Welcome!

News Feed Item

Study Finds Health Reform Law Insurance Tax Costly to Medi-Cal

Price Tag to the Golden State Approaches $797 Million over Ten Years

WASHINGTON, Feb. 12, 2014 /PRNewswire-USNewswire/ -- A report from actuarial firm Milliman, Inc. and commissioned by Medicaid Health Plans of America (MHPA) shows a provision of the Affordable Care Act (ACA) intended to tax risk-based managed care insurance companies to help fund health reform will drain $797 million from Medi-Cal, California's Medicaid program.

The report, "ACA Health Insurer Fee: Estimated Impact on State Medicaid Programs and Medicaid Health Plans," an update of Milliman's 2012 study that takes into account new state Medicaid expansion decisions, shows that the health insurer fee (a.k.a. the health insurance tax), along with additional taxes paid due to the non-deductibility of the fee, will cost states about $13.6 billion over the ten-year period 2014-2023, according to a moderate growth scenario. Medi-Cal's share of $797 million will hinder the state's ability to care for millions of disadvantaged Californians.

States and the federal government end up paying for the tax due to actuarial soundness requirements. As an important consumer protection, the Balanced Budget Act of 1997 and implementing regulations require Medicaid managed care payment rates to be actuarially sound, inclusive of medical costs, administrative costs, taxes and fees.  So according to federal law, the insurance tax must be paid by the state and federal governments through higher payments provided to plans, and results in the federal government taxing states and itself.

It is important to note that the ACA includes a provision that specifically exempts Medicaid managed care plans from paying the insurance tax. Unfortunately, Congress limited the exemption to those entities with a tax status of "non-profit."  Even though both non-profit and for-profit plans offer exceptional services to the poorest patients in a state, only the non-profit plans are exempt. This results in the tax not being uniformly applied, affecting Medicaid beneficiaries and the states in an uneven fashion.

"It is apparent now more than ever: the health insurance tax is an ill-conceived method to finance the ACA and, in part, it will be on the shoulders of California's sickest and poorest" noted Jeff Myers, MHPA's president and CEO. "It will drive up costs for commercial consumers, it will burden California's Medicaid budget, and it will create a dynamic that limits options for California's Medicaid beneficiaries via reduced access to services and benefits. Myers added, "Medicaid health plans in California provide capitated risk-based health coverage for poor children, pregnant women, the elderly, and the disabled, so the $797 million cost of this tax will be at the expense of those who need it the most."

About MHPA
Medicaid Health Plans of America (MHPA) is the leading national trade association solely focused on representing the universe of Medicaid health plans. Working on the behalf of over 135 for-profit and non-profit member health plans that serve over 15 million lives, MHPA provides advocacy, research, and organized forums to support policies that enhance the delivery of quality health care to Americans in need. For more information, visit http://www.mhpa.org.

Contact: Joe Reblando
jreblando@mhpa.org
202-857-5722

SOURCE Medicaid Health Plans of America

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busine...
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities – ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups. As a result, many firms employ new business models that place enormous impor...
We all know that end users experience the Internet primarily with mobile devices. From an app development perspective, we know that successfully responding to the needs of mobile customers depends on rapid DevOps – failing fast, in short, until the right solution evolves in your customers' relationship to your business. Whether you’re decomposing an SOA monolith, or developing a new application cloud natively, it’s not a question of using microservices – not doing so will be a path to eventual b...
SYS-CON Events announced today that Massive Networks, that helps your business operate seamlessly with fast, reliable, and secure internet and network solutions, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. As a premier telecommunications provider, Massive Networks is headquartered out of Louisville, Colorado. With years of experience under their belt, their team of...
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
SYS-CON Events announced today that Taica will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Taica manufacturers Alpha-GEL brand silicone components and materials, which maintain outstanding performance over a wide temperature range -40C to +200C. For more information, visit http://www.taica.co.jp/english/.
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
Transforming cloud-based data into a reportable format can be a very expensive, time-intensive and complex operation. As a SaaS platform with more than 30 million global users, Cornerstone OnDemand’s challenge was to create a scalable solution that would improve the time it took customers to access their user data. Our Real-Time Data Warehouse (RTDW) process vastly reduced data time-to-availability from 24 hours to just 10 minutes. In his session at 21st Cloud Expo, Mark Goldin, Chief Technolo...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
SYS-CON Events announced today that TidalScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale is the leading provider of Software-Defined Servers that bring flexibility to modern data centers by right-sizing servers on the fly to fit any data set or workload. TidalScale’s award-winning inverse hypervisor technology combines multiple commodity servers (including their ass...
In the fast-paced advances and popularity in cloud technology, one of the most critical factors revolves around concerns for security of your critical data. How to assure both your company and your customers they can confidently trust and utilize your cloud environment is most often top on the list. There is a method to evaluating and providing security that exceeds conventional modes of protecting data both within the cloud as well externally on mobile and other devices. With the public failure...
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, will provide a fun and simple way to introduce Machine Leaning to anyone and everyone. Together we will solve a machine learning problem and find an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intellige...