Health Coverage under Obamacare May Prove Costly to Individual Buyers

With the introduction of new healthcare reforms enacted by the Affordable Care Act, many Americans covered by health insurance in the individual marketplace will be forced to enroll in new coverage plans. People will be required to opt for new insurance since many of these plans are not in accordance with newly established standards set by the new healthcare law. As a result, many insurers will be forced to either tack on benefits, or cancel policies altogether.

The new offerings are associated with higher rates for individual buyers, since coverage is more comprehensive and must be available to individuals affected by pre-existing conditions. Nevertheless, several insurers have managed to maintain lower rates by providing plans with higher deductibles and minimal benefits. Additionally, these insurers could be pickier in the approval process by only selecting the healthiest applicants.

As more and more people have been receiving policy cancellation notices paired with new offerings provided by their insurer for 2014, the sticker shock has brought on increased feelings of aggravation among those impacted. Many are unhappy with the options offered in the  marketplace. Some face climbing premiums and costly increases in deductibles. Some report their current deductibles of $1,500 are expected to rise to $5,000 under Obamacare for similar policies.  It isn’t just deductibles, visits to the doctor and prescriptions are also subject to increase.

Nevertheless, a small number of existing plans will become grandfathered. In order to obtain this status, two qualifying factors must be met. First, members must have been enrolled in these policies before the passage of the ACA back in March 2010. Additionally, no significant policy changes should have been made to the plans until now, ranging from alterations in co-pays and deductibles to coverage costs.

Currently, Blue Cross Blue Shield is one of the major healthcare providers within the individual insurance marketplace, as well as the exchanges. Kim Holland, the trade group’s executive director of state affairs, said that the majority of existing individual plans offered by Blue Cross will soon be altered or discontinued. As a result, some customers will be forced to enroll in new coverage plans.

Although customers may receive letters indicating significant increases in premiums, they won’t exactly know what to expect in regards to payments until they actually explore the exchange. Generally, if an individual brings in less than $46,000 a year or $94,200 for a family of four, federal subsidies will be available to decrease monthly expenses.

Online Health Exchanges Will Take a Month to Fix

After a laundry list of glitches have made it difficult – if not impossible – for consumers to use the online health exchanges, the Obama administration has announced a repair timetable that will have the sites fully operational by the end of November.

The administration has hired private firm Quality Software Services Inc. to fix the more than 100 issues with the exchange server that have frustrated consumers since the exchanges opened October 1. QSSI, an arm of UnitedHealth Group, is one of three contractors originally engaged to create the system. Among the reported issues are inaccurate reports and the failure of as many as 30 percent of consumers to successfully complete the enrollment process.

Though the proposed timeline is shorter than originally anticipated, it still cuts very close to the December 15 deadline for purchasing coverage to begin January 1. As a result, many lawmakers have called for extending the individual mandate deadline or deferring penalties for non-enrollment. The current deadline to avoid a tax penalty is March 31.

Issues with the exchange have frustrated consumers who are already unsure about the impact of the ACA and have prompted criticism from both sides of the aisle. The Obama administration is facing political fallout as well as a public relations quagmire: Health and Human Services Secretary Kathleen Sebelius has been called upon to step down, and President Obama has addressed ongoing concerns with varying success.

Troubleshooter Jeffrey Zients remarked that the exchanges will “get better” by the week until it “will work smoothly for the vast majority of users” at the end of November.

Consumers should be prepared for a shortened enrollment period if an extension is not enacted. If you are one of the millions who will purchase insurance on the exchange, PRN Funding can provide the cash flow you need to be ready when the exchanges are fully functional. Learn more about our healthcare factoring programs and contact us today to get started.

Who is to Blame for Healthcare Exchange Glitches?

The rollout of online health exchange site Healthcare.gov at the beginning of the month has been stymied with glitches preventing millions of consumers from creating accounts or completing the enrollment process, along with as many as 100 additional flaws found in the system. Testimony before a panel convened by the House of Representatives has provided an object of public blame for these glitches: contractor from Canadian firm CGI Group Inc.

Cheryl Campbell, senior VP of the unit responsible for site design, testified before the House that more time should have been devoted to end-to-end testing and refused to give a set date for the site to be fully functional. Campbell claimed that the Centers for Medicare and Medicaid Services – the Health and Human Services agency responsible for the health exchanges – made the final decision to take the site live despite inadequate testing. She also testified, however, that CGI did not make a recommendation to delay the site launch.

Other contractors testified that they were only given two weeks to perform testing, far shorter than the industry standard of months. Each contractor maintained that they fulfilled their part of the project and disavowed responsibility for the final product, and none could provide a definitive date for the glitches to be resolved.

Experts in the tech world, meanwhile, have suggested that the issues with Healthcare.gov could be a technical “black swan” event, or a project that faces out-of-control costs and extreme consequences that could spell failure – in this case, a failure for the Obama administration. President Barack Obama has publicly decried the situation, claiming “Nobody’s madder than me.”

Testimony will continue throughout the week and possibly into next week, but the administration has already appointed a contractor to repair the site as quickly as possible.

PRN Funding’s factoring programs for healthcare vendors provide necessary cash flow to invest in offering quality healthcare goods and services to healthcare providers nationwide. Contact us to find out how healthcare factoring can save your company from creating its own “black swan”.

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Obamacare vs. Employer Insurance: Which is Better?

Ever since Obamacare was introduced, employees have been debating whether or not their employers’ insurance plan is the best option for obtaining affordable healthcare coverage. Although employees may have the ability to comparison-shop for better coverage plans among the new online exchanges, there are still plenty of nuances involved in the selection process. As a result, trying to sift through all the available options and picking the best plan to suit your particular situation can be a tedious task.

Although the new healthcare exchanges under Obamacare will be accessible to everyone, the marketplace will operate through two different sites, depending upon where you live. In 34 states, the exchanges will be available on HealthCare.gov, a federally-run website. However, 16 states, including the District of Columbia, will operate their own independent exchanges. Regardless, even if your employer already provides health coverage, there are no rules saying you can’t purchase coverage on your state’s exchange.

If employees decide to abandon their employers’ plan and enroll in coverage through the new marketplace, they may not be eligible to receive some of the benefits provided to the uninsured. The only instance where employees could be deemed eligible for receiving government subsidies is when their employer’s coverage is determined unaffordable or inadequate under the new healthcare law. Because these subsidies help people pay for their insurance, they are one of the most attractive incentives available with the new state exchanges.Keep in mind, employees earning over $40,ooo annually, won’t likely qualify for subsidies.

Opinions differ when it comes to choosing the best coverage plan for employees. According to E. Denise Smith, a professor of health care management at Gardner-Webb University in Boiling Springs, N.C., there really would be no advantages to abandoning healthcare plans provided by employers. She also mentioned that employers would not be required to offer payment assistance if their employees opted for an exchange plan.

A senior vice president for health policy at Jackson Hewitt, expressed a similar point of view. He believes that employees may not be able to find better coverage than their work-based plan among the new marketplaces. Additionally, he advises employees to thoroughly evaluate their current employer-based plans, and consider factors such as whether or not dental and vision care are covered. Obamacare plans are not required to cover dental and vision.

In regards to employee eligibility for Obamacare, many of the requirements imposed on employers had been postponed until 2015. However, companies were still expected to offer notice to their employees no later than Oct. 1, letting workers know whether or not their current coverage would be viewed as affordable under the new law. Despite this expectation, the U.S. labor Department said that employers would not be charged with penalties for failure to notify their employees. Regardless, the delayed employer mandates will require businesses with a workforce of at least 50 full-time employees to provide health coverage to their workers, as well as their dependent children, in 2015. However, employers will not be obligated to offer insurance to workers’ spouses.

Up-Front Deductible Payments on the Rise

Need to see the doctor? Be prepared to pay at the door.

Up-front deductible payments

The Affordable Care Act has prompted a shift toward low-premium, higher-deductible health plans, both employer-provided and available on the exchange. In order to collect as much of the out-of-payment cost as possible, many health providers have responded by requiring up-front payment from patients before receiving nonemergency treatment. Insured patients at these facilities must pay their co-pay, co-insurance, and deductible up front, and uninsured patients are responsible for the full (estimated) cost of treatment.

Administrators at facilities currently using this practice argue that it is the most effective way to receive payment, particularly when so much of the burden is shifting to the patient. A great deal of costs for medical treatment become bad debt – in 2011 alone, hospitals provided $41 billion in care that was never paid for. Hospitals attribute this to patients’ reluctance to make their health spending a priority, and to a lack of awareness of financial assistance programs that can eliminate the strain of a single large payment.

The up-front model is an extension of one already in practice in most doctors’ offices around the country, where co-pays and co-insurance are collected at the check-in for an appointment. By implementing the practice in hospitals, administrators state that they can connect patients to financial assistance sooner and increase the likelihood of full payment.

Opponents of the idea, however, point out that up-front payments may create a barrier to receiving health care. As deductibles continue to rise, patients will be increasingly unable to cover the cost of their care and may elect not to seek treatment – in effect, creating a situation directly opposite the intended outcome of the Affordable Care Act.

PRN Funding offers healthcare factoring and medical receivables factoring services to vendors and facilities struggling to bridge the cash flow gap. Before shifting to the up-front model, contact us to see how we can help you meet your cash flow needs and continue to provide quality care to your patients.

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Obamacare Initiative Targets 500,000 Signups in First Month

Enrollment projections for the online marketplaces were high before countless computer glitches came into play. With the rollout of new ACA provisions, the Obama administration estimated that in October alone almost 500,000 people would sign up to participate in the new health insurance marketplace.

An internal memo issued on September 5 by Health and Human Services Secretary Kathleen Sebelius listed monthly enrollment goals for Obamacare for each state, including Washington, D.C., up until March 31. Within the memo was an estimate provided by officials, stating that 494,620 people would enroll in the new healthcare initiative by the end of October.

These new health insurance markets, also known as exchanges in some states, were created to serve as accessible outlets to affordable coverage for the nearly 50 million uninsured people across the country. Four tiers of private, subsidized plans are available for middle-class individuals, while low-income consumers may be eligible for an expanded version of Medicaid that is available in states that have agreed to extend the program.

While the White House viewed the official launch of the new healthcare marketplace as a pressing priority, the October 1 rollout was quickly complicated with countless computer glitches. Consequently, several potential customers were unable to enroll for coverage. Although insurers have reported that signups have slowly been rolling through, the Obama administration still will not reveal enrollment numbers.

Aside from these glitches, other factors that may created enrollment issues were underlying problems that were bypassed in initial testing. As several users flocked online to sign up for the new coverage plans, software flaws and design mishaps that had been ignored earlier soon derailed the enrollment process. Regardless, the administration continues to work toward finding a solution to eliminating ongoing enrollment issues.

An Abbreviated Guide to the Healthcare Exchanges

The online health care marketplaces have been up and (mostly) running for nearly a month, but a lack of information in many states is leaving consumers confused about their responsibilities and the coverage available to them. Below is some basic information to help you navigate the health care exchanges, and links to more information.

Do I have to use the exchange?

Consumers who do not receive health coverage through their employer or their spouse’s employer may be required to purchase insurance on the marketplace. In addition, if employer coverage does not meet the ACA’s requirements or costs more than 9.5 percent of the consumer’s income then the consumer may purchase more affordable insurance on the exchange.

There are exemptions. You are not required to purchase insurance if you:

· Would qualify for Medicaid under the expanded income limits, whether or not your state expanded coverage;

· Are not required to file a tax return;

· Receive insurance through your employer, your spouse’s employer, or other government-provided coverage (including VA benefits)

If you are a sole proprietor with no employees, you are considered an individual and are required to purchase insurance on the exchange unless you meet one of the exemption criteria. If you have fewer than 50 employees, you can purchase coverage for your company on the Small Business Health Options (SHOP) Marketplace and may qualify for tax incentives to do so.

What coverage can I purchase?

Open enrollment continues through March 2014, and plans will take effect beginning January 1, 2014. The health plans available on the marketplaces fall into one of five categories:

· Catastrophic – only available to consumers under 30 who are looking for low-cost disaster coverage

· Bronze – the lowest level of comprehensive coverage available; plans will pay up to 60 percent of costs

· Silver – “standard” coverage, with plans paying up to 70 percent of costs

· Gold – higher-level coverage, paying up to 80 percent of costs

· Platinum – the best coverage available, paying up to 90 percent of costs

As you move up through the plan levels, premiums increase but deductibles and out-of-pocket costs decrease. In addition, higher-level plans feature wider provider networks and better pharmaceutical coverage. Every plan level offers minimum essential coverage as required by the ACA.

Plans on the marketplace are required to cover at least the ten defined essential health benefits.

How do I know what’s covered?

Each exchange is required to provide a summary of included benefits, coverage, and applicable co-pays for services and medications at the generic, brand name, and specialty levels. The plans must also provide a list of in-network providers, as some providers may not accept all plans available on the marketplace.

What if I can’t afford coverage?

There are tax credits and subsidies available to a portion of the population to make health care affordable. For other low-income individuals and families, expanded Medicaid coverage will provide a free healthcare option. Consumers who are not already insured or exempt will fall into one of four categories:

· Consumers who are eligible for Medicaid benefits, whether or not the program has been expanded in your state. If it has, you will be able to enroll; if it has not, as mentioned above, you are exempt from the individual mandate.

· Consumers who are ineligible for Medicaid but earn below 100 percent of the poverty level. Unfortunately, these consumers are ineligible for the tax credit and must purchase health care at the full cost.

· Consumers who are eligible for tax credits to reduce premiums, earning between 100 and 400 percent of the poverty level. These consumers should be aware when shopping for insurance that tax credits are calculated based on the second least expensive silver plan available.

