Don’t Understand Health Insurance Exchanges? You’re Not Alone

Health officials and state governments scramble to educate the public about the Affordable Care Act’s health insurance exchanges before they go live this fall.

By Cindy del Rosario | Apr 28, 2013 04:25 PM EDT

Starting October 1, millions of uninsured Americans in every state will be able to shop for and purchase health insurance through health insurance marketplaces, although many aren’t even aware of it.

With the Affordable Care Act (ACA) here to stay, states are preparing to unveil the Health Insurance Marketplace (also known as the Exchanges), in which individuals, families and small-business owners will be able to learn about and compare health insurance plans in one place. Aside from implementing the Exchanges, states also have the daunting task of educating the public about them.

Several survey results indicate everyone will need a lot of help. A recent poll conducted by Princeton Survey Research Association International shows that 90 percent of Americans are not aware that the Health Insurance Marketplace will open this fall.

A Kaiser Family Foundation survey found that over half of Americans say they do not have enough information about how the health reform law will impact them personally. Among those who stand to benefit most from the law, awareness is even lower: 67 percent of uninsured and 68 percent of low-income say they do not understand how the ACA will impact their lives.

To help with the exchange, states are investing, using state and federal grants, to spread the word about the Health Insurance Marketplace. To answer coverage questions, help people with eligibility determination, and select plans, states will establish toll-free call centers, online chats, and fund local assistance programs.

In Maryland, Lt. Gov. Anthony Brown announced a $24 million Connector Program, which will provide consumer assistance and enrollment resources in the state.

Meanwhile in California, the organization Covered California has a budget of $290 million to reach the state’s 5.3 million uninsured residents. About half of the budget will go toward media advertising, and some will be used to create call centers that can handle a dozen languages.

Even physicians, nurses, and other health care providers need to be informed about the Health Insurance Exchanges, since many patients will expect help from professionals to acquire insurance coverage.

In an online article for the Journal of the American Medical Association, Assistant Secretary of Health Dr. Howard Koh, and Acting Administrator of the Centers for Medicare and Medicaid Services Marilyn Tavenner, RN, urged health professionals to connect people to coverage and gave a brief overview of the upcoming changes.

All health insurance plans part of the Health Insurance Marketplace must cover essential health benefits, such as prescription drugs, emergency services, and outpatient services. The plans must also include “essential” benefits that are often not covered in lower quality insurance plans, including mental health and substance abuse disorder services, chronic disease management, and coverage for oral and vision care.

Customers shopping for insurance will be able to compare plans side-by-side. Plans will be ranked based on the level of cost-sharing protection.

Furthermore, other changes in the Affordable Care Act will allow more people to access and afford health insurance. More Americans will qualify for free or low-cost health insurance, and households up to 400 percent of the poverty level (up to an annual household income of $92,200 for a family of four) will be eligible for tax credits.

No one will be turned away from a health insurance plan because of a preexisting condition. Also, insurance companies will be unable to charge customers more because of their health status or sex.

For more information about the health care exchanges including financial assistance, visit Healthcare.gov.

Read more at http://www.medicaldaily.com/articles/14961/20130428/dont-understand-health-insurance-exchanges-youre-alone.htm#Bz6KRGsd7hFd2bvg.99

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New Health Exchanges Unlikely to End Insurance Monopolies in Some States

By Christine Vestal, Staff Writer | State Line, pewstages.org

A doctor examines a patient at a clinic in Florence, Ala. Alabama is one of about a dozen states in which a single health insurance company has a virtual monopoly, a situation that may persist when new health insurance exchanges are launched in October. (AP)

Part Two of Two Parts

In Alabama, if you get your health insurance through your employer and you lose your job, you quickly realize there aren’t a lot options for purchasing coverage on your own. Blue Cross and Blue Shield of Alabama has had a virtual monopoly in the state since the Great Depression, and today it covers a whopping 89 percent of Alabamians.

In part, Blue Cross and Blue Shield is dominant in Alabama simply because it has been there for so long—it sold its first policy in 1936—and potential newcomers have found it difficult to convince hospitals and doctors to give them favorable prices so they can compete with the entrenched carrier. But it also has to do with Alabamians themselves: On average, residents of the state are poorer and less healthy than other Americans, making them more expensive to cover and thus less attractive customers.

Top 10 states with the least competitive commercial health insurance markets
  1. Alabama
  2. Hawaii
  3. Michigan
  4. Delaware
  5. Alaska
  6. North Dakota
  7. South Carolina
  8. Rhode Island
  9. Wyoming
  10. Nebraska

Source: American Medical Association, 2012 market concentration analysis.

The lack of competition in nearly a dozen states could present problems when the insurance exchanges that are part of the Affordable Care Act launch in October. The exchanges are supposed to give Americans who do not get health insurance from their employers the opportunity to choose from an array of private insurance plans. The idea is to generate competition between insurers that will lead to lower premiums.

Individuals and businesses with up to 100 employees will be able to shop on the exchanges, and people who can’t afford coverage on their own will get government subsidies to help them pay their premiums. About 26 million low-income Americans are expected to receive subsidies to purchase health insurance through the exchanges.

But in states with a dominant insurance carrier, competition and lower prices may not arrive for quite some time.

A recent analysis by the American Medical Association found that a single insurance company held 50 percent or more of the market in nearly 70 percent of local markets nationwide. And in 30 states, a single insurance company covers more than half the people who purchase insurance individually, according to the Robert Wood Johnson Foundation.

The dominance by a single insurance company is particularly pronounced in Alabama, Hawaii, Michigan, Delaware, Alaska, North Dakota, South Carolina, Rhode Island, Wyoming and Nebraska.

In general, multiple insurance companies are eager to compete in states that have a large number of health care providers and a lot of people who can afford to pay premiums. A relatively young and healthy population is also an attraction. In states that don’t have those characteristics, competition can be sparse.

