MONEY Health Care

This Fast-Growing Health Plan is Great for Your Boss—But Maybe Not for You

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Thomas Barwick—Getty Images

High-deductible health insurance plans save employers money, a new study finds. Trouble is, when workers have to shoulder more costs, they may also skip getting medical care.

Got a high-deductible health plan? The kind that doesn’t pay most medical bills until they exceed several thousand dollars? You’re a foot soldier who’s been drafted in the war against high health costs.

Companies that switch workers into high-deductible plans can reap enormous savings, consultants will tell you—and not just by making employees pay more. Total costs paid by everybody—employer, employee and insurance company—tend to fall in the first year or rise more slowly when consumers have more at stake at the health-care checkout counter whether or not they’re making medically wise choices.

Consumers with high deductibles sometimes skip procedures, think harder about getting treatment and shop for lower prices when they do seek care.

What nobody knows is whether such plans, also sold to individuals and families through the health law’s online exchanges, will backfire. If people choose not to have important preventive care and end up needing an expensive hospital stay years later as a result, everybody is worse off.

A new study delivers cautiously optimistic results for employers and policymakers, if not for consumers paying a higher share of their own health care costs.

Researchers led by Amelia Haviland at Carnegie Mellon University found that overall savings at companies introducing high-deductible plans lasted for up to three years afterwards. If there were any cost-related time bombs caused by forgone care, at least they didn’t blow up by then.

“Three years out there consistently seems to be a reduction in total health care spending” at employers offering high-deductible plans, Haviland said in an interview. Although the study says nothing about what might happen after that, “this was interesting to us that it persists for this amount of time.”

The savings were substantial: 5% on average for employers offering high-deductible plans compared with results at companies that didn’t offer them. And that was for the whole company, whether or not all workers took the high-deductible option.

The size of the study was impressive; it covered 13 million employees and dependents at 54 big companies. All savings were from reduced spending on pharmaceuticals and doctor visits and other outpatient care. There was no sign of what often happens when high-risk patients miss preventive care: spikes in emergency-room visits and hospital admissions.

The suits in human resources call this kind of coverage a “consumer-directed” health plan. It sounds less scary than the old name for coverage with huge deductibles: catastrophic health insurance.

But having consumers direct their own care also requires making sure they know enough to make smart choices like getting vaccines, but skipping dubious procedures like an expensive MRI scan at the first sign of back pain.

Not all employers are doing a terrific job. Most high-deductible plan members surveyed in a recent California study had no idea that preventive screenings, office visits and other important care required little or no out-of-pocket payment. One in five said they had avoided preventive care because of the cost.

“This evidence of persistent reductions in spending places even greater importance on developing evidence on how they are achieved,” Kate Bundorf, a Stanford health economist not involved in the study, said of consumer-directed plans. “Are consumers foregoing preventive care? Are they less adherent to [effective] medicine? Or are they reducing their use of low-value office visits and corresponding drugs or substituting to cheaper yet similarly effective prescribed drugs?”

Employers and consultants are trying to educate people about avoiding needless procedures and finding quality caregivers at better prices.

That might explain why the companies offering high-deductible plans saw such significant savings even though not all workers signed up, Haviland said. Even employees with traditional, lower-deductible plans may be using the shopping tools.

The study doesn’t close the book on consumer-directed plans.

“What happens five years or ten years down the line when people develop more consequences of reducing high-value, necessary care?” she asked. Nobody knows.

And the study doesn’t address a side effect of high-deductibles that doctors can’t treat: pocketbook trauma. Consumer-directed plans, often paired with tax-favored health savings accounts, can require families to pay $5,000 or more per year in out-of-pocket costs.

Three people out of five with low incomes and half of those with moderate incomes told the Commonwealth Fund last year their deductibles are hard to afford. Many households simply lack the resources to make out-of-pocket health costs, shows a recent study by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the Foundation.)

As in all battles, the front-line infantry often makes the biggest sacrifice.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Health Care

Proposed Medicare ‘Doc Fix’ Comes at a Cost to Seniors

A measure designed to head off big cuts in payments to doctors asks Medicare recipients to foot part of the bill.

Congress is headed toward a bipartisan solution to fix a Medicare formula that threatens to slash payments to doctors every year. The so-called “doc fix” would replace the cuts with a multipronged approach that will be expensive and will have Medicare beneficiaries pay part of the bill.

Congress has repeatedly overridden the payment cuts, which are mandated under a formula called the Sustainable Growth Rate (SGR), which became law in 1997, that is a way of keeping growth in physician payments in line with the economy’s overall growth. This year, unless Congress acts, rates will automatically be slashed 21 percent.

In a rare instance of bipartisan collaboration, House Speaker John Boehner and Minority Leader Nancy Pelosi are pushing a plan to replace the SGR with a new formula that rewards physicians who meet certain government standards for providing high quality, cost-effective care. If they can get the plan through Congress, President Barack Obama has said he will sign it.

The fix will cost an estimated $200 billion over 10 years. Although Congress has not figured out how to pay the full tab, $70 billion will come from the pocketbooks of seniors.

There are better places to go for the money, such as allowing Medicare to negotiate drug prices with pharmaceutical companies and tightening up reimbursements to Medicare Advantage plans. But there’s no political will in Congress for that approach.

And the doc fix needs to be done. Eliminating the SGR will greatly reduce the risk that physicians will get fed up with the ongoing threat of reduced payments and stop accepting Medicare patients. “Access to physicians hasn’t been a big problem, but if doctors received a 21 percent cut in fees, that might change the picture,” says Tricia Neuman, senior vice president and director of the Program on Medicare Policy at the Kaiser Family Foundation.

Here’s what the plan would cost seniors:

Medigap reform

Many Medicare enrollees buy private Medigap policies that supplement their government-funded coverage (average annual cost: $2,166, according to Kaiser). The policies typically cover the deductible in Part B (outpatient services), which is $147 this year, and put a cap on out-of-pocket hospitalization costs.

Under the bipartisan plan, Medigap plans would no longer cover the annual Part B deductible for new enrollees, starting in 2020, so seniors would have to pay it themselves. Current Medigap policyholders and new enrollees up to 2020 would be protected.

The goal would be to make seniors put more “skin in the game,” which conservatives have long argued would lower costs by making patients think twice about using medical services if they know they must pay something for all services they use.

Plenty of research confirms that higher out-of-pocket expense will reduce utilization, but that doesn’t mean the reform will actually save money for Medicare.

Numerous studies show that exposure to higher out-of-pocket costs results in people using fewer services, Neuman says. If seniors forgo care because of the deductible, Medicare would achieve some savings. “The hope is people will be more sensitive to costs and go without unnecessary care,” she says. “But if instead, some forgo medical care that they need, they may require expensive care down the road, potentially raising costs for Medicare over time.”

High-income premium surcharges

Affluent enrollees already pay more for Medicare. Individuals with modified adjusted gross income (MAGI) starting at $85,000 ($170,000 for joint filers) pay a higher share of the government’s full cost of coverage in Medicare Part B and Part D for prescription drug coverage. This year, for example, seniors with incomes at or below $85,0000 pay $104.90 per month in Part B premiums, but higher income seniors pay between $146.90 and $335.70, depending on their income.

The new plan will shift a higher percentage of costs to higher-income seniors starting in 2018 for those with MAGI between $133,500 and $214,000 (twice that for couples). Seniors with income of $133,000 to $160,000 would pay 65 percent of total premium costs, rather than 50 percent today. Seniors with incomes between $160,000 and $214,000 would pay 80 percent rather than 65 percent, as they do today.

Everyone pays more for Part B

Under current law, enrollee premiums are set to cover 25 percent of Medicare Part B spending, so some of the doc fix’s increased costs will be allocated to them automatically. Neuman says a freeze in physician fees is already baked into the monthly Part B premium for this year, so she expects the doc fix to result in a relatively modest increase in premiums for next year, although it’s difficult to say how much because so many other factors drive the numbers.

MONEY Health Care

This Scary Retirement Expense Just Got Even Scarier

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GIPhotoStock—Getty Images/Cultura RF

The estimated tab for health care costs in retirement is huge—and getting bigger every year, according to a new study.

If you’re worried about paying for your health care in retirement, get ready to worry more.

A healthy couple retiring this year at age 65 will pay $266,589 for health care in retirement, according to the 2015 Retirement Healthcare Costs Data Report by health data provider HealthView Services. That’s a 6.5% jump from HealthView’s projections a year ago.

