Wednesday, March 30, 2011

Gotta Light?

Fast forward to 2014.  We are now purchasing health insurance through exchanges.  Individual and small business will be able to go to a virtual site, with the help of a navigator (possibly a broker or producer) and purchase medical coverage.  Depending upon your household income, you may also be eligible for a subsidy to help pay for that coverage.  The coverage you will be applying for is guaranteed issue, no-questions-asked coverage.  As it stands now, there are only a couple things that could impact the amount that you pay for your plan:

1) Family Composition (Individual, Parent/Child, Husband/Wife, Family)
2) Where you live or Rating Area
3) Age
4) And the only question that has to do with you use tobacco?

If you use tobacco you can be charged up to a 50% higher premium than non-tobacco users.  I understand that tobacco users are at a much higher risk of having health issues and probably should pay more, but what about all the other behaviors that cause illness?  Why is there no rate increase for them?   How about people who are diabetic because of their poor diets?  How about people who use crack or heroin?   While the diabetic gets insulin and diet counseling and the drug addict gets substance abuse treatment and medications to curb the desire, the tobacco user gets a 50% rate increase instead of acupuncture, hypnosis and/or a prescription for Chantix.  In all fairness though, smoking cessation counseling is now included under preventive in all health policies.

You may be thinking to yourself that this is no different than the life insurance industry where typically a tobacco user pays at least 50% more on their coverage.  The main difference is that life insurance isn't guaranteed issue.  If you are a diabetic or drug user, you will probably be turned down entirely.  Since your health plan through the exchange will be guaranteed issue, you can't be turned down.

This is definitely a head-scratcher for me.

Tuesday, March 15, 2011

"To Be Or Not To Be?" 1099 Requirement under Health Reform (PPACA)

Killing the requirement that all business and property owners provide to anyone they paid more than $600 in goods and services a 1099, has made it quickly through the House 314 -112.   HR 4, was supported by every Republican and 76 Democrats.  The loss of income to the Fed is approximately 25 billion dollars.  Republicans wanted to pay for this by modifying repayments of health care tax credit overpayments to those beneficiaries of subsidized coverage who no longer qulaify for the benefit.  The bill has moved to the Senate where it is likely to be passed but has stalled a bit becuase they do not like the way the house Republicans wanted to pay for it.  Senate Majority leader Reid, D-Nev, announced he has postponed plans to bring the bill to the Senate floor because Democrats were unable to reach an agreement on the bill over concerns about the offsets used to pay for the bill. 

Both the House and Senate want this part of the law killed.  It is a huge burden on business.  Another piece of PPACA to be removed.  Wonder whats next?

Wednesday, March 2, 2011

Boring But Important-States Can Opt-Out of Health Care Plan (Mandates) 3 Years Earlier

"If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act (PPACA) does, without increasing the deficit, you can implement that plan, and we'll work with you to do it."  This is was President Obama said while speaking at the National Governors Association 2011 Meeting in Washington, D.C.  on February 28th.  What this means is that states would be able to withdraw from some of the law's regulatory mandates in 2014 instead of 2017 through a "state innovation waiver".

In bipartisan support of "Empowering States to Innovate Act" it allows states to establish independent insurance regulatory models instead of Health Exchanges.  In addition it also allows those states to have no individual mandate and no penalties for those companies with more than 50 employees that do not meet PPACA requirements.  This could be of great interest to those states who filed a lawsuit against the PPACA's individual mandate, in Florida.

Even though there would be more flexibility for the states, they still would be required to offer policies that are as comprehensive and affordable as those offered through the exchange, cover as many residents as would have through PPACA and not increase the deficit.  In addition, certain mandates would need to stay, including: No lifetime limits, Dependents can stay on parents plan until age 26, Patients can choose any network physician and Carriers must spend at least 80% on Health Care and no more that 20% on administrative costs.

The questions I have would be how would the fed be able to police these plans?  In other words how would they ever be able to prove how many residents would have been covered under PPACA versus the states own version?  Also, states will have the opportunity to do more.  In other words they could go the other way and set-up a government run single-payer plan.