Consistent Short Term health insurance returns as ACA Open Enrollment begins

On October 12, 2017 President Donald Trump signed this Executive Order designed to restore consumer choice in the Short Term health insurance marketplace. Short Term health insurance is the only kind of non-ACA (Obamacare) qualified health insurance available in the individual marketplace. While both ACA-qualified health insurance and non-ACA qualified Short Term health insurance policies are considered major medical health insurance, or comprehensive health insurance and both cover major health events in your life, there are important differences between the two. ACA-qualified health plans are guaranteed issue, meaning you cannot be denied coverage based on preexisting conditions. ACA-qualified health insurance plans are also required to cover certain “Essential Health Benefits” that are not covered with non-ACA qualified Short Term health insurance plans. “Essential Health Benefits” that are not covered with Short Term health insurance policies are as follows:

1.) Maternity and newborn care
2.) Mental health and substance use disorder services
3.) ACA mandated Preventive care benefits, routine mammograms and cancer screens ARE COVERED with Consecutive Short Term health insurance policies.
4.) Pediatric Services (including both oral care and vision care).

On March 31, 2017 a preexisting Obama era regulation limited Short Term health insurance coverage to 91 days of policy ownership. This regulation exposed millions of Americans to new and unique risk factors. Prior to March 31, 2017, consumers could purchase Short Term health insurance policies that would last for the entire year without interruption. So, there was no risk of your policy ending in the middle of the year outside of the annual ACA open enrollment period. Those who developed new medical conditions during the first 91 days of Short Term policy ownership, faced the new risk of not being able to qualify for another Short Term policy when their first Short Term policy ended at the end of 91 days. Consumers placed into this difficult position would then be left uninsured and uninsurable in the individual marketplace until the next annual ACA open enrollment period began again when they could once again obtain coverage for preexisting conditions. President Trump’s executive order plans to rectify that situation as soon as the 60 day comment period expires. So, we should be able to once again purchase Short Term health insurance that provides consistent coverage for 365 days as early as January or February of 2018.

Until then, the health insurance industry has responded by creating “Consecutive” Short Term health insurance coverage that will be available for purchase as of 12/01/2017. With these new Short Term health insurance policies from National General Accident and Health you are guaranteed to be issued up to four Consecutive Short Term health insurance policies, each lasting 90 days. You answer health questions only for the first policy which lasts 91 days, then on day 92, National General guarantee issues you a second policy, 90 days later they gaurantee issue you a third policy and finally a fourth policy 90 days later all without evidence of further underwriting and without any new preexisting condition clause. So, you can now remain consistently insured for up to 360 days without answering any new health questions and without the fear of conditions developed during the first, second, third or fourth policies being excluded.

Click here to download the brochure for National General’s Consecutive Short Term health insurance. National General Consecutive Short Term health insurance policies use the Aetna Open Choice PPO network. This network includes access to Northwestern Memorial hospital, University of Chicago Medical Center, Rush University Medical Center and the Ann & Robert H. Lurie Children’s hospital as well as many other hospitals and medical providers nationwide. Search Aetna’s Open Choice PPO network here. For quotes and to apply online for Consecutive Short Term health insurance policies from National General click their logo. Please note: You can only purchase Consecutive Short Term plans AFTER 12/01/2017.


Please note: Because U.S. Senate Republicans failed to repeal or even repair the PPACA (Obamacare) the fine for not having ACA-compliant health insurance is still law and still being enforced by the IRS. This being the case, you will be fined 2.5% of your AGI – Adjusted Gross Income – by the IRS for purchasing non-ACA compliant Short Term health insurance. 

National General Holding Corporation
 is a publicly traded company with $2.5 billion in annual revenue. Their new “Consecutive Guaranteed Issue” Short Term health insurance plans are underwritten by Time Insurance Company (est. in 1892), National Health Insurance Company (incorporated in 1965), Integon National Insurance Company (incorporated in 1987) and Integon Indemnity Corporation (incorporated in 1946). These four companies, together, are authorized to provide health insurance in all 50 states and the District of Columbia.

Short Term health insurance for less than 91 days

If you need short term coverage for less than 91 days you can purchase coverage from United Healthcare which includes their Choice PPO network. To get quotes and apply click the link below.

2018 ACA (Obamacare) Open Enrollment begins on 11/1/2017 and ends on 12/15/2017

The 2018 PPACA (Obamacare) Open Enrollment period begins on November 1, 2017 and ends on December 15, 2017.  During this 45 day window, individuals and families can purchase guaranteed issue individual health insurance (with no preexisting condition exclusions). Coverage will not begin until January 1, 2018. Depending on your projected 2018 MAGI – Modified Adjusted Gross Income – you may qualify for one or more federal health insurance subsidies to lower your premium, deductible, coinsurance and copays. To learn the income levels necessary to qualify for health insurance subsidies scroll down this page. If you do not qualify for subsidies please click “Shop for unsubsidized plans OFF the exchange” below to purchase health insurance directly from the carrier of your choice Questions? Call (630) 674-1551. Out of state? Call toll free (866) 724-7123.

Buying on the exchange? If you do qualify for subsidies please click “Shop for subsidized plans ON the exchange” below. You will be able to pick a plan, get your subsidies and finish the entire process much faster than using alone. HealthSherpa speeds up the process.

unsubsidizedshopping                   subsidizedshopping

Determining your elibility for subsidies

Depending on what you expect your 2018 total household MAGI – Modified Adjusted Gross Income = (after deductions but before taxes) to be, you may qualify for a significant APTC – Advance Premium Tax Credit (federal subsidy) under the new health care law to lower your premiums. You may also qualify for a Cost Sharing subsidy to lower your deductible. If you believe your 2018 total household MAGI will be lower than:

$48,240 for an individual
$64,960 for a couple
$81,680 for a family of three
$98,400 for a family of four
$115,120 for a family of five
$131,840 for a family of six

you will be better off financially by shopping for a plan on the exchange (via in order to receive an Advance Premium Tax Credit and/or a Cost Sharing reduction to reduce the premium and deductibles of either the Bronze, Silver, Gold or Platinum Qualified Health Plans.

Buying on the exchange? If you qualify for a subsidy please click the link below. You will be able to pick a plan, get your subsidy and finish the entire process much faster than working solely with


Shopping from another state? Call us toll free at (866) 724 7123 or scroll down to get quotes from carriers in your state. 

