Private Insurance
FEATURED RESEARCH, TESTIMONIES AND ANALYSIS:
Higher Costs and the Affordable Care Act: The Case of the Premium Tax
As the first anniversary of the Patient Protection and Affordable Care Act (ACA) nears, it is becoming clear that new law raises – not lowers – national health-care spending and health insurance premiums. This paper focuses on the economic impacts of premium tax totaling nearly $90 billion dollars on insurance companies. The analysis indicates that: Consumers – small businesses and families – will shoulder the burden of these disguised taxes in the form of higher premiums for health insurance, reduced wages, and fewer resources available for hiring. The detrimental impact on premiums is exacerbated by the peculiar policy decision to make the fees non-deductible for income tax purposes. The anticipated impact is as much as 3 percent or nearly $5,000 per family over a decade.
Primer: Essential Health Benefits (EHB)
The Affordable Care Act (ACA) tasked the Department of Health and Human Services (HHS) with creating a comprehensive package of health benefits, known as “essential health benefits” (EHB). Beginning in 2014, all health plans are required to begin offering the EHB package to beneficiaries in the individual and small group markets.
Kaiser Health News: Health Reform – Here We Go Again
The aggressive interjection of Congress into the rule-making process so soon after passage of legislation is unprecedented. The appearance of the president being prepared to do so as well puts an exclamation point on the politicization of what is intended to be a fact-finding and due diligence exercise. Given that the MLR is merely the first of hundreds of such efforts, the scope for political re-litigating of the new law is astounding. This breeds uncertainty that is undesirable for the insurance business. The health law’s shortcomings in controlling health care costs and damage to the federal budget outlook are understood. But the economic consequences of greater uncertainty and reduced innovation are only now becoming clear.
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ADDITIONAL RESEARCH, TESTIMONIES AND ANALYSIS:
Weekly Checkup No. 024: Affordable Care Act Lifts Lifetime Coverage Limits
In response to numerous reports of poor public opinion regarding the Affordable Care Act (ACA), the Obama Administration is attempting to publicize any and all good news about the health reform law. This week it was a report from the Assistant Secretary for Planning and Evaluation (ASPE) on the 105 million people benefitting from the lift of lifetime limits in health plans. A lifetime limit is a max dollar amount that a health insurance plan will pay out in benefits for any single beneficiary.
Weekly Checkup No. 22: Employer Health Insurance Falls in the U.S.
Last week the Gallup –Healthways Well Being Index released the second part of a new poll investigating recent trends in health insurance coverage in the United States. This publication focused specifically on health insurance coverage from employers, and may cause some heartache for the Obama Administration who continually claims that the number of people with affordable insurance will increase due to the Affordable Care Act (ACA). Unfortunately, the Gallup poll indicates that the average annual premium for employer-sponsored health insurance rose 9 percent between 2010 and 2011 and the number of Americans with employer-sponsored coverage fell.
Arbitrary Rate Review Threshold to Increase Health Costs
Beginning September 1, 2011, health insurers must submit requests to state or federal reviewers if they wish to increase insurance rates by 10 percent or more. This “rate review” process is required by Section 2794 of the Public Health Service Act (PHSA), which was added to Section 1003 of the Patient Protection and Affordable Care Act (PPACA), Pub. L. 111-148
Weekly Checkup No. 013: Dropping Coverage for High-Risk Employees
One of the most controversial questions regarding health reform is whether or not employers will drop health insurance in 2014 when the Affordable Care Act (ACA) is fully implemented and employees are able to purchase health plans in the exchanges. Currently, roughly 60 percent of the non-elderly population is covered by employer sponsored insurance. Studies done by the American Action Forum, Employment Policies Institute, and McKinsey & Company all point to the financial incentive for employers to drop coverage altogether. However, even more harmful to the ACA’s goal of affordable, universal, coverage is the scenario in which employers offer health insurance, but structure plan offerings in a way that encourages only their high-risk employees to buy plans on the individual market.
In its simplest form, health insurance is the business of shared medical risk. There are two players in this industry: insurers and beneficiaries. Insurers contract with beneficiaries, agreeing to pay the costs of medical care in exchange for a premium.
American Action Forum Healthcare Academic Chair Stephen Parente delivered Congressional testimony highlighting his recent study on the impact of allowing consumers to purchase health insurance across state lines. In this peer-review study, Parente et al found evidence of a significant opportunity to reduce the number of uninsured under a proposal to allow the purchase of individual health insurance across state lines using three different policy scenarios.
