For those readers who skim blogs, I think it would be a excellent exercise for the reader to settle down and watch an entertaining “You Tube” by Dr. Regina Herzlinger describing the power of Consumer Driven Healthcare.
McKinsey consultants have claimed that administrative inefficiency of the healthcare system accounts for $500 billion dollars of excess cost per year to the healthcare system. I think it is closer to $250 billion dollars a year.
The solution to the problem is easy. The social contract for medical care should be between patients and physicians. Consumers should owned their healthcare dollars. They should be given incentives to be responsible for their medical care and maintaining their health. Chronic disease complication rates would fall, obesity would be decrease and the cost of healthcare would decrease.
The role of government should be to empower consumers to control their medical expenditures and maintain their health. The government should level the playing field between stakeholders. It should provide education and subsidies to those who need it. The government should teach them how to control their healthcare dollars and maintain their health. Then government should get out of the way.
Cecelia and I went to flea market in North Central Texas on Memorial Day. There was a large crowd. I would estimate that more than 60% of the people were grossly obese and 30% were moderately obese.
There was a long line at the fast food restaurant.
The life and healthcare insurance industries are not exhibiting the social responsibility they claim. They are in business to make a profit. The fast food industry is a profitable business. Why not invest in it?
President Obama ought to be investing taxpayers’ dollars for healthcare reform in convincing the public to not support the fast food industry.
The appeal of fast food is it is cheaper and more filing than fresh food such as fruits vegetables and chicken and requires no food preparation. The food also contains lots of salt and sugar which appeals to the tastes buds. Excess salt is a contributor to the onset of hypertension and sugar is empty calories.
Hi Stan, You are assuming that patients, especially, will be willing to admit they might get sick and take steps to prevent it. I can’t even get overweight male diabetics to lose weight. All cigarette smokers know that smoking is bad for them.
I replied by asking “how much he was paying his overweight male diabetic patient to lose weight.”
The problem of obesity can be solved. It will take a societal change of cultural and attitude toward food and exercise. It will take innovative incentives. The ideal medical saving accounts provides that incentive.
The government has to develop incentives, and not penalties for the farm and food industry to reverse the production of obesity producing foodstuffs.
To some of us the incentive to stay healthy is enough. However, it is very difficult to eat healthy with all the advertising and food stimuli coming at us all the time.
I saw Ross Carlson before he started his fitness program (see photo). He told me about his fitness program.
“ I’ve been hesitant to write this post for quite a while as it feels rather self-serving. But as I’m ending phase two of my training program and now entering what I’m calling phase three I figured it was time for a little reflection.
Phase 1 If you’ve known me for more than 3 years you know I used to be fat. Hey, let’s not dance around it, I was fat.
Fortunately for me I’d finally had enough and decided to finally get healthy. This is what I call phase one of my fitness program or really fitness progression.
I tend to be fairly obsessive with things I care about and fitness has been no difference. My first goal was to lose weight – and a lot of weight.
I did two very simple things to accomplish this: I ate significantly less and exercised significantly more (that is to say I finally started exercising regularly). I cut my daily caloric intake to around 1000 calories and added in cardio work, mostly cycling. I continued on this program for roughly 10 months to reach my first goal.
I guess it’s time for some numbers huh? Wow, these are pretty scary: (I’m 5’11” by the way…)
So in those first 10 months I lost roughly 90lbs total, 10” off my waist, 65lbs of fat (and 22lbs of muscle). It was that last stat that made me begin phase 2 about 3 months ago.
Phase 2 and 3 are combinations of dynamic fitness training to increase muscle mass and cardiovascular fitness.
The key to exercise is to make fitness a way of life.
The key to decreasing caloric intake is to make eating less a way of life.
The key to weight loss is to exercise and burn more calories than you eat.
Nothing is new in the laws of thermodynamics. The patient must be responsible to and for themselves.
Final Thoughts I plan on blogging more regularly about this subject now that I’ve finally published this post. I hope to write about thoughts on eating, exercising, and my journey through all this. If you’ve got questions or comments please let me know, they can be very motivating. And if you’re considering doing something similar to this START NOW. There is no better day than today to be healthy.
Oh, and now to leave you with a picture that I’m still scared by. Left is old,
Fat Ross. Middle is thin Ross from about 3 years ago. Finally on the right is me a few days ago. Just wait until you see me in 90 more days.
Hooray for Ross. Nice job. I am very proud of you.