Please note: If your income is lower than the 2018 Federal Poverty Level Information – 2018 FPL in your state, which is less than 138% of the FPL – Federal Poverty Level in states that expanded Medicaid and less than 100% of the FPL in states that did not.  You will be offered Medicaid will not be able to qualify for subsidized health insurance. You can purchase health insurance even if you qualify for Medicaid but you must do so without a subsidy. Click the chart below to determine the current Federal Poverty Level and percentages above it. 2018 Federal Poverty Levels will not be released until late January of 2018 so, the 2017 FPL chart must be used to determine 2018 subsidy eligibility.


Please also note: If you qualify for a federal health insurance subsidy and your state has expanded CHIP – Children’s Health Insurance Plan – under Medicaid you may not be able to insure your children on your policy. will instead send them to Medicaid. You may wish at that juncture to purchase private health insurance at full price for your children instead.

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2018 Individual health plan rates include higher prices for Illinois consumers thanks to Bruce Rauner’s “side hustle”.

Back on August 1, 2017 the Chicago Tribune provided a preview of 2018 annual premium increase requests made by Blue Cross Blue Shield of Illinois for their 2018 individual health insurance plans. Then on October 12, 2017 the U.S. Health and Human Services Department issued a statement reconfirming that former president Barack Obama authorized CSR – “Cost Sharing Reduction” subsidies (which artificially reduce deductibles and co pays for those under 250% of FPL) illegally, unilaterally and unconstitutionally. As such, those subsidies were ended after a thorough review by HHS, the U.S. Treasury, the Office of Management and Budget, and an opinion from the U.S. Attorney General.

Since the Surrender party in the U.S. Senate failed again to repeal and replace the PPACA a.k.a. Obamacare (after promising to do so for 7 years), Obamacare remains the law of the land. Because Obamacare is still the law, health insurers are still obligated to artificially reduce deductibles and co pays for those under 250% of Federal Poverty Level. So, someone still has to pay for these CSR “subsidies”. “Someone” is the 17 million Americans who purchase health insurance in the individual marketplace.

The hope was that time would be allotted for congress to legally appropriate the $7 billion needed to continue CSR subsidies so that additional premium increases would not be levied on self employed consumers seeking individual health insurance coverage.  In fact, Patty Murray and Lamar Alexander are working on such a piece of legislation now.

Instead of waiting for congress to legally appropriate money to continue CSR subsidies, “Social Justice Warrior” Bruce Rauner (who recently became the first U.S. governor to initiate publicly funded abortions for all state employees and for all Medicaid recipients) wasted no time in taking swift action to “protect Obamacare” by directing health insurers offering individual health plans to attach a surcharge—on average 15 percent—to Silver health plan premiums. Silver health plans are the most popular health insurance plans available under Obamacare because they are the only health plans that consumers who (qualify) can receive federal subsidies for. So, what are the end results of Governor Rauner’s “side hustle” to protect Obamacare? Below are the new 2018 approved health insurance premium increases released today via after they were “fundamentally transformed” by “Social Justice Warrior” Bruce Rauner.

BEFORE Bruce’s “side hustle”: 

38.2% for BlueCare Direct HMO Silver plans
14.5% for Blue Precision HMO Silver plans
9.3% for Blue FocusCare HMO plans

5.4% for Blue Choice Preferred Silver PPO plans.


AFTER Bruce’s “side hustle”: 

35% Blue Care Direct HMO Silver plans
28% Blue Precision HMO Silver plan
11% Blue FocusCare HMO Silver plan
13% Blue Choice Preferred PPO Silver plan

Since the Blue Choice Preferred Silver PPO plan includes access to the last individual PPO network that Chicagoland consumers have left to purchase (since we only have three carriers left in Chicagoland that offer individual plans). And, the Blue Precision HMO Silver plan is the most popular individual HMO plan. This means that Illinois consumers who do not qualify for subsidies and have already received on average a 99% increase (and in many cases more than a 200% increase in their individual health insurance plan premiums since 2014) will now pay double the annual premium increases for the two most popular individual health plan options. Namely, the Blue Choice Preferred Silver PPO plan and Blue Precision Silver HMO plan.  Obamacare remains anything but “affordable” and our elected “Republicans” are providing no assistance whatsoever.

Source data:

Click here > BCBSIL2017IndividualPlanRates < to see quotes for a 50 year old male in Will county, Illinois run with today’s effective date.

Click here > Healthcare.govBCBSIL2018IndividualPlanRates < to see quotes for a 50 year old male in Will county, Illinois run with a January 1, 2018 effective date.




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Blue Cross Blue Shield of Illinois proposed 2018 premium increases

Blue Cross Blue Shield of Illinois proposed (not APPROVED) 2018 premium increases for Individual policies are as follows:

38.2% for BlueCare Direct HMO plans
14.5% for Blue Precision HMO plans
9.3% for Blue FocusCare HMO plans
5.4% for Blue Choice Preferred PPO plans.

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New Ted Cruz-like amendment to the Senate Better Care Reconciliation Act literally changes EVERYTHING.

The new amendment to the Senate “Better Care Reconciliation Act” which was derived from the mind of Senator Ted Cruz literally changes EVERYTHING. Conservatives have been clamoring for an escape from the Obamacare regulations which have driven health insurance premiums through the roof  in the last few years.  For the first time, their requests have been clearly and unequivocally answered. The new “Cruz-like” amendment creates two separate health insurance marketplaces. They are the “On-exchange” and “Off-exchange” marketplaces. Below are the differences between these two market places and they are huge differences. These difference should significantly deter the initial worries about churning (moving between both markets) that concerned myself and other health care policy experts. And, they should bring former naysayers like Senator Rand Paul back into the ‘aye’ vote column as well as any other Conservative hold-outs like Senator Mike Lee.

How individual health insurance will work in the ON-exchange marketplace 

ON-exchange plans will contain all of the same PPACA (Obamacare) regulations and consumer protections that have existed since the full implementation of Obamacare on January 1, 2014. This includes all of the Obamacare “Essential Health Benefits” and so long as consumers keep consistent creditable coverage in place (with no lapse of more than 63 days in coverage) preexisting conditions will be covered seamlessly when moving from policy to policy during the annual OEP – Open Enrollment Period – and for those eligible for SEP – Special Enrollment Period – rights (loss of employer sponsored coverage, divorce, marriage, birth of a child, adoption etc.) during the rest of the year.

