Archive for 2013

Oklahoma health insurance consumers will still receive benefits and protections of the Affordable Care Act

by | April 16th, 2013 | Posted in Blog, Healthcare | Comments (5)

bigstockphoto_health_care_reform_green_road__5632944Barriers still remain in achieving the real goal of the Affordable Care Act (ACA), to get uninsured Americans affordable healthcare coverage. The Supreme Court created one of these barriers when it ruled that the federal government could not force states to expand Medicaid coverage to all individuals with incomes less than 138 percent of the Federal Poverty Level (FPL). As a result, 14 states, including Oklahoma, have decided or are leaning towards not expanding Medicaid.

The latest barrier is the unwillingness of some states to enforce the consumer protection provisions of the ACA. In states unwilling or unable to enforce these provisions, the Centers for Medicare and Medicaid (CMS) has empowered the Center for Consumer Information and Insurance Oversight (CCIIO) to directly enforce the provisions.

These provisions, which take effect January 1, 2014, reform current health insurance market practices. They are designed to protect health insurance consumers by guaranteeing accessible, affordable, and adequate health insurance plans:

  • AccessibilityThe consumer protection provisions of the ACA will make health insurance more accessible by requiring that insurers guarantee healthcare coverage to all who apply and prohibiting waiting periods of longer than 90 days.
  • AffordabilityTo ensure affordability of health insurance plans, insurers can only vary rates based on four factors: family composition, geographic area, age and tobacco use. The ACA further limits the variation for age and tobacco use. An insurance company cannot charge an adult more than 3 times the rate of a younger person, and can only charge a tobacco user 1.5 times more than a non-tobacco user.  Consumer out-of-pocket cost will also be limited under the ACA and insurers will be required to cover at least 60 percent of the plan’s total cost.
  • Adequacy As a result of the market reforms, insurance companies will no longer be able to exclude preexisting conditions from coverage. The law also outlines ten categories of essential health benefits that must be covered by insurance plans being offered through the insurance marketplace.

Health insurance regulation is primarily a state action. In partnership with the federal government, states are expected to enforce the consumer protections provisions of the ACA. States will be responsible for enforcing the provisions for insurance plans offered inside and outside of the health insurance marketplaces. However, CMS will step in and enforce the law if states notify the agency of their lack of authority or unwillingness to enforce the law, or if CMS finds that a state is not substantially enforcing the provisions.

A report by the Commonwealth Fund found that only 11 states so far have taken legislative action to enforce the ACA insurance market reforms. To be fair, some states already have the necessary legislation in place to enforce these provisions, so no more action is required on their part. However, four states, including Oklahoma, have notified federal officials that they will not be taking action to enforce the consumer protection provisions.

In a press release, Commissioner John Doak explained that the Oklahoma Insurance Department would not be participating in a collaborative effort with CCIIO to enforce the ACA. He also released a letter sent to the CCIIO director explaining his department’s lack of authority to enforce the ACA and his disapproval of subjecting health insurers to a “system of dual regulation.” In the letter, Commissioner Doak expressed his concern regarding the impact these dual regulations would have on Oklahoma consumers. 

This system of dual regulation is actually nothing more than requiring insurers to take an extra administrative step to ensure compliance with the ACA. Since Commissioner Doak refuses to enforce the ACA, Oklahoma health insurers will now have to submit policy information and other health insurance plan documentation directly to the federal government. CCIIO will confirm that insurers comply with ACA market reforms and will work with those found to be non-compliant.

For health insurance consumers in Oklahoma, there should be little concern with the federal government regulating health insurance plans. Even some on the right, in our state, have expressed a welcoming attitude in having the federal government enforce the ACA market reforms. Within Wyoming, another state where the federal government will be enforcing the ACA, the outlook for federal enforcement of the ACA is relatively positive.

The Oklahoma legislature could authorize Commissioner Doak to enforce the ACA in the future, but until that time the federal government will ensure that Oklahoma health insurance consumers are receiving the benefits and protections provided by the ACA.

 Click here for our other resources and analysis on Medicaid and the Affordable Care Act

Employers better off keeping workers’ coverage under new health law

by | August 23rd, 2012 | Posted in Blog, Healthcare | Comments (5)

This post originally ran on our blog in November 2011 and is part of an ongoing series of posts examining the Affordable Care Act. For links to previous posts and additional resources, please visit the health care reform page on our website. 

Employer-based health insurance coverage is the single largest pillar of the American health insurance system. Unemployment and rising costs continue to erode employer-based coverage, but more than half of all Americans – 169 million -  are still insured through employers.  The federal tax code has long encouraged employers to provide coverage by making employer health care expenditures tax-deductible.

