Tag Archives: Health Care Inequalities

ACA Rules for Foster Children

Nathan Cox-Reed has a toothache.

He thinks he needs a root canal, but the full-time student, 22, is uninsured. He can’t afford a trip to the dentist.

“I’m only working 30 hours a week. I wouldn’t have enough money to do something like that,” said Cox-Reed, a film and video student at Columbia College in Chicago.

While many young adults are now covered by the Affordable Care Act, able to remain on their parents’ insurance until age 26, the rules are different for those like Cox-Reed, who grew up in the foster care system.

There are more than 400,000 children in foster care in the United States, the Department of Health and Human Services said last year. All are provided with health care coverage as long as they are wards of the state.

When foster kids turn 18, they age out of the system and instantly lose their coverage.

That’s about to change, when another part of Obamacare takes effect on January 1, 2014. Medicaid coverage will be extended for former foster youth until they reach 26, as long as the individual was in foster care and enrolled in Medicaid until the age of 18.

“I definitely think it would be a big relief, and I would definitely feel more secure as far as my health goes,” Cox-Reed said.

But there’s a catch. Cox-Reed has dreams of traveling across the nation and becoming a filmmaker. A future relocation could jeopardize his medical coverage.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

IRS Releases 2016 Health Savings Account Limits

The Internal Revenue Service (IRS) has announced the 2016 inflation-adjusted amounts for Health Savings Accounts (HSAs) as determined under the Internal Revenue Code.

Annual Contribution Limitation
For calendar year 2016, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,350. The annual limitation on HSA deductions for an individual with family coverage under a high deductible health plan is $6,750.

High Deductible Health Plan
For calendar year 2016, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.

You may view the IRS Revenue Procedure announcing the 2016 amounts by clicking here.

Be sure to check out our section on Health Savings Accounts for more on HSAs.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Wellness Programs at Work Clarified

Federal regulators Thursday proposed limits on how employers use financial penalties and rewards to nudge staff to participate in fast-growing workplace wellness programs.

The Equal Employment Opportunity Commission — which enforces laws against discrimination — said Thursday that employers can use financial incentives up to 30 percent of the cost of premiums for single coverage, provided certain other safeguards are met.

Business groups and advocates for people with disabilities are closely watching the issue. Workplace programs that encourage workers to lose weight, quit smoking, get active and better manage stress are spreading throughout American businesses. Employers look for ways to cut costs associated with chronic illnesses, which are often tied to lifestyle.

The 30-percent standard was set in President Barack Obama’s health care overhaul law.

For example, if the total premium paid by the employer and employee for single coverage is $5,000, rewards or penalties for participating in a wellness program under that plan cannot exceed $1,500.

After the health care overhaul passed in 2010, questions arose about potential conflicts with the Americans with Disabilities Act, or ADA, which dates back to 1990 and protects people with chronic conditions against workplace discrimination. That law says wellness programs have to be voluntary.

The employment commission is trying to balance how the two laws can work together.

The proposed regulation says that wellness programs are permitted under the ADA, but employers cannot use them to discriminate based on a worker’s disability. Many wellness programs require employees to complete a health risk assessment questionnaire, and talk the results over with a counselor. Some require employees to take specific actions, such as losing weight or getting blood pressure down to recommended levels.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Shopping Limited Networks to Save Money

In all the turmoil in health care, one surprising truth is emerging: Consumers seem increasingly comfortable trading a greater choice of hospitals or doctors for a health plan that costs significantly less money.

“Are they willing to trade choice and access for price? There’s no question about that,” said Mark Newton, the chief executive of Swedish Covenant Hospital, a Chicago hospital that recently teamed with an Illinois insurer, Land of Lincoln Health, to offer a health plan.

This year, nearly half of the plans offered on public health care exchanges are so-called narrow network options, which sharply limit the medical providers whose services will be covered, new data shows. Furthermore, nearly a fifth are considered “ultranarrow networks,” which offer even fewer choices. At the same time, more employers are also embracing the plans for their workers, largely as a way to lower health care costs.

The data, gathered by the McKinsey Center for U.S. Health System Reform, is significant, given early criticism from some providers and patients who reacted to these plans last year by arguing they were like the overly restrictive health maintenance organizations, or H.M.O.s, of the 1990s, which were ultimately rejected by consumers.

