Tag Archives: federal exchange

Obamacare and The Individual Mandate Tax Dilemma

There are dozens of ways to escape Obamacare’s individual mandate tax — but good luck figuring that out come tax season.

Tens of millions of Americans can avoid the fee if they qualify for exemptions like hardship or living in poverty, but the convoluted process has some experts worried individuals will be tripped up by lost paperwork, the need to verify information with multiple sources and long delays that extend beyond tax season.

“It’s not going to be pretty,” said George Brandes, vice president of health care programs at Jackson Hewitt, a tax prep firm. “Just because you theoretically qualify for hardship, or another exemption, doesn’t mean you’re going to get it.”

The worries may foreshadow a messy tax season next year as the one in 10 Americans who remain uninsured calculate their tax bill for the first time under Obamacare’s individual mandate.
Those without health insurance will have to cough up $95 per person or 1 percent of their income, whichever is greater. That penalty eventually jumps to $695 or 2.5 percent.

The White House expanded the list of exemptions allowing the uninsured to bypass the penalty for legitimate reasons, including religious restrictions, falling on rocky times or a death in the family. Another big out created after the controversy over canceled health plans was the so-called affordability exemption that allows people to opt out if premiums are still not affordable.

The Congressional Budget Office expects 23 million of the 30 million Americans who remain uninsured in 2016 to qualify for exemptions. It’s part of the reason the CBO in June downgraded from 6 million to 4 million the number of people it estimates will pay the penalty.
The uninsured have two ways to opt out: The easiest way is fill out a new tax form for those exemptions that don’t require Obamacare marketplace approval. Some will be simple, including the exemption for being uninsured for under three months or those living below a certain income — about $10,150 for singles and $20,300 for married couples.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

 

Court Rules: No Subsidies for Individuals for Health Insurance

A federal appeals court has ruled the Obama administration cannot subsidize insurance premiums for nearly 7 million Americans, dealing a serious blow to the Affordable Care Act (this does not impact state funded exchanges like New York and Connecticut). The ruling sets up an almost-certain appeal to the U.S. Supreme Court.

Two judges with the D.C. Circuit Court of Appeals in Washington ruled Tuesday that the text of the reform law clearly forbids income-tax subsidies to go to low- and middle-income Americans who use one of the 34 federally run insurance exchanges. The tax subsidies have been flowing since the beginning of the year, based on a 2012 interpretation of the law by the IRS.

The actual text of the law says the sliding-scale tax credits are only available for coverage purchased “though an exchange established by the state,” which only 16 states did. IRS officials had claimed the imprecise wording of the law contradicted Congress’ overall intent to expand insurance coverage as widely as possible. But that argument did not win the day Tuesday.

“Because we conclude that the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges “established by the State,” we reverse the district court and vacate the IRS’s regulation,” the two-member majority wrote.

The ruling was the second dose of bad news for the Democrat-passed reform law this summer. Last month, the Supreme Court dealt a major symbolic blow to the law by ruling in Burwell v. Hobby Lobby Stores that the administration could not force the owners of closely held corporations to defy religious objections and cover contraceptives in their employees’ insurance plans. The ruling prompted new legislation to ensure contraceptives are covered without cost for millions of women, but the future of that proposal is far from certain.

Tuesdays ruling poses a much greater financial threat to the law’s internal function, but the decision was not altogether surprising.

During oral arguments in March, the judges seemed to be split along the partisan lines that eventually became the 2-1 vote on Tuesday, with Republican-appointed judges Thomas Griffith and A. Raymond Randolph voting for the plaintiffs and Democrat-appointed judge Harry Edwards siding with Obama’s IRS.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

The Obama Adminstration Setting Standards for Health Plan Networks

The Obama administration and state insurance regulators are developing stricter standards to address the concerns of consumers who say that many health plans under the Affordable Care Act have unduly limited their choices of doctors and hospitals (mostly individual, not group plans), leaving them with unexpected medical bills. Carriers are looking to further stratify their networks in their 2015 plan offerings, so plans are available at numerous price-points to attract consumers with varying needs.

Federal officials said the new standards would be similar to those used by the government to determine whether Medicare Advantage plans had enough doctors and hospitals in their networks. These private plans, sold by companies like UnitedHealth and Humana, provide comprehensive care to 16 million of the 54 million Medicare beneficiaries.

States are free to adopt additional standards of their own, and Washington did so in late April.

“I heard from many consumers who were upset to find their health plan no longer included their trusted doctor or hospital,” said Mike Kreidler, the insurance commissioner of Washington State. “Some people discovered this only after they had enrolled.”

Mr. Kreidler said the new standards were needed to deal with “an emerging trend toward narrower networks of medical providers.”

If a network is viewed as inadequate, patients may need to seek care from doctors outside the network, incurring thousands of dollars in costs not covered by insurance.

New York adopted a law this year to protect consumers against such “surprise medical bills.” Before treatment, doctors must tell patients what insurance they accept. If an insurer does not have a doctor with the expertise to treat a patient’s problem, the patient can go to providers outside the network at no additional cost.

The National Association of Insurance Commissioners, representing state officials, is updating its 18-year-old model law to add new consumer protections, after finding that some insurers tried to cut costs by excluding children’s hospitals and academic medical centers. Cancer treatment centers say they, too, have been excluded from many health plan networks.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

No Need to Visit HealthCare.gov to Renew Insurance

The Obama administration announced Thursday that most people would be able to renew subsidized health insurance coverage without filing an application and without going back to HealthCare.gov, the website that frustrated millions of consumers last fall.

But some people will have to go into the marketplace again — if, for example, their income has changed or they want to shop for a better deal in 2015.

Under rules proposed Thursday by the administration, most people who purchased health plans in the federal insurance marketplace could automatically renew their coverage and premium subsidies provided under the Affordable Care Act.

More than 5.4 million people selected health plans in the federal exchange for 2014, and 86 percent of them were found eligible for subsidies that lower the cost.

If millions of people had to enroll again through HealthCare.gov it could have proved a logistical nightmare for many consumers, insurers and federal officials. “There had been talk of everyone having to re-enroll, which would have been a disaster,” said an insurance industry expert who meets often with federal officials and requested anonymity so as not to jeopardize those relationships.

Sylvia Mathews Burwell, the new secretary of Health and Human Services, said the administration was determined to minimize the hassles in the next open enrollment period, which runs from Nov. 15 to Feb. 15, 2015.

“We are working to streamline the process for consumers wishing to remain in their current plan,” said Ms. Burwell, who issued the rules encouraging automatic renewal.

Aaron Albright, a spokesman at the Centers for Medicare and Medicaid Services, which runs the federal exchange, said: “At least 95 percent of consumers in the marketplace will not have to do anything to renew their plans and their financial assistance. They won’t have to do anything to re-enroll.”

Federal officials will specify the contents of notices that insurers will send consumers later this year. A typical notice says: “Your health insurance coverage is coming up for renewal. You will be automatically re-enrolled and can keep your current coverage.”

The proposed rules show how the Affordable Care Act is becoming entwined in the fabric of national health policy and government regulation. Even as politicians continue fighting over the law, and many Republicans still hope to roll it back, but the Obama administration is writing rules to keep the program in operation for years.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Five Million Uninsured People Gained Insurance Because of Obamacare

According to the Department of Health and Human Services, about 87% of people who signed up through federal health care exchanges were previously uninsured.

Here’s how the percentage was determined: Of the 5.45 million people who signed up through the federal exchange, 5.18 million (or 95%) applied for financial assistance in their insurance plans. In doing so, they were required to answer a question about whether they already had health insurance. Only about 695,000 people (13%) indicated they did have coverage.

To read more, click here.

Jeffrey R. Ungvary

President

Jeffrey R. Ungvary

Tax Subsidies the New Challenge for Health Law

A new argument that may cause woes to Obamacare came to United States Court of Appeals for the District of Columbia Circuit. The plaintiffs state the language in the Affordable Care Act makes subsidies available only to people who buy insurance through marketplaces established by states.

Stuart F. Delery, an assistant attorney general, told the appeals court on Tuesday that Congress intended for subsidies to be available to low- and moderate-income people regardless of whether they bought insurance on a federal or state exchange.

To read more, click here.

Jeffrey R. Ungvary

President

Jeffrey R. Ungvary