IRS mulls meaning of “minimum value” coverage

Under the Affordable Care Act, beginning in 2014, lower-income  individuals who purchase coverage under a qualified health plan through an  Exchange may be eligible for  a premium tax credit under Code Sec. 36B. To receive the tax credit, however, the individual must be ineligible  for other minimum essential coverage, including coverage under an employer-sponsored plan that is affordable and provides “minimum value.” Conversely, most large employers that don’t provide plans offering “minimum value” (thereby sending their employees to an Exchange to seek coverage) may be liable for a penalty payment under Code Sec. 4980H.

So, for the IRS to determine which individuals are  eligible for the tax credit or not, and which employers will get socked with the penalty,  it must get a handle on what it means under the ACA to provide  minimum value.

The statute provides some help. Under Code Sec. 36B(c)(2)(C), an employer-provided plan fails to provide minimum value if it covers less than 60 percent of the total allowed costs of benefits provided under the plan. To flesh out that definition, the IRS has offered, in Notice 2012-31,  three alternative draft approaches that could be used to determine whether an employer-sponsored plan provides minimum value. The idea is that employers could then choose one of the three approaches to measure their plan’s minimum value.

Interested employers should review the three alternatives and offer any comments by June 11, 2012. Comments may be sent to  Notice.Comments@irscounsel.treas.gov or via mail. The IRS will then proceed to issue a proposed rule on the topic.

So, what are the three alternatives? Well, as you might expect, the word “actuarial” is involved.

Approach 1: Calculators. An actuarial value calculator (AV calculator) or a minimum value calculator (MV calculator) would be made available by the Department of Health and Human Services (HHS) and the Treasury Department. In either case, the calculator would permit an employer-sponsored plan to enter information about the plan's benefits, coverage of services, and cost-sharing terms to determine whether the plan provides minimum value. The data underlying the MV calculator (which would be designed for use by employer-sponsored self-insured plans and insured large group plans) are expected to be claims data reflecting typical self-insured employer plans.

Approach 2: Checklists.  An array of design-based safe harbors would be offered in the form of checklists that would provide a simple, straightforward way to ascertain that employer-sponsored plans provide minimum value without the need to perform any calculations or obtain the assistance of an actuary.

Approach 3: Actuarial certification. Plans with nonstandard features that preclude the use of the calculators without adjustments could obtain an appropriate certification by a certified actuary, in accordance with prescribed continuance tables, recognized actuarial standards, and other conditions that may be prescribed in administrative guidance, that the plan provides minimum value.

For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.

Health Insurance Rebates Under Health Reform Law Estimated To Total $1.3 Billion In 2012

Consumers and businesses are expected to receive an estimated $1.3 billion by this August in rebates from health insurers who spent more on administrative expenses and profits than allowed by the patient Protection and Affordable Care Act (ACA), according to a new analysis from the Kaiser Family Foundation of the latest estimates provided by insurers to state insurance commissioners.

Beginning in 2011, the ACA requires insurance plans to pay out a minimum percentage of premium dollars towards health care expenses and quality improvement activities, limiting the amount spent on administrative and marketing costs and profit. Under the law, large group plans are required to spend at least 85 percent of premium dollars on health care and quality improvement, while small group plans must spend at least 80 percent. These ratios are known as the medical loss ratio (MLR). If an insurer fails to meet the MLR within a market segment in a state, they must issue a refund to consumers and employers.

The rebates include $541 million in the large employer market, $377 million in the small business market, and $426 million for those buying insurance on their own. Rebates in the group market generally will be provided to employers, and in some cases be passed on to employees as well.

Rebates are expected to go to almost 31 percent of consumers in the individual market, Kaiser found. Among employers, 28 percent of the small group market and 19 percent of the large group market is projected to receive rebates. The share of consumers in the individual insurance market expected to receive rebates ranges from near zero in several states to as high as 86 percent in Oklahoma and 92 percent in Texas. When averaged over all enrollees in the small and large group markets, on an annualized basis per enrolled rebates paid to employers and workers are expected to be $21 and $14, respectively.

“This study shows that asking insurance companies to put more of their premium dollar towards patient care rather than administration and profits is not only popular but also effective,” said Drew Altman, president and chief executive officer (CEO) of Kaiser. “There are tangible benefits for consumers and employers.”

The largest rebates overall are projected to go to consumers and businesses in Texas($186 million) and Florida ($149 million); Hawaii is the only state where no insurer is expected to issue a rebate. Consumers receiving rebates in the individual market are projected to receive $127 on average, with amounts varying significantly by insurer and state. The average rebates for individual purchasers expected to receive them range from just a few dollars in some states to as much as an average of $305 in Alaska, $294 in Maryland, $243 in Pennsylvania, $241 in Idaho, and $236 in Mississippi.

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

For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.

