Facts You Won’t See on the Nightly News – Part 2

Letter to the Editor, Submitted 10/5/10 – Des Moines Register declined to publish

In a recent editorial, the Des Moines Register criticized Iowa poll respondents who dislike the new health care reform bill for not understanding specific details in the law. Given that the legislation is over 2,000 pages long, one might forgive the public for not knowing every detail. As Nancy Pelosi famously said during the debate, “We have to pass the bill so we can find out what’s in it.” The reality is that the more people learn, the more frustrated they become.

For example, Iowa employers who have been receiving their annual health insurance renewals now understand that President Obama’s much publicized insistence that, “If you like your current plan, you can keep it” is a lie. Many of the reforms in the bill impact health plans and raise costs even if your plan can remain “grandfathered.” Still more changes will occur if your plan loses its grandfathered status, and the way the rules are set up, precious few plans will be able to avoid the costly mandates contained in the law.

The Register’s editorial chastises the public for believing that the new law would raise taxes in 2010. While it’s true the law does not create new taxes in 2010, the public is now learning that beginning in 2011, the law systematically raises taxes all over the board to the tune of $438 billion over the next ten years. Given the state of the economy, the public has a right to be concerned about almost a half trillion dollars in new taxes.
The Register editorial also points out that the law is intended to lower the deficit by $124 billion over the next ten years. But Iowans, by and large, are not suckers: they know when something sounds too good to be true, it probably isn’t. Lowering the deficit would require that we realize the almost $500 billion in savings the law projects from Medicare. However, Medicare already operates in the red, and the health care bill contains no meaningful reforms that will lower costs. Instead, Iowans understand that Congress will do what they have always done and continue to override scheduled cuts in payments to Medicare doctors and other providers. The net result? The law will not only raise taxes but also massively increase the deficit.

Iowans are also quickly learning other examples of the law’s destabilizing impact. One example – in Iowa, every carrier except Blue Cross and Blue Shield of Iowa has quit offering dependent-only coverage because they can no longer underwrite those policies. Here’s a guess: Blue Cross won’t allow itself to be the only carrier who must take on unknown risks without adequate premiums forever. And when that happens, there will be no carriers in Iowa who write dependent-only policies.

Last week, Iowans also learned that Principal is leaving the health insurance business, costing Des Moines 1,500 jobs. In addition, we learned that Iowa Insurance Commissioner Susan Voss recently asked Health and Human Services to delay the Medical Loss Ratio guidelines in Iowa until 2014. Why? Because without that extension still more carriers will exit the Iowa marketplace. Most Iowans understand the value of competition and that less and less competition in Iowa’s insurance market seems an odd recipe for lowering costs.

While the Register chastises the public for not seeing the health care reform bill through rose-colored glasses, I on the other hand give the public credit. As the public has learned more, they are starting to realize that the law will raise insurance premiums, raise taxes, increase the deficit, and leave us in worse shape than ever. Like most Iowans, I have always supported genuine reform that streamlines the delivery of health care, lowers costs, and creates a sensible, fair market. This law does none of those things and should be repealed.

Facts You Won’t See on the Nightly News – Part 1

Letter to the Editor, Submitted 5/28/10 – Des Moines Register declined to publish

Two recent events leave me wondering if there is any accountability left in government. However, those same events leave me with no doubt about how a monstrosity of a health care bill that does more harm than good has become law.

Event one: In March, Governor Culver delayed the Wellmark Blue Cross and Blue Shield rate increase to allow an outside actuarial firm can review those rates (This, after his own insurance commissioner had already completed such a review). When the outside actuarial firm confirmed the rate increases were necessary, Governor Culver announced he was “disappointed” that Wellmark’s rate increases were justified.

Hmm.

I’d like to ask the Governor just what disappointed him the most? That Wellmark wasn’t trying to cheat customers and actually knows how to price health insurance? Or the fact that Wellmark needing an 18 percent increase runs counter to the only narrative he and other politicians subscribe to – that the health care problems in this country are due to greedy insurance companies, not to rising costs of health care itself.

Governor Culver took the easy way out by creating a scapegoat out of an insurance carrier. But by focusing only on the insurance industry – instead of the primary drivers of health care costs – he has contributed to the illogical political environment that resulted in 2,500 pages of national insurance reform, which will do virtually nothing to lower health care costs.

