Affordable Care Act
By Annika McGinnis, Capital News Service (Sept. 16, 2014)
ANNAPOLIS — Five physicians are running for seats in the Maryland General Assembly this year, a spike in doctor interest in political service that the candidates say coincides with rising state regulation over health.
About a year after Maryland’s troubled rollout of its Affordable Care Act individual exchange website and in a time when health care is dominating the nation’s conversation, the physicians are running to have more of a direct role in forming the decisions they said are affecting their patients and practices.
Most of the Maryland candidates are Democrats, echoing the state’s majority party. On the national level, most physicians running for Congress are Republicans critical of President Barack Obama’s controversial health initiative.
In Maryland, the doctors said, Obamacare was just a sliver of the pie representing increasing state health regulation, including everything from approving medical marijuana use to requiring licenses for doctors to mix medications.
Each of the five candidates is a board-certified physician, Maryland State Medical Society “MedChi” CEO Gene Ransom said.
“It’s not just the ACA; it’s everything,” Ransom said. “I think as doctors realize that more and more of their care is government-funded and regulated, they’re going to get more involved in how the rules are made — and that’s good.”
With more government mandates affecting physicians’ day-to-day work, doctors are concerned about a “fundamental” change in the way health care is practiced — moving away from traditional family-based relationships to more of a corporate structure, said Republican District 42 Senate candidate Dr. Tim Robinson, a retired anesthesiologist at St. Joseph Medical Center in Towson.
“Physicians are very, very concerned about what is happening with the physician-patient relationship,” Robinson said. “The people making the decisions need to be better informed.”
Often, “seemingly very reasonable and logical regulations and laws can impact people in unexpected ways,” said Democratic District 12 House of Delegates candidate Dr. Terri Hill, who runs a plastic surgery practice in Columbia.
“It’s about understanding, on a day-to-day basis, what are the things that really affect people’s lives,” Terri Hill said.
Physicians are rare in the state’s General Assembly: Only three have served in the past 25 years, MedChi reported. Delegate Dr. Dan Morhaim, D-Baltimore County, who has served since 1995, is the only practicing physician serving in the state legislature.
Often the “only person in the room who’s made clinical decisions,” Morhaim said he’s seen a “disconnect between those making decisions and those who actually live with them.”
For instance, a 2013 law requiring doctors to obtain licenses to mix medications causes “a huge amount of confusion” and delay in medical services, Terri Hill said.
That’s just one example of a law the state passed that needed more input from doctors on the actual on-the-ground effects, the candidates said.
“Sometimes when (legislators are) dealing with these issues, it’s helpful to say, ‘OK, this is what we’re planning on doing — what does that mean from a practical point of view?’” Ransom said.
Obamacare issues will likely come into the fray again as the administration of Gov. Martin O’Malley aims to roll out the state’s rebuilt health care exchange in November.
The General Assembly needs to “step up” and ensure “proper oversight and accountability” during that process, said Dr. Clarence Lam, a District 12 Democratic House of Delegates candidate and preventive medicine physician at the Johns Hopkins Bloomberg School of Public Health in Baltimore.
Lam said he also hoped to address rising medication shortages of some drugs that he attributed to ownership issues, quality problems or contamination.
The candidates said the state has not fully worked out implementation of a new law allowing people with certain illnesses to obtain medical marijuana.
If elected, Robinson said he had talked with some fellow candidates about forming a bipartisan physicians’ caucus, though the other candidates said such a group had not yet been formally discussed. Robinson added he hoped more doctors in the legislature could help de-politicize health issues that have become increasingly divisive across the nation.
Along with Robinson, Morhaim, Hill and Lam, Democrat Jay Jalisi, an ear, nose and throat physician who is not currently practicing, is also running for a House of Delegates seat in District 10.
The doctors also said they hoped their background in patient care, including making critical decisions in stressful situations, could bring a more personal and “holistic” way of thinking to issues beyond health.
But doctors could come with their own set of issues. Balancing clinical work with time in Annapolis isn’t easy, Ransom said. Morhaim works emergency shifts several weekends in session before taking a break until his legislative work ends. Terri Hill said she plans to run the surgical side of her practice for the nine months the General Assembly is out and then do administrative work on weekends and Monday mornings while serving in office.
But the candidates said the tradeoff would be worth it.
“All of us got into this business because we wanted to help people,” said Dr. Hugh Hill, an emergency physician and former Democratic District 16 Senate candidate who lost in the primary. “(It was) the sense and duty of not sitting on the sidelines and griping anymore but getting in and pitching.”
By Annika McGinnis, McClatchy Newspapers (June 28, 2012)
Alaska’s congressional delegation is at odds over Thursday’s pivotal Supreme Court decision on the Obama administration’s health care act, with Republicans Lisa Murkowski and Don Young already talking about pushing for the law’s repeal while Democrat Mark Begich said it was now time to move on.
