Monthly Archives: June 2014

Obamacare subsidy error rate

I can’t believe it will be less than the 21% error rate of the Earned Income Tax Credit.

There’s a program called the earned income tax credit, it’s a wage subsidy, it’s simpler. It requires only the information on how much you made and the size of your family. The error rate in payments on that program, what has been around for years, is about 21%.

Video: ObamaCare enrollees at risk of losing subsidies? (I tried to embed with no success)



Thousands to Be Questioned on Eligibility for Health Insurance Subsidies

What a mess – Thousands to Be Questioned on Eligibility for Health Insurance Subsidies –

Federal subsidies for the purchase of private insurance are a cornerstone of the Affordable Care Act. More than eight out of 10 people who selected health plans through the exchanges from October through mid-April were eligible for subsidies, including income tax credits. So far this year the federal government has paid out $4.7 billion in subsidies, and the amount is expected to total $900 billion over 10 years.

Since June 1, the government has notified hundreds of thousands of people that “the information in your application doesn’t match what we found in other records.” Accordingly, the notice says, “you need to follow up as soon as possible and provide more documents to make sure the marketplace has the correct information.”

“If you don’t send the needed documents,” it says, “you risk losing your marketplace coverage or help you may be receiving to pay for such coverage.”

Be careful out there.


ObamaCare Could Overpay $152 Billion In Subsidies

ObamaCare Could Overpay $152 Billion In Subsidies –

Lawmakers have learned that ObamaCare could end up overpaying insurance subsidies by as much as $152 billion. That’s more than the deficit cut Washington once promised ObamaCare would produce.


Inquiring minds want to know if the Government can get their money back when subsidies are reconciled on their tax returns. Of course, this would only work for subsidies that were in error due to participant’s mistakes is estimating income. For other situations, such as being ineligible for coverage due to “affordable” coverage being available at work, the returnee is likely to continue to “misstate” or remain ignorant.

After all, subsidy payments depend on individuals’ claims about future incomes, family size, immigration status and the availability of “affordable” coverage at work. Obama promised that all this would be instantly verified during the application process, but the administration now admits that at least 25% of sign-ups could be either ineligible for any subsidies or are getting the wrong amount.

And, since the law restricts the IRS’ ability to “claw back” any overpayments — and caps how much must be repaid — many of those who get too-big subsidies are likely to simply ignore the government’s request to have that money back.

Holtz-Eakin calculates that if the same 21% error rate applies to ObamaCare subsidies, it will mean $152 billion in overpayments in a decade. In other words, these overpayments could easily swamp the $120 billion budget savings the CBO said ObamaCare would produce.

The CBO has given up estimating the budget consequence of the law since it changes on nearly a daily basis.

But the administration has already made vast changes to the law. It delayed the employer mandate, neutered much of the individual mandate, put off cuts to Medicare Advantage, promised bigger insurance industry bailouts and so on. All of these had the effect of raising the net cost of ObamaCare.

President Obama has made so many ad hoc changes, in fact, that the CBO finally gave up even pretending it can predict how ObamaCare will affect the deficit.

Amateur hour. There’s something about Keep It Simple Stupid that politicians just don’t understand. Also, the alluring vision of “big data” and the power of computing allows people to create these grandiose and very complex ideas that are doomed to fail.



United Healthcare Medicare Advantage cuts doctor network

UnitedHealthcare to cut hundreds of Bay State doctors from its Medicare Advantage network – Nation – The Boston Globe.

National insurance giant UnitedHealthcare plans to cut up to 700 Massachusetts doctors from its physician network for seniors enrolled in its private Medicare plan as a way to control costs, according to company officials.

For elderly patients enrolled in the plan, the cuts mean they will have to find a new doctor or eventually switch to a new health plan that covers their current doctor.

The move, effective Sept. 1, follows similar cuts made by the insurer to its Medicare Advantage provider networks in 11 other states, including in Rhode Island and Connecticut, where the reductions drew outrage from patients, doctors, and lawmakers earlier this year.

