Sunday, December 21, 2014

The House Always Wins

Full House

The dealer wasn’t pleased. There I was, sitting on a 9 and a 3, and I wasn’t taking a card. “Are you sure”, he asked. “Yeah, I’m cool.” His up card was a queen. He shook his head and continued around the table. Finally, it was his turn. He flipped over his down card, a six, and then busted on another face card. The pit boss came over and gave our table a new dealer. I told my friends that it was time to go and collected my chips. They resisted, lost the next two hands, and then agreed to shift tables.

The House always wins. You may not know how or why, but it does.

Since this is Health Insurance Issues With Dave, the House is the federal government and the cards are The Patient Protection and Affordable Care Act (PPACA). The dealers and bit bosses? That would be the regulators who dole out the ever-changing rules and regs.

This blog has contended that the passage of the PPACA began a ten year transformation of our health care payment system. How we get there may either be by accident and reaction, or it may be entirely by design. I’m not privy to that information. This blog can only report on the status of our payment system and leave it for the readers to determine whether there is a pattern or just a random collection of factoids and moments.

We have just ended the first phase of this year’s Open Enrollment Period. Here are a few things I’ve learned between November 15, 2014 and December 15, 2014.
  • Individuals and families saw a large price increase on subsidized health insurance policies.
  • The government aggressively pushed Americans to shop on the Exchange for cheaper policies. They weren’t lying. There really were cheaper policies.
  • More Ohioans were told that they shouldn’t buy insurance. They should be covered by Medicaid.
  • Doctors who accept Medicaid are facing a significant fee cut.
Did subsidized policies take a big rate hike for 2015? Yes and No. Let’s look at a real example of a renewal. Below is the 2014 and 2015 rate information for a woman in her early 50’s. Her policy premium is reduced by over 50%. Her deductible and copayments are also subsidized due to her income. 

                     2014                                                                                      2015

                 $476.26                                    Premium                               $524.92

                   265.00                                     Subsidy                                 265.00

                 $211.26                                Net Premium                            $259.92

The policy increased 10%. Though no one wants to pay more, 10% is not unreasonable. But the client didn’t see 10%. The client saw 23%. The net premium is, for the client, the real premium. Two minutes after you finish applying for coverage you cease to remember what the actual premium is. The client only knows the net amount. And now, even without a reduction in the subsidy, the policy is on the road to becoming unaffordable. What are this woman’s options? She can resign herself to paying more or she can purchase a lesser policy, a contract with a much higher deductible.

The client was on vacation in the Caribbean when he called me the morning of December 11th. I have no idea how much the call cost him, but he had to talk to me. His hotel room TV had American stations. He saw a report urging everyone with a subsidized policy to go NOW to to renew. Even though we had talked two weeks earlier, he was convinced that his coverage might end if he didn’t stop everything and try to access the Exchange. I told him to relax. And don’t forget the sunscreen.

The push was hard and heavy. The Administration begged, advised, even ordered Americans to go onto to access cheaper insurance. And yes, there were cheaper policies, some much cheaper.

Ohioans have three types of cheaper policies:
  1. Medicaid like policies sold to unsuspecting consumers
  2. The new federally funded co-ops
  3. Even higher deductibles
Many consumers were surprised by all of the new choices on the Exchange, such as Ambetter and CareSource. One client, living in zip code 44118, was really excited about the premium until she discovered that the only available hospitals in Cuyahoga County were St. Vincent’s and Metro. Really? Would you really pay for insurance that didn’t include either The Cleveland Clinic or University Hospital? Many insurers have switched to a skinny network. Anthem’s individual policies no longer have The Cleveland Clinic in their network, but they still have University Hospital. But neither? I don’t think so. But it is cheaper. Herding the poor, and the people who make poor choices, into lesser coverage is part of the transformation process.

Major insurers are encountering another type of competitor. New insurance companies are being created out of whole cloth. Brand new. No old debt. No legacy clients, unhealthy and going nowhere. These new companies are not only unencumbered by a past, they weren’t even stressed with funding. We funded them. The federal government loaned just under $2 billion dollars to create a dozen insurance co-ops to compete with the insurers. Ohio has InHealth, a company that appears to be offering coverage at reality-based pricing. Some states, such as Montana and Illinois, have co-ops staking out unsustainable territory at the very bottom of the rates on the Silver Level contracts. This may damage the future choices of the people in those states, but it saves the federal government money since the subsidies are based on the second lowest Silver rate available.

We were worried about the uninsured. What we need to address the UNDERinsured. Each rate increase pushes more and more people to Bronze level policies with few or no office copayments or prescription cards. Most of my unsubsidized clients are migrating in that direction. It is the type of policy that I have. But I also have the corresponding Health Savings Account. I can withstand the hit. People purchasing family policies with a $12,000 deductible are often doing this to save a couple hundred dollars per month. They aren’t putting the money away. And since they aren’t, there is no way that they can afford to have a small claim.

Yes, a small claim. If you have incur a $200,000 bill and your insurance pays almost all of it, it is safe to say that the hospital will work with you to collect the little bit that is left. But if you have an accident and run up a $5,000 bill, you have a problem. All the insurer did was negotiate the final price. You are on the hook for the whole bill and you may not find the hospital to be nearly as generous and forgiving.

There is talk about a new level of underwhelming. COPPER. One way to make insurance cheaper (and by design/default the entire system less sustainable) would be to offer even lower levels of insurance. The Copper level might have a $18,000 to $20,000 family deductible. Less premium now, more bankruptcy later.