Alaska was among the states that challenged the constitutionality of the health care law. Murkowski, the state’s senior senator, said Alaskans will see tax increases and individual rights violations because of the court’s decision on the Affordable Care Act.
The court upheld almost all portions of the act, despite questions about the constitutionality of a part that requires most individuals to purchase health insurance under the threat of financial penalties. In doing so, it found the so-called individual mandate was permitted because of Congress’ tax-levying powers.
“After the president very clearly stated that this bill is not a tax and those in Congress supporting this measure said this is not a tax, it has very clearly been labeled as such today,” Murkowski said in a conference call. “If there’s one thing Alaskans will agree on, it’s that they don’t like taxes.”
While the Democratic Begich said it’s time to move forward from the ruling, Murkowski, House member Young and Gov. Sean Parnell, also a Republican, said Congress must now repeal the law. Murkowski said the issue will come to define the November election.
Murkowski said many promises made about the bill haven’t been kept, including assurances that Americans would receive lower costs and premiums, taxes wouldn’t change and Medicare would be protected. She said many tax increases set to occur at the end of next year will be unpopular with Alaskans.
“I think many of us had forgotten about them because those deadlines were well off into the future,” Murkowski said. “Nobody’s been talking about these, because they’ve been out of sight, out of mind. Now that the Supreme Court has dared to use the ‘T word’ and say what it [the law] is – a tax on American public – I think they’re going to get a lot of attention.”
Alaskans will have to face taxes including a “wellness tax,” Medicare payroll taxes and a tax on medical devices like dental implants, Murkowski said.
Even so, Murkowski said she recognized some benefits that fellow senator Begich cited as the law’s successes. Among them are the provisions that allow young people to stay on their parents’ plans until age 26 and that guarantee coverage for people with pre-existing conditions.
There’s been debate over where Murkowski stands on the health care law. Joe Miller, her opponent in the 2010 Republican primary, argued Murkowski really wasn’t against repeal because of a statement she’d earlier made to KTUU television in Anchorage that “repealing this is not the answer in my opinion because if you just repeal and do nothing, we will not have addressed health care reform.”
However, she voted against the bill and joined other Republicans in voting in favor of unsuccessful Senate attempts to repeal it, most recently in February of 2011.
The Democratic Begich said he was pleased by the court’s decision.
“While the law is not perfect, the status quo was not an option,” Begich said in a statement. “It is time to move past the politics and come together to make the law work for Alaskans.”
Begich referred to many of the same benefits as Murkowski and further praised the law’s creation of tax credits for small businesses and more services for the elderly and Alaska Natives. He said citizens could also possibly receive cash rebates if insurers don’t use their premiums for health care.
In Alaska, 18 percent of citizens have no insurance. Under Obama’s health care law, 9,000 young adults in Alaska will be able to keep the insurance they’ve recently gained through their parents’ plans and 40,000 Alaskan families will receive tax credits, Begich said.
Julie Hasquet, Begich’s press secretary, said the senator believes lawmakers must move on from the political squabbling.
“His view is that the court has upheld the law, it can continue to tweak it but the time has come to move forward,” she said.
Alaska does not have a health insurance exchange – a marketplace showing people in the state their health insurance options – and under the new law it will have to set one up. Parnell said in a statement that the state is reviewing the court’s decision on what had been a required state Medicaid expansion, but was ruled Thursday to be optional.
Begich said it’s a good idea to undertake the expansion of Medicaid, which funds health care for low-income people through a combination of federal and state dollars.
“In Alaska, more than 30,000 people are newly eligible,” Begich said in his statement. “Because the states will never pay more than 10 cents on the dollar for this coverage, it is a very good deal.”
But according to Murkowski, it’s time to “repeal and replace.” Murkowski said she thinks there will be congressional action to repeal the law in the coming weeks. However, because of Obama and the Democratically-controlled Senate, Young believes the chances of repeal this year are almost zero.
The next step in the repeal process will be a vote in the House of Representatives on July 11, according to Luke Miller, Young’s press secretary. But Young believes the law’s outcome will really be decided by the American people in November, Miller said.
Like Murkowski, Young emphasized the law’s comparison to a tax.
“The unfortunate irony today is that ObamaCare was saved because it is a new tax on the American people – which is something this president promised would not happen,” Young said in a statement.
Young does support certain aspects of the law, especially the Indian Health Care Improvement Reauthorization and Extension Act, which he designed. In January, Young introduced a bill in the House that would repeal all of Obama’s law except the Indian health care segment, according to Miller.
By Jayne O’Donnell and Annika McGinnis, USA TODAY (Sept. 30, 2013)
Don’t wait. But don’t hurry, either.
That’s the best approach to the new health insurance exchanges that are scheduled to open for business Tuesday. Buying insurance is supposed to be easier than ever once several provisions of the Affordable Care Act take effect this fall. That doesn’t mean the process is easy or should be done speedily, however, experts say. That’s especially true if insurance shopping is new to you.
“Don’t be hurried in buying a plan,” says Bryce Williams, managing director of global benefits consulting firm Towers Watson Exchange Solutions. “There’s no rush.”
Williams likens it to buying the first car off an assembly line: It may be best to let the new exchanges — particularly the 31 run by the federal government — iron all the kinks out. Federal exchanges may not be ready, and there may be more and better information and “hand holding” available after a few weeks. Besides, your insurance won’t start until Jan. 1, 2014, whether you sign up now or in December.
If you’re one of the more than 45 million people who lack health insurance, you can begin the enrollment process Oct. 1, but you certainly don’t have to. The deadline to purchase (or face a penalty at tax time in 2015) is March 31, 2014.
Every state has people called navigators who received grants to help guide consumers through the process in an unbiased way. Insurance companies are also increasingly pitching their individual policies online and in stores, where agents are available to help you figure out what plan is right for you — but they obviously have a vested interest in your decision. A key benefit to the new online exchanges is the ability to easily compare different plans — as you might during online car shopping — without a pushy salesperson hovering.
Key steps in the process:
•Step one. Check out the options on your state’s exchange. Start at HealthCare.gov, the federal government’s portal, which will route you to your state or allow you to create an account if the feds are running your state’s insurance marketplace. Plug in details about where you live, what you earn and family size. If your income is low enough, you may be alerted that you’re eligible for Medicaid and told how to apply for that.
•Step two. Determine if you are eligible for financial help, which can come in the form of subsidies to offset the cost of premiums, co-payments or deductibles.
Anyone under age 65 participating in the new state exchanges can get tax credits if their incomes are between the poverty level and 400% of the poverty level. In 2014, that means families of four that make $24,000 to $94,000 per year could get subsidies. Those who make 250% or less of the poverty level can get even more financial help. The federal poverty level is now $11,490 for an individual and $23,550 for a family of four.
•Step three. Calculate what you’ve been spending for your uninsured health care, including prescription drugs, doctor visits and any emergency room or other hospital visits. Are there health concerns you’ve avoided addressing that are likely to get worse, like that sore knee or breathing condition? Medicines you should be taking but aren’t? Are there young athletes in the house?
•Step four. Spend time pondering what type of plan is right for you, based on how much you can afford to pay in premiums, co-payments and cost-sharing for procedures, as well as what your medical needs are likely to be next year.
Options are grouped into coverage levels that are coined bronze, silver, gold and platinum based on the percentage of out-of-pocket costs borne by the consumer. Bronze plans cover the lowest percentage of expenses — 60% — and have the lowest premiums. Silver plans cover 70%, gold pay 80% and platinum plans cover 90% of out-of-pocket costs. Even policies that appear affordable may not be if you have high deductibles, co-payments or cost-sharing for procedures.
Could you afford to pay 40% of last year’s medical bills — and almost everything out of pocket until a high deductible is met?
You need to consider other factors when deciding among plans. Williams recommends consumers stick with insurers that are “well entrenched” in their area; not one you’ve never heard of before.
Farzan Bharucha, a health care strategist for consulting firm Kurt Salmon, recommends calling providers you would consider if you had insurance and ask whether they will be accepting patients in the policies you’re considering.
“A fair number will say they are full,” says Bharucha, who advises physician groups and hospitals.
•Step five. Decide whether it even makes sense financially for you to buy insurance. For some people, paying the annual penalty, which starts at $95 or 1% of income for the first year, may be the cheaper move. (Unless, of course, your health takes a turn for the worse.) By 2016, however, the annual penalty will be $695 or 2.5% of income.
The exchange plans are set up so you will never have to pay more than 9.5% of your salary for insurance. But the new law certainly doesn’t mean coverage will be cheap.
“It’s still going to be expensive, particularly for low-income people,” says Andy Hyman, who directs the health care coverage team at the Robert Wood Johnson Foundation. “There is a financial burden, but it’s far less today than what it was.”
How the financial help works
Under the Affordable Care Act, there are two main types of subsidies to reduce insurance costs and out-of-pocket costs of medical care: tax credits and cost-sharing reductions. To lower your insurance costs, if eligible, you can get subsidies to help pay for plans obtained in the new state exchanges. You might also qualify to pay less out-of-pocket for co-payments, co-insurance (that share of procedure costs you have to pay) and deductibles.
The subsidy amount is based primarily on income and number of family members. The tax credit is calculated as the cost of a “benchmark” middle-range plan in your area minus your required payment, a set percentage of your family income. These benchmark plans are set as the second-lowest-cost “silver” plans for a person of your age living in your area. Depending on how much you make, you’ll be expected to pay between 2% and 9.5% of your income on monthly premiums. The difference between what you’re expected to pay and the cost of the premium is what the government will cover.
For example, Kaiser Family Foundation says a 40-year-old who makes $30,000 a year is expected to pay 8.37% of income in insurance, or $2,512 per year. In this person’s area, the estimated “benchmark” premium is $3,857 per year. So this person gets a tax credit of $3,857 minus $2,512, or $1,345, the foundation says.
These tax credits are “advanceable,” meaning that the savings are included in your monthly premiums. You pay lower costs up front, rather than having to get reimbursed later.
Health Savings Account-qualified health plans define a general maximum amount for out-of-pocket costs. Then, eligible people can get reductions in their own maximum out-of-pocket expenses, which range from one-third to two-thirds of this initial maximum, depending on income. Those with the lowest incomes — at or below 250% of the poverty level — can also get plans that cover a higher proportion of the cost of medical services.
Still murky? You’ll see how much you can get in savings after you fill out an application for the state exchanges starting Tuesday. But until then, you can estimate your potential savings with the Kaiser Family Foundation’s subsidy calculator. This calculator takes into account information about your income, family and tobacco use and gives you estimates of how much you might receive in subsidies and how much you might have to pay for premiums and out-of-pocket costs.
By Jayne O’Donnell and Annika McGinnis, USA TODAY (Oct. 3, 2013)
A handful of big-name firms and many small ones are making major changes to their health care plans this fall, and while some big companies are blaming the Affordable Care Act, insurance and economic experts call those claims an exaggeration.
Making health insurance changes, including big premium and deductible hikes when the rate of increase in health care costs has slowed, creates a “messaging issue,” says University of Michigan business economics professor Thomas Buchmueller.
“That’s not an easy conversation,” says Buchmueller. “It’s convenient to say, ‘the ACA is raising our costs.'”
Big companies citing the ACA are “using this as cover,” says Farzan Bharucha, a health care strategist for consulting firm Kurt Salmon. “Companies are making a business decision that by dropping or limiting coverage you won’t have employees leave.”
Still, there has been big news from some big companies — and even a major university — and some cite the new law.
• Darden Restaurants. The owner of Red Lobster, Olive Garden and LongHorn Steakhouse, decided last fall to hire fewer full-time workers and more part-time workers to lessen expected costs of insuring full-time workers under the ACA. But it reversed the policy in December after complaints. The company recently decided to give employees a designated sum of money to use to choose their own insurer and plan level through a private online exchange that is separate from the new government exchanges. Darden says the move is unrelated to the health law. Private exchanges are an increasingly popular way for employers to reduce their health costs without cutting coverage for employees, who would be considered insured for the purposes of the ACA.
• Home Depot. The retailer said last month that full-time employees’ insurance plans will cost more this fall because its insurance prices had risen. Spokesman Stephen Holmes wouldn’t comment on whether that was due to the ACA: “We don’t discuss our cost structure, so I’m not going to point specifically to any one thing.” The home-improvement chain also said in September that it’s sending about 20,000 part-time employees who had low-cost/low-benefit “mini-med” plans prohibited under ACA to the new federal and state marketplaces to buy their own insurance. Holmes wouldn’t disclose whether workers will get a subsidy to pay for their new insurance, but these plans are nearly always paid fully by employees.
• Securitas. The large security-guard provider Securitas said last week that it’s sending 55,000 employees to the new state exchanges to buy their own insurance plans. The move was in response to the prohibition of “mini-med” insurance plans that the company previously provided. Spokesman Jim McNulty says the company didn’t contribute to the plans and will not be giving workers money to buy on the exchanges. He expects most of the workers on the plans — 90% of whom are full time — will qualify for government subsidies.
• Sears. The retailer decided to give employees a set amount of money to choose their own health care insurer and benefits through an online private exchange run by Aon. “The Affordable Care Act motivated us to think differently about the health care benefits that we provide associates,” says spokesman Howard Riefs. But, he noted, “The final decision to proceed with a private exchange model was made independent of Affordable Care Act considerations.”
• UPS. The delivery company dropped health insurance for about 15,000 of its employees’ spouses whose employers also offered insurance. In a memo to workers, the company said it expects the cost of medical care in 2014 is to increase about 7.25% compared to 2013 and said an additional 4% rise would be due to the Affordable Care Act. It cited the need to cover dependent children longer and the expected rise in the number of employees enrolling in plans. The University of Virginia also dropped this type of spousal coverage and blamed the health law last month.
“There’s nothing in the ACA that would make dropping spousal coverage be an obvious response,” says Buchmueller. “That’s the type of strategy firms have been doing for a while.”
Most large companies made any big ACA-related changes to their health insurance plan two years ago, says Bryce Williams, managing director of global benefits company Towers Watson Exchange Solutions. He says only about one in 10 of the major companies Towers represents are making major changes to their health plans this year. Towers Watson represents about 80% of the companies on the Fortune 500, he says.
