April 29, 2010

Common Misconceptions about Health Care Reform

Health Care Reform has passed.  Yet, there are still a lot of people out there that do not understand how the bill will affect them.  Here are a few common misconceptions people have:

  • How do I get this new insurance?
    • There is no new insurance.  There is no public option.  By 2014, states will be setting up insurance "exchanges."  These exchanges can only offer certain plans, plans which will be dictated by the government.  There is no government plan, so the plans that are offered at these exchanges will be from current insurance carriers.  The only difference is, your income will dictate what plan you can get and the amount of government subsidy you will receive.
  • "Finally, free health insurance!"
    • Health insurance will not become "free" due to this bill.  It may become less expensive, depending on your household income, but it may also become more expensive depending on your household income.  For example, if someone with a household income of less than $29,000 goes to the exchange to buy insurance they will only pay $595 a year for their insurance.  However, if someone with a household income of $88,100 would have to pay $8,379 for their insurance.  Remember, this is household income, not individual income.  
  • "Where are these 'exchanges?'"
    • They have no been set up yet.  States will not have them up and running until 2014.  Most of the laws in this bill do not take effect until 2014. 
  • "As an employer, it is going to be cheaper for me to get rid of my health plan and send my employees to the exchange"
    • Financially this will probably be correct for the employer, but not always the employee.  Remember, the subsidy amount the employee will receive is based on household income.  So your lower wage workers will not mind, in fact they may get a better deal from the exchange.  However, anyone making around $50,000 or more in your company will be upset with you, especially if they have a spouse who is also earning a salary, because the subsidy is based on household income.   These employees will show up at the exchange and find out they will have to pay significantly more than they are paying now through payroll deductions under their employer sponsored plan.  These subsidies are going to create problems with employers and employees. 

April 13, 2010

Health Care Reform Has Passed. Now what?

We all know by now that health care reform has passed and is now law.  What we may not know however, is what it all means.  Here is a quick overview of what is going to happen and when:

Effective Immediately:
•Small business tax credits are effective immediately to help pay for insurance premiums. (Retroactive back to 1/1/10)
•Secretary of HHS shall award grants to states to create government‐operated “Ombudsman”
who “will assist consumers with filing complaints and appeals, educate consumers on their rights and responsibilities, and collect, track, and quantify consumer problems and inquiries.”

Effective within 90 days of enactment:
•Re‐insurance for employer‐sponsored Early Retiree Health Benefit Plans (program to be determined by Secretary of HHS).
•Carriers cannot require a designated primary care provider.
•Indoor Tanning Services Tax
•Internet websites: “Requires the Secretary of HHS to establish an Internet website through which residents of any State may identify affordable health insurance coverage options in that State. The website will also include information for small businesses aboutavailable coverage options, reinsurance for early retirees, small business tax credits, and other information of interest to small businesses.”
Effective within six months after enactment:
•Elimination of pre‐existing condition limitations for children
•Children covered until age 26
•Eliminating Lifetime Limits on benefits
•Regulating Use of Annual Limits (defined by the Secretary of HHS).
•“Free Preventive Benefits” ‐must provide 1stdollar coverage for preventive services (no cost‐sharing).
•Prohibits rescissions: carriers cannot cancel coverage

Effective January 2011:

•Minimum medical claim loss ratio (Small group plans 80%/Large group plans 85%)
•Carriers must rebate excess premium to consumers (above the allowed loss ratios)
•Employers must report the value of health benefits on the employee’s W‐2
•Flexible Spending Accounts –over the counter medicines are no longer covered (unless prescribed by physician).
•HSA’s: penalty for non‐qualified expenses increased from 10% to 20%
•New voluntary government‐operated long term insurance plan financed by payroll deductions –THIS IS AUTOMATIC ENROLLMENT


2012
•Hospital payments must be linked to outcome (defined by Secretary of HHS)
•“Directs the Secretary of HHS to develop and implement a budget‐neutral payment system that will adjust provider payments based on the quality and cost of the care they deliver.”
•“Requires the Secretary of HHS to establish and update annually a national strategy to improve the delivery of health care services, patient health outcomes, and population health. “
2013
•Carriers must adopt standard administrative rules/procedures (determined by Secretary of HHS)
•Limit flexible spending accounts to $2,500/yr (indexed by CPI thereafter)
•Hospital Tax (0.9% to 3.8% of income) on high income wage earners (>$200,000 individuals, >$250,000 couples)
•Medicare tax will applies to capital gains, dividends, interest, and other unearned income.
•Simplified and standardized summary of benefits for plan comparisons (as determined by Secretary of HHS).
•Elimination of Employer Part D Subsidy.

2014
•Limits small group deductibles to $2,000 individual / $4,000 family (can have coinsurance after the deductible)
•Limit eligibility waiting periods to 90 days
•Limit maximum out‐of‐pocket based on income as it relates to the Federal Poverty Line.
•Health Insurance Reforms: guarantee issue, no pre‐existing condition limitations, community rating
•“Premiums can vary only on age (no more than 3:1), geography, family size, and tobacco use. “
•Elimination of all limits on benefits, and Secretary of HHS shall determine “standard benefits”.
•Individual Mandate –all individuals must be covered.
•Non‐compliance penalty: 2014‐$95 / 2015‐$325 / 2016‐$695 or 2.5% of income.
•Employers with over 50 employees are subject to $2,000/ee tax penalties
•Insurance Exchanges will created for small business health insurance
•Income‐based Individual Premium Subsidies •Small Group Tax Credits –second phase takes affect
•New rules for wellness programs will be introduced (certain rules to be determined by Secretary of HHS).

