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Is Your Employer Watching Your Weight?

You may not be the only person watching your waistline.

If you get health insurance through work, your employer may require you to have your weight monitored or take a health risk assessment to determine if you’re eligible for a discount of up to 30% for health benefits.

The Patient Protection and Affordable Care Act, or PPACA, that takes effect next year requires all employers to offer health insurance, but allows them to offer discounts to healthy workers. A recent survey found that 15% of employers require employees to complete some sort of health activity — such as biometric screening or health risk assessment — to determine their eligibility for one or all of the company’s health plans in 2013.

If they don’t pass the tests, employees could be dropped to a “less attractive subset of the company’s health plan,” and 3% of employers said that not completing the screening or assessment would result in losing benefits for the year, according to the survey by Fidelity Investments and the National Business Group on Health.

PPACA allows a 20% differential for workers in wellness programs, and it can increase to 30%. Smoking-based inctives can be as high as 50%, says Joseph Torella, employee benefits national practice leader at HUB International, an insurance broker.

“With such strong support for such programs under federal legislation, and increased pressure on quality and cost, a likely increase in these programs is likely,” Torella says. “We’re at a critical point in developing such programs as metabolic syndrome becoming much more common and much more visible in domestic U.S. employer populations.”

“The jury is still out on weight being a single critical driver, but all of the risks appear to be related to obesity,” he says.

While workplace wellness programs are “a good place to start” in improving the health of American workers, the programs “could be very punitive to workers who don’t have the ability to participate,” such as disabled workers or people working multiple jobs who don’t have the time to exercise and lose weight, says Carla Saporta, health policy director at the Greenlining Institute.

There’s no research that such programs work, says Saporta, who has written about workplace wellness regulations. Raising premiums based on weight and other health benchmarks will shift health care costs to the least healthy workers, she says.

Grocery giant Safeway has been lauded for cutting medical expenses by rewarding employees with healthy behavior, but expanding such a program across the country could have American families with average health benefits of $6,688 a year “riding on blood tests and weigh-ins,” according to a Washington Post story.

Telling someone to change their health habits won’t work, Saporta says. A cultural change in an organization is needed, such as not selling soda in vending machines at work, or giving away doughnuts in the office.

“It’s a behavior change issue,” she says.

Getting an employer to stop providing free doughnuts is a great idea, but if an overweight worker still won’t lose weight, it’s a good idea to charge them more for health insurance instead of passing along the cost for their extra health care on to healthy employees, says Ron Stoll, vice president of wellness at Team Excellence, which helps employers manage employees.

“There’s no reason to burden your fellow employee with your bad health choice,” Stoll says.

The 25-year-old who plays soccer all weekend, the middle-aged diabetic, and the 62-year-old who drinks a case of beer over the weekend shouldn’t have the same financial costs for health care, he says.

“From the employer’s viewpoint, it is costing them,” Stoll says.

While the PPACA law doesn’t allow health benefit costs to be increased if an employee doesn’t lose weight, it does allow employers to require workers to be in a wellness program, Saporta says. And if someone is healthy and isn’t in the wellness program, they wouldn’t get the price cut in health insurance, she says.

Wellness programs can include gym memberships, health education classes, smoking cessation programs, on-site flu shots, and adding bike racks and walking paths to workplaces. An overweight worker who joined a gym wouldn’t be monitored to ensure they attend, but they would be evaluated every year to determine if they’ve lost weight and still need to be in the program.

“Workplace wellness programs are potentially something that can help, but they’re definitely not a cure-all,” Saporta says.

Companies are spending more on wellness programs, according to the survey by Fidelity and the Business Group. Employers plan to spend an average of $521 per employee on wellness incentives, a 13% increase from the $460 average in 2011 and double the $260 average in 2009.

The study also found that 86% of employers used wellness-based incentives, with the most popular a decrease in premiums (61%), followed by cash or gift cards (55%), or an employer-sponsored contribution to a health savings account or similar account (27%).

Spouses and dependents are also part of the program, with 54% of employers expanding their wellness incentives to include dependents. Lowering your spouse’s cholesterol or blood pressure could be just as beneficial, financially, as lowering yours.

“An increasing number of employers understand how wellness programs contribute to a healthy workforce,” said Helen Darling, president and chief executive officer of the National Business Group on Health, in a statement. “And it’s encouraging to see employers take the necessary steps to tailor their wellness programs in a way that will incent and motivate their employees to engage in health-improvement activities and find ways to reward them for their progress.”

With 30% of employers surveyed saying they’ll pay workers to lower their cholesterol, 29% giving incentives to lower blood pressure, and 11% paying to get a slimmer waist, that should be plenty of incentive to get healthier and have both the employee and employer saving money on health costs, Stoll says. Watching a worker’s weight is good for business, he says.

“The employer should be involved in their workforce and vested in their employees’ wellness,” Stoll says.

Most Older Workers Plan To Work Longer To Keep Their Health Benefits

No one wants to work longer than they need to, but health insurance costs are forcing older workers to work longer than they would like to.

And on the other side of the health care coin, more workers would retire early if they were guaranteed access to health insurance.

Those are just some of the findings from the 2012 Health Confidence Survey by the Employee Benefit Research Institute.

Access to health insurance was so important to those surveyed — with 54% saying such access in their retirement decision was extremely important and another 28% saying it was very important — that 53% of workers said they planned to work longer than they would like in order to continue receiving health insurance through work.

While that may be the plans of most current workers, only 19% of actual retirees reported that they had worked longer so they could continue receiving health insurance through work.

Being guaranteed access to health insurance encouraged workers to retire earlier than planned, with 27% reporting they would retire earlier if guaranteed health insurance.

The importance of health insurance in retirement is that health care expenses account for more expenses for people as they age. The ERBI study found that in 2009, health care accounted for 18% of expenses for people 85 and older, 15% for ages 75-84, and 12% for ages 65-74.

In addition to insurance, Medicare beneficiaries must pay a portion of their health expenses because Medicare wasn’t designed to cover health care expenses in full. Those 65 and older paid on average 13% of the cost of their health care services in 2013, with Medicare covering 59% and private insurance covering 14%.

The study found that it had been estimated that a 65-year-old couple with median drug expenses would need $163,000 set aside in 2012 to have a 50% chance of having enough money to cover health care expenses, excluding long-term care, in retirement. They’d need $283,000 to have a 90% chance.

More older men are remaining in the workforce, possibly so they can get health insurance benefits through work. Among men ages 60-64, the labor force participation rate increased from 53.2% in 1995 to 60% in 2010.

This may be caused by the availability of health insurance, the study found: “Many employers have dropped retiree health benefits, and most that have continued to offer these benefits have made changes in the benefit package they offer: raising premiums that retirees are required to pay, tightening eligibility, limiting or reducing benefits, or some combination of these.”

Some employers also cut workers’ hours so they won’t have to be offered health insurance at work.

The Affordable Care Act, which starts in January 2014, is expected to make affording health insurance easier.

It’s an important topic for workers planning to retire. While more than half of workers in the EBRI study said they planned to work longer than they’d like in order to continue receiving health insurance through work, fewer retirees — 19% — said they had actually done so.

That may be because current retirees may have been more likely than current workers to have access to health insurance coverage through work in retirement.

Or, if you want to be more optimistic about it, maybe the retirees discovered that they could afford health care better than they thought they could before retiring.

Affordable Health Care Law Loophole Could Hurt Low-Wage Workers

Part-time workers who don’t have health care insurance are supposed to have an easier time finding insurance next year when the Affordable Care Act takes effect.

Their employers may have other ideas, thanks to a few loopholes in the ACA law.

Few part-time workers get health insurance from their employer now, with proponents of the new law expecting the numbers to increase next year. A study by the ADP Research Institute of 300 large employers covering 2 million workers and dependents found that 23% of employees work part-time, and only 8% get health care benefits from their employer.

The law doesn’t take effect until 2014, but the number of workers an employer has this year are being used to measure if employers must provide health insurance next year. Employment figures are also be used to determine if companies will be fined for not offering health insurance, or if they have a low number of part-time workers that exempts them from the law’s penalties, says Bob King, an attorney and founder of Legal Nanny, a law firm that specializes in domestic employment and home care agencies.

