Health Insurance Blog

The Senate Finance Committee is coming close to figuring out a healthcare reform bill according to Maggie Guo’s article on The Ethiopian Review site.  Health care cooperatives are still on the table, which has the idea of building large groups so that the price of expensive medical costs are spread out among members to reduce costs for everyone.

But Consumer Watchdog says this will not necessarily lower health insurance quotes for consumers.  They say that in practice there has not been enough members for cooperatives to carry out their function and people with less medical risk often opt out of joining. 

For a cooperative to be effective, member enrollment would need to be near 500,000 consumers according to some estimates.  There have been attempts in Texas, Florida and Colorado without much success.  There is also the concern that if small states get together to create bigger groups, then health insurance companies may insist on a suspension of state regulations because of the different types of customers they would be serving.  This would in turn cause a whole new type of oversight and possibly a lack of proper regulation. 

About eight out of ten Americans favor a public option health insurance plan on the table in Congress right now.  This is according to the new poll underwritten by AARP and completed by Penn, Schoen & Berland Associates released Tuesday night at an AARP event in Denver. 

While most people seem to favor this public option, only four out of ten can accurately define what a public option health insurance plan means.  This is not good news for President Obama who may be facing possible defeat on his health care reform platform. 

The poll surveyed 1,000 Republicans, Democrats and independents across the nation earlier in August.  The survey does suggest that Americans agree on health care reform of some sort, but there is much less agreement on whether or not it’s worth higher taxes or higher health insurance rates. 

Most are still very concerned about having affordable health insurance.  65% oppose tax increases and 73% oppose higher health insurance premiums.  This information was found through the Wichita Business Journal in the article “AARP polling shows uncertainties about ‘public option’ insurance in health reform” by Neil Westergaard. 

Wednesday evening President Obama used the phrase “health insurance reform” five times in his opening statement according to “It’s Health Insurance, Not Health Care Reform, For Obama” by Mark Knoller on cbsnews.com.  The White House may think that the concept of revising health insurance instead of overhauling health care is easier to sell to Congress.

In this prime time conference in the East Room he made repeating arguments for his health insurance reform.  He believes it will offer more health care security and stability, coverage for all, no denials for pre-existing illnesses, more affordable health insurance options, and less government spending.  He was very adamant that his plan will not add to the deficit over the next 10 years. 

The President has a stern deadline for when he wants the House and Senate to pass a health care bill which is before their August recess.  He wants the rush because of the feedback he is getting from the American people on their high health insurance costs. 

Blue Cross Blue Shield, and AHIP, issued a joint statement opposing President Obama’s proposal to create a government run health plan.  They believe that the creation of a government run health plan would be detrimental to a overhaul of our ailing health system.

In their statement sent to key senators, AHIP and the Blue Cross Blue Shield Association (BCBSA) said that any such program “would thwart the ability of the healthcare sector to implement meaningful delivery system reforms, exacerbate the cost-shift from public programs to consumers and employers in the private market, and destabilize the employer-based system.” The two groups said that more than 100 million Americans would leave their existing private health insurance plan for the proposed federally subsidized health plan.

Both AHIP and BCBSA said they would guarantee health insurance coverage to all families and individuals, including those with pre-existing medical conditions, but only if there is a federal mandate that requires Americans to obtain and hold health insurance coverage. Even so, “rating flexibility based on age, geography, family size and benefit design would be needed to maintain affordability.”

This is a interesting development in the ongoing debate about how to fix the broken health care system in the United States.  This proposal seems like it would make sense for health insurance shoppers if the rates would indeed be affordable.  My gut feeling says that  if health insurance companies are required to cover unhealthy individuals at the same rates as healthy individuals, the healthy people will bear the financial brunt of this compromise.

Walt Williams reports in the State Journal that West Virginia Senator Jay Rockefeller has introduced a bill that is intented to increase health insurance access to those with pre-existing conditions. The Pre-Existing Condition Prevention Act would prevent insurance companies from excluding a pre-existing condition from their coverage. Rockefeller claims that over 130 million Americans suffer from chronic conditions that could lead to individual health coverage being denied them. He also says that this bill is essential to pave the way for universal health care reform at a lower cost.

On the other hand, Walt quotes an industry spokesperson who says that the impact of such denials are heavily exaggerated (although they have far more impact when shopping for an individual health insurance policy on the open market, as opposed to an employer-sponsored health plan that puts a potential policyholder in a larger pool that reduces the risk of any one person with a chronic illness), and that the bill could result in a moral hazard: people will drive up the cost of health care by only buying insurance after they desperately need it.

