New CBO AHCA Score Confirms What We Already Knew

The CBO has just released their final score for the revised version of the American Health Care Act (AHCA). Find how the CBO scored this revised piece of legislation and what it means for you in this article by Mark J. Mazur from Tax Policy Center

Meet the new estimate of the American Health Care Act (AHCA).  It looks a lot like the old one.

On May 24, the Congressional Budget Office (CBO) released its estimate of the revised AHCA, which the House of Representatives passed on May 7.  The revised AHCA allows states to opt out of ACA requirements establishing essential health benefits and permits states establishing high-risk pools to allow insurers to set premiums based on health status.  The modified bill sets aside $8 billion to help subsidize these pools.

Like its predecessor, the revised AHCA has four distinct major components.

  1. One would cut taxes paid by high-income individuals (lower taxes on capital gains, divided, and interest income for households with annual income over $250,000) and by companies in specific industries: health insurance, medical devices, prescription drugs, and indoor tanning salons.
  2. The second is a grab bag of tax reductions, such as loosened rules for flexible spending accounts and health savings accounts, repeal of the tax on individuals who can afford but don’t buy adequate health coverage, and a further delay of the excise tax on high-cost health plans (the so-called “Cadillac Tax”).
  3. The third restructures the tax credits that subsidize health care coverage, moving from existing income-related tax credits for purchasing health insurance on the ACA Marketplaces to age-related tax credits to purchase health insurance.
  4. And the fourth cuts Medicaid spending reducing coverage and essentially paying for the tax cuts.

The chart below shows the tax changes (the first two major components mentioned) go almost entirely to the highest earning households, while providing little or no benefit to the bottom 80 percent of the income distribution.  In fact, TPC estimates that a $37,000 average annual tax cut will go to the 1 percent of the population with the highest earnings (annual income of over $772,000).  The top 0.1 percent of the income distribution would receive an annual tax cut of over $200,000 (annual income over $3.9 million).  (Note that this chart shows the estimates for 2022, but incorporates the tax law changes for 2023 as the AHCA phases in some of the tax changes).

The bottom line: CBO estimates confirm the AHCA is largely a tax bill paired up with Medicaid cuts to offset the costs. And, as in the earlier version of the bill, almost all the benefits go to the highest income households in the country.

See the original article Here.

Source:

Mazur M. (2017 May 24). New CBO AHCA score confirms what we already knew [Web blog post]. Retrieved from address http://www.taxpolicycenter.org/taxvox/new-cbo-ahca-score-confirms-what-we-already-knew


The Facts on the GOP Health Care Bill

Do you know all the facts behind the American Health Care Act (AHCA)? Check out this article by Fact Check and find out about all the details behind the GOP new health care legislation.

House Republicans released their replacement plan for the Affordable Care Act on March 6. How does the GOP’s American Health Care Act differ from the ACA? We look at the major provisions of the amended version of the bill, as of May 4. (The legislation passed the House on May 4 and now goes to the Senate for consideration.)

Is there a requirement to have insurance or pay a tax?

No. For all months after Dec. 31, 2015, the bill eliminates the tax penalties that the ACA imposes on nonexempt individuals for not having health insurance, as well as employers with 50 or more full-time workers who do not offer health insurance to their employees. (To be clear, unless this bill becomes law quickly, those filing their 2016 tax returns will still be subject to the penalty.)

Are insurance companies required to offer coverage regardless of preexisting conditions?

Yes, but there’s a penalty for not having continuous coverage. Under both the ACA and the GOP bill, insurers can’t deny coverage to anyone based on health status. Under the GOP bill, they are required, however, to charge 30 percent higher premiums for one year, regardless of health status, to those entering the individual market who didn’t have continuous coverage, which is defined as a lapse of coverage of 63 days or more over the previous 12 months.

However, an amendment proposed in late April allows states to obtain a waiver that would enable insurers to charge more to people with preexisting conditions who do not maintain continuous coverage. Such policyholders could be charged higher premiums based on health status for one year. After that, provided there wasn’t another 63-day gap, the policyholder would get a new, less expensive premium that was not based on health status. This change would begin in 2019, or 2018 for those enrolling during special enrollment periods.

States with such a waiver would also have to have either a “risk mitigation program,” such as a high-risk pool, or participate in a new Federal Invisible Risk Sharing Program, as a House summary of the amendment says. Beyond those programs, another amendment to the bill would provide $8 billion in federal money over five years to financially aid those with preexisting conditions who find themselves facing higher premiums in waiver states.

For more on this waiver program, see our May 4 article, “The Preexisting Conditions Debate.”

What happens to the expansion of Medicaid?

It will be phased out.

Prior to the ACA, Medicaid was available to groups including qualified low-income families, pregnant women, children and the disabled. The ACA expanded eligibility to all individuals under age 65 who earn up to 138 percent of the federal poverty level (about $16,643 a year for an individual), but only in states that opted for the expansion. Thirty-one states and the District of Columbia have opted in to the expansion, which includes enhanced federal funding, so far. More than 11 million newly eligible adults had enrolled in Medicaid through March 2016, according to an analysis by the Kaiser Family Foundation of data from the Centers for Medicare & Medicaid Services.

Under the Republican health care plan, no new enrollment can occur under this Medicaid expansion, with enhanced federal funds, after Dec. 31, 2019. States that haven’t already opted in to the expansion by March 1, 2017, can’t get the ACA’s enhanced federal funding for the expansion-eligible population.

To be clear, the bill doesn’t eliminate the Medicaid expansion coverage for those who are enrolled prior to 2020 in the current expansion states. But if those enrollees have a break in coverage for more than one month after Dec. 31, 2019, they won’t be able to re-enroll (unless a state wanted to cover the additional cost itself).

The Republican plan includes another notable change to Medicaid. It would cap the amount of federal funding that states can receive per Medicaid enrollee, with varying amounts for each category of enrollee, such as children, and the blind and disabled. Currently, the federal government guarantees matching funds to states for qualifying Medicaid expenses, regardless of cost. Under the GOP bill, states have the option of receiving a block grant, rather than the per-capita amounts, for traditional adult enrollees and children – not the elderly or disabled. States also have the option of instituting work requirements for able-bodied adults, but not pregnant women.

