Consumer Driven Plans Continue to Grow

Ten percent of the population was enrolled in a consumer driven health plan (CDHP) in 2012, up from 7% in 2011. Enrollment in HDHPs remained at 16%, according to a study by the Employee Benefits Research Institute (EBRI). Fifteen percent of 21- to 64-year olds with private insurance were in a CDHP or an HDHP that was eligible for an HSA. When their children were counted, about 25 million people with private insurance,were in a CDHP or an HSA-eligible plan — representing about 14.6% of the market.

CDHP enrollees were more likely to evaluate provider cost information compared to traditional plan enrollees. They were also more likely to look outside their health plan for information about their doctors’ costs and quality. CDHP enrollees were also more likely to participate in wellness programs, such as health-risk assessments, health-promotion programs, and biometric screenings. In addition, financial incentives mattered more to CDHP enrollees than to traditional-plan enrollees.
Compared to those in traditional plans, adults in a CDHP were much more likely to say they were in excellent or very good health, much more likely to exercise, and much less likely to smoke. CDHP and HDHP enrollees were also more likely to be highly educated. For more information,
visit  www.amsinsure.com

We specialize in HSA plans for groups and individuals.  

 HSA Plans   general information

Health Savings Account Plans  individual quotes

Alert Medicare Tax Increase

Federal Law eAlert

Please take note of the following:   Effective January 1, 2013, an additional Medicare tax will impact employers and payroll service providers. The Patient Protection and Affordable Care Act (PPACA) increases the Medicare tax rate on wages by 0.9% (from the current rate of 1.45% to 2.35%) for higher-income individuals starting in 2013. This Medicare payroll tax increase applies to wages over $200,000 for single tax filers and $250,000 for couples filing jointly ($125,000 for a married individual filing separately). The Internal Revenue Service (IRS) plans to release revised Forms 941, 943 and the tax return schemas for the Form 94X series of returns. For additional information, contact your payroll provider, a Certified Public Accountant (CPA) or visit the HR Support Center.     Provided courtesy of your HR Pros.

Obama moves ahead with health care law

President Obama, promoting his health care plan in 2009.(Photo: Charles Dharapak, AP)

With re-election safety behind them, President Obama and aides are moving forward with new rules governing their landmark 2010 health care law.

The Department of Health and Human Services said Tuesday it is putting in place provisions that would make it illegal for insurance companies to discriminate against people with pre-existing conditions, enable consumers to compare health plans, and encourage employers to promote employee wellness.

 

"The Affordable Care Act is building a health insurance market that works for consumers," said HHS Secretary Kathleen Sebelius.

Republican presidential nominee Mitt Romney and GOP congressional candidates had made repeal of the law a major part of their campaigns; the president defended the law he referred to as "Obamacare."

The administration described Tuesday's actions:

 

-- A proposed rule that, beginning in 2014, prohibits health insurance companies from discriminating against individuals because of a pre-existing or chronic condition. Under the rule, insurance companies would be allowed to vary premiums within limits, only based on age, tobacco use, family size, and geography. Health insurance companies would be prohibited from denying coverage to any American because of a pre-existing condition or from charging higher premiums to certain enrollees because of their current or past health problems, gender, occupation, and small employer size or industry. The rule would ensure that people for whom coverage would otherwise be unaffordable, and young adults, have access to a catastrophic coverage plan in the individual market.

 

-- A proposed rule outlining policies and standards for coverage of essential health benefits, while giving states more flexibility to implement the Affordable Care Act. Essential health benefits are a core set of benefits that would give consumers a consistent way to compare health plans in the individual and small group markets. A companion letter on the flexibility in implementing the essential health benefits in Medicaid was also sent to states.

 

-- A proposed rule implementing and expanding employment-based wellness programs to promote health and help control health care spending, while ensuring that individuals are protected from unfair underwriting practices that could otherwise reduce benefits based on health status.                         

Employers’ See Smallest Healthcare Cost Increases in 15 Years

In 2012, employers saw the lowest average annual cost increase in healthcare costs since 1997, according to a Mercer survey. Growth in the average total health benefit cost per employee slowed from 6.1% last year to just 4.1% in 2012. Cost averaged $10,558 per employee in 2012. Large employers (500 or more employees) experienced a higher increase (5.4%) and higher average cost. Employers expect another relatively low increase of 5% for 2013. However, this increase reflects changes they plan to make to reduce cost; if they made no changes, cost would rise by an average of 7.4%.

