Medigap is looming issue for senior citizens

Probably few Michigan senior citizens are focused on what their Medigap health insurance premiums will be in 2016, but they should be.

For state residents receiving their Medigap coverage from Blue Cross Blue Shield of Michigan, their  rates will be frozen under state law through July of 2016. After that, all bets are off.

BCBSM’s status was changed a year ago when the legislature approved its request to become a non-profit mutual insurer. That was in preparation for the new market realities under the Affordable Care Act, in which BCBSM would no longer need to function as Michigan’s insurer of last resort.

The new status for BCBSM basically enables the company to compete on a level playing field. It is now — except for the Medigap exception through July of 2016 — just like any other health insurer.

But according to an attorney who specializes in issues affecting senior citizens, the Medigap issue looms like a voracious shark.

“We currently have approximately 200,000 Michiganders on BCBSM Medigap Legacy plans with most paying $121.22 (for Medigap Plan C) per month, per person regardless of age, residence, body mass, etc.” for BCBSM Medigap coverage, said Christoper W. Smith, who is with the Jackson office of the law firm Chalgian & Tripp. “Blue Cross’s rates quickly jump up to $250-plus a month per person in comparable, non-subsidized plans and much more for those age 80 and over,” Smith said.

“Say Blue Cross increases the rate to $250.  That would be a monthly increase of $129 per person ($250-$121). Over 12 months, that’s an increased cost of $3,096 a year for a married couple to keep similar coverage,” Smith said.

Before BCBSM’s status changed, Michigan residents had protections against such increases unlike those in  almost any other state.

“We were really lucky to have that plan in Michigan,” Smith said, referring to BCBSM’s Medigap Legacy plan. “Michigan had exceptional Medicare coverage.”

For its part, BCBSM believes the competitive market will ultimately determine the desirability of offering all health products, including Medigap, according to Helen Stojic, director of corporate affairs for BCBSM and the Blue Cares Network.

“For example, Medicare Advantage is a competitively priced option that exists in the marketplace today,” Stojic said. “Given that we expect the market will be much more competitive for this particular product in 2016 than it is today, there's little reason as it stands today to think that we wouldn't offer Medigap.

“Additionally, Public Act 4 allows the nonprofit health endowment fund to establish a needs based subsidy program for Medigap and provides $120 million from Aug. 1, 2016 to Dec. 31, 2021 for that purpose.”

“Any way you slice it, BCBSM got one heck of a deal last year,” Smith said.  

“That frustration aside and being realistic about political realities, I am most concerned about three groups:  1) those under 65 where insurers do not have to offer a Medigap policy; 2) retirees who have their retirement plans cut and are outside their ‘guaranteed issue period;’ and 3) people getting stuck with unsustainable price hikes by his or her insurer and being unable to switch insurers due to underwriting.  These are the groups that some other states have enacted legislation to protect,” Smith said.

Smith said a majority of states have statutes that guarantee that an individual under 65 can get a Medigap plan.  Social Security Disability recipients are eligible for Medicare after two years.

“The Affordable Care Act provides no protection to these individuals,” Smith said.   Many of them rely on Medicaid for supplemental coverage, costing taxpayers, Smith said.

Smith also said the legislature could act to ensure that retirees who have pension plans that are substantially cut or eliminated have a guaranteed issue period to get a Medigap plan.  

“Every week, I receive calls from individuals concerned about cuts to their retirement health plans. For many, they may not be able to get an affordable Medigap plan because of medical underwriting and related factors when their plans are cut.  We would ideally enact legislation that protects these individuals who delayed getting a Medigap plan because he or she understandably relied on his or her former employer providing coverage,” Smith said.  Smith also said the the BCBSM Legacy plans would have been an affordable solution for many Detroit retirees facing possible cuts in benefits from Detroit’s bankruptcy.  Detroit’s bankruptcy is currently in the federal courts.

“The legislature could also enact an 'annual enrollment period' where each year — often the month of a person’s birthday — a person can switch insurance providers and/or  switch to a Medigap plan that provides less coverage, but is more affordable.  This would ensure that most individuals are not priced out of the Medigap market by their insurer as they get older,” Smith said.

He noted that until 2016 the Blue Cross Legacy plan is the same price no matter how old you are, something that is called a community rated plan.

“In 2016, we may no longer have a true community rated plan in Michigan,” Smith said.

Smith said he hopes these issues will be raised in the 2014 state elections. Senior citizens ought to be bringing such concerns to their lawmakers and state candidates.

Dealing with Obamacare as reality

Now that the Healthcare.gov website is working, and people are signing up for and receiving health insurance, Obamacare is moving from the theoretical to the practical.