The last lesson I learned this time out was about Medicaid. Insurance rates have increased, in part due to all of the new benefits built into the PPACA. Even the philosophically opposed have found themselves forced to seek subsidies as the premiums have overwhelmed their finances. I am finding many young families and most families with multiple children are not qualifying for a subsidy. No, they are being herded into Medicaid. It is too early to tell if this is another flaw in the government’s software or if these people are really screwed. I cannot get the State of Ohio to return a phone call, but their website appears to extend eligibility to higher income amounts if there are children in the home.

This becomes a bigger issue as primary care doctors are about to take a pay cut on Medicaid patients. As we force more people into Medicaid, many who once had not only their own insurance but also their own doctors, we now will further limit their access to doctors and hospitals.

The first phase of this year’s Open Enrollment was a very long month and this has been a very long post. But this is no time to suffer from a short attention span. The transformation I perceive will take place because insurance becomes unaffordable, because the insurance you can purchase won’t be worth having, and because people never aspire to be treated as if they are poor. And those pressures will usher in a Single Payer (think Medicare-like) system. Whether that is by design or by accident is up to you to determine. I just know that the house always wins.


Friday, November 28, 2014

The Day We All Lost


I have been dreading this day for almost five years. Bill Clinton, a man known for both his incredible weaknesses as much as for his successes was, above all, candid about his goals for his health care program. In September 1993 he noted that revamping our system would result in both winners and losers. It was his belief that the final outcome, universal health insurance coverage, outweighed the costs. He acknowledged that the healthy and wealthy would have to pitch in, for the good of society, if the unhealthy and the poor were to be guaranteed access. He wanted to level the playing field. You may fault his program, G-d knows I did at the time, but you have to admire his candor.

Candor is in short supply.

Everyone lost on Monday, November 24, 2014. When I say everyone, I mean EVERYONE – the employer, the employees, the insurer, me, and the American people.

This is the story of a Cleveland-area small business. The names of the business, its owner, and the employees have all been changed to respect their privacy. I’m certain that this is neither the first nor the last time this will happen. It is simply the worst I’ve personally witnessed. I need to share this with you.

Thomas Roberts is an American success story. He and his parents emigrated here in search of freedom and opportunity. His first task was to learn English. He worked hard and eventually purchased a business. That company has changed, evolved and grown over the last thirty years. Tom Robert’s business is now a factory with over twenty employees. Most of his people are unskilled or semi-skilled workers.

I have been Tom’s agent for twenty-five years. He has always taken a personal interest in his employees. There was never a question of what was the cheapest way to insure his employees even when many of his competitors declined to offer any benefits. Our conversations always centered on what was the best coverage available within his budget. Employers providing group health insurance are required to pay at least 50% of the employee’s premium. Many don’t. Thomas Roberts has always contributed a significantly higher percentage.

I moved the health insurance coverage to Kaiser a few years ago. There were a few bumps in the road during the initial transition, but Tom was certain that this was the best option for his employees and he closed down one afternoon so that I could bring in a Kaiser rep to answer all of their questions and help them understand how to best access their health care. Employee satisfaction improved.

That satisfaction and the feeling that their employer took care of them and their needs, ended on Monday.

Kaiser, now HealthSpan, decided this past summer to not seek transitional relief. In other words, all of HealthSpan’s group contracts for businesses with fewer than 50 employees would migrate to new policies under The Patient Protection and Affordable Care Act (PPACA or Obamacare) at their renewal. Mr. Roberts’ coverage renews December 1st.

What does that mean? Under the new law we no longer evaluate risk. All businesses, the healthiest and the unhealthiest, pay the same rates, the Community Rates, within a designated territory. Every 30 year old in Greater Cleveland would pay the same price for a HealthSpan Gold Policy. Every 60 year old, regardless of small employer, also pays the same much higher premium.

The premium jumped over 200%.

Thomas Roberts was priced out of the market. Game. Set. Match. We explored every option, quoted all of the options, and ran the numbers up and down. We could not find a way to keep group health insurance for his employees.

This is not HealthSpan’s fault. As pointed out in previous posts, the whole concept of insurers maintaining two separate systems, Pre-PPACA and Post-PPACA, is expensive and inefficient. Aetna, to the surprise of both agents and insureds, eliminated their grandfathered policies in the summer of 2010. But this group, incredibly healthy and firmly in the insurer’s best rate class, is a huge loss for HealthSpan.

I spent an entire Sunday in my office designing individual policies for the employees. Tom was shocked when I showed him the results. The employees were screwed. A few could be covered under a spouse’s group policy. Several would be chased back to Medicaid (taxpayer funded) coverage. The employees who qualified for a tax credit subsidy would see their monthly payments double or triple. And the employees who didn’t qualify for a subsidy would now be forced to pay $400 to $600 per month for much less coverage.

We aren’t allowed to have a subsidized premium billed to an employer. The employer cannot deduct the premium from an employee’s paycheck. I sat with a young woman who was close to tears. She won’t be insured as of December 1st. Her husband doesn’t believe in insurance. He grudgingly went along with her decision to participate as long as her share came out of Her paycheck. But there would be no bills coming to His home. That would be one fight too many.

I spent two days this week at the Roberts’ factory. I know how few enrolled for coverage for December 1st. What I don’t know is how many will still have insurance four months or six months from now. And when those newly uninsured become sick or injured in the future it will be you and I, the American taxpayer, who will receive the bill.

The insurer lost. The employer lost. The employees lost. The agent lost. And in the end society, itself, lost on Monday, November 24, 2014.