“Over the past decade, employers have figured out how to stabilize cost increases for health benefits through cost-shifting and other cost management techniques. Now we’re seeing a move toward even greater control through defined contribution strategies,” says Sharon Cunninghis of Mercer.
Employers have been moving more employees into low-cost consumer-directed health plans and beefing up their health management programs. Julio Portalatin, president and CEO of Mercer said, “Employers are very aware that, in 2014, when the health reform law’s provisions kick in, they will be asked to cover more employees and face added cost pressure. They’ve taken bold steps to soften the impact and it’s paying off already.”
Success in controlling cost growth in recent years may be contributing to employers’ commitment to providing health coverage. Few expect to terminate their employee health plans in the next five years even though state-based health insurance exchanges will provide another source of health coverage for individuals beginning in 2014. Just 7% of large employers and 22% of small employers (10 to 499 employees) believe it is likely or very likely that they will do so.
In fact, there was a slight increase in the percentage of employers offering coverage in 2012: it rose from 55% to 59% after falling in each of the previous two years. Most of the increase was among the smallest employers (10 to 49 employees), which are the least likely to offer coverage and the quickest to drop it when cost goes up.
Employee enrollment jumped from 13% to 16% of all covered employees in 2012 with a growing number of employers now positioning a high-deductible, account-based consumer-directed health plan as their primary plan or even their only plan. Many employers see these plans as central to their response to health care reform provisions that will raise enrollment. Over the past two years, offerings of CDHPs have risen from 17% to 22% of all employers and from 23% to 36% of employers with 500 or more employees.
Fifty-nine percent of very large organizations (20,000 or more employees) now offer a CDHP. “If we’re not already at the tipping point for CDHPs – and we may well be – at this rate of growth it’s coming soon,” says Cunninghis.
Moving even a small number of employees out of a more expensive plan into a CDHP can result in significant savings for an employer. The cost of coverage in a CDHP with a health savings account is about 20% lower, on average. While employers have been reluctant to offer the CDHP as the only medical plan, attitudes are shifting. Eighteen percent of large employers expect to offer a CDHP as the only plan, up from 11% in 2011. Average enrollment rose from 25% to 32% among large employers that offer an HSA-based CDHP.
The ACA requires that health plans cover, at a minimum, 60% of eligible health plan expenses. Some employers are resetting their health plan value to move closer to that minimum, and saving money as a result. Some employers are offering a lower-cost CDHP in 2012 while others simply raised the deductible of an existing PPO plan. The average PPO in-network deductible reached $1,427 for an individual in 2012. Although large employers typically require much lower deductibles, the average deductible among employers with 500 or more employees rose by about $80 in 2012, to reach $666.
An example of a defined contribution strategy is determining the employer’s contribution to the cost of coverage and requiring employees to pay anything above that amount. Employees can save money by choosing a lower-cost plan. Forty-five percent of the employers say they use or are considering using a defined contribution strategy.
Offering a wellness plan has emerged as an employers’ top long-term strategy for controlling health spending. Seventy-eight percent of large employers say that senior leadership is supportive of health management programs to encourage more health-conscious behavior.
Most employers believe that health management programs are making a difference, but proving the return-on-investment (ROI) remains a challenge. The largest employers are the most likely to have measured the ROI of their health management programs (53% of employers with 20,000 or more employees). More than three-quarters of those say that their programs have had a positive effect on medical plan trend.
Forty-eight percent of large employers with health management programs provided financial incentives or penalties, up from 33% last year. When non-financial incentives (recognition, gifts or lotteries) are included, this figure reaches 54%. In 2012 18% of large-employer health management programs include incentives for achieving, maintaining, or showing progress toward specific health status targets. These incentives were rare in 2011.
With the future of health reform secured by the re-election of President Obama, employers will be focusing on the next generation of cost management strategies. One approach that is increasingly in the spotlight is the use of private exchanges, a private-sector alternative to the state health insurance exchanges. Private exchanges give employers a way to offer employees a broader choice of benefits while allowing carriers to compete for their business and manage their risk. Fifty-six percent of employers would consider a private exchange for active or retired employees.
The use of high-performance (or narrow) provider networks rose from 14% to 23% in 2012 among very large employers (5,000 or more employees) while the use of surgical centers of excellence rose from 18% to 35%. There was also strong growth in the use of medical homes (from 3% to 9%), which also promise to save money by improving care.
Twenty four percent of large employers offer an ongoing plan to retirees under age 65 and just 17% offer a plan to Medicare-eligible employees, which is essentially unchanged from 2011. An additional 15% stopped offering a plan for which new hires will be eligible, but they continue to offer coverage to a closed group of employees retiring or hired before a specific date.
Forty-seven percent of large employers include same-sex domestic partners as eligible dependents, up from 39% in 2010. This varies significantly based on geographic regions, from 73% of employers in the West to 30% in the South.
Very large employers are adopting special provisions concerning spouses of employees with other coverage available. In 2012, 18% of employers with 5,000 or more employees had such a provision in place, up from 15% in 2011. They imposed a surcharge for spouses with other coverage available (14%) or denied them coverage entirely (4%).
Nineteen percent of large employers vary the employee contribution amounts based on tobacco use status or provide other incentives to encourage employees not to use tobacco – up from 17% in 2011. Growth was especially strong among very large employers: 46% of employers with 20,000 or more employees now use an incentive, up from just 35% in 2011. For more information, visit www.amsinsure.com.

Medicare Program Announces Premium Rates

 

The Centers for Medicare & Medicaid Services (CMS) announced monthly actuarial rates for beneficiaries age 65 and over and disabled beneficiaries under age 65 who are enrolled in Medicare Part B. The monthly actuarial rates for 2013 are $209.80 for aged enrollees and $235.50 for disabled enrollees. The standard monthly Part B premium rate is $104.90 for all enrollees for 2013. That is equal to 50% of the monthly actuarial rate for aged enrollees or approximately 25% of the expected average total cost of Part B coverage for aged enrollees. (The 2012 standard premium rate was $99.90.)
The Part B deductible is $147 for all Part B beneficiaries for 2013. If a beneficiary has to pay an income-related monthly adjustment, they may have to pay a total monthly premium of about 35%, 50%, 65%, or 80% of the total cost of Part B coverage.

