TPA-Benefits

The Big Things

2011-02-21T19:27:00.004-05:00

"For 20 years, governors have come into this room and lied to you. Promised you benefits that they had no way of paying for, making promises they knew they couldn’t keep, and just hoping they were the man or women who wouldn’t be holding the bag.

I understand why you feel angry and betrayed and deceived by those people. Here is what I don’t understand – why are you booing the first guy who came in here and told you the truth."

Gov. Chris Christie, speaking to a NJ firefighters convention

Story from which this quotes comes from is at about the 5:45 mark in the video below.

Federal Government's Biggest Job?

2011-02-19T16:03:00.005-05:00

Pop quiz. What's the biggest single job the federal government undertakes?
National defense? Nope.
Homeland security? Wrong.
Transportation? Not even close.
Law enforcement? No way.
Education? Getting colder.
Foreign aid? Are you kidding?
Nope, the biggest single thing the federal government does these days is ... cut checks.
Lots and lots and lots and lots of checks that go to individual citizens -- $2.3 trillion worth last year alone.

Read the rest of the article from aolnews.com

Is Free Really Better?

2011-02-13T08:59:00.002-05:00

Despite health care being free in Canada, businesses are popping up in Canada and the U.S. that cater to Canadians looking to avoid the long wait times for medical services.

"Cross Border Access has been helping Canadians book appointments and negotiate fees for a variety of procedures in upstate New York. Unlike Canadian companies that have popped up offering similar services, this American operation charges a $200-a-year membership fee and connects patients directly with service providers.

_________________________
As long as wait times remain as long
as they are, Canadians who have
resources will do what’s best
for their own particular health.
If that means going south
of the border, they will.”
_________________________

Noting U.S. health care is a free-market system, the same diagnostic imaging scan can cost anywhere from $900 to $2,000. He said most Canadians probably wouldn’t realize that when they look to the U.S. after learning it could take months for their CT scan, cancer treatment or knee replacement in Canada.

“We don’t take any money from health-care providers in the U.S. and we don’t give any money to Canadian health care providers who refer patients to us,” he added. “Our only source of revenue is the membership fees from patients.”

While few up-to-date studies examining the prevalence of medical tourism among Canadians exists, an Angus Reid poll earlier this year found 40 per cent of Canadians said they would pay out of pocket to jump the queue and 42 per cent would leave the country to seek treatment.

Canadian Medical Association president Jeffrey Turnbull describes it as a byproduct of the Canadian system failing to meet the needs of its citizens. “As long as wait times remain as long as they are or even worsen, Canadians who have resources will do what’s best for their own particular health,” he said. “If that means going south of the border or another jurisdiction outside of North America, they will.”

Meanwhile, Michael McBane of the Canadian Health Coalition… argues wait times are often exaggerated and that medical tourism raises concerns about continuity of care and the appropriateness of treatments that may not be approved in Canada."

Read the entire article at The Times Colonist

Is free really better if you cannot access the services you need in a timely manner?

Benefit Costs in the Private Sector

2011-02-08T16:38:00.003-05:00

"Employee benefits make up nearly 30% of compensation packages in the private sector, with insurance benefits comprising 8% of that total, according to 2010 research by the U.S. Bureau of Labor Statistics.

Overall, employers in the private sector allocated, on average, $19.68 per hour on wages and salaries, totaling 70.6% of compensation. BLS analysts found that legally required and insurance benefits constituted the largest benefits categories.

For example, private-sector employers spent $2.31 per hour worked on legally mandated benefits, which includes Social Security, Medicare, unemployment insurance and workers’ compensation. This category represented 8.3% of total compensation.

The majority of insurance costs ($2.24) stemmed from health insurance, which costs $2.10 per hour worked. The remaining balance was tagged for life, short-term disability and long-term disability. On the retirement side, defined benefit and defined contribution plans cost private-sector employers 99 cents, totaling 3.6% of total compensation.

Meanwhile, paid-leave benefits, such as vacations, holidays, sick leave and personal leave, averaged $1.88 per hour, which composed of 6.7% of total compensation. Supplemental compensation categorized as overtime and premium pay, shift differentials and non-production bonuses averaged 78 cents, totaling 2.8% of total compensation.

The research on benefits costs is outlined in the memo report Employer Costs for Employee Compensation for September 2010."

EBN

So mandated benefits (i.e. taxes) cost more than health insurance benefits (8.3% vs. 8%).

Real 'Change' Begins With Education

2010-12-14T07:16:00.004-05:00

"In 2008, Americans voted for Obama's change. Let's look at some of it.

Obama's Health and Human Services Secretary Kathleen Sebelius threatened that there would be "zero tolerance" for "misinformation" in response to an insurance company executive who said that ObamaCare would create costs that force up health insurance premiums.
_________________________

Keep in mind that the power to grant waivers
is also the power not to grant waivers.
_________________________

That's not only an attack on our constitutionally guaranteed free speech rights but an official threat against people who express views damaging to the administration.

Not to be outdone by his HHS secretary's attack on free speech, Obama wants full disclosure of the names of people who were backers of campaign commercials critical of his administration, saying that there has been a "flood of deceptive attack ads sponsored by special interests, using front groups with misleading names."

Disclosure would leave administration critics open to government and mob retaliation.

Obama and his congressional and union allies have lectured us that socialized medicine is the cure for the nation's ills, but I have a question. If socialized medicine, ObamaCare, is so great for the nation, why permit anyone to be exempted from it?"

Read the entire article by Walter Williams

One Opinion On Funding (?) Medicare

2010-11-29T16:02:00.004-05:00

I am behind in my reading, but I ran across this and thought it was worth passing on...

People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them.

- Jean Monnet

The simple reality is that if We the People of the US want Medicare, in even a reformed and more efficient manner, we must find a way to pay for it. It will not be cheap. Raising income taxes on the "rich" is not enough. You have to go back and raise income taxes on the middle class, too. Oh, wait, that will be a drag on the economy and consumer spending. And in any event it will not be enough.

The only real way to pay for those benefits will be a value-added tax, or VAT. And while it could be introduced gradually, let there be no mistake that it will be a drag on economic growth. Government spending does not have a multiplier effect on the economy. It is at best neutral. What creates growth is private investment, increases in productivity, and increases in population. That's it. Tax increases have a negative multiplier.

A significant VAT along with our current income taxes will give us an economy that looks more like the slow-growth, high-unemployment world of Europe. Can we figure out how to deal with that? Sure. But it is not growth-neutral.

Republicans in 2013 will be like the dog that caught the car. What do you do with it? The last time they (embarrassingly, we) really screwed it up. The defining political question of this decade will not be Iraq or Afghanistan, or the environment or any of a host of other problems. The single most important question will be what do you do with Medicare? Cut it or fund it? Reform it for sure, but reform is not enough to pay for the cost increases that will come from an increasingly aging Boomer generation.

There is no free lunch. At some point, you cannot run on "no cuts in Medicare" and "no new taxes" and be honest. At least not this decade. Maybe when we have cured cancer and Alzheimer's and heart disease and the common cold at some future point, medical costs will go down, but in the meantime we have to deal with reality.

You may be able to fool the voters, but you will not be able to fool the bond market. Not dealing with reality will create a very vicious response. Ask Greece.

And that is the national conversation we must have with ourselves. There is a cost to government. There is a cost to extended Medicare benefits. (I am blithely assuming we deal with all the "easy" stuff like Social Security, and make real cuts in other areas.)

And for my international readers, this is an issue that the entire developed world must deal with. We all have our problems created from years of very poor choices, overleveraging, and deficits. It will not be easy. I must admit to smiling when I see the protests in France over raising the retirement age from 60 to 62. Really? Amazing.

And while France causes me to smile and shake my head, the refusal on the part of the US leadership to give more than lip service to solutions that might disrupt their slim majority of voters is maddening.

This election next week will change very little in real terms, the things that matter, like whether the US economy can grow or will face a very real crisis and a true depression. That potential is in our future, and it is coming at us faster than you think.

John Mauldin
Thoughts from the Frontline Weekly Newsletter

Patients Should Pay Their Own Bills

2010-11-22T07:13:00.002-05:00

Big Spenders: Increases in health care costs rival the rising of the sun for inevitably. Should we blame greedy doctors and drugmakers? No, blame should be placed on the system the government has promoted.

The tax code encourages employers to buy health care insurance plans with pretax dollars. Because these plans are exempt from federal income and payroll taxes, employers salaries. Nearly 60% of American adults are covered by an employer-based plan.

For most, these plans work well. But the arrangement that so many have become accustomed to has driven health care spending ever higher. The cost of medicine increased 98% between 1992 and 2008, a period when the consumer price index rose 53%. Health care spending now makes up 17% of the economy, a far bigger slice than it did before the 1965 creation of Medicare and Medicaid, when it never went beyond 6%.

Why has this happened? Devon Herrick from the National Center for Policy Analysis has the simple answer: We have become big spenders on health care because our motivation to be thrifty has been legislated away.

"A primary reason why health care costs are soaring is that most of the time when people enter the medical marketplace, they are spending someone else's money," Herrick wrote in "Why Health Costs Are Still Rising," an NCPA report released last week.

Because Americans who have employer-based coverage see little money coming out of their pockets when they visit a doctor or go to the hospital, they have little incentive to keep costs down.

"When patients pay their own medical bills, they are conservative consumers," Herrick writes. "Economic studies and common sense confirm that people are less likely to be prudent, careful shoppers if someone else is picking up the tab."

According to Herrick, for every dollar of hospital care that is consumed, a patient pays only 3 cents. The rest is paid by a third party, the insurance company. When a patient visits a doctor, less than 10 cents of every dollar of care consumed is paid by the patient. Again, a third party pays the balance.

And "for the health care system as a whole, every time patients consume $1 in services, they pay only 12 cents out of pocket."

Medicare and Medicaid have also had an impact on spending, as they too are third-party payers that, similar to insurance plans, hide from patients the true cost of medicine.

To show what a health care sector without similar incentives looks like, Herrick turns to cosmetic surgery, the demand for which has exploded in recent years.

Citing American Society of Plastic Surgeons data, he says 1.7 million cosmetic surgical procedures were performed in 2008, "more than 40 times the number performed two decades ago." Yet cosmetic surgeons' fees, he says, have remained relatively stable, rising only 21% from 1992 to 2008.

The rather flat line of growth in spending on cosmetic surgery is due to the nature of the market. Almost all payments are made out of pocket by patients, which forces them to be wise consumers. It also requires doctors to compete on price.

The third-party payer problem that has forced costs higher was not addressed by ObamaCare. In fact, the Democrats' plan to bring down costs will only make the problem worse. Their chief goal is to increase the role of the third-party payer, that third party being the government, or, in the interim, the government and an insurance market under the central-planning thumb of Washington. Costs won't be going down.

The appropriate policy solution would be one that puts patients in control of their health care. It's obvious that the country needs more spending discipline, the kind that lets consumers, not the government, make their own choices on health care purchases. Let the market — consumers trading freely without coercion — solve the problem.

If Washington were to give health savings accounts the same tax treatment afforded employer-based insurance, exempting them from federal income and payroll taxes, the incentive for consumers to ration their own care would slow the rise in health care spending. This is something Republicans need to consider as the new Congress starts to dismantle ObamaCare.
IBD editorial

I Thought It Was Universal Health Care?

2010-11-15T07:52:00.002-05:00

Obama White House hands out 111 Obamacare waivers

"I don't think this is a question of the practicality of whether it works or does not work. This is a question of the law that was passed and then all of a sudden you have a bureaucracy that decides who gets the exemptions and who doesn’t. That is what is wrong. It is not fair. It is an outrageous procedure and they should have either passed it and it was universal for everybody or it isn’t for nobody."

Wayne Rogers

See the list here

It Doesn't Look That Bad...

2010-11-11T20:36:00.002-05:00

(Click image to enlarge)

Michael Ramirez, IBD

This Is A Level Playing Field?

2010-11-08T12:46:00.004-05:00

"The Obama administration said Friday it will cut premiums and upgrade coverage in a new health plan for people with medical problems, because enrollment has been disappointingly low." Initially, "government economists had projected that people turned down by private insurers would flock to the new Pre-Existing Condition Insurance Plan, with 375,000 expected to sign up this year," yet "as of this week, a little more than 8,000 had enrolled, officials said." This is due in large measure to the premiums, which "can range from $400 to $600 per month or more for people in their 40s and 50s."

So just because there are not enough people in the plan, the federal government can ARBITRARILY decide to REDUCE the premiums and make the benefits RICHER? How can they do this? Easy. Taxpayers subsidize the change.

And exactly how does a private health insurer compete on this supposed level playing fiield?

Spending Other People's Money

2010-09-28T12:37:00.003-04:00

Is it any wonder health care costs continue to rise? Census data clearly shows the #1 reason why medical costs have risen, and will continue to rise: Our out-of-pocket payments for medical costs have been falling for the last fifty years, and will fall below 10% by 2017 according to projections.

When we spend less than 10 percent of our own money on health care costs, one outcome is almost 100% inevitable: health care costs will continue to rise. The incentive to reduce cost is greatly reduced when someone else is paying most of the bill.

The Will Of The People?

2010-08-04T07:19:00.003-04:00

Missouri voters reject key provision of health care law
"with about 70 percent of the vote counted late Tuesday, nearly three-quarters of voters threw their support behind a ballot measure, Proposition C, that would prohibit the government from requiring people to have health insurance or from penalizing them for not having it." The measure "would conflict with a federal requirement that most people have health insurance or face penalties starting in 2014."

Washington Post

Anthem Teams Up With Google Maps

2010-07-22T07:28:00.002-04:00

With hospital emergency departments luring patients by advertising short wait times, the state's largest health insurer is asking its members to consider cheaper care at urgent-care centers and in-store clinics when appropriate.

Anthem Blue Cross Blue Shield in Virginia yesterday launched a Google Maps tool on its website that lets consumers search for options such as MinuteClinic, Patient First and doctor's offices that take unscheduled walk-ins.

"From our perspective, if you have a true emergency, the best place to be is the emergency room," said Dr. Jay Schukman, Anthem's regional vice president and medical director.

"But for those conditions where it could be treated in an urgent-care center or a physician's office, that's the most appropriate place to go," Schukman said.

Anthem officials say a review of the plan's fully insured members' ER use for 2008 found that more than 60 percent of visits were "avoidable visits" or visits for problems that could have been treated in an urgent-care or other setting.

Anthem is advising plan members that some conditions, including sore throat, sprains and strains, minor headaches, ear or sinus pain, minor animal bites, stitches and minor allergic reactions, generally can be treated in less expensive settings.

HCA Virginia and Bon Secours Richmond health systems promote short ER waits.

Bon Secours promotes "no wait" emergency care at St. Mary's, St. Francis, Memorial Regional and Richmond Community.

In May, HCA Virginia's Chippenham, Johnston-Willis, Henrico Doctors' and John Randolph hospitals began posting the estimated ER wait times on the hospitals' websites. The estimated times also are displayed on electronic billboards around the metro area.

The Anthem review found the average cost of an ER visit was $441, compared with $98 for urgent-care centers and $52 for clinics inside stores. These costs include what the patient and health plan paid.

"There are times when I am sure [the patient] will get charged the full fare," Schukman said. "There are some hospitals that will transition you over to their urgent-care area as opposed to their emergency area, but generally speaking the charges there are still higher than going to an urgent-care center . . . or a physician's office or a retail health clinic."

Schukman said people may go to emergency rooms out of habit or convenience.

Hospitals get a significant share of their inpatients from people who get admitted from emergency department visits.

"We encourage [patients] to learn when to go to primary care, when to go to emergency care and when to go to urgent care," said Dr. James Dudley, an emergency physician at Riverside Tappahannock Hospital.

"It's important to remember that the [emergency room] is the only place that's always there," said Dudley, a former president of the Virginia chapter of the American College of Emergency Physicians.

In the new Anthem initiative, patients can go to an Anthem website, plug in an address and find nearby retail clinics and urgent-care centers. The website also advises consumers that they can call Anthem's 24-hour nurse information line for guidance.

