THOUGHTS AND REFLECTIONS ON THE LATEST DEVELOPMENTS IN HEALTHCARE REFORM

By Scott Golden, CFO
Golden & Cohen
scott@golden-cohen.com

Each month, our goal is to keep you up-to-date on the latest in the healthcare reform debate. This week the discussion took a new turn when “the public health insurance option died on Thursday, December 10, 2009, after a months-long battle with Senate parliamentary procedure,” as the Huffington Post put it. “The time of death was recorded as 11:12 a.m. Eastern Standard Time.”

The public option would have created several national insurance policies administered by private companies but negotiated by the Office of Personnel Management. If, however, private firms were unable to deliver acceptable national policies, a government plan would be created.

Indeed, it was the biggest roadblock preventing the bill from moving to a final vote.

Then on Monday, Senate Democratic leaders said that they were prepared to drop a proposed expansion of Medicare and make other changes in sweeping health legislation as they tried to rally their caucus in hopes of passing the bill before Christmas. Under the proposal, uninsured people ages 55 to 64 could purchase Medicare coverage. 

Still, the debate rages on and we want to bring you up-to-date on what the new bill means for you, our clients.

The Uninsured

Both bills expand coverage for the uninsured, which obviously does not affect our current clients directly because, obviously, all of our clients have insurance. However, there will be a cost to provide insurance for every American and that will impact us all.

How we pay for this will likely take many forms, and all will probably lead to higher taxes for some or all of us. Certain types of group plans may be taxed, as well.

The Senate bill has also advanced the idea of opening up Medicare to people age 55 or older who meet certain criteria. There are no details released on this proposal. However, already there has been opposition to this concept as it adds to an already massive entitlement program. Additionally, many people believe that this might be the pre-cursor to the development of a “back-door” public option.

The Insured

One reason the public option is so controversial is that it puts the government on a level playing field with private carriers. The Congressional Budget Office estimates that the cost for the public plan will be higher than the private carriers. In order to build this governmental system, there will be a cost paid for by some revenue source.

In my opinion, that's what makes it so controversial, but this option does not appear to put either groups or individuals who are currently insured in a better financial position. However, there will probably be a prohibition against pre-existing condition limitations and on low lifetime maximums, and that could help some people. This concept is still at issue and remains a sticking point between the House and Senate.

Group Plans, in general

My biggest beef with both bills is that they don’t address the base cost of healthcare as well as the growth of premiums over inflation. Both bills encourage (through financial penalties) groups to offer coverage to employees. This could make business more difficult as some groups do not offer coverage or pay less than the government might mandate.

My forecast

As mid-term elections get closer, the politicians will feel even more pressure. The next several months should make for a great political soap opera. We'll keep you posted.

GUEST COLUMNIST: ATTORNEY BRIAN LEVENTHAL

When it comes to contracts, nothing is standard

By Brian H. Leventhal, Esq.

“It looked pretty standard to me.” In my years as in-house counsel, I cannot tell you how many times people from all different departments at all different levels said those exact words to me when I questioned them about signing a contract without legal department approval. Of course, the reason the contract at hand had been brought to my attention was that some matter of dispute had arisen.

It is this common mistake that brings me to my words of caution for today…in the world of contracts, nothing is “standard”. Certainly, there are legal provisions that those of us in the field would agree are commonly found in contracts of the same type. But, the notion that a contract is a mere formality or that it contains only “standard” language can cause a company serious trouble down the road.

Trust me, I have been on the cleanup end too many times. Just because it is in smallish print, dual column format, and the other party called it their “standard form”, does not mean it is safe to sign or that it is not negotiable.

Manage Your Risk

Contracts are a mechanism to set out the basic business arrangement between two parties and to allocate risk between them.

However, many business people focus only on the former, figuring that the contract is just a matter of course and they can safely ignore the “legal mumbo jumbo.” Some do not consult with an attorney because they fear slowing down the process, while others simply don't want to spend the money.

Instead, these business owners opt to rely on trust in the other party, because of a long standing relationship or reputation, or on common law to protect them if something goes wrong. Many simply ignore the possibility that anything could go wrong at all.

Well, I am here to tell you that trust is fine, but a good contract is finer. A properly drafted and negotiated contract is likely to limit the impact of a future dispute to a fraction of the impact the same dispute might have if either no contract was used or if a party simply signed the other party's “standard form” without having it reviewed by an attorney.

Be Safe, Not Sorry

As Benjamin Franklin once said, “An Ounce of Prevention is Worth a Pound of Cure.” My work is living proof of that wisdom. Remember, litigation takes months and years while contract negotiation usually takes hours or days.

The bottom line is that making sure you have good contracts in place is a fundamental best practice that all businesses should follow. Of course, one contract policy does not fit all companies, but the general value proposition and awareness of the risks/benefits should be universal. Do not make the mistake of measuring success by how quickly things get done. Measure it by how well they get done.

ABOUT BRIAN LEVENTHAL

Brian has more than 12 years of experience assisting corporate clients with a variety of legal and business issues. He began his private practice in 2004 after helping to sell Teligent, Inc., a once public telecommunications company where Brian had worked for six years as Senior Counsel. In 2006, he dedicated his practice to a single client and became General Counsel to WashingtonVC, LLC (www.washingtonvc.com), a private equity firm that incubates early stage technology companies.

There, he was responsible for managing the company's legal affairs, including negotiating and structuring investments. He also played a key role in business development and operational management for the firm and its portfolio companies. Brian resumed taking on additional clients in 2009. Currently, his law practice focuses on complex commercial transactions, private equity, corporate governance and outsourced general counsel services.

Brian received his JD with honors from Washington College of Law at the American University, and his BA from the University of Pennsylvania. He is a member of the Maryland Bar and the District of Columbia Bar.

For questions about this article or help with specific contracts or other business law matters, email Brian at brian@leventhallegal.com. For more information about his practice, visit www.leventhallegal.com.

This article is intended for general information purposes only and should not be construed as legal advice with respect to any particular set of facts or circumstances. It is not intended to create, nor does any reading of this article create, an attorney-client relationship.

CUSTOMER UPDATE:
RX 'N GO

Golden & Cohen introduces a Revolutionary Product to Meet Rx Challenges of Employers and Employees

By Jack Cohen, COO
Golden & Cohen
jack@golden-cohen.com

In October, we told you about a new partner of ours, Rx ‘n Go, a solution to the rising costs of health care and prescription coverage. This will come as great news to employers who have been forced to cut back on employee benefits, because with this new program they may not have to.

Rx ‘n Go offers discounted drug pricing to the employee, and typically provides the employer with substantial overall savings.

Through its focus on 90-day prescriptions, mail order delivery, and the use of high-quality generic drugs, Rx ‘n Go is able to pass along low costs for maintenance medications. And because it's not insurance, there's no monthly premium, no back-end claim for the employer to pay, and no extra fees.

Please click here to learn more about Rx ‘n Go.

Employers: If you're an employer who doesn't provide insurance or prescription coverage for your employees, Rx ‘n Go can help. With our high-quality, low-cost generic savings program, you can now offer an affordable prescription option to your employees.

Brokers: If your clients are depending on you to help them optimize their benefits program, why not include Rx ‘n Go as a value added option? With more than 1,100 drugs across nearly every therapeutic category, Rx ‘n Go could be a valuable supplement to any benefits program. Both the employee and the employer typically enjoy drug savings.

Group funding options available: Various funding options are available. The employer can pay for all, some, or none of the cost of the Rx ‘n Go prescription program. Let us conduct an Rx Cost & Utilization Review to show you how to build a savings program that’s right for you.

Co-branding opportunities: Benefit providers can display their brand identity on the Rx ‘n Go Website for all click-through referrals from their Website.

Check it out today and start saving on your prescriptions: www.golden-cohen.com/rxngo.

Have questions? Send me an email: jack@golden-cohen.com