Category Archives: Health Care Reform

CMS Releases Final 2014 MA Payment Rates

In a highly anticipated announcement, CMS revealed yesterday that they
were not moving forward with a proposed 2.3% cut in Medicare Advantage
reimbursement rates for the 2014 plan year. In addition to reversing
position on this highly controversial rate cut, CMS further announced
that they will actually be increasing the payment rate by 3.3% for the
coming year.

This reversal is great news to both consumers and insurance agents involved
with Medicare Advantage. Many health insurers had estimated that a cut
of that magnitude – coupled with other anticipated changes to the
Medicare Advantage program for 2014 – could have resulted in some
combination of massive premium increases, benefit reductions, or plan

As a result of yesterday’s news, it appears that the overall stability of
the Medicare Advantage market in 2014 will be greater than anticipated
following the CMS Advance Notice and Draft Call Letter issued in

One of the key items that may have led to this decision may have been the
way that Congress has handled the “Doc Fix” each year. Many news outlets
reported last week that there were ongoing discussions trying to
resolve how Medicare Advantage rates were being cut, while Congress was
perpetually refusing to cut the rates paid to doctors through Original

NYC to mandate 5 days of paid sick time

New York Times March 28, 2013

New York City is poised to mandate that thousands of companies provide paid time off for sick employees, bolstering a national movement that has been resisted by wary business leaders.

A legislative compromise reached on Thursday night represents a raw display of political muscle by a coalition of labor unions and liberal activists who overcame fierce objections from New York’s business-minded mayor, Michael R. Bloomberg, and his allies in the corporate world.

The deal required a high-profile concession from a leading candidate to succeed Mr. Bloomberg, Christine C. Quinn, the City Council speaker, who had single-handedly blocked action on the sick-leave issue for three years, arguing that it would inflict damage on the city’s fragile economy.

The legislation would eventually force companies with at least 15 employees to give full-time workers five compensated days off a year when they are ill, a requirement that advocates said would allow much of the city’s labor force to stay home from work without fear of losing a day’s wage — or worse, a job. The advocates said the legislation would provide paid sick leave for one million New Yorkers who do not currently have such benefits.

But to the disappointment of those who pushed for a more sweeping version of the legislation, New York City’s mandate would not take effect until spring 2014, and for the first 18 months, it would apply only to businesses with 20 or more employees, according to people involved in the negotiations.

The measure is subject to a vote by the City Council. Mr. Bloomberg is expected to veto the measure, but there is enough support on the Council to override his veto.

New York’s measure would be less stringent than similar requirements in Portland, Ore., San Francisco, Seattle and Washington, which cover either all companies or those with five or more workers.

In a provision designed to placate the city’s corporate leaders, the sick-leave requirement would not be implemented next year should the city’s economy significantly erode, as measured by a financial index kept by the Federal Reserve Bank of New York.

Still, advocates argued that its passage would represent a significant symbolic victory because of New York’s vast size and its role at times as a bellwether for public policy around the country.

“It’s not perfect,” said Sherry Leiwant, co-president of A Better Balance, an advocacy group involved in the negotiations. “But it’s very important to get this done in New York.”

New York’s relative slowness to tackle the issue of mandatory sick-leave benefits has become a source of embarrassment for the city’s liberal leaders, who directed their frustration at Ms. Quinn, a Democrat and longtime ally of Mr. Bloomberg who has aggressively courted the business community in her run for mayor.

Until a few weeks ago, Ms. Quinn had firmly resisted calls for mandated paid sick-leave legislation, using her power as speaker to block fellow lawmakers from voting on a bill proposed by Councilwoman Gale A. Brewer, of the Upper West Side, despite the bill’s widespread support.

But Ms. Quinn and her aides became unsettled by the steady drumbeat of news conferences calling on her to permit a vote, and emotional appeals from unions, elected officials, and activists including the feminist Gloria Steinem.

The outcry, which coincided with the official declaration of Ms. Quinn’s mayoral campaign, quickly took center stage in the mayor’s race, spilling out into contentious candidate forums and turning into an emblem of Ms. Quinn’s complicated relationship with left-leaning Democrats.

In one particularly potent tactic, advocates persuaded the usually timid members of the Council to try to circumvent Ms. Quinn and force a vote on a version of the bill that was unacceptable to her, a maneuver never tried during her tenure as speaker.

Soon after it became clear that she might face a revolt in the City Council, Ms. Quinn sought to end the controversy — and cast off a political liability — by jump-starting negotiations, working with a local building service workers’ union with whom she has a close relationship.

The two sides started far apart: Ms. Quinn proposed a rule that would apply to companies with 50 or more workers; advocates wanted a threshold of five.

Under the deal, companies exempt from the requirement because of their low number of employees would have to offer workers five days of unpaid sick leave annually.

Whether the sick leave is paid or unpaid, companies will be legally forbidden from firing workers for taking such time off.

Ms. Quinn, who insisted on the strong exemptions for smaller companies, said the compromise bill struck a balance between the needs of workers and their employers.

“We have a good, strong and sensible piece of legislation that recognizes the needs of everyday New Yorkers and the realities that our struggling small businesses face,” Ms. Quinn said in a statement.

As the marathon talks drew to a close on Thursday night, advocates said that, compromises aside, they believed New York had given new momentum to a broader social cause.

“This is a sweet victory,” said Bill Lipton, state director of the Working Families Party, which has overseen the advocates’ day-to-day effort to win passage of the measure. “It provides economic security for New Yorkers, and a shot in the arm for the paid sick days movement across the country.”

Health Insurers Warn on Premiums


Health insurers are privately warning brokers that
premiums for many individuals and small businesses could increase
sharply next year because of the health-care overhaul law, with the
nation’s biggest firm projecting that rates could more than double for
some consumers buying their own plans.
The projections, made in sessions with brokers and agents, provide
some of the most concrete evidence yet of how much insurance companies
might increase prices when major provisions of the law kick in next
year—a subject of rigorous debate.

The projected increases are at odds with what
the Obama Administration says consumers should be expecting overall in
terms of cost. The Department of Health and Human Services says that the
law will “make health-care coverage more affordable and accessible,”
pointing to a 2009 analysis by the Congressional Budget Office that says
average individual premiums, on an apples-to-apples basis, would be

The gulf between the pricing talk from some insurers and the
government projections suggests how complicated the law’s effects will
be. Carriers will be filing proposed prices with regulators over the
next few months.
Part of the murkiness stems from the role of government subsidies.
Federal subsidies under the health law will help lower-income consumers
defray costs, but they are generally not included in insurers’ premium
projections. Many consumers will be getting more generous plans because
of new requirements in the law. The effects of the law will vary widely,
and insurers and other analysts agree that some consumers and small
businesses will likely see premiums go down.
Starting next year, the law will block insurers from refusing to sell
coverage or setting premiums based on people’s health histories, and
will reduce their ability to set rates based on age. That can raise
coverage prices for younger, healthier consumers, while reining them in
for older, sicker ones. The rules can also affect small businesses,
which sometimes pay premiums tied to employees’ health status and claims

The law’s 2014 effect on larger
companies is likely to be more limited. Many of the big changes coming
next year won’t touch them as directly as individual consumers and small
businesses, though some will have to grapple with the cost of covering
more workers or paying a penalty.
The possibility of higher premiums has become the latest focal point
of the political tussle over the health law, which marks its third
anniversary Saturday. Republican lawmakers have held hearings on the
issue, and six GOP members of the House Energy and Commerce committee
wrote last week to more than a dozen insurers asking them to turn over
internal analyses on the law’s impact on premiums and costs.
The insurance industry has also been talking publicly about big potential premium increases in lobbying for tweaks to the law.
The individual market includes about 15 million people, and around
18% of the roughly 149 million with employer coverage were at small
companies, according to 2011 figures from the Kaiser Family Foundation.
The individual market is expected to grow to around 35 million people by
2016 as a result of the law.
In a private presentation to brokers late last month, UnitedHealth Group Inc.,
UNH -1.09% the nation’s largest carrier, said premiums for some consumers buying
their own plans could go up as much as 116%, and small-business rates as
much as 25% to 50%. The company said the estimates were driven in part
by growing medical costs not directly tied to the law. It also cited the
law’s requirements that health status not affect rates and that plans
include certain minimum benefits and limits to out-of-pocket charges,
among other things.

Jeff Alter, who leads UnitedHealth’s employer
and individual insurance business, said the numbers represented a
“high-end scenario,” not an average. “There are some scenarios in which a
member could see as much as a 116% increase or over,” he said, though
others, such as some older consumers, could see decreases. He said the
company dwelled on the possible increases because it was trying to
prepare brokers to speak with clients facing big jumps.
Other carriers have also projected steep rate increases during
private meetings and conversations with brokers. Brokers say they are
being told to prepare the marketplace for small-business and individual
rate increases as carriers get ready to file specific rate proposals and
plan designs with regulators.
Insurers are “not being shy that premiums are going to increase in
2014,” and are urging brokers to “brace our clients,” said John Lacy,
vice president of group benefits at Bouchard Insurance, a brokerage in
Clearwater, Fla. His firm has been hearing from carrier representatives
that individual premiums in Florida could go up 35% to 50%, on average,
and small-business rates around 30%, though it hopes to find strategies
to blunt the impact.
Aetna Inc.,  AET -0.66% in a presentation last fall to its national broker advisory council,
suggested rates on individual plans not being grandfathered under the
law could go up 55%, on average, and gave a figure of 29% for small
business rates. Both numbers included 10 percentage points tied to
medical-cost inflation, not the law. An Aetna spokesman said the numbers
are “still generally in line with what we’ve been estimating,” and
represented the average impact in a typical state.

An official with Blue Cross & Blue Shield of North Carolina told a gathering of
brokers last week that individual premiums could go up by as much as 40%
to 50%, according to brokers who were present. A spokeswoman for the
insurer said “we don’t have final numbers” yet on premiums.
There has long been debate, even among insurance experts, over how
the law will affect premiums. Because the effect is likely to vary,
different measurements can arrive at different conclusions. The CBO
analysis cited by the administration determined that average premiums
for consumers who buy their own coverage would be 14% to 20% lower
because of the law—if the law didn’t change the types of plans they
But the CBO also suggested the law would lead to consumers buying
more expensive plans, largely because it requires coverage to include
certain benefits and limit charges such as deductibles. When this effect
was taken into account, the average premiums would go up 10% to 13%,
the agency said, though subsidies would ease the bite for most people.
The agency also said small-business policies were likely to cost within a
few percentage points of the amount they would have without the law.
Health and Human Services officials say competition among insurers,
as well as provisions to limit their financial risk from attracting
high-cost consumers, will exert downward pressure on premiums, and point
to the tax subsidies that will limit many consumers’ costs.
Subsidies will be available on a sliding scale for people with
incomes of up to four times the federal poverty level—currently $45,960
for a single person and $94,200 a year for a family of four. More than
half of the 35 million people expected to be in the individual market by
2016 are likely to qualify for credits. People whose incomes are around
the poverty level could see almost all of the cost of their insurance
subsidized, while people at the upper end will get only a small discount
toward their premiums.

Proposed Rules on the maximum 90 day waiting period

Beginning on your renewal in 2014, your employees may not wait longer than 90 days for insurance.  The proposed rules are below, and there are some surprises… – Reeve

Under a health care reform rule that takes effect in 2014, group health plans
and insurers are prohibited from applying waiting periods that exceed
90 days. The proposed regulations, which build on DOL Technical Release 2012-01 and Technical Release 2012-02,
define a waiting period as the period of time that must pass before
coverage for an employee or dependent who is otherwise eligible under
the plan terms can become effective (see Legal Update, Guidance Addresses 90-day Waiting Period, Full-time Employees for Employer Mandate: 90-day Waiting Period).

The proposed regulations implement this 90-day waiting period limit, which generally applies:

Under the proposed regulations, eligibility conditions based solely on the
lapse of time cannot be more than 90 days. However, other eligibility
conditions under governing plan terms are generally allowed unless
designed to avoid compliance with the 90-day waiting period limit. For
example, according to the Departments, plan provisions are substantive
eligibility conditions that do not trigger the 90-day waiting period
limit if they base eligibility on whether an employee is:

  • Meeting certain sales goals.
  • Earning a specified level of commission.

The proposed regulations also address how waiting periods apply to
variable-hour employees when a specified number of hours of service per
period is a plan eligibility condition. In this situation, if it cannot
be determined that a newly-hired employee is reasonably expected to work
the specified number of hours, the plan can take a reasonable period of
time to determine whether the employee satisfies the plan’s eligibility
condition. This may include a measurement period of not more than 12
months beginning on any date between:

  • The employee’s start date.
  • The first day of the first calendar month following the employee’s start date.

Also, the proposed regulations clarify that:

  • Insurers can rely on eligibility information reported to them by employers or
    other plan sponsors, and will not be considered to violate the waiting
    period limit if the insurer:

    • requires the plan sponsor to
      make a representation about the terms of any eligibility conditions or
      waiting periods imposed by the plan sponsor before an individual is
      eligible for coverage under the plan terms;
    • requires the plan sponsor to update its representation to reflect any changes; and
    • has no specific knowledge of imposition of a waiting period that exceeds 90-days.
  • Plan provisions may permit employees to make a self payment, or buy-in,
    allowing the employees to satisfy any otherwise permissible
    hours-of-service requirements.
  • Being “otherwise eligible” to enroll in a plan means having met the plan’s substantive eligibility
    conditions (for example, being in an eligible job classification or
    achieving job-related licensure requirements specified in a plan’s
  • The waiting period cannot extend beyond 90 days,
    and all calendar days are counted beginning on an employee’s enrollment
    date, including weekends and holidays. If the 91st day is a weekend or
    holiday, a plan or insurer can allow coverage to be effective earlier
    than the 91st day, for administrative convenience. However, the
    effective date of the coverage cannot be later than the 91st day.

The proposed regulations permit an extended coverage effective date for
group health plans that condition eligibility on an employee’s regularly
working a specified number of hours (or working full-time) where it
cannot be determined if a newly hired employee is reasonably expected to
work the required number of hours each period (or work full-time).
Under the proposed regulations, the 90-day waiting period must begin
when the new employee satisfies the plan’s hours-of-service requirement,
which can only be applied once to each individual employee.

Washington could wind up running more health exchanges -official

So, in the end, the government will be involved in all 50 states.  This is my surprised face  ;0 – Reeve


Obama administration will intervene in states where progress falters

* Health official says latecomers face the biggest

* Exchanges scheduled to be up and running on Jan. 1, 2014

WASHINGTON, March 14 (Reuters) – The U.S. government could
have to run more state health insurance exchanges than expected
under President Barack Obama’s healthcare law, if U.S. states
pursuing their own marketplaces cannot complete them on time, a
senior official said on Thursday.

The Obama administration has given 17 of the 50 states
conditional approval to set up online exchanges where working
families would purchase private plans at subsidized rates. The
remaining 33 states will all have federally run markets, at
least in the early years of the coming reform era.

But Gary Cohen, who spearheads exchange implementation for
the U.S. Department of Health and Human Services, said some of
the approved states face hurdles that could require Washington
to step in with federal exchanges before open enrollment starts
on Oct. 1.

“I’m absolutely confident that every state will have an
exchange that will be functioning and ready,” said Cohen, who
declined to elaborate on the number or identity of states that
could be in for difficulties.

“The type of exchange may be different,” he told reporters.
“(But) there will be an exchange of one kind or another in every

Obama’s Patient Protection and Affordable Care Act requires
Washington to provide an exchange in any state that cannot or
will not set up their own.

The exchange initiative is expected to insure 26 million
Americans, many of whom currently have no coverage, according to
the nonpartisan Congressional Budget Office. A planned expansion
of the Medicaid program for the poor is likely to cover another
12 million people.

Both the exchanges and the Medicaid expansion are due to
begin providing coverage on Jan. 1, 2014.

Republicans and other healthcare reform critics have warned
of potential problems for states, saying the administration has
been slow to release rules governing implementation.

Many states also held off on implementation in 2012 until
after the law survived a U.S. Supreme Court ruling in June and
last November’s Republican presidential election challenge to
Obama’s re-election.

Cohen said the main hurdles for states are development of
information technology systems for applicant enrollment
eligibility and continued legal and political challenges from
reform opponents.

“The biggest challenges are for states that started later.
Obviously, they have less time,” he said.

New Mexico and Idaho, two of the few Republican-led states
to move toward establishing their own marketplace, are still
awaiting final approval from their respective legislatures.

But even in Connecticut, one of the first states to embrace
the healthcare exchange model, media reports have described
implementation problems linked to vague or changing federal

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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