Smokers and the New Health Care System

The ACA will be expensive for smokers. Under a provision of the federal health care law, states can allow health plans to charge tobacco users up to 50 percent more for their health insurance premiums. The provision allowing for a “tobacco surcharge” was designed in part to encourage smokers to quit. But critics say the smoker’s surcharge is discriminatory, which goes against the spirit of The ACA. A low-income person buying a $6,000 policy who qualified for a subsidy might see the price of the policy drop to $3,000, but the tobacco surcharge would knock it back up to $6,000 again.
The Center for Disease Control puts the nation’s annual price tag for smoking at more than $190 billion in medical care and lost productivity. Nearly 20% of people in the United States still smoke.

Higher Premium Rates and Less Employer Coverage under Health Reform

Let’s take a look at the technical name of the health   reform law – the Patient Protection and Affordable Care Act. The law,   which seeks to expand affordable health coverage to all Americans, isn’t   exactly going as planned. While we have been saying this from the beginning,   it seems that everyone else is just getting the memo. Several recent studies   have indicated that health insurance premiums will, in fact, likely rise   under health reform, which will unfortunately result in some employers   dropping coverage for their employees. HHS Secretary Kathleen Sebelius even   admitted this last week. In a statement, she noted that costs will likely in   the individual market as a result of health reform.On Thursday, the Robert Wood Johnson Foundation released a study showing that employer-sponsored coverage   has dropped dramatically over the last decade. In 2000, about 70% of   employers provided coverage for their employees; by 2010, that percentage   dropped to 60%.

This accounts for a change of 12 million people losing health insurance   coverage. In the private sector, employers offering coverage fell to about   52% in 2011 from 59% in 2000. While unemployment rates also rose over the   course of this study and account for at least part of the declined rate, the   price of insurance coverage is still largely at fault. While we see this   issue everyday, the study also sheds light on the fact that the average   annual premium for individuals with work-based coverage doubled in the last   decade, from about $2,500 to about $5,000. Unsurprisingly, family premiums   also skyrocketed from about $6,400 to $14,500. While these rates vary by   state, no state saw an increase in employer-sponsored coverage over the last   decade. Michigan, Indiana and South Carolina, for example, saw the steepest   declines in employer-backed coverage, at about 15 percentage points each.

PPACA, however, is supposed to cover 27 million more Americans over the next   decade. That, taken with the 12 million who lost coverage in the last decade,   adds up to 15 million more Americans covered as a result of the law. Health   reform, however, has experienced several bumps in the road since the   Administration started rolling out regulations and drawing blueprints for the   exchanges. These bumps have already resulted in higher costs and delayed   implementation deadlines that ultimately exacerbate the healthcare issues in   this country.

Consumer Groups upset about delay

Consumer Groups Protest Delay Of ACA Out-Of-Pocket Expense Cap.

Kaiser Health News Share to FacebookShare to Twitter (4/10, Appleby) reports that several consumer groups are asking the Obama Administration to reconsider its decision not to enforce the Affordable Care Act provision capping out-of-pocket expenses an insurance plan can ask an individual to pay. Under the ACA, the “out-of-pocket cap…is estimated to be about $6,250 for an individual.” However, groups including the American Cancer Society warned that because of the delay, “insurers and employers may be able to keep offering health plans next year that include out-of-pocket caps for individuals of $12,500 or more.”

