[…] But if we’re looking at an ACA alternative, I would say that the major issue that causes health insurance to be dramatically more expensive in some states has more to do with health insurance being guaranteed issue (without a mandate that everyone purchase health insurance) and less to do with specific laws regarding coverage details. I’ve written in the past about some of the problems that could go along with selling health insurance across state lines, but Bob and Joe’s point about no state having truly affordable health insurance is really the crux of the issue. In order to make health insurance more affordable, we have to get a handle on the cost of care, since that’s what drives health insurance […]
Affordable Care Act (ACA)
Healthcare Fact Checking the Presidential Debate in Denver
I think that political debates would be a lot more fun (and educational) to watch if non-partisan fact checkers were allowed to sit off to the side and hold up “pants on fire” signs when appropriate. But the next best option is the plethora of online fact-checkers who can help us sift through the statements. It’s generally been acknowledged that there were more than a few half-truths and outright lies in last night’s 1st Presidential debate here in Colorado at the University of Denver.
Specifically regarding healthcare and health insurance reform, there are a couple of PPACA-related points that need further comment. First, we have the comment from Romney regarding the “unelected board, appointed board, who are going to decide what kind of treatment you ought to have.” He’s referring to the Independent Payments Advisory Board (IPAB), whose job is to oversee general Medicare spending. They are allowed to reduce Medicare payments to hospitals with high re-admission rates and recommend ways to reduce wasteful Medicare spending through new innovations. But they cannot restrict benefits, alter Medicare eligibility, or make any decisions regarding treatment options. […]
Colorado Health Exchange Gets $43 Million Federal Grant
Throughout the entire healthcare reform process, Colorado has been one of the states working hardest to make healthcare for everyone a priority. Even before healthcare reform became a national issue, the Colorado Blue Ribbon Commission was actively working on the problem (and many of the recommendations that the Blue Ribbon Commission recommended ended up being quite similar to reforms that subsequently were included in the PPACA). So it’s not surprising that the Colorado health exchange is moving ahead on schedule to meet the target of being able to start enrolling people and small businesses in the exchange as of October 2013 (January 2014[…]
Playoff Health Wonk Review, And The Other Side Of The ACO Coin
An excellent baseball-playoff themed edition of the Health Wonk Review is at Wing of Zock, hosted by Jennifer Salopek – be sure to head over and check it out. This article by Jason Shafrin should be of interest to anyone who has been paying attention to all the talk about ACOs lately. I have been generally impressed with what I’ve read regarding the potential cost savings and improved efficiency that ACOs will hopefully provide. However, although health care reform has focused quite a bit of energy on the creation of ACOs, it is far […]
More About Colorado’s Kaiser Permanente Benchmark Health Insurance Plan
Yesterday’s article about Colorado selecting a benchmark health insurance plan for individual and small group policies sold starting in 2014 has raised a few more questions and I wanted to clarify some details.
This publication from the Colorado Division of Insurance, the Health Benefit Exchange and the Governor’s office is an excellent resource and answers a lot of frequently asked questions. It was released earlier this summer, before the Kaiser small group plan was selected, so it includes details about all nine options that were considered as possible benchmark plans. The Kaiser small group plan that was ultimately picked as the benchmark is listed on page 11 as option A, under “one of the three largest small group plans in the state”.
The 2011 Colorado health insurance plan description for the Kaiser policy is here if you’re interested in the plan specifics. We had a question from a reader who wondered whether chiropractic care would be covered, but it’s listed as “not covered” on the plan description form (item number 30). It’s important to note that cost sharing details like deductible, coinsurance and copays are not part of the benchmark program. The concept of benchmark here only applies to the benefits provided by the Kaiser Permanente health insurance plan. The deductible on the Kaiser health insurance plan is $1200, but that DOES NOT mean that all policies will have to have a $1200 deductible in 2014. In order to be sold in the exchanges, health insurance plans will have to cover at least 60% of costs in order to qualify for a “bronze” designation. And there will also be silver, gold and platinum ratings, so there will still be plenty of variation in terms of cost sharing.
If Colorado had not selected a benchmark plan, HHS would have picked one for us. HHS would have […]
Colorado Selects Kaiser Permanente As Its Benchmark Health Insurance Plan
Last December, HHS made it clear that they were giving states a lot of flexibility in determining what plan would serve as the benchmark for the state’s “essential benefits” for individual and small group health insurance policies that would be sold starting in 2014.
