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The Patient Protection and Affordable Care Act is not going to be repealed or reversed anytime soon.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

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.

Insurance is real. My job is to work with real people, everyday, to solve real problems. I get angry and frustrated when the theoretical and the hypothetical invade my space and get in my way. Yes, I have an agenda. All but the apathetic have an agenda. The undeclared and disorganized agenda of the national Democrats interfered with my work this week. And I am more than just a little upset.

Jimmy (yes, the name is changed) is a healthy eleven year old living in Greater Cleveland. I have no idea where his dad lives. Jimmy lives with his mother, Wendy, a woman who has not worked since her unfortunate skiing accident of a few years ago. Jimmy’s major bills, like school, are paid by a generous aunt. Jimmy is uninsured.

Wendy had insurance for her son and herself, but she let it lapse in August. She didn’t pay the insurance and she didn’t tell her sister until last Monday. Why are the dates important? Because now we have a problem.

Wendy’s sister would have kept the old policy active, had she been notified in a timely manner. Though Wendy has recovered, for the most part, from her serious injuries, she is difficult to insure at this time. Due to the new health bill, we can not write a Child, Only policy on Jimmy. We could two weeks ago. A comprehensive policy on a healthy eleven year old used to be around $100 a month. That policy no longer exists.

Proponents of the new health care legislation, the Patient Protection and Affordable Care Act, love to cite the new provisions for covering children. No underwriting. No limits on preexisting conditions. Totally free preventive care. How do you price that policy? How do you properly build reserves for the sudden, and massive, shift of risk as parents currently paying for underwritten policies move to blindly issued contracts? You can’t. The insurance companies eliminated all Child, Only policies.

How many unhealthy kids are there? How many of my clients, small businesses in Northeast Ohio, are paying higher premiums because the owner’s child has a heart condition or a genetic disorder or some other ailment that requires substantial care? LOTS. And if the insurers didn’t play self-defense, if the companies unthinkingly threw open the doors and took all of them at a standard rates, the results would be devastating.

So where does that leave Jimmy, our healthy eleven year old? I can write, for the moment, short term, catastrophic coverage on Wendy and Jimmy. G-d forbid insurance. It is the best I can do. Governor Strickland, realizing the mess Washington has created, signed an emergency order this week to force the insurance companies to have a special “open enrollment” for Child, Only policies. Medical Mutual of Ohio, Anthem Blue Cross, and UnitedHealth Care have yet to determine how to comply with this order or how to price the product.

We had a health care system. It was uniquely American and it served 80% to 85% of us. It was hardly perfect, but it was ours and, like it or not, it reflected our values and our tastes. We needed to improve the system we had to better serve all Americans. Instead, we are in the process of dismantling our method of paying for health care and interacting with our medical providers.

Jimmy is just, to use the proper term, collateral damage.

DAVE

www.bogartcunix.com

A few short posts about life as I know it.

Sprinkling a Little Holy Water

Boundaries. I noted a few weeks ago in my other blog, Again? Really?, that neither Reverend Kenneth Chaulker nor I should comment on the Catholic Church’s ongoing problems. I was reacting to his letter in the Plain Dealer. My suggestion was to leave the discussion of Catholicism to Catholics. Last Friday’s Plain Dealer gave us an opinion column from Sister Simone Campbell, the executive director of a Catholic social justice lobbying group based in Washington, D.C. If I compare her level of understanding of the real world issues involved in the health insurance debate, I am now qualified to lead Mass.

Just as I might be able to mouth the words in Latin, Sister Simone Campbell provided us, the readers, with another copy of the talking points from the Democratic Party’s campaign. About a third of the essay is a defense of the politicians who voted for the bill and an attack against those of us who have yet to be converted.

There are real discussions taking place around this country among business owners who will be forced to pay higher premiums, taxpayers asked to subsidize unfunded mandates, and legislators challenged to justify their decisions. Sister Campbell, like me in a church, is just another kibitzer.

Addicted? We’ve Got a Cure!

A series of emails arrived last week to alert me about an issue that could affect my clients. The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) applies to group insurance plans covering 50 or more employees. The law went into effect last October. The rules were issued three months later in January 2010. I printed the key email, a white paper from Milliman, the independent actuarial and consulting firm, and noticed an important sentence at the bottom of the page:

This document was sponsored and commissioned by Pfizer, Inc.

Pfizer? The name of the paper: The Mental Health Parity and Addiction Equity Act: Key Elements and Implications for Smoking Cessation.

Plan sponsors and their service providers and advisors need to be diligent when identifying insured benefits to be compliant with MHPAEA. For instance, it is easy to overlook smoking cessation benefits: they are covered by the act because they are a treatment for nicotine addiction, a substance use disorder.

Now it makes sense. Smoking isn’t a bad habit. It is a sickness. And we’ve got prescriptions for that. Guess who makes them?

The Good News – You’re Living Longer
The Bad News – That’s Gonna Cost You

John Hancock, a leader in Long Term Care Insurance (LTCi), recently announced a price increase. A careful study of all of their long term care claims (both group and individual) of the last twenty years forced them to make this decision.

Morbidity is up. Mortality is down.

Long Term Care Insurance pays when the insured is unable to perform two out of six of the Activities of Daily Living – bathing, dressing, using the toilet, transferring (to and from bed or chair), caring for incontinence, and eating. Hancock has seen an increase in claims and the claims are lasting longer. People are living longer after they begin to receive benefits. More people are living to an age where claims are almost inevitable.

The higher than anticipated utilization proves the need for the product. It also forced the reevaluation of the premium. John Hancock has been selling LTCi for less than thirty years, but has already paid out more than $3 billion in claims.

Why should you care? Because, insurance isn’t as easy as it looks. For every profitable line, there are types of coverages with very thin margins. And we want our insurers to be here, solvent, when we need them to write that check to us or our family. The insurers must maintain secure reserves. Their books have to balance. Their numbers have to be real.

All of the wishing and praying in the world can’t change the nature of basic mathematics.

DAVE

www.bogartcunix.com

By the way, I know that Mass is now done in English, but just as I prefer Hebrew in the synagogue, if I was going to celebrate Mass, I would go for the Latin.

My business is on hold. I’m not talking about the phones. I’m not talking figuratively. Literally, a major portion of my business is on hold. There is so much uncertainty, so little clarity, that I am, for the next few days, unable to write new individual health insurance policies through the largest insurers in this area.

I first noticed this about a week ago. One of my Anthem clients has a policy renewing October 1st. The new premium wasn’t too bad, but she wanted to know about other options. I couldn’t locate the link on their website. Admitting computer illiteracy, I sent a request in to Agency Services. I was shocked by Anthem’s response. The link was removed because there are no options. I was asked to resubmit my request after September 23rd. Anthem is waiting to see what the federal government is going to do.

Thirty-two years in the business and this is the first time I’ve ever seen an insurer tread water. I decided to run a quote for her as if she was a new client. My software said “Tilt”. Anthem’s online quoting had this note: “Plans and rates effective 9/23/10 and after will be available as soon as our Health Care Reform compliant plans are available for sale.” If you need a new health insurance policy, Anthem is not an option. At least, not today.

Medical Mutual of Ohio is still quoting. In fact, MMO will quote their entire product line, but all applications with an effective date of September 23rd or later won’t be issued if children are to be included in the plan. Family policies are put on Underwriting Hold. The applications aren’t declined. They certainly aren’t issued. These potential policies are in limbo.

What can the insurer’s do? The Patient Protection and Affordable Care Act is a shell of goals and half-baked concepts. The rules and regs are still being written and many will apply, retroactively, to March 21, 2010. And, the insurers had better not complain. Kathleen Sebelius, the Secretary of U.S. Health and Human Services, is threatening any insurer who informs its clients of the actual costs associated with this scheme.

We have discussed the whole grandfather issue in previous posts. Grandfathering separates which business might escape some of these new rules for awhile and who will be impacted immediately. Businesses covered by Aetna don’t have to waste anytime studying the grandfather provisions. Between the recently written regulations and a couple of Aetna’s decisions, no Aetna small group health policy qualifies to be grandfathered.

Children are a key part of next week’s problems. Can they be underwritten? Can the insurance industry really cover every preexisting condition for every child, with no limits, without raising the price of policies? How much is enough? Who is going to pay?

Since we have never had an honest discussion about price or goals, we have arrived, six months into this grand experiment, at a crossroads. Some form of nationalized health care still appears inevitable, but the President and Congress refuse to put their cards on the table. Without taking the time to clearly define the goals and costs, we are at the first of several predictable impasses.

The insurers will be happy to sell supplements to the future government health plan. UNUM has already released the first plans specifically designed for that. Assurant and UnitedHealth One have new accident and dental policies. What are they supplementing? The federal government has done a great job of pressuring the insurance companies, but it is ill prepared to handle its part of the program.

So, a major portion of my business is on hold. If you and your family need coverage as of October 1st, I may, or may not, be able to help you. I hope to know more by next Thursday.

DAVE

www.bogartcunix.com

The Heck with building better highways for better Negro marchers. What we need is to get our fair share of the crooked contracts that build those highways.

Godfrey Cambridge

How do you define equal opportunity? In Cuyahoga County, the right last name and a lack of scruples guaranteed a safe and secure government job. These positions may not have paid very well, but attendance appears to have been optional.

I am happy to report that you don’t have to settle for county money. The federal government is dedicated to equal opportunity for all Americans willing to engage in criminal activity. If you are ready to make serious money, Medicare Fraud could be your big break.

A recent report on 60 Minutes detailed the scope of Medicare Fraud, how easy it is to steal from the U.S., and our government’s inability to control a program that insures almost 50 million Americans. It is estimated that WE, the U.S. taxpayers, are losing about $60,000,000,000 a year to Medicare Fraud.

Medicare Fraud could be overbilling or double billing. Unfortunately, it is most often the filing of claims for goods or services that were never provided. These aren’t errors. We are discussing the theft of billions of dollars.

The politicians will tell you that they are doing a great job. Sure Medicare Fraud is a huge problem, but they are holding Summits and making arrests. Kathleen Sebelius, the Secretary of U.S. Health and Human Services, posted her August 26th speech at the Stop Medicare Fraud Summit. Read her speech where she described band-aids like an excited four year old.

Last Friday The Miami Herald reported that Ernesto Montaner was sentenced to four years in prison and Jose Varona , three. The two men were also ordered to repay a total of $4 million. They were billing Medicare for rehabilitation services that never took place. Montaner’s father, the brains of the group, is in Costa Rica. What the story doesn’t say is how much money they really stole and what, if any, will ever be repaid.

Medicare Fraud is out of control because the government won’t allocate the necessary resources. Congressmen, like Anthony Weiner, often cite Medicare’s overhead as only 4%. As noted in the February 5, 2010 posting of this blog, Mr. Weiner has even claimed a preposterous 1% overhead.

* Let’s pretend that 4% is accurate.
* Let’s pretend that much of Medicare’s actual expenses don’t fall into other parts of the federal budget.
* Let’s forget about all of the costs shifted to our law enforcement agencies and courts.

Medicare paid approximately $430 billion in claims last year. $60 billion went to thieves. That is 14%! That money didn’t go to care. That money didn’t go to prevention. That money wasn’t even spent on taxable salaries. It is money, your money, flushed down the toilet.

The new health care bill, the Patient Protection and Affordable Care Act, attempts to level the playing field. Insurers are being forced to reduce their overhead expenses. Part of the savings will come from a reduction in agent compensation (ouch). Home Office personnel will also be cut. But the insurers, unlike the government, will never pay out 10% or more of their claims to crooks.

As long as there are cars, there will be ample opportunities to scam big money as a construction contractor. But I think if Godfrey Cambridge was delivering that stand-up comedy routine today about equal opportunity, he would want to know whether Blacks in Detroit or Los Angeles were getting their fair share of the Medicare Fraud largesse.

Rest in Peace Mr. Cambridge. Everyone’s getting their cut.

DAVE

www.bogartcunix.com

My friend Mitch, who lives in Montreal, was stuck overnight in Cleveland. Mitch used to live on Solon. He misses his friends, our shopping, and our health care – in that order. While visiting him at the airport Marriott, he once again regaled me with his stories of fighting for the attention of Canadian doctors and hospital staff. He hopes to return to the U.S. one day. He is counting on our system to still be here for him.

Mitch and my friends on the far right are very worried that we will one day have a single payer, rigid system like Canada’s. My one word answer is to RELAX. If you would like proof that their fears are in vain, I give you an article in yesterday’s Plain Dealer.

The story, a reprint of a New York Times article, was about medical marijuana. Medical marijuana is legal in some states, illegal in others. It is banned by some employers while ignored by others. The federal government has raided distribution centers while giving lip-service to states’ rights.

We are Americans. We could never tolerate an absence of choice. We would never accept a one-way, the only way, type of health care system. We are contrarians by nature. Our rules constantly change because we are constantly changing.

The short article included a brief description of Nick Stennet’s employment problem. Mr. Stennet told his employer about his health problems and his daily use of medical marijuana. He was later fired when, surprise, he failed the drug test. The lawyers should have a field day with this.

The laws in Rhode Island might be like the laws in Hawaii, but very different than those in Utah or Alabama. People in Maine choose to live in Maine, not New Hampshire. And California is constantly at war with itself. That’s us. This is the essence of the United States.

Rigid? Choiceless? Single-payer with no other options? That’s just not our style.

DAVE

www.bogartcunix.com

My last post on Health Insurance Issues With Dave generated a lot of responses. Some people were frustrated with yet another under-publicized provision of the Patient Protection and Affordable Care Act. Some used my article as an opportunity to complain about the Democrats, in general, and the President, in particular. But the phone calls all went something like this:

Dave, OK I’m scared. This doesn’t apply to me, right? I’m grandfathered.
No, it does and you aren’t!

There was an excellent article about the rules to be eligible to retain grandfathered status in the August 8th Plain Dealer Forum Section. It was written by Michael P. Coyne. The article tied in so well with my blog and my clients’ concerns that I felt compelled to write a Letter to the Editor. This appeared Saturday, August 14th.

Michael P. Coyne’s article about “grandfathered” health plans (Forum, Sunday) shed some light on the challenges small businesses face with the Patient Protection and Affordable Care Act. Please let me add a real-world example.
A client called recently to verify that his plan still qualified as “grandfathered.” It didn’t. He employees about 25 skilled and semiskilled workers and has always provided health insurance. His June renewal with a major carrier included a rate increase of 23.7 percent. Luckily for his employees, another carrier with a little better coverage was less expensive. The employees won. The employer won. Everyone is happy — except Washington.
You lose your “grandfathered” status if you change insurance carriers.
“Why should I be punished?” my client asked. “They now have better coverage.”
The answer, of course, is simple. None of this is about coverage.

Is it really that simple? Yes. Unions can change insurance carriers without forfeiting their grandfathered status. Businesses can not. Will this affect the client’s employees and how he does business? Definitely. I’m positive that this legislation will have a significant impact on the payment and delivery of health care.

The rules may be written on the fly, but the outcome appears to be predetermined.

DAVE

www.bogartcunix.com

By the way, special thanks to those of you who followed ALL of the links in the last post. Even the most serious of topics needs a little levity.

Grandfathered – The right to stay under the old rules and regulations that new policies must follow. The more onerous the new rules and regulations, the more desirable it is to be grandfathered.

The new rules are coming. In a rush to change the delivery and payment of health care as quickly and as irrevocably as possible, Congress made the Patient Protection and Affordable Care Act effective the day it was signed into law, march 23, 2010. The rules have yet to be written. The U.S. Departments of Treasury, Labor, and Health and Human Services are issuing interim final rules. Nothing is set in stone, except that all of the rules they create will apply to all group and individual health insurance policies that aren’t grandfathered.

Policies on the books as of March 23, 2010 may be grandfathered, may be exempted from some of the new rules. Which rules? Who knows? The rules and regs are fluid. The insurers are being pressured to institute some changes “voluntarily”.

How important is grandfathered status? There is no way to assess the value at this point, but the government is attempting to make it very difficult to maintain. So difficult in fact, that the rules to keep that status got my attention. When Washington erects this many roadblocks, and a damaged bridge isn’t involved, you might want to see what is on the other side.

The following, courtesy of Medical Mutual of Ohio, is a synopsis of the Interim Final Rule for the maintenance of the status of a grandfathered plan. The following changes will cause individual and employer plans to no longer be grandfathered:
* A merger, acquisition or similar business restructuring, if the principal purpose of the action is to cover new individuals under the grandfathered plan.
* A substantial elimination of benefits to diagnose or treat a particular condition.
* Any increase in cost-sharing percentage requirements (such as coinsurance) above the level in effect as of March 23, 2010.
* An increase in the fixed-amount, cost-sharing requirements (e.g., deductible or out-of-pocket limits) above the level in effect on March 23, 2010, other than copayments, that exceeds the sum of medical inflation plus 15 percent.
* An increase in copayments above the level in effect on March 23, 2010, by an amount that exceeds the greater of the sum of medical inflation plus 15 percent or $5, adjusted annually by medical inflation.
* A contribution rate decrease by an employer or employee organization of more than 5 percent below the contribution rate on March 23, 2010, for any tier of coverage and any class of similarly situated individuals.
* The addition of an overall annual limit on the dollar value of benefits if the plan was not imposing an overall annual or lifetime limit on the dollar value of benefits on March 23, 2010.
* The addition of an overall annual limit on the dollar value that is lower than the dollar value of the lifetime limit on March 23, 2010.
* Any decrease in dollar value of the overall annual limit (regardless of whether the plan had an overall lifetime limit on March 23, 2010), if the plan imposed an overall annual limit on the dollar value of all benefits.
* A change in health plan carriers (changing a third party administrator has no effect).

Almost any change made since March 23, 2010 disqualifies your plan from being grandfathered. Did you know that in April when you raised your deductible? Have you changed your copays lately? Even replacing the exact same benefits with a different insurance carrier causes you to forfeit your grandfathered status. This isn’t about you, your business, or your employees. It certainly is not about making your current policy more effective.

Will there be any benefit to having a grandfathered health plan? I don’t know. But, the government thinks that there will be a real value and Washington is working very hard to take it away from you.

DAVE

www.bogartcunix.com

Three minutes. Citizens are allowed three minutes to address the Beachwood City Council at regularly scheduled meetings. This isn’t a Q & A. If the Councilmen deign to respond to the concerns raised or answer the questions asked, it will happen whenever they choose. The agenda designates this as Citizens’ Remarks. The microphone is yours. You have three minutes.

I used to attend every Council meeting. A special entry was added to the City’s agenda, Chamber Report, for me to address Council. But I am no longer the president of the chamber of commerce and I have other ways to spend two Monday evenings a month. I forced myself to attend last night’s (July 19th) meeting.

The City of Beachwood is ready to take a 33% income tax hike. Beachwood would jump from one and a half percent to two. City revenues are down in these tough economic times. The goal is to tax the people who work here, but can’t vote, as opposed to the people who live here and can. I was at the meeting to watch City Council sing and dance.

I had no intention of speaking at the meeting until I saw item 9 on the agenda:

An Ordinance extending a Contract with Medical Mutual of Ohio (MMO) for renewal of health insurance coverage for City employees, declaring the existence of an emergency condition regarding health insurance coverage and further waiving competitive bidding.

I read that paragraph several times. This was easily one of the most ridiculous things I had seen in thirty-two years in the insurance business. Ticked off, I waited for the Citizens’ Remarks portion of the meeting.

I began by clearly stating that I don’t work with municipalities. My interest was strictly that of a taxpayer. I noted that there are no insurance emergencies. The City had plenty of time to get bids from countless other insurers. Anthem? UnitedHealth Care? Aetna? They simply didn’t bother. Why would they? They’ve got us to pay the bills.

As the meeting dragged on, we eventually learned that the City never negotiated with the employees to accept a less expensive policy. The City never negotiated with the employees to increase their contribution. Beachwood hasn’t solicited for bids in years. The Mayor and Council can’t help themselves. They are addicted to other people’s money.

Other people’s money is a common addiction. I was thinking about it earlier yesterday as I was reading an email from Michelle Obama. Yes, I’m on her email list. She and other members of the White House send me emails all of the time.

Anyway, Michelle (she calls me David) wanted me to know about all of the great ways that the new health care bill was going to help my family and lower costs.

So much of what makes this law great is its emphasis on preventive care–right now, too many people aren’t getting the check-ups or the screenings they need to stay healthy. Twelve percent of kids haven’t seen a doctor in the past year. And 59 million adults–and 11 million children–depend on an insurance plan that does not cover basic immunizations.

Health reform is changing that. Under this new law, all new private plans will provide basic preventive services–things like childhood immunizations and checkups, mammograms, colonoscopies, cervical screenings, and treatment for high blood pressure–absolutely free of charge. No copay. No deductible. No co-insurance needed.

Does this mean that America’s doctors will be providing free exams? Will labs dedicate entire months to free blood work? Will pharmacies dispense free blood pressure medications? Of course not. Our medical providers expect to be paid for their time and efforts. Rightfully so. These tests, services, and products aren’t free. Your insurance will pay for them. And you will pay more for your insurance.

Nothing is free save your mother’s love. But when you are addicted to other people’s money, you lose sight of the real cost of anything. There is always someone there to pick up the tab. And eventually the addicts forget that there is a cost. But actions have consequences. Goods and services and not free.

Beachwood, and countless other municipalities around the country, will get a crash course in effective budget management. They may even be forced to make some tough decisions. The new health bill has already begun to force business owners to make tough decisions. The only Americans unaffected are like my email buddy, Michelle, the ones addicted to other people’s money.

DAVE
www.bogartcunix.com