Blog – Bill’s Focus

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ROI – does that stand for Really Old Information?

 

Although you might sometimes think that, actually it is an acronym for Return on Investment. In fact it is an important concept even in areas you might not have considered it.

 

Today I saw on advertisement by an insurance company selling a positive ROI from having healthy employees by providing voluntary benefits. I agree but would also like to make the case for using an employer paid STD benefit instead of voluntary. As most employers will have noticed a workers compensation event can have a very negative impact on what is referred to as your MOD number.

 

The problem here is that employees who do not have coverage for life, disability, and medical events may feel compelled to have those things occur while they are working. If you haven’t already you might want to consider an employer paid disability plan.
An employer who implements a short term disability program for all employees might well see a reduction in minor workers comp claims. We sometimes refer to these as weekend warrior injuries that miraculously show up on Monday as workers compensation claims. The coverage is relatively inexpensive and if it allows you to control an increase in your mod factor I think you will find it well worth considering.

 

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What is this drug formulary thing in the Affordable Care Act?

 

You never notice some cars until you own one and the they seem to be everywhere? Well you will be hearing about “Drug Formularies” a lot more and then realize they are all over the place. And — you are impacted!

 

A drug formulary is a list of drugs your medical plan will agree to pay for if you need a prescription. In the “formulary”, or list, there will be drug categories that might all be similar and come from different drug companies.

 

Your insurance provider agrees to provide a type of drug (not a brand) and then they decide which drug company provides that treatment at the lowest cost. That means your favorite brand, the one you see on television all the time, might not be included.

 

Under ACA (Obama Care) drug formularies got more complicated because the “cost” to provide medical care is really the problem and limiting drug usage and prescription cost is another place to reduce overall cost to the system. Note that I said cost to the “system” not your cost!

 

So in addition to “network size”, “Exclusion lists” and “if” you will get a subsidy payment, you need to look at the drug formulary for any plan you might consider to provide medical care insurance coverage. It could be a tragedy if you choose a really inexpensive plan and then find out it does not cover for the new DNA based prescription you need.


For more information call Bill Weaver, 602-381-9900!

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OK I am confused, will Obama Care work or not?

 

Well the question is not will it work because everything works, just not always the way you want it to, or thought it would.

 

ACA, or Obama Care, has always been intended to produce what is called a single payor system that provides medical coverage for every American Citizen. So if you ask “Does Medicare work?” because it is a model of a single payor system, the answer would be “Yes”. You really need to be asking other questions to get the answers you need.

 

How about “If Medicare has been working for so long why would’t it work for everybody?”

 

For many generations Medicare had a slowly increasing enrollment, a human life span planned for about age 70, and a baby boomer population that was paying taxes to the system. That changed dramatically in the last three years.

 

Now Medicare has baby boomers by the tens of thousands who are entering the Medicare system, and they essentially stop paying into the system and start taking money out.

 

AND – we all live longer now so people take more money out of the system and for a longer time. That longer time now includes age 100 more frequently.

 

If you have ever been unemployed you know how fast your savings account disappears when your income stops. That is the dilemma Medicare faces right now. Lots of bills to pay and not enough income to pay them.

 

So how to fix that? How about we just take all that money people pay to insurance companies and make them pay it to Medicare. We could call that the Affordable Care Act so people will like it because everybody like affordable care. And if we do it to everybody the young people will pay more than they use in services and it will all turn out peachy!

 

As Dr. Phil says “How’s that workin for ya?

 

The US has a birth rate below replacement (not enough tax payers) and young people don’t want to participate (not enough enrollment) anymore now than they ever have. So revenue is not coming in fast enough to offset the rapidly increasing claims cost of the seniors.

 

Will Obama Care work? Of course it will work, payment for services will have to go down, drug formularies will have to remove expensive drugs, physician PPO lists will have to be reduced, and (wait for it) premium cost will have to increase.

 

Apparently I am late to the party with this notice because I see that all of that has already begun to happen.


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One of our initial questions for a new client is “Will you be looking for real health insurance or the appearance of health care insurance?”

 

Silly question you might say because who actually wants the “appearance” of insurance? Actually more times than you might expect a client may respond “I really just need to show I got coverage.”

  • Wellness programs – some employers just want to say they did it?
  • Job requirement – contractors sometimes just need to check a box on a bid form saying they have a coverage.
  • Car insurance – using personal auto coverage for a commercial vehicle.

There are more examples but I think you get the idea.

 

The typical reason for taking the “appearance” approach is to save premium dollars for a coverage or benefit the client sees no real need for, and that they do not ever expect to use for a claim. “There was this box on a form asking if I have that coverage so I just said yes to get the work!” I would tell you that is just asking to waste insurance money and set yourself up for disaster.

 

It is important to understand that insurance is a contract to accept risk not a product like your car tires or new cell phone. Under the contract the insurance company agrees to do specific things if a “covered” event (risk) occurs. Risks that have not been included are not covered and it really only matters when the claim is for more that you could ever hope to pay for.

 

When you purchase the “appearance of insurance” you typically get a contract that is much cheaper but also has been severely limited to achieve that lower cost. That does not mean these policies may not have value it only means you need realize the restrictions and then not be surprised when an event is not covered.

 

For more information, contact Bill Weaver, Focus Benefits Group,  602-381-9900.
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Does  Insurance pay this? How many times a day do health care providers and insurance people hear that question?

 

This morning I was at the Gym and I heard a woman ask the receptionist if a yoga class would be covered by her insurance because if it wasn’t she was not taking the class. The receptionist responded – “No. The Stupid insurance companies don’t really pay for anything!”

 

Ignoring the absurdity of asking your insurance company to pay for yoga classes:
Do you ask the Mechanic “Will insurance pay for this?” for an oil change?

 

Do you ask at the grocery store grocery “Will insurance pay for this?” When looking at vegetables and doughnuts?

 

These may seem silly but in my health insurance practice I have been told more than once a mother will not get a treatment for a child unless it is covered by insurance. One mother (with HMO coverage) complained she could not get health care for her children. She was complaining on her new I Phone she took from her Coach purse while holding a Starbucks Latte. Her son needed a shot required for school admission.

 

There is a disconnect in the discussion of this topic in our everyday conversation, the national media and our elected representatives. It goes like this!

 

“The cost of health care is out of control we have to limit the insurance companies!”

 

“Insurance cost” is a symptom and “health care cost” is the problem. You may not be able to afford the Mayo Clinic but that does not mean health care is not available to you. And now healthcare coverage is available to everybody who wants to apply for it.

For more information contact Bill Weaver, Focus Benefits Group, 602-381-9900!

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