The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Health Care Reform 2010: Required Reading Part I

Posted by Alan on March 24, 2010


Complex legislation is, well, complex, and the health care reform recently signed into law by President Barack Obama is no exception. Complicating the complexity is that the Senate is still considering clean-up legislation that will modify the existing health care reform law. And the Senate could wind up amending that clean-up bill before passing it (if the Senate does pass it) sending the sidecar legislation back to the House for their approval. and could change some of its provisions. (This circumstance is looking increasingly unlikely. The clean-up bill will go back to the House to correct some technical problems, but it is unlikely to contain substantive changes. But then, nothing is certain when it comes to health care reform).

So to paraphrase Winston Churchill’s famous “”a riddle, wrapped in a mystery, inside an enigma,” what we have here is uncertainty, wrapped in complications, inside complexity. There are many layers to this onion and it will take time to get through them all. Which doesn’t mean we shouldn’t start trying to figure out what’s what. It just means we should recognize understanding what the new world of health care in America will be like is far less certain than the critics and proponents would have us believe.

What follows then are links to articles, sites and the like you may find useful as you begin your marathon onion peeling process:

  1. Health care reform implementation will arrive slowly at first growing to a torrent by 2018. Keeping track of what happens when can be tricky. Enter the National Association of Health Underwriters and their excellent health care reform timeline.  A superb starting point for understanding what’s ahead.
  2. Legislative intent and legislative language often conflict. For example, Democrats in Congress and the Administration want health insurance carriers to accept children applying for coverage regardless of their pre-existing conditions. They intended to have this requirement implemented within 90-days of enacting health care reform. But the language in the bill apparently does something slightly different. According to the Associated Press, while carriers cannot exclude a child’s pre-existing condition once that child is enrolled, insurers are not required to guarantee acceptance of children applying for coverage who have pre-existing conditions. The Administration will try to rectify this situation through regulation, but it’s not yet clear what they can do.
  3. Professional brokers do much more than simply sell health insurance policies. They educate and counsel their clients over the long-term. Those clients are already calling brokers asking for a quick summary of what health care reform means to them. NAHU comes to the rescue again with their “How the Health Care Reform Legislation Will Impact Your Employer Clients” document. Don’t leave the office without one. (Note: If you’re a professional broker and not a member of NAHU, you need to sign up right away. NAHU has fought vigorously on your behalf. They provide terrific material — such as this document and the timeline, above — on a host of topics. They deserve your support.)
  4. Regular reader Alison sent me a link to an excellent review of the health care reform legislation from the Wall Street Journal.
  5. The Senate is debating HR 4872, the so-called sidecar legislation aimed at improving the legislation signed into law by President Obama. Want to know what it does? Go to the source, which in this case is the House Committee on Rules web site. Here you’ll find the text and summaries of this clean-up health care reform bill.
  6. People’s feelings about the importance of polls tend to wax and wane with whether the poll results coincide with their own opinions. Democrats in Congress who once urged the previous Administration to listen to the polls concerning the war in Iraq are now enamored with the concept of being true to one’s convictions. Republicans who stood firm against public opinion on the issue are now condemning Democrats for ignoring the will of the people. Polls,in other words, are of limited value. But if we’re going to read them, let’s read good ones. The Kaiser Family Foundation has done a series of health care reform related polls over the years. The Foundation’s tracking survey on health , conducted before the current bill passed, reveals some interesting trends concerning the public’s feelings about health care reform.
  7. I’m one of those who believe health care reform will do less than supporters promise and is not nearly as dangerous as critics claim. One reason is that, well, this is always the case with legislation. People have a tendency to assume the best or worst. Reality has a way of settling in somewhere in between. The other reason is that participants in the debate often overstated or misstated facts. A reality check is useful now and then. The Associated Press recently offered a fact check that advocates on both sides of the debate should read.

I’ll publish more required reading material in the days ahead. Meanwhile, if you’ve come across a useful article or site on the subject of health care reform, please send me the link. If it sheds light on the subject (as opposed to merely more heat) I’ll try to include it.

55 Responses to “Health Care Reform 2010: Required Reading Part I”

  1. Meg McComb said

    “The greatest legacy of Obamacare may be the long-term fiscal disaster it will leave for future generations of taxpayers. Official estimates peg the cost at $940 billion over the first 10 years……(Historically), new entitlements have a long history of exceeding orginal cost estimates. When Medicare was passed in 1967, the House Ways and Means Committee projected that the program would cost $12 billion annually by 1990. But when 1990 rolled around, annual Medicare spending had actually hit $110 billion. Today, 20 years later, the program costs more than $520 billion a year. So much for early estimates.” Sally C. Pipes, Presdient and CEO, Pacific Research Group

    • I just saw this, basically same post as on the “HHS’ Technology Problem Presents a Real Opportunity” Topic and the “Health Care Reform Leaves Plenty of Time to Prepare for Change” Topic.

      Meg, I now see the source for you comments, and will attempt to find her comments via Google.

      My same questions apply.

      Spence

  2. Alan,

    The more I read about the structure, access and incentives for small employes to participate in the exchanges, the more concened I am about the role of insurance agents in this process. While I understand the role of agents in an advisory capacity and, perhaps, the need to rely on a fee-based structure, my question is simply whether agents will be able to sell products within the exchange.

