If Health Law Falls, Coverage For Young Adults Gets Tricky

Enlarge Courtesy of June Blender

Jackson Cahn, who graduated from Whitman College in Walla Walla, Wash., is one of the 3 million young adults the Obama administration says would have risked going without insurance if the health care law hadn't allowed them to stay on their parents' policies. Because of the law, his mother, June Blender, was able to add him to her insurance.

Courtesy of June Blender

Jackson Cahn, who graduated from Whitman College in Walla Walla, Wash., is one of the 3 million young adults the Obama administration says would have risked going without insurance if the health care law hadn't allowed them to stay on their parents' policies. Because of the law, his mother, June Blender, was able to add him to her insurance.

When it comes to health care, even the seemingly easy things become hard.

Take coverage for young adults under the Affordable Care Act.

It's one of the most successful � and popular � provisions of the law that have taken effect so far. Earlier this week the Obama administration announced that between September 2010 and the end of 2011, more than 3 million young adults under age 26 who would otherwise have gone without insurance gained coverage by remaining on their parents' health plans.

Last week, major health insurance companies, including United Healthcare, Aetna and Humana, announced they would continue to offer the benefit even if the Supreme Court strikes down the law when it issues its ruling, which is expected next week. Even some Republicans say they support the idea of letting young people remain on their parents' health plans.

But it turns out that might not be so easy.

 

"This could have adverse tax consequences, both to the employee whose child is on the plan and to the employer, for purposes of payroll taxes," said James Klein, president of the American Benefits Council, which represents large-employer health plans and companies that provide services to those plans.

How's that? Well, says Klein, the problem is that lots of those young adults are no longer dependents of their parents for tax purposes. So if the employer continues to provide coverage to that adult child, the value of that insurance could be considered taxable income to the parent. Under the health law, such coverage is not treated as taxable income.

As an example, he says, "if the value of adding a child onto your policy is $500 a month, that's $6,000 a year. So that's $6,000 of extra income on which you would be taxed, plus the payroll taxes that you the employee and the employer would be paying on behalf of that $6,000."

And while that could be a lot of money for some people, he says, the money is only part of the problem.

"It's the utter confusion that this would cause for employers. Because after all, there would be some 24-year-old kids who are legal dependents, for whom there would be no income tax owed," Klein said. "And then there would be others for whom they're not legal dependents and so there would be tax that would be owed. It would be extraordinarily confusing."

Then there's the question of whether workers and employers might owe back taxes for coverage that's been provided already. Klein says the Obama administration could theoretically take care of the problem by having the IRS issue some sort of clarification. But he worries that like everything else to do with the health law, even that could get caught up in partisan politics.

"I'm just afraid that rather than a quick resolution that provides clarity, both sides could arguably use this for their political benefit," he said.

Docs who used EHRs showed lower malpractice claims

BOSTON – A study by Harvard Medical School researchers, published Monday in the Archives of Internal Medicine, showed that Massachusetts physicians who used electronic health records saw a reduction in malpractice claims.

Correlation does not imply causation, of course. But the report's authors say their findings suggest that "implementation of EHRs may reduce malpractice claims and, at the least, appears not to increase claims as providers adapt to using EHRs."

The study, titled "The Relationship Between Electronic Health Records and Malpractice Claims," was written by Mariah A. Quinn, MD; Allyson M. Kats; Ken Kleinman; David W. Bates, MD; Steven R. Simon, MD.

"Given the potential of EHRs to reduce adverse events and health care costs, the question of whether EHRs reduce the risk of malpractice lawsuits is a logical one," they write.

"Risk factors for medical error and resultant malpractice claims, including poor communication between providers, difficulty in accessing patient information in a timely manner, unsafe prescribing practices, and lower adherence to clinical guidelines, may be ameliorable by health information technology," the report notes. "The high quality and availability of proper documentation in EHRs may increase the likelihood of successful defense against malpractice claims."

For this study, the researchers assessed groups of Massachusetts physicians who had previously been surveyed in 2005 and 2007 – tracking their malpractice claims over time.

"Because physicians in the sample were insured for different durations and used EHRs for variable amounts of time, the number of insured years was calculated for each physician before and after EHR adoption," they write. "We used Poisson regression to determine whether EHR use was associated with malpractice claims, modeling the rate of malpractice claims per year in periods with and without EHRs and adjusting for clustering by physician. We used the generalized linear mixed models version of Poisson regression to account for correlation between periods."

Of the 189 doctors surveyed in both 2005 and 2007, they note, 27 were named in at least one malpractice claim. Overall, 33 of the 275 physicians from multiple surgical and medical specialties who responded in 2005 and/or 2007 incurred a total of 51 unique claims. Forty-nine of those claims were related to events occurring before EHR adoption. Two were related to events occurring after EHR adoption.

"We found that the rate of malpractice claims when EHRs were used was about one-sixth the rate when EHRs were not used," the researchers write. "This study adds to the literature suggesting that EHRs have the potential to improve patient safety and supports the conclusions of our prior work,which showed a lower risk of paid claims among physicians using EHRs. By examining all closed claims, rather than only those for which a payment was made, our findings suggest that a reduction in errors is likely responsible for at least a component of this association, since the absolute rate of claims was lower post-EHR adoption."

[See also: Study sheds light on docs' perspectives on curbing diagnostic errors.]

The report does concede that other factors may be at work. "For example, physicians who were early adopters of EHRs may exhibit practice patterns that make them less likely to have malpractice claims, independent of EHR adoption; these early adopters contribute a disproportionate amount of time in our analyses, favoring an effect of EHRs on reducing malpractice claims."

Still, they argued, despite the small sample size, the reduction in malpractice claims shown in the EHR study "lends support to the push for widespread implementation of health information technology."

Access the report here.