Archive for the ‘General Healthcare Debate’ Category

HSA for America Hosts New Webinar on How Health-care Reform Changes Coverage

Friday, July 5th, 2013

HSA for America is hosting a new Health Care Reform webinar on July 9 at 7 pm EST. Long-time health savings account expert Fred Adams will answer live questions about how leading private health insurance companies are conforming existing policies to comply with health-care reform. Free registration is available to the public at


People who purchase their own health insurance face many challenges in 2014. They must have a government approved plan, or pay a tax penalty. Many people will not be able to keep what they have, and will have to convert to a new plan next year. Many people will be facing significant rate increases, and some will qualify for government subsidies to help them pay for coverage.


After a brief overview, callers will be able to talk live with Adams about specific coverage questions. Participants will also receive a complementary bonus report titled “6 Smart Strategies to Keep Your Health Insurance Premiums Low.”


One key strategy involves health savings accounts. With one of these accounts, taxpayers are exempt from the requirement that they spend at least 10 percent of annual income on medical costs in order to claim a tax deduction. Many expenses that are not covered by insurance, from dental care to the cost of “alternative medicine,” can be used to reduce taxable income.


People may also claim a deduction for health savings account deposits not needed for health care expenses. Those funds can double as a retirement account because they earn untaxed interest or dividends like traditional retirement accounts.


This year, individuals under age 55 may shelter $3,250 from taxes, and families may shelter $6,450. Those who are at least 55, may shelter an extra $1,000.


Webinar participants must register to reserve their space, and may join the webinar online or via telephone. HSA for America receives regular updates from the leading health insurance companies regarding changes to existing coverage and what new options will provide. The webinar is a chance to clarify what’s happening to health insurance next year and what types of coverage will be available in October.


About HSA for America:


As the nation’s leading independent HSA expert, HSA for America has earned a reputation for providing superior educational resources for individuals, families and small businesses. With its comprehensive website, the public can evaluate health insurance plans that allow them to establish an HSA.


People may access HSA for America’s instant quote engine and online applications at or request individualized assistance. Confidential consultations regarding HSA plans and Health Reimbursement Arrangements may be arranged by calling 1-866-749-2039 from 9 AM through 11 PM Eastern.


Guidelines for selecting an HSA administrator based on fees and investment options are also available at


Why 2014 Rates Are Not Really “Lower Than Expected”

Thursday, May 30th, 2013

You may have seen the headlines, such as this one from the Washington Post:


“California’s likely health insurance rates under new law are lower than expected”


California announced to great fanfare that insurance premiums in 2014 would range from 2% higher to 29% lower than in 2013.


This was greeted with surprise by many of the economists that were predicting higher rates in 2014. I was pretty skeptical myself. And of course, many of the supporters of the healthcare reform law were crowing.


And as it turns out, it was a fraud.


What the state actually did was compare 2013 small group rates, to 2014 individual rates. Group rates are always much higher than individual rates. An analysis by Lanhee Chen published in, showing that the actual rate increase a 25-year-old male might expect for comparable coverage is 38 to 53 percent.


The other under-reported news out of California is that several prominent health insurers have decided not to participate in California’s market. These include the nation’s largest health insurance company, UnitedHealth, along with Aetna and Cigna. Generally speaking, less competition will lead to higher premiums.


There is about to be a massive public relations campaign, where certain government officials and their advertising agencies will spend our tax dollars to convince everyone what a good deal they are getting – and reminding them the punishment they will face if they refuse to participate.


The fact that the state of California would have the audacity to put out this kind of fake comparison – simply in order to make things look better than they really are – hints at the kind of spin and distortion that is likely to be coming our way very shortly.

Obama’s Plan to Restrict the Size of Your HSA

Monday, April 29th, 2013

budget cutsIn President Obama’s recent budget proposal, he proposed capping tax-favored retirement accounts at $3 million.  No contributions would be allowed if the account value is over this amount.  This wording is from page 18:


Prohibit Individuals from Accumulating Over $3 Million in Tax-Preferred Retirement Accounts. Individual Retirement Accounts and other tax-preferred savings vehicles are intended to help middle class families save for retirement. But under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving. The Budget would limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013. This proposal would raise $9 billion over 10 years.”


This prohibition would apparently apply to all of your tax-favored accounts, including IRAs, Roth IRAs, 401ks, pension plans, and HSAs.


What is “Reasonable”


In this proposal, President Obama wants to restrict you to what he considers to be a reasonable retirement funding of $205,000 per year (much less than that which he will retire on). One can easily argue that the $205,000 limit is not at all a reasonable limit. It is estimated that the average couple will need $270,000 just to cover medical expenses during retirement.  But many couples, particularly those with chronic conditions needing long-term care, are way above average.  For instance, nursing home care can easily cost $150,000 a year or more.


And inflation can quickly wipe out the value of a $205,000 annuity. If you are fortunate to live another 30 or 40 years in retirement, that $205,000 may eventually be worth just $50,000 a year in today’s dollars.


Unforeseen circumstances such as the need to support a family member, or sustain business losses, or expenses involving any number of potential disasters, may further one’s need for money.


As technology progresses, tomorrow’s seniors will face a multitude of expensive life-extending and life improving options.  But I wouldn’t count on the government paying for it all. In fact, their response to the problem will be to ration what is covered.  Consider that your 95 year-old body might be needing some serious medical attention that you’ll need to pay for out-of-pocket, and there goes the rest of your bingo spending money.


But really, trying to figure out how much is “reasonable” is not the question to ask. The government should not even be deciding what is a reasonable amount of retirement savings, and then trying to put a cap on it. It is your life, and only you have the right to determine, for yourself, what is a “reasonable” amount for you to be spending each year.


The Wrong Incentives


Social Security is basically structured as an unstable Ponzi scheme.  According to Congressional Budget Office calculations, the fund will run out of money by 2031, just 18 years from now.  And the 2012 Medicare Trustees Report projects Medicare running out of money in just 10 years. So now, more than ever, it is important to encourage people to save for their own future, rather depending on government to provide for them.


The answer is not to punish the savers and inhibit how people can prepare for their retirement.  Instead, legislation should encourage savings, and offer even more tax incentives to help people put away money for future years.  For instance, HSA contribution limits should be substantially raised, and should be made available to all.


A nation of savers and investors, with money in their IRAs, 401ks, and HSAs, is a strong nation. Our future lies not in increasing dependency on government to provide for our retirement and our medical care. Instead, let’s do everything we can to encourage everyone to save for future medical and retirement expenses in these tax-favored accounts.  We’ll all be better for it.

Recent News About Obamacare – Here’s What You May Have Missed

Wednesday, April 10th, 2013

obamacareEveryone has an angle or bias.  Here is mine: I want to take this complicated topic of healthcare reform, and distill it down so you can understand to what it means to you.  I’m finding that much of the information I’ve been sharing has come as a surprise to many of my readers, and I think I now know why-


The major media is not covering the story.  Here’s some of what you may have missed.


Major Tax Repealed


33 Senate Democrats joined 45 Republicans in voting to repeal a 2.3 percent sales tax on medical equipment.  This law would not only have been damaging to medical equipment makers, but it would have raised medical costs for us all.  According to the Media Research Center, ABC, CBS, and NBC all chose not to cover this


Sebelius Admits that Premiums May Rise


Secretary of Health and Human Services admitted that many people will be paying higher premiums on the new healthcare plans that begin in 2014.  This is the first time that an administration official has admitted that premiums will go up, not down, on at least some policyholders.  This was also not covered by any of the big 3 networks.


Society of Actuaries Release Study Predicting 32 Percent Rate Increase


This study estimates rates will rise as high as 80 percent on some policyholders (young males, likely).   This membership and educational organization of nearly 17,000 actuaries was formed in 1889, and regularly releases research analyzing public policy issues.  Once again, there was no mention of this study by the 3 major networks.


Group Health Insurance Exchanges Being Delayed Until 2015


In a move that may portend what is going to happen in the individual market, the administration announced that this system of exchanges will not be ready in time to implement for 2014.   They are still planning on moving forward with individual exchanges, though.


At a recent conference we were at, Henry Chao, heading up the technological implementation of the individual exchanges, expressed great doubt that they would be ready.  “Let’s just make sure it’s not a third-world experience”, he said.


All of this is bad news for the healthcare reform law.  But I have a feeling we’re in for a much more dramatic – and visible – mess, as we get closer to 2014.

Group Plans Will Offer HSAs With Higher Deductibles

Friday, April 5th, 2013

good news!The Affordable Care Act (ACA) states that health insurance deductibles will be lowered to $2,000 per person, or $4,000 per family, in group plans. But a deductible that low would change the structure of an HSA plan you already have, making it less favorable as an investment tool and a security against health emergencies.


