Category Archives: Health Care Reform

We’re Not the Only Ones Worried about an Implementation “Train Wreck”

From the National Assoication of Health Underwriters, April 19:”

A top Senate Democrat changed his tune a little bit this week
concerning PPACA. During a Senate Committee on Finance hearing, Senator
Max Baucus (D-MT), the Committee’s chairman, expressed some serious
concerns regarding the Obama Administration’s handling of the
implementation of the health reform law he helped to draft.

HHS Secretary Kathleen Sebelius testified on behalf of her
agency and the president’s budget proposals in front of the Senate
Finance Committee on Tuesday. During Sebelius’ testimony, Senator Baucus
questioned her on the implementation efforts of the law, state exchange
preparedness and employer and small business knowledge. Despite the
secretary’s efforts to reassure the committee that exchanges will in
fact be set up and ready for open enrollment come October 1, 2013,
Senator Baucus expressed his fears that unless the administration
improves its outreach efforts to businesses in particular, health reform
implementation will be a “huge train wreck.”

Baucus is the first top Democratic senator to publically voice
such bold concerns regarding implementation of health reform. Many
consumers, he told the committee, will not have enough information
available to them to make informed healthcare decisions. Small
businesses are going to struggle if the administration doesn’t provide
them with more information and more assistance in the near-term future.
Baucus also spoke to the confusing nature of the law and the influx of
rules and regulations that have been quickly been coming down from the

Specifically, Baucus expressed his concern over navigators,
stating that whenever he has asked the Administration a question about
this program, he has received no answer. He went on to wonder out loud
if a top Democratic United States senator is having difficulty getting
answers from the Administration, how are businesses and consumers going
to get that information? Sebelius informed the committee that, come
summer, there will be many people on the ground in every state educating
the American people on the law and what to expect in the months to
come. Additionally, she promised that HHS will be holding webinars to
educate people on the role of navigators and how they may be of help
during this process. However, when Senator Baucus asked for concrete
data on the people in each state who will be going around educating
people, the secretary had no answer. Baucus, who seemingly became
progressively more frustrated as the secretary spoke, noted, “We need
data…you never give me any data. You give me concepts, frankly.”

Since making this statement, Baucus, who is up for reelection
next year, has received heat from both sides of the aisle. Some of his
fellow Democrats noted that they, unlike Chairman Baucus, were pleased
with the law and members of the Tea Party have deemed him a hypocrite.
Meanwhile, some Senate Republicans have welcomed him into the
“anti-ObamaCare” club despite his questionable timing. Following the
hearing, Baucus had an aide release the following statement: “There
should be no confusion about this. As Senator Baucus said yesterday, he
thinks this is a good law and he’s simply holding the Administration’s
feet to the fire to make sure they do their job implementing it
correctly and informing people about the benefits that are available to
them, which will bolster the efforts of folks working to implement it at
the state level.”

Meanwhile, after the hearing, Secretary Sebelius told reporters
that the exchanges are on track to open for open enrollment in October
and the marketplaces will be fully implemented come January 2014.

HHS is requesting from Congress an additional $554 million to
be used for outreach and education related to implementation of PPACA.
While HHS may have a concrete use in mind for the money, it is highly
unlikely that a Republican-controlled House will approve the additional
funding. Recent surveys have indicated that the majority of the American
public do not have enough information and do not have a true
understanding of how the health reform law will impact them. There is a
clear need for more education and outreach of PPACA. The trillion-dollar
question, however, is still: How is this actually going to happen?

Sebelius: Exchanges will be ready on time, no need for backup plan

By Sam Baker | 04/12/13 01:26 PM ET

The Health and Human Services Department will meet its central
ObamaCare deadline and does not need a backup plan for delays, HHS
Secretary Kathleen Sebelius said Friday.

Sebelius told the House Ways and Means Committee that a federally run insurance exchange will be up and running by Oct. 1.

“No,” Sebelius said when asked whether there’s a backup plan in case that
deadline slips. “We are determined and on track to meet the Oct. 1

The federal government is operating all or part of the exchanges in 33
states — a massive logistical undertaking on a tight timeline.

The healthcare law envisioned most states setting up their own exchanges
and authorized a federal fallback in states that didn’t. But Republican
governors have largely resisted setting up their exchanges, forcing the
federal government to step in.

Although many states have refused
to set up their own exchanges, several states are willing to take over
the marketplaces after the federal government builds them, Sebelius

“We are actually in conversations with lots of states” that
could see themselves taking over their exchanges down the road, she

Although the healthcare law directed HHS to set up fallback
exchanges, it did not provide any funding for the federal exchange. The
department has scraped together funds from other areas and drawn from a
$1 billion account set aside for general implementation of the
healthcare law.

Sebelius noted that the Congressional Budget
Office estimated the total cost of implementation at $10 billion. The
HHS has done “an extraordinary job” stretching its resources, she said.

“I think the good news is we’re well under what the budget estimates were,” Sebelius said.

The HHS budget request sought $1.5 billion for the federal exchange, but Congress is unlikely to provide that money.

Department officials have been vague about the consequences of not receiving the additional funding.

Sebelius said Friday that the $1.5 billion would help her department with
information technology projects, including the data hub that exchanges
will use to retrieve information from other state and federal agencies

“That’s really to get the IT hub, the call center, the IT up and running,” she said.

But later in the same series of questions, Sebelius said the data hub is nearly finished.

“The hub is basically built and paid for,” she said.

Pentagon struggles with high cost of health care

AP | By | April 8, 2013
WASHNGTON (AP)— The loud, insistent calls in Washington to rein
in the rising costs of Social Security and Medicare ignore a major and
expensive entitlement program — the military’s health care system.

Despite dire warnings from three defense secretaries about the
uncontrollable cost, Congress has repeatedly rebuffed Pentagon efforts
to establish higher out-of-pocket fees and enrollment costs for military
family and retiree health care as an initial step in addressing a harsh
fiscal reality. The cost of military health care has almost tripled
since 2001, from $19 billion to $53 billion in 2012, and stands at 10
percent of the entire defense budget.

Even more daunting, the Congressional Budget Office estimates that
military health care costs could reach $65 billion by 2017 and $95
billion by 2030.

On Wednesday, when President Barack Obama submits his fiscal 2014
budget, the Pentagon blueprint is expected to include several
congressionally unpopular proposals — requests for two rounds of
domestic base closings in 2015 and 2017, a pay raise of only 1 percent
for military personnel and a revival of last year’s plan to increase
health care fees and implement new ones, according to several defense

Defense Secretary Chuck Hagel insisted this past week that the
military has no choice as it faces a $487 billion reduction in projected
spending over the next decade and possibly tens of billions more as tea
partyers and other fiscal conservatives embrace automatic spending cuts
as the best means to reduce the government’s trillion-dollar deficit.

The greatest fiscal threat to the military is not declining budgets,
Hagel warned, but rather “the growing imbalance in where that money is
being spent internally.” In other words, money dedicated to health care
or benefits is money that’s not spent on preparing troops for battle or
pilots for missions.

Hagel echoed his predecessors, Leon Panetta, who said personnel costs
had put the Pentagon on an “unsustainable course,” and former Pentagon
chief Robert Gates, who bluntly said in 2009 that “health care is eating
the department alive.”

In his speech last past week, Hagel quoted retired Adm. Gary
Roughead, the former Navy chief, who offered a devastating assessment of
the future Pentagon.

Without changes, Roughead said, the department could be transformed
from “an agency protecting the nation to an agency administering benefit
programs, capable of buying only limited quantities of irrelevant and
overpriced equipment.”

The military’s health care program, known as TRICARE, provides health
coverage to nearly 10 million active duty personnel, retirees,
reservists and their families. Currently, retirees and their dependents
outnumber active duty members and their families — 5.5 million to 3.3

Powerful veterans groups, retired military officer associations and
other opponents of shifting more costs to beneficiaries argue that
members of the armed forces make extraordinary sacrifices and endure
hardships unique to the services, ones even more pronounced after a
decade-plus of wars in Iraq and Afghanistan.