After months of consideration, Colorado has selected Kaiser Permanente’s small group plan as a benchmark. This is the largest small group plan in the state, with almost fourteen thousand members, and was selected by a group of officials from the Colorado Division of Insurance, the Governor’s office, and the health benefits exchange. The Division of Insurance will be taking comments until next Monday before making a final announcement, and you can contact them by email ([email protected]) if you’d like your comments to be considered.
The Kaiser plan covers services in the ten areas that are required by the PPACA (ambulatory patient services, emergency care, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription medications, rehabilitative services, lab work, preventive care/disease management, and pediatric care), which means that it will serve as a benchmark for services in those areas without the DOI having to add additional coverage minimums. In addition, the Kaiser plan was generally considered to be a good balance between comprehensive coverage and affordable coverage. It’s not the most comprehensive policy out there (the much maligned “Cadillac plans” offer more benefits), but it provides […]
Low Deductible Still Required To Waive CSU Student Health Insurance
I’ve been getting a lot of questions from CSU graduate and international students. I just confirmed with the Colorado State University (CSU) Health Network that they’re not budging (much) on the requirement that graduate and international students have a $500 deductible if they want to waive the CSU Student Health Insurance. The person I talked to did mention they might allow a $1000 deductible if the student can prove sufficient financial resources to pay such a large bill.
Meanwhile, the CSU Student Health Insurance Plan has a policy year limit of $250,000 per accident/illness. It’s much better than a mini-med, but they still have a reputation for getting maxed out. I asked if they’ve ever had a student hit the limit (like has happened at other schools), and she said she could only think of one minor case when the student was able to wait until the next calendar year when the benefits started over.
The CSU Health Network is a really great organization though, if it weren’t for the low cap on benefits. They have top notch providers and are very friendly and helpful. And on January 1, 2014, even university health insurance plans will be required to not have a cap on benefits because of the Affordable Care Act.
I Thought Insurance Companies Couldn’t Decline Due To Pre-Existing Health Conditions Anymore?
One of the most common questions lately: I was declined for health insurance due to a pre-existing health condition. I thought insurance companies couldn’t look at our pre-existing health conditions anymore because of [the PPACA] ObamaCare?”
Will Tax Credits Be Available In Federally-Run Exchanges?
[…] Both arguments are interesting, and very convincing. I read Jost’s first, and found myself nodding in agreement all the way through. But then when I read Cannon and Adler’s response, I also found their points to be compelling and hard to refute. This could be the sort of issue that many people would see as splitting hairs, but on an issue as contentious as the PPACA, I can see this debate getting quite a bit of traction over the next year as the exchange implementation process churns along. And it makes me glad that Colorado took the initiative early on (despite a lot of political wrangling) to begin the process of creating our own exchange. I know there are many flaws in the PPACA, and that the yet-unanswered question about how the exchanges will be funded starting in 2015 is a valid concern. But it still seems like a better solution than sitting back and waiting for the federal government to set up an exchange for us that 1) would not be tailored to our state’s specific needs and 2) might make Colorado residents ineligible for much-needed tax credits to help pay for health insurance.
Colorado Health Benefits Exchange Allowed To Submit Grant Application – But It’s Still Controversial
[…] But Lundberg’s concerns are still quite valid. The problem of long-term funding – and the question of how many people will utilize the exchange – is something that will have to be solved in order to keep the exchange functional after the federal money is used up. There was a big push to create high risk pool health insurance programs in all 50 states as soon as the ink dried on the PPACA (no doubt this was a very good thing for people in states that previously had no high risk pool option at all), but enrollment was a lot slower than expected. The exchange has to be prepared for enrollment numbers that may be lower (or higher?) than anticipated, and make sure that financially the exchange is able to sustain itself regardless of the level of initial participation.
Although the long-term funding question is unresolved at this point, it would seem that the only viable option is to move ahead with the creation of the exchange. They have less than 18 months now to get everything ready to go for January 1, 2014, and it makes sense that the funding problem has to be worked out in tandem with all of the other administrative questions. If they try to fix the funding issues first, they may not be able to get everything else done in the time they have left. If the federal government is giving out grants to states working on setting up their own exchanges, it seems to be in Colorado’s best interest to take advantage of that and at least submit an application for the grant money.
