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Category: Health Care Reform

An Internal Revenue Service Health Care Fine That’s 12 Times Bigger than the Employer Mandate Penalty

As if it wasn’t tough enough to run a business, beginning this month, the Internal Revenue Service can levy fines amounting to $100 per worker per day or $36,500 per worker per year, with a maximum of $500,000 per firm.

This Internal Revenue Service penalty is not written into the Obamacare law. The amount is over 12 times the statutory amount in the Affordable Care Act of $3,000 per worker per year. That is what an employer is charged when one of its employees gets subsidized care on one of the health-care exchanges. It’s 18 times the $2,000 penalty for not offering adequate health insurance.

The $100 fine is applicable not only to large firms, but also those with fewer than 50 workers that are exempt from the $2,000 and $3,000 employer penalties. Firms with one worker are exempt. The penalty for S-corporations will take effect on Jan. 1, 2016. The new rule is broad, sweeping and overly punitive.

Prior to the IRS’ pronouncement, many businesses who didn’t offer health insurance provided tax-free dollars to help their employees pay for individual health policies or other medical costs. Now, they

Prior to the IRS’ pronouncement, many businesses who didn’t offer health insurance provided tax-free dollars to help their employees pay for individual health policies or other medical costs. Now, they will be penalized for aiding their workers.

Read the full report here.

Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

Cosby Insurance Group Warrenton Health Insurance Broker and Agent

Did You Overpay the Obamacare Tax Penalty?

More than 300,000 taxpayers have overpaid the IRS because they incorrectly indicated that they owed the Individual Shared Responsibility Payment (ISRP), the tax penalty related to the Affordable Care Act, on their 2014 tax return.

This was discovered and outlined in a annual report by the National Taxpayer Advocate. When it sampled IRS tax return data, the NTA found that a large number of taxpayers didn’t owe the penalty that they incorrectly indicated on their tax returns.

The penalty is required for taxpayers who don’t have health insurance that complies with the Affordable Care Act, also known as Obamacare. The taxpayers in the sample didn’t actually owe the penalty tax because their income was below the threshold and thus they were exempt from what’s known as the “individual mandate.”

The NTA report found that the average ISRP paid was over $110.

Here’s what you need to know: If your household income in 2014 was below thethreshold for triggering the penalty and you included an amount on line 61 of your 1040, you should be eligible for a refund of the amount included on line 61.

Read the full report here.

Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

Cosby Insurance Group Warrenton Health Insurance Broker and Agent

Maryland Health Care Overhaul: A Physician Perspective

Beginning last year, the state of Maryland embarked on an extraordinary new experiment — one that could be a model for the nation. In partnership with the Centers for Medicare and Medicaid Services (CMS), Governor Martin O’Malley’s statewide hospital commission announced in January 2014 that it would address escalating health care costs by tackling the arms race of medical care. The Commission unveiled the framework for a new plan that will pay hospitals for quality over quantity, enabling them to profit from providing more appropriate—rather than simply more—care.

The proposed change of incentives has the potential to positively alter hospital workplace culture by halting the current revenue-based push to do more — an effort that invariably trickles down to doctors. The government pays more for more medical care, CEOs in turn tell their department leaders to increase volumes, and department leaders tell their doctors to do more. The push sometimes gets magnified along the way, and it is met with frustration among doctors because it values how much a physician does over how well they do it.

Maryland’s framework has the potential to break these vicious cycles and replace them with virtuous ones leading to greater quality and health. However, the plan is still in its early stages and its impacts are still developing; it also contains the seeds of potential conflict between hospitals and physicians, and there are other issues that must be addressed if the plan is to achieve its potential. These concerns and some potential solutions are discussed below.

The context for the Maryland health care (new) system in which a record 40 percent of physicians report feeling burnt out. Many physicians cite increased pressure to see more patients and do more procedures with limited resources; doctors are often evaluated by monthly volume quotas that do not measure appropriateness or outcomes. Some doctors regularly receive coaxing emails from their higher-ups reminding them how “critical” it is to meet their monthly relative value units (RVU) targets, clinic targets, or target number of operations in a month, if they are projected to have a slow month, in the same way a car dealer is evaluated by monthly car sales. Physician burnout has negative implications for patient safety, quality, and access, imposing costs that can ironically offset the added revenue from increased volume.