Put another way, it is here to stay.

That it needs to be improved is obvious. The question is whether voters will reward Republicans who continue their Johnny-One-Note approach of insisting that the law be repealed.

How would repeal affect those who are now insured under provisions of the Affordable Care Act?

It was only a couple of words, but there may be significance in former Republican U.S. Sen. Scott Brown’s admonition on Fox News Sunday to “fix Obamacare, period.”

There is a big difference between fixing the Affordable Care Act and repealing it.

Fixes might include:

1) Introducing a basic government insurance program, an idea referred to as the public option when the program was debated in 2009 and 2010. Somehow, in the midst of the complexity of the issue, this might prove to have real public appeal.

2) Further lowering eligibility requirements for Medicaid, thereby guaranteeing insurance for more people who still can’t afford it on the Healthcare.gov exchange. The last few months prove, if nothing else, that the public is finally realizing how expensive health insurance is, and how much it costs their employees.

3) Increasing subsidies for individual insurance and lowering penalties for employers when the employer mandate kicks in 2015. This would encourage employers to drop group insurance plans and move the country to a more logical insurance system that embraces individual responsibility.

4) Lower the eligible age for Medicare to 62, thereby encouraging more early retirements and opening up employment opportunities for younger people.

The question is whether the Republicans will participate in the debate and bring some constructive ideas to the table. They have long blathered about how great the world would be if insurance companies could compete across state lines.  It has been documented that this assertion is not true, but why not talk about it.

It pays to know what the opposition is up to, and Democrats may yet be rewarded for at least tackling the health coverage issue, because most people don’t really want to go back to the way things were. 

 

Renewable energy proving affordable

Consensus appears conceivable as Michigan moves toward updating its energy policy with 2025 in view.

Groups are generally applauding the principles Gov. Rick Snyder enunciated recently.

Snyder spoke in broad terms. He favors energy efficiency, expanding renewables, replacing coal, affordability and fewer and shorter power outages.

Mom’s apple pie would be nice too.

The legislature is expected to begin drafting policy as the clock runs out on Michigan’s current renewable energy standard in 2015.

Meanwhile,  the wisdom of bipartisan policies agreed to by the Michigan legislature and former Gov. Jennifer Granholm in 2008 continues to manifest itself.

 Michigan customers of DTE Energy will be getting a reduction on their utility bills following Michigan Public Service Commission  approval the utility’s plan to slash its renewable energy surcharge by 85 percent, bringing the fee down from $3 to 43 cents per month.

Earlier this year, Consumers Energy reported to the MPSC that it would eliminate its renewable energy surcharge completely.

This proves that the big utilities were able to expand reliance on renewables without unduly burdening ratepayers. To be sure there has been grumbling about rates from both residential and commercial users but no pronounced outcry. Cleaning up the environment carries a cost, but not that huge a cost, as it turns out.

DTE was able to reduce the surcharges due to the declining price of wind energy, which is now cheaper than all other forms of energy.

The contours of what promises to be a spirited debate over energy policy are shaping up following statements by interested groups.

“Gov. Snyder discussed and is rightly concerned that our high utility electricity rates harm residential homeowners, discourages growth, business expansion and job creation and also make Michigan uncompetitive in attracting new business and industry,” said Wayne Kuipers,  executive director of Energy Choice Now.

“While no specific recommendations to solving this problem were laid out in his comments today, the Legislature has already taken steps to bring relief to consumers with the introduction of House Bill 5184,” Kuipers said. That measure would lift Michigan’s cap on alternative energy suppliers, which incumbent utilities were granted in 2008 so they could cope with the cost of moving to renewables.

“Michigan’s current cap prevents most Michigan customers from using competition to lower their electric bills electric rates, which are by far the highest in the Midwest and well above the national average,” Kuipers said.

For more information about the Michigan Electric Customer Freedom Act,  visit: www.MIEnergyDashboard.com.

 Leaders of the Michigan Conservative Energy Forum  praised  Snyder for leading the state’s transition toward greater use of clean, renewable energy and energy efficiency, which it said will improve national security, protect public health and create jobs and economic opportunity.

“By leading on energy policy, Gov. Snyder is paving the way on issues that are important to conservatives, albeit for different reasons than those of environmental advocate,” said Larry Ward, executive director of the Michigan Conservative Energy Forum. “Michigan manufacturers, researchers, engineers and scientists are creating the next generation of state of the art wind turbines, solar panels as thin as paper, and new generations of vehicles that use less and additional forms of energy. Because of his background, Gov. Snyder understands technology, and therefore that any state energy policy must have the flexibility to anticipate opportunities to leverage future advancements.”

“We applaud and support Gov. Snyder for his leadership on this important issue,” said Keith den Hollander, chairman of the Christian Coalition of Michigan. “It’s no secret that Washington is not going to tackle energy policy. All Americans, including people of faith, need our Governors to pave the way. It’s archaic in this millennium to think that Michigan still gets nearly 60% of our electricity from coal – which we pay to have shipped in. Expanding Michigan’s use of clean energy will build upon our manufacturing strength, talent and know-how, encourage innovation and put Michigan workers back on the job.”

“We are too dependent on foreign energy — sending a billion dollars overseas every day, often to countries that are hostile to America and our way of life,” said Hank Fuhs, long-time secretary of the Michigan Republican State Committee and 31-year veteran of the Michigan Air National Guard, retiring as a Lt. Colonel. “By transitioning away from imported coal to clean, renewable energy produced here, we can improve our energy security and save lives — 10 percent of the casualties suffered in Afghanistan and Iraq were at the expense of transporting fuel or protecting fuel lines.”

 More information about the Michigan Conservative Energy Forum can be found at: www.facebook.com/michiganc

Expand Michigan Schools of Choice program

Michigan’s  Mackinac Center for Public Policy has come up with a great idea: Expansion of the state’s Schools of Choice program..

About 100,000 students in Michigan attend a public school other than the one to which they are assigned through the program, a 144 percent increase from a decade ago, according to a new study conducted by the center. http://www.mackinac.org/19448

“The fact is that nearly as many students choose a different conventional school district over their own as do those who choose charter public schools,” according to Audrey Spalding, director of education policy and author of the study. “We found that parents utilize Schools of Choice to send their students to districts that have higher test scores and higher graduation rates.”

The study also includes policy recommendations to help give students access to better options by easing restrictions on geography and funding, and limiting districts’ ability to pick and choose incoming students. Currently, Schools of Choice is only permitted between districts within an intermediate school district or one that is contiguous. About 80 percent of Schools of Choice students attend another district within their own ISD.

“This geographic limitation should be eliminated so that students would be free to attend any district outside of their own that they wish,” Spalding said. “Districts should also be able to open schools outside of their current boundaries.”

Spalding cites the West Bloomfield and Clintondale districts, each of which enrolls more than 1,000 Schools of Choice students, saying “It’s certainly possible they could make use of the ability to open a school in the community of non-resident students they serve.”

We’re learning about health insurance

Suddenly America is talking about health insurance at the kitchen table and in the living room.

It’s not just the pros and cons of the Affordable Care Act that we are discussing but substantive issues like how much health insurance costs, deductibles, pre-existing conditions, mechanics of how to obtain it and what’s covered.

Senior citizens are accustomed to this as they discuss ins and outs of supplemental coverage and Medicare’s prescription drug coverage among themselves, and have been for years.

While there is plenty of talk about dissatisfaction with ACA’s rollout, people are more concerned about how it affects them and what their own situation is or may be in the future.

What people are not doing is  sitting around talking about how to repeal Obamacare. Most people realize the law is here to stay and they want to make the best of it. To be sure, they are free with their suggestions about how the law can be improved, but most acknowledge that something had to be done about our health insurance system in this country.

The point is, people are thinking and learning about the issue. This is a good thing. It means people will come to grips with the high costs, realizing, among other things, what a valuable benefit they are receiving from their employer, is they are so fortunate. They might also begin to realize how much it costs their employer to provide such benefits, and how perhaps their employer could expand the company and hire more people except for the burden of health insurance.

From there, it’s an easy transition to start seeing that there must be a better way.

Then perhaps people will realize that the Affordable Care Act has launched us on the way to reform. Certainly it will need changes, but we are at least started on the road to a better system.

(For a helpful discussion about employer-provided insurance see “Health Care Costs And The Third-Party Payer Problem.”)

Our disgraceful Congress

The words of the famous four-line Latin poem by Phaedrus come to mind:

 “A mountain had gone into labour and was groaning terribly. Such rumours excited great expectations all over the country. In the end, however, the mountain gave birth to a mouse.”

This is an apt description of the bipartisan budget deal proposed by U.S. Sen. Patty Murray and U.S. Rep. Paul Ryan.

The best they could do was offer $23 billion in deficit reduction over 10 years while allowing the current $17-trillion national debt grow by trillions more in that same period.

Our lawmakers ought to be embarrassed. Instead, they are celebrating!

The agreement does prove several things: 1) Neither Democrats nor Republicans are serious about dealing with the national debt;  2) Democrats oppose any kind of spending reasonable spending restraint; 3) Republicans may offer some resistance to domestic spending increases but want to continue to waste money on the military in exchange for votes; 4) Republicans would not trade even modest tax increases for serious deficit reduction.

You can always see who the winners and losers are in such a deal — if we can call it that. Democrats are more apt to embrace it than Republicans. That is the advantage of holding the White House.

Voters ought to consider giving one party control of both branches of Congress in the 2016 election. A divided Congress is getting us nowhere.

Republicans, Democrats — and a Third Way

The death of moderation is one of the most unfortunate facets of our current political scene.

Readers ought to check out the Third Way website. It would have to characterized as a center-left think tank, which ought to give those in the center-right some hope for sane resolution of some of our key issues if the Republicans cease to be a viable alternative to the Democrats.

There are some — not many, but some — signs that at least a significant minority of Democrats in Congress are open to stances that run counter to the hard left that governs the party. The most prominent recent example, of course, is the defection of 39 House Democrats from lockstep support for Obamacare.

Now it is true that the alternative they voted for, a measure introduced by GOP Rep. Fred Upton of Michigan to remedy recent health insurance cancellations, was fatally flawed. But in a rational world, the openness of these 39 lawmakers could lead to common-sense changes in the law that would actually benefit people.

Here are some excerpts of thinking featured on the Third Way site, written by Jim Kessler and Jim Cowan:

“If you talk to leading progressives these days, you’ll be sure to hear this message: The Democratic Party should embrace the economic populism of New York Mayor-elect Bill de Blasio and Massachusetts Sen. Elizabeth Warren. Such economic populism, they argue, should be the guiding star for Democrats heading into 2016. Nothing would be more disastrous for Democrats.

“While New Yorkers think of their city as the center of the universe, the last time its mayor won a race for governor or senator—let alone president—was 1869. For the past 144 years, what has happened in the Big Apple stayed in the Big Apple. Some liberals believe Sen. Warren would be the Democratic Party’s strongest presidential candidate in 2016. But what works in midnight-blue Massachusetts—a state that has had a Republican senator for a total of 152 weeks since 1979—hasn’t sold on a national level since 1960.

“The political problems of liberal populism are bad enough. Worse are the actual policies proposed by left-wing populists. The movement relies on a potent “we can have it all” fantasy that goes something like this: If we force the wealthy to pay higher taxes (there are 300,000 tax filers who earn more than $1 million), close a few corporate tax loopholes, and break up some big banks then—presto!—we can pay for, and even expand, existing entitlements. Meanwhile, we can invest more deeply in K-12 education, infrastructure, health research, clean energy and more.

“Social Security is exhibit A of this populist political and economic fantasy.”

This is great stuff. You owe it to yourself to check it out. It’s nice to know that there is more out there than Ted Cruz and Rand Paul in response to extreme left-wing Democrats.

Sell artwork to pay creditors

Something seems out of perspective as we consider selling a very small portion of the artwork in the Detroit Institute of Arts to raise money to pay off some of Detroit’s bankruptcy victims.

The choice is simple: Cut someone’s promised pension benefits or sell city-owned artwork.

Why aren’t we instead asking why any city should have been in the art business to begin with?

Politicians can grandstand all they want to about what a shame it would be to transfer prized pieces of art from the public domain to someone’s private collection. But if that’s the sentiment, perhaps the museum can take up a collection from those people who want to keep these prized pieces  in the DIA to buy the treasurers from the city.

And for the record, the art we are talking about — the city-owned pieces — constitute only 5 percent  of DIA’s collection. To be exact, the city owns 2,781 of the museum’s entire collection of 66,000 works. The city owned portion could raise between $452 million and $866  million, according to Christie’s auction house.

If all of this means Oakland and Macomb counties withdraw their support from the museum as a result, so be it.

People need to understand the nature of a bankruptcy, since municipal bankruptcy is a new concept to all Michiganians. The people, in the form of the city government, made more commitments than they were able to honor. Therefore, grownups have come along to manage the City of Detroit and force it to sell off some of assets so it can pay off  its hapless creditors.

Generally in a bankruptcy, the creditors get much less than they are owed, sometimes only pennies on the dollar. It is up to the bankruptcy judge to determine how much.

If you say the artwork should not be sold — and bear in mind DIA could buy it if the DIA or its patrons could afford it — you are basically saying that there should be $452 million to $866 million less given to creditors — like pensioners on fixed incomes — whose only crime was to place their faith in the city of Detroit and its taxpayers.

This is not rocket science folks. There is a downside when you don’t pay your bills.