• Tag Archives Obamacare

  • New EEOC Rules Allow Employers to Pay for Employees’ Health Information

    Posted on by Azrael Comment

    The Affordable Care Act (ACA) provisions for employee wellness programs give employers the power to reward or penalize their employees based on whether they complete health screenings and participate in fitness programs. While wellness programs are often welcomed, they put most employees in a bind: give your employer access to extensive, private health data, or give up potentially thousands of dollars a year.

    Sadly, the Equal Employment Opportunity Commission’s (EEOC) new regulations, which go into effect in January 2017, rubber stamp the ACA’s wellness programs with insufficient privacy safeguards. Because of these misguided regulations, employers can still ask for private health information if it is part of a loosely defined wellness program with large incentives for employees.

    As EFF’s Employee Experience Manager, I had hoped the EEOC’s final ruling would protect employees from having to give up their privacy in order to participate in wellness programs. Upon reading the new rules, I was shocked at how little the EEOC has limited the programs’ scope. Without strict rules around how massive amounts of health information can be bought from employees and used, this system is ripe for abuse.

    Employers are already using wellness programs in disturbing ways:

    • The city of Houston requires municipal employees to tell an online wellness company about their disease history, drug use, blood pressure, and other delicate information or pay a $300 fine. The wellness company can give the data to “third party vendors acting on our behalf,” according to an authorization form. The information could be posted in areas “that are reviewable to the public.” It might also be “subject to re-disclosure” and “no longer protected by privacy law.”
    • Plastics maker Flambeau terminated an employee’s insurance coverage when he chose not to take his work-sponsored health assessment and biometric screening.
    • A CVS employee claimed she was fined $600 for not submitting to a wellness exam that asked whether she was sexually active.
    • The Wall Street Journal reported in February that “third party vendors who are hired to administer wellness programs at companies mine data about the prescription drugs workers use, how they shop and even whether they vote, to predict their individual health needs and recommend treatments.”
    • Castlight (a wellness firm contracted by Walmart) has a product that scans insurance claims to find women who have stopped filling their birth-control prescriptions or made fertility related searches on their health app. They match this data with a woman’s age and calculate the likelihood of pregnancy. This individual would then receive targeted emails and in-app messages about prenatal care.

    What’s New in the EEOC Rules

    The EEOC now provides guidance on the extent to which employers may offer incentives to employees to participate in wellness programs that ask them to answer disability-related questions or undergo medical examinations. The maximum allowable “incentive” or penalty an employer can offer is 30% of the total cost for self-only coverage of the plan in which the employee is enrolled. This can add up to thousands of dollars for an employee per year.

    According to the new rule, employers may only receive information collected by a wellness program in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals—except as necessary to administer the plan. This “as necessary to administer the plan” exception is alarming given that employers are permitted to base incentives and penalties on health outcomes and not just participation. Measuring outcomes typically involves gathering information on specific individuals over time.

    The EEOC rejected a suggestion that would have allowed individuals to avoid disclosing medical information to employers if they could produce certification from a medical professional that they are under the care of a physician and that identified medical risks are under treatment. The EEOC’s stated reason was that this could undermine the effectiveness of wellness programs as a means of collecting data and was unnecessary.

    Why This Matters

    A statement by the American Association of Retired Persons (AARP) expressed the organization’s deep disappointment with the workplace wellness program final rules:

    By financially coercing employees into surrendering their personal health information, these rules will weaken medical privacy and civil rights protections.

    The American Society of Human Genetics also issued a statement opposing the EEOC final ruling for weakening genetic privacy:

    The new EEOC rules mean that Americans could be forced to choose between access to affordable healthcare and keeping their health information private… Employers now have the green light to coerce employees into providing their health information and that of their spouse, which in turn reveals genetic information about their children.

    The ACA was touted as a campaign to put consumers back in charge of their health care. EEOC rules do anything but. Employees should have the right to refuse invasive health surveys without fear of being punished with higher healthcare costs. Incentivizing Americans to be proactive about our health is smart, but putting loads of unnecessary private information into employers’ hands is bad policy.

    Source: New EEOC Rules Allow Employers to Pay for Employees’ Health Information | Electronic Frontier Foundation


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  • How Obamacare is Destroying Healthcare Access

    Posted on by Azrael Comment

    The ongoing cluster-you-know-what of Obamacare is a source of unhappy satisfaction.

