Obamacare: Health Industry News Recap: 7/20-7/24 – What we learned this week

Affordable Care Act

Obamacare: Health Industry News Recap: 7/20-7/24 – What we learned this week

Published on July 27, 2015

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  • More Americans paid for an Obamacare fine than expected:

According to The Treasury Department, about 7.5 million taxpayers so far have paid a penalty on their taxes for failing to have health insurance last year.
Along with changes to the health insurance system that guarantee access to coverage to everyone, the Affordable Care Act includes a requirement that many people be insured or pay a tax penalty.
The average penalty was about $200 per person and a total of $1.5 billion was collected by the IRS in these fines. However, officials stressed that 85 percent of people who paid the fines ended up with a net tax refund from the IRS.
This was the first year in which the IRS was dealing with many issues related to the Affordable Care Act. About 76 percent of taxpayers, which is about 102 million returns—simply checked a box on their return to indicate they had health coverage throughout the year, and were not required to do anything else to comply with the ACA.
However, those who received a federal subsidy to help pay for their plans, were required to file forms showing what they received in subsidies, and what they actually should have received.
About 50 percent of subsidized customer’s owed money back and about 40 percent didn’t receive enough of their subsidy in which case the IRS owed them money.
Read more: (CNBC) (Marketwatch)

  • Anthem announces it will buy Cigna

Anthem, the nation’s second largest health insurer has announced it will acquire Cigna; the nation’s fifth largest in a $54.2 billion deal.  This deal confirms that the number of major health insurers in the United States will shrink to just three if they both pass state regulatory approvals and other requirements. Earlier this month Aetna agreed to acquire Humana for $37 billion.
With just Aetna, Anthem, and UnitedHealth controlling much of the health industry space, many are concerned that costs for customers will go up because of less competition.
So, should consumers be worried?
In an interview with Aetna’s chairman and chief executive, Mr. Bertolini states the merger would allow Aetna and Humana to adapt to an environment where consumers increasingly choose their coverage on exchanges like the one created under the law, or similar online marketplaces offered by employers. (The New York Times)
Matt Asensio, a spokesperson for Cigna insists that, “This will actually improve efficiencies and reduce costs for consumers down the line.”
While the health insurers are defending their moves, there are many who say otherwise.
Tucker Sharp, chief broking officer for Aon Health, said, “The DOJ and FTC are going to look at this hard. They were already concerned that there wasn’t enough competition.”
Read more: (CNN Money), (The Washington Post)

  • Can employers benefit by using a private exchange?

Employees at John Henry Foster, an equipment distribution firm based in Minnesota, are happy with the new change in employer benefits regarding health insurance.
Not only does each worker receive money from the company, but they are also directed to an online exchange- a private, secure website that offers the selection of plans for side-by-side comparison, that offers them a large selection of choices.
Why did John Henry Foster change?
In 2012, the company was facing a 30 percent increase in its costs for employee medical benefits.
Jan Hawkins, co-owner of John Henry Foster and many company leaders decided to sign up for a private exchange run by Medica, a Minnesota insurer, because they could choose to spend only about 10 percent more on health benefits in the first year, instead of that 30 percent increase projected under the old plan.
Since then, the firm has increased the money it gives employees to spend on health insurance by roughly 10 percent each year.
Read more: (NPR)
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