CCIIO Issues Guidance On Medical Loss Ratio Rules

The Center for Consumer Information and Insurance Oversight (CCIIO) has issued guidance in the form of an informational bulletin on the medical loss ratio (MLR) provision of the Patient Protection and Affordable Care Act (ACA). Sect. 2718 of the Public Health Service Act (PHSA), as added by the ACA, requires health insurance issuers to submit a MLR report to the Department of Health and Human Services (HHS) and requires them to issue a rebate to enrollees if the issuer’s MLR is less than the applicable percentage established in PHSA Sec. 2718(b).

The CCIIO bulletin provides MLR guidance on the following topics:

• applicability of the MLR to certain types of plans,
• employer groups of one,
• counting employees for determining market size,
• individual association policies,
• offering policyholders a “premium holiday,”
• reinsurance and reporting,
• Exchange user fees,
• states with a higher MLR standard,
• “mini-med” experience and application of the adjustment, and
• form of rebate.

Applicability to certain types of plans. The bulletin clarifies that self-funded plans are not subject to the MLR reporting and rebate requirements. The MLR requirements apply to health insurance issuers offering group or individual health insurance coverage. A self-funded plan (sometimes referred to as a self-insured plan) is not a health insurance issuer, as defined by PHSA Sec. 2791(b)(2), and thus is not subject to the MLR requirements. It does not matter if the self-funded plan is subject to ERISA or if it is a non-ERISA plan.

The bulletin also indicates that even if a state law defines certain coverage as blanket coverage, an issuer offering such blanket coverage is subject to the MLR requirements if the coverage meets the definition of group or individual health insurance coverage under PHSA Sec. 2791.

Employer groups of one. Where a sole proprietor and/or a spouse-employee are the only enrolled employees, the health plan would not be considered to be a group health plan. Thus its experience would be aggregated with the issuer’s individual market experience and not with the issuer’s small group market experience. However, if a sole proprietor enrolls a non-spouse employee, the experience of that plan is part of the small group market for MLR purposes. Even if the only enrollee is an employee who is not an owner or spouse, the plan is part of the small group market for MLR purposes.

Counting employees for determining market size. The bulletin indicates that at the time of sale, issuers should make every attempt to accurately count the number of employees employed by the group policyholder so as to accurately categorize the group as belonging in the small or large group market.

If the policyholder does not make the issuer’s policy available in all of the states in which it has employees, the issuer may not be able to count all of the employees. For example, an employer may be based in New York with 150 employees in New Yorkand 20 employees in Maryland. The Maryland employees may have health insurance with one issuer while the New Yorkemployees are covered by a different and separate (affiliated or unaffiliated) issuer. The issuer of the Marylandpolicy may not know the total number of the policyholder’s employees and may categorize the group in its systems to be in the small group market for purposes of the policy it issues, the rates it charges and so forth.

In such a situation, the issuer may determine the group size for MLR reporting purposes and the minimum MLR standard based on the information available to the issuer. Unless the issuer has information which puts the issuer on notice that the total number of employees would cause the plan to be a large group for MLR purposes, the issuer may determine the number of employees solely based on the number of employees in Maryland and it may report the experience of the policy in the small group market or large group market based on the number of the plan’s Maryland employees.

Exchange user fees. Exchange user fees should be included in the licensing and regulatory fees that are subtracted from premium in the MLR calculations. The regulation regarding reporting of fees requires issuers to report as an adjustment to premium “statutory assessments to defray operating expenses of any state or federal department.”

Form of rebate. An issuer may provide rebates in the form of a premium credit, lump-sum check or, if the enrollee paid the premium using a credit or debit card, by returning the entire rebate to the account used to pay the premium, according to the bulletin. CMS believes that an alternative, such as a debit or credit card, is a reasonable alternative as long as it is as convenient to use as a check and meets all of the conditions described below.

An issuer may provide rebates in the form of a pre-paid debit card (presumably by arrangement with a bank or other financial institution) provided all of the following conditions are met:

• The applicable policyholder’s or subscriber’s name must be on the card in order to ensure that the rebate reaches the intended policyholder or subscriber and is not stolen or diverted to a creditor or other third party;
• The card must not have an expiration date;
• The policyholder or subscriber must not incur any fees in association with the use or non-use of the card. If the institution that issues the card does not have any locations within a reasonable distance to the policyholder’s or subscriber’s mailing address and the policyholder or subscriber incurs a fee from another financial institution in order to cash the card, any such fees imposed by the other financial institution must be reimbursed by the issuing institution;
• At the policyholder’s or subscriber’s request, the entire balance on the card must be convertible to cash;
• The policyholder or subscriber must be able to contact the issuer or the issuing institution in order to opt out of receiving the rebate in the form of a prepaid debit card and request a paper check. Such check must be mailed within ten calendar days of the request;
• The policyholder or subscriber must be able to contact the issuing institution during normal business hours to obtain the cash value, or balance, on the card; and
• The policyholder or subscriber must be provided with an easy-to-understand notice of their rights and an explanation of the terms of the card at the time the cards are mailed.

For more information, visit http://cciio.cms.gov/resources/files/mlr-qna-04202012.pdf.

For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.

Premium Rate Increase Requests For Two More Health Insurers In Six States Deemed Excessive

In response to health insurance premium rate increases that it deemed excessive, the Department of Health and Human Services has called on Assurant Inc.'s Time Insurance Company and Bedford Park, Ill.-based United Security Life and Health Insurance Company to either offer rebates to customers in six states or rescind premium hikes ranging up to 24 percent.

The recently announced rate hikes affect about 60,000 individual and small group insurance customers in Arizona, Louisiana, Missouri, Montana, Nebraska, and Wyoming. The Patient Protection and Affordable Care Act (ACA) requires health insurers to justify premium increases of more than 10 percent but does not authorize the government to rescind those rates that are found excessive or unreasonable. In March, two insurers in nine states were found to have requested excessive premium rate increases. This latest review results pertain to two other health insurers in six of the nine states for which premium rate increases were first reviewed.


In these six states, the rate increases requested by Time Insurance for individual and small group insurance were identical to those requested by John Alden Life Insurance Company, another health insurance company doing business in the same states—for example 18 percent for individual and 23 percent for small group insurance. United Security requested the highest rate increases, 20 percent in Arizona and 26 percent in Louisiana, but up to 34 percent in Nebraska (still pending review).

"These increases are unreasonable for enrollees of these plans," said Gary Cohen, director of the HHS Centerfor Consumer Information and Insurance Oversight. Cohen said the rate changes also failed to meet federal standards requiring health insurers to devote at least 80 percent of higher premium revenues to health care services.

For more information, visit http://companyprofiles.healthcare.gov/?search_method=rate_reviews.

For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.

Government officials discuss final regulations for Summary of Benefits and Coverage

Employers and health insurers face a number of changes in 2012 introduced by the Patient Protection and Affordable Health Care Act (PPACA), according to speakers at an April 16 American Law Institute-American Bar Association (ALI-ABA) webinar on health plans. Practitioners and government officials discussed in particular the final regulations issued in February 2012 for the standardized Summary of Benefits and Coverage (SBC) offered to applicants and enrollees that is required of employers.

Insurers, employers and other providers of health care plans must now provide an SBC to plan participants and other affected individuals. An SBC must be provided by a group health insurer to a group health plan; by a group health insurer and a group health plan to participants and beneficiaries; and by a health insurer to individuals and dependents in the individual market. An SBC must be provided on application for coverage, upon renewal or reissuance, and upon request.

Page limits. There are 12 required elements for the SBC, including a description of coverage, cost-sharing requirements, exceptions or limits under the plan and coverage examples (but not the cost of coverage). The SBC cannot exceed four double-sided pages. However, Russell Weinheimer, IRS Office of Chief Counsel, mentioned that, in some cases, the four-page requirement would be impractical and more pages might be required. "If you cannot comply, then make your best efforts to comply," he said. But, while fielding a question from Greta Cowart, attorney, Haynes and Boone, LLP, regarding whether information traditionally reported on page one could run over onto page two, if necessary, Weinheimer stated, "If you can't fit everything on page one, well maybe you have to go on to page 2."

Changes from proposed regulations. Weinheimer noted several changes from the proposed regulations on SBCs to the final regulations. "One change that was made from the proposed regulations [is] the requirement where you have to provide the SBC within seven days," he said. The language was changed to "seven business days" to allow the employer or insurer a little extra time.

Additionally, the final regulations introduced language meant to avoid duplication of SBCs. If both the plan provider and the issuer are required to provide an SBC to an individual, and if one provides the SBC, then the other is relieved of the obligation. Weinheimer suggested that employers should arrange with insurers to prepare the SBC.

Stephanie Lewis, Office of the Solicitor, U.S. Department of Labor, also pointed out that SBC drafters should look carefully at the uniform definitions of standard insurance and medical terms prepared by the government. The definitions include commonly used terms such as "deductible," "preferred provider," "hospital outpatient care," and "prescription drug coverage." "You may use a term like ‘deductible’ that means something different in the SBC," she warned. "Pay attention to those definitions."

Weinheimer also offered a tip for employers who are confused about language in the final regulations requiring a health insurance issuer to provide the SBC to the plan administrator "upon request or application" for health coverage." What does it mean ‘upon application’ in the group market?" said Weinheimer. He posed the common scenario where employees select their plan on the computer by putting a check in the box next to an insurance provider company. He explained, "For purposes of the SBC, that is considered an application."

IRS proposed rule would implement health insurance fee to fund research trust fund

The IRS has issued proposed regulations that implement and provide guidance on the fees imposed by the Patient Protection and Affordable Care Act on issuers of certain health insurance policies and plan sponsors of certain self-insured health plans to fund the Patient-Centered Outcomes Research Trust Fund. The proposed regulations impact the issuers and plan sponsors that are required to pay those fees.

Internal Revenue Code Sec. 4375 imposes fees on issuers of specified health insurance policies which include only accident and health insurance policies that are issued with respect to an individual residing in the United States. Code Sec. 4376 imposes fees on plan sponsors of applicable self-insured health plans.

The proposed regulations provide methods for determining the amount of the fees imposed on the issuers and sponsors. The fees will be used to fund the Patient-Centered Outcomes Research Institute. The Institute will assist, through research, patients, clinicians, purchasers, and policy-makers, in making informed health decisions by advancing the quality and relevance of evidence-based medicine through the synthesis and dissemination of comparative clinical effectiveness research findings. The proposed regulations also address procedural issues such as the reporting and payment of the fees.

The proposed regulations specifically request comments concerning the following issues:

• Whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility;
• How the quality, utility, and clarity of the information to be collected may be enhanced;
• How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and
• Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

Comments and hearing. Written or electronic comments must be received by July 16, 2012. Requests to speak and outlines of topics to be discussed at the public hearing scheduled for Wednesday, August 8, 2012, at 10:00 a.m., must be received by July 30, 2012. The public hearing will be held in the IRS Auditorium at the Internal Revenue Building, 1111 Constitution Avenue NW., Washington, D.C.

Submissions should be sent to CC:PA:LPD:PR (REG-136008-11), Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington D.C. 20044. Submissions may also be hand-delivered Monday through Friday between the hours of 8:00 a.m. and 4:00 p.m. to CC:PA:LPD:PR (REG-136008-11), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, D.C., or sent electronically via the Federal eRulemaking Portal at www.regulations.gov (IRS REG-136008-11).

Providing a Summary of Benefits and Coverage to non-English speakers

The Center for Consumer Information & Insurance Oversight (CCIIO) has released a list of all counties in the United States that meet or exceed the 10-percent threshold of people who are literate only in the same non-English language for purposes of providing a Summary of Benefits and Coverage (SBC) in a culturally and linguistically appropriate manner.

SBC requirement. Pursuant to the Patient Protection and Affordable Care Act (ACA), non-grandfathered group health plans and health insurance issuers offering non-grandfathered health insurance coverage must provide an SBC in a culturally and linguistically appropriate manner. Regulations require these plans and issuers to make certain accommodations for notices sent to an address in a county meeting a threshold percentage of people who are literate only in the same non-English language.

Ten-percent threshold. A plan or issuer is considered to provide the SBC in a culturally and linguistically appropriate manner if the thresholds and standards of IRS Temporary Reg. §54.9815–2719T(e) (claims and appeals regulations) are met as applied to the SBC. The threshold is when 10 percent or more of the population residing in the claimant’s county are literate only in the same non-English language, as determined based on American Community Survey (ACS) data published by the U.S. Census Bureau.

Notice requirements. The claims and appeals regulations outline three requirements that must be satisfied for notices sent to an address in a county in which 10 percent or more of the population is literate only in a non-English language. In such cases, the plan or issuer is generally required to:

1. provide oral language services in the non-English language,

2. provide notices upon request in the non-English language, and

3. include in all English versions of the notices, a statement in the non-English language clearly indicating how to access the language services provided by the plan or issuer.

The plan or issuer should include the statement on the availability of language assistance services on the page of the SBC with the "Your Rights to Continue Coverage" and "Your Grievance and Appeals Rights" sections.

The list is based on 2006-2010 ACS data and is applicable for 2012, and it will be updated annually.

Will acupuncture be an EHB?

It shouldn't be surprising that an assortment of practitioners offering certain medical services would like to get their particular specialties declared essential health benefits (EHBs). EHBs are those medical services that non-grandfathered plans in the individual and small group markets, both inside and outside the state exchanges, must cover beginning in 2014. The Patient Protection and Affordable Care Act (ACA) instructs that the EHB must equal the scope of benefits provided under a typical employer plan.

Now, the American Association of Acupuncture and Oriental Medicine (AAAOM) has urged the public to support its drive to have acupuncture designated an EHB,which would most certainly generate a substantial amount of business for acupuncture clinics across the nation. According to a page on the organization's website, at aaaom.rallycongresss.com, at least 5,758 letters and e-mails were sent to the HHS in support of the AAAOM's position prior to the January 2012 deadline. It will be interesting to see how many other groups outside conventional Western medicine will attempt to have their services considered part of mandatory coverage by 2014.

After considering public input and recommendations from the Institute of Medicine (IOM), the Health and Human Services Department (HHS) has decided that EHB may be defined by any of an assortment of benchmark plans selected by each state, one of which includes the largest plan of any of the three largest small group insurance plans in the state, which the HHS has decided will be the default choice for states that do not exercise the option to select a benchmark plan. The other choices for each state will be any of the largest three state employee health benefit plans, any of the largest three national Federal Employee Health Benefits Program (FEHBP) plans and the largest commercial non-Medicaid HMO in the state.
 
The HHS has determined that small group plans cover generally the same services as the FEHBP Blue Cross Blue Shield Standard Option and the Government Employees Health Association (GEHA), but those last two plans cover acupuncture, and small group health plans generally don't. Consumer groups had urged the HHS to spell out specific covered benefits and provide uniformity in benefits packages offered by different states, but health insurers and employers pushed for mere general guidance, which would give them more flexibility.
 
HHS has decided that health insurers will have flexibility to adjust specific covered services in all ten statutory EHB categories. Those ten categories are: (1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services, including behavioral health treatment; (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services; (9) preventive and wellness services, and chronic disease management; and (10) pediatric services, including oral and vision care. It's possible, then, that even if the HHS doesn't grant the AAAOM's request, various health insurers could determine that acupuncture fits at least one of the above categories, or states could choose a benchmark such as the FEHBP plan that would cover it. If a state chooses a small group market plan, however, it looks like acupuncture would not be covered for state citizens in the exchanges, and if acupuncture is part of mandated state coverage, the cost of it would have to be covered by the state.
 
According to the AAAOM, acupuncture fits the HHS' definition of an EHB, including criteria numbers (1), (4), (5), (7), and (9) above. Organizations such as the Center for Inquiry (CFI) have, however, written to the HHS asking that it deny the AAAOM's request based on its assertion that acupuncture does not meet the IOM's criteria for EHB, which mandate that any EHB be safe, medically effective, demonstrate meaningful improvement, be a medical service, and be cost effective.


So, for the moment, it looks like coverage of acupuncture, if there's to be any at all, will vary by state, especially since it's unlikedly that the HHS will do as consumer groups requested and spell out specific covered benefits. However, the AAAOM can take comfort in the ACA's requirement that the HHS update EHB, based on changes in medical evidence or scientific advancement.


For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.

New ACA streamlining requirement will cost insurance plans, but benefit medical providers

More advantages from the Patient Protection and Affordable Care Act (ACA) are trickling in. One of the latest was announced by the HHS on April 9. It's a proposed regulation that conforms to the  ACA's requirement that a series of regulations designed to streamline health care administrative transactions be issued over a five-year period. The regulations are meant to encourage greater use of standards by health care providers and make existing standards work more efficiently. The proposed regulation announced on April 9 would establish a unique health plan identifier (HPID), according to standards for electronic health care transactions found the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Commenting on the new proposed regulations, HHS Secretary Kathleen Sebelius stated, "The new health care law is cutting red tape, making our health care system more efficient and saving money."

The proposed rule would also adopt a data element that will serve as an other entity identifier (OEID) for entities that are not health plans, health care providers, or individuals, but that need to be identified in standard transactions. It also proposes an addition to the National Provider Identifier (NPI) requirements, and would delay, to October 1, 2014, the compliance date for the International Classification of Diseases, 10th Edition diagnosis and procedure codes (ICD-10).

HHS expects the HPID to benefit medical providers (to the tune of $700 million to $4.6 billion over a ten-year period) and to cost commercial and governmental health plans about $650 million to $1.3 billion. The HHS has given two sources of the expected financial benefits to medical providers: a decrease in the administrative time physician practices currently spend interacting with health plans, and automation of processes for every transaction that is changed from a manual to an electronic one. The compliance date for the HPID is October 1, 2014 for all but small health plans, which have until October 1, 2015.

Medical providers are, apparently, frustrated by the fact that health plans are now identified in standard transactions by multiple identifiers of varying lengths and formats. This leads to rejection of transactions due to insurance identification errors and difficulty in determining patient eligibility. HHS states that "the most significant benefit of the HIPD and the OEID is that they will increase standardization within the HIPAA standard transactions."

Other streamlining provisions from the ACA include an interim final regulation published July 8, 2011, which adopted operating rules for two electronic health care transactions to facilitate both a patient's eligibility for coverage and the status of a health care claim submitted to an insurer, and a regulation, published January 10, 2012, that adopted standards for electronic funds transfers (EFTs) and remittance advice transactions between health plans and medical providers.

The HHS plans to issue more simplification rules under the ACA, including standards for claims attachments and requirements for certification of health plans' compliance with all HIPAA standards and operating rules. Sebelius commented on April 9 that, "These important simplifications will mean doctors can spend less time filling out forms and more time seeing patients."

The new proposed regulation implements Social Security Act Sec. 1173(b)(1), as amended by ACA Sec. 1104(c).


For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.

How ACA benefits women now, as highlighted by Obama Administration

A recent release from the White House may partially explain the President's current popularity with women in recent polls, at least compared to the Republican presidential candidates. According to Keeping America's Women Moving Forward, from The White House Council on Women and Girls, the Affordable Care Act (ACA) has already provided numerous benefits to America's women, especially those on the lower end of the economic scale, and more advantages are yet to come, presuming that the Supreme Court doesn't effectively dispose of the entire law.

