Intelligent Health Insurance Reform

As a multi-state Licensed Health & Life Insurance Broker, I have been providing quality Health Insurance services for hundreds of families and Small Businesses around the country for the last 17 years. I have seen first hand how WELL our health care system works  AND how well our Health Insurance system CAN work. I have seen first hand (over and over again) what happens when a Health  Insurance company pays claims (by the hundreds of thousands) thereby protecting the financial future of their insureds and ensuring  that they receive the very best medical treatment. Specifically by allowing them access to expensive medical procedures that they  could never afford on their own. I have also helped many consumers obtain access to legitimate major medical Health insurance  coverage even if they were labeled as uninsurable on the open market.

That being said, I have also seen first hand where our Health insurance system has failed. Most especially when it comes to denying applicants coverage for pre-existing conditions when they apply for Individual (non Employer Sponsored Group) Health insurance. In fact, it is arguably this one systemic problem – over all others- that has led to the current fever pitch amongst the Democrat majority to push their idea of health insurance ‘reform’. Sadly, their legislation will not reduce our deficit, or reform health insurance and it will cost close to $2.6 Trillion in the next 10 years. Far more than is actually begin advertised.

Nevertheless, we still definitely need Health Insurance reform on many levels and if Government must play a part, there are intelligent  things that can be done. I will outline my solutions for Intelligent Health Insurance reform below:

1.) If we were to simply cut the $760 BILLION in annual waste that exists in our current Health Care system, we could provide every one of the 46 Million Uninsured a Gold Plated health care plan that would make the CEOs of Blue Cross Blue Shield GREEN with envy. And, it would only cost HALF of the aforementioned $760 BILLION. So why do Democrats want to spend $2.6 TRILLION over the next 10 years to cover the 46 Million Uninsured and also mandate the purchase of GOVERNMENT APPROVED HEALTH INSURANCE? Because it’s not about health care, it’s about control. Furthermore, there are not 47 million chronically uninsured in this country who can not afford to purchase health. For the real number of chronically uninsured in America watch this video:

2.) Eliminate the ridiculous state imposed mandates that prohibit Health insurers from offering coverage in every state. For example, small businesses in California have roughly 6 (yes that’s six) options for Health insurance. Yet there are 1,300 Health insurers in America! States like Colorado force carriers to cover “substance abuse” which doubles the Health insurance premiums in that state. Thankfully, you can now waive “substance abuse” coverage and your premium is subsequently reduced by half.

This kind of State mandate (and so many more) is what prevents the majority of Health insurance carriers from offering their products in every state! In fact, in 1979 there were only 252 mandates imposed upon the health insurance industry. In 2009 that number had grown to 1901. Since the passage of the PPACA  we have tipped the scales at nearly 2,262 mandates. Keep piling them on and costs will continue to rise. In fact, since the passage of the PPACA, health insurance premiums have increased to their highest point in recorded history. Even though the president promised us ““my health care plan will save the average family $2,500 on their premium.”

Basic economics 101 teaches us that nothing increases quality and drives down prices like competition! How can we increase quality and competition when we stifle it by imposing ridiculous mandates that inhibit competition from the get go? All 1,300 Health insurance carriers should be able to offer all of their products in every state. This way if you do not like your current coverage you have 1,299 other carriers to choose from and a cornucopia of plans. With that many options available, carriers are naturally forced by the rules of competition and free market enterprise to improve not only the quality of their products but to also improve customer service.  If not, the consumer will go elsewhere. It’s really as simple as that! Also, actuarial tables teach us that the more lives that are in the risk pool, the lower the premiums for all. How much lower could premiums be if everyone in every state had 1300 carriers to choose from?

3.) Instead of bailing out GM with Billions of our blood sweat and tears and then letting them file bankruptcy 3 months later. Why not expand State Run High Risk Pools to ALL States for those who are rendered uninsurable? We already have such State Run High Risk Health Insurance pools in the majority of States. In fact, unlike the lies told by those who wish to put Government in control of our nation’s health care system. 45 States provided guaranteed issue, Comprehensive Health Insurance coverage to individual applicants REGARDLESS of their pre-existing conditions
long before the PPACA was even considered.These state run High Risk Health Insurance Pools will cover anyone regardless of their medical history. The problem is they are under funded so the premiums are high. Instead of spending up to $2.6 trillion over the next decade to insure only 20 Million of the 45 Million uninsured. Leave the bulk of the nation’s risk where the money is, namely with the insurance companies. Since the uninsured far outweigh the uninsurable, this would cost far less than the currently proposed $2.6 Trillion over the next 10 years.

4.) Update the outdated Health Insurance Portability laws (regarding credit for pre-existing conditions) to include Individual Health insurance policies. As it stands now, HIPAA law allows an insured to move from one “Employer Sponsored Group Health insurance plan” to another “Employer Sponsored Group Health insurance plan” and receive full coverage for “preexisting” conditions. So long as they can prove to the new carrier that they have had 18 months of prior coverage with no lapse of more than 63 days. Millions of American entrepreneurs have chosen to leave Corporate America and strike out on their own since these outdated laws were written in the 1990’s. As the face of our work force changes so too should the laws that protect it. Most especially since these entrepreneurs shoulder the bulk of the nation’s risk and pay the bulk of the nation’s tax load! Throw them a legal bone!

5.) Make all Health insurance 100% tax deductible. I say all Health insurance because Employer Sponsored Health insurance already is 100% tax deductible but it is not tax deductible if you purchase your own Individual Health insurance policy on the open market. In fact, this proposal was included in President George W. Bush’s 2007 health care and health insurance reform proposal. Had that proposal not been summarily dismissed by Democrats it would have empowered consumers and states and negated the impetus for the disastrous “Obamacare”.

6.) Educate the American consumer about the primary reason for the high cost of health insurance! Namely, LOW DEDUCTIBLE, LOW CO PAY (a.k.a. Traditional) Health insurance. Nothing drives up the cost of Health Insurance like maintaining a low deductible, low co pay plan. Instead, offer more intelligent option to the American consumer like “Consumer Driven Tax Qualified Health Insurance“. These products, specifically HSA qualified HDHPs are the most intelligent and cost effective way to insure anyone:

The sad part is, even though these Consumer Driven Tax Qualified concepts have been around for more than a decade. And, they even lower costs for Government workers. Only a small minority of the American population has even explored these intelligent (& much lower priced) Health insurance alternatives. Those that have, are way ahead of the rest of population when it comes to managing medical risk.

7.) I would say weed out the 12 million Illegals (that we know about) who are sucking our Medicaid system dry…but as Congressman Joe Wilson so aptly stated, Obama CLEARLY wants to “provide a PATH TO CITIZENSHIP for the 10 to 12 million Illegals in our country”. Once they’re legal, he can then cover them ALL on our tax dollar! So yes his plan is to cover Illegals, he’ll just make them legal first! Think they’re not sucking our Medicaid system dry? Just visit California or Illinois. Good old “Blago” enrolled thousands of illegals onto our now bankrupt Illinois Medicaid system.  In fact 75% of those enrolled on our current “All Kids Covered” program are illegal aliens.  There are currently 77,000 illegal aliens on our Illinois Medicaid system that were illegally enrolled by Blago and there is no legislation or even a discussion to remove them.

2012 update: Our Illinois Medicaid system now has unpaid bills piling up after lawmakers enacted a budget pushing $2.4 Billion of the bills from 2011 into this year.  On January 30, 2012, the Civic Federation released its “Budget Roadmap” for the coming fiscal year. In it, they highlight the fact that state officials now believe the Medicaid program will have between $21 and $23 billion in unpaid bills by 2017.

Medicaid patients are already suffering from Illinois’ low reimbursement rates and long payment delays. Nursing homes and hospitals are running out of time and money while they wait for reimbursement. Doctors are turning away poor patients or making them wait weeks or months or even longer to receive care, just to keep their doors open.

