About That Individual Mandate...

For the last few months we have been hearing President Trump touting his "repeal of the individual mandate" as a huge opportunity for people to not be penalized for going without health insurance. On the Democratic side Nancy, Chuck, and their minions have been scolding Republicans for kicking 13 million people off of insurance.

This game of rhetoric is confusing to the general public. Well, never fear, here at IB we are all about educating the public as to what the reality of the latest partisan divide actually means.

First, let's get the "people are going to die/kicked off insurance" fallacy out of the way.

Democrats were quick to point out that CBO is showing that in 2026 (8 years away!) 13 million more people will be uninsured through their scoring system. In telling the story democrats have used language that insinuates people are going to be kicked off of their plans. This is a blatant lie. 

The CBO report notes that 5 million people will drop off of Medicaid, 2 million will not stay on their employer sponsored plan, and 5 million people will not buy insurance in the individual market. Note that none of these people are being forced to lose insurance. Rather they are electing not to participate. That's a huge difference.

So, what is the truth about "repealing the individual mandate"?

Quite simply put, the mandate still exists. It's still in the law. What has changed is the penalty for not purchasing health insurance has been zeroed out in the new tax law. More important, the zero doesn't begin until 2019. So not only is the mandate alive it still has teeth (alright maybe only a single tooth) for this year. Here's the actual language from the tax bill Trump signed:

PART VIII—INDIVIDUAL MANDATE

SEC. 11081. ELIMINATION OF SHARED RESPONSIBILITY PAYMENT FOR INDIVIDUALS FAILING TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.

(a) In General.—Section 5000A(c) is amended—

(1) in paragraph (2)(B)(iii), by striking “2.5 percent” and inserting “Zero percent”, and

(2) in paragraph (3)—

(A) by striking “$695” in subparagraph (A) and inserting “$0”, and

(B) by striking subparagraph (D).

(b) Effective Date.—The amendments made by this section shall apply to months beginning after December 31, 2018.

A swing in the political pendulum could bring the penalty for not having insurance back. Changes in congress could reopen these discussions. Striking "Zero percent" and inserting "2.5 percent" could happen. Republican's aren't telling you this.

Honesty is a lost attribute for politicians these days. Yet CNN, Fox News, and countless other media continue to promote what the inner beltway folks tell them as if it is gospel. This is why we are in the political environment we are today. Honesty doesn't get you reelected. And the best stories are the ones that are the most egregious.

Fortunately for IB readers, we aren't politicians or journalists. Instead we are insurance professionals. You know, the guys who politicians think are one step below ambulance chasers and one grade above used car salesman. 

#Fake ObamaCare News

Uh-oh, looks like someone misspelled 3000% rate decrease:

"Health care premiums for the skimpiest Obamacare plans in the District of Columbia are skyrocketing in 2018."

Rates for Bronze-level plans are supposed to be among the lowest (with concomitantly higher out-of-pocket exposure). The article cites the example of Daniel Turner, "a single healthy guy in Washington, D.C., with no dependents." His Bronze plan shot up almost 36%, to over $4,400 a year. Couple that with his deductible and co-insurance and he's out over $10 grand before the plan pays a nickel.

Oh, wait, he does get a "free" colonoscopy, which is worth at least a few hundred, right?

Monday Afternoon LinkFest

■ First up, via FoIB Holly R, is news that the Much Vaunted National Health System© continues to circle the drain:

"[E]xpenses have forced 40% of walk-in health centers to close, all elective surgery in January [had] to be cancelled, and primary care has been decimated"

But hey: Free.

This is, of course, rationing by government fiat, and it's how nationalized health "care" works. Which is why it's not likely to take hold here (and the apparent rollback of the ACA Death Panel helps nail this particular coffin shut).

■ Down the road, FoIB Jeff M tips us to this Tale of Two Exchanges:

"Most states that operate their own ObamaCare exchanges saw more people sign up in 2018 than last year, while 29 of the 34 states that rely on the federal government to promote enrollment saw their sign-ups fall."

Overall enrollments continue to free fall; last year saw a year-over-year falloff of almost 4%.

Of course, the article attempts to lay the blame on the Trump administration, despite the fact that we've seen enrollments decline pretty much the whole run of the HC.gov debacle.

