Monthly Archives: October 2009

Health Care Reform – Really?

I started this blog this past summer to promote intelligent discussion about health care reform issues and points.   Over the past couple of months health care reform, as crafted by the Democratic party, has degraded into nothing more than an assault on anyone that has the money to pay more taxes.    Those that object, or raise arguments against legislation are targeted with tags of villianization, taxes, surcharges or all of the above.  


In September, Health insurers were issued gag orders forbidding them from communicating objections to legislation.  When the Public option, which I call the “pay the government instead option” was met with resistance by seniors and providers, legislation to cut $500 billion in Medicare benefits and providers was introduced.    For those providing insurance, medical equipment or services, $40 billion a year in new taxes starting in 2010.   (Guess who really pays?  The consumer)  The argument that legislation will cut the deficit by $80 billion is advertised,  the fact that there are $1 trillion in new taxes is trivialized.


This week I received a copy of letter from the head of the CBO to Senator Max Baucus, dated 10/30/09.  It contains this little blurb:


 That is, CBO has not evaluated whether reform proposals would lower or raise—or bend down or up the “curve” of national health expenditures. Finally, the question of what impact proposals might have on health insurance premiums is also of considerable interest. CBO intends to address that issue in the near future.


 


Really?   We are going to have $1 trillion in new taxes and the CBO never looked at if health care expenses will go down?   Does Washington think this is a Halloween prank?


A vote was taken, and you lose

The number of updates to my Blog has dwindled over the past couple of weeks.  The Truth is that I just can’t keep up with the silliness from D.C.  


·         11% of Federal Employees entitled to the same medical plan that Congress and the President have, are uninsured.    Can’t afford it. 


 


·         The much maligned October 2009 study from PriceWaterhouse showing that the impact of health insurance costs if the bill passes, for a family, rising $4,000 more than if the legislation was not passed has caused trouble for the industry.   I agree that the study was overkill and not without questionable assumptions.   What I know is not overkill.  Without gender based pricing, which will no longer be allowed,  and with maternity benefits mandatory,  a 29 year old male in Chicago will instantly see his premium go, for a $500 deductible plan from a current $197 to more than $325 per month.   That assumes no inflation, no change in reimbursement rates to doctors, stable premiums, and a 15% discount for everyone having the benefits.   


·         Hay Dare!   The Canadian System – 


o   In 2005, the Supreme Court of Canada struck down the ban on Private Insurance stating “”Access to a waiting list is not access to health care,”.  I Suspect that any health care reform in the US will give you guaranteed access to a waiting list. 


o   In 2006, the national health policy goal, of 75% of those needing bypass surgeries. getting the operation within 180 days of diagnosis, was not even met by two provinces.  


o   Here’s an interesting Canadian Company. http://www.timelymedical.ca/about-us.html.  Why do they exist and can I get a US franchise?


o   The Code word to get an MRI in Canada is “Meow”.   See this Sept 2009 story from ABC’s 20/20 on YouTube.   


·         Medicare Advantage Plans – This is when seniors opt out of Medicare to take a private insurance plan that gives them all the benefits of Medicare plus additional benefits like drugs, dental, vision and hearing benefits.   A senior on “Medicare Advantage” Plans pays little or no premium to the insurer.  They don’t pay the $97 for Medicare Part B, they don’t pay the $125-250 for a Medicare Supplement.   These plans cost the government 14% more than straight Medicare.   That 14% will be cut, and benefits to those members will be cut.    It saves the government $100 billion over ten years, but it will result in those least able having to pay as much as $300-$400 month extra to replace those benefits.    


 


·         Cut the Deficit by $81 Billion says the CBO – What I don’t understand is why $900 Billion in new taxes, higher medical premiums to the public, and $500 billion in Medicare Cuts don’t result in $1.4 Trillion in deficit reduction.   How about we just cut $500 billion from Medicare and cut the deficit by $500 billion.   If that was doable, it would be done.  It’s not.   The $81 billion assumption assumes that in 2011, Medicare reimbursement rates will be reduced by nearly 26%, and that those reductions will stick, year after year.  Uh-Huh! 


