Thursday, June 26, 2014

And Now A Note From The Department of Gobbledygook

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.


Wednesday, June 18, 2014

Please Remind Me Why We Did This


It was an ugly, ugly bedroom.  The only solution I could think of was to scrape off the seven layers of paint and wallpaper to get back to the original plaster.  At that point we would be able to make the room ready for my daughter.  It was the spring of 1983 and I was living in University Heights.  The work was backbreaking and monotonous.  Success was measured in inches.  “Surely there must be a better way of doing this”, was muttered on an hourly basis.  I even wondered if it would have been easier to just knock out the walls and hang new Sheetrock.  But we persevered because we knew why we were doing this.  We were doing this for Jenny.

Is the effort worth it?  Are our goals worthy of the time and effort it might take to achieve them?  That question pops up again and again when we look at the Patient Protection and Affordable Care Act (PPACA).  We were told that there were 50,000,000 uninsured Americans and that the PPACA would solve this problem.  We were told that the cost of insurance and the actual cost of healthcare would decrease.  We were promised easy access to affordable care.

Are we there yet?

 According to the Gallup Pole published in March 2014, the number of uninsured in the United States has decreased.  Of course, that number has steadily INCREASED until it peaked in the middle of last year.  But now it is going down.  Gallup conducted more than 28,000 interviews and has determined that 15.9% of all Americans are uninsured.  With a US Population of Approximately 318,000,000, that would mean that about 50,562,000 of us are uninsured.  For comparison sake, the uninsured rate was in the 14% range until the crash at the end of 2008 and did not exceed 17% until the middle of 2011.

It might be fair to ask if the new law is really having any impact on the number of uninsureds.   Is the economy, slowly recovering, the reason more people are now getting coverage?  Or it could be the expansion of Medicaid in those states that chose to fully cover the working poor.  It is way too early to tell.  The numbers released so far, rounded to the nearest hundred thousand or so, are neither firm nor reliable.

Allow me to provide you with a small but accurate sampling of the individual health insurance market in Greater Cleveland.  I wrote 62 contracts (individuals or families) during the first three months of 2014.  Here is the breakdown:

On Exchange (Subsidy Eligible)                                                 Off Exchange

23                                                         Contracts                                            39

48                                                 Insured Individuals                                 66

7                                                  Previously Uninsured                                10

15%                                                  Newly Insured                                        15%

Twenty-three individuals or families successfully purchased a policy with me on the new exchange.  We only used the exchange because they are going to receive a tax subsidy to help to pay for the policy.   There were a total of 48 people involved and only 7 of them, 7 total adults and children, were previously uninsured.  The other 41 changed coverages to get cheaper insurance or to pick up maternity.

My Off Exchange experience is essentially the same.  Thirty-nine individuals and or families applied for coverage.  Of the sixty-six people covered, only 10 had been previously uninsured.  The balance purchased policies, in many instances, because we are no longer rating for risk.  In other words, these are individuals and families who may have paid a lot more for coverage in the past due to their preexisting conditions.  Their conditions and the cost to treat them didn’t disappear, just the money it took to cover the risks.

It is my experience, with my admittedly little sample, that only 15% of my transactions involved covering the uninsured.  Most of this is simply shifting risk and cost.  People with lower incomes have shifted a large chunk of the cost of insurance to the US taxpayer.  Unhealthy people have shifted the risk of their insurance to the general population.  The uninsured, the people who would be swamping our offices (sarcasm intended), didn’t stand in line outside of my door.

I talked with an uninsured gentleman this morning.  Harry (name changed) lives in Parma.  He is 62, uninsured since he left his last job in 2010, and has no interest in spending a dime more than necessary.  He has pension, savings, and is getting by.  He uses the word Obamacare like expletive.  Why did he call my office?  It may be because his right knee, the one that was surgically repaired in 2009, may be acting up.  It could be because his buddy is in the hospital and he got scared.  Who knows?   Harry didn’t purchase coverage when we talked in October and he didn’t do anything today.  And he won’t do anything this November at the Open Enrollment unless that knee starts to really hurt or that buddy dies.


So please remind me why we did this.  Did we need to destroy the village to save it?  Was it worth it?  If our goal was to cover the uninsured and the working poor, we could have done a better, more thorough job expanding Medicaid.  The rest, affordability and patient protection, seem just beyond our reach.  But it is only June 2014.  It is still too early to tell.