Study: Individual health premiums spiked 49 percent

Premiums for individually-purchased health insurance rose an average of 49 percent during the first year of the Affordable Care Act, with young men seeing rates go up 78 percent,  according to a new nonpartisan review of 2013 and 2014 rates.

An increase is no surprise. The ACA mandated a higher level of benefits for all policies and eliminated the practice of denying coverage or boosting rates based on medical conditions.

Image: HealthPocket

But Kev Coleman, head of research and data for HealthPocket, says he was caught off guard by the size of the hikes.  "I thought it was going to be a lower amount,"  he said Tuesday.

HealthPocket,  a health insurance comparison website owned by Health Insurance Innovations,  compared premiums for nonsmoking 23-,  30-  and 63-year-old men and women in the two largest metropolitan areas of each state.  The study includes 2014 policies sold on ACA exchanges and independently.  It does not include group rates for employer-provided insurance.  And the 2014 rates don't factor in the government subsidies that reduced payments for most people who bought on the exchanges.

The youngest men saw the biggest hike,  from an average of $145 a month in 2013 to $258 this year,  a 78 percent increase.  Again,  it's no surprise that men took a hit.  The ACA eliminated the practice of charging women more because of the possibility of pregnancy and other gender-specific expenses.

The oldest men saw the smallest percentage increase  (23 percent),  but that's partly because they had the highest 2013 rates  ($603 a month,  going up to $741).

Coleman

Coleman cautions that the averages don't mean that most people saw rate hikes that big.  The ACA eliminated many of the cheapest policies with the stingiest benefits,  so those people had to trade up and pay more.  Many people who had no insurance in 2013,  including those rejected for expensive medical conditions,  joined the 2014 pool.  Insurance companies raised rates to cover their anticipated expenses.

The report doesn't break out increases by state,  but it does list 2014 averages.  North Carolina's 23-year-olds are paying an average of $249 a month  ($9 under the national average),  30-year-olds are paying $283  (also $9 under the national average)  and 63-year-olds are paying $736  ($5 under the national average).

The report notes that the comparison is  "multifaceted and prone to political misuse."  You can find a discussion of the issues in the report's conclusion  --  and with midterm elections less than a week away,  you can also bet on seeing some simplified versions circulating soon.

ACA tax email: Alarming but bogus

Former colleague Pat Gubbins forwarded a message that landed in her inbox recently,  detailing a list of hefty tax hikes "passed under the Affordable Care Act, aka Obamacare."  She was skeptical,  but it came from a financial professional and,  as she noted,  "the increases are indeed alarming if true."

Actually,  it's a viral email that FactCheck.org labeled  "nonsense"  when it started circulating at income tax time,  now updated for election season.  Here's the version Gubbins got,  forwarded by a cousin in Tennessee.

BARRINGTON FINANCIAL ADVISORS, INC. 

a Registered Investment Advisor 

(Celebrating 42 years of Professional Service) 

In case you didn't notice. 

Here is what happened on January 1, 2014 : 

Top Medicare tax went from 1.45% to 2.35%

Top Income tax bracket went from 35% to 39.6%

Top Income payroll tax went from 37.4% to 52.2%

Capital Gains tax went from 15% to 28%

Dividends tax went from 15% to 39.6%

Estate tax went from 0% to 55%

Remember this fact: These taxes were all passed only with democrat votes, no republicans voted for these taxes.

These taxes were all passed under the Affordable Care Act, aka Obamacare.

If you think that it is important enough that everyone in the U.S. should know this, pass it on. If not, then delete it.

Elections are coming! 

Respectfully., 

William C. Heath, CFP® . 

Chairman & CEO .

Here's what FactCheck had to say: "Some of these figures aren’t accurate, and none of these increases took effect on Jan. 1, 2014, or had anything to do with the Affordable Care Act.  And the claim that  'not one Republican voted to do these'  is false."

It's not that the ACA doesn't include tax hikes.  It does,  including increased Medicare taxes on high earners,  a new tax on high-cost employer-sponsored insurance plans and penalties for people who don't get coverage.  But this list seems aimed at creating outrage and anger before people go to the polls next week,  not analyzing the health care program.

