Should we continue letting the “ludicrously dishonest” (well stated Avik Roy) presumptions of the ACA shape the future of our healthcare delivery system?
I think not.
Prior to the ACA, 6 states (Maine, Massachusetts, New Jersey, New York, Vermont and Washington) required guaranteed issue individual plans. In 2010 these states had some of the highest individual insurance rates in the country:
There were another 35 states that offered guaranteed issue high risk pools:
That means 41 states already had access to guaranteed issue individual health insurance plans prior to the ACA.
Here’s another point… around my part of the country (KS / MO) the guaranteed issue plans available prior to the ACA were less expensive than the non-subsidized 2017 individual plans!
ACA proponents are quick to point out that there are more people insured now than prior to the ACA. What they fail to mention is that most of those gains are from new Medicaid enrollments (15 million) vs. state or federal Marketplaces (11 million):
Since I don’t just want to be the one pointing out problems without offering a solution, here are my recommendations for an ACA replacement plan:
Repeal the ACA… All of it
Individual mandates and employer mandates would be gone (no more 1095-C forms… would anyone be disappointed?)
All individual health insurance premiums should be tax deductible just like employer group plans are tax deductible
Employers should be able to contribute to individual health insurance premiums or group health insurance premiums pre-tax so employees can choose to keep their individual plans if they prefer
States should decide if they want dependents covered through age 26
States should decide if they want to require all individual plans to be guaranteed issue
States that don’t require guaranteed issue should be required to have a high risk pool
Since government programs are the nearest thing to eternal life we’ll ever see on earth (Reagan / Byrnes), I am assuming subsidies are here to stay.
These high risk pools would be partially subsidized by states and the federal government to help make them affordable
Low income people would receive reduced tax credits / subsidies to purchase whichever health plans they want (no minimum essential coverage / minimum value requirements)
Keep in mind, the subsidies could be reduced (if not eliminated) for a lot of people when the cost of insurance goes back down to pre-ACA rates.
States should decide if they want Medicaid expansion (and be willing to pay for it themselves)
Include tort reform legislation limiting frivolous lawsuits and capping malpractice settlements
Include Price Transparency legislation letting patients know up front what tests and procedures will cost
And since health insurance does not equal health care, there needs to be fundamental changes to physician access:
Direct Primary Care’s (DPC) monthly membership fees should be allowed as an eligible HSA / FSA / HRA expense (are you surprised I made it this far before mentioning HSA?)
States should be given block grants to explore more effective health care delivery systems (i.e. HSA & DPC) for Medicaid, Medicare, and VA
Allowing healthy Americans to purchase underwritten health insurance plans at substantially lower rates has been called discrimination by some. That is true. Insurance companies discriminate.
What would happen to auto insurance rates if everyone paid the same regardless of driving records or previous accidents? Most would pay substantially higher, some would pay less.
What would happen to life insurance rates if everyone paid the same regardless of weight / tobacco use / health issues? Most would pay more, some would pay less.
Providing access to high risk individual insurance plans for the few that need it while allowing healthy individuals to purchase lower cost underwritten plans would make individual health insurance affordable again.
According to dictionary.com, affordable means, “believed to be within one’s financial means.” Obviously the politicians in Washington took this definition literally when they passed the Affordable Care Act.
According to an article in Forbes this past week, individual health insurance premiums will increase by an average of 41% across the country. Offering subsidies to a small subset of Americans to help offset substantially higher rates for everyone else doesn’t make sense. However by this definition, all they needed to do was to make health insurance within one’sfinancial means. And as of yesterday we know at least 5 have enrolled so far.
The Manhattan Institute put together an excellent interactive map that shows pre and post ObamaCare rates for each state:
Manhattan Institute – Know Your Rates
There are winners and losers in ObamaCare.