Note these cuts are for Medicare participants who use Medicare Advantage plans. If you are using standard Medicare with a Medigap supplement you are unaffected by changes to Medicare Advantage programs. Why are Medicare Advantage benefits being cut? You guessed it, Obamacare.

The changes come amid a gradual reduction of reimbursements to private insurers that offer Medicare Advantage plans as a way to offset costs associated with President Obama’s health reform law.

Medicare Advantage provides coverage for 30 percent of Americans on Medicare through private insurers. Consumers often prefer the program over traditional Medicare because it is a one-stop shop for hospital and doctor coverage, and often includes prescription drugs, eyeglasses, and gym memberships.

For years the federal government has paid the private plans up to 14 percent more than traditional Medicare for identical services, a benefit to the insurance industry that cost taxpayers an extra $1,000 per beneficiary, according to the National Committee to Preserve Social Security & Medicare, a Washington-based advocacy group. The 2010 federal health law was supposed to close the gap, as well as provide new bonus payments to plans with the highest quality ratings.

Perhaps the decision to select either Medicare Advantage or traditional Medicare should involve a little more thought than the lowest premium?


ER visits up under Obamacare


More patients flocking to ERs under Obamacare.

It wasn’t supposed to work this way, but since the Affordable Care Act took effect in January, Norton Hospital has seen its packed emergency room become even more crowded, with about 100 more patients a month.

That 12 percent spike in the number of patients — many of whom aren’t actually facing true emergencies — is spurring the Louisville hospital to convert a waiting room into more exam rooms.

“We’re seeing patients who probably should be seen at our (immediate-care centers),” said Lewis Perkins, the hospital’s vice president of patient care and chief nursing officer. “And we’re seeing this across the system.”

That’s just the opposite of what many people expected under Obamacare, particularly because one of the goals of health reform was to reduce pressure on emergency rooms by expanding Medicaid and giving poor people better access to primary care.

Instead, many hospitals in Kentucky and across the nation are seeing a surge of those newly insured Medicaid patients walking into emergency rooms.

Ahh… those unintended consequences. The apparent reason(s)…

Experts cite many reasons: A long-standing shortage of primary-care doctors leaves too few to handle all the newly insured patients. Some doctors won’t accept Medicaid. And poor people often can’t take time from work when most primary care offices are open, while ERs operate round-the-clock and by law must at least stabilize patients.

Plus, some patients who have been uninsured for years don’t have regular doctors and are accustomed to using ERs, even though it is much more expensive.

“It’s a perfect storm here,” said Dr. Ryan Stanton of Lexington, president of the Kentucky chapter of the ER physician group.”We’ve given people an ATM card in a town with no ATMs.” (emphasis added)

Which brings up the point about Medicaid. If you go to an ER with no insurance, if you qualify, the Hospital will automatically start the enrollment process for Medicaid. Why? For Medicaid eligible patients, that’s the only way the hospital can reasonably expect any reimbursement, no matter how miniscule, at all. The article references doctors not accepting Medicaid. It’s real simple to read between those lines…. “low reimbursements”.

I suggest reading some of my other posts on Medicaid starting with: Medicaid is a type of insurance but is their coverage?

And the general Medicaid blog tag.


The article goes on to explore issues with Medicaid, why ER is the first stop for many patients and the primary care doctor shortage. It concludes…

Doctors and hospital officials said ER staff members try to let people know when it’s appropriate to use the department, when they should use immediate care centers and when they should seek care at a doctor’s office. They also refer patients to providers such as Family Health Centers for follow-up.

Mason said another promising solution is “care coordination,” in which primary-care doctors work with high-risk patients to help them control illnesses and navigate the health care system. She pointed to a study showing care coordination helped reduce ER visits by 9 percent from 2011 to the first half of 2013 among Oregonians in the pre-ACA expanded Medicaid program.

Mason said letting nurse practitioners practice and prescribe on their own also may help by giving people another treatment alternative.

But Mason and others said such efforts may not immediately alleviate the crunch on ERs.

