Archive for the ‘US Senate’ 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”.










Remember the ACA’s Independent Payment Advisory Board or “IPAB”. The so-called “Death Panel” is dead! Why is no one talking about this?

March 1, 2018

It’s often difficult to remember things that occurred yesterday, let alone 7 years ago, but do you remember when the ACA was signed in 2010 and its provisions started taking “root”? I know, I know, you think I’m wrong  because everyone thinks the ACA took effect in 2014. But, it actually began its insidious spread across American healthcare in 2010 by imposing taxes, fees, reporting requirements, pricing regulations, speculation and the formation of new agencies and processes including the Independent Payment Advisory Board (IPAB). 

Well, IPAB is dead and credit goes to the Tax Cuts and Jobs Act of 2017 that Congress passed and President Trump signed in December 2017. It’s demise received no fanfare, in fact, I’ve only seen one article about it and no TV commentator has mentioned it to my knowledge. Why is that?

Everyone remembers Governor, turned VP candidate, Sarah Palin calling out the IPAB as a “Death Panel”. Heck, even today when commentators speak of Governor Palin they bring up her comments about IPAB. Calling IPAB the “Death Panel” was not a totally inappropriate synonym for the IPAB given the political nature in Washington. But, that does not mean that the concept of IPAB was necessarily evil.

The concept of IPAB is/was not necessarily a bad one, that is until it gets combined with politics and the politicians in Washington.  Its intended goal was to control, lower, and eliminate cost for Medicare and specifically Medicaid. So, if something could lower costs then it would be good. But if its goal was to eliminate services for Seniors…”What would people like you and me call it? “Death Panel”! 

However, IPAB did not have regulatory or enforcement authority. It could only make suggestions to HHS, other governmental agencies and the commercial markets. IPAB could only recommend lower reimbursement levels for specific services, suggest lower frequency of treatments, or treatment protocol of a specific service can be used for treating “this” condition but not “that” condition. IPAB could only make recommendations.

Did you ever wonder why no politicians, from either party, ever talked about IPAB over the past several years. Democrats, especially, did not want their names connected with IPAB. Why was/is that?

The reason is that IPAB was created to be a scapegoat. It was designed to provide political cover for jelly-spined politicians from either party if allowable treatment protocol for medical services were altered, reimbursements to providers lower, or benefits cut back on Medicaid and Medicare recipients.

Stated more directly, if IPAB did its job, the result of which cut benefits or services to Seniors, then politicians could blame the IPAB people or ACA or Government in general and escape blame for themselves. You must admit that’s clever.

Some will remember that in 2013 the IPAB published new recommendations for “lady check-ups” for women over 40 years of age. Specifically, it stated that the frequency for the exams women, over 40, needed could be less frequent than what was in practice and recommended at the time by every healthcare organization in the free world. 

Of course, that news met with loud protests so Secretary Kathleen Sibelius, of Health and Human Services, quickly released statements clarifying that IPAB was an “independent board” and did not speak for the Government and the IPAB suggestions would not be implemented by Medicare or Medicaid. Whew, dodged a political crisis, right?

Again, stated more clearly, IPAB could only suggest ways to reduce costs. But if the IPAB suggestion was not politically expedient or cast dispersion on the ACA then it might reveal potentially harmful  political result, caused by the ACA. Plus, President Obama’s reign in office had not ended so the Dems could not have an independent board established by the ACA actually start reducing benefits to older Americans and especially not to woman.   

The GOP does not get off scott-free here either. The GOP always states that Medicare and Medicaid costs must be lowered so the GOP was/is perfectly willing to allow an independent board make decisions that would be political suicide for any party in the majority. The GOP was also perfectly willing leave the IPAB in place with no acknowledgement what so ever. Hold it in reserve, so to speak.

But, if the GOP is serious about controlling healthcare costs then why eliminate the IPAB in the 2017 Tax Cuts and Jobs Act? Spending trends in healthcare must be controlled, some how, right? Granted healthier life styles and lower utilization is preferable but that ain’t happening. 

Remember the Military Base closures in the 1990s? There were dozens and dozens of Military bases around the country that could have been moved or closed all together as a byproduct of the Cold-war ending. But, to close a base in a politicians district did not help in the politician’s re-election process. So, Congress formed an independent board to identify and suggest to Congress bases and facilities that could be closed. Hundreds of facilities were closed or relocated to reduce cost but the politicians did not have to take direct responsibility for the closure decision. Another scapegoat to the rescue.

The IPAB and its objective is worthy and one might say absolutely necessary given America’s out of control healthcare system. But, when someone is 65+ years old the trend for their healthcare cost-line may already be determined by their life’s previous choices or DNA. So, to reduce or eliminate the service these American most certainly need seems heartless and wrong. However, we need to reduce cost so there in lies our dilemma.

If we’ve seen anything consistently out of Washington it is that it can not solve these kinds of dilemmas. They can’t have reasonable discussions or debate. They can’t introduce creative ideas because politicians refuse to take risks that could end a political career. UGH!

IPAB was a good scapegoat, a good talking point during elections and maybe a good way to make suggestions about healthcare delivery and its costs. But, it’s gone.

We have loads of examples of the hypocrisy of politicians as they dodge responsibility and accountability. Eliminating the IPAB with no fanfare or the slightest public discussion is one we all recognize. Let’s hope the ideas our Posts discussed previously can make a difference some how.

Let me know what you think.
And remember, we are all in this together.

Until next week.

Mark Reynolds, RHU
It means “Walk the Faith”

Big-news announcement from Jeff Bezos, Jamie Dimon & Warren Buffet concerning their firms aligning to solve the healthcare crisis. Can they make a difference.

February 22, 2018

Recently the heads of Amazon-Citibank-Berkshire Hathaway announced that their three firms are planning a joint venture attempt to provide appealing lower cost health care benefits for their employees. This announcement could actually affect dozens of firms, if they include all the companies they own, and provide coverage for nearly one million people. 

With that many members in a covered population the results would be actuarially credible and provide statistics upon which the partnership could rely. These are three pretty smart business people, who can afford to hire the expertise required, and I believe their objective would be to lower cost but not  do so at the expense of their member’s benefits or access to care. It dose make one ask:

  • Will they be able to build a health care program or system that improves delivery at lower cost? 
  • Will they be able to make a difference for the million lives covered?

The answer can easily be YES, but the process, in the beginning as well as for years to come, will need to remain “OCD like” focused on a few basics.

In previous Posts we’ve discussed how to lower cost (both premium and OOP) while improving benefits and access to those benefits. A single set of members covered under the same focused effort can achieve better outcomes than we’ve witnessed from the ACA over the past 7 years. It’s especially possible when there are a million member lives involved, managed by the brilliance of these three firms/CEOs.

Plan offerings, PPOs, HMOs, managed care, pre-service review, post service review and value based payments will all be included but will that be enough? We should expect major innovation and reliance on technology.
But, unless there is innovation involved in a number of “human'” areas the probable outcome is predictable. As the plans are offered and members make their selections utilization then occurs. That’s a big component.

Remember, the overall cost of healthcare is equal to unit costs times number of units consumed. Controlling unit cost is far easier than controlling the number of units consumed.
How can a plan affect utilization?
How can a plan affect the choices members make?

So let’s ask – What are the two biggest factors impacting the cost of healthcare in America? Don’t say political stupidity, selfishness, or laziness although you would not be far off. If you suggest the seemingly unrestricted increase in Rx cost or the high cost of other treatments you would be closer, but it’s simpler than that.
The two issues that impact our health care finance and delivery system are: smoking and obesity. I’m not trying to be insulting, critical or overly clever here. The fact is that more health care dollars are spent on members and by members as a result of these two factors than any other five factors combined.

So, how will the new health care partnership of Amazon-Citibank-Berkshire Hathaway address these issues? Don’t be a cynic about this because these issues can be addressed and outcomes improved with plans designed to encourage change.

Can these two factors be mitigated without appearing too mean-spirited?

  • If you’ve ever smoked two or more packs of cigarettes per day or know someone who has then you know this habit is a killer to overcome. (Pun intended)
  • How can obesity be addressed when 40%+ of the American population is classified “morbidly” obese.

I am looking forward to watching the efforts by these three corporate giants and the plans, policies, and promotional output they make.  There is real potential that, if successful, these efforts by “Private Enterprise” could be a turning point away from the Liberal’s focus on “single payer” plans as the only solution for health care finance and delivery.

