Budget Deal’s Big Health Care Changes: Middle Class Subsidies On Covered California, And A State Individual Mandate

Image result for Budget Deal’s Big Health Care Changes: Middle Class Subsidies On Covered California, And A State Individual Mandate imagesSource: capital public radio

California lawmakers are expected to approve a state budget Thursday that would make the state the first in the nation to help middle-class consumers purchase health insurance on Covered California, the state’s health insurance exchange created under the Affordable Care Act.

Gov. Gavin Newsom’s Department of Finance and Covered California both say the $429 million in subsidies are still being designed and calculated. But, depending on factors that include location and cost of health insurance coverage, the average subsidy will be more than $100 a month.

But to help pay for the new subsidies, the budget crafted by Newsom and Democratic legislative leaders would create a state health insurance mandate, replacing the federal fine for not carrying insurance that was terminated two years ago.

That means starting next year, if you can afford health insurance but choose not to get it, you’ll be charged a $695 penalty or 2% of your household income — whichever is larger — when you pay your taxes. The fine is half as big for minors without insurance.

The subsidies, which will become available in January, are targeted at Californians who earn between 400 and 600% of the federal poverty level. That’s between roughly $50,000 and $75,000 for individuals and between $103,000 and $155,000 for families of four.

Under the Affordable Care Act, consumers who earn more than 400% of the federal poverty level don’t get any help purchasing health insurance on the individual market.

Some middle class Covered California consumers, could save up to hundreds of dollars a month, said Executive Director Peter Lee

“People that under the Affordable Care Act got no help — middle-class Californians paying a huge share of their income towards premiums — are going to get big assistance to make health care truly affordable for them,” Lee said.

There’s also money in the state budget deal for lower-income Covered California consumers, though not as much.

“California is saying, let’s take the Affordable Care Act and build on it, and make health care more affordable for middle-class Californians, and even more affordable for people already getting subsidies — because health care is too expensive,” Lee said.

But Republican Assemblyman Jay Obernolte questions whether the proposal will actually work and says the state should “be very cautious.”

“I understand and agree with the premise, which is to make sure that more Californians are covered by health insurance,” Obernolte said. “Unfortunately, it’s not clear to me that there’s any statistical evidence that extending these subsidies to the income ranges the governor’s proposing would have that effect.”

Under the Covered California subsidies and individual mandate provisions of the budget deal — some of which have yet to emerge publicly — the state is projected to bring in more than $1 billion over a three-year period.

That revenue, along with additional permanent spending from California’s general fund, will fund new state aid for consumers at three different income levels starting in January.

Here’s how the $429 million in state spending on the new Covered California subsidies will be broken down in 2020:

  • $10 million in subsidies for a relatively small group of Californians who earn between 0 and 138 percent of the federal poverty level — up to about $17,000 a year for individuals — yet must obtain insurance via Covered California because they’re not eligible for MediCal. Their subsidies will bring their monthly premiums down to $0.
  • $74 million in additional state aid for Californians who earn between 200 and 400 percent of the federal poverty level — between roughly $25,000 and $50,000 a year for individuals — on top of their existing federal subsidies. That’s projected to reduce an average consumer’s premium by a further $10 a month.
  • $345 million in subsidies for middle-class consumers who earn between 400 and 600 percent of the federal poverty level — between about $50,000 and $75,000 a year. Those Californians, who are not eligible for any subsidies under the Affordable Care Act, are projected to save an average of at least $100 a month on their premiums.

Lee says health care costs for all Californians are projected to drop between 3 and 5 percent because the individual mandate will broaden the insurance pool.

New Final Rule Lets Employees Use HRAs to Buy Health Insurance

Image result for New Final Rule Lets Employees Use HRAs to Buy Health Insurance imagesSource: SHRM

A newly issued regulation could transform how employers pay for employee health care coverage, its advocates claim, by letting employers use pretax dollars to subsidize employee premiums in the individual health insurance market.

On June 13, the U.S. departments of Health and Human Services, Labor and the Treasuryissued a final rule allowing employers of all sizes that do not offer a group coverage plan to fund a new kind of health reimbursement arrangement (HRA), known as an individual coverage HRA (ICHRA). The departments also posted FAQs on the new rule.

Starting Jan. 1, 2020, employees will be able to use employer-funded ICHRAs to buy individual-market insurance, including insurance purchased on the public exchanges formed under the Affordable Care Act (ACA).

Under IRS guidance from the Obama administration, IRS Notice 2013-54, employers were effectively prevented from offering stand-alone HRAs that allow employees to purchase coverage on the individual market.

“Using an individual coverage HRA, employers will be able to provide their workers and their workers’ families with tax-preferred funds to pay all or a portion of the cost of coverage that workers purchase in the individual market,” said Joe Grogan, director of the White House Domestic Policy Council, during a June 13 conference call. “The departments estimate that once employers fully adjust to the new rules, roughly 800,000 employers will offer individual coverage HRAs to pay for insurance for more than 11 million employees and their family members, providing them with more options for selecting health insurance coverage that better meets their needs.”

The new rule “is primarily about increasing employer flexibility and worker choice of coverage,” said Brian Blase, special assistant to the president for health care policy. “We expect this rule to particularly benefit small employers and make it easier for them to compete with larger businesses by creating another option for financing worker health insurance coverage.”

“Employers and employees alike will have more options for health care coverage as a result of the new rules,” said James A. Klein, president of the American Benefits Council, which represents employers that sponsor health and retirement plans.

The final rule is in response to the Trump administration’s October 2017 executive order on health care choice and competition, which also resulted in:

New Types of HRAs

Existing HRAs are employer-funded accounts that employees can use to pay out-of-pocket health care expenses but may not use to pay insurance premiums. Unlike health savings accounts (HSAs), all HRAs, including the new ICHRA, are exclusively employer-funded, and, when employees leave the organization, their HRA funds go back to the employer. This differs from HSAs, which are employee-owned and portable when employees leave.

The proposed regulations keep the kinds of HRAs currently permitted (such as HRAs integrated with group health plans and retiree-only HRAs) and would recognize two new types of HRAs:

  • Individual coverage HRAs. Employers would be allowed to fund ICHRAs only for employees not offered a group health plan.
  • Excepted-benefit HRAs. These would be limited to paying premiums for vision and dental coverage or similar benefits exempt from ACA and other legal requirements. These HRAs are only permitted if employees are offered coverage under a group health plan sponsored by the employer.

What ICHRAs Can Do

Under the new HRA rule:

  • Employers may either offer an ICHRA or a traditional group health plan but may not offer employees a choice between the two.
  • Employers can create classes of employees around certain employment distinctions, such as salaried workers versus hourly workers, full-time workers versus part-time workers, and workers in certain geographic areas, and then offer an ICHRA to certain classes while providing traditional group coverage for other classes.
  • Employers that offer an ICHRA must do so on the same terms for all employees in a class of employees, but they may increase the ICHRA amount for older workers and for workers with more dependents.
  • Employers can maintain their traditional group health plan for existing enrollees, with new hires offered only an ICHRA.

ICHRAs that reimburse solely for individual coverage premiums “would not disqualify contributions to an HSA if the individual otherwise meets the requirements of being enrolled in a high-deductible health plan with no other disqualifying coverage,” noted Katie Keith, a former research professor at Georgetown University’s Center on Health Insurance Reforms and a contributor to the Health Affairs blog.

However, ICHRAs also can only be used to reimburse medical expenses consistent with existing HRA rules. If the ICHRA reimbursed for first-dollar cost-sharing as well as individual market premiums, it would not be compatible with an HSA, Keith explained.

Under some circumstances, ICHRAs can be used to reimburse premiums for Medicare and Medicare supplemental (“Medigap”) health insurance, she added.

If an employee buys individual health insurance outside an ACA exchange and the HRA doesn’t cover the full premium, the employer could permit the employee to pay the balance of the premium for the coverage on a pretax basis through its cafeteria plan, subject to other applicable regulations, according to the agencies’ FAQs. However, the tax code states that an employer may not permit employees to make salary reduction contributions to a cafeteria plan to purchase coverage offered through an ACA exchange.

Notice and Disclosure

The rule also includes a disclosure provision to help ensure that employees understand the type of HRA being offered by their employer and how the ICHRA offer may make them ineligible for a premium tax credit or subsidy when buying an ACA exchange-based plan.

To satisfy the disclosure requirements, the DOL issued an Individual Coverage HRA Model Notice.

The DOL also issued Individual Coverage HRA Model Attestations that employees can sign to confirm they will have individual health insurance coverage, Medicare Part A and B, or Medicare Part C while they are covered by the ICHRA.


Currently, qualified small-employer HRAs (QSEHRAs), created by Congress in December 2016, allow small businesses with fewer than 50 full-time employees to use pretax dollars to reimburse employees who buy nongroup health coverage. The new rule goes farther and:

  • Allows all employers, regardless of size, to pay premiums for individual policies through a premium-reimbursement ICHRA.
  • Clarifies that when employers fund an ICHRA or a QSEHRA paired with individual-market insurance, this will not cause the individual-market coverage to become part of an Employee Retirement Income Security Act (ERISA) plan if certain requirements are met (for instance, employers may not select or endorse a particular individual-market plan).
  • Creates a special enrollment period in the ACA’s individual market for those who gain access to an ICHRA or a QSEHRA to purchase individual-market health insurance coverage.

The legislation creating QSEHRAs set a maximum annual contribution limit with inflation-based adjustments. In 2019, annual employer contributions to QSEHRAs are capped at $5,150 for a single employee and $10,450 for an employee with a family.

The new rule, however, doesn’t cap contributions for ICHRAs.