“It will continue to go up if we don’t build our primary-care capacity,” she said. “It will continue to go up if we don’t support alternatives such as retail clinics. And it won’t get better if we don’t educate the public about the correct use of emergency departments.” (emphasis added)

To reduce the shortage of primary care doctors will take incentives and better pay. What it won’t take is more rules, regulations and paperwork/computerwork.

The rise of the “mini-clinic” may also be quite helpful, but that model will also be put under financial strain from low Medicaid reimbursements.


Enrolling outside of Open Enrollment

What events, technically called Qualifying Life Events (or QLE’s) allow you to enroll outside of Open Enrollment? The Colorado Exchange or as they prefer to be called, “Marketplace” has released an excellent document that describes these events:

Continuation of Health Coverage: Know Your Options

Pay special attention if you are deciding whether to enroll in COBRA or select a plan (and possibly premium assistance) via the Marketplace. You must notify Connect for Health Colorado, or the Federal Exchange, within 30 days of your termination date.

Download (PDF, 2.61MB)


Obamacare: Medicaid Enrollment Problems

The Hidden Failure of Obama’s Health Care Overhaul : Roll Call News.

At least 2.9 million Americans who signed up for Medicaid coverage as part of the health care overhaul have not had their applications processed, with some paperwork sitting in queues since last fall, according to a 50-state survey by CQ Roll Call.

Those delays — due to technological snags with enrollment websites, bureaucratic tangles at state Medicaid programs and a surge of applicants — betray Barack Obama’s promise to expand access to health care for some of the nation’s most vulnerable citizens.

I’ve had clients that experienced this first hand, although most were able to over come the issues with persistence. Medicaid is a Federal Government/State partnership so the Medicaid experience can vary from state to state.

Medicaid is a joint federal-state health program for the poor seen as a linchpin to expanding health coverage under the 2010 law (PL 111-148, PL 111-152).

Eligibility for the program is determined by federal and state guidelines, with the administration of the program left to the states. People enroll for Medicaid through federal or state websites or use other avenues, such as filing paper applications.

I suspect the big problem is overload. Prior to Obamacare, those who applied for Medicaid either wanted Medicaid coverage or it was their only option. Thanks to Obamacare, anyone who wants an advanced subsidy (i.e. receive the subsidy monthly) has to first apply for Medicaid. Typically the goal is to be DECLINED and receive a case number that shows up in the exchange database showing the decline. Assuming the applicant’s income is not above 400% of the Federal Poverty Level, in most cases they will qualify for a subsidy.

As you can imagine, Medicaid was suddenly, although it should not have been unexpectedly, bombarded with applications from people seeking health insurance with a government subsidy. They did NOT want Medicaid, their goal was to be declined so they could finish their application and receive a subsidy. It looks like the Medicaid system is still struggling with the inrush of applications today.


The $500 per family “HIT” tax on small businesses

Small business picks up Obamacare tab – Opinion – The Boston Globe.

Instead of supporting this type of innovative growth, the president’s health care law stifles it. The employer mandate — requiring employers with 50-plus employees to comply with expensive requirements — was long planned, left unexplained, then delayed. Many companies endured chaos as Washington contorted. Small business owners, always hit harder with the cost of compliance, don’t know what will hit them next.

Now business leaders are discovering a new provision, hidden as a “fee” on health care insurers. This is a tax that will be passed straight onto small businesses and their employees. The small business community calls it the health insurance tax, or HIT, for good reason — this is essentially a tax on Main Street USA. The added cost doesn’t affect big businesses; they self-insure their employees. The HIT only hits the health-insurance marketplace, where most small businesses and the self-employed purchase their health care plans.

The HIT charged to health-insurance companies will be passed on to small business. In turn, those companies, with typically slim profit margins, will pass the HIT on to employees. Since small businesses employ two-thirds of all the US workforce, most Americans will pay the bill. Families will pay up to $500 more each year beginning in 2014. The tax will actually increase over time, causing a greater burden in the years to come.

If you work for a small business, it’s time to “wake up” and realize these taxes will affect you. If you own a small business, you need to make sure your employees know about this tax and understand that the cost will be passed along.