Health Reform Update: 8-12-13
General -According to a new Congressional Budget Office (CBO) analysis, the one year-delay in enforcement of the Affordable Care Act’s (ACA) employer mandate penalties will result in a 10-year federal budget cost increase of $12 billion, roughly 1 percent of the ACA’s total costs. The biggest factor in the increase is an estimated $10 billion reduction in employer penalty payments that would have been collected in 2015.
Federal -Administration officials stressed that the exchanges will be ready on October 1. Republican members of the committee raised concerns that the Administration does not recognize the ACA-related challenges that consumers and businesses are experiencing. Democrat members emphasized the law’s popular provisions and that the average cost of “silver” plans will be 18 percent lower than HHS’ original estimates for 2014 individual market premiums. These assertions about lower costs still ignore the true comparison of costs pre-versus-post Health Reform.
MARYLAND: Aetna has pulled out of participation in the Maryland Health Connection (new exchange) effective with the startup of Obamacare on 1/1/14. While all carriers participating have submitted rates to the state commission, the approved rates are all lower than the carriers initially sought. Although Maryland is boasting the lowest health reform rates of those states setting up their own exchanges, it will be interesting to see how much rates climb over the next 12 to 36 months. The predominant rating factor in future pricing is the ACA requirement of 80% of the premium dollar being spent on healthcare; if that percentage is exceeded, rates will climb accordingly aside from any other influencing factors.
Virginia: Virginia is using the Federal Health Exchange, as opposed to creating their own exchange as Maryland and the District have done. The basics are very similar to MD and DC.
There are four levels of coverage available (as in DC and MD): bronze, silver, gold and platinum. Each tier will have several plans to choose from. The platinum tier will have the highest monthly premium and richest benefit, and is designed to pay 90% of medical expenses. It scales down accordingly in both price and benefit level; Gold pays 80% of medical expenses, Silver pays 70% of medical expenses, Bronze pays 60% of medical expenses.
District: There are no significant updates since our last communication.
Individuals can buy health plans if: 1) there is no employer-sponsored health plan or 2) if the employer-sponsored health plan is unaffordable or 3) if the employer-sponsored health plan doesn’t offer minimum essential coverage. If individuals meet certain income levels, they may even be able to get a tax credit to help pay for the coverage or subsidies to help pay their health care costs.
Jon Belinkie, President