Big Pharma Loses a Drug Pricing Battle for a Change

The new Inflation Reduction Act contains the first-ever provision allowing the federal government to actually negotiate some drug prices instead of paying whatever the greedy pharmaceutical companies demand. The U.S. is the only major country that doesn’t routinely do this, which is why a) non-generic drug prices are often astronomical and b) we pay prices that are multiples of what people in other countries pay.

Needless to say, this did not go unnoticed by the pharmaceutical companies, which have been lobbying and fear-mongering for more than a century to defeat any and all measures to rein in prices and their profits.

So this is a surprising and important victory for the government and all of us. The bill drastically restricts the number of drugs subject to price negotiation, but as Big Pharma knows, this may just be the start.

That’s why they employ 1,500 lobbyists (!!)  and routinely dole out hundreds of millions of dollars in campaign contributions spread liberally (no pun intended) to the campaign war chests of any Member of Congress that will accept the money – which is virtually all of them. This is one of the grossest and most brazen displays of the corruption of our representative government process, literally buying the votes of our elected officials to ensure that their profits are protected far better than the lives, wellbeing and pocketbooks of the public.

So this Democratic victory is not be ignored (no Republicans voted for it). “We’ve been fighting for decades —  decades — for the ability  to negotiate for lower prices,” said Nancy Pelosi. “We cannot undervalue what this legislation does.”

What Does “Out-of-Pocket Maximum” Mean?

Out-of-pocket maximum (OOPM) is the most you have to pay for covered services in a single year, aside from premiums. Once you reach your out-of-pocket max, your plan pays 100 percent of the allowed amount for covered services.

For instance, if you rack up $25,000 in medical bills and your OOPM is $7,000, that’s the maximum you have to pay, while your insurance company has to pay the balance of $18,000.

You’ve no doubt heard about “surprise” medical bills in the hundreds of thousands of dollars, but when you drill into it, that’s almost always because the policyholder used out-of-network doctors and hospitals. If your policy covers out-of-network costs at all, your OOPM is always substantially higher than the OOPM for in-network services, and some medical expenses may not be covered at all. I’ll explain why after I cover the basics of in-network OOPMs.

In-Network OOPM

When the year starts, you’re likely going to have to pay copays (fixed amounts) or coinsurance (a percentage of the bill) when you use routine services such as seeing your primary care provider (PCP). Many policies also include a deductible, usually between $500 and $4,000 that you have to pay before the plan pays anything for certain services, such as outpatient and inpatient hospitalizations. [More jargon: When your plan says that your cost is a $40 copay “before deductible,” that means that your cost is $40 even if you haven’t reached your deductible yet.]

As the year goes on and you rack up bills, you pay your portion in the form of copays, coinsurance or deductibles, until you hit the ceiling – your OOPM. After that, your insurance company is responsible for 100% of the cost of anything and everything your policy covers for the rest of the year.

This example ⬆️ covers a single individual. If there’s two or more people covered under the same policy, the OOPM is usually double the individual OOPM, using the same basic arithmetic as above. Let’s hope you never find yourself worrying about that, ok? 🙏🏼

Here’s where staying in-network becomes crucial. If you use in-network providers, your insurance company and the provider have a contract stating the price of each covered medical service, with an agreement that after you pay your part and insurance pays its part, the medical provider considers themselves paid in full – and they can’t send you any surprise bills. This does not apply to out-of-network situations!

Out-of-Network OOPM

If you choose a medical provider that doesn’t have a contract with your insurance company, they are “out-of-network.” And here’s where the problems start.

The essential reason for in-network contracts is to give the insurance company price certainty for each covered medical service, so its actuaries can plug those prices into their spreadsheets and figure out how much money will be needed to cover all anticipated in-network medical costs. Knowing that tells the insurance company how much to charge in premiums.*

So if they don’t have a contract, they have no price certainty, and that’s not good.

Let’s say someone has a rare condition and they want the world-famous Mayo Clinic to treat it. But the Mayo Clinic is out-of-network, so the price is the full price they charge – not an agreed-upon, lower contract price. If the insurance company were to pay most or all of that cost, it could rack up hundreds of thousands of dollars in medical costs that were not anticipated in the model that determined premiums. And that’s not a sustainable business model.

To limit their exposure, the insurance company does two things:

  1. Raise the bar by doubling the deductible and OOPM for out-of-network compared to in-network. That either drives policyholders back to in-network providers or it penalizes them by making them cover more of the costs.
  2. It further limits its exposure by paying the provider only the in-network contract rate it would have paid. But the provider wants its whole bill paid, so in addition to any copay or coinsurance paid, the policyholder is also responsible for the “balance” of the bill (hence the term “balance billing”). Furthermore, that extra balance paid is not applied to your extra-high out-of-network OOPM, which usually makes that OOPM all but unattainable. Surprise!

Even though a medical bill of $7,000 is no small matter, the OOPM is a great feature of health insurance plans. It was mandated for almost all plans sold after the Affordable Care Act went into effect. Before that, some policies had no OOPM, or they had lifetime limits on what the policy would pay.

I like to say that the OOPM is the “real insurance” of a health insurance policy because it is a total stop-loss. All the other benefits covered before you hit your OOPM are basically a prepaid discount plan that gives you some reassurance you won’t get socked with an unexpected bill. And then if you do, you’re protected from ruin by your OOPM. At least if you stay in-network.

Got more questions? We’ve got answers, so feel free to contact us.

* By law, four of every five dollars collected in health insurance premiums must be spent on medical bills.

In California, Your Health Plan is Likely Required to Cover Abortions

California law is clear: Abortions are legal, and almost all health plans are required to cover them. That includes all private insurance plans offered by insurers such as Anthem Blue Cross, Kaiser and UHC. Our colleagues at Warner Pacific put together a table with detailed info about each carrier.

The only plans that aren’t required to cover abortions are called “self-funded” plans, in which large employers essentially acts as its own insurance company, putting away money to cover all claims while buying access to health provider networks. IDK but I would wager that even most California self-funded plans voluntarily cover abortions.

Eleven states prohibit insurers from covering abortions (our friends in Texas, but also our friends in Michigan, sadly). Here’s a map outlining the situation. (HT Kaiser Family Foundation)

 

Biden and Democrats Save ACA Subsidy Improvements From Expiring

Great news for Californians and anyone in high-cost urban areas that are on individual and family (IFP) health insurance plans!

The Inflation Reduction Act that is on it’s way to Biden’s desk for signature includes a three-year extension of the massive improvements in federal subsidies for IFP health insurance coverage. The increased subsidies make people in high-cost areas eligible for much more generous subsidies than the original ACA subsidies. These big subsidies don’t put money in people’s pockets – they just don’t have to shell out as much for insurance that’s a lot more expensive than in other parts of the country.

The American Rescue Plan Act of 2021 (ARPA) included the largest expansion of the premium tax credit (PTC, commonly known as the federal subsidy) since the enactment of the Affordable Care Act (ACA), but only for calendar years 2021 and 2022. By extending the new subsidy levels now, everyone buying IFP plans for 2023 can see if they are eligible when they shop for next year’s coverage.

