Consumer Power Report #479
Open enrollment in the Obamacare-created federal health insurance exchange is scheduled to begin on November 1, and many consumers returning to the exchange or signing up for the first time are in for a rude awakening: Health insurance premiums are expected to rise for millions of Americans.
According to a report by The Wall Street Journal, federal officials said on October 26 the average price of “silver plan” health insurance offerings, a middle-tier insurance option in the exchange that’s used as a “key metric for premiums around the country,” is expected to increase by 7.5 percent across the 36 states that rely on the federal exchange.
The Journal also reports the majority of enrollees in the exchange will have to endure higher prices: “And 60% of enrollees – across 30 of the largest markets in the U.S. – will see the average rate for that benchmark plan rise by 6.3%, according to a Health and Human Services report on premium data that hasn’t yet been made fully public.”
In addition to higher health insurance costs, hundreds of thousands of Americans could lose their health insurance subsidies in 2016, which will likely lead to gigantic – possibly even insurmountable – added costs.
Under federal law, any individual who fails to file a tax return for the previous tax year will risk losing 100 percent of federal subsidies received to help offset health insurance costs. According to The New York Times, “In July, the Internal Revenue Service said 710,000 people who had received subsidies under the Affordable Care Act had not filed tax returns and had not requested more time to do so.”
If those who have not filed returns do not return to the health insurance exchange, they will likely be automatically signed up for the plan they currently have, except this time without any subsidies. That means more than half-a-million people could be in for quite a shock when they receive their first health insurance bill in 2016.
While it’s certainly reasonable to expect those who receive government assistance to file a tax return to ensure they are actually eligible for the government benefits they are receiving, many of the people who have failed to follow the federal guidelines do so because they are confused, not because they are trying to game the system at taxpayers’ expense.
According to the Times, “Two-thirds of people using the federal exchange have incomes less than twice the poverty level (less than $23,540 a year for an individual),” which means “[m]any of the people potentially affected have incomes so low that they would not otherwise have to file tax returns.”
Some of these people may not have filed a tax return in many years, and without a clear directive from the federal government, it’s easy to imagine why they wouldn’t think twice about failing to file again.
In addition to the 710,000 people at risk of losing subsidies for not filing tax returns, the Internal Revenue Service (IRS) reports another 760,000 who received subsidies did file returns but failed to fill out all of the necessary forms, specifically IRS Form 8962, a form many say is confusing to navigate. These Americans are also at risk of losing important subsidies in 2016.
Tens of thousands of other Americans who filed all of their 2014 IRS paperwork correctly and on time may nevertheless receive an unexpected bill in 2016 if they made more money than they thought they would when they first applied for subsidies in 2014. This is because Obamacare exchanges expect individuals to inform officials when significant changes to income occur so that subsidies can be reduced, a mandate many people are unaware of. Failure to report changes in income means these families will be expected to repay the government for the excess subsidies they received in 2016.
Now that roughly eight in 10 customers in the exchanges”> rely on taxpayer subsidies to help offset rising premiums, the number of people now and in the future who will find themselves, for one reason or another, losing their subsidies or receiving a big bill on Tax Day will likely rise – proof that the “affordable and easy to use” Obamacare exchange isn’t so affordable or easy to use after all.
With so much confusion, the IRS has a duty to simplify its absurd tax forms, and it needs to do a better job of explaining the complicated rules and stipulations attached to Obamacare subsidies. Failing to reform these flawed practices will only lead to more confusion in the future, a scenario that will put hundreds of thousands of families in precarious and unnecessary financial trouble.
— Justin Haskins
IN THIS ISSUE:
The Obama administration said many consumers will see noticeable premium increases when buying health coverage on insurance exchanges in 2016, acknowledging for the first time what many health-care experts had predicted.
Federal officials said Monday that the price of the second-lowest-cost midrange “silver plan” – a key metric for premiums around the country – will increase by 7.5% on average across the three-dozen states that rely on Washington to administer the health law for them.
