Showing posts with label aca. Show all posts
Showing posts with label aca. Show all posts

Saturday, 18 November 2017

The Tax Bill - Literally

The House of Representatives’ recently passed tax reform plan takes us another step closer to sending the middle class over the cliff’s edge and into the abyss. 

It is the double whammy,  increased taxes plus increased health insurance costs,  Though touted as the largest tax cut in history, the reality is that middle-class Americans will see almost no benefit from the bill.
First, by reducing the number of brackets, many will see their personal tax rates increase.  

In terms of healthcare, we are looking at 25% increases in healthcare costs for 2018.  In 2019, we can expect even greater increases.   Repealing the individual mandate means that people will not be punished for not obtaining health insurance.   If you run the numbers, for a family of 4, you will find that unless you are spending more than $30,000 per year on healthcare for your family, you are probably better off without it.  When calculating whether or not you can afford it, in addition to the direct costs of insurance and out of pocket expenses, you must also consider the cost of caretaking. If an adult is sick, you must consider the loss of income and the time off work to take care of him or her.  If a child is sick, you must also consider the full-time cost of care at home, the cost of transportation for not just your child but for you as well.  If managing these costs won’t bankrupt you and reduce your income to the poverty level, then you should consider getting insurance.  Once you reach the poverty level, you are eligible for Medicaid and healthcare for you and your family is free.

If you decide you can afford it, whether or not you choose to buy insurance becomes a decision about hedging risk.  Health insurance is supposed to be a protection against downside risk.  Simply put,  if you have health insurance, it should protect you from losing everything if someone in your family suffers a catastrophic illness.  Catastrophic means an illness that is either prolonged or very expensive to treat. 
As the middle-class moves closer and closer to the poverty line, this means more and more people will not buy insurance but choose to pay as they go; waiting until, when things get bad enough, they cross the poverty line and get free coverage.   It is estimated that 13MM Americans will forego health insurance in the next year.

It’s a vicious cycle, but with fewer people purchasing insurance, and even less young and healthy people in the mix, premiums in future, deductibles in future and, co-pays will rise.   For those who work for corporations who pay these costs, they will be asked to absorb more of the business’ health insurance costs.

If the Republicans really wanted to repeal Obamacare they could use the courts to do it.  The only argument the Supreme Court bought for the constitutionality of the ACA was that the  ACA, by virtue of the individual mandate, was a tax; a  tax on people who did not obtain healthcare. By repealing the individual mandate, Congress would be repealing the basis the court used the find the Affordable Care Act constitutional.  No mandate, no tax.  Once repealed, the Republicans can ask the Supreme Court to determine whether or not the ACA is constitutional.  If they get the likely answer, NO!, whatever remained of the legislation would be repealed.

But it's not just healthcare that the bill impacts, middle-class people should expect to pay more in taxes.

For the rich, the estate tax will be eliminated after six years.  In the meantime, the exemption for inherited wealth, the amount that is exempt from the taxation, has been raised to $11 million from $5.5 million.  Preferential treatment for investment income remains the same.   People who live primarily on investments, not pensions or other income, or who live on inherited wealth will benefit.  Otherwise, you are out of luck. 

To help pay for the tax cuts, the plan would eliminate most personal deductions, with the exception of deductions for mortgage interest, charitable contributions and state and local property taxes. The mortgage interest deduction would be capped for newly purchased homes up to $500,000, and the property tax deduction would be capped at $10,000.  According to Bankrate, median existing single-family home values are moving higher, averaging approximately $270,000 across the United States.  This means that people who already live in higher cost of living states would lose those deductions.  For example, if you live in the Bay Area, including Oakland, you are out of luck.   No deductions for you. 

The biggest deduction that would be eliminated is the one for state and local taxes. That deduction primarily helps people in blue states where taxes are higher.  That coupled with the elimination of the Alternative Minimum Tax, which affects working people who earn $75,000 or more, means that their taxes would go up. 

Small business entrepreneurs will be hit especially hard.  Not only will they lose their personal deductions, but the pass-through sole proprietorships, LLC’s, S-Corps, and/or partnerships they set up to protect them will now be subject to taxation.    There will be an additional 25% entity tax rate imposed.  Most pass-throughs that are owned by individual currently pay less than 25% of their income in taxes. 

The bottom line is if you are a working person, own a small business or are self-employed, your healthcare costs and your taxes are likely to go up.





Minda Wilson


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Friday, 13 October 2017

Unaffordable Healthcare

Trump’s latest Executive Order is another swipe at Obamacare, but it does not repeal or replace it.
In general, the executive order has no force of law itself. What it does do is influence how regulations are put together. It is those regulations that represent how a law is implemented and how it is enforced.  Trump’s executive order asks three federal agencies to consider possible new regulations that could help achieve certain goals, like providing more policy options for the young, allowing small business associations to provide health insurance plans that cross state lines and expanding access to short-term insurance policies, those that offer coverage for 90 days or less. It is not clear what those rules will say.

Previously Trump issued an executive order that let a broader range of employers stop offering free contraception through their healthcare plans.  It said that regulations should interpret the Supreme Court Hobby Lobby decision to enable employers who have a sincerely held moral and/or religious convictions to opt out of the free contraceptive benefit currently in their policies.  Loosely interpreted, an employer could be morally opposed to paying more for healthcare. 


Anytime a benefit is excluded from a policy, the plan costs less. If you find paying more for health insurance morally offensive, you can now opt out of providing free contraception. It is that simple.

The other thing Trump can do is use Executive Orders to curtail the activities of the executive branch of government.  This allowed Trump to use executive orders to shut down the Affordable Care Act website for 12 hours every Sunday during open enrollment, cut the budget by 40% that funds groups that help people enroll, and cut the advertising budget for the ACA from $100 million to $10 million.  Such actions make it less likely people will enroll.     In addition, his decision to limit enforcement of the ACA has wide consequences.  Knowing that the individual mandate is unlikely to be enforced and the companies will unlikely be penalized for not offering insurance makes it less likely those people will purchase expensive exchange policies.


Trump is seeking to end subsidies paid directly to health insurance companies that help low-income people.  He wants that money paid directly to the states instead.   Trump is also seeking to eliminate the exclusivity requirement that all plans be conforming to the ACA and offer the essential health benefits, such as well-care like physicals and/or preventative care like mammographies, as defined in the Affordable Care Act.

The real impact of these executive orders will be felt by the self-employed, the working poor, and the middle class.  What this means is that those who are not covered by group benefit plans, plans provided by their employer, are going to be unable to purchase health insurance.  Not because it won’t be available, that is a false premise.  They won’t be able to buy it because what will be available will be unaffordable.  This year, in California, a policy covering two adults in their 50’s and their grown child will likely cost more than $20,000, with a $10,000 deductible and copays of $70 for specialist visits.   Because of the exodus of young people into lower costs products that will likely result from the implementation of the executive order, the increase in the cost of this same policy could be up to 40% or more.  What family can afford $42,000 in payments before the insurance company contributes their first dollar?

It should be noted that the states, not the federal government, set policy prices.  Policy prices for 2018 have been set.  At this point, states are not authorizing new policy types or increases in costs to offset the uncertainty.   What happens in 2019, at this point, is unknown.  In California, is an insurance company pulls out of the state, they have to wait 3 years to come back in.  Insurance commissioners can stop the exodus of insurance companies by either making them be all in or all out.  We will have to wait and see if more carriers pull out and if state insurance commissioners hold the line on cost.

Remember, State Insurance Commissioners are politicians and subject to influence.  If you are angry, this is the place where your voice can be heard.  



Minda Wilson


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Friday, 31 March 2017

The Problem Isn’t Obamacare…It’s The Insurance Companies

Primary Care Doctor Explains:

“The Problem Isn’t Obamacare…It’s The Insurance Companies”

With premiums increasing for those with coverage through the ACA marketplace, a lot of people are criticizing Obamacare. But many doctors and healthcare professionals are saying that isn’t really the problem.

Cathleen London is a primary care physician in Milbridge, a rural town in Maine. She claims the problem isn’t Obamacare itself, but rather, the entire health insurance system and insurance companies are to blame.



Writing for the Portland Press Herald, London explains she is a a primary care physician who is on the front lines every single day, as  her town is very remote, which means it takes 30 to 40 minutes to get to the emergency room, which is why her office operates as an urgent care facility as well as a family medical practice.

It’s takes an ambulance about 20 minutes to get to her clinic and specialist care about 2 hours away, so Dr. London is trained to handle about 90 percent of medical problems.


DR. LONDON EXPLAINS THE FOLLOWING, WHICH WILL SHOW YOU EXACTLY WHAT’S WRING WITH HEALTH CARE:
One evening I was almost home after a full day’s work. Around 7:30, I got a call on the emergency line regarding an 82-year-old man who had fallen and split his head open. His wife wanted to know if I could see him, even though he was not a patient of mine.

 Instead of sending them to the ER, I went back to the office. I spent 90 minutes evaluating him, suturing his wound and making sure that nothing more sinister had occurred than a loss of footing by a man who has mild dementia. When I was sure that the man would be safe, I let them go.

 I billed a total of $789 for the visit, repair, after-hours and emergency care costs. Stating that the after-hours and emergency services had been billed incorrectly, Martin’s Point Health Care threw out the claims and reimbursed me $105, which does not even cover the suture and other materials I used.

 I called them about their decision, said that it was not right and let them know they’d lose me if they reimbursed this as a routine patient visit. They replied, “Go ahead and send your termination letter” – which I did.

 The same day, Anthem Blue Cross kept me on the phone for 45 minutes regarding a breast MRI recommended by radiologists on a woman whose mother and sister had died of breast cancer. She’d had five months of breast discharge that wasn’t traceable to anything benign (and it turns out the MRI is highly suspicious for cancer).

 Anthem did not want to approve the MRI unless it was to localize a lesion for biopsy, even though the mammogram had been inconclusive! This should have been a slam-dunk fast track to approval; instead, dealing with Anthem wasted a good part of my day.

 Then Aetna told me there is no way to negotiate fees in Maine. I was somewhat flabbergasted. I do more here than I did in either Brookline, Massachusetts, or New York. The rates should be higher given the level of care I am providing. I have chosen not to participate with them. This only hurts patients; however, I cannot keep losing money on visits.

 I do lose money on MaineCare – their reimbursement is below what it costs me to see a patient. For now, that is a decision that I am living with.

 I had thought those losses would be offset by private insurance companies, but their cost shifting to patients is obscene. I pay half of my employees’ health insurance, though I’m not required to by law – I just think it is the right thing to do.

My personal policy costs close to $900 a month for me and my sons (all healthy), and each of us has a $6,000 deductible. This means I am paying rack rate for a policy that provides only bare-bones coverage.

Something is wrong with the system. In one day, I encountered everything wrong with insurance. I am not trying to scam the system. I am literally trying to survive. I am trying to give care in an underserved area.

This is not the fault of Obamacare, which stopped the most egregious problems with insurance companies.

Remember lifetime caps? 

Remember denials for pre-existing conditions? 

Remember the retroactive cancellation of insurance policies? 

Returning to that is not an option.

Indeed it is not an option, Dr. London.  If Republicans get their way eventually by repealing Obamacare, it may be where we end up again. If Republicans really get their way, it’ll be even worse than it was before.

Minda Wilson

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Sunday, 15 January 2017

Why is Repeal of the ACA So Scary?

Why is Repeal of the ACA So Scary?
By Minda Wilson,
 Author of Urgent Care
 


Repeal simply means that the requirements of the ACA that were enacted would cease to exist.  It would be as if the law was never passed. 
 
Here is what won’t happen if the ACA is repealed!


 
You won’t lose your coverage if you pay your bill.   Insurance is a contractual obligation of the insurance company to provide coverage if you pay the agreed upon rate.  If you or your company have entered into a contract for coverage for the year 2017 and the premiums are paid, the insurance company must honor those contracts. Not until it is time to renew, 2018, will your coverage may be terminated or changed.
 
Penalties.  No penalty will be assessed for businesses who did not offer coverage to their employees but were required to under the ACA.  It also means that individuals who did not obtain insurance would not be subject to penalties.
 
What does ACA repeal mean; what are the consequences, for 2017? 
 
It means that restaurants who posted the calories of their double cheese burgers or burritos or of their iced mocha-chinos would no longer be required to provide that information.  It means that, in future, the Cadillac tax on high cost, high benefit insurance plans would be eliminated.   It means that the affordability requirement in the ACA will also be eliminated.  This means that the requirement that plans be standardized will be eliminated.  In future rich plans, including low deductible plans, may again be offered; catastrophic coverage may be made available; and businesses will have the right to pick and choose coverage made available to their employees .   We will have to say goodbye to the Medical Device Tax and taxes on vaccinations, which should lower the cost of both. 
 
Most importantly, what repeal really means is that a lot of the mess surrounding the implementation ACA would go away. 
 
There would be no more money spent on exchanges and no more exchanges.  Billions of dollars wasted each year will end. The administrative nightmare for businesses will go away. 
 
The requirement that every policy provide “Essential Health Benefits” would be eliminated.  Men would no longer be required to purchase coverage for pregnancy and women would no longer have to pay to have their non-existent prostates covered for cancer.  There would be a return of the opportunity to purchase less expensive, catastrophic coverage as well as the ability to purchase limited coverage for only things you might need. 
 
For 2017, insurance companies have agreed to offer for the entire year all policies they currently make available within the 50 states.  In each state an insurance company offers any policy the state’s insurance commission has approved that offering. Once approved and made available, insurance companies cannot change their offerings in a given state.  If the state approved the policy you bought providing coverage for your 25 year old son, the insurance company can’t cancel that policy if the ACA is repealed. If the insurance company agreed to provide coverage to any and all individuals despite their pre-existing conditions, they must honor their agreement.  If the insurance company agreed to eliminate lifetime caps and/or annual caps, for policies issued in 2017, they cannot take that back.  If the ACA is repealed, these benefits could be eliminated in 2018; but for now you are safe.
 
Federal subsidies that used to be paid to emergency rooms when they saw uninsured patients will be reinstated.
 
The Downside
 
Unless the states step up to the plate, the working poor who due to the eligibility expansion received Medicaid would no longer be eligible to receive it.  
 
If your insurance is subsidized and the federal government refuses to pay the subsidy this year, you could lose your insurance.  Technically, you are not responsible to step in if the Federal government doesn’t pay or doesn’t pay on time; the insurance companies are supposed to go after the government. It’s a contract and, if all was right with the world, the insurance companies would not punish you for the government’s failure to pay. If the insurance companies cut you off, I envision new highs in awards to those damaged by being denied insurance, when they continued to pay their agreed upon payment.  I don’t think juries would be very sympathetic to insurance companies who acted to deny care to people who paid their contracted obligation under their insurance contracts.
 
For those suffering from drug or alcohol addiction, coverage will no longer be mandated.  You could purchase coverage separately; but it is expensive.   It is unlikely those who are covered for these problems will continue to receive employer paid coverage.
 
The really bad news for the government is that all the taxes that were enacted as part of the ACA will be repealed.  This is the biggest issue.  Assuming the government is contractually obligated for paying the subsidies, there will be no revenues generated to offset these expenses.  This could mean a deficit from healthcare subsidies that could exceed a trillion dollars.
 
The Unknown
 
Repeal means the “Donut Hole” of Medicare Reimbursement is no longer required to be closed.  Therefore, drug reimbursement between $2800 and $6400 is no longer required to be paid by Medicare.  It is unclear whether or not the gap will remain closed. 
 
 
Long Term Implications
 
The real impact will be felt in 2018.    Premium discrimination will return.  Rejection for preexisting conditions could also return.  Cost will no longer be required to be based only on age, tobacco use and location.  Your health history may influence the cost of your plan. There will be no more subsidies.   The ability to cover your children up to 26 as well as the restriction on annual lifetime caps on benefits will go away.  The elimination of the “Essential Health Benefits” means that physicals, vaccinations, mammograms, etc. are no longer required to be offered for free.  The Donut Hole will definitely be re-opened.  Insurance companies will be able to rescind policies and we will have limited right to appeal.
 
The Solution
 
"The truth is that any state can step up to the plate. They can require any insurance company that does business in their state to offer individual plans at a rate comparable to what business pay.  They can enact requirements eliminating lifetime caps on benefits, premium discrimination, or any other of the provisions that their citizens would want continued."
 
We will just have to wait and see.

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