Californians Brace For Increased Healthcare Premiums If Federal Subsidies Expire

Californians brace for increased healthcare premiums if federal subsidies  expire - Los Angeles TimesSource: Los Angeles Times, by Melody Gutierrez and Anabel Sosa

For the last two years, Syd Winlock has had a major burden lifted from his surgically repaired shoulder.

Federal subsidies passed as part of a temporary pandemic relief package have drastically cut how much he pays in healthcare premiums, allowing the Sacramento-area small-business owner to purchase an insurance plan during the last two years that provided better coverage for his shoulder and knee replacements.

Those federal subsidies, however, will expire at the end of this year if Congress does not extend the program. His “very manageable” price — about $700 a month for him and his wife — will increase to $2,300, Winlock said.

“Even if we went to a lesser-type policy, it would still be about $1,800 a month,” Winlock, 63, said. “I mean, that’s more than my mortgage.”

Roughly 150,000 lower- and middle-income Californians would be similarly priced out of coverage by the rising premiums if the federal subsidies are not extended, a Covered California analysis recently estimated.

The federal subsidies were passed in early 2021 as part of the Biden administration’s American Rescue Plan Act, which temporarily provided help to Americans to recover from the economic and health effects of the COVID-19 pandemic.

Under the act, health insurance premiums were capped at 8.5% of a household’s income. That significantly dropped monthly payments and led to more consumers signing up through Covered California, the insurance marketplace created by the 2010 Affordable Care Act for working-age people who aren’t covered by a health plan at their job.

Enrollment in the state’s exchange has hit a record-high 1.8 million, of which Covered California reported that 92% received some form of subsidy.

“These enhanced subsidies have fundamentally delivered affordability and delivered on the promise of the Affordable Care Act in the way that it was intended,” said Jessica Altman, executive director of Covered California.

“There were a lot of people who said things like, ‘Oh, my gosh, you know, for the first time I can afford my health insurance and my child care….’ This is particularly important given the inflationary environment we are in now.”

More than 1 million lower-income earners — individuals making between $17,775 and $32,200 and families of four with income between $36,570 and $66,250 — would see their premiums more than double if Congress doesn’t extend the program, according to the Covered California analysis. Monthly premiums for middle-income earners would increase, on average, by $272 per member next year.

John Baackes, the chief executive of L.A. Care, a health insurance plan serving Los Angeles County’s poorest and most vulnerable residents, said that although the enhanced subsidies don’t expire until the end of the year, the window for Congress to act is growing smaller because of its monthlong August recess. At that point, legislation typically slows down in an election year.

Baackes said health plans will need time to send renewal notices to consumers of anticipated rates for the 2023 coverage year, which are mailed in October.

“So we’re very concerned about it,” Baackes said. “The American Rescue Plan provided increased subsidies that are really a wonderful thing. And many of our members benefited from it.”

With open enrollment beginning one week before the Nov. 8 midterm elections, Democrats on Capitol Hill are increasingly eager to prevent consumers from receiving notices about huge increases in insurance premiums before voters go to the polls. But the debate about whether to extend the subsidies or — as some have pushed — make them permanent has been hamstrung by wrangling over the price tag and the effect on skyrocketing inflation.

Keeping the subsidies an additional three years would cost $74 billion, while the price tag for making them permanent is $220 billion over the first 10 years, according to the Congressional Budget Office.

Gov. Gavin Newsom and state lawmakers proposed spending $304 million in separate state healthcare subsidies to lessen the burden if the federal program is not extended. That money, which is included in a state budget that is expected to be finalized this month, would offset premium increases for more than 700,000 residents.

However, those state-funded subsidies will cover only a fraction of the federal premium discount currently available under the American Rescue Plan, which provided $1.7 billion to California in each of the last two years to help with healthcare costs.

“Nearly half of the folks in Covered California are paying less than $10 a month,” said Anthony Wright, the executive director of Health Access California, a consumer group that is pushing Congress to make the increased federal subsidies permanent. “We live in a high-cost-of-living state, so people will have to make decisions about how much healthcare they can afford.”

That worries Tuan Nguyen, a caregiver in the Silicon Valley city of Milpitas. Having been diagnosed six years ago with a rare and painful disorder called glossopharyngeal neuropathy, Nguyen said he has to buy more costly insurance coverage that allows him to see particular specialists.

“I need the healthcare plan,” said Nguyen, 44. “I need to see my doctor. I need my treatment. These are things that are a necessary part of my life, and they’re all very expensive and getting much harder to afford.”

Reducing the number of uninsured residents in the state has been a top priority for Newsom and legislative leaders, who in 2019 approved legislation creating a fee for anyone who does not have insurance. The individual mandate was intended to induce younger and healthier individuals to buy coverage through Covered California to widen the pool and lower rates overall as Democratic leaders move California closer to universal coverage.

As part of that effort, California has incrementally expanded eligibility for Medi-Cal, the state’s healthcare program for the poor, to certain age groups of low-income people regardless of immigration status. California’s pending budget would offer Medi-Cal to the final remaining age group in 2024, opening the healthcare program to residents 26 to 49 years old regardless of immigration status. Newsom said the move will make California “the first state in the country to achieve universal access to health coverage.”

Miranda Dietz, a research and policy associate at UC Berkeley Labor Center, said the significant increase in the number of Californians with health insurance over the last two years would be in jeopardy without the federal subsidies. Dietz co-wrote a study in partnership with the UCLA Center for Health Policy Research that projects that as many as 1 million people will forgo insurance in California next year if federal subsidies expire.

“It makes it so it’s very disheartening to take away these extra subsidies that have been really crucial in improving affordability for folks,” Dietz said. “It’s a real blow towards that goal of universal coverage and more affordable coverage.”

The added cost of premiums “will be a real struggle for folks who are deciding between rent and groceries,” Dietz said.

For Winlock, the small-business owner, the added cost if federal subsidies are not extended would be temporary. Next year, Winlock and his wife turn 65 and will qualify for Medicare. In the meantime, he would probably look for the cheapest plan possible and hope for the best.

“We probably would look at some alternative ways to get healthcare,” Winlock said. “We certainly wouldn’t be able to afford mainstream healthcare. It is just out of our budget.”

TSA Stops Mask Enforcement After Federal Judge Voids Mandate

Biden Doubled Mask Fines for Travelers. What Does it Mean for Passengers? -  The New York TimesSource: The Washington Post, by Michael Laris and Justin George

Federal officials stopped enforcement of a federal mask mandate Monday in transportation settings after a federal judge struck down the requirement, raising public health concerns and prompting several airlines to announce that face coverings are optional on domestic flights.

 

U.S. District Judge Kathryn Kimball Mizelle of the Middle District of Florida said the mandate exceeds the statutory authority of the Centers for Disease Control and Prevention. Federal officials last week had extended the mask mandate for commercial flights and in other settings, including on buses, ferries and subways, until at least May 3.

 

The transportation mandate has been among the highest-profile mask requirements in the country, persisting after most school districts and other jurisdictions have allowed similar mandates to expire. Conflicts over masks have been particularly acute on airplanes, where some flight attendants have been physically attacked and verbally abused for enforcing mask rules.

The decision comes as coronavirus cases are again climbing in the Northeast as the BA.2 omicron subvariant, which is more contagious than its predecessor, becomes the predominant strain in the United States. Health officials say it’s not clear whether the rise is the start of a larger surge.

The CDC’s masking order has been enforced through directives issued by the Transportation Security Administration. A Biden administration official, who shared guidance with reporters on the condition of anonymity, said Monday evening that the court decision means the CDC’s order is “not in effect at this time. Therefore, the TSA will not enforce its Security Directives” requiring the face coverings.

Airlines began announcing they were dropping the requirement, with some caveats for international destinations. In a statement, United Airlines said that “effective immediately, masks are no longer required at United on domestic flights, select international flights (dependent upon the arrival country’s mask requirements) or at U.S. airports.”

In the Washington region, Metro announced late Monday that masks are optional on its rail and bus systems for customers and Metro employees.

In her decision Monday, Mizelle, who was appointed by President Donald Trump and clerked for Supreme Court Justice Clarence Thomas, said the CDC had relied on a 1944 law, the Public Health Service Act, to impose the mandate. But the government’s argument that it put the mask requirement in place for the purpose of “sanitation” falls short, Mizelle argued.

“Wearing a mask cleans nothing. At most, it traps virus droplets. But it neither ‘sanitizes’ the person wearing the mask nor ‘sanitizes’ the conveyance,” Mizelle wrote.

 

The case was brought on behalf of a legal group known as Health Freedom Defense Fund and airline passengers, including Ana Daza, who said she has anxiety aggravated by wearing a mask.

Mizelle found for the plaintiffs on three key issues, ruling that the CDC had exceeded its legal authority, that it had improperly avoided notice and comment procedures, and that its mandate was “arbitrary and capricious.” In her ruling, Mizelle argued that the mask mandate wrongly curtailed passengers’ freedom of movement.

“Anyone who refuses to comply with the condition of mask wearing is — in a sense — detained or partially quarantined by exclusion” from their means of transportation, she wrote.

 

Industry trade group Airlines for America said U.S. airlines “have been strong advocates for eliminating pandemic-era policies and are encouraged by the lifting of the federal transportation mask mandate.” The group said high U.S. immunity levels and widespread vaccine accessibility, plus hospital grade cabin-air filtration, should give travelers confidence.

The CDC said Monday it doesn’t comment on pending litigation.

In a legal filing last month defending the mandate, Justice Department lawyers said the plaintiffs in this case had relied on an “unduly narrow and grammatically incorrect” interpretation of the public health law. They noted that Congress had authorized health officials to make and enforce regulations “necessary to prevent the introduction, transmission, or spread of communicable diseases” from outside the country, or within it, using “sanitation” and “other measures.” They also noted that the Supreme Court, in a case last year, said those measures relate directly to preventing the interstate spread of disease “by identifying, isolating, and destroying the disease itself.”

 

Masking requirements have generally been made after considering emerging epidemiology on restricting the spread of the virus, and not on an “arbitrary or capricious” basis, Jeanne Marrazzo, director of the Division of Infectious Diseases at the University of Alabama at Birmingham, said in an email while quoting the words Mizelle used in her ruling.

“I believe the CDC was simply erring on the side of caution given the extraordinary mixing opportunities afforded by airports and mingling that occurs there,” she said. “On the plane, while it’s flying, as I have said before, air exchange is good, but we still don’t know HOW good it is with this much more contagious new variant.”

The Biden administration announced the mandate quickly after President Biden came into office, following the Trump administration’s resistance. Airline policies at the time had required that masks be worn.

 

“This is obviously a disappointing decision,” White House press secretary Jen Psaki said Monday, adding that the CDC and White House continue to recommend wearing masks in public transportation settings.

She said the Department of Homeland Security — which includes the TSA — was reviewing the decision. The Justice Department will “make any determinations about litigation,” Psaki said. A Justice Department spokeswoman said the agency is reviewing the decision and declined to comment further.

Sara Nelson, president of the Association of Flight Attendants-CWA, which represents nearly 50,000 flight attendants at 17 airlines, said many legal uncertainties remained on Monday. In a statement, she urged “calm and consistency in the airports and on planes.”

“The last thing we need for workers on the frontlines or passengers traveling today is confusion and chaos,” she said.

Nelson urged travelers to check with airlines for their masking requirements. She said clear communication would help flight attendants and other front-line workers avoid problems that could stem from the confusion over changing rules.

“In aviation operations, it is impossible to simply flip a switch from one minute to the next. It takes a minimum of 24-48 hours to implement new procedures and communicate this throughout the entire network,” she said.

A March poll by the health group KFF found Americans were roughly divided on whether the federal government should extend the mask requirement for airplanes, trains and other public transportation (48 percent) or let it expire (51 percent). More than 7 in 10 Democrats said it should be extended, while 76 percent of Republicans supported letting it expire.

Fliers on Monday had mixed reactions.

