#1 PPACA Supreme Court Decision

Leaving a footprint in history, President Obama’s landmark legislation was deemed constitutional by the United States Supreme Court, granting 30 million more Americans access to affordable healthcare coverage. No President since Lyndon Johnson had been able to pass such a substantial piece of healthcare legislation.

The Supreme Court case started the day of the signing of the actual bill. Florida then filed a lawsuit contending the individual mandate and Medicaid expansion found within the law. 25 other states would later join the battle, positioning more than 50% of the nation against Obama’s law.

There were three major components to the Supreme Court decision:

Individual Mandate – Does Congress have the right to impose a “tax” (or a look-a-like) on Americans without health insurance?
Medicaid Expansion – Does the Federal government have the right to require states to increase Medicaid eligibility to 133% of the Federal Poverty level?
Severability – If one portion of the health care law was deemed unconstitutional, was the entire law to be struck down?

In the end, the Supreme Court upheld the individual mandate by a 5-4 decision, claiming that the penalty applied for not having coverage is a form of taxation, a power that Congress will continue to sustain. However, the Medicaid expansion was deemed unconstitutional and was dubbed “overreaching”. This measure was a subtle win for enthusiasts of federalism and States’ rights.

Click Here To Return to the Beginning

Lessons “Unlearned” from Healthy NY

Like many other New York State programs, Healthy New York aims to offer services for the most vulnerable, susceptible, and disenfranchised citizens of the state. It is a state-sponsored health insurance program uniquely designed to offer cheap, affordable coverage to those most exposed to what is known as the “health insurance gap”. In layman’s terms, this gap refers to those who earn too much income for Medicaid benefits but do not earn enough to afford private coverage.

While this particular demographic may not be covered, it does not mean that their medical costs are shielded from the industry. In fact, these costs seep into the system through holes that actually exacerbate the continuous increases in health care expenditures. This typically happens through lack of access or health illiteracy. Let’s take a look at some examples of exactly how:

A lack of a primary care doctor leads people to incur unnecessary visits to the emergency room where health care costs are exponentially higher
Not completing proper rehabilitation
Failure to adhere to medication instructions due to complexity or price

Accumulating over half a million enrollees throughout its 12-year lifespan, Healthy NY aims to solve these issues through three main strategies: eligibility rules, plan design, and a reinsurance program. By definition, Healthy NY operates much like a health exchange. Commercial health carriers compete for business through the state-sponsored program that commoditizes health insurance by regulating its benefits, approving its pricing, controlling distribution channels, and providing stringent transparency to an industry that typically undermines free market principles. It is a deviation of what AC Enthoven calls Managed Competition.

Unlike other states entering into the exchange, New York has the unique opportunity to learn from the pros and cons of the aforementioned strategies. Let’s take a look at what the health executives should be analyzing.

Eligibility Rules

Pros: Healthy NY insures those who could not otherwise afford it. As a result, the rules surrounding eligibility are airtight. To be eligible, the applicant cannot have been covered any time in the prior 12 months. This rule can only be overlooked if a person experiences a special event in their life, such as having a child, marriage, moving, or losing coverage from somewhere else. An individual’s income must fall below 250% FPL, or 400% FPL for employees of a small business. Employees of a business that does offer insurance but does not contribute toward the cost of the coverage, a typical experience for many part-time workers, can also enroll in the program.

Cons: The eligibility rules for the most part are very similar for every county in the state. This can prove to be problematic due to the variability of demographics for a state with over 19 million people. Regionally areas like Buffalo and Rochester should have the flexibility to build eligibility rules that meet the needs of those communities. Conversely, urban and dense areas like Brooklyn or Manhattan where it is less homogeneous require attention to the nuances of those communities and flexibility to alter certain rules. In a similar fashion, health care reform is a one size fits all approach to 50 different states. 40% of the national uninsured population resides in 4 states (CA, NY, FL, TX) yet health care reform disrupts all states. Similarly, 75% of the uninsured population in New York resides in the downstate region (New York City & Long Island). A program to solve the uninsured should be national in support but very local in execution.

