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Archive for July, 2011

29
Jul

CLASS Act be Repealed

Written by dreilly. Posted in Blog, health care reform, PPACA, premium costs

The Patient Protection and Affordable Care Act includes a provision to develop a federally sponsored long term care program known as the Community Living Assistance Services and Support Act(CLASS Act).  The law requires theDepartment of Health and Human Services to release details of the program by October 1, 2012.  The program will likely begin enrolling members in 2013.

Americans 18 and older and actively at work will be eligible to enroll.  Employers who elect to participate will automatically enroll workers but workers will have the ability to opt out.  With no exclusions for pre-existing conditions participation will be highly selective and the program will disproportionately attract unhealthy members.

The Congressional Budget Office estimated the monthly premium cost at $123 on average, yet according to a white paper released by The Cato Institute earlier this year premiums could actually be in the range of $180-$240.  Cost will dissuade participants as will a requirement that premiums be paid for five years before benefits become available.

Cash benefits will be paid directly to a qualified participant who experiences a loss of at least two activities of daily living (ability to eat, dress, bathe, etc).  Payments are expected to be no less than $50 per day on average and there is no provision to limit benefits on a lifetime basis.

Only 6% of the population is expected to enroll according to estimates provided by the American Academy of Actuaries.  This number could be much lower given the voluntary nature of the program, the expense, and the five year vesting period.

The CLASS Act is doomed.  Low participation and adverse selection will render the program unsustainable.  The CBO is concerned it becomes “a new federal entitlement program with large, long-term spending increases that far exceed revenues.” and the bipartisanCommission on Fiscal Responsibility and Reform suggests a repeal if the program cannot be “reformed” in short order.  Reform?  The healthcare law was supposed to be reform!  Repeal is better than reform, at least for the CLASS Act.

18
Jul

ObamaCare

Written by dreilly. Posted in Blog, health care reform

A notable letter to the editor, printed in The Capital (Annapolis, MD), Friday July, 15, 2011. Enjoy!

Just so I understand this correctly, we’re going to be “gifted” with a health care plan we are forced to purchase and fined if we don’t, which will cover approximately 10 million more people without adding a single new doctor.

It was written by a committee whose chairman says he doesn’t understand it, passed by a Congress that didn’t read it, and signed by a president who smokes.

At least we can take comfort in knowing that nothing can possibly go wrong, because the funding will be administered by a treasury chief who didn’t pay his taxes, overseen by a surgeon general who is obese, and financed by a country that’s already broke. Only in America.

Ken Barlow
Annapolis, MD

15
Jul

Carriers Pay Maternity

Written by dreilly. Posted in Blog, education, health care reform, income protection

Maternity benefits are eligible events in most short term disability policies. They fall under the illness schedule as opposed to the injury or accident schedule (even if the pregnancy occurred accidentally!) Policies begin to pay claims after a waiting period for either type of event. Payments for injuries or accidents usually begin before illness events. For example, a policy may offer income payments as of the first day of an accident while the policy may require a one week wait before payment for an illness. Waiting periods differ from policy to policy.

Under most policies, maternity claims are generally payable for a maximum of six weeks from the date of the delivery. This is standard industry practice based upon general medical guidelines. Complicated deliveries and extenuating medical conditions can of course allow for an extension of claims.

Here’s a quick class. If a policy requires a one week waiting period before payments begin, and if a participant stops working on the actual day of the delivery, then the plan will begin the waiting period on the date of delivery, which leaves the participant with only five weeks of eligible claims left of the six available. But considering many doctors send participants home for bed rest before the expected date of delivery, the maximum benefit changes. This is because the waiting period begins on the day the member is sent home as opposed to the date of delivery. For example, if the plan requires a one week wait, and if a doctor sends the member home one week prior to the delivery date, then the member has the opportunity to satisfy the waiting period while at home before the delivery date. The policy will then still pay the industry standard maximum of six weeks once the delivery occurs.

Similarly, if a participant leaves work four weeks early for bed rest due to doctor’s orders the policy will then pay a maximum benefit of nine weeks of claims. This is because the member satisfies the one week waiting period starting from the date the member went home. Claims payments then begin three weeks before the delivery date while the member remains unable to work at home. Once the delivery occurs the policy will still pay the industry standard maximum of six weeks once the delivery occurs.

To simplify…. just remember that maternity claims are generally paid for six weeks from the date of delivery. The policy waiting period starts as soon as the member takes leave. If the leave occurs before the delivery date, then the member receives more weeks of payment. If the leave occurs on the delivery date, then the member receives fewer weeks of benefit.

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