Category: RubinHealth Blog

Important healthcare benefit information for federal employees


Federal Employee Health Benefits and Healthcare Reform

As it stands today only those federal employees who are members of Congress and their ‘official staff’ will be required to enroll in health insurance through the newly created healthcare exchanges. 

All other federal employees will not be required to utilize the healthcare exchanges and their healthcare options will remain very similar to what they have historically had. Of course the provisions that all health insurers are required to follow will be in effect for Federal employees on 1/1/14 such as out of pocket maximums. 

Dr Radio

Reminder: Dr Radio is not going to be live again until July 18th.  There will be reruns for the next 2 weeks.

Medigap Coverage rules: in follow up the Healthcare Connect caller

You cannot be denied enrollment in an Medicare Advantage plan due to a pre-existing condition, unless you have end-stage renal disease (ESRD). Read more here.

On the Medigap side…You are guaranteed the right to purchase a Medigap policy during the first 6 months you become eligible for Part B (unless you are younger than 65 and have end-stage renal disease). Read more here. After the six months you may be required to take a health assessment which could drive costs up and may even be denied coverage.

Medicare fee schedule

House Republicans decided compromise was necessary and are extending the payroll tax cut for 2 months.  But more importantly, Congress is extending the Medicare physician fee schedule reductions as well. I believe most agree extending the payroll tax cut leaving extra money our pockets is good for the economy and good for us all.  I believe preventing the Medicare fee schedule has an even bigger impact.  With our massive debt and generally bad economic times, many argue reducing government spending is a good idea.  But cutting Medicare payments to physicians by 27% would have been disastrous for seniors and physicians alike.  Taking care of seniors is time consuming.  For many physicians, Medicare pays less than private commercial insurance.  Simply put, many primary care doctors would not be able to keep their practices open if these cuts went through.  This is not a scare tactic by some lobbying group.  As someone who runs a large physician network I can assure you these cuts, had they gone through, would have been a disaster for everyone.  

For whatever reason, and there are many, seniors, physicians, and hospitals go through this nightmare scenario each and every year.  Sometimes, with short term extensions like we just received from Congress for two months, we go through it more than once a year.  It needs to stop.  Congress needs to address this flawed formula.  I think most would agree there should be a way to tie the fee schedule to some form of modest growth but a reduction of the magnitude faced each and every year needs to end once and for all.

FSA versus HSA

What is an FSA?

  •     Used to pay for medical expenses not paid for by insurance for example this deductibles, copayments, and coinsurance
  •     Can also be used for qualified medical expense, such as dental and vision expenses and over the counter drugs
  •     “Use it or lose it”  money must be spent by the end of the year or the money is lost

Healthcare Reform Impact on FSAs

  •     In 2011 over the counter drugs require a prescription in order to be FSA eligible such as Advil
  •     Beginning in January 2013 a new maximum dollars allowed into account beginning in 2013 of $2500

What is an HSA?

  •     Must also be enrolled in a high deductible health plan
  •     Unlike a FSA the funds roll over year to year if not spent.
  •     Account is owned by the individual
  •     may be used for any qualified medical expense.

Medicare Donut Hole

The Medicare donut hole is the coverage gap in Medicare Part D Drug Coverage, where you are not insured for the cost of drugs

• The gap amount, or dollar threshold where you lose coverage for 2012 is $2930.

This number is calculated on retail costs of the drugs, not what you personally spend, i.e. co-pay or co-insurance.

• You exit the Donut Hole when your total out of pocket expenses reaches $4,700.

This number was calculated in a new way beginning in 2011

• In 2011, and continuing in 2012 when you are in the Donut Hole you will receive discounts of 50% on Brand drugs and 7% on Generic drugs, this will keep you in the hole longer though.

For exiting the donut hole, calculations include not only what you have paid toward your prescriptions, but also what specific extra help programs have paid toward your medication costs.

• After you have spent $4,700 (left the donut hole) catastrophic coverage kicks in and you will have to spend $2.60 per month for generics / $6.50 per month for name brand medications or 5% of the medication’s retail cost, whichever cost is higher.

• Healthcare reform plans on eliminating the Donut Hole in 2020

Why are insurance premiums going up?

I spoke to so many people today who were wondering why health insurance premiums were going up so much next year.  Almost everyone thought it was because of healthcare reform.  No one was being negative, they were merely trying to understand why it’s going to cost so much more next year.  It is important to make sure people understand healthcare premiums have been going up year after year — long before healthcare reform was passed.  While last year the increases were lower than this year, for a whole host of reasons, the harsh reality is our healthcare costs will continue to rise until we are all willing to truly tackle the many reasons behind the explosive growth.  To name a few, an aging population, new drugs and technologies to treat an ever increasing number of diseases, and finally, if not most importantly, our insatiable demand for healthcare services when we want them, regardless of the costs.

I have written about this before but I feel it is important to remind everyone when insurance companies raise their rates year after year.  It would be easy to blame healthcare reform, but it is also wrong.  We need to give healthcare reform a chance to work.  It really starts in 2014.  Until then, we are going to have to deal with what we have and hope that as more and more reforms are implemented, we may finally see some relief.  Even then, I am not optimistic that we will have done enough to control costs.  Congress will need to make some hard decisions.  We all will have to make some hard decisions about how to pay for healthcare in the future.  In the interim, do not blame healthcare reform for the high costs.   If you are really looking for someone to blame, call your congressman.

The Truth About the Texas High Risk Pool

Great information came in from a Dr. Radio listener about The Texas High Risk Pool (for those who cannot get health insurance because of preexisting conditions).

For those who were listening to the show on Thursday, Sept.15th we had a caller who said the pool was easy to access and open to anyone who is denied insurance for a preexisting condition.  Thus the only reason 24% of Texans lack health insurance (the highest rate in the nation) is by personal choice. 

Our listener told us the following: the enrollment is not even 40,000 it is 26-27,000.

Premiums for a 50-year old female, non-smoker are $907 per month with a $2500 deductible, a $250 prescription deductible, 20% coinsurance and a $4000 annual out-of-pocket (additional to the deductible – not including it) making this an approximately $15,000 policy.  Also, the premiums rise every 6 months.  In Dec 2008, premiums for her started at $634 per month. In less than 3 years, there’s been a 43% increase in premiums.  Most people who enter the risk pool cannot stay in for very long.  It is simply unaffordable not because they chose to stay out of it.

The key in healthcare is to make sure you know the facts.  It’s ok for Governor Perry from Texas to want to repeal healthcare reform – as all the Republican candidates are saying – but we should be demanding them to explain to us their proposals as an alternative.  Simply maintaining the status quo seems high dangerous for all of us who will someday rely on the healthcare system and Medicare and for the United States financial health in general.

Time for an Intervention on Medicare and Medicaid Costs

The Bureau of Economic Analysis recently released data showing Medicare and Medicaid costs jumped 10% in the second quarter of this year. This puts the two healthcare entitlement programs on course to reach spending levels of almost $992 billion. Yes, that is almost $1 trillion. And guess what, it is not going to stop rising unless something is done soon.

The recent debt ceiling compromise in Washington did not touch or modify the programs but it does leave them open for restructuring in future negotiations. And as much as I love and value these entitlement programs, a massive restructuring is exactly what is needed. When Medicare was first enacted in 1965, approximately 19 million Americans enrolled. By the year 2030, an estimated 80 million Americans will be enrolled. The bad economy only adds to the burden as more and more Americans wind up in the Medicaid program. Medicare and Medicaid currently pay 57.5% of all provider bills for doctors and hospitals, and pharmaceuticals. That is up from 49.3% in 2005. Life expectancy when Medicare was created was 70. Today, it is 78. People are living longer and they are using more and more healthcare services. Each day, there are new and amazing discoveries, many of which will extend our life expectancy adding even more cost to an under financed system.

It would be a wonderful blessing if our country could fund all of our healthcare expenses indefinitely. But simply put, the math just does not add up. We must fix the funding of the program now so that we all benefit from it in the future; our children and grandchildren included. I believe there is a way if only we all listen and understand the facts on the ground.

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