Sunday, December 27, 2015

Why Do You Have An HSA?

gift wrap

The presents have been opened and some have already been exchanged. Now it is time to take stock of what we actually purchased for ourselves and our families this year. And while we are second-guessing that hoverboard decision, we might also want to make time to understand that new health policy we purchased for next year.

Some of the most popular policies in our market carry the letters HSA in their names. Many of you intentionally purchased this type of policy and intend to take full advantage of the tax advantages. Most people were simply purchasing the cheapest policy available, the one with limited benefits before you reach a high deductible.

To carry the HSA designation, the health policy must have a high-deductible (HDHP). The plan can not have office or Rx copays prior to the deductible being met. The Patient Protection and Affordable Care Act (PPACA or Obamacare) requires the policy to include “first-dollar” coverage for preventive services such as an annual routine physical, medical screening tests (like a colonoscopy), well-baby care, and certain medications. The maximum-out-of-pocket for 2016 is $6,550.

If your policy meets the above criteria, you are allowed to open a Health Savings Account.

It is only cheap insurance unless you open the Health Savings Account. The HSA may be opened through your insurer or at almost any bank. The money that you deposit into the account is tax deductible. You may then use the money, tax free, to pay qualified medical expenses. And the account isn’t use it or lose it. Unused funds roll over to the next year.

2016 Contribution Limits

Individuals      $3,350
Family              $6,750

HSA Catch-up Contributions $1,000

Contributing to your Health Savings Account does not solve all problems. Lots of you are singles purchasing $6,000 deductible policies. Even a maximum contribution to your HSA still leaves thousands of dollars of exposure should you happen to have an accident or unexpected illness. The best of these policies pays 100% of covered charges once the deductible has been met. Some still have coinsurance and only pay 80% or 70% until you have reached your maximum-out-of-pocket.

Whether you intentionally purchased a High Deductible Health Plan with the goal of opening a Health Savings Account or just bought the only insurance you could afford, it is important that you try to make the policy work for you. Either way, lose the hoverboard.


Sunday, December 20, 2015

No Client Left Behind

left behind

The Patient Protection and Affordable Care Act (PPACA or Obamacare) is the insurance equivalent of No Child Left Behind – incredibly frustrating and just as many mindless tests.

We are now through the first phase of this year’s Open Enrollment Period. This would be a good time to catch our breath and review our progress.

This computer stuff is harder than it looks. Our current crop of presidential aspirants constantly discuss shutting off part of the internet or controlling access to certain individuals. They discuss the internet and computers as if they were seasoned mechanics assessing a Chevy. This is year three of the Exchange. On Monday I had to switch to Chrome and enter everything in ALL CAPS to get the site to work. Sure it doesn’t crash as often as it did last year, but if this was my Chevy I would have utilized the Lemon Law to dump it long ago.

The computer issue isn’t limited to the government. A client asked to change her deductible for 2016. This was an off-Exchange policy so we only needed to visit the insurer’s website. The insurer, a big one, will remain nameless. It took over an hour to make an easy change. I would never send a client there which is a problem since the insurers are expecting their websites to carry the load as they cut back on staff.

Saying Goodbye. Some insurers have decided that selling on the Exchange is a losing proposition. Sheer incompetence has overcome others. Many of the Co-ops created under the PPACA have already been shuttered. UnitedHealth Care has announced that they will be pulling out of the Exchange. And then there is HealthSpan…

Cryin’ Won’t Help You. The first full year of the PPACA brought lots of tears. There were tears of joy as the previously uninsured gained coverage and others saved thousands. There were tears of frustration from dealing with and the national call center. And there were tears of anger as some were blocked from coverage for up to a year. Now it is mostly tears of the betrayed.

I had to explain to a young family why they couldn’t have reasonable coverage. They own a small business and live in a Cleveland suburb. In 2015 they had qualified for a heavily subsidized Silver Level Medical Mutual policy based on their income in the mid 40’s. In 2016 they will get $355. That is only 35% of the cheapest Anthem Silver policy, the least expensive unfettered access to University Hospital. The cheapest Medical Mutual Silver policy is a touch more. It would cost them $669.99 per month. They can’t afford that. The subsidy is designed to give them access to the second lowest Silver Level policy. That would be an awful contract from CareSource. (Yes, their office is directly above mine.) For $366.65 per month this family can go to Akron General, MetroHealth, and LakeWest. There is nothing inherently bad about any of these facilities, but would you sacrifice 10% of your income for insurance that bars you from University Hospital and The Cleveland Clinic? I wouldn’t.

Deductibles. Fewer good choices and skyrocketing premiums have forced people to increase their deductibles. $4,000 and $6,000 deductibles are common. What is not common are the savings accounts necessary to withstand the hit of an unexpected illness or accident. How long will it be before doctors and hospitals ask for a credit card with your insurance card? The answer is SOON.

We have more people covered. We have more people covered badly. We have an insurance bubble, no less serious than the housing bubble of eight years ago. We are all along for the ride. And no client will be left behind.



Monday, November 2, 2015

How Many 4th Graders Support Donald Trump?


We interrupt this blog for Breaking News.

We have the results from the latest poll. We asked the students of Mr. Miller’s 4th grade class, here in East Podunk, Ohio, who they would vote for if the election was held today. And this is shocking! These student voters are equally divided – 33% for Donald Trump, 33% for Hillary Clinton, 33% for Beyoncé, and 1% for John Kasich. This is the first poll we’ve taken that has shown Kasich ahead of Jeb Bush.

4th graders. Could the report be accurate? Yes. Could it be 100% true? Sure. Does it mean anything? Absolutely Not.

Saturday’s Plain Dealer had a front page article – In 3rd year, NE Ohio insurance costs drop 6.3%. For most of you, that number is as real as Beyoncé’s electability.

All of the new individual policies, purchased on or off the government’s Exchange, renew on January 1st each year. Like my fellow agents, I have been reviewing the records of several hundred clients since the information was released a little over a week ago. One client at a time.

I have yet to see even one rate decrease.

How can that be? Where are these rate decreases? My Anthem PPO clients, people who wanted a clear path into University Hospital, did not see their premiums shrink. And Medical Mutual of Ohio, the E Ticket into the Cleveland Clinic, had rate increases of up to 27%. How could the Plain Dealer be both 100% accurate and 100% irrelevant?

The answer lies at the heart of the Patient Protection and Affordable Care Act (PPACA or Obamacare). The focus has never been on health or health care reform. The point of the law is to reorganize how medical providers get paid. And, herding lower income people into lower cost providers is more efficient than allowing them to ring up big bills at expensive facilities that are eventually written off.

I went on to today and looked at the least expensive policies for me, a 60 year old living in Cuyahoga County. Please remember that rates are gender neutral and that there are no health questions.

The lease expensive policy, $434 per month, is from Ambetter Insurance. The deductible is $6,800. This policy sends you to Metro Health and St. Vincent’s. More importantly, the Cleveland Clinic and University Hospital are not in their network. Never heard of Ambetter? Don’t want them? Too bad. They have lots of options on the Exchange close to this price point. None get you into U.H. or the Clinic.

The next insurer is CareSource at $444 per month with a $6,650 deductible. CareSource’s Medicaid policy has a great network, but if you are paying all or part of your premium you are again looking at a policy that fails to include University Hospital or the Cleveland Clinic.

Molina’s least expensive policy comes in at $468. Still no University Hospital of Cleveland Clinic.

Aetna has introduced a full portfolio of innovative group policies that provide great access to all of our major hospitals. Their least expensive individual policy at $520 per month does not. The deductible is $6,450. The doors to U.H. and C.C.F. are closed.

HealthSpan, an HMO, has a $4,500 deductible policy at $566 per month. This is the least expensive policy on the Exchange that grants access to University Hospital.

The new Anthem HMO policy is also $566. This policy has Anthem’s smallest network. Neither University Hospital nor the Cleveland Clinic are included.

HUMANA has a $6,450 deductible policy at $567 per month. University Hospital is in their network.

Medical Mutual of Ohio’s workhorse policy, the $6,000 deductible 100% plan, is $569 per month. This plan utilizes the old SuperMed Plus Network. It includes the Cleveland Clinic and the suburban facilities of University Hospital. This is not an HMO and it does not require a referral to see a specialist.

$569! It takes eight different insurers and over a dozen policy options to get to a policy that provides easy access to the majority of doctors and hospitals in Greater Cleveland. The price for access isn’t decreasing. It is increasing.

Are the rates decreasing on the Exchange? Sure. We are getting more and more offerings from the Ambetters, Molinas, and CareSources. But if we flood the market with Yugos, does it mean that the price of cars is going down?

The Plain Dealer reported that the price of insurance has decreased. Perhaps a more complete article would have noted the influx of limited access carriers. Would you really pay $434 - $566 per month to go to Charity Hospital? Do you really care how many 4th graders support Donald Trump?




Monday, October 12, 2015

A Glimmer Of Hope

Glimmer of Hope

The news can be so depressing. Bad news 24/7. It is hard to believe, based on what is reported on FOX, MSNBC, or even CNN, that anything is getting done in Washington. And that is why I am particularly happy to devote today’s blog post to some good news.

President Obama signed into law H.R. 1624 last week. Yes, there are laws, bipartisan laws, getting through Congress. The Protecting Affordable Coverage for Employees (PACE) Act is legislation that will allow states to define the size of small groups for health insurance purposes.

The Patient Protection and Affordable Care Act (PPACA) changed the size of small groups from 2-50 to 2-100 as of January 1, 2016. The new regulations, especially community ratings, have the potential of eliminating group health coverage for hundreds of thousands of employees and their families. The PACE Act fixes the problem.

Many of my readers and clients wondered why I went to Washington in February. “Why waste your time and money?” they asked. PACE was one of the major issues on our agenda. Our elected representatives paid attention to me and my peers because they understood that we were there in Washington for our clients, not ourselves. We were able to impress upon them that fixing this and other issues didn’t mean that they agreed or disagreed with Obamacare. This was just constituent service.

This bill was sponsored by Representatives Brett Guthrie (R-KY-2) and Tony Cardenas (D-CA-29) in the House and Senators Tim Scott (R-SC) and Jeanne Shaheen (D-NH) once it got to the Senate. The President quietly signed the PACE Act into law Wednesday evening. The House, the Senate, and the President stripped the politics out of this and simply worked together to get something done. This is proof that our leaders are still capable of working in our best interest.

Our other big issue is “Grandmothered” policies. These are the policies that were issued with an effective date between April 2010 and December 31, 2013. I have mentioned that my personal health policy would be twice as much under the new law. Twice as much, over $600 per month.

The good news is the “Grandmothered” policies are still around for another year. The renewals are coming in and the rates are still terrific. Agents and our trade groups are committed to fighting for our clients and the option to retain these older, more affordable policies. And just like PACE, we know that the key to success is getting Congress to understand the scope of the problem.

The PACE Act may be the feel good story of 2015.


Friday, October 2, 2015

I'm Rich! I'm Rich!


The check came in the mail earlier this week. My check. Made out to me personally. And I couldn’t be happier. One of the most touted provisions of the Patient Protection and Affordable Care Act (PPACA) is the MLR, Medical Loss Ratio. This check was my rebate.

The PPACA requires an insurer to issue a rebate to each client if it does not spend at least 80 percent of the premiums it receives on health care services. Allowable services include actual medical claims, activities to improve patient safety, and efforts to improve health care quality. The other 20% may be used for administrative costs, salaries, advertising and agents.

Last year my insurer, Anthem Blue Cross Blue Shield spent only 79.70% of a total of $340,647,389 of premium dollars on health care. They had to issue rebates since they fell .30% short. My check, my share of this windfall was $7.90.

I think I’ll go to Vegas.



Photo credit - Jeff Bogart

Saturday, September 26, 2015

He Forced The Blind To See

Boehner pic

Above is my picture of Speaker of The House John Boehner. It is an empty wall. John Boehner is consistent, bland, a blank slate perfect for you to project your darkest fears. John Boehner is everything you don’t want him to be.

The left viewed him as a right wing ideologue and political hack, especially in the early 1990’s. He was one of the Gang of Seven that helped to take control of the House. But in recent years the new right and true believers have cast him as a villain, a compromising “Squish”.

Human beings are always more complicated than the easy caricatures.

This link is to the Pope addressing a joint session of the U.S. Congress. Sitting behind the Pontiff, coincidentally, are the two highest elected Catholics in U.S. history. And it must be noted that both men, Vice-president Biden and Speaker Boehner, are devout Catholics. This is one of the most important moments in their lives. It was John Boehner who invited the Pope.

John Boehner. Most of us know John Boehner as the guy who passed out checks on the floor of the U.S. House of Representatives, or as the first person of color (Orange!) to serve as Speaker, or as the Great Crier.

But John Boehner is more than that. He is a cloth coat Republican. There are plenty of stories of his upbringing and early life spent, starting at the age of eight, working in the family bar. He does possess core beliefs and values. He is also capable of hiding those values and principles.

The easy example is Obamacare. Congress has voted over fifty times to repeal, defund, or emasculate the Patient Protection and Affordable Care Act (PPACA). The vast majority of those votes were simply for the record. These were politics at their most cynical. The Senate cast its last meaningless vote in July. The House will have to schedule another after Christmas at the latest.

But Boehner and Senate Majority Leader Mitch McConnell don’t want a repeat of 2013. They allowed the unrepentantly cynical Senator Ted Cruz (R-TX) lead the true believers to shut down the government over Obamacare. What a mess. And now Cruz, et al want to shut down the government over Planned Parenthood.

It is one thing to fake a fight over Obamacare. It is quite another to be forced, as he inevitably will be, to keep our government working by resolving the funding of Planned Parenthood. John Boehner, an institutionalist, did not sign up for this fight.

So there was Catholic, Human, Speaker of the House of Representatives John Boehner sitting behind his Pope, a man who knows what he believes and lives what he believes. One can only imagine the quiet reflection, the silent confession of the moment. John Boehner could no longer pretend that he didn’t know the consequences of his actions, the cynicism he has sown over 20+ years in Washington.

The Pope forced him to see himself.

Let us take a moment to wish the Speaker well. Let us also cut through the fog and see the reality of the PPACA.

As recently as two weeks ago I was approached by a banker who asked how a Republican President would eliminate Obamacare. I explained, again, that we aren’t going back. In ways big and small our system is forever changed. So if you are holding out, in some quixotic protest, from signing up for health insurance, get over it. The Shared Responsibility Payment (Tax) is too high to ignore.

It is time to ask your representatives, both Democrats and Republicans, how they will fix the PPACA and make it better. There are serious bills floating around Washington. Our representatives will be reviewing how long we can keep the policies that were purchased prior to 2014, how large is a small group, and which employees are really full-time and need to be covered. These and other tweaks affect all of us. Now is the time for real votes and serious collaboration. We can no longer afford cynical politics.

This has been an important week. For Jews, we had Yom Kippur, The Day of Atonement. And our Catholic friends have witnessed a miracle. The Pope forced a blind man to see.



Friday, August 28, 2015

A Shameless Plug


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 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.


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

            $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.


Sunday, August 9, 2015

Did You Forget Something?


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.’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.



Monday, July 27, 2015



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.



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.


Sunday, June 28, 2015

Celebrations - Both Public And Private


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 and moved forward. Now we have millions of Americans across the country covered by subsidized insurance. That was the reality the Supreme Court faced.


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?


Photo credit - ME!

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.

Friday, May 22, 2015

The Blind Men And The Elephant



“You have no idea”, the doctor muttered beneath his breath. He repeated the comment. “You have no idea”. Realizing that his statement had had little impact, the doctor decided that a stage whisper might be more effective. “None of you have any idea”. Success! He had our attention. It appeared that it was up to me to ask him what he was talking about.

The doctor explained the new reality of hospital emergency room care. E/R units, equipped with suites of examination rooms, were now limiting patients for a specific period of time, 13 to 16 hours, to maximize charges. If the patient’s conditions didn’t warrant admission, he/she was sent home. It didn’t matter if the clock ran out at 2 PM or 2 AM. When 16 hours hit, the patient was cut loose.

Payment dictates care.

The doctor is a first person observer of how the new law, the Patient Protection and Affordable Care Act (PPACA), has altered the delivery of hospital based care. He declared himself an expert on the PPACA.

* * *

I got a call from a chiropractor. His patient, one of my clients, was no longer covered for indefinite once a month visits. The government (Medicare) has sharpened the definition of medically necessary. The insurance companies quickly followed. Conditions need to be clearly defined and treatment plans must have a beginning, a middle, and a predictable ending.

The chiropractor is a first person observer of how the Patient Protection and Affordable Care Act has altered the delivery of ongoing care. He declared himself an expert on the PPACA.

* * *

The psychiatrist described her newest challenge. Treatment might be covered by Medicare and the insurers, but the tests to determine the most effective form of treatment might not. What’s covered and what’s not seemed like a moving target. The culprit had to be the PPACA.

* * *

I am reminded of the story of the blind men and the elephant. In the ancient Jain version, six blind men are asked to describe an elephant. They each feel a different part of the animal. Each is convinced that he, and he alone, understands the nature of the beast from his limited contact.

But the elephant is more than just the one part each encounters.

Insurance agents are first person observers of the PPACA. We see who can now access and afford insurance and who has been exiled from the market. We talk with doctors and hospital administrators. We fight with our insurers over claims. In February I was in Washington to meet with members of Congress and last week Columbus to talk with our representatives in the Ohio House and Senate. But like my friends the doctor, the chiropractor, and the psychiatrist, we too are simply describing the parts of the elephant we’ve encountered.



Monday, May 11, 2015

Psst, Would You Like To Hear A Secret?

Mayfield Heights-20150511-00515

Senator Ron Johnson (R-WI) has a secret. The secret is that he is a realist. As such he has to balance competing interests on a daily basis if he would like to keep his job. And yes, he really wants to keep his job.
  • The most vocal members of his party want to repeal Obamacare (The Patient Protection and Affordable Care Act) immediately.
  • Americans, even Wisconsinites, seem evenly divided between repealing and reforming the new health care law.
  • Millions of Americans have directly benefited from key provisions of the law such as Open Enrollment, coverage for Preexisting Conditions, and the Tax Credit Subsidies.
  • The Supreme Court will rule on King v Burwell in next month. There is a very real possibility that the court may eliminate the subsidies for those Americans who purchased coverage through the federal exchange ( as opposed to a state run exchange.

The Supreme Court may help the coyote catch the roadrunner.

Senator Johnson has a solution. He has crafted a plan where Americans would keep their new coverage, and more importantly their tax credit subsidies, until after the next election. By kicking the can down the road till 2017 he solves two problems.
  1. It is after (he hopes) his reelection
  2. A new Republican president will be able to put forward a real plan.
Are you interested in the details? Do you what to know about the elimination of the individual mandate and other items on the Republican wish list? This post provides links the The Hill and other publications. Just don’t waste any time looking at the Senator’s website. There is nothing to be found there. See, this plan is a secret.

Senator Johnson’s most vocal constituents on the right can’t stomach anything less than complete repeal. And his constituents on the left will treat the Johnson plan like a piñata.

Senator Johnson isn’t alone. Senators Orrin Hatch (R-UT) and Richard Burr (R-N.C.) and Congressman Fred Upton (R-MI)are already touting the second version of the Patient Care Act. According to Forbes, it’s terrific. Much like the Johnson plan, details, the real specifics of how this will affect you, are hard to come by. Their Press Release, however, is filled with glowing generalities and buzz words.

The Hatch plan solves many of the Republican issues with Obamacare by giving them new names. Don’t like the Cadillac Tax? The Hatch plan reduces “the distortions in the tax code that drive up health care costs (by) capping the exclusion of an employee’s employer-provided health coverage”. Hate the Tax Credit Subsidies? The Hatch plan would “Empower Small Businesses and Individuals with Purchasing Power (by providing) Targeted tax credit to buy health care”.

None of this is on Senator Hatch’s website. There just isn’t space for stuff like that. Besides, it’s a secret.


Monday, April 20, 2015

The Disqualifier

Asking permission


The couple desperately needed health insurance. Their current health policy, purchased through COBRA, was about to end and the woman was pregnant. She was a former banker and he was a private money manager. Even though I had found a way to solve their problem, they still had one question to ask me before they would allow me to help them.

“What type of annuities do you sell”?

There were some really terrible annuities on the market twelve years ago and they viewed the sales of these products as a disqualifier. It wasn’t a problem for me. I didn’t sell any annuities, the good or the bad ones. They are still clients.

We all have disqualifiers, reasons why we won’t do business with certain people or companies. Some are logical. Some aren’t. Some, like the example above, speak to an individual’s honesty and professionalism. And some disqualifiers are simply excuses covering a darker motivation.

This edition of Health Insurance Issues With Dave will address my Number 1 disqualifier – REFERRALS.

The insurance companies are under intense pressure to control health care costs. The Patient Protection and Affordable Care Act (PPACA) has instituted a number of changes in the marketplace. Many of these changes have negatively impacted the way the insurers price and market their products. The very design of the new policies can, at times, seem counterproductive. Finding a way to control costs is a major priority. Many insurers have embraced the concept of requiring referrals.

How does this work? When you purchase a policy through some carriers you will be required to name a Primary Care Physician (PCP). We are used to this procedure with a Health Maintenance Organization (HMO) such as HealthSpan, the former Kaiser Permanente. But in this example we are talking about a traditional network driven PPO (Preferred Provider Organization). It has been about twenty years since this was common in our area.

Your Primary Care Physician serves as your health care quarterback. You will need a referral from him/her to have any treatment by a specialist, lab, or facility covered by your policy. No referral – no coverage.

Your first question might be, “How much will my family doctor be paid for this additional responsibility and paperwork?” The answer is NOTHING. The government is projecting a shortage of over 20,000 primary care doctors in the next five years. More and more services are being provided by physicians’ assistants and nurse practitioners. Weighing down physicians with uncompensated paperwork is not a good idea.

What happens once you get your referral? Let’s skip the issue of fighting to be referred to the doctor of your choice. We’ll pretend that you have diabetes and that your doctor (Smith) is willing to refer you to your family’s endocrinologist (Jones). Dr. Jones conducts a thorough examination and decides that he needs a few more tests and that you should see the ophthalmologist (Swenson). Dr. Jones isn’t authorized to refer you and you can’t just make an appointment. If you want the visits covered you will need to return to Dr. Smith to secure another referral. And another. And another.

Is the insurer hoping to control costs by eliminating unnecessary doctors’ visits and tests or is the goal to sidestep the payment of unauthorized care? That’s what it looked like the last time this practice raised its ugly head.

You are your best advocate. You should be in charge of your health care.

I refuse to market any non-HMO policy that requires a referral to see specialists. Many of these policies are purchased by the unsuspecting public through It is very difficult to determine whether a policy requires referrals if you are buying a policy on the government’s exchange without an agent present. Too many will not find this out until their claims are denied.

I see the problem as a sin of omission rather than a sin of commission. But sin is sin. It’s a disqualifier.


Sunday, March 22, 2015

Another Bite Of The Apple

Apple 2

Are you feeling left out? Do you long for the warm afterglow only experienced by the properly insured? Are you ready to come in from the cold? If you answered YES then you may be in luck. The federal government has created a Special Enrollment (SEP) just for you.

This new SEP ends April 30, 2015. This will be the last chance for many individuals and families to purchase health insurance coverage for 2015. To qualify you must:
  • Currently be uninsured for 2015
  • Filed your 2014 tax return and paid the Patient Protection and Affordable Care Act (PPACA) penalty for being uninsured in 2014
  • State that you first became aware of the tax penalty while completing your 2014 tax return
Policies may be purchased on and off the Exchange.

Many of my clients have done the math and have opted out of the PPACA. They are purchasing less expensive short term major medical policies and will pay the tax penalty if assessed. Others will jump at this opportunity to finally purchase compliant coverage.

There won’t be another chance.


Saturday, February 28, 2015

Shopping At Garage Sales In Alternate Universes

Senate cufflinks

February 2015 – Washington DC

There are only two groups of tourists to our nation’s capital in the dead of winter, 8th graders with their teachers and chaperones and constituent visitors otherwise known as unpaid lobbyists. It has been a long time since I had an 8th grader, so you know why I was wandering around the halls of Congress last week.

The National Association of Health Underwriters (NAHU) is the health insurance agents’ trade group. NAHU holds a conference annually in Washington and I was here to listen to regulators, members of the Administration, and members of Congress address hundreds of agents from around the country. I have to admit that I was impressed that not only did the new CEO of the Federal Marketplace ( come to talk with us, he even answered questions and promised to follow-up on specific issues.

And that was why we were in Washington. At the risk of sounding almost altruistic, our main mission was to make the Patient Protection and Affordable Care Act (PPACA) work better for our clients. Each of us has more than a few stories of clients who have benefited by the new law. But, we can also cite plenty of examples of families and businesses who are no longer adequately insured due to correctable problems with the law and its administration. Things have gotten better. Last year was a disaster. But I still spent almost 5 hours online and on the phone February 15th to enroll one family. There is plenty of room for improvement.

Improvement requires the assistance of Congress.

I had appointments with members of both the House and the Senate in their offices. These are always a crap shoot. Sometimes you get to meet with the elected official. Sometimes it is the legislative aide. Some are prepped and ready. And some are meeting with you out of courtesy. There are only so many minutes in the day, only so many constituent visits our elected officials and staff can attend. The halls were filled with Disabled American Veterans, a well coifed group of broadcasters, and a contingent of the blind. The realtors and countless other groups, some with identifying name tags and some just with nice suits that were last worn at a relative’s wedding, preceded or quickly followed us into every office. And each group came with a perfectly reasonable request, one of remarkable fairness that couldn’t help but move our country forward.

Our big get was a bi-partisan letter, authored by Congressmen John C Carney, Jr. (D-DE) and Daniel Benishek (R-MI), to Secretary Sylvia Burwell of the Department of Health and Human Services. The key provision was the request to “create a dedicated customer service hotline for certified agents and brokers, navigators, marketplace assistors and state health officials to ensure that problems with enrollment are addressed quickly and effectively.” In other words, we want to be able to call someone who has been trained to understand the issues and empowered to fix a problem once discovered.

One legislative aide finally asked me what else we wanted.

There are members of Congress, in both parties, who are dedicated to constituent service and have instructed their staffs to solve problems. This blog has noted the help I have received from Senator Sherrod Brown’s (D-OH) office. Other Democrats have little to no interest in problems. They only want to hear success stories. And some Republicans are collecting tales of woe.

I was in a Republican’s office (Don’t ask who!). I was just one of seven in our delegation and I can’t even tell you why I had been included. But I was there and my main job appeared to be to nod my head authoritatively. I can do that. His constituents brought a couple of important examples where the law of unintended consequences had caused significant harm to individuals and small businesses in his district. He welcomed their report and arranged for his staffer to collect more. It was at this point that I realized that he had no interest in solving any of these problems, just amassing a collection, a weapon for future debates and campaigns.

This was not the time to express my outrage. (Cue up Mr. Cunix goes to Washington.)

I pushed my thumbnail hard into my index finger and looked around the room. I saw awards and tchotchkes, the kind that you might find in most offices, and I was beginning to worry that I wasn’t going to be sufficiently distracted. And then I focused on a picture on the wall right behind the Congressman. There were eight Republican Presidents playing poker! Really. Teddy Roosevelt was glancing with admiration at Richard Nixon. Reagan had a Bush on either side of him and Ike was standing in the background. Abraham Lincoln had his back to us. I don’t know if Abe Lincoln would play poker with Ronald Reagan or Richard Nixon if he had chance to come back to the living, but I do know that he would always sit with his back against the wall. The name of the picture is Grand ‘Ol Gang.

Lincoln Memorial

My favorite Lincoln

The picture summed up everything I needed to say about this Congressman. Republican first. Not problem solver. Not legislator. But he is not alone. There is a Congressman representing a district only a few hundred miles away with the corresponding picture of Democratic Presidents. True Blues has Lyndon Johnson leaning over Harry Truman to talk with Woodrow Wilson. JFK appears to be watching Jimmy Carter play poker with FDR and Bill Clinton. And the picture’s owner is just as partisan, just as dedicated to his career.

Library of Congress

Library of Congress

Walking the halls of the utilitarian office buildings of the House of Representatives or the majestic buildings of the Senate, the Capitol, or the Library of Congress I began to wish that our elected officials simply aspired to be worthy of these buildings and the ideals that built them. But these Congressmen and Congresswomen are no different than the men and women we revere from 50, 100, or even 150 years ago. They had moments of greatness and reprehensible pettiness. They lead and they followed. Some of the giants of the Senate were not necessarily thought to have been giants in their own time. Our grandchildren may one day be taught that George W. Bush and Jimmy Carter were great visionaries. I doubt it, but it could happen.

And with that I joined a couple of my peers in one more meeting with a legislative aide. She (the staffer) was fully up to speed on the issues and actually kept the broadcasters waiting. And there were no poker pictures on the wall.


Tuesday, February 10, 2015

Freeze Tag


Today’s edition of Health Insurance Issues With Dave may provide relief and cause panic. Many of you will be relieved to know that the title is not a Frozen reference. This is a Disney-free zone. And way too many of you will become panic-stricken as I remind you that the Open Enrollment Period ends February 15th.

If you are under 65 and are not covered by the government or an employer sponsored group health insurance policy, you will have until Sunday night to either change your existing coverage or to purchase a policy. A great national game of Freeze Tag begins at 12:01 AM Monday morning. You are where you are until the government tags you again on November 15th.

Are you ready? Are you in the right place? FREEZE


Sunday, February 1, 2015






We’ll return to Health Insurance Issues With Dave after this quick ethics test:

You are standing at the corner of Mayfield Road and SOM Center at 2 AM. The light is red and the crosswalk sign is against you. There isn’t a car in sight.

1. Do you cross the street?

  • Yes
  • No
Three people cross the street, two not even bothering to come to the corner. A police car drives by and doesn’t stop to even warn the scofflaws.

2. Do you cross the street now?
  • Yes
  • No
The above is brought to you courtesy of the U.S. Government and your friends at the Internal Revenue Service. Would you like to rethink your answers?

The Individual Mandate is a core element of the Patient Protection and Affordable Care Act (PPACA). The requirement of universal participation is an important component of any serious proposal that would extend coverage, without underwriting, to everyone. It is an unfortunate part of human nature that many people would opt out of coverage until 5 minutes AFTER they suffered a major accident or experienced chest pains.

It is only under the threat of penalty that some people feel compelled to act responsibly.

Americans were required to have health insurance in 2014. And not just any insurance. Compliant, approved insurance. The penalty free options for someone under 65 in 2014 were:
  • Employer provided group health policy
  • Individual policy purchased on the Exchange with an effective date of January 1, 2014 or later
  • Individual PPACA compliant policy purchased off the Exchange with an effective date of January 1, 2014
  • Individual policy purchased prior to March 2010 – Grandfathered
  • Individual policy purchased with an effective date between March 2010 and December 31, 2013 – Grandmothered
  • Medicaid, Medicare, or Veterans Administration provided
  • Granted a Hardship Waiver from the government
The Grandmothered policies are the special contracts that fall under the “If you like your coverage you can keep it” compromises of 2013 and the spring of 2014. We are good for another year on most of them.

Those are acceptable options. If you have one of these you don’t have to pay the Shared Responsibility Fee that I just mentioned in the blog and client update last week. Are you in compliance?

Line 61 on Form 1040 is of little help. Health care: Individual responsibility (see instructions) Full-year coverage (___). Unless you purchased a policy on the Exchange, the government has no idea whether or not you had a compliant policy. We just learned this past week that the insurers will not be providing Form 1095B confirming compliant coverage in 2014. As UnitedHealth Care stated in an update to agents:
“The IRS has indicated that taxpayers will not need specific documentation to “check the box” in good faith and avoid the shared responsibility payment.”

The IRS has to trust us to voluntarily confess non-compliance.

This is not a big surprise. As I noted several months ago, the forms needed to verify compliant coverage have yet to be created. Too complicated. Too many moving parts.

Did you have any health insurance in 2014? Did you save money and purchase short term coverage for the year? Time for that ethics test. Will you turn yourself in when the possibility of detection is almost nil?

Instead of simply waiting a year to impose the Individual Mandate, the Obama Administration has chosen to collect from the intensely honest or the poorly advised. And in the end that is the real ethics test. And the government failed.


Friday, January 23, 2015

January 2015 Update

Punta Cana 2015

We are now two-thirds through this year’s open enrollment period. This blog and client update will be published the week of January 19th once I return from vacation. I am actually writing it on the 15th, the February 1st cut-off, from the beach of Punta Cana. This promised to be the best week to get away. The January 1st deadline, December 15th, is the new April 15th of health insurance. February 15th, the last day to apply for open enrollment coverage in 2015, will also be very busy. Today? Not too bad.

Shared Responsibility Fee (The Tax you pay if you don’t have insurance) – It’s here. It’s now. And it will be enforced. If you don’t have an official Patient Protection and Affordable Care Act (PPACA) qualified plan, a grandfathered policy, or in some instances a grandmothered contract, you are subject to this tax. For 2015 it will be $325 or 2 percent, whichever is higher.

Tax? So What! – According to a recent Gallup Poll, 35% of all uninsureds have decided that paying the Shared Responsibility Fee is better than buying the insurance. Another 30% didn’t realize that they may be forced to pay this tax.

Short Term Major Medical – Against all odds, the insurers are doing record business selling non-compliant short term major medical policies. These policies do not cover preexisting conditions and Preventive Care. But, they are significantly cheaper and may have a deductible and out-of-pocket maximum that is thousands less than the standard PPACA compliant policy. These policies also don’t suffer from the new, restrictive networks found with many of the major carriers. It is hard to argue with a healthy 40 year old woman who wants to pay less when she purchases the policy and much less if she has to use it.

Pediatric Dental – All policies purchased off the Exchange must include Pediatric Dental whether or not any children are to be covered. Companies like Medical Mutual of Ohio include this at no charge for adults. HealthSpan and InHealth require a separate application for a no-charge Delta Dental contract. Others have charged adults extra much the same way that men now have coverage for maternity. The new Pediatric Dental includes medically necessary orthodontia. The definition of medically necessary changes daily. I’m waiting to see a claim paid before I tell you that this a real benefit and not just fluff.

Changes – A year into this and the biggest flaw of this system remains the ability to make any changes to an existing Exchange policy. Your insurer cannot add on your new baby, cancel your policy, or even change your address. Everything must go through the Exchange. Whether you go online or call the phone center, you must still reopen the application and ALL BETS ARE OFF. There is no guarantee that your subsidy, or even your eligibility won’t be jeopardized by the call.

I have called the national frustration number for clients. We have verified, with the clients sitting in my office, that I am their agent, only to have the transaction muffed and my name disappear from the system. This makes resolution that much more difficult a week or two later when we discover that the problem has not been fixed.

Winners – Unhealthy individuals, especially singles in their fifties earning approximately $30,000 a year, are some of my biggest winners. Families with two or more children earning well in excess of the subsidy limits are also doing well under the new law.

Losers – The people most adversely affected by the PPACA are middle income workers where someone in the household has employer sponsored health insurance. The rest of the family faces higher premiums and no assistance. In truth, healthy Ohioans, even with a subsidy, are being priced out of the market.

I have been monitoring the progress of the PPACA through my clients, news reports, and Social Media. I have found that most of the news follows a specific agenda – for or against the PPACA = for or against President Obama. Social Media, especially Facebook, usually includes posts from the extremes, the incredibly unhealthy guy who now has amazing coverage for next to nothing or the young family forced to choose between unaffordable coverage or a Medicaid plan that may, or may not, send them to unfamiliar doctors and cross-town hospitals.

My clients, and those of my peers, have experienced the full range of benefits and problems of a new system created by a poorly written law and regulated by well-meaning if not always competent bureaucrats. And as much as any failure frustrates us, we must admit that we can’t turn back the clock to 2009. We must make it work for every American.

Insurance agents from around the country are scheduled to meet with members of Congress next month in Washington. I have found similar meetings in Columbus with our state legislature both rewarding and frustrating. This trip to the nation’s capital is worth my time and money if we can solve just one PPACA issue.

Feel free to comment on this post or to send me a private message if there is anything you would like me to convey to our elected officials during these meetings.

We will get through this together.