Thursday, June 22, 2017

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!


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