Daily Archives: October 5, 2013

Lower Health Insurance Premiums to Come at Cost of Fewer Choices

Purchasing coverage on the exchange? Be careful out there. Lower Health Insurance Premiums to Come at Cost of Fewer Choices – NYTimes.com. And also, what lower health insurance premiums?

When insurance marketplaces open on Oct. 1, most of those shopping for coverage will be low- and moderate-income people for whom price is paramount. To hold down costs, insurers say, they have created smaller networks of doctors and hospitals than are typically found in commercial insurance. And those health care providers will, in many cases, be paid less than what they have been receiving from commercial insurers.

Some consumer advocates and health care providers are increasingly concerned. Decades of experience with Medicaid, the program for low-income people, show that having an insurance card does not guarantee access to specialists or other providers.

Consumers should be prepared for “much tighter, narrower networks” of doctors and hospitals, said Adam M. Linker, a health policy analyst at the North Carolina Justice Center, a statewide advocacy group.

“That can be positive for consumers if it holds down premiums and drives people to higher-quality providers,” Mr. Linker said. “But there is also a risk because, under some health plans, consumers can end up with astronomical costs if they go to providers outside the network.”

As an example, Children’s Hospital is not in the Anthem BCBS network in Colorado. Since my daughter has had 7 multi-day visits there and numerous other expenses, they are not an option for my family. If your shopping on the exchange you need to take network participation and potential out of network charges seriously.

Also, to repeat myself, the only reason to purchase on the exchange is if you are eligible for a subsidy. There is a broader array of plans, some with full nationwide networks available off the exchange. These are the same guaranteed issue plans with that meet the Bronze, Silver, Gold and Platinum acturial value levels.

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Cost of Obamacare

From the Mercatus Institute at George Washington University:

 

One of the motivating principles underlying passage of the Affordable Care Act (ACA) was that comprehensive health care reform would substantially improve the federal fiscal outlook. But new research finds the ACA falls well short of that standard. Relative to previous law, the ACA both exacerbates projected federal deficits and increases an already unsustainable federal commitment to health care spending.

Download (PDF, 2.59MB)

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Obamacare prices: Expensive or cheap?

Opinions vary – Obamacare prices: Expensive or cheap? – Oct. 4, 2013.

 

This example sounds like a potential “family glitch” issue:

But for Deb Hornbacher, 58, the high deductibles are just too much for her and her husband. While she’s enrolled in her employer’s plan, the Colorado couple can’t afford to extend the coverage to her husband, a self-employed carpenter.

So she was hoping to sign them both up for a plan on the exchange if they qualify for a federal subsidy. She found a bronze-level plan for roughly $357 a month, after their subsidy, which they could swing. But it comes with a $12,600 family deductible. (If they don’t qualify for a subsidy, they would pay nearly $1,275 on the exchange for that policy.)

“This is like a catastrophic plan, said Hornbacher, a public school nurse who pays more than $300 a month for coverage at work and will now look to add her husband for 2014. “I am totally shocked and taken aback at how little it did provide at the level I could afford.” To top of page

If Deb’s coverage is deemed “affordable” for ONLY her, but it DOES offer the option to add her husband then she is NOT SUBSIDY ELIGIBLE. It doesn’t matter that extending her school coverage to her husband is very expensive.

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Worst Law Passed in Four Decades

Obamacare: Worst Law Passed in Four Decades Must Be Stopped, Says Stockman | Daily Ticker – Yahoo Finance. (video at link)

So why should it be repealed?

It is the worst law ever passed in the last four decades by the federal government,” Stockman argues in the video above. “It is a massive entitlement to end all entitlements. It is going to cause a fiscal hemorrhage that is not even yet anticipated. It will tie up one-sixth of GDP in the most monstrous, massive, bureaucratic snarl that you can’t imagine. So therefore this needs to be stopped before it becomes operational.”

Lauren Lyster goes on to note…

Healthcare consultants like Jon Kingsdale — who helped set up some of the state exchanges — say these online Obamacare insurance “stores” will affect only the 5% to 10% of Americans who are uninsured (where they can now shop for insurance with transparency). Americans who purchase insurance this way qualify for government subsidies so that monthly premiums are not more than 9.5% of their income.

This is only partially true. Everyone who has an individual insurance plan IS affected. I repeat, EVERYONE who has an individual insurance plan IS affected. Ok, ok, one exception, if you purchased a plan prior to March 23rd, 2010 it has grandfathered status. But lets move on….

If you have an individual plan, regardless of income, it will either terminate or changed into an Obamacare Qualified Plan (QHP) sometime in 2014. The list price of your coverage will SOAR. Perhaps you will qualify for a subsidy but there are lots of loopholes such as:

  • Family glitch
  • CHP+ for children
  • Medicaid if your income is below 133% or 100% of the Federal Poverty Level depending on the state

There is also the issue of potential partial subsidy recapture if your income increases during the year OR even worse, a TOTAL subsidy recapture if you income ends up above the 400% FPL threshold for the year. That recapture can be quite high if you live in a region with high insurance costs, such as the resort area here in Colorado.

Getting back to David Staockman’s concern, Obamacare is an ever expanding ever growing entitlement. It does nothing to control costs except make sure that most of the plans offered on the exchange have small doctor/facility networks so it will be very easy to be out of network. Furthermore, the out of network coverage will be substantially less favorable than what is found today. So when the government gets around to trying to control costs, the blunt knife of government will only result in worse care for all and a very broken system.

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How Will Uncle Sam Enforce the Individual Mandate?

How Will Uncle Sam Enforce the Individual Mandate? | Fox Business.

The penalty…

Under the law, every individual in the country must obtain coverage by the end of open enrollment period on March 31, 2014. After that point, the government will implement the mandate, which charges those without insurance a fee of $95 in 2014, or 1% of their annual income, whichever is higher. The IRS will determine and implement the size of the fine via tax filings.

The penalties for failing to have coverage will continue to climb to up to 2.5% of annual income by 2016, a move lawmakers designed to push more people into the health insurance marketplaces, but many experts question the effectiveness of a mandate.

Note, the penalty is 1% of your adjusted gross income ABOVE the tax filing threshold for your household size.

Because there are no criminal charges associated with not purchasing health insurance, and offenders only face a $95 fee, Larry Kocot, visiting fellow at the Brookings Institution, says some individuals many not feel obligated to get coverage.

“It’s a decision individuals will have to make—there will be bigger consequences for dishonesty,” Kockot says. “The payment is not subject to criminal penalties, liens or levies. Essentially, the government can issue you a notice of payment or can collect this from your tax return.”

Honesty on tax filings will depend on how much the taxpayer fears the IRS, says Herrick.

“Because there are only civil penalties, it’s not quite the same as lying on your taxes,” he says. “You can’t go to jail for lying about having health coverage.”

Keep in mind that you can drop coverage whenver you want BUT you can only obtain coverage during open enrollment. Coverage is not immediate, so you can’t call in during the ambulance ride to the hospital!

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