Increasingly aggressive compensation structures promoting the arms race of doing more are now being recognized as a driver of the massive waste in American medicine. While doctors will generally do the right thing most of the time, there are myriad examples where decisions were driven by profit over quality care, fueled by the fee-for-service system. The problem has reached endemic proportions. Calling out the trend, the Institute of Medicine now reports that up to one-third of health care dollars in the U.S. are spent on care that does not make us any healthier. One great strength of Maryland’s new health reform is its long-term plan to address this dangerous and costly trend.

Read the full report here.

Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

Cosby Insurance Group Warrenton Health Insurance Broker and Agent

Obamacare Exchange Plans Have 34 Percent Fewer Providers than Commercial Plans

Avalere Health has quantified how narrow networks are in Obamacare exchange plans, as shown in the figure below:

Avalere1

According to Avalere CEO President Dan Mendelson:

“Plans continue to test new benefit designs in the exchange market. Given the new requirements put in place by the ACA, network design is one way plans can drive value-based care and keep premiums low.”

Well, that is one way to look at it and I hope Mr. Mendelson is right.

On the other hand, we have discussed indications that plans are designing plans to attract healthy applicants and shun sick ones. I fear that this research builds on that case, because the networks of specialists (oncologists, cardiologists) are much narrower than the networks of general practitioners.

That is what you would do if you were designing a network for the healthy – ensure adequate access for those who only need their annual preventive visit (free under Obamacare) but reduce access for patients in need of specialty treatment.

Read the full report here.

Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

Cosby Insurance Group Warrenton Health Insurance Broker and Agent

Contraceptive Coverage Requirements Show Significant Savings For Women

The average woman using the birth control pill saved $255 in the year after the requirement took effect, a new study found. A woman using an intrauterine device (IUD) saved $248.

Media Reports Contraceptive Coverage Requirements Show Significant Savings For Women:

The New York Times: After Health Care Act, Sharp Drop In Spending On Birth Control
Out-of-pocket spending on most major birth control methods fell sharply in the months after the Affordable Care Act began requiring insurance plans to cover contraception at no cost to women, a new study has found. Spending on the pill, the most popular form of prescription birth control, dropped by about half in the first six months of 2013, compared with the same period in 2012, before the mandate took effect. (Tavernise, 7/7)

Kaiser Health News: Birth Control Coverage Saves Women Significant Money
Women are saving a lot of money as a result of a health law requirement that insurance cover most forms of prescription contraceptives with no additional out-of-pocket costs, according to a study released Tuesday. But the amount of those savings and the speed with which those savings occurred surprised researchers. The study, in the July issue of the policy journal Health Affairs, found that the average birth control pill user saved $255 in the year after the requirement took effect. The average user of an intrauterine device (IUD) saved $248. Those savings represented a significant percentage of average out-of-pocket costs. (Rovner, 7/7)

The Huffington Post: Women Are Spending $1.4 Billion Less On Birth Control Due To Obamacare: Report
Spending on birth control has significantly decreased since the Affordable Care Act’s mandate for insurance companies to cover contraception went into effect in August of 2012, according to a new report. An analysis published Tuesday in Health Affairs shows that women have saved $1.4 billion on birth control pills, while out-of-pocket spending on intrauterine devices has fallen 68 percent. Annual, out-of-pocket savings were $248 for IUDs and $255 annually for oral contraceptives. (Lachman, 7/7)

Meanwhile, a program that offered free or reduced-price birth control to young women may be running out of funding.

USA Today: Colo. Won’t Fund Birth-Control Initiative Despite Success
A much-heralded Colorado effort credited with significantly reducing teen pregnancy and abortion rates is searching for new funding after GOP lawmakers declined to provide taxpayer dollars to keep it going. Started in 2009 with an anonymous private grant, the state-run Colorado Family Planning Initiative gave free or reduced-price IUDs or implantable birth control to more than 30,000 women. During the period from 2009 to 2013, births to teen mothers dropped by 40% and abortions dropped 35%, the state says. Armed with a national award for excellence, state health officials asked lawmakers this spring to provide $5 million to keep it going but were rebuffed. (Bowerman and Hughes, 7/7)

Also in the news: a profile of one of the architects of the legal challenge to the health law’s subsidies, which were upheld by the Supreme Court last month.

The Philadelphia Inquirer: On Losing Side On ACA, This Lawyer Stays Cool
For a lawyer who has just lost what might be the most important legal case of the decade, Jonathan Adler seems unruffled. The Philadelphia native was one of a small group of architects of the latest and likely final serious challenge to President Obama’s Affordable Care Act, a case the U.S. Supreme Court decided June 25 in the government’s favor. (Mondics, 7/7)

Read the full report here.

Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

Cosby Insurance Group Warrenton Health Insurance Broker and Agent