KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Health Law Keeps 200,000 In State Insurance Plans Instead Of New High-Risk Pools

USA Today: About 200,000 people already enrolled in 35 state high-risk insurance pools "will not be allowed to enroll this summer in a new lower cost federal program for people like them because they already buy pricey state-run plans." In order to be eligible, "a person can't have had health coverage for six months. … The state pools charge high premiums - often double standard rates for healthier people in the individual market - to help cover costs." The health overhaul puts aside $5 billion for the new high-risk pools "and says federal risk pools can't charge more than standard rates. ... California and Texas are urging applicants to their state pools to consider waiting for the federal program" (Young, 4/29). 

USA Today, in a separate story: The Internal Revenue Service will have new enforcement responsibilities under the health reform law. "Starting in 2014, the IRS will have [to make] sure all Americans have health insurance." The agency lacks the ability to impose liens, seize property or seek jail time for people who ignore the mandate. "In the arsenal instead: the ability to withhold refunds from taxpayers who decline to pay the penalty, IRS Commissioner Doug Shulman said this month." Some people are worried, though, that the IRS is being dramatically expanded, and the Congressional Budget Office has estimated the agency will need $5 billion to $10 billion over the next 10 years to administer the law. "The IRS will match taxpayers' returns with information it receives from insurers, and individuals who don't have insurance will receive a letter explaining how much they owe in penalties. Those who ignore the letter could have the penalty withheld from their refunds - but that will only be effective if they're due a refund" (Block, 4/29).

Related, earlier KHN stories: IRS Faces Tough New Duties Under Health Overhaul (Galewitz and Weaver, 1/6/10)  and True Or False: Seven Concerns About The New Health Law (4/6).

The Wall Street Journal: Other observers are questioning whether employers will continue to offer retiree drug benefits or will "will companies stop offering them, dumping their former employees onto the Medicare rolls?" The law begins closing the Medicare prescription "doughnut hole" this year. "Medco Health Solutions, which announced its first-quarter earnings (Wednesday), is giving an early peek at how that might shake out. The big pharmacy benefit manager told analysts that the 'most likely choices for a large percentage' of companies was to stick with their current retiree drug plans, despite the less-attractive tax treatment, or to switch over to something called an employer group waiver plan, which signs up retirees for the Medicare benefit as a group and is typically administered by an insurer or a [pharmacy benefits manager]" (Mathews, 4/28).

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