Without an extension of the ARPA’s expanded PTC, most of the 14.5 million people using Covered CA and other health insurance exchanges would have experienced a dramatic rise in premiums. As many as 3.1 million people were at risk of become uninsured, according to a recent report from the Urban Institute.

The improved subsidy system was a huge boon for California in general and high-cost areas like the Bay Area in particular, because the prior hard caps on eligible incomes became a floating formula based both on your income AND the cost of buying insurance in your area. As I like to say, the dollar goes a lot farther in Mississippi than in San Francisco, but under the old system, the gross income limits eligible for subsides were exactly the same.

By saving the more generous subsidies, Biden and the Democrats have ensured that millions of Americans will have the affordable coverage they need to keep their families health and safe. Thanks Obama and Biden!

Mexico Steps Up to Provide Americans Access to Abortion

Last year, the Mexican Supreme Court decriminalized abortion. Now, as our regressive Supreme Court and cruel Republican politicians work feverishly to restrict abortion in the U.S., Mexico is stepping up to fill the void.

Mexican activists are planning to help shuttle Texans and other Americans seeking abortions into Mexico and to build networks to ferry abortion pills north of the border or send them by mail — something they’ve already started doing and now plan to expand (NY Times: “A Plan Forms in Mexico: Americans Get Abortions”).

In Nuevo Progreso, Mexico — just across the border from Weslaco, Texas — you can buy Mifepristone, which blocks the hormone needed for a pregnancy to continue; another drug, Misoprostol, causes cramping and bleeding to empty the uterus, over-the-counter.

The FDA has approved these drugs as safe and effective in the first 10 weeks of pregnancy, but you can’t get them in the U.S. without a prescription. In Texas and other states, you can’t get that prescription after about six weeks, because anti-abortion zealots claim that that’s when you can detect a fetal heartbeat.

In the real world, it’s not a heartbeat, it’s faint electrical activity in the microscopic fetus, which is weeks away from having an organ with valves and chambers that would emit the sound we know as a heartbeat. [Incredibly, it’s the ultrasound machine that transforms that not-actuallly-a-heartbeat signal into an artificial heartbeat sound for the patient and ultrasound technician to hear.]

Much love to our sisters in Mexico. Aborting a pregnancy isn’t an easy decision. But the only person with the actual choice is the pregnant woman (with the help of the impregnator, family and friends if she wishes). Everyone else should butt the eff out – it’s none of your god damn business.

 

 

California Modernizes Medical Malpractice Law

Starting January 1, 2023, Californians who believe they have been harmed by medical malpractice will be able to sue for up to $350,000 for “pain and suffering” (aka non-economic damages), an increase from $250,000, which had been the law since 1975. The cap will increase gradually to $750,000 over the next 10 years, with a 2% annual adjustment for inflation after that. Meanwhile, cases involving a death will have an increased limit of $500,000 that will grow over the next 10 years to $1 million, with a 2% annual increase thereafter.

The new law, signed by Gov. Newsom on May 23, is actually good for patients and medical providers. For medical professionals who have to carry malpractice insurance, this gives them and their malpractice insurance carriers long-term visibility into their potential liability.

For patients, it’s good because a) it does increase the caps, though not as fast as some would like, and b) perhaps more importantly, it gives the healthcare industry some cost certainty on their malpractice policies, which are actually a big component of the cost of being a healthcare provider – a cost that is ultimately passed along to health insurance policyholders (aka, almost all of us) in the form of higher premiums to pay for healthcare price increases.

You can dive deeper into this here at CalMatters.

How to Use COBRA to Get Free Catastrophic Health Insurance

You leave your job and your employer offers you continuous coverage through COBRA. Unless you are about to start a new job offering no lapse in coverage when you switch from your old employer’s plan to your new plan, you’re going to need coverage the day COBRA ends.

But there’s actually a very cool way to avoid paying for that new policy for 60 days, potentially saving you thousands of dollars in health insurance premiums. Here’s how:

  1. You have 60 days to opt into COBRA, starting the day your employer-sponsored coverage ends.
  2. If you decide to opt in any time during the 60-day election period, you have to pay for the coverage back to day after your employer-sponsored coverage ended.

So let’s say your job ends June 30 and you decide to opt into COBRA on August 20. That means you owe the premium – usually 102% of the full cost of your prior coverage, without any of your prior employer’s subsidy since you don’t work there anymore – for both July and August, even if you didn’t use your coverage in July. And let’s say that monthly premium is $1,000/mo.

  1. Instead of automatically opting into COBRA or starting an individual policy on July 1, you use your full 60 days and at the end of August, you buy an individual policy that starts September 1.

But that means you’re not covered by health insurance in July and August, right? If something terrible happens, you’re going to have to pay for it out of pocket, right? NO!

  1. During those 60 days, you’re not really without health insurance, because you can opt in for retroactive COBRA coverage in case something catastrophic happens, making that 60-day window a FREE CATASTROPHIC HEALTH INSURANCE POLICY!

The chances of something truly catastrophic happening during those 60 days are very slim (we’ve never heard of it happening, though that doesn’t mean it can’t), but if it does you’re retroactively covered and your medical bills will be paid under your former employer’s health insurance policy – guaranteed!

In the meantime, let’s say you get the sniffles and decide to go to urgent care to get it checked out, and you get a prescription for a generic antibiotic. You pay for the urgent care visit out of pocket to the tune of say, $150, and take the prescription to your neighborhood big box store and get the generic for $15. Total cost: $165. Savings compared to two months of COBRA coverage: $1,835! And you’ve still got COBRA in your back pocket just in case.

If this sounds too good to be true, it’s not. We talk to clients about this all the time and they often see the logic of this great money-saving strategy. Sometimes they don’t, because they feel that having COBRA coverage from Day 1 will give them the most peace of mind. It’s your choice. Rockridge Health Benefits is the Home of Peace of Mind Health Insurance™️, which means we’re not in the business of selling insurance, we’re in the business of making sure everyone we work with has peace of mind about their health insurance coverage.

 

 

Highly Targeted Cancer Treatment Proves “Stunningly Successful”

Chemotherapy has become increasingly effective in slowing and stopping many cancers, but it is still mainly a broad-brush approach, filling the patient’s body with harmful chemicals to kill only a few cancerous cells. Researchers have been working for decades to develop the next generation of cancer drugs that are much more highly targeted at only the cancerous cells.

A new study, presented at the annual meeting of the American Society of Clinical Oncology and published in the New England Journal of Medicine, showed that patients with metastatic breast cancer treated with a new drug called Enhertu that targeted cancer cells with laser-like precision was stunningly successful, slowing tumor growth and extending life to an extent rarely seen with advanced cancers.

The results were so impressive that the researchers received a standing ovation when they presented their data at the oncology conference.

Read more about this great news in the New York Times.

Cannabis Use in the Workplace: Is it Legal?

Alcoholic beverages have long been associated with the workplace, from beer busts for staff to mixed drinks in the boss’ office. But what about cannabis? Now that it’s legal either as a “recreational” or “medical” drug in 39 of the 50 US states, is it ok to be stoned at work?

In California, where it is fully legal, “Employers are not required to accommodate medical or recreational marijuana use in the workplace. Employers may fire employees who test positive for marijuana, even if the use was off duty and for a medical condition with a valid medical marijuana card,” according to Sachi Clements, anattorney at nolo.com who wrote an article on the subject.

This a stricter rule than the one for alcohol: Employers are legally allowed to have a zero-tolerance policy for using alcohol in the workplace, but apparently, that doesn’t extend to worker being drunk off-the-job. 

Now that working from home is commonplace for many industries, what constitutes the workplace?

Lawmakers haven’t caught up to this trend to formalize the rules, but if your employer can fire you for using pot off duty, presumably they can also fire you for being stoned on the next Zoom call, or even while you are quietly working at home.

Small Business Deadline for CalSavers is Fast Approaching

The program mandates that almost all California businesses offer a retirement savings payroll deduction option no later than June 30, 2022

Do you have retirement savings? If you don’t, you are hardly alone. 49% of adults ages 55 to 66 had no personal retirement savings in 2017, according to the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP).

That’s $0.00 in the bank to live on if they ever stop working to earn enough money to keep a roof over their head, food in the fridge and to pay doctor bills. Medicare and Social Security certainly help (thanks, Democrats!), but you’ll have to live somewhere awfully cheap to live on the $3,000 to $4,000 a month that a well-paid worker would be eligible for. You’re going to need more, especially if you’ve been running up credit card bills to fund your life now. You may have to work for the rest of your life, if you can.

To address this problem, in 2012 California passed SB 1234, which mandated that employers with five or more employees offer their employees the ability to fund retirement savings via a payroll deduction, and created the California Secure Choice Retirement Savings Trust (aka, CalSavers) to administer a public program making it easy for employers to comply.

So bottom line, employers have to offer a retirement savings payroll deduction option that the employee directs to their preferred financial institution, or to the CalSavers program, which is designed to be both simple to implement and the financial institution of last resort. There is no cost to employers, but the final deadline for compliance by small businesses is June 30, 2022. Employers with 50 – 99 employees had to set it up by June 30, 2021, and those with 100 or more had to have it in place by September 30, 2020.

The state has started enforcing the law among large employers; non-compliant employers will be penalized $250 per employee upon the first penalty notice and, if noncompliance persists another 90 days, an additional $500 per employee, for a total of $750 per employee for sustained non-compliance.

Saving Money on Dental Implants by Going to Mexico

What if I told you that you could get a dental implant for $1,500 instead of the going rate in California of $3,500 or more? Would that perk up your ears?

The catch: You have to travel to Mexico to get the great rates.

Going to Mexico for dental work isn’t new. The cost of getting a dental education, paying employees and renting real estate are all much cheaper in Mexico than in California and the rest of the U.S. But in recent years, Mexican dentists have set up shop along the U.S.-Mexico border, creating villages you could call “Implant Island” or “Crown Cove.”

For instance, there’s Los Algodones, just across the border from Yuma, AZ, known to dental tourists as “Molar City.” It’s home to 350 dental practices, plus five dental labs to crank out the crowns, implants and other dental appliances being inserted into the mouths of budget-conscious Americans. Americans literally park their cars along the border and cross into Mexico by walking through a chain link tunnel. You can check it out in this article from Business Insider.

While the rates for dental work are much lower, there are other considerations, starting with the obvious: Will you get care that is as good as in the U.S.? The answer is yes, with the caveat that you need to do your research before making an appointment – just as I hope you do before you make an appointment for medical services in the U.S.

The other consideration is getting there: It’s a 3-hour drive from either San Diego or Phoenix, or you can fly directly into Yuma. If it’s implants you need, that’s normally going to require more than one visit, multiplying the travel costs.

So getting dental work in Mexico isn’t for everyone, though even adding in travel costs, it’s likely to cost you less than the $31,000 estimate one of my clients recently got from a Bay Area dentist for multiple implants. She’s going to bite the bullet and get the work done here, because she’s not able to travel to Mexico for personal reasons. She called to inquire about getting a dental policy that covers implants, and guess what, there really aren’t any, because insurance companies don’t want to pay the five-figure prices either. Even if you can get coverage, it will likely only cover a fraction of the cost, and only through their in-network dentists.

Here are some more resources if you want to learn more:

FAQ about dental implants written by a San Francisco dentist

Article about going to Mexico for dental work, written by a U.S.-based dentist

 

California is Gearing Up to Protect the Right to an Abortion

While it’s horrifying that the Supreme Court seems likely to either completely overturn Roe v. Wade or severely limit its scope, such a decision doesn’t make abortion illegal overnight. Roe made it illegal to write laws banning abortions. Overturning it means states can again make abortion illegal, but it doesn’t stop other states from continuing to allow abortions.

Thank goodness reality-based states such as California are strengthening their abortion protection and access, not weakening them.

Remember, the best way for a man and a woman to avoid the need for an abortion is for the man to put a condom on his penis before intercourse. Yet once a man impregnates a woman – which is the only way to create the potential for an abortion, since it’s not very likely that a woman who used artificial insemination to get pregnant would turn around and want to abort –  she becomes the only one either medically or legally at risk if she would prefer not to give birth.

According to a story by CalMatters, Planned Parenthood Los Angeles has been preparing for years for the moment when the organization would become a haven for patients from all over the country by expanding and reorganizing its network of facilities to be near airports, bus and train stations, and supportive emergency rooms and medical providers.

Statewide, Planned Parenthood, which operates about half of the 165 abortion clinics in California, reports that it has treated at least 80 out-of-state patients per month on average since September, when Texas adopted a law allowing residents to seek civil damages against anyone who aids an abortion after six weeks of pregnancy.

Meanwhile, State Senate President Pro Tem Toni Atkins is sponsoring Senate Bill 1375, which would allow some nurse practitioners to independently perform first-trimester abortions without a doctor’s supervision.

Blue states across the country need to join California to fight the Red State cultural warriors who use anti-abortion laws to whip up their base. Don’t kid yourself, they don’t give a shit about the lives of newborns, or any other children in need – they just figured out that being anti-abortion was a political wedge issue they could exploit.

A plant-based diet is the best way to avoid heart disease

A report published in the Cardiovascular Research medical journal makes a convincing case that the best way to avoid heart disease is to avoid excess sodium, sugar, trans fat and ultra-processed foods, while eating a diet consisting of vegetables, fruit, whole grains, beans, nuts, fish, eggs, poultry and dairy in their simplest forms, i.e. “whole foods.”

“Excess sodium, sugar, trans fat and ultra-processed foods can increase inflammation and insulin resistance in the blood vessels, which leads to the promotion of plaque in the arteries,” says Michelle Routhenstein, a preventive cardiology dietitian in New York City.

Plaque buildup narrows the inside of your coronary arteries, which supply fresh blood to your heart muscle. If it gets too little, the heart goes into cardiac arrest (no heartbeat) or has a myocardial infarction (aka a heart attack, when parts of the muscle die from lack of oxygen). Too little oxygen flowing to the brain can cause apoplexy, more commonly known as an ischemic stroke.

According to the 2017 Global Burden of Disease study, poor food choices account for almost 50 percent of all cardiovascular disease fatalities.

Read the Washington Post’s story about it here.

Doctors and Hospitals Are Radically Over-Charging for Drugs

The prices that hospitals charge patients and their insurance companies for cancer drugs are often at least double what the hospital paid to acquire the drugs, according to a new study in the prestigious medical journal JAMA: Internal Medicine. In some cases, the hospitals marked the drugs up as much as 7X what it cost them to stock it in the supply cabinet.