This post includes a link to an interesting article written in 1994. Paul Starr, "What Happened to Health Care Reform?" The American Prospect no. 20 (Winter 1995): 20-31


Monday, November 3, 2014

Running Out The Clock



Dean Smith knew how to take the air out of the ball. Once he had the lead he had his team run the 4 corners offense, which is really just as much a defense as it is an offense, and ran out the clock. Sure he won. He won a lot. But the system, in this case college basketball, finally stepped in to correct what appeared to be an abuse of the rules, and instituted the shot clock. North Carolina is still a powerhouse, but basketball is now a much better game.

There is no shot clock in politics. Got a lead or a weak opponent and a politician can stall until the clock runs out at 7:30 PM on the first Tuesday in November. And if the only election that ever matters is the current one, then all is right in the world. But, some of us believe that elections are more important than any one candidate, or race, or party. That principle has been on display here this last week or so.

The issue that is burning up Facebook, the blogosphere, and what is sure to be the topic of journalism schools for years to come are the actions of the North East Ohio Media Group (NEOMG) and the (formerly Cleveland) Plain Dealer. Governor John Kasich, running with a big lead and what appears to be a lot of help, refused to debate his Democratic opponent Ed Fitzgerald. And when they finally did appear in the same room, he pretty much refused to acknowledge that Fitzgerald even existed. The video of their endorsement interview, streamed live, was the only unscripted insight Ohioans had into the two major party candidates. It was hardly flattering.

What did the NEOMG do with a video that failed to enhance the already determined storyline? They took it down. What did the Plain Dealer say about this newsworthy event? NOTHING. Both the NEOMG and the Plain Dealer are running out the clock. A win is a win. Maybe we’ll get an extra Sudoku in future Sunday papers.

I have been watching someone else run out the clock. Last month I wrote about my conversation with a member or Congressman Joyce’s staff.
  • October 9th - Talked with the staffer who promised to have someone from the legislative committee get back to me.
  • October 24th – Got a call from the same staffer who left a message that SHE was now ready to answer my questions.
  • October 28th – Finally talked again with the original staffer. She clarified her original statement. Yes the Congressman would vote again for the repeal of Obamacare (Patient Protection and Affordable Care Act) but he understood that nothing was going to change until after the next presidential election. She asked me if I was familiar with the Republican alternative, The American Health Care Reform Act. I confessed that I wasn’t and quickly brought it up on my screen. A quick glance brought up several questions:
  1. Why isn’t Congressman Joyce a co-sponsor?
  2. What portions of the law does he endorse?
  3. What sections, specifically, would he change?
She begged off and said that someone from the legislative committee would get back to me. Minutes later I got an email from the legislative aide who asked me to send him my questions by email.

Finally, the legislative aide. I figured I had one shot to get a real answer. This is what I sent:

Thank you for getting back to me. As an insurance agent, I have a healthy skepticism of the PPACA and all Single Payer Systems. But, as a realist, I am even more skeptical of simple, sound bite type answers. My blog has predicted since November 3, 2010 that the PPACA would not be overturned. In fact, I doubted at the time whether the Republican controlled House would generate meaningful legislation. HB 2 of January 2011 answered that question.

So I ask again what happens if the Coyote catches the Road Runner? What happens, specifically, if you get your way? I’ll report it. I’ll write about it. I’ll treat it with the respect and dignity it deserves. No more and no less.

I started to read The American Health Care Reform Act. I notice that your employer/my Congressman is not a co-Sponsor. Does that mean that he has an alternative? Does that mean that he is willing to specifically point out those parts with which he agrees and disagrees? AND LIKE SO MANY OTHERS, does he find the dessert part wonderful but would like to skip the vegies?

The first thing I noticed about the AHCRA is that it immediately repels all provisions of the PPACA! “PPACA.—Effective as of the enactment of the Patient Protection and Affordable Care Act (Public Law 111–148), such Act is repealed, and the provisions of law amended or repealed by such Act are restored or revived as if such Act had not been enacted”. That would mean that every problem created by the PPACA is now fixed! Yeah. Of course, that also means that every problem solved by the PPACA is now back on the table. Let me list a few:
  • Paperwork – Insurers, governments, and employers have spent millions on forms and compliance.
  • Medical Underwriting – We are now insuring at standard premiums a lot of people who would have been charged extra due to preexisting conditions or lifestyle choices. We are also now covering people who were declined in the past. Are the insurers permitted to purge their books of all of these bad risks? If not, how will they (the insurers) be compensated for these additional risks if the funding mechanism is destroyed?
  • Everyone appears to like Guaranteed Issue, the Waiver of Preexisting Conditions, and the inclusion of Maternity Coverage and Preventive Care. Does the Congressman or this bill balance these benefits with an Individual Mandate enforced with sufficient penalties?
  • Lots of Greater Cleveland families earn under $100,000 per year and qualify for a Tax Credit Subsidy. If your bill passes, these families lose their help. How do you fix this problem and how fast can that funding be in place?
  • Medicaid expansion is helping our major hospitals. The AHCRA eliminates millions of dollars to our economy. How would you replace those dollars?I don’t ask these questions as a self-described Moderate Democrat. I ask them as an insurance agent who interacts daily with 36 years’ worth of clients. My clients live in this district. Some have voted for Rep. Joyce in the past. Some may in the future. That is not my concern. Both the Democrats and the Republicans have invaded the insurance business over the years. The results are mixed, at best. But every action, no matter how well intentioned, impacts MY CLIENTS. So meaningless votes and extremist talk on MSNBC or FOX negatively impact my clients.So I will re-ask the questions I asked Maura a few weeks ago. What happens to my clients the day after Obamacare is repealed? How are they insured and how will they pay for it?
  • DAVE
It is November 3rd,, the day before the election, and no, I have not heard back from the Congressman’s office. I need to know the answers to these questions. YOU need to know what happens in the unlikely event that the PPACA were to be repealed. Your access to health care depends on this.

