ObamaCare: AARP to cut benefits to avoid “Cadillac Plan” tax
Barack Obama and the Democrats made the claim that we needed healthcare reform legislation because the costs of healthcare were skyrocketing out of control and if they did nothing this trend would continue. The Obama regime pledged to provide affordable healthcare to all Americans, while claiming that people who currently had healthcare insurance that they liked would be able to keep that insurance.
But there is one slight problem with those arguments; they are not true. We have passed healthcare legislation and yet the costs continue to skyrocket; billion dollar companies such as McDonald’s threatened to drop their healthcare benefits altogether until the government stepped in and gave them a waiver that exempted them from the minimum healthcare benefits they would have been required to offer; and billion dollar companies like Boeing have scaled back their healthcare benefits in order to avoid the 40% tax on the so-called Cadillac healthcare plans.
Now we can chalk up more victims to the ObamaCare fiasco; the AARP is trying to avoid the 40% tax on the Cadillac healthcare plans so they are now asking their members to pay higher copayments and deductibles as a result of the healthcare reform law.
Most plan co-pays and deductibles have been modified,” Jennifer Hodges, AARP’s director of compensation and benefits, wrote employees in an Oct. 25 e-mail. “Plan value changes were necessary not only from a cost management standpoint but also to ensure that AARP’s plans fall below the threshold for high-cost group plans under health care reform
There you have it, by asking its members to pay more for deductibles and copayments they are diminishing the value of the plan and they are doing it for one reason and one reason alone; because they simply cannot afford to give their members the same benefits and the reason for this is simple–ObamaCare. Rather than keep the same plan in place and pay an outrageous 40% tax, the AARP has decided it would be cheaper for them to cut benefits to its members and pass the additional costs on to the people who can least afford these increases. This seems to be at odds with the state goal of ObamaCare if you ask me.
For years the Democrats have been engaged in the politics of fear with both the poor and the elderly; they constantly claim that Republicans are going to cut Medicaid, Medicare, and social security in an attempt to frighten the people who rely on these programs into voting for them. Yet it was the Democrats, who in order to pay for the disastrous healthcare reform law, cut Medicaid, and now it is the Democrats who are responsible for the AARP’s decision to pass on its increased costs to the elderly in America.
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America's Watchtower 
We received a letter this week from our health insurance carrier, (not AARP) announcing that our premium would go up to $947.00 per month beginning in January, 2011. This is about 1/3 of our monthly income. We already pay more monthly for health insurance for 2 people than we do for rent.
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That is unbelievable! And I thought that ObamaCare was supposed to make healthcare MORE affordable! What a disaster this bill is already and it is only going to get worse.
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that healthcare bill is clearing the way for single payer. Once premiums become too expensive, the government will “have to” step in and either regulate insurance companies even more than they already are, or take over completely. Luckily John Boehner made it clear that the Repubs will be targeting that bill.
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That is the plan, they want it to get to the point where employers drop insurance and opt to pay the fine. With the crisis created they will step in to ‘normalize’ the situation.
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Steve, there’s a big difference between employees and members. I’m here to tell you that AARP is not an insurance company and doesn’t offer insurance programs to its members – it makes a boatload of money selling endorsements to insurance companies, but it’s those companies that sell insurance to AARP members, not AARP itself.
AARP-branded insurance policies are written by other companies – AARP is not an insurer. AARP does earn a commission on every sale of an AARP-branded plan, but AARP is not an insurance company.
The plan changes you’re talking about, which have been reported recently in various outlets, cover only the people who work for AARP, perhaps 4500 or so. They don’t apply to the members of AARP, many of whose insurance policies are not AARP-branded policies.
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Thanks for the correction, I thought that this was a plan that was offered to its members. But the fact is that these 4500 employees will no have a lesser plan because they will be paying more. And the fact still remains that they have ObamaCare to thank for it.
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GRMA213: the notice from your insurer of your premium increase is meaningless without knowing what your premium was before the increase.
