Health Insurance Reform Blog

Bulletin: 12/23/09 - COBRA Subsidy Extended

HealthInsure.com — Wed, 23 Dec 2009 19:14:00 GMT

President Signs COBRA Subsidy Extension Legislation

Extends the premium subsidy eligibility period by two months, so it will end on February 28, 2010, rather than December 31, 2009.
Extends the period of the 65 percent COBRA subsidy from nine months to 15 months.
Establishes a transition period that applies to individuals who lost subsidies before the effective date of the Act because they received the maximum number of months of subsidies under the original subsidy provisions.
Establishes new notification requirements by group health plans or other entities.
Clarifies that eligibility and notice requirements for the subsidy are based on eligibility for COBRA due to loss of coverage because of qualifying event (involuntary termination of employment), both of which must occur during the eligibility period.

Becomes effective as if included in the original COBRA subsidy provisions of the American Recovery and Reinvestment Act (ARRA).

Merry Christmas.

Health Reform a Moving Target

HealthInsure.com — Thu, 17 Dec 2009 21:16:00 GMT

It has been weeks since I have published any new articles on health care reform. I wanted to get out a general update out to those that read my interpretations. It’s hard to latch on to a general theory or pattern since the House version was dead when it passed, and the Senate version changes more frequently than the weather.

The popularity of health care reform has dropped to its lowest levels since it was first outlined early in the summer. There is an outside chance that it will not pass, but it is my opinion that some form of reform will pass. Some of the changes are well intended but poorly executed. The overriding reason that I believe that some form of reform will pass is because it is loaded with taxes in the first few years, which is good for the deficit, and the benefits are not set to kick in until the next Presidential term, leaving the next White House and/or Congress to take away benefits from the “poor and uninsured”. I quotation the term because reform will not necessarily benefit the poor and uninsured, but you can count on anyone being cut from benefits as being defined as “poor or uninsured”.

Health care reform should contain:

Cost containment provisions.

Penalties for those that try to beat the system.
Subsidies for those that can’t afford care, and then provide them with good CATASTROPHIC coverage, and a sliding scale of benefits for day-to-day expenses, based on income.
Incentives and rewards for those that have played by the rules. If you try and beat the system by not being insured, you are guaranteed insurance, but at higher costs than someone who has maintained coverage.
Incentives to obtain lower cost coverage.
Pre-ex elimination and guarantee to issue coverage.
Elimination of Discounts based on membership. As a consumer the cost of your service is based on your provider, not your insurer negotiated discount.
Better Fraud control’s on Medicare.

What I believe will be in the bill.

No Cost Containment

Some disincentive for those that try and beat the system, but not enough to change the economic decision of the individual to choose to try and beat the system.
$50 billion in new taxes to be passed on to the consumer.
No reward for staying insured.
No incentive to obtain lower cost care.
Elimination of Pre-ex.
No change on provider discounts.
A health insurance exchange to create new competition, but most likely won’t be competitive.
“To heck with fraud”, lets just cut everybody. (sarcasm) – The government can’t seem to manage fraud, or even mount an attempt. They just will build in the basis that everybody cheats them, so cut everybody.

I interpret the market reaction to be.

Better access to coverage for those with pre-ex conditions, but at a higher cost to all.

Less incentive for employer paid insurance.
Higher costs from private insurers because of standardized benefit increases and guaranteed access.
Much higher costs for young males. (As much as 100% higher for those under 35.)
Lower cost for people age 55 and over. ( Due to price band implementation changes)
Greater burden for State Medicaid programs, which could result in some States dropping Medicaid for the poor forcing a Federal programs to provide coverage.

In my opinion, the best option is to let the taxpaying and voting members of this society argue in public forum in 2010 what we collectively want. Then each district can elect someone who represents one path or another, and we collectively come together to solve a serious problem.

Have a Merry Christmas and Happy Holiday!

Breaking News: House Passes Health Care Reform

HealthInsure.com — Sun, 08 Nov 2009 04:09:00 GMT

At 11:09pm Eastern Time, the House of Representatives passed sweeping health care reform legislation with HB3962.   The vote was 220- 215 , with 39 Democrats voting against Health Care reform. One republican voted for the bill.   176 Repubilcans opposed the bill.

