OK. Now What?

Barry, my friend the CPA, is undoubtedly smiling. Barry formed a Tea Party of one, almost twenty years ago. His goal was to always have divided government. As long as the Democrats or Republicans were restrained, were kept from controlling both Houses of Congress and the Presidency, there would be some level of gridlock. Only the most important legislation could be passed. The moment either side had real power, all Hell broke loose. Last night was a good night for Barry and the many people who long for a smaller government.

This blog, however, is about health insurance and health care, not politics, so I will leave the list of winners and losers to others. Politics do play a huge role in how health care is delivered in this country and an even larger part in the foreseeable future. And health insurance, health care, and our system of entitlements had equally large roles in last night’s results. They are intertwined. The Republicans took the House last night. They almost captured the Senate. How will this impact health care?

The short answer may be “Not Too Much”.

President Obama came to office in the midst of a financial meltdown. He had three paths in front of him – a Crisis, a Disaster, and an Issue. He faced a divided country and had the chance to invest his political capital into only one. The Crisis was the economy and unemployment. The Disaster was Americans fighting and dying in two wars. The Issue was health care and specifically the uninsured and underinsured of our country. He chose the issue and spent the majority of his first two years and political good will pushing through an unpopular, poorly designed piece of legislation.

The Patient Protection and Affordable Care Act succeeded in energizing the opposition. Even centrist Democrats and Republicans were outraged by this combination of government overreach and intellectual dishonesty. Democrats representing swing districts, like John Boccieri, were pressured into supporting a bill that almost single-handedly caused their defeat.

Republicans have campaigned against the PPACA. Some have implied, some have even promised, to repeal this legislation. Can this legislation, passed only seven and a half months ago, be reversed? And, more importantly, do the Republicans want to?

NO and NO.

The Patient Protection and Affordable Care Act is not going to be repealed or reversed anytime soon. Oh, I’m sure Speaker-designate John Boehner will run a bill through the House. It will be great political theater. And, it will be risk free. The legislation won’t get through the Senate, and even if it did, it would be vetoed by the President.

I sincerely doubt that the Republicans would want to repeal this legislation. This is a fundraising bonanza. Campaigning against PPACA is far more profitable than solving the problems that necessitated the law.

So, we have a bad bill and the real possibility that cynicism may rule the day. Plus, we have yet to mention the insurers who have already spent millions to comply with the new rules and regulations. I firmly believe that the insurers have devised a path to real success under a government run health plan where they provide supplementary coverages. The major insurance companies would then have no desire to repeal the law.

We are quickly approaching the next calendar triggers of the health care legislation. It is possible that the Republican lead House of Representatives, far more interested in extending the Bush era tax cuts than anything else, might tackle meaningful reform in early spring. In a yet to be exhibited act of political maturity, the House could even draft a bill to limit and refine the PPACA. Such legislation could be passed by the Senate and signed by the President. It is possible. I leave the question of probability to you.

We had a major governmental change last night, a massive swing from the left to the right. What has changed in regards to the delivery of health care, the affordability of health insurance and the access to needed medical care? Alas, not much.

DAVE

www.bogartcunix.com

How Much Will Free Cost You?

I looked at the Medical Mutual form again. Yes, I was a bit flustered by the beautiful woman with the deep dark eyes sitting there, next to me, in my office. But thirty-two years of experience kicked in and I continued to study the form. The numbers did not make sense. It took a call to the insurance company to solve the mystery.

I understood the answer immediately. Natasha’s health insurance policy renews November 1st. One premium, $510.96, is for her current “grandfathered” policy covering her and her college student son. The non-grandfathered version of the same policy is $547.75, a difference of $36.79 per month.

Welcome to the next phase of the implementation of the Patient Protection and Affordable Care Act. New provisions became effective on September 23rd. Like day following night, new prices became effective on September 24th.

In my post, Addicted to Other People’s Money, I wondered how much the new free basic preventive care services would cost us. We now have the initial price tag.

First, let’s detail what changed on September 23, 2010. The two key elements are Essential Benefits and Preventive Care. The definitions, below, come courtesy of Medical Mutual of Ohio. The email quoted in my July 20th post from Mrs. Obama bragged of even more comprehensive (expensive) benefits.

Essential Benefits: The law requires plans to remove lifetime limits on what the government defines as “essential” benefits. The law will also prohibit annual dollar limits, but not until 2014, which allows insurers to phase lifetime limits out by implementing annual dollar limits that will be incrementally increased each year until 2014. Essential benefits include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services, chronic disease management and pediatric services (including oral, vision and hearing examinations).

Preventive Health Services: Plans may not impose any cost-sharing requirements (e.g., copay, coinsurance or deductible) on preventive health services, as defined by the U.S. Preventive Services Task Force, when administered by a network provider.

Quick summary:
Essential Benefits become limitless.
Preventive Care Services become free.

Natasha (all names changed) and her son would be forced to pay $431 more over the next year for this. Another client, Paul, had a much more expensive experience. His new Anthem policy was effective September 20th. The premium for Paul, his wife, and two children for a high deductible contract is $402.55 per month. Since he had already paid his September and October premiums for his old policy, he wanted to re-date the new policy to November 1st. The premium for the exact same policy, enhanced with the new Free benefits, would be $480.77, an increase of $78.22. Are these new provisions worth almost $1,000? Not to Paul. And probably not to you.

So here we are, less than a year into the new law, and we are already seeing the impact of the new Patient Protection and Affordable Care Act. It is harder, not easier, to insure Americans. Insurance is more expensive, not less. And the words Cost Containment are still missing from the President’s vernacular.

The September 23rd changes are just becoming effective. More mandated changes are due for January 1st. And the rules are still being written, on the fly, as we reinvent the delivery of healthcare. I’m just hoping that nothing else is Free. We can’t afford free.

DAVE

www.bogartcunix.com

By the way, Jeff, my business partner, was concerned that this post was too dry and contained too much detail. I told him that I could trust my readers to not only plow through a fact laden piece, I could even count on some of you to add pithy, timely comments.