Thursday, April 3, 2014

Analysis of Obamacare

First of all, let me say that this country is in dire need of healthcare reform. The cost of healthcare, the lack of transparency in pricing and the spiraling costs of health insurance premiums have become a huge issue over the past decade. When the ACA was passed, the primary focus was obtaining health insurance for those previously denied due to pre-existing medical conditions and for those who could not afford health insurance. These are two important ingredients to a workable healthcare reform but are far from resolving the most important issues of overall cost control.
It is my experience as a businessman and 10 year health insurance broker that the ACA falls way short of being the answer to our country's healthcare problems. Due to federal coverage mandates, insurance plans for those who could not obtain federal premium subsidies, for the most part, increased and benefits decreased. Any program, whether in private business or governmental in nature has to serve the total universe applicable to its execution. The ACA only is beneficial to a segment which accounts for far less than 50% of this total universe.
The coverage and profitability mandates placed on insurance companies have led to a major decrease in network physicians and hospitals in the individual segment of the market. Over the long term, this has to erode the quality of healthcare available to the consumer. It is this writer's opinion that there are many out there that will not realize this effect until they visit an out of network hospital or physician and are faced with a huge bill for out of network services.
The execution of the ACA was implemented far before all ingredients were finalized and not only led to much frustration in consumers attempting to sign up for coverage but also led to a portion of those signing up early having to change plans due to their physicians and hospitals dropping out of networks. Given the fact that many lost their coverage January 1 and were forced to move to new plans plus the fact that a large number of people were dumped into the Medicaid system, the numbers reported by the government are misleading. The true number of previously uninsured who have signed up for Obamacare is far less than the 7.1 million touted by the Feds.
So, what is the answer here? In my opinion, due to the lack of cost control, that this current program is not sustainable for the long term. Due to the imbalance of healthy versus unhealthy signups, premiums are projected to rise dramatically. To those who call for a universal single payer system, are you ready for the heavy taxation that would have to accompany such a venture? There is no free lunch in today's governmental economy. This country simply cannot afford to take on universal care at this point in time due to the deficit and budgetary imbalance prevalent today. It is my opinion that a panel consisting of corporate business leaders, physicians, politicians, insurance executives and others from leading medical research institutions should be formed to work diligently to fix this program over the next seven months prior to the beginning of 2015"open enrollment.
It is ludicrous for politicians to be patting themselves on the back and touting the success of a program that, in its current state, is unsustainable. Check the egos at the door and form a coalition that can compromise and fix the problems. This approach will help us all and take the focus off a small segment and place it squarely on the total universe of the healthcare arena.

Thursday, October 31, 2013

Cliff Notes Version of Obamacare

My Cliff Notes Summation of Obamacare

First of all, this country is in dire need of healthcare reform.  The political party in power would favor a universal single payer system, however there is a huge question of whether this is fiscally possible considering the budget deficit and future cost projections of Medicare.  Therefore, in this poster's opinion, the only way to even consider single payer would be a combination of Medicare funding reductions and taxation, both red flag political issues that neither party wants to undertake.

Therefore, Obamacare was structured through the private sector with the objective of insuring millions of Americans and providing affordable coverage for same.  In order to accomplish this, premium subsides and a formula for calculating same was devised in order to create affordability based on income.  In order for this formula to work, it would be necessary for those who do not qualify for premium subsidies to pay more for coverage to offset the subsidized premiums.

One of the primary features of Obamacare is coverage for everyone regardless of pre-existing medical conditions.  In order for this concept to work in a private sector program, the number of medically challenged enrollees has to be offset with a like or higher number of healthy people.  Insurance companies are private entities that must make a profit to stay in business.  Their actuarial accounting component has to make the calculation as to what has to happen to create a positive bottom line.

The result of this part of the equation is that premiums have to be set to take into consideration the overall cost of providing healthcare without the ability to weed out the most costly medically challenged members.  Thus, in simple terminology the healthy and wealthy have to pay for the sick and lower income members.

The current version of Obamacare, in this poster's opinion, was rushed to market far sooner than necessary.  The result was a series of coverage mandates that made a significant number of current plans obsolete and is causing many of the current insured to lose coverage by the end of the year.  The new coverage they are facing without premium subsidies is higher priced with less benefits.  Coverage mandates, which, again in this poster's opinion, are a part of the actuarial calculation, are driving the cost up in order to create more of a balance between the cost of insuring the healthy versus the cost of insuring the sick.  Please note that if the insurers cannot make a profit, they do not have to participate; they can basically take their ball and go home.

All of the above does not even mention the total failure of the federal Obamacare website and various other issues relative to same.  To cut to the chase, as a health insurance broker, I am seeing clients who are achieving better premiums and better coverage but a larger number of clients who are hard working middle class people who face significantly higher premiums and reduced benefits.

This program was rushed into reality and, in my opinion, is too highly flawed to succeed.  The best approach today would be to put everything on hold, develop a panel of politicians, physicians, insurance company executives, and some of the top business leader in this country to take the time to fix Obamacare.  This country is in desperate need of healthcare reform, however this current version is not the answer.

Monday, October 21, 2013

Summation of Problems with Obamacare

There is no doubt that this country is in dire need of healthcare reform, However, the current program has numerous flaws and needs to be fixed. In my opinion as a health insurance broker, Obamacare needs a major overhaul.

The politicians need to use common sense and leave their egos at the door to fix this program and make it workable for all, not just a ...chosen small segment of the populace.

Before my liberal friends point to Medicare as an example of a well run government program, let me remind you that Medicare today is a huge drain on the financial stability of this country. Citizens in this country have worked hard and earned the right to government managed healthcare, however with the number of baby boomers coming into the program in the next few years, Medicare will present an even greater financial challenge to an already financially challenged government.

Therefore, it is totally out of the question that a single payer system of healthcare reform can even be discussed at a time of fiscal crisis within our nation.

The major problem with this current reform called Obamacare is that a liberal administration placed too much emphasis on the lower income uninsured and did not consider the effect on hard working middle class citizens.

For every client that I consult with that realizes a significant benefit from Obamacare, there are at least three who are seeing significant rate increases up to 300% of their current plan.

The problem is twofold in my opinion as a health insurance consultant. The program includes too many mandated health benefits which raise costs and does not allow someone to purchase a simple major medical plan that simply protects financial liability. For those who do not qualify for premium subsidies, the premium cost increases are astronomical.

In addition, the Obama administration rushed a program to market that utilized the internet as a major information and enrollment tool. They did not perform proper Beta testing of their platform nor did they wait until the proper counselors were certified to advise clients. This has resulted in mass confusion for the consumer and a general waste of everyone's time in trying to access and gain knowledge from a system that is not functional.

What needs to happen here is that a timeout needs to be taken to fix this entire flawed program. In my opinion, this is not a major undertaking. Change the law to allow people to keep their current health plans like Obama promised, allow lesser benefit, lower cost catastrophic plans to be included and fix the extremely flawed web based system that now exists.

It is also my opinion that citizens need to take more responsibility for their personal healthcare and not rely on the government to educate them as to what are good health practices. In short, everyone needs to chip in to create a healthier nation with affordable healthcare.

Wednesday, October 16, 2013

The Major Problem With Obamacare

I am a health insurance broker in California and feel qualified to speak about the reality of Obamacare in my state.  The entire success of this program is based on enough healthy young people signing up to offset the high cost of managing the health of those with diseases requiring expensive treatment.

Here are FACTS from my state.  Prior to Obamacare, the premium range for a 30 year old Californian was $75 to $150 per month for coverage geared to a healthy young person.  Even at these reasonable premiums, many of these "young invincibles" did not sign up, as they simply felt they were healthy and would rather pay this money for recreational purposes rather than health insurance.

I just ran Obamacare premium quotes for a 30 year old in Orange County earning $30,000 a year which entitles this person to a premium subsidy.  I feel this income level is average for my state.  The cost range of plans available to this 30 year old ranges from $146 to $213 per month.  The $146 plan includes a $5000 deductible, $70 doctor copays limited to 3 visits per year, $120 urgent care copay, and $19 for generic drugs, some of which can be purchased at Costco for as low as $4.

Running a quote for this same 30 year old at today's 2013 pricing, I can sign him up for a $3,500 deductible plan with $40 doctor copays, $15 generic Rx and the same no charge preventive care as with an Obamacare plan for $94 per month.  He would also have the option to go to a $6,500 deductible at $75 per month.  These plans will not be available in 2014, as they do not meet federal mandated coverage standards.  Therefore, I do not see many of the "young invincibles" rushing out to buy Obamacare.

This program is doomed to fail because a group of politicians with egos put together a flawed attempt at healthcare reform.  I am a huge advocate of healthcare reform, as the cost of healthcare in this country is waaayyyy out of control.  However, this particular plan in its current foremat has two chances, slim and none. What needs to happen here is that this fiasco needs to be delayed until the appropriate people including physicians, businessmen, insurance industry people, minority group representation, middle class representation and others can meet behind closed doors for as long as it takes to fix this.