The bill, over 2000 pages, includes a Public Option. An amendment passed tonight that banned Abortion coverage being included with any Public Option or private plan where federal subsidies are involved. Rep. Jan Schakowski argued vehemently for abortion funding , but was unsuccessful in getting that amendment killed.

President Obama mentioned today that 14,000 people are losing their health insurance every day.   He did not mention that the reason that they are losing insurance is because the economy in contracting, and people are losing their employer based health care. Perhaps it would be wiser to cut taxes and stimilulate Job growth instead of adding taxing those that still have jobs. The bill will include appx. $400 billion in new taxes on the health care industry over the next 10 years.   Those taxes start January 1, 2010. (in 54 days)

Why AARP Supports Health Care Reform

HealthInsure.com — Thu, 05 Nov 2009 04:51:00 GMT

The coming health reform bill, (please pardon my reference to this bill as being related to actual health reform) is going to garner the support of AARP. I felt the need to vent on my opinion as to why.

Health insurance and health care is a very tricky and confusing subject. Let me admit publically, if I haven’t before, I wouldn’t have a career if health insurance was easy. One might argue that my bias would be to promote my own agenda. I respect that potential conflict and have never taken issue with anyone questioning my ethics. I purposely steer clear of any opinion on subjects that would impact, either positively or negatively, my income. That said, other special interest groups do not appear to be as noble. Thus, the subject of today’s blog post, those good folks at AARP.

AARP is a special interest group with interests in Media, Insurance, and Financial products. AARP is bigger than most regional health insurance companies and has the largest circulation of any magazine. They don’t represent themselves as a magazine company like TIME, an Insurance company like Aetna or United Healthcare, A mutual fund company like Fidelity, or even a federally funded private company . Yet they are all of these. Their public policy, allegedly representing the wholesome interests of seniors, is really just another marketing group profiteering off the backs of seniors. Business week Magazine wrote in 2005 that their products are typically not scrutinized for cost and quality.

AARP public policy has consistently stood on the side of issues that increase its revenue and profit. Over the past 10 years, AARP has increased their insurance revenues by several hundred percent. They did so by branding and associating their name with insurance products from United Healthcare and Aetna. When Medicare Part D – the Rx Drug part of social security, they were obviously advocates for the program, but were also positioned to add hundreds of millions of dollars in revenue to their income statement, per yet. They did, and good for them too! They are a very successful business and they continue to brand themselves in ways to increase revenue and profitability. What AARP is not, is a social conscience. Much like a Union tries to negotiate on behalf of its members for the most possible without being concerned for the profitability of the owners, AARP lobby’s for interests that are good for their own bottom line.

One of the main arguments from insurance companies, and against this reform bill, is the level of benefit funding for Medicare Advantage Plan members . The insurance companies were not only criticized for telling their members that Government cuts would result in benefit cuts, HHS actually issued a gag-order preventing insurance carriers from disseminating that information to its members. It was seen as a conflict of interest with questionable conclusions.

Those who have Medicare Advantage plans, have no need for a Medicare Supplement. Thus millions of seniors who took Medicare Advantage coverage from insurance companies, do not need or buy a Medicare Supplement from AARP. “Coincidentally”, those millions of seniors who get Medicare Advantage benefits from insurance companies, and who’s benefits stand to be cut significantly with this reform bill, don’t appear to be represented in AARP policy papers. Not one single article from AARP this year on the negative impact from the health bills. If Medicare Advantage benefits are cut, the prospect of millions of seniors abandoning this coverage will then need a Medicare Supplement. Hey!!! AARP sells that !!!

Medicare.gov, a government website describes Medicare Advantage plans as “They generally offer extra benefits, and many include prescription drug coverage”. So why doesn’t AARP care about these seniors? It seems easier to understand if you consider that AARP is not a social conscience, but a financial services and insurance company.

If you assume that I might have a bias, I would also assume that a company whose royalties tripled after Medicare Part D passed, and who would stand to increase revenues by as much as $400 million per year if the House Health care bill is made law, might have a biased opinion.

AARP is disingenuous and their endorsement of the House Bill is self serving. Shame on AARP.

Health Care Reform - Really?

