Health Insurance Info for Colorado

news & commentary on health insurance and benefits

Housekeeping items, 2016

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I’ll not likely be posting anything else in 2016; open enrollment consumes most of my time.

Trump is the President-Elect; Obamacare is likely due to see some changes. What will the State of Colorado do? Good question, we will see!

“Repeal and Replace”: Will likely be a two year process; at the minimum, eighteen months to more than twenty four months seems to be about right. Make no mistake: Republicans have plans. I suspect they will move quickly, because moving slowly won’t capitalize on the mandate won by Trump.

Trumps’ appointment to HHS is a good indication he will likely lean more towards actively “repeal and replace” rather than tinker with the existing framework; already, the MSM is spinning it negatively, such as “the investments made to ensure Obamacare would work will likely now be lost” yada yada. As with any investment in business, market conditions change and businesses change with it; usually the last thing the MSM is concerned about would be business investments being lost. Read into this what you will.

I’m already seeing positive changes because of the election, and I’ll be more pro-active in 2017, now that conditions are ripe for tax reform, health insurance reform, and economic growth.

Merry Christmas  |  Happy Holidays  |  Happy New Year!

 

 

 

Obamacare: premiums up!

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Americans buying health insurance outside the new health insurance exchanges are paying premiums up to 56 percent higher than before the health law took effect. Insurers have jumped the cost to cover all the new, added features of Obamacare.

According to a cost report from eHealthInsurance, a nationwide private insurance exchange, families are paying an average of $663 a month and singles $274 a month, which is much more than before Obamacare went into effect. Most buyers are choosing the lowest level of coverage, called Bronze plans, which have higher deductibles and higher out-of-pocket costs, because they are the cheapest plans available under the new mandated benefits plans, which must contain “minimum essential health benefits” determined by the government.

While exchange coverage’s may be subsidy or cost-sharing eligible, which lowers the cost of health insurance premiums or out-of-pocket costs, many Coloradoans aren’t eligible for either, since they fall outside the 400% of federal poverty level maximum income level for eligibility. Even those who qualify, but at the higher levels of income, will see little if any subsidy.

From The Washington Times: “The shocking surge in prices show what Americans not in Obamacare or covered by their employer are paying as they seek lower premiums. Typically, they are not eligible for the subsidies Obamacare offers those with low incomes.” Go here for more.

And while Colorado is probably one of the states that is enjoying lower percentage increases on exchange than others, according to some published reports, the reality is that we in this practice have seen no “reasonable” increase for anyone (and that is certainly not anecdotal!). Most clients have seen substantial increases, if they are keeping plans, and are seeing increases even in plans that have higher deductibles and higher out-of-pocket expenses. Frustrating, to say the least.

The reality is that published analysis, such as this, reported in The Denver Post, is misleading: exchange based coverage simply doesn’t compare to policies issued in the pre-Obamacare days. Without getting into the fraudulent “inferior policies” gambit, the simple truth is that insurers, including all who operate in Colorado, drastically scaled back provider and facility networks, and re-filed plans as HMOs, which require substantial gatekeeper provisions to reduce specialist access, in order to keep premium costs from mushrooming in the face of all of the new (and some would say unnecessary, and possibly unwanted) “minimum essential health benefits” that the new ACA-compliant plans require. In addition, some states were forced to move to many new federal design and benefit changes, especially in the regulatory and compliance areas, such as community rating, which Colorado has had, and in it’s most restrictive form, for several years. Since Colorado already had adopted many of the policy changes and benefits requirments embedded in the federal legislation in years past, the impact of the new changes had less of an impact on Colorado premiums than in other states.

Make no mistake, though: your premiums did not go “down $2,500 a year” under Obamacare. They really did go up.

 

Budget on Health Care: Still Expanding

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“Despite the current health care spending crisis, President Obama’s budget does little to significantly reform the existing entitlements (Medicare and Medicaid) and maintains the implementation of Obamacare—which creates two new entitlements and adds more than $1.8 trillion in new spending by 2023.” -Heritage Foundation, The Foundry

The biggest news in this article is the continued war on seniors which isn’t being discussed in any detail by the mainstream media. With newly-proposed drug “rebates” (a hidden tax paid by Medicare enrollees) and a new Part B surcharge equivalent to 15% of the average Medigap premium, seniors will be disproportionally impacted – just as the Obama administration is gutting the Medicare Advantage program, forcing many seniors back into Original Medicare. So much for choice!

Change in Direction

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With the upholding (well, not so much: let’s say someone decided to be creative in using the words “tax” and “penalty”) of Obamacare, the focus, for me anyway, now shifts from a priority of writing about health insurance and Colorado, and more on writing on health care in the age of Obama and how that will impact Colorado residents (or, more bluntly: how federal regulation will adversely affect Colorado residents, along with the other 49 states). This, obviously, opens things up, as I am no fan of Obamacare, and even less of a fan of how the executive branch, while eschewing the term “imperialist”, crafts regulations that are completely at odds with Congressional intent and actual law (you know, the stuff they actually voted on specifically).

 

A case in point: this marvelous article from Cato that speaks to the way Obamacare is being implemented with nary a thought as to the actual, constructive language in the Act. And you thought we lived in a Republic. Seems that the IRS will become only slightly less powerful that Health and Human Services. But, you already knew that, right?

The Supreme Court decides

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Media reports suggest that today (or, at, least, this week) the Supreme Court will hand down its decision on The Affordable Care Act. To briefly recap, dozens of states sued the federal government to overturn the act; the reasons for that suit are varied, such as the individual mandate, but include such issues as Medicaid funding requirements, which is a huge unfunded liability for states.

I’ve resisted the urge to handicap the forthcoming possibilities, but I do have an opinion. Right or wrong, I’m going to publish it today; one way or the other, the debates between Mr. Obama and Mr. Romney about health care in the upcoming general election will be fascinating to discuss in light of what the SCOTUS decides.

There are four possible outcomes: to do nothing and leave the entire Act standing; to narrowly strike down just the mandate provisions; to strike down the mandate and two other major provisions (which is the position that the Obama Administration said should happen if the Supremes conclude that the individual mandate is unconstitutional), and the fourth: declaring the entire Affordable Care Act unconstitutional.

I have no idea what the “Vegas line” is on this decision, so, I will take my shot-in-the-dark and lay odds:

Do nothing: 12 to 1. Not likely.

Strike down just the individual mandate: 6 to 1. Too narrow, and creates a bigger problem.

Strike down the mandate and the provisions relating to it (the position argued by the Administration if the mandate is unconstitutional): 4 to 1. The Administration wins, and the remaining Act becomes a rallying cry for progressives who always wanted the single-payor option (and this decision almost guarantees it).

Strike down the entire Act: 3 to 1. The most sensible solution of all.

My reasons for giving the best odds for striking the entire Act lay in the unprecedented suit brought by a coalition (frankly, a majority) of states against the federal government. I’m unaware of any action brought against the government by so many states, and this alone should prompt an unprecedented examination of the role of the federal governments’ power to pass legislation that intrudes on the right of the states to govern themselves. It also bears pointing out that the federal government is, technically,  a government of limited powers (the term “states rights” is not a pejorative for discrimination, despite what liberals have always said) with the remaining powers reserved exclusively to the states. With the individual mandate exceeding any rational understanding of the purpose and use, even in liberal hands, of the Commerce Clause, the demand by the states to be relieved of a burden they clearly feel is unconstitutional has to be carefully considered. The strange manner in which the Act was passed, the lack of ANY bipartisanship (or, of that matter, any input from anyone except the Progressive Caucus in the bills ultimate form) the distorted cost projections, not to mention the majority view of the Act across the nation by voters – all of these things must be taken into account by the Justices. Never mind that they are legal scholars who pass judgment on constitutional issues at the highest level; there is and always will be a political element to every controversial Supreme Court decision. Couple this with the lack of a severability clause, and my opinion is that the Supremes err, not on the side of caution, but on the side of good sense: telling Congress that this legislation is so flawed and so intrusive that it would be best to just start over.

And that is what I think the Supremes will do. If they don’t, they will be performing a major disservice to the country, by leaving in place a huge entitlement program that completely remakes the social contract between the government and its citizens (or should they now be called subjects?) without any rational means to pay for it (assuming that the Commerce Clause doesn’t allow the government to tell you what you must buy), while dooming a portion of the insurance industry to almost-certain extinction or, worse, outright nationalization or regulation as a monopolistic utility, with the government calling ALL the shots, while re-distributing massive tax increases to pay for it.

Whatever they decide – it’s going to be interesting. And don’t forget that, in the absence of any new federal legislation, states, including Colorado, will be in a position to craft their own solutions, which is how it should be in the first place. The fact is that Colorado state Republicans control the House by a slim one vote margin – and history shows that in the early 90’s, Colorado’s Governor Roy Romer (D) threatened to pass a single payor system unless “health reform” was enacted, which set us upon the very path we now walk.

Let the games begin! Quoting Rep. Michele Bachmann: ““The decision on Obamacare goes well beyond health care,” she wrote. It “will determine whether or not the court believes the government has a right to mandate that Americans buy a product or service, a direct impact on our freedom and liberty.”

 

 

 

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  • Published: Mar 28th, 2012
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  • Comments: Comments Off on Ignoring the 800 pound gorilla AKA Medicare/Medicaid

Ignoring the 800 pound gorilla AKA Medicare/Medicaid

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Today, as the Supreme Court continues to hear arguments, and asks pointed questions about the legality of Obamacare, it is interesting to note a salient fact that the left conveniently ignores, and in fact pivots away from, and much of the right, unfortunately, doesn’t seem to want to address, probably for political reasons: federal government spending on health care is the prime reason we have a health care crisis in this country.

And on this point, heads will explode: Medicare is a program that is best left to the private market to deliver. And Medicaid is intended for the financially indigent, and should be strengthened, not by forcing billions in expanded “unfunded mandates” down the states’ throats, which is, in my opinion, one of the main driving forces behind the lawsuit brought by 26 states against the federal government over Obamacare. It should be strengthened via block grants from the federal government to the states, so that states may craft their own solutions for the truly poor and financially indigent, rather than the micro-managed and politically inflamed rules from Washington. Note the use of the term “truly poor”. And it should not be a vehicle for the feds to use to jam millions of otherwise insured folks into Medicaid, rather than stay with private insurance, precisely what Obamacare will do. Welcome to the new “dependency class”.

I’ve always been struck by the Democrat’s premise that Medicare is cast in stone and real change is inconceivable. It’s a testament to their allies in the media just how brilliantly they’ve managed to frame the debate strictly within the narrow confines of the status quo, secretly knowing that the status quo is a) in large part responsible for the undoing of the health insurance market (what little of it truly exists, anyway) and b) absolutely essential to restrain, restrict and ultimately collapse any solid attempt at true Medicare reform, which must include the federal government’s dissolution of Medicare as it now stands.

Now, the Obamacare premise goes like this: “that 40 million Americans are distorting the health-care market by shifting costs of free emergency-room care to taxpayers and insurance rate-payers”, as stated in todays’ Wall Street Journal, “Health Law Faces Constitutional Test”.

(An aside: the real fallacy of this idea is this: it doesn’t cost anywhere near $1T, assuming you accept the original CBO-scoring of the costs of Obamacare [which I don’t, and no thinking person not under the influence of a lobbyist should] to provide health care, even at the inflated costs one typically finds in a hospital ER, to the uninsured in America, even if you want to accept the 40 million figure, which any number of studies have pointedly derided as wrong, and artificially inflated.)

Let me chart the path of the reasoning: the federal government is blaming people without health insurance for the catastrophic rise in the cost of health insurance premiums, and advances the notion that the “market” is ‘broken” and they must ride to the rescue.

Except that the market is “broken” because of a lack of market-friendly ideas and execution, including costly mandates, lack of tort reform, and – wait for it, here comes the gorilla – cost-shifting and price fixing by the federal government in Medicare reimbursement and, to a lesser extent, the unfunded mandates driven by Medicaid onto state budgets. The people-in-charge, the one’s riding to the rescue, and in fact the reason we have a problem in the first place.

The arguments in the Supreme Court over Obamacare are admittedly not on this little-known fact, and they shouldn’t be – the constitutional challenge to the law will suffice, for now, and Medicare’s role in our health care system isn’t a legal issue, per se, but rather a political one. But the premise behind Obamacare should be open to vigorous, even rancorous, debate, even if that debate is revolutionary: Medicare is ill-served in the federal government’s hands, and should be abolished and returned to the private market, albeit with adequate safeguards and regulatory framework to allow it to work as a free-market vehicle which delivers health care to the elderly without rationing or capitation. Assuming, as I do, that the nation’s seniors need, even require, a strong health care delivery system, Obamacare, with it’s IPAB function serving as a rationing board over a capitated health care delivery system, is not the answer, even if it’s deemed constitutional. It’s intent, really, is  to accelerate the drive to a single, Medicare-style system for all – the dreaded government option – only it won’t be an option, it will be all you have.

Obamacare is a dismal failure, not only because of its inherent unconstitutionality, as anyone who understands the limited power of  the federal government must see, but because it’s a canard to believe that the feds are acting in good faith to “fix” what they have broken: a free-market derived health care delivery system that rewards efficiency, is innovative, and more importantly doesn’t come between a doctor and his patient. Broadly, Medicare pays only about 85% of the cost of delivery of health care and, given that the feds buy almost half of all health care delivered in the U.S. yearly, this is a huge cost-shift to the private sector, a form of taxation which goes unanswered and ignored by those on the left, and makes the health care costs associated with the uninsured pale in comparison.

Of course, as everyone knows, whenever Medicare is discussed in the public realm, Democrats portray Republicans as “pushing Granny off the cliff”, while secretly watching their own minions do exactly that – while Republicans, powerless to stop them, get the blame. After all, it was Democrats who crafted the $500 million Medicare cut that brought the costs of Obamacare “below” $1T. Only it didn’t.

No discussion of how to fix the health care system in this country can exclude the federal government’s price-fixing in health care pricing, or the effect of this cost-shift, labeled as the “hydraulics of health care”, on the private sector. To do otherwise is equivalent to re-arranging the deck chairs on the Titanic. And Obamacare certainly isn’t the vehicle to do that, as it completes the disaster Democrats have been secretly hoping for. The Supreme Court challenge to Obamacare, while absolutely necessary, is a sideshow to what the real problem is. And continued chaos favors the Democrats anyway: all the more reason why Republicans need control of the House, the Senate AND the White House.

Lastly, Paul Ryans’ proposals on Medicare are interesting and informative, but I d0n’t think they go far enough – either in terms of building a true market-based health care system, or in terms of the impact on our looming Greek-style default over unfunded liabilities. More on this later.

 

The Argument Against Obamcare

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The Supreme Court of the United States, beginning this week, will hear arguments in the case against Obamacare, brought by 26 states against the federal government. Their legal ruling, due sometime this summer, will determine, in the words of David B. Rivkin and Lee A. Casey, writing in an op-ed in the pages of The Wall Street Journal, “the Constitution’s structural guarantees of individual liberty, which limit government power and ensure political accountability by dividing that power between federal and state authorities”.

In their article, published today, attorney’s Rivkin and Casey may be giving us a sneak peek at how Paul Clement, the attorney arguing against Obamacare, will craft his arguments to the Court. Mr. Clement is the former United States solicitor general charged with arguing that Obamacare “represents an unprecedented overreach into the personal lives of Americans”, according to Jess Bravin, writing in the WSJ (“Courtly Battle in Health Case”). Mr. Clement is lead counsel in the case, brought by 26 states to overturn the Affordable Care Act, notoriously known as Obamacare.

Given that there are any number of ways, on any number of separate issues, that the Supremes could rule, I will refrain from making any predictions. It is interesting to note, though, that health insurers, who have been reluctantly complicit in the birth of Obamacare, the major negotiating point in their favor being the individual mandate, presented the court with a brief that was remarkably neutral, suggesting that, if the individual mandate is overturned, then the entire bill must be overturned. This is nothing more than window dressing: the insurers know that their survival, at least at the time, required a healthy dose of government-imposed regulation on their business model, turning them into crony-capitalist utilities in exchange for the chance to continue profiting from a system that many Democrat legislators have decried as “evil” and have vowed to destroy. What this means is that insurers signed on to Obamacare as soon as the government promised them that everyone must be on coverage, essentially mandating a compulsory market (with compulsory profit, too). As it turns out, given the kind of remarks we’ve heard from former Administration officials and the Secretary of HHS, their flight to regulatory safety was ill-advised and will result in their ultimate demise. Perhaps they should have stood their ground and made a fight for it, rather than make a pact with the devil.

 

 

 

U.S. health care: an alternative reality

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This article by John Goodman, a noted commentator on health care issues, makes many of the points I’ve discussed with clients over the years. It’s an excellent treatise on why true competition in the delivery of health care would result in lower prices.

I’d add one thing: federal health care spending is a major cause of the exorbitant prices charged for health care, as the federal government simply imposes a price control on itself and passes the unpaid costs on to you, the insured consumer. By demanding that care be provided at below the cost to produce it, the federal government is essentially imposing an ever escalating tax on anyone who has insurance and then forcing you to pay it. This of course leads to the scenario that we see all around us: insurers, forced to cover the “hydraulics” of cost shifting, charge higher and higher premiums, while the federal government ratchets down what they pay for care, further exacerbating the premium crisis, and then, lo and behold, the government announces that it’s the solution to the crisis – a crisis that they created and compound every day.

I submit that the federal government should get out of the health care industry all together. States do a far better job of administering social welfare programs for it’s citizens. Incidentally, this is the same idea Paul Ryan has, among others, for an alternative to Obamacare.

 

 

 

POTUS re-nominates Berwick to CMS

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Dr. Donald Berwick, the controversial pediatrician who has an open love affair with the British National Health Service and has openly stated that health care reform is by necessity redistributive, has been re-nominated to head the Center for Medicare and Medicaid Services by POTUS Obama.

With a new Congress, his recess appointment would have ended, and the President chose to submit his name once again, in spite of the controversies surrounding his views, which Republicans were quick to seize upon. Senator Orrin Hatch, R-UT, stated that the Berwick re-nomination was “a disappointing decision”.

Dr. Berwick will face a hearing in the Finance Committee and confirmation by the full Senate.

Read more here.

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