Freedom…It Doesn’t Mean What You Think It Means

Last week, the Democrats held their Winter Meeting at the Capital Hilton, where Emperor Obama, Slayer of Insurance Companies, Defender of the Poor (and making more every day), the Duke of Deficits, addressed his faithful assembled minions, dispensing tidbits of propaganda like an imperial Pez dispenser, reeling them in with promises of endless supplies of government candy, assuring them it is oh so good for them.

Obama declared that “[a]s Democrats, we’ve let the other side define the word ‘freedom’ for too long…freedom for ordinary Americans to honestly pursue their dreams, that’s what we believe.” He went on to define freedom as the power of government to protect you from any adverse circumstance that may arise in your life, and as the ability for government to provide for your health care, your retirement, food, housing, and so on and so forth.

To quote the inimitable Inigo Montoya, the glorious Spaniard from one of my all time favorite movies, The Princess Bride…Mr. Obama, “You keep using that word [freedom]…I do not think it means what you think it means!’” What Obama is describing is not freedom; it is lifelong dependency on the gargantuan Nanny State, with promises of cradle-to-grave nurturing no matter how irresponsible the decisions you make in your life. Of course, the only way for government to protect you from your own mistakes is by forcing others to pay the price for you. Every action has a consequence, and just because you don’t suffer does not mean that someone does not suffer. Someone has to pay the piper. There is no free lunch.

LOLbamacare: Administration extends health plan fix for two years

Nearly an hour after the House of Representatives passed a measure to ostensibly delay enforcement of the individual mandate, the Centers for Medicare and Medicaid Services announced that it would extend the “administrative fix” for canceled health plans through 2016 as well as extended the open enrollment period for 2015:

The Obama administration announced Wednesday it will let people with health insurance plans that don’t comply with the Affordable Care Act standard to keep them into 2017 if their states permit.

The administration also extended Obamacare’s open enrollment for next year by one month—it now will run from Nov. 15, 2014, until Feb. 15, 2015—and gave insurers more financial help in dealing with costs from new ACA enrollees.

The announced rule changes also simplified the paperwork that larger employers will have to file when the rule obliging them to offer affordable health insurance to workers begins in 2015.
Under the new rule, people who maintain those plans, and who renew them as late as Oct. 1, 2016, will be able to keep them until as late as 2017. The administration said the rule will apply to anyone currently in a non-compliant small-group plan, as well as an individual plan, and said it would be up to individual states to allow the extension, and to what extent.

Wisconsin Republican proposes “If You Like Your Health Plan, You Can Keep It Act”

Ron Johnson

Back in 2009, as he was beginning the push for his so-called “healthcare reform” law, President Barack Obama promised Americans that they would be able to keep health insurance plan. “No one will take it away,” he said. “No matter what.”

That promise has turned out has turned out to be a lie, as hundreds of thousands of people have lost their health insurance because their plans weren’t compatible with the mandates implemented under Obamacare. Many will now be left to find more costly plans with benefits that they may not want or need.

Sen. Ron Johnson (R-WI) is hoping to fix this very real and serious problem. He’s proposed the “If You Like Your Health Plan, You Can Keep It Act,” which will give Americans the opportunity to retain the health insurance plan they had before Obamacare took it away from them.

“One of the most important promises made by President Obama and Democrat congressional leadership to promote the Affordable Care Act was that Americans who were satisfied with their health plans could keep them,” said Johnson in a statement from his office. “That promise has been broken. More than a million Americans have been notified that the plans they like with the coverage they have chosen have been canceled. Millions more Americans will have the plans of their choice canceled in months to come.”

Know Your Consumer-Driven Health Care: HRA

This is the second of three posts on the primary consumer-driven health care arrangements under the current Internal Revenue Code.

The first post on consumer-driven health care discussed the health FSA, a useful but ultimately flawed vehicle hampered primarily by the use-it-or-lose it rule and ObamaCare limits.  This post discusses the HRA, a more dynamic arrangement that can be used in many creative and powerful ways - pending a number of ObamaCare changes that will dramatically limit the HRA’s versatility.

As stated in the first post, the ideal consumer-driven health care vehicle should strive to achieve three main objectives:

  1. Provide incentive for the individual to spend less on health expenses;
  2. Maximize the individual’s flexibility in contributions and ownership of all assets contributed; and
  3. Limit the individual’s financial exposure by including an out-of-pocket maximum

What is an HRA?

A health reimbursement arrangement (HRA) is a creature of Sections 105 and 106 of the Internal Revenue Code.  It’s an entirely employer funded account used to pay for health care expenses on a tax-free basis.  Employers can structure HRAs to offer many benefits, including:

  • Direct reimbursement for medical expenses as the primary form of health coverage;
  • A way to pay for deductibles and other out-of-pocket expenses from major medical coverage;
  • As an account to pay for the premiums for major medical coverage; or
  • Any combination of those purposes

This versatility, as well as a few other key advantages over the health FSA, have made the HRA a commonly used employer-sponsored plan since 2002 when IRS guidance first blessed the HRA concept.

The Good

Surprise! Obamacare “enrollees” aren’t making premium payments

Many of the purported Obamacare enrollees aren’t making their insurance premium payments. While the Obama administration touted the 8 million sign ups when the first open enrollment period, the House Energy and Commerce Committee reported in May that 20 percent of those consumers hadn’t paid their premiums as of mid-May.

But one major health insurers participating in the Obamacare exchanges has indicated that the number of customers not paying their premiums is a little higher, according to a report from Investor’s Business Daily:

The nation’s third-largest health insurer had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects that to fall to “just over 500,000” by the end of the year.

That would leave Aetna’s paid enrollment down as much as 30% from that May sign-up tally.

“I think we will see some attrition … We’re already seeing it. And we expect that to continue through the end of the year,” CEO Mark Bertolini said in a July 29 conference call.
[A]s one of ObamaCare’s largest players, participating in exchanges in 16 states plus D.C., Aetna’s experience provides a pretty good window into what is happening across the country, and there are other indications that enrollment has turned down.

Cronyism: White House advisor intervened to expand Obamacare’s health insurance bailout to limit dramatic premium increases

Barack Obama and Valerie Jarrett

The House Oversight and Government Reform Committee has uncovered correspondence between White House advisor Valerie Jarrett and a health insurance company executive after he gave a “heads-up” that the Obamacare bailout wouldn’t be enough to avoid the “unwelcome surprise” of higher than expected premium increases.

Chet Burrell, President and CEO of Care First Blue Cross Blue Shield, reached out to Jarrett on April 4 at 10:20 am to bring the issue to her attention. Katherine Branch, the White House advisor’s assistant, replied less than 30 minutes later to ask if he was available to talk to Jarrett later that afternoon.

Burrell and Jarrett apparently had that little chat. He followed up the next day with a summary of the issue he talked with her about. The document attached in the email expressed concern over the budget neutrality of Obamacare’s “risk corridor” program, known to many as the insurer “bailout.”

The risk corridor program guarantees payments from the from the federal government to insurers if the risk pool isn’t properly balanced with the young and healthy people who are intended to offset the costs of sick and unhealthy consumers. The payments come from a fund into which insurers contribute, and it was originally scored as budget-neutral, meaning that there wouldn’t be any cost to taxpayers.

Given the unlikelihood of many insurers contributing to the program due to unbalanced risk pools, Burrell suggested that insurance premiums would rise, and spark a negative public reaction, unless the administration was willing to “clarify” (read: provide more funding) the bailout rule.

Republicans have a responsibility to take on Barack Obama if he illegally bails out health insurance companies

There could be a legal complication for health insurance companies relying on a bailout from the Obama administration in the (likely) event that they lose money because of Obamacare. Peter Suderman recently explained that Congress hasn’t appropriated any money to pay for this bailout:

Last month, buried in a 435-page regulatory filing from the Centers for Medicaid and Medicaid Services (CMS), the Obama administration attempted to reassure the health insurance industry that, if necessary, federal officials would find money to make payments for Obamacare’s “risk corridors”—the temporary shared-risk financing system built into the health law that has been dubbed a bailout of the health insurance industry.

The regulatory filing reiterated the administration’s position that the program would likely be revenue neutral. But in the event that it’s not, it seemed designed to suggest that insurers shouldn’t worry.
The complication comes from the final phrase: “subject to the availability of appropriations.”

That could be a problem. Because according to a January memo from the Congressional Research Service (CRS), there do not appear to be appropriations available to make the payments. Although the health law does direct the Secretary of Health and Human Services to make risk corridor payments, the CRS memo explains that the legislation “does not specify a source from which those payments are to be made.”

Obamacare supporters worried enrollees won’t keep making premium payments

Even though polls show that Obamacare remains unpopular with the American public, its supporters have been pushing the number of purported “enrollments” as part of their narrative that the debate on the law is over.

But Obamacare supporters are finding themselves with a new reality — those who signed up for the health insurance plans through the state and federal exchanges, you know, actually have to make their premium payments, and keep making them or lose their coverage:

Advocates say they’re concerned about the newly insured’s understanding of how their coverage works. About two in three adults who were likely candidates for exchange coverage said they had gaps in their understanding of basic insurance terms, according an Urban Institute survey. Advocates fear that as people use the insurance they might face out-of-pocket costs they hadn’t anticipated and could decide to drop coverage if they find it too expensive.

“We’re thinking about that a lot more here,” said Elizabeth Carpenter, a director at the Avalere Health consulting firm who is closely tracking insurers. “People need to pay their premiums the first month, and they need to keep paying the premiums.”

Washington state to ban narrow insurance networks

Mike Kreidler

In response to residents’ complaints, the Washington state insurance commissioner is getting ready to announce new regulations that would prohibit health insurance companies from offering plans with narrow provider networks:

The practice of offering relatively inexpensive health plans with bare-bones provider networks has created tension between making health care affordable and keeping it accessible. It’s set to come to a head this week in Olympia.

The growth of “narrow networks” in Washington comes as the Affordable Care Act limits the ability of insurance companies to control their costs. That’s made it harder to offer plans at a range of prices — something the companies want to do as they compete for comparison shoppers on the health exchanges.

Many companies figured out they could sell cheaper plans that offer consumers fewer choices of where to get care. That caught some consumers, and Washington’s insurance commissioner, by surprise.
[Commissioner Mike] Kreidler is expected to approve new rules this week that would make it harder for insurers to thin out their networks. He says consumers should have some basic safeguards: You shouldn’t have to drive too far or wait too long for care, and you should be able to find the specialists you need.

Colorado may charge insurers a fee to run Obamacare exchange

Of course, as is the case with most regulations and taxes, the fee Colorado officials are reportedly considering to pay for the state’s Obamacare exchange will be passed by health insurance companies to consumers:

A $13 million fee on all Coloradans with health insurance would pay half the operating costs at the state health exchange next year and in 2016 under the newest financial projections.

The proposed fee would affect at least 875,000 people and includes Coloradans who get their insurance through their employers or outside the exchange.
Exchange managers announced earlier this week that they sold private health plans to 124,000 people through the end of March. People who buy through the exchange will get hit with two fees. They are currently paying a user fee of 1.4 percent and that fee is projected to rise as high as 3 percent by 2017. On top of the user fees, people who buy through the exchange will also pay the fee that exchange managers are calling a “general market health insurer assessment.”

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