HealthInsure.com — Sat, 31 Oct 2009 18:26:00 GMT

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

HealthInsure.com — Thu, 15 Oct 2009 02:18:00 GMT

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 14^th, 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?

HealthInsure.com — Mon, 05 Oct 2009 17:00:00 GMT

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!

The Witch Hunt is on.

HealthInsure.com — Sat, 19 Sep 2009 21:06:00 GMT

As someone who dedicates their life to best serving the needs of clients and making sure that they are adequately protected from the "real" holes in insurance, I am completely overwhelmed by the amount of disinformation and villianization of the entire health insurance industry. I am equally shocked by the general lack of understanding of how the insurance system works, even on the most basic level.

There is a growing and disturbing amount of propaganda appearing in conservative and liberal publications seemingly for no other purpose to sell media. The lack of research people of authority or influence conduct before weighing in with an, all knowing, summary is, in my opinion, inciting. Over the past week, I have stumbled on to two enormous articles with, an apparent, intentional misrepresentations of facts and reason.

On September 18^th, the Chicago Tribune, featured a page-1, Jon Yates, article on the plight of a suburban family who’s 17 year old daughter had coverage rescinded. The article went to great length to imply that the carrier, American Community, acted abusively, in rescinding coverage for this child. The article implied that American Community had a pattern of rescinding coverage for those with claims. I decided to make contact with the carrier contact and learned that the company spokesperson had been berated with hate mail and wishes of her death.

Understated and minimized in the article was that the parents had “forgot to write down” a few things like dizziness, fatigue, persistent cough, and high cholesterol lab work even though the same parents were concerned enough to repeatedly go to the doctor about those conditions. The writer went on to say that the insurance company premium was $130 per month, while guaranteed issue insurance from Illinois Chip averages $7666 per year, and as much as $16,000 per year, implying that American Community baited the applicant into applying with the intent to cancel if a problem comes up. The Truth was that the child could have paid as little as $157 per month for coverage with no preexisting condition clause and no more than $257 for the best plan offered by the State. Lastly, while subtitled that “Illinois Director concerned about carrier’s number of rescissions”, it made small mention that the Illinois department of Insurance upheld all 11 of the rescissions over the past two years.

On September 17^th, A UPS Syndicated columnist pulled the same thing. Titled “Pray for insurance”, she took issue with the insurer for cancelling her coverage after a cancer claim. She wrote “It had obviously stayed up nights searching out a reason to rid itself of this tiresome journalist”. (Wow, that would be terrible if a carrier did that.) Oh yeah, by the way, the reason they cancelled her? BECAUSE SHE WAS NO LONGER AN EMPLOYEE AT THE FIRM. She had been terminated as an employee and was only an independent contractor, and no longer eligible. (Maybe her firm wrongly terminated her too) She argued that she has paid for insurance for 50 years and thus apparently was entitled to coverage at a firm where she no longer was an active employee. If she thinks she is an employee there and entitled to benefits, it’s an issue for the IRS.

The writer, Georgie Anne Geyer, went on to say that she was offered COBRA, which she referred to as “the government's interim insurance system” for $454 per month, then Medicare, and a Medicare Supplement. Well, Ms. Geyer, COBRA is not a government interim insurance system. COBRA is Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985. It allows you to stay on your employer’s health plan for up to 36 months after you leave your job. You pay a 2% premium over the cost to the employer, with that 2% covering the administrative cost to collect money for you and administer your benefits. Since you are apparently over 65, you received your coverage at an approximate 50% discount to the actual, incremental cost. She went on to imply that because her 36 year old daughter has cancer, she may soon be out on the street if the insurance cancels her, which it hasn’t done. She also incorrectly states that her daughter would not be eligible for Medicare, although 3 million people under age 65 are currently on Medicare. This article is not news or opinion; it is a call to action, mob action.

While the 1^st amendment insures the right of free speech, the Supreme Court of the United States has ruled in Schenck v. United States in 1919, and Brandenburg V. Ohio, in 1969, that inflammatory speech directing or incenting imminent and lawless action, was not protected by the 1^st amendment rights. The town hall meetings have shown that health care is a topic that results in visceral, emotional, and at times, violent actions. It can’t keep going this way. From my view, I would rather discuss proactive change than discuss reactive defense.

Rep. Joe Wilson Disgraced his Office

HealthInsure.com — Fri, 11 Sep 2009 03:30:00 GMT

Representative Joe Wilson summarized the lack of respect that exists in our country towards those with other opinions by yelling at President Obama “Lie” during his address to a Joint Session of Congress and the nation.

While I am not prepared to offer commentary on a bill that has yet to be proposed, I would like to address the issue that Rep. Wilson addressed in that one word. Rep. Wilson yelled when President Obama said that there would not be benefits for people here illegally. The rudeness aside, was he right?

HB3200 specifically states that House version of the health care bill explicitly prohibits spending any federal money to help illegal immigrants get health care coverage. Specifically the bill states “Nothing in this subtitle shall allow federal payments for affordability credits on behalf of individuals who are not lawfully in the United States”. So what’s the issue? Well… with individual insurance guarantee-to-issue with no preex clause, AND a carrier may not rescind coverage, an illegal immigrant would be permitted to participate and benefit from that law. Ok, ok. That’s not a smoking gun that justifies the rudeness.

What is not in the bill is a provision or consideration that enables or outlines how that prohibition would be enforced nor is there any requirement for people to prove that they are here legally before receiving benefits. Perhaps this is an omission that will be corrected, right? Well….. A Republican amendment that would have required people to verify their legal status and eligibility for benefits was defeated by Democrats who argued that these requirements would be too burdensome for people entitled to benefits.

Since I wasn’t in the Ways and Means committee meeting, nor have I personally reviewed the minutes of the meeting, I am going to source the defeated amendment statement: (ERICA WERNER, Associated Press Writer Erica Werner, Associated Press Writer – Thu Sep 10, 6:00 pm ET)

Conclusion: Rep. Joe Wilson, Rude and highly inappropriate under any circumstance. Accuracy?: You tell me.

Senate Health Care Bill Summary, Leaked

HealthInsure.com — Wed, 09 Sep 2009 02:44:00 GMT

The Senate Health Care Bill has not yet been published, but a summary of the bill has been leaked. The bill is probably passable with minor adjustments and lobbying efforts. It will likely get the universal support of conservative Democrats, even some Republicans. Those numbers will probably be larger than the number of defecting liberal Democrats who will undoubtedly be against the bill. (Having Liberal Democratic objection, even boisterous at times, is a smart political move to gain Centrist support.)

I have argued since the introduction of HR3200 that the reason for the quick legislation was not about true reform, but rather addressing two issues that can’t be openly discussed in Washington. (ref: Why is this happening now, so quickly? Is there a secret? 7/17/09). Those reasons? A tax increase and rescission of the Medicare Revitalization Act of 2003, MRA 2003 was designed to slow medicare growth rates.

Here are the two items that start in 2010:

The scheduled 21% reduction in Medicare physician payment rates in 2010 would be replaced with a 0.5% increase.
Big Business Fees - Clinical Labs: $750mm per year fee, Big Pharma: $2.3 billion per year, Medical Device Mfg.: $4 billion per year, Health Insurance companies: $6 billion per year.

Highlights of the rest of the bill, with specific interest to those with group or individual insurance plans, starting in 2013:

It will make individual insurance guarantee-to-issue in 2013.
Fines for individuals without insurance starting in 2013. Up to $3800 per family.
Age control pricing: - no more than 500% variance from age 20 to age 64.
Group pricing band mandates: - (1-50 ee's) changes phased in over 5 years starting in 2013.   9 year phase in for groups of 50-100.
2 year tax credit for groups with less than 25 employees.   Up to 50% of cost.
Employers with more than 50 employees not offering coverage pay $400 fee, per employee.
Employers with more than 200 employees must enroll the member in their health plan unless other coverage can be proven.
35% Surtax on group medical benefits providing more than $8000 per individual, $21,000 per family.  Value of benefits will be disclosed on w-2.
Cross State Exchange to purchase coverage for individuals starting in 2015.
Standardized benefit minimums.
Standardized coinsurance plans, from 65% minimum to 90% maximum. .Plus a "young invincible" plan to allow for low-cost coverage for young people.
Maximized out of pocket limits not to exceed HSA limits.
Co-ops - to allow buying power. Incentives and funding for non-profits to form co-ops.
Medicare Advantage Plans remain.
HRA, HSA, and Flex Spending Accounts limited to $2000 max.
Penalty on using HSA money for non medical expenses increased from 10% to 20%.

A summary of Health Care Reform with key articles

HealthInsure.com — Tue, 08 Sep 2009 15:52:00 GMT

Tomorrow President Obama goes on national TV and before a joint session of Congress to re-clarify his position on the necessity of meaningful health care reform. With two months of fear mongering from the right, and industry nationalizing calls from the left, I believe that President Obama will attempt to deliver a more centrist view of the issues and the needs as he sees it.

There is so much misleading and exhausting information out there that any clear message may be successful if only because centrists are tired of the rhetoric and hyper-claims from both hard liberals and staunch conservatives.

With a new direction at hand, this seems like a good time to review the key articles on the blog so that you can follow the progression of the arguments and assess how accurate my view has been.

As stated here before, the goal no longer appears to be about fixing health care, but rather SAYING that you fixed health care. Both sides will give themselves a hearty pat on the back claiming victory, and very little will be accomplished except a tax increase and the undoing of the 2003 Medicare Revitalization Act. A villain will be identified and addressed (insurance companies), but ultimately this won’t mean much to many. I believe that we should be debating a Single payer system versus an open market, self limiting system that would manage costs by incenting physicians to lower their cost structure.

Here are my key articles from the past couple of months.

Why Health care reform is being pushed so hard ( July 17^th) : http://bloghealthinsurance.com/2009/07/17/why-is-this-happening-now-so-quickly--is-there-a-secret.aspx
A view of insurance under HR3200 and why so many centrists ended up objecting (July 21) - http://bloghealthinsurance.com/2009/07/21/my-outlook-of-how-the-health-reform-bills-as-they-exist-would-work-on-a-year-to-year-basis.aspx
Who is uninsured? It will be interesting to see who is really helped by the next legislative piece. ( July 22) : http://bloghealthinsurance.com/2009/07/22/healthcare-reform-would-have-to-include-immigration-reform.aspx
A market study of the Ambulance industry under HR3200 ( August 4^th) - http://bloghealthinsurance.com/2009/08/04/the-public-option-flash-point.aspx
My summary of what changes would make a significant difference in reducing costs for all. This bill, if passed would reduce costs for all and make insurance much more affordable to those with income limitations. (August 19^th). - http://bloghealthinsurance.com/2009/08/19/health-care-reform-part-2.aspx

President Obama signals shift on Health Care Reform

HealthInsure.com — Sun, 06 Sep 2009 17:15:00 GMT

Obama Press Secy. David Axelrod indidated to David Gregory on Meet the Press that the President will not insist on a Pulbic Option.

This signals that a compromise is at hand. Look for that compromise to be a tax increase to finance insurance pools.

Health Insurance Co-op / Exchange. The Debate for Next Week

HealthInsure.com — Fri, 04 Sep 2009 19:24:00 GMT

Next week President Obama will address a joint session of Congress in an attempt to get some form of health care legislation passed. It’s reasonable to believe that liberal democrats will be miffed that President Obama may not publicly support the Public Option anymore. Instead he may press forward with a more limited scope plan that will address some of the major issues.

Likely to get enough support to pass will be, even with some bipartisanship, will be:

Elimination of the preexisting condition clause. (In general a good thing, but will raise costs for all since less healthy people will now have easier access to coverage. Some form of non-enforceable mandate to have coverage will accompany it. If structured incorrectly or without meaningful enforcement, there could be substantial incentive to go uninsured until you need it, counteracting In addition, it may create an unfunded mandate to States.
Revocation of upcoming Trigger reductions in Medicare reimbursement rates to providers. Effectively killing the Medicare Modernization act of 2003. (Again, a necessary reality. Designed to moderate Medicare growth rates equal to the rate of overall inflation, the principals were ill-conceived and have resulted in cost shifting as opposed to cost reductions)
New Federal Subsidies for lower income people to get health insurance. (With the higher cost of coverage, will it help?)
Higher Taxes to pay for items #2 & #3.