Colorado Judge Rules Against Contraceptive Mandate
A US District judge in Colorado issued a ruling earlier this month which allows an HVAC company – Hercules Industries, owned by a Catholic family – to temporarily avoid having to provide contraceptive services to female employees with no cost sharing. The PPACA requirements for contraceptive care take effect this week, and Hercules Industries would have had to start covering contraceptives on their group health insurance plan as soon as the next plan year started. The PPACA allows religious institutions an exemption from the contraceptive mandate, and also provides a one year “safe harbor” period during which non-profits that don’t meet all of the requirements for an exemption are permitted to delay the introduction of contraceptive coverage. And most of the lawsuits that have been introduced so far with regards to the mandatory contraceptive coverage have been by employers that qualify for the safe harbor and thus don’t have to start offering the coverage until their plan renewal following August 1, 2013.
The lawsuit involving Hercules Industries was unique in that the company is private and for-profit. It’s also unique in that the judge in the case ruled in favor of the company and against the mandate, siding with the idea that compelling the Catholic-owned company to cover contraceptives in their health insurance plan would violate their religious rights. I think we can assume that similar cases will crop up, and that this PPACA provision – much like the individual mandate – will eventually make its way to the Supreme Court, which is never a quick process.
The issue of contraceptive coverage is one that has highlighted the potential problems that arise by having health insurance provided by employers. Other than the fact that we’ve become accustomed to it, does it really make sense to have our health insurance be tied to our employment? Employers don’t have anything to do with our home or auto insurance, or to what schools we send our children. Mortgages, cell phone service, liability umbrella policies – all of these contracts are maintained between individuals and the companies that issue them. What if employers were […]
Healthcare Reform Progress In Colorado
[…] Although I frequently read and write about Colorado’s healthcare reform progress, I wasn’t aware of the work being done by the Colorado Regional Health Information Organization (CORHIO) before I read Anne’s article. Although the PPACA has put a lot more emphasis on electronic health records and healthcare IT, Colorado has been working on its own system with CORHIO. The program is working with healthcare providers to implement health information exchange between providers – saving time and money in the process – and improve the overall quality of care for Colorado patients. CORHIO goal is to have health information exchange implemented in every community in Colorado by 2015, with at least 85% of providers in the state enrolled in meaningful use EHRs by that time.
Anne also writes about the Colorado Health Benefits Exchange (which has received high marks for its progress so far) and notes that it “…will enable up to 960,000 Coloradans to purchase health insurance at a discounted rate.” The exchange has a lot of excellent features, and will no doubt be a solid resource for individuals and small businesses in Colorado. But in order to avoid confusion I think we should point out that the “discounted rate” likely refers to the government subsidies that will be provided to help people pay their health insurance premiums. Subsidies will be available for people earning up to 400% of the federal poverty level, which is roughly $92,000 in 2012 for a family of four. This means that the majority of the population will qualify for subsidies, and that will indeed amount to a lower premium in terms of what the individual will have to pay out of pocket for health insurance. But I think that there could be widespread misunderstanding in terms of what the exchange will be and what it can provide.
To illustrate the point, we can look at a common misperception that exists with regards to the current health insurance market. It’s widely believed that group coverage is less expensive than individual health insurance thanks to the “group discount”. In fact, individual health insurance is quite a bit less expensive because of medical underwriting: group policies have to accept all eligible employees and dependents, regardless of medical history. This drives up the claims expenses for group coverage and results in higher premiums than medically underwritten individual policies. That’s just one example, but I can imagine that the health benefits exchanges might be erroneously viewed as a marketplace where customers can get “special deals” on the health insurance. People shopping in the exchange will be able to know that they’re getting a certain minimum level of coverage and they’ll be able to compare numerous plans side-by-side (in many ways this is similar to what brokers like us already provide). The subsidy system is also expected to be tied in with the exchange’s policy shopping platform so that any applicable subsidy and the purchase of health insurance can be lumped together in one transaction. But beyond the subsidy and the inherent competition that will exist among the carriers participating in the exchange, I’m not aware of any other discounted rates for policies that will be sold in the health benefits exchanges that the states are currently creating.
