What Election 2012 Means To Health Insurance


Official portrait of United States Health and ...
Official portrait of United States Health and Human Services Secretary . (Photo credit: Wikipedia)

What is it called when you spend over $6,000,000 and nothing changes?   Oh yes, it is called, “Democracy.”

On November 6, after months of the most divisive rhetoric that I have heard in my life, Americans have made their desires known.  There has been no change in  our political leadership.  The same men are President, Speaker of the House and Senate Leader that were in office last week.  The Republicans control the House of Representatives while the Democrats control the Senate and White House.

I must admit that I got most of what I was hoping for out of this election.

I am not a huge fan of Obama but as long as at least one house of congress is controlled by the opposite party, he cannot force his agenda on America like he did during his first 2 years.

My only regret is that as of today, America has to deal with the rules for health insurance that Kathleen Sebelius  makes.  My vote against Obama was not made against him personally.  I figured that one lying politician in the White House was just as good as another lying politician.  My vote against Obama was a protest against his choice for Secretary of Health and Human Services.

The most common phrase in the Patient’s Protection and Affordable Care Act is not, “Congress shall…”  It is, “The Secretary shall…”  The elected 111th congress ceded it legislative rights and responsibilities to an appointed member of the Executive branch of government.

I am not an economist.  I cannot speak intelligently about the economy or the best way to get Americans back to work.  However, I have spent over 25 years working with health insurance.

I am not a psychic.  I can not say with certainty what is going to happen to insurance in the distant future.  However, I can predict what is going to happen now that the election is over based on current law.

MANDATED HEALTH INSURANCE

In June of 2012, the U.S. Supreme Court ruled that the mandate for every American to buy health insurance or pay a penalty tax was constitutional.  The court said that government did not have the authority to force people to buy a specific product but congress does have the authority to levy taxes on American citizens.  On November 6, Americans confirmed their decision by giving the man who lobbied for that mandate another 4 years of power.

By January, 2014, every American will have to purchase a government approved “Essential Benefit” plan.

ESSENTIAL BENEFIT PLANS

The PPACA requires the Secretary of Health and Human Services to define “Essential Benefit” plans.  Congress dictated 10 areas that must be covered by these plans but gave the Secretary of HHS freedom to require additional levels of coverage.

Congress also dictated the form that the minimum insurance plans must take.  The graphic to the left illustrates what your health insurance plan choices will be in 2014.

Obamacare’s mandate only requires Americans to purchase the BRONZE plan.  It will be the least expensive, however, it only covers 60% of your medical bills after you have paid the $2000 deductible.  If you do not have sufficient savings to pay what the BRONZE plan does not, you will need to choose between paying for a better plan, buying health insurance supplement or risking medical bills.

HEALTH INSURANCE EXCHANGES

If you get your health insurance through your employer, you will not have to be concerned about the new Health Insurance Exchanges.  The only group plans that will be sold will automatically comply with the “Essential Benefit” rules.

If your employer does not offer health insurance, you are a part-time employee or you are responsible for your own health insurance, you will either get your health insurance through an insurance agent or one of the new Health Insurance Exchanges.

Buying health insurance through a Health Insurance Exchange is supposed to be a similar experience to doing your Christmas shopping on the internet.  Once you log onto the site, you will be able to choose which “Essential Benefit” plan you want and purchase it.

The problem is their will be no live sales-person to answer your questions.  If you want help, you will need to contact either an insurance agent or a “Navigator.”

The Health Insurance Exchanges are supposed to be ready to go by October of 2013.  However, that deadline may or may not be met.  States have until November 16 to notify HHS if they are going to establish their own exchange or rely on the federal government.  As of today, only 14 of the 50 states have established exchanges.  Nine states have already informed HHS that they have no intentions of establishing exchanges.  Twenty-seven states have not committed either way.

The PPACA gives states the option to set up their own exchange but requires HHS to implement a federal exchange if they refuse.  If a state develops a plan that works better than the Health Insurance Exchanges in the future, they are allowed to opt out of the system in 2017.  Until then, however, they have no choice.

POTENTIAL DELAY

Now that the election is over, the Secretary of Health and Human Services is expected to start throwing her weight around again.  During the presidential campaign, she was pretty quite.  Now that Obama has been re-elected, she is free to start issuing her rules again like she did in 2010 and 2011.  The question is, “Is there enough time?”

In order to be in compliance with the will of congress, HHS must do the following.

  1. Define “Essential Benefit” plans so that insurance companies can build the plans and price them correctly.
  2. Build a separate exchange for each state taking into account each state’s insurance laws and mandated coverages.
  3. Educate Navigators and Insurance Agents so they can help the public.
  4. Promote the new Health Insurance Exchanges so that Americans know how to purchase the new mandated “Essential Benefit” plans.

HHS has said publicly that everything is on schedule to be ready by the first of October, 2013 when the Health Insurance Exchanges are scheduled to be operational.

Unfortunately, the Obama Administration does not have a stellar track-record of meeting deadlines.  Almost 25% of the deadlines that congress gave for the implementation of the Patient’s Protection and Affordable Care Act have needed to be postponed or ignored.

There is a chance that the Health Insurance Exchanges will be ready to go in October, 2013.  There is also a chance that there is just too much that has to be done and not enough time in which to do it.  If that is the case, the Health Insurance Exchanges could be delayed for another year.

In my weekly email I keep my clients informed on what is happening with health insurance reform.  In 2013 I will have a monthly update on the status of the Health Insurance Exchanges.  Click the banner below to know what is happening and what you are required to do.

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