Thursday, May 30, 2013

Physician shortages and Medicare: A one-two punch for you!

With the largest segment of our population knocking on Medicare’s door, the timing of this simply could not be worse. We expect to see an ever-increasing demand for physician services and a growing number of doctors who are no longer willing to see Medicare patients.

Recently, we have been hearing more and more about physicians retiring, shrinking their practices and even refusing to accept certain insurance coverage, including Medicare. If what we have been hearing is true, then we may be in for a wild ride. Even before the Affordable Care Act was passed, the health care industry was dealing with a larger issue that has been neglected by the media for some time: physician shortages.

According to the latest studies from the American Association of Medical Colleges (AAMC)1, the United States is going to face a shortage of more than 150,000 doctors over the next 15 years. At the same time, we are witnessing the largest segment of the U.S. population (the baby boomers) beginning their retirement. This is typically the phase where clients will be utilizing health care more frequently.

What is truly amazing is how this shortage came about. Back in 1994, the AAMC predicted2 that the United States would have a surplus of 165,000 doctors by the year 2000. As a result of their prediction, concerns regarding the physician surplus were so great that many medical colleges instituted enrollment freezes. From 1980 until 2005, enrollment in medical schools remained virtually unchanged, even though the country’s population increased by nearly a third. At the same time, the baby boomers were creeping closer and closer to retirement.

The shortage concern becomes even more of a factor once the realization hits home that out of the roughly 650,000 physicians currently practicing, nearly 40 percent of them are age 55 and older.3 This would not be so bad if it weren’t for the fact that it takes roughly 10 years to train a new physician4, and the number of new replacements is only equal to the number of doctors retiring. 

 Not only is there a real possibility for a shortage in the next 10 years, but there aren’t enough physicians being trained to maintain the demand, even at today’s standards. These current training figures for new physicians have caused other studies to raise their estimates of this shortfall to 200,000 doctors by 2020. Unless action is taken soon, the outlook could be 50 percent worse than originally anticipated5.

Here is the knockout punch for those baby boomers who are heading to retirement: Due to these shortfalls, physicians are starting to turn away patients who rely heavily on Medicare.

The root of this problem lies in the reimbursement rates that Medicare provides to the physician; on average, Medicare reimburses roughly 53 percent of these costs, and even less under Medicaid6. Physicians can make up for these differences by either shifting costs to those patients with insurance (meaning those of us with insurance pay more), or by treating patients at a loss. With the passage of the Affordable Care Act, your physician’s options are only becoming more limited.

Out of the total $700 billion that is being reallocated from Medicare to fund other programs, $260 billion of it is expected to come from “providers.” These providers are comprised of not only hospitals, but more importantly, actively practicing physicians7.

As a result, more and more physicians are choosing to opt out of treating Medicare patients altogether. Roughly 13 percent of physicians will not accept Medicare patients today, while another 17 percent limit the number of Medicare patients they will see. This figure rises to 31 percent among primary care physicians. The statistics are even worse in relation to Medicaid, where as many as a third of doctors will not participate in the program8.

With the largest segment of our population knocking on Medicare’s door, the timing of this simply could not be worse. We expect to see an ever-increasing demand for physician services and a growing number of doctors who are no longer willing to see Medicare patients. This could be a source of severe financial hardship for baby boomers that will depend on Medicare as their primary source of funding for health insurance in retirement.









Friday, May 24, 2013

Ambulance rides and helicopter flights

We are just a few months away from the implementation of the Affordable Care Act and while it may not apply to you if you are on Social Security, it has an indirect impact on all of us. Health insurance will change dramatically with the new act as almost every insurance carrier has said that there will be an increase in health care costs across the board.

Obviously, the positive aspect of the new act is that people who were not able to afford health insurance in the past, or who were not eligible because of pre-existing conditions, will now be able to buy health insurance and be covered immediately. I’ve read the act; it appears that ambulance coverage, ground and air, is limited particularly because of the likely high deductibles, and it is quite possible you may have to pay for your ambulance coverage out of pocket…unless you have MASA coverage!

Medical Air Services Association’s member benefits will not change, which means if you need ambulance services we will still provide them free of charge to you. Also, if your health insurance has a high deductible, say $10,000, the services we provide to you free of charge will also be applied as a credit to your deductible. If you need a helicopter flight that costs $25,000 we pay for all of it and you will have met your deductible for the year. That is quite a bonus for you and it certainly enhances the value of your membership with MASA.

MASA has been around for 40 years using the motto: MASA provides you and your family with “peace of mind.” Now a MASA membership provides more peace than ever. Please tell your friends about this so they can avoid the potential financial catastrophe a single flight can cause. Be safe and healthy and have a great summer!

Yes, I sell the MASA plans and I own one!

Sunday, May 19, 2013

Seven parts of the ACA that have been repealed or defunded

Here’s a look at how seven bills* signed by President Obama helped dismantle provisions of his health care law to protect our economy and save taxpayers tens of billions of dollars:
  • H.R. 4: Repealed the small business paperwork (“1099”) mandate: The paperwork mandate was called “one of Washington’s dumbest ideas” – it would have destroyed jobs and “hit start-ups hardest, not to mention farms, charities and churches.” House Republicans kept their Pledge to America and repealed it. H.R. 4 also reduced exchange subsidy overpayments by $25 billion.
  • H.R. 1473: Cut $2.2 billion from a “stealth public plan” and froze the IRS budget: H.R. 1473 undermined ObamaCare by cutting $2.2 billion from the “Consumer Operated and Oriented Plan” (CO-OP) program – a “stealth public plan.” It saved $400 million by eliminating “Free Choice Vouchers,” which The Hill warned “could lead young, healthy workers to opt out” of their employer plans, “driving up costs for everybody else.” And it ensured the IRS wouldn’t receive additional funding for new agents to enforce the president’s health care law.
  • H.R. 674: Saved taxpayers $13 billion by adjusting eligibility for ObamaCare programs: This bill not only repealed a devastating IRS withholding tax – it saved taxpayers $13 billion by changing how the eligibility for certain programs is calculated under ObamaCare. Without the change, a couple earning as much as much as $64,000 could still qualify for Medicaid.
  • H.R. 2055: Made more cuts to CO-OPs, IPAB, IRS: This bill shaved another $400 million off the CO-OPs; cut another $305 million from the IRS to hamper its ability to enforce the law’s tax hikes and mandates; and rescinded $10 million from the Independent Payment Advisory Board (IPAB) of bureaucrats, to which Republican leaders are declining to recommend appointments.
  • H.R. 3630: Slashed billions from ObamaCare slush funds: Republicans fought for another $11.6 billion in savings, saving taxpayers $5 billion from the Prevention & Public Health slush fund, $2.5 billion from ObamaCare’s “Louisiana Purchase,” and more.
  • H.R. 4348: Saved another $670 million from the “Louisiana Purchase”: This saved another $670 million by further adjusting a drafting error that made the “Louisiana Purchase” even costlier.
  • H.R. 8: Repealed the unsustainable CLASS program: H.R. 8 saved $6.5 billion by repealing the Community Living Assistance Services and Supports (CLASS) program, an unsustainable entitlement program whose phony “savings” were used by Democrats to mask the true cost of ObamaCare. The former Democratic chairman of the Senate Budget Committee called CLASS “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of.” The bill also rescinded all unobligated CO-OP funds – another $2.3 billion savings for taxpayers.
Source: Speaker of  the House John Boehner - May 14, 2013

Thursday, May 16, 2013

Small Business health insurance exchange may be delayed in Washington State

Washington state SHOP exchange attracts one carrier

 The board of the Washington Health Benefit Exchange is thinking about pushing the start date for the state's Small Business Health Options Program (SHOP) exchange to Oct. 1, 2014.

The board of the state's SHOP exchange, or small business exchange, is considering that option because only one carrier, Kaiser Permanente Northwest, has made a firm commitment to participating in the SHOP exchange, and that carrier has only a limited geographic network, exchange officials said in a report posted on the program's website.

The other option would be to open the SHOP exchange Oct. 1, 2013, with Kaiser acting as the only coverage provider, officials said. That option would serve small businesses in only 5 counties near the Oregon/Washington border near Portland.
The discussion in Washington state does not appear to involve the state's individual health insurance exchange.

A number of carriers will be selling non-exchange small-group plans in 2014, officials said.

One question is that it's not sure how small employers would use the PPACA tax credits they are supposed to get through the SHOP exchange system in 2014 if a state does not have a working SHOP exchange in 2014, officials said.

The Internal Revenue Service still has to rule on whether small groups can get the tax credit outside the exchange system, officials said.

The exchange board staff has supported the idea of opening the SHOP exchange Oct. 1 with Kaiser as the only carrier.
_________________  end of article _________________

In MY opinion the SHOP exchange is a mine field for any company. One of the laws in the ACA mandates that if an insurance company enters the small business market and fails, the other insurance companies in the small business market must "chip in" to rescue the failed company. How's that for an incentive to jump into the ring? Would you?

Sunday, May 12, 2013

Life Is Full Of Holes

Every scrutinized historical event fails to hold up to serious inspection.

There's missing evidence. How did he get from point A to point B? Where's the document or the eyewitness or the proof?

Your future opportunities are like this as well. Even at the hottest part of the 1998 Internet run up, skeptics wanted more proof that the internet wasn't merely a waste of time. They wanted all the dots connected, and were happy to keep collecting dots until they were.

For a train to get from one city to another, it makes countless tiny leaps, crossing microscopic chasms that would easily show up if you looked closely enough. That doesn't keep you from getting there, though.

I don't think the right question is, "is the path perfect?"

It's probably, "Is this somewhere I'd like to go?"

It's significantly easier to cross a gap when you have direction and momentum.

-- Seth Godin

Wednesday, May 8, 2013

What will health insurance cost in 2014?

The Affordable Care Act introduces new requirements that will increase the cost of healthcare coverage, with many customers likely to see a higher cost for coverage in 2014. Key factors driving up those costs, before considering the impact of federal subsidies, include:

More expensive benefits: the ACA requires health plans to sell coverage with more expensive benefits than most customers choose to purchase today.

Higher medical costs for new customers: an independent analysis shows new customers in the Exchange, including current enrollees in state high risk pools, have more medical needs – and higher claims costs – than today’s customers in the individual market.

Rating rules: new rules reduce the amount by which health plans can vary rates based on age. From 2014 onwards, older customers will not pay more than 3x the rate that is charged to younger customers. Today, that difference is 3.75. Current older customers with comprehensive benefits may see a rate decrease. Current younger customers with high deductible plans are likely to see large rate increases.

New taxes and fees: the ACA adds new taxes and fees that will increase costs.

Federal Subsidies
Some customers will be eligible for a federal subsidy to buy Individual coverage, and they may see a net out-of-pocket decrease in what they pay in monthly rates. Some will also be eligible for cost share reductions, reducing their deductible, coinsurance and copays.

Who will be eligible for subsidies? Individuals and families with income up to 400% of the federal poverty level. In Washington, an individual with an income up to $46,000 may be eligible; a family of four with an annual income up to $94,000 may be eligible.

We continue to be concerned about affordability for our customers. It’s important for our clients to determine if they will be eligible for a subsidy. Until actual rates are approved and published you may want to visit the National Calculator site at

Return to this blog to see updates on this topic. You can always reach me by email at or by text 425.478.2000

Sunday, May 5, 2013

What Health Insurance Doesn't Do

This NY Times writer points to a RAND Corporation study that may surprise you.

In one of the most famous studies of health insurance, conducted across the 1970s, thousands of participants were divided into five groups, with each receiving a different amount of insurance coverage. The study, run by the RAND Corporation, tracked the medical care each group sought out, and not surprisingly found that people with more comprehensive coverage tended to make use of it, visiting the doctor and checking into the hospital more often than people with less generous insurance.
Ross Douthat / New York Times
But the study also tracked the health outcomes of each group, and there the results were more surprising: With a few modest exceptions, the level of insurance had no significant effect on the participants’ actual wellness.
Needless to say, experts have been arguing about what the RAND results mean ever since. But the basic finding — that more expensive health insurance doesn’t necessarily lead to better health — just received a major boost. The state of Oregon expanded its Medicaid program via lottery a few years ago, and researchers released the latest data on how health outcomes for the new Medicaid users differed from those for the uninsured. The answer: They didn’t differ much. Being on Medicaid helped people avoid huge medical bills, and it reduced depression rates. But the program’s insurance guarantee seemed to have little or no impact on common medical conditions like hypertension and diabetes.

As liberals have been extremely quick to point out, these findings do not necessarily make a case against the new health care law, which includes a big Medicaid expansion as well as subsidies for private insurance. After all, the first purpose of insurance is economic protection, and the Oregon data shows that expanding coverage does indeed protect people from ruinous medical expenses. The links between insurance, medicine and health may be impressively mysterious, but staving off medical bankruptcies among low-income Americans is not a small policy achievement.
This is true. But it’s also true that the health care law was sold, in part, with the promise (made by judicious wonks as well as overreaching politicians) that it would save tens of thousands of American lives each year. There was so much moral fervor on the issue, so much crusading liberal zeal, precisely because this was not supposed to be just a big redistribution program: it was supposed to be a matter of life and death.
But if it turns out that health insurance is useful mostly because it averts financial catastrophe — which seems to be the consensus liberal position since the Oregon data came out — then the new health care law looks vulnerable to two interconnected critiques.
First, if the benefit of health insurance is mostly or exclusively financial, then shouldn’t health insurance policies work more like normal insurance? Fire, flood and car insurance exist to protect people against actual disasters, after all, not to pay for ordinary repairs. If the best evidence suggests that health insurance is most helpful in protecting people’s pocketbooks from similar disasters, and that more comprehensive coverage often just pays for doctor visits that don’t improve people’s actual health, then shouldn’t we be promoting catastrophic health coverage, rather than expanding Medicaid?
Liberals don’t like catastrophic plans because, by definition, they’re stingier than the coverage many Americans now enjoy. But this is where the second critique comes in: If the marginal dollar of health care coverage doesn’t deliver better health, isn’t this a place where policy makers should be stingy, while looking for more direct ways to improve the prospects of the working poor? Some kind of expanded health security is clearly a good thing — but if we want to promote economic mobility as well, does it really make sense to pour about a trillion dollars into a health care system that everyone agrees is deeply dysfunctional, when some of that money could be returned to Americans’ paychecks instead?
There are a variety of ways this could be accomplished — a bigger child tax credit for struggling families, a payroll tax cut to boost workers, an expanded earned-income tax credit to raise wages at the bottom, health savings accounts that roll over money left unspent. In each case, the goal would be to help people rise by giving them more money and more options for what to do with it, rather than just expanding 1960s-vintage programs that pay medical bills and only medical bills.
It’s to the Republican Party’s great discredit that these policies and goals don’t have enough conservative champions at the moment. But it’s to liberals’ discredit that they remain wedded to the dream of a health care bureaucracy that pays and pays and pays, when in all likelihood we could be spending much less with similar results, and finding better ways to help the poor. 

Friday, May 3, 2013

A Train Wreck for 100,000 people

As mentioned before in this column, the wheels are coming off the bus that is the Affordable Care Act. Here is another example of good intentions gone astray.

One of the early "benefits" of Obamacare was the PCIP or Pre-Existing Conditions Plan. There is one in Washington called PCIP-WA and thousands of people are enrolled. I have enrolled about 20 individuals myself.  The PCIP was a great benefit for people with serious medical conditions and no way to buy a regular health insurance plan -- this one covered them immediately. Enrollment was suddenly halted March 2, 2013.

Well, PCIP may not last to the end of 2013. It is running out of cash. The full article is here (cut and paste into your browser)

The short version is that this great and wonderful idea wasn't too well thought out, as we are seeing to be the case with most of the ACA. Although the Act set aside $5Billion to run the plan, guess what? The average participant is running up over $225,000 in claims and money is running short.

The Feds may push the responsibility onto the States that are participating in the PCIP. I doubt Washington or any other State has the money to carry this program on when the Federal money pot runs dry.

As Senator Max Baucus, D-Montana said, "I see a train wreck coming..." and he was correct. There is an old saw that goes "He who giveth all he hath to the destitute soon joineth their ranks."