2018
•Excise Tax on High‐Cost Plans

March 23, 2010

What Does Health Reform Mean to Your Business?

Now that Health Care Reform has passed, what does it mean for your business?

How will the small business tax credits work?
When will the insurance reforms take effect?
When do the individual premium subsidies take effect?
 Will there be improved access to health insurance carriers?
Can we expect lower health insurance costs and/or lower healthcare costs?
What are the new taxes on health plans, employers, or individuals?
Will there be new taxes on health plans, employers, or individuals?

Find out the answers to these questions during our Free Health Care Reform Webinar on Tuesday, March 30th at 12pm ET.

We will also discuss how to lower your health care costs with Consumer-Driven Health Plans.

March 12, 2010

Deadline will be missed......again.

The White house has hinted that there will not be an up or down vote by their deadline of March 18th.  What a shocker!  The amount of deadlines that have come and gone for reform has to be in the teens by now, so I don't think anyone is truly surprised by this.

One surprising note however, is that democratic leadership will not be changing the language in the bill to disallow the use of public funds to pay for abortions.  Rep. Stupak is said to have anywhere from 8 to 12 pro-life democrats that will not vote for the bill unless the abortion language is changed.  This is a very interesting change of events. Most believed they would have to change the language to have any shot in passing this bill, even though most thought it would be very hard if not impossible to do so in reconciliation.

Perhaps, Pelosi believes these pro-life democrats will sign on last minute because they see health reform slipping away.  Perhaps she believes she can pick up votes somewhere else? However, these would have to be representatives that voted "no" originally.  There would have to be some pretty heavy bargaining and promising going on in order for that to seem plausible. I believe it will come down to one thing; do democrats believe something is better than nothing?

One thing is for sure, you can never count Nancy Pelosi out, should be an interesting next couple of weeks.

March 11, 2010

Join us for an informational webinar

Personal Care Accounts:  HRA as compared to HSA
-Plus, an Update on National Health Care Reform.  Here we go again?


Sponsor: BGNE (formerly Benefit Group of New England)
Date:  Wednesday, March 17th
Time:  Noon-12:45pm
Space is limited.


HRA’s or HSA’s?  Or both?.  
Perhaps you have already implemented a high deductible health plan. Perhaps, you are considering implementing a high deductible health plan.
Should you provide a personal care account?  Should that account be an HRA or an HSA, or both?  How much should you provide in the account?
We will review the types of personal care accounts, and our data concerning the costs and benefits of HRA’s and HSA’s.

PLUS – An Update on National Health Care Reform:
  • How likely is health care reform in 2010?
  • When would the reforms take effect?
  • Will there be tax credits for small business?
  • Will there be premium subsidies for individuals? 
  • Will there be improved access to health insurance carriers?
  • Can we expect lower health insurance costs, or lower healthcare costs?
  • Will there be new taxes on health plans, employers, or individuals?

Date:  Wednesday, March 17th
Time:  Noon-12:45pm
Space is limited.


March 10, 2010

Are Emotions Getting in the Way?

The President has been on the campaign trail as of late trying to convince Americans to come on board with his health care reform agenda. During each of his latest speeches he is telling America he does not know how it will play politically, but he knows it's the right thing to do.  This seems to be his final pitch, "pass the bill because it's the right thing."

While we all want more Americans to have affordable health insurance our endgame for passing a bill cannot be based on emotions.  It's true, legislation usually begins with emotional force. Politicians want to fix something that is broken or to "do what is right" for Americans. However, once they are in the stages of forming and passing legislation, politicians need to check their emotions at the door.

First and foremost legislation has to be functional and affordable.

Nancy Pelosi said just the other day, "we have to pass the health care bill so that you can find out what is in it."  Now, that seems to be all backwards.  Shouldn't we know what is in the bill before we pass it? Of course we should.  However, emotions have become front and center in this debate.  I'm afraid we will never get a bill that will curb costs and help those without insurance unless politicians stop being emotional and look at legislation objectively.

Begin legislation with emotions, end with reason.

March 8, 2010

The Health Care Reform Battle is in the House

The President has given Congress a March 18th deadline to push health care reform through.  He has all but said the word "reconciliation."  It is very clear at this point that the Senate is going to use this procedure to appease the House.

For those who do not quite understand what reconciliation is, here is a very quick and simple explanation:

Reconciliation is a legislative process in the Senate that allows a bill to forgo the need to get 60 votes needed to end a filibuster.  Therefore, only a simply majority is needed in the Senate.  If there is a tie, the Vice President casts the deciding vote.  So 50 votes will suffice for health care reform, as we know the Vice President is on board. This reconciliation process will be used to fix parts of the Senate bill that the House members do not like.

However, to get to the point where the Senate can pass a reconciliation bill the House and Senate have to pass the exact same bills.  As the Senate bill passed by the narrowest of margins and will stand to lose votes if they try and change the bill, this has become the bill that will need to be reconciled.

