A recent story on CNN Money mentioned that states could face a $12 billion shortfall if Congress doesn’t pass a bill to help them out. Four states in particular will see shortfalls in money of more than $1 billion each.

While this is a scary figure, especially with the way the economy is working, it seems no one has attempted to explain why there’s such problems with Medicaid. I’m going to answer that question for you, or at least give you an idea of what states are up against, and I’m going to base it on New York, the state where I live.

First off, the problem certainly isn’t how medical entities are paid. To use the easiest term most people will understand, Medicaid pays on a fee schedule. This means they pay a certain amount for procedures and services. That’s pretty much how most insurance companies pay claims, just so you know. In Medicaid’s case, many payment amounts haven’t changed in more than 30 years. However, if you’re a hospital in New York, you must accept both Medicare and Medicaid patients, so hospitals end up losing a lot of money because of Medicaid.

About 15 years ago or more the state added a new feature where they threw in co-pay amounts that patients “had” to pay. That money was taken from the payments medical facilities received, since now they were supposed to get it from the patients. However, that came with a caveat; if a patient told you they couldn’t pay, you had to write it off and you couldn’t bill the patient for the balance. And you were supposed to ask them while they were in the hospital, or any other medical facility. The co-pay amount for the most part is only $3, but multiply that times a couple of million people who probably go for services more than once a year and it all adds up. Anyway, this part is just to show that states aren’t losing money because they’re paying out too much to hospitals or physicians.

What’s the problem then? The problem is in administering the program. It’s unwieldy and unmanageable, both because of the way the state runs it and because of the people who are on Medicaid, though for the second, probably not for the reasons you might expect.

In New York, every county has its own Medicaid program. The way Medicare is run is that the federal government contracts with different companies throughout the country to administer the program in certain states. Medicare is considered a federal program, whereas Medicaid is considered a state program. So, every county has to have people to staff those offices. And sometimes, there are multiple offices handling different aspects of each program. So, there’s a lot of duplication of bodies, which means money gets eaten up fairly quickly.

What the state has allowed are Medicaid HMOs, which seems like a good idea except for a problem I’m going to mention now, and a problem I’ll mention later. The “now” issue is that those insurance companies running Medicaid HMOs must have at least one competing insurance company in the state. Otherwise, subscribers don’t have to select a HMO at all, which almost renders them useless in some counties. The reason there aren’t many HMOs is because the money they’re given to try to handle claims is pretty low, and the best a HMO can hope for is that there’s a significant number of people they’re paid for that decide not to use any services. That doesn’t happen often, however.

Medicaid also funds programs through the Department of Social Services whenever they see a need for something extra special. For instance, in Wayne County, there’s a special program for migrant workers that travel into the area to help pick crops, yet don’t speak English. In Westchester County, there are special programs that pay for specific types of things such as psych services or chemotherapy, especially if you’re an undocumented worker. Payments still aren’t great, but it all takes a drain on the money available.

Now, let’s talk briefly about the subscribers. Something not generally known is that probably half of Medicaid subscribers are fairly transient; they move around all the time for whatever reason. And they don’t tell the DSS that they’ve moved, which is problematic in the first place, and then gets worse when they move to another county, because there’s no true state system where someone can just go in and update one system and have everything working great. Subscribers are told they need to go to the local office and do it all over again; that’s an ugly way to do things.

Subscribers are encouraged to sign up for Medicaid HMOs in those counties that have multiples, but they’re also told that they can drop it at any time and sign up with another one. That’s an ugly process as well, as it takes a lot of manpower hours switching people all the time. And when it comes to authorizing services, it can get uglier still.

There’s more detail I could get into, but I’ll stop here. This should be enough information to have a basic understanding of why Medicaid programs might be in trouble. What could states do? I’ll offer only this one bit of advice; standardize the process and have fewer outside offices, which will reduce the number of people needed to do everything, and potentially reduce the amount of paperwork. States have to be willing to move Medicaid services into the 21st century.

You’d think that at this point all conversations about the health care bill would be over. Seems that the discussions are just beginning, and there are two big issues that suddenly are garnering a lot of attention.

The first is the new requirement that kicks in come 2012. It requires any business or person that pays more than $600 in services or supplies to fill out 1099s and report it to the government, as well as making sure to send them to those who provided the services. Not only is this going to create a lot of paperwork for everyone involved, but it’s going to ruin things for people like me, a consultant who does a lot of things for a lot of people for different rates. Suddenly someone paying me $100 a month for a small service is supposed to create a 1099 for me, even if they’re not a traditional business.

But it’s going to impact someone like me in another way as well. Here’s what was reported as an example:

“Under the new rules, if a freelance designer buys a new iMac from the Apple Store, they’ll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.”

This is where it’s going to get ridiculous. Any capital purchases I make for my business I’m now supposed to send them a 1099. My biggest purchases are computers here and there, but there’s always the possibility that manuals I use for business could get close to that amount, and that’s scary. I’m wondering if this also means that, since Staples is my office store of choice, that if I reach $600 in purchases from them in a year that I need to send them a 1099; can you imagine?

The reason for this is so the federal government can verify that it’s getting all the dollars it’s supposed to be getting for health care. A Democratic aide for the Senate Finance Committee defended the move saying “Information reporting improves tax compliance without raising taxes on small businesses. Health care reform includes more than $35 billion in tax cuts for small businesses… indicating that during these tough economic times, Congress is delivering the tax breaks small businesses need to thrive.”

