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Thoughts on the Affordable Care Act

Big Al
October 20, 2013

I received two comments yesterday stating that I was distributing false information regarding the ACA.

After reading these comments and giving them more than just a few passing thoughts, I called a good friend who is an expert in this field. He has evolved into being a member of senior management of a major health care provider. Here is his response to to the comments:

“My thoughts….
1.  The listener is correct, there is an open enrollment period for acquiring coverage through the exchange.  Coverage may also be secured outside of the enrollment period for qualifying events,  e.g., dependent’s who age-in (turn 27 years old) and acquire their own coverage, or a new dependent child.
2.  The only way this listener is paying a $10/premium is if they are on a subsidized plan.  I provided below the rates for a commercial Silver plan (basic plan with a typical $3,500 deductible for non- smokers) through the Exchange.  The listener is missing the point, since he/she isn’t paying the full cost, we (the tax payers) are.
Iowa is commonly referenced as an a standard exchange.

Iowa Health Insurance Exchange – Sample of Individual Health Plan Rates

According to the Iowa Insurance Division, sample mid-range (Silver) individual plan premiums from the four carriers include:

  • CoOportunity Health: $172/month for a 21-year old, $267/month for a 45-year old, and $516/month for a 62-year old living in Des Moines, IA (non-tobacco user).
  • Avera: $280/month for a 21-year old, $404/month for a 45-year old, and $805/month for a 62-year old living in Crawford County (non-tobacco user).
  • Coventry: $175/month for a 21-year old, $254/month for a 45-year old, and $514/month for a 62-year old living in Des Moines, IA (non-tobacco user).
  • Gundersen: $306/month for a 21-year old, $467/month for a 45-year old, and $877/month for a 62-year old living in Iowa County (non-tobacco user).

Here is a detailed look at sample rates:

 

According to the Insurance Division, health insurance plan prices vary both between and within states, based on actuarial tables. Premium costs, the monthly amount an individual and/or an employer pays to an insurance company, may vary depending where someone lives in Iowa, their age, and their tobacco usage.

The state is divided into seven regions (see region list below). All plans through the Iowa Health Insurance Exchange will be categorized by Platinum, Gold, Silver, and Bronze tiers of coverage. For instance, a platinum plan will have a higher monthly premium but lower out-of-pocket expenses for medical care. With a bronze plan, the monthly premium will be lower but have higher out-of-pocket expenses for medical care.

The sample rates are premium rates before any applicable individual health insurance tax subsidies are applied. If eligible for the tax subsidies, the actual amount a person would pay would be reduced at the time of purchase. The tax subsidies are available for consumers with income four times the federal poverty line (making up to ~$45,900 for an individual and ~$94,200 for a family of four in 2013).” For sample health insurance tax subsidy charts, see this article.

Discussion
13 Comments
    MNH
    Oct 20, 2013 20:35 AM

    Al—
    Still can’t shake the feeling that the Affordable Care Act is going to prove to be affordable in the same way that the Patriot Act proved to be patriotic.

      Oct 20, 2013 20:37 AM

      Thanks MNH,

      I personally believe that you do have a point.

      Big Al

      bj
      Oct 20, 2013 20:12 PM

      Agree 100%–nothing patriotic about the first and nothing affordable about the latter.

      Obamacare is a money maker for the insurance companies, and guess who pays the subsidies–as if our federal government isn’t already broke. Meanwhile both sides (Ds & Rs) are talking about “reforming” Social Security & Medicare because they’re going broke. Never mind the $billions (trillions in Bernanke dollars) stolen already from these “trust funds” to fuel Great Society programs and undeclared wars across the decades. If a banker co-mingled money like that they’d be in prison unless they’re too big to fail or jail.

        bj
        Oct 20, 2013 20:42 PM

        As a footnote and in retrospect, when you consider the enormous power grab that took place under the Patriot Act under the pretext of fighting terrorism, then fast forward to the mainstream media labeling reform minded Republicans willing to stand their ground against Obamacare as ‘suicide bombers’, “gun to the head” negotiators and on and on, you have to wonder if we aren’t fast approaching the time when America experiences a political inquisition–a vilient thought cleansing of the American pysche by either the radical left or radical right–a blood bath similar to what happened in Russia early in the last century, Germany in the middle, followed by Mao and his Little Red Book.

        After all, words mean whatever they say they mean–and the terrorist label is rapidly being put upon the political opposition or those who stand in the way of the agenda of those in power. This is from the top down and has occurred throughout history in those nation states rich in secret police, secret courts and secret prisons.

          Oct 20, 2013 20:47 PM

          Common Bj I want to sleep tonight!

            bj
            Oct 20, 2013 20:53 PM

            Me too!

            That’s why I always say my prayers–and more recently, check under the bed!!!!

            But do you see the drift being spearheaded in the mainstream media, their play on word, the migration of the meaning of terrorism. This was their first salvo. Just wait until January…. I seriously don’t the rhetoric will soften.

    Oct 20, 2013 20:50 PM

    Why do they vary so much?

    (And if there’s supposed to be competition in provision, why only 4 providers..? But I guess that’s directed at the wrong people)

    Oct 20, 2013 20:33 PM

    I found this calculator tool very helpful
    http://kff.org/interactive/subsidy-calculator/

    Oct 20, 2013 20:52 PM

    Speaking of government control and manipulation of citizens, I saw this article which should be better known:

    I find these things really disturbing. We need to get a lot more active and focused on what the government is doing to society.

    DHS Whistleblower Censored from 60 minutes #N3

    http://www.youtube.com/watch?v=feHbP4k_tdk

      Oct 20, 2013 20:30 PM

      This site has an Alexa rating of about 650,000.

      It is pretty high (we are about 150K which is a bit better than 4 times stronger).

      The important thing to realize here is that it is not a “network” of any kind.

      Thank you for bringing this up Cecilhenry!

        Oct 21, 2013 21:56 AM

        Cha-ching

    bj
    Oct 20, 2013 20:39 PM

    For your consideration: I received this info in an email from friend.
    They are robbing from Medicare to pay for Obamacare

    Affordable Care Act impact to Medicare Retirees

    Americans differ on Medicare reform. They may disagree on the right future for Medicare. But one thing is certain: Under the current laws regarding the Affordable Care Act (ACA), seniors will pay more—much more—and they will pay this steep price in many different ways, including a loss of access to care resulting from continuing to cut the money paid to doctors and other medical professionals which results in the cutting back of Medicare practices or, in some cases eliminating a doctors Medicare practice altogether. Doctors and other medical professionals are facing a bleak future in the future, due to continued reimbursement reductions and the higher administrative costs of complying with an even larger set of increasingly complex rules and reporting requirements. They have already cut Medicare Part A and Medicare Advantage provider-reimbursement rates to levels that even government actuaries have stated, in print, to be unrealistic. They have instituted a new Medicare tax on the “unearned” income of upper-income Americans (such as investment income) that will not even be exclusively used to enhance the solvency of Medicare. The vaunted Medicare “savings” from Medicare provider payment reductions and other changes enacted through the PPACA will also finance health insurance coverage mandated by the ACA. The bottom line: Medicare “as we know it” is already a thing of the past.

    1) Huge payment reductions that reduce access to care – the Affordable Care Act will reduce Medicare reimbursements by $716 billion over 10 years. These cuts will hit Part A providers such as hospitals, nursing homes, skilled nursing facilities, and hospices, along with Medicare Advantage plans – not due to eliminating “waste, fraud and abuse”. Providers will not be able to sustain continuing negative margins due to the cuts and will have to withdraw from serving Medicare beneficiaries. It is estimated that there will be 15% fewer providers by 2019, 25% by 2030, and 40% fewer providers by 2050

    2) Medicare “savings” are spent on other parts of the Affordable Care Act. Medicare payroll taxes will increase from 2.9% to 3.8% for high income earners and also extends the 3.8% Medicare tax to investment income. This is the largest tax increase in The Affordable Care Act costing almost $320 billion, and it claims to increase the solvency of the Part A trust fund, but that simply is not true. The new tax revenue will be paying for new entitlement spending in The Affordable Care Act.

    3) Medicare Advantage Cuts – $156 Billion will be cut from the program in the next 8 years. Cuts will come by increasing out of pocket costs and imposing a special fee to all health insurance plans. 27% of all Medicare beneficiaries are enrolled in a Medicare Advantage plans, and in 3 years this number will be reduced by 50% due to the rising premium costs, reduced benefits, and plans no longer being offered/available. The alternative will be to join a less generous, traditional Medicare plan with bigger gaps in coverage.

    4) Higher Part B Premiums – Means testing will be used to determine new Part B premiums. Under current law, there are four income adjusted brackets, but will be expanded to nine brackets. These new brackets will result in 25% of all beneficiaries to pay a higher monthly premium. In 2014, beneficiaries will pay an average of $340 more a year in monthly premiums, and by 2017 that number will increase to more than $400.

    5) New Fees – For new baby boomers aging into Medicare, starting in 2017, there is a $25 increase in the Part B deductible. By 2021, the Part B upcharge will be $75 plus a $100 co-payment for home health services in certain cases. In addition, a premium surcharge will be assessed to all new beneficiaries who choose a Medigap plan that includes first-dollar or near first-dollar coverage. This surcharge will result in a 15% premium increase for beneficiaries.

    6) Prescription Drug Costs – The donut hole is slated to close by 2020, which results in a 9% average premium increase for all beneficiaries to do so even though this benefits only 7.4% of the total Medicare population.

    Today in Medicare Part D, private plans and drug manufacturers negotiate a discounted price; it is a market price. The government is not involved at all in these negotiations. The result: Market efficiencies have been dramatically successful in controlling Medicare drug costs and stabilizing the growth in seniors’ premiums.

    The President’s recent budget proposal, however, would require drug companies to pay the government the difference between the privately negotiated Medicare price and the price (the “rebate”) the government sets for the sale of drugs in the Medicaid program for low-income Medicare beneficiaries. These seniors today receive subsidies, and they account for about 30 percent of all Medicare Part D enrollees.

    The President’s proposed Medicare “rebate” would act as a tax on the drug companies doing business with the federal government, but it would also function as a price control on Medicare drugs. In other words, the new rebate policy would distort the Part D market by fixing artificially low prices for one group of beneficiaries, and creating powerful incentives for the companies to try to make up the revenue losses by charging higher prices in other sectors of the Medicare market. This means that most seniors would experience increased premiums anywhere between 20 percent and 40 percent.

    7) The ominous and looming power of IPAB, a board formed to oversee the Affordable Care Act, will consist of 15 unelected and unaccountable bureaucrats, charged with meeting a newly created budget target in Medicare. When Medicare spending surpasses the target, IPAB will have to make recommendations to reduce Medicare spending. The trustees project the much-hated IPAB will need to step up and make recommendations for the first time in 2016.

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