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PP-ACA Silver Plan Premium Costs

Changes for 2017

By http://www.MCOL.com

***

***

Conclusion

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***

Impact of Repeal/Replace Uncertainty on Stakeholder Budgets and Business Plans

An Electronic Voting Poll

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We encourage you to participate in the this brief e-Poll on the impact of the uncertainties surrounding repeal and replacement of the Affordable Care Act (ACA) on your organization’s budgets and business plans.

Participants will receive a free report of the findings from the survey results. In order to participate, your responses are due by Friday April 21st, 2017.  

The e-poll asks the following questions:

  • Are you a purchaser, provider or vendor/other?
  • Has the uncertainty during the last five months regarding repeal and replacement of the ACA affected your organization’s business plan, budget and hiring plans?
  • Overall, how do you feel the uncertainty during regarding repeal and replacement of the ACA will impact your organization for the 2017 calendar year?
  • Ultimately, how do you feel the current environment will lead to challenges vs. opportunities?

Assessment

To take the e-poll now, go VOTE: http://register.healthwebsummit.com/mcolepoll0417

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Blue Cross Blue Shield, Independent / Provider – Sponsored Plans

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Transcripts and Slides

DougBy Douglas B. Sherlock, CFA sherlock@sherlockco.com

The Affordable Care Act is intended to create strong incentives to reduce the administrative costs of health insurers. The medical loss ratio rules and the new ACA-related taxes are manifestations of this policy, and the recent announced business combinations between leading national health insurers are adaptations to these incentives.

It follows that the most recent rate of increase in health plan administrative expenses, excluding the new taxes, is dramatically lower than in recent years. Sherlock Company materials summarizing the results of our surveys are found below.

Independent / Provider – Sponsored Plans

Blue Cross Blue Shield Plans

Assessment

The contents above are a very small portion of the 1,000 page Sherlock Benchmarks for each of these universes. The Sherlock Benchmarks are essential tools to manage administrative costs for your health plan.

budget

Conclusion

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[Foreword Dr. Phillips MD JD MBA LLM] *** [Foreword Dr. Nash MD MBA FACP]

***

The “Selling-Out” of a Profession [Dentistry]?

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Dentistry …?

[By D. Kellus Pruitt DDS]

1-darrellpruittSeveral years ago, a president-elect of the American Dental Association proclaimed, “The electronic health record may not be the result of changes of our choice. They are going to be mandated. No one is going to ask, ‘Do you want to do this?’ No, it’s going to be, ‘You have to do this.’” (ADA News, October 2008).

Looking back, it is easy to recognize the ADA’s renegade capitulation to HHS as a warning sign of things to come.

The ADA is the same national healthcare institution whose leaders joined Delta Dental in persuading dentists to volunteer for HIPAA’s NPI numbers – never revealing what they are to be used for. It’s the same not-for-profit Chicago corporation which continues to protect non-dues revenue by misleading the nation about the “savings and convenience” of EHRs in dentistry. Among all healthcare organizations, the ADA is alone in their enthusiasm for EHRs and Meaningful Use requirements.

And to top it off, the ADA leadership has progressively become less accessible by the community it serves – NEVER entering into open discussions of urgent dental issues on the internet, even to the extent of ending its commitment to answering dental questions for visitors to Dr. Oz’s Sharecare.com. It’s only dentistry for crying out loud!

As a matter of fact, Dr. Maxine Feinberg, the new ADA President, recently suggested in an interview with the ADA’s Judy Jakush that telephone conversations are “The best kept secret of the ADA which members don’t understand.” What?

Dr. Feinberg: “The best-kept secret is that if you have a problem or complaint, you will likely walk away with a positive experience. And, on the rare occasion that the staff can’t help you, there is a good chance that you will speak to Dr. Kathy O’Loughlin, the executive director. That’s amazing customer service.”

***

Insightful or clueless dentist?

***

What’s not to understand? I understand that ADA membership numbers have taken a hit over the last few years, but nevertheless, the dues of a little over 150,000 dentists still help pay the salaries of ADA employees. That’s a lot of phone calls that will have to be transferred to the right person (the first time), scheduled to call back later or be completely ignored. Isn’t email, or even the US Mail a better idea? Or is lousy communication (unaccountability) with dentists and patients the goal?

About that NPI number

How do you feel about the ADA leading the effort to assess and report your value to your community without ever stepping into your office or talking with a satisfied patient? When you volunteered for your National Provider Identifier at the insistence of the ADA and Delta Dental, you agreed to CMS terms. What? Nobody mentioned that?:

“Spread the mission of the DQA – The DQA, formed in 2008 through a request from the Centers for Medicare & Medicaid Services, is comprised of multiple stakeholders from across the oral health community who are committed to development of consensus-based quality measures.” By Kelly Soderlund for the ADA News, November 3, 2014.

Does “multiple stakeholders” sound as costly to you as it does to me, Doc? I say we already have too many stakeholders. What about the principals (dentists and their patients) who pay the stakeholders’ bills?

***

eHRs

***

Does anyone disagree that DQA looks like the ADA’s desperate mission creep for cash? With the chronic drop in membership, the Chicago corporation has turned to vigorous pursuit of non-dues revenue – probably in the form of federal grants and stimulus money from HHS. The ADA (which prefers clumsy communication via telephone), is asking state and local dental leaders to put their own personal credibility at risk by persuading uninformed dentists to unquestioningly accept multiple stakeholders’ assessment of their value to society – just like clueless dentists cooperated in the NPI effort.

Dr. David Schirmer, chair of the DQA’s education committee, tells ADA News: “Eventually, all of dentistry will need to understand quality measures. But before we reach our grass roots membership, we need our leaders in dentistry to understand.” He adds, “I’m challenging those leaders to pave the way for their younger colleagues and help them understand the long-term impact this will have on dentistry.”

ADA Editor Soderlund: “The DQA has taken the lead on developing quality measures within oral health care. These measures touch every practicing dentist in the United States, and with dentistry, how it’s modeled and how it’s financed changes in the future — specifically as a result of the Affordable Care Act — they’ll become even more prevalent. The mission of the DQA is to advance performance measurement as a means to improve oral health, patient care and safety through a consensus-building process.”

“— specifically as a result of the Affordable Care Act —“ Since you never respond, ADA, how do we know you haven’t sold us out once again for taxpayers’ money?

Assessment

If it’s difficult for the ADA to hold onto membership now, just wait until the nation’s dentists figure out that Obamacare cannot give everyone A’s on their internet report cards. This means the majority of dentists are going to be pissed at the ADA for their bad grades, no matter what.

Conclusion

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The PP-ACA [Game Changer for Health Care Financing]

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The fuel which fires the self-funded engine of employee health and welfare plans

[By William Rusteberg]

A SPECIAL ME-P REPORT

PP-ACA Taxes for 2015

Introduction

The Affordable Care Act (ACA) has had a fundamental impact on health care financing in this country. It has effectively provided added incentives for plan sponsors to consider modified self-funding arrangements for their employee health and welfare plans in lieu of fully-insured plans. The advantages of doing so are clear.

Health care costs continue to rise despite passage of the ACA. While the ACA addresses many aspects surrounding the delivery of health care, it does little or nothing to identify and offer solutions to constantly rising costs. On the contrary, many ACA provisions are driving cost up.

Plan sponsors have a choice between assuming a passive strategy with little or no control through fully-insured funding arrangements or the alternative. The alternative affords more control and less cost. It rewards innovation and creativity. It utilizes all the tools a risk manager requires as part of his trade.

More plan sponsors are turning to self-funding in response to the ACA.

Product DetailsProduct DetailsProduct Details

The Market Leading Up To the ACA

The financial and benefit advantages of self-funded health and welfare plans became evident with the passage of the Employee Retirement Income Security Act (ERISA) of 1974. Dramatic growth in self-funding occurred when ERISA preemption, clarified legal environment, rising health care costs, widespread use of risk management, the cost containment movement (Managed Care) and high interest rates were all being experienced.

Fully insured plans continued to be a large segment of the market, especially among smaller employer groups. However, a significant number larger groups remaining fully-insured moved towards minimum premium plans, or plans which were rated retrospectively on an administration cost plus basis. This approach among larger employers mirrored self-funding advantages to some degree, however the insurance companies ultimately bore the entire risk and maintained full control over plan expenses and claim costs. These types of fully-insured funding arrangements were the carrier’s response to the growing phenomenon and popularity of self-funding.

With the advent of managed care in the early 1980’s, the entire dynamics of health care delivery changed. Third party intermediaries became an important element in the health care equation.  These intermediaries performed valuable services in cost containment which initially had a positive impact on health care benefits and costs to the advantage of both the consumer and payer.

Carefully selected health care givers were aggregated into exclusive networks of preferred providers. The theory behind the scheme was valid; selected health care providers would agree to discount their usual fees for service in return for more patients. Steerage was accomplished by rewarding consumers with improved benefits when seeking care through these “preferred” providers. All worked well, with health care costs temporarily softening.

