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.