Plan Design

Pros: Healthy NY offers comprehensive coverage for the most typical health services that patients incur. This includes primary care and specialist office visits, inpatient hospital stays, preventive care, and pharmacy benefits. Co-payments for these services are more affordable than the average commercial health plan. Many plans created for lower income individuals fail to realize the high sensitivity to price and prohibit cost sharing for routine visits. This can actually result in a counterintuitive effect of consumers foregoing coverage due to high costs. Additionally, Healthy NY does not offer out-of-network benefits, which helps to keep costs low, protect the consumer from balance billing, and protect the industry as a whole from inflated health hikes.

As of 2010, the program helped to insure over 165,000 New Yorkers who would have otherwise been trapped in the “gap”.

Cons: The benefits covered under Healthy NY are not quite as extensive as those covered under Obama’s health care reform legislation. A big one is ambulance services; with Healthy NY, a member would face inpatient hospitalization co-payments of $500 and be 100% responsible for the ambulance charge (out of pocket). In 2006, the Pataki Administration issued an opinion to a New York State law providing some patient protections in an attempt to shield members from these costs. However, the outlined patient protections do not help individuals without ambulance coverage. And it’s not like ambulance costs are decreasing either! Earlier this year, the FDNY requested a 40% increase in ambulance services that would increase charges from $515 to $704. So in actuality, a Healthy NY inpatient visit could end up close to $1,200 in an actual emergency situation. If the member has not yet met their deductible, those charges could wind up being paid for entirely out of pocket. An interesting side note to this is that over 34% of FDNY’s ambulance bills go unpaid, representing close to $130 million annually.

Other services not covered by Healthy NY include mental health, alcohol and substance abuse, hospice care, and dental/ vision/ hearing aid benefits. On average, Healthy NY members with mental health conditions pay over $300 a month for coverage with zero insurance contributions.

Cutting benefits for the sake of affordability has proven to reduce health care costs in the short term but not necessarily bend the long term cost curve. Despite this affirmation, a $1,200 deductible for individuals (and $2,400 for families) is currently in the plan design for 2012 enrollees. That represents 9% of the annual income for someone who is right at the cusp of being ineligible for Medicaid and 5% of the income for someone at the highest income level for Healthy NY eligibility (250% FPL). So while claims data may show health care utilization in high deductible plans to be lower than in first dollar coverage plans, Health NY history has shown that longer-term impacts could cause more harm and actually result in higher overall costs and a sicker population.

Reinsurance Program

Pros: The State of New York realized from the beginning that the only way to make this product appropriately affordable is through a reinsurance program. Specifically, the State pays 90% of all medical claims between $5,000 and $75,000. This has allowed for more affordable rates for New Yorkers as well as favorable financial results for the participating health companies. In 2009, participating health companies ran at an average 20% operating loss without reinsurance. This means that they paid out 20% more to doctors and hospitals than they were able to collect in premiums. However, the reinsurance program quickly turned this average into a 17% operating gain.

Cons: Like all other forms of State funding, reinsurance funding is susceptible to budget cuts and politicization. This, in turn, produces uncertainty for the participating health companies. In 2010, New York only paid out $160 million of the $180 million requested reimbursements. The underfunding represented 12% of the total claim costs between the identified thresholds. It is also important to note that reinsurance occurs after the health care calendar year cycle. So, this means that there is a period of time when a health company could lose on a monthly basis, until finally the reinsurance payment is made.

Additionally, when these cuts do occur, it forces health companies to make up the difference in future rate increases. This directly conflicts with the “spirit” of the program. As costs increase, more Healthy NY members are liable to drop coverage all together and remain uninsured. Finally, the reinsurance program has not done so well in regards to member satisfaction. A 2010 survey conducted by Burns & Associates showed that only 47% of sole proprietors/ individuals were very or somewhat satisfied with the cost of the Healthy NY program. In fact, complaints about costs/ rate increases were made publicly available by the Department of Financial Services. Check out the comments here.

Lastly, reinsurance based on claim costs that have not been adjusted for inflection fails to stay current with the near double digit increase in health care costs each year. New York in particular is one of the most expensive states for health care services. The Risk adjustment program in Obama’s health care reform bill will use diagnosis codes rather than claim dollars which will be an adjustment for the New York health care industry; especially if reimbursements are based on national averages rather than encompassing region differences in pricing.

