Stanley Feld M.D., FACP, MACE
I ended my last blog with,
It is the only
reason President Obama told the then Senator Kerry and Congressman Frank not to
worry if the final bill does not have a public option.
Kerry and Frank said
Obamacare would not work without a public option. The only thing that would
work is a single party payer system.
With limited benefit
plan, employers would avoid the broader $2,000 per-worker penalty.
It is not
clear is whether employers could face a $3,000 penalty per individual for any
employee who opts out of the limited benefit plan.
problems are being discovered with the health insurance exchanges.
If the employee is a low wage employee that refused employer provided insurance
he is not eligible for a government subsidy.
If the federal government runs the health insurance exchange, the federal
government by law is not permitted to provide a subsidy. Only state run
healthcare insurance plans can provide subsidies.
50% of the states have refused to run health insurance plans. Therefore people
who need subsidies are not eligible in over 50% of the states.
The law calls for tax credits and not subsidies. All of a sudden the words “tax
credits” have been dropped in discussion. Only taxpayers who earn over $38,000
per year pay taxes. The only way a person can utilize a tax credit is by
deducting the tax credit from taxable income.
government has gotten around this problem by giving the healthcare insurance companies a tax credit in advance and calling it a subsidy for qualified
workers who opt out of the employer provider plan for a health insurance
exchange plan would not be eligible for a government subsidy.
A full-time worker earning $9 an hour would
have to pay as much as $70 a month for a mid level exchange plan from a health
insurance exchange, even with the subsidies, according to the Kaiser Foundation.
At $12 an
hour, the workers' share of the premium would rise to as much as $140 a month.
A $12 an hour worker cannot afford to pay $1680
a year for healthcare insurance.
level coverage is limited coverage. A patient might need a higher-level plan that costs $200
a month or $2400 per year. This plan is out of reach for most patients making $40,000/year.
"There are going to be many people who will
be ill and need a more robust plan,” a health benefit
Currently, only one-quarter of workers eligible
for the mini-med plan take it. Ms. Newman said, "We
really feel like the people who are not taking it now will not take it
is a huge glitch in the health insurance exchanges’ individual healthcare
market. This glitch will make the health insurance exchanges more costly and
less attractive to all stakeholders. It will decrease the number of people
insured and increase the federal deficit.
These people may be
self-employed or seasonal workers with surges of income. They could be
part-time workers with several part time jobs.
Obamacare does not permit cancellation of the health insurance exchange
policy because it will mean that people will be in violation of the federal mandate
if they do not have insurance.
The Obamacare bureaucrats realize that people receiving subsidies might
have a hard time paying the premiums even if they receive a subsidy.
These people live from month to month. Some have surges in income. Some
collect commissions one month and nothing the next month. Most have old cars.
They might suddenly need new brakes or new tires. Some might get the flu and have
to stay home without pay for a week. There are many reasons low wage earners
suddenly have a hard time paying healthcare premiums even if they are subsidized.
Many do not have bank accounts or credit cards. There is no such thing
as auto pay in their world.
The Obamacare bureaucrats writing the health insurance exchange
regulations are people with nice bureaucratic jobs with steady paychecks. They
have no idea how difficult it is to make ends meet for these people each month.
The healthcare insurance industry
does not care about these problems. It may provide for a grace period of a week or two. If a healthcare
policyholder fails to pay their healthcare policy premium the policy is
cancelled in the real world.
In the bureaucratic world of Obamacare the healthcare insurer cannot
cancel the insurance in the usual way.
HHS has created through multiple regulations a whole new and very
restrictive method of discontinuing healthcare policies that must be followed
to a “T” by the healthcare insurance industry.
This method will lead to even more dysfunction in the healthcare system.
At the end of the 90-day grace period the policyholders must pay the
entire three months due. If they could not pay the premium monthly how are
they going to pay the three month fee?
Aetna was not so dumb in dropping out of the health insurance exchange
system after all.
During the three-month grace period if a policyholder get sick and
needs care they will be entitled to care.
Who will bear the financial responsibility for the care? Not the
HHS has decided to split the financial responsibility between the
insurance companies and the providers. The insurance company will cover the
first month and the hospitals and physicians will cover the next two months.
After three months the insurance company can cancel the insurance. However people can re-enroll again during the
next signup period without penalty.
If one is clever enough a patient can receive 12 months of care and
coverage for nine months of premiums without penalty.
“Along with paying for services during the first month of
the delinquency, the insurer must:
1) notify HHS of the non-payment;
providers of the possibility of denied claims during the second and third
3) notify the insured that he/she is delinquent;
4) continue to collect
the advanced tax credit on behalf of the policyholder;
5) return the tax credit
for the second and third month to the Treasury;
6) issue a termination notice
to the insured at the end of the grace period.”
This procedure is a
very large administrative burden and potential financial loss because of the
federal government's decreases in funding. Most providers and insurance companies will quit
participating in the health insurance exchange program.
Rather than increasing affordability and access to care it will decrease
access to care and affordability of care. It will create a more dysfunctional
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
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