As a result, employers with fewer than 50 full-time employees will have two choices—QSEHRAs or ICHRAs—with some regulatory differences between the two. For example:

  • QSEHRA participants who obtain health insurance from an ACA exchange and who are eligible for a tax credit/subsidy must report to the exchange that they are participants in a QSEHRA. The amount of the tax credit/subsidy is reduced by the available QSEHRA benefit.
  • ICHRA participants, however, will not be able to receive any premium tax credit/subsidy for exchange-based coverage.

“QSEHRAs have a special rule that allows employees to qualify for both their employer’s subsidy and the difference between that amount and any premium tax credit for which they’re eligible,” said John Barkett, director of policy affairs at consultancy Willis Towers Watson.

While the ability of employees to couple QSEHRAs with a premium tax credit is appealing, the downside is QSEHRA’s annual contribution limits, Barkett said. “QSEHRA’s are limited in their ability to fully subsidize coverage for older employees and employees with families, because employers could run through those caps fairly quickly,” he noted.

For older employees, the least expensive plan available on the individual market could easily cost $700 a month or $8,400 a year, Barkett pointed out, and “with a QSEHRA, an employer could only put in around $429 per month to stay under the $5,150 annual limit for self-only coverage.”

Similarly, for employees with many dependents, premiums could easily exceed the QSEHRA’s family coverage maximum of $10,450, whereas “all those dollars could be contributed pretax through an ICHRA,” Barkett said.

An Excepted-Benefit HRA

In addition to allowing ICHRAs, the final rule creates a new excepted-benefit HRA that lets employers that offer traditional group health plans provide an additional pretax $1,800 per year (indexed to inflation after 2020) to reimburse employees for certain qualified medical expenses, including premiums for vision and dental insurance, COBRA continuation coverage, and in some circumstances short-term, limited-duration insurance.

The new excepted-benefit HRAs can be used by employees whether or not they enroll in their employer’s group health plan.

The existing limited-scope HRA will continue to be available to employers along with the new excepted-benefit HRA, said Chicago-based benefits attorney Andy Anderson, who leads the health and welfare task force at law firm Morgan Lewis. “The limited-scope HRA can reimburse a smaller subset of expenses, but has no annual dollar cap on employer contributions,” he noted.

Safe Harbor Coming

With ICHRAs, employers still must satisfy the ACA’s affordability and minimum value requirements, just as they must do when offering a group health plan. However, “the IRS has signaled it will come out with a safe harbor that should make it straightforward for employers to determine whether their ICHRA offering would comply with ACA coverage requirements,” Barkett said.

Last year, the IRS issued Notice 2018-88, which outlined proposed safe harbor methods for determining whether individual coverage HRAs meet the ACA’s affordability threshold for employees, and which stated that ICHRAs that meet the affordability standard will be deemed to offer at least minimum value.

The IRS indicated that further rulemaking on these safe harbor methods is on its agenda for later this year.

State Budget Gives Health Care to Some Undocumented Immigrants. Arambula Wants to Go Further

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Source: The Sacramento Bee

Assemblyman Joaquin Arambula intends to continue pushing to expand health care options for all undocumented immigrants in California even though the state’s new $214.8 billion budget provides coverage to a fraction of them.

Arambula’s comments this week were among the first he’s made publicly since returning to work in Sacramento following his May trial in Fresno, where a jury found him not guilty of child abuse charges.

The Legislature on Thursday passed a $214.8 billion budget deal that includes $98 million to expand Medi-Cal to young undocumented adults, 19 up to 26, in the upcoming fiscal year. Gov. Gavin Newsom now has 12 days to sign or veto the bill. He can also nix parts of the budget through line-item vetoes.

The state already provides health care coverage to children under the age of 19 through legislation passed in 2016.

In early December, Arambula introduced a bill that would go further by expanding Medi-Cal coverage to all adults, regardless of immigration status.

Assembly Bill 4 made it through the Assembly, and earlier this month, was referred to the Senate’s committee on health.

But the Legislative Analyst’s Office had estimated the Medi-Cal costs to be as much as $900 million in fiscal year 2019-20. It could cost between $3 billion to $3.2 billion in general funding annually going forward, according to an Assembly Appropriations Committee analysis of the bill. There’s a companion bill in the Senate, SB 29.

Arambula said it’s estimated that one in every five residents in 31st District — which covers Fresno, Kerman, Firebaugh and Coalinga — are undocumented.

AB 4 is still moving through the legislative process, but it wasn’t included in the budget approved by lawmakers.

Despite the fact that lawmakers have already included health care for some undocumented immigrants in the budget, it’s not the end of AB 4 or Arambula’s effort to extend health care to all undocumented immigrants.

AB 4 will likely come up in policy discussions at the end of this month, and Aramubla said he will continue the debate. The bill could be amended as it continues to move forward, and Arambula said he “will work hard to get a version” through the Senate.