A separate study sponsored by AHIP, the health insurance trade association, found that:

  • Costs per single treatment for drugs administered in hospitals were an average of $7,000 more than those purchased through specialty pharmacies.
  • Drugs administered in physician offices were an average of $1,400 higher.
  • Hospitals, on average, charged double the prices for the exact same drugs, compared to specialty pharmacies.
  • Prices were 22% higher in physicians’ offices for the exact same drugs, on average.

These are prime examples of how America’s fee-for-service healthcare system drives up the cost of care. Doctors, hospitals and all other healthcare providers are incentivized to charge as much as they can get away with, because neither the patients nor their insurance companies have any bargaining power to drive down costs.

Some Doctors Say Prostate Cancer Is Over-Diagnosed

Some doctors are urging the medical community to stop using the word “cancer” to describe the lowest-grade form of the disease, which is common in men as they age and usually doesn’t lead to a more serious cancer diagnosis.

A Gleason 6 score on a prostate cancer biopsy is the lowest score you can get, and should be cause for celebration and anxiety reduction, not fear, these doctors say.

“This is the least aggressive, wimpiest form of prostate cancer that is literally incapable of causing symptoms or spreading to other parts of the body,” said University of Chicago Medicine’s Dr. Scott Eggener, who is reviving a debate about how to explain the threat to worried patients.

The words “You have cancer” have a profound effect on patients, Eggener wrote in the Journal of Clinical Oncology. He and his co-authors say fear of the disease can cause some patients to overreact and opt for unneeded surgery or radiation.

Read the rest of the story here.

Telehealth Gaining Popularity Among Californians

More Californians are receiving care via telehealth than last year, according to an annual survey of healthcare trends by the California Health Care Foundation.  More than half (55%) of survey participants reported receiving care by phone in the last 12 months, an increase from 45% in last year’s poll, and more than 4 in 10 (44%) by video, an increase from 35%.

Californians are satisfied with the quality of healthcare they receive via telehealth, with more than 8 in 10 (83%) “very satisfied” or “satisfied” with their care by video, and a similar proportion (79%) “very satisfied” or “satisfied” with care by phone.

The survey also asked participants about their views on healthcare costs, problems paying medical bills and perceptions of inequitable treatment of non-Whites by healthcare providers.

You can download the whole survey here.

Finally, A Fix for Covered California’s “Family Glitch”

The Biden Administration is finally going to fix the “family glitch” in the Obamacare subsidy system. Biden doesn’t need Congressional approval – it’s a regulatory process only. Thank goodness – finally, a permanent improvement to the ACA that Congressional Republicans can’t sabotage.

The family glitch is this: If an employee and their family are offered group health insurance, the whole family is ineligible for an ACA subsidy. The glitch is that employers don’t have to provide a subsidy for dependent coverage, only employee coverage.

So when such a family fills out an application on Covered California (and all the other ACA websites), you get to the question “have you been offered employer-sponsored coverage” and you’re supposed to check yes. That answer disqualifies you for an ACA subsidy, which can make the coverage crazy-expensive for that family.

The fix: If the total cost to cover the family on the employer-sponsored coverage is more than 10% of their Adjusted Gross Income, then the family will now be eligible for an ACA subsidy.

No word on when this fix will go into effect.

Californians may lose millions of dollars in healthcare subsidies if Congress doesn’t act

The generous healthcare subsidies Californians have been receiving will expire in 2023 unless our elected representative take swift action. 

Californians benefited greatly from the improved subsidy system put in place by the federal government as part of the American Rescue Plan Act (ARPA), which passed in early 2021. The new method of calculating eligibility finally took into account the fact that it costs a lot more to live in California than most other places in the United States. Thousands of Californians who were previously ineligible for a subsidy became eligible, reflecting both the higher incomes needed to live here and the higher cost of health insurance.

But under ARPA, that new system was only put in place for 2021 and 2022, leveraging the COVID-19 crisis to make a long-awaited improvement to the Affordable Care Act (ACA). Democrats were planning to extend the subsidies another three years under the Build Back Better (BBB) bill introduced earlier this year, but as you may have heard, politics has gotten in the way and now that bill is stalled in Congress.

Without passage of the BBB or some other legislation by the end of this year, the old, harsh system of doling out subsidies will return in 2023 and beyond, screwing Californians out of federal support they desperately need and deserve, at least as much as residents of (cough) lower-cost states.

The National Academy for State Health policy surveyed the country to assess the potential damage, and as you can imagine, it’s bad. Here’s a chart of what Covered California reported:

*FPL stands for Federal Poverty Line. For a single person, the 2022 FPL is $12,880, so 250% = $32,150 and 400% = $51,520. 

Cross your fingers, light a smudge stick, drop to your knees and pray – whatever works for you. Californians are virtually powerless to influence the process in Washington, because our representatives are the Democrats who sponsored the BBB and want to see the improved subsidies continue. We will keep you posted.

If You Received an Obamacare Subsidy, the 2021 Covid Relief Bill Changed How You File Your Taxes – And May Cost You Some Money

Obamacare Subsidy

Obamacare SubsidyIf you received a subsidy to purchase health insurance through Covered California in 2021, you have to report that on your federal and state taxes due on April 18, 2022. 

But take note – the subsidy system completely changed in May 2021 when the American Rescue Plan Act (ARPA) went into effect in the middle of the year. That changed how you report the amount of subsidy you received, and how you reconcile what you got against what it turns out you were eligible. 

 Many people are going to have to pay back some or all of their state subsidy, in essence because ARPA kicked in to replace the state subsidy with federal dollars. But that’s cold comfort because a) who knew? and b) it’s cash out-of-pocket in 2022 that you received only in the form of a 2021 subsidy sent directly to your insurance company last year. 

We’ll deal with your federal taxes first, then move on to California state taxes.

 Federal Taxes

Forms You’ll Need:

 Form 1095-A

You should have received this in the mail from Covered California, but if you didn’t, you’re not alone. Just log in to your Covered California account and download it from the Welcome page – it’s right there in the middle of the page. While you are there, download FTB Form 3895, California Health Insurance Marketplace Statement. If you need help, contact us. 

Form 8962 and the Big Subsidy Improvement for Californians

Since Covered California started in 2014, we Californians have been screwed by the one-size-fits-all subsidy system. The amount you were eligible for was based on a multiple of the federal poverty line, and you had to estimate Adjusted Gross Income* of no more than four times the poverty line to receive a subsidy – whether you lived in a low-cost state like Mississippi or a high-cost state like ours. 

* For subsidy purposes, you actually have to calculate Modified Adjusted Gross Income (MAGI), which adds back into your income items such as the non-taxable portion of Social Security. I’m using AGI as an abbreviation since most people’s AGI and MAGI are the same. Here’s how you find out if you have to report MAGI and how to do it.

Democrats delivered long-awaited relief in the Covid Relief bill (ARPA) by changing the cap to no more than 8.5% of your 2021 AGI. This brought subsidies based on incomes in line with the cost of living – and buying individual and family health insurance – in the state you are earning that income.

