Archive for the ‘Short Term Medical’ Category

Sometimes, don’t we need to take a step back to look at where we could have gone. That’s really true these days for Healthcare Reform!

March 22, 2018

Starting back in 1992 and repeated over the past 10 years we’ve written about the core issues to address in order to control and lower healthcare costs both from premium and from providers. But, as the calendar turns weeks into months and months into years it’s easy to lose sight of the fundamental issues and bedrock ideas, which when implemented, can make a difference.

These days the political discussion in Washington DC stays clear of “repeal & replace” for a number of reasons, mostly partisan reasons, actually. But if you listen carefully and follow closely to can see various congress folks trying to implement their own ideas to address some specific issue important to their own constituents, or their re-election.

Lately, we hear tell of “shoring up the markets” to control premium increases. We hear discussion about financial support in states that heavily adopted public exchanges. We hear about states longing for Medicaid expansion because the ACA is eating their state’s budget alive.

These discussions are really no more than scratching where it itches for those specific congress-folks. The actions those congress-men/women promote don’t really address the inherit problems caused by or neglected by the ACA . So, they won’t be more than a band aide on an elephant’s bruise. You thought I would say something else, didn’t you?

But you know that I am an optimist trapped in a cynic’s body so my hopes of replacing the ACA with a workable solution are still real although I admit guarded.
If you were asked for meaningful input in designing a workable solution. Could you do it? I bet you could and you’d come closer to a workable solution than the ACA did or the GOP has offered to date.

We first published the 12 ideas below in 2006. I think it’s worth dusting off these ideas to see which would still make a difference. What do you think?

  1. Make health insurance premium 100% tax deductible for anyone who pays it.
  2. Make all fully-insured plans for individuals and families guaranteed issue but with a reasonable Pre-existing condition period for no prior coverage.
    Pre-ex period: 12 months would encourage participation.
  3. Group plans of 2+ employees remain GI with No Loss-No Gain Take over.
  4. Allow carriers a reasonable corridor for Risk Adjustment Factors (30%). Also let insurers determine area rating factors based on their data and statistics.
  5. Tort reform: Loser Pays and/or Fixed Attorneys at 20%.
  6. Allow carriers and plans to sell across state lines. (Maybe the AHPs??)
  7. No new benefit mandates from States or Feds for five years plus allow insurers freedom to build plans that the market demands. That the people demand!
  8. Mandate HRAs permissible and available to implement on all plans.
  9. All insurers must publish and release statistics and experience data.
  10. Universal enrollment forms for all group plans and all individual/family plans.
  11. Health plan commission set at level 7% and does not increase as premium does.
  12. Providers must post their rates per service. Hospitals must post their outcomes.

We are all used to the ACA mandates of kids to 26 and wellness or preventive, so let’s leave those in place.
But, let’s eliminate Unlimited Lifetime levels and return to $5M per insured
Also let’s eliminate the Medical Loss Ratio (MLR) limits since no other industry in the world has its profit margin restricted like insurers do. 

Then let’s go crazy and build in incentives for employers to support wellness plans. If we want to bend the cost curve downward we must address member behavior and expectations through real wellness and benefit structure.

With the brief outline above we can provide solutions for:

  • Those that want to buy insurance but are un-insurable
  • Those that don’t want to buy & wait until they have a problem to buy insurance.
  • Guaranteed acceptance
  • How to push premiums lower
  • How to push unit cost of healthcare lower
  • Total transparency of statistics and outcome data.
  •  Improving benefits with lower out of pocket limits.

So, there is a quick review. I encourage you to give this some thought and to give us your input. If we put something together worthwhile then who knows; we might make a difference. There’s an election this Fall, remember.

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

Until next week,

Mark Reynolds, RHU
It stands for “Walk the Faith”.

People “think” the ACA Individual Mandate and its “penalty” is gone thanks to the Tax Cut & Jobs Act of 2017. But is it and why are so many confused about it?

March 15, 2018

As happens so often, people hear about an action taken by some level of their local, state or Federal Government authority and misunderstand its effect it has on them as well as the timeline for that effect in their life. The ACA Individual Mandate (IM) is addressed in the Tax Cut & Jobs Act of 2017 (TCJA). But two things seem to be confused.

One, its being reported that the IM is “repealed” by the TCJA but what is really more accurate is that the penalty for not having medical insurance coverage is simply being set to zero. As we’ve discussed in previous Posts, every effort to R&R the ACA by the GOP has included setting the penalty for non-compliance to zero. As discussed before, at any time in the future a new Congress, probably Dem but possibly GOP, can reset the penalty for not having coverage to what ever it decides and even higher that the levels within the original IM of the ACA. That should not be defined as “repealed”!

The second issue is that many people think they do not have to worry about a tax penalty for not having medical insurance coverage in 2018? That’s understanding is wrong. The IM and its penalties remain in place for the tax year 2018. In a statement that some called a “finger in the air to Americans” retiring IRS Commissioner Koskinen stated that the IRS will vigorously enforce the ACA IM penalty for tax year 2018. So folks, don’t let your coverage lapse.

We have started to see the next phase of the IM “repeal” as prognosticators predict and promise that the elimination of the IM will lead to a spike in premiums and huge drop in the number of Americans will health insurance. Seriously, do you think folks could tell the difference in their premiums after what they have felt so far over the past 8 years? Well, let’s wait to see shall we?.

My bet is that eliminating the IM will have minimal affect on citizens who do not get their health insurance through their employer. I’m certain that many individual States will take actions on their own to mandate coverage, especially Liberal states with a highly subsidized Exchange. But, even that action will not produce any noticeable change in coverage.

Those states suing about the TCJA or President Trump or taking other steps within their state will be busy for the next 2 years. They will see and probably resist the growth in Association Health Plans, the introduction of selling medical insurance cross state lines, as well as Short Term Medical plans.

So, if you are in the consulting business, are a CPA, or other tax preparer it would be helpful to clarify this issue with your clients and prospects. They may think you are really smart. They may just think ho-hum. But, you will be clarifying for them something that may save them some money.

That’s it for this week. Short Post, I know, but that’s because the subject matter called for no more and also because we’re focused on a few other topics in the weeks to come.

Let me know what you think.
Thanks for your feedback. It confirms for me that we are all in this together.

Until next week.

Mark Reynolds, RHU
It stands for “walk the faith”.

Trump Administration releasing new standards for Short-term Medical Plans. Is this good, bad, no big deal? Let’s discuss.

March 8, 2018

President Trump’s administration has released “new rules” which will allow Short Term Medical Plans (STM) to be offered for up to 12 months. This is good news for tens of thousands of Americans but it will cause ACA advocates to go crazy. Which is kind of fun to watch, actually.

In the past I’ve not talked about STMs as they were restricted by the ACA and certain states which prevented STMs from being a long-term or even intermediate term solution for reforming our healthcare issues. STMs had been designed:

  •  As temporary coverage, lasting for a few months. while
  • For workers  between jobs.
  • To provide limited protection.
  • Portions of hospital or doctor bills.
  • Not to be long-term coverage us it made sense to member.

But, premiums have increased 300% over the past 7 years and out of pocket limits on ACA compliant plans have increased to a point where they can cause financial ruin. No one, who avidly or rabidly supports the ACA, wants to admit or acknowledge that the increase premiums are paid primarily by un-subsidized population of American. Stated more clearly, people who don’t received subsidies pay the brunt of these increased costs.

 “We want to open up affordable alternatives to unaffordable Affordable Care Act policies,” said Health and Human Services Secretary Alex Azar. “This is one step in the direction of providing Americans health insurance options that are more affordable and more suitable to individual and family circumstances.”

STMs could add more options at potentially a fraction of the premium of ACA plans. STMs would help healthy folks, strapped financially by ACA plans, in both big city and urban areas but certainly in the rural areas of the country.

Opponents will argue at least three issues for the downside of STMs. The first is that STMs will dilute ACA compliant plans as the premium paying healthy folks seek out and obtain coverage from a lower priced STM. If you were healthy and could slash your health plan premium by 50-75%, would you try it? Heck, Yeah!

Currently, under the ACA, STMs are offered generally for only 90 days at a time then must be renewed. Generally speaking their benefit designs are “crap” as one would honestly describe. One can’t blame an insurer for a low cost “crappy” plan when it knows its customer could use the plan then be gone in less than 90 days. Insurers could never sustain a reasonably designed plan with Rx copays and high limits on coverage because a single episode of care would wipe out reserves.