“The Affordable Care Act poses a massive new cost on employers,” King says.

If the cost is greater than the operating margin for a business, it could get around ACA by laying off employees or cutting their hours. Businesses that are most likely to do that are low-wage industries such as restaurants and other service jobs, King says.

The law calls for “qualifying and affordable” health insurance to be provided to be provided to employees. Coverage is considered “affordable” as long as it doesn’t exceed 9.5% of an employee’s household income.

Companies with 50 or more full-time employees (including full-time equivalent employees) working 30 or more hours per week that don’t provide the insurance must pay a penalty of at least $2,000 per employee per year to the federal government.

To get around the law and avoid the penalty, businesses could lay off workers so that they only have 49 part-time workers, each working 29 hours or less per week, says Angela Reddock, a lawyer in Los Angeles who specializes in employment law.

But the loophole’s existence doesn’t mean companies are going to “respond knee-jerk” to ACA and cut employees to part-time so the company can save on health care costs, says Reddock, adding that companies should know the high value of having a consistent workforce that doesn’t require constant retraining because new workers are being added all of the time.

King agrees, saying he doesn’t expect businesses that already offer health insurance to change.

“Employees who work for companies that already provide health insurance will probably continue to receive health insurance,” he says.

But businesses that don’t already offer health insurance may cut jobs or hours and use more independent contractors as they try to determine if not complying with the law is cheaper than providing health insurance, King says.

A $2,000 fine per employee for not offering health insurance is cheaper than the $7,225 per year in health care premiums that the average employer contributed for each employee in 2012, according to the ADP Research Institute study.

“I have not seen one client of mine that’s not offering insurance now that’s going to start offering insurance as a result of the Affordable Care Act,” he says.

“It’s far, far more expensive to offer insurance,” King says his clients tell him.

Employers that are likely to cut jobs and hours are ones with a lot of low-wage workers, he says, such as restaurants, retail and home care. King says some of his clients, which include home care agencies, are cutting workers’ hours to 29 or less per week so they can avoid the new law’s penalties.

Low-wage jobs with few hours doesn’t sound to appealing, especially without health insurance. “Nobody wants that job,” King says.

Cutting a worker’s hours so they’re not eligible for employer health insurance would have a domino effect, forcing low-wage workers to get insurance through an exchange, Reddock says.

“I think what you then end up with is a very unhappy employee who now has health care” through a health care exchange where they can apply for government subsidies to help pay their premiums, Reddock says.

“If you’re a minimum wage earner, and you are forced into this exchange, it can really be a burden on the employee and their household,” she says.

However, if ACA helps companies save 30% to 40% on health insurance premiums, “then I think you might even find the large bread and butter companies reconsider their health care options,” Reddock says.

New Apps Help You Stay Healthy

It’s that time of the year when most people start bailing on their New Year’s Resolution. Unless you’ve got a friend keeping you accountable, it can be difficult to stay on top of the commitment you had. There’s good news, however! New mobile applications make it easier than ever to keep on track and have fun at the same time.

My Fitness Pal

   My Fitness Pal is a great way to keep you on track throughout the entire day. What makes this application so easy to use is that you can look up calorie information for whatever you’re consuming, add in the servings you’ve had, and view how you’re doing with your overall fitness goals. You can also log in the amount of time you’ve spent doing a particular activity, which will calculate an estimate of the calories to add to your workout information as well. On a weekly basis, the application will prompt you to enter your weight information, which it then translates into a line graph so you can chart your progress. The My Fitness Pal community is full of supportive other people to help you on your journey. With the ability to record your data on the go, there’s no reason to fall behind on your goals!


GymPact is one of the newest mobile apps to help you along your way. The way GymPact works is based on a design from university economists. You set up your account by essentially placing a “bet” on how many times that week you’ll hit the gym. The program works by taking the money on the line from those people that didn’t meet their pact and distributing that as rewards to those who did meet their goals for the week. It’s an easy way to keep yourself accountable. If you’re going on vacation or feeling sick, you can also “pause” your pact for the week. Once you install the app, you’ll check into a gym using GPS or use runkeeper to track your outdoor running. You’ll need to exercise thirty minutes for each workout to “count”!

