In recent weeks, Clark has been talking a lot about the $8,000 first-time homebuyer tax credit. You don't actually have to be a first-time homebuyer to qualify; you simply must not have owned a principal residence during the three-year period prior to purchase.
There's still hope, however, for those who don't meet that loose criteria. Clark anticipates that December and January will be an extraordinary time to buy.
The reason behind his prediction is that the first-time homebuyer credit only provided artificial support for home purchasing. Much like people stopped buying cars when Cash for Clunkers ended, very few people will be purchasing houses when the $8,000 tax credit runs out on Nov. 30.
And, of course, autumn's procession of holidays and the arrival of winter always slow housing activity.
In other tax credit news, the consumer champ wants to get the word out about the federal subsidy of COBRA set to expire on Dec. 31.
The feds will pay for roughly two-thirds of your health premium once you get laid off. It's just there for the asking. That can be a great help when you consider that typically COBRA costs to an individual are your employer's premium plus two percent.
Editor's note: What follows is Clark's own address on health care reform, ahead of President Obama's planned speech before a joint session of Congress.
"Madam Speaker, Mr. Vice President, members of Congress and the most beautiful First Lady in the history of the United States (Clark's wife Lane), I want to address you about health care reform and what I want you to put on my desk to sign into law.
For months, there have been angry words and both sides of the aisle have been talking past each other. But tonight I propose we go to a health care system that we can afford and that will allow market forces to finally enter health care in the United States.
We must address head-on that the federal government deficits we are running are not sustainable. The commitments to seniors with Medicare and the impoverished with Medicaid are not sustainable. We can not afford as a federal government to provide for the health care of the citizenry. It's just not possible.
In addition, our current system is based largely on luck. Either you're lucky enough to work for an employer that provides health coverage or you unlucky enough to be self-employed, work for a smaller employer or have a pre-existing condition that makes you a pariah for insurers.
Employer provided health care was an accident of history. It only exists because of a move by employers some 50 years ago to provide health care as a back-door way to give raises during the days of wage price controls -- when the feds said that employers couldn't give pay raises.
Unfortunately, it's grown into an unsustainable haphazard system. If you go back 50 years, an employee would be a "lifer" at a job and there was a reciprocal relationship between employer and employee. Today it doesn't work like that. Employers add or subtract employees at will and we pick up and move as we see fit.
But many times someone may have an illness and can't leave an employer because of health coverage. We need a new system to address the fact that we don't stay put for a long time. We need to move away from centralization of health care from government or employers.
We also need to introduce the marketplace. How can this be done? We need to create an individual health insurance market where each individual in each family buys his or her own coverage. We can't allow employers to be the sole source of safe venue for coverage, but instead have to create an insurance market based on the principles of standardized policies.
Insurers will be allowed to charge what they wish based on age/sex, but we need standard policies you can pick and choose from.
Choice is the key to driving smart decisions. Some like the structure of an HMO, some like the freedom of a traditional fee-for-service plan. Others want an in-between option like a PPO with a list of cheap in-network providers and more costly out-of-network ones. Yet others, such as entrepreneurs, love HSAs, where you take a high-deductible health insurance plan and you are essentially your own insurer for routine things.
We should allow Americans to choose from all 4 options, but the coverage should be standardized across all insurance companies so consumers can comparison shop.
Not everybody should have to buy the same HMO or the same PPO coverage. I think there should be 3 levels of choice in each -- 3 different HMOs, 3 PPOs, 3 traditional plans and 3 HSAs, each with different levels of coverage.
For example, a basic plan would provide only generics medications and no experimental treatments. Each level would have different care for you. But you would have the choice of what you want to buy.
If an employer wants to subsidize the health care with a voucher, that's fine, but you would still be in control of the purchase. So even if you left your employer, you would still have insurance.
If someone chooses not to buy insurance, that's fine too. If you do become ill, you'll be barred from buying coverage for 24 months. Otherwise, the healthy would never buy until they're sick.
The moral choice is so key here. If we rely on government or an employer to decide what coverage is good for us, we give them the power of life and death over us. But if we make our own choice, then it puts us in control and eliminates the moral dilemma of will we tax ourselves more to provide more coverage or tax less to provide less coverage.
And for those without means, both sides of the aisle seem to agree on a voucher system that would scale back as the level of income rises. I think that's a reasonable option. But I can tell you that we can not solve the cost issue with health care, without having a collision with morality, if we do not put the patient in charge. That's the key.
You must be the person who decides what coverage you want, what coverage you choose not to buy and who you buy it from. It's that simple. Health care costs account for one-sixth of our economy and we have to get control of that one-sixth, but at the same time provide true power back where it belongs -- with the American people. Thank you very much."
Whole Foods CEO John Mackey has created controversy with an op-ed piece he penned for The Wall Street Journal.
Before we go any further, it's important to note that Mackey and Clark are not the same person. Yet so many of the positions Mackey takes in his piece mirror Clark's stances. Like Clark, the CEO recognizes that our problem is not having a true free-market driven solution to the healthcare quandary.
Right now, health insurance is very confusing. It's not easy to make an individual decision based on cost. Mackey would clean-sheet the whole model and go to a system of individual purchase decisions. You would get your healthcare from the free market, not necessarily from your employer as so many of us do.
For this idea and others, Mackey has set off a firestorm. There is now a Facebook page with 30,000 members (at last check) who are part of the Boycott Whole Foods movement. And in the Northeast, people are picketing the CEO outside of stores.
Clark would not normally shop at "Whole Paycheck," as he derisively calls it because of the chain's high prices. But the idea of boycotting Whole Foods because you don't like the position of the CEO is silly.
Normally, CEOs hide behind layers of corporate lingo and bureaucracy to disguise their feelings. Clark thinks it's refreshing to hear one actually take a stand for something he believes in passionately.
When all is said and done, the idea of adding additional obligations on taxpayers to foot the healthcare reform bill -- especially when we can't pay our existing bills -- is reckless, dangerous and not possible.
Do you need to buy an individual health insurance policy because of a layoff, or because you're self-employed or work as an independent contractor? Clark knows it can be a daunting experience.
So often, the consumer champ gets calls from people who tell him what they paid for a policy and then ask him if it's a good price. There is no one answer. It depends on what's covered under the plan, the amount of the deductible and the limits therein.
We don't have what economists would call a "transparent market place." That means it's very difficult to shop apples-to-apples across the market.
The consumer champ has long advocated that coverage be standardized. In Clark's ideal world, there would be just 12 health plans offered to everyone: 3 HMOs, 3 PPOs, 3 HSAs and 3 of the traditional 80/20 splits. Every insurer would have to sell identical plans. That way you could switch to another insurer's HMO plan No. 2, for example, if your insurer's HMO plan No. 2 is too costly.
But until the day when that becomes a reality, here are 2 websites that can walk you through the process of buying an individual policy:
After his initial misgivings, Clark now reports that the Massachusetts healthcare experiment -- where they've required all citizens to have coverage -- is working better than expected. Mitt Romney was viewed as pandering to the Democrats when he agreed to implement this experiment. But really he just found a good compromise.
Clark believes the Democrats are too fervent for socialized medicine, and the GOP is too dead-set on a free-market solution. Both parties are leaving the American people behind as they get into partisan battles over the healthcare issue.
In Massachusetts, the number of people with coverage is up -- and almost all of it is not the welfare-state stuff you might expect. Romney's plan effectively eliminated redlining and allowed people with pre-existing conditions to buy health coverage for the first time ever.
The Democrats were upset that the Massachusetts law made individuals responsible for buying their own health coverage. But Clark loves it. The GOP was upset that the state had to subsidize coverage for the poor. But Clark loves that too. After all, it frees up the emergency rooms and saves money because hospitals no longer have to write off the cost of treating uninsured people.
Of course, Massachusetts didn't get everything right. But the state put aside partisanship and blazed the trail into new territory. Their experiment provides a marker for other states to try to improve upon.
In related news, The Dallas Morning News reports that Bennigan's and Steak & Ale employees/former employees are out of luck with insurance and COBRA now that both companies have gone bankrupt. One woman who is in a late stage of pregnancy is uninsured and uninsurable for her delivery -- even though she's been paying into the plan.
Clark has long believed that employer-provided healthcare is not the way to go -- and this is a perfect example why not.
Doctors are being squeezed between what they're paid from insurers and what they're paid from Medicare/Medicaid. The reality is that doctors often make no money or even lose money when they see you. So they're shifting their practices to reflect the free market.
