Princess Health andAs income taxes are filed, half who got Obamacare subsidy will have to pay part of it back; almost as many will get a refund.Princessiccia

Princess Health andAs income taxes are filed, half who got Obamacare subsidy will have to pay part of it back; almost as many will get a refund.Princessiccia

health insurance insurance exchange obamacare Patient Protection and Affordable Care Act taxes

Gusty 16:42 Add Comment

By Melissa Patrick
Kentucky Health News

This week will go down in history as the first time the Internal Revenue Service enforced the Patient Protection and Affordable Care Act's tax penalty for those who can afford insurance but didn't buy it.

The penalty for those who don't qualify for an exemption is $95 per adult and $47.50 per child, or 1 percent of your income, whichever is larger. The penalty will increase next year to the greater of $325 per adult or 2 percent of household income.

"Ever since its passage, the mandate that every American have health insurance has been at the heart of the controversy over the ACA," Elaine Kamarck writes for the Brookings Institution. It was an issue long before the law passed; in the 2008 presidential primaries, Hillary Clinton favored it and Barack Obama opposed it; as president, he changed his mind.

Tens of thousands of Kentuckians who got subsidies to help pay for their health insurance through the Kynect exchange will probably be surprised to find that they will have to repay some of the subsidy, or that they will get a refund, depending on the difference in their actual income level and the income that was recorded at the time they bought insurance. Most incomes were likely based on an estimated income for the year. Generally, if you overestimated your 2014 income, you will get a refund. If you underestimated it, you will have to repay some or all of the subsidy, which was subtracted from the "sticker price" of insurance to calculate your premium.

Infographic from Kaiser Family Foundation

A study by the Kaiser Family Foundation estimates that 50 percent of Americans who got 2014 tax subsidy will owe some money, and 45 percent will receive a refund. The foundation estimates the average repayment will be $794 and the estimated average refund to be $773.

Some reasons for the income differences are getting a raise, losing a job, and working a different number of hours; and non-job factors such as a change in family size as a result of births, deaths or divorce. These changes should be reported when they occur, so subsidies can be modified, but often aren't, says the Kaiser Family Foundation.

John Ydstie of NPR reports some real examples of policyholders facing these surprises. He tells the story of one person who makes $30,000 a year who decided to take less than her estimated $250-a-month premium subsidy because of her uncertainty about the program, and is getting a $3,900 refund. He notes that most people on Obamacare can't afford to do this.

Ydstie also tells the story of a young woman whose monthly subsidy dropped to $60 from $250 after she married her longtime partner in 2014 and their combined incomes bumped them into a different category. They have to pay back $1,800 but are hoping the amount will be adjusted to $400, to apply only to the months they were married; this has not yet been determined.

As the IRS implements the law, it is faced with budget, staffing, and operational cuts, Kamarck writes: "Given the staff limitations of the IRS and the complexity of reporting and reconciling the government subsidies in the law with people�s income there is likely to be confusion, frustration and, most importantly, a lot of people who find out that their tax refund is a great deal smaller than they anticipated." She suggests that the IRS, in order to survive the first tax season with the ACA, "give taxpayers a break whenever it can."

Princess Health andAs tax deadline nears, most uninsured appear likely to choose penalty; some with coverage are having to refund part of subsidy.Princessiccia

Princess Health andAs tax deadline nears, most uninsured appear likely to choose penalty; some with coverage are having to refund part of subsidy.Princessiccia

health insurance health reform income insurance insurance coverage obamacare taxes

Gusty 09:16 Add Comment

Kentucky Health News

Most people facing a tax penalty for not having health insurance appear likely to pay it instead of taking advantage of a special opportunity to but coverage and minimize the penalty.

"Major tax-preparation firms say many customers are paying the penalty and not getting health insurance," reports Stephanie Armour of The Wall Street Journal. "Research also suggests that many people who lack health insurance will pay the penalty and not get covered this year."

Many polls have found that many if not most people without health insurance are unaware that they are subject to a tax penalty under the federal health-reform law. That percentage appears to be declining as they prepare their income-tax returns, but a poll taken in late February found that when told of the penalty, only 12 percent of the uninsured said they would get coverage.

For many people, the choice is simply financial, since coverage for them would be more expensive than the penalty -- 1 percent of their income, or $95 per adult or $47.50 per child, whichever is larger. Others say they don't need coverage, and some object to the penalty or the law altogether.

The penalty will increase to 2 percent of income and $325 per adult or $167.50 per child for the 2015 tax year, so if you are uninsured and don't qualify for Medicaid or one of the law's exemptions, the end of the special enrollment period, April 30, is the last chance to avoid that penalty.

