Archive for January, 2018

The News is focused on Congress’s CR efforts. Good news is that the CR includes a few ACA taxes. Let’s take a look.

January 25, 2018

As your humble author drafts this Post the CR passed by the House was just passed by Democrats (and Republicans) in the Senate. The so-called Schumer Shutdown, as the White House named it, is created confusion, a lot of finger-pointing and pain for millions of Americans.
But, American premium payers do get relief from 3 ACA taxes.

The CR, which is actually being attached as an amendment to H.R. 195 (Federal Register cost-reduction bill), will allow the federal government to continue with normal operations until Feb. 16. The reference to “normal operations” seems a bit ironic doesn’t it given the manner in which the US Congress works?

If you recall, a couple weeks ago we discussed some of the taxes still imbedded in the ACA and a few taxes that had been deferred over the past couple years.

The CR being voted upon currently addresses the taxes we discussed. It does not “repeal” them or permanently eliminate them, of course. The GOP can’t seem to actually deal with “permanent elimination” of anything in the ACA.

Let’s look at those taxes in the bill:

  • Postpone reinstatement of the ACA Medical Device tax for two years.
  • Postpone reinstatement of the ACA health insurer fees for two years.
  • Postpone the start date of the Cadillac tax or a tax on high-cost employer-sponsored health benefits packages, for two years.

It is good news to see these taxes deferred but it’s impossible to understand why the GOP can’t or won’t eliminate them permanently.

I think the honest reason for these actions, or lack of, lies with the basic problem inherit in our legislative representatives. I won’t expand on those thoughts because it becomes too negative and down right depressing.

Democracy is the best form of government in the world but it is the most difficult to maintain, as history as shown. For a democracy to survive, let alone thrive, it requires an informed voting public. That requires an open, free, and non-partisan Press. I won’t expand on that point either for the same reasons as mentioned prior.

As we discussed in earlier Posts, there will be much to discuss in the coming months concerning Healthcare Reform but for now let’s watch as the Democrats play their hand in the Continuing Resolution.

Whether one is a Republican, Democrat or Libertarian the activities in Washington DC are frustrating. But, one thing is clear and that is we’re all in this together.

Until next week.

Mark Reynolds, RHU

Association Health Plans – A chance to make a difference! The Department of Labor is asking for input. A positive step.

January 18, 2018

Association Health Plans (AHP), which we’ve discussed here before, may soon be in the news again. The DOL has released some initial guidelines on which it is requesting comments. As you may recall, your humble author has opined that AHPs present an opportunity to lower the cost of premiums as well as healthcare costs while increasing the number of options available for small employers and their employees.

You may not hear much about AHPs in the liberal Press outlets and maybe not on regular TV at all because it is a complex subject but also because liberals fear it furthers the dismantling of the ACA.

In fact the only outlets which may cover the ongoing discussion will be consumer oriented free market websites and blogs. Cable business shows will provide short segments but for detail we’ll need to stay tuned to trust-worthy entities such as SPBA (Society of Professional Benefit Advisors) or directly from the DOL or other government sites.

But, we’ll watch and discuss the progress of these regulations here and look for the best ideas being pushed forward. Today will be a view from 10,000 feet but we will fly lower in the weeks to come.

The guidelines will expand the existing DOL ERISA regs to incorporate the objective of allowing small employers to band together to create a larger unit which can be treated as a single employer.
In other words, by banding together, small employers with 2-50 EEs, can shop for and consider health insurance plans just like large employers. It increases their buying power. Wouldn’t you, as an individual, like to have the purchasing power of an employer the size Walmart, Microsoft, Boeing, or Amazon. I would.

Let’s start with some a couple of the DOL guidelines released:

  • Broadening the criteria under ERISA section 3(5) for determining when employers may join together in an employer group or association that is treated as the “employer” sponsor of a single multiple-employer “employee welfare benefit plan” and “group health plan” as those terms are defined in Title I of ERISA.
    (I know, a bit technical)
  • Redefines the term “group or association of employers” under ERISA more broadly, in a way that would allow more freedom for businesses to join together in organizations that could offer group health coverage regulated under the ACA as large group coverage.
  • Treating the AHP as the “employer sponsor” of a single plan. The regulation would facilitate the adoption and administration of such arrangements.

I’ll stop right there with the technical mumble jumble because the last point a key point.

By allowing small employers to be treated a like a large employer, because the small employer is member of an AHP, will increase the purchasing power along with the number of options available to the small employer.

There is much more to review such as:

  • Will individual employers within an AHP be able to purchase stop-loss coverage?
  • How will EHBs be addressed?
  • How does an AHP sign up its initial member employers?
  • Can a small employer’s initial premiums be set for each single employer or must premiums be the same for all member employers?
  • Will AHPs overcome the stop-loss killing regulations set in force in California?

So, there is much to review. I look forward to your input as the AHP guidelines are constructed.

It is important to remember that while the AHP approach provides a huge potential to reduce cost and improve access, we can not go away from guarantee access and providing responsible provisions for participant’s pre-existing conditions.

We’re all in this together so let me know what you think.
Until next week.

Mark Reynolds, RHU

They hope we’ll forget about the taxes still in the ACA. But we can’t, can we?

January 11, 2018

It’s easy to let things slide past us after awhile. Who among us can remember everything for ever and be willing and able to discuss a specific topic regarding of its importance? In the news reports on January 2nd, 2018 there were a scant few reports scattered among the daily news about how the ACA tax on Medical Devices was going live again. After a 2 year pause this tax will once again take affect and be a part of the cost and premiums we pay because it is a tax that the insurers will pay.

But, no one took notice. Nor did anyone start talking about the other taxes still remaining in the ACA. Why do you think no one is talking about these burdensome-premium raising taxes?
Here’s a couple thoughts:

  • In general the Press, both Liberal and Conservative, are focused on what they view as bigger topics such as the DACA issue, budget to keep the government open, Russia-Russia-Russia, is Jerusalem really Israel’s capital, Iran and North Korea, as well as the President’s Tweets, to name a couple.
  • The liberal Press does not want to bring up ACA taxes because it might distract from the get-Trump movement or worse, gain traction in the press and start the GOP in the direction of repealing the taxes.
  • The conservative Press does not want to bring it up because it points to the GOP’s failure to properly address the R&R of the ACA.
  • Democrats don’t want to discuss it for fear of losing the ACA completely even if it’s deleted a little at a time.
  • The GOP does not want to discuss it because it could pressure them to actually do something to solve the healthcare crisis of delivery and finance.
  • What a friggin mess, right?

In addition if the discussion on ACA taxes gets started the GOP may need to defend why it has done nothing about the following taxes:

  • Excise taxes on health insurance providers, pharmaceutical manufacturers and importers in addition to medical device manufacturers and importers.
    • These excise taxes are projected to raise $19 billion in 2020. 
  • An additional 0.9 percent payroll tax on earnings and a 3.8 percent tax on net investment income (NII) for individuals with incomes exceeding $200,000 and couples with incomes exceeding $250,000.
    • The high-income surtaxes are projected to raise $35 billion in 2020.
  • Excise tax on employer-sponsored health benefits whose value exceeds specified thresholds starting in 2020. The so called “Cadillac” tax reduces after-tax incomes the most in percentage terms for middle-income families. 
    • The excise tax on high-cost health plans is projected to raise $3 billion in 2020 with the revenue gain growing rapidly over time, reaching $20 billion by 2026.
  • Excise tax on employers offering inadequate health insurance coverage. The tax applies to employers with 50 or more full-time equivalent employees.
    • The excise tax is projected to raise $20 billion in 2020. 

Maybe these 5 additional taxes, in addition to the tax on the medical devices, answer the question as to why no one is screaming about the premium-increasing taxes remaining in the ACA.Oops, the cynic in me just popped out.

If the GOP had eliminated these taxes in the tax billed just signed then the GOP would have been forced(by CBO calculations) to adjust its calculated outcome. That could have made their job harder. But remember, Congress and Senate members(and staffers) don’t actually pay these taxes because they have their own health plan separate from the ACA. Therefore, how could we expect them to reduce these taxes.

I mean, if it would make their job harder, and all. Gees, we can’t expect them to work 5 full days each week, keep the promises they make, and still reduce our costs. Oh well!

OK, I know the new year is young and there is still time. But the Congress will soon set its full concentrated focus on the mid-term elections of November 2018, Then we can expect to see nothing being done except more speeches and more promises.
Dang, that cynic again.

Anyway, what do you think. Let’s keep an eye on it because we’re all in this together.

Until next week.

Mark Reynolds, RHU

Enrollment period for ACA Individual plans is over. All the effort and stress for 8 million citizens.

January 4, 2018

We talked a bit about the craziness surrounding the open enrollment period for individual plans on previous occasions. Now the open enrollment period is over and the media will quiet down.

But, the other 300+ million Americans adversely impacted by these individual plans should continue to raise hell! As we’ve discussed in previous posts the entire private sector healthcare system of finance and delivery is suffering because of ACA imposed rules, metallic plans, burdensome regulations, and liberal press bias.

We should not begrudge these 8 million Americans, in fact it’s just the opposite, I wish the number included every American not covered by an employer sponsored plan or Medicare/Medicaid. If the reports are correct there could be another 20 to 25 million Americans on individual plans but choose not to for one reason or another.

The fact remains that Democrats inflicted us all with the ACA in an effort to take over private healthcare so that the government would then control 100% of the health finance and delivery system in America. But, they failed.

Their failure is not due to efforts by the GOP which we’ve all seen to be dysfunctional, pitiful and weak. No, the ACA’s failure is due to the character and spirit of free markets and the American people.

But, once again, the efforts by Liberals cause the many to pay extra for the few. In this case, the many have seen their premiums increase 300%, their doctors disappear off PPOs, and the number as well as quality of the health plans offered reduced.

We see similar punitive results in the liberal assault on so-called climate change. Their efforts here are another example in which the people who can least afford it bear the brunt of the cost. We all want clean water, clean air and blue shies. But, the regulations demanded by liberals raise the cost for Americans struggling to get by while the governments in India, China, and other polluting countries just skip on by.

I start out 2018 with this rather negative post not because I think the future is bad or that we are doomed to the same crappy health plans forever. I begin 2018 with this message because I know we all need reminded and that while you and I are busy living our lives there are others who won’t give up the fight.

I think 2018 will bring continual reminders about the need to change or repeal the ACA. But since the Congress and Senate seem incapable of pulling it together the changes we need will likely come in piece meal bills and directives.

So, don’t begrudge the 8 million mentioned above because many of them could not qualify for or afford coverage before the ACA. The ACA would never have gotten a foothold and could have been avoided had the GOP implemented GI back in 2002-2003 when they implemented HSA and HRA plans. It could have been simple!

I think change is coming and is in the works as you read this. Let’s not forget the potential for Association Health Plans and the ability to sell across state lines were put into motion in 2017.

We have reason to be angry but we also have reason to have hope. Let’s watch for the incremental glacial movements in 2018 that will bring relief to the millions of premium paying citizens of America.And I’ll keep you updated along the way.
Happy New Year.

Let me know what you think because you know we’re all in this together!

Until next week.

Mark Reynolds, RHU