Obama Care Kicks In - Working Poor Pay Their Fair Share

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Reality Check
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Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

My wife works for a Large Nationwide Box store.

She has worked there a long time, but the vast majority of the employees who work there, have been there for less than three years.

The mix of employees is about 30 percent full time, 70 percent either: part-time ( less than 30 hours a week ) or part-time seasonal ( work less than 90 days before mandatory termination).

The average full time employee has worked their for less than three years as well, and makes between 15,000 and 28,000 annual wages. By most peoples definition these full time folks are the working poor. The biggest advantage to them was that they, as full time employees had real corporate benefits available to them. They gave up many things to get those, part timers get to pick their hours and days worked, full timers work all weekends and are scheduled around the part timers. Most full time employees have one day a week where they "close" at 10PM followed by opening a few hours later at 5 AM.

Calendar year 2013 is when most of the Obama Care changes that affect Health Care plans offered by large employers in America kick in. November 2012 is when most employees sign up for 2013 benefits. The new Obama Care compliant Health Care plans have now been unveiled across the United States.

It is no longer speculation as to "you can keep your existing health insurance if you like it". Obama Care has changed the health care insurance available to the working poor at work forever.

This thread is intended to record what those changes are.
Last edited by Reality Check on Fri Nov 30, 2012 12:14 pm, edited 3 times in total.

Reality Check
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Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

Medical Flexible Spending Accounts (mFSA).

These (mFSA) were the most important tool the working poor had to pro-actively manage their health care costs. They were a bi-partisan creation during the periods of divided government in the 1980s and 1990s.

They did not require a working man/woman to buy a High Deductible Medical insurance policy which might be great for the wealthy, but High Deductible Medial insurance plans were simply a bad idea, or worse a bankruptcy causing nightmare, for the working poor.

Medical Flexible Spending Accounts (mFSA) were the working family's way to take their children to the doctor, even when they had already spent the entire pay check.

These were the working family's way to address their families health care needs pro-actively on a year round basis, not just after the ever increasing annual deductible was satisfied.

These were the way the working family avoided paying an additional 23% in federal taxes ( 15% Income tax plus 7.65% in Social Security tax ) on top of every dollar of out of pocket monies spent on Medical Deductibles, Medical Co-Insurance, Medical Co-Pays and expensive "Over The Counter" health maintenance drugs.

Prior to Obama Care these were a God send to the working poor, simple to use, simple to setup, and immune from losing a job or having wages garnished, now they have become a nightmare of increased complexity, increased federal taxes on the poor, lost monies set aside for medical needs, that could not be used for medical needs, lost health care opportunities, and lost good health for the working poor.

Obama Care made many changes to Medical Flexible Spending Accounts, some obvious, others very subtle, but all very, very bad for the working poor.

The most minor, implemented over a year ago, by Obama Care, was to ban Over The Counter long term maintenance medications from being paid for out of Medical Flexible Spending Accounts. No longer could people suffering from chronic arthritis, chronic acid reflex disease, chronic allergies, or chronic asthma, etc., buy their long term, and costly, maintenance medication over the counter with the monies they set aside in a Medical Flexible Spending Account every year for that medical purpose. Worse Yet Obama Care at the same timed allowed insurance plans of all types, including insurance plans offered by employers, to ban the prescription alternatives to these over the counter drugs from being covered by medical insurance and ban them from being covered by prescription drug insurance.

The most subtle of these changes to Medical Flexible Spending Accounts, and one of the more devastating, was a new Obama Care creation called a "Limited Medical Flexible Spending Account". This monstrosity was created automatically by Federal Law if an employee made the mistake of signing up for both a "Medical Flexible Spending Account" and a High Deductible Health Care Plan. If an employee made this mistake then the "Medical Flexible Spending Account" the employee signed up for was automatically, and irrevocably converted to a "Limited Medical Flexible Spending Account" by federal law.

"Limited Medical Flexible Spending Accounts" can not, repeat not, be used to Pay for Medical Expenses, like doctor bills, prescription medicine or hospital stays, but instead can only be used for dental work and eye glasses. So an employee who in November 2011 signed up to have his salary reduced by $4,000 in 2012 so that $4,000 could be available in 2012 for his portion of the cost of a needed surgery for his wife would instead find himself having $4,000 less in wages, no out of pocket money for wife's needed surgery, and the need to spend $4,000 out of pocket on dental work over 15 months if he was to avoid losing the $4,000. All because of changes made by Obama Care to Medical Flexible Spending Accounts.

The most obvious, and the most devastating of the Obama Care changes to "Medical Flexible Spending Accounts" occurs during the signup period that is currently happening for the 2013 Calendar year Medical Insurance Plans at work places all over the United States.

