Affordable Plumbing Act

Only weeks after leaving office on January 20, 2017, former President Barack Obama discovers

a leak under his sink, so he calls Troy the Plumber to come out and fix it. Troy drives to President Obama's new house, which is located in a very exclusive, gated community near Chicago where all the residents have a net income of way more than $250,000 per year.

Troy arrives and takes his tools into the house. He is led to the guest bathroom that contains the leaky pipe under the sink. Troy assesses the problem and tells President Obama that it's an easy repair that will take less than 10 minutes. President Obama asks Troy how much it will cost. Troy checks his rate chart and says, "$9,500."

"What?! $9,500?!" Obama asks, stunned, "But you said it's an easy repair. Michelle will whip me if I pay a plumber that much!"

Troy says, "Yes, but what I do is charge those who make more than $250,000 per year a much higher amount so I can fix the plumbing of poorer people for free. This has always been my philosophy. As a matter of fact, I lobbied the Democrat Congress, who passed this philosophy into law. Now all plumbers must do business this way. It's known as the 'Affordable Plumbing Act of 2014'. I'm surprised you haven't heard of it."

In spite of that, Obama tells Troy there's no way he's paying that much for a small plumbing repair, so Troy leaves. Obama spends the next hour flipping through the phone book calling for another plumber, but he finds that all other plumbing businesses in the area have gone out of business. Not wanting to pay Troy's price, Obama does nothing and the leak goes un-repaired for several more days. A week later the leak is so bad President Obama has had to put a bucket under the sink. Michelle is not happy as she has Oprah and guests arriving the next morning. The bucket fills up quickly and has to be emptied every hour, and there's a risk the room will flood, so Obama calls Troy and pleads with him to return.

Troy goes back to President Obama's house, looks at the leaky pipe, checks his new rate chart and says, "Let's see, this will now cost you $21,000."

President Obama quickly fires back, "What? A few days ago you told me it would cost $9,500!"

Troy explains, "Well, because of the 'Affordable Plumbing Act,' a lot of wealthier people are learning how to maintain and take care of their own plumbing, so there are fewer payers in the plumbing exchanges. As a result, the price I have to charge wealthy people like you keeps rising. Not only that, but for some reason the demand for plumbing work by those who get it for free has skyrocketed! There's a long waiting list of those who need repairs, but the amount we get doesn't cover our costs, especially paperwork and record-keeping. This unfortunately has put a lot of my fellow plumbers out of business, they're not being replaced, and nobody is going into the plumbing business because they know they can't make any money at it. I'm hurting too, all thanks to greedy rich people like you who won't pay their ‘fair share'. On the other hand, why didn't you buy plumbing insurance last December? If you had bought plumbing insurance available under the 'Affordable Plumbing Act,' all this would have been covered by your policy." 

"You mean I wouldn't have to pay anything to have you fix my plumbing problem?" asks Obama.

"Well, not exactly," replies Troy. "You would have had to buy the insurance before the deadline, which has passed now. And, because you're rich, you would have had to pay $34,000 in premiums, which would have given you a 'silver' plan, and then, since this would have been your first repair, you would have to pay up to the $21,000 deductible, and anything over that would have a $7,500 co-pay, and then there's the mandatory maintenance program, which is covered up to 17.5%, so there are some costs involved. Nothing is for free."

"WHAT?!" exclaims Obama. "Why so much for a puny sink leak?!"

With a bland look, Troy replies, "Well, paperwork, mostly, like I said. And the internal cost of the program itself. You don't think a program of this complexity and scope can run itself, do you? Besides, there are millions of folks with lower incomes than you, even many in the 'middle class', who qualify for subsidies that people like you must support. That's why they call it the 'Affordable Plumbing Act'! Only people who don't make much money can afford it. If you want affordable plumbing, you'll have to give away most of what you have accumulated and cut your and Michelle's income by about 90%. Then you can qualify to get your 'Fair Share' instead of giving it."

"But who would pass a crazy act like the 'Affordable Plumbing Act'?!" exclaimes the exasperated Obama.

After a sigh, Troy replies, "Congress... . they didn't read it." 


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We get it. Now stop doing that.

In the course of working in Medical Administration for over 15 years, I am always amazed at what people will do to circumvent the policies of seeing a doctor. One of the basic policies is to present an  insurance card to confirm identity (the presentation of a valid photo ID, at time of service). So I was a bit perplexed when not once, but twice in the past few months, I had patients who presented a photocopy of their Medicare Card with their billing number (which is their social security number) blacked out. Each time I gave the “card” back to the patient and said I could not accept a photo copy, I needed the original card with all the information visible. You see, the only way I can get my doctor paid is to bill Medicare for your service and I need that number to bill. Then I ran across this article and it became clear:

”Why you shouldn't give your doctor your Social Security number”.

According to the article, doctors do not need your social security number to bill. That is correct; however, we do need your social security number if you choose not to pay your bill and we have to turn you over to collections. You see, when you go to a doctor, we are becoming a creditor, and we are accepting your word that you will pay us whatever your insurance company says you will pay after we've billed them. Surprisingly, many of you decide, after the fact and for a variety of reasons, not to pay us:

1) I shouldn't have to pay that much.
2) My insurance company said you billed wrong and you need to recode.
3) I thought it was free (preventive/well visits).
4) I do not believe in paying for medical care.
5) And many more that I have heard over the years.

So, if you do not want to give your doctor your social security number, then pay for your appointment in full, at the doctor’s fee schedule, and then wait for any refund after the doctor bills and receives notification from your insurance company.

The article makes suggestions about how to get out of giving your social security number, but alas, your social security number is your Medicare number, so this is suggested:

“CR’s advice: If you're on Medicare, you still have to share your Social Security number with your health care providers (in the form of your Medicare card), so they can get paid by Medicare. But you can get some protection by making a copy of your original card and, after the first visit, blacking out all but the last four digits of your Social Security number. That way you won’t have to carry around your original card, with your complete Social Security number, at all times.”

Okay so why is this so wrong? Simple: because of identity theft and the ability to change insurances during the open enrollment each year (and sometimes more often), the physician has to confirm each time you visit that you do, in fact, have insurance, and that insurance is, in fact, yours. This is done by confirming your Insurance Number and Name with outside entities that assure your doctor that, yes, the insurance is active and you are you. Thus, you can never bring in a photocopy, as each visit is its own self contained event which must be verified. So with all due respect to Consumer Reports: this advice is wrong, so please stop doing it.

Everything Old...

About a year ago, we wrote about a Tar Heel State municipality considering dumping its group coverage altogether. While we've long predicted that employers in general might find this attractive, the folks who run Montgomery County (NC) proposed an alternative based on an old life insurance standby, the "Executive Bonus" (EB) arrangement.

Briefly, an EB arrangement is used when an employer offers to buy life insurance for a valued employee, who could then name his beneficiary (usually his spouse). To keep the arrangement simple, the employer simply "bonused" the premium to the employee. Since the bonus was taxable, employers often included the estimated amount of the taxes in the bonus.

Fast forward a year, and "Christopher Condeluci ... says employers can offer a non-conditional cash bonus that employees use to purchase health care coverage."

[ed: Mr C is apparently a benefits attorney]

Sound familiar?

His idea is that employers could simply identify how much they want to pay towards their employee's health insurance (perhaps based on the soon-to-be-deleted group plan?) and then simply bonus the employees that amount. Because the ObamaTax outlaws using tax-advantaged Health Reimbursement Arrangements (HRAs) to accomplish this, the employee must receive the cash with no strings attached. So he can use those funds for his insurance, or a new car, or a cruise.

Where it gets interesting, though, is the means by which Mr C proposes to ensure that the proceeds do, in fact, go for insurance: "use a payroll vendor to allocate the money to be paid to a carrier for monthly premiums." That is, arrange it so that, even though the money technically goes to the employee, it's actually routed to the payroll vendor and then on to the individual's health insurer of choice.

I had some questions about the legality (not to mention efficacy) of this arrangement, and reached out to Louise Norris, proprietress of the Colorado Health Insurance Insider blog and a valued colleague. I wondered whether she also had reservations about this, since it's certainly pushing the envelope.

Here's her take:

"Personally, if I were an employer, I'd stay away from stuff like that, because I wouldn't want to have even a hint of anything that might be seen as skirting the law."

Succinct, and exactly on point. I also wonder how much the payroll vendor will charge to set up multiple accounts with various carriers to process these transactions. And I further question how insurers will react to payments for individual plans from payroll companies.

I just don't see value here.

Two strikes?

As the Halbig/King/Burwell circus plays on in the background, it might be instructive to see how the ObamaTax is working out so far in real life:

Case 1: FoIB Jeff M tips us to this article from Brant Clifton [ed: what a great name!], who relates the story of friends of his that endured the bureaucratic nightmare of learning that they're not as American as they thought they were:

"This couple had — apparently — not sufficiently proved to Blue Cross Blue Shield that they are legal US citizens.  (Now, for the record, these two are the whitest white  people with the whitest white people names ... They both have social security numbers and birth certificates showing that they were born in US states.)"