The candidates may be running out the clock. But the country is more important than any one candidate or any one election. And time is on Our Side.


Sunday, October 26, 2014

The Ghostwriter



What do rock stars, great athletes, and your health insurance company have in common? Ghostwriters. We know, instinctively, that a paid professional collected the recollections of the guitar slinger or the Hall of Fame running back and crafted a readable book, but we expect our insurers to write their own client letters.

That all changed this past spring.

My June 27th post, And Now A Note From The Department of Gobbledygook, detailed the fear and confusion caused by a letter sent by the insurance companies this past June. The letter, sent to insureds with non-grandfathered pre-2014 policies, was not written by Medical Mutual or Anthem Blue Cross. It was authored by the Department of Health and Human Services (HHS). The insurers were not allowed to edit the letter for clarity. They were not allowed to move a comma.

It turns out that the people who gave us the Patient Protection and Affordable Care Act (PPACA) had other career goals. They wanted to be writers. A new government penned letter is on its way. And this one is no better than the last one.

The new letter, due out any day now, will be sent to people who purchased a policy on the Exchange. It will encourage you to revisit to update your info. It will not, however, tell you that your 2014 policy has been changed for 2015. No, the letter will state that your policy has been DISCONTINUED.

Any change - deductible, co-payment, maximum out-of-pocket (MOOP) – will generate this scary notification. I have not seen the letter, but if it is anything like June’s, a quick reading will give you the impression that you are being thrown out into the cold. You are not. You will have plenty of options.
  1. Do nothing. The insurer will move you to the 2015 policy closest to your current coverage.
  2. You can go back to the Exchange and look at your current insurer’s other offerings.
  3. You can go back to the Exchange and look at all of your choices.
  4. You can purchase an off-Exchange policy and skip the whole process. There is no tax credit subsidy with this option.
Please remember:
  • All 2014 and beyond policies will renew on January 1st no matter when you make your purchase. That even includes policies acquired in the last few weeks.
  • The 2015 rates for both renewals and new business have yet to be released. We might not see those numbers until after the election.
  • If you purchased a policy through, you must go back to the Exchange to make any change, even a change of address.
We are only a few weeks away from our second try at open enrollment. By default, this year will go more smoothly than last. Stay calm. Don’t get too aggravated by the ghostwritten letters or the system crashes. Like last year, we will persevere.

In the words of John Lennon, “Everything will be okay in the end. If it's not okay, it's not the end.”


Sunday, October 12, 2014

The Fight For Intellectual Honesty

There will be no phone calls and I am not expecting an email. I still, for no apparent reason, believe that our elected representatives will rise above the pettiness of partisan politics and do their jobs. It is, in part, what makes me a Democrat, this faith that our government of the people will always come through in the end. The end may be far, far away and we may be forced to take the long way to get there, but I believe, I honestly believe, that we, as a country, will always make it to the finish line.

Otherwise, if we are just another banana republic, I’m going to trade up to a place with better weather.

This blog has a long history of calling out members of both political parties. We have witnessed politicians attempt to occupy both sides of the debate even after they had made their choices. In 2009 and 2010 it was particularly easy to skewer Representatives Marcia Fudge and Dennis Kucinich and Senator Sherrod Brown. After all, the Democrats were the only ones doing anything. But then the 2010 elections shifted the balance of power. John Boehner has starred in many of these posts, first in highlighting the opportunities he had as he became the Speaker of the House and later as we dealt with the reality of him being the Speaker of the House. Paul Ryan, VP candidate and prince of unworkable budgets, has also appeared a time or two on these pages.

It is not enough to be for something or against something. That may be OK if we are just a bunch of guys discussing football over a couple of beers. But if you are in Congress it is your job to solve problems. And if you don’t like the current system, it is up to you to come up with an alternative.

I bumped into a representative from Congressman David Joyce’s office. I introduced myself as a health insurance agent and asked a simple question: “If the Republicans gain control of both the House and the Senate in November, will Congressman Joyce support the repeal of the Patient Protection and Affordable Care Act (PPACA) when it comes up for a vote in January?” Without a moment’s hesitation she said “YES”. She answered so quickly, so unthinkingly, that I decided to ask the question again. The answer was still a resounding “YES”.

“OK”, I continued, “what do I tell my clients the next day”?

She promised to have someone from the Congressman’s legislative committee contact me. I made sure that she understood the question and provided her with a business card. And unless this blog is brought to their attention, there is virtually no chance that I will get a substantive answer to that question. That is a huge problem.

Please don’t be confused. The PPACA will not be repealed. Neither the Democrats nor the Republicans would want that, especially the elected Republicans. As long as the PPACA remains the law of the land, the Republicans have an issue to inflame their base and fill their coffers. AND, they don’t have responsibility for anything. Repeal the law and the Republicans would own healthcare and 20% of the economy. It is a lose / lose proposition. The law won’t be repealed. The filibuster in the Senate will keep both parties safe. The President will never be force to veto a repeal.

Don’t believe me? I visited the websites of several members of the Ohio Republican Congressional Delegation. Their sections on healthcare were missing in details, or in the case of John Boehner, missing entirely. David Joyce, two years in Congress, is just happy to have voted for repeal. He likes tort reform, but what Republican doesn’t? Jim Renacci is an even bigger fan of tort reform, and thinks that the savings from frivolous law suits would fund most of the cost of improving our system. A couple of downstate Republicans, Mike Turner and Steve Stivers haven’t bothered to update their healthcare pages for 9 months or more. Don’t look for solutions on any of these pages. Don’t look for meaningful alternatives. It is easy to be against something. It is really hard to make something work.

I am not expecting a phone call from the Congressman’s office. Why should they call? Nothing they have to say would change anything. I’ve already cast my vote. And in the two years he has been in office, he has cast his votes to repeal the Patient Protection and Affordable Care Act. The House will waste even more time in January and the Senate may be forced to waste time in April, while wars are waged in the Middle East and Ebola spreads unchecked.

The absence of intellectual honesty threatens the future of our country. I still believe that our elected officials will one day work together to solve our country’s problems. Of course, I could be just lying to myself



phone for sale


Tuesday, September 23, 2014

The Game

I have referred to this contest, the seemingly endless series of one-upmanship as the GAME.  Picture, if you will a pendulum that swings not just back and forth but actually between three points.  One point is the medical providers.  Another point is the insurance companies.  And the third point is the government.  Equidistant from each other, power shifts from one to the other smacking us in the ass every time it passes through the middle.  
We address these issues, not with unwarranted cynicism, but with the clear eyes of a realist.  If you don’t understand how the game is played you are destined to lose.  The stakes are high.  Health and money ride on your ability to make good, unemotional decisions.  Are the tests and procedures being ordered necessary for my health or for the practitioner’s bottom line?  Is the politician working to solve a problem or to collect campaign donations?  Does the insurer’s new network of providers give me access to the doctors and facilities I may need to use?  These are just a few of the important questions we need to answer on a regular basis.  But these aren’t the only issues.
Take, for example, Elisabeth Rosenthal’s excellent reporting in the New York Times.  In this article, partially reprinted in the Plain Dealer, Ms. Rosenthal details the way out-of-network physicians and drive by doctors are beating the system and costing the consumers of this country (us!) millions.  Utilizing loopholes that none of us would have ever thought existed, the unscrupulous have figured out a way to over bill the patient for services that were not rendered, did not require a specialist, or were  intentionally provided by someone out-of-network to evade the only cost controls our system allows.
                                                                     We are all at risk.
The main subject of the article, Peter Drier, was the model of diligence.  He carefully verified that his surgeon, hospital, and tests were all covered prior to his neck surgery.  How was he to know that his doctor and hospital would intentionally bring in out of network providers to juice the bill?  The biggest surprise was the assistant surgeon, an out-of-network sharpy named Dr. Harrison T. Mu.  Dr. Mu billed $117,000 for his services!  The negotiated fee for the primary surgeon was $6,200.  But Dr. Mu (probably beyond shaming, but I’m willing to try) was under no obligation to accept anything less than the full billed amount.  Luckily for Mr. Drier, his insurer, Anthem Blue Cross, paid the full amount.  I’m not sure that Anthem had to since the bill was above anything that could have passed as reasonable.
We talk about consumer directed health care as if we, the patients, have the opportunity to make real choices.  We don’t.  Can you shop for a deal when they are wheeling you in to the hospital with a blocked artery?  Hold up Mr. EMT.  I just got a text alert that Hillcrest is having a sale on bypasses this week. But even if your procedure is not an emergency and you have the time to vet the key providers, there are still hidden deals with labs, technicians, and assistant surgeons.  And that is before we get to fraud and bogus claims.
I recently received a call from an irate client.  She used to receive services from a doctor in his Ashtabula offices.  The price was under $200.  The same services, now performed within a Cuyahoga County medical palace, were over $3,500.  Her insurer, Assurant, allowed the claim to be processed unchallenged and applied the full amount to her $6,000 deductible.  In other words, she paid the whole excessive amount.  But only once.  She is looking for a Cuyahoga County physician willing to accept Ashtabula like payments.  Or she will drive further for a better deal.
I don’t think that The Patient Protection and Affordable Care Act (PPACA) does anything to combat these issues.   There is nothing to force providers to honor the patient’s network or to even pretend to be concerned about cost.  And nothing, absolutely nothing in the law, will stop patients from being abused by doctors like Harrison Mu.  Stopping that is up to us.  We are being forced to play this game.  We have to learn how to win.

Sunday, September 7, 2014

Stuck On The Bus

Garage Door Opener

The bus stopped right in front of my office. I knew this because the driver often blocked the exit from our Chagrin Blvd. building. And there I was, about a dozen years ago, riding the RTA to work. I had already walked a half a block from my Shaker Hts. home to the Rapid and waited in the rain to transfer to the bus. All of this because of my reliance on technology. Our electricity had been knocked out in the storm. My garage door opener, a first generation behemoth, wouldn’t disengage and I couldn’t get my car out of the garage.

I contacted a client, Smooth Door, a week later and replaced the opener. The new garage door openers, built with a better understanding of what the consumer needed, allowed me to manually lift the door when the power failed.

My last post, The Not Ready For Primetime Players, detailed the problems I have had in getting the government to help me insure a newborn. I have exciting news: As previously noted, Senator Brown’s office has been a real asset. I can now report that there are people doing their jobs at both The Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS).

Last Friday. August 29th, an HHS employee left a message on my client’s cellphone. A Special Enrollment had been granted for the client’s baby son and was made retroactive to his birth. My client was told that “The Plan” would contact him early the next week and advise him on the next steps he would need to take to get the baby added on to his policy through the Exchange.

There were no further contacts and the HHS employee, a Mr. Ryan had blocked his number. We could not call him back.

On Friday, September 5th, the client and I called We reached a helpful, professional woman who was able to verify everything that had been left on the client’s voicemail.
  • A Special Enrollment had been granted
  • It was retroactive
  • There were notes detailing the efforts of the Senator’s office and CMS

Success? NOPE!

If the goal was to get the federal government to recognize that a baby had been born in Cleveland in April, we did it. But insuring the child is still beyond our grasp.

The system crashed four times. Our helpful professional became as frustrated as the client. She rebooted, cleared histories, and begged for help from her supervisors.

One hour and forty-five minutes into the call our contact was forced to provide the required statement. I was told the will provide “support feedback to Technical Support and that the individual should try again in 72 hours”.

And I was back to where I had been in May.

I have already heard from on CMS employee, thrilled that this is no longer on her desk. “I understand your frustrations with this whole process, but please try to continue to touch base with the Call Center from Marketplace to effectuate the babies (sic) enrollment. We cannot process enrollments. I hope this helps.”

The Technology that was supposed to make the acquisition of health insurance quicker and easier is preventing my client from covering his child. As part of the Patient Protection and Affordable Care Act (PPACA), the government has created these unnecessary, inefficient Exchanges. They are populated by well-meaning workers who are scandalously unprepared and who know nothing about insurance. And, the government has failed to design a way to manually fix the inevitable problems of their glitch ridden computer system.

Our unwarranted faith and over-reliance on technology has again left us stuck on the bus.


Saturday, August 30, 2014

The Not Ready For Primetime Players


It was another one of those meetings. The regional manager of some insurance company spoke for two hours. No handouts. No collateral. Two hours of power point. The important stuff was glazed over or skipped entirely. He returned to the irrelevant again and again. I was in a room full of agents desperate for the news that this company, or any company, had found a clear path through the Patient Protection and Affordable Care Act (PPACA). Would this insurer solve our clients’ problems, provide access to the best doctors, and be reasonably priced?

Yes and No.

This particular insurer will be a great answer for a limited number of people in our market. But it won’t be just the people well served by this insurer and its products who will be carrying that card next year. For some the coverage and the medical providers will be OK, at best. And some Ohioans will make a bad decision based on their familiarity with the company’s name or the price on the government’s website.

Unprepared. Rushed by a timetable that neither the insurers nor the government seem capable of meeting, we emerge from our summer stupor to confront the upcoming open enrollment and renewal season. In fact, even the insurance company executive noted that this year, 2014, was going to be a bigger mess than last year’s initial debacle.

Insurance agents are people who have figured out how to monetize empathy and problem solving. The following are some of the pressure points, issues, and concerns that we have as of the end of August 2014.
  1. We haven’t solved last year’s problems!, which appears to default to Medicaid, is still incorrectly blocking Ohio women from regular, subsidized, health policies. It has been less than a week since I last encountered this issue. Women who have recently given birth seem to fight this more frequently.
  2. Speaking of babies… I noted in April the difficulty I was having adding a newborn to an exchange policy. The problem was solved in May’s Climb Into The Ring. NO IT WASN’T. The baby has yet to be added to the policy. The client is frustrated. I’m beside myself. Our senator’s office doesn’t understand why the Centers for Medicare and Medicaid Services (CMS) can’t resolve this and can’t seem to provide any of us with an answer or the courtesy of a returned call. We’ve all given up hope. To the shock of my peers. I was forced to write a short term major medical policy for the baby this week. The child will have coverage if he suffers, G-d forbid, a major accident or illness. I mailed the application to the insurance company and mailed a check for the $25 I made on the sale to a charity. I can’t keep that money. I’m embarrassed that I was forced by the government’s incompetence to write the application.
  3. Perfect Storm… My peers are justifiably concerned about the 24 hour day. There just isn’t enough time. Senior citizen (65+) Medicare Open Enrollment is October 15th through December 7th. A large percentage of our group health policies renew January 1st. Client meetings will be held during the months of October and November with everything finalized, if we’re lucky, by the first week of December. AND, all individual PPACA compliant policies renew January 1st. The Open Enrollment Period for individuals and families (under 65) is November 15th through February 15th. Because of the subsidies and changes, most people should resolve their 2015 coverage prior to December 15th. 30 Days. The overlap of all of our senior business, most of our group clients, and every single individual policyholder under age 65 converging on our offices in time for Thanksgiving dinner has more than a few of us nervous.
  4. Lack of concern… At least one of our insurers has, effectively, eliminated the reinstatement of lapsed policies. All of our new individual policies are due on the first of the month. This particular insurer sends a late notice on the 3rd if payment wasn’t received on time. Policies not sold on the exchange have a 30 day grace period and only have to be eligible for reinstatement to the 30th day after the first late notice. Yes, you are seeing that correctly. If the policy was due September 1st it would be permanently terminated by October 3rd. Once terminated for non-payment, the individual or family is not eligible for comprehensive major medical coverage until the next Open Enrollment Period in November. Have they met their clients? This has already had a big impact on some of my clients. And this will get worse as the premiums rise.
  5. Subsidies and tax returns… Christmas comes twice a year for some retailers. There is the traditional excitement of December and there is the joy of March and April, when W-2 wage earners receive their income tax refunds. That money is immediately plowed back into the economy. Jewelry! Clothing! Appliances! New and Used Cars! We have no idea what is going to happen this coming spring as many people will be receiving smaller tax refunds due to adjustments from the subsidies.
  6. Deductibles… As the deductibles for individuals on our new policies rise to $6,000+ and families face out of pocket liabilities well in excess of $10,000, we will soon face a new reality. How many families can afford both the premiums and the deductibles of the PPACA? This is not about health. Never has been. This entire enterprise is designed to (efficiently?) transfer money to doctors and hospitals. The current system implodes if they don’t get paid. Sure, your insurer may cover $88,000 of that $100,000 hospital bill, but what about the $12,000 that you failed to pay? Will you be forced to provide your MasterCard in the emergency room? Copy of the deed to the house? This is going to get ugly.

There’s more, but there is a limit to how stressed any of us should be on Labor Day weekend. In the end it is about faith. Our faith in our systems, our government, and our leaders will be tested. And they will disappoint us, but this will get resolved. It has to be. Healthcare is almost 20% of our economy. And though health is seldom a consideration, there are real impacts from decisions made in Washington and our state capitals. We just need to remind them every now and then.

The Not Ready For Primetime Players became legends at what they did best. Who knows? One day we may look back in appreciation at some of our current politicians and bureaucrats. It could happen…


Monday, August 25, 2014

The CPA Enrichment Act of 2010

The Patient Protection and Affordable Care Act (PPACA) requires most Americans to have health insurance.  This is the Individual Mandate.  Failing to purchase coverage without a good excuse will cost you a fine, the Shared Responsibility Payment.  How will the federal government assess that fee?  Your annual income tax return! 

The PPACA also provides tax credit subsidies to help Americans earning less than 400% of the Federal Poverty Level pay their premiums if the policy is purchased through a state or federal insurance exchange.  The final calculations are supposed to be recorded on your tax return. 

Our friends in Washington are trying to create the form to record your compliance with the new law.  As a patriotic American, I thought that I might be able to help.  Below is a Schedule I (Insurance) Form. 


                                Health Insurance Compliance    
Section I
(Form 1040)                                                                             2014


Name as shown on Form 1040, Line 6a____________________________ 
Social Security Number____-__-____ 

Name of Individual, Spouse, or Dependent ____________________________ 
One Schedule I per person. 

This form will determine whether or not you had qualified health insurance for 2014.  Complete a separate Schedule I for each person listed on Form 1040, Lines 6a through 6c. 

A. Insurance
            1. Did the above named individual have comprehensive major medical
                coverage through an Employer sponsored group health policy for all
                of 2014?
                        ___ YES    Return to Form 1040, Line 29 and check YES
                        ___  NO     Continue

            2. Did the above named individual have a qualified individual health
                policy for all of 2014?
                        ___ YES    Not purchased through a state or federal exchange
                        ___ YES    Grandfathered policy (purchased prior to March
                        ___ YES    Grandmothered policy (purchased March 2010
                                           to December 31, 2013)
                If YES, Return to Form 1040, Line 29 and check YES
                        ___ YES    Purchased through a state or federal exchange.  
                                           Proceed to Section B
                        ___  NO     Continue

            3. Did the above named individual have a qualified health policy
                during 2014?
                        ___ 9 – 12 months   Return to Form 1040, Line 29 check YES
                        ___ 0 – 9 months     Continue

            4. Was the above named individual granted a Hardship Exemption?
                        ___ YES    Return to Form 1040, Line 29 and check YES
                        ___  NO     Return to Form 1040, Line 29 and check NO.

   The Shared Responsibility Payment is computed on Form 1040, Line 65

B. Tax Credit Subsidy
The above named individual purchased health insurance through a state or federal exchange.
            1. Was an employer sponsored group health policy available through
                 personal employment, a spouse, or parent?
                        ___ YES    Return to Form 1040, Line 29 check YES, Line 29a
                                          check NO
                        ___  NO     Continue

            2. Was the above named individual incarcerated during 2014?
                        ___ YES    Return to Form 1040, Line 29 check YES, Line 29a
                                          check NO
                        ___  NO     Continue

            3. Insert income from Form 1040, Line 23 ___________________

            4. Determine tax credit subsidy from Table I.

            5. Did the above named individual qualify for a tax credit subsidy?
                        ___ YES    Return to Form 1040, Line 29 check YES, Line 29a
                                          check YES
                                          Enter earned subsidy here _____________ and
                                          on Form 1040, Line 65a.
                        ___  NO     Continue

            6. Does the above name person want to dance?
                        ___ YES    Under the moonlight
                        ___  NO     Don’t ask me

            7. Did the above named individual receive a tax credit subsidy?
                        ___ YES    Return to Form 1040, Line 29 check YES, Line 29a
                                          check NO and enter subsidy received on Form 1040,
                                           Line 65b
                        ___  NO     Return to Form 1040, Line 29 check YES, Line 29a
                                          check NO and leave Form 1040, Line 65b blank. 

The above is my initial stab at this.  The Internal Revenue Service may, or may not, be even this far along in the process.  CPA’s are gearing up for forms that may not be available until mid or late February.  Tax preparation software will be updated, and updated again before April 15th. 

My advice is to make friends with an accountant.  You’re going to need one.

Saturday, August 9, 2014

Nope, Not Today

.Mayfield Heights-20140809-00361 (2)

Juan (name changed) used to have health insurance. Over the years Juan had been covered by his employer, his wife’s employer, and for the last several years he had been insured through an individual health plan that he had paid for himself. Juan dropped his policy in March 2013. It doesn’t matter why. He just did. And he has been uninsured since.

On Wednesday, August 6, 2014, Juan decided to buy a policy. He called his agent (me!) and asked to get a policy like the one he used to have. And I was forced to say, “Nope, not today”.

Four years since the passage of The Patient Protection and Affordable Care Act (PPACA) and eight months into 2014 and all of this year’s changes and we still have a large number of Americans unaware of the law’s basics. Here are a few of the most important:
  • It’s all Obamacare. The good. The bad. On or off the government’s online sale’s portal. Whether you are celebrating the success of Kentucky’s Kynect or flailing about with, it is all Obamacare.
  • You no longer have to answer health questions.
  • Preexisting conditions are now covered.
  • The premium is determined solely by your age, your address, and whether or not you smoke.
  • We now fully cover annual physicals and preventive care.
  • Maternity is covered the same as any other medical condition.
  • Since we don’t ask questions, the only time most of us can buy a policy is during the Annual Open Enrollment Period.
  • If you lose your policy or have a major life event, you are granted a Special Enrollment Period and allowed to buy a policy.
  • Medicaid was expanded to help the working poor acquire needed coverage.
  • There are tax credit subsidies to help a surprisingly large portion of our country pay for their policies.
  • You will be fined if you don’t have coverage.
There’s more. Of course there’s more, but the above hits the high points and covers most of what you really need to know. What Juan needed to know was that he couldn’t simply wake up one morning, dig out my card, and buy a comprehensive major medical policy.

Nope, not today

Juan was able to purchase a short term policy to cover himself for the rest of 2014. He and I will talk again in the middle of November during the Annual Open Enrollment Period.

Everyday used to be a great day to buy insurance. Those days are gone


Thursday, July 24, 2014

Beep Beep

photo 3 (2)

The Chase. The endless effort to reach that which is just beyond our grasp has piqued our imagination since we, as small children, watched the Coyote try to capture the Roadrunner. We knew, instinctively, that the Coyote would never succeed. But what if he did? What if the Coyote actually had his arms wrapped around the Roadrunner? Would he know what to do?

The Coyote’s struggles are humorous entertainment. The Republican’s efforts to eliminate or destroy the Patient Protection and Affordable Care Act (PPACA) have been just as entertaining if your tastes run towards political drama. John Boehner and the Republican controlled House of Representatives have been chasing the PPACA for nearly four and a half years. What would Boehner do if he actually got his hands on the PPACA, if the law was crippled or repealed? We may soon find out.

This blog has long contended that the PPACA is a poorly written law in desperate need of tweaking. Today’s problem revolves around the issue of subsidies. The law was designed, in part, to help the working poor to acquire and PAY for quality health insurance. The law’s framers envisioned individuals and families accessing a system of simple, online, state-based marketplaces and, when appropriate, tax credit subsidies to help with the premiums. The process wasn’t all that easy and over two thirds of the states decided not to build an exchange.

Creating a state-based exchange requires an incredible amount of time and energy. Some states see this as a huge waste of resources. Others, like Oklahoma, have no interest in participating in the PPACA. The federal government created the much beloved so that the millions of residents in states like Ohio could purchase coverage and qualify for the tax credit subsidies.

This past Tuesday the U.S. Court of Appeals for the District of Columbia ruled (2-1) that people purchasing coverage through the federal exchange are not eligible for the subsidies. Sure, a couple of hours later the 4th U.S. Circuit of Appeals in Richmond, Virginia reached the opposite conclusion (3-0) on a similar case, but the door had been flung open. One side or the other can still appeal, but the conflicting decisions, alone, may be enough to get this matter before the Roberts’ Supreme Court.

Could the Supreme Court eliminate the tax credit subsidies, the only way millions of Americans can afford to pay for health insurance? Yes, they could. Would the Supreme Court gut the PPACA? Who knows? Based on the Court’s recent decisions, any outcome is possible.

If the Supreme Court takes this case, I suspect that it won’t be until the fall of 2015. That means that a decision would be handed down in June 2016, right in the middle of a Presidential election. So let’s explore what would happen if the Supreme Court ruled that tax credit subsidies were only available on policies purchased on state-based exchanges.
  • The immediate effect would be the elimination of assistance to approximately 5 million Americans.
  • The Employer Mandate, a rule predicated on the availability of affordable (subsidized) coverage, would be shelved.

Republicans, having finally caught the PPACA, would be forced to actually do something.

There would be nowhere to hide. Both parties would have to state clearly how they would solve this problem. The quickest way to solve this specific issue would be to amend the law and allow subsidies for policies purchase on either the state or federal exchange. Another option would be for the states could form their own exchanges or contract with a third party to piggy back on the federal exchange. OR, we could just let everyone fend for themselves as we review the long-awaited Republican alternative.

The Republicans lose under all these scenarios.

If they fix this and a half dozen other major flaws in the law after six years of demonization, they will appear to be weak and hypocritical to their base. The few Republican members of the House and Senate needed to pass the legislation will be pilloried on FOX and by the right-wing opinion makers. It was Eric Cantor who originally introduced the “Repealing the Job Killing Health Care Law Act” HB 2 in January 2011. He will be long gone before the summer of 2016, but Paul Ryan and Ted Cruz will still be in Congress and neither could let a fix get through Congress if they still have Presidential aspirations.

The state governors face a similar problem. Republicans pushed through constitutional amendments in Ohio and other states that make the creation of a state-based exchange difficult if not impossible. Many of the Republican governors are defined by their anti-Obama/Obamacare position. They can’t bend.

The average tax credit subsidy is $5,000 per year, over $400 per month. I’m not sure which would be worse, the actual suffering caused by the repeal of the subsidies or the inevitable hair on fire commercials about the suffering. Hell, I’m suffering just thinking about it.

The Patient Protection and Affordable Care Act is almost within John Boehner’s grasp. The House has voted to repeal or change the PPACA over 50 times. But it may be the framers’ own mistakes, punished by a highly politicized Supreme Court, that will be the law’s undoing. A victory he doesn’t want over a law he loves to hate. Poor Mr. Boehner. No matter where he goes the only sound he hears is “Beep Beep”.