Platinum, Gold, Silver, Bronze, Lead

 

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

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

PLUS PREMIUMS

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

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

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

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

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

Dave

www.cunixinsurance.com

Notes On Napkins

 

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

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

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

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

Scotland! We love their health care.

No Americans dying in the streets.

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

Mandates! OK, maybe not.

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

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

Here are the seven reforms that the Trump Administration wants Congress prepared to pass on the first day he is in office:

1. Completely repeal Obamacare and eliminate the individual mandate. “No person should be required to buy insurance unless he or she wants to.”
2. Allow the sale of health insurance across state lines as long as the plan purchased complies with state requirements.
3. Allow everyone to deduct their health insurance premiums. Suggest to the various states what they should do about Medicaid and coverage for the poor.
4. Legalize Health Savings Accounts (HSA)
5. Require price transparency.
6. Send the states money for Medicaid (Block Grants)
7. Allow foreign companies easier access to sell prescriptions in the U.S.

“The reforms outlined above will lower healthcare for all Americans.”

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

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

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

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

www.cunixinsurance.com

 

 

 

Ignorance Is Bliss

The United States is a true super power. We have wealth, power, and almost unlimited resources. What we lack, what we desperately need, is more intellectual honesty. There is no reason to believe that that is going to change anytime soon.

The debate that led up to the passage of the Patient Protection and Affordable Care Act (PPACA or Obamacare) in 2009 and 2010 was filled with undeliverable promises and sugar-coated fantasies. This blog called out several Democrats by name. And a lack of intellectual honesty seemed pretty bad until we got the debates of 2011, 2012, 2013, 2014, 2015, and now 2016. We have replaced blather with cynicism.

The cynic knows what he is attacking is safely out of reach and what he is proposing wouldn’t really work. It doesn’t matter. It is the House of Representatives voting to repeal Obamacare 60+ times. It is our nation’s most cynical politician, Senator Ted Cruz, shutting down the government in effort to call more attention to himself.

The cynic understands the issue. The ignorant does not. We have devolved to ignorance, an entirely fact-free discussion of an important issue such as our health care and 20% of our economy. This is far more dangerous. And for that we must thank super salesman Donald J. Trump.

We may all have our own opinions about whether Mr. Trump knows what he is talking about when he tackles immigration, national defense, or taxation. But I feel compelled to speak up when he invades my territory, the delivery of paid access to our health care system.

Anderson Cooper conducted town hall meetings with all six Republican candidates on CNN last week. When asked about the PPACA and health care, Mr. Trump agreed to the need for mandates before he moved to his usual self-aggrandizing answer about his large crowds and standing ovations. I was impressed simply because the word mandate means something and his acceptance meant that he might be paying attention to this issue. That impression was short-lived.

Donald Trump appeared on CNN again on Sunday. Jake Tapper interviewed Mr. Trump on The State of The Union. Here is the entire interview. Mr. Trump, fresh off his South Carolina victory, quickly backtracked on mandates. He must have been briefed on the official talking points. Though he kept on detouring to how great his plan will be and that he will make sure that sick Americans aren’t dying in our streets (a real concern), he decided that he really doesn’t like mandates and he wants to eliminate state lines. Watch the interview. Words matter and it was clear that he had no idea what any of the terms meant.

Republicans cite the Tenth Amendment almost as often as the Second. But States’ rights seem to be unimportant when it comes to insurance regulations. Eliminating state lines and having insurers sell wherever they’d like might have some eventual benefit, might, but certainly nothing in the short run.

This blog has discussed the individual mandate numerous times. We all understand that people won’t purchase car insurance unless required. Health insurance is no different. If we want to have guaranteed issue and cover preexisting conditions, we need to have everyone participating. Even the GOP 1993 plan incorporated mandates, mostly because it was a real plan.

So what was Mr. Trump talking about? Nothing! What is the Trump plan? There is none. His gut instincts might have him embracing the core values of Obamacare or its ancestor, the Republican’s 1993 plan, but he hasn’t bothered to learn the details. This isn’t a lack of intellectual honesty. This isn’t cynicism. This is simply ignorance. He doesn’t know anything about Obamacare. One can only hope that a President Trump will.

He may appear angry, but Donald Trump is a really happy guy. Damn near blissful.

DAVE

www.cunixinsurance.com

Time For A Little Firesign Theater

The real name for this post would have been How Can You Be in Two Places at Once When You're Not Anywhere at All. The link to the 1969 Firesign Theater album will let you listen to the album while you continue to read this post. Of course, if you are of a certain age, I’ve already lost you…

How can you be two places at once? How can you appear to advocate for something while you spend all of your time and energies undermining that very same thing? This being Health Insurance Issues With Dave, smart money says that this is probably about health insurance and the companies that sell it.

The major insurers want you to know that they are here for you. Ask them. They’ll tell you. The major insurers litter their public pronouncements and email communications to their agents with words like commitment and partnership. Companies such as Aetna, Cigna, Anthem and UnitedHealth Care want you, the American public, to know that they are committed to their partnership with the American people and are ready to deliver their product through the federal exchange, the state exchanges and whatever platform available to them. You can hear the Battle Hymn of the Republic playing in the background as you read the emails, the fruit of the labors of their overworked PR departments.

And this would be wonderful if it were true. But, of course, it isn’t. There would be a huge uproar if the largest insurers abandoned the exchanges. Terrible publicity. Government officials and the heads of the exchanges would all blast the insurers as bad corporate citizens and incompetents. Plus, drop out of the market and they can’t get back in for five years. So the insurers needed to find a backdoor.

The solution is to stop paying the agents. Anthem, Aetna, Cigna, UnitedHealth Care all hope that by not paying the agents during the Special Enrollment Period we will place our business with those companies who will. Sure that may push all of the clients to one or two companies from February till December, but it won’t be them. And what would happen if all of the companies stop paying the agents, so that none of us can afford to spend the hours of time necessary to match Americans to the appropriate policy and insurer? NOTHING! No one with any authority would ever notice that thousands of Americans were even more unhappy than usual with their health insurance.

The insurers are losing millions of dollars on policies written on the exchanges. The Special Enrollment Periods are being abused. The federal exchange is not enforcing the rules. Fixing the problem is an option. It would take a lot of work and require the building of trust between the exchanges and the insurers. Removing the incentive to do our jobs is easier but terribly cynical. But Congress attempted to repeal the Patient Protection and Affordable Care Act (PPACA or Obamacare) for the 60+ time last week. What is more cynical than that? So who is going to notice one more act of self-serving cynicism?

The insurers will continue to say one thing publicly and do the exact opposite privately. But like Nick Danger, we are lost on the wrong side of the album and you really can’t be two places at once.

 
DAVE
 
www.cunixinsurance.com

Running On Empty

Representative Steve King represents Ethanol. I mean Iowa. With an almost unlimited supply of taxpayer supported fake fuel it would seem impossible to imagine Rep. King running out of gas. But he has. Representative King has very little energy. Here, in its entirety, is H.R. 132. This is the bill that Mr. King authored and the Republican Congress passed a couple of weeks ago:

SECTION 1. SHORT TITLE

This Act may be cited as the “ObamaCare Repeal Act”.

SEC. 2. REPEAL OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT AND THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010.

(a) PATIENT PROTECTION AND AFFORDABLE CARE ACT.-Effective as of the enactment of the
Patient Protection and Affordable Care Act (Public Law 111-148), such Act is repealed, and
The provisions of law amended or repealed by such Act are restored or revived as if such
Act had not been enacted.

(b) HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010,-Effective as of the
Enactment of the Health Care and Education Reconciliation Act of 2010 (Public Law 111-
152), such Act is repealed, and the provisions of law amended or repealed by such Act
are restored as if such Act had not been enacted.

That’s it! That is the entire bill. Rep. King ran out of steam after two paragraphs. He didn’t even have enough energy to think what might happen if, G-d forbid, this silly bill became law.

But what if everything the Republicans said about President Obama were true? What if he really didn’t love this country? What if his real goal was to destroy this country? Signing the above act of political theater and intellectual laziness would be the fastest path to anarchy. Signing the Republican bill would have thrown 20% of the American economy and the healthcare of every American into disarray.

The PPACA is a poorly written law that has both helped and hurt many Americans. Some of you, my readers, now have insurance and access to healthcare. The elimination of underwriting, coverage for preexisting conditions, and tax credit subsidies allowed many of you to buy policies. The increased premiums and poorly designed regulations have knocked some of my clients out of the market. Love or hate the law, we all acknowledge the reality of the law. And since the law exists – rules, regulations and paperwork – the only way forward is to CHANGE the law. Rework the rules. Reengineer the regulations. Modify to a point where the law might not even be recognizable. That is possible and some of the changes might even be desirable.

There are only two problems with changing Obamacare as opposed to simply passing the mindless repeal of the law. The first is that the eventual law might still give President Barack Obama credit for getting something accomplished. The other problem is that fixing the Patient Protection and Affordable Care Act would be a lot of work. Real work. And Steve King doesn’t have the energy for that. When it comes to ideas, Rep. King is running on empty.

DAVE

Why Do You Have An HSA?

The presents have been opened and some have already been exchanged. Now it is time to take stock of what we actually purchased for ourselves and our families this year. And while we are second-guessing that hoverboard decision, we might also want to make time to understand that new health policy we purchased for next year.

Some of the most popular policies in our market carry the letters HSA in their names. Many of you intentionally purchased this type of policy and intend to take full advantage of the tax advantages. Most people were simply purchasing the cheapest policy available, the one with limited benefits before you reach a high deductible.

To carry the HSA designation, the health policy must have a high-deductible (HDHP). The plan can not have office or Rx copays prior to the deductible being met. The Patient Protection and Affordable Care Act (PPACA or Obamacare) requires the policy to include “first-dollar” coverage for preventive services such as an annual routine physical, medical screening tests (like a colonoscopy), well-baby care, and certain medications. The maximum-out-of-pocket for 2016 is $6,550.

If your policy meets the above criteria, you are allowed to open a Health Savings Account.

It is only cheap insurance unless you open the Health Savings Account. The HSA may be opened through your insurer or at almost any bank. The money that you deposit into the account is tax deductible. You may then use the money, tax free, to pay qualified medical expenses. And the account isn’t use it or lose it. Unused funds roll over to the next year.

2016 Contribution Limits

Individuals      $3,350
Family              $6,750

HSA Catch-up Contributions $1,000

Contributing to your Health Savings Account does not solve all problems. Lots of you are singles purchasing $6,000 deductible policies. Even a maximum contribution to your HSA still leaves thousands of dollars of exposure should you happen to have an accident or unexpected illness. The best of these policies pays 100% of covered charges once the deductible has been met. Some still have coinsurance and only pay 80% or 70% until you have reached your maximum-out-of-pocket.

Whether you intentionally purchased a High Deductible Health Plan with the goal of opening a Health Savings Account or just bought the only insurance you could afford, it is important that you try to make the policy work for you. Either way, lose the hoverboard.

DAVE

www.bcandb.com

No Client Left Behind

The Patient Protection and Affordable Care Act (PPACA or Obamacare) is the insurance equivalent of No Child Left Behind – incredibly frustrating and just as many mindless tests.

We are now through the first phase of this year’s Open Enrollment Period. This would be a good time to catch our breath and review our progress.

This computer stuff is harder than it looks. Our current crop of presidential aspirants constantly discuss shutting off part of the internet or controlling access to certain individuals. They discuss the internet and computers as if they were seasoned mechanics assessing a Chevy. This is year three of the Exchange. On Monday I had to switch to Chrome and enter everything in ALL CAPS to get the site to work. Sure it doesn’t crash as often as it did last year, but if this was my Chevy I would have utilized the Lemon Law to dump it long ago.

The computer issue isn’t limited to the government. A client asked to change her deductible for 2016. This was an off-Exchange policy so we only needed to visit the insurer’s website. The insurer, a big one, will remain nameless. It took over an hour to make an easy change. I would never send a client there which is a problem since the insurers are expecting their websites to carry the load as they cut back on staff.

Saying Goodbye. Some insurers have decided that selling on the Exchange is a losing proposition. Sheer incompetence has overcome others. Many of the Co-ops created under the PPACA have already been shuttered. UnitedHealth Care has announced that they will be pulling out of the Exchange. And then there is HealthSpan…

Cryin’ Won’t Help You. The first full year of the PPACA brought lots of tears. There were tears of joy as the previously uninsured gained coverage and others saved thousands. There were tears of frustration from dealing with healthcare.gov and the national call center. And there were tears of anger as some were blocked from coverage for up to a year. Now it is mostly tears of the betrayed.

I had to explain to a young family why they couldn’t have reasonable coverage. They own a small business and live in a Cleveland suburb. In 2015 they had qualified for a heavily subsidized Silver Level Medical Mutual policy based on their income in the mid 40’s. In 2016 they will get $355. That is only 35% of the cheapest Anthem Silver policy, the least expensive unfettered access to University Hospital. The cheapest Medical Mutual Silver policy is a touch more. It would cost them $669.99 per month. They can’t afford that. The subsidy is designed to give them access to the second lowest Silver Level policy. That would be an awful contract from CareSource. (Yes, their office is directly above mine.) For $366.65 per month this family can go to Akron General, MetroHealth, and LakeWest. There is nothing inherently bad about any of these facilities, but would you sacrifice 10% of your income for insurance that bars you from University Hospital and The Cleveland Clinic? I wouldn’t.

Deductibles. Fewer good choices and skyrocketing premiums have forced people to increase their deductibles. $4,000 and $6,000 deductibles are common. What is not common are the savings accounts necessary to withstand the hit of an unexpected illness or accident. How long will it be before doctors and hospitals ask for a credit card with your insurance card? The answer is SOON.

We have more people covered. We have more people covered badly. We have an insurance bubble, no less serious than the housing bubble of eight years ago. We are all along for the ride. And no client will be left behind.

 

DAVE