    Part of me is glad the law is such a failure, but it’s tragic that millions of people are suffering adverse consequences. These are folks who did nothing wrong, but now are paying more, losing employment, suffering income losses, and/or being forced to find new plans and new doctors.

    And it seems we get more bad news every day, as noted in a new editorial from Investor’s Business Daily.

    ObamaCare rates will skyrocket next year, according to its former chief. Enrollment is tumbling this year. And a big insurer is quitting most exchanges. That’s what we learned in just the past few days.

    Why do we know these three bad things are happening? Because that’s what we’re being told by Mary Tavenner, the former head of the Center for Medicare and Medicaid Services for the Obama administration, who has now cashed out and is pimping for the health insurance companies that got in bed with the White House to foist Obamacare on the American people.

    IBD gives us the sordid details.

    Why will 2017 rates spike even higher? In addition to the cost of complying with ObamaCare’s insurance regulations and mandates, there’s the fact that the ObamaCare exchanges have failed to attract enough young and healthy people needed to keep premiums down. Plus, two industry bailout programs expire this year, Tavenner notes.

    Oh, and she admits that people are gaming ObamaCare just like critics said they would: buying coverage after they get sick — since insurance companies can no longer turn them down or charge them more — then dropping it when they’re done with treatments. “That churn increases premiums. So you have to kind of price over that.”

    And that’s just one slice of bad news.

    Here’s more.

    ObamaCare enrollment has already dropped an average of more than 14% in five states since February — a faster rate of decline than last year — as people get kicked off for not paying premiums. Finally, we learned on Tuesday that UnitedHealth Group (UNH) is planning to drop out of almost every ObamaCare market it currently serves after losing $1 billion on those policies. …

    Skyrocketing premiums, fewer choices in the marketplace, and people fleeing ObamaCare in droves after signing up. This isn’t exactly what Obama promised when he signed ObamaCare into law.

    For those who were paying attention, none of this is a surprise. It was always a fantasy to think that more government intervention was going to improve a health care system that already was cumbersome and expensive because of previous government interventions.

    By the way, IBD isn’t the only outlet to notice the ongoing disaster of Obamacare.

    Let’s look at some other recent revelations.

    Chris Jacobs writes, “For millions of Americans, the Left’s insurance utopia has rapidly deteriorated into a bleak dystopia,” while “the ‘cheaper prices’ that the president promised evaporated as quickly as the morning dew.”

    John Graham explains that “CBO estimates Obamacare will leave 27 million uninsured through 2019 – an increase of almost one quarter” and that “CBO estimates 68 million will be dependent on the [Medicaid] program this year through 2019 – an increase of almost one third in the welfare caseload.”

    Betsy McCaughey opines, “Obamacare is already hugely in the red. … Over the next ten years Obamacare will add $1.4 trillion to the nation’s debt,” and “Insurers struggling with Obamacare are already drastically reducing your choice of doctors and hospitals to cut costs.”

    Devon Herrick reveals that “Obamacare has caused more people to reach for their wallets after a medical encounter — not less” and that “all but the most heavily subsidized Obamacare enrollees would be better off financially if they skipped coverage and pay for their own medical care out of pocket.”

    Jeffrey Anderson observes that “it seems possible that Obamacare has actually reduced the number of people with private health insurance” and that “Obamacare is basically an expensive Medicaid expansion coupled with 2,400 pages of liberty-sapping mandates.”

    John Goodman notes that “Prior to Obamacare, many employers of low-wage workers offered their employees a “mini med” plan, covering, say, the first $25,000 of expenses” and that “Those plans are now gone… employees…are…completely uninsured”

    The CEO of CKE Restaurants warns that “fewer people buying insurance through the exchanges, the economics aren’t holding up” and that “Ten of the 23 innovative health-insurance plans known as co-ops — established with $2.4 billion in ObamaCare loans — will be out of business by the end of 2015 because of weak balance sheets.”

    Critics of Obamacare now get to say “we told you so.”

    As the Washington Examiner editorialized:

    Conservatives screamed a simple fact from the rooftops: Obamacare will not work. No one wanted to listen then, but their warnings are now coming into fruition.

    Obamacare, as constructed, attempted to fix a dysfunctional health care payment system by creating an even more complicated system on top of it, filled with subsidies, coverage mandates, and other artificial government incentives. But its result has been a system that plucked Americans out of coverage they like and forced them to pay more for less. …

    Taxpayers and insurance customers alike should demand replacing Obamacare with a system that reduces costs and improves quality by injecting actual choice and competition into the insurance market.

    I especially like the last part of that excerpt — which is why we need to go well beyond simply repealing Obamacare if we want to restore market forces to the health care sector.

    Source: How Obamacare is Destroying Healthcare Access | Foundation for Economic Education


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  • UnitedHealthcare Is the Canary in the Obamacare Coal Mine

    Posted on by Azrael Comment

    With Congress limiting the bailouts of insurance companies for two years in a row, business is not looking good for the industry that lobbied for Obamacare. The latest casualty is UnitedHealthcare, which announced that it is withdrawing from most of its 34 Obamacare exchanges next year.

    Announcing the decision during a first quarter earnings conference call, UnitedHealthcare CEO Stephen Hemsley said, “The smaller overall market size and shorter-term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis.”

    Due to congressional limits on insurance company bailouts, in October the Department of Health and Human Services transferred $362 million to loss-making insurance companies, rather than the $2.9 billion that they requested.

    The Health Insurance Association of America, under the leadership of Karen Ignagni, lobbied heavily in favor of the Affordable Care Act. But now the pool of insured is smaller and sicker than they anticipated.

    UnitedHealthcare and other insurance companies thought that they would have a captive market of young, healthy people who would be forced to sign up for expensive policies with the threat of penalties. The premiums from these young people, who do not use much health care because they are rarely sick, would be used to pay for the care of the old and the chronically-ill.

    The Affordable Care Act was unfairly structured so that younger healthy Americans would to pay for everyone else — even though the young have higher unemployment rates, less disposable income, more student loans, and fewer assets.

    Little did these insurance companies know that enrollment would fall far short of predictions. Enrollment in the exchanges is estimated by Health and Human Services Secretary Sylvia Burwell to be 12.7 million in 2016, compared with 22 million predicted by the Congressional Budget Office in May 2013. Insurance companies are not getting enough premiums to cover the costs of treating enrollees.

    Just because insurance companies bet wrong, it does not mean that Uncle Sam should bail them out.

    The problem is that the Affordable Care Act is simply unsustainable, as I forecast in a column written in December, 2009. It mandates a generous, comprehensive plan that is also expensive. Young, healthy people do not want to sign up because the premiums are far higher than their healthcare costs. They rightly do not see why they have to buy a plan with pediatric dental care even if they have no children, and mental health and drug abuse coverage if they do not need it. Many would buy a simple plan, covering major catastrophic expenses, but such plans are not allowed to be sold on the exchanges.

    People who are signing up for Obamacare are disproportionately sicker than average and have chronic health conditions that make them more expensive to insure.

    Insurance companies were relying on payments from the federal government to constrain their losses as part of a device known as “risk corridors.” Risk corridors allow the government to bear a portion of the costs if they become too high. Section 1342 of the Affordable Care Act states that the Secretary of HHS can reimburse insurance companies if the costs of covering sick people exceed the premiums received. However, the Act did not provide an appropriation for these funds.

    Both the Congressional Research Service and the U.S. Government Accountability Office have ruled that a congressional appropriation is required before federal agencies can make risk corridor payments for losses incurred under the Affordable Care Act.

    UnitedHealthcare cannot make money without government funds. Its action follows the closure of numerous healthcare cooperatives, such as the Kentucky Health Cooperative (51,000 members), Health Republic Insurance of New York (150,000 members), CoOportunity Health in Iowa and Nebraska (120,000 members), the Louisiana Health Cooperative (17,000 members), and Nevada Health CO-OP (14,000 members).

    Obamacare might collapse if the health insurance companies continue to withdraw from the exchanges.

    If Congress holds its ground during the appropriations process and refuses to bail out the insurance companies for fiscal 2017, it is likely that more of them will withdraw from the exchanges, raising prices for existing customers. Premiums rose in some markets by 20 percent in 2016, leading to more healthy young people dropping out of plans or not enrolling, accelerating the financial imbalance.

    Look at UnitedHealthcare as the canary in the coal mine, and expect more withdrawal announcements in the future.

    Source: UnitedHealthcare Is the Canary in the Obamacare Coal Mine | Foundation for Economic Education


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