How are American’s being affected by health care cost while being under employed or unemployed

The recession has taken its toll on Americans, and health care costs continue to plague underemployed and unemployed individuals. People who are employed and about to retire also see that their economic security is at greater risk than before because health care costs are rapidly increasing.

What is the impact of health care cost on workers? 

Employers are usually the ones who fund employees’ health benefits. However, health care costs are taken from the total amount of compensation paid to them. Due to the fact that health care costs continue to rise, employers have begun to remove some elements included in worker’s compensation. This includes retirement benefits and cash wages. Employers may also require higher health premium contributions from workers. Worse yet, employers will stop giving health benefit or only select a few workers who will qualify for benefits. In some cases, people who are employed by small businesses are not provided with insurance.

How about those who are underemployed?

Workers who are underemployed but still face the same health premium increases may give up their health benefits because they can no longer afford the coverage. In turn, they will be exposed to greater risk. Based on the study that National Nurses United released, almost half of underemployed and unemployed Americans do not have access to health insurance, and about 56 percent skip check-ups due to cost concerns. This leads to delayed medical care.

There were 1,500 participants in this study including 300 part-time workers, 757 full-time employees and 413 unemployed individuals. One of the reasons why respondents delay medical care is because they cannot afford it in the first place. Based on the survey, about 63 percent skipped medical checkups and dental care, 46 percent skipped test recommendations as part of a treatment process, 40 percent did not buy medications the doctors required and 18 percent admitted they had problems receiving appropriate services for mental health. This is why underemployed U.S. citizens are more likely to carry a life-long financial burden due to major illnesses.

Why health care costs also affect unemployed individuals?

Once individuals are unemployed, they often automatically lose their health coverage as well. It is difficult for unemployed people to cope with the loss of health insurance. The lack of it can cause a lot of problems. Unemployed individuals forgo medical care because they cannot afford the cost for checkups and hospitalization. Although it is possible to receive medical care even when not insured, Americans often need to pay thousands of dollars for their medical expenses.

Why do health care costs continue to rise?

• Technology 

Advancing medical technology can cause health care costs to rise. This is because a vast range of new innovations have already been introduced to improve medical procedures and diagnostic tests. These modern advances pave the way for introducing new forms of treatment that either shorten medical procedures or replace the usual treatment methods.

• Increased Demand for Services

The pressure is on the health care system due to the increased number of people in need of service. The growth of people over 50 that require health care also involves additional services from nurses, health care providers and physicians. This is to ensure that health care and medical facilities are keeping up with the demands.

• Prescription Drugs

The cost of prescription drugs has also dramatically increased. The frequency of use also affects the cost of health care these days. There are three factors that influence the cost of prescription drugs. These are price inflation, sudden switches to using more expensive drugs and more drugs being prescribed.

• Income

Even the rise in personal income can lead to an increase in health care costs. This is due to the fact that people see to it that their health is not compromised as they improve their quality of life. As a result, they spend on things that extend their life.

What needs to be done to control rising health care costs?

• The request for additional health care systems needs to be carefully evaluated.

• Efforts need to be simplified as much as possible.

• Medical malpractice lawsuits should have reasonable limits.

• State government programs also need to make sure that full funding is available to people.

What are the options available to unemployed individuals?

There are a number of options available for people who have lost their health insurance due to unemployment. People often get health coverage from their spouse’s employer. There are also individuals who may be qualified for Medicaid when they lose their insurance due to work policies. There are also some states that provide other alternatives for people who have unintentionally lost their health care insurance.

The Power to Make Choices: Benefits of an HSA

Health savings accounts (HSAs) operate like personal savings accounts. Money put into an HSA can only be used for health care costs. The individual has total control over the amount of money in the account; they choose how much to save, when to deposit money, and whether or not to use that money. The owner of the account can invest the money in bonds, stocks, or mutual funds. The money put into an HSA is not taxed as long as it is not withdrawn from the account for anything other than medical expenses. For a person to be eligible to open an HSA, he or she must have a high-deductible insurance plan, to provide coverage should there be a need for extensive health care.

