Young Consumers Not Using Healthcare Exchanges

According to reports from the Obama administration about healthcare enrollment in the online marketplace through January, only 25 percent of consumers who have purchased healthcare plans fall into the critical 18-34 demographic. The figure is far lower than the number of young consumers who have created accounts on the exchanges.

Many experts and administration officials have touted the importance of young consumers using the healthcare exchanges to balance the cost of care for older patients. While insurance companies can vary costs to a certain degree based on age, it is not enough on its own to control the difference in healthcare needs between the two demographics. A continued slump of young enrollees could prompt insurance providers to raise premiums significantly within the coming years, which would put a strain on the entire system.

One potential explanation for the lack of enrollment in the younger demographic is its overlap with another provision of the Affordable Care Act which allows parents to keep adult children up to age 26 on their own health insurance. The overlap affects nearly half of the exchanges’ target demographic, specifically college students and young post-graduates.

The federal government is not alone in fretting over low enrollment; states running their own exchanges, such as Minnesota, are also experiencing enrollment that skews toward the older demographic.

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ACA: Employer Mandate Receives New Extension

Earlier this week, the IRS released its final rule on the employer mandate. Among provisions regarding employee transition periods and how to classify employees for counting purposes was a new extension of the employer mandate.

After a previous extension moved the start date to January 1, 2015, the mandate is now postponed until 2016 for employers with 50-99 full-time employees. In addition, while large companies with more than 100 employees are still subject to the mandate in 2015, they only have to offer coverage to 70 percent of their full-time workforce for the first year the mandate is in effect.

The Obama administration explained the extension as an effort to give affected companies additional time to come into compliance with the mandate. Two percent of U.S. companies are classified as mid-size and two percent are large, but those companies employ as much as 70 percent of the total labor force in the United States.

Criticism of the announcement centers on frustration that the individual mandate, seen by many to be more of a burden than the employer mandate, went into effect on its originally schedule date of January 1, 2014. Consumers still have six weeks, until March 31, to enroll in a qualifying healthcare plan. The delay of the employer mandate could push a number of those consumers to the online marketplaces if they are unable to obtain a policy through their employer.

The staffing industry is also frustrated with other provisions of the IRS final rule, which limit staffing agencies’ ability to classify their employees as variable-hour or to take advantage of look-back periods to determine their status for insurance purposes. This could potentially raise healthcare costs for these agencies if they are required to provide coverage to employees who are later determined to be variable-hour or part-time.

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Dropping Spouses from Healthcare May Increase Employer Costs

The Employee Benefit Research Institute published a study in this month’s issue of their Notes that suggests that the employer trend of excluding spouses from health care coverage may cost them more in the long run.

As many as 15 percent of employers nationwide have already eliminated spousal coverage in cases where the previously-covered spouse has access to health care through his or her own employer. NPR reports that a continuing trend of such cuts may offset any short-term savings as their own employees lose spousal coverage picked up by other companies.

A simple example: Company A and Company B both offer spousal health care coverage. Company A currently covers Employee A and Spouse A, who works for Company B. Company B covers Employee B and Spouse B, who works for Company A. If both companies eliminate spousal coverage, Spouse A and Spouse B will return to their own company’s health care plan, which means that at the very least the companies have not saved any money.

Further, if the companies have traditionally subsidized a lower amount for spouses then each will face higher health care costs by covering two of their own employees.

Situation: Each Company Covers Spouses (cost to company)

Company A

Company B

Employee A: $5,000/year

Employee B: $5,000/year

Spouse A: $3,500/year

Spouse B: $3,500/year

Situation: Neither Company Covers Spouses (cost to company)

Company A

Company B

Employee A: $5,000/year

Employee B: $5,000/year

Spouse B: $5,000/year

Spouse A: $5,000/year

*The figures above are purely hypothetical and are only meant for illustrative purposes.

According to a weekend report in Forbes, meanwhile, more full-time employees are enrolling in employer-provided health care to take advantage of better coverage at lower costs than the plans provided on the health care exchanges. These new enrollees may also contribute to rising employer costs, even without an influx of employees who have lost coverage under their spouses’ plans.

Is your company prepared for rising healthcare costs? PRN Funding offers a variety of healthcare factoring programs that can give your company the immediate cash to meet those costs as they occur. Learn more about our healthcare factoring services and contact us today to get started.

New Obamacare Plans Result in Drug-Cost Sticker Shock

With the rollout of Obamacare, many patients with chronic illnesses are taking advantage of the new healthcare law. However, these patients, who are projected to be some of the biggest beneficiaries of the new initiative, may encounter sticker shock with drug costs. Under the new law, out-of-pocket expenses associated with the new exchanges could vary widely.

The new healthcare act enables patients with pre-existing conditions to obtain affordable coverage. Additionally, these patients can’t be penalized with higher rates than healthier participants. In terms of out-of-pocket expenses, the maximum set for individuals is $6,350, and $12,700 for families. Once these amounts are reached, insurers will then pick up the full tab.

Nevertheless, patients taking costly prescription drugs are more likely to reach these levels fast. While certain medications for serious conditions can cost thousands of dollars a month, some plans under the new exchanges may place as much as 50 percent of the cost on patients. Basically, plans with lower monthly premiums require patients to bear higher portions of drug costs.

In addition to premiums, many other factors impact drug costs for patients. Among these factors is a drug’s tier, or level of coverage. Tiers vary from plan to plan, and can be classified into different categories: generic, brand, preferred and specialty drugs. In order to determine tiers, insurers and drug manufacturers negotiate prices for each particular drug. Drug costs are greatly impacted by these tiers, which can make all the difference in patient costs.

As a result, high price tags and costly co-pays are associated with high-tiered drugs. According to insurance-industry experts, many businesses are anticipating larger numbers of sicker, costlier patients to sign up for the exchanges. This trend could lead to financial troubles if an inadequate number of healthier customers sign-up and balance out those costs. Regardless, insurers are not allowed to impose higher charges on chronically ill patients. Therefore, in order to keep monthly premiums lower, patients are forced to pay more for high-tier drugs.

Obamacare Sign-Ups Booming After Website Fix

Ever since the Obamacare enrollment site was revamped, sign-ups for the new healthcare plans have been on the rise. In November alone, nearly 100,000 people elected coverage through Healthcare.gov. Additionally, when compared to the enrollment numbers from October, about four times as many people enrolled for Obamacare coverage via federal exchanges last month.

Although the numbers are impressive, the Obama administration said it is still far from reaching its original goal. Marilyn Tavenner, the administrator for the Centers for Medicare & Medicaid Services, previously reported that the administration had set their hopes for reaching 800,000 total enrollees throughout the months of October and November.

In October, more than 100,000 people enrolled for healthcare coverage under Obamacare. The majority of the enrollees came from state-run exchanges, while only about 27,000 signed up for coverage through the federal website, HealthCare.gov.

Nevertheless, thanks to the recent website fix, 29,000 Americans were able to enroll in healthcare coverage throughout the past few days. The number of sign-ups is higher than those tracked from October, providing evidence that enrollment via HealthCare.gov is rising as a result of the massive repairs completed on the site. Furthermore, administration officials reported that they had achieved their deadline for fixing the healthcare enrollment site, making it readily accessible for the vast majority of users.

Meanwhile, younger uninsured Americans are still hesitant to enroll. Currently, less than one-third of them say that they plan to sign-up for healthcare coverage under the new marketplace, according to a new poll. If this data remains relevant, tremendous problems could be in store for the new healthcare law.

The Affordable Care Act is highly dependent upon younger, healthier enrollees who can help keep coverage costs down by offsetting costs for older, sicker individuals. Nevertheless, a poll released by the Harvard Institute of Politics revealed that only 29 percent of uninsured Americans between the ages of 18 and 29 said they would definitely or likely sign-up for coverage through the healthcare exchanges.

Obama: Individuals May Keep Cancelled Insurance Policies for Now

Obamacare established new standards for health insurance coverage in the U.S. As a result, millions of Americans were presented with policy cancellation notices, forcing many people to drop their current coverage and opt for a new health insurance plan. In order to help alleviate this troublesome situation, the president made an announcement yesterday that his administration would not enforce the Obamacare provisions that led to policy cancellations throughout the country.

