Available Care Act – Beyond “Coverage”

Much talk about insuring people for healthcare needs.  The giant bedpan in the room is availability.  What good is having Medicare, Medicaid, exchange plans, if you cannot find a doctor for hundreds of miles who will accept your provider’s coverage?  Just look.

The pundits talk about providing millions of people “access” to healthcare; however, they cannot explain why many of the “covered” still do what they did when they had no insurance, go the emergency room of the public hospital known to be the one that cannot turn them down.

Health insurers specify what they will cover and what the insured must pay, in terms of dollars and percentages.  What they do not spell out, is the amounts they are willing to pay the doctors and hospitals for various treatments.  The doctors and hospitals that are willing to accept the insurer’s terms are added to a “network.”  If the insured uses these doctors and hospitals, “in network,” the patient pays less; “out-of-network” providers, the insured pays much more.

Medicare, and the related private insurance plans are shunned by many healthcare providers because of the intense complexity of coding rules, poorer reimbursement rates, and 6-month slow-pay of claims.  I cannot blame them for wanting the easiest, most profitable patients, but look at what that does to retirees:  it shoves them into the offices of the newest, least experienced doctors, who do not have privileges at the best hospitals.

Another specious barrier doctors erect is “not accepting new patients.”  If that is true, why do they prominently promote their doctors, facilities, and services?  Why do they list the insurance plans they accept, on fancy websites?  What do they do when patients get well, move, change, outgrow their need, or die?  Who takes their places?  Are there waiting lists?  This policy seems wildly inconsistent, and dubious to me.

Today’s labyrinth of laws, maze of insurance coverages, intricacies of medical practice, incorporation of hospitals, vast array of medical devices, tests, and procedures, and incomprehensible myriads of drugs and medicines, are the starting point of future choices.  The concept of choosing your doctors, clinics, and hospitals still appeals to me.  If all health insurance policies must meet some minimum standards of coverage, why should health providers exclude any of them?

We have a historic opportunity to put features into the fabric of healthcare; the federal government has more incentives and flexibility to “get it right” as they formulate new laws.  Why not pass a new law called “The Available Care Act?”  If you accept anything except cash for medical services or goods, you accept the coverage of any patient who walks in your door.


Obamacare 6.7 Million Employees Lose Health Insurance

Yes, as I wrote in my August 31, 2016 article “Middle-Class Families Robbed by Obamacare – Before and After Taxes,” Obamacare has seen employers drop health insurance benefits for employees (6.6 million in 2014).

The administration boasts an increase of 9.5 million using the new exchanges in 2014.  Heritage.org provided this diagram of changes in health insurance coverage for 2014.  It shows that of 9 of the 9.25 million people newly covered were enrolled in expanded Medicaid.

It also shows the decrease in 6.7 million employer provided health insurance and 4.8 million increase in individual insurance.  Apparently 2.1 million self-insured (private pay, no insurance).

Employers stopped health insurance for 6.7 million employees after Obamacare came into effect.  The premiums paid by the employer for those insurance benefits were not taxed to the employees.

Often, those employers did not increase the paychecks of employees, they just pocketed the money.   The employees got a pay cut equal to the premiums.  The employees bought new coverage through the exchanges with after-tax dollars, probably for higher premiums than the employer paid.  But, even if the employee could buy equivalent coverage for the same premium, the employees lose.


Mary Smith earns $4,000 per month (taxable) and health benefits of $1,000 per month (not taxable).

Employer health insurance $1,000.  Equivalent individual coverage $1,400.

In the first example, Mary has $1,400 less per month, $16,800 per year.  The employer gains $1,000 per month, $12,000 per you.

In the second example, Mary has $615 less per month, $7,380 per year.  The employer loses $65 per month, $780 per year.

Employer Drops Health Insurance and Does Not Increase Salary to Offset


Employee Compensation

Before After Change
Salary 4,000 4,000 0
Income tax withholding 15%    600    600 0
Social Security & Medicare 6.75% 260 260 0
Paycheck                                              3,140 3,140 0
Health Insurance -1,400 -1,400
Total After-tax, after insurance       3,140 1,740 -1,400
Employer Costs
Salary 4,000 4,000 0
Social Security & Medicare 6.75% 260 260 0
Health Insurance 1,000 0 +1,000
Total Costs                                          5,260 4,260 +1,000



Employer Drops Health Insurance and Does Increase Salary to Offset


Employee Compensation Before After Change
Salary 4,000 5,000 +1,000
Income tax withholding 15%    600 750 -150
Social Security & Medicare 6.75% 260 325 -65
Paycheck                                              3,140 3,925 +785
Health Insurance -1,400 -1,400
Total After-tax, after insurance       3,140 2,525 -615
Employer Costs
Salary 4,000 5,000 +1,000
Social Security & Medicare 6.75% 260 325 -65
Health Insurance 1,000 0 -1,000
Total Costs                                          5,260 5,325 -65





Doctors & Hospitals Reject Pre-existing Fedicare

Health care providers are rejecting people with Obamacare policies, Medicare, and Medicaid because of reimbursement rates, and the financial inabilities of Obamacare patients to pay their share.


Insurance spreads large financial risks over a pool of people who face that risk.  Only some of the people will actually experience the losses.  Members of the pool pay “premiums” to pay the losses, administer the process, and provide a profit to the owners of the insurance company.

Insurance companies use “underwriters” to:

  • Measure the potential financial risks of issuing policies
  • Set the conditions included and excluded
  • Set the premiums and duration of coverage

The idea is to:

  • Keep premiums low for normal risk people
  • Set higher premiums for people with higher risks
  • Limit coverage for conditions that already exist
  • Decline people who are high risk

Obamacare Reality

Obamacare health insurance plans cannot decline people with pre-existing conditions, by law.  The medical costs are not a risk for these people, they are an enormous, financial certainty.  These high costs must be covered by premiums paid by other insured policy holders, or absorbed by the insurance company.

Obamacare prohibits “marketplace” insurers from rejecting high-risk applicants, and people with preexisting conditions.  However, not all policies are created equal.  The variables are:

  • Premiums
  • Government premium subsidies
  • Patient co-payments
  • Patient and family deductibles
  • Reimbursement rates (the amounts insurers pay the doctors, laboratories, imaging clinics, and hospitals)

Service providers need to get paid an acceptable amount, in an acceptable amount of time.  Insurers offer reimbursement levels, but providers do not have to accept them.  Providers can set the minimum for their services, but the insurers do not have to include them in their “network.”

The medical community now does what insurance companies used to do – when in doubt, decline Obamacare, Medicare, and Medicaid patients.

The top quality insurance companies are withdrawing from the marketplaces to avoid the losses they experience from the pre-existing condition patients.  The insurers are limiting the types of plans to Health Maintenance Organizations (HMO’s) which only use selected providers.  They are eliminating Preferred Provider Organizations (PPO’s) which give the insured choices of providers within a selected “Network,” and “Out of Network” for higher copays.

People are dropping their health insurance because the combined costs of premiums, co-pays, deductibles; the lack of providers who accept their insurance contributes to this attrition.

Tricked Again & Again

Every time we think we have learned all the tricks politicians can use to magically “fix” problems with more government, we fall for another trick, or the same trick wearing a disguise.

If you pay good money to gain admission to a magic show, you purposely pay for illusions; you insist on being amazed by apparent suspension of the laws of nature; you yearn for certain universal truths to be suspended.  But then, you leave the tent, make your way home, and find that physics and gravity persist.  Listen to the pitch:

“Well step right up folks, a little closer there, sir, make room for the lovely lady behind you.  The show is about to begin.  You will be amazed at the wonders you will witness just inside this door.  Yes, ladies and gentlemen, inside this tent, and this tent only, can you see the future manifest right before your eyes.”

 “Are you mad about your lower-paying jobs, over-the-top costs of education, or the hard-to-notice economic recovery?  Are increasingly unaffordable health insurance premiums getting you down, while your out-of-pocket medical costs are skyrocketing?  Then this is the show for you.  Relax, come on in; see and enjoy the amazing magical solutions to these and many other problems; witness and wonder at the incredible, the one, the only Mystical Mogov Mandate.”

 “And how much will it cost to witness these miracles? A hundred dollars?  A thousand dollars?  No, tonight, because you have taken your valuable time to be here, this event is 100% free.  That’s right, not even one penny will leave your pocket.  In fact, many of our patrons report that they actually leave our tent and are shocked to find more money in their pockets, just for accepting our ticket.”

“This year we have completely revamped every amazing feat of magic.  You will be astounded at how different the same act can look if you just believe it will work this time.”

“I know some of you may have attended our shows in years past.  But that was so long ago, it does not matter.  After all, we need to live in the here and now, and not dwell on ancient memories.”

 “Oh, and to ensure your safety, we do ask you to please leave your guns at the door.  After the show, it will be clear that you don’t need them anyway.” 

 I get uncomfortable when politicians insist we need to “hold the course” that has not worked, while they fix the problems caused by the “course” we held.

It is clearer and clearer to me why Bernie Sanders and Donald Trump have risen to smite the “Pharisees” of both political sects:  Americans are exhausted by a river of blatant lies.

We are fed up with smiles that promise relief, but portend more pain.  We cheered and voted for “you can keep your doctor” now we are sobbing at no choice of doctors, higher premium and out of pocket costs, and insurance companies denying treatment for much needed treatments.

We are livid at fairy tales that we can borrow a king’s ransom to redeem our children from poverty through college; then we find them still living in our basement, working part-time, no future jobs.  We are incensed at proclamations of higher employment when our diets grow meager, and our prospects grow dimmer.

The old guard’s patrician grasp for power may well be their undoing.  Their elite pretense of empathy may lead the plebeians to throw off the chains of their indentures.  The power mongers’ smugness, avarice, and sense of entitlement can breach the comity of our unique American social contract.  America’s promises to promote equity of opportunity, and its commitment to liberty have been a bold experiment.  Our failure to honor these promises could show the rest of the world that there is no foundation of truth beneath our declaration of “unalienable rights” and “pursuit of happiness.”


The Federal Reserve Threatens to Impale the US Recovery – The World is Not Ready Yet

The Federal Reserve could raise interest rates, but what would it cost?  Would you believe that every quarter of a percent increase will increase our borrowing by $50 billion per year?  That’s right, because we operate at a deficit, any new interest on government debt goes straight to the bottom line of the national deficit.  And then it compounds, because we borrow the money to pay the interest on the $50 billion, etc. making compound interest our enemy.

Weak global economic growth, and a stronger US dollar are not prescriptions for stronger employment or stronger exports.  So why is the Federal Reserve hinting at a raise in rates?  Is it because that is what they are “supposed to do?”

I hope the Fed looks beyond our borders at the economies of the world and notes the trend toward decreasing rates due to recession or rumors of recession.  The US employment rate is deceptively low until you look at total wages paid to the 95% of Americans who have jobs now.  Underemployment after years of unemployment, and the elimination of health insurance as a benefit, are not signs of a return to prosperity.  The effective un(der) employment rate is more like 20% compared to pre-recession levels.  I believe that the rise of populism on both ends of the political spectrum (Trump and Sanders) is a telling indication of the pain and anger felt by all persuasions.  We need to listen to the truth: millions of citizens have not come close to getting better financially.

I say re-sheath that “sword of Damocles” until we are better healed from a decade of financial wounds.