Tag Archive: state health benefit exchange marketplace

Hospitals Begin Subsidizing Exchange Premiums via Third Parties

Hospitals are concerned the carrot of advance premium tax credit subsidies for individual coverage offered in the state health benefit exchange marketplace and the stick of a tax penalty for being medically uninsured may not be enough incentive to ensure every patient coming through their doors is insured. Particularly for households earning between 100 and 150 percent of federal poverty, even though they pay no more than 2 to 4 percent of their incomes for an exchange qualified health plan and are eligible for cost sharing subsidies for plans with 70 percent actuarial value.

Cheryl Clark of Health Leaders Media reports hospitals in Wisconsin and Florida are teaming up with charities to supplement the exchange premium subsidies and have received approval from the federal Health and Human Services Department to do so. Click here for the story.

Apparently the hospitals’ economic calculation is it’s a better deal to get a tax write off to contribute to the charities to help cover premiums for exchange coverage than to run the risk some patients will allow their exchange coverage to lapse. That in turn increases the risk hospitals will have to retain collection agencies to dun patients for charges arising from uninsured care or write them off.

While it’s still early going with the Patient Protection and Affordable Care Act’s individual market reforms, this development shows hospitals — a primary beneficiary of expanding coverage to reduce those lacking health coverage — aren’t completely confident in the law’s ability to achieve this goal. Some observers note that while the Affordable Care Act provides low income people access to health insurance, many have never had coverage and have habitually sought care in hospital emergency rooms where federal law requires their medical condition be assessed and stabilized if necessary regardless of ability to pay for services.

 


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. 

Long waits frustrate callers to health exchanges | The Detroit News

Long waits frustrate callers to health exchanges | The Detroit News.

The take away from this account is expectations about how people do business with the health benefit exchange marketplace need some adjusting. While some people are comfortable purchasing health insurance online, many others are not. As California’s experience shows, lots of folks are using the web portal for that state’s marketplace, Covered California, to “showroom” plans — to browse what’s available and on what terms and conditions. They then call the customer service center to get more details before making a purchasing decision, overwhelming staff also pressed to respond to consumers having trouble enrolling online.

But enrolling in health insurance over the phone isn’t easy and quick either, particularly given that the transaction in the exchange marketplace involves an eligibility process to determine if an applicant qualifies for Medicaid or premium and co-pay subsidies. Adding to the enrollment challenge is many households having complex family situations.

Marketplace plan enrollment is proving for many more akin to preparing and filing an income tax return, particularly considering the amount of personal and financial information applicants must provide.

With the benefit of hindsight now that the plan year 2014 open enrollment period is nearly over, it’s clear that instead of heavily relying on web and phone enrollment, the marketplace needs to adjust to one more based on in-person enrollment using assisters, county social service workers and insurance agents.

 


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

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. 

Exchange executives, IT vendors held accountable for flawed launches

The health benefit exchange marketplace is essentially one that exists in cyberspace. As such, it is very dependent on a well-functioning IT platform. If that platform fails to work properly, the marketplace falters. And when that happens, those in charge look for someone to hold accountable.

So far, the list of those being called to account includes the primary IT contractor for the federally operated web portal, healthcare.gov, after last fall’s problematic rollout that stymied enrollments on the front end for consumers and the back end for health plan issuers. Its contract was not renewed.

The list also includes the executive directors of five state-run exchanges (Maryland, Oregon, Hawaii, Minnesota and most recently this week, Nevada) where enrollment problems can threaten the continued existence of the exchanges since they must under the Patient Protection and Affordable Care Act be financially self-sustaining starting next year on enrollment-based fees paid by participating plan issuers. Some of the IT contractors could also be called to account in the courts, where they face potential litigation claiming they didn’t deliver a functioning web portal per their contracts.

The take away for the health benefit exchange marketplace: it stands or falls on IT implementation.

 


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. 

Budget Model Uncertain for State Health Exchanges – ABC News

Budget Model Uncertain for State Health Exchanges – ABC News.

The Associated Press assesses the state-based health benefit exchange marketplace operating in 14 states and the financial challenges the exchanges face going forward in the post launch period.

Exchanges that struggled out of the gate and got off to a slow start could have trouble getting enough individuals and small businesses enrolled in order to be financially self-sustaining in 2015 and later years as required by the Patient Protection and Affordable Care Act.

 


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. 

“Family glitch” spotlights crack in employer-sponsored coverage

A foundational principle of the Patient Protection and Affordable Care Act is to preserve the private insurance market and the means by which most Americans access it – through employer-sponsored health plans. But employment-based coverage isn’t what it used to be. Responding to rising premiums and the general sharp upward trend in health care costs over the last decade or so, employers have shifted a growing share of premiums and out of pocket costs to employees. Some, particularly smaller employers, have opted not to sponsor coverage for an employee’s dependents or only do so provided the employee pays a surcharge to cover spouses and children. According to a report (.pdf) issued in April 2013 by the State Health Access Data Assistance Center and the Robert Wood Johnson Foundation, individuals enrolled as dependents in employer-sponsored health plans declined from 35.4 percent in 1999/2000 to 30.6 percent in 2010/2011.

