Associated Press –

September 25, 2013:

You might be pleased with the low monthly premium for one of the new health insurance plans under President Barack Obama's overhaul, but the added expense of copayments and deductibles could burn a hole in your wallet.

An independent analysis released Wednesday, on the heels of an administration report emphasizing affordable premiums, is helping to fill out the bottom line for consumers.

The annual deductible for a mid-range “silver” plan averaged $2,550 in a sample of six states studied by Avalere Health, or more than twice the typical deductible in employer plans. A deductible is the amount consumers must pay each year before their plan starts picking up the bills.

Americans looking for a health plan in new state insurance markets that open next week will face a trade-off familiar to purchasers of automobile coverage: to keep your premiums manageable, you agree to pay a bigger chunk of the repair bill if you get in a crash. Except that unlike an auto accident, serious illness is often not a self-contained event.

Avalere also found that the new plans will require patients to pay a hefty share of the cost — 40 percent on average — for certain pricey drugs, like the newer specialty medications used to treat intractable chronic diseases such as rheumatoid arthritis and multiple sclerosis. On the other hand, preventive care will be free of charge to the patient.

“Consumers will need to balance lower monthly premiums against the potential for unpredictable, expensive out-of-pocket costs in plans with higher deductibles,” said Caroline Pearson, a vice

president of the private market analysis firm. “There is a risk that patients could forgo needed care when faced with high up-front deductibles.”

Responding to the Avalere study, the Obama administration acknowledged the new plans aren't as generous as employer coverage, but said they nonetheless represent a big improvement over currently available individual policies, which can have gaps in coverage and even larger out-of-pocket costs.

Also on Wednesday, the administration unveiled premiums and plan choices for 36 states where the federal government is taking the lead to cover uninsured residents. Insurance markets that go live Oct. 1 will offer subsidized private coverage to people

who do not have health insurance on the job, including the uninsured and those who currently buy their own policies.

Before new tax credits that work like a discount for most consumers, premiums for a mid-range “silver” benchmark plan will average $328 a month nationally for an individual, the administration report found. Beneath that average are wide differences for individuals, depending on where they live, how much they make, and other factors.

Health and Human Services Secretary Kathleen Sebelius said the average consumer will be able to choose among more than 50 plan options.

“For millions of Americans, these new options will finally make health insurance work within their budgets,” Sebelius told reporters in a preview call Tuesday. The markets — called “exchanges” in some states — are the only place where consumers will be able to get a tax credit for health insurance.

HHS estimated that about 95 percent of consumers will have two or more insurers to choose from. And the administration says premiums will generally be lower than what congressional budget experts estimated when the legislation was being debated. About one-fourth of the insurers participating are new to the individual coverage market, a sign that could be good for competition.

But averages can be misleading. When it comes to the new health care law, individuals can get dramatically different results based on their particular circumstances.

Where you live, the plan you pick, family size, age, tax credits based on your income, and even tobacco use will all impact the bottom line. All those variables could make the system hard to navigate.

For example, the average individual premium for a benchmark policy known as the “second-lowest-cost silver plan” ranges from a low of $192 in Minnesota to a high of $516 in Wyoming. That's the sticker price, before tax credits.

In the three states with the highest uninsured population, the benchmark plan will average $373 in California, $305 in Texas, and $328 in Florida. Differences between states can be due to the number of insurers competing and other factors.

“One surprise is Texas,” said Larry Levitt of the Kaiser Family Foundation. “That is a state that has put up roadblocks to implementation, but the premiums there are below average.”

The second-lowest-cost silver plan is important because tax credits are keyed to its cost in local areas.

But consumers don't have to take silver. They can pick from four levels of coverage, from bronze to platinum. All the plans cover the same benefits and cap annual out-of-pocket expenses at $6,350 for an individual, $12,700 for families.

The big difference is cost sharing through annual deductibles and copayments. Bronze covers 60 percent of expected costs; silver, 70 percent, on up to platinum at 90 percent. Bronze plans have the lowest premiums and the highest cost sharing.

As the Avalere study

showed, premiums aren't the only factor consumers should weigh.

The flurry of new reports comes as the White House swings into full campaign mode to promote the benefits of the Affordable Care Act to a skeptical public. Congressional Republicans, meanwhile, refuse to abandon their quest to

derail “Obamacare” and are flirting with a government shutdown to force the issue.

Starting Jan. 1, virtually all Americans will be required to carry health insurance or face fines. At the same time, the health care law will prohibit insurance companies from turning away people in poor health, or charging them more.

Firms won't be fined

for not telling workers about Obamacare
Reuters by Lewis Krauskopf –

September 12, 2013:

Employers will not face a penalty if they fail to inform their workers by October 1 about changes under President Barack Obama's healthcare law, the administration said, in what will likely come as a relief to many small businesses.

