Tagged Medicare

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Californians Without Health Insurance Will Pay A Penalty — Or Not

Californians, be warned: A new state law could make you liable for a hefty tax penalty if you do not have health insurance next year and beyond.

But some of you need not worry: The law contains several exemptions that will allow certain people to avoid the penalty, among them prisoners, low-income residents and those living abroad.

“It will be really important that people get clear guidance and instruction to make sure they don’t inadvertently pay a penalty when they are eligible for an exemption,” says Laurel Lucia, director of the Health Care Program at the University of California-Berkeley’s Center for Labor Research and Education.

California’s penalty is modeled on the one originally in the federal Affordable Care Act. Congress eliminated the federal penalty, effective this year.

The Golden State will join Massachusetts, New Jersey, Rhode Island, Vermont and Washington, D.C., in requiring their residents to have health coverage and dinging those without it.

Most types of insurance, including Medi-Cal, Medicare and employer-sponsored coverage, will satisfy California’s coverage requirement. People who purchase insurance for themselves and their families, either through Covered California, the state’s health insurance exchange, or the open market, will have until Jan. 31 to buy a health plan for 2020.

If you aren’t covered and owe a penalty for 2020, it will be due when you file your tax return in 2021. The penalty will amount to $695 for an adult and half that much for dependent children. Some people with higher incomes instead will have to pay 2.5% of their income, which could make their penalty quite a bit heftier.

Penalty payments are expected to raise $317 million in the first year they are collected, according to the state Legislative Analyst’s Office. The money will help pay for new state subsidies intended to make insurance more affordable for some people.

You won’t have to pay the penalty if you are uninsured for three consecutive months or less during the year, or if you are incarcerated or are Native American. Likewise, if you are in the U.S. illegally.

General hardship exemptions also are available if you are facing personal or family difficulties, including homelessness, domestic violence, bankruptcy, eviction or the consequences of a natural disaster.

And you’re off the hook if your household income is below the threshold for filing a tax return. This was the most common exemption from the federal penalty, according to Internal Revenue Service data based on 2016 returns. It might be even more popular under the California law, since the state’s filing threshold is higher than the federal one, Lucia says.

You can also claim an exemption if you would have to spend more than 8.24% of your income on insurance premiums in 2020. This so-called affordability exemption was also among the most common under the federal law.

How you claim an exemption depends on the type you are seeking.

Covered California will handle three types of exemptions: religious conscience, general hardship and affordability. Each will require filling out a different application, and the applications will be available starting in January, says James Scullary, an exchange spokesman.

For other exemptions, you’ll need to apply when you file your 2020 return with the Franchise Tax Board in early 2021. A tax board spokeswoman promises that “our tax forms and instructions will include information for all exemptions claimed on the tax return.”

You can also apply to the tax board for an affordability exemption when you file your return.

Gerald Kominski, a senior fellow at the UCLA Center for Health Policy Research, says the 8.24% threshold to qualify for the affordability exemption is too high and pushes many middle-class families to pay a penalty even when they are hard-pressed to buy insurance.

Steven Morelock, a resident of Los Angeles, paid hundreds of dollars in federal penalties for several years because he felt too financially stressed to plunk down $250 a month for a high-deductible health plan. He was already shelling out nearly half of his $2,500-a-month salary in rent alone.

“I would have had to change my habits very dramatically,” says Morelock, 41, a labor organizer. “It would have cut the amount of money I had for non-fixed costs by about half.” He finally got employer-sponsored insurance late last year.

Another exemption that has stirred some debate is for membership in a health care sharing ministry — an association of religiously like-minded people, primarily Christians, who cover one another’s medical costs.

Legislators and others who opposed including this exemption in California’s law argued that the ministries are subject to little regulatory scrutiny, the coverage they offer is limited, and it’s not guaranteed. More recently, concerns have arisen about sham ministries engaged in deceptive business practices.

Dr. Dave Weldon, president of the Alliance of Health Care Sharing Ministries, acknowledges some of the limitations and says the organizations he represents “all counsel their members that this is not insurance, there’s no contract, there’s no obligation to pay.”

Bob Stedman, pictured with his wife, Teresa Stedman, and four of their five children, says his family was exempt from the federal tax penalty because of their membership in a health care sharing ministry. He plans to take the same exemption under the new California law. (Courtesy of Bob Stedman)

Bob Stedman, 55, says he and his family were exempt from the federal penalty every year because of their membership in Samaritan Ministries International. The Lake Forest, Calif., resident plans to take the same exemption under the California law.

Stedman figures he’s saving about $1,000 to $1,500 a month in premiums compared with regular insurance, and was pleased when the $50,000 bill he received following a stroke was heavily discounted by the hospital and then almost entirely covered by other ministry members. And knowing his money is not being used to finance abortions, which most commercial health plans in California are required to cover, gives him “the benefit of a clear conscience,” he says.

