The Other Side Of The Story

The Insurance Mom loves her colleagues around the country… they are a very smart bunch!  Especially Ric Joyner, a benefits specialist in Madison, WI, who writes an excellent benefits blog.      If you value your hard-earned money, I really want you to take a few moments to read how health care reform will impact your life and your money.

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!