The various benefits listed in the report include some that many of us may not have given much thought to recently, including the following:


* One million one hundred thousand women between the ages of 19 and 25 who would have been uninsured currently receive health coverage under a parent’s health insurance plan or through an individually purchased health insurance plan;

* 24.7 million women enrolled in Medicare received preventive services at no additional cost in 2011, including an annual wellness visit, a personalized prevention plan, mammograms, and bone mass measurement for women at risk of osteoporosis;

* More than 2 million women enrolled in Medicare who hit the donut hole saved $1.2 billion in 2011 due to improvements in prescription drug coverage; and

* An estimated 20.4 million women are benefiting from expanded access to preventive services such as mammograms, breast and cervical cancer screenings, and prenatal care at no additional cost.

The report's authors point out that increasing numbers of women today are the main breadwinners for their families, yet women still earn substantially less, on average, than do their male counterparts (77 cents for women to every dollar for men). The report's authors explain that, on top of these existing pay disparities, women face higher healthcare costs than men, and spend an estimated $1 billion more than men for equivalent health coverage (citing "Turning to Fairness: Insurance Discrimination Against Women Today and the Affordable Care Act," National Women’s Law Center, March 2012).

Costs of gender rating. The report points to the fact that only 14 states have limited or specifically banned gender rating – the practice of charging women more than men – in the individual market as the primary reason for this, explaining that 92% of the best-selling plans, excluding plans in those 14 states, charge women higher premiums than men for the same coverage. In 31 states, all of the best-selling plans engage in gender rating. Under the ACA, beginning in 2014, women can no longer be charged more for health insurance simply because of their gender.

The report also emphasizes that women are also far more likely to experience domestic violence, which can threaten their financial security, as well as their health and safety. The ACA includes standard preventative care measures that will include screening for domestic violence at no additional cost, and the Department of Health and Human Services is working to train health and human service providers to integrate domestic violence screenings into their work (citing "Affordable Care Act Ensures Women Receive Preventive Services at No Additional Cost," U.S. Department of Health and Human Services, August 1, 2011).

Medicare more important to women. The report claims that the coverage Medicare provides is particularly critical for women, who, with their lower average incomes and greater life expectancies, rely on Medicare longer than men. Over half of America’s more than 48 million Medicare beneficiaries are women – and 70% of beneficiaries over the age of 85 are women. Women in Medicare also spend more of their income on health care, claim the report's authors, partially because of costs related to preventive services such as mammograms, clinical breast exams, bone density tests, and visits for Pap tests and pelvic exams. Therefore, what's good for Medicare is apparently good for women. The ACA significantly extended the life of the Medicare trust fund and the President’s most recent budget is projected in the report to extend it another two years.

The report also claims that women on Medicare tend to have greater health needs than men, estimating that a higher percentage of women have more than three chronic conditions, and women on Medicare are more likely to suffer from osteoporosis, arthritis, and hypertension. Many key preventive services were made available with no co-pay or deductible by the ACA, and, already, more than 32.5 million seniors, including 19 million women, have already received one or more free preventive services, including the new Annual Wellness Visit, a one-time health review, and education and counseling about preventive services and other care.

New mothers, regardless of their place on the economic ladder, have also benefited from the ACA's reforms. In 2011, the HHS, awarded $224 million via the ACA to states to help families voluntarily receive home visits from nurses and social workers to improve maternal and child health and child development ("HHS Announces $224 Million to Support Evidence-Based Home Visiting Programs to Help Parents and Children," U.S. Department of Health and Human Services, September 22, 2011) Also, the ACA requires most workplaces to provide reasonable break times and private space at work to express breast milk up until a child’s first birthday.
 
For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.

Medicare Coverage Less Generous Than Coverage In Large Employer Plans, When Available

For individuals ages 65 and older, Medicare fee-for-service coverage, even including the Part D prescription drug benefit, continues to less generous on average compared with preferred provider option (PPO) coverage in the standard Federal Employee Health Benefit Plan (FEHBP) and in the typical large employer plan, a new Kaiser Family Foundation report reveals. The average benefit value of Medicare for a person age 65 or older in 2011 is 97 percent of the FEHBP Standard Option benefit value and 93 percent of the typical large employer PPO benefit value, the study, conducted by Aon Hewitt for Kaiser, found. Medicare coverage likely is more favorably comparable with coverage provided in small and mid-size firms, the study added.

This analysis updates a 2008 Kaiser Family Foundation report that found Medicare’s benefit package to be less generous than the comparison employer plans, largely due to a higher deductible for inpatient care, the absence of a limit on out-of-pocket spending, a less generous prescription drug benefit, and a lack of dental coverage. Overall, the study found the following:

• Relative to the typical large employer PPO plan, Medicare provides somewhat more generous benefits for low-cost individuals ages 65 and older because of the relatively low Part B deductible for individuals who do not use inpatient care; however, Medicare is less generous than the typical large employer PPO plan for seniors with moderate and high costs. Similarly, relative to the FEHBP Standard Option (a national Blue Cross Blue Shield PPO that covers 44percent of all Federal employees), Medicare is slightly better for low-cost individuals ages 65 or older, but is notably less generous for moderate-cost individuals and somewhat less generous for high-cost individuals.
• Medicare’s average benefit value relative to the comparison employer plans has improved since Aon Hewitt last conducted the analysis in 2007, largely because of the 50 percent discount on brand-name drugs in the Part D “doughnut hole” included in the 2010 health reform law, and also because the actuarial value of the FEHBP Standard Option has contracted over the past few years due to changes in its benefit design (mainly, the increase in the limit on out-of-pocket spending).

