Thursday, March 10, 2016

Platinum, Gold, Silver, Bronze, Lead



The Metal Tiers were a key component of the Patient Protection and Affordable Care Act (Obamacare). The idea was to force all policies (square pegs) into four levels of coverage (round holes). The metal tier would allow you to purchase a policy that would fit your needs. Each described the percentage the policy would pay of your overall healthcare claims.

Platinum – 90%
Gold – 80%
Silver – 70%
Bronze – 60%


Are these percentages accurate? Do they really represent 90%? 60%? Who knows? If you ask 5 people you will surely get 7 answers. Part of the problem is that everyone, and I do mean everyone, is engaged in the constant struggle to recreate reality. The pricing, the policies, the benefits, the covered doctors and hospitals, and even the insurers change annually. There can’t be an apples to apples comparison when 2014’s apples were replaced by kumquats in 2015 which were replaced this year by frozen pizzas.

The PPACA included an annual cap for out-of-pocket covered expenses. That cap has increased each year. In 2016 it is $6,850 for an individual and $13,700 for a family. This number includes the most you, the consumer, can spend on the deductible, copayments, and co-insurance during the calendar year. It does not include the premiums you pay.

The 2017 maximum out-of-pocket will be $7,150 for an individual and $14,300 for a family. Those numbers apply to Platinum, Gold, Silver, and Bronze policies. But if you have a family, especially a family that has ongoing health issues, the possibility of facing $14,300 of exposure (plus premiums) doesn’t feel like Platinum, Gold, Silver, or Bronze. It feels like lead. And many of these policies will be as valuable as lead pipes in Flint.

The health insurance market is changing rapidly. I can’t find a Platinum level policy in Cuyahoga County. There are only a few available in all of Ohio. Gold level policies are disappearing, too. At some point the metal tiers will need to be redefined or a couple of new ones will have to be added. Or, we will change to letters, such as Tier A, Tier B, Tier C, etc…

Because when all else fails we can always fall back on rebranding.


Thursday, March 3, 2016

Notes On Napkins

Trump health plan


It was a warm spring evening. Warm enough for the guys to sit on the whiskey bar’s patio. The group, a restaurateur, an insurance agent, a physical therapist, a scrap metals guy, and an attorney (isn’t there always an attorney?) were solving the world’s problems over adult beverages, mostly Scotch, and good cigars. But their real focus that evening was Korea. The insurance agent took notes on a couple of napkins as the group formulated a simple, common sense solution to Kim Jong-un and his nuclear paranoia. The only thing these five guys knew about Korea was a good place to get kimchi, but that didn’t deter them.

Last week’s post noted the ignorance of Donald Trump, specifically when it came to the Patient Protection and Affordable Care Act (Obamacare). I was not the only person to notice. Mr. Trump’s opponents, especially Senator Rubio, focused on the emptiness of his rhetoric at last Thursday’s Republican Debate. Even Mr. Trump’s most ardent supporters had to admit that he looked clueless and unprepared. And thus the Healthcare Reform To Make America Great Again plan was created. (That is a real link to the Trump plan)

This blog has reviewed each of the Republican alternatives as they have been released. The Bart Simpson Award for Spectacular Underachievement was presented to Scott Walker last summer for his fifteen page term paper. We have our first entry for 2016.

I want you to imagine Mr. Trump, his shadow Chris Christie, and a few advisors sitting on the patio in Palm Beach. The glasses are full of orange juice and unsellable bottles of Trump Vodka. The ideas are coming fast and furious.

Scotland! We love their health care.

No Americans dying in the streets.

We have to get rid of the artificial lines around the states.

Mandates! OK, maybe not.

No one had time to get a laptop or even a notepad. A junior staffer stopped refilling the glasses and started to take notes on some napkins. And that is how we got the Healthcare Reform To Make America Great Again, two and a half pages of napkin fodder.

The opening paragraphs were borrowed from all of the previous Republican offerings. Obamacare is blamed for all of humanities ills. Words like economic burden, higher premiums, and partisan litter the preamble with the promise that a complete repeal would bring the exact opposite. Obamacare would be blamed for global warming if the Republicans accepted climate change. The opening paragraphs also beg for help from Congress, the first time Mr. Trump has acknowledged that he isn’t officially running to be our dictator.

Here are the seven reforms that the Trump Administration wants Congress prepared to pass on the first day he is in office:
  1. Completely repeal Obamacare and eliminate the individual mandate. “No person should be required to buy insurance unless he or she wants to.”
  2. Allow the sale of health insurance across state lines as long as the plan purchased complies with state requirements.
  3. Allow everyone to deduct their health insurance premiums. Suggest to the various states what they should do about Medicaid and coverage for the poor.
  4. Legalize Health Savings Accounts (HSA)
  5. Require price transparency.
  6. Send the states money for Medicaid (Block Grants)
  7. Allow foreign companies easier access to sell prescriptions in the U.S.
“The reforms outlined above will lower healthcare for all Americans.”

That’s it. I know that you are more surprised by what is missing than what little is there. There is no mention of preexisting conditions. None. What do we do with the people who are now covered who wouldn’t be if the insurers had a choice? Your guess is as good as mine. How could any of this change happen? Don’t ask Donald. He ran out of napkins.

Unfortunately, I don’t have the luxury of running a fact-free presidential campaign. Neither do our friends at Forbes or at the home offices of the major insurers. My clients are already calling and asking how they would be affected by the Trump plan. The quick answer is that they wouldn’t be impacted at all. The seven bullet points simply prove that the candidate doesn’t care about their issue.

We’ve discussed points one and two. Deducting health insurance premium (point 3) is really important to people who want to pay less taxes. It is meaningless to people who want help in paying for their premiums. Donald and his team appear to be confused about the difference between the FSA, Flexible Spending Account, and the HSA, Health Savings Account. You should know that BEFORE you release your paper to make America Great Again. And if we send the states Medicaid Block Grants, we will condemn millions of Americans to substandard care as the money is misdirected elsewhere.

There are times in politics when being attacked from the Left and from the Right means that you really are in a good place. The Healthcare Reform To Make America Great Again appears to be nothing more than random thoughts on a cocktail napkin. And Donald came up empty.