TPG’s Healthcare Reform Review: October, 2014
“Mid-Terms”
Welcome to the tenth edition of TPG’s Healthcare Reform Review, a forum to keep our current clients, prospective clients, and candidates apprised of the ever-changing landscape of healthcare in a post-reform world. Tracking the iterations, implementations, extensions and exemptions of the Patient Protection and Affordable Care Act of 2010 (PPACA) can be a full time job. Each new day seems to bring a wave of information which needs to be fully digested before the next news cycle starts. Again, it is our intent to update this newsletter monthly through the end of 2014 to keep you well-informed of the latest developments and their implications. We thank you in advance for your interest, and welcome your comments and questions throughout the year.
Halloween is October 31st yet it appears the real “Trick or Treat” doesn’t happen until November 5th, the day after the mid-term elections. Earlier this year, the open enrollment period for the healthcare exchanges were pushed back until after the election. As a result, the cost of insurance policies for individuals going to the exchanges have been hidden until the 2014 elections are in the books. PPACA remains one of the most controversial topics in politics today, even with the rise of international issues, Ebola and the sluggish economy. The results of this election will have a significant impact on how the law will be amended to address some of the glaring weaknesses within the body of the law. All of this at a time when the Employer Mandate is set to go into effect January 1st, a mere two months away.
Two of the most pressing issues regarding PPACA which will become the focus of talking points after the election will be the subsidies and required coverage. The first issue will be the loss of subsidies to those individuals whose employers offer “affordable” plans which qualify under the law as meeting minimum essential coverage. As the law is written, these individuals will no longer be eligible for subsidies to purchase insurance on the exchanges, even if they refuse their employers coverage. The second issue involves a loophole in minimum essential coverage. While piecing the law together in a fairly toxic political climate, the architects of PPACA forgot to include hospitalization as part of “essential coverage.” This has given rise to “skinny” plans which are more affordable, but do not include the catastrophic coverage for a hospital stay. We will definitely hear more about these issues in the new year.
Now for some good news. According to the Health Insurance Report, “All counties in states covered by the federally facilitated ACA marketplace will have access to coverage in 2015.” This means that during the open enrollment period (11/15/14 – 2/15/15), individuals visiting the HealthCare.gov website will have the choice of at least one plan in their county within the states operating through the federal exchange. Many enhancements have been made to the website to avoid the major technological issues which occurred during the first open enrollment period last year. This will be helpful as the Congressional Budget Office estimates that a total of 13 million people will be enrolled under the law in 2015, roughly a 78% increase over 2014 enrollment. Re-enrollment under existing plans remains a question mark as this is the first time many enrollees will hear from insurers about the availability of their plans, any changes in coverage, and 2015 premiums.
One of the topics we have brought up on multiple occasions in this newsletter has been the lack of education to the general public regarding how insurance plans work. Within the past two weeks, I have found two recent articles addressing health insurance literacy. A large segment of the population has never had to deal with deductibles, copays, health networks, etc. It is estimated that basic insurance questions were the major cause of the flood of telephone calls received by the marketplace assisters once the technical glitches were addressed.
Jean Card of US News & World Reports wrote in an article that “Americans know perilously little about how health insurance works.” She further wrote that “health insurance is a product that is more often purchased by the government or our employer” as a reason why so few people understand the intricacies of insurance. If the Explanation of Benefits form that is received from insurance companies with the standard “This Is Not A Bill” language on it is any indicator of the need for education, we have a long way to go in this area. One of the benefits of the law may be that Americans will take some ownership of their health choices, not just their insurance. Once the connection is made between costs and benefits, more reforms may be necessary.
The final focus of this month’s newsletter comes from an article by Andrew Kitchenman of the NJ Spotlight. He believes that the effects of PPACA on small business owners will become clearer over the next two years as the law has changed the way employers shop for health insurance plans. Many mid-size companies are switching from traditional, fully funded commercial insurance plans and joining larger companies in having their own self-funded plans. Plan decisions are being driven by available networks, minimum values and ultimate costs to employers and employees alike. The Small Business Health Options Plan “SHOP” was the first aspect of PPACA to be delayed last year when it didn’t work on the website. This program was managed by insurance companies the first year and there were very few takers. Time will tell how these plans are accepted in the marketplace.
In closing, we continue to face a myriad of questions regarding the implementation of PPACA in its second year of the exchanges and the first year of the Employer Mandate. On November 4th, we have the opportunity to have our voices heard through the election process. No matter where you stand on the issues, our representative form of government only works when we choose officials who write our laws, interpret them and carry them out. What makes America great is that we have a government of the people, by the people, for the people. Please take the time to cast your ballot next Tuesday. Thank you.
Thomas E. Readdy
President
The Performance Group
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