Posts Tagged ‘Treasury Department’

Little-Known ACA Proviso Stirs Controversy

Wednesday, May 9th, 2012

There’s a largely unseen battle raging among consumer advocates, physician groups and some Democrats in Congress over a key benefit in the Patient Protection and Affordable Care Act (ACA) — tax credits that will help millions of people purchase insurance.

According to Kaiser Health News, “At issue is a section of the law that outlines when low- and moderate-income employees can opt out of their employer’s coverage and instead get federal subsidies to buy insurance through new state-based marketplaces, called exchanges.  The debate over who qualifies for subsidies has been overshadowed by more-polarizing issues such as the government’s authority to require most people to buy insurance.  But if the Supreme Court upholds the law — or even most of the law — the way the tax-credit dispute is resolved will help determine how many people can get subsidized coverage.  A proposed Treasury Department rule says workers and their families cannot qualify for those subsidies unless their employer’s plan is unaffordable because it exceeds 9.5 percent of their household income.”

Consumer advocates are steadfast in their opposition to the rule because it bases affordability on how much an employee might pay for individual coverage, rather than on the cost of covering their entire family.  As a result, many workers won’t be able to afford family coverage, yet their spouses and children will be ineligible to get help to buy insurance.  Approximately 3.9 million dependents might be impacted, according to one estimate.

“The proposed rule excludes people Congress intended to cover,” said Bruce Lesley, president of First Focus Campaign for Children, who sent a letter to Treasury signed by more than 100 advocacy groups, including the American Academy of Family Physicians, the Children’s Defense Fund, the March of Dimes and the National Council of La Raza.  The letter asks President Barack Obama and congressional leaders to take “administrative action or legislation” to spell out what Congress intended.

Treasury officials are drafting final rules, which are expected to be released soon.  “We are working with consumers, businesses and all interested parties to ensure women and families get the affordable care they need,” Treasury Department spokeswoman Sabrina Siddiqui said.

Supporters of the proposed rule, primarily employer groups and insurance brokers, say it is in keeping with the wording in the ACA that defines affordability in terms of the cost of “self-only coverage.”  Critics, including the National Partnership for Women and Families, say it allows for basing the affordability standard on the cost of family coverage. The group notes that Treasury officials plan to use the cost of a family plan as a basis for exempting some people from penalties for not buying insurance.  “It’s unlikely that Congress intended affordability to be determined one way” for penalty fines and another for subsidies, according to the groups.

Several Democratic lawmakers who played key roles in writing and passing the law say the proposed rule is not what Congress intended.  “The notion that Congress wrote the law in a manner that would exclude many families from access to more affordable coverage…is simply incongruent,” according to Representative Sander M. Levin (D-MI), the ranking Democrat on the Ways and Means Committee, and Representative Henry A. Waxman (D-CA), the ranking Democrat on the Energy and Commerce Committee.

Employers and taxpayers have a lot at stake in the way this rule is interpreted. For every worker who forgoes “unaffordable” job-based coverage in favor of subsidized insurance, the employer pays either a $3,000 per subsidized-worker penalty or $2,000 per employee.  The government’s stake will be less if more workers retain job-based coverage and fewer people seek subsidies.  At the same time, tax credits are the main way the law is expected to help low- and middle-income Americans buy insurance if they don’t have access affordable employer-based coverage.  By 2019, for example, the Congressional Budget Office (CBO) estimated that the government will spend $70 billion in tax credits to help 18 million people buy coverage through the exchanges.

Workers paid an average of $921 for an individual health insurance policy last year. That equals 18 percent of the total cost of the plan, according to an annual survey by the nonpartisan Kaiser Family Foundation and the Health Research & Educational Trust.  An employee’s share of a family plan averaged $4,129, or 28 percent of the total cost.

Based on those figures, a worker earning $40,000 will be ineligible to get subsidies because the $921 is less than 9.5 percent of income, even though the cost of the family plan exceeds that cap. In that scenario, the worker’s dependents will be ineligible to receive subsidies.  The policy is certain to impact women, who are 2.5 times as likely as men to be insured as a dependent, the hardest, according to the National Partnership.

“It will force more people into not having an affordable option,” said Dana Cope, executive director with the State Employees Association of North Carolina.  According to Cope, family coverage costs increased the ranks of the uninsured in North Carolina, where the state subsidizes employee coverage, but does not contribute toward family insurance.  “State employees…who earn on average $41,000…cannot afford to cover their dependents,” Cope said.

HHS Moves Forward to Create Healthcare Insurance Exchanges

Tuesday, August 30th, 2011

The Department of Health and Human Services (HHS)  has given $185 million to 13 states and Washington, D.C. to help them build Affordable Insurance Exchanges –one stop shopping that lets consumers choose a private health insurance plan that is virtually identical to insurance choices offered to members of Congress.  Since President Barack Obama signed the Affordable Care Act (ACA), more than half of the states have moved forward on building insurance exchanges.  The ACA creates Affordable Insurance Exchanges that will allow eligible individuals, families, and small businesses to shop for coverage beginning in 2014.  HHS plans to make more grant awards over the next several months.

According to HHS Secretary Kathleen Sebelius, “Too many American families have been priced out or locked out of the health insurance market.  Exchanges will give them control and could save them thousands of dollars a year.  I am encouraged by the progress states have made to date and am excited to give them more resources to continue their work.”

One state that is seeking guidance on how to set up its healthcare exchange is Nebraska,  which has questions about implementing this provision of the ACA.  According to state health insurance analyst Michael Sciullo, officials still haven’t learned the precise details of how the health insurance exchange could be established.  Sciullo is uncertain about whether a Nebraska-run program would carry over to other states, which option is the most cost-effective and how many participants would meet income requirements to join an exchange.  “There seems to be a lot of challenges with the concept,” Sciullo said.  “I think initially it was a concept that sounded great, particularly when we talk about the pooling aspect.  But with all the other challenges facing states as they prepare for the exchange process…it’s been one of those things that sounded a lot better in theory than has worked out practically.” 

Nebraska officials face the challenge of deciding whether the state will join the federal exchange, participate in a regional exchange with other states or create its own exchange.  A regional exchange In Nebraska is not likely because each state has different regulations governing healthcare insurance.  

HHS is encouraging states to set up their own exchanges because a peculiarity in the ACA is that while it gives HHS the authority to create a federal exchange for states that don’t set up their own, it doesn’t have the authority to provide any funding to achieve this goal.  The irony is that the law appropriates virtually unlimited dollars to help states create their own exchanges.  The federal exchange will have the same authority as the states to impose fees on insurance sold through the exchange once it is open for business.  No money is coming in until people start purchasing insurance, and there is significant work to be done in preparing to create federal exchanges.  “It’s very clear that (the HHS) secretary should ‘use such sums as may be necessary’” for supporting states in setting up exchanges, but it’s “sort of silent” on the federal fallback exchange, said Jon Kingsdale, founding director of the Massachusetts Connector, who advises HHS on setting up the federal exchange. 

The recent announcement that HHS, The Department of Labor, and the Treasury  proposed new rules that will help consumers easily understand their health coverage and determine the best options for themselves and their families.  Additionally, these proposed rules will help employers find the best coverage for their business and their employees.  Under the proposed rule alterations, health insurers and group health plans will give consumers clear, consistent and comparable information about their health plan benefits and coverage.  The new forms, scheduled to be available next year, will be a vital resource for more than 180 million health insurance consumers with private coverage.  “Today, many consumers don’t have easy access to information in plain English to help them understand the differences in the coverage and benefits provided by different health plans,” Sebelius said.  “Thanks to the Affordable Care Act, that will change.”  According to Sebelius, the simplified options have been sent to the nation’s governors for their input and approval. 

“Workers and their families need clear and understandable information regarding their health coverage,” said Secretary of Labor Hilda L. Solis.  “Today’s proposal is a common-sense step that will help workers quickly and easily compare different coverage options, in order to make more informed decisions.”  

Writing on the White House blog, Dr. Donald Berwick, administrator of the Centers for Medicare and Medicaid Services, says that “Having affordable, quality health insurance is incredibly important.  But how can you pick the plan that is best for you and your family if insurance plans are written in words you cannot understand or in type so small you can barely read it?  And how can you take advantage of the health benefits you have if you don’t know what your plan covers?  You’re not alone in your confusion.  Too many Americans don’t have access to information in plain language to help them understand the health coverage they have.  Now, thanks to the Affordable Care Act, every American consumer will receive an important new tool to understand their coverage.  Under proposed rules, health insurers and employers who offer coverage to their workers must provide you with clear and consistent information about your health plan.”

Capitol Hill Kabuki

Thursday, June 23rd, 2011

Five Senators want to take the House-passed Medicare plan off the table in bipartisan deficit reduction talks, claiming that the plan effectively dismantles the program.  According to the Senators, the Medicare plan, which passed as part of a budget proposal in April, would jeopardize senior citizens’ current benefits and double out-of-pocket costs.  The five are Senator Ben Cardin (D-MD); Senator Sherrod Brown (D-OH); Senator Bill Nelson, (D-FL); Senator Claire McCaskill, (D-MO); and Senator Jon Tester, (D-MT).