If medical costs continue their rapid rise, the tab will be even larger in the near future: Expected lifetime health care expenses will rise to $320,996 for a couple retiring in 10 years at age 65, the study found.

And that’s just what you’ll pay for Medicare Parts B and D, which cover routine medical care and prescription drugs, and a Medicare supplemental insurance policy, which most Medicare recipients buy to help with co-pays and deductibles. It doesn’t include all the out-of-pocket costs that traditional Medicare doesn’t cover, including dental, vision, and hearing services, and co-pays.

When you factor in those expenses, projected retirement health care costs rise to $394,954 for a couple retiring this year at age 65 and $463,849 for a couple retiring in 10 years. And those numbers don’t even count long-term care, which can add tens of thousands of dollars if you need extensive help at home or in a nursing home.

To put those costs in perspective, HealthViews estimates that a couple retiring today will spend 67% of their Social Security benefits on health care costs over their lifetimes. For a couple retiring in 10 years at age 65, medical care will suck up 90% of their Social Security income. That’s troubling considering that for many, Social Security makes up the majority of their retirement income. Even for middle income and wealthier families, Social Security accounts for about one-third of retirement income.

But Social Security benefits won’t be able to keep up with health care inflation. Social Security benefits have averaged a 2.6% annual cost of living increase over the past decade (and just 1.4% the past four years), while health care costs have risen more sharply. According to the Centers for Medicare and Medicaid, health care costs will rise 5% to 7% over the next eight years.

HealthView numbers are higher than other surveys on health care retirement costs. In Fidelity Benefits Consulting’s annual retirement health care costs report for 2014, a 65-year-old couple retiring today will need an average of $220,000 to cover medical expenses throughout retirement.

Counterintuitively, estimates of total lifetime health care costs are lower for people in poor health at retirement. HealthView’s estimates show that total retirement health care costs will be lower on average for someone with diabetes because of a shorter life expectancy. The total health care costs for a typical 55-year-old male with Type II diabetes will be approximately $118,000, compared to $223,000 for his healthy counterpart, primarily because the 55-year-old with diabetes has an expected longevity of 76, vs. 86 for a healthy male.

Of course, these are just averages. You can’t know exactly what your health will be after you retire, how much medical treatments will cost you, or how long you will live.

That said, even a rough guide can be a useful planning tool. So take a look at your insurance coverage. Consider the likelihood for each type of expense, as well as the average Medicare costs by age, to come up with an estimate of the savings you’ll need to fund these costs. Kaiser recently published a study on Medicare costs by age, which breaks down Medicare spending into its main components—hospitals, doctors, and drugs—and measures how much Americans spend on these services at different ages.

To prepare for that spending in advance, take a look at your sources of your retirement income. If you have a health savings account, do everything you can not to touch it now but let it grow tax free. It is an excellent vehicle for funding future medical expenses. Ditto for a Roth IRA, which lets your money grow tax free. For more tips on planning for retirement health care costs, check out MONEY’s stories here, here, and here.

TIME Congress

Congress to Solve Problem It Created 18 Years Ago

House Republicans Vote On A New Majority Leader To Replace Cantor
Pete Marovich—Bloomberg/Getty Images U.S. House Speaker John Boehner, a Republican from Ohio, speaks during his weekly news conference at the Capitol in Washington, D.C., U.S., on Thursday, June 19, 2014. Boehner said terrorism has spread "exponentially" during President Barack Obama's administration and that Obama needs an "overall strategy" to stem the rise of terrorism in the Middle East. Photographer: Pete Marovich/Bloomberg via Getty Images

Congress is on the verge of permanently solving a problem it created for itself 18 years ago.

The House expects to pass a major health care reform bill Thursday that would solve a recurring headache: a flawed formula for Medicare payments for doctors. For years, Congress has passed short-term patches—17 in all—temporarily fixing the problem just before doctors were slated to see their reimbursements drop suddenly.

Now, ahead of an April 1 deadline that would slice the Medicare payment rate by 21 percent, House leaders have struck a compromise that would permanently resolve the issue, roughly splitting the costs between beneficiaries and providers. The deal has garnered support from both progressive budget groups and anti-tax crusader Grover Norquist.