“But we don’t know its final version or outcome yet,” he said. “In someways, I’ve learned to take it a step at a time, and our big goal at the moment was to secure the funding for the 19-25 year-olds.”

If the bill dies this session, the lawmaker said, he’ll remain hopeful. Arambula in 2018 introduced Assembly Bill 2965, which would have also offered health care to all adults. “I plan to bring the bill back until we are able to achieve universal coverage,” he said.

The appropriations committee’s analysis estimated that out of the state’s 1.8 million undocumented adults, under AB 4 some 1.26 million of them would be eligible for Medi-Cal coverage, since income eligibility is a factor.

Securing funding to expand health care for young undocumented immigrants is a “good down payment and allows thousands of people in the Central Valley” to have access to health care — individuals who otherwise could not, he said.

“I want to be appreciative that we were able to take this first step,” he said.

Meanwhile, Arambula said he’s received a “warm reception” from his colleagues in the Capitol, and his family is also leaving the recent court case behind them. “My family is actually doing quite well — we really are,” he said.

Moderate Democrats Would Rather Talk About Health Care Than Impeachment

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Source: Bloomberg

House Speaker Nancy Pelosi is trying to draw attention away from the politically explosive topic of impeaching President Donald Trump by putting health care back at center stage for Democrats.

Pelosi said more than 140 House Democrats held home-district events on health care over the weekend. This focus is especially important for moderate Democrats eager show voters they’re trying to deliver on their campaign promises even as some of their colleagues push ahead with investigations of Trump’s business, associates and administration.

“When we won the election in November, it was health care, health care, health care,” Pelosi said Monday at an event at East Los Angeles College in her home state of California. “People said ‘why was health care so important in the election?’ It was because it was so important in peoples lives.”

Her pivot to health care comes as the party seeks to protect vulnerable House Democrats in Republican-leaning districts in 2020, with Democratic leaders wary of an impeachment inquiry that could backfire. Health policy is also an issue where Republicans have been on the defensive after trying and failing in 2017 to repeal the Affordable Care Act, which helped Democrats pick up 40 GOP seats in 2018.

Health care is a winning issue for Democrats and remains a “hearty perennial,” said Karlyn Bowman, a public opinion analyst at the American Enterprise Institute in Washington.

“They’re right to focus on it,” she added. “Impeachment isn’t the top priority for the nation. There’s no question about that.”

‘Assault on Health Care’

Pelosi also on Monday condemned what she said were Trump’s latest efforts to “dismantle” health care in America. She was referring to the president’s claim in an ABC News interview that a “phenomenal” GOP health care plan is “almost complete,” just months after Senate Republicans convinced him that such a promise would be a losing issue after the party’s 2017 health care quagmire.

“President Trump has waged an assault on health care since the start,” Pelosi said, “and continues to order the Justice Department to ask the courts to destroy protections for people with pre-existing conditions and strike down every other protection and guarantee of affordable health care for America’s families.”

A May 29-30 Harvard-Harris poll found that health care was the top issue for 36% of registered voters surveyed, making it the No. 2 issue behind immigration. While the poll didn’t explicitly ask about impeachment, corruption was a priority for only 13% of those surveyed.

Still, unlike in 2018, the health care issue risks revealing divisions among Democrats. The party was largely united in defending Obamacare and its private health care insurance exchanges last year, but now most leading presidential hopefuls and more progressive Democrats in Congress are embracing a single-payer program often described as Medicare for All.

Such proposals would end private insurance and might not appeal to the 31 House Democrats now holding seats in districts that Trump won in 2016 and are the GOP’s top targets. Republicans need to pick up 18 seats to retake the majority.

Pelosi’s Approach

Views on the Medicare for All debate are increasingly partisan, according to an April 11-16 Kaiser Family Foundation poll. The number of Republicans with a “very negative” reaction to the term Medicare for All has increased to 51% from 42% in 2017. On the other hand, the share of Democrats who have a “very positive” reaction to the term rose to 58% from 49% in 2017.

Bob Salera, a spokesman for the National Republican Congressional Committee, said Democrats could find themselves in political quicksand.

“If the socialist Democrats want to talk about health care, they should be forced to answer for their Medicare for All plan,” Salera said. “Between their extreme policies and nonstop, baseless push for impeachment, the socialist Democrats would be well advised to quickly change the subject to anything else.”

House Democrats in May approved seven health-care bills designed to shore up an Obamacare health system that is opposed by the White House. Pelosi said Monday she prefers an approach that expands on the Affordable Care Act — rather than replacing it — by raising the income threshold for subsidies and addressing cost inflation by lowering drug prices.

“We have to be smart about what we’re proposing,” Pelosi said at East Los Angeles College.

The House has held hearings, but has not advanced any bill that would move to a universal health care system, even though Medicare for All has emerged as a key issue in the party’s 2020 presidential nomination battle. Five of the seven senators vying for the nomination back a Medicare-for-All bill.

