Ten Ways That the House American Health Care Act Could Affect Women
The American Health Care Act (AHCA) will bring a lot of changes to many people and their healthcare. Find out how women's healthcare will be affected by the new legislation in this great article by Kaiser Family Foundation.
Women have much at stake as the nation debates the future of coverage in the United States. Because the Affordable Care Act (ACA) made fundamental changes to women’s health coverage and benefits, changes to the law and the regulations that stem from it would have a direct impact on millions of women with private insurance and Medicaid. On May 4, 2017, the House of Representatives passed the American Health Care Act (AHCA), to repeal and replace elements of the ACA (Appendix Table 1). It would eliminate individual and employer insurance mandates, effectively end the ACA Medicaid expansion, cap federal funds for the Medicaid program, make major changes to the federal tax subsidies available to assist individuals who purchase private insurance, and ban federal Medicaid funds from going to Planned Parenthood. It would also allow states to waive the ACA’s Essential Health Benefits requirements and permit health status as a factor in insurance rating for individuals who do not maintain continuous coverage with the goal of reducing insurance costs.1 The Senate will now take up legislation to repeal and replace the ACA and may consider several elements that the House has approved in the AHCA. This brief reviews the implications of the AHCA for women’s access to care and coverage.
ACA’s Impact on Coverage and Access for Women
Since the ACA’s passage, the uninsured rate has declined to record low levels. Between 2013 and 2015, the uninsured rate among women ages 19 to 64 fell from 17% to 11% (Figure 1). This drop was due in large part to the Medicaid expansion that was adopted by 31 states and DC, and the availability of federal tax credits to subsidize premium costs for many low and modest-income women and men. In addition to coverage improvements, fewer women face affordability barriers since the ACA was enacted. Women have consistently been more likely than men to report that they delay or go without needed care because of costs. The ACA addressed some of these financial barriers by providing subsidies for premiums and cost sharing, eliminating out of pocket costs for preventive services, lifting the lifetime limits on expenses insurance will cover, and requiring minimum levels of coverage for ten Essential Health Benefit categories. Since its passage, the share of women who report that they delayed or went without care due to costs has fallen (Figure 2). This drop has been particularly marked among low-income women, although costs continue to be a greater challenge for this group as well.
1. MEDICAID ELIGIBILITY: EXPANSION AND WORK REQUIREMENTS
Medicaid has been the foundation of coverage gains under the ACA. Eliminating federal funds for the ACA’s Medicaid expansion could leave many of the nation’s poorest women without a pathway to coverage.
Women comprise the majority of Medicaid beneficiaries—before the passage of the ACA and today. Prior to the ACA, compared to men, women were more likely to qualify for Medicaid because of their lower incomes and because they were more likely to meet one of the program’s eligibility categories: pregnancy, parent of a dependent child, over 65, or disability. The ACA eliminates the program’s “categorical” requirements, allowing states to extend Medicaid eligibility to all individuals based solely on income. In the 31 states and DC that have chosen to expand Medicaid, individuals with household incomes up to 138% of the Federal Poverty Level (FPL) qualify, and the federal government finances 95% of the costs.2
It is estimated that by 2015, 11 million adults had gained coverage as a result of the ACA’s Medicaid expansion. This opened the door for continuous coverage to pregnant women who often became ineligible for coverage 60 days after the birth of their baby and had no other pathway to coverage as new mothers. The Medicaid expansion has also helped women who do not have children gain access to coverage, since before the expansion they were ineligible for coverage in most states. If passed, the AHCA bill would withdraw the enhanced federal funds for the Medicaid expansion except for beneficiaries enrolled as of December 31, 2019 who do not have a break in eligibility for more than 1 month. This loss of federal financing would leave states without the funds needed to continue supporting this expansion, potentially forcing some states to roll back eligibility for parents to the very low levels that were in place before the ACA (Figure 3). For example, a single mother of two living in Louisiana or Indiana would not have qualified for Medicaid if her income exceeded $4,687. The Congressional Budget Office (CBO) estimates that, under the House AHCA bill, some states that have already expanded their Medicaid programs would not continue that coverage (some states might also begin to reduce coverage prior to 2020), and that no new states will adopt the expansion.
The AHCA bill would also amend the federal Medicaid statute to allow states to require some beneficiaries, including parents of children 6 and older and adults without disabilities, to show proof of employment. States would have flexibility to design the details of the work requirement within federal guidelines and would receive additional federal support to help cover the administrative costs of this change.
2. CAPPING FEDERAL MEDICAID SPENDING
Medicaid provides health coverage to nearly one in five women in the U.S. Capping the program would limit the federal dollars that states would receive for a program that pays for half of births, three-quarters of all public family planning, and provides supplemental coverage for nearly 1 in 5 senior women on Medicare.
Since its inception in 1965, Medicaid has evolved to become a leading source of coverage for low-income women of all ages (Figure 4). The program provides health coverage to one in five women of reproductive age and one in four Latinas and African American women. Over the years, the program has also expanded to be the largest payor of maternity care and publicly-funded family planning in the U.S.
Medicaid is financed by a combination of federal and state dollars. For most beneficiaries, the federal government pays a percentage of costs, ranging between 50-75% depending on the state. Beginning in 2020, the AHCA would convert federal Medicaid funding from an open-ended matching system to an annual fixed amount of federal dollars. States could choose a “block grant” (for payment of services for children under 18 and poor parents of dependent children) or a “per capita cap” approach for five enrollment groups (the elderly, individuals with disabilities, children, newly eligible adults, and all other adults). While a capped approach would reduce federal spending, it would also shift more responsibility to states to pay more of their own dollars if they want to sustain the program at current levels.
While fixed federal financing would affect all individuals insured by Medicaid, one area that is particularly important for women is the program’s coverage of family planning services. Currently, the federal government requires coverage of family planning services and supplies and pays for 90% of the cost of these services, a higher match than for all other services.3 This higher federal payment rate provides states with an incentive to cover the full range of contraceptive methods. Under a per capita cap structure, states will still be required to cover family planning services, but there will no longer be an enhanced federal matching rate for family planning services provided to most beneficiaries. As a result, there may be less up-front financial incentive for states to cover the more expensive methods of contraception like IUDs, even though they are highly effective at preventing unintended pregnancies. Should states select a block grant option, family planning services would no longer be a mandatory benefit for non-disabled women on Medicaid.
If a state chooses a per capita cap structure, the AHCA would not change the financing structure for stand-alone family planning expansions that are currently in place in over half the states. These limited scope programs have allowed states to extend Medicaid coverage for family planning services to low-income women and men who do not have other family planning coverage. Since the AHCA’s per capita cap does not apply to these programs, states could continue to receive a 90% federal matching rate for them. These programs may become increasingly important to women because the CBO predicts that under this bill the number of uninsured would rise by 24 million over the next 10 years, and these Medicaid family planning programs are often an important source of reproductive care for uninsured women.
Both capped financing approaches would limit states’ ability to respond to rising costs, new and costly treatments, or public health emergencies such as the opioid epidemic or Zika. States may decide to make programmatic cuts such as cutting provider payments, particularly when facing fiscal pressures. For example, on average, Medicaid pays ob-gyns 76% of the Medicare rate4 and a smaller share of the commercial rate. If states were to make further cuts to provider payments or to plans, the pool of participating providers could shrink in response to reduced rates, which could make it harder for many women enrollees to find a participating ob-gyn or cause delays in scheduling appointments.
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3. MEDICAID AND PLANNED PARENTHOOD
Planned Parenthood provides reproductive health services for many low-income women across the nation. Cutting off federal Medicaid payments to the organization could limit the availability of the most effective contraceptives, as well as STI and cancer screenings for many women on Medicaid.
Many low–income women obtain reproductive care at safety-net clinics that receive public funds to pay for the care they provide. The network includes a range of clinics that provide a broad range of primary care services, such as community health centers (CHCs) and health departments as well as specialized clinics that focus on providing family planning services. The largest organization of specialized family planning clinics is Planned Parenthood, which receives federal support through reimbursement for care delivered to women and men on Medicaid, as well as grant funds from the federal Title X family planning program. Despite comprising only 6% of the safety-net clinics that provided subsidized family planning services in 2015, Planned Parenthood clinics served 32% of women (nearly 2 million women) seeking contraceptive care at these centers (Figure 5).
Should it become law, the AHCA would prohibit federal Medicaid payments to Planned Parenthood for one year, even though federal law already prohibits federal dollars from being used to pay for abortions other than those to terminate pregnancies that are a result of rape, incest or a threat to the pregnant woman’s life. The AHCA bill would provide additional funds to CHCs, presumably to compensate for loss of a major provider of care to women, but there are no specifics in the bill that would require the health centers to use these funds to provide services to women. There is also concern that CHCs do not currently have the capacity to fill the gap in care that would arise if Planned Parenthood were no longer a participating Medicaid provider.5 Not all CHCs provide the same range of services as Planned Parenthood, and care at CHCs could be more costly than that provided by specialized family planning providers like Planned Parenthood.6 The CBO’s March 13, 2017 analysis of the AHCA stated that cutting off Medicaid payments to Planned Parenthood for one year would result in loss of access to services in some low-income communities because it is the only public provider in some regions. The report also stated that the policy would result in thousands of additional unintended pregnancies that would be financed by Medicaid.7
4. ABORTION COVERAGE
Private and public coverage of abortion is currently limited in many states through the federal Hyde Amendment and state laws. The AHCA would go further than the ACA to restrict the availability of abortion coverage through private insurance policies.