Unlearned Lessons

At the end of the day, health care exchange attempts to solve the uninsured crisis through plan designs, eligibility, and reinsurance schemes. The plan designs help to provide lower co-payments/ deductibles for individuals with less income. The eligibility requirements carve out individuals receiving insurance from their employer, making sure affordability and benefit requirements are met. And lastly, behind-the-scenes actuarial programs attempt to mitigate chance and solve for market failures through risk adjustment and reinsurance. In some ways, New York is serving as a guinea pig to many of the untested provision of the Affordable Care Act. It will be interesting to see how many of the lessons learned from Healthy NY will continue to go in one ear of the industry and out the other.

Christie/Obama: Is it Politics or Policy?

They were friends just a week ago... — They were just friends just a week ago…

[polldaddy poll=6752248]

Is Christie’s decision about politics or policy? Answer our poll. You decide.

Saying “No” Again
New Jersey Governor, Chris Christie vetoed the latest Health Exchange bill sent to his desk by Democratic legislators on Thursday moving New Jersey one step closer to a federally facilitated Health Exchange. If the Governor does not come up with his own Health Exchange plan by December 15^th, New Jersey could default to one run by the Federal government. This would mean less control for a Governor that has shown in the past he enjoys the leadership seat. However, Governor Christie and many other Republican law makers argue that they have not been given enough details about Health Exchanges to make an informed decision on whether they should create one on their own. So what details are these Republican Governors specifically referring to? Here is a big one; the Basic Health Program (BHP).

What is it?
BHP is an optional program administered by a partnership between the Federal Government and a State to provides Medicaid-like benefits to recipients that earn below 200% of the Federal poverty level (roughly $22,400) and are not eligible for Medicaid. The benefits would have very modest co-payments and cost-sharing. Monthly premiums would also be pegged at very low levels; roughly 3% of an individual’s annual income. There are also cost-sharing subsidies built into the plan to make sure that out of pocket expenses are manageable for people at lower income levels. The plans would have to meet an 87% actuarial value for people with incomes between 150-200% FPL and a 94% actuarial value for those earning below 150% FPL. Actuarial Values refer to the percentage of health care costs a health insurance plan is required to cover. So if the BHP population on average had $10,000 in health care costs per year, a BHP plan for someone earning betwel 150% FPL would have to cover $9,400 of the member’s health care expenses. This coverage level is described by the law as “Platinum” and closely matches the level of benefits administered in Medicaid.

Health and Human Services (HHS) would pay 95% of the cost of the program in year one. This actually could save New Jersey tax payers millions of dollars in the near term. Today, New Jersey provides Medicaid to all children who are in households that earn below 350% FPL (roughly $39,100) and adults below 200% FPL when state funds permit. New Jersey pays a 40% share of these costs while the Federal government picks up the rest. With a BHP, the population receiving these benefits below 200% FPL would be transitioned out of the Medicaid program and into the BHP. This would shrink the New Jersey share of the cost to 5% with the Federal government picking up the remaining 95%. In 2010, the cost of the New Jersey Medicaid program reached $10.1 billion with roughly 1.2 million enrollees. That equates to $8,417 in health costs per person per year. New Jersey’s share was $3,337 of the burden. A BHP could potentially shrink that to $420 per person.

For comparison, $8,417 is above the 2010 U.S. average of $7,538. Internationally, the next closest country in costs is Norway with per person per year healthcare costs of $5,003.

New Jersey
The NJ Health Exchange bill that Governor Christie vetoed explicitly requires the state to set up a Basic Health Program. The state has over 835,000 people who potentially could be eligible for the BHP. Additionally, compared to state-wide averages, New Jersey has a smaller proportion of lower-income citizens in their State.