Effective Immediately, for all insurance plans in the United States, for every man woman and child in the United States, even if they get their medical insurance through through their employer at work, or from their employer:

Obama Care requires employers, who offer "Medical Flexible Spending Accounts" to discriminate against working class employees who are married and have children. Obama Care does not require the same type of discrimination by employers who offer "Medical Savings Accounts" which are used primarily by the wealthy and highly paid employees. Obama Care requires that married employees and employees with children not be allowed to set aside additional monies in their Medical Flexible Spending Accounts to cover the increased deductibles, co-pays and co-insurance out of pocket costs that employees with dependents face. By contrast Obama Care does allow employers who offer Medical Savings Accounts. which are used primarily by higher paid employees and the wealthy, to set aside larger amounts for employees with spouses and or children to cover the higher deductibles, co-pay, co-insurance and other out of pocket medical expenses experienced by employees with dependents.

The maximum "Medical Flexible Spending Account" has just been slashed by $2,500 dollars. Medical Flexible Spending Accounts ( used primarily by the working poor ) and Medical Savings Accounts ( used primarily by executives, higher paid employees and the wealthy ) previously had similar maximum contributions maximums, in the range of $5,000 to $6,500 dollars. Medical Flexible Spending have now been slashed by Obama Care so there maximum contribution is less than 37% of what can be put in a Medical Savings Account. This does not effect the rich or the executives, they can still benefit from Medical Savings Accounts and High Deductible Insurance policies. It only devastates the working poor, lower middle class, and traditional middle class who do not have the time or the high income to benefit from the High Deductible Insurance Policies that are required as a pre-requisite to having a Health Savings Accounts.

Bottom line, Obama Care just cost the working poor $2,500 a year in a tax free medical benefit. Previously Obama Care had vastly increased the complexity of using a mFSA. This most recent $2,500 reduction to this benefits comes at a time when the mandatory implementation of Obama Care by employers is also vastly increasing the need for that lost benefit by massively increasing deductibles and co-pays and maximum out of pocket expenses for 2013.
Last edited by Reality Check on Sat Dec 01, 2012 7:29 am, edited 2 times in total.

Reality Check
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Re: Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

Obama Care, in the law passed by Congress, does not explicitly, and exhaustively, define what preventive care is. It leaves that for regulatory law to be written by the Obama Administration.

Obama Care does however, in the law passed by Congress, explicitly and expressly, identify what is NOT preventative care in many instances.

For example a doctor visit that includes the diagnosis, or treatment of, any one of a large number of diseases expressly listed in the law, regardless if the disease was pre-existing, or just occurred, is required to be treated as medical treatment and paid for by the medical insurance company as a covered benefit expressly for the purpose of treating the specific disease.

Similar language is in the actual law written by Congress related to accidents.

Obama Care requires certain preventative care to be paid for by insurance companies 100% without applying deductibles or co-pays to the bill for the preventive care, but, as noted above, leaves regulator law to more fully identify what is preventative care.

The large box store mentioned above offers traditional insurances plans through one of the United States' largest Nation Wide Health Insurance companies.

Obama care defines a "routine annual physical" as preventative care to be paid for 100%. No deductibles, No co-pays.

This large insurance company very skillfully, and legally correctly, excludes from paying for any visit to a doctor as a "routine annual physical" if that doctor visit includes any diagnosis or treatment plan that the Obama Care law written by Congress expressly identifies as not preventative. In conflicts between regulatory law and the statute that authorized the regulatory law, the statute almost always is found determinative by the courts.

So, for example, if an annual doctor visit included renewing the annual prescription for a maintenance drug for a disease the Obama Care law, as written by Congress. expressly identifies as a diseases that requires treatment with benefits to be paid by the insurance company for disease treatment, then that doctor visit would not be paid for as a routine annual physical. Standard Deductibles, Co-Pays and Co-Insurance would apply.

Reality Check
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Re: Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

Snail Mail Denials.

Obama Care requires that all notifications of denial of drugs and many other denials of many other insurance benefits be made by a letter sent via the United States Postal Service, and that the letter includes a complete explanation of the appeals process, and that duplicate originals be sent to both the doctor and the patient.

New for the 2013 benefits at the Big Box Store, employees, and their doctors, will only be notified of denials by snail mail letter. Approvals will be electronic notifications to the doctor, but denials will not be given out verbally or electronically, only by snail mail. Requests for more timely information will simply be ignored, with the justification for this being the new Obama Care law. Again this is now the standard policy of one of the largest Health Care Insurers in the United States.
Last edited by Reality Check on Sat Dec 01, 2012 7:32 am, edited 2 times in total.