Since 1976, the federal Hyde Amendment has limited the use of federal funds for abortion only to cases when the pregnancy is a result of rape or incest or is a threat to the woman’s life. Since its first passage over 40 years ago, the amendment has dramatically limited coverage of abortion under Medicaid, as well as other federal programs.8
In private insurance, the ACA explicitly bars abortion from being included as part of the Essential Health Benefit package defined by states and allows states to ban all plans in their Marketplaces from covering abortion. States can also ban abortion coverage in all state regulated private plans.9 As of March 2017, 25 states have laws limiting or banning coverage of abortion in ACA Marketplaces, and of these, 10 states ban abortion coverage in both the Marketplaces and in the private insurance market.
To ensure no federal dollars are used to subsidize abortion coverage, the AHCA bill would no longer make this a state option, rather it would ban abortion coverage in all Marketplace plans as well as prohibit the use of federal tax credits to purchase any plans that cover abortion that are available outside the Marketplace. The bill would limit employer coverage of abortion by disqualifying small employers from receiving tax credits if their plans cover abortion beyond Hyde limitations.
This provision would be in direct conflict with existing state policies in California and New York that require plans to cover abortion. Furthermore, no off market plans in these states would be able to enroll individuals who receive tax credits. Therefore, if enacted, the AHCA’s abortion coverage ban would likely face legal challenges.
5. TAX CREDITS, PREMIUM AND COST-SHARING SUBSIDIES
The AHCA would set the level of tax credit assistance using primarily age, and would repeal the ACA’s cost-sharing protections for low-income individuals. Because women have a lower income than men at all ages, this approach could place women at a disadvantage compared to men.
Women comprise more than half (54%) of ACA marketplace enrollees in the 34 states that use the federally facilitated marketplace, healthcare.gov. Approximately eight in ten (81%) Marketplace beneficiaries receive a premium tax credit, which offsets premium costs and makes them more affordable. In 2015, more than one-third (37%) of women who purchased insurance on their own were low-income ($23,540 for a single person) compared to 31% of men. 10 The current subsidy structure under the ACA provides higher levels of subsidies to those who are low-income, older, and who live in areas with more expensive coverage.
The AHCA, in contrast, would take a very different approach and reduce the amount that the federal government would contribute to subsidies with the goal of reducing federal spending. The AHCA would provide a flat tax credit based on age only up until an income of $75,000 for a single individual, and phases out at higher incomes. This would result in a large decrease in tax subsidies to older Marketplace enrollees compared to what is available to them today.
The AHCA would set aside additional federal funds to assist older enrollees as well as services for pregnant women and newborns and individuals with mental health and substance use disorders, but how those funds would be allocated is still to be determined. Nonetheless, under the AHCA’s tax credit methodology, people with lower incomes would receive significantly less than they do under current law. A higher share of women is poor or low-income than men, because women are more likely than men to head single parent households, work part-year or part-time, are paid less than men for similar work, and take breaks from the workforce to stay home and care for children and aging parents. As a result, this approach could disproportionately disadvantage women. In addition, the AHCA proposes to repeal the cost-sharing subsides available today under the ACA that provide additional protection from the high costs of deductibles, cost-sharing, and co-insurance to individuals with incomes below 250% of the federal poverty level.
6. INSURANCE REFORMS
The ACA banned many of the long-standing discriminatory practices in the individual insurance market that translated into higher cost burdens for women. While the AHCA maintains the gender-rating ban and the dependent coverage expansion, it could allow states to permit insurers to charge higher premiums to individuals with health problems if they have a lapse in coverage.
DEPENDENT COVERAGE
A popular element of the ACA is the provision that requires private health insurers that offer dependent coverage to children to allow young adults up to age 26 to remain on their parents’ insurance plans. This provision was the first in the ACA to take effect, and it increased the availability of insurance to an age group that historically had a high uninsured rate (Table 1). In 2015, 39% of women ages 19 to 25 reported that they were covered as a dependent.
GENDER RATING
Prior to the ACA, non-group insurers in many states charged women who purchase individual insurance more than men for the same coverage, a practice called gender rating.12 Yet, plans sold on the individual market often did not cover many important services for women, such as maternity care, mental health services, and prescription drugs.13 An estimated 6.5 million women purchased coverage on the individual insurance market in 2011, and many of these women paid higher rates than men. Prior to the ACA, most of the women in this market were of reproductive age, working, and had incomes below 250% FPL.14 The ACA bans gender rating and the AHCA would not change this.
PRE-EXISTING CONDITIONS
One of the most popular provisions of the ACA has been the ban on pre-existing condition exclusions. In the years before the ACA was passed, insurance companies often denied or would not renew coverage to individuals with a “preexisting condition,” which included several conditions common among women such as pregnancy, breast cancer, or a prior C-section. The AHCA would not re-instate this practice, but individuals who do not maintain continuous coverage would be charged a penalty when they try to obtain health insurance after having a coverage gap. The penalty could be in the form of higher premium rates (30%) for one year. Alternatively, states could obtain a waiver to allow insurers to again engage in medical underwriting for one year, charging people with health problems higher rates. This would have the effect of raising premiums for people with pre-existing conditions such as pregnancy, prior C-section, or clinical depression.
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7. ESSENTIAL HEALTH BENEFITS
The ACA instituted new rules that require all plans in the individual market as well as Medicaid expansion programs to cover ten categories of benefits. Of particular importance to women has been the inclusion of maternity care, preventive services, and mental health.
The ACA requires all Marketplace plans and Medicaid expansion programs to cover ten categories of “essential health benefits” (EHB). Each state chooses a benchmark benefit plan, which sets the floor for services that plans in that state must cover within each EHB category.15
The AHCA would allow states to apply for a waiver to define their own EHBs beginning in 2020. Waivers would be automatically approved unless the HHS Secretary issues a denial within 60 days of submission. This means states could choose to exclude mental health or maternity care (see pregnancy-related care section below) from their EHB requirements. While the idea of choice sounds appealing to some, it is antithetical to how insurance operates ─ by spreading the costs and risks across the pool of insured individuals. Plans that include a broader range of benefits would be considerably more expensive than they are today. In addition to state-level waivers, the AHCA bill would rescind the EHB requirement for Medicaid expansion programs, meaning that beneficiaries in this group would not be entitled to coverage for all ten categories. Existing Medicaid rules require states to cover some of the categories, such as hospitalization and maternity and newborn care, but others such as substance abuse treatment and prescription drugs are optional and offered at state discretion.Prior to the ACA, there were few federal requirements on what private plans in the individual market had to cover. The ACA established a floor for benefits that individual market plans must cover with the goal of reducing variation and adverse selection by standardizing “meaningful coverage.” This is particularly important for women, as they are the exclusive users of maternity care and more frequent users of services in some other EHB categories, such as prescription drugs and mental health. Mental health services in particular were routinely excluded in individual plans prior to the ACA. Depression, anxiety, and eating disorders are all more common among women than men.
8. PREVENTIVE SERVICES
Currently, all private plans, Medicaid expansion programs, and Medicare must cover recommended preventive services without cost sharing. Important services for women include: breast and cervical cancer screening, osteoporosis screening, pregnancy related services, well woman visits, and contraception.
In addition to EHBs, the ACA included a related requirement that all private plans cover federally-recommended preventive services without charging cost-sharing. In contrast to EHBs, which apply to individually purchased plans and Medicaid expansion only, the preventive services requirement applies to all forms of private insurance, including employer-sponsored and individual market plans. Prior to the ACA, the only federal–level requirements that applied to group plans were for coverage of a minimum length of stay after a delivery, availability of reconstructive surgery following a mastectomy, and parity for mental health services. The preventive services coverage requirement also applies to the Medicaid expansion and Medicare programs. This means that most adults with some form of private or public insurance now have coverage without cost-sharing for all of the services recommended by the U.S. Preventive Services Task Force (USPSTF), immunizations recommended by the federal Advisory Committee on Immunization Practices (ACIP), and services for women recommended by the Health Resources and Services Administration.16
Among the slate of services covered, many are exclusively for women or address conditions that have a disproportionate impact on women (Figure 6). These services address some of the most common conditions for women, including breast cancer, cardiovascular disease, and obesity. For older women, the preventive services policy means that Medicare now covers the full cost of mammograms and bone density screenings, which were previously subject to 20% co-insurance before passage of the ACA.
The AHCA would maintain preventive services requirements for private plans, but would repeal the requirements for the Medicaid expansion population. Preventive services for adults are covered at state option for other Medicaid beneficiaries. States could opt to roll back coverage of preventive services for this group.
9. CONTRACEPTIVE COVERAGE
Today, the majority of women with private insurance have no cost contraceptive coverage. This preventive benefit has reduced women’s out-of-pocket spending on birth control and made the most effective, but often costly, contraceptive methods affordable for most insured women. This provision could be eliminated or modified through regulatory changes without the need for Congressional action.
Current law requires that most private plans include coverage of all FDA-approved contraceptive methods for women at no additional cost. Research has found that the requirement has had a large impact in a short amount of time. For example, in the first two years that the policy was in effect, the share of women with any out of pocket spending on oral contraceptives fell sharply to just 3.0% of women with employer-sponsored insurance (Figure 7).17 Similar effects have been documented for other contraceptives, including IUDs.18
The AHCA bill does not specifically address the contraceptive coverage requirement. However, President Trump and Secretary Price have expressed support for advancing “religious freedom,”19 and this provision has been at the heart of two cases that have reached the Supreme Court where employers have claimed that the requirement violates their religious beliefs. The contraceptive coverage requirement was implemented through a series of agency regulations that included contraception in the package of women’s preventive services, defined the religious exemption and accommodation available to houses of worship and faith-based nonprofits respectively, and clarified that plans must cover 18 contraceptive methods. Since these requirements are in regulations, the Trump Administration can issue new regulations and guidance to permit employers and insurers to cover fewer methods, or to exempt more employers with religious objections without the need for congressional action.20President Trump’s Executive Order Promoting Free Speech and Religious Liberty specifically calls on the Secretaries of Labor, Treasury, and Health and Human Services to amend regulations to protect conscience-based objections to the ACA’s preventive-care mandate.21 The goal of this is to exempt any employer with a religious or moral objection from the contraceptive coverage requirement, even though current regulations already relieve employers from paying for such coverage while assuring that women have coverage for contraceptives.
If the federal requirement is eliminated or scaled back, the scope of contraceptive coverage would again be shaped by employers, insurance plans, and state policy. More than half (28) of states have laws requiring plans in their states to cover contraceptives, but these are more limited than the ACA. Only five of the 28 states require coverage of the full range of contraceptives without cost sharing, but these state-level mandates do not apply to self-funded plans, which cover most insured workers.22
10. PREGNANCY-RELATED CARE
Today, pregnant and postpartum women have a greater range of protections and benefits than they did prior to the ACA. These range from mandatory maternity and newborn coverage, to no-cost prenatal screening, and breastfeeding supports. The AHCA would allow states to define the Essential Health Benefits requirements with a waiver, potentially excluding coverage for maternity care.
Before the ACA, pregnant women seeking insurance in the individual market were routinely turned away as having a pre-existing condition. Furthermore, many individual plans did not cover maternity services because it was not required in this market. Some individual plans offered separate maternity coverage as a rider which could be costly, ranging from roughly $15 to $1600 a month.23 Some plans also imposed a waiting period before the rider took effect. These discriminatory practices were limited to the individual market because coverage for maternity services has been required for decades both under Medicaid and in most employer-sponsored plans due to the Pregnancy Discrimination Act. The ACA changed this by including maternity and newborn care as part of the EHB package that must be included in individual private plans as well as under Medicaid expansion. While some states had required individual plans in their states to cover maternity services to varying degrees prior to the ACA, most did not.24 In addition, the ACA made other improvements through coverage of preventive services such as no-cost prenatal screenings and breastfeeding supports.
The AHCA would weaken some of the protections for pregnant women that are currently in place. By halting funds for Medicaid expansion, some new mothers would lose coverage once the 60-day postpartum period ends and become uninsured. Furthermore, it would permit states to waive the current federal EHB standards, potentially allowing states to remove or scale back maternity services as a required benefit. The bill would also allot funds to the Patient and State Stability Fund for pregnancy and newborn care, but there are no details on how it will be used.
Some have touted the benefits of excluding maternity coverage for those who will not need it such as men and older women as a way of giving policyholders more flexibility to choose their own coverage and purchase less expensive plans. However, this also means that the risk pool for plans that include maternity services would primarily be comprised of women who anticipate using maternity care, and would likely greatly increase costs for women who sought such coverage. Furthermore, given that nearly half of pregnancies are unintended some women would buy coverage that does not include maternity care thinking they won’t need it, only to find out their coverage falls short when they are pregnant.
Conclusion
Today, women’s health coverage levels are at an all-time high. In addition to the coverage gains in the Marketplaces and Medicaid, many of the long-standing discriminatory practices in the individual insurance market that translated into higher cost burdens for women have been banned. Minimum standards for benefits that individual plans must cover through the EHB and the preventive services requirements for all private plans have assured that most insured women have coverage for a broad range of recommended services that they need such as maternity care, mental health services, and preventive services such as mammograms, pap smears, and contraceptives. Recent polling shows that the American public values these protections, including those for poorer women (Figure 8). In addition, while the AHCA would prohibit federal Medicaid funds to Planned Parenthood for one year, 75% of Americans say they favor continued federal funding for Planned Parenthood.
If enacted, the AHCA would alter subsidies for private insurance, eliminate the Medicaid expansion, ban Medicaid funding to Planned Parenthood, place a cap on Medicaid spending, and turn EHB standards over to the states. This legislation would have considerable impact on women, particularly low-income women who rely on subsidies and those who are on Medicaid. The Senate will now take up their own debate about the future of the ACA. In addition to legislation, many of the ACA’s other provisions could be amended through federal-level administrative actions. Given the gains that women have made in access to meaningful and affordable coverage, they have much at stake in the current debate over the future of our nation’s private and public insurance programs.
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Source:
Ranji U., Salganicoff A., Sobel L., Rosenzweig C. (2017 May 8). Ten ways that the house american health care act could affect women [Web blog post]. Retrieved from address https://www.kff.org/womens-health-policy/issue-brief/ten-ways-that-the-house-american-health-care-act-could-affect-women/
Preexisting Conditions And Continuous Coverage: Key Elements Of GOP Bill
Do you suffer from a preexisting condition? Take a look at this article by Michelle Andrews from Kaiser Health News and find out how the passing of the AHCA will impact your health care.
Before he was diagnosed with head and neck cancer in 2015, Anthony Kinsey often went without health insurance. He is a contract lawyer working for staffing agencies on short-term projects in the Washington, D.C., area, and sometimes the 90-day waiting period for coverage through a staffing agency proved longer than the duration of his project, if coverage was offered at all.
When Kinsey, now 57, learned he had cancer, he was able to sign up for a plan with a $629 monthly premium because the agency he was working for offered group coverage that became effective almost immediately. The plan covered the $62,000 surgery to cut out the diseased bone and tissue on the left side of his face, as well as chemotherapy and radiation. His share of the treatment cost was $1,800.
If the American Health Care Act, which the House recently passed, becomes law, people like Kinsey who have health problems might not fare so well trying to buy insurance after a lapse.
The Republican bill would still require insurers to offer coverage to everyone, including people who have preexisting medical conditions, such as diabetes, asthma or even cancer. But it would allow states to opt out of the federal health law’s prohibition against charging sick people more than healthy ones. In those states, if people have a break in coverage of more than 63 days, insurers could charge them any price for coverage for approximately a year, effectively putting coverage out of reach for many sick people, analysts say. After a year, they would be charged a regular rate again.
Coming up with a figure for how many people have preexisting conditions that could put them at risk for facing unaffordable health insurance premiums has been the subject of debate, with estimates ranging from 133 million on the high end to 2 million on the low end.
What we know is that before the Affordable Care Act, known as Obamacare, insurers in the individual market frequently charged people more if they were sick. According to a 2009 survey of individual market insurers by America’s Health Insurance Plans, a trade group, 34 percent of coverage was offered at higher-than-standard rates, while 6 percent of those offers included waivers that excluded coverage for specific conditions.
But some health policy analysts suggest that it’s not only people who have a gap in coverage who could be affected if a state seeks the health law waiver. There could be consequences for anyone with a preexisting condition, even those who have maintained continuous insurance coverage. That’s because the bill opens the door for insurers to set rates for people based on their health. For example, those without a health condition could be offered discounted premiums.
“If you have a preexisting condition, you’re going to be put into the block of business with the sicker risk pool,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.
Requiring people to maintain continuous coverage is the Republicans’ preferred alternative to Obamacare’s individual mandate that requires people to have insurance or pay a fine. But there are many reasons people may have a gap in coverage, especially if they’re sick, say consumer advocates.
“If they’re diagnosed with cancer and going through a grueling treatment, they might move closer to their caregiver or the cancer center,” said Kirsten Sloan, vice president for policy at the American Cancer Society Cancer Action Network. “They may quit their job for that reason, or they may lose their job.”
Once people have a gap in coverage they may really be in a bind if the available coverage is unaffordable. To address this, the Republican bill requires states to set up a high-risk pool or reinsurance program or participate in a federal risk-sharing program.
State high-risk pools, which were available in 35 states before the ACA passed, have been widely criticized, however, as inadequate for people with expensive health care needs. Premiums were often extremely high, and there were frequently lifetime or annual limits on coverage. Some plans excluded coverage for as long as a year for the very conditions people needed insurance.
Still, Thomas Miller, a resident fellow at the American Enterprise Institute, says high-risk pools offer a reasonable solution for the 2 million to 4 million people in the individual market he estimates have preexisting conditions but would otherwise be medically uninsurable or offered such high-cost coverage that they couldn’t afford it. The $130 billion over nine years that the bill sets aside to use for high-risk pools or other individual market activities, along with an additional $8 billion over five years for states that get waivers from ACA community-rating requirements, “could be adequate” to meet the need, he said.
Besides, he argued, the higher rates would last for only a year.
“Once you’ve paid up, you graduate back to the regular market,” Miller said. “It’s not like being sentenced to the Gulag.”
