In this environment of health care reform, rising costs and shrinking budgets, it is easy to be lured by the promise of an extremely affordable health plan.  Unfortunately, many of these plans are fake, and the only party benefiting is the scammer behind the plan. 

Modern Healthcare (8/12, Vesely) reports, “Federal and state law enforcement agencies are working together to crack down on fake ‘medical discount plans’” that typically “target the uninsured with the promise of cut-rate health coverage.” The FTC is acting with officials in 24 states on “54 lawsuits and regulatory actions to stop these scams. The charges include peddling sham insurance, conducting illegal robocalls and fax blasting.” Modern Healthcare notes that three companies, the Consumer Benefits Association, United States Benefits and Health Care One, “have been charged with deceptively marketing medical discount plans.” Authorities said that those companies took enrollment fees and “then did not allow customers to disenroll.”

Reuters (8/12) reports that such plans have proliferated since healthcare reform laws were passed, and the FTC’s David Vladeck said, “The uncertainty about the benefits that will be available under the new federal insurance program and the fact that the budget doesn’t kick in until 2014 is going to give scammers very fertile ground for this. … They’re going to try to capitalize on uncertainty.”

The Sacramento Business Journal (8/12, Robertson) says that Healthcare One “had already stopped operating in California, though advertisements were posted in the Sacramento area earlier this year.” State authorities “issued a cease-and-desist order in February, after concluding the company was engaged in deceptive marketing that misled consumers into believing they were buying health insurance.”

The South Florida Sun-Sentinel (8/12) reports that the Consumer Health Benefits Association operated in Coconut Creek, had “sold worthless policies to about 40,000 people nationwide” since 2003, “and collected an estimated $15 million over two years,” according to the FTC. The Sun-Sentinel adds that the FTC’s “suit against CHBA also names its Florida subsidiaries, National Benefits Consultants and National Benefits Solutions, as well as company President Ron Werner, Vice President Louis Leo and Operations Manager Rita Werner, all based in Coconut Creek.”

The St. Paul Pioneer-Press (8/12, Snowbeck) reports that Minnesota Attorney General Lori Swanson “brought a lawsuit against one of the three companies — Consumer Health Benefits Association of Florida — charging the firm with pressuring Minnesotans over the phone into buying a low-cost health plan that wasn’t really insurance and offered few benefits.” The state “won a consent judgment barring the company and its principals from selling health discount plans in Minnesota.” In addition, “the company must pay $500,000 in restitution and penalties.” Bloomberg News (8/12, Wayne) reports that Swanson “said economic conditions also created the potential for scams. In her state, the number of uninsured people increased to 9 percent last year from 7 percent in 2007,” creating what she called “a real spike in complaints.”

According to the Memphis Commercial Appeal (8/12), authorities “raided the Nashville office of United States Benefits LLC on Aug. 5 after numerous consumer complaints,” and the FTC filed a complaint in US District Court there accusing “the company and its owner, Timothy Thomas, of violating the Tennessee Consumer Protection Act and the Federal Trade Commission Act” as well as “the federal Telemarketing Sales Rule and the Do-Not-Call law.”

Before you sign, verify the legitimacy of the plan.  Call a reputable local insurance broker, the State Insurance Commissioner or the Federal Trade Commission.

We will notify you when more information becomes available

Mercer, the benefits consulting firm, last week put the cost of a single health reform law provision — dependent eligibility expansion — at up to an extra 2 percent increase in medical premiums beyond what would otherwise be expected for 2011.  It is becoming exceedingly clear that it costs more to get more.

Read more here about the recently released interim rules released by the U.S. Departments of Health and Human Services (HHS), Labor & Treasury relating to status as a grandfathered plan.  This recap is provided courtesy of National Association of Health Underwriters.

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA) which revised by the House Reconciliation Bill that was signed into effect on March 30, 2010.

With this new law, the employer based system of providing healthcare to employees is maintained. There is NOT a public plan and individuals will be required to have coverage by 2014.

While this law makes several positive changes, the focus is more on health insurance reform than health care reform as it fails to address many of the underlying factors which continue to contribute to the skyrocketing cost of healthcare.

At the present time, we do not have a lot of detail with regards to the definitions of certain provisions as well as the method for implementation.

So what does this mean for you? Here is a summary of the timeline of the items (not all inclusive) that will affect you— (for more detailed information, please visit our website and select healthcare reform)

Effective immediately:

• New federal rate review process is established
• State grants to establish ombudsman programs are awarded
• National risk-pool is created 90 days from enactment
• Temporary retiree reinsurance program is established
• Small business tax credit is established

Effective on or after 10/1/2010:

• Lifetime benefit maximums are prohibited
• Cost sharing or caps on preventive benefits are eliminated.
• Coverage for dependents up to age 26 is mandated (married child can be a dependent)
• Eliminates pre-existing condition exclusions for dependent children under age 19
• Allows for restricted annual limits on essential benefits (as determined by Department of Health & Human Services HHS)
• New health plan disclosure and transparency requirements are created
• $250 rebate for Medicare participants falling into Rx donut-hole

Effective on or after 1/1/2014:

• Health Insurance Exchange is created
• Guarantee issue is required
• Rating restrictions are imposed for factors such as age, area, family composition and smoking status
• Individual and Employer requirements are established
• Pre-existing condition exclusions are eliminated
• Waiting periods for coverage are limited to 90 days
• An essential health benefits package is established that provides a comprehensive set of services.
• States are allowed the option to merge the individual and small group markets.

Source—“Healthcare Reform Implementation Timeline” – Kaiser Family Foundation, 3/31/2010

Lunch & Learn Seminars Coming Soon!

Beginning in May, we will be hosting lunch & learn seminars to help you better understand the impact of this new legislation. Watch your email for a list of dates and times.

These will be free seminars and a brown bag lunch will be provided.

Check our website frequently for updates and availability as space will be limited.

Key Changes to Medicare Part D Drug Benefit Coverage Gap

One of the most beneficial components of the new PPACA law is that over time, it will reduce the amount that Medicare Part D enrollees will have to pay for prescription drugs when they fall into the “coverage gap.” The coverage gap in 2010 is $3,610 and approximately 14% of all enrollees reach this coverage gap.

Beginning in 2011, the new reform law will reduce the amount that Part D enrollees are required to pay for their prescriptions when they reach the gap.

2011— a 50% discount of the total cost of brand name drugs in the gap, as agreed to by pharmaceutical manufacturers.

Over time, Medicare will gradually phase in additional subsidies in the coverage gap for brand-name drugs (beginning in 2013) and generic drugs (beginning in 2011).

We Have Moved!

We have a new home! As of April 1st, we have re-located to the Burnham Drive Professional Plaza.

Our new address is:

11505 Burnham Drive NW, Suite 101
Gig Harbor, WA 98332.

Our phone, fax, email and mailing address remain unchanged.

The office will reopen Monday, March 29, 2010 at 8:00 a.m. in our new location:

11505 Burnham Drive NW, Suite 101
Gig Harbor, WA 98332

All phone, fax and email addresses will remain the same.

National Healthcare is the big topic these days. Regardless of what end of the political spectrum you are on, there are disagreements on what should be done regarding healthcare. Everyone agrees that the system is not perfect and there are a large number of uninsured Americans, including children and the elderly.

In 2007, 45.7 million Americans went without health insurance coverage at some point during the year. What to do about it is the question. A recent poll by Pew Research Center from the People & the Press showed a 44% to 38% margin, more American generally oppose than favor the healthcare proposals now before Congress.

Here are some thoughts to consider: In the current proposal, the public would be sold through a new National Health Insurance Exchange. Consumers would then choose from a range of private policy offerings or they could choose the “public plan”. This sounds as though it would provide competition in the marketplace, but unfortunately the structure of the program will encourage people to select the public plan.

With this in mind, let’s consider how our current public plans work—Medicare and Medicaid. Both government plans underpay hospitals and physicians by as much as 15 to 20% in order to keep costs down. But now, that cost shift goes to commercial payers, an estimated $88 billion in 2007. In the State of Washington, Medicare pays about 25% less than private insurers causing hospitals and physicians to charge consumers more to make up for the financial loss.

In turn, having a public plan that encourages participation over the private plans will continue to shift the costs, causing the private insurers to raise their prices to make up for the cost shifting. In addition, remember that private insurers must cover their costs and they cannot afford to run a deficit. A public plan however, comes from funds out of the federal treasury. It could operate at a loss at least for a while until the result of that becomes the next hot topic…and where are we left then? We would be left without private insurers, escalating healthcare costs and without our insurance brokers to be our advocates.

Does National Healthcare sound too good to be true? Then it probably is…

Stressed Out?

The medical community is starting to understand the link between stress and the impact it has on your health. Stress is not necessarily something we can avoid. However, there are ways to improve how we deal with the stress…

People who do not manage stress well tend to have headaches, stomach pain, sleeping problems, illness and depression. Long term (chronic ) stress is caused by stressful situations/events that last over a long period of time. Chronic stress can lead to health problems and can have an impact on your relationships with others, including your family and co-workers.

Some ways to relieve stress include:

• Writing in a journal 10-15 minutes a day about stressful events and how they impacted you. This will help you find solutions to coping with them.
• Exercise or doing a hobby you enjoy will help relax you and will reduce your stress. Even doing activities such as housecleaning or yard work can help.
• Spending some quiet time alone each day to mediate, can make a big impact on how you manage stress. Focusing on your breathing and being present.
• Ways to avoid stress: Finding a balance between personal, work and family needs, time management, getting enough sleep, and adopting healthy habits can all help you avoid chronic stress.

Finally, set goals for yourself to reduce the stress in your life. Create coping strategies will improve your health, your day to day experiences, and your relationships. Most importantly, when you feel your stress level increase, stop and breath!

What Do You Think About Having a National Public Option Health Plan?

Let us know you opinion! Take the Poll.

We will post the results in the next newsletter.

Download August 2009 Newsletter