HWR and Malpractice Reform
[…] Republicans in congress have long argued that the PPACA needs to be “repealed and replaced”, and many Americans are indeed unhappy with the law as it currently stands. A recent NPR poll found that a slight majority of the population favors amending the law rather than repealing it, but either way I wouldn’t be surprised if we see at least some changes to the law between now and 2014 when the bulk of it is set to take effect.
Malpractice reform sounds great in theory. So it’s the sort of thing that people grab onto as a solution, even if it might not really end up having a significant impact on healthcare costs. Huge malpractice cases – especially the ones that the public deem frivolous or ridiculous – tend to get news coverage and stir up all sorts of online commentary and water cooler discussion. We do live in a litigious society, but I would say that substantial malpractice lawsuits get more than their fair share of media discussion. The result is that everyone has heard of someone who was awarded millions in a malpractice case. My family once lived in a small town where the only obstetric practice closed down after the doctors were the defendants in a $23 million malpractice suit. Stories like that end up on the news, and people tend to think that if we could just reform that system, our healthcare costs (and thus our health insurance premiums) would go way down since doctors wouldn’t have to practice as much defensive medicine. But numerous studies have found that malpractice reform wouldn’t have much of an impact on healthcare costs. David’s article delves into a few of the reasons for this. There’s no doubt that the malpractice system could use some reform, but if that approach is used as a cornerstone of a “repeal and replace” strategy, it’s likely to come up short.
Many Health Insurance Carriers Were Meeting MLR Rules Even Before They Went Into Effect
[…] Except quite a few carriers were already meeting or exceeding these guidelines two years ago, before any MLR rules went into effect. The Kaiser Family Foundation looked at the MLR requirements in the PPACA and then compared them with how health insurance carriers were doing in 2010. The new MLR rules went into effect in January 2011 (nearly a full year before Mr. Ungar’s article was published – his article was just referring to the final determination of what counted as medical expenses and what counted as admin costs). You can see from the chart that 77% of carriers in the large group market and 70% of carriers in the small group market were already spending premium dollars in line with MLR guidelines prior to the rules going into effect. In the small group market things weren’t quite as good (43% of carriers – covering 48% of the population insured by individual health insurance – was meeting the MLR guidelines before they went into effect. Granted, that left quite a few carriers that needed to shape up. Some of them will, and some of them won’t. I have no doubt that we’ll see a few of the under-performing health insurance carriers (with high administrative expenses) leave the market over the next few years. But the high quality carriers – especially the ones that were already meeting the MLR guidelines back in 2010 – will have no problem continuing to spend the vast majority of premium dollars on medical expenses. So the claim that there is “absolutely no way” private health insurance companies are going to be able to “learn how to get by” under the MLR rules is clearly false.
The PPACA allows for states to be granted waivers for the MLR requirement if HHS determines that the 80% MLR requirement could destabilize the individual and/or small group market in the state. So if it appears that a large number of health insurance carriers would have to pack up and leave the state, a waiver can be granted that allows the state to gradually phase in the MLR requirements, reaching the 80% mark in 2014 rather than 2011. 17 states plus Guam have filed requests for waivers (Colorado is not one of them), but most have been denied by HHS because it was determined that enough of the individual and small group carriers would be able to meet the 80% MLR rule (or pay out rebates to insureds) and still remain profitable – ie, they were not likely to leave the market because of the MLR rules.
So basically, yes it is possible for the private health insurance industry to meet the MLR guidelines. Many carriers have been doing so since before the rule went into effect. Does the rule help to trim the fat? Absolutely. And it’s a good way to weed out (or shape up) the inefficient carriers. But for carriers that were already performing well prior to the PPACA, it doesn’t really change things too much.
Special Edition Health Wonk Review – SCOTUS And The PPACA
[…] Overall, the rhetoric in the media hasn’t really changed much since the SCOTUS ruling. While it’s true that the PPACA’s legal battle is over, the political one is as fierce as ever, and will probably intensify over the next few months leading up to the election in November. Joe Paduda’s special edition HWR has opinions from both sides of the issue and plenty of good ideas about the future of healthcare reform in the US. Be sure to check it out.
John Roberts and the PPACA SCOTUS Ruling
[…] Now that the ACA has been upheld by the high court, the states can continue their work to create health benefits exchanges with some degree of certainty that they are not wasting their time (Colorado has been making progress on its exchange for well over a year already, but there’s still much to be done). There is of course an election cycle coming in a few months, and a full legislative year in 2013 that could result in changes – big or small, depending on the political outlook of the next congress – to the existing law. But the fact that the Supreme Court has upheld the law as legally valid gives it a lot more credibility than it had yesterday.
There has been some surprise in the blogging world that Justice John Roberts sided with the majority on this one. Many expected him to be of the opinion that the individual mandate and/or the entire ACA were unconstitutional. But it’s important to note that at the time he was nominated by George W. Bush, his pro-government views were regarded as a positive attribute by conservatives. Think back to the things that the government was trying to do in the middle of the previous decade. Wire tapping, TSA expansion, indefinite detainment of suspected enemy combative in the war on terror, etc. Those were issues where the government was pressing for more control, and conservatives were generally in support of that. With a new administration led by a Democrat, there are different areas in which[…]
160th Cavalcade Of Risk – Colorado Wildfire Season Edition
The news in Colorado for the past few weeks has been dominated by stories of wildfires, and there seems to be a new one every few days. Watching footage of houses burning and courageous firefighters battling the blazes definitely brings to mind all sorts of risk-related thoughts. We send our best wishes to everyone living in the areas that have been hit by the recent fires, and hopefully Colorado will get some good rain very soon. We’re very thankful for the firefighters and we’ve mixed in historic images of heroic firefighters from the past.
With that in mind, welcome to the 160th Cavalcade of Risk. We’ve been participating in the Cavalcade for nearly six years, and we’re always honored to get the privilege of hosting. The Cav is all about risk, and with that in mind I wanted to share one of the best articles I’ve seen in a long time on the topic of risk. Mr. Money Mustache lives just down the road from us, in Longmont. He’s got quite a way with words, and his blog is both informative and entertaining. This article that he wrote about the illusion of safety is a must-read.
Jason Shafrin, aka The Healthcare Economist, brings us a solemn article about suicide among veterans from the wars in Iraq and Afghanistan. Sadly, more veterans have died from suicide than from enemy fire. This article sheds light on the very real need for better mental health support for our armed forces, both during and after their deployments.
In a similar sobering fashion, Julie Ferguson of Workers’ Comp Insider discusses domestic violence at work – both in terms of violence that occurs in workplaces and violence in homes or other
locations that can result in injury or death for first responders. Julie describes the four main types of workplace violence – one of which is domestic violence – and explains why employer cannot afford (financially or morally) to ignore the problem of domestic violence in the workplace.
Switching to happier news, in a short – and very sweet – post, Hank Stern of InsureBlog shares a new study that found the secret to health is 3.5 ounces of dark chocolate every day. Sounds good! Of course, for optimal benefits, it should probably be combined with all that other stuff we know is good for us… good diet, plenty of exercise, water, sleep, etc. That includes red wine, right?
Jaan Sidorov runs the excellent Disease Management Care Blog, and gives us his thoughts on pharmaceutical company coupons. Drug copays are set by health insurance carriers to reflect the greater cost associated with brand name prescriptions, and the higher copays for brand name drugs usually serve as an incentive for patients to opt for lower copay generics. But if the pharmaceutical company provides coupons that mitigate most of the copay for the brand name drug, the end result is higher cost for health insurers. But Jaan wonders what would happen if the insurance carriers were to fight back and offer their own coupons? Whatever the […]
SCOTUS Lead-Up Health Wonk Review, And The Free Market Nature Of The ACA
[…] Under the ACA, most health insurance carriers, hospitals, medical offices, pharmaceutical companies, device makers, etc. will all remain privately operated, in the free market. It’s true that the ACA establishes some guidelines that the private entities – and individuals – must follow. Individual health insurance will be guaranteed issue by law, and everyone will be required to purchase health insurance (assuming that the individual mandate isn’t overturned by the Supreme Court), with subsidies helping many families cover the cost. But the products that will be purchased – health insurance and healthcare – will still be primarily in the private sector. I think Justin makes some very good points, especially at the end of his article when he talks about the future. The ACA is by no means perfect, and I believe it will need plenty of tweaks over the years, even if it’s upheld in its entirety by the court. But if it’s overturned and we wait several more years to implement a replacement, we might find that it ends up being a far less free-market-friendly approach.
