Archive

Posts Tagged ‘qualified health plans’

To “401 percenters” Affordable Care Act isn’t

February 21st, 2017 Comments off

WASHINGTON (AP) — Michael Schwarz is a self-employed business owner who buys his own health insurance. The subsidized coverage “Obamacare” offers protection from life’s unpredictable changes and freedom to pursue his vocation, he says.Brett Dorsch is also self-employed and buys his own health insurance. But he gets no financial break from the Affordable Care Act. “To me, it’s just been a big lie,” Dorsch says, forcing him to pay more for less coverage.Schwarz and Dorsch represent two Americas, pulling farther apart over former President Barack Obama’s health care law. Known as the ACA, the law rewrote the rules for people buying their own health insurance, creating winners and losers.Those with financial subsidies now fear being harmed by President Donald Trump and Republicans intent on repealing and replacing the ACA. But other consumers who also buy their own insurance and don’t qualify for financial help feel short-changed by Obama’s law. They’re hoping repeal will mean relief from rising premiums.

Source: News from The Associated Press

This is one of the major weaknesses of the Affordable Care Act’s reforms of the individual medical insurance market. Naturally, households earning in excess of 400 percent of federal poverty and who don’t qualify for subsidies are going to be unhappy since they bear the full brunt of premium increases as health plan issuers try to stabilize the market segment under the the law’s provisions by raising premiums. It’s no surprise these 401 percenters as I dubbed them aren’t in favor of keeping those rules in place since from their perspective, they’ve gotten a raw deal other than appreciating the rule requiring plans to accept them regardless of medical history.

The situation also points up the problem of a means-tested scenario of providing medical coverage to those not covered by employer-sponsored plans or Medicare. It’s far from seamless under the Affordable Care Act. The law created multiple categories of benefits and costs for this cohort keyed to household income: 1) Medicaid; 2) Qualified Health Plans offered on state health benefit exchanges with subsidies based on multiple income tranches; and 3) Unsubsidized plans, typically sold outside of the exchanges.

A more elegant, unified scenario is sorely needed, particularly given more households now rely on earnings outside of formal employment arrangements that come with medical benefits or are employed by small employers offering little or minimal 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. 

November elections increase likelihood of California revisiting single payer

December 21st, 2016 Comments off

Various media accounts report that California of all states stands to lose the most federal funding for health care coverage under the Patient Protection and Affordable Care Act – 20 to 25 billion dollars annually – if the law’s health insurance reforms are repealed as expected next year. The large majority of that sum comes from enhanced federal cost sharing under the law’s Medicaid eligibility expansion, representing more than $18 billion this year, according to this issue brief by the State Health Reform Assistance Network. Accounting for the balance are advance premium tax credits and cost sharing subsidies to offset the cost of qualified health plans purchased on the state’s health benefit exchange, Covered California.

Other media accounts portray California’s state policymakers as circling the wagons to fight this substantial loss of federal dollars given the potential for many low and moderate income households not covered by employer group plans to lose health coverage as well as extensive fiscal damage the state budget. But they are unlikely to prevail against the political will of Washington under the new administration and Congress and will have to consider alternatives. One likely candidate would be some form of single payer coverage, perhaps utilizing an all payer Accountable Care Organization (ACO) structure to hold down rising health care costs and financed by income, payroll and self-employment taxes.

In the previous two decades, single payer failed to gain voter approval when proposed as a ballot measure or as legislation. This time, however, with a supermajority vote margin gained in the November elections, legislative Democrats along with incumbent Democratic Gov. Jerry Brown could enact a single payer measure with — or without — support from Republican lawmakers. It would represent a far more radical reform than the Affordable Care Act. However, among the states, California has a sufficiently large population base and economy to go single payer if it chooses. The Golden State may well have to if it wants to carve out its own health reform destiny in the post Affordable Care Act era.

 


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. 

Growing Medicaid enrollment poses potential fiscal threat to state health benefit exchanges

June 24th, 2015 Comments off

The biggest threat to the future financial sustainability of the state health benefit exchange marketplace may be declining economic prosperity and the resulting polarization of household income strata, particularly in the states that have elected to expand Medicaid eligibility to households earning up to 138 percent of federal poverty and to single adults.

The reason? Low income households that qualify for Medicaid generally cannot purchase qualified health plans (QHPs) offered on state health benefit exchanges. If the growing Medicaid eligible population isn’t able to purchase QHPs, the exchanges don’t derive fees assessed on health plan issuers – their main source of revenue as federal establishment grant funds dwindle — that are based on a percentage of premium or set amount for each “effectuated” enrollee. (In states that have opted not to expand Medicaid eligibility, households earning at least 100 percent of federal poverty are eligible to purchase exchange QHPs.)

A Rand Corporation analysis of 2013-15 health coverage enrollment trends issued in June 2015 reported 6.5 million newly enrolled in Medicaid as of February 2015, outpacing by 58 percent the 4.1 million that enrolled in exchange QHPs. According to federal data, 71.1 million Americans were enrolled in Medicaid and the Children’s Health Insurance Program as of April 2015, 12.3 million more than the average for July to September 2013.

While exchanges realize no revenue from Medicaid enrollments, they do incur expense in handling them. Under the Patient Protection and Affordable Care Act’s “no wrong door” policy, exchanges are required to process eligibility and enrollment for both state insurance programs like Medicaid as well as QHPs. It’s also easier to enroll in Medicaid coverage. Unlike exchange QHPs that limit enrollment to part of the year during open enrollment periods, those eligible for Medicaid can enroll at any time of the year.

In California, an expansion state with the nation’s largest Medicaid program serving 12.2 million or about 1 in 3 Californians, enrollment grew by 41.4 percent between December 2013 and January 2015, according to the state’s Medicaid administrator, the Department of Health Care Services. Before that, a severe economic downturn added about 1 million new eligibles to the Golden State’s Medicaid rolls between 2007 and 2010.

Enrollment in California’s Medicaid program – known as Medi-Cal – far outstrips that of QHPs sold through the state’s health benefit exchange, Covered California. According to the federal Department of Health and Human Services, there were 1.4 million enrolled in Covered California plans as of February 2015 — about the same number for plan year 2014. To put that in perspective, there are roughly 61 Medi-Cal enrollees for every 7 enrolled in a Covered California QHP.

Colorado, a Medicaid expansion state that operates a state-based exchange, has seen burgeoning Medicaid enrollment tax the finances of its exchange. The state enrolled 1.2 million in Medicaid — an increase of 433,172 or 55 percent — between late 2013 and February 2015. For 2015, the state’s exchange, Connect for Health, enrolled 27,465 people in Medicaid or CHIP. That’s nearly twice the 15,566 enrolled in commercial plans, blowing a $7 million hole in its budget for increased call center costs handling complex Medicaid enrollments and prompting the exchange to seek reimbursement from the federal government, according to The Denver Post.

 


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. 

AHIP’s catastrophic plan proposal needs rethinking

July 16th, 2014 Comments off

America’s Health Insurance Plans (AHIP) has proposed the creation of a new Patient Protection and Affordable Care Act-compliant catastrophic individual health plan. (Link here) According to AHIP:

The new catastrophic plan would offer an AV (actuarial value) just below the current minimum requirement (covering an average of 60 percent of medical utilization costs) allowing for lower premiums, but would still include coverage of the law’s mandated essential health benefits, have no annual or lifetime benefit limits, and cover all preventive health services with zero cost-sharing for consumers. This would allow individuals and families eligible for premium subsidies to use that financial assistance to purchase the new plan, an option currently unavailable to consumers purchasing the ACA catastrophic plan.

Since bronze plans and catastrophic plans are quite close in actuarial value, have the actuaries found any potential for meaningfully lower premiums for these proposed catastrophic plans? In other words, is the medical services utilization of a population covered at 57 percent AV, for example, significantly lower than one covered at 60 percent such that it can produce meaningfully lower premiums? Especially given that the Affordable Care Act limits annual maximum out of pocket costs for in-network providers?

