The Patient Protection and Affordable Care Act of 2010 dictates that individual states will establish health insurance exchanges by the year 2012 and have them fully operational by 2014. Simply stated, individuals, couples, families and small businesses will become part of an immense “pool” of health insurance purchasers of similarly-featured private health insurance policies. This should allow the large pool to negotiate and receive considerably lower premium rates for these policies. These government-operated exchanges should also allow for better consumer protection mechanisms, broader transparency and accountability.

Insurance agents will be able to offer access to these state-run health insurance exchanges through their agencies. One of the more important aspects of going through an agency to purchase insurance from a health insurance exchange is the level of information available from a trained and seasoned agent. An agent will allow the consumer or employer a broader set of choices than looking only at a health insurance exchange. While not likely, it’s still possible a standalone or group policy may actually still be less expensive or have broader benefits than a health insurance exchange can offer. This depends on the needs of the individual or group. There will never be a “one size fits all” insurance plan or exchange. The more choices a consumer or group has, the better their insurance will be.

All states and the District of Columbia have received grants for the development of their exchanges. Click here to see the individual grants and what each state plans to do with the funds.

Beginning today and running until December 31, 2010, seniors enrolled in Medicare can apply for changes to their Medicare programs for 2011. Allchoice is currently running reports for all current Medicare clients to see if it’s possible to get Medicare members into less expensive and/or better plans for next year.

These reports entail asking for an update of the list of prescriptions for the client and running the appropriate reports for what that particular client desires, be it a Medicare Supplement, a prescription plan or an Advantage plan. Allchoice will then send those reports to the client either by mail or email. One of the requirements of Medicare is that the client sign what’s called a Scope of Sales Appointment Confirmation Form prior to an agent discussing any plan with the client whatsoever. This is sent with the Medicare reports and needs to be received back in Allchoice’s office before any discussion can proceed.

Without being specific about plans it’s important to note that some plans are undergoing changes, with new ones being added to the list of availability and others no longer being available. Clients will likely need to check with their doctors, pharmacies and other service providers to ensure continued coverage if they do decide to change their Medicare plans for 2011.

In our last blog post we mentioned some of the Medicare information which is being heard in Allchoice Insurance radio ads for the next ten weeks on Ave Maria Radio AM 990 in southeast Michigan. The documentation is contained in an August 5, 2010 report from the Centers for Medicare & Medicaid Services (CMS) at the Department of Health and Human Services (HHS). Click here download a copy of this report.

Some of the more interesting information in this report is this:

“Medicare payment rates for physician services as determined by the Sustainable Growth Rate (SGR) system are scheduled to be reduced by roughly 30 percent over the next 3 years … Other Medicare services such as ambulance, ambulatory surgical centers, laboratory services, certain durable medical equipment, and prosthetics have their payments updated annually by the increase in the Consumer Price Index (CPI). The Affordable Care Act specifies that all of these payment updates will be reduced by the percentage increase in the 10-year moving average of private non-farm business multifactor productivity beginning as early as 2011.”

Even more devastating to Medicare recipients is a chart titled “Simulated comparison of relative Medicare, Medicaid, and private health insurance prices under current law” at the top of page 6 in the report. The chart shows that while private health insurance pricing will remain at 100% and Medicaid at 75%, Medicare pricing will drop significantly over time resulting in “… increasingly severe problems with access to care.”

Download the full report to see the rest of the information as presented.

For ten weeks beginning October 4, 2010, Allchoice will be running radio ads on Ave Maria Radio out of Ypsilanti, Michigan. These ads are unique in that they’re not written as sales ads. Instead, the 60-second spots each feature a voiceover discussing how Medicare is being affected by the Patient Protection And Affordable Care Act, such as the cutting of $531 billion out of Medicare over the next ten years.

These radio ads also include the voices of some Allchoice clients. These seniors talk about their experiences with Allchoice Insurance in entirely unscripted testimonials over the years and how they’ve recommended the company to their family and friends. They also discuss the quality of customer serve at Allchoice and how all of their questions have been answered in a friendly and timely manner.

Be sure to tune into Ave Maria Radio on AM 990 in southeast Michigan from Monroe to Bad Axe to Brighton or listen online to hear the new Allchoice radio ads.

The following sentence is from a page that has been added to the beginning of most of the PDFs of the currently-available Aetna brochures:

Please note that in addition to health care reform changes, coverage for children only may no longer be available in your state.

At this point, this agency has also received similar statements from Consumers Life/Medical Mutual, Golden Rule/UnitedHealthOne, HAP and Humana. It’s more than likely other companies will follow this trend in the very near future.

What’s happened is, again, the following portion of the Patient Protection And Affordable Care Act:

  • No discrimination against children with pre-existing conditions – Prohibits all employer plans and new plans in the individual market from denying coverage to children with pre‐existing conditions.

Source: Key Provisions That Take Effect Immediately, U.S. House of Representatives. [“Effective six months after enactment. Beginning in 2014, this prohibition would apply to all persons.”; from other sources.]

This particular area of the Act is troublesome for insurance companies in that it becomes cost-prohibitive to cover children such as the young man with acondroplasia I wrote about in our last blog post. This action by the insurance companies, to not issue child-only policies whatsoever, was quite predictable and should have been taken care of correctly in the Bill before it was signed into law as the Act. Unfortunately, there’s nothing which can be done about it at this point, and insurers are not left with any choice but to not write policies for children only.

Lots of people may wonder, why would a child-only policy be needed? My father worked for GM and we were always covered, so I had this same question. With smaller group policies it’s actually not uncommon for employers only to cover their employees. Some may offer insurance for spouses and children as well, but with possibly higher premiums, lower deductibles, and other caveats. Child-only policies then become a necessity for these families.

What are these families to do? That’s the real question. There’s not yet an answer, either.

A lot of families will be interested in this particular aspect of the Patient Protection And Affordable Care Act which takes effect September 23, 2010:

  • No discrimination against children with pre-existing conditions – Prohibits all employer plans and new plans in the individual market from denying coverage to children with pre‐existing conditions.

Source: Key Provisions That Take Effect Immediately, U.S. House of Representatives. [“Effective six months after enactment. Beginning in 2014, this prohibition would apply to all persons.”; from other sources.]

One of this writer’s friends has a young child with acondroplasia, which is a common form of dwarfism. He has been in the hospital multiple times for various surgeries by a couple different specialists, has a custom-molded brace to help straighten the drastic curve of his spine, has some rather scary respiratory issues … and is only four years old at the time of this writing.

Frankly, if this youngster had not been covered by insurance from the time before he was born, his mom would have not been able to afford the care he so desperately needs on a regular basis and he would have likely passed away by now.

Beginning September 23, 2010, if he is no longer covered under his current insurance for whatever reason, his mom would still be able to get the coverage he requires simply because he cannot be discriminated against solely based on his multiple conditions.

However, there is a major catch to this: Rates could be made to be so high for this youngster that acquiring insurance for him would likely end up being cost-prohibitive for his mom. There’s nothing in the language of the Patient Protection And Affordable Care Act to prevent this from happening.

Another interesting provision of the Patient Protection And Affordable Care Act that takes effect September 23, 2010, is:

  • No lifetime limits on coverage

Source: Key Provisions That Take Effect Immediately, U.S. House of Representatives

The language in the Act reads:

‘‘(a) IN GENERAL.—A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish—

‘‘(1) lifetime limits on the dollar value of benefits for any participant or beneficiary; or
‘‘(2) unreasonable annual limits (within the meaning of section 223 of the Internal Revenue Code of 1986) on the dollar value of benefits for any participant or beneficiary.

‘‘(b) PER BENEFICIARY LIMITS.—Subsection (a) shall not be construed to prevent a group health plan or health insurance coverage that is not required to provide essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act from placing annual or lifetime per beneficiary limits on specific covered benefits to the extent that such limits are otherwise permitted under Federal or State law.


In many instances the lifetime limits of coverage can run in the millions of dollars. Quite often policies will carry a lifetime limit of, let’s say, $5,000,000.00 for all medical coverage. This may seem like quite a bit of coverage but for numerous cancer patients, seeing bills from a facility such as the Cleveland Cancer Clinic totaling $250,000.00 for a year’s worth of treatments can be a normal occurrence. (This writer has seen this happen.) At the same time, “limited liability” coverage may limit coverage for a given surgery to even as low as $25,000.00 or less.

Subsection (a) of section 2711 prohibits these limits for new policies beginning September 23, 2010, and for all policy anniversary or renewal dates within the twelve months past this date.

The Secretary of Health and Human Services will publish new regulations regarding annual limits, which will also have to follow all other state and national laws as well as per subsection (b).