The federal government is requiring businesses to notify employees about the new health insurance marketplaces created by the law that are set to start enrolling millions of Americans beginning October 1.

Employers are also required to inform employees that they may be able to get lower-cost insurance on the exchanges, but if they buy insurance on the exchange, they may lose their employer contribution.

Media reports have said that many small businesses had been unaware of the requirement, and therefore were at risk of potential penalties.

A notice posted on the Department of Labor's website on Wednesday said employers cannot be fined for failing to provide such notice.

“If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice,” the Labor Department said, under the heading “FAQ on Notice of Coverage Options.”

Businesses covered by the FLSA have annual sales of at least $500,000.

A Labor Department spokesperson confirmed on Thursday that businesses faced no consequences for missing the deadline.

Asked why the department posted the notice, the spokesperson said: “The reason all the FAQs go out is to provide further clarity.”

Some labor attorneys had been speculating that businesses that miss the deadline would face fines of $100 day per worker, in line with other penalties under the Affordable Care Act, said John Barlament, an employee benefits attorney with the firm Quarles & Brady.

“It's helpful for employers to have that clarification,” Barlament said. “There was some uncertainty before about whether or not there was a penalty.”

Barlament said most large employers were aware of the notification requirement.
“But among smaller clients you do see a little bit less awareness of this, and some of them probably would have been caught a little flat-footed here,” Barlament said.

Insurers in California's new health insurance exchange are holding down premiums by limiting choices, raising concerns that patients will struggle to get care.

By Chad Terhune, Los Angeles Times
September 14, 2013, 6:34 p.m.

The doctor can't see you now.

Consumers may hear that a lot more often after getting health insurance under President Obama's Affordable Care Act.

To hold down premiums, major insurers in California have sharply limited the number of doctors and hospitals available to patients in the state's new health insurance market opening Oct. 1.

New data reveal the extent of those cuts in California, a crucial test bed for the federal healthcare law.

These diminished medical networks are fueling growing concerns that many patients will still struggle to get care despite the nation's biggest healthcare expansion in half a century.

Consumers could see long wait times, a scarcity of specialists and loss of a longtime doctor.

“These narrow networks won't work because they cut off access for patients,” said Dr. Richard Baker, executive director of the Urban Health Institute at Charles Drew University of Medicine and Science in Los Angeles. “We don't want this to become a roadblock.”

To see the challenges awaiting some consumers, consider Woodland Hills-based insurer Health Net Inc.

Across Southern California the company has the lowest rates, with monthly premiums as much as $100 cheaper than the closest competitor in some cases. That will make it a popular choice among some of the 1.4 million Californians expected to purchase coverage in the state exchange next year.

But Health Net also has the fewest doctors, less than half what some other companies are offering in Southern California, according to a Times analysis of insurance data.

In Los Angeles County, for instance, Health Net customers in the state exchange would be limited to 2,316 primary-care doctors and specialists. That's less than a third of the doctors Health Net offers to workers on employer plans. In San Diego, there are only 204 primary-care doctors to serve Health Net patients.

Other major insurers have pared their list of medical providers too, but not to Health Net's degree. Statewide, Blue Shield of California says exchange customers will be restricted to about 50% of its regular physician network.

In response, California officials have been pressing Health Net and other insurers to add more doctors since companies filed their initial rosters in May. The state exchange, Covered California, says it will monitor enrollment closely once it begins next month and it's prepared to step in if problems arise.

“Our interest is in assuring everyone enrolled in a plan has ready access to the clinicians they need,” said Peter Lee, executive director of Covered California. “That means if a plan can't serve patients, we'll close it down from taking new enrollment. That is in some ways the nuclear option.”

Rather than mere head count, officials say they are scrutinizing what capacity physicians have to accept new patients. And to assist consumers, California will enable people to search for specific doctors online during enrollment to determine what, if any, health plans they will be part of in Covered California.

“Does the doctor have room for one more patient or 40 patients? It's about available seats,” Lee said. “We want to make sure every network has enough doctors.”

Health Net says price will probably matter most to the uninsured and people who buy their own health insurance now, so it built a narrow network to serve those “value seekers.”

“We have more than enough doctors for our projected enrollment through 2014, and we have time to adjust if it becomes necessary,” Health Net spokesman Brad Kieffer said. “We continue reaching out to providers, and we are bringing more on board.”

In recent months, the top priority for state officials and insurers has been affordable premiums. A smaller panel of doctors and hospitals generally yields lower rates because insurers can negotiate better discounts with providers who receive more patients.

Insurers and some consumer advocates think people are willing to trade some choice in order to pay less. More employers have been adopting these narrower networks in recent years to trim their own healthcare bills.

