Tuesday, July 28, 2009

No Questions Asked

The press and those in Obamington are making a big deal about health care reform, especially as it applies to what we term "guaranteed issue".

If Mr. Fixit and his posse get their way, no longer will a health insurance carrier be able to deny coverage due to pre-existing conditions. That sounds well and good, but at what price?

The idea of a "no questions asked" health insurance plan and affordable health insurance are on opposite ends of the spectrum.

Currently there are 6 states in the nation that prohibit carriers from denying coverage based on pre-existing conditions. Those states are ME, MA, NJ, NY, VT and WA.

So how much does health insurance cost in those states compared to Georgia (where I live)? Using eHealthinsurance, I made up a family of 4 with mom & dad age 40 and two kids ages 19 & 20. Plans in Boston (02110) range in price from $1082 per month for a $2000 deductible Premium Saver plan with $25 office visit copay's to $1570 for a $0 deductible Premium Saver plan.

Only folks that spend money by the billions would ever think that is affordable. And the carrier that picked the name Premium Saver should be shot.

I would note that only 1 carrier and only 8 plans appeared. It seems that there is not much competition in Boston. Experience tells me it is due to excessive regulation, or as we like to call it, interference with market forces.

I would also point out that Massachusetts REQUIRES everyone to have health insurance or pay a fine.

What happens if you move our family across the country to Olympia, Washington 98501?

The first thing you notice is plans become more reasonable in price ($242 - $2018) but you also get more choices. More carriers (6), more plans (58) to pick from.

Residents of Washington are also allowed to pick catastrophic coverage plans . . . something that is prohibited in Massachusetts. One of the more expensive plans seemed to match up fairly close in benefit to a "low priced" plan in MA but still rang up at $1066 per month.


That is still a lot of money and perhaps our family would like to move further south in hopes of finding affordable health insurance in Atlanta.

Here they have 7 carriers and over 150 plans to make their selection and that is just getting warmed up. There are a few more quality carriers and over 3,000 plans to consider. Premiums range from $195 to $1082. If they are looking for the "low priced" plan they had in MA, or one similar in WA they would find a still somewhat hefty, but more affordable plan for $722 per month.

Most of my clients would end up with a plan in the $300 - $400 per month range and enjoy the savings.

I recognize if you need health insurance and have health issues finding a plan at some price (even if it is not affordable) is better than no coverage at all. The only thing that comes in to question is this.

Why should everyone have to pay a higher rate to support the relatively small percentage (less than 10%) that cannot qualify medically for coverage? This idea that health insurance should cover everyone for everything is diametrically opposed to the concept of affordable.

Instead of scrapping what we have and starting over, why not plug into systems that are already in place? That can be done for a lot less than the understated numbers floating around Obamington.

Those with significant health issues already have options including employer coverage, COBRA, and HIPAA conversion. In addition to the 6 states with guaranteed issue, 32 states have risk pools, 5 have carriers of last resort and 6 have other provisions to cover high risk individuals.

Medicare is also available to those who qualify for SSDI and have been disabled for 24 months.

If the government thinks it is a grand idea to cover high risk individuals, why won't they put them in Medicare without the 24+ month wait? It would be simple enough to offer Medicare for those with serious health issues rather than trying to mess up something that works for 85% of the population.

Smaller cars, bigger health insurance, Poppa Washington.
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