Reality Check
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Re: Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

Obama Care law recognizes that employers will need to make many changes to their health insurance plans to comply with the phased implementation of the Obama Care law.

Prior to Obama Care, Federal Law required each employer who desired to be able to deduct the cost of the health care plan for employees from there taxable profits, to have a detail plan document describing in full exactly what benefits were offered by the insurance, and exactly what the exclusions to benefits were, and to make a copy available to employees and their attorneys, upon the request of an employee. In other words a legally binding insurance contract between the employer and the employee actually had to exist in writing before the employer started collecting money for the insurance from the employee, and, before Obama Care kicked in, the employee and the employee's attorney had the right to read the contract.

Obama Care suspended that law. Employers now have two years after they implement a new insurance plan to write down exactly how it works.
Last edited by Reality Check on Sat Dec 01, 2012 7:34 am, edited 1 time in total.

Reality Check
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Re: Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

Obama Care allows employers and insurance companies to impose annual maximum limits on the insurance benefits they will pay for employee medical care and the employer is NOT required to disclose those limits before the employee is required to choose to buy, or not buy, the insurance offered by the employer.

Prior to the 2013 benefit year the Box Store noted above disclosed the Annual Maximum, both in the summary description of the insurance plans made available online to all employees and the detailed insurance plan also available on request.

Obama Care requires employers and insurance companies to make known to employees there is no longer any "Lifetime Limit" on benefits, but no notice by employers regarding annual limits is required.

As noted above, Obama Care also removed the requirement that a written insurance contract between the employer and the employee actually exist before the employee made a decision on the insurance, or even before the employer started collecting insurance premium payments from the employee.

Reality Check
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Re: Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

Obama Care views health care cost savings not from the stand point of making the health care delivered less expensive, but instead from a two pronged approach of:

1. Legally allowing the Insurance companies, the U.S. government, and employers to avoid paying for "health care procedures and services that do not guarantee better health outcomes" than doing nothing, and/or using alternative health care procedures that cost less, and shifting the legal responsibility to pay for those health care services which are delivered, but have "questionable better health outcomes" from the insurance company ( and from the U.S. government, and from employers ) to the employees/patients; and,

2. Avoiding health care costs by making it legal for insurance companies to refuse to pay for medical procedures except on very rare occasions ( like once every 10 years ) and/or making it so expensive for the employee/patient to seek health care treatment on a regular basis that the poor and the middle class simply go without health care to avoid the cost. The exception to this is well patient care. Obama Care requires insurance companies to pay for one doctor visit per year for each adult if the only purpose of the visit is to confirm that there is no medical condition that requires treatment.

Obama Care both allows and, in some cases, such as Flexible Spending Accounts, requires employers and insurance companies to implement this two pronged approach of health care cost shifting to the patient; and health care delivery avoidance, by making it prohibitively expense for the employee/patient, or worse yet, virtually impossible for the employee/patient to determine what a given health care procedure will cost, and who will be required to pay what portion of that unknown cost, before a health care service is actually ordered and delivered.

Posts will follow that include specific examples of just how the new 2013 Insurance plans use the new legal tools provided by Obama Care to shift costs and discourage the average patient/employee to seek health care diagnostic procedures and to seek health care treatment.
Last edited by Reality Check on Sat Dec 01, 2012 7:54 am, edited 2 times in total.

Reality Check
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Re: Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

Prior to the 2013 effective date of the Obama Care law, the primary cost containment mechanism used by employer based health insurance to contain costs and shift costs were "Preferred Provider Networks" and also severe financial penalties levied on the patient/employee for not using the "Preferred Provider Network."

The sever penalties on patients will remain in effect after Obama Care goes into effect in a few days, but the cost containment features of "Preferred Provider Networks" have been gutted by Obama Care.

Prior to Obama Care's implementation, which is taking place right now, and will be in full effect on January 1st, 2013, these networks did have some advantages to patients/employees.

Hospitals, Doctors and other Health Care Providers who were part of an Insurance companies Preferred Provider Network had a contractual obligation with the Insurance Company not to charge patients insured by the Insurance Company more than a price the Insurance company and the Health Care Provider agreed was reasonable for each medical procedure, regardless if the procedure was paid for by the insurance company, or the patient. Hospitals, Doctors and other Health Care Providers were free not to agree to this, but the insurance company could restrict membership in the network to just those Hospitals, Doctors and other Health Care Providers who would agree to charge "reasonable prices" to patients insured by the insurance company. This was all before Obama Care goes into effect in a few days.

Sever financial Penalties, levied by the insurance company, on patients/employees who went outside the network made it in the strong financial interests of Hospitals, Doctors and other Health Care Providers to be part of the Network, or patients would avoid them like the plague. It was easy ( for the patient ) to see who charged "reasonable" prices by just finding a doctor or hospital who was in the Network, and to simply avoid those who did not charge reasonable prices by avoiding anyone not in the network. This was before Obama Care goes into effect in a few days - things will be very different starting January 1st, 2013.

