Penalties Under the Affordable Care Will Hit Lower Income Workers Hard

tax-penalties-carousel-rappler-20140416New Orleans    The good news in the narrative of Obamacare is that everyone gets covered, there are basic guarantees, and in 60% of the states more people, particularly lower income children, are covered by expanded Medicaid. Those are just the highlights, and they are lifesaving. The controversy continues for conservatives and businesses around the mandates, the fact that all businesses of a certain size are required to provide coverage. In truth, this is largely a fiction. The quieter, more painful, side of the mandates is the fact that everyone is required with some exceptions to embrace the coverage offered and available, and if not are also required to pay a penalty. The penalties were relatively trivial, but are becoming more expensive.

The fictional burden for companies has proven to be Swiss cheese, a drum I’ve admittedly been beating for several years now. Payments for monthly premiums could not be higher than a certain percentage of a worker’s gross payroll, but unlike the Massachusetts model, there were no limits on deductibles and little to none on co-pays. Nursing home chains, janitorial contractors, mental health and home care providers and untold other employers demanded and eagerly received from the insurers bare bones, narrow network plans with deductibles ranging from $4000 to $6500 along with significant increases in co-pays and of course required payment of monthly premiums.

The real cost to employers? Almost nothing in practice, because lower waged workers, making less than $15 or $20 per hour are priced out of such policies both by dollars and common sense. If a nursing home worker is making $10 per hour – and many aren’t! — and works an industry standard 35-hour week while being paid for annual labor about $18,000 in gross wages, and might be facing a $5000 deductible and to be conservative another $1000, she would be losing one-third of her income before she was able to access any benefits from the plan other than the statutory minimums. Why would she enroll in the employer’s plan if she were looking after her own economic self-interest? No reason, and in fact as Local 100  looks at the participation numbers from workers we represent, almost no one is signing except those who anticipate critical or catastrophic care situations like imminent surgery.

The math for the worker in this situation when required to pay penalties, as they are in Arkansas for example, at the 2.5% assessment would be $450. Cheaper to pay the piper than the policy. In Louisiana, Texas, and the other 18 states that did not expand Medicaid, if these workers would have been eligible, and with this income and likely family size, most of them would have been, they are exempted from paying the fine. There are other exemptions, but most are catastrophic in nature as well: homelessness, medical debt, unemployment, and worse.

Everyone is talking about inequality. Politicians, economists, and columnists on all sides of the spectrum make the point about jobs increasing but wages remaining stagnant, so the paradoxical impact of this healthcare conundrum is that the pain will worsen for lower income workers with largely frozen wages. In a ton of states not only will these workers not get raises, but they will pay in this example a fee out of their tax returns collected by the IRS.

For the nursing home worker we have used as an example, a $450 penalty under the Affordable Care Act is equal to twenty-five cents per hour in lost wages. In states throughout the South with strapped budgets and reduced reimbursements for such workers, they would need to win a 2.5% wage increase just to stay even, and without a union that’s not going to happen, and in all likelihood even with a union that’s going to be rare. Such a worker, and there will be millions of them, will wake up in 2016, 2017, and find themselves in a situation where they are in a double bind with a smaller paycheck and still no healthcare coverage thanks to the miserly offering of their employer and the loopholes that allow farcical coverage to mask as real insurance.

This is a huge problem, and it is not going to end well.

 

Congress is the Undercard, the Real Fight for Healthcare is Still Corporate

imrs.phpNew Orleans   Recently the House of Representatives voted to repeal the Affordable Care Act for something like the 62nd time. They have now almost banned Obamacare from being funded as many times as they have barred ACORN! The more you understand about the continued tug of war behind the scene with employers, hospitals, drug companies, doctors, and insurance companies, the more you realize the political machinations on the front pages are window dressing, just part of the puppet show as the pols are pulled back and forth, up and down by the big players. Not to mix too many metaphors, but they are the weak under-card in this fight, while the heavyweights are the companies punching back and forth for advantage.

Of course we have the scandalous way that some drug companies are trying to play arbitrage with people’s health and hike the prices of rare drugs through the roof, regardless of the body count, not caring about anything other than making Wall Street happy. This situation is so grotesque that Congress may be forced to do something about it. We also have 800 pound gorilla setting on the examining table and continuing to pose the most serious problem, increasingly noticed, but left unattended, and that is the persistent problem that employers did not play fair on Obamacare and have largely squeezed through the loopholes, providing coverage in name only with deductibles, co-payments, and monthly bills all collectively so high that millions of lower waged workers are having to embrace the fines, because actual health coverage on offer is financially out of their reach and unreasonable.

A story in Modern Healthcare about the insurance companies’ tug of war was also depressing and enlightening particularly because the companies continue to play such a huge, daunting role in the exchanges, pricing, and coverage. CMS, the Obamacare administrator, is trying to nail down regulations for 2017, understanding that they need to lock as many backdoors as possible before the Obamas pack out of the White House. They proposed a rule that would require any health insurers to require all insurer networks “to include hospitals and doctors within certain travel times or distances from members. There would also be minimum provider-to-member ratios for some medical specialties. The CMS wanted to make sure consumers had access to enough healthcare providers as more insurers moved to narrow-network products.”

And, that’s when everything hit the fan. The CMS is basically trying to make sure that those who buy into care get a standard package across the country to meet their health needs. The insurers and some of their buddies in the state insurance commission offices, who are most frequently their captive audiences, in some states are crying like stuck pigs. They claim they want to tailor the networks to each state rather than have a federal cookie cutter approach, but the real deal is likely just making a deal that makes the big insurers they are used to currying happier to do business with them. Many hospitals and doctor groups line up with CMS on this one rather than being hammered even harder by the insurance bullies. According to Modern Healthcare some of them even advocate that “the CMS…go a step further and build network standards for appointment wait times.”

Meanwhile hospitals and doctors have their own issues. Doctors employed by hospitals in Oregon have even organized a union because of rough handling by the hospitals. Hospitals are being scored by CMS for service, recovery, and billing and some of the outfits that can’t make the mark are squealing about the scores rather than trying to do better on the tests. Meanwhile hospital requirements for providing affordable care to justify their tax exemptions, enjoyed by many, are still resisting and avoiding any accountability.

My best advice is to not take your eye off of the healthcare fight. It’s a long way from over yet, and any notion that we won, has been gone since the early rounds.

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Please enjoy Since You Been Gone by The Heavy.  Thanks to KABF.

Affordable Care is Simply Not Affordable

HealthCareGovSiteNew Orleans    The more studies that are done, the more time that passes, the more it seems impossible to get around the core issue embedded in the compromises of the Affordable Care Act: it’s just not affordable for lower income families.

The government’s projections for the current signup period are frankly modest at about nine million signups, rather than the twenty million projected several years ago for this period. Given the number of states that continue to boycott the expansion of Medicaid, which is where a lot of the gap for the uninsured continues, the budget offices are finding the predicted costs of Obamacare are about 20% lower than originally expected.

Furthermore, the mandate is not pushing enough people into insurance who don’t have it, particularly among lower waged workers. Studies are finding that at about $40,000 the maximum participation is achieved. Lower income families are simply paying the penalty, because it’s cheaper than the insurance bite.

Reports from employers are very depressing, though not surprising. Having represented big health care employers with sorry health plans for decades and seen the abysmal participation figures, we were hardly shocked, but still reading figures for huge food service companies with tens of thousands of employees and their reports of only 500 workers out of 25,000 actually signing up for employer insurance is ridiculous. The workers are blocked from access to ACA marketplace subsidies and cost sharing because they have opted out of corporate insurance, but they have opted out because the costs are too high and the benefits are too crummy with essentially catastrophic coverage and deductibles as high as $6000. Who can afford any of that on $10 or $15 per hour?

Increasingly, it seems clear we have a little bit of something for health insurance, but it’s only a bit better than nothing, and under the private company and corporate-centered regime, it’s too pricey and too paltry. We need real national health insurance, but that means a more significant governmental investment, and that is a bridge way past the level of political consensus.

It is also way past the level of public support, which fuels the continued opposition to Obamacare. When even the primary beneficiaries of the program among low-and-moderate income families are still priced out of the market, who is left to show the program the love it needs and deserves?

Half-stepping clearly has only gotten us halfway to where we need to be. We shouldn’t be surprised, but that doesn’t make it any easier to live with the disappointment or the continued perilous state of national health protection in the United States for low-and-moderate income families.

The Problem of Obamacare Dropouts: Cost, Confusion, and Language

indexNew Orleans   We’re knocking on the door of another Affordable Care Act enrollment period beginning November 1st. There are ten million eligible people who have not yet received coverage of whom 40% or 4 million are lower income. Reports indicate that there are improvements in the website, but there is no indication that there is improvement in the outreach.

Having labored in the vineyards of the enrollment process, it is hard not to take note of the fact that as difficult as it is to enroll families in the program initially, it is also difficult to keep them enrolled. In 2015 after an announcement that 11.7 million had selected plan in the 2015 enrollment year, latest information from the end of June is that 9.9 million continue to be enrolled for a dropout rate of 15% and almost 2 million people. That hurts! Experts are saying the obvious culprits are costs, especially in all of the states that have not extended coverage and expanded Medicaid services, and confusion, which is part and parcel of the continuing fragmentation of the insurance marketplace and the myriad array of choices that confront families inexperienced with the already opaque health insurance industry.

One element of the confusion that may not be on everyone’s radar may be language and the foot dragging, half-hearted compliance with Title VI of the Civil Rights Act and its requirement that there be no discrimination in this area. Recently we participated in a conference call organized by the Seattle-based Alliance for a Just Society, and listening to the work from various groups around the United States, it is hard not to believe that inability to access the website and documents based on language has to be counted as part of the problem, and one that should be easy to correct. Of course seeming easy and being easy are different things, since many of us no doubt can remember that in the initial enrollment year the government was chronically unable to even make the enrollment website accessible in Spanish, much less other languages that are less ubiquitous in modern America.

The Civil Rights Act requires accommodation, either through accessible printed and on-line materials or by providing – and paying for – translation services. A fair number of languages are seen as the major dozen or so in the United States, but where there is sufficient density in a geographical area, ranging to more than 1000 individuals, the requirements stiffen. The proposed semi-official languages are based on a national grid not local issues, so local community organizations are having to step up to advocate and ensure that underserved populations facing language barriers get needed translation services to navigate the complexities of the health insurance mandate. There was talk of a new rule making process so that will have to be kept on the radar as well.

It is unlikely in the current climate of contention that the huge issues of costs and program expansion are going to get a quick fix, but lowering language barriers would seem to be a straight forward objective easily within our reach. What the heck, it’s already the law!

Affordable Care Act Potholes

aca_flagNew Orleans        Some twelve million people may have enrolled under the Affordable Care Act, but that doesn’t mean that Obamacare can catch a break.  Everywhere we turn there seems to be more potholes on the road.

Of course there’s the decision due in June by the Supreme Court on whether or not subsidies can be offered to the poor to enroll in the states where the federal government runs the marketplace.  Worse, dozens of current and former Congressman basically are saying that the four words that are in contention in this challenge were basically a “whoops, my bad” drafting mistake that was never part of debate or deliberation, but always assumed a “no brainer.”  Unfortunately that could still be enough to eviscerate health care coverage for lower income families in many states.

Now new studies and data are also pointing out the obvious problem with tax penalties not being effective in forcing enrollment when they come many months in the spring when taxes are due and long after the enrollment window has closed to gain coverage under the Act.  Interestingly, the lower income families seem more responsive to the penalties than those with more income hinting that the penalties might even be too low.

But, even past these almost technical problems, the concern we have often expressed that too much of the employer and marketplace coverage is simply too thin to cover the care is also becoming more obvious.   Too many people are woefully under-insured.

New estimates from the Commonwealth Fund Biennial Health Insurance Survey for 2014 found that 23 percent of 19 to 64 year-old adults who were insured all year – some 31 million people – had such high out-of-pocket costs or deductibles compared to their incomes that they were technically almost uninsured.  11 percent of privately insured adults had deductibles of $3000 or more in 2014, making any health insurance they might have, catastrophic at best.   The inability to limit deductibles is a huge crisis for lower income workers and their families with these low rider policies.

Normally, we could expect that what is broken could be fixed, but given the political season and the whooping and hollering that continues to be embedded in Congress in the far right efforts to deny healthcare to millions, there seem to be too many holes and not enough shovels.

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Go Ahead And Die! (Pirates Of The Health Care-ibean)  Music by Austin Lounge Lizards

Narrow Networks Prove Price, not Choice, Rules Healthcare Decisions

WebNew Orleans          It’s becoming increasingly obvious that deep down without being willing to admit it, Americans are voting with their feet on the issue of health care and the tally is showing that their real preference would probably be the British National Health Service.  Now, there’s no likelihood of that happening of course but narrow and ultra-narrow networks are mimicking something very similar to that with the lowest price trumping choice at every turn.

In the marketplace offerings provided by the Affordable Care Act for 2014 almost half of the public exchange insurance selections were so-called narrow network options and 20% were ultra-narrow networks.   Narrow networks limit the insured consumer’s choice of hospitals and doctors within the network for their healthcare needs.  An ultra-narrow network provides even more stringent limits.   Of course seeking healthcare outside of that network is going to be more expensive so issues of transparency are central, but the ability of insurers to negotiate better pricing plans through narrowing in exchange for promising more volume of patients is working for both consumers and hospitals.

The McKinsey Center for Health Options quoted in the New York Times:

…found that 70 percent of the lowest-priced plans for 2015 were based on narrow networks of hospitals. They also had much lower rate increases in 2015, with a median increase of 4 percent, about half as much as broader plans.

McKinsey defines a narrow network as being composed of 31 to 70% of the hospitals in a geographical area and an ultra-narrow network as including 30% or fewer hospitals in an area.  Nearing 40% of consumers are choosing these plans and the industry is reporting only about 5% turnover between 2013 and 2014 choices, so that’s what they’re saying and they’re sticking to it.

It seems that consumers are saying two things.  First, that some health care is better than no health care, and, secondly, that the cheaper they can purchase adequate health care, the more that will drive their choices.

The industry would have us believe that this is a hand-clap for the general quality of health care in the United States, and perhaps this is one-hand clapping.  The industry’s earlier harangue about choice, echoed by many conservative politicians, seems on its way to being disproved on several counts. At one level when cost is driving the decisions there are no Marcus Welby’s and young Dr.Kildaires out there; it’s all about the money.  The same can be said about all of the super low end cheapo insurance policies that offered virtually no coverage and then would parade out consumers claiming they loved these worthless products; it’s all about the money.

Americans, like everyone, want to live without fear of dying, and that means believing they can go to a hospital when they feel sick.  In these days where it’s all about the money, they are going to increasingly look for the lowest cost for that simple guarantee, especially now that some kind of choice is mandatory.  In the meantime as the conservatives continue to rail about Obamacare, don’t let Americans know that in places like the United Kingdom and many other countries they can go to hospitals, regardless of income, and get quality care for free, or they might vote for that as well, if they were ever afforded the choice.

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Begging for Change–Healthcare Blues