{"id":16617,"date":"2019-08-26T07:36:00","date_gmt":"2019-08-26T11:36:00","guid":{"rendered":"https:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/dem-hopefuls-fine-tune-health-care-ideas-as-2020-draws-closer\/"},"modified":"2019-08-26T07:36:00","modified_gmt":"2019-08-26T11:36:00","slug":"dem-hopefuls-fine-tune-health-care-ideas-as-2020-draws-closer","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/08\/26\/dem-hopefuls-fine-tune-health-care-ideas-as-2020-draws-closer\/","title":{"rendered":"Dem Hopefuls Fine-Tune Health Care Ideas As 2020 Draws Closer"},"content":{"rendered":"\n
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\nWill \u201cMedicare for All\u201d get rid of private health insurance once and for all? How will Americans pay for Medicare for All?<\/p>\n

\nThe Democratic presidential candidates are refining their positions on the issues as each political hopeful tries to stand out. Health care is one of those issues where some of the candidates are clarifying their views.<\/p>\n

\nSen. Kamala Harris, D-Calif., originally had come out in favor of a Medicare for All plan that abolished private health insurance. Then she stepped back from that position to propose that Americans could opt for Medicare Advantage coverage from a private insurer. Her plan would allow for a 10-year transition period while all Americans would opt into either Medicare or Medicare Advantage. Private insurance plans could participate, but would have their own set of rules to follow.<\/p>\n

\nMore recently, Harris announced how she would pay for the plan. She proposes a 0.2% tax on Wall Street stock trades, a 0.1% tax on bond trades and a 0.002% tax on derivative transaction. She said she also would tax offshore corporate income the same way domestic corporate income is taxed.<\/p>\n

\nHarris said she would not raise taxes on households making less than $100,000 a year to pay for her health care plan. This is where she parts ways from another Medicare for All proponent, Sen. Bernie Sanders, I-Vt.<\/p>\n

\nSanders still wants to see private health insurance go away, and he wants the middle class to pay more taxes for a government-run health insurance system.<\/p>\n

\nIncome-Based Premium<\/h2>\n

\nIn a white paper he issued earlier this year, Sanders proposed a 4% \u201cincome-based premium\u201d on household income above $29,000, a 7.5% \u201cincome-based premium\u201d paid by employers that exempts the first $2 million in payroll, a wealth tax and an expanded estate tax.<\/p>\n

\nSen. Elizabeth Warren, D-Mass., also favors Medicare for All, but hasn\u2019t specified who will pick up the tab for it. She has stated publicly that she believes billionaires and large corporations should pay more in taxes to fund her health care proposals.<\/p>\n

\nMeanwhile, another front-runner among the Democrats, former Vice President Joe Biden, is not ready to let go of private health insurance. Biden\u2019s plan would establish a public option while allowing private, employer-based coverage to remain. Biden estimates that cost of this would be about $750 billion over 10 years, and would be funded through increased taxes on high earners.<\/p>\n

\nWould Americans be OK with paying higher taxes if it meant they would pay less out of pocket for health care?<\/p>\n

\nThe Kaiser Family Foundation conducted two surveys on that issue \u2014 one in January and one in July. The January survey found that overall support for Medicare for All drops when people hear that it would require most Americans to pay more in taxes. At the same time, more people are favorable toward the plan when they are told it would eliminate premiums and reduce out-of-pocket health care costs.<\/p>\n

\nBut in July, Democrats and Democratic-leaning independents told Kaiser they would rather see lawmakers build on the Affordable Care Act instead of replacing it with Medicare for All.  Similarly, a Monmouth University survey released found that a majority of likely Iowa Democratic caucus-goers prefer a health plan where people can opt-in to Medicare over Medicare for All.<\/p>\n

\nRegulators Focus In On LTCi<\/h2>\n

\nLong-term care insurance pricing remains incredibly difficult to stabilize and state insurance regulators are making it their top 2019 priority.<\/p>\n

