Tag Archives: health insurance

Health Policy Is Vital to Tax Reform Policy

Today the House Ways and Means Committee is scheduled to hold a hearing on improving the competitiveness of American businesses. It should consider health policy as well as tax policy in its deliberations.

There is strong bipartisan support in Congress for cutting the corporate tax rate to improve competitiveness. If done in a revenue-neutral manner, as the Tax Reform Act of 1986 was, that simultaneously gets rid of inefficient tax loopholes that distort business decision making, this would be a good thing. But what is really holding back the international competitiveness of American businesses isn’t so much the tax code as our health system.

The United States is unique among major countries in that health insurance for the working population is provided almost entirely by employers.  And until the Affordable Care Act, they weren’t even required to do so; small businesses are still not required.

No one ever sat down and thought up this system; it came about by accident during World War II. Because of wage and price controls, employers couldn’t raise wages. But because so many young men were in the military and the large demand for war production, many businesses had an acute labor shortage.

To provide additional compensation to get the workers they needed, some businesses started offering health insurance on top of cash wages. Before the war, health insurance was rarely provided.

Although obviously a form of income to the worker, the Internal Revenue Service nevertheless ruled that it was not taxable, although businesses could still deduct the cost. This anomalous tax treatment was a fabulous tax loophole for both businesses and workers, especially at a time when tax rates were historically high.

Eventually Congress codified the I.R.S. ruling and we have been stuck with an employer-based health insurance system ever since. Although from time to time, politicians have suggested getting rid of the exclusion for health insurance and using the revenue to create an individually based health insurance system, such efforts have been short-lived and unsuccessful.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Aetna, UnitedHealth show increasing appetite for value-based care contracts

The biggest health insurers are moving quickly towards value-based care arrangements, their recent earnings reports show.

While Aetna has long-held a goal to reach 75 to 80 percent of its medical spend in value-based relationships by 2020, Aetna’s medical spend is now 45 percent tied to value, CEO Mark Bertolini said during last week’s fourth quarter earnings call.

“One way we measure our success is by how well we are able to keep our members out of the hospital and in their homes and communities,” Bertolini said. “For example, in 2016, we reduced total acute admissions by approximately 4 percent, and we deployed predictive modeling to target members at the greatest risk of readmission.”

Aetna has achieved a 27 percent reduction in readmission rates using multidisciplinary care teams that engage facilities to develop effective discharge plans, he said.

“Collectively, these clinical programs have driven a best-in-class Stars readmission rate among national competitors,” he said.

Aetna sees more opportunities for reducing utilization over the long-term in readmission rates, and in a reduction in inpatient days. Unit price is still the driver in value-based purchasing, Bertolini said.

“I think value-based contracting is going to continue to be encouraged by even the current administration as a way of getting a handle on healthcare costs,” he said. “We have a healthy pipeline of opportunities. They will not all be joint ventures. I think there are other models emerging.”

UnitedHealthcare is increasingly helping states manage care for their complex, vulnerable and most costly populations, as well as assisting employers with programs to support the needs of retirees and employees with chronic conditions, according to CEO Stephen Hemsley in the insurer’s earnings report.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

From ‘Repeal’ to ‘Repair’: Campaign Talk on Health Law Meets Reality

Asked at a confirmation hearing two weeks ago if he was working with President Trump on a secret plan to replace the Affordable Care Act, Representative Tom Price, Mr. Trump’s nominee for secretary of health and human services, smiled broadly and answered: “It’s true that he said that, yes.”

The committee room, filled with health care lobbyists, consumer advocates and others with a vital stake in the future of the health care law, erupted with knowing laughter at Mr. Price’s careful formulation. For those following the issue closely, it has been an open secret that the fledgling Trump administration is a long way from fulfilling one of Mr. Trump’s most repeated campaign promises.

In a brief aside in an interview with Bill O’Reilly of Fox News broadcast before the Super Bowl on Sunday, Mr. Trump went further than he ever has in acknowledging the reality that any hope of quickly replacing the Affordable Care Act has been dashed.

“Yes, I would like to say by the end of the year, at least the rudiments, but we should have something within the year and the following year,” the president said.

That admission is sure to be a serious disappointment for the president’s most fervent supporters, who sent him to Washington believing that he would move quickly to dispatch the health law.

Soon after he was elected, Mr. Trump reacted to Republican suggestions of a delay in replacing the health act by insisting that repealing and replacing the law must happen at about the same time.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Judge, Citing Harm to Customers, Blocks $48 Billion Anthem-Cigna Merger

A federal judge on Wednesday blocked a proposed $48 billion merger of Anthem and Cigna, derailing another effort by top health insurers to reshape the industry by combining.

The ruling, by Judge Amy Berman Jackson of the Federal District Court for the District of Columbia, came two weeks after another federal judge blocked a proposed $37 billion merger between Aetna and Humana on antitrust grounds.

Judge Jackson wrote in her order that she found the Justice Department’s arguments against the deal persuasive, and that putting Anthem and Cigna together would harm customers.

“The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anticompetitive effects,” the judge wrote. “It will eliminate the two firms’ vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market.”

Under the merger agreement’s terms, Anthem is obligated to pay Cigna a $1.85 billion breakup fee.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

NY exchange scores F’s on some consumer features

The New York State of Health exchange lacks many of the features that other public Obamacare marketplaces, including Healthcare.gov, have added to make it easier for users to compare plans, according to a report released Tuesday by the Clear Choices Campaign, an advocacy group that seeks greater transparency in health care quality and pricing. Rather than just allowing users to compare premiums, for instance, some exchanges include tools that let users calculate their out-of-pocket costs and search for plans that cover their preferred drugs and providers. The scorecard accompanying the report gave New York an F in several categories. Although the pending repeal of the Affordable Care Act introduces uncertainty into the future of the Obamacare exchanges, a less standardized health insurance marketplace could increase the need for such comparison-shopping tools, said Joel White, president of the Clear Choices Campaign. White is also founder and president of the health care lobbying firm Horizon Government Affairs.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Senate Takes Major Step Toward Repealing Health Care Law

WASHINGTON — Senate Republicans took their first major step toward repealing the Affordable Care Act on Thursday, approving a budget blueprint that would allow them to gut the health care law without the threat of a Democratic filibuster.

The vote was 51 to 48. During the roll call, Democrats staged a highly unusual protest on the Senate floor to express their dismay and anger at the prospect that millions of Americans could lose health insurance coverage.

One by one, Democrats rose to voice their objections. Senator Maria Cantwell of Washington said that Republicans were “stealing health care from Americans.” Senator Ron Wyden of Oregon said he was voting no “because health care should not just be for the healthy and wealthy.”

The presiding officer, Senator Cory Gardner, Republican of Colorado, repeatedly banged his gavel and said the Democrats were out of order because “debate is not allowed during a vote.”

The final vote, which ended just before 1:30 a.m., followed a marathon session in which senators took back-to-back roll call votes on numerous amendments, an arduous exercise known as a vote-a-rama.

The approval of the budget blueprint, coming even before President-elect Donald J. Trump is inaugurated, shows the speed with which Republican leaders are moving to fulfill their promise to repeal President Obama’s signature domestic policy achievement — a goal they believe can now be accomplished after Mr. Trump’s election.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Muted Response From Health Lobby as Affordable Care Act Faces Repeal

WASHINGTON — The speed of Republican efforts to repeal the Affordable Care Act has stunned health industry lobbyists, leaving representatives of insurance companies, hospitals, doctors and pharmaceutical makers in disarray and struggling for a response to a legislative quick strike that would upend much of the American health care system.

The Senate is expected to take the first step by Thursday morning, approving parliamentary language in a budget resolution that would fast-track a repeal bill that could not be filibustered in the Senate. House and Senate committees would have until Jan. 27 to report out repeal legislation. Health insurance and health care for millions of Americans are at risk.

But far from reflecting the magnitude of the moment, the most prominent message from lobbyists that lawmakers saw in their first week back at work was a narrowly focused advertisement from the U.S. Chamber of Commerce demanding the repeal of “Obamacare taxes,” especially an annual fee imposed on health insurance companies to help pay for the expansion of coverage under the health law.

