Some PPACA Compliance Tabled Until After Elections

July 10, 2012

Most employers waited for the U.S. Supreme Court’s landmark decision upholding health care reform before developing a strategy on provisions in the Patient Protection and Affordable Care Act (PPACA,) slated to take effect in 2014 and beyond, according to a new Mercer survey.

But some eyebrows will be raised at Mercer’s findings that the waiting game continues for 16% of the more than 4,000 respondents, who admitted no action will be taken on 2014 compliance until after the November elections. Forty percent said they will begin examining these parts of the law now that the court has ruled.

Although health care reform still faces a contentious political outlook, Mercer suggests that employers should stay on track in their efforts to comply with PPACA as enacted or else they may face penalties.

“Employers who prefer to continue in wait-and-see mode until after the November elections will have less time to prepare, should they ultimately decide to comply with the law’s 2014 requirements,” says Mercer partner Tracy Watts. “In the meantime, they still need to comply with all the requirements that have already gone into effect.”

Certainly, employers must act quickly to implement new requirements for 2012 and 2013, such as providing benefit summary disclosures, complying with new dollar limits on health care flexible spending arrangements, and increasing Medicare withholding for high earners. But the rules going into effect in 2014 that are aimed at expanding access will have broader implications for many employers.

More than a fourth of survey respondents (28%) said that compliance with the new requirement that employees working an average of 30 or more hours per week must be eligible for coverage will present a “significant challenge” for their organization.

“Employers with large part-time populations, such as retailers and health care organizations, are faced with the difficult choice of either increasing the number of employees eligible for coverage, or changing their workforce strategy so that employees work fewer hours,” said David Rahill, President of Mercer’s health and benefits business. “With the average cost of health coverage now exceeding $10,000 per employee, a big jump in enrollment is not economically feasible for many employers.”

The requirement to auto-enroll newly eligible employees in a health plan – which means that employees will automatically be covered unless they take action to opt out – is also expected to increase the rolls of the insured for many employers. Nearly one-third (29%) of respondents to the Mercer survey said this will be a significant challenge, especially because other provisions of PPACA will limit the amount of health plan costs employers can pass along to employees through higher premiums or deductibles.

Still, the provision that worries most employers – 47% of survey respondents – is the excise tax on high-cost plans, expected to go into effect in 2018.

“Employers already struggling with annual health care cost increases of double or triple general inflation are determined to avoid this tax,” said Sharon Cunninghis, U.S. leader of Mercer’s health and benefits business. “We’ve been seeing a lot more interest in cost-saving measures, such as consumer-directed health plans and employee health management, since the tax was proposed.”

When asked whether they agreed or disagreed with the statement, “[The reform law] has provided the impetus for our organization to pursue more aggressive health benefit cost-management strategies,” more than half – 52% – agreed. Employer actions were one factor that helped to slow health benefit cost growth in 2011 relative to 2010.

Survey results suggest this trend will continue. Asked whether they planned to be more aggressive about managing plan costs going forward now that health reform has been confirmed, 54% said yes. And while 41% said no, it’s only because they were already taking aggressive action to manage expenses.

A Mercer webcast will be held on July 12 at noon EDT to provide a closer look at how the Supreme Court's decision will affect employers going forward.


Employee Health Incentive 'Benefit' A Perk For Employers More Than Workers: Survey


ATLANTA -- More employers are offering financial incentives for employees to improve their health, according to a 2012 benefits survey released Monday at the Society for Human Resource Management's annual conference -- a rare bright spot in a survey that revealed overall benefits at U.S. companies remain at the bottom of a three-year decline.

But despite the physical benefit to employees, health incentive programs may offer more financial benefits to employers than to the workers who take advantage of them, raising the question of who really wins from this type of perk.

Just as they did in 2011, employers in 2012 plan to spend, on average, 19 percent of each employee's salary on voluntary benefits, 18 percent on mandatory benefits, and another 10 percent on pay for time the employees did not work. The results reflect the ongoing weakness of the current job market, where salaries and benefits failed to keep pace with rising economic output. Seventy-three percent of respondents said the economy has negatively impacted their benefits offerings.

