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Thread: HCR Bill Shown to Increase Coverage for Small Business Employees

  1. #1
    Senior Member Buzz's Avatar
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    Default HCR Bill Shown to Increase Coverage for Small Business Employees

    There is a new article published in the LA Times that documents an increase in the number of small businesses offering their employees health insurance coverage. The increase began shortly after the tax credits to small business kicked in. We kept hearing all through the HCR debate from both Franco and M & K Retrievers that this bill was going to cause businesses to drop offering healthcare to their employees. We heard that businesses would much rather pay the penalty than offer coverage to employees. Although the relevant penalty provisions do not take effect until 2014, the tax credits (being marketed heavily by insurance agents as an incentive to companies) is bringing them on board. It seems like smart businessmen are finding a way to profit from HCR rather than bitching and crying woe is me (see the quote from Ron Rowe in the article below). You can find the article at the link below.

    http://articles.latimes.com/2010/dec...erage-20101227

    Republicans better hurry up and get this thing repealed before too many people get insurance coverage and end up getting ticked off when the rug gets pulled out from under them when their employer loses this tax credit! M & K, you better get out there and beat the bushes hard and market this tax credit to your potential and current clients before your competition beats you to it!


    More small businesses are offering health benefits to workers

    The increase is partly attributed to a tax credit created by the nation's new healthcare law. Some insurers are aggressively marketing the break, which can offset up to 35% of a company's costs.

    December 27, 2010|By Noam N. Levey, Los Angeles Times

    Reporting from Gladstone, Mo. — Major insurers around the country are reporting that a growing number of small businesses are signing up to give their workers health benefits, a sign of potential progress for the nation's battered healthcare system.

    The increase, although not universal, has brought new security to thousands of workers, many of whom did not have insurance or were at risk of losing it.


    An important selling point has been a tax credit that the nation's new healthcare law provides to companies with fewer than 25 employees and moderate-to-low pay scales to help offset the cost of providing benefits. The tax credit is one of the first few provisions to kick in; much of the law rolls out over the next few years.

    "We certainly did not expect to see this in this economy," said Gary Claxton, who oversees an annual survey of employer health plans for the nonprofit Kaiser Family Foundation. "It's surprising."

    For insurers, the market presents a big opportunity. Nationally, three-quarters of businesses with 10 to 24 workers offer benefits. About half of those with three to nine employees provide health plans. By comparison, 99% of firms with more than 200 employees offer benefits.

    Now some insurers are reporting significant jumps in coverage.

    In the six months after the law was signed in March, UnitedHealth Group Inc., the country's largest insurer, added 75,000 new customers who work for companies with fewer than 50 employees. The Minnesota company called the increase notable but declined to reveal further details.

    Coventry Health Care Inc., an insurer in Maryland that focuses on small businesses, signed contracts to cover 115,000 new workers in the first nine months of this year, an 8% jump.

    In California, Warner Pacific Insurance Services in Westlake Village, a major servicer of insurance brokers, has seen business grow more than 10% this year, a company executive said.

    And Blue Cross Blue Shield of Kansas City, the largest insurer in the Kansas City, Mo., area, is reporting a 58% jump in the number of small businesses buying insurance since April, the first full month after the legislation was signed into law.

    The independent nonprofit insurer has been particularly aggressive in marketing the new tax credit, which can mean a discount of as much as 35% for very small companies with low payrolls.

    One of the biggest problems in the small-group market is affordability," said Ron Rowe, who oversees small-group sales for the insurer. "We looked at the tax credit and said, 'This is perfect.'"


    Rowe said that 38% of the businesses it is signing up had not offered health benefits before.

    When the law was signed, the company partnered with H&R Block to create a website for small businesses to calculate how much they can save with the tax credit.

    [more at the link above]
    Last edited by Buzz; 01-07-2011 at 07:51 PM.
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    Senior Member dback's Avatar
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    Folks seem to be avoiding you Buzz......I'll jump in.
    This is too big of a monstrosity (IMHO) to give a simple thumbs up/down, so I'll not give an opinion but would like to give two 'real life' events in our lives, for thought.

    1) I think most here know I own a small company (under 15 employees). In the past 4 years, on three occasions, I have offered to assist in acquiring health insurance for my employees. Each time they chose not to participate. A couple have insurance through their spouses employment and the rest are fairly young men with *wives* (none are legally married) with children. In Arizona, we have a state health insurance program (AHCCCS) that covers all medical expenses provided you don't make over $903.00 monthly (gross). Each of the *wives* and children qualify. I admittedly offered the health plans for semi-selfish reasons......

    because.........

    2) A couple of years ago, my wife was diagnosed with diabetes and her insurance company dropped her like a hot potato. We were unable to find insurance for her so I tried (in vain) to form a company group plan that would have taken her. Having no success with acquiring any insurance for her, we made the conscience decision to have a large cash reserve hoping to make it to Medicare/Medicaid before catastrophe struck. We could have divorced, thereby qualifying her for AHCCCS but chose not to do that. We gambled, we lost.....we are looking at a heart procedure that will far outpace the cash reserve. Soooo.......yesterday, we applied for the new (Jan. 1st, 2011) PCIP program which will take affect for her Feb 1st.

    My wife and I are not open for discussion here.....I am simply pointing out that there may be good and bad in this thing. It is such a huge government expansion that I'm not sure how it will all shake out or how I feel about it in total. I do know that I have a problem with (in some cases) illegals being covered by AHCCCS for this procedure and we were unable to find coverage.
    Last edited by dback; 01-07-2011 at 10:32 PM.
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    [QUOTE=dback;729335]Folks seem to be avoiding you Buzz......I'll jump in.
    This is too big of a monstrosity (IMHO) to give a simple thumbs up/down.....

    Now THAT is the most intelligent thing I have seen in print about the HCR Act!

    Read the news this week.....LOTS of reports about significant increases in premiums too. I believe the average increase in CA was 59% for the Blues Brothers (BCBS). Gonna be interesting....

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    Senior Member M&K's Retrievers's Avatar
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    Quote Originally Posted by Buzz View Post
    There is a new article published in the LA Times that documents an increase in the number of small businesses offering their employees health insurance coverage. The increase began shortly after the tax credits to small business kicked in. We kept hearing all through the HCR debate from both Franco and M & K Retrievers that this bill was going to cause businesses to drop offering healthcare to their employees. We heard that businesses would much rather pay the penalty than offer coverage to employees. Although the relevant penalty provisions do not take effect until 2014, the tax credits (being marketed heavily by insurance agents as an incentive to companies) is bringing them on board. It seems like smart businessmen are finding a way to profit from HCR rather than bitching and crying woe is me (see the quote from Ron Rowe in the article below). You can find the article at the link below.

    http://articles.latimes.com/2010/dec...erage-20101227

    Republicans better hurry up and get this thing repealed before too many people get insurance coverage and end up getting ticked off when the rug gets pulled out from under them when their employer loses this tax credit! M & K, you better get out there and beat the bushes hard and market this tax credit to your potential and current clients before your competition beats you to it!
    Yeah, Buzz I'm getting rich talking to all those employers who think they are gonna get something for free. And how about all those employers who have 10 employees but only want to cover 3 of the sick ones after they find out how much it costs. And how about my existing clients who are bitching about the rate increases caused by Obamacare. A lot of my competition has said "screw it" and moved on to other product lines. I'm too friggin old and have no inclination to change what I do for a living so I have to hang in there trying to explain to people whats going on. At least I may earn a commission from those folks but I don't earn a penny trying to explain anything to you. Buzz, are you good as an electrical engineer? Probably so. Why don't you stick to it and stop being a newspaper expert in an area you know nothing about and have no expertise?

    Stick to what you're good at regards,
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    Senior Member duckheads's Avatar
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    I own a small business and our premium is going up 15% Feb 1. So I will be checking my option for raising our deductable to $5000 to off set the price increase. I personally pay $100 a week out of my check for my portion and that is only 40% of the cost. It doesn't matter what kind of tax break you get if you if you are not making any profit. But you don't have to worry about that do you Buzz. Just show up to work and put in your eight hours. I need to be working on increasing my business not spending time at the accountants, getting qoutes for insurance or dealing with all of the other cramp because of the government and their new laws. I will be talking to my accountant today. I will see what kind of tax break I will get. These tax breaks all sound good until you found out exactly how it all plays out and you end up getting squat and on top of that you have to pay more in accounting fees because the tax code is so f'd up and complicated.

    Buzz, I did not see anything from the agents about how the insurance companys have cut their commisions in half because of Obamacare. You ever work on straight commission Buzz? I am sure you haven't. Not many have. I have and I am glad I am not selling insurance at this time. My agent is older and has primarily sold small group health coverage and is now going to have to start selling other coverage to make a living. So while your article may paint a rosey picture my agent doesn't seem to be so excited about Obamacare and his prospects for making a living selling small group health coverage. Call me a right winger but I will take the word of my agent whom I have had coverage with for over twenty years over some newpaper article from the left coast!
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    Senior Member M&K's Retrievers's Avatar
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    Quote Originally Posted by duckheads View Post
    I own a small business and our premium is going up 15% Feb 1. So I will be checking my option for raising our deductable to $5000 to off set the price increase. I personally pay $100 a week out of my check for my portion and that is only 40% of the cost. It doesn't matter what kind of tax break you get if you if you are not making any profit. But you don't have to worry about that do you Buzz. Just show up to work and put in your eight hours. I need to be working on increasing my business not spending time at the accountants, getting qoutes for insurance or dealing with all of the other cramp because of the government and their new laws. I will be talking to my accountant today. I will see what kind of tax break I will get. These tax breaks all sound good until you found out exactly how it all plays out and you end up getting squat and on top of that you have to pay more in accounting fees because the tax code is so f'd up and complicated.

    Buzz, I did not see anything from the agents about how the insurance companys have cut their commisions in half because of Obamacare. You ever work on straight commission Buzz? I am sure you haven't. Not many have. I have and I am glad I am not selling insurance at this time. My agent is older and has primarily sold small group health coverage and is now going to have to start selling other coverage to make a living. So while your article may paint a rosey picture my agent doesn't seem to be so excited about Obamacare and his prospects for making a living selling small group health coverage. Call me a right winger but I will take the word of my agent whom I have had coverage with for over twenty years over some newpaper article from the left coast!
    Thanks, duck for pointing this out. I've noted this a few times in other threads. Buzz doesn't give a hoot about the agents. Hell they are part of the problem. The evil insurance industry that tries to make a profit providing a product. Buzz and the rest of the liberals think this crap should be free.

    I have found in the past 35 years that the ones that complain the most about health insurance, rate increases, etc. are usually the ones who have benefited the most from the system.

    A close friend and client of mine was complaining over the holidays about the rate increase he is getting 1/1/11 on his group that covers 12 employees. He pays 100% of the cost and is concerned how long he can continue to provide coverage. In the past 3 years his company has paid $150M in premiums and BCBS has paid over $190M in claims. He had no idea. He thought that BCBS was cutting a fat hog off his plan. He still doesn't like the rate increase but as a businessman he has a better understanding. BCBS didn't cancel him or give him a huge rate increase. He got the pool increase. The increase based on the profit/loss of the entire block of business in Oklahoma for groups 3-50 employees plus the adjustments necessary to provide compliance with Obamacare. Had his increase been based on his group alone, he would have gotten hammered.

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    Quote Originally Posted by duckheads View Post
    I own a small business and our premium is going up 15% Feb 1. So I will be checking my option for raising our deductable to $5000 to off set the price increase. I personally pay $100 a week out of my check for my portion and that is only 40% of the cost. It doesn't matter what kind of tax break you get if you if you are not making any profit. But you don't have to worry about that do you Buzz. Just show up to work and put in your eight hours. I need to be working on increasing my business not spending time at the accountants, getting qoutes for insurance or dealing with all of the other cramp because of the government and their new laws. I will be talking to my accountant today. I will see what kind of tax break I will get. These tax breaks all sound good until you found out exactly how it all plays out and you end up getting squat and on top of that you have to pay more in accounting fees because the tax code is so f'd up and complicated.

    Buzz, I did not see anything from the agents about how the insurance companys have cut their commisions in half because of Obamacare. You ever work on straight commission Buzz? I am sure you haven't. Not many have. I have and I am glad I am not selling insurance at this time. My agent is older and has primarily sold small group health coverage and is now going to have to start selling other coverage to make a living. So while your article may paint a rosey picture my agent doesn't seem to be so excited about Obamacare and his prospects for making a living selling small group health coverage. Call me a right winger but I will take the word of my agent whom I have had coverage with for over twenty years over some newpaper article from the left coast!
    Selling insurance is a tough way to make a living. Seems folks either make it big or bust in that business. That notwithstanding, the problems with healthcare were around long before health care reform. Sounds like the reform may be a bust for some, others a blessing. Isn't that how everything works in this world?

  8. #8
    Senior Member Buzz's Avatar
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    The newspaper expert strikes again...
    From Politico

    Investors see health law's potential
    By: Sarah Kliff
    January 13, 2011 12:18 AM EST

    SAN FRANCISCO – As Republicans push forward on repealing health reform, planning the law’s demise, a different conversation is happening among thousands of health care investors gathered in San Francisco for this week’s J.P Morgan Health Care Conference: how to capitalize on health reform’s new business opportunities.

    The Congressional Budget Office estimates 32 million Americans will gain health insurance by 2019 if the law stands. For health insurers, that represents a potential boon for both their individual market business as well as in the Medicaid market, where states regularly contract with private insurers to manage care.

    “The worst is behind them,” says Ipsita Smolinski, president of Capitol Street and senior advisor to McKenna Long & Aldridge, of the outlook for health insurers. “There was so much uncertainty last year. But with the MLR and rate review regulations out, investors know they have a pretty viable future.

    “There was initially a concern among investors that health reform would kill their business model. Now, that hasn’t happened.”

    To be sure, health insurers still face an uncertain market, with numerous new regulations expected to come online in 2011. Numerous business groups deride health reform as a budget buster. Just this week, Chamber of Commerce President Tom Donohue reaffirmed the group’s opposition to the health reform law, calling a repeal vote “an opportunity for everyone to take a fresh look at health care reform and to replace unworkable approaches with more efficient and effective measures that will lower costs, expand access and improve quality.”

    But investors say they’re increasingly optimistic on health insurers’ future for two crucial reasons: regulations released this year have been relatively industry-friendly, increasing stability, and the health reform’s new business opportunities are beginning to look more tangible.

    “As it stands today, we still have compressed valuations because of uncertainty, but that is rolling off as we get more clarity,” says Les Funtleyder, a portfolio manager with Miller Tabak Advisors, LLC . “Combined with continued strong performance related to health care growth cost trends means stocks should benefit.”

    At the J.P. Morgan Health Care Conference in San Francisco this week, major health insurers outlined the major expansion opportunities they see in the health reform law.

    Aetna is exploring how to capitalize on the individual market, expected to boom in 2014 when Americans must purchase health insurance or pay a fine.

    “We have major efforts underway to strategize on how to take advantage of those opportunities,” said the insurer’s CFO, Joseph M. Zubretsky, in a presentation to health investors. “We’re clearly understanding the risks…but with millions coming on to the health exchanges, one needs to not only balance risk but really understand the opportunity for growth that exists in this market place.”

    “We’ll really be ready for the individual market as it evolves,” Humana CEO Michael McCallister said. “We’re likely to have 51 flavors of this.” In the wake of the health reform law, Humana sees opportunities both in its Medicare and individual market products.

    Medicaid also presents serious growth opportunities. The program will expand to cover everyone below 133 percent of the federal poverty line and, as the Wall Street Journal first reported, insurers are actively pursuing contracts with states to manage their Medicaid plans. As Aetna’s Zubretsky put it, “Medicaid is going to be a critical component of our business model with 17 million joining that program.”

    Molina Healthcare, a company that has a large book of business in Medicaid, listed the millions of Americans who will become newly-eligible for Medicaid as a “health reform growth opportunity” in an investor presentation.

    Over the past year, there has also been a noticeable shift in rhetoric, as insurers that had previously warred with the administration signaled a willingness to play nice in 2011.

    Wellpoint spent much of last year sparring with the Health and Human Services Secretary Kathleen Sebelius over a double-digit rate hike and policy recissions, at one point writing a letter to President Barack Obama accusing the president of spreading “false information.”

    Speaking on Monday, CEO Angela Braly framed health reform as a collaborative project with the Obama administration.

    “We’re working collaboratively with the administration and intend to continue to do so,” she said. “We have brought to them input both from our voice and our consumer advisory group, and they give us a lot of feedback. Our job is to work very carefully with the administration and Sebelius to get the answers to our consumers.”

    For their part, Wellpoint has found the new regulations manageable. While they expect the new medical loss ratio regulations, which require insurers to spend at least 80 percent of premiums on medical costs, to have a negative impact on their business, it won’t be unmanageable.

    “We’ve sized about a $200 to $300 million headwind taking our existing book of business and overlaying the MLR rules,” Wellpoint CFO Wayne Deveydt said. “We’ll modify commissions paid to brokers… Brokers will continue to be viable but there’s a shared responsibility [for the new regulations].”

    Other insurers echoed the point: health reform regulations released so far, while not ideal, are not going to be the industry’s worst enemy.

    “I don’t think at this point, anything in the process has been impossible or too difficult to work with,” Jay Gellert, CEO of the California-based Health Net, told POLITICO in an interview. “There are a bunch of big issues, and how well we face those will determine whether this is a success. I think there is a developing sense among all the parties, a constructive sense and realization, that the future remains to be defined.”

    Health insurers spent barely anytime discussing Republicans’ repeal efforts. Aetna’s Zubretsky touched on the subject briefly only to say that Republicans understand that a rifle shot approach to tearing out specific health reform provisions, particularly the individual mandate, would not bode well for their business.

    “The unintended consequence of repealing and replacing part of the legislation is the biggest risk here,” he said. “If guaranteed issue stays but the enforceable mandate disappears, you need another mechanism to make the costs in the risk pool work.”

    Zubretsky said Aetna has been in touch with the GOP on the issue and “believe the Republican leaders we’ve been talking to understand the consequences of decoupling the mandate from the guaranteed issue.”
    Last edited by Buzz; 01-13-2011 at 08:11 PM.
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    Senior Member sinner's Avatar
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    You guys drive me nuts!
    Please answer these questions.
    Why provide health care benefits for your employees at all? Why have it for you and your family?
    Have you looked at productivity of those with chronic disease or acute health care problems. What are your turn over rates or absenteeism rates?
    Do you provide wellness programs? Do you practice prevention yourself.
    Have you had any problems with your insurance providers? Who should decide if a procedure is covered?
    This is what he was all about!:
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