Phil Castell
Castell Insurance
426 E. Washington St., Sequim, WA 98382
Phone: 360-683-9284 • Fax: 360-683-9026
Phil@CastellInsurance.com
www.CastellInsurance.com  

 

Last night while I was watching TV nearly a week after the elections, I was shocked to suddenly find myself watching ad’s for Gubernatorial candidates Jay Inslee and Rob McKenna. I know their election was very close and only finalized on Friday or Saturday when Rob McKenna conceded defeat, but ads running days after the election closed was crazy. But no, I must admit I was the crazy one as I was watching a show we had recorded earlier on the DVR. Phew, no more election ad’s until the next election cycle.

The campaign rhetoric is now a thing of the past and it is time to assess where we are as a country and where we are going. That is one mighty tall order, so I shall limit myself to discussing the ramifications of the Affordable Care Act or what is otherwise known as Obamacare.

In the past when I have used that term I have heard from folks who thought that I was using it in a derogatory manner, which was not the case. However, in one of the Presidential debates President Obama himself acknowledged the term and was proud that his landmark legislation bore his name.

I shall first address the Affordable Care Act as it pertains to Medicare. Many readers of the column are folks who are already enjoying the benefits of Medicare. I am frequently asked about the $716 billion to be cutsfrom the Medicare budget.

This number is not a real number but in my opinion it is what I call fuzzy math. Please allow me to explain. I know I love numbers and I may risk putting you to sleep but I promise my explanation is short and sweet.

Let’s say the Congressional Budget Office has assumed that the Medicare budget will increase by 6% annually for the next decade. Now the politicians say that they will tighten the belt of Medicare and the growth will only be 3% per year.

The politicians statements are counting the difference between the 6% projected increase and the 3% they hope for as a cut, or savings.

On a $100 billion Medicare budget, after 10 years just using simple inflation the savings would be a staggering $165 billion. So yes, they have saved or cut $165 billion from the Medicare budget, but even at a 3% per annum increase the Medicare budget is still over 30% higher at the end of the decade, so have they really cut anything? I would love to hear your opinions.

The main focus of the ACA is to help provide coverage for the 45 ~ 50 million people who do not have health insurance. In Washington that figure is estimated to be 1,000,000 people

I shall be focusing today more on the logistics of the ACA and the impact on Washington than on the funding and Mediciad expansion which I have written about in earlier columns.

Now the general elections are behind us and President Obama can proceed with the full implementation of the ACA, it is time for the state government to jump into high gear. Much of the responsibilities of the implementation of the ACA will fall directly onto two state agencies. They are the Office of the Insurance Commissioner (OIC) and the Health Care Authority (HCA).

The Health Care Authority has created the Washington State Health Benefit Exchange Board. This board consists of 9 voting members and two ex-officio (non voting) members. The two non voting members are Mr. Mike Kreidler in his capacity as the Insurance Commissioner and Ms. MaryAnne Lindeblad as director of the Health Care Agency.

In broad strokes the mandate of the Exchange Board is to create and implement the infrastructure necessary to facilitate the enrollment of persons into health plans that are affordable and most suitable to their needs.

Much of this will be centered around an online web-based portal that will allow people to search for plans and benefits. This will be a secure site where a person can enter their social security number and the site would access the IRS database to determine if they are eligible for any premium support due to income.

Navigators will be groups, associations or individuals who will help folk navigate the systems and their eligibility. A navigator can not be paid based upon a persons enrollment in a plan but rather they will be funded through grants or other forms of non direct compensation.

At this early stage of the process it is my understanding that the Exchange and OIC are considering using the wonderful volunteers at the Statewide Health Insurance Benefit Advisors (SHIBA) as one of the many navigators.

The role of the OIC is to approve and regulate the insurance carriers and plans to ensure a fair and level marketplace for all concerned. That sounds simple enough but once you start to think about the scope of that mandate it is quite a monumental task.

The state of Washington has been in my opinion very progressive and proactive in the adoption of the ACA. I am pleased to say that there is a great deal of communication between all the various states and the design of rules and regulations. This allows for states to collaborate as opposed for 50 states to try to reinvent the wheel 50 times.

What role does this leave for the health insurance agent who is on the front line in many of the face to face discussions with the public. I feel confident that we will have an important role to play. We are licensed, trained and highly regulated and the natural conduit to facilitate enrollment.

The projections are that the one million Washingtonians without health coverage will all be searching for coverage as will at least another million folk who are covered either on an individual plan or on a small group plan.

I recently found out that none of the existing individual plans available in the state will meet the minimum standards for 2014, so every person on an individual plan will be cancelled as of January 1st 2014 and will have to enroll into a new plan.

All the new plans have to include a minimum set of benefits including prescription drugs and so it is anticipated that premiums for all will increase, but at this stage it is too early even guestimate how much.

Things will become clearer each and every month as we approach the start of enrollment in October 2013. Yes, that is only 10 ½ months away from now.

As we approach this unchartered territory we should do so with an open mind and a willingness to embrace change.