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Entries in Affordable Care Act (5)

Tuesday
Jul312012

Health Insurance Rebates: Is Your Check in the Mail?

iStockphoto/ThinkstockNEW YORK) -- A new provision of the Affordable Care Act -- called the Medical Loss Ratio, or the “80/20″ provision -- could mean some Americans will see a rebate from their health insurance companies Wednesday.

The provision is aimed at holding health insurance companies accountable for how they spend the money collected through premiums. It compares the dollars they spend on health care costs vs. other overhead costs -- like marketing, salaries and administrative expenses.

Under the law, small-group and individual-plan insurance companies that annually spend less than 80 percent of premium dollars on medical care owe their customers a rebate. For insurers to large businesses, the percentage split is 85-15.

This is the first year the provision is in effect, and insurance companies that owe rebates must pay them by Wednesday, Aug. 1.

Here’s a look at the health care rebates, by the numbers:

  • Health insurance companies have to pay out a total of $1.1 billion in rebates by Aug. 1.
  • About 12.8 million Americans will receive a rebate, according to the Department of Health and Human Services.
  • The average privately insured family will see a $151 rebate from this provision, but payouts will vary by state.
  • About 31 percent of Americans who have individual insurance are eligible for a rebate. They’ll get their checks directly in the mail, averaging about $127, according to a study by the Kaiser Family Foundation.
  • For people who buy insurance through their employers, those rebates won’t come directly in the mail. They’ll first go to the employer, which decides how to distribute it. Employers who offer insurance can either send out individual checks to their employees, or put those rebates toward lowering future premium costs.

The employer could also use the rebates as a lump-sum reimbursement to the accounts that pay premiums, or spend it in other ways that “benefits its employees,” according to the Department of Health and Human Services.  This can include lowering co-pays or adjusting cost-sharing to cut group insurance costs.

Employees should contact their employer for details about how their rebates will be distributed.

Whether they owe a rebate or not, insurance companies in every state have to notify their customers by Wednesday if they’ve met or failed this part of the law.

For information on how your health insurance company stacks up on the 80/20 provision, click HERE.

Copyright 2012 ABC News Radio

Wednesday
Jul252012

Health Care Ruling Will Affect Cost of Law, Number of Those Covered

iStockphoto/Thinkstock(WASHINGTON) -- Last month's Supreme Court ruling on the Affordable Care Act has both good and bad news for Americans.

According to an analysis by the nonpartisan Congressional Budget Office, about three million people on the lower rung of the income scale won't have access to free medical coverage as originally dictated by the law.

However, the ruling also means that taxpayers won't be on the hook for an additional $84 billion since the high court ruled that states have the option of not taking part in a major expansion of the government Medicaid insurance program for the poor.

In spite of these changes, the CBO says the Affordable Care Act, which presumptive GOP nominee Mitt Romney says he will repeal if he wins the presidency, will remain mostly intact.

Should Obama be reelected, it would likely mean that 30 million people currently without health insurance will get covered by 2022.

Furthermore, the costs of additional coverage will be offset by new taxes and federal spending cuts that would help to lower the federal deficit, the CBO said.

Copyright 2012 ABC News Radio

Friday
Jun292012

White House Sticks to Individual Mandate as ‘Penalty,’ Not Tax

iStockphoto/Thinkstock(WASHINGTON) -- The White House and the Obama campaign Friday insisted that the individual mandate in the president’s health care bill is a “penalty,” not a tax, despite the Supreme Court’s ruling to uphold the law under Congress’ taxing power.

“For those who can afford health insurance but choose to remain uninsured, forcing the rest of us to pay for their care, a penalty is administered as part of the Affordable Care Act,” White House Press Secretary Jay Carney told reporters aboard Air Force One Friday.

“You can call it what you want. If you read the opinion, it is not a broad-based tax,” he said, stressing that the “penalty” would affect one percent of the population, based on CBO estimates. “It’s a penalty because you have a choice. You don’t have a choice to pay your taxes, right?”

The Supreme Court upheld the president’s signature health care law Thursday, saying its mandate that virtually all Americans buy health insurance was legal under Congress’ power to levy taxes.

While the ruling was a huge political victory for the president, that the mandate was deemed constitutional as a tax has provided Republicans with a new line of attack.

“The president of the United States himself promised up and down that this bill was not a tax,” Senate Minority Leader Mitch McConnell, R-Ky., said Thursday. “This was one of the Democrats’ top selling points because they knew it would never have passed if they said it was a tax. Well, the Supreme Court has spoken. This law is a tax. The bill was sold to the American people on a deception.”

During his 2008 campaign, Obama repeatedly promised not to raise taxes on middle-class families and he adamantly denied that the mandate amounted to a tax on the U.S. people.

“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president told ABC News’ George Stephanopoulos in 2009.  “What it’s saying is, is that we’re not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that if you hit my car, that I’m not covering all the costs.”

In addition to the White House, the Obama campaign is also pushing the mandate as a “penalty” and not a tax.

“Whether you call it a mandate or tax, what it is is a penalty on the very few Americans who don’t -- who can afford health care, don’t pay for it, end up in our emergency rooms getting free care and then we all pay for it in the form of premiums,” Obama campaign strategist David Axelrod said Friday morning on NBC’s Today Show.

Massachusetts Gov. Deval Patrick, a top Obama surrogate, later rebutted the “bizarre attack” that the bill represents a tax increase on the middle class and urged reporters on a conference call not to believe “the hype the other side is selling.”

