Health law provision seeks to rein in executive compensation at insurance companies

Aug 28 2014

News outlets report that this little-noticed provision puts in place stricter limits regarding the amount companies can deduct from their federal tax bills. Also in the news, The Associated Press reports on ways health plans discourage sick people from enrolling and The New York Times examines the health law's efforts to expand mental health coverage.

The Washington Post's Wonkblog: The Obscure Part Of Obamacare That Takes On Executive Pay
We all know Obamacare is a pretty big law, with plenty of obscure provisions that don't get much attention. For one, the law targets big executive pay packages at health insurance companies -- and based on data released Wednesday, the provision is already going a long way. Companies have long been able to deduct salaries to top executives from their federal tax bills, although since the early 1990s -- in an effort to reduce excessive pay -- the government has limited the amount to $1 million (Millman, 8/27).

Marketplace: Affordable Care Act Provision Targets Some Exec Pay
A little-known provision in the Affordable Care Act (ACA) could help rein in executive compensation at health insurance companies, according to The Institute for Policy Studies. Corporations can deduct the costs of doing business from their tax bills, including the compensation of a firm's top four executives. The deductions are capped at $1 million for each of those executives. The Affordable Care Act made the limits stricter for health insurance companies, which stood to gain business as more Americans became insured under the law (Baxter, 8/27).

Related KHN coverage: Report: Health Law Ups Taxes On Insurers With Big Pay Packages (Appleby, 8/27)

The Associated Press: 3 Ways Insurers Can Discourage Sick From Enrolling
Insurers can no longer reject customers with expensive medical conditions thanks to the health care overhaul. But consumer advocates warn that companies are still using wiggle room to discourage the sickest -; and costliest -; patients from enrolling. Some insurers are excluding well-known cancer centers from the list of providers they cover under a plan; requiring patients to make large, initial payments for HIV medications; or delaying participation in public insurance exchanges created by the overhaul (8/27).

The New York Times: Expansion Of Mental Health Care Hits Obstacles
The Affordable Care Act has paved the way for a vast expansion of mental health coverage in America, providing access for millions of people who were previously uninsured or whose policies did not include such coverage before. Under the law, mental health treatment is an "essential" benefit that must be covered by Medicaid and every private plan sold through the new online insurance marketplaces (Goodnough, 8/28).

Meanwhile, Arkansas' governor touts lower insurance premiums --

The Washington Post: Health-Care Premiums Fall In Arkansas
Arkansas Gov. Mike Beebe's office said Wednesday that most health-care customers will pay less for their plans next year, a relief to state residents -; and to the Democratic senator trying to hold onto his seat in one of the country's most expensive elections. Health-care premiums will decline about 2 percent next year, Beebe (D) wrote in a statement Wednesday. Beebe helped lead an at-times reluctant Republican legislature to expand Medicaid. In his statement, he said insurance costs nationwide "historically rise by six-to-ten percent annually." The state used federal funds to launch a private Medicaid option that has been described as a potential model for conservative-leaning states (Ferris, 8/27).

And, on the political front --

The Washington Post: Why That One Democratic Obamacare Ad Didn't Signal A New Trend
When Sen. Mark Pryor of Arkansas went up with a television ad last week alluding to some benefits of Obamacare, partisans on both the left and the right saw the spot as a sign that vulnerable Democrats might finally be embracing the polarizing health-care overhaul in their campaigns. But in the days since, it's become clear: there's little evidence that the hotly debated law is on its way to becoming a central Democratic talking point heading into the fall campaign (Gold, 8/27).