The new federal health care law, the Affordable Care Act (ACA), aims to expand health insurance coverage in the United States in part by strengthening employer-based coverage. The law provides sizable tax credits to small businesses (≤25 employees) that offer insurance. Beginning in 2014, large employers (≥50 employees) will have new responsibilities to provide coverage.  Known as the ‘play or pay’ provision, the law outlines that:

  • If a large employer does not offer coverage and any of its employees receives a premium subsidy through a health insurance exchange, it will be subject to a fee of $2,000 per full-time employee (in excess of 30 employees);
  • Large employers that offer only unaffordable coverage to workers will also be subject to a fee if employees receive subsidized coverage through an exchange;
  • Large employers must automatically enroll employees into their lowest-cost plan if the employee does not sign-up for or opt-out of the employer’s coverage.

Critics of this provision claim that employers will drop employee coverage and simply pay the penalty instead. The Congressional Budget Office, the nonpartisan financial scorekeeper for the federal government, has determined such assertions to be inaccurate.  Opponents of the law disregard the CBO findings, instead frequently citing a survey of employers by McKinsey and Company, which reported that 30 percent of employers said they would definitely or probably stop offering coverage after 2014.  The McKinsey survey  is considered deeply flawed by health policy experts.  However, it formed the basis for a U.S. House Committee report claiming the ACA will lead to a large erosion of employer-sponsored coverage and for testimony before Oklahoma’s Task Force on the Federal Health Law asserting that “most employers WILL drop coverage.”

Yet, actuarial analysis released recently by a large Oklahoma employer contradicts the McKinsey survey’s findings.  Mike Rogers, Health Care Committee Chair of the Oklahoma State Chamber of Commerce, addressed a state legislative task force concerning the likelihood that his company BancFirst (1,425 employees) would maintain or drop employee coverage in 2014.  They concluded it would be significantly more expensive to their company to drop coverage:

BancFirst found that maintaining employee coverage would cost them an additional $410K. This reflects the costs of more employees signing up for coverage (+70 employees) and penalty costs ($3,000 per employee) for 54 employees for whom the company’s insurance would be unaffordable and who would instead receive premium subsidies through the exchange.  Conversely, dropping coverage would cost BancFirst an additional $1.2M.  These increased costs reflect: 1) losing the 35 percent corporate tax deduction and 7.65 percent FICA tax deduction they currently receive for employee health insurance expenses, and 2) paying the $2,000 per employee penalty for their entire payroll (exempting the first 30 employees).  According to their own analysis, it will cost BancFirst an additional $771K to drop employee coverage when the new ACA provision goes into effect in 2014 versus continuing coverage.

This analysis offers strong empirical evidence to support the claim that employers will play, not pay, in 2014.  As companies crunch the numbers and consider the full range of costs and savings, especially tax deductions for employer health care expense and penalties for not offering coverage, they will likely reach the same conclusion as BancFirst’s actuaries: providing coverage will be best for business’ bottom line.

Kaiser Health News: Health industries weigh in on Supreme Court case

by | March 26th, 2012 | Posted in Blog, Healthcare | Comments (2)

This story was written by Jay Hancock, a staff writer for Kaiser Health News, a publication of the Kaiser Family Foundation and was originally published on March 22nd, 2012.  For a break down of the issues being debated before the Supreme Court on the Affordable Care Act, see our blog post here.

Before the raucous legislative battle to pass the health law in 2010, there was a quieter but significant process that brought health industry players to the negotiating table. Insurers, hospitals and drug makers all cut deals to help shape what would become the Affordable Care Act.

America's Health Insurance Plans President and CEO Karen Ignagni (Photo by Chip Somodevilla/Getty Images)

Now, as the Supreme Court awaits arguments in one of the most closely watched cases in years, the deals are threatened along with the law. And the industry groups are deploying different strategies as they seek to defend their interests before the High Court.

Insurers have chosen not to defend the massive dividend for their industry that many believe makes the law most vulnerable. The “individual mandate” requires almost everybody to buy health insurance or pay a fine – a major concession the lobby got at the bargaining table. But insurers are not taking a stand on whether the mandate is an unconstitutional abuse of federal power, as the law’s opponents contend.

“I don’t think the public or the courts recognize our industry for its constitutional expertise,” said Karen Ignagni, chief executive of America’s Health Insurance Plans, an industry lobby.

