Healthcare Reform………………what now that it has passed?
The Patient Protection and Affordable Care Act (I'll call it PPACA hereafter) passed into law in March. Some initiatives have already passed into effect. Many others won't until 2014. Now that PPACA has been in effect for a couple of months, where are the burning issues now and what is coming?
IRS releases guidelines for small employer tax credit. (This information is intended as a summary only and does not constitute any legal or tax advice. Please consult your legal or tax professional for further questions regarding this legislation. )
The Internal Revenue Service (IRS) issued guidance this week to clarify which small businesses are eligible for a new tax credit to cover the cost of health insurance for their workers.
The Obama administration estimates that as many as 4 million businesses will be able to receive the credit, which is available to companies with fewer than 25 employees and average annual wages of less than $50,000. Businesses with 10 or fewer workers and average annual wages of less than $25,000 can get the maximum credit of 35 percent of premiums. Small businesses can claim the credit when they file their 2010 income tax returns in 2011.
The IRS also said the value of the credit would not be reduced by state health care tax credits, and the credit can be applied to vision and dental benefits, not just medical coverage.
Still, some business organizations argue the credit does not go far enough. "We still think this credit isn't great," James Gelfand, director of health policy for the U.S. Chamber of Commerce, told Bloomberg Businessweek. "It's too small, and most firms won't be eligible for it."
More about the small business tax credit is available from the IRS at the link below:
http://www.irs.gov/newsroom/article/0,,id=223577,00.html
The full IRS guidance is available at the link below.
http://www.irs.gov/pub/irs-drop/n-10-44.pdf
Dependent coverage regulations issued
Last week, the Department of Health and Human Services (HHS) issued regulations governing how dependents can remain on their parents' health plans until age 26. (Florida passed a similar law that took effect Oct. 2008 that allowed children to remain on their parents plans until the 25th birthday, or until the 30th birthday if a full time student. Therefore, this provision won't have much affect on Floridians.)
According to HHS, about 30 percent of young adults are uninsured, the highest uninsured rate of any age group. At the same time, young adults have the least access to coverage through their employer. The announcement of the interim final rule comes just as the college graduation season gets under way.
"This change is long overdue," said HHS Secretary Kathleen Sebelius. "For years, getting a diploma also meant losing your health insurance. And whether you went on to college or not, it was often hard as a young person to find affordable coverage. Overall, Americans in their twenties were twice as likely to go without health insurance as older Americans."
Although the dependent coverage provision is not scheduled to take effect until September, Humana and many other insurers agreed to offer the extended coverage sooner for fully insured medical plans.
Read more about dependent coverage at the link below:
http://www.hhs.gov/ociio/regulations/adult_child_fact_sheet.html
The lingering debate
The 2010 congressional mid-term election is less than six months away, and despite other top-of-mind issues like jobs and the economy, the debate over health care reform refuses to go away. Both Democrats and Republicans are working hard to shape public perception of the new law, understanding that for nearly two years, health care reform dominated the airwaves and largely consumed Congress.
While far from the only issue, health care will almost certainly be in the back of voters' minds as they head to the polls on November 2, and their opinion will be colored by how the new law touches their lives over the next few months. Against that backdrop, President Barack Obama devoted his weekly radio and Internet address to health care reform on May 9, saying the new law is "already delivering real benefits to millions of Americans."
"Ultimately, we'll have a system that provides more control for consumers, more accountability for insurance companies, and more affordable choices for uninsured Americans," said the President. He also highlighted several of the law's early provisions, including small business tax credits, no more rescissions, an extension of dependent coverage to age 26, and starting June 15, $250 rebate checks for people who fall into Medicare's Part D "doughnut hole." Republicans, of course, see it differently.
On AOL News, Senate Minority Leader Mitch McConnell, R-Ky., wrote, "some of the nation's biggest employers -- such as AT&T, Verizon, Caterpillar and Deere -- have been seriously considering cutting employee health care and paying the lower-cost penalties instead. This not only undercuts the claim Democrats made that employers wouldn't drop employees, it undercuts one of the president's most oft-repeated vows -- namely, that 'if you like the plan you have, you can keep it.' ... Every day another argument in favor of the health care reform plan crumbles, the argument for repealing it and replacing it becomes stronger."
Health insurers have remained fodder for the ongoing war of words, even though many agreed to begin several reforms ahead of schedule, moving up the timetable on both dependent coverage and the rescission ban. "For too long, we have been held hostage to an insurance industry that jacks up premiums and drops coverage as they please," said the President in his weekend address. He singled out WellPoint subsidiary Anthem Blue Cross, which recently withdrew its filing for a 39-percent rate increase on individual health plans in California.
And, the President criticized "an insurance company" for "systematically dropping the coverage of women diagnosed with breast cancer." In a letter addressed directly to President Obama, WellPoint CEO Angela Braly wrote, "despite your claims, WellPoint does not single out women with breast cancer for rescission. Period." Braly added, "Mr. President, this country has a long history of coming together after tough debates. The implementation of the new health care reform law should be no different.
If we are going to make this law work on behalf of all Americans the attacks on the health insurance industry - an industry that provides valued coverage for more than 200 million Americans - must end."
For its part, the public remains opposed to the health care reform law. An average of recent polls on the topic shows 51.5 percent opposed, versus 40.9 percent in favor.
http://www.realclearpolitics.com/epolls/other/obama_and_democrats_health_care_plan-1130.html
\At the same time, a Rasmussen Reports survey (see link below) found that 55 percent of likely voters rate the current health care system as good or excellent, up from 44 percent in February and 35 percent when the President released his first health reform proposal last May.
Three out of four adults with health insurance (75 percent) rate their coverage as good or excellent, with just 7 percent rating their coverage poor.
A different poll from Opinion Research Corporation and eHealth, shows Americans may have unrealistic expectations of health care reform. Nearly one-third (31 percent) believe all of the major health care reform provisions will be in place by 2012, when in reality, the most significant reforms (like guarantee issue, mandated coverage, and exchanges) will not materialize until 2014.
Open to interpretation
Uncertainty surrounding several key health care reform provisions is putting the spotlight on the regulatory process. Provisions involving minimum loss ratios and grandfathered plans have become the subject of much debate, but clarity may not come until the federal government issues specific regulations. Under the health reform law, individuals and employers have the right to keep the coverage they had as of March 23, 2010.
Such plans are considered "grandfathered" and are exempt from many reforms. For example, grandfathered plans won't have to include a mandatory package of "essential benefits." Other plans will. The question is: How will federal regulators define "grandfathered?" Would an employer jeopardize its plan's grandfathered status by changing deductibles, copay levels or other plan features? Consumer groups favor a stricter definition to ensure health plan members get the benefit of the law's protections.
"This is one of the most critical issues going forward in the regulation writing," Erin Reidy, senior policy analyst at the American Cancer Society, told Kaiser Health News. "We are very concerned." But, many business organizations, such as the U.S. Chamber of Commerce, prefer a looser interpretation that would allow employers to make changes without losing their grandfathered status and potentially seeing premiums rise.
A similar debate is playing out over a provision that requires insurers to spend a certain percentage of premiums on medical care starting in 2011. That percentage is known as the medical loss ratio, or MLR. In the small-group and individual markets, the health care reform law says insurers must maintain an 80-percent MLR. In the large group market, the MLR requirement is 85 percent.
The idea is to ensure that most health care dollars go towards medical care, not administrative expenses. But, what counts as medical care? Regulators have to determine whether to include money spent on programs like care coordination or nurse hotlines, for example. Sen. John D. (Jay) Rockefeller, D-W.Va. and Chair of the Senate Committee on Commerce, Science and Transportation, recently wrote to Health and Human Services (HHS) Secretary Kathleen Sebelius, expressing concern that "the health insurance industry is mounting an all-out effort to weaken this important consumer protection."
A work group from the National Association of Insurance Commissioners (NAIC) is helping HHS develop MLR regulations.
Lawsuits challenge mandate; Obama administration responds
Legal attacks continue to mount on one of the health care reform law's highest profile provisions - the requirement that all Americans carry health insurance or pay a penalty.
The requirement isn't scheduled to take effect until 2014, but on Friday, seven states (Alaska, Arizona, Georgia, Indiana, Mississippi, Nevada and North Dakota) officially joined 13 others in a lawsuit filed in U.S. District Court in Florida. Together, the 20 states are challenging the constitutionality of the individual mandate, arguing the federal government does not have the authority to force people to buy a product - in this case, health insurance.
One of the nation's largest small business groups, the National Federation of Independent Business (NFIB), has also joined the lawsuit. Since the enactment of health care reform, numerous states have filed similar legal actions, but according to the New York Times, the Florida lawsuit "could carry the most weight, and may be on the fastest track in the most advantageous venue." The Obama administration defends the mandate as valid, saying Congress has the power to regulate interstate commerce.
Last week, Justice Department attorneys provided the government's first official response on the matter - in reference to a lawsuit filed in federal court in Detroit on March 23, the same day the President signed the health care reform law. The conservative Thomas More Law Center brought the suit, alleging the mandate amounts to an unconstitutional tax. Meantime, Missouri is the first state to call for a public vote on the health insurance mandate.
The state's House of Representatives last week approved a ballot measure that says individuals and businesses cannot be compelled to have health insurance. The vote is scheduled for Aug. 3, during the state's primary election.
States decide on high-risk pool
Nineteen states will leave it up to the Department of Health and Human Services (HHS) to administer high-risk pools, while 29 others will run the pools themselves.
Florida was one of those electing to have HHS administer their high-risk pool. Note: Arizona has indicated it will not run a high-risk pool. The health care reform law sets aside $5 billion for temporary high-risk pools, designed to cover people with pre-existing conditions until new health insurance exchanges are open in 2014. States had until the end of April to notify HHS of their decision. In leaving the job to HHS, many states cited fears that federal funding would dry up, leaving states on the hook.
"Best minds" needed to solve health care costs In a recent Washington Post op-ed, two physicians and researchers from Dartmouth argue that, despite the new health care reform law, more needs to be done to "(improve) quality while bending the unsustainable (health care) cost curve significantly." Jim Yong Kim, president of Dartmouth College, and James Weinstein, president of the Dartmouth-Hitchcock Clinic, propose "rapid expansion of a new field ... health-care delivery science."
"No single group or entity created the puzzle that is our health-care system; it is not reasonable to expect one group to solve it. What will lead to improvements is a multidisciplinary approach that brings the best minds to focus on the problem." You can see that the dust certainly has not settled on this highly contested topic. Therefore, there will be more updates at this site.
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