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Busy week in health care reform

By Jay MacDonald · Bankrate.com
Friday, December 14, 2012
Posted: 10 am ET

It has been a busy week on the 'Obamacare' beat. Here's what happened in health care reform while you were out holiday shopping.

Sebelius firm on full Medicaid expansion

While Congress and the White House tried to summon enough seasonal cheer to reach a fiscal cliff compromise, Health and Human Services Secretary Kathleen Sebelius dumped coal in the stockings of anti-Obamacare governors who had hoped to cash in without fully expanding Medicaid.

Last summer, the U.S. Supreme Court ruled that the Affordable Care Act could not force states to expand Medicaid, the federal-state health insurance insurance safety net for low-income Americans. What HHS did instead was offer states a sweet deal: expand your Medicaid program to anyone who earns up to 133 percent of the federal poverty level, now set at roughly $15,000 for individuals and $30,000 for a family of four, and the feds will pay 100 percent of the expansion costs in 2014 through 2016, sloping to 90 percent in 2022 and thereafter.

Despite the attractive terms, nine states, including Texas and South Dakota, refused the offer outright while others asked Sebelius if they could set the bar somewhat lower than 133 percent and still take advantage of the terms.

The answer was an unequivocal no; states that only partially expand Medicaid won't receive the 100 percent matching funds.

While there is no deadline for states to expand Medicaid, the full-ride funding is available only for 2014, 2015 and 2016.

Pre-existing conditions fee could cost you

Large employers recently learned that they will face a $63-per-employee fee designed to provide a financial cushion for health insurance companies that must insure people with pre-existing health conditions for the first time under Obamacare. Don't be surprised if your boss passes most or all of that fee on to you.

The Obama administration says the temporary assessment, which will be levied on about 190 million employer-sponsored and individual health plans over three years starting in 2014, will raise about $25 billion.

The funds will be administered by HHS to help insurers weather the hard-to-predict cost of covering pre-existing conditions in the initial years. Insurers will be prohibited from denying coverage to those with pre-existing conditions beginning on Jan. 1, 2014.

Obamacare saved consumers $1.5 billion in 2011

A new report from the Commonwealth Fund finds that consumers reaped $1.5 billion in savings last year, the first full year in which key Obamacare provisions aimed at controlling runaway health care spending kicked in.

Roughly $1.1 billion of the savings came in the form of rebates from insurers who failed to meet the new medical loss ratio, or MLR. It requires insurers to spend at least 80 percent of your premium directly on your care rather than on executive bonuses and administrative costs. In addition to issuing rebates, the companies responded to the MLR by cutting overhead and, in some cases, reducing profits, according to the study.

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12 Comments
alfred benjamin
December 27, 2012 at 5:07 pm

Look who is calling us ignorant.Stand in front idiot, now who is ignorant,stupid and foolish.

James Rippa
December 14, 2012 at 2:20 pm

All you people who voted for BO deserve what they get.
It's unfortunate that we who didn't, have to suffer because of your ignorance.