Clarification for Small Business Owners

Clarification for Small Business Owners
A high percentage of small business owners do not understand the Affordable Care Act (ACA) health insurance mandate, according to recent surveys.
Following is clarification of the ACA mandate for the small business owner:
  1. Small groups do not need to offer or provide coverage.
  2. Large groups must offer coverage to full time employees and dependents (defined as children not spouses) or be subject to a penalty. (often referred to as Play or Pay)
  3. Individuals must have coverage (the “individual mandate”) unless they are covered through their employer or some other source.  If they do not have coverage, the penalty in 2014 is $95 or 1% of income for each individual.
Q. What is a Large Group for determining if they must offer coverage?
A.  A Large Group is a company that has 50 or more Full Time Equivalent employees.  Full Time Equivalent means a combination of full time employees (average 30 hours/week) and part time employees. Thus, for example, a group with 30 full time employees and 40 half time employees would equal 50 Full Time Equivalent Employees and would be required to offer coverage.
Q. Must a Large Group employer cover or provide coverage for all employees and dependents?
A. No. The Large Group employer must offer minimum value, affordable coverage to all Full Time employees and their dependents (defined as children not spouses). Offer means that the full time employees are given an opportunity to enroll. Minimum value coverage means that the plan covers at least 60% of medical expenses. Affordable means that the cost of employee only coverage cannot exceed 9.5% of that employee’s W-2 wages. 
Please contact us for more information about Employer Shared Responsibility/Play or Pay.
Surveys also reveal that a majority of small business owners are not able to define the meaning of an Exchange.
(In California the Exchange is called Covered California.)
Q. What is an Exchange?
A. In general, an Exchange is a marketplace where individuals or small groups can buy health insurance.   The Exchange is an alternative to the traditional private marketplace.  There are two types of Exchanges under Covered California.  The Individual Exchange and the SHOP (Small Group Health Options) Exchange.
Q. Who will sell insurance within Covered California?
A. Although not yet finalized, some of the insurance carriers, but not all, who sell insurance currently in the private market, will also offer health insurance through Covered California. 
Q. Will there be savings for small employers in the SHOP Exchange?
A. Rate information is not yet available.  The SHOP Exchange officially opens for enrollments October 1, 2013.
Q. Are Small Groups required to purchase their coverage through the Exchange?
A. No. Small Groups and individuals are not required to go through the Exchange for coverage. They have the right to continue obtaining insurance in the private market as they have prior to the reform law.
Q. Will there be savings for individuals who purchase health insurance through the Exchange?
A.  For those whose income is up to 400% of the Federal Poverty Level, financial assistance may be available when health insurance is purchased through the Exchange.

California health exchange to create 500 call center jobs in Rancho Cordova

CalifCalifornia health exchange to create 500 call center jobs in Rancho Cordovaornia health exchange to create 500 call center jobs in Rancho Cordova
The Sacramento Bee by Peter Hecht –
March 23, 2013:

City and state officials confirmed Friday that Covered California, the organization instrumental to carrying out the federal health insurance overhaul in California, has signed a local lease to open a state service center on White Rock Road in Rancho Cordova.

“We welcome them,” said city economic development director Curt Haven. “They complement our other companies located in Rancho Cordova. We have a ready and willing workforce that will easily fill those jobs.”

The Covered California call center is expected to open in August. Its 500 employees, including call center agents, managers and technology specialists, will work in a city that is already home to call centers for Dignity Health, Sutter Health, Delta Dental and Vision Service Plan.

The nearly 60,000-square-foot Rancho Cordova site will be one of two statewide call centers for Covered California. A second state center is expected to be announced for another Central Valley location. And Contra Costa County will be the site of a Covered California call center in partnership with the state’s 58 counties.

“We’re just really happy that we are going to be able to move forward on this,” said Covered California spokesman Dana Howard, adding that he expects the Rancho Cordova site to be fully staffed by this fall. “This really allows Covered California to move forward with getting the millions of uninsured in California enrolled with affordable health coverage. We have a tight window to do this in. And this is just a huge milestone.”

The national Affordable Care Act, signed into law by President Barack Obama, requires state health care exchanges to be up and running by 2014.
Before Jan. 1, Covered California, which recently received a federal grant of $674 million, plans to use some of its funds to develop a website where customers can shop for insurance policies.

Covered California expects to create seven geographical exchanges reflecting different health care markets in the Sacramento region, Northern California, the San Francisco Bay Area, the San Joaquin Valley, the Central Coast, Los Angeles and the rest of Southern California.

The state health exchange will serve households earning up to four times the federal poverty level, equal to $92,200 for a family of four in 2012. State leaders also intend to expand Medi-Cal in California, relying heavily on federal dollars.

News of the new Covered California call center in Rancho Cordova comes six months after cable giant Comcast announced it was closing its California call centers – including a Natomas office that employed 300 workers.

No Pre-Existing Conditions from birth to age 19

No pre-existing condition limits from birth to age 19

Do you have a child under 19 years old? He or she can’t be denied health care coverage because of a “pre-existing condition”. A pre-existing condition is a health problem that was discovered or treated before applying for the coverage. This applies whether your child was covered under a different plan or had no coverage at all.

Here’s what’s different

In the past, health plans could limit or deny benefits or coverage for children because of a pre-existing condition.

How it impacts you

Now your health plan can’t deny your child’s coverage because of a health problem or disability that developed before you applied for coverage.

My 13-year old daughter was hospitalized with asthma recently. My health plan denied payment for the hospitalization. They said that, under our policy, my daughter’s asthma is considered a pre-existing condition. Is that right?