Some changes, like the elimination of mini-med plans, can benefit employees. Some workers were shocked to find how little coverage they had when they landed in emergency rooms. Private exchanges, which IBM and Walgreens have also announced they’re moving employees to — can be what Williams calls a “win-win” for workers and employers. Many other experts warn that employers’ contributions may not keep up with premium increases.
It’s far more believable for a small company to cite the new law than for big employers to do so as it’s had little effect on them financially this year, says Allen Wishner, CEO of Flexible Benefit Service Corp., which serves insurance brokers for small to mid-sized companies.
These companies have far more regulatory burdens and costs associated with the new law, he says. In July, those employing more than 50 workers were given another year to provide insurance to all full-time workers or face a $2,000-per-employee fine.
“I struggle to see what’s different” for large employers, says Wishner, a director of the Employers Council on Flexible Compensation. “The delay kept the status quo for the most first part.”
Smaller employers may wind up sending employees to the government exchanges because of the “expense of it and the administrative burden of offering insurance,” says Ed O’Malley, president of the corporate client group for National Financial Partners, which advises companies on ACA compliance and health care, and manages private exchanges. “In industries, that are more competitive, it may be more difficult to not offer health insurance.”
By Jayne O’Donnell and Annika McGinnis, USA TODAY (Nov. 10, 2013)
More than a month after HealthCare.gov and 15 state-based exchanges opened for business, consumers and even physicians are finding it’s isn’t easy or even possible sometimes to find out which doctors and hospitals are in the plans’ provider networks.
“Some states, they have it, and for some, it isn’t available. It ‘s a big unknown for the patient,” says Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, whose members manage doctors’ practices. “It’s very much up in the air.”
That means insurance shoppers often can’t choose plans that their doctors participate in — or that include doctors near them. It also means doctors may not be able to confirm they’re in a plan when consumers ask them. While consumers may now occasionally find a doctor listed on their commerical insurance plan isn’t accepting patients or is no longer on the network, at least they can reliably find provider lists and doctors at least know what plans they currently participate in.
Gilberg says he wouldn’t buy a plan “if I didn’t know if my physicians were in the network or the hospital was in the network.”
The Department of Health and Human Services (HHS) and others say there’s plenty of time for consumers to shop for plans and note many of the uninsured don’t even have doctors.
“The Health Insurance Marketplace will significantly improve access to care for people who lack affordable health coverage today,” said Joanne Peters, an HHS spokeswoman. “The good thing about the law is that now people have more options to shop for a plan that includes their doctor, whereas before they didn’t have the ease and flexibility to do that.”
The uncertainty stems from the general glitchiness that remains for some state exchanges and the federal site, HealthCare.gov, which is selling plans for 36 states that didn’t set up their own exchanges. It’s also due to the fact that insurers are still deciding what doctors they want on their networks and often haven’t even informed doctors if they are including them on their networks.
Some insurers have clauses in contracts with their existing doctors that say the doctors have to participate in any plans the insurers offer in that state. Doctors who don’t want to participate on the exchange plans might have had to opt out, which some may not have realized, says Sam Unterricht, a Brooklyn ophthalmologist who heads the Medical Society of the State of New York. And many doctors and hospitals are still negotiating with insurers over rates.
A survey released last week by the New York medical society found 40% of 405 doctors said they didn’t know how they wound up on insurers’ exchange plans. Just 6% said they chose to be on plans and 16% said they had to participate as part of a contract. The rest said they declined to participate. Three quarters of the doctors said they had never received a fee schedule from insurers for the plans.
In an attempt to cut costs, insurers are also cutting the number of hospitals and doctors they include in networks, and that’s a process that may continue through December.
“The intent is that when January rolls around, they should have all of the providers,” says Farzan Bharucha, a health care strategist at consulting firm Kurt Salmon.
It’s common that doctor and hospital networks are updated throughout the year, says Robert Zirkelbach, spokesman for America’s Health Insurance Plans, which represents insurers. And all of the networks have to meet “adequacy standards.”
In one rural area of Tennessee, there will only be two insurance carriers, and one isn’t listing any doctors yet. Another is a new co-op insurer and is still building its medical network, says broker J. Darlene Tucker, based in Scotts Hill, Tenn. Even so, she says her customers have bigger concerns now.
“At this point, clients aren’t even asking about who is in the network;” Tucker says. “They are still trying to get far enough into the HealthCare.gov website to determine what their monthly premium will be and what insurance plan they can afford.”
Some doctors say they’re still waiting to hear what rates insurers are paying — or they are appalled they are so low.
Michelle Berger, an Austin-based ophthalmologist, says she has only heard from one of the insurance companies she works with and she signed a contract to be on Blue Cross of Texas’ exchange plans. She did so before she saw the fees she would be paid, which she says are only slightly better than Medicaid.
“I’m not going to be able to take a full day of exchange patients and keep my doors open,” she says.
Peters says there will be enough doctors for the newly insured.
“We have put protections in place to ensure that consumers have choice through good access to networks of providers,” Peters said. “Consumer protections in federal and state law require health plans to include a sufficient network of providers as well as essential community providers.”
In Sugarland, Texas, internal medicine physician Elizabeth Torres says she doesn’t know what plans she’s listed on, but she does know her profit margins are so thin she won’t be able to accept many patients at rates that are lower than Medicare.
“We’re hoping to hear more information,” Torres says. “Everything’s trickling out a little at a time.”
Around some other states:
• In New York, broker James Schutzer found a 2,025-page spreadsheet of doctors when he looked up hospitals on the NY State of Health exchange recently. When he went on Empire Blue Cross’ site, he got the same spreadsheet and a “Find a Doctor Alert” that noted the individual and small group health products are “under construction.”
Unterricht says the accuracy of the provider lists will be suspect, too, because doctors may unwittingly be on an insurers list since they already accept their commercial plans. “Some may not accept new patients right away, and some may not accept new patients at all,” he says.
• In California, the provider network for individual plans became searchable Wednesday, and there’s still no access to the plans for small businesses in the Small Business Health Options Program or physicians in the networks. The state had to start from scratch building the medical network because there was no consistency in medical coding, says Sacramento broker Laurie Rood. Programmers didn’t realize each insurance company had a different physician code.
• In Maryland, the exchange does offer an option to search plans by provider and insurance company. The site compiles the list of providers so people don’t have to go to the company website to check on their own. Gene Ransom, CEO of the Maryland State Medical Society, says Maryland’s exchange plans are so similar to what’s already commercially available, the process went more smoothly than in many other states.
Like in Texas, where Berger says, “It’s a comedy of errors right now.”
Contributing: Fola Akinnibi
By Jayne O’Donnell and Annika McGinnis, USA TODAY (Oct. 21, 2013)
So few insurers offer plans on some of the new government health insurance exchanges that consumers in those states may pay too much or face large rate increases later, insurance experts say.
An average of eight insurers compete for business in 36 states that had exchanges run or supported by the federal government last month, the Department of Health and Human Services says. (Idaho has since started its own exchange.) But just because an insurer sells in a state, it doesn’t mean it sells in every area of a state so many residents have far fewer options.
Many state-run exchanges also have far fewer than HHS’ average, which is weighted based on the number of uninsured residents in an area. Vermont has two, Kentucky has three and Nevada and Maryland each have four.
Some insurers pulled out of the exchanges required by the Affordable Care Act as the Oct. 1 launch approached. That leaves an uneven patchwork of providers — ranging from one insurer in New Hampshire and West Virginia to 16 in New York.
The difference also leads to a wide disparity in the numbers of plans, from just seven in Alabama to 106 in Arizona, according to HHS’ analysis. But HHS spokeswoman Joanne Peters says the situation is still much better than it was before the law took effect.
“In the past, consumers were too often denied or priced out of quality health insurance options, but thanks to the Affordable Care Act consumers will be able to choose from a number of new coverage options at a price that is affordable,” she said in an e-mail.
About a third of insurance companies opted out of participating in the exchanges in states where they were already doing business, according to a recent report by McKinsey & Co. About half of states — which include about a third of the non-elderly insured population — will see a “material decline” in competitors, says McKinsey, while the other half of states will have about the same or more insurance choices on the exchanges.
“When there are too few carriers, down the road there will be issues with rate increases that make plans unaffordable for average Americans even with rate subsidies,” says Bryce Williams, managing director of Towers Watson Exchange Solutions, which operates private insurance exchanges for companies. “We need competitive insurance markets in all states (and) multiple carriers competing hard.”
Williams notes that most counties have five to seven insurance companies competing on Medicare plans. Competition on their exchange has held down costs and kept annual rate increases to less than 2.8% a year, he says.
Provisions in the law, such as those that prohibit cost sharing or deductibles for preventive care, help level the playing field between states with and without a large number of insurers, some say.
“The quality will be comparable because they have to meet a minimum threshold (for) the basics of the plans,” says Georgetown senior research fellow Sabrina Corlette. “It’s really around the pricing that competition can play a role.”
Mary Chalmers, 62, lives in rural California where she just has two plans to choose from even though California has 12 insurers participating on the exchange. The same “silver” plan costs $62 more a month in her hometown of San Luis Obispo than in Los Angeles. Thanks to a subsidy, however, the self-employed investor’s premium for an individual policy will drop from the $467 she pays now a month to about $100 a month.
States with just a few providers “definitely lose the competitive effect of carriers competing against each other to drive down those costs,” agrees David Cusano, also a senior research fellow at the Georgetown University Health Policy Institute.
Corlette says insurers’ decision are motivated by profits.
“Serving the public is not part of their mission. … They’re crunching the numbers and looking at tightening profit margins,” she says. “Part of that is a result of the Affordable Care Act, basically telling these insurance companies that your insurance model to attract healthy people and keep out sick people is no longer allowed.”
Some insurers’ approaches:
• Aetna. In May, Aetna acquired Coventry Health Care, which also had filed plans for some of the exchanges. Aetna dropped out of some states where Coventry filed plans and the reverse was true in other states.
On a combined basis, Aetna and Coventry plans will be available on a statewide basis in 10 state exchanges and in limited geographic areas in seven state exchanges. Spokesman Matthew Wiggin says the company “narrowed in on those states where we had the right cost structure and network arrangements to meet the specific demographic needs of exchange consumers.” The result, he says, is the company’s presence will deliver “long-term profitable growth.
• Cigna. The company is selling plans on five exchanges — those in half of the states in which it sells individual plans. Spokesman Joseph Moody notes that while Cigna is a “national leader in employee health plans,” it only started selling plans to individuals in the last four to five years.
• HealthNet. Although it’s one of the only major insurance providers that has been losing money in recent years, HealthNet is taking a different approach, offering the cheapest rates — sometimes by 25% — in Southern California, said company spokesman Brad Kieffer. HealthNet expects to see 19.4% growth in revenue in 2014, a huge jump from 2011, when growth shrank 16.2%.
In New Hampshire, the exchange has just Anthem Blue Cross and Blue Shield, which greatly reduces the number of hospital options, says State Sen. Andy Sanborn. Since more than 90% of doctors are affiliated with specific hospitals, the new plans will also exclude many doctors, he added.
Plans don’t include the capital’s Concord Hospital, and the next-closest hospital uses Concord doctors, Sanborn said. So, he said, people will have to drive to a third hospital an hour away. They’ll even have to call an ambulance from a far-away hospital to pick them up, he said.
“There’s an absolute outcry of people at this point,” he said.
In West Virginia, where there is also only one provider, Highmark Blue Cross Blue Shield submitted its rates “long before” it knew the competition, spokeswoman Kristin Ash wrote in an e-mail. Prices were based on regulations and company experience, she wrote.
Some insurers said they dropped out of exchanges due to uncertainty. For Aetna, the new law could be “materially adverse,” the company wrote in its second-quarter SEC filing, mentioning the new Medicare requirements, individual coverage mandate, rating limits and new fees and assessments. In states that didn’t expand Medicaid, enrollment could also drop, Aetna wrote.
Carriers are “really worried” about a sicker population purchasing plans and driving down profits, Cusano said.
West Virginia, with its single insurer, ranks 47 out of 50 in terms of health, according to the 2013 America’s Health Rankings Senior Report.
Companies also may have left because of tougher regulations on pricing, quality, transparency and more, especially in state-run exchanges such as Maryland, Oregon and Rhode Island, Cusano said. Williams says New Jersey, which only have three insurers, has some of the toughest regulations in the country for insurers — and much higher rates than in nearby New York.
Companies doing well tended to be more conservative. Aetna and United Health Care, which have both pulled out of several exchanges, both enjoyed strong revenue growth last year. The companies expect to continue their growth through at least 2014, a trend Cusano said could be due to larger markets and enrollment increases because of Medicaid expansion.
As some larger insurers left certain marketplaces, companies that used to serve only the Medicaid market may move in — a trend already seen in states including Rhode Island and Oregon, Corlette said.
The number of companies participating in exchanges may also grow — or deplete — after insurers see what theirs and other companies’ experiences have been.
“It is too early to speculate on 2015, but we will use our experience in 2014 to help inform our exchange strategy for 2015 and beyond,” says Aetna’s Wiggin.
By Annika McGinnis, USA TODAY (Dec. 11, 2013)
Just five people work at Michael Cadigan’s law firm, but thanks to his state’s new marketplace for small business health insurance, he’s saving $1,000 a month paying for 100% of their medical coverage.
In the past, “numerous” insurers canceled his employees’ insurance because they didn’t want to deal with a small group, including one person with a rare genetic disorder, said Cadigan, of Albuquerque
Now, he says he can offer the same benefits to the Cadigan Law Firm’s workers as a large business — and for less than he was paying. It took him just 15 minutes to sign up.
Cadigan’s experience illustrates some benefits of the new Small Business Health Options Program, or SHOP, created by the Affordable Care Act. Businesses with 50 or fewer workers don’t have to offer employees health insurance plans, but SHOP tries to make it easier and more affordable for them to do so.
SHOP marketplaces are operating online in most of the states running their own small business marketplaces. That includes 10 states and the District of Columbia planning to run their own marketplaces for individual care, and two other states creating their own SHOP marketplace but using the federal government’s HealthCare.gov site for the individual market.
The other states under the federal system are a different story: Though businesses can still buy SHOP plans, they aren’t available online and lack some of the major features for which they were originally intended.
