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Health Care Reform

Modified Community Rating

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This week’s Business First of Louisville had an article about Modified Community Rating.  Director of Government Relations Lawrence Ford is quoted throughout the article.

Here’s the link:

http://www.bizjournals.com/louisville/print-edition/2013/05/24/modified-community-rating-system-is.html

Mr. Ford does a good job of explaining how this will impact Kentuckians rates.  He highlights two issues.  The first is younger people subsidizing the older population.  Insurance companies aren’t going to bring down older folks rates, they’re going to push the young population up to help offset the older population claims.  He also talks about the lack of a substantial penalty for those who don’t enroll.

Still something needs to be done about letting individuals buy whenever they get ill.  The way it’s currently set up that is what could happen.  I know there are talks about it, but we need something done soon before Jan 1, 2014.

PPACA Rollout

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On Friday President Obama held an event to tout the benefits of ACA, specifically to a large group of women.   The New York Times is also reporting that the administration confirmed that Kathleen Sebelius, the head of the health and human services, has been trying to raise money from the private sector to promote an education and outreach program raising the awareness of the benefits of PPACA.  Congress has repeatedly refused to fund this outreach program, and that’s why Ms. Sebelius is going to the private sector.

http://www.nytimes.com/2013/05/11/us/politics/obama-to-makes-new-pitch-on-health-care-law.html?ref=us

Speaking just for Kentuckians, I’m really skeptical that we’re going to see a decrease in premiums.  Just taking into account what the new policies are going to have to cover, that in and of itself will cause an increase in premiums.  For instance, maternity.  All policies (even men) will have maternity coverage. Right now, that costs about $100/mo more than a policy that doesn’t cover it.

The second factor that’s going to cause premiums to rise is the guaranteed issue aspect of the law.  When underwriting is taken away from the insurance companies, healthy individuals are going to be penalized even more than they are today because insurance companies can’t offset the amount on the older and/or sicker population.  So the older individuals more than likely have their premiums staying roughly the same, it’s the younger generation that’s going to see an increase.  The same young people that the President is targeting to enroll in this law.

I will give the President this, the individuals and families that receive a subsidy, may see a decrease in what they pay.  However, I think the insurance will still cost more.

We’re going to just have to wait and see in October when the premiums are made public just how much it will cost.

 

 

 

Kentucky Expands Medicaid

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Yesterday Governor Steve Beshear announced Kentucky’s decision to expand Medicaid.  A link to the article in the Courier-Journal is below:

http://www.courier-journal.com/article/20130509/PRIME07/305090046

Figures from the 2012 U.S. Census Bureau tells us that 308,000 Kentuckians will now be eligible for this coverage.  The next step is for these newly eligible citizens is to enroll.  The National Association of Health Underwriters (NAHU) have always touted that many uninsured citizens could obtain coverage if they were to sign up for it.  Some citizens don’t even know that they’re eligible for “free” coverage.  Hopefully this will change.

Another point to keep in mind with this expansion is that hopefully Employer Based premiums will be lowered because these premiums have a “tax” included that helps offset the bills for the uninsured.  Hopefully that will be removed.

Let’s also hope that these newly enrolled citizens will start using their insurance.  One problem that uninsured people encounter is that they wait to get their healthcare.  By waiting, they’re more likely to seek service in the Emergency Room, which is the most costly place to seek service.  Now that they have Medicaid, hopefully they will seek preventive care and stay out of the Emergency Room.  Opponents have said this will flood doctor’s offices.  I guess we’ll have to wait and see.

The last point I’d like to cover is what kind of impact will this have on Employers.  Under this Expansion, a single person making up to $15,856 annually, will be eligible for Medicaid.  This is just a tick above the minimum wage level (assuming a 40 hour work week).  Something that I’d like to know is how many Kentuckians with full-time employment (under the new law that’s over 30 hours per week) would qualify for Medicaid.  These newly eligible citizens maybe considered a  “Qualified Waivers” to an Employer Sponsored Plan.  A Qualified Waiver is someone that has coverage elsewhere under another insurance plan.  An example would be someone today being covered under their spouse’s plan.  The employer doesn’t have to cover that spouse, and the employer isn’t harmed in their participation percentage with their health insurance company because the employee is covered under a spouse’s plan.  I know, it’s confusing.  The point is (and I’m still waiting for insurance companies to verify this, although today this is accurate) that these newly Medicaid eligible recipients will now be considered a qualified waiver in an employer sponsored plan.  How many new Medicaid recipients make this amount of money and work 30+ hours for one employer?

 

The Cost of Health Care

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On the front page of the Louisville Courier-Journal this morning (and the first story I heard this morning on CNN), the headline reads “The Cost of Health Care”.  Apparently hospitals try to make money, who knew?

In all seriousness, this is something that we’ve been talking to our clients about since 2003.  This is a huge problem that I’ve believed in for the last ten years.  Hopefully with this new published information, this will start us in the right direction in getting pricing out in public.  The medical industry is the only industry in the USA where you have no idea what something costs.  When you ask someone at the hospital/doctor’s office, you get a bewildered look, as in why are you asking, or how would I know?  It’s insane.  We as a society should have been demanding this time of open information for the last twenty years, it took the government to pass a over-reaching law to finally get this type of information.

Now, I could ramble on for the next twenty minutes about this, but I’m trying to keep it at a minimum.  I would like to know why hospitals charge what they charge.  Why does heart failure cost $10,000 at Baptist Hospital, but $16,000 at Norton’s?  What does that extra $6,000 get me?  Am I more likely to survive at Norton’s, or is it simply better food at Norton’s?

Here’s a link to the article:

http://www.courier-journal.com/article/20130508/BETTERLIFE05/305080118

Remember, especially for those with Health Savings Accounts, ask for a cost before having anything done to you.  You can do the same thing for prescriptions, call around to a few places before making a purchase.

Key Provisions of the Affordable Care Act

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Below is a link to the U.S. Small Business  Administration Home Page.  The SBA does a good job of breaking down some of the key components of PPACA and how they apply based on the size of your business.

Let me know if you have any specific questions.

 

http://www.sba.gov/healthcare

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