Okay, that’s the first issue. Here’s the second. It seems that some large corporations have been taking a look at this bill and actually trying to determine if it would be more cost effective to stop providing health care for all of their employees and just pay the penalties instead. Some have found that, indeed, it would save them money up front, yet they haven’t pulled the trigger on it. Four companies records were subpoenaed, AT&T, Verizon, Caterpillar and Deere, and the figures were so shocking that it was decided not to hold an open hearing on it, for whatever reason.

It’s a scary proposition across the board because the health care bill is depending upon large employers to continue covering employees, and probably never really considered that companies might find it more beneficial financially to just pay the fines. It’s estimated that if 50% of the companies decided to follow through with it that it could cost the federal government at least $160 billion a year more. Of course, many large companies have unions to contend with, so part of this could be a moot point, except that not everyone is in the union.

Two more reasons why I say the health care bill needs to be overhauled.

I predict you’re going to be seeing more of this type of thing over the next year, and it’s probably about time.

There’s a battle going on in the lower New York state area between Empire Blue Cross and a hospital group calling itself the Stellaris Health Network, which is a joint venture of four local area hospitals: White Plains Hospital Center, Lawrence Hospital Center in Bronxville, Phelps Memorial Hospital Center in Sleepy Hollow and Northern Westchester Hospital in Mount Kisco. This consortium wants more money and reimbursement from Empire; Empire doesn’t want to pay.

The consortium’s argument sounds a lot like my position on some of these things. Hospitals are hurting, while the parent company of Empire, Wellpoint, had record profits in 2009. They were even singled out during a Congressional hearing for raising premiums while living the high life. Empire’s position is that paying the hospitals what they’re asking for, which is a double digit increase over what was paid in 2009, would make them have to raise rates on all their subscribers even more than what they did raise them.

Usually these things sort themselves out, but not always all that fast. So, what’s happening here is that any patients who are members of Empire and decide to go to these hospitals will end up paying more out of pocket expenses, because the hospitals aren’t going to accept whatever the insurance company decides to pay in full. Empire’s response is to send out a list of other hospitals in the area that they’re still participating with and encouraging patients to go there instead. The problem with that is that some physicians in their network don’t have admitting privileges to some of these other hospitals, which means some patients would have to switch physicians to get proper care.

One of the problems with things like this is that enrollment periods are usually annually, January through December, while contracts with insurance companies are usually signed around April 1st. It’s all a convoluted mess, something else that most people have no clue about and need to consider when they’re trying to decide whether a federal health care reform program is a good thing or not.

By the way, I’m supporting the hospitals on this one because no matter what happens, health premiums are going up next year anyway, and there seems to be little oversight in just how much premiums go up.

Health care took a major beating last year in this country. Sure, I understand that the first thing the President should have concentrated on is the economy, most specifically jobs. I also understand what his position was on health care. I don’t know that either he or the Democrats in Congress explained well enough what the issues were, and the other side didn’t even try. They just wanted to beat it down because it was a Democratic proposal. Sure, I thought what was presented later on was lacking, and probably not the best plan in the world, so I’m not upset it collapsed. But at some point we need to seriously consider health care for all in this country.

Why? Two big things have come out over the past week, and both trump my recent post on Medicare Advantage Plans.

The first concerns Wellspring in California, which is also known as Anthem. It was reported that there’s going to be a rate hike of their premiums that could be as high as 39% for some of their subscribers. What they’re blaming it on, oddly enough, is that more younger people have dropped insurance coverage because it was too expensive or they just determined they didn’t want it, which leaves less money for those who are left, who are supposedly sicker, so they need to raise more money. This is a moronic thing and for them to think anyone believes it is insulting. The why it’s insulting is contained in the next paragraph.

The second thing that came out this week is that across the country, health insurers enjoyed 56% profit margins while the rest of the country’s industries suffered drastic losses. The five largest health insurers enjoyed profits of $12.2 billion. Wellspring, whom I mentioned above, recorded a profit of 91%; you saw that right, 91%!. You can bet they didn’t pass any of that money on to hospitals, otherwise it wouldn’t have been profit. And the number of people they stopped covering dropped only 3.9%; doesn’t seem like much of an offset, does it? This has prompted a call for the CEO of Wellspring to show up and talk to Congress as to how they can justify all of this.

By the way, Wellspring wasn’t even the biggest profiter in the group. Cigna’s profit increased, ready for this… 346%! Humana “only” increased a measly 61%.

I ask one more time, you sure you don’t want any kind of health care reform?

Did you think we were done talking about health care?

A report came out this week saying that, on average, Medicare Advantage plans across the country had gone up an average of 14.2% over the past year. Although my first response is “yawn”, because I’m used to seeing those kinds of jumps o a regular basis for traditional insurance, Medicare Advantage plans don’t usually go up as fast, only increasing 5.2% last year.

For the uninitiated, Medicare Advantage plans are insurance coverage for seniors that goes above and beyond traditional Medicare coverage, or at least that’s the idea. Instead of just sticking with Medicare, which all seniors qualify for (well, that’s not exactly true, but it’s true enough for the moment), a senior can decide to pay a little bit more for an Advantage plan to hopefully gain coverage for services that Medicare might not pay for, such as foot issues. They may also reduce inpatient deductible amounts that Medicare recipients have to find the money to pay.

Medicare in general has one major rule for coverage, that being that a patient must always be getting better in some fashion. Medicare doesn’t pay for maintenance services. If a patient gets physical therapy coverage, has 10 sessions, then the therapists writes that a patient is as good as they’re going to get, but could maintain mobility with more physical therapy, Medicare won’t cover any more physical therapy, but an Advantage plan might.

Still, even with the government ponying up some of the money for the Advantage plans (oh yeah, since these patients opt into the private plan instead of Medicare, the government pays the insurance company some money to help defray the costs, which is why the plans are attractive to both patients and the insurance company), thus helping to keep the amount seniors have to pay down, seeing that there was such a dramatic increase last year points out just how much health care coverage costs are rising, and why some were hoping for an overall government health plan although, to be truthful, it might not have made much of a difference for seniors.

This is why the debate on overall health care coverage in this country still continues.

Every once in a while you read something in your first reaction is “what the heck”. This is one of those stories.

It was reported this week that cigarette makers are trying to find a way to keep the federal government from going to the United States Supreme Court to ask them to uphold racketeering charges against cigarette makers who, for decades, the negative effects of cigarette smoking and decided to keep it quiet rather than warn people about the dangers of smoking. All of this comes on the heels of the federal government finding cigarette makers more than $280 billion in fines and having the lower court determined that the federal government probably didn’t have the right to collect this money. This is strange because the judge had also found that the cigarette makers really were in violation of withholding this evidence.

Anyway, the cigarette makers seem to be winning right now, which begs the question why are they so worried about this case going to the Supreme Court. After all, the Supreme Court is mainly filled with conservatives, and it would seem that they would be the favorites in winning a 5 to 4 decision in their favor once again. At the same time however, the cigarette companies are actually appealing to the Supreme Court to get the racketeering charges overturned. This turns into a very interesting Catch-22 situation.

You might be asking what this has to do with finances. The top two things that federal government have to deal with as it pertains to paying money into health care programs for people concerned smoking and diabetes. The problem with smoking is that it is a known contributor towards both lung cancer and target=”_blank”>emphysema, two diseases that once you’ve been diagnosed for you can overcome. As a matter of fact, cigarette smoking is responsible for 90% of all lung cancer deaths, and something close to that for emphysema. This puts a strain on services such as Medicaid in trying to treat people, says lower income people tend to smoke more than people who have higher incomes.

The idea behind the government trying to get the larger pot of money is so they can use that money to distribute to the states to help take care of people who end up having smoking-related illnesses. Personally, I have no sympathy for any company whose products main purpose is to hurt somebody. Sure, someone could try to equate smoking with eating sweets, but there is not even a close comparison. Eating sweets did not relate directly to diabetes; smoking does relate directly to both lung cancer and emphysema. In treating people for both of these diseases cost more than it does to treat people with diabetes, and the diseases caused by smoking are more terminal than anything related to sweets.

No one has any real idea where all of this is going to come out in the end, but my overall hope would be that the cigarette companies will own up to the responsibility they need to show to the American public and the rest of the world and the knowledge Inc. that they withheld information that they knew that their product was killing people and that they will eventually do the right thing. I just don’t have that warm and fuzzy feeling that they will.

You never know where you’re going to find good information. On a blog called But You’re A Girl written by a young lady named Adria Richards was the video I’m posting below that addresses just what’s in the new health care bill, or at least the Senate version. It’s pretty good, and it’s easier to play the video than try to explain everything otherwise. All that, and you get to look at a cute dog from time to time. Learn, enjoy, and thank Adria:

It’s tough being a liberal, wanting a national health care plan, not thinking it could get done, then when it seems it’s done not liking many things about it. That may be a bit much, but there are enough things I don’t like about it that I already know, and trust me I haven’t read the more than 2,000 page report so I might hate even more later on.

What’s good about it? This is the easy one. A majority of people who don’t have health care coverage now will finally have something, and most of the coverage they’ll get will be comparable to health care plans that everyone else who has health care now has. What I haven’t seen is whether there will be deductibles or copays for services, and how they’re going to handle prescription drugs, but the plan says that people will be able to go to whichever doctor they so choose. I wonder if that means no referrals from a primary care provider will be needed for things such as physical therapy and diabetes treatment. I guess we’ll see.

What’s bad about it? Here are 5 gripes I have with the plan as it is known right now:

1. It’s going to hurt the middle class. Didn’t President Obama run on a platform that said any health care bill he signed wouldn’t hurt the middle class? No, it’s not going to hurt everyone, but the people it’s going to hurt the most are middle class. Individuals who don’t have insurance will have to pay a yearly penalty of either $950 or $3,800, depending on whether they’re single or in a family. That’s a lousy deal, no matter who you are.

2. It’s going to hurt small businesses. Now, I’m not one of those people who believes companies shouldn’t be covering their employees as far as health insurance is concerned, but I don’t know that I like some parts of this provision. For instance, though it states businesses of more than 50 employees, the federal government overall considers small businesses as any that have fewer than 200 employees. Also, did you know there’s a new provision that was added that states construction companies get penalized if they have more than 5 employees? At $750 a pop for the year it won’t break the bank, but it’s inherently unfair to isolate one industry like this, even if that industry has had to be reigned in by many states for its lackluster worker’s compensation record.

3. It’s still pricey. Here’s the deal. If you fit in an income class that’s higher than Medicaid but lower than the government’s arbitrary rate, you’ll get your coverage for free. However, if you have to pay into it, it’s going to cost you around $400 or so a month. So, that’s $4,000 a year as opposed to that $3,800 family penalty, but if you’re an individual in good health where’s the deal? It doesn’t take into account medical savings plans that many independent business proprietors have, which pretty much makes medical savings accounts for these folks moot. Yes, they’ll still be able to write off medical expenses over $400 a year, but that doesn’t quite seem balanced.

4. There’s still no plan for electronic medical records (EMR). Has anyone heard any government official talking about EMR lately? This is something President Obama has talked about wanting and having to be in the health care bill, but I haven’t heard anything about it. Of course, my gripe with it is that it’s easy saying all hospitals and physicians must have it. It’s hard for them to help identify just how such a process is supposed to be rolled out, especially in rural areas where neither the hospital nor the physicians have either the money or the technical expertise to get it done.

5. Absolutely no bipartisanship whatsoever. Yeah, I’ll say it, this one is the Republican’s fault totally. Sure, they didn’t want anything to begin with, but to only have one Republican who even participated in the talks, that being Olympia Snowe of Maine (female senators from Maine have always been contrary; gotta love them for that), is a darn shame. It was a farce seeing Orrin Hatch on TV last week saying he wished there had been more bipartisanship on this bill; you have to be in the game to have a chance to play. I keep wondering if things might have played out differently if Bill Frist, who not only was the previous Republican leader of the Senate but a medical doctor by trade, would have had a much different impact on how things played out as the minority leader and one of the few people with a health care background.

I actually do have a number six, that being that almost no health care professionals were a part of this conversation. I’m thinking that the American Medical Association, the American College of Healthcare Executives, the American Association of Healthcare Administrative Management, the Healthcare Financial Management Association and a few independent health care consultants in finance and revenue cycle matters would have really improved what’s on its way.

So be it. Those are my gripes with this bill. I will only say that I hope this bill is enough to overcome medical bankruptcy filings and offer more people quality health care, while not hurting the states.

A recent survey conducted by Price Waterhouse Coopers (PWC) asked hospitals what was the most important thing for them to do in 2010. The number one response was to cut costs.

As soon as my mind saw that, one word immediately popped into my head: “Still?”

Many people believe hospitals are making money hand over fist. The reality is that the overwhelming majority of hospitals are barely scraping by these days because of the consistent cuts to Medicare and Medicaid, lower reimbursement from insurance companies, and more defaults on paying hospital bills because more people are out of work and can’t pay any bills, let alone health care bills. Who remembers earlier this year when it was announced that 60% of bankruptcies were the result of medical bills?

I’ve been in health care for more than 25 years, and since the mid 90′s, every hospital I’ve been at has bee working hard to find new ways to cut costs. Some moves have been way wrong, while others have reduced the type of care patients get. For instance, most hospitals used to have a plethora of registered nurses (RN) and licensed practical nurses (LPN) and the work was divided up nicely so that LPNs took care of patients while RNs took care of all the administrative stuff, but could also take care of patients. Then, because RNs could do so much more, some hospitals started eliminating LPNs and making RNs handle way more work. This meant that instead of a nurse maybe being responsible for 4-7 patients suddenly some nurses were responsible for as many as 20 patients, and still had to try to keep up with all the other work they have to do. Who suffers? Patients.

HealthLeaders Magazine also came up with a study recently showing hospital margins significantly below break even, though supposedly it was getting better. Substitute “budget” for “margin” and suddenly you realize that hospitals are running at a deficit when it comes to expenses versus revenue. At one point in 2007 50% of the hospitals in the nation were running below budget; by the 1st quarter of 2009, the figure had dropped to just below 30%. How have they done it? Pretty much by cutting expenses only. And that’s hard to do as the cost of health care keeps going up, especially pharmaceuticals and supplies.

In good times or bad times, hospitals overall struggle to stay above budget. At some point, cutting costs just isn’t going to get it done. With the pending full passage of health care reform, we’ll see what kind of impact it ends up having on hospitals.

Today the Senate Finance Committee voted against two amendments that were designed to create a government insurance program, which has been called the “government option” in the media. It wasn’t overly surprising that it didn’t pass. What was somewhat surprising is that the main guy trying to push health care coverage through, Senator Max Baucus, voted against it.

His reasoning was sound. He believed that with the public option on the table that the full bill wouldn’t be able to withstand a Republican filibuster, which would have pretty much killed the entire bill without a vote. He’s probably right, since there wasn’t a single Republican who was going to vote for it, including the one Republican who’s on the side of health care, Senator Olympia Snowe of Maine.

I haven’t talked much about whether I support a government health care plan or not. Truthfully, I’m of mixed emotions on it. On one hand, I think it would bring the cost of health care down a degree if insurance companies had to compete against a health care plan that offered lower premiums.

On the other, with all the other problems we’re having with the economy these days, and knowing that at a certain point there will be a tipping point where all health insurance will start going back up anyway, I’m not sure that’s the way to go. Not only that, but not everyone would be eligible for the government public option either. Larger companies with more than 100 employees wouldn’t be a part of the mix, and if insurance companies continued as they usually do, those companies would bear the brunt of higher premiums. Where would the benefit be there?

This must be said, though. The Republican claims that a government option would mean the government would take over health care is a lie, and they know it. Either that or they’re totally clueless, in which case they shouldn’t be senators. If we ever go down that route, as I’ve said in the past, there would still be insurance companies. So that one’s just a scare tactic.

Of course, I’ll still be mad at any health care plan that comes out with that provision about fines, which I think is a slap against the middle class. I hope that sucker is gone from the final bill; I’d hate to be on the side against it.

This is a guest post by Mary Ward

We’re all looking for simple ways to save money. And, for most of us, healthcare has been one of the costs rising the fastest. Since healthcare insurance is one of the items that families rely on most, we’re often faced with just accepting cost increases as they come. However, there are ways to save on your insurance premiums if you take the time to do the research and make changes as necessary. Here are some simple ways you may be able to cut costs on your health insurance premiums.

1. Shop around – if you haven’t evaluated other insurance options in a while, it’s time to do so. Even if you have employer provided healthcare, there may be more than one option available. If so, be certain to check it out before you simply sign up for the same plan year after year. And, don’t assume that the coverage options offered by your employer are the best or the least expensive. You might be surprised.

2. Talk to the company that provides your homeowner’s insurance, car insurance, or both. Many large companies that provide auto and homeowner’s insurance offer open enrollment healthcare coverage. If they can give you a discount based on the fact that you carry other insurance with them, you may be able to save money.

3. Investigate insurance available through groups you belong to – Your union or other professional group may offer group discounts to members or people in the same field. For senior citizens, AARP offers good and affordable healthcare coverage. It’s not just designed to be a supplement to Medicare – it’s great for those over age 50 who don’t have access to Medicare yet.

4. Review your coverage – It’s important to review your healthcare coverage periodically to ensure that you’re not paying for coverage you don’t need.

5. Switch to a high deductible plan – The higher your yearly deductible, the lower your monthly premiums. By choosing a higher deductible on your health insurance, just like your car insurance, you may be able to save a lot of money on premiums.

6. Add catastrophic coverage – Adding catastrophic coverage may allow you to reduce your other coverage, saving you money overall. Because your catastrophic kicks in on a major medical event, you may need less coverage on your primary policy, which is where most of your premium costs go.

7. Get healthy now – Make no mistake that down the road we’ll be paying more in health insurance premiums if we are higher risk. In fact, it’s already happening in some places. So, if you need to lose weight or if you smoke, take care of those issues immediately. It will lead to reduced premiums (and better health) in the long run.

Healthcare insurance is a hot topic in the US right now. While much of what we hear on the subject is simply rhetoric, we can hope that, over the long haul, we’ll all gain better health insurance at lower cost to us. In the meantime, do your homework and make sure you’re getting the best health insurance deal for your family right now.

Mary Ward is a freelance writer and likes writing about medical education topics, such as how to research and choose among online X-ray tech schools, how to apply for online college grants, and more. I thank her for this post today.

There was one major surprise that came from the health care bill being sponsored by Senator Max Baucus of Montana, and it’s the one thing that could scuttle the entire bill. It wasn’t the price tag of $856 billion either.

It was the provision that stated if people didn’t buy into it, they would be fined. Individuals would be fined $950, families would be fined $3,000.

What the heck? I know anyone who read this had to feel blindsided. This isn’t what anyone was expecting to come out of a health care plan that was intended to take care of people who couldn’t afford it. Oh yeah, if you can prove you can’t afford it, you won’t have to pay the fine, but in a backdoor way, you just hit the middle class, who were the major group that didn’t have any health care, the folks the bill was really for in the first place. In essence, they’d be paying for health care, whether it’s $3,000 or some other figure, which I’ve been unable to find, whether they wanted it or not.

And that’s not all. I don’t really have much of a problem hitting up insurance companies with surcharges, although we all know they’d just pass it on to the rest of us. I do mind that the bill would also hit up hospitals, which in many states are non-profits and are already paying out money to the states through a series of surcharges (since non-profits aren’t supposed to be taxed, they came up with “surcharge” to get around it), while at the same time still planning on reducing reimbursements of both Medicare and Medicaid.

Nope, I hate this bill, and from what I’m reading, a lot of Democratic senators also hate this bill. What could this guy be thinking, putting out a bill that, for lack of a better word, penalizes people in this fashion? This may be one time where many Democrats and Republicans will join in agreement in the Senate, at least the first time I can think of since President Obama has been in office.

How would you like your health care? Not like this.

It was reported today that the annual increase in health insurance has risen by an average of 5%, and that’s supposed to be a good thing since we’ve pretty much gotten used to yearly increases in double digits. This means that the average cost for family coverage is now over $13,000 a year. It’s a good thing that employers foot a big part of that bill.

Want to talk about that health care plan again that the government is working on? You might, as only 60% of employers are paying for health care for their workers, down from 66% in 1999, and around 40% of employers still carrying insurance are going to be passing more of those costs on to their employees.

It’s strange to hear this from me, but actually, a 5% increase isn’t such a bad deal. Think about it this way. If you actually had to go into the hospital as an inpatient, you’ve actually made out for the year as far as your health insurance is concerned. The people who actually lose the biggest on health care each year are those who go for minimal services and have a deductible to pay. This means they’re not only paying for health coverage, but for some early treatments as well, without it ever turning the corner.

I hate deductible plans, but that’s how some health care costs are kept down. It’s even less expensive than those plans where you pay a $15 or $20 co-pay, and they’re usually a lot more flexible as to which doctors you’re able to see.

The biggest cost once again is pharmaceuticals, and there’s not really much that can be done about that. The population is getting older, and it just seems it’s what we need to take. Of course, someone like me doesn’t help, as I’m diabetic, and all my supplies and medications are covered in full. I’m a type 2 diabetic, but also overweight; yeah, I’ll own up to that. So, I really get the benefit from our health insurance, as does my wife for maladies I’m not going to divulge.

One more thing. For someone who’s not necessarily on the side of insurance companies all that much, having a modest increase of 5% in a recession where companies are paying a lot less because of high unemployment is an even better deal than anyone could expect. Of course, this doesn’t mean you won’t walk into work one day in November and get hit with a 15% increase. The figure above is an average, and some areas are going to charge more for the privilege of health care coverage.

Still, it looks like the insurance companies are at least trying; I’ll give them a break for now.

As you know, I’ve written a lot of posts lately on the health care issue. On this blog, I’ve asked people what kind of health care plan they’d like; didn’t get any responses to that one. I talked about how the present health care plan out there could close hospitals. I talked about my fear of President Obama saying he’d consider taxing health care benefits to pay for his plan, and I also talked about prescription drug coverage problems.

All this time, I though that the public would kind of be scared at the numbers being thrown around; we were talking about $600 billion in cuts to fund a health care program that might cost over $1.5 trillion dollars. All this while taking money away from Medicare and Medicaid and worries about Social Security potentially running out of funds.

It seems I may not be on the same side of this topic as the majority; seems that way, I’ll say. In a survey that came out last week, the Times/CBS poll found 85% of respondents wanted major healthcare reforms and most would be willing to pay higher taxes to ensure everyone had health insurance. And 72% percent of those questioned said they backed a government-administered insurance plan similar to Medicare for those under 65 that would compete for customers with the private sector.

You could have knocked me over with a feather on this one. With the issue of jobs lost, the housing markets in disarray, unemployment still climbing, and people holding onto their money rather than going out and spending like crazy, I certainly didn’t expect numbers like this. I guess the one statistic that wasn’t in this report, but was in another report at the beginning of the month, was even more important. That statistic was that 62% of all bankruptcies came about because of medical bills.

Now, let me state my case for what seems to be kind of a flip-flop. I’ve always said that I believed our country should have healthcare coverage for all. We almost do; it’s called Medicaid. The problem with Medicaid is that not everyone falls into the levels to be included in the plan, and that still leaves a lot of people uninsured. More children are being covered because of special state plans, but not adults.

I never saw this country voting to let the government take over health care. When Hillary Clinton came up with her recommendation back in the 90′s, I knew she was right; I also knew she didn’t have a snowball’s chance of having anyone approve it. Even now, with a number like 85%, I don’t think it has much of a chance to pass, unless Minnesota finally gets itself together and puts Franken into the Senator’s seat he earned. That would get the Democrats to the magic 60, which could potentially put it over, since the House is already covered.

The entire dynamic of this country could potentially change with one vote pretty soon here. I guess the revolution that brought Barack Obama into the presidency is finding ways of overcoming other adverse issues that I personally thought were unattainable. Maybe I was wrong on part of this; we’ll see.

On my business blog, I wrote a post about the ranking some of our local hospitals are being perceived by people who have overnight stays. The numbers aren’t encouraging, with only one city hospital having a ranking higher than the national average of 64% and only two others in the region being over that figure.

That 64% is the standard for people and their satisfaction with health care is scary enough. This means that not even 2/3rds of the population in the nation feels that hospitals are addressing their needs if they have to stay overnight. Yes, I think a lot of it is just perception of the unknown, because until you’ve stayed in a hospital overnight (no, I never have) you’re not really sure what is supposed to happen while you’re there.

I have some knowledge of the process only because I have been able to ask these types of questions over the years when I was working in hospitals. That, and my father spent some days in a hospital overnight, and I got to see some of that.

Most people think that someone is going to be with them more often than they are. The expectation of patients is that a nurse or doctor will be checking on them at least once an hour; it’s not going to happen, unless you’re in the ICU. In many hospitals, in an attempt to cut costs, a nurse might have to keep an eye on upwards of 11 to 12 patients during the course of a 16 hour shift. Included in this is getting medications, wrapping patients up, writing in charts, etc. Some patients might only need a quick visit; others are going to need some time. With everything they have to do, there just isn’t enough time to see patients that often.

Same with doctors. Doctors have mastered the art of the quick visit for most patients, but they have a lot of patients to see also. They also have to deal with all these charts, talk to the nurses about their observations, and the like. Not only that, but then they have to go back to their practices and see patients who are coming for their appointments. They don’t spend their entire day in the hospital.

Hospital food; well, we’ve all heard how bad hospital food is. Actually, some hospitals have pretty good food, so that’s a misnomer. However, patients can complain about bad food, but instead, it’s bland food. There’s less salt and sugar in hospital food because of the reasons people are in the hospital. The diet plans are coordinated and the food is made, and sorry, but you’re not getting anything spicy while you’re in the hospital. Many people are dissatisfied with that, and I know if I were a patient, as picky as I am with food, that I’d be the same. I’d certainly be hoping someone who might visit me would sneak me in something good.

I’d like to address something else here, though. One of the comments on the post from my other blog was that it’s hard for people to be satisfied when they know that once they’ve been released they’ll be getting a big hospital bill. Actually, the majority don’t end up with super big bills, but even copays can be somewhat steep for one’s budget. Maybe some people are thinking about the costs of care they’re paying for and expecting a different level of care while they’re in the hospital; I’m just not sure about that one.

So, here’s the overall question; how would you like your health care? You only have a few choices:

1. Comprehensive care for everyone, and I’m willing to pay 75% of my income towards taxes to cover it (don’t gasp; either Switzerland or Sweden charges 85% taxes on income).

2. My health plan, which basically gives an extension of Medicaid funds and more usage of federally qualified health centers across the country towards more preventative care.

3. President Obama’s plan, which is basically forcing employers to pay for health insurance on one end, setting up its own version of an HMO for everyone else, cutting payments to both doctors and hospitals to help cover it, along with possibly taxing the health care benefits employers will be forced to get you.

4. Set up a tiered system like pharmaceutical companies are not doing, where there are levels of health care coverage at different rates.

5. Do nothing, leave everything as it is, allow insurance companies to not only up the rate of insurance coverage nearly 20% every year and, now, change the rules in the middle of the year when they’re not really allowed to do it.

Okay, there are variations of the above, but it’s now out there; pick your choice, then tell why you want that one. Or, if you have something drastically different, share that. Maybe we’ll come up with a health care plan on our own, one that’s affordable (well, my plan can, but I’m sure someone will find something about it they don’t like).

I’ve been talking a lot lately about health care issues here, but that’s where the news is taking me. This past weekend there was more news that came about, so here we go again.

President Obama, in his Saturday weekly radio address, stated that he’s looking to eliminate $313 billion in payments from Medicare and Medicaid, and wants total savings of $600 billion, to fund his new health care plan. My breath caught immediately after I heard it.

First, how it affects me personally. I’m a health care finance consultant. My business is to go into hospitals and help them figure out if they’re making as much money as they should be. Hospitals have been reluctant in 2009 to bring in consultants unless they’re in desperate need, wondering what was going to happen to their Medicare and Medicaid dollar. Now that they know, and it’s going in the wrong direction, that’s pretty much going to kill my consulting career in this field for this year.

Second, one of the administration officials afterwards came out and said that hospitals and doctors were making too much, weren’t being efficient, were being fraudulent, and that this would force them to fix themselves. He also said that hospitals and doctors would make it up on the back end, once the health care program went through, on volume.

Let’s look at that first one. Almost 80% of all hospitals in the country lost money last year. Hospitals have done nothing except work on efficiency for at least the last 8 or 9 years, ever since the Y2K debacle that was a lot of hot air and nothing else. Hospitals have less staff, fewer beds, and, for that matter, fewer patients; outside of the big cities, at least, where emergency room visits have skyrocketed. Emergency rooms lose money for hospitals unless patients are admitted; not enough ER patients fit the bill for admission, so hospitals end up losing even more money.

Let’s look at fraudulent. Yes, the RAC audits have found lots of money at many hospitals, but some of the tactics of auditors have been in question. They’ve actually stated that doctors should change the medical record in some cases, which is illegal, and they should know better. Also, there’s a lot of estimation that goes into these audits, which may or may not be an accurate view of overall competence. However, most hospitals don’t fight because of the triple damages clause if they challenge and lose.

Finally, let’s look at making it up on volume, something insurance companies have thrown at hospitals for years while reducing how much they’ll pay for services. Let’s make it simple. You make bread and sell it for a dollar a loaf. Someone comes around and says you’re making too much, so you’re going to get paid 80 cents a loaf, but you’ll get more people buying it. However, your expenses in making each loaf of bread happens to be 80 cents a loaf. You have two choices now; you either go ahead and keep making the loafs your way, making nothing, or you decide to skimp on something so that you can make a profit, but the quality of your bread will go down. Your quality goes down, who wants to buy your bread?

Anyway, I don’t like any of this one bit. I wish someone in the administration would look at my health plan for America, which costs less and is more on target with how I, as someone in health care, believes things may go. Even if my plan were doubled, it still costs way less than what the Obama Administration is trying to do. This isn’t going well at all.

Okay, I’ve seen this before and didn’t like it.

Last week, President Obama said that he’d take into consideration a health care plan that taxed health care benefits that presently are non-taxable, if needed to fund his universal health care program. This is the same plan that John McCain was pushing during his run at the office, which Obama ridiculed often, and I agreed with that stance.

Even though he’s not saying he’d go this route, even saying he’d consider it is a major step backwards, and something I surely don’t support. And, it seems, neither does the Republican party, which did support it under McCain, or at least gave the appearance that it would. What’s with all the political flip-flopping anyway?

Also, as part of this plan, it would mandate employers to purchase health benefits for its employees, or they’d be fined. Okay, let’s get this one straight. If companies don’t pay for benefits they pay a fine; if they do those benefits get taxed. If I were a business, I’d do some calculations and take the lesser of the two evils.

Here’s my take on it. Taxing health care benefits makes companies not want to offer it at all. If the fines are lower than the cost of covering everyone at a company, I know which direction I’d go in. Also, if companies decided they had to fund health insurance, they’d most probably go for high deductible plans, which means people would be paying out of pocket for most of their services, and thus goes the purpose for having health care coverage in the first place.

And, does this also mean that everyone else’s taxes suddenly go up? If you’re paying for a family plan and it’s costing you $250 every two weeks out of your paycheck, will it now cost you an extra $12.50, assuming the tax is 5%? It’s not exorbitant, but this isn’t what you elected people to do against you, is it?

This is the first thing that’s made me unhappy that I’ve heard from the President, and I think it’s a big deal. This one affects way too many people, and on top of that, the economy still hasn’t fully turned around, and there’s way too many people still out of work. Frankly, the timing is bad if they wanted to implement it, although I don’t think implementing this thing would ever have a good time.

I hope they don’t push this issue, and I hope President Obama remembers what he promised during the election and sticks with it. Even if applied universally, this would be unfair.

Yesterday I wrote about the problem of fake insurance plans taking advantage of people. Today I’m going in a slightly different direction, because many of these people, including myself, have insurance.

Back in January I wrote about the most important financial consideration being health care coverage. After a story came out yesterday saying that 60% of people who have been applying for bankruptcy have had some significant health care bills, even if they had insurance, I can certainly see that as being viable.

But some people are finding it hard to pay for their medications, and that’s kind of scary. Many insurance plans are now outsourcing their pharmacy to someone else, and, different than in the past, many of these companies are, with the blessings of their clients, changing the terms of coverage in the middle of the year, without patients having a chance to opt out. They set up tier systems of drugs to determine what will be covered and how, and the amounts of coverage change drastically depending on whether the pharmaceutical is in a high tier or not.

That’s problem one. Problem two is that drugs just cost more nowadays, and co-pays are getting higher. Things that used to cost a couple of dollars are now costing in the 20′s of dollars. If you’re talking one medication maybe you bite the bullet and pay it. If you’re talking multiple pharmaceuticals, well, now you’re going to have some issues.

In a MSNBC news story on the pharmacy cost issue, one man walked in with multiple prescriptions for multiple things, and had to pick and choose what he could afford to pay for, even though one of his drugs, the one that cost the highest was a heart medication, as he’d just gotten out of the hospital for a heart attack. And that’s one of the drugs he couldn’t afford.

Oddly enough, I know what it’s like and don’t know what it’s like at the same time. I’m diabetic, and my insurance covers diabetic supplies at 100%. However, we keep having problems with the pharmacy company that handles those claims, and at least every other month the pharmacy has to tell me that the insurance company has messed up the processing again and is trying to say I owe these exorbitant amounts for my medications. They eventually end up paying for it in full, but I’ve heard just how much my medications would be if I had to pay for them; insulin isn’t cheap stuff.

Unfortunately, there’s no real fix for this. Even in my idea for a health plan, I don’t talk about pharmaceuticals because there’s an animal that can’t be tamed. And don’t get me started talking about lab work (another blog post upcoming), which at least I did touch upon.

This is the cost of having great health care in America; we can keep ourselves alive and healthy, but only if we can pay for it; just like everything else.

This seems timely, especially since I’m now promoting eHealthInsurance at the top of my blog.

CNN recently did a news story on people who have been scammed by fake insurance plans. In these cases, people who were in dire health straits would look on the internet, find someone purporting to cover a certain area of the country, most probably the area where the people lived, signed up, started paying premiums, then when they finally had to go see a doctor came up empty. Not only no coverage, but no one had ever heard of them. Money gone, contract canceled, can’t talk to anyone; you’ve just been scammed.

I’m particularly sensitive to health care, as, in my main career, I am a health care consultant in the financial area, and even wrote my own idea for a health plan for America; no, the calls didn’t come. I hate seeing people get ripped off, and I hate that people still don’t seem to understand how to protect themselves when it comes to their financial needs concerning health care.

I can’t take care of everyone immediately, but I can offer some tips right now on how to protect yourself when you’re looking for insurance, or dealing with insurance companies.

First, no matter what insurance you have, whether you pay for it individually or belong to an insurance plan through your employer, your first step is always to contact your doctor, or the doctor you want to visit, to see if they accept your insurance, or participate with your insurance plan. These are two terms that pretty much mean the same thing. This says that they will bill your insurance for you, will accept payment from the insurance company, along with any adjustments they’ve previously agreed to, and will only bill you for the amount agreed upon with the insurance company.

Second, after you’ve checked with the doctor’s office on participation, call the insurance company to find out whether you need an authorization or not. Some insurance companies are sneaky like that; they say they cover something, then after you go to the doctor they say you were supposed to get an authorization up front. No matter what it is, verify this.

Third, with these “off brand” plans, make sure that what they’re not telling you is that you have to pay your doctor, then send the bill to them for them to pay you. This isn’t sneaky at all if they tell you up front, and it’s more to help you defer the costs of your medical bills than actually totally covering you like traditional health care insurance.

Fourth, and this should be a no-brainer, with any of these insurance companies that say they participate with all these physicians, ask them for a list up front before you pay them a single cent. If they say you have to sign up first, don’t do it. If they say “all of them”, don’t do it. If they say “covered in full” for everything, don’t do it. That’s just not how insurance works.

Fifth, and the most important piece, read everything you received. I mean it, from the first word down to the fine print, read everything. Don’t sign it until you do my first recommendation, but read everything. Even with eHealthInsurance above, which is more about finding insurance plans for you than having them as your insurance agent. Anyone they connect you with, read everything, get an understanding of how your medical claims are supposed to be processed, talk to your doctor, then decide how you want to proceed.

Your peace of mind will be priceless.

Today, President Obama held a White House summit on health care reform, which was one of the things he promised to do during his campaign. It was interesting because one of the things he said was this:

“Health care reform is no longer just a moral imperative, it is a fiscal imperative. If we want to create jobs, rebuild our economy, and get our federal budget under control, then we must address the crushing cost of health care this year.”

While it was impressive, as there were members from both parties there, along with groups that, in the past, have opposed such a thing but, at least seemingly, are now willing to talk about it, there was some ugliness lurking on the fringes. In this case, it was Rep. Zach Wamp, Republican representative from Tennessee, who had this to say about it:

“This is almost class warfare in order for him to be able to say everyone now has health care. Listen, healthcare is a privilege.” When asked to clarify his statement, he said “If you have cancer right now do you see it as a privilege to get some treatment?”

If you remember, I wrote in January how the most important consideration right now is health care. More people end up with credit problems because they can’t pay their health care bills. So, when people don’t get early care to try to prevent serious diseases and expensive treatment later on, it impacts everyone because those people will ultimately end up getting some kind of charity care, which could mean Medicaid, but in either case it either hurts the hospital, the people of the state in some fashion, or the country, which already has a problem with people not being able to pay bills.

Only people who already have money make statements like the one above. It’s my bet that when Rep. Wamp went into treatment for drug abuse back in the 90′s that someone else paid for his care, since he would have had to be too far out to be able to take care of it himself. People don’t decide they don’t want health care. Sometimes they decide to not accept it so that they can get all the money they can out of their weekly paycheck, but that doesn’t mean they don’t want it, just that they feel they can’t afford it. Young workers may feel they don’t need health care because they can be short sighted, but it doesn’t mean they don’t want health care.

Health care is not a privilege; it should be a fundamental right. That is, if we can afford it. And, truthfully, being in health care finance, I’m not sure we can NOT afford to at least try. I still believe Hillary Clinton was absolutely correct back in ’94; I hope President Obama, with his more open policy, will be able to get something through that will serve as many people as it possibly can.