You know this can be done, especially if you read our previous Posts, so let’s be attentive and supportive as these three behemoth conglomerates set forth their ideas into reality.

We’ll watch together because, well, you know why!

Until next week.

Mark Reynolds, RHU

Healthcare utilization drops but healthcare costs increase. What’s up with that? That’s right, Americans used less healthcare but costs increased?

February 15, 2018

As you can imagine (or at least hope) there are groups that closely study the results of American’s consumption of healthcare and the cost of delivering that care. The Health Care Cost Institute (HCCI) is one of those groups. The following is a short summary of HCCI’s recent study as well as facts about healthcare. It’s very interesting and supports the ideas and actions supported by your humble author in earlier Posts.

HCCI’s annual Health Care Cost and Utilization Report analyzes health care spending and utilization from 2012 to 2016 for people up to age 65 with employer-sponsored health insurance. That means HCCI analyzed actual utilization data from employer group plans.

One of the many interesting facts identified by HCCI’s analysis is, Americans consumed (used) the same amount or less health care in 2016 than they did in 2015. However, rising prices caused overall spending in 2016 to grow faster than any time in the last five years. 

Niall Brennan, president of HCCI, states;
“It is time to have a national conversation on the role of price increases in the growth of health care spending,” said Niall Brennan, MPP, president of HCCI. “Despite the progress made in recent years on value-based care, the reality is that working Americans are using less care but paying more for it every year. Rising prices, especially for prescription drugs, surgery, and emergency department visits, have been primary drivers of faster growth in recent years.” (HCCI Press release)

Here are some of HCCI’s facts & conclusions:

  • While the number of emergency room visits rose just slightly, the average price for an emergency room visit grew steadily over the five-year study for a 31.5 percent cumulative increase, driving the increase in outpatient spending.
  • The average price of surgery went up as well, pushing up spending for both inpatient and outpatient care.
  • The average price for surgical admissions increased by nearly $10,000 or 30 percent over the five-year study period, despite a -16 percent cumulative decline in utilization.
  • The price for outpatient surgery rose more than 19 percent.
  • Over the five-year study period, prescription drug spending had cumulative growth of 27 percent, despite a flat or decreasing trend in generic drug prices and despite a decline in utilization of brand prescription drugs.
    *The increased spending was driven by double-digit price increases from 2012 to 2016 for brand prescription drugs.
  • Total spending on primary care office visits fell by almost 6 percent over five years due to a decline in the number of visits.
    *This was offset by a 31 percent spending increase on office visits to specialists and a 23 percent increase in visits for preventive care, changes that could be partly attributable to changes in billing practices or in the way people seek care.

“While consumers, especially those with employer-sponsored insurance, may not feel the direct impact of these charges via out of pocket payments, they ultimately pay through increased premiums and decreased benefits,” added Mr. Brennan.

Are these conclusions realistic – Yes!

  • Since 2011, HCCI has tracked, independently analyzed, and reported health care spending, utilization, and prices each year in its Health Care Cost and Utilization Report using de-identified claims data of people up to age 65 with employer-sponsored health insurance.
  • For this report, HCCI analyzed data from roughly 4 billion claims of nearly 40 million individuals. Claims data came from four of the largest health insurance providers in the U.S. representing about 26 percent of the employer-sponsored insured population. 

Isn’t it interesting that as utilization of healthcare services goes down the overall cost of health care goes up for both employees and employers?

Makes one ask: Why is it that when the Government gets involved costs go up and its the average tax-paying premium-paying citizen who bares the brunt of that cost increase.

  • It happened with Medicare and Medicaid.
  • It happens with military costs.
  • It happens with roads, bridges and all other infra-structure costs.

Why would we be surprised that the Government mandated Affordable Care Act would increase the costs on that which it sought and still alleges it controls?

It almost makes me want to re-print a couple dozen of our previous posts that describe how to lower cost while increasing coverage and access to healthcare. But, I won’t.

We want to thank the Health Care Cost Institute for its reporting and for the effort it makes to gather the information it reports. Americans would be doomed were it not for organizations that watch over our nation to report back to us.
Lord knows we can’t depend on the Press  any more, to do that! Sorry, that’s the cynic in me!

In the weeks to come, as we look at various efforts to create alternatives to the ACA, we will include additional statistics concerning healthcare utilization and spending. The statistics and utilization figures we have captured for years could help build solutions that lower costs to employers, employees and members while increasing benefits and access.

It isn’t that hard!

Let me know if the stats above shock you or infuriate you. I look forward to seeing what comes out of the many States that are trying to overcome the ACA. We’re in this together so let’s shout out when we see something that makes sense.

Until next week.

Mark Reynolds, RHU

Some States are taking steps to “develop” lower cost health plans that will help lower costs and improve access. But, they face opposition!

February 8, 2018

In previous Post, we discussed President Trump’s Exec Order allowing health plans to be created that would lower cost with benefits people really want but not be compliant with the ACA. A few states are moving in that direction. The plan development from these states is just getting started, for sure, but already there are promises from pro-ACA advocates to sue any State or Insurer that implements such plans.

We’ve seen litigious threats and real lawsuits, in other efforts to bring common sense ideas back to life. Limiting “immigration” or “visa” permits from certain countries, increasing border security, and even lowering taxes have all come under siege and litigation by the left. The Left continually tries to thwart  President Trump’s  efforts to improve the economy, increase jobs available, improve security, and well, Make America Great Again.

So, why should we be surprised that the pro-ACA advocates would threaten lawsuits against states when the State’s leadership is trying to increase health plan alternatives, lower cost and improve access to providers.

The good news should be reported that the various state leaders out in front in these attempts to improve healthcare delivery and finance are doing so with the right ideas and ideals in mind.

These state leaders are seeking plans and ideas that:

  • Include complete transparency. Transparency where the consumer could see the actual cost of treatment. Patients and their Doctors should be able consider the effectiveness as well as the cost to benefit of any treatment.
  • Change the treatment practice of ordering multiple tests to avoid potential liability. Treatment should focus on healing the patient not avoiding lawsuits.
  • Create a free market environment that allows providers and pharma to make a profit but avoid the outrageous pricing scenarios we see today.
  • Allow small employers to “partner” with insurers. This means allow employers to purchase coverage for catastrophic events and self insure the healthcare under a certain value, for example $10,000. This can be done using currently available HRAs.
  • Allow for employers to “incentivize” their employees to make better choices. Today employers fear being sued if they encourage their folks to stop smoking or lose 20 lbs. with a health plan that gets richer as the employee gets healthier.
  • We must stop federal government interference in the local marketplace. The rules and restrictions of the ACA are driving up the costs and the one-size-fits-all policies just don’t work.
    * For employers in some states, such as California, we might need some Federal assistance in the form of ERISA.
  •  Most agree that it is important to develop ways to help insurers provide coverage to the individuals who are driving the majority of the costs.
    * Let’s face it, the statistics prove that less than 5% of any group will incur more than $5000 (or even $10,000) in medical charges each year.
    * But, in that 5% of the population, the medical charges can be huge, catastrophic as they say, and there is little the citizen-patient can do about the cost of his/her treatment. So, insurers honestly need assistance to finance these charges.

The point is that we are watching state regulators look at realistic ways to improve access and lower cost without penalizing our citizens for their healthcare usage.

Remember this fact, the enrollment in ACA individual plans at the close of this year’s open enrollment is only about 8 million enrollees. The plans we’re discussing above could be considered as alternatives by 50 to 100 million employees currently in small group plans around the country.

But, these new ideas will be criticized and litigated simply because they conflict with and/or weaken the ACA. If 50 million of our fellow citizens could get access to enroll in these lower cost plans, would that not be a good deal. We might make America’s healthcare great again. Sorry for that.

Anyway, we should be glad that there are creative people developing ideas and even real plans that will increase access to more providers, provide the benefits people really want, and lower cost in both premium and out of pocket. As we said in previous Posts, you won’t see or hear much about it in the Media so we’ll have to watch for it ourselves.

But then, we’re all in this together, so let’s keep watching together.
Let me know what you think.

Until next week.

Mark Reynolds, RHU

Alex Azar is sworn in as our new Secretary of Health & Human Services. Who is Mr. Azar and what can we expect.

February 1, 2018

Alex Azar is a Yale educated attorney who just may be uniquely qualified to lead the HHS at this time with the objectives laid out by President Trump.  Mr. Azar has practiced law in the real world as well as being the General Counsel for the HHS under President George W. Bush from 201-2005.

Mr. Azar was Deputy Security of HHS from 2005 until leaving in 2007 toward the end of the Bush administration. After serving at HHS for nearly 7 years, he was hired by Eli Lilly Co in 2007 to be a spokesman and lobbyist before ultimately being named Vice-President of US Managed Healthcare Services organization for Eli Lilly.

One unique fact about Mr. Azar is that he has never been a politician. Dating back nearly 40 years, every appointed & confirmed Secretary at HHS has been a career politician either Governor or Senator. Obviously, being a career politician does not really prepare one to make the decisions and take the actions that are needed to give our citizens the best services from an organization called Health & Human Services. Let’s face it; for most politicians the primary goal always seems to be serving for themselves.

There in lies a unique factor that may prove positive since Mr. Azar has not been be-holding to anyone for an election, a trait he has in common with President Trump. In addition, Mr. Azar was employed at Eli Lilly, a big pharmacy and healthcare company for roughly 10 years. That is important to note because we all know pharmacy costs continue to increase dramatically and nobody seems to be able or willing to control them.

It is also critical to acknowledge that the delivery of pharmacy benefits is a complicated function. In the Rx delivery business you have AWP (Average Wholesale Price), MAC (Maximum Allowable Cost, public plans such as Medicare or Medicaid, private plans such as your Anthem or Aetna plan, dispensing fees, and don’t forget rebates all of which make delivering your Rx very complicated.

Plus, the retail cost of an Rx in the US is much-much higher than in other countries including our neighbors in Canada and Mexico. In fact, people in Canada and Mexico can often purchase their personal prescriptions for 10% of what we pay in the US.  That’s right, what you might pay $100 for in Oregon or Maine is available for $10 in Mexico.
Now, who can understand or make sense of that?

The Rx delivery business is more complicated and potentially more abused than any other aspect of healthcare in the US. With healthcare cost increasing double-digit and premiums increasing sometimes by triple-digit it may serve the public well to have the Head of HHS understand the Rx business as well as how the HHS works.

President Trump publicly tasked Mr. Azar ( directed him actually) to reduce Rx cost dramatically. President Trump also publicly instructed Mr. Azar to continue with the objective of replacing the ACA with a better healthcare financing and delivery system.

How’s that for directions from your boss on your first day on the job?

So, Mr. Azar:

  • Is not a politician.
  • Beholding to no one – except the President.
  • Understands big Pharma and its:
    • R & D processes
    • Patent protection and effect on Generic vs. Brand
    • Profit margins
  • Delivery of Rx through private and public plans.
  • Law & business experience
  • Works for a President that:
    • Wants to lower cost
    • Improve access
    • Make a difference in people’s lives
    • Doesn’t give a darn about the way it has always been done!

In 2010 through 2014 we heard from and about the Secretary of HHS constantly because she was continually making announcements about the rules or regulations being developed for the ACA. On and on it went with restrictive-obtrusive-costly and damaging rules to make the ACA be what the Liberals wanted.

I suspect that we won’t hear that much from or about Mr. Azar except when the Liberal cry out about the piece by piece incremental changes to ACA. If Mr. Azar can reduce Rx costs, which is a huge “if” due to the power in Pharma, then we will all benefit.
But, we should not be overly optimistic about seeing Rx cost drop too quickly.

Can you imagine how hard it would be to make Northrop Grumman, McDonald Douglas or Lockheed Martin  reduce their costs 40% to 50% for the guns, airplanes and missiles our military requires to keep us safe. Believe it or not, that is a reasonable example of the battle Mr. Azar will have as he tries to lower Rx costs in America.
And, I am not exaggerating.

I am optimistic, though, about Mr. Azar’s chances of making a difference. He is experienced with the HHS, understands how Big Pharma works, plus he has a Boss (The President) who is demanding lower cost, better access, and better efficiency. These factors could make it possible to see the changes America needs and deserves.

There is much more we could discuss about Mr. Azar such as his positions on AHPs, selling across state lines, insurer subsidies and so forth. But given that he was just sworn in 20 minutes ago, I think it would be wise to simply watch to see where he starts and what he can do.

The Department of Health & Human Services affects us all, more than most realize, so we are definitely all in this together.
But what do you think?

Until next week.

Mark Reynolds, RHU


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