The broader issue of health care access will be a focal point in 2020 House campaigns, said Cole Leiter, a spokesman for the Democratic Congressional Campaign Committee.

“While Democrats are working every day to bring down Americans’ health care costs, make prescription drugs more affordable, and protect people with pre-existing conditions, Washington Republicans are doing the bidding of special interests and drug manufacturers, no matter the cost for everyday folks,” Leiter said in a statement. “Needless to say, there’s a reason the American people trust Democrats to improve their ability to afford their health care coverage, and don’t want Washington Republicans anywhere near their health.”

Trump Says His Healthcare Plan is on the Way in the Coming Months

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Source: FierceHealthcare

President Donald Trump said this weekend that the administration intends to unveil its long-awaited healthcare plan in the next couple of months as he gears up for a reelection bid.

Trump told ABC News in an interview Sunday that the White House already has the shape of a plan together. He declined to offer additional specifics on what might be included in the forthcoming policy proposal.

“We’re going to produce phenomenal healthcare,” Trump said. “And we already have the concept of the plan.”

Trump made similar, sweeping promises on the 2016 campaign trail, including a vow that under his administration the Affordable Care Act (ACA) would be repealed. A 2017 effort to do so failed in the Senate, but the House did pass the American Health Care Act (AHCA), which may offer a look at what the White House may be considering.

While running for the presidency in 2016, Trump campaigned on an “insurance for everybody” approach, but quickly threw support behind the Paul Ryan-led AHCA.

Sources close to the president told The New York Times that Trump feels he needs something for the 2020 election that would counter Democrats running on a “Medicare-for-All” single-payer platform.

However, they noted that if a proposal is released in the near term, it may not be a comprehensive health policy platform but instead incremental changes that build on work already done in Medicaid, in the individual markets and on drug prices.

Trump’s interview Sunday comes on the heels of a victory lap Friday as his administration finalized its plan to expand health reimbursement arrangements, the last dangling thread of a 2017 executive order that aimed to inject additional choice into the ACA’s individual markets.

Under that order, the White House also lengthened short-term limited duration health plans and expanded options for association health plans. Critics of the proposals warned that they could pull people out of the marketplaces, destabilizing them as they were beginning to rebound.

The Trump administration has also considered other notable changes to the ACA exchanges, including an end to so-called “silver loading,” a practice adopted by insurers after Trump pulled the plug on cost-sharing reduction payments, and an end to automatic re-enrollment.

Questions raised within CMS, HHS

Some in the industry have warned that these steps could lead to more people becoming uninsured—and internal data from the Centers for Medicare & Medicaid Services (CMS) back that up, according to a memo released by House Democrats.

The memo (PDF) from CMS Administrator Seema Verma to Department of Health and Human Services Secretary Alex Azar notes that these policies could lead to an additional 1.1 million uninsured people and could create notable disruption in the markets. These policy proposals could also lead some insurers to leave the market, creating bare counties and potentially even states where there are no unsubsidized plans available, according to the memo.

In a letter (PDF) to Azar, Democrats said these policies are evidence of ACA “sabotage” by the administration.

“The fact that the Trump Administration would finalize policies despite these serious warnings from CMS is deeply troubling, and it appears to be part of the Administration’s continuing efforts to sabotage the individual market, undermine the ACA, hinder consumers’ access to comprehensive health care coverage and weaken protections for people with preexisting conditions,” they wrote.

California Relies on Federal Funds to Expand Undocumented Health Coverage

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Source: Politico

California is poised to adopt a sweeping health care expansion that extends full Medicaid benefits to undocumented young adults — with the expectation that the Trump administration will foot some of the bill despite the president’s aggressive stance against illegal immigration.

California will soon become the first state in the nation to provide full publicly financed health coverage to a segment of undocumented adults, a critical component of Gov. Gavin Newsom’s long game to create a universal health care system in the nation’s most populous state.

Federal law generally prohibits states from using federal funds to pay for undocumented health coverage. But California officials say they have a way to offset about a quarter of the expansion cost using Medicaid dollars — nearly $24 million of the $98 million price tag in the first year.

Federal law allows state reimbursement for emergency and labor and delivery care for undocumented immigrants, dating back to a 1986 law intended to prevent hospitals from dumping patients on the street.

California plans to bill the federal government for those services for an estimated 90,000 new undocumented enrollees age 19 to 25 in Medi-Cal, the state’s Medicaid program, according to Department of Finance spokesperson H.D. Palmer. The state will pay for a richer suite of Medi-Cal benefits on its own, including preventive and primary care, prescription drugs and hospitalizations.

The price tag will grow in future years, with total program costs projected at $315 million in 2021. California will pay most of that — $247 million — but bill the federal Centers for Medicare and Medicaid for the remainder. Those costs could rise and fall with changes in projected caseload and the use and intensity of services as more undocumented adults become eligible, according to the Newsom administration.

California officials are so certain that they’re on firm ground that Palmer said if the federal government were to object, “Congress would have to overturn federal law that has governed this issue and been on the books since 1986 under the Reagan administration.”

