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Obamacare Will Change Health Insurance Landscape in Alabama

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

The Patient Protection and Affordable Care Act (better known as Obamacare) will go into effect in January one here in Alabama as well as the rest of the country and the healthcare insurance industry will never be the same.

Healthcare insurance insiders told The Alabama Political Reporter that beginning in 2014 that insurance companies will be expected to comply with a Medical Loss Ratio of 80:20. 80% of all premiums will have to go to claims. Everything else – advertising, company buildings, salaries of consumer support persons, commissions for insurance agents, profits, etc., will have to come out of the remaining 20%. Anything leftover has to be rebated to consumers.

Also starting on January one all health insurance policies sold must cover 10 categories of mandated health benefits. This will include currently optional services like maternity and newborn care, contraceptives, breast feeding counseling, pediatric services includes dental services, and prescription drug benefits. All of these benefits will be offered in every new policy sold.

Under Obamacare, older Americans can only be charged three times the amount that younger Americans pay for insurance. Some insurers now will charge a 62 year old as much as five times the amount that they charge a 23 year old buying his or her first health insurance policy would pay. Young Americans will likely pay much higher healthcare premiums under Obamacare while some older Americans who don’t yet qualify for Medicaid may actually see something of a decrease in premiums.

Obamacare will mean no more underwriting. In the past, Americans who watched what they ate, exercised and stayed lean, in shape, without any history of accidents, criminal activity, dangerous driving, or pre-existing conditions were rewarded with preferred pricing. The combination of their good behavior, luck, and good genes could give healthy Americans easy access to health insurance at the lowest possible price because experience showed insurance companies they were the least likely to use large amounts of healthcare. Americans who were grossly obese or had pre-existing conditions like drug dependency, heart conditions, cancer, convictions for violent crimes, AIDS, etc., could not buy health insurance in many places at any price. That all changes on January 1. Insurance companies will not be allowed to put any Americans in “high risk pools” any more and they can’t give preferred pricing to healthy people. The only exception to that is smokers. Insurance companies can penalize smokers up to 50% in higher premiums.

Obamacare compliant policies will be loaded down with costly benefits that many Americans don’t have now. The industry is also estimating that new taxes and fees will add $475 to the average family’s annual insurance premium. On average, plans will have more benefits, but more benefits = higher premiums. How much higher depends on a lot of factors including what hospitals and doctors in your county will give up to insurance companies in ongoing network negotiations.

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Americans are going to lose the ability to charge insurers whenever they want to. Open enrollment for Obamacare compliant policies will begin this year on October 1 and will end on March 31, 2014. After that insurance companies will not be allowed to sell you individual health insurance coverage until open enrollment begins again in October 2014 and your coverage will not begin until January 1, 2015. To purchase health insurance outside of the annual open enrollment period (expected to be just 45 days after this first year) will only be allowed if a qualifying event occurs. These include a death in the household, loss of a job, a divorce, loss of employer provided coverage, or moving outside of the coverage area of your current health insurance provider.

Alabama Governor Robert Bentley (R) elected not to set up a state insurance exchange so the federal government is going to provide us a federal exchange run entirely by the federal government. The insurance exchanges will be called “insurance marketplaces.”

Not every insurance carrier that operates in Alabama will operate in every county in Alabama and prices and product availability could vary from county to county. Some Alabamians who qualify for subsidies may not be able to purchase a subsidized product in their county if that is not offered in their county. Despite recent reporting to the contrary, the list of counties that will be included in insurer’s marketplaces is not set yet. Insurers say that they are still working on deals with the healthcare providers and are still seeking final approval of their plans from federal regulators.

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Insurance agents will need to ask their clients income questions from now on to find out where there clients fit on the federal poverty scale. Even though open enrollment begins in just 74 days insurers insist that nothing is set in stone right now. Insurance companies are telling independent brokers that they will have a role but the companies don’t know yet how much the brokers will get paid.

According to our sources, Humana, United Healthcare, and Blue Cross Blue Shield of Alabama are all “supposed” to be on the Alabama exchange but (not necessarily in all counties) and other companies including possibly Aetna and Cigna could also offer Obamacare compliant major medical coverage in some Alabama Counties. It is also very possible that some counties could have just one carrier in their market.

According to our information some companies are reluctant to be the cheapest insurance on the exchange because they will get a lot of the sickest people during that first year of enrollment when millions of currently uninsurable Americans flock to finally get coverage.

People who have had their coverage since before March 23, 2010 will have their existing coverage grandfathered in and they will not be forced to switch to an Obamacare compliant policy, but they also will not get any of the new benefits either. Anyone who has purchased coverage after that date (the passage of Obamacare) will likely eventually be forced to renew into an Obamacare compliant policy (for many before the end of 2014).

Licensed insurance agents will have to receive new training (likely at their expense) in these new policies and the new federal regulations (which Health and Human Services is still writing) in order to be able to help clients navigate the waters of the new healthcare insurance landscape on October 1.

The federal government is also reportedly granting money to start up companies to promote exchanges by hiring people called navigators to sign people up for insurance policies. Reportedly these people are paid by the hour salespeople working as government contractors to implement Obamacare rather than licensed healthcare insurance agents. None of the “navigators” can even have an insurance license.

The roll out of Obamacare will not affect seniors or the disabled who receive Medicare. Similarly poor Alabamians who already qualify for Medicaid will not see their coverage change. Because Alabama elected not to expand Medicaid, poor Alabamians who don’t currently qualify for Medicaid will be required to purchase coverage like the rest of the uninsured but they likely qualify for subsidized healthcare insurance through the Healthcare exchanges.

Only persons under 30 can purchase catastrophic plans and only if they can demonstrate that it will be a financial hardship. Most people with employer provided insurance will be able to keep their coverage (likely at a significantly higher price for their employers) but it is estimated 4 to 6% of employers in the small group market will drop their employees coverage in the first year alone to the individual market.

Health Savings Accounts will continue on but with some modifications. All copays and deductibles and coinsurance will now go towards meeting Maximum Out Of Pocket maximums in Obamacare compliant polices.

It is our understanding (at this time) that people with incomes below 400 percent of the federal poverty line will be forced to buy insurance from the exchange. Individuals who make over $43,336 have the option of exchange plan or not. For a family of two that number is a household income of over $58,280. For families of 3 that number is over $73,240. For a family of four that number is over $88,200.

Up to 30 million Americans will have to purchase an Obamacare compliant health insurance policy or face paying the IRS a penalty for failing to comply with President Obama’s signature piece of legislation.

The Penalty for not having insurance the first year is $95 per adult and $47.50 per child or 1% of household income: whichever is greater. For high income people, that 1% in additional income tax would make the cost of self insuring ridiculously expensive. Millions of other Americans are expected to remain uninsured and pay the penalty. If something does happen to them however they won’t have any insurance to cover unexpected medical costs.

At least one health care insurance company is expected to roll out a non-Obamacare compliant major medical policy. Their customers would still have to pay the Obamacare tax penalties but their insurance would likely cost hundreds or even thousands of dollars cheaper than a compliant policy and they would be protected from the financial catastrophe that a major health setback would provide if they had no coverage. Other insurers are offering affordable critical illness plans, accident policies, and even hospital indemnity plans to give Americans who can not afford the costly Obamacare compliant policies some level of coverage.

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Elections

Coalition of attorneys general file opposition to Alabama attempt to ban curbside voting

The AGs argue that Alabama’s suggestion to the courts that curbside voting invites fraud is “unfounded.” 

Eddie Burkhalter

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(STOCK PHOTO)

A coalition of 17 state attorneys general have filed an opposition to Alabama’s attempt to get the U.S. Supreme Court to ban curbside voting. 

In a friend-of-the-court brief, led by District of Columbia Attorney General Karl Racine, the attorneys general argue to that curbside voting is safer for those at greatest risk from COVID-19, and that a ban on the practice would disproportionately impact the elderly, the disabled and Black Alabamians.

They also argue that Alabama’s suggestion to the courts that curbside voting invites fraud is “unfounded.” 

“The Presidential Advisory Commission on Election Integrity, established by President Trump following the 2016 election, ‘uncovered no evidence to support claims of widespread voter fraud,’” the brief states, adding that there is no evidence that curbside voting in the many states that allow it invites fraud. 

“The practice is longstanding and widespread—as noted, more than half of states have historically offered curbside voting in some form,” the brief continues. 

Alabama Attorney General Steve Marshall on Oct. 13 said the state will appeal to the U.S. Supreme Court a federal appeals court ruling allowing curbside voting in the Nov. 3 election. 

A panel of federal appeals court judges on Oct. 13 reversed parts of U.S. District Judge Abdul Kallon’s Sept. 30 ordered ruling regarding absentee voting in the upcoming Nov. 3 elections, but the judges let the previous ruling allowing curbside voting to stand. 

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The lawsuit, filed by the NAACP Legal Defense and Educational Fund, Southern Poverty Law Center, American Civil Liberties Union, ACLU of Alabama and Alabama Disabilities Advocacy Program, was brought on behalf of several Alabamians with underlying medical conditions. 

“Curbside voting is a longstanding, secure voting option that local jurisdictions have made available to protect the health of vulnerable voters, including elderly, disabled, and voters with underlying health issues,” Racine said in a statement. “Curbside voting minimizes the risk to persons who are particularly susceptible to COVID-19, and local jurisdictions should be able to offer this common-sense accommodation to voters. State Attorneys General will keep fighting to ensure that voters can safely make their voices heard at the ballot box this November.”

The brief filed by the coalition of state attorneys general comes as the number of COVID-19 hospitalizations across Alabama has been ticking upward.

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Racine is joined in the brief by attorneys general from California, Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia and Washington.

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News

Alabama revenues grew despite COVID pandemic, analysis shows

Tax revenue into the state’s General Fund was 7 percent higher this year the Education Trust Fund brought in an additional $209 million in 2020 compared to 2019. 

Eddie Burkhalter

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(STOCK PHOTO)

Alabama’s strong economy going into the COVID-19 pandemic, and billions in federal aid to address the health and economic crisis, has helped the state’s two largest budget funds to grow this year, according to a study released Thursday. 

According to an analysis by the Public Affairs Research Council of Alabama, tax revenue into the state’s General Fund was 7 percent higher this year than it was in 2019, and Alabama’s Education Trust Fund brought in an additional $209 million in 2020 compared to 2019. 

“According to Finance Department officials, Alabama ended 2020 with $330 million balance in the ETF and a $315 million balance in the General Fund,” wrote PARCA’s Tom Spencer in the report. “That was result both of revenues that exceeded the budgeted amounts and expenditures that were lower than what was appropriated.”

The growth came despite the spike in unemployment that began in March and hasn’t yet abated, and despite mandatory business closures in March and April and the restrictions still in place to protect against the spread of the coronavirus. 

The author of the report said the growth is due in part to the state’s strong economy before the pandemic hit. Unemployment was at a historic low between October and March, and prior to the pandemic, income tax receipts were up approximately 7 percent over the same period in 2019. 

Additionally, $4.1 billion in federal COVID-19 aid has been committed to individuals and municipalities in Alabama, and consumer spending shifted but didn’t stop, the author notes. 

The federal Paycheck Protection Program preserved payrolls, and unemployed workers received $600 per week in a supplement to unemployment insurance, which both helped prevent the state’s tax revenue from taking a bigger hit. 

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“Sales taxes dropped, then recovered and have been up and down in the months since. At the same time though, tax on internet purchases surged, offsetting the erosion in sales tax. Unlike some other states, Alabama’s sales taxes apply to groceries and medicine and thus it tends to be more stable,” Spencer wrote in the report. 

Several sectors of Alabama’s economy have done well during the pandemic, including the state’s Alcohol Beverage Control Board, which contributed an additional $17 million to the General Fund, an increase of 14 percent. 

But still other sectors suffered, including lodging tax. The tax on hotels and vacation rentals was down 15 percent for the year, and collected almost $9 million less for the General Fund.

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“For the current fiscal year, FY 2021, Finance officials are relatively confident that revenues will more than cover the budgets. Lawmaker scaled back spending plans in light of the pandemic,” Spencer wrote in the report. “As long as there aren’t additional unforeseen shocks to the economic system, the Alabama economy should generate the revenue needed to make the budgets as adopted this spring.”

If the state’s economy were to take a larger hit, Spencer noted, the state still has rainy day funds for both funds. 

RESERVE FUND BALANCES

  • ETF Budget Stabilization Fund – $373,269,077
  • ETF Rainy Day Account – $465,421,670
  • GF Budget Stabilization Fund – $27,297,483
  • GF Budget Rainy Day Account – $232,939,781

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Featured Columnists

Opinion | Electing Tuberville could cost Alabama billions

If your conscience or decency isn’t enough, vote your wallets.

Josh Moon

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Sen. Doug Jones, left, and Senate candidate Tommy Tuberville, right.

Money matters in Alabama. Oh, I know that we’re not supposed to say that out loud. That we’re supposed to promote our image of southern grace and hospitality, of churchiness and care, of rich people never getting into heaven. 

But the truth is greed is our biggest character flaw in this state. 

Every problem we have can be traced back to our unending thirst for dollars. Our ancestors didn’t keep slaves because they hated black people. They did it because they loved money and the difference in skin color gave them an excuse — a really, really stupid excuse — to mistreat other humans to take advantage of the free labor. 

Our rivers and lakes and dirt aren’t filled with poisons from factories because we’re too dumb to understand how this works. They’re that way because our politicians are paid off to turn a blind eye to the dumping of toxic waste. 

Our schools aren’t terrible because we have dumb kids or bad teachers. It’s because we’re too cheap to pay for them. 

You see what I mean? It’s our lust for the almighty dollar. Every time. 

We love money. 

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Which makes me seriously wonder why so many people in this state are going to vote for a man who will cost us all — and especially our biggest businesses — so much of it. 

Tommy Tuberville will be like a money vacuum for Alabama. Billions of dollars will vanish for this welfare state that relies so much on federal contracts, federal programs and federal dollars. 

If you doubt this, don’t simply take my word for it. Just Google up the press releases from Sen. Richard Shelby’s office from the last, say, six years — the most recent span in which Republicans have controlled the Senate. 

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Almost every single release is about Shelby securing millions or billions of dollars in federal funding for this project or that project, getting the state’s share of dollars from a variety of different programs and initiatives implemented by Congress. 

Shelby and I obviously have different political viewpoints, but it’s hard to argue that the man has been successful in securing money for Alabama. Lots and lots of money. 

Money for airports and roads. Money for defense contractors in Huntsville. Money for the port in Mobile. Money for car manufacturers. Money for farmers. 

Money. Money. Money. 

Shelby can do that because of three things: He’s on the right committees, he’s a member of the party in power and he’s liked by the right people.

Tuberville will be none of those things. 

Most pundits are predicting that Democrats will take over the Senate, tipping the balance of power and giving the party control of both houses and the White House. 

That automatically means that a first-time senator in the opposition party will have little to no say in any decisions. 

But what’s worse for Tuberville, and for Alabama, is that other Republicans don’t like him either. 

Establishment Republicans essentially openly campaigned against Tuberville in the primary, tossing tens of millions of dollars behind his opponent, Jeff Sessions. They even favored third-place finisher Bradley Byrne over Tuberville. 

It’s not hard to understand why — he’s clueless. 

I know that’s a Doug Jones talking point, but this one happens to be true. Let me give you an example: On Thursday, Tuberville tweeted out what was meant to be a shot at Jones, claiming that Alabama’s current senator wouldn’t meet with Trump’s Supreme Court nominee because Jones knows “he won’t have much time in the Senate to work with her.”

If you’re unaware, the Senate doesn’t “work with” the Supreme Court. They’re separate entities. 

Combine that with his other nonsensical answers on COVID relief, school reopenings, the Voting Rights Act, senate committee assignments, education, foreign affairs — really, the list is almost endless — and it shows how little work he’s put in over the last two years to understand this job he’s applying for. 

Now, that might be just fine with Alabama voters who care more about the party affiliation and owning the libs, but it’s not OK with grownups who take the job of running the country seriously. 

And those people — both Rs and Ds — don’t like Tuberville or his here-for-an-easy-check-like-always approach to one of the most serious jobs in the world. 

He will be frozen out of the most sought after committee assignments. His voice will carry zero weight. His presence will be all but forgotten. 

And in the process, so will Alabama. Especially in two years, when Shelby retires and his senior status is lost. 

In the meantime, Jones is highly respected by senators on both sides of the aisle. He already has a presence on top committees, and is so well liked within the Democratic Party that he’s on the short list to be Joe Biden’s AG, should he not be re-elected. 

The choice seems pretty simple. On the one hand is a competent, prepared and serious statesman who knows how to maneuver his colleagues to get the most for the state. On the other hand is an unprepared, uncaring, lazy carpetbagger who doesn’t understand any process. 

If your conscience or decency isn’t enough, vote your wallets.

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Health

At least 248 COVID deaths reported in Alabama in October

The cumulative death toll in Alabama has risen by 248 to 2,788 in October and by 124 in the last week alone.

Brandon Moseley

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(STOCK PHOTO)

We’re a little more than halfway through the month of October and the Alabama Department of Public Health has already reported at least 248 deaths from COVID-19.

The cumulative death toll in Alabama has risen by 248 to 2,788 in October and by 124 in the last week alone.

At least 378 deaths were reported in the month of September, a rate of 12.6 deaths per day over the month. In the first 17 days of October, the rate has been 14.6 deaths per day, a 15.9 percent increase from September.

Deaths were higher in July and August. The cumulative death toll increased by 582 in August and 630 in July, the worst month of the pandemic for the state.

On Saturday, ADPH reported that 1,288 more people in the state were confirmed positive with the coronavirus, and on Sunday the count increased by 964. The number of confirmed cases in Alabama has risen to 172,626.

There have been 17,925 new cases Alabama in October alone. The state is averaging almost 996 cases per day in October, which is up from September.

The state had 28,643 new coronavirus cases in September, 38,335 cases new cases in August, and 49,678 cases in July. Public health officials credit Alabama Governor Kay Ivey’s statewide mask order on July 15 with slowing the spread of the virus in the state, but the virus has not gone away.

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ADPH reported 823 hospitalizations for COVID-19 on October 17, the most recent day for which we have data. While hospitalizations for COVID-19 are down from the peaks in early August in Alabama have risen from Oct. 1 when 748 Alabamians were hospitalized, a 10 percent increase from the first of the month.

The state of Alabama is continuing to struggle to protect its most vulnerable citizens. At least 6,497 residents of long term care facilities in Alabama have been diagnosed with the coronavirus, 247 of them in October.

There have also been 3,362 cases among long term care workers in Alabama, including 197 in the month of October. Some 9,819 Alabama health care workers have also contracted the coronavirus.

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Most people who test positive for the novel strain of the coronavirus, SARS-CoV-2, are asymptomatic or have only minor symptoms, but in about one out of five cases it can become much more severe.

For older people or people with underlying medical conditions like obesity, heart disease, asthma, cancer, diabetes or HIV, COVID-19 can turn deadly. COVID-19 is the abbreviated name for the medical condition caused by the SARS-CoV-2 virus.

Some 1,115,600 people worldwide have died from COVID-19 worldwide, including 224,284 Americans. There are 8,972,704 known active cases in the world today.

Public health officials warn citizens that coronavirus remains a present danger in our community. Social distancing is the best way to avoid spreading the virus. Avoid venues with large groups. Don’t shake hands or hug persons not living in your household.

Avoid leaving your home as much as possible and wear a mask or cloth face covering when you do go out. Avoid touching your face and wash your hands with soap frequently. Hand sanitizer is recommended.

A coronavirus vaccine may be available in the coming months, but we don’t yet know when or how effective it will be.

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