HSAs were created in 2003 as a way to give more options and control to the individual. This is called consumer-driven or consumer-directed health care. HSAs were also theorized to keep health care costs down. The logic is that if individuals are spending their own money, they will use health care more wisely and conscientiously. It was also said to make the market more competitive and lower the rates set by health care providers. The IRS determines the limits on how much money can be contributed to an HSA. In recent years, the limits have been around $3,000 for individuals and $6,000 for the average family.

HSAs have several advantages. They give more control to the individual and they help prepare for the future. Because the money is not based on the current state of an insurance plan, there is no way the individual will not be able to access his or her healthcare savings. Especially for younger people who are healthy, HSAs allow them to save money that they would otherwise be giving to an insurance plan, without any “return” on the monthly premiums when they do not need health care. Then when they are older, they will have a safety net for medical costs.

Another advantage to HSAs is cost-effectiveness. The money a person contributes to their account is not taxed. This again makes it advantageous to younger people who generally have less tax exemptions and deductions. It allows them to “keep” a greater portion of their income. At some point in almost everyone’s life, health care expenses will be incurred. From a long-term perspective, money in an HSA account means less money has been paid in taxes.

Finally, employers can contribute to their employees’ HSA plan. Due to tax regulations, the employer will generally contribute via a cafeteria plan, which may include set contributions or matching contributions. Having a second party add funds to an HRA account means more money that the individual decides how to spend, as opposed to employer-purchased insurance, where payment decisions are made by the insurance company.

An HSA can be opened through a bank or through an employer using the HSA option. To open an HSA, a person must be under the age of 65 and have a high-deductible insurance plan. Individuals with HSAs must use high-deductible plans as their only form of health insurance (vision, long-term care, disability, and dental plans are permitted).

A high-deductible plan has advantages as well. The premiums for this type of plan are low because the deductible paid when health care is rendered is higher than normal plans. By using an HSA in conjunction with a high-deductible plan, a person is in control of their health care spending while protected should something catastrophic happen. For instance, an emergency room visit for a broken bone would generally be paid for entirely by the policy holder because the cost would not be high enough to exceed the deductible. This deductible would then be paid using the HSA account. If extensive health care was needed, the deductible would be exceeded and insurance would cover some of the costs. Some high-deductible insurance plans cover some preventative procedures, such as pap smears, before the deductible is met, making the HSA/high-deductible combination plan even more advantageous.

In conclusion, there are many benefits to having an HSA plan. They offer control over healthcare spending, untaxed investment opportunity, and greater decision-making power for the individual. Because they are used in combination with a high-deductible insurance plan, there is still a safety net should something catastrophic happen. Health care savings account are popular among young professionals because they help them save for future expenses while taking advantage of tax breaks. HSAs allow people to have power over how much money they save for health care and how that money is spent.

2012 Changes to Federal Health Care

2012 Changes to Federal Health Care

The U.S. federal health care system saw significant changes this year. This includes benefits added to existing federal mandates like the Affordable Care Act. On the other hand, some benefits were newly announced as federal laws this year. Although there are still a few debates on some of the changes, these benefits give more health care assistance to U.S. citizens. Changes to the federal health care system in 2012 include the following.

Affordable Care Act

In 2012, the U.S. Supreme Court upheld the federal Affordable Care Act. There were a few changes in the act that became effective on January 1, 2012. The value of each employee’s healthcare benefits must be disclosed by their employer. This requirement was originally to take effect on January 1, 2011, but it was postponed by the IRS in 2010. The act requires Readmissions Reductions programs to be implemented. The Centers for Medicare and Medicaid Services or CMS will reduce payments to IPPS hospitals beginning on October 1, 2012. These healthcare facilities should minimize readmissions or they will be penalized. Approximately 2,217 healthcare facilities are expected to receive penalty with over 307 of them receiving maximum penalty.

Employee and Company Benefits from the Affordable Care Act

The act aims to target the increase of insurance coverage while decreasing healthcare spending. Staring August 1, 2012, all new healthcare plans must include preventive services like mammograms and colonoscopies without charging the employee deductible, coinsurance or co-pay. This will drastically expand insurance coverage to almost all Americans and will change how Medicare takes care of healthcare issues. Through this, the federal government will play a significant role in the nation’s healthcare policies. All residents are also required to purchase medical insurance to avoid healthy individuals from waiting to get sick before getting insurance. Those who will not adhere will pay a penalty of 2.5 percent of the total household income or $695 for each person in the household, whichever is higher. The act authorized each state to provide insurance exchanges for those who don’t have insurance plans. These people can purchase insurance under four categories depending on the coverage they need.

