Delays of Big ACA Taxes Won’t Necessarily Benefit Health Insurers, Ratings Company Says

The health-care industry seemed to have been among the biggest winners in the $1.1 trillion Omnibus appropriations act for fiscal 2016 signed Dec. 18 by President Barack Obama.  But Fitch Ratings has a different take on that.

A 2017 reprieve on the health insurance tax on premiums – a source of $8 billion in government revenue in 2014 and an estimated $14.3 billion by 2018, and the delay in 2018 and 2019 of the “Cadillac” excise tax on high-cost employer-sponsored plans “make insurance policies more affordable, but do not necessarily result in economic benefit for the insurers,” the ratings service said.

Meanwhile, the appropriations law continues to block payments other than from other health insurers on an Affordable Care Act program called “risk corridors,” intended to be a risk-sharing backstop from 2014 through 2016 for insurers that have high medical claims. Led by presidential aspirant Sen. Marco Rubio (R-Fla.), who calls the program a “bailout” for insurers, government appropriations were also blocked for the program in fiscal 2015.

“With the Omnibus bill’s passage, such backstops appear unlikely, at least until the next US administration is in place,” Fitch said.

Because many health insurers offering plans in the ACA marketplaces aren’t making much money, payments under the risk corridors program were limited to less than 13 percent of claims for calendar 2014. As a result, many non-profit CO-OP plans started with government funding under the ACA, which were already in financial trouble, are closing.

Source Link

Recommended Articles

Lawmakers, Payers And Providers All Air Grievances With Federal No Surprises Act Implementation

Amid a flurry of partisan roadblocks rolling out across Capitol Hill, representatives on both sides of the aisle came together Tuesday to critique federal agencies’ rollout of the No Surprises Act and throw their support behind court-ordered rewrites of independent dispute resolution (IDR) regulations. During a hearing exploring the “flawed implementation” of the law intended ...

Read More

As Biden Plans To Ban Medical Debt From Credit Scores, Advocates Press For More Change

The dramatic impact of medical debt on credit scores may soon be a thing of the past. On Thursday, the White House announced a plan outlined by the Consumer Financial Protection Bureau (CFPB) to eliminate medical debt from credit reports. The move — which follows an earlier decision from the three main credit bureaus to eliminate paid medical debt, medical ...

Read More

Compliance With The CAA’s Gag Clause Prohibition

The Consolidated Appropriations Act (CAA) of 2021 made a number of federal changes to the U.S. health care system, with the goal of increasing transparency. One of the most immediate changes was the prohibition of gag clauses in contracts between insurance plans, insurance issuers, and providers. Gag clauses are contractual provisions that restrict plans or ...

Read More

Answers To Q4 Frequently Asked Questions

Throughout the year, especially during Q4, we know you are bound to have questions about Underwriting, Client Experience, Enrollment, and Compliance. That’s why we’ve compiled this list of the most frequently asked questions (FAQs) during peak season.

Read More