Will the Last Patient to Leave, Please Turn Off the Lights!

This was a familiar refrain to the doc’s, in Pennsylvania in particular, in the late 80’s and early 90’s, which like so much of history, appears to be repeating itself.

Whether due to Obamacare or, perhaps “nobody cares”, the finest healthcare system in the world is changing and, much like the aforementioned, the hospitals are at it again, buying up the valued practices of our best and trusted physicians who, economically, can no longer “afford to care”.

The significant reduction in physician reimbursements, the vast expanse of medical codes from some 12,000 to over 130,000, along with the cost for computerization of medical records is resonating negatively for the private physician. Additionally, for the consumer, the expansive requirements for Preventive Care, the guaranteed acceptance for medical coverage without exemption or penalty for pre–existing conditions (less of an issue in NJ due to existing State mandates) and having insurance that will require less outof–pocket costs for co–pays and deductibles, while all very appealing, can only significantly increase the overall cost of healthcare.

All of these costs will “be shared”, unwittingly adding an additional burden to the consumer, where currently, health plans may charge younger people up to five times less than what they charge older people based upon lower anticipated utilization of services. However, beginning in 2014, older people can only be charged three times more than younger people and with the anticipated enrollment of those in need of care and coverage, particularly for the more critical and previously uninsured, it is only reasonable to assume a greater cost burden to bear by all.

The “Insurance Exchanges” are to be effective October 1 of this year but it appears that this will be moved into 2014, due to a whole host of reasons. Federal subsidies will be available to those in need of individual coverage, subject to documentation of income, and employers will be required to provide certain employees currently participating in the employers’ group health insurance plan with vouchers to opt out of the employers plan to be used exclusively through the exchanges.

The ACA and State Law have mandated the minimization of health plan profits and administrative costs by requiring that 80%–85% of all premiums collected be spent on medical costs. Much like in the case of the physician, your health insurance broker continues to experience a reduction in commission and once the “Insurance Exchanges” are up and running, the reduction and/or elimination of your valued broker could be next.

Please contact us if you would like to learn more about how these changes may impact your group, or you personally. Additionally, for your further interest, we will be offering monthly dinner meetings, limited to invited guests, on this topic in varying locations on behalf of our participating County Medical Societies.

Enhancing The Bottom Line

As business owners, we are acutely aware of the shrinkage we are all experiencing in our revenues, and with our seemingly never ending accelerating expenses, particularly in our assorted insurance expenses, malpractice and health insurance being the most egregious.

While we patiently await the outcome of the Supreme Court’s response this June in the matter of the future of our Healthcare and its’ impact on our lives and respective professions, we are experiencing an accelerated interest in Consumer Driven Health Insurance products, combined with a plethora of “Ancillary” products, which are designed to “plug in the holes”.

These “Ancillary” products are quickly becoming attractive to the employer who may offer these important “fill ins” to their employees, on a discounted and pre-tax basis, while incurring no cost to the employer, other than sponsoring such a program.

There is no secret that these product offerings are designed to reduce the overall costs of the benefits, passing both the expense and, most importantly, the responsibility of the participant to apply greater diligence to the personal management of their medical needs.

It is my professional and personal belief, that, as the Health Insurance industry evolves over the next few years, commissions, like fees, will be either significantly reduced or eliminated by the carriers, leaving the consumer adrift as the conventional agent, operating on a commissionable basis, will be required to become a Registered Investment Advisor (RIA), offering professional guidance and services on a “fee for services” basis, or be forced to leave the business.

In an effort to further diversify our services and assist our physician clients and their respective County Medical Societies regarding their membership retention, recruiting and services, we have formed a marketing corporation, My Professional Member Services Association (myPMSA), to provide our clients with an independent resource.

Finally, to assist in providing discounted insurance products, such as Disability, Business Overhead, Individual and/or Group Long Term Care Insurance, as well as Discounted Professional Services with our participating legal and accounting partners, we will be attempting to seek the approval of the respective interested Societies Executive Boards for their consent to extend these benefits to their members.

Please inquire with your Society to find out if these services have been discussed with your Board members, or contact our office directly for further guidance.

NJAHU State of the State 2012-Healthcare Symposium

Savoy Associates

Wendy Ebner, Pres., NJAHU

4 AAA Drive, Suite 205

Hamilton, NJ 08691

Dear Wendy,

I am an independent broker working through Savoy Associates, as well as being an RIA and I have specialized in working directly with the independent physicians and State and Local County Medical Societies in New Jersey for the last three decades, and I am deeply concerned about our collective industries.

I was in attendance at the aforementioned Symposium and I was particularly interested in the session pertaining to Accountable Care, with Drs. Tallia & Popiel and Messrs. Forrester and Berardo.

Regrettably, we were not offered the opportunity to ask any questions but I would very much appreciate your intervention in communicating with the panel to obtain their respective responses to the following questions:

  • I recall Mr. Aron, our moderator, calling upon Dr. Popiel to provide the audience with a brief description of what ACO, Accountable Care Organizations, are and his response was essentially to inform us that it was the method to be used to determine the reimbursement to the physician, which would be based upon the health of the population/patients under his/her care.

    Given that understanding, I would like to know how the pricing could possibly be determined, as it would necessarily have to be differentiated by locality, i.e., town, city, state, etc. and who would be setting the reimbursement rates, the carriers, State Insurance Department, the Federal Government?

  • If the pricing/reimbursement becomes too diverse, i.e. more favorable reimbursements in “better/more affluent geographic areas”, how will the potential physician migration to the possibly higher reimbursement areas be controlled and who will be left to service the lower reimbursement/higher needs areas, potentially the very people who the Healthcare Reform was to assist, those with lesser means and worse projected outcomes, i.e. lower reimbursements.

    This begs the question of how end of life issues may be handled, as it may pertain to “the bottom line”.

    Could you please address this issue, as well as who will be making the important final testing decisions that may not only assist those in need of critical care but what funds, time and/or testing will be allocated in an effort to maintain a healthy life style.

  • Attentively listening to Dr. Popiel’s explanation of ACO’s, he indicated that the physician/caretaker would ultimately be held responsible for the life results of the patience care.

    I was able to catch up with Dr. Popiel immediately following the presentation and, in addition to the above questions, I asked him how the elongation of the Risk of Malpractice would be assessed, as I have personally known of my own physician clients who were caught up in malpractice issues from many previous years ago when they were residents, for which they had very little, if any, involvement, that resulted in significant malpractice pricing issues, particularly for certain specialties like Ob/Gyn, Neurology etc..

    Much to my surprise, Dr. Popiel informed me that they have not yet even addressed this issue.

    Other than the obvious concern for the physician, this unanticipated cost could be astronomical, particularly in light of today’s extraordinarily litigious society, driving even more physicians/caretakers out of the market and exponentially increasing the costs of Healthcare for all.

    How can this very important pricing issue be non-addressed? My cynical thought process leads me to an obvious but hopefully non-negotiable answer that would leave the Federal Government in charge of all Healthcare, God Forbid!

Your kind and empowered assistance in seeking the panel’s responses would be much appreciated and hopefully passed along to the members of the NJAHU and the associated concerned.


Michael G. Kirwan, CLU, ChFC, RIA

Registered Investment Advisor

HSA Update—Legislative Change(s) for 2012

Written by Michael G. Kirwan, ChFC, CLU
Published Spring 2012


To our Valued HSA/MSA Clients:

We are pleased to inform you of yet another major enhancement to your HSA/MSA Program regarding your ability to make “Tax Deductible” contributions for 2012 and beyond.

HSA/MSA Plan participants will be now permitted to contribute up to:

2011* 2012
Single Participant $3050 $3100
All Others $6150 $6250

*2011 Contributions available until 3/15/12 for C Corporations and 4/15/12 All Others, plus extensions

Additionally, there is an “Optional Spousal HSA” and, much like Retirement Plans, there is an optional “Catch–Up” provision for those age 55 and older, as follows:

  • 2011 Spousal HSA $1000
    Catch–Up Provision: $1000
  • 2012 Spousal HSA $1000
    Catch–Up Provision: $1000

(In tax years prior to 2009, your ability to maximize your HSA/MSA contributions was limited to the amount of your deductible.)

Keep in mind that your Contribution is 100% Tax Deductible, it remains in your account for future use and is “Tax–Free”, when withdrawn for Medical/Dental and an assorted number of other benefits, including premiums for “Long Term Care.”

Refer to IRS Publication 502, which can be found under the Resources tab of our dedicated HSA web site.

We are including our list of Products & Services and would welcome the opportunity to be of additional assistance to your Group or personally, for you and your family.

Thank you again for the privilege
and confidence of your business.


Health Insurance TAX CREDIT and ALERT!

Tax Credit

As a Small Employer, you may have already received your post card from the IRS notifying you of a TAX CREDIT of up to 35% of the premiums that you are (or may be) paying for the cost of monthly premiums toward your Employees Health Insurance. This TAX CREDIT is scheduled to increase to 50% by 2014.

Ex: 9 qualified employees, with average annual wages of $23,000. The employer pays $72,000 in premiums on behalf of the employees (subject to the average premium for the small group market), the credit would be $25,200 (35% x $72,000).

You must qualify for this benefit and if you would like to learn if you qualify, you can go to www.irs.gov, or feel free to please contact our office and ask for our Employee TAX CREDIT department.


Regrettably, we have been experiencing Health Insurance rate increases approaching 30%, and have assured our clients that we are doing everything possible to offer reasonable cost cutting changes to their existing plans, including our usual due diligence of shopping their plan(s) with other carriers, as we are licensed with all of the carriers in the State, and this year is no exception.

However, an additional issue has arisen for our New Jersey clients with Horizon and Aetna, and we suspect other carriers will be following their lead. In an apparent attempt to enhance their cost cutting, they have now informed us that we will no longer receive any commission/compensation unless we provide them with at least 75% of your business. Obviously, this eliminates the ability to provide you with the benefit of selecting or even continuing to offer multiple carriers, without being compensated, as we would be faced with the equivalent of “completely free service”, just a little worse than what our doctors are currently experiencing.

We have been informed that the State Insurance Department is aware of this issue and it is our preliminary suspicion that the current State Regulation that permits Small Group Employers (under 50 employees) the latitude of choosing Multiple Carriers, will be amended in the very near future, in which case, we will still be able to have Multiple Plans but only within a Single Carrier.

In light of the current economic conditions and in appreciation for the loyalty of our current and/or prospective clients and in appreciation for the privilege and confidence of their/your business, we will continue our support with exactly the same service that our clients have become accustomed to receiving, both with alternative plans and carriers, even if this means that we might forfeit our compensation. We would simply ask that you work with us and if we are able to provide similar coverage and rates with a Single Carrier, that you will be willing to do so.

In the interest of full and fair disclosure, we wanted to be certain that our clients and/or prospective clients understood the current conditions, as we have always and will continue to function on the basis of the highest integrity and openness with you. Please be sure to discuss this issue with your representative.

Acknowledging the economic condition and in appreciation of the decades of service we have enjoyed, in our role as Physician Employee Specialists, we would invite and welcome the opportunity and privilege of your business.

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