Informed on 
Senior Health Insurance

Paul Cholak - Principal
Licensed Insurance Agent
January 2018 - In This Issue:
We Offer:
  • Medicare Supplement Plans
  • Medicare Advantage (Part C) Plans
  • Part D Prescription Drug Plans
  • Supplemental Health Insurance
  • Health Insurance for Individuals and Families (Affordable Care Act)
  • Dental and Vision Plans
  • International Travel Medical Plans
  • Life Insurance
  • Pre-planned Funeral Arrangements
  • Final Expense Insurance
  • Life Insurance for Diabetics and Other Hard-to-Insure Individuals
  • Annuities
  • Prepaid Legal & Identity Theft Plans
About our Principal,  
Paul Cholak

Paul holds resident (Florida) and non-resident life, health and annuity licenses in 31 other states.  He also has a Florida Pre-need sales agent license.

He's certified to sell Medicare Advantage and Part D Prescription Drug plans and offers Medicare Supplement (Medigap) plans, as well. 
He also offers Prepaid Legal Expense and Identity Theft Plans.
He has many years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms. He negotiated the first "reasonable and customary" health plan reimbursement programs in labor contracts and also implemented the first group dental insurance plan.  

He knows all aspects of individual and family health insurance and has extensive experience with group plans, as well.
He's available 24/7 and continues to stay in touch with his customers after they've made their insurance purchase.  He's always available to help customers who have claims or other problems with their coverage or have any questions about their policies.

He's a recipient of the prestigious Albert Nelson Marquis Lifetime Achievement Award and been listed in Who's Who in America, Who's Who Registry of Business Leaders and Who's Who in Finance and Industry. 
He's a member of Phi Beta Kappa and other national honorary societies and organizations such as Omicron Delta Kappa. He's a graduate of certificate programs from a number of prestigious institutions, been invited to speak at corporate  and university training programs, been featured in articles in national books and magazines, and is also a published author.   

Tax Bill Signed Into Law--Ramifications for Health Benefits
House and Senate Republicans agreed to a compromise tax bill on Friday, December 15, Congress passed the bill in final form on Wednesday, December 20, and the bill was signed into law by the President shortly before Christmas.

Most provisions of the law take effect January 1, 2018. 

Most of the information in this article is taken from summaries of the law that have appeared in the AARP Webletter that we have updated as more information about the law has become available through other sources.

Tax Rates and Deductions
The compromise plan permanently lowers the top corporate tax rate from 35 percent to 21 percent.  However, individual rate cuts, including a reduction in the top tax rate from 39.6 percent to 37 percent, would expire in 2025.
Other tax brackets (there are a total of 7 brackets) would change as well, and personal exemptions would be eliminated. But the legislation would nearly double standard deductions to $12,000 for individuals and $24,000 for married couples filing jointly.
The tax plan also maintains the extra standard deduction for those 65 and older, currently $1,250 for individuals, $1,550 for heads of households and $2,500 for couples who are both 65 and older.
Medical Expense Deduction Preserved Through 2018
The law preserves the  medical expense deduction , which is used by 6.3 million people with incomes below $75,000. Filers would continue to be able to deduct medical expenses exceeding 7.5 percent of their income in 2017 and 2018. (The threshold had been scheduled to increase to 10 percent effective January 1, 2017; the 10 percent threshold is now scheduled to become effective 1/1/2019.)
Penalty For Not Having Insurance Removed Starting in 2019
The plan retains a Senate proposal repealing the provision of the Affordable Care Act that requires most Americans to have health insurance - beginning in 2019. That would increase the number of people without insurance by about 13 million by 2027, according to the Congressional Budget Office (CBO). Lowering the pool of insureds will increase premiums in the individual market by 10 percent in most years over the next decade, the CBO noted. Those 50 to 64 would face average premium increases in the individual market of up to $1,500 in 2019, an  AARP Public Policy Institute analysis  found.
Please read this New York Times article for an analysis of how repealing the penalty is likely to affect individual policies.

(Note that the tax penalty will still be effective for 2018. The IRS has announced they will enforce the penalty. Some clients have told us that they don't expect the penalty to be enforced but it's our opinion that the penalty WILL be enforced and that people who don't have plans that comply with the Affordable Care Act will have to pay penalties when they file their 2018 tax returns.)
Efforts have already begun by both parties to study what changes, if any, should be made to mitigate the effect on Obamacare premiums once the tax penalty is eliminated. One possibility is that waiting periods will be instituted for those who have not had continuous coverage.  
Unless some additional changes are made, the elimination of the penalty will further destabilize markets and additional insurers may pull out of the ACA market. The reason is that more healthy people will pull out of the market and either not buy insurance or buy new types of plans  (referred to as "skinny plans") that may be introduced by carriers that do not meet the requirements of the ACA.  
Unless some kind of change is made that will prevent sick people from immediately joining plans without some kind of restriction, we anticipate that more carriers will pull out of the market and that premiums will rise even more significantly than anticipated.
Medicare Cuts Expected
The fallout of the plan would be even more pronounced on older Americans and the poor, as it puts Medicare, Medicaid and other safety net programs at risk. With an estimated cost of nearly $1.5 trillion in lost revenue over the next decade, the tax overhaul would trigger automatic spending cuts to key programs mandated by the 2010 "pay-as-you-go" law, including $25 billion to Medicare in 2019 alone. The tax bill delayed these cuts by one year, but as far as we know the PAYGO law has not been repealed, and the law will mandate that these cuts start in 2019. (The President had been expected to sign the bill into law shortly after the first of the year, but apparently some last minute changes in the law were made that permitted these changes to be delayed until 2019.) In a letter to House and Senate leaders earlier this month, AARP Chief Executive Officer Jo Ann Jenkins urged Congress to act swiftly to waive the PAYGO law, as it's known, and prevent automatic  cuts to Medicare .
Impact On Taxes
The nonpartisan Joint Committee on Taxation hasn't weighed in on the financial impact the unified plan would have on household taxes. But in an analysis of the Senate plan, it calculated that the benefits would be fleeting: Over 60 percent of households would receive tax cuts in 2019. But by 2027, when the individual cuts would expire, the analysis found that about the same number of households would pay higher taxes or have cuts below $100.
Among Americans 65 and older, more than 5 million would get no tax break in 2019 and 5.6 million would see no tax decrease by 2027, according to an AARP Public Policy Institute analysis.
Read the entire article here.
What's Driving Drug Prices?
Please see this excellent video for an explanation of some of the factors that are driving up drug prices:
In An Uncertain Healthcare Landscape
Several large nonprofit hospital systems have announced plans to merge or otherwise ally in the last few weeks. Uncertainty about the health care landscape and alternatives, from urgent care centers and walk-in clinics to smart phones with online diagnoses, may be pushing the consolidation. The following article was published in the New York Times on December 16.
It's all about the patient.
Or at least about keeping patients and the revenue generated for their medical care.
As health care is  rocked by deals aimed at shattering traditional boundaries between businesses, some of the nation's biggest hospital groups are doubling down on mergers that seem much more conventional. Skeptics say some of these hospital deals are more of the same: systems seeking to increase their leverage with insurance companies and charge more for care.
In just the last few weeks, several of the nation's largest nonprofit hospital systems have announced plans to become even larger behemoths. Dignity Health and Catholic Health Initiatives said they planned to become  a national chain of Catholic hospitals and clinics that spanned 28 states . Two Midwestern systems want to combine to become one of the country's largest nonprofits, and Ascension, which is already the nation's largest nonprofit health system, is said to be  in talks to become even bigger , according to The Wall Street Journal. Ascension declined to comment.
But the frenzy of mergers and other alliances taking place also reveals a frantic attempt to court and capture patients as people have more choices about where to go for care. Patients are increasingly relying on walk-in clinics, urgent care centers or an app on their cell phone to check out a nasty rash or monitor their diabetes, and they are looking for places that are both less expensive and more convenient than a hospital emergency room or doctor's office.
The battle is over "the control of the patient," said Rob Fuller, a health care lawyer at Nelson Hardiman and a former hospital administrator. As hospital executives see the continued decline of care being delivered within a hospital's four walls, he said they want to make sure they still have a say over where patients go after a hospital stay or to get treatment for a chronic condition.
Hospitals competing for patients is a game of musical chairs, and "there might not be a chair for you," agreed Kenneth Kaufman, chair of Kaufman Hall, a firm that consults with hospitals. Hospital executives are realizing that someone else, including an insurance company employing the nurse at a walk-in clinic or the doctor at a surgery center, wants to take over their relationship with patients - and the potential revenue that those patients represent.
Read the entire article here.
Paul Cholak