Weldon says the exemption is warranted on those grounds alone. “This nation has a long history of religious accommodation,” he says.

If you’re not sure whether you might qualify for an exemption, you can get more information from Covered California or the tax board.

Contact Covered California at www.coveredca.com or by phone: 800-300-1506. For the tax board, log on to www.ftb.ca.gov or call 800-852-5711.

But don’t limit yourself to those two agencies. Insurance agents and tax preparers across the state are trying to master the details of the new law, and they can help.

For a list of insurance agents whose help is free, log on to the Covered California website and click on “find help” or go to the website of the National Association of Health Underwriters (www.nahu.org) and hit “find an agent.” The California Society of Tax Consultants (https://www.cstcsociety.org/) and the California Society of CPAs (www.calcpa.org) can help you find a tax preparer.

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

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Website Errors Raise Calls For Medicare To Be Flexible With Seniors’ Enrollment

Saturday is the deadline for most people with Medicare coverage to sign up for private drug and medical plans for next year. But members of Congress, health care advocates and insurance agents worry that enrollment decisions based on bad information from the government’s revamped, error-prone Plan Finder website will bring unwelcome surprises.

Beneficiaries could be stuck in plans that cost too much and don’t meet their medical needs — with no way out until 2021.

On Wednesday, the Centers for Medicare & Medicaid Services told Kaiser Health News that beneficiaries would be able to change plans next year because of Plan Finder misinformation, although officials provided few details. And the Medicare.gov website and representatives at Medicare’s call center had no information about that option.

The overhauled Plan Finder debuted at the end of August, and 2020 plan information was added in October. Over the past three months, Plan Finder problems reported to CMS by the National Association of Insurance Commissioners, the National Association of Health Underwriters, and state and national consumer advocates included inaccurate details about prices, covered drugs and dosages, and difficulty sorting and saving search results, among other things.

CMS made almost daily corrections and fixes to the website, which is the only tool that can compare dozens of private drug and medical plans ― each with different pharmacy networks, covered drugs and drug prices. The website provides information for more than 60 million people with Medicare and their families, as well as state Medicare counselors and the representatives who answer the 800-MEDICARE help line.

In an unsigned blog article published on a Medicare website last week, officials said they’re “not done improving the Plan Finder.” And they promised “in the coming months we’ll be scoping out additional improvements that we can implement based on lessons we learn this year.”

Although CMS has earned praise for responding to errors identified by Plan Finder users, some people may have signed up for plans before the mistakes were caught ― mistakes they may not notice until their coverage kicks in next year.

“Seniors should be able to choose the plans that work best for them,” said Sen. Susan Collins (R-Maine), chairwoman of the Senate Special Committee on Aging. “Issues with Medicare’s new Plan Finder website, however, have reportedly created confusion among beneficiaries as well as those assisting them.” She added that she was concerned “this problem even occurred.”

Medicare’s response, Collins said, “must be vigorous with extensive outreach to inform seniors of special enrollment periods.”

Sen. Bob Casey of Pennsylvania, the senior Democrat on that committee, also said Medicare needs to reach out so people know they can request a “special enrollment period” if they discover next year they made a wrong choice due to inaccurate Plan Finder information.

“People with Medicare must be aware that this reprieve exists and should not have to jump through hoops to qualify,” he said. The administration should “use all means necessary” to let beneficiaries know about their options for a special enrollment period.

In the statement to KHN Wednesday, CMS said it provides special enrollment periods for a number of reasons. It added that beneficiaries can get a special enrollment period related to Plan Finder issues anytime next year.

They can “call 1-800-MEDICARE and explain to our call center representatives that they have an issue with their plan choice. It is not CMS’s expectation that beneficiaries will have documentation or screenshots,” the statement said. The call center representatives “are trained and ready to help the beneficiary through the rest of the process.”

CMS officials refused to be identified but would not give a reason.

Information about Plan Finder special enrollment periods will be available on the Medicare.gov website and at the call center, a CMS spokesman said.

However, nothing was posted on the website Thursday, and when Kaiser Health News called Medicare twice Thursday, both representatives said it would not be possible to switch plans next year because of inaccurate information from the Plan Finder.

Applying for a special enrollment period could be tricky. In the blog post, Medicare officials said the information on the Plan Finder is “the most current and accurate information on premiums, deductibles and cost sharing that Medicare Advantage and Prescription Drug Plans provide.” They noted that the “information changes frequently because plans regularly update drug formularies and renegotiate drug prices.”

America’s Health Insurance Plans, the trade group representing health insurers, “is not aware of any systematic problems with the Plan Finder, which is operated by CMS,” said spokeswoman Cathryn Donaldson.

People who enroll in a private Medicare Advantage policy, an alternative to traditional government-run Medicare that covers both drugs and medical care, already have an alternative. They have until March 31 to change plans or enroll in traditional Medicare.

Collins and Casey are not the only members of Congress raising the issue. Sen. Sherrod Brown (D-Ohio) wants CMS to provide a special enrollment period in these cases and clearly communicate the details, a spokesman said.

Rep. Richard Neal (D-Mass.), who chairs the House Ways and Means Committee, believes Saturday’s deadline should be extended, a committee aide said. The committee has heard about the Plan Finder’s problems from numerous seniors’ advocates and counselors from state health insurance assistance programs, as well as the insurance companies that sell coverage.

Since enrollment for 2020 coverage began Oct. 1, the National Association of Health Underwriters, which represents 100,000 insurance agents, has sent CMS officials 54 Plan Finder problems and is still receiving reports from agents, said John Greene, the vice president for congressional affairs.

The Medicare counselors at Nebraska’s Senior Health Insurance Information Program  flagged more than 100 issues as of mid-November, said Alicia Jones, the program’s administrator.

After receiving complaints about the Plan Finder, Delaware’s insurance commissioner, Trinidad Navarro, issued a consumer alert last week.

Tatiana Fassieux, education and training specialist at California Health Advocates, said her organization wants CMS to offer a blanket, nationwide special enrollment period instead of  granting it case by case. The group helps train Medicare counselors for California’s Health Insurance Counseling and Advocacy Program, known as HICAP.

Leslie Fried has been an elder law attorney in Washington, D.C., since 1985, so imagine her surprise when she was stumped last weekend helping her mother pick a policy through the Plan Finder.

Fried, who is also senior director of the Center for Benefits Access at the National Council on Aging, did the same search three times for the least expensive plans that cover her mother’s drugs and came up with a different result each time.

“Beneficiaries should be able to have confidence in the Plan Finder after a single search,” she said.

For assistance reviewing drug and medical plans, call your state’s Senior Health Insurance Information Program at 877-839-2675 or the Medicare Rights Center at 800-333-4114.

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KHN’s ‘What The Health?’: We Spend HOW MUCH On Health Care?

Can’t see the audio player? Click here to listen on SoundCloud.

Health spending in the U.S. grew to $3.6 trillion in 2018, according to a new report from the federal government. The rate of growth — 4.6% — was up slightly from 2017’s 4.2%, despite the fact that nearly a million more Americans lacked insurance.

Meanwhile, Congress has less than two weeks to finish a year’s worth of work, including the spending bills required to keep the government running and promised legislation to address “surprise” medical bills and prescription drug prices.

This week’s panelists are Julie Rovner of Kaiser Health News, Kimberly Leonard of the Washington Examiner, Joanne Kenen of Politico and Mary Agnes Carey of Kaiser Health News.

Among the takeaways from this week’s podcast:

  • The share of the economy spent on health care actually declined slightly from 2017 to 2018 — from 17.9% to 17.7%. But that will come as small solace to consumers, for whom costs seem to be ever-rising. And it is consumers’ concerns driving the political health debate.
  • Congress does not appear likely to pass individual spending bills before the current federal spending bill expires Dec. 20. It appears they may have another temporary bill that would likely fund the government until February or March.
  • That temporary bill is a tempting target for people advocating for the permanent repeal of the Affordable Care Act’s Cadillac tax on generous health plans or a measure to help consumers avoid surprise medical bills when they get unexpected care from a doctor or hospital that is not in their insurer’s network of providers.
  • Democrats running for president have focused much of their health debate on whether to move toward a “Medicare for All” plan or some other government option, such as allowing people to join Medicare if they lack insurance. But even that scaled-back notion could be extremely disruptive to the employer insurance market. Then again, that’s what opponents of the ACA predicted, too, yet the law did not cause employers to drop coverage in large numbers.
  • Recent reports have documented a tense relationship between Health and Human Services Secretary Alex Azar and Seema Verma, the head of the Centers for Medicare & Medicaid Services. It’s not just personal — the disputes are having a very real impact on the work of the department.
  • A Senate committee this week approved the nomination of Stephen Hahn to be the head of the Food and Drug Administration. Although some senators raised questions about the White House’s apparent step back from banning flavored vaping products, it appears that Hahn’s nomination is likely to be approved by the full Senate.

Also this week, Rovner interviews KHN’s Markian Hawryluk, who wrote the latest KHN-NPR “Bill of the Month” installment about the high cost of removing a doll shoe from a toddler’s nose. If you have an outrageous medical bill you would like to share with us, you can do that here.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read, too:

Julie Rovner: The New York Times’ “How a Divided Left Is Losing the Battle on Abortion,” by Elizabeth Dias and Lisa Lerer

Joanne Kenen: The BBC’s “How a wrong injection helped cause Samoa’s measles epidemic

Kimberly Leonard: The Los Angeles Times’ “Their kids died on the psych ward. They were far from alone, a Times investigation found,” by Soumya Karlamangla

Mary Agnes Carey: The Washington Post’s “How a fight over health care entangled Elizabeth Warren — and reshaped the Democratic presidential race,” by Annie Linskey, Jeff Stein and Dan Balz

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcherGoogle PlaySpotify, or Pocket Casts.

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Candidates Are Betting Big On Health. Is That What Voters Really Want?

The one thing we know about health care in the 2020 Democratic presidential primary race is that it’s a top issue for voters.

The latest Tracking Poll from the Kaiser Family Foundation found 24% of Democrats and Democratic-leaning independents said they want to hear the candidates discuss health care. That’s twice the total for the next top issue, climate change; and four times the total for immigration, the No. 3 issue. (Kaiser Health News is an editorially independent program of the foundation.)

The big question, though, is whether that interest will reward a candidate who backs a sweeping, “Medicare for All”-type plan, or a more modest plan like a public option, in which a person can voluntarily join a government health insurance plan.

Polling doesn’t make that clear. On the one hand, Democrats and Democratic-leaning respondents in the KFF poll say when it comes to health care, the candidate they trust most is Sen. Bernie Sanders of Vermont (who initially pushed a Medicare for All plan).

Yet those same people say they prefer a public option (of the sort supported by former Vice President Joe Biden) to Sanders’ Medicare for All plan. That bears out in a separate Quinnipiac poll released last week, in which 36% of respondents say Medicare for All is a good idea while 52% say it is a bad idea. An NBC/Wall Street Journal poll from September found similar results: 67% of respondents said they would support allowing people under age 65 to “buy their health coverage through the Medicare program,” while only 41% favored “adopting Medicare for All, a single payer health care system in which private health insurance would be eliminated.”

So, what the candidates now face is a question of strategy and tactics. Sanders remains all-in on Medicare-for-All. “I wrote the damn bill,” he keeps reminding reporters. Biden and the rising-in-the-polls Pete Buttigieg, the mayor of South Bend, Ind., are firmly in favor of a more moderate approach. “We take a version of Medicare. We let you access it if you want to. And if you prefer to stay on your private plan, you can do that, too,” Buttigieg said at the Democrats’ October debate. “That is what most Americans want.”

Sen. Elizabeth Warren of Massachusetts looks like she is trying to have it both ways. She has unveiled a far more detailed version of Medicare for All than Sanders or other backers of the concept in Congress. And her campaign has unveiled a “first-term” health plan that could be implemented quickly, moving to a broader Medicare for All system later in her first term. (Even Warren’s transitional plan is more expansive than either Biden’s or Buttigieg’s plan.)

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Who’s right? There’s no good way to tell until voters go to the polls. But it might surprise people that the last time a health overhaul was a major issue in the Democratic presidential primary race ― in 2008 ― it wasn’t the candidate with the most sweeping plan who emerged as the winner.

Then-Sen. Hillary Clinton had a more sweeping plan for health care than her Senate colleague Barack Obama did. Clinton called for a cap on out-of-pocket medical expenses, and an “individual mandate,” the requirement (repealed by Republicans in 2017) that people either prove they have coverage or pay a fine.

Obama resisted many of those specifics, particularly the mandate. “In order for you to force people to get health insurance, you’ve got to have a very harsh stiff penalty,” he said at a debate in February 2008. Eventually he called for a mandate that all children have coverage. Obama did not fully embrace the mandate that would become part of the Affordable Care Act until mid-2009, during the congressional debate.

But Democratic primary voters have moved significantly to the left since 2008, Medicare for All proponents say.

That is clearly the case. But if Democrats are to keep control of the House of Representatives, they will need to keep the loyalty of those independent voters in districts that are far more moderate than those represented by left-leaning lawmakers like Alexandria Ocasio-Cortez (D-N.Y.) and Ilhan Omar (D-Minn.), who are pressing for major changes including the passage of a Medicare for All plan.

The key to all this, of course, is threading the political needle in a way that keeps the enthusiasm of the Democrats’ Medicare for All base, while not scaring away voters in swing areas who fear such major changes. So far, not one of the presidential candidates has found that perfect spot. The one who does could well be the next president.

HealthBent, a regular feature of Kaiser Health News, offers insight and analysis of policies and politics from KHN’s chief Washington correspondent, Julie Rovner, who has covered health care for more than 30 years.

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