Not likely. But the apparent goal isn’t so much to reduce premium rates but rather to make catastrophic plans eligible to become qualified health plans (QHPs) sold in the state health benefit exchange marketplace and thereby eligible for advance premium tax credit subsidies. That has raised criticisms from some quarters that proposed catastrophic plans would not be beneficial to lower income individuals and families since the plans’ high cost sharing (deductibles, co-insurance and co-pays) would discourage their getting necessary care. But lower income people and especially those who utilize a lot of non-catastrophic (i.e. hospital inpatient) care aren’t likely to choose catastrophic plans and instead opt for plans with at least 70 percent AV (this level includes additional cost sharing subsidies for lower income earners).

If the goal however is to bring more relatively healthy people into state risk pools who are comfortable covering their own out of pocket costs for non-catastrophic care and using tax deductible health savings accounts to cover them, a more appealing catastrophic plan would be one that provides lower cost sharing for hospitalizations and other unexpected high cost medical events. Even with annual out of pocket cost limits of $6,350 for an individual plan and $12,700 for a family plan, a hospitalization can result in large medical bills, particularly for out of network hospitals used in an emergency situation that can double those limits.

 


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. 

Achieving single, integrated marketplace for individual, Medicaid health plans faces initial difficulties

April 14th, 2014 Comments off

Section 1413(c)(1) of the Patient Protection and Affordable Care Act requires each state to “develop for all applicable State health subsidy programs a secure, electronic interface allowing an exchange of data …that allows a determination of eligibility for all such programs based on a single application.” That means state health benefit exchanges must operate as integrated marketplaces offering both commercial insurance plans (referred to as Qualified Health Plans or QHPs) as well as Medicaid coverage for those whose household incomes meet their state’s Medicaid eligibility guidelines. The policy rationale – known as “no wrong door” and “one touch and you’re done” – is to reduce the ranks of the medically uninsured by simplifying the process of getting health coverage and removing roadblocks to enrollment.

Implementing that Affordable Care Act mandate, however, has been challenging from IT integration standpoint given the variety of legacy state computer systems that manage their Medicaid programs and state rules governing them, including those of the three dozen states using the federal marketplace, healthcare.gov.

That’s also been the case in California, where enrollment elegance has proven elusive. “I think we’ve oversold simplicity,” said Frank J. Mecca, executive director of the County Welfare Directors Association of California. Mecca made that observation today at a California Healthcare Foundation (CHCF) briefing in Sacramento on early consumer experiences with enrollment in the Golden State’s exchange, Covered California.

Mecca described the IT interface between the California Healthcare Eligibility, Enrollment and Retention System (CALHEERS) and the IT system that manages Medicaid eligibility and enrollment, the Statewide Automated Welfare System (SAWS) as a “clogged highway.” Consequently, Mecca noted, a large backlog of potential Medicaid enrollees remain stuck in the system. Mecca credited Covered California and the California Department of Health Care Services (DHCS), the state’s Medicaid administrator, for their efforts to remedy the backlog and improve the interface between the two IT systems. “It’s not an easy thing to fix,” Mecca added. “Things have improved tremendously, but we still have a long way to go.”

Both Mecca and another panelist at the briefing, Sonya Vasquez, policy director of the community-based health advocacy and policy organization, Community Health, said greater emphasis should be placed on marketing both Covered California QHPs as well as Medi-Cal, the state’s Medicaid program, particularly given Medi-Cal does not have set enrollment periods. They also said more effort should be made to make consumers aware in-person assistance is available for those seeking to enroll in coverage, including welfare department staff who can sign up applicants for either Covered California QHPs or Medi-Cal. (California is among those states have expanded Medicaid eligibility to 138 percent of federal poverty guidelines).

Consumers participating in focus groups conducted in early 2014 by PerryUndem Research/Communication were mostly uninsured and had substantial knowledge gaps for both Medi-Cal and QHP coverage and advance tax credit subsidies for the latter for households with incomes between 138 and 400 percent of federal poverty. (Click here for the full report on the findings presented at today’s CHCF briefing.)

 


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. 

