Health Care Thoughts: Obamacare Updates
by Tom aka Rusty Rustbelt
Health Care Thoughts: Obamacare Updates
The slow march toward full implementation continues.
Exchanges – As of today 17 states will create their own exchange, seven states will partner with the government, and 26 states have defaulted to the federal program (if anyone asked me I would suggest defaulting in order to let the feds do the early heavy lifting).
Perhaps the most important questions now are:
Will any of the exchanges be ready on time?
Will the products be affordable?
How will employers respond?
Employer Response – there is a great deal of discussion but very few decisions have been announced (although some are likely in place but not announced).
Will a generally weak economy and slack labor market play into the decisions? Time will tell.
A strategy of self-insuring may gain favor, and I will do a separate post on that topic.
Providers – the word I hear most often is “chaos.” Providers are trying to prepare for a system as yet poorly defined. Some trends are emerging (integration, the early ACOs) but it is too early to tell how anything will work.
Issues in primary care and rural health care are likely to be especially acute.
Consultants and health care focused lawyers are raking it in – so somebody wins.
Electronic Medical Records and Electronic Health Systems – this has the potential to turn into a nightmare
*grumble* This could have been avoided with single payer.
NC has opted out, including opting out of Medicaid expansion. Kiss our rural hospitals goodbye – the ones that had managed to hang on, that is. As for the estimated 500,000 people who will fall through the cracks, “shit happens”.
Last night our new governor gave a very mediocre State of the State address, where he touted job creation as one of his administration’s main goals. So, I guess killing the estimated 25,000 jobs they figured the Medicaid expansion and the new exchange would have generated are what? Sacrificial lambs??
Tom aka Rusty Rustbelt: There is a calculator out in interspace that gives the following results for calculating Obamacare subsidies:
1. $62,000 income
Quote:
Calculator
Number of family members (1-8) 2
Annual family income $62,000
Age of the youngest adult in the family (ages 19-64 only) 64
Federal poverty level 400%
Monthly Premium
Total Premium, No Subsidy $1,723
Maximum % of Income Towards Premium 9.5%
Premium Cost to Family $491
Federal Premium Subsidy $1,232
Annual Out-of-PocketLimit on Deductibles, Co-Pays and Other Cost Sharing $12,800
2. $63,000 income:
Quote:
Calculator
Number of family members (1-8) 2
Annual family income $63,000
Age of the youngest adult in the family (ages 19-64 only) 64
Federal poverty level 406%
Monthly Premium
Total Premium, No Subsidy $1,723
Maximum % of Income Towards Premium N/A
Premium Cost to Family $1,723
Federal Premium Subsidy $0
Annual Out-of-PocketLimit on Deductibles, Co-Pays and Other Cost Sharing $12,800
Is this calculator operating correctly? Here is the calculator link:
http://laborcenter.berkeley.edu/healthpolicy/calculator/
ObamaCare does absolutely nothing to control health care costs. Health care costs are already increasing and projected to increase more. Private premiums are rising. The CBO estimates it will cost $1.7 trillion over the next decade (instead of the original estimate of $800 billion). Employers are dumping their employee plans. The Medicaid rolls are projected to increase substantially. Only about 60% of the uninsured are projected to get insurance. It’s a special interest group boondoggle. ObamaCare took a messy health care system and messed it up exponentially more. Congress should have just addressed specific issues like pre-existing conditions and specific cost constraint issues. That approach would have gained wide bipartisan support.
Annalee:
Looks reasonable with a driveby glance. I will put some time into it later today.
Cynthia:
You sort of agree with my “theory of complexity” (the higher the complexity the lower the possible of successful implementation).
There are many “what ifs” In PPACA and some of them might, just might, bring down costs.
This is how you Healthcare: American Death in London
https://www.nsfwcorp.com/dispatch/this-is-how-you-healthcare
A word “chaos” can be applied to the healthcare in general. Everything that has been done lately (I mean so-called improvements) did not do any good to people. Medicine is still not affordable. So where exactly people should get money in a jobless country to have a good treatment? Do they have to go to instant online payday loans? The answer is no. They should not sign up themselves for a debt! Obamacare is such a failure made by the President we’ve chosen for the second time. Well not me personally though. “Complexity” is a very good definition which says it all.