Here’s where everything changes

Only ON-exchange plans will qualify as creditable coverage. This means that if you purchase OFF-exchange plans, those plans will not count as creditable coverage. So, you would have to wait 6 months before preexisting conditions would be covered if you decided to jump into the ON-exchange marketplace in order to receive a richer benefit plan. This difference should significantly reduce the risk of churning between OFF-exchange plans (when you’re healthy) and ON-exchange plans (when you’re not). So, system-gaming should be significantly thwarted by this intelligent plan design and it should help stabilize pricing in both markets.

Other differences for OFF-exchange plans

OFF-exchange plans will not have to include the Obamacare EHBs – Essential Health Benefits – or other Obamacare provisions like unlimited lifetime maximums, coverage for drug rehab, maternity, sexual reassignment surgery and other mandated benefits. This means that premiums for these OFF-exchange plans will most likely be much lower and they had better be because OFF-exchange plans will not be eligible for ANY federal subsidies a.k.a. APTCs – Advance Premium Tax Credits. In other words, regardless of your income, you will pay the actual premium for health insurance without any assistance from other taxpayers. And, these plans will be medically underwritten which means that you can be denied coverage for these OFF-exchange plans or charged more based on a preexisting condition.

Protections that will still exist for OFF-exchange plans

In order to alleviate the predictable pearl clutching from the naysayers, it must also be understood that in order for a health insurer to be able to offer OFF-exchange plans in a state that allows them, that insurer must also offer ON-exchange plans. Also, in order for a state to be allowed to offer OFF-exchange plans, they must also first have a working state risk mitigation program in place and funded (utilizing the nearly $200 billion included in the Senate Better Care Act for such purposes). This will ensure that those who do not qualify for an OFF-exchange plan due to a preexisting condition have access to a state run high risk pool plan that the state makes available.  This also does not mean that state regulators won’t also require OFF-exchange plans to provide a certain amount of “Essential Health Benefits” that they require to be included. For example, coverage for Cancer and a whole host of other medically necessary benefits.

The point is, it will be up to state regulators to determine this new set of “Essential Heath Benefits” for OFF-exchange plans and not a one-size fits all set of benefits designed by the Federal government and the Special Interest groups who helped them craft them. It’s also important to note that OFF-exchange health plans also do not have to redistribute their profits to other insurers that did not do as well. This too should lead to consistently lower premiums in the OFF-exchange marketplace.
Full repeal is not possible with 52 votes but this is the next best thing
Considering the fact that “full repeal” is NOT possible without 60 votes and that we’re working under the constraints of the Budget Reconciliation process under the Byrd Rule, I’d say Senator Cruz did a very good job providing an off-ramp for Conservatives who were looking for actual relief from Obamacare. Kudos to Senator Cruz and to Conservatives who are still holding out for “full repeal”, it’s time now to support the “Better Care Act”. This is no longer about politics, 44% of counties in our nation will have NO health insurer or only ONE health insurer next year. The time for posturing is OVER.
KUDOS to Seth Chandler at Forbes for doing the heavy lifting on this new amendment.


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Bundled payments are GOOD under Democrats but BAD under Republicans?

It’s been a couple days now since the U.S. Senate released their discussion draft entitled the “Better Care Reconciliation Act of 2017“. And, we’ve all witnessed the predictable hyperbolic, nonsensical, fact-devoid, rhetoric from Democrat Senators like Chuck Schumer and Elizabeth Warren who rile up their base by stating “the Senate health care plan will KILL millions of Americans!” All I can do is Chuckle when I see claims like this because both Chuckles and Fauxcohontas were strident supporters of Obamacare. In fact, other than Barack Obama, I can’t think of two more strident supporters of his “signature legislation“. Yet, when Republicans attempt to adopt one of the key features of Obamacare (albeit on a larger scale) by offering block grant payments to states so that they can better manage their Medicaid population, we are told that this feature will “KILL millions of Americans“. What feature am I referring to? None other than “bundled payments” which were a key feature of the “Pioneer ACO” program under Obamacare.


The concept of bundled payments was first attempted during George W. Bush’s administration but it really gained a foothold in the health care industry under Obamacare. There were 32 “Pioneer ACOs” – Accountable Care Organizations – set up under Obamacare in 2012 and the data we are now receiving only a few years later is very encouraging.  In fact after only 3 full years of operation, the end results of the usage of bundled payments and bonuses for participants who meet quality metrics is quite remarkable. This is why our nation’s largest health insurer adopted a value based bundled payment model and saved employers $10,000 per orthopedic procedure.

According to the most recent press release from CMS – Centers for Medicare and Medicaid Services, “Affordable Care Act Accountable Care Organization initiatives put patients at the center of their care while generating more than $1.29 billion in total Medicare savings since 2012″. Equally impressive is the fact that all 12 participants in the Pioneer Accountable Care Organization Model improved their quality scores from 2012 to 2015 by more than 21 percentage points. Overall quality scores for 9 out of 12 Pioneer participants were more than 90 percent in 2015.” Now, I’m not an expert on the English language but that sounds to me like patients are receiving better care whilst taxpayers are saving a lot of money.  The most compelling evidence (including huge savings and improved patient care) comes from the data collected on joint replacements, Cardiac care, outpatient acute care, inpatient rehab and skilled nursing facilities. How is this possible and why would Democrats not want to try this on a larger scale via Medicaid when faced with this encouraging data?


Bundled payments or “Value based payments” compel medical providers to increase patient care and control costs by offering them the opportunity to operate under a single fixed payment model for medical services rendered. The amount of the bundled payment to a hospital, hospital group or surgical center for example is based upon the most recent data collected pertaining to how much it should cost to treat a certain condition. The hospital is then given a “bundled” or “fixed” payment and required to operate as efficiently as possible in order to meet the goal of not exceeding the bundled payment amount. If they meet the goal and do not exceed the fixed payment amount and actually improve patient care, they are rewarded with monetary bonuses. If they do not achieve the value metrics outlined when the payment is made, they do not. It’s a simple and efficient concept really.

It’s a concept that is so simple and so efficient that  H.H.S. – Heath & Human Services – launched a $10 billion BPCIBundled Payments for Care Initiative – which is now comprised of over 360 organizations and 1,755 providers nationwide. In the first half of 2016 alone, Medicare spent $1.1 billion on care under bundled payment models. The resulting clinical improvements led to $72 million in overall savingsThe next generation of BPCI is expected to go live in 2018 and it will further advance the value-based care model using bundle payments because it works.


A “Block grant” is nothing more than a large payment made from the Federal government to state governments in order to manage their Medicaid population. It is (on a larger scale) exactly what has already been achieved under Value based Bundled payments. So, attempting to replicate the savings and patient care improvements already achieved under the BPCI should not be condemned by Democrats, it should instead be welcomed and encouraged. If something is not done to save Medicaid then there will soon be no Medicaid program left. Medicaid is already the largest line item on nearly every state’s budget and in state’s like Illinois it’s clearly not working. Providers are not being paid and Medicaid recipients are not getting the care they need. So, something has to be done to preserve Medicaid for those who are truly in need and Republicans are leading the way in that effort.

The Republican Senate “Better Care Reconciliation Act” not only provides states with the option of Block Grants but like the BPCI, it incentivizes states to manage their Medicaid population more efficiently by providing an $8 billion reward fund for states that achieve quality performance metrics in improving their Medicaid/CHIP programs. It also eventually caps over all spending so there is a strong impetus for states to start improving care and cutting costs now, not later.


The Republican Senate discussion draft entitled “Better Care Reconciliation Act of 2017” is is not “cruel” nor will it “KILL millions of Americans“. What IS “cruel” is doing nothing to reform Medicaid by leaving it as an open-ended entitlement and a massive unfunded liability. What is also “cruel” is how Obamacare treats our nation’s indigent by relegating them to Medicaid and leaving them with no other option. If you are a single person who lives in a state that expanded Medicaid under Obamacare AND you are unlucky enough to have an annual MAGI – Modified Adjusted Gross Income – of less than $16,248 (138% of FPL – Federal Poverty Level) you are relegated to Medicaid and are left with no other option unless you can afford to pay FULL PRICE for private health insurance. At that income level, such an “option” is not really an option at all.

In contrast, the “Better Care Reconciliation Act of 2017” no longer relegates our nation’s indigent to Medicaid with no other option. Instead, the Act provides a much more compassionate off-ramp for existing Medicaid recipients who may lose Medicaid once Obamacare Medicaid Expansion is eventually repealed. It provides (for the first time in U.S. history) generous Advance Premium Tax Credits to those with incomes below the Federal Poverty Level so that they can purchase private health insurance. Walking into a hospital, doctor or other medical provider’s office with a Blue Cross private health insurance card not only will provide those consumers with a much better chance of actually getting the care they need but it will also ensure that their medical providers will actually get paid. That is not the case with Medicaid which is why so few providers are still willing to accept Medicaid. It’s also why Medicaid is in desperate need of reform.

In addition to this unprecedented act of providing tax credits to those under the Federal Poverty Level, the “Better Care Reconciliation Act” also provides more than $100 billion in assistance to states, health insurers and consumers to better ensure that premiums, co pays and deductibles are more affordable for those that need that assistance. It even continues “Cost Sharing Reduction” subsidies (which help lower deductibles, co pays and coinsurance for those under 250% of FPL) until 2020 even though House Republicans sued the Obama administration for distributing these subsidies without congressional appropriation. If that’s “cruel”, then we all need a new understanding of that word.


Isn’t it interesting how the American Hospital Association endorsed Bundle Payments and how the American Medical Association ‘applauded Alternative Payment Models‘ just last year but both are now “slamming” the Better Care Reconciliation Act and opposing it in group think mode? Why would they do this when the Act simply uses the same concepts they endorsed only a year ago to reform Medicaid?  Maybe these organization have a financial incentive to continue an open-ended entitlement which rewards states one federal dollar for every state dollar they spend. Or, maybe it’s political? Nah, I’m sure all of them read it and I’m sure all of them have no other agenda. I also have some ocean front property I’d like to sell you in Arizona.





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Senate “Better Care Act of 2017” makes important changes to the House American Health Care Act.

UPDATE 07/13/2017 – Revised Senate act released this morning. Read it here. I will outline the changes below where pertinent.

The U.S. Senate released their version of a heath care reform act this morning. It is entitled the “Better Care Reconciliation Act of 2017“.  It makes important changes to the “American Health Care Act” passed by the U.S. House of Reps back on May 4, 2017. Some of these changes I predicted, some I did not. Like the American Health Care Act, the Better Care Act does not achieve a full repeal of Obamacare but as I have explained, we cannot achieve a full repeal without 60 votes in the U.S. Senate. The Act is a far cry from a free market health care plan but taken in total, it further advances our flag and God willing will restore the individual health insurance marketplace to some semblance of normalcy via less regulations and billions and billions of your taxpayer dollars.  Below are the highlights of the Better Care Act of 2017.

Health Insurance Tax Credits will be means tested under this Act

The “American Health Care Act” contained a flat tax credit amount based solely on an applicant’s age. While this is a much simpler way to facilitate tax credits and would involve the I.R.S. as little as possible, it would also require those who are just above the income level necessary to qualify for Medicaid (currently 138% above FPL) to pay significantly more for health insurance than they would have under the P.P.A.C.A. (Obamacare). This is true because Obamacare, like the Better Care Act provides means tested health insurance tax credits. So, the lower your income is the larger your tax credit is. This will ensure that the working poor who are struggling to get off of Medicaid and on to private health insurance will be able to do so for a much more affordable premium than they would have had with the age based tax credits which were the only option included in the American Health Care Act.

Individual and Employer mandates REPEALED

The Better Care Act retains the repeal of both the Individual and the Employer mandates that were included in the American Health Care Act. So, the federal government will no longer be able to force you to purchase insurance using the threat of an I.R.S. penalty.

