Health reform implementation

The Obama administration on Thursday released new guidance to help small businesses claim the tax credits they're eligible for under the healthcare reform law.

According to the administration, the new guidance "addresses small business questions about which firms qualify by clarifying that a broad range of employers meet the eligibility requirements," including:

• Employers that pay for a portion of their employees' healthcare costs through a broad range of contribution arrangements. This includes firms that pay more to help older workers cover the higher premiums and firms that allow employees a choice of coverage;
• Religious institutions that provide coverage through denominational organizations. While the credit is for employers that fully insure in most cases, denominational organizations that self-insure their coverage can qualify for the credit; and
• Certain small employers that cover their workers through multi-employer healthcare and welfare plans. This is true as so long as 100 percent of the cost of coverage for all employees covered by the multi-employer plan is paid from employer contributions and not by employees.

In addition, the guidance includes a one-page form (Form 8941) and instructions to help small businesses claim the credit when they file their 2010 taxes.

The Democrats' law created a tax credit that could save small businesses as much as $40 billion by 2019, according to the Congressional Budget Office. Both for-profit and nonprofit organizations may qualify for the tax credit, but not the self-employed.

Eligible firms will get a 35 percent tax credit for their healthcare costs. To qualify for the full credit, businesses must have fewer than 25 employees, pay average annual wages below $50,000, and pay for most of their employees' health coverage.

The incoming chairman of the House Budget Committee said he'll vote against the debt-reduction plan.

Premiums for employer-sponsored family health insurance increased an average of 41 percent between 2003 and 2009, while deductibles jumped on average 77 percent per person, according to a Commonwealth Fund report released Thursday morning.

The biggest increase in employer-based premiums for family coverage was seen in Louisiana (59 percent) over the past six years, while Delaware experienced the smallest increase (21 percent). In 2009, premiums were highest in Alaska, Connecticut, Massachusetts, Vermont, Wisconsin and Wyoming, where annual costs surpassed $14,000 for a family. The lowest average premium costs ranged between $11,000 and $12,000 for 11 states.

Meanwhile, more workers are paying deductibles — more than half (52 percent) faced a deductible in 2003, while 74 percent faced one in 2009.

If premium increases maintain their current pace, families will pay on average $23,342 by 2020, according to the report, which analyzed the impact of implementing healthcare reform. However, if the Patient Protection and Affordable Care Act is successful in slowing premium increases by 1 percentage point per year, average annual family premiums would decrease nearly $2,300 by 2020, the report said.

“If implemented well, provisions in the Affordable Care Act — including some starting this year, such as tax credits for small businesses to provide coverage, dependent coverage for young adults up to age 26, and elimination of co-payments for preventive care — have the opportunity to reverse these unsustainable increases and ensure that families in every state have access to affordable, comprehensive health insurance,” said Commonwealth Fund President Karen Davis.

Problems implementing coverage requirements for so-called "mini-med" plans are indicative of larger issues rampant in the healthcare reform law, Senate Commerce Committee Republicans said during a hearing Wednesday afternoon.

Republicans took issue with the number of waivers Health and Human Services Secretary Kathleen Sebelius issued to employers offering low-value, mini-med plans. Sebelius has issued more than 100 exemptions to mini med plans, which often fall below the restricted annual limits required by healthcare reform. The law phases out use of annual dollar limits over the next three years until 2014, when they will be banned for most plans.

"We need to be very careful in treading on this ground and look at yet another piece of the healthcare reform bill that may have gone so far overboard to throw the baby out with the bathwater," said ranking member Sen. Kay Bailey Hutchison (R-Texas).

Sen. John Ensign (R-Nev.) said healthcare reform is already proving to cost more than expected.

"This thing is said to have reduced the deficit, but we’re seeing all sorts of unintended consequences with this healthcare reform law," said Ensign. 

Committee chairman Sen. Jay Rockefeller (D-W.Va.), who opposes mini-med plans, described the waivers as a temporary fix and said they will not be necessary when state insurance exchanges, required by healthcare reform, become operative in 2014. Despite defending the waivers, Rockefeller continued to denounce the low-value plans as providing "a false sense of security" to employees.

"It lets them think they have health insurance when they really don’t," Rockefeller said. "By the time they realize they don’t have health insurance, it's too late.”

The American Hospital Association urged antitrust agencies to provide timely and clear guidance on care coordination arrangements among hospitals and other caregivers during a House Judiciary subcommittee hearing Wednesday morning.

The hearing was held as uncertainty grows about how accountable care organizations (ACOs) might run afoul of antitrust and anti-kickback laws. ACOs, which are encouraged by the healthcare reform law, are care delivery models in which providers coordinate care for a group of patients.

AHA general counsel Melinda Hatton said patients will benefit from having a less fragmented system in which providers and hospitals work together to coordinate care. The best way to do this within legal parameters is “to issue user-friendly, officially backed guidance that clearly explains to caregivers what issues they must resolve to embark on a clinical integration program without violating antitrust laws,” Hatton said.

According to her testimony, lawmakers have already urged antirust agencies in three separate letters to provide such guidance.

The AHA also urged the Department of Justice increase its vigilance of health insurers’ anticompetitive behavior. Hatton’s testimony stated hospitals have been subject to much more scrutiny by antitrust agencies, while health insurers “have not faced nearly as much public antitrust scrutiny and oversight.”

With the Senate Commerce Committee’s hearing on so-called “mini-med” health plans set for Wednesday afternoon, the National Retail Foundation (NRF) warned that chairman Jay Rockefeller (D-W. Va.) will try to push the coverage out of the marketplace, despite Obama administration efforts to keep the low-value plans in place.

Low-wage employers, including retailers, have said that they will have troubling meeting the healthcare reform law’s medical-loss ratio (MLR) standards requiring that health plans spend at least 80 percent of premiums on care (85 percent in the large-group market). Some low-wage employers have been offering low-value “mini-med” plans, with some providing as little as $2,000 in coverage per year.

Although the mini-med plans have been the subject of criticism in recent months, the NRF has had a “positive” experience working with the Obama administration to accommodate the plans, said NRF vice president for healthcare Neil Trautwein in a blog post Tuesday. The Obama administration has created a "fair" waiver process for restrictions on annual benefit limits and created a methodology to help plans meet new MLR standards in 2011, Trautwein said.

The NRF warned that 1.4 million Americans will lose their coverage if mini-med plans are eliminated.

“There is not an affordable substitute in the insurance market today nor can the hard-pressed state Medicaid rolls take on these newly uninsured Americans,” Trautwein said. “They will be forced to wait for new coverage options available under [healthcare reform] in 2014.”

The Senate Commerce Committee hearing, “Are Mini Med Policies Really Health Insurance?” is scheduled for 2:30  p.m. Wednesday.

Implementation of a healthcare reform provision requiring limited payments to Medicare Advantage (MA) plans has barely disturbed the industry so far, according to a Washington Post report. 

The law limits the amount of money the government gives to MA plans, which allow Medicare beneficiaries the option of receiving their benefits through private health insurance plans. In total, the government is expected to save $145 billion over the next 10 years.

According to the Post, healthcare plan premiums have not risen significantly and benefits have not been limited since the law was enacted. Fewer healthcare plans will be offered in the coming year but not as a result of healthcare reform.

In September, the Obama administration said enrollment in the MA program will increase by 5 percent in 2011, while average premiums will drop by 1 percent.

Rep. Eric Cantor said Monday that popular parts of the health law will be addressed in the GOP's alternative plan.

Two weeks after the Centers for Medicare and Medicaid Services launched an innovation center to improve care and cut costs, the agency announced new roles for key staffers last night, according to an internal memo obtained by The Hill.

Julie Boughn, who had been serving as the chief information officer and director of the Office of Information Services (OIS), will join the Center for Medicare and Medicaid Innovation as the acting deputy director, serving under acting director Richard Gilfillan.

Tony Trenkle, who had been the director of the Office of E-Health Standards and Services (OESS), becomes acting director of OIS. Karen Trudel, who was the OESS deputy director, becomes the office’s acting director.

The innovation center, which was created by healthcare reform, was launched Nov. 16. At the time, CMS Administrator Donald Berwick said the center will address the fragmentation of the health care system.

The Senate on Monday night defeated two amendments designed to ease the tax-filing requirements for small businesses.

Senators voted 61-35 — six votes short of the necessary 67 — to reject an amendment by Sen. Mike Johanns (R-Neb.) that would strip a provision from the new healthcare law that requires businesses to report supply purchases of $600 or more with a single vendor. Likewise, the chamber voted 44-53 to defeat Sen. Max Baucus' (D-Mont.) amendment, which would accomplish the same provision but is unpaid-for. That amendment also required 67 votes.

At issue is a section of the new healthcare law that requires businesses, charities and state and local governments to file 1099 reports for all transactions above $600 per year. The votes also represented a noteworthy showdown between Johanns and Baucus, who presented a similar idea but did not fund it through offset spending cuts.

Johanns said his approach was wiser since it was funded through unspent federal monies, directing the federal Office of Management and Budget to cut $39 billion in funds that would have been generated by the 1099 mandate.

But Baucus noted that 67 votes were needed for either approach, calling such a threshold “pretty close to impossible” with the 58-42 breakdown of the Democratically controlled Senate during the current lame-duck session. Much of the argument came down to the decision-making power that would be invested in the executive branch to determine any spending cuts.

Johanns indirectly ridiculed Democrats for shying away from supporting President Obama, but Democrats said they wanted to preserve congressional power. They noted that the Johanns amendment would force cuts to be determined solely by the White House’s Office of Management and Budget.

The Johanns amendment "would give the unelected director of OMB unprecedented authority to slash spending, all on his own," and it "would thus abdicate Congress’s responsibility over the budget,” Baucus said.

The votes came after a 69-26 vote to end debate on an overall food safety bill. The successful vote was widely expected and suggests an equally successful final vote for the food safety bill on Tuesday.