http://www.cnbc.com/id/100376831
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How Obamacare Is Changing Your Health Benefits
Published: Monday, 14 Jan 2013 | 10:25 AM ET
By: Paul O'Donnell
Ready for another "cliff'"
On the first day of 2014, the Patient Protection and Affordable Care Act, or Obamacare, starts in earnest. That's when the act's two most notable provisions, mandatory coverage and the state or federally administered health-insurance exchanges, finally take effect, nearly four years after the act was signed into law.
Long before next January, employers will begin to prepare their employees for the changes ahead. Expect your work email inbox to fill in the next few months with overviews, pdf manuals, friendly nudges, and red exclamation points about what the health-care act means to your benefit package.
"This year's open enrollment was calm before the storm," says Randall Abbott, a senior consultant at the personal services company, Towers Watson.
Take a breath and remember that most employers aren't preparing to make wholesale changes to how or what they offer to their employees. In a survey of employers conducted by Towers Watson last summer, 71 percent said they planned to continue offering health benefits, and 63 percent thought it was less than likely that they'd substantially reduce the value of their employees' benefits.
Also remember that many changes have been sneaking into your employer's health-care offerings for years — particularly those designed to save the corporation money by shifting costs to you. Workers have become used to getting vaccinations at the office, higher co-pays and higher deductibles and other cost-saving options, even if they are not always sure what they mean.
Nor is every low-cost plan necessarily a bad deal. Some cost-conscious plans mean more convenient access to providers and better medical outcomes, and may keep you from paying for less healthy employees' medical problems.
But to negotiate the changes, it helps to keep in mind that come Jan. 1 2018, employers will be subject to an excise tax on plans that cost the company $10,200 per individual employee and $27,500 for families. That's the true "health-care cliff," and companies' efforts to avoid paying it is what will drive benefits for years to come.
Here's what to look for this year:
PAPER TRAIL
Expect a host of communications from Human Resources about the options many people will have under Obamacare next year. Employers are required by the health-care act to inform their employees about the new state (or federal) exchanges, and the subsidies available to low-wage workers.
On the first day of 2014, the Patient Protection and Affordable Care Act, or Obamacare, starts in earnest. That's when the act's two most notable provisions, mandatory coverage and the state or federally administered health-insurance exchanges, finally take effect, nearly four years after the act was signed into law.
Long before next January, employers will begin to prepare their employees for the changes ahead. Expect your work email inbox to fill in the next few months with overviews, pdf manuals, friendly nudges, and red exclamation points about what the health-care act means to your benefit package.
"This year's open enrollment was calm before the storm," says Randall Abbott, a senior consultant at the personal services company, Towers Watson.
Take a breath and remember that most employers aren't preparing to make wholesale changes to how or what they offer to their employees. In a survey of employers conducted by Towers Watson last summer, 71 percent said they planned to continue offering health benefits, and 63 percent thought it was less than likely that they'd substantially reduce the value of their employees' benefits.
Also remember that many changes have been sneaking into your employer's health-care offerings for years — particularly those designed to save the corporation money by shifting costs to you. Workers have become used to getting vaccinations at the office, higher co-pays and higher deductibles and other cost-saving options, even if they are not always sure what they mean.
Nor is every low-cost plan necessarily a bad deal. Some cost-conscious plans mean more convenient access to providers and better medical outcomes, and may keep you from paying for less healthy employees' medical problems.
But to negotiate the changes, it helps to keep in mind that come Jan. 1 2018, employers will be subject to an excise tax on plans that cost the company $10,200 per individual employee and $27,500 for families. That's the true "health-care cliff," and companies' efforts to avoid paying it is what will drive benefits for years to come.
Here's what to look for this year:
PAPER TRAIL
Expect a host of communications from Human Resources about the options many people will have under Obamacare next year. Employers are required by the health-care act to inform their employees about the new state (or federal) exchanges, and the subsidies available to low-wage workers.
Whether you need to wade through the
corporate-speak to grasp just how the exchanges work depends on where
you work. Many small businesses will let their workers shop for
insurance in the exchanges because they allow the boss to offload the
headaches and time of administering health insurance onto the employee
and the exchange. And those employees may be better off in the
exchanges, where they will almost certainly get more choice and may pay
less than they do now for coverage.
Large companies will tend to devise their own exchanges, as companies like Sears and Darden Restaurants have already done, that offer multiple affordable options. In most cases, if you're one of these larger firms that offer an affordable health plan, you won't be eligible for your state's exchange.
Still, it's worth examining each document, and triage according to how each applies to your situation. Anything that looks irrelevant should still be retained in a separate file; you never know what might become pertinent later.
COST SHIFTING
Employers will continue a push this year toward account-based health plans, also known as consumer-driven health plans. These plans come with low premiums, but high deductibles—patients are typically asked to pay the first $3,000 to $5,000 of each year's medical expenses themselves. These plans often add a health-savings account where the employee save pre-tax dollars to pay for those expenses.
Though often the employer will add money to the account as well as part of the employee's benefits, the point of these consumer-driven plans, as their name indicates, is to introduce market forces to our inefficient, price-bloated medical system.
"It's a step toward giving people more control," says Paul Fronstin, head of health-benefits research at the Employee Benefit Research Institute. "They say, 'We'll give you this pot of money and give you some exposure to the health care market.'"
The popularity of these plans is growing. Some 10 percent of the U.S. working population was enrolled in one of these plans in 2012, up from 7 percent the year before, according to a study by EBRI.
Critics of the account-based plans complain that the account-based plans reward healthier employees while putting those who are poorer and suffer from chronic diseases at risk. This is because the emphasis in these plans tends to be on preventative medicine. "Well visits tend to be covered but not pharmaceuticals, and those who can't afford to pay out of pocket stop taking their pills," says Elise Gould, director of health policy research at the Economic Policy Institute.
(EBRI's report does show that consumer driven plans are adopted most by healthier employees.)
There are other problems with the logic behind the market-incentive plans: while you may choose to go to the doctor less often if you are paying for each visit yourself, and thereby cut the overall cost of your health care, "you can't negotiate your price," notes Fronstin.
Don't dismiss the account-based plans out-of-hand, however. Do the math—or ask your H.R. officer to do it with you-- to determine how much the plan really costs, the tax savings involved, and how your family uses health care. Fronstin says the low premium, combined with a firm's contribution, may be cheaper for a family that uses a lot of health care money, despite the high deductible.
COMPANY CARE
This year, look for health care to be delivered via phone or computer, or to your desk: "telemedicine," "e-visits," and onsite clinics will be increasingly replacing traditional doctor's appointments. And "doctor's orders" — recommendations about how to improve your health — will increasingly be replaced by company incentives to quit smoking, lower your cholesterol or blood sugar.
Health plans will also begin to reward workers who take care of their diabetes, asthma or hypertension by eliminating cost-sharing for doctor's appointments and medicines related to their condition. "Benefit design is going to become more sophisticated," says Fronstin. "It may get to point that cost sharing is different depending on the quality of the provider." A worker may have a lower co-pay, for instance, for having her baby at a hospital whose maternity department has a great track record.
Some workers may bridle at letting their health-insurance plan dictate where they get their health care, much less what they put in their mouths. But improving the health of the company's workforce not only saves your company money; it will likely keep your premiums lower in the long run, and by paying you to quit smoking or join a gym, return the savings to you right away.
PAYING MORE
Most of these innovations are aimed at slowing your company's health-care costs, not lowering them outright. The cost of providing health care will rise by five to seven percent this year, with some individual companies looking at percentage increases still in the double digits.
Given the skyrocketing costs of the past decade, that's good news. The bad news is that progress for the foreseeable future is going to come at employees' expense, not employers'.
"We are expecting and preparing for an 'exchange' category of coverage," said UnitedHealth spokesman Tyler Mason, "We anticipate this category will have meaningful participation and that we will serve the majority of those markets."
While the Obama administration is building and will operate half of the state insurance exchanges, and partner on exchanges with more than half dozen other states, insurers still have to meet both federal and state insurance regulations for each individual exchange.
Connecticut-based Cigna has decided it will not participate in the insurance exchange in its home state and opted out of bidding for a federal multistate plan option, but still plans to take part in other state marketplaces.
"We expect to sell individual and family plans both on and off exchanges in select markets where we can deliver on our strengths," said Cigna spokesman Joseph Mondy.
The big question is how much new demand insurers will see in the individual market, under the Obamacare Medicaid Expansion plan, which would make low-income adults newly eligible for the state-federal health program for the poor.
A 2012 Kaiser Commission study estimated more than 21 million people could gain coverage under Medicaid expansion by 2022 if all states opted in to the plan; roughly 7 million of them children and disabled adults who already qualify but are not currently enrolled.
The Supreme Court gave states the right to opt out of Medicaid expansion, and so far, Texas, Louisiana, Tennessee and 15 other states led by Republican governors have opted out.
Yet, analysts say those states could well see their Medicaid rolls and costs expand. The rollout of Obamacare in January will likely prompt eligible people not currently enrolled to sign up for coverage.
"The states are nervous about that," said Dianne Heffron, a former official with the Center for Medicare & Medicaid Services, and now with Mercer's Government Human Services Consulting unit.
While the federal government will pick up the full cost of newly eligible Medicaid enrollees through 2017, state reimbursement for those who would have been eligible before the passage of Obamacare will paid under 2009 federal reimbursement levels, which range from 50 to 75 percent.
"If you would have qualified for eligibility in Medicaid under those '09 standards you are considered not newly eligible but oldly eligible," said Heffron. "The state picks up a much larger portion than the newly eligible people."
Given the scale and the complexity of all the work still to be done to before next fall, Heffron expects the start of the open enrollment season in the fall to be bumpy. Corlette agrees, noting it took six months to work out the problems with the rollout of the Medicare Part D Drug program for seniors in 2005.
"It's about the biggest federal project anybody's ever undertaken," Corlette said. "Medicare pales in comparison to what they're trying to build."
Large companies will tend to devise their own exchanges, as companies like Sears and Darden Restaurants have already done, that offer multiple affordable options. In most cases, if you're one of these larger firms that offer an affordable health plan, you won't be eligible for your state's exchange.
Still, it's worth examining each document, and triage according to how each applies to your situation. Anything that looks irrelevant should still be retained in a separate file; you never know what might become pertinent later.
COST SHIFTING
Employers will continue a push this year toward account-based health plans, also known as consumer-driven health plans. These plans come with low premiums, but high deductibles—patients are typically asked to pay the first $3,000 to $5,000 of each year's medical expenses themselves. These plans often add a health-savings account where the employee save pre-tax dollars to pay for those expenses.
Though often the employer will add money to the account as well as part of the employee's benefits, the point of these consumer-driven plans, as their name indicates, is to introduce market forces to our inefficient, price-bloated medical system.
"It's a step toward giving people more control," says Paul Fronstin, head of health-benefits research at the Employee Benefit Research Institute. "They say, 'We'll give you this pot of money and give you some exposure to the health care market.'"
The popularity of these plans is growing. Some 10 percent of the U.S. working population was enrolled in one of these plans in 2012, up from 7 percent the year before, according to a study by EBRI.
Critics of the account-based plans complain that the account-based plans reward healthier employees while putting those who are poorer and suffer from chronic diseases at risk. This is because the emphasis in these plans tends to be on preventative medicine. "Well visits tend to be covered but not pharmaceuticals, and those who can't afford to pay out of pocket stop taking their pills," says Elise Gould, director of health policy research at the Economic Policy Institute.
(EBRI's report does show that consumer driven plans are adopted most by healthier employees.)
There are other problems with the logic behind the market-incentive plans: while you may choose to go to the doctor less often if you are paying for each visit yourself, and thereby cut the overall cost of your health care, "you can't negotiate your price," notes Fronstin.
Don't dismiss the account-based plans out-of-hand, however. Do the math—or ask your H.R. officer to do it with you-- to determine how much the plan really costs, the tax savings involved, and how your family uses health care. Fronstin says the low premium, combined with a firm's contribution, may be cheaper for a family that uses a lot of health care money, despite the high deductible.
