Batman’s Butler Exits Washington and Morgan Stanley Predicts Skyrocketing Health Insurance Premiums for 2014

In a move that caught everyone by surprise on Thursday evening: the White House leaked information advising that Kathleen Sebelius, Secretary of Health and Human Services, would be resigning.

In a 2012 broadcast of America’s Healthcare Advocate, I asked my guest, Dennis Miller (talk radio host and comedian) who he thought the most powerful woman in Washington was.  Without missing a beat, the quick-witted Mr. Miller replied, “That would be Batman’s Butler otherwise known as Kathleen Sebelius, Secretary of Health and Human Services.”

After I regained my composure, Mr. Miller and I discussed how quickly we thought President Obama would throw Kathleen Sebelius under the bus if ObamaCare failed.  The President surprised many by sticking with her after the failed ObamaCare rollout in 2013.

However, with the new Pew research poll showing 80 percent of respondents among registered voters saying a candidate’s stance on ObamaCare was important and 54 percent saying it was very important, it’s easy to understand why it was time for Ms. Sebelius to exit stage left.

Support for ObamaCare fell 37 percent to its lowest level since 2010.  All this on top of a new Morgan Stanley report showing the largest acceleration of premiums in small group and individual rates over the last twelve quarters with analysts concluding increases were largely due to the Affordable Care Act, most specifically community rating (which restricts underwriting for age bans) as well as the new excise tax being levied and increased benefit designs.  As Forbes magazine notes:

For the small group market, among the ten states seeing the biggest increases are: Washington 588%, Pennsylvania 66%, California 37%, Indiana 34%, Kentucky 30%, Colorado 29%, Michigan 27%, Maryland 25%, Missouri 25%, and Nevada 23%.

Obviously, this is not good news for employers with 50 to 150 employees.  I fully expect to see the trend to partially self-funded and captive plans increase significantly over the next year as these plans are exempt from the rating increases and new taxes associated with ACA.

Cary Hall

America’s Healthcare Advocate

ObamaCare Changes The Employer Mandate

With the Politico’s latest prediction that the Democrats will lose control of the Senate and have double-digit losses in the house, it’s not hard to understand why President Obama is rolling back some of the most distasteful parts of the Employer Mandate.

With the new buzz word being “transitional relief,” we now have the Internal Revenue Service guidelines that lay out what employers can expect for implementation in 2015 and 2016.  Please note:  many of these policies will start dialing in at the end of this year as employers renew their health insurance.

The following is a condensed version of the new Internal Revenue Service guidelines that should offer some insight into compliance issues.  If you have questions or concerns after reading the material, please feel free to contact me via email or by calling our offices at 1 800 385-2224.

Cary Hall

America’s Healthcare Advocate


What Has Changed?

Under the Affordable Care Act, all but the smallest employers must offer affordable qualifying health coverage to their employees, or face penalties. However, the details and effective date of this mandate have been shifting. The employer shared responsibility requirements, also known as the “employer mandate,” was originally scheduled to take effect on or after 1/1/14. In July 2013, it was announced that enforcement had been delayed to 1/1/15, and, now, full enforcement has been delayed again. The final rules are complex. The information here provides a high level summary.

On February 10, 2014, the Internal Revenue Service (IRS) and the Department of the Treasury issued a final rule implementing the employer shared responsibility requirements. As part of the final rule, it was announced that medium-sized employers (i.e., those with 50 to 99 full-time or full-time equivalent employees) are now given more time to comply, and large employers (i.e., those with 100 or more full-time or full-time equivalents) can phase in coverage to their entire full-time population over a period of time. Small employers (i.e., those with fewer than 50 full-time or full-time equivalent employees) are generally exempt from this requirement.

Here’s what the final rule means for employers:

- Employers with 50 to 90 full-time or full-time equivalent employees: The requirement now won’t be enforced until plan years with effective dates on or after 1/1/16, if certain conditions are met.
- Employers with 100 or more full-time or full-time equivalent employees: Transitional relief is now available. These employers will need to offer coverage to at least 70 percent of full-time employees in 2015 and at least 95 percent in 2016 and beyond for the 4980H(a) penalty not to be triggered.

What will happen if a large employer (i.e., one with 50 or more full-time or full-time equivalent employees) fails to offer full-time employees (and their dependent children, unless transition relief applies) access to health care coverage

If coverage is not offered, and one or more of the employer’s full-time employees enrolls in subsidized coverage on a public exchange, the employer may be subject to a penalty. This penalty is equal to the total number of full-time employees employed for the preceding year (minus 80 in 2015, and minus 30 in 2016 and thereafter) multiplied by $2,000. (Known as the 4980H(a) penalty)

What will happen if a large employer offers coverage but that coverage is not affordable or does not meet Minimum Value (MV)?

If coverage is not affordable or does not meet MV, and one or more of the employer’s full-time employees enrolls in subsidized coverage on the public exchange, the employer may be subject to a penalty. This penalty is equal to $3,000 for each subsidized full-time employee that obtains subsidized coverage on the public exchange. It is capped at the amount that could be assessed for failing to offer coverage. (Known as the 4980H(b) penalty)

Following is more detail on the final rule, and links to additional resources. Coventry Health Care encourages you to become familiar with information below and prepare to comply with these complex regulatory requirements.
Medium-size employers given more time to comply
Under the final rules, employers with 50 to 99 full-time or full-time equivalent employees will now generally have until plan years beginning on or after 1/1/16 before enforcement of the employer mandate begins. The administration described this additional extension as a form of “transition relief” to help these employers adjust to and comply with these complex requirements.

To be eligible for this relief, employers will be required to provide a certification that they have not reduced their workforce or overall hours of service in order to avoid having to comply with the employer mandate, and that they have not eliminated or materially reduced health coverage. This form will be supplied by the Internal Revenue Service and must be returned to them in order to qualify.

Gradual enforcement for larger employers
The final rules also provided for transition relief for employers with 100 or more full-time or full-time equivalent employees with regard to the offer of coverage penalties (under 4980H(a)). Employers in this category will need to offer coverage to 70 percent of full-time employees (and their dependents, unless the dependent transition relief is applicable) in 2015 and 95 percent in 2016, and beyond, or they will be subject to potential tax penalties under 4980H(a). Note: that 4980H(b) penalties related to affordable/minimum value coverage may still be applicable.

The Next Big Thing for Employers from ObamaCare

The Patient Protection And Affordable Care Act (ObamaCare) requires all group health insurance plans with 100 lives or less to be part of the community ratings system.

Let me take a moment to explain how community rating works.  Let’s pretend that your automobile insurance is community rated.  Your next door neighbor and you share the same insurance carrier (i.e. All State).  However, your next door neighbor has a serious accident, totals his car and a month later is picked up for DUI.  Due to his irresponsible behavior, his new premium shoots up 57 percent.  Under community rating, you also get to share that increase as a result of his actions.

This is exactly how community rating will work for employers with group health insurance plans of 100 lives or less.  So, an employer with healthy employees who has a proactive wellness program in place will now be paying the same rates as an employer with a sicker workforce who does nothing to improve the overall health of his or her group.  And, if there are catastrophic claims, those claims will impact both companies’ health insurance premiums.

In the past, the rating differential was 11:1 or 8:1, meaning carriers could rate groups based on their health and claims experience.  ObamaCare throws that system out and lumps everybody into one category.  The result will be higher premiums for everyone and fewer plan options.  Additionally, if you happen to have a group larger than 100 lives, while you won’t be directly affected by community rating, you will be indirectly affected as the rising costs of small group health insurance impact the overall pool of employer-sponsored plans with specific carriers.

What’s the solution?  Moving to a captive, partially self-funded plan eliminates the community rating requirement and stabilizes premiums by making smaller employers part of a much larger group that functions more efficiently and acts as a shock absorber to catastrophic claims.

Cary Hall

America’s Healthcare Advocate

29/49 And The Little Sisters Of The Poor

In a stunning PR coup, the Obama Administration has decided to oppose Justice Sonia Sotomayor’s injunction regarding the Little Sisters of the Poor and their refusal to provide abortifacients and contraceptives.

It is truly amazing how tone deaf this administration is on certain issues.  As Charles Krauthammer so eloquently stated, “The Obama Administration’s Justice Department couldn’t even go after the Big Sisters of the Poor.  They had to go after the Little Sisters of the Poor. “

When one of the most liberal justices on the Supreme Court (who just happens to be Catholic) rules against the administration, you would think they would get it.  But Solicitor General Donald Verrilli states the Little Sisters of the Poor’s claim has no legal basis.  I would suggest that Mr. Verrilli should rethink his position.  Whether or not the court rules in favor of the Little Sisters of the Poor, I predict this will turn into a PR nightmare for ObamaCare and the administration which, in the long run, they will lose.