"In late February, H & R Block reported that its uninsured clients had paid an average penalty of $172," reports Abby Goodnough of The New York Times. "The money comes out of refunds, while people who do not get refunds are required to pay the Internal Revenue Service by April 15."

Some people who have coverage "might find another unpleasant surprise: As many as half the nearly 7 million Americans who got subsidies to offset their premiums may have to refund money to the government, according to an estimate by H & R Block," the Journal reports. "The subsidies are based on consumers� own projections of their 2014 income, but some estimated incorrectly and received overly generous credits. Those people will see smaller-than-expected refunds or could owe the government money."

"H & R Block also found that as of Feb. 24, just over half of its clients with subsidized marketplace coverage had to repay a portion of their subsidy because their 2014 income turned out to be higher than what they estimated when they applied for coverage," the Times reports. "The process includes "new forms that even seasoned preparers are finding confusing."

The Obama administration announced last month that 800,000 people with insurance bought under the reform law had received incorrect information needed for their tax returns. About 10 percent of them have still not received corrected forms, it announced Friday. "The administration said people who have not received the corrected forms do not have to wait to file their taxes and will not have to pay any additional tax due to the effort," The Hill reports.

The Wall Street Journal reports, "Consumers who already filed their tax returns using the incorrect forms provided though state or federal exchanges won�t be required to file amended forms, and the Internal Revenue Service won�t assess additional taxes, said Mark Mazur, the Treasury Department�s assistant secretary for tax policy."

Princess Health and Princess Health andPaducah Sun editorial criticizing Medicaid expansion was off base; Beshear sends the newspaper a response.Princessiccia

Princess Health and Princess Health andPaducah Sun editorial criticizing Medicaid expansion was off base; Beshear sends the newspaper a response.Princessiccia

health reform jobs Medicaid newspapers obamacare research state budget state government taxes

Gusty 18:58 Add Comment

By Al Cross
Kentucky Health News

The Paducah Sun relied on incomplete and inaccurate information for an editorial Thursday that criticized Gov. Steve Beshear's expansion of the Medicaid program under federal health-care reform, and the governor is complaining about it.

The newspaper said Beshear had created a "financial mess" because when he was running for governor, he "told our editorial board that he had 'no idea where we would get the money' to pay the state's share of the cost of Medicaid expansion if the Affordable Care Act was passed. He still doesn't."

Actually, when he announced the Medicaid expansion a year ago, Beshear cited a study by the international accounting firm PricewaterhouseCoopers which concluded that the expansion would pay for itself by adding patients to the health-care system and creating 17,000 jobs by the 2020-21 fiscal year.

The editorial made no mention of the study. Beshear's communications director, Kerri Richardson, told the paper Tuesday that the editorial was "grossly misleading, and we are disappointed that your editorial board has chosen not to seek information from anyone in our administration regarding actions on the Affordable Care Act."

In the formal response from Beshear, submitted for publication, the governor says the editorial "was so breathtakingly disingenuous that it demands a factual response. That a newspaper of this size would trot out such unsubstantiated tripe disguised as analysis is a disservice to its readers."

Sun Editor Steve Wilson said the editorial was written by Publisher Jim Paxton, who did not return a call seeking comment. The Sun's editorials generally support conservative causes and Republicans; Beshear is a Democrat and the only Southern governor to both expand Medicaid and create a health-insurance exchange under the reform law.

The editorial also misstated when Kentucky would have to start sharing in the cost of care for the newly eligible Medicaid recipients, those with household incomes between 69 percent and 138 percent of the federal poverty level. It cited a study by the conservative Heritage Foundation which "suggests that even when savings from ACA managed-care features are added in, the expansion will cost Kentucky an additional $846 million between 2014 and 2022."

Actually, the state will not have to pay anything for the newly eligibles until 2017 because the federal government will pick up the entire cost until then. In 2017, the state will have to pay 5 percent of their cost, rising to a cap of 10 percent in 2020. Republican critics of the law have said the cap will have to be raised, but have not found fault with the study.

Studies by the accounting firm and the University of Louisville's Urban Studies Center, drawing on Congressional Budget Office data, estimated the state would actually gain $802 million through the 2020-21 fiscal year from Medicaid expansion. "Without expansion, our budget would see a negative impact of nearly $40 million, because we would be forced to absorb costs such as increased payments to hospitals for uncompensated care, " Beshear wrote. "In other words, the state would lose money if we didn�t expand." Click here for the rest of his reply.