COMPANY CARE
This year, look for health care to be delivered via phone or computer, or to your desk: "telemedicine," "e-visits," and onsite clinics will be increasingly replacing traditional doctor's appointments. And "doctor's orders" — recommendations about how to improve your health — will increasingly be replaced by company incentives to quit smoking, lower your cholesterol or blood sugar.
Health plans will also begin to reward workers who take care of their diabetes, asthma or hypertension by eliminating cost-sharing for doctor's appointments and medicines related to their condition. "Benefit design is going to become more sophisticated," says Fronstin. "It may get to point that cost sharing is different depending on the quality of the provider." A worker may have a lower co-pay, for instance, for having her baby at a hospital whose maternity department has a great track record.
Some workers may bridle at letting their health-insurance plan dictate where they get their health care, much less what they put in their mouths. But improving the health of the company's workforce not only saves your company money; it will likely keep your premiums lower in the long run, and by paying you to quit smoking or join a gym, return the savings to you right away.
PAYING MORE
Most of these innovations are aimed at slowing your company's health-care costs, not lowering them outright. The cost of providing health care will rise by five to seven percent this year, with some individual companies looking at percentage increases still in the double digits.
Given the skyrocketing costs of the past decade, that's good news. The bad news is that progress for the foreseeable future is going to come at employees' expense, not employers'.
Ready or Not: States and Insurers Brace for Obamacare
Published: Monday, 1 Apr 2013 | 10:54 AM ET
By: Bertha Coombs CNBC Reporter
With only six months until the start of open
enrollment for Obamacare, state and federal health officials are racing
to get insurance regulations and systems up and running in time.
"The Feds are saying they're on track and the system is being tested, and they're working out the kinks," said Sabrina Corlette, research professor at the Health Policy Institute at Georgetown University. Still, she added, "There's a pretty steep uphill climb yet, before October 1, 2013."
The biggest challenge remains building out the IT infrastructure that will provide the backbone for enrollment—the new state health insurance exchanges that will serve as the gateway for individuals to obtain insurance under the Affordable Care Act and find out whether they qualify for Medicaid or insurance subsidies.
Beyond the infrastructure, the final regulations aren't there yet, either. The Department of Health and Human Services is still finalizing rules for insurers about what kinds of plans and rates they can offer on exchanges, along with new rules for states about how eligibility for Medicaid coverage will be calculated.
"The rules continue and the material continue to come out," said Karen Ignagni, president and CEO of America's Health Insurance Plans. "I think in another month, we'll have a much better sense than we do today."
With rules still in flux, the major insurers are still not sure to what extent they will be offering plans on the new state exchanges.
Aetna has said it plans to sells plans on more than a dozen states exchanges. WellPoint has said it plans to participate in states where it operates.
"The Feds are saying they're on track and the system is being tested, and they're working out the kinks," said Sabrina Corlette, research professor at the Health Policy Institute at Georgetown University. Still, she added, "There's a pretty steep uphill climb yet, before October 1, 2013."
The biggest challenge remains building out the IT infrastructure that will provide the backbone for enrollment—the new state health insurance exchanges that will serve as the gateway for individuals to obtain insurance under the Affordable Care Act and find out whether they qualify for Medicaid or insurance subsidies.
Beyond the infrastructure, the final regulations aren't there yet, either. The Department of Health and Human Services is still finalizing rules for insurers about what kinds of plans and rates they can offer on exchanges, along with new rules for states about how eligibility for Medicaid coverage will be calculated.
"The rules continue and the material continue to come out," said Karen Ignagni, president and CEO of America's Health Insurance Plans. "I think in another month, we'll have a much better sense than we do today."
With rules still in flux, the major insurers are still not sure to what extent they will be offering plans on the new state exchanges.
Aetna has said it plans to sells plans on more than a dozen states exchanges. WellPoint has said it plans to participate in states where it operates.
"We are expecting and preparing for an 'exchange' category of coverage," said UnitedHealth spokesman Tyler Mason, "We anticipate this category will have meaningful participation and that we will serve the majority of those markets."
While the Obama administration is building and will operate half of the state insurance exchanges, and partner on exchanges with more than half dozen other states, insurers still have to meet both federal and state insurance regulations for each individual exchange.
Connecticut-based Cigna has decided it will not participate in the insurance exchange in its home state and opted out of bidding for a federal multistate plan option, but still plans to take part in other state marketplaces.
"We expect to sell individual and family plans both on and off exchanges in select markets where we can deliver on our strengths," said Cigna spokesman Joseph Mondy.
The big question is how much new demand insurers will see in the individual market, under the Obamacare Medicaid Expansion plan, which would make low-income adults newly eligible for the state-federal health program for the poor.
A 2012 Kaiser Commission study estimated more than 21 million people could gain coverage under Medicaid expansion by 2022 if all states opted in to the plan; roughly 7 million of them children and disabled adults who already qualify but are not currently enrolled.
The Supreme Court gave states the right to opt out of Medicaid expansion, and so far, Texas, Louisiana, Tennessee and 15 other states led by Republican governors have opted out.
Yet, analysts say those states could well see their Medicaid rolls and costs expand. The rollout of Obamacare in January will likely prompt eligible people not currently enrolled to sign up for coverage.
"The states are nervous about that," said Dianne Heffron, a former official with the Center for Medicare & Medicaid Services, and now with Mercer's Government Human Services Consulting unit.
While the federal government will pick up the full cost of newly eligible Medicaid enrollees through 2017, state reimbursement for those who would have been eligible before the passage of Obamacare will paid under 2009 federal reimbursement levels, which range from 50 to 75 percent.
"If you would have qualified for eligibility in Medicaid under those '09 standards you are considered not newly eligible but oldly eligible," said Heffron. "The state picks up a much larger portion than the newly eligible people."
Given the scale and the complexity of all the work still to be done to before next fall, Heffron expects the start of the open enrollment season in the fall to be bumpy. Corlette agrees, noting it took six months to work out the problems with the rollout of the Medicare Part D Drug program for seniors in 2005.
"It's about the biggest federal project anybody's ever undertaken," Corlette said. "Medicare pales in comparison to what they're trying to build."
Here is the vocabulary and a couple of discussion questions from Jacek's presentation:
ReplyDeleteenrollment – registration (rejestracja)
survey – review (badanie)
vaccination - to protect a person or animal from a disease by giving them a vaccine (szczepienie)
deductibles - The amount you have to pay out-of-pocket for expenses before the insurance company will cover the remaining costs. (odliczenia, kwoty potrącane z podatku)
excise tax - the government tax that is put on the goods that are produced and used inside a country (akcyza)
subsidies – a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization, or the like. (subwencje, dotacje)
offload the headaches - to tell someone about your worries etc in order to make yourself feel better (zrzucić)
eligible - someone who is eligible for something is able or allowed to do it, for example because they are the right age (odpowiedni, spełniający wymogi)
triage - the method of deciding who receives medical treatment first, according to how seriously someone is injured (selekcja rannych, chorych)
pertinent - directly relating to something that is being considered (odnoszący się; pozostający w związku (z czymś)
price-bloated /inflate/ - to expand (money, prices, an economy, etc.) unduly in amount, value, or size (?)
market-incentive - Use of motivational devices such as competitions, games, premiums, special pricing, to promote the sale of a merchandise or service. (marketing bodźcowy)
skyrocketing costs - if a price or an amount skyrockets, it greatly increases very quickly (szybko rosnące)
steep - a road, hill etc that is steep slopes at a high angle (stormy)
reimburse - to pay money back to someone when their money has been spent or lost (refundować)
questions to the discussion:
1. What are the advantages / disadvantages of the National Health Service.
2. What are the advantages / disadvantages of the American Health Care system.
3. What problems may Obamacare plan inflict.
4. Is it fair for people to pay for diseases of others.
5. Is it fair to create special social groups who receive all the benefits (medical etc.).