The Affordable Care Act is also good for companies including food service providers such as restaurants and fast food chains. The employees’ added healthcare benefits mean paid sick leaves and preventive measures like tests. Employees who are sick won’t be a threat to other employees and to the consumers. This results to cleaner and hygienic practices in eateries. The act will also result to healthier and happier employees in any business setting. Women’s preventive services are also included in the revised act. Added services in the insurance plans include well-woman visits, pregnancy-induced diabetes Screening, HPV and HIV testing and counseling, STI counseling, contraceptive techniques and counseling, domestic violence counseling and breastfeeding support and counseling. The act also helps in preventing insurance coverage denial caused from pre-existing conditions and bans active policy cancelation.

Health and Human Services or Contraceptive Mandate

The Contraceptive Mandate is a federal law that calls for health insurance companies and employers to provide health insurance plans that include contraception. Although a number of U.S. states already have such laws, the Obama administration proposed a federal mandate for all states starting August 1, 2012. This mandate gave exemptions to church organizations. However, affiliated nonprofit corporations such as hospitals are not exempt.

This mandate was announced on January 20, 2012. It requires all healthcare plans to include contraceptives at no additional cost for employees. Sterilization coverage is also included in the federal mandate. The contraceptives allowed in the coverage are those approved by the Food and Drug Administration as follows.

• Male Condom
• Female Condom
• Diaphragm with Spermicide
• Sponge with Spermicide
• Cervical Cap with Spermicide
• Spermicide Alone
• Oral Contraceptives that are Progestin-only or The Minipill
• Combined Oral Contraceptives on Extended or Continuous Use like Estrogen and Progestin or The Pill
• Estrogen and Progestin Patch
• Vaginal Contraceptive Ring with Estrogen and Progestin
• DMPA shot or injection with Progestin
• The Morning After Pill or other Emergency Contraceptives
• Copper IUD
• IUD with Progestin
• Implantable Rod with Progestin

Debates and Arguments on the HHS or Contraceptive Mandate

There have been a number of arguments regarding this mandate including those from church leaders despite its religious exemptions. At present, there are around 30 lawsuits against the mandate based on religious grounds. These lawsuits comes from different institutions including churches, charities and universities. However, the contraceptive mandate has no rule over the woman’s right to have an abortion. It only gives women the freedom to choose among a variety of contraception techniques.

A Guide to Obamacare

Ever since its inception, Obamacare, also known as the Affordable Care Act, has drawn both applause and criticism. While many see it as a large step toward a universal health care system similar to those in place in other countries, others consider it as government interference and infringement upon personal choice and rights. On June 28, 2012, the Supreme Court declared that Obamacare was constitutional, even the contentious individual mandate, which requires all Americans to carry health insurance or face a stiff tax penalty.

As the debate goes on in a dramatic election year political climate, many people are still confused about Obamacare, what it does and does not do, and how it affects them personally. The pros and cons of the act are outlined in the sections below.

• An estimated 30 million Americans do not currently have health insurance. The Affordable Care Act will extend coverage to a larger group of people who are either unemployed or do not receive coverage by an employer.

• Insurance companies are not allowed to deny coverage because of a pre-existing condition and cannot stop coverage when someone becomes ill.

• Children can be included on their parents’ health insurance until they turn 26.

• States will receive aid from the federal government to allow low-income people to become enrolled in the Medicaid program.

• Obamacare will close the so-called “doughnut-hole” gap in Medicaid coverage by the year 2020.

• School-based programs for teen pregancy reduction along with health centers will receive $125 million each year.

• Insurance exchanges will be set up in each state to assist people in finding the best deal on private insurance.

• An appeals process outside of the insurance system will be available to those who are denied coverage.

• The act will drastically reduce the number of bankruptcies caused by the cost of extensive health issues.

