It’s still a bad bill!

Senate Healthcare Bill (Senate version)

June 22, 2017

Executive Summary:

It’s still a bad bill!

Background:

I may have misread it, I’m far from perfect - feel free to correct the facts. Here’s the way I read it, in summary: This is yet another bad bill. Hey, later you may be surprised to know I usually vote conservative, it’s just that what’s come out of the GOP on this issue is simply not smart, not complete, too easy and dodges the truly hard work. Why spend the time on a blog? Because I’d never get into Pete Session’s office or Ted Cruz’s office alone - but we could - and the power of social networking goes to our advantage - time to use it.

The situation before Obamacare:

• ERs clogged up with flu cases.
• Low income folks couldn’t afford health insurance and got subrate healthcare.
• Middle class entrepreneurs, small businesses and other 1099ers could afford health insurance but complained about it.
• Middle class W2 (salaried) workers ask “what’s the issue?”
• Rich folks: ? Would love to hear from you.

The situation created by Obamacare and in place now:

• Lower income folks are VERY happy, now have good insurance and for many it’s free or near free (and they are understandably fighting any change).
• Middle class entrepreneurs and other 1099ers have left the exchanges in droves when the bill doubled in four years. This is the main reason the whole system has imploded.
• Small businesses have either closed, reduced benefits, laid off workers or played tricks with hours to offset employer mandates.
• Middle class W2 (salaried) have finally seen huge increases and are now fully aware of the problem. Welcome to the party.
• Rich folks: ? Would love to hear from you.

The situation if we pass the senate version:

• ERs will start to fill up again with flu cases, and in a big way starting 2022.
• The root cause of premium increases are not addressed and they won’t budge - therefore…
• Middle class entrepreneurs and other 1099ers will continue to bail out and subscribe to other options such as Christian Cost-Sharing plans (not insurance - but a better financial and medical option).
• Small businesses will see a boost in profits but will at least begin hiring again.
• Middle class W2 (salaried) will eventually lose almost all or much of their employer contribution and then you’ll see a total melt down in the system, or what’s left of it (again, because premiums will continue to rise as the root cause is not addressed).
• Rich folks: ? Would love to hear from you.

The real solution:

• Recognize the need to fund quality healthcare to low income Americans, and simply fund it with a general tax that everyone shares in. Note - not insurance, but healthcare, and second - completely separate the delivery of that healthcare from the health insurance system - they don’t belong together.
• Pass legislation that “enables through incentive” the creation and growth of viable alternatives to traditional healthcare insurance (could be more cost sharing - could be more group options, there are PLENTY of good ideas around).
• Term limits for congress and senate (this is really # 1 - because right now our representatives legislate based on being re-elected and not as statesmen). Therefore insurance companies are buying influence and the right thing is not getting done. (There’s a way to do this without Congressional approval, and it’s provided for in the Constitution).
• House members should serve 5 years, the first year after being elected as an understudy to the incumbent representative.
• Senate members serve 8 years, however, we need laws for easier recall of misbehaving members
• Neither body can be re-elected, except in the case where less than 2 or 3 years remain on a replacement appointment or election.

Detail: (This stuff is a tangled mess, and complex, I’m sure I’ve left out relevant facts or context - so you are invited to set me straight where I’m wrong)

The sad truth is, health care is being used by politicians to polarize citizens against each other in order to keep their vote. The Republicans blame ObamaCare (and the Dems), and the Democrats point out that the change will devastate the poor (and not acknowledge that the middle class was devastated already). This polarization causes lower earners to think the middle class doesn’t care about them, and that’s just not the case. They do, but the system needs to be fixed and so it must change drastically. The lower wage earners have not experienced their family insurance increasing from $585.00 a month four years ago to almost $1200 a month now. Yet, the lower wage earner has financially benefited  due to the assistance in Obamacare. So it’s easy to see why the views would be so drastically different. Shame on Democrats for taking advantage of the disparity and manipulating people for political gain at the expense of the country. Shame on Republicans for not offering a bold and comprehensive root cause solution.

