The ObamaTax Dodge

As employers quickly realize that the ObamaTax will not, in fact, be lowering premiums by 3000%, they (and their agents) have begun looking for ways to minimize the impact.

Contrary to popular belief, new ObamaTax plans don't actually have to be all that benefits-rich. In fact, the Feds themselves agree that a plan which covers basically just the Minimum Essential Benefits "would appear to qualify as acceptable minimum coverage under the law, and let most employers avoid an across-the-workforce $2,000-per-worker penalty for firms that offer nothing."

That is, an employer could drop his existing full-coverage (or Catastrophic, for that matter) plan in favor of one of these "bare bones" configurations (Bob, you were way ahead of your time!). Coupled with a supplemental plan to cover some days in the hospital and the like, and the landscape suddenly changes.

This may prove especially attractive for employers with low-wage employees, who want to avoid the ObamaTax employer mandate penalty but can't afford to offer full-blown coverage. And if the premiums are low enough, perhaps those subsidies will cover the lion's share of their premiums.

Interesting concept.

JeffLinks Tuesday

FoIB Jeff M sends along two very helpful ObamaTax items.

First, courtesy of the Kaiser Foundation, a helpful (and free!) ObamaSubsidy calculator. This will no doubt help take some of the edge off those massive premiums hikes looming on the horizon.

But probably not.

Second, if you're a business owner, heads' up. Ms Shecantbeserious has released  a handy little FAQ sheet with timely (right) info on the SHOP (Small Business Health Options Program).

'Course, that presupposes that these things will ever actually get off the ground.

You can download the FAQ here.

Stupid Carrier Trick - Logging edition

Recently, I sold and delivered a policy to a client who, when applying, chose the monthly draft ("check-o-matic") premium payment option. This is a convenient way to budget premiums and, at least with this company, the second least expensive way to do so (typically, carriers impose a surcharge depending on how often premiums are paid - monthly, quarterly, etc). When the policy was approved and we had set an appointment for delivery, he indicated that he'd decided to change to annual pay.

Not a major issue - I notified our general agent (GA) for that carrier, and an amendment form was included with the policy. So far, no big deal. When I delivered the policy, I had the client sign that form (along with approximately 273 others) and sent it back in the handy, pre-paid envelope.

So far, so good.

You can imagine my surprise, then, to receive an email from the GA that "the new, re-issued policy" was on the way.

What new, re-issued policy?

Turns out, this carrier - even though we had signed and returned the amendment form - has decided that it needs to re-issue the entire policy, and over the weekend I received another half pound of paper (really!). Sent to me for a mere $2.50 of USPS postage.

I am far from a "tree-hugger," but even I find this offensive. Nothing substantive changed in the policy - why wouldn't the carrier simply print up and send out a little "certificate" noting the change?

Sheesh!

Rate Kaboom!

We've been warning about this for quite some time: if you think health insurance rates are bad now, just wait until the ObamaTax is in full swing.

But what do we know, anyway? Remember our Dear Leader promised rates would plummet by 3000%.

Turns out, not so much:

"Internal cost estimates from 17 of the nation's largest insurance companies indicate that health insurance premiums will grow an average of 100 percent under Obamacare, and that some will soar more than 400 percent"

Math sure is hard.

[Hat Tip: FoIB Jeff M]

HSA's still on life support

At the risk of mangling metaphors, the water's still murky and the jury's still out on the fate of Health Savings Accounts [ed: "mangled?!" How 'bout strangled?]. I've contended for a while (most recently here) that, due to the "cost-sharing reduction" requirements which essentially outlaw true High Deductible Health Plans, HSA's are DOA.

In fairness, Bob disagrees (agreeably, of course); he's "becoming more convinced there is a viable market for major med (and ancillary lines) outside the exchange. Yes, the products will still need to provide EHB's and adhere to MLR ... but they will also have more flexibility."