In general, there are many reasons for these premium increases, and the health care reform legislation is certainly high on the list. For example, it seems only natural that the healthcare industry, facing increased price regulation, would attempt to jack up prices as much as possible before that regulation takes effect. Insurance premiums attempt to reflect those increases.
Consumers can have more of an impact on this process the more they involve themselves, not simply as passive check-writers when premiums or co-pays come due, but in the selection of their coverage. Flexible Spending Accounts are available for consumers who have high-deductible plans (which cost less than their standard counterparts), and involve consumers more directly in the decision-making process. These plans give consumers greater decision-making power over their own healthcare, they give them tax-advantaged savings plans and they give them reduced health insurance premiums. Their only real cost is that they require a greater degree of involvement from the consumer – call it dedication, discipline or whatever.
Unfortunately, too many consumers seem content to live with the low deductible, higher-premium plans they’ve gotten used to, and whimper and cry when their insurers gouge them for ever-higher premiums. Over the past few decades, healthcare and associated insurance costs have risen at an extraordinary rate – well over the rest of the costs Americans have to face regularly. Far too many Americans, even those who have less costly alternatives like high-deductible plans available to them, seem to prefer to complain and expect others to do the heavy lifting, rather than take action themselves to reduce their own costs.
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Given the size of GRMA’s premium, I would assume she is older, thusly the low-deductible would be desirable. High-deductible health insurance is designed more as a catastrophic coverage than a maintenance coverage, which is why high-deductible plans are marketed to younger and healthier markets.
You make assertions and call people whiny for not using a high-deductible flex spending plan, but don’t make any attempt to understand their health position. What if they are already sick, and frequently go to the doctor for maintenance of an illness, like diabetes? If they had a typical high-deductible plan, say $5000-10000, it is possible the money they would save in premiums would offset their deductible, but highly doubtful.
And this is the beauty of our health insurance industry, there is choice, albeit not as big if we allowed portability. With obamacare, that choice will be drastically reduced. Premiums are going up, and as you glommed over, most definitely because of obamacare. The mandates are already hitting insurance carriers, many which fly in the face of sound and reasonable underwriting. And premiums will only continue to increase.
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Georgia Yankie says “Far too many Americans, even those who have less costly alternatives like high-deductible plans available to them, seem to prefer to complain and expect others to do the heavy lifting.”
Condescend much?
I agree that FSAs are great alternatives, but guess what? Obamacare is increasing the cost and decreasing the utility of those, too!
Beginning in 2011, money in pretax FSAs, health savings accounts and health reimbursement accounts may no longer be used for over-the-counter medications other than insulin, unless prescribed by a doctor.
Even more significantly, beginning in 2013, the amount you can shelter in an FSA will be restricted to $2,500 a year, an amount that will then be indexed for inflation. (Currently there’s no legal limit, and 78% of large employers set it at $5,000 or higher.) Families with staggering medical expenses because of children with special needs will suffer the most. Rather than being able to pay with pretax dollars, their medical spending will be subject to their top marginal rate, and they will have to use whatever is left over.
http://www.forbes.com/forbes/2010/0426/investing-obama-tax-hikes-capital-gains-duck-obamatax.html
http://www2.dailyprogress.com/business/2010/oct/18/cbj-seventy-five-days-left-tax-management-ar-570288/
GA Yankee, the following statement of yours shows that you are too biased to look at Obamacare objectively:
“it seems only natural that the healthcare industry, facing increased price regulation, would attempt to jack up prices as much as possible before that regulation takes effect.”
Obama was all like, “if we don’t pass the healthcare legislation then the insurance companies are gonna keep jackin’ up the rates.” And now you are all like, “the ins. companies are jackin’ up the rates b/c we passed the healthcare legislation.”
So they are damned if we did, and damned if we didn’t. No matter how badly the fed gov’t interferes and causes disincentives and ties hands with burdensome paperwork and regulation, you are still going to blame insurance companies?
I don’t think that all companies are good and all government is bad. But it seems like you believe the reverse.