Beshear said in his response that he sent the Sun an op-ed piece a year ago this week explaining the facts, but the paper apparently refused to publish it.

Princess Health and Princess Health andTobacco is top target in Beshear's health plans, but he still praises expansion of plant that makes smokeless tobacco.Princessiccia

Princess Health and Princess Health andTobacco is top target in Beshear's health plans, but he still praises expansion of plant that makes smokeless tobacco.Princessiccia

cigarette tax economy jobs local government smoking state government taxes tobacco

Gusty 14:27 Add Comment

Gov. Steve Beshear says tobacco is the main cause of Kentuckians' relatively poor health, which he is pushing to improve, but on Feb. 27 "his tone shifted as he praised the economic benefits from a tobacco company's plans to expand its Western Kentucky processing operations for smokeless tobacco products," reports Bruce Schreiner of The Associated Press.

U.S. Smokeless Tobacco Co., an Altria Group subsidary that makes Copenhagen and Skoal from local tobacco, says it will spend $118 million and create 42 jobs as it expands its 90-employee plant in Hopkinsville. Beshear called that "proof that Kentucky is a great place to grow a business." If the company creates the predicted number of jobs, it could get $4.5 million and $1.4 million, respectively, in state and local tax breaks.

Tobacco farming is a smaller part of Kentucky's economy today than it was for most of the 20th Century, but Schreiner notes the state has the nation's highest percentage of smokers and "has the worst or near-worst rates for smoking, cancer deaths, heart disease and high blood pressure." Smokeless tobacco is linked to cancer of the mouth, throat and esophagus.

Those are among the reasons Beshear's tax-reform plan would raise levies on cigarettes and smokeless tobacco. "He also touts legislation calling for a statewide smoking ban at workplaces and in public buildings," Schreiner notes. "Altria opposes any tobacco tax increases."

The American Cancer Society says smokeless tobacco can cause nicotine addiction, which can lead to smoking, and can also lead to gum disease and tooth decay. Oral health is one of the seven main points in Beshear's recently announced plan to improve the state's health, Schreiner notes.

Princess Health and Knox County converting ambulance tax, taking 3/8 of health tax and asking library for same in order to save hospital.Princessiccia

Princess Health and Knox County converting ambulance tax, taking 3/8 of health tax and asking library for same in order to save hospital.Princessiccia

county health departments critical access hospitals health departments hospitals rural health taxes

Gusty 13:55 Add Comment

The Knox County Fiscal Court and the Knox County Board of Health reached a deal Monday to aid its debt-laden county hospital's recovery from bankruptcy by diverting, at least temporarily, 37.5 percent of local health tax revenue to the hospital, asking the local library to do likewise and converting an ambulance tax into a hospital tax.

The proposed agreement is "revenue neutral" and would not create any additional tax for Knox County residents while allowing the Knox County Hospital in Barbourville to stay open, writes Jeff Noble of The Times-Tribune in Corbin.

To save the hospital, the hospital board needs a tax of about 8 cents per $100 worth of property, County Judge-Executive J.M. Hall said. The deal would convert a 5-cent ambulance tax to a hospital tax, and the county health board has agreed to shift 1.5 cents of its 4-cent tax to the hospital. The library board is considering similar action, which would make up the total 8 cents, Hall told Noble.

Health Department Director Susan Liford said the two-year deal with the health board will begin in January 2014 and will be re-evaluated at the end of that period. The health department will be diverting $300,000 to $400,000 a year to the hospital, Noble reports.

"The board felt like we needed to help the hospital, and they were very adamant they did not want to put the health department in jeopardy and have no one here lose their jobs," Liford told Noble. "I think it�s the moral thing to do. And we need our hospital."

The hospital has a debt estimated at $23 million, though the Knox County Fiscal Court purchased it out of bankruptcy by in 2004 for just $7.2 million, according to documents analyzed by the Barbourville Mountain Advocate, Knox County's weekly newspaper. Last July, the fiscal court took over hospital operations of the hospital, borrowing $6 million to fund them, after the former owners filed Chapter 11 bankruptcy. (Mountain Advocate graphic; click on it for larger version)

Princess Health and Health departments raise, or try to raise, tax rates to offset state cuts, higher benefit costs and Medicaid payment problems.Princessiccia

Princess Health and Health departments raise, or try to raise, tax rates to offset state cuts, higher benefit costs and Medicaid payment problems.Princessiccia

county health departments health departments local government public health taxes

Gusty 11:06 Add Comment

Some county health departments are trying, and others may try, to increase property-tax rates to make up for Medicaid shortfalls, program cuts and the rising costs of employee benefits so they can continue providing essential public health services for their communities.