Heath

William Heath is indeed the chairman and CEO of Barrington,  a Houston-based financial firm with offices in Texas and California.  When I inquired,  he noted that he didn't write the email,  but he didn't deny forwarding a message filled with inaccuracies.

"No matter when or who caused the increases, we, the taxpayer, will be paying them,"  Heath said in an email.  He cited the final paragraph from the FactCheck report:  "Having said all that,  we’ll note that taxes have gone up for some as a result of Obamacare.  The law imposes a 3.8 percent tax on net investment income that applies to people who earn more than $200,000 a year for singles,  or $250,000 for joint filers. It also levies an additional Medicare tax of 0.9 percent on wages,  salaries and self-employment income for people in those income groups.  However, these changes also took effect in 2013,  not 2014." 

Reader: Can I swap workplace coverage for Obamacare?

Reader D.C. Tomlin has a timely question:  "Even if your workplace offers health care insurance can you still price the costs of the Affordable Care Act and perhaps qualify if it is cheaper?"

It's timely because many of us are getting 2015 health insurance packets from our employers and learning that premiums will rise.  But while it can't hurt to check out HealthCare.gov  (the site says  "window shopping"  info on 2015 rates is coming in early November),  it's unlikely you'll find a better deal.

If your employer's insurance meets the federal government's standards for affordability and value  (read details here),  you aren't eligible for a subsidy,  which is what keeps ACA premiums low for many low-  and moderate-income people.  You can still opt out of your employer's plan and pay full price on the exchange,  but if your employer is covering part of the premium you're likely to end up paying more.  And if you're going that route,  you'd do better to look at a wider menu of private-pay offerings  (only three companies will offer ACA policies in North Carolina in 2015,  and some counties have fewer options).

Families like mine face another twist.

As the only full-time employee,  I've got my husband and 25-year-old son on my Observer policy (the ACA requires employers to offer coverage until children turn 26). 

Our son works two part-time jobs,  neither of which offers health insurance.  His income would likely qualify him for a hefty tax credit.  But I was initially told that because the ACA makes him eligible for my plan he can't claim that aid.

"Having an offer of adequate, affordable employer coverage prevents those family members from accessing financial assistance in the marketplace.  This is known as the 'family glitch,'  "  said Madison Hardee,  a Legal Services of Southern Piedmont lawyer and health insurance navigator.

However, Donna Elliott Grissom,  executive director of HealthNet Gaston,  found a link indicating he does have that option.  Because he pays his own taxes,  rather than being listed as our dependent,  HealthCare.gov says he is eligible for subsidies  (Hardee agrees that's a crucial distinction).  But that's true only if I don't sign him up  --  and the Observer's enrollment ends before the ACA exchange opens for 2015 enrollment on Nov. 15.

I'm glad we have options,  but it does make for complex choices.  And in North Carolina,  the calculation has to include whether his 2015 income might dip below $11,670,  plunging him into the coverage gap in which he would no longer be eligible for aid.  That's an issue in states that have declined to expand Medicaid,  which was supposed to fill that gap for low-income adults.

Grissom,  who has young adult children of her own,  says she was also unclear on how this works until she started digging.  "We both learned something new today,"  she said.  "And like everything else ACA-related – it’s complicated!"

Prepping your wallet for a colonoscopy

Dr. Rig Patel says he can't keep up with all the twists in insurance coverage of colonoscopies,  and he's president of the N.C. Society of Gastroenterologists.

Patel

When I called him recently to ask about hidden costs,  he was eager to talk.  The situation is changing rapidly for the better,  he said,  but the situation is still  "very frustrating and very difficult"  for doctors and patients.

As the 50-and-over crowd knows,  the last thing you want to do is add unpleasantness to what's already a humbling reminder that you're getting old. Taking a superlaxitive and getting a probe of your bowels is no fun  --  but the reduction of colon cancer deaths in people over 50 is one of the big success stories in the fight against cancer.  So it's worth talking about a topic that makes us squirm to help people reduce the financial wallop.

A screening colonoscopy for people 50 and older is supposed to be fully covered under the Affordable Care Act.  But depending on your policy,  you could get a bill for sedation,  for a pathologist's service  or even for the whole procedure if precancerous polyps are found.  Patel says private insurance companies are coming around to full coverage,  but there are still exceptions  --  and patients who get bills based on outdated information.  His advice:  Work this out with the insurance company and the billing office before you show up,  rather than trying to wrangle with your doctors and nurses when the time comes.

Don't go to a hospital for the procedure unless there's a medical reason;  it can double or triple your bill,  Patel says.  And ask how you'll be sedated.  Some doctors administer Demerol and/or Versed to induce drowsiness and  reduce pain.  That's not likely to generate a separate bill.  However,  Patel says the trend is toward using propofol,  which puts patients into a deeper sleep and must be done under supervision.  He said his practice in Raleigh has shifted from an anesthesiologist to a certified nurse anesthetist to cut costs.  Ask your doctor about the medical and financial issues beforehand.

Can a patient skip the sedation altogether?  "If they're motivated we will do that,"  Patel said,  but it's far from ideal.  "You need a very quiet,  peaceful patient who's not moving around.  We want to be able to focus on the procedure and not on that uncomfortable patient."

Repeal or reform: Next steps aren't simple

A recent conservative poll found that 60 percent of voters want Congress to repeal the Affordable Care Act.

The Kaiser Family Foundation's polling found the opposite, that 63 percent would rather see Congress work to improve it.

So what's up?  According to a piece by Jeffrey Anderson in The National Review Online,  it's a sign that the Kaiser foundation skewed results by casting the issue as a choice between  "work to improve the law"  and  "repeal the law and replace it with something else."  The political research and strategy firm McLaughlin and Associates offered the options of   "it should remain the law of the land,  either in its current form or in amended form,"  "it should be repealed and replaced with a conservative alternative that aims to lower health costs and help people get insurance,"  or "it should be repealed but not replaced with an alternative"  (the last two combined got 60 percent). 

Anderson is executive director of The 2017 Project,  which promotes a conservative agenda. He argues that Kaiser isn't the  "gold standard"  on health care polling that many in both parties believe it to be,  but  "a pro-Obamacare outfit." 

Given the Observer's decision  (and mine)  to work with Kaiser Health News,  which is funded by the foundation,  I thought that was worth checking out.  It didn't take long to find that the McLaughlin questions were focused on conservative alternatives promoted by The 2017 Project  --  or that Anderson's group commissioned that poll,  which he failed to mention in the National Review piece.  As I reported last month,  the Kaiser poll also found plenty of anti-Obamacare sentiment  --  in fact,  the Kaiser poll got a stronger negative reaction to  "a health reform bill signed into law in 2010"  (49 percent unfavorable to 35 percent favorable)  than The 2017 Project poll got to  "the Patient Protection and Affordable Care Act, also known as Obamacare"  (52 percent disapproval to 43 percent approval).

But there's an important kernel of truth in Anderson's piece when he notes that  "improve the law"  and  "replace it with something else"  are vague options.  That's the nature of public polling;  we get people's gut reaction to broad terms,  not an in-depth analysis.   From what I can tell,  most Americans agree that our health care system needs a lot more work and few of us know how to make that happen.

So here's my suggestion:  If you're trying to think through what needs to happen next year,  check out Politico's recent piece on Obamacare 2.0.  The online magazine asked 15 leaders in the health care scene to describe the next steps.  The authors span the political spectrum.  Some tout the act's successes while others proclaim it a disaster.  But they all talk about follow-up actions,  whether that's creating a single-payer system  (independent Sen.  Bernie Sanders),  rolling out a new system that emphasizes choice and cost control  (GOP Sen. Lamar Alexander) or making adjustments to what's in place.  Reading this piece takes time,  but it's the kind of discussion regular people need to tap into if we want to get beyond sound bites.

Pregnancy prevention: What about vasectomy?

While researching an upcoming story on preventive services,  I came across something perplexing:  Tubal sterilization for women is fully covered by insurance,  per the Affordable Care Act mandate,  while vasectomy for men is not.

The act mandates that specific preventive services be exempt from deductibles and other cost-sharing,  not only for policies bought through the ACA exchange but for employer-provided and other privately purchased health insurance  (grandfathered policies are the exception). The goal is making sure that money doesn't deter anyone from getting care that's likely to head off more serious medical issues and bigger bills.

The medical,  financial and societal benefits of preventing unwanted pregnancies seem clear.  So why not support men who are willing to step up?

Sonfield

"You hear that from everyone who looks at this. It doesn't make sense," says Adam Sonfield of the Guttmacher Institute, which focuses on reproductive issues and pushed for vasectomies to be included.

Early versions of the ACA incorporated preventive standards that were already in place from the U.S. Preventive Services Task Force and the Centers for Disease Control and Prevention. Eventually it grew to include children's services recommended by the American Academy for Pediatrics.

And the Department of Health and Human Services commissioned the Institute of Medicine to create a separate list of covered preventive services for women. That list includes FDA-approved contraceptive devices and sterilization techniques.  But there's no parallel provision for men.

"This position seems particularly short sighted, and insurers should consider covering these services without cost-sharing anyway,"  Sonfield,  a senior public policy associate with Guttmacher,  wrote in 2012.  "Vasectomy is less expensive and less invasive than female sterilization, so it benefits no one to provide economic incentives for couples to choose female sterilization.  Moreover, contraceptive methods used by men and by women offer the same benefits for women’s health,  stemming from the prevention of unplanned pregnancies and the ability to time and space planned ones."

With a growing number of insurance policies requiring consumers to pay bigger sums out of pocket,  the bill for a vasectomy could be significant.  Planned Parenthood lists the cost as $350 to $1,000.  A Southern California public radio station recently did a price check and found fees ranging from $500 to $1,750.

Sonfield said he thought insurance companies would choose to exempt vasectomies from cost-sharing to encourage a cheaper,  safer alternative to tubal sterilization,  but he hasn't seen that happen. Other avenues for change would be for HHS to add vasectomies to the list of covered women's services or for the USPS Task Force to add it to the overall adult list. 

Congressmen want to revive end-of-life support

Thirty-four Democratic members of Congress,  including North Carolina's David Price,  recently wrote to the nation's top Medicare administrator urging her to adopt a plan that would reimburse doctors for time spent counseling patients about end-of-life care.

The letter to Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services, notes that working with a doctor to create an advance directive ensures that the elderly will receive the type of care they want and reduces stress and depression among loved ones.

"We find it troubling that Medicare reimburses almost every medical procedure, yet places no value on the time doctors take to provide thoughtful counsel to prepare patients and families for the delicate,  complex and emotionally demanding decisions surrounding the end of life,"  says the letter,  composed by Rep. Earl Blumenauer of Oregon.

2009 Obamacare protest (Talking Points Memo)

Such reimbursements were part of an early version of the Affordable Care Act,  leading Sarah Palin to launch the stubbornly persistent idea that the president wants to create  "death panels" that would rule on whether the elderly are granted medical care.  I've always found that one of the more baffling twists to Obamacare politics; I don't know anyone who doesn't want some control over their final days.

The reimbursements were cut from the act that won approval,  but Blumenauer,  Price and others keep pushing to revive them.   The  "Personalize Your Care Act"  introduced by Blumenauer to provide Medicare and Medicaid reimbursement for voluntary end-of-life planning got 59 co-sponsors.  Among them are eight Republicans  (none from the Carolinas).  Price,  whose District 4 includes Raleigh, Durham, Chapel Hill and Fayetteville,  is among the sponsors,  as was Congressman Mel Watt of Charlotte,  a Democrat who later resigned to become director of the Federal Housing Finance Agency.  That bill was referred to the Ways and Means Subcommittee on Health,  joining the list of issues Congress hasn't acted on.

Last week's letter didn't include any Republican signers,  and Tavenner's office has not yet responded to a query about whether the letter will prompt any action.

Price

Price said he thinks it's important to keep pushing.

“The American Medical Association, the Institute of Medicine, and a bipartisan group of lawmakers support Medicare coverage of voluntary end-of-life counseling, which is already covered by many private insurers and Medicare Advantage plans," he said Tuesday.  "I strongly agree with Congressman Blumenauer that Medicare should empower seniors to develop and adopt advance directives to protect their dignity in the final stages of life."