\nThe Long-Term Care Insurance Task Force formed in April with two main goals, said Scott White, Virginia insurance commissioner: to develop a consistent, national approach for reviewing LTC rate requests, and to make sure consumers have options when presented with costly rate increases.<\/p>\n

\nThirty-six states joined the task force, which met last month during the National Association of Insurance Commissioners\u2019 summer meeting in New York City.<\/p>\n

\n\u201cIt\u2019s very clear the members are quite serious about coming up with meaningful solutions,\u201d White said.<\/p>\n

\nWork groups have been formed focusing on six topics, he added: how states can coordinate multi-state rate reviews; state guaranty fund coverage cap issues; LTC benefits options offered consumers facing rate hikes; evaluation of insurer reserves; non-actuarial variances affecting how states respond to LTC rate hike requests; and additional data gathering for the task force.<\/p>\n

\nBut clearly the main focus of the task force is rate reviews. Two approaches are on the table, White said: amending the Interstate Insurance Product Regulation Compact, or developing a rate-review model law.<\/p>\n

\nA popular product in the 1990s, LTCi was badly underpriced. Many insurers sought, and continue to seek, significant rate hikes to stabilize their books.<\/p>\n

\nFor example, Blue Cross Blue Shield of Florida policyholders have been notified by mail in recent weeks that annual premiums for their coverage will increase by an average of 94 percent through 2021.<\/p>\n

\nThe company originally requested a 280 percent hike but state regulators refused to grant that, telling the company the request was not \u201cadequately demonstrated to be reasonable in relation to the benefits provided,\u201d according to a consent order by the state Office of Insurance Regulation.<\/p>\n

\nBirny Birnbaum, executive director of the Center for Economic Justice, urged the task force to hold insurers and their investors accountable for price increases.<\/p>\n

\n\u201cWhen an investor purchases a share of an insurance company, they understand that it\u2019s not a risk-free investment,\u201d Birnbaum said. \u201cIt\u2019s been well-documented that insurers mispriced their products. The mispriced products sold briskly during the first two decades.\u201d<\/p>\n

\nAnnuity Model Law<\/h2>\n

\nThe Annuity Suitability Working Group also met in New York and chairwoman Jillian Froment vowed to complete its annuity sales model law by the NAIC fall meeting in December.<\/p>\n

\nThe group met in the state where a tough best-interest standard took effect Aug. 1 for the sale of annuities \u2014 a fact not lost on some members. New York regulators are pushing colleagues to adopt its standard, which also covers life insurance, as the national model.<\/p>\n

\nBut there is plenty of resistance, which isn\u2019t likely to go away, Froment acknowledged.<\/p>\n

\n\u201cWhat best interest means to us as a working group does not mean that every state around the table will support that,\u201d she said. \u201cWe\u2019ve already established that it\u2019s going to be less than a fiduciary standard, but is more than suitability. That\u2019s what our goal is \u2014 to define what that means.\u201d<\/p>\n

\nIowa Insurance Commissioner Doug Ommen wrote much of the draft the working group is tweaking. The \u201cIowa draft\u201d was introduced earlier this summer in a bid to harmonize the NAIC effort with the Securities and Exchange Commission rule, Ommen has said.<\/p>\n

\nOmmen\u2019s proposal articulates a best interest standard through the following four obligations: care, disclosure, conflict of interest and documentation.<\/p>\n

\nThe working group is in the final stages of defining each of those obligations. Once the \u201cwordsmithing\u201d is completed, Froment said, a tentative draft model will be ready \u201cby mid-September.\u201d<\/p>\n

\nThat will be followed by \u201ca very aggressive call schedule\u201d to iron out the annuity sales model, she added.<\/p>\n

\n

\nBy Cassie Miller<\/em><\/p>\n

\nHeadlines about the SECURE Act have been a little dramatic, particularly related to the stretch IRA provision.<\/p>\n