Budget 2013: Tax Traget Medigap

February 17, 2012 By

The Obama administration wants to raise $2.5 billion over 10 years by imposing a surcharge on Medicare enrollees who buy “near first-dollar” Medicare supplement insurance.

The surcharge would affect enrollees who use Medicare supplement insurance, or Medigap coverage, to fill in the coverage gaps left by the Medicare Part A hospitalization insurance program and the Medicare Part B physician services and outpatient services insurance program.

T he government would collect the surcharge by adding an amount equal to 15% of the average Medigap policy premium onto the Medigap policy owner’s Medicare Part B premium.

The administration has included the proposal in a federal fiscal year 2013 budget proposal.

Fiscal year 2013 starts Oct 1; the new Medigap surcharge would take effect in 2017.

Current beneficiaries and near-retirees would not have to pay the surcharge.

Obama administration officials say the surcharge is necessary because reducing Medicare enrolees’ out-of-pocket costs to very low levels eliminates their incentive to think about cost when they get care.

“Of particular  concern are Medigap plans that cover substantially all Medicare copayments, including even the modest copayments for routine care that most beneficiaries can afford to pay out of pocket.’ officials say.

Bonnie Burns of California Health Advocaates, Sacremento, Calif., says the surcharge would be terrible for consumers.

Burns, who represents consumer interests at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., serves on an NAIC panel that released a discussion paper on first-dollar Medigap coverage in 2011.

Regulators, insurance industry representatives and consumer adocates on the panel all agree on the need to protect consumer  access to Medigap products with low out-of-pocket costs, Burns says.

Researchers at the RAND Corp., Santa Monica, CA., found 40 years ago that high out-of-pocket costs reduced health care use, but the study sample included no Medicare enrollees, and no one tried to determine whether the extra care the subjects with low out-of-pocket costs received was medically necessary, Burns says.

Burns says she thinks consumers with near first-dollar Medigap coverage tend to have high Medicare costs  because the rich high-premium Medigap plans appeal to consumers who already have health problems.

“They’re trying to budget their health care expenses.” Burns says.

Blaming Medigap issuers and customers for any over-use of care seems particularly unfair because federal law prohibits sellers of Medigap insurance from determining whether the care a policyholder has received is medically necessary, Burns says.

If the government want to guard against Medicare waste, it should do more to enforce existing rules that require providers to document that the care they provide is medically necessary, Burns says.

From: LifeHealthPro 2012

 

 

Filed Under: Featured Tagged With: , , ,

HHS Gives States Greater Flexibility In Determining What’s Covered Under New Exchange Plans In 2014

December 21, 2011 By

On Dec. 16, 2011 the Department of Health and Human Services (HHS) issued a bulletin outlining proposed polic ies and the approach it intends to pursue for defining Essential Health Benefits (EHB). Per the Patient Protection and Affordable Care Act (PPACA), beginning on Jan. 1, 2014, non-grandfathered Individual and Small Group plans offered inside and outside the Exchanges must cover the EHB. In addition, PPACA prohibits the use of lifetime and annual limits  on the dollar amount of EHB.

In developing the regulation, HHS stated that its aim is to balance comprehensiveness, affordability, and States flexibility.  It is, therefore, proposing to allow each State to select an existing health plan as a “benchmark” to establish the services and items included in the Essential Health Benefits package for 2014 and 2015.

States will choose from one of four health insurance plan options as a benchmark:

  • the largest plan based on enrollment in any of the three largest small group products in the State
  • any of the three largest State employee health plans
  • any one of the three largest Federal employee health plan options
  • the largest HMO plan offered in the State’s commercial market

HHS will propose that the default for States choosing not to set  benchmark wll be the small group plan with the largest enrollment in the State. For 2016 and beyond, HHS would reassess the proposed benchmark process.

The bulletin did not address cost sharing, e.g., deductibles, copayments, and coinsurance, which will be covered in future guidance. Cost sharing rules will determine the actuarial value of the plan. It also does not address how this state-by-state approach is to be applied to the ban on lifetime and annual limits for plans that cover people in multiple States.

However, the bulletin did affirm that Essential Health Benefits must include items and services within the following 10 categories:

  1. ambulatory patient services,
  2. emergency services,
  3. hospitalization,
  4. maternity and newborn care,
  5. mental health and substance use disorder services, including behavioral health treatment,
  6. prescription drugs,
  7. rehabilitative and habilitative services and devices,
  8. laboratory services,
  9. preventative and wellness services and chronic disease management, and
  10. pediatric services, including oral and vision care.
Filed Under: Featured, Uncategorized Tagged With: , ,

Act short term; think long-term

July 25, 2011 By

In the ever-changing world of employee benefits, there is more opportunity than ever before. With health insurance and employee benefits-related legislative changes coming out of Washington on what seems to be a weekly basis, you want to challenge your agents to deliver the guidance you need. It would be easy for an individual to tuck tail and run when people ask questions for which there are no answers, yet as confusing and frustrating as this last year has been for us, the opportunity is there for those willing to stand in the face of adversity.

Please visit our “News” section frequently. We intend to keep it you informed from a variety of sources: the 2010 implementation of “Obamacare” and current updates, requirements and legislative changes.

Filed Under: Featured