Insurers do express strong views on what the court should do if the mandate is tossed out. Their memo to the justices joins more than 130 other briefs, the largest number of “friend of the court” briefs ever filed for a Supreme Court case.

continue reading Kaiser Health News: Health industries weigh in on Supreme Court case

Stuck at the Drawing Board: Legislature tries again on federal health law

by | March 6th, 2012 | Posted in Blog, Healthcare | Comments (2)

Following a year of open defiance and several months of interim study, the Oklahoma Legislature now appears poised to take action on a major requirement of the new federal health care law, the Affordable Care Act.  States are required by the law to have web-based health insurance marketplaces, known as exchanges, up and running by 2014.  If Oklahoma does not act to establish an exchange during this legislative session, the federal government will take over the process and establish and maintain an exchange on the state’s behalf.

Last week, legislation to establish an exchange authored by Senate President Pro Tem Brian Bingman was introduced and passed in the Senate Health and Human Services Committee.  SB 1629 creates the ‘Health Insurance Private Marketplace Network Trust’ and broadly outlines the rudimentary functions of a new ‘marketplace network’ – or, insurance exchange.  If this bill is intended to establish an exchange that will satisfy the requirements of the health law and preempt federal intervention, it seems they’ve missed the mark.

Exchanges are meant to serve as a one-stop shop for health insurance.  State-based exchanges should feature a web portal that enables simple and standardized plan comparisons, navigators to provide expert consumer assistance, and a 24-hour hotline.  Residents should be able to purchase insurance and apply their premium tax credits to the cost of a health plan with just a few clicks of the mouse.  If a household is eligible for Medicaid, the exchange should reroute them to apply for the program.  The ‘marketplace’ outlined in SB 1629 shirks almost all of these essential exchange functions.

continue reading Stuck at the Drawing Board: Legislature tries again on federal health law

Employers better off keeping workers' coverage under new health law, Oklahoma study shows

by | November 30th, 2011 | Posted in Blog, Healthcare | Comments (1)

This is part of an ongoing series of posts examining the Affordable Care Act, including previous posts on health insurance exchangesrate review and temporary high risk pools. For links to previous posts and additional resources, please visit the health care reform page on our website. 

Employer-based health insurance coverage is the single largest pillar of the American health insurance system. Unemployment and rising costs continue to erode employer-based coverage, but more than half of all Americans – 169 million -  are still insured through employers.  The federal tax code has long encouraged employers to provide coverage by making employer health care expenditures tax-deductible.

The new federal health care law, the Affordable Care Act (ACA), aims to expand health insurance coverage in the United States in part by strengthening employer-based coverage. The law provides sizable tax credits to small businesses (≤25 employees) that offer insurance. Beginning in 2014, large employers (≥50 employees) will have new responsibilities to provide coverage.  Known as the ‘play or pay’ provision, the law outlines that:

Clock ticks down on a state-run health insurance exchange

by | November 1st, 2011 | Posted in Blog, Healthcare | Comments (8)

The Joint Committee on the Federal Health Care Law has hosted regular meetings this fall to take stock of Oklahoma’s options and responsibilities as new provisions of the Affordable Care Act (ACA) take effect.  The first meeting explored the impact of health reform on public programs; the second heard testimony about the new law from private business and industry representatives.  The third meeting, held last week in Oklahoma City, got down to brass tacks by beginning to address a major policy piece for states:  planning and implementing health insurance exchanges. OK Policy staff was invited to offer our assessment and we concluded that the window for Oklahoma to operate its own exchange – versus having the federal government do so – may have already closed.

continue reading Clock ticks down on a state-run health insurance exchange

State cost of health care reform likely to be modest and could yield net savings

by | October 26th, 2011 | Posted in Blog, Healthcare | Comments (2)

Under the new national health care law, the Patient Protection and Affordable Care Act (ACA), one major strategy for providing health insurance coverage to the 50 million Americans who are currently uninsured is an expansion of eligibility in the Medicaid program. Even though the federal government will assume the lion’s share of the costs of insurance for those who gain Medicaid coverage, this expansion has created concern and uncertainty about the impact the law will have on state budgets.

