Monthly Archives: December 2013

Is It A Junk Plan?

Every day the authors of this blog are bombarded with questions about what makes a junk policy?  We have seen these plans and know based on previous experience that a “junk policy” can have a catastrophic impact not only on the person’s physical health, because many conditions are simply are not covered, but also on a person’s financial health.  Please refer to part one of the “junk policy” blog published earlier.

Junk policies do not cover a large variety of services or diagnoses and if they do the reimbursement is extremely limited.  For example, most do not include drug and alcohol treatment, mental health treatment, maternity care, and/or ambulance services just to name a few.  Even so many people are reluctant to change policies.  Who can blame them, there has been so much fear mongering about the state and federal health exchanges and change is hard, even if the outcome is positive. The Affordable Care Act (ACA) guaranteed that people could keep their policy, even if it was a “junk policy,” as long as the plan was in place prior to the ACA being enacted in March/2010, but due to the abundance of cancellations by the insurance companies, ANY plan can be “grandfathered” if the INSURANCE COMPANY so desires.  It is important to remember that the mass of health plans cancelled just prior to a person’s ability to sign up for the ACA was due to the choice of Insurance Companies.  However,  just because you can keep the policy, doesn’t mean you should.

Don’t just assume the plan you have is a “good plan” or refuse to consider all your options because you heard negative things about the state and federal health exchanges on FOX News, from a Republican, a member of the Tea Party or someone who “dislikes” government.  Do what is best for you or you could end up like Caleb Howell, who Erick Erickson, North Carolina conservative  describes as his right hand man at RedState, a very conservative blog.  Mr. Howell is apparently the lead blogger on RedState.  He was recently diagnosed with cancer, which is causing his liver to fail  and Mr. Erickson blogged about the need to raise money for Mr. Howell who is a father of two young girls.  Why?  He has NO insurance .(http://www.gofundme.com/3rrv74) (http://www.dailykos.com/story/2013/07/31/1228070/-RedState-s-Chief-Blogger-in-Critical-Condition-in-NC-No-Insurance#)  You owe it to yourself and your family to get health insurance because, as the story of Caleb Howell shows,  none of us know what tomorrow holds.  It is hard enough to fight an unexpected illness or accident without having to worry about how the medical bills will get paid or if you can get the required treatment for your self or a loved one due to no insurance or sub-par insurance.

Some people, mostly conservative Republicans and members of the Tea Party indicate they will not sign up for the ACA even if the multiple myths, misrepresentations and flat-out lies are not true.  The list of myths about the ACA is long and seems to change daily, but they are myths.  Consider this statement made by Rand Paul in a speech to the University of Louisville medical students about an upcoming exam:

That appears to be exactly the path chosen by Republicans and Tea Party associates with the ACA. There have been upwards of 20 rumors and actual lies told to the public as a means of undermining the ACA.  The fact that a member of Congress would suggest giving out misinformation or trying to trick other people as an acceptable tactic to winning makes everything he says less credible and less ethical.  It’s not only Mr. Paul who is spreading “misinformation”, including not limited to other Congressmen, Strategists and FOX News. With every statement they make you have to ask yourself if it is misinformation, trickery, or truth? What is the difference between misinformation and lying? I used to think misinformation was not intentional, however, as defined by Senator Paul, there is no difference.  Unfortunately, it appears there is a lot of trickery and misinformation passed out by Conservatives, Republicans, and the Tea Party designed to make people afraid of the Affordable Care Act. It is simply mind-boggling that people in leadership positions would do something like this to the people they are supposed to serve.  Is possible political gain really worth putting the medical needs and financial stability of constituents at risk?  The Conservatives, Republicans, and members of the Tea Party in Congress seem to think it is.