In a letter to Vice President Joe Biden, the senators wrote:  “We are aware the administration has rejected this proposal since its passage by the House, and we applaud your efforts to educate the American people about its serious implications.  We encourage you to remain unwavering in opposition to this scheme.  For the good of the nation’s seniors, it must remain off the table.”

According to the letter,“This proposal would never pass Congress on its own, and it does not belong in a larger deal either.  It would be devastating for America’s seniors, who would see their out-of-pocket costs for healthcare double and the benefits they currently enjoy jeopardized.  Under this risky proposal, insurance company bureaucrats would decide what seniors get.”  Biden is leading talks to raise the debt ceiling and negotiating with lawmakers regarding ways to reduce the deficit as a trade-off to raise the debt ceiling.

The deficit and debt limit – whose ceiling the nation is rapidly approaching – are part of the conversation on Capitol Hill.  “I’m willing.  I’m ready. It is time to have the conversation” about deficit cuts and the debt limit, said House Speaker John Boehner

(R-OH), urging President Barack Obama to involve himself personally.  “It is time to play large ball, not small ball.”  House Democratic leader Representative Nancy Pelosi (D-CA) said, “I could never support any arrangement that reduced benefits for Medicare.  Absolutely not,” she said,” emphasizing a position she and other Democrats had laid out at their own meeting with the president.   Given Medicare’s size — nearly $500 billion a year — any deal on cutting future deficits is likely to include savings from the program, and may include the benefit cuts that most Democrats oppose.

The Obama administration has come out against the Medicare reforms in the House plan –  authored by House Budget Committee Chairman Paul Ryan (R-WI).  The Senators insist that this is a non starter, and stressed that they must not be a point of negotiation during the ongoing debt ceiling talks.  Despite the Democrats’ opposition, Senate Minority Leader Mitch McConnell (R-KY) insists that the Medicare reform plan will be “on the table” in negotiations.  “We are going to discuss what ought to be done,” McConnell said.  “I can assure you that to get my vote to raise the debt ceiling, for whatever that is worth…Medicare will be a part of it.”

Some Republicans are backing away from Ryan’s proposal.  For example, presidential candidate Newt Gingrich had egg on his face after suggesting that the plan is “radical… right-wing social engineering,” Gingrich’s explanations proved too little, too late for many conservatives, who continue to hammer the former House speaker for his gaffe.

In an op-ed piece for the San Francisco Sentinel,  Chrystia Freeland writes that “The political theater in the United States this week has been all about the ‘debt ceiling’:  Congress voting not to increase it; President Barack Obama and the House Republicans are meeting to discuss it; and the Treasury warning that failure to raise it will bring economic apocalypse for the United States and the world.  Elites like to accuse ordinary Americans of a lack of political sophistication, but everyone from Main Street to Wall Street is savvy enough to understand that so far, the fighting over the ceiling is pure Kabuki.  As with the budget deal earlier this year, the real negotiating is unlikely to happen until the very last minute.  But everyone also understands that this summer game of brinkmanship matters because it is a proxy war being fought over a very real problem:  the growing national debt and deficit.  At just under 60 percent of gross domestic product, the U.S. national debt is lower than that of France, Germany and Britain.  And the rest of the world still seems delighted to lend the United States money on historically generous terms.”

There’s More in Healthcare Reform for Small Business Than They May Think

Tuesday, June 8th, 2010

Healthcare reform gives small business owners more financial help than they expect.  Small businesses might be surprised to learn that they will receive more in state and federal tax credits than they expected once healthcare reform legislation goes into full effect.  According to Mark Mundaca, a Treasury Department assistant secretary for tax policy, a business’ credit will not be cut if it also received a healthcare tax credit or subsidy from the state.

Mundaca noted that small businesses can receive credits for traditional healthcare coverage, as well as add-on dental, vision and other limited-scope insurance.  As many as four million small businesses are believed to quality for this tax credit.  It is available to them starting this year, although the companies will have to wait to file their taxes in 2011 to receive the tax credit.  The Treasury Department’s guideline was issued shortly after the National Federation of Independent Business (NFIB) joined a lawsuit with 20 states seeking to overturn the healthcare law.

Dan Danner, NFIB president and CEO, says “Small-business owners everywhere are rightfully concerned that the unconstitutional new mandates, countless rules and new taxes in the healthcare law will devastate their business and their ability to create jobs.”  Countering Danner’s argument, Karen Mills, administrator of the Small Business Association, said that the majority of small businesses “are excited about this tax credit.  NFIB knows that healthcare is No. 1 concern of small businesses” and the new law is designed to help them.