Consumers no longer had to satisfy deductibles to receive most care. Instead, co-pays as low as $10 to see a doctor became the norm. Prescription drugs benefits, now accounting for as much as 25% of a plan’s total spend in today’s market, were easily accessed by paying a small co-pay. Access to care became easier and affordable. Utilization increased.

With increased utilization, consumers began to demand more doctors and hospitals to be added to networks. Over time, just about every doctor and hospital in a given geographic area were all on networks. Competition among insurance companies hinged upon who had the broadest network. The pressure to add medical providers became intense. A seller’s market for medical providers became an established trend that continues to this day. Preferred Provider Organizations (PPO) thus gained the advantage of a seller’s market they created while end users became subject to a weakened and impotent buyer’s market.

Over time PPO’s lost their core characteristic. There was no longer any steerage. The scheme that worked so well in the beginning began to unravel. Costs increased dramatically, year after year.

Plan sponsors failed to recognize the slow progression towards failure of managed care. They continued to subscribe to the theory behind managed care based upon reliance of advice and guidance from “trusted” insurance companies, third party administrators, agents, brokers and insurance experts posing as consultants. Unfortunately, and unknown to plan sponsors, these trusted advisors maintained a vested interest in continuing the scheme. A de facto conspiracy of third party intermediaries formed. The conspiracy continues to this day. It is one of the health care industry’s best kept secrets.

No one can dispute that managed care has failed. Health care costs have continued to increase at double digits year after year, becoming unaffordable for most Americans. Plan Sponsors, concerned and desperate for answers and solutions continue to rely on advice and guidance from third party intermediaries whose vested interests is in maintaining the status quo. To more and more employers health care costs can mean the difference between profit and loss.

The perception that private enterprise has failed in reining in costs is widespread. Private and public budgets can no longer sustain the current level of spending, let alone future health care inflation.

Pointing to failure of the market to keep medical costs affordable, many looked to government for solutions.

Product DetailsProduct Details

The Affordable Care Act & The Impact on Health Care Financing

With the passage of the ACA, we find ourselves in a dynamic and somewhat unpredictable market, particularly the political dimensions as the ACA continues to evolve. However, we do know to a large degree, how the market will be affected and what plan sponsors must do to maintain affordable health care for their employees.

The ACA’s most significant impact centers upon how group medical plans will be financially structured for years to come. The ACA effectively makes fully-insured plans less attractive while providing advantages to self-funded arrangements. Carriers have come to recognize this and are moving to increase their market share. Currently the BUCA’s (Blue Cross, United HealthCare, Cigna and Aetna) administer more self-funded business than fully-insured business on their respective large group blocks of business. They are now actively expanding this funding method to the small group market.

The ACA’s universal intent is to provide government mandated means for affordable health care for all Americans. However, the ACA as it is now written does not address cost of care nor does it mandate parameters around which cost of care is to be based. Instead, the ACA mandates rigid requirements that address what insurance companies can offer in the way of benefits, as well as profit and operating margins. There is nothing in the Act that addresses what medical providers charge and what they are paid.

These far reaching rules have dramatically impacted fully-insured plans. All ACA mandates apply to these plans, whereas self-funded plans are exempt from many of them. Fully-insured plans are effectively handcuffed affording little leeway to be proactive and innovative in plan design and cost basis. Unlike self-funded plans, little can be done to control costs under fully insured plans.

An example of a reverse outcome of good intentions pertains to the Minimum Loss Ratio mandate required of all fully insured plans but exempted under self-funded plans. Fully insured large groups are required to maintain a loss ratio wherein health care claims cannot be less than 85% of premium leaving insurance companies with15% of premium to cover their costs and earn profits. However this has had a reverse effect, the opposite of which is higher costs. The greater the cost (claims), the greater the profit to the insurance company. Fifteen percent of a larger number is larger than 15% of a smaller number.

Insurance companies remaining in the fully-insured market have little or no incentive to reduce health care costs except to remain competitive in the market. With only a handful of fully-insured carriers in any given market there is less competition. Shadow pricing between competitors can very often be an effective means of maximizing insurance company profits at the expense of the plan sponsor and plan participants. A 15% operating and profit margin becomes greater when insurance rates are higher.

A good example of a constricted market can be found in San Antonio, Texas, a market we know well. There are only four major players in the fully-insured market: Blue Cross, United Healthcare, Aetna and Humana. Employer groups who continue to fully-insure will contract with one of these four carriers.

The Lower Rio Grande Valley in deep South Texas, on the other hand, has only one major carrier in the fully-insured market. Blue Cross is the dominant carrier, with occasional, cyclical and short lived forays into the Valley by Aetna and Humana..

Fully insured health insurance carriers have developed proprietary provider networks as an integral part of their insurance plans. None to our knowledge market plans that do not utilize their PPO network as part of the offering. There is an economic reason for this and it has nothing to do with lowering health care costs.

To insure continuing higher profits, health claim costs must continue to escalate. Third party intermediaries negotiate provider agreements in secrecy with both parties agreeing to non-disclose of terms, conditions and pricing to the public. It is our opinion that if you are not allowed to see a contract you are probably paying more than you should. Plan sponsors have simply become third party beneficiaries, accessing provider agreements they cannot see, examine or audit.

Fully insured group medical insurance in today’s market requires accessing proprietary, secretive PPO contracts. These contracts drive costs up each year primarily due to automatic escalator clauses. Other contract provisions include provider re-pricing fees and shared savings provisions based on egregious charge master rates no one ever pays. There are other contract provisions that guarantee continued cost increases but we will save that discussion for another day.

Self-funding provides plan sponsors a means to comply with the ACA with less restrictive mandates and lower costs. In addition, plan sponsors have the ability to design benefits that are far more flexible. They gain the freedom to choose provider reimbursement methods based on transparency, benchmarked off costs instead of phony discounts based on inflated sticker prices no one ever pays. They have the ability to eliminate expensive third party intermediaries that bring no value, They have the ability to directly contract with willing providers based on transparent benchmarking, achieving savings of 20% or more.

The ACA’s adverse impact on fully insured plans include community rating and minimum essential benefit requirements, 3:1 age band rating, pre-existing condition inclusion, and benefit expansions. All of these mandates drive cost up.

A self-funded plan is not subject to community rating nor are they required to include all ten (10) essential benefits. In addition, self-funded plans are not subject to the 3:1 rating rule and can mitigate pre-existing inclusion through selective lasers. Lasers are an underwriting technique that increases exposure/costs only when a loss occurs. If no loss occurs, there is no effective additional load to plan costs unlike fully-insured plans that load the premium costs at the beginning of the plan year, effectively passing on a cost that may or may not be necessary.

Complementing the advantages of self-funding under the ACA, ERISA preempts the state’s ability to mandate health insurance contract terms and benefits, impose premium taxes, impose underwriting constraints and mandated premiums (varies by state) and limit employee benefit plan options.

Product Details  Product Details

The Future under the ACA

Health care costs continue to escalate. Both private and public sector budgets can no longer sustain the current level of spending, let alone future health care inflation.

Over 170 million Americans are insured through employer sponsored health plans today. These employers, fearing the effects of the ACA on their bottom line, are concerned and desperate for answers and solutions to ever increasing health care costs. To more and more of them health care costs can mean the difference between profit and loss.

Acceptance to change, historically, has been slow among employers who have traditionally relied on third party intermediaries to guide them through the complicated maze of our health care system. The ACA has effectively changed that mindset among many plan sponsors.

We are seeing a movement away from managed care by some employers, and to a lesser degree, by health care providers, particularly health care professionals. Employers, for the first time, are questioning managed care contracts they cannot see but upon which their health care costs are based.

We are seeing a major shift to self-funded arrangements which enable plan sponsors to effectively manage costs through avoidance of certain ACA requirements, underwriting advantages, and pro-active risk management.

Assessment

Product Details

Although ERISA was passed into law over 35 years ago, with the advent of the ACA more plan sponsors are accepting full fiduciary responsibility to assure that plan assets are expended prudently and in the best interests of plan participants.

Conclusion

As it stands today, the ACA is the fuel which fires the self-funded engine of employee health and welfare plans, providing flexibility, control and lower costs. It is the parking brakes of fully-insured plans.

About the Author

Bill Rusteberg is a fee based insurance consultant and principal of RiskManagers.us since 1998. He has been involved in the insurance industry for over 41 years specializing in self-funded employee welfare plans. Bill has spoken nationally on continuing changes affecting our health care delivery system, most recently at the Physician Hospital of America (PHA) annual forum in 2013 and the Health Care Administrators Association (HCAA) Executive Forum in 2014. Bill walks his audience through the complicated maze of the American health care delivery system. He exposes industry secrets that drive costs by outlining specific findings not generally known to Plan Sponsors. Bill offers common sense solutions to ever increasing health care costs. Armed with the knowledge industry insiders have kept hidden for years, Plan Sponsors are, for the first time, empowered to negotiate with insurance companies, managed care organizations and other third party intermediaries from a position of strength and can better achieve cost effective health care for their employees while often improving benefits at the same time. Bill is a licensed Risk Manager, Life & Health Counselor, Property & Casualty / Life & Health Insurance agent and Surplus Lines broker in Texas. He holds reciprocal licenses in several other states.

About RiskManagers.us

RiskMangers.us is a specialty company in the benefits market that, while not an insurance company, works directly with health entities, medical providers, and businesses to identify and develop cost effective benefits packages, emphasizing transparency and fairness in direct reimbursement compensation methods

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Two Healthcare Sectors the Stock Market Got Wrong on Election Day 2012

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How various sectors in the Health Care Industry fared under the PP-ACA legislation?

[A SPECIAL R&D REPORT FOR THE ME-P]

By David K. Luke MIM, MS-PFP, CMP™ [Certified Medical Planner™]

Website: http://www.networthadvice.com

David K. LukeThere has been a lot of speculation since the words “Affordable Care Act” were first whispered years ago on how the various sectors in the Health Care Industry would fare under such legislation. I proposed that a good indicator would be to look at the performance of the individual health care sector stocks on the first trading day after the election.

(See With Obama Election Win, “Mr. Market” Weighs in on the ACA Equity Winners and Losers by David K. Luke on November 16, 2012).

Link: With Obama Election Win “Mr. Market” Weighs in on the ACA Equity Winners and Losers

The day after Pres. Obama’s reelection on Wednesday, November 7, 2012 the stock market was down over 2% as measured by the S&P 500 and the Dow Jones Industrial Average (DJIA). The common reason given was increased doubt that the impending “fiscal cliff” issue, which was splitting the House and the Senate, would be resolved. There was however, another big concern on investor’s mind: the future of the Affordable Care Act. While the election was close when measured by the popular vote with President Obama earning 51.06% versus Mitt Romney with 47.20%, the electoral vote showed a hands-down Obama victory with 332 versus 206 votes. Investors voted with their pocketbooks with that first trading session following the election showing certain healthcare sectors up in price, other healthcare sectors with moderate returns, and certain healthcare sectors down in price.

Disparate Health Care Sector Returns

It is interesting to look back now over a year and a half later and see how accurate those investor votes were on that first day of realization that health care reform was continuing forward at a much faster pace now that President Obama would be serving a second term. Keeping in mind that the day was a very negative day as a whole in the stock market, a number of healthcare sectors were up in price. This group includes Hospital Stocks and Medicaid HMOs. Note the phenomenal one-day returns (in a down 2% market!) on the sample stocks in these two groups:

Hospital Stocks

  • Health Management Associates (HMA) +7.3%
  • HCA Holdings Inc. (HCA) +9.4%
  • Community Health Systems Inc. (CYH) +6.0%
  • Tenet Healthcare Corp. (THC) +9.6%

Medicaid HMOs

  • Molina Healthcare Inc. (MOH) +4.6%
  • Centene Corp. (CNC) +10.1%
  • WellCare Health Plans Inc. (WCG) +4.4%

Such positive returns on a big down day in the market indicates investors assessing these healthcare sectors being good investments under an Obama presidency and a positive outlook for the implementation of the Affordable Care Act. The other up sector on that day was the Drug Wholesalers, up almost 1% on that negative day. (See “Selected Health Care Performance” Chart – below).

The market had a tepid response to the Pharmacy Benefit sector, as well as the Generic Pharmacy, Testing Labs, and Big Pharma. In my sample group, these sectors were down -.4%, -7%, -1.7%, and -1.4% respectively. It is important to note however that these sectors while slightly positive or barely negative still performed better than the general market that day.

Two Sectors

But, the two healthcare sectors that the stock market severely punished with the voting of substantially more sellers than buyers by investors on that first post-election day were the Medical Device Companies (down 2.5% in the sample group) and the Medicare Part D Companies (down 4.7% in the sample group). The thought at the time was that Medical Device Companies, facing an impending medical device excise tax of 2.3% on the sale of most medical devices in the United States, would be devastated, and that Medicare Part D Companies would face severe profit constraints with tighter-fisted government regulations imposed by the ACA.

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Stock_Market

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The Retro-Specto-Scope

In hindsight, investors were correct on two out of the three predictions based on stock market prices on the various healthcare sectors. Hospital Stocks, Medicaid HMOs, and Drug Wholesalers, the leading sectors indicated to be winners with the impending implementation of the ACA, are up 69.8%, 63.6% and 76.5% respectively in the sample groups since November 7, 2012. This remarkable and closely parallel return for these three sectors seemed to prove that the stock market on November 7, 2012 correctly picked the three winning health care sectors! The S&P 500 index for the same time is up 32.02%, a nice return for 1 ½ years but about half the return of these apparently huge benefactors of the ACA. The healthcare sectors that investors felt less positive about (but more positive than the general stock market) on that first postelection day were Pharmacy Benefit Companies, Generic Pharmacy Companies, Testing Labs, and Big Pharma. These four health care sectors are up 43.8%, 40.5%, 6.4%, and 20.5% respectively. Again, in terms of ranking the sectors, these four sectors performed in line based on the comparative returns of the other healthcare sectors.

Wisdom of Crowds

Amazingly, it appears that the emotional Mr. Market predicated quite accurately on Wednesday, November 7, 2012, in one day of trading, not just which health sectors would be good investments for the near future, but the actually ranking of the future performance of the sectors! It seems as though the stock market, as one large voting machine, precisely dissected the over 20,000 pages + of resulting legislation created from the original 906 pages (pdf here) of the PPACA law and distilled it down to profits and losses with the resulting winners and losers in the health care industry in one trading session.

Two [2] Big Misses

Investors however were way off on their concerns about Medical Device Companies and Medicare Part D Companies. The two sample groups were up 71.3% and 66.4% in the time of November 7, 2012 to May 19, 2014 respectively, more than double the S&P 500 for the same period, and in line with the best performing sectors! This is spite of the fact that stock sample of these two groups were the two worst performers on post-election day trading. What happened?

***

Bear + A Falling Stock Chart

***

The “Medical Device Excise Tax” Fable and the “Private Insurers Will Control Costs” Fairy Tale

Wall Street has sharpened their pencils in the last year and a half and realized they have gravely underestimated the profit potential of the Medical Device makers and the Managed Care Health Insurers, in spite of the ACA. Based on stock price performance of the sample group of major players in the past 18 months, fewer sectors look as profitable as the Medical Device Industry and the Medicare Part D Industry. What happened?

The Medical Device industry states that the tax will cost the US “tens of thousands of jobs” and that those jobs will be shipped overseas. A number of issues that are involved here however refute these claims (http://www.factcheck.org/2013/10/boehner-and-the-medical-device-tax/. It appears that any targeted reductions were not related to the implementation of the tax, which became effective January 1, 2013, in spite of heavy protest by the industry. Medical technology continues to have a bright future regardless of the tax.

The notion that the “Affordable” Care Act will help reign in the rampant cost increases of Medicare’s “Part D” program seem to be elusive. Private insurers have done a poor job of keeping drug prices down, especially when compared to the discounts the government gets for Medicaid. Medicare Part D companies wield significant influence on Capitol Hill, and impending steeper discounts look unlikely.

Everybody Wins, Except …

Before the ACA implementation, about 85% of Americans had health insurance. Currently with an additional 7 million Americans with health insurance thanks to Obamacare, an additional 2.2% of Americans now have coverage, or about 87% of all Americans. How can such a slight increase in new health care consumers be responsible for such large anticipated profits in the health care sector? It cannot. Wall Street is telling us that the new health law is not about new customers, but about increased profit margins for the health care industry. I can draw three conclusions:

  1. The Affordable Care Act may not be so affordable for health consumers
  2. Most companies in the Health Care Industry stand to gain financially with ACA. There is one sure loser with ACA: The physician, who can only look forward to increased workloads and mpending Medicare SGR pay cuts.

THE CHART [Research and Development]

Selected Health Care Sector Stock Performance Random Sampling of Publically Traded Companies From President Obama Re-election Date to Present

Chart

Conclusion

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How the ACA Affects Your RXs

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On Four Large Groups of Import

By http://www.HelpRx.info

To give you a jumpstart about how the Affordable Care Act will impact you and your prescription drug coverage we’ve researched the major impacts on four large groups of people who could see the greatest impact.

Review the info-graphic below to learn about the benefits and requirements of the ACA and share it with your friends and family that still have questions about how the ACA will affect them.

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infographic

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Assessment

See more at: http://www.helprx.info/blog/infographics/infographic-how-the-affordable-care-act-impacts-you#sthash.6bk5zU0D.dpuf

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On Healthcare.Gov System Availability

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A Review of Website “Uptime”

By www.MCOL.com

HG

Conclusion

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The PP-ACA from Medicine to Dentistry

Obamacare and Dentistry

[By D. Kellus Pruitt DDS]

1-darrellpruitt It seems that problems with the PP-ACA have migrated from traditional medicine to the world of dentistry.