The majority of Americans agree with President Obama’s goals. Americans want affordable universal high quality healthcare. President Obama’s healthcare reform bill will not accomplish these goals.
Our healthcare system is broken because prices are out of control. President Obama’s healthcare reform bill with a mushrooming government bureaucracy will not control prices by competition. It will try to control prices by regulations and force. Price controls never work.
Previous behavior is a predictor of future behavior. It follows that previous healthcare system reform failures are a predictor of future healthcare reform failure.
Both the Massachusetts healthcare reform plan and Obamacare mandate individual healthcare insurance.
If individuals do not have insurance they must pay a penalty.
Most businesses are required to participate or pay a fine.
Both healthcare reform plans rely on government-designed purchasing exchanges (healthcare insurance exchanges)
The healthcare insurance exchanges are supposed to provide a vehicle to control private health insurance.
The uninsured are covered by the expansion of Medicaid and with Obamacare the expansion of Medicare.
Qualified citizens receive healthcare insurance subsidies to help pay for their mandated healthcare insurance policies.
The state of Massachusetts has set up many new boards and committees to oversee and administer the healthcare reform plan. The added bureaucracy has failed to control costs.
I predicted the Massachusetts plan would fail at its onset. It has been plagued with cost overruns from the start. I cannot image President Obama’s plan can be budget neutral after ten years. I suspect many Americans can’t image it either. I think the Scott Brown election has given America the notion that the citizens of Massachusetts don’t think Obamacare can be successful.
Why did the Massachusetts Healthcare Reform Plan fail?
The healthcare reform plan is administered by the healthcare insurance industry. It controls the healthcare dollar and determines the premiums based on defective accounting rules. These rules permit the healthcare insurance industry to overestimate expenses and underestimate reserves. The result is increased premiums.
No one has the political will to challenge or change these rules. The rules permit the healthcare insurance industry to declare a loss while it is removing sixty five cents out of every healthcare dollar from the healthcare dollar pool.
There are 410,000 people who are newly insured in Massachusetts. Of those 200,000 are fully subsidized by Massachusetts state insurance exchange.
Policy makers underestimated the number of people that would qualify for subsidy.
3% of the population remains uninsured. The total 140,000 uninsured are required to pay a penalty. Half (70,000) uninsured cannot afford the premiums or penalty and receive a waiver.
The state’s premiums have increased every year since the onset of healthcare reform. A typical family of four’s annual premium costs almost $13,788, the highest in the country. This is twice the cost of premiums in Texas. The premiums are 27% higher than the national average.
This cost does not include out of pocket expenses.
Massachusetts regulations serve to eliminate competition in the healthcare insurance market.
Mandates dictate the services needed to be covered.
Healthcare insurance vendors are required to sell "just-in-time" policies even if people wait until they are sick to buy coverage.
Patients game the system by purchasing health insurance when they need it. Patients then drop insurance a few months later and pay the less expensive penalty. The same will apply to President Obama’s plan.
Massachusetts’ safety-net hospitals are treating a disproportionate number of lower-income and uninsured patients. State compensation of these safety-net hospitals has been reduced under the new healthcare plan. It is only a matter of time before the safety net hospitals will declare bankruptcy. The alternative is to increase state taxes further. The result is people will move out of Massachusetts lowering the tax base
There is a "critical shortage" of primary-care physicians as a result of increasing the number of people covered and an increase in demand for medical services.
Physician compensation is decreasing. Physicians are fleeing the state. Patients cannot get doctor appointments.
New patients wait 44 days to get an appointment with a primary-care doctor. A secondary market for primary-care doctor appointments is developing. People are selling their appointment times to patients.
Appointment time shortages have led to an increasingly expensive emergency room visit for basic medical services. Emergency room visits increased 7%. More than half need emergency room attention. ER visits are very costly.
President Obama gave the state of Massachusetts an 8 billion dollar bailout to help cover healthcare reform expenses. The healthcare insurance industry benefited by the stimulus bailout.
The state has refused to permit the insurance industry to raise rates. The insurance industry will leave the state or decrease reimbursement for services. The results are obvious.
If you do not fix the defects in the healthcare system you will not fix the financial difficulties. People must own their healthcare dollar, be responsible for their own care and have the freedom to choose. All this adds up to consumer driven healthcare using the ideal medical saving accounts.
