Street debate on Obamacare with a member of the ‘Progressive’ Left.

Under a clause of President Obama’s health care law called the “Shared Responsibility Penalty“. Employers with 50 or more full-time employees – are now incentivized to reduce full-time worker hours to part-time hours. For many years, a full-time employee was considered an employee who works 40 hours or more per week. Now, because of a ‘new regulation’ written by HHS, a ‘full-time employee’ has been redefined as one who works 30 hours or more per week.

Under the PPACA, any employer with 50 or more full-time employees who does not offer PPACA approved MEC – “Minimal Essential Coverage” must pay an annual, non tax deductible penalty of $2,000 to the IRS for each full-time employee. Starting with the 30th full-time employee on up.

How the PPACA “Shared Responsibility Penalty” is triggered by employers

Beginning in 2014, full-time employees who are not offered MEC – ‘Minimal Essential Coverage’ through their employer and who are not eligible for Medicaid may be eligible for “Advanced Premium Tax Credits”. These ‘Advanced Premium Tax Credits’ will be provided by the taxpayer to artificially lower the extremely expensive coverage that will be provided in the new “Health Insurance Exchanges”.

The PPACA empowers the Internal Revenue Service to provide these ‘Advance Premium Tax Credits’ to childless adult individuals with incomes surpassing 138% and families making up to 400% of the FPL – Federal Poverty Level. Using 2012 FPL, this would mean that individuals making $42,680 annually and families making $92,200 would now qualify for an ‘Advance Premium Tax Credit’ in the new “Health Insurance Exchanges”.

On Wednesday, January 2, 2013 the IRS released proposed new regulations related to the PPACA “Employer Shared Responsibility” rules. There is important new information for employers to consider.

Background

Beginning in 2014, an applicable ‘Large Employer” may be subject to a “Shared Responsibility Payment” under one of two different circumstances:

1. 4980H(a) liability – Applies if an employer does not offer its full-time equivalent employees (and their dependents) MEC – minimum essential coverage, and any full-time employee is certified as having received an ‘Advance Premium Tax Credit’ when purchasing individual health insurance through a public Health Insurance Exchange. In this case, the employer may be liable for a penalty of $2000 per year times the total number of full-time employees (not counting the first 30).

   or

2. 4980H(b) liability – Applies if the employer does offer its full-time employees (and their dependents) MEC – Minimum Essential Coverage – but the plan is ‘unaffordable’. ‘Unaffordable’ means that the employer requires their full-time employees to contribute more than 9.5% of their annual adjusted house hold income towards the cost of self-only MEC coverage, and at least one full-time employee is certified as having received an ‘Advance Premium Tax Credit’ subsidy when purchasing individual health insurance through a public Health Insurance Exchange. In this case, the employer may be liable for a penalty of $3000 per year times the number of full-time employees who are certified to receive, and purchase, subsidized individual health insurance using an ‘Advance Premium Tax Credit’ through a public Health Insurance Exchange.

In summary, employers with 50 or more full-time employees must either pay 90.5% of the cost to provide extremely expensive PPACA approved MEC – which includes the “Essential Health Benefits Package“, 65 Preventative Care tests and must conform to ‘Community Rating’ and ‘Guaranteed Issue” clauses. It is important to note that these clauses have already destroyed the individual health insurance market in all 8 states they were implemented in. Or, the employer must pay a $2,000 fine for each full-time employee (excluding the first 30 full-time employees).

Or, the employer can simply move full-time employees to part-time employees (less than 30 hours). In doing so they would then avoid both the massive cost to insure everyone and the $2,000 fine for not doing so. Tell me, which action do you think employers will take?

There are 5 primary reasons why health insurance premiums have already increased and will continue to increase since the passage of the PPACA. And, why insurers like Aetna are expecting some premiums to double after 2014.

1) My Blue Cross Group clients have received policy renewal rate increases since the passage of the PPACA of up to 46% for the first time in 17 years. See just a few of them here. Their prior premium increases were nothing near this amount. This is not isolated to Blue Cross either. These premium increases are happening in many markets across the United States in both the Individual and Group health insurance markets. Even though Barack Obama promised “my health care plan will save the average family $2,500 on their premium.”