	New Jersey		United States
Federal Poverty Level	Population	%	Population	%
Under 138%	1,996,600	23%	86,370,800	28%
139-200%	838,700	10%	34,223,900	11%
200-400%	2,048,887	24%	85,415,025	28%
+400%	3,802,598	44%	101,881,875	33%
Total	8,686,785	*100%*	307,891,600	*100%*
Source: Urban Institute and Kaiser Commission on Medicaid and the Uninsured

So Why Not?
So if the impact of the program are favorable to New Jersey why would Christie veto? HHS and the Obama Administration have been reluctant to give information on the specifics around this program. On November 30^th over 400 pages of guidance were released by the Federal Government and there was not a single mention of the BHP. Additionally, there are not enough details in the information that is available to fully understand how the BHP will properly operate.

Here are questions that Governor Christie and many other State leaders would greatly appreciate answers to:

How does it officially operate?
Does the BHP follow the State’s essential health benefits package or do they resemble Medicaid or NJ Family Care?
Is the 95% Federal funding based on a national average or is it specific to NJ? This is very important since NJ’s cost per person exceeds the national average.
Are brokers allowed to sell BHP or is it restricted to just Navigators.
- If broker can sell BHP, how are commissions administered?
What should be the reimbursement rate for BHP to providers? Medicaid? A higher percentage of Medicaid? 150%? 200%?
How do “risk adjustments” in the Exchange impact the BHP?
What happens to the commercial exchange market if the population is only 200% of FPL and higher?
Does the BHP distort the commercial exchange with adverse selection?
Does the BHP allow flexibility for an out-of-network option?

Rutgers’ Center for State Health Policy released a report on December 2011 looking at different policy implications of the Basic Health Program. You can find their report here.

The Diabetic Economy

November is American Diabetes Month. Diabetes is an ever growing disease impacting millions of people in this country. Here are the statistics:

– 25 million Americans have Diabetes
– 18 million have been diagnosed
– 7 million do not know they have the disease
– 79 million Americans are pre-diabetic

Essentially, you could fit every single Diabetic in the state of Texas. The ones that have been diagnosed could fit in the state of New York. The ones that have not been diagnosed could fit in the state of Massachusetts. Lastly, you would need the states of Florida, New York, and California combined to fit all the Americans that are pre-diabetic.

Stack & Rank
Additionally, America far exceeds all of her developed counterparts with respect to Diabetes rates. In fact, the International Diabetes Federation ranks the United States 29^th out of 223 countries for Diabetes prevalence at 10.3%. For comparison purposes, United Kingdom is ranked 199^th place with a prevalence rate of only 4.9% and all of Europe is ranked 108^th place with a prevalence rate of 6.9%.

A Preventable Disease
The most common form of Diabetes is Type-2. 90% of all diagnosed diabetes are Type-2. This is where the body is unable to use the insulin produced. Type-2 Diabetes is unique in that it can be prevented with lifestyle changes. While some risk factors include family history and ethnicity, most of the major risk factors are things people can control; things like obesity and physical inactivity. A study published in the New England Journal of Medicine in 2002 found that lifestyle changes and increased physical activity in non-diabetics yielded a 58% reduction in the incidences of Type-2 Diabetes in that population. The effort required for these success rates was a minimum of 150 minutes of physical activity per week and an average of 7% weight loss. However, despite the ability to prevent this debilitating disease, the rate of new cases continues to skyrocket. This has been especially problematic with children. The rate of new incidences of diabetes for youth under the age of 10 is roughly 20%.[i] For youth aged 10-19, it increases to over 25%. Most children diagnosed with diabetes have Type-1, meaning the body produces little to no insulin. However, Non-Hispanic Blacks and American Indians have seen explosive rates among children with Type-2 diabetes. In fact, the Type-2 rate for Non-Hispanic Black youth is over 20% and for Native Americans it is well over 35%.

Economic Impacts
Diabetes is not only debilitating to one’s physical health, but also to their financial health and security. The most common source of financial security for working class Americans is through life insurance. Diabetes often causes life insurance rates to be less affordable. This in turn decreases the chance of ever having adequate insurance coverage to protect one’s family and assets. Conversely, as Diabetes rates increase in young children, it continually puts them at a disadvantage to their non-diabetic peers.

It Adds Up
The Center of Disease Control estimates that Diabetes cost America $174 billion dollars a year in indirect and direct costs. Americans with Diabetes have 2.3 times higher healthcare costs than if they were non-diabetic.

$116 billion represents direct health costs while $58 billion represents indirect costs from loss of work, lower labor output, disability, and premature death. Every dollar loss from an American that misses work due to Diabetes is a dollar that is stolen from the U.S. Economy.

Just to understand the size of these loses; $174 billion about equals the amount raised by the U.S. Government in corporate taxation in 2011. $116 billion equals the Obama tax credit to 95% of Americans earning below $250,000 (for families). Lastly, $58 billion dollars is about the amount allocated to Education in the 2013 budget from the Obama administration. These are big dollars and it’s all for a disease that in many cases can be prevented. The best economic stimulus package might be making America healthier.

[i] Source: SEARCH for Diabetes in Youth Study

“Healthcare…It’s On Aisle 7”

In 2014, almost everyone must buy health insurance or face tax penalties. Health Exchanges serve as the vehicle for consumers to buy health plans via a state-run website. New York recently shared their intentions for their State-based Health Exchange website. It looks very similar to the user experience of a Travelocity.com or Expedia.com. A user can enroll with a log in and a password. They can shop and compare plans without actually buying anything through a user-created profile. After entering a series of demographic information including their name, address, age, and income, a wide array of product options are displayed. The options are specific to their eligibility criteria and the screens are dynamic to stop the need of constant scrolling.

There are graphics and pictures and the site has a modern and clean look to it. There is a section where users can choose their priorities as a consumer. Meaning they can decide to look at health plans based on whether their doctor is in-network, whether the plans have high quality ratings, or simply on price.

Ten other states are planning to use a very similar website. They are Alabama, Arkansas, California, Colorado, Illinois, Massachusetts (with Rhode Island and Vermont in a consortium), Minnesota, Missouri, Oregon and Tennessee. IDEO, a California-based design company, lead the effort. They are known around the world as leaders in driving creative solutions to complex problems and processes. I am convinced health care reform falls in this bucket.

To witness this healthcare shopping experience click here.

GOP to Obama – “Congratulations Mr. President, But We Need More Time”

After congratulating President Obama on his election win and committing to work with his Administration, 31 Republican Governors representing 62% of the country asked Obama for an extension for creating their state’s Health Exchange.

That’s because November 16^th is the deadline for states to submit a letter of declaration for a state-based exchange and as of today:

Only 2 states had health exchanges prior to the Healthcare reform bill (MA & UT). They collectively represent 2% of the country’s total uninsured population.
Another 12 states (WA, OR, NV, CA, CO, IL, WV, DC, MD, CT & VT) have passed Health Exchange legislation representing 28% of the country’s total uninsured population.
3 States have signed executive orders to build an exchange representing 7% of the country’s total uninsured population.
Another 3 states are very close to passing legislation with representing 9% of the country’s total uninsured population.

So only 46% of the uninsured population across the country lives in a state that is well on their way to creating a health exchange. Many of the remaining uninsured population lives in a state with a Republican Governor. Specifically:

7 states representing 26% of the uninsured population have decided to not pursue a state-based exchange. This includes the states that represent the largest number of people without health insurance; Florida (3.8 million uninsured) and Texas (6.1 million uninsured).
The remaining 24 states represent 30% of the uninsured population and have yet to are still unsure whether they will pursue a state-based exchange or not.

Republicans are on the fence about exchanges because many of the rules around Health Exchanges have yet to be released. For example, the products sold within the exchange must meet very specific “actuarial value” guidelines. The tool to determine these actuarial values has yet to be released by the Department of Health and Human Services. This makes it nearly impossible to do any fair assessment on how the Health Exchanges might impact the existing individual and small business health insurance markets.

Additionally, there are regulations that require risk sharing to occur between health insurance companies. This assists companies that may enroll a disproportionate share of higher healthcare utilizers. The regulations that specify the risk sharing methodology have yet to be released as well.