And 60% of enrollees – across 30 of the largest markets in the U.S. – will see the average rate for that benchmark plan rise by 6.3%, according to a Health and Human Services report on premium data that hasn’t yet been made fully public.
The higher premiums are likely to intensify Republicans’ claims that the health law isn’t holding down costs. The Obama administration is urging customers to go back online during open enrollment, which begins Nov. 1, and shop around to see if they can limit the impact of the cost increases.
A new report says that if rising health care costs aren’t contained in Michigan, employers will struggle to create jobs and increase wages, said the Economic Alliance for Michigan.
In Southeast Michigan, health care spending rose 59 percent between 2007 and 2013 while wages grew only 0.4 percent, according to the U.S. Bureau of Labor Statistics.
In contrast, spending on entertainment grew just 13 percent, spending on household furnishings grew 4 percent and spending on apparel and services declined 15 percent, the Economic Alliance report said.
“The findings suggest that unless health care costs are contained, Michigan employers will struggle to create jobs and increase wages, leaving Michigan’s working middle-class families struggling for years to come,” said Bret Jackson, the alliance’s president.
SOURCE: By Jay Greene, Crain’s Business
Eleven years after a man’s unexplained death in a Katy hospital sparked a lawsuit involving allegations of malpractice, deception and theft of a human heart, the bizarre case has made its way to the Texas Supreme Court, which will answer a simple yet macabre legal question: Does an autopsy fall under the definition of health care?
If the high court says yes, critics say it would be the latest decision by conservative justices broadening a landmark state law that makes it tougher to sue doctors and hospitals for alleged wrongdoing. Supporters of the legal challenge – brought on an appeal by Christus Health, then owner of the Christus St. Catherine Hospital in Katy – say Texas voters approved sweeping tort reforms in 2003 to limit lawsuits against health care providers, and that autopsies on dead patients are a valid part of the medical care hospitals provide.
… As recently as May, Carson was singing the praises of his plan in an interview with John Harwood of CNBC. Asked whether he thought that his proposal was politically feasible given the popularity of Medicare health coverage for seniors, Carson replied: “When people are able to see how much more freedom they will have, and how much more flexibility they will have, and how much more choice they would have, I think it’s going to be a no-brainer.”
“The reason that I’ve come up with the health savings account system, utilizing the same monies that we use to pay for health now, [it] provides a very different paradigm,” Carson added.
But when Chris Wallace of “Fox News Sunday” asked Carson over the weekend to defend his plan for supplanting Medicare, Carson responded as if Wallace hadn’t received the memo: “No, that’s completely false. And that’s a narrative that somebody’s putting out there to scare people.”
When Wallace pressed him on his previous statements that sounded suspiciously like a plan to replace Medicare with personalized health savings accounts financed with federal contributions, Carson replied: “No, that – that’s the old plan. That’s been gone for several months now.”
Carson told Wallace that the savings accounts would be an “alternative” to the popular Medicare program.
SOURCE: By Eric Pianin, The Fiscal Times
Working on a shoestring compared to past years, 10 community groups will help Illinois consumers sign up for insurance during the third annual enrollment period under President Barack Obama’s health care law.
The Illinois Department of Insurance announced Friday that $5 million in federal funding would go to groups mostly located in Chicago and its suburbs. None of the groups serving southern Illinois last year – the Illinois Migrant Council, the Illinois Public Health Association or the Southern Illinois Healthcare Foundation – received funding.
Far fewer positions will be funded than last year because grants under the Affordable Care Act are running out and there is no new money for states.
About 150 enrollment counselor positions will be funded under an extension that allows Illinois to use unspent money. Last year, about 400 similar positions were paid for with federal grants of $28.7 million.
With money scaled back, “the focus is targeted at the highest-density areas of subsidy-eligible individuals in Illinois,” said Illinois Department of Public Health spokeswoman Melaney Arnold. “The goal, with limited funds, is to achieve the greatest enrollment in this last year of funding.”
SOURCE: By Associated Press