Health Care Just Keeps Getting Bigger

16446238A few health care economic facts to consider:

  • The United States spends more on health care than any other country – $3 trillion in 2014. That equals $9,523 per person or 17% of gross domestic product
  • In the six years after the recession, health care added 2.1 million jobs, more than the next three industries combined – leisure and hospitality, professional services and education
  • Employment in health care is projected to grow by 19% from 2014 to 2014, adding about 2.3 million new jobs
  • Nearly one in 11 overall jobs is in the health care field. In 2014, that was 12.2 million jobs
  • The top five states with highest percentage of jobs classified as health care jobs: West Virginia, 11.4%; Rhode Island, 11%; Maine, 10.8%; Ohio, 10.6%; and Massachusetts, 10.4%

Chamber on Federal Approval of HIP 2.0 to Satisfy ACA Requirement

Indiana Chamber of Commerce President and CEO Kevin Brinegar comments on the federal Centers for Medicare & Medicaid Services giving the green light to the Healthy Indiana Plan expansion (HIP 2.0), which is in lieu of traditional Medicaid expansion required under the Affordable Care Act (ACA).

“We are very pleased that the Centers for Medicare & Medicaid Services (CMS) appreciated Indiana’s unique brand of addressing the needs of our uninsured population and recognized HIP 2.0 as the best option for Indiana to expand health care coverage. The Indiana Chamber had reviewed HIP 2.0 and urged CMS to approve it.

“HIP provides reimbursement to health care providers at Medicare rates. Otherwise, health care providers recover such losses by increasing prices for private sector employers and their employees through cost shifting. Any attempt to lessen that cost shift is welcome.

“What’s more, the approval of HIP 2.0 will provide health care coverage for tens of thousands of additional Hoosiers and bring billions of dollars into Indiana’s economy.

“We applaud Gov. Pence and his administration for recognizing that HIP 2.0 was the best course for the state and for staying firm in that belief.”

Chamber Analysis of Governor’s Request to Expand Healthy Indiana Plan

The Pence administration last week unveiled plans to request a waiver from the Centers for Medicare & Medicaid Services (CMS) to expand the Healthy Indiana Plan (HIP). This expansion of HIP would be in lieu of a traditional Medicaid expansion. The announcement had been anticipated for several weeks.

The Healthy Indiana Plan, or HIP 2.0 as it is now being referred to, will have three “pathways” to coverage: HIP Basic, HIP Plus and HIP Employer Benefit Link. It is funded through the existing cigarette tax, the hospital assessment fee and federal Medicaid funds.

The Basic HIP plan is for Hoosiers below 100% of the federal poverty level (FPL). Basic members use an entirely state funded power account (similar to a health savings account) to cover a $2,500 annual deductible. The HIP Plus plan is for Hoosiers under 138% of FPL. They will be required to make contributions that range from $3-$25 per month. Members of HIP Plus and the state will jointly fund the power account based on a sliding income scale. This plan also includes dental and vision coverage.The HIP Employer Benefit Link allows HIP eligible individuals to enroll in either HIP Plus or receive a defined contribution power account funded by the state to access an employer-sponsored program. The defined contribution must be used to pay for premiums, co-pays or deductibles.

The Indiana Chamber has supported the expansion of HIP as an alternative to a traditional Medicaid expansion. The HIP plan has encouraged individual responsibility by attempting to mirror consumer driven health plans. HIP also reimburses at 100% of Medicare (higher than Medicaid), which ensures more provider participation and reduces cost shifting to the private sector, a point that is important to employers. The Indiana Chamber believes that the HIP Employer Benefit Link option will be an interesting program to potentially provide coverage to Indiana’s working poor. The Indiana Chamber will be securing more details on how the program will be implemented and will provide our members that information as it is received.

On a related note, this $25 million budget savings to the state – if the HIP expansion is approved by CMS – could cause some problems for insurance carriers providing health insurance coverage to the individual market in the insurance exchange/marketplace. The state is transitioning from a (209b) state, with its own disability definition, to what is called a “1634” state. Under a 1634 state, the administration will accept disability definitions of the Social Security Administration. As a result of the switch, the state will no longer be required to maintain a spend-down program. This program allowed those with high medical expenses to become eligible for Medicaid after they spent a designated portion of their monthly income on medical expenses. As of December 2013, there were over 134,000 people in this spend-down program.

Of that spend-down population, nearly 7,500 have incomes over 100% of FPL. It is this population that will be transferred to the insurance exchange/marketplace to purchase qualified plans in the commercial market. Medicaid claims for those individuals have been over $1,800 per member per month. Total claims for March 2013 through March of 2014 were $134 million. That amount is significantly higher than under normal individual insurance plans.

Insurance carriers participating in the insurance exchange filed their rates in May of last year. Those rates included calculations for the high risk pool being transitioned into the exchange, but the 7,500 “1634” transition eligibles are not included in those rates. This has serious impacts on those carriers: Significant losses to those participating which will result in considerable increases in current rates to cover the cost; those carriers that waited and will be coming into the exchange in 2015 have an advantage over those current participants in that they are taking on none of this additional risk; and for the smaller carriers there is a concern whether they will be able to participate in the exchange in the future, thus potentially jeopardizing Hoosier choices.