“It’s time we did this,” says House Appropriations Chairman Hal Rogers. “We’ve been crutching along on one cane for all these years and finally we’re facing up to the responsibility of getting it over with.”

Negotiated by Speaker John Boehner and Democratic Leader Nancy Pelosi, the House bill would make wealthy seniors pay up to 15% more in premiums beginning in 2018 and extend for two years funding for community health centers and the Children’s Health Insurance Program (CHIP), which faces its own spending deadline this fall. The bill would cost $141 billion over the next ten years, which will peel away support from some deficit hawks, even though it’s about a billion less than just kicking the can down the road.

“That’s pretty darn impressive,” says Senate Finance Chairman Orrin Hatch of the deal, which was easier to make than in years past as Medicare spending on physician services has dropped.

“It looks like to me it solves a problem that has been out there for about 18 years now, of a pay for that clearly was a phony pay-for,” adds Missouri Republican Sen. Roy Blunt. “It was a pay-for that was never going to work that Congress has never been willing to go to because it didn’t make sense.”

The question now is whether the Senate can pass the bill by Friday, when Congress plans to leave for a two-week recess. In the event that it can’t, the Senate will once again pass a short-term patch. “I just don’t know how you get it done before the end of this week in a way that’s befitting a review by the United States Senate and House,” says Maryland Democratic Sen. Ben Cardin. “It normally takes more than a few minutes to consider major legislation. … We’re not going to finish the budget until Friday morning.”

Democrats in the Senate have been more tepid in their support than their House colleagues, raising concerns over abortion provisions that have been countered in part after further negotiations. Several Democrats, including Sens. Chuck Schumer, Chris Murphy and Sherrod Brown, told TIME that they are concerned that the funding extension for CHIP is two, rather than four, years. But those concerns haven’t led them to state public opposition to the bill and it’s likely that there’s enough support among Senate Democrats to pass it. President Obama said Wednesday he’s got his pen “ready to sign a good, bipartisan bill.”

“We have a golden opportunity to accomplish something that people thought couldn’t be accomplished with this amount of toxicity, if you will, to the atmosphere,” says West Virginia Democratic Sen. Joe Manchin.

“Getting the ‘doc fix’ done once and for all is a positive development,” adds Maine Sen. Angus King, an independent who caucuses with the Democrats and is “inclined” to support it. “I wish that it had four years for the CHIP program, but as Mick Jagger once famously said, ‘you don’t always get what you want.'”

For the bill to come up in the upper chamber by Friday, every senator would have to agree to skip procedural hurdles to vote on the bill. After a drawn-out fight over the Keystone XL pipeline and the delay in what was once an easy, bipartisan anti-human trafficking bill, top Republicans are worried that Senate Minority Leader Harry Reid and the Democrats will slow down or kill the process. Reid has said that he will give his opinion of the deal once it passes the House.

“The incentives are there,” says Republican Sen. John Barrasso of Wyoming. “Now it just comes to whether Harry Reid is once again going to obstruct the workings of the United States Senate.”

In an ironic twist, just as Congress looks to relieve itself from a perennial headache, reports have emerged defending the so-called ‘doc fix’ for doing what it was supposed to do: keep Medicare spending in line. The Committee for a Responsible Federal Budget, an anti-deficit group, wrote last year that Congress paid for its delays 98 percent of the time with much of the savings coming from health care programs.

“It always gets derided because it’s annoying and it’s flawed,” Loren Adler, the group’s research director, told Bloomberg recently. “It doesn’t work as intended, it’s a little bit silly in some ways and it’s a lobbying bonanza. That being said, it’s accomplished what was intended—it’s controlled the cost of Medicare.”

MONEY Health Care

Who Covers the Costs of Preventive Surgery Like Angelina Jolie’s

Actress Angelina Jolie
Matt Sayles—Invision/AP

Faced with a genetic predisposition to cancer, Angelina Jolie opted for a preventive surgery to remove her ovaries and fallopian tubes. But can other women afford to do the same?

This week, actress and director Angelina Jolie took to the New York Times to announce a big decision: She had her ovaries and fallopian tubes surgically removed, a preventive measure meant to decrease her risk of ovarian and breast cancer. This surgery followed her preventive double mastectomy in 2013.