 


·         Reasonable People will cancel their health Insurance December 31, 2012.   Get your letters ready.   


o   The president of the National Association of Health Underwriters, an organization representing more than 100,000 health insurance agents, on October 14th, 2009 told his audience that costs for insurance will rise at a greater rate than without legislation.   He also told that audience that he believes that reasonable people will continue to have health insurance after reform legislation.   I agree that that costs will rise.   I do not agree that reasonable people will retain health insurance.  


o   Assuming you pay for your own insurance, and currently pay about $15,000 per year in premium, why would you continue to pay for insurance?   If you don’t have insurance, you will pay a $600 fine, maybe.  (Maybe because the excise tax is only collectable on tax refunds and they will not accrue penalties or interest).  If you need insurance, you can get it, ON DEMAND, without a preexisting condition clause.   Hmmm… Spend $15,000 even if I don’t need it, or a $600 tax…. When I need it, I am guaranteed to get it.  Well, I must have missed the continuing education course that says “reasonable people” is synonymous for “sucker” in insurance-eze.


·         Health Insurance executives limited compensation.  The new health care bill will include a provision that limits the tax deductibility of wages for health insurance executives from earning more than $500,000 per year.   And who can blame Washington for that?  After all wasn’t it the health insurers that took $700 billion in bailout money?  Wait, that was banking.   Or was it that they went bankrupt and the government had to subsidize a Cash for Klutzes program?   No… not them either… Well it must be that they are responsible for the mortgage mess?   High interest rates?  Soaring oil prices?  Gotta be something right?      In a related story, the average Major League Baseball player salary rose to over $3,000,000 this year.   


 


Well at least insurance agents will exist – In early bills; Insurance agents will be replaced by Government “Navigators”.   No it’s not a big Lincoln SUV.   It’s the term for the new 800 number outsourced to lots of “BOB’s and SUE’s” to help you with your insurance options.  That provision looks like it’s out of the current bills.   At least people like me will be here for a while to help you send in your cancellation letters to the insurance company.   (But not until 12/31/2012!)

Look for the “Public Option” to again gain traction in the next few weeks.


 


 

Major Shift on Health Care Reform?

Is a major shift in Health Care legislation direction afoot? 

Over the past couple of weeks, Health Care legislation has moved down the list of today’s top stories.  
Thanks, in part, the Health and Human Services “Gag Order” prohibiting insurance companies from telling their members that the $124 billion cut in financing will lead to a reduction of benefits,   http://abcnews.go.com/Video/playerIndex?id=8645242  for the lack of recent discourse.   It’s not allowed.   ( If you didn’t know about that you are encouraged to see the ABC news story link)

After ABC’s Stephanopoulos took on President Obama’s definition of the word “tax” on his Sunday Morning News Program, the Senate Democrats have modified one of the key components of the Baucus bill lowering the “tax/not a tax penalty for not having insurance from a maximum of $3900 to $1500-ish (depends of the report).    Aside from the estimated $30 billion in New Taxes, It appears that the reactive consequences of the bill are now being considered.


For purposes of Illustration, I will use Chicago area pricing, and assume 0% inflation.  


·         Currently a 28 year old male, non smoker,  can get a $500 deductible 80/20 health plan from Blue Cross with a $20 copay and Rx card for $ 223.31


·         A 28 year old female, same situation, without maternity would pay $292.00


·         If that Female wants maternity coverage, her cost would be $642.98


Under the new law, Males and female would be charged the same price and maternity would be mandated coverage.   Thus under the new bill, all 28 year olds, would pay $433.15.   This nets out to be a 94% increase for males, and 48% for females over current rates.   


While you might argue that the cost for maternity would come down with more people in the pool, the question remains “why would anyone buy insurance?”.   There won’t be a larger pool.  


Under the new law, an individual would have guarantee issue, no pre-ex clause, access to insurance.   An individual could choose to pay a “tax/no tax” penalty of $500-$750 per year and then,  IF they needed insurance, buy coverage at the hospital.    Reasonable people will not buy insurance.   There is no reason too.   Get it only if you need it, and then you have guaranteed access with no pre-ex clause.   Wow!  That’s Great, huh?  


Under the bill, the only people with insurance will be the poor and those over age 65 on Medicare.   Currently those that have the means, who are uninsured, are viewed as practicing bad behavior.   Under the new law, you would be practicing foolish behavior to have insurance.   It appears that Washington is beginning to recognize that consquence.


So who wins here?   Apple, of Course !   200 million new apps to auto-enroll you in insurance if you need it.   There’s an App for that!