Tag Archives: HHS

A Retrospective on Healthcare, and Where Do We Go from Here?


800px-Capitol_Building_Full_ViewRegular readers of this blog know that I am not a fan of Obamacare. It is overly prescriptive, too costly, and has been poorly implemented. Readers also know that I have said from the beginning that it needed corrections.

I have never been hung up on whether Congress called it repeal or replacement, as long as our healthcare system was fixed . . . or at least improved.

In November 2013, I recommended the following reforms:

  • Put all forms of health insurance (employer-based and other) on an equal footing
  • Permit a wide variety of insurance plans, from catastrophic plans to high-deductible plans to those with varying levels of coverage and exclusions
  • Provide direct subsidies to the poor and seriously ill so they can purchase healthcare coverage on the open market
  • Repeal the individual and employer mandates

I said,

“In short, the type of healthcare insurance to buy should become a decision that individuals make, not the government. Insurers should be free to design policies that consumers want, and to price them at levels that are profitable. We should abandon the notion that the federal government knows what one-size-fits-all insurance programs are ‘best’ for Americans.”

The Republican bill that Congress could not pass, the American Health Care Act (AHCA), was far from perfect in addressing my concerns, but it addressed some of them. I thought it was better than the Obamacare statute as it exists now. Frankly, the fact that no one liked it made me think the AHCA was as good as we were going to get.

But it went nowhere. Apparently, the split between the ultra-conservative and the establishment branches of the Republican Party is wider than 218 votes, and no bill could bridge the gap.

As the Wall Street Journal stated on March 24, 2017, in The ObamaCare Republicans:

“[The AHCA] worked off the reality that the U.S. health system has changed under ObamaCare and thus an orderly transition is necessary to get to a free-market system without throwing millions off insurance. The GOP also is a center-right coalition with competing views and priorities. The bill had flaws but was the largest entitlement reform and spending reduction in recent decades.”

So, given that Obamacare needs reform, where do we go from here?

I don’t know.

HHS sealHHS Secretary Tom Price can work on regulatory reforms, but only within the confines of the Obamacare language. Some of the most pressing issues are part of the statute and cannot be changed (though the Obama administration delayed some of them, or gave exceptions, and perhaps the Trump administration will do the same). Some of these issues include:

  • The tax on medical devices
  • The details of the mandated benefits (“essential health benefits”)
  • The Cadillac tax on employer healthcare plans, which, if implemented, will suck in more and more employers over time as the cost of mandated benefits rises

The fundamental problem with healthcare in the U.S. is that most Americans have not paid the full cost of their care since the 1930s, when employers began offering medical insurance as a benefit. As with all consumer goods and services, Americans want high quality, high quantity, and low prices on healthcare. Any economist can tell you that you can’t have all three—two of the three is the best you can hope for. The ideal system is often a compromise on all three. When healthcare prices are artificially lowered for the consumer, they make irrational decisions on quantity and quality—overusing the system and expecting Cadillac care for Fiat prices.

In my opinion, our healthcare system will not be fixed until employer-based plans are no longer the preferred way of covering the cost. Don’t get me wrong, many employers do an excellent job of managing their healthcare benefit plans. But the distortion in the market caused by these plans is increasing and is only made worse by Obamacare.

The different tax treatment of employer-based premiums and premiums for individual plans is unfair. The proposed AHCA would have helped in that regard, though it wouldn’t have fixed the problem entirely.

As the Wall Street Journal editorial said:

“An ideal free health-care market is never going to happen in one sweeping bill. The American political system is designed to make change slow and difficult, thank goodness. Republicans have to build their vision piece by piece, carefully gauging how to sustain their policy gains politically—the same way Democrats expanded the welfare and entitlement state over the last century.”

I suppose that’s where we go from here.

What do you think?

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Increasing Problems for the Affordable Care Act—In the Courts and In the Boardrooms


In recent weeks, the Affordable Care Act (popularly known as Obamacare) has suffered several setbacks and conflicting interpretations in the courts. These decisions and the impact of the law on employers show the increasingly urgent need for changes in the ACA. Unfortunately, our political mood is unlikely to result in the kinds of changes businesses need for clarity.

Recent Legal Decisions:

The Supreme Court ruled in Burwell v. Hobby Lobby Stores, Inc., June 30, 2014, that privately held corporations need not comply with the HHS mandate to cover birth control methods and services that violate the owners’ religious beliefs in their employee healthcare plans.

A few days later, the Supreme Court ruled in Wheaton College v. Burwell, July 3, 2014, that Wheaton College need not comply with the HHS work-around for employers who disagree with the birth control mandate. Wheaton College was allowed to avoid sending the notification HHS required until after its case is decided sometime next spring.

HHS sealAnd then on July 22, two Circuit Courts ruled opposite ways on the question of whether Obamacare subsidies are available to individuals who purchased their insurance through the federal Healthcare.gov exchange instead of through state exchanges. In Halbig v. Burwell, a panel of the D.C. Circuit Court ruled that the Obamacare subsidies were not available through the federal exchange, while in King v. Burwell the Fourth Circuit ruled that the subsidies were available.

The D.C. Circuit panel held that the plain language of the ACA states that subsidies are available only on marketplaces “established by the state.”  This ruling eliminates—or at least places on hold—subsidies to around 4.5 million people, which may make health insurance unaffordable for many, and yet will subject them to penalties if they drop their coverage.

In contrast, the Fourth Circuit held that the Internal Revenue Service interpretation permitting federal subsidies for purchases through Healthcare.gov was “a permissible exercise of the agency’s discretion.”

These cases set up a clear split in the lower courts that the Supreme Court will likely have to decide.

Impact of the ACA on Employers:

Increasing numbers of employers are finding themselves squeezed between the mandated coverages (more generous and more detailed than most employers offered before passage of the ACA) and the required level of premiums (where at least one plan that an employer offers must have premiums for individual coverage that are no more than 9.5% of any employee’s wages).

When the Cadillac coverage provisions go into effect after 2017, employers will face yet another constraint. If they pay too much for their employees’ coverage, they will face huge surtaxes. Beginning in 2018, a 40 percent excise tax will be imposed on high-value healthcare plans

Thus, the sweet spot of permissible healthcare plans under the ACA is being compressed in three directions—by the coverages required, by the amounts that employees can be charged, and by the subsidies that employers can provide.

And now, depending on how the Supreme Court rules on the subsidy issue, the federal government may not be able to subsidize healthcare coverage either.

Moreover, if the federal subsidy is ruled to be unlawful, then the employer penalties for employees who get the federal subsidies will fall apart as well.

At that point, the ACA scheme is likely to collapse.

I have talked with benefit plan managers in recent weeks about the increasing problems and uncertainties they face in complying with the ACA. Some are considering eliminating their employee health insurance altogether, and taking the chance that the employer penalties will survive.

Others are considering moving to fully insured plans to eliminate the complexities of complying with the uncertain ACA requirements. These employers believe they have so little flexibility in designing plans to suit their employee populations that they see no benefit to maintaining any in-house expertise in managing healthcare. Instead of continuing the tailored benefit plans they have sponsored for decades, they will turn their employees over to private exchanges, and let the employees find their own plans.

None of these benefit managers believes that employee healthcare coverage will last many more years. As crafted under the ACA and as interpreted by current HHS regulations, employee healthcare coverage has outlived its usefulness.

The Need for Change:

Most complicated statutes need “technical corrections” after the language that Congress passed is examined more carefully by regulatory agencies and by those impacted by the new law. It was to be expected that the ACA would need modification.

I have written before that the ACA needs to be amended. Not repealed, as Republicans would have it, but amended substantially. Unfortunately, changing the statutory language will require compromise between sharply divided political parties.

Employers, Be Strategic In Implementing Health Care ReformBecause of the way that the ACA was passed—with only Democrat votes in support, and all Republicans in Congress opposed—the law has no bipartisan underpinning to foster compromise. The Democrats are now reaping the effect of their actions in cramming the legislation down an unready nation’s throat.

