By Joanna Antongiovanni
As the Supreme Court of the United States will likely rule on health reform soon, conversations about the bill’s constitutionality are once again resurfacing. Aside from this debate, there are several flaws within the bill that contribute to its inability to best protect consumers from increasing rates and provide them with affordable coverage. Below are five things that supporters of health reform don’t want you to know.
A lack of focus
The bill is more focused on insurance costs and does not adequately address the main reason health care costs go up: the actual cost of care. This is a big problem because it overlooks what could really make a difference and solve some of the health care issues in our country. The Kaiser Family Foundation report predicts that the health care rebates employers can expect to receive is minimal, an average of $127 compared to premiums of $5,400 a year for an individual and $15,100 for a family. If these predictions are close to the actual rebates, it proves the bill’s insurance reforms and current medical loss ratios do not address the true cause of increasing premiums in our country.
One size doesn’t fit all
As health reform stands now, it fails to address the unique needs of each state. One of the mostly unpublicized outcomes of the medical loss ratio (MLR) requirements has been that carriers have opted to exit specific unprofitable markets or exit health group products altogether to concentrate on lines of business not affected by health reform.
In some states this has created an unfair advantage for the one or two carriers that remain.
Other plans have eliminated specific products such as “child only policies” citing the inability to cover the cost of the additional mandates placed on these policies at an affordable cost. In addition, doctors and hospitals in wealthy areas are more likely to pass along those costs to consumers in those areas, increasing health insurance costs in those regions.
What was originally intended to increase coverage to the uninsured and lower health insurance costs has in fact done the opposite. In addition, many states that are struggling to balance their budgets following the burden of Medicaid expansion are seeing red and increasing deficits. These states are looking for alternative ways to save money and state-funded programs like education are at risk for budget cuts.
The current exchanges don’t fit
One major oversight of the bill is that there is no exchange that exists today that would satisfy health reform’s exchange requirements. An exchange is a government manufactured insurance marketplace for individuals not covered for health insurance by their employers to shop for health insurance at competitive rates. None of the current exchanges that exist for health care work under the new bill, the health reform exchange is two parts Massachusetts exchange, one part Utah exchange and one part “other”.
It’s debatable if either the Massachusetts or Utah exchanges accomplishes what they are set out to do, that is, to provide a market for people to purchase affordable insurance.
The creation of the exchange itself did not make health insurance affordable as it never addressed the cost of care. This is an obvious problem as individuals that are not covered by their employer need to have an affordable alternative for health care. Instead of looking to examples of what would work, the exchange dreamed up by health reform is a conglomeration of different ideas hastily combined.
Pennies on the dollar
Did you know that health insurance companies only make 3 cents to 6 cents on the dollar for health insurance premiums?
Health reform’s misplaced blame on insurance companies will only result in more difficulty for employers and individuals to get the specific insurance policies that they need. If the insurance companies continue to be attacked, they will lose more money and have fewer agents who will be able to help consumers find a policy that meets both their financial and health needs. Again, the cost of care resurfaces as the larger influencer on health insurance premiums.
All bark and no bite
There is only one thing worse than a mandate…a mandate without teeth. The bill mandates individuals to purchase health insurance but the consequences for not purchasing insurance is so weak it begs the question about how serious lawmakers were about actually making people purchase insurance. As the law is written now, it will accelerate the destruction of the insurance industry as people, after they have done the math, will opt to pay the penalty rather than pay for coverage.
Only time will tell the Supreme Court’s final decision regarding health reform. Regardless, so long as the legislation fails to address the above issues, the bill will be ineffective in solving the health care conundrum in our country.