For companies hoping to offset skyrocketing health-care costs, which rose a whopping 6.9 percent in just the past year, employee-health incentive programs offer to pay employees to adopt healthier habits today and reduce the chances that they will need expensive health care in the future. In 2011, employers were responsible for paying 60.3 percent of the total cost of health-insurance plans for their employees.

From the perspective of an employer, health incentives make a lot of sense. Of the 550 randomly selected member companies of all sizes, the percentage that offered wellness bonuses this year climbed more than 50 percent since 2008.

Within that rise, well-known health risks like smoking and obesity were the prime targets of corporate efforts. The number of companies providing discounts on health-care premiums to employees who did not smoke more than doubled in four years to 20 percent, as did the companies offering bonuses for taking part in a weight loss program.

The key change, said SHRM's vice president for research, Mark Schmit, is that more initiative is being shown on both sides. "Until recently, many employee wellness programs were primarily made up of general education initiatives, like handing out brochures," he said. "Today more organizations are actively coming up with innovative discount programs to use as incentives -- because they work."


All Quiet on the Health Reform Front

By Elise Viebeck

This week's healthcare schedule will remind some of a quieter, simpler time — a time before healthcare reform.

Now that the Supreme Court has ruled on the Affordable Care Act and the House has voted to repeal the law for a second time, the issue may finally recede somewhat on Capitol Hill.

This is especially true as August recess approaches and as other issues — such as Medicare payments to physicians — cry out for attention before January 1.

The one exception is a possible healthcare repeal vote in the Senate, recently promised by Minority Leader Mitch McConnell (R-Ky.).

"I would remind you all that we had that vote in 2011. Every single Republican voted to repeal it," McConnell said at a press conference Tuesday. "We believe it's appropriate to have that vote again and we'll be working to get that kind of vote in the near future." That day, he filed an amendment to the Small Business Jobs and Tax Relief Act that would repeal the law. Senate Majority Leader Harry Reid (D-Nev.) has vowed to block the effort.

This week, Wednesday will be both chambers' busiest day for health issues.

The House Energy and Commerce Health Subcommittee will hold a hearing on the sustainable-growth rate, the mechanism by which doctors are paid under Medicare. The payment rate is scheduled for a drastic cut on Jan. 1 unless Congress acts.

The House Appropriations Subcommittee on Labor, Health and Human Services and Education will markup the fiscal year 2013 bill.

"If Washington is going to tackle our spending problem, we’ve simply got to start setting priorities," Chairman Denny Rehberg (R-Mont.) said in a statement. "We can strike a balance between funding responsible, effective programs that work for people and trimming waste and duplication to help reduce the deficit."

The Senate Special Committee on Aging will hold a hearing on dual-eligibles, the special population that is enrolled in both Medicare and Medicaid.

The Senate Caucus on International Narcotics Control will holding a hearing on prescription drug abuse, with testimony from Gil Kerlikowske, director of the Office of National Drug Control Policy.

House Judiciary's Subcommittee on the Constitution will hold a hearing on a constitutional amendment codifying as a right parents' freedom to "direct the upbringing, education and care of their children." The measure, sponsored by Rep. Trent Franks (R-Ariz.), has vast implications for healthcare and education. It had 70 cosponsors on Friday, while a companion measure in the Senate, from Jim DeMint (R-S.C.), had 11.

The House Energy and Commerce Subcommittee on Energy and Power will hold a hearing on the distribution, sale and consumption of certain asthma inhalers.


How the SCOTUS Medicaid Ruling Could Save Money

By Marilyn Werber Serafini
KHN Staff Writer

This story was produced in collaboration with POLITICO Pro.

The Supreme Court ruling on the health care law could have an unexpected effect -- saving the federal government money, say some budget experts.

The exact amount of savings is still unknown, because it depends on how many states decide not to expand their Medicaid programs, now that the court has said that they have a choice in the matter. Washington would save because it will provide the lion's share of funding for the jointly-run program for the poor and disabled.

Already, Republican governors in about a dozen states are threatening not to move forward with the expansion, including Texas, Florida, Mississippi, South Carolina, Louisiana and Wisconsin. Some, like Texas and Florida, have given a firm “no” to the expansion, while others – like Wisconsin – have hinted there’s a bit of wiggle room.

The details won’t become clear until the nonpartisan Congressional Budget Office weighs in the week of July 23 with estimates of how the court’s ruling will affect federal spending. In the meantime, the Republican-controlled House has scheduled a vote to repeal the entire law on Wednesday. The bill is expected to pass the House easily, but it won’t go any further since Democrats control the Senate and White House.

Deficit reduction – and the role of the health law in that – is expected to be a political issue for the foreseeable future. Congress early next year must negotiate a budget deficit reduction deal or face automatic federal spending cuts of as much as $1.2 trillion on everything from Medicare to defense.

Here’s how the court’s decision may affect federal spending:

If a state declines the expansion, only about one-fifth of the people who would have qualified for Medicaid will be eligible instead for federal premium and cost-sharing subsidies, according to Genevieve Kenney, senior fellow at the Urban Institute. (The law makes people up to 138 percent of the federal poverty line eligible for Medicaid; those between 100 percent and 138 percent could alternatively receive subsidies.) The subsidies cost more, but the federal government would provide them to far fewer people, she said.

In 2016, for example, the per-person cost of providing Medicaid would be about $5,400, according to CBO data. The average cost of providing subsidies instead would be more, the data show. It’s about $5,210 for an average adult, but this low-income population is not average. These enrollees will get more in the way of subsidies, because they will qualify for the maximum amount of subsidies, raising the price tag higher than what it would be if they got Medicaid.

In Florida, for example, 1.3 million people would be newly eligible for Medicaid if it expands its program, according to the institute. But, if the state declines, as Republican Gov. Rick Scott wants to do, the federal government would instead pay out subsidies for private insurance to about 300,000 of those people.

To be sure, the cost data is rough, and the eventual outcome would vary from state to state. Some conservatives project that the federal government’s costs would rise. The Heritage Foundation and the American Action Forum are among groups that have come up with estimates, one of which projects that the federal government could spend up to $100 billion more per year.

Heritage’s Drew Gonshorowski calculates that the federal government will spend between $34 and $90 billion more over 10 years. While he believes that the subsidies will cost more than Medicaid, he argues that the same number of people will get subsidies as would have received Medicaid.

He predicts that CBO’s forthcoming report will bear that out. CBO scoring estimates in the past "find that less enrollment in Medicaid combined with more enrollment in exchanges results in more spending," Gonshorowski wrote in a blog post July 6.

Politically, if even one state declines the Medicaid expansion, it would not be welcome news to President Barack Obama and to Democrats, who are counting on Medicaid to expand health insurance coverage to an estimated 17 million people.

People between 100 percent and 138 percent of the federal poverty level (currently $11,170 to $15,415 in annual income for an individual) would instead get the federal subsidies. But most adults below the poverty level would likely remain uninsured. That could amount to 11 million adults, the Urban Institute says.

As congressional and presidential campaigns kick into high gear, both parties are using the court decision to make their case against the other. Democrats point out that Republicans proposing to leave the federal Medicaid money on the table are stranding the poorest of the poor without insurance. Some Republican governors counter that budget-squeezed states can’t afford their share of the cost, and they are vocal in their opposition to complying with the health law in any way.

As part of the law, the federal government will cover the full cost of newly eligible people for the first few years, then scale back until it picks up 90 percent of the cost after 2019. That’s significantly more than the federal government pays for existing Medicaid enrollees.

Florida's governor said in a news release July 1 that Florida will "opt out of spending approximately $1.9 billion more taxpayer dollars required to implement a massive entitlement expansion of the Medicaid program. … The burden increasingly shifts to Florida taxpayers in future years. Medicaid, which has been growing for years at three-and-a-half times as fast as Florida's general revenue, will soon grow even faster under ObamaCare, and education funding will be adversely impaired if we do not control the growth in Medicaid spending."

The partisan rhetoric, though, won’t greatly affect the elections, either at the national or state level, according to Robert Blendon, professor of health policy and political analysis at Harvard. Some of the most vocal opponents of the health law either aren’t up for reelection or are trying to please voters who dislike the health law, he said.

"Core voters for [Texas Republican Gov. Rick Perry] want him to oppose this bill [and] the president is not going to carry Texas. The people who vote against him don’t want the law to go forward," Blendon said.


Mapping the Effects of the ACA's Health Insurance Coverage Expansions

The Affordable Care Act includes several provisions that allow many individuals across the U.S. to be eligible for Medicaid or for federal tax credits to subsidize the cost of insurance. The analysis below and zip code tool estimate the share of the population in geographic areas across the U.S. who had family income up to four times the poverty level in 2010 and were either uninsured or buying coverage on their own.


Who Benefits from the Affordable Care Act Coverage Expansions?

Percentage of the Nonelderly Population With Income Up to Four Times the Poverty level
Who Were Uninsured or Purchasing Individual Coverage, 2010

Source: Kaiser Family Foundation Analysis of the IPUMS American Community Survey, 2010.

See How Many Could Benefit in Your Area

Starting in 2014, most people who are uninsured or buying individual insurance with incomes up to four times the poverty level ($92,200 for a family of four and $44,680 for a single person in 2012) will be eligible for expanded coverage through Medicaid or tax credits to subsidize the cost of private insurance. See what share of the population might be helped in this way in a specific zip code.


Who Benefits From the Affordable Care Act's Coverage Expansions? 

The Affordable Care Act (ACA) includes two primary mechanisms for helping people afford health coverage. Starting in 2014, people with family incomes up to 138% of the poverty level ($31,809 for a family of four and $15,415 for a single person in 2012) will generally be eligible for the Medicaid program. And, people buying coverage on their own in new state-based health insurance exchanges will be eligible for federal tax credits to subsidize the cost of insurance. Tax credits will be calculated on a sliding scale basis for people with family income up to four times the poverty level ($92,200 for a family of four and $44,680 for a single person in 2012). (A calculator from the Kaiser Family Foundation illustrates the assistance people would be eligible for at different income levels and ages.)

The share of the population who will benefit from new Medicaid eligibility and the new health insurance tax credit will vary substantially throughout the country. We've illustrated that variation by estimating the share of the population in over 2,000 geographic areas across the U.S. who had family income up to four times the poverty level in 2010 and were either uninsured or buying coverage on their own.

On average, an estimated 17% of the non-elderly population nationwide would benefit from the Medicaid expansion and tax credits. In parts of Florida, New Mexico, Texas, Louisiana, and California, 36-40% of population could benefit.  In areas of Massachusetts, Hawaii, New York, and Connecticut – states that generally have high levels of employer-provided health insurance or have already implemented reforms to make insurance more accessible and affordable – 2-4% of the non-elderly could benefit from the coverage expansions in the ACA.

These estimates are best viewed as a way of comparing what share of the population will benefit from the ACA across geographic areas, rather than as precise projections of the effects of the law. For example, some people who are currently uninsured with family incomes up to four times the poverty level may already be eligible for Medicaid but haven't enrolled and others may be ineligible due to their immigration status. Or, some may have access to employer coverage, which means that they would not be eligible for a tax credit if that employer coverage is affordable. Also, some people who are already insured with employer coverage may have incomes low enough to qualify for Medicaid, or the coverage they receive through the employer may be unaffordable, making them eligible to apply for subsidized coverage through exchanges.

In addition to the provisions that help people pay for coverage, there are other elements of the ACA that could benefit people regardless of income, such as: guaranteed access to insurance regardless of pre-existing conditions; a limit on out-of-pocket costs in all insurance plans; preventive benefits with no patient cost-sharing; and allowing parents to cover children on their insurance plans up to age 26. On the other hand, there will be some people who perceive themselves as worse off under reform, such as those who choose not to purchase coverage and must pay a penalty under the individual responsibility provision.


This analysis was prepared by Gary Claxton, Anthony Damico, Larry Levitt, and Rachel Licata of the Kaiser Family Foundation.

The statistics shown are based on analysis of data from the 2010 American Community Survey (ACS) obtained fromIPUMS-USA. The American Community Survey is an annual nationwide survey of about 3 million people conducted by the U.S. Census Bureau that provides demographic, social, economic, and housing information at the national, state, and community levels.

The Affordable Care Act (ACA) generally provides financial assistance, either through Medicaid eligibility or tax credits for private health insurance, to people with incomes up to 400% of the poverty level and who do not have access to public health coverage or affordable coverage through an employer-sponsored health plan.  The percentages shown represent the share of people under age 65 who are in families with incomes up to 400% of federal poverty who at the time they were surveyed either (1) were not covered by public or private health insurance or (2) were covered by health insurance that they purchased directly and were not covered by any other type of public or private health insurance.  Coverage by the Indian Health Service was not considered as public or private health insurance.  People in institutions or who are active duty military were excluded from the analysis.  Unauthorized immigrants will be ineligible for expanded Medicaid coverage and for subsidized coverage in exchanges, but the ACS does not identify the legal status of non-citizens. To account for this, we assumed that 46% of non-citizens who would otherwise be eligible for assistance would be ineligible due to their immigration status. This assumption was derived from Department of Homeland Security estimates that there were 10.8 million unauthorized immigrants in the U.S. in 2010 and 12.6 million legal permanent residents who were not citizens.

The percentages are shown by Public Use Microdata Areas (PUMA), which are statistical geographic areas defined for the tabulation and dissemination of certain census data.  PUMAs are built on counties and census tracks within states and each one contains about 100,000 people. Standard errors range from 1-4% within PUMAs.

For this analysis, family income is based on the census definition of primary families, which are people within a household related to the head of the household.   This differs from some other analyses produced by Kaiser and others that aggregate income by health insurance unit, which generally includes members of a nuclear family who are able to purchase health insurance as a family.  Generally, using the census definition of family rather than health insurance units will result in a slightly lower estimate of the number of people who would benefit from the financial subsidies under the health reform because it produces a lower percentage of the population with incomes below or including 400% of poverty.


Health Ruling is Prompting Scams


By Elise Viebeck


Federal trade regulators warned Friday that scam artists are using the healthcare law to ask for consumers' personal information over the phone.

The Federal Trade Commission (FTC) said that the illegal activity began after the Supreme Court ruled on June 28 to uphold the vast majority of the law.

Scam artists "say they're from the government" and use the Affordable Care Act as a hook to verify information, according to an FTC alert.


"They might have the routing number from your bank, and then use that information to get you to reveal the entire account number," the alert stated. "Or, they'll ask for your credit card or Social Security number, Medicare ID, or other personal information."

Regulators urged consumers not to give out personal or financial information after unsolicited contact from someone who says they are with the government.

"If someone who claims to be from the government calls and asks for your personal information, hang up. It's a scam," the alert stated.

Read more at the FTC site.

Urgent care visits to soar due to PPACA


July 6, 2012


Urgent care visits will likely see a considerable boost due to the Supreme Court ruling on the Patient Protection and Affordable Care Act.

“Although urgent care isn’t specifically mentioned anywhere in the legislation, the open access that all urgent care centers have should make them a natural entry point for the newly insured—especially in areas where many primary care practices aren’t accepting new patients,” says Lou Ellen Horwitz, executive director of Urgent Care Association of America.

The law’s mandate targets the roughly 16 percent of uninsured Americans, equating to another 50 million Americans who could be seeking medical care, Horwitz says.

Urgent care centers, on average, see 342 patient visits per week. This equates to more than160 million patient visits each year. The Supreme Court ruling will drive an increase in volume as these new patients may see urgent cares as an alternative to the emergency room, Horwitz says.

“Fortunately, the industry continues to expand and should have capacity to accept these patients with relative ease in most areas,” she says.

There are about 9,000 urgent care centers in the country, but less “full-fledged” urgent care centers (those offering lab and x-ray, open 7 days a week), at 4,500.


House plans five-hour debate on healthcare repeal, WH warns veto

By Pete Kasperowicz

The House will hold five hours of debate today and Wednesday on legislation that would completely repeal the 2010 healthcare law, which is being called up by Republicans in light of the Supreme Court's decision that the individual health insurance mandate is constitutional.

The House Rules Committee approved a rule late Monday setting out the lengthy debate on a bill that is expected to pass with Republican support, but very little if any Democratic support. The Repeal of Obamacare Act, H.R. 6079, was formally introduced by House Majority Leader Eric Cantor (R-Va.) on Monday.

Later Monday evening, the White House put out a statement saying President Obama would veto the bill if it were presented for his signature, something that won't happen given Senate opposition.

"The Administration strongly opposes House passage of H.R. 6079 because it would cost millions of hard-working middle class families the security of affordable health coverage and care they deserve," the statement said. "It would increase the deficit and detract from the work the Congress needs to do to focus on the economy and create jobs.