In the meantime, we must muddle along with imperfect legislation.

Unfortunately, President Obama’s unilateral actions in delaying and re-interpreting the ACA the way he wants is not the way to fix the law.

So the healthcare industry holds its breath, hoping that the myriad issues associated with the poorly written ACA get fixed before the industry collapses due to the uncertainty.

And all of us who need healthcare hold our breaths as well.

What do you foresee happening with the ACA?

 

 

 

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Customer Service: The Importance of Letting Employees Use Discretion and Judgment


call_centre_employeewithheadsetportrait_26747-300x226Last week I had two experiences with government-sponsored call centers within twenty-four hours. One was pleasant, and the other was a waste of my time. The comparison caused me to think about the importance of giving employees discretion to handle situations to the best of their abilities.  When employees are allowed to use their best judgment, their ability to satisfy customers improves.

One evening I had to call my municipal government’s 311 action line to complain that my trash had not been picked up on our regular trash day. The garbage truck had been to most of the homes in our neighborhood, but for some unexplained reason it had skipped our block.

Even though I called about 6:30pm (well after normal government working hours), I got a live human being on the phone. “Derrick” took my call, was pleasant and knowledgeable as we talked, looked up my information in his computer as we spoke so I didn’t have to tell him everything, joked with me about Thanksgiving plans, and promised to send another garbage truck the next day. (That didn’t happen, but the call itself was pleasant. The trash was picked up later in the week.) Throughout the phone call I felt like I was talking to someone who cared about me and my problem, who was knowledgeable about his job, and who would do his best to satisfy his customer.

The next morning I had a different experience. I received a survey call from the federal Department of Health and Human Services. I try to take survey calls when I have the time, particularly when I am interested in the topic, and this survey was about health care, which does interest me.

“Rolando”, the representative conducting the survey, launched into his introductory spiel, which he could barely read. I stopped him to ask how long the survey would take. He gave me the usual “That depends on how long your answers are” response that surveyors are trained to use to keep you on the phone. Then he started the introductory spiel all over again . . . from the very beginning, as if I hadn’t heard any of it before. Or maybe he didn’t know where in the speech he had left off.

After the introduction, Rolando started the actual survey. We got through a few demographic and geographic questions, then he asked “How do you get your health insurance?” and he read a long series of options, such as through my employer, through my spouse’s employer, through an individual policy, through Medicare, through military plans, etc.

When he got to the choice that applied to me, I said, “That’s it.”

Rolando didn’t acknowledge my answer and continued reading the options on the page in front of him.

“You read the one that applies to me,” I said, stating it again. “That’s the only health insurance I have.”

“For quality purposes,” he said, “I have to read everything.” And he started reading the list again, from the top, as if I hadn’t said or heard a word he had previously spoken.

At that point I stopped him again. “If you’re going to waste my time reading the whole list instead of listening to me,” I told him, “I won’t take the survey.” I hung up.

HHS sealI probably wasn’t very nice to poor Rolando, but I have no patience with people who waste my time. I don’t know if Rolando’s lack of customer service was due to his cluelessness or if he had been trained that way. Regardless, if HHS doesn’t give its survey conductors any discretion to respond to me as an individual, or hire surveyors who have the capability of using their judgment, then I see no reason to accommodate them by sitting through their survey.

And if HHS cannot allow survey conductors to use some judgment and discretion, how can we expect them to manage the entire healthcare industry? Or even to get Healthcare.gov working?

What are your pet peeves about employees who don’t (or can’t) exercise good judgment?

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Next Week’s Launch of the ACA Healthcare Exchanges


doctor holding an injectionIn August I wrote about the ACA navigators and the difficulties of getting them ready to enroll people in healthcare plans through the healthcare exchanges that launch on October 1. Now we are just a week away from opening these healthcare exchanges.

As of last Friday, problems were still surfacing. The Wall Street Journal reported on September 20 that the software programs in many exchanges had glitches in reporting the pricing of the plans sold on these exchanges. See Pricing Glitch Afflicts Rollout of Online Health Exchanges, by Christopher Weaver, Timothy W. Martin, and Jennifer Corbett Dooren, September 20, 2013.

Although I am not a fan of Obamacare generally, I do support the concept of healthcare exchanges. I think it is a good idea to help consumers compare the costs and terms of plans available to them in the marketplace.

The transparency in pricing various healthcare plans that exchanges provide is helpful. If we could also get transparency from doctors and hospitals and other healthcare providers, we might begin to get some control over healthcare costs.

My beef with the exchanges is that I don’t like the federal government running them—nor the states, for that matter. I prefer the private exchanges that are springing up, such as those offered by Aon, Aetna, and other insurers. I trust private entities to run these exchanges more efficiently and accurately than the government.

Nevertheless, I hope that the public healthcare exchanges get off to a good start. I just don’t think it is likely that they will, given their slow start.

My real problems with Obamacare lie in the minimum essential coverage requirements and the affordable coverage requirements. I believe that a wider variety of plans should be available to consumers, so that we can pick among a broad range of healthcare insurance products that best meet our families’ needs.

HHS sealInstead, Obamacare has imposed countless requirements in a variety of healthcare areas. Those regulations are still being issued, even as the law goes into effect. Nancy Pelosi’s famous statement that Congress would have to pass healthcare reform to know what’s in it wasn’t even accurate—it is only once Health & Human Services issues final regulations that we really know what is covered.

Meanwhile, the uncertainty that employers have in what their costs will be have been—and will continue to be—a drag on their decisions to hire and increase employees’ hours and wages.

Although I am hopeful that the launch of the exchanges will go smoothly, I do not expect it. I expect continued confusion in the healthcare arena for years to come.

What do you expect around the launch of the Affordable Care Act, in the short term and the long term?

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Navigating Obamacare


Like Every Function, To Be Strategic, HR Must Bring Expertise to the TableMost Human Resources professionals have been through a benefits open enrollment season at some point in their career. Many have presented at numerous open enrollment meetings to explain to employees what their benefits options are.

Employees always have more questions about their health benefits during these meetings than HR has thought about in advance. And this is particularly true when a company is changing insurance carriers or making substantial revisions to what is covered or to the costs to employees.

HR can never anticipate every nuance or issue that might apply to a particular employee’s situation, even though those who present at open enrollment meetings have usually been involved in the benefit plan design and/or have had substantial involvement in negotiating plan terms with their carriers.

Pity the poor “navigators” who will have to explain Obamacare to the millions of people who will need to enroll through the healthcare exchanges so they do not incur a penalty (which the Supreme Court called a “tax”) for failing to have insurance come January 1, 2014.

According to Amy Schatz in the Wall Street Journal on August 7, 2013,

“Grants to hire and train the workers aren’t expected to be released for another two weeks for the 34 states where the federal government is running all or part of the marketplaces, which will offer insurance to those who don’t get it on the job or from Medicare or Medicaid. That leaves just 32 business days to hire and train thousands of helpers in these states.”

As an HR professional, would you want to hire and train people in the intricacies of enrolling millions of people in plans that are newly designed – and maybe still in design – using a new online enrollment system? All in thirty-two days?

What are the odds of being able to hire “navigators” who can explain the enrollment system to enrollees who may never have used a computer before? Or who can explain the terms “co-pay” and “third-tier drugs” to people who have never had health insurance before?

HHS sealAnd with only twenty hours of training, what are the odds these poor navigators will know what to do when the first customer calls?

HHS had better hope that the scripts written for their new hires are well-written. But if the scripts are anything like the HHS regulations, the system is doomed from the beginning.

Or perhaps the Administration will rewrite the Affordable Care Act to delay implementation of the individual mandate until 2015, as it has the business mandate.

What do you think the impact of the Affordable Care Act will be on your organization, as of January 2014?

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