Medical retainer agreements for routine care won’t be considered ‘insurance’

Medical retainer agreements between physicians and patients will not be considered “insurance” in Michigan under a recently passed bill signed into law on Jan. 15 by Gov. Rick Snyder. The idea is to ensure that this innovative way for families to obtain routine medical services at lower costs will not be stifled by the extensive state regulatory structure currently imposed on conventional health insurance policies that cover expensive non-routine care.

The rationale for this alternative is that while insurance coverage may be advisable for catastrophic illnesses and injuries, it makes less sense as a way to pay for routine primary and preventative care.

Under medical retainer agreements, patients make monthly payments to a physician who in return agrees to provide a menu of routine services at no extra charge. Because no insurance company stands between patient and doctor, the hassles and expense of bureaucratic red tape are eliminated, which have resulted in dramatic cost reductions. Routine primary care services (and the bureaucracy required to reimburse them) are estimated to consume 40 cents out of every dollar spent on insurance policies, so lower premiums for a given amount of coverage are another potential benefit.

Advocates of this “back to the future” free market approach say that retainer agreements often lead to higher-quality medical care. Advantages can include shorter waits for appointments and physicians being able to provide more time and attention to patients.

“What’s not to like about a very inexpensive relationship that covers all your family’s routine health care needs with no burdensome insurance paperwork, copays and bureaucracy? This can be liberating for doctors too, who are freed up to focus purely on patients’ needs rather than insurance company and bureaucrats’ needs,” said Jack McHugh, legislative analyst with the Mackinac Center for Public Policy. “The new law ensures ‘direct primary care’ arrangements won’t be strangled at birth by extensive insurance regulations that don’t make sense for such arrangements. The concept is supported by all sides in the health policy debate, and are even authorized in Obamacare ‘exchanges’ when accompanied by a high deductible insurance policy for serious conditions.”

Medical retainer agreements, which are also sometimes referred to as “direct primary care,” “concierge medicine,” “fixed fee agreements,” “retainer medicine,” “membership medicine,” and “cash-only practice,” can vary widely in their structure, payment requirements, and form of operation. In particular, they can differ in the level of service provided and the fee charged.

Senate Bill 1033, now Public Act 552 of 2014, was sponsored by Sen. Pat Colbeck, R-Canton, and Sen. Mike Nofs, R-Battle Creek, and defines a “medical retainer agreement” as “a contract between a health care provider and an individual patient or his or her legal representative in which the health care provider agrees to provide routine heath care services to the individual patient for an agreed upon fee and period of time.”

The measure specifies that to be considered a ‘medical retainer agreement,’ the agreement must:

  • Be in writing.
  • Be signed by the health care provider or agent of the health care provider and the individual patient or his or her legal representative.
  • Allow either party to terminate the agreement on written notice to the other party.
  • Describe and quantify the specific routine health care services that are included in the agreement.
  • Specify the fee for the agreement.
  • Specify the period of time under the agreement.
  • Prominently state in writing that the agreement is not health insurance.
  • Prohibit the health care provider and the patient from billing an insurer or other third party payer for the services provided under the agreement.
  • Prominently state in writing that the individual patient must pay the provider for all services not specified in the agreement and not otherwise covered by insurance.

Under the legislation, routine health care service means screening, assessment, diagnosis, and treatment to promote health or detect and manage disease or injury; medical supplies and prescription drugs dispensed in the health care provider’s office; and lab work including routine blood tests or pathology screening.


How Michigan Blew a Hole in its Budget

Handing out taxpayer dollars to large corporations was a bipartisan effort

The value of Michigan tax credits by year.


Companies cashing in special tax credits have caused the state to bring in a projected $454.4 million less than previously expected. Here’s the history and problems with the program.

Michigan House Democrats recently issued a press release that vilified corporate tax subsidies the state of Michigan has been giving out for 20 years and pinned the blame on Republicans.

The press release called the tax subsidies given through the Michigan Economic Development Corporation “disastrous” and House Democratic Leader Tim Greimel said the policy not only doesn’t work, “but is downright dangerous.”

“Republicans have allowed the MEDC to become a runaway organization that is devastating the state’s financial health, while not holding it accountable for creating more jobs,” House Democratic Floor Leader Sam Singh said in the press release.

What the Democrats failed to mention was that Democratic Gov. Jennifer Granholm created a press-release economy based on the MEDC’s “corporate giveaways.”

Giving selective corporate tax credits was a program started under Republican John Engler’s administration in 1995, and greatly expanded by Granholm in her eight year tenure as governor.

Called the Michigan Economic Growth Authority (MEGA) program, during its first 13 years, 1995 to 2007, the state of Michigan made 358 deals and awarded an estimated $2.6 billion in tax subsidies to corporations.

In the three-year period from 2008 to 2010 the state made 320 deals and awarded an estimated $2.5 billion in tax subsidies. The MEGA tax credit was discontinued in 2011, but the state is on the hook for paying out tax credits for up to 20 years. Gov. Rick Snyder has kept the policy of awarding tax subsidies alive via other state incentive programs.

State agencies attempt to project every year how much of these long-term tax credits will be redeemed by the selected companies in any given year. The state expects much larger payments in the current 2015 fiscal year and 2016.

The state says it pays about $300 million a year in MEGA payments to companies. Higher numbers are projected in the future but it’s not clear how much higher.

“Sending taxpayer money to large business projects has been a bipartisan affair,” said James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy. “It is unnecessary and unfair.”

Greimel didn’t return an email seeking comment.

Personal Libert Digest Newbusiness startup concept

Gallup CEO: Numbers show American entrepreneurship is dying

The chairman and CEO of Gallup authored the summary attached to a Tuesday data report whose numbers indicate (or, if you’ve been paying attention, corroborate) a troubling truth: Existing American businesses are dying off at a faster rate than new ones are growing.

In “American Entrepreneurship: Dead or Alive?” Gallup CEO Jim Clifton attempts to stress the urgency of this simple fact:

We are behind in starting new firms per capita, and this is our single most serious economic problem. Yet it seems like a secret. You never see it mentioned in the media, nor hear from a politician that, for the first time in 35 years, American business deaths now outnumber business births.

The U.S. Census Bureau reports that the total number of new business startups and business closures per year — the birth and death rates of American companies — have crossed for the first time since the measurement began. I am referring to employer businesses, those with one or more employees, the real engines of economic growth. Four hundred thousand new businesses are being born annually nationwide, while 470,000 per year are dying.

The business “birth rate” compared with its “death rate” — that’s a metric that even the simplistic mainstream press can understand. Clifton includes this graph, which tracks the Census data over time:














Just by looking at the graph, it’s obvious that this is a trend that accelerated apace beginning in 2005 — and, since 2009, dying businesses have still reliably outnumbered startups. So why hasn’t this been widely discussed in the 24-hour news cycle?

“My hunch is that no one talks about the birth and death rates of American business because Wall Street and the White House, no matter which party occupies the latter, are two gigantic institutions of persuasion,” Clifton notes. “The White House needs to keep you in the game because their political party needs your vote. Wall Street needs the stock market to boom, even if that boom is fueled by illusion. So both tell us, ‘The economy is coming back.’”

Fat chance, he says — as long as political leadership (he never explicitly names Bush or Obama, but he doesn’t have to) espouses false optimism and drive-by camera fodder in deference to the quick and easy vote:

Our leadership keeps thinking that the answer to economic growth and ultimately job creation is more innovation, and we continue to invest billions in it. But an innovation is worthless until an entrepreneur creates a business model for it and turns that innovative idea in something customers will buy. Yet current thinking tells us we’re on the right track and don’t need different strategies, so we continue marching down the path of national decline, believing innovation will save us.

I don’t want to sound like a doomsayer, but when small and medium-sized businesses are dying faster than they’re being born, so is free enterprise. And when free enterprise dies, America dies with it.

Read the rest of Clifton’s great piece at Gallup.



by  Kate Scanlon

Since President Obama signed the Affordable Care Act on March 23, 2010, supporters have called the legislation “the law of the land,” and the president says the health care debate is “over.”

But in a new book, one journalist points out that laws can change.

