The Defense Rests

It is exhausting.  This choice.  This job.  This desire to craft a non-ideological, pragmatic path is taking all of my energy.  Confronted daily by people who either cannot, or will not, see the full picture that is the Patient Protection and Affordable Care Act (PPACA or Obamacare), I find myself calming the fears of its detractors or clarifying the rules to its biggest supporters.  To the right, and the righter than right, I find myself defending the law, or at the very least, the need for change.  Defending the insurers from the left could be a full time job in of itself.

Randy (name changed) called Friday.  He wanted to know when they were going to cancel his group health insurance policy.

Why would Medical Mutual cancel your company’s insurance?

Because my policy doesn’t cover any women or children.

But you don’t have any female employees, right?

Yeah, but they’re gonna cancel me!

OY, Randy, you’ve been watching FOX again.

It took fifteen minutes to reassure Randy.  Now, no one on FOX really said that a small business would lose its health insurance if there weren't any women or children on the policy.  That’s silly.  But the daily barrage of negativity, conspiracy theories, and half-truths take their toll on the viewers.  One day you’re a concerned business owner.  The next you are trying to get one of your employees to get married so that you can retain your group coverage.

It doesn’t get any better on MSNBC.  With neither an ounce of irony nor embarrassment, the outpost of the left gives us Howard Dean, the former governor of Vermont.  I’m sure that an extensive GOOGLE search might find an instance when Gov. Dean knew what he was talking about.  I’m just positive that none of his pronouncements about health insurance or the PPACA have any basis in reality.

For example, Governor Dean was recently discussing the disastrous roll-out and the policy cancellations.  He was on Morning Joe and several other shows.  He opined that all the President had to do was to hire a bunch of unemployed kids, put them in a call center, and have them ring up everyone whose policy had been cancelled.  The kids could enroll everyone into Obamacare!

I doubt that approach would be welcome in Vermont, a state with less than half the population of Greater Cleveland.  I know that wouldn’t fly here.  Who explains the policies to the “kids”?  Vermont may have only one or two insurers and only a few options, but Ohio, California, and any other state that has an actual city or two will have multiple insurers and dozens of choices.  But on one has ever explained insurance, or economics, or city life to Governor Dean.  And there is absolutely no reason to do so now.

40 vs. 5

The PPACA was sold to the American public as a universal win.  Everyone would get better, more comprehensive health insurance for a lower monthly premium.  This blog has repeatedly pointed out that that was not possible.  The airwaves are now filled with the horror stories of cancelled policies and jacked-up premiums.  The right emphasizes every problem, real or imagined.  The left has a new argument – Isn’t it OK to inconvenience five million people so that 40 MILLION AMERICANS can now get access to affordable health care?

What a bunch of hooey.  This wasn’t a Hobson’s choice.  It wasn’t remake our entire system or do nothing to help the uninsured and the under-insured in our country.  We could have accomplished much of that goal by expanding Medicaid.  You don’t score many points by minimizing someone else’s loss.

I have watched my words parsed in the comment sections of Facebook and the AOL Patch.  The attorneys and attorney wanna-be’s who troll for fights can’t tolerate civil discussions.  One guy was convinced that all insurers will cancel their clients at the first sign of a claim.  Another reader is positive that the PPACA is the harbinger of the Apocalypse.  The extremes are so extreme.  The middle is lonely and damn near empty.

For the record:

• Insurers pay claims.  My clients have benefited from their coverage.
• The status quo was not sustainable.
• There is a kernel of truth in everything you see and hear on FOX and MSNBC.  You need more than kernels.  You need a meal.

Take a deep breath.  We will all get through this together.  But for the moment, the defense rests.

DAVE

www.bcandb.com

Where Do They Bury The Survivors?

A plane crashes on the Mexican – United States border. On board were U.S. citizens, Mexicans, Brazilians, and three passengers from Argentina. Where so they bury the survivors?

It is a classic misdirect. A mental sleight of hand. You know the answer. We don’t bury survivors.

Sleight of hand is an art. The best practitioners can shake your hand while they lift your watch and wallet. The trick for us is to watch them at work without becoming a victim.

I recently received an urgent email. A client forwarded Newt Gingrich’s article, “Obamacare’s Marriage Penalty and Divorce Incentive.” Was this true? Is the President anti-marriage?

Newt Gingrich as the defender of the sanctity of marriage? Guard your wallet!

I won’t bore you with the numbers. The federal subsidies are based on the size of the family, the ages of the insured, and are factored on the federal poverty level. A married couple with one child doesn’t need 33% more income when they have a second child. Couples don’t need twice as much income as singles to pay for food and shelter.

Will a few people get divorced to get a bigger health insurance subsidy? Perhaps. Of course, that also means that these people will pay more state and federal income tax. These things have a way of balancing out in the end.

The bottom line is that Newt Gingrich knows that this is irrelevant. Newt would be campaigning against government waste and another inefficient entitlement program if the subsidies were calculated differently. It is just a sleight of hand.

We should, by now, be used to this from our politicians. Sometimes it is a mental misdirect. Sometimes it is a misstatement. And there are other instances when the politician tells the truth, technically, but what he/she said and what we heard are not even closely the same.

Example? My favorite is “If you like your policy, you can keep it. Period”. Balderdash.

I wasn’t in the room when the President and his advisors crafted that perfect slogan. “If you like your policy, you can keep it. Period.” So clear. So emphatic. So wrong. Did the President and his advisors intentionally mislead the country, or more likely, did we have a room full of people who had no idea what they were talking about?

• Over 80% of Americans get their insurance coverage through work. If you are one of them, you don’t choose your plan, your employer does. It is not up to you.
• Only policies on the books prior to the passage of the law and unchanged since that day, March 23, 2010, are grandfathered.
• How long can the insurers run two separate sets of books? Policies issued prior to March 2010 have one set of rules while new policies have another. Who pays the additional cost to maintain the old contracts and monitor compliance?

This blog has tackled the grandfather issue repeatedly since August 2, 2010’s, Don’t Cry Uncle, Stay Grandfathered. Retroactive rules. Contradictory edicts. Those of us who actually work in the insurance business knew that we would see very few individual or small group policies limp across the finish line on January 1, 2014.

The President is shocked that many Americans are now losing their current policies and being forced into new, more expensive contracts.

There are some awful policies on the market that will disappear on January 1^st. There are some policies that have a $25,000 or $50,000 cap. Those plans were cheap, but they did not really cover a major illness. However, about 11 million Americans are covered by comprehensive policies that will be cancelled in the next twelve months. These plans don’t conform to the new rules.

My policy is scheduled to end a year from now. Why? Because it doesn’t cover me for maternity. If nothing changes in the next twelve months, my premium will more than double next December. Of course I like my policy. And no, I can’t keep it.

The Patient Protection and Affordable Care Act (PPACA) will, eventually, help many Americans. But it would be foolish to dismiss out of hand those people who are angry or upset. You can’t just bury their fears with the survivors.

DAVE

Picture from the Passen Law Group www.passenlaw.com

Crashed

Frank (name changed) is a successful attorney in his early 40’s. He lives in Greater Cleveland. On Friday he completed his health insurance application, hit the submit button, and watched the website crash. This message, in bold red and blue, flashed onto his screen:

Application Wizard

• We apologize but there was an issue with our system when submitting your application. If we were able to process your application, we will send you an email within the next hour and you will not need to do anything else. If you do not receive an email from us within the next hour, then please return to this site and submit the application to us again.

Yes, purchasing a health insurance policy in 2013 can, at times, appear daunting. But Frank wasn’t dealing with the federal exchange. The computer issue had nothing to do with the Patient Protection and Affordable Care Act (PPACA). Frank was submitting an application for a 2013 policy with Anthem Blue Cross.

Alert the media! Contact Rush! Websites crash or are shut down for routine maintenance. No one died and no one got fired.

Anthem’s producer/applicant portal was down for about six hours. Frank’s application has been accepted and by the time you read this, he may have been approved.

The exchange roll out has been a mess. Even insurance agents, professionals long familiar with the complexity of working with insurers, the government, and the public, were surprised at how unprepared the government was for this vast undertaking. We even had advance warning. Agents have had eight years of Medicare Part D (Rx) and Medicare Advantage training, seven to nine wasted hours each August. And this year we were treated to the special training classes and tests to sell on the federally run exchange as detailed in You Put Your Left Foot In. CMM (Centers for Medicare and Medicaid Services), the agency administering the agent authorization process, is still having website issues.

This is a program designed by bureaucrats who know how to make things complicated but may have no idea how to make things work.

What has been lost in this P.R. disaster is just how irrelevant all of this has been. The most important thing to remember is that the new policies don’t start until January 1, 2014. Applications accepted on October 1^st or December 10^th still have the same effective date. Anthem Blue Cross is not going to run out of policies. You don’t need to be the first in line.

Of course, everyone with an ax to grind has jumped into the discussion. Online insurance marketers have “volunteered” to save the day and take over the process. If the federal government would only suspend common sense and a myriad of state and federal laws, an e-marketer could corner the market and restore order. Those offers have landed with a thud.

Equally self-serving have been the Republican members of Congress who have complained about the problems their constituents are having with the roll out. You can’t spend three and a half years actively trying to sabotage a program and then complain when it doesn’t work perfectly. And please, don’t shed tears for the sick and uninsured who are having difficulty enrolling in the now available coverage. There isn’t a Republican plan to cover any of these people.

There is a bi-partisan support to bump back the “Individual Mandate” for another year. Why force people to purchase insurance if the website is difficult to access? I’m surprised that this hasn’t already happened. Everybody wins.

• The Republicans score a moral victory. Being against anything President Obama favors enhances their campaign donations. Winning a meaningless battle shows activity.
• The Democrats show flexibility and are allowed, once again, to play the part of the martyr.
• Big business, the unions, and the insurers see this as one step closer to a Single Payer system. By now you are sick of hearing TV commentators talking about the Young Invincibles, the young, healthy Americans who must be forced into the system for it to work. If healthy people don’t sign up, the system devolves into a Death Spiral and implodes under its own weight.

Delaying, or worse, eliminating the Individual Mandate hastens the conversion to a Single Payer system.

The exchange website and all of its attendant issues aren’t our biggest challenge as a country. It is our lack of intellectual honesty that will be our undoing. Disorganized and unprepared, we are heading for a crash.

DAVE

www.bcandb.com

The New Normal

Under the old rules, the underwriting rules we’ve lived by for decades, health insurance premiums were determined by risk.  Healthy people paid less than those that weren’t.  We asked questions such as:

Do you smoke?
What is your height and weight?
What medications do you take and why?

The new rules under the Patient Protection and Affordable Care Act (PPACA) eliminate underwriting.  The new rules have us charging everyone the same premium regardless of health.  The only questions now are:

Do you smoke? (old habits die hard)
How old are you?
Where do you live?

How is that working?

Angie (name changed) is a 55 year old owner of a successful home-based business here in Greater Cleveland.  She purchases her own health insurance.  Angie is not a preferred risk.  Her $4,000 deductible HSA (Health Savings Account) policy was not rated Tier 1.  Nor Tier 2.  Tier 3.  Tier 4.  She wasn’t rated Tier 5.  Nor Tier 6.  Tier 7.  Tier 8.  Not even Tier 9.  Angie, a few years post-surgery, was issued, after intense negotiations, at TIER 10.  Her current premium is $482 per month.

How much will her premium be under the new system, a system that doesn’t ask health questions and doesn’t factor in previous illnesses?

HSA Qualified Policy                                        Premium

  $3,000 deductible                                           $518.41

  $6,000 deductible                                           $369.63

Those numbers are real.  Tier 10 is the new normal.

The new 2014 policies would provide Angie coverage for maternity, though at 55 she’s willing to accept that risk.  Her current policy, issued in 2013, already has preventive care and an unlimited maximum benefit.

Much to the chagrin of some of the bureaucrats in Washington and the advocates around the country, the insurance companies, billion dollar corporations, understood who will be applying for health insurance in the next few months.  The doors are being thrown open (well, the exchanges will work eventually) and these are the first applicants:

Our currently insured who have been highly rated
High risk clients covered by  state mandated guaranteed issue contracts
Very unhealthy Americans who can't afford those guaranteed issue policies

These people need affordable health insurance.  More importantly, they need access to health care, but the PPACA does not necessarily meet that need.  Many of the very people this law was meant to serve were surprised when I told them the price.  Some were expecting free.  Almost everyone thought for sure that the premium would be less.

The insurers have no interest in losing their existing clients. For some reason the people pushing the PPACA, the government and the advocates, thought that the insurance companies would dump their entire book of business into the new insurance pools.  Sure this might allow the new clients to pay less initially, right up until all of the young and/or healthy dropped their coverage.  Then what?

Local insurers – Medical Mutual of Ohio, Anthem Blue Cross, UnitedHealth One, etc… - are offering their existing clients an opportunity to renew their policies as of December 1, 2013.  Sign a form and you get to keep your current policy until next December.  What happens in December 2014?  G-d only knows.

This is survival.  The insurers are stocking the pond.  In an effort to attract more 2013 business, major insurers have adjusted their underwriting.  Anthem blue Cross has suddenly decided that maybe smoking isn’t that bad.  Other companies have made similar short term changes.

Are you paying attention?  If you are going to qualify for a major subsidy, if you are suffering from a serious, expensive to treat illness, or if you have had a debilitating accident, you may be significantly better off thanks to the PPACA.  But if none of the above apply to you, then there is still a little time left to get in under the old system, to play by the old rules, to pay premiums based on your risk.

You have a small window before you become a part of the new normal.

DAVE

www.bcandb.com

 

 

Plotting Your Escape From The PPACA

William was damned near ecstatic. My client had a right to be. William is a 57 year old self-employed Republican pragmatist. He is also very unhealthy. There are no imminent threats. He just suffers from the kinds of things that causes health insurance companies to run away. William’s current health insurance, a $5,000 deductible HSA qualified contract, is $1,055 per month. On January 1, 2014 his premium plummets to $404.

William is now a huge fan of the Patient Protection and Affordable Care Act (PPACA). And if you, like Bill, are paying a lot of money for your health insurance due to your significant health problems, then the new law may save you a lot of money, too. Today’s blog is not for you.

Today’s blog is for those Americans who are reasonably healthy, do not need maternity coverage, and have an income above 400% of the federal poverty level. This is also a post for those people who will not qualify for a federal subsidy for a number of other reasons. The following will actually be relevant for a lot more people than you might think.

WARNING

Today’s blog post includes numbers. Lots and lots of numbers. Stay with me. This is your money.

The exchanges opened October 1^st. There have been, predictably, significant computer issues that will be resolved in time. Some of our insurers are still trying to get their policies and applications approved. I have been advising my clients to ignore the new system until November 1^st.

I finally received Medical Mutual of Ohio’s 2014 rates. We don’t have applications, just rates. Here is how the PPACA affects a healthy 58 year old who happens to be fond of a good cigar (ME!).

Current Policy - $5,000 deductible HSA qualified contract - $310 per month

New 2014 Policy - $6,000 deductible HSA qualified contract - $633 per month

If you will bear with me, I will give you a more complete look at some real numbers. The following is a Medical Mutual of Ohio policy, $6,000 HSA qualified contract, for a non-smoker. The 2013 rates assume the insured is healthy. We no longer care in 2014 as we begin to utilize community rating.


                     2013                                                                        2014
            Male          Female                                                  Male and Female
22     $ 55.21         $ 75.43                                                        $166.75
42        92.68          135.67                                                          219.62
62      244.92          254.09                                                          476.20

Community rating is great if you are the sickest guy on your street.

All of these policies, new in 2013 and new for 2014, cover preventive care at 100%. The 2014 policies also cover maternity the same as any other medical condition. But if you don’t have a serious pre-existing condition and you don’t need maternity, you don’t need one of the new 2014 policies.

How do you escape the PPACA if it isn’t going to help you? Get coverage now! A policy purchased now, effective now, eludes the PPACA till the end of 2014. What will we do a year from now? I don’t know, but I would rather save $3,600 over the next year and see what develops.

The Department of Health and Human Services (HHS) has been forced to create this on the fly. Let’s give them an extra year to get this right. If you allow yourself to be victimized by the PPACA, it is your own damn fault.

DAVE

www.bcandb.com

Why Are You Afraid?

This is a blog. You, Dear Readers, are viewing this online either on the blog’s home site or on the AOL Patch System. You are comfortable online and this is probably only one of several blogs that you read on a regular basis. We know how to research issues. We know how to find the information we need to help us form our opinions or to confirm our long held beliefs.

Our comfort with the internet allows us to laugh at the television reports that paint an issue in strictly solid black or solid white. We can, if we wish, quickly go online and find the shades of gray.

But what if you don’t have internet access? What if you not only don’t have a computer, but you really don’t know how to use one? Then you are at the mercy of your news sources – TV, the newspaper, the radio, and your friends. And many of your news sources like to keep you nervous. Scared to death. Many, but not all.

Monica Robbins is the Senior Health Correspondent at WKYC, Channel 3. Ms. Robbins has been covering health issues in the Greater Cleveland market for over ten years. She and her station have worked diligently to demystify the Patient Protection and Affordable Care Act (PPACA) from its inception. The WKYC website and her on air reports have attempted to answer viewers’ questions in a straight-forward, non-political fashion.

In an effort to build on a mission of providing information instead of fear, Monica Robbins invited the local chapter of the National Association of Health Underwriters (NAHU) to spend three hours last night fielding viewers’ questions. Channel 3 set up a phone bank, brought in snacks and sandwiches, and promoted our availability online, during Dr. Phil, and on the evening news broadcast.

We received nearly 300 phone calls!

There was a common thread that ran through the vast majority of the calls that I received, FEAR. The people who called were afraid of “Obamacare”. How was the new law going to affect them? Would they lose their coverage? Will they be able to afford their new policies?

A third of my calls were from people on Medicare. Aside from the improvements in the Medicare Part D (Rx) benefits, Medicare is pretty much untouched by the PPACA. But my 11^th caller was a nervous 68 year old. His buddy told him that the premium for his Medicare Supplement was going to be four times higher next year due to Obamacare. Some friend. There was the 66 year old who was concerned about her vitamin D prescription. And there was the woman in her mid-fifties, still recovering from the surgeries to remove brain tumors, who had been told that the new policies would not cover liver transplants for anyone over 60. There is nothing in the law that prohibits liver transplants for 61 year olds, and she doesn’t need a transplant, but she has heard the reports and she is worried.

There wasn’t a single call, not one, from someone who will be hurt by the new law. My fifth call was a grandmother inquiring about coverage for her 22 year old granddaughter. The young woman is an uninsured college student. I had several calls from people who had lost their jobs, could not afford to exercise their COBRA option, and were now uninsured. Most had dependent children. The PPACA doesn't benefit everyone. What law could? But the concern and fear fueling these calls was a direct result of negative, often fact-less, political messaging.

Two of my calls came from people who were paying a lot of money for their or their spouse’s employer sponsored group health insurance plans. I couldn’t promise that the new health plans would be cheaper. I could reassure them that they will have choices and the opportunity to shop for alternate coverage.

Many of our callers just needed a safe website that could answer their questions. This one, created by the Ohio Association of Health Underwriters, even has a subsidy calculator. I patiently repeated the actual web address for them as they wrote it down before heading to the public library to access the internet.



We were supposed to start at 5 PM, but the phones started to ring before that. After an hour I turned to Ms. Robbins and Ingrid Martin, our Board Member who had helped to organize this, and asked when we were going to do this again. They had already agreed to the need. They appreciated our mutual commitment to helping Greater Clevelanders in making this transition. I’m sure we will be back again in a few weeks.

I, of course, am looking forward to doing this again. A veteran of numerous charity telethons, I love answering the phone on TV. That and we were too busy to meet Russ Mitchell when he came down to say hello. He and I share a real appreciation of Gino Vannelli.

DAVE

www.bcandb.com

A (Lack of) Progress Report

The car was careening down the hill. The driver, desperate to stop, never touched the brake pedal. Instead, he grabbed the emergency parking lever with both hands and violently pulled it towards himself. It snapped off! The car picked up speed. The driver opened the door and abandoned the car. He got up. Dusted himself off. And as he watched the out-of-control vehicle continue down the hill he declared that whatever happens, happens. It was not his problem since he was no longer driving the car.

The Patient Protection and Affordable Car Act (PPACA) was signed into law March 23, 2010. We have seen plenty of changes in how we pay for our health care delivery system over the last 3 ½ years. But the biggest changes are scheduled for October 1, 2013.

Are we ready?

If you are a regular reader of this blog, you know the answer – Not Quite.

Let’s start with the policies. As of right now, the cupboard is empty. Anthem, Medical Mutual of Ohio, etc… are waiting for final approval. Even if the policies are all approved on Monday, September 23^rd, how do they all get loaded into the various computer quoting systems in eight days? Brochures? Ads? Supporting documentation? Is it realistic to believe that everything can be up and running in a week?

The new online insurance shopping portal, the Exchange, is another area of concern. Once policies are loaded into the computers, how will we access them? The insurers and agents are still wading through a convoluted system that is being created on the fly. We are spending big bucks to create websites that will allow individuals to go to one site, plug in their information to determine their personal premium subsidies, and then apply for coverage. Those connections are not in place.

The government is also not ready. The software created to determine how much premium subsidy someone would receive is still not functioning at 100%. Brian Cook of the Centers for Medicare and Medicaid Services (CMS) states that they have been rigorously testing the software for a year. OK, but it is still failing. Many people will base their choice of coverage on the net price of the policies. If the subsidy calculations are wrong, we have the potential for real problems. Can this be resolved in the next week? That may be possible.

Those are some of the challenges we face to implement the President’s health care law. Are these insurmountable? Not really.

First and foremost, the October 1 date is not a drop-dead deadline. If everything was working, Americans could begin to purchase policies on October 1^st that would become effective on January 1, 2014. It doesn’t matter whether the policy is purchased on October 1^st or December 7^th, the policy is still not going to start until January. If the exchanges aren’t ready until November 1^st, we can still have people covered January 1^st.

The PPACA is a poorly written bill that attempted to do too much in too little time. I have talked to our elected representatives, staffers, and Health and Human Services (HHS) employees. They are not evil. They mean well, but they may be in over their heads.

And that brings us to Senator Ted Cruz. Mr. Cruz spends an inordinate amount of time talking about defunding “Obamacare”. Let’s be clear – we are not repealing nor defunding the PPACA. Mr. Cruz’s entire cynical campaign is a tactless fundraiser and a desperate cry for attention. Shockingly, even political commentators on FOX are now calling him out as a huckster.

The insurance industry has spent millions upon millions of dollars to comply with this law. The states have spent as much if not more. Every business, even ones with only one employee, has had to complete forms and make decisions about health insurance. Most of the policies for sale today will no longer be available in a few months.

Repeal the PPACA? Will all of the money, the time, and the effort of the last 3 ½ years be for naught? Which of the regulations stay on the books? Which disappear? Who will tell the sick that their insurance will cease on December 31^st?

The people leading the charge to repeal the PPACA or worse, to simply defund it, will only serve to make a muddled mess worse. They understand that the Patient Protection and Affordable Care Act could have been slowed or stopped by gently applying the brakes sometime over the last 3 years. But they never touched the brakes. Now the PPACA can’t be stopped.

The legislators who never tried to constructively modify the PPACA would like you to believe that they bear no responsibility for any of the problems. They jumped out of the car.

We’re at the bottom of the hill.

DAVE

www.bcandb.com