Georgia Health Insurance 411

Archive for July, 2009

Mr. Fixit’s latest pitch for bigger health insurance relies on false assumptions.

A new study by the White House Council of Economic Advisers said small businesses pay up to 18 percent more to provide health insurance for their employees.

This begs the question, 18% more than what?

Small companies pay proportionately more than big ones because they lack bargaining power and face higher administrative costs, the study found. It said that effectively levied a “heavy tax” on small businesses and their employees.

Small companies may pay more as a percent of total revenues in much the same way as a $20,000 wage earner uses more (expressed as a percent of income) to pay for food than does a $200,000 wage earner.

Small businesses have no less bargaining power than a big business and the marginal cost of administering a small group plan vs a large group plan is minimal. A business with 5 employees enjoys the same discounts on medical services via the PPO network as a larger business.

The “heavy tax” a small business pays is nothing compared to what they will pay when Washington reforms health care and gives us bigger health insurance.

A proposal in the House calls for employers with a total payroll above $250,000 to offer health insurance to their workers or face a surtax of as much as 8 percent. A Senate committee version would require all businesses, except those with fewer than 25 employees, to provide health coverage or pay a $750 fine per year for each worker.

Right now the “heavy tax” is voluntary. Either the employer CHOOSES to offer health insurance or not.

With Obamacare that is no longer an option.

All businesses will pay in one way or another and that additional cost will be passed on as a hidden tax in the form of higher prices paid by their customers.

Among the provisions in draft legislation viewed favorably by the administration are: an “insurance exchange” allowing small businesses that meet certain criteria to be able to purchase health insurance from a multitude of plans; and tax credits to help small businesses pay for the coverage.

The idea of an insurance exchange lowering costs is pure BS. Policies offered by the exchange, at least as proposed in the House bills, are considerably more expensive than policies offered in today’s open market.

Exchange policies will have mandatory guaranteed issue, community rating, coverage for children from birth to age 21 (including immunizations and hearing), mental health parity, maternity and will provide payment to mid-wives at the same reimbursement level as an OB. Will someone explain how all of these NEW benefits can be provided at a lower cost than policies that do not currently include these provisions?

Further, the idea that the exchange will have lower admin costs and save the small employer from the 18% “heavy tax” is pure fantasy.

I have a great deal of experience in developing and managing association health plans and PEO’s. While it is true some economies will result from administering a handful of plans (usually 3 or less) over a large number of covered participants there is no real savings on the whole.

If rates in the exchange are lower than for similar coverage outside the exchange, and if a truly free market exists, groups will gravitate to the lower priced exchange. But not all small employers will realize a savings by moving to an exchange policy.

Some will want benefits that are not as rich as the exchange policy and will opt out. Others may move into the exchange but as soon as they can find a lower priced policy outside the exchange they will leave.

This assumes they have the freedom to move and freedom to select their own benefits.

Of course the House version of health care reform eliminates these possibilities.

Christina Romer, head of the Council of Economic Advisers, said such provisions would enable small businesses to be “more able to compete with the big boys” in selling their goods and services and “able to compete fairly on a level playing field with big businesses to attract the best workers,”

“The vast majority of small businesses, they’ll see their burdens absolutely lessened by the expansion of coverage,” Romer said in a conference call with reporters. “So they are absolutely going to be more competitive.”

What is Christina Romer smoking? Nothing could be further from the truth.

If this Obamanation of a health care plan passes the economy will worsen and more people will find themselves out of work, and unable to afford health insurance than ever.

Smaller cars, bigger health insurance, Poppa Washington.

Don’t you just love it when politicians tell you there will be no new taxes to fund a new program? It’s as if they can make money magically appear out of thin air (and to an extent they do).

But why is it no one is really asking the tough questions. You know, such as “how will WE pay for it?”

A new hidden tax went into effect today. Not related to health care but supposedly designed to stimulate the economy. The hidden tax comes in the form of a $0.75 per hour increase in the minimum wage.

The DOL says the increase will lead to new spending which will help the economy.

Right . . .

What if the employer lay’s off workers, or fails to hire new workers, or cut’s back on hours worked by minimum wage employees? How does this help the economy?

Or maybe the employer doesn’t do any of that but instead raises prices to compensate for the higher wage?

Since most of the folks in Washington have never owned a business, much less held a real job, they would not understand this basic fact.

There are also hidden taxes in health care reform. Things they are not telling you about.

Consider this tidbit from Greg Johnson of the Knoxville News Sentinel.

A key component to the Obama plan is the expansion of Medicaid. Since the federal government funds part of Medicaid and the states pay a portion, any increase would necessarily mean more costs at the state level. “Medicaid is a poor vehicle for expanding coverage,” Bredesen told the Times. “It’s not health care reform to dump more money into Medicaid.”

With a $1 trillion federal price tag, how much might Obama’s health care reform cost at the state level? Sen. Lamar Alexander, R-Tenn., offered an estimate last month. “This bill is so expensive, it will literally bankrupt states,” Alexander said. “Just the expansion of Medicaid in the bill could cost Tennessee $1.2 billion a year by 2015, according to the state Medicaid director.”

$1.2 billion is a lot to ask from 6.2 million residents of Tennessee, and 2015 isn’t that far off.

If Obama strong-arms enough of his reckless, feckless colleagues in Congress to pass this bill, how might Tennessee come up with $1.2 billion? “This is about the amount of money,” Alexander said, “a new 10 percent state income tax would raise.”

10% is hefty as well.

Guess the goal would be to earn no income and avoid paying the tax. Of course if you did that you would qualify for Medicaid.

Smaller cars, bigger health insurance, Poppa Washington.

An unscripted moment caught Mr. Fixit flat footed when he had no idea about details of the Pelosi Health Care Plan.

With the public’s trust in his handling of health care tanking (50%-44% of Americans disapprove), the White House has launched a new phase of its strategy designed to pass Obamacare: all Obama, all the time. As part of that effort, Obama hosted a conference call with leftist bloggers urging them to pressure Congress to pass his health plan as soon as possible.

During the call, a blogger from Maine said he kept running into an Investors Business Daily article that claimed Section 102 of the House health legislation would outlaw private insurance. He asked: “Is this true? Will people be able to keep their insurance and will insurers be able to write new policies even though H.R. 3200 is passed?” President Obama replied: “You know, I have to say that I am not familiar with the provision you are talking about.”

Not familiar.

Is he bluffing, or is he really that out of touch?

Either way, it’s pretty scary.

This is a truly disturbing admission by the President, especially considering that later in the call, Obama promises yet again: “If you have health insurance, and you like it, and you have a doctor that you like, then you can keep it. Period.” How can Obama keep making this promise if he is not familiar with the health legislation that is being written in Congress? Details matter.

This is kind of like saying he didn’t know the Pope was Catholic.

Maybe someone needs to slip information about the details of the Pelosi Plan to TOTUS.

The House bill does allow private insurance to be sold, but only “Exchange-participating health benefits plans.” In order to qualify as an ?Exchange-participating health benefits plan,? all health insurance plans must conform to a slew of new regulations, including community rating and guaranteed issue. These will all send the cost of private individual health insurance skyrocketing. Furthermore, all these new regulations would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage as well. Until, of course, it becomes so expensive that your company makes the perfectly economical decision to dump you into the government plan.

Yep, the cost of health insurance will INCREASE, not decrease. Skyrocket is putting it mildly.

President Obama may not care to study how many people will lose their current health insurance if his plan becomes law, but like most Americans, we do. That is why we partnered with the Lewin Group to study how many Americans would be forced into the government “option” under the House health plan. Here is what we found:

Approximately 103 million people would be covered under the new public plan and, as a consequence, about 83.4 million people would lose their private insurance. This would represent a 48.4 percent reduction in the number of people with private coverage.

About 88.1 million workers would see their current private, employer-sponsored health plan go away and would be shifted to the public plan.

Yearly premiums for the typical American with private coverage could go up by as much as $460 per privately-insured person, as a result of increased cost-shifting stemming from a public plan modeled on Medicare.

Smaller cars, bigger health insurance, Poppa Washington.

In an effort to peddle his health care plan, Obamaman is facing stiff competition from Susan Boyle.

PresBO wanted to do his snake oil pitch at 9 PM Wednesday but the networks, except for the Katie Couric channel, were reluctant to give up the ad revenue to carry Barry and TOTUS.

CBS, which airs only repeats that evening, agreed early Monday to cover the conference.

But for NBC, Fox and ABC, the decision was tougher. During a summer that’s otherwise strewn with repeats, Wednesday includes all of their top-rated reality programs.

Fox declined outright to air the news conference.

The stakes were particularly high for NBC, which airs the most-watched show of the summer, “America’s Got Talent,” at 9 p.m. This week, the reality hit includes a heavily promoted interview with “Britain’s Got Talent” singing sensation Susan Boyle.

So there you have it.

America’s Got Talent with Susan Boyle, or POTUS and TOTUS.

No contest.

Smaller cars, bigger health insurance, Poppa Washington.

The latest fly in the ointment of health care reform is whether the new plan(s) will cover abortions.

No one want’s to handle that hot potato.

An Obama administration official refused Sunday to rule out the possibility that federal tax money might be used to pay for abortions under proposed health care legislation.

Peter R. Orszag, the White House budget director, asked whether he was prepared to say that “no taxpayer money will go to pay for abortions,” answered: “I am not prepared to say explicitly that right now. It’s obviously a controversial issue, and it’s one of the questions that is playing out in this debate.”

Why all the secrecy?

Or is it just ignorance?

Either way, we have a right to know how our tax dollars will be spent.

In an analysis of the House bill, the National Right to Life Committee said that ordinary principles of administrative law could allow the Obama administration to determine what would be included in the benefits package. “There is no doubt,” the group said, “that coverage of abortion will be mandated, unless Congress explicitly excludes abortion from the scope of federal authority to define ‘essential benefits.’ ”

“No doubt” may be an accurate assessment or just inflammatory rhetoric. I can’t say one way or the other.

What I don’t like is Washington telling me what kind of policy I must buy and what kind of benefits it must cover.

Susan M. Pisano, a spokeswoman for America’s Health Insurance Plans, a trade group, said that most insurance companies offered benefit packages that included abortion coverage but that many employers decided not to buy such packages.

That may no longer be an option under the change you can believe in health insurance plan.

Since 1976, Congress has imposed sweeping restrictions on the use of federal money for abortions. The Hyde Amendment, for instance, prohibits the Medicaid program from spending federal money on most abortions.

If abortions have been debated for 33 years you would think the folks in Congress would be able to answer a direct question.

Apparently not.

Smaller cars, bigger health insurance, Poppa Washington.

A few months ago we penned our review of a blogpost by Richard Scott on what he termed “Fannie Med“. In Mr. Scott’s post he drew parallels between the mortgage meltdown and health care reform.

A scant 3 months later we are caught up in a full court press debate over health care reform that seems to be moving forward in blitzkrieg fashion. Issues surrounding health care which have been a concern for some for at least 40 years have suddenly become a crisis.

For some reason, spending more than you take in is not a crisis but solving a “problem” that has existed for years is a crisis.

Go figure.

What would happen if Fannie Med became a reality? What if some of the lending practices of the last 10 years were applied to the health care crisis?

It is well known that anyone who wanted a mortgage could get one through what were referred to as “liar loans”. These stated income, no documentation loans were offered to nearly anyone regardless of their ability to pay back the loan.

Proof of citizenship was not required, neither did you need to prove your income . . . or if you even had an income. You could apply for a loan with nothing more than the shirt on your back and get approved.

The good part (for the borrower at least) was you never had to worry about paying it back. If you missed your mortgage payment, no big deal. After a few months the lender foreclosed and you were out on the street.

What if the same criteria is used to solve the health care crisis?

Anyone can get health insurance regardless of citizenship or ability to pay for the coverage. Just like everyone needs a place to sleep at night, everyone needs health care.

So Fannie Med comes to the rescue and gives health insurance to everyone, regardless of their ability to pay and without regard to their medical conditions.

This grand scheme certainly has a nice ring to it. The wealthiest nation in the world, the one that once tried to give housing to anyone who wanted it will now give health insurance to anyone who asks.

But what if you can’t pay your premiums, or for the health care that is not covered by insurance? What happens then?

But first consider this.

National unemployment is currently 9.7% and the foreclosure rate is “only” 4%. That means 1 out of 10 are unemployed and looking for work.

1 out of 25 have lost their homes to foreclosure but this number is rising quickly.

The federal government is on track to spend $1 trillion more than it takes in this fiscal year which is a record deficit. That means Congress is spending roughly $2.7 million more each day than they take in.

This can’t continue.

But what happens if the government takes over health care and then realizes they can no longer afford to fund it? What if there are no bailout funds available for those who are having their health care paid for by the federal government?

Does Obamaman tell them, like he did Rick Wagoner, I’m sorry, but you are no longer on the health plan? Will Barney Frank chastise those who dared use the health plan like he did the employees of AIG who received compensation that was promised them? Will he then demand that they return the money they took from the taxpayer to pay for their health care?

Something to consider.

In an effort to seize more power, Mr. Fixit has asked Congress to relinquish control of price setting for Medicare reimbursement to the White House. According to Breitbart,

The proposal would allow an independent advisory board to recommend changes in Medicare reimbursement rates for doctors, hospitals and other providers. If the president approved the recommendations, Congress could still vote to reject them altogether. But Congress could not approve some recommendations and reject others.

Currently, Medicare reimbursement rates vary from region to region. Key lawmakers often get involved in setting local rates, a practice the Obama administration plan would end.

The current Medicare reimbursement rate is the least of any “insured” plan other than Medicaid. Many doctors limit the number of Medicare patients they will treat or refuse to accept any Medicare patients at all.

In most areas, about half of all doctors do not accept Medicare assignment.

Currently, Medicare reimbursements are scheduled to be reduced by 21% in January, 2010. This means doc’s who currently accept Medicare assignment would receive a 21% pay cut starting in January of next year if the scheduled cuts are put in place. The most likely result would be even fewer doctor’s willing to treat Medicare patients.

If the White House is given supreme power over Medicare reimbursement one has to wonder how deep the cuts will be and how few doctor’s and hospitals would be willing to accept Medicare patients.

Almost one out of three American’s is covered by Medicare or Medicaid. (If Medicare reimbursement is cut so would Medicaid. Reimbursement rates for Medicaid is 10 – 14% less than Medicare levels).

The good news is, any reduction in reimbursement for M/M reduces the tax bill for those who pay Medicare taxes.

The bad news is, reductions in M/M reimbursement means fewer medical providers willing to treat those patients and more out of pocket for people on M/M.

For those who do not like to read (or can’t read) . . .

Would you like to know what your new, change you can believe in health insurance will look like? Here are some tidbits from the House version translated for humans.

For starters, if you don’t have health insurance you will pay a tax.

If your coverage is not acceptable, you will pay a tax.

If your coverage does not meet federal guidelines at ANY TIME DURING THE YEAR you will pay a tax

How much tax?

2.5% of your MAGI (modified adjusted gross income).

Sounds like a tax on the middle class to me.

So what are these federal guideline for coverage?

The policy must cover hospitalization, outpatient care including ER, doctors visits, medical supplies, prescription drugs, rehabilitative and “habilitative” services, mental health and substance abuse services, preventive services, including those services recommended with a grade of A or B by the Task Force on Clinical Preventive Services, maternity, wellborn care including health, vision and hearing including supplies until the child reaches age 21.

I have no idea what habilitative services are and I doubt anyone in Congress does either.

By requiring all policies to meet these standards, including the guaranteed issue mandate (explained later), the cost of health insurance will increase dramatically.

Maternity, especially without a pre-existing limitation, could easily add 30% or more to current premiums for some age groups. Mental health parity another 15% and covering all care on children to age 21 another 5 – 10%. That’s adding 50% in costs to current premiums.

So much for health insurance that is affordable.

But hey, this is Washington. They don’t know the meaning of the word affordable.

How about some of the other provisions in your new change you can believe in health insurance policy?

Your policy cannot discriminate because of pre-existing conditions, will be guaranteed to be issued and is guaranteed to be renewed as long as you pay the premiums. Your new policy cannot be rescinded except for incidences where you have committed fraud.

There are currently 4 states where carriers are not allowed to take into account your health history for rating purposes. Those states are NY, MA, ME and VT. Rates in those states are 2x to 3x higher than for comparable coverage in neighboring states where medical underwriting is allowed.

If this trend holds for the new policies, plus the requirements above for maternity, mental health parity and coverage on children to age 21, you could see an initial increase in premiums over current rates of 150% at a minimum.

That is change you can believe in.

Your premium can vary by age but in no event will you be charged more than twice the “normal” premium as defined by the Health Choices Commissioner.

Who is in charge of setting parameters for health insurance?

There will be a new level of bureaucracy termed the Health Benefits Advisory Committee consisting of no more than 26 members.

They will include 9 (who are not federal employees) appointed by the president, 9 (who are not federal employees) appointed by the Comptroller General plus some even number (not to exceed who are federal employees.

But wait, there’s more!

The HBAC is presumably temporary and would only be in place to set the initial guidelines. The day to day grunt work would be handled by the Health Choices Administration.

There will also be a federal Health Insurance Omsbudsman who "shall, in a linguistically appropriate manner – receive complaints, grievances and requests."

I wonder who determines what is linguistically appropriate and what is not. What are the consequences for being linguistically inappropriate?

But I digress . . .

Good news for transparency advocates! The Health Choices Commissioner (or perhaps the Health Choices Administration) will require full transparency with regard to the cost of procedures and services.

Under your new change you can believe in health insurance policy you are free to find the lowest price for brain transplants.

And carriers will have mandated loss ratios for their business. Any carrier that has a better than required loss ratio will be required to rebate those extra earnings to the policyholders.

Nothing is said about what happens if the carrier has a worse than expected loss ratio.

All policies and marketing material must meet “plan language” standards as set by the HCA.

Plain language means anyone, including those with “limited English proficiency” who could be a prospective policyholder must be able to read and understand the material .

Too bad that requirement was not imposed on this 1018 page bill.

How are you liking this change you can believe in health insurance plan so far? Come on. You can tell me.