Are insurers required to cover certain benefits?

The latest version of the bill requires insurers to provide 10 essential health benefits mandated by the ACA, unless a state obtains a waiver to set its own benefit requirements. The ACA’s essential health benefits required insurance companies to cover 10 health services: ambulatory, emergency, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services and devices, laboratory services, preventive care and chronic disease management, and pediatric services including dental and vision.

Beginning in 2020, states could set their own essential health benefits by obtaining a waiver.

At that point, state requirements could vary, as they did before the ACA was enacted. For instance, a 2009 report from the Council for Affordable Health Insurance, a group representing insurance companies, said 47 states had a mandate for emergency service benefits, while 23 mandated maternity care and only three mandated prescription drug coverage.

State Medicaid plans would not have to meet the essential health benefits requirement after Dec. 31, 2019.

Are there subsidies to help individuals buy insurance? How do they differ from the Affordable Care Act?

There are two forms of financial assistance under the ACA: premium tax credits (which would change under the GOP plan) and cost-sharing to lower out-of-pocket costs (which would be eliminated).

Let’s look at the premium tax credits first. They would be available to individuals who buy their own coverage on the individual, or nongroup, market. But instead of a sliding scale based on income, as under the ACA, the Republican plan’s tax credits are based on age, with older Americans getting more. (The plan, however, allows insurers to charge older Americans up to five times more than younger people, as we will explain later.)

The ACA tax credits also take into account the local cost of insurance, varying the amount of the credit in order to put a cap on the amount an individual or family would have to spend for their premiums. The Republican plan doesn’t do that. (See this explanation from the nonpartisan Kaiser Family Foundation for more on how the ACA tax credits are currently calculated.)

There are income limits under the GOP bill. Those earning under $75,000, or $150,000 for a married couple, in modified adjusted gross income, get the same, fixed amounts for their age groups — starting at $2,000 a year for those under age 30, increasing in $500 increments per decade in age, up to $4,000 a year for those 60 and older. The tax credits are capped at $14,000 per family, using the five oldest family members to calculate the amount. This new structure would begin in 2020, with modifications in 2018 and 2019 to give more to younger people and less to older people.

For those earning above those income thresholds, the tax credit is reduced by 10 percent of the amount earned above the threshold. For instance, an individual age 60 or older earning $100,000 a year would get a tax credit of $1,500 ($4,000 minus 10 percent of $25,000).

That hypothetical 60-year-old gets $0 in tax credits under the ACA. But if our 60-year-old earns $30,000 a year, she would likely get more under the ACA than the GOP plan: In Franklin County, Ohio, for instance, the tax credit would be $6,550 under the ACA in 2020 and $4,000 under the Republican plan. (This interactive map from the KFF shows the difference in tax credits under the health care plans.)

As for the cost-sharing subsidies available now under the ACA — which can lower out-of-pocket costs for copays and other expenses for those earning between 100 percent and 250 percent of the federal poverty level  — those would be eliminated in 2020. However, the GOP bill sets up a Patient and State Stability Fund, with $100 billion in funding over nine years with state matching requirements, that can be used for various purposes, including lowering out-of-pocket costs of a state’s residents. An additional $30 billion was added to this fund for other programs: $15 billion would be used to set up the Federal Invisible Risk Sharing Program, another reinsurance program, and $15 billion is set aside specifically for maternity and mental health coverage.

Small-business tax credits would end in 2020. The health insurance marketplaces stay, but the tax credits can be used for plans sold outside of those marketplaces. And the different levels of plans (bronze, silver, etc.) based on actuarial value (the percentage of costs covered) are eliminated; anyone can buy a catastrophic plan, not just those under 30 as is the case with the ACA.

What does the bill do regarding health savings accounts?

It increases the contribution limits for tax-exempt HSAs, from $3,400 for individuals and $6,750 for families now to $6,550 and $13,100, respectively. It allows individuals to use HSA money for over-the-counter drugs, something the ACA had limited to only over-the-counter drugs for which individuals had obtained a prescription.

There were so-called winners and losers in the individual market under the ACA. How would that change under this bill?

Both the current law and the Republican proposal primarily impact the individual market, where 7 percent of the U.S. population buys its own health insurance. As we’ve written many times, how the ACA affected someone in this market depended on their individual circumstances — and the same goes for the House Republicans’ plan. In general, because the ACA said that insurers could no longer vary premiums based on health status and limited the variation based on age, older and sicker individuals could have paid less than they had before, while younger and healthier individuals could have paid more.

The GOP plan allows a wider variation in pricing based on age: Insurers can charge older individuals up to five times as much as younger people, and states can change that ratio. Under the ACA, the ratio was 3:1. So, younger individuals may see lower premiums under this bill, while older individuals could see higher premiums.

Older Americans do get higher tax credits than younger Americans under the Republican plan, but whether that amounts to more or less generous tax credits than under the ACA depends on other individual circumstances, including income and local insurance pricing. Those with low incomes could do worse under the GOP plan, while those who earned too much to qualify for tax credits under the ACA (an individual making more than $48,240) would get tax credits.

We would encourage readers to use the Kaiser Family Foundation’s interactive map to see how tax credits may change, depending on various circumstances. “Generally, people who are older, lower-income, or live in high-premium areas (like Alaska and Arizona) receive larger tax credits under the ACA than they would under the American Health Care Act replacement,” KFF says. “Conversely, some people who are younger, higher-income, or live in low-premium areas (like Massachusetts, New Hampshire, and Washington) may receive larger assistance under the replacement plan.”

A few weeks after the bill was introduced, House Republicans, through an amendment, made a change to a tax provision to create placeholder funding that the Senate could use to boost tax credits for older Americans, as we explain in the next answer.

Also, some individuals with preexisting conditions could see higher premiums under the legislation, if they don’t maintain continuous coverage and live in states that received waivers for pricing some plans based on health status.

Which ACA taxes go away under the GOP plan?

Many of the ACA taxes would be eliminated.

As we said, the bill eliminates all fines on individuals for not having insurance and large employers for not offering insurance. Also, beginning in 2017, for high-income taxpayers, the bill eliminates the 3.8 percent tax on certain net investment income. The 0.9 percent additional Medicare tax on earnings above a threshold stays in place until 2023. The bill repeals the 2.3 percent tax on the sale price of certain medical devices in 2017 and the 10 percent tax on indoor tanning services (effective June 30, 2017). It also gets rid of the annual fees on entities, according to the IRS, “in the business of providing health insurance for United States health risks,” as well as fees on “each covered entity engaged in the business of manufacturing or importing branded prescription drugs.”

It reduces the tax on distributions from health savings accounts (HSAs) not used for qualified medical expenses from 20 percent to 10 percent and the tax on such distributions from Archer medical savings accounts (MSAs) from 20 percent to 15 percent. It lowers the threshold for receiving a tax deduction for medical expenses from 10 percent to 5.8 percent of adjusted gross income. (Originally, the bill lowered the threshold to 7.5 percent, but House Republicans changed that to create some flexibility for potential funding changes the Senate could make. A congressional aide told us that the change is expected to provide $85 billion in spending over 10 years that the Senate could use to boost the tax credit or provide other support for Americans in the 50-64 age bracket.)

And from 2020 through 2025, the bill suspends the so-called “Cadillac tax,” a 40 percent excise tax on high-cost insurance plans offered by employers.

Will young adults under the age of 26 still be able to remain on their parents’ plans?

Yes. The bill does not affect this provision of the ACA.

How does the bill treat abortion? 

It puts a one-year freeze on funding to states for payments to a “prohibited entity,” defined as one that, among other criteria, provides abortions other than those due to rape, incest or danger to the life of the mother. This would include funding to Planned Parenthood under Medicaid, which is most of the organization’s government funding. Under current law, Planned Parenthood can’t use federal money for abortions, except those in cases of rape, incest or risk to the mother’s life.

Also under the GOP plan, tax credits can’t be used to purchase insurance that covers abortion beyond those three exceptions. Health insurance companies would still be able to offer “separate coverage” for expanded coverage of abortions, which individuals could then purchase on their own.

How many people will have insurance under the plan, as compared with the ACA?

The nonpartisan Congressional Budget Office estimated that the legislation, as passed by the House, would lead to 14 million fewer people having insurance in 2018 and 23 million fewer insured in 2026, compared with current law under the ACA.
How much will the bill cost, as compared with the ACA?

CBO estimated that the legislation passed by the House would reduce federal deficits by $119 billion over the next decade, 2017-2026. It would reduce revenues by $992 billion, mostly by repealing the ACA’s taxes and fees, and reduce spending by $1.11 trillion for a net savings of $119 billion, according to CBO.

See the original article Here.

Source:

Robertson L., Gore D., Schipani V.  (2017 May 24). The facts on the GOP health care bill [Web blog post]. Retrieved from address http://www.factcheck.org/2017/03/the-facts-on-the-gop-health-care-bill/


The Effects of Ending the Affordable Care Act’s Cost-Sharing Reduction Payments

Take a look at this interesting article by Kaiser Family Foundation and see how the cost-sharing mandate under the ACA will be affected in the AHCA.

Controversy has emerged recently over federal payments to insurers under the Affordable Care Act (ACA) related to cost-sharing reductions for low-income enrollees in the ACA’s marketplaces.

The ACA requires insurers to offer plans with reduced patient cost-sharing (e.g., deductibles and copays) to marketplace enrollees with incomes 100-250% of the poverty level. The reduced cost-sharing is only available in silver-level plans, and the premiums are the same as standard silver plans.

To compensate for the added cost to insurers of the reduced cost-sharing, the federal governments makes payments directly to insurance companies. The Congressional Budget Office (CBO) estimates the cost of these payments at $7 billion in fiscal year 2017, rising to $10 billion in 2018 and $16 billion by 2027.

The U.S. House of Representatives sued the Secretary of the U.S. Department of Health and Human Services under the Obama Administration, challenging the legality of making the cost-sharing reduction (CSR) payments without an explicit appropriation. A district court judge has ruled in favor of the House, but the ruling was appealed by the Secretary and the payments were permitted to continue pending the appeal. The case is currently in abeyance, with status reports required every three months, starting May 22, 2017.

If the CSR payments end – either through a court order or through a unilateral decision by the Trump Administration, assuming the payments are not explicitly authorized in an appropriation by Congress – insurers would face significant revenue shortfalls this year and next.

Many insurers might react to the end of subsidy payments by exiting the ACA marketplaces. If insurers choose to remain in the marketplaces, they would need to raise premiums to offset the loss of the payments.

We have previously estimated that insurers would need to raise silver premiums by about 19% on average to compensate for the loss of CSR payments. Our assumption is that insurers would only increase silver premiums (if allowed to do so by regulators), since those are the only plans where cost-sharing reductions are available. The premium increases would be higher in states that have not expanded Medicaid (and lower in states that have), since there are a large number of marketplace enrollees in those states with incomes 100-138% of poverty who qualify for the largest cost-sharing reductions.

There would be a significant amount of uncertainty for insurers in setting premiums to offset the cost of cost-sharing reductions. For example, they would need to anticipate what share of enrollees in silver plans would be receiving reduced cost-sharing and at what level. Under a worst case scenario – where only people eligible for sharing reductions enrolled in silver plans – the required premium increase would be higher than 19%, and many insurers might request bigger rate hikes.

While the federal government would save money by not making CSR payments, it would face increased costs for tax credits that subsidize premiums for marketplace enrollees with incomes 100-400% of the poverty level.

The ACA’s premium tax credits are based on the premium for a benchmark plan in each area: the second-lowest-cost silver plan in the marketplace. The tax credit is calculated as the difference between the premium for that benchmark plan and a premium cap calculated as a percent of the enrollee’s household income (ranging from 2.04% at 100% of the poverty level to 9.69% at 400% of the poverty in 2017).

Any systematic increase in premiums for silver marketplace plans (including the benchmark plan) would increase the size of premium tax credits. The increased tax credits would completely cover the increased premium for subsidized enrollees covered through the benchmark plan and cushion the effect for enrollees signed up for more expensive silver plans. Enrollees who apply their tax credits to other tiers of plans (i.e., bronze, gold, and platinum) would also receive increased premium tax credits even though they do not qualify for reduced cost-sharing and the underlying premiums in their plans might not increase at all.

We estimate that the increased cost to the federal government of higher premium tax credits would actually be 23% more than the savings from eliminating cost-sharing reduction payments. For fiscal year 2018, that would result in a net increase in federal costs of $2.3 billion. Extrapolating to the 10-year budget window (2018-2027) using CBO’s projection of CSR payments, the federal government would end up spending $31 billion more if the payments end.

This assumes that insurers would be willing to stay in the market if CSR payments are eliminated.

Methods

We previously estimated that the increase in silver premiums necessary to offset the elimination of CSR payments would be 19%.

To estimate the average increase in premium tax credits per enrollee, we applied that premium increase to the average premium for the second-lowest-cost silver plan in 2017. The Department of Health and Human Services reports that the average monthly premium for the lowest-cost silver plan in 2017 is $433. Our analysis of premium data shows that the second-lowest-cost silver plan has a premium 4% higher than average than the lowest-cost silver plan.

We applied our estimate of the average premium tax credit increase to the estimated total number of people receiving tax credits in 2017. This is based on the 10.1 million people who selected a plan during open enrollment and qualified for a tax credit, reduced by about 17% to reflect the difference between reported plan selections in 2016 and effectuated enrollment in June of 2016.

We believe the resulting 23% increase in federal costs is an underestimate. To the extent some people not receiving cost-sharing reductions migrate out of silver plans, the required premium increase to offset the loss of CSR payments would be higher. Selective exits by insurers (e.g., among those offering lower cost plans) could also drive benchmark premiums higher. In addition, higher silver premiums would somewhat increase the number of people receiving tax credits because currently some younger/higher-income people with incomes under 400% of the poverty level receive a tax credit of zero because their premium cap is lower than the premium for the second-lowest-cost silver plan. We have not accounted for any of these factors.

Our analysis produces results similar to recent estimates for California by Covered California and a January 2016 analysis from the Urban Institute.

See the original article Here.

Source:

Levitt L., Cox C., Claxton G., (2017 April 25). The effects of ending the affordable care act's cost-sharing reduction payments[Web blog post]. Retrieved from address http://www.kff.org/health-reform/issue-brief/the-effects-of-ending-the-affordable-care-acts-cost-sharing-reduction-payments/


Why Private Exchanges Haven't Taken Off As Predicted

Great article from our partner, United Benefit Advisors (UBA) by Paul Rooney.

While the health care affordability crisis has become so significant, questions still linger—will private exchanges become a viable solution for employers and payers, and will they will continue to grow? Back in 2015, Accenture estimated that 40 million people would be enrolled in private exchange programs by 2018; the way we see this model’s growth today doesn’t speak to that. So, what is preventing them from taking off as they were initially predicted? We rounded up a few reasons why the private exchange model’s growth may be delayed, or coming to a halt.

They Are Not Easy to Deploy

There is a reason why customized benefits technology was the talk of the town over the last two years; it takes very little work up-front to customize your onboarding process. Alternatively, private exchange programs don’t hold the same reputation. The online platform selection, build, and test alone can get you three to six months into the weeds. Underwriting, which includes an analysis of the population’s demographics, family content, claims history, industry, and geographic location, will need to take place before obtaining plan pricing if you are a company of a certain size. Moreover, employee education can make up a significant time cost, as a lack of understanding and too many options can lead to an inevitable resistance to changing health plans. Using a broker, or an advisor, for this transition will prove a valuable asset should you choose to go this route.

A Lack of Education and a Relative Unfamiliarity Revolves Around Private Exchanges

Employers would rather spend their time running their businesses than understanding the distinctions between defined contribution and defined benefits models, let alone the true value proposition of private exchanges. With the ever-changing political landscape, employers are met with an additional challenge and are understandably concerned about the tax and legal implications of making these potential changes. They also worry that, because private exchanges are so new, they haven’t undergone proper testing to determine their ability to succeed, and early adoption of this model has yet to secure a favorable cost-benefit analysis that would encourage employers to convert to this new program.

They May Not Be Addressing All Key Employer and Payer Concerns

We see four key concerns stemming from employers and payers:

  • Maintaining competitive benefits: Exceptional benefits have become a popular way for employers to differentiate themselves in recruiting and retaining top talent. What’s the irony? More options to choose from across providers and plans means employees lose access to group rates and can ultimately pay more, making certain benefits less. As millennials make up more of today’s workforce and continue to redefine the value they put behind benefits, many employers fear they’ll lose their competitive advantage with private exchanges when looking to recruit and retain new team members.
  • Inexperienced private exchange administrators: Because many organizations have limited experience with private exchanges, they need an expert who can provide expertise and customer support for both them and their employees. Some administrators may not be up to snuff with what their employees need and expect.
  • Margin compression: In the eyes of informed payers, multi-carrier exchanges not only commoditize health coverage, but perpetuate a concern that they could lead to higher fees. Furthermore, payers may have to go as far as pitching in for an individual brokerage commission on what was formerly a group sale.
  • Disintermediation: Private exchanges essentially remove payer influence over employers. Bargaining power shifts from payers to employers and transfers a majority of the financial burden from these decisions back onto the payer.

It Potentially Serves as Only a Temporary Solution to Rising Health Care Costs

Although private exchanges help employers limit what they pay for health benefits, they have yet to be linked to controlling health care costs. Some experts argue that the increased bargaining power of employers forces insurers to be more competitive with their pricing, but there is a reduced incentive for employers to ask for those lower prices when providing multiple plans to payers. Instead, payers are left with the decision to educate themselves on the value of each plan. With premiums for family coverage continuing to rise year-over-year—faster than inflation, according to Forbes back in 2015—it seems private exchanges may only be a band-aid to an increasingly worrisome health care landscape.

Thus, at the end of it all, change is hard. Shifting payers’, employers’, and ultimately the market’s perspective on the projected long-term success of private exchanges will be difficult. But, if the market is essentially rejecting the model, shouldn’t we be paying attention?

See the original article Here.

Source:

Rooney P. (2017 April 26). Why private exchanges haven't taken off as predicted [Web blog post]. Retrieved from address http://blog.ubabenefits.com/why-private-exchanges-havent-taken-off-as-predicted


Poll: Majority Sees GOP Health Bill as Step Backward

Have you wondered how other Americans feel about the repealing of the ACA? Check out in this great article by Jonathan Easley from The Hill about a poll taken from Harvard detailing how people across the country really feel about the passing of the AHCA.

A majority of voters see the GOP healthcare bill as a step backward and want to see the Senate make significant changes to it.

According to data from the latest Harvard-Harris Poll survey, provided exclusively to The Hill, 55 percent view the House-passed bill as a step backward, compared to 45 percent who described it as a step forward.

Seventy-seven percent of Republicans view the bill as a step forward, while 77 percent of Democrats and 61 percent of independents view it as a step back.

Fifty-seven percent of voters said they want to see the Senate make significant changes to the bill if it is to be passed into law, including 64 percent of Republicans and 66 percent of independents.

Sixty percent of voters want the Senate bill to ensure people with preexisting conditions can get affordable healthcare.

An amendment to the House bill offers state waivers that would allow carriers to charge people more based on their health.

“The voters want to neither go back to ObamaCare nor to the House bill,” said Harvard-Harris co-director Mark Penn.

“The Senate is going to have to thread the needle here and craft a new compromise. The voters are mostly concerned with pre-existing conditions and are against any penalty for not having insurance. Solve the preconditions dilemma and they might have something that could get public support.”

The Harvard-Harris online survey of 2,006 registered voters was conducted May 17–20. The partisan breakdown is 36 percent Democrat, 32 percent Republican, 29 percent independent and 3 percent other. The poll uses a methodology that doesn't produce a traditional margin of error.

The Harvard–Harris Poll is a collaboration of the Harvard Center for American Political Studies and The Harris Poll. The Hill will be working with Harvard-Harris throughout 2017. Full poll results will be posted online later this week.

Satisfaction with the bill cut sharply along partisan lines.

See the original article Here.

Source:

Easley J. (2017 May 24). Poll: majority sees GOP health bill as step backward[Web blog post]. Retrieved from address http://thehill.com/policy/healthcare/335003-poll-majority-sees-gop-health-bill-as-step-backward


Health Reform Expert: Here’s What HR Needs to Know About GOP Repeal Bill Passing

The House of Repersentives has just passed the American Health Care Act (AHCA), new legislation to begin the repeal process of the ACA. Check out this great article from HR Morning and take a look how this new legislation will affect HR by Jared Bilski.

Virtually every major news outlet is covering the passage of the American Health Care Act (AHCA) by the House. But amidst all the coverage, it’s tough to find an answer to a question that’s near and dear to HR: What does this GOP victory mean for employers? 

The AHCA bill, which passed in the House with 217 votes, is extremely close to the original version of the legislation that was introduced in March but pulled just before a vote could take place due to lack of support.

While the so-called “repeal-and-replace” bill would kill many of the ACA’s taxes (except the Cadillac Tax), much of the popular health-related provisions of Obamacare would remain intact.

Pre-existing conditions, essential benefits

However, the new bill does allow states to waive certain key requirements under the ACA. One of the major amendments centers on pre-existing conditions.

Under the ACA, health plans can’t base premium rates on health status factors, or pre-existing conditions; premiums had to be based on coverage tier, community rating, age (as long as the rates don’t vary by more than 3 to 1) and tobacco use. In other words, plans can’t charge participants with pre-existing conditions more than “healthy” individuals are charged.

Under the AHCA, individual states can apply for waivers to be exempt from this ACA provision and base premiums on health status factors.

Bottom line: Under this version of the AHCA, insurers would still be required to cover individuals with pre-existing conditions — but they’d be allowed to charge astronomical amounts for coverage.

To compensate for the individuals with prior health conditions who may not be able to afford insurance, applying states would have to establish high-risk pools that are federally funded. Critics argue these pools won’t be able to offer nearly as much coverage for individuals as the ACA did.

Under the AHCA, states could also apply for a waiver to receive an exemption — dubbed the “MacArthur amendment” — to ACA requirement on essential health benefits and create their own definition of these benefits.

Implications for HR

So what does all this mean for HR pros? HR Morning spoke to healthcare reform implementation and employee benefits attorney Garrett Fenton of Miller & Chevalier and asked him what’s next for the AHCA as well as what employers should do in response. Here’s a sampling of the Q&A:

HR Morning: What’s next for the AHCA?
Garrett Fenton: The Senate, which largely has stayed out of the ACA repeal and replacement process until now, will begin its process to develop, amend, and ultimately vote on a bill … many Republican Senators have publicly voiced concerns, and even opposition, to the version of the AHCA that passed the House.

One major bone of contention – even within the GOP – was that the House passed the bill without waiting for a forthcoming updated report from the Congressional Budget Office.  That report will take into account the latest amendments to the AHCA, and provide estimates of the legislation’s cost to the federal government and impact on the number of uninsured individuals …

… assuming the Senate does not simply rubber stamp the House bill, but rather passes its own ACA repeal and replacement legislation, either the Senate’s bill will need to go back to the House for another vote, or the House and Senate will “conference,” reconcile the differences between their respective bills, and produce a compromise piece of legislation that both chambers will then vote on.

Ultimately the same bill will need to pass both the House and Senate before going to the President for his signature.  In light of the House’s struggles to advance the AHCA, and the razor-thin margin by which it ultimately passed, it appears that we’re still in for a long road ahead.

HR Morning: What should employers be doing now?
Garrett Fenton: At this point, employers would be well-advised to stay the course on ACA compliance. The House’s passage of the AHCA is merely the first step in the legislative process, with the bill likely to undergo significant changes and an uncertain future in the Senate. The last few months have taught us nothing if not the impossibility of predicting precisely how and when the Republicans’ ACA repeal and replacement effort ultimately will unfold.  To be sure, the AHCA would have a potentially significant impact on employer-sponsored coverage.

However, any employer efforts to implement large-scale changes in reliance on the AHCA certainly would be premature at this stage.  The ACA remains the law of the land for the time being, and there’s still a long way to go toward even a partial repeal and replacement.  Employers certainly should stay on top of the legislative developments, and in the meantime, be on the lookout for possible changes to the current guidance at the regulatory level.

HR Morning: Specifically, how should employers proceed with their ACA compliance obligations in light of the House passage of the AHCA?Garrett Fenton: Again, employers should stay the course for the time being, and not assume that the AHCA’s provisions impacting employer-sponsored plans ultimately will be enacted.  The ACA remains the law of the land for now.  However, a number of ACA-related changes are likely to be made at the regulatory and “sub-regulatory” level – regardless of the legislative repeal and replacement efforts – thereby underscoring the importance of staying on top of the ever-changing guidance and landscape under the Trump administration.

Fenton also touched on how the “MacArthur amendment” and the direct impact it could have on employers by stating it:

“… could impact large group and self-funded employer plans, which separately are prohibited from imposing annual and lifetime dollar limits on those same essential health benefits.  So in theory, for example, a large group or self-funded employer plan might be able to use a “waiver” state’s definition of essential health benefits – which could be significantly more limited than the current federal definition, and exclude items like maternity, mental health, or substance abuse coverage – for purposes of the annual and lifetime limit rules.  Employers thus effectively could be permitted to begin imposing dollar caps on certain benefits that currently would be prohibited under the ACA.”

See the original article Here.

Source:

Bilski J. (2017 May 5). Health reform expert: here's what HR needs to know about GOP repeal bill passing [Web blog post]. Retrieved from address http://www.hrmorning.com/health-reform-expert-heres-what-hr-needs-to-know-about-gop-repeal-bill-passing/


Discovery for Health and Welfare Benefit Plans: Required ERISA Reporting—Form 5500

Make sure you are aware of all the requirements for Form 5500 reporting. Take a look at this great article from our partner, United Benefit Advisors (UBA) about how to properly file Form 5500 by Anne B. Vandeveer.

Most companies are fully aware of Form 5500 reporting requirements related to their 401(k) plans, but are less familiar with the Form 5500 reporting requirements for their health and welfare benefit plans.

Requirements: Most employer-sponsored health and welfare benefit plans, including, but not limited to, group health, dental, vision, life insurance, disability insurance, voluntary worksite benefits (typically, but not always), and health flexible spending account (FSA) plans are subject to the reporting requirements under the Employee Retirement Income Security Act (ERISA) of 1974.

A Form 5500 is due to be filed with the Department of Labor (DOL) within seven months after the end of the plan year.

Exemptions: While there are a few common exceptions to filing for smaller plans and those sponsored by certain governmental and church plans, most employers who are filing Form 5500 for their retirement plans will also have Form 5500 reporting requirements for their health and welfare plans. Certain funding types (VEBAs, Trusts) may not be exempt based on size, however.

Normal Annual Filing: Once Schedule A information is available on the plan, from the carrier or third-party administrator (TPA), this information, along with some general participant enrollment information, is used to complete the filing. So long as company ownership, participation, and plans offered haven't changed from year to year, it's a fairly simply process.

It is worth reviewing the filing history of all plans subject to ERISA for all prior years to rule out any delinquencies in advance of filing for the current year. If all is in order, the filing deadline is the last day of the seventh month after the end of the plan year. Extensions, of up to 2.5 months, are available if the company applies prior to the initial deadline by filing Form 5558 with the Internal Revenue Service (IRS).

Failure to File and Remedy: If a Form 5500 filing is determined to be delinquent, the company is potentially subject to penalties imposed by the DOL (up to $1,100 per day) if the DOL discovers this before the return is filed electronically. The company can voluntarily "enter" the DOL's delinquent filer amnesty program. The program is formally named the Delinquent Filer Voluntary Compliance Program (DFVCP) and entering it will eliminate the risk of any future penalty associated with the delinquent Form 5500 returns. However, the DOL still imposes a lower, capped dollar penalty, which is assessed on a "per plan" basis.

The first step for a DFVCP filing is in defining the applicable plans and plan years along with the due date for each plan, historically. Correction is generally suggested as far back as the delinquency goes, or minimally as far back as documentation can be provided. That said, many companies choose to internally review all options and risks.

Preparation of Filings: The DOL mandates electronic filings under its EFAST2 system and it can be challenging for employers to prepare their own Form 5500 filings. Defining whether, and which of, your plans are subject to the ERISA reporting requirements is the best first step of the ERISA reporting process.

Because the forms resemble IRS tax forms, companies often assume that an accountant is needed for preparation. This is not necessarily the case and it is more common to rely on a benefits consultant with domain expertise. These consultants routinely determine filing requirements, have experience dealing directly with the DOL (not IRS), and transmit hundreds of filings annually.

That said, it is important to note that, regardless of who prepares the filing, it remains the sole responsibility of the employer, or Plan Sponsor, when it comes to Form 5500 transmissions or failures to file.

See the original article Here.

Source:

Vandeveer A. (2017 April 18). Discovery for health and welfare benefit plans: required ERISA reporting-form 5500[Web blog post]. Retrieved from address http://blog.ubabenefits.com/discovery-for-health-and-welfare-benefit-plans-required-erisa-reporting-form-5500


Here’s What You Need to Know About Preexisting Conditions in the GOP Health Plan

Has the repeal of the ACA left you worried about all the changes potential coming to your healthcare? Take a look at this article by Glenn Kessler from the Washington Posts and find out what AHCA means for you and your healthcare.

With House Republicans prepared to take a vote Thursday on yet another version of a plan to overhaul the 2010 Affordable Care Act, attention has been especially focused on whether Obamacare’s popular prohibition against denying coverage based on preexisting medical conditions will remain in place. Republicans, from President Trump to lawmakers pushing for the bill, insist that it remains intact, just in different form. Democrats and opponents of the bill say the guarantee is gone or greatly weakened.

The reality is more nuanced and complicated, as is often the case in Washington policy debates. Despite Ryan’s tweet that people with preexisting conditions are protected, there is no guarantee that they will not face higher costs than under current law. The impact of recent tweaks to the proposed legislation is especially unclear because lawmakers are rushing ahead without an assessment by the nonpartisan Congressional Budget Office. So here’s The Fact Checker’s guide to the debate.

What’s the issue?

Before the Affordable Care Act, insurance companies could consider a person’s health status when determining premiums, sometimes making coverage unaffordable or even unavailable if a person was already sick with a problem that required expensive treatment. The ACA prohibited that, in part by requiring everyone to purchase insurance.

But that “individual mandate” was unpopular and Republicans would eliminate that requirement in their proposed American Health Care Act. As a replacement, the AHCA initially included a continuous coverage provision that boosted insurance rates by 30 percent for one year if he or she has a lapse in coverage. (We explored this interaction between the provisions earlier.)

As part of an effort to attract more votes, Republicans have added an amendment, crafted by Rep. Tom McArthur (R-N.J.), that instead allows states to seek individual waivers from the law. One possible waiver would replace the continuous coverage provision so that insurance companies for one year could consider a person’s health status when writing policies in the individual market. Another possible waiver would allow the state to replace a federal essential benefits package with a more narrowly tailored package of benefits, again limited to the individual and small-group markets.

The theory is that removing sicker people from the markets and allowing policies with skimpier options would result in lower overall premiums.

Who would be affected?

If the law passed, a person generally would not be affected unless they lived in a state that sought a waiver. Moreover, they would need to have a lapse in health coverage for longer than 63 days and they would need to have a preexisting condition. Finally, they would have to purchase insurance in the individual market – such as the health exchanges in Obamacare – that currently serves about 18 million Americans.

Someone who got their insurance from an employer – and that’s about half of Americans under 65 (155 million) – presumably would not be affected, though the CBO did project that under the initial version of the AHCA 7 million fewer people would be covered by employers than under current law by 2026.

Then, for a period of one year, a person who fell into this category would face insurance rates that could be based on their individual condition. But states that seek a waiver are required to operate a risk mitigation program or participate in what is called an invisible risk sharing program. Alaska currently has such a program that helps cover the bills for one of 33 conditions (such as HIV/AIDS or metastatic cancer). The individual with the condition still submits bills to the insurance company, which then turns around and bills the state. But then the insurance company does not consider the cost of this care as part of its calculation for premiums to other individuals in the state.

All told, the AHCA would allot $138 billion over 10 years for a variety of funds that would seek to keep premiums lower or to assist with cost-sharing. Just this week, $8 billion over five years was added to the pot to woo wavering lawmakers, with the idea that the additional funds could be used for so-called high-risk pools. Many states had such pools to help people with preexisting conditions before the ACA. But the proposal does not require a state with a waiver to set up such a pool.

What could go wrong then?

There are many uncertainties about this path. The health insurance market has a lot of churn, so many people may experience a gap in coverage of just a few months. One estimate, by the Commonwealth Fund, indicated that 30 million adults would have had such a gap in 2016, potentially exposing them to a surcharge or being placed in a high-risk pool. On top of that, the Kaiser Family Foundation estimated that 27 percent of the people in the individual market have existing conditions that would have been uninsured before the ACA.

The AHCA eliminates cost sharing and offers a stingier tax credit to defray premium costs, likely resulting in higher overall health costs that may make insurance unaffordable for many people. (The CBO projected that 24 million more people would be without health insurance than under current law by 2026.)

Then, if people get sick, they may suddenly find themselves for a year being priced on their illness if they live in a state that sought a waiver. Depending on the approach taken by a state, some people might find it difficult to keep up their coverage for a full year before they qualify for prices at the community rate.

A big question is whether the funding to cover these folks is adequate. High-risk pools were big money losers and underfunded in the pre-Obamacare days, even though many had restrictions, high premiums and waiting lists. A $5 billion federal pool, established by the ACA as a bridge to the creation of the exchanges in 2013, covered about 100,000 people but was suspended when it ran out of money.

The Center for American Progress, a left-leaning group that opposes the AHCA, produced an analysis that indicated that even with the additional $8 billion, the maximum enrollment the AHCA’s funds would cover is about 700,000 people. If just 5 percent of the people currently in the individual market ended up in high-risk pools – and all states sought a waiver – that would overwhelm the proposed funding.

Avalere Health, a consulting firm, said in an analysis that $23 billion is specifically allocated in the bill for helping people with pre-existing conditions. That would cover about 110,000 people. If states allocated all of the other available funding, that would cover 600,00 people. “Approximately 2.2 million enrollees in the individual market today have some form of pre-existing chronic condition,” the analysis said.

When states had high-risk pools, people in those pools represented just 2 percent of the non-group health insurance participants. But given the limitations of those funds, that percentage may not be a good guide for what would happen under the AHCA.

Whenever health-care laws are changed, there are unknown and unintended consequences. The current system does not take into account a person’s health status when assessing premiums. But, as a Brookings Institution analysis suggested, under the AHCA’s provisions, healthy people might have an incentive to join plans based on health status. That would leave sicker people in the community rated plans, which in turn would face higher premiums. Over time, that could make the community rating meaningless. (Update: The CBO in its revised report on the AHCA said this was quite possible for states representing about one-sixth of the U.S. population. We explored that in detail in this article.)

Another possible outcome: If the pool of money is used to pay insurance companies for the difference in costs for patients with preexisting conditions, there may be little incentive for companies to keep their prices low; the difference would be made up by U.S. taxpayers.

The Bottom Line

When it comes to health care, readers should be wary about claims that important changes in health-care coverage are without consequences and that people are “protected” – or that the changes will result in massive dislocation and turmoil. There are always winners and losers in a bill of this size. In this case, if the bill ever became law, much would depend on unknown policy decisions by individual states – and then how those decisions are implemented.

See the original article Here.

Source:

Kessler G. (2017 May 4). Here's what you need to know about preexisting conditions in the GOP health plan [Web blog post]. Retrieved from address https://www.washingtonpost.com/news/fact-checker/wp/2017/05/04/heres-what-you-need-to-know-about-pre-existing-conditions-in-the-gop-health-plan/?utm_term=.bb8de3169f20


HR Pros Were Relieved When Obamacare Replacement Bill Got Pulled

Find out how HR professionals really felt about the fall of the AHCA in this great article from HR Morning by Tim Gould.

Everybody knows that the GOP’s attempt to repeal and replace Obamacare came to a rather ignominious end. But how did the HR community feel about that outcome?  

HR powerhouse Mercer addressed that question in a recent webcast, and the results were eye-opening.

Here are some stats from the webcast, which asked a couple key questions of 509 benefits pros.

On how they felt about the American Health Care Act being pulled:

  • Very relieved it didn’t pass — 24%
  • Relieved it didn’t pass — 32%
  • Very disappointed it didn’t pass — 5%
  • Disappointed it didn’t pass — 16%, and
  • No opinion — 23%.

So (utilizing our super-sharp math skills here) considerably more than half of the participants were not in favor of the AHCA, while just slightly more than one in five were disappointed it was shot down. Looks like Obamacare isn’t as deeply disliked as we’ve been led to believe — at least with benefits pros.

Mercer also asked participants to rate priorities for improving current healthcare law — using 5 as the top rating and 1 as the lowest. Those results:

  • Reduce pharmacy costs — 4.4
  • Improve price transparency for medical services/devices — 4.1
  • Stabilize individual market — 4.0
  • Maintain Medicaid funding — 4.0, and
  • Invest more in population health and health education — 3.7.

Perspective? As Beth Umland wrote on the Mercer blog, “Policymakers should view this health reform ‘reboot’ as an opportunity to partner with American businesses to drive higher quality, lower costs, and better outcomes for all Americans.”

A glance back

In case you’ve been hiding in a cave somewhere for the past several months, here’s a quick recap of the fate of the American Health Care Act.

Why did the AHCA fail, despite Republicans controlling the House, Senate and White House?

The answer starts with the fact that the GOP didn’t have the 60 seats in the Senate to avoid a filibuster by the Democrats. In other words, despite being the majority party, it didn’t have enough votes to pass a broad ACA repeal bill outright.

As a result, Senate Republicans had to use a process known as reconciliation to attempt to reshape the ACA. Reconciliation is a process that allows for the passage of budget bills with 51 votes instead of 60. So the GOP could vote on budgetary pieces of the health law, without giving the Democrats a chance to filibuster.

The problem for Republicans was reconciliation severely limited the extent to which they could reshape the law — and it’s a big reason the why American Health Care Act looked, at least to some, like “Obamacare Lite.”

Ultimately, what caused Trump and Ryan to decide to pull the bill before the House had a chance to vote on it was that so many House Republicans voiced displeasure with the bill and said they wouldn’t vote for it.

Specifically, here are some of what conservatives didn’t like about the American Health Care Act:

  • it largely left a lot of the ACA’s “entitlements” intact — like government aid for purchasing insurance
  • it didn’t do enough to curtail the ACA’s expansion of Medicaid
  • too many of the ACA’s insurance coverage mandates would remain in place
  • the Congressional Budget Office estimated that the bill would result in some 24 million Americans losing insurance within the next decade, and
  • it didn’t do enough to drive down the cost of insurance coverage in general.

See the original article Here.

Source:

Gould T. (2017 April 14). Hr pros were relieved when obamacare replacement bill got pulled Ob[Web blog post]. Retrieved from address http://www.hrmorning.com/hr-pros-were-relieved-when-obamacare-replacement-bill-got-pulled-off-the-table/


GOP Health Care Bill Would Cut About $765 Billion In Taxes Over 10 Years

The passing of the American Health Care Act means there will be a new taxes associated with healthcare. Find out in this article by Scott Horsley and see how this change in legislation will impact you.

The health care bill passed by the House on Thursday is a win for the wealthy, in terms of taxes.

While the Affordable Care Act raised taxes on the rich to subsidize health insurance for the poor, the repeal-and-replace bill passed by House Republicans would redistribute hundreds of billions of dollars in the opposite direction. It would deliver a sizable tax cut to the rich, while reducing government subsidies for Medicaid recipients and those buying coverage on the individual market.

Tax hikes reversed

The Affordable Care Act, also known as Obamacare, is funded in part through higher taxes on the rich, including a 3.8 percent tax on investment income and a 0.9 percent payroll tax. Both of these taxes apply only to people earning more than $200,000 (or couples making more than $250,000). The GOP replacement bill would eliminate these taxes, although the latest version leaves the payroll tax in place through 2023.

The House bill would also repeal the tax penalty for those who fail to buy insurance as well as various taxes on insurance companies, drug companies and medical device makers. The GOP bill also delays the so-called "Cadillac tax" on high-end insurance policies from 2020 to 2025.

All told, the bill would cut taxes by about $765 billion over the next decade.

The lion's share of the tax savings would go to the wealthy and very wealthy. According to the Tax Policy Center, the top 20 percent of earners would receive 64 percent of the savings and the top 1 percent of earners (those making more than $772,000 in 2022) would receive 40 percent of the savings.

Help for the poor reduced

Over time, the GOP bill would limit the federal contribution to Medicaid, while shifting control of the program to states. Depending on what happens to costs, states may be forced to provide skimpier coverage, reduce their Medicaid rolls, or both. The Congressional Budget Office estimated that an earlier version of the bill would leave about 14 million fewer people covered by Medicaid by 2026. (The House voted on the current bill without an updated CBO report.)

CBO also anticipated fewer people would buy insurance through the individual market. With no tax penalty for going without coverage, some people would voluntarily stop buying insurance. Others would find coverage prohibitively expensive, as a result of changing rules governing insurance pricing and subsidies.

The GOP bill would allow insurance companies to charge older customers up to five times more than younger customers — up from a maximum 3-to-1 ratio under the current health law. The maximum subsidy for older customers in the GOP plan, however, is only twice what is offered to the young.

The bill also allows insurance companies to offer more bare-bones policies. As a result, young, healthy people could find more affordable coverage options. But older, sicker people would likely have to pay more.

In addition, because the subsidies offered in the Republican plan don't vary with local insurance prices the way subsidies do in Obamacare, residents of high-cost, rural areas would also suffer. That could include a large number of Trump voters.

See the original article Here.

Source:

Horsley (2017 May 4). GOP health care bill would cut about $765 billion in taxes over 10 years [Web blog post]. Retrieved from address http://www.npr.org/2017/05/04/526923181/gop-health-care-bill-would-cut-about-765-billion-in-taxes-over-10-years