Tag: Insurance

No, Obama Didn’t Lie to You About Your Health Care Plans

The claim that President Obama lied in saying that people could keep their insurance looks like another Fox News special.

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Source: Alternet

Author: Dean Baker

“President Obama has been getting a lot of grief in the last few weeks over his pledge that with the Affordable Care Act (ACA) in place, people would be able to keep their insurance if they like it. The media have been filled with stories about people across the country who are having their insurance policies terminated, ostensibly because they did not meet the requirements of the ACA. While this has led many to say that Obama was lying, there is much less here than meets the eye.

First, it is important to note that the ACA grand-fathered all the individual policies that were in place at the time the law was enacted. This means that the plans in effect at the time that President Obama was pushing the bill could still be offered even if they did not meet all the standards laid out in the ACA.

The plans being terminated because they don’t meet the minimal standards were all plans that insurers introduced after the passage of the ACA. Insurers introduced these plans knowing that they would not meet the standards that would come into effect in 2014. Insurers may not have informed their clients at the time they sold these plans that they would not be available after 2014 because they had designed a plan that did not comply with the ACA.

However if the insurers didn’t tell their clients that the new plans would only be available for a short period of time, the blame would seem to rest with the insurance companies, not the ACA. After all, President Obama did not promise people that he would keep insurers from developing new plans that will not comply with the provisions of the ACA.

In addition to the new plans that were created that did not comply with the terms of the ACA, there have been complaints that the grandfathering was too strict. For example, insurers can only raise their premiums or deductibles by a small amount above the rate of medical inflation. As a result, many of the plans in existence at the time of the ACA are losing their grandfathered status.

In this case also it is wrong to view the insurers as passive actors who are being forced to stop offering plans because of the ACA. The price increases charged by insurers are not events outside of the control of insurers. If an insurer offers a plan which has many committed buyers, then presumably it would be able to structure its changes in ways that are consistent with the ACA. If it decides not to do so, this is presumably because the insurer has decided that it is not interested in continuing to offer the plan.

As a practical matter, there are many plans that insurers will opt to drop for market reasons that may or may not have anything to do with the ACA. It’s hard to see how this could be viewed as a violation of President Obama’s pledge. After all, insurers change and drop plans all the time. Did people who heard Obama’s pledge understand it to mean that insurers would no longer have this option once the ACA passed?

If Obama’s pledge was understood as ensuring that every plan that was in existence in 2010 would remain in existence, then it would imply a complete federal takeover of the insurance industry. This would require the government to tell insurers that they must continue to offer plans even if they are losing money on them and even if the plans had lost most of their customers. This would at the least be a strange policy. It would be surprising if many people thought this was the meaning of President Obama’s pledge.

Finally, there will be many plans that insurers will stop offering in large part because of the changed market conditions created by the ACA. For example, last week the Washington Post highlighted a plan for the “hardest to insure” that was being cancelled by Pathmark Blue Cross of Pennsylvania.

This plan is likely being cancelled because it is unable to compete with the insurance being offered through the exchanges. The exchanges charge everyone the same rate regardless of their pre-existing health conditions. A plan that is especially designed for people who have serious health conditions would almost certainly charge a far higher rate. If these high-priced plans no longer exist because they cannot compete with the exchanges would this mean that President Obama had broken his pledge?

On closer inspection, the claim that President Obama lied in saying that people could keep their insurance looks like another Fox News special. In the only way that the pledge could be interpreted as being meaningful, the pledge is true. The ACA does not eliminate plans that were in existence at the time the bill was approved.

If we want to play Fox News, President Obama also promised people they could keep their doctor. Since 2010 tens of thousands of doctors have retired or even died. Guess the pledge that people could keep their doctor was yet another lie from the Obama administration.

Emphasis Mine

see: http://www.alternet.org/no-obama-didnt-lie-you-about-your-health-care-plans

 

Proof That Obamacare ‘Rate Shock’ Is An Ugly Insurance Company Deception

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Source: Forbes

Author: Rick Ungar

“Over the past few months, the nation’s largest health insurance companies have been hard at work selling a narrative claiming that the Affordable Care Act is about to result in dramatically larger premium costs for a significant number of Americans. Indeed, the warnings have become so worrisome that the massive increases they are predicting have taken on a frightening descriptor all its own—rate shock.

At the heart of the health insurers’ retelling of the Chicken Little story is a regulation promulgated by the Department of Health and Human Services a few months back limiting what a health insurer can charge a 64 year old to three times what they charge a 21 year old. Currently, the average bump for older participants is typically five times that of the younger customers—although there are examples where the increase can reach ten times what is paid by the young immortals buying coverage.

As a result of the lower premium prices that will be paid by older participant, the expectation—one created by the large insurance companies—is that the youngest participants will have to pay significantly more to make up the difference.

Now, The Urban Institute—an organization so clearly bi-partisan that even the most suspicious partisan would encounter extreme difficulty making a case for bias—is out with a study that states that the ‘rate shock’ argument is “unfounded”, particularly when applied to the millions of Americans in the individual market.

As noted in the report summary:

“Overall, we find that loosening the rate bands from 3:1
to 5:1 would have very little impact on out-of-pocket
rates paid by the youngest nongroup purchasers, once subsidies are taken into account. This is not only the case for all likely purchasers, but also for two populations of particular concern: the 10 million 21-27 year olds who are currently uninsured and the 3 million who currently have nongroup coverage.”

By suggesting that the insurance company claims are merely ‘unfounded’, The Urban Institute is being quite kind as I would suggest a far harsher explanation for their scare tactics.

What the insurance industry is not telling you—as revealed by The Urban Institute study—is that the overwhelming majority of young people who would be charged a higher premium to make up for the lower premiums to be paid by their elders will either be covered by the premium subsidies offered via the insurance exchanges or eligible for Medicaid under the expansion of the program extending health coverage to those earning 133 percent above the federal poverty line.

Therefore, as clearly stated by the report, the lowered premium costs to the oldest participants in an insurance plan “would have very little impact on out-of-pocket rates paid by the youngest nongroup purchasers.” 

According to the study, here are the estimates:

  • 92 percent of people ages 21 to 27 projected to buy an individual plan in an exchange in 2017 are expected to have incomes less than 300 percent of the poverty line, so they would be eligible either for Medicaid (if their state expands it) or for substantial subsidies to help pay premiums in the exchange.
  • Similarly, 88 percent of 18- to 20-year-olds projected to buy a plan in the exchange are expected to be eligible for premium subsidies or Medicaid.

In addition to the above statistics, The Urban Institute study highlights the fact that of the 961,000 young adults between the age of 21 and 27 who currently buy their own health insurance as an individual and make too much money to qualify for premium subsidies or Medicaid, a full two-thirds are 26 years old or younger and are in families receiving employer coverage. Accordingly, these kids can receive health insurance coverage under their parent’s employment policy as Obamacare requires that insurers allow parents to add their kids who are under 26 to their employment based health care plan.

While any new law as significant as the Affordable Care Act creates questions and concerns, the false campaign being waged by the health insurance companies is a prime example of an industry using fear as a tool to get the government to change a regulation that they don’t like.

There remain questions as to the impact the rate band limitations will have on businesses that provide health insurance to employees—particularly those with a younger employee base. However, the expectation is that—given the reality that businesses tend to have a ‘spread’ in the age of employees—things should average out. Under the current structure, businesses are paying less in premium contributions for younger employees but considerably more for older employees. Under Obamacare, the prices will rise at the younger end of the scale but decrease significantly for older workers.

For this reason, the primary concern has been focused on what the changes will mean for younger health insurance customers who purchase individual policies.

As The Urban institute study makes crystal clear, the ‘rate shock’ controversy has far more to do with insurance company lobbying efforts and far less to do with the reality of what health insurance will cost for millions of young Americans.

Contact Rick at thepolicypage@gmail.com and follow me on Twitter andFacebook.

Emphasis Mine

see: http://www.forbes.com/sites/rickungar/2013/03/26/proof-that-obamacare-rate-shock-is-an-ugly-insurance-company-deception/

 

Happy Birthday Medicare!

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Medicare

What is Medicare?

Medicare is a national social insurance program, (like Social Security) administered by the U.S. federal government since 1965, that guarantees access to health insurance for Americans ages 65 and older and younger people with disabilities as well as people with end stage renal disease. As a social insurance program, Medicare spreads the financial risk associated with illness across society to protect everyone, and thus has a somewhat different social role from private insurers, which must manage their risk portfolio to guarantee their own profit – if not solvency.

A brief history.

In 1965, Congress created Medicare under Title XVIII of the Social Security Act to provide health insurance to people age 65 and older, regardless of income or medical history. Before Medicare’s creation, only half of older adults had health insurance, with coverage often unavailable or unaffordable to the other half. Older adults had half as much income as younger people and paid nearly three times as much for health insurance. (Medicare also spurred the integration of thousands of waiting rooms, hospital floors, and physician practices by making payments to health care providers conditional on desegregation.)

Success

While the USA does not have good results (compared to other industrialized nations) in measures such as average life expectancy and infant mortality, we rank well in the measure of those who reach 65 living until 85.

Medicare administrative overhead costs (2%) are well below the overhead of large companies that are self-insured (5-10%), health insurers offering coverage to small employers (25-27%), and individual insurance (40%). Insurers offering coverage in “Medicare Advantage” plans spend up to 16.7% on profit and overhead.

Who is eligible?

As above, Americans ages 65 and older (who have been legal residents of the United States for at least 5 years ) and younger people with disabilities as well as people with end stage renal disease.

What is covered?

There are four parts to Medicare: types A, B, C, and D.

Part A (hospital insurance) covers inpatient hospital stays (at least overnight), including semiprivate room, food, and tests, and brief stays for convalescence in a skilled nursing facility if certain criteria are met.

Part B (medical insurance) helps pay for some services and products not covered by Part A, generally on an outpatient basis, e.g. doctor visits.

Part C With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were given the option to receive their Medicare benefits through private health insurance plans, instead of through the original Medicare plan (Parts A and B). As Part C cost the government about 14% more than traditional Medicare, it is being phased out, as per the ACA.

Part D (prescription drug plans)went into effect on January 1, 2006. Anyone with Part A or B is eligible for Part D. Part D is not ‘human friendly’ because it covers prescriptions up to a cost point, then no long covers them until another cost point is reached (the coverage gap or ‘donut hole’). Part D did not allow for negotiation of prescription prices, but this and the coverage gap are addressed in the ACA.

Who benefits from Medicare?

Those eligible above, and their children and/or other family members, as the latter do not have to bear the cost for the care!

How is it funded?

Medicare has several sources of financing. Part A largely is funded by revenue from a 2.9 percent [payroll tax] levied on employers and workers (each pay 1.45 percent). Until December 31, 1993, the law provided a maximum amount of compensation on which the Medicare tax could be imposed each year. Beginning January 1, 1994, the compensation limit was removed. Part B is funded in part by premiums paid by the recipient (about $100/month).

Changes under the ACA.

The Patient Protection and Affordable Care Act (“ACA”) of 2010 made a number of changes to the Medicare program. Several provisions of the law were designed to reduce the cost of Medicare. Congress reduced payments to privately managed Medicare Advantage plans to align more closely with rates paid for comparable care under traditional Medicare. Congress also slightly reduced annual increases in payments to physicians and to hospitals that serve a disproportionate share of low-income patients. Along with other minor adjustments, these changes reduced Medicare’s projected cost over the next decade by $455 billion.

Due to the passage of the ACA Medicare’s unfunded obligation over the next 75 years declined from $13.4 trillion to $3 trillion.

The ACA also made some changes to Medicare enrollee’s’ benefits. By 2020, it will close the so-called “donut hole” between Part D plans’ coverage limits and the catastrophic cap on out-of-pocket spending, reducing a Part D enrollee’s’ exposure to the cost of prescription drugs by an average of $2,000 a year.  Limits were also placed on out-of-pocket costs for in-network care for Medicare Advantage enrollees.  Meanwhile, Medicare Part B and D premiums were restructured in ways that reduced costs for most people while raising contributions from the wealthiest people with Medicare. The law also expanded coverage of preventive services.

What does Medicare Cost us as a nation?

As a share of GDP, Medicare cost is expected to increase from 3.6 percent in 2010 to 5.6 percent in 2035 and to 6.2 percent by 2080. That is, a mere 4% – 6 % to provide health care for our old and disabled citizens.

Why is Medicare Under attack?

This is not an easy point to address from a non-partisian standpoint! If one has as a dogma that no government program can be successful, then counter examples of very successful programs such as Medicare and Social Security are a threat. If one believes that Medicare is a major drain on our finances (it isn’t), then one might view it as an opportunity to cut spending. It revisits the failed privatize Social Security efforts of the last decade. The major causes of our current debut are the reduced tax rates on high incomes, and two wars.

From Politifact:

“Barack Obama has slashed Medicare by $500 billion. Mitt Romney and House Republicans want to end Medicare. And a new board is going to ration care so Washington can waste more money. 

Believe any of that? You shouldn’t.” (Politifact)

Information from many sources, including:http://en.wikipedia.org/wiki/Medicare_(United_States)

Kathleen Sebelius: The Affordable Care Act has made the U.S. health-care system stronger

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From:Washington  Post

By:Kathleen Sebelius

“The Supreme Court decision upholding the Affordable Care Act was a turning point in the health-care debate, a chance to stop refighting old political battles and move forward with implementing and improving a law that is already lowering health-care costs and providing more security for millions of American families. Instead, congressional Republicans will spend Wednesday staging yet another repeal vote.

Fortunately for those Americans whose health and finances depend on protections in the law, the vote is only symbolic. But it’s worth setting the record straight about some false claims that have recently resurfaced.

One claim is that the Affordable Care Act is driving up Americans’ health-care costs. The facts tell a different story.

In the decade before the law was passed, national health expenditures increased about 7 percent a year. But in the past two years, those increases have dropped to less than 4 percent per year, saving Americans more than $220 billion. And that trend is expected to continue, with health-care costs projected to stay level as a share of gross domestic product from 2009 all the way through 2013.

You can see the same trend with premiums. Between 2000 and 2009, the average family premium more than doubled, from $6,438 to $13,375, an annual increase of 8.1 percent. From 2009 to 2011, family premiums still rose — but at a rate 25 percent lower. That generated savings of more than $1,200 per family, a trend of lower premium increases that independent experts such as Mercer, the human resources consultant, and the nonprofit National Business Group on Health project will continue. And the law will provide even more relief in the years to come, including a tax cut averaging $4,000 for 18 million middle-class Americans — a tax break that repeal would eliminate.

Another falsehood repeated by opponents of the law is that it is putting a greater burden on small businesses. Again, the facts show that the opposite is true.

Small-business owners were struggling in the health insurance market long before the law passed, spending an average of 18 percent more than their large competitors annually for health coverage and often seeing their insurance bills skyrocket if a single employee got sick. The result was that the number of small businesses in the United States offering coverage to employees was falling rapidly — from nearly 70 percent in 2000 to less than 60 percent of employers by 2009 — leaving millions of working families without coverage.

Since the law passed, the share of small businesses offering employee coverage has held steady at 59 percent, the Kaiser Family Foundation has found, in part because new tax credits in the law are saving hundreds of thousands of small companies thousands of dollars each on their insurance costs. And independent experts such as Rand Corp. predict the number of employers offering coverage will rise in 2014 — just as it did in Massachusetts after health reform was passed — when small-business owners have the choice of shopping for health coverage in new competitive marketplaces.

A third false attack recycled in recent weeks is that the Affordable Care Act cuts Medicare benefits. In truth, Medicare is stronger than ever.

Thanks to the law, seniors have new benefits such as free preventive care as well as discounts on brand-name medications in the “doughnut hole” coverage gap that have already saved more than 5 million people with Medicare about $600 each. Medicare Advantage premiums have fallen two years running. New crackdowns on fraud and abuse returned a record $5.4 billion to Medicare in 2010 and 2011. And the health-care law has strengthened Medicare’s long-term outlook, adding eight additional years to the projected solvency of the Medicare trust fund.

Those calling for repeal have yet to propose credible ideas for lowering health-care costs. In fact, the same House Republicans who are voting Wednesday to repeal these Medicare savings voted to keep them in their budget in March.

People are entitled to their opinions, but not to their own facts. And the facts in this case are clear: Since the Affordable Care Act was passed, national health spending is rising at a slower rate, health insurance premiums are rising at a slower rate, small-business coverage is holding steady and Medicare is on a stronger financial footing.

Now that the Supreme Court has issued a decision, the American people would be better served if Congress joined the president in working to build on that progress, not undo it.

Emphasis Mine

see:http://www.washingtonpost.com/opinions/kathleen-sebelius-the-affordable-care-act-has-made-the-us-health-care-system-stronger/2012/07/09/gJQA1BOOZW_story.html?wpisrc=nl_opinions

Obama Punks the GOP on Contraception!

With the fig leaf of religious liberty removed, Republicans are in a bad situation.

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From:  RSN, and Slate

By:Amanda Marcotte, Slate

“After two solid weeks of Republicans rapidly escalating attacks on contraception access under the banner of “religous freedom,” Obama finally announced what the White House is proposing an accomodation of religiously affiliated employers who don’t want to offer birth control coverage as part of their insurance plans. In those situations, the insurance companies will have to reach out directly to employees and offer contraception coverage for free, without going through the employer. Insurance companies are down with the plan, because as Matt Yglesias explained at Moneybox, contraception actually saves insurance companies money, since it’s cheaper than abortion and far cheaper than childbirth. Because the insurance companies have to reach out to employees directly, there’s very little danger of women not getting coverage because they are unaware they’re eligible.

That’s the nitty-gritty. The fun part of this is that Obama just pulled a fast one on Republicans. He drew this out for two weeks, letting Republicans work themselves into a frenzy of anti-contraception rhetoric, all thinly disguised as concern for religious liberty, and then created a compromise that addressed their purported concerns but without actually reducing women’s access to contraception, which is what this has always been about. (As Dana Goldstein reported in 2010, before the religious liberty gambit was brought up, the Catholic bishops were just demanding that women be denied access and told to abstain from sex instead.) With the fig leaf of religious liberty removed, Republicans are in a bad situation. They can either drop this and slink away knowing they’ve been punked, or they can double down. But in order to do so, they’ll have to be more blatantly anti-contraception, a politically toxic move in a country where 99% of women have used contraception.

My guess is that they’ll take their knocks and go home, but a lot of the damage has already been done. Romney was provoked repeatedly to go on the record saying negative things about contraception. Sure, it was in the frame of concern about religious liberty, but as this incident fades into memory, what most people will remember is that Republicans picked a fight with Obama over contraception coverage and lost. This also gave Obama a chance to highlight this benefit and take full credit for it. Obama needs young female voters to turn out at the polls in November, and hijacking two weeks of the news cycle to send the message that he’s going to get you your birth control for free is a big win for him in that department. I expect to see some ads in the fall showing Romney saying hostile things about contraception and health care reform, with the message that free birth control is going away if he’s elected. It’s all so perfect that I’m inclined to think this was Obama’s plan all along.”

Emphasis Mine

see:

Obama Didn’t Cave on Birth Control

The right has freaked out over an Obama administration rule requiring employers to offer birth control to their employees. Most companies already had to do that.

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From: Mother Jones

By: Nick Baumann

So did Barack Obama fold?

On Friday, after taking heavy criticism from Catholic groups and the political right over a regulation that would have required religiously-affiliated hospitals and universities (not churches) to offer their employees health insurance that covers birth control (with no copays), President Barack Obama went on live television to announce a shift. Now, insurance companies will have to offer employees of religious organizations the birth control coverage directly, without charging extra for it. (The details of the new birth control coverage plan are here.)

Some media outlets will no doubt call this a surrender by the president. But it’s not. Here’s why:

Emphasis Mine

see:http://motherjones.com/mojo/2012/02/obama-birth-control-rule-change-why-its-not-cave