Employers Will Run from ACA Regulations


Actually, employers are likely to switch to HSA-qualified plans with even higher deductibles… That’s because there’s a loophole in the law.


The fact is the ACA cannot lower the deductible on Health Savings Accounts that far and still allow a plan to meet other conditions of the law. It’s true that the law states in one area that a group plan should have a maximum deductible of only $2,000 for an individual. But the law also says the following in another section:


“Section 1302(c)(2)(C) of the Affordable Care Act directs that the limit on deductibles described in section 1302(c)(2)(A) for a health plan offered in the small group market be applied so as to not affect the actuarial value of any health plan…we propose that a plan may exceed the annual deductible limit if it cannot reasonably reach a given level of coverage (metal tier) without doing so.” (The emphasis is mine.)


In other words, the law waffles, stating that the deductible can be raised above $2,000 if the actuarial value of the plan won’t meet the minimums for a bronze plan, for example.


The Simple Meaning of “Actuarial Value”


You’re going to hear the term “actuarial value” more in the news in coming months, so here’s what it really means. It means that the government figures the amount of money that a typical policyholder will receive in medical services in an average year—that’s the actuarial amount.


Then, the metal tiers in the ACA pay different percentages toward meeting that value; for example, the bronze tier pays for 60 percent  of the actuarial value—60 percent of the yearly amount that the average policyholder spends. And the policyholder pays the other 40 percent.


Good News for HSA Policyholders


But the math simply doesn’t work to create the actuarial value if the deductible is set at the low $2,000 level on an individual bronze plan. So people will be allowed to purchase a policy with a higher deductible, such as an HSA plan.


This is good news, because HSA plans typically cost at least 30 percent less in premiums than traditional copay plans. And having been in the HSA business since they first became available in 2004, we know that people with Health Savings Accounts spend their money carefully, because it is their own money.  With an HSA you also have a tax-advantaged savings account to pay for services when you need them most—and to grow into an additional retirement account if you stay healthy.


What’s interesting to me is that our high-deductible HSA plans will meet the guidelines of the ACA better than the typical plans that the law proposes. The wisdom of saving money for yourself and building it tax-free is clearer and clearer, and real reform is still possible if more people do this.

A Lot of Talk About Rate Increases

Monday, April 1st, 2013

rate increasesI’ve been talking for a long time about how rates are going to be going up as the “Affordable” Care Act gets further implemented. And gradually, the truth is coming into clearer focus for more and more people.


Last week the Society of Actuaries released a study that predicts a 32% increase in claims cost under the new healthcare reform law. They believe that the large number of sicker people entering the market will drive this increase in claims.


Unfortunately for everyone in the individual market, this is going to further drive up premiums. To the shock of many, Kathleen Sebelius actually admitted the same. She told reporters “there may be a higher cost associated with getting into that market”.


She also noted that people will receive government subsidies to help pay for their health insurance: “But we feel pretty strongly that with subsidies available to a lot of that population that they are really going to see much better benefit for the money that they’re spending.”


She didn’t seem to even consider the millions of hard-working middle-class citizens who are buying their own health insurance, without having someone else pay for it. These are of course the same citizens who are paying the taxes that fund these subsidies.


And lastly, she admitted that young people will pay even higher premiums in order to subsidize older policyholders; and that men would pay more in order to subsidize women’s premiums.


The big question related to this issue, is whether the young, the males, the healthy – are going to be willing and able to pay these higher premiums. Those who don’t will have to pay a tax-fine in 2014 ($95, or 1% of income).


If large numbers opt out, those still in are paying even more.


The administration is hoping that competition among insurance companies will bring down premiums. But all signs are that competition will actually decrease, as it becomes more difficult for smaller insurance companies to manage the more highly regulated business climate.


The very best option at this point remains going with a high deductible HSA plan, fully funding it, and paying for it (if you qualify) through your Health Reimbursement Arrangement. If you currently have a grandfathered plan, consider keeping it.

Obamacare Will Swamp the IRS

Saturday, March 30th, 2013

Many people have heard there will be 20 new taxes under Obamacare. But the actual amount of new taxes and regulations is 47.


These include penalties on employers who don’t offer the right coverage to their employees, higher income taxes for certain employees, and the elimination of certain tax deductions people use. But of course there are many more we don’t have space for here.


The Real Problem with 47 New Taxes and Regulations


The IRS won’t be able to keep up with all the new audits that will be required on these new taxes and regulations, according to the Treasury Inspector General for Tax Administration, J. Russell George.


Mr. George testified to the House Appropriations Committee on March 5, 2013, stating, “It is unprecedented in recent history, the amount of responsibility the IRS is being given in an area that most people don’t think of as an IRS function.”


He explained that U.S. citizens will practically overrun walk-in and call-in tax centers with questions about new tax penalties and credits. “This is going to lead to problems, sir,” he stated.


Mr. George continued, “They have to determine what enforcement mechanisms they’ll employ…how they go about determining who to audit and who not to.”


In other words, this large increase in their workload will lower the IRS’s ability to pursue tax fraud. They’ll have to calculate the costs and benefits of auditing various people and simply make a choice, allowing some to go free and some to be prosecuted. So some fraudsters will go free because the IRS doesn’t have enough time.


The Truth of the Testimony–and Why it Matters


Mr. George intimately understands the IRS’s workload, because he oversees 800 agents who provide independent oversight of the IRS.


It’s not easy to investigate about 100,000 IRS employees. Among other duties, his people investigate IRS employees who ask for bribes or who misuse citizens’ private information. Also, Mr. George reports directly to Congress, to our lawmakers, who depend on him to understand the state of affairs at the IRS.


If Mr. George believes that these new taxes are too much for the IRS to handle, that raises an important question: how can Obamacare work if the IRS can’t even keep track of collecting taxes to fund it?


Preparing for the Future


I’ll be paying close attention to how this plays out. And, while the government determines how to solve their problems, I am holding on to my grandfathered HSA plan for as long as possible, legally saving money and watching it grow tax-free for medical emergencies and for retirement.

How Rates On Young People Will Be Affected By Obamacare

Friday, March 8th, 2013

The official name of the health care reform legislation that President Obama signed into law in 2010 is the Patient Protection and Affordable Care Act.  This has led many to believe that health insurance premiums will go down.  Unfortunately this is not the case, particularly for younger policyholders.


This is going to be a surprise for many people.  In 2009, supporters of the proposed law were bringing out economists that were actually claiming that the law would cause health insurance costs to go down.  President Obama was claiming that the law would “bring down premiums by $2,500 for the typical family”.


Young Must Subsidize the Old


Most experts are now expecting premiums to increase 30 – 50 percent, on average.   But for the younger policyholders (who are more likely to be healthy and less likely to need their coverage), premiums will be going up a lot more.


This is because the law states that an insurance company can charge an older policyholder no more than three times what they charge a younger policyholder.  Since the typical 64-year old has way more than three times as much health care spending than the typical 18 -ear old, it is the 18-year old is going to be the one paying for it.


Some early projections are showing that starting in 2014, a new plan may cost as much as 300% what it does now, for a young male in his mid-twenties.  The big questions is – will young people be willing to pay this much?


Potential Death Spiral


When the government manipulates pricing so that something costs more or less than it is really worth, there are always unseen consequences.  One possibility is that young people will choose to go without coverage.  In 2014, they will only face a $95 penalty for not having coverage, so this may be an option that many take.


If that happens, then premiums will have to go up more on everyone else, since we don’t have the young healthy policyholders to foot the bill.  If that were to happen, the entire system could collapse.


Congressmen Jim Matheson (D-UT) and Phil Gingrey (R-GA) have introduced H.R.455, which would change the age rating band from 3:1 to 5:1, or allow states to determine their own age band.  (In reality, there should be no age band, and young people should not have to subsidize older policyholders).


What Should You Do


You will not be required to purchase a new plan until the anniversary date in 2014 of your existing plan.  So you may want to hold on to your current plan, or get a new plan prior to the beginning of the year.


If you have coverage that initially went into force prior to March 23, 2010, it is considered to be a “grandfathered” plan, and you will not be required to purchase a new plan.


If you do have to get a new plan, and are under age 30, you can choose a catastrophic plan that will cost less (we don’t know how much less, yet).


Finally, if you currently have coverage with us we will be providing you details about your options as that information becomes available.

