Insurance and Financing Blog

January 27, 2010

This Week in Health Reform–Federal Legislative Overview

House and Senate
Republican Scott Brown’s victory over Massachusetts Attorney General Martha Coakley (D) in the January 19 special election to fill the seat of the late Senator Edward Kennedy (D) is proving to be a game-changer for the health care reform debate.  It is now unclear what Democrats can do to pass President Obama’s most important legislative agenda item.  Even though the Democrats held a majority in the House and Senate this year, they failed to coalesce around a strategy to pass this legislation.  Initially after Brown’s win, there were two options under discussion for moving forward on the current legislation.

Have the House take up the Senate-passed bill and use the “reconciliation” bill process to “fix” several of the provisions the House finds unacceptable (e.g., the “Cadillac” tax, etc.).  If the House passes the Senate bill, it will go directly to the President for his signature, with no further action needed in the Senate.  A “reconciliation” bill, which would need only 51 votes in the Senate, could be passed either in tandem with the Senate bill or follow soon after.
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Scale back the health care reform bill. A scaled-back bill could include health insurance reforms, exchanges, as well as several other provisions and possibly could attract bipartisan support.  While many Democrats are likely to view this approach as a major lost opportunity, leadership may determine this is the most viable approach.

However, Speaker of the House Nancy Pelosi (D-CA) publicly stated on January 21 that the House does not have the 218 votes needed to pass the Senate version of the health care reform bill, which takes option number one (above) off the table.

While numerous private discussions are reportedly being held on the matter, at the outset it seems that Democrats’ only option for keeping the current legislation alive is to reach across the aisle to their Republican counterparts, most notably, moderate Senator Olympia Snow (R-ME).  That would mean a more conservative bill, which could anger rank and file Democrats who are supportive of the legislation.

Although no plans have emerged for how to move forward, it now looks like Democrats will have to modify their plans.  On the night of Scott Brown’s win in Massachusetts, Rep. Anthony Weiner (D-NY) – one of the biggest proponents for a single-payer health care system – said: “The only way to go forward is to take a step back. If there isn’t any recognition that we got the message and we are trying to recalibrate and do things differently, we are not only going to risk looking ignorant but arrogant.  I don’t think it would be the worst thing to take a step back and say we are going to pivot to do a jobs thing,” and include elements of health care reform in it, he said.

Rep. David Camp (R-MI), Ranking Member on the House Ways and Means Committee, declared Democrats’ health care overhaul legislation “dead” and said that instead of full-scale change Congress should take a “first step toward comprehensive reform” of the nation’s health care system.

Issue Overview: Nebraska Medicaid Deal
While key elements of the health care reform legislation remain in flux, the Congressional Budget Office (CBO) released its cost estimate of the expansion of the State of Nebraska’s Medicaid Deal, negotiated by Senator Ben Nelson (D-NE) who then voted for the Senate’s Patient Protection and Affordable Care Act, HR 3590.

The letter responds to a request from Rep. Paul Ryan (R-WI)), Ranking Member, House Committee on the Budget, asking if the cost estimate of the Senate health reform bill would change if all states received the same level of federal assistance for Medicaid as Nebraska receives under the bill.

The CBO stated on January 21 that the net spending for the Senate legislation would increase by billion over ten years if all states received the same level of assistance as Nebraska.

Under the Senate’s provisions, non-elderly individuals with incomes below 133 percent of the federal poverty level would be eligible for Medicaid beginning in 2014.   The federal government would pay the cost of covering newly eligible enrollees through 2016; and federal spending would be about 90 percent by 2019.  The Senate legislation states that it would pay all Medicaid expansion costs to Nebraska beginning in 2014.

The federal health care reform legislation, known as the Patient Protection and Affordable Care Act, signed by the President on March 23, 2010, and the Health Care and Education Reconciliation Act approved by Congress, signed by the President today, will expand the availability of health care coverage to millions of Americans. While some of the measures will be implemented this year, many do not take effect until 2014 and some extend out to 2020.

Below is a high-level overview of the timeline.  It is important to note that many of these reforms and their effective dates are subject to the rules and regulations process both at the state and federal levels – which could alter the intended timing of implementation.

2010

New Programs:
* Temporary retiree reinsurance program is established
* National risk pool is created, small business tax credit is established
* 0 rebate for Medicare members who reach the “doughnut hole”

Insurance Reforms:
* Prohibits lifetime benefit limits – based on dollar amounts
* Allows restricted annual limits on the dollar value of certain benefits
* Coverage rescissions/cancellations are prohibited (except for fraud or intentional misrepresentation)
* Cost-sharing obligations for preventive services are prohibited
* Dependent coverage up to age 26 is mandated
* Internal and external appeal processes must be established
* Pre-existing condition exclusions for dependent children (under 19 years of age) are prohibited
* New health plan disclosure and transparency requirements are created

2011

Insurance Reforms:
* Uniform coverage documents and standard definitions are developed
* Minimum medical loss ratios are mandated

Medicare Reforms:
* Medicare Advantage cost sharing limits effective
* Medicare beneficiaries who reach the doughnut hole will receive a 50% discount on brand name drugs
* A 10% Medicare bonus will be provided to primary care physicians and general surgeons practicing in underserved areas, such as inner cities and rural communities.
* Medicare Advantage plans would begin to have their payments frozen.