As a result, Governors are nervous about committing to building something they do not fully understand. Trying to find answers, Republican Governors on three occasions mailed President Obama a letter asking for detailed responses to over 30 questions surrounding health care reform. One of their biggest worries is how Medicaid will work with Exchanges because last summer the Supreme Court ruled that it was unconstitutional for the Federal Government to force states to increase their Medicaid eligibility to 133% of the Federal Poverty Level. Essentially for many of these red states, there will be a gap between where Medicaid ends and subsidies for Health Exchanges begin. Individuals that find themselves in this gap will still be required to buy health insurance even though it may not have access to subsidies which could make the choices unaffordable.

The National Conference of State Legislatures is a great website for up-to-date information on Health Exchanges.

HEALTH EXCHANGE MAP

Source: National Conference of State Legislatures, Federal Health Reform: State Legislative Tracking Database; Politico.com; Commonwealth Fund analysis.

KEY:
Dark Green States – Exchange in place prior to PPACA
Green States – Exchange established through signed legislation
Brown States – Will not pursue state-based Exchange
Tan States – Studying Exchange establishment or pursuing alternative options
Light Blue – Exchange legislation passed or pending in 1 or both houses
Blue – Exchange established through Executive Order

Similiar to Jay-Z, HHS Delays Blueprint

Back in 2008, Jay-Z’s much-anticipated album, Blueprint 3, was set for release. It was complete with hits like “D.O.A.”, “On To the Next One”, “Run This Town”, “What We Talkin’ About”, and everyone’s favorite anthem, “Empire State of Mind”. Unfortunately, Jay-Z delayed the release date to the fall of 2009 to much chagrin from the Hiphop community. In a very similar fashion, Kathleen Sebelius, Secretary of Health and Human Services, sent a similar messageto Governors last Friday, November 9th. The deadline for Blueprints on State-based Health Exchanges was being delayed as well.

The Briefing Room has been tracking this deadline on our website (see BR Countdown Clock Watch on homepage). We’ve now learned the new date will be December 14^th of this year. States will still be required to send in a declaration letter this Friday, however, informing HHS of the type of Exchange they intend to build. But the delay now allows Governors another month or so before they must send in all the details.

D.O.A. For Governor Christie, this is excellent news. The NJ Legislature has been all too busy submitting two Health Exchange bills to his desk in the last 6 months. He vetoed the first one. At the time there was too much uncertainty surrounding health care reform. The Supreme Court had yet to decide if the reform bill was constitutional. Even more importantly, America had yet to decide their next President. Christie’s candidate ran to REPEAL! and replace the entire Patient Protection and Affordable Care Act.

On To The Next One The NJ legislature regrouped, made some tweaks, and passed a second bill on October 18^th. The second version includes many “Non-conservative” ideas like requiring health insurance companies to offer a plan at every metal level (see Health Exchanges – Part III) or requiring the same products to be sold inside and outside the Health Exchange. The bill also applies an undisclosed surcharge to health insurance companies regardless if they take part in the Health Exchange or stand on the sidelines. Lastly, it required a basic health option, which expands Medicaid from 133% federal poverty level (FPL) to people at the 200% FPL (roughly $22,400 annual income). Any policy that expands an entitlement program is always met with strong opposition by Republicans. History has taught them: whatever the Government giveth, it rarely taketh away. Specifically, in the first year of the program, 95% of all costs are funded by the Federal Government. Each ensuing year the Federal funding declines and cost slowly shift to the States. Many States, including NJ, have balance budget amendments. The Federal Government, with a record $1.8 trillion deficit, does not. So States worry that they will have a new unfunded liability as the program enters its 3rd and 4th year. Ironically, terms for Governor last 6 years, Presidential ones last only 4 years. And unfortunately for Sebelius, a HHS cabinet post can last as short as 1 bad decision.

Run This Town Christie will have to decide the fate of New Jersey by this Friday even though the details can wait. Over the next 30+ days he will have to either tweak the current bill or draft his own if he wants New Jersey to go down the path of a State Partnership Exchange, the most flexible of the three exchange options that is heavily favored by Republicans (see Health Exchanges – Part II).

What We Talkin’ About? A 45 page PDF outlines what is an Exchange Blueprint. It’s an application that requires specificity around 13 different aspects of Health Exchange operations ranging from legal authority and governance (section 1.0), eligibility and enrollment (section 3.0), finance and accounting (section 8.0) to oversight and monitoring (section 11.0).