■ Readers may recall our post a few weeks about mudslide coverage for our Golden State friends:

"We wondered if (and/or how) one would be covered if one's house (literally) went downhill."

Co-blogger Bob alerts us that the state's Insurance Commissioner has chimed in:

"The notice acknowledges that homeowners’ and certain commercial property insurance policies frequently have exclusions for losses from mudflow, debris flow, mudslide, landslide or other similar events."

Okay, so far so good.

"Under California insurance law, the exclusions are not enforceable if the facts establish that the wildfire, which is a covered peril, was the “efficient proximate cause.”

Oh, frabjous day. Let's just wave the ol' magic wand and conjure up coverage.

WooHoo!

Another Timely Reminder

That health insurance ≠ health care. As FoIB David Fluker points out:

A lot of them won't accept Covered CA plans either. https://t.co/KXEWVxvUJd

— Dave Fluker (@FlukerDavid) February 9, 2018

To which I replied:

"We have same issues here in OH with CareSource, Molina, etc"

In my market, and in fact in most counties in the United States, there are only a few "choices" when it comes to ACA-compliant health insurance plans. Here in Montgomery county, the only such carriers are all primarily known for their Medicaid business (for lack of a better term, since Medicaid isn't insurance) that have jumped in to the ACA marketplace. And with very narrow networks (since most doc's don't want any part of Medicaid-level reimbursements), insureds are finding that their purchase may have saved them from the penalty tax fine, but is of little other value (well, except for that free birth control, er, convenience items).

So if one can't actuality use the plan, what's the point in paying for it?

Co-blogger Patrick also jumped in to the fray, pointing out that "Centene is already at the center of a lawsuit for insufficient network adequacy."

Thing is, suing for a desired result doesn't guarantee that result; the question becomes "how does one force a carrier to add non-willing providers?"

I wouldn't be counting any chickens just yet.

Happy (Belated) Blogiversary

Well! I certainly don't understand how that happened: We recently (January 31st) marked our 15th (!!) blogiversary, but failed to note it. Still amazed that a decade-and-a-half later we're still going strong, with the best co-bloggers on the internet.

Thank you, dear readers, for for your continuing support and interest!

Breaking: Is the Death Panel gone?

It would appear so:

Senate budget deal would repeal "ObamaCare’s Independent Payment Advisory Board" aka IPAB." https://t.co/ZLSYXdzByD

— AssocAmerPhys&Surg (@AAPSonline) February 8, 2018

Winter Olympics Heads' Up

Our friends at GeoBlue inform us that:

"Leading up to the event, there have been concerns due to the proximity of the games to the North Korean border. Recent dialogue initiated by North Korean leader Kim Jong Un with South Korean President Moon Jae-in have reduced tension and threat concerns however, there are safety precautions that members should consider prior to and while traveling in this region to ensure a safe and healthy experience."

So if you're headed to The Games, make sure you're adequately insured, too.

From the Mailbag: A Toughie

This one seems to be a real poser:

"I am hoping you can answer some questions I have. I've been looking at my marketplace application and it asks about dependents and whether or not you claim them on your taxes. My divorce decree is written so that I can claim 2 kids one year while my ex claims 1. The next year it switches. So for the purposes of getting insurance through the marketplace, can I only claim each year which children I will be claiming that tax year? My ex says when he claims the children he cannot get the child tax credit because they do not live with him. So all of this is confusing to me. I will have to pay even more for insurance if I do not claim them all. They live with me full time and their father pays child support.

As things stand now, I am court ordered to carry them on insurance. However when I fill out the application it asks me if they have access to private health insurance. Technically they do through their father but I do not have the power to force him to carry them without seeking a court order. If I answer that question as they do not have access, is that technically correct since I can’t make him without a court order? My plan is to get the order changed anyway but I have considered carrying them if it makes the premium cheaper. However, I do not know if I legally can. I would like to know what my options are in regards to this.

I have asked a few attorneys I know about this and none of them even an answer. If you cannot answer me, do you know of someone who can answer?

Thank you so much! I know that is a lot of craziness."

I replied:

"I’ve gone round and round on this, and the challenge is that these are really closer to legality/tax questions than I’m comfortable answering (since I don’t play either a lawyer or*an accountant on TV).