While the Affordable Care Act assumes most Americans will continue to obtain health coverage through employment, the declining employer sponsorship of dependent coverage has created coverage gap the law does not address known as the “family glitch” or “kid glitch.” For employees, the Affordable Care Act allows them to purchase subsidized coverage in the health benefit exchange marketplace if they would have to budget more than 9.5 percent of their income toward their share of the premium. If an employee is offered coverage below that limit but cannot afford to pay an additional surcharge to cover his or her dependents, those dependents cannot obtain subsidized individual coverage in the state benefit exchange marketplace because the employee is offered what the law deems as affordable coverage. The dependent surcharges don’t count toward the affordability test.

As 2014 unfolds and people continue to attempt to enroll in coverage in the exchange marketplace, there will likely be more media accounts reporting on families such as this one in Oregon that fall into the “family glitch” coverage gap.

 


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

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. 

Obama administration’s messaging on ACA’s individual health market reforms lacking

The Obama administration is suffering a political pillorying this week on the imminent rollout of new market rules governing the individual health insurance market and the government-created health benefit exchange marketplace that began selling the plans October 1.

In large part, the criticism stems from weak messaging to communicate the reforms and why they are needed. There should be more emphasis on conveying these reforms affect the individual market where about five percent of Americans purchase their health coverage, clearly distinguishing these health plans from those purchased by employers that cover the large majority of Americans. As individual health plan issuers revamp and discontinue old plans to comply with the new market standards, the administration now finds itself having to defend its claims that most Americans could keep their current coverage when the individual market reforms take effect January 1, 2014. Viewed in the context of employer group coverage, that is generally accurate. But not necessarily so when it comes to individual coverage, an entirely different insurance product.

Perhaps more importantly, the administration and members of Congress who supported the 2010 enactment of the Patient Protection and Affordable Care Act need to more clearly explain why the law’s substantial government intervention in the individual market was needed in the first place. Administration officials have described the market as out of control from a regulatory standpoint, terming it like the “wild west.” But more fundamentally, the ACA aims to rescue this market because it was falling into oblivion. Individual plan issuers and those who buy this coverage were finding it increasingly difficult to get together in the marketplace on terms and pricing.

That market failure occurred because the market fell into a downward spiral where health plans became overly risk averse and excluded too many potential customers, restricting the flow of membership fees and premiums to pay claims. Plan issuers also violated a fundamental principle of insurance by splitting their customer base into small pools and were consequently unable to share the cost of claims across a larger group of customers. Finally, premiums for some individuals and families began to equal the cost of a mortgage payment and grew unaffordable. No market can function if potential customers cannot afford to buy the product or service being offered.

Whether the ACA can restore the individual market to healthy functioning remains to be seen, particularly given continued upward pressure on premiums from rising medical costs. The law’s market interventions could prove ineffective if too few young adults opt to buy coverage. Also if too many older people not yet eligible for Medicare who earn too much to qualify for tax credit subsidies for plans sold in the state health benefit exchange marketplace find premiums unaffordable and don’t buy coverage or request affordability exemptions from the individual mandate.

 


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. 

Renewed debate over individual mandate

The individual health insurance market reforms of the Patient Protection and Affordable Care Act are designed to restore a dysfunctional market by forcing sellers and buyers together with mandates on health plans to accept all individuals who apply for coverage and individuals to have some form of health coverage.

The biggest obstacle to health plan issuers and consumers meeting in the marketplace is the cost of coverage. Surveys have shown the top reason individuals forgo buying coverage if they are not covered under an employer or government plan is difficulty affording monthly premiums. Jettisoning the ACA’s coverage mandate on individuals however is now a renewed point of discussion and debate just as the mandate is about to take effect early next year such as this one at the Yahoo! Finance Blog:

Virtually all experts agree that, without a mandate, fewer people would enroll in Obamacare. Yet the federal subsidies that cut the cost of insurance for enrollees, depending on income, would still be a strong incentive for people to sign up, provided their income was low enough to qualify. “In terms of people participating, subsidies are far more important than the mandate,” says economist Sara Collins of the Commonwealth Fund, which promotes research into a more efficient healthcare system. “The main reason uninsured people don’t have coverage is usually affordability.”

The dropoff in enrollees would still raise costs, however. In formal studies, estimates range from a mild 2.4 percent increase in the cost of premiums for those who remained in the program, to a more problematic 27 percent rise, according to an overview of studies conducted by the Rand Corp. The estimates vary because it’s hard to predict what mix of healthy and sick people would still get insurance through a state-run exchange if there were no law requiring them to be covered. A higher percentage of healthy people would lead to lower premiums, while premiums would rise if the sick were overrepresented in the pool of insured.

I tend to agree with Collins the carrot of subsidies for coverage purchased in the state health benefit exchange marketplace likely provides a stronger incentive than the stick of the penalties for going bare given the prominence of the premium affordability issue.  That incentive isn’t there, however, for more than half of Americans in the individual market who earn too much to qualify for the subsidies according to a Kaiser Family Foundation paper issued in August. For this cohort, the penalty itself would have to suffice as an incentive under the new market rules.

But it may not be enough given these individuals would have to bear the full cost of the premiums without government assistance. Many might thus opt to instead pay the penalty or request an exemption from the mandate if premiums for the lowest cost “bronze” plans exceed 8 percent of their incomes. Remove the mandate and penalties and there’s even less incentive aside from the prospect of facing high list charges if misfortune puts them in a hospital – a gamble many might be willing to take. That prospect would likely frighten health plan issuers worried about adverse selection even with the mandate in place — and who insisted on the mandate as a keystone of the political compromise leading to the 2010 enactment of the Affordable Care Act to achieve a better spread of risk in state risk pools.

 


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: