Tuesday, April 30, 2013

Obamacare Turns Three, Remains Unpopular

This entry is from an article written by:

Roger Stark, MD, FACS
Health Care Policy Analyst

President Obama signed the federal health care bill, The Affordable Care Act (ACA), into law three years ago. Let’s look at what has happened over the past three years.
The law remains extremely unpopular with Americans. Since passage, polls have consistently shown at least 50 percent of voters disapprove of the law. A recent Kaiser Family Foundation poll revealed that only 41 percent of respondents actually understood the law while 57 percent did not.

The estimated cost of the law has gone up dramatically. Originally the nonpartisan Congressional Budget Office (CBO) estimated Obamacare would cost $940 billion over its first 10 years. This was based on a deception written into the law of 10 years of revenue starting in 2010 but only six years of benefits starting in 2014.

The CBO now estimates the cost to be $2 trillion over the 10 years starting in 2012. Revenue comes from a $716 billion cut to Medicare providers and over $1 trillion in new or expanded taxes. None of the significant Medicare cuts have taken place as scheduled, so the cost overrun of Obamacare has already started. Health insurance companies are warning of 30 to 116 percent increases in premiums and the government’s own CBO estimates at least 10 to 13 percent increases in rates.

Even President Obama sees the failure of parts of the law. He has signed the repeal of the long-term care provision, or CLASS entitlement. He also signed the repeal of the $1.7 billion Small Business Tax Reporting Requirement, which would have forced businesses to report every vendor transaction over $600 to the IRS.

>> Click here to read Roger Stark's entire column online

Wednesday, April 24, 2013

Health Insurance Exchange Lingo: Terms you should know

This won't hurt...much.

Here are just a few of the terms you’ll be hearing a lot about in the coming months as the exchange market gets up and rolling.

Public exchange
A government-regulated online marketplace that can be run by the federal or state government. It will be the only place where individuals, families, and small groups may purchase health insurance that’s eligible for new federal subsidies—tax credits and cost-sharing assistance—as of Jan. 1, 2014. (Small groups are only eligible for tax credits.) In Washington state, the Public exchange is called the Washington Healthplanfinder.

Washington Healthplanfinder
The online marketplace for individuals, families, and small businesses (1–50 employees) that provides side-by-side plan comparisons based on factors such as cost and quality. For individuals, it will include a calculator to help consumers
determine if they qualify for financial assistance (subsidy) to help pay for their coverage, and allows them to purchase coverage online. It becomes operational on Oct. 1, 2013 for enrollment in plans becoming effective Jan. 1, 2014.

This is an acronym for the Small Business Health Options Program, the part of the exchange specifically for small employers and the self-employed. It begins in 2014, and Group Health plans to participate in 2015.

10 essential benefits
The minimum health benefits all Individual & Family and small businessplans must provide in Washington state: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative services and devices, lab services, preventive and wellness services and chronic disease management, and pediatric services—including dental and vision care. Plan designs should be published sometime in the summer of 2013.

Metal tiers
Plan options will be broken down into tiers based on the level of coverage they provide. Each tier corresponds to an actuarial value. The actuarial values are bronze (60 percent), silver (70 percent), gold (80 percent), and platinum (90 percent). As you can imagine, platinum plans will cost more than the other "metals." Rates may not be published until summer of 2013 but you should be prepared for Sticker Shock.

Sunday, April 21, 2013

April is Cherry Blossom time in our nation's capitol

April 8-9, 2013 was my fourth trip to Washington, D.C. in 18 months. These were not sightseeing vacations but business trips. When insurance is your profession, politics is your business. On this sojourn to the nation's capitol I was with nearly 1,000 other members of the National Association of Insurance and Financial Advisors, NAIFA. Our group was "on the hill" April 9th and included advisors from every State. We covered 85% of the offices for Senators and Congressmen.

Some Senate and House members were in their offices but we met mostly with their tax counsels, chief of staff and legislative aids. Our message was to make sure they know and understand the role of insurance agents to their constituents.

  • 75 million American families depend on insurance for their family security.
  • 20% of all long-term savings are held in life insurance policies
  • The insurance industry pays out $1.5 Billion per day in benefits
  • 18% of all bonds are purchased by the insurance industry
  • Life insurance, annuities and long-term care policies reduce dependency and promote self-reliance, thrift and individual responsibility
President Wilson in 1913, the year Congress enacted the income tax, made sure than Americans would have incentives in life insurance products so they would put away money to provide for their future. Those incentives remain in place today.

Although there are no bills pending that would change those incentives legislators are looking everywhere for "revenue" to feed their spending habits. And it's early in the session with many months of wrangling ahead of us.

None of the legislators or staffers indicated they would seek to change the incentives found in the current tax law. In fact, each office assured us they would reject any plan to alter the current tax treatment of life insurance.

However, our work is not done and we dare not rest. We will be back to advocate for our clients, our families and our industry.