Empire State of Mind Governor Christie’s neighbor over in NY already submitted his Exchange Blueprint on September 14^th. Check it out here. However NY does not have an Exchange bill passed either and there are still many outstanding questions left to be determined. Such as: Will NY have a Basic Health Option? Will NY’s Small Business Exchange (SHOP) be for businesses with 1-50 enrolled, 2-50 enrolled, 1-100 enrolled, or 2-100 enrolled? Will NY define the plan designs offered in the Health Exhcanges? Will the plan designs required an out-of-network option? Etc…..

To Be or Not To Applebee’s? – Businesses Question Obamacare

It started with Papa John’s stating that Obama’s healthcare reform bill called the Affordable Care Act (ACA) would raise the prices of pizza by $0.11 to $0.14 cents. CEO, John Schnatter, stated that as a result the pizza chain would be forced to find ways to cut these new costs.

Then Darden Restaurants, the largest casual dining company in the world, threatened to cut employee hours. This would keep them part-time and avoid the increase in costs from the ACA. Darden Restaurants owns and operates Red Lobster, Olive Garden, and LongHorn Steakhouses and has over 185,000 employees nationwide.

Now, as recent as yesterday, Applebee’s became the latest restaurant firm threatening to halt hiring in light of the ACA. CEO, Zane Tankel has pointed to the high costs of healthcare reform suggesting that the new law will cost the franchise an extra $0.50 per sandwich.

Why So Many Restaurants?
Restaurants are prone for having hundreds of employees that work part-time. This becomes a key issue with healthcare reform because the ACA has an “employer mandate” which requires large businesses of more than 50 full-time employees to offer health care coverage to their employees. The ACA outlines that a full-time employee works 30 hours or more a week. However, the ACA also counts up a firm’s part-time employees and calculates their “full-time equivalence”. For example: three part-time employees working 10 hours a week count a one full-time employee. This change in calculating employees will impact thousands of businesses, if not more. Restaurants with more than 50 employees under the new definition now have a new burden to offer healthcare coverage despite the tough economy. If they do not, they will face penalties of up to $2,000 per employee per year.

Not So Ease
The type of coverage offered is also regulated. Some restaurants like McDonald’s provide “mini-med” plans that offer watered-down health insurance benefits to their employees. Under Obama’s bill, these plans are no longer constitutional. McDonald’s received a waiver from the White House which allowed them to continue offering these plans but that will soon change. In fact, by 2014 the only health care plans offered by large employers that qualify must cover a minimum of 60% of an average person’s yearly healthcare costs. If not, employers could face penalties as well.

Since the Supreme Court reaffirmed the ACA as the law everyone must have qualified health insurance coverage by 2014 regardless if they receive it from their employer. Coincidently, a recent 2011 survey found that 79% of the 48 million uninsured Americans have someone in their family working either full-time or part-time.

1 Man 1 Mind

How Obama Won The Buckeye State

Romney had high hopes to win Ohio. A win in Ohio would have proven Romney’s decision to run on a message of repealing the Affordable Care Act (Obamacare), correct. Nonetheless, he lost the state to President Obama by a razor-thin margin. The loss is still a surprise to many Republican operatives; including Karl Rove. Their polling showed a nearly impossible for Obama to win the state. But the question remains, how did two campaigns come up with two very different predictions?

Here’s how:

Ohio demographics in 2011 included 10 million people

84% white/ 12% black / 3% Latino

Ohio voter demographics on Election Day included 5 million voters

79% white / 15% black / 3% latino

Ohio

79% of voters were white but they represent 84% of the state (-5% decrease)
15% of voters were black but they only represent 12% of the state (+3 increase)
3% of the voters were latino and they make up 3% of the state. (0% change remaining flat)

5 million Ohioans voted.

If 84% of the voters were White and matched the Ohio demographics – Romney based on exit polling would have had +500,000 more people and would have won the state.