About half of the consumers who fall into this category will also be eligible for cost-sharing reductions to help with deductibles and other out-of-pocket costs. The maximum threshold for these benefits is 250 percent of the poverty level.

· Consumers who earn above 400 of the poverty level will be required to purchase insurance without assistance.

Find out if you qualify for a subsidy using Kaiser’s interactive calculator.

How does a subsidy work?

Refundable tax credits will be immediately available to eligible consumers, who can use some or all of the money to pay for premiums.

If you are self-employed or have fluctuating income, it may be wise to reserve part of your tax credit in the beginning or to overestimate your income to compensate. If you earn more than you estimated you may be required to pay back some or all of the tax credit at filing time, though you may qualify for a higher subsidy if you earn less than you projected. This is also a great reason to report changes in employment, income, or family size to the health exchange as soon as they occur.

Where do I begin?

To explore your state’s marketplace and enroll in healthcare coverage, visit www.healthcare.gov – this is the federal portal and the safest way to avoid scammers.

If poor cash flow will make it difficult for you to purchase health care, PRN Funding’s healthcare factoring programs can give you immediate access to the cash you need. Get started today to beat enrollment deadlines and secure peace of mind.

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Hospitals Shed Light on the ACA Blame Game

Following Cleveland Clinic’s announcement last month of more than $300 million in budget cuts, we addressed the ongoing blame game over the Affordable Care Act in the mainstream media. Members of the mainstream media have been slow to take up the question, but this week the Plain Dealer asked the question: Is Obamacare really to blame for cuts at the Cleveland Clinic and other hospitals?

Frustrated business person overloaded with work.

The Cleveland Clinic has previously attributed their budget decision to “a number of factors”, as have other hospital systems considering or implementing similar cuts. Now, hospitals spokespersons and health care analysts have provided a more in-depth explanation of exactly how the Affordable Care Act will affect hospital systems going forward.

Medicare

Hospitals already handle a large annual gap between the health care they provide to Medicare recipients and the reimbursement limits that the Centers for Medicare and Medicaid Services place on various services. The ACA includes an additional Medicare spending reduction of $716 billion over the next ten years. Some of the cuts are specifically directed at hospitals, such as the Hospital Readmissions Reduction Program.

Another portion of the pending cuts to hospitals is $22 billion over ten years from the Disproportionate Share Payments (DSH), which cover charity care in hospitals with large numbers of uninsured patients. Hospitals expect to compensate for this particular cut with insurance payments from previously uninsured patients who will have access to coverage through the federal health exchange. These cuts come in addition to other reductions approved by Congress since the ACA passed in 2010.

Medicaid

The ACA expanded Medicaid coverage to include patients earning up to 138 percent of the federal poverty level, in an attempt to provide an affordable health care option to parts of the population too poor to pay a monthly premium even with tax subsidies to help. To ease state concerns about the costs of expansion, the federal government will pay all new Medicaid costs through 2016, when they will scale back their coverage to 90 percent.

However, when the Supreme Court upheld the ACA’s individual mandate they failed to uphold the obligation of the states to expand their individual Medicaid programs. In states such as Ohio and North Carolina where the government has chosen not to expand, hospitals will not be able to recoup the loss of Medicaid DSH funds cut through the ACA. With fewer newly eligible Medicaid patients than projected, hospitals are forced to contain their costs through other means.

Bad debt

Hospitals must already contend with bad debt from patients who do not cover the portion of their invoices beyond coverage limits, as well as costs they swallow from providing charity care. The Medicare and Medicaid restrictions described above will contribute to this ongoing problem but interestingly enough, so will the health plans available to patients in the online marketplaces.

The affordability of health care is a complex matter that goes beyond the cost of the monthly premium. Insurers balance low premiums such as those available in Bronze or Silver plans with higher deductibles and out-of-pocket costs, meaning that a patient who seeks care at the hospital will end up with a higher portion of the bill once that care is provided. As much as a third of uncollectible hospital bills are estimated to belong to patients with health care.

Still, hospitals are optimistic that higher numbers of insured patients will create a net gain, as they will be able to reduce their bad debt expenses for uninsured patients and will instead receive payment for at least part of services provided directly from the insurer.

The Cleveland Clinic is one large example of how the Affordable Care Act may affect hospital operations, yet they also offer an important caveat against framing the discussion of other facilities’ budget decisions solely within the context of the ACA.

If you provide services to a hospital or medical facility, healthcare factoring can help you maintain a positive cash flow without falling victim to uncertain hospital payment terms. PRN Funding offers a variety of healthcare factoring programs designed to meet the unique needs of healthcare vendors. The application process is fast and easy – contact us to start today.

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