At the current time, two of the most controversial issues surrounding Obama health care are the individual insurance mandate and the expansion of Medicaid.  In regards to the individual insurance mandate, the issue revolves around whether Congress went above and beyond its power by requiring that all Americans either purchase health insurance or be subject to penalties.  Obama health care aims to provide over 30 million Americans who did not have coverage with insurance.

The Obama administration argued that Congress could enact the individual mandate under the regulation of interstate commerce in the U.S. Constitution. Currently, the individual insurance mandate is set to take effect in 2014.  Twenty-six of the fifty states in the U.S. are opposed to the individual insurance mandate, arguing the Congress exceeded its power.  Obama health care has been a highly controversial issue ever since the President signed the bill into law on March 23rd of 2010.

Opponents of the mandate state that the provision should be struck down, that it is unconstitutional and that the federal government’s power was drastically expanded.  The National Federation of Independent Business strongly feels that without the individual mandate, regulations and other provisions in Obama health care will not survive, as the individual mandate is at the center or core of the law.

The expansion of Medicaid is another spot of contention in the Supreme Court, as states have challenged the forced expansion of the government supported program that provides health care to Americans who are poor.  These states are arguing that by threatening to withhold billions of dollars in funding, Congress is attempting to force states to cooperate with Medicaid expansion.

Obama health care is likely to be in the headlines for months to come; it will likely be March of 2012 before arguments begin, and a ruling on the issues is not expected until the end of June.

Ironically, the president touted in the beginning that the new health care law would reduce the cost of health care, bending the cost downward.  Recent reports show that Obama health care will do just the opposite in fact, bending the cost upward.  The report, “The Fiscal Consequences of the Affordable Care Act,” Charles Blahouse predicts that over a 10 year period, federal healthcare spending will increase the deficit tremendously.

Other reports claim that Obama health care will affect most individuals very little, because of the fact that approximately half of the residents in the U.S. are covered by Medicaid, Medicare or through employment with local, state and federal government.  As the nation continues to age, it is thought that a large majority of the population will be protected under a plan that is sponsored by the government in coming years.  More people will have coverage through Medicare, as the retirement population continues to grow.  When it comes to discussing the pros and cons of Obama health care, there never seems to be steady ground that everyone can agree on.

In addition, many students who attend college will be covered through universities and other government-sponsored agencies.  It’s easy to understand why the topic of Obama health care has been and still is such a hotly debated topic.

Many individuals and families are covered through their employers; self-employed individuals typically pay for their own coverage.  Under Obama health care, much of this would remain the same, other than those who are self-employed may be open to additional options, particularly if the idea tossed out by Republicans that the self-employed may buy insurance across state lines is approved.

Jeanne Lambrew, White House health adviser, called Blahous’s analysis “new math” and claimed the Blahous’s statements regarding Obama health care costing billions over a 10 year time period fit the old pattern of mis-characterizations about Obama health care.  Lambrew wrote on the White House blog that official estimates demonstrate that the health care law does reduce the deficit.

While it would seem that businesses and corporations would be glad to pay for health care so that their employees are a strong, healthy workforce, it seems that most would be in a position financially that would force them to provide only minimal coverage.

The fight continues on when it comes to Obama health care, depending on the perspective of whoever is talking about it at the time.  Clearly, Blahous believes that the health care plan will drive the nation into extreme debt, while others believe that the cost will actually decrease.  Many people believe that the main change that will be seen through Obama health care is that some who are not purchasing coverage today will be required to do so, or face a penalty.

Opinions continue to clash on the subject of Obama health care, and to that there seems to be no end.  What is your opinion?  Can America afford the health care plan laid out by President Obama?

For many people, the healthcare plan is one that isn’t easy to understand.  Some feel that the ones who will benefit most from Obamacare are those who are now uninsured and earn incomes that are below the poverty line.  For the first time, it is believed that many American families (those between 133% and 400% of the poverty line) will be able to afford health insurance.  Families with incomes of up to 133% of the federal poverty level will receive expanded Medicare coverage.

What a big majority of people do not understand about Obamacare is that subsidies will be unable to make health insurance affordable, which means they will still be forced to buy a policy – or, face a stiff fine of $695 from the IRS.  Small and large business owners that fail to provide insurance for their employees face fines as large as $2,000 for every worker in their employ.

Many people feel that Obamacare has been shoved down their throats, regardless of whether this is what Americans want or not.  There are ramifications of the true meaning of Obamacare that many people are totally unaware of, and facts regarding the “reform” that Democrats do not want people to know about.  Here are a few of those facts:

Obamacare cuts Medicare by $523 billion, and increases insurance premiums by approximately 10% for those who are not insured by their employers.

This healthcare plan will cause 9 million people to lose the insurance they have at the current time; when all is said and done, and the bill fully implemented, 23 million individuals will remain without insurance in the year 2019.

Obama care raises taxes on small businesses by about $569 billion; it also creates a new marriage penalty with investment taxes and new income.

Allows the IRS the power to fine those who do not purchase government-approved insurance, and raises the already out-of-control deficit by $260 billion over the next 10 years when all components of the bill are included.

While it is clear that many people will benefit from health insurance coverage, it is also evident that Obama care will cost big time in other areas.  Many Americans do not like the fact that it seems the freedom to choose or make decisions about health care is being taken right out of their hands, and handled by the federal government.

There are many little “hidden” details regarding Obama care; the funny thing is, while it benefits one person it detracts in another area.  Take for example the change that allows children up to the age of 26 to remain on their parents policy.  What if that child is covered on an employer policy where the parent works, and the employer would rather offer coverage that doesn’t allow what may appear to be lazy children on the policy?  It’s just too bad for the employer.

With Obama Care, what happens if you are a health insurance provider and want to raise premiums to cover cost increases?  It could be that you will be denied by the Secretary of Health and Human Services, if they deem the increase is unreasonable.

It appears that Obama Care has its good points and bad, and only the future can determine if it comes out successful in the end.

There are several provisions that will go into effect shortly after the bill is finalized.

• Prohibition on lifetime limits
• Yet to be determined restrictions  on imposing annual limits on “essential health benefits”
• Rescission restricted to fraud or intentional misrepresentation (effective 6 months after enactment) For us this is a non event since these are the only conditions today that we would rescind coverage for.
• Requires plans to cover preventive health services with no cost sharing (6 months after enactment)
• Extends dependent coverage to 26 (again 6 months after enactment)
• Several new requirements on consumer information plans must provide
• Emergency room coverage can’t impose out of network cost sharing  (6 months after enactment)
• Requires plans to establish an appeals process for coverage or claims disputes (we already have that)
• No pre-ex for children under the age of 19 (6 months after enactment)
• A temporary national high-risk pool will go into effect within 90 days of enactment
• Imposes medical loss ratio requirements on individual and small group plans commencing in 2011 (Definitions and supporting rules will be developed by the HHS Secretary and the NAIC) As a note, currently state insurance departments who  govern rates and rate increases in the individual and small group market require actuarial documentation justifying the rates being charged. The measurement generally focuses on “lifetime loss ratios” meaning the average loss ratio expected over the life of the policy. There has been a considerable amount of discussion between the house and the senate and the NAIC regards this measurement issue. At present this is supposed to be worked out and be finalized by the end of November, 2010.

Most of the other provisions that will affect our business are slated for a 2014 effective date. That’s a long way off. But one thing is for certain, premiums will increase in the individual market. Between the imposition of no medical underwriting/guaranteed issue, a 3 to 1 age band (which incidentally will drive up rates for  25 year olds by 60%, for 30 year olds by 48%, and for 35 year olds by 28% given our current age banded rates), unisex (which again will increase rates for males under age 55 by anywhere from 10% to 20%) females will get a corresponding reduction so it won’t materially impact families, coverage parity for mental nervous ( this could be a huge inflator given guaranteed issue), an ineffective mandate which may depending on the penalties for “late enrollees” allow for people to wait until they come down with a serious medical condition to buy coverage, to name a few drivers of premium increases.

The bill does allow policyholders who have coverage in force prior to 2014 to retain their coverage presumably for as long as they want.

The CCH Tax briefing does a good job of explaining how the premium tax credits for people between 100-400% of federal poverty would work. So the presumption is that  while rates will go up in the  individual market the poor folks get a break. Notice however that there is no adjustment for age. At present the tax credits are only available if coverage is obtained through a state insurance exchange (which coincidentally many states are already fighting)

I also am including a letter from NAHU talking about the role a Certified Health Care Access Advisor should play for exchange customers. Please note that one of my roles at AHIP has been to work with NAHU on developing a certification program for health insurance agents. That work is nearing completion.

While Obama Health Care Reform it is a long way off, I believe the best service an agent can offer their customers is to ensure they have a plan in force before 2014 and advise them it is not in your best interest to wait unless you are likely to be eligible for a huge tax credit,  are old enough that the 3 to 1 age rule won’t have a big impact,  or  are either an older male or a younger female.

I will continue to provide updates as appropriate.

Ben Cutler