Anderson County Health Department Director Tim Wright has proposed a 33 percent rate increase from 3 cents per $100 of assessed property value to 4 cents per $100. The increase would add an estimated $150,000, which Wright says he would use to end employee furloughs and make up for $200,000 that has not been paid by the Kentucky Spirit managed-care company, reports Editor Ben Carlson of The Anderson News.

Many departments have already cut positions and implemented furloughs to compensate for Medicaid shortfalls, state program cuts and employee benefit costs, said Scott Lockard, past president of the Kentucky Public Health Association and director of the Clark County Health Department. Most departments have done everything possible to increase efficiency of the departments' resources, he said.

A recent tax increase in Boyle County will make property owners pay a little more to help fund the county health department. The fiscal court recently voted to raise the county's health tax from 2.4 cents per $100 to 2.5 cents.

As funding streams have changed, departments need additional revenue sources, said Brent Blevins, director of the Boyle County Health Department. Blevins said without the rate increase, the already short-staffed department would have to cut services.

Declining property values during the recession have decreased tax revenue, said Marcia Hodge, director of the Garrard County Health Department. It proposed a tax rate increase from 4 cents to 4.25 cents in September that was estimated to bring in about $21,000, but the fiscal court did not approve it, she said.

Another problem that health departments face, Hodge said, is that they are required to participate in the state's insurance and retirement system. Over the 12 years she has been at the department, retirement contributions have increased from 4 percent to 25 percent, while costs of fringe benefits have more than doubled while salaries have only increased 10 percent, she said.

The Floyd County Health Department increased its tax rate last September for the first time in 20 years, primarily because of increased costs of employee benefits and department funding cuts, said Thursa Sloan, director of the department.

Sloan said she anticipates a big change in the services that health departments provide over the next 10 years.  Primary care will take a much more preventive approach, she said, and health departments will have to pull back in such services and go back to the basics.

Princess Health and Commission says drastic changes to doctor pay and cuts to wasteful services can fix Medicare problem without tax hikes.Princessiccia

Princess Health and Commission says drastic changes to doctor pay and cuts to wasteful services can fix Medicare problem without tax hikes.Princessiccia

health care costs health reform Medicaid Medicare physicians taxes

Gusty 12:51 Add Comment

A national advisory panel says �drastic changes� in how Medicare reimburses doctors and other providers are needed to shore up Medicare's finances, improve patient outcomes and rein in health care costs, and there is no need to seek more taxpayer money.

Medicare needs $138 billion over the next decade to avoid steep cuts in physician pay, and avoiding those cuts has become an annual scramble in Congress known as "the doc fix."  A panel dominated by internal-medicine specialists, The National Commission on Physician Payment Reform, has concluded that reduction of wasteful medical services can help solve the problem and "our nation cannot control runaway medical spending without fundamentally changing how physicians are paid," it says in its report.

Source: Henry J. Kaiser Family Foundation and Congressional
Budget Office, Budget and Economic Outlook, January 2011

The U.S. spends nearly $3 trillion a year on health care, and that level of spending is unsustainable. The report says that as a proportion of the federal budget, the cost of Medicare has risen from 3.5 percent in 1975 to 15.1 percent in 2010 in 2010). In 2020, it is projected to consume 17 percent, or 4 percent of the U.S. gross domestic product.

Recognizing the way that physicians are paid contributes substantially to the high cost of health care, The Society of General Internal Medicine convened the commission in March 2012 to make recommendations for payment reform. According to the report, some of the factors that drive up health care expenditures are:

• Fee-for-service reimbursement
• Consolidation in the health-care industry
• Reliance on technology and expensive care
• Reliance on a high proportion of specialists
• Paying more for the same service or procedure when done in a hospital setting as opposed to an outpatient setting
• A disproportionate percentage of health care spending directed to a small number of people who are very sick and costly to treat
• High administrative costs
• Fear of malpractice lawsuits
• Fraud and abuse

The commission says increased taxes are not needed to fix the Medicare problem, and the Medicaid shortfall could be entirely found by reducing overuse of services within Medicare. See the chart to the right for a breakdown of those excess medical costs.

The commission developed 12 recommendations to reduce health costs, calling for drastic changes to the current fee-for-service payment system and a five-year transition to a physician payment system that rewards quality and value-based care and not the volume of care.

The 12 recommendations were based on the principles that payment reform should improve care quality and efficiency, encourage care for the medically disadvantaged, reduce marginal and ineffective services, increase transparency to the public and should reward patient-centered comprehensive care. (Click here to see those recommendations)