Anthem also is reaching out to doctor's offices, spokesman Scott Golden said.

"A lot of times they may get a call after hours, and I think the standard response was 'Well, if you feel it's an emergency, go to the emergency room,' which by all means everybody should," Golden said.

The outreach to doctors will focus on medical situations where urgent care and retail clinics are options.

Richmond Times-Dispatch

Atlas Shrugged's Timeless Moral: Profit-Making Is Virtue, Not Vice

2010-07-21T07:51:00.004-04:00

In the years leading up to 2008—09's financial meltdown, government control over mortgages, interest rates and America's banking system was at an all-time high.

And yet when crisis struck, free enterprise took the blame.
_________________________

I work for nothing but my own profit — which
I make by selling a product they need to men
who are willing and able to buy it. ...
I do not sacrifice my interests to them
nor do they sacrifice theirs to me;
we deal as equals by mutual consent
to mutual advantage.

_________________________

The cure, therefore, was to give government even wider powers. Washington can now bail out any company, fire CEOs, override contracts and print billions of dollars to "stimulate" the economy — all in the name of the public interest. The result? Our deficits and debt continue to mount, and there's a real possibility of a future like Greece's.

This is the state of our world today. It's remarkably similar to the state of the world in Ayn Rand's "Atlas Shrugged," a mystery story about a future America whose economy is disintegrating and whose government is accumulating power faster than anyone thought possible. This parallel is a big reason a record 500,000 people bought "Atlas Shrugged" last year.

Read the rest of the editorial by Yaron Brooks on Investor.com.

Worse Than A Zero Sum Game

2010-07-08T17:04:00.002-04:00

"When it comes to higher unemployment benefits or any other stimulus spending, the resources given to the unemployed have to be taken from someone else. There isn't a "tooth fairy.” The government doesn't create resources, it redistributes them. For everyone who is given something there is someone who has that something taken away.

While the unemployed may spend more as a result of higher unemployment benefits, those people from whom the resources are taken will spend less. In an economy, the income effects from a transfer payment always sum to zero. Quite simply, there is no stimulus from higher unemployment benefits.

To see this, imagine an economy that produces 100 apples. If 10 of those apples are given to the unemployed, then people who otherwise would have had those 10 apples now won't. The stimulus of 10 apples for the unemployed is exactly offset by the destimulus of 10 apples for those people from whom the 10 apples were taken.

Given the massive inefficiencies the government creates in securing resources from the private sector, there may also be a large negative income effect over wide ranges of stimulus spending. This is the proverbial "toll for the troll." These massive inefficiencies could lead to lower output.

To see these effects clearly, imagine a two person economy in which one of the two people is paid for being unemployed. From whom do you think the unemployment benefits are taken? The other person obviously. While the one person who is unemployed may "buy" more as a result of unemployment benefits, the other person from whom the unemployment sums are taken will "buy" less. There is no stimulus for the economy.

But it doesn't stop there. While the income effects sum to zero, the substitution effects aggregate. The person from whom the unemployment funds are taken will find work less rewarding and will work less. The person who is given the unemployment benefits will also find work relatively less rewarding and will therefore work less. Both people in this two-person economy will be incentivized to work less. There will be less work and more unemployment.

Not only will increased unemployment benefits not stimulate the economy, they will at the same time lower the incentives for people to work by reducing the amount people are paid for working and increasing the amount people are paid for not working. It's pretty basic economics."

Art Lafer in today's WSJ

IRS Sends Bill For $.039. Really?

2010-05-27T08:21:00.002-04:00

(Click on image to enlarge)

Breaking Down The Health Care Tax Credit For Small Biz

2010-04-26T15:57:00.004-04:00

by Alden J. Bianchi, Esq.

The recently enacted health care reform act—consisting of the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010—is a vast undertaking, with far reaching consequences.

At its core, the legislation imposes a diverse range of requirements on individuals, employers, health insurance carriers and health care provides for the purposes of expanding coverage, controlling spiraling health care costs, and increasing the quality of medical outcomes.

Background

Although the reform law’s substantive “employer responsibility” provisions generally do not apply to employers with fewer than 50 full-time equivalent employees, the law provides tax credits to certain “qualified small business employers” to encourage them to voluntarily offer health care coverage to their employees.

This provision of the reform law is referred to as the “small business health care tax credit.” The Internal Revenue Service recently issued a set of clear and helpful questions and answers that flesh out the requirements of the small business health care tax credit.

This guidance is both necessary and welcome, since the credit is effective on the date of the legislation’s enactment, so it’s already in effect.

Eligibility

Under the health reform law, the small business tax credit is available to each “qualified small business employer,” which means an employer with no more than 25 full-time equivalent employees (FTEs) (determined on a controlled group basis) employed during the employer’s taxable year, and whose employees have annual full-time equivalent wages that average no more than $50,000.

The full amount of the credit is available only to an employer with 10 or fewer FTEs, and whose employees have average annual fulltime equivalent wages from the employer of less than $25,000. These wage limits are indexed to the CPI-U for years beginning in 2014.

To be eligible for the subsidy, the eligible small employer must make a non-elective contribution on behalf of each employee who enrolls in a “qualifying health insurance” plan or program in an amount equal to a uniform percentage (not less than 50%) of the premium cost of the qualifying health plan.

The credit is equal to the applicable percentage of the small business employer’s contribution to the health insurance premium for each covered employee. Only non-elective contributions (i.e., not salary reduction contributions) by the employer are taken into account in calculating the credit.

The credit is equal to the lesser (i) the amount of contributions the employer made on behalf of the employees during the taxable year for the qualifying health coverage, and (ii) the amount of contributions that the employer would have made during the taxable year if each employee had enrolled in coverage with a benchmark premium (based on comparable group market coverage) multiplied by an applicable tax credit percentage.

The credit is reduced for employers with more than 10 FTEs, but not more than 25 FTEs. The credit is also reduced for an employer for whom the average wages per employee is between $25,000 and $50,000.

Other entities

Special rules apply to tax-exempt organizations that otherwise qualify for the credit under which the “applicable percentage” is reduced. Tax-exempt organizations are eligible to apply the tax credit against the organization’s liability as an employer for payroll taxes within certain limits.

Self-employed individuals, including partners and sole proprietors, 2% shareholders of an S Corporation and 5% owners of the employer are disregarded for purposes of the credit.

An employee of a self-employed individual is eligible for the credit if the employee performs services in the trade or business of the employer. (Thus, the credit is not available for a domestic employee of a sole proprietor of a business.) Nor may a sole proprietor receive credit for the owner and their family members.

Selected IRS clarifications

Set out below are some of the highlights of the FAQs:

* If an employer pays only a portion of the premiums for the coverage provided to employees under the arrangement (with employees paying the rest), the amount of premiums counted in calculating the credit is only the portion paid by the employer. (Q&A 3)

* For years before 2014, the “benchmark” premium, which is the average premium for the small group market in a state (or an area within the state), will be determined by the Department of Health and Human Services and published by the IRS. This guidance is expected to be posted on the IRS Web site by the end of April. (Q&A 4)

* Average annual wages are determined by first dividing the total wages paid by the employer to employees during the employer’s tax year by the number of the employer’s FTEs for the year, rounded down to the nearest $1,000. Wages for this purpose means FICA wages but without regard to the wage base limitation. (Q&A 10) Because the “25 or more employee” limitation is based on FTEs, an employer with 25 or more employees could qualify for the credit if some of its employees work part-time (e.g., an employer with 46 half-time employees has 23 FTEs and therefore may qualify for the credit). (Q&A 11)

* Neither family members of a business owner who work for the business, nor a member of a business owner’s household, count as employees. (Q&A 14) A “family member” is defined as a child (or descendant of a child); a sibling or step-sibling; a parent (or ancestor of a parent); a step-parent; a niece or nephew; an aunt or uncle; or a son-in-law, daughter- in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law.

* Employers claim the credit on the employer’s annual income tax return. (Q&A 16) So, an employer (other than a tax-exempt employer) generally cannot claim the credit if it has no taxable income for the year. However, an unused credit amount can generally be carried back (but not before the effective date of the legislation) one year and carried forward 20 years. (Q&A 17)

* In determining the employer’s deduction for health insurance premiums, the amount of premiums that can be deducted is reduced by the amount of the credit. (Q&A 20)

It remains to be seen whether the small business health care tax credit lives up to expectations. Even with the credit, medical coverage is still costly, and these rules are at least modestly complex from an administrative perspective. Small businesses that qualify for the credit, however, have a reliable and comprehensive set of rules to follow.

Alden J. Bianchi can be reached at ajbianchi@mintz.com.

Employee Benefit News Legal Alert is a free, weekly e-newsletter featuring articles from the nation’s leading benefits attorneys.

About the author
Alden J. Bianchi is the practice group leader of Mintz Levin’s employee benefits and executive compensation group.

Truer Words Were Never Spoken

2010-04-08T08:29:00.002-04:00

"According to the Tax Foundation, 60% of U.S. households were taking in more in benefits and services from government six years ago than they paid out in taxes. That will rise to 70% or more under President Obama's spending hikes.

At some point, there won't be enough independent and productive citizens to keep the freeloaders living in the luxury to which they've become accustomed."

IBD

"The trouble with Socialism is that eventually you run out of other people's money."

Margaret Thatcher

Repeal

2010-03-30T12:57:00.006-04:00

Why And How Obamacare Must Be Undone

In the days since the enactment of their health care plan, Democrats in Washington have been desperately seeking to lodge the new program in the pantheon of American public-policy achievements. House Democratic whip James Clyburn compared the bill to the Civil Rights Act of 1964. Vice President Biden argued it vindicates a century of health reform efforts by Democrats and Republicans alike. House speaker Nancy Pelosi said “health insurance reform will stand alongside Social Security and Medicare in the annals of American history.”

Even putting aside the fact that Social Security and Medicare are going broke and taking the rest of the government with them, these frantic forced analogies are preposterous. The new law is a ghastly mess, which began as a badly misguided technocratic pipe dream and was then degraded into ruinous incoherence by the madcap process of its enactment.

The appeals to history are understandable, however, because the Democrats know that the law is also exceedingly vulnerable to a wholesale repeal effort: Its major provisions do not take effect for four years, yet in the interim it is likely to begin wreaking havoc with the health care sector—raising insurance premiums, health care costs, and public anxieties. If those major provisions do take effect, moreover, the true costs of the program will soon become clear, and its unsustainable structure will grow painfully obvious. So, to protect it from an angry public and from Republicans armed with alternatives, the new law must be made to seem thoroughly established and utterly irrevocable—a fact on the ground that must be lived with; tweaked, if necessary, at the edges, but at its core politically untouchable.

But it is no such thing. Obamacare starts life strikingly unpopular and looks likely to grow more so as we get to know it in the coming months and years. The entire House of Representatives, two-thirds of the Senate, and the president will be up for election before the law’s most significant provisions become fully active. The American public is concerned about spending, deficits, debt, taxes, and overactive government to an extent seldom seen in American history. The excesses of the plan seem likely to make the case for alternative gradual and incremental reforms only stronger.

And the repeal of Obamacare is essential to any meaningful effort to bring down health care costs, provide greater stability and security of coverage to more Americans, and address our entitlement crisis. Both the program’s original design and its contorted final form make repairs at the edges unworkable. The only solution is to repeal it and pursue genuine health care reform in its stead.

From Bad to Worse

To see why nothing short of repeal could suffice, we should begin at the core of our health care dilemma.

Conservative and liberal experts generally agree on the nature of the problem with American health care financing: There is a shortage of incentives for efficiency in our methods of paying for coverage and care, and therefore costs are rising much too quickly, leaving too many people unable to afford insurance. We have neither a fully public nor quite a private system of insurance, and three key federal policies—the fee-for-service structure of Medicare, the disjointed financing of Medicaid, and the open-ended tax exclusion for employer-provided insurance—drive spending and costs ever upward.

The disagreement about just how to fix that problem has tended to break down along a familiar dispute between left and right: whether economic efficiency is best achieved by the rational control of expert management or by the lawful chaos of open competition.

Liberals argue that the efficiency we lack would be achieved by putting as much as possible of the health care sector into one big “system” in which the various irregularities could be evened and managed out of existence by the orderly arrangement of rules and incentives. The problem now, they say, is that health care is too chaotic and answers only to the needs of the insurance companies. If it were made more orderly, and answered to the needs of the public as a whole, costs could be controlled more effectively.

Conservatives argue that the efficiency we lack would be achieved by allowing price signals to shape the behavior of both providers and consumers, creating more savings than we could hope to produce on purpose, and allowing competition and informed consumer choices to exercise a downward pressure on prices. The problem now, they say, is that third-party insurance (in which employers buy coverage or the government provides it, and consumers almost never pay doctors directly) makes health care too opaque, hiding the cost of everything from everyone and so making real pricing and therefore real economic efficiency impossible. If it were made more transparent and answered to the wishes of consumers, prices could be controlled more effectively.

That means that liberals and conservatives want to pursue health care reform in roughly opposite directions. Conservatives propose ways of introducing genuine market forces into the insurance system—to remove obstacles to choice and competition, pool risk more effectively, and reduce the inefficiency in government health care entitlements while helping those for whom entry to the market is too expensive (like Americans with preexisting conditions) gain access to the same high quality care. Such targeted efforts would build on what is best about the system we have in order to address what needs fixing.

Liberals, meanwhile, propose ways of moving Americans to a more fully public system, by arranging conditions in the health care sector (through a mix of mandates, regulations, taxes, and subsidies) to nudge people toward public coverage, which could be more effectively managed. This is the approach the Democrats originally proposed last year. The idea was to end risk-based insurance by making it essentially illegal for insurers to charge people different prices based on their health, age, or other factors; to force everyone to participate in the system so that the healthy do not wait until they’re sick to buy insurance; to align various insurance reforms in a way that would raise premium costs in the private market; and then to introduce a government-run insurer that, whether through Medicare’s negotiating leverage or through various exemptions from market pressures, could undersell private insurers and so offer an attractive “public option” to people being pushed out of employer plans into an increasingly expensive individual market.

Conservatives opposed this scheme because they believed a public insurer could not introduce efficiencies that would lower prices without brutal rationing of services. Liberals supported it because they thought a public insurer would be fairer and more effective.

But in order to gain 60 votes in the Senate last winter, the Democrats were forced to give up on that public insurer, while leaving the other components of their scheme in place. The result is not even a liberal approach to escalating costs but a ticking time bomb: a scheme that will build up pressure in our private insurance system while offering no escape. Rather than reform a system that everyone agrees is unsustainable, it will subsidize that system and compel participation in it—requiring all Americans to pay ever-growing premiums to insurance companies while doing essentially nothing about the underlying causes of those rising costs.

Liberal health care mavens understand this. When the public option was removed from the health care bill in the Senate, Howard Dean argued in the Washington Post that the bill had become merely a subsidy for insurance companies, and failed completely to control costs. Liberal health care blogger Jon Walker said, “The Senate bill will fail to stop the rapidly approaching meltdown of our health care system, and anyone is a fool for thinking otherwise.” Markos Moulitsas of the Daily Kos called the bill “unconscionable” and said it lacked “any mechanisms to control costs.”

Indeed, many conservatives, for all their justified opposition to a government takeover of health care, have not yet quite seen the full extent to which this bill will exacerbate the cost problem. It is designed to push people into a system that will not exist—a health care bridge to nowhere—and so will cause premiums to rise and encourage significant dislocation and then will initiate a program of subsidies whose only real answer to the mounting costs of coverage will be to pay them with public dollars and so increase them further. It aims to spend a trillion dollars on subsidies to large insurance companies and the expansion of Medicaid, to micromanage the insurance industry in ways likely only to raise premiums further, to cut Medicare benefits without using the money to shore up the program or reduce the deficit, and to raise taxes on employment, investment, and medical research.

The case for averting all of that could hardly be stronger. And the nature of the new law means that it must be undone—not trimmed at the edges. Once implemented fully, it would fairly quickly force a crisis that would require another significant reform. Liberals would seek to use that crisis, or the prospect of it, to move the system toward the approach they wanted in the first place: arguing that the only solution to the rising costs they have created is a public insurer they imagine could outlaw the economics of health care. A look at the fiscal collapse of the Medicare system should rid us of the notion that any such approach would work, but it remains the left’s preferred solution, and it is their only plausible next move—indeed, some Democrats led by Iowa senator Tom Harkin have already begun talking about adding a public insurance option to the plan next year.

Because Obamacare embodies a rejection of incrementalism, it cannot be improved in small steps. Fixing our health care system in the wake of the program’s enactment will require a big step—repeal of the law before most of it takes hold—followed by incremental reforms addressing the public’s real concerns.

The Case for Repeal

That big step will not be easy to take. The Democratic party has invested its identity and its future in the fate of this new program, and Democrats control the White House and both houses of Congress. That is why the conservative health care agenda must now also be an electoral agenda—an effort to refine, inform, and build on public opposition to the new program and to the broader trend toward larger and more intrusive, expensive, and fiscally reckless government in the age of Obama. Obamacare is the most prominent emblem of that larger trend, and its repeal must be at the center of the conservative case to voters in the coming two election cycles.

The design of the new law offers some assistance. In an effort to manipulate the program’s Congressional Budget Office score so as to meet President Obama’s goal of spending less than $1 trillion in its first decade, the Democrats’ plan will roll out along a very peculiar trajectory. No significant entitlement benefits will be made available for four years, but some significant taxes and Medicare cuts—as well as regulatory reforms that may begin to push premium prices up, especially in the individual market—will begin before then. And the jockeying and jostling in the insurance sector in preparation for the more dramatic changes that begin in 2014 will begin to be felt very soon.

To blunt the effects of all this, the Democrats have worked mightily to give the impression that some attractive benefits, especially regarding the rules governing insurance companies, will begin immediately. This year, they say, insurance companies will be prevented from using the preexisting medical condition of a child to exclude that child’s parents from insurance coverage, and a risk-pool program will be established to help a small number of adults who are excluded too. Additionally, insurance policies cannot be cancelled retroactively when someone becomes sick, some annual and lifetime limits on coverage are prohibited, and “children” may stay on their parents’ insurance until they turn 26. Obamacare’s champions hope these reforms might build a constituency for the program.

But these benefits are far too small to have that effect. The preexisting condition exclusion prohibits only the refusal to cover treatment for a specific disease, not the exclusion of a family from coverage altogether, and applies only in the individual market, and so affects almost no one. More than half the states already have laws allowing parents to keep adult children on their policies—through ages varying from 24 to 31. And the other new benefits, too, may touch a small number of people (again, mostly in the individual market, where premiums will be rising all the while), but will do nothing to affect the overall picture of American health care financing. CBO scored these immediate reforms as having no effect on the number of uninsured or on national health expenditures.

The bill will also have the government send a $250 check to seniors who reach the “donut hole” gap in Medicare prescription drug coverage this year—and the checks will go out in September, just in time for the fall elections. But the checks will hardly make up for the significant cuts in Medicare Advantage plans that allow seniors to choose among private insurers for their coverage. Those cuts begin in 2011, but the millions of seniors who use the program will start learning about them this year—again, before the election—as insurance companies start notifying their beneficiaries of higher premiums or canceled coverage.

We are also likely to see some major players in health insurance, including both large employers and large insurers, begin to take steps to prepare for the new system in ways that employees and beneficiaries will find disconcerting. Verizon, for instance, has already informed its employees that insurance premiums will need to rise in the coming years and retiree benefits may be cut. Caterpillar has said new taxes and rules will cost the company $100 million in just the next year, and tractor maker John Deere has said much the same. Such announcements are likely to be common this year, and many insurers active in the individual market are expected to begin curtailing their offerings as that market looks to grow increasingly unprofitable under new rules.

These early indications will help opponents of the new law make their case. But the case will certainly need to focus most heavily on what is to come in the years after this congressional election: spending, taxes, rising health care costs, cuts in Medicare that don’t help save the program or reduce the deficit, and a growing government role in the management of the insurance sector.

The numbers are gargantuan and grim—even as laid out by the Congressional Budget Office, which has to accept as fact all of the legislation’s dubious premises and promises. If the law remains in place, a new entitlement will begin in 2014 that will cost more than $2.4 trillion in its first 10 years, and will grow faster than either Medicare or private-sector health care spending has in the past decade.

Rather than reducing costs, Obamacare will increase national health expenditures by more than $200 billion, according to the Obama administration’s own HHS actuary. Premiums in the individual market will increase by more than 10 percent very quickly, and middle-class families in the new exchanges (where large numbers of Americans who now receive coverage through their employers will find themselves dumped) will be forced to choose from a very limited menu of government-approved plans, the cheapest of which, CBO estimates, will cost more than $12,000. Some Americans—those earning up to four times the federal poverty level—will get subsidies to help with some of that cost, but these subsidies will grow more slowly than the premiums, and those above the threshold will not receive them at all. Many middle-class families will quickly find themselves spending a quarter of their net income on health insurance, according to a calculation by Scott Gottlieb of the American Enterprise Institute.

Through the rules governing the exchanges and other mechanisms (including individual and employer insurance mandates, strict regulation of plan benefit packages, rating rules, and the like), the federal government will begin micromanaging the insurance sector in an effort to extend coverage and control costs. But even CBO’s assessment does not foresee a reduction in costs and therefore an easing of the fundamental source of our health care woes.

To help pay for the subsidies, and for a massive expansion of Medicaid, taxes will rise by about half a trillion dollars in the program’s first 10 years—hitting employers and investors especially hard, but quickly being passed down to consumers and workers. And the law also cuts Medicare, especially by reducing physician and hospital payment rates, by another half a trillion dollars—cuts that will drastically undermine the program’s operation as, according to the Medicare actuary, about 20 percent of doctors and other providers who participate in the program “could find it difficult to remain profitable and, absent legislative intervention, might end their participation.” And all of this, CBO says, to increase the portion of Americans who have health insurance from just under 85 percent today to about 95 percent in 10 years.

Of course, this scenario—for all the dark prospects it lays out—assumes things will go more or less as planned. CBO is required to assume as much. But in a program so complex and enormous, which seeks to take control of a sixth of our economy but is profoundly incoherent even in its own terms, things will surely not always go as planned. The Medicare cuts so essential to funding the new entitlement, for instance, are unlikely to occur. Congress has shown itself thoroughly unwilling to impose such cuts in the past, and if it fails to follow through on them in this case, Obamacare will add hundreds of billions of additional dollars to the deficit. By the 2012 election, we will have certainly begun to see whether the program’s proposed funding mechanism is a total sham, or is so unpopular as to make Obamacare toxic with seniors. Neither option bodes well for the program’s future.

Some of the taxes envisioned in the plan, especially the so-called Cadillac tax on high-cost insurance, are also unlikely to materialize quite as proposed, adding further to the long-term costs of the program. And meanwhile, the bizarre incentive structures created by the law (resulting in part from the elimination of the public insurance plan which was to have been its focus) are likely to cause massive distortions in the insurance market that will further increase costs. The individual market will quickly collapse, since new regulations will put it at an immense disadvantage against the new exchanges. We are likely to see significant consolidation in the insurance sector, as smaller insurers go out of business and the larger ones become the equivalent of subsidized and highly regulated public utilities. And the fact that the exchanges will offer subsidies not available to workers with employer-based coverage will mean either that employers will be strongly inclined to stop offering insurance, or that Congress will be pressured to make subsidies available to employer-based coverage. In either case, the program’s costs will quickly balloon.

Perhaps worst of all, the law not only shirks the obligation to be fiscally responsible, it will also make it much more difficult for future policymakers to do something about our entitlement and deficit crisis. Obamacare constructs a new entitlement that will grow more and more expensive even more quickly than Medicare itself. Even if the program were actually deficit neutral, which it surely won’t be, that would just mean that it would keep us on the same budget trajectory we are on now—with something approaching trillion-dollar deficits in each of the next 10 years and a national debt of more than $20 trillion by 2020—but leave us with much less money and far fewer options for doing anything about it.

In other words, Obamacare is an unmitigated disaster—for our health care system, for our fiscal future, and for any notion of limited government. But it is a disaster that will not truly get underway for four years, and therefore a disaster we can avert.

This is the core of the case the program’s opponents must make to voters this year and beyond. If opponents succeed in gaining a firmer foothold in Congress in the fall, they should work to begin dismantling and delaying the program where they can: denying funding to key provisions and pushing back implementation at every opportunity. But a true repeal will almost certainly require yet another election cycle, and another president.

The American public is clearly open to the kind of case Obamacare’s opponents will need to make. But keeping voters focused on the problems with the program, and with the reckless growth of government beyond it, will require a concerted, informed, impassioned, and empirical case. This is the kind of case opponents of Obamacare have made over the past year, of course, and it persuaded much of the public—but the Democrats acted before the public could have its say at the polls. The case must therefore be sustained until that happens. The health care debate is far from over.

Toward Real Reform

Making and sustaining that case will also require a clear sense of what the alternatives to Obama-care might be—and how repeal could be followed by sensible incremental steps toward controlling health care costs and thereby increasing access and improving care.

Without a doubt, the Democrats’ program is worse than doing nothing. But the choice should not be that program or nothing. The problems with our health care system are real, and conservatives must show the public how repealing Obamacare will open the way to a variety of options for more sensible reforms—reforms that will lower costs and help those with preexisting conditions or without affordable coverage options, but in ways that do not bankrupt the country, or undermine the quality of care or the freedom of patients and doctors to make choices for themselves.

Republicans this past year offered a variety of such approaches, which varied in their ambitions, costs, and forms. A group led by representatives Paul Ryan and Devin Nunes and senators Tom Coburn and Richard Burr proposed a broad measure that included reforms of Medicare, Medicaid, the employer-based coverage tax exclusion, and malpractice liability and would cover nearly all of the uninsured. The House Republican caucus backed a more modest first step to make high-risk pools available to those with preexisting conditions, enable insurance purchases across state lines, pursue tort reform, and encourage states to experiment with innovative insurance regulation. Former Bush administration official Jeffrey Anderson has offered an approach somewhere between the two, which pursues incremental reforms through a “small bill.” Other conservatives have offered numerous other proposals, including ways of allowing small businesses to pool together for coverage, the expansion of Health Savings Accounts and consumer-driven health care (which Obama-care would thoroughly gut), and various reforms of our entitlement system.

All share a basic commitment to the proposition that our health care dilemmas should be addressed through a series of discrete, modest, incremental solutions to specific problems that concern the American public, and all agree that the underlying cause of these problems is the cost of health coverage and care, which would be best dealt with by using market forces to improve efficiency and bring down prices.

The approach to health care just adopted by President Obama and the Democratic Congress thoroughly fails to deal with efficiency and cost, and stands in the way of any meaningful effort to do so. It is built on a fundamental conceptual error, suffers from a profound incoherence of design, and would make a bad situation far worse. It cannot be improved by tinkering. It must be removed before our health care crisis can be addressed.

If we are going to meet the nation’s foremost challenges—ballooning debt, exploding entitlements, out of control health care costs, and the task of keeping America strong and competitive—we must begin by making Obamacare history. We must repeal it, and then pursue real reform.

Yuval Levin is the editor of National Affairs and a fellow at the Ethics and Public Policy Center.

Originally published in The Weekly Standard

3 Reasons Healthcare Reform Won't Cut Deficit

2010-03-25T17:16:00.001-04:00

Their Results

2010-03-23T21:25:00.005-04:00

(Click image to enlarge)

"They (liberals) always get the benefit of creating these things... They don't want to be judged on their results. They only want to be judged on their good intentions."
Rush Limbaugh

Health Care Bullet Points

2010-03-19T09:57:00.002-04:00

(Click image to enlarge)

Michael Ramirez

March Madness Drains Economy!

2010-03-17T11:27:00.005-04:00

Thanks for Charlotte Jensen of Cole James Associates for allowing us to reproduce her article here.

March Madness is here!

The three-week basketball frenzy is estimated to cost U.S. employers over $1.5 billion in lost productivity. Despite this annual drain on productivity, many employers are willing to overlook the temporary distraction. Some employers even embrace the event by setting up TV's in the break room, having team spirit days, etc.

Whether it's March Madness or another sports tradition, if you are open to your employees engaging in sports activity on company time, there are a few things you should think about:

1. Betting on organized sports is largely illegal, and there are also laws concerning "social gambling", which would include a typical office pool. Even where there is tolerance for social gambling, it is vital that the "stakes" are low, all participants are on equal footing, and no one makes or earns anything other than the winner. The "host" of the pool does not get a cut and is a participant with the same odds as any other participant.

2. Reiterate to employees that company policies still apply. For example, if you have a policy against solicitation, employees should only invite participation outside of working hours. Other potential policy concerns include using Internet, email, copiers, etc., for non-business related (and potentially illegal) activity.

3. Participation must be completely voluntary, and no employee should be made to feel compelled to participate. "C'mon, it's only five bucks" is a loaded statement!

4. Regardless of the legal issues surrounding office pools, they are still a form of gambling and can bring ethical concerns to the workplace.

This is not a suggestion for or against stopping the "madness". It can be an excellent opportunity to build morale and camaraderie among employees, which is undeniably an essential element of employee retention and long-term productivity. There are, however, legal and ethical issues surrounding this annual tradition, and when it comes down to it, the seemingly harmless office pool is a form of gambling, and employers must do their part to protect their interests. While law enforcement may have far more important things to do than police the walls of your cubicles, there are cases where they've chosen to make an example out of a company. Don't let it be yours.

This is meant to be general information. Cole James Associates is not a law firm, and the above should not be considered legal advice, nor is it a replacement for seeking professional counsel for your specific situation.

Cole James Associates, Inc. provides Human Resources services and support to small and medium sized businesses. To learn more about these services, please visit their website or call (804) 339-5576.

Will This Get Equal Coverage (And Outrage)?

2010-03-17T11:00:00.002-04:00

We have all heard about the outrage of politicians and supporters of government-run health care in regards to Anthem Blue Cross of California and their recent rate hikes. "All they care about is profits!" "They don't care about the individual!" "It is all about the mighty dollar!"

We admit the health care system in this country is broken, but more government interference is NOT the answer. Want proof? Here is an article we ran across earlier today:

Pennsylvania Insurance Program Nearly Doubles In Monthly Cost.

The New York Times (3/17, A18, Urbina) reports, "Facing a sharp rise in costs, Pennsylvania has almost doubled the monthly bill for a state health insurance program for poor people who do not qualify for Medicaid and are on a waiting list for a less costly option." Beginning March 1, the cost of the AdultBasic program increased "to about $600 a month, up from $313 a month." But, "Joel Ario, the state insurance commissioner, said that while unavoidable, the price increase would probably make matters worse." He added that the program may become even more expensive if those most in need of coverage drop out of the program as a result of the rise.

So the same factors that caused the price increases for the profit-mongering mega-insurance company resulted in a larger increase in a state-run program?

We look forward to the US Health Secretary Kathleen Sebelius calling on the government officials in Pennsylvania to publicly explain why it raised premiums for some customers by almost double.

Quote Of The Day - From One Of Their Own

2010-03-17T07:37:00.001-04:00

"The average member of Congress – House and Senate – is first and foremost only a self-serving inconvenience-minimizer who doesn't have a lot of principle they stand on the first place. It doesn't take much to move a jellied spine, so they'll probably get their votes."

Dick Armey

New COBRA Subsidy Twist - Enough To Give You A Headache

2010-03-12T07:45:00.005-05:00

This is a great article from Employee Benefit News Legal Alert. It illustrates the complexity of the COBRA subsidy law with the newest twist of allowing a reduction in hours followed by a termination to trigger the COBRA subsidy. This twist is hard to explain, but the article does a good job of going through it and even has some examples. If you deal with COBRA as part of your job, this is a must read. For that reason, we have re-printed the entire article here as a way to archive it. Our thanks to the authors and Employee Benefits News for this information.

New law modifies COBRA subsidy rules

by John Hickman, Esq. and Ashley Gillihan, Esq.

On March 2, 2010, President Obama signed into law the Temporary Extension Act of 2010 (the “Act”). The Act contains several modifications to the COBRA subsidy rules originally included in the American Recovery and Reinvestment Act of 2009 and later modified by the Department of Defense Appropriations Act of 2010.

The following is a summary of those key modifications.

New sunset date

The Act changes the subsidy eligibility sunset date---the date on or before which the qualifying event that is an involuntary termination of employment must occur--from Feb. 28, 2010 to March 31, 2010.

Assistance eligible individuals

Typically, a qualified beneficiary will qualify as an assistance eligible individual (AEI) only if the qualifying event is an involuntary termination of employment occurring prior to the sunset date.

However, under the Act, qualified beneficiaries who experience/d a qualifying event that is a reduction in hours of employment occurring anytime on or after Sept. 1, 2008, followed by an involuntarily termination of employment between March 2, 2010, and March 31, 2010, qualify as AEIs even though the subsequent involuntary termination of employment is not the qualifying event for COBRA purposes.

Although it is not the qualifying event giving rise to COBRA, the Act treats the subsequent involuntary termination of employment as the “qualifying event” for purposes of determining eligibility for the subsidy (and for purposes of identifying the notice due date—see “Notices” below for more information).

This new subsidy rule only applies to periods of coverage beginning after March 2, 2010. Thus, if the COBRA periods typically begin on the first of the month, the first subsidized COBRA coverage period resulting solely from this new rule would begin April 1, 2010.

Practice Pointer: The rule does not operate to extend the qualified beneficiary’s COBRA coverage; the COBRA period is still measured based on the original qualifying event that was a reduction in hours of employment. It simply provides a subsidy for any remaining periods of COBRA coverage beginning after that involuntary termination of employment.

However, it does operate to provide a new election period for those who would be AEIs under this rule but failed to elect or elected and subsequently lost coverage. See “New election period” below for more information.

Illustration of the new rule:

#1: ABC, Inc. sponsors a group health plan that only covers full-time employees of the company. Prior to Jan. 15, 2010, Bob was a full-time employee of the company and a participant in ABC’s group health plan.

On Jan. 15, 2010, Bob changes from full-time status to part-time status. Assume for purposes of this illustration that the transition from full-time to part-time status was not a “material negative change” that would otherwise cause the reduction in hours to be treated as an involuntary termination of employment.

Under the terms of ABC’s plan, Bob’s coverage will continue until the end of the month, Jan. 31, 2010, after which he is offered an opportunity to elect 18 months of COBRA.

Bob elects COBRA continuation coverage but he must pay 102% of the applicable premium since the qualifying event was a reduction in hours of employment and not an involuntary termination of employment. On March 10, Bob is involuntarily terminated from the company due to a reduction in force.

Even though Bob’s COBRA qualifying event was a reduction in hours of employment, he is an AEI who may be eligible for up to 15 months of federally subsidized continuation coverage (assuming he is not eligible for other coverage).

Since ABC’s COBRA coverage periods begin on the first of each month, Bob’s first federally subsidized COBRA period will be April 1, 2010 (the first coverage period after the enactment date March 2).

New election period

Individuals who would be an AEI under the new rule described above, but who failed to elect COBRA or elected COBRA and subsequently lost coverage, are entitled to a new election.

Illustrations of this rule:

#2: Same facts as Illustration #1 above except that Bob did not elect COBRA continuation coverage following his qualifying event that was a reduction in hours of employment (i.e., transition from full-time to part-time). Bob is now an AEI entitled to a new election.

#3: Same facts as Illustration #1 above except that Bob’s spouse was also covered under ABC’s health plan on the date of the qualifying event. Although Bob chose COBRA, Bob’s spouse did not. Bob’s spouse is now an AEI entitled to a new election.

Practice Pointer: This new rule does not operate to give would-be AEIs whose COBRA period has already expired a new COBRA continuation period simply because they have an involuntary termination of employment between March 2 and March 31, 2010.

Although the involuntary termination of employment is treated as the qualifying event for purposes of determining eligibility for the new election and the subsidy, the maximum COBRA period is determined in this instance based on the original qualifying event that was a reduction in hours of employment (e.g., if COBRA is typically measured from the date of the qualifying event, COBRA will be measured here from the date of the reduction in hours of employment).

Also, any break in coverage between the reduction in hours and the involuntary termination of employment is not treated as a "break in coverage" for HIPAA portability purposes.

Thus, periods of creditable coverage preceding this break must be included on any certificate of creditable coverage otherwise required by HIPAA and applied towards any pre-existing condition exclusion or limitation period.

Practice Pointer: This new election period should operate similarly to the special extended election period provided under the original ARRA legislation to those would-be AEIs who experienced an involuntary termination of employment on or after Sept. 1, 2008, and who chose not to elect coverage or elected coverage but lost it prior to Feb.17, 2009.

Thus, the same procedures adopted to comply with that rule should, with appropriate modifications, apply here as well.

This new rule is only applicable for periods of coverage beginning after March 2, 2010. Thus, if the plan typically requires that COBRA continuation coverage be paid for on a calendar month basis, then the date that continuation coverage would begin in this instance is April 1, 2010 (see, e.g., Q-48 of IRS Notice 2009-27).

If, however, the plan typically requires COBRA continuation to be paid for on a monthly basis computed from the date coverage is lost, then the coverage start date is not as clear.

The date that COBRA coverage would appear to begin in this instance is the first day of the next COBRA period determined as though the qualified beneficiary elected COBRA following the reduction of hours in employment—and not the date that the subsequent involuntary termination of employment occurs.

This is because the maximum COBRA period is determined based on the qualifying event that is the reduction in hours of employment.

Illustration of this rule:

#4: Same facts as Illustration #2 except that ABC typically requires COBRA continuation coverage be paid for on a monthly basis computed from the date coverage is lost. In this illustration, Bob would have lost coverage on Jan. 15, 2010, and his monthly COBRA periods would run from the 15th of each month through the 14th of the next month. The next COBRA period following Bob’s March 10 termination, if Bob had elected COBRA following the reduction in hours, would begin March 15, 2010.

Arguably, this is the date that Bob’s subsidized COBRA continuation coverage would start under this new rule (although the maximum COBRA coverage period would be measured from the date of the reduction in hours of employment in this example).

Practice Pointer: Using prior IRS guidance, it would appear that plan sponsors may permit would-be AEIs entitled to a new election under this rule to choose a later start date.

Notices

The same general election rules applicable under ARRA and the Defense Act apply equally to qualified beneficiaries whose qualifying event occurs between March 1, 2010, and March 31, 2010. Election notices should be revised to reflect the new sunset date.

In addition, there are special notice rules for those individuals who are AEIs under the Act as a result of a reduction in hours of employment. If AEIs are already receiving COBRA, notice of the new rules must be furnished to such AEIs within 60 days of the date of the involuntary termination of employment.

Although not specifically stated in the Act, the DOL’s reasoning with respect to prior notices suggests that the notice must be furnished to those qualified beneficiaries who experience a voluntary or involuntary termination of employment.

If the would-be AEI is not currently enrolled but is entitled to a new election under the Act, then a revised election notice describing the availability of the subsidy (and the corresponding terms and conditions of eligibility) must be furnished within 60 days of the date of the involuntary termination of employment.

Practice Pointer: The Act refers to the relevant ARRA provisions to describe the notice contents. Under those ARRA rules, notice of the option to enroll in less expensive coverage, if available, had to be included.

Thus, it would appear that same opportunity may be offered would-be AEIs entitled to a new election under the Act.

Other issues

The Act allows the regulators to impose up to a $110/day penalty on plan sponsors who fail to implement the DOL's/Treasury's determination of eligibility within 10 days after receiving notice of the determination.

The Act revised the date that the now 15-month subsidy period begins. Under ARRA, the subsidy period began as of the “first of the month” that the COBRA subsidy period applied.

Thus, if the first COBRA period to which the subsidy applied was July 15, 2009, through August 14, 2009, the subsidy period was measured from July 1, 2009. The act deletes the “first of the month” language. Therefore, the 15-month COBRA subsidy period will be measured from the first day of the first COBRA coverage period to which the subsidy applies.

The Act codifies the clarifications made by the DOL in its model notices with respect to the transition period provided under the Defense Act.

John Hickman can be reached at john.hickman@alston.com and Ashley Gillihan can be reached at ashley.gillihan@alston.com.

Stimulus? What Stimulus?

2010-02-20T10:03:00.003-05:00

President Obama seized on the one-year anniversary of the American Recovery and Reinvestment Act (ARRA) as an opportunity to take credit for the belated and tenuous economic recovery…

The bill was launched last year amid grandiose promises of "shovel ready" make-work projects.

_________________________

what was labeled a "stimulus" bill was actually
a stimulus to government transfer payments —
cash and benefits that are primarily rewards
for not working, or at least not working too hard…
_________________________

In reality, as the CBO explains, "five programs accounted for more than 80% of the outlays from ARRA in 2009: Medicaid, unemployment compensation, Social Security ... grants to state and local governments ... and student aid."

In other words, what was labeled a "stimulus" bill was actually a stimulus to government transfer payments — cash and benefits that are primarily rewards for not working, or at least not working too hard…

In 2010, as in 2009, the ARRA is mainly a stimulus to government. Shovel-ready or not, highway programs will get only $10 billion of the borrowed booty, about 2%. "Nearly half of the outlays resulting from ARRA in 2010," says the CBO, "will be for programs administered by Health and Human Services or the Department of Education."

From the CBO figures, it appears that 39% to 44% of the $862 billion will be for increased transfer payments, including refundable tax credits (checks to people who don't pay taxes).

Alan Reynolds

Health Care Common Sense

2010-02-10T11:47:00.005-05:00

Arnold King, an economics professor at George Mason University has offered up some ideas for the Republicans to consider as conditions if they join President Obama in a discussion on health care. Here they are:

1. All Medicare savings must be used to shore up Medicare. None of those savings can be used to fund new insurance subsidies or entitlements. Medicare is unsustainable, and it is going to need every dollar that we can save, and more. There is nothing to spare for a new entitlement.

2. Medical savings accounts must not be killed.

3. Catastrophic health insurance must not be killed or heavily disadvantaged relative to comprehensive insurance.

4. All new subsidies that enable people to purchase health insurance must be on budget, rather than through insurance company regulations that are likely to result in cost-shifting.

5. The bill must provide for at least one of the following:
- Interstate competition in health insurance.
- greatly reduce (preferably eliminate) the tax inequity between obtaining health insurance on your own and getting it through your employer.

As far as I am concerned, any bill that fails to satisfy all five of those points deserves opposition.

Personally, I would not want to offer any new subsidies (item #4), believe we should ENCOURAGE medical savings accounts (item #2) - not just spare them, and would want to include both points in item #5.

The Wisdom of Thomas Sowell

2010-02-06T17:01:00.002-05:00

"Whatever position people take on health care reform, there seems to be a bipartisan consensus— usually a sign of mushy thinking— that it is a good idea for the government to force insurance companies to insure people whom politicians want them to insure, and to insure them for things that politicians think should be insured. Contrary to what politicians expect us to do, let's stop and think.

Why aren't insurance companies already insuring the people and the conditions that they are now going to be forced to cover? Because that means additional costs— and because the insurance companies don't think their customers are willing to pay those particular costs for those particular coverages.

It costs politicians nothing to mandate more insurance coverage for more people. But that doesn't mean that the costs vanish into thin air. It simply means that both buyers and sellers of insurance are forced to pay costs that neither of them wants to pay. But, because political rhetoric leaves out such grubby things as costs, it sounds like a great deal."

Thomas Sowell

"Give Me Liberty..."

2010-02-02T09:26:00.003-05:00

Virginia Senate bills say no to requiring health insurance
"Virginia's Democratic-controlled state Senate passed measures Monday that would make it illegal to require individuals to purchase health insurance, a direct challenge to the party's efforts in Washington to reform healthcare."

The bills, a top priority of Virginia's 'tea party' movement, were approved 23 to 17 as five Democrats who represent swing areas of the state joined all 18 Republicans in the chamber in backing the legislation.

The action in Virginia...could indicate that the president is failing to reassure members of his own party that current reform efforts remain worthwhile."

Washington Post

Market-based Solution #2

2010-01-28T11:28:00.005-05:00

Here is an example of another affordable, convenient market-based solution to rising health care costs and an alternative to a government overhaul of the health care system - Retail labs with FULL TRANSPARENT PRICING, including 22 tests available for $49.00

"A growing number of Americans are bypassing doctors and going directly to online and storefront labs for diagnostic testing. Most often they pay for these tests out of their own pocket. The results may persuade the consumer to pursue the matter further with a personal physician but, in any case, the consumer is in charge of who sees the results.

The name of one fast-growing chain of walk-in labs encapsulates the field's business model, Any Lab Test Now. The company says it can generally have testing results within 24 hours and at a cost that is as much as 80% less than going through a doctor. The lab franchises offer up to 1,500 tests, from a simple cholesterol check to more sophisticated packages of tests that address complex medical issues.

There is no federal oversight over medical testing, other than requiring that the labs that do the actual testing for the storefronts be properly certified. State regulations vary widely. As so often happens, the consumers seem to be far out in front of the lawmakers and regulators." NewsChief.com

According to the website of Any Lab Test Now, they offer these advantages:

No Insurance Needed.
Doctor's Order Provided.
No Appointment Necessary.
Confidential and Anonymous.
Most Results in 24-48 Hours.

We acknowledge there are limits to which non-medical professionals should be analyzing certain test results. But certainly there are many 'routine' tests that if taken correctly, the results can be used effectively by non-medical professionals. They could also be used to start a conversation with your physician about the need for further testing and treatment - that you otherwise would not have gotten because of the 'hassle-factor?

Market-based Solution #1

2010-01-28T08:30:00.006-05:00

In our recent newsletter (you can subscribe here) we addressed two market-based solutions that are helping to bring down the cost of health care.

_________________________

Of the 119 million visits to hospital ERs in a
given year, 55% are for nonemergencies.
_________________________

We have talked about this before, but Americans need to be smart about when and where we go for medical care. We all know that hospital emergency rooms (ER) are not effective or efficient for non-emergency situations. However a recent study by the National Center for Policy Analysis found that often

"the ER is the only way to reach a physician after hours. As a result, patients overuse emergency rooms: Of the 119 million visits to hospital ERs in a given year, 55% are for nonemergencies. A 2006 survey of California hospitals found that nearly half of ER patients (46%) thought they could have resolved their medical problem with a visit to their primary care physician, but were unable to obtain timely access."

Market-based solution: Urgent-care clinics and the newer retail clinics that are starting to appear in drug stores and big-box retailers.

Alternate Universe?

2010-01-20T07:46:00.005-05:00

I receive an email everyday with headlines from health care related stories. This morning, after the victory by Scott Brown in Massachusetts, I saw these two headlines:

(Click image to enlarge)

Editorial Cartoon

2010-01-16T10:45:00.004-05:00

(Click on image to enlarge)

Michael Ramirez, Investors.com

Quote Of The Day

2010-01-12T07:44:00.002-05:00

Now, let me get this straight.....
We are going to pass a health care plan written by a committee whose chairman says he doesn't understand it,
passed by a Congress that hasn't read it but exempts themselves from it,
to be signed by a president that also hasn't read it and who smokes,
with funding administered by a treasury chief who didn't pay his taxes…
all to be overseen by a surgeon general who is obese,
and financed by a country that's nearly broke.
What could possibly go wrong?

~Anonymous

From "The Gartman Letter" (subscription required)

COBRA Subsidy Extended

2009-12-22T08:06:00.004-05:00

From the Department of Labor website:

Washington, DC – Phyllis C. Borzi, Assistant Secretary of the Employee Benefits Security Administration (EBSA):

"I am pleased Congress has acted and the President has signed the Fiscal Year 2010 Defense Appropriations Act. The act extends the eligibility period for the ARRA premium reduction for an additional two months (through Feb. 28, 2010) and the maximum period for receiving the subsidy for an additional six months (from nine to 15 months). Millions of unemployed Americans and their families will be better able to afford and keep their health benefit coverage because of this new law.

_________________________

The act extends the eligibility period
for an additional two months
and the maximum period for receiving the
subsidy for an additional six months.
_________________________

"Individuals who had reached the end of the reduced premium period before the legislation extended it to 15 months will have additional time to pay the reduced premiums related to the extension. To continue their coverage they must pay the 35% of premium costs by (60 days after date of enactment) or, if later, 30 days after notice of the extension is provided by their plan administrator.

"Individuals should contact their plan or health insurance provider for information regarding the extension under their health plan. If you need further assistance contact an EBSA Benefits Advisor toll-free at 1-866-444-3272."

We will post more details as they become available.

Abby at 2009 Speedo Tom Dolan Meet - Friday Prelims

2009-12-04T16:34:00.005-05:00

Gotta love technology! Abby is swimming in a meet at George Mason University this weekend. Well, Swimming World TV (who knew) is recording the events. There is Live Streaming of the Friday, Saturday and Sunday Finals starting at 6.00pm each night. You can see those at this link. The preliminaries are on demand. You can find those at the same link but it is a chore to find the right event and heat. Being the magnanimous guy I am though, Abby's Friday events are linked below. Sorry, I cannot do anything about the commercials at the beginning.

In all of the videos, lane 1 is closest to the camera. Lane 1 is actually the second lane in the pool because they do not use the two outside lanes. Abby is in a dark knee-length suit with a red swim cap.

Below is the 400 IM. Abby is lane 2 (3rd lane from the bottom, second swimmer from the bottom)

Below is the 100 Butterfly. She is in Lane 6 - I think she wins this heat.

Below is the 100 Breast. Abby is in lane 4 (2nd swimmer from the bottom). She wins this heat.

We will try to update this through out the weekend. Stay tuned.

Kill The Bills. Do Health Reform Right.

2009-11-28T19:23:00.005-05:00

The United States has the best health care in the world -- but because of its inefficiencies, also the most expensive. The fundamental problem with the 2,074-page Senate health-care bill (as with its 2,014-page House counterpart) is that it wildly compounds the complexity by adding hundreds of new provisions, regulations, mandates, committees and other arbitrary bureaucratic inventions.

_________________________

So why not allow interstate competition?
After all, you can buy oranges across state
lines. If you couldn't, oranges would be
extremely expensive in Wisconsin,
especially in winter.

_________________________

Worse, they are packed into a monstrous package without any regard to each other. The only thing linking these changes -- such as the 118 new boards, commissions and programs -- is political expediency. Each must be able to garner just enough votes to pass. There is not even a pretense of a unifying vision or conceptual harmony...

The bill is irredeemable. It should not only be defeated. It should be immolated, its ashes scattered over the Senate swimming pool.

Then do health care the right way -- one reform at a time, each simple and simplifying, aimed at reducing complexity, arbitrariness and inefficiency.

First, tort reform.
Second, even more simple and simplifying, abolish the prohibition against buying health insurance across state lines.
Third, tax employer-provided health insurance.
Read the rest of the article.

Charles Krauthammer

With HSAs, Mammogram Frequency Is A Non-Issue?

2009-11-25T14:18:00.002-05:00

The NY Times blog has an article "The Uproar Over Mammography," which links to a WSJ op-ed "A Breast Cancer Preview: The mammogram decision is a sign of cost control to come."

In a world of consumer-driven health care that includes Health Savings Accounts (HSAs), wouldn't this "uproar" be a complete non-issue? In that world, patients spending their own money could make decisions on their own, in consultation with their physician, about the timing and frequency of their mammograms.

Think about oil changes for your car. If the manufacturer recommends oil changes every 5,000 miles, but you decide on a different frequency - say every 3,000 miles or every 10,000 - that's not a problem. Now if your car insurance covered routine oil changes, and then the government introduced "government car insurance reform" with a "public option," then the frequency of oil changes would become an issue and could lead to an "uproar."

But in a world of consumer-driven health or auto care where consumers pay for routine maintenance or health exams, there's no "uproar," since consumers make decisions on the frequency of their oil changes or mammograms, and are directly responsible for the cost.

Mark Perry

Southern Health To Drop HCA From Network?

2009-11-24T07:46:00.006-05:00

In a letter to brokers on Monday, Southern Health indicated that effective January 4, 2010, HCA Health Systems may no longer be in their network. The letter is too long to go into detail here, but from the tone of the letter, it does not appear to be a case of “posturing” by one of the parties in a negotiation. We say that because
a) the date of the separation is so close, and that
b) the dispute involves three separate contracts.

Southern Health indicated that employer letters are scheduled to be mailed this week. If no resolution has been reached, member letters will be mailed on or about December 3, 2009. You can view the letters by using the links below:

* HCA Member Letter
* HCA Employer Letter

In additions, if you want to see the letter to brokers in its entirety, contact us and we will send it to you.

The following is a listing of HCA facilities that may no longer be participating as of January 4, 2010. In addition, we have provided a listing of facilities that will continue to be in the network. This list was prepared by Southern Health and included in its letter.

Richmond HCA Facilities
Henrico Doctors' Hospital
Chippenham and Johnston-Willis Hospital
John Randolph Hospital
Retreat Hospital

In-Network Richmond Facilities
MCV Hospital
St. Mary's Hospital
Children's Hospital
Richmond Community Hospital
Sheltering Arms Hospital
Bon Secours Memorial Regional Medical Center
Bon Secours St. Francis Medical Center
Southside Regional Medical Center
_________________________

Southwest Virginia HCA Facilities
Lewis Gale Medical Center
Montgomery Regional Hospital
Pulaski Community Hospital

In-Network Southwest Virginia Facilities
Carilion Roanoke Community Hospital
Carilion Roanoke Memorial Hospital
Carilion Franklin Memorial Hospital
Bedford Memorial Hospital
Carilion New River Valley Medical Center
Alleghany Regional Hospital
Carilion Giles Memorial Hospital
Memorial Hospital of Martinsville
_________________________

Northern Virginia HCA Facilities
Reston Hospital Center

In-Network Northern Virginia Facilities
Inova Fair Oaks Hospital
Inova Fairfax Hospital
Loudon Hospital Center

We will continue to monitor this situation and provide updates as necessary.

Independent Contractor Or Employee?

2009-11-23T19:33:00.000-05:00

Remember that kids' game - Animal, Vegetable, or Mineral? Today in business, there is a similar question: Independent contractor or employee? But it's not a game. The misclassification of a worker can have serious financial consequences.

It's an issue that always comes to the forefront in an economic downturn. For every employee, employers must withhold income tax, withhold and pay Social Security and Medicare taxes, and pay unemployment tax. In addition, employees may be eligible to be included in benefit plans. However, employers generally do not have any of these obligations for an independent contractor.

The problem is that both penalties and interest can pile up if a worker is incorrectly treated as an independent contractor. In the case of a retirement plan, an employer who has misclassified an employee as an independent contractor eventually will be required to make up the benefits the individual would have received as an employee. That can end up being quite expensive.

For more information and a list of what the IRS considers when determining if someone should be a W2 employee or a 1099 employee, read the rest of the article here.

Small Group Claims Data

2009-11-23T12:44:00.007-05:00

One of the carrier's provides some claims data from their pool of small groups in Virginia with certain size group renewals. We thought you might find some of the information interesting:

22% of Claims: Inpatient Services

Surgery accounted for 52% of inpatient costs. Top “drivers” (as they called them) were cardiovascular and orthopedic procedures (including spine, knee and hip surgeries)

21% of Claims: Outpatient Services

Surgery accounted for 23% of outpatient costs – Top driver was orthopedic surgery
Emergency room accounted for 30% of outpatient costs
Diagnostic procedures accounted for 37% of outpatient costs

36% of Claims: Professional Services

Office and outpatient visits accounted for 30% of professional services
Surgery accounted for 9% of professional services

21% of Claims: Prescriptions Drugs

Brand name drugs account for 76% of total cost of prescription drugs
Generic drugs are being dispensed at higher and higher rates
People are asking for generic drugs and that is showing up in the data. Here is look at the percentage of drugs that are being dispensed as generic drugs over the last 4 years:

2005……………….51%
2006……………….57%
2007……………….62%
2008……………….67%

Despite What We Want, Congress Barrels Ahead...

2009-11-23T12:10:00.002-05:00

Just 38% of voters now favor the health care plan proposed by President Obama and congressional Democrats. That’s the lowest level of support measured for the plan in nearly two dozen tracking polls conducted since June.

The latest Rasmussen Reports national telephone survey finds that 56% now oppose the plan.

Only 16% now believe passage of the plan will lead to lower health care costs. Nearly four times as many (60%) believe the plan will increase health care costs. Most (54%) also believe passage of the plan will hurt the quality of care.

Rasmussen Reports

IRS and SSA Announce New Contribution, Benefit, and Compensation Limits

2009-11-18T16:15:00.004-05:00

The Internal Revenue Service and the Social Security Administration have announced 2010 cost-of-living adjustments to limitations applicable to qualified retirement plans. Here is a summary of the new 2010 limitations:

The social security taxable wage base is unchanged at $108,800.

The limitation for defined contribution plans under Section 415(c)(1)(A) is unchanged for 2010 at $49,000.

The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) remains unchanged at $195,000.

The annual compensation limit under Sections 401(a)(17) for qualified plans, 404(l) for deduction purposes, 408(k)(3)(C) for SEPs, and 408(k)(6)(D)(ii) for SARSEPs remains unchanged at $245,000.

The threshold used in the definition of highly compensated employee under Section 414(q)(1)(B) remains unchanged at $110,000.

The threshold concerning the definition of “Key Employee” in a top-heavy plan under Section 416(i)(1)(A)(i) remains unchanged at $160,000.

2010 year limitations mandated by the provisions of EGTRRA.

The limitation under Sections 402(g) for 401(k) plans, SARSEPs, and 403(b) plans, and 457(e) for 457 plans, for elective salary deferrals remains unchanged at $16,500.

The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains unchanged at $11,500.

The limitation for catch-up contributions to an applicable employer plan other than a plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $5,500.

The dollar limitation under Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $2,500

For more details, see the announcement on the IRS website.

Soak The Uninsured

2009-11-09T19:01:00.000-05:00

"Here's a dirty little secret about health care reform that Democrats in Washington would prefer you didn't know: They're counting on people to stay uninsured.

The financing for House Speaker Nancy Pelosi includes $167 billion in penalty payments to the federal government. About $135 billion of that money would come from private employers who don't offer insurance to their workers; those employers would have to pay a tax equal to 8 percent of payroll.

The rest would come from individuals who decline to buy under the new individual mandate. Such individuals would have to pay a fine equal to 2.5 percent of gross income.

Of course, it's possible that the bean-counters are wrong, and both employers and individuals would pony up for insurance coverage in greater numbers than anticipated. But in that case, the total bill for Pelosicare would rise accordingly.

So the options are: bigger deficits, higher taxes -- or lots of companies and individuals paying hefty fines. Do the members of Virginia's congressional delegation like those choices?"

Richmond Times-Dispatch

Sally Hampton Is Out Of Touch

2009-11-09T06:35:00.002-05:00

In an article about Whole Foods health plan, Sally Hampton, an advocate of the single-payer system (universal health care), shows the mental giant she is. Before you read her comments below, understand that the workers PAY NOTHING in the way of premiums if they work 30 hours per week, and that 89% of the workers work enough hours to qualify for the FREE health care. With that as a backdrop…

“They do not provide good health care benefits for their employees,” she explains, describing the coverage as a “self-rationing” type program and noting how the Personal Wellness Account can be quickly depleted even for those who earn double minimum wage. “If one of these employees gets sick, they’re in trouble.”

_________________________

Every decision we make is self-rationing...
It goes back to personal responsibility
and accountability.
_________________________

Duh. Every decision we make is self-rationing. We have limited funds so we need to make decisions as to how we spend our money. It goes back to personal responsibility and accountability. But that is the essence of the problem with people like Sally Hampton. They want to take all decisions away from you and give them over to ‘those who know better.’

Really?

The health care plan that Whole Foods has is one model of what we can do in this country to reform health care. If anyone, disagrees with that and believes in the universal health coverage being proposed in Congress, PLEASE contact me. I would love to have a conversation with someone who truly believes that type of care is better. We may agree to disagree, but I think the conversation would be fascinating.

How Is That Stimulus Plan Working?

2009-11-08T21:09:00.000-05:00

(Click on image to enlarge)

Heritage.org

237 Millionaires In Congress

2009-11-08T06:45:00.001-05:00

"Talk about bad timing.

As Washington reels from the news of 10.2 percent unemployment, the Center for Responsive Politics is out with a new report describing the wealth of members of Congress.

Among the highlights: Two-hundred-and-thirty-seven members of Congress are millionaires. That’s 44 percent of the body – compared to about 1 percent of Americans overall.

CRP says California Republican Rep. Darrell Issa is the richest lawmaker on Capitol Hill, with a net worth estimated at about $251 million. Next in line:
Rep. Jane Harman (D-Calif.), worth about $244.7 million
Sen. Herb Kohl (D-Wis.), worth about $214.5 million
Sen. Mark Warner (D-Va.), worth about $209.7 million
Sen. John Kerry (D-Mass.), worth about $208.8 million

All told, at least seven lawmakers have net worths greater than $100 million."

Politico.com

Immoral Profits - Part II

2009-11-07T11:23:00.001-05:00

One more thought from the article by Jeff Jacoby that was the topic of the last post:

"Still, the critics do have one thing right: More competition would bring down health-care premiums. But the way to increase competition is not by adding a government-run health plan to the 1,300 private firms already providing Americans with health insurance. After all, there's no public option for auto insurance and life insurance, yet they're sold in a highly competitive national market. There is no reason health insurance can't be sold the same way."

Immoral Profits?

2009-11-07T08:12:00.001-05:00

On the Fortune 500 list of top industries, health insurance companies ranked 35th in profitability in 2008; their overall profit margin was a mere 2.2 percent. They lagged far behind such industries as pharmaceuticals (which showed a profit margin of 19.3 percent), railroads (12.6 percent), and mining (11.5 percent). Among health insurers, the best performer last year was HealthSpring, which had a profit of 5.4 percent. "That's a less profitable margin," AP noted, "that was achieved by the makers of Tupperware, Clorox bleach, and Molson and Coors beers."

_________________________

...the notion that health insurers
"make more money than any other
business in America today"
is preposterous.
_________________________

For the most recent quarter of 2009, health-insurance plans earned profits of only 3.3 percent, ranking them 86th on the expanded Yahoo! Finance list of US industries. The application-software industry, by contrast, is pulling in profits of nearly 22 percent. Why aren't MoveOn and the Democrats demanding a "public option" to compete with Microsoft and Adobe and drive down their "immoral" profits?

Jeff Jacoby

House Releases Merged Health Reform Bill

2009-11-06T06:50:00.006-05:00

Below is a summary of the most recent House bill to emerge from Congress (thanks to UnitedHealthCare). This is one of the most concise summaries I have seen to date. It is all fact - no commentary. If you know anything about the health insurance industry, this should frighten you on many levels.

On October 29th , leadership in the House of Representatives released a bill entitled the “Affordable Health Care for America Act” that merges legislation passed in July by the three House committees (Education and Labor, Energy and Commerce, and Ways and Means) with jurisdiction over health reform. The CBO estimates that this bill will cost $894 billion over ten years and cover 36 million of the 54 million uninsured. To pay for the cost of the bill, the Committee places a 5.4% surcharge on adjusted gross income above $1 million for married couples and $500,000 for singles, reduces provider payment rates under Medicare, reduces spending for the Medicare Advantage program, obtains prescription drug rebates and discounts for Medicaid and Medicare Part D from pharmaceutical companies, places a 2.5% sales tax on medical devices, and makes changes to HSA and FSA rules. House leadership has stated that floor debate on the bill will likely start later this week or early next week. Details of the House bill include:

· Insurance Market Rules Effective in 2010: Several insurance market rules take effect in 2010, including government review of health plan premiums and a requirement that 85% of premiums be spent on medical care, prohibition of lifetime benefit limits for individual and group plans, a requirement that health plans cover children as dependents through the age of 26, and prohibition of coverage cancellation or rescission except in cases of fraud. Prior to the implementation of new market rules and the Exchange in 2013, the House bill also establishes interim provisions between 2010 and 2013 that extend COBRA eligibility, shorten the pre-existing condition “look back” period to one month and the benefit exclusion period to three months, and establish high risk pool provisions for individuals who can not obtain coverage due to health status or a pre-existing condition.

· Insurance Market Rules Effective in 2013: Beginning in 2013, the House bill makes additional insurance market changes that require guarantee issue and renewal of coverage, prohibit pre-existing condition exclusions and premium variation based on health status, and allow premium variation only for age, family size, and geographic area. The new market rules apply to all health plans inside and outside the Exchange. Starting in 2015, states could pass legislation to form “Health Care Choice Compacts” to allow the purchase of individual insurance across state lines.

· Public Plan and CO-OPs: The House bill establishes a national public plan in 2013 to compete with private insurers in the Exchange. Provider rates for the public plan would be negotiated and providers are presumed to participate unless they opt-out. The House bill also provides start-up funding to states to establish not-for-profit member-governed cooperative health plans (CO-OPs) to compete with private insurers and the public plan in the Exchange. CO-OPs and the public plan must comply with the same rules as other plans in the Exchange. States are not required to establish CO-OPs.

· Exchange: A national health insurance “Exchange” is established in 2013 and would be operated by a new federal agency, the “Health Choices Administration (HCA).” The Exchange is designed to serve as a facilitator of comparison shopping, enrollment, and subsidy administration, a regulator of plan standards and rules, and a negotiator of premiums and contracts with health plans. All individuals who purchase coverage outside the group market or whose premiums are more than 12% of income (and are not eligible for Medicare or Medicaid) are eligible to purchase coverage through the Exchange. Participation in the Exchange is voluntary, but no individual market exists outside the Exchange except for “grandfathered plans.” Employers can purchase coverage through the Exchange if they have up to 25 employees in 2013, up to 50 employees in 2014, and up to 100 employees in 2015 (with the potential to open participation to all groups starting in 2015).

· Benefit Plans: In 2013, individuals have a choice of four plan types including “Basic” (70% actuarial value), “Standard” (85% actuarial value), “Premium” (95% actuarial value), and “Premium Plus” (value over 95%). A new independent “Benefits Advisory Committee” is created to define and update the requirements for the minimum benefit plan or “Basic Plan.” Plans are prohibited from having annual or lifetime benefit limits or establishing cost sharing above $5,000 individual/$10,000 family. Plans are required to cover a list of specified mandated benefits, but states may establish additional benefit rules. Individuals may keep their current coverage (“grandfathered plans”) instead of enrolling in one of the four new plans, as long as no change is made in cost-sharing, contract terms, or benefit levels. Employers are required to at least meet the requirements of the “Basic Plan” by 2018.

· Coverage Mandates, Penalties, and Subsidies: Beginning in 2013, individuals are required to have health insurance coverage that is either a “grandfathered plan,” a government plan (Medicaid, Medicare, and the like), an employer-based plan (until 2018), or an individual or group plan that meets or exceeds the qualifications of the federally-defined minimum benefit plan (“Basic Plan”), or pay a 2.5% of income tax penalty. Waivers are allowed for Native Americans, those with religious objections, dependents, and individuals with a financial hardship defined as premiums over 12% of income. Individuals up to 400% of the federal poverty level ($88,000 for a family of four) are eligible for sliding scale premium and cost-sharing subsidies. In 2013, employers with an annual payroll over $500,000 are required to offer health insurance coverage to their employees or pay an 8% of payroll tax penalty. Employers must pay 72.5% for single and 65% for family coverage of the lowest cost qualified plan to avoid the penalty. Employers are also subject to the penalty for employees in the Exchange obtaining subsidies if the cost of employer-based coverage is higher than 12% of the employee’s income. Employers with an average wage below $40,000 and 25 or fewer employees are eligible for up to a 50% premium credit for two years.

· Medicaid and the Children’s Health Insurance Program (CHIP): Medicaid eligibility is expanded to 150% of the federal poverty level for all individuals in 2013 with full federal funding of the expansion in 2013 and 2014 and 91% federal funding to states starting in 2015. States are required to maintain existing Medicaid eligibility; states are also required to maintain CHIP eligibility, but only until 2013 when CHIP beneficiaries will get coverage through the Exchange. The bill also extends enhanced federal Medicaid funding from the stimulus bill (ARRA) to states until June 2011.

· Medicare: The House bill reduces payments for Medicare Advantage to 100% of Medicare fee-for-service spending by 2013 and establishes quality bonuses for plans with high quality scores in markets with low Medicare fee-for-service spending and high Medicare Advantage enrollment. By 2019, the “donut hole” or coverage gap under Part D is eliminated. Pharmaceutical manufacturers are to provide a 50% discount for brand name drugs purchased in the “donut hole” and HHS is required to negotiate directly with manufacturers for Part D drug pricing. The income subsidy exclusion for employers who maintain prescription drug plans for Part D eligible retirees is eliminated. The House bill also creates pilot programs for coordinated care delivery models, establishes a new “Center for Medicare and Medicaid Innovation” to test and implement new provider payment methods, and changes payment incentives to reduce hospital readmissions. Annual provider payment updates are reduced for Medicare Part A and Part B and the Institute of Medicine is instructed to study geographic variation in payment rates and recommend changes.

CMS Actuary Estimates Cost and Coverage Impact of House Health Reform Legislation
In late October, the Chief Actuary for the Centers for Medicare and Medicaid Services (CMS) released a report analyzing the cost and coverage impacts of health reform legislation debated in July by the three House committees with jurisdiction over health reform. The report states that total national health expenditures will increase under the House language and that “demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.” The CMS Actuary also states that the language does little to contain health care cost growth, “With the exception of the proposed reductions in Medicare payment updates for institutional providers, the provisions of H.R. 3200 would not have a significant impact on future health care cost growth rates.” In addition to analyzing the impact of the House legislation on costs, the CMS actuary estimates the impact on coverage for Medicare beneficiaries, stating that the reduction in Medicare Advantage rates to 100% of Medicare fee-for-service would result in less generous benefit packages and enrollment in Medicare Advantage plans would decrease by 64%.

Thanks to UnitedHealthCare for the summary.

Real Competition - Part II

2009-11-05T09:40:00.000-05:00

Regarding the graph in the previous post, Mark Perry commented;

"The chart... shows the wide variation in average annual insurance premiums among selected states... In other words, allowing interstate competition for health insurance would allow families in New York to save more than $8,000 by buying insurance from a provider in North Carolina. That seems like an attractive option for New York residents, even if they have to accept a lower level of medical coverage for the $8,000 savings.

Instead of new massive government interventions in the U.S. health care system, maybe the best cure is to simply allow interstate competition for health insurance."

Extending COBRA subsidy? Maybe

2009-11-04T15:03:00.002-05:00

In September, House lawmakers approved a bill granting workers in 27 states another 13 weeks of unemployment insurance benefits. For employers, the move may signal that Congress is willing to extend the Dec. 31 eligibility date for the COBRA subsidy program if lawmakers fail to agree on health care legislation by the end of the year.

The sentiment is that the COBRA subsidy is working - providing health insurance to individuals when they need it most, says Karen Frost, Hewitt's health and welfare outsourcing leader. According to Frost, whether Congress extends the Dec. 31 eligibility date for the subsidy depends on health care reform.

If the unemployment rate continues to rise, lawmakers will probably extend the eligibility date for the program, given that unemployed workers will have a difficult time finding a job and employer-provided health coverage. If Congress, however, passes a health care bill by the end of the year, then there is less reason to extend the COBRA program, given that new health care legislation will more likely carry provisions that will cover workers who have been involuntarily terminated. Read more

EmployeeBenefit News

Real Competition

2009-11-03T19:28:00.000-05:00

"Rhetoric about monopoly notwithstanding, Congress's reform proposals are not designed to increase competition in private health insurance. The House bill proposes a government-run insurer. The Senate Finance Committee proposes creation of quasi-public cooperatives. Both bills (and the Senate HELP bill) include restrictions on health insurance underwriting, pricing, profitability and policy design that would essentially turn private health insurers into regulated public utilities.

If the goal were to promote robust competition in private health insurance, Congress would focus on reducing impediments to competition. It could do so by allowing consumers to buy insurance across state lines at terms that do not require them to subsidize other buyers or to buy coverage for state-mandated benefits they are unwilling to pay for. Congress could also eliminate tax and regulatory rules that favor employment-based coverage over individual coverage."

Scott Harrington

10 Reasons To Consider An HSA

2009-11-02T14:14:00.000-05:00

We recently ran across an article that did a good job of listing out some the reasons to consider a Health Savings Account (HSA) medical plan. Here are the 10 reasons listed.

1. Premiums for HSA's are consistently lower than with an HMO, PPO or other indemnity plans
2. Renewal increases are lower
3. Consumers can fund a Health Savings Account with the premium savings
4. HSA savings accounts have terrific yearly tax benefits
5. HSA savings accounts earn tax deferred interest
6. They save money for those who are sick not just the very healthy
7. They work for the middle class as well as the wealthy
8. They give the insured better control over their own health care
9. They allow consumers to be better shoppers for medical services
10. Insured persons with HSAs are extremely satisfied with the costs and coverage

Go to Examiner.com to see the entire article.

Want more information about HSA's? Want to know if they are right for you, your family, or your company? Contact us. We would love to talk to you about them to help you determine if they are right for you.

Do you have (know of) a group or organization (civic group, association, etc.) that needs a speaker and you think an informational (not sales) session on HSA's would be appropriate? We would love to talk to you about that opportunity.

Whole Foods - Why Is It The Employees Are Not The Ones Protesting?

2009-11-01T15:53:00.000-05:00

Recently, we posted about the Op-Ed article in the Wall Street Journal written by John Mackey. Mr. Mackey is the co-founder of Whole Foods. At the time, his ideas were lambasted by those in favor of the efforts in Congress to reform health care and they suggested a boycott of Whole Foods. Not surprisingly, the Food Workers Union jumped on the band wagon. Here is a short video which looks into the program oat Whole Foods and talks to some of the protestors.

1990-Page Health Care Reform Bill - Covers Vending Machines?

2009-10-30T15:29:00.003-04:00

From page 1515 of the bill...

“(viii) VENDING MACHINES.—In the case of an article of food sold from a vending machine that—
“(I) does not permit a prospective purchaser to examine the Nutrition Facts Panel before purchasing the article or does not otherwise provide visible nutrition information at the point of purchase; and
“(II) is operated by a person who is engaged in the business of owning or operating 20 or more vending machines,
the vending machine operator shall provide a sign in close proximity to each article of food or the selection button that includes a clear and conspicuous statement disclosing the number of calories contained in the article.

What else is in there?

What They Really Think

2009-10-30T06:49:00.004-04:00

After trying to 'work with Congress' and keep a 'place at the table', the insurance companies are FINALLY starting to say in public what they have been saying in private. Here is one example:

...the 39 Blue Cross and Blue Shield companies warned after the Thursday unveiling of "devastating consequences."

"Millions of people would lose their current private coverage they are happy with," the companies warned. "In addition, the government will underpay providers — even if negotiated rates are initially used — creating major access issues, including long waits for services, with some providers closing their doors."

The Blue Cross and Blue Shield Association also pointed out how any "government-run plan will use its built-in advantages — no matter how it is initially structured — to take over the market" through "price-setting based on Medicare" or by using "existing government programs as leverage for negotiations."

A government option would also enjoy "many financial advantages right from the start, including an exemption from federal and state taxes and other assessments that private plans must pay, immunity from state lawsuits, as well as a host of other state rules and regulations." Plus it will get "at least $2 billion in startup capital."

IRS Issues Long-Term Care Premium Deductibility Limits for 2010

2009-10-28T08:07:00.002-04:00

The Internal Revenue Service announced that deductibility levels for LTC policies purchased in 2010 would increase just as they did in 2009.

Jesse Slome, executive director of the American Association for Long-Term Care Insurance, recently noted that “for the first time, the maximum deductible limit for an individual exceeds $4,000.” He called the development “a positive sign,” adding that the IRS did not do the same for pension contribution limits.

In addition, Slome says a number of states now offer tax credits for the purchase of LTC insurance that lower a participant’s tax bill, dollar for dollar.

The deductible limits for eligible LTC premiums includable in the term “medical care” under Section 213(d)(10) will rise to $4,110 next year, from $3,980 this year for policyholders who turn older than age 70 before the taxable year ends, according to IRS Revenue Procedure 2008-66 (for 2009 limits) and 2009-50 (for 2010 limits).

For those in their 60s, the deduction increases to $3,290 from $3,180, while the figure rises to $1,230 from $1,190 for those in their 50s. The gap narrows for all other age groups, rising to $620 from $600 for those in their 40s and to $330 from $320 for those who are age 40 or younger.

Does Congress Care What We Want?

2009-10-27T07:20:00.001-04:00

A new opinion poll by the Galen Institute shows that 71% of Americans oppose an individual mandate to buy health insurance, despite a penalty of only $750 a year.

The Virginia-based organization, which focuses on free-market health care reform and tax policies, also found that 68% of surveyed respondents are against reducing Medicare benefits to pay for health reform and 58% oppose taxing the middle class to pay for health reforms. In addition, 71% of those surveyed are concerned that if Congress passes health care legislation, then their current health insurance will change.

Overheard

2009-10-23T12:54:00.001-04:00

"Today, I got a note from a friend of mine who just had yet another heart attack. It seems his stent is now blocked by 50%. He is a vet, and his primary care is the Veterans Administration. The Veterans Hospital system will not do a procedure to unblock the stent until it is 70% blocked. He does not have any money, so he is simply waiting to have another heart attack. I am really looking forward to government-run health care."

John Mauldin

What Makes Them Think It Will Cost LESS?

2009-10-14T07:42:00.004-04:00

Politician just don't seem to understand that if you force insurance companies to cover certain procedures/items and force them to accept everyone (regardless of health status) that it increases cost - significantly. And that is BEFORE you add in the waste inherent in government programs. Here is more proof from the state of New Jersey...

"State mandates make health insurance more comprehensive, but they also make it more expensive. A state can easily increase the cost of a basic health insurance policy by 25%, depending on the number of mandates it has and what they cover. The higher premiums drive some into the ranks of the uninsured.
_________________________

in Pennsylvania, for instance, a family
can buy a comparable insurance policy
for a quarter to half the price.
_________________________

New Jersey has arguably the highest health insurance premiums in the country, and health insurance mandates (the state currently has 45, about average for the country) are one reason.

In the early 1990s, New Jersey also passed legislation requiring insurers to accept all applicants, regardless of their health status (guaranteed issue) and charge them all the same price (community rating). President Barack Obama wants to do the same thing nationally.

There were repeated warnings that such legislation would drive up health insurance premiums. But New Jersey legislators ignored those warnings. Today, New Jersey residents have relatively few health insurance options, and coverage is significantly more expensive than in most other states. Just across the state line in Pennsylvania, for instance, a family can buy a comparable insurance policy for a quarter to half the price. Read more.

Wall Street Journal

$829 Billion Is Lowballing It — Just Look at History

2009-10-13T07:56:00.003-04:00

"According to the preliminary analysis just released by the Congressional Budget Office and the Joint Committee on Taxation, the Senate Finance Committee’s health bill will cost American taxpayers $829 billion over ten years.

How much confidence should we have in that forecast of $829 billion? Not much. For example, in 1967 the House Ways and Means Committee predicted that the new Medicare program, introduced the previous year, would cost $12 billion in 1990. However, actual Medicare spending in 1990 was $110 billion—almost 10 times higher than the original estimate."

Here are other examples of missed estimates. All on the low side - imagine that...

(Click image to enlarge)

Mark Perry

Unconstitutional

2009-10-07T07:37:00.006-04:00

While the idea of a "public health option" is flawed for a host of reasons, Sen. Orrin Hatch has written a piece explaining why a "requirement" to have health insurance, and the subsequent "fine" imposed on those who do not have insurance, is unconstitutional.

'The liberty we enjoy in America requires limits on government power, and those limits come primarily from the Constitution. Our written Constitution delegates only certain powers to the federal government and Congress must point to at least one of them as authority to pass legislation.

This means, of course, that the Constitution might not allow some things Congress might want to do. Some provisions of the Finance Committee's health care bill are in this category. It would, for example, require nearly everyone to purchase health care insurance. Failure to do so could result in an "excise tax" to be assessed through the tax code and collected by the IRS….
_________________________

if politics trumps the Constitution,
the Constitution cannot limit government
and, therefore, cannot protect liberty.
_________________________

For the first time, the federal government would be ordering Americans to buy a particular product or service they had not chosen to purchase. Rather than regulate an activity in which individuals chose to engage, Congress would be requiring an activity in which individuals had chosen not to engage.

The nonpartisan Congressional Research Service issued a report concluding this is a completely novel, unprecedented constitutional issue….

Another constitutional problem with the individual mandate is that the penalty for failing to purchase health insurance is, in fact, not the excise tax that the Finance Committee bill says it is. It is really not a tax at all, but a fine masquerading as a tax. An excise tax is a tax on the sale of goods or services, such as a gasoline tax. If you do not buy gas, however, you do not pay the gas tax." Read more.

Orrin G. Hatch, Utah Republican, is a senior member of the Senate Finance Committee.

Paid To Do Nothing

2009-10-07T07:04:00.004-04:00

Remember, the ones responsible for bringing us the U.S.P.S want to run your health care, too. And they claim they can do it more efficiently than private enterprise?

"The U.S. Postal Service, struggling with a massive $7 billion deficit caused by plummeting mail volume, spends more than a million dollars each week to pay thousands of employees to sit in empty rooms and do nothing.

It’s a practice called “standby time,” and it has existed for years — but postal employees say it was rarely used until this year. Now, postal officials say, the agency is averaging about 45,000 hours of standby time every week — the equivalent of having 1,125 full-time employees sitting idle, at a cost of more than $50 million per year.

Mail volume is down 12.6 percent compared with last year, and many postal supervisors simply don’t have enough work to keep all employees busy. But a thicket of union rules prevents managers from laying off excess employees; a recent agreement with the unions, in fact, temporarily prevents the Postal Service from even reassigning them to other facilities that could use them. So they sit — some for a few hours, others for entire shifts. Postal union officials estimate some 15,000 employees have spent time on standby this year. Read More.

Federal Times

Some Choose Not to Have Health Insurance

2009-10-06T08:03:00.004-04:00

"I learned a lot about the cost of health care when I had a hybrid general surgery practice in California's rural San Joaquin Valley. My practice consisted of uninsured women with breast cancer combined with a smaller percentage of cosmetic patients whose cash payments for "vanity care" subsidized the treatment of women unable to pay for needed medical treatment.

I encountered patients who gladly paid upward of $1,000 in cash for laser hair removal treatments. The paperwork filled out during their initial consultation asked them to indicate whether or not they had health insurance. Several hair-removal patients reported being covered by Medi-Cal, the government-funded health coverage for California's low-income population.

A friend of mine sells private health insurance plans. He told me of the 39-year-old father of two whose family was quoted a monthly insurance premium of $250.

"Are you kidding?" he said, refusing the coverage. "That's almost as much as my boat payment!"

Individuals in this country have a right to decide how — and how not — to spend their money. But that right does not include accepting entitlements without sharing responsibility. Doing so contributes to the high cost of care that burdens every unsubsidized patient.

If individuals prefer to buy luxury items rather than pay for their health needs, that preference should not be rewarded while taxpayers struggle to pay their own bills." Read more.

Linda Halderman, M.D.

States Show How Not To Fix Health Care

2009-10-04T14:10:00.001-04:00

Since the debate over the government takeover of medical care exploded onto the national stage, advocates of market-based, patient-centered reforms have pointed to the failed government health care systems of Canada and the U.K. as examples of what America should not replicate.

Yet we don't need to peer over borders and across oceans to find government health care that does not work; indeed, we have examples here in our United States.
_________________________

Hawaii, Oregon, Massachusetts, Tennessee
and Maine have all created some version
of government takeover or administration
of health care, and all are a mess.

_________________________

Hawaii's Prepaid Healthcare Act and its coverage mandates have left Hawaiians with fewer coverage choices, higher costs and nearly double the number of uninsured. Recent budget cuts resulted in discontinuation of its coverage for children.

Oregon's state-controlled care includes an official list that dictates what treatments will be covered based on annual budget constraints. If your disease is above the treatment line, you are covered. Below the line — you're not.

In the three years since the Massachusetts "universal" coverage plan was launched, the state still has thousands of uninsured, costs have exploded to unsustainable levels, and waiting lists for treatments have appeared.

Tennessee's "TennCare" program, an attempt to expand coverage to low-income uninsured, included dead people, escaped felons and NBA stars. It drove doctors and insurers out of the state, and has been on the brink of insolvency several times.

Tennessee's Democrat governor, Phil Bredesen, recently went to Washington, D.C., to explain to Congress that government health care does not lower cost.

But perhaps the worst — and closest — example of why a federal takeover of health care won't work comes from Maine... Read more .

Kerri Houston Toloczko

Gov't Care: A Victory For Special Interests

2009-10-03T21:08:00.001-04:00

"The Democrats' proposal for health care reform would put more health care decisions in the hands of the government. Government involvement means special interests dominate. This is not a good thing.

Each decision about care would mean millions or billions of dollars for interest groups that pressure legislators with all the means at
_________________________

The way to lower the cost of health care
and try innovative solutions to increase
access is to reduce government intervention,
not increase it.
_________________________

their disposal. Put the federal government in charge of deciding what is appropriate care, and special- interest groups will fight long and hard for a place on the list.

Politics, not patient needs or the need for increased access to care, will determine which procedures are covered.

Evidence of political influence in health care abounds, mostly at the state level, because that is where health care has been regulated. Increasing regulatory power at the federal level will bring out lobbyists' big guns, as any win is much bigger than it is at the state level."

Shirley Svorney

Hey Congress, Want To Take Over Health Care? Fix This First

2009-10-02T08:59:00.002-04:00

"Starting this year, Social Security will spend more in benefits than it will receive from its payroll taxes. This is somewhat unexpected as just last year, the 2009 cash surplus was predicted to be about $80 billion. Even in May of this year, the program's actuaries predicted a roughly $19 billion surplus. However, they failed to allow for the full effects of the recession, and the soaring unemployment both reduced tax collections and increased the number of workers who were forced to take early retirement.

This is very bad news for taxpayers, but worse is yet to follow. The 2009 deficit of about $10 billion will be followed by a 2010 deficit of about $9 billion. If there is a strong recovery--which is questionable at best--the program could briefly return to surpluses. But by 2016, deficits will return and continue permanently. A far more likely scenario is that Social Security will run deficits from this point on.

Social Security's future has arrived early. Despite reassuring words that these deficits are temporary, the reality is much worse. These deficits are likely to be permanent, and the only way out of this cash crunch is to fix the program."

David C. John

Quick Question...

2009-10-02T07:46:00.001-04:00

If lawmakers can easily cut nearly $1 trillion in waste from Medicare and Medicaid over the next 20 years, shouldn't they do so to reduce Medicare's $36 trillion unfunded obligation, not to fund massive new health care benefits?

Canada - Return To Private Health Care

2009-10-01T07:41:00.004-04:00

As a result of Canada's health woes, a network of private health clinics has spring up. Clinics schedule simple surgeries and tests in as quickly as a week. They are technically illegal, and a court case in October may settle the matter.

"What we have in Canada is access to a government, state-mandated waiting list," says Brian Day, former director of the Canadian Medical Association, who now runs his own private
_________________________

"Access to a waiting list is not
access to health care."
_________________________

clinic in Vancouver. "You cannot force a citizen in a free and democratic society to simply wait for health care, and outlaw their ability to extricate themselves from a wait list."

The door to re-privatizing health care in Canada was opened in 2005, when the Canadian Supreme Court answered the question of whether health care can be effectively delivered by the same people who deliver the mail. The answer was no.

The case was brought by George Zeliotis, who needed and wanted hip-replacement surgery but was told by the government he had to wait a year. He told the government that was too long and he'd pay for his own surgery. That was illegal. But instead of heading south to a hospital in Boston, Buffalo or Cleveland, as many Canadians do, he sued.

Canada's high court found that "delays in the public health care system are widespread and that, in some serious cases, patients die as a result of waiting lists for public health care." As Chief Justice Beverley McLachlin wrote, "Access to a waiting list is not access to health care."

IBD

IRS Warns Of COBRA Subsidy Abuse Penalty

2009-09-30T20:00:00.003-04:00

The IRS website has a post on it that is a reminder that COBRA subsidy recipients who become eligible for other group health plan coverage or Medicare should notify their plan in writing that they are no longer eligible for the subsidy. Failure to do so could result in a penalty.

The webpage explains that if an individual continues to receive the subsidy after he or she is eligible for certain other coverage, such as group health coverage from a new job or Medicare, or was never eligible in the first place, the individual may be subject to a penalty of 110% of the subsidy provided after he or she became eligible for the other coverage. The website includes information on how individuals can self-report to the IRS that they are subject to the penalty – you have got to LOVE the optimism of the IRS.

By the same token, the IRS understands that not everyone may self-report the error of their ways. To that end, they have given people the opportunity to report SOMEONE ELSE they suspect may be receiving the subsidy after becoming eligible for other coverage. No reward is offered - yet.

Seasonal Flu and H1N1 Flu Information

2009-09-30T19:40:00.001-04:00

Seasonal flu is not just a runny nose or upset stomach. On the contrary, it's a serious illness that can lead to pneumonia or even death. The good news is that most insurance companies are helping to reduce the cost of seasonal flu shots to their members. If you do not know if your carrier is helping with the cost, contact your agent or the customer service number on the back of your ID Card. Most carriers are letting you get your flu shot with a tier 1 co-pay on your Rx coverage.

Please note that the seasonal flu vaccine will not protect from the H1N1 flu virus. The government is covering the cost of the vaccine itself. Authorized providers may bill for administration charges. Again, check with your carrier for more details.

Groups recommended to receive the seasonal flu vaccine are:

children aged 6 months up to their 19th birthday,
pregnant women,
people 50 years of age and older,
people of any age with certain chronic medical conditions,
people who live in nursing homes and other long-term care facilities,
health care workers,
household contacts of persons at high risk for complications from the flu,
household contacts and out of home caregivers of children less than 6 months of age (these children are too young to be vaccinated).*

Groups recommended to receive the H1N1 flu vaccine are:

pregnant women,
household contacts/caregivers for children under 6 months old,
health care and emergency personnel,
people between 6 months old and 24 years old,
people between 25 and 64 years old who have health conditions associated with higher risk of medical complications from influenza.

For more information, visit www.flu.gov.

Also, the CDC offers extensive information on the seasonal flu and H1N1. You can visit their web site, www.cdc.gov/flu for more information.

Finally, you can visit the Virginia Department of Health's Web site, http://www.vdh.state.va.us/ or call 877-ASK-VDH3 (877-275-8343) during business hours for local H1N1 information.

Example Of A Level Playing Field?

2009-09-28T08:22:00.003-04:00

A recent Washington Times editorial highlights the hypocrisy of the recent "gag order" against Humana in light of arguments from those in favor of a public health care option who say it would be a level playing field. The "gag order" was placed on critics of Medicare reform, particularly Humana, Inc. The insurer sent a letter to its customers urging them to contact Congress about Sen. Max Baucus' reform proposal to cut funding for Medicare Advantage. The Times says the Centers for Medicare and Medicaid Services' "explicit threat of removing Humana from the Medicare system has barred the company from sending any more letters to its customers while the bureaucracy takes its time investigating the letter." The move is a "fair warning to anyone who thinks a government insurance plan will play fair with its private competitors."

Humana Gagged For Telling The Truth While AARP Encouraged To Endorse Plan

2009-09-25T19:02:00.000-04:00

"The Centers for Medicare & Medicaid Services (CMS), which administer benefits under Medicare, issued what can only be called a gag order after Humana warned its Medicare Advantage customers in a letter that the president's plan might cause them to lose some benefits."

But "Tuesday, CBO director Douglas Elmendorf told Sen. Baucus' committee that its plan to cut $123 billion from Medicare Advantage would cost some 2.7 million people to lose this coverage altogether and result in lower benefits for the rest. The program will become so unattractive that people will quit buying the policies in the future.

So when Blum issued the gag order, it was because Humana was telling its customers the truth and exposing as a fraud the claim that "if you like your current coverage you can keep it."

WSJ

Meanwhile, the White House and Democrats "are laboring to attract skeptical seniors to their drive to reshape the nation's healthcare system, leading some to press the behemoth but reluctant AARP to be more aggressive about backing them." With polls showing that a majority of those over 65 are opposed to the reform plans in Congress, "some Democrats are prodding AARP...to explicitly endorse their plans."

AP

CBO Director Contradicts Boss

2009-09-25T08:15:00.000-04:00

The Associated Press reports that CBO director Douglas Elmendorf is "contradicting" President Obama's "oft-stated claim that seniors wouldn't see their Medicare benefits cut under a health care overhaul." Elmendorf "told senators Tuesday that seniors in Medicare's managed care plans would see reduced benefits under a bill in the Finance Committee. The bill would cut payments to the Medicare Advantage plans by more than $100 billion over 10 years." In a separate story, Elmendorf is quoted as saying that the Baucus bill "would reduce the extra benefits that would be made available to beneficiaries through Medicare Advantage plans."

Pandering In Real Time

2009-09-23T06:21:00.000-04:00

With all of the talking pundits, round-the-clock news shows, all-news cable tv shows trying to best one another, is this scenario far behind?

New Live Poll Allows Pundits To Pander To Viewers In Real Time

Another Sign Tort Reform Is Needed?

2009-09-22T07:08:00.001-04:00

Zurich University Hospita l has stopped treating North American "medical tourists," fearing million-dollar claims from litigious patients if operations go wrong. Hospitals in canton Valais have also adopted measures to protect themselves against visitors from the United States, Canada and Britain.

"The directive applies only to patients from the US and Canada who come to Zurich for elective, non-essential health treatments," said Zurich University Hospital spokeswoman Petra Seeburger.

"It is not because treatment is not financed; it is because of different legal systems." In a statement the hospital said it was "not prepared to risk astronomical damages or a massive increase in premiums." Seeburger emphasised that the restrictions only affected people not domiciled in Switzerland.

Rising Cost Of Health Care

2009-09-18T18:04:00.000-04:00

The Top 5 Medical Tourism Destinations

2009-09-18T07:47:00.003-04:00

Medical Tourism is defined as "where people travel abroad to receive medical treatments like cosmetic surgery, which they could not afford in their own country." We have read quite a bit about it and posted about. A recent report came out and listed the Top 5 Medical Tourism Destinations. Coming in at #5 - The United States.

"Yes, that's right. America is a medical tourism destination. In fact it is one of the longest-standing medical tourism destinations in the world. That's right: Brits have been taking advantage of the dollar exchange rate and travelling to America to get their bits tucked in or pushed out since the 80s."

Huh. How can that be? We keep hearing how our health care system is so expensive and other countries have better health care than we do.

Maybe our system is not as bad as we are led to believe...

Ultimate Single Payer System

2009-09-17T07:15:00.000-04:00

"There was a time, within living memory, when most Americans did not have health insurance-- and it was not the end of the world, as so many in politics and the media seem to be depicting it today.

As someone who lived through that era, and who spent decades without medical insurance, I find it hard to be panicked and stampeded into bigger and worse problems because some people do not have medical insurance, including many who could afford it if they chose to.
_________________________

the time finally came when
I could tell my wife that the
baby was now ours, free and clear.
_________________________

What did we do, back during the years when most Americans had no medical insurance? I did what most people did. I depended on a "single payer"-- myself. When I didn't have the money, I paid off my medical bills in installments.

The birth of my first child was not covered by medical insurance. I paid off the bill, month by month, until the time finally came when I could tell my wife that the baby was now ours, free and clear.

In a country where everything imaginable is bought and paid for on credit, why is it suddenly a national crisis if some people cannot pay cash up front for medical treatment?"

Thomas Sowell

Milton Friedman - My Hero

2009-09-16T21:30:00.000-04:00

As a former economics major in college, I have always had a special place in my heart for Milton Friedman. His free market theory and arguments against government intervention always resonated with me. This is the first in what will probably be several (over time) posts with him talking about various items that are still relevant today.

Here he talks about Government's role in health care.

Will Your Doctor Continue To Practice Medicine?

2009-09-16T15:20:00.000-04:00

"Two of every three practicing physicians oppose the medical overhaul plan under consideration in Washington, and hundreds of thousands would think about shutting down their practices or retiring early if it were adopted.

The poll contradicts the claims of not only the White House, but also doctors' own lobby — the powerful American Medical Association — both of which suggest the medical profession is behind the proposed overhaul. The AMA, in fact, represents approximately 18% of physicians and has been hit with a number of defections by members opposed to the AMA's support of Democrats' proposed health care overhaul..

It also calls into question whether an overhaul is even doable; 72% of the doctors polled disagree with the administration's claim that the government can cover 47 million more people with better-quality care at lower cost."

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IBD

Free Market Innovation Continues To Lower Prices

2009-09-16T06:43:00.002-04:00

BENTONVILLE, AK, Sept. 15, 2009 – While the debate over health care reform continues, Walmart remains committed to doing its part to reduce the cost of health care for everyone. Walmart announced today it is expanding its prescription mail delivery program nationwide, making it easier to receive prescriptions regardless of whether or not customers live close to a pharmacy. From Cromberg, California, to Rockleigh, New Jersey, Americans can order, with a valid prescription, a 90-day supply of eligible prescriptions for only $10 and receive them via free mail delivery, simply by visiting walmart.com/pharmacy or by by calling 1-800-2REFILL. Further, Walmart’s free mail delivery program has no gimmicks, no memberships and no enrollment fees.

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Walmart’s free mail delivery program
has no gimmicks, no memberships
and no enrollment fees
_________________________

“Walmart’s $4 generic drug program has helped so many patients afford their medication needs, but unfortunately we’ve found there are still too many patients unable to take advantage of our low prices because they are home-bound or live too far from a Walmart or Sam's Club pharmacy,” said Dr. John Agwunobi, president of Walmart’s health and wellness division.

“With this program, we’re able to provide consumers in every rural town or big city across America with more affordable prescription medicines through a convenient, free mail delivery system. Our $10 mail delivery prescription program is a true reflection of Walmart’s commitment to drive unnecessary costs out of the health care system so Americans can live healthier, better lives,” said Dr. Agwunobi.

PETA's Chicken Empathy Museum

2009-09-15T17:53:00.002-04:00

You could not make this stuff up...

Roanoke, Va. -- This morning, PETA sent a letter to Virginia Gov. Timothy Kaine offering to rent the Botetourt Correctional Center building, which is slated to close because of budget concerns, and turn it into America's first chicken empathy museum.

The museum could feature exhibits that include video footage from research conducted at Bristol University in the U.K.--research that showed how chickens are intelligent animals with mental abilities comparable to cats, dogs, and even

_________________________

also feature a restaurant that would
serve heart-friendly and delicious
faux-chicken drumsticks and
chickenless pot pie.
_________________________

primates. It could also feature a restaurant that would serve heart-friendly and delicious faux-chicken drumsticks and chickenless pot pie and a gift shop that could provide free plush chickens for kids, with tags reading, "I Am Not a Nugget!" The museum would feature interactive displays, including one in which visitors have weighted backpacks strapped to their backs to simulate how large chickens' upper bodies can grow in proportion to their legs. The museum would also provide area residents with much-needed jobs.

"In addition to creating jobs, the museum would convert a building that was built for the purpose of incarceration into a tribute to liberation," says PETA Executive Vice President Tracy Reiman. "Chickens are sensitive, smart animals who have feelings just as we do--they deserve better than to be treated like mere meat machines."

Still think I made this up? Go here.

Salt In The Wound On Tax Day

2009-09-15T08:20:00.005-04:00

On one of the four days of the year when millions of taxpayers have a deadline for their quarterly tax payment (many of the self-employed do not have the luxury of paychecks and tax withholding), this appeared the Richmond Times-Dispatch:

"This fiscal year Washington will spend $33,880 per household. Here is how the bill breaks down:

$9,418.....Social Security/Medicare
$6,328.....Financial bailouts
$5,850 ....Defense
$4,745.....Anti-poverty programs
$1,210......Interest on the federal debt
$982........Federal employee retirement benefits
$902........Unemployment benefits
$819........Veterans' benefits
$699........Health research/regulation
$529........Highways/mass transit

The remainder -- roughly $2,400 -- covers everything else, from the judicial system to education to farm subsidies to space exploration.

An itemized bill is always instructive. This one is particularly so."

Ah, Details, Details

2009-09-12T06:10:00.000-04:00

“'There remain some significant details to iron out.' Thus spoke the President of the United States last night, in an address in which, with a straight face, he told an awaiting nation that he was finally delivering not lofty rhetoric, but his grand plan on health care.

On that score President Obama was right. It may have been, however, a bit of an understatement. Absent, of course, was how exactly all the savings he confidently predicted would materialize, how exactly the government would prevent employers from dumping all their employees into a government plan and how czars and boards would operate without bureaucrats coming between Americans and their doctors. Ah, details, details.

In fact, while he kept referring to “our plan” he never explained whose plan he meant. One of the two House plans? The one Senate plan that exists or the Finance one that’s under construction? What’s he actually for? What’s the President against?"

Mike Gonzalez

Never Forget

2009-09-11T07:23:00.000-04:00

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Games Sometimes Put Life Into Perspective

2009-09-10T19:39:00.004-04:00

Sports fan or not, you have to read this article.

"Three years earlier he'd joined the staff as a 25-year-old volunteer. He loved being around the game, loved talking officiating (a particular passion of his), loved going out for beers with the equipment crew and, more often than not, getting into some kind of good-natured trouble. Only a couple months earlier, he'd been brought on full-time as the assistant equipment manager, benefits and all (and thank goodness for that). Which is how he came to be holding that key, sprinting toward that locker room, on that fateful night...

Gantt had landed on his neck and bruised between the sixth and seventh region of the vertebra. The team doctor rode with him to the ER, then huddled with him in his hospital room. Coaches and staff visited. The prognosis was grim: Gantt was paralyzed from the chest down. He'd need a wheelchair for the rest of his life.

It took three years of rehab for Gantt, but eventually he returned to William and Mary, this time as a fan. It would have been easy to be bitter, to blame football, but that wasn't his manner. "It was a fluke," he says. "It wasn't going to stop me. I've been loyal to this team the whole time." Staying away from the game, he says, would have only made things worse." Read more

Chris Ballard, Sports Illustrated

Burger Joint With A Medical Plan? Yep.

2009-09-09T07:14:00.004-04:00

We ran across two articles that tie together nicely. One was an article about how having a job does not equate to job satisfaction. The first tip for employers to reduce feelings of dissatisfaction among their staff:

Make retention efforts more visible.

That led nicely into the second article. It is about regional restaurant chain that agreed to pay at least 90% of health-care premiums for hourly employees who work at least 20 hours a week. Talk about a retention tool!

Burgerville's experience is notable for the food-service industry, where turnover is high and fewer than half of chains offer health insurance for part-time hourly employees, according to People Report, a research firm. The chains that do offer benefits pay on average 49% of the cost for employees working at least 30 hours a week, People Report says.

Burgerville's initiative "not only improves quality of service but it saves money by not having to replace staff as frequently," said Darren Tristano, executive vice president at Technomic Inc., a Chicago consulting and research firm for the food industry.

In absorbing more of the costs, Burgerville's annual health-care bill nearly doubled, to $4.1 million from $2.1 million. But company leaders figured the move would boost recruiting and retention.

Executives say the plan paid for itself, and more. Turnover in 2006 plunged to 54%, from 128% in 2005. That's a big deal when it costs an average of $1,700 to replace and train a restaurant worker, according to People Report.

Mr. Harvey believes part-time hourly employees work harder to qualify for more hours, which are assigned on a priority system based on performance. Burgerville says that work ethic translates into higher revenue. Sales rose 11% in 2006 after the plan was implemented.

Today, 98% of Burgerville's 579 eligible hourly employees and 97% of its 161 eligible salaried employees are enrolled in its health plans.

All without the 'help' of the federal government. Simply amazing.

Thanks to Scott for the Burgerville article

Get Out Of The Way

2009-09-08T20:43:00.002-04:00

All we want is for the government to get out of the way...

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Michael Ramirez

Market Innovation Without Government Intervention

2009-09-08T06:59:00.002-04:00

Visit msnbc.com for Breaking News, World News, and News about the Economy

"Never underestimate the power of the profit motive and competitive market forces to bring about real health care reform. The 1,200 retail health clinics across the country are providing high quality care at lower costs than emergency rooms or physician offices, and they offer better, faster service, with longer and more convenient hours than a traditional medical office (watch MSNBC video above).

While politicians sit around and have endless debates about how to bring down health care costs and expand access to medical care through various grandiose government interventions and programs, the private marketplace is already doing it - lowering costs and expanding access at more than 1,000 retail clinics. And unlike government-based health care reform, the explosion of affordable, convenient retail health clinics across the country didn't require any tax increases, government spending or funding, or special legislation.

Retail clinics truly could be the "model for the future" for health care reform. When it comes to lowering costs and improving quality and service, government enterprises have a miserable track record, and competitive markets have a proven, excellent record. Retail clinics are just one example of thousands of cases of how market competition results in bringing down costs and improving customer service."

Mark Perry

Health Care Reform? Just Get The Government Out Of The Way

2009-09-05T22:44:00.001-04:00

In the midst of all the talk about a top-down overhaul and reworking of the health-care industry, supposedly to fix the failures of the private sector, two new studies show that the private sector could do a better job of reform if government would just get out of the way. Time Magazine features two Rand Corporation reports on the rise of a new phenomenon, retail health clinics, and the impact that price awareness and competition have on the market.

_________________________
The top-down reform proposed by
Congress threatens to stop real
reform and amplify everything that's
currently wrong with the system.
_________________________

Instead of hiding behind insurance co-pays, the clinics offer pricing up front to consumers, so that they can decide for themselves what to “buy” and how much they want to pay for service. This is the same mechanism that works to keep prices down and supply consistent in other areas of health care that insurance plans do not traditionally cover. For instance, cosmetic surgery and Lasik rely entirely on consumer compensation. There are no third-party payers to get in the way of rationally allocating resources to demand. In those markets, producers and consumers find each other in the normal manner, advertising, discounts, and price competition, and the market attracts new providers when scarcity appears and prices rise.

If we want to reform care, bend the cost curve downward, and promote supply in the health-care industry, we need to learn the lesson from retail health clinics. The top-down reform proposed by Congress threatens to stop real reform and amplify everything that's currently wrong with the system.

Edward Morrissey

FINAL SCORE

2009-09-05T21:59:00.004-04:00

William & Mary...26
UVA.....................14

Wellpoint CEO Speaks Out

2009-09-05T08:33:00.000-04:00

WellPoint CEO Angela Braly said in speech that by focusing on the insurance industry, those backing health reform are missing "a much bigger target" to lower costs. "Three cents of every health insurance premium dollar collected go toward insurer profits, while 87 cents go toward medical care," Braly said. And even if insurer's profits are "completely eliminated," the savings will only "pay for two days of healthcare in America."

Braly pointed out that Medicare spending "totaled $468 billion last year" and cited a study, which found that Medicare patients receive "evidence-based medicine, only about half the time. ... This inefficiency, she said, drives up costs and forms the 'crux of the problem.'" Braly added that she objects to the public option because its low reimbursement rates "would shift costs to private insurers," and families covered by private insurance "already pay about $2,500 per year" to make up for such care "provided by Medicare and Medicaid."

Duh! Increase In Coverage Increases Premium

2009-09-04T16:57:00.001-04:00

"The House health bill would raise insurance premiums for seniors but save money for those who spend more on drugs, a CBO study found." So starts an article we recently ran across.

The House health bill wants to reduce the amount seniors pay out-of-pocket for drugs (which is an INCREASE in coverage). That is a noble desire in and of itself. But to pay for the increased coverage, you need to raise premiums.

CBO director Douglas Elmendorf "said Medicare recipients would pay less out of pocket for prescriptions under the legislation. But for those who do not spend as much annually on drugs, the changes could result in higher insurance premiums without any added benefits." The House bill "would increase drug insurance coverage under the Medicare Part D drug program by closing the 'doughnut hole.' ... While the proposed changes would lead to lower drug costs for some Medicare beneficiaries, the push to increase coverage would increase costs for drug and insurance companies, resulting in higher drug benefit premiums for seniors. The average premium would increase by approximately 5 percent in 2011 and by 20 percent over the next decade."

It like the analogy of squeezing one of those long balloons clowns use. If you squeeze one end of it, the other side get bigger. Duh.

Cut Costs Without Rationing Care By Putting Patient Back In Charge

2009-09-02T07:46:00.003-04:00

"Decades of data confirm a simple truth: If we want to lower health costs, we need to put consumers back in charge. The greater the percentage that patients instead pay directly to their doctor out-of-pocket, the more patients are in charge.

Whether it's televisions, computers or Lasik eye surgery, when consumers are in charge, prices stay in check. In 1970, consumers paid for 62% of all privately purchased health care out-of-pocket. Today that percentage is just 26%.

_________________________

The only proven pursuer of value in American
medical care is the American consumer
_________________________

Where consumers have had the least control, costs have risen the most. As a study by one of the authors (Anderson) for the Pacific Research Institute study has shown, since 1970 the per-patient costs of Medicare and Medicaid have each risen one-third more than the combined per-patient costs of all other health care in America — the vast majority of which is purchased privately. And that's even without the Medicare prescription drug benefit.

So, how do we put consumers back in charge?
1. End the unfair tax on the uninsured. We should give tax credits to individuals and families who are uninsured or self-insured, thereby putting them on the same ground as those with employer-sponsored insurance.
2. Make it easier for consumers to see prices.
3. Encourage consumer-driven insurance models to give consumers skin in the game.

Unfortunately, the federal government currently limits the use of such incentives."

Tevi D. Troy and Jeffrey H. Anderson

There Is Common Sense In Washington

2009-08-31T06:41:00.001-04:00

Rep. Mike Rogers of Michigan with a very lucid and direct assessment of the universal health care bill. My only regret is that he does not question the 'myth of the 46 million uninsured'.

Political 'Public Service' Is Akin To Robin Hood

2009-08-30T08:35:00.000-04:00

...the only way a politician can "serve others" is to take money and other resources from some people to give it to others. Government has no money of its own, only what it can take as plunder from people who create value in the world. When they do so, they may actually be of help to those who are benefited, but the price is reducing the amount of wealth in a society, meaning there is less to go around. That's what "public service" as a politician -- as compared, for example, to a philanthropist, who uses his own money and/or skills and time to benefit others -- amounts to."

Alan Bock

Excessive Profits?

2009-08-29T07:46:00.001-04:00

The previous post talked about Rep. Henry Waxman's witch hunt on drug industry profits. Earlier in the month the president was bemoaning about insurance company profits because of mergers, lack of competition and 'excessive profit'.

According to the graph below which ranks industry profits, health care plans ranked 86th, hospitals 77th, and major drug manufacturers 7th. And before you start pointing at the major drug companies' profits, think of the risk they have with all of their R&D costs. And compare that to the most profitable industry - brewers. Granted they have a special place in my heart (and fridge) but, their R&D centers around what colors to use on the bottle and cans.

Where is the outrage from Rep. Waxman at the beer industry for their profits?

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