It is absolutely true that some health insurance reform was needed. But what was needed could have been written in two pages instead of 2,500 (e.g., no more underwriting, pre-existing conditions, or insurance rescissions). The remaining 2,498 pages could have been devoted to reforms that would actually lower costs – things like tort reform, real wellness subsidies (50 percent of health care costs are attributable to preventable behaviors), and outcome-based reimbursement strategies.

Event two occurred Wednesday morning (May 26) when Senator Harkin sent an email to those who have contacted him regarding health reform. The email extolled the virtues of the new health care reform law and included one important quote:

The PPACA also establishes a process to annually review premium increases before they go into effect, as well as to require public disclosure of how the premium rates were determined. Just recently we saw the benefits of rate review in Iowa, when Wellmark Blue Cross Blue Shield attempted to raise premium rates by 30 percent. A review of these rates by the Iowa Insurance Commissioner found the hike unreasonable; as a result, the proposed increase was cut by one third, and implementation of the increase was delayed by 30 days, the longest delay available under state law.

Perhaps Senator Harkin’s staff wrote this email on “opposite day.” What the Senator sent to thousands of Iowans was an intentional deception and a thinly-veiled attempt to curry favor for a disastrous piece of federal legislation that will place extraordinary burdens on individuals and small businesses. Most important, it was a fabrication that ignores the real cost drivers behind health care.

It is unfortunate that Wellmark needed an 18 percent increase on their individual business in Iowa. And today’s high health insurance premiums create real hardships for individuals and businesses alike. No one understands that better than I do. But if we are ever going to find real solutions – solutions that would lower costs and improve quality – we need to focus on the real issues and stop with the political nonsense.

Weekly Round-Up – April 30, 2010

Take Action: NAHU’s Operation Shout

Just one month after the Patient Protection and Affordable Care Act was passed, there are more efforts in Congress that would place tighter restrictions and higher costs on the private health insurance industry.

NAHU is organizing a campaign to oppose the Health Insurance Rate Authority Act that would allow the federal government to block “unreasonable” health insurance premium increases. This action would effectively ignore treatment costs that drive premium rates.

• Click here to take part in Operation Shout, opposing this proposed legislation.

25 Ways Health Reform Impacts Small Business

Do you have small employers asking you how the health reform bill will affect them? Although there are few details about specific provisions in the bill, here is a short video of 25 ways the new legislation will affect small businesses.

CLASS Act: How It Can Benefit Private Long-Term Care

We are also beginning to learn more about the CLASS Act, which will mandate Long-Term Care coverage for all. The program would be paid for by taxes deducted from paychecks. Employers will be required to enroll all employees, unless the individual employee opts out.

The CLASS Act would:

• Provide coverage of $50 to $100 a day for Long-Term Care services.
• Guarantee coverage (no underwriting).
• Only be available after five years of paying premiums.

It is expected that the Long-Term Care coverage provided by the CLASS Act will be more expensive and provide less coverage than a private LTC policy.

However, the CLASS Act will provide great opportunity for the private industry in the way of creating interest in the market.

Click here to read about how the private insurance industry can take advantage of the CLASS Act.

Weekly Round-Up – April 16, 2010

Yes, it’s true – we missed posting the Weekly Round-Up last week. That doesn’t mean important things didn’t happen – we just fell a little behind. Catch up on this week’s reform news with us now.

In honor of Tax Day yesterday, this week’s first articles focus on the new taxes the PPACA contains:

• Tax Provisions of the Health Reform Legislation
  From taxes on the insurance industry to nonprofit hospitals, a legal breakdown of the taxes written into the bill. Courtesy Lexology
• Obamacare Will Make Every Day Feel Like April 15
  A more opinionated summary of the taxes that will affect middle-class familes. Courtesy the Washington Examiner

NAIFA’s Summary – What You Need to Know About the New Health Law

NAIFA recently published a more detailed summary to help you explain to customers the provisions of the law that will go into effect his year:

• Small Business Tax Credit (Effective now)
• Retiree Reinsurance Program (Effective 6/23/10)
• Dependent Coverage Extended to Age 26 (Effective 9/23/10)
• No Lifetime Limits (Effective 9/23/10)
• No Pre-Existing Condition Exclusions for Dependent Children (Effective 9/23/10)

Temporary High-Risk Pools to Start in July

Two weeks ago, Secretary of Health and Human Services Kathleen Sebelius, made an announcement about one of the first parts of the bill to be enacted – the temporary high-risk pools. Each state was asked to opt-in to participating in the pool meant to cover individuals who are currently uninsured and have pre-existing conditions.