Two thoughts:

1 – I’d call the .gov hotline (800-318-2596) and see what they have to say.

2 – I’ll also make this offer: We would be happy to post this in our “From the Mailbag” series (anonymously, of course), see if that produces anything helpful.

Just let me know.

I’m so sorry I can’t be of more help."

She responded:

"Unfortunately none of my lawyer buddies know the answer to this but none of them specialize in tax law. I will try the government hotline as soon as I can. If you want to post it on your blog that is fine with me as well. I can’t be the only one with this problem."

Which is more than a fair cop.

Please feel free to share your thoughts in the comments, or drop us a line in email if you'd prefer.

NB: For now, this is strictly about coverage, not subsidies.

Thank you!

Conjunction Junction: 'And' vs 'Or'

Individual disability policies are one of the two most complicated products in our portfolio (the other being Long Term Care insurance). There are a lot of moving parts, and determining whether or not one is truly "disabled" is a function of the policy's definition of that term.

We're privileged today to bring you a guest post from our friends at Diversified Brokerage which I think does a fantastic job of explaining the nuances of how these definitions differ, and why that matters:

One word in the definition of disability in a disability contract can  dramatically change how a claim is paid.

That word is either "or" or "and." You must pay special attention to this when reviewing the definition of disability.

If the definition of disability has the "and" word in the definition of disability, then a professional or employee would have to have a loss of time or duties AND a loss of income.

If the definition of disability has the "or" word in the definition of disability, then a professional or employee would have to have a loss of time or duties OR a loss of income.

It's important to ensure that your plan has the "or" language; with it, a professional could be back to work full-time and still be eligible for benefits as long as there is a loss of income from the disability.  It also means that a professional could be receiving 100% of his/her income (delayed receivables or profits) and still be eligible for benefits as long as there is a loss of time or duties.

Most folks aren't aware of the impact of this one word in their Disability Insurance contract, so here's your heads' up to make sure yours is an OR definition.

I'll just add that I often I often say “it’s the difference between you being disabled versus your wallet being disabled.”

Special IB Thanks to DB's Shaun M for his help on this post.

The Sith and The Carrier

Colleague and FoIB Darth Billius has a credible, if cynical, take on the recent Premier Health/United Healthcare (UHC) kerfluffle:

Housecleaning.

How's that, Henry?

Well, last Spring the network provider contract between Premier Health and UHC expired, and renewal negotiations hit a quagmire (which, by the by, is not all that unusual: see here, for example). The two parties remained on the outs for some time, and finally resolved the impasse at the beginning of this year.

In the meantime, there appeared to be a mass exodus of groups from UHC as a result of so many facilities being out-of-network due to the absence of a contract.

This morning, I mentioned to Darth B that it didn't seem likely to me that all parties had had a sudden change of heart when the ball dropped the night before; surely they had known this for weeks (at least). So why take the hit?

Darth B replied "why, to get rid of unhealthy groups, natch."

Hunh?

Continued the Dark Lord of Insurance, "well, think about it: someone that sees their doc maybe once or twice a year, with no chronic or major health issues, probably figures it's easier to change providers than insurers.

Unhealthy folks, though, who have an on-going relationship with their docs and need to see them often, well, they're going to jump ship at the earliest opportunity to get those providers back to in-network benefits levels."

Hunh.

Makes sense to me.

Fees & Taxes

A few weeks ago, Patrick blogged on the Health Insurance Tax (HIT) that had been in time-out for the 2017 tax year, but has now roaring back to life:

"For 2018, the amount this tax must generate is $14.3 billion - meaning insurers must generate $22 billion of additional premiums to pay for it."

As long-time readers know, companies (insurance or otherwise) don't actually pay taxes, so this is actually a tax hike on covered individuals.

So why are you beating this lifeless equine?

Well, because Patrick also pointed out that:

"The tax applies to all fully insured coverage including:

• Individual On Exchange
• Individual Off Exchange
• Small Group Fully Insured - Both ACA and Pre ACA
• Large Group Fully Insured - Both ACA and Pre ACA
• Medicare Advantage
• Medicare Part D
• Medicaid Managed Care"

Unfortunately, that list was non-exhaustive; that is, it applies to other lines of coverage, as well.