Alabama ranks 45th in the nation in overall health status, and 46th in median household income, according to the United Health Foundation and the U.S. Census Bureau, respectively. Over the decades, a few major insurance carriers have tried to dip their toes into Alabama, but most pulled out after just a few years.

In other states, there are different reasons for the lack of competition. In Wyoming, for example, the problem is that the state has relatively few health care providers and people have to travel long distances to get care.

Wyoming has only 18.7 physicians per 10,000 people, ranking it 47th in the U.S., according to the Kaiser Family Foundation. By comparison, New York has 34.8 physicians per 10,000 people, Maryland has 35.3 and Massachusetts has 39.7. The national average is 25.7.

Blue Cross Blue Shield of Wyoming dominates the market. Do Wyoming consumers want more choices? “Sure they do,” said Tom Hirsig, Wyoming’s insurance commissioner. But Hirsig said it’s a huge challenge for new carriers to develop provider networks in Wyoming. “My sense right now is that the individual market inside the exchange is not going to be stacked with lots of competition.”

A shortage of hospitals is the problem in Rhode Island, where there are just 11 hospitals owned by two companies. Health Insurance Commissioner Christopher Koller said Rhode Islanders would like other options, but he isn’t sure they’ll have them when the state’s exchange launches in October.

RELATED: LACK OF COMPETITION MIGHT HAMPER HEALTH EXCHANGES

Big Changes

The vast majority of Americans get health insurance coverage through their employers. Millions of low-income Americans qualify for Medicaid, and seniors can sign up for Medicare. But for people outside of these groups, there are few good options when it comes to health insurance.

Many of these Americans pay high premiums if they are sick or middle-aged—if they can find coverage at all. They also run the risk of purchasing policies that don’t cover certain medical conditions or limit the total dollar amount of claims. That’s why so many of them go without insurance altogether.

The health insurance exchanges are designed to change that. The policies that are included on the menu will have a uniform set of benefits and pricing structures that will be easy for people to understand and compare.

In addition, the new health law will make it illegal to deny coverage to people who have pre-existing conditions. It also will a mandate a minimum set of benefits; prohibit lifetime caps on claims; and require insurance companies participating in the exchanges to spend at least 85 percent of their revenue on health care.

The hope is that this new pool of previously uninsured people will attract insurers to enter new markets, creating competition where none exists now. Poor states across the South and West have the largest share of uninsured people, and thus hold the greatest potential for insurers to cash in on the $350 billion the federal government plans to spend over the next 10 years to help low-income people buy insurance.

Furthermore, the exchanges should allow smaller companies and non-profits to market their products more effectively, challenging entrenched incumbents. “When you go online, the Blue of Alabama won’t look so much bigger than the next plan,” said Andy Hyman of the Robert Wood Johnson Foundation. The exchange is meant to be an “equalizer,” Hyman said.

What’s Wrong With Monopolies?

Carriers that dominate a particular state often argue that they hold onto their position by keeping prices down. “There are lots of national carriers out there who would provide a product that is less expensive than what is in the market, if they could,” said Kim Holland, director of state affairs for the Blue Cross and Blue Shield Association. “We’re not so naïve as to think that if we don’t price our products correctly our customers won’t find another alternative.”

Some economists note that in some cases, a dominant carrier can use its heft to negotiate the best prices with hospitals and then pass along those savings to consumers. In some markets, dominant insurers are akin to utilities, explained Paul Ginsburg, director of the Center for Studying Health System Change. “You don’t necessarily need more than one,” he said.

Ginsburg said large carriers are likely to get better prices from hospitals and doctors, because providers can’t do without them. “I suspect that consumers have actually benefitted from high [market] concentration. It’s really a bigger problem for physicians,” he said.

Despite having the least competitive health insurance market in the country, Alabama’s individual premium prices compare favorably with neighboring states and are below average for the nation.

But the AMA, which represents doctors, disputes the idea that big insurers always secure the best prices for consumers. They point to national studies showing that when insurance companies merge and acquire smaller companies, their profits go up and so do their premiums.

Exchange Experience

Two states, Massachusetts and Vermont, already have exchanges, and offer a glimpse of what the future might hold.

When Massachusetts launched its exchange in 2007, new players did not immediately burst into the market. One new carrier, Centene Corporation, joined the exchange to offer a limited network of providers for Medicaid beneficiaries. But competition in the individual market remained relatively unchanged.

But Massachusetts already had a relatively competitive market, so existing carriers competed with each other to create new, lower-cost plans in response to market demand—and pressure from state officials to keep costs down. Despite the emergence of low-cost plans, however, average premium prices have continued to rise.

Earlier this month, Vermont became the first state in the nation to publish preliminary health insurance rates for its exchange. Not unexpectedly, the tiny state of only 626,000 residents did not attract any new insurance companies. And the price of the plans offered on the exchange? They cost about as much as what Vermonters were paying before.

http://www.pewstates.org/projects/stateline/headlines/new-health-exchanges-unlikely-to-end-insurance-monopolies-in-some-states-85899471042

HEALTH CARE REFORM LEADS TO VIRGINIA COMMUNITY COLLEGE PAY CUTS

Posted: Apr 24, 2013 11:31 AM EDT Updated: Apr 24, 2013 11:31 AM EDT

Posted By WSLS Staff

BOB LEWIS
AP Political Writer

RICHMOND, Va. (AP) – Many adjunct instructors at Virginia’s 23 community colleges will see their hours cut starting this summer thanks to Virginia’s response to the new federal health reform law, a change that could cripple or kill livelihoods teachers like Ann Hubbard worked hard to build.

The onrushing 2010 Patient Protection and Affordable Care Act is forcing governments at all levels to scramble to accommodate changes – some intended, some not – to public- and private-sector jobs over the next year.

But the changes in store for about a quarter of Virginia’s 9,100 adjunct faculty members have less to do with health insurance – a benefit they don’t receive anyway – than with the opportunity to teach enough class hours to pay the bills. Hubbard, for example, learned a few days ago that she would see her annual 45 credit-hour load nearly halved.