After losing her mother, grandmother, and aunt to cancer, Jolie underwent genetic testing and learned that she had a mutation in one of her BRCA genes, a tumor-suppressor gene. That means she too has an increased risk of developing breast cancer and ovarian cancer.

“I feel feminine, and grounded in the choices I am making for myself and my family,” Jolie wrote. “I know my children will never have to say, ‘Mom died of ovarian cancer.'”

The good news: If you share Jolie’s predisposition to cancer, the same treatment options are probably available to you. Most insurers will cover preventive surgery for women with a BRCA mutation, says Lisa Schlager, vice president for community affairs and public policy at Facing Our Risk of Cancer Empowered (FORCE), a nonprofit organization devoted to hereditary breast and ovarian cancer. (Generally, Medicare and Medicaid aren’t as generous, Schlager says.)

That’s been true for a long time—a 2001 study found that 97% of preventive surgeries for women with BRCA mutations were fully covered by insurance (except for deductibles and copays).

The surgery can be costly. According to HealthSparq, a health care costs transparency firm, the average national cost for the surgical removal of the ovaries and fallopian tubes is $12,381.

That’s the average insurer-negotiated price, based on actual claims data from 67 health plans. In other words, that’s the average price insurers have agreed to pay hospitals and health providers for the procedure. You can expect to pay a smaller portion of that cost, depending on your health plan’s deductible, co-pays and co-insurance.

Today, the average deductible for Americans with single, employer-subsidized health coverage is $1,217, which means most need to pay more than a grand out-of-pocket before insurance begins to cover the bulk of their costs, according to the Kaiser Family Foundation.

“It really depends on your insurance and your deductible,” Schlager says. “Some people have a very high deductible, and we’re referring them to services that provide financial assistance.”

Prices can also vary significantly by region. According to HealthSparq, the average cost of the procedure is $8,693 in Maryland, but $20,763 in San Francisco, a $12,070 price gap.

Market Average Cost
San Francisco – San Jose CA $20,763.06
San Diego CA $16,508.06
Miami – Fort Lauderdale FL $16,441.37
LA – Orange County CA $16,378.38
Houston TX $14,687.49
Austin – San Antonio TX $13,617.29
New York City – White Plains NY $13,591.84
Dallas – Fort Worth TX $13,404.92
New Orleans LA $12,049.43
Cinncinati – Dayton OH $11,987.74
Columbus OH $11,335.80
Albany NY $9,559.04
Washington DC – Arlington VA $8,747.73
Maryland $8,692.77
AVERAGE NATIONAL $12,380.55
PRICE GAP $12,070.29

But generally, insurers will cover the surgery. After all, “the surgeries are less expensive to the private insurers than if you were to get cancer,” Schlager says.

How do you know if you’re at risk? According to guidelines from the National Comprehensive Cancer Network, you should get screened for genetic abnormalities if any of your family members develop ovarian or fallopian tube cancer, breast cancer in both breasts, breast and ovarian cancer, breast cancer before age 50, male breast cancer, or other signs of hereditary breast-ovarian cancer syndrome. You should also get tested if more than one blood relative on the same side of your family has breast, ovarian, fallopian tube, prostate, pancreatic, or melanoma cancer. The U.S. Preventive Services Task Force, which helps implement the Affordable Care Act, made similar recommendations.

Schlager says the cost of genetic testing has “dropped substantially” in recent years, to between $1,500 and $4,000. Most insurers will cover genetic testing if you meet the national guidelines, but if your insurer refuses, some labs have financial assistance programs to limit your out-of-pocket cost to about $100, Schlager says.

Then you should meet with a genetic counselor. The Affordable Care Act mandates that health insurers cover genetic counseling with no cost-sharing if you have an increased risk of breast or ovarian cancer. That is to say, genetic counseling is a women’s preventive service that should be free to you, like birth control.

Jolie was quick to note that her choice isn’t the answer for everyone. “A positive BRCA test does not mean a leap to surgery,” Jolie wrote. “I have spoken to many doctors, surgeons and naturopaths. There are other options.”

A genetic counselor should help you understand the implications of preventive surgery and consider other less invasive—but less effective—measures, like increased cancer screenings. “It’s a very personal decision, and every family is different,” Schlager says. “Your first step is to talk to your doctor.”

