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All items for January, 2019

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A Thoughtful Solution To Repairing The Healthcare System

Stanley Feld M.D., FACP,MACE

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.

Access to the savings and benefit flexibility enjoyed by large group health plans is the foundation of the new association health plans. These savings can range from 8 to 18 percent for the same health insurance policy.”

“ 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:

  • Operates under a large group health plan rules, which can be less costly than Affordable Care Act rules for small group plans.”
  • “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.



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Thinking About The Healthcare System’s Problems

Stanley Feld M.D.,FACP, MACE

President Trump’s administration has developed an alternative to Obamacare.

The press is suddenly saying the public considers the healthcare system its biggest problem. The healthcare system has been a huge problem all along. Obamacare was supposed to fix the problem. Obamacare has only enrolled twelve (12) million people in an individual healthcare market in 2019. Eighty-five percent of those enrolled are receiving government subsidies. Many of the enrollees have unaffordable deductibles and cannot afford to use the healthcare insurance.

Obamacare is methodically destroying the infrastructure of the healthcare system. Consumers of healthcare are becoming commodities. The healthcare system is complex. Obamacare has increased its complexity. It has increased costs to Medicare and Medicaid and made the entire healthcare system unsustainable.

Unfortunately, Democrats have ignored Obamacare’s effect on our national deficit while not increasing the efficiency of delivering healthcare. There has been some press quoting Democrats who have said that Republicans are starting to believe that our budget deficit is not significant.

It was recently discovered that insurance companies have overcharged the government’s Medicare Part D more than ten billion dollars.

What are consumers thinking as their savings are worth less and drugs cost more each year? Do they believe that the government’s bureaucracy is efficient? Is it any wonder that Congress’ approval rating is close to single digits?

When people feel they have less freedom to choose their doctor, hospital or insurance company and are being compelled by their government to settle for what is available, does anyone think they want more of the same?

Now, the narrative heard all over the land is “Medicare for All.” Medicare for all will not solve the healthcare system’s problems. It did not solve the VA Healthcare systems problem. The VA system is being privatized.

I do not believe that the way to solve our healthcare problem is to enlarge an unsustainable program. It is illogical. It will make the healthcare system worse and more unsustainable.

The first thing to do to solve any problem is to understand the problem. Everyone wants the best medical care for the entire population. Everyone says the healthcare system is so complex that it is impossible to fix.

The best way to cut through the healthcare system complexity and find a solution is to a clearly define the goal. The goal should be quality medical care available for all at an affordable cost. This means that all of the waste must be eliminated from the healthcare system. This is the goal of the Trump administration’s three-point approach.

Next, is to search for an approach devoid of politics and ideology that will have the highest impact. In my view, this means developing a system that provides consumers with the most control and responsibility for their medical care decisions.

The highest impact can be provided by the development of a system using technology to put the healthcare system in the hands of consumers. It must provide consumers with the greatest control over their choices and generate incentives to be responsible for their medical care and healthcare dollars.

There will be outliers who will be a potential burden to the system. However, if a system is developed with financial incentives to consumers, those outliers will realize they are hurting themselves. I do not believe consumers are stupid. They have simply been uneducated, unaware and unmotivated to control their health and healthcare dollars because a system to motivate them to be healthy and responsible for themselves is unavailable.

Steve Jobs said it all when he told his engineers that the consumers are not too stupid to use the machines, we are too stupid to make machines that easy to use. The same holds true for our healthcare system.  The goal in the healthcare system would be to reorient our thinking.

Obamacare is beyond improving because it put more power in the hands of the government which translates to more control over consumers’ freedom. An “improvement” such as an attempt to provide “Medicare for All” will lead to disaster.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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The Expansion Of Personalized Healthcare Insurance Benefits.  

 Stanley Feld M.D.,FACP, MACE

The Senate rejected the  slimmed-down Obamacare Repeal bill as Senator John McCain was the deciding no vote July 27,2017.

“When Senator John McCain of Arizona returned to Washington with a fresh scar from brain surgery, it was widely seen as a dramatic effort to help Republicans overturn Obamacare.

 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.

https://www.whitehouse.gov/presidential-actions/presidential-executive-order-promoting-healthcare-choice-competition-across-united-states/

In the executive order President Trump said his goal was to ‘Expanded Availability and Permitted Use of Health Reimbursement Arrangements.

 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 Departments of Treasury, Labor, and Health and Human Services proposed regulations in October 2018 that would significantly expand personalized health benefits to consumers and would offer increasing price pressure to lower insurance prices tor U.S. businesses. Most U.S. businesses want to continue to provide medical coverage for their employees. However they need affordable prices.

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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