As a 48-year-old single mother from Williamsburg with a daughter finishing her freshman year at Virginia Tech, the income from her heavy teaching schedule at two southeastern Virginia community colleges is vital. Asking her what she will do when she’s cut to no more than 27 credit hours a year is almost more than she can bear.

“You ask me that and I literally start shaking,” Hubbard said in a telephone interview last week.

Under the new federal law, employers are obliged to provide health benefits for any employee who works 30 hours or more. Republican Gov. Bob McDonnell responded in February by directing that all part-time state employees work 29 hours or less to avoid the 30-hour threshold.

Because community college adjunct professors are contractors, not state employees, they’re paid by the class load they carry; they don’t punch a clock. And, because they’re contractors, they are also ineligible for retirement benefits or unemployment compensation should they find themselves jobless.

In translating the governor’s directive into terms applicable for higher education, Virginia Community College System Chancellor Glenn DuBois limited adjunct teachers to seven credit hours in the summer and no more than 10 each in the fall and spring semesters.

The bottom line is that no Virginia adjunct professor at a community college can earn more than $17,000 a year before taxes when the changes take effect in a few weeks, said J. Gabriel Scala, an adjunct English professor at J. Sargeant Reynolds Community College, which serves the Richmond area.

“I love teaching. I wouldn’t do anything else. I’ve never anticipated getting rich off being a teacher. But the rent has to be paid and I have to eat and gas has to be put in the car, and $17,000 a year isn’t going to do it,” she said.

She organized a Facebook group of Virginia community college faculty concerned about the change. Through it, adjuncts and their allies can find out how to write to DuBois, McDonnell or even President Barack Obama appealing for an exemption that would allow them to teach full loads without forcing the state to add them to its health plan.

“No one is too upset about not being offered health benefits. What’s upsetting – and dangerous – is all the hours being cut,” said Scala, a 41-year-old with a master’s degree in creative writing, a doctorate in English and an opportunity to teach full time this fall at a university.

“Many adjuncts work at more than one community college. Some teach up to eight classes a semester,” she said.

Many adjuncts hope that because the Internal Revenue Service has yet to finalize regulations on part-time employment, the IRS might create an exemption that remedies the dilemma administratively.

Virginia Education Secretary Laura Fornash said limiting the adjuncts’ credit hours wasn’t what McDonnell’s administration wanted, either. Adjunct instructors teach at least two-thirds of the classes for the statewide enrollment of nearly 289,000 students.

“This is a tremendous challenge for the commonwealth since the IRS has yet to issue guidance for us,” she said. “The governor had to act and take responsibility and make sure the parameters were clear as we understand the requirements of the law.”

Heavy course loads like Hubbard’s, Fornash said, are the exception, not the rule. Three-fourths of community college adjuncts teach fewer than 27 credit hours a year anyway, many of them augmenting full-time jobs in other fields.

“You might have an accountant by day who teaches a section or two of accounting at night,” she said.

None of which comforts Hubbard, who worked her way through undergraduate and graduate school and her unfinished doctoral program tending bar and waiting tables, all so she could one day teach history. These days, arthritic hands rule out a moonlight job bartending, she said.

“As you know, finding work is difficult. If I can find something full-time, then I’d have to give up teaching and I really don’t want to do that,” Hubbard said.

Article Link: http://www.wsls.com/story/22065095/health-care-reform-leads-to-virginia-community-college-pay-cuts

Racing to Spread Word About New Health Plans

By ROBERT PEAR

Published: April 23, 2013

EAST LANSING, Mich. — President Obama and the Democrats passed the 2010 health care law to make medical insurance available to more than 30 million people who do not have it. But with recent studies showing that as many as three-fourths of those people are unaware of their new options, health care providers are joining community organizers and insurance companies in an ambitious effort to spread the word in the six months remaining before the health plans become available.

Here in Michigan, a small army of doctors and nurses, hospital employees, insurance agents and advocates for low-income people is mobilizing for the next phase of this revolution in domestic social policy: finding people who are eligible for health insurance and getting them enrolled.

It will not be an easy task.

The simmering political debate over Mr. Obama’s health care law — which includes an expansion of Medicaid, the government program for low-income people, and the creation of “exchanges” to market subsidized private insurance — makes the work of these foot soldiers more difficult, but also more important.

Michigan is, in many ways, a microcosm of what is going on around the country as people race toward the start of “open enrollment” on Oct. 1.

“Confusion, total confusion,” said Jan M. Hudson, a consumer advocate, describing state efforts to help more than a million Michigan residents get insurance under the law.

Ms. Hudson, a founder of Michigan Consumers for Healthcare, a coalition of consumer groups, led a recent conference of more than 200 experts and advocates who banded together here on the campus of Michigan State University to try to identify and enroll everyone in the state who might be eligible for coverage.

Amy L. Allen, the director of health care reform at the Michigan Department of Community Health, said that delays and resistance by the State Legislature meant that more of the work must be done by community groups and the private sector. The Republican-controlled Legislature declined to set up a state insurance exchange, and Gov. Rick Snyder, a Republican, has met opposition within his own party to his proposal to expand Medicaid.

Nevertheless, in Michigan, as in many states, advocates for poor people, blacks, Hispanics and people with disabilities are joining health care providers and insurers in a campaign to find the uninsured wherever they live, work, play or pray.

“Getting all these people enrolled will not necessarily be an easy task, but it’s a great opportunity,” said Anita M. Fete, who was one of the speakers at the conference and is the director of state assistance at Enroll America, a national nonprofit group set up to maximize enrollment.

The Census Bureau estimates that 1.2 million people in Michigan are uninsured. Most will qualify for subsidized private insurance, or for Medicaid if the state chooses to expand the program.

Nationally, the Congressional Budget Office predicts that 14 million uninsured people will get coverage next year. But that goal is ambitious.

Studies for Enroll America and the Kaiser Family Foundation indicate that three-fourths of uninsured adults are unaware that they will have new insurance options.

Among the people expected to sign up for coverage in the new online markets known as insurance exchanges, one in four speak a language other than English at home, and three out of four have a high school diploma or less.

Citing those statistics, Christine P. Barber, a senior policy analyst at Community Catalyst, a consumer organization, said: “There is no time for turf battles. We need to come together to make this work.”

In California, the health insurance exchange faces an even more daunting task. It is trying to reach five million people who speak 13 different languages and are spread across 163,000 square miles. Nearly half of those in the state who are eligible for insurance subsidies are Hispanic.

The fact that so many people are unaware of their new options has the potential to undermine the entire purpose of the health care law. Congress provided hundreds of billions of dollars for expanded coverage, but it did not fully account for the difficulty or expense of getting people to sign up. Also, Democrats did not anticipate the effects of continued Republican hostility to the law.

“Opponents’ attacks seem to have taken a toll on the public’s expectations, and Americans are now more likely to think the law will make things worse rather than better for their own families,” the Kaiser Family Foundation said last month in a summary of its latest poll. “Americans’ awareness of key elements of the law has declined somewhat since passage, when media attention was at its height.”

Community organizations, health care providers and insurers, which stand to gain millions of new customers and hundreds of billions of dollars in new revenue, said they were determined to move beyond the bickering of politicians in Washington and in Michigan.

“There are so many moral and pragmatic reasons why hospitals should be engaged in outreach and education,” including to reduce the burden of bad debt and charity care, said Tina Weatherwax Grant, a vice president of Trinity Health, a large Catholic health care system based in Livonia, Mich.

Ms. Grant said that Trinity would have counselors to help people apply for Medicaid and subsidized private insurance at most of its 47 hospitals. Some sites will also have enrollment kiosks with computers.

Trinity hospitals in the Muskegon area already employ community health workers who knock on doors and buttonhole neighbors at football games and laundromats, offering to help them get insurance. Other health care providers and health plans want to replicate that model.

“It’s a lot like political organizing,” Ms. Grant said.

The most notable feature of the conference here was the collaboration of diverse groups. They included Blue Cross Blue Shield of Michigan, Easter Seals, the Little River Band of Ottawa Indians, the Grand Rapids African American Health Institute, the state chapter of the American Academy of Pediatrics, Jewish Family Service, and Access, a nonprofit organization that provides health care in Arab and Chaldean communities in the Dearborn area.

Mr. Snyder wanted to establish a health insurance exchange, but the Legislature refused to spend money made available for that purpose by Congress and the Obama administration.

The federal government will run the exchange here, but the precise division of labor between federal officials and state insurance regulators is not clear.

Mr. Snyder has also proposed expanding eligibility for Medicaid, as envisioned in the health care law. But he is meeting resistance from conservative Republicans in the Legislature.

“We have major hurdles in front of us,” Ms. Allen, the Michigan Department of Community Health official, said. “It’s quite a heavy lift to get spending authority from the State Legislature for anything related to health care reform. But people will still need assistance, still need to know if they are eligible for tax credits and premium subsidies.”

Phillip J. Bergquist of the Michigan Primary Care Association said his members, who run community health centers for low-income people, would help patients sign up for coverage when they called to schedule appointments. Many clinics will also take the initiative and call their uninsured patients.

About 100,000 patients of community health centers in Michigan are uninsured and would be eligible for Medicaid if the state expanded the program, Mr. Bergquist said. An additional 40,000 to 50,000 will be eligible for income tax credits to help them pay premiums for private insurance, he added.

Jo Murphy, the director of a free counseling service for Medicare beneficiaries in Michigan, has helped thousands of older Americans choose prescription drug plans. But, she said, counseling the uninsured on their options may be a bigger challenge.

“Many of these families have never had coverage,” Ms. Murphy said. “In many cases, you will be speaking a foreign language. You have to teach them the language before you can explain the options.”

A version of this article appeared in print on April 24, 2013, on page A15 of the New York edition with the headline: Racing to Spread Word About New Health Plans.
Article Link: http://www.nytimes.com/2013/04/24/health/racing-to-inform-millions-unaware-of-new-health-coverage.html?pagewanted=all&_r=0

How states will benefit from Medicaid expansion

Erin Digitale on April 23rd, 2013 No Comments

 

Medicaid, the federal health-insurance program for low-income individuals, is set to undergo a big expansion in 2014 as part of the implementation of the Affordable Care Act. That expansion is good news for the children of low-income adults who will be newly eligible for health insurance, according to an opinion piece published online yesterday in JAMA Pediatrics.

Under the current system, Medicaid and SCHIP health insurance cover a much larger proportion of low-income children than adults, with the result that many insured children have uninsured parents. While insuring kids is important, it isn’t always enough, say the authors of the new piece, who are from Indiana University and Boston University.

“Children with uninsured parents are significantly less likely to receive recommended health services, even if they themselves are covered,” they write.

However, because of the U.S. Supreme Court’s 2012 decision on the Affordable Care Act, states get to choose whether or not to expand Medicaid. (The Supreme Court ruled that the ACA’s Medicaid-expansion mandate was coercive.) This is where the story gets really interesting. The piece describes states’ financial concerns about Medicaid expansion – essentially, that it will be expensive to add people to the Medicaid rolls – but then elaborates on some of the financial factors that states turning down Medicaid expansion may not be considering:

…[O]verall, the cost of the Medicaid expansion to states would be less than 1% of their local gross state product. Others have illustrated that, because uncompensated care reimbursements will decrease under the ACA and because some individuals will shift from Medicaid coverage to coverage through the private exchanges, many states might actuallywind up saving money by accepting the expansion. Medicaid can also have a stimulative effect on the economy, leading to increased employment and revenues, and, once again, can increase the potential for overall savings for many states.

Refusing the expansion will also come at a cost to clinicians, offices, and hospitals. Disproportionate hospital share payments will be trimmed by the ACA, reducing a source of income to hospitals. If many citizens are denied Medicaid, then it is likely that they will remain uninsured. Providers that continue to care for them will do so at a significant loss. Although many complain that Medicaid reimbursements are too low, they are still better than nothing. Such a complaint also ignores the fact that reimbursements for primary care services (even those provided by subspecialists) will go up significantly under the ACA, starting this year.

The authors hope that some or all of the states that have announced they will not expand Medicaid will eventually decide the expansion would be beneficial for their low-income citizens, including parents and children, and for their overall financial picture.

Article Link:  http://scopeblog.stanford.edu/2013/04/23/how-states-will-benefit-from-medicaid-expansion/

Lack of Competition Might Hamper Health Exchanges

By Christine Vestal, Staff Writer, State Line | pewstates.org

 

A doctor checks a patient’s vital signs at a Detroit hospital. In Michigan and many other states, a single health insurer dominates the market, a situation that may endure even when health insurance exchanges launch in October. (AP)

The White House sums up the central idea behind the health care exchanges in the new federal health law with a simple motto: “more choices, greater competition.”

But even some stalwart supporters of the Affordable Care Act worry that in many states, people won’t have a lot of health insurance choices when the exchanges launch in October.

Health economists predict that in states that already have robust competition among insurance companies—states such as Colorado, Minnesota and Oregon—the exchanges are likely to stimulate more. But according to Linda Blumberg of the Urban Institute, “There are still going to be states with virtual monopolies.” Currently Alabama, Hawaii, Michigan, Delaware, Alaska, North Dakota, South Carolina, Rhode Island, Wyoming and Nebraska all are dominated by a single insurance company. The advent of the exchanges is unlikely to change that, according to Blumberg.

Competition aside, the exchanges face a number of technical and logistical problems. No less a figure than Montana Sen. Max Baucus, one of the chief Democratic authors of the ACA, said in a hearing earlier this month that he sees “a huge train wreck coming” when the exchanges open for business. Meanwhile, a March survey by the Kaiser Family Foundation indicates a majority of Americans still don’t know what a health insurance exchange is, and skeptics wonder how many eligible individuals will show up.

The exchanges were conceived as private marketplaces operating within federal guidelines. They are designed to give Americans who do not get health insurance from their employers the opportunity to choose from an array of private insurance plans, and to generate competition between insurers that will lead to lower premiums.

Individuals and businesses with up to 100 employees will be able to shop on the exchanges, and people who can’t afford coverage on their own will get government subsidies to help them. About 26 million Americans are expected to purchase health insurance through the exchanges.

But it is unclear how many insurance carriers will decide to seek approval for selling their products through these online marketplaces. Insurance companies have been mostly silent about their plans, with some citing uncertainty about federal and state rules as a reason for holding back.

Some fear that any uptick in competition will bypass those states where doctors are in short supply and the number of hospital systems is limited. A recent analysis by the American Medical Association found that a single insurance company held 50 percent or more of the market in nearly 70 percent of local markets nationwide.

On top of this lack of competition, some of the new federal regulations may push up premiums, at least in the short term. For example, under the health care law insurers will have to cover everyone, including people with pre-existing health conditions. Insurers are likely to raise their premiums to cover the cost of insuring these people who are less healthy.

The mandate that everybody must have insurance is intended to balance this new cost by adding a huge number of young, healthy people to the risk pool. Many of these people, figuring they wouldn’t need health care, have been taking their chances without coverage. But because the federal penalties for not having insurance are so small, especially before 2016, many of the healthiest people may continue to decline coverage.

The Society of Actuaries, which is aligned with the insurance industry, predicts that insurance rates for individuals may increase by as much as 32 percent over the first few years of the exchanges, according to a March report. The Obama administration argues, however, that while premiums may rise for certain people in the short term, in the long run the new federal rules will lead to lower premiums.

Cheryl Smith helped run an early exchange in Utah, and as a consultant she now helps other states develop their own marketplaces. But even though she is a strong believer in the concept, she doubts the exchanges will spur competition in the short term.

See The state of health insurance exchanges

“You can talk in theory about how competition will thrive in these exchanges, but the health plans don’t actually have a lot of time to get product on the shelf,” she said. “If you don’t have product on the shelf, where’s the competition?”

Will insurers come?

Under the federal health law, states had the choice of developing their own exchanges or letting the federal government do it for them. Even after the administration extended the deadline to early this year for states to declare what they would do, only 16 states and the District of Columbia chose to run their own exchanges. Seven others chose partnerships with the federal government. That left the federal government responsible for building exchanges in 27 states.

In addition, the U.S. Department of Health and Human Services is supposed to set up a “data hub” that all 50 exchanges will need to plug into to determine whether an individual or family is eligible for Medicaid or federal tax subsidies. U.S. Health and Human Services Secretary Kathleen Sebelius earlier this month assured Congress that the technology would be unveiled in time for the October launch of the exchanges, even though Republicans in Congress last year failed to approve the funding needed to complete the project.

Another cause for concern is the Obama administration’s recent proposal to scale back a requirement that small businesses offer their employees a menu of insurance policies. If the proposal is adopted, companies with fewer than 100 employees could offer a single policy to their workers, as they have in the past. Without employee choice, critics say, the small business exchange will do little to pressure insurers to develop lower-priced options.

But supporters of the health law are confident that competition and lower prices will ultimately come. In the meantime, they say, consumers will be better off.  Today many Americans pay high premiums if they are sick or old—if they can find coverage at all. They also run the risk of purchasing policies that don’t cover certain medical conditions or limit the total dollar amount of claims. In addition to the new pre-existing condition rule, the health law sets a minimum set of benefits; prohibits lifetime caps on claims; and mandates that insurance companies participating in the exchanges spend at least 85 percent of their revenue on health care.

Big New Market

Top 10 states with the least competitive commercial health insurance markets
  1. Alabama
  2. Hawaii
  3. Michigan
  4. Delaware
  5. Alaska
  6. North Dakota
  7. South Carolina
  8. Rhode Island
  9. Wyoming
  10. Nebraska

Source: American Medical Association, 2012 market concentration analysis.

Despite the federal rules, millions of potential customers will be a powerful draw for insurance companies to participate in the exchanges. Furthermore, the federal government is expected to provide about $350 billion in subsidies to people who can’t afford to purchase insurance on their own.

On top of that, if all states eventually choose to expand Medicaid, the federal government will pour another $952 billion into the health care market over the next 10 years, much of which will go to Medicaid managed-care companies and other private insurers.

Some predict that new insurance carriers, make up of hospitals and large physician practices, will emerge. As it becomes more difficult for traditional carriers to make a profit under the federal health law, the most successful new players may be provider organizations that can control medical costs by avoiding duplication and errors and more carefully coordinating the care they provide, said Rick Curtis, director of the Institute for Health Policy Solutions.

Furthermore, Medicaid managed-care companies, which are used to providing care to low-income people, may decide to offer commercial plans on the exchanges. According to Jeff Van Ness of the Association of Community Affiliated Plans, between one-quarter and one-third of the group’s 58 nonprofit safety net health plans are expected to offer products on the exchanges in 26 states the first year.

Article Link: http://www.pewstates.org/projects/stateline/headlines/lack-of-competition-might-hamper-health-exchanges-85899470381

Seniors Get Hung Up In Health Care Scams

By Jenny Gold

Kaiser Health News Staff Writer

Apr 22, 2013

This KHN story was produced in collaboration with

One recent morning, 86-year-old Evelyne Lois Such was sitting at her kitchen table in Denver when the phone rang.  She didn’t recognize the phone number or the deep voice on the other end of the line. “He asked if I was a senior, and I said yes, and he said we are sending out all new Medicare cards and I want to make sure I have all of your statistics correct,” Such recounts.

At first, the caller didn’t seem too fishy; he started by running through her address and phone number, just to make sure they were right. But then he read off a series of numbers and asked if it was her bank routing number. “I didn’t know really at the time whether it was or not, but I just said no. He said, well could you give it to me so I’ll have it correctly, and I said, well I’m not so sure about that. And he started to say something and I hung up.”

When the scammer tried calling her a second time, she hung up immediately, scribbled down the number from her caller ID and dialed Medicare to report the scam.

“I kind of thought it was funny at first, and then I thought, you know, how dare they?” says Such. “There are some seniors who aren’t well and don’t think as well as they used to, and it just made me angry that they would be victimized like this.”

Law enforcement agencies are reporting an increase in these sorts of health insurance scams across the country. Many of the fraudsters seem to be preying on the public’s confusion over the massive changes taking place in the nation’s health care system.

Seniors are often targets — they’re more likely to be home to answer the phone, and they tend to have retirement savings that scammers hope to tap.  But they aren’t the only victims: The federal government received nearly 83,000 complaints of “imposter scams” last year—up 12 percent from the year before.

“America’s rife with health scams,” says James Quiggle, communications director at the Coalition Against Insurance Fraud in Washington, D.C. “Crooks are offering fake health coverage, stripped down policies masquerading as real coverage. They’re also selling … fake Obamacare coverage,” he explains.

Recent polls have found that well over half of Americans say they still don’t understand how the new health law will affect them.  “Crooks are playing on that confusion. Confusion is a crook’s best friend,” says Quiggle.

“Fraudsters are as attuned to what’s going on in the news as anybody else,” says Lois Greisman, who runs the division of marketing practices at the Federal Trade Commission. “Before Katrina hit land, websites were up soliciting funds to help victims of Katrina. This is not a surprise; this is par for the course.” A program as vast as the health care overhaul makes for a dangerous twist on the regular scams, she adds.

Greisman and her team are working to take down the scams as quickly as possible, but there is an endless number; scammers range from just your average amateur looking to make a quick buck, to well-organized crime rings that mass-produce fraud.

“The first line of defense is don’t take a call from out of the blue from anyone who’s offering to help you navigate the new health care market,” cautions Greisman. “Those kinds of cold calls just shouldn’t take place, same thing with an unsolicited email, an unsolicited text.”

Many people see through those sorts of simple scams, says Sally Hurme, an elder law attorney at AARP.  “But even if one in a thousand falls for the scam and gives up info or agrees to send information off to who knows where, they’ve made [the scammer’s] day. That’s what their job is,” says Hurme.  As the Affordable Care Act ramps up, the country is likely to see more frequent insurance scams, and they’re likely to get more sophisticated, she adds.

Savvy senior Evelyne Lois Such offers this advice for others who get a suspicious call: “Don’t answer too quickly. Think about the answer you give them and what they’re asking.” And never give up and personal or financial information over the phone.

Better yet? Just hang up.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

Article Link: http://www.kaiserhealthnews.org/Stories/2013/April/22/insurance-scams.aspx 

Tax returns used as basis for credits under Affordable Care Act

8% of Americans to qualify for health subsidies

April 19, 2013 | Jonnelle Marte

About 8% of Americans will qualify for the new federal health-insurance subsidies next year, according to a report released today.

A study by Families USA, a Washington, D.C.-based nonprofit group that advocates for lower health-care costs, found that nearly 26 million Americans will be eligible for federal subsidies that will reduce health-care expenses next year. But it’s not clear how many people will actually use the subsidies to lower costs when the insurance exchanges open in October, since some people will instead qualify for Medicaid if their state expands eligibility. Others, meanwhile, still aren’t aware of how the subsidies and the insurance exchanges will work, and some critics say the application is daunting. “The challenge we have right now is just helping people realize they may be eligible for some serious help,” says Kathleen Stoll, director of health policy at Families USA.

Part of the difficulty will be in helping people understand that the subsidies, which will be offered to those buying health coverage through the state and federally run insurance exchanges created under the Affordable Care Act, will be administered as tax credits that will influence 2014 tax liabilities, says Stoll. The less a person makes, the bigger their credit will be. The more they make, the smaller the credit. But this tax credit comes with a twist: the Internal Revenue Service will make monthly payments directly to the insurance companies, lowering the upfront costs for families. “It’s a funny type of tax credit because it’s based on your income but it’s not going to be given to you,” says Roberton Williams, an economist with the nonpartisan Tax Policy Center, based in Washington, D.C. “It’s basically a transfer of money from the federal government to the insurance company.”

And those families who underestimate what their income will be next year may face an unwelcome surprise: a tax bill. That’s because the subsidies will be issued using estimates of what a person expects to earn in 2014, using the prior year’s income as a proxy. The exact size of the subsidy won’t be calculated until a person files their 2014 tax return, a process that won’t happen until 2015. At that time, if the subsidy due turns out to be bigger or smaller than what they received, the difference will be added or subtracted from their tax refunds — or their tax bills, according to the IRS.

Those people who get a big enough raise that they no longer qualify for the subsidies will have to pay back the money. But some families won’t actually have to pay back the full difference, since repayment amounts will be capped by income and family size. For example, for those making less than two times the poverty level, the maximum amount that needs to be paid back is $300 for a single person or $600 for a family. Those making between two and three times the poverty level won’t have to pay back more than $750 for an individual or $1,500 for a family. And those earning between three and four times the poverty level will face a maximum bill of $1,250 for a single person, and $2,500 for family.

The idea of having to repay the tax credit may be daunting for some families, even with the caps in place, says Stoll. But taxpayers receiving insurance subsidies can soften the blow or avoid such bills completely if they keep the insurance exchanges updated about any changes in income, says Stoll. “You want to report changes as they come up,” she says. The subsidies won’t have to be paid back if income estimates used when signing up are in line with actual income.

Taxpayers can apply for the subsidies, which will cap health-care spending at a certain percentage of income, when they sign up for insurance on the exchanges that are scheduled to open Oct. 1. For a family of four making $32,500, the credit could amount to $11,430, according to Families USA. A family of the same size earning $94,200 would qualify for a smaller subsidy of $3,550.

Families will be able to use the subsidies, which will be based on the cost of the second-lowest-cost silver plan in their area, to buy any plan they want, but the size of the subsidy will stay the same. That means those who buy a less expensive plan will have smaller out-of-pocket costs.

As with other tax credits, taxpayers will have to take a few steps in order to qualify. For example, while people won’t need to have filed tax returns prior to applying for the subsidies; they will have to file returns in order to receive the federal help, according to IRS regulations. There is no way to know how many of the people receiving the subsidies will be filing taxes for the first time, but some experts predict the tax credit will lead to an increase in the number of people filing. Married couples must file jointly if they want to get the subsidy, and the credit will not be issued to people who are claimed as a dependant by someone else.

The credit will be refundable, meaning that if people turn out not to owe any taxes, they can still receive the cash. The IRS says it will be able to enforce collection of overpaid subsidies in the same ways that it collects all other unpaid tax bills, meaning those taxpayers could face liens or levies if they don’t pay back the difference. But families can also set up payment plans, paying by credit card and consider other options if they don’t think they’ll be able to pay back the difference in time.

Those people who get a big enough raise that they no longer qualify for the subsidies will have to pay back the money. But some families won’t actually have to pay back the full difference, since repayment amounts will be capped by income and family size. For example, for those making less than two times the poverty level, the maximum amount that needs to be paid back is $300 for a single person or $600 for a family. Those making between two and three times the poverty level won’t have to pay back more than $750 for an individual or $1,500 for a family. And those earning between three and four times the poverty level will face a maximum bill of $1,250 for a single person, and $2,500 for family.

The idea of having to repay the tax credit may be daunting for some families, even with the caps in place, says Stoll. But taxpayers receiving insurance subsidies can soften the blow or avoid such bills completely if they keep the insurance exchanges updated about any changes in income, says Stoll. “You want to report changes as they come up,” she says. The subsidies won’t have to be paid back if income estimates used when signing up are in line with actual income.

Taxpayers can apply for the subsidies, which will cap health-care spending at a certain percentage of income, when they sign up for insurance on the exchanges that are scheduled to open Oct. 1. For a family of four making $32,500, the credit could amount to $11,430, according to Families USA. A family of the same size earning $94,200 would qualify for a smaller subsidy of $3,550.

Families will be able to use the subsidies, which will be based on the cost of the second-lowest-cost silver plan in their area, to buy any plan they want, but the size of the subsidy will stay the same. That means those who buy a less expensive plan will have smaller out-of-pocket costs.

As with other tax credits, taxpayers will have to take a few steps in order to qualify. For example, while people won’t need to have filed tax returns prior to applying for the subsidies; they will have to file returns in order to receive the federal help, according to IRS regulations. There is no way to know how many of the people receiving the subsidies will be filing taxes for the first time, but some experts predict the tax credit will lead to an increase in the number of people filing. Married couples must file jointly if they want to get the subsidy, and the credit will not be issued to people who are claimed as a dependant by someone else.

The credit will be refundable, meaning that if people turn out not to owe any taxes, they can still receive the cash. The IRS says it will be able to enforce collection of overpaid subsidies in the same ways that it collects all other unpaid tax bills, meaning those taxpayers could face liens or levies if they don’t pay back the difference. But families can also set up payment plans, paying by credit card and consider other options if they don’t think they’ll be able to pay back the difference in time.

Health care law could overwhelm addiction services

April 17, 2013 11:22:00 PM

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By Carla K. Johnson

 

CHICAGO — It has been six decades since doctors concluded that addiction was a disease that could be treated, but today the condition still dwells on the fringes of the medical community. Only 1 cent of every health care dollar in the United States goes toward addiction, and few alcoholics and drug addicts receive treatment. One huge barrier, according to many experts, has been a lack of health insurance.

