Tag Archives: Health Insurance

Humana Aetna and BCBSTX are canceling plans but this year it’s MUCH different.

On October 2nd President Obama touted an “improved, strong U.S. economy” and the “benefits of Obamacare” at Northwestern University. It all sounded great but this is what I’ve been dealing with today. I’m fielding angry calls from my HumanaOne, Aetna and Blue Cross Blue Shield of Texas clients. All of their policies will be canceled  as of December 31, 2014. See the letters here and here. Cigna is also terminating their pre-2014 plans. This is the second year I’ve had to deal with this but this year it’s much different.

Last year when more than 4 million cancellation notices went out, Americans were able to shop for prices as early as October 1st, granted the initial roll out left much to be desired. In fact, in my opinion it was an unmitigated disaster. Many of my clients spent hours on the phone with Healthcare.gov ‘navigators’ only to find out that their application had then mysteriously disappeared.

Worse yet, because our state’s “C.H.I.P” program was expanded long before Obamacare. The few members of my clientele who actually qualified for an APTC – “Advance Premium Tax Credit”  a.k.a. “subsidy” to artificially lower their premiums were unable to add their children to their subsidized policies. They were instead instructed to enroll their children in Medicaid. Or, they could pay full price for each of their children. The rates for a single child in my state are at least $100 a month for the cheapest “Bronze” plan which includes a $6,000 deductible per person. That’s not exactly ‘affordable care’ when you have three children.

This year, for the first time in 20 years I can not even quote a replacement product because Barack Obama has issued a GAG ORDER to the health insurance industry instructing them not to disclose their January 2015 health insurance rates until after the mid-term elections. This is unprecedented. Normally health insurance premiums are released for public viewing 60 days before the January 1st effective date. Where are the reports on these cancellations and the gag order from NBC, ABC, CBS and CNN? The only news organization that I am aware of that has reported on any of this is the Fox News channel. I can guarantee you one thing, not one of my clients who received a cancellation notice is voting Democrat on Tuesday.

Republicans have outstanding alternatives to this disastrous health care law. The two most recent are the American Health Care Reform Act and the Universal Exchange Plan. Please read them, for it will be up to us to forge a new path forward for the American people and time is of the essence. The insurance company bail outs are temporary and they will expire in 2016. Without a bailout the health insurance industry will pull out of the individual and family health insurance market. Before that happens we need to be able to articulate intelligent, market based alternatives. It’s up to us.

11/4/2014 UPDATE Yesterday, “Snopes” the ‘fact check’ site stated that the actual term ‘Gag Order’ was not used in the original Wall Street Journal article which I link to above. Whilst that is true, Snopes does not disagree with the fact that 2015 health insurance premiums and plans are not available for viewing until after the election. Since the term ‘Gag Order’ was not used in that WSJ post “Snopes” lists my post as ‘false’. Anyone who has access to the internet can visit my health insurance brokerage site HealthInsuranceMentors.com  and then click on the orange ‘Start Shopping Now” button. Then attempt to get a quote for January 1, 2015. You will not be able to. That is the point of this entire piece. Not the fact that the actual term “Gag Order” was not used but the fact that you can not quote premiums for January 1, 2015 and this is what is unprecedented.  That is the point. Certainly the good folks at ‘Snopes’ are intelligent enough to figure that out. Maybe they should take a lesson from USA Today who figured out the point and used the term “Gag Rule” last month. Does the fact that USA Today used the term “Gag Rule” render their entire piece ‘false’? No one with a working cerebral cortex would believe such nonsense.

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Why Are Health Insurance Premiums Still Increasing After The PPACA?

The Obama administration and more specifically HHS Secretary Kathleen Sebellius is repeatedly stating that the reason 6 million health insurance policies are being terminated as of December 30, 2013 is because these policies are ‘skinny plans’ or plans that have large coverage ‘gaps’. She has also stated that the individual and family health insurance market is the ‘Wild West’. In other words a largely unregulated market where consumers can be taken advantage of by unscrupulous insurance companies offering plans that are unregulated and harmful. This could not be further from the truth. Below are the mandated coverage requirements that have already been placed in force upon all policies sold on the market since 9/23/2010 under the PPACA – Patient Protection and Affordable Care Act (Obamacare). In other words, these policies are already PPACA compliant. Yet it is these policies, sold after 9/23/2010 that are being canceled all over the country even though they are already PPACA compliant!