The Indiana Chamber will continue to evaluate and comment on this issue as more information is available.

Chamber Members: New ACA Helpline can Help Alleviate Your Health Care Stress

Concern over the Affordable Care Act (ACA) — from its complexity to actual implementation — is something we continue to hear a lot about from the business community. To better assist with those inquiries, we are pleased to introduce a new service exclusively for Indiana Chamber members.

The Indiana Chamber's ACA Helpline is now here to help your organization navigate through the complicated health care reform processes and obligations. This FREE service is similar to the popular HR Helpline; we encourage employers of ALL sizes to use this member benefit.

Mike Ripley, Chamber vice president of health care policy, will be answering your questions. He is a former insurance agency owner and was chairman of the House Insurance Committee as a state representative.

Ripley says while employers are faced with a more reasonable timeline overall due to the employer mandate being delayed until January 2015, there is still plenty that needs to be taken care of between now and then. Virtually all the rest of the employer responsibilities and various levels of compliance remain the same — as other ACA provisions were unchanged.

Among the common questions from employers:

  • Who is considered a full-time employee?
  • What if we offer coverage but our employees don't take it?
  • What is the employer shared responsibility payment?
  • Do we have to provide notice to our employees?
  • How do we know if our coverage is affordable/provides minimum value?
  • Will our company qualify for small business tax credits?

Make your own list of issues and start using the Chamber's ACA Helpline today! Call Mike Ripley at (317) 264-6883 or send an email to [email protected].

Indiana’s New Medical School Opens

Tried to get in to see your primary care physician lately? It’s possible you’ve found it harder and harder to get a quick turnaround time on an appointment, unless it was scheduled months in advance.

There’s a likely reason for that: a shortage of primary care physicians, plus more patients in the system, equals less time for you to see your doctor. (That’s not to mention what will happen when the full brunt of the Affordable Care Act begins in 2014, forcing huge numbers of new patients to vie for attention from a dwindling number of physicians.)

In 2011, I wrote a story for BizVoice® magazine about Marian University opening the first college of osteopathic medicine in the state – and the first new medical school to open here in more than a century.

The Marian University College of Osteopathic Medicine will open next week and will produce about 150 graduates per year, according to a press release from the school.

While writing that story I found some sobering facts about our looming doctor shortage:

“The American Association of Colleges of Osteopathic Medicine is predicting a shortage of more than 150,000 doctors by 2025 (nationwide).

“Indiana’s statistics are staggering: The state is short 5,000 physicians. By 2020, Indiana will need 2,000 more primary care physicians. Of 92 counties, 57 are medically underserved. The mental health provider shortage is 38%, while the deficiency in primary health care physicians is 30%”

So you can see we have a dire need for more physicians.

Do you know the difference between an osteopathic college and a college of medicine? Here’s a quick run-down of the differences:

  • Doctors who graduate from an osteopathic college earn a DO degree; those who graduate from a college of medicine earn an MD degree
  • DO’s and MD’s are in the same medical board; qualifications are essentially the same
  • It mainly comes down to philosophy. When I spoke to the college’s dean, Dr. Paul Evans, in 2011, he said this about the difference: “The philosophy of osteopathic medicine stresses looking at the patient as a whole and the wellness and prevention aspects of medical care. The bottom line (for both) is to treat the patient”
  • Students in both types of school earn a four-year degree and then begin three to seven years of postdoctoral medical education, residencies and fellowships
  • Osteopathic medicine traditionally graduates more primary care physicians

After that story, I sought out a DO for my primary care physician and am quite happy with the results. Cheers to the new school of osteopathic medicine!

Ripley Discusses Medicaid Expansion with IBJ

Mike Ripley, the Indiana Chamber's VP of health care policy, was recently interviewed by the Indianapolis Business Journal about Medicaid expansion in Indiana. Here's what he said:

Mike Ripley, a health care lobbyist for the Indiana Chamber of Commerce, talked about the business group’s views on a proposed expansion of coverage by the Indiana Medicaid program. As it stands now, the 2013 Indiana budget bill includes a plan passed by the Senate as Senate Bill 551, which would have OK’d the Pence administration to negotiate a block grant deal with the U.S. Department of Health and Human Services to expand Medicaid coverage via a program like the Healthy Indiana Plan. When that bill was altered in the House to remove the block grant concept, the chamber dropped its support. The altered House bill is now dead, and the original Senate plan has been added to the budget bill. Its ultimate fate is still unknown.

IBJ: Why did the chamber drop its support of SB 551 when the House altered it so it no longer required the state to negotiate a block grant with the government?

A: The inference is that, you’re on the hook for the full expansion, however you do that. And at the end of the day, how do you pay for that? How I’ve interpreted the block grant is, "OK, we’re going to get X amount of dollars and then we expand as much as we can." But without that, it’s pretty much open-ended.

