Fix Health Care Policy

Side Effects: If You Like Your HSA, Get Ready to Lose It

Everyone remembers President Obama’s repeated promise, “If you like your health care plan, you’ll be able to keep your health care plan, period.” Unfortunately, Obamacare breaks this promise many times over. One way is through its medical loss ratio (MLR) requirement and the impact it will have on consumer-driven, high-deductible health plans (HDHP) that include health savings accounts (HSA) in individual and small group markets, a new report from Milliman shows.

The MLR requires that insurance companies spend 80 percent of revenue from premiums on medical claims or anything that improves the quality of health care. The additional 20 percent is for administrative and other non-medically related expenses. If the minimum of 80 percent is not met, the insurer must issue a rebate to the consumer.   (Read the rest on The Foundry…)

Tags: broken promises, health savings accounts, HSAs, Milliman, ObamaCare

More Americans Using HSAs—Under Threat from Obamacare

Spending in the U.S. health care system is growing too fast to ignore. Yet, the Patient Protection and Affordable Health Care Act (PPACA), also known as Obamacare, does nothing to “bend the cost curve.” Containing health spending requires engaging consumers in their health care expenditures, and one way to achieve this is through high-deductible health plans paired with Health Savings Accounts (HSA), which a recent report shows are gaining in popularity.  (Read the rest on The Foundry…)

Tags: bend the cost curve, health savings accounts, high-deductible health plans, HSAs, ObamaCare

Side Effects: Obamacare Creates More Unnecessary Work for Already Swamped Doctors

One provision of Obamacare has already spawned a nightmare for doctors, pharmacists, and patients. As of January 1, Americans with health savings accounts (HSAs), flexible savings accounts (FSAs), and health reimbursement accounts (HRAs) can no longer purchase over-the-counter (OTC) drugs using these tax-exempt accounts. After only a couple of months, health care providers are already experiencing the negative consequences of the change.

This provision was included to raise tax revenue to help pay for massive new spending under Obamacare. From its conception, its major flaw is that it creates additional expenses for patients who depend on OTC drugs to manage chronic illness. To smooth out this wrinkle, the new law allowed for the continued use of the savings accounts for OTC drugs with a prescription. (Read the rest at The Foundry…)

Tags: Flexible Spending Accounts, health reimbursement accounts, health savings accounts, ObamaCare, over-the-counter drugs, prescriptions, Side Effects

Side Effects: Ball Drop Brings Bad News for Consumer-Driven Health Plan Users

This year, as the clock strikes twelve on New Year’s Eve, Americans who depend on health savings accounts (HSAs) to make medical expenditures more affordable will experience first-hand yet another adverse side effect of Obamacare. Starting in 2011, American families will no longer be able to use HSAs to purchase over-the-counter drugs, such as cough and allergy medicines.

Americans using HSAs will not be the only ones affected. The provisions of the new law will also change rules regarding the use of flexible spending accounts (FSAs) and health reimbursement accounts (HRAs).

One of the benefits of these savings accounts is that they allow users to put some of their earnings into a separate, tax-free account. This money can then be used for out-of-pocket medical costs such as medical deductibles, eyeglasses, and prescriptions. Since users can make medical purchases using pre-tax dollars, these accounts help cut out-of-pocket costs by about 20 percent, on average. (Read more at The Foundry…)

Tags: Flexible Spending Accounts, health savings accounts, prescription, repeal Obamacare, Side Effects

Exclusive Video: Gov. Mitch Daniels on Obamacare’s Devastating Consequences

Editor’s Note: On the right, please watch our exclusive interview with Indiana Governor Mitch Daniels, and then below, please read an original guest blog to The Foundry from the Governor himself.

We’ve been through a global recession. Now we’re fighting through a stalled recovery. Revenues are the lowest they’ve been in half a century. Their finances a wreck, many states have effectively sunk into bankruptcy.

Indiana is still afloat. In fact, we’ve fared better than most. We continue to meet our obligations without raising taxes, and the reserves we carefully built and protected will get us through the downturn.

But as if we did not already have enough on our plates, the passage and implementation of Obamacare presents us with a whole new set of challenges and a costly to-do list.

(more…)

Tags: consumer-driven health care, Gov. Mitch Daniels, health savings accounts, Healthy Indiana Plan, Medicaid, ObamaCare

JCT Says Obama Health Plan is a $414 Billion Tax Hike

President Obama keeps rolling out the tax hikes. In his budget released earlier this month, excluding the tax hikes he assumed to pay for health care, he called for $1.3 trillion in higher taxes over the next decade. Now in his recently released health reform plan, he calls for even more tax increases. Today, the Joint Committee on Taxation (JCT) released their analysis of the tax increases in the President’s plan. According to the JCT, the plan will raise taxes by another $414 billion between 2010 and 2019. The taxes the President Obama proposed hiking are as follows (the year the tax kicks in and the amount the tax will raise between 2010 and 2019 are in parentheses):

– Require information reporting on payments to corporations (2011 – $17.1 billion)

– Exclusion of unprocessed fuels from the cellulosic biofuel produce credit (immediately upon passage – $23.9 billion)

– Codify economic substance doctrine and impose penalties for underpayments (immediately upon passage – $4.9 billion)

– Increase Hospital Insurance portion of the payroll tax and apply it to investment income for families earning more than $250,000 a year ($200,000 for single filers) (2012 – $183.6)

– Excise tax on “Cadillac” insurance plans valued at more than $10,200 for individuals and $27,500 for families (2018 – $32.7 billion)*

– Impose annual fee on manufacturers and importers of branded drugs (2011 – $33.4 billion)*

– Impose excise tax on manufacturers and importers of medical devices (2012 – $20 billion)*

– Impose annual fee on health insurance companies (2014 – $59.5 billion)*

– Excise tax on indoor tanning services (2010 – $2.7 billion)*

– Limit Health Savings Accounts (HSA) (2011 – $5.0 billion)*

– Increase taxes on unqualified distributions from HSAs (2011 – $1.4 billion)*

– Limit Flexible Spending Accounts (FSA) (2014 – $11.4 billion)*

– Eliminate deduction of expenses allocable to Medicare Part D subsidy (2012 – $2.6 billion)*

– Limit deductions for medical expenses (2013 – $15.2 billion)*

– Higher taxes on compensation above $500,000 paid to officers, employees, directors and service providers of covered health insurance providers (2013 – $0.6 billion)

– Higher taxes on certain health organizations (2010 – $0.4 billion)*

(more…)

Tags: Cadillac tax, health savings accounts, higher taxes, Hospital Insurance, Joint Committee on Taxation, ObamaCare, President's proposal

Cash-Only Docs: A Promising Advancement in Consumer-Driven Health Care

Dr. James Eelkema, a Burnsville, MN family practice physician was fed up with the costly paperwork insurance companies required and the second guessing of his medical decisions by company bureaucrats. So when he learned that up to a third of his pay was to become contingent on “measures such as whether his patients got pap smears or whether he got them to stop smoking,” Dr. Eelkema decided enough was enough and converted to a cash-only practice.

Dr. Eelkema’s decision represents a growing trend of medicine returning to its fundamental role as a market-oriented, patient-driven profession. Cash-only practices have a number of advantages over traditional practices. First, they allow the doctor to save time and personnel on insurance paperwork and redirect resources to patient care, simultaneously passing savings on to the consumer. Second, they encourage a closer doctor-patient relationship, free of interference from third parties such as insurance companies or government programs. Most importantly, cash-only practices curtail expenditures by linking health care decisions and cost directly to consumers; after all, when the insurance company is paying for your checkup, who bothers to ask how much it costs?

The experience of Dr. Vern Cherewatenko demonstrates the merits of cash-only practices for physicians, patients, and the health care system at large: (more…)

Tags: cash-only practice, consumer-driven health care, health savings accounts, patient-centered care

Survey Cites Growing HSA Adoption

Healthcare Finance News reports on a new survey that shows a growing adoption of health savings accounts (HSAs) in health coverage. From January 2008 through January 2009, Celent’s latest HSA survey found a 46.1 percent increase among participants using the accounts. In the same period, respondents said their asset base grew 62.6 percent.

The article cites Celent executives projecting that HSAs “should survive current efforts by Congress and the Obama administration to reform health care because they represent one of the fastest-growing retail banking products.”

Tags: health savings accounts, HSA, Obama administration