In recent days it has come to light that hundreds of thousands of individual health insurance contracts have been cancelled. There are several different stories floating around blaming various parties and interests and most of us have shutdown listening to what has quickly become background noise about the implementation of this Act.
So, in an effort to communicate in a different way, consider this set of perspectives.
First, all of us that have cars are familiar with auto insurance. The ads permeate television ... Flow comes to mind. Anyway, if auto insurance was federally mandated to include weekly car washes and "free" oil changes, what would happen to the price of the insurance? Car washes and oil changes are NOT suddenly provided to the insurance holder for free AND the insurance company is NOT just paying for these services out of their profits. These additional services must become part of the cost basis for the insurance plan itself and therefore is included in the LR (Loss Ratio)and can therefore be included in the premium. Without oversimplifying the question ... who is really going to pay for the "free" oil changes and car washes? That's right ... whoever is paying the premium!
Now consider this. If Life Insurance for every person was made mandatory for everyone to keep in place until they die, what would happen to premiums? If every policy was certain to pay the death benefit of say $50,000, wouldn't the carrier have to have enough premium to cover all of the death benefits on every policy? Premiums would become ... unaffordable.
We need to carefully consider the PPACA in the light of these two examples. Adding "essential benefits" really does increase premiums. It also allows carriers to cancel plans and "reboot" coverage for an estimated 14 million people on individual plans. Absolutely having everyone in the risk pool, paying premium is needed, but adding "free" essential benefits to everyone's policy is going to be traumatic to the healthcare providers.
Those that are learning that the "compliant" policies cost more can blame it on two fundamental issues. Mandatory essential benefits are not "free" (neither is lunch). And subsidizing lower income citizens (and probably non-citizens too) is not free either.
There are many parts of the insurance and healthcare provider industries that are improved by the PPACA ... but like taking many forms of medicine, there are some side effects. Maybe we should have been given some of the known and possible side effects of the PPACA. Just like the notice on tobacco products and prescription drug commercials. Caution: The PPACA may cause serious stress and participants may feel light in the wallet.
So, in an effort to communicate in a different way, consider this set of perspectives.
First, all of us that have cars are familiar with auto insurance. The ads permeate television ... Flow comes to mind. Anyway, if auto insurance was federally mandated to include weekly car washes and "free" oil changes, what would happen to the price of the insurance? Car washes and oil changes are NOT suddenly provided to the insurance holder for free AND the insurance company is NOT just paying for these services out of their profits. These additional services must become part of the cost basis for the insurance plan itself and therefore is included in the LR (Loss Ratio)and can therefore be included in the premium. Without oversimplifying the question ... who is really going to pay for the "free" oil changes and car washes? That's right ... whoever is paying the premium!
Now consider this. If Life Insurance for every person was made mandatory for everyone to keep in place until they die, what would happen to premiums? If every policy was certain to pay the death benefit of say $50,000, wouldn't the carrier have to have enough premium to cover all of the death benefits on every policy? Premiums would become ... unaffordable.
We need to carefully consider the PPACA in the light of these two examples. Adding "essential benefits" really does increase premiums. It also allows carriers to cancel plans and "reboot" coverage for an estimated 14 million people on individual plans. Absolutely having everyone in the risk pool, paying premium is needed, but adding "free" essential benefits to everyone's policy is going to be traumatic to the healthcare providers.
Those that are learning that the "compliant" policies cost more can blame it on two fundamental issues. Mandatory essential benefits are not "free" (neither is lunch). And subsidizing lower income citizens (and probably non-citizens too) is not free either.
There are many parts of the insurance and healthcare provider industries that are improved by the PPACA ... but like taking many forms of medicine, there are some side effects. Maybe we should have been given some of the known and possible side effects of the PPACA. Just like the notice on tobacco products and prescription drug commercials. Caution: The PPACA may cause serious stress and participants may feel light in the wallet.
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