Posts Tagged ‘Healthcare Reform’
Missouri voters on Tuesday overwhelmingly rejected a key provision of health care reform law. About 71 percent of Missouri voters backed a ballot measure, Proposition C, that would prohibit the government from requiring people to have health insurance or from penalizing them for not having it. Missouri is the first state to challenge aspects of the federal law in a referendum.
This is just another clear sign that people are not happy about the health care Law. Anytime there are 71% of people opposing that is a big number. The Missouri Hospital Association spent $400,000 trying to warn Missouri residents that Proposition C could raise prices at the hospitals. Even with $400,000 being spent to oppose proposition C it still passed by 71%. The could start a chain reaction of other states opposing the health care reform by referendum.
With the Affordable Care Act comes medicare Reforms. Historically, Medicare has often led the entire health care system in the adoption of quality and payment innovation. The reforms that go into place will not only affect Medicare but could change the way the health care system is paid.
Meidcare reform means Reform our health care delivery system, appropriately price services and modernize financing systems, and fight waste, fraud and abuse.
Unnecessary hospital readmissions
The Affordable Care Act creates a “hospital readmissions reduction program,” which will help hospitals smooth transitions for patients and reward hospitals that are successful in reducing avoidable readmissions.
Hospital acquired conditions
The Affordable Care Act imposes payment penalties on the 25 percent of hospitals whose rates of hospital acquired conditions like bedsores, complications from extended use of catheters, and injuries caused by falls, are the highest.
Rewarding Better Care
CMS will expand payments for value—in 2013—by rewarding better care for five of the most prevalent conditions. Physician payments will also become more closely linked to value with the launch of a physician value-based payment system and the implementation of a “value-modifier” that rewards physicians who deliver better care.
Accountable Care Organizations
The Affordable Care Act promotes team-based health care through Accountable Care Organizations (ACOs) under the Medicare shared savings program
Center for Medicare and Medicaid Innovation
To support the ongoing development of new models of payment and delivery, the Affordable Care Act establishes the Center for Medicare and Medicaid Innovation
Independent Payment Advisory Board
The Affordable Care Act also establishes the Independent Payment Advisory Board, or IPAB, to monitor the fiscal health of the Medicare program and to recommend payment policy revisions to contain Medicare cost growth.
Improvements to productivity and market basket adjustments in certain provider settings
The Affordable Care Act ensures that Medicare more accurately accounts for productivity when determining provider payments and revises annual payment updates in certain health care settingsTo support the ongoing development of new models of payment and delivery, the Affordable Care Act establishes the Center for Medicare and Medicaid Innovation
Ending Overpayments to Medicare Advantage Plans
A major inefficiency that the Affordable Care Act addresses is overpayments to private insurance plans that serve Medicare beneficiaries, known as Medicare Advantage plans
Modified equipment utilization factor for advanced imaging
Provisions in the Affordable Care Act address widely recognized areas of overutilization, such as advanced imaging services, which not only wastes resources but may also pose a danger to beneficiaries from needless exposure to radiation
Bidding for Durable Medical Equipment
CMS also continues to implement competitive bidding for durable medical equipment (DME), which the Affordable Care Act accelerated
Targeted and efficient anti-fraud activities
The new law gives CMS the authority to target anti-fraud activities to geographic areas, provider types, or services based on the type or level of risk posed to the program.
Ensures transparency of ownership and ensures provider compliance with Medicare’s requirements
The Affordable Care Act includes new protections that require all providers to have compliance plans. This will ensure that providers are abreast of Medicare requirements and in compliance with them and can focus their attention on patient-care.
The new health care reform forces everyone to buy health insurance or pay a tax penalty. This has become a major debate with many who oppose the health care reform. This requirement is the corner stone of the white house health plan. The argument was that if everyone is on a health plan that will help to offset costs for both the insurer and providers. There is a long legal battle a head but if this aspect was determined to be unconstitutional it would have a huge impact on the over all health care reform.
U.S. District Judge Henry Hudson refused to dismiss the state’s lawsuit, which argued the requirement that its residents have health insurance was unconstitutional.
