Have you heard the advertising mantra, “Perception is reality”? It’s not. Reality is based on data that isn’t subject to twisting by political pundits — for example, a rapid growth in inventory of unsold cars and trucks at US dealers. The election brought about a rally in consumer confidence and in the stock market without […]
Medscape offered a good review of Trump’s initial executive orders regarding healthcare. I’m not going to repeat the article word-for-word here — just recap the basic points and what they might mean for you:
- They are largely non-specific recommendations, leaving actual implementation to each agency. Since most of the new Cabinet heads aren’t confirmed as yet, this is going to play out over time.
- The executive order could end penalties for not having health insurance. That sounds good until you realize that it will drive up the cost of health insurance for everyone else. The notion of risk pool is that healthy people balance out the ill. If you allow people who don’t use much health services to withdraw from the pool, the cost burden is born by the smaller number of people remaining. It’s simple math.
- On notion starting to be discussed is the idea of a “high risk” insurance pool for people with chronic health conditions. This was tried in a number of states in the past for both health and auto insurance and failed in both areas. States discovered that they were on the hook for budget-breaking sums and the cost to individuals soared. (See Politz article, in sources, below.)
- States will be given greater latitude to determine who qualifies for Medicare and CHIP assistance and what assistance these programs actually provide. That’s OK if you live in the Northeast or West Coast, and not so good elsewhere.
- Health insurance will be sold across state lines. That’s a questionable benefit:
- It reduces the power of state insurance commissioners, which could be a good thing.
- The impact on the actual cost of insurance is questionable. Take New Jersey, for example. Residents will have more policy choices available, but those policies now sold in Pennsylvania and New York have higher prices than New Jersey allows. It seems unlikely that a carrier that sells in both NJ and PA will bring a lower priced policy from NJ to consumers in PA.
- It will repeal taxes imposed on pharmaceutical companies and insurance carriers.
Bottom line: The initial actions favor insurers and pharmaceutical companies at the expense of consumers. Health insurance prices will increase this year. The Congressional Budget Office estimated that Trump’s actions would double the cost of health insurance over the next 10 years. That may be an underestimate.
However, I don’t suggest running out to buy stock in these companies. The theme over the last decade is that draining consumer wallets is a good way to bring the economy to a halt and, eventually, crash the stock markets. It’s been done before.
It’s time to cut your expenses and save as much as you can.
- Emily Rappleye, “Trump’s executive order on the ACA: 5 things to know,” Medscape. 23 January 2017. http://www.beckershospitalreview.com/hospital-management-administration/trump-s-executive-order-on-the-aca-5-things-to-know.html
- Louise Norris, “Health insurance and high risk pools,” Health Insurance.org, 14 November 2016. https://www.healthinsurance.org/obamacare/risk-pools/
- Karen Politz, “High-Risk Pools For Uninsurable Individuals,” The Henry J. Kaiser Family Foundation, 1 August 2016. http://kff.org/health-reform/issue-brief/high-risk-pools-for-uninsurable-individuals/
OK, it’s widely understood that “ethical Congressman” is an oxymoron if not an entirely extinct species.
Georgia Representative Tom Price is a Congressman. He also invests in medical technology and pharmaceutical companies to the tune of about $300,000. He also introduces bills and writes letters to regulators to help the companies whose stock he owns — boosting the value of his own investment. In turn, the companies donate to his re-election campaigns. (The Wall Street Journal first broke this story in December; CNN added new information today.)
Basically Tom Price is a poster child for “conflict-of-interest.” Government is supposed to be “for the people”, not for your own wallet.
Price is also Trumps nominee for Health and Human Services Secretary and Trump’s designated leader on ACA reform.
If he’s leading the charge, just who is the real beneficiary of ACA reform going to be?
In fairness, Price says that if he gets this new job, he will get rid of all of his stocks within 90 days. However, he’s been in Congress for 11 years, with a consistent pattern of behavior. That’s going to change overnight?? Plus ACA repeal reportedly will occur before he has liquidated his stocks, if it happens as promised.
Of course, the voters of Georgia share the blame for this mess. You elected someone five times who has consistently violated ethics rules. How exactly does that work?
Price’s original proposals for ACA repeal included the following five elements (quoted from NPR article cited below):
- Price’s plan offers fixed tax credits so people can buy their own insurance on the private market. The credit starts at $1,200 a year and rises with age, but isn’t adjusted for income. Everyone receives the same credit whether they are rich or poor. People on Medicaid, Medicare, the military health plan known as Tricare, or the Veterans Affairs’ health plan could opt instead for the tax credit to buy private insurance.
- Price advocates for expansion of health savings accounts, which allow people to save money before taxes to pay for health care. This includes allowing people who are covered by government health programs including Medicare and the VA to contribute to health savings accounts to pay for premiums and copayments. These proposals are included in Ryan’s plan.
- People with existing medical conditions couldn’t be denied coverage under Price’s plan as long as they had continuous insurance for 18 months prior to selecting a new policy. If they didn’t, then they could be denied coverage for that condition for up to 18 months after buying a new plan.
- The Price proposal limits the amount of money companies can deduct from their taxes for employee health insurance expenses. Companies can deduct up to $20,000 for a family health insurance plan and $8,000 for an individual. The goal is to discourage companies from offering overly generous insurance benefits to their workers. Ryan’s plan proposes a cap on the employer tax deduction but doesn’t specify the level of the cap.