IBJ: Why is an open-ended expansion of Medicaid, which is what President Obama’s health reform law originally called for, a problem—particularly considering that the federal government will pay 100 percent of the expansion costs for three years and then step its support to no less than 90 percent by 2020?

A: Then after 2020, what happens then? Where do you come up with those resources? That’s where we’ve been very concerned from a business perspective. Because who’s going to foot that bill? Employers are.

IBJ: Why do you prefer expanding coverage via the Healthy Indiana Plan, which gives participants a health savings accounts to pay for health care, but also caps enrollment if their use of health care exhausts the state’s allotted revenue for the program?

A: It has better reimbursement [than Medicaid] for doctors and hospitals. And it puts some skin in the game for individuals. I think that’s the best of all worlds. You’re not going to get everybody covered. But it’s something we can cope with financially.

CBO Estimate of Those Who Will Lose Employer-Provided Health Insurance Under ACA Doubles

The Washington Times reports that many more Americans than previously thought will lose employer-provided health insurance due to the newly enacted health care law, supported by President Obama. This unfortunately contradicts his campaign rhetoric during the 2012 debates and speeches on the matter.

President Obama's health care law will push 7 million people out of their job-based insurance coverage — nearly twice the previous estimate, according to the latest estimates from the Congressional Budget Office released Tuesday.

CBO said that this year's tax cuts have changed the incentives for businesses and made it less attractive to pay for insurance, meaning fewer will decide to do so. Instead, they'll choose to pay a penalty to the government, totaling $13 billion in higher fees over the next decade.

But the non-partisan agency also expects fewer people to have to pay individual penalties to the IRS than it earlier projects, because of a better method for calculating incomes that found more people will be exempt.

Overall, the new health provisions are expected to cost the government $1.165 trillion over the next decade — the same as last year's projection.

With other spending cuts and tax increases called for in the health law, though, CBO still says Mr. Obama's signature achievement will reduce budget deficits in the short term.

During the health care debate Mr. Obama had said individuals would be able to keep their plans.

A Statement on Today’s Health Care Decision by the Supreme Court

Indiana Chamber of Commerce President and CEO Kevin Brinegar reacts to the U.S. Supreme Court’s ruling on the Affordable Care Act, announced today:

Conventional wisdom and national polls showed many Americans favored repeal of the measure, so we are surprised by the Court’s decision.

"Our concern is the impact the health care law — now that it’s going forward — will have on Hoosier businesses and their workers. Mandating coverage for pre-existing conditions and extending coverage for dependent children to age 26 will cause increases in health care costs; there is no way around it.

"That will force many employers to make the difficult decision to stop offering coverage and push employees into the federal plan. It puts the nation on the road to universal health care.

Pres. Obama’s Health Care Plan in Limbo

Businesses everywhere are anxiously awaiting how the Supreme Court will rule on President Obama’s federal health care reform plan this week. The decision will have many ramifications for businesses — and could even force some to reverse adjustments they’ve been making since 2010. CNBC reports:

First, an important caveat: Most of the employer provisions of the health care reform law apply only to businesses with 50 or more employees. So, if your business is smaller than that, you’re mostly off the hook — and you won’t be required to provide health insurance to your employees regardless of what the court decides.

But if your company is larger — or if you’re already growing and expect to someday employ more than 50 people — there’s a lot of unsettled business. Bigger firms that fail to offer their employees insurance could wind up paying government fees, which would kick in when employees obtain insurance independently. At the same time, the law would create exchanges and subsidies for individuals who buy insurance on the open market, and would also expand the Medicaid program.

Of course, there are many other provisions and exceptions. For example, even though companies with more than 50 employees would be required to provide insurance, they would also be allowed to skip paying the $2,000-per-employee government fee for the first 30 employees who didn’t have health insurance. (If you’re having trouble with that exception, rest assured that we had to think it through a dozen times before it made sense, too.) The truth is that once you get deep in the regulations  —many of which haven’t even been written yet —nobody really knows how things will settle out.

The Individual Mandate

Most of the legal attention has been focused on the so-called "individual mandate," which requires people to purchase health insurance, either through their employers or on the market. It was this provision that garnered the most pointed questions from the justices at oral argument in March.

"Can you create commerce in order to regulate it?" Associate Justice Anthony Kennedy asked at the time, apparently trying to figure out how the United States could justify requiring people to buy health insurance under the Commerce Clause of the U.S. Constitution. He later added that he believed the government faced "a heavy burden of justification," and was "changing the relationship of the individual to the government."

Under the mandate, individuals who fail to acquire insurance would be subject to government fees — although the exact nature of those fees, and whether they would amount to taxes, penalties or something else — is one of the more esoteric but important issues in the case before the court.

Despite the 2,400-page law’s complexity, the possible outcomes really fall into three categories. The court could strike down the law, uphold the law, or strike down some provisions. If that happens, it’s most likely that the court would get rid of the individual mandate will while upholding the rest of the law.

Also, Barbara Lewis of Inside INdiana Business spoke with Ice Miller’s Greg Pemberton about the possibilities and what they mean for the business community.