Federal government liberalizes ACA definition of QHP to boost enrollment in troubled state exchanges

February 28th, 2014 Comments off

The U.S. Department of Health and Human Services’ Center for Consumer Information & Insurance Oversight issued guidance (.pdf) this week aimed at boosting enrollments in six state health benefit exchange marketplaces hobbled by glitches in their online enrollment web portals. The guidance issued February 27, 2014 allows the marketplaces to deem individuals eligible for retroactive coverage back to January 1, 2014 if they meet eligibility requirements but were unable to enroll in a plan by the upcoming March 31 plan year 2014 enrollment deadline due to the technical problems with the portals – described as an “exceptional circumstance” in the guidance.

The federal guidance uses the exceptional circumstance declaration to get around the definition of a qualified health plan (QHP) at Section 1301 of the Patient Protection and Affordable Care Act as one certified by an exchange exclusively for sale on the exchange marketplace. The guidance does so by including those who enrolled in non-QHPs – plans sold outside the exchange marketplace. Those enrollees would then be potentially eligible for subsidies in the form of advance premium tax credits and cost sharing reductions that would not otherwise be available to them. According to The New York Times, Oregon Gov. John Kitzhaber requested the federal government to allow the premium tax credits for people buying insurance outside that state’s troubled exchange.

This limited relief from the March 31 deadline for plan year 2014 enrollment and the extension of premium tax credit and cost sharing subsidies to non-QHPs will take pressure off the six troubled state exchange marketplaces that due to enrollment shortfalls may be unable to support themselves financially starting in 2015 when federal establishment grant assistance ceases as required by the Affordable Care Act. For more on this, click here.

 


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. 

California exchange retains former state budget chief as financial sustainability advisor

January 27th, 2014 Comments off

California’s health benefit exchange marketplace, Covered California, has retained the former head of the state’s Department of Finance to provide counsel relative to financial sustainability, budgeting and evaluation analytics, the exchange announced. Ana J. Matosantos served as the Golden State’s top budget official from 2009 to 2013 under the administrations of Arnold Schwarzenegger and Jerry Brown. Matosantos was given a six-month contract and will be paid $120,000 for her services. The appointment of Matosantos comes as the exchange prepares to transition starting in 2015 from federal grant support to an operating budget fully based on revenues from fees assessed on health plan issuers offering qualified health plans (QHPs) through the exchange.

In July of 2013, the California State Auditor deemed Covered California a “high risk” state entity due to uncertainty associated with projected enrollment in exchange QHPs and the associated impact on fee revenues. The State Auditor’s report concluded Covered California “appears to have engaged in a thoughtful planning process to ensure that it will remain solvent in the future,” adding that its “financial sustainability will continue to be an area of risk that will need to be closely monitored.” Last week, Covered California announced robust enrollment in QHPs during the last quarter of 2013 — the first half of the 6-month-long plan year 2014 initial open enrollment period — reporting slightly more than 500,000 Californians enrolled in QHPs during the quarter.

 


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. 

The next IT challenge for the health benefit exchange marketplace

December 27th, 2013 Comments off

In addition to the grueling IT challenge state health benefit exchanges have faced processing the initial surge of enrollments for 2014 coverage for individuals and small employers, their next IT test will be how well they serve as agents of the federal Internal Revenue Service.

The exchanges provide a critical tax reporting and monitoring function for the IRS, reporting small employer contributions to exchange qualified health plans (QHPs) offered their workers and advance income tax credits to subsidize QHPs purchased by individuals. The exchanges also track and report changes in monthly income of households purchasing tax-subsidized QHPs. Finally, the exchanges are charged with processing requests under the various exemption categories specified in the Affordable Care Act that allow individuals to avoid tax penalties for not having health coverage starting in 2014 or to qualify to purchase catastrophic plans.

The key test will be how well the exchanges work on an ongoing basis to obtain and process taxpayer reported data and interface with IRS data obtained through the federal data services hub that serves both federally operated and state-based exchanges. How proficiently and accurately the exchanges execute that function isn’t likely to be fully known until early 2015 when individuals and small businesses file their 2014 tax returns. That’s also when individuals must reconcile amounts they received as advance tax credits reported by the exchanges to purchase exchange-based plans with their actual earnings.

Presumably performing this critical tax function will be easier in the nearly three dozen states where the federal government is operating the exchanges. But with the IT snags in the enrollment process, there can be no guarantees it will go smoothly.

 


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. 

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. 

%d bloggers like this: