This is a blog.  You, Dear Readers, are viewing this online either on the blog’s home site or on the AOL Patch System.  You are comfortable online and this is probably only one of several blogs that you read on a regular basis.  We know how to research issues.  We know how to find the information we need to help us form our opinions or to confirm our long held beliefs.

Our comfort with the internet allows us to laugh at the television reports that paint an issue in strictly solid black or solid white.  We can, if we wish, quickly go online and find the shades of gray.

But what if you don’t have internet access?  What if you not only don’t have a computer, but you really don’t know how to use one?  Then you are at the mercy of your news sources – TV, the newspaper, the radio, and your friends.  And many of your news sources like to keep you nervous.  Scared to death.  Many, but not all.

Monica Robbins is the Senior Health Correspondent at WKYC, Channel 3.  Ms. Robbins has been covering health issues in the Greater Cleveland market for over ten years.  She and her station have worked diligently to demystify the Patient Protection and Affordable Care Act (PPACA) from its inception.  The WKYC website and her on air reports have attempted to answer viewers’ questions in a straight-forward, non-political fashion.

In an effort to build on a mission of providing information instead of fear, Monica Robbins invited the local chapter of the National Association of Health Underwriters (NAHU) to spend three hours last night fielding viewers’ questions.  Channel 3 set up a phone bank, brought in snacks and sandwiches, and promoted our availability online, during Dr. Phil, and on the evening news broadcast.

We received nearly 300 phone calls!

There was a common thread that ran through the vast majority of the calls that I received, FEAR.  The people who called were afraid of “Obamacare”.   How was the new law going to affect them?  Would they lose their coverage?  Will they be able to afford their new policies?

A third of my calls were from people on Medicare.  Aside from the improvements in the Medicare Part D (Rx) benefits, Medicare is pretty much untouched by the PPACA.  But my 11^th caller was a nervous 68 year old.  His buddy told him that the premium for his Medicare Supplement was going to be four times higher next year due to Obamacare.  Some friend.  There was the 66 year old who was concerned about her vitamin D prescription.  And there was the woman in her mid-fifties, still recovering from the surgeries to remove brain tumors, who had been told that the new policies would not cover liver transplants for anyone over 60.  There is nothing in the law that prohibits liver transplants for 61 year olds, and she doesn’t need a transplant, but she has heard the reports and she is worried.

There wasn’t a single call, not one, from someone who will be hurt by the new law.  My fifth call was a grandmother inquiring about coverage for her 22 year old granddaughter.  The young woman is an uninsured college student.  I had several calls from people who had lost their jobs, could not afford to exercise their COBRA option, and were now uninsured.  Most had dependent children.  The PPACA doesn’t benefit everyone.  What law could?  But the concern and fear fueling these calls was a direct result of negative, often fact-less, political messaging. 

Two of my calls came from people who were paying a lot of money for their or their spouse’s employer sponsored group health insurance plans.  I couldn’t promise that the new health plans would be cheaper.  I could reassure them that they will have choices and the opportunity to shop for alternate coverage.

Many of our callers just needed a safe website that could answer their questions.  This one, created by the Ohio Association of Health Underwriters, even has a subsidy calculator.  I patiently repeated the actual web address for them as they wrote it down before heading to the public library to access the internet.

We were supposed to start at 5 PM, but the phones started to ring before that.  After an hour I turned to Ms. Robbins and Ingrid Martin, our Board Member who had helped to organize this, and asked when we were going to do this again.  They had already agreed to the need.  They appreciated our mutual commitment to helping Greater Clevelanders in making this transition.  I’m sure we will be back again in a few weeks.

I, of course, am looking forward to doing this again.  A veteran of numerous charity telethons, I love answering the phone on TV.  That and we were too busy to meet Russ Mitchell when he came down to say hello.  He and I share a real appreciation of Gino Vannelli.

The car was careening down the hill.  The driver, desperate to stop, never touched the brake pedal.  Instead, he grabbed the emergency parking lever with both hands and violently pulled it towards himself.  It snapped off!  The car picked up speed.  The driver opened the door and abandoned the car.  He got up.  Dusted himself off.  And as he watched the out-of-control vehicle continue down the hill he declared that whatever happens, happens.  It was not his problem since he was no longer driving the car.

The Patient Protection and Affordable Car Act (PPACA) was signed into law March 23, 2010.  We have seen plenty of changes in how we pay for our health care delivery system over the last 3 ½ years.  But the biggest changes are scheduled for October 1, 2013.

Are we ready?

If you are a regular reader of this blog, you know the answer – Not Quite.

Let’s start with the policies.  As of right now, the cupboard is empty.  Anthem, Medical Mutual of Ohio, etc… are waiting for final approval.  Even if the policies are all approved on Monday, September 23^rd, how do they all get loaded into the various computer quoting systems in eight days?  Brochures?  Ads?  Supporting documentation?  Is it realistic to believe that everything can be up and running in a week?

The new online insurance shopping portal, the Exchange, is another area of concern.  Once policies are loaded into the computers, how will we access them?  The insurers and agents are still wading through a convoluted system that is being created on the fly.  We are spending big bucks to create websites that will allow individuals to go to one site, plug in their information to determine their personal premium subsidies, and then apply for coverage.  Those connections are not in place.

The government is also not ready.  The software created to determine how much premium subsidy someone would receive is still not functioning at 100%.  Brian Cook of the Centers for Medicare and Medicaid Services (CMS) states that they have been rigorously testing the software for a year.  OK, but it is still failing.  Many people will base their choice of coverage on the net price of the policies.  If the subsidy calculations are wrong, we have the potential for real problems.  Can this be resolved in the next week?  That may be possible.

Those are some of the challenges we face to implement the President’s health care law.  Are these insurmountable?  Not really.

First and foremost, the October 1 date is not a drop-dead deadline.  If everything was working, Americans could begin to purchase policies on October 1^st that would become effective on January 1, 2014.  It doesn’t matter whether the policy is purchased on October 1^st or December 7^th, the policy is still not going to start until January.  If the exchanges aren’t ready until November 1^st, we can still have people covered January 1^st.

The PPACA is a poorly written bill that attempted to do too much in too little time.  I have talked to our elected representatives, staffers, and Health and Human Services (HHS) employees.  They are not evil.  They mean well, but they may be in over their heads.

And that brings us to Senator Ted Cruz.  Mr. Cruz spends an inordinate amount of time talking about defunding “Obamacare”.  Let’s be clear – we are not repealing nor defunding the PPACA.  Mr. Cruz’s entire cynical campaign is a tactless fundraiser and a desperate cry for attention.  Shockingly, even political commentators on FOX are now calling him out as a huckster.

The insurance industry has spent millions upon millions of dollars to comply with this law.  The states have spent as much if not more.  Every business, even ones with only one employee, has had to complete forms and make decisions about health insurance.  Most of the policies for sale today will no longer be available in a few months.

Repeal the PPACA?  Will all of the money, the time, and the effort of the last 3 ½ years be for naught?  Which of the regulations stay on the books?  Which disappear?  Who will tell the sick that their insurance will cease on December 31^st?

The people leading the charge to repeal the PPACA or worse, to simply defund it, will only serve to make a muddled mess worse.  They understand that the Patient Protection and Affordable Care Act could have been slowed or stopped by gently applying the brakes sometime over the last 3 years.  But they never touched the brakes.  Now the PPACA can’t be stopped.

The legislators who never tried to constructively modify the PPACA would like you to believe that they bear no responsibility for any of the problems.  They jumped out of the car.

We’re at the bottom of the hill.

Gary may be a federal employee.  He might be the employee of a federal contractor.  I can’t say.  We were having our third conversation as he tried to solve the ongoing problems with the CMS Enterprise Portal, a multi-purpose site that I needed to access so that I could be registered to work on the new exchanges.  During our second conversation my screen had said that I was locked out of the site while his said that I had an open door.  Sadly, mine was right.  We were about to try again.

Gary, before we start, I have to tell you a quick story.  A buddy of mine called right after we got off the phone yesterday.  He was having difficulty getting in to the Portal.  I got him on to Chrome and walked him right through the process.  No crashes!  No hassles! He is registered.

Wow!

One, I wanted to share a success story.  Two, I want to put this into perspective.  I’m an insurance agent.  I’ve been doing this for 35 years.  This stuff is just a bump in the road.  It is going to work.  And when it does, I will be back to doing what I do – solve problems for individuals and businesses.  This is what you do.  I can only imagine how frustrated YOU are with these system issues.

Thank you Dave.  We are trying.

Did you forget that the guy at the other end of the phone is just another human being?  At what point did we decide that anyone who disagrees with us or doesn’t do what we want them to do is Evil, or Incompetent, or Destroying America?

The Patient Protection and Affordable Care Act (PPACA) is 3 ½ year old.  The law instituted some useful, meaningful changes, some expensive, problematic changes, and some non-starters.  But the most visible, most significant provisions of the law are about to go into effect at the beginning of next month.  Spoiler Alert – this is going to be a rocky start.

I can’t really explain why, perhaps it is my partner Jeff and his incessant talk of Yoga, but I have achieved a certain peace with the PPACA and the upcoming upheaval it may bring.  And because of the calm that I must be projecting, I have fielded lots of calls from not just my individual and employer clients, but also from my fellow agents.  Most of the people I talk to are either hopeful or apprehensive.  Of course, I do get the occasional calls from the angry people who watch too much TV.

My clients, businesses and individuals, want to know how the law will affect them.  Will they get to keep their doctor?  Are the prices going up or down?  Will they be OK?  Isn’t that what we all want to know?  Are we going to be OK?  The answer is YES.

You, Mr. or Ms. Reader, might pay more or less for your health insurance coverage.  We don’t know the answer to that today.  But you will have access to coverage and to care.  And the vast majority of us will adjust, because we always do.  Freaking out about it now accomplishes nothing.  When and if the time comes for you to shop for coverage, you may need to muster all of the skill you recently used to compare cell phone plans or car deals to determine the best program for you.  If you are lucky you will be able to utilize the help of a trusted advisor to help explain your choices.

People in Cleveland may be forced to choose between the Cleveland Clinic and University Hospital systems.  How many Americans wish that they had such a tough decision?  I suspect that the pharmacies will be lining up with specific insurers.  The nearest drug store in your plan may be three blocks from your home instead of two.  We will survive.

This blog has contended for over three years that we are moving away from employer sponsored group health insurance to buy it yourself plans.  Nothing has changed in that assessment.  Your needs aren’t necessarily the same as your co-workers.  You may do a better job of meeting your needs.  Or not.

Many of my peers are more than a little conflicted.  We all know individuals who have been unable to acquire affordable health insurance in the past due to an illness or injury that renders them difficult to insure.  Whether or not the problem was self-inflicted isn’t really relevant at this point.  We want to help them to be insured and the new law may solve some problems.  We are also worried about the clients, individuals and businesses, which may take massive rate increases.  And we are worried about ourselves.  We are being squeezed by both the insurers and the government.  Both would love to eliminate our jobs, but must reluctantly admit to our need in the marketplace.

The last calls are like the one I received Thursday from a man in his early 50’s.  I don’t know why he is on Social Security Disability.  It is none of my business.  I insure his children.  He called to complain about Obamacare.  He spent almost ten minutes of my time complaining about a litany of villains – President Obama, Nancy Pelosi, weak Republicans, all Democrats, etc…  His rant was as tiresome as it was inaccurate.  He even ventured into the Takers and Job Creators territory.  I tried my best to peel him off the ceiling, got bored, and gave up.  There is nothing I could say that would solve his problems.

There are going to be significant computer issues with the new exchanges.  Even registering to be an agent was a challenge.  And the PPACA has real flaws.  Some of those issues could have been resolved, in a bi-partisan fashion, over the last three years.  But they weren’t.  So we will muddle through and the problems, like a dented fender, will be eventually repaired.  But nothing good will come from losing your temper or screaming.  Working for solutions is the only way to accomplish solutions.

Or as Jeff might say, “Close your eyes and take a deep breath”.

I have a quick question for the business owners in the audience – How’s it going?  Been busy?  Terrific.  I hate to bother you, but the U.S. Government has another job for you.  You are going to help steer Americans to the new Health Insurance Exchanges.  And by the way, the gig starts today. 

The legislators and staff who gave us The Patient Protection and Affordable Care Act (PPACA) may not have known anything about health insurance, but they were experts in the federal bureaucracy.   The PPACA’s home address may be the Department of Health and Human Services (HHS), but the Internal Revenue Service, the Department of Labor and other federal agencies are involved with the implementation.  The law has metastasized and can now be found throughout the government, which makes the raw meat mantra of defunding “Obamacare” that much more cynical.   

So Mr. or Ms. Business Owner, how are YOU involved?  This next section is from the Department of Labor’s website.  It is safer to print this exactly as it appears rather than to paraphrase the governmentese and miss something. 

Background On The Notice to Inform Employees of Coverage Options Under the FLSA

Section 18B of the FLSA, as added by section 1512 of the Affordable Care Act, generally provides that, in accordance with regulations promulgated by the Secretary of Labor, an applicable employer must provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), a written notice:

1. Informing the employee of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;
2. If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through the Marketplace; and
3. If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons.⁽²⁾ The Department explained that this notice should be coordinated with HHS’s educational efforts and Internal Revenue Service (IRS) guidance on minimum value. The guidance also stated the Department’s commitment to a smooth implementation process including providing employers with sufficient time to comply and select an applicability date that ensures that employees receive the information at a meaningful time. The guidance further stated that the Department expects the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for the Marketplace.

The Department is issuing this temporary guidance and model notice in advance of the expected timeframe announced in the guidance because, since the issuance of the guidance, the Department has received several requests from employers for a model notice on an earlier timeframe so that they may be able to inform their employees now about the upcoming coverage options through the Marketplace. Therefore, employers are permitted to use the model notice and/or rely on this temporary guidance prior to the applicability date stated below⁽³⁾ to inform their employees earlier. 

OK.  How about in English?  

Employers must provide a notice to each employee about the new Exchanges.  There is no clear exemption for small businesses.  Some parts of the health care laws apply to businesses with over 50 employees.  There are rules for businesses with 20 employees.  This regulation applies to businesses with as few as ONE employee. 

The Department of Labor has, thankfully, created a pair of model documents.  This link takes you to the form to use if you provide health insurance for any of your employees.  This link is to the form for those employers who don’t.    

Both forms advise the employee that he/she may save money by purchasing health insurance on the Exchange.  Both direct the employee to the government’s healthcare.gov website (the home of the internet’s largest collection of pictures of happy people).  Both forms ask who at this business may be contacted to confirm information should the employee choose to apply for coverage on the Exchange.  And if the employer provides coverage, there is a third page that asks the business to voluntarily provide additional information.  Don’t volunteer. 

What are the penalties for failing to comply?  I have no idea.  I gave up looking for that.  I am preparing the forms for my clients.  Some businesses are sending out blank forms.  That would not appear to comply with the law.  

How does a small business that doesn’t offer health insurance, and thus doesn’t have an agent, know to provide this form to its employees?  You’re reading it.  Click on the link and access the form.  And how many of your people will sign up for coverage through the new Exchanges?  We’ll set sales goals next week.

It was Chicken Cordon Bleu prepared by a lifelong vegetarian.  It was a doctoral thesis that had been assigned to an illiterate.  It was how I spent four hours and ten minutes Saturday evening.  It was the federal government’s online classes for agents and brokers.  People who have never purchased nor sold a health policy created these three courses:

• Affordable Care Act and Marketplace Basics
• Individual Marketplace Course
• SHOP Marketplace Course 

I read.  I passed the quizzes.  I aced the tests.  I am now qualified to sell policies that are still waiting for approval on a platform that has yet to be created.  Welcome to health insurance August 2013. 

The Patient Protection and Affordable Care Act (PPACA) mandates that individual health policies will be available through Exchanges.  Because you can never find an insurance agent when you need one, Exchanges were to be created by every state as a way for Americans to efficiently shop for health insurance.  If a state balked at the potential cost or hassle (or at, G-d forbid, appearing to in any way help implement “Obamacare”) the federal government was empowered to create its own Exchange or a state / federal hybrid.  Ohio has opted for the hybrid. 

The PPACA mandates Exchanges, but in a widely misunderstood and disliked law, the concept of Exchanges ranks near the bottom of consumer and employer acceptance.  So the marketers at the U.S. Department of Health and Human Services (HHS) have given us a new term – Marketplace. 

What is a Marketplace?  Think Exchange. 

Today I learned how we in Ohio, which once had hundreds of choices for small group health insurance, will now have more choices even if the actual number of options is way less.  Go ahead and re-read that sentence as many times as necessary until it makes sense.  I also learned that there are only nine easy steps for a small employer (2-50 employees) to purchase health insurance coverage for his/her employees through the SHOP Exchange. 

The individual Exchange is one way someone can purchase personal health insurance coverage.  Why bother with the Exchange?  $$$$  Individuals and families earning between 100% to 400% of the federal poverty level will qualify for subsidies.  You have to go through the Exchange to qualify for the subsidy.  Well over 50% of all applicants will get some premium assistance. 

You can almost hear the border collies herding everyone to the pens. 

We have been promised a single, streamlined form that could be completed by an individual, done over the phone with a government employee, or prepared online.  The online version sounds like it will be the easiest option.  The insurance shopper will be able to do this alone, with a qualified agent, with the yet to be fully defined Navigator, or with a volunteer. 

The form will ask:

• Your name
• Your date of birth
• Your address
• Your citizenship / residency status
• Your marital status
• Do you smoke
• Are you incarcerated
• Your Social Security Number
• Your income
• Do you have access to a qualified, affordable health plan at work
• Are you eligible for government provided health care

And of course, if they are covering any of your family they will need all of the above for them.  The form has yet to be released.  There may be more questions on the actual form. 

The government will verify your answers through the appropriate agencies and determine your eligibility.  Once you are advised of the amount of your subsidy, you may begin to shop for insurance. 

A large portion of today’s classes dealt with how to safeguard the PII, Personally Identifiable Information.  We have been protecting our clients personal information for years.  My office is safe.  My records are private.  The government should do so well.  What has yet to be determined is how the Navigators and volunteer organizations will protect the taxpayer information that will be routinely collected. 

Four hours of this silly dance.  I suspect that I’ve got another hour with the feds next week.  The State of Ohio will have its own class sometime in September.  If this is a war of attrition, they’ve picked a fight with the wrong guys.  Thirty-five years in the business, I’m ready for the marathon.  But I am frustrated with the Hokey-Pokey.

There was a time when children would ask a parent or a teacher how to spell a particular word.  The adult would inevitably send us to the dictionary.  This would often prove to be a lesson in self-reliance, problem solving, and phonetics.  But English being English, a dictionary search could also be a frustrating waste of time. 

Senator Sherrod Brown invited me to a seminar.  The invitation stated that he was bringing the U.S. Department of Health and Human Services to Cleveland on August 8, 2013 to answer questions about the Marketplaces or Exchanges.  I emailed my RSVP within minutes of receiving the invitation. 

We have all seen a young cheerleader whoop it up after her side’s quarterback has thrown an interception, totally unaware of the gravity of the situation.  Well, in the last few weeks I have been on two phone conference / webinars with the Centers for Medicare and Medicaid Services (CMS).  As previously noted, the government employees hosting the meetings were woefully unprepared.  Cheerleading permeated each seminar.  After a basic slide show presentation high on platitudes but almost bereft of facts, questions were thrown to the hosts, who, like the Browns’ receivers, quickly dropped them.  These meetings were frustrating wastes of time. 

I was counting on Senator Brown to host an informative meeting.  Based on the email address, I could tell that this invitation was sent to his supporters, people who had worked on the campaigns and maybe even donated to his campaigns in the past.  This was going to be a friendly crowd.  

The seminar was scheduled for 5:30 – 7:00 PM at The City Club.  That lack of awareness should have been a tip-off.  His staff didn’t know that the Browns were playing their first preseason game that night or that the Indians were hosting a Dollar Dog Night game against the Detroit Tigers.  Both a few blocks away.  

By the way, it shouldn’t be necessary to note this, but the Patient Protection and Affordable Care Act (PPACA) lives at the U.S. Department of Health and Human Services (HHS).  Senator Brown bringing in HHS should be the equivalent of having a Supreme Court Justice explain the Constitution. 

Wrong Again 

Arriving at 5 PM, I knew I had wasted my time the moment I walked into the empty room.  Instead of the Senator and an advance team, I saw a couple of staffers and Sherrod on a screen in the front of the room.  All they had to do is hit play and we would be treated to a quick canned intro from the Senator.  If this presentation wasn’t going to be good enough for him to show, I already knew that I had blown $20 on parking. 

The room was eventually filled with leaders of various not-for-profits, Democratic activists, and the terminally confused.  There were only three insurance agents in the room.  The vibe was positive right up until the presentation started. 

Our young presenter was from Chicago.  We knew this because she mentioned it, and her need to catch a plane, frequently.  Being from out of state was a double liability for her.  She was not prepared to discuss the new regulations and she was often wrong about the Ohio health insurance marketplace.  Worse, the audience quickly sensed her numerous shortcomings.  

Ms. Chicago may have left her pom poms at home, but she was a determined, if not talented, cheerleader.  She begged the audience to remember www.healthcare.gov.  Begged is not an exaggeration.  She told us that the government’s website is the answer to every question you could possibly have about health care and the solution to ANY problem you may ever encounter. 

I was sitting next to the executive director of one of the dread disease foundations.  My tablemate, a young woman in her early thirties, quickly grew frustrated with our presenter’s mistakes, inability to answer the most basic of questions, and repetition of the website address. 

If someone representing the U.S. Department of Health and Human Services can’t answer a basic question, who can?  I asked a question about the Personal Responsibility Fee, which is the new Orwellian way to say the Individual Mandate.  I won’t bore you with the question.  She couldn’t answer it.  Worse, she said that the answer would have to come from the Internal Revenue Service.  THAT IS WRONG.  The IRS may have a hand in administering the PPACA, but HHS is writing the rules. 

But we still have the website.  Good luck finding the answer to your questions there.  And we still have dictionaries.  The huge Webster’s Encyclopedic Unabridged Dictionary of the English Language sitting on my bookshelf may have almost every word in the English language, but it is still a challenge to find the correct spelling of some words.  Sometimes it’s darn near impossible.  Don’t believe me?  Have your child look up “knife”.

A billion here, a billion there, and pretty soon you’re talking real money.

Senator Everett McKinley Dirksen (1896-1969) 

The new rates are out!  The new rates are out!  The Cleveland Plain Dealer reported today (won’t be able to say that much longer) that we finally have the new individual rates under the Patient Protection and Affordable Care Act (PPACA).  These are the prices that Ohioans will pay if they purchase coverage through the new exchanges.  And everyone is thrilled.  Positively giddy. 

Mary Taylor, Lt. Governor and Insurance Commissioner, announced that our rates will be going up an average of 41%.  The Ohio Department of Insurance is projected our average adult premium will be $332.58 per month.  The Democrats were happy since they were worried that the number was going to be higher.  The Republicans were celebrating another opportunity to complain about escalating costs.  And average Ohioans, numb from way too many political ads last November and the recent budget shenanigans, chose to focus on the streaking Cleveland Indians. 

Of course, loving the numbers wasn’t really good enough for either side.  Thankfully there are plenty of chances to evangelize their message and fight with the other side.  And everyone has a dog in this fight. 

Approximately 80 – 90 percent of the people purchasing policies on the public exchange will qualify for a subsidy from the federal government.  As we have discussed previously, the federal government will help you pay your health insurance premium if you earn between 100% – 400% of the federal poverty rate.  That means if you earn less than $45,960 as a single or $94,200 as a family of four, you may qualify for assistance if your employer doesn’t provide adequate group health insurance.   

The left is happily furious that Ms. Taylor reported the real number, $332.58, and not what someone might pay if he/she qualifies for a subsidy.  The Plain Dealer article notes that a 30 year old making $30,000 per year would have a premium of $285 per month, but that the federal government would cover $76 of that monthly fee.  Our hypothetical 30 year old would really have a premium of $209 per month. 

At the risk of appearing to take sides – BALONEY! 

1. The premium really is $285.  Some of it will be paid by the insured and the rest will be paid, in real dollars, to the insurance company.
2. That $76 is actually $912 in year one.
3. President Obama postponed the employer mandate, the tax that was scheduled to cover the cost of subsidizing the individual policies.
4. The uninsured 30 year old that was in my office yesterday was thrilled to acquire a health policy for $92.39 per month.  She would not have purchased a $209 policy.  And yes, coincidentally, she is a hairdresser making $30,000 a year. 

The good news is that if my 30 year old hairdresser is forced to purchase a policy through the exchange next year, she will be acquiring maternity coverage at no additional cost.  She doesn’t think that she needs it, but it couldn’t hurt.  My healthy thirty year old male clients are looking at larger price bumps without a meaningful increase in benefits. 

The Patient Protection and Affordable Care Act was supposed to be revenue neutral.  Sure there were costs associated with implementing the bill, but there were sources of revenue, too.  The first to disappear was the CLASS ACT, a program that was to pay for long term care eventually but front-load some early money for the PPACA.  That program ended almost two years ago.  The real money stream was to come from the employer mandate.  

The nonpartisan Congressional Budget Office has estimated that delaying the employer mandate will cost us $12,000,000,000.  The Washington Post also reports that the CBO estimates that as many as 1 million fewer people will be insured due to the delay. 

While the left denied the existence of mathematics, the right pretended that everyone in our country has access to comprehensive health care.  Blinders on and fully aware that their actions are equivalent to doing nothing, the Republicans of the U.S. House of Representatives voted today for the 40^th time to repeal all or most of Obamacare (PPACA).  Then they went home for the summer recess.  This vote was so irrelevant that the major new outlets ignored it.

But back to Ohio.  Our rates are going up, but it could have been worse.  If you are unhealthy, pregnant, or earning less than 400% of the federal poverty level, the policies may prove to be a good deal.  And if you’re not, well the Indians are 60 – 48.

I used to be a hero.  At one point we had quite a few nanny placement services in Greater Cleveland and many of the young women were hired to work in New York.  Most of these agencies referred their clients, the potential employers, to me for the health insurance needs of the caregivers.  The ones who called were very happy.  One of my health insurance companies would allow an Ohio policyholder to retain her coverage even if she moved to New York City.  Otherwise, she or her employer would have had to purchase a policy there. 

The Ohio policy was hundreds of dollars less per month.  

Hundreds.  Fifteen years ago.  The spread is much higher now. 

Two important questions:

It has been said that the road to Hell is paved with good intentions.  It is hot, really hot, in New York.  Years ago it was decided that all adults under age 65 should pay the same premium.  Twenty-two or sixty-two, the price is the same.  That sounds great if you are in your sixties, but it only works if you can drag the twenty-somethings to the table.  In the beginning your average participant age is in the mid-forties.   As the young drop out, the average age, and the price, increases.  

But age wasn’t the only pricing determinant abandoned in the interest of fairness.  New York insurers were forbidden to underwrite the risks.  The sicker you are the better that deal.  An insulin dependent diabetic with AIDS pays the same premium as someone who is perfectly healthy.  The system, in essence, welcomed pre-existing conditions and penalized the young and healthy. 

And of course, the cost of living is higher in New York, especially in NYC. 

As we have noted previously, Ohioans, on average, pay a lot less for health insurance for all of the reasons that New Yorkers pay more.  I have lots of clients, male and female, under the age of 30.  Some of these young adults shopped for this coverage and pay for it themselves.  The rest of these cases have some degree of parental involvement.  It is much easier for a parent to come up with $70 to $120 a month in Ohio than hundreds more in New York. 

Why are there millions of uninsured New Yorkers?  The 2.6 million number is actually from six years ago.  That number hasn’t gone down.  New Yorkers weren’t required to purchase insurance.  There was no Individual Mandate.  Penalized for their health and youth, many New Yorkers simply chose to not participate.  Making insurance affordable might get them back into the market.  Making insurance mandatory will have more impact.

It has been announced that the New York rates will be plummeting under the Patient Protection and Affordable Care Act (PPACA).  Governor Cuomo is ecstatic.  The President is pointing to New York as a model for the future.  And it is true, at least for the moment, that New York rates are coming down.  A lot.  But if you consider $1,000 per month normal, your great bargain may still sound awful to consumers in Ohio.  This link is to an article that dreams of young people paying only $190 for a basic policy, one that a guy living in Cleveland might buy today for $70! 

Will the New York rates stay cheap?  There are two major speed bumps ahead.  The first is the PPACA.  The 2014 New York rates are certainly much less than the current pricing, but are they cheap enough?  Will the subsidies be enough to spur sales when the penalty (tax or fee depending on your political persuasion) is only $95 or about 1% of income?  With the penalty so low, enforcement challenging, and the entire process confusing, the prediction is that many of the currently healthy uninsured will sit out a year or two.  Lose the young and healthy and New York is right back where it was. 

The second speed bump facing New York is the U S House of Representatives.  The Republicans sensed weakness in the Obama administration’s decision to shelve the employer mandate for a year.  (See previous blog)  Last week the Republicans attempted to put the individual mandate on hold, too.  Of course the bill passed the House.  And you might think that the bill will never see the light of day in the Senate, but don’t be so sure.  Punting the individual mandate might seem like a good idea to a group of people who are used to putting off important decisions and deflecting responsibility.  

Both the Democrats and the Republicans have a reason to kill the individual mandate.  As New York already proved, if we create super health policies that do everything but drive you to the doctor, don’t factor in the health conditions of the insureds, and don’t weigh the premiums properly for the ages of the participants, the rates will go through the roof if you can’t corral the young and healthy into the insurance pool.  Without an individual mandate forcing participation, you create a death spiral.  As the rates increase to reflect the claims, the young and healthy leave.  First the twenty somethings jump out.  Eventually the average age of the participants will be over 50.  Prices will be out of control and there will be only one answer – Single Payer.  

Your friends in New York and California are celebrating the health insurance rates they expect to see in 2014.  It would be tacky to point out that their new rates will still be significantly more than the rates we pay today.  And it is just sad to think that our new rates and their new rates are going to be about the same.

T.S. Eliot famously wrote that the world would end “not with a bang but a whimper”.  The Obama administration must be Mr. Eliot’s biggest fans. 

The Patient Protection and Affordable Care Act (PPACA) was signed into law, amid great fanfare, on March 23, 2010.  Major rules and edicts are released by Kathleen Sebelius, Secretary of Health and Human Services, almost every Friday.  The entire process, if neither practical nor well thought out, has at least been well choreographed.  So imagine the universal surprise everyone experienced with last Tuesday’s whispered announcement.  

Mark Mazur, Assistant Secretary for Tax Policy at the Treasury Department, posted in an official blog that the enforcement of the employer mandate would be postponed for one year.  The provision that medium and large employers (50+ employees) would be required to provide adequate and affordable health insurance to their workers has been put on hold. 

In a blog! 

Rules and regulations will be released next week.  One of the most complicated portions of the PPACA, a series of requirements that have caused businesses and insurers uncounted headaches since the day the law was passed, is kicked back a year and the information is released through a blog, during a holiday week, while the President is on a plane thousands of miles from the U.S. 

Now don’t get me wrong, this blog has asserted as recently as last week that the PPACA needed significant revisions and that it was a shame that the Democrats in Congress seemed incapable of fixing even the largest of problems.  They still aren’t.  The Administration should be commended for doing something, anything, to avert what has been called a “train wreck”. 

Style Points – 0

We are waiting for the details to award points on substance.

Before we get to what this means, let’s first hear from the usual suspects.  Fans of the PPACA were swift to point out that they never really liked the employer mandate. 

Ezra Klein noted in Wonkblog, his excellent online work for the Washington Post, that the employer mandate is a “bad bit of policy” and that it was initially pushed by business groups. 

Steve Benen wrote in MaddowBlog, the official blog of MSNBC’s Rachel Maddow, that this wasn’t really that big a deal since “the delay won’t affect the creation of the exchanges, which should help bridge the gap—folks working for businesses that don’t offer coverage will still be eligible for subsidies they can use to buy insurance in their state marketplace.”  (Different site, same picture)Striking a conciliatory tone, E. Neil Trautwein, a vice-president of the National Retail Federation, said that is was a ‘wise move” and that it “will provide employers and businesses more time to update their health care coverage without the threat of arbitrary punishment.” 

The Republican Leader of the Senate, Mitch McConnell (R-Ky) released a statement that “the fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans.”  Translation – I got nothin’ 

What does it mean?

According to our friends at Anthem Blue Cross, the immediate results of this decision by the Obama Administration are that certain parts of the PPACA will go into effect on 2015 instead of 2014:

1. Employers will not have to report certain information to the IRS.  This has been referred to as “employer reporting requirements”.
2. The rule that says large employers have to offer coverage to full-time workers or pay a penalty.  “Large employer” in this case is a business that has 50 or more full-time or full-time equivalent employees (that work an average of 30 hours a week).
3. The rule that says coverage offered by large employers cannot be more than 9.5% of a worker’s pay for self-only coverage. 

I would add a fourth.  If employers aren’t required to offer coverage, then group health policies (employer sponsored) are not required to comply with the PPACA’s laundry list of Essential Health Benefits.  Large employers will still be able to determine whether they choose to offer Birth Control, IUD’s, and the Morning After Pill as well as other controversial elements of the President’s plan. 

This last issue has been a huge point of contention.  The federal government now has an additional twelve months to resolve these issues.  Unfortunately, only Congress can repair the major flaws of the PPACA, and that is unlikely to happen.  Even if the Democrats were capable of drafting the legislation necessary to make the PPACA effective, the Republicans are too dug in, too invested in the law’s failure at any cost, to throw it a lifesaver. 

So we have been set adrift.  Our only hope will be more regulatory fixes, engineered by the Administration, released by underlings in blogs or buried deep within reports.  All the while employers work and rework their business plans to comply with rules that may change at any time.

Giant Eagle.  Ask a small child where hot dogs come from and he will answer the name of the last place he rode around in a shopping cart.  This is the beginning of a conversation about farms, animals, and possibly soy beans. 

The H.R. Department.  Ask a government bureaucrat or one of our elected officials where a health insurance policy comes from and they might tell you that all of that paperwork originated with Marge in H.R.  And this is the beginning of a conversation about how many of us get our health insurance, from agents servicing individuals, small businesses, and the self-employed. 

This blog, Health Insurance Issues With Dave, has been published for over 4 years.  The original posts were more personal and had less graphs and links.  But this now appears in three formats and has readers around the country, so there is usually less of me and more of a straightforward presentation.  At the risk of shocking or irritating a few of my readers, today’s post will be more personal, more like the originals. 

Let me be clear – I am very concerned.  I’m concerned about the country and how we manage the self-inflicted mess we are about to encounter and I am concerned about me. 

Now before our friends on the right get excited and our friends on the left, agitated, we need to state that there is plenty of blame to go around.  Neither side has listened to the other.  For good or ill, the Patient Protection and Affordable Care Act (PPACA) is the law of the land.  One side has done everything it can to undermine the legislation without any concern for the impact their actions might have on their constituents.  The other side lacks the fire power to execute this massive transition and is too stubborn to pull back to get this right. 

Stubborn – Incompetent – Unconcerned About the Collateral Damage

Too be honest, it is easier to pick on the Democrats, the Department of Health and Human Services, and the President because they are doing something.  It may be Grade C work, but if you are comparing them to Mitch McConnell and John Boehner, then C beats incomplete any day of the week.  In fact, when it comes to the health care debate, the Republican leadership is simply AWOL. 

Last week’s post dealt with the federal government’s invitation only webinar.  The facilitator was asked for some specifics about the “Metal Plans”.  She quickly pooh poohed the question.  From the start, the PPACA has presumed that there would only be a couple of plan options.  Since it is pretty obvious that none of the people who wrote the law have ever actually shopped for insurance, they had no idea what they were creating.  They envisioned a system so simple that even an untrained navigator could help the computer illiterate enroll in coverage. 

I have been given an advance peek at one company’s plans for the new exchange.  To comply with the law, these policies are far more complicated and limiting than the current plans.  Provider networks are shrinking.  Simple deductible / 100% plans are disappearing.  Determining the right policy for an individual or family may take more time, not less, in the future. 

To counter this reality, Secretary of Health and Human Services Kathleen Sebelius excitedly announced this week the creation of a new website and telephone call center.  The number is 1.800.318.2596.  The website is www.healthcare.gov.  Sure the Government Accountability Office (GAO) has found that the federal government and many of the states are “behind schedule”.  Sure we have less than 100 days till the exchanges are supposed to be up and running.  But we have a website and a call center all prepared to tell us how wonderful everything is going to be. 

I went to the website.  It is information light and propaganda heavy.  At one point I found this nugget on the small business page: Insurers can no longer charge more for women.  Of course we know that in the small business market, women are charged more than men at some ages and less than men at other ages.  In other words, the rates reflect the risk.  If the government was interested in presenting facts instead of simply selling, the page would note that rates will now be gender neutral.  I would tell you more about the site, but they still have work to do on it.  My computer froze while on the site and I had to reboot to get back to work. 

I’m worried about us because these people are in over their heads.  They’ve got the pitch memorized but they don’t understand the product.  And they don’t know enough to care. 

And I’m worried about me.  I have been doing this since 1979.  The things I know and the work I am capable of doing, is no longer valued and may not be compensated.  I have about 500 clients.  Most of them have employees.  They are all impacted by these changes.  Some will save money.  Some of my clients are about to take a hit.  Each needs a personal strategy.  Each needs time, my time.  And the truth is that none of my peers knows, today, how much time we will be able to spend with our clients. 

Tuesday I talked with an agent who is abandoning the individual market.  Too much time.  Too much effort.  Too little money after the last round of commission cuts.  He wants to spend all of his time working with businesses with 50 or more employees.  He is a fifteen year veteran of this business.  His clients will notice his absence.  He can’t be replaced by a volunteer from the local union hall.  And neither can I. 

On October 1, 2013 we will not enter the gates of insurance heaven nor fall into a dark abyss.  No, it will be something in between, mediocre, messy, but just close enough to warrant, at least initially, a C.  

And I will fight on for me and for my clients.  But I would have to be deaf or in denial if I said that I didn’t hear the tar pits calling.