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In the opening number of the movie Fiddler on the Roof the town Rabbi is asked if there is a prayer for the Tsar:
Sunday, December 29, 2013
Fiddler On The Roof
In the opening number of the movie Fiddler on the Roof the town Rabbi is asked if there is a prayer for the Tsar:
Lebisch: Rabbi! May I ask you a question?
Rabbi: Certainly, Lebisch!
Lebisch: Is there a proper blessing... for the Tsar?
Rabbi: A blessing for the Tsar? Of course! May God bless and keep the Tsar... far away from us!
With the disastrous rollout, rules and regulations being created on the fly and the President’s penchant for modifying deadlines, many of us in the insurance business have decided that we are happiest when Mr. Obama puts all of his time and efforts into immigration reform.
2013 was the year of the missing hero. There never seemed to be anyone in charge, anyone willing to be responsible, anyone who actually gave a damn about the American people and was prepared to work on our behalf. The year started with a last minute deal to fund the government and keep the lights on. But in an effort to cement the impression that ultimately we are all alone, the U.S. House of Representatives adjourned BEFORE addressing the need for emergency relief for the victims of Hurricane Sandy. That behavior would repeat itself throughout 2013. Only bills repealing Obamacare were guaranteed to reach the floor of the House.
And then the Republicans shut down the government. This, in of itself, isn’t the end of the world. Both parties have used this tactic with varying degrees of success over the years. What was particularly disheartening about this year’s government shutdown was that it was about Obamacare. The leaders of this fight exhibited as much forethought and preparation for this battle as the White House, the Department of Health and Human Services (HHS), and the Centers for Medicare and Medicaid (CMS) had in preparing to implement the law. This breath taking incompetence, this failure to lead responsibly, on either side, this idea that there will always be someone to clean up the mess has already impacted us in untold ways.
Insurance agents have a unique perspective on The Patient Protection and Affordable Care Act (PPACA or Obamacare). Regardless of political affiliation, our first priority is to get our clients insured. Nothing, not which insurer, not how we are paid, is more important than getting everyone covered. So we all have PPACA success stories. I have been able to get the very sick and the working poor health insurance that they would not have had. Eliminating health questions will allow Americans, some who are without insurance through no fault of their own, to purchase coverage. Completing the paperwork with someone contemplating surgery or in need of care is life affirming.
But this comes at a cost. And those same agents who are celebrating these client victories have also been sounding the alarm about those costs.
Picture a teeter-totter. For every cancer patient who will now enjoy a health insurance rate decrease there has to be at least one healthy person seeing a corresponding rate increase. One of my clients is rabidly anti-Obama. He actually came to my office in the summer of 2012 to campaign for Mitt Romney. Before I showed him his new, 2014 rates, I joked that if he saved over $1,000 per month he had to complete the last form in the packet and register as a Democrat. His savings was closer to $1,100 per month. Of course he accepted the new policy and the huge savings, but he realizes that his savings is at the expense of others. And no, he did not change his registration.
It is equally wrong to deny the gains or losses of the PPACA. Neither side has exhibited the least bit of intellectual honesty.
But honesty has been in short supply. People who can help you have also been scarce.
The agents knew that we were alone when we encountered the new federal registration system in August. Part was under one cabinet official with one computer system, while another part was under an entirely different division of the federal government with a different computer system. We got a full tour of government inefficiency and redundancy. It was a preview of the issues we would all encounter during the open enrollment.
The American public faced their own set of challenges. The PPACA gave us something new. Not an agent, but with more authority than our better trained secretaries, the PPACA begat the Navigator. I’ve talked to a couple of navigators. They knew next to nothing about insurance, networks, or the different policies. The Navigators aren’t prepared to help the mouse get through the maze to find the cheese. No, Navigators know just enough to drop the mouse into the maze and wish the mouse (YOU) “Good Luck”.
But the navigators weren’t the only folks complicating our lives this year. My friend Greg, who now lives in Florida, sent me an email about his difficulty in finding new coverage. As NPR reported, there were plenty of people willing to exploit the weakness of this law.
As Tevya might ask, “A health insurance agent in 2014”? Between the government that wants to replace us and the insurers that hate to pay us and a public that only appreciates us when they really need us, it sounds a little crazy. But here in the U.S. we all have our part to play. Much like a fiddler on the roof, each of us is trying to scratch out a pleasant, simple tune without breaking our necks. It isn’t easy. You might ask “Why do we stay up there if it is so dangerous”? Well, we stay because it is what we do.
And as our health care system changes, our lives, yours and mine, have become as shaky as… as… as a fiddler on the roof!
DAVE
Monday, December 16, 2013
Buy 11, Get 1 Free!
Some people just know how to shop. You and I may pay retail, but they always seem to find the best deals. And if they have to cut a corner or two? Well, they’ve got great scissors.
We are in the middle of our first open enrollment under the Patient Protection and Affordable Care Act (PPACA or Obamacare). Applications received by December 23, 2013 will generate new policies as of January 1, 2014. Preexisting conditions will be covered. There is no requirement of prior coverage.
Our current policies, operating under the old set of rules, have a 30 day grace period. It didn’t take long for many of my sharpest clients to realize that paying for December is now optional. If they get sick or injured in December, they will pay their premiums and file their claims. If they don’t have a claim in December, they will let the old policy lapse and start anew in January.
Ethical? Of course not. Legal? You bet. In fact, this is just one more step in our inevitable march off the cliff. Shorting the insurers and making private major medical health insurance unsustainable are part of the campaign that will lead us to Single Payer.
The Department of Health and Human Services (HHS) isn’t just writing rules and regulations on the fly. Last week, in a conference call for journalists, Director Kathleen Sebelius and her team revealed a new set of fixes and recommendations.
All of these recommendations are designed to make the transition to the PPACA smoother by bending the rules at the expense of the insurers.
The government now expects the insurers to cheerfully accept the initial payments as late as January 1st. There is even a push to move that initial due date through the first week or so of January. And next year’s grace period will be 60 days. Please don’t expect that same flexibility from the IRS.
Health insurance policies may include lists of Preferred Providers, doctors and hospitals participating in a network, and prescription drug formularies, lists of covered drugs. HHS is asking the insurers to bend (IGNORE) their own rules during the transition. Is this push out of concern for sick Americans or an effort to avoid more horror stories on the 6 PM news?
The answer is obvious. This has never been about sick people. This has always been about money and politics. The doctors, hospitals, and drug companies want our money. The politicians want our money and our votes. Health is hardly a consideration.
So whether they want to or not, the insurers are having a sale. I’m going to pay my December premium. I’m just that way. Buy you? You may choose to pay for eleven and get one free.
DAVE
Monday, November 25, 2013
The Defense Rests
It is exhausting. This choice. This job. This desire to craft a non-ideological, pragmatic path is taking all of my energy. Confronted daily by people who either cannot, or will not, see the full picture that is the Patient Protection and Affordable Care Act (PPACA or Obamacare), I find myself calming the fears of its detractors or clarifying the rules to its biggest supporters. To the right, and the righter than right, I find myself defending the law, or at the very least, the need for change. Defending the insurers from the left could be a full time job in of itself.
Randy (name changed) called Friday. He wanted to know when they were going to cancel his group health insurance policy.
Why would Medical Mutual cancel your company’s insurance?
Because my policy doesn’t cover any women or children.
But you don’t have any female employees, right?
Yeah, but they’re gonna cancel me!
OY, Randy, you’ve been watching FOX again.
It took fifteen minutes to reassure Randy. Now, no one on FOX really said that a small business would lose its health insurance if there weren't any women or children on the policy. That’s silly. But the daily barrage of negativity, conspiracy theories, and half-truths take their toll on the viewers. One day you’re a concerned business owner. The next you are trying to get one of your employees to get married so that you can retain your group coverage.
It doesn’t get any better on MSNBC. With neither an ounce of irony nor embarrassment, the outpost of the left gives us Howard Dean, the former governor of Vermont. I’m sure that an extensive GOOGLE search might find an instance when Gov. Dean knew what he was talking about. I’m just positive that none of his pronouncements about health insurance or the PPACA have any basis in reality.
For example, Governor Dean was recently discussing the disastrous roll-out and the policy cancellations. He was on Morning Joe and several other shows. He opined that all the President had to do was to hire a bunch of unemployed kids, put them in a call center, and have them ring up everyone whose policy had been cancelled. The kids could enroll everyone into Obamacare!
I doubt that approach would be welcome in Vermont, a state with less than half the population of Greater Cleveland. I know that wouldn’t fly here. Who explains the policies to the “kids”? Vermont may have only one or two insurers and only a few options, but Ohio, California, and any other state that has an actual city or two will have multiple insurers and dozens of choices. But on one has ever explained insurance, or economics, or city life to Governor Dean. And there is absolutely no reason to do so now.
40 vs. 5
The PPACA was sold to the American public as a universal win. Everyone would get better, more comprehensive health insurance for a lower monthly premium. This blog has repeatedly pointed out that that was not possible. The airwaves are now filled with the horror stories of cancelled policies and jacked-up premiums. The right emphasizes every problem, real or imagined. The left has a new argument – Isn’t it OK to inconvenience five million people so that 40 MILLION AMERICANS can now get access to affordable health care?
What a bunch of hooey. This wasn’t a Hobson’s choice. It wasn’t remake our entire system or do nothing to help the uninsured and the under-insured in our country. We could have accomplished much of that goal by expanding Medicaid. You don’t score many points by minimizing someone else’s loss.
I have watched my words parsed in the comment sections of Facebook and the AOL Patch. The attorneys and attorney wanna-be’s who troll for fights can’t tolerate civil discussions. One guy was convinced that all insurers will cancel their clients at the first sign of a claim. Another reader is positive that the PPACA is the harbinger of the Apocalypse. The extremes are so extreme. The middle is lonely and damn near empty.
For the record:
- Insurers pay claims. My clients have benefited from their coverage.
- The status quo was not sustainable.
- There is a kernel of truth in everything you see and hear on FOX and MSNBC. You need more than kernels. You need a meal.
DAVE
www.bcandb.com
Tuesday, November 12, 2013
Where Do They Bury The Survivors?
A plane crashes on the Mexican – United States border. On board were U.S. citizens, Mexicans, Brazilians, and three passengers from Argentina. Where so they bury the survivors?
It is a classic misdirect. A mental sleight of hand. You know the answer. We don’t bury survivors.
Sleight of hand is an art. The best practitioners can shake your hand while they lift your watch and wallet. The trick for us is to watch them at work without becoming a victim.
I recently received an urgent email. A client forwarded Newt Gingrich’s article, “Obamacare’s Marriage Penalty and Divorce Incentive.” Was this true? Is the President anti-marriage?
Newt Gingrich as the defender of the sanctity of marriage? Guard your wallet!
I won’t bore you with the numbers. The federal subsidies are based on the size of the family, the ages of the insured, and are factored on the federal poverty level. A married couple with one child doesn’t need 33% more income when they have a second child. Couples don’t need twice as much income as singles to pay for food and shelter.
Will a few people get divorced to get a bigger health insurance subsidy? Perhaps. Of course, that also means that these people will pay more state and federal income tax. These things have a way of balancing out in the end.
The bottom line is that Newt Gingrich knows that this is irrelevant. Newt would be campaigning against government waste and another inefficient entitlement program if the subsidies were calculated differently. It is just a sleight of hand.
We should, by now, be used to this from our politicians. Sometimes it is a mental misdirect. Sometimes it is a misstatement. And there are other instances when the politician tells the truth, technically, but what he/she said and what we heard are not even closely the same.
Example? My favorite is “If you like your policy, you can keep it. Period”. Balderdash.
I wasn’t in the room when the President and his advisors crafted that perfect slogan. “If you like your policy, you can keep it. Period.” So clear. So emphatic. So wrong. Did the President and his advisors intentionally mislead the country, or more likely, did we have a room full of people who had no idea what they were talking about?
- Over 80% of Americans get their insurance coverage through work. If you are one of them, you don’t choose your plan, your employer does. It is not up to you.
- Only policies on the books prior to the passage of the law and unchanged since that day, March 23, 2010, are grandfathered.
- How long can the insurers run two separate sets of books? Policies issued prior to March 2010 have one set of rules while new policies have another. Who pays the additional cost to maintain the old contracts and monitor compliance?
The President is shocked that many Americans are now losing their current policies and being forced into new, more expensive contracts.
There are some awful policies on the market that will disappear on January 1st. There are some policies that have a $25,000 or $50,000 cap. Those plans were cheap, but they did not really cover a major illness. However, about 11 million Americans are covered by comprehensive policies that will be cancelled in the next twelve months. These plans don’t conform to the new rules.
My policy is scheduled to end a year from now. Why? Because it doesn’t cover me for maternity. If nothing changes in the next twelve months, my premium will more than double next December. Of course I like my policy. And no, I can’t keep it.
The Patient Protection and Affordable Care Act (PPACA) will, eventually, help many Americans. But it would be foolish to dismiss out of hand those people who are angry or upset. You can’t just bury their fears with the survivors.
DAVE
Picture from the Passen Law Group www.passenlaw.com
Sunday, November 3, 2013
Crashed
Frank (name changed) is a successful attorney in his early 40’s. He lives in Greater Cleveland. On Friday he completed his health insurance application, hit the submit button, and watched the website crash. This message, in bold red and blue, flashed onto his screen:
| Application Wizard |
- We apologize but there was an issue with our system when submitting your application. If we were able to process your application, we will send you an email within the next hour and you will not need to do anything else. If you do not receive an email from us within the next hour, then please return to this site and submit the application to us again.
Alert the media! Contact Rush! Websites crash or are shut down for routine maintenance. No one died and no one got fired.
Anthem’s producer/applicant portal was down for about six hours. Frank’s application has been accepted and by the time you read this, he may have been approved.
The exchange roll out has been a mess. Even insurance agents, professionals long familiar with the complexity of working with insurers, the government, and the public, were surprised at how unprepared the government was for this vast undertaking. We even had advance warning. Agents have had eight years of Medicare Part D (Rx) and Medicare Advantage training, seven to nine wasted hours each August. And this year we were treated to the special training classes and tests to sell on the federally run exchange as detailed in You Put Your Left Foot In. CMM (Centers for Medicare and Medicaid Services), the agency administering the agent authorization process, is still having website issues.
This is a program designed by bureaucrats who know how to make things complicated but may have no idea how to make things work.
What has been lost in this P.R. disaster is just how irrelevant all of this has been. The most important thing to remember is that the new policies don’t start until January 1, 2014. Applications accepted on October 1st or December 10th still have the same effective date. Anthem Blue Cross is not going to run out of policies. You don’t need to be the first in line.
Of course, everyone with an ax to grind has jumped into the discussion. Online insurance marketers have “volunteered” to save the day and take over the process. If the federal government would only suspend common sense and a myriad of state and federal laws, an e-marketer could corner the market and restore order. Those offers have landed with a thud.
Equally self-serving have been the Republican members of Congress who have complained about the problems their constituents are having with the roll out. You can’t spend three and a half years actively trying to sabotage a program and then complain when it doesn’t work perfectly. And please, don’t shed tears for the sick and uninsured who are having difficulty enrolling in the now available coverage. There isn’t a Republican plan to cover any of these people.
There is a bi-partisan support to bump back the “Individual Mandate” for another year. Why force people to purchase insurance if the website is difficult to access? I’m surprised that this hasn’t already happened. Everybody wins.
- The Republicans score a moral victory. Being against anything President Obama favors enhances their campaign donations. Winning a meaningless battle shows activity.
- The Democrats show flexibility and are allowed, once again, to play the part of the martyr.
- Big business, the unions, and the insurers see this as one step closer to a Single Payer system. By now you are sick of hearing TV commentators talking about the Young Invincibles, the young, healthy Americans who must be forced into the system for it to work. If healthy people don’t sign up, the system devolves into a Death Spiral and implodes under its own weight.
The exchange website and all of its attendant issues aren’t our biggest challenge as a country. It is our lack of intellectual honesty that will be our undoing. Disorganized and unprepared, we are heading for a crash.
DAVE
www.bcandb.com
Sunday, October 20, 2013
The New Normal
Under the old rules, the underwriting rules we’ve lived by for decades, health insurance premiums were determined by risk. Healthy people paid less than those that weren’t. We asked questions such as:
Do you smoke?
What is your height and weight?
What medications do you take and why?
Do you smoke?
What is your height and weight?
What medications do you take and why?
The new rules under the Patient Protection and Affordable Care Act (PPACA) eliminate underwriting. The new rules have us charging everyone the same premium regardless of health. The only questions now are:
Do you smoke? (old habits die hard)
How old are you?
Where do you live?
Do you smoke? (old habits die hard)
How old are you?
Where do you live?
How is that working?
Angie (name changed) is a 55 year old owner of a successful home-based business here in Greater Cleveland. She purchases her own health insurance. Angie is not a preferred risk. Her $4,000 deductible HSA (Health Savings Account) policy was not rated Tier 1. Nor Tier 2. Tier 3. Tier 4. She wasn’t rated Tier 5. Nor Tier 6. Tier 7. Tier 8. Not even Tier 9. Angie, a few years post-surgery, was issued, after intense negotiations, at TIER 10. Her current premium is $482 per month.
How much will her premium be under the new system, a system that doesn’t ask health questions and doesn’t factor in previous illnesses?
HSA Qualified Policy Premium
$3,000 deductible $518.41
$6,000 deductible $369.63
Those numbers are real. Tier 10 is the new normal.
The new 2014 policies would provide Angie coverage for maternity, though at 55 she’s willing to accept that risk. Her current policy, issued in 2013, already has preventive care and an unlimited maximum benefit.
Much to the chagrin of some of the bureaucrats in Washington and the advocates around the country, the insurance companies, billion dollar corporations, understood who will be applying for health insurance in the next few months. The doors are being thrown open (well, the exchanges will work eventually) and these are the first applicants:
Our currently insured who have been highly rated
High risk clients covered by state mandated guaranteed issue contracts
Very unhealthy Americans who can't afford those guaranteed issue policies
Our currently insured who have been highly rated
High risk clients covered by state mandated guaranteed issue contracts
Very unhealthy Americans who can't afford those guaranteed issue policies
These people need affordable health insurance. More importantly, they need access to health care, but the PPACA does not necessarily meet that need. Many of the very people this law was meant to serve were surprised when I told them the price. Some were expecting free. Almost everyone thought for sure that the premium would be less.
The insurers have no interest in losing their existing clients. For some reason the people pushing the PPACA, the government and the advocates, thought that the insurance companies would dump their entire book of business into the new insurance pools. Sure this might allow the new clients to pay less initially, right up until all of the young and/or healthy dropped their coverage. Then what?
Local insurers – Medical Mutual of Ohio, Anthem Blue Cross, UnitedHealth One, etc… - are offering their existing clients an opportunity to renew their policies as of December 1, 2013. Sign a form and you get to keep your current policy until next December. What happens in December 2014? G-d only knows.
This is survival. The insurers are stocking the pond. In an effort to attract more 2013 business, major insurers have adjusted their underwriting. Anthem blue Cross has suddenly decided that maybe smoking isn’t that bad. Other companies have made similar short term changes.
Are you paying attention? If you are going to qualify for a major subsidy, if you are suffering from a serious, expensive to treat illness, or if you have had a debilitating accident, you may be significantly better off thanks to the PPACA. But if none of the above apply to you, then there is still a little time left to get in under the old system, to play by the old rules, to pay premiums based on your risk.
You have a small window before you become a part of the new normal.
DAVE
Sunday, October 6, 2013
Plotting Your Escape From The PPACA
William was damned near ecstatic. My client had a right to be. William is a 57 year old self-employed Republican pragmatist. He is also very unhealthy. There are no imminent threats. He just suffers from the kinds of things that causes health insurance companies to run away. William’s current health insurance, a $5,000 deductible HSA qualified contract, is $1,055 per month. On January 1, 2014 his premium plummets to $404.
William is now a huge fan of the Patient Protection and Affordable Care Act (PPACA). And if you, like Bill, are paying a lot of money for your health insurance due to your significant health problems, then the new law may save you a lot of money, too. Today’s blog is not for you.
Today’s blog is for those Americans who are reasonably healthy, do not need maternity coverage, and have an income above 400% of the federal poverty level. This is also a post for those people who will not qualify for a federal subsidy for a number of other reasons. The following will actually be relevant for a lot more people than you might think.
WARNING
Today’s blog post includes numbers. Lots and lots of numbers. Stay with me. This is your money.The exchanges opened October 1st. There have been, predictably, significant computer issues that will be resolved in time. Some of our insurers are still trying to get their policies and applications approved. I have been advising my clients to ignore the new system until November 1st.
I finally received Medical Mutual of Ohio’s 2014 rates. We don’t have applications, just rates. Here is how the PPACA affects a healthy 58 year old who happens to be fond of a good cigar (ME!).
Current Policy - $5,000 deductible HSA qualified contract - $310 per month
New 2014 Policy - $6,000 deductible HSA qualified contract - $633 per month
If you will bear with me, I will give you a more complete look at some real numbers. The following is a Medical Mutual of Ohio policy, $6,000 HSA qualified contract, for a non-smoker. The 2013 rates assume the insured is healthy. We no longer care in 2014 as we begin to utilize community rating.
2013 2014
Male Female Male and Female
22 $ 55.21 $ 75.43 $166.75
42 92.68 135.67 219.62
62 244.92 254.09 476.20
Community rating is great if you are the sickest guy on your street.
All of these policies, new in 2013 and new for 2014, cover preventive care at 100%. The 2014 policies also cover maternity the same as any other medical condition. But if you don’t have a serious pre-existing condition and you don’t need maternity, you don’t need one of the new 2014 policies.How do you escape the PPACA if it isn’t going to help you? Get coverage now! A policy purchased now, effective now, eludes the PPACA till the end of 2014. What will we do a year from now? I don’t know, but I would rather save $3,600 over the next year and see what develops.
The Department of Health and Human Services (HHS) has been forced to create this on the fly. Let’s give them an extra year to get this right. If you allow yourself to be victimized by the PPACA, it is your own damn fault.
DAVE
www.bcandb.com