But, we have not yet seen what the market will demand of STMs when they can be offered for up to 12 months. An insurer then could assume that members would retain coverage for a longer period and thus may be able offer plans a bit richer in benefits while still a fraction of ACA plan prices. We’ll see about this.

There are reports from folks at CMS (Center for Medicare and Medicaid Services) estimate that these STMs might attract up to 200,000 members nationally. That estimate could be dead-on accurate or wildly off. But, since the majority of working Americans receive their benefits through their employer it may in the ballpark.

I said above that opponents would argue three issues. The second is that acquiring coverage requires folks to answer health related questions on the application, and insurers can reject applicants with preexisting medical problems.  ACA plans cannot underwrite applicants and cannot refuse coverage even if an applicant is in an ambulance heading for the hospital. 

The third issue opponents will absolutely hate is the benefit design of these STMs. STMs will certainly not include the Essential Health Benefits or pediatric dental, or maybe even wellness/preventive benefits. STMs will be designed and be appealing to healthy folks

Opponents will argue that citizens will be uninformed about the plan benefits and be buying plans that do not provide the coverage that our citizens require. Opponents will not give these healthy premium paying Americans and credit for wisdom or discernment.

Those are three very important objections and they must be addressed because there will be some states, such as Ca, that will not like STMs and will fight there presence in the state’s market.

But, the primary objectors will be:

  • Rabid ACA supporters who actually want the ACA to morph into single-payer plans, but are intellectually dishonest about their motive.
  •  Insurers who have been collecting huge premiums and reporting record profits will fear losing healthy members who are paying their ACA inflated premiums.

Will STMs be “skinny plans” which applicants need to clearly understand, yes. But, American shoppers are pretty savvy plus they can access insurance professionals to help.

What do critics say, “the proposed regulations for offering ACA non-compliant plans along with the alleged elimination of the individual mandate by Congress could render the Affordable Care Act even less viable”.

 Others will state that these plans won’t include critical benefits such as mental health coverage which in in the news so much lately due to the apparently mentally impaired man in the Florida school shooting.

These objections shouting “buyer beware”, “there are no benefit” these plans will cause death” will be replayed by the liberal media so much you will wish you could listen to a “ZYPPAH” commercial.

One by-product could be that if the ACA compliant plans are impaired, due partially to eroding healthy membership, it might accelerate the death of the ACA or creation of more alternatives. That would take time but if Congress won’t do the job then maybe time and circumstances will.

Robert Lasewski an industry consultant says, “If consumers think Obamacare premiums are high today, wait until people flood into these short-term and association health plans.” He adds, “The Trump administration will bring rates down substantially for healthy people, but woe unto those who get a condition and have to go back into Obamacare.”

Remember what we’ve said in previous Post, the ACA punishes the many to provide benefits for the few. The opponents of these plans fail to understand or at least empathize with the millions of Americans paying huge premiums each month for benefits they don’t or can’t use but get not subsidy. Let’s help those folks once in awhile.

Christopher Condeluci, a benefits attorney who also served as tax counsel to the U.S. Senate Finance Committee states, “While these plans might not be the best answer, people do need a choice, and this new proposal provides needed choice to a certain subsection of the population.”

Comments like that make me realize that I’m not alone in thinking the American people deserve options. They deserve our support and they deserve a break, for once.

To summarize, STMs will:

  • Offer alternative for healthy Americans.
  • Be a fraction or premiums charged by ACA plans.
  • Provide fewer benefits than ACA compliant plans.
  • Include underwriting that could reject applicants request for coverage.
  • Be very profitable for insurers.

But STMs may:

  • Take healthy members away from ACA plans.
  • Leave ACA plans with more unhealthy than healthy members.
  • Cause ACA plan premiums to increase further.
  • Still be profitable for insurers.

The piece by piece dismantling of the ACA is not a perfect scenario. But if you remember, the ACA piece by piece dismantled all of the great aspects of American healthcare plans starting in 2010. If the piece by piece process is the only way that America can be offered better options then it is a worthy endeavor. The ACA can be slowly eliminated which would give us the time to adjust and improve.

What do you think? We’re in this together so let us know.

Until next week.

Mark Reynolds, RHU
It stands for “Walk the Faith”.