What’s in Obamacare, part 10:

Consumer Operated and Oriented Health Insurance Plan

Does the recently passed health care reform legislation contain a public health insurance option?  Simply put, no.  Does  it contain a confusingly worded work-around that will allow the federal government to issue public funds for what will essentially amount to a public option?  You betcha!…Yep, that’s right, Obamacare contains what essentially amounts to a public option, run by non-profit(tax exempt) health insurance organizations, funded by the tax payers, determined by a panel of government bureaucrats. The bill refers to this hidden public option as the Consumer Operated and Oriented Plan (CO-OP) program.

What is the Consumer Operated and Oriented Plan(CO-OP) program and what does it involve?

• It is a program that will be established by the federal government to create non-profit health insurance providers that will offer government qualified health plans in the individual and small group markets.
• The government will provide loans (tax payer funded loans of course) through the CO-OP program to persons applying to become qualified non-profit health insurance issuers.  The purpose of the loans is to assist in the start-up costs of the organization.
• The government will provide grants to persons applying to become qualified non-profit health insurance issuers, in order to help them meet the requirements of the state in which they are applying to become a licensed health insurance issuer.
• The government will ensure that there is enough funding to establish at least 1 non-profit health insurance issuer in each state.
• If, in a given state, no one applies to become a non-profit health insurance issuer, the government will use an unspecified amount of public funds to encourage the establishment of a non-profit health insurance issuer in that state.
• The government will establish an “advisory board” to recommend which applicants will receive public funding to start a non-profit health insurance organization…special interests come to mind.
• The organizations formed under the CO-OP program will receive tax exempt status.

What requirements does a non-profit health insurance organization have to meet in order to receive public funds?

• Must be organized under the laws of the state in which they operate, as a non-profit, member run organization.
• Must offer government approved health plans that include minimum essential benefits.
• Must not have been a health insurance issuer before July 16, 2009.
• Must not be sponsored by state or local government.
• Governance of organization activities must be subject to a majority vote of its members.
• All organization profits must be used to lower member premiums and improve benefits.

Who can apply to create a non-profit health insurance issuer under the CO-OP program?

Anyone…again, special interests come to mind.

What have we learned?

Obamacare does not contain a public option.  Meaning it does not contain a government run health insurance issuer.  Instead Obamacare will create a small army of 50 or more, tax payer funded, tax exempt, government bureaucrat recommended, non-profit, health insurance organizations.

Is this really any different than a public option?  No, it’s taxpayer funded, and the organizations will be chosen by a government panel (who do you think they are going to pick?).

So why did they do it this way?  It’s the only way they could get the votes to pass the bill in the Senate.   By structuring it this way, they could say that the bill contains no public option, all the while achieving the same effect through a more abstract process.

References:

H.R 3590, Patient Protection and Affordable Care Act, Section 1322, pages 168-182

Michelle Bachmann Introduces H.R. 4903 to repeal Obamacare

On March 22, 2010, Minnesota Congresswoman Michelle Bachmann Introduced a bill into the United States House of Representatives to repeal the Patient Protection and Affordable Care Act (Obamacare). Unlike the massive, 2074 page Health Care Reform Bill, Bachmann’s bill, H.R. 4903 is a simple one page. one section bill, excessive government red-tape not included:

”
111th CONGRESS

2d Session

H. R. 4903

To repeal the Patient Protection and Affordable Care Act.

IN THE HOUSE OF REPRESENTATIVES

March 22, 2010

Mrs. BACHMANN (for herself, Mr. BURTON of Indiana, Mr. SOUDER, Mr. HALL of Texas, Mr. ISSA, Mr. KINGSTON, Mr. JOHNSON of Illinois, Mr. INGLIS, Mr. DUNCAN, Mr. TIAHRT, Mr. LATTA, and Mr. KING of Iowa) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and Labor, the Judiciary, Natural Resources, House Administration, Appropriations, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To repeal the Patient Protection and Affordable Care Act.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. REPEAL OF PPACA.
Effective as of the enactment of the Patient Protection and Affordable Care Act, such Act is repealed, and the provisions of law amended or repealed by such Act are restored or revived as if such Act had not been enacted.”

Short, sweet, and too the point.

Will Obamacare cause a shortage of primary-care physicians?

According to an article in the Cincinnati Business Courier,  the up swing in the number of  individuals with health insurance (the bill is supposed to cover an additional 32 million people) and the huge number of new mandates for preventative care, will hamper the number of primary-care physicians available to treat the increasingly large number of patients:

“There are simply not enough primary-care providers available to take care of all these newly insured individuals,” said Dr. Peter Kambelos, an internal medicine physician who practices in Monfort Heights. …

Greater Cincinnati has a shortage of 595 primary-care physicians, according to December data from the Cincinnati MD Resource Center, a free physician recruiting service formed by the nonprofit Health Improvement Collaborative of Greater Cincinnati. The area’s 234 primary-care doctors per 100,000 residents compares to an “optimal” number of 261 per 100,000 that U.S. Department of Health and Human Services data would suggest.

The American Academy of Family Physicians has warned of an impending national shortage of 40,000 such physicians by 2020. About 140,000 will be needed in all to meet the needs of the aging population, the group has said, but current trends suggest there will be only about 100,000.The U.S. Census Bureau puts the current number of uninsured at 45 million.

“People can have all the insurance they want, but if they can’t get in to see anyone, it’s not going to do anyone much good,” Kambelos said.”

-Business Courier of Cincinnati – by James Ritchie

Kambelos brings up a good point here, but he neglects to mention two thing. What about the number of primary-care physicians that are considering leaving the medical field or retiring as a result of the bill? Also, how many potential doctors will be dissuaded from entering the medical field because of the uncertain effects the bill may have on their possible career?

One thing is certain, as the number of patients will be increasing because of the bill, the number of doctors will decrease because of the bill. So, what happens when millions of people are bursting through the doors of doctors offices across the country, in a race against each other to get primary care? Can anyone say “rationing?”

What’s in Obamacare, part 9:

Insurances companies must cover everyone

Guaranteed availability of coverage:

All health insurance providers offering group or individual coverage in any state must accept every employer and every individual that applies for coverage.  Insurance provider may restrict enrollment in any given plan to “open enrollment” or “special enrollment” periods that meet certain regulations set forth by the federal government.

All health insurance providers must renew coverage should the enrollee choose to renew.

Health insurance providers may not make rules that dictate who is eligible for coverage based on any of these factors:

• “Health Status”
• “Medical Condition”
• Past “claims experience”
• “Receipt of health care”
• “Medical history”
• “Genetic information”
• “Evidence of insurability”
• “Disability”
• Any health-status related factor determined appropriate by the government

These regulations on health insurance providers show yet another attempt by the Obama administration and congress to put them out of business and put in their place a government controlled, single-payer, health care system in America.

References:

H.R 3590, Patient Protection and Affordable Care Act, Section 1201, Page 82-84

What’s in Obamacare, Part 8:

Prohibition of preexisting condition exclusion, and requirements for fair premiums

Prohibition of preexisting condition exclusion or other discrimination based on health status:

Under Obamacare, no health insurance provider may impose any preexisting condition exclusion for any health insurance policies the provider offers.

“In GENERAL. —A group health plan and a health insurance issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage” -H.R. 3590, Patient Protection and Affordable Care Act, Subsection 2704, page 78

Fair Health Insurance Premiums:

Obamacare prohibits health insurance providers from raising premiums on any individual based on their health condition.  The bill also sets regulations limiting the reasons why a health insurance provider may raise an individuals health insurance premiums. Premium rates for health insurance plans may vary for these reasons only:

• “whether such plan or coverage covers an individual or family”
• Age (the rate cannot vary by more than 3 to 1 for adults)
• Tobacco use (the rate may not vary by more than 1.5 to 1 for tobacco users over non-tobacco users)
• A predefined rating based on age, tobacco use, and the number of family members covered under the plan

Now, for all of you liberals out there thinking, “this is great, now those evil insurance companies won’t be able to make huge profits off of all those poor unfortunate souls,”  consider two things.  First, the average profit margin, keyword “margin”, for the health insurance industry is about 3.4%.  So what’s your plan? Cut there profits down to 1%, 0.5%?  Why not 0%?  Secondly, health insurance works by enrollees paying into a pool of money which is then paid out for medical expenses and other costs.  The high risk enrollees pay a higher premium because they are likely to cost the company more.  Often times more than they pay in.  Lower risk enrollees pay a lower premium because, obviously, they cost the company less.  Often times less than they pay in.  The idea is that the amount received from premiums will be more than the amount paid in on medical expenses.  Thus, the company makes a profit.  If the company can no longer make a profit, there is no other reason to be in business.  If limitations on how much a health insurance provider can charge their high risk enrollees compared to lower risk enrollees are too strict, the likelihood of the company actually paying out more than they take in increases.  The company then has one of two options.  Raise premium rates for everyone, or go out of business.  Given the other regulations in this bill, the later of these two is more probable.  In the end that leaves us with very few available insurers, or possibly only one, the United States federal government.  Thus, securing America, as a socialist, welfare, nanny state.  If you really want the government to take care of your every needs, there are plenty of countries that will already do that for you…so move.  As for me, no thanks, I enjoy the freedom to do for myself. The individual is far more capable than the government of securing his own life.

What’s in Obamacare, part 7:  The National Health ID Card

The bill explicitly states that in order for any individual to be eligible for a health insurance plan and health claim status, they will be issued a machine readable national health identification card.   All operating rules set forth in the bill for health plan and claim eligibility must allow for the use of this ID card.

“ELIGIBILITY FOR A HEALTH
PLAN AND HEALTH CLAIM STATUS.
—The set of operating rules for eligibility for a
health plan and health claim status transactions shall be adopted not later than
July 1, 2011, in a manner ensuring that such operating rules are effective not later
than January 1, 2013, and may allow for the use of a machine readable identification card.”

-H.R. 3590 Patient Protection and Affordable Care Act, Page 62

This national health identification card is similar to the Danish national health ID card. It’s just another little trick the federal government will use to render the population manageable.

References:

H.R. 3590, Patient Protection and Affordable Care Act, Subsection 1104, page 62

What’s in Obamacare, Part 6:

Federal Government Access to Individual Finances

Government Access to Individual Bank Accounts and Medical Records:

H.R. 3590 gives the federal government specific access to individual bank accounts and medical records as provided by that individuals health plan.  The government may monitor an individuals finances and medical records electronically, for the purposes of determining an individuals eligibility for certain programs under the bill.  They may also monitor an individuals finances and medical records to ascertain whether that individual has health insurance and is making regular premium payments to an approved health insurance plan; this will allow the federal government to determine each individuals financial responsibilities with respect to penalties and fees prior to or at the point of care as outlined in the bill.  This clause also gives the government the ability to transfer funds electronically to or from an individuals bank account for the purposes of debiting his/her account for fees and penalties.

The stated purpose of this clause is “to reduce the clerical burden on patients, health care providers, and health plans.”

Quick note for those of you who say “the government already had access to our bank accounts.”  That’s true, but it was previously required that they obtain a court order to access any individuals personal finances.  This bill provides them free reign to do so whenever they please.

References:

H.R. 3590: Patient Protection and Affordable Care Act,  Pages 58-77

Social Security Act, Subsection 1173

Speech By Texas 2nd district Congressman Ted Poe on the House Floor, March 15, 2010

What’s in Obamacare, part 5:

Funding early retirees health insurance policies

Reinsurance For Early Retirees:

Starting no later than 90 days after the signing of H.R3590 into law $5,000,000,000 in funds from the United States treasury will be appropriated for the purposes of providing reimbursement to participating employer based health insurance plans for a portion of the cost of providing health insurance for early retirees, spouses and surviving spouses of early retirees, and their dependents.

The “employer-based plans”  that qualify for reimbursement are group health benefits plans that are maintained by “one or more current or former employees, employee organization, voluntary employees’s beneficiary association, or a committee or board of individuals appointed to administer such plans; or a multiemployer plan.”

“Early retiree” refers to an individual 55 or older but is not yet eligible for Social Security or Medicare, and is not currently employed by any company actively contributing to an employment-based health insurance plan.

In order for an “employment based plan” to meet the requirements for reimbursement, claims must be submitted.  The amount of the claim must be based on the actual amount expended by the plan on health benefits for early retirees.  Amounts paid by the early retiree, the retirees’ s spouse, or dependents in the form of deductibles, copayments, and coinsurance should be included in the claim.   All claims must be no less than $15,000.00 and no more than $90,000.00.   These amounts will be adjusted each fiscal year according to the medical care component of the Consumer Price Index.

If a valid claim is submitted, the plan will be reimbursed up to 80% of all health expenditures exceeding $15,000.

When will these policies take effect?

No later than 90 days after the bill is signed into law.

Sections and pages referenced from the bill:

H.R. 3590, Patient Protection and Affordable Care Act

SEC. 1102. REINSURANCE FOR EARLY RETIREES,  Pages 48-54

References:

H.R. 3590, Patient Protection and Affordable Care Act

What’s in Obamacare, part 4:

High Risk Health Insurance Pools

Immediate Access To Health Insurance For Uninsured Individuals With a Preexisting Condition:

A temporary high risk health insurance pool will be established to assist those uninsured individuals with a preexisting condition gain coverage.  This high risk health insurance pool will begin no later than 90 days after the enactment of the bill and expire January 1, 2014.   The high risk insurance may be carried out by the federal government or by contracts between the states or non profit organizations and the federal government.  If a contract is made, funds will be appropriated to carry out the insurance pool.

Any high risk insurance policy in the pool must meet the following requirements:

• Provide health insurance that does not impose preexisting condition exclusion
• Total allowed coverage must be at a minimum of 65% of premium
• Has a predefined out-of-pocket limit
• Varies by an age factor of no greater than 4:1

In order for an individual to be eligible to obtain coverage in the high risk pool they must meet the following requirements:

• Must be a legal citizen or national of the United States
• Must not have had coverage within the prior 6 months
• Must have a preexisting condition

Health insurance issuers and employer-based health plans may not discourage any individual from remaining enrolled in any insurance plan based on health status.  If it is found that this has been done, the employer or insurance provider will be responsible for reimbursing the program for health insurance expenses incurred by the individual if they choose to enroll in a new plan under the high risk insurance pool.

$5,000,000,000 of funds from the United States treasury will be appropriated to pay claims against the high risk pool, when such claims are in excess of the premiums collected from enrolled individuals.

When the high risk insurance pool is terminated on January 1, 2014,  enrolled members will be transfered to a policy in the newly established health insurance exchange, without lapse in coverage.

The standards set forth in this section supersede all state and local laws.

When will these policies take effect?

no later than 90 days after the bill was signed into law

Pages and sections referenced from the bill:

H.R. 3590.  Patient Protection and Affordable Care Act

References:

What’s in Obamacare, part 3:

Health insurance premium rebates

Regulations on health insurance providers to refund a set percentage of premiums:

Health insurance providers that provide group or individual policies will be required to provide an annual rebate to each member enrolled in the plan if the amount of incurred premium revenue spent on health care coverage reimbursement is less than 80% for individual and small group plans or 85% for large group plans.  The rebate amount will be equal to the difference not spent up to the above mentioned percentages.

Ok, I know that may sound a bit complicated, so here’s an example.  Let’s say that Acme health insurance company has a customer named Al.  To keep things simple, we’ll say that Al pays a $100.00 per month premium ($1200.00 per year), and all of his out-of-pocket expenses (copays, prescriptions, etc…)are zero dollars, meaning that Acme covers 100% of his medical expenses.  Over the course of the year Acme Health Insurance only spends $860.00 on Al for health care coverage, but Al paid them $1200.00.  80% of $1200.00 is $960.00.  Since Acme Health Insurance company is required to either spend 80% of Al’s premium on health care for Al, or refund up to what they did not spend up to that amount,  Al will get a rebate from Acme insurance company for $100.00.

What this does is require health insurance providers to operate their entire business(minus actual health care expenses) on 20% of individual premiums, and 15 % of group premiums.

Update:

It has been brought to my attention that the required rebate structure will not be based on individual policies, but rather on large blocks of insured.  Therefore the rebate amount would be based on the total premium revenue brought in over a large number of policies.  I have left the above example in tact, but instead of thinking of it as just one person (Al) think of it as a large group of insured.

Sections and Pages Referenced From the Bill:

H.R. 3590 Patient Protection and Affordable Care Act:

Text From the Bill:

“REQUIREMENT TO PROVIDE VALUE FOR PREMIUM PAYMENTS.

—A health insurance issuer offering group or individual health insurance coverage
shall, with respect to each plan year, provide an annual rebate to each enrollee under such coverage, on a pro rata basis, in an amount that is equal to the amount by which premium revenue expended by the
issuer on activities described in subsection (a)(3) exceeds—
”
H.R. 3590 Patient Protection and Affordable Care Act, Page 31

References:

H.R. 3590 Patient Protection and Affordable Care Act