California Senator Diane Feinstein speaking on health care on Monday April 12, 2010 said;
“I’ve gotten 90,000 emails and faxes on the health care bill and over 85,000 of them are against it. After all the debate we’ve had, I can’t believe so many people still don’t get it!"
What debate?
President Obama’s healthcare reform debate was one sided and not bipartisan.
Didn’t Nancy Pelosi say; “Americans will understand the bill once it is passed.”
Maybe Diane Feinstein doesn’t get it?
If 94.4% of her constituents are against the bill, maybe 94.4% of her constituents will vote against her in the upcoming election.
The will of the people is being ignored by President Obama and the Democrats.
Why?
The Democrats believe:
Americans need to be guided by big government in order to survive in our complex society.
Big government is superior to free enterprise.
Bureaucrats are more important than entrepreneurs.
Planning is more effective than innovation.
Redistribution of wealth and services are more important and much fairer than individual success.
Americans know that big government does not work. The government’s role should be to make the rules and then get out of the way. If the rules do not provide a level playing field the rules should be modified.
There are many examples of big government failure. One notable example is the U.S. Postal Service. It is going bankrupt while Fed Ex and UPS are successful.
I am sure President Obama wants to do the right thing.
However, he is going about it in wrong way. He is piling new healthcare reform on top of a failed healthcare system. (Medicare and Medicaid). His healthcare reform law cannot work. It can only waste more money
Republicans have done no better. They have expressed their opinions within a framework established by President Obama and the Democrats rather than presenting a bold and new approach to healthcare reform.
The American people know President Obama’s healthcare reform law will fail at a high cost to the economy and the nation’s welfare. The Tea Party might represent the peoples’ rebellion. The movement is frightening both the Democrats and Republicans. Republican like to think the Tea Party is an arm of the Republican Party. I think both parties will be in for a surprise.
President Obama cannot throw money after a failed system and expect the system to improve. The healthcare system will not improve until the primary stakeholders (consumers and physicians) are provided with incentives and the ability to be innovative.
The incentives should be directed to the patients and not the healthcare insurance industry or hospital systems. In a healthcare system Patients are First. In President Obama’s healthcare law big government and the secondary stakeholders are first.
Government should not require people to buy insurance. People must be responsible for themselves even if government gives them the money. I believe it is fine to provide for people who cannot afford healthcare insurance. However, the incentive must be financial. Healthcare reform will work only if it is consumer driven.
The healthcare insurance industry must be reformed. President Obama’s healthcare bill does not reform the healthcare insurance industry. The law does not revise the healthcare industry’s accounting rules. The healthcare industry will continue to take sixty five cents out of every healthcare dollar.
President Obama must provide incentives for to buy healthcare insurance. Instead the law imposes penalties if consumers do not buy healthcare insurance.
President Obama must change American’s eating habits using public service announcements. He must change the way the farm industry is subsidized. The obesity epidemic is devastating the healthcare system.
President Obama must deal with the expense of defensive medicine. The only way to decrease defensive medicine is through effective malpractice reform.
Forcing Americans to be dependent on big government does not work. It creates all sorts of unintended consequences. President Obama should encourage an environment of self-reliance, innovation and independence.
None of the important issues needed to have effect a positive impact on the healthcare system are addressed in President Obama’s healthcare reform bill.
President Obama’s healthcare reform plan will not repair the healthcare system. It will not provide universal coverage, it will not provide affordable coverage and it will not increase the quality of care.
Not repairing the healthcare system is unacceptable. I have proposed an ideal medical saving accounts that will align all the stakeholder’s interests while not letting any stakeholder take advantage of the other. It is dependent on appropriate, enforceable state and federal rules and regulations that permit the market system to flourish and maintain freedom of choice.
Government should make rules to level the playing field for all stakeholders and then get out of the way. An efficient healthcare system can be created by permitting the consumer to drive the healthcare system.
Many employers have adjusted to the present healthcare rules and regulations. The result has been greater dysfunction in the healthcare system .
As healthcare insurance premiums increased employers could not afford full coverage for their employees. They changed to providing partial insurance coverage. Employees are required to pay for a significant portion of their insurance policy. The money comes out of the employee’s salary with pretax dollars. .
Other employers have provided high deductible insurance for their employees. The initial deductible costs are paid for with after tax dollars and have been an unaffordable burden to employees. Some cannot afford to pay the deductible and avoid care.
This scheme has the same effect on employees’ purchasing power as a federal tax increase. It should be viewed as a hidden tax increase.
There are many ways to fix the inequities to consumers in the present healthcare insurance system. .
These include changes to HIPAA and COBRA provisions to ensure portability between employer insurance plans,
Measures to prevent higher premium upticks for customers moving from group to individual insurance markets,
Ensuring that market entrants only face a single risk evaluation,
Opportunities for the uninsured to opt back in to the system under new protections.”
Correct accounting standard for incurred claim and Medical-Loss ratio.
Instituting ideal medical savings accounts with patients owning and controlling their healthcare dollars would result in consumers being educated purchasers of healthcare services. Permitting consumers to retain the unused portion of the deductible in a tax retirement trust account would motivate the consumer to have a healthy lifestyle.
Developing rules and regulations that calculate healthcare insurance premiums for the entire population and not rates determined by age or pre-existing illness.
Taxing employers appropriately so that they provide adequate healthcare insurance for their employees with tax deductible dollars.
9. Creating malpractice reform that has caps on liability. It will decrease defensive medicine and over testing by physicians in order to avoid malpractice suits. This simple rule could decrease healthcare costs by $750 billion dollars a year.
“STEPHANOPOULOS: The president has drawn one other very red line in the sand, that he won’t sign any health care bill that increases the deficit.”
Next let’s examine the record of Congressional forecasters in predicting costs. Start with Medicaid, the joint state-federal program for the poor. The House Ways and Means Committee estimated that its first-year costs would be $238 million. Instead it hit more than $1 billion, and costs have kept climbing.
In many states a person living in poverty but earn more than the poverty level defined in 1955, does not qualify for Medicaid coverage.
Medicaid now costs 37 times more than it did when it was launched—after adjusting for inflation. Its current cost is $251 billion, up 24.7% or $50 billion in fiscal 2009 alone, and that’s before the health-care bill covers millions of new beneficiaries.
Medicare has a similar record. In 1965, Congressional budgeters said that it would cost $12 billion in 1990. Its actual cost that year was $90 billion. Whoops. The hospitalization program alone was supposed to cost $9 billion but wound up costing $67 billion. These aren’t small forecasting errors. The rate of increase in Medicare spending has outpaced overall inflation in nearly every year (up 9.8% in 2009), so a program that began at $4 billion now costs $428 billion.
Even if one gave President Obama the benefit of the doubt on his budget estimates his plan will not repair the real defects in the healthcare system.
There is strong historical precedent that his new entitlement program will create large deficits no matter what tricks he plays with the numbers.
As the healthcare debate heats up the meaning of consumer driven healthcare (CDHC) needs repeating. The true meaning of CDHC has been bastardized by the healthcare insurance industry as represented by Health Savings Accounts (HSA).
The healthcare insurance industry feared that if Medical Savings Accounts dominated it would lose control of the initial healthcare premium dollars. The result would be a decrease in profit and an increase in price competition and real price transparency.
The reality would be America would have universal healthcare in a more efficient healthcare system. The system would be more efficient because it would be driven by the consumer for their benefit and not a third party payer. A more efficient system will maintain healthcare insurance industry’s profit while permitting a decrease in healthcare system costs.
HSAs place limits on consumers’ incentives. All of the healthcare premium dollars are eventually paid to the healthcare insurance industry.
Our economic recession along with increasing unemployment have set the stage for consumers to accept any help government will provide. Enter a single party payer and all its problems. Since Medicare and Medicaid have proven to be unsustainable, it is foolish to throw money at a failing system. It is time to revitalize the system.
“The idea behind consumer-driven health plans is to transform members into healthcare consumers through education and place more responsibility on the individual.”
“ Studies show that the percentage of Americans insured in CDHPs is still in the single digits, largely for two reasons: Consumers simply don’t understand the tax-free savings accounts that are connected to CDHPs, and few health plans are providing cost and quality information to allow consumers to compare doctors, hospitals, and treatment options.”
Wrong!
Consumers do not see a financial advantage of the HSA because there are none. The money has to be used to pay present deductibles and future deductibles. There is no reason the future deductable will not be increased reducing the present value of the money in their health savings account. The healthcare insurance industry wants health savings accounts to fail. It feels its margins are presently excellent and does not need a change.
“More than one-quarter those respondents said that HSAs are difficult to open/manage, or too complicated, or they simply didn’t understand the accounts.”
Healthcare insurance would convert to real at risk insurance. Consumer would own and control their healthcare dollar. The government could teach the consumer to use the healthcare dollar wisely. The government could provide clear price and quality transparency. It would force all the secondary stakeholders to compete for the consumers’ healthcare dollar. This competition would force an increase in efficiency and decrease in administrative waste.
The government should act as the facilitator for the competition. The time has come for politicians to do something for consumers and not for secondary stakeholders.
Since congress did not want to help President Trump repeal Obamacare and fix the healthcare system, he decided to quietly repair the healthcare system by himself. He has no choice. Obamacare will self-implode and disappear.
President Trump has kept his steps toward healthcare reform under the radar. It is all published and there for everyone to see.
President Trump is hoping that after the 2020 election he will have a friendlier congress. A congress that wants to do something to help him help American consumers of healthcare obtain affordable healthcare.
Consumers need relief from the Obamacare disaster. Obamacare has caused increased dysfunction on top of an already dysfunctional healthcare system.
Obamacare has caused a previously unaffordable healthcare system to become more unaffordable.
I hate to say it. I predicted Obamacare would fail in 2010. Basically Obamacare did not align stakeholders’ incentives.
President Trump has taken important steps to repair the healthcare system. He has brought back the power of “Associations.” Associations now have the ability to negotiate with healthcare insurance companies and sell healthcare insurance to its members.
In addition, Associations now have the ability to offer its members healthcare insurance at pre-tax dollars. This is a very big deal. Previously individuals seeking individual insurance had to pay for that healthcare insurance with post-tax dollars.
Instantly, healthcare premiums are effectively reduced to consumers by 20-40% using pre-tax dollars. This make present premiums more affordable.
Associations are growing very rapidly as final rules are being created to make their healthcare insurance available. The significance of Associations has been largely ignored by the mainstream media.
Associations will create competitiveness among healthcare insurers and help individuals, small business and even giant corporations eliminate the need to negotiate and provide healthcare insurance to their employees. It might even help the government’s unsustainable programs such as Medicare, Medicaid and the VA rid itself of these unsustainable programs.
The traditional mainstream media has been busy publicizing the socialist concept of “Medicare for All.”
I have pointed out that “Medicare for All” doesn’t work. It has never worked in a financially sustainable way for many countries. In countries that have socialized medicine consumers are dissatisfied because there are long waiting times and a shortage of the access to medical and surgical care.
Unfortunately, our leftist politicians are either ignoring the truth or do not know what they are talking about. The traditional mainstream media are simply acting as puppets for our leftist Democratic politicians who want to control the healthcare system.
Everyone knows the larger the bureaucracy the more inefficient the system. The VA healthcare system is a perfect example of this statement.
“Last week, the executive order was initiated that will empower consumers in the individual healthcare insurance market and those consumers in the small corporations to purchase healthcare insurance through associations. It will allow the employers in small corporations to pay for their employees the healthcare insurance through the Associations with pre-tax dollars.”
“It will level the playing field to enable individuals in both groups to negotiate healthcare insurance premium prices through their associations with the same purchasing power that large corporations have.”
It could also work for consumers working for large corporations. Those employees who are displeased with their corporate provided healthcare insurance coverage can change to association provided insurance.
The new rules can potentially get employers out of the healthcare insurance providing business.
These new regulation has had little coverage in the New York Times, network television or any other mainstream media.
The traditional main stream media have been pushing the Democratic Socialists’ idea of “Medicare for All.”“Medicare for All” cannot work.
“On Thursday June 20th 2019, the Department of Health and Human Services announced a final regulationthat allows businesses to fund employees who buy health insurance on the individual market–something that until now has been illegal.”
“The U.S. Departments of Health and Human Services, Labor, and the Treasury issued a new policy that will provide hundreds of thousands of employers, including small businesses, a better way to provide health insurance coverage, and millions of American workers more options for health insurance coverage.”
Since this new policy is a President Trump initiative, the elites in the media must have concluded that is a silly policy and it cannot work.
“ The Departments issued a final regulation that will expand the use of health reimbursement arrangements (HRAs). When employers have fully adjusted to the rule, it is estimated this expansion of HRAs will benefit approximately 800,000 employers, including small businesses, and more than 11 million employees and family members, including an estimated 800,000 Americans who were previously uninsured.”
A close study of Health Reimbursement Arrangements (Associations) will make it clear that these numbers are correct. In fact, these estimates might be a gross underestimation of increased number of consumers with healthcare coverage.“Under the rule, starting in January 2020, employers will be able to use what are referred to as individual coverage HRAs to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market, subject to certain conditions. … Individual coverage HRAs are designed to give working Americans and their families greater control over their healthcare by providing an additional way for employers to finance health insurance.”
Associations allow everyone to be participants in the large corporation negotiating healthcare market. It allows consumers to avoid the trap of large, bureaucratic and by definition inefficient government control healthcare.
“The HRA rule also increases workers’ choice of coverage, increases the portability of coverage, and will generally improve worker economic well-being. This rule will also allow workers to shop for plans in the individual market and select coverage that best meets their needs. … [T]he final rule should spur a more competitive individual market that drives health insurers to deliver better coverage options to consumers.”
The new policy empowers individual consumers to shop the market and select the healthcare coverage that best meets the needs of their family.
The insurance industry will not have to comply with the burdens of Obamacare’s regulations for healthcare coverage. They can create new products including medical savings accounts without restriction.
This will create an extremely competitive healthcare insurance environment.
“This is a good example of how the Trump administration is moving forward in practical ways on important issues, empowering consumers and freeing up markets. The Democrats don’t like it, of course. But the new HRA system will be popular with millions of Americans whose ability to access the individual market and exercise consumer choice will be enhanced.”
The only big barrier is that it will make consumers become responsible for choosing their healthcare coverage and be responsible for their healthcare dollars.
I believe most Americans are up for the challenge.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
President Trump might be going in the right direction. Unfortunately, the media’s hatred of him and the Democratic Party’s ideology and obstructionism might prevent him from potentially pursuing a new and sustainable direction that gives consumers the power to choose their healthcare goals. There is no reason that the government could not incentivize and subsidize the needy and less fortunate with this simple system.
I think everyone is tired of the political noise in the healthcare system. There seems to be no room for an understandable signal. However, I believe that effective technology and social networking can serve to decrease that noise to signal ratio and provide a less complex system.
President Trump is offering association directed healthcare plans, a blueprint to reduce decrease drug costs and health reimbursement arrangements to reduce the cost of healthcare insurance.
All three initiatives, if kept simple, can put control of the healthcare system in the hands of consumers.
Associations can provide healthcare plans to its members. An association health plan (AHP) can provide multiple medical insurance plan options. Smaller employers, freelancers and self-employed association members can buy healthcare insurance through the association.
President Trump’s new regulations have made it easier for the members of associations to be equal to large corporations in negotiating the purchasing for health care insurance. They can also offer multiple healthcare plans and still have a high enough enrollment to obtain deeply discounted premiums and deductibles for small businesses, freelancers and self-employed that the members cannot get on their own.
These consumers will also be able to spend pre-tax dollars on their healthcare plans.
“ Savings can be increased further through tactics such as self-insuring. Avalere Health, a healthcare research and consulting firm, has projected in a recent report that “premiums in the new AHPs are projected to be between $1,900 to $4,100 lower than the yearly premiums in the small group market and $8,700 to $10,800 lower than the yearly premiums in the individual market by 2022, depending on the generosity of AHP coverage offered.”
I think Jeff Bezos, Jamie Diamond and Warren Buffet’s new alliance has the right idea. They will provide deeply discounted healthcare coverage for their combined employees.
The primary advantage of offering health insurance through an association is the ability for an association to aggregate multiple employers so that the resulting health plan:
“Leverages its scale of participants in negotiations with health providers in order to obtain more favorable rates for medical services.”
The country has not been given enough information nor data to understand Obamacare’s inefficiency. The media has not been helpful in letting consumers understand Obamacare’s inefficiency and deficiencies.
President Trump is interested in having associations form and compare their success to the failed structure of Obamacare. Obamacare would seize to exist.
If associations are done right they can become a simple system that consumers can easily understand and use. This was Steve Jobs vision when Apple developed the iPod, iPhone, and iPads.
The insurance product that could achieve this vision for healthcare is my Ideal Medical Savings Accounts.
Americans need the new option to create a sustainable healthcare system.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
Little did Mr. Trump know that the Arizona senator would help drive the stake through legislation that sought to realize the Republicans’ seven-year dream of finally dismantling Obamacare.”
John McCain’s vote was a surprise to everyone. Mitch McConnell then put healthcare reform on hold. Senator McConnell decided to let Obamacare die on its own.
