Category Archives: Health Care Reform

New York Exchange rates drop 50%???

The exchange rates for NY have been released, and all the press surrounds the magical 50% drop.  Before you order a cake, lets be clear about this:  Individual rates have always been astronomical in NY, even with the government subsidizing those rates.  Of the 2.5 million uninsured in NY, only 17,000 people have paid the incredibly high price for individual coverage.  Face it, when you cannot get insurance anywhere else, and they have to take you and cover what is wrong with you (NY made that transition in 1993), the rates are going to be high.  Rates of $1000+ a month were typical, and who pays that?  Not someone healthy and just being cautious – only those that were sick enough to pay those amounts and STILL benefit from the policy would pay that premium.  So over the years, rates crept up to the $1500-$2000 range.

Note that NY has had Guaranteed Issue, no pre-existing conditions and pure community rating since 1993 – all components of ObamaCare.  Will the same thing happen going forward in all states?  most likely.  History is a great teacher.


So reducing these rates by 50% under the “Affordable Care Act” doesn’t necessarily make them affordable.  Looking at the rate charts, a New York City resident looking for a rich plan can get a Platinum-level plan for between $443 and $965.24.  To some that is affordable, but not to most of those looking for individual coverage.  A much bigger question remains – What am I getting for my money?”  What benefits will I receive and what network will I have to use?  The details, other than the big announcement of a 50% decrease – a “very sketchy.”

California achieved its “reduced rates” with dramatically reduced network sizes – limiting hospital and doctors choice severely.

More important to those qualifying for the exchanges is the “Silver Plan” because that’s the plan they have to take to get a subsidy.  Their “premiums” will be capped at 9.5% of their income, so the actual premium only matters to the taxpayers funding this.   As an example, someone with a $25,000 income, would only pay $197.92 for the most expensive plan on the exchange, which “lists” for $597.44.

Stay Tuned.  Alot more to come before the picture becomes fully developed.

UnitedHealthcare in negotiations with Tenet Healthcare to renew contract

UnitedHealthcare is committed to providing our members access to quality health care through a broad network of physicians and hospitals at affordable rates. At this time, UnitedHealthcare is currently in negotiations with Tenet Healthcare to renew its long-term, national network agreement that is scheduled to expire on July 31, 2013, for its commercial and Medicare Advantage plan members.

Tenet Healthcare operates 50 hospitals in 10 states: Alabama, California, Florida, Georgia, Missouri, North Carolina, Pennsylvania, South Carolina, Tennessee and Texas.

UnitedHealthcare has made progress with our negotiations, and both sides are committed to reaching a new agreement. However, without an extension to the existing contract and in accordance with state and federal regulatory requirements, we have begun to notify members as of July 1 of the potential termination – 30 days prior to the contract expiring at the end of July.

In the event you should receive member inquiries regarding this letter, please encourage the member to call the number on their member ID card to speak with a customer care team associate.

Both Tenet and UnitedHealthcare are working together to reach a mutual agreement that allows UnitedHealthcare members continued access to all Tenet Healthcare facilities across the country. In the event that UnitedHealthcare and Tenet are not able to reach an agreement, we will work with our members who have been receiving treatment or have a scheduled surgery at a Tenet facility in order to ensure continuity of care.


Quarterly Economic Update

Stocks advanced for the third quarter out of the last four: the S&P 500 rose 2.36% in three months and climbed to a new record close of 1,669.16 on May 21. While the Federal Reserve threatened to let the air out of the rally as the quarter wound down, key indicators largely showed improvement even as the effects of the sequester cuts presumably trickled down to Main Street. The dollar strengthened and gold was hit hard, though oil pushed toward $100 a barrel. The housing recovery continued undeterred.1,2


When Federal Reserve chairman Ben Bernanke mentioned on June 19 that the central bank might reduce its easing effort later this year and end QE3 altogether in mid-2014, global markets tumbled and the S&P 500 ended up having its first losing month in several (-1.50%). While this was the major event affecting investors in Q2, there were many other consequential economic developments.1,3


Non-farm payrolls expanded by (a revised) 199,000 in April and 195,000 in May, the Labor Department noted. The jobless rate was at 7.6% by May, with the long-term unemployed numbering 4.3 million (1 million fewer than a year before). Consumer spending staged a rebound – it declined 0.3% in April, but then rose 0.3% in May. Consumer incomes rose 0.5% in May (the biggest gain in three months) after a 0.1% rise in April. As for consumer inflation, it was certainly mild: the Consumer Price Index rose 0.1% in May to bring America’s annualized inflation rate to 1.4%. Perhaps as a reflection of the increase in personal spending and low inflation, retail sales were up 0.1% in April and 0.6% in May. While the Commerce Department revised Q1 GDP down to 1.8% in June (from an initial 2.4% estimate), the hope was that the Q2 figure might show solid improvement.4,5,6,7,8


Consumer sentiment improved. April’s Conference Board consumer confidence index was at 69.0; by May it was at 74.3 and in June it reached 81.4. The University of Michigan’s survey also logged an ascent, rising from 76.4 in April to 84.5 in May, then settling at 84.1 in June.9,10


The Institute for Supply Management’s manufacturing PMI had its ups and downs in the quarter. It wound up at 50.9 in June after coming in at 50.7 in April and 49.0 in May. ISM’s non-manufacturing index rose to 53.7 in May from a 53.1 mark a month earlier – and then it declined in June to 52.2. The Producer Price Index showed similar ups and downs, dropping 0.7% for April and rebounding 0.5% in May. Overall durable goods orders rolled in at a consistent pace: up 3.6% in May.11,12,13,14


When the Supreme Court repealed Section 3 of the Defense of Marriage Act (DOMA) in June, it brought federal recognition of same-sex marriages. Financially, that allowed married gay and lesbian couples to file joint tax returns with the IRS and tap into partner health insurance benefits; it also made surviving spouses in such marriages eligible for Social Security survivorship benefits. College students watched interest rates on Stafford loans double to 6.8% due to congressional inaction as June ended, though Capitol Hill lawmakers talked of a fix this summer. Finally, Standard & Poor’s upgraded America’s credit outlook to “stable” from “negative” in June.15,16,17


China’s economy showed distinct signs of cooling off in the quarter. Markit’s monthly PMI showed the nation’s manufacturing sector contracting in May (49.2) and June (48.2), and fears emerged that China might fall short of its 7.5% GDP target for the year. The PRC’s leaders were increasingly focused on rooting the country’s economy in personal consumption rather than exporting and investing. In an effort to clamp down on shadow banking, the People’s Bank of China attempted to curb funding in the interbank lending market, resulting in skyrocketing short-term interest rates. Chinese stocks fell 5.3% in the wake of that move. By the end of the quarter, manufacturing PMIs were at 50.3 in India, 51.0 in Indonesia, 49.5 in Taiwan and 49.4 in South Korea.18,19,20


The good news from Europe: by June, eurozone inflation had declined 0.8% in a year. The bad news: it had risen 0.4% since April to 1.6%. Unemployment for the euro area reached 12.2% in May, up 0.1% from April and up 0.9% in 12 months; at the quarter’s end, jobless rates among EU members ranged from 4.7% (Austria) to 26.9% (Spain). In June, the European Central Bank cut its 2013 GDP projection for the eurozone to -0.6%. It did forecast 1.1% growth in 2014.21,22,23


It was a down quarter for many benchmarks. Some Asia Pacific indices logged gains – the Nikkei 225 (+10.32%), the Sensex (+2.97%), the KSE 100 in Pakistan (+17.04%), the TAIEX in Taiwan (+1.81%). Others didn’t – the Shanghai Composite went -11.51%, the Jakarta Composite -2.47% and Australia’s ASX -3.30%. In the west, the TSX Composite went -4.87%, the Bovespa -15.78% and Mexico’s IPC All-Share -7.84%. While the DAX (+2.10%) and CAC 40 (0.20%) managed small Q2 advances, quarterly losses were more common in Europe – including descents for the RTSI (-12.64%), IBEX (-1.99%) and FTSE 100 (-3.06%). Among regional and multi-country indices, the Global Dow lost only 0.03%,  the DJ STOXX 50 3.46%, the Asia Dow 3.30%, the MSCI World Index just 0.07% and the MSCI Emerging Markets Index 9.14%.24,25