But only 79% were White= 4M people

41% of Whites voted for Obama = 1.6M
57% of Whites voted for Romney = 2.3M

15% were Black = 750,000 people

96% of Blacks voted for Obama = 720,000
4% of Blacks voted for Romney = 30,000

3% were Latino = 150,000 people

54% of Latinos voted for Obama = 81,000
42% of Latinos voted for Romney = 63,000

Voting Totals in the end (approximates)

Obama = 2,401,000 votes

Romney = 2,393,000 votes

1 Man 1 Mind

The Hidden Healthcare Election

It’s Healthcare, Stupid!
James Carville famously coined the phrase “The Economy, Stupid!” while he was a campaign strategist for the 1992 Clinton Presidential campaign. Fast-forward to 2012 and for good reason both campaigns seemed to take heed to Carville’s advice. For good reason, the unemployment rate hovers around 8%. On top of that 40% of the unemployed have been jobless for more than 6 months. The labor force participation is barely 64%. Lastly, more than 8 million people last month worked part-time specifically due to economic reasons.

However, underlying healthcare issues in this election never really surfaced. Many of these issues revealed themselves in the exit polling of the most contentious battle ground states.

Obamacare & Florida
16% of the U.S. population lacks health coverage. Obamacare would give subsidies to people that otherwise could not afford insurance. Even though Mitt Romney has proven experience with health care by being the first Governor to ever pass universal healthcare legislation in a state, he ran to repeal President Obama’s healthcare bill even though it closely mimicked the Massachusetts bill Romney himself signed into law just 3 years earlier.

Florida has the highest uninsured rate and uninsured population of any battleground state standing at 20% and 4 million people. Over 90% of the uninsured population falls below the 500% federal poverty level ($55,000 for an individual). In Florida roughly 50% of the electorate earns below $55,000 a year. Exit polling showed Obama carried 60% of that population with Romney winning only 40%.

Auto Bailout & Ohio
November 18, 2012 will mark the 4 year anniversary of Mitt Romney’s infamous New York Times Op-Ed entitled Let Detroit Go Bankrupt. Romney called for a managed bankruptcy for General Motors, Ford, and Chrysler standing in strong opposition to a pure bailout. He also called for the heads of the companies to step down and acknowledged that autoworker benefits, including health care, would be reduced ease the $2,000 burden of added costs Detroit cars had that made their cars foreign counterparts did not. During the last leg of the Presidential election, Mitt Romney became unpopular in parts of Ohio for this stance. In fact, President Obama ran on the auto bailout with his Vice President claiming, “Osama Bin Laden is dead and General Motors is Alive!”

The Obama administration ended up moving forward with a plan that very much resembled the Romney Op-Ed. The Obama plan called for the heads of the car companies to step down, sought to have GM and Chrysler pursue Chapter 11 bankruptcy filings, and acknowledged that auto unions would face “belt-tightening in wages, healthcare, and retirement benefits”. In the end, based on Ohio exit polling, 56% of Ohio voters approved of Obama’s auto bailout and Romney was never able to properly articulate how close his auto plan was to the President’s.

Minority Unemployment Rates & Ohio/Nevada/Colorado/Virginia
Many people receives their health insurance from an employer-sponsored program. That means a job is more than just a paycheck, it’s a means to get health coverage as well. The unemployment rate for African-Americans is 14%; six percentage points higher than the national average. Obama won 89% of the African-American vote in Nevada, 93% of the African-American vote in Virginia, and 96% of the African-American vote in Ohio. The unemployment rate for Hispanics is 10%; two percentage points higher than the national average. In the battleground state of Colorado, Obama won 74% of the Hispanic vote. In Nevada Obama won 69% of the Hispanic vote. In the end, President Obama convinced minorities he could grow jobs that offer comprehensive benefits like healthcare better than Mitt Romney.

Abortion & Ohio
Abortion is more than a religious issue. It’s a healthcare issue as well. Mitt Romney went on record vowing to defund Planned Parenthood during a campaign stop in Ohio. This was after Republican candidate, Todd Akin, interjected the phrase “Legitimate Rape” into the American lexicon justifying it as information he garnered from physicians. Overlay these two instances with Ohio exit polling and we witness that 56% of voters believe Abortion should either always or mostly be legal. As a result, Obama won 80% and 63% of those votes leaving Romney on the losing end of an important Ohio issue.

Originally posted at NYU’s Health Policy Blog

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