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Health Insurance As It Should Be (Part 2 of 2): Preventative, Wellness & Biometrics, Genetics & DNA

Under the ACA preventative care was free. At least there was no charge to the insured at the time they received the exam, the cost was built into the premiums. The argument was that an advanced diagnosis would save long term medical costs because illnesses would be caught at an early stage.

If we use that same argument to create “health Insurance as it should be” there are three key strategies that would prove to be very effective.  Here they are and here’s how to use them. (1) Preventative – Individuals have a responsibility to be examined at least periodically (every two years, yearly as we get older – I’ll let the AMA set the standard) and get their immunizations. Those that do receive a lower insurance premium. (2) Wellness / Biometrics – Smokers should be charged more (no need to argue why, everyone should be aware of the added health risks and costs). Lower premiums or premium rebates for those actively managing and meeting standards for blood pressure, BMI, cholesterol and blood sugar level. All are key indicators of health. It makes sense to provide a premium discount to the individual going to the gym or utilizing some other method to improve their health. Those that don’t should pay more. After all, they are costing everyone else more. (3) Genetics & DNA – Technology is a great tool. Let’s use it to help predetermine the medical conditions which we’re predisposed. Not to punish people with higher costs, but to be proactive. A lifestyle change at an early age could help prevent certain illnesses. Information can be kept confidential with case managers and not shared or used with underwriting. – i.e. If you knew you had a family history of cancer, breast or colon, you could be proactive and monitor the signs. Same principle for other genetic diseases.

Let’s use all the available resources to lower health care costs and create a proactive system, health insurance as it should be.

What ideas do you have?

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Health Insurance As It Should Be (Part 1 of 2): Taxes and Regulations

Much speculations evolves around what changes the Trump administration will bring to health care. Although I don’t know why. The basics have been laid out by the Republicans for months. There is some fine tuning that needs to be done, but the core is in place. In addition to the principles that have been laid out, here are a few well thought out suggestions.  (For a closer look at what’s been proposed go to my July 13th and 27th blogs, Repealing Obamacare – Individual Tax Credit & The Employer Tax Exclusion.)

What part of the current healthcare reform plan would I keep? Once Obamacare is repealed, it must be repealed, my primary complaint is the ACA was implemented as a regulatory law not a health advocacy tool, I’d reintroduce three things. (1) No one should be denied coverage due to preexisting conditions. However, no one should be allowed to burden the system who carries no insurance, goes to the doctor, learns they need medical care and now applies for insurance. They should be required to apply for insurance, bear a heavy portion of the medical expenses for a year or two (contracted rate), and have the carrier assign a case manager. (2) Keep adult children on the plan until age 26, unless they are employed full-time. Then it’s time to put their big boy & girl pants on and be a responsible adult. (3) The Summary of Benefits & Coverage and Glossary of Health Coverage & Medical Terms make it easier to understand coverages. However changes need to be made.

Whatever happens I hope we’ll see both the introduction of individual tax credits and the continuation of the employer tax exclusion, rightfully so. Both are integral to health care. Why individuals have not been able to deduct health insurance premiums is a mystery. The need to continue the employer tax exclusion is important because the vast majority of Americans receive coverage through their employer. Suddenly thrusting 170 million people into the individual market would be chaotic. Also, the employer resources can be provide health advocacy for the employees (independently contracted, through HR or the broker).

Here are some simple solutions that will make health insurance easier and better.

  • Paying for Preexisting Conditions – Every transaction, buying aspirin, medical procedures, hospital stays – anything medical related – should be charged a ‘PreX’ fee of 1 penny. The money would go towards funding preexisting conditions, nothing else. If it raises more than is needed, then cut it back to either ½ penny or only on certain purchases or procedures. (Need to have the bean counters look at this recommendation.)
  • All medical expenses (premium included) should be pretax. Do I really have to explain why this is good/fair? If health care is as important as everyone says, and it is, let’s make it as inexpensive and accessible as possible to all. Eliminate all the complex tax regulations around health insurance, especially the need to have 7.5% of income before receiving the current deduction. (Note: It’s a deduction not a tax credit.)
  • Everyone should be eligible for HSA accounts and eliminate FSA accounts. Why have the use-it-or-lose-it rule? Makes no sense, except the federal government is overly concerned about the tax revenue. Although medical expenses would be pretax, based on my recommendation above, the HSA account would continue pretax deductions with tax free expenditures for medical care. HSA accounts would incentivize people to finance future medical expenses. What should be the allowable limit for HSA contributions? It’s open for discussion, but a dollar amount equal to the plans out-of-pocket maximum would make sense.
  • Any able body, able mind,  receiving a government subsidy for health care (Medicaid) should be required to do some form of work, be it ever so menial. Health insurance is expensive, everyone can do their part.
  • Major changes to medical liability and malpractice need to be made. I’ll let others suggest specific tort reform recommendations. But we need to get the attorneys to give up their strong hold on the medical market. It’ll help lower costs.

Finally, before you suggest eliminating insurance companies, I hope you’ll think about the import role they play in lowering health care costs. Health insurance companies, just like many items you buy, negotiate rates, buy in bulk, and monitor expenditures. Need proof? Look at your EOB (Explanation of Benefits). Compare the original billed amount to the allowed amount (after discounts).

I’m not saying they are perfect or that changes can’t be made. I’m just saying they play an important role and we need to recognize it. Insurance companies are much better than a bloated government agency with little or no accountability. We tried that with the VA health care and Obamacare. – No thank you!

What ideas do you have?

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Big Increase for 2017 Payroll Taxes while Social Security Benefits, Not So Much

The maximum earnings subject to the Social Security* payroll tax will increase by $8,700 in 2017 to $127,200 —up from $118,500. The Jan 1 adjustment is based on the government’s estimate of real wage growth. The 2017 increase in the taxable-earnings cap is the largest one-year increase since 1983.

Monthly Social Security benefits will increase a mere 0.3 percent in 2017. The Social Security Act ties the annual cost-of-living adjustment (COLA) to increases in the Consumer Price Index, as determined by the DOL’s Bureau of Labor Statistics.

Do you see the irony in these increases? Shouldn’t the adjustments be similar? Also, on one hand the payroll tax hike will increase the costs of goods and services, on the other the people won’t have enough to pay for the increase in goods and services.

*Social Security is financed by a 12.4 percent tax on wages up to the taxable-earnings cap, with half (6.2 percent) paid by workers and the other half paid by employers. The Medicare payroll tax rate is a matching 1.45 percent on all earnings.

 

Employee Benefit Advisors provides employee benefits. We are a broker helping companies with their Health & Welfare Benefits. We also help companies revaluate PEO Services, deciding if a PEO is a good choice and if so selecting and implementing the PEO.

Public Option and Single-Payer: What’s the Difference?

Both of these programs are public health insurance plans, but they are administered very differently and would have drastically different impacts on the healthcare system,

A public health insurance plan, also known as a “public option,” is a government-sponsored plan designed to compete alongside private insurers. It is intended to address the market failure where consumers are faced with only one or two health insurers offering coverage in their area. As a public plan it could have the power to dictate prices, provider networks, and provider reimbursements. It could also potentially indemnify itself for unexpected costs, allowing it to offer insurance at below-market costs.

Single-payer is a health insurance system that is wholly sponsored and administered by a single entity with no direct private market competition. Private insurers would not be able to offer any primary coverage, although in some proposals they would be able to offer supplemental coverage to those who choose to purchase. Providers would be compensated directly by the government, which would also set reimbursement rates, networks, and costs of services. Rationing of services would be among its strongest tool to control costs.

Existing public healthcare plans like Medicare and Medicaid already demonstrate the challenges faced by government-run insurance plans and their ability to provide adequate coverage to their beneficiaries. They may provide less coverage and restrict provider access more than the average employer-sponsored plan, with the Congressional Budget Office estimating that the benefit package for Medicare is 15% below the average employer-sponsored plan. Under Medicaid, specialists are often inaccessible without long waits. Extending this government-run coverage to all Americans would exacerbate these inefficiencies, high costs, and bureaucracy, along with unilaterally restricting consumer choice. Further, the experience of the ACA’s healthcare CO-OP program, where 16 of the 23 non-profit cooperatives failed after their first three years, demonstrates that challenges that would plague a fully government-run insurance plan.

 

Employee Benefit Advisor’s would like to acknowledge the National Association of Health Underwriters for the content of this blog. EBA is a member of NAHU.

Public Option – Call me a cynic

The New York Times reports the Affordable Care Act may have to change to survive. Bill Clinton calls Obamacare the “Craziest thing in the world.” Bloomberg Politics reports Obama says ACS has “real Problems.”

Wasn’t Obamacare supposed to solve out countries insurance woes? Now, before it can be fully implemented – it is being recommended the Public Option is the answer. Why would anyone trust the same people that said we could keep our doctor and it would drive down health care cost – amongst other promises?

The public option would be a government-sponsored and government-run insurance plan, modeled after Medicare which would be offered as an alternative to the private-insurance plans. Democrats are saying it is needed to save Obamacare. What’s wrong with this model? Medicare adds another 3% administrative cost to insurance as it must pass through the insurance carriers and the government. Take away the insurance carriers (as some suggest) and now we have a government monopoly, with no competition, no checks-and-balances. We’ll have far worse than the VA on our hands. And rationing of health care will be a fact.

America will deserve the government it votes for, good or bad.

Call me a cynic.

Useful App: First Aid

Accidents happen.

The app was developed by the British Red Cross for everyday first aid. It provides expert advice for everyday emergencies with videos, interactive quizzes and simple step-by-step advice. Its features include an easy to use Spanish language toggle to switch translation directly inside the app and is fully integrated with 9-1-1 so you can call EMS from the app.

Learn how to treat;

Allergies
Asthma Attack
Bleeding
Broken Bone
Burns
Choking
Concussion/Head Injury
Diabetic Emergency
Distress
Heart Attack
Heat Stroke
Hypothermia
Meningitis
Poisoning / harmful substances
Seizure / Epilepsy
Shock
Stings / Bites
Stroke
Unresponsive breathing
Unresponsive not breathing

Employee Benefit Advisors provides employee benefits. We are a broker helping companies with their Health & Welfare Benefits. We also help companies revaluate PEO Services, deciding if a PEO is a good choice and if so selecting and implementing the PEO.

Direct Primary Care

Revolutionize health insurance, save states billions and render Obamacare obsolete – that’s the message from the 2016 Direct Primary Care Summit.

Under a DPC model, patients pay a monthly membership fee directly to a physician in exchange for preventive care services, consultation by e-mail or phone and in-office procedures and diagnostics. Estimates range from $50 to $125 pending several factors, i.e. services, geography, etc. Contracts are between patients and insurers. Members will need to purchase “wraparound” insurance to cover non-primary medical needs. (EBA believes this will be most effective inside the employer market where buying power and health advocacy can be leveraged.)

It’ll be interesting to see how the government reacts to DPC. The DPC proponents are touting it as an avenue for physician’s being able to afford to opt out as a Medicare provider. Doctors reduce their overhead 20 to 40 percent with reduced paperwork, compliance and staff needs.

(Summit hosts are the American Academy of Family Physicians (AAFP), the Family Medicine Education Consortium, and the American College of Osteopathic Family Physicians.)

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Obamaco$t Coming Home to Roost

The Obama Administration is encouraging young adults to obtain coverage through health insurance marketplaces, which need healthy people to balance sicker ones in the risk pool. Why is this important? Keep reading.

Aetna projects over $300 million loss on ACA business and announced that it will stop selling in 11 of the 15 states where it currently offers individual insurance on the Affordable Care Act exchanges.  – Aetna released its second-quarter earnings report and also announced it will not go forward with previous plans to expand its offerings on state health insurance exchanges.  Aetna CEO Mark T. Bertolini said if the company cannot fix this aspect of its business then it will leave the exchanges.

Humana Plans to Scale Back ACA Business. – Humana is concerned about growing losses in its ACA business and “set aside about $208 million more in the second quarter to cover losses in” its ACA business. Humana said it plans to “scale back” its individual business for 2017, which means it will offer coverage in only 156 counties, compared to 1,351 in 2016, and it will sell healthcare plans through Affordable Care Act exchanges in 11 states, compared to 15 this year.

Obama Administration Sues to Prevent Mergers of Big Insurers – The Obama Administration is attempting to prevent the mergers of four large insurers. The Justice Department sued Anthem, Cigna, Aetna, and Humana to block their mergers, saying that they “would ‘drastically’ curb competition in the insurance industry,” and negatively impact options for consumers who purchase coverage through Affordable Care Act exchanges. (Finally, something on which Employee Benefit Advisors agrees with the Administration.) Aetna and Humana announced a plan to sell some of their assets with the aim of gaining regulatory approval for their proposed merger.

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

ACA in the News

ACA Enrollment Down To About 11.1M – CMS figures show that enrollment under the ACA dropped from 1.6 million people down to 11.1 million. Nearly 85 percent of remaining enrollees, 9.4 million, were receiving tax credits averaging $291 per month to help them pay their premiums.

Battle over ACA Continues In Court and In Congress – Surprise! The Obama Administration and Congress are again at odds over the ACA. The Administration filed an appeal to US Judge Rosemary Collyer’s ruling that it used Treasury funds to subsidize ACA plans without approval from Congress. House Republicans unveiled a report which concluded that the Administration proceeded to use the funds despite knowing that congressional approval was necessary. The “scathing report” concluded the Administration “ignored its own advice and forged ahead with Obamacare payments to insurers without permission from Congress.” In 2012, the Treasury Department concluded Congress would have to approve funding for the ACA’s cost-sharing program, yet “the administration quietly withdrew its budget request for the program drafting a memo that said it didn’t need Congress’ blessing and running it by then-Attorney General Eric H. Holder Jr.”

President Obama Renews Call for Public Option – Healthcare reform has already proven to be a major player in the election debate, President Obama is advocating once again for a “public option.” This, along with proposals to cap the employer exclusion as well as single-payer initiatives in both Colorado and New York.

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Repealing Obamacare (Part 2of 2) – The Employer Tax Exclusion

The National Association of Health Underwriters (of which Employee Benefit Advisors is a member) and other industry groups support the employer-based healthcare system and have been opponents to eliminating or capping the exclusion and supports a platform that would preserve existing tax incentives for insurance, including the exclusion.

Proposals that eliminate the exclusion would push individuals from group coverage into the individual market. While deductions or refundable tax credits would help consumers secure coverage in the individual market, NAHU believes that they would fall far short both financially and in terms of coverage of the current system that allows for tax-free contributions from employers.

An individualized health insurance market would be ripe for adverse selection leading to higher insurer losses participating in these markets. Insurers would offset these losses by reducing provider networks and increasing cost-sharing. Currently, employer-sponsored plans are much more likely to have a mix of health risks and, in this case, the volume of individuals allows the costs associated with higher risks to be spread over that mixed population of high and low risks. Eliminating the exclusion and pushing consumers to the individual market would reduce the means for spreading risk among healthy and unhealthy individuals. The healthiest would be more likely to opt-out of coverage, leaving the most unhealthy covered. Employers still offering health insurance could be faced with difficulty meeting participation requirements and ever-increasing rates in a potential death-spiral as only the sickest remain insured.

Financially, employees receiving employer contributions already receive generous “subsidies” for their health coverage. Group premium rates tend to be more favorable than individual markets given the ability to control for adverse selection, and employers and employees alike benefit by reducing the taxable income for contributions made to insurance premiums. When employees’ taxable income increases due to the new taxable status of employer contributions, the employer’s FICA match would also increase. For every new dollar of taxable income due to newly taxable employer contributions or employee contributions previously made on a pre-tax basis under Section 125, employers would be responsible for 7.65% in new costs until the employee reached the Social Security wage base.

Ultimately, eliminating the exclusion would in turn result in a massive tax increase on middle class Americans that would not come close to being offset by any deduction, particularly for lower-paid workers who don’t have a deduction for income tax. Rather, a deduction for this type of worker would likely cause them to forego coverage altogether since it would offer no immediate relief towards the cost of coverage.

Finally, moving from a group insurance marketplace to an individualized marketplace would cause considerable strain on the enrollment process. Group plans are highly efficient at seamlessly enrolling millions into coverage, and without these group plans agents and brokers would be faced with enrolling upwards of 170 million Americans individually into plans. The ACA has demonstrated the challenges of enrolling as few as 13 million consumers onto the federal and state marketplaces. Increasing this number by more than ten-fold would not be any less chaotic.

The bottom line is that the employer-based system has proven highly efficient at providing Americans with affordable coverage options for decades. Eliminating the tax exclusion would likely result in the demise of the employer-based system, a significant tax increase on middle-class families, significantly increased costs for coverage, and more restrictive plan offerings. Healthcare reform has proven its challenges; however it is important that any policy proposals not make difficult situations worse and eliminating or even capping the exclusion would be far worse for all Americans.

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