But we're both speaking in generalities here; that is, about the marketplace as a whole. LifeHealthPro's Allison Bell has an interesting article today on a specific segment of the market: those who may be eligible for tax subsidies:

"Low-income people will still be able to use health savings accounts (HSAs) after Jan. 1, 2014 ... For low-income people who want to use HSAs, the problem is that getting help with paying deductibles could make it impossible for a "qualified health plan" ... An individual who would not be eligible for the tax advantages of an HSA because the plan variation to which he or she would be assigned does not qualify as a [high-deductible health plan] may purchase the plan without cost-sharing reductions," officials said"

Well how nice for them. But what about those of us in the middle class, who aren't going to be eligible for subsidies? I asked Allison if this proclamation applied to us, as well, and she kindly replied:

"I think the guidance here is just about low/moderate income people who are getting cost-sharing subsidies that would make having an HSA and getting exchange coverage mathematically impossible. I think regular folks could still have an HSA and a non-subsidized, non-cost-sharing-subsidized plan, because the deductible could still be high enough that the plan would be compatible with the HSA rules."

Can't fault her for honest reporting, but I'm still unconvinced. After all, the whole "skin in the game" nature of HSA plans is in direct - and stark - contrast to plans that have to include all manner of pre-defined benefits payable at 100% (such as birth control convenience items).

If the story is accurate (and I have no reason to doubt that it is), then folks who haven't traditionally been prospects for HSA-type plans will suddenly become the only ones who actually qualify for them. But the very characteristics which made them less than ideal prospects (eg "what's my co-pay?") haven't changed, and won't change in the "new" environment.

'Tis a shame, really.

Underwhelming

As Bob noted last month, that seems to be the response of carriers to the upcoming Exchanges. Recall, though, that these are for individual policies; employers interested in group plan rates and products will access the "wholesale" version, SHOP (Small Business Health Options Program).

And shouldn't that actually be SB-HOP?

And as in the case of the aforementioned Exchanges, the reception by carriers has been - at best - lukewarm.

Case in point: Washington (the state, not Capital City).

"The board of the Washington Health Benefit Exchange is thinking about pushing the start date for the state's Small Business Health Options Program (SHOP) exchange to Oct. 1, 2014."

But, aren't those supposed to be online much sooner? As in, October of 2013?

Maybe, but you can't sell what you don't have, and thus far, a rousing one (1) carrier has expressed interest in participating. And that carrier, Kaiser Permanente, offers plans in only a limited area, not statewide.

There's a word for this....

Oh, yeah.

I think I'm going to be sick

"The Internal Revenue Service official in charge of the tax-exempt organizations at the time when the unit targeted tea party groups now runs the IRS office responsible for the [ObamaTax]."

Words. Fail.

Chickens. Home. Roost.

From the "I told you so" files:

Back in January, we observed that, even though the ObamaTax had heavy union backing, there was some concern that these efforts might backfire:

"Union leaders say many of the law's requirements will drive up the costs for their health-care plans and make unionized workers less competitive"

Fast forward to April, and we see the wall start to crumble:

"A labor union representing roofers is reversing course and calling for repeal of the [ObamaTax], citing concerns the law will raise its cost for insuring members."

And now to complete the trifecta:

"Deep in the list of taxes that the [ObamaTax] will hit Americans with is a 40 percent excise tax on health plans typical union members have ... This tax will most directly affect union families and early retirees"

Schadenfreude - it's what's for dinner.

What could *possibly* go wrong - Part XXVII

A perfectly pleasant day, ruined:

"The [IRS] has requested funding for 1,954 full-time equivalent employees for its Affordable Care Act office in 2014 ... these bureaucrats will write and enforce tax regulations for parts of the economy in which they have no core competence."

Well, how is that any different than the way things stand now?

Oh, right:

"To monitor compliance with [the ObamaTax], the IRS and HHS are now building the largest personal information database the government has ever attempted ... The data hub will be used as the verification system for ObamaCare's complex subsidy formula. All insurers, self-insured businesses and government health programs must submit reports to the IRS about the individuals they cover, which the IRS will cross-check against tax returns."

So one wonders:

Will tax cheats be denied health care?

What if you accidentally underpay?

Who, exactly, is building this database? Is it at least an American company?

Given previous security breaches, it's not entirely certain that your data won't be misused or disseminated (ask the recent victims of the IRS non-profit certification process). And given that the Feds' reliability in matters data are, at best, spotty, one is also not reassured.

Sleep tight.

Kentucky Progress: The Gov self-destructs

Several weeks ago, we introduced readers to the efforts of one Bluegrass State patriot, David Adams, fighting against Frankfort's seemingly illegal efforts to install an ObamaTax insurance Exchange.

Now David has video of Gov Beshear apparently admitting as much:



Bravo, David!

Buying and selling HIPAA

HIPAA privacy rules regarding PHI (Personal Health Information) are pretty stringent. As an agent, I have to be careful about disclosing PHI even to clients' own family members.

Pause.

Buy-sell agreements (and other business uses of life insurance) are great risk management tools. If a partner or key employee dies, the business may suffer immediate financial losses which can be mitigated by the infusion of cash from a life insurance policy.

Pause.

Life insurance policies are contracts, and are required to adhere to certain standards and rules, one of which is that the application is part of the policy, and must be attached to (or enclosed within) it. The application forms the basis for the whole transaction, and includes not just name and date of birth, but pertinent health and financial information, as well.

Now, let's tie this all together:

Fred and Barney own Bedrock Widgets, and enter into a buy-sell agreement. They call me to purchase life insurance policies on each other to fund it. I take their applications and submit them to the Prehistoric Life Insurance Company, where they're underwritten and the policies issued. We meet, and I deliver the policies: Fred's to Barney, and Barney's to Fred.

See the problem?

Barney now has all of Fred's health info, and vice versa.

This could be....uncomfortable.

But is it against HIPAA regs?

Standard industry practice says no: the application is (by law) part of the application and by law a copy must be included in the policy. So carriers have - thus far - avoided having to address this seeming contradiction.

Thus far.

[Hat Tip: FoIB Brian D]

9 Terrifying Words

Who knew how prescient our 40th president would turn out to be?

The IRS - the folks tasked with enforcing the ObamaTax - are making the news (again) in a particularly disturbing way:

"The Internal Revenue Service is now facing a class action lawsuit over allegations that it improperly accessed and stole the health records of some 10 million Americans ...  some 60 million medical records from 10 million patients were stolen by 15 IRS agents. The personal health information seized on March 11, 2011, included psychological counseling, gynecological counseling, sexual/drug treatment and other medical treatment data."

But we're supposed to trust them with our vital (and private) health information?

Oy.

ObamaTax chow down

Whether it's movie theaters, theme parks or fast food joints, the ObamaTax is certainly taking a bite out of the employment market. As the Wall Street Journal notes:

"Some restaurant operators are scaling back expansion plans because of uncertainty about the expense of insuring employees under the [ObamaTax] ...  East Coast Wings & Grill, a 26-unit chain in North Carolina and Texas, in March imposed a three- to five-unit limit, for the time being, on the number of restaurants that franchisees can own, because of worries about health-care costs."

Ooopsies.

It's really a double-whammy: the costs themselves, plus the uncertainty of how they'll shake out. So businesses refrain from expanding, which in turn means fewer jobs are created, which in turn adds more drag to an already anemic economy.

And it's only going to get worse.

Over at Reason, there's a letter from an employer to his 23 employees laying out what they can expect in terms of changing health care policies and costs, and why. But here's the money quote:

"The higher cost for [the employer] would reduce our ability to hire, give raises, etc."

These are very real, very immediate concerns, but have been given short shrift in the legacy media. The letter is amazing for it's comprehensive but totally understandable explanation of where they've come, and where they're headed, by an employer who really "gets it." Read the whole thing.

See and Say and the ObamaTax

In addition to all the other wonderful ObamaTax news to which we've been treated lately, add this (Hat Tip: Assurant Employee Benefits):

Did you know that, come January, your ObamaTax-compliant "health" plan will also include "pediatric services including oral and vision care?"

Well, small group and individual plans will have to cover those, and you'll have the privilege of paying for those "benefits" (whether you want to or not).

These little "goodies" can have no annual or lifetime limits, must cover up to $700 per child (maximum of $1,400 per family - yay), and meet MLR requirements.

Click here to access the whole FAQ.

Cavalcade of Risk Number 183: Shaky Isles edition

Russell Hutchinson hosts this week's roundup of risk-related posts from New Zealand, and includes some interesting items from around the globe.

Do check it out.

Can you see it now, Kathleen?

"[H]enceforth insurers shall be forbidden by law to charge smokers higher rates than non-smokers. Smoking, as it turns out, “is a preexisting medical condition”

Obamacare vs IRS Train Wreck

Soon to be former Sen. Baucus has described Obamacare as a train wreck.  

As if things aren't bad enough for this self-destructive obamanation of a health "care" plan, now the IRS could inflict even further damage.

In case you missed it . . .

The IRS will largely administer this attempt at providing near-universal health insurance. It is responsible for overseeing the tax credits and tax increases in the law, and—most critically—ensuring that businesses and individuals comply with the individual mandate and other major provisions. 

Fiscal Times

And to pour gasoline on the fire  . . .

Former House Speaker and GOP presidential candidate Newt Gingrich declared Monday on MSNBC's "Morning Joe," "How can you put Obamacare under the Internal Revenue Service?  “Why would you trust the bureaucracy with your health if you can’t trust the bureaucracy with your politics?" he said. "There are bureaucrats in the IRS who are capable of ruining your life while lying about it.”

The man has a point.

Gingrich is no stranger to dissention and is certainly not timid when it comes to expressing his mind . . . whether you ask his opinion or not.

The IRS has undermined its own credibility on the issue. It initially claimed before a congressional committee that conservative groups were not under a special microscope. The agency then apologized last week for targeting that supposedly occurred out of a Cincinnati field office. But a new report by the Washington Post on Monday says that IRS officials in Washington and California also queried conservative groups, who were told at the time that a Washington-based task force was overseeing their applications.

I would say it is symptomatic of the current administration, but that would be an exaggeration.

More truthfully, lies and distortion seem to be a way of life for our elected officials.

Now if the folks in Washington start blaming the IRS scandal and collapse of Obamacare on an obscure video .  . .

Kathleen, hear those locomotive whistles yet?

And now, from the Washington Post Wonkblog:

"Over the past three months, Sebelius has made multiple phone calls to health industry executives, community organizations and church groups and asked that they contribute whatever they can to nonprofit groups that are working to enroll uninsured Americans and increase awareness of the law"

Health news

■ First up, great news if you like Dom Perignon:

"[N]ew research  suggests three glasses of bubbly a week can improve your memory ... a regular tipple of champagne can help  prevent brain disorders such as dementia and Alzheimer’s disease."

Apparently, a compound found in certain grapes used in producing champagne - phenolic acid - can act as a memory aid.

Cheers!

■ In somewhat of a medical miracle, an Aussie who had been declared clinically dead for over half an hour was "brought back to life by a brand new resuscitation technique ... testing a mechanical CPR machine, which performs constant chest compressions, and a portable heart-lung machine -- normally used in theatre -- to keep oxygen and blood flowing to the patient's brain and vital organs."

And he wasn't the only one - there've been half a dozen others, as well.

■ Several months ago, Bob blogged on the intersection of ObamaCare and groceries. Fast forward a bit, and:

"Another group is objecting to another part of [the ObamaTax]: Grocers ... a U.S. health law provision that mandates the companies display the calorie content of all their foods."

The problem is that this adds huge costs to food production and distribution, threatening "a logistical nightmare."

Yeah, well, welcome to the club, laddies.

■ FoIB Holly R tips us to this story about cutting edge tech and a little girl:

"[D]octors at Children’s National Medical Center are making hearts. Not actual hearts, but three-dimensional synthetic models churned out by what looks like an ordinary printer."

While 3D guns are currently sucking up the media oxygen, these little wonders could save lives. Each organ is individually designed based on a patient's "particular intricacies and deformities" and then printed out and "installed."

Brave new world, indeed.

■ And finally, the story of Angelina Jolie's recent surgery is making the news, and it reminds me of a post we did at the beginning of the year:

"The 24-year-old Miss DC plans to undergo a double mastectomy ... removing both breasts as a preventative measure to reduce her chances of developing the disease that killed her mother, grandmother and great aunt."

Ms Jolie apparently shares some of the same concerns:

"[S]she underwent a preventive double mastectomy earlier this year after learning she carries a gene that increases her risk of developing breast cancer and ovarian cancer."

One presumes that, at some point, she'll deal with the potential of ovarian cancer in a similar way. I'm still somewhat conflicted about this kind of pre-emptive surgery, but have to admire the bravery of the women who face the decision, and for speaking out about it.

If you like your agent...

Remember back in the day, when we were promised "if you like your current plan, you can keep your current plan?" And remember how well that turned out?

Yeah.

Well, turns out that if you like your current agent, you may be able to keep him (or, of course, her). But probably not. From Anthem email:

"As part of our on-going support and commitment to you and your retention efforts, you will remain the Agent of Record for your clients when we transition them to an ACA-compliant off exchange* plan"

How nice.

Notice that little asterisk?

We'll get to that in a moment.

First, though, let's clarify what that term "transition" means. As we explained last month, existing plans will be going away shortly (what, you thought they meant it when they said you could keep your plan?), and currently insured folks will be "mapped" or changed over to comparable ObamaTax-compliant ones (and by "comparable" we mean "nothing at all like"). Don't like that idea? Please let Mr Baucus know.

Once you've been "mapped" to your new plan, you may have some questions about it, so you'll likely want to discuss those with your agent.

And now for that pesky little asterisk:

"You may be required to become Exchange Certified if your client enrolls via the Exchange"

And if your agent (rationally) take a pass on that attractive offer? Well, then, time to pick a new one. Of course, that likely means someone whom you don't know, have never known, and have no relationship with. Not to mention, someone who may, in fact, be completely uninterested in helping you.

Feel better?

What could possibly go wrong?

So Ms Kathleen, under fire for her clumsy, expensive implementation of the ObamaTax, has decided to strong-arm encourage the folks on whom she's counting to provide the actual products for the Exchanges:

"Health and Human Services Secretary Kathleen Sebelius is asking companies for financial donations to help implement President Barack Obama's healthcare overhaul"

While this is every bit as sad, pitiable and contemptible as it appears, I have another question:

How legal would such a donation be?

After all, there's that little box on our tax forms for donations to the presidential campaigns, and of course individual citizens are allowed to pay more in taxes than they actually owe.

But how, exactly, can corporations do this? When individuals "contribute" by electing to pay more, they can't specify that these extra dollars go to specific agencies.

One supposes that corporations can also choose to pay more, but again, that's going to a general fund, not a specific agency or effort.

So how does XYZ Mutual actually do this (if they're so inclined)?

And speaking of tax forms, yours just got more complicated:

"When Obamacare’s individual mandate takes effect in 2014, all Americans who file income tax returns must complete an additional IRS tax form ... will require disclosure of a taxpayer’s personal identifying health information in order to determine compliance with the [ObamaTax[ mandate."

So not only will these wunderkinds have access to your personal financial data, but now your health data, as well.

Warm fuzzies, anyone?

Pharma whines their bills won't be paid in full

Now that excessive hospital billings are getting some press maybe Journolist, or those masquerading as them, can stop writing articles about the high out of pocket cost of Rx and start asking why the Rx are so expensive to start with:

"Cancer patients could face high costs for medications under President Barack Obama's health care law, industry analysts and advocates warn."

Some exchange plans might require members pay 30% of drugs that cost $10K per month and this concerns the pharmaceutical companies. All of us should be concerned about the other $7K we are paying.  The expanded marketing of Enbrel which can cost a couple thousand a month should also be of concern to all of us.

Enroll America will not be Enrolling

A recent post in Health Affairs written by Enroll America's top officials discusses the role they will play in educating and enrolling consumers into insurance exchanges. Interestingly, their post made no mention of Navigators. So I decided to reach out to the authors in the comment section. Here is what I asked:

I’m curious if Enroll America has filed with HHS to serve as Navigators? Could one of the authors please respond? Thank you!

Finally I received a response. This wasn't posted in the article but came direct to my email from Ron Pollack of Families USA who is also the Founding Board Chairman of Enroll America.

Enroll America  has not filed to serve as navigators and has no intention of doing so.

So there you have it. The group that is supposed to be leading the charge to serve those who need it most won't be serving them much at all.