What employers can expect in 2014 is the implementation of the employer mandate, requiring those businesses with more than 49 employees to implement health insurance unless their employees only work 29 hours.  We have already seen companies like Kohl’s, Forever 21 and others eliminate full time staff to get under this ruling, and I predict there will be significantly more of the same as we move closer to the implementation of the employer mandate in 2014.  In addition, there are also new companies cropping up that will assist employers in avoiding implementation of the employer mandate.

Expect to see small group health insurance costs rise significantly next year, especially if the individual mandate and the healthcare exchange continue to experience the problems they face now with only 2.1 million people enrolled to date, most of whom are 50 plus with chronic medical conditions.  It is highly unlikely we are going to reach the necessary 7 million enrollees by March of this year.  The much-anticipated flood of young, healthy enrollees is a trickle at best, and there is no light at the end of the tunnel suggesting they will flock to ObamaCare like lemmings to the sea.

In short, be sure some of the claims losses will be absorbed by the government as it has to reimburse carriers for certain shortfalls.  And the rest will be shifted to other policy holders in the employer benefits space.  Not good news for a struggling economy with 90 million Americans out of work.  The progressives’ dream of using ObamaCare to move us closer to a single-payer system has gone down in flames.

Cary Hall

America’s Healthcare Advocate

It’s As Easy As Buying An Airline Ticket? Seriously!?

Everyone’s familiar with the often repeated phrase by the Obama administration and all of its sycophants that buying health insurance on the exchange is going to be as easy as buying an airline ticket on Orbitz.  One thing Kathleen Sebelius has proved with the rollout of the ObamaCare exchange,, is that it’s not as easy as buying an airline ticket.

While the website is much improved today over where it was on November 1, it still does not function as it should.  For example:  you can now obtain your subsidy information and go to the exchange and pick out a policy.  Unfortunately, all of our clients that we have done this for have experienced one of two outcomes:  either the carrier whose policy they picked was never notified of the transaction or, if they were notified of the transaction, the policy selected by our client was not the one submitted by Health and Human Services to the carrier.

Obviously, this last part of the exchange is critical in terms of making it work since clients can’t function without their member id card from the issued policy and carriers can’t get paid unless proper information is transmitted to them.  In short, is still one big damn mess.

However, the good news is that today the federal government extended the sign-up deadline to December 23for January 1 effective policies if you sign up between now and then.  But I’m not sure it really matters since completing the circle by issuing the correct policy to the applicant is not happening.

It will be interesting to see how the national media deals with this issue in January when people who have gone to the exchange and think they have purchased a policy start having medical claims and there is no policy or record of the policy with the carrier to pay for those claims.

Undoubtedly, the Obama administration and Kathleen Sebelius will try to point the finger at the carriers and place the blame with them; however, given the failures of the website, I doubt those accusations will stick.

My advice to anyone thinking of purchasing health insurance through the exchange: find an exchange certified broker who can take you through the process and who can eliminate much of the pain you will experience if you try to do this on your own.

It’s important to remember that IT COSTS YOU NO MORE TO USE A BROKER TO PURCHASE YOUR POLICY ON THE EXCHANGE VERSUS TRYING TO DO IT ON YOUR OWN.  But it could make a huge difference to you down the road if you have a claims and provider issue and have no one to be your advocate.

If you’re looking for a broker in your area, you can go to the National Association of Health Underwriters website,, and click on the Find An Agent link to find a NAHU certified, exchange certified broker in your area who can be your competent and professional advisor.

Cary Hall

America’s Healthcare Advocate

NAHU Newswire December 6, 2013

Some Users May Find Out Enrollment Did Not Go Through.

The Huffington Post Share to FacebookShare to Twitter (12/6, Young) reports “unresolved technical problems on could lead to a rude surprise” next month for those “who think they successfully used the website” to get healthcare coverage. While the site “has improved,” insurance companies “are still getting information on their would-be customers that is garbled and incomplete, and in some cases they are getting no information at all,” which means some users may not actually have succeeded in getting insurance.

Politico Share to FacebookShare to Twitter (12/6, Cheney) says the “much-improved” site “has moved largely beyond blank screens and bugs that consumers encountered, but the worry now centers on the gaping holes in the system’s back end. That can interfere with how insurance companies actually enroll people and get paid.”

