The debate over ObamaCare has obscured another important example of government meddling in medicine. Starting this year, physicians like myself who treat Medicare patients must adopt electronic health records, known as EHRs, which are digital versions of a patient’s paper charts. If doctors do not comply, our reimbursement rates will be cut by 1%, rising to a maximum of 5% by the end of the decade.
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If you’re among the roughly 20 million people affected by the Affordable Care Act — either because you bought insurance through health exchanges or will be subject to penalties or exemptions for failing to get coverage — filing a tax return just got a lot harder. Indeed, potentially millions of people who never before had to file tax returns will now need to file as the result of the health law.
The ACA, better known as Obamacare, has put health insurance in reach for millions of Americans by setting up subsidies for those who otherwise couldn’t afford to buy coverage. However, the subsidies that may appear to simply lower the cost of insurance premiums are actually “advance premium tax credits” that are paid directly to health insurers.
Dec. 26, 2014, was strike three for Pamela Weldin.
The day after Christmas, Weldin, of Minatare, Neb., had logged on to Facebook to find a message from a friend of hers. Included in the note was a link to an article from the Omaha World-Herald announcing that CoOportunity Health, a nonprofit health insurance company offering plans in Nebraska and Iowa, had been taken over by state regulators.
The insurer, one of 23 Consumer Operated and Oriented Plans, or co-ops, started with the backing of the federal government and received $145 million in loans from the Centers for Medicare and Medicaid Services. But, CoOportunity’s expenses and medical claims would far exceed its revenue for 2014.
Facing high costs but smaller budgets, states like Hawaii and Rhode Island are struggling to find financially and politically sustainable ways to keep their health exchanges running.
Jeff Kissel’s first task when he took over Hawaii’s health exchange was making sure it worked after a botched first year, but a close second was finding a way to pay for it. The former gas utility CEO is now lobbying his legislature — what he calls “taking a forceful stand for why this business decision works”– to keep the exchange’s lights on.
The Obamacare window technically just closed this weekend, but a new round of political headaches could just be beginning for the administration.
That’s because it’s tax season, and many Americans could soon be getting an unwelcome surprise that they owe the government a penalty for skipping health insurance coverage.
Up to 6 million Americans are expected to pay a penalty for not having coverage in 2014, according to recent Obama administration projections. The 2014 penalty for this tax season is $95, or 1 percent of family income — purposefully on the weaker side to let people adjust to this new coverage scheme. Most of the uninsured won’t actually face the penalty because they’ll qualify for an exemption, either related to their inability to afford coverage or some other hardship.
EARLY next month the Supreme Court will hear arguments in King v. Burwell, the latest significant legal challenge to the Affordable Care Act. The petitioners argue that under the statute, the federal government is not allowed to provide health insurance subsidies in the 37 states that have either declined or failed to establish their own exchanges.
Should the court decide in the petitioners’ favor, most likely in June, critics in Congress will feel vindicated. But then comes the hard part: Congress must be ready with a targeted plan to help at least six million people who would quickly lose that federal assistance, and most likely their insurance.
While several Republicans in Congress have offered serious proposals to replace Obamacare, debating a wholesale replacement of the Affordable Care Act would take months, even years. But it is essential for Congress to move fast on a short-term solution. About 85 percent of people who bought plans on the exchanges receive subsidies, and most could not afford the policies without them. If fewer people are enrolled and new enrollments decline, premiums will rise, leading to the breakdown of the exchange markets.
If the Supreme Court decides that the Affordable Care Act means what it says — that subsidies are available only if a state establishes its own exchange — then President Obama’s signature legislative initiative would be significantly weakened in two-thirds of the states.
Fortunately, there is a way out, one that President Obama, forced by the court to the negotiating table, might be willing to accept. The first step would be for Congress to pass legislation that would allow people to keep subsidies they have already received, and allow subsidies for existing policies to continue through this year so people don’t immediately lose their existing coverage.
Then, beginning in 2016, instead of subsidies to individuals, the 37 states without exchanges could receive a new, capped allotment from the federal government that we call health checks. States could use the allocation to provide immediate premium assistance to people affected by the court decision, and similar checks could be extended to others who would need insurance afterward.
The money would be distributed using the same infrastructure used to disburse funds for the Children’s Health Insurance Program, which covers nearly nine million children. States know how to manage this platform, and could use it to distribute insurance premium support. (The “checks” could, of course, be distributed as electronic credits to insurers, which would be applied on a monthly basis to offset the cost of insurance policies individuals select.)
This might sound like the same subsidies by a different name, but one advantage would be that health insurance policies supported by health checks would not be subject to the Affordable Care Act’s mandates, taxes, insurance rules and benefit requirements.
Currently, to qualify for a subsidy under the act, a health plan must cover a long list of benefits, many of which unnecessarily increase costs. Under our plan, people could apply their allotments toward the purchase of any health insurance plans or policies approved by their state. States could decide what regulations were needed to protect consumers while still providing opportunities for less expensive policies unburdened by excessive regulation and mandates. Such flexibility would also increase enrollment rates: People would be more likely to purchase policies if they had options that cost less and better fit their needs.
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Of course, in reality, should the court decide against the Affordable Care Act, there are other options. Some supporters of the law are encouraging President Obama to simply declare existing federal exchanges to be state exchanges or license them to the states — a move that would further complicate an already ungainly law and already frayed executive-congressional relations.
Others say that the 37 states without federal exchanges would have no choice but to quickly establish exchanges so that residents didn’t lose coverage, even if they were ardent opponents of the law. Some might, but it’s a good bet that many wouldn’t, at least not in time to prevent their citizens from losing coverage.
Health checks offer a politically palatable third way. They would return control over health insurance to the states, with new resources to help their residents. And they would preserve the Affordable Care Act’s present extension of coverage, which would make them more palatable to the Obama administration.
There is no way to know how the Supreme Court will rule in King v. Burwell, but it is incumbent upon both parties in Congress to be ready for the fallout should it decide against the Affordable Care Act. Health checks offer a simple, practical answer, and a start toward further efforts to reform our health insurance system.
Behind the scenes, HealthCare.gov is still a mess.
The “back end” of the Obamacare website still isn’t properly wired to the health insurance companies. It’s slow going for health plans to make sure the 11.4 million people who have signed up end up in the right plan. Subsidy payments aren’t automated, so the insurers get payments based on estimates. And adding information like a marriage or the birth of a child is a convoluted, multi-step process.