• The government will be involved in the medical business, which may be considered an intrusion by some.

• Even though nearly 20 million people will be covered by Medicaid or an alternate program, millions will still have no health coverage.

• Five million senior citizens will no longer qualify for Medicare Advantage by the year 2019.

• Funding to Medicare will be reduced by $530 billion.

• There will be a large tax increase, especially on those who earn higher incomes. Also, some uninsured people may find the tax penalty more financially feasible than obtaining insurance.

• Since states have no choice but to accept the federally mandated insurance program, Obamacare violates the rights of those states.

• There is speculation that those who do not pay the penalty tax for not having insurance will go to jail.

The Affordable Care Act is intended to bring health care to all Americans and to ease the financial burden on future generations. It will undergo continued scrutiny by both political parties and will probably see some adjustments before going fully into effect in 2014.

2012 Changes to State Health Care Programs

Twelve states have already started with federal health exchange law implementation. These states have expanded health insurance coverage for insured residents and encouraged uninsured residents to register. However, other states have declined the health insurance exchange. States like Arizona, Louisiana, Kansas, South Carolina and Washington are among those that rejected the law. On the other hand, states such as Virginia, Wisconsin and Wyoming are still considering how the law will be implemented.

• Arkansas

This state has 539,000 uninsured residents. This is around 19 percent of the total population. Arkansas has relied on the federal government for an insurance exchange and has started implementation. Gov. Mike Beebe stated that employees will only have health care coverage if the federal government will pay for it. The state doesn’t have a backup plan if it is overturned, and it will have to rely on Congress to think of a new solution.

• California

Around 19 percent of the 7,209,000 state residents in California are uninsured. The state is among those that cooperate with the federal health care law. The California Secretary of State’s Health and Human Services Agency announced that about half of all uninsured people have signed up on the state’s Web-based enrollment system. The state has also started requiring insurers to provide coverage for children with pre-existing diseases. Parents’ healthcare plans would also include young adults until they are 26 years old.

• Alabama

With 720,000 uninsured state residents, Gov. Robert Bentley constructed a commission in 2011. He recommended a plan for a health insurance exchange, but it was opposed by other legislators. Press Secretary Jennifer Ardis stated that they do not know if the state can afford Medicaid expansion. Gov. Robert Bentley also stated that they are still planning the best course of action regarding the Affordable Care Act.

• Colorado

Colorado has 656,000 residents without insurance. The state passed legislation on a health insurance exchange in 2011, and it will be implemented in October of 2013. Colorado will not wait for the elections and has started to use Medicaid for uninsured residents.

• Connecticut

Gov. Dannel Malloy plans to implement the federal health care law and meet all its deadlines. The state has already hired a board of directors and staff to implement the law. Connecticut also allows young adults below 26 years old to be included in their parents’ health insurance plans.

• Hawaii

Gov. Neil Abercrombie plans to fully implement the federal health care law. Hawaii is one of the states that support the law, and it used a $300,000 private grant to create a job for a coordinator to perform overhaul implementation. If the federal law is struck down, the state will find solutions to expand insurance coverage and develop a healthcare insurance exchange.

• Iowa

Although the state has not fully implemented the federal law, residents have slowly gained insurance benefits. Iowans with pre-existing medical conditions can now get coverage, and they no longer have lifetime caps on their insurance policies. The state has preventive insurance without co-pays including well-child visits, cancer screenings and immunizations. Young adults can also stay on their parents’ insurance coverage until the age of 26.

• Maryland

Gov. Martin O’Malley passed legislation to implement the healthcare insurance exchange. The state has started to create a plan for a marketplace where small businesses and individuals can get insurance coverage. Maryland will continue with the healthcare programs that they have started even if the federal law gets struck down.

• Massachusetts

The federal healthcare overhaul came from the state’s health care law passed in 2006. The key factors in the federal law are still implemented in Massachusetts including the individual mandate that requires almost every resident to have insurance coverage. Only 2 percent of the population in the state is without insurance.

• Michigan

Michigan has also started with federal health law implementation. The Department of Licensing and Regulatory Affairs has been planning a health insurance exchange. However, Gov. Rick Snyder stated that they plan to focus on wellness initiatives if the exchange is not fully implemented.