Rep. Rogers Calls For Shutdown To Fix Security Issues. The Washington Times Share to FacebookShare to Twitter (12/6) reports in its “Inside Politics” blog that on Thursday, Rep. Mike Rogers (R-MI) said on CNBC’s “Squawk Box” that “the website should be shut down and properly tested to ensure that Obama consumers are protected from potential security risks from across the globe.” Rogers said, “This site doesn’t even function, No. 1, and we know it has never been end-to-end stress tested in a way that the industry would accept anything online. That’s my concern.”

The Hill Share to FacebookShare to Twitter (12/6) reports in its “Healthwatch” blog that Rogers said, “What I would do is shut it down, get it functioning, and then bring in these independent security folks so that you’re not putting at risk millions of millions of Americans’ private and personal information.”

States Receiving Incomplete Medicaid Data From Federal Website. The AP Share to FacebookShare to Twitter (12/6, Adcox) reports that while some people “may be informed they’re eligible for Medicaid and that their information is being sent to state officials to sign them up,” states are saying that they are “receiving incomplete data from the Obama administration.” Last week, in a memo to the 36 states using the Federal website, CMS acknowledged that “the information wasn’t being transferred automatically and” explained that “another system was being developed to send it.” Meanwhile, this technical issue could impact “tens of thousands of Medicaid applicants and represents the latest issue to arise in the rollout of a website that’s been plagued with long waits for users and other glitches.”

The Waterville (ME) Morning Sentinel Share to FacebookShare to Twitter (12/6, Lawlor) reports that on Thursday, Maine Gov. Paul LePage (R) criticized HHS Secretary Kathleen Sebleius “for computer snafus related to the rollout of www. that could prevent some people from receiving MaineCare in 2014.” The piece notes that “the problem involves residents who used the federally run website to sign up for insurance coverage and learned that they qualify for Medicaid.” While they “were supposed to be automatically enrolled in Maine- Care…computer problems prevented states from being notified of the enrollments, leaving the residents in a bureaucratic limbo.”

Nothing Changes on the Exchanges

With more than three years to prepare for the launch of the federal exchange, Health and Human Services’ Kathleen Sebelius has failed (after spending more than half a billion dollars in funding) to create a functional exchange.

The first excuse we heard is that eight million people tried to get on and the server couldn’t handle the capacity.  Let’s contrast that with the private sector and which handles seventy million people a week on their website.

In a country that is the home to Oracle, Microsoft, Apple, Twitter, Facebook and a myriad of technology firms in the Silicon Valley, Ms. Sebelius and Health and Human Services chose the Canadian company, CGI Federal, along with fifty-five other contractors to coordinate and put the health insurance exchange in place.

The Wall Street Journal reports Health and Human Services concedes that there were built-in information, technology and structural defects that had nothing to do with the amount of traffic on the website.  The system was never stress-tested with the carriers to make sure that documents and information flowed smoothly.  And out of the fifty-four thousand currently enrolled nationally (nineteen days after the launch), almost eighty percent of those have been submitted incorrectly to the carriers and actual health insurance policies have not been issued.

While Health and Human Services continues to talk about competition and calls the exchange a marketplace, consumers have learned that prices on the exchange are significantly higher than what can be purchased in the private market.  Now that the budget and debt limit crisis are over, expect the media spotlight to shine on the failure of the Obama exchange rollout.

The Sunday, October 13th, New York Times, had a two page article outlining the failures of the exchange and pointing out that one of their staffers had tried for eleven days making forty attempts to get on the exchange, none of which were successful.  Couple that with Jon Stewart’s searing interview on The Daily Show with Ms. Sebelius, where he bet her he could download every movie ever made before she could access the exchange and followed up by asking her how many people had enrolled (a question she was unable to answer).

If the problems with the exchange can’t be fixed quickly, expect to see Ms. Sebelius click her heels and arrive back in Kansas looking for Toto.  In addition, the President may have to take executive action to roll back the individual mandate or extend the open enrollment period  (either of which will be a definitive blow to his signature legislative program The Patient Protection and Affordable Care Act.

Cary Hall

America’s Healthcare Advocate

Will The Exchanges Be A Giant Mess?

With the launch of ObamaCare on October 1st, the exchanges opened to a giant meltdown.  It appears that Health and Human Services wasn’t prepared for the onslaught of people attempting to get information from its website.  And many spent most of the day with the screen that said:

The System is down at the moment.

We’re working to resolve the issue as soon as possible.  Please try again later.

Since this was the first day of the active launch of this massive new ObamaCare program, it’s not hard to understand that there were problems and glitches.  The bigger question is how will it work in the long run?

One thing is certain:  it’s not going to be as easy as buying an airline ticket.  Navigators, sisters and community outreach organizations were poorly trained with only a few hours of actual experience and no underwriting experience with health insurance products.

Additionally, it wasn’t until late August that Health and Human Services signed a contract with an outside agency to handle claims problems and appeals.  As The Wall Street Journal article, “ObamaCare’s Technology Mess,” notes, “If it was hard to appeal medical claims through your current insurance plan, wait until you have to call a remote federal contractor.”  Additionally, when consumers have attempted to call the 800 number , they’ve had a difficult time getting through and finding someone to help them since the call centers have been swamped.

That’s the bad news.  Now here’s the good news:

1. There’s a huge interest from Americans who want health insurance as demonstrated by the number of hits on the federal website in the first day (U.S. officials recorded 2.8 million visitors to the federal website, ).

2. And, if you’re looking for accurate information about plan designs, costs,   networks,  co-pays, deductibles and what plan is going to fit your budget and your needs, there is one source you can rely on:  the independent health insurance broker and agent.

What most consumers don’t know is that whether you let a broker or agent assist you in buying a policy or whether you try to do it yourself online or through a navigator or sister, the cost is the same.  However, the experience will be vastly different.  A knowledgeable broker or agent with ten or fifteen years’ experience can explain your options and help you make an educated, good decision.  And oh, by the way, if you have that claims problem or provider problem, you have an advocate in the independent broker and agent who is there to help you.

So the choice is yours.  As the consumer, you can try to wrestle this 800-pound gorilla (called the exchange) to the ground or you can let a seasoned pro take the work, worry and hassle out of it by contacting your independent broker and agent.

(If you’d like to know how to contact a broker or agent in your area, go to and select the Find An Agent link which appears in the middle of the site’s home page.)

Cary Hall

America’s Healthcare Advocate

From America’s Healthcare Advocate…

I’m sure many of you have heard the blockbuster announcement from the Department of the Treasury and Health and Human Services last night regarding the delay of the implementation of certain PPACA rules and requirements for employers of 50 or more employees, termed large group.

After reaching out to experts in Washington DC and industry sources, here is what we know:

  • $2,000 Dollar Penalty For Not Offering Health Insurance:  The $2,000 dollar penalty for not offering health insurance to your employees set to go into effect January,2014, has now been delayed to January, 2015.
  • $3,000 Dollar Exchange Penalty:  It is our understanding (but we have not confirmed with our Washington DC sources) that the $3,000 dollar penalty to employers for employees who have gone to the exchange to seek coverage will also be delayed until 2015.  We understand this to be the case but are waiting for confirmation.
  • 9.5 Percent Penalty:  The 9.5 percent rule regarding what employers can charge employees is effectively delayed until 2015 because there is no penalty for non-compliance, meaning if an employee goes to the exchange because the employer is charging more than 9.5 percent, there is no penalty for the employer.
  • Mini-Meds:  Restaurants, hotels, landscaping services–companies that offer mini-med plans—should check their waivers for expiration dates.  We anticipate more information on this ruling in the weeks to come.
  • Employees’ Access To The Premium Tax Credits:  According to Mark J. Mazur, the Assistant Secretary for Tax Policy at the U.S. Department of the Treasury, “ ..Our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).​
  • Increasing Costs For Group Health Insurance:  While the ruling delays the penalties for not offering coverage, costs for group health insurance plans will continue to rise for the following reasons related to PPACA [Notably, it appears this transition relief does not extend to other provisions of the Affordable Care Act effective in 2014, including the 90 day limit on waiting periods, the exchanges (including the premium tax credits available to qualifying individuals), or the individual mandate]:
  1. Community Underwriting For Groups 50 And Below:  Instead of the typical 11-1 ratio carriers currently use to underwrite group and individual plans based on gender, age, geographic region, claims history, etc.– all of this will go away in January as we move to a community underwriting standard of a 3-1 spread vs. the current 11-1 or 8-1 spread used by most carriers.
  2. Taxes:  All of the new taxes will stay in place and do not go away.
  3. Decreasing Pool Of Insured:  As a result of the elimination of the penalties on large group employers and the elimination of the 9.5 percent penalty, there will be more pressure on insurers to raise premiums because they will have a smaller pool of people to distribute losses among.  Costs will not decrease because of the ruling but more than likely will increase above the Congressional Budget Office’s (CBO) projection of 27-30 percent.

In closing, I wanted to get as much information to you as possible as quickly as possible.  There are rumors and innuendos that there will be further rollbacks of regulation between now and October, one of which is the elimination of the penalty for not buying individual health insurance.

In addition, in a little known ruling not publicized in the media, yesterday the Department of the Treasury also rolled back reporting requirements for insurance carriers which required them to report to the IRS both employers and employees who do not have health insurance.   This was the triggering mechanism to put the penalties in place and has been delayed until 2015, which begs the question, how do you penalize an individual for not having health insurance when you don’t really know if the individual has health insurance or not?

All of this points to rising costs.  I guess it’s not going to be as easy as buying an airline ticket.


Cary Hall

America’s Healthcare Advocate

The Top 10 Fallacies Of ObamaCare

These are the most frequently noted misconceptions and/or comments I receive weekly on the America’s Healthcare Advocate Show which broadcasts on 86 affiliates nationally.

  1. With ObamaCare, I’m Going To Get Free Health Insurance                       WRONG.  Health insurance is not free under the Patient Protection and Affordable Care Act (PPACA) also known as ObamaCare.  After you fill out and submit the necessary forms to the IRS through the federal or state exchange websites, you will then find out if you qualify for a subsidy.  Subsidies are available to persons whose income does not exceed 400 percent of the federal poverty level, meaning those at the top of the scale receive less; those at the bottom of the scale receive more.  But it is not free.
  2. I Don’t Have To Take My Employer’s Health Insurance—I Can Go To The Exchange                                                                                                                 If your employer offers a qualified plan, regardless of the size of the company, meaning that plan meets minimum essential benefit requirements at the bronze, silver, gold or platinum level, and your contribution to the premium does not exceed 9.5 percent of your company’s lowest paid employee’s W-2 earnings, you cannot opt out of the employer-sponsored plan and go to the exchange.
  3. I’ll Accept My Employer’s Insurance But My Spouse and Children Are Going To The Exchange                                                                                                This is one of the biggest misconceptions about the implementation of ObamaCare in the country today.  Let me clarify.  If your employer offers a qualified plan and your contribution does not exceed 9.5 percent of your family income, then you cannot go to the exchange and buy health insurance for your spouse and/or children.
  4. I’m Not Going To Purchase Health Insurance; I’ll Just Pay The Penalty         You can decide not to buy health insurance and just pay the penalty.  However, if you are one of the millions of Americans who received an income tax refund from the IRS, your refund will be withheld until the IRS processes the penalty out of it.  Given the IRS’s track record for speedy transactions and the deluge of people who will probably find themselves in this situation, you could be waiting a long time for your refund.
  5. Common Ownership                                                                                               If you’re a business owner with more than 50 employees (i.e. maybe you own a franchise of restaurants in multiple locations where the total number of employees is greater than 50), you may think:  “I’ll form two corporations, which will give me less than 50 employees in each one, and then I won’t have to offer health insurance.” Wrong.  Common Ownership as defined by Sections 414(b), (c), (m), and (o) of the Tax Code applies in this situation and precludes you from obfuscating your responsibilities by dividing your company.  In other words, you are still responsible for offering health insurance and cannot divide the business.  Additionally, you will most certainly raise a red flag with the IRS, Health and Human Services and the Department of Labor and can most likely expect a visit from a federal bureaucrat to audit your business.
  6. ObamaCare Is Going To Lower The Cost Of My Health insurance                 This is totally falseThe Congressional Budget Office (CBO) estimates that individual market premiums are going to be between 27-30% higher in 2014.  The CBO says “[new health care law market reforms will] have a much greater effect on premiums in the non-group [individual] market than in the small group market, and they would have no measurable effect on premiums in the large group market.”
  7. Access To Providers Will Improve With The Implementation Of ObamaCare  Not Really.  There are lots of unintended consequences for providers and hospitals as a result of the passage of PPACA.  In Kansas City and Wichita alone, over 950 employees have been laid off by hospitals like Via Christi, Saint Luke’s and Liberty Hospital.  Liberty Hospital, located in Liberty, Missouri, advised that their 150-person layoff was a direct result of the implementation of PPACA.  So with 44 million new people streaming into the system for health insurance, there will be fewer providers than before.
  8. ObamaCare Is Good For Business                                                                Aside from hospitals and medical providers laying off personnel, we also have examples of major companies like Kohl’s, which has cut the majority of its full time employees to part time (working 28 hours or less), in order to fall below the new 30-hour definition of full time employment so it does not have to offer health insuranceAdditionally, restaurateurs and hoteliers are being particularly hard hit by this legislation in having to offer these costly new benefits.  Policies like this and the new 3.8 percent ObamaCare tax on employers are not helping business.
  9. The President Said If I Like My Health Insurance, I Can Keep It                   Well maybe!  If you had a plan that was grandfathered in by March 23, 2010, then you can keep that plan in place after January 1, 2014.  However, if your plan wasn’t grandfathered in, which probably represents 80 percent of the health insurance plans in this country, then you will be required to buy a new plan that meets the minimum, essential benefits as defined by ObamaCare.
  10. Don’t Worry.  ObamaCare Is Going To Be Repealed                                      The chances of this happening are slim and none.  And slim just left town on the last bus.  With the Democrat controlled Senate and with a Democrat in the White House, there is no way the Republican controlled House of Representatives can force the repeal of ObamaCare.  Get used to it.  It’s going to be with us for a very, very long time.

Health insurance has been commoditized and is now totally controlled by the federal and state governments through the ACA legislation and state run exchanges.  The success or failure of this massive program rests completely with federal and state governments.  Rising costs, bureaucratic inefficiencies, lack of providers and a myriad of other problems that will present themselves, cannot be blamed on the industry anymore.  Welcome to a brave new world.

Cary Hall

America’s Healthcare Advocate

Why the Single-Payer System Won’t Happen

A recent Wall Street Journal article by Daniel P. Kessler opined that we would see a single-payer system in the United States (i.e. government run health care) within the next 6 to 7 years.  While I agree with Mr. Kessler that implementation of a single-payer system has been the dream of Progressives since Harry Truman first tried to implement it in 1948, there are three huge obstacles facing Progressives and Liberal Democrats which I believe will prevent its implementation:

  1. The United States is broke.  We have a $16.8 trillion dollar national debt that is projected to increase to $17.9 trillion dollars next year with little sign that this president will do anything in the way of entitlement reform to reduce it.
  2. The opposition.  If you think there was a great wailing and gnashing of teeth over the passage of ObamaCare and its implementation, imagine what will happen when America is advised that the federal government is taking over the health care system.  The fight would be long and bloody and, without a Democrat majority in the House and Senate as well as a Democrat in the White House, it simply cannot happen.  ObamaCare passed because of the perfect storm.  It will be a long time before there is another one.
  3. The nation’s health care providers.  The last and, perhaps, the largest reason I believe there will not be a single-payer system is this nation’s health care providers.  Health care in this country represents $2.8 trillion dollars that we spend with medical providers–that’s 27 percent more or $750 billion dollars greater than other developed countries with the same per capita high income as the U.S.  If you wonder how that number translates to preventing the implementation of a single-payer system, consider this:  at New York City’s Memorial Sloan-Kettering Cancer Center, 14 administrators are paid over $500,000 dollars a year while 6 administrators make over $1 million dollars a year.  MD Anderson, the country’s leading cancer treatment center, employees 19,000 people while Exxon Mobile in Houston, Texas, employees 14,000.00.  In addition, hospital profits, especially in not-for-profit hospitals, are huge with hospitals charging insurance carriers 30 to 50 percent more than they charge Medicare.  So if you think the health care industry will go quietly into the night and allow the government to impose a federal health care system, consider this:  the Center for Responsive Politics reports pharmaceutical health care product industries combined with organizations representing doctors, hospitals, health services and HMO’s have spent $5.63 billion dollars since 1998 in lobbying Washington while lobbyists for defense and aerospace industries spent $1.53 billion dollars and big oil and gas lobbyists spent $1.3 billion dollars.

While there is no doubt a twinkle in the eye of the Progressives wanting a single-payer system, a reality check shows this would be a long and difficult struggle with little chance of coming to profusion.

Cary Hall

America’s Healthcare Advocate