Until next November, small businesses in those states can work through an insurance broker, agent or directly with an insurer to sign up for SHOP insurance plans. HealthCare.gov can still be used to compare plan options and insurers in different areas, though businesses can’t use it to sign up.
To encourage smaller businesses to offer coverage, the government is expanding the small business health care tax credit that began in 2010. Businesses with fewer than 25 employees that purchase a SHOP-qualified plan — whether from an agent, broker, insurer or a SHOP marketplace — may be eligible for the tax credit. Starting with the 2014 tax year, it will cover up to 50% of employer-paid insurance premiums, compared with up to 35% now.
Tax credit: Small businesses can save
Businesses in many states operating their own SHOPs will enjoy some advantages over those elsewhere. In most of those states, employers can offer employees a choice of plans and receive one bill.
Both those features will be unavailable until next November in SHOP marketplaces operated by the federal government.
Taken together, the federal government’s delays mean small businesses in the 36 states with federally run SHOP marketplaces will see very similar plans — in terms of costs and choice — whether they buy SHOP plans or insurance in the general market, says Janet Trautwein, CEO of National Association of Health Underwriters.
These SHOP plans “are not going to have too many bells and whistles,” she said.
Some states are also lagging. Maryland announced in November that its SHOP marketplace wouldn’topen for enrollment until April 1. In Vermont, where small businesses and individuals buy through the same exchange, glitches with the website led many businesses to buy coverage straight through insurers or have their current coverage extended until the problems are fixed.
But almost every state-run marketplace offers some degree of employee choice, and in eight states — New York, Minnesota, Nevada, Hawaii, Oregon, Rhode Island, Vermont and Utah — employers can offer workers a choice of any plan on the exchange, according to a July report by The Commonwealth Fund, a health care research foundation.
In Kentucky, 1,109 small businesses had started applications through the state’s online SHOP marketplace as of Dec. 6, and about 40% had finished the process, said Jill Midkiff, a spokeswoman for the Kentucky Cabinet for Health and Family Services.
About half of participating businesses are offering their employees a choice in plans, Midkiff said.
Small employers “can choose to offer their employees one plan; they can choose to offer them all plans; they can choose to offer all plan options under one insurer,” Midkiff said.
Five insurance companies sell 24 plans on Kentucky’s SHOP. The individual market only has one more carrier — Humana. It’s still evaluating whether it’ll join SHOP next year, Humana spokeswoman Kate Marx said.
In some states, the difference in participating insurers is even greater.
In Washington, SHOP is only available in two of the state’s 39 counties, and there’s only one participating insurer, Kaiser Foundation Health Plan of the Northwest. Anthem Blue Cross, the state’s largest insurer, withdrew its participation in July. In contrast, eight issuers offer plans on the state’s individual marketplace.
In Las Vegas,, Ron Nelsen, owner of Pioneer Overhead Door, said his insurer, Saint Mary’s Health Plans, withdrew from SHOP. Just two carriers are left, he said.
Nationwide, business owners are confused and misinformed about the health care law, said Todd McCracken, president of the National Small Business Association.
In an October study by the National Federation of Independent Business, 45% of small-business owners said they were dissatisfied with the information they’d received on the law. Although 66% said they were familiar with the act, more than half weren’t sure if their state was operating a working marketplace at the time of the survey.
Facing “information overload,” many businesses are choosing to renew policies they’ve had in the past rather than investigate SHOP, said Amanda Austin, NFIB director of federal public policy.
“We’re still seeing mass confusion on what they’re supposed to comply with, what they’re not supposed to comply with — can they keep their old plan? Do they have to purchase through the exchange?” Austin said.
But no matter the policies of their states, small business owners who don’t investigate SHOP-qualifed plans could be missing out on huge subsidies, Nelsen said.
With just five employees, Nelsen expects to get SHOP tax credits amounting to almost $5,000 in the next two years. He says next year will be the first time he can afford to offer his employees dental insurance.
“It’s a no-brainer for me” to buy through the SHOP, he said.
Credits aren’t for everyone: The largest ones are only available to the smallest, lowest-paying employers — those with annual average wages of $25,000 and an average of 10 or fewer workers, said Timothy Jost, health law expert and professor at Washington and Lee University School of Law. But he said those were the ones that usually don’t offer health insurance.
He added that non-profits should remember they are also eligible for SHOP plans and tax credits. His wife’s non-profit, with five to eight employees, has been offering them health care since the small employer tax credit went into effect in 2010 — the first time it was able to offer its workers insurance.
Nelsen, the Las Vegas door dealer, said buying SHOP plans for his workers was worth it beyond the cost savings.
“If you’re a small employer like me, five employees or 10 employees, this is the first time you can offer your employees high-quality insurance,” he said. “It helps you retain employees, compete against larger employees, keep people at work. And on a moral footing, it’ll make you feel warm and fuzzy that you’ve done this for your employees.”