David Kirkpatrick

February 15, 2010

Is the insurance industry trying to force health care reform?

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 3:14 pm

It sure seems like it. This is akin to the credit industry going draconian in advance of increased regulation only to prod DC into pushing the date of all that regulation up quite a bit.

Of course, the health insurance industry stands to gain a lot if health care reform with mandatory insurance and no public option is in place. Maybe the move of drastically raising individual health insurance premiums is a ploy to force something close to the current set of bills in Congress through and stifle any new debate on how to fund reform and cover the uninsured. I’m guessing the industry sees its future as something of a complete spin of the roulette wheel with a lot of possible outcomes and just a few that are favorable to its interests. Crazy moves with this bad of PR strike of a desperate attempt to influence that spin.

From the first link:

AP reports that insurance companies in at least four states are raising their premiums for individual insurance policies (those that people have to buy themselves, because they don’t get coverage from an employer) by 15% or more. To give you a sense of what we are talking about if these rates go into effect, a family of four in Maine (which is a relatively poor state) can expect to pay $1,876 a month–about $22,500 a year–for health insurance, starting in July.

And this is just the beginning of what we can expect to see pretty much everywhere:

Premiums are far more volatile for individual policies than for those bought by employers and other large groups, which have bargaining clout and a sizable pool of people among which to spread risk. As more people have lost jobs, many who are healthy have decided to go without health insurance or get a bare-bones, high-deductible policy, reducing the amount of premiums insurers receive.

January 21, 2010

COBRA subsidy extended

Good news for the unemployed who qualify.

The IRS release:

COBRA Subsidy Eligibility Period Extended Through February; 15-Months Subsidy Now Available to Those Who Qualify

Revised Jan. 21, 2010, to add HCTC information

WASHINGTON — Workers who lose their jobs during January and February may qualify for a 65-percent subsidy on their COBRA health insurance premiums, and these newly-eligible individuals, along with those already receiving the subsidy, can now receive it for up to 15 months, according to the Internal Revenue Service.

Created by the American Recovery and Reinvestment Act of 2009, the COBRA subsidy eligibility period was originally scheduled to expire at the end of 2009, and eligible individuals only qualified for the subsidy for nine months. But the Department of Defense Appropriations Act, 2010, enacted on Dec. 19, extended the eligibility period and the maximum duration of COBRA premium assistance.

As a result, workers who are involuntarily terminated from employment between Sept. 1, 2008, and Feb. 28, 2010, may be eligible for a 65-percent subsidy of their COBRA premiums for a period of up to 15 months. Involuntarily terminated employees who meet certain other requirements, and certain family members of those individuals, are referred to as “assistance-eligible individuals.”

Employers must provide COBRA coverage to assistance-eligible individuals who pay 35 percent of the COBRA premium. Employers are reimbursed for the other 65 percent by claiming a credit for the subsidy on their payroll tax returns: Form 941, Employers QUARTERLY Federal Tax Return, Form 944, Employer’s ANNUAL Federal Tax Return, or Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees. Employers must maintain supporting documentation for the claimed credit.

The administrator of a group health plan or other entity must notify certain assistance-eligible individuals of the extension by Feb. 17, 2010. For assistance-eligible individuals whose nine months of subsidy had already ended, the new law also provides an extended period for the retroactive payment of their 35 percent share during a transition period.

There is much more information about the COBRA subsidy, including questions and answers for employers, and for employees or former employees, on the COBRA pages of IRS.gov.

Some people who are eligible for the COBRA subsidy also qualify for the health coverage tax credit (HCTC) and may want to choose this more generous benefit, instead. The HCTC pays 80 percent of health insurance premiums for those who qualify. Eligible individuals must be receiving Trade Adjustment Assistance benefits or be between the ages fo 55 and 65 and receiving pension payments from the Pension Benefit Guaranty Corporation. Individuals must also be enrolled in a qualified health plan. See more at HCTC: Eligibility Requirements and How to Receive the HCTC.

Related Items:

January 20, 2010

Teeth gnashing and hand wringing over health care reform

(Update — bold emphasis added because it seems it takes a sledgehammer to make a fiscal point right now.)

I’m sure there’s a lot of both going on behind the Democratic Party scenes. There’s a lot of both going on publicly along with plenty of finger pointing, blaming and dissembling among the left blogosphere. The simple fact is health care reform in its current Congressional form has not, and almost certainly will not, pass because of Democratic ham-fisted policy making. But the GOP is behaving shamefully and shamelessly as an opposition party with no alternative ideas and zero compromise on a very necessary evil.

Yes, health care reform is a very necessary evil. Honest libertarians can be excused from the argument, but fiscal conservatives are lying to themselves or everyone else when they deny health care reform must occur at some point in the near future. Health care as a percentage of income is becoming unmanageable and health insurance costs are killing businesses both large and small.

Without reform health care in the United States will continue to bankrupt people at higher and higher levels of income, and cause untold suffering and early death for the uninsured. And at a point in time looming very soon it will simply bankrupt the entire nation. I’m no fan of too much government influence anywhere, but after looking over the arguments (and sorting through the hyperventilated crap from both the left and the right) I am convinced reform at the federal level is now a necessary evil. Any fiscal conservative who looks at the numbers honestly will come to the same conclusion.

Some funny (interesting, not hah hah) facts about the situation on the ground now that Brown has taken over Ted Kennedy’s Senate seat: the oft pointed out irony that Kennedy’s old seat will end his signature legislation; the fact the Massachusetts electorate already has a state run plan along the lines of federal health care reform so scuttling the current reform efforts causes them no significant pain; that the new GOP senator voted for the Massachusetts plan, but has declared opposition to essentially the same plan on the federal level; the heaviest opposition to health care reform is found amongst voters who either are already in, or soon will be, the massive federal subsidy of Medicare or Medicaid and basically fear their benefits being harmed in some way. Talk about wanting to selfishly eat your children. No health care reform equals a potentially very bleak future for everyone middle aged on down.

October 13, 2009

If we’re going to pass health care reform …

… it’d make sense to do it right.

For better or worse, health care reform is going to pass. The votes are essentially there — and really have been all along. The angry Baby Boomers at town hall meetings over the summer were but a minor distraction in the big play on this issue.

With the knowledge something is going pass regarding health care, I’ve thought it makes the most sense to radically overhaul a much less than perfect system as things currently stand in the U.S., and I agree with Cato’s Michael Tanner that it’s “time to start over.”

The problem is there is no political will, or most likely any political ability, to remake health care. There might have been a shot for that during middle few years of the Bush 43 administration when the GOP held all the reins of power, but we know how successful Republicans were in promoted the stated goals of the party — small government (epic fail), personal responsibility (epic fail) and fiscal conservatism (nuclear fail.)

As appealing as radical health care reform may be for anyone who takes a few hours to drill down into the issue, it’s just not going to happen. The GOP has taken itself out of the process by choice and great forces in the form of the American Medical Association, the pharmaceutical industry and the health insurance industry are lined up t ensure nothing earth-shattering, at least for their fiefdoms, comes to pass.

From the link:

And our current tax laws penalize people who don’t receive insurance through their work, meaning that if you lose your job, you lose your insurance.

The bills now before Congress don’t fix these problems. They simply pile on new mandates, regulations, taxes and subsidies. No amount of tinkering, or budgetary sleight of hand, can make them better.

It’s time for Congress to scrap its current flawed government-centered approach and start over with a focus on creating a consumer-oriented free market in health care.

After all, isn’t it better to get it done right than to just get it done?

Health care reform one step closer …

… and officially becomes bipartisan with Olympia Snowe’s GOP vote in the Senate Finance Committee.

From the link:

The Senate Finance Committee voted on Tuesday to approve legislation that would reshape the American health care system and provide subsidies to help millions of people buy insurance, as Senator Olympia J. Snowe, Republican of Maine, joined all 13 Democrats on the panel in support of the landmark bill.

The vote was 14 to 9, with all of the other Republicans opposed.

Democrats, including President Obama, had courted Ms. Snowe’s vote, hoping that she would break with theRepublican Party leadership and provide at least a veneer of bipartisanship to the bill, which Mr. Obama has declared his top domestic priority. Ms. Snowe was a main author of the bill but she had never committed to voting for it.

September 30, 2009

What is COBRA?

With all the talk about health insurance and ongoing unemployment, COBRA gets tossed around a lot in news and conversation. Here’s a quick overview of COBRA from WeCompareInsurance.

From the first link:

previous article covered how the recent government stimulus plan, known as the American Recovery and Reinvestment Act of 2009 (ARRA), affects COBRA, but the more simple question is, “What is COBRA?”

COBRA stands for Consolidated Omnibus Budget Reconciliation Act and was passed by Congress in 1986 to provide health benefit provisions that provide continuation of group health coverage that would end, such as employer-provided health insurance for an employee who loses his or her job. COBRA amended the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act. If you qualify for COBRA you can keep your group health insurance for a period of time, but you do have to continue paying for your policy.

The following is taken directly from the Department of Labor’s website on COBRA on exactly what COBRA does:

What does COBRA do?

COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage.

You must meet a number of criteria to qualify for COBRA coverage, but if you do qualify make certain to complete your application and other paperwork within required deadlines. These deadlines do change – as in the ARRA event in 2009 – so it’s in your best interest to do some research and find out the current deadlines and requirements for COBRA. Currently typical COBRA lasts up to 18 months after the qualifying event, e.g., losing your job, and a qualifying disability can extend that coverage up to another 11 months.

Head to the Department of Labor’s COBRA FAQ page for employees for more information on its continuation of health insurance benefits.

September 10, 2009

The recession (that may or may not be over) and Main Street

Filed under: Business — Tags: , , , , , , — David Kirkpatrick @ 3:56 pm

Here’s a report of the reality on the ground:

The recession has slashed families’ earnings, increased poverty and left more people without health insurance, according to the Census Bureau’s annual snapshot of living standards, offering sharp evidence of how much the falling economy has touched Americans of every income and race.

The report released Thursday showed median household income, adjusted for inflation, fell 3.6% last year to $50,303, the steepest year-over-year drop since at least 1967. The poverty rate, at 13.2%, was the highest since 1997, while about 700,000 more people were living without health insurance in 2008 than the year before, although the share of the population living without health insurance was about the same.

“There’s a lot of pain for the average family,” said Bruce Meyer, an economist at the University of Chicago. “It’s pretty striking how fast and how far the incomes of the typical family have fallen. The decline is bigger than anything we’ve seen in the past, and things are almost certainly going to get worse.”

July 2, 2009

Small business and health care reform

Here’s two stories on Main Street and the health care debate.

First up is entrepreneurship and opposition to public plan health care:

The so-called “public option,” backed by President Obama and many Congressional Democrats, would set up a government-backed health insurance plan that would compete with private plans. Though details remain fuzzy, the proposal already has critics on both sides of the aisle decrying “government-run health care.” The American Medical Association and private insurers oppose any public option.

Also resisting is the National Federation of Independent Businesses, the nation’s largest and most influential small business group. A fierce critic of the Clinton administration’s health care reform efforts a decade ago, the NFIB now considers universal health care to be one of its top legislative priorities. But it wants to see that care and coverage come from the private sector.

“Our members, who are entrepreneurs and risk takers, really do fundamentally at the end of the day want lower costs and competition, but they are going to be very skeptical of something that has a lot of government involvement,” says Michelle Dimarob, the federation’s legislative policy manager. The NFIB is instead pushing for a reform plan that would provide universal coverage and cut costs by increasing competition among private insurers, likely through the creation of government-mediated insurance pools.

And batting second is a NYT blog post underscoring a range of small biz attitudes toward the debate:

Oddly, the public plan is also one of the battle lines for organizations that claim to represent small business. The National Federation of Independent Business and the U.S. Chamber of Commerce staunchly oppose a public plan; the Small Business Majority appears (pdf) to support it; while the National Small Business Association insists that if there is a public plan, it should be constrained by the same rules as private insurance.

 The legislators who will decide the issue are the handful of moderates in both parties. The conventional wisdom is that the House will pass the public plan, and its fate will rest in the hands of maybe 10 senators. But it may prove a battle in the House, too: The conservative Democratic Blue Dog Coalition supports only a drastically curtailed (pdf) government option, and its 49 members could tip the balance. So the question is, how will these moderates vote in the end?

June 16, 2009

The stimulus plan, COBRA and business

I’ve done recent blogging on COBRA and the stimulus plan, but the topic is still fairly confusing in terms of how the unemployed obtain the subsidy and how this program ties into existing ex-employer based COBRA health insurance.

The link in this graf doesn’t make things perfectly clear, but it does offer some interesting ideas on the corporate side in maximizing benefits for both the company and the recently laid-off worker.

From the link:

However, to the extent that an employer subsidizes all or a portion of COBRA benefits following a set of employee layoffs, the employer subsidy period also reduces the length of the federal subsidy period.

For example, assume an employer subsidizes COBRA coverage for three months following a layoff.

Under this scenario, the employee would only be eligible for six months of the federal COBRA subsidy rather than the full time allotted.

For the above reasons, I recommend that employers provide employees with additional severance benefits and eliminate their corporate subsidy for COBRA coverage.

This saves corporate resources, and employees may take maximum advantage of the federal COBRA subsidy.

As an alternative to eliminating their corporate COBRA subsidy, employers may elect to measure COBRA from the “loss of coverage” rather than the actual qualifying event.

April 16, 2009

COBRA backgrounder

Here’s a good, easy to follow backgrounder on COBRA. I’ve recently blogged on this topic based on an article I wrote for WeCompareInsurance.com.

From the first link:

The American Recovery and Reinvestment Act, commonly known as the stimulus package, created a significant amount of work for employee benefits professionals with its recent COBRA changes. ARRA creates a federal 65% subsidy for COBRA insurance for individuals who involuntarily lost or will lose their jobs between Sept. 1, 2008 and Dec. 31, 2009.

For example, if the monthly cost of COBRA coverage is $1,000, and employees are responsible for the full premium, under the subsidy, the employee will only be required to pay $350 each month for COBRA coverage, with a federal subsidy of $650.

How it works

The mechanics of the subsidy are interesting. Employers will receive a credit on their payroll tax returns for the federal subsidy. For example, if the federal subsidy is $650, and employee pays $350 for COBRA coverage, the employer will receive a credit of $650 on its federal withholding tax returns (i.e., Form 941).

For employers with more than 20 employees, these procedures will apply whether a plan is fully insured or self-insured. However, workers at small firms, who are not normally eligible for COBRA coverage, still will be entitled to the federal subsidy if state-mandated coverage is comparable to COBRA. However, in these circumstances, the insurance carrier, and not the employer, will be the entity responsible for providing the subsidy and taking the payroll tax credit.

The COBRA subsidy only lasts for a maximum of nine months. When COBRA rights are cut off, the subsidy ends. For example, if an employee receives new employment with a one-month waiting period, when the employee becomes eligible for new coverage, the COBRA subsidy ends. It is the responsibility of employees to notify employers when new coverage exists.

If an employer denies the employee the federal subsidy, there is an appeals procedure with the Department of Labor and the Department of Health and Human Services. It is likely that disputes will exist with regard to employees who fail to return to employment following a period of FMLA leave or other leave of absence and consider themselves to be terminated. In many of these situations, the employer will consider the employee to have voluntarily abandoned their position when they fail to return to work following the expiration of an approved leave of absence. Clarification regarding the definition of involuntary termination is expected.

April 13, 2009

The Stimulus Plan of 2009 and COBRA

Good news for the recently unemployed. I have heard actually collecting on this isn’t so easy so far.

From the link:

The world’s economy is in a global recession and many Americans are finding themselves out of work. For those who are out of work and were part of an employer-based health insurance plan, this means either losing health insurance coverage – not a good option in any circumstance – or participating in the government’s Consolidated Omnibus Budget Reconciliation Act, also known as COBRA.

A problem with COBRA is although you can keep your health insurance for a limited time while out of work, you do end up paying the entire premium. A health insurance premium that your employer most likely contributed to as part of your compensation. Under these conditions COBRA is a less than ideal solution because not only are you out of work, but your health insurance premiums under COBRA most likely just went way up in cost each month.

The recent stimulus package passed by Congress, known as the American Recovery and Reinvestment Act of 2009 (ARRA) created a premium reduction and additional election opportunities under COBRA for the recently unemployed.

About this provision of ARRA, Alan D. Lebowitz, deputy assistant secretary of labor for the department’s Employee Benefits Security Administration (EBSA) says, “Our action today gives workers and their families useful information on their right to receive the COBRA subsidy and makes it easier for employers and plans to meet their notice obligations. Given the current economic situation facing dislocated workers and their families, it is very important that individuals do not lose their group health coverage.”

You can find out more about ARRA and COBRA at the Department of Labor’s website.

The following information is taken from the DOL’s news release on ARRA, COBRA and health insurance for the recently unemployed:

The department has developed four notice packages tailored to fit different types of plans and individuals:

  1. A general notice to be given to qualified beneficiaries covered by plans subject to the federal COBRA at the initial COBRA election opportunity.
  2. An abbreviated general notice, which may be furnished to individuals who elected and are still covered by COBRA.
  3. An alternative notice to be sent by issuers of group health insurance coverage subject to state continuation coverage laws.
  4. A notice of extended election periods for eligible individuals who declined or discontinued COBRA coverage.

Each package contains a summary of the premium reduction provisions, questions and answers, and forms to use in requesting the premium reduction (and COBRA coverage, if not already enrolled).

Under COBRA, most group health plans must give employees and their families the opportunity to temporarily continue their group health coverage when coverage would otherwise be lost for reasons such as termination of employment, divorce or death.

The four model notice packages are available for download from EBSA’s dedicated Web page at http://www.dol.gov/ebsa/cobra.html. The Web page also contains additional frequently asked questions to help dislocated workers, their families and their employers understand the requirements.

March 14, 2009

Health insurance and entrepreneurship

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 3:26 pm

Not certain if I completely buy this concept, but I have to admit it’s very interesting and may well have merit. I’m of mixed-mind in terms of any version of “universal” health-care. The current system is not working. Insurance as an industry is not truly serving its customers and far too many people are without health insurance.

For the next few weeks I’m included in that number, and over my career as a freelancer I’ve rarely been covered. When I have been it’s been on the coattails of my spouse.

From the link:

Even younger startup owners who are relatively healthy and have insurance are just a half-step from disaster. The insurance industry is in the business of not paying claims whenever possible, after all, and health insurers are working hardest to find ways not to cover people who might get sick even as they deny as many claims as possible from people who’ve been paying premiums.

The day we have national health care is the day that we unleash a wave of entrepreneurship the likes of which we’ve never seen before. That’s one of the best reasons for moving toward such a system.

March 13, 2009

Saving money with health insurance

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 3:50 pm

Times are tough and pretty much everyone is looking to save money. One place to find savings can be health insurance.

It’s tempting to drop health insurance, particularly if you’re unemployed and no longer have insurance through your employer, but the long-term consequences are not worth going without basic medical care. And the immediate consequences of a medical emergency if you are uninsured are just frightening.

Here’s some tips on saving health insurance money for people who are in employer-based plans and for people who must find health insuarnce on their own.

From WeCompareInsurance.com:

Saving Money with Health Insurance

 

Everyone likes to save money and your health insurance is a place where you can find savings. The easiest way to save money with health insurance is to only insure yourself for large, catastrophic medical problems or to increase your deductible in order to decrease your monthly premium. Both of these choices might not be the best health insurance option for everyone because each will increase your out-of-pocket medical expenses for everyday medical care and preventative examinations.

There are a number of tips to keep in mind beyond increasing your out-of-pocket expenses to minimize your health insurance costs while receiving the health insurance coverage you and your family needs.

Here are six things to consider for saving money through your health insurance:

  1. If you are part of a health insurance plan such as a POS (point-of-service) or PPO (preferred provider organization), make sure you only use doctors and medical services that are in-network for your plan.
  2. Take every tax deduction offered on health insurance. For the self-employed this means deducting all your health insurance premiums, and for participants in employer-based plans deducting the portion you pay of your health insurance premiums. And medical and dental expenses you incur that your insurance doesn’t cover that exceed 7.5 percent of your adjusted gross income (AGI) can be deducted as well.
  3. When you are comparing health insurance quotes take a look at the long-term implications of your plan. Lower health insurance premiums and up-front costs will mean more out-of-pocket expenses and possibly much higher medical costs over the long run. Consider how you expect to use your health insurance and factor all the costs when comparing health insurance quotes.
  4. Don’t make visits to the emergency room unless you are experiencing an actual medical emergency. The co-pay will likely be very much higher than for a regular office visit.
  5. If possible participate in employer- or other organization-based group health insurance. The rates and qualification requirements are typically lower. If you are part of a employer-based group health insurance plan have your employer pay the premium on a pre-tax basis to lower your overall taxable gross pay. Another way to reduce your taxable income is to participate in your employer’s flexible spending plan to save money for out-of-pocket health insurance expenses such as co-pays, some medications and certain medical devices.
  6. Save money on health insurance prescription medication by using online pharmacies. Traditional pharmacies will typically dispense only a 30-day supply of medicine while online pharmacies will allow for 90-day supplies for the same co-pay.

February 22, 2009

Health insurance benefits laws from EBSA

Here’s a quick listing of employer-based health insurance benefits law from the Department of Labor’s Employee Benefits Security Administration. This article was written for insurance quote aggregator, WeCompareInsurance.com.

From the link:

Health Insurance Benefit Laws

 

Once you’re done comparing health insurance quotes and plans and you’ve settled on employer-based health insurance, it’s good to keep in mind the Department of Labor’s Employee Benefits Security Administration (EBSA) administers a number of laws that cover these health insurance plans.

Here is a list of some of the laws affecting health insurance:

  1. The Employee Retirement Income Security Act – This law protects people in retirement, health and other benefit plans through private employers by providing rights to information and a grievance and appeals process for private employer health insurance participants.
  2. The Consolidated Omnibus Budget Reconciliation Act – This law only applies to special instances, but if you qualify as a former employee, retiree, spouse or dependent child you can purchase a temporary continuation of health insurance at group rates.
  3. The Health Insurance Portability and Accountability Act – This law applies to working Americans and families with preexisting medical conditions. Through this act there is a guarantee of individual health insurance policies for eligible people and it prohibits discrimination in health care coverage.
  4. The Newborns’ and Mothers’ Health Protection Act – Just as it sounds, this law offers rules on minimum health insurance coverage on how long the mother and child can stay in the hospital after childbirth.
  5. Mental Health Parity Act – This law ensures mental health is given as much emphasis as physical health by requiring annual, or lifetime, limits on mental health benefits to be no lower than limits for medical and surgical benefits provided by a group health insurance plan.
  6. Women’s Health and Cancer Rights Act – Breast cancer is a frightening diagnosis and treatment runs a wide range of intensity and invasiveness. This law protects breast cancer patients who want to have a breast reconstruction after a mastectomy.

When you are part of an employer-based health insurance plan the Department of Labor’s Employee Benefits Security Administration is a great source of information on subjects such as your rights to information on how your plan works, how to quality benefits available in your plan and how to make claims on your health insurance plan.

Remember EBSA administers these laws that help protect your health insurance when you lose coverage, change jobs or if you suffer from certain special medical conditions. Also remember when choosing employer-based plans to carefully compare your health insurance options to make sure your plan works best for you and your family’s medical needs.

Find out more about EBSA on the web at www.dol.gov/ebsa

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