Archive for May, 2017

Small changes and good communication could lead to a successful Healthcare Bill to replace the ACA. Let’s discuss:

May 25, 2017

Last week I promised to continue analyzing the key components of the AHCA 2.0 and we’ll do that. But based on the Press’s over-reporting on President Trump’s meeting in the Oval Office with the Russians, Former Director Comey, the so-called Russian conspiracy, the appointment of Robert Mueller as Special Counsel as well as the President’s historic trip to the Middle East I thought we could take a different path.

The reasoning is that while the Press is focused on trying to bring down President Trump it has taken the focus away from the House/Senate’s work on the ACHA 2.0 and has allowed the “Senate 14” to work on their health plan virtually unmolested by the press. BTW, the Senate 14 is a name I’m attaching to the 14 old white guys in the Senate assigned to produce a fix for the House bill.

As we discussed in past weeks, the initial actions related to replacing the Affordable Care Act do not need to be earth shattering, controversial or bad for the environment. There are a number of changes that could make plans easier to understand for members, make it easier to choose the plan best suited for your needs, provide better value and not stir up political upheaval.

I know its naïve to hope that some common sense changes to the ACA can be embraced and that it is not necessary to go to war on every suggested action. Here are just a couple of thoughts to help the Senate “save the day”:

  1. Address the issue of Medicare Expansion first – make it known that the AHCA 2.0 will not affect members covered under the current guidelines for 2 years. Also make it clear that during that period rules will be enacted to do two things:
    * One is explain how and make it clear that the truly needful enrollees will lose nothing. The method by which their premium payments may be different such as Pre-fundable tax credits but that this method will create more choices, more plans available and more doctors who accept the plans.
    *Two is enact and explain how able bodied employable people (probably younger) will be reduced from Medicare Expansion because it just isn’t designed for the current young and/or able-bodied working folks. But more plans with lower premiums will be available which will be more beneficial to them.
  2. Plainly spell out that plans will be “guarantee issue” and no “pre-ex” for those that stay covered. Explain that more plan choices with lower premiums that are GI will be better than the ACA for folks that don’t try to game the system by going without coverage.
  3. Address the need, make that requirement, to have coverage using one of the following methods.
    * Keep a “Mandate”  similar to what is currently in code but with real penalties for non-compliance. For instance: individuals should a graded penalty that is increased by age as well as income with a minimum of a $2,500 penalty per year. If someone making $25,000 year does not have coverage then the penalty would be the minimum but a person making $100,000 per year might pay as much as $5000 per year for non-compliance.
    * For employers the current mandate for employers with 50+ employees is adequate however the penalty should be at least double what the current ACA statute dictates.
  4. Eliminate plan benefit requirements in excess of the Essential Health Benefit categories of coverage. Don’t dictate deductibles or plan characteristics except for the benefit category of the EHBs. in other words, plans can include limits on certain benefits to help bring premiums lower and to make more selections available.
    * I recognize that this one is controversial because people fear that insurers will strip out benefits and offer really “crappy” health plans. Plans may differ by region but if plans are more plentiful offering rich as well as less rich and crappy plans which are more affordable with more doctors and hospitals then people are free to buy what fits their need.

I realize that this is only 4 categories from the multitude of issues for the Senate to address. But, starting with these basics as a guide will build a foundation for the entire package.

There are two things which are more important than anything.

  1. Make the plans authentic. Don’t call it Repeal & Replace if it does not strike down the entire ACA. The AHCA 2.0 must include most of the provisions of the ACA to have a foundation but the components of the ACA, which we all hate and know create higher premium and lower quality, must be stricken. Things like the Cadillac tax, all of the taxes really, the State Exchanges, rating restrictions such as Minimum Loss Ratios are just a few.
  2. The second “must do” is communicated to the public in a manner than over-comes what we know will be attacks from the liberal press and politicians as well as special interests. We know that they will be predicting thousands will die and babies will go without care so the communication must be of a “positive shock & awe” manner.
    If the end-product is good & honest then all it will take is mass communication and education.

Next week, depending on the outcome of the President’s trip let’s expand on the idea of Federal Invisible Risk Reinsurance that is included in the AHCA 2.0. This could very well be a means to replace the insurer subsidies but do so in an intelligent actuarial process.

Until then, let’s keep our eye on the fact that employers and their employees as well as individuals not on employer sponsored plans need our help.
They know that we’re all in this together.

Talk then

Mark Reynolds, RHU

Let’s continue the analysis of AHCA 2.0 among so many other Distractions in Washington DC this past week.

May 18, 2017

Since last week’s post the airwaves have been filled with overload of information about President Trump letting FBI Director Comey go. I don’t need to add to that because frankly you probably are past the saturation point. The President will appoint a replacement, the Senate will be consumed with doomsday cries by Democrats but a new Director will be appointed. My guess is President Trump will announce the replacement by Memorial Day.

But, the Senate has other work to do and its modifications to AHCA 2.0 will be hugely important and scrutinized. In the meantime let’s look at some more of the important provisions in the AHCA 2.0 and see what we like.
We’re trying a little “color” to highlight the analysis. Let me know if you like it!
Here’s this week’s six:

Refundable tax credits – This is a big one because it expands current “subsidy processes” so to be available for members off-exchange although I keep wanting to call this provision the “Pre-fundable” tax credits.  Basically, for those that qualify for subsidy, it makes premium payments directly to the insurer. But maybe the best feature is that a qualified member does not need to be in an “exchange” to receive the assistance. You read correctly. As long as the health plan is qualified (no coverage for abortion, et al) then a qualified member can benefit from the subsidies from the AHCA. It renders the remaining state exchanges obsolete, wouldn’t you say?
But, it appears to apply only to individual plans. My hope is that if one spouse or single parent is covered by an employer plan why can’t that member qualify for this credit for his/her dependents? Without including the dependents it may encourage employers to reduce or eliminate in cost sharing the employer provides.
Tax deductibility – I hate to keep saying it but this provision is also a big deal! It allows people on individual plans to deduct the cost of the premium they pay from their Federal income tax return. Again, a plan must be qualified and there is a monthly limit but this is a tax benefit that we have been wanting for years.
Also again, it is unclear if the tax deductibility applies to an employee’s contribution to the premium they pay on their employer’s paid plan. (I can see how this could lead to employers lowering the percentage of premium they pay so let’s watch this one.)
5:1 pricing – You’ve read our opinion on this before but what people are saying in the press is a little misleading. Opponents declare that this will increase premiums on the older members ages 50-64 years old. I think the jury is still out on this because I believe  insurers were forced to increase the rates on 50-64 year olds under the ACA just to be cautious. And of course the ACA’s 3:1 ratio certainly increased cost for 20-49 year old Americans which affected enrollment numbers. Let’s watch this one because if the premiums for the 20-49 year olds are reduced, to where they could be, it may increase enrollment of healthy folks and allow the insurers to back off the 50-64 year old brackets.
Medicare Expansion –
States already in the expanded Medicare programs get to maintain them through Dec 31st 1919. That’s two years in which the healthy working age folks can be weaned off Medicare and into the appropriate plans provided by insurers under the AHCA 2.0. If a member qualifies for the “pre-fundable” tax credit mentioned above then the outcome for these members will be far better than the very limited Medicare/Medicaid?Medical plan they have now.
We will hear great wailling and gnashing of teeth from opponents as they promise that we’ll see citizens (and non-citizens) suffering and dying in the streets because our citizens could not get access to healthcare. But, we believe that private plans offered by insurers with access to Pre-fundable tax credits will be better for these members. 
Health Ins Tax – Most citizens don’t even know what this one is, I’m sure. It’s a tax levied against insurers based on a percentage of premium. It was passed straight to premium (plus some) which provided no benefit to members or insurers. It was solely devised as a source of revenue for the government.
We must watch this one because it is impossible to honestly view the calculation that would result in a reduction in premium due to the absence of this tax. There was an amendment submitted to AHCA 2.0 that required insurers to show the exact “dollar for dollar” amount that premiums are reduced by this tax elimination. But, I have not found anything in the text of H.R.1628, the AHCA 2.0 bill, to verify its inclusion.

HSA limits –
Admittedly this provision may not cause a lot of enthusiasm but it is a big improvement. It allows members who want to use an HSA  and are covered by an HSA compatible plan to contribute pre-tax HSA dollars up to the out-of-pocket limit on their plan. HSA limits started out at $2450 and have been increased over the years past $2950 so being able to contribute up to any OOP limit gives members a chance to store up money for later years when they are more likely to consume more healthcare dollars.

Next week we will address FSAs, HRAs, state waivers and more. That is unless we see Washington actually implode over the hubbub concerning the termination of Director Comey. Let’s hope Congress can do its work as we elected it to do and work on the issues facing our nation.

Until then keep sending me your thoughts. We’ll stay on it together.

Mark Reynolds, RHU


AHCA 2.0 passed in the House. Let’s analyze some of the issues important to us all. With a little commentary mixed in.

May 11, 2017

Now that the House has passed its version of the AHCA and had its celebration in the Rose Garden AHCA 2.0 (as we’ll call it) heads toward the Senate. Some say that the Senate will take 2-3 months to work through its process while others suggest it will take many months. Either way we have plenty of time to discuss and digest the House HR1628.

First, let me admit that I was not correct last week when I predicted the House would not actually vote on the amended version of the American Healthcare Act. Second, I want to recommend to everyone not to get too over-stressed about the House’s bill because the Senate may, or at least should, make significant modifications.

But, we need to keep the conversation active and look for the positives we change pursue or else the Politicians may think we’re not watching what they are doing and we don’t want them to overlook the fixes that are needed.

Before we start I will make a couple points. One is that there are many details to specific provisions that are yet to be provided which is concerning. Before we can truly analyze certain benefits such as Pre-ex condition and the Mandates actually apply, we need clarification.

The second is that since AHCA 2.0 does not completely repeal the ACA nor eliminate the ACA’s ability to be quickly resurrected the Republicans have their political necks stretched way out over the chopping block.
If AHCA 2.0 falters, in anyway, Democrats can re-activate the ACA when they get a Democrat in the President’s office using the Departments of HHS, CMS, and IRS. That’s two big strikes against the Republicans and we all know how many strikes we get, right?  But for today let’s review what AHCA 2.0 provides based on information available.

Let me outline some the topics we need to discuss but I will address only a few in each of the next couple weeks. Let’s face it we seem to have the time and no need to over-dose. So here we go:

* Mandate for Individual * Mandate for Employer
Abortion coverage * Guarantee Issue
Continuous coverage incentive * Pre-existing conditions
* Refundable tax credits * Tax deductibility
5:1 pricing * Medicare Expansion * Health Ins Tax
* Invisible Risk Sharing program * State waiver of EHP
* HSA limits *
FSA limits * HRAs * and much more.

There are many more issues that we will address over the coming weeks but let’s start with six for these each week. So let’s start with:

Mandate for Individuals –
you will hear proponents say that this mandate is repealed but that is not true. The mandate is still as alive as before but the penalty or fine/tax is reduced to zero.
Mandate for ALE Employers – same as with the individual mandate. This mandate is still alive and could be activated by future administrations with little effort.
Pre-existing conditions – This is the big one and I beg your patience but it’s still unclear to me exactly how it applies. This provision would only apply to people who have a “gap” in their coverage for longer than 63 days. But I am unclear about how the “pre-ex” provision will be applied to members for whom it does apply when they seek coverage. Is the member covered for every thing else but the pre-ex condition? How long does the pre-ex remain in place? Does it apply in employer sponsored plans as well as individual plans?
Sorry, but we must get clarification on this one!
Abortion coverage – plans that include coverage for abortion, except in the case of the life of the mother, can not benefit from the provisions that assist the member in anyway. That means assistance in paying premium, tax deductibility, and so forth would not apply to plans that cover abortion.
Plans that cover abortion can be offered by insurers but members can’t receive the assistance built into the AHCA 2.0.
Guarantee Issue – All plans must be issued on a guaranteed basis regardless of health history or previous coverage.
Incentive for continuous coverage – This is AHCA 2.0’s attempt to encourage people to enroll or face the penalty of their premium being increased by 30%. It is unclear to me how effective this will be but also how it will actually work. It appears to apply to small group plans as well as individual plans. That means employer plans could have some employees covered that are being surcharged 30% while others are not. (Note, it sounds as though the premium subsidies may actually be available to assist late enrollees so the success of this provision questionable)

That’s six specific provisions for today. I look forward to watching as the Senate wrestles with AHCA 2.0. Let’s see if the Senate’s actions are influenced by the Democrat’s and liberal media’s efforts to muddle and distort the facts. We’ll sort it out together.

As usual I am interested to hear what you think because we are all in this together.

Until next time,

Mark Reynolds, RHU

AHCA 2.0 – Why can’t we see the text of the bill and its revisions? Will it even get written into “bill form”?

May 4, 2017

What happened to the serious, more like whimsical, promise by the GOP leadership that we would have time to read and debate each bill proposed? The biggest problem the GOP faces on their efforts to Repeal & Replace the ACA is that they are too proud to trashcan the first version and start over. If you want a race horse but all you own is a pig: putting a saddle and jockey on the pig won’t make it any better.

Sorry for the swine reference but in a way it fits, doesn’t it? The GOP railed for 8 years that the Pres Obama made one bad deal after another because getting a signed deal was more important than the content of the deal. Well, the GOP effort in the House is no better.

We have not seen the revisions in their entirety but the Pre-existing condition issue is getting bantered around and probably misleading everyone. Your author is in favor of a smart 6/12 pre-ex clause to help keep prices down and people covered. Remember that AHCA 1.0 had no enforcement mechanism to make folks get covered. It had a provision to allow insurers to charge a bit more for late enrollees but no increase could cover the adverse selection that policy would battle.

So, it’s May 2nd, they are suggesting a vote is possible by May 4th and everyone is leaving Washington on May 5th for another extended vacation. Again, the process is rushed and very few in DC ever show courage to stand up for their values or promises so its anyone’s guess what we might see if they try to ram it through on Thursday.

On another note, some how a continueing resolution was concocted which is just now being flushed out. The initial opinions are that the Dems gave up nothing and the Repubs funded Planned Parenthood, Endowment for the Arts, the ACA subsidies and got nothing but a small increase for defense. Maybe the President is right: “maybe it is time for a government shutdown”. If the GOP can’t help President Trump with the border wall and healthcare reform then why does he need to sign off on a continuing resolution that makes Conservatives appear weak.

Actually every GOP member that campaigned on repeal and replace, strong immigration enforcement, tax relief, and national security should be ashamed. Sorry but it’s a fact and I bet we don’t see a vote before this week’s break!

What do you thing?
It’s a mess but we’re all in this together!

Mark Reynolds, RHU