My go-to carrier for non-medical (aka "ancillary") coverage is Companion Life. Non-med group plans would include short and long term disability, dental and vision, that kind of thing. As Companion alerted me by mail yesterday, some of* these lines of coverage are also subject to the Health Insurance Issuer Fee, and it's not insignificant:

"The ACA fee for 2018 will be 3.5% of dental and/or vision premiums."

As with other carriers, Companion breaks these out on their premium notices (invoices) because they "believe this is the most transparent way to display this fee."

Agreed.

[* IB Thanks to commenter farmbellpsu for the correction]

The Much Vaunted National Health System© kills a child...

And then the British justice system convicts his doctor.

Seems legit:

"The good that doctors do is oft interred by a single error ... The most merciless expert witness was none other than Dr. Bawa-Garba herself."

This is as much a story of EHR failure as it is a health care system that is overworked, underfunded and understaffed.

But hey, free health care.

Seriously, a compelling, disturbing story. Recommended.

More from Up North and Across the Pond

Perhaps you've heard the horrific story of the Canadian couple and their Caribbean Vacation from Hell:

"Young couple contracts hookworms in feet at Punta Cana beach resort"

Well, turns out that the worms weren't necessarily the worst part of the story:

"Canadian Couple Forced To Travel To U.S. To Treat Parasitic Worms ... Health Canada denied them a prescription."

That's the trouble (well, a major factor, anyway) with "free" health care: you get what you pay for.

Not to be outdone, the Much Vaunted National Health System© once again says "Hold my pint, mate." Sally Pipes reports:

"The United Kingdom’s government-run, single-payer healthcare system is so inept that something as mundane as flu season can cause a national crisis ... One Portsmouth resident, 88-year-old Josephine Smalley, died on New Year’s Day after spending five hours in an ambulance and another two waiting on a gurney at Queen Alexandra Hospital."

Now to be fair, this season's flu situaton is taxing **our** system, as well (heck, I had a client die recently from it); the lesson here is that the clam that socialized medicine is somehow superior is, well, hokum.

[Hat Tip for first item: @transitfok]

From the "You Can't Make This Up" Department:

We already knew that fake people were being signed up for health "insurance" on the 404Care.gov site, so why am I not surprised to learn that:

"Some 2015 HealthCare.gov Subsidy Applicants Were Dead"

Here's the part that I don't understand: if they're already dead, why weren't they enrolled in Medicaid (and hence not subsidy-eligible)?

[Hat Tip: FoIB Jeff M]

Sketchy Campaign: Counterpoint

FoIB and long-time LTCi Guru Randy Gallas offers his take on last week's post critical of a questionable (to me) Long Term Care insurance awareness effort:

"I agree that the State of Ohio needs to be more engaged in LTC awareness. I have contacted the Department of Insurance (DOI) on many occasions and their answer was always "we'd like to do more but we don't have the budget for sending out brochures or explaining  Ohio's LTC  Partnership program."

However they did in 2008 and these trifold brochures were available through the Ohio Department of Jobs and Family Services.  A very informative planning brochure that was available to all licensed insurance agents. They are no longer printed. 

By sourcing this out to the 3in4NeedMore  has the appearance  of a lead generation program that might be sold to a brokerage that may or may not even be in the State of Ohio.   I would advise anyone who would like more information on LTC planning to contact their local insurance agent/agency.

As always, our 18 years of knowledge and claims experience is something that we enjoy passing along to anyone interested in long-term care planning."

Thanks, Randy!

Something different (and potentially quite helpful!)

Long time readers know that, for many years, I participated in a healing prayer group. One basic tenet of that effort was that the folks for whom we prayed had to know that we were doing so (and had given us their permission, as well). The reason for this was that we truly believed (and of course, this was not exclusive to our efforts or faith) that one's attitude plays a great role in how well (or even if) we heal.

Likewise, dressing up in a suit and tie (or nice dress and stockings) usually engenders a greater level of self-confidence. Perhaps Fernando had it right, after all.

Which brings us to this wonderful news item sent along to us by FoIB Holly R:

"Why do hospitals bare butts when there are better gowns around?"

