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Azar Says Federal Law Had Preexisting Conditions Covered Before ACA. Not So Much.

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3 years ago

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One of the most popular features of the Affordable Care Act is its guarantee of insurance coverage — at no greater cost — for people with preexisting health conditions.

Thus, even as the Trump administration argues before the Supreme Court that the entire Affordable Care Act should be declared invalid, the president and his administration officials maintain that regardless of what happens to the ACA, they will protect people who have had health problems in the past.

Speaking to a “virtual health summit” sponsored by the political newspaper The Hill, Health and Human Services Secretary Alex Azar answered a question about the case, Texas v. Azar, by pointing out “it’s in statute already in HIPAA that preexisting conditions are covered,” implying that if the ACA were declared unconstitutional, those protections would remain in place for everyone.

Umm … not so much.

When we checked with HHS for more information about Azar’s comment, a spokesperson reiterated the secretary’s statement, adding that Azar was “clear that the story on preexisting conditions doesn’t end with HIPAA” and that affordability is a critical component.

So we investigated.

A Little About HIPAA

The Health Insurance Portability and Accountability Act, a law we have examined before, was passed by a Republican-led Congress and signed by Democratic President Bill Clinton in 1996. It is best known for safeguarding medical privacy and patient access to medical records, even though the privacy provisions were added toward the end of congressional deliberations.

HIPAA’s original purpose was to end what was known as “job lock,” a situation in which people with preexisting conditions were reluctant to leave jobs with health insurance even for other positions with health insurance for fear their conditions would not be covered or they would be subject to long waiting periods for coverage. Both scenarios were common at the time.

HIPAA addressed that problem — as long as people maintained “continuous” coverage, defined as having health insurance for at least 12 months without a break of more than 63 days. People who met that requirement could not have waiting periods or denials of coverage imposed upon their own or a family member’s preexisting condition. HIPAA included protections for people with coverage in the small-group insurance market, which primarily comprises small businesses, by requiring insurers who sold policies in that market to sell to all small groups, regardless of health status, and to cover every eligible member of the groups — again, regardless of health status.

But HIPAA was not designed to comprehensively address the problem of people with preexisting conditions getting and keeping affordable health insurance.

For starters, the protections were only for people who already had job-based insurance, to make it easier for them to move to other job-based insurance. It did nothing for those in the individual insurance market who needed to purchase their own coverage — such as self-employed people and those working for companies that did not offer health insurance.

HIPAA attempted to create a pathway for people transitioning from employer-sponsored to individual coverage. It ensured that, after leaving a job, people who secured insurance through another law, the 1986 Consolidated Omnibus Budget Reconciliation Act, or COBRA, would be eligible to buy a “conversion” plan from their insurer once their previous job-based benefits were exhausted.

However, two giant problems arose. First, COBRA, which allows individuals to continue their employer-provided coverage for up to 18 months if they pay the entire premium themselves (plus a small administrative fee), is prohibitively expensive for most people. In 2019, the average premium for a single worker was $599 per month.

The other problem was that even if a former worker did manage to pay for COBRA coverage until that 18-month period ended, there was no limit on how much insurers could charge for the conversion policies. So, even if they were technically available, they were frequently unaffordable.

There were other problems. COBRA coverage was not available to people who worked for small businesses, or for those who became unemployed because the business they worked for failed and no longer offered insurance to anyone. HIPAA also did not stipulate which benefits had to be offered.

Next, the ACA

The ACA sought to deal with HIPAA’s shortcomings. It required most employers to offer coverage and, for those purchasing their own, it required insurers to provide a comprehensive package of benefits at the same price to all purchasers, regardless of health status.

However, the ACA rewrote the HIPAA provisions regarding preexisting conditions, so if the ACA is struck down by the Supreme Court, it’s not clear whether even HIPAA’s lesser provisions would remain. Experts disagree about this, but there is a possibility that HIPAA’s protections could be swept away along with the ACA.

Later in his answer to the question posed at The Hill’s summit, Azar pointed out that there are significant affordability problems with coverage under the ACA, as well. “So we will work with Congress if the time ever comes, to get real affordable solutions,” he said. That’s true. ACA plans, even with subsidies, can be too expensive for some people, and prohibitive for those who earn just slightly too much to qualify for government help. Earlier this month, Democrats in the House passed a bill to make ACA plans more affordable.

Our Ruling

Azar’s statement suggested that if the Supreme Court rules against the ACA and that sweeping law is nullified, Americans with preexisting conditions would continue to have the protections originally offered under HIPAA.

Though it contains an element of truth, it leaves out critical pieces of information. For instance, the HIPAA protections are not equivalent to those provided by the ACA. First, they are geared toward people who have work-based insurance coverage — as long as that coverage is continuous for at least 12 months with lapses no longer than 63 days. One expert we consulted pointed out that this window could be especially problematic now, during a time of “enormous economic dislocation.”

Additionally, the ACA rewrote the HIPAA provisions regarding preexisting conditions — bringing into question what might become of them, too.

We rate Azar’s claim Mostly False.

—————–

By: Julie Rovner, Kaiser Health News
Title: Azar Says Federal Law Had Preexisting Conditions Covered Before ACA. Not So Much.
Sourced From: khn.org/news/fact-check-azar-says-federal-law-had-preexisting-conditions-covered-before-aca-not-so-much/
Published Date: Tue, 14 Jul 2020 09:00:29 +0000

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Ends-of-the-World Every Year Since 1970

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3 years ago

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August 14, 2020

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There always has been and always will be a reason not to invest or not to stay invested. This is all the mainstream media reports to us. Below you will find a list of some of the worst global events each year since 1970. I have some commentary to follow.

1970: War: US troops invade Cambodia.
1971: Civil Unrest: Anti-war militants march on Washington.
1972: Political: Start of Watergate Scandal.
1973: Economic: OPEC raises oil prices in response to US involvement abroad.
1974: Political: Nixon resigns as President of the United States.
1975: Political: Multiple assassination attempts on President Ford.
1976: World: Ebola virus.
1977: Political: Government shutdowns.
1978: Market: U.S. Dollar plunges to record low against many European currencies.
1979: World: Iranian militants seize the U.S. embassy in Teheran and hold hostages.
1980: Economic: Inflation spiked to a high of 14.76%.
1981: Political: President Reagan assassination attempt.
1982: Economic: Recession continues in the U.S. with nationwide unemployment of 10.8%.
1983: Economic: Unemployment in the U.S. reaches 12 million.
1984: Economic: 70 U.S. banks fail during the year.
1985: World: Multiple airplane hijackings around the world.
1986: World: Chernobyl Nuclear Power Station explodes.
1987: Market: DOW drops by 22.6% on October 22.
1988: Environment: Awareness of global warming and the greenhouse effect grows.
1989: Environment: Exxon Valdez dumps 11 million gallons of crude oil into Prince William Sound.
1990: World: Persian Gulf War starts.
1991: World: Mass shooting in Killeen, TX.
1992: Human Rights: Los Angeles riots following the death of Rodney King.
1993: Terrorism: World Trade Center bombing.
1994: World: Mass genocide in Rwanda.
1995: Terrorism: Oklahoma City bombing.
1996: Terrorism: Olympic Park bombing.
1997: World: Bird flu.
1998: World: Multiple U.S. embassy bombings.
1999: World: Columbine shooting.
2000: Economic: Start of the Dotcom Market Crash.
2001: Terrorism: Terrorist Attacks in NYC, DC & PA.
2002: Economic: Nasdaq bottomed after a 76.81% drop.
2003: World: The U.S. invades Iraq.
2004: World: The U.S. launches an attack on Falluja.
2005: World: Hurricane Katrina
2006: World: Bird flu.
2007: Economic: Start of the Great Recession.
2008: Economic: Great Recession continues.
2009: Economic: S&P bottomed after a 56.8% drop.
2010: Market: Flash crash.
2011: Market: Occupy Wall Street and S&P downgrades U.S. Debt.
2012: Political: Fiscal cliff.
2013: Political: Taper tantrum.
2014: World: Ebola virus.
2015: World: Multiple mass shootings.
2016: Political: Divided U.S. Presidential election.
2017: World: North Korea testing nuclear weapons.
2018: Economic: U.S. & China trade war.
2019: Economic: Student loan debt reaches an all-time high of $1.4 trillion.
2020: World: COVID-19.

While many of these events were undoubtedly terrible (and there are certainly others not named here that were worse), most of these were broadcast as end-of-the-world events for the stock market. Despite that attention, it is worth noting that these were, for the most part, one-time events. In other words, most faded into the newspapers of history. We moved on.

Obviously, some caused monumental shifts in the way the world works. Just think about how much air travel continues to be impacted by the events of 9/11. But, outside of the resulting inconveniences (if we want to call safety protocols inconveniences) associated with air travel, flying is safer than ever before.

Take a look at just about any of the events and you will find there are many that people will hardly remember. My point here isn’t that these events are to be ignored or that they were easy to stomach at the time, but that they have become a distant memory.

I want to also make the point that we should expect these types of negative events. As investors, we know these types of crises, economic catastrophes, and global phenomena are going to happen.

But in almost all cases, here is what we can say in the next breath – this too shall pass.

Will there be legal, humanitarian, economic, or some other aid required as a result of these events? Almost certainly the answer is yes, but that doesn’t mean it they won’t eventually fade into history.

Lastly, what’s worth noting is how the market has performed over these last 50 years despite the continual advertisements of the world crashing down around us. On January 2, 1970, the Dow Jones stood at 809 and the S&P at 90 -> those are not typos. These same indexes have grown (not including dividends) to 26,387 and 3,232 respectively. Amazing, no?

Perhaps what gets overlooked more than anything else is what separates the above one-time negative events from the positive stories that go largely ignored over our lifetimes. And that is a story worth telling. See the companion post below:

Unheralded Positive Events Every Year Since 1970

Stay the Course,
Ashby

Retirement Field Guide Mission:

“To help 10 million people make better retirement decisions.”

If you would like to join us in achieving our mission, I hope you will consider sharing our site if you have found it helpful in your own retirement planning.

This post is not advice. Please see additional disclaimers.

The post Ends-of-the-World Every Year Since 1970 appeared first on Retirement Field Guide.

—————–

By: Ashby Daniels, CFP®
Title: Ends-of-the-World Every Year Since 1970
Sourced From: retirementfieldguide.com/ends-of-the-world-every-year-since-1970/?utm_source=rss&utm_medium=rss&utm_campaign=ends-of-the-world-every-year-since-1970
Published Date: Tue, 04 Aug 2020 13:26:19 +0000

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Wildfire prone property insurance bill in California due for hearing

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3 years ago

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August 14, 2020

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The post Wildfire prone property insurance bill in California due for hearing appeared first on Live Insurance News.

The bill is expected to be heard in upcoming weeks as opposing sites prepare for major battle.

A new California bill, the outcomes of which will have a lot to say about coverage for wildfire prone property in the state, will soon be headed for hearing. The hearing is expected to be a heated one as strong opposing opinions have the opportunity to be voiced.

Opponents of this bill are calling it a direct attack on consumer protections in insurance.

That said, proponents of the bill claim it is the best method for making coverage available to wildfire prone property in California. The bill in question is Assembly Bill 2167. It was written by Assemblyperson Tom Daly (D-Anaheim). If it passes,it will create the Insurance Market Action Plan (IMAP) program. The IMAP program is meant to protect residential properties.