Winners: unhealthy people that were forced into expensive state pool guaranteed issue health plans that can now get any plan they choose without proof of insurability Winners: low wage earners that qualify for expanded Medicaid or a substantial premium subsidy (and actually make it through healthcare.gov)
Losers: everyone else
I guess it all depends on what your definition of the word “Affordable” is…
While talking about healthcare reform with my wife, our teenage son started asking questions. We tried to answer him in a way he could understand, but we just weren’t getting through. Health insurance is a foreign language to him. However he is dreaming about which car he will soon purchase. So we introduced ObamaCare to him by way of the Affordable Car Act… a.k.a. Obama-Car:
Obama says his reforms will include additional mandated essential health benefitsANDreduce health insurance costs by $2500 per family. That’s simply impossible. That would be like requiring all 2014 cars to be either hybrid or fully electric (more energy efficient), include run-flat tires with electronic low-pressure warnings (better fuel economy), HID headlights (better night vision), GPS (less fuel wasted getting lost), and satellite radio (because it sounds good) at a lower price.
Yes, these OPTIONS are nice if you have the money to pay for them, but they should remain OPTIONS, not REQUIREMENTS.
Instead of a Chevy Cruze starting at $17,000 the new Obama-Car compliant version (such as the Chevy Volt) would be priced around $34,000.
Obama claims these new cars will only be paid in full by the “millionaires and billionaires” because anyone making less than 400% of the poverty level will have some (or all) of their car subsidized by the government.
Now let’s talk about used cars…
Let’s say you like your existing car. As long as you owned it before March 23, 2010, you would be allowed to keep it. You cannot make any changes to it or it would no longer be “grandfathered” and you would be forced into buying a new Obama-Car next year or pay a penalty.
If it doesn’t get good enough gas mileage or include all the new Obama-Car required Overpriced Bureaucratically Authorized Mandated Add-ons (OBAMA), then you would also be penalized.
Our son is glad Obama-Car doesn’t exist. He can save his own money to purchase any car he chooses… as long as Dad (not Obama) approves of it!
Dislaimer: This article was never meant to suggest Obama-Car legislation is needed or should ever become law.
We have assembled several calculators available today that can help make preparing for 2014 much easier.
Although the employer mandate has been postponed until 2015, the individual mandate still applies. Anyone not covered by Minimum Essential Coverage next year could be subject to a penalty tax of the greater of $95 per uninsured or 1% of household over the filing threshold:
All new health insurance plans will be guaranteed issue and required to include essential health benefits which will greatly increase premiums. The Public Exchanges (both state and federal) are to be open in October. People making less than 400% of poverty level could be eligible for subsidized health insurance plans if they are purchased on the State / Federal Exchanges. It is estimated that 26 million should be eligible for these subsidies, however only 6 million are estimated to enroll in 2014. Here is a calculator to see if you would be eligible for a subsidy:
Small businesses with less than 25 employees that earn less than $50,000 average annual salary and pay at least 50% of their health insurance premiums could also qualify for a small business tax credit. For 2014 the tax credit is only available if the plan is purchased through the Small Business Health Options Program (SHOP) Marketplace:
Don’t wait until it’s too late. If you are relatively healthy, you could save money by applying now BEFORE all plans are guaranteed issue and are weighed down with expensive government mandated benefits next year.
Or you can call an independent health insurance agent at 913-432-2732.
Although the employer mandate has been delayed 12 months, businesses are still concerned about how to minimize (or eliminate) their exposure in 2015. This calculator helps calculate how many full time equivalent (FTE) employees you have and what your potential penalty might be if/when the employer mandate is reinstated:
We already have a physician shortage. There will be 30 million newly insureds in 2014 searching for a family practice physician due to ObamaCare. This will make the shortage worse.
The HSA GUY Scott Borden and Mike Breitenbach discuss how physicians can move to a Direct Pay practice so their patients can have greater access to medical care on their talk radio show. Direct Pay is the affordable version of “Concierge Medicine”:
Direct Pay Consulting offers physicians a turn-key transition plan and then educates their patients about how to understand their health insurance options. Switching to HSA qualified plans will save a tremendous amount of money on health insurance and taxes. And those premium savings can help a significantly higher number of patients afford a Direct Pay Physician.
If you are a physician concerned about lower reimbursement fee schedules from insurance companies and having government bureaucrats telling you how to run your practice then you should contact Direct Pay Consulting (913-980-4694). We will help you get back to working for your patients instead of insurance companies!
Scott: I am a passionate Health Savings Account (HSA) expert. My background has been in health insurance marketing and management for 23 years. I have been heavily involved with Consumer Driven Healthcare for the past 15 years. I have been both a talk radio show host and guest on hundreds of shows over the past 8 years. I have also been featured on several television broadcasts and been a guest speaker for dozens of organizations.
Mary Pat: Your company is called Direct Pay Consulting and you help primary care practices transition to a Direct Payment Care (DPC) model – will you explain what that model is?
Scott: DPC is where the patient pays the physician directly without any third-party insurance company or government program being involved with the payment or treatment plan. It is also known as Direct Primary Care or simply Direct Pay. This usually involves an annual membership fee and sometimes a per visit fee. There are hybrid versions available where insurance is billed above the annual membership fee, but we know any payment from an insurance company or government entity will include intrusive control over how the physician practices medicine. And it significantly increases paperwork.
The original version known as “Concierge Medicine” started in the late 1990′s in Seattle and has been slowly picking up steam. Both Concierge and DPC allow physicians the time necessary to treat the root cause instead of simply medicating symptoms. Additional benefits include same or next day appointments, less (or no) waiting times, cell phone / email / video conferencing access, coordination of care with specialists and even house calls. Concierge physicians may charge $1,500 – $20,000 or more per year so it may be cost-prohibitive for many Americans. DPC offers nearly the same benefits as a Concierge physician at an affordable rate almost anyone can afford.
Mary Pat: Why do you think now is the right time for this model?
Scott: There are many things currently happening that each point towards DPC as the solution. Together they are turning what would have been a gradual movement into a potential mass exodus.
The first issue frustrating all physicians is decreasing reimbursements. The “Doc Fix” is unlikely this year as Medicaid payments will match Medicare in 2014 meaning the fix would be much more expensive this time. The odds are further reduced by the lack of an election this fall pressuring congress to delay the planned cuts again. Many independent physician practices are being bought by larger hospital groups. Since reimbursements are usually not tied to the amount of time spent per patient, these groups typically pressure physicians to see more patients per day. They have been known to require treatment plans based on maximizing reimbursements instead of better patient outcomes. So unfortunately many doctors today feel like they’re working for insurance companies and hospitals instead of their patients.
Second is the shortage of physicians. Nearly 50% of a primary care physician’s time is spent writing letters and filing claims in order to receive payments from insurance companies. And whatever payments they actually do receive seem to arrive late. Forecasts show that physician access will be significantly worse once the Affordable Care Act (ObamaCare) subsidizes health insurance for 30 million people that will be searching for a primary care physician instead of using the Emergency Room for minor medical needs. This will even further reduce the amount of time available with each patient.
And the most important driver is the pent-up demand from patients. People are afraid ObamaCare will take their doctor away. They already hate being being herded through a system of long waits and limited access, and they know it’s not going to get any better. Many middle class Americans are willing to pay a little more to receive excellent medical care from a doctor they have chosen.
Mary Pat: How can physicians evaluate whether DPC is a good fit for them?
Scott: Physicians who want to spend more time with patients should consider DPC. Physicians being overworked and underpaid should consider DPC. Physicians that don’t want to be told how to run their practice or how to treat patients should consider DPC. Physicians concerned about ICD-10 and healthcare reform should consider DPC.
Although most physicians would like to transition to DPC, very few will be able to without the typical “income dip” that occurs when all insurance and Medicare reimbursements stop.
Well established practices with a large number of loyal patients should consider transitioning immediately. However some physicians are simply wanting to semi-retire without reducing income, so DPC is an excellent option for them too. Every situation is different.
Mary Pat: What is the scope of services you provide?
Direct Pay Consulting provides all of the services a physician needs to convert his/her practice:
Conversion planning and execution
Patient insurance education and guidance
All announcements and ongoing communication
Patient sign-up management
Patient agreements
Custom web pages for the doctor
The idea is for the doctor to continue to do what they do best while we manage the conversion and ongoing patient participation. We have partners that can provide services from setting up an office to management of day-to-day operations for those doctors who are breaking away from a group. All of this is completed at fair and reasonable costs.
Mary Pat: Is it scary for physicians to take the “leap of faith” necessary to make the switch over from fee-for-service to DPC?
Scott: Actually I think the scary option would be to remain in the current system allowing insurance companies and government bureaucrats to take over virtually every business and patient decision! Many doctors who take on the conversion as a lone wolf find that it takes much more time than expected. They experience many pitfalls and delays. Many times they are forced to completely stop their practice to allocate the time needed which is very costly. If they don’t have enough patients sign up then physicians are forced to begin the even more difficult process of finding new patients. The idea behind Direct Care Consulting is to have the doctor continue to file insurance until a predetermined number of patients sign up thus limiting the risk.
Mary Pat: What expenses are eliminated when DPC is adopted? What new expenses, if any, arise? Are any staff positions eliminated?
Scott: Each conversion is vastly different. The primary expenses that go away are those related to coding and filing for payment from insurance providers and government agencies. Rarely are there any new expenses. For many practices this can eliminate one or two clerical positions.
Mary Pat: How does it work if physicians want to continue to see Medicare patients? Does the physician have to opt out of Medicare?
Scott: No physician would be forced to opt out, however most DPC physicians will choose to stop taking Medicare. They don’t want anyone (let alone a government agency) dictating how they are to treat patients. Accessing some benefits outside the DPC practice for Medicare patients such as durable medical equipment might be more complicated, but not impossible. Medicare patients may find it more difficult to find physicians willing to accept them in the near future, so Medicare patients could very well become the fastest growing adopters of DPC.
Mary Pat: I’ve heard you are called the “HSA Guy.” What do HSAs have to do with DPC?
Scott: HSA-qualified High Deductible Health Plans (HDHP) offer the catastrophic protection everyone needs at a significantly lower cost than low deductible co-pay health insurance plans. I call HSA-qualified plans “DPC friendly” since they are not allowed to have office visit co-pays which wouldn’t be accepted by a DPC physician anyway. This insurance premium & tax saving tool allows many middle income patients to transition to a DPC practice without breaking their budget. HSAs make DPC affordable for (almost) anyone.
Mary Pat: Why did you transition from 20+ years of health insurance consulting into Direct Pay Consulting?
Scott: Last year I had no idea how much pent-up demand there was from both physicians and patients for DPC. Then I was approached by Dr. Douglas Brooks who has been a long time talk radio show listener that was ready to go Direct Pay.
But Dr. Brooks’ wife wasn’t convinced. She was concerned about the dreaded income dip that normally accompanies quitting insurance and Medicare cold-turkey. She was especially concerned since Dr. Brooks was already one of the top 1% compensated primary care physicians in the country. But Dr. Brooks was so fed up with the various hospital groups he had worked for that he was willing to go for it. He asked me for my help and we put together a business and marketing plan.
I felt we needed 1,000 patients to sign up in order to replace his salary. He reached that level in three months. Let’s just say Mrs. Brooks is no longer concerned. I now know this level of success is extremely rare. I’m not sure it has ever been done before. Ignorance is bliss. The biggest reason he was able to transition so quickly is because he is a very popular physician with a large number of loyal patients. Many of them attended one (or both) of our seminars.Our insurance office fielded hundreds of phone calls from his patients along with dozens of appointments, helping them understand why they should switch to HSA- qualified plans. Dr. Brooks estimates 40% of his DPC patients are now paying his fees with tax-deductible HSA dollars. HSA participation is around 5% nationally.
We know the direct patient contact necessary for a successful transition will limit the number of physicians we are able to work with to a maximum of 10 this year. There are currently less than 5000 DPC physicians. Yet there are over 300 million Americans that want more access to their physician. HSAs and DPC make it affordable for almost everyone.
Scott Borden is the founder of Direct Pay Consulting and can be reached at 913-980-4694 or at SBorden@DirectPayConsulting.com.
A Health Savings Account (HSA) is a tax-deductible account to which you can contribute to save for future medical expenses or to pay for any day-to-day, qualified medical expenses permitted under federal tax law...[More]
My HSA Guy 