Five Must-Fix Items in the Affordable Care Act

Affordable Care Act perplexedWhen then-Speaker of the House Nancy Pelosi uttered the comment “We need to pass this bill, so we know what’s in it,” few Americans clearly understood the scope and complexity of what we know as the Affordable Care Act (“ACA”).  During the last two years, we’ve come to learn that lurking within its pages are many taxes and expenses about which most Americans still know very little.

Since March 2010, Congress and the Executive Branch enacted more than 20 changes to the Affordable Care Act.  This series of posts will focus on five items that must still be fixed for the benefit of American citizens and businesses.

Fix #1 – The $2,500 cap on contributions to Medical Flexible Savings Accounts

This is the second of two changes that impact the flexible spending accounts enjoyed by American families since the 1980s.  The first went into effect in 2012 when over the counter medications became ineligible for reimbursement from a Flexible Spending Account. In both cases, the Affordable Care Act takes income that was not subject to tax and makes it taxable.

Beginning in 2013, the Affordable Care Act limits contributions to Medical Flexible Spending Accounts to no more than $2500 per employee.  Currently, Medical Flexible Spending Accounts are not subject to a maximum limit, although many employers have adopted an upper limit, often $5,000.  This has been a blessing to families of children facing the expenses of braces, among many others.   The 2013 limit creates three problems. 

First, the change results in a tax increase for American families who would have contributed more than $2,500.  The amount over $2,500 is now subject to income and employment taxes for the plan participant and the sponsoring employer.  Medical expenses over that limit will be paid with after-tax, instead of pre-tax, dollars.  Many middle-income families will pay about $550 in taxes as a result.

Second, the Affordable Care Act creates an inequity between single people, families with a single income, and dual income families.  In 2013, a family with two wage-earners may set aside up to $5,000 ($2,500 for each employee).  However, a single person or a single-income family may only defer $2,500 into a Healthcare FSA.  This disadvantage to single people and single-income families did not exist prior to the Affordable Care Act.

The following orthodontia example illustrates the concern for individuals and families. 

Orthodontia Procedure

Current FSA Rules

Individual FSA under ACA

Single wage earner family under ACA

Dual wage earner family under ACA






Dental Insurance Payment





FSA Amount





Balance Due Provider Using After-tax Dollars

$ 0



$ 0

Balance   Remaining in FSA for other expenses


$ 0

$ 0



Under the current rules for FSA’s, a family or single person would have $1,000 remaining to pay for new glasses, contacts, prescription co-payments or other eligible medical expenses.  However, under the new Affordable Care Act rule, only a two income family has remaining funds.  The single person and the single wage-earner family lose out under a federal tax benefit intended to offset the costs of medical care.

Third, the new rule is cumbersome.  In 2012, a family could use single FSA, regardless of the amount.  In 2013, to set aside the two wage-earner family maximum, they must use two plans, two administrators, and potentially two sets of claim requirements.  At year-end when submitting claims for remaining FSA funds, the family may face a mess in submitting claims for partial reimbursement.  If both plans require original receipts, a further mess arises.  In addition, employers have little protection against an increased risk double-dipping as people by submit an expense to both plans.

This change increases federal tax revenue.  It also reduces the value of a benefit people like and use.  Congress needs to fix this Affordable Care Act mess before employees make FSA salary deferral decisions for 2013.

Next in the series:  The Small Business Deductible

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Seven Reasons Your Business Is Overpaying for Health Insurance

Are you getting the most for your dollar with your company’s healthhealth insurance concerns insurance plan?  When we ask that question, quite often the answer starts as “Yes” and pretty quickly turns  to “I don’t really know.” 

The simple fact is that most business leaders only know the toll rising health insurance costs are taking on the company, and it worries them. In fact, a recent survey published in CEO Magazine reports 7 out of 10 Chief Financial Officers consider rising health insurance costs as their #1 concern. 

Here are seven reasons many businesses spend more of their hard-earned money on health insurance than they need.

1. Your broker focused you on premiums instead of claim costs.

 It’s not premiums that are killing your budget. It’s claim costs.  However, most businesses only see the impact when the shock and awe premium increase arrives. You need resources and partners that focus on your real costs of care and their drivers. With them, you too can enjoy the feeling experienced by a client CEO who recently shared with employees their health premiums were not increasing, at all, this year.

 2. Your insurance policy makes you pay too much for doctor office visits.

According to the American Medical Association, about 70% of physician office visits are not necessary. For an employee earning $22 per hour, a single office visit can cost as much as $254 out-of-pocket, including lost wages. You can do better.  Steve, a client’s employee, recently consulted a physician and had a prescription called in to his pharmacy. He didn’t have to leave the office, except to pick up his medication, and his total cost was only $4.00!  What do you pay?

3. Employees don’t know what medical care costs (but they do know for a gallon of milk or gas).

Many people don’t know what an office visit, a trip to the emergency room, or a simple surgery costs.  More importantly, they don’t know they can ask.  John, a local physician, asked his newborn son’s pediatrician  what circumcision cost.  The answer amazed him.  If done at the hospital it would have cost $1,485.  To have the same doctor perform it in his office would cost $288.  By asking, John and his family saved almost $1,200.

 4. You’re missing the benefits of medical reimbursement plans.

A good medical reimbursement plan helps employees pay for necessary care while controlling medical costa and tax liabilities. Unfortunately, too few businesses take full advantage of the benefits.  For example, a $2,000 employer-funded HSA costs $2,000, and the money leaves if the employee does.  The same $2,000 in a well-designed HRA costs an average of $900, unused funds can roll over, and you decide when it is portable.

5. Your provider network is too limited.

Most health insurance provider networks miss the opportunities offered by global centers of excellence, including outstanding results, affordable costs, and the latest in medical advances, along with treatments not yet available in the US.

6. Your health insurance company, rather than your business, wins when claims costs are good.

All health insurance is built on a foundation of expected claims.  If claim expenses are more than expected, your insurance protects you from catastrophic costs.  However, if claim expenses are less than expected, the insurance company keeps your money, rather than returning to you.  It doesn’t have to be that way.

 7.  Your agent hasn’t told you there are better options.

Like many business leaders, you may have been told there are only a few insurance company or your company is  too small to use one of today’s newer health insurance options.  Maybe worse, your agent doesn’t even know or understand these new programs.  The truth is, if you have 30 or more employees, you have new and better options today.


At Soter Healthcare, we believe in working with you to design insurance plans that maximize benefits, so that you can attract and retain top talent and be effective stewards of your financial resources.  We challenge conventional wisdom and innovate to bring you ways to minimize claim costs without sacrificing access to medical care.

If you’re ready to make better use of your business’ hard earned financial resources, we’re ready to help. 


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Are Americans Afraid of Traveling for Medical Care?

A medical tourism facilitator recently asked, “Are Americans afraid of medical tourism?”  Unfortunately, the term “medical tourism” is a vexing part of the problem, as are companies who promote luxury travel over the quality of medical care.  Soter Healthcare believes the quality of care and its outcome is much more important.

According to Wikipedia, “medical tourism” was coined by travel agents and the media to describe the practice of crossing international borders to seek medical care.  Frankly, the term is part of the problem for many, and it’s complicated by the fact that many involved in the industry focus more on the place and leisure opportunities than the quality of medical care.

medical tourismPersonally, it sounds too much like going on vacation to have a medical procedure.  If there are scalpels involved, this is not a vacation, and I will have more on my mind than not getting sand in my incision as it heals.  I want to start my recovery in a medical center of excellence and complete it at home, just as I would without travel.  It’s hard to take a medical tourism provider seriously when the focus is on beaches, luxury resorts or cultural sites.

Using the “medical tourism” logic, a business person traveling for a meeting becomes a corporate tourist, and agencies involved in international aid are relief tourists.  If one is a patient at home, why is that same person not still a patient while traveling for medical care?

According to a Deloitte & Touche report, an estimated 90% of Americans are willing to travel outside their communities for higher quality medical care.  These are people with important medical needs, not just vacationers going to a doctor.

At Soter Healthcare, one of our founders has more than 20 years in destination medical care, much of it in support of America’s Olympic athletes.  Ours is the serious business of medical care, using the resources of affordable, accessible, world-class medical providers to meet the needs of American patients.  We’ve opened a world of medical opportunities, including access to the latest in medical technology and technique.  It’s not tourism.  It’s your health.

To learn more about the world of medical opportunities available for you and your family, contact us today.

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Clearing up the International Accreditation Noise

There is a lot of noise about accreditation in media and marketing surrounding international medical travel.  With few clear voices, sorting the message from the madness is challenging.

Accreditation, whether regulatory or voluntary, is simply a floor abointernational accreditation noiseve which a hospital must work.  That there are no “good, better, best” connotations implied or expressed in existing standards. There is a significant trap awaiting patients who believe, either having come to it on their own or through promotion by medical tourism facilitators, accreditation by one international body or another equals a standard of excellence.

The prevailing view is that international accreditation provides a comfort for international patients. Harvard Medical International cites the focus of this development on its website:

“Internationally, the growth of the health care industry has resulted in increased competition, leading hospitals to attempt to differentiate themselves through accreditation and certification by internationally recognized health care evaluators.”

One argument is to replace the many standards with one.  We believe, however, it is generally unimportant whether there’s a consistent international standard for traveling patients.  There is much more to the formula.

Soter Healthcare maintains a proprietary method of evaluating hospitals and medical providers with criteria found in some accreditation systems, but not in others. We integrate elements that create significant points of distinction in the care of international patients, which almost no accreditation bodies do well. We also include factors that do allow us to make comparisons between hospitals. It’s not just important; it’s imperative.

Many hospitals that market to international patients can’t meet Soter Healthcare’s credentialing standards and requirements. That may not mean they aren’t good hospitals.  In fact, some are very good.  But that’s not enough either.  Those of us who are willing to travel for outstanding care won’t settle for good enough.  For me, it really is this simple:  if the care, the hospitals, the physicians and others aren’t excellent, I won’t go…and I own the company.

If you’re interested in accessing outstanding care, excellent medical outcomes, the latest in treatment technique and technology, call or email us at Soter Healthcare.


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International Medical Accreditation Unwound

We often see the comment “We only use JCI accredited hospitals” on the websites of and marketing brochures of medical tourism facilitators. I always enjoy reading that statement, knowing that the company either doesn’t understand accreditation or doesn’t really believe the comment.

Accreditation, put simply, is a means by which the medical community evaluates administration, operations, quality and patient safety.  In some cases, local or national regulatory authorities conduct accreditation inspections .  In other cases, an independent third-party agency whose report the regulatory agent accepts conducts the review.  For example, in America, state health departments regulate hospitals, and the health department can either conduct its own inspections or accept those of an agency like the Joint Commission, the Commission on Accreditation of Rehabilitation Facilities (CARF), or the America Osteopathic Association, among others.  In other countries, the national health ministry generally manages the accreditation process.

In destination medical care (or medical tourism), accrediting organizations expanded internationally.  International accrediting organizations involved in destination medical care fall into in three groups: (a) national/domestic agencies, (b) international accreditors, and (c) medical tourism firms that purport to offer “credentialing.”

The best known of the international entities is the International Society for Quality in Healthcare (ISQaccreditationua). Headquartered in Dublin, Ireland, ISQua does not directly accredit hospitals; rather, ISQua accredits the accreditors. It has 70 members internationally and works through them to improve the quality and safety of the patient medical experience.

JCI is the accrediting agency most familiar to US citizens. It has accredited hospitals in 28 countries and can serve as a good basis for considering medical travel to destinations where medical concerns may exist. JCI has been credentialing international facilities since 1999 and became a member of ISQua in 2008.

QHA Trent Accreditation, based in the United Kingdom, is one of a limited few recognized as a leading standard. QHA Trent accredits hospitals globally and is stong in the UK, the Middle East and parts of Asia.  QHA Trent is an ISQua member.

Accreditation Canada International is a relatively new entrant to direct international accreditation; however, its accrediting process is widely recognized as a model.  Since 1995, ISQua has used Accreditation Canada’s framework as the basis for its reviews.  Accreditation Canada International is strong in parts of Asia, South America, Central American and the Mediterranean Sea areas.

Where a national medical system & accreditation systems are strong, such as in countries like Australia, Canada, China, France, New Zealand, the United Kingdom and the United States, international accreditation is rarely considered.  By example,  at last look, here are no JCI accredited hospitals in Australia, Canada, France, Japan, Norway, or the United Kingdom, nor are there any Trent accredited hospitals in the United States, Canada or Australia.

None of that means accreditation is not important.  It is.  It is a beginning stage of reviewing hospital quality for international patients.  However, accreditation is not the end point or the distinction between the difference maker that many people try to make it.

For more information about why accreditation is not the only standard that matters, contact us at Soter Healthcare.


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