- States would get federal money to create so-called high-risk pools under Price’s plan. These are government-run health plans for people with existing medical conditions who can’t get affordable health insurance on the private market. Critics say high-risk pools have been tried in as many as 34 states and largely failed because they were routinely underfunded.
Given that a Silver level ACA plan in NJ can cost upwards of $900 per month, a $1,200 annual credit doesn’t amount to much. And why should the credit be the same for a millionaire as for someone making minimum wage? The pre-existing condition rule means that some people with long term health issues will be excluded from coverage.
Finally, do Price’s ethics issues have anything to do with GOP efforts earlier this month to reduce or eliminate the independent Congressional Ethics Office?
The Affordable Care Act (aka Obamacare) repeal is turning into a circus. I’m sure there are more acts to follow.
Donald Trump promised today that there will be “healthcare for everyone” after repeal of the ACA. He can actually do that very easily and cheaply, by cutting back the healthcare provided to “catastrophic” coverage. This category of plan exists today, but almost no one actively sells it because if provides very little value to the […]
If you have insurance coverage through the Marketplace, the key advice right now is —
While, to paraphrase Mark Twain, the word “congressman” is a synonym for “idiot”, it’s unlikely that we’ll see sweeping changes in the near future.
- Congress is using a special procedure to “repeal” the Affordable Care Act (also known as Obamacare). In fact, using that procedure, they can only repeal a portion of the law — the portion that involved direct Federal spending and tax penalties for individuals and businesses.
- Many smaller hospitals are just as upset as consumes about losing Federal subsidies for healthcare. The can’t afford returning to the burden of treating the uninsured. Since the medical community is such a huge donor to Congress, they will want their say in hearings before Congress acts. So will insurers, the AARP and other groups. That takes time.
- Several analysts have speculated that there will be some kind of “bridge” legislation to keep the current system running until they can come up with a revised system. That would be sensible. But then again, this is Congress.
The bottom line is that we need to know what the facts are before we can figure out what is best to do. Until the dust settles, we just don’t know.
Any replacement system will require legislation that will be subject to filibuster. For that reason, it will require support from both parties to put it in place. That’s simply going to take time. I’d be modestly surprised if we actually had a replacement system before 2018, and if passed then, it wouldn’t take effect until 2019. But we’ll see.
However, panic over the law could trigger a pull back in spending by consumers. Another recession? We’ll see.
By the way, if you haven’t read Mark Twain — particularly his cynical “Letters from the Earth” — you really should. Most of what he said about people and especially politicians is still true. He’s just a lot more humorous in how he says it.
A new article in Network World talks about the transition of data theft from attacks on banks and retailers to attaches on individuals.
In the past, someone would hijack a credit card number and make some purchases using that number. You would have to replace your card, but once you notify the card company, your financial liability is limited to $50.
With debit cards, the liability is larger, and the time it takes to resolve the incident is longer.
Identity theft started with stealing more information than just a card number and opening accounts at retailers in your name. If the thief selects merchants with special promotions (e.g., n payments for 90 days), they could do a lot of damage before anyone would notice anything amiss. You would be liable for the bill or have to prove to a judge that you didn’t open the account. Proving that you didn’t do something is tricky.
The next generation in identity theft is filing fake tax returns in your name to get a refund from the Federal government sent to an account that isn’t yours. Think about it:
- When you go to file, if you are already getting a refund, its been sent to someone else. You have to prove you didn’t get it.
- Is the thief’s refund larger than what you were supposed to get? The IRS is going to ask you for repayment of the money you didn’t get.
- The information in the return submitted by the thief is probably wrong. Are you on the hook for filing a false return? That’s a crime?
- Will the false tax return affect your eligibility for subsidy for healthcare under the Affordable Care Act?
- Will the false tax return affect your calculated benefit under Social Security?
- How many years of your life are you going to have to spend fixing this mess?
What you need to do
- If you have a refund due, file early. Get there before the crooks do.
- Retain a legitimate service for helping fix (not just monitor) identity theft issues.
- Example: Aflac partners with EZ-Shield at a cost to subscribers of less than $5.00 per year. It’s a very good deal.
- Monitor your credit reports. There are three major services and you can pull a free report from each of them each year. If you pull one in April, one in August and one in September, that will give you year-round visibility to your reports for no cost.
- Consider contacting the credit agencies and putting a fraud alert on your account. That means any merchant asked to open an account in your name will have to call you to verify the request.
Whatever you do, take this seriously. Identity theft is highly stressful and time consuming, and if you have to retain a lawyer on your own, expensive. You don’t need it.
Also remember that the targets of theft usually aren’t the rich. Thieves most often target the young and middle income, you usually are more careless and have fewer protections in place.
Hart, Jason, “Data breaches: This time it’s more personal,” Network World, Sep 20, 2016 11:09 AM PT. http://www.networkworld.com/article/3121992/security/data-breaches-this-time-its-more-personal.html?token=%23tk.NWWNLE_nlt_networkworld_daily_news_alert_2016-09-20&idg_eid=62d72ddabd31ab552b8906988a473783&utm_source=Sailthru&utm_medium=email&utm_campaign=Network%20World%20PM%20News%20Alert%20for%20Tue%20Sept.%2020&utm_term=networkworld_daily_news_alert#tk.NWW_nlt_networkworld_daily_news_alert_2016-09-20
Picture credits: Pittsfield Police