Tag: health insurance

Free Noom? Yes, health insurance will pay

January 3rd, 2021 by

Weight loss is a top New Year’s resolution. Noom is a great app with human coaching to help people lose weight and keep it off. Noom can be expensive, but can you get Noom for free? Does health insurance pay for Noom? In my case the answer was yes.

At Blue Cross Blue Shield of Massachusetts, weight loss reimbursement is offered alongside fitness reimbursement. They’ve made it much easier to understand since I requested reimbursement last year.

Here’s the FAQ for “What qualifies for weight loss reimbursement?”

Participation fees for hospital-based programs and in-person Weight Watchers sessions

Participation fees for Weight Watchers and other non-hospital programs (in-person or online) that combine healthy eating, exercise, and coaching sessions with certified health professionals such as nutritionists, registered dietitians, or exercise physiologists.

Notice, Noom isn’t officially named on the list even though Weight Watchers (not nearly as good as Noom) is. But I called Blue Cross and they told me Noom was reimbursed. When I submitted my request for reimbursement online it was paid right away.

This is the best of all benefits because there’s no co-pay, no co-insurance, no prior authorization and it doesn’t come out of my deductible.

Here’s the simple form I filled out online in 2020:

Screenshot 2020 03 30 23.35.25
Noom reimbursement

Does your plan pay for Noom? I don’t know, but it might. And it should. Losing weight and keeping it off is a win-win. It makes you healthier and saves the health plan money on medical costs.


By healthcare business consultant David E. Williams, president of Health Business Group.

Obamacare is about more than pre-existing conditions

September 29th, 2020 by
barack obama 1162861 1280
I swear to uphold pre-existing condition protections

The Affordable Care Act (aka Obamacare) is a comprehensive law that affects every corner of the healthcare system. It’s unreasonable to expect voters to grasp every nuance of the law, but it is useful to go a step beyond the current public discussion that says, essentially, individual mandate: bad, coverage for pre-existing conditions: good.

Bottom line: opponents can’t simply get rid of Obamacare, declare pre-existing conditions covered and call it a day.

Consider the example of a family friend whose  son was diagnosed with an auto-immune disorder in his early teens. It’s kept under control with a biologic drug that costs over $100,000 per year. There are other costs for diagnostic tests, specialist appointments, and the potential need for hospitalization and surgery. The parents are self-employed; they pay Blue Cross about $30,000 per year for insurance.

In a free market, the family would be uninsurable –or the “pre-existing condition” wouldn’t be covered and the family would face financial ruin. My guess is Blue Cross pays out $100,000 to $200,000 per year for this family –guaranteeing a big loss on the $30,000 premium!

It actually makes sense from the insurance company’s perspective to reject people with pre-existing conditions. After all, you can’t buy life insurance if you’re at high risk of death, you can’t buy homeowners insurance if your house is on fire, and you can’t buy auto insurance to cover a crash you just had.

Under Obamacare we decided as a country that pre-existing conditions would be covered. That wasn’t the consensus before.

But there’s more to Obamacare than just requiring insurance companies to pay for the treatment of pre-existing conditions. Consider some related protections that would evaporate if Obamacare were repealed or ruled unconstitutional.

Obamacare prohibited insurers from doing a lot of other things they used to do. Under the law:

  • You can’t be charged a higher premium because of pre-existing conditions
  • Your premium can’t go up and your policy can’t be canceled because you got sick
  • Insurers cannot impose an annual or lifetime cap on medical expenses

In order for such a system to work, everyone needs to have insurance. That’s where the mandates for employers and individuals to buy insurance come in. The mandates are not about taking away the freedom to decide whether to buy insurance, they are about making sure there are enough healthy people in the system to cover the costs of those who get sick.

The likely alternative to Obamacare isn’t a “free” market. People won’t stand for it. Rather it’s some version of Medicare for All.

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By healthcare business consultant David E. Williams, president of Health Business Group

 

 

 

Cadillac tax or Yugo tax: Which one would be better?

September 10th, 2015 by
Yugo Tax anyone?
Yugo Tax anyone?

The main provisions of the Affordable Care Act are already in place, but a pretty important one is slated for 2018: a 40 percent excise tax that applies to the portion of employer-sponsored health coverage whose cost exceeds roughly $28,000 per family (or $10,000 per individual). This so-called “Cadillac Tax” is making people nervous, including traditional supporters of the ACA such as labor union leaders, who often negotiate generous benefits.

As usual, repealing this somewhat unpopular provision will be harder than it seems, especially since the tax is expected to raise about $80 billion over ten years and would need to be replaced by something that raised or saved an equivalent sum.

(The term “Cadillac” as a stand-in for high-priced luxury, is kind of quaint. Remember Cadillac dog food?)

There are actually two good reasons for this tax. First, it is one of a variety of funding mechanisms to help subsidize the cost of insurance for people with low and moderate incomes

Second –and controversially– It starts to phase out the tax deductibility of health insurance. Tax deductibility for health insurance is very popular. As a business owner I like it,  but as with other tax code special treatment like interest deduction on mortgages, it does distort the market. The distortion causes employees and employers to favor a one dollar increase in health benefits over a one dollar increase in wages. It’s not the only reason health insurance and healthcare costs have risen so much for so long while wages have stagnated, but it’s one reason.

It would be impossibly disruptive to get rid of health insurance deductibility all at once. The Cadillac Tax reduces deductibility gradually by indexing the tax threshold to general inflation, which has been running significantly lower than medical inflation. If those trends continue, the Cadillac Tax will affect more and more employers over time. (It would then be like the unindexed, Alternative Minimum Tax, originally designed to hit the richest but now falling mainly on the middle class –causing confusion and unfairness.) If health insurance inflation is reduced, then fewer companies will be affected.

If we don’t like the Cadillac Tax, there is an alternative, more broad-based approach that could raise as much funding while more directly accomplishing the goal of reducing or eliminating the tax deduction for health insurance. Call it the Yugo Tax or the Yugo/Cadillac Tax if you prefer. Here’s how it would work:

  • Eliminate the tax break on the first dollars of health insurance costs, maybe the first few hundred dollars or so to start. Increase the amount gradually over time. This would be analogous to the Social Security portion of FICA, which is charged on the first dollars of income but not the last. The amount excluded from tax deductibility would not need to start high because it would affect everyone.
  • Reduce the impact of the Cadillac tax by increasing the threshold at which it kicks in and lowering the tax rate.
  • As the Yugo/Cadillac Tax delivers more revenues, reduce other taxes or use the proceeds to reduce the deficit.

The main worry is that employers would stop offering health insurance to their employees over time as deductibility was phased out. Maybe they would, but maybe that’s ok. The Obamacare exchanges are doing pretty well, and if more people used them the markets would function even better. Competition for individual business would do more to keep health insurance costs down than trying to get employers to act.

As a sweetener for the introduction of the Yugo Tax we could drop the employer mandate. Who really needs that anyway?

By healthcare business consultant David E. Williams, president of Health Business Group.

Watch your back! Surprise medical bills may await

September 23rd, 2014 by
Show me where it hurts
Show me where it hurts

 

Dr. Richard Amerling, president of the Association of American Physicians and Surgeons, writing from New York, had this to say in yesterday’s Wall Street Journal:

A patient recently asked, “What would happen if there was no health insurance?” I responded, “The prices for all medical goods and services would immediately plummet.”

I would direct his attention to Sunday’s New York Times (After Surgery, Surprise $117,000 Medical Bill From Doctor He Didn’t Know), which presents a much more realistic view of what goes on in New York City and around the country. To wit:

  • A patient had a neck surgery he may or may not have needed. (There are 2x-5x as many spine surgeries in the US as elsewhere in the rich world. The multiples are particularly high in places where surgeons like to live)
  • The orthopedist charged $133,000 but was reimbursed (and willingly accepted) $6,200. That’s on top of $60,000 or so in other charges from the hospital and anesthesiologist
  • An out-of-network “assistant surgeon,” probably not needed, billed an additional $117,000, which the insurance company ended up paying in full. The orthopedist says he didn’t take a cut of the assistant’s fee. Whether it’s true in this case or not, it happens

So what does this tell us?

  • That the information Dr. Amerling provided to his patient is naive at best
  • That insurance companies need to find better ways to contain costs or that regulators need to change the rules to allow them to do so
  • That patients need to be more skeptical of recommendations for surgery (especially spinal surgery)
  • That a single payer system, for all its faults, looks superior to the current state of affairs

There are benefits managers like MedSolutions that help insurance companies and employers deal with this sort of nonsense. At the very least this news should be good for their business.

photo credit: Darcie via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

Health insurance premium increases in Massachusetts: More ways it can happen

July 30th, 2014 by

Last week (ACA rollout hits some Massachusetts businesses harder than expected) I described how the implementation of Obamacare caused one small businesses’s Blue Cross Blue Shield of Massachusetts premium to jump by 29 percent for the upcoming renewal. The main issue was family size –previously only the first two kids were counted when calculating premiums, now it’s the first three kids. This group, with lots of kids, is paying the price.

After that I heard from two other BCBS MA customers who were experiencing big premium hikes. One is a two-family partnership where one family has two kids and the other has none. Their premium is up 17%. The second is a non-profit organization where the number of kids also shouldn’t be a deciding factor. Their premium increase is 26%.

Here’s what BCBS MA told me about these two:

The first group was a new customer entering its first renewal year. Initially, BCBS rated the company based on the expected –rather than actual– number of dependents. The rate was based on ~1.5 kids for one family and 0 for the other. (Something tells me they probably knew 1.5 was either too high or too low and not right on!) In any case, in a small group that is enough to make a significant difference in rates. With the ACA, health plans have to gather the dependent info even for new customers.

For the non-profit organization, the number of members covered declined from 12 to 7, which pushed them into a more expensive rate per member. (Even though rating based on group size is being phased out, it’s still a significant factor.) In addition, the group’s prior year increase had been tempered under a state law that limited the rates of increase for renewals. The ACA overrides the state’s rule and BCBS tells me they are unable to cap this year’s rate increase.

For what it’s worth, BCBS tells me that the median rate increase in the merged (individual + small group market) this year is 5-6%, which means these three examples are outliers. They also tell me that rate increases a year from now should be in the low single digits for all three of these customers and others like them.

I’d be interested in hearing from other Massachusetts customers of Blue Cross and other plans. Have your rates jumped? Are they steady? Did they fall? Do the explanations above seem to account for what’s happened to you?

Leave a note in the comments or mention on Twitter @HealthBizBlog.

By healthcare business consultant David E. Williams of the Health Business Group

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