Kinsey said he plans to keep his coverage up to date from now on, but he doesn’t think it’s fair to charge sick people higher rates even if they have a break in coverage.
“It would be problematic,” he said. “I’m not in favor of that.”
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Source:
Andrews M. (2017 May 16). Preexisting conditions and continuous coverage: key elements of GOP bill [Web blog post]. Retrieved from address https://khn.org/news/preexisting-conditions-and-continuous-coverage-key-elements-of-gop-bill/?utm_campaign=KFF-2016-The-Latest&utm_source=hs_email&utm_medium=email&utm_content=52062246&_hsenc=p2ANqtz-90h4NOm7X9KLzIv7cYUNaGbi_qAFjmLW8NHmH89fiCT1u4SVQ8G95MFvTb3ljYlm3XiY20qWwsBfqH8PKOCwaULkf-ug&_hsmi=52062246
New CBO AHCA Score Confirms What We Already Knew
The CBO has just released their final score for the revised version of the American Health Care Act (AHCA). Find how the CBO scored this revised piece of legislation and what it means for you in this article by Mark J. Mazur from Tax Policy Center
Meet the new estimate of the American Health Care Act (AHCA). It looks a lot like the old one.
On May 24, the Congressional Budget Office (CBO) released its estimate of the revised AHCA, which the House of Representatives passed on May 7. The revised AHCA allows states to opt out of ACA requirements establishing essential health benefits and permits states establishing high-risk pools to allow insurers to set premiums based on health status. The modified bill sets aside $8 billion to help subsidize these pools.
Like its predecessor, the revised AHCA has four distinct major components.
- One would cut taxes paid by high-income individuals (lower taxes on capital gains, divided, and interest income for households with annual income over $250,000) and by companies in specific industries: health insurance, medical devices, prescription drugs, and indoor tanning salons.
- The second is a grab bag of tax reductions, such as loosened rules for flexible spending accounts and health savings accounts, repeal of the tax on individuals who can afford but don’t buy adequate health coverage, and a further delay of the excise tax on high-cost health plans (the so-called “Cadillac Tax”).
- The third restructures the tax credits that subsidize health care coverage, moving from existing income-related tax credits for purchasing health insurance on the ACA Marketplaces to age-related tax credits to purchase health insurance.
- And the fourth cuts Medicaid spending reducing coverage and essentially paying for the tax cuts.
The chart below shows the tax changes (the first two major components mentioned) go almost entirely to the highest earning households, while providing little or no benefit to the bottom 80 percent of the income distribution. In fact, TPC estimates that a $37,000 average annual tax cut will go to the 1 percent of the population with the highest earnings (annual income of over $772,000). The top 0.1 percent of the income distribution would receive an annual tax cut of over $200,000 (annual income over $3.9 million). (Note that this chart shows the estimates for 2022, but incorporates the tax law changes for 2023 as the AHCA phases in some of the tax changes).
The bottom line: CBO estimates confirm the AHCA is largely a tax bill paired up with Medicaid cuts to offset the costs. And, as in the earlier version of the bill, almost all the benefits go to the highest income households in the country.
See the original article Here.
Source:
Mazur M. (2017 May 24). New CBO AHCA score confirms what we already knew [Web blog post]. Retrieved from address https://www.taxpolicycenter.org/taxvox/new-cbo-ahca-score-confirms-what-we-already-knew
The Facts on the GOP Health Care Bill
Do you know all the facts behind the American Health Care Act (AHCA)? Check out this article by Fact Check and find out about all the details behind the GOP new health care legislation.
House Republicans released their replacement plan for the Affordable Care Act on March 6. How does the GOP’s American Health Care Act differ from the ACA? We look at the major provisions of the amended version of the bill, as of May 4. (The legislation passed the House on May 4 and now goes to the Senate for consideration.)
Is there a requirement to have insurance or pay a tax?
No. For all months after Dec. 31, 2015, the bill eliminates the tax penalties that the ACA imposes on nonexempt individuals for not having health insurance, as well as employers with 50 or more full-time workers who do not offer health insurance to their employees. (To be clear, unless this bill becomes law quickly, those filing their 2016 tax returns will still be subject to the penalty.)
Are insurance companies required to offer coverage regardless of preexisting conditions?
Yes, but there’s a penalty for not having continuous coverage. Under both the ACA and the GOP bill, insurers can’t deny coverage to anyone based on health status. Under the GOP bill, they are required, however, to charge 30 percent higher premiums for one year, regardless of health status, to those entering the individual market who didn’t have continuous coverage, which is defined as a lapse of coverage of 63 days or more over the previous 12 months.
However, an amendment proposed in late April allows states to obtain a waiver that would enable insurers to charge more to people with preexisting conditions who do not maintain continuous coverage. Such policyholders could be charged higher premiums based on health status for one year. After that, provided there wasn’t another 63-day gap, the policyholder would get a new, less expensive premium that was not based on health status. This change would begin in 2019, or 2018 for those enrolling during special enrollment periods.
States with such a waiver would also have to have either a “risk mitigation program,” such as a high-risk pool, or participate in a new Federal Invisible Risk Sharing Program, as a House summary of the amendment says. Beyond those programs, another amendment to the bill would provide $8 billion in federal money over five years to financially aid those with preexisting conditions who find themselves facing higher premiums in waiver states.
For more on this waiver program, see our May 4 article, “The Preexisting Conditions Debate.”
What happens to the expansion of Medicaid?
It will be phased out.
Prior to the ACA, Medicaid was available to groups including qualified low-income families, pregnant women, children and the disabled. The ACA expanded eligibility to all individuals under age 65 who earn up to 138 percent of the federal poverty level (about $16,643 a year for an individual), but only in states that opted for the expansion. Thirty-one states and the District of Columbia have opted in to the expansion, which includes enhanced federal funding, so far. More than 11 million newly eligible adults had enrolled in Medicaid through March 2016, according to an analysis by the Kaiser Family Foundation of data from the Centers for Medicare & Medicaid Services.
Under the Republican health care plan, no new enrollment can occur under this Medicaid expansion, with enhanced federal funds, after Dec. 31, 2019. States that haven’t already opted in to the expansion by March 1, 2017, can’t get the ACA’s enhanced federal funding for the expansion-eligible population.
To be clear, the bill doesn’t eliminate the Medicaid expansion coverage for those who are enrolled prior to 2020 in the current expansion states. But if those enrollees have a break in coverage for more than one month after Dec. 31, 2019, they won’t be able to re-enroll (unless a state wanted to cover the additional cost itself).
The Republican plan includes another notable change to Medicaid. It would cap the amount of federal funding that states can receive per Medicaid enrollee, with varying amounts for each category of enrollee, such as children, and the blind and disabled. Currently, the federal government guarantees matching funds to states for qualifying Medicaid expenses, regardless of cost. Under the GOP bill, states have the option of receiving a block grant, rather than the per-capita amounts, for traditional adult enrollees and children – not the elderly or disabled. States also have the option of instituting work requirements for able-bodied adults, but not pregnant women.
Are insurers required to cover certain benefits?
The latest version of the bill requires insurers to provide 10 essential health benefits mandated by the ACA, unless a state obtains a waiver to set its own benefit requirements. The ACA’s essential health benefits required insurance companies to cover 10 health services: ambulatory, emergency, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services and devices, laboratory services, preventive care and chronic disease management, and pediatric services including dental and vision.
Beginning in 2020, states could set their own essential health benefits by obtaining a waiver.
At that point, state requirements could vary, as they did before the ACA was enacted. For instance, a 2009 report from the Council for Affordable Health Insurance, a group representing insurance companies, said 47 states had a mandate for emergency service benefits, while 23 mandated maternity care and only three mandated prescription drug coverage.
State Medicaid plans would not have to meet the essential health benefits requirement after Dec. 31, 2019.
Are there subsidies to help individuals buy insurance? How do they differ from the Affordable Care Act?
There are two forms of financial assistance under the ACA: premium tax credits (which would change under the GOP plan) and cost-sharing to lower out-of-pocket costs (which would be eliminated).
Let’s look at the premium tax credits first. They would be available to individuals who buy their own coverage on the individual, or nongroup, market. But instead of a sliding scale based on income, as under the ACA, the Republican plan’s tax credits are based on age, with older Americans getting more. (The plan, however, allows insurers to charge older Americans up to five times more than younger people, as we will explain later.)
The ACA tax credits also take into account the local cost of insurance, varying the amount of the credit in order to put a cap on the amount an individual or family would have to spend for their premiums. The Republican plan doesn’t do that. (See this explanation from the nonpartisan Kaiser Family Foundation for more on how the ACA tax credits are currently calculated.)
There are income limits under the GOP bill. Those earning under $75,000, or $150,000 for a married couple, in modified adjusted gross income, get the same, fixed amounts for their age groups — starting at $2,000 a year for those under age 30, increasing in $500 increments per decade in age, up to $4,000 a year for those 60 and older. The tax credits are capped at $14,000 per family, using the five oldest family members to calculate the amount. This new structure would begin in 2020, with modifications in 2018 and 2019 to give more to younger people and less to older people.
For those earning above those income thresholds, the tax credit is reduced by 10 percent of the amount earned above the threshold. For instance, an individual age 60 or older earning $100,000 a year would get a tax credit of $1,500 ($4,000 minus 10 percent of $25,000).
That hypothetical 60-year-old gets $0 in tax credits under the ACA. But if our 60-year-old earns $30,000 a year, she would likely get more under the ACA than the GOP plan: In Franklin County, Ohio, for instance, the tax credit would be $6,550 under the ACA in 2020 and $4,000 under the Republican plan. (This interactive map from the KFF shows the difference in tax credits under the health care plans.)
As for the cost-sharing subsidies available now under the ACA — which can lower out-of-pocket costs for copays and other expenses for those earning between 100 percent and 250 percent of the federal poverty level — those would be eliminated in 2020. However, the GOP bill sets up a Patient and State Stability Fund, with $100 billion in funding over nine years with state matching requirements, that can be used for various purposes, including lowering out-of-pocket costs of a state’s residents. An additional $30 billion was added to this fund for other programs: $15 billion would be used to set up the Federal Invisible Risk Sharing Program, another reinsurance program, and $15 billion is set aside specifically for maternity and mental health coverage.
Small-business tax credits would end in 2020. The health insurance marketplaces stay, but the tax credits can be used for plans sold outside of those marketplaces. And the different levels of plans (bronze, silver, etc.) based on actuarial value (the percentage of costs covered) are eliminated; anyone can buy a catastrophic plan, not just those under 30 as is the case with the ACA.
What does the bill do regarding health savings accounts?
It increases the contribution limits for tax-exempt HSAs, from $3,400 for individuals and $6,750 for families now to $6,550 and $13,100, respectively. It allows individuals to use HSA money for over-the-counter drugs, something the ACA had limited to only over-the-counter drugs for which individuals had obtained a prescription.
There were so-called winners and losers in the individual market under the ACA. How would that change under this bill?
Both the current law and the Republican proposal primarily impact the individual market, where 7 percent of the U.S. population buys its own health insurance. As we’ve written many times, how the ACA affected someone in this market depended on their individual circumstances — and the same goes for the House Republicans’ plan. In general, because the ACA said that insurers could no longer vary premiums based on health status and limited the variation based on age, older and sicker individuals could have paid less than they had before, while younger and healthier individuals could have paid more.
The GOP plan allows a wider variation in pricing based on age: Insurers can charge older individuals up to five times as much as younger people, and states can change that ratio. Under the ACA, the ratio was 3:1. So, younger individuals may see lower premiums under this bill, while older individuals could see higher premiums.
Older Americans do get higher tax credits than younger Americans under the Republican plan, but whether that amounts to more or less generous tax credits than under the ACA depends on other individual circumstances, including income and local insurance pricing. Those with low incomes could do worse under the GOP plan, while those who earned too much to qualify for tax credits under the ACA (an individual making more than $48,240) would get tax credits.
We would encourage readers to use the Kaiser Family Foundation’s interactive map to see how tax credits may change, depending on various circumstances. “Generally, people who are older, lower-income, or live in high-premium areas (like Alaska and Arizona) receive larger tax credits under the ACA than they would under the American Health Care Act replacement,” KFF says. “Conversely, some people who are younger, higher-income, or live in low-premium areas (like Massachusetts, New Hampshire, and Washington) may receive larger assistance under the replacement plan.”
A few weeks after the bill was introduced, House Republicans, through an amendment, made a change to a tax provision to create placeholder funding that the Senate could use to boost tax credits for older Americans, as we explain in the next answer.
Also, some individuals with preexisting conditions could see higher premiums under the legislation, if they don’t maintain continuous coverage and live in states that received waivers for pricing some plans based on health status.
Which ACA taxes go away under the GOP plan?
Many of the ACA taxes would be eliminated.
As we said, the bill eliminates all fines on individuals for not having insurance and large employers for not offering insurance. Also, beginning in 2017, for high-income taxpayers, the bill eliminates the 3.8 percent tax on certain net investment income. The 0.9 percent additional Medicare tax on earnings above a threshold stays in place until 2023. The bill repeals the 2.3 percent tax on the sale price of certain medical devices in 2017 and the 10 percent tax on indoor tanning services (effective June 30, 2017). It also gets rid of the annual fees on entities, according to the IRS, “in the business of providing health insurance for United States health risks,” as well as fees on “each covered entity engaged in the business of manufacturing or importing branded prescription drugs.”
It reduces the tax on distributions from health savings accounts (HSAs) not used for qualified medical expenses from 20 percent to 10 percent and the tax on such distributions from Archer medical savings accounts (MSAs) from 20 percent to 15 percent. It lowers the threshold for receiving a tax deduction for medical expenses from 10 percent to 5.8 percent of adjusted gross income. (Originally, the bill lowered the threshold to 7.5 percent, but House Republicans changed that to create some flexibility for potential funding changes the Senate could make. A congressional aide told us that the change is expected to provide $85 billion in spending over 10 years that the Senate could use to boost the tax credit or provide other support for Americans in the 50-64 age bracket.)
And from 2020 through 2025, the bill suspends the so-called “Cadillac tax,” a 40 percent excise tax on high-cost insurance plans offered by employers.
Will young adults under the age of 26 still be able to remain on their parents’ plans?
Yes. The bill does not affect this provision of the ACA.
How does the bill treat abortion?
It puts a one-year freeze on funding to states for payments to a “prohibited entity,” defined as one that, among other criteria, provides abortions other than those due to rape, incest or danger to the life of the mother. This would include funding to Planned Parenthood under Medicaid, which is most of the organization’s government funding. Under current law, Planned Parenthood can’t use federal money for abortions, except those in cases of rape, incest or risk to the mother’s life.
Also under the GOP plan, tax credits can’t be used to purchase insurance that covers abortion beyond those three exceptions. Health insurance companies would still be able to offer “separate coverage” for expanded coverage of abortions, which individuals could then purchase on their own.
How many people will have insurance under the plan, as compared with the ACA?
The nonpartisan Congressional Budget Office estimated that the legislation, as passed by the House, would lead to 14 million fewer people having insurance in 2018 and 23 million fewer insured in 2026, compared with current law under the ACA.
How much will the bill cost, as compared with the ACA?
CBO estimated that the legislation passed by the House would reduce federal deficits by $119 billion over the next decade, 2017-2026. It would reduce revenues by $992 billion, mostly by repealing the ACA’s taxes and fees, and reduce spending by $1.11 trillion for a net savings of $119 billion, according to CBO.
See the original article Here.
Source:
Robertson L., Gore D., Schipani V. (2017 May 24). The facts on the GOP health care bill [Web blog post]. Retrieved from address https://www.factcheck.org/2017/03/the-facts-on-the-gop-health-care-bill/
10 Misconceptions About Saving for Medical Care in Retirement
Are you properly prepared for your medical costs during retirement? Take a look at this great article by Marlene Y. Satter from Employee Benefits Advisors to find out what are the top misconceptions people have about medical costs when planning for their retirement.
Retirement isn’t the only thing workers have trouble saving for; the other big gap in planning is health care.
According to a Voya Financial survey, Americans just aren’t ready to pay for the health care they might need in retirement. Their estimates of what they might need are low—when they estimate them at all, that is—and their savings are even lower.
With worries over money woes keeping people up at night—so says a CreditCards.com poll—the only worry that surpassed “having enough saved for retirement” was “health care and insurance.”
And consider, if you will, all the turmoil in the health insurance market these days, what with potential changes to—or an outright repeal of—the Affordable Care Act waiting in the wings, not to mention the skyrocketing costs of both care and coverage.
In light of all this uncertainty, it’s no wonder that the little matter of paying for health care is keeping people awake.
But, considering all that, it’s even more surprising that there are so many common misconceptions about health care, its cost and how to pay for it at large in the general population.
American workers are not just ill prepared for retirement, they’re even more ill prepared for any illness or infirmity that may come along with it.
According to research from the Employee Benefit Research Institute (EBRI), a 65-year-old man would need $127,000 in savings while a 65-year-old woman would need $143,000—thanks to a longer projected lifespan—to give each of them a 90 percent chance of having enough savings to cover health care expenses in retirement.
But that doesn’t appear to have filtered its way down to U.S. workers, who are blissfully (well, maybe not so blissfully) ignorant of the mountain of bills that probably lies ahead.
While demographics play a role, there are smaller differences among some groups than one might otherwise expect. In addition, it’s also rather surprising where Americans plan to get the money to pay for whatever care they receive, and how far they think that money will stretch when it also has to pay for food, clothing, shelter and any activities or other necessities that come along with retirement.
Read on to see 10 misconceptions workers have about how and how much they think they’ll pay for medical care in retirement. As you’ll see, some generations are more prone to certain errors than others.
10. Workers just aren’t estimating how much health care will cost them in retirement.
Perhaps they’d rather not know—but according to the poll, 81 percent of Americans have not estimated the total amount health care will cost them in retirement; among them are 77 percent of boomers. Retirees haven’t estimated those costs, either; in fact, just 21 percent of them have. But that’s actually not that bad, when considering that among Americans overall, only 14 percent have actually done—or tried to do—the math.
And among those who have tried to calculate the cost, 66 percent put them at $100,000 or less while an astonishing 31 percent estimated just $25,000 or less.
9. People with just a high school education or less, and whites, are slightly more likely than those who went to college, and blacks, to have attempted to figure it out.
