Another Bite Of The Apple

Apple 2


Are you feeling left out?  Do you long for the warm afterglow only experienced by the properly insured?  Are you ready to come in from the cold?  If you answered YES then you may be in luck.  The federal government has created a Special Enrollment (SEP) just for you.

This new SEP ends April 30, 2015.   This will be the last chance for many individuals and families to purchase health insurance coverage for 2015.  To qualify you must:

  • Currently be uninsured for 2015
  • Filed your 2014 tax return and paid the Patient Protection and Affordable Care Act (PPACA) penalty for being uninsured in 2014
  • State that you first became aware of the tax penalty while completing your 2014 tax return

Policies may be purchased on and off the Exchange.

Many of my clients have done the math and have opted out of the PPACA.  They are purchasing less expensive short term major medical policies and will pay the tax penalty if assessed.  Others will jump at this opportunity to finally purchase compliant coverage.

There won’t be another chance.

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Shopping At Garage Sales In Alternate Universes

Senate cufflinks

February 2015 – Washington DC

There are only two groups of tourists to our nation’s capital in the dead of winter, 8th graders with their teachers and chaperones and constituent visitors otherwise known as unpaid lobbyists.  It has been a long time since I had an 8th grader, so you know why I was wandering around the halls of Congress last week.

The National Association of Health Underwriters (NAHU) is the health insurance agents’ trade group.  NAHU holds a conference annually in Washington and I was here to listen to regulators, members of the Administration, and members of Congress address hundreds of agents from around the country.  I have to admit that I was impressed that not only did the new CEO of the Federal Marketplace ( come to talk with us, he even answered questions and promised to follow-up on specific issues.

And that was why we were in Washington.  At the risk of sounding almost altruistic, our main mission was to make the Patient Protection and Affordable Care Act (PPACA) work better for our clients.  Each of us has more than a few stories of clients who have benefited by the new law.  But, we can also cite plenty of examples of families and businesses who are no longer adequately insured due to correctable problems with the law and its administration.  Things have gotten better.  Last year was a disaster.  But I still spent almost 5 hours online and on the phone February 15th to enroll one family.  There is plenty of room for improvement.

Improvement requires the assistance of Congress.

I had appointments with members of both the House and the Senate in their offices.  These are always a crap shoot.  Sometimes you get to meet with the elected official.  Sometimes it is the legislative aide.  Some are prepped and ready.  And some are meeting with you out of courtesy.  There are only so many minutes in the day, only so many constituent visits our elected officials and staff can attend.  The halls were filled with Disabled American Veterans, a well coifed group of broadcasters, and a contingent of the blind.  The realtors and countless other groups, some with identifying name tags and some just with nice suits that were last worn at a relative’s wedding, preceded or quickly followed us into every office.  And each group came with a perfectly reasonable request, one of remarkable fairness that couldn’t help but move our country forward.

Our big get was a bi-partisan letter, authored by Congressmen John C Carney, Jr. (D-DE) and Daniel Benishek (R-MI), to Secretary Sylvia Burwell of the Department of Health and Human Services.  The key provision was the request to “create a dedicated customer service hotline for certified agents and brokers, navigators, marketplace assistors and state health officials to ensure that problems with enrollment are addressed quickly and effectively.”  In other words, we want to be able to call someone who has been trained to understand the issues and empowered to fix a problem once discovered.

One legislative aide finally asked me what else we wanted.

There are members of Congress, in both parties, who are dedicated to constituent service and have instructed their staffs to solve problems.  This blog has noted the help I have received from Senator Sherrod Brown’s (D-OH) office.  Other Democrats have little to no interest in problems.  They only want to hear success stories.  And some Republicans are collecting tales of woe.

I was in a Republican’s office (Don’t ask who!).  I was just one of seven in our delegation and I can’t even tell you why I had been included.  But I was there and my main job appeared to be to nod my head authoritatively.  I can do that.  His constituents brought a couple of important examples where the law of unintended consequences had caused significant harm to individuals and small businesses in his district.  He welcomed their report and arranged for his staffer to collect more.  It was at this point that I realized that he had no interest in solving any of these problems, just amassing a collection, a weapon for future debates and campaigns.

This was not the time to express my outrage.  (Cue up Mr. Cunix goes to Washington.)

I pushed my thumbnail hard into my index finger and looked around the room.  I saw awards and tchotchkes, the kind that you might find in most offices, and I was beginning to worry that I wasn’t going to be sufficiently distracted.  And then I focused on a picture on the wall right behind the Congressman.  There were eight Republican Presidents playing poker!  Really.  Teddy Roosevelt was glancing with admiration at Richard Nixon.  Reagan had a Bush on either side of him and Ike was standing in the background.  Abraham Lincoln had his back to us.  I don’t know if Abe Lincoln would play poker with Ronald Reagan or Richard Nixon if he had chance to come back to the living, but I do know that he would always sit with his back against the wall.  The name of the picture is Grand ‘Ol Gang.

Lincoln Memorial

My favorite Lincoln

The picture summed up everything I needed to say about this Congressman.  Republican first.  Not problem solver.  Not legislator.  But he is not alone.  There is a Congressman representing a district only a few hundred miles away with the corresponding picture of Democratic Presidents.  True Blues has Lyndon Johnson leaning over Harry Truman to talk with Woodrow Wilson.  JFK appears to be watching Jimmy Carter play poker with FDR and Bill Clinton.  And the picture’s owner is just as partisan, just as dedicated to his career.

Library of Congress

Library of Congress

Walking the halls of the utilitarian office buildings of the House of Representatives or the majestic buildings of the Senate, the Capitol, or the Library of Congress I began to wish that our elected officials simply aspired to be worthy of these buildings and the ideals that built them.  But these Congressmen and Congresswomen are no different than the men and women we revere from 50, 100, or even 150 years ago.  They had moments of greatness and reprehensible pettiness.  They lead and they followed.  Some of the giants of the Senate were not necessarily thought to have been giants in their own time.  Our grandchildren may one day be taught that George W. Bush and Jimmy Carter were great visionaries.  I doubt it, but it could happen.

And with that I joined a couple of my peers in one more meeting with a legislative aide.  She (the staffer) was fully up to speed on the issues and actually kept the broadcasters waiting.  And there were no poker pictures on the wall.



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Freeze Tag


Today’s edition of Health Insurance Issues With Dave may provide relief and cause panic.  Many of you will be relieved to know that the title is not a Frozen reference.  This is a Disney-free zone.  And way too many of you will become panic-stricken as I remind you that the Open Enrollment Period ends February 15th.

If you are under 65 and are not covered by the government or an employer sponsored group health insurance policy, you will have until Sunday night to either change your existing coverage or to purchase a policy.  A great national game of Freeze Tag begins at 12:01 AM Monday morning.  You are where you are until the government tags you again on November 15th.

Are you ready?  Are you in the right place?  FREEZE

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We’ll return to Health Insurance Issues With Dave after this quick ethics test:

You are standing at the corner of Mayfield Road and SOM Center at 2 AM.  The light is red and the crosswalk sign is against you.  There isn’t a car in sight.

  1. Do you cross the street?
  • Yes
  • No

Three people cross the street, two not even bothering to come to the corner.  A police car drives by and doesn’t stop to even warn the scofflaws.

2.  Do you cross the street now?

  • Yes
  • No

The above is brought to you courtesy of the U.S. Government and your friends at the Internal Revenue Service.  Would you like to rethink your answers?

The Individual Mandate is a core element of the Patient Protection and Affordable Care Act (PPACA).  The requirement of universal participation is an important component of any serious proposal that would extend coverage, without underwriting, to everyone.  It is an unfortunate part of human nature that many people would opt out of coverage until 5 minutes AFTER they suffered a major accident or experienced chest pains.

It is only under the threat of penalty that some people feel compelled to act responsibly.

Americans were required to have health insurance in 2014.  And not just any insurance.  Compliant, approved insurance.  The penalty free options for someone under 65 in 2014 were:

  • Employer provided group health policy
  • Individual policy purchased on the Exchange with an effective date of January 1, 2014 or later
  • Individual PPACA compliant policy purchased off the Exchange with an effective date of January 1, 2014
  • Individual policy purchased prior to March 2010 – Grandfathered
  • Individual policy purchased with an effective date between March 2010 and December 31, 2013 – Grandmothered
  • Medicaid, Medicare, or Veterans Administration provided
  • Granted a Hardship Waiver from the government

The Grandmothered policies are the special contracts that fall under the “If you like your coverage you can keep it” compromises of 2013 and the spring of 2014.  We are good for another year on most of them.

Those are acceptable options.  If you have one of these you don’t have to pay the Shared Responsibility Fee that I just mentioned in the blog and client update last week.  Are you in compliance?

Line 61 on Form 1040 is of little help.  Health care: Individual responsibility (see instructions) Full-year coverage (___).  Unless you purchased a policy on the Exchange, the government has no idea whether or not you had a compliant policy.  We just learned this past week that the insurers will not be providing Form 1095B confirming compliant coverage in 2014.  As UnitedHealth Care stated in an update to agents:

“The IRS has indicated that taxpayers will not need specific documentation to “check the box” in good faith and avoid the shared responsibility payment.”

The IRS has to trust us to voluntarily confess non-compliance. 

This is not a big surprise.  As I noted several months ago, the forms needed to verify compliant coverage have yet to be created.  Too complicated.  Too many moving parts.

Did you have any health insurance in 2014?  Did you save money and purchase short term coverage for the year?  Time for that ethics test.  Will you turn yourself in when the possibility of detection is almost nil?

Instead of simply waiting a year to impose the Individual Mandate, the Obama Administration has chosen to collect from the intensely honest or the poorly advised.  And in the end that is the real ethics test.  And the government failed.




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January 2015 Update

Punta Cana 2015

We are now two-thirds through this year’s open enrollment period.  This blog and client update will be published the week of January 19th once I return from vacation.  I am actually writing it on the 15th, the February 1st cut-off, from the beach of Punta Cana.  This promised to be the best week to get away.  The January 1st deadline, December 15th, is the new April 15th of health insurance.  February 15th, the last day to apply for open enrollment coverage in 2015, will also be very busy.  Today?  Not too bad.

Shared Responsibility Fee (The Tax you pay if you don’t have insurance) – It’s here.  It’s now.  And it will be enforced.  If you don’t have an official Patient Protection and Affordable Care Act (PPACA) qualified plan, a grandfathered policy, or in some instances a grandmothered contract, you are subject to this tax.  For 2015 it will be $325 or 2 percent, whichever is higher.

Tax?  So What! – According to a recent Gallup Poll, 35% of all uninsureds have decided that paying the Shared Responsibility Fee is better than buying the insurance.  Another 30% didn’t realize that they may be forced to pay this tax.

Short Term Major Medical – Against all odds, the insurers are doing record business selling non-compliant short term major medical policies.  These policies do not cover preexisting conditions and Preventive Care.  But, they are significantly cheaper and may have a deductible and out-of-pocket maximum that is thousands less than the standard PPACA compliant policy.  These policies also don’t suffer from the new, restrictive networks found with many of the major carriers.  It is hard to argue with a healthy 40 year old woman who wants to pay less when she purchases the policy and much less if she has to use it.

Pediatric Dental – All policies purchased off the Exchange must include Pediatric Dental whether or not any children are to be covered.  Companies like Medical Mutual of Ohio include this at no charge for adults.  HealthSpan and InHealth require a separate application for a no-charge Delta Dental contract.  Others have charged adults extra much the same way that men now have coverage for maternity.  The new Pediatric Dental includes medically necessary orthodontia.  The definition of medically necessary changes daily.  I’m waiting to see a claim paid before I tell you that this a real benefit and not just fluff.

Changes – A year into this and the biggest flaw of this system remains the ability to make any changes to an existing Exchange policy.  Your insurer cannot add on your new baby, cancel your policy, or even change your address.  Everything must go through the Exchange.  Whether you go online or call the phone center, you must still reopen the application and ALL BETS ARE OFF.  There is no guarantee that your subsidy, or even your eligibility won’t be jeopardized by the call.

I have called the national frustration number for clients.  We have verified, with the clients sitting in my office, that I am their agent, only to have the transaction muffed and my name disappear from the system.  This makes resolution that much more difficult a week or two later when we discover that the problem has not been fixed.

Winners – Unhealthy individuals, especially singles in their fifties earning approximately $30,000 a year, are some of my biggest winners.  Families with two or more children earning well in excess of the subsidy limits are also doing well under the new law.

Losers – The people most adversely affected by the PPACA are middle income workers where someone in the household has employer sponsored health insurance.  The rest of the family faces higher premiums and no assistance.  In truth, healthy Ohioans, even with a subsidy, are being priced out of the market.

I have been monitoring the progress of the PPACA through my clients, news reports, and Social Media.  I have found that most of the news follows a specific agenda – for or against the PPACA = for or against President Obama.  Social Media, especially Facebook, usually includes posts from the extremes, the incredibly unhealthy guy who now has amazing coverage for next to nothing or the young family forced to choose between unaffordable coverage or a Medicaid plan that may, or may not, send them to unfamiliar doctors and cross-town hospitals.

My clients, and those of my peers, have experienced the full range of benefits and problems of a new system created by a poorly written law and regulated by well-meaning if not always competent bureaucrats.  And as much as any failure frustrates us, we must admit that we can’t turn back the clock to 2009.  We must make it work for every American.

Insurance agents from around the country are scheduled to meet with members of Congress next month in Washington.  I have found similar meetings in Columbus with our state legislature both rewarding and frustrating.  This trip to the nation’s capital is worth my time and money if we can solve just one PPACA issue.

Feel free to comment on this post or to send me a private message if there is anything you would like me to convey to our elected officials during these meetings.

We will get through this together.


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When Trust Is No Longer An Option

No Money

The client was more than a little agitated.  She also wasn’t reticent about sharing her displeasure with me.  She and her husband had purchased excellent coverage for themselves and their employees.  Since this was about twenty years ago in the middle of the 1990’s, excellent really meant EXCELLENT.  Yet the tests performed in her doctor’s office had not been covered completely.  I looked at the Explanation Of Benefits and asked her when she had been in the hospital.

I wasn’t in the hospital!

The bill says that you were.  That’s why it wasn’t paid completely.  That test doesn’t require hospitalization.

I was in my doctor’s office at the Mount Sinai building.

The one in Beachwood by the mall?

Yes.  That’s where his office is.

That’s not a hospital.  My kids’ orthodontist is there.

What followed was a long and unpleasant phone call with Mount Sinai.  By labeling their medical office building a hospital, Mt. Sinai could substantially increase their fees.  Now all they had to do was get the insurance companies and the federal government to play along.

I may have been 6’4” and have played basketball weekly in the 90’s, but I couldn’t claim that I was NBA ready.  But if your doctor’s office and his stethoscope are owned by a hospital 10 miles away, it is time to send some flowers ‘cause you’re in the hospital.

Last Friday’s Plain Dealer had a Letter to the Editor from a father facing an unexpected bill for $162.54.  He had taken his two children to a MetroHealth satellite office for their flu shots.  The charge wasn’t for the shots.  The bill was for the facility fee, his family’s charge for sitting in the waiting room, walking past the water fountain, and breathing the air.  The total negotiated charge for the two flu shots was $258.  The facility fee was over half the bill.

MetroHealth is probably no better or worse than any of the region’s other major providers.  No better or worse because there is no way to determine what these charges will be until you get your bill.  Here is the result of my search of MetroHealth’s hospital charge information list.

The Cleveland Clinic began adding facility fees for outpatient services in March 2009.  The initial charge for an office visit was an astounding $55.  Why $55?  Because!  The Cleveland Clinic doles out information on a need to know basis.  And just because the money is coming out of your wallet doesn’t mean The Clinic thinks that you need to know.

This game of cat and mouse continues.  The government or the insurers block one path, the hospital administrators develop another avenue to increase cash flow.  This is not about doctors and it is not about care.

The government is now trying to limit facility fees charged by hospitals for Medicare patients treated in the Emergency Room.  The solution, one national fee regardless of the severity of the case, is hardly logical.  But the current system, “Let us charge whatever we want.  Trust us”, is neither logical nor sustainable.

Trust is no longer an option.  Giving the hospitals unfettered access to our wallets is no longer an option.  Unfortunately, we may have run out of options without finding a solution.




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The House Always Wins

Full House


The dealer wasn’t pleased.  There I was, sitting on a 9 and a 3, and I wasn’t taking a card.  “Are you sure”, he asked.  “Yeah, I’m cool.”  His up card was a queen.  He shook his head and continued around the table.  Finally, it was his turn.  He flipped over his down card, a six, and then busted on another face card.  The pit boss came over and gave our table a new dealer.  I told my friends that it was time to go and collected my chips.  They resisted, lost the next two hands, and then agreed to shift tables.

The House always wins.  You may not know how or why, but it does.

Since this is Health Insurance Issues With Dave, the House is the federal government and the cards are The Patient Protection and Affordable Care Act (PPACA).  The dealers and bit bosses?  That would be the regulators who dole out the ever-changing rules and regs.

This blog has contended that the passage of the PPACA began a ten year transformation of our health care payment system.  How we get there may either be by accident and reaction, or it may be entirely by design.  I’m not privy to that information.  This blog can only report on the status of our payment system and leave it for the readers to determine whether there is a pattern or just a random collection of factoids and moments.

We have just ended the first phase of this year’s Open Enrollment Period.  Here are a few things I’ve learned between November 15, 2014 and December 15, 2014.

  • Individuals and families saw a large price increase on subsidized health insurance policies.
  • The government aggressively pushed Americans to shop on the Exchange for cheaper policies.  They weren’t lying.  There really were cheaper policies.
  • More Ohioans were told that they shouldn’t buy insurance.  They should be covered by Medicaid.
  • Doctors who accept Medicaid are facing a significant fee cut.

Did subsidized policies take a big rate hike for 2015?  Yes and No.  Let’s look at a real example of a renewal.  Below is the 2014 and 2015 rate information for a woman in her early 50’s.  Her policy premium is reduced by over 50%.  Her deductible and copayments are also subsidized due to her income.

2014                                                                                               2015

$476.26                                   Premium                                   $524.92

265.00                                   Subsidy                                        265.00

$211.26                                   Net Premium                           $259.92

The policy increased 10%.  Though no one wants to pay more, 10% is not unreasonable.  But the client didn’t see 10%.  The client saw 23%.  The net premium is, for the client, the real premium.  Two minutes after you finish applying for coverage you cease to remember what the actual premium is.  The client only knows the net amount.  And now, even without a reduction in the subsidy, the policy is on the road to becoming unaffordable.  What are this woman’s options?  She can resign herself to paying more or she can purchase a lesser policy, a contract with a much higher deductible.

The client was on vacation in the Caribbean when he called me the morning of December 11th.  I have no idea how much the call cost him, but he had to talk to me.  His hotel room TV had American stations.  He saw a report urging everyone with a subsidized policy to go NOW to to renew.  Even though we had talked two weeks earlier, he was convinced that his coverage might end if he didn’t stop everything and try to access the Exchange.  I told him to relax.  And don’t forget the sunscreen.

The push was hard and heavy.  The Administration begged, advised, even ordered Americans to go onto to access cheaper insurance.  And yes, there were cheaper policies, some much cheaper.

Ohioans have three types of cheaper policies:

  1. Medicaid like policies sold to unsuspecting consumers
  2. The new federally funded co-ops
  3. Even higher deductibles

Many consumers were surprised by all of the new choices on the Exchange, such as Ambetter and CareSource.  One client, living in zip code 44118, was really excited about the premium until she discovered that the only available hospitals in Cuyahoga County were St. Vincent’s and Metro.  Really?  Would you really pay for insurance that didn’t include either The Cleveland Clinic or University Hospital?  Many insurers have switched to a skinny network.  Anthem’s individual policies no longer have The Cleveland Clinic in their network, but they still have University Hospital.  But neither?  I don’t think so.  But it is cheaper.  Herding the poor, and the people who make poor choices, into lesser coverage is part of the transformation process.

Major insurers are encountering another type of competitor.  New insurance companies are being created out of whole cloth.  Brand new.  No old debt.  No legacy clients, unhealthy and going nowhere.  These new companies are not only unencumbered by a past, they weren’t even stressed with funding.  We funded them.  The federal government loaned just under $2 billion dollars to create a dozen insurance co-ops to compete with the insurers.  Ohio has InHealth, a company that appears to be offering coverage at reality-based pricing.  Some states, such as Montana and Illinois, have co-ops staking out unsustainable territory at the very bottom of the rates on the Silver Level contracts.  This may damage the future choices of the people in those states, but it saves the federal government money since the subsidies are based on the second lowest Silver rate available.

We were worried about the uninsured.  What we need to address the UNDERinsured.   Each rate increase pushes more and more people to Bronze level policies with few or no office copayments or prescription cards.  Most of my unsubsidized clients are migrating in that direction.  It is the type of policy that I have.  But I also have the corresponding Health Savings Account.  I can withstand the hit.  People purchasing family policies with a $12,000 deductible are often doing this to save a couple hundred dollars per month.  They aren’t putting the money away.  And since they aren’t, there is no way that they can afford to have a small claim.

Yes, a small claim.  If you have incur a $200,000 bill and your insurance pays almost all of it, it is safe to say that the hospital will work with you to collect the little bit that is left.  But if you have an accident and run up a $5,000 bill, you have a problem.  All the insurer did was negotiate the final price.  You are on the hook for the whole bill and you may not find the hospital to be nearly as generous and forgiving.

There is talk about a new level of underwhelming.  COPPER.  One way to make insurance cheaper (and by design/default the entire system less sustainable) would be to offer even lower levels of insurance.  The Copper level might have a $18,000 to $20,000 family deductible.  Less premium now, more bankruptcy later.

The last lesson I learned this time out was about Medicaid.  Insurance rates have increased, in part due to all of the new benefits built into the PPACA.  Even the philosophically opposed have found themselves forced to seek subsidies as the premiums have overwhelmed their finances.  I am finding many young families and most families with multiple children are not qualifying for a subsidy.  No, they are being herded into Medicaid.  It is too early to tell if this is another flaw in the government’s software or if these people are really screwed.  I cannot get the State of Ohio to return a phone call, but their website appears to extend eligibility to higher income amounts if there are children in the home.

This becomes a bigger issue as primary care doctors are about to take a pay cut on Medicaid patients.  As we force more people into Medicaid, many who once had not only their own insurance but also their own doctors, we now will further limit their access to doctors and hospitals.

The first phase of this year’s Open Enrollment was a very long month and this has been a very long post.  But this is no time to suffer from a short attention span.  The transformation I perceive will take place because insurance becomes unaffordable, because the insurance you can purchase won’t be worth having, and because people never aspire to be treated as if they are poor.  And those pressures will usher in a Single Payer (think Medicare-like) system.  Whether that is by design or by accident is up to you to determine.  I just know that the house always wins.


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The Day We All Lost


I have been dreading this day for almost five years.  Bill Clinton, a man known for both his incredible weaknesses as much as for his successes was, above all, candid about his goals for his health care program.  In September 1993 he noted that revamping our system would result in both winners and losers.  It was his belief that the final outcome, universal health insurance coverage, outweighed the costs.  He acknowledged that the healthy and wealthy would have to pitch in, for the good of society, if the unhealthy and the poor were to be guaranteed access.  He wanted to level the playing field.  You may fault his program, G-d knows I did at the time, but you have to admire his candor.

Candor is in short supply.

Everyone lost on Monday, November 24, 2014.  When I say everyone, I mean EVERYONE – the employer, the employees, the insurer, me, and the American people.

This is the story of a Cleveland-area small business.  The names of the business, its owner, and the employees have all been changed to respect their privacy.  I’m certain that this is neither the first nor the last time this will happen.  It is simply the worst I’ve personally witnessed.  I need to share this with you.

Thomas Roberts is an American success story.  He and his parents emigrated here in search of freedom and opportunity.  His first task was to learn English.  He worked hard and eventually purchased a business.  That company has changed, evolved and grown over the last thirty years.  Tom Robert’s business is now a factory with over twenty employees.  Most of his people are unskilled or semi-skilled workers.

I have been Tom’s agent for twenty-five years.  He has always taken a personal interest in his employees.  There was never a question of what was the cheapest way to insure his employees even when many of his competitors declined to offer any benefits.  Our conversations always centered on what was the best coverage available within his budget.  Employers providing group health insurance are required to pay at least 50% of the employee’s premium.  Many don’t.  Thomas Roberts has always contributed a significantly higher percentage.

I moved the health insurance coverage to Kaiser a few years ago.  There were a few bumps in the road during the initial transition, but Tom was certain that this was the best option for his employees and he closed down one afternoon so that I could bring in a Kaiser rep to answer all of their questions and help them understand how to best access their health care.  Employee satisfaction improved.

That satisfaction and the feeling that their employer took care of them and their needs, ended on Monday.

Kaiser, now HealthSpan, decided this past summer to not seek transitional relief.  In other words, all of HealthSpan’s group contracts for businesses with fewer than 50 employees would migrate to new policies under The Patient Protection and Affordable Care Act (PPACA or Obamacare) at their renewal.  Mr. Roberts’ coverage renews December 1st.

What does that mean?  Under the new law we no longer evaluate risk.  All businesses, the healthiest and the unhealthiest, pay the same rates, the Community Rates, within a designated territory.  Every 30 year old in Greater Cleveland would pay the same price for a HealthSpan Gold Policy.  Every 60 year old, regardless of small employer, also pays the same much higher premium.

The premium jumped over 200%.  

Thomas Roberts was priced out of the market.   Game. Set. Match.  We explored every option, quoted all of the options, and ran the numbers up and down.  We could not find a way to keep group health insurance for his employees.

This is not HealthSpan’s fault.  As pointed out in previous posts, the whole concept of insurers maintaining two separate systems, Pre-PPACA and Post-PPACA, is expensive and inefficient.  Aetna, to the surprise of both agents and insureds, eliminated their grandfathered policies in the summer of 2010.  But this group, incredibly healthy and firmly in the insurer’s best rate class, is a huge loss for HealthSpan.

I spent an entire Sunday in my office designing individual policies for the employees.  Tom was shocked when I showed him the results.  The employees were screwed.  A few could be covered under a spouse’s group policy.  Several would be chased back to Medicaid (taxpayer funded) coverage.  The employees who qualified for a tax credit subsidy would see their monthly payments double or triple.  And the employees who didn’t qualify for a subsidy would now be forced to pay $400 to $600 per month for much less coverage.

We aren’t allowed to have a subsidized premium billed to an employer.  The employer cannot deduct the premium from an employee’s paycheck.  I sat with a young woman who was close to tears.  She won’t be insured as of December 1st.  Her husband doesn’t believe in insurance.  He grudgingly went along with her decision to participate as long as her share came out of Her paycheck.  But there would be no bills coming to His home.  That would be one fight too many.

I spent two days this week at the Roberts’ factory.  I know how few enrolled for coverage for December 1st.  What I don’t know is how many will still have insurance four months or six months from now.  And when those newly uninsured become sick or injured in the future it will be you and I, the American taxpayer, who will receive the bill.

The insurer lost.  The employer lost.  The employees lost.  The agent lost.  And in the end society, itself, lost on Monday, November 24, 2014.


This post includes a link to an interesting article written in 1994.  Paul Starr, “What Happened to Health Care Reform?”  The American Prospect no. 20 (Winter 1995): 20-31





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Running Out The Clock



Dean Smith knew how to take the air out of the ball.  Once he had the lead he had his team run the 4 corners offense, which is really just as much a defense as it is an offense, and ran out the clock.  Sure he won.  He won a lot.  But the system, in this case college basketball, finally stepped in to correct what appeared to be an abuse of the rules, and instituted the shot clock.  North Carolina is still a powerhouse, but basketball is now a much better game.

There is no shot clock in politics. Got a lead or a weak opponent and a politician can stall until the clock runs out at 7:30 PM on the first Tuesday in November.  And if the only election that ever matters is the current one, then all is right in the world.  But, some of us believe that elections are more important than any one candidate, or race, or party.  That principle has been on display here this last week or so.

The issue that is burning up Facebook, the blogosphere, and what is sure to be the topic of journalism schools for years to come are the actions of the North East Ohio Media Group (NEOMG) and the (formerly Cleveland) Plain Dealer.  Governor John Kasich, running with a big lead and what appears to be a lot of help, refused to debate his Democratic opponent Ed Fitzgerald.  And when they finally did appear in the same room, he pretty much refused to acknowledge that Fitzgerald even existed.  The video of their endorsement interview, streamed live, was the only unscripted insight Ohioans had into the two major party candidates.  It was hardly flattering.

What did the NEOMG do with a video that failed to enhance the already determined storyline? They took it down.  What did the Plain Dealer say about this newsworthy event?  NOTHING.  Both the NEOMG and the Plain Dealer are running out the clock.  A win is a win.  Maybe we’ll get an extra Sudoku in future Sunday papers.

I have been watching someone else run out the clock. Last month I wrote about my conversation with a member or Congressman Joyce’s staff.

  • October 9th – Talked with the staffer who promised to have someone from the legislative committee get back to me.
  • October 24th – Got a call from the same staffer who left a message that SHE was now ready to answer my questions.
  • October 28th – Finally talked again with the original staffer.  She clarified her original statement.  Yes the Congressman would vote again for the repeal of Obamacare (Patient Protection and Affordable Care Act) but he understood that nothing was going to change until after the next presidential election.  She asked me if I was familiar with the Republican alternative, The American Health Care Reform Act.  I confessed that I wasn’t and quickly brought it up on my screen.  A quick glance brought up several questions:
  1. Why isn’t Congressman Joyce a co-sponsor?
  2. What portions of the law does he endorse?
  3. What sections, specifically, would he change?

She begged off and said that someone from the legislative committee would get back to me. Minutes later I got an email from the legislative aide who asked me to send him my questions by email.

Finally, the legislative aide. I figured I had one shot to get a real answer.  This is what I sent:

Thank you for getting back to me.  As an insurance agent, I have a healthy skepticism of the PPACA and all Single Payer Systems.  But, as a realist, I am even more skeptical of simple, sound bite type answers.  My blog has predicted since November 3, 2010 that the PPACA would not be overturned.  In fact, I doubted at the time whether the Republican controlled House would generate meaningful legislation.  HB 2 of January 2011 answered that question. 

So I ask again what happens if the Coyote catches the Road Runner?  What happens, specifically, if you get your way?  I’ll report it.  I’ll write about it.  I’ll treat it with the respect and dignity it deserves.  No more and no less. 

I started to read The American Health Care Reform Act.  I notice that your employer/my Congressman is not a co-Sponsor.  Does that mean that he has an alternative?  Does that mean that he is willing to specifically point out those parts with which he agrees and disagrees?  AND LIKE SO MANY OTHERS, does he find the dessert part wonderful but would like to skip the vegies? 

The first thing I noticed about the AHCRA is that it immediately repels all provisions of the PPACA! “PPACA.—Effective as of the enactment of the Patient Protection and Affordable Care Act (Public Law 111–148), such Act is repealed, and the provisions of law amended or repealed by such Act are restored or revived as if such Act had not been enacted”. That would mean that every problem created by the PPACA is now fixed!  Yeah.  Of course, that also means that every problem solved by the PPACA is now back on the table.  Let me list a few:

  • Paperwork – Insurers, governments, and employers have spent millions on forms and compliance. 
  • Medical Underwriting – We are now insuring at standard premiums a lot of people who would have been charged extra due to preexisting conditions or lifestyle choices.  We are also now covering people who were declined in the past.  Are the insurers permitted to purge their books of all of these bad risks?  If not, how will they (the insurers) be compensated for these additional risks if the funding mechanism is destroyed?
  • Everyone appears to like Guaranteed Issue, the Waiver of Preexisting Conditions, and the inclusion of Maternity Coverage and Preventive Care.  Does the Congressman or this bill balance these benefits with an Individual Mandate enforced with sufficient penalties?
  • Lots of Greater Cleveland families earn under $100,000 per year and qualify for a Tax Credit Subsidy.  If your bill passes, these families lose their help.  How do you fix this problem and how fast can that funding be in place?
  • Medicaid expansion is helping our major hospitals.  The AHCRA eliminates millions of dollars to our economy.  How would you replace those dollars?I don’t ask these questions as a self-described Moderate Democrat.  I ask them as an insurance agent who interacts daily with 36 years’ worth of clients.  My clients live in this district.  Some have voted for Rep. Joyce in the past.  Some may in the future.  That is not my concern.  Both the Democrats and the Republicans have invaded the insurance business over the years.  The results are mixed, at best.  But every action, no matter how well intentioned, impacts MY CLIENTS.  So meaningless votes and extremist talk on MSNBC or FOX negatively impact my clients.So I will re-ask the questions I asked Maura a few weeks ago.  What happens to my clients the day after Obamacare is repealed?  How are they insured and how will they pay for it?
  • DAVE

It is November 3rd,, the day before the election, and no, I have not heard back from the Congressman’s office.  I need to know the answers to these questions.  YOU need to know what happens in the unlikely event that the PPACA were to be repealed.  Your access to health care depends on this.

The candidates may be running out the clock. But the country is more important than any one candidate or any one election.  And time is on Our Side.



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The Ghostwriter



What do rock stars, great athletes, and your health insurance company have in common?  Ghostwriters.  We know, instinctively, that a paid professional collected the recollections of the guitar slinger or the Hall of Fame running back and crafted a readable book, but we expect our insurers to write their own client letters.

That all changed this past spring.

My June 27th post, And Now A Note From The Department of Gobbledygook, detailed the fear and confusion caused by a letter sent by the insurance companies this past June.  The letter, sent to insureds with non-grandfathered pre-2014 policies, was not written by Medical Mutual or Anthem Blue Cross.  It was authored by the Department of Health and Human Services (HHS).  The insurers were not allowed to edit the letter for clarity.  They were not allowed to move a comma.

It turns out that the people who gave us the Patient Protection and Affordable Care Act (PPACA) had other career goals.  They wanted to be writers.  A new government penned letter is on its way.  And this one is no better than the last one.

The new letter, due out any day now, will be sent to people who purchased a policy on the Exchange. It will encourage you to revisit to update your info.  It will not, however, tell you that your 2014 policy has been changed for 2015.  No, the letter will state that your policy has been DISCONTINUED.

Any change – deductible, co-payment, maximum out-of-pocket (MOOP) – will generate this scary notification. I have not seen the letter, but if it is anything like June’s, a quick reading will give you the impression that you are being thrown out into the cold.  You are not.  You will have plenty of options.

  1. Do nothing. The insurer will move you to the 2015 policy closest to your current coverage.
  2. You can go back to the Exchange and look at your current insurer’s other offerings.
  3. You can go back to the Exchange and look at all of your choices.
  4. You can purchase an off-Exchange policy and skip the whole process. There is no tax credit subsidy with this option.

Please remember:

  • All 2014 and beyond policies will renew on January 1st no matter when you make your purchase.  That even includes policies acquired in the last few weeks.
  • The 2015 rates for both renewals and new business have yet to be released. We might not see those numbers until after the election.
  • If you purchased a policy through, you must go back to the Exchange to make any change, even a change of address.

We are only a few weeks away from our second try at open enrollment. By default, this year will go more smoothly than last.  Stay calm.  Don’t get too aggravated by the ghostwritten letters or the system crashes.  Like last year, we will persevere.

In the words of John Lennon, “Everything will be okay in the end.  If it’s not okay, it’s not the end.”

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