But now you’ve got to reconcile your actual AGI with the estimate you used when you applied for your subsidy. You do that on form 8962.

In this post, we’re going to focus on Line 7, Applicable Figure of Form 8962. “Applicable Figure” is the maximum percentage of your AGI that you have to use to buy health insurance before the federal government picks up the rest in the form of a subsidy. 

8962 2021 line 7 applicable figure 

You find your Applicable Figure on Page 9, Table 2 of the Instructions for Form 8962. That figure translates where you are in the old poverty-line system to the new 8.5% of income system.  

For example, if your multiple-of-poverty-line figure is 320, under ARPA your Applicable Figure is 0.650. Translation: Based on your income, you don’t have to pay more than 6.5% of your income for health insurance. If your multiple-of-poverty-line is 400 or above, your responsibility is 8.5% of AGI. 

[Important note: the subsidy you are eligible for is actually based on the unsubsidized cost to you of the second-lowest cost Silver Plan offered in your area (the SLCSP). That’s a pretty good plan. But if you want to upgrade to a higher cost Silver, Gold or Platinum, you do that at your own expense.]

What this all means is that unlike every other year, you aren’t necessarily going to have to pay back all of your federal subsidy if you cross over the bright line of 400% of the poverty line. People with incomes well into the six figures were eligible for subsidies in ‘21 and are again in ‘22 under ARPA.  

Once you’ve put your Applicable Figure on Line 7, continue on with the rest of the form as usual.  

State Taxes

Forms You Will Need:

Before ARPA, California was subsidizing health insurance for some people with incomes between 400% and 600% of the poverty line, to bring the total subsidy more in line with the cost of living in California.  

After ARPA, California abruptly shut down that system mid-year, creating a 2021 tax reporting headache for some people. If you received a state subsidy in 2021, you only got it for January through April, the four months before the new ARPA subsidies kicked in.  

If you got a state subsidy, you’re going to have to figure out if you were still eligible for all or part of it on top of your ARPA subsidy. A lot of people aren’t, and that’s obviously a huge bummer because now you have to send it back to the state.  

The process is similar to the federal process outlined above.  

As with the federal version, you need to calculate your “Applicable Figure” by first using the same multiple-of-poverty-line calculation you used on your federal return (Lines 3-5 on Form 3849), then consulting Table 2 on page 7 of the instructions for Form 3849. In this case, people with incomes between 400% and 600% of the poverty line may still have been eligible for an additional California subsidy on top of ARPA. But the Applicable Figure tops out at 0.18, or 18% of your AGI, and if your multiple-of-poverty-line figure is above 600%, you aren’t eligible for any California subsidy at all. You need to enter your multiple-of-poverty-line figure on Line 5 and then enter the Applicable Figure you got from Table 2 on Line 7 of form 3849. 

  • Example: Bob received a state subsidy of $300/mo in January through April 2021. Now Bob is doing his taxes after receiving an ARPA subsidy of $900/mo in May through December. The amount of the ARPA subsidy is intended to retroactively cover some of the cost of Bob’s coverage in the first four months of the year, but he didn’t get it in the form of a rebate check, he got it in the form of a subsidy payment sent directly to his insurance company. When Bob does his state taxes, he finds out that he was only eligible for a total of $700/mo in federal and state subsidies combined in January through March. So now Bob has to write a check to the state of $800 to pay back the excess subsidy he received. Dang!

3849 2021

After you figure out how much subsidy you were eligible for, you will then go through a reconciliation process very similar to the one on federal form 8962. 

These are the most common issues you have to deal with when you report your 2021 Obamacare subsidy on your federal and California taxes. The other most common ones are a) how to split subsidy amounts received by a couple that divorced during the year and b) how to figure out how much subsidy you were eligible for if you got married during the year and are now reporting as Married Filing Jointly for the full year.  Feel free to contact us for guidance!

How Much Caffeine is Good For You?

Caffeine is the most widely consumed psychoactive drug in the world. People love it, and count on it, for its stimulative properties, especially first thing in the morning, when the body is waking up and caffeine blocks the neurotransmitter adenosine that promotes sleep. 

But after you wake up, do you really need it during the day? That depends on how much you like consuming the foods that contain caffeine – most notably coffee, non-herbal tea and chocolate – and whether you consume so much caffeine on a daily basis that you need more than one jolt in the morning to keep the drowsiness away.

Caffeine isn’t addictive in the biological sense, but it can become a dependency if you consume too much. Scientists say that 400mg or less per day is the safe range to avoid dependency.

Unfortunately, caffeinated foods don’t come with a label reporting how much caffeine is in each serving. So you’ll have to rely on sites like Caffeine Informer to figure out how much of your favorite caffeinated foods you can safely consume each day.

For example, by doing a little math based on Caffeine Informer’s database, I figured out that my morning 10-ounce cup of Peet’s French Roast has about 166mg of caffeine in it. 

Want to know more? Here’s an informative article titled “10 Signs You Are Drinking Too Much Coffee,” and here’s a very readable study published by the NIH on coffee consumption.

Scientists are infecting “organoids” with COVID to see what happens

Scientists are able to create tiny mini-organs no bigger than a lentil from artificially created stem cells and they are injecting them with Covid-19 to study the effects. The news was reported by Science Reporter Lisa Krieger. 

“By creating disease in a dish,” Krieger wrote, “the scientists hope to better understand the mysteries of COVID. They’re part of a growing international effort to study how the virus infects and damages cells.”

In her story, Krieger reports that Covid’s impact on the mini-heart was very distressing: 

The tiny heart became seriously infected within two to 24 hours — then developed an array of genetic and structural defects.

“What we were seeing was completely abnormal; in my years of looking at cardiomyocytes, I had never seen anything like it before,” according to senior investigator Todd McDevitt.

Typically, muscle fibers called sarcomeres are arranged as long filaments, aligned in the same direction. It’s their job to control the coordinated cellular contraction of a heartbeat. But the sick sarcomeres were diced into small fragments, like sliced bread.  According to Conklin, this makes it impossible for them to beat properly.

There were other signs of trauma. Cells released cytokines, a chemical distress signal. DNA was missing. Eventually, they succumbed.

Surprise Bill? You probably used an out-of-network provider

Don’t be surprised if you choose an out-of-network medical provider to treat a health problem and get a huge bill as a result. Unfortunately, too many people do this and then blame everyone but themselves for the mistake.

This article is about a woman who took her problem all the way to the Colorado Supreme Court, which will decide if the hospital deceived the patient when she was admitted.

I know it’s not easy to find out which medical providers have a contract with your insurance provider (the definition of in-network) and which do not. But it’s far from impossible. Most health insurance companies have a Find a Doctor tool on their website, and by entering the type of coverage you have, you’ll get a list of the in-network providers near you. If the one you want to see isn’t on the list, choose someone else. It really is that simple. 

Providers don’t do nearly as good a job providing this information online, but some have excellent pages, such as the one posted by Stanford Health Care

The bottom line: Please, please do your homework before you see a healthcare provider!

Financial Love Letter to Heirs Will Give Them Peace of Mind

Having everything set up so your family or other beneficiaries know what to do when you die or become too ill to care for yourself is a true act of love.

