What Does Health Care Reform Mean To You?

Well, the ink is dry on our nations most sweeping piece of Health Care legislation to come out of Washington since Social Security and now it's time for the experts to figure out what it all means.  There's only one problem, the folks in Congress who voted for it aren't quite sure what's in the over 2,500 page mammoth bill but there are some significant changes as a result of passage that we can outline here.  With that in mind, we won't know the true extent to which this law with alter the way we do business for months to come.  The things that no one is in disagreement about in this Bill is that it's riddled with new mandates, taxes, penalties, compliance requirements,  price fixes, Medicare cuts, Medicaid expansion and administrative burdens that will forever change the face of business.

There are various time-lines and important benchmarks set forth in this legislation that can lend to a great deal of confusion.  So, with that said, let's look at some FAQ's:

• Will employers and individuals see premiums increase as a result of health care reform?

 In compliance with the guidelines and requirements of the new health care law required by September 23, 2010, insurance carriers will modify policyholder benefits accordingly. With these adjustments to policy benefits, it is probable that an increase in premium costs will occur. Beginning in 2014, premium prices cannot be based on a customer’s gender or health status. Until then, current premium pricing will apply.

• Are there annual or lifetime maximums on coverage under the new law?

Effective September 23, 2010, there are no lifetime maximum limits on coverage. In addition, there will be no annual limits on group plans. For individual plans, annual limits may be allowed based on what Health and Human Services deems reasonable. This information is not yet available.

• When are employees able to have their dependents covered until they are 26?

Effective September 23, 2010, the law states that customers will be able to have dependent coverage for their married AND unmarried children up to the age of 26. The requirement is applicable even if the child is not a tax dependent. The law does not specifically include spouses of married children. There is no requirement to cover children of covered dependent children (i.e., grandchildren).

• Under the new law, do pre‐existing conditions no longer matter?

Effective September 23, 2010, insurance companies cannot limit coverage for children on individual or group policies with pre‐existing medical conditions. For adults with individual policies, this provision goes into effect in 2014.

• Under health care reform, what happens to rescission?

Effective September 23, 2010, rescissions will occur only in cases of customer fraud or intentional misrepresentation.

• Is it true that anyone who applies for coverage will be issued coverage?

Under the Guarantee Issue provision, effective in 2014, anyone who applies for coverage must be issued coverage.

• How will this new law affect MSAs/HSAs?

At this point, the only change we are aware of is the tax penalty increase from 10 percent to 20 percent for “non‐qualified” expense withdrawals.

If you would like to find out more about how Health Care Reform effects you and your business email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com Thanks

Lehigh Valley Business Owners Speak Out On Health Care Reform

It seem like every day we're bombarded with some sort of poll.  On the topic of health care reform, there's been literally hundreds of polls over the past twelve months.  Many of those polls have varying questions to test the poll takers perception of health care reform on many different levels, as well as, gauge the overall validity.  However, one thing is certain about the results, they've been pretty consistent in showing that a majority of Americans aren't in favor of a government-run option for health care reform.  So, I decided to put together my own poll of Lehigh Valley owners and entrepreneurs to see where they fell in relation to these national polls.  Some of the results did, in fact, surprise me.  However, by-and-large the results were in line with what I suspected.

Now, before I get into the individual results, a little bit of a disclaimer.  I'm not proposing that this sampling is scientific or even broad-based in it's application to be representative of all Americans.  However, I do feel the results of local Lehigh Valley owners of small businesses are pertinent and valuable to share.   Here's how the numbers shape up:  614 individuals were sent the email to take this survey and out of those, 44 actually took it with about a 14% participation rate.  Not scientific by any means but helpful overall.

For example, when asked whether or not they favored reforming the existing health insurance industry or replacing it with a government run option similar to Medicare, an overwhelming majority (88.64%) chose - reform the existing insurance industry.  I found this very helpful because when you listen to those in Washington who are trying to sell this to the American people, they do it with demagoguery and attacks of evil health insurance companies.  However, this survey question illustrates that Lehigh Valley business owners trust the existing system enough to want to create reforms from within.  This is a more constructive way to go about reform; building upon the strengths and reforming what's not working.  Make no mistake, there's a lot of good in the current system.  When respondents were ask to further clarify this by answering the question of who they felt more confident in managing and overseeing the health insurance industry, government or the private insurance carriers, overwhelmingly they chose the private sector by a margin of 80.95%.

Finally, when respondents were asked to identify the single biggest factor affecting health care today, pre-existing conditions, cost containment, malpractice liability, access to health insurance or affordable health insurance, none (0) chose access as being an issue at all.  Doesn't this surprise you since all we've heard for over a year is that Americans are denied access to health insurance?  Now, affordable health insurance did top the list at 38.64% of respondents.  The important take away from this is that access and affordability don't necessarily go hand-in-hand. 

As you review the results of this survey, you come away with a pretty clear picture that Lehigh Valley small businesses would rather not scrap the health insurance industry altogether but rather change what's not working.  Share your feelings on health insurance reform by emailing me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com

Typical Washingtom Mistake: Asking The Wrong Question

I had the unusual opportunity, because of inclement weather, to watch much of the recent health care reform summit. After all, I do have a vested interest in the outcome. I listened intently from both sides about positions that, quite frankly, to the more than casual observer like me, are nothing new.  However, I was struck by the presupposition which has become the basis for the entire discussion on health care reform. That is, what part of the current legislation President Obama has put forward can they find common ground on? At first blush, it's sounds like a perfectly reasonable strategy. Then it struck me! We're asking the wrong question entirely. The question in Washington shouldn't be what do the Republicans like in the current proposal that they can support and find common ground on. Instead, the question should be. What, in our current health care system can we agree is good and, therefore, worthy of building upon? A natural follow-up question to that would be. What's broken that needs fixing? Democrats would argue that they are doing exactly that - fixing what's broken. However, their proposal is too far reaching, overly intrusive and would upset the delicate balance between proper government oversight and the free-market system.

Most, if not all Americans believe that our health care system is one of the best in the world - if not the best! So why should we take the approach that the whole system needs to be scraped in favor of a government-run alternative. There are many areas in the current health care system that are flawed and in need of change and restructuring so why not build on that framework for true effective reform? I'm always struck when an important foreign dignitary announces that they will be flying to the United States to have some sort of medical procedure done. That's not an accident by any means. They know that there best chance of medical success lies in their treatment in the United States. Indeed, our very Congressman and Senators take full advantage of all our amazing medical technological advancements. You don't see any one of them requesting to get treatment in another country. No, I'm afraid this is more about power and making history for the Democrat party rather then real, substantive change for all Americans.  That's really a shame because we do have the ability to make significant change.

If you're genuinely concerned about obtaining affordable health insurance for you or your family then email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com

President Obama: Acme Health Plans

In the recent health care summit that the President presided over, he made mention several times to "Acme Health Plans' when referring to High Deductible Health Plans (HDHP). This is just further evidence of Washington's elitist attitude toward health care options that don't conform to their view of the way the world should operate. Furthermore, his plan would all but do away with the incentives for Health Savings Accounts, therefore, rendering them a thing of the past. And for good reason. In order to pay for this massive cash cow, he has to take away the tax advantages associated with Health Savings Accounts. Instead, he should be revising the tax code to allow for individuals to deduct the amount of out-of-pocket medical expenses they incur throughout the year for co-pays and the like. Right now, the tax favor-ability only applies to individuals with Health Savings Accounts and employer-sponsored health plans.

I personally have many clients who have made the choice of going to a higher deductible plan because it made sense for them and their families.  Therefore, I find it offensive to make this characterization! To somehow suggest that individuals that choose to take a higher deductible to lower there monthly premium are actually buying "Acme Health Insurance" is just plain wrong and disingenuous on the part of the President and those who support their plan. There are many Americans that want the comfort of knowing that catastrophic medical claims would be taken care of under a high deductible health plan but don't mind paying for the smaller expenses such as office visits and prescription drugs out-of-pocket.  Especially, if the expenses are paid for out of a tax-free savings account.  To some individuals, prescription drugs may be a very big expense so a plan with a richer Rx component would be better for them.

There's a basic principal at work here that those in Congress are incapable understanding because they don't know health care and that is, the higher the deductible the lower the monthly premiums. Conversely, the lower the deductible the higher the premium. Those that choose higher deductible health plans would rather see the savings in monthly premium because that don't use the health care system that heavily. However, if they do have a catastrophic claims it's covered - many times at 100% with lifetime limits in upwards of 5 to 8 million dollars. All of these plans are provided by reputable, well-known companies like Aetna, United Health Care, Assurant Health, Health America, Capital Blue Cross and many more. It's just pain ignorance to imply that these plans are "Acme Health Plans". They are, in fact, a legitimate health care cost-reduction driver. The President and Democrats seem to be talking out of both sides of their mouths when they highlight how many Americans claim medical bankruptcy because of so-called catastrophic claims, while at the same time, look down upon a plan that allows for this very coverage for individuals to actually avoid bankruptcy.

If you'd like to understand more about how High Deductible Health Plans with Health Savings Accounts might benefit you or your company then email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com 

Confidence In Our Goverment To Manage Health Care?

I listened very intently as the President made his passionate plea for Congress to act on and pass the current health care legislation.  He spoke of the plight of millions of people who are currently without health insurance.  He also spoke about those that have serious medical conditions that either prohibit them from getting coverage or are in jeopardy of loosing coverage.  There's no doubt that these stories tug at the heartstrings of every American.  The President also made a statement that really hit me in a very profound way.  He said that the American people are waiting for them [the federal government] to act.  Moreover, that our future, yours and mine, depends on whether or not they act.

With all do respect, Mr. President, I think it's terribly arrogant to think that you, and those in Washington, can somehow take better care of my family then I can.  After all, you don't even know me or anyone in my family.  Aside from the few Americans you've spoken to about their plight with the current health care system, you really don't know anything about the rest of us.  And what in the federal governments history of implementing programs and services can you point to that is an overwhelming success, and therefore, warrants pursuing your proposal?  Isn't that what you're really saying, that the federal government is the only mechanism to bring about effective reform?  It seems to me that the federal government has a long-standing history of exactly the opposite - complete failure regardless of the party in charge! 

Don't take my word for it, let's look at some simple facts.  Over the last 70 years, the federal government has tried it's hand at many different business endeavors such as, transportation (AMTRAK), package delivery (USPS), health care (Medicare), welfare, food distribution (Food Stamps), the auto industry, retirement planning, financial institutions and many more.  Let's examine just a few that many Americans would be very familiar with.

First, we have the nation-wide package delivery system called the United States Postal Service.  The USPS hasn't actually generated any sort of profit for years and the recent announcement of canceling Saturday deliveries came as no surprise.  The fact is, that long before the popularity of email, the USPS was in financial peril.  If it weren't for a constant stream of funding from Congress - they would have to close their doors completely.

Secondly, we have the federal governments attempt at providing transportation in - Amtrak.  Again, if it weren't for the constant stream of operating capital supplied by Congress, this form of transportation would be gone.  I happen to believe that a high-speed rail system is vital to the growth of our nation and our economy but I don't have faith in the governments ability to make it happen.  If you look at how we rank around the world with respect to well operated high-speed rail systems we are at the bottom of the list.

Lastly, let's look at the federal governments fifty year plus experiment with a health care delivery system called Medicare.  Ladies and gentlemen, I don't care whether you're a Democrat, Republican or Independent.  We can all look to the current system of health care for seniors and consider it a failure on so many levels.  The President himself points out the need to provide massive funding to keep Medicare solvent for only another 10 years.  Most seniors are grateful to have the kind of coverage they have with Medicare but most cite the unending barrage of red tape, changes in regulations, cost and coverage as some of the biggest problems with the system.  The rules governing Medicare are so enormous that brokers like myself are required to go through a separate certification process just to be able to offer Medicare Advantage Plans.  After going through it, I understand why.

I haven't yet mentioned one other huge factor with all these Federal Government attempts at private sector ventures, they become huge political footballs for those who find themselves in power.  You need to ask yourself, is that what I really want for my health care?  Polls overwhelming show that the American people want some sort of health insurance reform.  But I think an even better question to ask the America people is, do they have complete faith in our federal government to run and manage the health insurance industry?  Or would they rather it be left to the health insurance carriers like Aetna, Health America, United Health Care and Capital Blue Cross?  The over-whelming response has to be - no to the federal government!  Base your decision on history - not on sound bites or talking points.  I do believe that there is a healthy combination of government and private sector reforms that would bring about meaningful change.  If you're interested to find out what those ideas are - email me.

Whether you agree or disagree with me I'd like to hear you make your case as to why or why not the Federal Government is better suited to run our health care system by emailing me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com Thanks