Seeing whereas there are many members of the House that have serious reservations about the Senate bill they would have to vote "yes" to the current Senate bill and then trust that the Senate will actually use reconciliation to "fix" the bill.

Some members of the House have asked the Senate to first pass their reconciliation bill and then the House will pass the Senate bill.  However, this is unclear if that option is even viable.  Technically, the Senate would be passing a bill to fix a bill that has not even been passed yet. 

Before reconciliation can even be used, the house has to make sure it actually has the votes to pass a bill.  Remember, the House passed their version of health care reform by a mere 3 votes.  Since then, Rep. Murtha has passed away, the lone republican representative Cao from Louisiana has now expressed opposition and countless others that originally voted "yes" are now on the fence.  There are the House members that are worried about abortion coverage, most notably Rep. Stupak.  There are members who are up for re-election and have seen what happened in Massachusetts, New Jersey and Virginia and are now worried about their own political well being.  There are also those in the House that simply think the Senate bill does not go far enough and state they do not think they can vote for it. 

Nancy Pelosi has a tough road ahead of her.  There are three groups she has to appease to, therefore she needs to relay three different messages.
  1. Abortions will not be funded with government money.
    • Pelosi will have to convince members that the Senate will fix the abortion language in the bill during reconciliation.  Trust is a very big issue here
  2.  Political well-being
    •  Pelosi can choose one of two ways to go about this.  She either has to convince members to do the unpopular thing and pass the bill without worrying about their upcoming elections or she has to convince them this well help their political well being because America actually wants this done.
  3.  Something is better than Nothing
    • Pelosi will have to convince members who think the Senate bill is too tame that if they do not pass the Senate bill they will never be able to pass a health reform bill.
Convincing members of these messages may not be as easy as it seems.  Stay tuned to see how this all plays out over the next 10 days.

February 26, 2010

Was Anything Accomplished at the Health Reform Summit?

After watching the 7 hour long health care reform summit yesterday, I was left wondering if it accomplished anything.  To put it simply; No.  While it finally gave republicans a chance to tell their ideas to the public, there wasn't much else it accomplished.  It was more of the same back and forth rhetoric, only a little more civil. 

Democrats stated over and over examples of families falling through the cracks of our current system.  Republicans called for the democrats regulations to be scaled back and apply free market principles.  Democrats said their ideas were best, republicans said their ideas were.  Democrats called republiucans the party of "no," republicans said we want health care reform just not this reform.

If you were looking for a bright spot here, it would be that both parties may have realized they have more reforms in common than not.  However, I do not believe this will matter because what they do not agree on are big philosophical differences.  Such as, mandating individuals have insurance. 

It became very evident during the summit that many of these politicians had no idea what they were talking about.  For instance, Rep. Clyburn (D-SC) stated that emergency rooms were being misused (this is 100% correct), he said that a third of all ER visits are actually not emergency visits (again, correct).  However, he stated the reason for this is because people have high deductible plans that have too much out of pocket and they cannot afford to go to their doctor's office, so instead they go to the emergency room.  He apparently doesn't understand that an emergency room visit is extremely more expensive than a doctor's office visit.  So his logic does not make sense.  It is very sad to think that people who do not know these basic health care facts are put in charge in trying to re-invent the system.

Another point that was frustrating is that when the idea of Health Savings Accounts came up they were quickly brushed aside and branded as "accounts for the rich."  While statistics show, that 50% of people that have HSA's make less than $50,000 a year.

It basically comes down to this, you can pay the insurance company upfront for a low deductible first dollar coverage plan or you can pay for health care as you use it with the savings account coupled with a high deductible plan.  Usually the savings difference from going to a first dollar coverage plan to an HSA plan is more than the deductible itself, so there is guaranteed savings.

Neither side of the aisle truly knows enough about health care or health insurance to try a complete overhaul of our current system.

After the summit yesterday, I do not believe anything has changed.  The only way these bills move forward now is if the democrats try and pass it through a reconciliation process. Stay tuned to find out how this will all play out.

February 19, 2010

Is it even possible to hit reset button on Health Reform?

Most would agree that so far health care reform talks have been rather partisan.  The democrats tried to get their own party to come along because they did not need a single republican vote to pass it.  Of course when Senator Brown from Massachusetts was elected this all changed.

Now the media, politicians and the public are calling for bipartisan talks.  The President is going to hold a "health care summit" next Thursday the 25th.  He has invited both democrats and republicans to the table to bring forth their ideas. Of course, the hope on the left is that they will be able to get one republican senator to come along and the fear on the right is that this will not be an open discussion but rather a lecture to republicans to come on board.  Either way it does not matter.  Most agree that nothing will come out of these talks. Some are calling for Congress to start the entire process over.

I believe that truly starting over cannot be accomplished.  Both parties already know what they want and what they do not want.  At this point, everything has already been on the table, everyone knows each others stance.  Starting over would simply lead back to where we are now.