• Minnesota

Minnesota is among the states that has fully implemented the healthcare exchange. As soon as Gov. Mark Dayton took office in 2011, he extended Medicaid coverage to over 80,000 adults. His administration developed an online health insurance exchange with $28.4 million secured from the federal government for the state’s planning efforts. The governor plans to add over 500,000 uninsured residents to the state’s Medicaid roster on January 1, 2014.

• New York

Gov. Andrew Cuomo ordered the implementation of a state-based healthcare exchange and will accept applications on October 1, 2013. The state targets the 15 percent of residents without insurance coverage. They will also expand Medicaid coverage to focus on full federal law implementation.


Preferred Provider Organizations (PPOs) and Health Maintenance Organizations (HMOs) are both managed health care plans. For individuals who receive health insurance as a benefit of employment, they will have, or choose, either a PPO or an HMO. Some employers offer both types of managed care plans whereas other companies will offer only one type of plan.


The HMO is a managed care plan that provides care through a network of providers. If an individual has an HMO, they are required to select a primary care physician from the network of physicians. Their primary care doctor is responsible for coordinating all of their health care. This means that if the individual needs to see a specialist, the primary care doctor must provide a referral in order for the specialist to be covered under the plan. In addition, the specialist must be an in-network doctor in order for the treatment to be covered.

The primary care physician provides the individual with all physicals and basic regular health care visits. The primary care physician may be a general practitioner, a family physician or a pediatrician if the health care recipient is a child. In some cases, women may choose a gynecologist to be their primary care doctor.

HMOs generally cover the costs of preventative health care with the primary care physician. However, HMOs do not provide flexibility for the benefit holder. The HMO benefit holder is required to seek emergency treatment from an in-network hospital. The HMO offers lower premiums and out-of-pocket costs for the benefit holder. HMOs generally establish restrictions that apply to treatment. The treatment range and scope is determined by the plan.


The PPO is more flexible than the HMO. The plan contracts with several preferred health care providers and the benefit holder is not required to select a primary care doctor. The benefit holder may see any doctor in the preferred network and they are not required to obtain a referral from a primary care physician. The benefit holder is not required to see only health care providers in the network, but if they see an out-of-network provider, they will pay higher amounts for the service. If an out-of-network provider is utilized, the benefit holder will need to pay the provider for services rendered, and then complete reimbursement forms in order to have the PPO plan pay a portion for the services.

Though PPO policy holders will not need to select a physician or hospital within the preferred network, they will pay more for care. PPO policy holders are not required to receive a referral to see a specialist. They will pay the preferred rate if the specialist is an in-network provider.

PPOs impose fewer restrictions on the policy holder. For example, range and scope of treatment is not usually predetermined. However, due to the flexibility and fewer restrictions, PPOs charge higher premiums than HMOs. If the PPO policy holder seeks treatment from an out-of-network health care provider, there is a good chance that the PPO company will reimburse them for at least a portion of the cost whereas the HMO plan would likely not cover any of the costs for out-of-network treatment.

Physicians and health care providers in the preferred network are paid by visit by the PPO plan company. The payment model is contrasted to the payment model of the HMO where health care providers are either employed or contracted by the HMO plan company.

A few advantages of an HMO over a PPO include:

– Centralized Medical Records

The policy holder’s medical records are maintained by their primary care physician. For PPO policy holders, their medical records may not be maintained by one health care provider, but rather by each provider they see.

– Payment

With an HMO, the policy holder pays a co-payment for services rendered. The co-payment may be a nominal fee for services, such as $10 or $20. The policy holder knows what to expect in terms of payment when they visit the health care provider. The PPO policy holder may be required to pay a larger portion of the cost of the visit.

Advantages of the PPO over the HMO include:

1. Flexibility and Choice

The PPO policy holder is able to choose the provider, to change providers and to obtain second opinions.

2. Geographic Availability

Care provided by HMOs is generally restricted to a certain geographical area where PPO policy holders may generally find network providers across the U.S.

Physicians and health care providers are generally paid a retainer fee per year to serve HMO patients. Some HMO physicians may actually be employees of the HMO provider.