Most people are too busy with their lives to pay attention to what is happening with the health-care legislation. The baby boomers are just starting to enroll in Medicare and are experiencing savings in their coverage. HOLD ON. This will change. I promise you that.

President Obama promised changes in Medicare spending. This would help fund the uninsured. That savings comes in the form of cuts to capitation. Now what is that? There are two different ways to cover gaps in the Medicare program. Most seniors do know that Medicare alone will leave you with some unpaid medical bills. Two plan designs help fill those gaps. The original was called Medigap insurance and the second is now called Advantage plans. The Medigap is often called alphabet soup because it is named by letters. My personal favorite is plan F. Medigap plans follow MediCare. Right now I want to focus on the Advantage plans.

Advantage plans are like HMO plans. Under a HMO agreeement, physicians and physician groups are paid a “head fee” per person who picks that physician group. A portion of the premium goes to the physician group each month.  The physician group pays for much of the services that person needs.  When the HMOs first came to the market, doctors loved them because of the guaranteed money per month.  The members do not see any bills. The members have lower office visit co-pays. The physicians soon realized they may not be making enough to offset bills for expensive illnesses such as diabetes. Some physician groups would negotiate to increase this “head fee” aka capitation. Some groups would just say we won’t take those contracts anymore. This is where members would lose their doctors. Doctors would blame the insurance companies.

Fast forward. The Medicare HMOs now called Advantage programs have many names. Secure Horizon, Scan, Kaiser, Pearl and so on. The most popular has been Secure Horizon from United/PacifiCare. This also is the chosen plan of AARP.  The Social Security department pays the advantage plan a set capitation fee per person. That fee is about $800 per month per person. In return the Advantage plan covers most of the services the senior requires. The advantage plan insurance company shares that capitation with the physician group. Some plans charge more to accommodate and include certain physician groups.  CUTTING CAPITATION is the easiest way to save money without evaluating medical cost.  Common sense dictates that when an insurance company receives less money, they will trim benefits. This will happen. By 2011 Federal Government will be trim $195 per month per person on the Advantage plans. By 2012 this will increase to $585. These cuts are predicted by the National Center for Policy Analysis and the Congressional Budget Office.

I have tried to hit the high points of the information. The old saying; “Follow the Money” should be easier for you if you have read this. Please email me if you want to know more! You may also go to www.ncpa.org for more information on these upcoming CUTS.

By September insurance companies cannot rescind insurance contracts without airtight proof of fraud. Rescission is a big nasty problem referred to by our President as; “Taking your policy away when you get sick.”  My personal opinion is that rescissions increased  when insurance companies encouraged members to apply online. Anthem even allowed members to print a temporary ID card. This would be like financing a home without going through any process of financial qualification.

Whoops I think our banks did that with disastrous results. I do not want to get off topic.  What exactly is rescission? Imagine not having insurance and discovering that you needed surgery that cost $50,000. 

You fill out an application that omits that information. The doctor taking care of you, states that your condition existed for some time. That condition also had symptoms that you couldn’t ignore.  This is done when the doctor submits paperwork to the insurance company so the hospital and everyone can get paid by the insurance company. The  insurance company finds out that your application omitted a health condition that cost $50,000.  That is considered fraud. That would be like insuring your car after it was stolen. Everyone seems to understand that is wrong.  When it comes to health, we all are sidetracked with the humanity of taking care of someone’s illness.  Think about the headline; Poor sick woman turned away for cancer treatment because insurance company won’t pay the bill! No one seems to blame the hospital or doctor.  The villain is the insurance company.

When an agent such as myself is involved, I question the applicant on their health issues. This is called field underwriting. Underwriting has always been difficult for me. I care. I want to get some sort of financing for my clients.  I haven’t found a community clinic that can handle cancer.

I will cut to the chase here. Now that insurance companies are not allowed to rescind applications the underwriting has become literally impossible to manage. We do not have plans for people how have moderate issues. The plans available to individuals require strict underwriting.  The underwriters are under great pressure to do it right. Can you imagine approving an application that later turns into a fraudulent issue? A year ago one out of 3 applications were approved for me. Now I am able to get one out of 6 applications. My statistics are not accurate since I am not advertising for individual plans. I become too entangled with the disappointment of it all. I do wish we had financing for health issue calamities. Dentists have found financing and so should the health care delivery systems.

How are these companies related? They are all conspirators and demons.

We asked for it. We wanted a hero without knowing what that was. A hero has enemies that crawl on buildings and destroy things. There is no logic just one big demon and one big hero. That is why our hero targets only one demon. We can figure that out. Black and white ( no pun intended ) exist in this world.

Never consult a demon. They will never tell you the truth. The old saying of keep your enemies close is long forgotten. That does not sell air time and news blasts. Logic and thought are not interesting.  The hero is never wrong so don’t expect shared responsibilty for mistakes. I would like to know who inspected the wells that were being drilled miles below water level. I would also like to know what the contingency plan was. If that was discussed or disclosed it didn’t hit our information sources. Probably boring.

BP is so like the health insurance companies. They both wear black masks, breath fire and eat small living things.  The new legislation signed  March 23, 2010 will save us all. Remember Nancy Pelosi said you didn’t need to read it to know that.  I have a dirty little secret about this heroic legislation.  That is health care delivery will continue to rise. This golden wondrous legislation does nothing to control cost. People who understand cost were never brought to the table for discussion on this legislation. Remember to keep demons separated and never ask them for advice. 

Take a little test for me. Next time you are at your doctors, ask them if they know what a PPO plan is compared to an HMO plan. Next ask them what their negotiated rate for your visit.  Next try and call the doctor’s billing representative and ask them what the cost for a follow up visit is. Make sure you don’t confuse that with the set office co-pay.  I am never surprised about that lack of understanding. We are all specialists in our fields. I expect my doctor to help cure me and not know why a 29 year old dependant has a higher premium then an employee the same age.

When the health care legislation was written (under time duress) no actuary, insurance professional nor business analyst was consulted. Heaven forbid they might suggest fixing pieces of the puzzle first. They might suggest looking at various state programs that have been successful and see how that might apply. They might have even looked the demographic and state differences to see how to manage the problems we face. That is not easy. That would require study and leaving the political agendas at the door.  Most importantly that would not make anyone a hero.

It is so difficult to know what a candidate will do after they have won an election. Meg Whitman was for amensty until Steve Poizner was against amnesty. Now we hear the standard sound bite: “Let me be clear”. She proceeds to explain how “back of the line” works. Wow I hope she trains the theatre folks on how to manage lines.  That line is getting as big as the oil slick in the Gulf.

 How do we hold them responsible? How have we been able to hold Arnold responsible? That answer is, “not easily”.  California would have had a nasty reputation for divorcing too many governors.  Today at the polling spot in Los Angeles,  Arnold couldn’t even figure out that you can only vote for one when noted on the ballot. Now I know what happened in Sacramento.

I am always surprised when my friends complain about the negative advertising.  I am thrilled to find out more about any person running for office. I could always read their autobiography. Surely they would be clear and honest about themselves. Please someone tell me why vanity books are on the best sellers list. Steve Poizner not only wrote one he produced a video.  It would have been more effective to print a booklet on his record as our Insurance commissioner. That is it.  I really don’t care if his wife’s hair picks up on the subtle setting sun highlights and her eyes are warm and inviting. Help.

I guess Arnold missed the vanity political book routine. Can you imagine that one? Highlights from making the “Terminator”. That would have been fun. Did you hear about how he wants to set up a health insurance exchange before he leaves office? I wonder what sort of deal he can make and be trusted to make? I know a couple of guys that are working overtime in order to become a nonprofit exchange. I suppose they could get rid of their race horses. Bottom line they are reeeeeeeally worried about losing their 4% commission on every sale their office has made. Talk about passive income without risk.  More on that later.

My favorite quote for today: 

Better to remain silent, and be thought a fool, than to speak out and remove all doubt.

Abraham Lincoln

 We might think about that quote when we listen to the acceptance speeches tonight.

I am so happy that Toyota sales were up 41 percent. Probably because they discounted their prices. More importantly it shows the American public does not swallow all of the assertations and media hype of their recall issues.  I don’t consider myself a conspiracy theorist/nut. But don’t you think it interesting that they were villionized and they happen to be non-union?

How did my mind jump to health insurance from Toyota? I believe many Americans ask themselves what do they know first hand? Do they drive a Toyota? Does their neighbor drive a Toyota? Did their cars run away on them? Panic did not set in. Many continued to buy a Toyota last month. Health insurance: Many Americans who have lost a job know that they did not lose their coverage, they could have paid for it when they were laid off. Many Americans were offered financial help to pay that bill. Perhaps they still couldn’t afford it because of their unemployment was not enough and they were healthy anyway. Those Americans who want to work or have worked realize that healthcare is part of their incentive and pay. I can tell you that many people tell me that they are tired of working hard so someone else can stay home on welfare and get free healthcare. I believe as November comes closer we will see energy from the force of the middle class American. That middle class American feels lucky to go on a 2 week vacation. That middle class person never sat in first class on a plane. That middle class person who goes to their kids soccer game only if they aren’t at work.  Those are the folks that DESERVE some help with their health insurance when they get laid off.  I don’t believe that Americans want to level all the financial playing grounds so folks can continue to stay at home and work the system.