So far, AB 2167 has progressed quickly, when taking into consideration that a chunk of the legislature has been considerably restricted by pandemic crisis precautions. It was first presented in early June and backers have been saying that it was brought forward in good timing and that it has all the momentum it needs to be passed.

That said, AB 2167 has not been without opposition. In fact, it has faced considerable opposition, having been called an attack on Proposition 103, insurance consumer protection law. California Insurance Commissioner Ricardo Lara lobbed that argument at it, calling it an “insurance industry wish list, with nothing to help consumers,” and Consumer Watchdog, whose founder, Harvey Rosenfeld, was the original author of Proposition 103.

The insurance industry strongly supports the bill, saying it will help wildfire prone property coverage.

Insurance organizations such as the American Property Casualty Insurance Association and the Personal Insurance Federation both support AB 2167. The bill also has the support of the California Association of Counties (CSAC), as well as Fire Safe Councils of California, and the CalFIRE union.

The Consumer Federation of America, another watchdog organization, has predicted that if AB 2167 passes, it will cause 40 percent increases in insurance rates. On the other hand, insurance groups claim that the bill offers owners of wildfire prone property a greater opportunity for choice and competition among insurance companies based on coverage and premiums while avoiding the limitations and high costs associated with FAIR Plan coverage.

The post Wildfire prone property insurance bill in California due for hearing appeared first on Live Insurance News.

—————–

By: Marc
Title: Wildfire prone property insurance bill in California due for hearing
Sourced From: www.liveinsurancenews.com/wildfire-prone-property-insurance-bill-in-california-due-for-hearing/8549884/
Published Date: Fri, 14 Aug 2020 09:00:14 +0000

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Is this the last hurrah for bonds?

Published

3 years ago

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August 13, 2020

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Recently, I have written quite a bit about the long-term return expectations for investing in bonds. See here, here, here and here.

Spoiler alert: I don’t think it’s good.

But long-term bonds this year have been quite an amazing story as the COVID pandemic has caused the Fed to take historically monumental actions. As a result, we’ve watched long-term Treasuries tear the roof off the market. For instance, a 20+ Year Treasury Bond ETF (name withheld for compliance purposes) is up more than 31% YTD as of July 31st.

That is insane!

But there is a good reason for this increase shown below.

The red circle shows a decrease in the 30-year Treasury rate of almost 40% over a span of six months. That’s practically unprecedented with only two periods (2008 and 1981-1982) having similar declines over such short periods.

But this begs the question: Is this the last hurrah for bonds as a driver of any meaningful return? Below is the 30-Year Treasury rate over the last 40+ years.

For what it’s worth, people have been forecasting the end of the bond bull market since 2012 (maybe even earlier) and yet it has continued despite those predictions. But at some point, the bond party will come to an end.

The Fed has been clear that they are going to keep rates stable until at least 2022 which means this may not change for a little while longer. Or in the near term, I could even see the high returns continuing if we experience pandemic economic shutdown round two.

But, I can’t see a world where this is the case for much longer than that – most importantly over the span of a 30-year retirement.

The official end of the bond bull market depends on a recovery from the pandemic economy as well as a few other factors causing rates to rise. But when they do, it seems likely to me that this may be the last great hurrah for bonds for quite some time.

The question is when to get off that train and that undoubtedly requires a personal answer.

Stay the Course,
Ashby

Retirement Field Guide Mission:

“To help 10 million people make better retirement decisions.”

If you would like to join us in achieving our mission, I hope you will consider sharing our site if you have found it helpful in your own retirement planning.

This post is not advice. Please see additional disclaimers.

The post Is this the last hurrah for bonds? appeared first on Retirement Field Guide.

—————–

By: Ashby Daniels, CFP®
Title: Is this the last hurrah for bonds?
Sourced From: retirementfieldguide.com/is-this-the-last-hurrah-for-bonds/?utm_source=rss&utm_medium=rss&utm_campaign=is-this-the-last-hurrah-for-bonds
Published Date: Wed, 12 Aug 2020 13:47:16 +0000

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