In “Overcoming Obamacare: Three Approaches to Reversing the Government Takeover of Health Care,” released Monday, author Philip Klein argues that the president’s signature law must be repealed. But repeal alone is not enough, Klein says. Opponents of Obamacare must come to agreement on an alternative.

Solely repealing the law still leaves Americans with a “broken health care system,” according to Klein.

Obamacare’s supporters often claim conservatives propose no alternative. The truth, Klein argues, is that so many plans and points of view have been offered from the right that they’ve failed to agree on just one.

“Many of the differences among the competing proposals within the right-of-center health care policy community are [rooted] in a principled disagreement over what the appropriate role is for government in the first place,” writes Klein.

In “Overcoming Obamacare,” Klein conducts an analysis of Obamacare alternatives based on his years covering the health care debate as a reporter for the Washington Examiner.

“[C]ontrary to what Obama likes to argue, the health care debate is not ‘over,’” writes Klein.

Klein says that objections to Obamacare can be separated into three separate schools of thought:

1) The Reform School: made up of people who believe that repealing Obamacare is “unrealistic,” but seek ways to guide the legislation in “a more market-oriented direction.”

2) The Replace School: comprised of people who believe that a full repeal of the law is a “necessity,” but only if an alternative is presented that can make health insurance widely affordable and available.

3) The Restart School: those who believe in fully repealing Obamacare, then using the resulting “clean slate” to allow the free market to bring down costs.

“Not every proposal explored in this book would require a full repeal of the law,” writes Klein. “But all of them, in some way, seek to reverse America’s current trajectory toward a government takeover of health care and instead push the system in a more market-oriented direction.”

Nina Owcharenko, director of the Center for Health Policy Studies at The Heritage Foundation, contributed to the book. She says Klein’s work brings to light new ideas to fix the American health care system:

“Klein does a nice job identifying the alternative approaches to the Affordable Care Act and I believe showcases that these alternatives offer Americans a better health care system than we have today,” Owcharenko tells The Daily Signal.


There has been no ‘tax cut mania’ in Michigan


By Tom Gantert

According to media reports, taxpayers may be thinking they are in the midst of a tax-cutting spree by the government.

A Jan. 2 Michigan Radio headline read: “Snyder tries to chill tax cut fever”

Earlier in 2014, John Austin, the director of the Michigan Economic Center at Prima Civitas Foundation as well as the president of the Michigan State Board of Education, wrote an article for Bridge magazine titled: “Constant tax cuts killing Pure Michigan” in which he bemoaned Michigan’s “tax cutting mania.”

But in terms of an actual reduction in a tax rate, the state has enjoyed such an occurrence just one time in the past decade. That was when the Michigan Business Tax was converted to the Corporate Income Tax in 2011. The Michigan Business Tax consisted of a gross receipts tax, a corporate income tax and a surcharge. The Corporate Income Tax eliminated the gross receipts tax and the surcharge.

James Hohman, assistant director of fiscal policy for the Mackinac Center for Public Policy, says that Proposal 1 of 2014 deserves special mention in the complex discussion of just what is a tax cut. The Mackinac Center estimated that Proposal 1 will cut personal property taxes by $500 million a year.

“Proposal 1 of 2014 eliminated personal property taxes on small business establishments and will phase out these taxes on industrial businesses. These taxes will still remain for larger commercial entities and utility providers, and even industrial businesses benefiting from these reductions will still pay some taxes on their business equipment,” Hohman said. “When it comes to easing the burden of taxation, there are only two reforms that apply over the decade, both during the Snyder administration.”

The series of changes to the personal income tax wouldn’t qualify as a tax cut. In 2007, legislators increased the personal income tax from 3.95 percent to 4.35 percent as part of a “temporary” rate hike. However, that rate hike was made permanent in 2012 when the personal income tax was reduced from 4.35 percent to 4.25 percent, but not the original 3.95 percent. Also, future rate reductions were cancelled in the process.

It should be noted that the Michigan state budget (including local, state and federal dollars) has increased from $39.91 billion in fiscal year 2004-05 to $52.30 billion in 2014-15.

And the state funded portion of the Michigan budget has increased from $26.3 billion to $30.0 billion during that 10-budget span.