Health Care Reform and Smokers Insurance Rates

Tuesday, March 5th, 2013

smoking cessationOne of the promises of the health care reform laws that take effect starting in 2014 is that people can no longer be declined or charged more because of pre-existing health conditions.  Even if you are morbidly obese, have diabetes, or are an alcoholic – you cannot be denied or charged more.  The one group that can be charged a premium though, is smokers.


The law allows health insurers to charge smokers up to 50 percent more for their health insurance.   This is on top of rate increases that are already expected to exceed 30 to 50 percent or more.


People who are covered under group plans can avoid the penalty by joining a smoking cessation program.  But once again purchasers of individual health insurance are discriminated against in this area, and do not have this option.


Tax Credits and the Smoking Penalty


Tax credits will be available to help people that are making less than 400 percent of the federal poverty guidelines pay for their health insurance.  But these tax credits can not be used to pay the smokers penalty.


It is expected that older smokers will be charged the highest smoking penalty.  Because premiums will be going up substantially due to the mandates of the health care reform law, this could mean a smoking penalty of $5000 a year or more.  Many smokers will probably find health insurance completely unaffordable starting in 2014.


Use Your HSA to Pay for Smoking Cessation Classes


Of course, quitting smoking is a great idea. If you have a Health Savings Account, you can withdraw money from that account tax-free to pay for smoking cessation counseling or classes.  However, you cannot use the money to pay for over-the-counter medications like nicotine gum, without a prescription from your doctor.

Higher Deductible HSA Plans Will Be Available

Monday, March 4th, 2013

availableThere has been concern and confusion over whether HSA plans will still be available in 2014, and at what deductible level.


The answer is Yes, HSA plans will remain available.  Deductibles on individual plans should be similar to what they are now, though in some states maximum deductibles may be as low as $4500 or so for an individual (compared to $6250 now).


Deductibles on Group Plans


For group plans, the legislation sets the maximum deductibles at $2000 for individuals, and $4000 for families.  For this reason alone, many small groups may instead let their employees get coverage in the individual market.


However, this is in conflict with another part of the law, which states that people can choose a Bronze, Silver, Gold, or Platinum plan.  The bronze plans have a 60 percent actuarial value, meaning they will pay 60 percent of a typical policyholders medical bills during an average year.  This actuarial value cannot be reached with a deductible as low as $2000.


On page 70,671 of the law (yikes!), there is a regulation that allows deductibles to go higher:


“(3) A health plan’s annual deductible may exceed the annual deductible limit if that plan may not reasonably reach the actuarial value of a given level of coverage as defined in § 156.140 of this subpart without exceeding the annual deductible limit.”


So this is good news for all – high deductible HSA plans look like they’re here to stay.

Why You Will See Fewer Doctor Choices Under Obamacare

Sunday, February 17th, 2013

health insuranceAs I’ve discussed before, the Affordable Care Act is going to (perhaps ironically) cause health insurance to become less affordable for most people.  One way insurance companies may try to counteract these rising costs is by narrowing the number of available doctors and hospitals that policyholders can use.


Return of the HMO


In the 1980s, Health Maintenance Organizations, or HMOs, were promoted as a way to keep rising health costs under control.  The way they attempted to do this was to require policyholders to go to a primary care physician first, before they could see any specialist.  Only when the primary care physician approved a visit to a specific specialist, would the care be covered under the policy.


The primary way the HMO tried to reduce expenses was by limiting coverage, and allowing policyholders to only see a small set of physicians that had contracted with the HMO.  As you can imagine, most of these plans became highly unpopular as people had to jump through hoops to get their health care.


With the full implementation of the health care reform law in 2014, these narrow networks are coming back.


Why Networks Will Be Smaller


Starting in 2014, everyone who does not have a grandfathered health insurance plan that went into effect before Obama signed the act into law March 2010 will have to switch to a new government-approved plan.  And, it looks like most of the PPO networks will be much smaller than those currently available to most policyholders.


As you can imagine, the reason smaller networks save insurance companies money is because the companies contract with the least expensive providers.  So, as a policyholder, if you have a major or complicated health situation, you may end up not being able to see the physicians that may offer you the best chance of a successful outcome.


Another reason carriers will be offering less attractive networks is because they will want to discourage the most unhealthy applicants for applying for coverage.  Starting in 2014, anyone can purchase health insurance, regardless of pre-existing conditions.  An insurance company trying to avoid business is one of the perverse consequences of this misguided law.


What This Means to You

If you are one of the millions of people that will be forced to choose a new plan in 2014, in addition to your new premium, you should make sure your physician is in the network, and then look at the size of the network itself.  The plans with the most narrow networks are likely to be least expensive, but balance the money saved against the increased risk you’ll face in a smaller network.


The reason I carry health insurance is to protect against the major unexpected health situations that can wipe out my savings.  I’m not too worried about paying for checkups.  If something major does happen, I want to be able to go to the best doctors out there.


This may not be possible even in the best networks, which is why I’m happy to have a sizable savings built up in my Health Savings Account.   But, I’m still going to be looking very closely at any changes in the PPO network I have access to as I move into 2014.


For all clients of HSA for America, we’ll be sharing detailed information about network availability as that information becomes available.

Why Are Rate Increases Happening Now?

Wednesday, February 13th, 2013

health care dollarsThe past few years, we have seen low price increases on medical care, with costs growing less than 4 percent a year over the past three years.   Though various political groups may want to take credit, the main reason that medical inflation has slowed is the sluggish economy.  People are getting laid off, cutting costs, and putting off medical care.  As demand drops, so do prices.


So… why are health insurance rates increasing?


Health insurance rates have been increasing substantially, all across the country.  Ten- to 20-percent rate increases are not uncommon right now.  Some people are attributing this to “greedy” insurance companies, but the situation is actually not so murky.


As families look for ways to cut their costs in a slowing economy, one item that may end up on the chopping block is health insurance.  People who are in good health and not using their coverage much may decide to take a chance, but people with chronic health conditions are more likely to keep their coverage.


As healthy people drop their coverage and unhealthy people retain insurance, the average health of the pool (all those covered) goes down, and the people still insured use more services.  Thus, the rates increase.


What This Has to Do with The Potential Collapse of Obamacare


The next implementation of the Affordable Care Act in January of 2014 will eliminate most underwriting by insurance companies.  Anyone will be able to sign up for a plan, regardless of pre-existing conditions.  An increase in unhealthy people in the insured pool will put further upward pressure on premiums.


In an effort to counter this math, Obamacare is requiring all healthy people to purchase coverage.  It is also requiring the youngest (and generally healthiest) applicants to pay higher premiums in order to subsidize the premiums of older policyholders.  I will not be surprised to see premiums double or even triple for young men.


This system may work out (well, except for the young healthy people facing the biggest rate increases) – but only if everyone plays the game.  If enough people drop out and decide not to carry coverage, then rates further increase for everyone else.


If that happens, then look out.  We could have a big mess on our hands.

What Does the Healthcare Reform Ruling Mean to You?

Thursday, June 28th, 2012


The healthcare reform law known as Obamacare, though extremely unpopular, has been ruled constitutional by the Supreme Court.  Unfortunately, this is going to mean higher costs and less choice for most people, but I want to help you make the most of it.


There are several actions you can take now to save money on healthcare.  And, you could be missing out on a huge one if you got an insurance plan before September 23, 2010.  You know the surest way to save on healthcare is to prevent the chronic diseases that are devastatingly expensive to treat.  Health plans now cover preventive care with no out-of-pocket costs, but you need a new plan to reap the benefits.  And, even high-deductible plans that keep premiums low will do that for you.  Run an instant quote to compare rates on different kinds of health plans and you’ll see that the least expensive options pay for a wealth of preventive healthcare immediately, before you meet the plan’s deductible.


If you have a plan older than that, you may want to keep it.  Chances are the premiums are higher than what you could get if you signed up for a new plan today, but rate increases are likely to be smaller because those plans are “grandfathered”, and do not have to comply with many of the new rules that are driving costs up.


If you’ve had trouble getting insurance companies to accept your application because you have some health issues, that’s going to change.  Did you know that children under the age of 19 can no longer be denied coverage regardless of their health problems?  In 2014, adults will also be guaranteed coverage.  You can already keep your children covered on your policy until they are 26, and you have other guarantees, too.


And, the limits on the amount of coverage you may receive during your lifetime are gone.  Even annual limits are restricted now and will be banned in 2014.


There is even hope that we may be through with the double-digit rate hikes of recent years. Healthcare reform has already spent $750 million to prevent cancer, heart disease, obesity, stroke and the use of tobacco.   It spent nearly $1 billion to help small businesses develop new cancer therapies and cures, and it created a non-profit Patient-centered Outcomes Research Institute to compare the effectiveness of treatments.  It also started the National Prevention, Health Promotion and Public Health Council to develop a national strategy to prevent disease.  From 2010 to 2014, it appropriated $5 billion to improve the supply of primary care providers and support prevention and public health programs.  As disease rates fall and claims cost less, we could see “supply and demand” principles at work.  If demand decreases and the supply of doctors remains unchanged, healthcare really might become more affordable.


We continue to believe that greater price transparency and consumer involvement is really what is needed to drive down the cost of health care, and we will continue to push for this type of reform.  But with more value in health insurance, and the individual mandate to get it, I’ve got some ideas to help you find the right plan.  We’ll send you a free copy of The Complete Consumer’s Guide to HSAs when you request it at  You’ll also want to catch our live HSA teleseminar because you can call in to ask questions.  Register for free at  And, you’re welcome to set up a free personal consultation for professional help to compare your coverage options at


How Obamacare Prevents Job Growth

Friday, June 1st, 2012


The jobs report that came out today showed that only 69,000 new jobs were created in May.  (Of those, 5 were created by HSA for America.)  But more importantly, this was a dismal gain in overall employment, resulting in a rise in the official unemployment rate to 8.2 percent.  One of the underlying reasons for high unemployment is the economic burden caused by the health care reform law known as Obamacare.



Under this law there is a $2000 tax per worker for employers with over 50 employees, who do not provide approved health insurance coverage starting in 2014.  They get an exemption on the tax for the first 30 workers, but not on the next 20.  So a company with 49 employees that is considering hiring one more full time worker, could face a $40,000 tax for doing so.  There is no penalty for not providing coverage to part-time workers.


If the employer does offer insurance, but the premiums exceed 9.5 percent of the employees income, the employer faces a penalty of $3000 per worker who gets coverage through the exchange.  That’s a $3000 government incentive not to hire that worker.


Of course, employers who do provide insurance coverage are also facing rising costs.  Obamacare mandated many coverage benefits that have increased costs, and will further increase costs starting in 2014.  Already in effect are mandatory preventive benefits, mandatory maternity coverage, price controls which raise costs on younger people, and more.  Changes that take effect in 2014 will further increase costs, leaving employers facing higher expenses for every person they employ.


Many larger companies have calculated the costs of complying with Obamacare, and the results are staggering.  John Deere and Caterpillar, two Illinois-based heavy equipment manufacturers, have each stated that that complying with the law will cost these companies over $100 million each.


Businesses hire employees when they expect the income generated by that employee to exceed the cost of hiring the worker.  When the cost of hiring goes up, the number of hires goes down.


Free Markets and Healthcare Costs

Tuesday, April 17th, 2012


There is confusion among many who believe that more government involvement in healthcare will lower costs.  Even when they purport to believe in a free-market economy, they claim that somehow healthcare is “different”.


It is different than… computers, automobiles, televisions, and so many other consumer goods that have dramatically dropped in price and improved in quality over the past several years.  But why is that?


Simple – government involvement and interference in the market.  As government involvement has grown, costs have risen.



Here’s a simple, obvious example.  Prescription drugs, which are highly regulated, compared to over-the-counter drugs where a much freer market with much less government involvement exists.


The average cost to get a prescription drug approved by the FDA: $403 million (in 2002).  The average length of time for drug approval: 8.5 years.  Not exactly an enticing business arena for most entrepreneurs.

Bronze Plans are not “catastrophic” plans

Wednesday, April 11th, 2012


An AP article out today tries to claim that the Supreme Court may have a misunderstanding about the healthcare law.  “During the recent oral arguments, some of the justices and the lawyers appearing before them seemed to be under the impression that the law does not allow most consumers to buy low-cost, stripped down insurance to satisfy its controversial coverage requirement.  In fact, the law provides for a cheaper ‘bronze’ plan….”


It is always interesting reading information when you know the writer doesn’t have a clue.  The bronze plans that will be available are not low-cost stripped down plans.  In fact, as many as half of our clients will be forced to upgrade to a richer, much more expensive plan when they are forced to purchase coverage that meats the government’s requirements for bronze designation.


This is particularly the case in the individual market.  When people are choosing their own plan, and paying with their own money, they often do choose a truly catastrophic plan.  $10,000 deductibles are not at all uncommon when people choose individual coverage, because they do want a low-cost plan.  Those plans, however, will be illegal if ObamaCare is ruled constitutional.


Bronze plans are rich plans, particularly for those of us who pay the premiums out of our own pockets.  As Michael Carvin, attorney for the National federation of Independent Business, said, “It’s not remotely catastrophic”.

Yes, it will cost more, and No, it won’t lower your premiums

Tuesday, April 10th, 2012


Recently the Congressional Budget Office announced that ObamaCare would cost $1.76 trillion through 2022, roughly twice the original CBO projection of $938 billion when Congress passed the bill.  This may be a surprise to some, I suppose.  But take a quick look at our history, and you’ll see that this is nothing new.  When Medicare was passed in 1965, it was predicted to cost $12 billion by 1990.  In fact, costs were almost 10 times higher.


I was at a dinner the other night where someone expressed surprise when I told her health insurance rates were going to go up a lot in 2014, assuming the law is deemed constitutional and all goes forward.  “I thought this was supposed to lower everyone’s costs”, she said.  “Really?”, I thought to myself.


Despite the marketing hype behind it, ObamaCare was never about making health care or health insurance more affordable.  There is nothing in the legislation that does anything to lower real costs.  Health insurance rates for individuals will be going up 30 – 50% on average in 2014, and over 100% in many cases.


Politicians who don’t understand economics think that, given enough power, they can control costs.  Richard Nixon tried this in 1971, putting wage and price freezes in place until 1974, thinking he could thus control inflation.  By the time this nonsense ended, the U.S. inflation rate had reached double digits.  It didn’t work.


It never does.


ObamaCare is, and was always about, giving government control over the health care system.  This control dramatically increases the power of the politicians, the regulators, and the lobbyists working in the system.  And in the case of health care, we’re talking about one sixth of the economy.

What’s Next

Friday, March 30th, 2012


Today the supreme court justices all got together, sat around a table, and told each whether they think PPACA is constitutional.


They’ll then write opinions, vote again, and publish their decision in June.  Three possible scenarios:

  1. The law is declared constitutional, and implementation proceeds as planned.  Open enrollment begins Octobober 1, 2013, and by January 1 2014 you are required by federal law to have purchased a qualifying plan.  You may qualify for a subsidy based on your income.
  2. The mandate is declared unconstitutional, but the rest of the law stands.  Starting in 2014, no one will be required to purchase health insurance, but carriers will be required to accept anyone who applies.
  3. The entire law is thrown out.  There will be no federal requirement to purchase health insurance, nor will there be a federal requirement for insurance companies to cover anyone regardless of pre-existing conditions.  Regulation of health insurance continues at the state level.  The states may implement exchanges or other rules, as currently happens.

No one knows at this point how this will turn out, other than perhaps the justices themselves (do they tell their spouses at the dinner table how everyone voted?)  But for the hell of it, I will give you my guess.


My prediction is that the mandate will be declared unconstitutional.  It is clearly a stretch to think that the Constitution’s commerce clause, which gives congress the right to regulate interstate commerce, thus gives them the right to require someone to purchase…anything.


We’ll see if I’m right in about 3 months.

Yeah, it really is going to cost more money than they told us

Thursday, May 20th, 2010


I doubt if too many people in the know are surprised that the CBO has released a report showing that the new health reform law, the Patient Protection and Affordable Care Act, is going to cost at least $115 billion more over the next 10 years than they estimated before it was passed. So the total estimated cost is now well over $1 trillion, and I have no doubt that we’ll see real costs far exceed that.


In order to come up with numbers below $1 trillion when trying to pass the original bill, lawmakers also included a provision that would reduce payments who treat Medicare patients by 21 percent. Well, surprise surprise, there is now a bill being taken up in the House, the American Works, State and Business Relief Act of 2010, H.R. 4213, which would delay this payment reduction. Expect this payment reduction to be delayed, eventually, forever. (more…)

When the gov’t runs out of money, make sure you have a funded HSA

Wednesday, November 11th, 2009


When Medicare was first enacted in 1965, men had an average life expectancy of almost 70 years. So the average guy received Medicare benefits for 5 years.


Now the average male lives to be about 75, and the average guy receives benefits for twice as long.


In January of last year, the first babyboomers started retiring. This massive wave of retirees will start receiving Medicare benefits, and be spending so much that Medicare trustees predict funds will run out in 2019. (more…)