New Obamacare exemptions make millions more eligible for catastrophic plans

Late yesterday the Obama administration announced that the millions of Americans who had their previous health insurance policies cancelled because they didn’t offer all the benefits required under Obamacare would be exempt from having to pay the tax for being uninsured, and would also be eligible to purchase what are known as ‘catastrophic’ health insurance plans.

Fans and foes of Obamacare are both weighing in with their take on this, and if you’re interested in hearing these opinions a quick glance at any news site will provide no shortage of commentary. I thought I’d offer something a little different, and talk about these catastrophic plans and how most people in them will be self-pay patients for most of their care.

Catastrophic health insurance plans were designed primarily for young people, with the idea being that the premiums would be more affordable but they would offer less coverage than the Bronze, Silver, Gold, and Platinum plans available on Obamacare’ exchanges. In fact, except for people given ‘hardship’ exemptions from Obamacare’s mandate to purchase insurance, only people who are under age 30 are able to purchase these plans.

The key feature of catastrophic plans is that they have a $6,350 deductible, pay for three primary care visits each year, and cover a variety of ‘preventive’ care such as immunizations. Other than that, people with catastrophic plans have to pay out of pocket for all other medical care until they meet the deductible, meaning most of them will be self-pay patients for all of their healthcare treatments.

In some regards the catastrophic plans aren’t all that different than the Bronze level plans available under Obamacare, most of which have deductibles in the $5,000 to $6,000 range and also cover three primary care visits and preventive care. Bronze plans may also have co-pays or co-insurance for some other services under the deductible.

The key difference is that because catastrophic plans were intended primarily to be filed with relatively young, healthy people, the premiums are fairly low compared to other options. I went to Healthcare.gov and checked out what premiums would be for a 29-year old seeking coverage in Fairfax, Virginia. The two least expensive options were both catastrophic plans, for $133 and $138 a month. The least expensive Bronze plan was $154 a month, with a $6,000 deductible.

I also checked out a few other areas where I’ve lived in the past. In Madison County, Iowa, catastrophic plans for a 29-year old start at $89 a month, compared to $131 a month for the least expensive Bronze plan with a $6,300 deductible. In Lincoln County, Oregon, catastrophic coverage is available for $131.86 compared to $145 a month for a Bronze plan with a $5,000 deductible.

So if you’re eligible for catastrophic coverage and aren’t sold on the idea of opting out of Obamacare and getting some alternative form of coverage, a catastrophic plan might be your best option. A few things to keep in mind, however:

Normally, pairing a health savings account (HSA) with a high-deductible, catastrophic-type of health plan is a great idea. Unfortunately, I didn’t see any catastrophic plans that are compatible with HSAs. I checked several states and did not find a single catastrophic plan that would allow people to put money into an HSA. If you were counting on tax credits through the Obamacare exchanges to help pay premiums, there are no credits available to those purchasing catastrophic coverage, only Bronze, Silver, Gold, and Platinum plans. Many, but not all, of the catastrophic plans I saw were HMOs, which tend to have the narrowest networks of all, meaning finding a provider who will take your insurance in the event you go through the deductible can be a problem.

Finally, two pieces of advice for the people who may be going from relatively generous comprehensive coverage to a catastrophic coverage plan.

First, while The Self-Pay Patient blog and book (available in e-book format on Amazon.com and Barnes & Noble at the moment, in paperback soon) most often describes and discusses things in the context of those without conventional health insurance, most of the providers, companies, web sites, and organizations featured here and in the book are just as beneficial to people with high-deductible or catastrophic plans. Bookmark the blog, and buy the book! It will be well worth your time and money.

Second, when seeing a doctor or having a procedure done, consider NOT letting the provider know that you have insurance. It can save you money.

This might seem odd, given that one of the benefits of insurance is supposed to be access to ‘negotiated’ rates that are typically lower than the ‘list’ price that is usually given to self-pay patients. But as readers of The Self-Pay Patient know, paying cash for treatment can often mean lower prices, at least if you shop for care.

Suppose someone with a catastrophic health plan needs a hernia repair surgery. I went to the web site Healthcare Blue Book to see what insurers are paying for laparoscopic hernia repair, and found that nationally the average is about $5,500. This is what someone giving their insurance card would pay for the procedure, because once you give a doctor or facility your insurance card, they are required to charge you that price.

However, if you go to the web site of the Surgery Center of Oklahoma, you’ll find that they offer hernia repair surgery for prices between $3,060 and $4,500. Depending on how friendly the local surgeon and hospital are to self-pay patients, it’s entirely possible that simply telling the doctor and hospital that you’ll be paying cash for your procedure and asking for a discount will get you a better price than if you give them your insurance card! If they don’t, plane fare to Oklahoma is probably less than the difference between the ‘negotiated’ rate and the cash price at Surgery Center of Oklahoma, or you might find a closer surgeon and facility using a web site like MediBid.

The drawback is that all or some of the cash price paid by you might not count towards the deductible. For most people that isn’t going to be too much of a problem, because they’re not going to get anywhere near their deductible.

The decision by the Obama administration to give ‘hardship’ exemptions to people having their existing plans cancelled, allowing them to purchase catastrophic health plans or avoid having to pay the tax for being uninsured, will almost certainly increase the number of Americans that are self-pay for some or all of their healthcare. This could lead to significant savings for many of them, especially if they understand how to get the most value for their healthcare dollars as a self-pay patient.

President Obama’s Top 10 Constitutional Violations Of 2013

By Ilya Shapiro

Forbes 12/23/2013

One of Barack Obama’s chief accomplishments has been to return the Constitution to a central place in our public discourse.

Unfortunately, the president fomented this upswing in civic interest not by talking up the constitutional aspects of his policy agenda, but by blatantly violating the strictures of our founding document. And he’s been most frustrated with the separation of powers, which doesn’t allow him to “fundamentally transform” the country without congressional acquiescence.

But that hasn’t stopped him. In its first term, the Administration launched a “We Can’t Wait” initiative, with senior aide Dan Pfeiffer explaining that “when Congress won’t act, this president will.” And earlier this year, President Obama said in announcing his new economic plans that “I will not allow gridlock, or inaction, or willful indifference to get in our way.”

And so, as we reach the end of another year of political strife that’s fundamentally based on clashing views on the role of government in society, I thought I’d update a list I made two years ago and hereby present President Obama’s top 10 constitutional violations of 2013.

1. Delay of Obamacare’s out-of-pocket caps. The Labor Department announced in February that it was delaying for a year the part of the healthcare law that limits how much people have to spend on their own insurance. This may have been sensible—insurers and employers need time to comply with rapidly changing regulations—but changing the law requires actual legislation.

2. Delay of Obamacare’s employer mandate. The administration announced via blogpost on the eve of the July 4 holiday that it was delaying the requirement that employers of at least 50 people provide complying insurance or pay a fine. This time it did cite statutory authority, but the cited provisions allow the delay of certain reporting requirements, not of the mandate itself.

3. Delay of Obamacare’s insurance requirements. The famous pledge that “if you like your plan, you can keep it” backfired when insurance companies started cancelling millions of plans that didn’t comply with Obamacare’s requirements. President Obama called a press conference last month to proclaim that people could continue buying non-complying plans in 2014—despite Obamacare’s explicit language to the contrary. He then refused to consider a House-passed bill that would’ve made this action legal.

4. Exemption of Congress from Obamacare. A little-known part of Obamacare requires Congressmen and their staff to get insurance through the new healthcare exchanges, rather than a taxpayer-funded program. In the quiet of August, President Obama directed the Office of Personnel Management to interpret the law to maintain the generous congressional benefits.

5. Expansion of the employer mandate penalty through IRS regulation. Obamacare grants tax credits to people whose employers don’t provide coverage if they buy a plan “through an Exchange established by the State”—and then fines employers for each employee receiving such a subsidy. No tax credits are authorized for residents of states where the exchanges are established by the federal government, as an incentive for states to create exchanges themselves. Because so few (16) states did, however, the IRS issued a rule ignoring that plain text and allowed subsidies (and commensurate fines) for plans coming from “a State Exchange, regional Exchange, subsidiary Exchange, and federally-facilitated Exchange.”

6. Political profiling by the IRS. After seeing a rise in the number of applications for tax-exempt status, the IRS in 2010 compiled a “be on the lookout” (“BOLO”) list to identify organizations engaged in political activities. The list included words such as “Tea Party,” “Patriots,” and “Israel”; subjects such as government spending, debt, or taxes; and activities such as criticizing the government, educating about the Constitution, or challenging Obamacare. The targeting continued through May of this year.

7. Outlandish Supreme Court arguments. Between January 2012 and June 2013, the Supreme Court unanimously rejected the Justice Department’s extreme positions 9 times. The cases ranged from criminal procedure to property rights, religious liberty to immigration, securities regulation to tax law. They had nothing in common other than the government’s view that federal power is virtually unlimited. As a comparison, in the entire Bush and Clinton presidencies, the government suffered 15 and 23 unanimous rulings, respectively.

8. Recess appointments. Last year, President Obama appointed three members of the National Labor Relations Board, as well as the head of the Consumer Financial Protection Bureau, during what he considered to be a Senate recess. But the Senate was still holding “pro forma” sessions every three days—a technique developed by Sen. Harry Reid to thwart Bush recess appointments. (Meanwhile, the Dodd-Frank Act, which created the CFPB, provides that authority remains with the Treasury Secretary until a director is “confirmed by the Senate.”) In January, the D.C. Circuit held the NLRB appointments to be unconstitutional, which ruling White House spokesman Jay Carney said only applied to “one court, one case, one company.”

9. Assault on free speech and due process on college campuses. Responding to complaints about the University of Montana’s handling of sexual assault claims, the Department of Education’s Office of Civil Rights, in conjunction with the Justice Department, sent the university a letter intended as a national “blueprint” for tackling sexual harassment. The letter urges a crackdown on “unwelcome” speech and requires complaints to be heard in quasi-judicial procedures that deny legal representation, encourage punishment before trial, and convict based on a mere “more likely than not” standard.

10. Mini-DREAM Act. Congress has shamelessly failed to pass any sort of immigration reform, including for the most sympathetic victims of the current non-system, young people who were brought into the country illegally as children. Nonetheless, President Obama, contradicting his own previous statements claiming to lack authority, directed the Department of Homeland Security to issue work and residence permits to the so-called Dreamers. The executive branch undoubtedly has discretion regarding enforcement priorities, but granting de facto green cards goes beyond a decision to defer deportation in certain cases.

It was hard to limit myself to 10 items, of course—Obamacare alone could’ve filled many such lists—but these, in my judgment, represent the chief executive’s biggest dereliction this year of his duty to “preserve, protect, and defend” the Constitution, and to “take care that the law be faithfully executed.”

Alas, things may get worse before they get better. New presidential “counselor” John Podesta’s belief in governance by fiat is no secret; in a 2010 report, he wrote that focusing on executive power “presents a real opportunity for the Obama administration to turn its focus away from a divided Congress and the unappetizing process of making legislative sausage.”

Happy New Year!

Ilya Shapiro is a senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the Cato Supreme Court Review.

This article is available online at:
http://www.forbes.com/sites/realspin/2013/12/23/president-obamas-top-10-constitutional-violations-of-2013/

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.