Health Coverage Premiums Rise Slowly Again this Year

Despite a relatively slow rise in costs again this year, premiums for employer health coverage reached above the $16,000 mark for the first time, according to a major survey.

The 4% increase in the cost of a family plan represents the same rate of growth as last year, rising from a cost of $15,745 in 2012 to $16,351 this year. The slowed rate likely reflects employees’ continued tendency to limit the use of health care, said Gary Claxton, vice president of the Kaiser Family Foundation, which performed the annual poll.

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However, the exact reason for the relative lull in the continued upward march of health care costs is a topic of debate among health care economists. Some people believe that it is largely a result of the recession, and the effect will likely end when the economy rebounds.

Other economists prescribe to the idea that the downshift may be more tied to permanent changes in how health care is being purchased. For example, higher deductibles and increased efficiency among health care providers overall may be slowing the rise in costs.

Claxton said this year’s results showed minimum impact from the federal health law. Most of the major provisions take effect next year, and other, smaller conditions, such as the addition of children up to the age of 26 to their parents’ plans, have already been incorporated into the cost of coverage.

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The survey also showed that higher-deductible plans are retaining popularity. The share of employees enrolled in plans that have an annual deductible of $1,000 or more for single coverage hit 38% in 2013, an increase from 34% last year.

For more information on 2013 health care costs, see the article by Anna Wilde Matthews this information was taken from.

ClaimLinx is proactively ready for the many changes of Health Care Reform. For more information, please contact Tom Quigley at tquigley@claimlinx.com or (800)858-1772 X 25.

ClaimLinx Publishes “How to Beat Obamacare”

CINCINNATI–(BUSINESS WIRE)–ClaimLinx recently published a timely new book entitled, “How to Beat Obamacare.” The book briefly covers the most important parts of the Patient Protection and Affordable Care Act signed into law in 2010 by President Obama. It gives individuals and employers a framework for making smart choices in the new healthcare environment. The book also reveals the secret to saving money on individual health insurance plans for employers.

The authors, Edward A. Lyon, JD CTC, Michael J. McCormick, CPA, ETC, Thomas J. Quigley, Jr. and Christy A. Quigley have over 80 years combined experience in the tax and insurance industry.

In writing the book, Ed Lyon makes it clear that “we’re not here to debate the merits of the law, but we can help by outlining what the law means for you, for your healthcare, and for your taxes.”

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Back In 2010, President Obama signed the “Patient Protection and Affordable Care Act” and companion “Health Care and Education Reconciliation Act of 2010.” Together those two acts, better known by Republicans and Democrats alike as “Obamacare,” represent the biggest change in how we finance healthcare since Medicare was created in 1965. They also include some of the most significant tax changes in a generation. Polls show even today most Americans are confused and concerned about how the Affordable Care act directly affects them – what it is and how much it’s going to cost. Michael McCormick adds, “One poll taken in August of 2013, revealed that four out of ten believed the law was repealed, overturned, or were unsure if it was still law.”

Related Post: Breaking Down The Employer Mandate Tax Penalties

The book outlines a plan which takes advantage of a 55-year-old tax law, Internal Revenue Code Section 105b, that allows employers to reimburse their employees for medical costs incurred by themselves, their spouses, and their dependents. This, in turn, lets employers buy less expensive, higher-deductible insurance coverage – then reimburse their employees directly for the difference between the old deductible and the new. Average yearly savings per employee are $2,000. This program is available in all 50 states and can be implemented and administered fully by ClaimLinx consultants.

For more information about “How to Beat Obamacare,” please visit amazon.com or www.claimlinx.com.

The Health Care Overhaul – What You Need to Know

The Affordable Care Act’s financial protections and coverage requirements are likely to help older adults (50+) the most.

State-based health-insurance exchanges created by the 2010 Patient Protection and Affordable Care Act opened for business on October 1. For those who can’t get insurance coverage through work, or for the self-employed who have been buying coverage as sole proprietors, the exchanges will serve as clearinghouses for evaluating and buying health plans.  These policies take effect Jan. 1 and must cover 10 “essential benefits,” including: preventative services, hospitalizations, mental health and prescription drugs. Also, insurers can no longer exclude people with pre-existing conditions.

Related Post: Listen To Tom Quigley Talk About Obamacare On ClaimLinx Podcast

Going Without

  • This is good news for individuals ages 50 to 64, who typically have more health problems than those who are younger.
  • Twenty percent of the 50-to-64 demographic went without health insurance for at least part of 2012, up from 15% in 2005, says the Commonwealth Fund, a New York-based nonprofit that focuses on health-care issues.
  • 20%-29% of people in that age group were rejected when applying in 2008, the latest year for which figures are available.
  • Many older people with insurance at work would like to make a change but are clinging to their jobs for the health coverage
  • Because insurers can no longer turn people down, it is much easier to obtain coverage under the new law.

Young Subsidize Old

Employers now have until 2015 to provide coverage for their workers in order to avoid a penalty.  Individuals are not so fortunate, however, as they must purchase a policy for 2014 or face a $95 or 1% of income tax penalty.  (This will rise to $695, or 2.5% of income in 2016).

