Bone Of Contention

 

This blog has sounded the alarm.  There is a concerted effort to dismantle regulations, at least those impacting business activity and business behavior.  And though this is Health Insurance Issues With Dave, we have to take a moment to talk about boneless chicken wings. 

Here is the link to the Court News Ohio article.  The two minute version is that an Ohio man, Michael Berkheimer, revisited a local restaurant in 2017 and ordered his usual, boneless chicken wings.  From the article: 

“Berkheimer followed his normal practice of cutting each boneless wing into two or three pieces. He was eating the third piece of a wing when he felt “a piece of meat [go] down the wrong pipe.” He went to the restroom to try to clear his throat but was unsuccessful. Over the next three days, he spiked a fever and had trouble eating. During a visit to the emergency room, a doctor discovered a thin chicken bone lodged in his esophagus. His medical records indicated it was a “5 cm-long chicken bone,” which is about 1-3/8 inches.” 

The Ohio Supreme Court has ruled that Mr. Berkheimer cannot sue the restaurant or anyone responsible for the production of not-boneless boneless chicken wings.  Our courts have decided that you have no right to assume that a product sold as boneless would actually not have any bones.  This faith in the marketplace to self-correct means that anyone can sell you anything.  No matter what, you should know better.

 I am not implying coordination.  Instead, I see a convergence of a particular mindset / political view with those who would exploit weaknesses in the regulatory system.  Specifically, I am looking at the way legislation pending in the Ohio legislature, H.B. 400 and H.B. 587, would work with the Heritage Foundation’s Project 2025. 

H.B. 400 – Changes the way Medicare Supplements are marketed.  The bill would allow Medicare Beneficiaries under age 65 to purchase Medicare Supplement coverage.  It would also allow these Beneficiaries to change their policies annually.  Since they are under 65 and already declared Medicare eligible due to sickness or injury, there can’t be any underwriting.  Key changes:

·         Sale of Medicare Supplements to <65

·         Change Medicare Supplement policies annually, guaranteed issue with Pre-Ex covered

·         A whole new market that is constantly eligible.

·         Pricing locked in to the age 65 rate

·         Medicare Supplement marketing is state regulated

·         NO MENTION OF MEDICARE PART D (Rx) WHICH HAS FEDERAL MARKETING REGULATIONS.

H.B. 587 – Changes the way Medicare Supplements are marketed within the State of Ohio.  Many of Ohio’s current regulations mirror the federal government’s Medicare Advantage / Medicare Part D (Rx) prohibitions.  This bill removes these consumer safeguards while ignoring the need to help the consumer understand and address all of his/her needs.  Someone purchasing a Medicare Supplement would also need a Medicare Part D (Rx) plan.  And that individual might even be better served with a Medicare Advantage Plan.  Current Federal regulations would prevent the marketing of those plans at that time.  Key changes:

·         “Print solicitations such as…door hangers left at residences or on motor vehicles.”

·         “In-person solicitations of individuals at the individual’s residence or in public or common areas such as parking lots, hallways, lobbies, or sidewalks.”

·         “Telephonic or electronic solicitation such as electronic voicemail messages, text messages, or direct social media messages.”

Please note that H.B. 587 does not address the likelihood that many of those solicited would not qualify for the purchase of a Medicare Supplement policy under the current rules due to their preexisting conditions.  Beneficiaries currently covered by a Medicare Advantage Plan would have to answer health questions and would be subject to decline if they have had the MAPD for over 12 months.  This bill does not address the Beneficiaries’ need for Medicare Part D (Rx) coverage.

 

Project 2025 – The Heritage Foundation’s Mandate for Leadership: The Conservative Promise.  If I may skip the 533 times tax and/or taxpayer are mentioned and the 199 times for abortion, the other key focus of Project 2025 is the privatization and / or move to state (non)regulation of federally regulated programs.  The privatization of Social Security and the move of programs such as Medicare to state regulation are an inherent part of Project 2025.  And this is the final connection:

·         If Medicare was regulated by the State of Ohio, we could lose all of the consumer protections:

A.      Minimum standards for MAPD policies

B.      Age restrictions on Medicare Supplements

C.      Meaningful guaranteed issue vs. underwritten times to purchase coverage

D.     All marketing regulations.  Once anyone on Medicare can routinely change plans, marketing restrictions would be ignored (see current call centers with MAPD) and eventually eliminated.

It is important to remember that this mindset is completely convinced that the market will correct any and all excesses.  That faith in market correction ignores the real world consequences of the damage done. 

This same thinking can be applied to their efforts to dismantle the Patient Protection and Affordable Care Act in our industry and countless other examples in other industries.  

Eliminate all consumer safeguards?  I have a bone to pick with that. 

Dave 

www.cunixinsurance.com

Picture – Dependably Boneless – David L Cunix 

Quick footnote – I hope that some of you, especially those of you who are insurance agents, will click on the links to the legislation.  Both bills are only a few pages.  Also, the Project 2025 link is searchable.

It's All Great As Long As You Don't Pay Attention

Warning – Today’s post deals with the controversial Heritage Foundation Project 2025 Mandate for Leadership: The Conservative Promise.  Here’s a hint, I’m not a fan.  If offering my thoughts and quoting from this document might bother you, skip this issue and come back in another week or so.  Dave

One of last month’s posts on Health Insurance Issues With Dave discussed The Republican Study Committee Fiscal 2025 Budget Proposal and how it would, if given a chance, impact health insurance, the way most Americans access and pay for health care.  Today’s post will take a look at the Heritage Foundation’s Project 2025 Mandate for Leadership: The Conservative Promise.  It is important to note that this blog is my opinion on the major issues affecting health insurance, but the links will take you to the source material.  If you doubt my characterization of Project 2025, read it and then get back to me.

First, a little about the Heritage Foundation.  Many of us in the insurance business first became acquainted with this organization in the late 1980’s and/or early 1990’s.  The Individual Mandate, later to become a flashpoint in the Patient Protection and Affordable Care Act (Obamacare), originated with the Heritage Foundation in 1989.  Conservative Republicans including Orrin Hatch (R-UT), Charles Grassley (R-IA), and Newt Gingrich (R-GA) introduced legislation in 1993 that included the Individual Mandate as a counter to “ClintonCare”.   The concept also played a part in the Republican sponsored Medicare Part D (Rx) legislation ten years later.  As I have often noted for my clients, the first casualty of Obamacare was intellectual honesty.

The history is important because there are those who would edit the records based on whichever way the wind is blowing.  I have seen television interviews of the president of the Heritage Foundation, Kevin Roberts.  I’m certain that he will, by this time next year, either affirm or deny everything he’s said, depending on the results of the election.  But for now we can see and hear him say, “We are in the process of the second American Revolution, which will remain bloodless if the left allows it to be”.

There have been many scholarly papers written about using tax policies for social engineering.  Our government encourages marriage, having children, and owning a home through a variety of tax incentives.  So it is no surprise that the 922 page Project 2025 mentions the word tax or taxpayer a whopping 533 times.  For the record, here are how often a few other key words appear:

• Medicaid                      55 times
• Medicare                      51
• Health Insurance        11
• Obamacare / ACA       17
• Abortion                       199

Medicare first appears on Page 283.  This is an unedited excerpt: 

The first year that Medicare spending was visible on the books was 1967. From that point on through 2020—according to the American Main Street Initiative’s analysis of official federal tallies—Medicare and Medicaid combined cost $17.8 trillion, while our combined federal deficits over that same span were $17.9 trillion. In essence, our deficit problem is a Medicare and Medicaid problem. 

Please review your most recent paycheck.  If you are an employee, you and your employer each paid a 1.45% Medicare Tax.  If you are self-employed you paid the entire 2.9%.  Most Medicare beneficiaries also pay $174.90 per month for Medicare Part B.  The Heritage Foundation is pretending that there is no funding for these programs and is simply fudging the numbers.

On Page 463 we finally get to the meat of the Heritage Foundation’s plan.  First this paragraph:

Increase Medicare beneficiaries’ control of their health care. Patients are best positioned to determine the value of health care services, working with their health care providers. They also benefit from increased choice of doctors, hospitals, and insurance plans. Access to reliable information with respect to physicians, hospitals, and insurers is therefore essential.

This was quickly followed on the next page by:

1. Make Medicare Advantage the default enrollment option.

Where is Alanis Morissette when we need her?

Let’s move over to health insurance.  A few pages later, on page 468, we get to individual health insurance.  Over the next few pages they will cover the importance of concierge medicine, pricing negotiations on a case by case basis, and the elimination of the safeguards built into Obamacare (guaranteed issue, preexisting conditions covered, no policy maximum benefits, etc.)  I am posting some of the actual paragraphs for you to read.

AFFORDABLE CARE ACT AND PRIVATE HEALTH INSURANCE 

Remove barriers to direct primary care. Direct primary care (DPC) is an innovative health care delivery model in which doctors contract directly with patients for their care on a subscription basis regardless of how or where the care is provided. The DPC model is improving patient access, driving higher quality and lower cost, and strengthening the doctor– patient relationship. DPC has faced many challenges from government policymakers, including overly exuberant attempts at regulation and misclassification. Changes should clarify that DPC’s fixed fee for care does not constitute insurance in the context of health savings accounts. 

Facilitate the development of shared savings and reference pricing plan options. Under traditional insurance, patients who choose lower cost care do not benefit financially from that choice. Barriers to rewarding patients for cost-saving decisions should be removed. CMS should ensure that shared savings and reference pricing models that reward consumers are permitted. 

Separate the subsidized ACA exchange market from the non-subsidized insurance market. The Affordable Care Act has made insurance more expensive and less competitive, and the ACA subsidy scheme simply masks these impacts.  To make health insurance coverage more affordable for those who are without government subsidies, CMS should develop a plan to separate the non-subsidized insurance market from the subsidized market, giving the non-subsidized market regulatory relief from the costly ACA regulatory mandates.

Strengthen hospital price transparency. In 2020, CMS completed its rule to require hospitals to post the prices of common hospital procedures. Future updates of these rules should focus on including quality measures. Combined with the shared savings models and other consumer tools, these efforts could deliver considerable savings for consumers.

Center for Consumer Information and Insurance Oversight (CCHO).

CMS also plays an outsized role in overseeing the Obamacare exchanges, including managing Healthcare.gov, through the Center for Consumer Information and Insurance Oversight (CCIIO). While Obamacare limits plan options, CCIIO has been overly prescriptive in dictating what benefits and types of health plans may participate in the exchanges, thereby actually stifling market innovation and driving up costs.

Congress should build on the Trump Administration’s efforts to expand choices for small businesses and workers, both in and out of the exchanges, by codifying an expansion of association health plans, short-term health plans, and health reimbursement arrangements (including individual coverage HRAs). CCIIO should also work with the Treasury Department and the Office of Management and Budget (OMB) to give consumers more flexibility with their health care dollars through expanded access to health savings account.

The Heritage Foundation is not a big fan of Group Health Insurance:

Wages vs. Benefits.

The current tax code has a strong bias that incentivizes businesses to offer employees more generous benefits and lower wages. This limits the freedom of workers and their families to spend their compensation as they see fit—and it can trap workers in their current jobs due to the jobs’ benefit packages. Wage income is taxed under the individual income tax and under the payroll tax. However, most forms of non-wage benefits are wholly exempt from both of these taxes. To reduce this tax bias against wages (as opposed to employee benefits), the next Administration should set a meaningful cap (no higher than $12,000 per year per full-time equivalent employee—and preferably lower) on untaxed benefits that employers can claim as deductions. Employee benefit expenses other than tax-deferred retirement account contributions should count toward the limitation, whether offered to specific employees or whether the costs relate to a shared benefit like building gym facilities for employees. Tax-deferred retirement contributions by employers should not count toward this limitation insofar as they are fully taxable upon distribution. Only a percentage of Health Savings Accounts (HSA) contributions (which are not taxed upon withdrawal) should count toward the limitation.  The limitation on benefit deductions should not be indexed to increase with inflation.  Employers should also be denied deductions for health insurance and other benefits provided to employee dependents if the dependents are aged 23 or older. 

My focus is on health insurance.  There is more, a lot more, focused on removing guardrails with the understanding that there is no reason to worry about excesses because the market will self-correct.  But this is health care, not just 20% of the economy but whether or not you get to see a doctor and receive medical attention when you need it.

This is getting long so I will spare you the numerous abortion, LGBTQ+ (12), or gender (111) references.  I had to include the one section that proves that self-described Conservatives have rhythm:

Expand inclusion of fertility awareness–based methods and supplies to family planning in the women’s preventive services mandate.

The ACA requires coverage of and prevents insurance plans from imposing any cost-sharing requirements on women who obtain preventive care and screenings as defined by HRSA. In 2016, HHS included “instruction in fertility awareness-based methods” as part of this requirement. However, in December 2021, HHS removed that language from its list without using the notice-and-comment process or giving any rationale, both of which are mandated by the Administrative Procedures Act. In August 2022, a federal court blocked this attempt to eliminate health insurance coverage for fertility awareness–based methods of family planning from requirements that cover at least 58 million women, and the judge made his ruling permanent in December 2022. HRSA should promulgate regulations consistent with this order. HHS should more thoroughly ensure that fertility awareness–based methods of family planning are part of women’s preventive services under the ACA. FABMs often involve costs for materials and supplies, and HHS should make clear that coverage of those items is also required. FABMs are highly effective and allow women to make family planning choices in a manner that meets their needs and reflects their values.

A lot has been said about Project 2025.  Some on the left have taken these plans to their illogical extreme.  Many on the right are already running away from Project 2025 (unless they win).  There wasn’t a Republican Party platform in 2020.  The recently released 2024 draft is oddly silent on almost everything other than the border.  If we are going to assess the Republican plans for governing this country in general and health care in particular, we must look at the work of the Republican Study Committee and the Heritage Foundation.  Those links will take you to THEIR WORDS and THEIR GOALS.  I am only here to get you started.

We are all in this together.

Dave

www.cunixinsurance.com

Picture – The Gorge – David L Cunix