Budget 2013: Private Health Insurance Programs

By Allison Bell

The Centers for Medicare & Medicaid Services (CMS) could see big changes in private health insurance programs spending in federal fiscal year 2013.

The budget for one major private health insurance program could fall more than 98% as spending on others soars.

The Obama administration talks about CMS private programs funding in the 2013 U.S. Department of Health and Human Services (HHS) budget proposal.

Fiscal year 2013 starts Oct. 1.

The private health insurance programs budget pays for CMS to set up and run programs created by the Patient Protection and Affordable Care Act of 2010 (PPACA).

CMS is not the only HHS agency implementing PPACA, and HHS is not the only federal department implementing PPACA.

HHS has a separate health insurance reform implementation fund. The budget there increased to $411 million this year, from $208 million in 2011. The budget could fall back to $344 million in the coming year.

The Employee Benefits Services Administration, an arm of the U.S. Labor Department, talks about its PPACA projects in its 2013 budget proposal.

The Internal Revenue Service, an arm of the U.S. Treasury Department that would be responsible for enforcing PPACA tax subsidy and penalty provisions, mentions PPACA only briefly in its budget outline.

CMS is the HHS agency that has budget line items for the biggest, best-known PPACA efforts.

Overall private programs spending could drop 13%, to $4.1 billion.

The Early Retiree Reinsurance Program (ERRP) – a PPACA program that’s been subsidizing health benefits for some early retirees – would get only $28 million, down from $2 billion. CMS officials recently announced that ERRP will be closing two years early because early retiree health plan sponsors used up the funding.

Spending on construction of the new PPACA health insurance distribution exchanges would increase 20%, to $1.1 billion. PPACA calls for the exchanges to start selling health insurance to individuals and small groups in 2014.

The CMS budget also includes big increases for the Consumer Operated and Oriented Plan (CO-OP) program and the Pre-Existing Condition Insurance Plan (PCIP) program.

The CO-OP program is supposed to provide seed loans that groups can use to start nonprofit, member-owned health insurers. CO-OP funding could jump to $803 million, from $93 million this year.

The PCIP program has been providing health coverage for uninsured people with health problems who are unable to buy ordinary commercial health insurance.

Starting in 2014, PPACA is supposed to require all health insurers to sell coverage on a guaranteed-issue, mostly community-rated basis, with no extra charges for people with health problems. Congress put the PCIP program in PPACA to give people who already had health problems some relief while they were waiting for 2014.

PCIP enrollment has been much lower than PPACA drafters had predicted but the medical expenses of the people who have signed up for coverage have been much higher than expected. Some states have warned that their federal PCIP money is running out.

The 2013 CMS budget proposal would increase PCIP funding 31%, to $2.1 billion.

Popularity: 2% [?]

2012 HSA Contribution Limits

As the end of the year approaches, some people start to comtemplate making New Year’s resolutions. Diet, exercise, pick up a new hobby or maybe try to save more money. Well, now would be a good time to consider your HSA contribution limits as part of your savings plan.

Individuals enrolled in a High Deductible Health plan can increase their contribution limit. For individual plans, the HSA contribution limit is $3,100. For family plans, the HSA contribution limit is $6,250.

For 2012, a qualifying high deductible health plan that can be paired with an HSA is one with an annual deductible of at least $1,200 for individual coverage and $2,400 for family coverage, the same qualifications required in 2011. The qualifying health plans can’t have annual out-of-pocket expenses (besides premiums) for 2012 in excess of $6,050 for individual coverage and $12,100 for family coverage.

This new HSA contribution limits are effective for calendar year 2012.

Popularity: 4% [?]

HHS Strategy

Every three years, the Department of Health and Human Services updates its strategic plan, which describes its work to address complex, multifaceted, and ever-evolving health and human service issues. An agency strategic plan is one of three main elements required by the Government Performance and Results Act (GPRA) of 1993 (Public Law 103-62). An agency’s strategic plan defines its missions, goals, and the means by which it will measure its progress in addressing specific national problems, needs, or challenges related to its mission over the course of at least five years.

For the period FY 2010—2015, HHS has 5 goals:

Goal 1: Transform Health Care

Goal 2: Advance Scientific Knowledge and Innovation

Goal 3: Advance the Health, Safety, and Well-Being of the American People

Goal 4: Increase Efficiency, Transparency, and Accountability of HHS Programs

Goal 5: Strengthen the Nation’s Health and Human Services Infrastructure and Workforce

HHS will seek to drive down costs, put more money in the hands of the American people, and ensure all Americans receive the health care services they need and deserve. These actions will increase transparency, eliminate waste, and put Americans back in charge of their health care.

To read more on each of the goals, you can visit:

http://www.hhs.gov/secretary/about/priorities/priorities.html

Popularity: 1% [?]

Deadline Approaches for IRA, HSA Contributions

You can ask the IRS for more time to file your tax return.  However that won’t extend the deadline for funding an individual retirement account or a health savings account for last year.  There’s a firm deadline of April 15th, 2010, for making a contribution to your 2009 traditional IRA, your 2009 Roth IRA, or your 2009 health savings account.

Tax deductions for HSA contributions are limited to maximum dollar amounts set per year:

  • For 2009: $3,000 for individual coverage, $5,950 for family coverage. $1,000 for additional catch-up contributions for people age 55 or older.
  • For 2010: $3,050 for individual coverage, $6,150 for family coverage. $1,000 for catch-up contributions.

  • Report your tax-deductible HSA contributions on IRS Form 8889, with the total contributions also reported on Form 1040.  Insurance companies report your HSA contributions to the IRS using Form 5498-SA.

    If you would like more information, please contact NEOS Consumer Driven Healthcare at 877-636-7472 or by visiting our website at www.NEOSCDH.com

    Popularity: 4% [?]

    Despite Fears, Health Care Overhaul Is Moving Ahead

    By SHERYL GAY STOLBERG – The New York Times

    WASHINGTON — The conventional wisdom, here and around the country, is that the centerpiece of President Obama’s domestic agenda — remaking the health care system to cut costs and cover the uninsured — is on life support and that only a political miracle could revive it.

    Here’s why the conventional wisdom might be wrong:

    While the month of August clearly knocked the White House back on its heels, as Congressional town hall-style meetings exposed Americans’ unease with an overhaul, the uproar does not seem to have greatly altered public opinion or substantially weakened Democrats’ resolve.

    Critical players in the health care industry remain at the negotiating table, meaning they are not out whipping up public or legislative opposition.

    Despite tensions between moderate and liberal Democrats, there is broad agreement within the party over most of what a package would look like. Four of the five Congressional committees considering health care legislation have already passed bills. Each would require all Americans to have insurance and provide government subsidies for those who cannot afford it. Each would bar insurance companies from refusing coverage for pre-existing conditions; imposing lifetime caps on coverage; or dropping people when they get sick.

    Getting a bill through the Senate remains a big challenge, but even there, the Obama administration has a reasonable chance of corralling the 60 votes it would need to pass legislation more or less on its terms. One wavering Democratic moderate, Senator Ben Nelson of Nebraska, signaled over the weekend that he might be able to go along with one of the compromise proposals under discussion. Senator Olympia J. Snowe, the Maine Republican whose vote would be vital to Mr. Obama, remains deeply engaged in negotiations, and there are indications that one or two other Republicans, like Senator George V. Voinovich of Ohio, might be in play.

    Politically, there is an imperative for Democrats to act; they remember well the disastrous political fate that befell them in 1994, when they lost control of the House and Senate after failing to pass a health bill under President Bill Clinton. Rahm Emanuel, the bare-knuckled political operative and former Clinton aide who is now the White House chief of staff, has wasted little time in reminding his fellow Democrats that, as he said in an interview Tuesday, “the inability to act here will have political consequences.”

    None of this is to understate the magnitude of the task facing Mr. Obama as he begins a final drive for the legislation with a nationally televised address to Congress on Wednesday night. The size and complexity of the legislation, the deep partisan divide, the undercurrent of concern among voters about whether government is getting too big and intrusive, opposition from special interests — all create land mines that could still blow up the effort.

    But even after weeks filled with seemingly ominous portents for Mr. Obama’s ambitions, there is evidence that public opinion remains basically supportive of him. Despite intense controversy over the “public option,” a government-backed insurance plan that would compete with the private sector, a CBS poll at the end of August found that 60 percent of Americans still support the idea, down from 66 percent in July. And half the respondents to the poll said Mr. Obama had better ideas on health care than Republicans, down from 55 percent.

    Mr. Obama likes to say that in the 100 years since President Theodore Roosevelt began advocating universal health care, “we’ve never had such broad agreement on what needs to be done.” On Capitol Hill, it is possible to see how a compromise could come together; Mr. Nelson indicated over the weekend that he could back a provision known as a “trigger” to create a public option if private efforts to cover the uninsured failed.

    And despite the fracas of August, the major stakeholders in the health care debate — hospitals, doctors, insurers and the pharmaceutical industry — have not abandoned the negotiations. Ralph G. Neas, chief executive of the National Coalition on Health Care and a veteran of Washington legislative fights, said this was especially significant.

    “They’re saying to themselves: ‘We’re going to get 30 to 40 or 50 million new customers. This is in our economic self interest,’ ” Mr. Neas said. “That, as much as anything else, could propel this forward to a law that does provide quality health care for all.”

    Mr. Obama still clearly has not closed the deal, which is a major reason he will be making his case directly to the American people and their elected representatives on Wednesday night. The CBS poll found that 6 in 10 Americans say Mr. Obama has not clearly explained what his plans for health reform would mean.

    That is a problem for the White House, though it also presents the president with an opportunity to reframe the debate on his own terms. In his address on Wednesday, Mr. Obama has promised to outline what he wants to see in a bill; Republican leaders say the message from August is that Democrats and the president need to start over.

    “At this point, there really should be no doubt where the American people stand: the status quo is not acceptable, but neither are any of the proposals we’ve seen from the White House or Democrats in Congress,” Senator Mitch McConnell of Kentucky, the Republican leader, said in a statement, adding: “It should be clear by now that the problem isn’t the sales pitch. The problem is what they’re selling.”

    Yet Mark McClellan, who ran the Food and Drug Administration and later Medicare under President George W. Bush, said he saw the churning in August as a part of the public’s education, a “necessary step in the process” and not a fatal blow.

    Whether or not Mr. Obama gets the kind of comprehensive bill he is hoping for, Dr. McClellan said, Congress is all but certain to take up health legislation by early next year to fix a measure that would impose a draconian 21 percent cut in Medicare reimbursements to doctors. And once it is tinkering with health care, he said, it is not that big a leap to imagine lawmakers using that bill to take smaller steps toward expanding coverage and passing insurance market reforms.

    “Everybody is talking about how the public is very concerned about some of the specifics that they’ve heard,” Dr. McClellan said. “But the public is also very concerned about some aspects of the health care system, including the cost, including the security of their coverage. So depending on how this plays politically, I think there is the foundation for building support for broader legislation.”

    Popularity: 2% [?]

    47 Million Uninsured

    Recent figures released by the US Census Bureau indicate that the number of people without health insurance has jumped to 47 million from 2005 to 2006. 

    According to another census conducted by AHIP, 4.5 million people enrolled in a health savings account, up by 1.3 million from the previous year. 

    Are we going to see a long and continuous trend of individuals unable to afford coverage or are we going to see a breakout year in High Deductible Health Plans with an option for an HSA in 2008-2009? 

    I attached both links for the census reports.

    http://www.census.gov/prod/2007pubs/p60-233.pdf

    http://www.ahipresearch.org/PDFs/FINAL%20AHIP_HSAReport.pdf

    Popularity: 7% [?]

    Pricing Transparency in Healthcare

    The need for healthcare pricing transparency is the hottest conversation right now in the world of consumer directed healthcare. (www.galen.org) There are initiatives forming at the state, local, regional and government levels.

    In a March 14 speech, Mike Leavitt, secretary of the Department of Health and Human Services (HHS), announced his intention to create transparency in quality and price. The federal government makes up 46% of the entire payer market, according to HHS but has not been a participant in the efforts to control cost. (www.managedhealthcareerexecutive.com).

    A Pennsylvania lawmaker proposed a price transparency bill for pharmacies and Hospitals (www.medicalnewstoday.com). The intent was to create a way for consumers to view the top 150 most popular prescription drugs. The pharmacies would update their drug list monthly and could change prices at any time as long as their in-store price list are updated at least once a week. The bill also calls for the creation of a hospital payment registry. The registry would be updated annually and include payments received by hospital for the 150 most common admission diagnoses and most often dispensed drugs.

    These conversations are not surprising. Studies indicate the patients are 58 percent more likely to switch to a more cost-effective prescription drug or a lower-cost pharmacy channel when they can comparison shop for drugs. The analysis conducted by Medco Health Solutions, Inc, found that patients are willing to price shop on prescriptions drugs when presented with clear information on their clinical alternatives, channel options and overall savings. (www.medcohealthsolutions.com)

    The notions of consumer-driven healthcare and price transparency are going to fundamentally change how Hospital and Pharmaceutical marketing takes place. Price transparency and consumer-driven healthcare will force marketers to engage with consumers healthcare as never before. With the media reporting issues surrounding hospital and drug charges nearly every day, price is an increasing important portion of the marketing mix.

    The next phase in price transparency must come directly for physicians who need to voluntarily post their prices so consumers can know directly and up front the full cost of a visit or procedure. One of the forces driving this will be consumer directed healthcare where consumers will want to get the best cost and quality as they spend their deductible dollars.

    Popularity: 7% [?]