Other:
* Employers are required to report the value of health care benefits on employees’ W2 tax statements.
* Annual industry fee for pharmaceutical manufacturers of brand name drugs.
* Voluntary long term care insurance program would be made available to provide cash benefit for assisting disabled individuals to stay in their homes or cover nursing home costs. Benefits would start five years after people begin paying a fee for coverage.
* Funding for community health centers would be increased to provide care for many low income and uninsured people.

2012

* Hospitals, physicians, and payers would be encouraged to band together in “accountable care organizations.”
* Hospitals with high rates of preventable readmissions would face reduced Medicare payments.

2013

* Individuals making 0,000 a year or couples making 0,000 would have a higher Medicare payroll tax of 2.35% on earned income —up from the current 1.45%. A new tax of 3.8% on unearned income, such as dividends and interest, is also added.
* Medical expense contributions to flexible spending accounts (FSAs) limited to ,500 a year—indexed for inflation. In addition, the thresholds for claiming itemized tax deduction for medical expenses rise from 7.5% to 10% of income.
* Medical device manufacturers would have a 2.9% sales tax on medical devices; devices such as eyeglasses, contact lenses, and hearing aids would be exempt.
* Eliminates deduction for expenses allocable to Medicare Part D subsidy for employers who maintain prescription drug plans for their Medicare Part D eligible retirees.

2014

Coverage Mandates & Subsidies:
* Individual and employer coverage responsibilities are effective. 
* Individual affordability tax credits are created and small business tax credits are expanded.

Health Insurance Exchange & Insurance Reforms:
* State individual and small group health insurance exchanges operational.
* Guaranteed issue, guaranteed renewability, modified community rating and minimum benefit standards (“essential benefits” plan) effective. 
* Lifetime and annual dollar limits are prohibited for essential benefits.
* Pre-existing condition exclusions are prohibited.

Taxes & Fees:
* Addition of new taxes on health insurers

Medicaid and Medicare Reform:
* Medicaid expanded to cover low income individuals under age 65 up to 133% of the federal poverty level—about ,300 for a family of four.
* Minimum medical loss ratio of 85% required for Medicare Advantage plans

2018

Taxes & Fees:
* Tax (“Cadillac tax”) imposed on employer sponsored health insurance plans that offer policies with generous levels of coverage.

2020

Medicare Reform:
* Doughnut hole coverage gap in Medicare prescription benefit is fully phased out. Seniors continue to pay the standard 25% of their drug costs until they reach the threshold for Medicare catastrophic coverage.

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The world of individual health insurance is really over the place, a map is not what is necessary, we need a devise more like advance GPS or google maps to assist us out in the individual markets. Or the equal of this at the very least. In a professional expertise the method to maneuver the individual carriers for health insurance is working with liaison sites that have a complete understanding of the companies, choices, quotes, and ways to get a cheaper price. To do this you need to work with pros who actually understand this and reviews it on a daily basis, these gurus known in industry terms as health insurance brokers, will truly be willing to help you in putting into motion decisions and prepare ideas to get you to view how cheap health insurance can be.

Our broker will begin by creating a set amount of information brought together for setting up your premium, this may include age, sex, and zip code at the very least. This will propagate results and rates but that is just the starting gate. As well to this they actually will discuss with you and discover what is your current coverage and what you should consider in a new. They can then start narrowing the quotes and next provide probing questions to assist your agent in seeing what covered expenses may not be as needed, such as certain benefits you will not use. They then will help you to see how you can find cheap health insurance by moving up a deductible or reducing a little less responsibility in the plan. This can achieve affordable rates almost 42% lower then what you may of first looked at. The end stage is a complete overview so that you fully understand our individual plan and can make sense of the policy outlined that you have and know which ones you will not. Question yourself this before you finalize the online health insurance request form, do you really understand your in place coverage or are you fully happy with how its been handling medical bills? A majority people do not understand their individual plans and because of this people use there plans wrong and end up having higher expenses which should not of happened if they understood fully. Let our agents go to work for you and show you how changing benefits and making insurance affordable is a reality.

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Universities usually offer students some type special health insurance benefits that are slightly less expensive and more appropriate for a young, healthy student’s needs than more expensive commercial insurance plans. Many student work while in school and also may be able to get insurance though their employer for a reduced group rate that will cover more for their money. But for the student who does not work or live at home, insurance options can be tough. If the student has no qualifying dependents, they may not be able to qualify for public assisted health benefits. They would have to rely on the school’s health plan or go to a local clinic that pro-rates the cost of care. If you are an international student, you must have complete medical coverage before attending the college of your choice.

