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“Separating Myth From Reality On Obamacare”: The Greatest Good For The Greatest Number, More People Are Better Off In The End

My heart sank when I got an email late last month from my friend Robert, who has been battling multiple sclerosis for the past decade. He wrote to tell me that he was among the many Americans who in recent weeks received letters from their insurance companies saying that their policies won’t be available next year.

Insurance companies are sending those letters primarily because the policies they will no longer offer don’t provide enough coverage — or have deductibles that are too high — to comply with the Affordable Care Act. In many cases, however, the policyholders getting those letters are simply victims of a business practice insurers have engaged in for years: discontinuing policies because they’re no longer sufficiently profitable.

Robert understandably was worried. Like most of us, he’d been seeing the news stories about people who had received similar letters and seemed to be resigned to having to pay more in premiums next year for comparable or even less coverage, thanks to Obamacare.

Considering his very serious and costly preexisting condition — his medications alone cost more than $5,000 a month — Robert was nervous as he started looking for a replacement policy. How much more would he have to pay to stay insured?

A couple of weeks went by. I assumed Robert, like many others, was still waiting for the Obama administration to fix Healthcare.gov so he could shop online for coverage. It turns out Robert wasn’t willing to just wait. He decided to call an insurance agent and talk to a real live human being about his options for next year.

He could barely believe what he heard: he could get better coverage than the policy being discontinued — and pay less — thanks to Obamacare.

“The overall cost of the plans I’m considering is cheaper than the plan I am currently paying for,” he wrote me this week. “My total cost for coverage now, including premiums and out of pocket costs, is about $9,800. Two of the plans I’m seriously considering for next year have total costs of $8,400. I’m shocked, but in a good way.”

So not only did Robert not experience the sticker shock he had been expecting, he will save $1,400 next year on health insurance.

The plan he is leaning toward — a top-of-the line “platinum” plan — will have a higher monthly premium, but he will still save on average about $117 a month because of the way his out-of-pocket costs will be calculated.

Robert is among many who are losing their current coverage but in the end will be better off. In fact, considering that many folks buying coverage on the individual market have at least one pre-existing condition — which insurers can no longer take into consideration when pricing their policies — it’s likely that more people will get more for their insurance buck next year than less.

In addition, most of the people who buy coverage through the new insurance marketplaces (as Robert will when the balky Healthcare.gov website is working more smoothly) will be eligible for tax credits and subsidies from the federal government that will lower their monthly and overall costs even more.

Robert knows that you can’t determine how much you’ll spend on coverage during a given year just by multiplying the monthly premium by 12. If you don’t take into consideration out-of-pocket costs and just pick the policy with the cheapest premium, you could wind up paying more overall than if you picked a plan with a slightly higher monthly premium.

Robert also will be able to spread the cost of his coverage more evenly over the year. Under his current plan, he had to have at least $5,000 in the bank at the beginning of every year when his policy renewed to cover the cost of his medications for just one month. Under the new plans he is considering for next year, his monthly out-of-pocket costs will range from $80 to $120 a month.

“It will be easier to manage paying for my drugs spread out over a period of 12 months instead of in one lump sum at the beginning of the year,” Robert told me.

Robert said the insurance agent told him his case is not unique, that a lot of the people she talks to who have been frightened by the media coverage are pleasantly surprised to learn that they will get better coverage for less money next year. Once the Healthcare.gov website is fixed, more people who have received letters from their insurance companies will get a similar pleasant surprise.

 

By: Wendell Potter, The Center for Public Integrity, November 12, 2013

November 13, 2013 Posted by | Affordable Care Act, Obamacare | , , , , , | Leave a comment

“Purposeful Republican Misrepresentation”: Read This Before You Believe The Obamacare Premium Spike Hysteria

While some states are reporting lower than expected health care premiums in the exchanges established by the Affordable Care Act, a growing number of Republican-controlled states — like South Carolina, Ohio, Indiana, Florida and Georgia — are garnering screaming headlines about huge premium spikes under the law.

Calculating premium rates is a complicated and tedious task that will vary greatly among states and is open to interpretation and manipulation by both supporters and opponents of President Obama’s health care law. Generalities are particularly hard to draw, as the law will impact Americans differently: the new regulations will lead some younger people to may pay more than they’re contributing now, but will save older and sicker people hundreds, if not thousands of dollars a month.

Still, since Republicans are politically motivated to portray the proposed premium increases in a negative light and the media is far more interested in sensational claims about Obamacare failing, coverage of the new rates often leads readers with the mistaken perception that the law is coming off the tracks. Below is a short guide that will help you identify if someone is misrepresenting how much premiums will increase under Obamacare:

1. Do the premiums account for subsidies?

Most articles about premiums for health insurance in the exchanges relegate information about the Affordable Care Act’s tax credit subsidies to the lower two thirds of the piece, thus presenting the top rates as the actual amount families and individuals will be required to pay.

In reality, the number of applicants who are eligible for sliding-scale tax credits will vary — the credits are available to people making less than four times the poverty line — but the Congressional Budget Office (CBO) estimates that out of the 7 million Americans expected to enroll in coverage in 2014, 6 million will be eligible for subsidies. Those with incomes up to 400 percent of the Federal Poverty Line (FPL) will also see reduced the out-of-pocket limits.

Maryland officials, for instance, project that three-fourths of enrollees will receive assistance. In 2014, the average subsidy will be $5,510 and will increase in the years ahead.

2. What is the state comparing the new premiums to and does it break down the increases by the available levels of coverage?

While states like New York or California have already enacted strict regulations that mirror many of the new rules in the Affordable Care Act, others (like Indiana or South Carolina) allow insurers to sell skimpy bare-bones high deductible plans that provide little actual coverage.

Comparing the comprehensive plans that will be available in the exchanges (and the individual market) to the existing coverage is like likening a Lexus to a bicycle — yes, the car is more expensive, but it is in a whole different category of transportation. Under the law, all new insurance plans have to offer essential health benefits like prescription drug and mental health services.

3. Are cheaper coverage options mentioned?

Last month, state officials in Indiana announced that premiums for individual policies would be 72 percent higher than the premiums people currently play. But a closer look at the data revealed that the state wasn’t issuing actual premiums, but calculations for “allowed cost” or “the cost of insurance before calculating how much individuals would pay out-of-pocket, because of co-payments and deductibles.” The actual premiums turned out to be much lower.

What’s more, the numbers were averages of all plans in the exchange — from bronze plans that cover 60 percent of health care costs to platinum plans, which pay for 90 percent — and were not representations of the prices actual families will pay. Past experience in Massachusetts shows that consumers are very price conscious and will gravitate towards the cheaper bronze or silver plans. (In Massachusetts, 84 percent enrolled in bronze or silver policies.)

A catastrophic plan will also be available to those up to age 30 in the individual market. In Nevada, this coverage will be available for less than $100.

4. Has the state done all it could to reduce premiums?

Approximately two dozen states allow the state insurance department or commission “the legal power of prior approval, or disapproval, of certain types of rate changes” and under the Affordable Care Act, the federal government has offered grant funding “to help with rate review activities.” States like Maryland — which has some of the strongest rate-setting laws in the country — claims to have used its authority to deny rate increases to reduce the proposed premiums by “more than 50 percent.” Oregon regulators also slashed carriers’ rate requests by as much as 35 percent.

 

By: Igor Volsky, Think Progress, August 5, 2013

August 8, 2013 Posted by | Affordable Care Act | , , , , , , , , | Leave a comment

“Running Out The Clock On Medicare”: Romney’s Constant “Delaying Counter-Attacks” That He Knows Won’t Survive Serious Scrutiny

Given what we know about the cynicism of the Romney campaign, it’s entirely possible its strategy for dealing with attacks on the Ryan Budget’s effect on Medicare will be to raise constant counter-attacks that don’t survive a moment’s serious scrutiny, but succeed each other quickly until Election Day arrives and the clock runs out.

The Big Bertha rolled out about the time Paul Ryan was selected as Mitt’s running-mate, based on one of the Big Lies of the 2010 campaign, was that Obama and congressional Democrats had “raided” $716 billion in Medicare funds to pay for its socialist efforts to give undeserving poor and sick people health insurance. When it was pointed out that the same “cuts” (actually negotiated reductions in provider reimbursements plus a paring back of the “bonus” subsidies for private Medicare Advantage plans) were included in Paul Ryan’s own budget plan, Romney quickly said he’d restore the money if elected.

Now that promise is drawing scrutiny, as noted by the New York Times‘ Jackie Calmes:

While Republicans have raised legitimate questions about the long-term feasibility of the reimbursement cuts, analysts say, to restore them in the short term would immediately add hundreds of dollars a year to out-of-pocket Medicare expenses for beneficiaries. That would violate Mr. Romney’s vow that neither current beneficiaries nor Americans within 10 years of eligibility would be affected by his proposal to shift Medicare to a voucherlike system in which recipients are given a lump sum to buy coverage from competing insurers.

For those reasons, Henry J. Aaron, an economist and a longtime health policy analyst at the Brookings Institution and the Institute of Medicine, called Mr. Romney’s vow to repeal the savings “both puzzling and bogus at the same time.”

Marilyn Moon, vice president and director of the health program at the American Institutes for Research, calculated that restoring the $716 billion in Medicare savings would increase premiums and co-payments for beneficiaries by $342 a year on average over the next decade; in 2022, the average increase would be $577.

Worse yet, the only thing worse than the suggestion that Obama wants to “raid” Medicare to help “those people” is the idea that Romney wants to boost out-of-pocket expenses for seniors to provide a windfall to providers, a specter congressional Democrats are already raising:

“The bottom line,” said Representative Chris Van Hollen of Maryland, the senior Democrat on the House Budget Committee, which Mr. Ryan leads, “is that Romney is proposing to take more money from seniors in higher premiums and co-pays and hand it over to private insurance companies and other providers in the Medicare system.”

I don’t know exactly how the Romney campaign will get itself out of this latest box on Medicare, but I’m sure it will come up with something confusing enough to take time to rebut, and then turn its attention back to the evil plans of the incumbent to bring back the unconditional dole and in general let those people run riot at your expense, middle-class America!

Got that? Vote Romney and there’s more money for you! Vote Obama, and it’s less money for you, more money for those people!

Add in some selectively broadcast messages about stern father Mitt Romney not wanting dirty girls to have sex and get away with it, and that’s the heart of the GOP message this year, sad to say.

By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, August 22, 2012

August 23, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“Gender Pay Gap Is Alive And Well”: Facts About the Health Insurance Compensation Gap

Unfortunately the gender pay gap is alive and well: Women in the United States earned 77 cents for every $1 earned by men in 2011—an average of $10,622 in lost wages every year. Yet that earnings ratio actually understates the extent of women’s disparate treatment in the workforce because they also experience a health insurance compensation gap. Below are the answers to some key questions about this gap, as well as how the Affordable Care Act—the new health reform law—works to close it.

Q: What is the health insurance compensation gap?

A: Women are less likely than men to receive health care coverage through their employer and are more likely to have higher out-of-pocket medical costs. This results in a health insurance compensation gap on top of the wage gap.

Q: What is the difference between men’s and women’s access to job-based coverage?

A: Women are significantly less likely than men to have access to their own employer-based coverage. Less than half of women (48 percent) are eligible to get health insurance through their jobs, compared with 57 percent of men, in part because women are more likely to work for small businesses and in low-wage jobs. Although two-thirds of women between the ages of 18 and 64 have employer-based insurance coverage, only 38 percent of women are enrolled in an insurance plan they receive through their own employer,1 while 24 percent receive employer-based coverage as a dependent on their spouse’s or partner’s plan. In contrast, 50 percent of men receive insurance coverage through their own employer, and only 13 percent of men receive dependent coverage.

Q: What is the financial impact of the compensation gap?

A: The gap in health insurance compensation translates into women losing an average of $4,508 for single coverage and $10,944 for family coverage in employer contributions to health benefits each year. Given that two-thirds of mothers are either primary breadwinners or co-breadwinners for their families, the compensation gap is a significant burden on the budgets of many American families.

Q: Where do women turn when they don’t have access to job-based coverage?

A: When working women cannot obtain employer-based coverage and earn too much to qualify for Medicaid, they must turn to the individual health insurance market. Yet women often face discrimination in the individual market—they are charged more for coverage, denied coverage for gender-specific conditions, and sold plans that inadequately cover their health needs.

Q: How much more do women spend out of pocket on health care?

A: Even with employer-based coverage, women have higher out-of-pocket medical costs than men. Overall, women of reproductive age spend 68 percent more out of pocket than men on health care, in part because their reproductive health care needs require more frequent health care visits and are not always adequately covered by their insurance. Among women insured by employer-based plans, oral contraceptives alone account for one-third of their total out-of-pocket health care spending.

Q: How are women affected by the compensation gap?

A: The combination of being paid less than their male counterparts and having higher out-of-pocket medical expenses leaves many women struggling to pay their medical bills or trading off other necessities such as food, heat, and electricity to cover their medical costs. Fifty-two percent of women report delaying or going without needed care because of cost (not filling prescriptions or skipping tests, treatments, or follow-up visits), compared with 39 percent of men. Women also report higher rates of medical debt than their male counterparts. And one study showed that more than half of low-income women are underinsured, meaning they spend 10 percent or more of their income on out-of-pocket health care costs and premiums.

Q: How will the Affordable Care Act help reduce the health insurance compensation gap?

A: The Affordable Care Act institutes a series of reforms designed to drastically expand coverage and contain health insurance costs for all Americans. Many of the reforms enacted by the new health law have been and will continue to be especially beneficial for women, as they help resolve many of the problems outlined above. The health care bill:

  • Provides insurance premium assistance through income-based tax credits on a sliding scale beginning in 2014
  • Expands Medicaid eligibility to people with incomes below 138 percent of the federal poverty level—about $31,809 for a family of four in 2011
  • Allows young people to remain on their parents’ health plans until the age of 26
  • Ends discrimination that has left women paying up to 150 percent more for the same coverage purely because of their gender
  • Bans insurance companies from denying coverage to women through pre-existing condition exclusions Ensures that women receive vital preventive care at no additional cost—significantly including contraceptive coverage, which will eliminate one of the primary sources of women’s out-of-pocket health care spending
  • Mandates that maternity benefits be covered as an essential part of women’s health care
  • Caps co-pays and deductibles, which will help reduce the amount women pay in out-of-pocket expenses

Through these reforms that level the playing field for women in the health care market, the Affordable Care Act will help reduce the compensation gap that exacerbates the disparity between men and women’s earnings.

 

BY: Jessica Arons and Lindsay Rosenthal, Center For American Progress, June 1, 2012

June 2, 2012 Posted by | Affordable Care Act, Women | , , , , , , , | 1 Comment

New Health Insurance Rules Would Let Consumers Compare Plans In “Plain English”

What would your health insurance cover if you got pregnant? How much could you expect to pay out of pocket if you needed treatment for diabetes? How do your plan’s benefits compare with another company’s?

Starting as soon as March, consumers could have a better handle on such questions, under new rules aimed at decoding the fine print of health insurance plans.

Regulations proposed by the Obama administration on Wednesday would require all private health insurance plans to provide current and prospective customers a brief, standardized summary of policy costs and benefits.

To make it easier for consumers to make apples-to-apples comparisons between plans, the summary will also include a breakdown estimating the expenses covered under three common scenarios: having a baby, treating breast cancer and managing diabetes.

Officials likened the new summary to the “Nutrition Facts” label required for packaged foods.

“If you’ve ever had trouble understanding your choices for health insurance coverage . . . this is for you,” Donald Berwick, a top official at the Department of Health and Human Services, said at a news conference announcing the proposal.

“Instead of trying to decipher dozens of pages of dense text to just guess how a plan will cover your care, now it will be clearly stated in plain English. . . . If an insurer’s plan offers subpar coverage in some area, they won’t be able to hide that in dozens of pages of text. They have to come right out and say it.”

Industry representatives said complying could prove onerous for insurers. “Since most large employers customize the benefit packages they provide to their employees, some health plans could be required to create tens of thousands of different versions of this new document — which would add administrative costs without meaningfully helping employees,” Robert Zirkelbach, press secretary for the industry group America’s Health Insurance Plans, said in a statement.

Insurance shoppers would also have to keep in mind that their actual premiums could change after they finalized their application, particularly in the case of plans for individuals, which can continue to adjust benefits based on detailed analysis of members’ health history over the next three years. (After 2014, the health-care law will essentially limit insurers to considering only three questions about applicants: how old they are, where they live and whether they smoke.)

The regulation, which is subject to a 60-day public-comment period, essentially fleshes out details of a mandate established by the the health-care law. But it also clarifies a question that the law left somewhat ambiguous: How soon into the application process can shoppers get the summary from insurers?

The regulations would require insurers to provide the summary on request, rather than waiting until someone applies for a policy or pays an application fee, a position that drew praise from consumer advocates.

“If consumers are really going to be able to compare their options, they should be able to easily get this form for any plan that they would like to consider,” said Lynn Quincy, senior health policy analyst for Consumers Union, the nonprofit publisher of Consumer Reports.

In addition to supplying the summary on demand, insurers would have to automatically provide it before a consumer’s enrollment, as well as 30 days before renewal of their health coverage. Plans must also notify members of any significant changes to their terms of coverage at least 60 days before the alterations take effect.

The summary form, which can be sent by e-mail, must be no longer than four double-sided pages printed in 12-point type. In addition to listing a plan’s overall premiums, co-pays and co-insurance amounts, it must include charts specifying the out-of-pocket costs for a range of specific services. A copy can be viewed at www.healthcare.gov/news/factsheets/labels08172011b.pdf.

By: N. C. Aizenman, The Washington Post, August 17, 2011

August 19, 2011 Posted by | Affordable Care Act, Consumers, Corporations, Government, Health Care, Health Reform, HMO's, Insurance Companies, Pre-Existing Conditions, President Obama, Public, Regulations | , , , , , , , , , , , , | Leave a comment

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