There were serious issues with the federal health exchange immediately upon roll-out. While frustrating, much of this was primarily due to the overwhelming number of people trying to access the site. In general, the federal exchange website is improving each day.  The health exchanges represent capitalism in motion.  There is little difference between shopping on the exchange and choosing between plans than finding the best possible price on televisions, groceries, or any other product.  Once you understand how to access the information for each plan, you can compare prices on the health exchange with quotes from private insurers or private health exchanges.  You want to insure you get the best coverage at an affordable price.  Here is what you should look for on both the plan you have now, any plan your current insurance company offers you, and the plans offered by the health care exchange:

  • Does the plan offer the ten essential benefits determined to be minimum levels of care as indicated by the ACA.  These 10 benefits include:

    • Ambulatory patient services

    • Emergency services

    • Hospitalization

    • Maternity and newborn care

    • Mental health and substance use disorder services, including behavioral health treatment

    • Prescription drugs

    • Rehabilitative and habilitative services and devices

    • Laboratory services

    • Preventive and wellness services and chronic disease management

    • Pediatric services, including oral and vision care

(https://www.healthcare.gov/what-does-marketplace-health-insurance-cover/)

Be sure and check with the company, if you choose a plan that is not on the federal or state exchanges.  There are still some companies trying to see plans that do not include these services.  While you think you may not need them in the future, it isn’t a good risk to take and could end up being very costly.

  • What is the monthly premium for the plan?  Remember it is important to complete the WHOLE enrollment process on the health exchange to see what your premiums will be.  You do not have to pay for the plan, but you must get to the point just before paying so that you can see any and all tax incentives or subsidies you may qualify for.  Think of it as finding the “final” discounted price on websites, where they require you to give your email address and some demographic information to get “the lowest possible price.”

  • What is your deductible?  When reviewing the plans on the health exchange remember to complete the WHOLE application enrollment process.  Also, when you look at the plans, don’t just assume that the gold plan or bronze plan is best for you or that they will have the lowest deductibles and co-pays.  Review the silver plan, because based on your income you may also qualify for an added subsidy that will impact your deductible, co-pays, and out of pocket maximums.  This  added  subsidy is available ONLY on the silver plan and will not show up until you have verified your identity, citizenship, and income, so be sure to complete the whole process.

  • What is your co-pay for doctor’s visits?  This will vary from plan to plan.  It can be impacted by a subsidy depending on your income, but only if you enroll in  the silver plan.  I have seen enrollees end up with co-pays as low as $10 on the silver plan, due to this subsidy.

  • Check out the deductible for the plan.  Always be sure to check the silver policy, because a subsidy, if you qualify financially can significantly decrease the amount of your deductible.  I have seen people have their deductibles cut down to $100.00.

  • What is your maximum out of pocket maximum for the year?  It is important to remember there are no more life time or yearly caps on insurance company payments.  Although this probably sounds like a broken record, be sure to compare every plan for this and especially the silver plan offered through the health exchange because I have helped people apply for a plan on the health exchange who end up with as low as  a $100.00 maximum out of pocket expenses per year on this plan.

  • Check out the approved provider list.  Is the doctor or facility you currently use on the list?  Is the hospital you prefer to use on the list? Most plans on the exchanges list the website of the plan you are considering.  You may have to go to the plan’s website and check the provider list to insure your doctor’s are on the plan.  Do the same for your preferred specialists and hospitals.

  • Check out the list of prescription drugs that are on the company’s formulary?  Are the drugs you are prescribed regularly on the plan?  Do you have to use a mail-order pharmacy or do you prefer to use a pharmacy near you?  Sometimes there is a significant difference in price between the two, so you need to choose what your highest priority is: buying at a local pharmacy or having your medications delivered automatically.  There should be a link on the plan website to determine if the medications  you take are on the formulary.  If you can’t locate a list, call the health plan and ask.  You are your own best advocate.

Not all plans are the same. Regardless of what individual insurance companies call their plans, the only plans you can depend on to offer the same benefits as the bronze, silver, gold, or platinum plans are those on the federal or state health exchange.  In helping people research and determine the plan best for them we have run into companies who are using the same names as the health exchanges but do not offer the same benefits even though this is clearly against the law. We have also run into people who say their brokers have indicated they must disclose any pre-existing illness in order to qualify.  The ACA does away with the use of health issues having anything to do with pre-existing conditions and you should not be asked about this. Again however, I talk to people each day where they are still be told they will have a waiting period for “pre-existing” illnesses.  Look carefully at your options, consider using a tablet to write down each plan so when you have looked at each one you will be able to compare them fairly easily.  Make your own table or drop a note to the authors and we will send you a table to complete. Just fill out the contact form below and request your table/spreadsheet.

