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Archive for November, 2013

New transitional policy to mitigate IT delay affecting Medicaid, CHIP enrollment in federal exchange marketplace

November 30th, 2013 Comments off

The Obama administration this week announced a new transitional policy for the three dozen states where the federal government is operating state health benefit exchange markets to mitigate an IT glitch affecting enrollees eligible for state assistance programs. The U.S. Department of Health and Human Services issued guidance (.pdf) on the transitional policy November 29. It allows these states to submit abbreviated enrollee data files in order to allow eligibles to enroll for 2014 coverage.

This new, transitional opportunity for states to enroll individuals assessed or determined eligible by the FFM, using the information provided through the AT flat files, will ensure that enrollment can be completed in a timely way without regard to temporary file transfer system issues at either the federal or state level. It will also help states pace their workloads with respect to enrollment of residents who have applied through the FFM.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

States tell Obama: Let the market sort it out

November 22nd, 2013 Comments off

The Patient Protection and Affordable Care Act intervenes massively in the individual and small group health insurance markets. Effective January 1, 2014, it establishes standards on what health plans must offer, who can buy them, when and where they can purchase coverage, and who is eligible for subsidies to defray monthly premiums.

With any market overhaul on the scale of the ACA’s, there is bound to be disruption of the existing marketplace and push back from those adversely affected. Among the first are those who have individual plans that don’t comply with the new ACA coverage standards issued after March 23, 2010 and are thus not grandfathered under the ACA’s grandfathering provision. They are being hit with a double whammy. Not only are these policies being shut down by the end of the year. People who have them are being informed they will have to replace them with richer plans that meet ACA standards – and those more robust plans will cost them more. Their displeasure prompted the Obama administration to accommodate their concerns by giving states the option to keep those plans well into 2015.

So far, a lot of the states including most recently, California, have instead decided they will carry on and let the market sort it out given so little remaining time for regulators, state-operated health exchanges and health plan issuers to make the needed adjustments during the year-end holiday period that would only confuse consumers. State insurance commissioners cited a lack of consensus on the issue in declining a White House meeting this week.

Moreover, some consumers will still have some options to keep their existing coverage if their plan issuer takes advantage of an ACA loophole that allows issuers to “early renew” coverage by December 31, 2013, thereby extending their coverage for as late as December 31, 2014. Still, not everyone with these plans will be happy as they too will likely come with higher premiums thanks to the relentless underlying trend of rising health care costs.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Obama cites “insufficient” ACA grandfather clause for policy cancellation uproar

November 17th, 2013 Comments off

At a press briefing this week announcing his administration will allow individual and small group health plan issuers to temporarily continue offering plans that don’t meet new Affordable Care Act standards effective January 1, 2014, President Obama blamed a shortcoming in the law for the confusion and angst arising from cancellation notices plan issuers recently sent out informing policyholders their current coverage is being cancelled. That coverage will no longer be ACA compliant effective January 1, the notices explained, thereby requiring policyholders to get into new plans that meet ACA coverage standards that take effect that year. Here’s what the president said, according to a White House transcript of the briefing:

With respect to the pledge I made that if you like your plan, you can keep it, I think — and I’ve said in interviews — that there is no doubt that the way I put that forward unequivocally ended up not being accurate. It was not because of my intention not to deliver on that commitment and that promise. We put a grandfather clause into the law, but it was insufficient.

What is the “insufficient” ACA grandfather clause referred to by the president? It’s at Section 1251(a)(2) of the law:

 (2) CONTINUATION OF COVERAGE.—As revised by section 10103(d)(1). Except as provided in paragraph (3), with respect to a group health plan or health insurance coverage in which an individual was enrolled on the date of enactment of this Act, this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply to such plan or coverage, regardless of whether the individual renews such coverage after such date of enactment.

That means those enrolled in individual and small group plans as of the March 23, 2010 ACA enactment date can remain in them. But that’s’ where the insufficiency comes in. It doesn’t apply to plans that came about after the March 23, 2010 ACA enactment date. Those plans aren’t grandfathered and become legally obsolete for plan years starting January 1, 2014 and later. Rather than letting them fall through the cracks and to tamp down outrage over the cancellation notices, the administration is asking plan issuers and state regulators to take it up on a voluntary waiver offer to extend these plans out as far as September 30, 2015.

Congress is also acting to amend Section 1251(a)(2) to bring the orphan plans within the scope of the grandfather clause.