“MaineCare dentists hit with massive fines for minor clerical errors, they say – Some clinics face more than $200,000 in penalties under a new audit system that threatens to wipe out services for kids.”

-Joe Lawlor [Staff writer] Portland Press Herald [November 6, 2013]

http://www.pressherald.com/news/MaineCare_dentists_hit_with_massive_fines_for_minor_clerical_errors__they_say_.html

 “The new system gives auditors, who work for a private contractor, financial incentives to find small errors by paying them more for each mistake they discover.” Maine adopted the auditing system to comply with the federal Affordable Care Act, otherwise known as Obamacare.

 Lawlor continues: “The audits are intended to root out fraud and abuse, but dentists told the Portland Press Herald that auditors are finding typographical or clerical errors that do not compromise patients’ care or defraud the government.”

A Clawback?

Dr. Michael Dowling, co-owner of Falmouth Pediatric Dentistry, tells the Herald, “This is not finding fraud and abuse. This is a clawback. They (state officials) are trying to take back money that we billed them legitimately.”

Still want to help the poor so much that you are willing to take your chances with the ACA auditing system, Doc?

Dentists facing bankruptcy

According to Lawlor, some dentists are actually facing bankruptcy because of ridiculously expensive fines over minor errors. Other Maine dentists who are otherwise willing to work for charity-level fees in order to help children who have nowhere else to turn, are dropping out of MaineCare. President Obama’s plan to use outrageous fines to fund the state and federal coffers, as well as the bonuses of ambitious auditors, is destined to fail.

How can the Affordable Care Act [PP-ACA] possibly make care more affordable for children with toothaches, if it runs off all the dentists?

Mobile-Security

Assessment

Is it beginning to look to you like Obamacare might have been designed to serve the interests of unaccountable healthcare stakeholders rather than the interests of doctors and patients – the healthcare principals? Why do we put up with this crap, Doc?

Conclusion

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How affordable is the new health care law – Really?

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Calculate your costs

[By Staff Reporters]

The Affordable Care Act is going to change health care for tens of millions of Americans.

But, what about the cost?

LET’S BEGIN

ACA

###

NOW CALCULATE

Whether you’re an individual who has health insurance or needs it, or a small business owner, you need to know how health care reform affects you.

What’s it going to cost? What’s happening in your state?

### 8C9220491-tdy-130929-aca-calculator-4x3-606p_blocks_desktop_large

### 

Link: http://www.nbcnews.com/health/how-affordable-new-health-care-law-really-calculate-your-cost-8C11296290

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Understanding Basics of the Health Insurance Exchanges [HIEs]

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The Four Basic Categories of the PP-ACA

By Rick Kahler CFP® http://www.KahlerFinancial.com

Rick Kahler CFPThe opening date was yesterday, October 1, 2013. And today, the competition is lined-up and ready to go after bronze, silver, gold, and even platinum.

These competitors aren’t athletes, but insurance providers. The field they are entering is the new health insurance exchanges [HIEs] as mandated by Obamacare [ACA].

The New Year

Beginning January 1st 2014, nearly everyone in the US will need to have health insurance or pay a tax penalty. Those not insured through their employers can apply for coverage through these health insurance exchanges, also called “marketplaces.” Enrollment began October 1st, 2013 for coverage starting in January, 2014.

These exchanges are intended to make it easier to find insurance providers and compare their coverage and costs. Each state’s exchange website will list all the policies available in that state, with prices and policy provisions.

So far, over half of the states (including my State of South Dakota) have opted to use exchanges managed by the federal government instead of setting up their own.

The Four Basic [Colors] Categories

Bronze, silver, gold, and platinum describe the four basic categories of policies that will be available through the exchanges at different costs. Here is a very brief summary of each category.

Bronze

The least expensive option is a bronze plan, which might be the best choice for younger people with lower incomes and good health. The plan will pay 60% of health care costs and the insured will be responsible for 40%.

Silver

The second level, silver, will pay 70% of health care costs.

Gold and Platinum

Gold covers 80%, and a platinum plan covers 90%. Obviously, the categories with higher benefits also will have higher premiums.

The Essential Benefits

All these plans are required to cover “essential health benefits.” These include preventive and wellness care like cancer screening, chronic disease management, pediatric care, many prescription drugs, injury rehabilitation, mental health and addiction treatment, maternity and newborn care, hospitalization, and emergency services.

Companies are not allowed to deny coverage or charge more for those with pre-existing conditions. There are no lifetime benefit limits.

The Carrot and Stick Approach

The requirement to have health insurance coverage, the “stick” of Obamacare, is accompanied by a “carrot” in the form of federal subsidies to help pay insurance premiums. It’s estimated that two-thirds of Americans will be eligible for subsidies, which will be figured on a sliding scale. The upper limit for qualifying is four times the federal poverty level, which amounts to about $88,000 a year for a family of four.

Other Outlines

This ME-P summary is just the barest outline of the health care changes coming our way. To find out more, it’s a good idea to spend some time online, especially at two sites that offer a lot of helpful information.

  1. The First site is the federal government website at www.HealthCare.gov. It provides links to the state exchanges, plus detailed information that for the most part is explained in straightforward, plain English.
  2. The Second site is the Henry J. Kaiser Family Foundation at kff.org. An especially useful tool available here (http://kff.org/interactive/subsidy-calculator/) is a calculator to determine the federal subsidy that applies at your family’s income level.

Obamacare 2014

The elements of Obamacare that take effect in 2014 represent a huge shift in the way we cover health care costs. I strongly recommend that you start now to figure out what this will mean for you and your family.

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Obama Care

###

Don’t wait until December and end up making hasty decisions in a last-minute rush. The more informed you are; the better insurance choices you can make.

Assessment

The changeover to the new insurance environment is likely to be chaotic and confusing. Navigating it will take some energy, commitment, and stamina. When all the scrambling is over, we can only hope the ultimate winners will be the American people.

Conclusion

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Affordable Care Act HIEs at Launch

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Some Important Launching Information for Doctors and Business Owners

By Bobby Whirley CPA

[Whirley & Associates LLC – Alpharetta, GA]

Dear ME-P Readers,

The ACA (Affordable Care Act) requires employers to provide their workers with a notice about the state health insurance exchanges.

Today October 1st is the deadline for providing these notices.

These exchanges will sell insurance to individuals who don’t get coverage through their employers. The exchanges are also available to medical practices and small businesses, which may or may not currently offer heath care coverage.

The Fines?

Some doctors or business owners are concerned about paying a fine of up to $100 per day under the general non-compliance penalty provisions.

The recent notice of the Affordable Health Care Act states that there will be no penalty.  Please refer to http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html

If your medical practice, clinic or company is covered by the Fair Labor Standards Act (you have one or more employees, sales of over $500,000, and deal in interstate commerce), you must provide a written notice to your employees about the Health Insurance Marketplace by Oct 1, 2013.

Model Notices

The U.S. Department of Labor has two model notices to help employers comply. There is one model for employers who do not offer a health plan and another model for employers who offer a health plan or some or all employees.

More:

The model notices are also available in Spanish and MS Word format at http://www.dol.gov/ebsa/healthreform/

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Health-Information-Exchange

###

Assessment

Employers may use one of these models, as applicable, or a modified version. More compliance assistance information is available in a Technical Release issued by the US Department of Labor.

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Healthcare Promises [aka ACA]

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On the Affordable Care Act

By Rick Kahler MS CFP® ChFC CCIM www.KahlerFinancial.com

Rick Kahler CFP“I’m not sure what’s wrong or what kind of surgery you need, but we have to operate right now.”

If you heard this from your doctor, you’d jump off the examination table and run for the door. Yet that’s essentially the approach the President and Congress used three years ago to pass a bill, optimistically called the Affordable Care Act, which was the largest transformation of the U.S. health care system in our lifetime.

The Debate

During the frenzied debate our elected leaders made many promises as to the amazing benefits this legislation would bestow on Americans. After listening to speeches from President Obama, Speaker of the House Nancy Pelosi, and President of the Senate Harry Reid, I recounted those promises in this blog on March 21, 2010.

The Promises

Let’s revisit those promises.

  1. All Americans will now receive affordable, or free, quality health care.
  2. No one will ever be denied coverage.
  3. No one will ever go into bankruptcy because of the costs of health care.
  4. There will be increased access to health care for 95% of Americans.
  5. There will be no decline in the quality of health care.
  6. Health care costs will go down.
  7. Health insurance coverage will be affordable to the middle class.
  8. There will be no decline in Medicare benefits.
  9. Insurance premiums will decline for the middle class.
  10. It will unleash unprecedented entrepreneurial opportunity for the economy.
  11. The deficit will decline, saving taxpayers $1.3 trillion.
  12. It will cut $500 billion of waste, fraud, and abuse out of Medicare.
  13. No government funds will be used to fund abortion.

Are these promises coming true? Many of them are pending full implementation of the act in 2014. Others have fallen flat or encountered the law of unintended consequences.

Obama Care

Business Owner’s

I’ve heard recently from several owners of small businesses about their increased health insurance costs. In addition to premium increases of nearly 50% over the past two years, they are seeing increased administrative costs from what one person called the “insanity and complexity” of the new regulations.

Businesses with fewer than 50 employees aren’t required to provide health insurance. The incentive for owners of businesses close to that threshold is to keep employee numbers below 50, which means curtailing growth or even laying people off.

Those without employer-provided insurance are supposed to be able to shop for coverage in new health care exchanges, beginning this October. However, half the states have chosen to rely on the federal government instead of setting up their own exchanges.

This has brought criticism even from former supporters like Democratic Senator Max Baucus of Montana, who helped write the health care bill. He is concerned that the exchanges will not open on time and consumers won’t have the information they need to use them. He told the Huffington Post that Obamacare is headed for a “train wreck.”

ACA Cost Estimates

The proponents said the ACA would cost $938 billion over 10 years. In addition to the promised Medicare savings, this was to be covered by a total tax increase of $562 billion over 10 years. This included a Medicare tax of 3.8% on dividends, rents, interest, and investment income on individuals and small business earning over $250,000.

The Office of Management and Budget, however, places the cost at $1.8 trillion over 10 years, resulting in a shortfall of around $900 billion.

Assessment

Whether Obamacare becomes the wild success the proponents guaranteed is yet to be seen. However, what we’ve seen so far isn’t promising. We as consumers would be well advised to pay close attention and ask tough questions before we accept this drastic surgery.

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Conclusion

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How the Affordable Care Act Affects Taxpayers Now? [Audio-Link]

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Sound Medicine –  How does the Affordable Care Act affect taxpayers now?

By Ann Miller RN MHA

Sound Medicine is a radio show produced by the Indiana University School of Medicine and WFYI Public Radio.

In the last few years Aaron Carroll MS MD associate professor of pediatrics at the Indiana University School of Medicine, has been their go-to guy on health policy.

Audio Link

So, for those of you who would find your day brightened by the sound of his voice, enjoy the following from www.theIncidentalEconomist.com

Assessment

Dr. Carroll discusses how the Affordable Care Act will affect taxpayers in the coming months. The Affordable Care Act officially takes effect in January 2014, but several provisions are being implemented this year. These provisions specifically affect Medicare and Medicaid recipients, caregivers and all taxpayers.

Conclusion

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Fighting Mid-Level Medical Providers

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Scope of practice’ stories vary according to state laws

One of the interesting stories to watch in the coming months in the states is the fight over “scope of practice.” That means: who gets to do what, and under whose supervision. It basically pits doctors against other health care providers — nurses, nurse practitioners, physician assistants, etc. They are sometimes called “extenders” or “non-physician providers.” (There are also big fights within dentistry.)

Dental Therapists [Emerging New Providers?]

The PP-ACA

These fights would heat up even without the Affordable Care Act — you’ve heard about the shortage of primary care physicians and you know there is an aging population that is going to need access to primary care. Throw in the health care law — millions of newly insured people entering the system — as well as delivery system reforms and care innovations that encourage more primary care, care coordination and team-based medicine that invites a larger role from those “extenders.”

Role of Retail Medical Clinics

Association of Health Care Journalists

Joanne Kenen, AHCJ’s health reform topic leader, writes about the questions and issues to be addressed and offers some resources to help reporters follow the story in their own communities. In a blog post tomorrow, she will point to two articles that have been done about the role nurses, physician assistants or other providers can have in providing primary care in underserved areas.

Next Generation Physician Recruitment

Conclusion

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Update on Health Information Exchanges [HIEs]

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A Snapshot as Deadlines Approach

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The federal health law [PP-ACA] gives states the option of creating health insurance exchanges [HIEs] through which residents can purchase coverage.

Now, with a November 16 deadline for states to declare their readiness to build an exchange, most states are expected to let the feds take over by default–only 15 states, and the District of Columbia, have created a health insurance exchange thus far.

Conclusion

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Where the Presidential Candidates Stand on Medicare and Medicaid

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The Big Picture View

By Suevon Lee ProPublica, Sept. 14, 2012, 2:26 p.m.

Medicare and Medicaid, which provide medical coverage for seniors, the poor and the disabled, together [1]make up nearly a quarter [1] of all federal spending. With total Medicare spending projected to cost [2] $7.7 trillion over the next 10 years, there is consensus that changes are in order. But what those changes should entail has, of course, been one of the hot-button issues [3] of the campaign.

With the candidates slinging charges [4], we thought we’d lay out the facts. Here’s a rundown of where the two candidates stand on Medicare and Medicaid:

THE CANDIDATES ON MEDICARE

Big Picture

Earlier this year, the Medicare Board of Trustees estimated [5] that the Medicare hospital trust fund would remain fully funded only until 2024. Medicare would not go bankrupt or disappear, but it wouldn’t have enough money to cover all hospital costs.

Under traditional government-run Medicare, seniors 65 and over and people with disabilities are given health insurance for a fixed set of benefits, in what’s known as fee-for-service [6] coverage. Medicare also offers a subset of private health plans known as Medicare Advantage, in which roughly one-quarter [7] of Medicare beneficiaries are currently enrolled. Obama retains this structure.

The Obama administration has also made moves that it says would keep Medicare afloat. It says the Affordable Care Act would extend solvency [8] by eight years, mainly by imposing tighter spending controls on Medicare payments to private insurers and hospitals.

In contrast, Rep. Paul Ryan, Mitt Romney’s running mate, has proposed a more fundamental overhaul of Medicare, which he says [9] is on an “unsustainable path.” On his campaign website [10], Romney says that Ryan’s proposals “almost precisely mirrors” his ideas on Medicare. But he’s been fuzzy on other aspects of the plan.

A Romney-Ryan administration would replace a defined benefits system with a defined contribution system [11] in which seniors are given federal vouchers to purchase health insurance in a newly created private marketplace known as Medicare Exchange. In this marketplace, private health plans, along with traditional Medicare, would compete for enrollees’ business. These changes wouldn’t start until 2023, meaning current beneficiaries aren’t affected – just those under 55.

Under the Romney-Ryan, the vouchers would be valued [12] at the second-cheapest private plan or traditional Medicare, whichever costs less. Seniors who opt for a more expensive plan would pay the difference. If they choose a cheaper plan, they keep the savings.

Who’s Covered

In the current system, people 65 and over are eligible for Medicare, which Obama has said he would keep [13] for now.

Romney has proposed [14]raising the eligibility age for Medicare beneficiaries from 65 to 67 in 2022, then increasing it by a month each year after that. In the long run, he would index [15] eligibility levels to “longevity.” Ryan’s budget plan proposes [16] raising Medicare eligibility age by two months a year starting in 2023, until it reaches 67 by 2034.

Many others looking to keep Medicare solvent have also proposed [17]raising the age of eligibility.

The Congressional Budget Office estimates [18]that raising the minimum age from 65 to 67 would reduce annual federal spending by 5 percent.But it would also result in higher premiums and out-of-pocket costs for seniors who would lose access to Medicare.

Obama’s health care law also adds [19] some benefits for seniors, such as annual wellness visits without co-pays, preventive services like free cancer screenings and prescription drug savings.

Proposed Savings

The Affordable Care Act is projected to reduce Medicare spending by $716 billion over the next 10 years. These reductions, as detailed [20] by Washington Post’s Wonkblog, will come mostly from reducing payments to hospitals, nursing homes and private health care providers.

While Ryan criticized [21] such spending cuts in his speech at the Republican National Convention, his own budget proposed [22] keeping these reductions.

“The ACA grows the trust fund by giving more general revenue to the Treasury, which then gives the trust fund bonds. But it then uses the money from those bonds to expand coverage for low- and middle-income people,” explains [23] Dylan Matthews on Washington Post’s Wonkblog.

Romney hasn’t really come up with a solid answer: he previously said he would restore [24] the $716 billion savings that the health care law imposes. Per this New York Times story [24], the American Institutes for Research calculates this would increase premiums and co-payments for Medicare beneficiaries by $342 a year on average over the next 10 years.

For more on where the candidates stand on the $716 billion, the private health policy Commonwealth Fund offers this helpful explanation [25].

Caps on Spending

Both Obama and Ryan have set an identical target rate [26] that would cap Medicare spending at one-half a percentage point above the nation’s gross domestic product.

But they have different ideas on mechanisms to achieve it.

The Affordable Care Act establishes a 15-member Independent Payment Advisory Board [27] that, starting in 2015, would make binding recommendations to reduce spending rates. As Jonathan Cohn points out [28] in the New Republic, the commission is prohibited from making any changes that would affect beneficiaries.

Ryan has proposed hard caps on spending and derided [29]this panel of appointed members as “unelected, unaccountable bureaucrats.” When laying out his plan in a 2011 memo [30], Ryan wrote that to control spending, “Congress would be required to intervene and could implement policies that change provider reimbursements, program overhead, and means-tested premiums.”

Romney hasn’t stated [31] clear proposals for imposing a cap on spending.

THE CANDIDATES ON MEDICAID

Big Picture

Though, it’s far less discussed [32] on the campaign trail, Medicaid actually covers more people than Medicare. The joint federal-state insurance program for the poor, the disabled, and elderly individuals in long-term nursing home care currently covers about 60 million Americans. The Affordable Care Act hasexpanded [33] Medicaid coverage further. Beginning 2014, Medicaid will include [34]people under 65 with income below 133 percent of the federal poverty level (roughly $15,000 for an individual, $30,000 for a family of four). This was estimated [35] to cover an additional 17 million Americans as eligible beneficiaries.

In June, however, the U.S. Supreme Court ruled [36] that states could opt out of the Medicaid expansion. A ProPublica analysis estimated [37] that the 26 states that challenged the health care law, and thus may possibly opt out, would account for up to 8.5 million of those new beneficiaries.

Romney and Ryan would overhaul this current system by turning Medicaid into a system of block grants [38]: the federal government would issue lump sum payments to the states, who would determine eligibility criteria and benefits for enrollees. These grants would begin in 2013.

Effects on spending

The Congressional Budget Office estimates [39] that Medicaid expansion under the new health care law would cost an additional $642 billion over the next 10 years.

Under the Ryan plan, federal Medicaid grants would be adjusted only for inflation, but not health care costs, which grow at a much higher rate. The CBO estimates [40] Ryan’s plan would save the federal government $800 billion over the next 10 years. Another study conducted by Bloomberg News shows that the block-grants could decrease Medicaid funding by as much as $1.26 trillion [41] over the next nine years.

Actual Impact

The New York Times points out [42] that more than half of Medicaid spending goes toward the elderly and disabled. An Urban Institute analysis estimates [43] the Ryan plan would result in 14 million to 27 million fewer people receiving Medicaid coverage by 2021.

Assessment

Though rarely mentioned by any of the candidates, Medicaid costs are soaring to cover the elderly who require long-term nursing care. As the Times’ details [44] how, states saddled by high Medicaid costs have begun turning to private managed care plans to blunt the cost.

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CBO Director Elmendorf on Debt and Taxes

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A CBO Political Review

By Children’s Home Society of Florida Foundation

The nonpartisan Congressional Budget Office (CBO) is responsible for providing Congress with financial estimates for future budget and tax policies. CBO Director Douglas Elmendorf testified before the Budget Committee of the House of Representatives on June 6.

Elmendorf started by noting that the public federal debt for the past 40 years has averaged 38% of the economy. At the end of 2008, the public debt was 40% of gross domestic product (GDP). By the end of 2012, the public debt will be 70% of GDP.

Elmendorf pointed out that there are two major trends that will substantially impact the federal budget. First, there are 78 million baby boomers that will be retiring and receiving benefits from Social Security and Medicare. Second, the cost of healthcare for the past decade has been increasing more rapidly than the general inflation rate. He suggests that this increasing cost for healthcare is going to continue for the foreseeable future.

Elmendorf then offered two scenarios for the future. He called these the “baseline scenario” and the “alternative scenario.”

Baseline Scenario

The baseline scenario assumes that the current law will be applicable. On January 1, 2013, the existing tax cuts will expire. In addition to higher tax rates, many individuals will be subject to alternative minimum tax. Finally, the 3.8% tax under the Affordable Care Act will apply starting in 2013.

With the substantial tax increases under the baseline scenario, federal tax revenue increases to 24% of the economy by the year 2037. Elmendorf noted that this would be the highest level of taxation since World War II. Under this scenario, the increasing tax revenue permits debt to be reduced from the current 70% to 53% of GDP by 2037.

The alternative scenario assumes that Congress will follow the pattern of the past four years. The tax cuts enacted in 2001 and 2003 will be extended. The alternative minimum tax exemptions will be indexed. The $5.12 million applicable exclusion amount for gift and estate taxes will continue (with indexed increases in future years). Medicare payment rates for physicians will continue to increase. This last provision has been called the “Doc Fix” in Washington. Finally, federal budgets will continue with the same general provisions that exist today.

Under the alternative scenario, the increasing deficits lead to public debt of 90% of GDP by 2022. With the rising expenditures for the baby boom generation, the public debt increases to 200% of GDP by 2037.

Elmendorf Opines

Elmendorf noted that many economists believe that this large debt may lead to creation of fewer new jobs. He suggested that it will be necessary to increase revenue and decrease spending substantially from projected levels to avoid a large increase in the national debt. He did not specify how this should be accomplished.

Assessment

Chairman of the Federal Reserve Ben Bernanke also testified before Congress this week. He pointed out that January 1 is a “fiscal cliff” that could have great impact on the nation. Bernanke believes that the scheduled increase in taxes and reduction in spending should be spaced out over time to avoid a dramatic impact in January. However, he also declined to offer any advice on specific ways to increase taxes or cut spending.

Editor’s Note: These discussions in Congress are preparations for the legislative session that will occur following the November election. Congress is debating the combination of tax increases and budget cuts to pass this year. In addition, preparations are being made for a major tax reform act in 2013.

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Happy Birthday PP-ACA

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What if You Threw a Party – and Nobody Came?

Assessment

Two year anniversary [2010-2012].

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The ACA and Rising Healthcare Costs?

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Effects of Affordable Care Act on Private Health Care Costs Remain to be Seen
[By Staff Reporters]
###
The latest data on economic growth shows the American economy spent the last quarter growing at a rate equal to 2.5 percent a year. That’s neither recession-level bad nor full employment recovery-level good, but it’s worth diving into the numbers to see exactly what’s driving this slow expansion.
###
A significant part of the growth came from personal spending on health care as insurance premiums continue to rise, meaning a lot of that growth wasn’t very productive. That health care costs are rising—and rising faster than most other expenses—is a problem that businesses and policymakers have struggled with for years: It’s the major cause of federal budget deficits and the reason behind the health care law passed in 2010. While the effects of the Affordable Care Act on private health care costs remain to be seen—many of its provisions will not go into affect for another two years—health care economists like Harvard’s David Cutler say it draws on nearly every idea that exists to lower costs.
###
But, Cutler adds that while we wait for pilot programs to succeed and scale or fail, more changes to the system—including a public insurance option and further incentives for health providers to reform delivery—should be on the table.While policymakers in Washington and state capitals wait on politics and legal challenges to the 2010 law, consumers can take action themselves to lower costs. Innovative health care companies are coming up with new ways to make cost savings easier to find.

infographic, healthcare, politics, business, cost, transparency, GOOD

Source: Simplee

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Controlling Health Care Spending [An NIHCM Foundation Webinar]

The Imperative to Act and Diverse Views of the Road Forward

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The U.S.now spends $2.5 trillion annually on health care, accounting for well over 17 percent of GDP and growing rapidly with challenging fiscal consequences. Despite the imperative to control spending, we face much uncertainty about how to move to a more sustainable path.

Political opposition threatens implementation of the Affordable Care Act, and many of its cost-control measures are still unproven. A long-term fix for Medicare physician payment remains elusive. The trigger mechanism activated by the failure of the Super Committee is poised to affect myriad health programs, but decisions on the specific cuts await sure-to-be intense congressional negotiations.

And, the many ideas for entitlement reform that were advanced during deficit reduction talks continue to generate much debate but little consensus.

Topics

To shed light on these complex issues, this webinar will feature leading health policy experts discussing topics including:

  • health spending growth and the implications for government budgets, employers and individuals
  • the societal trade-offs we face as health spending grows and as we think about ways to control spending
  • alternative viewpoints on the viability of cost control approaches now being tried and the most promising options for the future.

Assessment

Visit NIHCM Foundation’s website to view an agenda and additional resources on health care spending. And, please register by noon (EST) on February 1st.

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Accountable Care Organizations are Here

The Final Federal Guidelines

By Garfunkel Wild PC

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The much anticipated final federal regulations on accountable care organizations (ACOs) were published on October 20th, 2011. The Affordable Care Act created ACOs to deliver seamless, high quality care to traditional fee-for-service Medicare beneficiaries while reducing the cost of care to those beneficiaries. If successful, ACOs will receive a portion of the shared savings they achieve for the Medicare program.

ACO Workgroup 

The Garfunkel Wild ACO Workgroup is in the process of analyzing these final regulations, and we will be hosting a webinar in the near future to discuss ACO participation and other ways providers can move towards collaborative care.

Final Regulations

In reviewing the final regulations, it is clear CMS took public comments to their proposed regulations seriously and made significant changes that should strengthen the ACO program. Some of these changes include:

  • Allowing ACOs to participate in an upside shared savings track (without being subject to downside losses) for the first three years of participation
  • Expanding the definition of participants eligible to form ACOs to include federally qualified health centers (“FQHCs”)
  • Reducing by about half the number of quality measures ACOs have to report
  • Permitting ACOs to share in first dollar saved once a minimum savings rate is achieved
  • Creating more flexibility for start dates for ACOs beginning in 2012
  • Removing EHR readiness as a condition of participation
  • Revising the process of assigning beneficiaries to ACOs from a pure retrospective process to a prospective process that includes retroactive adjustments

Assessment

Also published with the CMS final regulations were interim final regulations published by the Office of Inspector General addressing the waiver of the application of federal fraud and abuse laws; a final policy statement issued by the Federal Trade Commission and Department of Justice outlining the agencies’ antitrust enforcement policies for ACOs, and an IRS Fact Sheet regarding tax exempt organizations participating in the Medicare Shared Savings program.

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What Kind of [Physician] Entrepreneur Are You?

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[Medical] entrepreneurs, doctors and nurses, clinics and small-to-medium size healthcare business are on the forefront of  job creation in the United States because of the Affordable Care Act [ACA] of 2010.

And so, we now preview this infographic to celebrate the entrepreneur, their styles, and to investigate the data behind startup growth. Hopefully, it will encourage the next generation of physician-entrepreneurs.

Who knows, there just may be the next Steve Jobs MD out there!

Source: BizSugar

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IRS and the Affordable Care Act

Proud of Track Record

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IRS Commissioner Douglas Shulman testified before the Senate Appropriations Subcommittee on Financial Services and General Government on June 8 2011. He stated, “Mr. Chairman, the IRS is also proud of its implementation track record over the past few years.”

IRS Successes

There are multiple areas the IRS views as significant successes:

1. Collecting Taxes on International Funds – The IRS created a “landmark deal” with the government of Switzerland and has recovered substantial amounts of income tax. Over 15,000 taxpayers participated in the Voluntary Disclosure Program (VDP). In addition, 4,000 other taxpayers have voluntarily disclosed bank accounts throughout the world. The bank accounts have produced substantial taxes and penalties for the IRS. In addition, the overseas funds will be subject to U.S. taxes in the future.

2. Preparer Tax Identification Numbers (PTIN) – The PTIN now is required for all tax return preparers. Over 700,000 preparers have registered. This enables the IRS to monitor preparers’ qualificatons and to identify preparers who are committing tax fraud.

3. Telephone Support – The IRS has a goal of 93% toll-free tax law accuracy. The toll-free customer satisfaction rating for the IRS the past year was 92%.

4. Website – http://www.irs.gov has been very popular with taxpayers. There were 305 million webpage visits to the site in the past year. This is up 14% over the prior year. The “Where’s My Refund?” electronic tracking tool also increased in popularity.

5. Smart Phone – The IRS unveiled its first application for smart phones called “IRS2Go.” This application allows taxpayers with smart phones to check the status of tax refunds and obtain additional information.

6. eFiling – Each year, over 100 million taxpayers use the eFile Program. The IRS has been able to close five of 10 sites that previously were processing paper returns because of the efficiency of the eFile System.

IRS Changes

The IRS is also preparing for major increased responsibility that will be required under the Affordable Care Act (ACA). Under the wide-ranging healthcare law, there will be major changes for most Americans. The majority of these changes will affect individuals in 2014:

1. Premium Assistance Tax Credit – Individuals with lower and moderate incomes may qualify for a healthcare tax credit.

2. Advanced Premium Payments – Individuals who qualify for the healthcare tax credit may receive advance monthly payments to their healthcare insurance provider.

3. Reconciling Tax Credits – For those individuals who receive advance healthcare payments to providers, their tax return will necessarily require a reconciliation of the tax credits with the advance payments. It appears that the first date for this return will be April 15, 2015. IRS forms will include a reconciliation for the 2014 tax credits.

4. Individual Coverage Requirement – For individuals in 2014, there will be a mandatory coverage requirement. Those without coverage will be required to make a payment to the IRS.

5. Employer Payments – For employers who are required to participate in the healthcare programs for employees, they will need to report that participation or make an employer payment to the IRS.

ACA

Editor’s Note: Your editor and this organization take no position with respect to IRS practices and the comments of IRS Commissioner Shulman. This information is offered as a service to our readers.

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On the Anniversary of the Affordable Care Act [A Video]

An Audio-Video Review One Year Later

By Staff Reporters

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Reforms under the Affordable Care Act have brought an end to some of the worst abuses of the insurance industry. These reforms have given Americans new rights and benefits, by helping more children get health coverage, ending lifetime and most annual limits on care, allowing young adults under 26 to stay on their parent’s health insurance, and giving patients access to recommended preventive services without cost.

Link: http://www.healthcare.gov/?gclid=CO72rYyUkKgCFeM85QoddjY3yg

Other Benefits

Many other new benefits of the law have taken effect, including 50% discounts on brand-name drugs for seniors in the Medicare “donut hole,” and tax credits for small businesses that provide insurance to employees. More rights, protections and benefits for Americans are on the way through 2014.

Assessment

See major parts of the law on this interactive timeline, or read the Patient’s Bill of Rights.

And, find out how the Patient Protection and Affordable Care Act [ACA]  provides better benefits and better health.

Video Link: http://www.healthcare.gov/law/introduction/index.html

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Assessing the Affordable Care Act

Comment Period of Solicitation

By Staff Reporters

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Last week marked the first anniversary of the Affordable Care Act (ACA) being signed into law by President Obama, and one year into the new era of health care reform it’s clear that Americans remain divided in their views on the ACA.

Depending on the source, polls show the public remains confused about many aspects of the law, with mixed support for several provisions and strong opposition to the individual mandate and other parts of the ACA.

Legal Challenges

With several lawsuits challenging the constitutionality of the ACA, governors and state legislators vowing to refuse funding to implement certain ACA programs, and Congress poised to revise or repeal some or all of the law, opponents of the ACA are hopeful that they will have the chance to go back to the drawing board to craft reform legislation more to their liking.

Supporters

Meanwhile, supporters are pointing to widespread public approval of many of the insurance reforms in the law and claiming that once the health exchanges and other major components of the ACA take effect, public support will continue to grow.

The ME-P Wants to Know:

  • Has your support for the ACA changed at all in the year since it was signed into law?
  • Are you pleased with the outcomes to date of the Affordable Care Act?
  • Will the major provisions that have not yet been implemented be able to fulfill the stated goal of covering more patients while reducing overall health care costs?
  • If you are not a supporter of this law, which sections are in most need of revision? Or are you in favor of complete repeal of this law?
  • If you prefer repeal, what alternative approach to health care reform do you favor?

Assessment

Please opine in the comment box below.

Conclusion

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Healthcare Reform at a Glance

A One-Stop-Look-See with Comparisons

By Staff Reporters

Link: Health-Care-Reform-Comparison-in-Brief

[Courtesy: BuckConsultants]

Conclusion

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About HealthCareAndYou.org

What it is – How it works?

By Staff Reporters

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At a time when many Americans are confused about the healthcare overhaul law, a coalition of groups representing doctors, nurses, pharmacists and consumers has launched a website to answer questions about the Affordable Care Act.

The new website – HealthCareandYou.org – doesn’t delve into the politics behind the law, but spells out what the law means to consumers, depending on the state they live in and their age. The website also provides a timeline, telling consumers when different parts of the law go into effect.

The Site

According to the site, The Affordable Care Act is a health care law that aims to improve our current health care system by increasing access to health coverage for Americans and introducing new protections for people who have health insurance.

If you have health insurance, you will benefit from steps to stop insurance companies from cancelling your coverage if you get sick. The law will also require insurance plans to cover your out-of-pocket costs for many proven preventive and screening services, such as colonoscopies and mammograms, to catch problems at their earliest, most treatable stages.

Your job might not offer health insurance. Or, maybe you have been denied coverage because of a pre-existing condition such as asthma or cancer. The law now offers health plans for people with pre-existing conditions who have had trouble finding care. And it will increase access to coverage for more Americans in 2014.

The law helps small businesses pay for health insurance for their employees. And it supports programs that will help increase the number of primary care physicians, nurses, physician assistants and other health care professionals.

Assessment

It is important to understand what the law means for you. Check out what changes have already taken place and learn more about what is happening in your state.

Link: http://www.healthcareandyou.org

Conclusion

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Will the PPACA be Repealed [A Poll]?

Will Obama Care, or the Affordable Care Act [ACA], be repealed before 2014?

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Understanding Hospital Denial Management

An Essay on Rejected Medical Claims and Invoices

By Ross Fidler

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Typically, denied and rejected hospital claims quickly surface as a source of multi-millions  of dollars in revenue leakage and unnecessary expense.

Struggling Payers

Payers have been struggling for decades with increased hospital costs; and the Affordable Care Act of 2010 [ACA] will only increase the stress. Hospitals now thoroughly inspect claims for errors and have become adept at using their rules to deny and delay claims.

For example, Zimmerman reported the denied percentage of gross charges climbed from 4% in 1990 to 11% in 2001; even more by unaudited 2010. In contrast, providers typically lack the tools to aggressively manage current denied claims and prevent future ones.