However, the Senate rejection did not deter President Trump from pursuing healthcare reform .
He has already approved the development of purchasing associations through an executive order. The associations will sell health Insurance coverage. The rules will go into effect January 1, 2019.
He has also has attacked the drug industry with his blue print on drugs. The regulations from this will decrease the costs of drugs by decreasing the number of middlemen in the manufacture to sales process.
On October 2017 President Trump issued an executive order to promote healthcare choice and competition in the country.
The Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, to the extent permitted by law and supported by sound policy, to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage.
The proposals, issued Tuesday, October 23, 2018 by Treasury ,Labor and HHS were a response to the October 2017 executive order from President Donald Trump.
“That order instructed the Departments to increase the availability and usability of health reimbursement arrangements (HRAs)—especially those offered in conjunction with non-group insurance.”
The proposal is well thought out. I have a problem with some of the upcoming regulations but they are an excellent step in the right direction.
The regulations do not utilize a most important element in my ideal medical savings accounts. It does not provide financial incentives for consumers to become informed consumers of healthcare or motivated to save healthcare dollars.
Consumers of healthcare have to be incentivized to become savvy purchasers of their own healthcare and healthcare insurance coverage.
“If enacted, the regulations would create two new HRAs: something we’re calling the individual-integrated HRA, and the smaller, excepted benefit HRA.”
HRAs can be viewed as a superstructure for my ideal medical savings accounts. President Obama did everything he could to discourage the purchase of health savings accounts. His goal was to drive everyone into a single party payer system with the individual consumer’s healthcare decision are made by the government.
Despite President Obama’s attempts to discourage health savings accounts, they grew as the fastest and most popular healthcare insurance product. HSAs permitted consumers to have some control of their healthcare spending and some of their healthcare dollars.
“In 2013, IRS Notice 2013-54 issued guidance on the Affordable Care Act (ACA) that seriously limited businesses’ ability to offer HRAs. The IRS said that while HRAs integrated with group health insurance satisfy key ACA provisions, HRAs integrated with individual health insurance do not.”
This is where Obamacare discouraged consumers to buy HSA as individuals. The insurance was not completely tax free to businesses or individual consumers.
“Congress provided some relief in December 2016 by creating the qualified small employer HRA(QSEHRA). The QSEHRA, a benefit specifically designed for small businesses with fewer than 50 employees, allows businesses to reimburse employees tax-free for their health care costs.”
With his October 2017 executive order, President Trump sought to expand HRAs even further. In the order, he asked the Treasury, the DOL, and the HHS to reexamine past rulings and “increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with non-group coverage.”
The new proposed regulations are a direct response to that executive order. Unfortunately it does not solve the healthcare insurance problem. The proposal keeps the insurance industry in charge of the healthcare dollars and healthcare decisions. It is a step in the right direction. It helps small business more than it helps the individual.
QSEHRA “Qualified Small Employer Health Reimbursement Arrangement”
Individual-integrated HRA
Business size restrictions
Only available to businesses with fewer than 50 full-time employees.
None.
Employee eligibility requirements
All full-time employees are automatically eligible. Part-time employees can be included, but the HRA must be offered on the same terms. Employees can participate in the HRA without individual health insurance, but those without MEC must pay income tax on all reimbursements during the time they were uninsured.
The business can set eligibility guidelines according to permitted employee classes, but the HRA must be offered on the same terms to all employees in each class. Employees without individual health insurance, including those covered by a spouse’s group policy, cannot participate in the HRA.
Allowance amount restrictions
In 2018, annual allowance amounts are capped at $5,050 for self-only employees and $10,250 for employees with a family. The business can vary allowance amounts only by family status, age, and family size, but not based on employee classes.
There are no caps on annual allowance amounts. The business can vary allowance amounts according to permitted employee classes, as well as age and family size.
Group policy requirements
Businesses offering the HRA cannot offer a group policy.
Businesses offering the HRA may offer a group policy, but it cannot offer both the group policy and the HRA to the same employee class.
Premium tax credit coordination
Individuals participating in the HRA are still eligible for premium tax credits, but the amount of the credit is reduced dollar-for-dollar by the amount of the HRA allowance.
Individuals participating in the HRA aren’t eligible for premium tax credits.
I will explain each category as well as its advantages and disadvantages in the near future. These regulations do much toward Repairing the Healthcare System.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
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