H. R. 3406 and S. 1617 would retroactively extend the clause to state:

(2) CONTINUATION OF COVERAGE- With respect to a group health plan or health insurance coverage in which an individual was enrolled during any part of the period beginning on the date of enactment of this Act and ending on December 31, 2013, this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply to such plan or coverage, regardless of whether the individual renews such coverage. (New text shown in italics).

Passed this week by the House, H.R. 3350 does not amend the ACA but rather enacts new law that allows health plan issuers with individual plans in effect as of January 1, 2013 to continue to sell the plans outside of the state health benefit exchange marketplace in 2014 and deems these plans grandfathered for the purposes of meeting minimum plan benefit standards effective that year.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Health plan issuers could keep pre-ACA plans in place through September 2015 under Obama administration guidance

November 15th, 2013 Comments off

President Obama this week offered an administrative fix to quell the uproar over the imminent cancellation of health plans in the individual and small group markets that will not be compliant with coverage standards for plans effective after January 1, 2014 under the Patient Protection and Affordable Care Act.

According to a fact sheet posted at whitehouse.gov, it would allow insurers to renew their current policies for current enrollees without adopting the 2014 market rule changes. State health plan regulators would have the final say as to whether plan issuers can leave in place plans based on the pre-1/1/14 standards, which prescribe minimum essential benefits and plan actuarial value.

Plan issuers however already had the option to keep their 2013 plans in place though 2014 before this week’s presidential announcement, courtesy of what has been termed a “loophole” in existing federal regulations. I blogged about the loophole back in April. Plan issuers can use it to issue a one-year policy covering all of 2014 under the pre-1/1/14 rules as late as December 31 of this year and simply call it a 2013 plan, exempting it from Affordable Care Act standards.

With this week’s action, the administration gave plan issuers even more leeway to keep using pre-ACA plans. If the plans were in effect as of October 1, 2013, they could remain in effect through September 30, 2015 — and possibly even later — per this November 14, 2013 letter (.pdf) to state insurance regulators:

Under this transitional policy, health insurance coverage in the individual or small group market that is renewed for a policy year starting between January 1, 2014, and October 1, 2014, and associated group health plans of small businesses, will not be considered to be out of compliance with the market reforms specified below under the conditions specified below. We will consider the impact of this transitional policy in assessing whether to extend it beyond the specified timeframe.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Insurers nervous about Obamacare ‘fix,’ say it could upset markets – Health Exchange – MarketWatch

November 14th, 2013 Comments off

Insurers nervous about Obamacare ‘fix,’ say it could upset markets – Health Exchange – MarketWatch.

Some health plan issuers didn’t like grandfathering of pre-3/23/10 plans, concerned about the actuarial and risk pool impact of splitting the individual market into two segments: the “old” and the “new” markets as termed by President Obama at today’s briefing.  The old market can operate under pre-Affordable Care Act standards, which mandate specific benefits and minimum actuarial value for all plans sold after January 1, 2014.

Now that states will have the option of temporarily extending post- 3/23/10 plans as Obama announced today, plan issuers complain actuarial projections upon which they based their new offerings on are being thrown out of kilter. They also worry those buying new plans subject to the ACA standards for benefits will be those more likely to use them, threatening the actuarial stability of the risk pool for those covered under the new plans.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Potentially problematic issues in ACA 2014 rollout for exchanges, employers

November 13th, 2013 Comments off

There are a couple of potentially problematic issues as major components of the Patient Protection and Affordable Care Act roll out now and into 2014 for state health benefit exchanges and large employers.

For the exchanges, it’s verification of household income of applicants for individual coverage. Eligibility for both advance tax credits used to subsidize the purchase of qualified health plans (QHPs) and for Medicaid benefits are means tested based on family size and household income. The rub here is like that standard investment caveat: past performance does not necessary predict future performance. The same principle applies to household incomes, particularly in a sketchy economy still trying to regain solid footing five years after the 2008 economic downturn. What households earned in 2013 does not necessarily mean that’s what they will earn in 2014, the time frame that determines their eligibility for Medicaid and QHP premium subsidies. Timothy Jost describes the problem in this post at the HealthAffairs Blog:

[V]erification in advance of how much lower-income American families will earn over a year is a fantasy. Lower-income Americans often work in part-time, intermittent, or seasonal jobs and are paid hourly wages, making predicting income exactly a year in advance simply not possible.

The agreement to end last month’s federal government shutdown requires state health benefit exchanges pre-verify the eligibility of individuals applying for premium tax credits and cost sharing reductions. By January 1, 2014, the federal Department of Health and Human Services must describe to Congress the procedures used by the exchanges verify eligibility for premium tax credits and cost-sharing reductions. This summer, HHS issued guidance informing exchanges to attempt to verify income using Internal Revenue Service and Social Security income data provided state exchanges via the federal data services hub.

The income verification issue could end up further complicating an already difficult first year rollout of the exchange marketplace. It may also be overblown in terms of concern that those seeking premium and cost sharing assistance and Medicaid will get more than they are entitled. There are well established income tax planning practices enrollees can keep in mind when they sign up for coverage through the exchange marketplace. Employees know if they claim too many withholding exemptions, they could get stuck owing taxes when they file. Most err on the side of caution and declare too few in order to get a refund of what amounts to an interest free loan to the government. Self employeds pay quarterly estimated taxes and know if they pay too little, they face a big tax bill the following year and possible penalty for underpayment of quarterly amounts due. Enrollees can be counseled to keep these comparative examples in mind to avoid a big tax bill as well as potential penalties if they fraudulently misrepresented their incomes in order to qualify for subsidies or Medicaid.

Employers face potential legal hazard in 2014 as they prepare for the large employer mandate that takes effect in 2015. Those that reduce employees’ average weekly hours to less than 30 in order to avoid having them counted as full time employees for the purposes of the Affordable Care Act’s requirement that employers of 50 or more full time employees provide them health coverage could find themselves in court. Employment law firms warn these employers could face legal exposure under Section 510 of the Employee Retirement Income Security Act of 1974 (ERISA), which bars employers from firing, disciplining or discriminating against employees for the purpose of interfering with their access to employee benefit plans. Adam C. Solander and Elizabeth B. Bradley of the law firm Epstein Becker Green explain at Law360:

In the context of the employer mandate, plaintiffs are likely to argue that an employer’s workforce management efforts interfered with an employee’s right to health coverage. The most likely ERISA 510 claim would seem to involve an employee who averaged 30 hours a week previously. If such an employee’s hours were capped below 30 hours a week, arguments could be made that such a change was made with the intent to deny that individual a right to which he or she would have been entitled. While this scenario seems to be the most likely Section 510 claim, arguments could be made that an employer’s workforce management practices could violate Section 510, regardless of the number of hours the employee worked previously.

Provider networks. For health plan issuers, maintaining networks that offer access to a sufficient number of medical providers to people in their communities could prove challenging, particularly as plan issuers narrow their networks in order to hold down premium rates. Exchanges will also be put to the test to ensure revamped provider listings for Qualified Health Plans are accurately listed on the exchanges.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Symbolic wellness programs will remain just that – and get bubkes for results

November 13th, 2013 Comments off

Yahoo! provides an example of a highly symbolic participatory wellness program that isn’t likely to significantly improve the health status of Yahooligans.

Here are some excerpts from the story by Bloomberg BusinessWeek:

In an effort to whip its desk-bound, tech-loving workforce into shape, Yahoo! (YHOO) is offering free Jawbone Up fitness bands to all employees—with a few conditions. If workers want use the gizmo (retail price: $129.99) to tally their every action while exercising, commuting, sitting, and eating all that free Yahoo food, they must first agree to run or walk at least 100 miles in 30 days.

While commuting? Few Yahooligans likely walk or cycle to the Yahoo! campus, instead most arriving on site after long and stressful Silicon Valley commutes (among the worst in the nation) that degrade their health status.

Yahoo already offers such old-fashioned health resources as onsite fitness centers with classes in yoga, cardio-kickboxing, pilates, golf, and so forth. Even those who work in locations without a fitness center receive $100 quarterly reimbursements toward health-club memberships, according to the company’s website. Sure, the wristbands can reveal depressing data about how many hours a person sits in front of a computer monitor and how many doughnuts are consumed. Whether the results can persuade a user to hit the gym isn’t something a device can control.

Yahooligans stressed out from the commute can release some of that stress in the on site fitness center. While management decreed earlier this year all Yahooligans must to show up on campus every work day, hopefully it doesn’t expect them to spend the day in their cubicles since that isn’t going to score points on their fitness bands.

Instead of nannying staff, a better wellness approach than this highly symbolic, one size fits all PR stunt would be would be to treat people as adults and give them control over when and where they work. Wellness is a personal lifestyle choice. People must have the freedom to make that choice according to their individual needs and devote the necessary time to achieve it.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Medicaid enrollment glitch in federally operated state exchanges impairs “no wrong door” policy, initial enrollment for QHP issuers offering Medicaid plans

November 12th, 2013 Comments off

Today’s New York Times follows on a previous report by The Washington Post on a glitch involving the eligibility and enrollment process in state exchange marketplaces operated by the federal government. According to The Times, the federal website HealthCare.gov that serves as the online enrollment portal in those states is currently unable to electronically transfer applications to state Medicaid offices for individual plan applicants whose incomes qualify them for Medicaid under the guidelines established by their states.

That’s a serious issue for a couple of reasons. The exchanges are intended to operate as a single, integrated marketplace for both subsidized commercial insurance plans (referred to as Qualified Health Plans or QHPs) and Medicaid. The idea is affording people a single source for coverage regardless of household income makes it easier to enroll, thereby reducing the number of medically uninsured individuals. However The Times story notes under the current circumstance, those determined eligible for Medicaid will have to make a separate application though their state Medicaid offices, adding another step that could discourage enrollment.

Second, the glitch is problematic for QHPs that offer both commercial health plans as well as Medicaid managed care plans since it could deter initial enrollment of Medicaid eligibles in these plans. According to an issue brief (.pdf) by the Association for Community Affiliated Plans (ACAP), QHP issuers in 33 states and the District of Columbia have both commercial and Medicaid managed care plans, with 39 percent operating Medicaid plans in the same state. Having both commercial and Medicaid plans in the same state exchange marketplace could help reduce administrative costs and coverage gaps when enrollees’ incomes fluctuate across income guidelines for commercial and Medicaid plans, the ACAP brief notes.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Multiple factors skew plan year 2014 enrollment toward older population

November 8th, 2013 Comments off

The Patient Protection and Affordable Care Act seeks to achieve a better spread of risk in state individual health insurance markets by requiring heath plan issuers to accept all applicants for coverage without medical underwriting and treating all enrolled individuals as part of a single statewide risk pool effective January 1, 2014. In addition, the law bars individuals from “going bare” without any form of health coverage under pain of a tax penalty. This provision is largely aimed at young adults who aren’t covered under their parents’ plans and are less likely than older people to incur high medical treatment costs. To broaden the pool to include them, the ACA also imposes a flatter premium pricing structure so that older individuals can be charged a maximum of three times the rate charged young people.

Policy wonks worry too few young adults will enroll in coverage, leading to an actuarially unsustainable risk pool overly populated by higher cost older individuals. Those concerns are underscored by early reports on state health benefit exchange enrollment such as this Wall Street Journal item indicating initial exchange enrollees tend to be older. While the WSJ story characterizes the trend as unexpected, I think it’s entirely expected since the greatest pent up demand likely exists among older individuals not yet eligible for Medicare and who have gone without coverage – in many instances for years – due to unaffordable premiums or rejection by health plans based on their health histories.

Socio-economic factors are also likely to initially hinder the goal of getting sufficient numbers of so-called “young invincibles” into state risk pools to better balance out risk for plan issuers. The vast majority of working age Americans continues to equate health coverage with employment. This is probably even more the case with young adults more dependent on employment income than older adults who have more education and work experience and thus in a better position to sustain themselves though self-employment. Over the short term, going without coverage while seeking a job with health benefits (and paying the modest $95 first year tax penalty) may factor as a rational financial calculation for many unemployed young adults, particularly when money is tight and there’s little to pay for individual health coverage.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Wellness isn’t just in the “workplace”

November 6th, 2013 Comments off

The Patient Protection and Affordable Care Act’s use of modified community-based rating and its outlawing medical underwriting has drawn criticism that the policy unfairly subsidizes those who lead unhealthy lifestyles and drive up costs. While individual and small group market health plan issuers can no longer base premiums on an individual’s lifestyle or health status for coverage beginning January 1, 2014 or later, a type of risk rating is available to employers under the law. It’s in the form of “workplace wellness” programs that allow employers to reduce what employees have to pay toward their health insurance or offer financial incentives if participating employees meet specified health status metrics such as weight, BMI, blood pressure and serum cholesterol.

Studies of the effectiveness of these programs yield mixed results, suggesting they have only limited influence on the health status of employees, this Atlantic article indicates. Since engaging in health promoting activities is largely driven by peoples’ personal choices and circumstances, I believe the best thing employers can do is to maximize their employees’ ability to make healthy lifestyle choices rather than essentially bribing them to do so. That means affording them the ability to devote the necessary time to properly engage in them.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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