Main differences between coverage in Medicare fee-for-service and in the two large employer plans reviewed were identified in the following categories:

1) Deductibles and coinsurance. Medicare requires multiple deductibles and coinsurance based on service type, whereas a typical large employer plan requires a single deductible for all medical services and the FEHBP standard plan requires a deductible of $350 for outpatient services and a $250 copayment for each hospital admission. In 2011, for an inpatient hospital stay Medicare required a $1,132 deductible and no coinsurance for the first 60 days, whereas the typical large employer plan required 20 percent coinsurance beginning from the first day.

2) Out-of-pocket limits. Medicare has none except for Part D; other plans have limits, but the typical large employer plan has not limits on prescription drug expenses.

3) Prescription drug “doughnut hole.” Medicare has such a spending gap but it is being reduced over time as provided by the Patient Protection and Affordable Care Act (ACA; see Report 324.4.-9). Other plans do not have such a gap.

4) Dental coverage. Medicare offers no coverage for dental services; other plans offer it. However, the Mercer annual National Survey of Employer-Sponsored Health Plans for 2010, found that nearly half of large employers that provide retiree medical benefits offered dental coverage for Medicare-covered retirees, but most required retirees to pay the entire cost of the coverage.

5) Separate network copayments. Medicare does not require different copyments based on in-or out-of-network services, while other plans required smaller copayments for in-network services.

This comparison does not account for changes between the 2007 and 2011 report periods studied of workers in the private plans shifting into other coverages, notably high-deductible health plans which saw a substantial increase from 4% of enrollees to 15%, and in the average increase by about 50 percent in enrollee premium contributions from $717 to $1,077 for the typical large plan and from $1,489.80 to $2,246.16 for the standard FEHBP plan. When these changes are taken into account, it just maybe that, at least for now, the good, old, reliable Medicare still is a better option than the ever-diminishing and ever more expensive employer-provided coverage or no coverage at all. Can Medicare for all be the answer to the nation’s growing uninsurance problem?

On Two Year Anniversary, Health Reform Benefitting Millions

Amid wide misunderstanding, misinformation, lack of knowledge, and fierce opposition to the provisions of the Patient Protection And Affordable Care Act (ACA) even on the second anniversary of the law’s enactment on March 23, 2010, the Barack Obama administration through the Department of Health and Human Services (HHS) is still trying to inform the American public of the law’s benefits currently in effect. In a statement released on March 23, marking the law’s second anniversary, HHS Secretary Kathleen Sebelius listed the law’s achievements thus far. She called the ACA “the law that gives hard working, middle-class families the security they deserve. It’s only been two years, but we’re already seeing that the law is making a difference in the lives of Americans,” as noted below.

Seniors. Recent data shows that more than 5.1 million seniors and people with disabilities on Medicare saved more than $3.2 billion on prescription drugs due to the ACA. The HHS estimated that this equals about $635 per person in average savings.

Women. Because of the ACA, 45.1 million women—including 20.4 million women with private health insurance and 24.7 million women with Medicare—can receive recommended preventive services without having to pay a copayment or deductible. Preventive services, such as mammograms or Pap smears, are covered free of charge to insured individuals.

Young adults. As a result of the ACA, 2.5 million young people ages 19 to 26 have health insurance coverage through their parent’s plans.

Lowering premiums and costs. Insurance companies can no longer raise premiums by double digits without justification. In addition, the ACA requires that premium dollars must be spent primarily on health care, not administrative costs like overhead or executive salaries. So far, an estimated 74.8 million people have been protected by this new requirement, HHS claims.

Individuals with pre-existing conditions. Nearly 49,000 individuals have enrolled in the Pre-Existing Condition Insurance Plan, and it is now illegal for children under 19 to be denied coverage due to a pre-existing condition. The ACA also eliminated lifetime dollar limits on coverage for over 105 million Americans.

Though Support For Individual Mandate Is Low, It Would Affect Few, Stabilize Insurance Market

As the U.S. Supreme Court considers the fate of the Affordable care Act (ACA) individual mandate that requires all individuals to either have health insurance coverage or pay a fine, public support for the mandate continues to be low, Kaiser Family Foundation research shows. The legal spotlight on the mandate shed by the ACA’s opponents has not only made the mandate the best known of the ACA’s provisions (two-thirds know that it’s part of the ACA) but also shaped public perception. However, public opinion of the requirement remains “malleable and basic factual information and messages can sway Americans’ opinion,” Kaiser asserted in its new Data Note, A Snapshot Of Public Opinion On The Individual Mandate.

