Thursday, May 03, 2012

Making Health Insurance Cheaper

Health insurance will be cheaper once Obamacare is in place. Really? Not happening yet, and guess what. It will never happen.
Politicians think because you can drive to North Carolina and buy cheap cigarettes the same principle should apply to health insurance.   
                      High health insurance premiums
Problem is, health insurance doesn't work that way, and our Georgia politicians are scratching their heads. The AJC reported on new legislation that was supposed to make it easier for Georgian's to purchase health insurance across state lines.
Nobody has even asked to be approved to sell across state lines,” Georgia Insurance Commissioner Ralph Hudgens said. “We’re dumbfounded. We are absolutely dumbfounded.”
Dumbfounded. That's a good word.
Do you suppose anyone under the gold dome has heard of Obamacare?
With all the massive changes that will affect health insurance in 2014 (assuming Obamacare survives the Supreme Court and the November elections) carriers are not making any major moves involving health insurance, especially those that involve huge sums of money in filing fees.
Hudgens, a conservative Republican who strongly supports free-market ideas, said he expected policies sold in states such as Alabama, which have fewer requirements for health plans, to be offered in Georgia after enactment of the law.
Under the new law, health plans approved under the rules of other states could be sold in Georgia, even if they don’t meet Georgia requirements.
However, the companies still would have to be registered in Georgia and prove they are financially solid. And any complaints from policy holders would be resolved in Georgia, instead of forcing customers to go to the state that approved the plan to resolve a dispute.
The health insurance policies and rates would also have to be filed in GA and approved by the Department of Insurance. This is expensive and time consuming.
Any savings that may be achieved due to fewer mandates in Alabama would be offset, at least in part, by network discounts and overall cost of health care in Georgia.
And Alabama is a poor example in this case. Blue Cross of Alabama dominates the state when it comes to health insurance. They control so much of the market very few health insurance carriers even offer their product there. If Alabama Blue were to try and compete for health insurance here they would lose the advantage of their deep network discounts making it impossible to compete against home grown BCBSGA or other health insurance carriers such as Humana, Cigna and other health insurance carriers.
Kyle Jackson, Georgia state director for the National Federation of Independent Business, had high hopes that the new law would help small business operators who buy their own health plans.
“It’s frustrating,” Jackson said. “You can’t force the insurance companies to write these policies. But I know in talking to folks in my membership that there is a real demand ... especially if you are talking about the possibility of some lower-cost health insurance plans that do not have the mandates we have.”
No doubt, mandates add an average of 30% to the cost of health insurance, but the only way to significantly reduce health insurance premiums in most cases is to totally obliterate all mandates.
That won't happen.

[Click here for Mike's response]
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