Thirty-five states (including Iowa, with HIP-Iowa) already have a high-risk pool to provide coverage. Unfortunately, as the bill is written, high-risk individuals already in programs like HIP-Iowa would not be able to join the federal pool (you must be uninsured for six months). To date, Georgia is the only state to reject participation in the federal high-risk pool.

The Wrong Kind of Disappointment…

Let me see if I get this straight. Governor Culver is “disappointed” that Wellmark’s rate increases were justified.
 
Hmmm.
 
I’d like to ask the Governor just what disappointed him the most? That Wellmark wasn’t trying to cheat customers and actually knows how to price health insurance?  
 
Or was it the fact that Wellmark actually does need an 18% increase runs counter to the only narrative he subscribes to—that the health care problems in this country are due to greedy insurance companies, not due to the rising costs of health care itself.
 
Newsflash, governor! When 90% of premiums go to pay for actual medical care, premium increases are required when the cost of care goes up.
 
But by focusing on insurance companies, instead of what actually drives health care costs up, he’s contributed to the ridiculous political environment that exists today and that resulted in 2,500 pages of national insurance reform that will do nothing to actually lower costs.
 
Look, some health insurance reform was needed. But what was needed could have been written in two pages instead of 2,000. (e.g., no more underwriting, pre-ex, or rescissions). Then, the rest of the law could have been devoted to reforms that would actually lower costs—things like tort reform, real wellness subsidies (50% of health care costs are attributable to preventable behaviors), and outcome-based reimbursement strategies.
 
Maybe what Governor Culver should be disappointed about is that his politically motivated charade deflected attention from the real issues that need to be addressed. Or that he gave false hope to thousands of Iowans. Or that he cost Wellmark perhaps $500,000 in administrative costs and over $5,000,000 in lost premium to comply with his pointless request. I wonder who will end up paying for that?

It’s unfortunate that Wellmark needs an 18% increase. And today’s high health insurance premiums create real hardships for individuals and businesses alike. No one understands that better than I do. But if we are ever going to find real solutions—solutions that would lower costs and improve quality—we need to focus on the real issues. And stop with the political nonsense.

What’s All of This Going to Cost Again?

Ever heard the saying that if it’s too good to be true, then it’s probably not true?  That’s exactly how I felt when I first read about the cost projections for the health care reform legislation. 

Let’s see…it expands coverage to an additional 32 million people, provides subsidies for entire new classes of individuals…and yet it lowers the deficit by $143 billion over the first 10 years.  What a neat trick! Especially since the bill is projected to cost $940 billion dollars in the first 10 years.  

So how, exactly, can a bill cost that much but still lower the deficit?  Well, for starters, the bill includes $438 billion dollars in new taxes. (Funny how it wasn’t promoted as a massive tax increase, when in fact, that’s exactly what it was.) The rest of the “savings” will supposedly come from $500 billion in savings from the Medicare program. I guess I will believe that when I see it.

But getting back to the costs… the bill is projected to cost $940 billion dollars. So how has the government done in the past when projecting the future cost of health care programs? Some examples:

In 1965, when Congress established a national Medicare program, the House Ways and Means Committee estimated that the hospital insurance portion (Part A) would cost about $9 billion annually by 1990. Good guess!  But the actual cost for Part A in 1990 was $67 billion. Oops!  Seems as though the costs were 740% higher than the projections.

In 1967, just after Medicare Part B was added, the House Ways and Means Committee predicted it would cost about $12 billion in 1990. Actual costs in 1990? $110 billion!  Double oops!  Missed it by almost 1,000% that time.

Multiple additional examples abound.