If the “public option” is abandoned in favor of, THE HEALTH INSURANCE EXCHANGE, the savings in premium will be offset by non-covered expenses. The argument that opening up insurance across State lines will lower cost, is virtual certainty. The reason that the cost would be lower probably won’t be as openly discussed. (At least not by Republicans) In an interstate insurance situation, the States with the least amount of benefit protection and greatest amount of tort regulation are sure to dominate. (A sub-desire of conservatives to impose tort reform) For example, If Illinois mandates mammograms with maternity and fertility coverage and Nebraska has none of those mandates, the Nebraska plan would be much cheaper. Continuing that line of thinking, if you have guaranteed access to coverage, people will flock to the lower coverage parameters. If higher-coverage insurers only attract only high-users there is no base of membership to spread risk around and the cost of better coverage will become unaffordable or disappear altogether. Liberal Democrats are sure to argue against an Exchange, and they are probably right to do so.

The second new term, also favored by Republicans, would be buying Co-ops. The Congressional budget report showed that total insurance Administrative costs range from 7% for large groups to as much as 32% for individuals. The 32% number is skewed to high number because of the minimum fixed cost involved in maintaining a single policy. When you see an ad on TV showing a premium of $60 per month, an administrative cost for that policy @ 32% is about $19. Conversely, if a group premium is $1200 per month for the family, 7% is $84 per month. Individual plan premiums are consistently priced, significantly below the average premium of a group health plan. In a new structure, those rural areas and areas where the average income is lower may have more limited access to benefit advisors who can no longer afford to provide them information on choices available. Co-ops also would offer more opportunity for abuse and misrepresentation of fees. For example a Chamber of Commerce could form a co-op, charge management or association fees in addition to administrative expenses from the insurer, providing less visibility on the true administrative costs to the member.

If limited to a choice between the Public Option, The Insurance Exchange across State lines, or the Co-op, I favor the co-op. I make that choice because it would not diminish a State’s right to protect its citizens. Ultimately, none of the options above are going to lower costs of healthcare, although all the plans offer some legislative correction to some market issues that have not effectively self corrected.

Health Reform on the Wrong Track

HealthInsure.com — Fri, 04 Sep 2009 16:22:00 GMT

While the status of the “public option” is still unclear, it does seem that both parties seem to be more focused on discrediting each others ideas and plans, rather than promoting things good for the American People as a whole. The desire for an acceptable plan to a greater number of people may lower the common denominator to make any reform different, but not substantively better.

The unfortunate reality is that science and technology have advanced beyond the point of being able to pay for it. The Congressional Budget Office report in December 2008 on health care, which contains lots of conflicting data, did point out that by the year 2082 (Yes, 2082), that health care will cross the 50% of Gross Domestic Product line. A laughable statistic, but indicative of the path we are on. It is a reality that some body, either public or private, will have to ration care at an ever increasing level. In that both State and local governments are built to say “Yes” instead of “No”, and we elect legislators based on the amount of “YES” that they bring back to each of us, I prefer that a for-profit system as a better way to control costs. The example of true market-forces health care is cosmetic surgery. In general, procedures available 10 years ago, cost far less today. In a competitive system with multi-carriers, if carrier “A” says No, you can move to carrier “B”. In a public system, you can’t move from the US to France or Canada.

The Public option, as presented in HR3200 does not offer cost control or provide reason or incentive for providers to be more price competitive. It does not lower their costs to provide service. It does not reduce their collection costs from members. The public options main driver of viability is the belief by many, with limited statistical evidence, that the government can operate more cost-effectively than private industry. In addition, the Public Option shifts more people to mandated reimbursement rates below provider costs, forcing those providers to either raise prices to non-Public option members, or to drop from providing service to members with a government plan. Gerald Ford’s WIN campaign in 1974, (Whip Inflation Now) designed to temper 6% inflation, proved that forced government price shifting, and delays of market forces, have devastating counter effects later. (Inflation averaged 10% per year for the next 8 years)

If the goal of health reform is to offer better access to health care AND control costs, the Public Option is the wrong flash point. The real debate should be between a single payer system and a free market system as described in http://bloghealthinsurance.com/2009/08/19/health-care-reform-part-2.aspx