Obamacare taxes REPEALED and Cadillac Tax “delayed” until 2026

Let’s just be honest. The Cadillac Tax is never going to happen. The employer sponsored health insurance lobbying groups are just too powerful. Can we finally just admit this? That stated, repealing other Obamacare taxes is a great start. Here’s what goes bye-bye:

Tax on health insurance – NO LONGER REPEALED as of 7/13/2017 
Tax on employee health insurance premiums REPEALED 
Tax on health insurance plan benefits REPEALED
Tax on prescription medications REPEALED
Tax on OTC – Over The Counter – medications REPEALED
Tax on Medical Devices REPEALED
Tax on Chronic Care REPEALED
Tax increase on Medicare – NO LONGER REPEALED as of 7/13/2017
Tax on tanning REPEALED
Tax on net investment – NO LONGER REPEALED as of 7/13/2017
Tax on Health Savings Accounts REPEALED
Tax on Flexible Spending Accounts (where contributions are limited) REPEALED
for health insurance company executives REMOVED as of 7/13/2017

Preexisting conditions COVERED but WHERE is the 30% penalty for system gamers?

The American Health Care Act allowed health insurers to apply a 30% underwriting load to those who attempt to wait until they are sick to buy health insurance. This was designed to prevent system gaming which increases the cost for everyone. Whilst the Better Care Act is clear on the fact that preexisting conditions are covered, it is not clear on whether or not insurers will be allowed to apply an underwriting load to system gamers. If this load or something like it is not added to the final legislation during conference you can kiss the entire individual health insurance market goodbye because there will be no reason for anyone to maintain health insurance on a consistent basis. Instead they will jump on an off plans when they “need” them and you can sayonara to the few remaining health insurers left in America. Hello Senators! Hello! McFly??!!!

June 26, 2017 UPDATE: Kudos to Senate Republicans for echoing 1996 HIPAA law and longer standing Department of Labor COBRA rules by adding a 6 month waiting period for coverage of preexisting conditions for those who have a lapse in coverage of more than 63 days. This should significantly curb adverse selection by ensuring that Americans keep consistent health insurance coverage. Some sort of penalty for system gamers who wait until they are sick to buy health insurance had to be included.

Advance Premium Tax Credit eligibility threshold reduced to 350% above FPL

Under Obamacare, an individual with MAGI – Modified Adjusted Gross Income – higher than 400% of FPL – Federal Poverty Level – ($47,520 annually) would not qualify for an APTC – Advance Premium Tax Credit. Under the Better Care Act, that eligibility threshold is reduced to 350% of FPL or $42,300 annually. Below are charts on how APTC eligibility cut-offs will change based on your family size:

APTC eligibility cut-off under Obamacare

$47,520 for an individual
$64,080 for a couple or family of two
$80,640 for a family of three
$97,200 for a family of four
$113,760 for a family of five
$130,320 for a family of six

APTC eligibility cut-off under Better Care Act 

$42,300 for an individual
$57,000 for a couple or family of two
$71,500 for a family of three
$86,300 for a family of four
$101,000 for a family of five
$115,600 for a family of six
You can also use this convenient Federal Poverty Level calculator here.

Advance Premium Tax Credits will now be available to those UNDER poverty line

The Better Care Act will dramatically improve options for more than 2 million Americans who are stuck in a difficult situation in the 19 states that did not expand Medicaid under Obamacare.  These people have incomes that are too small to be eligible for Advance Premium Tax Credits used to buy private health insurance while also having income too high to qualify for Medicaid (incomes between 100% and 138% of Federal Poverty Level). So, they’re stuck between a rock and a hard place. The Better Care Act ensures they will now qualify for Advance Premium Tax Credits to purchase private health insurance. This should lead to a significant improvement in health outcomes for these people.

Cost Sharing Reduction subsidies to continue all the way to 2020

Cost Sharing Reduction subsidies are an additional health insurance subsidy available to those with a MAGI lower than 250% of FPL. These subsidies lower deductibles, co pays, coinsurance and other out-of-pocket expenses the policy holder otherwise would incur. Continuation of these subsidies until 2020 may be the biggest bone of contention between the House and the Senate when the Better Care Act gets to the conference committee. This is because House Republicans sued to stop billions in Cost Sharing Reduction subsidies in 2014 since the money was never appropriated by congress, making those expenditures unconstitutional. A federal district court judge ruled in favor of House Republicans and thus far even though he has the power to stop them, President Trump has continued these subsidies tentatively. The Better Care Act ensures they will continue until the year 2020. The continuation of CSR’s will most likely induce some of the 83 health insurers who have left the individual market to return since the CBO estimates that H.H.S. will pay $7 billion in subsidies to health insurers and that total could rise to $16 billion by 2027 which is why the Better Care Act ends Cost Sharing Reduction subsidies permanently in 2020. That end date could result in a compromise.

Benchmark health plan changed from a “Silver” plan to a “Bronze” plan.

This action alone should be responsible for 15% or more in premium reductions across the board. Heretofore, states have being required to use a more expensive “Silver” plan as their benchmark plan resulting in higher premiums for millions of Americans.


The PPACA (Obamacare) only allows those under the age of 30 to buy Catastrophic plans

States can opt out of EHBs but not Community Rating or Preexisting Conditions

The American Health Care Act allowed states to file for a waiver from the requirement to include EHBs – Essential Health Benefits – as defined by Obamacare and it also allowed them to file a waiver from the Community Rating requirement. The Better Care Act also allows states to file a waiver from EHBs but it does not allow them to file a waiver from the Community Rating requirement. While Community Rating does allow health insurers to vary the premium rate charged for an individual or small group plan based on family size, geography, age and tobacco use. It does not allow health insurers to vary premium rates based on an applicant’s expected health status or claims experience. So, preexisting conditions will continue to be covered in all states regardless of any waivers.

UPDATE 7/23/2017 – Revised Senate act includes revised “Cruz-like” amendment
Even though Senator Cruz’s original amendment did not make it into the revised Senate Act. An amendment that borrows much from his original amendment did. This amendment creates a new fund for those with high medical costs. A health insurer can tap into this new fund by offering at least one Obamacare compliant plan. That insurer can then offer other non-Obamacare compliant plans that do not include the following:

1.) The guaranteed issue requirement waived. These plans can medically underwrite, meaning that an applicant can be denied coverage for one of these plans.
2.) The Community rating requirement waived. These plans can charge one more based on an applicant’s health history or a preexisting condition.
3.) The Essential Health Benefit requirement. These plans do not have to include the PPACA mandated “Essential Health Benefits“.

PLEASE NOTE: Even though these non compliant plans can be sold via this new “Cruz-like” amendment, the revised Senate act still requires ALL states to have a High Risk Pool or other risk abatement program in place for those in the individual health insurance marketplace that are denied coverage for a non-Obamacare compliant plan based on their health history or a preexisting condition. Also, BOTH types of health plans (Obamacare compliant and non-Obamacare compliant) will be included in the same pool of risk. That last distinction there may end up defeating the entire purpose of this new “Cruz-like” amendment since those with lower cost non-Obamacare compliant plans will still end up subsidizing those with Obamacare compliant plans (via higher health insurance premiums) since all will be in the same pool of risk.

Hyde amendment wording is followed when restricting funding for abortion

Health insurance purchased using funding from the Better Care Act cannot cover abortions unless they are performed to save the life of the mother or for victims of rape and incest as originally outlined in the Hyde amendment.  Medical providers are also prohibited from using any funds allocated under this Act for abortions that are not specifically referred to in the Hyde amendment.

Medical Loss Ratios to be determined by the states NOT the Federal government.

Beginning in 2019 the Better Care Act will allow states to design their own MLR calculations. This action may also spur smaller health insurers to return to the individual market since (depending on the state) they may no longer be restricted to a 15% or 20% operating margin. This will also allow states to determine if Broker/Agent commissions should be included in MLR calculations. Just imagine if we had more licensed and experienced broker/agents and less inexperienced, unlicensed Obamacare “Navigators”. Excluding broker/agent commissions from the MLR calculation will once again entice broker/agents to return to the individual marketplace (there are very few of us left who cater to the individual marketplace). This action would save consumers hours and hours of frustrating time on the phone at Time that is far too often spent without resolving issues and sometimes even exacerbating them.

Age based Community Rating restored to a 5 to 1 ratio

The American Health Care Act restored Age Based Community Rating from 3 to 1 as it was mandated under Obamacare to 5 to 1 which should entice the all important young invincibles to reenter the individual health insurance market place. The Better Care Act keeps this 5 to 1 ratio in place. Obamacare placed a heavy burden on younger people by requiring them to pay much more for health insurance in order to subsidize older people. With the Better Care Act, young people should see a significant drop in premiums because the amount they pay for health insurance will no longer be dramatically increased in order to provide a small reduction in premium for Americans in their 50s and 60s. Increasing premiums for young people does nothing but drive them out of the individual marketplace and when they leave, premiums increase for everyone which is exactly what we witnessed under Obamacare.

ERISA amended so states can cooperate with Fed on Small Business Health Plans

The language is a bit vague here but if this Act allows independent contractors or even members of certain trade associations to band together and share risk I am all for it. I do believe that is the intent behind the ERISA amendment in the Better Care Act.

Medicaid Expansion gone by 2023. States have Block Grants or Per Capita options.

Medicaid is unsustainable by all assessments. So, something has to be done to improve it. Throughout the Better Care Act, states are allowed the option to pursue new ways of improving care and controlling costs via flexible design and quality improvement metrics. If states meet those metrics there is an $8 billion fund they can tap into. In addition, the states have the option to design work requirements, none of which can apply to pregnant women, the blind, those attending school or the disabled. But those who can help themselves, should at least try to help themselves so that more money is left for those who are truly in need. The Better Care Act phases out Obamacare Medicaid expansion over the next four years with 90% of current federal funding for the year 2020 and then a reduction in that federal funding by 5% a year until 2023 when Obamacare Medicaid expansion will end for good. Also, single individuals without dependent children will not be allowed to join Medicaid under Obamacare Medicaid expansion after the year 2020. Advance Premium Tax Credits for private health insurance will however be available to those who lose eligibility for Obamacare Medicaid expansion as the program is slowly eliminated. In addition by 2025 Medicaid will be capped at the rate of growth for all goods, not just the inflation rate in medical prices. So, there is a strong impetus for states to start reforming their Medicaid programs now, not later.

UPDATE 7/13/2017 – Disproportionate Share Hospital payments now allowed to fund hospitals for uncompensated care. Calculation methodology is changed from per Medicaid enrollee to per insured.

HSA deposit amounts will now match your total health plan out-of-pocket risk.

This is a no brainer which is why it was also included in the American Health Care Act. In addition, a 60 day grace period will be allotted for those who purchase an HSA – Health Savings Account – qualified HDHP – High Deductible Health Plan – and incur claims before they have a change to set up their HSA. Those claims incurred before the HSA is set up (and after the HDHP is effective) will also be counted as Qualified Medical Expenses under IRS section 502. In addition, both spouses can now make additional make up contributions providing of course that they are both over the age of 55.
UPDATE: 6/30/2017 Senate adds the ability to use your HSA contributions (for the first time ever) to pay for health insurance premiums. Historically, those funds could only be used to pay for Long Term Care health insurance premiums. This is a GREAT addition!


$62 billion appropriated for Long-Term state stability & innovation through 2026 

The following appropriations are made in the Better Care Act to establish or maintain a program or mechanism to provide financial assistance to help high-risk individuals, including by reducing premium costs for such individuals, who have or are projected
to have a high rate of utilization of health services, as measured by cost, and who do not have access to health insurance coverage offered through an employer, enroll
in health insurance coverage under a plan offered in the individual market.

This money can also be used to establish or maintain a program to enter into arrangements with health insurers to help stabilize premiums and promote state health insurance market participation and choice in plans offered in the individual health insurance market place.

It can also be used to provide payments for health care providers for the provision of health care services, as specified by the administrator. To provide assistance to reduce out-of-pocket costs, such as copayments, coinsurance, and deductibles, of individuals enrolled in plans offered in the individual market place.

$8 billion for year 2019
$14 billion for year 2020
$14 billion for year 2021
$6 billion for year 2022
$6 billion for year 2023
$5 billion for year 2024
$5 billion for year 2025
$4 billion for year 2026

$70 billion MORE added to State stability fund under revised act as of 7/13/17.

$50 billion Short-Term assistance to repair coverage access disruption through 2021

The following appropriations are made to fund arrangements with health insurers to address coverage and access disruption and respond to urgent health care needs
within States:

$15 billion for year 2018
$15 billion for year 2019 
$10 billion for year 2020
$10 billion for year 2021

$15 billion individual market stabilization fund for years 2019 through 2021

$5 billion per year is appropriated in order to stabilize premiums and incentivize health insurers to return to the individual marketplace during years 2019, 2020 and 2021.

Additional appropriations also included in the Better Care Act

Additional $422 million appropriated in 2017 for Community Health Centers
$2 billion to combat the opioid crisis. UPDATE: Increased to $45 billion on 6/30/2017
$8 billion for states achieving quality performance metrics in improving Medicaid/CHIP
$500,000,000 appropriated to implement the Better Care Act.

You can read the entire Better Health Care Reconciliation Act of 2017 by clicking below:

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The CBO scores the American Health Care Act and gets it wrong again, really wrong.

The CBO has a 24 year history of misleading the American people on health care policy. The latest example is their most recent assessment of the American Health Care Act which assumes incorrectly (again) that “23 million more people will be uninsured” by 2026 if we repeal and replace the PPACA (Obamacare). They believe this to be true in part because they believe repealing the individual mandate will lead to millions of people not purchasing health insurance because they would no longer face the threat of an IRS penalty for not doing so.

To believe this requires one to ignore evidence, basic math and human nature. For example in 2015, the IRS reported that 6.5 million uninsured filers paid the penalty for not purchasing a “Qualified Health Plan”. 12.7 million more got an exemption from the penalty and an additional 4.2 million were scofflaws and simply ignored it. That equates to 23.4 million people out of an estimated 28.8 million uninsured. That does not prove that the individual mandate compelled these people to purchase health insurance. It simply reinforces what we know about basic math and human nature.

Basic Math and Human Nature

If you understand basic math you understand that the cost of the IRS penalty for not purchasing health insurance (which is 2.5% of your AGI) is still much less expensive than the cost of actually purchasing health insurance. This is especially true since the cost of health insurance in the individual market has increased as high as 105% in some states and more than 200% in others since 2013.

If you understand human nature you understand that when faced with a decision, especially an economic one, people will typically act in their own self-interest. What we predicted in 2009 remains true today. Because the penalty is much smaller than the cost of health insurance, millions will pay the penalty instead, or as recent evidence proves millions more don’t have to and millions more simply refuse to. So, assuming that repealing the individual mandate will lead to “23 million more people being uninsured by 2023” is a false premise. Repealing the individual mandate will do nothing but ensure that those who do not purchase health insurance already will simply no longer be required to pay a penalty to the IRS for continuing to remain uninsured.

AHCA Medicaid reforms make the program more efficient and fair.

In 1965 Medicaid was enacted under President Lyndon Baines Johnson. He signed into law Title XVIII and Title XIX of the Social Security Act. These acts in part provided states with the option of receiving federal funding for providing health care services to low income children, their caretaker relatives, the blind, and individuals with disabilities. Most Americans on both sides of the aisle still believe today that this segment of society should be properly cared for in a system that works fairly and equitably for all recipients. Obamacare massively expanded Medicaid to millions of single, able-bodied adults which not only exploded Medicaid costs (another prediction the CBO got wrong) but in doing so robbed finite resources from those whom the original Medicaid program were designed to help. Namely, those who cannot help themselves. Worse yet, the Obamacare Medicaid expansion population receives a 90% reimbursement rate whilst those who Medicaid was originally designed to help receive only a 50% to 75% reimbursement rate. And this doesn’t even address the billions our Medicaid system pays out to illegal immigrants. How is that fair and equitable? It is not.

This is why the American Health Care Act REFORMS Medicaid by allow states the option to implement intelligent reforms like Indiana and Rhode Island already have and reforms Pennsylvania is trying to implement. The AHCA does not “repeal Medicaid expansion“. It simply ends this unfair reimbursement disparity between those who Medicaid was originally designed to help and those who were added to Medicaid under Obamacare. These reforms are desperately needed since only 20 to 40 cents of each Medicaid dollar actually goes towards patient’s welfare. Surely, we can do better. The American Health Care Act is a good start if we can get the U.S. Senate to pass it. We are rapidly running out of time.


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H.H.S. Director Dr. Tom Price continues implementing “Phase 2” of the AHCA before the bill even passes the U.S. Senate

H.H.S. director Dr. Tom Price continues implementing “Phase 2” of the American Health Care Act even before it passes the U.S. Senate. You know, that “Phase 2” that so many naysayers said would “never happen“. Yeah, that one. Dr. Price is allowing any state who wants a 1332 waiver to apply for one now, even before the American Health Care Act is voted on in the U.S. Senate. 1332 waivers allow states to implement risk mitigation programs like high risk pools so consumers experience immediate premium reduction.

Recent empirical evidence proves that 1332 waivers actually DO reduce premiums

The state of Alaska used a 1332 waiver last year to create their own high risk health insurance pool and saw premium reductions of 33% in their individual health insurance marketplace. A 33% premium decrease is a much better outlook for 2018 than yet another double digit premium increase that states like Virginia, Maryland and Connecticut are facing for 2018 right now, some as high as 60%! Why so high? Because the PPACA (Obamacare) destroyed healthy competition by causing 83 health insurers to leave the marketplace last year. This has left states like Virginia with only two health insurers left and states like Iowa with only one carrier left and possibly no carrier for 2018 if Medica follows through on their threat to throw in the towel after losing $100 million under Obamacare. My home state of Illinois just lost one of only four insurers left that offer individual products when Harken Health called it quits this week after losing $64 million just last year.

This isn’t the first time our H.H.S. & C.M.S. directors have taken corrective action

Last month, Dr. Price and our new C.M.S. director Seema Veerma stopped the reckless practice of Healthcare gov jet issuing policies to Special Enrollment applicants who claimed a ‘loss of income’ without requiring any proof that they actually did lose income before issuing the policy. Now, these Special Enrollment applicants have to prove a ‘loss of income’ before they get a policy. This action alone by Dr. Price and Seema Veerma stopped consumers from attempting to “game the system” by waiting to buy a health plan until they have scheduled medical treatment and then canceling that health plan shortly thereafter which drives up premiums for everyone.

Maybe, just maybe U.S. Senators can take a lesson from Dr. Price and Seema Veerma’s work ethic and pass the American Health Care Act now.  Why now? Because health insurers are required to submit their 2018 plans and premium rates for review by C.M.S. no LATER than June 21, 2017. Time is of the essence here if consumers want to experience premium relief and desperately needed restoration of competition in the individual marketplace before the next open enrollment period begins on Nov. 1, 2017.

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President Trump’s C.M.S. implements common sense reforms to Obamacare Open and Special enrollment periods.

Our new H.H.S. director Dr. Tom Price and our new C.M.S. director Seema Veerma are wasting no time in improving how both the Open and Special enrollment periods work under the PPACA (Obamacare). There will be no more “gaming of the system”. Below are the changes that will both lower premiums and restore desperately needed competition.

1.) The Open Enrollment period will be shortened from 90 days to 45 days. 2018 open enrollment begins on 11/1/2017 and will end on on 12/15/2017 (not January 31, 2018 as has been the rule). This will lead to less adverse selection and lower premiums.

2.) If you are eligible for “Special Enrollment” you now must prove you are before the health insurance policy will be issued. This will also lead to less adverse selection and lower premiums.

3.) If you try to dump a health insurance policy in the middle of the year by stopping payment and then attempt to reapply with the same insurer later in the year, that insurer can now require you to pay up to 3 months of back premiums that you would have owed had you kept your policy in place like you should have all year. This too will lead to less adverse selection and lower premiums.


4.) Health Insurers will finally be allowed some actuarial flexibility when designing new health insurance plans. This will lead to more health plan options with lower premiums. Most importantly it will provide an impetus for some of the 83 health insurers who left the marketplace since 2014 to re-enter and thereby restore some of the desperately needed competition that Obamacare destroyed.

With the new found endorsements of the American Health Care Act – AHCA – by the House Freedom Caucus and Club For Growth we may be getting much more relief from Obamacare very soon. Until then, these two brilliant appointees by President Trump are wasting no time ensuring that Americans get as much relief as possible before the 2018 Obamacare open enrollment period begins. For the 19 million Americans who purchase their own individual health insurance these reliefs can not come soon enough.

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Conservatives must learn Senate rules or Obamacare will never be repealed.

The world’s greatest deliberative body has some really strange rules. Many of these rules can be easily conflated, especially when referring to a “simple majority” which is comprised of only 51 votes. Since there are now 52 Republicans in the U.S. Senate and the effort to repeal Obamacare has reached a fever pitch, I thought it apropos to help clarify the difference between two of the most conflated U.S. Senate rules. They are the “Nuclear Option” and the “Byrd Rule”. The former is used for presidential appointees and the latter is used to pass or repeal laws. Although the two are similar, the latter is a much more difficult rule to follow because it involves the interpretation of the Senate Parliamentarian. Her name is Elizabeth MacDonough. Below I will address some common misconceptions in an effort to clarify the difference between these two rules.

“Republicans got a full repeal bill through in 2015! Why can’t they do the same thing now?”

No, they didn’t. Those who argue that they did need to understand that the 2015 supposed ‘full repeal’ legislation DID NOT PASS the Senate as it was written. Why? Because the Senate Parliamentarian (Elizabeth MacDonough) blocked repeal of IPAB and other non budgetary items because they were considered non budgetary in nature and as such stricken by her as extraneous. Why was Senator Cruz forced to follow the Byrd Rule via Budget Reconciliation in 2015? Because a FULL repeal vote would have required 60 votes in the U.S. Senate under Rule 22 which would require 8 senate Democrat votes which we DID NOT HAVE THEN and we DO NOT HAVE NOW.  This is the necessity of following the same rules to pass the Senate’s “Better Care Reconciliation” Act.

“Just shove it through using the Nuclear Option!” Fantasy versus REALITY.

The other bogus argument is that we can just “use the Nuclear Option” to “shove it through“.  This is NOT possible because the “Nuclear Option” used most recently by Harry Reid to shove through former President Obama’s judicial appointees IS NOT USED to pass LEGISLATION. A SEPARATE senate rule was created to pass legislation passed with only a 51 vote simple majority. It’s called the Byrd Rule (mentioned earlier) which is how we were going to attempt to pass the American Health Care act. This brings us to the next fantasy “well let’s just change the Senate rules then!Changing a Senate rule requires 67 votes which would require 15 Democrat votes in the Senate which we also DO NOT HAVE.

And lastly, the total fantasy argument being made which says Mitch McConnell should just render the 60 vote majority rule or the 67 vote rule to change Senate rules “unconstitutional” which according to this fantasy requires only a simple majority vote (at least 51 Republican senators). In order to make this fantasy a reality, those who propose it actually believe that we would somehow get the support of John McCain and his life partner Lindsey, Jeff Flake, Susan Collins, Lisa Murkowski, Rob Portman, Shelley Moore Capito and Cory Gardner (the last four want to KEEP Medicaid expansion under Obamacare). If you REALLY believe that’s possible, I have some ocean front property in Arizona to sell you.

So, we have to live within the REALITY of how the U.S. Senate works. That’s WHY the Budget Reconciliation process is being used in an effort to pass the “Better Care Reconciliation Act” which if passed will provide desperately needed relief to millions of Americans who are suffering under Obamacare, even though it isn’t a ‘full repeal‘ bill.

Why can’t we just shove it through like the Democrats did in 2009 via Reconciliation? 

Because that didn’t happen. The Democrats had 60 votes to pass the Patient Protection and Affordable Care Act (Obamacare). They met the 60 vote threshold. That bill passed with 60 votes. It was sent back from the Senate to the House and it was signed by former President Obama on March 23, 2010. Where they used reconciliation was shortly thereafter to add things to the PPACA and that bill was also restricted to budgetary items and they had more than a simple majority to pass it at the time. So they were restricted by the same Senate rules as we are today. The difference is they simply had larger majorities in the Senate at that time than we do now.

There is merit to Senator Ted Cruz’s idea of replacing the Senate Parliamentarian 

There is one idea that might actually work and it comes from the brilliant legal mind of Senator Ted Cruz. After tangling with the Senate Parliamentarian back in 2015 when she stripped non budgetary items from what was originally a ‘full repeal‘ bill, Senator Cruz came up with the idea of REPLACING Elizabeth MacDonough (Senate Parliamentarian) with Vice President Mike Pence so that items that were non budgetary in nature may actually pass since they would now have to pass muster of Mike Pence and not her. The question is would Mitch McConnell allow this? He used the “Nuclear Option” earlier this year to seat Justice Neil Gorsuch on the U.S. Supreme Court so he is certainly no stranger to “extreme” Parliamentary maneuvers. If Senate Republicans can’t come to an agreement soon on a final bill, we may just find out how far he’s willing to go.


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