And then their was this quote from Barack Obama: “It’s estimated that your employer’s premiums will fall by as much as 3,000% which means they could give you a raise.”

These premium increases are due in large part to the fact that multiple new “Preventative Care” mandates were imposed upon all “non-grandfathered” health insurance plans as of 9/23/2010 under the PPACA (Patient Protection & Affordable Care Act). A “Non-grandfathered” health insurance plan is a plan that was purchased after the PPACA (a.k.a “Obamacare”) was signed in to law on March 23, 2010. Keep in mind, these were ALL mandated to be covered no later than 1/1/2011 WITHOUT a co pay or a DEDUCTIBLE (a.k.a. “free”). The entire list is as follows:

2.) Now for the policy “design” Mandates. Blue Cross outlines those here:
http://www.resourcebrokerage.com/BCBSupdates22510B/PPACAILInsuredNotification.pdf

3.) The recent inclusion of PPACA mandated “Essential Health Benefits”. Among these are the following:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care
  Source: http://www.uhc.com/united_for_reform_resource_center/health_reform_provisions/essential_health_benefits.htm

4.) Now we come to reason number four. The onerous PPACA mandated Medical Loss Ratios or “MLRs”. This is why health insurance premiums are increasing on “Non-Grand-Fathered” health insurance plans – plans purchased prior to the passage of the PPACA – as well. For full details on these I refer you to the following link from the Heritage Institute. http://www.heritage.org/Research/Reports/2010/01/Squeezing-out-Private-Health-Plans

This has left thousands of American’s either uninsured or without the plan they had prior to the passage of the PPACA. Here is a sample letter that many of my clients received when Guarantee Trust Life insurance company ceased providing health insurance to my clients around the country in 2010.

This is exactly the opposite of what President Obama promised when he said in his speech to the AMA on June 15, 2009 “If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.” Watch him repeat this lie over, and over again below:

Find out the names of the carriers that have left the industry since the passage of the PPACA as well as all the other damage done to the health insurance industry since the passage of the PPACA by reading the new study completed by the Galen Institute on December 1, 2011 entitled “A Radical Restructuring of Health Insurance.”

World Insurance company in Omaha, Nebraska and it’s subsidiary American Republic insurance company is the latest carrier to succumb to the PPACA’s onerous MLR – Medical Loss Ratio requirement. They have now exited the individual market due to the PPACA Medical Loss Ratios. This move left 35,000 former policy holders without their plans. Sadly, the exit of American Republic from the Individual health insurance market also left 110 former employees without a job. Read that story here. Both companies will be purchased by Celtic Insurance company of Chicago Illinois.

This is not an isolated incident in Iowa. Iowa’s Principle Financial Group also exited the health insurance market, leaving 840,000 policy holders without their health insurance plans. Principle was purchased by United Health Group. Thankfully, due to this purchase, United Health Group will be offering new coverage to those formerly insured with Principle Financial Group. Again, you can not keep your plan, even if you like it. President Obama lied. And, as these larger companies gobble up smaller companies, competition is stifled resulting in higher premiums, less choices for consumers and a rapidly growing monopoly.

Other companies that have either closed their doors entirely or stopped selling health insurance since Obamacare was signed into law are as follows:

1.) American National
2.) American Republic
3.) American Medical Security
4.) American Community Mutual
5.) Standard Life & Accident
6.) Principle Financial
7.) nHealth
8.) World Insurance
9.) Unicare
10.) Guarantee Trust Life
11.) Coventry

Other carriers are slowly withdrawing State by State. Page 7 of this white paper dated September 6, 2011 from the North Carolina Department of Insurance details exactly why the majority of all health insurance carriers that offered health insurance in their State have already exited and why even more are considering doing so shortly.

Millions more Americans will lose their Employer Sponsored health insurance after 2014. This is due to the fact that the ‘fine’ (Roberts Tax) on employers – with 50 more more full time employees – who do not offer HHS approved health insurance to their employees is only $2,000 annually. This is far less than the cost to provide health insurance. So, many employers will simply choose to pay the ‘fine’ and push their employees onto the ‘health insurance exchanges’. For the full impact of the PPACA “Roberts Tax” on Individuals, Taxpayers & Employers visit this link.

Historical precedent proves that forcing mandate after mandate and new regulation after regulation on to the health insurance industry does nothing but increase costs. In 1979 there were 252 mandates forced upon the health insurance industry, by 2007 there were nearly 1900. With the implementation of the PPACA  we have tipped the scales at nearly 2,262 mandates. Keep piling them on and costs will continue to rise.

5.) Premiums will continue to increase when the following additional PPACA imposed requirements begin on January 1, 2014

A.) The “minimum actuarial value” requirement that forces insurers to provide more financially generous coverage with fewer co-pays and deductibles.
B.) The “community rating” provision that forces young Americans to pay far more for health insurance in order to subsidize older Americans. This was included in the PPACA even though historical data points to the catastrophic failure of ‘community rating’.
C.) The “guaranteed issue” provision that forces insurers to take all comers, even if they are already sick.
D.) The “essential health benefits” mandate that forces insurers to cover health-care services that many customers wouldn’t otherwise want to pay for.

The sad truth is, even though the President promised ‘affordable health insurance for all Americans‘, many Americans will not receive health insurance at all. In fact, according to the Congressional Budget Office’s latest assessment,
30 million Americans will remain uninsured even after full implementation of the PPACA. Worse yet, 17 million more will simply be enrolled in a Government Welfare program called Medicaid. Many who do receive health insurance will receive a very large tax payer funded subsidy, which will continue to detach the consumer with the true cost of health insurance. To find out what health insurance will cost you in the PPACA ‘Health Insurance Exchanges’ click here.

“Between January 2010 and February 2013, May allegedly received $74,000 in the form of 37 checks, for $2,000 each, disguised as ‘rental payments’; Moshiri, a podiatrist, allegedly received $86,000 in 38 checks pursuant to a purported contract to teach podiatry students; and Maitra allegedly received $68,000 in 34 checks pursuant to a purported teaching contract – and the $228,000 total in alleged kickbacks were all in exchange for their referral of patients to Sacred Heart, the charges allege.
 
“In a recorded conversation last month, Maitra allegedly explained to Administrator A that he used to make Novak ‘so much money’ performing almost daily penile implant procedures on patients, but that he no longer performed as many of those procedures because Medicare had decreased its rates of reimbursement for the procedure. Maitra did not comment on whether the patient need for the procedure had somehow changed, according to the affidavit.”
 
“On March 1, 2013, Administrator A recorded Novak stating that tracheotomies are Sacred Heart’s ‘biggest money maker’ and the hospital can make $160,000 for a tracheotomy if the patient stays 27 days. On March 7, 2013, the Intensive Care Unit case manager told Administrator A that she must often ‘stretch’ a tracheotomy patient’s stay to 28 days to maximize Medicare reimbursements ‘to make Novak happy.’”

Sadly, cases like these are not uncommon in Illinois. In fiscal year 2011, the Department of Health and Human Services reported that in Illinois alone there were:

326 Medicaid fraud investigations
48 were indicted on Medicaid fraud charges
30 were convicted
18 cases of civil settlements/judgments
$47.8 million dollars was recovered in Medicare fraud cases

Until recent legislation was passed in July of 2012, the state of Illinois Medicaid program did not even have a TPA – Third Party Administrator – or other fraud prevention system in place under Rod Blagojevich’s destructive tenure as governor. There was apparently no need for one in Blago’s mind because he was lawless himself. Blago illegally expanded our Illinois Medicaid program to 77,000 illegal aliens – who are still enrolled on our Medicaid program today – and increased the eligibility for one to receive Medicaid to 138% above the Federal poverty level. He did so without our Illinois House or Senate approval.

There is a better way to run Illinois’ Medicaid program. There are proven solutions. They are not new ideas. In fact, if Illinois had emulated Florida’s Medicaid reform program last year, we would have saved $1.1 billion. Or, we could have implemented what former governor Mitch Daniels did to reform Indiana’s Medicaid program. We don’t even need to look to other states for solutions. Our own Jonathan Ingram of the Illinois Policy Institute has penned a recent report that paves the way perfectly for Illinois lawmakers to follow. Will they follow these recommendations? Will Illinois legislators act to protect Illinois’ indigent residents? Or, will they simply auto enroll up to 900,000 more indigent residents – per the President’s health care law – onto a broken, bankrupt, dangerous Medicaid program that is already rationing care? Only time will tell.

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On Thursday April 25, 2013 I returned to the Joe Walsh radio show on Am560 The Answer radio in Chicago. The full interview can be downloaded here in MP3 format.

Mr. Pruitt’s case correctly calls the IRS out for it’s illegal action taken in 2011 where they wrote new law – which they can not do (only Congress can write new law). In 2011, the IRS illegally wrote a new law to bridge the gap between section 1311 and 1321 of the PPACA (a.k.a. Obamacare). As the PPACA was originally written, the IRS is ONLY empowered to provide ‘Advance Health Insurance Tax Credits’ (to artificially lower the cost of PPACA approved health insurance) and to penalize employers who do not provide PPACA approved health insurance in states that have agreed to open a state-based health insurance exchange. As described in section 1311 of the PPACA.

As of today, 26 states have wisely rejected a ‘state-based’ PPACA health insurance exchange. As you may know, the PPACA allows HHS to violate the 10th amendment of the U.S. Constitution and establish a health insurance exchange in these 26 states anyway. Whether the governor or legislature in that state agrees to it or not.

These kinds of PPACA health insurance exchanges are called ‘Federal Fall Back‘ exchanges. These exchanges are described in section 1321 of the PPACA. Section 1321 does not authorize the IRS to provide “Advance Health Insurance Tax Credits’ nor does it authorize the IRS to penalize employers for not offering PPACA approved health insurance in states that have rejected a ‘state-based’ health insurance exchange. And, in turn has a ‘Federal Fall Back‘ exchange installed whether they want one or not.

Michael Cannon from CATO breaks this down in detail in the video below:

More on this important and recently amended lawsuit here: http://www.oag.state.ok.us/oagweb.nsf/0/AC5276FEB11B775586257A7E006F7025!OpenDocument

The role of this TPA is to audit Illinois’ Medicaid program by verifying each year if current Illinois Medicaid recipients are still:

1.) Living in Illinois.
2.) Still living (not dead)
3.) Making the same income they were when they first qualified. If their income levels have increased rendering them no longer eligible, they are to be purged from our Medicaid rolls.

This is a very good thing since a pharmacist from another state recently stated during testimony that “some of our best customers are on the Illinois Medicaid program.”

The results of the first audit of Illinois’ Medicaid rolls are shocking indeed. According to the Chicago Tribune: “Of the first 20,500 recipients screened by an outside contractor, the auditors recommend that 13,709 be removed from the rolls. Yes, that’s two-thirds of the first group screened, flagged as ineligible to receive their current Medicaid benefits. How so? In some cases, the recipients make too much money to qualify. In other cases, they don’t live in Illinois.”

Later in the same article the Tribune states: “Full stop. You may ask, as we do: Why didn’t state officials pluck this low-hanging fruit long ago?” If Illinois officials knew, or suspected, that thousands of people were improperly receiving Medicaid coverage, why didn’t they act years ago to save hundreds of millions of taxpayer dollars?”

Since Julie Hamos - Illinois Department of Healthcare and Family Services chief – is quoted in the article as ‘doesn’t yet know‘. The Illinois Tea Party would like to clear up this mystery for her.

During Democrat Governor Rod Blagojevich’s Governorship, our Illinois Medicaid program was expanded illegally without legislative approval. Adding to the rapid bankruptcy of our Illinois Medicaid program was the fact that under Blago’s Governorship, legal residency status was not required on the Illinois’ “All Kids Covered” Medicaid application. Understand that when we use the term legal residency we are referring to U.S. citizenship. It took an investigation conducted by former Chicago Tribune reporter Dennis Byrne to determine just how many illegal immigrants were enrolled on our “All Kids Covered” program. The shocking answer was 75%.

Whilst the Illinois legislature is to be commended for finally implementing a TPA. They are still ignoring one of the largest drains on our Illinois Medicaid program. One that is a clear violation of Federal law. Namely, the 77,000 illegal immigrants who are still enrolled on our Medicaid program. None of which will be removed under Quinn’s ‘Medicaid Reform’ bill or any other legislation proposed.

According to Kaiser Health News the cost to cover just emergency treatment – much of it related to delivering babies – for more than 100,000 illegal immigrants is a $2 billion drain on the federal Medicaid program annually.  This being the case, one must ask. Why is there not a number 4 question added to the above TPA discovery process which asks: Are you a U.S. citizen?

By allowing thousands of illegal immigrants to stay on Illinois Medicaid program, lawmakers are disenfranchising Illinois residents who are not only legal U.S. citizens but are also medically fragile children. Part of Governor Quinn’s aforementioned ‘Medicaid Reform’ bill was $1.6 billion of top down, authoritative, across the board Medicaid cuts. $15 million of which pertain to medically fragile and technology-dependent children.

Equally disruptive and cold-hearted is the fact that Senate Bill 2840 eliminated Illinois’ Cares Rx program, which provides prescription drug coverage for 180,000 fixed and low income Illinois seniors. Seniors on fixed incomes of less than $16,000 have now lost their drug coverage. Community care and in-home care programs also faced severe cuts, resulting in the loss of services for thousands of seniors across the state. There is a word that properly defines this type of top down, authoritative, across the board cuts – rationing. And it’s about to get much, much worse.

Since 2000, Illinois Medicaid rolls have doubled, from fewer than 1.4 million people to nearly 2.8 million, or more than 1 in 5 Illinoisans. Starting in 2014, the President’s health care law is about to exacerbate this problem exponentially. According to various estimates, from 500,000 to more than 900,000 more Illinois residents will qualify for Medicaid when the PPACA (Obamacare) Medicaid expansion takes effect in 2014. This is because the PPACA expands Medicaid to childless adults for the first time ever. There are more than 15.1 million childless adults in the U.S. who will now be eligible for Medicaid. The PPACA also mandates that another 9 million Americans who already qualify for Medicaid but never enrolled do so beginning in 2014.

The ‘silver lining’ in Chief Justice John Roberts historic ruling on the PPACA last year was that states were now given the option to expand Medicaid. Since then many states have run the numbers and decided against expanding Medicaid. In contrast, Governor Quinn is moving ‘forward’ with Medicaid expansion with Senate Bill 26 which will voluntarily expand Illinois’ Medicaid program to nearly 350,000 additional individuals, who are between the ages of 19 and 64 with incomes under 138% of the Federal Poverty Level. The Dept. of Healthcare and Family Services (HFS) states the cumulative cost of this expansion could exceed $2.9 billion by 2020. The Kaiser Commission on Medicaid and the Uninsured estimates a similar number of $2.4 billion by 2020.

Worse yet, our Illinois Medicaid program already has unpaid bills piling up after lawmakers enacted a budget pushing $2.4 Billion of 2011’s bills into 2012. As they have been doing repeatedly for years now. In fact, on January 30, 2012, the Civic Federation released its “Budget Roadmap” for fiscal year 2012. In it, they highlight the fact that state officials now believe the Illinois Medicaid program will have between $21 and $23 billion in unpaid bills by 2017.

Purging illegal immigrants from our Illinois Medicaid rolls and implementing real reforms such as those proposed by the Illinois Policy Institute will save Illinois’ billions and insure that Illinois’ truly indigent and those with special needs are cared for. Until such reforms are implemented, Illinois Medicaid patients will continue to suffer from low reimbursement rates and long payment delays. Nursing homes and hospitals will continue to run out of money while they wait for reimbursement. And, doctors will continue to turn away poor patients and those with special needs.