Our new award

Alliance of Health Groups Offers Plan to Lower Costs, Improve Care

The National Coalition on Health Care (NCHC) recently released a plan for health and fiscal policy at the National Press Club in Washington. The national alliance of consumers, providers and payers introduced a plan that pairs nearly $500 billion in spending reductions and health-related revenues with longer-term policy changes designed to make health care affordable in the public and private sectors.

The 50-page plan, “Curbing Costs, Improving Care: The Path to an Affordable Health Care Future,” outlines a seven-part strategy:

1. Change provider incentives to reward value, not volume.
2. Encourage patient and consumer engagement.
3. Use market competition to increase value.
4. Ensure that the highest-cost patients receive high-value, coordinated care.
5. Bolster the primary care workforce.
6. Reduce errors, fraud, and administrative overhead.
7. Invest in prevention and population health.

NCHC’s recommendations include $220.97 billion in reduced federal spending and $276 billion in health-related revenue. However, NCHC proposes pairing budget savings with broader reforms. “Ten-year budget savings have to be coupled with strategies for long-term sustainability: transitioning from fee-for-service, engaging consumers in their care and coverage choices, investing in our non-physician workforce as well as doctors, and crafting a medical liability system that supports patient safety,” said Former U.S. Senator David Durenberger, past chair of the Senate Finance Committee’s Subcommittee on Health and a member of NCHC’s Board of Directors.

Drug Companies Conspire to Keep Generics Off the Market

If it seems harder to get a generic medication it’s not your imagination. With pay-for-delay tactics, brand prescription drug manufacturers pay generic drug manufacturers for not creating generic versions of their medication. This limits the number of prescription options available to patients and contributes to the growth in health care costs, according to the American Medical Assn. (AMA), which has adopted a policy to work toward ending the practice.

Pay-for-delay agreements are estimated to cost American consumers $3.5 billion per year. The Federal Trade Commission (FTC) has recommended that Congress pass legislation to protect consumers from such – agreements. But www.foxbusinessnews.com reports that Congress has failed to stop pay-for-delay and generic drug makers and big-name pharmaceutical companies have been winning court rulings that allowed it.

The Federal Trade Commission recently filed an amicus brief in the U.S. District Court for the District of New Jersey stating that a branded drug company’s agreement not to launch an authorized generic drug “provides a convenient method for branded drug firms to pay generic patent challengers for agreeing to delay entry.” The FTC also filed a brief in the case of Lamictal Direct Purchaser Antitrust Litigation. In the case, the private plaintiffs alleged that GlaxoSmithKline paid Teva Pharmaceuticals to delay entry by promising not to compete with authorized generic versions of the drug Lamictal.

New Discount Program for Anthem Members

New discount from 1-800 CONTACTS and Glasses.com for all members

 

Starting November 1, 2012, all members will receive $20 off the price of their contacts or glasses when they spend a minimum of $100. Plus, free shipping. Best of all, members don't need to have vision coverage to take advantage of this discount.

Business Owners and Retirement Planning

As a business owner, you have invested a great deal of time and effort into building your company over the years. You know the amount of planning needed to maintain daily operations and grow your business. Now, you may be ready for retirement. But, the planning does not end. What you do next, and how you navigate potential tax issues and regulatory pitfalls, can make a big difference in the long-term success of your retirement.

Here are some of the more "taxing" concerns you may face associated with retirement:

Early retirement and early withdrawals. If you take withdrawals from your qualified retirement plan before age 59½, you may be subject to a 10% Federal income tax penalty. There are certain instances in which early withdrawals may be taken without penalty, such as death, disability, or substantially equal periodic payments. Otherwise, at 10%, the penalty tax can be significant, so it is important to plan accordingly.

Waiting too long. You must begin taking required minimum distributions (RMDs) from your traditional Individual Retirement Account (IRA) by April 1st of the year after the year in which you reach age 70½. If you fail to do so or do not withdraw enough, you will be subject to a 50% penalty tax, which will be incurred on the difference between your RMD and the actual withdrawal amount. Your RMD amount is based on the previous December 31st balance, divided by your life expectancy (or the joint life expectancy of you and your spouse, if applicable).

Working while receiving Social Security. If you receive Social Security and also continue to work, a portion of your benefits may be taxable. For more information, refer to Internal Revenue Service (IRS) Publication 915, Social Security and Equivalent Railroad Retirement Benefits, or consult with your tax professional.

You may be subject to the "give-back" if you are under full retirement age (based on the year of your birth), receive Social Security benefits, and earn income. The law requires a give-back of $1 for every $2 earned in excess of $14,640 in 2012 for those individuals between the ages of 62 and full retirement age who are receiving a reduced Social Security benefit.

For the year in which an individual attains full retirement age, the give-back is $1 for every $3 in excess of $38,880 for 2012. Starting in the month in which the individual attains full retirement age, the give-back is eliminated. If you are under full retirement age and thinking about taking Social Security benefits while still working, it is important to understand the potential tax consequences of doing so.

Where you live in retirement matters. Each state has its own rules on income, estate, sales, and property taxation. Your tax and legal advisors can help you assess the potential tax advantages and disadvantages of your retirement destination.

Planning Continues through Retirement

Your personal retirement plan probably involved building a nest egg with regular savings over decades. Now that you are preparing for retirement, continue with your planning. Your keen business sense will serve you well as you near retirement and enjoy your "golden years." Be sure to consult with your professional advisors for specific guidance.

Building the Value of Your Business

Caught up in the day-to-day operations of your business, you may not be thinking about how much your company could be worth when the time comes for a transition. But the choices you make now, both large and small, can add to or detract from the future value of the company.

There are many ways for a company to grow, including entering new markets, developing new products, acquiring complementary businesses, hiring more employees, and increasing sales and marketing expenditures. You can grow the business rapidly by tapping into outside financing or more slowly by using the company's own revenue. With so many strategies to consider, you may want to develop a long-term plan to guide the growth of your business.

Your decision regarding the ultimate disposition of the company may influence many aspects of your current business strategies, including your form of business ownership. You may want to consider a C corporation structure for a business that may go public or an S corporation structure if a private sale is planned. Be sure to consult with your tax and legal advisors about the implications of each form of business ownership.

Transferable Assets

To begin, work on building and maintaining your company's transferable assets. These may include tangibles like property and equipment, as well as intangibles, including a customer base, brand recognition, and business processes. Depending on the type of business you operate, your intangible assets, such as copyrights or trademarks, proprietary lists of customers or prospects, and long-term contracts, may have substantial value at the time of transition. An attractive location can also add on value beyond an owner's equity.

Companies also derive intangible benefits from a strong management team with the knowledge and connections required to maintain the business after the owner retires. In many cases, having a skilled and loyal workforce may also be considered a transferable asset in a sale.

Financial Performance

When growing your business, strive to establish a self-sustaining enterprise with steady revenue growth. The financial performance of a company is often measured by its free cash flow, or the cash that it generates before interest, taxes, depreciation, and amortization, less capital expenditures. In assessing the value of the company, a buyer may, for example, project a com-pany's earnings over the next five years based on the current cash flow. This projection will take into account any outstanding debt, as well as whether revenue growth and margins demonstrate a history of consistent growth.

Businesses are often more efficient when they focus on their core competencies, rather than diversifying too broadly. So, if your company has product lines or offers services not closely aligned with the firm's core business, consider whether these areas are profitable or represent a drag on the company's resources. Selling off non-core assets may provide funds to help pay off debt.

You may also want to restructure agreements or contracts that may be objectionable to a potential buyer, such as a long-term lease, licensing contracts, employment contracts, and loan agreements. Long-term leases may be an asset provided the terms are favorable, the location is suitable, and the size is right. If, however, the company is likely to outgrow its facilities before the lease is up, or if potential buyers want to move the firm's operations, a short-term lease may be more appropriate. Or, you may seek to formalize certain verbal agreements to ensure the company's relationships with key customers or suppliers continue after the transition.

For a detailed analysis of your company's value, contact a professional business appraiser who is familiar with your industry. Even if you have no immediate plans to leave the company, an estimate can help you identify ways to maximize the value of the business in preparation for a future exit strategy.

Read other articles in: Business Edge Newsletter:

More than 15 million Americans are severely obese, data show

About 6.6%, or 15.5 million, U.S. adults were severely obese in 2010, compared with 3.9% in 2000, according to RAND Corp. data published in the International Journal of Obesity. Data showed the rate of severe obesity -- which is a BMI of 40 or higher or roughly being 100 pounds or more over a healthy weight -- was 50% higher in women than in men and twice as high for blacks as for Hispanics and whites. USA TODAY (10/1)

Ask about our health plans that offer assistance with medcal educatin and programs.

Consumers Need to Be Aware of Tax Issues that Come With the ACA

As the Affordable Health Care Act rolls out, there are tax implications, potential penalties, and other considerations that may affect consumers, says John Beyer, CLU , president of AMS Benefit Consultants. To pay for the benefits associated with the healthcare mandate, Congress has imposed new taxes and penalties on the wealthy, the healthcare sector, and on those who refuse to purchase health insurance (an estimated 32 million Americans).

Those who don’t buy insurance are subject to the following penalties, which grow more severe in time:

• 2014 – $285 per family or 1% of the family’s income, whichever is greater.
• 2015 – $975 per family or 2% of income, whichever is greater.
• 2016 and beyond – $2,085 per family or 2.5% of income, whichever is greater.

Next year, the individual payroll tax for Medicare will increase from 1.45% to 2.35% for every dollar earned over $200,000 ($250,000/year for married couples). A 3.8% tax may be imposed on unearned income generated by dividends, interest income, capital gains and other forms of passive income, depending on your modified adjusted gross income.

Employee Demand For Voluntary Benefits Exceeds Supply

 

At smaller businesses, economic conditions are making one-half of Gen Y and Gen X workers look more toward employee benefits as a solution to financial security – even if they have to fund 100% of the cost themselves, according to a MetLife survey.

“Younger workers have a different benefit perspective than older generations, particularly those in many smaller organizations that were hit very hard by the recession and are unsure about the future of Social Security,” said Anthony Nugent, executive vice president, Group, Voluntary & Worksite Sales, at MetLife.

Two-thirds of Gen Y and Gen X employees, who work for small businesses, are willing to pay more for their benefits rather than losing them. Fifty-four percent want a wider array of benefit options, even if it means paying all of the cost of voluntary benefits, such as life, dental, vision, disability, critical illness, or homeowner/auto insurance coverage, for example.