CMS confirmed Friday that California’s approach appears to be legal as long as the state adheres to existing requirements in Medicaid law. Spokesperson Johnathan Monroe told POLITICO that “illegal immigrants who otherwise meet the requirements for Medicaid in any state are entitled to receive services necessary for the treatment of an emergency medical condition, which includes labor and delivery for illegal immigrant pregnant women.”

The federal government already covers a portion of the overall cost of the state’s expansion of full-scope Medi-Cal to undocumented immigrant children through age 18, a program that started in 2016.

The consensus among Newsom administration officials and health policy experts interviewed by POLITICO is that the state is well within its existing authority to use federal money to cover a portion of Medi-Cal costs for undocumented young adults. But the state must be careful to only seek federal reimbursement for emergency services and labor and delivery care, said Cindy Mann, who served as the federal Medicaid director under former President Barack Obama from 2009 to 2015.

“There is a federal part, but it’s no different than what exists today,” she said. “People who would otherwise be eligible for full-scope Medicaid but aren’t because of their immigration status, the federal government pays for emergency Medicaid — emergency hospitalizations and labor and delivery.”

California health officials “have to establish, to the satisfaction of the federal government, that they are only paying for emergency Medicaid services,” Mann added. “The state is absolutely responsible for assuring that only the appropriate claims get sent to the federal government … . If they submit a claim and CMS says it’s improper, CMS will recoup those dollars.”

Carter Price, a senior mathematician and federal Medicaid expert with the RAND Corporation, a Washington, D.C.-based think tank, said California stands out as a state that’s willing to test the boundaries of the low-income health benefit. Outside California, five other states and the District of Columbia have expanded their Medicaid programs to cover undocumented children, according to the National Conference of State Legislatures.

“Folks are going to receive health care one way or the other,” Price said. “It’s fighting over how it’s paid for.”

Still, California could face political backlash from the Trump administration or the president himself, said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation. The president has sought to undo Obamacare, impose Medicaid work requirements and stem the flow of immigrants into the country — most recently by threatening tariffs with Mexico.

Even more directly, Trump last year proposed a “public charge” rule that would penalize green card applicants who have used public services, including Medicaid.

“This is now a different political context with immigration being such a flash point nationally and California stepping out in front and expanding coverage for undocumented immigrants,” Levitt said. “Between the governor and the attorney general, California has certainly been a thorn in the side of the Trump administration … and they have staked out positions themselves as public opponents, so I could imagine the Trump administration using this to score political points.

“But it’s not clear to me how there could be retribution,” he said.

Because the Trump administration doesn’t consider the portion of expanded health care services it’ll pay for a new entitlement, it appears California is safe from Trump administrative backlash. But not from the wrath of his 2020 campaign, considering his rapid response director, Andrew Clark, lashed out Monday on Twitter against California Democrats for “providing health care to illegal immigrants” and “taxing people (legal residents!) who don’t have health insurance.”

Newsom, in an exclusive interview this week with POLITICO, said that kind of attack doesn’t bother him.

“I’m sure rhetorically he’ll have at it, but so what,” he said. “I have no doubt that someone who doesn’t believe in expanding health care would be opposed to a state that is … . If I’m going to be worried about Donald Trump’s feelings, and Tucker Carlson’s feelings and Fox News’ feelings, then I won’t be taking care of the people in this state and I won’t be doing justice to this position and to millions of Californians that will benefit because of our health care expansions.”

Democrats argue that universal health care, including coverage for undocumented residents, will ultimately help control rising costs by reducing expensive emergency room visits and ensuring a healthier population.

But legislative Republicans said they’re concerned about using taxpayer dollars for non-citizen health care and how Trump may respond to being an unwilling participant in California’s Medi-Cal expansion to undocumented immigrants.

California still needs federal approval for expansions of opioid treatment and optional Medi-Cal benefits previously cut during the recession. Higher Medi-Cal provider payments also require federal signoff, as does a $63 million proposal to provide free coverage for low-income seniors, half funded by the federal government.

The state also plans to ask CMS to approve an extension of its managed care organization tax and, come 2020, a new Medicaid waiver to administer a broad range of health care, mental health and homelessness prevention innovations. Those are worth billions of dollars.

“There’s a lot of concerns that with the ongoing political battles between the Newsom administration and the Trump administration, that money gets pulled back, which would have further adverse effects that could cause more pressure on the general fund,” said Assemblyman Devon Mathis (R-Visalia). “We’ve seen this happen in recent months with high-speed rail. Ultimately what happens is our citizens and their families are the ones that suffer.”

Trump Officials Issue New Rule Aimed at Expanding Health Choices for Small Businesses

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Source: The Hill

The Trump administration on Thursday unveiled a rule aimed at expanding health insurance options for small businesses and others, the latest action stemming from President Trump’s health care executive order in 2017.

The White House framed the move as part of its efforts to expand health care choices for people now that efforts to repeal ObamaCare have come up short.

“This new rule gives businesses a better way to offer health insurance to employees and allows workers to select coverage that best fits their and their families’ needs,” Treasury Secretary Steven Mnuchin said in a statement.

The rule allows employers to use tax-exempted funds, known as health reimbursement arrangements, to give to workers for purchasing coverage in the individual market.

Brian Blase, a White House health care adviser, told reporters the move would “particularly benefit smaller employers … by creating another option for financing worker health insurance coverage.”

This action is less controversial than other Trump administration health care moves that have stemmed from the president’s 2017 executive order.

Previous administration actions have included expanding short-term health insurance plans that are cheaper but that do not need to cover people with pre-existing conditions, a move that led Democrats to blast the plans as “junk plans.”

“President Trump has promised Americans that he will put them in control of their healthcare, and this expansion of health reimbursement arrangements will help deliver on that promise by providing Americans with more options that better meet their needs,” Secretary of Health and Human Services Alex Azar said Thursday.


AHA Among Groups Opposing Price Transparency in Info-Blocking Rule

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Source: Modern Healthcare

Healthcare groups including the American Hospital Association came out strong against a suggestion that the Office of the National Coordinator for Health Information Technology require providers to disclose price information as part of its proposed rule.

The ONC in February released its long-awaited information-blocking proposal as a companion to the CMS’ interoperability proposed rule. The ONC’s rule outlines how regulators will require providers to share health data with patients, as well as steps to discourage healthcare organizations from creating barriers to data exchange.

But what data is included in that mandate has proved a point of contention.

In its proposal, the ONC asked stakeholders to weigh in on whether providers should offer patients information on how much they would be charged for certain services. “ONC has a unique role in setting the stage for such future actions by establishing the framework to prevent the blocking of price information,” the rule reads.

However, adding price information to the broader umbrella of health data that’s required to be shared with patients would go “well beyond what Congress intended and would seriously harm patients, hospitals and other healthcare providers,” the AHA wrote in a letter to the agency, arguing that the mandate extends past the goals of the 21st Century Cures Act. The data-blocking rule was a provision of the 21st Century Cures Act.

One of the AHA’s concerns is that publicly sharing price information would disrupt negotiations with payers.

Blue Shield of California raised a similar concern in a letter to the ONC, suggesting the agency should solely focus on providing patients with information on out-of-pocket costs, rather than on providers’ negotiated rates with health plans.

“We urge ONC to ensure any future proposals related to pricing information exclude plans’ proprietary pricing information and protect market negotiations between health plans and providers,” the health insurer wrote.

Other groups were more supportive of the idea, although they requested the ONC separate any rulemaking on price information from the information-blocking proposal.

The federal Health Information Technology Advisory Committee in May cautioned that tying price transparency to the information-blocking proposal would have an “unintended consequence of slowing down the finalization of the current ONC rule,” and recommended the ONC convene a price-transparency task force to consider the idea.

“As a task force, we absolutely agreed that we want to enable price transparency,” Andrew Truscott, co-chair of HITAC’s information-blocking task force and Accenture’s managing director for health and public service, said at the May meeting. “We believe that (price transparency) needs to be given a focus.”

Software company Wolters Kluwer voiced a similar sentiment in a letter to the ONC.

“We generally support including price information within the scope of (electronic health information) for purposes of information blocking, but not in the short-term,” the company wrote, noting price information is difficult to calculate, as it it requires knowing details of an individual patient’s insurance status.

“Factors such as insured status, in-network status, insurance deductibles, insurance co-pays and co-insurance add significant complexity to presenting usable information on price and until those factors are adequately addressed, it makes little sense to include price within the definition of EHI,” Wolters Kluwer wrote.

However, a review of individual comments submitted to the ONC—many of which come from patients sharing stories about expensive medical treatments—suggested there is demand for improving how providers share information on price. One submission from an anonymous commenter simply reads: “We want price transparency!”

Holy Name Medical Center in Teaneck, N.J., also expressed support for the inclusion of price information, arguing that current guidelines related to chargemaster prices are “woefully insufficient” as “the public should have the right to see which hospital systems and healthcare providers are driving higher costs.”

“The current healthcare market is a complex system of secret deals and discounts between insurance companies and healthcare providers,” the hospital wrote to the ONC. “In order to truly lower costs for consumers, we need greater transparency in the marketplace.”

As More California Kids Drop Medi-Cal Coverage, Experts Seek Answers

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Source: California Health Report

More than 150,000 California children dropped out of federally funded health insurance programs in 2018, a trend some experts blame on the Trump administration’s anti-immigrant policies and efforts to upend the Affordable Care Act.

Enrollment in California’s low-income health program, called Medi-Cal, and the low-cost Children’s Health Insurance Program (CHIP) dropped 3 percent in 2018, according to a report by the Georgetown University Center for Children and Families. That’s a total of 152,515 children leaving the two programs.