We do not yet have a comprehensive study of the projected costs and savings of the Affordable Care Act for Oklahoma’s state budget. However, as a new OK Policy issue brief shows, most studies of the impact of the Affordable Care Act have concluded that increases to state Medicaid budgets will be modest. National studies from the Urban Institute and projections developed by the Oklahoma Health Care Authority have estimated that state spending on Medicaid may grow by $200 to $800 million between 2014 and 2019 or 2020, depending on various assumptions, while increasing state Medicaid spending by under 10 percent.  The federal government will assume over 90 percent of total costs of expanded Medicaid coverage. To cite the conclusion of the study by John Holahan and Irene Headen, the Urban Institute’s experienced and widely-respected health policy analysts:

continue reading State cost of health care reform likely to be modest and could yield net savings

Guest Blog: In Pursuit of Happiness? Health Care in the 21st-Century U.S.

by | September 15th, 2011 | Posted in Blog, Healthcare | Comments (1)

This article is co-authored by Dr. Kristen Marie Burkholder, Dr. James Cane-Carrasco, Dr. Douglas Catterall, Elizabeth Powers, Rev. Scott Scrivner, and Dr. Tony Wohlers. For the authors’ longer study of the American health care system, click here.

On March 23rd, 2010 President Obama signed into law a sweeping reform of the U.S. health care system.  Since that time some have taken action to repeal these reforms, others have indicated support for extending them.  Much of the talk opposing or supporting reform has been remarkably free of the perspective of those who would benefit most from it: the uninsured, the underinsured, and those who may soon enter their ranks. We are writing to address an injustice that the citizens of the United States, the country of our birth or adoption, are inflicting upon themselves.

Let’s first show the health care system working at its best.  Recently, a colleague of ours became ill and physicians suspected the worst: a brain tumor that might be near or actually embedded in her speech center.  Our colleague received incredible support from family and friends and our employer offers first-rate health insurance, giving her a choice of clinics, hospitals, and specialists.  She chose MD Anderson in Houston whose physicians and staff provided her with the excellent care. Happily, the neurosurgeon who operated on her found no tumor and she has returned to work.  However, this best-case scenario could have turned out differently. Our current health insurance provider, Blue Cross/Blue, Shield., covered the roughly $58,000 cost of our colleague’s treatment. But, with our previous health provider, MD Anderson would have been an out-of-network, leaving our colleague with more of the costs.

continue reading Guest Blog: In Pursuit of Happiness? Health Care in the 21st-Century U.S.

Health Care Reform (10): Feds promise flexibility on state health insurance exchanges, but not complaisance

by | August 16th, 2011 | Posted in Blog, Healthcare | Comments (6)

This is the tenth in an ongoing series of posts examining the Affordable Care Act, including previous posts on rate review and temporary high risk pools. For links to all previous posts and additional resources, please visit the health care reform page on our website.  If you have thoughts on health care reform, we encourage you to comment below or contribute a guest blog.

Earlier this year, we blogged about health insurance exchanges, a major provision of the federal health care reform law, the Affordable Care Act (ACA).  In a nutshell, states have been tasked with setting-up online insurance marketplaces, or “exchanges,” for selling private coverage and determining eligibility for premium subsidies or public health insurance programs.  The online exchanges envisioned by the Affordable Care Act institute robust consumer protections, simplify plan and premium comparisons, and facilitate competition.  The deadline for states to gain approval for their exchange plans from the federal government is January 2013, and the deadline for having their online insurance marketplace up and running is January 2014.

continue reading Health Care Reform (10): Feds promise flexibility on state health insurance exchanges, but not complaisance

Keeping score: Most federal courts are upholding health care law

by | July 6th, 2011 | Posted in Blog, Healthcare | Comments (3)

Legal challenges to national health care reform have proliferated since the Affordable Care Act (ACA) became law in March 2010.  There have been 26 federal lawsuits filed seeking to overturn the legislation, most of them challenging the constitutionality of the ‘individual mandate’ – the requirement that all Americans carry health insurance by 2014 or pay a tax penalty.  Proponents of the ‘individual mandate’ contend that the health care sector takes up a rapidly growing share of interstate commercial activity and the Constitution grants Congress the power to regulate that commerce.  Opponents argue that the Constitution’s commerce clause applies only to economic activity; because the decision not to buy insurance is economic inactivity, there is no constitutional basis for Congressional regulation.

Twenty-six states have banded together and jointly filed Florida vs HHS. This is the most watched of all the legal challenges to the new health care law because of its size and the likelihood that it will be granted an expedited hearing before the U.S. Supreme Court. Oklahoma and Virginia have each filed separate legal challenges. In addition to the states, lawsuits have been filed by plaintiffs from all walks of life, including individual citizens and small groups, businesses and business-owners, physicians, associations, hospitals, universities, and lawyers.

With so many different cases working their way through our complicated judicial system, it’s easy to lose track of the big picture.  This post breaks it down, beginning with the Federal District Courts, the first stop for any case on its way to a Supreme Court hearing.  This chart shows the outcome of district court challenges to date:

continue reading Keeping score: Most federal courts are upholding health care law

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