TIME Health Care

Obama on the Affordable Care Act’s Fifth Anniversary: ‘It’s Working’

White House Student Film Festival
Martin H. Simon—Pool/Corbis President Barack Obama hosts the second-annual White House Student Film Festival in the East Room of the White House, in Washington on March 20, 2015.

He challenged Republican critics who are campaigning on repealing the law.

President Obama had a simple message on the fifth anniversary of the Affordable Care Act: It’s working.

Speaking in the Executive Office Building next to the White House, Obama argued that his signature health care law was “working better than many of us — including me — anticipated” at increasing health insurance rates and improving the quality of care.

“The bottom line is this for the American people: this law is saving money for families and for businesses,” he said. “This law is also saving lives, lives that touch all of us. It’s working despite countless attempts to repeal, undermine, defund and defame this law.”

In particular, Obama highlighted a government report that showed that fewer mistakes in hospitals saved the lives of 50,000 people between 2011 and 2013, which the White House partly attributed to initiatives to reduce accidental overdoses, bedsores and patient falls.

The remarks came just two days after Texas Sen. Ted Cruz promised to repeal “every word of Obamacare” in a speech launching his presidential campaign, the first Republican to join the 2016 race.

Obama took the opportunity to take a few shots at Republican critics of the law, joking that “death panels, doom, [and] a serious alternative from Republicans in Congress” have all failed to materialize and challenging candidates campaigning for repeal to explain how “kicking millions of families off their insurance” will strengthen the country.

“Making sure that the Affordable Care Act works as intended to not only deliver access to care but to improve the quality of care and the cost of care, thats something that requires us all to work together,” he said.

MONEY Taxes

Why Obamacare Has Made Tax Filing an Even Bigger Headache This Year

piggy bank with band-aid on head
Getty Images

This is the first year that health reform crops up on your tax return. And a new study finds that many Americans who got help with health insurance premiums in 2014 now owe the IRS money.

This tax season, for the first time since the health law passed five years ago, consumers are facing its financial consequences. Whether they owe a penalty for not having health insurance or have to reconcile how much they got in premium tax credits against their incomes, many people have to contend with new tax forms and calculations. Experts say the worst may be yet to come.

When Christa Avampato, 39, bought a silver plan on the New York health insurance exchange last year, she was surprised and pleased to learn that she qualified for a $177 premium tax credit that is available to people with incomes between 100% and 400% of the federal poverty level. The tax credit, which was sent directly to her insurer every month, reduced the monthly payment for her $400 plan to $223.

A big check from a client at the end of last year pushed the self-employed consultant and content creator’s income higher than she had estimated. When she filed her income taxes earlier this month she got the bad news: She must repay $750 of the tax credit she’d received.

Avampato paid the bill out of her savings. Since her higher income meant she also owed more money on her federal and state income taxes, repaying the tax credit was “just rubbing salt in the wound,” Avampato says. But she’s not complaining. The tax credit made her coverage much more affordable. Going forward, she says she’ll just keep in mind that repayment is a possibility.

It’s hard to hit the income estimate on the nose, and changes in family status can also throw off the annual household income estimate on which the premium tax credit amount is based.

Like Avampato, half of people who received premium tax credits would have to repay some portion of the amount, according to estimates by The Kaiser Family Foundation. Forty-five percent would get a refund, according to the KFF analysis. The average repayment and the average refund would both be a little under $800. (KHN is an editorially independent program of the foundation.)

Tax preparer H&R Block has also looked at the issue. It reported that 52% of people who enrolled in coverage on the exchanges had to repay an average of $530 in premium tax credits, according to an analysis of the first six weeks of returns filed through tax preparer. About a third of marketplace enrollees got a tax credit refund of $365 on average, according to H&R Block.

The amount that people have to repay is capped based on their income. Still, someone earning 200% of the poverty level ($22,980) could owe several hundred dollars, says Karen Pollitz, a senior fellow at the Kaiser Family Foundation. People whose income tops 400% of poverty ($45,960 for an individual) have to pay the entire premium tax credit back.

Experts say the message for taxpayers is clear: if your income or family status changes, go back to the marketplace now and as necessary throughout the year to adjust them so you can minimize repayment issues when your 2015 taxes are due.

