WGA InsureBlog

With health care costs escalating and the number of uninsured Americans estimated at 50 million, private entities as well as state and federal governments are trying to find effective solutions to ongoing health care problems. Earlier this year, Vermont passed legislation creating a single-payer healthcare system to be operational in 2017, potentially being the first state in the nation to have such a system. It is still too soon to assert that a single payer system is an effective way to combat rising health care costs and ensure coverage for all Vermont residents. Nevertheless, by taking the bold step to pass such a law, Vermont will be under scrutiny as the rest of the country watches what unfolds in the coming years. Read more…

Last Friday evening, HHS Secretary Kathleen Sebelius quietly closed the door on a key revenue component of Obamacare. The CLASS Act, a federally run long term care program that was set to launch next year and tasked with generating $80 billion in revenue over the next 10 years was cancelled. Sebelius in a press release finally openly questioned the programs ability to attract members and generate revenue for the federal government, an argument that opponents of the bill have been making since the concept was introduced.

The revenue claims attached to the CLASS Act have been highly controversial for several key reasons. Even if the wildly optimistic enrollment estimates were accurate, this program was a federally sponsored ponzi scheme in the making, Read more…

The affordability provision of the shared responsibility section of the Patient Protection and Affordable Care Act (PPACA) requires employers that offer health insurance to provide coverage that costs less than 9.5% of the modified adjusted gross income of an employee’s household. That’s a lot of technical speak, but for many, the big question is “How will we know what our employee’s household income is?”

The IRS has proposed a safe harbor test for employers to help them determine if their plans are affordable as part of the shared responsibility provisions of the Patient Protection and Affordable Care Act. They are seeking comments on this proposed safe harbor, and WGA would encourage employers that may be subject to potential penalties to review the safe harbor and provide comments. Read more…

The Center for Medicare & Medicaid Services recently ruled there will be a 2012 Medicare reimbursement reduction of approximately $4 billion (11.1%) on a year-over-year basis for skilled nursing facilities (SNF). There also is the potential of a “claw back” provision designed to seek reimbursement for certain payments made in the past year.

Not-for-profit skilled nursing facilities generally manage with a thin margin; typically in the 3 – 5% range. The planned Medicare reduction coupled with generally recognized underpayments from Medicaid may damage an already challenged business segment – a clear threat to the skilled nursing facility sector – the second largest healthcare facility employer country-wide.

This reduction may force skilled nursing facilities to make tough decisions about continued employment and patient levels and in the worst case scenario continued viability. The trickle Read more…

Since our piece on this study a couple of weeks ago, a number of people, politicians and organizations have chimed in, either disputing the study or supporting it. Comments sections are filling up with various opinions and some clients are starting to ask us what this all means.

Summarizing some of the commentary and actions:

• McKinsey stood by its report, but refused to release its methodology
• A Google search on the study brings up approximately 850 hits. More than most health insurance stories, but fewer than the latest celebrity gossip item.
• The Benfield Group, a healthcare marketing organization in St. Louis, released its Read more…

Much has been said about the impact of health care reform on the medical provider community. Some are predicting the wholesale change of American medicine, for good or for bad. Others take a much more conservative approach to guessing the effects of the ground breaking law. There is, however, some early consensus of how the reforms may drive more physicians to seek employment within hospitals systems. If this trend does in fact take place, there is a belief that it will drive more and more physician malpractice coverage into hospital-owned captives.

The logic behind this concept seems sound. A recent article in Business Insurance magazine noted the drive for hospitals to capture additional revenue from the new outcome-based reimbursement policies contained in the reform law. This drive will force hospitals to add medical staff Read more…

FierceHealthcare reported that “a new study by Merritt Hawkins reveals that physicians are compensated for patient volume and not quality, a trend that has some dismayed at current recruitment and compensation approaches.”  While the article was geared towards compensation practices for attraction and retention of hospital-employed physicians, it also reflects how an enormous driver of U.S. healthcare costs is going unaddressed.

Over the past two years, much debate and litigation has been directed towards the Patient Protection and Affordable Care Act (PPACA). In short, PPACA is a healthcare financing mechanism which provides for universal healthcare in America based on the mandatory purchase of coverage through health insurance exchanges. The act also provides patients with additional rights, especially with regard to pre-existing conditions Read more…

A recently released survey of 1,300 employers by the management consulting firm, McKinsey & Company, found that 30 percent of them will probably or definitely stop providing health insurance to employees in 2014. At that time, exchanges will be operating and employers may pay a penalty whether they offer health insurance or not (go here for the entire report).

To me, the two most interesting statistics in the survey are:

1.  Over 50% of employers that have “a high awareness” about health reform provisions will follow this strategy. So, the more they know about the Patient Protection and Affordable Care Act (PPACA), the more they are thinking about such a radical change.

2. 85% of employees would remain at their jobs, but would expect higher pay to make up for what the employer has historically paid towards health insurance. So, as long as the company Read more…

On Wednesday, a federal appeals court in Atlanta heard arguments in the lawsuit that was brought by Florida and 25 other states. The three-judge panel expressed concern that some of the features of the Patient Protection and Affordable Care Act would have difficulty standing up to constitutional scrutiny. In addition to Atlanta there are two other federal panels that are set to hear challenges to the health reform law.

At the forefront of this court’s review is the “individual mandate” which requires everyone to carry health insurance or be subject to financial penalties. The acting U.S. Solicitor General who represented Health and Human Services, indicated that the individual mandate was a tax and therefore constitutional. This position is curious as it contradicts the message from the Obama administration in which individual taxes would not be increased as a result of the health reform law. See the CNN article for more details.

Connect with Anita Verheul on LinkedIn.      Photo via CNN.

An interesting article in Sunday’s New York Times points to the financial difficulties many nursing homes and home health care agencies will face starting in 2014 in order to comply with the new federal health care law. The new health care law is supposed to guarantee access to affordable coverage for all. But many nursing homes and home care agencies have started lobbying efforts seeking some kind of exemption or special treatment. Starting in 2014, the law will require employers with 50 or more full-time employees to offer affordable coverage or risk paying a penalty. For a midsize nursing home, that penalty could easily exceed $200,000 a year. The American Health Care Association, the largest trade group for nursing homes, says the problem is that reimbursement rates for Medicaid and Medicare do not pay them enough to offer their employees medical coverage. Read more…