The Judge who noted that his ruling was an initial step, decided the law was ripe for review. He said the issue the state raised — whether forcing residents to buy something, namely health care, is constitutional — had not been fully tested in court.
On Thursday, the US Department of Health and Human Services announced that there would be federal grants of $1 million to help for each state to set up the health insurance exchange. Each state is then going to be able to set up the exchange how they see fit. The idea is that the Gov sets up the market place and then the private market competes.
New Mexico’s wants to develop “a strong Exchange that promotes competition between plans based on quality and price in a way that is transparent to consumers.” This is an interesting approach because this could include restricting plans from the Exchange that would exceed specified premium levels or by requiring cost initiatives of plans participating. So it looks like New Mexico will decide what carriers get to participate in the exchange.
As states start to develope the exchanges the orginal view that the exchange would act as a market place for carreirs to compete with guarnteed issue plans. Now the big question is what will a plan in the exchange cost?
Sept. 1st we will see many stats launch their high risk pool plans. Ohio has released details of their high risk pool plan and it was reported that they would only be able to insure 5000 of the 17,000 people that are eligible for the health plan. They are keeping premiums low $98 to $493 a month for nonsmokers and $98 to $642 a month for smokers. The state of Ohio received $152 million in federal money to pay for the new program and time will tell if that is enough. The first red flag that this program is under funded is that Ohio can not offer to the full 17,000 that need it.
Section 9006 of the health care bill — just a few lines buried in the 2,409-page document — mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.
It has now come to light what a burden this aspect of the health care reform is going to have on small business.
Democrats and Republicans want to repeal it, but getting them to work together on the issue is proving difficult in an election year.
Republicans want to repeal the filing requirement and pay for it by changing other parts of the new health-care law, a strategy that Democratic leaders won’t support. Democrats want to repeal the filing requirement and pay for it by raising taxes on international corporations and limiting taxpayers’ ability to use special trusts to avoid gifts taxes. Republicans won’t support that.
The House rejected the Democratic bill Friday after Democratic leaders brought it up under a procedure that requires a two-thirds majority for approval. The vote was 241-154, with nearly all Democrats voting in favor of the bill and nearly all Republicans opposed.
Its important to note that both political parties recognize how this law is going to impact small business. Both sides are willing to repeal it but have different ideas on how to make up the funding. This is very important because there will be many more debates on aspect of the health care reform that will need to be appealed or changed.
Under the health care reform all children under 19 can not be declined or pre x on a health plan. Everyone in the industry had major concerns over this issue. One of the big concerns was parents would wait until the child had a health care crisis and then enroll them on the plan. It was just released that carriers are now going to be able to have open enrollments for these types of plans. That means the child can get the plan without underwriting but only once a year.
We are now starting to see the reality of what can and cannot be done under the health care reform. In the last few months almost every Individual carrier pull out of the stand alone child market. Not only did we see regional carriers pull out but we also saw national carriers. When national carriers pull out of a market that is the a huge red flag because they have large reserves. It will be interesting to see if the carriers that pulled out get back in.
Another aspect that might be interesting is the premium for those stand alone policies during the open enrollment period. Will that policy cost more?
Effective first of the plan year or after September 23, 2010 , health plans will have in effect internal claims appeal procedures. Each plan must allow the insured to review his or her plan to present evidence and testimony as part of the appeal process.
So what this means is if carrier declines a claim the insured now has the right to appeal the claim from an independent source. If the independent source declines the claim the insured can this go to the Department of Insurance and appeal the claim in person. So some could give their testimony in person to appeal the claim.
This would have a huge impact on experimental treatment. Almost all plans exclude experimental treatment but now the insured has a right to appeal the denied claim. For example if a family had a child that need a experimental heart transplant and received the treatment and the claim was denied. Now that family has multiple sources to appeal the claim. There is a very good possibility that if a family appeals that claim in person the chance of it being declined is a lot less. Who would decline a claims that saved a child’s life?
Now this does create some situations for groups that are self funded that use reinsurance. It is vital going forward that the contract states the re insurance will pay for that claim if its appealed and won. Other wise you could have a group that is self funded that is now responsible for paying for a very large claim. So any group that has re insurance contracts in place should be looking at the at this aspect very closely.