Therefore, individuals who were in favor of their current coverage plans may be able to keep them for another year. However, once midterm elections are complete, plans that are not in accordance with the new healthcare law will get canceled again.

The new transitional policy introduced by the administration will enable people who were happy with their insurance to remain on their current plans, as long as their policies were effective on Oct. 1 of this year. Furthermore, another stipulation for this newly-enacted policy is that insurers provide free advertisements for their competitors on Obamacare’s online exchanges.

Aside from the 25 million Americans who opt for their own coverage through the individual market, several employees covered by employer-based insurance will also encounter cancellations. Currently, 156 million people obtain healthcare through their employers.

In addition to this particular provision, there are many other  aspects  of Obamacare that will not be enforced yet, such as postponing the employer mandate for a year. These and other unilateral actions are being announced by the White House, since the administration wants to avoid the potential for Congress to pass legislative amendments to the new healthcare law.

In order for this cancellation fix to actually work, insurers must find some way to rush their old products into the marketplace by January 2014. This will be extremely difficult for insurers to pull off. Since new reimbursement rates for 2014 would have to be negotiated with doctors and hospitals, insurers would have to submit these plans to state insurance regulators in order to obtain approval.

Despite the proposed cancelation fix, a new Gallup poll released this week revealed an increase in disapproval rates for the Affordable Care Act, rising from 47 percent to a high of 55 percent. Additionally, the president’s overall approval ratings have fallen between the high 30s and 40s.

Even with the change, the administration is leaving it up to each individual state to determine whether or not residents can keep coverage plans that are not in accordance with the new healthcare initiative. As a result, state insurance commissioners, along with other health policy experts, have established the fact that insurance plans will greatly vary across the country.

Major Hospitals Opt Out of Obamacare

Will health care reform impact your doctor choices?

As many Americans continue to sign up for Obamacare, they may be in for a big surprise, especially if they hope to receive premium care from one of the nation’s top hospitals. Unlike coverage obtained from their previous personal policies, many consumers are realizing that their current doctors and hospitals may not be covered.

Although the new health reforms enacted by the White House have resulted in more affordable health coverage for many Americans, this trend has only impacted the overall price of insurance. However, when it comes to the caps placed on premiums through Obamacare, several insurers will offer a lot less cash for services provided by top-grade doctors and hospitals. While thousands of policies with varying levels of coverage exist,  many policies cover a much smaller network of doctors and hospitals.

Recently, Watchdog.org contacted the top 18 hospitals across the country, as determined by U.S. News and World Report for 2013-2014. The investigation was conducted to learn more about the hospitals’ established contracts. Additionally, several insurance companies were also contacted. Based on the findings, Watchdog.org concluded that several top hospitals are opting out of Obamacare.

Nevertheless, many individual health plans purchased outside of Obamacare were likely to enable patients to receive care from these top-tier facilities. For instance, Cleveland Clinic accepts numerous health plans purchased within the individual marketplace. However, once an individual opts to buy coverage through Obamacare, the only way they can receive care from the Cleveland Clinic is by electing insurance through Medical Mutual of Ohio.

It’s not just Cleveland Clinic. CNN reports that NYU, UCLA and Emory academic medical centers have all limited the number of plans they will accept. Since academic medical centers often see tougher cases, they tend to be more costly.

In spite of this limitation, there are plenty of coverage options available through the state exchanges. In Ohio and California, there are a plethora of insurance companies within the online marketplace. However, two of the top-grade hospitals in these states (Cleveland Clinic and Cedars-Sinai Medical Center) only accept coverage from one company in their network.

Several state exchanges don’t provide a list of their insurers on their websites. For California and other states that do offer this information to consumers, names of doctors or hospitals are unavailable. Although it’s yet to see how well they will play out, health care reform law provisions have been established requiring an adequate number of providers in each  insurance network. It’s likely that more providers will opt in once the marketplaces have been around a bit longer.

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.

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