Aetna, Humana and UnitedHealth Vow To Maintain Some Aspects Of ACA, Regardless Of Court Decision
Much of the healthcare community is eager to hear what the Supreme Court has to say – likely next week – about the ACA. Given how polarized the topic of healthcare reform has been over the past few years, there’s no way that any decision is going to please more than about half of the country, although the court has the option of picking and choosing various parts of the law to uphold or overturn as it sees fit.
Some aspects of the ACA have already been implemented and have proven to be very popular. A few of the country’s biggest health insurance carriers have stated that they will keep some of the most popular ACA provisions – even if the law is overturned. Aetna, Humana, and UnitedHealth have said that they will continue to offer preventive care with no cost-sharing, allow young adults to remain on their parents’ health insurance policy through age 26, and maintain the third-party appeals process that insureds can use if a claim is denied. Humana and UnitedHealth have also said that they will continue to have no lifetime benefit maximums on their policies and ban rescission except in cases of fraud. […]
Will Exchanges Really Be Able To Provide Lower Cost Health Insurance?
[…] It will be interesting to see how health insurance premiums in both the individual and small group market look in 2014 when the exchanges get underway, and then again in 2015. If we do see a significant reduction in the cost of small group health insurance via the exchanges, I have no doubt that plenty of small businesses will be eager to set up group plans for their employees – we already know that cost is the primary barrier, and that a lot of businesses would like to offer health insurance but simply cannot afford to do so. But I also wonder whether we might see trends in premium increases that are similar to what we have now, even within the exchange. In order to really get a handle on health insurance premiums, we have to find effective ways of controlling healthcare costs first. The ACA included numerous cost-control provisions, but it remains to be seen how effective they will be. The exchanges are a good way for people and businesses to be able to shop for health insurance and coordinate their coverage with their federal health insurance subsidies. But the exchanges cannot address the actual cost of healthcare, which continues to climb much faster than inflation.
Healthcare Reform After The Supreme Court Rules
I would say that the impacts she describes would also apply here in Colorado, even though we’re not quite “active” according to the criteria on the State Reforum chart. The three criteria on the chart that Colorado has not officially met are areas where the state has been making progress already, so I would say that we’re not too far off from getting a score of five or more. (For example, Medicaid expansion has been a priority here for a few years, and the Colorado Division of Insurance has made changes to bring more transparency and accountability to the health insurance rate increase review process. Those two issues are part of the criteria on the chart that Colorado has not yet fulfilled). And given the Governor’s commitment to expanding health insurance coverage to as much of the state’s population as possible, I would say that Colorado will continue to take steps to reform healthcare over the next few years, even if there ends up being little or no federal framework for reform. But as Sonya pointed out, if the entire ACA is struck down, the state will have to start from scratch on a lot of issues. In some regards, however, Colorado has already passed laws that address various individual aspects of healthcare reform – things likegender-neutral premiums and maternity care, for example. Those will not be impacted by a ruling on the ACA, since they are independent of federal law and apply only to health insurance policies sold here in Colorado.
Colorado Governor Committed To Improving The Health Of Colorado Residents
Colorado Governor Hickenlooper stated last week that he believes healthcare reform can be successful even without a mandate. We’ll know later this month what the Supreme Court decides as far as the constitutionality of the individual mandate and the fate of the rest of the ACA if they determine that the individual mandate cannot be included in the law. But Governor Hickenlooper is obviously committed to some form of healthcare reform in Colorado, regardless of how things shake out on a national level.
Hickenlooper addressed an international conference of wellness experts yesterday in Aspen, and said that although he has concerns about the downsides of becoming a “nanny state”, he believes we need to take some significant measures in order to improve the overall health of the Colorado population – if for no other reason than the significant economic impact of poor health and obesity. Even though Colorado is still the leanest state in the US, the percentage of obese adults has been steadily increasing over the past two decades, and it climbed above 20% last year for the first time.