Fifty-seven percent of companies with 500 employees or more say that providing voluntary benefits is a key element of their benefit strategy compared to 43% who said so a year earlier. Smaller firms saw an increase to 31% from 26%. The survey also reveals the following:

• 44% of younger workers are interested in voluntary home/auto while 2% of small businesses offer this benefit.
• 41% of younger workers are interested in voluntary life while 20% of small businesses offer this benefit.
• 40% of younger workers are interested in voluntary disability while 8% of small businesses offer this benefit.
• 38% of younger workers are interested in voluntary dental while 11% of small businesses offer this benefit.
• 38% of younger workers are interested in voluntary vision while 9% of small businesses offer this benefit.
• 38% of younger workers are interested in voluntary critical illness while 10% of small businesses offer this benefit.

Almost three out of four small business employees would like their employer to offer financial education, but only 29% of employers offered these programs. Seventy-two percent of younger employees who are very satisfied with their benefit have a very strong loyalty to their employers compared to 46% of younger workers overall.

For more information, visit www.amsinsure.com or call 800-334-7875 to request more information.

What Will Employers Do, As Health Care Reform takes hold?

Many believe that employer behavior over the next few years will be what makes or breaks health reform. Over the last few years, with the economic downturn many employers have reduced or dropped coverage. PPACA and its underlying financial assumptions are built on the premise that employers will keep being the primary providers of private health insurance benefits in this country during the years to come. But expert opinions vary widely about how the new law will impact group coverage when fully implemented in 2014. Several surveys, studies and articles released this past week give a bit of a clue as to what employers are thinking when it comes to health reform and providing benefits to employees. For instance, this past week, a Gallup survey showed that of all groups of American voters, business owners who make our country's hiring and benefit decisions are the most disproving of President Obama and his policies. Ironically, their highly paid professional employees are the group most pleased with the President.  Those same employers are trying hard to manage their health care costs right now. A new study by America's Health Insurance Plans (AHIP) shows employers are increasingly likely to select consumer-directed plans as part of their employee benefit offerings, even though these same plans could be limited in the future by impending PPACA insurance market reforms. Meanwhile, some employers are trying to use PPACA benefits to their cost-advantage in perhaps an unintended way. Kaiser Health News reports this week that some employers are incenting their younger employees to stay on their parent's employer-provided plans as long as possible as a means of reducing their own healthcare costs. It seems like an uncertain future is just too much for some employers to handle. The headline from a Deloitte survey out this week shows that one in ten companies plan to drop coverage. But that’s not all the study revealed. Most employers say their company is “not well prepared” to implement the 2014 provisions of PPACA.  And while 30% think PPACA is “a good start,” 59% see it as “a step in the wrong direction.” Showing corresponding data with the Gallup poll referenced above, there was a wide range of opinions reported, from Human Resources who responded more positively to executive-level respondents who think it's a step in the wrong direction. Perhaps a reason why is that, despite a lot of rhetoric, neither Republicans nor Democrats have done much to make health reform an easier pill for employers to swallow during the 111th Congress. Yes, there are some House-passed measures to make things easier for businesses stacked up that the Democratically-controlled Senate won't consider. But most of them aren’t health reform-related, and other than the out-and-out repeal bills, not too much health reform legislation is moving through the House. There are a number of business-friendly health reform measures with widespread, and even bipartisan support, including straight repeal bills.  Most haven't even been allowed by the GOP leadership to make it through the committee process, let alone be voted upon on the floor. These would include, among others, H.R. 1744, which would repeal the employer mandate, H.R. 605, 369 and 2010, all of which would improve group access to consumer-directed health insurance options in the future, H.R. 436 to repeal the medical device tax, and H.R. 1206 to fix the MLR requirements for agents and brokers and H.R. 2077 to completely repeal them. It goes without saying, nothing to make it easier for businesses to deal with health reform is currently moving through the Democratically-controlled Senate either. Bottom line, policymakers on both sides of the aisle need to get a lot more business friendly if they want to fix our economy, reduce costs, and keep employer dollars in our healthcare system in the years ahead. Perhaps our nation's employers need to more clearly articulate the need for change. Some analysts believe they're the key to breaking the gridlock in Washington.

CBO Score: The Good, The Bad and The Ugly

The Congressional Budget Office (CBO) issued its much anticipated updated “score” of PPACA on Tuesday, July 24, as well as, a new cost estimate for repealing the legislation. Bottom line, the CBO’s projections of how much the law will cost the federal government over the next 10 years as a result of the Supreme Court’s ruling in NFIB v. Sebelius contained both good news and bad news for health reform supporters. It also contained the ugly news that the price of individual health insurance coverage is about to go up even more for everyone.  On one hand, supporters of the law must be pleased that the CBO found that completely repealing PPACA would increase the federal deficit by $109 billion between the years 2013 and 2022. Also, the office determined that as a result of the Supreme Court's ruling on Medicaid, the coverage provisions will be $1.168 trillion over the next 10 years, which is $84 billion less than what had been projected in March prior to the Court's ruling. On the other hand, people who like the new law can’t be happy that part of the reason why the law is now much less expensive is that it will provide coverage to far fewer people. The CBO clearly stated "fewer people will be covered by the Medicaid program, more people will obtain health insurance through the newly established exchanges, and more people will be uninsured. The magnitude of those changes varies from year to year."  While the CBO couldn’t predict the number of people who would no longer have access to coverage exactly, their best guess was about 3-4 million additional individuals remaining uninsured.  The CBO didn’t attempt to predict which states would or would not expand their Medicaid programs. However, they did take a stab at guessing how many people would live in states that will either completely or partially expand their programs, as well as guess how many will live in places that do not grow their programs at all.   The CBO concluded that about one-third of the potential newly eligible Medicaid population will reside in states that will fully expand coverage under the law’s parameters (i.e., up to 138 percent of poverty). These individuals will be enrolled in Medicaid, as they would have been prior to the Supreme Court ruling. The CBO also indicated about half of the population who could be newly eligible for Medicaid will live in states that will only partially expand their Medicaid programs (i.e., raising the eligibility level for populations higher than exists currently, but not up to 138 percent of poverty). This is an interesting assumption, because many policy wonks, including your Washington update author, didn’t feel that the Supreme Court ruling was clear on what happens in states that choose to only partially expand their programs and the Obama administration hasn’t been particularly forthcoming about its views as to whether or not the expansion is an all or nothing proposition for the states.   The CBO concluded that 1/6 of the population that was intended to be covered by Medicaid by the health reform law lives in states that will not expand their Medicaid program at all over the next 10 years. In total, the CBO assumes that about 6 million fewer people will be enrolled in Medicaid under the law due to the ruling. They feel that between 2-3 million of these people will receive via exchanges instead, meaning that 3-4 million will remain uninsured. Finally, the CBO included the following paragraph on page 15 of its analysis of the Court ruling, which we find to be particularly disturbing, given that this is the “Affordable Care Act”: “The additional enrollees [i.e., those previously projected to enroll in Medicaid, but who will now receive Exchange subsidies in light of the Court’s ruling] are likely to spend more on health care, on average, than those previously expected to purchase insurance through the exchanges because people with lower income generally have somewhat poorer health.  As a result, CBO and JCT now estimate that the premiums for health insurance offered through the exchanges, along with premiums in the individual market, will be 2 percent higher than those estimated in March 2012.” This increase comes in addition to the $2,100 per family premium increase the CBO previously predicted back in 2009.

Major Health Insurers Agree to Lower Rate Increases for Small Employers

Three of California’s major health insurers have agreed to lower their July rate increases. After review by the Department of Insurance, Anthem Blue Cross, Blue Shield, and Aetna agreed to modify their most recent small group rate increases for this quarter. Small group policies are available to small employers with two to 50 employees.
Anthem Blue Cross is withdrawing its 2.5% July 1st premium increase for small-group PPO products. The withdrawal will save about $25 million for 45,000 of Anthem Blue Cross’ small group policyholders, covering approximately 280,000 individuals. Anthem has raised rates 4.7% on its small group policyholders in the previous 12 months.
Blue Shield Life and Health Company will provide a credit to 58,000 small employers (covering approximately 265,000 individuals) equivalent to reducing its July 1st third quarter rate increase by 1.5%. As a result of the credit, the effective Blue Shield rate increase will be 1.6%, which is Blue Shield’s only small group rate increase for its small employer policyholders in the past 12 months. This modified rate increase will save policyholders approximately $15 million.
Aetna will lower its proposed small group rate from 2.6% down to 1.3% for its 9,200 policyholders (covering approximately 69,000 individuals), which saves about $8 million for small employers. Small employers have already been billed for July and August for the July 1st rate increases, but will see credits on their August or September bills.

One of the hidden pieces of Health Care Reform ACA

When does your home become part of your health care? After 2012! Your vote counts big time in 2012, make sure you and all your friends and family know about this ! HOME SALES TAX I thought you might find this interesting, -- maybe even SICKENING! The National Association of Realtors is all over this and working to get it repealed, -- before it takes effect. But, I am very pleased we aren't the only ones who know about this ploy to steal billions from unsuspecting homeowners. How many realtors do you think will vote Democratic in 2012? Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? That's $3,800 on a $100,000 home, etc. When did this happen? It's in the health care bill, -- and it goes into effect in 2013. Why 2013? Could it be so that it doesn't come to light until after the 2012 elections? So, this is ‘change you can believe in’? Under the new health care bill all real estate transactions will be subject to a 3.8% sales tax. If you sell a $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation, -- who often downsize their homes. Does this make your November, 2012 vote more important? Oh, you weren't aware that this was in the ObamaCare bill? Guess what; you aren't alone! There are more than a few members of Congress that weren't aware of it either. You can check this out for yourself at:http://www.gop.gov/blog/10/04/08/obamacare-flatlines-obamacare-taxes-home I hope you forward this to every single person in your address book. VOTERS NEED TO KNOW..

How Will Health Reform Affect Employers?

