Real Health Care Reform

John Oxendine has sent a letter to Secretary of Health and Human Services Kathleen Sebelius, notifying her that he would not be implementing the Federally mandated high-risk insurance pool.

So far, there are nineteen state attorneys general who have filed lawsuits challenging the constitutionality of the new law. Oxendine’s position is also that this is an unconstitutional expansion of the federal government. The main basis of the constitutional challenges (more…)

The IRS has begun mailing millions of postcards to small businesses, to promote the tax credits they may be eligible for if they provide health insurance to their employees.

It is suspected that many small businesses may not take the IRS up on this offer, due to expected increases in health insurance costs and restrictions on high deductible plans.

Several companies in the individual health insurance market currently offer 2 or even 3 year rate guarantees. But with the increased costs facing insurers in the wake of the new health care reform law, that is ending. Assurant has already announced that they will not accept any applications for plans with 2 or 3 year rate guarantees after May 14. Blue Cross Blue Shield has already discontinued their extended rate guarantees in many states, and will be eliminating even 1 year rate guarantees in most states. Expect announcements from World and Golden Rule soon.

This is as to be expected. The masses who believed Obama when he said words about making health insurance “more affordable” will soon be facing a rude wake-up call.

Suffolk Superior Court Judge Stephen Neel has promised to rule by close of business today on whether or not insurance companies in the state can move forward with planned rate increases.

Now the nonprofit insurance companies in the state are losing millions and are in a situation where they cannot afford to keep insuring people without enacting a rate increase. And the state is in a situation where they are trying to force these companies to do business in the state.

It is a dangerous think when we have politicians who don’t have a clue about economics, trying to legislate things to be they way they want. Hey, why don’t we make a law saying health insurance is free, and another saying everybody is entitled to earn at least $100,000/year. Er, actually we seem to be already headed that way…

As a result of health care reform passed under Governor Mitt Romney, Massachusetts has the highest medical cost and health insurance rates (and the longest waits to see a doctor) of any state in the nation. And unfortunately for us, the federal health insurance reform bill was based largely on what they did in Massachusetts.

Health care reform is now the law of the land, and here are some of the upcoming consequences for people who purchase their own individual health insurance

On Sept 23, there are new mandates that will drive health insurance costs higher.

-New plans will no longer have lifetime limits
-Children under age 19 will no longer be subjective to any exclusions based on pre-existing conditions
-Dependent adult children up to age 26 can stay on their parents’ plan
-New plans must cover certain preventive services without copays or deductibles

All of these changes will drive costs up, so we are expecting to see some big rate increases coming – this year and in coming years. All the misguided people who think health insurance is about to be free will be howling in protest to the politicians. The politicians who passed this incredibly bad bill will be howling in protest as well, claiming the insurance companies are once again taking advantage of the public. And there will be calls to “do more” by those oblivious to the irony of it all.

The only hope is that high deductible plans will remain available. As rates continue to soar, more and more people will flock to health savings accounts and high deductible plans, and consumer-driven solutions may still stand a chance at stopping the runaway health care inflation.

For more details and a timeline of what’s going to happen, you can read the last issue of Maximize Your HSA.