Since the Healthy Indiana government-subsidized health care program was opened to adults without children in January 2008, it has given thousands greater access to Indiana health insurance. According to the Courier-Journal’s Leslie Stedman Weidenbener, the plan has been so successful that many people are on a waiting list to enroll (due to limited program funds). State legislators negotiated an exception to Medicaid regulations that limit the program to families. 34,000 out of 49,000 enrollees are adults without children who are unable to afford individual health insurance.

People covered under the Healthy Indiana program must pay a sliding scale monthly premium based on their income (from $20 to $75).

What’s included under the Healthy Indiana plan?

1. $500 in free preventative care each year
2. An annual health savings account (HSA) of $1,100
3. After the HSA is spent, there is a traditional health insurance plan without co-payments or deductibles.

To qualify for the Healthy Indiana program, Leslie writes that a childless adult must meet the following requirements:

• They must work for a company that doesn’t offer health insurance (so employers can’t drop them from their coverage and shift the burden onto the state)
• A single adult can make no more than $21,660 per year, or 200% of the poverty level
• They must have been without health insurance for at least six months.

America’s Health Insurance Plans (AHIP), the health insurance industry trade group, has expressed support for the idea of reforming the health care system. However, in the L.A. Times, Michael Hiltzik warns that insurers may not be as gung-ho about the possibility of universal health care as they present themselves to be.

AHIP recently released a brochure outlining its stands on health care. Some of their proposals include:

• being allowed to offer limited benefit plans among their individual health insurance policies without limits on the premiums insurers are allowed to charge
• a government-run health care option that takes only the “high-risk” patients (with several chronic conditions) private insurers don’t want, which would be very expensive since it prevents the government from spreading risk among a wide population
• a decrease in the fees paid to hospitals and doctors

These proposals are actually quite similar to what the insurance industry has asked for in the past. Michael speculates that insurers seem cooperative now because there is no specific plan for health care reform, but are prepared to fight against specific policies.

The Republican Newsroom reports that there will be a slight decrease in premiums for certain Massachusetts health insurance customers. Commonwealth Care, the state-subsidized health care program for low-income individuals and families without employer-sponsored health insurance, is planning to lower rates for policyholders that choose to buy a plan other than the cheapest in their area. The Commonwealth Care plans are:

• Boston Medical Center HealthNet
• Network Health
• Neighborhood Health
• Fallon Community Health

The Massachusetts health insurance mandate, passed in 2006 in an attempt at health care reform, is facing some unexpected challenges during this recession. Steve LeBlanc of the Associated Press says that increasing unemployment rates will make more people unable to fulfill the insurance requirement. Failing to buy health insurance will result in up to $1,000 in fines per tax year (taken from tax refunds), although the sentence is often waived. In 2007, only about 1% of the Massachusetts population did not buy health insurance, but experts predict that number will increase due to consumers focusing on other priorities.

While insurance is completely free for the poor and subsidizes plans for people making up to 300% of the poverty level, private individual health insurance can still be out of reach. The state does cover health insurance costs for as long as someone is collecting unemployment benefits, which helps those who have been laid off. However, the influx of new applicants to subsidized plans is expected to cost $800 million in the new fiscal year’s budget, an increase of $60 million.

Steve reports that some legislators believe the current law is unrealistic given current economic conditions and should be waived for the newly unemployed, but Democratic Governor Deval Patrick vows to continue the program and cut other spending to balance the budget instead.

Judith Graham from the Chicago Tribune recently wrote about the Illinois Comprehensive Health Insurance Plan, and its coverage for those individuals unable to buy Illinois health insurance elsewhere. There is a cap on the number of people that can enroll (currently almost 6,000) in order to ensure that its costs are fully covered by state funding and its premiums, which can’t be higher than 150% of what a regular insurance premium costs in the market. This program is reserved for U.S. citizens and legal residents, and has a $2.5 million cap on lifetime benefits, according to Judith.

Currently, Illinois has about a thousand slots remaining in ICHIP’s traditional pool, so it’s worth looking into if you have unsuccessfully attempted to buy individual health coverage or suffer from certain chronic, uninsurable conditions including:

• Juvenile diabetes
• AIDS
• leukemia
• Parkinson’s disease
• multiple sclerosis
• cystic fibrosis

This program is different from the HIPAA plan, which is intended for those who have lost their employer-sponsored health insurance and exhausted their COBRA unemployment insurance.