Friends, we are at a crossroads with Health Care Reform and Government in general – big things are happening in our country with legislation, government oversight, and government control. With that said, I want to begin keeping you updated on what is going on with health reform, written from my perspective as a benefits professional .
To begin, I do believe that we need some reform for health care. Here are a couple areas that I think work needs to be done:
- Portability – I still see people who leave their jobs and employer sponsored health plan get declined for individual insurance. There are times when people get in a bind for coverage if they have a pre-existing condition and either can’t afford COBRA or COBRA runs out. We need to address individual medical plans giving credit for prior coverage and credit for pre-existing conditions if the applicant is moving from one health plan to another.
- Pricing/Underwriting control. Here in Texas, employers that have 2-50 employees have rules that protect them. They must be given a proposal for insurance. They cannot be declined for coverage. There is a maximum percentage the rates can be increased at final underwriting. They can request detailed claims reports on how their plan is running. I think that some of these rules, and other good rules like this in other states, should be adopted on a Federal level to help all size employers with their insurance.
- COBRA and Medicare. I’ve seen many employers get into situations where 1 or 2 employees with medical conditions keep that employer from getting affordable health plans, or even alternate proposals. We need to give those employers a way to get options and control their exposure – this can be done with Medicare rules, reinsurance, or other legislation.
- Early retirees – employees who retire prior to age 65 (Medicare age) have a real hard time finding affordable health coverage. If an employee retires at 55, COBRA will only cover them for 18-36 months. So that person will still need insurance, and the medical premiums are really high. Carriers are trying to create programs to address this, but legislation might help.
- Government assistance with large claimants. As a follow up to #2, many employer’s health plans get hit with huge increases and limited options because of an employee who has an expensive ongoing medical condition. What about having the government step in to help pay these claims, and get them off the books for the employer/insurance carrier? All the government has to do is provide a reinsurance policy to pay these claims. They could set up a plan that when anyone goes over say $50,000 in claims, the government steps in an picks up the rest of the tab. The insurance company would still be responsible for watching that claim to make sure all discounts are applied and there is no abuse of the program, and legislation can require this. The government could also legislate insurance pricing to prevent carriers from taking advantage of the relief. This would take the pressure off of employers and help with renewals.
- We need legislation, we don’t need a Public Plan option. Congress says a “public plan” will keep the insurance carriers on their toes to control profits. The Public Plan will compete with the Insurance Companies in the marketplace. Congress is saying that this competition will lower the cost because insurors will have to trim the fat from profits. The problem is, Congress is proposing legislation to eliminate underwriting factors that help control cost, which makes it difficult or impossible for insurors to correctly price the health coverage. The insurance companies can only lose so much before they start going out of business, because they have limited funds and depend on the public buying their plans. The Public Plan does not have this issue – if the Public Plan starts going belly up, the government just gets more money from taxpayers. So the Public Plan can keep going after all their competitors have gone out of business, and guess what? At that point there is a “single payor” and one choice for your healthcare – the Federal Government.