It is also because of the addition of all of the PPACA mandated policy changes listed below that premiums have increased so significantly (as Table 1 illustrates) since 9/23/2010. As you examine all of the mandated coverage parameters below, think for yourself, does this look like the “Wild West”? An unregulated market of limited benefit plans where consumers can be taken advantage of? In fact, it is far from it.

Source: http://www.heritage.org/research/reports/2013/10/enrollment-in-obamacare-exchanges-how-will-your-health-insurance-fare#.UmLMYB-ENzA

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 because of all the PPACA mandated coverage parameters. 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 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. It is 14 million of these individual and family policies that will be terminated before December 30, 2013 even though they are already ‘Obamacare compliant”. Keep in mind, that all of the charges below were mandated to be covered on all individual and family policies no later than 1/1/11 WITHOUT a co pay or DEDUCTIBLE. The entire list is as follows:

2.) Now for the policy “design” mandates. Including the requirement that all plans cover an unlimited lifetime maximum coverage amount for all insured members on policies sold after 9/23/10.
http://www.resourcebrokerage.com/BCBSupdates22510B/PPACAILInsuredNotification.pdf

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

Starting on 1/1/14 all individual and family policies will also have to include the aforementioned 10 “Essential Health Benefits” under the PPACA. The majority of individual health plans on the market today already include 8 or even 9 out of the 10 ‘Essential Health Benefits’ that we are told they need and to not have so they have to be canceled in order not to be ‘substandard’ plans. They must also cover all preexisting conditions without proof of prior coverage. The truth is the vast majority of health insurance policies available on the individual and family market prior to the PPACA already included many of these “Essential Health Benefits”. But even for those that did not, the aforementioned facts prove that the individual and family health insurance market is far from what the Obama administration is falsely calling the “Wild West”. Both the Group and Individual and Family health insurance market has been the most regulated industry in America for decades before the PPACA was passed. It is even more regulated since 9/23/2010 and yet it these PPACA compliant individual and family policies that are being terminated on December 30, 2013. And, the plans that are being offered to these policy holders as a replacement are even more expensive according to main stream media outlets like:

CBS: A charter member of the Main Stream Media finally reports on 2 million Americans who have already lost their health plans:

CBS: They finally report on the true cost of Obamacare approved health insurance:

CBS News: Also reporting on hundreds of thousands losing their health insurance plans because of Obamacare:

CBS News: “Obamacare resulting in dropped coverage and higher premiums.

NBC News: Consumers facing sticker shock and policy cancellation notices due to Obamacare.

Kaiser Health News: Thousand of consumers getting insurance cancellation notices due to health law changes.

NBC News: Thousands getting health insurance cancellation notices.

NBC News: Half a million Californians losing their health insurance plans because they don’t comply with Obamacare.

Millions of individual and family health insurance plans have already been terminated and 16 million more Americans will soon lose their individual health insurance plans because of Obamacare.

The worst part about all of this is that NBC News is now reporting that President Obama knew, as early as July of 2010 that millions of Americans would lose their health insurance plans because of his health care law:

Below is a photocopy of a page of the federal register that proves that the Obama administration knew in 2010 that millions of Americans would lose their Individual & Employer Sponsored health insurance plans because of Obamacare. This regulation was written on purpose so that millions of existing policy holders would be forced to purchase health insurance inside the exchanges instead. The forced addition of millions of these policyholders – all who were assured by president Obama that they could ‘keep their plan‘ – will lower the cost or further subsidize the high cost of insuring sick people who will most certainly be purchasing subsidized health insurance inside the exchanges. In other words this was a deliberate action taken by HHS and a direct violation of the president’s promise.

Proof4.) The onerous PPACA mandated Medical Loss Ratios or “MLRs”. This is another reason why health insurance premiums are increasing on “Non-Grand-Fathered” health insurance plans – plans purchased after the passage of the PPACA. 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 MLRs have left hundreds of 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 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 – entire block purchased by United Healthcare
5.) Standard Life & Accident
6.) Principle Financial
7.) nHealth
8.) World Insurance
9.) Unicare
10.) Guarantee Trust Life
11.) Coventry – rebranded and selling again in 2014 after acquisition by Aetna
12.) Physicians Benefit Trust
13.) Independence Holding Group
14.) Assurant Health – entire block purchased by National General Holdings Corporation
15.) Humana – entire block purchased by Aetna
16.) United Healthcare – out of the exchanges and no longer selling PPACA products
17.) Healthnet – gobbled up by Centene corporation.
18.) Aetna – out of exchanges and no longer selling PPACA products
19.) Harken Health out of business after losing $26 million in one year.
20.) Wellmark – OUT of Obamacare exchange.

Let’s not forget that 20 of the 24 Obamacare ‘co-op’ health insurers are now bankrupt.

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 or 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.

UPDATE: Even though Barack Obama has now delayed this onerous mandate on employers until 2015 the ramifications have already been realized in the latest jobs report with a massive increase in part time workers.

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.

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Small Group Health insurance can be a Small business KILLER.

I received a phone call at my agency on Friday by a client who is a friend of an attorney in Chicago who is paying $1,000 a month for individual employees on his group health insurance plan and nearly $3,000 a month for employees with dependents. And, he only has 5 employees. This phone call provided the impetus behind the following lengthy but valuable commentary.

Group Health Insurance – pros and cons:

Group health insurance provides ‘Guaranteed Insurability’ under 1996 HIPAA Portability law. This means that at the time of policy purchase – termed the ‘Initial Underwriting’ period – all applicants – regardless of their health history – must be provided ‘Guaranteed Insurability’. Meaning that the insurance company must cover each insured regardless of their medical history, height and weight, smoker status etc. And, depending on how long they have had continuous coverage prior to enrollment, the Group insurance policy either has to cover their preexisting conditions immediately – if they provide proof of continuous prior coverage of at least 18 months or more with no lapse in coverage of more than 63 days. Or, if they can not provide such proof, via a ‘Certificate of Creditable Coverage’ their preexisting conditions must be covered after a short waiting period, no longer than 12 months. That’s the pro part.

The con part is, in most states – like Illinois – the underwriter can increase the base health insurance premium required for that group by 67% based on one or more applicant’s adverse health history such as Cancer, Diabetes, Heart Attack, Heart disease etc. And, they can also increase the premiums by 1.25% each year that the employer owns that group policy. In some states like Indiana, underwriters can increase group premiums by as much as 108%. In other states, it’s as high as 300%.

Now, because all employees insured on a group health insurance policy are insured on the same policy, this 67% ‘Underwriting load’ is applied across the board to the premiums required to insure all those insured on the same group policy. Let’s say you have 5 attorneys insured on a small group policy.  4 are perfectly healthy with no adverse health history, normal height and weight and none are smokers. But, one employee is an overweight, diabetic smoker. Even though the 4 other employees are healthy. All of them will pay up to 67% more for their health insurance because they are on the same group policy as our morbidly obese smoker.

The alternative to Small Group Health insurance:

What is the alternative to this common problem experienced by small employers all across the nation?

Very simple. Consider terminating your group health insurance policy. Here’s why I recommend doing so. Since you have less than 20 employees, you are under no obligation to provide Federal COBRA continuation coverage. And, under the aforementioned 1996 HIPAA Portability law, once your employees lose their group health insurance, they are immediately qualified to purchase another “HIPAA qualified” plan elsewhere on a guaranteed issue basis. Meaning, that they can not be denied coverage regardless of the severity of their preexisting medical conditions. Since we have had High Risk Health Insurance pools or guaranteed issue individual mandates in 45 states for many years, your employees with serious preexisting conditions are automatically qualified to purchase health insurance in one of these High Risk Health Insurance Pools because they have now lost their employer sponsored group health insurance ‘to no fault of their own’.

High Risk Health insurance pools:

A high risk health insurance pool is nothing more than a pool of money that the state of Illinois requires insurers who operate in our state to contribute to in order to cover Federally eligible individuals – those who have lost Group health insurance coverage or have exhausted Federal COBRA coverage. Or, individuals who apply for an individual health insurance policy and are denied coverage due to a preexisting condition. In Illinois our high risk pool is called ICHIP. ICHIP is an acronym that stands for the “Illinois Comprehensive Health Insurance Pool” – www.chip.state.il.us

ICHIP is not Medicaid or any other federal or state entitlement program. It is instead a fully insured major medical health insurance policy issued to an individual applicant. High Risk pools are normally administered by the largest health insurance carrier in the state. In our state, that administrator is Blue Cross Blue Shield of Illinois. As such, all Illinois ICHIP policy holders carry a Blue Cross Blue Shield of Illinois insurance ID card and have access to hospitals, physicians, specialist and other Blue Cross PPO network providers. The difference is that whilst Blue Cross will apply their network PPO discounts to all claims that occur within the Blue Cross network. The ultimate payer of ICHIP policy holder claims is the state of Illinois High Risk health insurance pool – which also receives small Federal grants at certain points.

The process for enrolling in ICHIP:

In Illinois, the process involved for former Group insured applicants with adverse health histories to enroll in our state’s high risk health insurance pool is as follows:

The employer or group policy holder would write a signed ‘letter of intent’ on company letterhead to ICHIP stating that is their intent to terminate their group health insurance policy for all employees as of a future date. That letter would be submitted to ICHIP along with that employee’s application. Once the employee is enrolled on ICHIP – again their enrollment is guaranteed – then the group is promptly terminated and the aforementioned ‘Certificate of Creditable Coverage” is submitted to ICHIP as proof that the former Group insured employee has had at least 18 months of prior coverage with no lapse in coverage of more than 63 days. This entitles them to immediate coverage for their preexisting conditions under the aforementioned 1996 Federal HIPAA Portability law

To view the qualification requirements for ICHIP’s Traditional, Medicare and Federally qualified plans click:
http://www.chip.state.il.us/planfacts.html

To view the ICHIP plans brochure click here:
http://www.chip.state.il.us/downloads/broch0111.pdf

To view the premiums required for all ICHIP plans click below and select “HIPPA” before running quotes: http://www.chip.state.il.us/rateinq.nsf/inquiry?openform

To view the Blue Cross PPO network for ICHIP plans click here:
http://www.chip.state.il.us/ppo-listing.html

Isolating your risk factors:

The ICHIP premiums for an individual may be similar or even higher than your current group premium for an individual insured – depending on the deductible you chose. However, the point here is that you are isolating your risk factor by insuring formerly insured group members who have adverse medical histories on ICHIP. This thereby allows you to ‘free up’ other formerly insured group members and allows them to apply for individual health insurance policies which are always far less expensive because the rates are based upon the zip code demographic in which the applicant lives. This puts them into a pool of hundreds of thousands instead of only 5 people on one Small Group policy. In other words, your former employees who do not have adverse health histories will no longer be paying significantly more because they are insured on a Small group policy with an ‘underwriting load’ that is based on one person’s adverse health history.

Securing coverage for healthy employees without creating a taxable event:

One of the major problems with the American health insurance system is that we are still operating on out dated World War 2 era policies that allow employers to deduct their Group Health insurance premiums but do not allow individuals and families to do so when they purchase their own individual health insurance policy outside the Group arena. The solution to this is to put in place an FSA – Flexible Spending Account. Doing so allows the employer to pay for each employees health insurance policy premium – in whole or in part – without creating a tax liability for their employees. Doing so does not violate ERISA laws, Department of Labor laws or any insurance laws that exist now or will exist after 2014.

If you would like to begin the exploration process and find out how much premium this intelligent design option will save your company please contact me.

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