For example, take the field of dermatology. If you have a suspicious mole, you may wait months for an appointment if you're an insurance customer. But if you're willing to pay cash for cosmetic dermatology, you can usually be seen in 24-48 hours.
The New York Times reports that dermatologists and laser-eye surgeons are even building separate waiting rooms for cash customers. They're rolling out the red carpet with fancy furniture, free lattes and more. Contrast that with the ratty furniture and long-expired magazines that fill traditional waiting rooms for insured customers.
The doctors are not bad guys; they're simply business people. You can't blame them for wanting to put food on the table. It's the current health insurance system that deserves your ire.
The Washington Post reports that health "credit reports" have been compiled on 200 million Americans. Ingenix and Milliman are 2 companies that make billions of dollars developing profiles based on your prescriptions. A "pharmacy risk score" tells insurers the risk level you pose to them as a potential customer.
Pharmacy benefits managers (PBMs) actually sell your information regarding prescriptions. PBMs are a popular option at companies because they offer cheaper prices when you get your drugs online or through the mail -- instead of at a retail pharmacy.
The info in your health "credit report" can be used by an insurer to charge you more or decline you coverage altogether.
Another wrinkle in the story comes with "off-label" prescriptions. Off-label refers to using a prescription for an unintended use. For example, your doctor may be using a depression medication to treat your stomachache. But that off-label usage could redline you with insurers who don't want to see a history of depression medication -- even though you're not depressed.
Under new federal rules, you are allowed to see your health "credit report" from Ingenix and Milliman.
However, the real problem is not the lack of privacy, but rather the way that insurers are allowed to redline you. We need insurance coverage based on community-rating standards -- that is to say, age and sex.
UPDATE: To obtain your Ingenix report, call MedPoint Compliance at 888-206-0335.
The latest stats from the Center for Disease Control show emergency rooms visits are up. Some 120 million of us visited the ER in 2006 -- the last year for which records are available.
Historically, the ER has been for uninsured people. But today, a very large numbers of insured individuals are making the trek -- even for non-emergency conditions in the middle of the day.
What's going on? Well, many people no longer have primary care doctors. So they just go to the hospital. Not a good idea. The wait is very long and you have to be assessed in triage; there's no "first come, first serve" service. The visits are also massively expensive even with insurance.
If you do have insurance, you'd be better off taking the time to pick a primary care doctor. This also allows for continuity of care and easy follow-up visits.
But most people won't get around to selecting a primary care doc. That's why there are alternatives like "nurse-in-a-boxes," which can be found at supermarkets, drug stores, Wal-Marts, etc. Nurse-in-a-boxes usually have a price list so you know how much you'll pay to be seen by a nurse practitioner.
Another alternative comes in the form of Doctor of Nursing Practice programs being offered at some 200 schools. These doctoral-level programs require nurses to take the same qualifying exam as a doctor. Clark loves that the marketplace is developing an answer to the primary care crunch.
Clark encountered political turmoil with some listeners recently when he praised one presidential candidate's health insurance plan. People see Clark as a beacon of non-political discourse in the talk radio world, so what was he thinking wading into the fray?!
Well, Clark believes that it's reasonable to step in from time to time, especially if a politician has an idea that he thinks has merit. It's not as if he's endorsing a candidate.
But in the interest of bipartisanship, Clark today spoke about another health proposal from…wait for it…2 Democrats and 2 Republicans!
Their joint proposal, the Small Business Health Options Program (SHOP), would make it possible for small business employees and entrepreneurs to receive a tax credit for buying health coverage. SHOP would also allow multi-person risk pools that would lower premiums.
Entrepreneurs have long suffered without readily available healthcare. If they do have coverage, they're often individually rated. So while an illness may initially be covered, they'll face exorbitant future premiums designed to drive them out of the insurer's pool.
The tax credit idea would extend the help that large corporations get to the world of small business. They'll have money coming back from the government to buy private healthcare.
Meanwhile, the issue of redlining is a hot one in the insurance realm. Clark wants transparency in health coverage and thinks it could be achieved if there were only 8 plans offered to small businesses: 2 HMOs, 2 PPOs, 2 HSAs and 2 of the traditional 80/20 splits.
Every insurer would have to sell identical plans, and they could charge what they wanted for them. That way you could switch to another insurer's HMO plan No. 2 if your insurer's HMO plan No. 2 is too costly. As always, Clark says the real risk to insurers if they don't shape up will come from the threat of socialized medicine.
Since the late 1980s, Clark has thought it's crazy that medications can only be dispensed when a doctor writes a prescription. Many other countries have their pharmacists write scripts and dispense the medication. The FDA is now considering adopting a similar policy. We're not talking highly addictive things like Vicodin or Oxycontin here; we're talking about two-week cycles of antibiotics and other relatively benign medications. Clark loves this idea. Doctors are already overworked and in short supply. Because pharmacists are very well-trained and knowledgeable about medications, it's almost a no-brainer to allow them to pick up some of the slack. The Los Angeles Times reports that Kaiser Permanente pharmacists already have the authority to write and fill their own scripts.
Pharmacists are a vastly underutilized resource. To treat them like clericals who just fill prescriptions isn't Clark Smart. The numbers of primary care doctors are down 50 percent, so empowering pharmacists to write prescriptions is one possible solution to the shortage. Clark knows doctors will be up in arms about his feelings on this issue, so he's ready for the fallout on the Clark Stinks forum! On a related noted, Minnesota has banned pharmaceutical sales reps from giving free gifts and meals to doctors. These kinds of sales practices subtly influence the brand choices doctors make when they write prescriptions. Now The New York Times reports that the pharmaceutical companies have come up with yet another tactic to influence the selection of scripts; they're wooing nurses and office managers since they can't get to the doctors anymore!
Navigating the healthcare maze can be an exhausting process if you or your family members are sick. Employers are starting to understand this and make healthcare advocates available to their employees as a free benefit. Healthcare advocates are usually former medical professionals who help people get what they need from the medical system. Right now about 3,000 employers offer healthcare advocate access. But very few workers even know they're entitled to such a benefit. Clark thinks of the healthcare advocacy phenomenon like he does expeditors. When you live in a city, sometimes you can hire an expeditor who knows the right people to contact to expedite any request. In the same way, healthcare advocates can assist you in getting to doctors and certain facilities that you might not be able to get into on your own. Of course, it goes without saying that healthcare should not be this difficult. Yet that's the reality. Healthcare spending accounts for 1 in every 6 dollars in our economy and it's not slowing down anytime soon.
Health benefits are becoming more and more expensive for employers to provide. The Dallas Morning News estimates that the average employee will cost their company $9,312 next year. In classic cost-shifting mode, your share is going to steadily rise too. Employer costs are up about 50 percent over the last five years, but employee portions are up around 60 percent! Healthcare accounts for 1 in every 6 dollars spent in our country. So this hot potato issue is only going to keep getting hotter. Clark advises people to pay close attention during open enrollment periods. You need to make the smartest choice you can. If you choose unwisely, you may have limited and expensive access to certain services should you become ill. The latest stats show that the average employee will pay $165 out-of-pocket every month in 2008. But Joel -- one of Clark's producers -- is 23 and can buy an individual policy for about $65 per month because of his young age. That's without any employer subsidy. Meanwhile, Clark at 52 years of age would be charged big bucks for the same policy. The cost rises as you get older. Yet older workers rarely call out sick unless they're truly ill -- unlike younger folks who take mental health days. But it all balances out because older workers tend to be out for longer when they actually do get sick.
This time of year, people choose whether to contribute to their 401k plans and pick what kind of health plan in which to enroll. With all those choices, how do you know which plan to pick? One annual report known as The Health Competence Survey found that more than half of people are in shell shock over the cost of coverage next year. People are seeing such large increases in health care costs that they are going to reduce the amount they contribute to their 401k plans. That is unfortunate, but it’s a sign of the times. So, when looking at jobs these days, consider health care, bonuses and other benefits. Typically, an employee only thinks of salary. But health care is huge these days. One alternative is a high-deductible health plans. Clark thinks these are great for people who own their own businesses and for contract workers. HSA plans are another option that Clark supports. Many people don’t have money saved, so paying the big out of pocket costs is not realistic. But for others it could be a great idea. For more on HSAs, click here.
We spend $1 out of every $6 on health care in the United States. That’s much higher than any other wealthy country in the world. Yet, we have lower life expectancies than dozens of countries out there. Where does the problem lie? A professor at MIT looked into the subject and found that most of the money was going to hospitals, doctors and pharmaceutical companies. It happens because we don’t act like consumers when it comes to our health care. Instead of asking what something costs, we just care about what the co-payment is. HSAs will help curb this way of thinking, in Clark’s opinion. Health savings accounts require that we monitor what we spend because of the way they are structured. We don’t know if these will have an affect, but Clark sure hopes so. We must change how each of us views our responsibility if we want the health care system to improve.
Clark is a big advocate of Health Savings Accounts or HSAs, a new form of health coverage for which more than one million people have signed up. The most interested are the self employed and small business owners, but more corporations are starting to offer HSAs to employees, as well. Basically, members pay a $1,000 deductible up front and, in return, their premiums go down over time. At the same time, members can put money into a tax- free HSA, which earns interest and can be used down the road to pay for healthcare. It changes things because the member becomes the customer, not the company supplying the insurance. The problem is that some companies charge a significant amount to open an account. The Web site hsafinder.com lists the 10 worst companies out there today, and the worst one charges a $235 fee annual fee. So, if you open an account with $1,000, you immediately have only $765. Other companies charge no fee at all and those are the companies you want to join. When setting up your HSA, be aware of what charges are involved. There shouldn’t be any!
Health care in the United States is outrageously expensive, as you well know. Problems started in the '60s when companies offered to provide health coverage in lieu of pay raises and other benefits. The problem was people began not caring how much it cost because they weren’t paying. The whole thing has been upside down and backwards ever since. Well, fast forward to today when there is help on the way. Health Savings Accounts (HSAs) will provide us with that alternative. These are tax-advantaged accounts that allow individuals to shop around and keep track of how much health care costs them. You can end up with a big pile of cash if you remain fairly healthy. Information is slowly trickling out about these accounts and now there is a site that lists opportunities by state. It is hsadecisions.org.
You may have heard of Health Savings Accounts or HSAs but you’re not really sure what they are. It’s the Bush administration’s main initiative in the health care area and Clark really likes the idea. Right now, the health insurer and your employer are the customer, and you’re in third position. No one cares about you and you have no say in what you pay. But with an HSA, you get a trade-off. You get much lower premiums for health coverage, but you have to pay the first minimum $1,000 for coverage. The money you don’t spend, goes into a tax-free savings account known as an HAS. It earns money tax-free and is used tax free to pay for medical expenses. Now, if you see the doctor frequently, an HSA is not a good idea. But for many, it’s a huge improvement because you will be more conscious about how much you’re spending. Kaiser Permanente, one of the largest health care companies, is getting in on the HSA game early. The company is concerned about losing customers to individual HSA plans. So, as an experiment, the company is going to allow customers to buy an HSA plan through Kaiser. About one in four Kaiser members will be eligible. The premiums will be much lower, but the doctor visits will cost much more. It won’t be the typical $10 or $15 co-payment. It’s not the traditional Kaiser business model, but Clark congratulates them for trying something new. The market place will decide if it’s a good idea or not and we’ll keep you posted.
Clark has been getting a lot of calls from listeners about Health Savings Accounts or HSAs since Congress passed the law recently. These accounts are going to become a household name in the next few years, but right now they are very confusing. HSAs look at health care very differently. The idea is to make health care more of a patient-oriented system. Right now, you fill out medical forms and you might pay a co-payment or a percentage of the bill. And you have to check if your doctor or specialist is in your “network.” With HSAs, people are now “customers.” The first certain number of dollars come out of your pocket. After that, all the bills are paid by your health care plan. The idea is that you’ll try to think of a less expensive way to get care if you’re paying for it. If we’re spending someone else’s money, we don’t really care about it. With HSAs, your deductible could be as high as $2,600 or as low as $1,000. But the great thing is it’s up to you, and it’s tax free. And if you buy a policy that has a $1,500 deductible, you’re free to put $1,500 into it and it’s never taxed. HSAs will be available from large employers, small employers and the self-employed. It’s still very early in the HSA game, but we’ll keep you posted. There are some people who don’t like HSAs, of course. They think all of the money is being funneled to the rich. But, it’s better than our current system. Of all the economic output in the United States, 15 cents on every dollar goes to health care. That’s about 50 percent higher than any developed country. So, we are basically sapping our nation’s economic growth with the enormous amount of money going to health care.