No. Under the new law, the health plan can’t deny payment for the hospitalization based on your daughter’s pre-existing asthma condition.

Does this law apply whether or not my child already had coverage?

Yes. Under any circumstance, your health plan can’t deny coverage for your child based on a pre-existing condition.

Does the law apply to an individual health policy I bought for my family in 2011?

Yes. However, it does not apply to grandfathered individual health policies bought before March 23, 2010.

What can I do if my plan tries to deny coverage because of a pre-existing condition?

Under the Affordable Care Act, you have the right to appeal.

I am 30 years old. Does this law apply to me?

No, not yet. But in 2014, this protection will be extended to Americans of all ages.

Health Care Reform at a Glance

Health care reform at-a-glance

Affordable Care Act (ACA) Reinsurance Fee

The Affordable Care Act (ACA or health care reform law) provides that each state create a transitional reinsurance program during the first three years (2014-2016) of the exchange’s operation. If a state does not create a reinsurance program, HHS will operate the reinsurance program in that state.

The program aims to help stabilize premiums for coverage in the individual market and lower the effects of adverse selection. This is done by giving reinsurance payments to issuers that sign up high-cost individuals in non-grandfathered individual market plans.

Reinsurance contributions and payments

As stated by the Department of Health and Human Services (HHS), the reinsurance program requires health insurers and third-party administrators (TPAs) to make contributions to the reinsurance program to reinsure individual market insurers who cover people with expensive claims. The contributions are required for both fully insured and self-funded plans. The group market is required to make these contributions, but will not receive payments under the reinsurance program. Reinsurance payments are only provided to individual market insurers who insure high claimants in non-grandfathered plans. A

recent notice proposes that HHS collect all contributions under a national rate, estimated to be a fee of $5.25 per member per month in 2014.* The fee will be included in monthly billing statements for fully insured plans.

*This is an estimated amount and may be subject to change; amount may vary by state.


Attachment point – the annual threshold dollar amount per individual claimant of claims’ costs paid after which an issuer can take reinsurance payments ($60,000)


Reinsurance cap – the payment limit per individual claimant when an issuer can no longer get reinsurance payments ($250,000)

Coinsurance rate – the share of an issuer’s claims costs that are above an attachment point and below a reinsurance cap for the benefit year (80%)

Those three factors are decided by HHS or by the state with HHS approval. Any payments to issuers will depend on high claimants from their individual market enrollees.

State-operated versus HHS-operated transitional reinsurance programs

final rule published by the HHS March 23, 2012 says that states can choose to either:

Launch their own transitional reinsurance program, or

Have HHS create the program on their behalf, whether or not they set up a state-run exchange. States that decide to run their own program will be responsible for all reinsurance payment functions.

If HHS runs the transitional reinsurance program, it will also handle the reinsurance payments. A

recent HHS bulletin states that it is deciding how reinsurance payments will be identified, calculated and given to individual market issuers by HHS-operated programs.

The table below has key dates related to HHS-operated reinsurance program.

Key dates for HHS-operated reinsurance programs

Questions and answers

Q. Who determines how much the ACA Reinsurance Fee will be and how is it calculated?

A. The ACA Reinsurance Fee rates can vary by state, but should be the same for all health insurers and TPAs in that state. The fee we are currently quoting is based on preliminary information provided by HHS. The states must publish final benefit and payment parameters by March 1 of each year for the following year.

Q. Is there any way to reduce or eliminate the ACA Reinsurance Fee?

A. The ACA Reinsurance Fee is part of a temporary program which will decline for three years and then be eliminated.

Q. What is the anticipated impact of this fee?

A. There is an anticipated impact to health insurance rates in 2014.

Q. What type of rate impact is expected?

A. The most significant changes to rates due the ACA Reinsurance Fee and all other health care reform provisions in 2014 will be in markets for individuals and small employers, where the rating constraints, product constraints, new benefit mandates and new taxes will have the biggest impact. The impact will vary significantly between each individual and each small employer.

Q. What type of analysis has been done on the expected impact of all the health care reform provisions?

A. Examples of analyses that show the range of impact include the following:

A report, led by former CBO Director, Doug Holtz-Eakin of the American Action Forum, looked at the specific impacts of the ACA reforms taking place in 2014 and how premiums may be affected. The survey found:

On average, premiums for young, healthy people in the individual and small group market would jump 169 percent

Costs for older, less healthy people in the individual and small groups markets would decrease by an average of 22 percent

A study by the actuarial firm Milliman in Ohio that shows the range of changes expected for small employers will range from a decrease of 25 percent to an increase of 130 percent

In Indiana, Milliman found that the increase in premiums in the individual market beginning in 2014 could range from 75 percent to 95 percent, and rates for others would decrease

Other studies conducted by Dr. Jonathan Gruber of MIT in Maine, Wisconsin, Minnesota, and Colorado found that premium impacts in the individual market may increase as much as 85 percent and increases in the small group premiums may increase more than 20 percent

This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.

