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.