Many people are learning about what the health law requires and how it affects them for the first time when they come in to file their taxes, says Tara Straw, a health policy analyst at the Center on Budget and Policy Priorities. For the past 10 years, Straw has managed a Volunteer Income Tax Assistance site in the District of Columbia as part of an Internal Revenue Service program that provides free tax preparation services for lower income people.

Some of the recently initiated owe a penalty for not having health insurance. For 2014, the penalty is the greater of $95 or 1% of income. The H&R Block analysis found that the average penalty people paid for not having insurance was $172. Consumers who learn they owe a penalty when they file their 2014 taxes can qualify for a special enrollment period to buy 2015 coverage if they haven’t already done so. That would protect them against a penalty on their next return.

People may be able to avoid the penalty by qualifying for an exemption. Tax preparers rely on software to help them complete people’s returns, including the forms used to reconcile premium tax credits and pay the penalty for not having insurance or apply for an exemption from the requirement. For the most part, the software is up to the task, Straw says, but it comes up short with some of the more complicated calculations.

Case in point: applying for the exemption from the health insurance requirement because coverage is unaffordable. Under the health law, if the minimum amount people would have to pay for employer coverage or a bronze level health plan is more than 8% of household income they don’t have to buy insurance. That situation is likely to be one of the most common reasons for claiming an exemption.

But to figure out whether someone qualifies, the software would have to incorporate details such as the cost of the second lowest cost silver plan (to calculate how much someone could receive in premium tax credits) and the lowest cost bronze plan in someone’s area. The software can’t do that, so tax preparers must complete the information by hand.

“That one in particular has been vexing,” says Straw.

The gnarliest filing challenges may yet come from people with complicated situations, such as those who had errors in the IRS form 1095A that reported how much they received in premium tax credits, experts say.

Take the example of a couple with a 20-year-old son living at home who bought a family policy on the exchange. If midway through the year the son gets a job and is no longer his parents’ dependent, the family’s premium tax credit calculation will be off. The family needs to work together to figure out the optimal way to divide the credit already received between the two tax returns. The goal is to maximize the benefit to the family and minimize any tax credit repayment they may face.

“A lot of tax software is just not designed for that kind of trial and error,” says Straw.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

TIME Health Care

11 Numbers to Explain Obamacare on its Fifth Anniversary

Marketplace guide Jim Prim works on the Healthcare.gov federal enrollment website as he helps a resident sign up for a health insurance plan under the Affordable Care Act at an enrollment event in Milford, Delaware on March 27, 2014.
Andrew Harrer—Bloomberg/Getty Images Marketplace guide Jim Prim works on the Healthcare.gov federal enrollment website as he helps a resident sign up for a health insurance plan under the Affordable Care Act at an enrollment event in Milford, Del. on March 27, 2014.

The Affordable Care Act turned five years old Saturday, but that’s not the most important number you need to know about President Obama’s controversial health care law.

To mark the law’s anniversary, here are 11 numbers you need to know to understand the law:

$142 billion: What the Congressional Budget Office projects the law will cost over the next decade

16.4 million: Number of previously uninsured Americans who have gotten coverage under the law

2.3 million: Number of previously uninsured young adults, ages 19-25, who have gained health insurance through the under 26 provision, which allows them to stay on their parents’ plan

29: Current number of states that accepted the law’s Medicaid expansion (including Washington, D.C.)

24,000: High-end estimate of how many lives the law could save per year by increasing the number of insured Americans

50+ : Number of times the GOP-controlled House has voted to repeal the law, in whole or in part

30: Number of Democratic senators who voted for the law who are no longer in office

25: Number of states that signed on to a Supreme Court challenge to the law in 2012

7: Number of states that signed on to a Supreme Court challenge to the law in 2015

2% of annual household income or $325 per person: The fine for not having coverage in 2015

43%: Percentage of Americans who don’t support the law (41% support it)

MONEY Health Care

Good News. Obamacare Hasn’t Led to Less Health Coverage at Work

"Benefits Meeting" announcement on bulletin board
Getty Images—(c) KLH49

A new survey finds that so far employers don't seem to be cutting worker hours to get out of offering health insurance benefits.

There has been much hand wringing over the health law requirement that large employers this year offer insurance to workers who put in 30 or more hours a week or face penalties for not doing so. The new rules would cost employers a bundle, some fretted, as part-timers clamored for company coverage previously unavailable to them. Others worried that employers would cut workers’ hours to get under the cap.

