Monthly Archives

July 2015

Blue Cross Plans To Be Discontinued

By | Health Insurance, Health Reform

 “Affordable Care Act” Backlash

By Murdoch Pizgatti in Health, News, TX

Blue Cross Blue Shield of Texas Deems Certain Plans “Unsustainable” Due to Losses Caused by Affordable Care Act

DontComply has discovered an internal email from Blue Cross and Blue Shield of Texas that was sent out to insurance agents on 07/23/2015. If you have a Blue Cross and Blue Shield plan in the state of Texas, this information affects you more than others. There is a big change coming down the pipeline from Blue Cross corporate for 2016 plans and you might already know which law is at fault. I’ll get to that after we go over the changes.

Blue Cross News Terminating Plans

Blue Cross Blue Shield of Texas is going to be discontinuing PPO health insurance plans for the 2016 plan year. At the time of writing, there are 367,000 members on the Blue Cross PPO plans who will have their plan discontinued in 2016. For those not aware, most insurance companies have typically offered PPO or HMO plan choices for a long time now… at least as far back as I can remember. HMO plans or “Health Maintenance Organization” Plans require that you choose one primary doctor. If you want to go anywhere else, you must first obtain a referral from the your PCP (Primary Care Physician). With a PPO plan, you can go to any doctor at any time that accepts the PPO network. PPO is the better option for most although it does come with a higher price-tag. If you have been on a PPO style plan and are forced to downgrade to something like an HMO, you will not be happy I can assure you.

What reason does Blue Cross cite for their discontinuation of all these PPO plan options in Texas

CLAIMS!

What is a claim? Every time you go to the doctor, a claim is filed. Blue Cross Blue Shield has paid out over $400 Million in claims overwhat they took in as premiums. That was only in 2014. Blue Cross mentions that these losses are “unsustainable” and of course they are right. If I was losing $400 Million in one year I would look at it in a similar way.

PPO BCBSTX plans gone

They have discovered that the PPO Plan strategy is unsustainable at an affordable price due to Anti-Selection. Anti-Selection is defined as:

“The tendency of those in dangerous jobs or high risk lifestyles to get life insurance.”

In the past this phrase would have meant much less due to underwriting. In the underwriting process, insurers had the choice to deny applicants based on health history. Now due to the “Affordable” Care Act, insurers have no choice but to accept every single applicant. Those who can’t afford the insurance are subsidized by the government (given money that is free to them to purchase insurance with). This sounds like a wonderful idea if you do not value free-markets or any kind of logical world where competition is allowed and encouraged.

The “Affordable” Care Act is an attack on the current insurance industry and free trade. The majority of Blue Cross Blue Shield branches are considered non-profit but even they can’t keep a plan that looses $400 Million in one year. The multitude of promises from the leader of this nation, saying that you could “keep your doctor” and “keep your plan”, were exposed as lies from the start of this catastrophe. We are seeing even more ill effects from this “Care” Act as it was called so deceptively. It was understood that Americans would not jump at the prospect of socialized health care, so the plan appears to be more in line with the Trojan Horse. Attack and cause collapse/chaos from the inside.

At every turn the government aligned with this ridiculous law are cornering the healthcare market until you have no choice but to choose the “better and improved” public plan option. They have already proved their reach with these unconstitutional tax penalties for the uninsured. Even further is the way that although Blue Cross is being forced to drop their PPO plans due to losses, they can’t promise that a new and similar plan will even fill it’s place. Why? They are waiting on approval from guess who? The government:

“We intend to offer other products, on and off the Marketplace. A new product has been filed that we believe will give you a flexible choice for your clients. We will be able to share information about that product if and when it is approved by the Centers for Medicare & Medicaid Services (CMS) closer to open enrollment.”

This law is a train-wreck and I suspect that this is only one of many issues we will see continue to arise. If you are on a PPO Plan from Blue Cross and Blue Shield, keep a close eye on this come October. October starts the yearly Open Enrollment period when the government ALLOWS you to switch plans. If you are not within the income levels that make you eligible for a subsidy, remember that you do NOT need to use the .gov website. You can apply directly through an insurer. Don’t give more information to their weakly secured site than is needed.

ObamaCare: Here’s Why Millions Are Expected To Reject Mandated Insurance, Pay Fines

By | Health Insurance, Health Reform

ObamaCare, despite its second court victory, seems to continue to be seen as a boondoggle to some American health insurance purchasers. The Inquisitr reported in June that ObamaCare premiums were going to spike in 2016, even more than they had already in January 2015.

With that in mind, it should probably come as no surprise that according to MarketWatch, millions of Americans are avoiding ObamaCare like the plague. More specifically, 7.5 million Americans  decided not to enroll in ObamaCare (those citizens combined had to pay $1.5 billion in ObamaCare fines). The penalty for refusing the government-mandated insurance means those who refused have been paying an average of $200 per person. For a healthy family that chooses NOT to participate in Obamacare and, instead, purchases short term medical coverage, this penalty plus the much lower cost of market-rate coverage STILL results signObama and his staffificant healthcare costs savings over comparable coverage under Obamacare.

The 7.5 million Americans who rejected ObamaCare, and had to pay the fine, were 1.5 million more than the Obama Administration had already estimated would refuse. The IRS, in a public statement, gave a broader range of the cost of the ObamaCare fines those several million people paid.

“About 40% of these payments were $100 or less and about 95% of these payments were $500 or less.”
There were also ObamaCare tax subsidies that were given out to some Americans based on income, who were not among the 7.5 million who rejected the mandated insurance and paid their fine. Newsweek reports that 2.7 million taxpayers claimed $9 billion in ObamaCare subsidies, which amounted to an average of $3,400 per person.
According to the data, 40 percent claimed less than $2,000 through the ObamaCare subsidies, another 40 percent claimed somewhere between $2,000 to $5,000, and the remaining 20 received $5,000 or more.
There were 12 million Americans who were exempt from a fine or a purchase on the ObamaCare exchanges — they included low-income individual and American Indians.

The number of Americans who need to pay an ObamaCare-mandated fine is projected to possibly go up. The IRS estimates that 5.1 million Americans have neither signed up for ObamaCare, claimed any type of exemption, nor paid the mandated fine.

Marketwatch says it is believed that many of the 5.1 million that have yet to pay, sign up, or claim exemption to ObamaCare will find their way to one of the above options because the individual mandate’s fine is set to keep going up over time.

ObamaCare has poll vaulted over two Supreme Court challenges, despite the constant issues that crop up under the radar and increase healthcare costs. The once fledgling law seems to be here for the foreseeable future.

Obamacare’s tax audits are few and far between

By | Health Insurance, Health Reform
Author: @_DanMangan, CNBC.com

Tax season is a pain in the neck for millions of people, but many Americans this year may be getting a pass from unpleasant questions—or even an audit—from the Internal Revenue Service about their compliance with Obamacare.

A leading tax audit defense company said its clients so far are seeing a surprisingly low rate of queries tied to the Affordable Care Act this year—the first in which Americans were asked to disclose their health insurance status.

TaxAudit.com also said the IRS has been asking the company’s clients about just one of the several types of ACA-related issues that could trip filers up. Only people who received tax credits to buy Obamacare plans, but did not file one or two forms in conjunction with those subsidies are receiving IRS queries, the company said.

The agency thus appears to be forgoing, at least for now, recovering potential penalties or other payments from those TaxAudit.com customers for the other issues.

So far, none of the company’s customers are being challenged about their claims to have had health insurance last year, about their exemption from Obamacare’s mandate to have such insurance, or about the amount of money they received to help pay for their coverage.

“It’s dialing for dollars,” TaxAudit.com’s vice president of customer advocacy, Dave Du Val, said of the grace period that most people seem be getting from the IRS about Obamacare compliance.

“You can’t lose,” said Du Val, whose company assists clients with questions and audits from the IRS. The company’s services are available as part of Intuit‘s TurboTax tax preparation software.

Read MoreBig changes proposed for Medicare surgery payments

Du Val said he expects the agency has, to a certain extent, thrown up its hands, and is not aggressively enforcing compliance with Obamacare, at least for this year.

“I don’t think they have the manpower now, I don’t think they believe they have the manpower either,” Du Val said.

Asked if he believed his client’s customers were the only ones subject to an effective grace period this year from the IRS on most ACA-compliance issues, Du Val said, “No, not at all.”

An IRS spokesman had no immediate comment when CNBC asked about TaxAudit.com’s claims, but noted it takes time for the agency to process data from a filing season that includes about 150 million returns.

Last year was the first in which most Americans were required by the ACA to have some form of health coverage or be subject to a tax penalty equal to the higher of $95, or 1 percent of adjusted gross household income.

The collection of penalties and disclosure of insurance status only began earlier this year with the 2014 tax filing season. Most people were able to claim, truthfully, that they had insurance, and weren’t required to file anything else.

But a fraction of people claimed an exemption for Obamacare’s individual mandate, and were required to state the basis for that exemption, which can include having very low income, having filed for bankruptcy, being the victim of domestic violence or having a close family member die.

“The exemptions are so many, and so varied,” Du Val said.

Changes Coming to Out-of-Pocket Maximums in Family Plans

By | Health Insurance, Health Reform

Couple Managing Health Insurance CostsA federally mandated health plan change coming in 2016 could save some families hundreds or even thousands in out-of-pocket medical costs. However, the change in how out-of-pocket maximums are set was only clarified by the government in the first half of 2015. That late-breaking guidance has insurers and some employers scrambling to make changes in time. And, of course, the change in coverage could affect how much families pay for their plans next year.

First, a quick explanation of out-of-pocket maximums.

Almost all health plans today offer members the protection of an out-of-pocket maximum. That’s the most an individual member or a family will have to pay out of their pocket in a year in deductibles and coinsurance or copays. Specifically, the maximum applies to care you get in the health plan’s network for what’s considered Essential Health Benefits. After that maximum is hit, the health plan pays the allowed amount for all covered services.

The government sets a limit on how much these maximums can be. Family health plans can have a single out-of-pocket maximum for the family. Family maximums can be twice as high as the maximum amount in a plan covering just one person (a “self-only plan”). For 2016, the self-only maximum can be up to $6,850 and the family maximum, up to $13,700. For high-deductible plans that are compatible with Health Savings Accounts they are lower, up to $6,550 and $13,100.)

Up until now, plans could count all family members’ bills until the family maximum was reached. Then they would start covering everyone’s in-network care in full.

Next year, that changes. Here’s how.

In 2016, no matter whether a plan covers just you (self-only) or you and a spouse or you and your kids, or your spouse AND kids, there is a limit on how much one person can be required to spend. Plans can’t require any one person to pay more than the maximum amount for self-only coverage.

So in a family health plan, if one family member’s covered bills hit the self-only limit, the plan must cover that person’s allowed bills in full for the rest of the year. The other family members will continue to pay deductibles and coinsurance or copays until one of them also reaches the self-only maximum, or the family maximum is reached.

Some plans are already set up this way. Others will have to change. The change affects plans that cover an individual and a spouse and/or dependents.

For next year, family plans can be set up one of two ways:

  • With a family maximum that is no more than the maximum for self-only coverage
  • With a higher family maximum but with an individual maximum “embedded” in the plan too. Once one person’s allowed bills reach the self-only maximum, his or her bills are covered in full for the rest of the year. Other family members will continue to pay their share of their bills until one of them also reaches the self-only maximum, or the family maximum is reached.

For a family where one person has the majority of the medical bills, this change could represent thousands of dollars in out-of-pocket savings in 2016. However, this enhanced coverage could come at a price. Insurers have to calculate how much more this enhanced coverage will cost, and set prices accordingly.

The Unaffordable Care Act Premiums are spiking around the country.

By | Health Insurance, Health Reform

Obama is in denial. The Affordable Care Act was supposed to make insurance, well, more affordable. But now hard results are starting to emerge: premium surges that often average 10% to 20% and spikes that sometimes run as high as 50% or 60% or more from coast to coast. Welcome to the new abnormal of ObamaCare.

This summer insurers must submit rates to state regulators for approval on the ObamaCare exchanges in 2016—and even liberals are shocked at the double-digit requests, or at least the honest liberals are. Under ObamaCare, year-over-year premium increases above 10% must also be justified to the Health and Human Services Department, and its data base lists about 650 such cases so far.

 In a study across 45 states, the research outfit Health Pocket reports that mid-level Exclusive Provider Organization plans are 20% more expensive in 2016 on average. HMOs are 19% more expensive, and for all plan types the average is 14%.

***

President Obama dropped by Nashville last week to claim Tennessee as a state where “the law has worked better than we expected” and “actually ended up costing less than people expected,” so let’s test the reality of those claims. As a baseline, in 2015 premium increases for Tennessee plans ranged from 7.5% to 19.1%.

For 2016 BlueCross BlueShield of Tennessee—one of the state’s two major insurers—is requesting a 36.3% increase. One product line from Community Health Alliance Mutual is rising 32.8%, while another from Time Insurance Co. hits 46.9%. Offerings from Cigna,Humana and UnitedHealthcare range from 11% to 18%. If this means ObamaCare is working better than the President expected, then what, exactly, was he expecting?

Underlying health costs continue to rise, but this trend is merely about 3.5% to 7% depending on the state.Health plan profits are capped by ObamaCare price controls, so don’t blame corporate greed either. In a rational market, premiums wouldn’t be soaring in a single year by 49.1%-65% (Blue Cross Blue Shield of New Mexico) or 40.6%-58.4% (Geisinger Health Plans of Pennsylvania).

The detailed, fact-heavy actuarial filings justifying these increases show that they result from ObamaCare’s political regulations. The law bans insurers from charging people prices linked to their health risks in order to force the young and healthy to cross-subsidize their elders. But if premiums don’t cover medical claims, then premiums must rise to fund these cost transfers.

After the first two years of ObamaCare in 2014 and 2015, insurers have more experience with the demographics and expenses of the new enrollees. They seem to be older and have more chronic conditions like diabetes or congestive heart failure than predicted. There are also fewer than expected.

Among those eligible for the ObamaCare exchanges—meaning they lack coverage through a job, spouse or another government program—only about a third have signed up, according to HHS. The number of truants—despite the individual mandate penalty-tax—increases with income and as ObamaCare’s subsidies phase out.

The subsidies are most generous between 100% and 150% above the poverty line, where an ObamaCare policy is essentially free. Some 76% of eligible individuals at that level are enrolled, report the consultants at Avalere Health. But enrollment drops to 41% between 151% and 200% of poverty, and then to 30% at 201%-250%. At 251%-300%, the share is 20%, and 16% for 301%-400%.

In other words, the more lower- and middle-income people must pay for ObamaCare with their own money, the less likely they are to participate. They are concluding that ObamaCare plans—with their overly rich mandated benefits, narrow physician networks, and hidden income redistribution—do not offer a good value for the price. This is not a formula for healthy insurance markets.

These rate hikes aren’t final, and some may be rejected by state insurance commissioners. In Tennessee, Mr. Obama encouraged regulators to exert such political control. But a business can’t continue to pay more than $1 for every $1 of revenue forever, and ongoing insurance volatility and rising health industry consolidation may ensure that the 2016 premium blast is not a one-time event.

This is a no-excuses moment for liberals. In 2014-15 they tried to deny rate shock by claiming pre-ObamaCare plans couldn’t be compared to compliant ones, but these are the apples of 2015 compared to the apples of 2016.

***

This is also a political opening for Republican presidential contenders beyond the “repeal ObamaCare” slogan. Even with subsidies, beneficiaries are bound to notice these price increases. Incomes aren’t rising at 10%, much less 40%. Maybe the entitlement isn’t as entrenched as Washington wisdom suggests.

More to the point, U.S. health care is becoming a government-directed network of oligopolies dominated by huge, politically protected incumbents. The insurers would much rather pass on premium increases to consumers who have no other options than challenge the regulations that caused the increases.

An alternative GOP agenda that promises more patient choice and control, and more competition and innovation, might well gain popular support—even among the voters ObamaCare was supposed to help.