The author’s 76-year-old father gave her a file labeled “financial love letter,” containing a copy of his will and further instructions on what to do if he is incapacitated or dies. 

Read the whole article on Business Insider.

Studies Find That Doctors Are More Likely to Describe Black Patients as Uncooperative

It’s not news that African-Americans have been discriminated against in access to medical care. Now, studies are showing that healthcare professionals aren’t color-blind when making notes about their patients. One study found that Black patients were two and a half times as likely as white patients to have at least one negative descriptive term – such as “not compliant” and “agitated” – used in their electronic health record. 
 

How the Tax Bill Affects Your Healthcare

The Tax Cuts and Jobs Act is a Presidential signature away from becoming law. What’s in it that impacts your healthcare? Here is a rundown:

  • The law repeals the Individual Mandate starting 2019, so you still need to have health insurance for 2018 or face a tax penalty of at least $2,676 per person in your household. NOTE: If you live in Massachusetts, you are still required to have insurance in 2019 and beyond, because your state already has an individual mandate that came into effect with Romneycare.
  • The law does not touch the tax advantages of having health insurance, which include using pre-tax income to pay for health insurance, and having a Health Savings Account funded with pre-tax dollars. (However, if you have an individual or family plan, you can only open or fund an HSA if you have an HSA-compatible high-deductible policy – this was an ACA provision.)
  • The new law also does not touch the “employer exemption,” which is the ability of employers to deduct 100% of the money they spend on providing health insurance to employees and their families. Three-quarters of Americans who are covered by private insurance get their coverage through employers, so this is a big relief. There was talk of capping the employer exclusion as one way to pay for the bill’s tax cuts, because it is the single biggest tax break in the tax code, saving individuals and businesses $270 billion per year in income and payroll taxes.

Much has been made of the repeal of the individual mandate and its effect on the health insurance market for individuals and families. Here are my thoughts:

  • From the start, the individual mandate has been an ineffective way to drive consumers into the health insurance market, because the penalty is too low compared to the cost of health insurance for many people. It was set at its current level because it was the most lawmakers could push through in the ACA.
  • The repeal of the individual mandate won’t be a determining factor for many people. I rarely come across clients who say that they aren’t carrying insurance because the penalty is cheaper, and who will therefore not carry insurance now because there is no penalty. People largely decide to carry insurance because it gives them peace of mind regarding their health. You may be young and/or healthy now, but one car accident or other unexpected malady and you are going to wish you had health insurance. Even the most barebones of the policies I sell includes a provision that caps your out-of-pocket maximum exposure to healthcare costs in one year (currently no more than $7,350 for in-network care in California). This was specifically included in the ACA to eliminate medical bankruptcies.
  • On the other hand, millions of people will decide not to buy health insurance once the mandate is repealed, and in most cases they will be the young and/or currently healthy. This is a problem because insurance pools count on the premiums of those who don’t use their full benefits in any given year, because it balances out the costs for those who do. In health insurance, this is an especially big problem, because unlike auto, home or casualty claims, health insurance costs routinely run into the six-and-seven figure range. Not enough young and/or currently healthy people results in what we call “adverse selection,” or a pool that is unbalanced toward those who will make claims. The only way for insurers to protect themselves from this risk is to raise premiums or to stop offering policies. To get political for a moment, this is exactly what the opponents of the ACA are hoping for, because it will cause two things: 1) unhappy consumers facing rising premiums and 2) insurers pulling out of the individual markets because they simply can’t create pools that will adequately cover the expected claims.
  • The repeal of the individual mandate will make it legal to buy non-ACA compliant health insurance policies, and I’m not sure this is a bad thing. I already sell those policies, which are currently marketed as 90-day “short-term” policies that can be renewed indefinitely. These policies essentially serve only as “pure insurance,” meaning they offer no benefits until you reach $5,000 or $10,000 in out-of-pocket costs (depending on which policy you buy), but then indemnify you up to $750,000 in medical costs per person. Currently, there is no medical underwriting for these policies, although you do have to check a box saying you haven’t had any major illnesses in the recent past. It’s unclear whether these insurers will be allowed to screen applicants using medical underwriting in the post-mandate world.
     
Overall, I expect the individual market to survive the repeal of the mandate, especially in California, where Covered California is doing its best to protect the market, and where we have big enough risk pools to keep insurers in the market. In other states, however, the ACA is more at risk. It took herculean efforts to make sure there was at least one ACA-compliant individual policy offered in every county this year. That may be impossible in 2019 and beyond.

Does My Doctor Take My Insurance?

It should be easy to figure out whether your doctor takes your insurance. But as everyone knows, it rarely is.

Your doctor is either in-network (meaning they take your insurance based on in-network pricing), or they don’t (meaning they will charge you full price, which counts against your out-of-network deductible, which you are unlikely to reach under most circumstances). If you have an HMO plan, it’s even simpler: either you see a doctor in your HMO and get in-network benefits, or you pay out of your own pocket. HMOs and EPOs don’t have out-of-network benefits – only PPOs do.

[NOTE: In this article, I’m using the term “doctor” as a catch-all for all medical service providers. The same guidelines apply if you need to know if a particular hospital, blood lab or testing facility takes your insurance]

Here’s a translation of some healthcare-speak: “In-network” means that your doctor is contracted with your insurance company to provide services at an agreed-upon price (sometimes they are called “participating providers”). “Out-of-network” means they are not. An HMO plan limits your access, and your coverage, only to doctors that are in the HMO’s contractual network. A PPO essentially does the same thing, with two differences: a PPO allows you to make an appointment directly with a specialist, rather than having to get a referral from your primary care doctor, and it pays out-of-network benefits after you spend a lot of money out of network. An EPO is like a PPO in that you can go directly to specialists, but like an HMO in that it offers no out-of-network coverage.

Finding out whether your preferred doctor takes your insurance is where the problem lies

Doctors’ offices should have big menu boards, like fast-food joints, saying exactly which plans they take for in-network PPO or HMO benefits. I’ve never seen one.

At best, the receptionist will know the answer (which is rare), or there will be a helpful person in the billing department who can give you a clear answer. At worst, you will walk into a doctor’s office thinking they take your insurance, no one will tell you that they don’t, and you’ll get hit with a big, surprising bill that you are obligated to pay. I have a client who got a $1,300 bill for a routine pediatric visit because their pediatrician had stopped taking their insurance and didn’t tell them.

Below you will find resources to help you find out if your doctor takes your insurance. Since I am a Northern California-based insurance broker, these links are for local providers. But if you are elsewhere, you can look for the same information in your area. I’m about to explain how.

How to figure out if your doctor takes your insurance

Almost all doctors’ offices are now part of large medical groups that handle their administrative functions, including which insurance companies they contract with. Some groups, such as Palo Alto Medical Foundation, do an excellent job of posting all the plans they take, and updating the page frequently. That’s really the gold standard, but I’ve never come across a page as thorough as that one. Stanford Health does a pretty good job with its page, but it’s not as comprehensive as it should be. Brown & Toland does a terrible job – you have to search their FAQs to find the page, and then when you click, it takes you to the wrong page!

The first thing you need to know is what kind of insurance you have. Most people have either employer-sponsored insurance (aka “group insurance”) or personal insurance for themselves or their family (aka “individual” plans or simply “Covered California”). In California, some government employees have coverage through CalPERS. Military personnel, except veterans, have coverage through TriCare.

If you are on Medicaid (known as Medi-Cal in California), you have a particular type of insurance that in California varies by county, and you must find out if your doctor takes that exact insurance plan. Those on Medicare also need to be sure that their doctors take their exact type of insurance. Stanford has a good page explaining the different types of Medicare coverage they take – but if you are not a Stanford patient, use this information only to help you to learn what questions you need to ask your provider.

In general, more doctors take group health insurance than individual health insurance. That’s simply because group health insurance pays them more than individual insurance, and some doctors don’t want to accept the lower compensation. The reason this happens has to do with how insurance pools work, but the bottom line is that insurance companies can afford to pay more out of group insurance pools than individual pools, which are separate.

This leads to a big misconception about health insurance – that if a doctor “takes Blue Shield” that they take ALL Blue Shield plans, and that may not be true. Imagine if you had to ask at the supermarket whether they took your particular version of Visa or Mastercard, and if not, you’d be forced to pay cash. That’s what we’re dealing with in health insurance.

So when you are not 100% sure your doctor takes your insurance, here’s the information you need:

  • The exact name of your plan, and whether it is an HMO, PPO or EPO network
  • Whether you have group, individual or another type of coverage
  • Your policyholder ID number, commonly called a “member ID number” or something similar. These numbers are coded to provide billing offices with information about the type of plan you have.
  • The federal tax ID number of the doctor’s office. Yes, you actually need that number. That’s the coin of the realm in health insurance. It’s how the insurance companies know whether they pay in-network claims from a particular doctor. Yes, you can ask the doctor’s office for that number and they should be able to provide it.

Next, you need to know what medical group your doctor belongs to. In the Bay Area, some of the biggest are Sutter Health, Stanford Health, Brown & Toland, Dignity Health and Palo Alto Medical Foundation. Search Google for your doctor’s name and you’ll often be able to find this information. If it’s not perfectly obvious from an Internet search, you must call your doctor’s office and ask them, and ask about which insurance plans they take. There are still some freestanding doctors offices that are not part of a larger medical group, so you have to be extra careful to ask the right questions of their front desk people before you use their services.

Once you know which medical group your doctor belongs to, you can go to that group’s website and look for their insurance page (Some doctor’s offices have such a page on their own websites, but they are often woefully incomplete). If you do not get a satisfactory answer from the web page, call the doctor’s office and/or the group’s main office. But be prepared to come away without a definitive answer.

The next place to turn is your own insurance company. Call their customer service line, give them your policyholder information and the exact name of the doctor, and get them to tell you whether they are in-network for your plan. This usually results in a satisfactory answer, but needless to say, this can be time-consuming. Some insurance companies have provider directories on their websites as well, but you usually have to be logged in as a policyholder to access them. My only personal experience is with the Blue Shield of California website, and it’s good for simple searches, but I don’t rely on it as a definitive resource, because there’s no telling how recently this information was updated.

Here are the insurance pages of major Bay Area medical groups:

I’d be very interested to hear about your experiences figuring out if your doctor takes your insurance.

Several Good Analyses of the Failure of Republican Reform Efforts

Here are several links to good stories about the failure of the Republicans to pass healthcare reform:

My write-up on LinkedIn: The ACA Will Not Fail On Its Own. It Will Take Active Efforts by the Administration and Congress.

Kaiser Health News: GOP Failure To Replace The Health Law Was Years In The Making

WashPost: ‘It’s an insane process’: How Trump and Republicans failed on their health-care bill

Politico: Medicaid Shows Its Political Clout

***

And finally: Former House Speaker John Boehner predicted this failure five months ago

“It’s not going to happen,” Boehner said Thursday while speaking at a health-care conference in Orlando, Florida, Politico reports. He dismissed claims by Donald Trump and G.O.P. leadership that Congress will successfully “repeal and replace” the Affordable Care Act by the end of the year, calling the prospect mere “happy talk.” 

Boehner told the crowd on Thursday that he “started laughing” when congressional Republicans, ecstatic after Trump’s unexpected election triumph, predicted that they would rapidly repeal and replace Obamacare. “Republicans never ever agree on health care,” said Boehner, who resigned in 2015 from his House leadership role amid widespread turmoil in the party.

Insurance Companies Come Out Strongly Against Loosening ACA Minimum Essential Benefits Requirements

The insurance industry was largely against the ACA’s requirement that all non-grandfathered individual and small-group health insurance policies provide minimum essential benefits such as maternity coverage, mental health and substance abuse disorders, emergency care and preventative services. They were opposed because these requirements reduced the number and types of policies that could be sold and raised the costs of new ones.

But now that they are in place, the insurance industry has done a 180. In a rare public statement about the current healthcare reform debate, large insurers have blasted the amendment offered by Ted Cruz and Mike Lee to allow insurers to offer policies that don’t meet these requirements.

Why? Because now that these plans are in place, they have insurance risk pools built around them. If the risk pools splinter, it means that some pools are vulnerable to “adverse selection,” which is insurance-speak for having more people who need their insurance benefits than there are people to pay for them. Lobbyists for the insurance companies and insurance agents are working behind the scenes to stabilize health insurance markets in the post-ACA world, and this amendment would destabilize the market in a major way.

From Politico:

In a letter sent to Cruz and Lee today, Blue Cross Blue Shield Association CEO Scott Serota warns that the proposal is “unworkable as it would undermine pre-existing condition protections, increase premiums and destabilize the market.”

America’s Health Insurance Plans additionally is circulating a memo that raises similar concerns about the individual insurance market.

“Unfortunately, this proposal would fracture and segment insurance markets into separate risk pools and create an un-level playing field that would lead to widespread adverse selection and unstable health insurance markets,” reads the AHIP memo.

 

Obamacare Exchanges Are Strengthening, Not in a “Death Spiral”

This is reality – the individual health insurance markets are generally in good shape, though in smaller states and counties, there is a serious problem of choice. Some markets are no longer served, and others have only one option. This is not good, but it could be solved in Washington was working on it, and not working to make the situation much worse.

If you read the article, you may see that insurer profits are up, and that the amount of claims paid are down. First of all, yes, we are a profit-making industry. Not enormous profits, mind you, but yes, profits. Nearly EVERYONE else in the healthcare industrial complex is a for-profit entity. Do you think your doctor works for free? Secondly, we are obligated to pay out an average of 80% of premiums on medical claims (85% for large groups), so quarter-by-quarter variations are meaningless.

Finally, don’t blame the health insurance industry when 2018 rates come out, because they will be going up for almost everyone. Here’s why:

“An analysis by the Oliver Wyman consulting firm estimated that up to two-thirds of insurer rate increases for 2018 “will be due to the uncertainty surrounding these two market influences” and the Congressional Budget Office estimates premiums will increase 20 percent next year if the individual mandate is not enforced.”

http://www.kansascity.com/news/politics-government/article160601814.html

Reactions to the Senate’s Trumpcare Bill: Jonathan Greer Quoted as Industry Expert

The Senate revealed its draconian version of Congress’ effort to weaken the Affordable Care Act yesterday. In his role as Media Chair and Spokesperson for the Golden Gate Association of Health Underwriters, Jonathan Greer was quoted in the San Jose Mercury News and its affiliated newspapers around the Bay Area.

Here are his quotes:

Jonathan Greer, a spokesman at the Golden Gate Association of Health Underwriters, [said] fewer middle-income Californians would be eligible for health insurance subsidies since the bill lowers the maximum income level for receiving a subsidy.

“In a high-cost state like California, that’s a big problem,” Greer said. For example, he said a family of three earning $75,000 a year is currently eligible for subsidies but wouldn’t be under the new bill. In the Bay Area, an unsubsidized plan offering benefits such as low-cost prescription drugs can cost more than $1,000 per month, he said.

Greer pointed to a bit of good news for lower-income Californians in the Senate’s version: Unlike the House bill that proposed age-based subsidies, the Senate bill retains Obamacare’s income-based premium subsidies that millions rely on to make health insurance more affordable.

Here’s a good story with more details on the proposal: https://www.linkedin.com/pulse/better-care-reconciliation-act-2017-michael-lujan

 

 

Jonathan Greer Wins GGAHU’s “Out of the Box” Award for 2017

Jonathan Greer serves on the board of the Golden Gate Association of Health Underwriters GGAHU), the Bay Area’s health insurance broker trade association. Last week, his fellow board members honored him with the 2016-17 “Out of the Box” award for bringing new energy and a fresh perspective to the association’s important work representing employers, employees, consumers and our health insurance colleagues.

Health insurance brokers provide a vital – and under-appreciated – service to businesses and families. Figuring out how to buy the right health insurance policy isn’t easy, but as insurance professionals, we are committed to helping our clients sort through their options to find the most cost-effective policy to meet their needs. Insurance brokers have nothing to do with setting rates, and we are paid a relatively small commission on each sale. Our #1 priority is helping you, the health insurance consumer, whether you are the HR manager of a company or an individual.

“As you surely know, healthcare is a very big concern of everyone in this country. I’m proud to be a health insurance broker and to put my experience and professional expertise to work for my clients,” Greer said.

Saving Lots of Money With an HSA-Wrap Benefit Plan

An excellent way for employers to save on health benefits is to essentially “self-fund” the deductible and out-of-pocket costs for employees while providing a high-deductible plan that acts like pure insurance for very expensive health care. We call this an HRA-Wrap, and I’d love to explain it to you in more detail because it can save you 10-20% annually on your overall benefits costs. That’s because you don’t have to pay an insurance company to cover the first few thousands of dollars of routine care, and far less than 100% of your employees will need that kind of coverage.

Here are some more tips to save money from the Washington Post.

 

Teaching Hospitals Are Expensive Places to Get Healthcare Services

From the New York Times:

Perhaps not evident to many patients, there are two kinds of hospitals — teaching and nonteaching — and a raging debate about which is better. Teaching hospitals, affiliated with medical schools, are the training grounds for the next generation of physicians. They cost more. The debate is over whether their increased cost is accompanied by better patient outcomes.

Teaching hospitals cost taxpayers more in part because Medicare pays them more, to compensate them for their educational mission. They also tend to command higher prices in the commercial market because the medical-school affiliation enhances their brand. Their higher prices could even cost patients more, if they are paying out of pocket.

https://www.nytimes.com/2017/06/05/upshot/teaching-hospitals-cost-more-but-could-save-your-life.html

From the Boston Globe: Academic medical centers drive up costs in the health care marketplace

 

Anthem to leave Ohio’s Obamacare insurance market in 2018

From Reuters:

Anthem Inc, which has urged Republican lawmakers to commit to paying government subsidies for the Obamacare individual health insurance system, on Tuesday announced it would exit most of the Ohio market next year.

The high-profile health insurer, which sells Blue Cross Blue Shield plans in 14 states including New York and California, for months has said that uncertainty over the payments used to make insurance more affordable could cause it to exit markets next year.

This is likely the first of several such departures from ACA markets. Let’s get this straight: this is NOT the fault of the ACA or President Obama. This is solely to the fault of Congressional Republicans, who have blocked or stalled agreed-upon payments to health insurers designed to smooth out and stabilize the markets for individual health insurance.

http://www.reuters.com/article/us-anthem-ohio-idUSKBN18X29C

Over-Use of Specialists Is One Of The Biggest Drivers Of High Healthcare Costs

From the NY Times:

The Affordable Care Act was misnamed; it should have been called the Access to Unaffordable Care Act. In 2015 health care spending reached $3.2 trillion — $10,000 for every man, woman and child in America. While our health care system is the most expensive in the world by far, on many measures of performance it ranked last out of 11 developed countries, according to a 2014 Commonwealth Fund Report.

But deregulation will not fix it. To the extent that we can call it a market at all, health care is not self-correcting. Instead, it is a colossal network of unaccountable profit centers, the pricing of which has been controlled by medical specialists since the mid-20th century. Neither Republicans nor Democrats have been willing to address this.

Most Americans mistakenly believe that they must see specialists for almost every medical problem. What people don’t know is that specialists essentially determine the services that are covered by insurance, and the prices that may be charged for them.

https://www.nytimes.com/2017/06/03/opinion/sunday/the-specialists-stranglehold-on-medicine.html

Senate Republicans Pulling Away From ACA Repeal Legislation

From Politico:

Senate Republicans remain publicly pessimistic about their prospects of repealing and replacing Obamacare this year with several raising concerns this week about the party’s central campaign promise even as one of their leaders vowed to pass such a bill this summer.

Sen. Richard Burr (R-N.C.) made the most direct prediction on Thursday, telling a news station in his home state that “I don’t see a comprehensive health care plan this year.”

http://www.politico.com/story/2017/06/02/richard-burr-senate-health-care-bill-239066

Senate Republicans mull tax on employer-based health insurance

Senate Republicans set on reworking the Affordable Care Act are considering taxing employer-sponsored health insurance plans, a move that would meet stiff resistance from companies and potentially raise taxes on millions of people who get coverage on the job.

Under longstanding tax law, compensation in the form of health insurance isn’t treated as income for workers. That means employers can deduct the cost and the value isn’t subject to payroll taxes or individual income taxes. It is a system that economists say distorts the market in favor of generous insurance packages, but like other tax breaks, it has proven popular and difficult to dislodge.

http://www.marketwatch.com/story/senate-republicans-mull-tax-on-employer-based-health-insurance-2017-06-01

California’s New Single-Payer Proposal Embraces Some Costly Old Ways

From the respected Kaiser Health Foundation:

Three of the dirtiest words in health care are “fee for service.”

For years, U.S. officials have sought to move Medicare away from paying doctors and hospitals for each task they perform, a costly approach that rewards the quantity of care over quality. State Medicaid programs and private insurers are pursuing similar changes.

Yet the $400 billion single-payer proposal that’s advancing in the California legislature would restore fee-for-service to its once-dominant perch in California.

http://khn.org/news/californias-new-single-payer-proposal-embraces-some-costly-old-ways/

 

The Ugly Truth About Canadian Health Care

Perspective from a Canadian healthcare expert: “Overflowing emergency rooms and yearlong waits for treatment.”

https://www.city-journal.org/html/ugly-truth-about-canadian-health-care-13032.html