Finding itself playing defense the morning after a huge political win, the Obama camp has embraced the ruling as an opportunity to hit rival Mitt Romney for championing a similar law as governor of Massachusetts.

“The penalty within the Affordable Care Act … is modeled exactly on the penalty that exists in the health care reform that was promoted and signed into law by Governor Romney in Massachusetts,” Carney said Friday.

Furthermore, Romney has admitted that, not only does he “like mandates,” but that the health law he ushered in as governor constituted a tax.

“You imposed tax penalties in Massachusetts?” ABC’s Charlie Gibson asked Romney in January 2008.

“Yes,” Romney replied. “We said, look, if people can afford to buy it, either buy the insurance or pay your own way; don’t be free-riders.”

Copyright 2012 ABC News Radio

Thursday
Jun282012

Health Care Law Mandate ‘Tax’: How Much Is It?

Creatas/Thinkstock(WASHINGTON) -- Beginning in 2014, if you are uninsured, not exempt from the new mandate, and refuse to sign up for health care coverage, how much will you owe Uncle Sam?

The health care law sets out a formula to determine your penalty, which will be assessed and collected by the IRS as part of your federal income taxes.

The penalty will be the greater of a flat dollar amount per person or a percentage of your taxable income.  For dependents under 18, the penalty is half the individual amount.

The annual penalty is capped at an amount roughly equal to the cost of the national average premium for a qualified health plan — in other words you cannot be forced to pay more than it would have cost to buy a plan in the first place.

Flat dollar amount for individuals:  $95 in 2014; $325 in 2015; and $695 in 2016; increases indexed to inflation after that, subject to a cap.

For example, courtesy Blue Cross Blue Shield:  An uninsured family of three (two parents and one child under 18), not exempt from the mandate, would have a flat dollar penalty of $1,737 in 2016.

Percentage of individual taxable income:  fixed percentage of household income in excess of tax filing threshold – 1% in 2014; 2% in 2015; 2.5% in 2016.

For example (again courtesy Blue Cross Blue Shield):  An uninsured, non-exempt individual with household income of $50,000 would be forced to pay 1 percent of the difference between $50,000 and the tax threshold (let’s say $10,00 for an individual in 2014), or roughly $400. Since $400 is greater than $95, this individual would have to pay $400.

There are plenty of exemptions from the penalty. You do not face it if your insurance premiums would be more than 8 percent of your gross income, if you’re a member of an American Indian tribe, or if you lacked insurance for less than three months during a year.

The non-partisan Congressional Budget Office projects that 4 million uninsured, non-exempt Americans will refuse to get medical coverage and face the penalty in 2016.

Copyright 2012 ABC News Radio

Thursday
Jun282012

Health Care Ruling: Business Winners, Losers

Creatas Images/Thinkstock(NEW YORK) -- For American businesses in general, and the health care industry in particular, the Supreme Court decision to uphold President Obama's overhaul law removes a great deal of uncertainty.

After months of legal challenges, the ruling gives hospitals, insurance companies, biotech firms and drug makers a clearer picture of what will happen when the major provisions of the law are expected to go into effect in 2014.

The legislation is a boon for much of the health care industry by making coverage affordable for tens of millions of uninsured Americans. But not every company will benefit. Medical equipment makers, for example, will be hit with a new tax on their sales.

There will be new fees as well as cuts in some forms of government reimbursement to health providers.

Beyond the health care industry, how will the Supreme Court ruling affect small- and medium-sized businesses?

"I would say there is actually a positive impact in that people know what to expect," said Brian Hamilton, CEO of the financial information firm Sageworks. "It's very important to remember the psychology of people who run privately held companies. If they have time to plan, the legislation is less important than the time horizon."

Hamilton said if the Supreme Court decision had led to confusion over the future of health care reform that would have been much more damaging to many firms than the cost of paying for a change that's been in the works for years.

"For the companies that have more than 50 employees who do not currently have coverage there will be an additional charge. It will be expensive, but they've been anticipating it."

On the markets today, stocks of major insurance companies dropped as analysts sorted through the ruling. UnitedHealth Group declined 3 percent, while WellPoint lost almost 6 percent. Overall, stocks were down today with the Dow Jones industrial average falling 127 points.

As far as hospital chains go, Hospital Corp. of America was up 7 percent. Quest Diagnostics, which runs laboratories, was up 2.5 percent.

The health care law will bring an influx of new patients, which will mitigate other negative trends for the hospital industry, such as a shift to quality of care measures, regulatory scrutiny over premium increases and government incentives to curb overall health care spending growth.

From a consumer standpoint, Thursday's decision is the biggest change in healthcare coverage of our lifetime, said Michael Thompson, principal in PwC's Human Resource Services Group.

The biggest benefits of the health care reform will go to lower-income families who do not have employer-sponsored health plans.

"People generally not covered by employers will be in a position of better access to coverage going forward," Thompson said.

Thompson said there will be a "tremendous" increase in the number of people covered and subsidized by the federal government.

The law establishes health insurances exchanges at the state level, but one of their roles is to administer subsidies offered by the federal government to households whose income is up to 400 percent of the poverty level, essentially the middle class.

Thompson said health care costs in many states will increase with the new rule requiring managed care providers to insure people with pre-existing conditions. But people eligible for subsidies will see costs decrease as premiums will be based on a percentage of their income, Thompson said.

Alex Morozov, Morningstar's director of health care research, said it will be "tough to speculate" how health care costs will change for consumers.

"States are going to exercise significant pressure on managed care companies regarding premium increases," he said.

Copyright 2012 ABC News Radio







ABC News Radio