In recent months, the Department of Health and Human Services has introduced many health reform rules and regulations. Every time that happens, the media picks it up, all kinds of articles are written in The Wall Street Journal, The New York Times, and network television news shows talk about it. All the analysts start talking about the pros and cons and what that means for companies and people.
The problem with this is that a writer often saw the rulebook and wrote an article about it. Then other writers use part of that first article and start rewriting parts to fit the article. By the time the information is widely distributed, the actual regulations and rules will be twisted and distorted, and what is actually shown in the media may not accurately represent the reality of what the regulations say.
There are a lot of misconceptions about what’s going on in ObamaCare, and one of the things I’ve noticed in conversations with clients is that there are a number of underlying myths that people understand about the Affordable Care Act. it is. TRUE. But despite everything they heard in the media, people believe that these myths are actually true.
Today I will talk about three myths that I hear most often. Not everyone believes these myths, but they do very well and others don’t know what to believe, so now we have to dispel these myths.
The first is that the reform of the medical system will only affect the uninsured. Second, Medicare benefits and the Medicare program are not affected by health care reforms. And the last one is that the reform of the medical system will reduce medical expenses.
Health care reform only affects the uninsured
Let’s look at the first myth about health care reform that only affects the uninsured. In a lot of the conversations I have with clients, there are various expressions that they use: “I already have coverage, so ObamaCare won’t affect me” or “I’ll just keep my health insurance plan protected” and the last one, and in this one I can give them some leeway, because part of what they say is true, it’s “I have group health insurance, so I won’t be affected by health reform.”
Well, the reality is that health care reform is actually going to affect everyone. Starting in 2014, we’re going to have a whole new set of health plans, and those plans are very rich in benefits with lots of extra features that existing plans don’t offer today. So these new plans are going to have a higher cost.
Effect of health care reform on people with health insurance
People who currently have health insurance are going to transition to these new plans sometime in 2014. So policyholders will be directly affected by this because the health plans they have today will go away and be assigned to a new ObamaCare plan in 2014.
Effect of health care reform on the uninsured
The uninsured have an additional problem in that if they don’t get health insurance in 2014, they face a mandatory penalty. Some of the healthy uninsured will look at that penalty and say, “Well, the penalty is 1% of my adjusted gross income; I make $50,000, so I’ll pay a $500 or $1,000 penalty for health insurance. In that case, I’ll just throw the penalty”. But either way, they will be directly affected by health care reform. Through the mandate it affects both the insured and the uninsured.
Effect of health care reform on people with protected health plans
People with grandfathered health insurance plans will not be directly affected by health care reform. But because of the life cycle of their protected health plan, it will make those plans more expensive as they find that there are plans available now that they can easily transfer to that have a richer set of benefits that would be more beneficial for any illness. chronicle. health problems they may have.
For people who stay in those protected plans, the pool of subscribers in the plan will start to shrink, and as that happens, the cost of those protected health insurance plans will rise even faster than it is now. Therefore, ObamaCare will also affect people in protected health plans.
Effect of health care reform on people with group health insurance
The latter, the small group market, will be the most noticeably affected by the reform of the health system. While the health reform regulations predominantly affect large and midsize businesses, and businesses with 50 or more employees, smaller businesses will also be affected, even if they are exempt from ObamaCare.
What many surveys and polls are starting to show is that some of the companies that have 10 or fewer employees will seriously consider dropping health insurance coverage altogether and no longer having it as a company expense. Instead, they will have their employees obtain health insurance through health insurance exchanges.
In fact, some of the insurers now say that they anticipate that up to 50% of small groups with 10 or fewer employees will drop their health insurance plan sometime between 2014 and 2016. That will have a very big effect on all the people who they have group health insurance, especially if they are in one of those small businesses that drop health insurance coverage.
It’s not just the uninsured who will be affected by health care reform, everyone will be affected.
Health care reform won’t affect Medicare
The next myth was that health care reform would not affect Medicare. This one is kind of funny because from the beginning, the most notable cuts were specifically targeted at the Medicare program. When you look at Medicare’s portion of the federal total, you can see that in 1970, Medicare represented 4% of the US federal budget, and by 2011, it had grown to 16% of the federal budget.
Looking back over the last 10 years, from 2002 to 2012, Medicare is the fastest-growing part of the federal government’s major entitlement programs, growing nearly 70% over that time period.
Because of how big Medicare is and how fast it is growing, it is one of the key programs that ObamaCare
Medicare Advantage cuts and the effects
Of that $716 billion cuts, the Medicare Advantage program is being cut the most and will see the most impact. What that’s going to do is increase the premiums people pay for their Medicare Advantage plans and reduce the benefits of those plans.
Rising Medicare Advantage Costs
Right now, many people choose Medicare Advantage plans because they have zero premium. When they’re given a choice of Medicare plans, they see it as an easy option because it’s a free program for them, “Sure, I get Medicare benefits, I don’t pay anything for that, why not?” Now you’re going to see Medicare premiums start to go up and go from zero to $70, $80, $90, $100. We’ve already seen it with some of the Blue Cross Medicare Advantage plans this year. It’s going to get worse as we go into the future.
Reduced Medicare Advantage Benefits
To minimize premium increases, what many Medicare Advantage plans will do is raise copays, raise deductibles, and change coinsurance rates. In order to keep premiums low, they will simply pass more of the cost onto Medicare Advantage beneficiaries. The increase in premiums and the reduction in benefits is what we will see in the Medicare Advantage plan.
Fewer Medicare doctors
And if that wasn’t bad enough, as Medicare doctors start getting lower and lower reimbursements for people on Medicare Advantage, they’ll stop accepting new Medicare Advantage beneficiaries. We’re going to see the pool of doctors to support people on Medicare begin to shrink as well, unless changes are made over the course of the next five years. So Medicare will be affected, and it will be affected dramatically by health care reform. Everyone is like pins and needles, waiting to see what’s going to happen there.
Health Care Reform Will Lower Health Care Costs
The last, and probably the biggest myth about health care reform, is that everyone thinks ObamaCare will lower health care costs. That is completely nonsense. Early in the process, when they were trying to make the rules and regulations, the emphasis and one of the goals of the reform was to reduce health care costs.
But at some point, the goal actually shifted from cost cutting to regulation of the health insurance industry. Once they made that transition, they pushed cost reductions to the back burner. There are some small cost-cutting components to ObamaCare, but the real emphasis is on regulating health insurance. The new plans, for example, have many more benefits than many current plans: higher benefits mean better prices.
Health Care Reform Grants: Will They Make Plans Affordable?
Many people hope, “Subsidies will make health insurance plans more affordable, won’t they?” Yes, in some cases subsidies will help make plans affordable for people. But if you make an extra $1, affordable plans will suddenly become very expensive and can cost thousands of dollars more over the course of a year. Whether or not a subsidy will make it affordable is really up for debate right now. We’re going to have to really see what the rates are for these plans.
Those three myths — that health care reform will only affect the uninsured, that it won’t affect Medicare beneficiaries, and that ObamaCare will lower health care costs — are just that. they are myths. There is nothing to them.
It is really important that you pay attention to what is happening with health care reform, because there are more changes to come throughout this year, 2013. Knowing how to position yourself to be in the right place to make the best decision at the beginning of 2014 is going to be very important for everyone.