Obama Care, through changes in federal contract law related to health care providers, has destroyed that cost containment model for hospitals, outpatient surgical facilities, other free standing health care delivery facilities, and doctors who deliver services charged through hospitals, outpatient facilities, and delivered through other free standing health care delivery facilities.

No longer, can a health insurance company deny hospitals and many other facilities membership in a "preferred provider network" simply because they refuse to sign a contract agreeing to "reasonable prices". Doctors who bill through hospitals and other such facilities can also avoid contractually agreeing to "reasonable prices" as a pre-condition to being included in the "Preferred Provider Network".

Patients/Employees can no longer relay on any pricing limits on what an "In Network" hospital or "In Network" doctor will charge them, just because the insurance company lists them as "In Network". The insurance company is, now that Obama Care has gone into effect, barred from excluding a hospital, facility, or doctor who delivers services through such hospital or facility, from being on the list, even if they refuse to agree to negotiate reasonable prices with the insurance company. Obama Care protects the rights of hospitals and others to unlimited free market pricing but requires each patient/employee to negotiate his/her own contract with a Hospital, or other health care provider, if the patient/employee wants to know what he will have to pay before being treated. Obama Care, effective January 1st, 2013 effectively bars Insurance companies from negotiating prices with hospitals, and many other health care facilities, on behalf of the insurance company's insured patients.
Last edited by Reality Check on Sat Dec 01, 2012 8:02 am, edited 1 time in total.

Reality Check
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Re: Obama Care Kicks In - Working Poor Pay Their Fair Share

Post by Reality Check »

The big Box Store has implemented new cost control measures in their health insurance policies as allowed by Obama Care.

These changes are required, to compensate for Obama Care gutting cost containment practices that were working well before Obama Care.

One example is related to a common medical diagnostic procedure used to detect colon cancer.

Prior to 2013 the insurance company just negotiated the best price it could get with any hospital or out patient facility in each local market for this procedure, and then required any hospital, or out patient facility that wanted to be on the insurance companies "Preferred Provider / In Network List" for that procedure to match that price. A very simple and effective procedure for containing costs to the patient and the insurance company alike.

Beginning January 1st, 2013, Obama Care makes it illegal for the Insurance company to exclude any hospital or out patient facility from their "Preferred Provider / In Network LIst" based on the above simple practice.

As a result, the Box Store has simply changed the insurance policy for 2013 to allow each "In Network Facility / Preferred Provider " to charge any thing they want, for the Colon Cancer detection procedure, but the insurance company will only pay for the cheapest type of procedure, and the lowest price charged for that procedure. This remains legal under Obama Care even if no facility in the local market uses that procedure and charges that price. If the "In Network Facility /Preferred Provider" on the insurance companies preferred provider list, charges five times the lowest price for the lowest cost type of procedure used anywhere in the U.S., then the patient/employee is responsible for paying 100% of 80% of the cost, plus the patient/employee must also pay the "Patients fair share as determined by the insurance policy" of the rest of the cost.

Obama Care expressly allows, by law, insurance companies, including Employer based insurance, to use "nationally recognized best practice boards" to determine the "lowest price procedure that produces substantially equivalent health care outcomes" and Obama Care expressly allows the insurance company to refuse to pay any higher costs associated with using other methods "unless the patient can prove by medical evidence" that the "nationally recognized best practice board" was wrong when it concluded: "the lowest price procedure provided substantially equivalent health care outcomes".

I checked hospitals and out patient facilities within 100 miles of any metropolitan area, where the metropolitan area was within 300 miles of the box store, to see if any of them performed this procedure within the low cost parameters established by the national board. Only two ( 2 ) out of more than 100 did. The two were in fact small hospitals, each located in a small town that is little more than a wide spots on a two lane highway. I have driven though both towns within the last 15 years. There is no guarantee the data on these two hospitals is current, nor that they even still perform that specific low cost procedure, nor that they still charge that price for it. It may simply be old data left over from hospitals which stopped doing that test years ago.

One "low cost hospital" is 277 Miles from the Box Store and the other is 340 Miles. Both are in very rural areas of the state of Idaho. The Box Store is in a Metropolitan area of Washington State.

In practice this means health care providers use any procedure they want, charge anything they want for it, and the cost of that procedure is shifted from the Insurance company to the patient/employee. The only way the patient/employee has of avoiding the cost shift is to decline to be checked for Colon Cancer. The patient does not even have any practical way of determining what the procedure will cost them out of pocket before the procedure is performed.

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