The Future Of Health Insurance Is Hazy


CrystalI must admit that the batteries in my crystal ball are getting drained after trying to predict what will happen with Obamacare.  It seems that every day something new is announced.  It is hard to tell my clients what is happening with health insurance when the politicians in D.C. who are making all the changes don’t even know what they are going to do.

LESSONS LEARNED FROM PPACA

When the 111th congress forced the Patient’s Protection and Affordable Care Act on America, the 906 page legislation was only a skeleton outline.  Rather than spend the time and political assets to actually frame a law, they ceded the power to make law to the Executive Branch of government.

Together President Obama and his appointed (not elected) Secretary of Health and Human Services were given the power to make and frame law.  They just use a different word for it.  Rather than making law, they make rules and regulations.  Although they see a difference between regulations and laws, there really is no difference.

If they do not like a law that was passed by congress, they just ignore it.  Although PPACA was passed in 2010, in the last 3 years the Obama administration has been late on approximately a quarter of the deadlines.

The most common phrase in PPACA is, “The Secretary Shall…” but apparently Kathleen Sebelius understands that to actually mean, “The Secretary Can…”

  1. The Department of HHS was tardy on regulations for the Multiple Loss Ratio but required insurance companies to meet target dates.
  2. The Department of HHS missed the deadline to create SBC forms to help Americans do comparison shopping for major medical insurance.
  3. President Obama completely suspended work on finding a way to make Title VIII of the law to work.
  4. Recently, the Obama administration announced that the SHOP exchanges to help small business owners help their employees with premiums for health insurance through the new exchanges would be delayed until 2015.

Those who look at Obamacare from a purely political point of view will say that there is nothing good in the law or that everything in the law is the best thing since sliced bread.

The truth is probably somewhere in the middle.  As I view PPACA I see much good coming from it.  I also see many bad elements.

INDIVIDUAL MANDATE

Of all the elements of Obamacare that I find bad, section 5000A is probably the most heinous.  That is the section that is often referred to as the Individual Mandate.  It requires every American to purchase a government approved Essential Benefit Plan or pay a penalty in 2014.

In June of last year the Supreme Court barely allowed the Individual Mandate to remain.  It can only be justified if the penalty is viewed as a tax.

While President Obama was jubilant last summer that the US Supreme Court allowed the Individual Mandate to stand, he insists that the penalty is not a tax.

MEDICARE ADVANTAGE

Recently, I have been approached by several clients who are on Medicare.  There is apparently a great deal of confusion over how PPACA will affect Medicare and the future of the program.

What I can say is that most of the changes to the Medicare system that were made in the PPACA have already happened.   Medicare beneficiaries are now entitled to annual Preventive Exams if they have Part B of Medicare.  If they have Medicare D, changes designed to close the “Donut Hole” over the next 10 years, for those who rely on several medications, are already in effect.

The biggest change that people on Medicare will see in the Medicare Advantage system.  That is the program that allows people to choose to let a private insurance company administer their Medicare insurance rather than the government.  The PPACA completely over-hauled how the Medicare Advantage program would be paid for.

Other than those areas, the PPACA has little impact on people with Medicare.  The law is designed to change the rules for Health Care mainly for Americans under the age of 65 who are not already on Medicare.

POTENTIAL CONFUSION

In October of this year there will be two Open Enrolments.  That could change tomorrow but is not expected to.

The first is the Initial Open Enrollment for non-exempt Americans to enroll in an Essential Benefit Plan regardless of their previous health.  Unless it is also delayed by the President, it is expected to start on October 1.  The Initial Open Enrollment is only scheduled to last until the end of March, 2014 unless the rules are changed again by the Obama Administration like they did with the federal High Risk Pool and state Exchange application dates.

What concerns me is that Medicare’s Annual Open Enrollment is scheduled to occur during the Essential Benefit Plan’s Initial Open Enrollment.

Medicare beneficiaries are allowed 6 weeks to change their Medicare Advantage or Medicare D plan elections from October 16 – December 7.  I am afraid that many Medicare beneficiaries will confuse the two Open Enrolments.

CLARIFICATION

If you or a loved one are already on Medicare, you are exempt from the Individual Mandate.   You are not required to enroll in one of the Essential Benefit Plans through the new exchanges or with your insurance broker.  In fact, you are not required to do anything if you do not want.

However, if you or a loved one are already enrolled in a Medicare Advantage plan, you will be getting renewal information from your current insurance company in August or September.  When you do, make certain that you read it before you throw it away.

Medicare Advantage plans can change from year-to-year.  If the plan you have changes and no longer meets your needs, you will only have the 6 week Annual Open Enrollment in which you may make changes.  If you miss that Open Enrollment, you will be stuck with the changes in coverage for all of 2014.

PREDICTING THE FUTURE

Although PPACA does not make a great deal of changes to the Medicare system, changes to health insurance are not over.

In the President’s proposed budget for 2014 he signals his willingness to make cuts and changes to Original Medicare provided he is allowed to implement new taxes.

Comments made by congressional representatives, from both political parties, suggest that significant changes will be made to Medicare and Medigap in the future.

In the summer of 2009 I spent hours watching committee hearings and debates on C-Span discussing Health Care Reform.  Apparently, that was a waste of my time.

The PPACA was written behind closed doors by the Gang of Six.  It has little, if any, resemblance to the proposed bills that were shown to the public.

The bottom line is that I have learned my lesson about anticipating what will emerge from the politicians in D.C.  Until we have a final law from congress and a president that is willing to do what congress says, Americans have no choice but to remain flexible.

Whether you are 26, 66 or 86 is meaningless.  The only thing that is certain about the future of your health insurance is that it is uncertain.  The politicians are more concerned about pleasing their constituencies than passing laws that are fair and benefit all Americans.

Right now, nobody is able to say what will happen with health insurance for those who are under 65 and those who are already on Medicare.  If you hear a politician or member or the press dogmatically say that something is guaranteed to happen in the future, you can count on the fact that they are just as confused as you.

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