And they're still not covered.

Case 2: And a bit of schadenfreude. California citizen Melissa Klein was a good little Democrat, faithfully supporting the President and his signature legislation. But that was then, and this is now:

"Dear @CoveredCA - you've turned a staunch supporter of #Obamacare into an opponent. Id rather die broke than have to go thru your exchange."

Something about fury and a woman scorned?

Well:

"[I] support obamacare, but not incompetence. i cant file my taxes because of a form that was never generated and may never be"

Um, cognitive dissonance much?

But wait, it gets better:

"[T]here is an app for purchasing weed & yet our health care system can't generate a form for the IRS"

So she's saying that the ObamaTax has gone to pot?

Read the whole thing - consider it an antidote for the Clifton story above.

You're doing it wrong...

So, some years back, one of our clients - we'll call him Bruce - bought a life insurance policy on his son, Bruce Jr. He named himself as the sole beneficiary, and declined to name a contingent.

(A contingent beneficiary is one who would receive the proceeds if the primary pre-deceased the insured)

About 4 years ago, Bruce Sr died, and his estate settled by his widow, Susie, who then passed away. Very sad, but that's how life goes.

Now Bruce Jr has passed away.

Quick: who gets the insurance money?

I must admit to a bit of surprise here: according to the carrier, the son's estate would get the proceeds. This makes no sense to me: he was merely the insured, with no ownership or beneficiary rights.

Here's another way of looking at this: suppose I bought an insurance policy on my mechanic (assume I could show insurable interest), naming myself as the sole beneficiary. He makes no premium payments, has no rights rights in the policy. I pass away. Why would his widow (or children) have any claim on the proceeds?

Weird.

The primary lesson here is that periodically reviewing your insurance policies - particularly the beneficiaries thereof - is a good idea.

Another day, Another CoOp Snafu

Last week, Bob posted his take on the rather tumultuous CoOp situation. As fate would have it, I was working on a post about the same thing, but with a slightly different "angle." Now, I frequently claim that "I was told there'd be no math" here, but for once I'm going to be the culprit.

Thanks to a heads' up from FoIB Josh Archambault, we have this little gem:

"The Minuteman Health Inc. Co-op in Massachusetts got more than $156 million and covered only 1,822 people – over $86,000 per enrollee."

But wait, that's not all!

"HealthyCT Inc. Co-op in Connecticut got more than $128 million and covered only 6,094 people – more than $21,000 per enrollee."

If that doesn't give you the warm fuzzies, I have no idea what will.

Cancel that, sure I do: there are another handful of CoOp "success" stories at that link (for a given value of "success"), with a combined cost of $800 million in 2014, insuring a total of just over 22,000 people. For those keeping score at home, that's an average cost of $35,000 per enrollee.

To really drive home the point of just how wasteful this whole exercise has become, that's about $3,000 per month per enrollee.

Seems spendy.

So, I meandered over to the 404Care.gov site to find out how much a Platinum plan would cost a 64 year old Prairie Stater (the MA connector link appeared to be broken when I tried it). You'll likely not be surprised that the most expensive plan I could find was just over $1,500 a month, roughly half the cost of the average CoOp.

Your tax dollars (not) at work.

[Thanks to Co-Blogger Pat P for his help]

Five Little Words: An Epiphany

"Exchange established by the State under 1311"

I've always believed the adage that "words mean things;" that is, words have meaning and one should be careful in how they're used. Sometimes, silence is golden: not speaking can communicate better than words.

In the original series opening of Star Trek, William Shatner speaks of the ship's "5 year mission." That always struck me as self-limiting: what if it had been picked up for a 6th season? Would Captain Kirk have become Captain Steubing?

Likewise, in The Next Generation, Patrick Stewart calls it an "on-going mission," an unnecessary redundancy. How much more sense it would have made to just say - in both shows - "its mission,"  no qualifier needed.

And so it is with the subsidies. The whole of Section 1311 refers to "each State" and "a State" over and over; if Congress had truly wanted subsidies available for everyone whose income justified it, why not just say so? It would have been simple enough: "... enrolled in through an Exchange established  under the Patient Protection and Affordable Care Act."

Easy peasy.

That they chose to specify Exchanges established by a "State"  means something. Words matter.