equivalent of a public option, which some employers may find preferable.
Elise Gould, a health care economist at the Economic Policy Institute, said she expects the effects of the employer mandate to be minimal.
“I don’t think that it is going to lead to much job loss,” she said. “There may be some shifting in hours to avoid the mandate. I think that would be small though.”
Gould also added that she expects employers to take many different factors into account when considering expansion, with the insurance requirement being just one small factor.
The law attempts to aid small businesses with tax credits as well, though several restrictions come with them: firms must have fewer than 25 employees and pay them less than $50,000 in wages each year, meaning Olivo’s business is ineligible for a credit while Hodesh’s business qualifies.
He met the requirements and received a tax credit, allowing him to hire another employee.
Hodesh has 12 employees so he doesn’t need to worry about crossing the mandate’s 50-employee threshold soon.
“There are pluses and minuses to all issues,” Hodesh said. “And I think that people are focusing on the minus side of the requirements of the Affordable Care Act. They are missing out on all the positives of the law.”
Offering health insurance to his employees is also an important strategy for his store.
“We provide health care as a business tool,” Hodesh said. “We attract and keep good long-term employees, and we don’t have high turnover and we don’t have to train a lot.”
Starting around 2000, though, his company’s health care costs tripled, but the tax credit eased that cost.
“(The credit) gave us the confidence to hire a new person,” he said. “It’s a good deal for me.”
6 key compliance deadlines for 2013 and beyond
As PPACA moves forward, employers must keep track of 6 key compliance deadlines for 2013 and beyond
Original article https://ebn.benefitnews.com
By Kathleen Koster
For plan sponsors, 2013 is a year of crossing Ts and dotting Is on PPACA compliance for their health care plans and strategizing for next year, when the employer mandate and public exchanges go into effect. The health care reform law has many moving parts and a great deal of regulations yet to come, which will keep benefits professionals on their toes all year.
"Employers have never experienced this complexity and oversight in compliance for their health plans. Employers are used to a compliance-rich environment around their retirement plans, but they need an equally robust and hands-on approach to managing the compliance of their health plans," says Mike Thompson, a principal in the human resources services practice of PricewaterhouseCoopers. He adds that "the rules, regulations and level of enforcement have never been greater."
Thompson believes "2013 is a period of strategic re-evaluation of whom the employer will provide benefits to in light of the changes in the individual market allowing guaranteed issue and subsidies for lower- and middle-income Americans."
He believes that employers will also transition around financing as "more employers look at community-type programs with the interest of moving away from their own programs and potentially contributing towards a private exchange or facilitating access to coverage in the open market."
To help employers keep all their compliance ducks in a row while managing and determining long-term strategies for their plans, EBN asked legal and health care experts for top issues to keep in mind for 2013 and beyond.
1. Preparing for the 2014 employer mandate
"At the top of the list is the interpretation of employer responsibility provisions that includes what constitutes minimum essential coverage that employers have to provide or be subject to penalties. Along with that, there are very important issues around the minimum value of the coverage they provide as well as who they have to provide it to," says Paul Dennett, senior vice president of health care reform at the American Benefits Council.
The employer mandate applies only to large employers. Whether an employer is defined as large under PPACA (generally companies with 50 or more employees) depends on the number of its full-time equivalent employees. Companies with 50 or more full-time workers (averaging at least 30 hours per week) must offer minimum health care coverage that is affordable.
In 2013, an employer ought to be determining whether it is a large employer and, therefore, subject to the mandate. "If they offer coverage in 2014, the coverage must meet the minimum value standards and the contributions the employer requires of employees cannot be so high the coverage is unaffordable relative to the employee's household income," says Jean C. Hemphill, practice leader of Ballard Spahr's health care group.
To determine the minimum value, fully insured plans will rely on their insurance carrier for information on whether they meet the minimum value of 60% for their plan. Self-insured plans can turn to an actuary or determine their value with the aid of a government-provided calculator or government-provided checklists.
When it comes to determining the affordability of the plan, an employer cost-sharing arrangement must be affordable relative to the employees' household income, as stated under PPACA. So, "the employee's contribution and cost-sharing obligations can't exceed 9.5% of their household income," says Hemphill.
However, the IRS acknowledges that employers don't know workers' household income, and suggests employers use W-2 wage information instead to determine their plan's affordability.
Hemphill expects more guidance on this issue since employees' contributions are typically much greater for dependents coverage than their own. An employee offered otherwise qualifying coverage by their employer can't use the public exchange unless they prove their employer-sponsored coverage is unaffordable.
The affordability issue may be of greater concern to employers with fairly low-income workforces or for employers not offering comprehensive plans to employees or all employees, such as the mini-medical plans sometimes offered in the retail industry. Employers only need to offer one affordable plan with minimum value to satisfy the rules, however mini-medical plans will be illegal after 2014.
Actuarial experts predict that most high-deductible health plans with deductibles in the $2,000-$3,000 range will most likely qualify, however those with much higher cost-sharing may not meet the minimum value.
While sponsors can vary the deductible and coinsurance amount of HDHPs, they should remember that the higher the deductible, the lower actuarial value of the plan.
"There are variables that can be adjusted in the plan design, but the most important one is where to set the amount of the deductible," says Dennett. He adds that guidance so far has indicated employer contributions toward HSAs or credits toward HRAs will count toward the minimum value. The question is whether the amount contributed is counted 100% to the plan or if it is discounted in the actuarial value formula that HHS would use in the calculation of actuarial value coverage.
Overall, "the Affordable Care Act was designed so employers don't need to make too many plan design changes to their plan," says J.D. Piro, national practice leader for Aon Hewitt's health and benefits legal department. "They may need to open it up to more employees but, generally speaking, they should be able to meet the affordability and minimum value requirements."
2. Public exchanges
Employers are required to provide employees with notice alerting them of the existence of public insurance exchanges. It is thought that the government will issue a model notice for this purpose. At press time, the government had yet to produce this model notice or other guidance about the notice requirement. The March 1 notification deadline has been extended until "late summer or fall," according to a recent FAQ announcement from the Centers for Medicare and Medicaid Services.
"There may still be unanswered questions about whether the state exchanges, partnership exchanges or the federal exchanges are really at an operational readiness stage to be able to go live as of October 2013," says Dennett.
Assuming the exchanges are on track and sponsors receive the guidance they need, they should expect many questions from workers about how the process affects them.
"While most major employers will continue to offer coverage to employees, there will be some confusion around the availability of coverage in the public exchanges and what the implications are [for employees] getting coverage from their employer, says Thompson.
He suggests employees will primarily want to know:
* Do I still have coverage through my employer?
* Am I eligible to get coverage through the exchange?
* Can I potentially get subsidies through the exchange?
* Is it in my best interest to go through the exchange?
3. Waiting periods
Another design-related issue employers must factor into their plans is that under PPACA, waiting periods for health care coverage cannot exceed 90 days. The 90-day period begins when the employee is otherwise eligible for coverage. Employers with a high-turnover workforce that currently have long waiting periods will have to shorten them.
If an employer requires employees to work a minimum number of hours to qualify for coverage, it may need to monitor workers' timesheets in 2013 to determine if and when coverage needs to be offered in 2014; this may be complicated for seasonal employees and other employees with variable hours.
Thompson believes this is part of a larger question of meeting qualifications for providing coverage.
"It's part of a package in my mind," he says. "Employers must evaluate employee classes when looking at whether they meet the minimum threshold of providing coverage to full-time employees. Seasonal, temporary, or contract workers are classes that need to be evaluated in order to avoid or at least understand what the penalties might be."
4. Pre-existing and non-discrimination prohibitions
"The non-discrimination rules are new for insured plans in 2014," says Hemphill. Even though these prohibitions should already be in effect, government agencies have delayed enforcement until they release regulations.
"It will be an important issue because right now there is no requirement to offer coverage to part-time employees, but with the definition of full-time employees as an average of 30 hours per week and new non-discrimination testing rules, the employer obligation may be different," she says.
Either way, employers can expect notice and guidance well before implementation because, "it is a big plan design issue," says Edward I. Leeds, counsel in the employee benefits and executive compensation group at Ballard Spahr.
5. Wellness programs
PPACA includes rules that prohibit plans from discriminating against individuals based on a range of health-related factors. Plans cannot impose restrictions on eligibility or increase employee costs for coverage based on these factors.
"When the government issued guidance under ACA, they actually revised the HIPAA regulations. So now the ACA and HIPAA rules ... will be the same," says Leeds. "By and large the rules follow HIPAA with some changes, the most significant of which is that the potential reward for meeting requirements under the wellness programs will increase as of January 1, 2014."
The potential reward for meeting a wellness requirement will increase from 20% of cost of coverage to 30% of cost of coverage. Incentives related to tobacco cessation will increase up to 50%. (For more details, read "Regs increase wellness rewards," page 28.)
6. Upcoming fees and taxes
Patient-Centered Outcomes Research Institute, established by PPACA, will collect and publish information about clinical effectiveness of treatments for patients. It will be paid for through fees assessed against insurers and self-funded plans equal to $2 ($1 in the first year) per covered life. The assessment will last seven years and eventually be adjusted for inflation. Employers with self-funded plans will need to report and pay these fees starting in July 2013.
The Transitional Reinsurance Program aims to stabilize the individual health insurance market as insurers provide coverage, starting in 2014, to large numbers of individuals who do not currently have coverage and present uncertain risks. The program will provide reinsurance payments to insurers that take on high-risk individuals. The program is funded through a three-year tax (expected to be $63 per covered life in the first year.)
The Additional Medicare Tax, in effect this year, is an additional 0.9% tax applied to high-income individuals. Employers are responsible for withholding the tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year.
The wellness path not taken
Original article: https://ebn.benefitnews.com
By Kathleen Koster
With full implementation of health care reform marching along, the landscape of employer-sponsored health benefits will never be the same. As employers turn to private and public exchanges beginning in 2014 as allowed under the Patient Protection and Affordable Care Act, the purpose for and implementation of worksite wellness programs also are likely to change.
Dr. Matthew Liss, East Coast medical director of NBCUniversal Health Services, fears that employers may not see wellness as their responsibility or employees will be less engaged in wellness initiatives because employers won't work as closely with vendors in the exchange.
Employers may not have access to health data as in the past, which could influence their investment in wellness programs, as well as impact incentives for healthy behavior. Liss points to premium reductions for nonsmokers or incentives for going to the gym that are currently offered by working hand in hand with health care providers. Employers may lose this ability to work with vendors while developing wellness incentives if employees receive coverage through a public or private exchange.
Certain populations could lose out
Bryce Williams, the president and CEO of Extend Health, Inc., which operates the nation's largest private exchange recently acquired by Towers Watson, believes that the most likely demographic to move employees into public exchanges would be small employers with 500 or fewer employees. Employers in this situation would be more likely to stop providing or lessen wellness services to workers than those entering private exchanges, he says.
In general, small employers don't have data to show them the best practices in wellness programs, explains Dave Ratcliffe, a principal at Buck Consulting. This could remain the case for small employers whose workers enter the public marketplaces. Ratcliffe adds that the more employers measure their initiatives, the more investment they make into wellness.
In the retail industry, where part-time workers outnumber full-time workers, some employers will reframe their total reward strategy for a post-2014 health care reform world. Some of Ratcliffe's clients in this sector are considering restructuring jobs and recalibrating total remuneration in order to attract, retain and motivate the workforce. For example, he says an employer may limit part-time workers to clock fewer than 30 hours each week, while rewarding top talent with over 30 hours of scheduled work so they can receive the best health benefits as defined under PPACA. While such a workforce restructuring may require more part-time employees who work under 30 hours per week, this framework could be a motivational carrot to drive talent.
Instead of developing wellness programs exclusively to drive down the health cost curve, employers will use wellness to improve population health and the overall productivity.
"Even if your employees are getting coverage through the exchange now, you want to make sure that they are healthy because a healthier employee is a more productive employee," says Julie Stich, research director at the International Foundation of Employee Benefit Plans.
Williams adds that large employers could leverage any savings they absorb through an exchange setup by reinvesting them into employees, especially into their wellness component.
Giving up a global edge?
According to a recent report from Buck Consultants, 87% of global employers recognize managing employee health as their responsibility in 2012, up from 75% in 2010. Further, 49% of multinational employers now have global health promotion strategies, up from 34% in 2004.
Based on these results, employers believe they need a healthy and productive workforce to have an edge in a global economy.
"If you look globally, the universal responses from all of the countries that productivity and reducing presenteeism was the No. 1 goal for their wellness program, [whereas] for U.S. companies, the No. 1 goal is reducing health care costs," Ratcliffe says. For most employers outside the U.S., employees receive coverage from a government-sponsored system, yet they continue to view wellness initiatives as paramount to driving a profit.
