Quick Insurance Tips

Health care reform has mandated that certain preventive care services by paid for by our medical insurance companies for those who purchased policies sold after September 23 2010. This will have a negative impact over the short term, but may have a very positive impact over the long term.

There are specific preventive care services that are covered. You can find a detailed list of the preventive care services on healthcare.gov.

This mandate states that these services they must be paid for without any cost shares such as deductibles co-pays or coinsurance. Because of this insurance companies have had to raise prices significantly on any policies that adhere to this mandate.

(A large part of the recent rate increases had nothing to do with health care reform. Most medical insurance companies have raised their rates by 10 to 30 percent a year over the last few years. Doctors and hospitals keep charging more and health insurance premiums have to cover those costs.)

Over the long run, these mandated preventive care benefits may lower our costs for health insurance. The forty-year-old who may not have otherwise gotten an exam may be able to avoid or postpone a heart attack because of that examination. If he has a heart attack at 60 instead of at 50 because of that exam, he will save the insurance company and us a lot of money. He will probably also live a happier and more productive life.

The preventative care mandates can have several positive effects. Our 40 year old friend may be healthier longer than he would have otherwise. He may therefore be a better parent. This means that his children are more likely to contribute to our society. He may have fewer sick days and be a more productive worker. He will help us all out by paying more in taxes and by not collecting as much in disability benefits.

Unfortunately, the benefits we accrue will come after the pain is felt. An exam today may prevent a larger medical expense that might occur in the future, but the precluded event is probably one that would have happened years from now.

Prevention and Health Care Reform a Good Deal?

If we are willing to experience some pain we may have significant gains down the road because of this provision. I say thumbs up to this health care reform mandate.

So far, healthcare reform is backfiring. Laws intended to force insurance companies to insure more children have forced companies to insure fewer children.

Instead of allowing unhealthy and heretofore uninsurable children to get coverage, many insurance companies have decided to no longer offer health insurance to children who apply for non-group policies without a parent. Children who are or were approved for policies that start on or before September 22nd should be unaffected by this change.

In my opinion, our lawmakers should have seen this coming and done something differently. I’m not sure what they should have done differently, but they should have seen that the actions that they did take would have this result.

You can’t force a company to do something that would put them out of business. A law of congress cannot overcome an economic law anymore than it can overcome a law of nature.

Insuring all comers is so unprofitable that insurance companies have made mass exoduses in states where guaranteed issue laws have gone into effect. A similar situation is happening with this healthcare reform mandate.

The cost of an insurance policy for a child can be well under a hundred dollars per month. Many are as low as thirty five dollars a month. The cost of an operation for a sick child can be hundreds of thousands of dollars. This means that even one very sick child can dramatically affect the possibility of breaking even.

The insurance companies currently charge enough to cover the children who have major operations, but who were healthy when they got coverage or who got coverage at birth because they were added onto a parents’ policy.  However, the number and percentage of children who need expensive care can be paid for with the current rating structure.

When you add thousands or millions of children who will need major care in the near future, you overload the system to the extent that premiums cannot be raised high enough to pay for the care.  Why?  When you raise rates many of the parents of the heretofore profitable children will drop out of the system.  What happens next?  The rates go up again and more people drop out of the pool.  Since the parents of the children who need care are going to be more motivated to stay in the system. the ratio of healthy to unhealthy moves and keeps moving in the wrong direction.

An insurance company that opens its doors to all children regardless of their medical history will incur costs that could easily put them out of business. These children should get care. This is not my argument.

There is a honesty issue here.  We were told that we could insure everybody and it wouldn’t cost us anymore money.  Maybe that will be true in the long term, but I’m not convinced.

Maybe everyone deserves basic health care.  I’ll amend that.  Everyone probably deserves basic health care.

However, we don’t expect the grocery stores to go out of business feeding the poor. We shouldn’t expect insurance companies to give away money for healthcare to the extent that they have to close their doors either.

What are the Advantages of Universal Healthcare?

How much will universal healthcare cost the US?  It may be that Universal healthcare benefits the United States far more than it costs us.  Universal healthcare has the potential of helping people stay healthier and thereby keeping them in the workforce longer.  This can result in people spending more time being tax payear as opposed to being “tax spenders.”  This may mean increasing our tax base.  This may more than offset the increased taxes that we will have to pay to afford universal health care.

A Universal healthcare program that improves the lives of working Americans can benefit all of us.  A thirty year old working woman who today cannot afford the right preventative care may become a forty year old disabled woman tomorrow.  If she becomes eligible for social security benefits or other governmental programs at forty, she becomes a tax spender instead of a tax payer.