    Thanks,

    Drew Miller

    • Alan said

      Hello Drew: The role for brokers to sell products in the exchanges is in the legislation itself. Specifically: ENROLLMENT THROUGH AGENTS OR BROKERS.—”The Secretary shall establish procedures under which a State may allow agents or brokers—(1) to enroll individuals in any qualified health plans in
      the individual or small group market as soon as the plan is offered through an Exchange in the State; and (2) to assist individuals in applying for premium tax credits and cost-sharing reductions for plans sold through an Exchange. Such procedures may include the establishment of rate schedules
      for broker commissions paid by health benefits plans offered through an exchange.”

      Obviously, how this all plays out in the regulations is what really matters, but the legislative language is pretty clear.

  3. James Edward Hicks III said

    Is the new health care reform legislation the end of the small health insurance carrier? Seems to me they have two distinct disadvantages now: volumes to small too get the discounts offer to the large carriers by providers, and second they don’t have the economics of scale to keep administrative costs in line with the larger carriers. If this is true then how is this good for competition?

  4. JimK said

    Alan

    I have written here before that I am a retired federal employee and as a federal employee, I have always paid towards my insurance premiums. Every year during “Open Season”, we would get a chance to change insurance carriers. During “Open Season”, the Postal Service would hold Health Fairs and representatives from the participating individual insurance carriers would be present. The representatives would hand out brochures and answer questions. There was also a personnel clerk assigned as the Health Benefits Coordinator (HBC). However, her duty as HBC was administrative; therefore, each individual had to make their own assessment of the various plans.
    The only reason I am writing this is because during the time I have participated on this blog I did come across one Broker, I believe it was Jeannette Taylor, who assisted a Postal Worker in selecting a plan. I do not recall whether she was reimbursed for her work or if she just helping a friend. If she was reimbursed for her work and Brokers are, and have been, participating in the Federal Employees Health Benefits Program it would seem to me that the new healthcare law would present a great opportunity for Health Insurance Brokers.
    In addition, if Brokers are allowed to participate in the FEHBP I am surprised, at least in NY, that they did not advertise their services more actively; their assistance would have been greatly appreciated.

    • Jim,

      I worked with NARFE for many years, providing an endorsed group Medicare Supplement plan and Long Term Care insurance. I found the NARFE Members to always be truly great people, responsible, and seemingly strongly in favor of America’s system of governance.

      You, in my opinion, epitomize the character and strengths of other retired federal employees I’ve known. Your even handed comments about these issues actually left me with the impression that you were a fellow agent or broker. I must have been “out to lunch” when you mentioned that you were a retired federal employee.

      Though we may not always agree, posting with you is a pleasure.

      • JimK said

        Spence

        It’s been a pleasure posting with you also. Additionally, prior to my retirement, I was approached by NARFE and I read their literature. However, I chose not to join; based upon your comments here maybe I will revisit that decision.

        Thanks again

        Jim Kirk

    • Alan said

      Jim: To the best of my knowledge, brokers are not involved with the FEHBP. They certainly weren’t when I was a member many, many, many years ago. Nor are invited to participate in California’s version of the program for state employees. I was in that program many, many years ago. That’s the bad news.

      The good news is that while the new exchanges are modeled after the FEHBP, they are not identical. And as defined by the recently passed legislation, brokers will be able to participate in the exchanges. This is important, because unlike folks like yourself and other federal employees who generally work in specific sites, private small businesses and individuals are spread wide and far. Helping them understand their options will be a substantially different challenge than is the case with federal employees. Brokers can, and I believe will, help meet this challenge.

      • JimK said

        Alan

        Thanks for the reply. It’s too bad the Brokers are not involved with FEHBP, because IMHO I believe the could provide an invaluable service to FEHBP employees.
        Additionally, as to being site specific, this is not entirely true. I retired as a Manager of Labor Relations and I was responsible for a geographic area in NY that started at the Bronx border and ended near Albany to the north and PA to the west. This area included over 5000 employees and a number of these employees did not have access to the “Health Fairs” I described.

        Jim Kirk

      • James McDaniel said

        Alan, I’m glad to see you point out (above and in response to my 3/25 post) that there will more than likely be a place for brokers within the exchanges. I know the exchanges will vary per state, but is there any documentation or reading that you could point me to that might help provide an overview of how these exchanges will work?

  5. I have noticed an interesting fact: When Rick, Gary Weiss, Bruce Holly, and on occasion others who think as do they and I, comment in a defensive manner to James Thornton, Tom Degan, Mark and those who think as do they, it is because the Thornton’s and Degan’s among this group of posters continue to attack, bash, and belittle the thoughts of those who do not think as do they.

    Doubt it? Check the posts, the pit-bull attack dog posts, and the responses to those posts. Certainly, we could simply let them bash away without comment. However, if we didn’t hold them accountable for playing the same kind of game of ultra partisanship as have the Democratic Leadership in Congress and Barack Obama, they just might become as arrogant and certain that only they have the answers, and be convinced that the rest of the posters, those in disagreement, are vacuous and only “self-interested”. They may already suffer from the same disease as does the Democrat Controlled Congress and the Obama Administration, but as winners, could at least attempt to demonstrate “grace under winning”, instead of continuing to be whiners.

    Grow up, fellahs. I repeat, YOU WON. Try to be gracious winners, and not exhibit the characteristics of those who are never satisfied, do not want to work in a conciliatory manner, aren’t the least interested in bi-partisanship, and try to stop appearing to be so malevolent and greedy, wanting to take more, and more from those who always seem to give. You won. Act like it.

    • Mark said

      Spence I bet you needed two Blue Books for your exams.

      We won you lost is a sad commentary on your view. The reality is no one won no one loss we are at a beginning. Some good things came out of the bill and some not so good things came out of the bill. We move on from here.

      You seem to have an approach that if it is not 100% of what you want then it is a no vote. The cool thing about that is you are entitled to feel this way. Your assertion that the minority won isn’t correct. The bill had the majority of the vote! You can point to all the polls you want but polls don’t vote. You vote and I vote. If you don’t like what your elected representative does you have primary and general elections. If you want minority rule move to California because that is essentially what has happened. It has also brought on a glut of propositions that has all but neutered our legislative body.

      Your long winded tirades aren’t particularly amusing and at least in reference to me not accurate. I quit watching MSNBC and Fox long ago because their commentary was self serving and way off my base.

      I don’t think James was looking for a hand out but that doesn’t mean he shouldn’t express his frustration with a system that is breaking him financially. I get a sense he pays premium and is reflecting on a situation that affects thousands of our fellow citizens.

      As I have said to James and others this bill will cause premiums to rise. Not mandating that everyone buy in (the penalty is a joke)will bite carriers and states in a big way.
      The way medicine is practiced and or delivered will have to change to begin to get costs under control. The free enterprise system has not worked in controlling costs.
      http://www.businessweek.com/magazine/content/10_11/b4170072396095.htm

      But most importantly breath.

      • No Mark, the majority didn’t win, the majority of Congress, the Democrat Controlled Congress, won, by jamming this law down the throats of the majority of Americans who didn’t want it.

        When the Republicans (I am not one) pulled this same crap on the Democrats the Democrats screamed foul all night and day. Yet when they came to bat, they conveniently forgot that they were going to play by open and transparent rules, just as Obama forgot that within about 24 hours of taking office.

        If you don’t like reading long winded tirades, then stop accusing those of us who disagree with you of being whiners, and we won’t accuse you of being disingenuous and of being a poor winner.

        Regarding Jim Thornton, read the past several months of posts before jumping to conclusions. His motives behind his words have at least been honest, if not honorable (in my opinion, only).

        Mark, I’m certain that you don’t mean to be as cavalier and arrogant as you appear, but please, your side did win and all you can do is grouse about those who don’t agree with your philosophy.

        • Mark said

          I think we do math differently.

          I also think you jump to conclusions about people. Cavalier maybe arrogant hardly. But why resort to name calling? What purpose does it serve? Is it the facts aren’t on your side? I don’t know I’m asking.

          David Brooks in a recent NY Times column wanted a Tea Party from the center. Where conversation is about issues.

        • Mark,

          I do my math by adding two plus two and arriving at four. I also know that the American Public s not happy with the HCR results, or 55% would be in favor of repealing this law. I posted this link yesterday, this topic, further down: http://go2.wordpress.com/?id=725X1342&site=alankatz.wordpress.com&url=http%3A%2F%2Fwww.rasmussenreports.com%2Fpublic_content%2Fpolitics%2Fcurrent_events%2Fhealthcare%2Fmarch_2010%2F55_favor_repeal_of_health_care_bill.

          You’re correct, however, that I shouldn’t have referred to you as a whiner. It was several others on the “HCR positive” side who began that BS. I apologize. As I said earlier, those of us who have been countering the attacks on the “HCR negative” side have only been reacting, and while reacting is a bad place to be versus “Pro-acting”, there has been little choice except for us to simply “shut up” and go away, or comment.

          Regarding the “Tea-Party”, no thanks. I am a moderate, a centrist. The radical right has hijacked that concept, as they have the GOP (IMO).

          We can begin to have reasoned discourse when the “HCR positive” side decides that those of us who have been opposed to this bill have something of value to add. Until that happens, I fear that we will each be preaching to our own choirs.

          I am absolutely willing to get off of this “he said, she said” nonsense and to begin a reasoned discussion on the issues. Should that be your desire, then let us begin.

  6. James S. Thornton said

    Alan, I was going through some of the sites that you recommended. The Kaiser Family Foundation one has compiled some fascinating data that I have not heard referenced much in this debate. One factoid that was truly stunning to me is how the health care dollars in the US are allocated according to people’s incomes.

    The top 5 percent of the country spend 49.5 percent of the total health care dollars in America. The top 1 percent spend 22.9 percent. The poorest 50 percent of the nation share the remaining 3 percent of health care dollars! As Marie Antoinette might have said in a more genteel age, “Let them eat aspirin!”

    There has been much said about the widening gap in earnings between the highest paid CEOs and minimum wage workers, and I certainly am not surprised to find that having more money buys a person significantly more medical help. But this is the first time I have seen the concentration in health care spending put into quite such stark terms.

    I suppose the only consolation for the have-nots here is that they are less likely to face the risk of medical over treatment. Case-in-point: aggressive screening for prostate cancer. The fellow who helped to invent and popularize the PSA test has now repudiated it in large part because of its role in driving far to many prostatectomies in this country.

    (Note: I know this because I interviewed him directly for an article on PSA screening. Dr. Thomas Stamey, MD, prof of urology Stanford University hospital and school of medicine urology professor, championed the PSA test as a tool for the detection of prostate cancer in 1987 and has recently changed his mind, declaring the PSA era over.)

    There are today squadrons of older American men wearing Depends and dependent of vacuum pumps and Viagra, all because of radical surgery to remove a cancer that would, in all probability, killed or disabled very, very few of them. It is true that those who do die from PC–musician Frank Zappa and Law & Order’s Jerry Orbach are two well-publicized celebrity examples–often die horrifically. But most men, if they live long enough, do get PC, and most men die from other causes, NOT PC.

    It would be interesting to see a slide showing earnings and presence/absence of the prostate, incontinence, and ED complications in American men.

    • James Edward Hicks III said

      It would also be interesting to see if the wealthy live longer as a result of their spending on health care.

  7. Tom Degan said

    It was a lot of fun watching these idiotic Republicans “warning” the Democrats that the passage of health care reform will cost them dearly at the polls in November. It’s going to cost someone dearly, alright, but it won’t be the Dems. Former Bush 43 speechwriter Davin Frum put it perfectly yesterday when he said that it was the Republicans – not Barack Obama – who had met their “Waterloo”. The historical rule of politics, that an incumbent president’s party always loses ground in the midterm elections, will go out the window come November. They will be unable to win without the help of the moderates. At this moment the moderates are abandoning this sinking ship en masse. The extremism of people like Michele Bachmann and John Beohner is starting to scare the hell out of them. Gee, I wonder why!

    Then there is the sticky situation of the Tea Party. By this late point it must be obvious to even the casual observer that this is an organization comprised of morons. It was formed as a protest movement against high taxes – immediately after President Obama passed the largest middle class tax cut in American history. There’s no denying it, these are not the brightest people on the planet. Their overt racism notwithstanding, they sure are funny! One self identified Tea Partier called into C-SPAN’s Washington Journal the other day asking the moderator where she could write to her congressman. When host Greta Brawner asked this idiotic woman what her congressman’s name was, she replied (I assume with a straight face) “He’s a Democrat. I don’t know his name.” Ya gotta love ‘em! Ya just gotta!

    Tom Degan

    • Meg McComb said

      I’m trying to focus on how health care reform is going to affect my insurance clients. It sounds like you’re more interested in bashing Republicans.

      • Alan said

        Thank you Meg. That’s what this blog is about: helping brokers and others understand what’s happening and why. The rhetoric of many of the comments here have gotten more heated, more personal and more irrelevent. Partly that reflects the broader readership (which is up considerably over the past few weeks, not surprisingly). That there’s so much anxiety over an issue as personal and critical as health care reform is also understandable. But this is not the forum for venting fears and frustrations. There are a lot of other blogs that serve that function. Let’s all please follow Meg’s advice and keep the discussion civil and substantive.
        Thank you.
        Alan

    • Rick said

      “moderates are abandoning the sinking ship in mass”

      Be specific. Where is that occurring?

      “it must be obvious to even the casual observer that this is an organization of morons”

      What’s obvious when comparing this group to a typical leftist group is that the Tea Party people are the providers and the leftist group the takers.

    • Gary Weiss said

      Tom,

      If what you say is accurate, how do you explain the election of Scott Brown in Mass.? Do you think the election of a Republican to Teddy Kennedy’s seat was an endorsement of Obama’s policies, or perhaps a repudiation?

      We’ll see what happens in November. I’m just hoping the Republicans can take back the House. Not because I love the Republicans so much, but more because I just can’t stand to see Nancy P. I can’t even bring myself to type her name.

      • Gary,

        Good comments.

        Actually, the only reason I am hopeful for a GOP win this November (outside of not being able to stand Nancy “The Arrogant” Pelosi, as with you) is because we need proper checks and balances to counter the actions of the Dems this past year and several months. I only wish that the “independents”, small “I”, who are the the largest segment of moderates and centrists had more power as a group to influence and elect “independent” thinking politicians, not just those who either sway to Democratic Party mandates, or Republican Party mandates. The arrogance displayed by the Ds in their steamrolling their priorities of bills (who cares about Unemployment and 18 Million lost jobs?) has demonstrated a serious lack of understanding that people must be able to pay their bills and keep their homes before worrying about paying for insurance premiums.

        Further, I heard on CNN today that President Obama said on Thursday that the passage and signing into law of this HCR Bill puts America on the road to Universal Health Care, putting the lie to all that he has said in his comments denying that he wants to see a Single Payor Canadian, Great Britain, Swedish type of system (none of which have worked…Canada has approximately a 5% uninsured rate, and after deleting Illegal Aliens and those in the USA who have made conscious decisions to not carry insurance, we have only a slightly higher rate, about 7.5%). Universal Care, which will obviate the need for any broker or agent reading this to have a role in the health care funding market, is in fact the goal of the White House and the Democrat controlled Congress.

        Further, as announced yesterday, Obama is ordering, not suggesting, ordering, dictating, that Lenders will have to reduce mortgage payments to no more than 31% of income for those Underemployed, or Unemployed. This is certainly a heartfelt and honorable desire, but I have not read of a President “Ordering” the private sector to do anything in the past…requested, promised to work with, but ordering, dictating, to my knowledge, has only been the stuff of Dictators, and while I choose to believe that being a dictator is not Obama’s desire, his actions beg the question, “What exactly does he think a President is allowed to do, without even Congressional approval?” This announced action simply doesn’t pass the “smell” test. Link to WA Post article: http://link.email.washingtonpost.com/r/X109GB/CA11R/18VA4O/IUU1JB/D9QZ5/UP/. It very well may not happen in the form outlined yesterday. Even if it does not, it should never have been considered in the fashion announced. This is another display of Presidential arrogance.

        Summing up, we are in agreement, Gary. It is truly, this time, “Time for Change”.

        Spence

    • James Edward Hicks III said

      Watch and see how much help McCain gets from his re-association with Sarah Palin. Looks like a desperation move to me.

  8. James McDaniel said

    Alan, I thank you for your insight and comprehensive research – it is very helpful to have it all (or at least quite a bit) in one place. I have a few questions.

    1. Broker Commissions – Now that the HCR is beginning to solidify, what does this mean for the broker community? I’m not as concerned with keeping existing lines, but how significantly will commission rates be squeezed? And as far as the individual market, will brokers be awarded a commission if they lead an individual to these exchanges?

    2. Excise tax for Carriers – This confuses me. I understand that excise taxes on the Rx industry and medical device manufacturers will help to bring all the players into this comprehensive effort (this did afterall begin as Health Care Reform although it’s seemed to migrate to Insurance Reform), but what I don’t understand is the excise tax on the Carriers. If Carriers will begin to cover dependents to age 26 and if they must cover pre-ex for children and eventually adults, why are they also being hit with excise taxes? The Carriers will no doubt begin to write policies for a large market-share of the currently-uninsured, but the added excise tax seems a bit harsh. Maybe it’s just as simple as the fact that they are about to get a lot more business…

    Again, thank you for offering this useful resource of information.

    James

    • James S. Thornton said

      Alan, I too appreciated the links. Let me add the following, which seems to call into some question whether the way our human minds are designed to process facts and biases renders us capable of changing opinions once these have been set.

      As a person whose own views are fairly ossified at this point, I found the research by the author of this piece highly intriguing.

      http://www.nytimes.com/2010/03/25/opinion/25nyhan.html

      • James S. Thornton said

        I am curious about why my post earned a thumb’s down.

        Is it because you read the article and disagree with the researchers’ conclusions on how people process misinformation?

        Is it because the posted article was in the New York Times?

        The Times posted a link to the scholarly study itself: http://www-personal.umich.edu/~bnyhan/nyhan-reifler.pdf

        This is slated to be published in the journal, Political Behavior. It does not seem to me to be biased towards the left or the right; the researchers are just looking at how people, once they have entrenched views on a topic, respond to factual corrections.

        Their conclusions are disheartening, I will agree. But that doesn’t mean they are insightful.

        As the abstract concludes: Results indicate that corrections frequently fail to reduce misperceptions among the targeted ideological group. We also document several instances of a “backfire effect” in which corrections actually increase misperceptions among the group in question.

        If nothing else, I suppose this should tell us that trying to “educate” those with whom we are arguing may only intensify their opposition.

        Is this not something worthy of consideration?

        • James S. Thornton said

          typo: I meant to say, “That doesn’t mean they are NOT insightful.”

          Sorry for the confusion!

    • Alan said

      All good questions James. Here’s my shot at the answers, but others may have different opinions:
      1. Broker Commissions: As I’ve written previously, I believe the days of tying broker compensation to medical inflation (which is what happens when it’s a percent of the then current premium) are soon to be history. With medical costs increasing at twice the rate of general inflation it’s hard to defend this historical practice. But thanks to the efforts of NAHU and others, brokers can be compensated when they place clients in the exchange. I’m confident brokers will continue to have an important role in the health care system. Commissions may be reduced, but the number of potential clients is increasing dramatically at the same time. Whether it’s a net plus or not remains to be seen.

      2. The excise tax on carriers results at least in part on Congress’ need to find revenue sources and the reality that, in requiring individuals to obtain coverage, it could be argued carriers are receiving a windfall. The excise tax captures some of that windfall. This ignores the points you made, however, concerning the various elements of the reform package that will increase carriers’ costs. But again, the money was needed so there’s the tax.

      • Scott said

        Hi Alan, Thank you for your insights. I sell a lot of individual policies, and after speaking to some company executives for the plans I sell (mainly the Blues) I was very depressed. Currently they are talking about 3 things being a real posibility.

        1) Most individual policies currently on the books will eventually stop paying renewal income due to the 85/15 rule squeezing out profits.

        2 Most companies will be reduced to selling supplements to the exchange plans.

        3) We will probably not get renewal commisions on the public plans either.

        My questions is 1) Should I still be aggresivly selling indiviual health plans.

        2) Do you see the future of the broker selling individual plans as a carrier that will be ending soon, like 2014?

        Thank you Alan for all your blogs. As afraid as I feel now, you have always been a tremendous source of information and you are truly apprrciated.

        • Alan said

          Thanks for the kind words Scott. I’m glad the blog has been helpful.

          Maybe I’m whistling past the graveyard, but I don’t see things as bleakly as your carrier friends do. First, brokers are able to sell plans within the Exchange and many will do so. Those brokers need to be compensated for their time, expertise and post-sale service. Those carriers who don’t offer this compensation will find themselves losing business to those that do. There’s nothing wrong with this dynamic. There’s no law that says carriers have to use brokers (and some don’t today). But there’s also no law that says brokers have to sell plans for carriers who underpay them. So the marketplace will determine the compensation brokers receive going forward and I’m optimistic the market will recognize and reward the services of professional brokers.

          The Medical Loss Ratio requirement for the individual market is 80%. This is sufficient to allow carriers to pay brokers for selling and servicing their plans. The commission levels will be reduced from today’s rates, but the available market will increase. And brokers will no longer go through all the effort of working with a prospect and submitting the case only to have 30%-to-40% of the applicatins declined. So it should work out. As I’ve written before, I don’t believe commissions will be tied to premiums going forward, but I do believe renewals will still be paid.

          So I’m optimistic that professional brokers (those who listen to their clients and help them find the plans that best fit their needs as well as being there for their clients after the sale) will do fine in the new world. That doesn’t mean I would put all my eggs in one market segment or product line. Diversifying the types of products and services you can offer your clients makes you more valuable to them and can provide greater security for your business.

          I hope this helps.
          Alan

        • Gary Weiss said

          What state are you in, Scott?

  9. “The Conservatives will whine, but that’s what they do best…They whine a lot. Did you ever notice that?”
    – – – – – – – – – – – –
    Some who are not in agreement with the new HCR law do whine, as have many who are in agreement with the new law, Mr. Degan.

    The percentages of wage earning age Americans who were, and are against this new, jammed through Congress on a razor thin party line vote (in fact, many House Democrats voted against this bill…are they whiners?) has been strongly a 54% to a 41% total, and that’s of those Americans who are among the eligible electorate. Those numbers have barely changed in the past year. [http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/march_2010/43_favor_health_care_plan_53_oppose2].

    Your words notwithstanding, Mr. Degan, you are in fact addressing in very harsh terms those of your “fellow citizens” who have the same rights as do you to voice their opinions. They, in the strong majority, consider you and those like you, who have won your bid to have HCR become law, even though you and your fellow believers are in a decided minority whose desires in a truly democratic system that favors the majority over the minority, not the converse, to be very sore and arrogant winners, and to be the true whiners. What’s your beef, Mr. Degan? Are you simply a poor winner? You won. You can read it in your local paper, or turn on your boob-tube; you, and your side,…won, though one certainly couldn’t tell it by your, and a couple of your compatriots’, pretty bad attitudes.

    • That link should be: http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/september_2009/health_care_reform.

      Another important link demonstrates that 55% of the eligible electorate would like to see the new Health Care Law repealed: http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/march_2010/55_favor_repeal_of_health_care_bill.

      If these links don’t become “hyper”, just copy and paste them into your browser.

    • James S. Thornton said

      The pollsters receiving the lowest scores are Zogby International, the American Research Group and Rasmussen Reports. In the case of Zogby, four out of five pollsters rated their surveys as not very (28%) or not at all reliable (52%).

      http://www.pollster.com/blogs/poll_of_pollsters_rating_the_i.php

      If you want to see more than just one poll on this topic, check out:

      http://www.pollingreport.com/health.htm which provides quite a few.

      Looking at just one poll is like cherry picking a mutual fund that happens to give you the best results (that you are looking for). Better to look at a Total Stock Index Fund.

      Some of these include (apologies if the formatting gets screwed up):

      USA Today/Gallup Poll. March 22, 2010. N=1,005 adults nationwide. MoE ± 4.

      “As you may know, yesterday, the U.S. House of Representatives passed a bill that restructures the nation’s health care system. All in all, do you think it is a good thing or a bad thing that Congress passed this bill?”

      Good Thing Bad Thing Unsure
      % % %

      3/22/10
      49 40 11

      Bloomberg Poll conducted by Selzer & Co. March 19-22, 2010. N=1,002 adults nationwide. MoE ± 3.1.

      “Do you favor or oppose the health care overhaul plan currently under debate in Congress?” Wording on 3/22//10: “Do you favor or oppose the health care overhaul plan passed by the U.S. House of Representatives last night?”

      Favor Oppose Unsure
      % % %

      3/19-22/10
      38 50 12

      CNN/Opinion Research Corporation Poll. March 19-21, 2010. N=1,030 adults nationwide. MoE ± 3.

      “Do you approve or disapprove of the way Barack Obama is handling health care policy?”

      Approve Disapprove Unsure
      % % %

      3/19-21/10
      40 58 2

      1/8-10/10
      40 59 1

      10/30 – 11/1/09
      42 57 2

      9/11-13/09
      51 47 2

      8/28-31/09
      44 53 3

      3/12-15/09
      57 41 2

      CBS News Poll. March 18-21, 2010. N=1,059 adults nationwide. MoE ± 3.

      “Do you approve or disapprove of the way Barack Obama is handling health care?”

      Approve Disapprove Unsure
      % % %

      3/18-21/10
      41 51 8

      2/5-10/10
      35 55 10

      1/6-10/10
      36 54 10

      12/4-8/09
      42 50 8

      11/13-16/09
      44 48 8

      10/5-8/09
      47 42 11

      9/19-23/09
      47 45 8

      8/27-31/09
      40 47 13

      7/24-28/09
      46 38 16

      7/9-12/09
      49 37 14

      6/12-16/09
      44 34 22

      • Mark said

        James, Spencer you both really need to get out more often.

        There’s a new law and all of us will learn to deal with it. Personally I’m glad it passed so the next time the conversation starts its at a new level. For those of us in the brokerage business who are adaptive will survive and some of us will thrive. I find the brokerage community in the life and health business to be particularly resilient. Change is a fact of life and you are ahead of the train or meet it’s bumper.

        I am not trying to convey that this is simple or their may not be some dips along the way but survival is not in question.

        • Alison said

          Your post says alot in a few words – thanks for the UP beat.

        • Mark,

          No one is arguing that survival is not in question. That isn’t the point. The point is that achieving survival will take what has been lacking until now, both sides working together. Until now, in our Congress, the minority has been dictating to the majority.

          I find it especially disconcerting when several posters here, those who have won this effort and are on the receiving end of its benefits, continue to bash, ridicule, humiliate, and attempt to belittle the Republicans, Conservatives, moderates, centrists, and independents who do not, and did not believe in this form of HCR, nor in the manner in which it was rammed through Congress in opposition to the wishes of the majority.

          I find it disconcerting as well, that you pay as little notice to the arrogant and poor winner attitude of those who should be ecstatic and yet continue to cry in their beer because the majority doesn’t agree with them and, as James Thornton so honestly commented, have become so ossified in their opinion that no matter what facts are presented will continue to harden as does “old bone”. Mr. Thornton’s, Mr. Degan’s, and your opinion that no one who is dissatisfied with the HCR Bill we must discuss methods to fix this bill, or must simply learn to live with the “Shrapnel” it has spewed in unforeseen directions (paraphrasing your words) only continues to foment partisanship, discontent, and a feeling that the winners in this issue lack good grace and instead continue to whine.

          There will always be those, I am of them, who will not just accept that which has been unceremoniously crammed down the throats of the majority, and will only feel welcome to work on solutions to fixing such legislation, when those who have won their bid are capable of demonstrating a modicum of grace toward and a willingness to work with those who continue to be dismayed and recognize that we need to fix this new law so that it truly represents the vast majority of Americans, not just those who stand to benefit because they are on the receiving end of those who pay in to help those who take out. Mr. Thornton is clearly on the side of those who will benefit though they have paid in nothing. Mr. Degan is slightly more difficult to assess; it appears that he stands alongside Mr. Thornton. It doesn’t appear, though I could be wrong, that while you don’t stand next to Mr. Thornton, Mr. Degan, and others of their ilk who are holding out their cups of self-pity even though they now have the clink of a lot of empathy in them, you nonetheless have little patience for those with whom you disagree, and with those who demand that their voices be heard, at least as regards fixes to this unpopular law, as they clearly had no say in the structure it took in its form when passed.

          Should you one day understand that many are not willing to go quietly “into that good night”, as you would wish, more accurately stated, won’t just “shut up and go away”, then we may be able to work together and not find ourselves shaking our heads in disbelief at those of you who don’t seem capable of being “good winners”.

          Be thankful that we exist. We refuse to let apathy dictate that laws should only benefit the few, and not the many.

  10. A few quick questions for Alan and other healthcare brokers out there (I know that regulations vary according to state, and I am in PA, but if you know even generally the answers here, I would be very grateful):

    1. When does the small business credit for providing health care benefits to employees kick in?

    2. If you offer health insurance to your employees, you must offer it to them all, correct? If a worker is covered by his or her spouse’s plan, they can turn it down, right? What if they are not covered elsewhere but say that they would rather take a higher rate of pay and decline health insurance? Would the employer be on the hook to pay anyhow?

    3. Currently, we are paying individual rates, and as some of you may know, it has become prohibitively expensive for us to continue. My wife is opening a cafe in the next couple months and will be hiring some staff, including (at least while they are home from college) my sons. What are the odds that a small business group plan, with the tax credit, would prove more affordable than what we currently have in the non-group market? Any other possible avenues of advice?

    Thanks for your counsel!

    • Gary Weiss said

      Why don’t you try contacting a professional health insurance broker in your area? That’s where you’ll get the best advice.

    • Alison said

      Jim – disclaimer is that things are NOT WRITTEN IN STONE and could be changed or wrong. As it is reported in most documents being circulated the below is consistent.

      1. Immediately for business’s with less than 25 employees with average salaries less than 25,000 up to a max of 50% of the employer paid portion for companies who pay at least 50% of the total premium. (not to mean it will be 50% of premium but cant be more)

      2. Up until now some carriers would allow carve outs (management only, etc) but the new legislation states no discrimation for the higher compensated. The employer has to have a certain partcipation of total number of employees in order to be able to carry a policy (most often 75% of eligible full time employees not covered under spouse, COBRA or other waivers currently deemed acceptable) Yes, someone can waive the coverage if covered under spouse and not even hurt the companies partcipation requirement. Employer does not have to pay anyway (yet). Employers with certain size are going to get penalized if they dont offer a group plan and there is a calculation for that as well including those who make employees wait a certain waiting period versus giving it right away. The waiting period fine doesnt appear to be immediate but will be assesssed and handled at a further time.

      3. It is possible you could benefit from a group plan. There will be again a requirement to offer to all except perhaps part time employees. It shouldnt cost you anything to find out.

      Again….an attempt at giving you a general idea and cant represent a definate answer to do amendments galore.

      Good luck.

      • Alison said

        p.s. employees have criteria as far as the insurance company is concerned to be eligible too – (requirements can be that they are W2, work full time hours, solely work for that conpany, and even more requirements) All employees have to be eligible and verifiable with tax documents.

        • Alison said

          Lastly, the advice to talk to someone local is a good one as they can only give you the definate info but again it shouldnt cost you anything to find out – Most charge nothing for putting together a proposal and qualifying your eligibility. Understand also that you are connecting yourself to that business and whatever the consequences to your health insurance continuation it would cause if it didnt succeed. Check that with a broker as well.

        • James S. Thornton said

          Thanks, Alison. I just wanted to know what the general lay of the land was. I really appreciate your explanation.

  11. Tiffany said

    Alan, thank you for providing us an excellent resource regarding the HCR. I appreciate all of your effort and knowledgeable insight into this very complex bill.

    I wanted to ask if you could clarify a part of the legislation that is set to take effect immediately:

    “Individuals and employer group plans that wish to keep their current policy on a grandfathered basis can if the only plan changes made are to add or delete new employees and any new dependents. In addition, an exception is made for employers that have scheduled plan changes as a result of a collective bargaining agreement. The reconciliation bill, if enacted, would eliminate the ability of plans to grandfather in a number of areas.”

    This language makes it sound like employers can’t make any plan changes (such as deductibles, copays, co-insurance and Rx) without some kind of consequence. It’s a bit confusing considering exchanges aren’t going to be set up until 2014. What does this mean for employers and the plans they are on currently?

    Thanks again for your help.

  12. Bruce Holley said

    In reference to the old Chinese proverb Bruce Holley says

    In journey of 1,000 miles if first step taken is in wrong direction it takes 24,901 miles to complete and you still wind up in same place.

    So Tom get an original thought. You speak of whining but you are also guilty yourself of exactly the same.

  13. Malcolm Cutler said

    Alan,

    As a supporter of Health Care Reform and hoping for a bi-partisan solution, I found the Associated Press link very refreshing and argument against letting strong rhetoric – on both sides – get in the way of achieving a bi-partisan solution.

    Please accept my compliments on your focus on these tough issues.

  14. JimK said

    As has been reported Fourteen Attorney’s General have filed a lawsuit in the Florida Federal District Court opposing the implementation of the Healthcare Reform Act (see link).
    The media reporting on this lawsuit has targeted the “individual mandate” provisions of HCR as the basis for this lawsuit. It is true that the lawsuit does challenge the validity of the individual mandate; the lawsuit takes a greater aim at the new Medicaid provisions.
    Florida, which is the lead plaintiff in the case, provides a financial analysis of the impact this legislation will have on the Florida State budget. The other States echo Florida’s financial concerns.
    While the legal consensus is that this lawsuit does not stand a chance, it does bring raise the concerns that the projected federal savings will be shifted to the individual States.
    Additionally, I read the Kaiser Poll and the poll shows that the HCR has a 50% approval rating in the South; five southern States have joined this lawsuit.

    Jim Kirk

    Click to access Thomma-healthcarelawsuit.pdf

  15. Tom Degan said

    The commentators keep reminding us that Theodore Roosevelt was the first president who tried to bring universal health care to the American people. That’s not quite true. He never really expressed the idea while he was in office. In 1912 Roosevelt had been out of office for four years when he attempted to reclaim the presidency from William Howard Taft, the man he had picked to succeed him. Once in office, Taft began to dismantle most of the progressive reforms that Teddy had put into place. When he sought the nomination once again, his campaign slogan was “a square deal for every man and every woman in the United States.” Part of the “Square Deal” was health care for all. He arrived at the convention that summer with all the delegates he needed (and then some) to seize the mantle of standard bearer. It was not to be. His party would betray the people by giving the nomination to Taft in spite of his victory. They had had enough of Theodore Roosevelt and his progressive reforms. 1912 was the year that the progressive wing of the Republican party died. He was the last great Republican president – the very last.

    A generation later TR’s distant cousin Franklin attempted to pick up the torch of universal health care. In his 1944 State of the Union address, he told the American people that his major goal for the post war world was national health insurance. Unfortunately for you and I, FDR did not live to see the war’s end. A film of that speech can be viewed in Michael Moore’s film, Capitalism: A Love Story. It’s is now out on DVD and is essential viewing.

    The new health care bill is not perfect – far from it – but as the old Chinese saying goes, “The journey of a thousand miles begins with the first step.” There will be improvements made on it down the years – there absolutely needs to be – but this is a fairly good first step. We’re on our way! The Conservatives will whine, but that’s what they do best. They’ll whine just as they whined when Lyndon Johnson signed into law the Voting Rights Act of 1965, or the Civil Rights Act of 1964. Just as they whined when Harry Truman desegregated the army in 1947, or when Franklin D. Roosevelt brought Social Security into being in 1935. They’ll whine just like they did when Woodrow Wilson tried to form the League of Nations in 1919 – or when Abraham Lincoln ended the institution of slavery in 1863! They whine a lot. Did you ever notice that?

    Tom Degan

    • Gary Weiss said

      The only thing essential about Michael Moore is a long overdue diet!

      • Tom Degan said

        I have to concede your point. The guy is in his fifties and could stand to lose more-than-a-few pounds. I wast him around for a very long time.

        peace….

        Tom Degan

        • Gary Weiss said

          Since he touted the Cuban health care system so highly compared to ours, I’d like to see him spend a month in one of their hospitals and then report to us about how wonderful their health system is. If he survives, he just might have a different story to tell.

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