Carriers start to position due to ACA

This is the first, but I am sure it won't be the last statement of its kind from carriers.  Look at the italics part of this quote from United Healthcare CEO. Quote of the Day

“We have nearly 70% of our 2013 business priced and the markets have been rational in our view, competitive but better than 2012 for us. We have been very steady in our pricing discipline year-to-year, consistently adhering to and aligning to our forward view of costs. And we take measured membership losses in instances where we cannot get our price, as we did in the commercial risk markets in 2012 and expect to again in 2013. We have included the ACA insurance tax and other ACA cost factors in our 2013 rate filings. We are working effectively with our state partners through the rate approval process. As always, some have been more challenging than others. At the end of the day we must price to our cost and if we conclude that a state’s posture on commercial insurance pricing is not economically sustainable, we will have no choice but to withdraw from that market. We have not been put in that position to date.” — Stephen Hemsley, president and CEO of UnitedHealth Group, discussing UnitedHealthcare’s 2013 pricing on a Jan. 17 fourth-quarter earnings conference call.

Healthcare Reform: New Suite of Federal Taxes and Fees

The text below the dotted line has been sent from a health insurance carrier to its broker network.  This helps explain
the spiraling health insurance cost.  I wonder how much tax revenue will be created due to PPACA????

....................................................................................................................................................................................................

A new suite of taxes and fees is being assessed on health plan sponsors in 2014 based on stipulations outlined in the Affordable Care Act (ACA). This Special Broker Update is part of a series of communications about these taxes and fees and how  we will implement them.

The first fee, implemented in 2012, is the Patient-Centered Outcomes Research Institute, or PCORI, fee. Currently $0.16 for each covered member and each dependent, this fee will increase to $0.18 for each in 2014. We will continue to separately disclose this charge to fully insured groups only. Self-insured groups must pay this fee directly to the government using IRS Form 720.

Beginning January 2014, other federal fees will be imposed. We expect them to be in the following ranges:

• Reinsurance fee, approximately $5.25 per member per month
• Market share fee, between 2 percent and 3 percent of the monthly premium

Reinsurance Fee
Medical Mutual will assess and collect the reinsurance fee across all medical lines of business for all fully insured plans and self-funded groups; excluded coverage includes stop loss, dental, vision and Medicare Supplement.

Market Share Fee
Medical Mutual will assess the market share fee on all fully insured lines of business, including dental and vision, with the exception of Medicare Supplement policies. Stop-loss applicability is to be determined.

Small Employers Win With Medicaid Expansion

The idea of an expanding federal government becomes less appealing every day.  However, I believe that the expansion of Medicaid to Ohio residents is good for small businesses.  We can debate the progressive or conservative position all day long, but that accomplishes nothing. 

Isn’t this really an economic development issue?  Absolutely! 

Why?

·       Increase cash into the state economic flow of over $13 BIL a year

·       Increase sales tax revenue to Ohio of $400 MIL a year

·       600,000 people will be covered by Medicaid that were not covered before

·       600,000 working people that still may be below 138% of the federal poverty level will qualify for Medicaid

·       600,000 working poor now covered under Medicaid will be EXEMPTED from employer based health care cost!

Do you understand that last point?  Seriously, this is a big deal.  The group of working poor now covered under Medicaid will not count against FTE calculations or the penalty structure under ACA.

Read this Washington Post article

http://wapo.st/11WEwlN

The healthcare wolf is at the door!

The consequences of Obamacare are beginning to take shape and the sheep's clothing is being shed to reveal the wolf inside.

The Internal Revenue Service on Friday unveiled its proposal to raise billions of dollars through annual fees on health insurers, a “$100 billion health insurance tax rule” that the industry says will significantly drive up costs for consumers.

The rule as part of the Patient Protection and Affordable Care Act imposes annual fees on health insurers that start at $8 billion in 2014, increases to $14.3 billion in 2018, and will increase every year after that. The Joint Committee on Taxation estimates the tax will exceed $100 billion over the next ten years.

The proposed rule will be published Monday for public consideration in the Federal Register. The IRS will accept comments for 90 days, beginning Monday.

Not paying on time will result in a $10,000 penalty for insurers, plus $1,000 for every day they miss deadline.

America’s Health Insurance Plans blasted the rule as a tax that will financially drown both employers and consumers. They warn that the costs will have to be passed along to consumers in the form of higher premiums, a claim that the Congressional Budget Office has also verified in its analysis.

“Imposing a new sales tax on health insurance will add a financial burden on families and employers at a time when they can least afford it,” AHIP President and CEO Karen Ignagni said Friday. “This tax alone will mean that next year an individual purchasing coverage on his or her own will pay $110 in higher premiums, small businesses will pay an additional $360 for each family they cover, seniors enrolled in Medicare Advantage will face $220 in reduced benefits and higher out-of-pocket costs, and state Medicaid managed care plans will incur an additional $80 in costs for each person enrolled.”

There is currently legislation to repeal the fees, recently introduced by Reps. Charles Boustany, R-La., and Jim Matheson, D-Utah, which AHIP strongly supports.

A 2011 report by Oliver Wyman found that nationally the health insurance tax alone “will increase premiums in the insured market on average by 1.9 percent to 2.3 percent in 2014,” and by 2023 “will increase premiums 2.8 percent to 3.7 percent.”

Families purchasing coverage in the individual market will be hit the hardest in New York while those getting coverage from a small employer will be most impacted in West Virginia, Oliver Wyman analysis also found. Medicare Advantage beneficiaries in New Jersey and the Medicaid managed care program in Washington, DC top their respective lists of those that will be hardest hit by the tax.

This is taken from an Employee Benefits Bulletin