Anthem Blue Cross and Blue Shield is the trade name of: In Colorado: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc. In Connecticut: Anthem Health Plans, Inc. In Georgia: Blue Cross and Blue Shield of Georgia, Inc. In Indiana: Anthem Insurance Companies, Inc. In Kentucky: Anthem Health Plans of Kentucky, Inc. In Maine: Anthem Health Plans of Maine, Inc. In Missouri (excluding 30 counties in the Kansas City area): RightCHOICE® Managed Care, Inc. (RIT), Healthy Alliance® Life Insurance Company (HALIC), and HMO Missouri, Inc. RIT and certain affiliates administer non-HMO benefits underwritten by HALIC and HMO benefits underwritten by HMO Missouri, Inc. RIT and certain affiliates only provide administrative services for self-funded plans and do not underwrite benefits. In Nevada: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc., dba HMO Nevada. In New Hampshire: Anthem Health Plans of New Hampshire, Inc. In Ohio: Community Insurance Company. In Virginia: Anthem Health Plans of Virginia, Inc. trades as Anthem Blue Cross and Blue Shield in Virginia, and its service area is all of Virginia except for the City of Fairfax, the Town of Vienna, and the area east of State Route 123. In Wisconsin: Blue Cross Blue Shield of Wisconsin (BCBSWi), which underwrites or administers the PPO and indemnity policies; Compcare Health Services Insurance Corporation (Compcare), which underwrites or administers the HMO policies; and Compcare and BCBSWi collectively, which underwrite or administer the POS policies. Independent licensees of the Blue Cross and Blue Shield Association. ® ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association.

More Physician Plan to Retire

WASHINGTON — THURSDAY, March 21, 2013 (MedPage Today) — Most physicians have a pessimistic outlook on the future of medicine, citing eroding autonomy and falling income, a survey of more than 600 doctors found.

Six in 10 physicians (62 percent) said it is likely many of their colleagues will retire earlier than planned in the next 1 to 3 years, a survey from Deloitte Center for Health Solutions found. That perception is uniform across age, gender, and specialty, it said.

Another 55 percent of surveyed doctors believe others will scale back hours because of the way medicine is changing, but the survey didn’t elaborate greatly on how it was changing. Three-quarters think the best and brightest may not consider a career in medicine, although that is an increase from the 2011 survey result of 69 percent.

“Physicians recognize ‘the new normal’ will necessitate major changes in the profession that require them to practice in different settings as part of a larger organization that uses technologies and team-based models for consumer (patient) care,” the survey’s findings stated.

About two-thirds of the survey responders said they believe physicians and hospitals will become more integrated in coming years. In the last 2 years, 31 percent moved into a larger practice, results found. Nearly eight in 10 believe midlevel providers will play a larger role in directing primary care.

Four in 10 doctors reported their take-home pay decreased from 2011 to 2012, and more than half said the pay cut was 10 percent or less, according to Deloitte. Among physicians reporting a pay cut, four in 10 blame the Affordable Care Act (ACA), and 48 percent of all doctors believed their income would drop again in 2012 as a result of the health reform law.

Other findings:

  • 26 percent believe Medicare’s sustainable growth rate formula will be    repealed in the next 1 to 3 years
  • One in 10 believe medical liability reform will pass Congress in the    next 1 to 3 years
  • A quarter of physicians would place new or additional limits on    accepting Medicare patients if there were payment changes
  • 55 percent of physicians believe the hospital-doctor relationship will    suffer as admitting privileges are put at risk to comply with hospital    standards of meaningful use
  • 31 percent gave the U.S. healthcare system a favorable grade of    “A or B” compared with 35 percent in 2011

Despite those pessimistic views, seven of 10 said they were satisfied about practicing medicine, although that number was lower for primary care providers and higher for younger age groups, the survey found. Dissatisfaction was attributed toward less time with patients, long hours, and dealing with Medicare, Medicaid, and government regulations.

Speaking of the ACA, fewer physicians (38 percent in 2012) believe the ACA is a step in the wrong direction compared with 44 percent in 2011. The number who think the law is a good place to start remained the same.

Two-thirds of physicians in the Deloitte survey say they use an electronic health record (EHR) that meets meaningful use stage 1 requirements, but that number has been lower in other surveys. Three in 5 respondents were satisfied with their EHR.

Deloitte mailed the survey to more than 20,000 physicians selected from the American Medical Association’s master file. Just 613 returned completed surveys, giving a margin of error of 3.9 percent at the 0.95 confidence level.

Source: Survey: More Docs Plan to Retire Early

Premium Tax Credits for Low-Income

Premium Tax Credits for Lower-Income Individuals
In 2014, a “premium tax credit” will be available to help pay for coverage purchased through the Exchange for individuals and families:
  1. Who do not qualify for Medicare or Medicaid and
  2. Are not offered affordable, minimum value health insurance through an employer,
  3. Taxpayers, with income between 100% and 400% of the federal poverty line (FPL)
  4. Purchasing insurance through an Exchange.
% of FPL
Annual Income (family of 4)
Unsubsidized Annual Premium
Tax Credit
Annual Premium After Credit
Monthly Premium After Credit
Adjusted 2013 Federal Poverty Guidelines

48 Contiguous States and DC
Note: The 100% column shows the federal poverty level for each family size, and the percentage columns that follow represent income levels that are commonly used as guidelines for health programs.
Household Size
For each additional person, add
Source: Calculations by Families USA based on data from the U.S. Department of Health and Human Services
Determining eligibility for the premium tax credit
Modified” gross income is calculated which includes Social Security benefits that are not included in gross income for the taxable year.  In addition, some individuals and families will qualify for a cost-sharing reduction subsidy to help with deductibles and co-payments.
How will services be paid?
When an individual receives covered essential health benefits, the provider will collect only the amount of cost-sharing specified in the silver plan variation in which the individual is enrolled. The federal government will pay the insurer in advance the amounts estimated to cover the cost-sharing reductions associated with the specific silver plan variation. HHS intends to propose that this advance cost-sharing reduction payment to the insurer would occur monthly, and that, after the end of the calendar year, the federal government would reconcile the advance payments to actual cost-sharing reduction amounts.
The Exchange Determines Eligibility for Premium Tax Credit and Cost-Sharing Reductions.
Exchanges must have a coordinated system of eligibility so that an individual can simultaneously apply for enrollment, apply for premium tax credits and apply for cost-sharing reductions. Proposed IRS regulations would permit the disclosure of income and other specified information about an individual taxpayer to HHS for purposes of making eligibility determinations for advance payments of the premium tax credit or the cost-sharing reductions.
Ineligibility for the tax credit (groups with over 50 Full Time Equivalent Employees)
As a general rule, if an Applicable Large Employer’s plan constitutes “minimum essential coverage” in that it is both affordable and provides minimum value, merely being eligible for the plan will make an employee ineligible for the tax credit. The final regulations clarify that an eligible employee who declines enrollment in such a plan remains ineligible for the tax credit for each month in the coverage period related to the enrollment period (e.g., for the full plan year in the case of an annual enrollment period).
This information is subject to future guidance and regulations

CVS asking Workers To Reveal Weight, Health Info

SAN FRANCISCO  — Pharmacy giant CVS has asked workers in the Bay Area and around the nation to reveal their weight and other health information, or pay extra for health coverage.

The company announced Wednesday what it called “A Plan for Health,” that features a mix of rewards and penalties for employees.

Among the measures, employees must report their weight, body fat, cholesterol, blood pressure and blood sugar levels. Workers must also be tobacco free or enroll in an addiction program by next year.

Employees who refuse will have to pay $50 more for health coverage each month, totaling $600 a year.

“These changes aren’t just about cost, they’re about us, each of us taking personal accountability for our own health,” said Lisa Bissacia, Senior Vice President and Chief Human Resources Officer.

“(CVS Executives) better get some pretty good legal counsel and decide whether your policy is really legal, because the policy as announced is not legal,” said Richard Schramm, a Bay Area employment lawyer.

Schramm told local news organization the company is trying to tell employees what they can and can’t do on their off time.

“If we granted that right to employers, employers could tell employees who to date, who to see, what kinds of foods to eat, what to drink, all kinds of behavior off site could be controlled. And that’s absolutely not the law in California,” he said.

KPIX 5 tried talking to employees at a CVS location, but they refused to comment on the plan.

Company officials said personal information is given to WebMD, and that CVS will not have access to employee’s personal health information.


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