Open enrollment on the healthcare exchanges doesn't start until November 1 but news of projected premium increases of 22% to 25% hit the streets last week. Write ups about the rate increases can be divided into two camps—the beginning of the end of Obamacare and it’s not as bad as you think because... That “because” refers to the fact that the increase, although huge, does not apply to the vast majority of health insurance purchasers. It does not apply to the more the 50% of Americans who get health insurance from their employers or seniors, veterans, the disabled and poor. It also does not apply to about 85% of people who purchase individual policies on the exchanges. It does apply to the millions of people, like me, who do not receive a health insurance premium subsidy.

So one camp want to amplify the harshness of the Obamacare increases, with the Wall Street Journal (WSJ) going as far as to express its condolences to people, like me, who are stuck paying the full premium increase. But with their condolences comes a healthy dose of we told that arrogant President Obama that Obamacare was destined for failure. They don’t really care about the individuals paying high health insurance premiums, just like they never cared about the people paying even more or being denied coverage for preexisting conditions pre-Obamacare.

And then there is the, it’s not as bad as it looks camp. They want to stress how few people have to pay the full increase in premiums without subsidy support and how subsidies will increase in step with premiums for those eligible for them. Some go into the mathematical weeds to prove their point of just how nearly insignificant this non-subsidy group is, with estimates ranging from 1.5 million people to as high as 9 million people. And then there is a very small subset of this camp that unfortunately includes some in the Administration, that claim millions of non-subsidy people are probably eligible for subsidies but just don’t know it. Continue Reading...

Tags: obamacare, obamacare subsidies

The upper middle class is finally receiving the attention it deserves but probably doesn't want. The income inequality standoff between the 99% and the 1% that exploded after the 2008-09 Great Recession is moving downstream. About five years after the start of the recession, economists, social and public policy experts and intellectuals began to notice where the real growth in income was happening. Articles in the Wall Street Journal and Fortune both reference a study by Stephen Rose of the Urban Institute that claims that in 2014 the “upper middle class controls 52.1% of America’s income.”

But it’s not just rising income inequality between the upper middle class and the lower income classes that is getting attention, it’s their increasing political clout that is receiving bad reviews. Some public policy writers believe that the upper middle class is destroying America. Check out some of these headlines:

"The Upper Middle Class Is Ruining America And I want it to stop." written by Reihan Salam, 2015, slate.com.

"The Dangerous Separation of the American Upper Middle Class," written by Richard V. Reeves, 2015, brookings.edu.

"Check Your Privilege, Upper Middle Class," written by Richard Reeves, 2016, washingtonpost.com.

Personally, I never really thought about the status of the upper middle class until last month when I spent two weeks with about 100 of them on a cruise from Moscow to St. Petersburg, Russia. Now, I can't confirm that all of the people I met on the cruise were legitimately upper middle class, but I'm guessing many were.

Let me explain. In his article in slate.com, Reihan Salam, said that “upper-middle-class is a state of mind. We’re talking about families that earn well into the six-figure range yet don’t feel rich, either because of their student loan debt or the enormous cost of the amenities they consider nonnegotiable: living in well-above-average school districts for those with children or living in “cool” neighborhoods for those without.”

So, if Reihan is correct that upper middle class is a state of mind, my cruise mates who casually compared the number of countries they visited, fit the bill. They also, according to every article I read about this group, and I’ve read a few dozen, possess all or most of the characteristics of the upper middle class: mostly white, educated, current or former professionals (doctors, lawyers, financial advisors, public-sector administrators, etc.) lifestyle-focused, with the ability to spend thousands of dollars on, experiences, and segregated from the lower income classes.

Should We Care About The Upper Middle Class?

Why does a blogger dedicated to writing about health insurance and retirement saving public policy issues care about the upper middle class? Well, as a former workplace employee benefit professional, I know that workplace health insurance and retirement plans favor highly compensated workers. You know, those employees who make above the FICA tax limit and the ones who can afford to contribute the maximum amount to their 401(k) and whine that they are not able to contribute more, tax-free. Continue Reading...

Tags: Upper middle class, health care reform

The Onion, a news satire organization known for fooling many journalists with it’s made up stories, has a hilarious story in its October 5, 2016, edition about a man who woke from a coma and suddenly understood his health insurance policy. And like most of The Onion headlines and stories, it's really funny because there is some underlining truth to the satire.

According to about a dozen annually produced surveys, Americans don't understand their health insurance. A UnitedHealthcare “Consumer Sentiment Survey," cited by BenefitsPro revealed that "just 7 percent have a full understanding of all four basic insurance concepts: plan premium, deductible, coinsurance, and out-of-pocket maximum." Despite decades of employer and insurer-provided communications, the majority of Americans can't explain what a deductible is or how it works. Not understanding their health insurance policy is an American problem because insurance isn't as confusing in other countries.

We just returned from vacationing in Russia and Finland. In our travels from Moscow to Uglich to Yaroslavl to St. Petersburg to Helsinki we met a lot of people. And despite their economic status, level of education, or age, everyone we spoke to about health insurance understood their health insurance plan coverage. They understand their health insurance because it's simple. No deductibles or coinsurance or out-of-pocket maximums.

Many Americans do not want government-sponsored health insurance but they do want health insurance they can understand. But is easy-to-understand health insurance possible in America in the age of high-deductible health plans, referencing pricing and tax-saving accounts? As an employee benefits professional, it is easy to blame health insurance illiteracy on lazy employees who refuse to read plan information, but that would be ignoring the fact that these plans are often so complex that few people can claim to fully understand them. Continue Reading...

Tags: health insurance

Americans have very confusing views about government spending on health insurance. For example, it is common to hear how unaffordable health insurance has become and the shame over receiving a government subsidy to help pay for it, from the same person. It's impossible for me to understand the logic of it is unaffordable but I wish I could afford to pay for it anyway mentality.

This kind of mentality may be okay when considering a smartphone purchase but is downright crazy when discussing health insurance and health care purchases. So when Bill Clinton said the other day,

'...the people that are getting killed in this deal are small-business people and individuals who make just a little too much to get any of these subsidies. Why? Because they're not organized, they don't have any bargaining power with insurance companies, and they're getting whacked. So you've got this crazy system where all of a sudden, 25 million more people have health care, and then the people that are out there busting it — sometimes 60 hours a week — wind up with their premiums doubled and their coverage cut in half. It's the craziest thing in the world."

he forgot to blame the crazies that find receiving subsidies for individually purchased health insurance shameful.

Don't get me wrong, I completely agree with Clinton about how people like me have been mistreated by this law and continue to be ignored by this Administration. But let's also call out the subsidy receivers who could care less about the subsidy non-receivers. It may just be a classic case of I got mine, you get yours but for some, it's about equating subsidies with looking poor. CRAZY!

We All Need A Health Insurance Subsidy Continue Reading...

Tags: Subsidies, healthcare exchanges