Obamacare: Coverage Costs Widely Vary by State

How much will individuals pay for health insurance through Obamacare? Although Obamacare is a nationwide healthcare initiative, the coverage costs will vary depending on each state.

According to data recently released by the Department of Health and Human Services, Americans under the age of 65 who purchase coverage through the new healthcare act will end up paying the highest rates in Wyoming, while those who opt into the program in Minnesota will end up spending the least. Meanwhile, the states of Kentucky and Massachusetts have not yet released their coverage rates.

When it comes to unsubsidized costs, Minnesota comes in with the lowest rates, and is the sole state offering middle-tier “silver” plans for less than $200 a month. Furthermore, the lowest tier of ACA coverage, also called the “bronze” plan, calls for average monthly premiums of $144. In comparison, the state of Wyoming offers the bronze plan at an average of $425, while its silver plans begin at $489.

Meanwhile, in all other states across the U.S., bronze plans are offered at an average of $249, while silver plans begin at $310. Aside from the fact that silver plans, on average, are priced at 16 percent less than the projected $392 per month, government officials report that 56 percent of uninsured participants will be able to pay $100 or less each month. Nevertheless, the monthly cost exceeds the prior projected price tag of $392 in seven states.

Another influential factor for determining coverage rates under Obamacare is age. The Department of Health and Human Services reports that the average cost for younger Americans will likely be lower than what older people will be required to pay. As a general rule of thumb, states with more competing insurers will be charged lower rates than those states with fewer participating insurers.

With the help of an online subsidy calculator, individuals can get a better idea as to how much they can afford to spend on health insurance. By inputting various factors such as income level, age, and family size, an estimate will be calculated to help determine an individual’s eligibility for subsidies.

ACA: Updates, Delays, and Deadlines You Should Know

A number of delays have plagued the implementation of the Affordable Care Act, and new deadlines have been established. Following is a brief rundown of delays and deadlines to keep your understanding of the ACA up to date.

Deadlines

Reporting employee status: Employers must begin to collect information about their employees’ status over a 12-month period of their choosing in order to estimate their tax liability when the employer mandate takes effect next year (see Delays, below). Beginning in 2015, employers subject to the mandate will be required to offer coverage to employees who work full-time or pay the corresponding penalty.

Marketplace notification: Employers subject to the FLSA should have notified their employees of available health care options on the health insurance exchanges by October 1, the enrollment start date. If you haven’t yet notified your employees, do so ASAP.

Summary of Benefits: Employees must receive a summary of their provided benefits no later than 30 days before the beginning of the plan year. The summary must indicate whether coverage meets the minimum essential standard established by the ACA.

Delays

Small Business Health Options Program (SHOP) marketplaces: Originally slated to roll out with the individual marketplaces on October 1, the federal government delayed the launch of the SHOP marketplaces to November 1. Plans purchased on the exchange will still begin January 1, and small businesses that purchase their plans through brokers or other means will not be affected.

In addition, the marketplaces will have an additional year to offer a la carte plan options, in which businesses may choose individual coverage for their employees within an overall package.

Employer Mandate: Companies employing more than 50 full-time employees now have until 2015 to provide minimum essential coverage before they are subject to the $2,000-$3,000 per employee tax penalty for noncompliance.

Out-of-Pocket Limits: Some insurance plans will not be subject to consumer out-of-pocket limits ($6,350 for an individual/$12,700 for a family) until 2015. During the delay period, employers who offer separate plans for care and pharmacy benefits will be allowed to maintain separate limits for each plan, and plans that do not have a limit will not be required to implement one.

Update on the Individual Marketplaces

Technological issues that crippled several state exchanges soon after their launch have been resolved, leading to tens of thousands of new enrollments during the first week of operations nationwide. In the meantime, federal officials have acknowledged the need for design and server updates to the federal exchange at healthcare.gov to handle the high levels of traffic and make the experience more user-friendly.

PRN Funding’s healthcare factoring programs can provide the cash flow for your company to effectively fulfill its healthcare responsibilities under the ACA. Contact us to learn more.

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Online Health Insurance Marketplaces Face Tech Hurdles

The rollout of online health marketplaces was marked with technological difficulties at various stages of the process.

Users attempting to access the federal marketplace via healthcare.gov experienced glitches when signing up for an account, which the Center for Medicare and Medicaid Services attributes to overwhelming visitor traffic during the first several hours the exchange was live. While the CMS claims they addressed initial issues right away, the marketplace was still fraught with issues well into the afternoon and eventually shut down.

State-run marketplaces in 17 different states also reported high traffic and sporadic glitches. Users may seek assistance via the live chat function or call centers, or they may contact a local healthcare representative. Unfortunately, these avenues will not allow customers to compare plans or view more detailed information regarding each plan’s deductibles and coverage. Some states are still experiencing issues today.

While not unexpected, these issues have frustrated and dismayed many consumers who are eager to realize the promise of affordable healthcare. Still, a number of people have successfully used the marketplace to purchase insurance, and consumers still have plenty of time to sign up for insurance – the deadline for coverage beginning January 1 is December 15, and the open enrollment period will continue until March 31, 2014. Officials maintain that glitches are normal for any large-scale tech rollout (see: Apple); for the moment, consumers may be better off just waiting it out.

Currently, approximately 15 percent of the population is expected to use the marketplace to purchase insurance in the absence of employer-provided health plans or benefits from the VA, Medicare, and Medicaid.

Learn how factoring can provide the cash flow to provide insurance to your employees.

Some Employers Cut Back Health Insurance to Contain Costs

In an effort to offset rising insurance costs, and in part as a response to the Affordable Care Act going into effect, some employers will begin requiring their employees to pay an additional fee for their spouses’ healthcare coverage, or will eliminate that coverage entirely.

Some companies, such as UPS, have decided to exclude spouses from their employer-sponsored health plans beginning in 2014 if those spouses have access to health insurance through their employers. Experts suggest this as a reasonable cost-cutting measure for a couple of reasons: one, covered spouses are more likely to be women, who use the health system more through middle age and therefore cost more; and two, the employer mandate will shift those costs by requiring the spouses’ employers to offer affordable coverage.

Another factor for companies’ consideration is the pending “Cadillac tax”, which will add a further 40 percent tax to premiums above established ceilings for individual and family coverage. While the tax does not take effect until 2018, large companies are working to lower their spending now in preparation. Important to note is that restricted coverage will not affect spouses who do not have coverage through an employer, nor will it impact minor dependents on employees’ plans.

The percentage of companies who plan to eliminate or charge for spousal support is in the single digits, and several studies cited by the Department of Health and Human Services suggest that it will remain a minority plan of action. In addition, the NY Times cites Mercer senior health consultant Barry Schilmeister as claiming this type of action would “not…be a popular move among employees.”

PRN Funding can help healthcare companies seeking a cash flow alternative to scaling back their health coverage. Healthcare factoring is available for vendors filling a variety of healthcare roles, including temporary nurse staffing, medical billing, and home health care. By purchasing invoices for service and advancing immediate cash, PRN’s factoring program provides the flexibility your company needs to provide the right kind of health coverage for your employees.

Contact us to learn more about healthcare factoring and to get started today.

Is Obamacare Responsible for Hospital Staff Layoffs?

Hospital systems nationwide have been in the news lately for projected staff layoffs and other budget cuts. Just this week Cleveland Clinic, Cleveland’s largest employer, announced a $330 million annual budget cut without specifying how much of those cuts would come from staff reduction. Other systems have specifically announced layoffs and staff voluntary buyouts.

A scan of the headlines suggests that the Affordable Care Act is the culprit behind these healthcare staffing changes. But is that really the case?

Some recent headlines:
• Ohio Clinic touted by Obama slashes budget due to ObamaCare (Fox News)
• Citing Obamacare, Cleveland Clinic to cut $300M, Warns of Layoff (US News & World Report)
• Hospital Finds Obamacare Harmful to Its Health (Heritage.org)
• Atlantic General Hospital Hires During ‘Obamacare’ Scare (WBOC TV 16)
• Emory Healthcare to cut 100 jobs party because of Obamacare (WSB-TV)

Quotes regarding the Cleveland Clinic’s budget reduction came from both an unnamed spokeswoman and the Executive Director of Corporate Communications for the Cleveland Clinic Foundation, though the article does not specifically attribute the ACA connection to either source. In the Emory news report, however, an Emory spokesman does acknowledge that the ACA “played a role in the layoffs”.

While most of the mainstream media is running with the ACA-layoff connection, others are digging deeper to discover ongoing root causes that have little or nothing to do with the ACA. Dan Diamond of California Healthline’s Road to Reform reports that the ACA is merely one factor in hospital staffing decisions, and makes the argument that the ACA is actually poised to increase job growth.

Other factors involved in hospital layoffs and hiring freezes include changes in Medicare reimbursement policy; budget reallocation decisions that affect specific departments (as cited in the Emory reduction of inpatient psychiatric staff); and continuing financial challenges.

The ACA’s effect, meanwhile, appears to be more complex than headlines may imply. There is a great deal of uncertainty surrounding implementation of the ACA’s key provisions, and concern that expanded Medicaid coverage will mean lower reimbursements for care. Some hospitals are actually reporting an increase in hiring to provide care for a higher number of patients who are expected to utilize the system once health plans are made available to them.

Another issue reported in Huffington Post is that hospitals in some states are being forced to close because the state is not implementing ACA provisions, namely Medicaid expansion. The ACA reduces funding to hospitals serving large populations of uninsured patients, expanding Medicaid with the savings; however, if state government does not accept the resulting federal Medicaid funding then those hospitals will not be able to recoup the lost dollars.

While the debate over the Affordable Care Act continues to rage in Congress, there will undoubtedly be more headlines attributing hospital cuts to the law. There is certainly a degree of truth to many of these claims, but given the contentious nature of the ACA it is especially important to look beyond the headlines and carefully consider all the facts involved.

As the full effects of the Affordable Care Act remain to be seen, make sure your healthcare staffing agency is prepared. PRN Funding’s healthcare staffing factoring program can provide you immediate cash to expand your workforce or weather staffing gaps in your area. Learn more and contact us today to get started.

Final Obamacare Regulations are in Place

Of the many provisions found in the Affordable Care Act, none is as contentious as the individual mandate. This provision, which requires that affected American purchase health insurance or pay a fine, goes into effect January 1, 2014. The Obama administration released the final regulations for the healthcare reform mandate earlier this week; however, these regulations indicate that the individual mandate will not be the healthcare enforcer that both proponents and opponents claim it to be.

The individual mandate will require taxpayers to cover their dependents (as reported on annual tax returns) or assume the fine for not doing so. The employer mandate, meanwhile, does not require employers to offer insurance for dependents. This could potentially force many individuals to seek supplemental health coverage for their spouses and children in the healthcare marketplace.

In addition, any employer-sponsored coverage will largely meet the mandate’s threshold of “minimum essential coverage”. This has already led to employers offering low-cost plans that cover very few services, and will be a strong incentive to other employers to follow suit.

Both of these are troubling characteristics of a hugely unpopular mandate. Other regulations, though, exempt as much as 40 percent of the population from the individual mandate; people exempt from the individual mandate include:

• The elderly, whose higher premiums and lower income may drive the cost of their coverage over the established limit of eight percent of household income (though a much lower income will qualify individuals for tax subsidies, in which case the mandate applies);
• Those who don’t file IRS tax returns;
• “Members of recognized religious sects” – these protected populations belong to groups such as the Amish that have existed since the end of 1950 and whose tenets are opposed to taking advantage of benefits such as Social Security, Medicare, and Medicaid in addition to health and life insurance plans;
• American Indians – members of recognized Indian tribes already receive government health care through the Indian Health Service.

The prescribed fine (the loftily-titled “Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage”) for failing to purchase health care is itself minimal compared to the potential costs of purchasing outside health coverage. Each taxpayer is responsible for their individual fine as well as the fines for up to two dependents. The fine will increase parallel with cost-of-living adjustments, from the greater of $95/1% of income to the greater $695/2.5% of income per person from 2014-2016.

Even so, the fine’s increase is still smaller than annual insurance premium increases historically. It may be a better financial decision for some people to pay the fine and continue without coverage. Furthermore, the IRS is specifically prohibited from penalizing non-exempt taxpayers who fail to purchase health care or pay the fine; the only thing they are able to do is withhold the fine from your tax return (if you don’t file, see above).

The effectiveness of the individual mandate remains to be seen for consumers, facilities, and vendors, but combined with the employer mandate we will see a large number of new enrollments in healthcare plans around the country.

To ease the transition, and offset the added cost of exempt or non-compliant patients, consider healthcare factoring to keep your cash flow sound.

Employers Shift Health Care Cost Increases to Employees

Kaiser Family Foundation released their 2013 Employer Health Benefits Survey last week. One of their primary findings, according to Bloomberg Businessweek, is that small business owners are providing healthcare benefits to their employees at close to the same rate as they were last year, belying the contention by ACA opponents that benefits would decrease.

However, they are doing so in what Kaiser Family Foundation CEO Drew Altman calls it “a quiet revolution in health insurance from more comprehensive to less comprehensive with higher deductibles.” Higher out-of-pocket costs for employees are seen to offset the rising costs on the employers’ end of providing the healthcare.

Though premiums for family plans only increased by four percent since last year, they have still increased at a higher rate than employees’ take-home pay. Higher premiums, higher deductibles, and comparably lower paychecks are likely to cause concern among families facing a difficult time paying for medical care.

While it isn’t yet clear if these higher-deductible plans will meet the ACA’s requirements for affordable care, in the short run the added financial strain may very well extend beyond the policyholders to their healthcare providers. Hospitals and other medical facilities may delay or withhold payment of invoices as they wait for their patients to pay, creating a gap in cash flow that will be difficult for many small businesses to overcome.

Get ahead of the problem with medical receivables factoring. Same-day cash advances will allow you to continue providing excellent service to medical providers and stop rising healthcare costs from sinking your small business.

The Affordable Care Act Defines Full-Time Employment

As provisions of the Patient Protection and Affordable Care Act (ACA) continue to take effect, there is considerable friction over the ACA’s definition of a “full-time employee” and its implications for providing health coverage to those employees. The Fair Labor Standards Act defers to employers to define full-time employment; however, the ACA bases its definition of full-time employment on the Internal Revenue Code of 1986: “an employee who is employed on average at least 30 hours of service per week”.

Such a designation, opponents argue, may cause employers to choose between providing healthcare to a greater number of employees and cutting full-time employees’ weekly hours by at least 25 per cent to force them below the full-time threshold. Senator Susan Collins (R-ME) has introduced the “Forty Hours Is Full Time Act of 2013” on two separate occasions in an attempt to revise the IRC and, by extension, the ACA. Economist Casey Mulligan argues in The New York Times, however, that passage of such a law would actually cause more employers to cut their employees’ hours and result in more of a taxpayer burden.

According to Mulligan, it is easier for an employer to cut an employee’s hours from, say, 45 to 39 without drastically affecting the work schedule. Projections of employer cost between full-time, part-time at <30 hours and part-time at <40 hours show that the difference in a 39-hour work week and a 40-hour work week is almost negligible for employers; meanwhile, the employee becomes eligible for ACA tax incentives to purchase private insurance on the marketplace – costing the taxpayer more – and ends up with an increase in take-home pay at the same time.

The arguments above suggest that business owners need not shy away from expanding or offering full-time benefits to their employees in an attempt to cut costs; rather, service providers in medical industries may find themselves at an advantage. After all, some facilities will choose to scale back their in-house staff and rely on outside contracts, leaving a great opening for vendors to expand their own businesses.

Healthcare factoring can help those companies close the gap between their own cash flow and expenses, and ease the strain of expansion by providing the capital to cover increased overhead. Find out how PRN Funding’s accounts receivable factoring program can be tailored to your company’s needs.

2014: Expect a Busy Year for Healthcare Staffing Agencies

Thanks to a slowly improving economy and the implementation of the Affordable Care Act on the horizon, those in the healthcare staffing world need to be prepare their recruiting strategies.

Healthcare workers, especially physicians, nurses and clinical staff, are growing more confident about their job prospects and may be seeking more lucrative employment offers. The physician shortage will undoubtedly make it tough on the healthcare staffing industry as well.

In order to meet medical staffing demands, certain states are allowing APRNs, physician assistants and other mid-level healthcare providers to step in. Giving mid-level providers more freedom and responsibility will help off-set the physician shortage and open up more career opportunities.

Although healthcare hiring appeared to be slowing in July, medical staffing should prepare for a fast rebound in 2014. Make sure your staffing agency is ready to handle the demand. Discover the ways healthcare staffing factoring can ensure your cash flow remains stable despite rapid growth. PRN Funding has spent more than a decade in the healthcare services industry, and we can design an accounts receivable factoring program specifically for your staffing firm.

Learn more about accounts receivable factoring for healthcare staffing agencies.

Obamacare Out-of-Pocket Caps Provision Delayed

Another important provision of the Affordable Care Act has been postponed. The provision that would set caps for out-of-pocket insurance costs will be delayed for more than one year. Under Obamacare, the limit on out-of-pocket costs like deductibles and co-payments was not supposed to exceed $6,350 for individuals and $12,700 for a family. Now, it appears that a one year grace period has been granted to some insurers which enables them to raise limits, or in some cases, set no limits until 2015. Also, if a drug plan doesn’t currently set out-of-pocket limits, they won’t have to impose any until 2015.

The delay will leave some consumers paying much more for health insurance and drug coverage. The lag allows many group health plans to maintain separate out-of-pocket limits.

Why the health care reform delay? The New York Times reported that federal officials wanted to provide insurers and employers more time to comply because they used “separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs. In many cases, the companies have separate computer systems that cannot communicate with one another.”

The chief executive of the National Health Council said the delay will “disproportionately harm people with complex chronic conditions and disabilities.” For those with chronic illnesses like cancer, out-of-pocket costs can swell to tens of thousands of dollars each year. The same applies to prescription drug plans. Many patients will have to wait for access to affordable prescription drugs because of the out-of-pocket cost cap delay. The American Cancer Society noted that some new cancer drugs can cost more than $100,000 per year.

Obamacare still affords some consumer protections. Consumers can’t be denied insurance or face higher premium costs due to pre-existing conditions. Subsidies may be available to help bring down costs as well.

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