Members of the military have faced repeated deployments, had to
uproot their families for constant moves and deal with limits on buying a
home or a spouse establishing a career because of their transient life.
Retirement pay and low health care costs are vital to attracting
members of the all-volunteer military.

“If you don’t take care of people, they’re not going to enlist,
they’re not going to re-enlist,” said Joe Davis, a spokesman for the
Veterans of Foreign Wars.

Resistance in Congress to health care changes was evident in the
recently passed spending bill to keep the government running through
Sept. 30. Tucked into the sweeping bill was a single provision stating
emphatically that “none of the funds made available by this act may be
used by the secretary of defense to implement an enrollment fee for the
TRICARE for Life program.”

The program provides no-fee supplemental insurance to retirees 65 and
older who are eligible for Medicare. The Pentagon repeatedly has pushed
for establishment of a fee, only to face congressional opposition.

The provision in the spending bill blocking an enrollment fee had
widespread support among Republicans and Democrats, according to
congressional aides. The Pentagon, nonetheless, is expected to ask again
in the 2014 budget for an enrollment fee.

The department also is likely to seek increases in fees and
deductibles for working-age retirees and try again to peg increases in
them to rising costs as measured by the national health care expenditure
index produced by the Centers for Medicare and Medicaid Services. That
index rose 4.2 percent in 2012 and is projected rise by 3.8 percent this

In recent years, Congress has agreed to tie any future increases to
the typically smaller percentage increase in military retirees’
cost-of-living adjustment, which this year is 1.7 percent.

Either way, a military retiree under age 65 and their family members
pay a far smaller annual enrollment fee than the average federal worker
or civilian — $230 a year for an individual, $460 for a family. There is
no deductible.

Lawmakers’ other response was to establish the Military Compensation
and Retirement Modernization Commission to study the issue of benefits
and offer recommendations on how the Pentagon can address the problem.
The commission was created in this year’s defense authorization bill.

“Nobody wants to touch it because people are confused about who it
impacts,” said Lawrence Korb, a former assistant defense secretary and
now a senior fellow at the liberal-leaning Center for American Progress.
“It’s not going to impact people on active duty. It’s not going to
impact veterans because they’re taken care of by the VA. Basically
(it’s) working-age retirees.”

Korb said he wished Hagel has been more explicit in his warning about the impact of benefit costs.

“He did lay it out that we’re going to have to do something or we’re
going to end up like General Motors and spending everything on people
not working for us anymore.”

Gordon Adams, a professor at American University who was a senior
official at the Office of Management and Budget, said limited savings in
the short term from changes in retirement rules or other benefits
present a challenge in making the case for change.

“The savings are downstream, but you only get downstream if you get
in the boat now,” Adams said. “Otherwise you never get downstream,
you’re just waiting at the dock all the time because you don’t think
it’ll save you money up front.”


How to Claim the Small Business Health Care Tax Credit

Tax Season Savings! Reminder: How to Claim the Small Business Health Care Tax Credit

by Caron_Beesley, Community Moderator | April 8, 2013, 7:41 am
IRS Form 8941

One of the ways in which the Affordable Care Act helps bring down costs for
small employers is through the tax credit available to eligible small
businesses that provide health care insurance to their employees. The
credit significantly offsets the cost of providing insurance and with
the 2012 tax filing deadline fast approaching, you don’t want to let
this valuable tax break pass you by.  Here’s what you need to know about
eligibility and how to claim the credit:

What is the Small Business Health Care Tax Credit?

Currently the maximum tax credit is 35 percent for small business
employers and 25 percent for small tax-exempt employers (e.g., charities
and non-profits). This percentage applies to tax years 2010 through
2013. Even better – in 2014 the credit will increase to 50 percent for
eligible small business employers and to 35 percent for tax-exempt
employers through the new Small Business Health Options Program (SHOP) Marketplaces (also known as Exchanges).

