DAD

I got caught. One of my readers noticed that I had yet to say a word about Senator Bernie Sanders and his health plan. I have reviewed plans from Scott Walker to Donald Trump. I’ve even covered Obamacare-lite plans from the Senate Republicans. But like Secretary Clinton, I just kept waiting for him to go away. But he hasn’t…

I read Senator Sanders’ plan over the weekend. It is very easy to understand, especially if you are five years old. Go to the doctor and Dad pays the bill. You may, or may not, get a lollipop, but no one will ask you, at age five, for any money. Need a prescription? Go to the drugstore. Dad’s got it covered. Hospital? Physical therapy? Inpatient substance abuse? Whatever you need, don’t worry. Dad’s got you covered. Great Dad. Rich Dad. Really rich.

Dad is the federal government.

Senator Sanders plan provides 100% coverage. No deductibles. No coinsurance. No copays. He pulls all of the consumer money out of the system. He eliminates all patient incentives to limit or question care.

Where does the federal government get all of this money?

• 6.2% income-based health care premium paid by employers
• 2.2% income-based premium (after deductions) paid by households
• Tax capital gains and dividends as ordinary income
• Limit tax deductions for households earning over $250,000
• Rejuvenate the estate tax
• Increase marginal income tax rates to 37% for a $250,000 family income to 52% on incomes over $10,000,000

That is a lot of tax. It would take a very different Congress to pass a funding bill that looked anything like the wish list, above.

It is difficult to illustrate an apples to apples comparison. Your average 40 year old has an insurance premium, deductible, coinsurance, and copays. This plan has none of that. The closest I can provide would be Medicare.

My clients love Medicare. They’ll tell you how they don’t pay anything at the doctor’s office and how they never saw a bill after a hospital stay. Even prescriptions are manageable.

Of course, that’s not Medicare. That is traditional Medicare plus a Medicare Supplement Plan F plus a Medicare Part D (Rx) plan. But most people just see it all as Medicare once it is all put in place.

Medicare is not free. We have all been paying into it for years. The doctors and hospitals are paid on a fee schedule that is more subject to politics than market forces. This is what you would pay if you turned 65 next month and went on to Medicare.

• Medicare Part A - No Charge
• Medicare Part B - $121.80 per month
• Medicare Supplement Plan F - @$150 per month
• Medicare Part D (Rx) - @$20 per month

The total for someone just turning 65 would be about $292 per month or $3514 per year.

The Sanders plan does not factor in age, just income. A 22 year old pays the same as a 72 year old, probably more.

How much would an unemployed/retired 65 year old pay under Senator Sanders’ plan? Assuming a Standard Deduction:

1. Annual Income of $20,000 - $281.60 per year
2. Annual Income of $40,000 - $721.60 per year

100% coverage for $281.60, an annual savings of over $3,200! It takes a lot of income tax on rich people to make these numbers work.

Does this prove that the Sanders plan can’t succeed? No, but I believe that it would take a giant leap of faith to make these numbers fly. The lack of consumer/patient involvement dooms the program. I still believe that the Patient Protection and Affordable Care Act (Obamacare) has put us on the path to a single-payer system. I just don’t see how it could be a 100% plan.

Free. We want free. But we’re not five and Dad, even a Dad that can print money, can’t afford to give us everything we want.

DAVE

 

Picture is of a dad, but not one who can print money.

 

Cheap At Twice The Price

The University Hospital system is incredibly efficient. I’ve spent a lot of time lately in both the suburban facilities and the main campus. The clerks manning the check-in desks and the schedulers don’t do anything until they make a copy of your photo ID and insurance card. I once went to the same office, same clerk, two days in a row. She didn’t deviate, didn’t skip a step. University Hospital knows how it is going to be paid. And that’s a good thing. I just thought it weird when the gift shop asked for my photo ID and insurance card...

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The young widow had her own share of nagging health issues. Last May her doctor looked her in the eye and told her that he wanted her to have a heart catheterization. This wasn’t an emergency. He just felt that it was warranted. More importantly, he wanted a specific doctor at U.H. main campus to perform the procedure. This would be fine except that Brenda (name changed) has Medical Mutual of Ohio. MMO’s network includes the Cleveland Clinic and the suburban University Hospital facilities. It is common knowledge that Brenda had great coverage throughout Northeast Ohio. Everywhere but U.H. main campus.

He sent her to U.H. Main Campus.

Brenda should have known better, but she was totally focused on the fact that she needed a heart catheterization. The doctor simply didn’t care. The schedulers, both at the doctor’s office and at U.H. main campus, noted her coverage as they set up her non-emergency appointment. And since it was not an emergency, she had close to a month to worry about this procedure and her health.

Brenda got the call the day before the procedure. It was a courtesy call from University Hospital to let her know that she was going to be out-of-network. Did she still want her heart catheterization? It was too late to turn back. She had worried about this for almost a month. She made a snap decision. How bad could it be?

$11,000

Brenda paid $11,000 in out-of-network fees. I consider this an abuse of privilege. Everyone involved knew that Brenda was going to the wrong facility. This was not an emergency. And this was too high a price to pay for good news.

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The bills are coming in for my little adventure. University Hospital, the doctors, and the labs have submitted claims in excess of $250,000. So far. My share, to date, has been my $5,500 deductible. All of my services were rendered by in-network providers. Anthem seems to be doing their job so that I can do mine, recover.

$250,000! I think that it would have been cheap at twice the price.

DAVE

Sorry To Bother You

Quick Personal Update – Thanks for asking. I’m feeling stronger everyday. Already spending too much time at the office.

Frank (name changed) knew exactly what he wanted. Frank wanted the kind of policy he used to have twenty years ago when he worked in the family business. He wanted a small deductible, office copays, and an Rx card. A throwback. The policy needed to cover him and his twenty year old son. He wanted Platinum in a Silver or Bronze environment. Frank was insistent.

There was a way. I could put Frank and his son into the Government Exchange. Medical Mutual of Ohio was still offering a Gold Level policy through the Exchange, and even though he didn’t qualify for a tax credit subsidy, we could access this contract for them. I DIDN’T WANT TO DO IT. I warned Frank that accessing the Exchange needlessly simply multiplied our chances for failure. But Frank was insistent.

I can’t tell you how many hours I have invested in this disaster. It is difficult to even explain how healthcare.gov messed this up. But they did. The original mistake isn’t the interesting part. It is all of the subsequent steps that leave us today, May 2, 2016, with Frank and his son uninsured.

Let’s skip ahead to April 9, 2016. Frank sat in my office for almost two hours that day. We were on hold for over 40 minutes before we got to talk to anyone. We were lucky. The woman we worked with seemed both knowledgeable and caring. Here is what she told us:

• I can see where we corrected the initial problem and got Mr. Frank and his son covered as of March 1, 2016
• I can see where we corrected that mistake and got Mr. Frank and his son correctly covered as of February 1, 2016
• I can see that the policy then automatically cancelled itself out on March 1, 2016 through no fault of the insured
• I can see that this was supposed to be expedited
• I can see that it was never expedited

She promised to get this into the right hands and assured us that there was no reason for this problem to persist. We actually felt pretty good about the process when we finally hung up with her.

Don’t get too comfortable

The rejection letter came three weeks later. The government had decided that he didn’t deserve to have his policy reinstated. The letter helpfully included the marketplace appeal hotline 855.231.1751. Frank came in today.

By the way, this isn’t a specific problem of the Patient Protection and Affordable Care Act (Obamacare). This is a bureaucracy issue. This is a regulatory issue. This is a full-fledged screw up.

Frank sat in my office as I called the hotline. Working through the automated system I finally hit the button to file an appeal. WE WERE IMMEDIATELY DISCONNECTED.

Second call. This time, to the surprise of a Ms. Shannon, I managed to get to a human being. She had no interest in hearing why we were calling. The process demanded that we must first go to healthcare.gov, file an appeal, and then, and only then, will anyone talk with us. Maybe. I tried. She wouldn’t budge.

We went to healthcare.gov with her on the line. She made sure to point out the next to the last section, Choose an Authorized Representative. Frank had the right to name me as his contact, someone who could easily answer their questions and make sense of this. We got off the phone and completed the appeal form.

And once the appeal form had been completed we hit the link to the special authorization form. The picture at the top is where the link takes you. We’re so screwed…

 
DAVE