The California Medical Assn., which represents more than 37,000 doctors statewide, thinks the state is underestimating the difficulties ahead.

Based on its research, the organization is skeptical of the state's claim that its health plans will cover about 80% of all California physicians. Other doctors worry about the effect on certain Latino and African American communities that have been historically underserved.

Covered California says it's still compiling a list of all providers for the 12 health insurers in the exchange.

Supporters of the healthcare law say these types of problems are inevitable in rolling out such a massive program. Overall, they say, millions of consumers stand to benefit from guaranteed coverage regardless of preexisting medical conditions and the protection from financially crippling medical bills.

But some health policy experts say that medical costs will continue to escalate if patients can't see their doctor regularly and get the follow-up care they need for chronic conditions such as diabetes. Similar concerns over patient access have surfaced in other states such as Maine and Wisconsin.

“We are nervous about these narrow networks,” said Donald Crane, chief executive of the California Assn. of Physician Groups. “It was all about price. But at what cost in terms of quality and access? Is this contrary to the purpose of the Affordable Care Act?”

The federal law requires exchange plans to include enough providers so

that services are available “without unreasonable delay.” Likewise, state law sets various requirements for “network adequacy” so patients have enough doctors and hospitals nearby.

The differences in network size are noticeable across Southern California. Health Net has 920 physicians in Orange County, compared with more than 2,500 for Blue Shield, according to company data. Health Net has fewer than 800 doctors in San Diego County, while nearly 3,000 physicians are available in an Anthem Blue Cross plan.

In addition to doctors, some big-name hospitals may be left out. A spokesman for Cedars-Sinai Medical Center said the hospital has received many calls from patients who were worried about keeping their access to the hospital and its affiliated doctors in the new health plans next year.

Cedars-Sinai is available only on two lower-priced Health Net plans in the state-run market, according to the hospital and insurer. Anthem Blue Cross says that it's the only insurer that includes UCLA Medical Center and other UC facilities statewide.

In some ways, insurers are mimicking HMO giant Kaiser Permanente, which has limited patients to its own hospitals and doctors for decades. Kaiser is offering its full slate of in-house providers in the exchange, totaling more than 5,700 doctors in the Los Angeles area.

Newly released data show the pricing power of these tighter networks. In Los Angeles County, Health Net is consistently the lowest-cost option for a mid-level Silver plan across various age groups.

A family of four in Norwalk earning $65,000 annually would pay $384 a month for a Health Net policy, after taking into account a federal subsidy based on their income. For a policy with identical benefits, Blue Shield was next at $477 a month and Kaiser was the most expensive at $602.

The cheapest Silver plan for a couple in their mid-50s earning nearly $100,000 a year was also Health Net at $781 a month. An Anthem policy costs $897.

Consumers can check prices at http://www.coveredca.com.

“Health Net will get a lot of business with those rates,” said Glen Futterman, a health insurance broker in Woodland Hills. “But no one mentions you might not be able to see your doctor.”

Companies sweating Obamacare tax—and acting on it: Study

CNBC.com | Wednesday, 21 Aug 2013 | 11:53 AM ET

Mid- and large-sized companies overwhelmingly expect health-care costs to increase under Obamacare—and most are eyeing possible changes to their health insurance offerings because of a looming excise tax for pricier plans under the health-care reform law, a new survey of employers finds.

In fact, 40 percent of 420 companies surveyed by Towers Watson said they will be changing their insurance plans' designs in 2014 in light of the coming excise tax as well as to control employee-related health costs.

And nearly 60 percent of the companies view private health insurance exchanges as a possible way to control their health-care and administrative costs by shifting the work of insuring their workers off

to those exchanges in the future.

But most of those companies—which collectively employ 8.7 million people—don't have firm near-term plans to do so.

The study also found those same companies are increasingly unlikely to offer their employer-sponsored plan for retirees older than age 65 as Obamacare state insurance exchanges go into effect, and as Medicare remains available to those people.

The number of employers either very or somewhat likely to discontinue such plans for those retirees grows from 25 percent in 2014 to 44 percent in 2015, according to Towers Watson, the global professional services company, which released its study Wednesday.

But the same study found a very strong majority of those companies—82 percent—see their ability to offer subsidized health benefits to existing workers as an “important” as part of their “employee value proposition” for 2014, according to the study.

And 98 percent of the employers have no definite plans to discontinue health-care coverage in 2014 and 2015 and direct their full-time workers to the state health insurance exchanges.

“Most companies very much still see health-care benefits as a core offering,” said Ron Fontanetta, a senior health-care consultant at Towers Watson.

“It's a very visible benefit, and it garners a lot of attention among executives, in part because it's very visible to employees and also because it costs a lot,” Fontanetta said.

Companies taking action

However, the Towers Watson study is being released on the same day that it was revealed that delivery giant United Parcel Service told white-collar employees two months ago that UPS was excluding 15,000 working spouses from the Atlanta-based company's health plan next year because of increased medical casts, and “costs associated with the Affordable Care Act,” according to a memo cited by the Kaiser Health News service.

UPS' decision, according to Kaiser Health, is based on the ability of the affected employees' spouses to obtain insurance coverage elsewhere.

A UPS spokesman told Kaiser Health that the company expects to save about $60 million per year with that decision.

The Towers Watson study, in a reflection of the high costs that UPS and other companies are identifying and reacting to, found that the chief financial officers of the companies surveyed are increasingly involved in decision-making for those businesses' health-care strategies.

When the survey asked companies to what extent their CFOs are more involved in such decisions than they were three to five years ago, 46 percent of the companies said it was to either a great or significant extent.

Fontanetta said those CFOs aren't necessarily sitting down with benefits managers and designing health-care offerings. But, he said, “They are increasingly asking questions about 'where are we taking our future strategy? how does the challenge of offering health care reconcile with our broader financial goals as an organization?'”

“They want to understand, increasingly, what are the different strategic pathways [the companies] might take,” Fontanetta said.

Looming excise tax

At the forefront of many of those CFOs' minds, and the minds of other executives at the surveyed companies, is the looming threat of an excise tax on benefits under a provision of the Affordable Care Act that goes into effect in 2018.

That tax on the companies will initially be on health-care coverage whose aggregate cost for workers exceed $10,200 for self-only coverage and $27,500 for other coverage.

The tax is 40 percent of the amount that the worker pays in excess of those limits. Despite the fact that the tax doesn't kick in for more than four more years, it is already affecting having an effect on decision-making.

A total of 60 percent of employers said that the excise tax will have either significant or moderate influence on their health-care benefits strategy in 2014 and 2015, the study found.

“This is a big deal,” Fontanetta said of those results. “It's one of the most important findings.”

He noted that more than 60 percent of the companies expect to be subject to the excise tax, absent any changes in their health-care offerings that would avoid it.

“But we don't think companies are going to sit tight,” Fontanetta said.

—By CNBC's Dan Mangan. Follow him on Twitter @_DanMangan.

Yet Another White House Obamacare Delay: Out-Of-Pocket Caps Waived Until 2015

Avik Roy, Contributor, FOrbes Magazine August 13, 2013

First, there was the delay of Obamacare’s Medicare cuts until after the election. Then there was the delay of the law’s employer mandate. Then there was the announcement, buried in the Federal Register, that the administration would delay enforcement of a number of key eligibility requirements

for the law’s health insurance subsidies, relying on the “honor system” instead. Now comes word that another costly provision of the health law—its caps on out-of-pocket insurance costs—will be delayed for one more year.

According to the Congressional Research Service, as of November 2011, the Obama administration had missed as many as one-third of the

deadlines, specified by law, under the Affordable Care Act. Here are the details on the latest one.

Obamacare contains a blizzard of mandates and regulations that will make health insurance more costly. One of the most significant is its caps on out-of-pocket insurance costs, such as co-pays and

deductibles. Section 2707(b) of the Public Health Service Act, as added by Obamacare, requires that “a group health plan

and a health insurance issuer offering group or individual health insurance coverage may not establish lifetime limits on the dollar value of benefits for the any participant or beneficiary.” Annual limits on cost-sharing are specified by Section 1302(c) of the Affordable Care Act; in addition, starting in 2014, deductibles are limited to $2,000 per year for individual plans, and $4,000 per year for family plans.

There’s no such thing as a free lunch. If you ban lifetime limits, and mandate lower deductibles, and cap out-of-pocket costs, premiums have to go up to reflect these changes. And unlike a lot of the “rate shock” problems we’ve been discussing, these limits apply not only to individually-purchased health insurance, but also to employer-sponsored coverage. (Self-insured employers are exempted.)

These mandates have already had drastic effects on a number of colleges and universities, which offer inexpensive, defined-cap plans to their healthy, youthful students. Premiums at Lenoir-Rhyne University in Hickory, N.C., for example, rose from $245 per student in 2011-2012 to between $2,507 in 2012-2013. The University of Puget Sound paid $165 per student in 2011-2012; their rates rose to between $1,500 and $2,000 for 2012-2013. Other schools have been forced to drop coverage because they could no longer afford it.

According to the law, the limits on out-of-pocket costs for 2014 were $6,350 for individual policies and $12,700 for family ones. But in February, the Department of Labor published a little-noticed rule delaying the cap until 2015. The delay was described yesterday by Robert Pear in the New York Times