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Before we begin this next installment of Health Insurance Issues With Dave, we must briefly mention New Hampshire State Representative Martin Harty. When confronted by constituent Sharon Ormond about planned cuts in local mental health, Representative Harty opined that “there are too many defective people”. He went on to express his wish that we could ship the disabled, the retarded, and people with physical disabilities to Siberia.
Yes, Representative Harty is a fershimmeled 91 year old. Yes, he will serve one, and only one, term. I bring this up to again note that the moment health care is placed into the hands of politicians; the good, the bad and the Harty’s, medical treatment is politicized.
***
I had my annual physical this week. I ran in Tuesday morning and had my blood drawn. On Wednesday I spent over a half an hour with Dr. Ken Goodman who performed a thorough exam and an EKG. Let me brag for a second. The results were excellent. The costs for all of this, however, may surprise you.
I haven’t seen this year’s bills yet, but I have last year’s. Last year the Cleveland Clinic billed me and Medical Mutual of Ohio $802.78. MMO has a contract with the Clinic, so they only paid $417.13. I was left with a bill of $32. That is my policy. Technically, preventive care exams are completely covered on my policy, but the Cleveland Clinic always runs a blood test that isn’t part of the package. So I am always left with a small charge.
Many of my clients have similar coverage. Many, but not all. The new law, the Patient Protection and Affordable Care Act, has changed that. All non-grandfathered health insurance policies now cover preventive care completely. How will that impact your policy?
In the simplest of terms, we are adding $417 to $803 of claims and the cost to process the paperwork to your policy. That is up to $67 per month. You and I understand that that will have an impact on your premium. It is true that only a fraction of Americans will take advantage of their free physicals. So you can get yours and hope that all of your friends skip theirs.
The federal government operates in a parallel universe. Their numbers are far different. The Department of the Treasury released interim final rules and regulations on July 19, 2010. This link takes you to thirty plus pages of the Federal Register. Section 5 details Costs and Transfers.
The government determined that individuals with employer-sponsored insurance have, on average, $264 in covered preventive care services. Of that, $240 was paid by insurance and $24 was paid by the patient as a copayment. Making this change, mandating that the exam is totally free, will only result in a $24 shortfall.
My exam, which doesn’t cover all of the stuff that falls under the new law, was a lot more than $264. Yours will be, too. That’s a gap of at least $153. If your current plan covered less than $264 of preventive care, or even no preventive care at all, your gap is much higher. Who will be charged for your free physical? You, of course, will be funding your free exam through higher health insurance premiums.
I believe in the value of routine physical exams. I have been poked and prodded annually for over twenty years. I also believe in routine auto maintenance and oil changes for my cars, but I don’t expect State Farm to cover them. I made a conscious decision to purchase a health insurance policy that includes preventive care. I chose to pay extra.
I believe that you are smart enough to make your own decisions, too. But, the government believes that the benefits of an annual exam, especially the opportunity to have a doctor educate you on the dangers of smoking and obesity, are too important to leave to chance. OK. Sell that.
It is time for the government to explain to the American people how much this program is going to cost us. The answer is not $24. If this really is beneficial, if it is truly warranted, the facts will win out. I believe in the American people. I trust our judgment. We will spend money if we understand why it is in our best interest. But the PPACA has been sold to us as a way to lower our costs and premiums.
That is clearly not true.
My numbers were great. Blood Pressure – 107/74! Resting heart rate of 65. No medications. Anticipated bill - $35. I hope your numbers are just as good, if not better. Diet and exercise can help to control your blood pressure. There may be no way to control that last number, the cost, under the new legislation.
DAVE
www.bcandb.com
This blog post is now appearing on my website in a word press format. Those of you who use a reader might prefer that format. http://bcandb.com/cunix/?p=80 Please let me know what you think.
Sunday, March 13, 2011
Friday, February 25, 2011
Promises Promises
When is a contract a contract? When is a promise a promise? The answer in 2011 is “It Depends”.
Public employees have contracts. Some of their contracts promised adequate wages with really good fringe benefits and generous retirements. Almost all of their contracts guaranteed stability. Governments; cities, states and the feds, and public institutions such as schools, often took the easy route. Our leaders and elected officials pushed these payroll costs back twenty or thirty years when funding would be someone else’s problem. This strategy was so popular at the steel mills and the auto plants that it had to be a good idea.
The future is now.
Vice-President Dick Cheney once said the deficits don’t matter. And they didn’t. To him. In 2011, after ten years of unfunded wars, unregulated banking, and reckless spending, we are in a real mess. We could reassess our priorities and then align our income (taxes) to pay our bills, but that would be difficult. That would take courage. Instead, we tear up contracts, de-certify unions, and cut heating oil subsidies for the poor.
What does all of this have to do with the delivery of health care? After all, this is Health Insurance Issues With Dave. In a word, everything.
The recent election gave us Republican governors in Wisconsin, Ohio, etc… Elected to create jobs and right their ships of state, these new governors have chosen a different path. They have decided to target their public employees and to eliminate the unions that represent them. We are being told that these contracts are too expensive to honor. We don’t have the money. Their jobs, and the incomes that paid their bills, will disappear. The pensions they were promised may be gone.
Why is this different than government’s promise of health care? We haven’t properly funded the health care we have promised to the poor and the elderly. We have deferred the expenses and punted every time a difficult decision has been on the table. A quick example is the Medicare Doc Fix.
In an effort to make a dent in the fiscal mess that is Medicare, a decision was made in 1997 to control the escalating costs of medical care. The Sustainable Growth Rate was a payment formula designed to keep doctors’ rates in check. Unfortunately, the formula didn’t work in the real world. The adjusted payment rates would have forced a large number of doctors to not accept Medicare and to leave the system. One option would have been to correct the formula. Another option would have been to scrap the Sustainable Growth Rate and start over. Congress, Republicans and Democrats, chose a third option. They passed periodic fixes to the bill and pushed the tough decisions back for someone else to handle. The Sustainable Growth Rate was passed in 1997. How much have we saved to date? Nothing. The implementation is still getting postponed every month.
Is the Doc Fix a good idea? Would the Doc Fix solve Medicare’s problems? Probably not. But if Congress doesn’t get Medicare’s costs and funding under control, we will eventually be facing the same problems, and the same decisions, that the states are grappling with today.
Can the federal government be entrusted with more responsibility for our health care? What promises are too important to break?
DAVE
www.bcandb.com
Public employees have contracts. Some of their contracts promised adequate wages with really good fringe benefits and generous retirements. Almost all of their contracts guaranteed stability. Governments; cities, states and the feds, and public institutions such as schools, often took the easy route. Our leaders and elected officials pushed these payroll costs back twenty or thirty years when funding would be someone else’s problem. This strategy was so popular at the steel mills and the auto plants that it had to be a good idea.
The future is now.
Vice-President Dick Cheney once said the deficits don’t matter. And they didn’t. To him. In 2011, after ten years of unfunded wars, unregulated banking, and reckless spending, we are in a real mess. We could reassess our priorities and then align our income (taxes) to pay our bills, but that would be difficult. That would take courage. Instead, we tear up contracts, de-certify unions, and cut heating oil subsidies for the poor.
What does all of this have to do with the delivery of health care? After all, this is Health Insurance Issues With Dave. In a word, everything.
The recent election gave us Republican governors in Wisconsin, Ohio, etc… Elected to create jobs and right their ships of state, these new governors have chosen a different path. They have decided to target their public employees and to eliminate the unions that represent them. We are being told that these contracts are too expensive to honor. We don’t have the money. Their jobs, and the incomes that paid their bills, will disappear. The pensions they were promised may be gone.
Why is this different than government’s promise of health care? We haven’t properly funded the health care we have promised to the poor and the elderly. We have deferred the expenses and punted every time a difficult decision has been on the table. A quick example is the Medicare Doc Fix.
In an effort to make a dent in the fiscal mess that is Medicare, a decision was made in 1997 to control the escalating costs of medical care. The Sustainable Growth Rate was a payment formula designed to keep doctors’ rates in check. Unfortunately, the formula didn’t work in the real world. The adjusted payment rates would have forced a large number of doctors to not accept Medicare and to leave the system. One option would have been to correct the formula. Another option would have been to scrap the Sustainable Growth Rate and start over. Congress, Republicans and Democrats, chose a third option. They passed periodic fixes to the bill and pushed the tough decisions back for someone else to handle. The Sustainable Growth Rate was passed in 1997. How much have we saved to date? Nothing. The implementation is still getting postponed every month.
Is the Doc Fix a good idea? Would the Doc Fix solve Medicare’s problems? Probably not. But if Congress doesn’t get Medicare’s costs and funding under control, we will eventually be facing the same problems, and the same decisions, that the states are grappling with today.
Can the federal government be entrusted with more responsibility for our health care? What promises are too important to break?
DAVE
www.bcandb.com
Wednesday, February 9, 2011
Are We Serious About Change?
I wasn’t expecting a letter from State Farm. Of course, the news wasn’t good. My insurer regretted to inform me that I was never going to be reimbursed. Hit by an uninsured motorist (Mr. Popularity – March 6, 2009), I was forced to pick up my deductible and part of the car rental expenses. That money was gone. In a final act of irresponsibility, Ms. P. had her debts discharged through bankruptcy.
Ms. P. was driving illegally. She did not have insurance. Had she followed the law, she either wouldn’t have been on the road, thus not hitting me, or her insurance would have paid for the repair of my car. Her insurance. Instead, State Farm spent thousands and I lost about $800. Since bankruptcy is a matter of public record, I could, if I was a glutton for punishment, learn who else got screwed by Ms. P. Banks? Retail stores? Did she go on a shopping trip before she ran to the courts for relief?
Why should you care? Her refusal to follow the law and to pay her debts costs you money. We are covering her debts. And there will be more.
1 o’clock. No Oliver. No surprise.
Oliver may be the poster child for the uninsured. He is in his late fifties, disabled from an accident, and officially under-employed. He gets by through the kindness of his family members. One has him working part-time in a small business. Another helps with the rent. Insurance was to be paid by his little sister. All he has to do is show up for our appointment and give her the bill when it arrives with the policy.
Oliver was covered, briefly, last year, but he was too busy to get the bill to his sister. He has been too busy to get here to my office. He is just busy. Odd how much time it takes to do nothing.
Oliver’s family can’t force him to have free insurance. Who will pay when Oliver seeks medical care? Who will cover his next surgery? YOU, of course.
There is much to dislike about President Obama’s Patient Protection and Affordable Care Act. It was poorly designed and even more poorly explained. But, it is the individual mandate that is being attacked by Republican judges. And without a legal requirement to be in the system, to be responsible, we can not move forward. We can not improve the delivery of health care, guarantee universal access, and control costs if we don’t require everyone to participate.
Federal District Judge Roger Vinson recently ruled that the PPACA is unconstitutional. He wrote that Congress couldn’t require Americans to buy insurance. He also determined that this provision, the individual mandate, could not be severed from the rest of the law. The second part of his ruling strikes down the entire bill.
As a non-attorney, I will not discuss the merits of Judge Vinson’s ruling. Is he right? Will he be upheld or reversed on appeal? What will the Supreme Court decide? It is important to remember that all rulings are subjective and reflect the Court and their time. Previous Supreme Court decisions have, in retrospect, been all over the map.
So let’s skip the law for a second and talk about people. There are lots and lots of Ms. P.’s and Olivers, far more than any of us might want to admit. I encounter the intentionally uninsured daily. They are healthy young people who are convinced that they are incapable of getting sick or injured, even though they ski, ride motorcycles, or engage in other hazardous activities. Some are just selfish people who have never pulled their own weight and never will until forced. And some are simply weak-willed who can’t walk past shiny new things.
We also have the unintentionally uninsured. We have 50 and 60 year olds who have lost their jobs and group health insurance and can’t afford food, much less insurance. There are any number of sick and disabled who need our help. Helping the unintentionally uninsured was supposed to be the goal of the PPACA.
Ms. P. chose to drive a car without insurance. Almost all of us will one day need health care. It won’t be a choice. U.S. hospitals are not going to deny care. We aren’t going to barricade the Emergency Room doors to keep out the uninsured. So what we are discussing is money. How are we going to pay for care? How do we pay for doctors, hospitals and prescriptions?
We understand, or least most of us do, why drivers must be forced to carry insurance. Requiring people to be responsible for a portion of their health care expenses is just as reasonable. We will never have 100% participation. Just as there are a small but dangerous group of uninsured motorists, there will always be people who evade the system. They will fly under the radar right up to the moment that they need care.
Don’t like the individual mandate? OK. Tell us how you will improve our system without it.
DAVE
www.bcandb.com
Ms. P. was driving illegally. She did not have insurance. Had she followed the law, she either wouldn’t have been on the road, thus not hitting me, or her insurance would have paid for the repair of my car. Her insurance. Instead, State Farm spent thousands and I lost about $800. Since bankruptcy is a matter of public record, I could, if I was a glutton for punishment, learn who else got screwed by Ms. P. Banks? Retail stores? Did she go on a shopping trip before she ran to the courts for relief?
Why should you care? Her refusal to follow the law and to pay her debts costs you money. We are covering her debts. And there will be more.
1 o’clock. No Oliver. No surprise.
Oliver may be the poster child for the uninsured. He is in his late fifties, disabled from an accident, and officially under-employed. He gets by through the kindness of his family members. One has him working part-time in a small business. Another helps with the rent. Insurance was to be paid by his little sister. All he has to do is show up for our appointment and give her the bill when it arrives with the policy.
Oliver was covered, briefly, last year, but he was too busy to get the bill to his sister. He has been too busy to get here to my office. He is just busy. Odd how much time it takes to do nothing.
Oliver’s family can’t force him to have free insurance. Who will pay when Oliver seeks medical care? Who will cover his next surgery? YOU, of course.
There is much to dislike about President Obama’s Patient Protection and Affordable Care Act. It was poorly designed and even more poorly explained. But, it is the individual mandate that is being attacked by Republican judges. And without a legal requirement to be in the system, to be responsible, we can not move forward. We can not improve the delivery of health care, guarantee universal access, and control costs if we don’t require everyone to participate.
Federal District Judge Roger Vinson recently ruled that the PPACA is unconstitutional. He wrote that Congress couldn’t require Americans to buy insurance. He also determined that this provision, the individual mandate, could not be severed from the rest of the law. The second part of his ruling strikes down the entire bill.
As a non-attorney, I will not discuss the merits of Judge Vinson’s ruling. Is he right? Will he be upheld or reversed on appeal? What will the Supreme Court decide? It is important to remember that all rulings are subjective and reflect the Court and their time. Previous Supreme Court decisions have, in retrospect, been all over the map.
So let’s skip the law for a second and talk about people. There are lots and lots of Ms. P.’s and Olivers, far more than any of us might want to admit. I encounter the intentionally uninsured daily. They are healthy young people who are convinced that they are incapable of getting sick or injured, even though they ski, ride motorcycles, or engage in other hazardous activities. Some are just selfish people who have never pulled their own weight and never will until forced. And some are simply weak-willed who can’t walk past shiny new things.
We also have the unintentionally uninsured. We have 50 and 60 year olds who have lost their jobs and group health insurance and can’t afford food, much less insurance. There are any number of sick and disabled who need our help. Helping the unintentionally uninsured was supposed to be the goal of the PPACA.
Ms. P. chose to drive a car without insurance. Almost all of us will one day need health care. It won’t be a choice. U.S. hospitals are not going to deny care. We aren’t going to barricade the Emergency Room doors to keep out the uninsured. So what we are discussing is money. How are we going to pay for care? How do we pay for doctors, hospitals and prescriptions?
We understand, or least most of us do, why drivers must be forced to carry insurance. Requiring people to be responsible for a portion of their health care expenses is just as reasonable. We will never have 100% participation. Just as there are a small but dangerous group of uninsured motorists, there will always be people who evade the system. They will fly under the radar right up to the moment that they need care.
Don’t like the individual mandate? OK. Tell us how you will improve our system without it.
DAVE
www.bcandb.com
Monday, January 24, 2011
Give Us Something We Can Use
“Mr. Cunix?”
I recognized that voice.
“This is Belinda Prinz from Congresswoman Marcia Fudge’s office.”
Regular readers know that I have mentioned my Congresswoman a couple of times in my two blogs. We also know that Congresswoman Fudge, or her staff, are regular readers. Ms. Prinz even commented on the August 30, 2010 post, Choosing Sides.
Belinda Prinz must have drawn the short straw. There is no doubt that she considered herself fortunate that she reached my voicemail instead of me. Her assignment was doomed to failure. She was on a fool’s errand and the longer she talked, the more apparent it became to her.
One of Congresswoman Fudge’s other staffers had called the Beachwood Chamber of Commerce and had talked with our Executive Director, Wayne Lawrence. He suggested that she call me. What did the Congresswoman want?
“We would like to know the name of a small business that can now provide insurance benefits to its employees because of the tax credits in the Patient Protection and Affordable Care Act. We want to tell their story.”
Yes, Congresswoman Fudge is desperate to find someone, anyone, who has benefited from last year’s legislative train wreck.
Let’s think about this for just a second. We would need to find a small business that
* Didn’t provide health insurance
* Wasn’t motivated by the tax deductibility of health insurance premiums
* Doesn’t pay its employees very well
* Is making enough profit that the tax credit is irresistible
Does that sound like any business you know? Of course not. Will Congresswoman Fudge or one of her cohorts find a couple of examples somewhere in this country? I like their odds. Still, it might be worthwhile to research the details when they trot out their success stories.
It is far easier to find the victims of last year’s legislation. There are businesses that fear my phone calls, worried that this year’s renewal rates will be more than they can spend. My restaurants and other clients that employ lots of unskilled and semi-skilled workers are very worried about the planned tax/fee/penalty to be assessed to businesses that don’t provide group health insurance. The saddest and most immediate blow was dealt to parents.
Proponents of the Patient Protection and Affordable Care Act love to note that children are now guaranteed issue. Insurance companies can no longer refuse to cover a minor due to preexisting conditions. Fearing the inevitable dumping of unhealthy children from group (employer sponsored) policies to individual contracts, the insurance companies simply stopped selling Child,Only policies.
The few unhealthy uninsured children of families that neither qualified for group health insurance or Medicaid are still uninsured. This will not change for another couple of years, if ever. But the negative impact was immediate.
Janet (name changed) works for a large property management company. Her employer’s new policy, as of February 1st, will cost her only $60 per month. That is the price for just her, the employee. The premium for her and her two daughters would be just a touch over $500 per month. Employers across the country are cutting back. One way to save money is to pay only a portion of the employee’s health insurance. If the employee wants to cover a spouse and children, he/she will be charged the difference.
A year ago I could have written great coverage on Janet’s two healthy daughters for less than $200 per month. Janet would have stayed on the employer’s plan, placed the girls with Anthem or MMO, and saved over $2,000. Janet even had the option of choosing a higher deductible and saving even more. Today? Nothing!
Janet has two options. She can stay on her employer’s plan and work for the insurance or she and her two daughters can purchase a fully underwritten individual (non-group) policy. She chose a high deductible health plan that will cost her $194 per month for the three of them. Is this the best solution? Of course not. But Congresswoman Fudge and her friends killed the best solution last March.
I didn’t return Ms. Prinz’s phone call. I don’t know of any businesses or employees who have benefitted from her boss’s efforts. And I have no reason to believe that our Congresswoman has any interest in learning about the collateral damage.
Besides, we know they are reading this. We just don’t know if they care enough to make any changes.
DAVE
www.bcandb.com
I recognized that voice.
“This is Belinda Prinz from Congresswoman Marcia Fudge’s office.”
Regular readers know that I have mentioned my Congresswoman a couple of times in my two blogs. We also know that Congresswoman Fudge, or her staff, are regular readers. Ms. Prinz even commented on the August 30, 2010 post, Choosing Sides.
Belinda Prinz must have drawn the short straw. There is no doubt that she considered herself fortunate that she reached my voicemail instead of me. Her assignment was doomed to failure. She was on a fool’s errand and the longer she talked, the more apparent it became to her.
One of Congresswoman Fudge’s other staffers had called the Beachwood Chamber of Commerce and had talked with our Executive Director, Wayne Lawrence. He suggested that she call me. What did the Congresswoman want?
“We would like to know the name of a small business that can now provide insurance benefits to its employees because of the tax credits in the Patient Protection and Affordable Care Act. We want to tell their story.”
Yes, Congresswoman Fudge is desperate to find someone, anyone, who has benefited from last year’s legislative train wreck.
Let’s think about this for just a second. We would need to find a small business that
* Didn’t provide health insurance
* Wasn’t motivated by the tax deductibility of health insurance premiums
* Doesn’t pay its employees very well
* Is making enough profit that the tax credit is irresistible
Does that sound like any business you know? Of course not. Will Congresswoman Fudge or one of her cohorts find a couple of examples somewhere in this country? I like their odds. Still, it might be worthwhile to research the details when they trot out their success stories.
It is far easier to find the victims of last year’s legislation. There are businesses that fear my phone calls, worried that this year’s renewal rates will be more than they can spend. My restaurants and other clients that employ lots of unskilled and semi-skilled workers are very worried about the planned tax/fee/penalty to be assessed to businesses that don’t provide group health insurance. The saddest and most immediate blow was dealt to parents.
Proponents of the Patient Protection and Affordable Care Act love to note that children are now guaranteed issue. Insurance companies can no longer refuse to cover a minor due to preexisting conditions. Fearing the inevitable dumping of unhealthy children from group (employer sponsored) policies to individual contracts, the insurance companies simply stopped selling Child,Only policies.
The few unhealthy uninsured children of families that neither qualified for group health insurance or Medicaid are still uninsured. This will not change for another couple of years, if ever. But the negative impact was immediate.
Janet (name changed) works for a large property management company. Her employer’s new policy, as of February 1st, will cost her only $60 per month. That is the price for just her, the employee. The premium for her and her two daughters would be just a touch over $500 per month. Employers across the country are cutting back. One way to save money is to pay only a portion of the employee’s health insurance. If the employee wants to cover a spouse and children, he/she will be charged the difference.
A year ago I could have written great coverage on Janet’s two healthy daughters for less than $200 per month. Janet would have stayed on the employer’s plan, placed the girls with Anthem or MMO, and saved over $2,000. Janet even had the option of choosing a higher deductible and saving even more. Today? Nothing!
Janet has two options. She can stay on her employer’s plan and work for the insurance or she and her two daughters can purchase a fully underwritten individual (non-group) policy. She chose a high deductible health plan that will cost her $194 per month for the three of them. Is this the best solution? Of course not. But Congresswoman Fudge and her friends killed the best solution last March.
I didn’t return Ms. Prinz’s phone call. I don’t know of any businesses or employees who have benefitted from her boss’s efforts. And I have no reason to believe that our Congresswoman has any interest in learning about the collateral damage.
Besides, we know they are reading this. We just don’t know if they care enough to make any changes.
DAVE
www.bcandb.com
Thursday, January 13, 2011
Hyperbole – Fun For The Entire Family
The members of the House of Representatives were sworn in this week. The Republicans are now in the majority. Representative John Boehner (R-OH) is the new Speaker. Will their first major issue be the economy? The deficit? Jobs? Our young men and women dying on foreign soil? Don’t be silly. Just as the Democrats rushed past the necessary in favor of health care and health insurance, the Republicans are ready to vote to repeal “Obamacare”.
The Republicans have excitedly drawn a line in the sand. This expression couldn’t be more apropos. The common understanding is that they have marked off their territory and will defend to the death their beliefs. But we all know that this vote, and the days of debate that will precede it, are a terrible waste of time. The Republican House will pass a bill that the Democrat controlled Senate will ignore and the President would quickly veto.
The Republicans have excitedly drawn a line in the sand. Take that literally. As everyone who has ever had the pleasure of visiting a beach knows, drawing a line in the sand is a temporary act that has no value. Your line, or if you are really ambitious, your sand castle, only lasts until the next inevitable wave washes it away.
The reopening of last year’s health care debate has allowed both sides to erect and knock down their favorite straw men. If it were not for the recent tragic events in Arizona, we would have had the debate and vote this week. Instead, we are treated to a week of accusations and recriminations. Health care will have to wait till next week.
But the posturing has begun.
The Republicans talk about tyranny, about forcing citizens to have insurance to pay their medical bills. They also point to a huge new federal government program, much like No Child Left Behind, that will impose new costs and responsibilities on the states. There is nothing worse than a poorly designed, unfunded program created by the other side.
The Democrats are relishing this debate. They love to point out that children are now guaranteed issue and that their preexisting conditions must be covered. The Dems just conveniently forget to mention that Child Only policies no longer exist in most of the country. If the policy still existed, it would be wonderful for a limited number of families. Instead, lots of healthy children can no longer be covered at a reasonable price.
Other new benefits include free Medicare physicals for seniors and that adult children can now stay on their parents’ policies until they are 26. We don’t need to do scientific polling to learn that people like free stuff. Who pays for this free stuff? Well, you do of course.
The other big defense of the Patient Protection and Affordable Care Act (PPACA) is that its repeal would cost us money. Senator Sherrod Brown (D-OH) has been citing the Congressional Budget Office’s estimate. This, too, is a moving target. The Senator has used a CBO figure of $232 billion of savings over the next ten years. Some sources have soft-peddled this down to a more believable $100 billion while others have reiterated the $230 billion guesstimate.
How does the federal government profit under PPACA? Part of the money comes from unrealistic cuts in Medicare. The oft-maligned new 1099 regulations, a set of rules to attack the underground economy, account for $18 billion. Another moneymaker is the tax/fee/penalty imposed on businesses that don’t provide employee coverage by 2014. The Democrats are also counting on the tax on so-called Cadillac health plans to generate a chunk of change.
None of these revenue sources stand on their own merit. The 1099 rules are already on life support.
The House Republicans have yet to creatively and constructively begin the difficult task of restructuring the PPACA to address our system’s deficiencies. The Democrats are defending the indefensible because they can. Meanwhile, businesses are spending money to comply with laws that are still changing and the only thing we all share is uncertainty.
If you are forced to watch C-Span next week, I suggest you hit the mute button.
DAVE
www.bcandb.com
The Republicans have excitedly drawn a line in the sand. This expression couldn’t be more apropos. The common understanding is that they have marked off their territory and will defend to the death their beliefs. But we all know that this vote, and the days of debate that will precede it, are a terrible waste of time. The Republican House will pass a bill that the Democrat controlled Senate will ignore and the President would quickly veto.
The Republicans have excitedly drawn a line in the sand. Take that literally. As everyone who has ever had the pleasure of visiting a beach knows, drawing a line in the sand is a temporary act that has no value. Your line, or if you are really ambitious, your sand castle, only lasts until the next inevitable wave washes it away.
The reopening of last year’s health care debate has allowed both sides to erect and knock down their favorite straw men. If it were not for the recent tragic events in Arizona, we would have had the debate and vote this week. Instead, we are treated to a week of accusations and recriminations. Health care will have to wait till next week.
But the posturing has begun.
The Republicans talk about tyranny, about forcing citizens to have insurance to pay their medical bills. They also point to a huge new federal government program, much like No Child Left Behind, that will impose new costs and responsibilities on the states. There is nothing worse than a poorly designed, unfunded program created by the other side.
The Democrats are relishing this debate. They love to point out that children are now guaranteed issue and that their preexisting conditions must be covered. The Dems just conveniently forget to mention that Child Only policies no longer exist in most of the country. If the policy still existed, it would be wonderful for a limited number of families. Instead, lots of healthy children can no longer be covered at a reasonable price.
Other new benefits include free Medicare physicals for seniors and that adult children can now stay on their parents’ policies until they are 26. We don’t need to do scientific polling to learn that people like free stuff. Who pays for this free stuff? Well, you do of course.
The other big defense of the Patient Protection and Affordable Care Act (PPACA) is that its repeal would cost us money. Senator Sherrod Brown (D-OH) has been citing the Congressional Budget Office’s estimate. This, too, is a moving target. The Senator has used a CBO figure of $232 billion of savings over the next ten years. Some sources have soft-peddled this down to a more believable $100 billion while others have reiterated the $230 billion guesstimate.
How does the federal government profit under PPACA? Part of the money comes from unrealistic cuts in Medicare. The oft-maligned new 1099 regulations, a set of rules to attack the underground economy, account for $18 billion. Another moneymaker is the tax/fee/penalty imposed on businesses that don’t provide employee coverage by 2014. The Democrats are also counting on the tax on so-called Cadillac health plans to generate a chunk of change.
None of these revenue sources stand on their own merit. The 1099 rules are already on life support.
The House Republicans have yet to creatively and constructively begin the difficult task of restructuring the PPACA to address our system’s deficiencies. The Democrats are defending the indefensible because they can. Meanwhile, businesses are spending money to comply with laws that are still changing and the only thing we all share is uncertainty.
If you are forced to watch C-Span next week, I suggest you hit the mute button.
DAVE
www.bcandb.com
Monday, December 20, 2010
Christmas Cookies? What Would Your Boss Say?
The insurance industry and the federal government appear to be at war. They aren’t. Sure, there are times when a Congressman or the President may by vilifying my industry or some CEO is denigrating an entire political party, but these are just words and much of it is for show. As Sam Donaldson once remarked, “This is Washington. Only the amateurs get mad.” The government needs the insurers. And we all need the government.
The government / insurance industry partnership manifests itself in a number of ways. Today we are going to explore WELLNESS.
In my March 23, 2009 post, Protect Me From Myself, I discussed how my industry has been pushing Responsibility. If you would only take better care of yourself, quit smoking, and exercise more, your health care costs would decrease and your insurance might be more reasonable.
Allegedly, 75% of all claims are due to lifestyle. That’s our number and we are sticking to it.
The government has decided to test the theory. Employers are being encouraged to institute Outcome Based Wellness Programs. The employer hires an outside contractor to come in the factory or office, mostly factories, and meet with each employee. The goal of each interview:
Complete a comprehensive health care questionnaire
Record the employee’s height and weight
Take the employee’s blood pressure
Draw blood for comprehensive lab tests
Armed with this information, the wellness company can now coach the employee to quit smoking, lose weight, or better monitor his/her blood pressure. The employer is allowed to set goals for the employees and charge up to 20% more for the company’s health insurance for non-compliance.
One of these contractors, Bravo Wellness, has a helpful DVD that explains the concept. The featured employer set goals for his employees targeting:
Blood Pressure
Cholesterol
Body Mass Index
Smoking Cessation
He penalized the employees who either fell short or chose to not participate.
Programs like this require both the carrot and the stick. Employers are encouraged to incentivize (pay) their workforce to take the initial exam and screenings. People don’t rush to disclose their health information. One contractor told me that the going rate was $300. Armed with this info, the employer can institute programs to encourage better behavior.
According to the National Association of Health Underwriters Corporate Wellness Certification Program, the return on investment (ROI) on Wellness is projected as:
34% - Increased Presenteeism
25% - Reduced Medical Costs
36% - Reduced Absenteeism
5% - Reduced Disability and Workmen’s Comp claims
Seventy percent of the projected return on investment of Wellness programs are from a reduction in absenteeism and an increase in presenteeism. In other words, fewer people will call off work and those who do show up will be more focused and productive if you have a Wellness program. The other thirty percent comes from reduced medical, disability, and Workmen’s Compensation costs.
Are there enough measurable gains to make this worthwhile for an employer or is this just a gimmick? The answer – it depends. A small employer, where the owners interact with the workforce on a daily basis, might find the intrusion into the employees’ personal lives uncomfortable and inappropriate. Large employers might have no difficulty imposing a company’s lifestyle values, such as no smoking or a 27 BMI, on their faceless workers.
And that brings us back to the government. We are getting mixed messages from this administration. As the federal government berates insurers for charging extra for preexisting conditions, it also welcomes penalties for lifestyle conditions such as uncontrolled cholesterol. This may be the test run for future government run health care programs. Will the federal health plans charge these people extra? Will the feds equate a 22 BMI with a good driving discount? Will Uncle Sam be monitoring your weight?
There’s a plate of Christmas cookies on the table. Did you ask your boss or the government if two would be OK?
DAVE
www.bogartcunix.com
The government / insurance industry partnership manifests itself in a number of ways. Today we are going to explore WELLNESS.
In my March 23, 2009 post, Protect Me From Myself, I discussed how my industry has been pushing Responsibility. If you would only take better care of yourself, quit smoking, and exercise more, your health care costs would decrease and your insurance might be more reasonable.
Allegedly, 75% of all claims are due to lifestyle. That’s our number and we are sticking to it.
The government has decided to test the theory. Employers are being encouraged to institute Outcome Based Wellness Programs. The employer hires an outside contractor to come in the factory or office, mostly factories, and meet with each employee. The goal of each interview:
Complete a comprehensive health care questionnaire
Record the employee’s height and weight
Take the employee’s blood pressure
Draw blood for comprehensive lab tests
Armed with this information, the wellness company can now coach the employee to quit smoking, lose weight, or better monitor his/her blood pressure. The employer is allowed to set goals for the employees and charge up to 20% more for the company’s health insurance for non-compliance.
One of these contractors, Bravo Wellness, has a helpful DVD that explains the concept. The featured employer set goals for his employees targeting:
Blood Pressure
Cholesterol
Body Mass Index
Smoking Cessation
He penalized the employees who either fell short or chose to not participate.
Programs like this require both the carrot and the stick. Employers are encouraged to incentivize (pay) their workforce to take the initial exam and screenings. People don’t rush to disclose their health information. One contractor told me that the going rate was $300. Armed with this info, the employer can institute programs to encourage better behavior.
According to the National Association of Health Underwriters Corporate Wellness Certification Program, the return on investment (ROI) on Wellness is projected as:
34% - Increased Presenteeism
25% - Reduced Medical Costs
36% - Reduced Absenteeism
5% - Reduced Disability and Workmen’s Comp claims
Seventy percent of the projected return on investment of Wellness programs are from a reduction in absenteeism and an increase in presenteeism. In other words, fewer people will call off work and those who do show up will be more focused and productive if you have a Wellness program. The other thirty percent comes from reduced medical, disability, and Workmen’s Compensation costs.
Are there enough measurable gains to make this worthwhile for an employer or is this just a gimmick? The answer – it depends. A small employer, where the owners interact with the workforce on a daily basis, might find the intrusion into the employees’ personal lives uncomfortable and inappropriate. Large employers might have no difficulty imposing a company’s lifestyle values, such as no smoking or a 27 BMI, on their faceless workers.
And that brings us back to the government. We are getting mixed messages from this administration. As the federal government berates insurers for charging extra for preexisting conditions, it also welcomes penalties for lifestyle conditions such as uncontrolled cholesterol. This may be the test run for future government run health care programs. Will the federal health plans charge these people extra? Will the feds equate a 22 BMI with a good driving discount? Will Uncle Sam be monitoring your weight?
There’s a plate of Christmas cookies on the table. Did you ask your boss or the government if two would be OK?
DAVE
www.bogartcunix.com
Sunday, December 5, 2010
Priorities
Retiring Representative John Shadegg (R-AZ) has been a frequent guest on Morning Joe, MSNBC’s morning news and talk show. The show’s namesake and principle host is former Republican Congressman Joe Scarborough. Mr. Shadegg has always been particularly candid on Morning Joe. I caught his November 30th appearance.
Congressman Shadegg extolled the virtues of the Bush tax cuts. He warned of dire consequences if taxes reverted to the rates of the 1990’s, even if only for people making over a million dollars per year. Actually, he was most concerned about those in the top tier.
How would we pay for continuing these cuts? These tax cuts were temporary because we couldn’t pay for them nine years ago. But reducing the tax rate was supposed to be such a powerful economic driver that the resultant job creation would have more than offset the short term loss of revenue. That hasn’t happened yet. But, according to Congressman Shadegg, continuing the Bush era tax cuts will ensure a reduction in unemployment.
Congressman Shadegg’s empathy was highly selective, especially when it came to the unemployed. He was very concerned about the tax cuts that could create jobs, but not terribly worried about those people who are actually unemployed. When it came to extending the unemployment benefits for the victims of the worst recession in seventy years, Mr. Shadegg suddenly became focused on every dollar coming to and leaving from Washington. He was positive that we couldn’t afford to continue benefits to the out of work. He implied that it was a waste of money. He opined that the unemployed wouldn’t stimulate the economy since they would just hoard the money.
Mike Barnicle: “Let’s get back to what you said about unemployment checks. People don’t spend that money?”
Representative Shadegg: “No, they will spend as little as they can because they’ll hold on to it as long as they can. In reality, they don’t create jobs.”
Yes, this is Health Insurance Issues With Dave and yes, the above has everything to do with the delivery of health care in this country. Watching Representative Shadegg the other day reminded me of why I have always been concerned about single payer, government run health care.
If nothing else, the last ten years have shown us that you may have to be thirty years old to serve in the U. S. Senate, but you don’t have to be an adult. Ten years ago, at the end of a major financial growth spurt, instead of saving money for the upcoming lean period (think Joseph’s interpretation of Pharaoh’s dream), we cut taxes. When we were attacked and went to war, our youth were asked to sacrifice twice, first in blood and secondly by being saddled with incredible debt. We then invaded Iraq, but still didn’t ask the American public for any sacrifice.
Somewhere along the way we screwed up the housing market, forgot the real purpose of banks, and sold our financial soul to China. And now we have well over 10% of our workforce unemployed and we are debating whether their food and shelter are national priorities.
Ten years from now. Twenty years from now. At some point when we have all been herded into a government run health care system, will your surgery be a future Congressman Shadegg’s priority? Will this government program, unlike all other government programs, be properly funded?
You don’t have to like Medical Mutual, Anthem, or UnitedHealth Care. You may even be really ticked at the annual rate increases. But, your policy will perform as per your contract and the insurer will always have the money to pay your claim.
Keith Olbermann has been highlighting the current mess in Arizona. Governor Jan Brewer has eliminated coverage for transplants from the State’s Medicaid program. Arizona can’t afford transplants. The eighty-some people who were waiting for lungs, kidneys or livers aren’t her priority.
The President and Congress have a lot of issues to tackle in the next few weeks during the lame duck session. Tax Cuts. Unemployment Benefits. Estate Taxes. Don’t Ask, Don’t Tell. A war or two. And, Harry Reid wants to talk about gambling. They all have their own agendas. Compromises will be made. Some bills will be signed.
And somewhere in Arizona there is a young woman with Cystic Fibrosis waiting for a lung…
DAVE
www.bogartcunix.com
Congressman Shadegg extolled the virtues of the Bush tax cuts. He warned of dire consequences if taxes reverted to the rates of the 1990’s, even if only for people making over a million dollars per year. Actually, he was most concerned about those in the top tier.
How would we pay for continuing these cuts? These tax cuts were temporary because we couldn’t pay for them nine years ago. But reducing the tax rate was supposed to be such a powerful economic driver that the resultant job creation would have more than offset the short term loss of revenue. That hasn’t happened yet. But, according to Congressman Shadegg, continuing the Bush era tax cuts will ensure a reduction in unemployment.
Congressman Shadegg’s empathy was highly selective, especially when it came to the unemployed. He was very concerned about the tax cuts that could create jobs, but not terribly worried about those people who are actually unemployed. When it came to extending the unemployment benefits for the victims of the worst recession in seventy years, Mr. Shadegg suddenly became focused on every dollar coming to and leaving from Washington. He was positive that we couldn’t afford to continue benefits to the out of work. He implied that it was a waste of money. He opined that the unemployed wouldn’t stimulate the economy since they would just hoard the money.
Mike Barnicle: “Let’s get back to what you said about unemployment checks. People don’t spend that money?”
Representative Shadegg: “No, they will spend as little as they can because they’ll hold on to it as long as they can. In reality, they don’t create jobs.”
Yes, this is Health Insurance Issues With Dave and yes, the above has everything to do with the delivery of health care in this country. Watching Representative Shadegg the other day reminded me of why I have always been concerned about single payer, government run health care.
If nothing else, the last ten years have shown us that you may have to be thirty years old to serve in the U. S. Senate, but you don’t have to be an adult. Ten years ago, at the end of a major financial growth spurt, instead of saving money for the upcoming lean period (think Joseph’s interpretation of Pharaoh’s dream), we cut taxes. When we were attacked and went to war, our youth were asked to sacrifice twice, first in blood and secondly by being saddled with incredible debt. We then invaded Iraq, but still didn’t ask the American public for any sacrifice.
Somewhere along the way we screwed up the housing market, forgot the real purpose of banks, and sold our financial soul to China. And now we have well over 10% of our workforce unemployed and we are debating whether their food and shelter are national priorities.
Ten years from now. Twenty years from now. At some point when we have all been herded into a government run health care system, will your surgery be a future Congressman Shadegg’s priority? Will this government program, unlike all other government programs, be properly funded?
You don’t have to like Medical Mutual, Anthem, or UnitedHealth Care. You may even be really ticked at the annual rate increases. But, your policy will perform as per your contract and the insurer will always have the money to pay your claim.
Keith Olbermann has been highlighting the current mess in Arizona. Governor Jan Brewer has eliminated coverage for transplants from the State’s Medicaid program. Arizona can’t afford transplants. The eighty-some people who were waiting for lungs, kidneys or livers aren’t her priority.
The President and Congress have a lot of issues to tackle in the next few weeks during the lame duck session. Tax Cuts. Unemployment Benefits. Estate Taxes. Don’t Ask, Don’t Tell. A war or two. And, Harry Reid wants to talk about gambling. They all have their own agendas. Compromises will be made. Some bills will be signed.
And somewhere in Arizona there is a young woman with Cystic Fibrosis waiting for a lung…
DAVE
www.bogartcunix.com
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