The great majority among all those demographic groups just aren’t looking at the numbers, with 88 percent of black respondents and 79 percent of white respondents saying they have not estimated how much money it will take to pay their medical costs throughout retirement.
And while 80 percent of those with a high school diploma or less say they haven’t run the numbers, those who spent more time in school have spent even less time doing the calculations—with 81 percent of those with some college and 82 percent of those who graduated college saying they have not estimated medical costs.
8. Millennials are the most likely to underestimate health care costs in retirement.
A whopping 74 percent of millennials are among those lowballing what they expect to spend on health care once they retire, figuring they won’t need more than $100,000—and possibly less.
Not that they really know; 85 percent haven’t actually tried to calculate their total health care expenses for retirement. But they must be believers in the amazing stretching dollar, with 42 percent planning to use general retirement savings as the primary means of paying for health expenses in retirement, excluding Medicare.
GenXers, by the way, were the most likely to guess correctly that the bill will probably be higher than $100,000—but even there, only 28 percent said so.
7. They have surprisingly unrealistic expectations about where they’ll get the money to pay for medical care.
Excluding Medicare, 34 percent intend to use their general retirement savings, such as 401(k)s, 403(b)s, pensions and IRAs, as the primary means of paying for care, while 25 percent are banking on their Social Security income, 7 percent would use health savings accounts (HSAs) and 6 percent would use emergency savings.
That last is particularly interesting, since so few people have successfully managed to set aside a sizeable emergency fund in the first place.
6. Despite their potential, HSAs just aren’t feasible for many because of their income.
HSAs do offer ways to set aside more money not just for medical bills in retirement but also to boost retirement savings overall, and come with fairly generous contribution limits. But people with lower incomes often can’t even hit the maximum for retirement accounts—so relying on an HSA might not be realistic for all but those with the highest incomes.
Yet people with lower incomes were more likely than those who made more to say HSAs would be the main way they’d pay for medical expenses. Among those who said they’d be relying on HSAs to pay for care in retirement, 5 percent of those with incomes less than $35,000 and 14 percent of those with incomes between $35,000–$50,000 said that would be the way they’d go.
Just 9 percent of those with incomes between $50,000–$75,000, 7 percent of those with incomes between $75,000–$100,000 and 9 percent of those with incomes above $100,000 chose them.
5. A few are planning on using an inheritance to pay for medical bills in retirement.
It’s probably not realistic, and there aren’t all that many, but some respondents are actually planning on an inheritance being the chief way they’ll pay for their medical expenses during retirement.
Millennials and GenXers were the most likely to say that, at 2 percent each—but they may not have considered that the money originally intended for an inheritance might end up going to pay for other things, such as caregiving or child care, and indeed much of their own retirement money could end up paying for care for elderly parents. A lot more people end up acting as caregivers—especially among the sandwich generation—and may find that relying on inheriting money from the people they’re caring for was not a realistic expectation.
4. Women don’t know, guess low.
Just 13 percent of women have gone to the trouble of estimating how much health care will cost them during retirement, but that didn’t stop 32 percent from putting that figure at $25,000 or less.
And that’s really bad news. It’s particularly important for women to be aware of the cost of health care, since not only do they not save enough for retirement to begin with—42 percent only contribute between 1–5 percent, the lowest level, compared with 34 percent of men, often thanks to lower salaries and absences from the workplace to raise children or act as caregivers—but their longer lifespans mean they’ll have more years in which to need health care and fewer options to obtain it other than by paying for it.
Men are frequently cared for by (predominantly female) caregivers at home, while women tend to outlive any family members who might be willing or able to do the same for them.
3. Men don’t know, but guess higher.
While the same percentage of women and men have not estimated their retirement health care expenses (81 percent), men were more likely than women (24 percent, compared with 15 percent) to come up with an estimate higher than $100,000.
2. The highest-income households are most likely to have tried to estimate medical cost needs during retirement.
Probably not surprisingly, households with an income of $100,000 or more were the most likely to have tried to pin a dollar figure to health care needs, with 21 percent saying they’d done so.
Households with incomes between $50,000–$75,000 were least likely to have done so, with just 11 percent of them trying to anticipate how much they’ll need.
And just because they have more money doesn’t mean their estimates were a whole lot more accurate—only 38 percent of those $100,000+ households thought they’d need more than $100,000 to see them through any needed medical care during retirement, while 59 percent—the great majority—figured they could get by on $100,000 or even less.
1. Where they live doesn’t seriously affect their estimates, although it will seriously affect their cost of care.
Among those who have tried to anticipate how much they’ll need in retirement for medical care, there’s not a huge difference among how many guessed too low—even though where they live can have a huge effect on how much they’ll end up paying, particularly for long-term care.
While the most expensive regions for LTC tend to be the northeast and the west coast, and the cheapest are the south and midwest, there’s not a great deal of variance among those who estimate they can get by on care for $100,000 or less—even if people live in one of the most expensive regions. Sixty-seven percent of those in the northeast said care wouldn’t cost more than that, while 63 percent of those in the midwest, 71 percent of those in the south and 61 percent of those in the west said the same thing.
When it came to those who said they’d need more than $100,000, 24 percent of those in the west thought they’d need that much; so did 20 percent of those in the midwest, just 18 percent of those in the northeast and 17 percent of those in the south.
See the original article Here.
Source:
Satter M. (2017 April 24). 10 misconceptions about saving for medical care in retirement [Web blog post]. Retrieved from address https://www.benefitspro.com/2017/04/24/10-misconceptions-about-saving-for-medical-care-in?ref=hp-news&page_all=1
The Effects of Ending the Affordable Care Act’s Cost-Sharing Reduction Payments
Take a look at this interesting article by Kaiser Family Foundation and see how the cost-sharing mandate under the ACA will be affected in the AHCA.
Controversy has emerged recently over federal payments to insurers under the Affordable Care Act (ACA) related to cost-sharing reductions for low-income enrollees in the ACA’s marketplaces.
The ACA requires insurers to offer plans with reduced patient cost-sharing (e.g., deductibles and copays) to marketplace enrollees with incomes 100-250% of the poverty level. The reduced cost-sharing is only available in silver-level plans, and the premiums are the same as standard silver plans.
To compensate for the added cost to insurers of the reduced cost-sharing, the federal governments makes payments directly to insurance companies. The Congressional Budget Office (CBO) estimates the cost of these payments at $7 billion in fiscal year 2017, rising to $10 billion in 2018 and $16 billion by 2027.
The U.S. House of Representatives sued the Secretary of the U.S. Department of Health and Human Services under the Obama Administration, challenging the legality of making the cost-sharing reduction (CSR) payments without an explicit appropriation. A district court judge has ruled in favor of the House, but the ruling was appealed by the Secretary and the payments were permitted to continue pending the appeal. The case is currently in abeyance, with status reports required every three months, starting May 22, 2017.
If the CSR payments end – either through a court order or through a unilateral decision by the Trump Administration, assuming the payments are not explicitly authorized in an appropriation by Congress – insurers would face significant revenue shortfalls this year and next.
Many insurers might react to the end of subsidy payments by exiting the ACA marketplaces. If insurers choose to remain in the marketplaces, they would need to raise premiums to offset the loss of the payments.
We have previously estimated that insurers would need to raise silver premiums by about 19% on average to compensate for the loss of CSR payments. Our assumption is that insurers would only increase silver premiums (if allowed to do so by regulators), since those are the only plans where cost-sharing reductions are available. The premium increases would be higher in states that have not expanded Medicaid (and lower in states that have), since there are a large number of marketplace enrollees in those states with incomes 100-138% of poverty who qualify for the largest cost-sharing reductions.
There would be a significant amount of uncertainty for insurers in setting premiums to offset the cost of cost-sharing reductions. For example, they would need to anticipate what share of enrollees in silver plans would be receiving reduced cost-sharing and at what level. Under a worst case scenario – where only people eligible for sharing reductions enrolled in silver plans – the required premium increase would be higher than 19%, and many insurers might request bigger rate hikes.
While the federal government would save money by not making CSR payments, it would face increased costs for tax credits that subsidize premiums for marketplace enrollees with incomes 100-400% of the poverty level.
The ACA’s premium tax credits are based on the premium for a benchmark plan in each area: the second-lowest-cost silver plan in the marketplace. The tax credit is calculated as the difference between the premium for that benchmark plan and a premium cap calculated as a percent of the enrollee’s household income (ranging from 2.04% at 100% of the poverty level to 9.69% at 400% of the poverty in 2017).
Any systematic increase in premiums for silver marketplace plans (including the benchmark plan) would increase the size of premium tax credits. The increased tax credits would completely cover the increased premium for subsidized enrollees covered through the benchmark plan and cushion the effect for enrollees signed up for more expensive silver plans. Enrollees who apply their tax credits to other tiers of plans (i.e., bronze, gold, and platinum) would also receive increased premium tax credits even though they do not qualify for reduced cost-sharing and the underlying premiums in their plans might not increase at all.
We estimate that the increased cost to the federal government of higher premium tax credits would actually be 23% more than the savings from eliminating cost-sharing reduction payments. For fiscal year 2018, that would result in a net increase in federal costs of $2.3 billion. Extrapolating to the 10-year budget window (2018-2027) using CBO’s projection of CSR payments, the federal government would end up spending $31 billion more if the payments end.