"The last thing the Congress should do is refight old political battles and take a massive step backward by repealing basic protections that provide security for the middle class, it added. "Right now, the Congress needs to work together to focus on the economy and creating jobs. Congress should act on the President's concrete plans to create an economy built to last by reducing the deficit in a balanced way and investing in education, clean energy, innovation, and infrastructure.

"If the President were presented with H.R. 6079, he would veto it."

Under the rule for the House bill, the House Committees on Education and the Workforce, Energy and Commerce, and Ways and Means will each control one hour of debate. House Committees on Budget, Judiciary and Small Business will each control 30 minutes.

Finally, Majority Leader Cantor and House Minority Leader Nancy Pelosi (D-Calif.) and/or their designees will split the last 30 minutes of debate time.

The House is expected to start work on the bill by debating and approving the rule, which will take an hour early this afternoon. A final vote on passage on the bill itself is expected Wednesday.


IFEBP survey: More than 75% of sectors will provide health coverage in 2014

By Marli D. Riggs
July 2, 2012

Despite the differing reactions among U.S. business sectors to last week’s Patient Protection and Affordable Care Act Supreme Court ruling, 77% of surveyed organizations are very likely to provide health coverage in 2014, according to a recent survey by the International Foundation of Employee Benefits Plans.Following the Supreme Court’s decision, almost half (49%) of the organizations are shifting their attention to wellness, while 32% are focusing on consumer-driven health plans, 27% will shift costs to employees and 26% will focus on value-based health care, according to The Supreme Court ACA Decision Reaction Survey.

“We’re not surprised by these findings since our recent wellness survey told us that seven in 10 U.S. employers offer wellness programs,” says Paul Hackleman, IFEBP’s health care and public employer analyst.

Overall, the results were split when respondents identified which Supreme Court decision would have been most beneficial to their organization.  The data showed that 46% felt the best possible decision for their organization would have been PPACA being thrown out, while 41% said the best decision was the law being upheld. Another 12% of organizations would have liked the individual mandate overturned, but the remainder of the health care law to stay intact.

Most organizations have been keeping current with the legislative aspects of PPACA and some are already prepared for provisions in the future. Of the respondents 78% are extremely or very far along in terms of complying with current PPACA provisions, while 60% are extremely or very far along with preparing for future provisions.

Further, organizations in states that have already implemented health care exchanges are generally more satisfied with the Court’s decision (47% to 35% of respondents in states that haven’t implemented), and are more prepared with current provisions (47% to 36%) and more likely to continue coverage in 2014 (56% to 42%).

The survey was administered on June 28 to measure organizations’ reactions to the landmark decision. Responses were received from 1,122 plan administrators, trustees and organizational representatives.


Businesses won't wait for elections before implementing health law

By Sam Baker
July 9, 2012

Most businesses waited for the Supreme Court before making plans to comply with President Obama’s healthcare law — but most aren’t waiting for November to see whether the law might be repealed.

A new survey from the consulting firm Mercer found that most businesses have not begun planning for requirements that will take effect in 2014, including the mandate requiring employers to provide health benefits to most workers.

Businesses said they were holding off on implementation until they knew whether the Supreme Court would strike down the healthcare law — the same approach many Republican governors have taken. But now that the court has upheld the law, only 16 percent of the employers in Mercer’s survey said they plan to wait for November and the prospect of legislative repeal.

Mercer surveyed 4,000 businesses immediately following the high court’s decision.

The National Federation of Independent Business (NFIB), the country’s largest small-business organization, joined 26 state attorneys general in filing the legal challenge to the Affordable Care Act. Republicans consistently argue that the law will burden small employers and stifle new hiring.

But only 28 percent of the employers in Mercer’s survey said the new employer mandate will pose a “significant challenge.” The law requires many businesses to offer healthcare coverage or pay a penalty for all workers who buy coverage on their own, with help from the federal government.

“Employers with large part-time populations, such as retailers and healthcare organizations, are faced with the difficult choice of either increasing the number of employees eligible for coverage or changing their workforce strategy so that employees work fewer hours,” said David Rahill, president of Mercer’s Health and Benefits business.