While clearly President Obama has stated that everyone will have the opportunity to keep their current plan, if the insurance company agrees to offer it, it is important for people to shop around.  Determine which of the benefits above are a part of your current plan as well as the importance of having that coverage. Remember you will be taking responsibility for whatever plan you choose.  If you choose to keep your “junk plan” you are taking a risk and betting that you won’t have a serious illness or an unexpected accident.  Medical bills can add up very quickly, so make sure you are protected.

Follow the link below to a Google spreadsheet which will help you easily compare Plans. Just substitute your own information in the Plan columns of the Matrix worksheet (see the tabs at the bottom of the spreadsheet) to compare up to 5 plans side by side. Please also read the information in the Read Me tab before you start.

https://docs.google.com/spreadsheet/ccc?key=0At1ZO71uykGwdC1HMG5MRWFYbnZWYXRyMUFEaDViR1E&usp=sharing

Note: The material at the link is copyrighted, but can be shared with attribution. Please read and adhere to the Copyright notice at the end of the Blog.

ByBarbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CENTC, CPCO, Lynne Smith, MSSW and Peter J Wills, Accountant and Business Software Support Consultant.

About the Authors:

Barbara is an independent consultant in healthcare providing consulting for physicians.  She is an industrial engineer from RPI with an MBA from NYU. She worked in the pharmaceutical industry for many years before moving into the healthcare industry where she had a company where she provided top quality coding, compliance and revenue cycle management services for physicians. She has since moved into full time consulting for physicians. Barbara is a nationally known expert known for her education, consulting and expert witness services.

Lynne has dedicated her career to helping others. She has experience as a social worker in a rural county, an administrator in a large hospital network and as a College Professor. She uses the skills she developed over the years as an advocate in a variety of areas including her most recent venture serving as a Healthcare Advocate. She is currently a recipient of the Pre-Existing Condition Insurance Plan, which she was able to purchase following the ACA being enacted.

Together, Lynne and Barbara own the ACA Healthcare Advocates consulting firm and are available to individuals, families and businesses to help them meet the requirements of the Affordable Care Act in order to meet the specific needs of the client while optimizing the fiscal considerations.

Peter is an Accountant and Business Software Support Consultant. Prior to moving to America to marry he was an Accountant in public practice in Australia for most of his working life. For the last three years before moving here he worked as a Business Software Support Consultant for a business software developer in the housing, mining and engineering field. Peter is using his computer and business talents to assist Barbara and Lynne.

Please direct your questions and/or inquiries to askcobuzzi@gmail.com

Copyright:

© 2013 Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CENTC, CPCO, Lynne Smith, MSSW and Peter J. Wills. All Rights Reserved. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CENTC, CPCO, Lynne Smith, MSSW and Peter J. Wills,  and The Place for Facts: Not Rhetoric with appropriate and specific direction to the original content. Permission for more comprehensive use may be obtained by contacting the authors at askcobuzzi@gmail.com

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The Insurances Companies have Created Two Classes of Insureds

I received an interesting email from one of my physicians in Manhattan NY.  I am copying and pasting it here.  I am making some modifications to protect the innocent.

I would like to first make a few comments before pasting the email.  It appears from this letter as well as an article that I read in the Washington Post a few weeks ago, the unwillingness of the insurance companies to learn how to work in a more competitive market, to become more efficient, more innovative because they have to be more price competitive is creating two classes of insureds.

The only way that insurance companies know how to deal with reduced premiums is to reduce what they pay to the facilities and providers of healthcare.  They don’t understand that another option is to find ways to reduce their costs of operations as others have been doing for the past 15 years as the insurance companies have continued to put downward pressure on the fees paid to doctors and the only cost doctors have had is to find ways to operate more efficiently and make less money.  They had no one to pass their reduced fees on to.

But insurance companies operate differently.  If their premiums are reduced, this time because of the increased competition that the Exchanges create for them, they in turn pass those reductions on to the facilities and the providers of healthcare.  But the reductions get too low at some point when the facilities and providers will finally say, no more, we refuse to accept your fee schedules.

And that has happened, as the Washington Post article has indicated, there are hospitals that are not included in exchange policies and now, I am finding out there are doctors groups selecting to not accept the reduced fee schedules being pushed on them by the insurance companies due to the Exchange competition forcing premium reductions.  These physician groups have said no and will not participate with these insurance plans because the fees offered by these insurance plans are too low.

So, the physicians and the hospitals participate with an insurance if it is not an exchange policy, but they do not participate with their exchange policies.  As a result, we have two classes of insured patients.  Those who have been lucky to have had insurance all along, usually through large employers, have the better class of insurance which more of the hospitals and doctors participate because the fee schedules, although not great, are more palatable.  Those who only have the choice to purchase their insurance via the Exchanges have a lower class of insurance and the same insurance companies are not considered participating plans with many of the same doctors and hospitals.  And these doctors and hospitals are the best and the brightest available to the population.  So, those purchasing in the exchanges are relegated to the second tier of hospitals and physicians, those who don’t have a choice but to accept the unacceptable low fees that these Exchange offer because they fear that they will not have enough patients to fill their schedules.

Here is the email I received from my specialist in Manhattan, part of the NYU Physician Group Independent Physician Association (Contracting arm for the physicians associated for the physicians):

Dear Patient

If you will be signing up for insurance through the New York State Health Insurance Exchange, there are some things you need to know.  I am currently in network with BCBS, Aetna, Cigna, United and Oxford.  For anyone with insurance that is a standard insurance plan, either obtained through your employer OR through the standard insurance market there will be NO CHANGE.  I WILL REMAIN IN NETWORK FOR THESE PLANS.  

BUT, if you purchase insurance through the NYS Exchange, the plans offered will be using a different network of providers.  That is, BCBS, Aetna, Cigna, and other insurers will have plans available but NYU Physicians have chosen to not accept to contract with those networks.  

On the other hand, I will be in network for Oxford and United insurances that are purchased on the NYS Exchange. 

If you will be insured under the NYS Exchange I will not be in network for any plans other than United/Oxford.

I will continue to accept commercial insurances as I have been and will remain in network for commercial non NYS Exchange plans in Oxford, United, Cigna, Aetna and BCBS.

Please feel free to contact me or my practice manager (Mary Jones, MaryJones@gmail.com) if you have any questions.

I think that we are going to still see things shaking out in the insurance company / provider of services relationships over the next year of so.  Part of the Affordable Care Act Law includes that the insurance companies have to sufficient quality care for the insureds.  If the remaining hospitals and physicians after fee schedule negotiations result in insufficient to support the number of patients needing care, there should be a basis for complaints to be filed against the insurance companies.  However, no one is sure what the process is for enforcing this provision at this time.

Insurance companies have had excessive operational waste because they have had no incentive to become efficient given the way their industry has worked.  All costs have been able to be passed on to their customers in the form of increased premiums (dollar inflow) as well as in reductions in fees to the providers of healthcare services (dollars outflow).

According to an article in the National Journal: (http://www.nationaljournal.com/healthcare/health-premiums-up-50-percent-from-2003-to-2010-report-20111117 )

Health insurance premiums rose by an average of 50 percent nationwide from 2003 to 2010, the Commonwealth Fund found in a report  (http://www.commonwealthfund.org/Publications/Issue-Briefs/2011/Nov/State-Trends-in-Premiums.aspx)  released on November 17, 2011. And costs went up even more for people covered at work—employee contributions to annual premiums increased by 63 percent, the report found.

The average family health insurance plan cost an average of $13,871 a year in 2010, the report found. Annual premiums rose in every state over the seven years from 33 percent in Idaho to 70 percent in Mississippi.

Even though Insurance Companies do not show large profit margins on their income statements, they still pay their executives large salaries and give excessive bonuses.  This is accepted modus opererandi in the industry. One of the reasons the profit margins are reported at only 3-5% is that insurance companies use transfer pricing, moving services and assets between divisions to hide profit, reducing the bottom line. (http://www.iedc-consulting.com/profit-margin-for-health-insurance-companies/ ) This is for two reasons.  They do not want to appear to be the wicked insurance company, taking advantage of the customer, so low profit margins support the image they want to portray.  The second reason is the best reason.  Lower profits lower income tax liabilities.

One of the reasons that insurance companies do not want to add to their efficiency is because of the income they get from float, being able to hold onto premium dollars while not paying it out for services provided.  According to Uwe E. Reinhardt, an economics professor at Princeton: (http://economix.blogs.nytimes.com/2009/09/25/how-much-money-do-insurance-companies-make-a-primer/ )

About 1 percent of WellPoint’s total revenue came from a category simply called “other revenue.” For the most part this probably comes from interest earned on the “float.” An insurer’s “float” is the money temporarily on hand when premium payments come in earlier than the outlays for insurance claims covered by these premiums.

In times when interest rates are high, an insurer’s float can be a major source of revenue, which is why sometimes health insurers stand accused of deliberately dragging out claims processing, strictly to increase the size of the float at any point in time.

WellPoint Inc. was formed from the merger of two companies that were once known as Blue Cross and Blue Shield of Indiana (Now Anthem BCBS) and Blue Cross of California, both originally not-for-profit plans. It is now one of the nation’s largest commercial health insurers.

Those of us who have policies from the Exchanges can no longer just call a healthcare provider (physician, imaging facility, hospital, lab, etc) and ask if they participate with our insurance company.  We need to qualify our question and ask if they participate with our insurance company with plans that come from the ACA Exchanges.  We need to check this out before making an appointment to make sure that we are going to a provider that participates with our Exchange plan.

Our Exchange plan should also provide us with a director of providers, probably via an internet website.  So, if you are having problems finding a participating provider, check with your plan and find out where they have a list of participating providers. They may even have a help line to assist you in finding a participating provider.  Use the resources made available to you by your insurance company.

If your insurance company does not provide a sufficient breadth of options available to you in a reasonable geographical radius of quality providers, you should complain to the insurance company.  If they do not assist you in getting more providers available, ask for permission to see an out of network provider who will be paid their full fees.  If this is agreed to, because of a lack of available providers in the specialty you require in your geographical area, make sure you get this agreement in writing from your insurance company.  NEVER TRUST ANYTHING TOLD TO YOU OVER THE PHONE BY YOUR INSURER UNLESS YOU GET IT IN WRITING. 

If your insurer refuses to make any accommodations for you, contact HHS with a written complaint, outlining your requirements, needs, and what the offerings are from your insurance company and explain why those offerings are inadequate.  Explain in the letter to HHS that you requested accommodations to see an out of network physician and that the insurance refused your request.  Explain you understood that ACA requires that insurance companies are required to provide sufficient quality providers for participants in the ACA Exchanges and your insurer is not providing sufficient quality providers for the following reasons…1), 2), 3), etc.

Do not anticipate that this will deny you access to providers.  There should be providers who participate and accept the fee schedules and contract terms of the Exchange plans.  Just understand that the insurance companies have created a two tiered system for insured in the short term because they are not quite sure how to deal the stresses of the increased price competition in the Exchanges.

About the Authors: By: Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CENTC, CPCO and Lynne Smith, MSSW. Barbara is an industrial engineer with an MBA. She worked in the pharmaceutical industry for many years before moving into the healthcare industry where she had a company where she provided top quality coding, compliance and revenue cycle management services for physicians. She has since moved into full time consulting for physicians. Barbara is a nationally known expert known for her education, consulting and expert witness services. Lynne has dedicated her career to helping others. She has experience as a social worker in a rural county, an administrator in a large hospital network and as a College Professor. She uses the skills she developed over the years as an advocate in a variety of areas including her most recent venture serving as a Healthcare Advocate. Together, Lynne and Barbara own the ACA Healthcare Advocates consulting firm and are available to individuals, families and businesses to help them meet the requirements of the Affordable Care Act in order to meet the specific needs of the client while optimizing the fiscal considerations.  Please direct your questions and/or inquiries to askcobuzzi@gmail.com.

Copyright:

© Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CENTC, CPCO and Lynne Smith, MSSW, 2013. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CENTC, CPCO and Lynne Smith, MSSW,  and The Place for Facts: Not Rhetoric with appropriate and specific direction to the original content. Permission for more comprehensive use may be obtained by contacting the authors at askcobuzzi@gmail.com