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So, if you get your health insurance through your job, are you going to end up getting taxed on that?

08-17-2017by Colleen King

People don't always realize that when an employer pays some or all of the cost of their health insurance through work, the 'money' that is spent on the health plan is not considered taxable income to the employee. Congress, in the 'rush' to reform Obamacare and find funding for whatever they eventually come up with, is talking about removing the employer exemption and taxing YOU for what is being paid on your behalf.

And there's more than this involved--so if this happens, that increases your taxable income, and your employer's payroll taxes. Further, many times when people have their families on the group plan, smaller companies especially don't usually contribute to dependent costs because it's just too darn expensive. But usually, a 'cafeteria plan' (aka premium only plan, Section 125 plan) is set up to allow the pre-tax payment of employee costs, thereby lowering the taxable income to the employee, and lowering payroll taxes to employers. Presumably, this will go away too. This will increase the costs to the employee, take away money from your family, and so on.

Check out this article written by Janet Trautwein, CEO of the National Association of Health Underwriters, the national arm of my professional organization on the impact of this. Agents, aren't just in this for the money, we're looking out for the consumer, our clients, as well. Keep an eye out for this, we may need some letters written.




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So, should all health plans have to cover all things, or should we have some choice in what we buy?

07-07-2017by Colleen King

The goal with the Affordable (?) Care Act (ACA) was to cover the majority of health care related expenses for the most people possible. But did it go overboard?

Plans cannot have a 'life time maximum' anymore, but that's a big disingenuous because the majority or people never come near the $1-$7 million life time maximums a lot of plans had, ALL plans have to cover the 10 Essential Health Benefits outlined by the law, which include the following:

  • Outpatient care
  • Emergency Room Services
  • Inpatient Hospitalization
  • Maternity Care
  • Mental Health/substance abuse treatment
  • Prescription drugs
  • Habilitative/Rehabilitative service (things like physical therapy)
  • Lab services
  • Preventive services
  • Pediatric care, including the beloved Pediatric dental and vision

On the surface, this makes sense to an extent, but when you have to consider all of these items have to be 'priced in,' that drives up costs. Pediatric dental and vision is probably good, but I have a lot of clients not thrilled with this because either they don't have kids, or their kids are over 19 so they aren't covered. The same argument could be used for maternity care. It's covered across the board, whether you're male, over the common age to have a baby, whatever.

So here are my thoughts on what could be workable, based on what my clients have been happy with in the past, and would like to see now...

Maternity care--we used to have plans that did not cover maternity, which was okay for people not planning on having babies. Carriers should be able to offer plans that don't cover maternity, but to keep cost on maternity plans reasonable, there should be a requirement that it be covered on a certain percentage of plans, maybe 50% of what they offer?

Prescriptions--We used to have plans that covered generic drugs only, or some that had no prescription drug coverage. I don't necessarily want to go back to NO drug coverage, but people liked the 'generics only' plans, knowing that they might get hit if there was a brand drug needed. They were willing to take the chance.

Pediatric dental and vision--this may be a good thing, but there are NO dollar limits on the amount of pediatric dental care, and no waiting periods for major services. Braces are covered, but only when 'medically necessary,' and as most of us know, often times braces are more cosmetic in nature. Any time there are no 'limits,' you're setting things up to be taken advantage of. Maybe there needs to be an annual limit, more generous than the typical $1000/year, but not unlimited.

Habilitative/rehabilitative care--this is a tough one. There don't appear to be limits on the number of visits, it's going to be based on 'medical necessity.' These are services like physical therapy, occupational therapy and speech therapy. There are many scenarios that are not '12-20 visit' situations but when I was a utilization management nurse years ago, we saw a ton of abuse in PT and chiropractic care. And speaking of Chiropractic care, it's not a 'required' service, and now most plans don't cover it! Can we go back to this at least being covered in some way under the physical therapy benefit? That's nuts!

The rest of these are pretty broad, it would take weeks of writing to delve into these. We used to have higher deductible plans, some with  50% coverage after meeting the deductible. Plans like that weren't for everybody but for some of my older clients, they liked those because it helped to keep premium costs down, they had savings if something happened. I heard many times from clients 'I just don't want to lose my house if something major happens.' Makes sense! Let's bring back some sanity to all of this.

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SB 562, the Single Payer bill, has been pulled--why it is not time to cheer yet

06-27-2017by Colleen King

On Friday, the encouraging news that SB 562 will not be heard just yet on the State Assembly floor came out, and kudos to Speaker Anthony Rendon (D-Paramount) for having the foresight to pull this--for now...

It was encouraging from the perspective that he cited the bill as being 'woefully incomplete' and that he didn't get sucked in by the emotional argument that the 'conversation has to be had.' It may need to be had, but as we saw with the Affordable (?) Care Act, there was a ton of detail left to 'be discovered,' and look at the mess we have now. Funding of this has sort of been addressed, plan designs have been lightly touched on, but as we all know in all big projects, the aftermath from major parts of a project not being thought out in advance causes a mess. We often end up with legislation that started out in one direction but went another. Check out Melanie Mason's article in the Los Angeles Times last Friday as it outlines where we're at for now. Read here
Also in there, click on the link to 'what would single payer mean to me'--frighteningly enlightening! Read article

Why we can't let down our guard on this, the State Legislature has a 2 year cycle--this is just the end of Year 1, so if SB 562 gets reworked, it may very well come back for a vote in the Assembly. And depending on your views, you certainly don't want this to slip through unnoticed. Remember, as it's written now, the intent of SB 562 is top replace ALL health insurance in California--employer based plans, your individual plans, Medicare, MediCal and services provided through the regional centers for the developmentally disabled.

So stay tuned, stay 'subscribed' here, because I'll be keeping tabs....

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Short term health insurance--good new or bad news?

06-16-2017by Colleen King

Short term plans are under fire, or at least were under fire, by the previous administration. They didn't meet Affordable (?) Care Act standards, they were medically underwritten, meaning people could be declined for pre-existing conditions, and the don't cover pre-existing conditions.

I call these 'accident and illness' plans--sure they don't cover any of the aforementioned issues, but if you missed open enrollment, if you lost your job and maybe missed the 'special enrollment period' to pick up an indivdiual plan, these are good for the short term. But the 'powers at be' have decided these are BAD--I think they are better than nothing. If you had one of these, at least if you got sick or were injured, then you'd be covered subject to the deductible.

And wasn't that the point of the ACA, getting more people covered? But apparently we need to have only what the government wants. If you go uninsured for more than 90 days, then you are subject to the penalties for being uninsured. And these plans, because they don't contain the 'minimum essential benefits,' do not exempt one from the penalties for being uninsured. But I still like them on a limited basis. Something is better than nothing for emergencies. I only have one carrier offering these now, and I like the way they do it, they are guaranteed issue. BUT, they don't cover anything pre-existing which is defined as something you were treated for, or saw a provider for, within the past 12 months.

We can only do these for a maximum of 3 months, and they can be paid for either as a lump sum or month to month. We can do with this one carrier a maximum of 4 three month terms. Would I encourage someone to drop a compliant plan for one of these, of course not. But as with anything, there is a time and a place for short term medical--call me if you want to check it out.

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So, how is SB 562, the Single Payer bill, going to be paid for?

06-14-2017by Colleen King

I think we've established that health insurance rates have gone nuts, health care reform has gotten some people covered who couldn't get it before, but from my side of the desk, there are still problems that need to be worked out. So along comes SB 562, and all you need to do is get rid of the greedy insurance companies, let the state take over, and then it will all be fine--really?

I was at a town hall meeting weekend before last sponsored by a couple of our local state legislators who think this is the way to go. The current estimate before even getting started is $400 billion, which is more than the entire state budget. Where will that come from? Well, keep in mind that if this bill passes, the intent is that it will replace ALL health insurance in the state--plans from employers, individual health plans, MEDICARE, MediCal, TriCare, Children's Health plan and even the regional centers that help the developmentally disabled. The intent is that they (the appointed, not elected, board who will run this) will then work to secure waivers for all federal programs to have the funding rerouted to the tune of $200 billion to help pay for this. Good luck with that.

The remaining estimated $200 billion will come from thee and me--there is talk of a 15% payroll tax, 2.3% sales tax, a gross receipts tax of 2.3% on business making more than $2 million a year and who knows what else. But that's okay, because we won't be paying insurance premiums. Hhhmmm....what about the people that aren't paying them now? The estimated cost per person is $9200--not per household, per family, but per person. I have a tough time believing that Washington DC is going to grant the re-routing of Federal funding to start a new program, but I'm no clairvoyant.

And all of this is without truly knowing the cost of the plan ultimately. How are doctors and hospitals going to be paid? If it's based on Medicare or god forbid, MediCal rates, physicians are already not happy with that, so good luck. And the way the plans are proposed to be structured, there will be no deductibles, no copays, just go and be taken care of. That's not going to cost a fortune is it? Keep in mind, 'free' is very expensive--read on.

At this town hall, there were representatives from the California Nurses Association who are strongly behind this. There was one impassioned woman who was convinced that the study they commissioned would save around $37 billion, because we're already spending $368 billion, and by getting the middle man out of the way, doctors and nurses would be able to just take care of people without 'red tape,' seeking authorizations, and dealing with bureaucracies. That's when I had to step away.  So, I guess she's saying they can do whatever, whenever? I'm a nurse, I'm still licensed as an RN, and this isn't my first rodeo. Do you know why insurance cost went up over time? Cost of care went up over time, and then there's fraud--insurance on all fronts has it, whether it's private insurance or Medicare/MediCal. Who's going to be watching that? And Page 7 of this study said, they can't account for everything, basically this is an educated guess. 85 pages of educated guessing. Not to slam it, but it's not THE definitive explanation of how it will work. It's an educated guess, haven't we had enough of those?

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