With hints of waning demand in China, U.S. stocks hitting new all-time highs and the dollar growing stronger, there was plenty of selling. The quarter was a disaster for gold, which dropped 23.3% to settle at $1,223.70 on the COMEX on June 28. (In the first half of 2013, gold futures declined $452.10.) Silver’s quarter was even worse: it dropped 31.3%. Platinum futures sank 14.9% in Q2, palladium futures 14.0%. For some other commodities, it was a different story: the first half of 2013 ended with oil up 2.4% YTD, natural gas up 3.9% YTD and cotton up 10.0%. The U.S. Dollar Index went +0.19% in the quarter.26,27,28


A steady stream of positive news arrived from this sector. The April Case-Shiller Home Price Index came out in June, and it showed home prices across 20 cities rising 12.1% in 12 months. The Case-Shiller hadn’t seen a yearly gain that large since March 2006. By May, the National Association of Realtors reported a 12.9% annual gain in existing home sales with a 15.4% increase in the median price of a residential resale; NAR also noted a 12.1% annual improvement in pending home sales. Housing starts and building permits were respectively up 28.6% and 20.8% above year-ago levels by May, and the Census Bureau also noted a 29.0% annualized gain in new home sales.14,29,30,31,32


This might have been the last quarter for rock-bottom mortgage rates. In Freddie Mac’s June 27 Primary Mortgage Market Survey, the average interest rate for the 30-year FRM had risen to 4.46%. (Compare that to 3.57% on March 28.) Other mortgage types also grew more expensive: 15-year FRM, 2.76% to 3.50%; 5/1-year ARM, 2.68% to 3.08%; 1-year ARM, 2.62% to 2.66%.33


Q2 2013 was not as spectacular for U.S. equities as its predecessor. Still, all three major U.S. indices advanced. At the close on June 28, the Dow settled at 14,909.60, the S&P at 1,606.28 and the NASDAQ at 3,403.25. In addition, the Russell 2000 gained 2.73% for the quarter, closing at 977.48 on June 28. Fear increased, at least as measured by the CBOE VIX. The VIX soared 32.26% in the quarter.1

Gloom invaded Wall Street late in the quarter when Ben Bernanke spoke of tapering QE3. Intellectually, investors knew the Fed couldn’t ease forever – but the market sure had a hard time swallowing the pill. The market dip was far from a correction, though, and subsequent economic indicators lightened the mood on the Street. The coming quarter presents the market with strong challenges: few analysts see great things ahead for this next earnings season, there is fear that the jump in mortgage rates may slow the housing comeback, and investors are keeping wary eyes on economic and political developments in China, Europe and the Middle East.  If the housing, hiring and personal spending numbers measure up to expectations in the coming months, stocks may move a little higher in Q3 while Wall Street waits for fall.




This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The Karachi Stock Exchange (KSE) is Pakistan’s largest and one of the oldest stock exchanges in South Asia by market capitalization.  The TWSE, or TAIEX, Index is capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange.  The SSE Composite Index is an index of all stocks (A and B shares) that are traded at the Shanghai Stock Exchange.  The Jakarta Stock Price Index is a modified capitalization-weighted index of all stocks listed on the regular board of the Indonesia Stock Exchange. The Australian Securities Exchange (ASX) is Australia’s primary securities exchange. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization.  The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The Mexican IPC index (Indice de Precios y Cotizaciones) is a capitalization-weighted index of the leading stocks traded on the Mexican Stock Exchange. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The RTS Index (abbreviated: RTSI, Russian: ?????? ???) is a free-float capitalization-weighted index of 50 Russian stocks traded on the Moscow Exchange in Moscow, Russia. The IBEX 35 is the benchmark stock market index of the Bolsa de Madrid, Spain’s principal stock exchange.  The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. The Global Dow (GDOW) is a 150-stock index of corporations from around the world, created by Dow Jones & Company. The Dow Jones STOXX 50 is a stock index representing 50 of the largest companies in Europe based on market capitalization. The stock universe used for selection is an aggregate of the 18 Dow Jones STOXX 600 Supersector indexes, which together capture about 95% of the capitalization of the major stock exchanges in 18 European countries. The Asia Dow is an equal-weighted, 30-stock index that measures 30 of the leading blue-chip stocks traded in the Asia/Pacific region, The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. 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So you think your entitled to a subsidy?

This is part of an article, the original of which is available here in its entirety, by Timothy Jost.  The final rules state that if your employee decides your coverage is unaffordable, that’s good enough.  This is long but important, as your company could receive a tax bill because of the employees representation. – Reeve


At over 600 pages, this rule is very long and very technical. Much of the rule’s preface, which fills 509 of its 606 pages, responds in numbing and repetitive detail to the 741 comments HHS received on the proposed rule.  I would not recommend anyone trying to read it through.  Most of the rule’s provisions amend current rules, thus the printed text consists of snippets of additions or modifications which can only be understood by locating the existing rule and putting the change in context.  While a few of its provisions represent major policy initiatives for the ACA, on the whole the rule addresses administrative issues well below the radar screen of most of those who follow ACA developments. I intend to post two summaries of the rule, this one addressing its exchange provisions and a second addressing the changes it makes in Medicaid and CHIP.  These posts will offer an overview of the rule, but cannot begin to capture its full complexity.

Verifying Premium Tax Credit Eligibility

Employer coverage. The provisions of the July 5 rule that drew the most media attention (indeed one of the few provisions that drew any attention on a day no one was reading the news) address verification of eligibility for premium tax credits.  The Administration had shocked ACA observers by announcing on July 2 that it was delaying until 2015 the enforcement of the ACA’s employer and insurer reporting requirements and employer mandate.  This raised the question of how the exchanges would verify whether or not an applicant for advance premium tax credits had employer coverage and whether or not employer coverage was adequate and affordable.  The final rule answers that question.

It had never been intended that the exchanges would rely on employer and insurer reporting to determine the existence and scope of an applicant’s employer coverage.  Indeed, the premium tax credit eligibility provisions of the ACA itself require that applicants, not employers, provide information on employer coverage. Under the final rule, an applicant for premium tax credits will be required to attest whether or not he or she has employer coverage, and if so its cost and extent.  The application form includes an appendix for this information.   The applicant can, but is not required to, ask the employer to provide information to fill out this form.  The employer is not required to help, but it is hoped that employers will help their employees fill out these forms and make pre-populated forms available to employees.

Once the exchange receives this information, it will check available databases to verify the information, including Office of Personnel Management data for federal employees and the state’s SHOP exchange data.  If the exchange finds information incompatible with the applicant’s attestation, it will ask the applicant to provide evidence to resolve the inconsistency.  In most instances, however, there will be no electronic data available to confirm the attestation.  In these cases, the exchange will select a statistically significant random sample of cases in which it only has the attestation and, after notice to the applicant, contact the employer to verify the information.  If the employer provides information incompatible with the applicant’s claims, the exchange will ask for further proof.  In cases where the employer does not respond, however, or that are not part of the random sample, the exchange will rely on the applicant’s attestation.

HHS will offer to perform this verification procedure for the states, but will not be able to do so technically until 2015.  Because some states were relying on HHS being able to do this for them, the states are excused from conducting the sampling procedure until 2015 as well.

Some commentators have claimed disparagingly that this approach effectively creates an honor system for applicants.  In many respects, however, our income tax system relies on the honor system.  Another provision of the ACA that would have required businesses to file 1099s reporting purchases of goods in excess of $600, which was expected to produce $22 billion in revenue over 10 years, was repealed in 2011, apparently because Congress believed businesses could be trusted to self-report their income

There are, moreover, serious consequences for applicants who misrepresent their employer-coverage.  The exchange must still notify employers every time one of their employees receives premium tax credits.  The IRS will do so as well.  Applicants who receive tax credits for which they are ineligible will have to pay them back when they file their taxes, and the exchange will inform applicants of this fact if it provides the applicant with tax credits pending verification of information provided by the applicant.  Negligent misrepresentation of eligibility information can result in a $25,000 fine, while knowing and willful violations are punishable by a $250,000 penalty.


Carolina Care Plan leaving SC

Carolina Care Plan (Medical Mutual of Ohio) has announced that they are leaving the medical market in South Carolina, Indiana and Georgia.    They will honor currrent contracts through January 1, 2014 ( the date the exchanges become available).

They are “transferring” the business to United Healthcare, who will provide every client with options for renewing with them (either on cycle, or earlier) in the next several months.



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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck