- 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 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:
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
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?
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.
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
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.
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.
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.
- 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
- 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.
- 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.
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.
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
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.
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.
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.
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.
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:
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.
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