The Primary Misconception that Promulgated the Affordable Care Act (ACA)
THE PREEXISTING CONDITION FALLACY
The primary concern of those who believe in the ACA is the “Preexisting Conditions” elimination. However, the Preexisting Conditions feature of prior and current policies has never been the problem.
Most Major Medical Policies carried a Preexisting conditions clause in its policies, excluding by rider or waver, for conditions which existed before the policy’s effective date and if the applicant did not disclose a preexisting condition prior to the policy being written.
What appears to not be understood in Individual Health Plans is the fact that an exclusion for preexisting conditions applied only to those who did not have prior health insurance and such exclusion applies only for a limited Time (i.e. six months, 12 months; dependent upon the specific insurer. For those who had prior health insurance and the preexisting condition was stated on the individual’s application, there would be no exclusion for preexisting conditions if the insurer accepted the applicant.
The problem thus was whether the Health Insurer’s program for individual plans was one which would accept a new applicant for insurance, based upon each insurance company’s specific underwriting rules. The preexisting conditions exclusion protected insurers for individuals who did not previously have health insurance from adverse selection. Meaning, the individual did not have to purchase insurance until an illness manifested and the individual wanted coverage to cover them for after the illness started. Thus the Health insurer had only one opportunity to protect their assets from adverse selection and that was to ultimately not accept a new application who previously had insurance but with chronic or critical illnesses or disease or to not accept those who had no prior health insurance.
Insofar as Group Health insurance, the Health Insurance Portability and Accountability Act, or HIPAA limited the ability of employer sponsored groups and insurers to exclude individuals from health insurance coverage. Yes, in some policies the preexisting exclusion applied if an individual employee of the group policy did not have prior insurance. But such exclusion applied only for a limited time and as such HIPAA made it possible for the individual to be provided insurance and after the time limit have full coverage for their condition.
So it must be stressed, the Preexisting condition exclusion never was the problem and it was only a limited period of time problem and applied only to those individuals or those under group policies who did not have prior insurance.
Since the “Preexisting Condition” is the feature stressed as being the major dilemma of individuals and families acquiring adequate Health Insurance Coverage, there is no solution but to retain coverage for all preexisting conditions as a feature which is inclusive and shall remain a part of Health Insurance Coverage in the private Sector. Yet, the preexisting condition feature IS NOT the problem but rather the fact of (1) Whether an insurer is willing and able to provide Health Insurance for those with critical illnesses ( i.e. cancer; renal disease; heart disease; HIV; etc) and (2) The ability of the Insurer to cap the limit of liability they are responsible for, which will be addressed hereinafter.
The Primary PROBLEM of the Affordable Care Act (ACA) which has caused premiums to accelerate
NO CAP RESTRICTION ON THE LIMIT INSURERS/ OR THE ACA MUST PAY WHICH THE PRIVATE SECTOR CANNOT OPERATE UNDER WITHOUT SOME FORM OF REINSURANCE OR INSOLVENCY WILL PERSIST.
CAPPED LIMITS ON HEALTH INSURANCE POLICIES:
Although the Health Insurance Benefit Period under most PRIVATE SECTOR policies has been written for a period of one to five years, a LIFETIME BENEFIT has been provided under Comprehensive or Major Medical policies of $250,000 to $1,000,000 or more based upon the size of the Insurer, the number of homogenous exposures, the insurers profitability and reserves and the ability of the insurer to negotiate health care pricing with hospitals and doctors. There has to be some profitability over and above an insurer’s expenditures for its overall operations. The consensus of many believing insurer’s are rich and an insurer should not be able to make a profit, is wrong in the free world. If profit is made research may be made into new products and there is more competition, thereby lowering costs.
By not being able to cap the amount of health insurance provided, and being forced to take on too many critical cases, this will lead the private sector insurer to fold in either removing itself from the health marketplace or non-renewing health insurance for the individual; forcing that individual to secure an alternate Health insurer to cover them;
And after three to four declinations by private health care insurers which are unwilling or unable to undertake an insured by reason of the insurers foreseeable dilemma of its using another lifetime limit under its policy and having to at some point Non-renew the individual’s health insurance coverage, ALL PRIVATE SECTOR INSURERS WILL HAVE NO ALTERNATIVE BUT TO DECLINE COVERAGE FOR THE INDIVIDUAL. That is the main reason that the ACA MUST INCREASE ITS PRICING BECAUSE IT MAY NOT DECLINE COVERAGE AND IT IS REQUIRED TO INCLUDE EVERYONE INCLUDING HIGH RISK HEALTH CASES .
The Excess Insurance Solution:
- The Health Insurers in a competitive marketplace must be allowed to limit its exposure, to what may be acceptable to retain the Insurer in the marketplace. This may require a new Product “Excess Health Insurance: or an Assigned Risk Pool for those INDIVIDUALS OR FAMILIES who are non-renewed or have no further underlying health insurance.
Similar to Liability Insurance Policies which have a specific limit to which the Insurer limits their exposure, even with reinsurance, it is suggested that a new product be entered into the Health Insurance Marketplace, mainly an “EXCESS COMPREHENSIVE HEALTH INSURANCE POLICY”.
This Excess Comprehensive Health Insurance policy would be purchased at the time the individual insured purchases their “Basic”, “Major Medical” or “Comprehensive” Health Care Underlying Policy.
The Excess Comprehensive Health Insurance policy, similar to homeowners, or auto or commercial umbrella liability, may include a self- insured retention (if the underlying is not a “Comprehensive” policy but rather a basic) for those items which would have been included under a Comprehensive Health Care Policy, or a deductible or coinsurance percentage if both the underlying and the excess provide similar coverage.
This would allow the Health Insurance Company to purchase re-insurance from the reinsurance marketplace. Likewise if the Excess Policy is purchased at inception, there would be no adverse selection, allowing Insurers to provide coverage to those who feel the initial limit of Basic, Major or Comprehensive Insurance may not be sufficient for themselves or their family.
The policy could also provide excess coverage after a deductible for the underlying policy which may have only set amounts for specific procedures but for which an insured is responsible for the excess payment to healthcare providers. This would be similar to a supplement but would offer further protection for those who cannot afford comprehensive coverage but must rely on basic coverage. This then would be less of a gamble for the individual or family who could not afford the high price of a comprehensive health policy.
Perhaps the Government could join the private sector in providing reinsurance if the reinsurer’s cap has been exhausted.
The Assigned Risk Pool Solution:
Right now under the Affordable Care Act (ACA) the Government covers anyone and everyone. Although I do not agree that it is the “RIGHT” of every person to be provided Health Insurance, I do believe that every person should be provided the PRIVILEGE to secure Health Insurance for themselves and their family members at a cost that they are willing and able to undertake.
Although I will go into detail about Socialized Public Insurance, for now, this section shall be based upon a solution for the Private Sector Insurance Companies:
If an individual or family is cancelled by their insurance company by reason that the underlying insurance lifetime benefit limit has been exhausted and subsequently, they were unwilling or could not afford excess health insurance, they should be allowed some form of insurance, if they do not qualify as a veteran or they do not qualify for Medicaid or Medicare.
Instead of Public Administration of the ACA, it is suggested that a Pool of All Insurers be formulated to provide health insurance coverage for those who do not qualify for Medicaid or Medicare, or who are not a veteran.
This would be an Assigned Health Insurance Risk Pool, represented by every insurer selling insurance in the United States, with specific building(s) located in various regions.
If an Insured is cancelled or non-renewed and is declined for coverage by three Insurance Companies, the applicant would submit an application for coverage along with the three declinations to the Assigned Health Insurance Risk Pool.
The board representing all insurers of the region would then review the application and determine which Insurance Company the applicant’s health insurance coverage would be assigned to. This determination would take into consideration, (1) the insurance company’s financial strength to undertake additional new applicants based upon the critical or chronic health problems already carried by the insurer and (2) an equal share of homogeneous general, chronic and critical new applicants to each insurance company so that not one company is given the bulk of the largest health risks in comparison to its overall book of business (3) the insurer’s diversity of other insurance products .
This will require actuarial determination of fair rates and deductibles which may be required based upon the critical and chronic individuals entered into the pool and whether there may be some limitations as to certain coverage aspects or higher deductibles and coinsurance required.
Since ultimately those assigned to the Assigned Health Insurance Risk Pool may again exhaust further caps on an insurer’s limit of insurance provided (1) This Health policy may not be cancelled or non-renewed (2) If one insurer’s limits are again exhausted, it will transfer or be reassigned to another insurer and (3) in both cases, either higher rates, increased deductibles, or coinsurance percentages will be required by the assigned insurer or subsidies provided by the Government. These Government subsidies may be required in the form of reinsurance or subsidies on each individuals similar to those provided by the ACA now and the National Flood Insurance Program. For those on Welfare due to disabilities, who are unable to pay for insurance, Medicaid is still available through the States.
I believe the experts from the private Sector are more capable than Government Public Plans which provide limited coverage; high deductibles; higher premiums and the inability to provide the type of healthcare required of specific regions.
THE ACA IS NOT A SOLUTION FOR ALL
Currently the ACA is comprised of those with Chronic and Critical health problems and the reason the premiums are steadily increasing is because those that are young and those who genetically are of sound health with only concern of accidents who do not or do not expect chronic or critical health problems will not purchase health insurance, gambling that nothing will happen to them.
Likewise, working class individuals in the private sector are provided “Group Insurance” along with Health Savings Accounts in many cases and are not included in the ACA for a fair balance of insureds. This means ACA is comprised only of those who NEED insurance, thus causing the increase in premiums due to ADVERSE SELECTION rather than covering all people of various age groups because the premiums suggested would be too high for the young, who make less money to afford such insurance; thus, the young and those genetically healthy gamble with their health rather than purchasing insurance.
Self insurance for larger firms also provides employees with specific group insurance which meets an individual’s needs so they do not need the ACA.
BUYING HEALTH INSURANCE COVERAGE
ACROSS STATE LINES and ALLOWING YOU TO KEEP YOUR INSURANCE ONCE YOU LEAVE A GROUP PLAN (PORTABILITY) MAY HAVE ITS SOLUTIONS BUT ALSO ITS PROBLEMS
This is feasible, but only on a regional basis. But this is not the only solution for Insurers to comply with the Concept of competitive premiums.
Stating that a person who has insurance in one State who moves to another state where that Insurance Company is not licensed, will not allow the person to retain the same insurance POLICY, BUT INSTEAD THEY MAY HAVE TO SECURE INSURANCE THROUGH AN ALTERNATE INSURANCE COMPANY LICENSED IN THE STATE TO WHICH THEY MOVE.
All insurance companies are not licensed to do business in every State and each insurance Company must write insurance policies which comply with the individual states’ statutes and rulings. And this would be required to be adhered to by insurance companies even if insurance was mandated by the Federal government to be sold over state lines.
If an Employee is terminated or leaves his or her employment, instead of being offered health insurance under COBRA, it would be an asset if the Employee could retain the same policy from the same insurer he or she had while employed. However, if the Employee moved out of A State where the insurance company was licensed to do business to another state where the Insurer was not licensed to do business, portability would become a problem. Instead, the former Employee would have to secure alternate insurance, be provided coverage under an another Employer Group plan or be offered insurance under COBRA for a period of one year or until alternate insurance is secured.
An Employee leaving his or her employment with a Self-insured Health Insurance Company would have to seek alternate insurance but would have temporary one-year insurance through COBRA
Each region has specific coverage which is offered by insurance companies in the region.
The most important SOLUTION for an Insurance Company with limited financials and reserves and which is insuring within only a specific region is Diversification of Products. This diversification of products may include Medicare Supplemental Insurance, Accident Insurance; Critical Insurance Supplements, Life Insurance, Annuities and sometimes Property and Liability Insurance Products so the Insurer is not overwhelmed by losses in one line of insurance. By having diverse products the Smaller Insurers are able to remain solvent and increase their market share of competitive products
The Insurance under the ACA has no diversification and in fact has many features which are restrictive such as requiring a person over 74 year of age to secure an acceptance by the ACA prior to being treated for an injury due to an Accident.
UNDER THE PRIVATE SECTOR YOU MAY CHOOSE THE TYPE OF HEALTH INSURANCE COVERAGE WHICH YOU MAY AFFORD AND WHICH YOU NEED:
Unlike the ACA, Individuals and Family Units may choose the insurance product which best suits their needs rather than purchasing what the ACA provides, some of which is not necessary to the average individuals.
Insurance Companies will have to indicate the amount of insurance under their policy which is considered the “lifetime benefit” (i.e. $250,000; $500,000; $1,000,000) and whether that limit applies to an individual or all family members under the Health Insurance Policy. Insurance, unlike the ACA, WILL NOT BE UNLIMITED , but for the average insured who does not have a family, a lower lifetime benefit may be less expensive than a higher benefit limit.
Premiums will vary based upon the Deductible chosen per policy year, whether you may be responsible for coinsurance and a separate deductible, and the type(s) of Medical Expense coverage which may be desired.
Of course, the Individual’s choice in Health Care Coverage may be attributed to what may be the amount in his or her Health Savings Account. This way, the individual may have more leeway in choosing coverage, lifetime benefit limits, deductibles and coinsurance factors.
THE TYPES OF COVERAGE
ONE MAY CHOOSE FROM:
BASIC MEDICAL EXPENSE PLANS INCLUDE:
- Basic Hospital expense – reimbursing policy owners for the cost of hospital confinement. Many such policies provide coverage for outpatient care if it is provided in lieu of hospitalized care). This covers daily room and board and other miscellaneous expenses such as x-rays, lab fees, dressings, use of the operating room and supplies..
Surgical Expense – Cost of surgeon’s services and Anesthesiologist expense
Physicians’ (non-surgical) expense – Office visits and the care by a physicial while the insured is hospitalized for non-surgical reasons Benefits are based on the indemnity approach such as a flat fee of $50 per visit, but not to exceed the actual charge, if less. These policies typically carry a number of exclusions such as X-rays, drugs and dental treatment.
Nurses’ Expense Benefits
Convalescent Care Facility Benefits
Under the Basic Plans, Dollar Amount Maximums are listed
If the Maximums payable by the Insurance Company are insufficient, the Insured will pick up the amount which was not paid by the Insurer.
MAJOR MEDICAL EXPENSE PLANS:
Major medical insurance has made it possible for many people to achieve substantial protection against the high cost of medical care while providing broad coverage under one policy.
- Hospital Room and board – covering hospital extras, nursing services in-hospital or at home, blood, oxygen, prosthetic devices
Ambulance Service AND more
Major medical expense Insurance picks up where basic medical expense insurance leaves off either as a supplement to a basic plan or as a comprehensive stand-alone plan.
A. SUPPLEMENTAL MAJOR MEDICAL :
1. Provides coverage for expenses that are in excess of the dollar maximums specified in the basic policy
- In addition because of the broad coverage associated with most major medical supplements, it likely will cover expenses that are either beyond the scope of the basic plan or excluded from coverage in the basic plan.
B COMPREHENSIVE MAJOR MEDICAL:
Comprehensive major medical plans cover virtually all medical expenses – hospital expenses, physician and surgeon expense, nursing care, drugs, physical therapy, diagnostic x-rays and laboratory services, medical supplies and equipment, transfusions and more – under a single policy.
C. MAJOR MEDICAL PLANS WHETHER SUPPLEMENTARY OR COMPREHENSIVE REQUIRE DEDUCTIBLES AND COINSURANCE for the Insured to absorb some of the medical expenses incurred. This allows the Insurance Company to avoid small claims and keep the cost of premiums down. (Basic Medical Plans do not include Deductibles or Coinsurance but place Limitations as to the maximum benefit which will be payable)
- Major medical policies carry a “CALENDAR YEAR” Deductible. Once the deductible has been met in a calendar year, all claims submitted will be treated for the balance of the year without regard to any deductibles.
Some Insurers include “A PER CAUSE Deductible” meaning a deductible is charged for each sickness or each injury.
- After the Deductible is satisfied, coinsurance which is a sharing of expenses by the insured and the insurer is implemented.
The Insurance Company usually pays 75 percent or 80 percent and the insured pays the remainder (i.e. The insured has a $200 deductible and 80/20% coinsurance: The Medical expenses incurred are $1,200 – $200 deductible = $1,000 x .20% = $200 (Insurance Company pays $800). In this scenario, the Insured pays the $200 deductible with an additional amount of $200 paid for his share of the coinsurance participation sharing.
3. THE STOP LOSS FEATURE OF THE MAJOR MEDICAL POLICY:
- Provides a safeguard for insureds
May cover 100 percent of eligible expenses after an insured incurs a specific amount in out of pocket costs
- Another policy may specify that the coinsurance provision applies only to the next $5,000 of covered expenses after the deducible is paid, with full coverage for any remaining expenses.
OFFERING MORE CHOICES WILL INCREASE THE NUMBER OF INDIVIDUALS WHO ARE WILLING AND ABLE TO BUY INSURANCE
• One can choose a basic policy or a major medical supplement to the basic policy or a comprehensive policy.
• One may choose an insurer with a lower or higher maximum lifetime benefit
• One may choose a per injury/cause deductible or a calendar year deductlble
• One may choose a 20 or 25 percent coinsurance sharing or after a deductible a maximum amount to which coinsurance applies.
AND FAMILIES WHO REQUIRE A HIGHER MAXIMUM LIFETIME BENEFIT than what the insurance company is willing and able to provide should be allowed to purchase a new form of EXCESS HEALTH INSURANCE through another insurance Company. This would include a Lifetime benefit over and above the Underlying benefit provided under the Basic or Major Medical Policy with one insurer by increasing the benefit with another insurer.
The Excess Health Insurance Policy may also be designed to cover such items as the underlying coinsurance amounts the individual is responsible for after a specific deductible is paid or if there is are set amounts payable under the underlying health insurance policy, thes, the excess policy would pick up an additional amount after a deductible is paid under the excess policy.
A NEWLY FORMULATED STANDARDIZED POLICY COULD BE OFFERED BY INSURANCE COMPANIES
Under a Newly formulated policy written through a Private Insurer, your declarations would include what specific Parts of Coverage you have chosen, The deductible which applies and the applicable coinsurance percentage. And the declarations of the Health Insurance Policy would show what was included in plain words under each of the major coverage parts. Everything which is included would be marked.
Therefore the Insured would have no question of what may be included but reminded to go into the coverage parts for further explanation of the actual benefit..
It is important the declaration show the calendar deductibles, the coinsurance, and the maximum lifetime benefit of the primary Health Insurance Policy.
In each of the aforementioned, some insurers may or may not cover all of the underlying items or an Insured may not desire being covered for some of the underlying items covered under Hospital Inpatient or Outpatient coverage, etc
Hospital Outpatient Insurance including
Hospital Care (inpatient care) including a semi-private room, meals, general nursing and drugs and other hospital services and supplies, including coverage for care in acute care hospitals, critical access hospitals, inpatient rehabilitation facilities, long-term care hospitals, inpatient care as part of a qualifying clinical research study and inpatient mental health care given by a psychiatric hospital or other hospital (FOR WHICH LIMITS MAY BE IMPOSED or number of days for which coverage applies FOR SPECIFIC AREAS SUCH AS MENTAL HEALTH, OR limited days of hospitalization after which payment must be made by the Insured, etc.
___ Surgical Fees and Expenses
___ Prenatal, Pregnancy and delivery Expenses in Hospital
__ Hospice Care if you are terminally ill including
All items and services needed for pain relief and symptom management, Medical nursing and social services, Drugs, Certain durable medical equipment, Aide and homemaker services if your doctor certifies you are terminally ill and have a life expectancy of six months or less.
____ SKILLED NURSING FACILITY CARE INCLUDING
semi-private rooms, meals, skilled nursing and rehabilitation services and other medically necessary services and supplies furnished in a skilled nursing facility after a 2 day minimum, medically necessary, inpatient hospital stay for a related illness or injury. This is usually limited to a number of so many days benefit period and coinsurance may apply per day after a specific number of days.
__ OUT-PATIENT MEDICAL INSURANCE
Covers medically necessary doctors’ services, outpatient care, home health services, durable medical equipment, mental health services and other medical services including preventative services.
Preventative Services shall include abdominal aoritic aneurysm screening, advance care planning alcohol misuse screening and counseling, ambulance service, ambulatory surgical centers, behavioral health integration services, bone mass measurement, breast cancer screening, Cardiac rehabilitation, Cardiovascular disease behavioral therapy, Cardiovascular disease screenings, Cervical and vaginal cancer screenings, Colorectal cancer screenings, colonoscopy. Depression screening, diabetes screening, Lung Cancer Screening, Kidney disease education services, Prostate cancer screenings, Prosthetic/orthotic items/ Pulmonary rehabilitation; Rural Health Clinic services, Second surgical opinions, sexually transmitted infection screening and counseling, shots, speech-language pathology services, surgical dressing services, smoking and tobacco use cessation counseling, Tests other than Lab tests such as X-rays, MRJ’s CT scans, EKG/ECGs and other diagnostic tests.
Includes Continuous Positive Airway Pressure Therapy, Defibrillator (implantable automatic), diabetes self-management training, diabetes supplies, durable medical equipemt such as oxygen equipment and supplies, walkers, hospital beds, etc., EKG or ECG Screening, Emergency Room/Department Services for an injury or sudden illness which gets worse; Cataract Surgery; Glaucoma tests, Flu Shots, Foot exams and treatments, Hearing and balance exams, Hepatitus B Shots and HBV infection screening, Hepatitis C Screening, HIV screening, Kidney dialysis services and supplies, Laboratory Services, Eyeglasses (after Cataract Surgery, Mental Health Care (outpatient) Obesity Screening and counseling, Physical Therapy, Outpatient Medical and Surgical services and supplies and Pneumococcal shots
__ Chemotherapy in a doctor’s office, freestanding clnic or hospital outpatient setting for people with cancer
__ Transplants and immunosuppressive drugs
__ Chiropractic Services
__ Chronic Care Management Services
__ Clinical Research Studies
How a policy LANGUAGE is formulated should be left to the insurance companies and the State in which they do business and not the Federal Government. The Federal Government should however provide guidelines and suggestions for standardization. A standardized policy would be beneficial and if a consensus may be made AS TO WHAT IT MAY COVER it would assist individuals in knowing what they CAN AND ARE WILLING TO PURCHASE AT A COST THEY CAN AFFORD and what they are unwilling to buy.
CHOOSING THE TYPE OF HEALTH INSURANCE PROVIDER MAY LIKEWISE PROVIDE A SAVINGS TO AN INSURED
COMMERCIAL INSURANCE PROVIDERS:
Policy Owners obtain medical treatment from whatever source they feel is appropriate and per the terms of their policy, the doctors and hospitals submit their charges to the insurer for reimbursement.
HEALTH MAINTENANCE ORGANIZATIONS (HMO) – offers prepaid health care services to its subscribing members under a GROUP INSURANCE PLAN or FOR INDIVIDUALS or FAMILY MEMBERS. Subscribers pay a fixed periodic fee to the HMO and are provided a broad range of health services from routine doctor visits to emergency and hospital care. The care is rendered by physicians and hospitals who participate in the HMO stressing preventive care and reducing the unnecessary hospital admissions and duplication of services. NO DEDUCTIBLES are assessed and if they do the charges are nominal.
PREFERRED PROVIDER ORGANIZATIONS (PPO) – is a collection of health care providers, such as physicians, hospitals and clinics at pre-arranged prices. Unlike HMO’s PPO’s operate on a fee for servies rendered, not on a prepaid basis. PPO providers are normally in private practice and have agreed to offer their services to the group and its members at fees that are typically less than what they normally charge. DISCOUNTED FEES ARE NEGOTIATED IN ADVANCE.
For businesses and individuals usually provided by Large corporations which will self-insure their insurance plans for their employees. Labor unions, Fraternal Associations and possibly specific employment groups in the future could self insure their medical expense plans through dues and contributions for members. These plans are usually administered by insurance companies or other organizations that are paid a fee for handling the paperwork and processing the claims. Some groups adopt a minimum premium plan designed to insure against a certain level of large, unpredictable losses, above and beyond the self-insured level. These MPP’s are available for a fraction of the premiums which would be paid to insurance companies.
MULTIPLE EMPLOYER TRUSTS (MET)
An Employer who wants to get coverage for employees from a MET must first become a member of the trust by subscribing to it. The employer is issued a joinder agreement, which spells out the relationship between the trust and the employer and specifies the coverage to which the employer has subscribed. It’s not necessary for an employer to subscribe to all of the coverages offered by a MET.
Benefits are provided on a self-funded bases or fund benefits purchased from an insurance company. The trust, rather than the subscribing employers, is the master insurance contractor.
The Affordable Care Act will never be as competitive as the Free Market of Private Health Insurers, nor will it provide innovative solutions to healthcare. In Government Programs, you may only purchase what is provided by the Government program, you may no longer see your own doctor, the deductibles are too large for most policy owners to afford and the premiums are continually increasing, causing for further Government subsidies which ultimately have to be paid by the Taxpayers. Furthermore, there is no diversification of other insurance products which only leaves health insurance which if there are sufficient losses in one line of business would cause insolvency or more taxpayer money.
Although the specific wording used today that has been the crux of formulating the ACA by the government is “Preexisting Conditions”, the Preexisting Conditions exclusion was never the problem as to why certain people were not offered health insurance.
Preexisting Conditions are automatically provided for individuals if they have had prior insurance and a new insurance carrier agrees to provide the individual with a new policy. The Preexisting Conditions follow.
If an Applicant was accepted by an Insurance Company either on an Individual or family Plan or a Group Plan, the Preexisting condition if one never was provided insurance prior to being accepted as a policy holder was never the problem. In other words, if you did not have prior insurance, a preexisting conditions exclusion would be included but only for a limited time and thereafter you as a policyholder would be granted all coverage afforded under the health insurance policy.
Although the reason for this feature was to stop adverse selection (buying insurance only after one has a critical or chronic disease or an accident which would be similar to crashing your car and then buying insurance to cover the damage) the preexisting conditions exclusion was not a problem. Instead, there was a waiting period of six to 12 months in which your preexisting condition would not be covered and once that period was over, a policyholder would be granted benefits under the policy.
The Democrats however believed the Preexisting Conditions feature of the policy was the problem and we can allow them to believe that because obviously they are ignorant of the fact that the real problem is whether an Insurance Company is willing and able to provide health insurance to an individual applying for health coverage.
The secondary problem is there is no Cap or limitation as to the amount of benefit paid. The benefit under the government program is unlimited, except for restrictions some of which made no sense whatsoever. Prior to the ACA, insurers based upon their own ability to provide benefits would include lifetime benefits of $250,000, $500,000 or possibly $1,000,000. Now some of these insurers are unable or willing to provide policies which have no cap or limitation as to what they must pay. This is a major problem, especially with respect to critical diseases or illnesses which are ongoing for hundreds of thousands of dollars and there is no lifetime benefit restriction.
There are two solutions I am suggesting relative to bringing back the free market of insurers and still providing all to have the ability to be provided the health insurance benefits they need at a price they may be able to afford.
- An Excess Health Insurance Policy, which would allow for an Insured to purchase a secondary policy over and above his or her comprehensive, major medical or basic medical insurance policy. This Excess Health Insurance Policy would not only provide an additional Lifetime Benefit amount in excess of the underlying policy but would also provide excess benefit coverage, after a deductible.
Let’s say an insured only has a basic coverage policy with set amounts being established for payment to doctors or hospitals. If these set amounts are insufficient, the Insured will be asked to pay the balance. In lieu of the Insured paying the full amount of a non-negotiated policy, the Insured would pay a deductible, and then the excess policy would pay the balance. This would assure someone who cannot afford more than a basic policy or one that does not have comprehensive coverage, some additional reimbursement to the hospitals or doctors, instead of the insured bearing the full financial impact.
- A Health Insurance Assigned Risk Pool, in various regions of the United States. The Pool would be operated by various insurance company representatives in the area representing the health insurance companies licensed in the region (rather than a pool handled by the Government).
If an individual or family applies for health insurance to various companies and is declined by three companies, the individual or family has the ability to be covered by the Health Insurance Assigned Risk Pool.
Determination would be made by the pool representatives as to which company would be assigned the individual or family’s health insurance benefits based upon the insurance company’s composition of general, chronic and critical risks, its financial ability to handle the assignment and fairness and equity of assigning a number of high risk health individuals into a specific insurance company’s book of business. The decisions would be made by the board of representatives so as to a fair and equitable assimilation of high risk cases within the general book of business.
Insurers with more diversification of other insurance products would have the ability to undertake these risks by an actuary. The actuaries likewise would make a determination of the rates to be charged for high risk individuals based upon the overall book of the insurance companies.
ADDITIONAL CHANGES TO THE GOVERNMENT PROGRAMS
Of course there is the portability issue which has been addressed by the Republican Party and the ability to cross over State lines when writing insurance. If the Free Market takes over, insurers still require a balanced book of business in order to remain solvent and provide the benefits they have agreed to provide.
The situation relating to coverage over State Lines may only work if benefits are offered within Regions. Certain Regions have specific disease and illness which other Regions do not have and some States may have specific laws which would not allow insurers not licensed to do business within a State to conduct such business.
Insofar as Portability, rather than COBRA, in which benefits are provided for one year following termination or leaving an Employment under a Group policy, it would be beneficial is that former employee could carry the same insurance for as long as would be necessary and of course, the premiums thereof would have to be paid by the individual or family. Of course, if an individual is unable to work, may that individual qualify for Social Security Disability income but also Medicare which is available to those age 65 and older, to those of any age who suffer from chronic kidney disease or to those who are receiving Social Security disability benefits.
Government programs are necessary for the aged and those who are disabled but should not be provided for those who have the ability to be retrained and to work.
The Medicaid program is also part of the Social Security program whereby matching federal funds t states funds provide medical public assistance plans to help needy persons regardless of age. If a family’s income is below a specified level, Medicaid benefits are available. Also benefits are provided to individuals who are blind, disabled or under 21 years of age and may include deductibles and coinsurance.
Although the States establish eligibility requirements, the States need to do something regarding Welfare Reform. Drug Tests must be required of any Welfare recipient unless that recipient has a waiver showing the drugs were prescribed by a licensed practitioner.
The Government programs are further abused by illegal immigrants who do not have the ability and willingness to work and providing them health benefits other than general humanitarian benefits should cease and desist. If they are able to work they should prove they have a job within six months of coming to the United States at which time all Welfare Checks should stop.
Today the Government is providing more benefits to illegal aliens than that which is provided Seniors and Veterans who have worked all their lives and protected our country here and abroad. The Democrats will never agree to anything so I believe, taking all illegal immigrants and moving them to Sanctuary States and Cities and the States and Cities should be responsible for not only welfare benefits but medical benefits not the Taxpayers of the United States.
Karin Fleischhaker-Griffin, CPCU
PS By the way my Education (Masters) and insurance expertise lies mainly in Multi National property casualty but having been licensed in Health, Life, Annuities, etc., I took all aspects of insurance seriously and so should you even though you may freeze at the thought of the word “insurance” Only you the people can voice what you want but it is time one understood the dilemma about private insurers and why they do what they do.