Monday, June 22, 2009

Smaller Cars, Bigger Health Insurance

[Welcome Industry Radar readers!]

The Oracle of Washington, who knows all, see's all, is poised to pronounce what is good for us in the way of health care.

This is the same group that thought it was a great idea to make housing available to everyone regardless of their ability to repay their mortgage.

The same group that thinks spending more than you earn is a great idea.

First they loaned money they didn't have to folks in Detroit who make our cars. Then they decided to assume control of an industry they know nothing about. Their solution is to sell one company to the Italian's so that company can now import cars that no one bought 20 years ago.

Apparently Washington thinks America is ready for the "Fix It Again Tony" (Fiat). The car that voluntarily withdrew from the U.S. market rather than meet (what was then) tough emission standards.

The other car company has either sold, or is in the process of selling off the Hummer. They will also cut back on other big cars with high profit margins in favor of smaller cars with little or no profit margin.

And let's not forget the guy (Brian Deese) in Washington who is the "brains" behind the bailout, no wait, bankruptcy of the automakers is a 31 year old law school dropout.

But wait, there's more!

The new head of GM (Ed Whitacre) by his own admission "knows nothing about cars" but why should that stop him?

So now that we will be building and buying (or so they hope) smaller cars in order to save the American auto industry, what is next on the agenda?

Bigger health insurance.

Washington want's to provide (their term, not mine) "basic, universal" health care (actually coverage, but why split hairs) for everyone.

So what is their idea of basic?

We don't really know because that is a moving target, but using politicians outside the beltway as a guide, perhaps we can get some insight into what needs to be covered by health insurance.

According to the NCPA (National Center for Policy Analysis) state mandates, benefits that MUST be covered by health insurance, increase the cost of health insurance by 20 - 50%, depending on the state.

Here is a sampling.

Nine states require coverage (no pun intended) for hair prostheses (wigs).

Thirteen states require coverage for IVF (in vitro fertilization), a topic that is near and dear to our hearts.

Four states mandate coverage for massage therapists, three states for naturopaths. Fifteen states require coverage for "bone mass measurement" and thirty have mandates for dental anesthesia.

Now I am to be included in those who do not like pain and will go out of my way to avoid it. But since when is the cost of dental anesthesia so great that it must be an insured item? I would gladly pay for dental anesthesia even it if wasn't covered and I bet I am not alone. So why do 30 states feel it must be an insurance mandate?

Is this their idea of "basic" coverage? How do residents of the other 27 states get by without having their dental anesthesia covered by insurance?

The list goes on . . .

One reason why health insurance is expensive is because we are insuring things that don't need to be insured . . . like all of the things listed above.

I constantly remind clients that their auto insurance (mandated in all 50 states) does not cover things like tires, brakes and oil changes. But now that Washington has decided we will build smaller cars (regardless of whether anyone buys them), what if they decided it was for our own good that auto insurer's cover oil changes?

Your auto insurance premiums would rise proportionate to the number of miles you drive. If you drive 12,000 miles per year that is 4 oil changes at $40 each so your premium needs to increase by $250 to cover the cost of the anticipated oil change plus the administrative handling fee for processing your claim.

I imagine quite a few folks would balk at that but some would cheer because they no longer have to pay for oil changes.

This same mentality seems pervasive among politicians when it comes to health insurance. This is especially true when no one has to pay for health insurance any more, it will be provided for by the government.

Like their free Medicare coverage.

Taking a cue from a pizza company, I can imagine the commercials for the change that is coming from Washington.

"Smaller cars, bigger health insurance, Poppa Washington."
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