Use of subsidies to low-income people for coverage through small employers

If tax credits or other public subsidies are made available only for health insurance that is not employment-based, serious erosion of employer coverage could result. To prevent this, public subsidies targeted to low-income workers and families could be applied in ways that broaden employer coverage for low-income workers and their families by encouraging small employers with largely low-wage workforces to offer and partially fund health coverage for their workers. To accomplish this, such employers--very few of which now provide health coverage--must be allowed to contribute much less than normally required in the commercial market.

Health and the cost of nongroup insurance

This analysis estimates a selection-adjusted model of the premium for nongroup insurance to measure the effect of health status on the cost of nongroup insurance. Using data from two recent national surveys, the probability of buying nongroup insurance is about 50% lower for people in fair or poor health compared to similar people in excellent health. Correcting for selection, premiums are about 15% higher for people with modest health problems, and 43% to 50% higher for people with major health problems compared to those in excellent health. We use the selection-corrected premiums to simulate the effects on the price and affordability of nongroup insurance for the uninsured under two recent tax credit proposals.

Uncharitable and out of control?

This article explores the current state of the law governing partnerships and other collaborations between tax-exempt health care organizations and private health care providers. The author sets out the regulatory maze through which exempt entities and private parties must navigate in attempting to maintain Internal Revenue Code (IRC) Section 501(c)(3) status for the exempt entity in these relationships. The article discusses and comments on general principles through an examination of case law, statutes, regulations, revenue rulings, revenue procedures, and information letters, as well as state law issues, with an emphasis on maintaining charitable purposes, effecting control, and dealing with ownership and compensation issues.

Champaign County, Illinois, gets hospital industry's attention by revoking property tax exemption of local catholic hospital [interviewed by Stan Jenkins]

A property tax exemption is not necessarily permanent: Certain responsibilities are conferred along with tax-exempt status. If those responsibilities are not met, the tax exemption may be revoked. An interview with Stan Jenkins, Chairman of the Champaign County Board of Review, explains the rationale behind revocation of the property tax exempt status of a local charitable hospital, which may have far-reaching implications for others in the healthcare industry.

Not-for-Profit community hospitals' exempt status at issue in charity care controversy

Revocations of local property tax exemptions, class action lawsuits, and state and Congressional investigations all beset the not-for-profit sector of the hospital industry. These problems originated from issues relating to the pricing of services to the uninsured, the relative availability of "charity care" or lack thereof and the collection tactics that some hospital-contracted collectors use. Is this controversy really just symptomatic of the extent to which health care charging and payment systems are out of whack? Are ambiguous government regulations to blame? Is large-scale payment reform the real answer?

The impact of the tax system on health insurance coverage

A central question in health economics is the extent to which this tax subsidization matters for the health insurance coverage of the U.S. population. I assess the impact of taxes on health insurance by using the considerable existing variation in tax subsidies, both at a point in time and across time. I do so by putting together data from more than a decade of Current Population Survey (CPS) data sets, and matching to workers in those data sets their tax subsidies to health insurance coverage. I find that the elasticity of insurance eligibility of workers is at least -0.6, and that the elasticity of own insurance coverage is roughly similar; the results imply that most of the impact of taxes on insurance coverage arise through firm offering and eligibility decisions. I also find that higher tax rates induce more private coverage through other sources, but less public coverage, so that overall there is a reduction in the rate of uninsurance that is comparable to the change in own employer-provided insurance coverage.

Straight talk. New approaches in healthcare. Capital financing: beyond the shores of your typical transaction

If you're in the market to renovate or expand but are concerned about overloading your balance sheet with debt or if you plan to build a for-profit facility, consider a Design, Build, Finance, and Operate (DBFO) arrangement. In such deals, experts in finance, construction, real estate, and support-service provision manage risk and day-to-day responsibility for facility management. Evaluating alternatives to tax-exempt financing is a critical piece of capital planning today because competition for traditional sources of funding has become global.

The hospital bond market and the AHERF bankruptcy

An analysis of hospital, tax-exempt bonds issued before and after the Allegheny Health, Education, and Research Foundation (AHERF) bankruptcy demonstrated that despite the decline in market rates for tax-exempt securities in the post period, bonds issued by hospitals and systems carried higher coupon rates than they did in the pre period. There was a significant decline in the proportion of hospital/system bonds that were insured from the pre to the post period. Bond insurance firms tightened their credit criteria after the bankruptcy, which may explain, in part, why the proportion of insured bonds declined. We conclude that hospital bonds are now viewed as riskier instruments than they were prior to the AHERF bankruptcy. This is reflected in higher coupon rates for both insured and uninsured bonds and fewer insured bond issues. This decline in hospital creditworthiness comes at a time when many hospitals need to replace aging assets and acquire new technologies in response to increased inpatient utilization.

Small business executives and health insurance: findings from a national survey of very small firms

Previous researchers have documented that very small businesses (3-24 workers) are less likely to offer employees health insurance than larger corporations. This study supplements previous findings on the prevalence of health insurance among small firms. The authors also attempt to illuminate reasons behind coverage decisions by interviewing small business owners and executives, who most often make health benefits decisions on behalf of their employees. The study examines attitudes about health insurance, opinions, and practices in these very small firms, and the response of small business owners to policy alternatives designed to expand coverage in small businesses.

The changing world of ancillary benefits

Amid salary and health care benefit cuts, ancillary benefits such as dental, life insurance, long-term disability and vision coverage can communicate employers' concern for their employees as well as serve as recruitment and retention tools. These benefits can be funded by the employer, the employee or both.

Using a 401(h) account to fund retiree health benefits from your pension plan

If a health and welfare plan covering retirees faces financial shortfalls, administrators and trustees can fund retiree health benefit payments from a related pension plan that may be in better condition. This method is legal and ethical, but it requires sophisticated accounting techniques for creating an account that provides retiree members with promised benefits while meeting statutory and regulatory requirements.

Converting unused vacation days to retiree medical benefits: a proposed partial solution to an emerging national crisis

Costs for retiree medical benefits are spiraling upward. One way to help fund this area of compensation, with little or no additional financial burden to either employers or employees, could be using an employee benefit plan whereby each year's unused vacation days and sick days are transferred into an employee's tax-free account in a voluntary employee benefit association (VEBA) trust. On retirement, the account is used to purchase a (pre-Medicare) retiree medical plan, prescription drug benefit, a Medicare supplemental policy and/or simply make Medicare premium payments.

Legal and regulatory issues in hospital laboratory outreach and partnering arrangements

An independent laboratory's joint venture with a chain of five nonprofit hospitals unraveled in 1999. Despite substantial management control over the joint venture and 3 years spent investing in and managing a massive consolidation project, the laboratory operator was ousted by the hospital group in favor of a national laboratory competitor. In the process, it lost the $6 million commercial laboratory business it brought to the joint venture. The laboratory operator sued the hospital group for destroying its business. Were the hospital's actions legal? Could the laboratory operator have protected itself better? Although by no means the only causes of this disaster, regulatory restrictions and uncertain contract terms contributed to the problems experienced by the laboratory operator.

Nonprofit health systems: a promising new class of corporate citizen

Leading nonprofit health systems are demonstrating that communities can benefit from the emergence of this new class of corporate citizens. Just as the business sector has produced many good corporate citizens to the great advantage of American society, health systems with sufficient financial and organizational gravitas increasingly are assuming these roles, and in so doing, are making positive differences in their communities. More system leaders, however, must find compelling reasons to assume these demanding roles. They also must learn how to play citizenship roles more fully and effectively if the potential social good available through health systems' corporate citizenship is to be realized.