“More than 20 million people could lose their health insurance, and states could lose billions of dollars in Medicaid money,” said Kenneth E. Raske, the president of the Greater New York Hospital Association. But, he added, many health care executives “don’t want to get on the wrong side of the new administration or the Republican majority in Congress.”

Health care professionals are not totally silent, but industries that were integral to the creation of the Affordable Care Act in 2010 are keeping their voices down as Republicans rush to dismantle it. Some Republican lawmakers are openly fretting about their leaders’ repeal strategy, saying they must develop an Affordable Care Act replacement before they repeal it. Five Republican senators proposed on Monday to extend the deadline for drafting repeal legislation by five weeks, until March 3. One of the five, Senator Bob Corker of Tennessee, said the extra time would allow Congress and the Trump administration to “get the policy right” as they try to arrange a smooth transition to a new system of health coverage.

But the naysayers are getting no cover from a major lobbying and advertisement blitz like the ones that blanketed the airwaves in 2009 and 2010.

To block the repeal effort, said Senator Richard J. Durbin of Illinois, the No. 2 Senate Democrat, “we need two or three Republicans to join us.”

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Health Insurers List Demands if Affordable Care Act Is Killed

The nation’s health insurers, resigned to the idea that Republicans will repeal the Affordable Care Act, on Tuesday publicly outlined for the first time what the industry wants to stay in the state marketplaces, which have provided millions of Americans with insurance under the law.

The insurers, some which have already started leaving the marketplaces because they are losing money, say they need a clear commitment from the Trump administration and congressional leaders that the government will continue offsetting some costs for low-income people. They also want to keep in place rules that encourage young and healthy people to sign up, which the insurers say are crucial to a stable market for individual buyers.

The demands are a sort of warning shot to Republicans. While the party is eager to repeal the law as quickly as possible, and many have promised a replacement, its members are sharply divided over what shape any new plan should take. If they do not come up with an alternative, more than 22 million people would be left uninsured, including the more than 10 million who have bought individual plans on state marketplaces.

On Tuesday, Marilyn Tavenner, the chief executive of America’s Health Insurance Plans, a leading industry trade group, warned that the state marketplaces were already on unstable financial footing. Failing to continue the funding aimed at low-income Americans, she said, would have far-reaching consequences because the business would become much tougher for insurers.

“The market has already been a little wobbly this year,” Ms. Tavenner said. “If insurance companies believe cost-sharing subsidies will not continue, they are going to pull out of the market during the next logical opportunity.”

Insurers could decide within a few months whether to pull out of the state marketplaces for 2018, a deadline they are pushing to have delayed.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Keep your Health Insurance Documents with Your Tax Records

Gathering documents and keeping well-organized records make it easier to prepare a tax return. They can also help provide answers if the IRS needs to follow-up with you for more information.

This year marks the first time that you may receive information forms about health insurance coverage.

The information forms are:

You do not need to send these forms to IRS as proof of your health coverage. However, you should keep any documentation with your other tax records. This includes records of your family’s employer-provided coverage, premiums paid, and type of coverage. You should keep these – as you do other tax records – generally for three years after you file your tax return.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Obama administration backs off on ACA rules for 2017 health plans

In a major win for the industry, health insurers will not be forced to have minimum quantitative standards when designing their networks of hospitals and doctors for 2017, nor will they have to offer standardized options for health plans.

The CMS released a sweeping final rule (PDF) Monday afternoon that solidifies the Affordable Care Act’s coverage policies for 2017. The agency proposed tight network adequacy provisions and standardized health plan options in November, which fueled antipathy from the health insurance industry.

Monday’s rule relaxes those aggressive proposals, a move that likely will raise the ire of consumer groups that have pushed for stronger insurance protections for patients. It does, however, include some victories for transparency advocates. The federal government, for example, will now have to publish all changes to premium rates, not just increases that are subject to review.

The rule addresses several other issues, including surprise medical bills and the 2017 open-enrollment period.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary