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Category: Health Care Reform

King v. Burwell Decision

King v. Burwell Decision

First, as any of us who know the market can appreciate, the Court just saved the Republicans from themselves. They were in no way ready to avoid the crisis that would have engulfed the individual market––half of those people on the exchange who would have lost their subsidies and the other half off-exchange that would have seen 30% to 50% rate increases––on top of the big increases already announced––without a quick fix.

Does this mean that Obamacare has cleared its last major hurdle?

Not a chance.

Obamacare has only enrolled about 40% of the subsidy eligible market in two years worth of open enrollments. That level of consumer support does not make Obamacare either financially sustainable or politically sustainable. The surveys say the 40% who have enrolled like their plans. Of course they do, they are the poorest with the biggest subsidies and the lowest deductibles. The working and middle-class have most often not signed up for Obamacare because it costs too much and delivers too little.

That Obamacare is not financially sustainable is evidenced by the first wave of big 2016 rate increases by so many large market share insurers. The next wave of rate increases a year from now will also be large and will be in the middle of the 2016 election.

These rate increases will further undermine the political sustainability of the law that has been reflected in five years of polling.

The attempt to scuttle the law through the Supreme Court was ill conceived and Republicans are very lucky it did not happen.

Now Obamacare has to stand on its own going into the 2016 elections and the growing evidence is that won’t be any easier.

By Professor Laszewski’s

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

Implementing Health Reform: Provision Of Summary of Benefits and Coverage

One of the most important insurance reforms imposed by the Affordable Care Act is a requirement that insurers and self-insured group health plans make available to applicants and enrollees a Summary of Benefits and Coverage (SBC) that concisely, uniformly, and accurately describes health plans that applicants are considering or in which enrollees are enrolled. The SBC allows shoppers to compare side-by-side plans that they are considering purchasing, and also helps enrollees understand their coverage once they are enrolled.

The ACA required the Departments of Labor, Treasury, and Health and Human Services, which are charged with implementing the SBC requirements, to consult with a stakeholder group convened by the National Association of Insurance Commissioners in drafting the SBC rule. The original final SBC rulewas not published until 2012, after recommendations were received from that body.

When the 2012 SBC rule was published, however, and again in the months following its publication, the departments released a series of frequently asked question which generally provided plans and insurers flexibility in complying with the requirements of the rule. In December of 2014, the departments published a proposed rule (covered here) to modify the original rule.

The proposed rule contained provisions governing how insurers and group health plans were to make SBCs available, as well as changes to the content of the SBC itself — the SBC template and instructions and uniform glossary of coverage terms.

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

Employer Mandate and How Penalties Work

ACA News: Learn more about how employer mandate and how penalties work.

What is the employer mandate?
For 2015, large companies with 50 or more employees had to offer minimum value, affordable health care coverage to their full-time employees or face a penalty. They also may have to pay a penalty if any of their employees get government aid to lower their health coverage costs. This penalty is essentially a non-deductible, extra tax.

Midsize businesses with 50-100 employees were allowed to delay this mandate until 2016, if they met certain conditions for transition relief. Beginning January 1, 2016, but by the first day of the 2016 plan year, all midsize employers with 50-100 full-time employees and equivalents (FTEs) must have a health care plan option in place that meets minimum essential coverage for 95 percent of their employees. That’s the requirement given by the Affordable Care Act (ACA). Employers who fail to prepare properly will face penalties.

What is minimum essential coverage?
The health care plan an employer offers must be considered minimum essential coverage. Stated briefly, this means that it must:

  • Supply minimum value by covering at least 60% of the total cost of benefits.
  • Be affordable. The premium for covering the employee must be less than 9.5% of the employee’s income.

How do employers calculate the number of employees?
Calculating the number of employees can be complicated. Employers should speak with their attorney or tax adviser for help. But here are the basic steps:

  1. Count the employees who worked at least 30 hours per week each month (including seasonal employees) in the prior calendar year.
  2. Count the employees considered full-time by adding the number of hours worked by all part-time employees (as well as seasonal) and dividing by 120.
  3. Add the monthly totals of steps 1 and 2 and divide by 12.

If the result is less than 50, the employer doesn’t have to offer health coverage.

What are the penalties?
There are different kinds of penalties, based on what part of the rule the employer didn’t follow. Employers have to pay a penalty for:

  • Not offering health coverage to full-time employees and their dependent children to age 26, and if any full-time employee gets government aid to lower the cost of coverage. The annual penalty is $2,000 x the number of full-time employees, minus the first 30 employees.
  • Offering health coverage for only part of the year. The penalty is based on the number of full-time employees and the number of months coverage was not offered.
  • Offering health coverage to 95% of full-time employees but one or more full-time employees gets government aid to lower the cost of their coverage because the coverage is not considered affordable. The annual penalty is $3,000 per employee getting government aid.

The U.S. Chamber of Commerce has developed this penalty calculator to help determine whether companies must offer coverage and what the penalty might be based on the number of full-time employees.

For more information about the employer mandate and penalties, see this fact sheet with frequently asked questions on ourhealth care reform website.

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

The Eye Popping 2016 Obamacare Rate Increases Are Out

The Big Obamacare Rate Increases Are Coming a Year Early

The Obama administration has posted the 2016 rate increases in excess of 10% that the Obamacare health plans are requesting.

There are a lot of them.

All of the federally run states have been posted and some for the state exchanges as well. Both California and New York do not have their rates on this site yet.

Some will quickly argue that many of these rate increases are subject to regulatory approval and can be rolled back. That’s right. But this year the health plans have hard claim data to show the regulators and a 35% rate increase is hardly going to be rolled back to 5%.

Big rate increases like this are driven by a lot of claims experience––a lot of really lousy claim experience.

You will also notice that this list most often includes the big market share players, such as the Blues plans, in each of these states. These are the players with the best data.

That these big rate increases are coming a year before the “3Rs” reinsurance program is to end, that was supposed to subsidize the health plan’s high claims experience, is not good news.

You can access the administration’s website and look at all of them by state here.

To quickly see all of the 10%+ rate increases in a particular state just click on the state and enter a date range of 01/01/2016 to 01/01/2016. Leave the company field blank.

If you leave the dates blank, you can see the carriers’ rate submission history since 2013. It’s interesting to see what a particular carrier increased rates at the time of Obamacare’s original launch and what they have layered on to costs since.

If you click on the company name on the left side, you will see a brief description of their justification for the rates.

For example, Blue Cross of Texas commented that it covered 730,833 individuals in 2014 with premium of $2.1 billion and claims totaling $2.5 billion––for a medical loss ratio of 119%. The plan further commented that, after the “3Rs” reinsurance adjustments, they lost 17% to 20% of premium in 2014––that would be more than $400 million. And, they are only asking for a 20% rate increase.

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

Health Insurance Rate Increases – Insurers Use Guesswork

In a sign of the tumult in the health insurance industry under the Affordable Care Act, companies are seeking wildly differing health insurance rate increases in premiums for 2016, with some as high as 85 percent, according to information released on Monday by the federal government for the 37 states using HealthCare.gov as their exchange.

The data from the Centers for Medicare and Medicaid Services included only proposed rate increases of 10 percent or more, and federal officials emphasized that it would be months before final rates were set. Regulators in some states have the authority to overrule rate increases they deem to be too high.

Experts cautioned against relying too heavily on the data as a predictor of prices for next year.

“Trying to gauge the average premium hike from just the biggest increases is like measuring the average height of the public by looking at N.B.A. players,” said Larry Levitt, an executive with the Kaiser Family Foundation.

A nurse at Johns Hopkins Hospital. Charges for many common procedures have risen sharply at hospitals, according to Medicare data.Data Shows Large Rise in List Prices at Hospitals

But many insurers, including those seeking relatively hefty increases below 10 percent, say they are asking for higher premiums because they remain unsure about the future and what their medical costs will be.

“The insurers are in the business of taking risk, but the one thing they hate is uncertainty,” Mr. Levitt said.

Many unknowns remain. Among them are the questions of how many more people will sign up for coverage and what the state of their health will be. Healthier customers can generally lower costs for the overall group. Other uncertainties include the effect of the law’s protections against large losses for insurers, and a Supreme Court decision that will determine whether subsidies will be available in the states participating in the federal exchange.

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