The enrollment drop follows stagnation in California’s uninsured rate among kids in 2017, reversing years of growth in health coverage rates following implementation of the Affordable Care Act.

It’s not yet clear whether these children have lost health insurance coverage altogether, or enrolled in private insurance plans. Health policy advocates and the report’s authors say it’s likely that at least some of decline is a result of wary immigrant families pulling eligible children out of government health insurance programs. Federal attempts to undermine Affordable Care Act reforms, such as by removing the individual mandate for people to enroll in health insurance, may also play a role, they said.

“The loss is alarming,” said Michael Odeh, health policy director for Children Now, a children’s health advocacy group. “We’ve seen an uptick in the number of uninsured kids from other data, so this declining enrolment and lowering of participation in Medi-Cal is truly concerning.”

California’s loss of young Medicaid and CHIP enrollees is part of a national trend. Across the country, more than 820,000 children left the programs last year, the Georgetown report found.

The California Department of Health Care Services attributed the decline to improvements in the economy and the state’s low unemployment rate. In a statement, department spokesman Anthony Cava said it’s likely more families are gaining job-based health insurance and earn too much to qualify for Medi-Cal.

“Medi-Cal enrollment is typically counter cyclical.  During economic downturns, enrollment rises as individuals may see declines in income and/or the loss of jobs that provide for health care coverage. This can create a demand for Medi-Cal coverage,” he wrote. “Conversely, during economic expansions, the demand for Medi-Cal coverage declines, as job opportunities and incomes increase.”

But report co-author Edwin Park, aresearch professor at Georgetown University’s McCourt School of Public Policy, said economic growth is not enough to explain the drop in enrollment. Although enrollment in Medi-Cal and CHIP typically slows during a strong economy, it’s unusual for it to go down, he said. What’s more, the loss of children in the programs is happening across the country, even in states where the unemployment rate is stagnant or has increased, Park added.

“There weren’t any particularly noteworthy changes in economic indicators in (2018) that could explain a sudden reduction in the number of people eligible or a big increase in alternative forms of coverage like employer-sponsored insurance,” he said.

Pending bills in the state legislature to reinstate the individual mandate and to make health insurance more affordable could help keep more children insured, Park said. The state should also double down on outreach to low-income and immigrant families to reassure them it’s safe to enroll their children in Medi-Cal and to educate them on the benefits of having health care, he and Odeh said.

Nevertheless, Park said the data shows California can “only do so much,” in the face of hostile federal policies.

“The national headwinds were hard and likely were contributing to the Medicaid and CHIP enrolment decline in 2018,” he said.

Kids without insurance “may end up in poor health, do worse in school and over the long term have poorer health and other life achievement outcomes than they would if they had health coverage,” he said. “These are all very troubling, worrisome signs.”

Warren Buffett Says US Health Care Must be Revamped or It Will Be Left to the Government – Which Will Probably Make it Worse

Image result for Warren Buffett Says US Health Care Must be Revamped or It Will Be Left to the Government – Which Will Probably Make it Worse imagesSource: CNBC

Complacency will make fixing the nation’s health-care system a daunting task, according to Warren Buffett, whose Berkshire Hathaway recently joined with J.P. Morgan Chase and Amazon to develop a new model for their 1 million employees.

Buffett along with Amazon’s Jeff Bezos and J.P. Morgan’s Jamie Dimon recently formed the health-care joint venture Haven to figure out how to deliver better health care at a lower cost. One of the problems with the current system, Buffett said in an interview for Yahoo Finance, is that health-care providers and others entrenched in the current model don’t have any incentive to change things.

“We have a $3.4 trillion industry, which is as much as the federal government raises every year, that basically feels pretty good about the system,” Buffett said. “There’s enormous resistance to change while a similar acknowledgement that change will be needed. And of course if the private sector doesn’t supply that over a period of time, people will say ‘we give up, we’ve got to turn this over to the government,’ which will probably be even worse.”

Health spending rose 3.9 percent in 2017 and now makes up nearly 18 percent of American economic output. Last month in his State of the Union address, President Donald Trump called for legislation to cut drug prices. He has also outlined a plan to end the “rigged system” in which people in other countries pay far less for drugs like insulin than Americans spend at home.

“We’ve got this incredible economic machine but we shouldn’t be spending 18 percent when other countries are doing something pretty comparable in terms of doctors per capita and hospital beds per capita,” Buffett told Yahoo Finance. “We’re paying a price.”

Haven CEO Atul Gawande, who is a surgeon, is tasked with figuring out how to build the new model. Buffett said the goal isn’t to make money but to find a way to deliver better care and stop the “march upward” of costs.

“We’ve got a wonderful partnership in the sense that it’s large and in the sense that it has reasonable market muscle with more than 1 million employees,” Buffett said. “We’ve got a unity of commitment and an ability to execute on the commitment.”

Last Updated 06/19/2019

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