Denial Tracking

Without denial tracking, an organization may not recognize the heavy financial impact of denied claims. One report www.HARA.com indicates that bad debt and gross days are declining. However, a majority of medical providers write off denials as contractual allowance, distorting the numbers but not the resulting lower margins and reduced cash. H*Works reports that the typical 350-bed hospital loses between $4 million and $9 million each year in earned revenue from denials and underpayments (assume $103 million annual gross revenue and 40% contractual allowance), thru 2009. Recouping lost revenue from denials and underpayments will, according to H*Works, increase an organization’s operating margin by 2.6% www.advisoryboardcompany.com

Industry Benchmarks

Industry estimates report that at least 50% of denials are recoverable and 90% are preventable with the appropriate workflow processes, management commitment, strong change leadership, and the correct technology. H*Works estimates that for a revenue capture of $3 million from denials and underpayments, the recovery infrastructure costs are only about 3%.

Assessment

With all this in mind, better management of rejections and denials, as well as the information necessary to resolve and prevent them, surfaces as probably the best strategy to improving hospital financials. By streamlining the revenue cycle, managing rejections and denials proves to be less expensive and to provide faster returns than initiating new services.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. How does this ME-P relate to the private medical practitioner or smaller clinic? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Integration as a Competitive Strategy in Healthcare Reform

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Understanding Horizontal and Vertical Integration

[By Robert James Cimasi MHA, AVA, CMP™]

Health Capital Consultants, LLC

St. Louis MO

Several potential benefits are associated with the integration of companies in the same or related industries. These synergistic benefits depend upon the type of companies and their integration strategies, as well as whether the anticipated transaction is a manifestation of horizontal consolidation or vertical integration.

Horizontal consolidation is “the acquisition and consolidation of like organizations or business ventures under a single corporate management, in order to produce synergy, reduce redundancies and duplication of efforts or products, and achieve economies of scale while increasing market share.”

Vertical integration involves the joining of organizations that are fundamentally different in their product and/or services offerings, i.e., “the aggregation of dissimilar but related business units, companies, or organizations under a single ownership or management in order to provide a full range of related products and services.”

Healthcare Locality

As healthcare is essentially a local business, horizontal integration within the local market has been limited by antitrust laws. Therefore, in order to control greater market share, a hospital’s strategy has required vertical integration. Healthcare providers and organizations have placed much emphasis on the benefits of vertical system integration in the last 10 or more years, whereby a single healthcare organization owns all of the elements needed to provide a continuum of care for all the needs of a given patient population. Much of this effect has stemmed from the desire to be able provide a “continuum of care,” i.e., to be able to single source contract for the healthcare needs of a patient population and to profit from implementing preventative healthcare and utilization management measures. The relative economic benefits of this type of vertical integration versus horizontal integration strategies remain the subject of great debate in academia and among the strategic managers of other industries. One lesson that may be drawn from other industries is that neither of these forms of integration is universally applicable or beneficial to every organization and market. There are also great costs to integration, which must be outweighed by the benefits. Each specific benefit should be identified and researched when examining the probable effects of integration, consolidation, mergers or divestitures as a competitive strategy.

Rapid Consolidation Periods

During the rapid consolidation and integration of healthcare providers, insurers, and purchasers, in recent years, there was much discussion of a concept termed “managed competition.” This term appears to have been an outgrowth of the term “managed care” and was viewed by many as the logical result of the integration of healthcare markets nationally. The concept of “managed competition” apparently related to an idealized vision of competition between very large, integrated providers (organized into integrated delivery systems), large, national managed care payors, and purchasing group coalitions that could achieve a balance of power between these interacting groups. However, many believe that the result of such an arrangement would more likely be a reduction in competition between members of each of these three groups and the creation of powerful bureaucratic and intractable organizations. Further, this scenario does not appear to effectively remove any of the existing barriers to competition and therefore doesn’t introduce any additional incentives for innovation to produce value for consumers which, of course, is the “sine qua non” of competition.

Disadvantages

The disadvantages of integration are becoming apparent, including:

  • the loss of autonomy;
  • increased bureaucracy;
  • difficulty in aligning incentives; and
  • other failed expectations.

Many organizations that sought strategic advantage through integration are ending those arrangements and now divesting acquired organizations.

Other Industries

In other industries, specialized providers of goods and services are increasingly able to offer customers a full range of services through affiliation and affinity with other independent specialists, made more seamless through the use of increasingly sophisticated communications and computing technologies. However, this move to “dis-integration” must also be carefully considered if organizations are not to make further costly organizational changes inspired by a rushed judgment of general market trends.

Porter Speaks

Michael Porter (et al.) wrote in the Harvard Business Review that,

In industry after industry, the underlying dynamic is the same: competition compels companies to deliver increasing value to customers. The fundamental driver of this continuous quality improvement and cost reduction is innovation. Without incentives to sustain innovation in health care, short-term cost savings will soon be overwhelmed by the desire to widen access, the growing health needs of an aging population, and the unwillingness of Americans to settle for anything less than the best treatments available. Inevitably, the failure to promote innovation will lead to lower quality or more rationing of care — two equally undesirable results.

Assessment

Therefore, if the emerging healthcare industry is to respond successfully to the Affordable Care Act [ACA] and related market pressures to reduce costs, then the healthcare market must first create incentives for innovation. The barriers to competition cannot include barriers to innovation as many do now. Physicians, nurses, healthcare purchasers, managers, and legislators must ensure innovation takes the forefront of any reform, if it is to be effective.

Conclusion

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Update on Senior Donut Hole Rebate Checks

More Seniors to Receive One-Time Donut Hole Rebate Checks

By Staff Reports

Medicare Beneficiaries Whose High Prescription Drug Costs Have Put Them in the Medicare Part D Donut Hole to Receive $250 Rebate Checks as a Result of the Affordable Care Act

WASHINGTON – The next round of more than 300,000 eligible seniors who have entered the Medicare Part D “donut hole” this year have been mailed their tax-free, one time rebate check for $250, U.S. Department of Health and Human Services Secretary Kathleen Sebelius announced recently. These one-time rebate checks are the first step in closing the prescription drug coverage gap under the Affordable Care Act. The first round of checks were distributed in the middle of June. As qualifying Medicare recipients “fall into the donut hole,” they will be sent a rebate check by Medicare.

“Seniors and other Medicare recipients in the Medicare donut hole are struggling to afford the medications they need and their basic living expenses. Seventy percent of our first round of these $250 rebate checks were cashed within a week of eligible Medicare recipients receiving them; so, we know that folks really need some help,” said Secretary Sebelius. “The Affordable Care Act starts to close the donut hole this year, giving much-needed relief to millions of seniors. In 2011, the Affordable Care Act takes an additional step for Medicare beneficiaries in the donut hole by providing them with a 50 percent discount on their brand name medications. Every year from 2012 until 2020, the Affordable Care Act will take progressive steps to close the donut hole.” 

“Seniors also need to know that they will just receive their check at their usual address – they don’t have to take any extra steps,” said Centers for Medicare & Medicaid Services Deputy Administrator and Director for the Center for Medicare, Jonathan Blum. “And they should never give out their personal information. If someone asks for your personal Medicare information over the phone who isn’t a trusted resource like Medicare, please don’t provide it. Seniors or family members should contact us at 1-800-MEDICARE to report any of these types of calls or go to www.stopmedicarefraud.gov to learn more about efforts to fight fraud and scams against seniors.”

On Thursday, July 8th, at 2:00 p.m., HHS Secretary Kathleen Sebelius joined local officials in Manchester, N.H., for a forum with senior citizens to discuss the rebate checks and other benefits of the Affordable Care Act as well as efforts to fight Medicare fraud.

The $250 checks are being mailed to those Medicare beneficiaries who entered the Medicare Part D donut hole, also known as the coverage gap, in the second quarter of 2010 and are not eligible for Medicare Extra Help (also known as the low-income subsidy or LIS) or enrolled in a qualified retiree prescription drug plan. The donut hole is the period in the prescription drug benefit in which the beneficiary pays 100 percent of the cost of their drugs until they reach the catastrophic coverage phase.

About Medicare Extra Help

Medicare Extra Help provides assistance to seniors so they don’t face higher costs or a coverage gap in their prescription drug coverage. Qualifying Medicare beneficiaries who entered the donut hole in the first quarter of 2010 who were not eligible for Medicare Extra Help received a check in the first round of rebates mailed June 10th. Going forward, a check for qualifying beneficiaries newly reaching the donut hole in 2010 will be mailed monthly.

Assessment

More information about the “donut hole” rebate checks, please contact www.HealthCare.gov or 1-800-MEDICARE. For further questions about Extra Help (or the LIS) benefit under Part D, please contact the Social Security Administration at www.ssa.gov.

Conclusion

Doctors and FAs – how will this rebate assist your patients and clients? Feel free to comment and review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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