If a group is grandfathered in then they do not have to comply with this requirment of the health care reform.
With the health care reform we are now going to see plans required to cover preventive care. It should be very interesting to see what kind of impact these coverages have on premium. There is no doubt that these additional coverage will increase premium. The problem right now is no one knows what kind of premium increase these coverages are going to have. From a long term standpoint if everyone takes advantage of these first dollar benefits will it reduce costs? If someone can catch a health problem early then the treatment can be much more effective which could reduce larger treatments down the road. In the short period we all pay more in premium.
“If you have a new health insurance plan or insurance policy beginning on or after September 23, 2010, the following preventive services must be covered without your having to pay a copayment or coinsurance or meet your deductible, when these services are delivered by a network provider.”
Covered Preventive Services for Adults
Abdominal Aortic Aneurysm one-time screening for men of specified ages who have ever smoked
Alcohol Misuse screening and counseling
Aspirin use for men and women of certain ages
Blood Pressure screening for all adults
Cholesterol screening for adults of certain ages or at higher risk
Colorectal Cancer screening for adults over 50
Depression screening for adults
Type 2 Diabetes screening for adults with high blood pressure
Diet counseling for adults at higher risk for chronic disease
HIV screening for all adults at higher risk
Immunization vaccines for adults–doses, recommended ages, and recommended populations vary:
Hepatitis A
Hepatitis B
Herpes Zoster
Human Papillomavirus
Influenza
Measles, Mumps, Rubella
Meningococcal
Pneumococcal
Tetanus, Diphtheria, Pertussis
Varicella
Obesity screening and counseling for all adults
Sexually Transmitted Infection (STI) prevention counseling for adults at higher risk
Tobacco Use screening for all adults and cessation interventions for tobacco users
Syphilis screening for all adults at higher risk
Covered Preventive Services for Women, Including Pregnant Women
Anemia screening on a routine basis for pregnant women
Bacteriuria urinary tract or other infection screening for pregnant women
BRCA counseling about genetic testing for women at higher risk
Breast Cancer Mammography screenings every 1 to 2 years for women over 40
Breast Cancer Chemoprevention counseling for women at higher risk
Breast Feeding interventions to support and promote breast feeding
Cervical Cancer screening for sexually active women
Chlamydia Infection screening for younger women and other women at higher risk
Folic Acid supplements for women who may become pregnant
Gonorrhea screening for all women at higher risk
Hepatitis B screening for pregnant women at their first prenatal visit
Osteoporosis screening for women over age 60 depending on risk factors
Rh Incompatibility screening for all pregnant women and follow-up testing for women at higher risk
Tobacco Use screening and interventions for all women, and expanded counseling for pregnant tobacco users
Syphilis screening for all pregnant women or other women at increased risk
Covered Preventive Services for Children
Alcohol and Drug Use assessments for adolescents
Autism screening for children at 18 and 24 months
Behavioral assessments for children of all ages
Cervical Dysplasia screening for sexually active females
Congenital Hypothyroidism screening for newborns
Developmental screening for children under age 3, and surveillance throughout childhood
Dyslipidemia screening for children at higher risk of lipid disorders
Fluoride Chemoprevention supplements for children without fluoride in their water source
Gonorrhea preventive medication for the eyes of all newborns
Hearing screening for all newborns
Height, Weight and Body Mass Index measurements for children
Hematocrit or Hemoglobin screening for children
Hemoglobinopathies or sickle cell screening for newborns
HIV screening for adolescents at higher risk
Immunization vaccines for children from birth to age 18 —doses, recommended ages, and recommended populations vary:
Diphtheria, Tetanus, Pertussis
Haemophilus influenzae type b
Hepatitis A
Hepatitis B
Human Papillomavirus
Inactivated Poliovirus
Influenza
Measles, Mumps, Rubella
Meningococcal
Pneumococcal
Rotavirus
Varicella
Iron supplements for children ages 6 to 12 months at risk for anemia
Lead screening for children at risk of exposure
Medical History for all children throughout development
Obesity screening and counseling
Oral Health risk assessment for young children
Phenylketonuria (PKU) screening for this genetic disorder in newborns
Sexually Transmitted Infection (STI) prevention counseling for adolescents at higher risk
Tuberculin testing for children at higher risk of tuberculosis
Vision screening for all children
http://www.healthcare.gov/law/about/provisions/services/lists.html
This is the clearest explanation that I could find on the health care tax credit. This information was put together by 15 attorneys that specialize in interpreting these types of laws. This is very complicated. What was spun as a simple tax credit is very difficult to qualify and understand. A small business might end up spending more on professional services to get the credit than what the tax credit is worth.
Who is Eligible for the Credit? To be eligible for the Credit, an employer must be an “eligible small employer” for the year – requiring all 4 criteria to be satisfied:
1. taxable employer or a 501(c) tax-exempt employer (e.g., colleges and universities);
2. fewer than 25 full-time equivalent employees (“FTE”) for the taxable year;
- • FTE: In order to determine the number of FTEs, the employer must divide the total “hours of service” (but not more than 2,080 hours for an employee) of the”employees” by 2,080, and round down to the next lowest whole number.
- • Employees: For this purpose, count employees who perform services for the employer (which is a controlled group concept), excluding (1) partners, soleproprietors, 2% S-corp. owner, and 5% owners (along with any family members),and (2) seasonal employees unless they work more than 120 days during the taxable year (but always count these premiums).
- • Hours of Service: Hours include (1) each hour for which an employee is paid, orentitled to pay, for work performed; and (2) each hour for which an employee is paid, or entitled to pay, for periods the employee did not perform work due to a vacation, holiday, illness, incapacity disability, layoff, jury duty, military duty or leave of absence (maximum 160 hours for a single continuous period). This calculation may be a challenge depending on your pay types and payroll records;therefore, the IRS permits using either an 8 hours/day or 40 hours/week equivalency (which should be considered if it lowers the hours). We recommend reviewing the available options with your payroll department.
3. “average annual wages” for FTEs must be less than $50,000; and
- • Average Annual Wages: The employer divides the total Medicare wages paid by the employer for the “hours of service” during the taxable year by the number o FTEs, rounded down to the nearest $1,000. Unfortunately, this may not simply line up with box 5 of the W-2 because this is only wages attributable to “hours of service.”
4. employer pays “health insurance coverage” through a “qualifying arrangement.”
- • Heath Insurance Coverage: The Notice provides an expansive list of medical care coverage (whether insured or self-funded, which should include HRAsand HSAs), including HMO/PPO, dental, vision, long-term care, nursing home care, specified disease or illness, hospital indemnity, and Medicaresupplemental. The list excludes, among others, accident or disability insurance and worker’s compensation insurance. Importantly, the credit only covers employer paid premiums and does not include employee pre-tax or post-tax payments (e.g., section 125 payments are not eligible). Also, in general, State tax credits or premium subsidies are counted as employer paidpremiums and will not negatively affect the amount of the Credit.
• Qualifying Arrangement: The employer pays a uniform percentage of not less than 50% of the premium cost for the coverage. (Each type of coverage is tested separately for this purpose.) For 2010, the employer only needs to pay an amount equal to at least 50% of the premium for single (employee-only) coverage for each enrolled employee, and all premiums paid in 2010 will count (even if paid prior to the March 23, 2010 enactment date).
What is the Amount of the Credit? The maximum Credit is currently 35% of the employer paid “health insurance coverage” premiums (25% for tax-exempt employers). The maximum Credit is increased to 50% beginning in 2014 but will only be available if the coverage ispurchased through the Exchange. Importantly, the Credit is phased out rather quickly if the employer has more than 10 FTEs or the “average annual wage” exceeds $25,000. The following steps can be taken to calculate the 2010 Credit:
Step 1: Determine that you meet the definition of “eligible small employer” for the year.
Step 2: Determine the employer portion of the premium paid for the year for each “employee” (which includes any State subsidy).
Step 3: Take the lesser of Step 2 amount or the employer’s percentage of average small group market rates set forth in Revenue Ruling 2010-13 (by State) for each “employee” and sum this amount.
Step 4: Multiple Step 3 amount by 35% (25% for a tax-exempt employer).
Step 5: For a tax-exempt employer, enter the smaller of Step 4 amount or the aggregate federal income tax withholding and employer and employee share of Medicare taxes paid/withheld for the year (which will likely require a review of Form 944 and again help from your payroll department). For a taxable employer, enter the amount from Step 4.
Step 6: Reduce Step 5 amount by the sum of: (1) if more than 10 FTEs: (FTE – 10)/15 x Step 5, and (2) if “average annual wages” exceeds $25,000: (“average annual wages” – $25,000)/$25,000 x Step 5. (If negative, then the Credit is zero and stop here.)
Step 7: Reduce Step 6 amount to not exceed the employer’s net premium payments if State credits or subsidies for health insurance are available to the employer (e.g., amount actually paid by the employer excluding the State subsidy).
How is the Credit Claimed? For taxable employers, the Credit is claimed on the employer’s annual income tax return (e.g., Form 1120 and presumably Form 3800) a nonrefundablegeneral business tax credit (which can be carried forward 20 years and may offset AMT). Note that a deduction for the health care costs is not permitted for the amount of the Credit, which should be considered when determining the value of the Credit. For tax-exempt employers, the IRS is still working on how to receive the refundable credit (e.g., likely Form 990-T to offset unrelated business income tax or result in a refund, but for small employersthat may rarely file Form 990-T, a new schedule to Form 990/990-EZ would be preferred). When valuing the Credit for these employers, the loss of the deduction is not a factor but theCredit is limited to the annual employment taxes (federal income tax withholding andemployer and employee share of Medicare tax), which may impact the value of the Credit. Importantly, for all employers, the Credit has no impact on employment tax forms/deposits(e.g., no impact on Form 944 or related deposits), which is a which is a helpful clarification.
| The medical loss ratio (MLR) is the most important aspect of healthcare reform. This interpretation of this law is going to determine if the private industry stays in business. The one positive thing is the NAIC is in charge of interpreting the MLR.
The National Association of Insurance Commissioners was charged by Congress with considerable implementation responsibilities relative to PPACA, and NAHU continues to work with state regulators and the NAIC on a weekly basis on implementation issues of concern to health insurance agents and brokers. The primary issue the NAIC is currently working on of key interest to NAHU and its members is the crafting of definitions relative to what health insurance services will be covered by the PPACA’s minimum loss ratio (MLR) requirements.
The law gives the NAIC until December 31 to craft the MLR definitions, but HHS has requested that the NAIC complete its work early so that necessary regulations relative to MLR implementation can also be developed. HHS originally asked that the NAIC complete its work by June 1, but the NAIC rejected the timetable, stating it was too tight. Initially, the NAIC said they hoped to get their final work product to HHS by the end of July. However, during a conference call yesterday, Commissioner Steve Ostlund, chair of the NAIC’s Accident and Health Working Group, which is the primary committee within the NAIC working on the definitions, backed away from the end-of-July timeframe. While he was clear that the group will finish its work well in advance of December 31, he refused to specify exactly when they will finish.
The NAIC committees addressing this issue meet via conference call on at least a weekly basis, and the group is holding an interim meeting on the MLR issue in Washington the week of July 18. The NAIC will also hold their regularly scheduled meeting in Seattle from August 14-17, and NAHU will continue to be an active participant in all of these calls and meetings. Our most recent letter to the NAIC on the MLR issue was sent in conjunction with the entire Agent/Broker Alliance and can be found here.
In addition to the MLR issue, the NAIC is also charged with crafting a sample of the notice all health insurers must send to customers by March 2012 outlining plan benefits and costs. The goal of the NAIC committee is to translate complicated insurance-related terms and benefit information into summaries that can be easily digested by consumers. PPACA required the NAIC committee to be made up of not just insurance regulators, but also interested parties like insurers and consumer groups. NAHU CEO Janet Trautwein was appointed by the NAIC as one of the statutory working group’s formal members to represent the interests of health insurance agents and brokers.
The law gives the NAIC group until March 2011 to craft their sample forms, and the committee has begun meeting on a biweekly basis to accomplish that task. As with the MLR definitions, HHS has requested that the committee finish its work early—by the fall of 2010. NAHU will keep you apprised of the committee’s progress on the sample notices via future editions of Washington Update. |
