Healthcare reform is not free!

protecting families with healthcare reform

Healthcare reform isn’t free, but neither is protecting our families.

To all the folks that have contacted me to tell me healthcare reform isn’t free, I know. From a comment on my Healthcare Reform Benefits page,”Lots of benefits and everything is free…NOT!”. People against the Affordable Care Act (ACA) don’t like the references to no charge/no cost preventive office visits to screen for diseases. In addition, they are concerned about the mounting debt that it might create.

Did I say life was free and easy?

First, healthcare reform is not free and no one ever said it was. How many government owned, operated or regulated services and products do we interact with every day that are paid for with taxes, but for which we don’t actually receive a specific invoice.

  1. Roads
  2. Bridges
  3. Clean rivers and lakes
  4. Clean air
  5. K – 12 public school system
  6. Homeland security
  7. Afghanistan war
  8. Iraq war

Where are the howls of protest to these “free” items. “Oh, please give me back polluted rivers and streams, the cost of clean water is killing me.” That is a response to free public goods I have not heard. Unlike the above public free goods, individuals and families will receive a specific invoice every month or deduction just for health insurance.

So many sleepless nights worrying about profits

But the area that I see the absolute most philosophical disconnection is the defense of the insurance companies. From the page comments, “The insurers have to eat the cost of first-dollar preventive care services and how do they recoup their new expenses? What other choice do they have besides raising premiums.” Oh, please excuse me while I entrust my health to a company that at its core is guided by shareholder ROI.

My insurance company is smarter than my doctor

doctor holding an injection

Is this Doctor more worried about a regulator or a lawyer?

The larger philosophical question is if we accept that business decisions should be a governing factor in determining health care outcomes? We are very insistent that doctors and patients should be making healthcare decisions, but we abdicate this position when it comes to acquiring health insurance.

Health insurance has become the de facto gatekeeper to healthcare services. Without insurance you can’t get comprehensive care. The big question is how much of your healthcare decisions do you want dictated by business? Is it “OK” for an insurance company to deny a life saving procedure because it would cost them too much money?

Did you just say that!

Folks, please look at what you are saying and writing. You are implying that business is more important than the welfare of your neighbor. Really? Are you serious? Much of the ACA is centered around preventive medicine. There is no argument that catching cancer early has better patient outcomes and cost less money. Yes, this costs money. But we shouldn’t be tripping over dollars to pick up a dime.

If you can’t get insurance or it is too expensive, then you have a high probability of never even having a doctor-patient relationship. Is it a family friendly policy that allows insurance companies not to cover the basis of humanity: child birth? Insurance companies currently have the right not to cover maternity in their individual plans in several states.

Jobs, Jobs, Jobs

Another argument that gets thrown at me is the ACA is job killing like this from a Facebook post.

warehouse workers for wellness

Sorry Dudes! I need your labor to make money, but I refuse to hire employees because you might get health insurance and keep your family healthy.

“I do blame the President for the job killing ACA.”Let’s see we our having the biggest economic downturn in our lifetime, what shall I do? I know! I will propose a massive new piece of legislation that will cost a ton of money and make employers afraid to hire anybody!!!!!”

Health insurance is evil, IBM just doesn’t know it

If any employer who doesn’t hire a necessary employee because of the ACA is out of touch with reality. The ACA is partially responsible for hiring in the healthcare services market place today. These jobs can’t be sent to another country. Plus, if offering healthcare to your employees is so expensive and evil why do all of the major U.S. corporations do it?

There is ample evidence that providing health insurance to your employees results in higher productivity and profits. While all the doomsayers are screaming about the cost of the ACA, they need to look at how good basic healthcare has helped them or their families remain productive.

  • randy owens

    Having worked in the Property Casualty Auto Insurance industry for 25 years, I was always envious of how little the Health Insurers were regulated compared to auto insurers. Due to auto insurance reform under Proposition 108 in the late 80’s and subsequent onerous regulations set up by the California Department of Insurance, auto insurers became heavily regulated. A limit was set on their profits and each rate adjustment, up or down, had to be approved by the DOI. In interpreting what a fair return for auto insurers should be, one judge arbitrarily compared it to a public utility which was allowed to make about an 11% rate of return. Many carriers were afraid that there would not be enough profit in the California market and several carriers left the state. What followed in some companies such as Mercury Insurance were record profits. Our loss Ratios were always at least in the low 90’s and several years in the low to mid 80;s. Employee bonuses were very healthy in those years. For the last several years,, the auto insurance market has been very competitive. Companies were charging lower premiums to gain or keep their market share.

    The DOI regulations of 1992 set out certain specific procedures to which insurers had to adhere. One of these was the 30 day status letter to the claimants explaining what was needed to conclude their claim. This was a good procedure which most companies had in their policy manuals but often the letters did not go out at exact 30 day intervals. The new regulations allowed the DOI to fine an insurer for each late status letter, not just for one claim or claimant, but for each claim or claimant including insureds when they had outstanding first party claims. The amount they could fine an insurer was $15,000 for each late letter! Our claimants would several times complain that they were getting “papered to death” and to please stop sending the letters. But we had no choice. There was much pressure on the claims representatives to get these letters out. There were several other regulations which redefined the Unfair Claims Practices Act and which were in the public’s best interests.

    Now compare that to health insurers. The DOI does have strict requirements for selling health insurance but for some reason this did not include reviews of premiums charged. Health Insurers made a killing in the 90’s, Agent and Broker bonuses were huge and perks such as trips to Hawaii were common ‘excesses” but still did not limit profits like they did with auto carriers. Hopefully the 80/20 claims ratio limit under the ACA force health carriers to reign in their premiums but if what is happening now as far as expensive policies with very few benefits like the one a friend of mine has which has an 1800 calender year deductible and a $2000 PER DAY hospital deductible

    • Randy Owens

      (Continued from above) it is likely that insurers will keep writing plans with meager benefits as they are doing now. I hoped that the ACA loss ratio profit limits along with required coverages would work out but as I understand by Kevin’s article above, even with pre-existing conditions the health carriers can cherry pick and send the less healthy candidates to the insurance exchanges. In auto insurance the DOI had set up an assigned risk pool which they farmed out to insurers according to market share and other factors. The applicants would then be assigned to individual carriers based on market share as well as other factors. Unfortunately for the high risk drivers, only minimal liability limits were available and no first party coverages such as collision or comprehensive were included.

      I only wish that the CA DOI would regulate Health Insurers to the same level of scrutiny as they do with auto carriers.

      • Kevin Knauss

        The individual and family health insurance market has received little regulation compared to the auto insurance because of its relative market size. Virtually everyone drives a car, but maybe only 20% of the population has an individual plan and you are not required to carry it. Employer group plans are far more regulated and have better benefits. Another level of regulatory escape is that CA has two regulating department: CA Department of Insurance for PPO plans and the Department of Managed Health Care for HMO plans.

        The more moving parts you have, the easier it is for industry to confuse the issues and get favorable regulations. Multiply that by 50 because each state regulates its own insurance industry. Hence, the ACA to bring some uniformity to the market place through out the U.S.

    • Kevin Knauss

      There is nothing like a historical perspective to jerk us back to reality. Thank you Randy, keep commenting to keep us in balance.

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