Turns out, there's been an on-going effort to upscale those ubiquitous (and generally less-than-flattering) hospital gowns patients are issued. While they do have obvious practical advantages, one can't help but think that they interfere, in at least some small measure, with the patient's own attitude and self-image, which in turn may hinder the healing process.

That may be changing, however:

"[H]ospitals are increasingly paying attention to patients’ experience, and that includes what they wear," says Bridget Duffy, whose company consults with providers on health care operations and the like.

Of course, only time will tell, but even the simplest of healthcare tools can play a pivotal role.

Sketchy Marketing "Campaigns"

Or, "How Not to Run One."

Case in point:

The other day's mail brought this exciting, somewhat alarming item:

[click to embiggen]

It certainly implies two things:

One, that the State of Ohio endorses the 3in4 campaign (more on that in a moment), and two, that the Partnership Program is new (it's far from it).

More pointedly, if the offer is simply for a pamphlet explaining how the Partnership Program works, why does it need my date of birth? Are they really going to personalize these brochures for every sucker person that replies?

Then there's the "Privacy Access Code." I 'get' that they'd like to track specifically who's replying, but why would they need this? If you're at the site, you're interested. Why isn't that good enough, without pinpointing individuals?

The site itself specifically says "The nonprofit 3in4 Association is dedicated to providing information to the public about senior issues, and does not underwrite or sell insurance."

Which is likely true, but notice that it doesn't say "and will not sell this information to agents who do."

And lo and behold, a quick Google yields this little gem:

3in4 Need More - Long Term Care Leads

We are proud to be associated with and the direct mail provider for the 3in4 Need More campaign. Place your order below or learn more about the 3in4 Association and TargetLeads®."

Which nicely answers my previous questions.

Thanks but no thanks.

#FakeCampaign

Whack Whack Cadillac

Kicking the can down the road is very bipartisan. Especially when the can is going to be used to fill full of our tax dollars. This has become a key feature of Obamacare. Nothing has been kicked further than the Excise Tax on employer sponsored plans - commonly referred to as the Cadillac Tax.

The Caddy Tax imposes a 40% tax on employer plan premiums that exceed a certain threshold. Originally, this tax was to be implemented beginning in 2013. According to that CBO score the government would have generated $149 billion dollars between 2013-2019. In fact, under the original score $85 billion would already have been generated under the law.

However, with unions and other business lobbyists turning up the pressure, Democrats in the House pushed a reconciliation bill that included an amendment to the Caddy Tax pushing the start date to 2018. (Note: it also increased the threshold substantially) Because of the shoddy way this bill was passed then addressed through a one party railroad, the end result was revenue on paper. Revenue that unions knew would never, ever be collected.

Under the reconciliation bill the new Caddy Tax revenues were to begin this year and generate $12 billion with another $20 billion next year. At least that is what was supposed to happen based on 2010 scoring. Instead we saw a bipartisan agreement in the 2015 spending bill that pushed the Caddy Tax another two years out with a new start date of 2020.

The latest installment came this past week with the government shutdown and subsequent passage of a short term spending bill. Once again we have bipartisan agreement of an additional two year delay pushing the Caddy Tax out to 2022.

The Caddy Tax has now been delayed almost ten years. One would think that such bipartisan support of postponing a tax that is despised by so many would be easy to repeal. Many groups like Fight The 40 have been working to do just that.

But here's the truth. Congress needs the Caddy Tax. They need it for the revenue on paper. When CBO scores in ten year windows it shows an accounting sleight of hand that many of us don't know. It shows as revenues - whether collected or not.

Having IOU's is how they trick us in to believing that they are good stewards of our tax dollars. Sad truth is they simply don't care about spending your money. They care about you voting to re-elect them. Which is why kicking the can down the road is the avenue of choice for those we elect in DC.

Potential Good News

Our friend Jeff M tips us that Gem State citizens may soon have the option of buying non-ACA compliant plans:

"Idaho says no Obamacare needed for some new insurance plans ... on Wednesday revealed a plan that will allow insurance companies to sell cheap policies that ditch key provisions of the Affordable Care Act."

While this is indeed good news (because it means that at least some lawmakers "get it"), it's a far cry from a done deal:

First, as folks in medical-marijuana states have come to learn, Feds trump states. So, any such plans are going to be subject to the ObamaTax (at least for now). Which isn't necessarily an insurmountable impediment, but something to keep in mind.

Second, which carrier's going to put in the time, manpower and - critically - money to develop and price a plan available in only one state (and the 39th in terms of population, at that)? In general, insurance companies are reluctant "first adopters."

On the other hand, if this actually happens, it would represent the first effective argument I've seen for "sales across state lines."

Finally.

Some Quit Hits

■ Medical marijuana and your health insurance:

"It is our job to responsibly manage around $6 billion of our members’ and employers’ money ... How on earth could we involve them in this chaos by covering marijuana, medical or otherwise, at this point?"

Great points.

■ We've been following the Penn Treaty LTCi kerflufle for a long time (here, for example). What's the latest?

Well:

"Connecticut OKs 69% Penn Treaty Unit LTCI Rate Hike"

That's a big deal for the folks who own one of the 500 or so policies still in-force in the Constitution State.

■ A thousand words (or so) from FoIB Rich W:

Its working! The ACA is working!! And better than expected.

Health Insurance Premiums Rising as High as 265 in Virginia This Year https://t.co/llaWD6eYfs #NewsandPolitics via @pjmedia_com

— Rich Weinstein (@phillyrich1) January 2, 2018

MVNHS© Pole Vaults Shark

From the You Can't Make This Up Department via co-blogger Mike:

Believe or not, it gets worse:

"However men living as women are being invited for cervical smear tests even though they do not have a cervix"

Ya think?

Go read the whole thing over at Powerline.

But for goodness' sake, finish whatever you're eating and/or drinking first.

Let's talk Gummint-Care

Last month, we reported on the latest CanuckCare news, and it wasn't pretty:

"Waiting for treatment has become a defining characteristic of Canadian health care ... waiting times for medically necessary treatment have in-creased since last year."

Turns out, it's even worse than we'd thought:

Canadian Health Care is "Free" But Rationed by Long Wait Times, e.g., a 4.5 YEAR estimated wait time to see a neurologist in Ontario! #Insanity pic.twitter.com/UHljzjvhNX

— Mark J. Perry (@Mark_J_Perry) January 21, 2018

That's right, a four-and-a-half year wait to see the neurologist. But hey: it's free!

To which Britain's Much Vaunted National Health System© says "Hold my pint:"

"NHS 'haemorrhaging' nurses as 33,000 leave each year ... one in 10 now leaving the NHS in England each year, figures show."

This represents a pretty significant problem, since it means the service is now "upside-down" with regard to nurses:

"[T]here are now more leavers than joiners."

Sustainability, indeed.

But hey, free health "care."

DPC vs HSA: Interesting Twist

DPC, of course, being Direct Primary Care, about which we've written extensively over the years (here, for example). My primary criticism of the model (and really the only substantive one from my perspective), is this:

"As long as ObamaCare remains the law of the land, there is never going to be a good *economic* rationale for DPC." [emphasis in original]

But that may be changing, if only a little.

There's a movement gaining steam proposing that DPC fees be made eligible for reimbursement from one's HSA (Health Savings Account):

Dear @RepMarkMeadows and Freedom Caucus: Use your leverage over CR vote to let patients to use HSAs for #DPC. cc @RepDaveBrat @RepAndyHarrisMD @DesJarlaisTN04 @RepGosar @RandPaul #HR365 pic.twitter.com/WqP1y2JAlL

— AssocAmerPhys&Surg (@AAPSonline) January 17, 2018

I think this is a great idea, and I would suggest only that it doesn't really encompass the full value of such a change.

And what's that, Henry?

Well, in the Alternative Benefits field, we talk a lot about HSAs, but also HRAs (Health Reimbursement Arrangements) and FSAs (Flexible Spending Accounts). Seems to me that whatever magic necessary to make DPC fees HSA-eligible would, by definition, render them kosher for HRAs and FSAs, as well.

I suspect that there are a lot more FSAs (and, perhaps, HRAs) out there than HSAs, specifically in the group market (where employers' financial liability is much favorable to the former two).

In any case, a hopeful sign, and perhaps a welcome change

[Special IB Thanks to Jennifer C at FlexBank]