A new study found that so far there’s little cause for concern: Average enrollment in company plans was essentially unchanged between 2014 and 2015 at 74% of all workers.

The survey of nearly 600 employers by benefits consultant Mercer found that in 2015 the average percentage of employees who were eligible for coverage increased one point to 88%, but it was offset by a drop in the enrollment of eligible workers of one point on average, to 83%.

Part of the explanation for the stable results stems from the fact that most employers were already in compliance, says Beth Umland, Mercer’s director of research for health and benefits.

In 2014, employees had to work 25 hours a week on average to be offered health insurance, according to Mercer. That figure has edged up since 2011, when it was 23 hours weekly, but is still well below the law’s 30-hour threshold.

Still, while the expansion in eligibility wasn’t a big change for many employers, “if you were impacted you were really impacted,” says Tracy Watts, Mercer’s national leader for health care reform.

Food and lodging companies were most affected by the new rules, with the average percentage of workers who were eligible for coverage increasing from 57% to 60%. Other industry sectors that felt the change included health care, where per diem nurses and other professionals take on short-term assignments, and higher education, which employs many part-time adjunct professors, says Watts.

But most employers aren’t changing their practices to discourage health plan enrollment, the survey found. Seventy-three percent said they had no plans to change, while 16% said they ensured that newly hired part-timers work fewer than 30 hours weekly, and 19% said they reduced the hours of employees who consistently or occasionally worked more than 30 hours a week.

Even though the health law aims to encourage employers to offer coverage by imposing fines on those who don’t do so, not all take advantage of the offer. Workers might not sign up because they have other options under the health law. Low-income workers may be eligible for Medicaid in states that have expanded coverage to adults with incomes up to 138% of the federal poverty level. Young people can stay on their parents’ plan until they turn 26 under the health law, and many people continue to get coverage through their spouses.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Odd Spending

Get a Vasectomy and Have a Ball Watching March Madness

Shabazz Napier #13 of the Connecticut Huskies cuts down the net after defeating the Michigan State Spartans to win the East Regional Final of the 2014 NCAA Men's Basketball Tournament at Madison Square Garden on March 30, 2014 in New York City.
Elsa—Getty Images Shabazz Napier #13 of the Connecticut Huskies cuts down the net after defeating the Michigan State Spartans to win the East Regional Final of the 2014 NCAA Men's Basketball Tournament at Madison Square Garden on March 30, 2014 in New York City.

Yes, timing your vasectomy to coincide with the NCAA March Madness tournament is a thing.

“Get your vasectomy, then sit on the couch for 3 days watching sports–Doctors orders!”

That’s part of the pitch for the “Vas Madness” deal currently being offered by the Texas-based Urology Team. The special package costs $595 and includes an initial consultation and the surgical procedure that’ll stop you from getting anyone pregnant. But sorry sports fans, “consultations and vasectomies cannot be performed on the same day,” the promotion warns.

As bizarre as it sounds, the idea of getting snipped around the time of the NCAA men’s basketball tournament is not new. Vasectomy clinics report spikes in appointments around March Madness, presumably from men who feel that there’s no better period than tourney time to recover from the briefly painful procedure. The recovery involves little more than a few days of guilt-free sitting and icing one’s nether regions. And since you’re immobile for a spell thanks to doctor’s orders, why not see if there are any good games on TV?

One year, a clinic in Cape Cod even threw in free pizza as part of its March Madness-themed vasectomy package.

The vasectomy-March Madness connection dates back at least a half-dozen years. Many people credit the seemingly odd concept to the Oregon Urology Institute, which ran a “Snip City” radio ad in the late ’00s, encouraging men to have a little “snip-snip,” followed by “doctors orders to sit back and watch nonstop basketball.”

Who are the men who time this sensitive, life-changing procedure in such a way? “They are the clever ones, the men who put some thought into when they scheduled that not-often-discussed elective surgery,” the Cleveland Plain Dealer reported back in 2009. “Their wives might even wait on them.”

At the time, one Cleveland-area urologist told the paper that his schedule was completely booked with vasectomies timed to coincide with March Madness. And he said he fully understood why men timed it so: “If they’re going to have a day off, it might as well be on a day when they would want to be watching basketball, as opposed to watching ‘Oprah.'”

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