David Levine, CEO of the American Sustainable Business Council: Measures taking effect in 2014 will create more competition among insurance companies, which will drive down prices. When the ACA is fully implemented, small businesses will no longer pay more than large corporations for their insurance. However, one element in the Court’s opinion could hurt small businesses. The Court said that states need not expand Medicaid to 133% of the federal poverty level, as required under the ACA. Small businesses would benefit from the expansion since it would reduce the number of employees needing to be covered by a company’s healthcare plan. AHIP: Employers will have more incentive to self-insure their health coverage — increasingly shifting the burden of the fees to smaller employers and individuals who must shoulder the cost of a statutorily fixed level of fees no matter the relative size of fully insured coverage markets. Edward Fensholt, JD, and Mark Holloway, JD — leaders of Lockton’s Compliance Services group: Employers will need to begin making significant decisions in the next several months. Regulations will be very complex, particularly on the employer mandate. We can expect a crush of complex guidance compressed into a very short time. The next stops on the health reform train include distribution of four-page plan summaries, W-2 reporting of health plan values, limits on health flexible spending accounts, new income, and capital gains taxes on executives. The Supreme Court opinion also adds a wrinkle to the expansion of Medicaid eligibility. The Court said the feds cannot hold a state’s Medicaid funding hostage if the state doesn’t play. That could mean that more people will seek subsidized coverage in an insurance exchange or-worse-that some won’t qualify for Medicaid or exchange-based subsidies. Julio Portalatin, president and CEO of Mercer: Any employer that has not conducted a health care reform check-up should make it their first order of business. Employers need to redouble their compliance efforts, especially for immediate requirements, such as providing summaries of benefits and coverage to employees. This court’s decision reinforces popular features, such as providing coverage of dependents up to 26 and eliminating exclusions for preexisting conditions. David Rahill, President of Mercer’s Health and Benefits business:Employers can expect a spike in plan enrollment for 2014 as a result of the individual mandate. But they may see enrollment level off once the state exchanges become operational. By 2014, health insurance exchanges will be operating in every state, offering community-rated insurance to certain small employers and individuals, with federal premium tax credits available to help some people buy that coverage. In the near term, employers must report the value of employer coverage on IRS Form W-2, cap dollar limits on health care flexible spending arrangements, and increase Medicare withholding for high earners (those earning more than $200,000 per year). They must also comply with the reforms already in effect, such as coverage of dependents up to age 26.

Here is a detailed analysis of today’s Supreme Court ruling from NAHU, courtesy of our retained counsel, Ernst & Young:

