Showing posts with label medicaid. Show all posts
Showing posts with label medicaid. Show all posts

Wednesday, 20 September 2017

Republicans vs. Democrats – Someone should spank them both

In the recent weeks,
Republicans and Democrats have again put their hat into the ring that is healthcare reform. Republicans still want to honor their promise to repeal and replace.  Democrats want to protect their legacy.  Since neither plan considers affordability, either way, the people will suffer.

Republicans have revised their plan in hope that they can get something passed before the end of the month.  If this happens, they will avoid having to start all over and create a new bill.  Their plan replaces tax subsidies; instead of the government paying money directly to insurance companies they will make payments to the states in the form of block grants. People would be able to increase their contribution levels to Health Savings Accounts and other pre-tax benefits. The states would use the money to subsidize their own health plans.  The penalties for uninsured individuals who are uninsured as well as corporations who do not offer insurance would be eliminated.  Limits would be placed on Medicaid spending.  And, hard to believe, the repeal of the medical device tax, which has been on the agenda since day one, is also on the table.

With no federal programs in place, the states will have to create their own.  Since health insurance is still controlled at the state level, this would not make significant changes in the markets.  The financial and other safeguards that were put in place, i.e. no preexisting conditions, no higher premiums for older adults, would be determined at the state levels.  With subsidies gone, and if the federal government continues to limit payments to the states for Medicaid and other programs, it is likely the level of care available will be affected. Each state would decide who would be protected and how.  Just like it was before Obamacare.

All these changes do nothing to control the cost of insurance.  Insurance companies can still charge whatever they want. It is still up to each state’s Department of Insurance to set prices; and, so far, these institutions have done nothing to control runaway insurance premium costs.  The Democratic answer seems to be Bernie Sanders’ latest proposal “Medicare for All!”.  The first problem is that the government actually pays for very limited coverage, Parts A and Part B only.  The rest is covered only if seniors purchase supplemental insurance.

Senator Sanders’ own state adopted such a single-payer plan.  It lasted less than a year.  When Vermonters found out that to keep the program going without filing bankruptcy they would have to raise their state income tax payments from 14% of income to 24% of income, they chose to abandon the program.

Paying out an additional ten percent of one’s income proved too much a disincentive for Vermont’s citizens. That is in a state with relatively few illegals, a relatively healthy population, and low healthcare costs.  You can imagine the financial impact such a plan would have on a national scale.  A 10 percent increase would be nothing when you start adding in the cost of illegals, the underinsured, etc.

The solution to all of this is rather simple.  If health insurance is treated like a utility, we can regulate the money that comes in and make sure that money is used to pay for medical expenses instead of health insurance oversight, review and administration.  Maybe if the legislation focused on that, we might get somewhere.



Minda Wilson


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Wednesday, 26 July 2017

Republicans quickly reject their own revised bill


Yesterday, Senators voted for debate, not passage.  Once they agreed to debate the first thing the Republicans did was quickly reject their own revised bill,  the Better Care Reconciliation Act, once their leading proposal for repealing and replacing Obamacare.

The Senate rejected the bill, 43 to 57, despite having added a provision from  Sen. Ted Cruz (R-Texas) favored by conservatives and another from Sen. Rob Portman (R-Ohio) to court centrists worried about Medicaid cuts.

The Cruz provision allowed insurers to offer several plan types including cheaper plans that cover smaller ranges of benefits as long as that state offers one plan that has the broad coverage required by Obamacare. 


The Portman provision, the Medicaid wraparound, provides $200 billion dollars of support to states whose Senators were concerned about cuts to their Medicaid programs.  The incentive of $200 billion for their states was not enough. Of the 57 votes against, 9 were Republicans.




Minda Wilson
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Thursday, 20 July 2017

Longer wait times to see a doctor, dramatic increases in the cost of insurance

"The Party’s Over"

With the death of the current incarnation of the Republican plan, we have to take a minute to consider what will continue to happen if nothing is done to repeal and replace or revise Obamacare.

The good news is that the expansion of Medicaid will continue and the federal government will continue to subsidize the states that cover those eligible for the expansion who apply.



This has had significant benefits by making working poor eligible for healthcare benefits.  In states like West Virginia, workers that are now covered have seen their wages increase, their children’s attendance at school increase and their use of the emergency rooms for medical treatments has significantly declined.  



That is where the good news ends.

In a large number of countries and in some states, there will be no carriers writing policies for coverage in the individual market.  That means that people who live in those counties/states will not be able to purchase health insurance of any type; and, the, in addition, they will be penalized for not buying insurance that is absolutely unavailable to them in any form.

For those that can purchase health insurance, including businesses, rates are expected to increase at least 20% for coverage next year.   Many companies are struggling to pay current premiums.  In certain states, including Texas, Connecticut, Maryland and Virginia, carriers have asked for premium increases in excess of than 50%.  A business that is struggling will be forced to drop their healthcare coverage.   If your business bought coverage and can no longer afford it, your employees may or may not be able to get coverage of their own, depending on where you live.

Co-pays will no longer be considered part of your co-insurance payments and, as such, may not count toward your deductible.  With individual deductibles on the increase from $2500 to as much as $5000, you might be surprised to learn that your co-payment will no longer count against your deductible.  This means that only co-insurance payments will apply.  Co-pays range from $45 to $115 per visit, depending upon the doctor.  Most plans now require a co-payment for all doctor visits and, in addition, you will be responsible for a co-insurance payment.  If you are on a 70-30 plan,  in addition to your co-payment you will be responsible for paying 30% of the amount billed to your insurance company.  This means that after you pay your co-pay, and the doctor bills the insurance company for the visit if the bill is $100 you will owe another $30 on top of your co-pay.  You now have to pay $75 for your visit, but only $30 counts towards your deductible.

The exchanges will continue to be funded by the government.  The exchanges duplicate 100% of the functionality provided by insurance company web sites. Since the taxpayers already paid for the cost of developing these insurance company sites, every year we support the exchanges we are paying again for something we already paid for.

The 5 million, plus, illegals that currently get healthcare paid for by the government will continue to receive this healthcare.  A number of subsidies paid will continue to be above and beyond what is really called for.  The Obama administration did not implement the electronic verification of citizenship nor did they implement the electronic verification of income.  Income and citizenship are input on the honors system.  We simply take your word.   Because all verifications are essentially done manually, if you claimed you were a citizen and you aren’t or you claimed an income below what you actually earned, you get the benefits you asked for.  Too bad for the tax payer!

Networks are going to get narrower.  It will get harder and harder to see a doctor.  Almost one-quarter of doctors are over 64, retirement or frustration will end their medical careers.  Since 2013, the year Obamacare went into effect, in addition to the loss of doctors due to changing careers or retiring, approximately 10% of doctors each year opt out and accept only cash.  This is especially true in the large cities and applies more specifically to professionals with excellent reputations who are tops in their fields.   These guys are so good, they can command any price, and people are willing to pay it. Why should they accept insurance when the reimbursement rates offered don’t cover the cost of doing business.

New doctors are not going into private practice; they are becoming part of large hospital systems and thus only take on patients that their hospital system will treat.  If your provider doesn’t have a contract with a big research facility and you have something that requires the sophisticated treatment such facilities can offer, you are out of luck unless you can pay for it.

The bottom line is this, the trends that started with the Affordable Care Act, less access to care, longer wait times to see a doctor, dramatic increases in the cost of insurance and even more dramatic increases in the out of pocket cost of care, will continue unless something is done.














Minda Wilson



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Friday, 23 June 2017

The Senate Draft Plan is out and it is hard to believe

Affordability is Not Part of New Senate Plan
 
The Senate Draft Plan is out and it is hard to believe that it, again, failed to create some kind of solution to the ongoing issue, affordability of healthcare.   Key components include greater latitudes for states to opt out, the rollback of taxes, phase down of Medicaid expenses, and having subsidies based on income vs. age, but reducing these subsidies over time.

Phasing down of Medicaid means one thing, reduction in benefits.  It means a narrower network with fewer doctors and longer waiting lists and less access.


 
Rolling back of taxes means less money.  Less money means a bigger deficit.  As long as the government continues to subsidize healthcare the deficit will continue to grow.  One way they could save significant money would be to dismantle the exchanges, but it is not clear that that is the intention.

Subsidies based on income and not age makes tremendous sense.

Why would a person like Mark Cuban, 
who is under 65, need a subsidy?  

The people who need the money and need the care is where we should put in our safety net. 

It is surprising to consider, though, that in certain circumstances, the self-employed and/or those who must purchase individual policies may be better off without insurance.  The cost of a family policy is about $20,000+ dollars for 2018.  For those not eligible for subsidies, for example, someone making about $100,000, this is a significant expense.  In addition, the deductible for such a policy is about $2,500 per person; or about $10,000 for a family of 4.  Given this, you are looking at out of pocket expenses of about $30,000 after tax. Which means that, after paying taxes, of every dollar that is left, 35 cents will be going out for healthcare before the family has eaten, paid rent, bought clothes, paid for transportation, etc.  This is not workable.  It is unlikely that such a family will spend $30,000 on health care in any one year.  If they could save that money, or a significant portion of it to cover future catastrophic events, the family would be significantly better off.

As people on subsidies see their subsidized portion decrease, they will be in the same boat as the high earners who self-insure; except they will be earning less.

In reality, the fact that insurance costs $20,000 per family is where the problem is.  And, the fact that of that $20,000 so little, across the board, is actually spent on care, makes it more of a problem.  According to a study by the CDC, of all 18 to 64-year-olds, after subtracting the deductible from healthcare costs paid, insurance companies pay out less than 10% of the money they take in to cover the cost of care.

The solution is limiting administrative costs.  Cutting senior level compensation in the three largest insurance companies would allow significant reductions in policy costs.  So, if you look at it that way, if administrative costs were cut in half; a $9,000 savings could be achieved for next year and your policy, instead of costing $20,000, would cost $11,000.

Its our money the politicians are using to pay for these policies.  

Why couldn’t the politicians figure this out?










Minda Wilson
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