This comment has been removed by the author.
Alicia, I guess you don’t know that most of the Obamacare provisions don’t take effect until next year. Once it does, people who get healthcare insurance through it will, presumably, have access to insurance that includes a prescription benefit.
Why is it that there are still, I guess, a good number of people who think Obamacare has already taken effect–yet it somehow managed to miss them! Do they even know what Obamacare IS?
actually, beverly, some of obamacare wont take effect till 2015:
HHS Delays Basic Health Plan Option Until 2015 – Capsules – The KHN Blog: The Obama administration has delayed by one year the rollout of a health program aimed at low to moderate-income people who won’t qualify for the expanded Medicaid program under the federal health law.
Under the so-called Basic Health Program, some states had planned to offer government insurance to people who don’t qualify for Medicaid, but who would be hard pressed — even with federal subsidies — to afford the premiums and cost-sharing of plans offered in the new insurance marketplaces. Those earning up to twice the federal poverty level, or about $47,000 for a family of four, would have been eligible.
The Department of Health and Human Services on Wednesday said it basically ran out of time to put out guidelines to get the program running by 2014.
that notwithstanding, ive seen more negative press on ACA in the last 10 days than the previous ten weeks…not just the usual suspects either, some from the likes of H&R Block & the AFL-CIO…maybe i’ll gather a bunch & send them to dan, let you all sort thru em…
I was told that here in NC, H&R Block is warning people that they will be taxed heavily if they don’t get insurance and then direct them to Blue Cross Blue Shield. Setting aside that the tax penalties don’t kick in yet and are graduated after that, where does H&R Block, or any such entity, get off directing their clients to a particular insurance provider????
the H&R Block story that ive been seeing, sandi, has them POd that they’ll get blamed when people’s refunds are withheld for obamacare penalties….
H&R Block warns millions not prepared for Obamacare penalties – The Washington Post reports this morning that tax preparer H&R Block is warning that millions of Americans will be in for a shock in a few years’ time when they don’t get the refunds they were expecting, thanks to Obamacare.
Thanks, rjs. That’s what I get for playing “telephone”. Seriously, I should have double-checked my source.
Hi
Health Care Thoughts: Law of Unintended Consequences
Unions have been enthusiastic supporters of Obamacare.
But not all unions and not all unions benefits are the same. Unions with lower income members are suddenly discovering the PPACA deal is not so great for everyone.
Lower income workers with union plans will not be eligible for subsidies, and now the unions want to change the rules. Unions lobbied for this early on but were denied by the Obama administration.
(There is no monopoly on self-interest here, some large businesses (think Wal-Mart) will be maneuvering to dump workers into state Medicaid plans.)
Employers with union plans are paying higher premiums as the working class pays for improvement in coverage mandated by PPACA. This can be critical in bid areas such as construction. Unintended consequences can be quite cruel.
By:vertical pharmacy
I got 900 dollars back in refund from Tufts due to the MLR restrictions on admin costs….but people tend to count loses more heavily than gains.
I also would like to compare trends in employers dumping healthcare insurance coverage over time…my assumption is that it has been ongoing as cost continues to go up regardless of Obamacare.
There is some indication the slowing of medical inflation is actually still occurring.
The whole notion of complexity and the private sector is worth exploring as well….reimbursements have steadily decreased for service for the last five years from Blue Cross Blue Shield and others to service providers, and the ‘customary’ fifty minute hour for TX has been abandoned to 45 minutes with commensurate reduction in reimbursement on top of this years reduction overall to rates.
Complexity is so rampant that BC/BS has stopped payments for the last two months and predicts into the end of March before payments begin again. Not a peep?? This is the private sector chaos…how is that not part of a larger re-alignment regardless of Obamacare.
Cynthia:
We have been over this before so I will keep it brief; “no, you are wrong.”
Can someone address Plendil’s comment?
She writes, “Lower income workers with union plans will not be eligible for subsidies, and now the unions want to change the rules. Unions lobbied for this early on but were denied by the Obama administration.”
I don’t understand the comment. Lower income workers with union plans will not be eligible for subsidies, but lower income workers with union plans are not eligible for subsidies WITHOUT Obamacare. And now the unions want to change the rules. OK, what rules? They want Obamacare to allow lower-income workers with union plans to be eligible for subsidies? Why does she object to the unions’ wanting to have that rule changed? Unions lobbied for this early on but were denied by the Obama administration. So now … what?
Employers with union plans are paying higher premiums as the working class pays for improvement in coverage mandated by PPACA. But Obamacare doesn’t begin until next year. So employers with union plans may be paying higher premiums, but it’s not because of Obamacare. If employers, rather than employees, with union plans are paying higher premiums, then it’s the employers, not the working class, that will be paying for improvement in coverage mandated by PPACA, unless the employees’ wages are cut, which is unlikely in a union shop. Or is “employers” a typo, and she meant “employees”?
This can be critical in bid areas such as construction. Is she saying that employers with union plans can’t compete with non-unionized employees because the employers will have to pay more in coverage mandated by the PPACA? But why would that be? Aren’t non-unionized employers and employees subject to the PPACA, too?
What gives? Does anyone know?
i dont know enough about ACA to to opine, but here’s some stories that have been in the news; dont know if they’ll explain it…
Labor unions that pushed Obamacare through want out – Washington Times
Unions Insult Taxpayers with Obamacare Subsidy Request
& glenn beck is on it too:
Union bosses “shocked” by Obamacare cost increases
here’s on walmart: Walmart Bails On Obamacare-Sticks Taxpayers With Employee Healthcare Costs – Forbes
Thanks, rjs. I clicked the link to the Washington Times article and flatly didn’t understand it. It was an incoherent rant. Or at least like coming in in the middle of a movie you know nothing about.
So I clicked the Heritage article link. The article is coherent. It also is ridiculous. The highlight is:
“However, it appears the unions were too busy supporting Obamacare to do the math. Unions are now asking for a reprieve from the higher costs in the form of taxpayer subsidies for their lower income workers with employer-sponsored insurance. However, the subsidies are only intended to go to those purchasing coverage in the new exchanges, not to anyone with employer-sponsored insurance.
“To be clear, they want taxpayer subsidies to offset the cost of their insurance while non-union workers in the same predicament would not receive help.”
However, the subsidies are only intended to go to those purchasing coverage in the new exchanges, not to anyone with employer-sponsored insurance. Um, OK, but the union members aren’t employees of the union; they’re members of the union, which is an organization that is in no way affiliated with the union members’ employers.
And while the subsidies may be intended to go mainly to those purchasing coverage in the new exchanges, the reason for that is that almost everyone who already has insurance has it through their employer, which pays all or much of the premiums as part of the employee-compensation package. Which makes pretending that union members are union employees ridiculous.
That last sentence–“To be clear, they want taxpayer subsidies to offset the cost of their insurance while non-union workers in the same predicament would not receive help.”–is, um, well, not clear at all. Or, more likely, not accurate. Non-union workers are not in the same predicament. They get their insurance through their employer, who will be paying the additional premium costs. Thus, the Walmart tack.
I was pretty sure Plendil’s comment was, um, misinformed, or just made no sense, but I thought maybe there was something I was missing. And there was: she gets her news from the rightwing media loop. She should try reading some impartial news sites. I recommend NPR’s website. It’s really informative gets its info from experts and others with actual knowledge of the subject rather than a wacky political agenda. These are important enough issues that she should take the trouble to wander outside of her comfort-zone zone.
And, btw, those articles both were published within the last week and they indicate that the unions only recently made the request to the Obama administration. There’s been no denial, nor approval, of the request.
from looking around, beverly, i gather that this all might have started with a Jan 31 wall street journal article titled: “Some Unions Grow Wary of Health Law They Backed”
if i link to it here, all you’ll get is their pitch to subscribe…so i suggest you access it using google..
I just clicked the Beck link you gave, which is from Jan. 31. Here’s the main part:
Here is what the Wall Street Journal is reporting:
Labor unions enthusiastically backed the Obama administration’s health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour.
Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26.
To offset that, the nation’s largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance.
In early talks, the Obama administration dismissed the idea of applying the subsidies to people in union-sponsored plans, according to officials from the trade group, the National Coordinating Committee for Multiemployer Plans, that represents these insurance plans.
“Here’s the point of the story: The point of the story is these labor unions that knew,” Glenn said candidly. “They helped design it [Obamacare].”
“They knew full well. Anybody knew. These guys are supposed to be in the business world. If you don’t run from your labor union at this point, if you actually believe that they didn’t know, you are beyond help,” Glenn added.
What this means is, all of the union members who have been paying dues to be protected and well insured are out of luck. They’re going to be dumped into the federal pool.
“Congratulations. Teamsters, AFL‑CIO, you are the first to be dumped into universal healthcare,” Glenn said.
—-
Sooo. Here’s the actual main point of the story: Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26.
And all of the union members who have been paying dues to be protected and well insured will now be better protected and better insured. Unless of course you think caps on medical benefits and on prescription drugs are better than no caps on medical benefits and on prescription drugs.
PS: I’m really not sure why unions should be treated as employers under the PPACA. Their nature and function are entirely different than the nature and function of an employer. Mainly, as I pointed out above, they certainly don’t pay their members compensation in return for labor, so health insurance isn’t part of compensation.
quoting the WSJ after that Beck excerpt:
Contacted for this article, Obama administration officials said the issue is subject to regulations still being written.
Some 20 million Americans are covered by the health-care plans at issue in labor’s push for subsidies. The plans are jointly managed by unions and employers and used mostly by small companies. They are popular in industries such as construction or trucking or hotels, where workers’ hours fluctuate. By contrast, unionized workers at big employers such as Goodyear Tire & Rubber Co. GT -2.38%tend to have a more traditional insurance arrangement run through only one employer.
Top officers at the International Brotherhood of Teamsters, the AFL-CIO and other large labor groups plan to keep pressing the Obama administration to expand the federal subsidies to these jointly run plans, warning that unionized employers may otherwise drop coverage. A handful of unions say they already have examined whether it makes sense to shift workers off their current plans and onto private coverage subsidized by the government. But dropping insurance altogether would undermine a central point of joining a union, labor leaders say.
“We are going back to the administration to say that this is not acceptable,” said Ken Hall, general secretary-treasurer for the Teamsters, which has 1.6 million members and dependents in health-care plans. Other unions involved in the push include the United Food and Commercial Workers International Union and Unite Here, which represents service and other workers.
Employers and consumers across the country will see big changes under the health law, which goes into full effect next year. Insurers will no longer be able to deny coverage to people with pre-existing conditions. Most individuals will be taxed if they don’t carry insurance, and employers with at least 50 workers will face a fine if they don’t provide it. About 30 million Americans are expected to gain insurance under the law.
more:
John Wilhelm, chairman of Unite Here Health, the insurance plan for 260,000 union workers at places including hotels, casinos and airports, recalls standing next to Barack Obama at a rally in Nevada when he was a 2008 presidential candidate.
“I heard him say, ‘If you like your health plan, you can keep it,’ ” Mr. Wilhelm recalled. Mr. Wilhelm said he expects the administration will craft a solution so that employer health-care plans won’t be hurt. “If I’m wrong, and the president does not intend to keep his word, I would have severe second thoughts about the law.”
If unions don’t win the subsidy argument, they say that companies with unionized workers would become less competitive, especially compared with rivals too small to face the law’s new requirements.
For the Obama administration, holding firm against union demands for subsidies risks alienating a key ally. Giving unions a break, however, would not only increase the cost of the law but likely open the door to nonunion employers in a similar situation who would demand the same perk.
The 2010 Affordable Care Act generally excludes workers with low incomes from tapping subsidies if they already have insurance from an employer that is affordable and meets the law’s minimum standards. Another exception is if they have access to government plans such as Medicare or Medicaid.
Obama administration officials declined to answer questions about whether union-employer plans could qualify for subsidies under the law. A spokesman for the Treasury Department, which will administer the subsidies as tax credits, said: “These matters are the subject of pending regulations. We will continue to work with employers, workers, consumers and businesses to implement the health-care law.”
& more:
Under the health law, households earning up to 400% of the poverty level—$92,200 for a family of four last year—will be eligible for tax credits to offset the cost of private insurance. The less a household earns the more generous the subsidy.
Union plans covering 2.3 million people won waivers to the health law’s early requirements, as did a number of nonunion plans. That has put many unionized plans behind in adapting to the law.
Among them is the Sheet Metal Workers Local 85 in Atlanta, which has about 1,900 members. Next year it must lift the $250,000 annual cap on the amount it will pay for medical claims. The law’s requirements will add between 50 cents to $1 an hour to the cost of members’ compensation package, said Randy Beall, business representative and political director for the local.
Mr. Beall worries this will give small, nonunion contractors who don’t provide health insurance an edge in getting work. Those with fewer than 50 workers won’t have to pay a penalty for not providing health insurance and their workers can tap federally subsidized plans, giving the contractors an insured workforce at lower cost.
The Sheet Metal Workers International Association helped push for passage of the health law. Mr. Beall said he still believes everyone should have health insurance, but worries the law is undermining the union’s ability to offer coverage.
“If we’re not offering our members insurance and pension, why would you want to be union?” he asked.
Thanks, rjs. Okay, at least now I understand what the situation is. These are hybrid union/employer-sponsored plans. “The plans are jointly managed by unions and employers and used mostly by small companies,” I assume means, “The plans are jointly paid for by unions and employers and used mostly by small companies.”
So the question is whether these plans should be treated as employee-paid plans, or not.
But what I don’t understand is these two paragraphs:
“For the Obama administration, holding firm against union demands for subsidies risks alienating a key ally. Giving unions a break, however, would not only increase the cost of the law but likely open the door to nonunion employers in a similar situation who would demand the same perk.
“The 2010 Affordable Care Act generally excludes workers with low incomes from tapping subsidies if they already have insurance from an employer that is affordable and meets the law’s minimum standards.”
The writer of the article seems to conflate unions with employers; he or she treats them as interchangeable. Giving unions a break, however, would not only increase the cost of the law but likely open the door to nonunion employers in a similar situation who would demand the same perk? It would increase the cost of the law, but why would it–or at least, why should it–open the door to nonunion employers in a similar situation who would demand the same perk? Specifically, how can nonunion employers be in a similar situation? Employers, unionized or non-unionized, pay compensation to their employees, in the form or salary or wages, and benefits. Unions, by contrast, rather than pay their members compensation, receive payments FROM their members, for dues. This is a particularly ridiculous false equivalence.
The 2010 Affordable Care Act generally excludes workers with low incomes from tapping subsidies if they already have insurance from an employer that is affordable and meets the law’s minimum standards. Exactly. These union members don’t have insurance from their employer. They have it through a joint payment by their employer and their union. Without the union’s payments toward it, they would have no insurance at all. And without subsidies, the low-income union members will not have a plan provided by anyone, unless the union raises its dues for members whose income level should qualify them for subsidies.
it’s beyond me, beverly; i gave up trying to figure out what the law did when we didnt get single payer…i see many articles about hidden costs, penalties and taxes and i cant tell if theyve got something or just putting a negative spin on it…rube goldberg couldnt have come up with a more conplicated contraption himself..
I know. But Romneycare works well in Mass. I’m not sure why this is proving to have so many more twists, turns and somersaults. I think we will have a slow changeover to single payer, via a public option, beginning within the next decade. Which is a long time to wait.
Beverly:
Plendil (?) reported most of one of my old posts.
It appears from the thread that all of you have found enough sources to sort of figure this out.
The whole world of health insurance, both pre-PPACA and post-PPACA is immensely complex, and the union-employer thing is something many haven’t thought about.
The law of unintended consequences is very cruel, especially in complex systems.
Morning:
– States defaulting to the Federal Gov (such as Michigan) are mostly being defiant. The Michigan Republican legislature believes they can opt out of the exchanges, have expressed such, will have it crammed down their legislative throats by the Fed Government, and have given-up the choice in how it will be created in the state.
– Michigan State legislators such as John Hune are more concerned about insurance companies in limiting aurtomotive insurance liability through offering saleable limits to consumers rather than addressing the rising costs of healthcare. Once the capped insurance is used up, those with life time injuries will be on the street (unless covered by Medicaid/Medicare) with no alternatives.
– The 60% uninsured Cynthia cites above is the result of states opting out of the Medicaid expansion (as determined by SCOTUS) and is not the fault of the PPACA. Obama has stated the Dederal Gov will cover 100% of the expansion and gradually decrease it to 90%. The fear of the House decreasing this is a real one if the House stays under the Republican party’s thumb unless the Senate takes up the cause of the poor.
– Employers are dumping? Restaurants are attempting to do such and some such as Papa Johns, Olive Garden, etc. are making a big deal over cost when in reality it may raise the cost of a meal 10 cents?
– CBO study: The CBO was called to the table by Naked Capitalism running the Louise Sheiner and Glenn LaFollette study which pretty much states that growth under 1% in healthcare costs will not crowd out other essentials and can be covered in GDP growth. The PPACA is starting to reeduce healthcare costs and the most recent estimate is $100 billion less.
– Complexity? Show me a commercial insurance plan that was not complex before citing the PPACA as complex.
– BiPartisan support? Yea right Mitchie, Johnnie, and the Republican party made it their mission to oust Obama after 1 term. Nothing presented in either the House or Senate has had bi-partisan support until this last year when Obama called the Republican’s bluff on sequestering.
– As far as a special interest group boondoggle? Where were the Repubs and the Blue Dogs during this development of the PPACA. Senator Liberman (the Senator from Aetna), Baccus (who wanted a special Nebraska deal) and the others were out protecting the healthcare industry through their lobby.
– That Single Payor, Universal, or Medicare for all is a better alternative is true; but, the special interests defeated such proposals. We have the PPACA now which is better than nothing.
– Unions? “Treatment of Multiemployer Plans Under the Affordable Care Act” http://www.nccmp.org/pdfs/NCCMP%20Paper%20%28Final%29_1%20%282%29.pdf
“How PPACA impacts union health benefits” http://nwlaborpress.org/2012/03/nccmp/
Much of this falls under Taft-Hartley; but, there does not appear to be any reason union coverage can not be under PPACA auspices.
Kaiser Healthcare Calculator http://healthreform.kff.org/SubsidyCalculator.aspx
my reform plan was pretty simple, bill…outlaw private insurance and nationalize pharma & the health care providers…
– Complexity? Show me a commercial insurance plan that was not complex before citing the PPACA as complex.
There is a lot more to PPACA than simply rearranging insurance coverage, including hoping to rearrange the entire provider base and rearrange all payment systems.
Massive and complex.
So true. rusty.
And, great post, Bill.
I’m certainly for single-payer insurance, rjs, but I would not nationalize pharma or care providers. I would, though, place limits on pharma’s freedom to set prices on drugs and devices whose development came in part from federally funded research. And I would have the federal government pay medical school tuition, thus eliminating an important supposed ground for outsized physician fees, bringing them more in line with physician compensation in other developed countries. (I’m NOT a physician basher, and I’m well aware that internists and other primary-care docs’ incomes are not astonomical.) As for hospitals, I don’t know what I would do. I don’t know enough about how they operate. But the for-profit ones strike me as really troubling.
i was being facetious, beverly…my quip wasnt meant to be a realistic suggestion, just to convey my attitude…
Ooops. That’s what I get for being in a humorless mood today.