What caused our Medicaid system to become so fiscally unsustainable? During Democrat Governor Rod Blagojevich’s Governorship, our Illinois Medicaid program was expanded far beyond simply providing health insurance for children of the poor (which was the original intent of the bi partisan Federal SCHIP bill). Blago expanded our Medicaid based state health insurance program to include 2 new programs that were designed to ‘supplement’ our “All Kids Covered”(www.allkidscovered.com) program (formerly “Kid Care”). These two new Medicaid based Entitlement programs (still in existence today) are called “Family Care”(www.familycareillinois.com) and “Mom’s & Babies” (www.allkids.com/pregnant.html). These programs go far beyond providing health insurance to children of the poor. In fact, they provide ‘free’ to nearly ‘free’ health insurance coverage for pregnant women and even the Father of a child who is enrolled on our “All Kids Covered” program. The program was also expanded to include coverage for those far beyond the existing Federal poverty levels.

Obamacare simply repeats the same mistakes already made by our now bankrupt (and deeply in debt) Illinois Medicaid program. However, it does so, on a national level. It increases Medicaid eligibility to almost every American with incomes below 138% of the federal poverty level (under the age of 65). This means that a family of four with an income as high as $87,000 would receive ‘premium tax credits’. What does this mean in dollars and cents? A report released by the Centers for Medicare and Medicaid Services shows the impact this massive expansion will have: “This expansion, together with greater participation by individuals eligible under current rules, is projected to add 14.9 million people to enrollment in 2014 and 25.9 million people by 2020—26 percent and 44 percent, respectively, compared to pre-[Obamacare] estimates.”

This means that by 2020, Medicaid enrollment will reach 85 million, or approximately one in every three Americans. Medicaid covers one in every five American today. This level of Government dependency distorts the original purpose of the Medicaid program, which was intended to serve as a safety net for only the truly indigent.

As a result of the expansion, the report shows, Medicaid spending between 2011 and 2020 will increase under Obamacare by $619 billion. The federal government will initially pay for most of the new spending, totaling $572 billion. But the expansion will increasingly strain state budgets as well, since the federal contribution decreases rapidly leaving the state tax payer holding the bill. In fact, this massive expansion of Medicaid will bring total state Medicaid spending to $2.3 trillion through 2020. Illinois’ share will be another $10 Billion by the year 2020. Source: http://illinoispolicy.org/blog/blog.asp?ArticleSource=4660

Worse yet, according to the CBO, the PPACA “Obamacare” law will place 16 to 17 million more Americans onto Medicaid. It is important to understand that Medicaid is nothing like private health insurance. Medicaid does not pay medical providers on time. And, when it does it pay – often many months later – it pays a small fraction of what private health insurance pays.

According to multiple studies completed by Johns Hopkins, the Journal of the National Cancer Institute, Columbia-Cornell, the University of Pennsylvania, the University of Pittsburgh and the American Academy of Cardiology.  Medicaid surgical patients have far worse health outcomes than those with private insurance. In fact, in the largest study of it’s kind (with nearly 1,000,000 participants) the University of Virginia found that Medicaid surgical patients are 97% more like to DIE than surgical patients with private health insurance.

According to the New England Journal of Medicine, Medicaid patients in bankrupt states like Illinois & California wait twice as long to see a doctor or specialist as those with private health insurance. And, often times they are denied the care they need. The Medicaid system in Illinois is looking more bleak every day. On January 30, 2012, the Civic Federation released its “Budget Roadmap” for the coming fiscal year. In it, they highlight the fact that state officials now believe that the Illinois Medicaid program will have between $21 and $23 billion in unpaid bills by 2017.Because providers are not getting paid, many Doctors, Specialist and other medical providers will simply stop taking Medicaid altogether, as many in Illinois already have. And, they stopped long before the PPACA.

8.) TORT REFORM! This is one area of reform that is rarely spoken of by the Liberal left. Medical malpractice liability forces providers into practicing defensive medicine. In other words, it causes medical practitioners to order multiple expensive (and often times unnecessary) tests and procedures “in defense of” potential lawsuits, JUST IN CASE they miss something in a patient’s case. All for fear of being sued for ridiculous amounts in a malpractice lawsuit. Limiting liability lawsuit awards to reasonable amounts will deter those who seek the “big pay day” by filing frivolous lawsuits against medical practitioners.

9.) Establish a Federal oversight committee to regulate and hold accountable physicians who make medical mistakes. What’s one of the biggest reasons why health care is so expensive? Hint: It’s not “rich CEO’s” and “outdated medical records transfer processes.” It’s Medical Mistakes! Here’s the real facts you won’t find in the media outlets:

1994: Five years after a groundbreaking Institute of Medicine report focused attention on medical errors in hospitals, Americans say that they do not believe that the nation’s quality of care has improved. In fact, 1 out of 3 patients states that they have experienced a serious medical error http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.534

 1995: A Study published in the Journal of American Medical Association (JAMA) found that only two percent of medication errors that occurred during the medication administration process were intercepted.
a. More people die from medication errors than from work place injuries
b. Medication errors account for approximately one out of 131 outpatient deaths and one out of 854 inpatient deaths.1999: Institute of Medicine (IOM) releases its first report on healthcare quality and medical errors. http://www.iom.edu/?id=12735 The Study finds in part that:a. Medical errors are responsible for injury in as many as 1 out of every 25 hospital patients.
b. Between 44,000 and 98,000 Americans die each year from preventable medical errors in hospitals alone.
c. The deaths from preventable medical mistakes are equivalent to the number of people who would die if a jumbo     jet crashed EACH AND EVERY DAY OF THE YEAR, and all its passengers died!
d. Medical errors cause more deaths than motor vehicle accidents, breast cancer or AIDS…..and this study is TEN     YEARS OLD and STILL no Federal oversight committee! Oh wait! It gets worse!

2002: A Study issued by the United States Pharmacopeia (USP) concluded that more than 200,000 medication errors occurred during 2002

2004: CDC reports that 90,000 patient deaths occur each year due to patients contracting hospital acquired infections.  http://www.cdc.gov/ncidod/dhqp/pdf/nnis/2004NNISreport.pdf
a. Many hospital acquired infections are caused by health care workers who fail to wash their hands in between patients.

2006: Studies assessing the state of hospital patient safety conclude that current progress is slow, results in general are at best modest, and the gap between the best possible care and actual care remains large.  http://www.healthgrades.com/media/dms/pdf/PatientSafetyInAmericanHospitalsStudy2006.pdf

More Facts:

Preventable medical errors result in extended hospital stays, expensive treatment for chronic medical conditions and astronomical medical costs that are associated with treating debilitating life-long illnesses. Some experts state that these costs may be in the range of $150-200 Billion dollars per year. Gee, where else could we spend that money??? Quick reminder:

ALL of the aforementioned happened under the nose of our Federal Government. And we want them to regulate Health Care?? Let’s not save ALL of our anger for the “greedy” insurance companies and “over paid” doctors and CEO’s. Let’s focus our Anger on our GOVERNMENT who has allowed this systemic problem to continue over three administrations!

Ask yourself, why does the health care industry basically regulate and report on itself? Why is certification and accreditation voluntary? Why don’t we have a Federal agency that acts like the FAA and investigate medical mistakes, just like airline accidents or near misses? Why do only some states have mandatory reporting requirements of medical errors? All Good Questions that need to be answered before we hand over our very health freedoms to the same Government to “regulate”.

10.) Aggressively address the REAL REASONS why Health Care COSTS SO MUCH!

In summary, REAL healthcare reform can be accomplished through consumer education, weeding out abuse of existing Federal entitlement programs (via a legitimate needs assessment) and increased funding and expansion of existing State sponsored Risk Pools so that people who are declined for insurance have an affordable option to continue coverage if declined on the individual major medical market. Following these few simple steps will go a long way towards not only maintaining our current health care system, but also towards keeping the bulk of our nations risk where it belongs, namely with the private health insurance industry. In light of the recent multi Trillion Dollar “Bail Outs” and many other failing corporations coming to the table with their hats in their hands (and their private jets on the tarmac) the last thing our government should do is start cutting more blind “bail out” checks in an effort to “reform” the U.S. health care system.