  • Timothy Jost, a law professor at Washington and Lee University in Lexington, Va.  notes that the new policies taking effect in January will benefit older consumers who tend to spend more on health care, because they will provide more comprehensive coverage with lower premiums.
  • Insurers can no longer charge higher premiums based on health status, nor can they charge the oldest consumers more than three times the average premium paid by a 21-year-old (a possible savings of $1,800 per year).
  • “Early retirees will benefit most from the health-care law,” says Prof. Jost in Virginia. Younger, healthier people will “pay higher premiums to subsidize the rates of those who are older and sicker,” he adds.
  • If however, younger, healthier people decide to pay penalties instead of buying insurance, it could drive the cost of coverage up in 2015 and beyond.

Related Post: After Five Years With The ACA, Approval Is Low But Success Is High

Tax Credits

  • Tax credits also factor into the premium equation. Individuals with incomes of up to $45,960 and couples earning up to $62,040 may be eligible for tax credits that cap their premiums between 2% and 9.5% of income.  Older people will benefit the most from these caps, since they are usually charged higher premiums by insurers.
  • For example, a 55-year-old Denver resident who earns $45,000 a year and picks a policy that Anthem Blue Cross & Blue Shield plans to offer there for $597 a month would be eligible for $240 in monthly tax credits. A 27-year-old with the same salary and policy would pay $281 a month and receive no tax credits, according to the nonprofit Colorado Consumer Health Initiative.

Please click here to read the article in its entirety written by Ann Tergesen. You may also want to visit the ClaimLinx Exchange as well as the interactive guide to health reform for additional resources and information.

Many State Health Insurance Marketplaces Will Exceed Requirements

This October brought a monumental start for the country. With its first day, the health care marketplaces opened, and the largest, most complex aspect of the Affordable Care Act began.

While there are problems to fix, the state-run health insurance marketplaces are poised for success, as they are expected to exceed minimum requirements by 2014.

According to a Commonwealth Fund report, the state-run exchanges will surpass federal quality-reporting standards, offer small-business employees a choice of health plan and promote a seamless “one-stop-shop” for consumers to begin coverage.

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The report found that several states are achieving this by using innovative tactics to improve consumers’ experience beyond the law’s requirements:

  • Reporting quality: Nine states plan to display data on quality in their marketplaces. This is two years before the act requires such data.
  • Increasing options: Small-business employees in state-run marketplaces will have more choices. Nearly all of these marketplaces will provide firms with the more than one plan, starting in 2014
  • Promoting insurer participation: Eight states and the District of Columbia have adopted formal rules to require or incentivize insurers to participate in the marketplaces.
  • Balancing members: Many states have taken steps beyond act requirements to encourage a balance of health and sicker people in the marketplace so that participating plans do not end up insuring mostly unhealthy people.
  • Limiting choice for ease: Insurance carriers may sell at five different tiers of coverage. But many states are limiting the number of plans an insurer can sell at each tier in order to make the choices more manageable.
  • Streamlining eligibility: Fourteen states and the District of Columbia used federal funds to adopt a one-stop shop computer system that will determine coverage potential enrollees are eligible for.
  • Improving assistance: In addition to allowing agents and brokers to sell coverage, the state exchanges are also expected to educate consumers and help them sign up for health coverage.

Related Post: Supreme Court Upholds Insurance Subsidies For All Americans

For more information on the state-run health exchanges, see the press release this information was taken from or the report it concerned. Also please visit the ClaimLinx Exchange as well as the interactive guide to health reform for additional resources and information.

Obamacare May Require More Creative Savings

Controversy is swirling around the Affordable Care Act as the market exchanges open with the beginning of next month: Will it be more or less expensive? Will it work?

But one man is looking at a quirk in the system he thinks many may benefit from.

Jonathon Wu, co-founder of the price comparison site ValuePenguin.com, said that for some people, it will be more economical to have an employer cease offering health insurance subsidies for them and their families. In this case, the entire family is then free to buy insurance with government subsidies on the Obamacare state health exchanges.

“For a lot of people, that may be a better deal,” Wu said.

Under the ACA, a worker whose employer offers company-subsidized health insurance that costs the worker less than or equal to 9.5 percent of household income is considered to be receiving affordable coverage.

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The availability of this coverage makes employees ineligible for the state exchanges using government subsidies. However, the affordability test considers only the cost to the worker of buying insurance from the company’s plan, not the cost of insuring the entire family.

Therefore, even if the cost of purchasing coverage for a worker’s entire family exceeds 9.5 percent of the household income, the family cannot potentially save money by buying government-subsidized insurance on the state health exchange.

The potential financial hit or benefit that families may see is becoming more apparent with the approach of Oct 1, the date when all the federal and state-run Obamacare exchanges are scheduled to begin enrolling people in plans.

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There are always many strategies to purchasing health insurance in order for employers and employees to save money. If you have any questions about how the Affordable Care Act could help or hurt your plan purchasing, please contact Tom Quigley at tquigley@claimlinx.com. Look for his book How to Beat Obamacare to be released soon.  Also, please view our Health Care Reform guide here.

You may also be interested in reading some of the options Jonathon Wu explains in the article by Dan Mangan this information was taken from.