Stephanie Dexter, her husband, Brad, and their daughter, Eva, wore surgical masks and cone-shaped K95 masks as they walked out of Reagan National Airport on Monday afternoon. They had flown Eva from Omaha to D.C. for a spring vacation, where they planned to visit monuments and museums. The mask mandate did not weigh heavily on their minds.

“We were fine wearing them today,” said Stephanie Dexter. “I’m an asthmatic. I’m fine not getting sick.”

Phil Delin, 67, of Prince George’s County, Md., said he had heard “a sprinkle” about the judge’s ruling before he arrived at the airport with his golf clubs for a trip to Las Vegas.

“I still don’t understand a Florida judge reversing a federal mandate when the mandate is backed by as much science as it is,” he said. He had no second thoughts about wearing a mask aboard his Monday night flight.

Simon Rojas, 29, who had flown back into Reagan National from Las Vegas in shorts, stood outside while waiting for his ride as a chilly wind forced others waiting for a ride back into the terminal. He said he was pleased the judge ruled against the mandate, saying it made no sense to wear a mask on a plane when people are so close and are lifting masks to drink and eat.

“Just take them off,” Rojas, of Laurel, Md., said of mask regulations. “In the news, they’ve been saying the death rate is going down, right? Also, I think if you’re in such a closed space like a plane, that mask isn’t doing anything.”

The Biden administration has faced growing pressure to lift the mask requirement for air travel and public transit. Earlier this month, Republican leaders on the House and Senate transportation committees reiterated their call for Biden to “rescind or decline to extend the mask mandate.”

In late March, 21 mostly Republican-led states sued the government, seeking to immediately end the mask requirement.

Last month, executives from 10 airlines, including American, United and Delta, sent a letter to Biden urging him to end pandemic-related travel policies, including the mask mandate.

The ruling comes as airlines are seeing a surge in spring travel — one the industry anticipates will extend through the summer and beyond. Transportation Security Administration officials have reported an increase in the number of people screened at airport checkpoints, with many days routinely topping the 2 million mark, as they had before the pandemic.

State Reaches Settlement in Pharma Pay-for-Play Scheme

The California Dept. of Insurance and whistleblowers reached a $23.2 million settlement with pharmaceutical company, Warner Chilcott. Three former employees said that Warner Chilcott paid kickbacks to doctors and falsified prior authorization forms to increase the number of prescriptions for several medications. Whistleblowers alleged that Warner Chilcott used illegal kickbacks to influence treatment decisions. They said that the company often hosted events at high-end hotels and spas with little or no educational content in order to encourage physicians to write more prescriptions for Warner Chilcott medications.

As part of the settlement, Warner Chilcott will refrain from promoting its pharmaceutical products identified in the complaint and sold in California. Of the $23.2 million state settlement, California will get $11.8 million, which is to be used for enhanced insurance fraud investigation and prevention efforts.

Scott Simmer, the whistleblowers’ lead counsel said, “The federal False Claims Act allows whistleblowers to sue for fraud related to government health plans, but only California and Illinois have statutes that allow whistleblowers to bring claims alleging illegal kickbacks to health care providers for the purpose of defrauding private health insurance plans.” In California, private citizens can sue and get a share of the recovery. The whistleblower’s share of a federal recovery in a non-intervened case is 25% to 30%.

“This case really should get the attention of state insurance commissioners around the country. To put things in perspective, the federal False Claims settlement returned a net of around $2.3 million to California’s Medicaid program, but this settlement will bring in a net of $11.8 million to the state’s general fund. Most importantly, drug companies have received a clear message not to engage in drug marketing fraud in the state of California,” he said.

A separate lawsuit was filed in federal court in Massachusetts alleging that Warner Chilcott violated the Federal False Claims Act. Also, the Dept. of Justice announced a settlement of the federal allegations on October 29, in which Warner Chilcott pleaded guilty to healthcare fraud and agreed to pay $125 million to resolve federal civil and criminal liability for alleged activities that violated the federal anti-kickback and HIPAA statutes, and for false claims submitted to Medicare and Medicaid.

Last Updated 06/29/2022

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