Further, the 2014 reinsurance tax (which could increase employers' health insurance costs by 1-2%), a looming 2018 excise tax, mandated benefits and auto-enrollment could all cause employers to consider shifting cost downward and investing more into wellness. In recent years, plan sponsors have managed a 5% trend rate by predominantly cutting benefits or cost-shifting. "From an attraction and retention standpoint, how much more can we afford to continue to cut benefits? So we're left with wellness to manage costs instead of shifting costs," says Ratcliffe.
In the new health care reform environment, Ratcliffe believes incentives and disincentives will play an even larger role in motivating employees to participate and succeed in wellness. PPACA permits an increase of allowable incentive dollars from 20% to 30%, and more employers are using outcomes-based incentives to drive results.
Overall, the U.S. spends roughly 18% of their total GDP on health care, while the rest of the world spends 9.5% on average. However the U.S.'s average rate of obesity is nearly double the rest of the world's (28% compared to 15%), according to 2012 OECD health data.
"Regardless of health care reform, we're not going to be able to compete in the future without making a change," says Ratcliffe.
Vendor relationships also will morph
The private exchange market, whether insured or self-funded, will function more like a group exchange, where the employer contracts with the exchange instead of sending people individually to a public exchange. For these private exchanges, "employers are not losing access to that data because they are still in a group world in 2014," Ratcliffe explains.
Public exchanges may tell a different story. Employers won't get data for people sent to public exchanges, but Ratcliffe doesn't expect many employers will go this route initially in 2014. Farther down the road when there's a viable individual market similar to Medicare, vendor relationships may change.
Employers' relationships with health vendors, in addition to how they measure and run wellness programs, are sure to change in coming years as employers consider private and public exchanges as options to provide insurance coverage to workers. It remains to be seen how exchanges will change wellness initiatives, but it's clear that wellness programs will always be a business imperative to keep workers healthy, productive and satisfied with their employer.
Many workers aren’t ready for health care reform
Original article https://www.kansascity.com
By Diane Stafford
National health care reform and cost-cutting by employers is changing the way many workers get health insurance, but a majority of employees may not understand what’s ahead.
The Aflac WorkForces Report, the insurer’s third annual employee benefits study, polled 5,299 employees across the country and found that three-fourths said they had never heard the phrase “consumer-driven health care.”
That’s a problem. Consumer-driven health care is the direction the nation is moving. It’s the underlying concept that requires individuals to take more control over their health care spending.
“It may be referred to as ‘consumer-driven health care,’ but in actuality, consumers aren't the ones driving these changes, so it’s no surprise that many feel unprepared,” said Audrey Boone Tillman, executive vice president of corporate services at Aflac.
There’s another problem. The survey found that more than half of the workers polled said they preferred not to have greater control over their health insurance options. Fifty-four percent said they don’t have the time or knowledge to manage the responsibility.
How will workers learn to navigate the world of health care and insurance choices? Seventy-five percent said they expect their employers to educate them about the details of reform.
There’s another problem. Only 13 percent of the 1,884 “benefits decision-makers” in organizations reached in a companion poll said they thought educating employees about health care reform is “important” to their organizations.
At least most employees realize they’re not ready. About half said they fear they will leave their families less protected if they make poor insurance plan choices.
The poll, released Wednesday, emphasized the education challenges as employers shift away from their health care benefits.
One-third of the employees polled said they weren’t knowledgeable about health savings accounts, three-fourths said they weren’t knowledgeable about the impending federal or state health insurance exchanges, half said they weren’t knowledgeable about health reimbursement accounts and one-fourth said they weren’t knowledgeable about flexible spending accounts.
All of those are benefits options for employers to subsidize employee health care in different ways or exit health benefits entirely.
“It’s time for consumers to face reality,” Tillman said. “The responsibility lies in the hands of consumers to educate themselves.”
Survey finds majority of employees want customizable benefits
Original article: https://ebn.benefitnews.com
By Tristan Lejeune
As employers increasingly cost-shift benefits, an inevitable consequence is employees wanting a larger say in how their benefit dollars are spent - making tailored and personalized benefit packages another step in the evolution of the consumer-driven paradigm.
"Once you get into the situation where employees now are all of a sudden consumers and [they]'re bearing a fair amount of the cost, with that comes a desire to be able to make a decision," says Mike Fish, vice president of voluntary benefits with The Hartford.
In a December 2012 survey of nearly 1,500 U.S. workers by TNS Omnibus, 86% say it is important to be able to customize all of their benefits to fit their individual lifestyle. Seventy-six percent of those surveyed by TNS Omnibus say it's important for them to design their own disability insurance instead of one-size-fits-all coverage chosen by an employer, and 82% would likely sign up for a disability plan that allows them the chance to choose the size of their payments.
Women and younger workers were particularly likely to favor customizable benefits. Only half of men, but 56% of women, agree that it is extremely or very important to be able to customize benefit choices to fit their lifestyle. Americans in their 40s are more likely to value the option than older workers, and millenials are more likely than any older group to say personalization is important.
"Consumers today can customize everything - from music and TV to clothing and cars, and our recent survey shows they want to customize their benefits, too," Fish says.
Five tips for saving on prescription drugs
Original article https://www.benefitspro.com
By Kathryn Mayer
No two pharmacies are alike.
According to an analysis by Consumer Reports, prescription drugs vary widely in price depending on where you shop. Failing to comparison shop could result in overpaying by as much as $100 a month or even more, depending on the drug.
The consumer group says shoppers need to compare prices. Here are five other tips on how to save money on prescriptions, according to Consumer Reports.
Request the lowest price. Consumer Reports analysis reveals shoppers weren’t always given the best, lowest price. Make sure you ask.
Go generic. Generics are copies of brand-name medications whose patents have expired. The Food and Drug Administration requires generics contain the same active ingredients in the same strength as the brands they copy. In addition, a generic must be “bioequivalent” to its corresponding brand, meaning that it delivers the same amount of active ingredients into a person’s bloodstream in the same amount of time as the original brand.
Leave the city. Some grocery store and independent drugstores had higher prices in urban areas than rural areas, according to Consumer Reports. For example, CR shoppers priced a 30-day supply of generic Actos at a pharmacy in Raleigh, N.C., for $203, while another pharmacy in a rural area of the state sold it for just $37.
Get a refill for 90 days, not 30 days. Most pharmacies offer discounts on a three-month supply.
Look for additional discounts. All chain and big-box drugstores now offer discount generic-drug programs, with some selling hundreds of generic drugs for $4 a month or $10 for a three-month supply. Just make sure your drug is on the list. Offers vary and check the fine print.
Supreme Court Issues Decision in U.S. Airways vs. McCutchen
Source: https://ebn.benefitnews.com
By Andrea Davis
The Supreme Court ruled 5-4 last week that James McCutchen, a U.S. Airways, Inc., employee does not have to pay his health plan back all of the money he recovered following a car accident.
The case raised the issue of whether a benefit plan administrator is entitled to full reimbursement for payments made to a plan participant injured in an accident where the participant sues and recovers damages from a third party.
According to the decision, the health plan has a right to be reimbursed, but McCutchen should be able to charge his health plan for part of his lawyers’ fees.
“The Court basically said two things: the plan is a contract between the employer-plan sponsor and the employees and, pursuant to that contract, if the plan says ‘we’re going to recover, dollar for dollar, what we paid you as soon as you recover, regardless of the circumstances,’ that should be enforced,” says Myron Rumeld, a lawyer with Proskauer. “That’s the broad proposition the employer community is taking from the case.”
Secondly, and more specific to this particular case, “the majority of the justices said ‘look, in this case, we don’t find the plan language so clear as to whether it was intended to mean a recovery before taking into account the attorneys’ fees that were spent, or after,’” says Rumeld. “… in this particular case [the justices said] ‘we’re going to limit the reimbursements to take into account the fact the plan should pay a share of the attorneys’ fees that were spent to generate the recovery. That’s called the common fund doctrine.”
Rumeld believes the decision is favorable for plan sponsors for two reasons. “The simple reason is it creates more certainty. It tells employers that if you draft your plans a certain way and you make them clear enough, you don’t have to worry you won’t get your own terms enforced … there’s certainty in knowledge. You can draft the plan document and know it’s going to be enforced,” he says. “It also means that if you want to have the ability to recover dollar for dollar what you paid, you’re going to have the ability to do that if you draft it into the plan language.”
The Exchanges Really will Open Oct. 1st
Source: https://www.benefitspro.com
By Allison Bell
Photo: United States Mission Geneva / Wikimedia Commons / CC-BY-2.0
U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius on Friday assured yet another congressional panel that the Patient Protection and Affordable Care Act exchanges will be opening on schedule.
"We are moving ahead," Sebelius said at a House Energy and Commerce health subcommittee hearing on the HHS fiscal year 2014 budget request. "We are definitely going to be open for open enrollment starting Oct. 1 of 2013."
Federal fiscal year 2014 will start Oct. 1.
Sebelius has given similar assurances about progress at the HHS PPACA exchange development program at HHS budget hearings organized by the Senate Finance Committee's Health, Education, Labor and Pensions (HELP) Subcommittee and at the House Ways and Means Committee.
PPACA calls for HHS to work with state regulators to start exchanges, or health insurance supermarkets for individuals and small groups.
Senate Finance Committee Chairman Max Baucus, D-Mont., suggested at the HELP hearing Wednesday that it looks as if the exchange program may be headed for a "train wreck."
Congress has provided only $1 billion of the $10 billion that analysts originally said HHS would need to set up the exchange program, Sebelius said.
"We've judiciously used those resources," and efforts to set up the "Hub," the data center and call center to be at the heart of the exchange system, are going well, Sebelius said.
HHS will transfer money from prevention programs to fund exchange education and enrollment efforts, Sebelius said.
Rep. Frank Pallone Jr., D-N.J., said Sebelius should speak more frankly about the funding obstacles that Republicans have put in the way of PPACA implementation.
"They can't come back and criticize if the outreach doesn't occur if they're not funding it," Pallone said.
Republicans on the subcommittee asked whether Sebelius really has to use prevention fund money to pay for PPACA exchange outreach programs.
Rep. Michael Burgess, R-Texas, a medical doctor, asked Sebelius about the HHS decision to abruptly suspend enrollment in the Pre-existing Condition Insurance Plan (PCIP) program, a health insurance program for uninsured people with health problems that make buying medically underwritten coverage difficult.
He referred to a woman with lymphoma who said she learned HHS had shut down the PCIP program the day before she had been about to submit her application.
"Is it Obamacare or Obamadon'tcare?" Burgess asked. "Rather than spending [prevention fund money] on advertising for a program that may not even work on Oct. 1, or Jan. 1, why should we not transfer money from that fund to actually help the people that you promised to help -- the people with pre-existing conditions?"
Sebelius said Americans like the woman with lymphoma will benefit greatly starting Jan. 1, 2014, because, after that date, "no American will ever again be locked out of a health program because of a pre-existing condition."
PCIP was always supposed to be a temporary program, not a permanent solution, and it would not exist if the Republicans had succeeded with their many efforts to repeal PPACA, Sebelius said.
At another point, an exchange between Sebelius and Rep. Joe Pitts, R-Pa., the chairman of the health subcommittee, hinted at the problems that even members of Congress and their staffers may be having with keeping up with PPACA implementation details.
Pitts asked why the PPACA exchanges would not give small businesses a choice of health plans in 2014.
Sebelius had to explain that HHS has decided to let the Small Business Health Options Program (SHOP) small-group exchanges put off giving employers a chance to offer employees a multi-carrier coverage option.
Each SHOP exchange will still offer the employers themselves a chance to choose from a menu that includes plans from all of the carriers that have agreed to sell plans through that exchange, Sebelius said.
Top Dem Sees 'train wreck' for PPACA
Source: https://www.lifehealthpro.com
By Ricardo Alonso-Zaldivar
A senior Democratic senator who helped write the Patient Protection and Affordable Care Act (PPACA) stunned administration officials last Wednesday, saying openly he thinks it's headed for a "train wreck" because of bumbling implementation.
"I just see a huge train wreck coming down," Senate Finance Committee Chairman Max Baucus, D-Mont., told Obama's health care chief during a routine budget hearing that suddenly turned tense.
Baucus is the first top Democrat to publicly voice fears about the rollout of the new health care law, designed to bring coverage to some 30 million uninsured Americans through a mix of government programs and tax credits for private insurance that start next year. Polls show the public remains confused by the complexity of the law, and even many uninsured people are skeptical that they will be helped.
A six-term Democrat, Baucus expects to face a tough re-election in 2014. He's still trying to recover from approval ratings that nosedived amid displeasure with the health care law in his home state.
Normally low-key and supportive, Baucus challenged Health and Human Services Secretary Kathleen Sebelius at Wednesday's hearing.
He said he's "very concerned" that new health insurance exchanges for consumers and small businesses will not open on time in every state, and that if they do, they might just flop because residents don't have the information they need to make choices.
"The administration's public information campaign on the benefits of the Affordable Care Act deserves a failing grade," he told Sebelius. "You need to fix this."
Responding to Baucus, Sebelius pointedly noted that Republicans in Congress last year blocked funding for carrying out the health care law, and she had to resort to raiding other departmental funds that were legally available to her.
The administration is asking for $1.5 billion in next year's budget, and Republicans don't seem willing to grant that, either.
At one point, as Sebelius tried to answer Baucus' demand for facts and figures, the senator admonished: "You haven't given me any data; you just give me concepts, frankly."
"I don't know what he's looking at," Sebelius told reporters following her out of the room after Baucus adjourned the hearing. "But we are on track to fully implement marketplaces in Jan. 2014, and to be open for open enrollment."
That open-enrollment launch is only months away, Oct. 1. It's when millions of middle-class consumers who don't get coverage through their jobs will be able to start shopping for a private plan in the new exchanges. They'll also be able to find out if they qualify for tax credits that will lower their premiums. At the same time, low-income people will be steered to government programs, mainly an expanded version of Medicaid.
But half the states, most of them Republican-led, have refused to cooperate in setting up the infrastructure of Obama's law. Others, like Montana, are politically divided. The overhaul law provided that the federal government would step in and run the new markets if a state failed to do so. Envisioned as a fallback, federal control now looks like it will be the norm in about half the country, straining resources.
Administration officials say their public outreach campaign will begin in earnest over the summer. They question the wisdom of bombarding consumers with insurance details now, when there's not yet anything to sign up for. Baucus said in his state, that vacuum has mostly been filled by misinformation.
While some other Democratic lawmakers have privately voiced similar frustrations, most have publicly lauded Sebelius for her department's work. Democrats from reliably blue states have less to worry about, since their governors and legislatures have embraced the law and are working to make it succeed.
In Montana, the legislature rejected Democratic Gov. Steve Bullock's bid for a state-run insurance exchange. The governor is now trying to find a compromise on expanding Medicaid.
Republicans are certain to remind Montana voters next year that Baucus' fingerprints are all over the health care law, even though a similar strategy failed to knock off fellow Democratic Sen. Jon Tester last year.
After the hearing, Baucus' office clarified that he still thinks PPACA is a good law, but he questions how it is being carried out.
Sebelius Says We Have Built the Exchange Hub
Source: https://www.lifehealthpro.com
By Allison Bell
Photo: United States Mission Geneva / Wikimedia Commons / CC-BY-2.0
U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius told members of the House Ways and Means Committee that the exchanges are coming.
"We are confident we will launch the health insurance exchanges," Sebelius testified today at a hearing the committee organized on the Obama administration's HHS budget proposal for fiscal year 2014. "We will be open for open enrollment Oct. 1."
The data hub to be at the heart of the exchange system is "basically completed and paid for," Sebelius said.
The Obama administration has asked for $78 billion in discretionary budget authority for HHS for 2014. HHS could be responsible for a total of $967 billion in outlays over the next 10 years.
Much of the spending would be on programs related to the Patient Protection and Affordable Care Act of 2010 (PPACA). PPACA calls for HHS to work with the states and the District of Columbia to set up a system of exchanges, or Web-based health insurance markets, in all 50 states and the District of Columbia by Oct. 1, with the first coverage sold to take effect Jan. 1, 2014.
In response to questions about some states' resistance to participating in the exchange program, Sebelius said that 31 states and the District of Columbia are either setting up their own exchanges or working with HHS to set up "partnership" exchanges.
In some other states, officials are saying that their states might take over exchange services once HHS sets up the exchanges, Sebelius said.
Rep. Charles Rangel, D-New York, asked about the possibility that congressional resistance to funding the exchange program could interfere with efforts to get the exchanges started on time.
"It would be helpful" if Congress responds positively to HHS requests for funding, Sebelius said.
But "I think we are definitely on track to implement the law as it is anticipated," Sebelius said.
In response to reports that employers are worried about what PPACA will do to insured and self-insured group health plans, Sebelius said she is meeting regularly with employers to allay the concerns and hopes that, once the exchanges are open, employers will like them.
For some employers that are now unable to find or afford coverage, the new PPACA system might increase their ability to offer health benefits, Sebelius said.