The credit can also be carried back or forward to other tax years.
Also, since the amount of the health insurance premium payments are more
than the total credit, eligible small businesses can still claim a
business expense deduction for the premiums in excess of the credit.
That’s both a credit and a deduction for employee premium payments.

So what does this mean for you? The IRS website offers some examples Download Adobe Reader to read this link content of how the credit works in a variety of circumstances.

Who Qualifies for the Small Business Health Care Tax Credit?

To qualify for the credit, you must meet the following criteria:

  • You must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees
  • You must have fewer than 25 full-time equivalent employees (two half-time workers count as one full-timer
  • Those employees must have average wages of less than $50,000 a year


  • To help determine whether you qualify for the credit, follow this step-by-step guide Download Adobe Reader to read this link content from the IRS.

How to Claim the Credit

First you’ll need to calculate the credit, use IRS Form 8941 Download Adobe Reader to read this link content
to help you with this step. Then include the credit amount as part of
the general business credit on your income tax return. Remember, you may
be able to carry the credit back or forward.  Talk to your tax advisor
for more assistance.

Exchanges, but not as envisioned

Politco Pro | Jason Millman | April 8, 2013

Even though the Obama administration is delaying a key component of
federally run small-business exchanges, some states building their own
exchanges say they’re on track to have the program running next year.
The feds last month said the 33 exchanges it will run
next year won’t allow employees whose companies use the exchanges to
choose their own health plans until 2015. Instead, they’ll have to
accept whatever plan their employer selects for them.
The new Small Business Health Option Program exchanges, known as SHOP
exchanges, are hoping to draw in firms by offering greater health plan
choices for employers and their workers, and the so-called employee
choice model was seen as a major incentive for businesses to seek
coverage on the SHOP exchanges.
But more than half the country won’t have that option right away.
The Obama administration said states running their own exchanges in
2014 can still offer employee choice though, and at least a few states
aggressively implementing Obamacare — such as Minnesota and Oregon — say
they’re moving ahead with those plans right away. They say it’s an
essential draw to the SHOP exchange, though they acknowledge it won’t be
easy to pull off.
Employee choice generally works like this: Workers whose employers
decide to purchase coverage through the SHOP exchange get a defined
contribution from the firm, and they then put the money toward an
exchange health plan of their choosing. Without employee choice, the
employer chooses the health plan for its workers, much like how the
employer-sponsored insurance system works now.
Rocky King, executive director of Oregon’s exchange, said employee
choice was key for generating bipartisan support for a state-run
exchange two years ago.
“It became really clear to us in order to get the bipartisan support
we needed that we need to put forth something more than what was just
out there today for small employers,” King said.
But King also knew it wouldn’t be easy from an operational
standpoint, so he said the exchange staff got to work right away on the
technical infrastructure necessary to support employee choice. Under the
program, the exchange takes the employer contribution directly and then
sends it to the carrier the employee selected.
“We knew that was the most challenging and most difficult to implement,” King said.
The Obama administration announced a month ago
that it would delay the employee choice option in federal-run
exchanges, but recent news reports about the decision have sent
state-based exchanges into damage control.
April Todd-Malmlov, executive director of the Minnesota exchange,
said her office was bombarded with questions after reports of the
federal delay grew.
“They really want this and wanted to make sure we were really doing
it,” said Todd-Malmlov, adding that the Minnesota exchange, known as
MNsure, has emphasized building the SHOP exchange.
“Having employee choice and doing defined contribution has been
something that Minnesota employers have wanted to do for a long time,”
she said.
Colorado is another state last week that reiterated plans to install employee choice right away, despite the federal delay.
“Colorado is on track to help small employers provide a range of
health plan options to employees through our new online health insurance
marketplace that will open in October,”Patty Fontneau, executive
director of the Colorado exchange, said in a statement on Thursday.

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck