Affordable Care Act
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H&R Block executives announced on Tuesday that most people who got tax credits to buy insurance under the federal health law will be repaying part of them for the second year in a row. H&R Block reports that, to date, 60% of taxpayers who enrolled in the marketplace and received the Advance Premium Tax Credit (APTC) must return a portion of the APTC at tax time. The average amount paid back is higher is $579 this year, nearly $50 higher than last tax season when it was $530.
The 2015 tax year was the second year that the mandate was in place, which means that it was also the second year for calculating the applicable penalty or credit. Taxpayers who underestimated their income in order to figure the credit had to repay a portion of the credit: those taxpayers received an average refund of just $2,022.
H&R Block estimates that just 3% of taxpayers guessed closely enough to have no impact on their tax return.
“With millions of new marketplace enrollees going through the reconciliation process for the first time we expected to see some confusion,” said Mark Ciaramitaro, vice president of H&R Block taxes and health care services. “But the fact a majority of returning marketplace enrollees are underestimating and having to pay back a portion of the APTC signals there is still a steep learning curve on how to accurately estimate income in applying for the premium tax credit when enrolling in a marketplace plan. This also may be due to the typical higher year-over-year income variability among lower income households.”
Read more: (Forbes, The Wall Street Journal)
The Obama administration says it will begin rating health insurance plans based on how many doctors and hospitals they include in their networks.
The administration also announced the maximum out-of-pocket costs for consumers under the Affordable Care Act will increase next year to $7,150 for an individual and $14,300 for a family.
Under new rules to be published Tuesday in the Federal Register, insurers will still be allowed to sell health plans with narrow networks of providers. But consumers will know in advance what they are getting because the government will attach a label indicating the breadth of the network for each plan sold on HealthCare.gov.
While many consumers disagree about the changes, there are many that this could potentially really help. Consumers can already find out which health plans include a specific doctor. But until now they had no reliable way to determine if a health plan had a large or small network of providers. The new ratings will indicate how the coverage of a health plan’s network compares with that of other plans in the same geographic area.
Read more: (The New York Times)
Lawmakers in at least 11 states have introduced legislation that would require pharmaceutical companies to justify their prices by disclosing how much they spend on research, manufacturing and marketing.
Unlike many other countries, drug makers in the U.S. face no limits on the prices they can charge. Many have seen those prices steadily increase over time. According to AARP, the prices of medications rose 9.4 percent between 2006 and 2013, compared to a general inflation rate of 1.5 percent. Spending on prescription drugs rose by 12.2 percent in 2014, while overall health care spending grew by 5.3 percent, according to the federal government.
A handful of transparency bills were filed last year, but none of them passed. Massachusetts state Sen. Mark Montigny says continued exposures about high prices have only strengthened support for such legislation.
Read more: (The Pew Charitable Trusts)