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My sister has an FSA and she was told earlier this week that she can no longer use it for over the counter drugs, which was what she used it for 90% of the time, so I know from a first ahnd account that this is true.
And all this time I thought that ObamaCare was supposed to help ordinary Americans by providing them with affordable healthcare.
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Well, my costs are going up severak hundred dollars for next year, and as fleeceme points out, I will have less flexibility with my FSA. Georgia Yankee can sugar coat that however he likes, but once people start getting hit in the wallet-during a recession, they’re going to realize that Obama lied, once again.
It’s more fodder for 2012.
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We will be getting the bad news on our insurance either next week or the week after. It’s always a mnice little Christmas present. And I thought ObamaCare was supposed to help bring down the costs.
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And to think the AARP endorsed Obamakare. They are not supposed to look out for a political party but for their members.
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I still don’t understand why they went along with this in the first place.
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They are run by Liberals. The AARP is not serving their membership. They figure they are the only game in town so where else are seniors going to go? Sort of like blacks and the Democratic Party.
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It’s too bad they have such misplace priorities!
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Surely Obama didn’t lie to us? He always seems SO sincere… Do you suppose he just didn’t know what he was talking about? It must have been Bush’s fault…
There, now that clown from The Drudge Retort has nothing left to say… 😛
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You remember Ben?! He hasn’t been around in awhile, but he still pops in now and again. I would go with the he didn’t know what he was talking about angle, although I am sure Bush had something to do with it. 🙂
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If “Obamacare” was dependent on the cuts to be “deficit reducing,”
could negating the cuts betray the electorate?
“The Centers for Medicare and Medicaid Services
has released the 2011 Medicare Physician Fee Schedule Final Rule,
which includes a 23 percent cut to Medicare physician fees…
…Congress delayed a scheduled pay cut of around 20 percent in June.
Rachel Fields
Beckers Hosptial Review, November 04, 2010
.
.
Did the delay of the June pay cut alter the “affordability”
of the Patient Protection and Affordable Care Act (PPACA),
and if so, who voted for both the initial legislation
and also voted to reverse the cuts making the law “affordable”?
.
.
“…The report from Medicare’s Office of the Actuary
…acknowledged that some of the cost-control measures in the [PPACA] bill
Medicare cuts, a tax on high-cost insurance
…could help reduce the rate of cost increases beyond 2020.
…the longer-term viability of the Medicare . . . reductions is doubtful.”
wrote Richard Foster, Medicare’s chief actuary”
Associated Press
.
.
Have the American people been lied to,
if the government passed a law that said X,
and those who voted for it did Y,
that made the “affordability” non-viable?
.
.
“…Neither the [the Patient Protection and Affordable Care Act (PPACA)] bill
…nor the accompanying reconciliation…
…addresses the flawed formula that dictates physician payments under Medicare
…a bill passed by the House in November would scrap the SGR altogether,
replacing it with a formula designed to ensure that doctors’ Medicare payments
reflect the true cost of delivering care.
Pricetag: $210 billion.
…it was that cost that caused Democrats,
who’d vowed both to keep their reform package below $1 trillion and to offset the entire tab
to strip the doc fix from the larger reform bills.”
The issue has left Democrats in a pickle:
…with voters already weary of deficit spending,
[and/or borrowing] another $210 billion to fund a permanent fix.”
Mike Lillis
Washington Independent
.
.
If Medicare Cuts
are what makes the recently passed Healthcare Legislation “deficit reducing”
and the 23% cut is not enacted in December,
how could those who voted for the legislation be considered
not guilty of misleeding the electorate?
.
.
From an email from some supporting the elimination of the cut:
“Is the new healthcare law accounting dependent on the 23% payment reduction?
If the can is kicked down the road,
does the math in the healthcare legislation become not operable?”
George Hartzman
The answer:
“That is how the administration officials explained it to us…
…Their numbers are based on the law as it stands,
and it currently stands that the cuts will occur.
I think you know the answer to your last question.”
Lee Beadling
Managing Editor, Orthopedics Today
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