The student benefits cover basic health insurance for all students enrolled in 11.5 credit hours per semester automatically. If you have less than 11.5, you will have to purchase the plan for a small fee. Graduate students and teaching assistants get a different type or health insurance package from the school. They have the option of having their health care benefits through an HMO or through a comprehensive type group such as Blue Cross/Blue Shield. With the HMO plan you will pay a monthly fee from your paycheck or a yearly cost that will part of your tuition. That will allow you to receive care at a low fee co-pay option. It also gives you the ability to have extra coverage in case of emergencies or referral to specialists. With the comprehensive plan, you will go to a pre-approved doctor, pay him or her, and then submit your bill or receipt of payment to the insurance company for reimbursement. You will need to take to your particular school to see what benefits are available, who is eligible, and at what cost.

All eligible students are covered by the basic student plan, but many are still either on their parent’s policy, have work related insurance, or are on a spouses plan. The basic plan is additional coverage beyond any other insurance you have. This means that if you have other health insurance coverage you submit medical bills to those companies first for payment. The Student Health Service strongly recommends having additional insurance in the event of a major illness or injury. The basic coverage doesn’t cover emergency or hospital treatments, nor does it allow you to see any doctor off campus in most cases. Students having basic insurance are entitled to receive their health care at the student health centers on campus only. So any other medical need will come out of the students pocket. The coverage of a student health plan begins on the first day of the semester you are enrolled and ends the day the semester closes. During school and semester breaks, with the exception of scheduled school vacations, you will not be covered until the next semester begins. Depending on your individual school, the dates can vary.

The maximum benefit coverage for the basic student health plan is for expenses incurred due to injury as long as treatment was received with in 90 days up to 00 per injury. The maximum benefit coverage for sickness is ,000, provided that treatment is received within 12 months from the date of the first treatment for the sickness. If you need to go to the hospital most basic plans will cover up to 00 for your treatment and stay. Anything accrued above and beyond, including out patient treatments after discharge will be your sole responsibility. The maximum per illness or injury is 00 no matter what type of treatment and how long you need it for. This is why it is very much recommended to have some alternative form of insurance such as short-term if a regular policy is too expensive. Most universities also offer two major medical plans for student who would like more coverage than the basic plan in case of serious illness or injury that exceeds the 00 cap. You can choose between a ,000 or 0,000 maximum benefit for a cost that will be included in your tuition each year. Once you have exceeded the 00 cap you will be responsible for a deductible of some kind, usually 0-0. After that the major health plan will pick up 80% of the medical bills till the cap is met or you are done treatment, which ever happens first.

Health Insurance Info

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We hope you enjoy our range of informative of the Health and Medical Insuranc articles, topics and latest news. Whether you are doing specific research on this subject, or looking for content for your ezine or websites, you have come to the right place.

1. Five Tips to Trim your Medical Expenses and Save

With the rising cost of healthcare, medications, and insurance, it isn’t surprising that people are trying to figure out ways to avoid getting sick and choosing a better lifestyle to lower insurance costs. There is actually quite a bit one can do to help save same cash. It is just a matter of tweaking ones lifestyle choices and preventing health issues from arising or keeping the immune system up so you just don’t get as sick as much. For those people who are seriously sick of high medical premiums and paying out the nose year round for doctor’s visits and medications, this should be a great thing. Small things make a world of difference when it comes to your health.

a) Stop smoking is the biggest one. Not only do you get sicker than the average person, it is worse. Many smokers are treated for several bouts of bronchitis and pneumonia each year. Smoking also makes you susceptible to colds and other infection. You will also pay a higher premium on your insurance and in some cases won’t get covered in full for cigarette related illnesses or diseases. Plus the money you save from quitting can go to bigger and better things than your medical issues.

2. How to Get a Group Health Insurance Rate as an Individual

Most individuals can get really good group rates through their employers. As long as your place of business has more than 50 employees and actually offers a medical plan, you should get a pretty good deal. The overall cost is based on how many of the employees actually have the insurance plan. The more people who are signed up, the cheaper the plan will be. Most people will choose this over going with a private plan any day because it is so much more cost friendly. That is one of the first things you should be looking for when seeking a job, whether or not they offer insurance benefits or not. At your interview ask to see their healthcare providers plan and rates. If they will let you take it home. This way you can see if the plan offers what you want and at a price you can afford. There are some private insurance companies that have reduced individual rates that are comparable to group ones.

3. Five Ways to Cut your Health Insurance Costs

Nearly one-third of all health-insurance premiums increased to 30 percent or more. At that rate, the average cost of health insurance per employee will exceed ,000. Seventy-three percent of senior executives believe health-care costs will continue to increase 20 percent or more each year for the next three years. The message here is clear: If you haven’t already gotten serious about cutting your company’s health-insurance costs, now is the time. It can be done. The first thing you should do is learn how the system works–or doesn’t work. Most small employers spend fewer than four hours a year thinking about their company health plans. Learn what your options are. Your insurance agent can help you shop for cheaper plans. But don’t stop there. Compare plan benefits, insurance-company records, and service guarantees.