The Affordable Care Act survived a second appearance in the Supreme Court. The law has officially achieved feline status and appears to have nine lives. Remember this is not the first rodeo for arguably the largest piece of social legislation since the Medicare program.
King v. Burwell will probably be the final legal challenge and those looking to dismantle or repeal the law all together will have to do so through legislative means. They will have to overcome a presidential veto threat as well as a difficult budgetary game of unraveling a program halfway through a 10-year implementation period with all kinds of tax increases and future reductions to parts of Medicare.
The stage is set for healthcare to again be a central domestic issue in the 2016 Presidential stakes, featuring nearly 20 candidates, as the economic growth continues to wane with consumers seeing diminishing disposable income as it is gobbled up by rising insurance premiums.
No candidates present real action language on health reform outside of generalities and talking points. Voters could face a difficult and divisive decision around a single payer system, especially if Bernie Sanders builds national exposure.
With how fast things have been moving lately, a single payer system could become a reality as health insurance is becoming a commodity, and if costs continue to rise some in the public may demand it.
Insurance merger madness continues as Aetna recently acquired Humana for $37 Billion, the largest deal in the industry ever, and coming on the heels of Anthem’s initial and unsuccessful move to merge with Cigna causing some of the details of the deal to come into public scrutiny.
It is shaping up for there to be three massive national insurance companies that could cause the Department of Justice to scrutinize them from an anti-trust perspective and poses serious challenges for healthcare providers as they could see lower reimbursements if these big companies use their market control to push for bigger discounts.
What does this mean for Providers?
As these insurance companies are getting bigger through consolidation does this translate to less choice for consumers for a product increasing in price each year and potentially diminishing in quality? In reality it will allow them to renegotiate more favorable reimbursement rates with providers at larger discounted rates, set up favorable networks and other things. If the cost of care is not contained, how could there be lower premiums?
The MLR in the ACA was supposed to control growing premiums as 80 percent is supposed to be spent on claims, but as we have found the carriers have found ways around the MLR and continue to see exponential growth with many of them up over 100% since the passage of the law.
Another thing that helps many insurers is the reinsurance fee that could disappear after 2017 and could throw premiums out of control even more. The large insurers argue that having a larger scale to lower premiums, but if the cost of healthcare continues to grow how will this be possible?
Impact on Employers
Quietly before the Independence Day holiday, Congress included an increase in reporting penalties for employers failing to file IRS 1094-C and 1095-C forms. HR 1295 is the new trade legislation recently signed by the President and includes increases to the penalties for employers over 50 employees for not reporting their ACA information to the government.
The maximum penalty doubles from $1.5 Million to $3 Million, failure to report goes from $100 per return to $250 per return, and according to CBO over $100 Million in additional penalty revenue is expected to be collected by the IRS over the next decade.
Reporting begins in January for this 2015 information and transitional relief will no longer be applicable. Doing nothing is no longer an acceptable strategy. If your organization or agency is struggling to determine next steps, do yourself a favor and call E.D. Bellis at 1-844-626-7202 to schedule a free webinar demonstration of our technology solution that will automate ACA compliance and reporting, improve organizational efficiency and so much more.
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