This woman could be dead at fifty from a cause that could have been easily and inexpensively prevented in her thirties. This of course stops her from being a tax spender, but also prevents her from being a mother.  This can mean that her children grow up to be less productive citizens than they would be otherwise.  The cost to her children cannot be measured, but there is an economic impact on our country that can be estimated.

In this regard, this is very different when compared to Medicare and Medicare Supplement mandates.  Medicare, for the most part, extends the lives of Americans who are not working.  Although this is an important goal, it extends the “tax spending” phase of the typical beneficiary.  As we improve the health of people in their seventies, we extend their lives and in so ding increase the amount of money we pay in Social Security.

The debate on Obama health care proposals and the proposals of others focuses on our moral obligations to those less fortunate.  This is a great motivator for many people.  However, even for those who would love to help, the idea of substantially increasing our taxes with no personal benefit is unpalatable.

I don’t claim to have the statistics associated with the above argument or the other pro and cons on universal healthcare.  However, there are benefits other then the warm and fuzzy ones that will offset the impact of the possibility that we will pay higher taxes with universal healthcare.

The risk of paying higher taxes with universal healthcare should be weighed against not just the benefit of easing of pain and suffering and extending life, but also the benefits of the tax dollars that might be generated by those who aren’t hampered by the current system.  The person who is disabled today because he couldn’t afford health care when his condition was preventable might be working today.  He might be paying taxes instead of collecting from social security if we had a universal healthcare system.  The woman who today who is shackled to her job because a family member is uninsurable in the private health insurance market might be the person who invents the next great thing.

Better Preventative Health Care May Reduce Our Costs

Although it is true that the poor have access to health care today, the access is biased towards expensive care one might need in an emergency medical situation as opposed to the relatively inexpensive care one might need to prevent that emergency situation.

There must be countless men and women who are currently out of work and on the dole who would love to be working and supporting their families.  Few of us want to be out of work.  Fewer of us want to be sick and out of work.

In many cases the disabled former tax payers had relatively minor preexisting conditions that turned into major disabling conditions.  These conditions were only allowed to become major medical conditions because the person couldn’t afford proper preventative care.  The cost of this care pales in comparison to the cost of losing a tax payer and gaining a “tax eater.”

A Lack of Health Insurance Options May Reduce Innovation

Many people are afraid to leave their jobs because they are afraid of losing their healthcare coverage and slows our economy. This fear keeps people shackled to jobs that no longer fit them.  A person who has the ability and experience to do something bigger may stay at a job because the opportunity to do something else means that they will leave their coverage behind.  This doesn’t happen in the other countries that use a universal healthcare system.

The next Bill Gates or Thomas Edison may be forced to stay in their current job because they have a daughter with Crohns disease or a genetic defect.  They are not going to take the risk of leaving their job and create the next computer innovation or light bulb.  We lose and they lose.

A major innovation isn’t necessary for this to hurt us.  Small improvements multiplied by thousands or millions of workers could be enough to turn our economy around and drive us forward.  If John is forced to stay with a company with no advancement opportunities because of health insurance issues, he can’t work at another company that can use all of his abilities and make that company great.  If the same is true for Jane and Barbara and Dave… we are losing a lot of production due to this forced underemployment that is driven by the current system.

If universal healthcare can increase the number of tax payers and reduce the number of “tax-eaters” we may find that it improves our economy.  By helping those in need we may be helping every American whether rich or poor.

I may be one of the only people who sell private health insurance who thinks that universal health care might be a good idea. The idea that universal healthcare will not create higher taxes is ridiculous to my way of thinking, but we may get benefits worth far more than that.

One of the things that I’ve noticed is that people are often shackled to their employers when they or a family member has a medical condition. I strongly believe that this keeps many potential entrepreneurs from living their dreams and in so doing keeps them from enriching us all.

Also older workers may become more hireable. Today an employer may look at an older applicant and see him or her as a potential drain on their health insurance and be afraid to hire him. If we implement a system where the burden of healthcare expenses is spread differently, older workers may be able to find work more easily.

Another issue is that many people today are unable to work due to a health condition that they cannot afford treat or that could have been prevented if they had access to healthcare. Instead of being a financial drain on society, that person could be working and paying taxes.

Will socialized medicine work in America? I don’t know. There are both pros and cons of universal healthcare in America. I have my fears. I think that there are more ways to do it wrong than to do it right, but I believe that eventualy we will find the way that is best. Socialised medicine will eventually be here in the US. It’s everywhere else. We can resist it if we want to but eventually we will be implementing the Obama health care plan or the health care plan of another leader. We should be prepared and do what we can to make it work for all of us.