So fast forward 10 or 20 years.  Where will we be if the costs estimates for this bill are as underestimated as they have been for previous health care bills? In other words, what if instead of almost 1 trillion dollars, the bill ends up costing almost $10 trillion in its first 10 years? Or more?

It sounds crazy until you consider the track record. And if that happens, instead of lowering the deficits, this bill would explode the deficits beyond imagination.

Again, health care reform is needed. But this bill does almost nothing to contain health care costs…which is the primary problem. And…you read it here first…unless this bill is altered, the deficits is runs up will strangle this country’s budget for the foreseeable future.

Weekly Round-Up – April 2, 2010

Updated: At 11:30 today, Director of the Dept. of Health and Human Services Kathleen Sebelius will make an announcement about the temporary high-risk pool meant to provide emergency funds to cover those who are uninsured and have pre-existing conditions.

Details of how individual components of the PPACA will be carried out are few and far between. Yet, everywhere you look, people are discussing the pros and cons of reform. Simply put, health reform is a BFD (Thanks, Joe Biden).

Here’s a round-up of the latest news and opinions:

• Updated Timeline – Shows when components of the law will go into effect. The timeline takes into consideration the “fixes” passed by the House and Senate after the bill passed. Courtesy Kaiser Family Foundation
• Wellness: What Is and Isn’t Included – Not all of the wellness components talked about are in the final bill. Courtesy Health Promotion Advocates
• Mitt Romney for Health Czar – Newsweek’s opinion article about why Mitt Romney would be a good leader of reform efforts.
• Reform Dominates the News – Statistics showing how much media attention reform is getting. Courtesy Pew Research Center

Would you like to share your favorite articles from the week? Add them in the comments.

Weekly Round-Up – March 26, 2010

We’re wrapping up a week of historic news on health insurance reform. Here is some of the week’s best information for independent agents.

• Top 10 Facts About Reform – An unbiased overview of the bill that has passed. Courtesy PolitiFact.com
• Small Business’ Opinion of Reform – The National Federation of Independent Business is outspoken against reform. Read their arguments before talking to clients. Courtesy NFIB
• Big I Summary – The Big I’s view of the bill and how it will affect agents. Courtesy IIAI
• Wellness Efforts in the Bill – Although wellness should be a larger part of the bill, read about what was included here. Courtesy IowaPolitics.com
• Full Text of H.R. 4872 – Few people have read the entire 2,000+ page bill. But if you want to… Courtesy the Library of Congress

Have any resources to add? Link them in the comments!

No Changes Until 2014, Right? Wrong.

The majority of the provisions in the recently-passed Patient Protection and Affordable Care Act don’t take effect until January 1, 2014. But handful of them will be enforced by the end of this year.

Here are the changes you need to be familiar with:

Individual Insurance

• Children up to the age of 26 will be able to stay on their caregiver’s insurance plan.
• Individuals with pre-existing conditions will be eligible for temporary, federally funded “high-risk” insurance.
• Health plans will be prohibited from denying children with pre-existing conditions.
• Plans will be barred from setting lifetime coverage caps.
• Plans will no longer be able to rescind policies, except in cases of fraud.

Group Insurance

• Small business (fewer than 25 employees and average annual wages less than $50,000) will be eligible for tax credits of up to 35%.

The Big I of Iowa has offered a timeline of these and more of the main provisions of the legislation.

Wellness..that’s just crazy enough that it might work

50% of our country’s health care costs can be attributed to preventable behaviors – namely, tobacco use, inactivity, and poor eating habits. It’s tough to admit, but true: as a general population, we are remarkably unhealthy. So, while our country debates national health care reform and tries to develop ways to reduce costs, it is irresponsible to ignore the benefits of wellness and health improvement.

 Wellness and health improvement efforts are the best long-term way to deal with the number one issue releated to health care–cost!  By reducing the need for much of the healthcare we receive today, wellness can lower costs for everyone. 

But why is it so difficult to recognize health improvement as the real answer? Because it’s not a quick fix. And too much of what is being debated seems focused on quick fixes that are not actually there.

 While there are Americans who desperately need relief from catastrophic medical bills, health care reform must include tax incentives that encourage schools and workplaces  to create a culture of wellness and invest in health improvement programs. If we don’t create a plan for genuine wellness now, we’ll continue spending money on a broken system.