But that barrier crumbles in less than a year. In a major break with the past, 3 million to 5 million people with drug and alcohol problems — from homeless drug addicts to working moms who drink too much — suddenly will become eligible for insurance coverage under the new health care overhaul.

The number of people seeking treatment could double over current levels, depending on how many states decide to expand their Medicaid programs and how many addicts choose to take advantage of the new opportunity, according to an Associated Press analysis of government data. The analysis compared federal data on the addiction rates in the 50 states, the capacity of treatment programs and the provisions of the new health law.

The surge in patients is expected to push a marginal part of the health care system out of church basements and into the mainstream of medical care. Already, the prospect of more paying patients has prompted private equity firms to increase their investments in addiction treatment companies, according to a market research firm. And families fighting the affliction are beginning to consider a new avenue for help.

“There is no illness currently being treated that will be more affected by the Affordable Care Act than addiction,” said Tom McLellan, CEO of the nonprofit Treatment Research Institute and President Barack Obama’s former deputy drug czar. “That’s because we have a system of treatment that was built for a time when they didn’t understand that addiction was an illness.”

But those eager for a new chance at sobriety may be surprised by the reality behind the promise. The system for treating substance abuse — now largely publicly funded and run by counselors with limited medical training — is small and already full to overflowing in many places. In more than two-thirds of the states, treatment clinics are already at or approaching 100 percent capacity.
Read more: http://www.appeal-democrat.com/articles/law-124658-overwhelm-addiction.html#ixzz2QpGsJtk1

How health care overhaul may affect your tax bill

By John M. Gonzales

CHCF Center for Health Reporting

Published: Sunday, Apr. 14, 2013 – 12:00 am | Page 1D

If you’re among millions of uninsured Californians eligible for government-subsidized insurance, the ripples of health reform start with Monday’s tax deadline.

The government will use your return as its first yardstick for how much of a tax break it contributes to your health coverage. And if you don’t have government-mandated health insurance a year from now, a penalty will be added to your federal tax obligations.

These are among the ways the federal tax code will increasingly be at the forefront of health reform’s implementation. Other provisions are also kicking in as the countdown continues toward full operation of the Affordable Care Act on Jan. 1.

Employers already have started withholding a higher Medicare tax on high-income earners, for example. And 2013 marks the debut of a 3.8 percent tax on the net investment income of high earners.

The provision that will provide the biggest boost to taxpayers is the one that offers subsidies for uninsured people who obtain coverage through new insurance exchanges.

“It’s a tremendous deal for the people who are currently uninsured,” said Larry Levitt, senior vice president for special initiatives at the California-headquartered Kaiser Family Foundation.

“That’s not to tell you that the coverage will be free. The coverage will come with deductibles and co-pays,” said Levitt. “It will start with your current tax return, and ask everyone (to give notice) if their circumstances have changed.”

The subsidies also could create a good deal of confusion for participants in the exchanges, and in some cases come back to haunt. If your income goes up substantially during the year, for example, you could have to give back all, or some, of the tax break.

Oscar Hidalgo, spokesman for Covered California, the state’s health reform insurance exchange, said staff members are shaping plans to work with enrollees “to report changes in income that may change the amount of their subsidy.”

Even if enrollees promptly report such changes to the insurance exchange, though, they could still receive an unexpected tax bill, said Levitt.

For example, if an exchange enrollee was unemployed during the beginning of 2014, he would receive a substantial subsidy for insurance. If he then got a job with health insurance that paid about $46,000 a year, there would be no way for the government to recover the subsidy until taxes were filed.

Such an enrollee wouldn’t literally get a bill in the mail, but the Internal Revenue Service would reconcile that benefit on his next tax return, creating a tax liability.

Currently, the reduced tax credit amounts that people could have to give back are capped according to a sliding scale. They range from $300 for a person making about $23,000, to $1,250 for someone making about $45,000. However, there is legislation pending that seeks to remove the caps entirely.

Of course, the subsidy could also work to someone’s benefit. If a person fell upon hard times and made less money, or lost a job, his tax credit would increase.

“There undoubtedly will be cases where people get either pleasant, or nasty, surprises,” said Levitt.

“These are all new things for people,” he said. Health reform “will ultimately provide a lot of benefits, but it’s also going to generate a lot of confusion.”

The tax penalties, which won’t be assessed until 2015, are tied to the “individual mandate,” the linchpin of health reform that the Supreme Court ruled constitutional in the summer.

The mandate operates on a principle of personal responsibility – and the government’s belief that average Americans will buy into the expansion of health coverage as long as it’s affordable.

President Barack Obama’s health reform law is designed to boost the availability of coverage in two ways: through the establishment of mostly federally funded, state-run insurance exchanges like Covered California; and through an expanded version of Medicaid, or Medi-Cal in California.

Uninsured Americans, in turn, are obligated to participate, either by buying insurance in the exchanges, or, if low-income, by signing up for Medicaid (Medi-Cal).

If some of the uninsured don’t participate, those who do buy in will wind up shouldering the cost burden for their care. So the government thinks those who choose to remain uninsured should pay a tax penalty.

The penalties will range from $95 in the first year to at least $695 in later years.

The Congressional Budget Office and federal Joint Committee on Taxation estimate that some 30 million non-elderly residents will remain uninsured by 2016.

There will be multiple exemptions, including one if your insurance premium in the exchange exceeds 8 percent of income.

The CBO estimates that only one-fifth of the 30 million uninsured in 2016 will actually be subject to the tax penalty.

To get people statewide informed about the new insurance options, Covered California has initiated a $43 million outreach campaign.

It includes a direct outreach effort that has compiled a 13-page list of institutions that want to participate. School districts, community clinics and churches are seeking grant funds that require them to reach into their communities and provide information on how to enroll.

John M. Gonzales is a senior writer at the CHCF Center for Health Reporting. Based at the USC Annenberg School for Communication and Journalism, it is funded by the nonpartisan California HealthCare Foundation.

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