US Supreme Court Upholds Affordable Care Act

The US Supreme Court today (June 28, 2012) upheld the Affordable Care Act (ACA), ruling that the law’s individual mandate is a constitutional exercise of Congress’s power to impose taxes. With the Court’s decision, compliance efforts likely will move ahead at full speed with major provisions of the ACA becoming effective in 2013 and 2014.
In a 5-4 decision, Chief Justice Roberts, joined by Justices Ginsberg, Breyer, Sotomayor and Kagan, concluded, “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”
In the Court’s analysis of the ACA’s Medicaid provisions, it held that it would be unconstitutional for the federal government to withhold all Medicaid funding in order to force states to comply with the Medicaid expansion. Chief Justice Roberts wrote, “Nothing … precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.”
The Court ruled that the Anti-Injunction Act, which limits lawsuits challenging a tax before it is assessed, does not apply because Congress specifically provided that the penalty payment enforcing the individual mandate would not be treated as a “tax.” Notwithstanding acceptance of Congress’s penalty label for purposes of application of the Anti-Injunction Act, the Court ruled that for purposes of determining whether the individual mandate is constitutional, the penalty payment falls within Congress’s general power to tax and, therefore, is upheld.
The decision arises from cases brought by the state of Florida (and joined by 25 other states), the National Federation of Independent Business, and several individuals challenging the constitutionality of the individual mandate and the Medicaid expansion. The cases were later consolidated.
In their dissent, Justices Kennedy, Scalia, Thomas and Alito wrote that the law should have been struck down in its entirety.
With the exception of the limitation on the federal government’s authority to withhold Medicaid funding, all provisions of the ACA stand and compliance efforts likely will move ahead at full speed. In preparation for the major coverage expansion to occur under the ACA in 2014, the Administration is expected to release a host of regulations dealing with the definition of minimum essential coverage, employer coverage and reporting requirements, and an array of new taxes and fees. Clients should be aware of provisions of the law set to take effect in 2013 and 2014, including those listed in the table below.
Provisions of the Affordable Care Act That Take Effect in 2012, 2013 and 2014
2012
• Medicare hospital value-based purchasing program
• Increase in physician quality reporting requirements in Medicare
• Additional Medicare pilot programs on alternative payment methodologies, e.g., accountable care organizations
• Increased requirements for hospitals to maintain not-for-profit status
• Fees from insured (including self-insured) plans transferred to the Patient-Centered Outcomes Research Trust Fund
2013
• Increase Medicare payroll tax by 0.9% on high-income earners
• Impose a 3.8% tax on net investment income of high-income individuals
• $500,000 cap on health insurers’ deduction for executive compensation  
• Eliminate employer deduction for Medicare Part D subsidy
• FSA limitations
• Excise tax on medical device manufacturers and importers
• Medical expense deduction floor increases to 10%  
• Nationwide bundled payment pilot begins in Medicare
• Increased Medicaid reimbursement for primary care
• Medicare physician comparison data available to the public
• Reductions in Medicare payments for select hospital readmissions
• Expanded coverage of preventive services by Medicaid
2014
• Employer mandate and individual mandate
• Employer and insurer reporting requirements
• New health insurance market reforms take effect
• State health insurance Exchanges established
• Premium tax credits and cost-sharing subsidies available to certain individuals in Exchange insurance products
• Medicaid expansion to new populations (100% federal match to states for newly-eligible populations through 2016)
• Annual fee on health insurers
• Medicare/Medicaid DSH payment cuts begin
• Independent Payment Advisory Board (IPAB) issues first report to Congress if Medicare spending exceeds growth target
Post-2014
• Excise tax on high-cost employer-sponsored coverage (2018) 
Political reactions
The Court’s ruling will not end the political debate over health care, which will remain a central issue in the 2012 elections and beyond. The law stands as the centerpiece of the domestic record  of President Obama, who today said, "Whatever the politics, today's decision was a victory for people all over this country whose lives will be more secure because of this law and the Supreme Court's decision to uphold it." The President added, "With today's announcement it is time for us to move forward to implement and, where necessary, to improve this law."
In comments in response to the ruling, presumed Republican presidential nominee Gov. Mitt Romney said, "What the Supreme Court did not do on its last day in session, I will do in my first day in office. I will act to repeal Obamacare."
Following the release of the decision, House Majority Leader Eric Cantor (R-VA) announced that the House on July 11 will hold a vote on legislation to repeal the ACA in its entirety. The measure likely will pass the Republican-controlled House, but it is unlikely to advance in the Democratic-controlled Senate.
Repeal of the ACA has been a primary focus of congressional Republicans and remains a central objective of many Republicans’ campaigns in the November elections. Efforts to repeal all or part of the law will remain difficult unless Republicans maintain control of the House, win the presidency, and win at least a majority in the Senate in the November 2012 elections.
Republicans to date have not coalesced around a proposal to replace the ACA. Further efforts to control rising health care costs, including reforms to federal health entitlement programs and health-related tax expenditures, will be at the center of budget and deficit-reduction debates that are expected to dominate Washington after the November elections.
Background on the law
The Affordable Care Act was enacted in March 2010; it comprises the Patient Protection and Affordable Care Act of 2010 (which President Obama signed on March 23, 2010) and the Health Care and Education Reconciliation Act of 2010 (which the President signed on March 30, 2010).
The primary goals of the ACA are to: (i) expand coverage to an estimated 32 million Americans without health insurance; (ii) reform the delivery system to improve quality and drive efficiency; and (iii) lower the overall costs of providing health care.
To accomplish the goal of expanding coverage, the ACA mandates that all Americans maintain a minimum level of health coverage (the so-called individual mandate) or face a tax penalty. The law expands Medicaid coverage and provides federal premium tax credits and cost-sharing subsidies to assist low and moderate income individuals without affordable employer-sponsored insurance in obtaining health insurance through state-based insurance Exchanges. The ACA mandates, for the first time, that employers with 50 or more full-time employees provide certain minimum benefits or pay penalty fees.
The law also implemented insurance market reforms, including a ban on exclusions for pre-existing conditions, premium rate restrictions, extension of dependent coverage through age 26, and mandatory coverage of preventive services.
A mix of Medicare and Medicaid reimbursement cuts; provisions to reduce fraud, waste, and abuse in those public programs; other delivery system reforms; and a series of tax increases on individuals, corporations and the health industry are used to offset the cost of the law.

Lack of Insurance Proves Fatal

Lack of health coverage lead to the premature death of 26,100 people in 2010, according to a study by Families USA. From 2005 to 2010, the number of people who died prematurely due to a lack of health coverage rose from 20,350 to 26,100 a year.
 States with the most premature deaths due to uninsurance in 2010 were
 California with 3,164 deaths, Texas with 2,955 deaths, Florida with 2,272 deaths, New York with 1,247 deaths, and Georgia with 1,161 deaths. The survey compared the uninsured to the insured:

• Uninsured adults are five times less likely to have a regular source of care than the insured (55% versus 11%).

• 51% of uninsured adults who tried to find a new primary care doctor in the past three years said it was somewhat difficult or very difficult, with 20% saying it was very difficult.

• 41% of the uninsured said that a doctor’s office or clinic would not accept them as a new patient.
• Uninsured adults are nearly four times as likely to delay or forgo a preventive care screening due to cost (36% versus 10%).
• Uninsured women over 50 are about half as likely to have gotten a mammogram in the past two years (42% versus 79%).
• Uninsured 50- to 64-year olds with incomes below 250% of the federal poverty level are five times less likely than insured people in the same age group to have gotten a colon cancer screening in the past five years (10% versus 50%.)
• Uninsured adults are more than six times as likely to go without needed care due to cost (26% versus 4%).
• Uninsured Cancer patients are more than five times as likely to delay or forgo cancer-related care because of medical costs (27% versus 5%).
• Uninsured adults are more likely to be diagnosed with a disease in an advanced stage. For example, uninsured women are substantially more likely to be diagnosed with advanced stage breast cancer than women with private insurance, as are uninsured people with colorectal cancer.
• Uninsured adults are at least 25% as likely to die prematurely.
• Uninsured patients can’t get the same discounts on hospital and doctor charges that the insurance companies get. As a result, uninsured patients are often charged more than 2.5 times what insured patients are charged for hospital services. Three out of five uninsured adults report having problems with medical bills or medical debt.

For more information, visit http://www.familiesusa.org/.