The December 2011 Kaiser tracking poll found support for the mandate varied from 17 percent to 61 percent, depending on which messages or information opponents or supporters of the mandate hear on the issue. By far the most effective information in terms of changing people’s minds is that, “under the reform law, most Americans would still get coverage through their employers and so would automatically satisfy the requirement without having to buy any new insurance.” After hearing that message, favorable views of the mandate rose 28 percentage points to 61 percent.

In March 2012, Kaiser found that only one in three felt favorable toward the mandate, compared to majorities of the public who favor the law’s other provisions, such as tax credits to small businesses that offer coverage (80 percent), as well as the consumer‐friendly requirement that plans include easy‐to‐understand summaries of their benefits and costs (70 percent). Not even a majority of Democrats, who favor the law overall, have a favorable view of the mandate (45 percent). In addition, between November 2011 and March 2012, intense opposition to the mandate (the proportion who say they have a “very” unfavorable view of it), increased 11 percentage points from 43 percent to 54 percent.

Supporters of the mandate cite as a reason that everyone should have coverage (17 percent) and that people should be responsible for their own insurance and pay their fair share (16 percent). Those opposed say that government should not be able to force people to do something (30 percent), health insurance is too expensive (25 percent), and the fine for noncompliance (22 percent).

Most of the Kaiser survey participants do not see the Court’s ruling on the mandate as the final word on the ACA. Six in ten (62 percent) expect that if the Court strikes down the mandate, some parts of the law will continue to be implemented, while half as many (28 percent) think this will effectively mean the end of the entire law.

Mandate Would Affect Few

A recent study by the Urban Institute found that “if the ACA were in effect today, 94 percent of the total population (93 percent of the nonelderly population) or 250.3 million people out of 268.8 million nonelderly people—would not face a requirement to newly purchase insurance or pay a fine.” The study, The Individual Mandate in Perspective, was conducted using the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) to estimate the number and share of Americans potentially subject to the mandate, identify their insurance status absent the ACA, and simulate eligibility for Medicaid and exchange-based premium and cost-sharing subsidies.

The results of the Urban Institute analysis estimates the population exempt from the mandate; the population potentially affected by the mandate, but already covered by insurance of some type; and the remaining population required to newly purchase coverage or pay a fine. If the ACA were fully in effect in 2011, the researchers found, 87.4 million nonelderly Americans—33 percent of the population under age 65—would be “explicitly exempt” from the individual responsibility requirement because their incomes fall below the tax filing threshold, the direct premium of the lowest cost available plan exceeds 8 percent of family income, and they are undocumented immigrants. Almost three-quarters of the exempt population already have health insurance coverage of some type today; a little more than one-quarter is uninsured.

Of the remaining 181 million Americans under the age of 65 who are subject to the mandate, 86 percent are estimated to have health insurance without reform. The Urban Institute simulates that 95 percent of those with some type of insurance coverage (employer, nongroup, public) without reform will have the same type of coverage under the ACA. Virtually all of the remaining 5 percent will obtain coverage from a different source under reform than they do today (for example, some of those with nongroup coverage currently will be able to obtain coverage through an employer under the ACA).

Forty-three percent of the population potentially subject to the individual mandate receive coverage through large employers; 12 percent receive coverage through small employers; and 7 percent have employer-based coverage from an undetermined source (most commonly a family member living in another household or a previous employer). Nearly all of these people will continue to obtain their coverage from the same type of source once the reforms are fully in place. Five percent purchase coverage in the nongroup market, and 17 percent have coverage through a public program (for example, Medicaid, Children’s Health Insurance Program (CHIP), military), and nearly all will continue to do so once the reforms are fully in place. Some will have their coverage broadened somewhat so that it satisfies the ACA’s minimum or “essential health benefits” requirements.

Nearly 26.3 million Americans who are currently uninsured will be required to newly obtain coverage or pay a fine. In this group, 8.1 million people will be eligible to receive free or close-to-free insurance through Medicaid or CHIP and can avoid the mandate penalties if they do so. Consequently, 18.2 million Americans (6 percent of the total population, 7 percent of the nonelderly population) will be required to newly purchase coverage or face a penalty. Of that 18.2 million, 10.9 million people will be eligible to receive subsidies toward private insurance premiums in the newly established health insurance exchanges, but will have to make partial contributions toward their coverage. About 7.3 million people—2 percent of the total population (3 percent of the population under age 65)—are not eligible for financial assistance under the ACA and will be subject to penalties if they do not obtain coverage.

The insurance mandate has a positive effect, not only by substantially expanding the number of individuals with insurance, but also by stabilizing the insurance market and related premiums, the report found. “By encouraging the currently insured healthier individuals to stay in these markets and attracting newly insured healthy individuals into them as well, the individual responsibility requirement leads to lower premiums and more stable insurance markets than would be the case without it,” the Urban Institute concluded. “We find that premiums in the nongroup market would be 10 to 20 percent higher on average without the individual coverage requirement.”