Although Hickenlooper didn’t discuss any Colorado-specific plans with regards to taxing or banning super-sized sodas or other junk food, he mentioned Mayor Bloomberg’s initiatives in NY to ban sodas larger than 16 ounces in places like restaurants and movie theaters. He spoke of his general opposition to such laws (presumably because they can be seen as the state meddling too much in personal affairs), but noted […]
Governor Hickenlooper Says Reform Can Succeed Without An Individual Mandate
Colorado Republicans have pounced on statements that Governor Hickenlooper made on Colorado Public Radio yesterday regarding the individual mandate. Although Governor Hickenlooper did not say that he’s opposed to the individual mandate, he expressed his belief that he doesn’t “think you have to mandate it if you craft it properly.” Since the individual mandate is without a doubt the most controversial aspect of the ACA, the governor’s words will be significant for both sides of the debate. A spokesperson for the governor’s office noted that Hickenlooper was discussing a hypothetical situation that could arise if the Supreme Court strikes down the individual mandate next month but leaves the rest of the ACA intact. Colorado has already done quite a bit of work on the state’s health benefits exchange, but the exchanges are currently being based on the assumption that health insurance will be mandatory in 2014. If the Supreme Court does away with the individual mandate but keeps the rest of the ACA, it will be a challenge for states to create health benefit exchanges that can operate efficiently without an individual mandate. […]
How Individual Health Insurance Measures Up
[…] So although it’s true that out-of-pocket costs are higher in the individual market (likely due in large part to people opting for policies that are less expensive), if we combine the premiums and the out-of-pocket costs, the total expenses are lower in the individual market ($8,821 in the individual market versus $15,158 in the group market, using Colorado private sector family premiums for the group data). To ignore cost when comparing the policies is to leave out a large piece of the equation.
The Commonwealth Fund study mentions maternity coverage as an example of a benefit that is often not included on individual policies, thus earning them a “tin” rating. In Colorado, maternity is now included on all policies that have been issued or renewed since January 2011 (the data for the study was collected in 2010). But in many states, maternity coverage in the individual market is rare and/or quite expensive as an optional rider. This will change in 2014, and based on our observations of the Colorado individual market over the past year and a half, I would say that the change will be a positive one. But given the fact that so many individual policies did not include maternity coverage in 2010, I’m curious as to what percentage of individual health insurance plans would have earned at least a “bronze” ranking if maternity had been excluded from the data. If we don’t count maternity, how do individual health insurance plans measure up? Most individual plans (assuming they aren’t mini-meds or some sort of limited benefit coverage) in Colorado in 2010 covered complications of pregnancy and charges incurred by a newborn (eg, a premature baby who is in NICU for weeks). But routine maternity care was included on very few individual plans in Colorado prior to 2011. Given that fact, and the fact that all new individual plans in Colorado now have maternity coverage, I’d be curious to see how individual and group plans compare in 2012.
Overall, I think that The Commonwealth Fund study is a good one. It highlights the out-of-pocket exposure that people have in the individual market, and it’s true that the average plan in the individual market has higher out-of-pocket exposure than the average plan in the group market. But to make the comparison without also looking at the premium costs in each market seems a bit disingenuous. If individual health insurance were two to three times as expensive as it is now, it could cover more costs for members with less cost-sharing. But that doesn’t seem like a good solution either.
IRS 2013 HSA Contribution Limits
The IRS announced that the 2013 HSA contribution limit for an individual would increase by $150, from $3,100 to $3,250. The family contribution limit is increasing from $6,250 to $6,450 (+$200).
The maximum annual out-of-pocket increased as well. The individual out of pocket maximum is going from $6,050 to $6,250. The family out of pocket maximum is increasing from $12,100 to $12,500.
The minimum deductible on an HSA qualified plan also increases from $1,200 to $1,250 for individuals and increases from $2,400 to $2,500 for families.
What are the 2012 HSA Contribution Limits?
According to the Patient Protection and Affordable Care Act, OTC drugs may be reimbursed only if there is a prescription.
Non-medical withdrawals from an HSA are taxable income and subject to a tax penalty, which increased from 10% in 2010 to 20% in 2011 and remains the same for 2013.
Exception to the IRS tax penalty for non-medical withdrawals:
The tax penalty does not apply if the withdrawal is made after you:
1) Attain age 65;
2) Become totally and permanently disabled; or
3) Die.
More details and research about HSAs and HSA qualified plans.