Here are some thoughts I have on Healthcare Reform.
Any type of healthcare reform should include the best interest of the conusmer and not special interest groups. I have worked in the industry for a long time servicing clients from 1 to 10,000 and I have see some states (States control insurance contracts) get insurance reform correct and other states think putting forward consumer mandates is a good thing. The only thing mandates and reforms do is increase the cost of insurance, whether it is in the form of higher premiums or increase in member cost sharing. Whether it is Autism coverage, diabetic supplies, or guarantee issue, the only thing that happens is costs go up for everyone. Carriers just offset these costs to the consumer. We all want quality coverage at an affordable price. Consumers should review the value of the policy they are purchasing. Here is an how a $1 is spent with insurance carriers, 85% of the premium dollars collected pay claims 5% pay Goverment Taxes and other programs. 7% marketing and Admin 3% is profit and other expenses
Special Interest groups have effected the way insurance and reforms are implemented with carriers and plans. Each time a mandate is implemented, it costs about 1% to 2% per premium year per year.
This brings me to my next point, we all want to have the freedom to go where we want to get care without a lot of hassles from the insurance carrier. We want to have the carrier pay for everything and not have a consequence for these visists. It is like giving someone a check to have them fill out the any amount. In the 90s, HMOs were the product of most clients. As the HMO carriers put members through managed care and cost controls, the consumer did not like these controls and the market adjusted and became more flexible. Carriers were just trying to tame healthcare inflation but the consumer wanted other products. This has resulted to illustrate our current state of affairs. Double digit increases in premium is what we are seeing.
We are discussing reform to our healthcare system, which could lead us to creating the largest HMO called the federal gonvernment. There will be no competition with the federal government, private insurers will go out of business. (See Crowd Out on the reasons why a public option will ruin the private market) Consumers will have no choice in any matters that concern them on how there healthcare is delivered. Facilities and offices will close that once delivered care. We will see rationing of medications and the cost of getting these medications go up. There will be less supply, thereforre, costs go up. If we use are current Medicare system to deliver care, states with less residents will be the hardest hit. Since most of the reimbursment system is done through county claim history, premiums differ from county to county. Counties with fewer people will ultimately receive less dollars to deliver care. So the only way to adjust, is to have less staff at local hospitals, less testing equipment, and less doctors. Meanwhile the demand for these services will keep rising. We want to use the Medicare system but why would we use a system that is going bankrupt. Why does healthcare reform have to include a public option? Let’s look at solutions in the private market.
In a study, most consumers can tell you the average price of an oil change but not the average cost of an MRI. Most consumers do not know where the best facilities are to get care. Quality care and dollars spent do not correlate for effective health outcomes. Consumers should know the cost of the premiums, and have more cost when accessing care. If the consumer had more dollars of there own at risk, we would see a decrease in premiums. Consumers would not spend money they do on healthcare if it was there money. The notion of a good policy with little to know out of pocket costs should not correlate. Consumers will think the plan they are on is good because they pay $5 for a doctors visit. Not realizing they may be spending 20% more in premiums than they need to.
Consumer directed Health plans (CDHP) are a solution for most people. Purchasers of these programs have a large deductible and a tax qualified account to pay for expenses. Preventive care is covered on these plans so plan members can get routine tests done for little to no expense. If they have a catastrophic event, insurance will cover it. We buy insurance to offset risk. We should not buy insurance for a $10 copay. If you cannot afford a $75 doctors office with your savings from the CDHP, you have other issues.
As a result of these plans, we have seen lower premiums, lower medical trend, and consumers are getting the care they need. These plans do work for the majority of people. Work with your agent to determine the best strategy for you and your family.
I will post more at a later date.