February 11, 2013

Unfinished business: healthcare

Washington Times - President Obama's health care law will push 7 million people out of their job-based insurance coverage — nearly twice the previous estimate, according to the latest estimates from the Congressional Budget Office released Tuesday.

CBO said that this year's tax cuts have changed the incentives for businesses and made it less attractive to pay for insurance, meaning fewer will decide to do so. Instead, they'll choose to pay a penalty to the government, totaling $13 billion in higher fees over the next decade.

But the non-partisan agency also expects fewer people to have to pay individual penalties to the IRS than it earlier projects, because of a better method for calculating incomes that found more people will be exempt.

CNN - Under the Obama administration's Affordable Care Act,  lifetime limits are supposed to be a thing of the past. But there are about 30 schools in the country, mostly in California and the Ivy League system, that offer students what is called self-funded student health insurance.

Instead of using an insurance company, a university runs the program, and student premiums directly pay for it. Experts say it's a complicated system to run, but it's ultimately a lot cheaper for a school, because it eliminates the middleman of an insurance company.

About 300,000 students are covered by these plans. A proposed ruling issued by the Obama administration  determined these plans do count as "minimum essential coverage" but exempts them from having to meet the same standards of other health coverage.

The proposed rule means self-funded student health care plans can continue to cap benefits like they did in Rahder's case. Those self-funded student plans are the only insurance-type programs in the country that don't have to provide the consumer protections guaranteed by the Affordable Care Act.

Naked Capitalism - CNS News found this tidbit contained in IRS final regulations published on January 31. Now admittedly these are examples for the purposes of illustrating how to make various calculations under the new regulations, but the assumptions are pretty clear. The cheapest type of plan in ObamaCare is a bronze plan, and bronze family plans for 4 and 5 person families are assumed to cost $20,000 in 2016.

Now before you freak out and worry that that is what you will actually have to pay, there are various types of credits for people who are deemed by formula to “lack affordable coverage”. But I’m pretty stunned at the premiums the IRS is assuming will be generally applicable. One of the benefits claimed for Obamacare was that it would help lower premiums by bringing healthy people who heretofore had gone un or underinsured into the risk pool. It looks like the insurers plan to more than offset that by the premiums they are charging for the higher risk groups they had heretofore managed to exclude. Or at least that will be their excuse.

Some of the backers of the ACA are finding it to be less of a deal than they had anticipated. From the Wall Street Journal:
    Labor unions enthusiastically backed the Obama administration’s health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour.

    Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26.

    To offset that, the nation’s largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance.
I expect the gnashing of teeth over the ACA to get louder as it is rolled out. We said at the time, and we’ll say it again: this plan is a gimmie to Big Pharma and the health insurers. It makes the underlying problem of the American health care industry, that of excessive costs, only worse. The predictable outcome will be costly insurance that does not cover much. Expect it to be OK on routine care, restrictive on preventative care (that may not be entirely bad given how much doctors over test) and stingy on big ticket items.

Wonkblog, Washington Post -  While states have traditionally regulated insurance markets, only 19 have updated their laws to allow them to enforce these new requirements, according to a report out Friday from the Commonwealth Foundation. If states don’t move soon, it could have the federal government playing a far larger regulatory role than initially expected.

“We don’t know what capacity the federal government has to enforce these protections,” Georgetown’s Kevin Lucia, a co-author of the study, says. “One way or another this will be the law of the land. It’s really a question of are the states going to do the enforcement, and maintain their traditional role, or will the federal government need to step in.”

Lucia, alongside co-authors Katie Keith and Sabrina Corlette, surveyed states about the steps they’ve taken so far to beef up their regulatory authorities. They found that nearly two-dozen had passed new laws in this arena, allowing them to enforce the new insurance regulations.

But another 22 states responded that, if challenged, they likely would not have the legislative authority to implement the new Obamacare provisions.

Huffington Post - Some families could get priced out of health insurance due to what's being called a glitch in President Barack Obama's overhaul law. IRS regulations i failed to fix the problem as liberal backers of the president's plan had hoped.

As a result, some families that can't afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own. How many people will be affected is unclear.

The Obama administration says its hands were tied by the way Congress wrote the law. Officials said the administration tried to mitigate the impact. Families that can't get coverage because of the glitch will not face a tax penalty for remaining uninsured, the IRS rules said.

"This is a very significant problem, and we have urged that it be fixed," said Ron Pollack, executive director of Families USA, an advocacy group that supported the overhaul from its early days. "It is clear that the only way this can be fixed is through legislation and not the regulatory process."

But there's not much hope for an immediate fix from Congress, since the House is controlled by Republicans who would still like to see the whole law repealed.

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