When the bill was published today, Chuck Schumer was on CNN denouncing it less than three minutes later! Wow, he’s a fast reader. Anyway… Here’s the bill if you’d like to read it for yourself: https://www.budget.senate.gov/imo/media/doc/SENATEHEALTHCARE.pdf  (this is the “Discussion Draft of H.R. 1628”.)

For interesting backdrop, today I had a discussion with a friend who is a 40-ish year old Cardiologist from Texas A&M (whoop!). He mentioned to me that their own health care insurance (they are W2) for his wife and family costs just under $50,000.00 per year! He looked at me and humbly dropped out of his Doctoring character and said “my family can’t afford this, it is unsustainable”! He and I were in perfect lockstep for cause, effect and solution. So why isn’t Congress?

As for the bill - to the best of my knowledge here are some general accurate conclusions I’ve made after reading it, top to bottom.

Tax Credit impact on folks near or below the poverty line.

In general - this section eliminates the funding by 2022 what the fed pays the states to support low income needs. It also tightens up (reduces) the definition of “alien” that have access to the tax credit.

Individual Mandate

Section 104 eliminates the individual mandate by assigning the non coverage penalty of $0. Also shored up in section 114 “Repeal of Health Insurance Tax”.

Employer Mandate

Section 105 effectively eliminates any penalties to employers not providing coverage by assigning the penalty also to $0. This of course is built on the conservative belief that mandatory coverage kills small business jobs - that’s more than a belief, it’s a fact - however it does leave a gap in coverage to a category of Americans. (also shored up in a declaratory statement in section 108).

My analysis on this: If mandatory employer health coverage on small business eliminates jobs it’s not the fault of the small business owner. The problem is the assumption that it’s the employer's responsibility to provide healthcare coverage - this notion was created many decades ago. Which would you rather have, some of your health care coverage covered, but lose your job because of it, or keep your job and go get your own insurance? Not so difficult a question. So while I’m not happy about it, this is the correct strategic way to go. Also, one of the big problems associated with forcing employers to pay for healthcare is that this shields the majority of (silent/content) salaried and voting Americans from understanding the cost of health care and the underlying problems that need to be solved.

Abortions

Next - the bill removes the requirement that the minimum plan includes abortion coverage. To me, regardless of how you feel about abortions can reasonable people agree not to expect others to actually PAY taxes to fund them?

Abortions #2

This bill removes funding for planned parenthood. This is a separate call-out, so if you feel strongly about one, but not the other then you can address them as two issues.

A fund to pay for lapses in coverage under the new bill

The next section provides for support to states starting 2018 and ending at the end of 2021 (less than 5 years). This should quiet the opposition somewhat - but they’ll focus on it out  of politics.

My analysis: Clogging up the ER for the flu is not the answer - it’s time to set minimum coverage and funded at the federal level. (I repeat, I really am conservative)

The advantage of this is that the program will be paid from taxes by ALL Americans, and the second advantage is that it (in theory) would LOWER premiums for everyone else. But the devil is in the details on that - I say let the free market make that correction, and it would. So, I don’t support this, because the fix should be a real program that offers a minimum standard of coverage for all Americans in perpetuity. We should be lobbying for this. If we get it, your taxes at the state and local level would reduce, while the federal level would increase (but not as much as the state/local decrease). So there you have it, it’s the politics of it that prevents the right solution.

High risk individuals in the long term

The bill proposed funding healthcare for people in high risk, and on the long term. The problem is, these do not provide premium relief for any tax payer above the poverty level (lower-middle, middle and upper class)! Hello voters!!!

Paying for health expenses with your HSA

You would no longer have to have a prescription to pay for qualified health care expenses with your HSA. Also, the penalty for using your HSA for non-qualified expenses reduces to 10%, from the current 20%. Finally, cafeteria plan benefits would no longer reduce your HSA contribution and subsequent benefit.

HSA Limits

If I’m reading this correctly the HSA contributions are up, basically equal to the high out of pocket deductible amount on your premium. That’s great news.

Medicaid benefit payments may be subjected to work requirements

The bill makes this optional, a state decision - and it applies to non-disabled, non-

elderly, non-pregnant individuals.

Provider (Doctors) taxes are being reduced. Section 132.

Other areas to look into that are important: (would love help in summing these areas up)
Section 115 - Repeal or Elimination of Deduction for Expenses Applicable to Medicare Part D subsidy.
Section 116 - Repeal of Chronic Care Tax.
Section 117 - Repeal of Medicare Tax Increase.

Others - Repeal of Tanning Tax, Net Investment Tax, many, many others. If there is something I didn't call out that is seriously germane to you, let me know and also any analysis you may have - I'll update the post.

In conclusion, while there's tactical relief for many, it's a sad solution for a long term strategy - make them go back to the table and address root causes!

This Conservative says NO to the new Healthcare Bill (ACHA)

Family coverage in a typical plan today is around $1200 per month. Your employer picks a lot of that up and so the bad things going on in the industry may not be visible to you, yet. But things are about to get a lot worse.

First, I am conservative, and while I'm just as anxious to dump Obamacare as anyone, this plan is no plan at all - and I'll tell you why.

First, there is no provision to drive insurance premiums downward. Given that they have doubled in the last three years since Obamacare then any legislation should have been crafted to reset those rates to prior rates, plus enough to cover a relatively small amount of health care cost increases.

Second, since the mandate penalties are removed and preexisting coverage requirements are not removed then rates will continue to go up (this will finally wake up all Americans, including those with generous employer paid insurance).

Third, the tax subsidies offered for poorer Americans are not enough. Consider after tax subsidies of $4000.00 for a low income couple. That may seem like a lot, but if the premium is $12000 a year then they still have to come up with $8000.00. That's not going to happen for families on the low end - so effectively, there is no coverage for people who can't afford insurance.Plus, they need the money during the year when sickness or injury comes, not at the tax deadline a year later.

I honestly believe that Congress doesn't understand this issue, by and large. They have group federal group coverage so why would they?

So what's my solution?

Work through this with an 80/20 rule mentality. Congress should slow down. They should create a study group composed of people within each major category of Americans: Employed with employer contribution, Individual (1099ers) entrepreneurs, poor people, etc. This study group should have several of each category - and let's make sure they're pretty smart.

Any plan that is crafted should show and have the result approved by the study group, particularly as to the effect on themselves. Each member would agree that to serve that they must treat their other member as their brother or sister and ensure the plan works for them too.

Once that group is established, here are a few ideas of my own:

First, decide that it may be ok not to have an insurance solution for the poorest of Americans. We simply need to decide that we want to provide quality health care to those without enough income. This support needs to come from a general tax base paid by all Americans. Yes, as a Christian-conservative I really do believe this is the best answer. There should be no tie-in between Healthcare insurance that most American's purchase and the system of providing quality healthcare to people who can't afford the insurance (and prove it).

Now we have a pool of Americans that will pay for insurance, so here are some possible solutions:

1 - Preexisting conditions should be covered - unless you have a large gap (more than 3 months, maybe 6 months). However, being "covered" MUST include viable programs like Christian cost sharing plans that are by law not technically "insurance". After all, they pay like everyone else - just much more efficiently. Covering preexisting conditions is better for ALL of us since it will keep people out of public assistance and creating more cost for the general tax base.

2 - HSAs should finally be available to EVERYONE, no matter what. Let Americans save and offset expenses.

3 - Reset insurance premium rates to $500 per month for a family. Now, many "realistic" people will say that's not possible. Actually, it is, and here's why. The cost of health care reimbursements have gone up by a very small fraction since Obamacare, so the premium increases are due to many factors unrelated to health. The insurance system is riddled with inefficiencies all designed around creative ways to "not pay" medical bills. The industry is full of millions of special "fee schedules" - so as a result the payers (insurance companies) have tens of thousands of workers involved in making these processes work.

But in reality, how would you get them to agree to lower premiums with all these workers and invested processes? Simple, you don't.

The solution has to provide a way to allow a new insurance industry to develop. I could write down my own details of it, but that's not the point - there would be a solution. If you don't believe it, then how are the Christian cost-sharing solutions successful at less than $500 per month? One or more of those organizations also manage the flow of the money as well between doctors and patients. If they can do it, then obviously it's possible. So, let's have the study group examine how it's done right.

In summary, the proposed bill is an obvious failure before it starts, so why are we letting Congress pass it? Because there are too many special interest groups trying to protect themselves. That's why your Congress needs to hear from you. Say NO to this and go about reform in a much smarter/methodical way.

Absolute proof why liberals are wrong about a nanny state (and single payer systems)

(Don't think you're lucky because you have "good employer health insurance", you don't - read on.)

What would you think if you paid $1400 for four new tires and then found out you could buy the same tires from the same store for $182 if you'd have just downloaded a free mobile app, pay nothing for it, and just use the app at the point of purchase? Might you be just a little upset? Would you think there had to be a scam in the mix, somewhere?

The following is real life, it provides proof that government should stay out of our business, and it totally indicts the prescription medication industry into official "scam-dom".

Four months ago we were on a Blue Cross plan, via Obamacare (marketplace). This is a policy that we were paying over $800 a month, and for 2017 was going to jump to almost $1200 a month. When we were notified of the change we decided to seriously look at alternatives. The option we took meant we decided to pick up the drugs on our own cost.

Just four months ago I refilled a prescription for a common medication. Looking back on the records it cost $81.31 through our Blue Cross online pharmacy service. Keep in mind, the drug would have cost over $400.00, without the insurance - or so we thought.

So today I went in to refill the prior prescription, no longer on the Blue Cross plan. I forgot to hand them our card and initially went into shock when a $430 tab rang up. Then I remembered the discount card that we paid nothing for, and it brought the price down to about $200.00.  Wow, a $230 discount for nothing?

Then after returning home my wife reminded me of a mobile app we could download and get competitive pricing. Lo and behold, I could get the same drug for $55 at a grocery store pharmacy 2 miles away. That's the same drug, same count, no difference. I went back to the store and was able to get a refund for almost all the difference using the mobile app.

Let's do the math. $430 - $55 = $375 savings. As a matter of fact, had I used that mobile app while insured with Blue Cross I still would have saved $26.31. Huh? What did I do to deserve that? Absolutely nothing, there was no money changing hands for that discount, and as a matter of fact I could have been ANYBODY that downloaded the mobile app.

No, I'm not selling any app, I have no affiliation. If you want to know what it is just ping me. But the point to the blog is this: Apparently, my insurance company paid zero for my meds all these years, and actually cost me money for drugs as compared to someone without insurance at all.

Now to the subject line. You can be sure that the reason for the disparity is because healthcare is in chaos, and rules are changing all the time. Further, you can bet that when ALL the shackles are taken off the system soon that the prices will level out for everyone, because the word is getting out (you're reading this). So, that is my proof that competition works, because it was competition at the retail level that provided the best price. Had Obamacare been allowed to prevail and expand, or worse morph to single payer, there would be no opportunity for price consolidation, only inflation. Medicare is proof of that.

There's nothing like "history" to make us smarter. Can we please learn from this history lesson and be ready accept it for ALL things competition? Anything that doesn't require government intervention should not be run by government, with rare exception (our air, our food, our water, our safety, etc.).

Pass the word and let the market prevail!

Patrick