Tag Archives: healthcare

Imagine THIS Obamacare Replacement & Understand WHY It Makes So Much Sense [GOP!]

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The Bipartisan Solution ALL Could Accept?

It’s been almost 10 months since I published “The Case FOR Conservative Market-Based Universal Healthcare Reform“.  I’ve wondered if “The Voluntary Universal Access Public Option” wouldn’t have been a more effective title.  Either way, the words are intentional for a purpose, which should become obvious without further explanation.  For those unfamiliar, reading the original post may prove useful but not essential.

The March, 2016 post has achieved over 800 views.  Response has been mostly positive but mixed, with some of the harshest criticism coming from hyper sensitive market allies who trip up on the word “universal”.  I remember one response simply said, “This just makes so much sense!”  Of course, though biased, I agree!

I know it’s been viewed by several very influential thinkers as evidenced by re-tweets or likes of tweets with the link, including Sally Pipes of Pacific Research Institute; Dr Scott Gottlieb, American Enterprise Institute; John Goodman, Goodman Institute & father of the Health Savings Account; and Michael Cannon, Cato Institute & inspiration for Rep Dave Brat’s and Sen Jeff Flake’s Health Savings Account Expansion Act HR5324 and S2980 respectively (114th congress), the only proposal from the GOP so far that completely makes sense.  None have criticized (or publicly praised) the Market Universal concept, but Michael Cannon did surprisingly say in my  presence “What’s not to like?”.  I’ll attempt to confirm his observation by explaining the many advantages of this unique concept.

Market Universal (or The Universal Access Public Option), is an expansion of a suggestion to fix Medicare in David Hogberg’s 2015 book, Medicare’s Victims.  In that regard it should be called the Hogberg solution.  By simply putting people in charge of the money, with incentives to be frugal in its use, it more than any other proposal from the GOP,  most effectively addresses the simple three word solution central to any meaningful healthcare reform – Maximize Direct Payment.

It combines actual direct payment with money a voluntary participant must set aside from income into a personal HSA, with simulated direct payment beyond that from a shared 3 tiered participant funded pool, used only when the personal HSA is exhausted. Incentives to use pooled funds wisely are in the form of percentage rebates of unspent portions annually.  Because participation is voluntary, the mandate to contribute to an HSA is not, as some have suggested, coercive, anymore than the requirement to make payments when voluntarily entering into an insurance or mortgage contract.

Since annual pooled fund availability totals $75,000 it is the minimum even the poorest participant has available each year.  Note that the risk to the pool is limited, but the need to ration is eliminated by creation of very low cost private personal stop loss insurance to cover any really big events.  While $75,000 can be consumed very quickly currently, it will go much farther with the change to direct payment by individuals making choices in their self interest.

The advantage of mostly direct payment leads to huge cost elimination on many fronts….

Imagine the difference when doctors no longer have to incur the considerable cost of getting paid for their services, that some estimates claim reaches 30% or more.   This figure becomes quite believable listening to subscription-based direct primary care pioneer Dr Josh Umbehr of AtlasMD in Wichita KS state (at ~6:30) overhead at their practice, completely third party payer free, runs less than 30%, while overhead at insurance involved primary care practices hovers around 60%.

Imagine when ever more complex coding is a thing of the past and practices no longer have more employees dealing with third party payers than clinicians treating patients.

Imagine  when doctors or surrogates no longer waste time with pre-authorizations and fighting off rejections, before finally getting permission to treat and then paid, which often itself involves long waits and then arrives in bundles that make it difficult to identify individual case reimbursement errors as opposed to being paid directly at the time of service by the patient at a mutually agreed price.

Imagine how a new paradigm of near ubiquitous direct payment will direct everyone to honest transparent pricing and competition for patients based on price and quality, without being forced by law, like all medical services not traditionally covered by third party payment, such as Lasik, cosmetic surgery, or dental implants, where quality has gone up as prices (often seen on billboards or newspaper ads), have come down.  It would not be unreasonable to see the combination of eliminating the cost of getting paid and effects of innovation driven by true competition drive prices down by at least half.

Imagine when third party payer network arrangements with doctors (effectively cartels) become a thing of the past, especially for those with Medicaid, where in some locations accepting doctors can be very hard to find.  This means doctors will price their services based on what it costs to provide them, and the same price will be paid by anyone who walks through the door. Each will enjoy the same dignity of access as anyone else.  With each doctor currently having a separate network arrangement with each different plan from each insurance carrier, as well as dictated reimbursements for Medicare and Medicaid, and differing cumbersome regulations and requirements imposed by all, it’s no wonder doctors have so little time to spend with patients.  It doesn’t have to be this way, but continuing down a road of embracing what has become traditional third party payment will only continue our enslavement to it and its considerable costs to treat no one, both for doctors and the rest of us as patients.

