Toldeo Health Insurance

Healthcare Reform – Quit yelling! It’s time for an open, honest, constructive discussion

Note from the author: Other than offering that something needs to be done and that we could go about it in a more constructive manner, I have intentionally attempted to leave my opinion out of this posting.

I have just returned from a golf trip with friends.  One of them asked me what I thought about the healthcare debate.  Our short discussion was much more congenial than some of the stuff I have seen.

I don't know what it is.  I can't remember seeing this type of venom displayed over any topic in my lifetime.  People showing up at town hall meetings with the intention of disrupting them when anyone expresses an opinion that is different than theirs'.  To me, it seems like bullying and a bit UN-American.

If you haven't heard about this new phenomenon, here is a CNN article - http://www.cnn.com/2009/POLITICS/08/10/health.care.questions/index.html

I don't have the answer to this debate but:

Something needs to be done

Two reasons:

#1 Health insurance costs are rising much faster than wages and inflation are. 

It doesn't take a math wizard to see that eventually something has to give.  Anecdotally, I can tell you that our commercial clients experience a 15% increase in their group insurance FAR MORE than they experience an increase of 5%.  This usually leaves them in the unenviable position of increasing deductibles and co-pays (thus reducing the premium, but passing more of the risk along to their employees) or paying the higher premium.  In this economy, more of our clients have chosen the former rather than the latter.

We are finding the same thing with our individual clients who have insurance on their own as opposed to being a part of an employer group.  30% rate increases are NOT uncommon.  This brings me to'..

#2  Access to health insurance is not the same for everyone, especially if you have a history of medical conditions.

I am surprised at how much of the information that is being disseminated on this topic (usually via people usually yelling on TV) is either incorrect or lacking.  Insurance is largely regulated by the states.  Each state has some differences.  This is how it works in Georgia:

If you work for a company that has more than 20 employees and offers health insurance you can get on their plan without a pre-existing condition exclusion provided you come on the plan during open enrollment or as the result of a qualifying event (usually because your spouse lost coverage at their job).  The insurance company cannot deny you this coverage.  You could be a ticking time bomb, and know it.  They have to take you.  If you lose your job (or quit), you would be entitled (with some exceptions) to COBRA.  This would allow you to pay premiums on your own, usually for a period of 18 months (with several exceptions).  At the end of COBRA, assuming that you could not qualify for individual coverage (more on that in a second), you would be able to contractually convert your coverage to a guaranteed issue medical plan.  The state mandates that all group insurers offer this but it is a policy of last resort.  That dreaded combination of a high premium coupled with reduced coverage (large out of pocket exposure).  But since you had a group policy, and worked for a company, you can have coverage as long as you can pay (see #1 above) the premiums. 

If you work for a company that has less than 20 employees, and offers health insurance, you can get on their plan without restriction (just like those who work for an employer with more than 20 employees). They have to take you.  The main difference is what happens with loss of employment.  Employers this size are not part of COBRA.  Instead, their employees fall under the Georgia State Continuation rules.  These provisions allow an employee (with several exceptions) to continue their coverage on their own for up to 3 months.  After that, it's on to a guaranteed policy.  But since you had a group policy, and worked for a company, you can have coverage as long as you can pay the premiums.

If you are not part of a group, (like the self-employed, unemployed, or those who work for an employer who doesn't offer insurance ' or has discontinued it) cross your fingers and hold your breath.  In Georgia, as is the case in many states, individual insurance is a tricky thing.  The insurer can deny your application, exclude any pre-existing condition, or take you with open arms (if you are among those will little, or no, medical history).  If you are denied a policy by the insurance company you have NO place to go.  Your ONLY option is to get a job with an employer who offers group insurance or go without insurance.

The issues surrounding healthcare are complex.  There is not a magic pill that will fix this.  We should look for an honest, open, constructive discussion.  WE can do this.

 

 

About the Author:

As co-founder of Chappell, Mayfield & Associates, Cass offers expertise in financial planning, wealth accumulation, retirement planning, insurance planning, business continuation planning, and employee benefits. His blog is found at www.AtlantaPlanningGuys.com Cass launched his financial planning career as an agent for Prudential Financial in 1996, and later, a manager in the company's financial services division. Since then, Cass has earned the CFP®, CLU, and ChFC designations, reflecting his commitment to excellence in investment decision-making and financial planning. He also holds a B.S. in Management from Georgia Tech. Cass has lived in Atlanta since 1992 and is married to Alison.