Last year it became possible for an unhealthy, uninsurable person to get guaranteed health insurance.  The government enacted the Pre-Existing Condition Insurance Plan (PCIP).   It’s available.  It’s affordable.  And the benefits aren’t too bad either.  Sounds too good to be true, doesn’t it?    Read on.

My uninsurable client qualifed and voila! — on March 1st he had pretty good health insurance.    But because of his escalating mental health problems, he forgot to pay the premium and his coverage was cancelled.

Under other circumstances, he would be allowed to pay the back premium and get his coverage reinstated.  But because this is a government run program the guidelines are different.

PCIP won’t allow payment of back premium.  PCIP won’t allow reinstatement.  PCIP will only allow my client to file an appeal… one that could take up to two weeks and has the possibility of being denied.    If the appeal is denied, my poor, suffering client cannot re-apply for 6 months.

He is unwell.  He cannot begin treatment.  He cannot continue treatment.   And he may not be able to get another PCIP policy for 6 months.

Because in order to qualify for the government run PCIP, one must be uninsured for 6 months or more.

And this is from the folks who want to give us government run health care insurance.

The Wall Street Journal is saying that insurers are adding costs to health insurance premiums to pay for health care reform measures.    The insurers are adding 5-9% MORE to your premiums due to health care reform.   But why?

1. No underwriting starting in 2014. That means no one can be rejected. Thus, we move from “insurance” to a utility organization which the government can dictate, including fees too.   If the insurance company can’t underwrite the policy then they can’t prevent bad risk.   Thus everyone who is healthy will pay for those who are unhealthy.   Is this bad?   Perhaps.   It depends on your politics.   If you believe that everyone should pay for everyone else then it works great.   But think about it.   Our founding fathers wanted true freedom to succeed or fail. We are taking the ability to succeed or fail away and promoting mediocrity.

2. If you read the article closely you will find the Obama Administration is saying that this concept is out of line, however it actually makes perfect sense.   If you cover everyone, where you weren’t before…there are more costs. Thus insurance companies will pass on the costs to you!

3. So the Obama Administration knew that this was going to happen.  When you extend coverage to everyone you also increase cost.   Economists agree that when the health care bill was conceived and passed the costs of coverage for everyone would go up as well.   This bill helps people access insurance but doesn’t address the issue of cost.

4. Raising premiums at this juncture in the economy is hard on the economy and preventing hiring.

5. Mandating insurance carriers to pay out 80% of premium dollars on claims will cause premium increases.  Currently, insurance companies have a profit margin of 4% or less. Forcing them to pay out claims causes them to increase premiums to compensate.   It’s just basic arithmetic.

This is important for you to recognize as we move forward with health care reform costs are going up.

The Insurance Mom wants to give Ric a warm chocolate chip cookie for his awesome insight!

Something sort of good has actually been included in the federal government’s “stealth” care reform bill.    As of September 23, 2010, insurance companies must include annual preventive care benefits in all of their insurance plans.   And, these wellness services must be at no cost to you.   No co-pays, no deductibles.

But, these new benefits will not include every test in the book that your doctor wants to run.    The services that are included are defined by the U.S. Preventive Services Task Force, American College of International Physician recommended vaccinations, and Health Resources and Services Administration recommended screenings and preventive care for infants, children and adolescents.   For more information take a look at the government’s new website.

Some insurance plans already include full annual preventive care benefits, and those will not change.   These new preventive care benefits will be added to existing plans that do not meet the new federal guidelines.

The Insurance Mom has a question.    How do you think your rates are going to be affected when the insurance companies have to start paying for all of these new and improved benefits?    Hmmmm?

Better keep that chicken soup handy!

A couple of weeks ago, the government launched its health insurance website.     Click on the “Understand The New Law” tab to find information about plans and costs which might be available in your state.

If you’ve had no health insurance for at least 6 months, have been declined for health insurance and have a letter from an insurance company to prove it, you may be eligible for the government-run high risk health “insurance.”

However, 29 states, including California, have opted out of the federal government program.   Instead, by September 23rd, California, and other states, will launch their updated Major Risk Plans with new federally mandated benefits and rates.

These high risk plans — both federal and state — will provide coverage through 2014 when all insurance companies in the country will be mandated to offer health insurance to everyone, regardless of your health status.

BUT… between now and 2014, watch out!  If you already have private health insurance, I predict that rates are going to skyrocket.   The insurance companies are going to have to fill the coffers and gird their loins in preparation for 2014, when the bulk of the “stealth” care reform goes into effect.    If insurance companies are forced to sell to everyone, then everyone must buy.  It’s the only way the system can work.

And if you think that buying health insurance through the government’s Exchange network is going to be fun, then think again.  There will be no one to look out for your best interests.   No one, except some far off 800 number, to call for help.   And, quite possibly, no brokers to give you personal guidance, service, advice, counsel, or a warm hug.

1.  A parent whose young adult child is about to be taken off of your health insurance plan because they’re all grown up (well done!), or

2.  A young adult who is about to be taken off of your parents’ health insurance plan because you’re all grown up (good job!),

… then this is good news is for you!

There is a provision in the newly enacted health care reform legislation that will allow young adults up to age 26 to stay on their parents’ health insurance plan, regardless of marital status or the availability of other health insurance.

While this provision doesn’t take effect until September, 2010, there are four insurance companies which have announced they will immediately comply with the new law, without waiting until September.

Humana, Kaiser Permanente and UnitedHealthcare say they will immediately allow young adults to stay on their parents’ plans.    And WellPoint (in some states, that’s Blue Cross) says they’ll implement the new provisions starting June 1.

Here’s an easy-to-read description about this portion of the new law.   I promise it won’t make your eyes bleed!

Remember, health insurance is how you pay for health care (aka medical care).   Health insurance and medical care are two entirely different things!  But the politicians have done an amaaazing job of blurring the definitional lines between the two.

The “Stealth Care” Reform bill has done absolutely nothing to stem the cost of medical care or prescriptions.  These are the two main cost drivers in health insurance.

Basically, it’s all about simple arithmetic, folks.

2010

• Subsidies begin for small businesses to provide coverage to employees
• Insurance companies barred from denying coverage to children with pre-existing conditions
• Children permitted to stay on their parents’ insurance policies until their 26th birthday

2011

• Set up long term care program under which people pay premiums into system for at least 5 years and become eligible for support payments if they need assistance in daily living
• Drug makers face annual fees of $2.5 billion

2013

• New Medicare tax on individuals earning more than $200,000 a year and couples filing jointly earning more than $250,000 a year
• Tax on wages rises to 2.35% up from 1.45%
• New 3.8% tax on unearned income such as dividends and interest
• Excise tax of 2.9% imposed on sale of medical devices
• Medicare pilot program begins to test bundled payments for care, in a bid to pay for quality rather than quantity of services

2014

• Create exchanges where people without employer coverage, as well as small businesses, can shop for health coverage.  Insurance companies barred from denying coverage to anyone with pre-existing illness.
• Requirement begins for most people to have health insurance.  Subsidies begin for lower- and middle-income people.  People at 133% of the federal poverty level pay maximum of 3% of income for coverage.  People at 400% of the poverty level pay up to 9.5% of income.  (Poverty level currently is about $22,000 for a family of four.)
• Medicaid (in CA, Medi-Cal), expands to all Americans with income up to 133% of federal poverty level.
• Subsidies for small businesses to provide coverage increase.  Businesses with 10 or fewer employees and average annual wages of less than $25,000 receive tax credit of up to 50% of employer’s contribution.  Tax credits phase out for larger businesses.
• Employers with more than 50 employees that don’t provide affordable coverage must pay a fine if employees receive tax credits to buy insurance.  Fine is up to $3,000 per employee, excluding first 30 employees.
• Insurance industry must pay annual fee of $8 billion (rises in subsequent years).
• Independent Medicare board must begin to submit recommendations to curb Medicare spending, if costs are rising faster than inflation.

2016

• Penalty for those who don’t carry coverage rises to 2.5% of taxable income, or $695 whichever is greater.

2017

• Businesses with more than 100 employees can buy coverage on insurance exchange, if states permit it.

2018

• Excise tax of 40% imposed on health plans valued at more than $10,200 for individual coverage and $27,500 for family coverage.