Catastrophic events are often paid for through the shared risk policyholders accept when they voluntarily purchase a health insurance plan through their local health insurance company. Policyholders also expect a certain level of potential benefits if and when needed. These are the principles of all insurance, the risk and reward shared by all involved.
Several states such as NY and NJ have laws on the books requiring health insurance companies to offer, “guaranteed issue,” medical insurance policies, including community rating rather than individually calculating the risk. And how has this worked out in each state? Premium increases that are skyrocketing, so high that many are priced out of the health insurance market. Healthy people see the high medical insurance premiums as a scam and refuse to buy. With guaranteed issue medical plans an applicant can always buy insurance without the worry of being denied coverage when they get sick or injured. This results in even higher premiums. https://higginscompanies.com/faq/group-health-insurance-faq%e2%80%99s/
Along comes something called the, “individual mandate,” included in the new health care reform bill. With everyone participating in the health insurance risk pool, health insurance in general will become more affordable according to the federal government. But there are the problems of Medicare and Medicaid that have not been dealt with in this legislation. These two programs are huge money losers for hospitals and physicians. Doctors and hospitals must charge those with private health insurance plans more to make up the financial shortage caused by the government’s low reimbursement rates for Medicare and Medicaid patients. Nearly 30% of doctors won’t take new Medicare patients and 50% won’t take new Medicaid patients. Imagine the lines when millions more are pumped into the Medicaid system after employers drop their group health insurance policies. The reality is that there will be few physicians accepting Medicaid and Medicare insurance. As an example, the Mayo Clinic stopped taking Medicare patients last year at one of their locations because they lost nearly one billion dollars thanks to low reimbursement rates from Medicare. The country is short 50,000 doctors today and we will be short 150,000 in ten years. Massachusetts, the state health insurance plan our nation copied, has waiting lines twice the national average. The doctors that do accept the millions of newly enrolled patients in Medicaid will have to charge even higher rates than they do today to private insurers because of the increased number of Medicaid patients which are money losers. Again, these added expenses for doctors and hospitals will be passed onto the private policyholders. Today these higher rates equate to an additional $1800 a year for each family health insurance policy. That figure will be much higher once Obamacare kicks in. Don’t forget the new $1000 in taxes per policy either thanks to this legislation, and the future does not look promising regarding health care.
Consider these facts, then realize that ObamaCare hasn’t even gone into effect yet. Hopefully the next few years before 2014 will be spent by our elected officials and the courts working on the many problems this health insurance law has.
Michael Higgins
602.405.8769
An Arizona health insurance broker.