This assumes that insurers would be willing to stay in the market if CSR payments are eliminated.
Methods
We previously estimated that the increase in silver premiums necessary to offset the elimination of CSR payments would be 19%.
To estimate the average increase in premium tax credits per enrollee, we applied that premium increase to the average premium for the second-lowest-cost silver plan in 2017. The Department of Health and Human Services reports that the average monthly premium for the lowest-cost silver plan in 2017 is $433. Our analysis of premium data shows that the second-lowest-cost silver plan has a premium 4% higher than average than the lowest-cost silver plan.
We applied our estimate of the average premium tax credit increase to the estimated total number of people receiving tax credits in 2017. This is based on the 10.1 million people who selected a plan during open enrollment and qualified for a tax credit, reduced by about 17% to reflect the difference between reported plan selections in 2016 and effectuated enrollment in June of 2016.
We believe the resulting 23% increase in federal costs is an underestimate. To the extent some people not receiving cost-sharing reductions migrate out of silver plans, the required premium increase to offset the loss of CSR payments would be higher. Selective exits by insurers (e.g., among those offering lower cost plans) could also drive benchmark premiums higher. In addition, higher silver premiums would somewhat increase the number of people receiving tax credits because currently some younger/higher-income people with incomes under 400% of the poverty level receive a tax credit of zero because their premium cap is lower than the premium for the second-lowest-cost silver plan. We have not accounted for any of these factors.
Our analysis produces results similar to recent estimates for California by Covered California and a January 2016 analysis from the Urban Institute.
See the original article Here.
Source:
Levitt L., Cox C., Claxton G., (2017 April 25). The effects of ending the affordable care act's cost-sharing reduction payments[Web blog post]. Retrieved from address https://www.kff.org/health-reform/issue-brief/the-effects-of-ending-the-affordable-care-acts-cost-sharing-reduction-payments/
Poll: Majority Sees GOP Health Bill as Step Backward
Have you wondered how other Americans feel about the repealing of the ACA? Check out in this great article by Jonathan Easley from The Hill about a poll taken from Harvard detailing how people across the country really feel about the passing of the AHCA.
A majority of voters see the GOP healthcare bill as a step backward and want to see the Senate make significant changes to it.
According to data from the latest Harvard-Harris Poll survey, provided exclusively to The Hill, 55 percent view the House-passed bill as a step backward, compared to 45 percent who described it as a step forward.
Seventy-seven percent of Republicans view the bill as a step forward, while 77 percent of Democrats and 61 percent of independents view it as a step back.
Fifty-seven percent of voters said they want to see the Senate make significant changes to the bill if it is to be passed into law, including 64 percent of Republicans and 66 percent of independents.
Sixty percent of voters want the Senate bill to ensure people with preexisting conditions can get affordable healthcare.
An amendment to the House bill offers state waivers that would allow carriers to charge people more based on their health.
“The voters want to neither go back to ObamaCare nor to the House bill,” said Harvard-Harris co-director Mark Penn.
“The Senate is going to have to thread the needle here and craft a new compromise. The voters are mostly concerned with pre-existing conditions and are against any penalty for not having insurance. Solve the preconditions dilemma and they might have something that could get public support.”
The Harvard-Harris online survey of 2,006 registered voters was conducted May 17–20. The partisan breakdown is 36 percent Democrat, 32 percent Republican, 29 percent independent and 3 percent other. The poll uses a methodology that doesn't produce a traditional margin of error.
The Harvard–Harris Poll is a collaboration of the Harvard Center for American Political Studies and The Harris Poll. The Hill will be working with Harvard-Harris throughout 2017. Full poll results will be posted online later this week.
Satisfaction with the bill cut sharply along partisan lines.
See the original article Here.
Source:
Easley J. (2017 May 24). Poll: majority sees GOP health bill as step backward[Web blog post]. Retrieved from address https://thehill.com/policy/healthcare/335003-poll-majority-sees-gop-health-bill-as-step-backward
Planned Parenthood Funding Could Thwart GOP Efforts On Health Bill
With the many changes coming to healthcare thanks to the passing of the American Health Care Act (AHCA) in Congress. See how funding for planned parenthood could become a problem for the AHCA trying to pass in the Senate in this great article by Julie Rovner at Kaiser Health News.
If there’s anything congressional Republicans want to do more than “repeal and replace” the Affordable Care Act it’s defund Planned Parenthood, which provides health care to women around the country. But Senate rules could prevent lawmakers from accomplishing both of those goals in the same bill, as they intend to do.
The American Health Care Act, passed by the House earlier this month to overhaul the federal health law, would bar funding under the Medicaid program for one year to any “prohibited entity” that “is primarily engaged in family planning services, reproductive health, and related medical care; and … provides for abortions” other than those for rape, incest or to protect the life of the woman.
Although Planned Parenthood is not mentioned, it is clearly the target of the provision. On the other hand, the Senate parliamentarian could rule that the language does not qualify to be included in this specific bill.
The provision has mostly flown under the radar in recent debates about the bill. But defunding Planned Parenthood is a top priority for powerful anti-abortion groups counting on its inclusion as a condition to support the bill. It would pose enormous political problems for the measure if it does not pass the Senate.
“Congress has the votes to get it done. There are no excuses for inaction,” warned Marjorie Dannenfelser, president of the Susan B. Anthony List, in a statement aimed at lawmakers in March.
Whether Congress truly has enough votes to pass the bill is unclear. Congress is using the “budget reconciliation” process for its health law overhaul because reconciliation bills cannot be filibustered in the Senate and require only a simple majority vote — rather than the typical 60 — to pass. Republicans control only 52 seats in the Senate.
Under Senate rules for reconciliation, any provision in the measure must primarily be aimed at affecting the federal budget, either adding to or subtracting from federal spending. Items for which spending is “merely incidental” to a broader purpose can be ordered dropped from the bill by the parliamentarian under the “Byrd Rule,” named for its author, Sen. Robert Byrd (D-W.Va.), a longtime Senate leader who died in 2010.
In the past, policies related to abortion have been singled out as violating that rule. For example, Robert Dove, who served as parliamentarian twice under Republican control of the Senate, said in a 2010 interview that he ruled an abortion ban out of order in a 1995 reconciliation bill because “it was my view that the provision was not there in order to save money. It was there to implement social policy.”
Republicans have defended the inclusion of the Planned Parenthood provision in the reconciliation bill. House Speaker Paul Ryan (R-Wis.), when defending the lack of anti-Planned Parenthood language in the spending bill that passed last week to keep the government running, said the measure “needs to be in the reconciliation bill — as it is — because that’s how you get it into law.”
Planned Parenthood gets an estimated 75 percent of its government support from the Medicaid program, mostly for birth control, sexually transmitted disease screening and treatment, and well-woman care. The language, if it becomes law, would have a major effect on the organization and its affiliates. The federal “Hyde Amendment” has for 40 years barred the use of federal funds for most abortions, but the fact that many Planned Parenthood affiliates offer separately funded abortion services has made the organization a longtime target of abortion opponents.
Defenders of the provision point out it is identical to language included in a 2015 budget bill that was vetoed by President Barack Obama.
“That same language already has a track record of success, passing Congress in 2015,” also under the Senate’s reconciliation rules, wrote Tony Perkins, president of the anti-abortion Family Research Council, in a blog post for supporters.
But passing parliamentary muster once “does not guarantee” the same language will be approved again, said Richard Kogan, a budget process expert at the Center on Budget and Policy Priorities, a Washington-based think tank. “A true precedent exists only when a point of order has been raised and the chair has made a ruling,” he said.
And while the language has not changed, circumstances around it have. For one thing, since 2015 the Congressional Budget Office has interpreted the language less broadly than it is written. “CBO expects that, according to those criteria, only Planned Parenthood Federation of America and its affiliates and clinics would be affected,” CBO said in its official estimate of the original House bill.
That would not, on its face, rule the language impermissible as part of the reconciliation bill. But supporters of Planned Parenthood said if lawmakers thought there was no potential problem, they would have simply named the organization in the bill, as in separate legislation introduced this year.
The CBO also lowered its estimate of how much the provision would save — from $235 million for a one-year defunding in 2015 to $156 million in 2017. The bill includes only a one-year ban on funding because CBO has estimated a permanent funding ban would actually cost money — as women who don’t get birth control get pregnant, have babies and possibly end up qualifying for Medicaid.
In the end it will be up to Senate parliamentarian Elizabeth MacDonough to make the call. Typically, the parliamentarian hears both sides argue their case before making a decision on whether a provision is allowable or not.
Even if MacDonough approves the provision, however, it is still not smooth sailing in the Senate. At least three GOP senators — Susan Collins of Maine, Lisa Murkowski of Alaska and Dean Heller of Nevada — have said they are uncomfortable with defunding Planned Parenthood.
“That is an important issue to me, because I don’t think that low-income women should be denied their choice of health care providers for family planning, cancer screenings, for well-woman care,” Collins said Sunday on ABC.
Those three votes would, if the senators followed through, be enough to force the provision out in the Senate.
And if the bill went back to the House with no Planned Parenthood defunding, “it would be problematic, I believe, based on my conversations with my colleagues,” said Rep. Mark Meadows, (R-N.C.), a leader of the House Freedom Caucus who helped negotiate the final language in the House bill.
Anti-abortion groups like Susan B. Anthony List are counting on the language staying in. “We urge the Senate to keep these non-negotiable provisions and quickly advance this bill to the President’s desk,” said a statement from Dannenfelser, the group’s president.
See the original article Here.
Source:
Rovner J. (2017 May 12). Planned parenthood funding could thwart GOP efforts on health bill [Web blog post]. Retrieved from address https://khn.org/news/planned-parenthood-funding-could-thwart-gop-efforts-on-health-bill/
HR Pros Were Relieved When Obamacare Replacement Bill Got Pulled
Find out how HR professionals really felt about the fall of the AHCA in this great article from HR Morning by Tim Gould.
Everybody knows that the GOP’s attempt to repeal and replace Obamacare came to a rather ignominious end. But how did the HR community feel about that outcome?
HR powerhouse Mercer addressed that question in a recent webcast, and the results were eye-opening.
Here are some stats from the webcast, which asked a couple key questions of 509 benefits pros.
On how they felt about the American Health Care Act being pulled:
- Very relieved it didn’t pass — 24%
- Relieved it didn’t pass — 32%
- Very disappointed it didn’t pass — 5%
- Disappointed it didn’t pass — 16%, and
- No opinion — 23%.
So (utilizing our super-sharp math skills here) considerably more than half of the participants were not in favor of the AHCA, while just slightly more than one in five were disappointed it was shot down. Looks like Obamacare isn’t as deeply disliked as we’ve been led to believe — at least with benefits pros.
Mercer also asked participants to rate priorities for improving current healthcare law — using 5 as the top rating and 1 as the lowest. Those results:
- Reduce pharmacy costs — 4.4
- Improve price transparency for medical services/devices — 4.1
- Stabilize individual market — 4.0
- Maintain Medicaid funding — 4.0, and
- Invest more in population health and health education — 3.7.
Perspective? As Beth Umland wrote on the Mercer blog, “Policymakers should view this health reform ‘reboot’ as an opportunity to partner with American businesses to drive higher quality, lower costs, and better outcomes for all Americans.”
A glance back
In case you’ve been hiding in a cave somewhere for the past several months, here’s a quick recap of the fate of the American Health Care Act.
Why did the AHCA fail, despite Republicans controlling the House, Senate and White House?
The answer starts with the fact that the GOP didn’t have the 60 seats in the Senate to avoid a filibuster by the Democrats. In other words, despite being the majority party, it didn’t have enough votes to pass a broad ACA repeal bill outright.
As a result, Senate Republicans had to use a process known as reconciliation to attempt to reshape the ACA. Reconciliation is a process that allows for the passage of budget bills with 51 votes instead of 60. So the GOP could vote on budgetary pieces of the health law, without giving the Democrats a chance to filibuster.
The problem for Republicans was reconciliation severely limited the extent to which they could reshape the law — and it’s a big reason the why American Health Care Act looked, at least to some, like “Obamacare Lite.”
Ultimately, what caused Trump and Ryan to decide to pull the bill before the House had a chance to vote on it was that so many House Republicans voiced displeasure with the bill and said they wouldn’t vote for it.
Specifically, here are some of what conservatives didn’t like about the American Health Care Act:
- it largely left a lot of the ACA’s “entitlements” intact — like government aid for purchasing insurance
- it didn’t do enough to curtail the ACA’s expansion of Medicaid
- too many of the ACA’s insurance coverage mandates would remain in place
- the Congressional Budget Office estimated that the bill would result in some 24 million Americans losing insurance within the next decade, and
- it didn’t do enough to drive down the cost of insurance coverage in general.
See the original article Here.
Source:
Gould T. (2017 April 14). Hr pros were relieved when obamacare replacement bill got pulled Ob[Web blog post]. Retrieved from address https://www.hrmorning.com/hr-pros-were-relieved-when-obamacare-replacement-bill-got-pulled-off-the-table/
Health Reform Expert: Here’s What HR Needs to Know About GOP Repeal Bill Passing
The House of Repersentives has just passed the American Health Care Act (AHCA), new legislation to begin the repeal process of the ACA. Check out this great article from HR Morning and take a look how this new legislation will affect HR by Jared Bilski.
Virtually every major news outlet is covering the passage of the American Health Care Act (AHCA) by the House. But amidst all the coverage, it’s tough to find an answer to a question that’s near and dear to HR: What does this GOP victory mean for employers?
The AHCA bill, which passed in the House with 217 votes, is extremely close to the original version of the legislation that was introduced in March but pulled just before a vote could take place due to lack of support.
While the so-called “repeal-and-replace” bill would kill many of the ACA’s taxes (except the Cadillac Tax), much of the popular health-related provisions of Obamacare would remain intact.
Pre-existing conditions, essential benefits
However, the new bill does allow states to waive certain key requirements under the ACA. One of the major amendments centers on pre-existing conditions.
Under the ACA, health plans can’t base premium rates on health status factors, or pre-existing conditions; premiums had to be based on coverage tier, community rating, age (as long as the rates don’t vary by more than 3 to 1) and tobacco use. In other words, plans can’t charge participants with pre-existing conditions more than “healthy” individuals are charged.
Under the AHCA, individual states can apply for waivers to be exempt from this ACA provision and base premiums on health status factors.
Bottom line: Under this version of the AHCA, insurers would still be required to cover individuals with pre-existing conditions — but they’d be allowed to charge astronomical amounts for coverage.
To compensate for the individuals with prior health conditions who may not be able to afford insurance, applying states would have to establish high-risk pools that are federally funded. Critics argue these pools won’t be able to offer nearly as much coverage for individuals as the ACA did.
Under the AHCA, states could also apply for a waiver to receive an exemption — dubbed the “MacArthur amendment” — to ACA requirement on essential health benefits and create their own definition of these benefits.
Implications for HR
So what does all this mean for HR pros? HR Morning spoke to healthcare reform implementation and employee benefits attorney Garrett Fenton of Miller & Chevalier and asked him what’s next for the AHCA as well as what employers should do in response. Here’s a sampling of the Q&A:
HR Morning: What’s next for the AHCA?
Garrett Fenton: The Senate, which largely has stayed out of the ACA repeal and replacement process until now, will begin its process to develop, amend, and ultimately vote on a bill … many Republican Senators have publicly voiced concerns, and even opposition, to the version of the AHCA that passed the House.
One major bone of contention – even within the GOP – was that the House passed the bill without waiting for a forthcoming updated report from the Congressional Budget Office. That report will take into account the latest amendments to the AHCA, and provide estimates of the legislation’s cost to the federal government and impact on the number of uninsured individuals …
… assuming the Senate does not simply rubber stamp the House bill, but rather passes its own ACA repeal and replacement legislation, either the Senate’s bill will need to go back to the House for another vote, or the House and Senate will “conference,” reconcile the differences between their respective bills, and produce a compromise piece of legislation that both chambers will then vote on.
Ultimately the same bill will need to pass both the House and Senate before going to the President for his signature. In light of the House’s struggles to advance the AHCA, and the razor-thin margin by which it ultimately passed, it appears that we’re still in for a long road ahead.
HR Morning: What should employers be doing now?
Garrett Fenton: At this point, employers would be well-advised to stay the course on ACA compliance. The House’s passage of the AHCA is merely the first step in the legislative process, with the bill likely to undergo significant changes and an uncertain future in the Senate. The last few months have taught us nothing if not the impossibility of predicting precisely how and when the Republicans’ ACA repeal and replacement effort ultimately will unfold. To be sure, the AHCA would have a potentially significant impact on employer-sponsored coverage.
However, any employer efforts to implement large-scale changes in reliance on the AHCA certainly would be premature at this stage. The ACA remains the law of the land for the time being, and there’s still a long way to go toward even a partial repeal and replacement. Employers certainly should stay on top of the legislative developments, and in the meantime, be on the lookout for possible changes to the current guidance at the regulatory level.
HR Morning: Specifically, how should employers proceed with their ACA compliance obligations in light of the House passage of the AHCA?Garrett Fenton: Again, employers should stay the course for the time being, and not assume that the AHCA’s provisions impacting employer-sponsored plans ultimately will be enacted. The ACA remains the law of the land for now. However, a number of ACA-related changes are likely to be made at the regulatory and “sub-regulatory” level – regardless of the legislative repeal and replacement efforts – thereby underscoring the importance of staying on top of the ever-changing guidance and landscape under the Trump administration.
Fenton also touched on how the “MacArthur amendment” and the direct impact it could have on employers by stating it:
“… could impact large group and self-funded employer plans, which separately are prohibited from imposing annual and lifetime dollar limits on those same essential health benefits. So in theory, for example, a large group or self-funded employer plan might be able to use a “waiver” state’s definition of essential health benefits – which could be significantly more limited than the current federal definition, and exclude items like maternity, mental health, or substance abuse coverage – for purposes of the annual and lifetime limit rules. Employers thus effectively could be permitted to begin imposing dollar caps on certain benefits that currently would be prohibited under the ACA.”
See the original article Here.
Source:
Bilski J. (2017 May 5). Health reform expert: here's what HR needs to know about GOP repeal bill passing [Web blog post]. Retrieved from address https://www.hrmorning.com/health-reform-expert-heres-what-hr-needs-to-know-about-gop-repeal-bill-passing/