The financial strategy is relatively simple. Insurers say one way to lower the price of a plan is to limit the number of hospitals and doctors in their networks. They can then ask providers to discount their prices in return for a potentially higher volume of patients; some also say they are trying to pick a select group that provides better care.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Fringe Benefits and Same-Sex Marriages

Special Updates: Same-sex couples, legally married in jurisdictions that recognize their marriages,will be treated as married for all federal tax purposes (including employee benefits). More specific IRS guidance includes: 

Agency guidance released by the U.S. Treasury Department and the IRS addresses the recognition of same-same marriage in the wake of the U.S. Supreme Court ruling that invalidated part of the Defense of Marriage Act (DOMA), which defined “spouse” as a person of the opposite sex who is a husband or wife for purposes of federal law.

  • Same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for all federal tax purposes (including employee benefits), according toRevenue Ruling 2013-17.
  • The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage. The ruling does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognized under state law.
  • An employee who purchased same-sex spouse health coverage under his or her employer’s plan on an after-tax basis may treat the amounts paid for that coverage as pre-tax and excludable from income, and may be able to claim a refund of income taxes paid on the premiums by filing an amended return.
    • Procedures for correcting overpayments related to payroll taxes paid on previously-taxed health insurance and fringe benefits provided to same-sex spouses are available in IRS Notice 2013-61 
  • Special Note: The IRS has issued a set of questions and answers, effective December 16, 2013, regarding the participation by same-sex spouses in cafeteria plans, health savings accounts (HSAs), and health flexible spending arrangements (FSAs). Subsequent Q&As clarify how the ruling affects qualified retirement plans.

Updated FAQs for same-sex spouses and FAQs for other same-sex couples are available from the IRS. For guidance on same-sex marriage laws specific to your state, visit our State Laws section, click on your state, and select “Same-Sex Relationships” from the left-hand navigation menu.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Republicans Introduce Bill to Repeal the Individual Mandate

Leading Republican senators on Wednesday introduced a bill to repeal one of Obamacare’s most unpopular provisions – the individual mandate that requires most Americans to obtain health insurance or pay a penalty.

Senator Orrin Hatch, chairman of the Senate Finance Committee, and Senator Lamar Alexander, who heads the Senate Health, Education, Labor and Pensions Committee, announced the three-paragraph bill titled, the American Liberty Restoration Act, with backing from 20 other Republican co-sponsors.

It was the first time that legislation to eliminate the mandate, a linchpin of President Barack Obama’s Affordable Care Act, has been introduced by a Senate majority party.

The mandate survived a 2012 U.S. Supreme Court challenge seeking to overturn it on constitutional grounds. It has now become part of a new Republican effort to chip away at the legislative underpinnings of the law known as Obamacare.

Aides said the bill should eventually come to a vote. But it was unclear whether the measure would overcome potential blocking tactics by Democrats.

The White House had no immediate comment. But Obama, who vowed in Tuesday’s State of the Union address to oppose efforts to roll back his policies, would be expected to veto the measure. “The individual mandate is a line I can’t cross,” the president said at a news conference in November.

Analysts, insurers and healthcare reform advocates have long described the individual mandate as a vital lever for encouraging young healthy consumers to sign up for health coverage under Obamacare. Its loss, they say, could unsettle insurance markets and cause coverage costs to rise sharply.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Harvard Experts Are Not Too Happy With Their Health Care Remedies

For years, Harvard’s experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar.

Members of the Faculty of Arts and Sciences, the heart of the 378-year-old university, voted overwhelmingly in November to oppose changes that would require them and thousands of other Harvard employees to pay more for health care. The university says the increases are in part a result of the Obama administration’s Affordable Care Act, which many Harvard professors championed.

The faculty vote came too late to stop the cost increases from taking effect this month, and the anger on campus remains focused on questions that are agitating many workplaces: How should the burden of health costs be shared by employers and employees? If employees have to bear more of the cost, will they skimp on medically necessary care, curtail the use of less valuable services, or both?

“Harvard is a microcosm of what’s happening in health care in the country,” said David M. Cutler, a health economist at the university who was an adviser to President Obama’s 2008 campaign. But only up to a point: Professors at Harvard have until now generally avoided the higher expenses that other employers have been passing on to employees. That makes the outrage among the faculty remarkable, Mr. Cutler said, because “Harvard was and remains a very generous employer.”

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Cost Effectiveness a Taboo Conversation

If I had a pill that would extend your life by one day, but it cost a billion dollars, it’s unlikely that many people would argue that health insurance should pay for it. We all understand that while the benefit might be real and quantifiable, it’s not worth the expense. But what if the pill cost a million dollars? And what if it extended your life by 10 years?

Such discussions are about cost effectiveness. For the most part, we’re avoiding them when we talk about health care in the United States.

Some think that discussing cost effectiveness puts us on the slippery slope to rationing, or even “death panels.” After all, if we decide that the billion-dollar-for-a-day-of-life pill isn’t worth it, then what’s to stop us from deciding that spending a couple hundred thousand dollars to extend grandma’s life for a year isn’t worth it either?

In fact, we in the United States are so averse to the idea of cost effectiveness that when the Patient Centered Outcomes Research Institute, the body specifically set up to do comparative effectiveness research, was founded, the law explicitly prohibited it from funding any cost-effectiveness research at all. As it says on its website, “We don’t consider cost effectiveness to be an outcome of direct importance to patients.”

As a physician, a health services researcher and a patient, I have to disagree. I think understanding how much bang for the buck I, my patients and the public are getting from our health care spending is of great importance.

Research in this area can be difficult to perform. One of the reasons is that it’s not always easy to measure health outcomes. Some things, like death, can be relatively easy to define, but how do you quantify having diabetes, asthma or a seizure disorder?

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

 

Is Our Current Insurance Model the Best Health Policy?

When the 48-year-old man from Oregon didn’t have insurance, he felt he had no place to go but the emergency room. The man, who has diabetes, went to the emergency room often when he suffered from kidney stones. “Emergency rooms, from what I understand, they can never turn you away,” he said. “I mean, you don’t have much options when you don’t have insurance.”

Then, when he enrolled in the state of Oregon’s Medicaid plan, that all changed. He started seeing doctors in their offices, and stayed away from the emergency room: “I have had five appointments with my primary, one with the diabetic because they had me go to a diabetic educator, and then an appointment with my pharmacist, and then he does a phone-in thing with me every two weeks.

His experience confirms common assumptions about how health care works. If we can just invest in preventive care, we can reduce the use of the emergency room and lower health care costs, the thinking goes. But it turns out that his experience wasn’t typical. He was part of a giant social policy experiment that randomly assigned some eligible people to get Medicaid and others to remain uninsured. Over all, the study found that people who got insurance actually used the emergency room more than their uninsured peers.

Collecting data that can trump a powerful anecdote is the value of the randomized controlled trial, says Amy Finkelstein, an M.I.T. professor and a leader of the Oregon study, which has published a series of papers, most recently on emergency room use.

That’s why this type of study — which randomly assigns some people to a new treatment and others to a placebo or an old approach — is the gold standard in evaluating the effectiveness of drugs: It can provide results that are both surprising and persuasive. But despite medical science’s long history with such studies, when it comes to the best way to design health care delivery, the randomized evaluation is still an incredibly rare approach.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Analyzing Health Coverage Across America

We know that about 10 million more people have insurance coverage this year as a result of the Affordable Care Act. But until now it has been difficult to say much about who was getting that coverage — where they live, their age, their income and other such details.

Now a large set of data — from Enroll America, the group trying to sign up people for the program, and from the data firm Civis Analytics — is allowing a much clearer picture. The data shows that the law has done something rather unusual in the American economy this century: It has pushed back against inequality, essentially redistributing income — in the form of health insurance or insurance subsidies — to many of the groups that have fared poorly over the last few decades.

The biggest winners from the law include people between the ages of 18 and 34; blacks; Hispanics; and people who live in rural areas. The areas with the largest increases in the health insurance rate, for example, include rural Arkansas and Nevada; southern Texas; large swaths of New Mexico, Kentucky and West Virginia; and much of inland California and Oregon.

Each of these trends is going in the opposite direction of larger economic patterns. Young people have fared substantially worse in the job market than older people in recent years. Blacks and Hispanics have fared worse than whites and Asians. Rural areas have fallen further behind larger metropolitan areas.

Women are the one modest exception. They have benefited more from Obamacare than men, and they have received larger raises in recent years. But of course women still make considerably less money than men, so an economic benefit for women still pushes against inequality in many ways.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary