Friday, August 28, 2015

A Shameless Plug


Vase

We are only a few months away for the next Open Enrollment, the annual opportunity to rethink your individual health insurance policy. Many of you earn too much or too little to qualify for a Tax Credit Subsidy. If you don’t qualify for a subsidy, due to income or for any other reason, you don’t need to go anywhere near healthcare.gov or the national frustration number. And, this post isn’t for you.

Today’s post is specifically for those of you who will qualify for a subsidy.

The government is still telling Americans how easy it is to purchase insurance on the exchange, so simple that anyone can wander on to the site and buy the perfect policy. Experience is, of course, very different.

I have spent hours upon hours on the government’s website. And yes, it is better now than it was last year. It still crashed this week while I was trying to help a client adjust his subsidy, but the site was only down for a couple of hours, not days. I have experienced the glitches, crashes, and unanticipated problems. I’ve had the 2 and 3 hour phone conversations with the call center. And I have had to seek help from Senator Sherrod Brown’s office and other government employees to help my clients get the access to insurance that they were promised. I am not alone. Many of my peers have encountered the same issues and more.

But our clients don’t experience the avoidable problems.

Major preventable issues:
  • Choosing the wrong metal tier
  • Choosing a policy that doesn’t include your doctor or hospital
  • Choosing a policy that requires referrals to see a specialist
Most people understand how the Tax Credit Subsidy helps individuals and families pay for insurance. The target is an income of approximately 133% to 400% of the federal poverty level. But there is a second subsidy, the Cost-Sharing Assistance Benefit. If you are subsidy eligible and have an income of 250% of the federal poverty level or less (around $29,000) for a single), you are also eligible for a reduction in your deductibles, copayments, and maximum out of pocket. To get this additional benefit, this potential savings of thousands of dollars, you must purchase a silver level policy.

It is estimated that as many as 2 million individuals, 25% of those eligible, are failing to get these benefits. Link to Kaiser Health News, an invaluable resource.

I’ve talked with many people who were shocked to learn that the policy that they picked out on the exchange didn’t cover them at the Cleveland Clinic. Worse, some have called to complain that the new, cheap policy they chose doesn’t include the Cleveland Clinic or University Hospital in their network. Understanding the networks and choosing a policy that you can use are the first steps towards customer satisfaction. Bad fit is not an insurable event. Pick the wrong policy and you may be stuck for the whole year.

This blog has long been critical of PPO policies that require individuals to get a referral from their primary care doctors to visit a specialist. The process is cumbersome and inefficient. The primary care doctor may or may not be compensated for the additional paperwork. The policy descriptions on the exchange do not clearly note this requirement on some of the policies. Only someone familiar with the insurance products can help you avoid this pitfall.

Agents around the country will take their annual exchange training next month. We will spend hours learning this year’s policies and how to make the government’s website work. You don’t need to call me. There are lots of qualified agents, marketplace certified, throughout the country. A good starting point is the National Association of Health Underwriters. There is also a local chapter in Northeast Ohio.

Or you can go your own way.

DAVE

Vase from Zeber-Martell Gallery and Clay Studio

 

Saturday, August 22, 2015

The Fifteen Page Term Paper


Walker plan

Some teachers counted pages. Some counted words. If you were assigned five pages, you had to produce at least five pages. A little extra couldn’t hurt. When my teachers asked for 500 words, I tried to deliver between 550 and 600. That’s not to say that we didn’t all use certain well-worn tricks and gimmicks. These papers never contained a single contraction. And we all knew how to stretch out a sentence and how to end a paragraph.

Who knew these skills would be needed as an adult, and not just by any adult, but by a presidential candidate?

Governor Scott Walker (R-WI) unveiled his plan to repeal and replace The Patient Protection and Affordable Care Act (Obamacare) this week. I confess that I had no interest in reading this latest entry in the R & R game. After the disappointing and incredibly cynical bill put forth by Senators Richard Burr (R-NC) and Orrin Hatch (R-UT) – The Patient Choice, Affordability, Responsibility, and Empowerment Act – I decided to skip all light fiction reading for the balance of 2015.

Still, the Walker plan had a certain appeal. His campaign is sinking and the Republican base hates anything attached to the current president, especially Obamacare. And unlike the Congressional attempts, a sitting governor might actually create a thoughtful document, a plan that could be implemented in his/her state.

The Wall Street Journal reviewed the Walker plan before I had a chance to read it for myself. I was surprised that the Journal didn’t give it the usual “best thing since sliced bread” 5 star rating these plans tend to receive. No, it was panned. Now I had to read Scott Walker’s contribution to the healthcare debate.


The Walker plan is a fifteen page term paper circa 10th grade. The page and a half preamble is hidden behind FOUR cover pages. The meat, the depth and breadth of how we manage 20% of our economy, is contained on the 6 ½ pages that follow the one page outline. Then there is a conclusion page and another cover page. Yep, Scott made it. 15 pages. Solid C material.

There aren’t a lot of specifics in the Walker plan. But the details he managed to include are mostly a rehash of some of the previous Republican plans. In an effort to differentiate himself from Obamacare and reality, Walker ties tax credits for the purchase of individual (non-employer sponsored) health insurance policies to age with no mention of income or regional differences. This change alone would price many people out of the market while providing a small bonus for those of us who have enjoyed a bit of financial success.

Yes, the Walker plan gives everyone purchasing a private policy a tax credit. If you are between the ages of 50 – 64, that credit would be $3,000. Governor Walker stresses the lack of infrastructure needed to implement his tax credit. That is because you would pay for your insurance this year and get the credit NEXT year when you file your income tax. What would that look like in the real world?

Test Case – Male, age 60, non-smoker, Cuyahoga County. Medical Mutual of Ohio Silver $3,000 HSA Premium - $661.00 per month or $7,932 over a twelve month period

Walker Plan

   If your income was:                            You would receive this tax credit:
            $60,000                                                          $3,000 Next year
            $35,000                                                          $3,000 Next year
            $30,000                                                          $3,000 Next year
            $25,000                                                          $3,000 Next year


Obamacare
            $60,000                          $0.00
            $35,000                          $245 per month now to help pay premium
            $30,000                          $316 per month now to help pay premium
            $25,000                          $381 per month now to help pay premium


The sixty year old earning $25,000 while working in a store or small factory gets real help under Obamacare. His premium is reduced to under $300 per month and he qualifies for a lower deductible and out of pocket.

There is more (or less) to the Walker plan. There are the usual homages to crossing state lines, less regulations, and litigation reform. Medicaid reform and high-risk pools reappear under the Walker plan, too. And, of course, the most important cure for what ails us would be to incorporate more state by state control and regulation.

We could continue this, but we are in danger of breaking two important rules. The review should never be longer than the original piece. And, we really shouldn’t put in more time and effort than the author, candidate Walker, bothered to give.


DAVE

www.bcandb.com

Sunday, August 9, 2015

Did You Forget Something?


8962

What was it? What were you supposed to get done last week? Wash the car? School shopping with the kids? What about FILE YOUR TAXES?

4.5 million households received a Tax Credit Subsidy to help to pay for their 2014 health insurance. Close to 1.8 million of them, about 40%, have yet to file a complete income tax return. You must file a complete tax return, including form 8962, to qualify for next year’s subsidy.

No Tax Return – No Subsidy – No Insurance


The Tax Credit Subsidy is what allows many families to be able to afford health insurance. These subsidies are significant. The national average is $272 a month, over $3,000 a year. I’ve seen families qualify for twice that amount. It is hard to believe that anyone would jeopardize this lifeline intentionally.

The IRS has begun to contact these households. HealthCare.gov’s national frustration number, 1.800.318.2596, reports an uptick in tax related inquiries. And the administration is focused on the 60% who have complied. But no one really knows what is going to happen when the subsidy spigot is shut off for those who failed to file.

Consider this a gentle reminder. If you are a member of one of the 1.8 million households that received a subsidy but have yet to file a complete tax return, NOW is the time to get this done.

 

DAVE

www.bcandb.com

Monday, July 27, 2015

Trust


Trust

At some point you have to trust someone. Or not.

You have just received devastating news from your physician. You have a serious medical condition.

Scenario #1 – Your doctor suggests an aggressive course of treatment. Extensive and expensive. It might work. It might only give you a few extra months. But death is a certainty if you do nothing.

Scenario #2 – Your doctor advises you that all of the known treatments are painful, debilitating, and expensive. The likelihood of full-recovery is minimal, at best. He suggests palliative care and Hospice.

Do you view the doctor in the first scenario as a committed caregiver dedicated to doing everything to save your life or a shill for the medical industry prepared to profit from your illness and fear of dying? Do you view the doctor in the second scenario as a compassionate physician prepared to preserve the quality of your life or do you perceive a system that is prepared to sacrifice your well-being in an effort to save money?

Trust. Do you trust your doctor, your hospital, the insurance companies, or even the government? If you don’t, if you are positive that everyone involved is interested, first and foremost, in their own bottom line, than this discussion is over. There is nothing I can say that will change your mind or make an end-of-life discussion meaningful.

The balance of this blog is only meant for those with a healthy skepticism of our system and the players involved.

Medicine is an honorable profession populated by both the best and worst society has to offer. There are dedicated caregivers, committed claims staff, enlightened administrators, and elected officials prepared to do whatever it takes to make America safer and healthier. And there are people throughout the system who view the patient as either a profit opportunity or an unnecessary drain on our money.

There is no easy way to tell the difference, to know for sure that you are working with the right team. First you have to accept that there is a right team and that the system can work, that there are people up and down the chain who are willing to work on the patient’s behalf.

The Centers for Medicare and Medicaid Services (CMS) is again looking at physician reimbursements for advance care planning with their patients. Will doctors be paid for the time it takes to review all of the options open to their patients when they need this information the most, at the time of diagnosis and the beginning of treatment?

You may remember that this was a part of the Patient Protection and Affordable Care Act (PPACA). Those who choose to trust no one had their doubts. Some politicians called this “Death Panels”. This line of thinking works if you assume the worst of everyone involved.

But there is a counterbalancing argument. There have long been doctors and nurses who have questioned our end-of-life care. There are serious questions about whether average Americans endure more extensive treatments than similarly situated members of the medical profession. When is enough enough?

This blog, from its first post in 2009, has promoted adult conversations about healthcare and how we pay for it.

So it boils down to information. And trust. Mostly trust.

 

DAVE

www.bcandb.com

Monday, July 13, 2015

No, You Can't Do That


no you can't do that

Most of my clients are the owners of small businesses, really small. Lots of my guys have fewer than ten employees. When we talk about employee benefits we are discussing their money. Every premium increase is a direct hit on their bottom line. Some of my business owners are constantly trying to find new benefits they can provide to their employees and to their own families. In the small group environment, the boss has the same coverages, good or bad, as the rest of the employees.

Or not. For every business owner who plays by the rules and treats the employees fairly, there is at least one owner spending all of his/her time looking for corners to cut. Employee benefits may be the corner they love to cut the most.

There were very few rules in the group health insurance business up until recently.
  • Employees had to work full-time (25+ hours per week)
  • The employer could not discriminate.
  • The employer had to pay a substantial portion of the employee’s premium.
Ohio regulation stipulated substantial, but did not define it. Medical Mutual of Ohio interpreted that as 25%. The other major insurers defined this as 50%.

What you couldn’t do was pick and choose who got insurance or how much you, the employer, felt like paying per employee. Couldn’tt, but many did. And other employers reimbursed their employees for individually purchased policies or other health costs.

Those days are over.

The Patient Protection and Affordable Care Act (PPACA) clamps down on these practices. Enforcement is entrusted to the IRS who takes a dim view of these activities. Businesses with fewer than 50 employees are not required to offer group health policies, but if they do, they must be compliant. Employee reimbursement plans and other (not)groups are all lumped into the group category and deemed deficient. And the penalties are huge.

Such an arrangement fails to satisfy the market reforms and may be subject to a $100/day excise tax per applicable employee.

That’s a penalty of $36,500 per employee.

Is that excessive? Is that fair? Yes and Yes.

We always knew the right ways to do this. The employee should either have access to a real group policy or he/she should be responsible for purchasing an individual policy. Not every business can afford to provide group health insurance coverage. The employer may choose to give employees a raise with the hope, but not requirement, that the employee will use the extra money to purchase a policy. There can be no strings attached to the raise. The money is fully taxable to the employee and deductible to the business.

This is particularly important for those employees who might qualify for a Tax Credit Subsidy. Employees are generally not eligible for a subsidy if their employer offers a group health policy. Separating the real from the bogus may allow families to be properly insured. The small increase in annual income from a legitimate raise is unlikely to eliminate a subsidy.

If we agree that it is better to have all Americans insured, if universal access to health care is our goal, then we should welcome this new attention to the enforcement of the rules.

DAVE

www.bcandb.com

Sunday, June 28, 2015

Celebrations - Both Public And Private

Washington-20150224-00486

The Supreme Court had reached a decision. The excitement grew in intensity as news of the ruling spread across the capitol. Washington was awash in celebrations, both public and private. Private because this was news that some could only appreciate, secretly, among their closest friends and compatriots. The Supreme Court codified a reality some of us have recognized for years.

The Patient Protection and Affordable Care Act (PPACA) is here to stay.

Thursday, June 25, 2015 was a wonderful day for politicians. Big wins across the board. You, Joe and Jane Public, will be OK. We are always OK. Some of us have been helped by the legislation. Some of us have been hurt by it. But we will, at worst, survive. The biggest winners were our politicians.

This blog has long contended that the PPACA was a poorly written law. The Supreme Court has now made that official. In an effort to make health insurance affordable, the law included Tax Credit Subsidies which would be based on an individual’s income. The catch was that you had to apply through an Exchange, in essence a government run online marketplace. The PPACA seems to have limited the access to the Tax Credit Subsidies to those applying through an exchange “established by a State”. In other places within the law it appears that any government run exchange would do. Many of us viewed this, in 2010, as part of the law’s efforts to force the states to participate. States controlled by Republican governors and legislators took the challenge and refused to create exchanges. The federal government gave us Healthcare.gov and moved forward. Now we have millions of Americans across the country covered by subsidized insurance. That was the reality the Supreme Court faced.

SCOTUSblog

The number one place for clear-eyed Supreme Court analysis is SCOTUSblog. Here you will find brilliant articles arguing both sides of the issues facing the Court and the minutia that will find its way into totally unrelated cases 50 to 100 years from now. The posts following this decision are fiery and passionate. Don’t let the legalese fool you. These writers are playing for keeps.

Our politicians are the polar opposite. Democrats and Republicans aren’t searching for intellectual discussions. Both sides are too busy mining our emotions, mostly our deep pools of fear and resentment.

Our Democratic friends will tell us how hard they have had to work to protect us from ruin and the Republicans. We will be told that any flaws in the PPACA are due to Republican recalcitrance to progress and the new law. NOW, now that the Supreme Court has fended off the last real challenge, all of the promises of the PPACA will be realized. And when they aren’t? When premiums continue to increase and more and more businesses choose to drop their employer sponsored group policies, there will still be plenty of Republican resistance to blame.

Our biggest winners were the Republicans. This blog noted on November 3, 2010, the day after the Republicans won the House, that the GOP had no real interest in repealing the PPACA. We have had over 50 cynical show votes since then. Repeal the law and they would own the problem. Resist the law and the Republicans are free to complain, with a total absence of intellectual honesty, about the specific provisions of the law without any obligation to provide an alternative.

There have been some readers who doubted this last assertion. Privately they championed one Republican leader or another who promised to reveal an all-encompassing alternative to Obamacare much the way Richard Nixon had a secret plan to win the war in Vietnam. King v. Burwell forced the GOP’s hand.

No one knew how the Supreme Court would rule on King v. Burwell. It could have gone either way. As it was, Chief Justice Roberts was forced to perform intellectual somersaults to author this decision. He was absolutely correct in his assertion that the elimination of the subsidies for most of the country would have destroyed the insurance market. We would have sunk into a death spiral. That makes him the most important insurance commissioner in the country. And to the extent that the country might be better off with the law than with the chaos we would have endured, I am pleased with the decision. But I couldn’t have predicted it. No one could. So the Republicans were forced to plan for either decision.

Senator Ron Johnson (R-WI) and his plan were the subject of the May 11th post of this blog. I found it to be the most realistic because its main goal was to do nothing. Senator Johnson wanted to leave the subsidies in place but eliminate the employer and individual mandates until after the next election. You know when you are in trouble when doing nothing is your best option.

The Washington Post published “Your pocket guide to Obamacare replacement plans” last Tuesday, two days before the ruling. The Post highlighted the top 6 Republican options. They thought that Senator Johnson’s plan had the best chance of moving forward. Now all of those plans can be tossed.

Instead of having to deal with details and numbers, we will be treated to Senators, Congressmen, and most vociferously, by Presidential candidates discussing patient centered care, the free market system, and the holiness of the doctor-patient relationship. Yada Yada Yada.

All Sizzle and No Steak

The Patient Protection and Affordable Care Act is a poorly written law built more upon good intentions than a solid foundation of how insurance works. Nothing changed this past week. The Democrats will focus on the victories. The Republicans will highlight the failures.

Does anybody feel like celebrating?

DAVE

Photo credit - ME!

 

www.bcandb.com

Sunday, June 7, 2015

Another Note From The Department Of Gobbledygook


I got my first call last week from my client Wendy who is not only a talented real estate agent, but also someone who reads all of her mail. She recognized the correspondence "from" Medical Mutual of Ohio as possibly another letter from our frustrated novelists at the department of Health and Human Services. She was correct. Worse, it appears that HHS sent the same badly worded, scare tactic laden missive that was sent last year. MMO, like last year, was forbidden from changing even a comma. In that spirit I give you the same response I published last year.

Mayfield Heights-20140626-00340

 

The calls started coming in last week.

Dave, I want to keep my current policy.

Well of course you do. We had this conversation in October.

Yeah, well I got a letter that said that I had to call in to Medical Mutual if I want to keep my policy, so I called you.

You got a letter? I wasn’t copied. I have no idea what you’re talking about. Would you read the letter to me?

The client read the letter to me over the phone. It was long and rambling and sounded more like a request for him to dump his old cost effective policy in favor of a new contract than anything else.

That came from MMO?

Yes. It came in today’s mail.

Do me a favor. Scan and email it to me or fax it over.

The letter had, in fact, been sent by Medical Mutual to the client. Identical letters were sent by the insurance companies to all insureds with non-grandfathered policies. Identical. The letters were prepared by the Department of Health and Human Services (HHS). The insurance companies were forbidden to move a comma. If the objective was to confuse and/or frighten the people who have to this point avoided the government’s website, then they have finally managed to find an achievable goal.

Some Americans are well-served by the new health care law. If you are purchasing insurance for yourself and your family and you
  • Need maternity coverage
  • Have preexisting conditions
  • Would qualify for a premium subsidy
You might benefit from a new health insurance policy. But if you are healthy and/or don’t qualify for the subsidy, you probably want to keep your old policy.

A surprisingly large number of people want to keep their old policies.

The initial pushback resulted in the Obama Administration granting Transitional Relief, the ability to keep certain existing, non-grandfathered policies for 2014. The Centers for Medicare and Medicaid Services (CMS) announced in March that we were getting another 2 years and possibly more.

The Good News – My current policy is $400 per month less than a comparable 2014 plan. I am not alone.

The Bad News – Allowing the healthy to avoid the Patient Protection and Affordable Care Act (PPACA) for another couple of years spells higher rates for those in the system.

So to avoid upsetting millions of people the President and CMS are letting you keep your current policy. To avoid upsetting millions of people with ridiculous rate increases HHS is trying to get you to voluntarily dump your old policy. Hence the letter. If you give up your current policy, as opposed to having it taken from you, then you are part of the system by choice.

Don’t Do Anything

If you get the letter, the one that tells you that you can keep your current plan and then lists eight bullet points of what you are missing by not switching to a new health plan, you don’t need to do anything. Nothing. You will still get your renewal notice in a timely fashion. You will have the opportunity to keep your current policy and pay the new 2014/2015 rate. Or you will be able to shop for a policy under the new rules. There is no need to do anything today. That especially means that there is no need to get nervous or aggravated today.

The government’s website, the national frustration number, and letters like this prove again that the people in charge really didn’t know what they were doing when they invaded my business. The purpose of insurance is twofold – money and peace of mind. You write small checks to the insurance company so that if, G-d forbid, you get really sick or injured we’ll write the really big checks to the doctors and hospitals. And peace of mind, the knowledge that this will all work.

There is no gobbledygook on the path to peace of mind.