Imagine when the lowest earners among us can participate in the same Market Universal Access Public Option as anyone, instead of another demeaning program (Medicaid) with its benefit cliff adding another cage of dependency.  After all, in America most earners do not have to stay low earners and should never be encouraged to do so.

Imagine a voluntary program based on expanded health savings accounts that allow for passing to a beneficiary upon death.  Within or without participation in Market Universal, this can present the potential to build family healthcare trusts that also further protect pooled funds by those who continue to opt for Market Universal.

Imagine we can reverse another troubling trend.  Fewer and fewer doctors are willing or able to put up with the increasing burden of third party payers and their and government payer regulations, paperwork, and cost to get paid.  I’ve heard doctors say 1/3 of their time seeing a Medicare patient involves government paperwork.  To escape, they are becoming employees of growing hospital systems, where they feel some relief but are still trapped in a system that demands they see more patients in less time and only make referrals within the family of connected practices, further challenging those who wish to remain independent.  Again it doesn’t have to be this way.

That these highly trained professionals we depend on so much can serve our medical needs better at lower cost in a system of freedom and markets is not just fanciful theory.  It’s being proven by market pioneers who have been rejecting the third party payer juggernaut for the clarity and peace of honest cash priced practice.

In primary care this rejection of the third party payer is being done both by fee for service and subscription based direct primary care arrangements.  Without the considerable overhead of engaging the external payers they can offer services at greatly reduced rates and spend much more time with patients, so important at the primary care level especially.  Many use their extra time to run in house pharmacies, labs, or imaging at a fraction of the usual cost, or arrange low cost services with outside vendors.  Many make house calls and offer direct access by email, cellphone, Skype, etc.  Appointments are scheduled in excess of half an hour for the same or next day.  They also can perform the wide range of procedures they are trained to do but which are often offloaded to specialists when they must see 30 patients in a day for 10 minutes each to make ends meet.  To easily find a direct primary care practice go here.  For one example of the growing number that offer remarkably affordable pricing go here.  Most importantly these doctors, without exception are happy.  I don’t want a mechanic working on my car who hates his job!

Yet how many, in our current system, on their own, can afford specialist care and complex surgeries for cash?  As it turns out over 60% of employers that provide health benefits self fund.  They are simply bill payers and, even as the plans are set up to look just like insurance to the employee, they are really not.  Led by pioneers like Dr G Keith Smith at Surgery Center of Oklahoma, whose practice has posted low honest bundled cash prices on the internet since 2009 and lowered prices five times, they have been able to reject third party payers entirely by contracting directly with self funded employers (while also accepting individual cash payers), under arrangements where the employee saves as well by having their copay and deductible waived when they choose to use their high value option.  In fact, in this report from Dr Smith, he explains how SSO saved their self funded county (and hence taxpayers) over $1 million in the first 9 months and a new contract with the state may save state taxpayers $95 million.  Even though it’s not quite like the doctor and patient dealing directly, the benefits of this form of direct payment are enormous and it’s become a growing movement, with cash priced facilities even competing against each other at sites like pricinghealthcare.com.  With Market Universal as an option, more individuals will be in the position of self funded employers to choose where to spend based on price and quality.  It’s time politicians take notice of these positive developments and understand good policy that lowers costs resides in trusting markets and free choice rather than bureaucratic control.

It’s important to understand Market Universal (or the Universal Access Public Option) is proposed as a voluntary program that precludes nothing else.  It starts by putting the Expanded Health Savings Account concept of the Brat or Flake bills, themselves inspired by Cato’s Michael Cannon’s Large HSA concept, at its core.  Thus replace should start with expanded HSAs, which alone can inspire many positive changes as employers likely will voluntarily and gladly move from defined benefit to defined contribution health benefits, thereby keeping (but not requiring) the employer connection to health insurance while removing its toxic provision. Employer matches of employee contributions to a personal HSA will then likely become as common as to 401k plans.  Whether employees choose to use their HSA to fund medical services only, purchase medical insurance products they own independent of employment, or become a participant in the Market Universal Healthcare program is entirely up to them.

Market Universal is intended as a lifetime commitment, and following an open period upon initial availability, participants would have to sign on after age 18 and before age 25.  The mandate to contribute to an HSA, up to set balance limits, is within an entirely voluntary program, thereby a freely accepted obligation.  Participants only would be flat taxed sufficient to fully fund the shared pool, which could be kept separate from government hands and administered by private contracted book keepers much like the Federal Thrift Savings retirement plan.  Participants would have the opportunity to exit at any time but reentry would not be allowed.

Keep in mind Market Universal is an option that at once replaces Medicare and Medicaid so the current Medicare tax ends, and states no longer have to tax to fund  their portion of Medicaid.  Since networks become irrelevant, low earning participants have the same access to care as anyone, but the same obligation to direct a portion of earnings, including any government transfer payments or unemployment compensation, to a personal HSA.  While low earners pay less into their personal HSA, they will be more likely to use pooled funds, as higher income participants contributing more to HSAs will be less likely to take from pooled funds. Likewise those with higher incomes will contribute much more to pooled funds but, since also contributing more to their HSA, will less often use pooled funds and more often be rebated incentive payments for what they do not spend.  Beyond the pool’s annual limit, all will have the option to buy ultra high deductible (pooled funds + HSA balance + other personal savings available) personal stop loss protection, which due to its infrequency of use, should be very inexpensive, even at the minimum $75,000 deductible level and be much less vulnerable to the negative effects of community rating, which itself would be tempered by many older individuals having accumulated more in their HSAs, sufficient to safely allow its inclusion.  Guaranteed issue though would still require restriction past initial entry into the program, possibly by surtax to the pool or some other mechanism for those who wait.

No one would be forced into the Market Universal program.  Traditional insurance could coexist.  Those who now enjoy the Obamacare exempt faith based medical sharing arrangements could continue as is, and new ones, faith based or otherwise could be formed.  In many aspects, Market Universal is an institutionalized version of such arrangements.  As stated earlier, Market Universal precludes nothing else, as it provides an attractive option, especially with the ending of Medicare and Medicaid programs.

While socialist aspects are admittedly present, as they are by degree in the health systems of every other nation (and indeed are central to insurance itself), they will be under a layer of market discipline and individual responsibility first and foremost.  Market Universal can be an uniquely American concept that dares to trust market forces and personal choice to set prices, lower costs, and best direct scarce resources in an area where fellow humans’ lives and health are at stake.  It’s not the same as losing a car or house to lack of insurance or inability to pay, and it’s time conservatives recognize this.  A great overview of how countries around the world approach healthcare can be found in Chapter 3 “In Search of the Best Health Care System in the World” of James Bartholomew’s intriguing new book “The Welfare of Nations“.

To conclude, perhaps the biggest advantage of Market Universal (or the Universal Access Public Option) is that such an Obamacare replacement proposal would almost certainly garner some support from the Left, allowing passage in bipartisan fashion, as it supplants and roadblocks their otherwise never ending desire for single payer universal healthcare in a way no other suggested replacement plan can do.

The Right has said they seek a market solution, while the Left screams for universal coverage or at least a public option.  Under unique Market Universal alone, it is possible to do both!

 

 

Stolen Health Data Threatens Pennsylvanians/Others With Identity Theft

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Chinese Hackers implicated

Monday August 18 CNN Money reported Community Health Systems, headquartered in Franklin, Tennessee, announced it’s 206 hospital system, spanning 29 states, had been hacked, exposing critical personal information of 4.5 million patients of its affiliated physicians.  Anyone who used the services of a linked doctor in the past five years, even if never seen at a hospital, is potentially at risk.

Pennsylvania is one of seven states identified as having the most significant presence in the Community Health Systems network, operating 20 hospitals in the Commonwealth.  As a rough estimate, 20 of 206 hospitals is 9.7% of the hospitals in the network.  9.7% of the reported 4.5 million patients suggests about 436,500 Pennsylvanians could be at risk.

It’s reported that the hackers, identified as Chinese, did not get any information related to medical history or credit cards, but information critical to obtaining credit cards and stealing the identities of those at risk, including names, social security numbers, addresses, birthdays, and telephone numbers.  Community Health Systems has said it will be offering identity theft prevention services when it notifies individual patients.

Spokesperson Jason McSherry, representing affiliated and affected Memorial Hospital in York, PA, provided the following statement, shared here in its entirety:

Limited personal identification data belonging to some patients who were seen at physician practices and clinics affiliated with Memorial Hospital over the past five years was transferred out of our organization in a criminal cyber attack by a foreign-based intruder. The transferred information did not include any medical information or credit card information, but it did include names, addresses, birthdates, telephone numbers and social security numbers.

We take very seriously the security and confidentiality of private patient information and we sincerely regret any concern or inconvenience to patients. Though we have no reason to believe that this data would ever be used, all affected patients are being notified by letter and offered free identity theft protection.

Our organization believes the intruder was a foreign-based group out of China that was likely looking for intellectual property. The intruder used highly sophisticated methods to bypass security systems. The intruder has been eradicated and applications have been deployed to protect against future attacks. We are working with federal law enforcement authorities in their investigation and will support prosecution of those responsible for this attack.

Many American companies and organizations have been victimized by foreign-based cyber intrusions. It is up to the Federal Government to create a national cyber defense that can prevent this type of criminal invasion from happening in the future.

In discussion with McSherry, he emphasized that stolen information resided in connected doctors offices rather than the hospitals.  For this reason, he does not think anyone using a hospital directly for emergency or any other reason would be at risk.  The Memorial Hospital website currently lists 267 affiliated physicians.

McSherry also said that not all network hospitals are affected by the breach.  For instance, the affiliated nearby Carlisle Regional Medical Center, although part of the Community Health Centers network, uses a different information system.  He did not know how many different information systems are used by Community Health Centers.

Back to the provided statement, it’s interesting that Community Health Centers looks to the Federal Government to “create a national cyber defense that can prevent this type of criminal invasion from happening in the future”.  There may be some justification to their position, as it’s the Federal Government that’s been dictating so much of what has been happening in medicine.

HIPAA, the 1996 Health Insurance Portability and Accountability Act; ASCA, the 2001 Administrative Simplification Compliance Act; HITECH, the 2009 Health Information Technology for Economic and Clinical Health Act; PPACA, the 2010 Patient Protection and Affordability Act all, along with regulations promulgated under them, address, in various ways, requirements concerning electronic medical records, their use, protection and transmission.  While purported to be money saving measures or patient protections, this maze of imposed regulations, with cost of compliance and threat of substantial penalties, has been driving doctors out of independent practice to hospital employment or out of the profession entirely, while exposing patients to hacking risks, as we’ve seen here.

In addition, can the same Federal Government that runs the Post Office or Veterans Administration really ever do more than stay one step ahead of hackers in protecting us, as the cost of the attempt must be born by all?

Note: This article shared to WatchdogWire-Pennsylvania

GOP Stuck in ACA Replacement “Plan Trap” as Magic Bullet Solution Hides in Plain Sight

MagicBullet

Best Plan is NO Plan

Whether by reaction to charges from Obamacare supporters on the Left, or by their own lack of faith in freedom over planning, Republicans, not one of whom voted for the Affordable Care Act, along with conservative allied groups, think tanks, or prominent individuals, are, by last count, now promoting close to a dozen different concepts of how to replace one version of federal government planning with another less abrasive one.  Despite many replacement proposals, Republicans in congress seem unable to coalesce around any one approach, still leaving the impression they have none.

Some of the proposals are introduced bills. Others are wish lists of items to be in bills.  All have myriad suggestions that either move money around by extending tax deductions or refundable credits, allow formation of small business associations, require price transparency, reform medical malpractice, enhance health savings accounts, shuffle money to states for high risk pools, or various changes to Medicare and Medicaid, among others.

Far away the most popular inclusion is selling health insurance across state lines, itself a dangerous (and here) invitation to Federal micromanagement under the twisted  modern interpretation of the Commerce clause.

Such is the pressure and propensity for government to “do something” that bears on both sides of the political spectrum.  This is the plan trap.

Rarely is there a peep from anyone suggesting that no plan is the proper path, that simple policies to promote, restore, and support the proper functioning of the free market, usually by removing government intrusion rather than supplanting it, should be the goal.  One lone voice, Association of American Physicians and Surgeons past-president Dr Alieta Eck, GOP candidate for the 12th Congressional district from New Jersey, wrote an article defending freedom over planning in January 2014.  She opens:

We constantly are told that “while ObamaCare might not be perfect, the right has not come up with a better plan.” Is it possible that we do not need a “plan” at all?

Think about it. Has the federal government set up a food plan for all? A housing plan? Is the Secretary of Whatever empowered to decide what and when we eat? What kind of house each of us lives in? Of course not. We work, we plan and we buy what we need, saving up for the big-ticket items. Government does not control us, nor should it.

Yet one element contained in a few of the plans and wish lists can be the basis for a market revolution.  Unfortunately, no one seems to have grasped the power of its singular focus.  Had Dr Ben Carson simply stopped at Step 1 of his still in progress 5 step plan he would be almost completely there.

Relatively simple modification, enhancement, and expansion of tax policy surrounding HSAs, done right, has the power to be a true game changer by its potential to encourage employers to drop their long standing provision of health insurance in favor of a defined contribution approach.  It is the magic bullet.  It hides in plain sight, and here is how to get there:

Please follow these simple policy modifications:

1) Decouple HSAs from the requirement to be attached to any insurance policy.  While HSAs could still be attached to insurance (suitable for many), anyone should be allowed (and perhaps even required) to have an HSA.  Monies in HSAs receive rare triple tax advantage and protect others from the owner’s potential inability to pay for needed medical services.

2) Allow the purchase of health insurance or medical services through an HSA.  This establishes favored equal tax treatment without the need for separate legislation.

3) Greatly expand contribution limits to allow #2 to happen.  The HSA can be the tax advantaged conduit for all medically related purchases allowed under it.

4) Allow employers to contribute pre tax to an employee’s private HSA.  This is the crucial trigger for a spontaneous move of employers away from policy provision to defined contribution.  Resulting individual ownership solves portability and suitability issues for those who choose to buy health insurance in the open market through their HSA.  Employers could offer direct contributions or matches to employee HSAs.  Contributions from several employers could be combined, as well as HSA assets among family members’ accounts to purchase one insurance contract if desired.

5) Establish a permanent mechanism whereby Americans can look to each other rather than government for assistance by allowing gifting from one HSA to another both within and beyond family connections.  This is similar to the medical sharing ministry concept without the structure of membership or formal organization.  Any groups could pledge to come to the assistance of each other as needed. Such transfers could keep some people away from Medicaid, where access problems are well known or safely allow lower cost policies with higher deductible amounts.

6) For those in need fund a portion of all government assistance transfer payments into personal HSAs to be used ahead of Medicaid.  The power and influence of ownership is stronger than artificially concocted restrictions on use.  Funds from HSA extend dignity of choice and equal access until exhausted

Nothing more at the federal level may be necessary.  States would have to do their part by discovering their proper constrained regulatory role, requiring sufficient reserves to pay claims and enforcing rather than defining terms of health insurance contracts buyers and sellers find right for them.  All this, of course, requires and follows total Obamacare repeal.

While the benefits of defined contribution in a free market (not to escape or game Obamacare) have been recognized (tops list in American Doctors for Truth Plan) and discussed, no one has suggested a good way to transition. Less attention has been paid to the damage done by employer provision of health insurance, which itself was propelled by government tinkering with wage controls in World War II.

Frank Chodorov, in his 1959 book The Rise and Fall of Society, provides clues to understand why employer provision has been the enabling force of most of our problems.  He argues that a natural law of human behavior leads men to seek the highest degree of satisfactions with the least expense of labor to thereby pursue limitless desires, in order to obtain even greater gratifications.  This leads to efficiencies of effort and specialization of tasks via cooperation with others in forming societies.

Unfortunately this natural inclination also presents a weakness to seek something for nothing.  Such is the case when the employer provision of health insurance disconnects the employee from its cost.  As soon as the employee disassociates health insurance with being a part of his employer’s total cost of his employment, rather than realizing he is really giving his employer permission to spend his money in ways that may be against his best interest, he’s in trouble.  He will request or even demand more, without consideration of alternatives that would be likely choices if he was paying directly.

This then is the source of a gradual movement away from direct payment, even for that normally within the ability to easily afford otherwise, to prepayment schemes that defy the normal purpose and function of insurance to protect assets from expenses that are beyond the ability to pay.

This excess third party payment itself bolsters the illusion of getting “covered” services for free or almost free, even as the premium includes the incentivized overuse of others when not getting one’s own.  It is through these false satisfactions that we accept in healthcare what we don’t see anywhere else in our economy, a situation where almost every transaction involves, at least in part, someone else’s money, driving overuse from both the consumer and provider side along with the associated administrative costs to accomplish it.

It’s not hard to imagine how employer provision of car insurance over time would look just as ridiculous.  Oil changes would require a small copay and many other services would be “covered”.  The brake lobby would have used safety as an excuse to convince legislators to require brake “coverage” in every policy issued, all as employees, under the illusion of something for nothing, would keep asking and demanding more “generous coverage” from employers.

On the other hand, employees reconnected to cost through defined contribution, sparked by simple modification of tax policy related to HSAs, in states that likewise get government out of the way to allow multiple market choices, will make wise decisions that fit their specific financial needs.  The abuses of excess third party payment will naturally end and the free market magic bullet solution some say cannot exist will be a reality.  No one thing can accomplish so much by doing so little.

Note: This article shared to Watchdogwire-Pennsylvania

Can Obamacare’s “Barrycades” to Insurance Freedom be Crossed?

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Gettysburg Battlefield Aug 13 2013

Not so unlike the fences, signs and traffic cones used to unnecessarily block Americans from their open space national treasures during the recent Federal Government shutdown, similar “Barrycades” to healthcare and insurance freedom are limiting Americans’ ability to freely enter into contracts on terms they decide are right for them.  As the millions having their health insurance policies cancelled are learning, there is currently not an option to simply pay the tax, if necessary, and even forgo the subsidy for those willing, in order to keep a health insurance policy they may have owned for years.

While the freedom to contract, as provided in Article 1, Section 10 of the United States Constitution may seem clear to many, who likely consider it one of our foundational rights, it has endured a surprisingly rocky history in our courts, and as such, provides no guarantee of support against the impositions of the Affordable Care Act.  In America today, Obamacare is erecting barriers to contract freedom by attempting to restrict terms of health insurance policies to those dictated by powerful government bureaucrats, in total disregard of individual choice or basic considerations of sound personal finance.

Especially hard to understand is that a tax can be paid to legally remain completely uninsured, yet plans not deemed “qualified” are not supported as better than nothing (and in many cases completely adequate) in relieving others of ever having to pick up for those without the resources to fend for themselves.  Wasn’t that the stated goal all along?  Like so much of Obamacare, this makes no sense and can only be about elitist control, a step into socialism Americans used to think only happened elsewhere.

Also, with a growing healthcare freedom movement by doctors to eliminate third party payers entirely, from at least primary care, by the establishment of direct pay cash-only pay-per-use or concierge practice models, other options will be needed for those who choose this interesting, and so far, legal alternative.  The use of still available critical illness insurance, as a proxy for unavailable pure high deductible insurance that would make much more sense in these situations, has been suggested.  Dr. Merrill Matthews, of the Institute for Policy Innovation, in a recent article in Forbes, shows how being wrapped in a cloak of life insurance has allowed the critical illness insurance option to survive, and may be a good choice, if not ideal, for many.

As I wrote in a post last December, the curious Miscellaneous Provisions, Subtitle G, Section 1555 single paragraph in the Affordable Care Act clearly says that issuers of health insurance are not required to participate under the act, nor can fines or penalties be imposed for choosing to not participate.  When this is combined with the option for states to regulate insurance, as has been tradition under authority of the McCarran-Ferguson Act of 1945, questions arise as to what states may still be able to do.

Even under Obamacare currently, states may add to the essential minimum benefit requirements of insurance needed to “qualify”.  So states are still involved in their health insurance regulation, if only to a much reduced degree.  A question is how far that authority goes the other way.  Could a state right now, in answer to the current mess of cancellations along with a failed exchange website, exploit the crisis to require the suspension and reversal of all policy cancellations within its borders until the exchanges are fixed?  Could they allow and even require companies that want to sell health insurance in their state to offer the choice of non qualifying plans along side or in place of (Section 1555) Obamacare compliant plans, sold off the exchange, now and in the future?  Could states take charge of the situation to the point that, if Obamacare cannot be eliminated, there could remain legal alternative insurance options apart from Obamacare, even if the federal tax would be due and subsidies not available?

Senator Ron Johnson of Wisconsin has made an attempt to settle this question at the Federal level, at least for currently existing plans, with the introduction of what he calls the “If You Like Your Health Plan, You Can Keep it Act“.  Current political reality makes actual passage unlikely, of course, returning to the possibility that states could act on their own.

One of those I respect most in the Obamacare debate, Michael F Cannon, at Cato Institute, told me the Supremacy Clause would make my suggested state actions illegal, however one of the attorneys on a panel event I attended at Cato was less dismissive of my suggestion of what states could possibly do.  Adding further speculation is the answer I got from ehealthinsurance.com when I questioned them about a month ago.  Their first contact representative, told me they expect to see some states “go rogue” and attempt to offer non Obamacare compliant choices in the future.

As with the shutdown “Barrycades”, when free citizens defiantly crossed the lines and prevailed, will there arise states that tell the Federal Government they have gone too far and we the people have had enough?

Note: This post shared to WatchdogWire-Pennsylvania

An Inquiry into Healthcare.gov’s “Special Enrollment Periods”

So here we are, the first day the Obamacare exchanges or marketplaces or whatever are open for business.  I think of it more as the day America stepped across the threshold to possibly inescapable socialism.  That’s just me.

I had a rough day as I realized an error in my last post and had to insert an update and correction to my assertion that guaranteed issue would allow waiting to buy health insurance until the onset of serious illness.  This still could be true but only if it would occur in a subsequent open season, the part I had missed.  Even though I had remembered hearing talk of no limits, the open season requirement went past me because I went with what I thought I had heard without checking it out.  Confession.

I should have questioned this because employer provided insurance is provided guaranteed issue and they generally limit enrollment to open seasons, with exceptions for certain life events.  I knew this.  Of course with employers there is an initial screening based on who they hire so they are never looking at people too unhealthy to work or apply for the job.

In my ensuing gloom I decided to poke around the Healthcare.gov website.  I was just visiting to see what it looked like and learn what I could.  Sure enough I stumbled on this part about not missing the open enrollment period:

OpenEnrollment

Just as with an employer there was the exception for “qualifying life event” and, being curious, I clicked the link and found this:

QualifyingLifeEvent

That example “moving to a new state” jumped off the page.  I sensed fun with that one!  In seconds I hopped on the phone and dialed the toll free number at the bottom of the page.  After a surprisingly short dance through options and with almost no wait I was speaking to a live representative.

My question was brief and to the point.  According to what I had seen, could I choose to remain uninsured, pay out of pocket and then, if I experience a serious illness, simply move to another state to buy a policy outside the open season?  If I could just cross that state line would I be good to go?  These sound like silly questions, and my gut tells me that this exclusion would only apply if I had owned a policy before moving.

The representative though, did not explain or answer my question to satisfy my gut.  His response was, what I can only guess, outside the box of his training.  “Well, I guess so, if that’s what it says,” was his answer!  Duh!

And no, I still cannot believe this representative’s response was correct, because if it was then I should further revise and update “Is Paying the Obamacare Tax a Better Choice for the Young and Healthy“, my last post to this blog.

Screen grabs were off of the Healthcare.gov website.

Note: This post was shared to WatchdogWire-Pennsylvania

Is Paying the Obamacare Tax a Better Choice for the Young and Healthy?

Urgent Update and Correction:

Just as with this article at Business Insider, I missed the fact that enrollment in the exchanges is limited to open enrollment periods.

This does change the risk dynamics of paying the tax rather than buying the insurance.  Any confusion caused by this oversight is regretted.  Even still, those with either few assets to lose or those with sufficient assets to carry them to the next enrollment period, may still want to take the risks as presented in the original post.  The availability of sensible catastrophic true high deductible “real” insurance that Obamacare prohibits and has not been offered in the states would be the answer to this dilemma.

Original Post (with slight unrelated edits):

The following discussion is in no way intended as specific advice as everyone’s situation is different and unique to them, but only as a guide to uninsured young and healthy individuals to understand their choice in whether to buy health insurance on an Obamacare exchange to avoid paying the tax or paying the tax to relieve them of the obligation to purchase the insurance.  The only mandate for the uninsured is to make this choice, not to do one or the other.

The other purpose here is to counter biased government efforts that will insist the only choice is which insurance exchange plan to buy and how to sign up for it, ignoring the possible benefit of paying the tax instead.  This government effort is substantial, as here in Pennsylvania alone, over $6 million of taxpayer money is being directed to one critical thing Obamacare success is dependent on, enrolling as many young and healthy people as possible.  According to Enroll America-Pennsylvania, on July 10, 2013 “health centers in Pennsylvania were awarded a total of $4,196,333 to provide outreach and enrollment assistance.”  They also indicate that an additional $2,071,458 is coming soon to organizations that will act as “Navigators” who will likely never discuss the non-insurance option that is also important for the young and healthy to understand in making their choice.

Young people need to know a few facts of Obamacare at the outset.  Because the law limits charging the old and less healthy more than three times what the young and healthy pay, this shifts more burden to the young.  Offsetting this are premium subsidies to make the insurance choices seem affordable, but as the young advance their careers and their earnings these subsidies fade.  Another important consideration is that shortsighted bureaucrats designed Obamacare to allow no exclusion for previously existing conditions, giving the opportunity to purchase insurance after the onset of a serious illness, even from a hospital bed. Update: Still true, but only if during a subsequent open enrollment period.

The pay-the-tax choice may be useful for young and healthy people who have the discipline to put aside the difference (compared to paying exchange premiums) for their basic normal medical needs, and especially if they then find one of a growing number of physicians offering much lower prices by casting off third party payment for a cash practice.  It must be understood that this choice is not without the risk of an occurrence of a sudden and severe medical condition causing total incapacitation.  This extremely rare event could prevent them from signing up for insurance on an exchange until they are sufficiently recovered to do so.  Update: So long as it is within or until the next open enrollment period.

Putting the sudden-and-severe risk in perspective though is important.  Everyday young healthy people take on huge amounts of student loan debt, with no guarantee of acquiring a job sufficient to easily pay it back, even as student loan debt obligations saddle the borrower for life because  they are not dischargeable in bankruptcy.  Medical debts, on the other hand, can be eliminated through bankruptcy should the highly unlikely occur.  This is where an option to pay the tax and buy a very low cost non-Obamacare compliant policy that pays nothing up to perhaps a $10,000 or even $15,000 deductible, then covers everything above that, would be so useful, but no such thing exists.  Such a plan would be good enough to prevent bankruptcy in most cases and leave substantially less obligation than many young people have willingly taken on with student loans.

It is thus important for young healthy people to see the big picture, understand all their options, then act in their best interest, in reaction to the rules presented to them by the Affordable Care Act.  This discussion has been meant as a guide in starting the navigation of that process.  Additionally, there is a wonderful new resource blog, The Self -Pay Patient, that unfolds a myriad of already available but little known alternatives to insurance, and I highly suggest a visit for anyone serious about learning the many other options available to them, since no government navigator will ever mention any of it.

Note: This post was shared to WatchdogWire

The Argument Against Selling Health Insurance Across State Lines

A popular idea tossed around in the search for effective healthcare/insurance reform is the notion of selling insurance across state lines.   Along with malpractice reform, this often tops the list of solutions, especially from Republicans, even as the main culprit, unnecessary third-party payment, is not even mentioned.  At a recent debate for an open seat in the US House in the district where I live all five GOP candidates spoke in favor of this concept.  Yet is it a good idea or possibly the source of more trouble, and are there other means to attack the existing problem?

On the surface it would seem like a fantastic idea and with good reason.  The argument goes that more competition would bring down prices.  After all, the opportunity to purchase a health plan from a company not doing business in a particular state would now be available.  More importantly, because insurance is separately regulated state by state, it would now be possible to circumvent excessive mandates and regulations that much more dramatically affect price than the number of company choices available.  Both the number of coverage mandates and the nature of them varies greatly from one state to another.  In a few states simply requirements for community rating and guaranteed issue have made the individual market so expensive as to all but destroy it.  In this sense, so long as there are at least three or four company choices anyway, the ability to purchase insurance regulated and approved in another state would change the nature of the competition from one of price to that of determining the least amount of expensive regulation and mandates the buyer felt was needed for their protection.  So far, so good.  What is not to like?

The problem and basis for the argument against what would seem like such a good idea on its surface is the Commerce Clause of the US Constitution, or rather more correctly, the modern perverted interpretation of it.  What began as a provision to facilitate exchange among the states has over time become an excuse for the Federal Government to impose all manner of meddling and micro-management to anything bought or sold across state lines.  The fact that insurance is not bought and sold across state lines should serve as a defense against such federal meddling and against the imposition of Obamacare itself.  In this regard, providing for such interstate commerce would open the door to the legitimate intrusion of the federal government and surrender of the defense that exists without it.

The origin of state control of insurance was the McCarran-Furgeson Act of 1945 which exempted insurance from federal anti-trust laws and left regulation to the states.  Right up to today this has kept federal regulators mostly out of the picture, with the exception being health insurance.  Even there federal intrusions have been few and limited until the passage of Obamacare.  The fact that they went unchallenged by the states was absolutely a mistake by the states, but the extent and nature of the intrusions was of limited scope and never sparked challenges that should have occurred.  Now with the passage of Obamacare the federal government has become the bull in the china shop, seeing no limit to its authority, even though a reasonable defense against it still remains so long as we do not move to purchase across state lines.

Two possible alternative solutions come to mind.  The first makes the most sense and leaves little doubt as to its effectiveness.  Those states that have ruined their health insurance market by excessive and abusive mandates and regulation need to fix their problem internally.  Rolling back that which has caused the problem will eliminate it and do for its citizens exactly what providing the opportunity for circumvention would do.  The second solution is more problematic and questionable.  That would be to possibly keep the federal government out by the formation of compacts among states that want to provide for the purchase of each other’s health insurance plans.  Since compacts must be approved by congress and the internal solution would work as well, this approach would not be suggested.

The bottom line here is that what seems like a great idea to solve a known problem may simply cause even more trouble, give away a reasonable defense, and end up being in the category of “be careful what you wish for”.