So what happens next? 
3 Options: 1) Passes with a republican on board; 2) Passes through some sort of reconciliation tactic -needing only 51 votes in Senate, House would still need the 218 votes or 3) The bills die

February 15, 2010

Myths about Consumer-Driven Health Care

Previously in this blog, we have talked about Consumer-Driven Health Care (a personal care account coupled with a high deductible health plan), and the benefits of becoming actively engaged in the purchases of health care.

Of course, like anything else, there are critics of Consumer-Driven Health Care (CHDC).  There are also many myths about CDHC that try and lead employers away from the idea of it.
  • Myth #1: "High deductible plans hurt my employees financially with higher Out-of-Pocket"
    • This would be true if CDHC was simply handing an employee a higher deductible with nothing else. That is not what CDHC is.  What it really is is a high deductible plan coupled with a personal care account, either a Health Savings Account  (HSA) or a Health Reimbursement Arrangement (HRA).  The employer uses a portion of the tremendous savings between a traditional plan and a high deductible plan to fund these accounts. The employee can use the funds provided from the employer to pay for health care before the deductible. In many cases, the employee will not spend a single dollar out of their own pockets with CDHC plans. 
  • Myth #2:  "Employees will not get the Preventive care they need"
    • Many say, because these type of plans have a lot of out of pocket before the insurance kicks in that many will forgo preventive care to save money.  However, with many of these high deductible health plans, Preventive care is now paid 100% by the insurance.  This benefit includes things such as annual physicals, mammograms, colonoscopies and prostate screening. Here in VT, and in NH all of the high deductible health plans have this benefit.  Many of the carriers from across the country have adopted this as well. They understand how important preventive care is, both on a cost and personal health level, and they want everyone to utilize it.
  • Myth #3:   "It's too complicated for users."
    •  It's true CDHC can be complicated, but not if the education is there. Education is absolutely essential to making your health plan work.
    • Myth #3.1 : "I don't have the time or knowledge to educate my employees fully"
      • Let your broker educate your employees.  At BGNE, we have a team that is dedicated to educate users of the plans.  We meet with your employees to teach them precisely how to use their benefits and what exactly their benefits are. Education is an absolute must. 

February 10, 2010

A Real Life Case for Consumer Driven Health Care

What if everyone cared what the true costs of health care were.  If there were actual consumers of health care like they are for every other purchase in their lives?

Those who have "Consumer Driven Health Plans" are engaged in their health care purchases.  These plans consists of a high deductible health plan ($2,500 for example) coupled with a personal care account such as a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA).  The consumer will use either their HRA or HSA to pay for medical bills before they meet their $2,500 deductible.

Here is an actual real life example of someone on a  "Consumer-Driven Health Plan":

-A woman is on vacation and has an extremely bad sore throat.  She goes to a local urgent care facility to get it checked out.  The doctor takes a quick look at her and writes a script for amoxicillin.  She met with the doctor for less than 5 minutes.  She receives her bill in the mail and the urgent care facility charged her for a "High-Level" office visit at $250.  Amazed at the high price of the 5 minute visit she quickly calls the urgent care facility.  She asks how her 5-minute meet with the doctor for a sore throat was classified under "High-Level?"  The urgent care facility responded, "Oh, I guess that should have been billed at the 'low level' rate for $75, but what do you care? Your insurance is paying it."

Amazing.

Now, if this person had been on a typical co-pay plan or another first dollar coverage plan, they simply would not care about the overcharge (even though they still should, because it will be reflected in premiums).  Why would they care? No matter what the doctors office billed the insurance company you pay the same co-pay.  Consumerism always creates less waste and more savings.

February 1, 2010

The Presidents Mission

"I Don't Quit."  There is no doubt that when the President uttered these words at his first State of the Union address, that health care reform was included in this statement. He stated several times his intent to finish what he started with health care reform.

Although, he did not say whether he was willing to part ways with certain aspects of the bill.  He was vague on purpose.  He will again scope out the political landscape, try and find out if he can get the required votes for the reform he wants. If not, he will and must start over. 

If health care reform starts over, true bipartisanship will happen and something will be passed.  While it is not exactly clear what bipartisanship would produce in a bill, you can guarantee there will be no public option.  Either way, President Obama is going to continue with his health care reform agenda and is resting a lot of his political capital on it. 

January 22, 2010

Scale Back and Slow Down

In order for health care reform to survive after Senator Brown's win in Massachusetts, it will have to be scaled back and slowed down.  This will of course take a true bi-partisan effort, which should produce a better bill.

One of the biggest issues against current bills in congress is that they do nothing to curb out of control costs.  They simply throw subsidies at them to make them more affordable.  It will have to deal with making medical costs more transparent.  Consumers need to know what everything costs, so they can shop around for best cost and quality. The bill will also need to deal with the cost shift that occurs from Medicare and Medicaid.  These government programs only reimburse doctors and hospitals around 50 cents on the dollar.  The loss they are taking from these patients is made up from patients with private insurance, and that of course is reflected in premium renewals.

If they are going to achieve any sort of reform, both parties will need to sit down with each other and work out options that curb costs, is cost effective and make sure the people are on board with. This in itself is not an easy task, but it is easier than trying a complete overhaul of the system with no republican and dwindling democrat support. 

January 18, 2010

If Brown wins in Mass. is Health Reform Dead?

The special election on Tuesday to fill the late Ted Kennedy's seat has everyone around the nation on the edge of their seats.  Whether you are for or against health reform you are watching closely. If Brown wins, the democrats super-majority is gone, if Coakley wins they will keep their super-majority and health reform will likely go through.

However, even if Brown wins the democrats have a few options to still pass reform:
  • House passes Senate bill unchanged:   This is the most viable option.  If the House goes ahead and passes the Senate Health Reform Bill unchanged the Senate will no longer need the 60 votes to pass it again. However, many remain skeptical if the House has the 218 needed votes to pass the Senate bill. 
  • Delay the Confirmation of Brown: This tactic has many Republicans worried. Massachusetts and the Democrats may delay the confirmation of Brown so the democrats still have a super-majority in the Senate.  However, Barney Frank (D-MA) has said they will not do this.
  • One Republican comes on Board: The democrats will reach out to moderate republicans, such as Olympia Snowe (Maine).  If one, republican comes on board with reform it will surely pass. 
  • Reconciliation:  Democrats can use this legislative process if they tie the bill to the budget.  Any bill that can be tied to and deemed necessary to the budget can bypass the need for a super-majority.  Here they would only need 51 votes, which they surely have. However, if this process is used, the bill would likely have to be stripped down and many items would be thrown out.  
If Brown wins, health care reform is not dead for democrats but it would definitely make it more difficult.  If Coakley wins, democrats will probably have it passed in the next month. Tomorrow night should be interesting to say the least.

December 29, 2009

Why is Any Bill better than No Bill?

I would first like to stress again that the vast majority of Americans believe we need some sort of Health Reform, yes even the the vast majority of politicians.

However, it has to be troublesome when many are stating that any reform bill is better than no reform bill.  Many are in awe of the historical nature of the event, not the fact if it is the correct bill or not. In his December 20th, 2009 column, "A Dangerous Dysfunction,"  Paul Krugman wrote:

"Unless some legislator pulls off a last-minute double-cross, health care reform will pass the Senate this week. Count me among those who consider this an awesome achievement. It’s a seriously flawed bill, we’ll spend years if not decades fixing it, but it’s nonetheless a huge step forward."

Krugman actually admits that this bill is deeply flawed and will take DECADES to fix, yes DECADES.  It truly makes one wonder if it is worth passing a bill that even liberals admit is a disaster.  Is it not worth re-working the entire bill before it is passed?  Forget the historical context, it means nothing if the bill is a train wreck.  Pass a bill that works.  

The current bill does nothing to stop out of control medical inflation.  Some will argue that this bill provides affordable health insurance to the lower class. That might be true, however that is through government subsidies not through controlling costs and medical inflation.  It would not be long before those affordable insurance plans for the poor become unaffordable once again. These subsidies are like putting a band-aid on a cut that won't stop bleeding, sooner or later the band-aid becomes utterly useless.

A few ways to help slow down medical costs:
  • Transparent Medical Costs.  
    • Being able to know what everything costs up front. 
    • A pricing structure. 
    • Being able to know if you were billed correctly.
  • Consumerism.  
    • Being involved in the actual purchase of health care. 
    • No more co-pays.  Co-pays are the single biggest killer of consumerism.
  • Education.
    • Most are benefit illiterate.  Educate people on how to use their benefits properly.  This will eliminate waste.
    • Waste and misuse of health plans factor into premium increases.  Less waste, lower premiums!

December 22, 2009

Why Incumbent's Should Be Afraid

Many have been noticing the trending decrease in President Obama's approval numbers along with the entire democratic party.  Many are lead to believe that republican numbers must be on the dramatic rise.  They are not.  Yes, they have enjoyed higher approval ratings however the swing does not account for the numbers lost by democrats.  While democrats have seen a dramatic decrease in approval, republicans have only seen a slight increase.

What does this mean?  I believe that any incumbent politician is in trouble, republican or democrat.  There is such a disconnection and distrust between politicians and the American public.  Many do not believe a word any politician says. If you are a sitting, senator, representative or governor you should be very worried.  If numbers continue to trend this way, I believe we will see incumbents lose to members of their own parties.  Americans are growing more and more tired everyday of their politicians and party does not seem to matter.  In the RealClearPolitics generic ballot average, Republicans only have a two-point edge.  A statistical tie.

If I was an incumbent I would be very afraid.

December 21, 2009

Wheelin', Dealin' and All Nighters.

It's 1am, do you know where your Senators are?

Ending Debate on the Senate Health Reform Bill.  As soon as the democrats got the 60 votes they needed, they voted as quickly as possible.  The vote took place at 1am this morning to avoid any delays from republicans.

The road to 60 was not an easy, nor was it a cheap one.  Lieberman's hold out cost democrats a public option and the Medicare buy-in down to age 55.  Then there was Senator Ben Nelson from Nebraska.  Nelson was the last democrat to fall in line, it only took a reported $45 million for that to happen.

Nelson had expressed his reservations for the bill,  stating that there was too big of an unfunded federal mandate for the state's in this bill.  In order to get his vote, he was promised the $45 million that it would cost his state.  He is now being criticized by both sides of the aisle.  The left is saying he was going to vote yes anyways, and was just holding out so he would be able to sell his vote.  The right is simply saying he sold his vote and did not do what was right for the American people.

Now, all of the attention moves to the House where things are already getting complicated.  The Senate is warning the House not to change their bill as they are afraid the moderates will turn against it.  However, Nancy Pelosi seems determined to pass their bill and then bring the two bills to conference committee. In hopes to get much of what has been stripped out of the Senate bill back in before congress votes on it again.  Pelosi has already said to expect a vote from the House after the New Year.

December 17, 2009

As moderates seem satisfied, all eyes are on the liberal democrats.

For the first time in this health reform debate, Harry Reid is focusing on maintaining liberal votes.  Lieberman seems to be satisfied without a public option and without the Medicare buy-in.  The question now is are the most liberal democrats in congress satisfied?  Will they be able to vote on a health reform bill that does not include a public option, or some form of a public option?

For months, Sen. Bernie Sanders (I-VT) has said he would not be able to vote for a bill without some sort of public option.  In the last few days he seems he is more on the fence than earlier.  While Howard Dean has no vote in Congress, he has come out in strong opposition to the current bill, saying he would vote "no" to it.  One has to wonder if other liberal members of Congress, like Nancy Pelosi, can vote for what is being called a "watered-down bill" by many liberals. 

Nancy Pelosi has already stated that reform will not be done before the new year and that she hopes it can be done for the President's State of the Union address.  This will give them more time to try and appease all democrats in Congress.  This is no easy feat.  The questions becomes will liberal democrats end up voting for a bill without a public option because otherwise nothing would pass?  Otherwise, it is hard to see this bill passing both the House and Senate as Lieberman stands in the way of anything resembling a public option. 

December 16, 2009

Medicare Buy-in is Out, Lieberman is In.

The amendment to expand Medicare down to age 55 has been thrown out.  Lieberman stated he could not put his support behind the expansion of Medicare and Harry Reid decided he could not receive the 60 votes so he bagged the plan. 

With this amendment out it seems Lieberman is throwing his support behind the bill.  Without a public option and without the Medicare buy-in plan many liberals are saying these bill is not enough.  Senator Bernie Sanders of Vermont has vowed to vote against any bill that does not include a public option.  The question is will he stand by that.  Many democrats in the House have also said they will not vote for a bill without a public option. If they will cave on that promise remains to be known. 

December 14, 2009

Medicare Expansion has Joe sayin' No!

Now, no one is surprised that Sen. Joe Lieberman (I-CT) is vowing to vote down the health reform bill in the Senate right now.  The only surprise is why.  He has told everyone for months that he will not vote for a bill with a public, government run option.  Now, he is opposing the expansion of Medicare down to age 55. He is citing adding to the deficit and having the functionality of a public option as his two main objections.

There are many already stating that expanding medicare to age 55 is the democrats first step to providing a government run option.  Many believe that they will simply keep lowering the age to begin medicare throughout the years until finally everyone is covered by it.  Which would account for the all of a sudden, Nancy Pelosi acceptance of a bill without a "public option."

Of course, the democrats could still pull in a republican vote to get this passed. However, it seems more and more democrats do not support the medicare expansion.   Only time will tell as the bills change who will or will not support it.

December 8, 2009

Sick and Tired of Tiresome Politcal Banter? You're not alone.

On Monday, Harry Reid proclaimed; "When this country belatedly recognized the wrongs of slavery, there were those who dug in their heels and said 'slow down, it's too early, things aren't bad enough.'"
Yes, that's right one of the most powerful members of congress comparing anyone who opposes the health care reform bills to supporters of slavery during the civil war.  Unbelievable.

Who can forget Rep. Joe Wilson's disgraceful "YOU LIE!" outburst during President Obama's speech.  Or, Rep. Alan Grayson telling congress that the Republicans health plan was to "die quickly."  Or, the countless attacks on the tea party goers, calling them Nazi's, racists and angry mob's. The list could go on and on.

Can anyone tell me where the honest debate has been?  Yes, I understand that this is an emotional issue for a lot of people, but are our elected officials really telling us that they cannot put emotions aside and debate honestly and thoroughly?  These are the same men and women that think they know better than the American public, that they are smarter, brighter and more informed than the "ordinary" American.  Yet, they cannot put schoolyard banter aside and do what is right.  Have an absolutely honest debate, please.  It does not matter what side of the aisle you sit on, Democrat or Republican.  Each side is to blame, each side keeps resorting back to these same worn out tactics.

Is it just me or does it seem like republicans and democrats are acting like brothers that just got into a fight and now hate to even be in the same room together?  I think we need Mom to sit these two down and make them talk it out.  Make each side see the others. Make each side listen (without interrupting), while the other makes their case and vice versa. I think we have all had one of these times in our life, especially as children, when we literally needed to be sat down by mom or dad to work things out with whomever the feud was with.

The question now is, who and where is mom or dad?

December 7, 2009

Why is opposition to Health Care Reform rising?

The latest RealClearPolitics average shows that 49% of the public oppose health care reform, while only 40% are in support of it.  There have been sharp decreases in support over the last few months and weeks, why is this?  Is it because people have all of a sudden changed their minds on wanting to insure the uninsured?  Have Americans decided they could care less that there are millions without health insurance?  I think not.

So what is it? It is the costs and government control.  The two go hand in hand.  With more government control comes more costs to the taxpayers.  The American public is already staring a huge deficit right in the face with no end to spending in sight.  Americans are standing up to government, not against those in need.  Americans understand that reform is needed for affordable and guaranteed coverage.  They just do not want this reform.

No one argues with the intent of these bills in congress, we all want to make sure Americans can get health insurance.  The argument is which is the best way.

November 23, 2009

Consumerism - The real way to control health care costs

In every facet of our purchasing lives we act as normal consumers.  When we go to the grocery store, we will choose one brand over another because of a matter of cents.  When we need car repairs we will search countless repair shops to get the best price and value.  In almost every purchasing decision we are engaged consumers.  However, when it comes to health care we are the furthest thing from an engaged consumer, we are anti-consumers.

Why is this?

Health insurance coverage has become something it is not and should not be.  Health insurance has began covering predictable expenses. With too low of deductibles and office co-pays the consumer became disengaged.  For just a $10 co-pay you can go to the doctor for a mere cough and the doctor will tell you to take cough medicine.  Was this visit really needed?  Now, the true costs of that office visit is not $10, it is whatever the doctor charges.  Why would the consumer care what this doctor actually charges if all they have to pay is the $10 co-pay and then the insurance picks up the tab?  The consumer usually has no idea what the real cost is, to them it is $10.  This is a major disconnection. 

Remember, the insurance has to cover the rest of the actual costs of this office visit. That cost has to be reflected somewhere.  The misuse of office visits, emergency rooms and pointless medical tests are reflected in rising health insurance premiums.  There is no incentive to be an actual consumer, so why would anyone?

Along with co-pays we have a lot of low deductible plans still in the market today. Where is the incentive in a deductible that is $250, $500?  If I know that the insurance will begin to pay after I hit this cost to me, I understand that I do not have much risk here.  I still have no incentive to shop around like I would with any other purchasing decision, especially one has major as health care.

Now, I can already hear objections to what I am saying.  Many will tell me my solution is to dig into the consumers pocket even more with higher deductibles.  Thus, hurting the consumer and their ability to pay the  bills and feed their families.  This would be true if I was simply saying to move to a high deductible plan, end of story.  What I am saying is to engage the consumer.  Make purchasing health care real again.  Consumers need to see the real costs.  This can be done without hurting the consumer or their checkbooks.  High deductible plans are the answer, but they have to be coupled with a personal care accounts such as a Health Reimbursement Arrangements (HRA).

An HRA, is a promise from an employer to reimburse the employee for health care expenses.  If the employer gives the employee $1,500 in an HRA , the employee can use this money for eligible health care expenses.  Now, employers are not actually handing over this money to the employee, they are simply promising to pay for any future medical expenses incurred. The easiest way to administrate an HRA is on a debit card based system.  The employee will receive a debit card with the amount of funds the employer is willing to give, loaded onto it.  The employee can then use this debit card to pay for any eligible medical expenses.

For example, let's take Company A.
Company A buys a health plan with a deductible of $3,000.  Now if Company A was to say to it's employees this is your plan, you have to pay the first $3,000 before the insurance kicks in, the employees might not be able to afford that.  However, if Company A was to give them a $3,000 deductible along with an HRA in the amount of $1500 then this would certainly lessen the blow.  Now the employee has what feels like first dollar coverage, the first $1,500 incurred they can use the HRA for.  For 85% of people this will be enough money for the year.  Imagine 85% of people will see $0 in out of pocket expenses. 

We have now created an engaged consumer.  Why?  These employees have to live on a budget and their decisions are driven by this budget.   They understand if they spend all $1,500 in their HRA, they will now have to pay out of pocket until the deductible is met.  They also understand that if they are unfortunate and need serious medical procedures their out of pocket is not extreme.

When employees are driven by this budget, they see the real cost of health care because they are paying the actual bills.  These plans do not have co-pays, the bill the consumer receives is the actual bill and they learn quick the true costs.  It leads to better purchasing decisions.  For example, let's say you hurt your ankle late at night and your doctor's office is closed.  Is it hurt bad enough to warrant an emergency room trip?  Can it wait until the morning?  Should I elevate, ice it and then see how it is tomorrow before deciding what to do?  These are questions many will not even think to consider if they are just simply paying a co-pay to go the the emergency room.  These plans cut out waste because the consumer weighs the value of their own health care.  If they truly need to go to the ER, they will.  If not, then why not wait and take the less expensive option?

Far too many times, people misuse their health plans.  This leads to waste, which leads to higher costs.  Creating an engaged consumer is vital to controlling costs.  Imagine going to the store and purchasing a product without knowing what it just cost.  That makes little to no sense for almost everyone.  Yet, for some reason this is how we purchase health care.  This needs to change, it has to change.

November 20, 2009

Senate to Vote on Health Care Reform Saturday Night

The Senate will debate their health care reform bill all day Saturday and hope to vote at 8pm that same night.  There are many who do not think this bill will get the 60 votes needed to pass.  The public option in this bill seems to be the main reason it might not get the 60 votes.  Lieberman has swore he will not vote for this bill, so that means the democrats will need to pick up a single republican vote in order to pass. 

Stay tuned......

November 19, 2009

Not To Be Outdone by the House.... here comes the Senate Bill!

The Senate has finally came out with their bill on health care reform, all 2074 pages of it.  Yes, 2074.  As no one has been able to read it yet, all facts are not out on exactly what is in the bill.  However we do know that there is Government run option in this bill.  Which leads many to wonder if this bill can get the 60 votes needed to get out of the Senate.  Remember, Senator Lieberman ( I ) has said he will never vote for a bill that includes a public option.  He could be the deciding vote in this debate.  Senator Olympia Snowe ( R ) from Maine has said she will also not vote for a public option, unless it is attached to a "trigger."  So, unless the democrats entice one of them to vote yes, it seems unlikely to get this to pass the Senate. 

There is one other major issue going on inside of congress that could make passing this difficult.  This is the Stupak Amendment in the House bill.  This is the amendment that does not allow  funds to be used for abortion coverage.  The House bill only passed because this amendment was added, there are said to be around 40 pro-life democrats who would have voted no without this amendment.  Now that it has passed and the House is awaiting the Senate to pass theirs, there is serious discussion that this amendment will be taken out.  If so, all of the pro-life democrats in the House will take this bill down.

It will be very interesting over the next few weeks to see the developments.  

November 16, 2009

The Role of Competition in Health Care Reform

One of the biggest issues concerning the rising health care costs is competition, or the lack there of.  Many states only have a few carriers.  This is a problem in many states and the consumer has suffered because of it.  Now, one option is to let the government come in and compete with these carriers.  The argument here is that the government will be able to undercut these carriers on price and force these carriers to lower theirs. 

There are problems with this.  Many do not realize that these insurance carriers only operate on a 1-4% profit margin as it is now.  If they are forced to lower their price they will be run out of business or cut jobs.  So they will not lower their price too significantly, they cannot.  The next problem is if government is paying these costs under their plan they will reimburse doctors and hospitals the way they do with Medicare.  On average they pay two-thirds of the actual medical bills.  This is why many doctors have stopped taking medicare patients.  These bills still have to be paid, where will this cost get shifted to?  The only logical answer has to be private insurance.  Which means these carriers will have no choice but to raise their premiums. 

It is hard to understand the argument that a government option would lead to the best competition.  The next argument is to allow cross-state purchasing of health insurance, the thought here is that this would get rid of the problem in states where consumers only have one or two choices.  While this is a better idea, there is still potentially a problem with this.  As it works right now, in most states there are one or two major carriers that get all of the business.  These top carriers get very lucrative discounts from their "network" hospitals and doctors in their state (usually somewhere from 25-45%).  These discounts have a dramatic effect on premiums.  If new carriers were to come into the market they would more than likely not see these same discounts.  Therefore it would be difficult for new carriers to compete. 

While the latter of the two seems to make more sense, it still needs work.  There has to be a way to make the playing field fair for all that are competing in an area. 

November 13, 2009

Ways to improve our health care system before complete reform

There are some logical steps that we can first address in regards to health care and costs.
  • Elimination of Medicare Fraud and Waste:  According to an October Thompson Reuters reports the health care system wastes between 500 and 800 billion dollars a year! 200 billion of that are fraudulent claims.  Now that is some profitable illegal activity.  
  • TORT Reform:  No one seems to be talking about this and it is a huge part in why health care costs are so high.  Doctors malpractice insurance is through the roof.  Guess where that costs ends up getting shifted to? You got it, THE CONSUMER!  
  • Upgrade our systems:  We need to update to an electronic base system, there is so much waste and miscommunication in our current paper based system.
  • Reward the healthy!:  It seems too logical to have a health-based health care system doesn't it?  Include health assessments in with plans, reward wellness.  
These things are already included in the reform bills (except for TORT reform).  Again, almost all agree on these reforms.  Why does everything have to be crammed together?

What if we voted on each reform by itself? Would it work to go line by line, item by item, reform by reform and vote on those? I imagine a lot of good reform would pass.  Both parties agree on more topics than they disagree on, although you wouldn't know that from the media.  I don't know a single person that proclaims not to care about the uninsured.  For some reason this seems to be an all or nothing debate, why and how did we end up here?

How will the exchange work

Here is an example of how the health insurance "exchange" proposed in the house health reform bill will work.  How much you pay is based on your household income.  As you can see the middle class will suffer greatly from the way it is currently structured.  A household earning just $73,000 a year will have to pay nearly $8,800 a year!  This model is very troublesome.

* HOUSEHOLD  
   INCOME
$27,465
$36,620
$54,930
$73,240
$100,000
Plan Status
Family of 4
Family of 4
Family of 4
Family of 4
Family of 4
As % of Poverty Level
125%
167%
249%
332%
453%
Maximum Premium
3% of income
5.5% of income
10% of income
12% of income
n/a
Actual Health Plan Cost
$12,000
$12,000
$12,000
$12,000
$12,000
Gov’t
Tax Credit / Subsidy
$11,176
$7,986
$6,507
$3,211
$0
Actual Family Cost
$824
$2,014
$5,493
$8,789
$12,000
Individual Penalty
$600
$1,000
$1,500
$2,000
$2,500
Maximum OOP
3% actuarial value
15% actuarial value
30% actuarial value
N/A
N/A