As your benefits advisor, I would like to take this opportunity to provide you a summary of the key components of the health care reform legislation and how it may impact you and your business. I expect that given the number of years that it will take to fully rollout these reforms, there will continue to be changes to many elements of the legislation. However, for the first time in over a year, we have a much clearer view of the changes that will potentially take place. This bill will:
• Mandate that everyone must have insurance.
• Result in more than 30 million additional people becoming insured.
• Provide for subsidized coverage for people that can’t afford it and increase the number of people that will qualify for Medicaid.
• Make cuts to Medicare Advantage Plans and change their payment formula.
• Increase taxes and fees to many individual Americans and Corporations.
• Make many changes to the way Insurance Companies do business from not allowing them to use pre-existing conditions to limiting their rates based on medical loss ratios.
Many of these elements do not phase in for many years. Those that are most immediate and are expected to occur in 2010 are:
• Tax credits for certain small businesses.
• Elimination of pre-existing conditions and an increase in dependant coverage to age 26.
• Creation of a temporary reinsurance program to provide coverage for retirees over 55 who are not eligible for Medicare.
• The further creation of a temporary national high risk insurance pool.
• The prohibition of lifetime limits on benefit payments.
• Closing the so called “doughnut hole” by providing immediate tax credits for Medicare patients who face a gap in prescription drug coverage.
The real impact in the health insurance system won’t occur until the year 2014. During the interim, there will be the phase-in of additional new taxes that will provide added government revenue to pay for these changes. The four most significant changes occurring in 2014 are:
• Insurers will be required to take all applicants.
• Insurance will be mandated for all Americans.
• Tax credits to help pay premiums will start flowing to middle-class working families. The most aid – including help with copayments and deductibles – will be made available for those individuals and families on the lower end of the income scale.
• Insurance exchanges will be created to help administer subsidies for those individuals that require them.
When fully implemented, I believe that the majority of working-age Americans and their families will continue to have employer-sponsored coverage as they do today. In addition, through mandates and other subsidies, the number of people insured can grow by more than 30 million.
Please be assured that I will work to help you navigate through the various changes of this legislation to ensure that you and your employees are always offered the most choice and greatest value of benefits available in the marketplace. This will be a long road and I pledge to be with you every step of the way.
Meanwhile, if I can be of assistance to you in any way, please do not hesitate to call us at 866-745-9555
Sincerely,
J.C. Lewis Insurance Services
Earlier this year Anthem Blue Cross of California (owned by Wellpoint Inc.) announced that it would be raising its insurance premiums by up to 39% this year. Is this increase justified, or are they just trying to increase premiums before the Federal government regulates premiums if the Healthcare reform bill passes?
The facts don’t seem to warrant the large increase in premiums requested by Anthem Blue Cross. WellPoint CEO Angela Braly says its customers’ healthcare costs only went up 8.9% last year. In fact, even 8.9% seems high, given what actuaries at the Department of Health and Human Services indicated in a recent report. To be fair, the increase in premiums anticipates a large increase in healthcare costs in the coming year.
Another reason given by WellPoint Inc. for the large increase is the poor economy. When times are tough, healthy people don’t buy healthcare insurance, so that means that the insured pool is smaller and sicker, requiring more healthcare. This is probably a valid argument, but the Healthcare reform bill would remedy this problem by mandating that everyone buy healthcare insurance.
Consumers and legislators are complaining loudly about the proposed increases. Two members of the House Energy and Commerce have asked for an investigation into this premium increase. A hearing is set for February 24, 2010 in the House chamber. WellPoint Inc. executives are asked to be present to relate the facts that warrant this increase.
WellPoint Inc., the nation’s largest health insurer by membership, had a net income of $2.7 billion, or $5.95 a share, in the fourth quarter of last year, compared with profit of $331.4 million, or 65 cents a share, for the same period the previous year. This is an eight-fold increase over last year’s income. This would indicate that the insurance business has been good during the past year.
In all probability, Well Point is simply trying to increase premiums and thus revenue ahead of the mandates required by the Healthcare reform bill, should it pass. These include:
- The requirement to accept persons with pre-existing conditions
- Regulations on rates and premiums
- Mandated coverage required in each policy
The executives at WellPoint Inc. have determined that their profitability will be adversely affected by the Healthcare reform bill, so they are just trying to remain viable as a company. By obtaining a premium increase before the regulations and mandates of the Healthcare reform bill take effect, the executives of WellPoint Inc. are looking to stay viable.
Interestingly, President Obama’s proposal that he unveiled a couple of weeks ago had a provision that would retroactively address just these types of situations. The constitutionality of any retroactive regulation would probably be challenged in court.
When it comes to choosing the right dental insurance plan in California, there are quite a few things that need to be considered. For instance: Do you urgently require insurance benefits? Are you acquiring a plan mainly to keep up with your preventive care? Do you need an orthodontic treatment? Would you want to continue with your current dentist?
Urgency and Insurance Type
If you are in urgent need of dental benefits, especially right after your effective date, then you may need to acquire an HMO plan. They usually have shorter waiting periods, and you are given all the major services whenever you require them. HMOs typically don’t have benefit maximums.
For instance, if your child urgently requires braces-related help and you don’t have an insurance policy, if you acquire an Anthem Blue Cross stand-alone “Dental Premier Select HMO” or a Delta Dental “Delta Care USA” you’ll get the orthodontic benefit for a reasonably less price if you didn’t have a plan. If you acquire a PPO plan, it is more obvious that there would be a lack of orthodontic benefits, and even if there are, you will need to wait for one complete year.
Moreover, if you require root canals or extraction or a dental crown, there’s a possibility that you could have a three, six or even twelve month waiting period prior to the utilization of those services, plus the final bill could be much higher. For this reason, you should also ensure that you have a high benefit maximum, or you don’t have one at all. Hence it is always better to get HMO coverage if you don’t have coverage and require major benefits urgently.
Preventive Care and Orthodontics
If you are only looking to continue your preventive care, it is better to carry on with the low benefit maximum plans. You can always get an HMO plan in the future if you require major work.
Continuing with your Current Dentist
If you want to continue with the current dentist, but you are unhappy with your insurance coverage, then you should go for a PPO plan. Typically your dentist is not included in an HMO plan, and also in some PPO plans. Therefore, it’s ideal to get services from a local agent, and let him/her search for suitable contracted providers in your area. If your dentist isn’t a part of the networks that you are interested in, then you should seek out a new plan. You should be able to find a good dentist in your area if applying for a PPO plan. On the other hand if you are acquiring an HMO plan, you can still get a good dentist, but you will have less providers to select from.
