The Health Care Reform Act – “Affordable Health Care Choices”

The implementation of the Health Care Reform Act will have an impact on America’s health brokers and most U.S. citizens as well. Division A of the Health Care Reform Act will be of particular interest to those who are in need of an affordable medical plan. As defined by Section 100(2), “This division achieves its purpose by building on the current health care system, while repairing those aspects that are broken.”

Section 100(3) maps out four specific changes that will be implemented to the existing system: (A) Strong insurance market reforms, (B) A new Health Insurance Exchange, with a public health insurance option alongside private plans, (C) Sliding scale affordability credits and (D) Shared responsibility among workers, employers and the government . The Goal-all Americans have coverage of essential health benefits.

(A) Strong insurance market reforms-This will affect the American citizens just as greatly as it affects America’s health brokers. One of the major changes will be that no one can be turned down or dropped from health insurance plan because of a pre-existing condition. But the reforms go much further than that-many deal with care, in relation to counseling, therapy, and substance abuse treatment. Also, there are reforms that relate to prescription medications. Finally, health HMO’s may need to restructure their policies on preventative measures, because there are reforms in that area as well. Though it may seem that the market reforms lean towards favoring the individual, this is not necessarily the case. America’s health brokers will benefit from a larger enrollment populace, so the numbers may actually be more favorable for them.

(B) A new Health Insurance Exchange, with a public health insurance option alongside private plans-Americans will benefit in the fact that there will be more opportunities for a health medical plan. Not only will there be an opportunity to choose from a private plan, but also many new possibilities for a group health plan or an individual healthcare plan. The details of the exchange have not been finalized, but it will afford the opportunity for cheap health insurance plans. America’s health brokers can map out new policies that offer care for all individuals within different wage earnings. The good news is that employers, the government and the individuals who have the medical insurance plan will all be contributing to the benefits.

(C) Sliding scale affordability credits-This policy is extremely beneficial to all who are involved. It creates affordability based on wages. This means that the individual with the low cost health insurance coverage will not be paying more than he/she can afford. As stated above, the government and employers will also be contributing. This makes it easier for America’s health brokers to devise different policies that suit the needs of everyone.

(D) Shared responsibility among workers, employers and the government-This point can be stressed enough. With shared effort, anyone can afford a low cost health insurance plan. Again, America’s health brokers can be relieved in the fact that the burden of payments is not placed solely on them.

The transition of the goal for every American to have an individual health insurance plan is not an easy one. There are many issues that lie ahead, but the first step has been taken. Also, there are four years to enact the stipulations laid out in the Health Care Reform Act. Change in any area doesn’t come quickly or easily, but if everyone had individual health coverage, then there would be less stress over medical treatment.

There’s a huge misconception out there that if you own a business, you get a better deal on health insurance. The fact is, many “group” health insurance plans come with higher price tags than individual health policies.

For the small business owner with 5-7 employees or less, offering to reimburse employees for their individual health insurance policies through an HRA (Health Reimbursement Arrangement) can prove a significant cost savings to the business, while giving more freedom of health insurance plan choice to their employees.

In addition, the employees ‘own’ their individual plans, which means there’s no need for COBRA coverage if they leave their current employer. Since businesses smaller than 20 employees do not offer COBRA coverage anyway, individual plans become even more attractive.

The biggest advantage of individual health plans over small group plans is price. Individual health plans typically offer lower premiums than similar group plans. The reason is risk. Individual health insurance in Washington State requires a health risk questionnaire be completed as part of the application process. The purpose of the health questionnaire is to ‘weed out’ the higher risk applicants with significant health risks.

Most people pass the questionnaire with ease. When they do, they fall into the same group as everyone else who also passed the same questionnaire, which represents a lower ‘risk’ to the insurance company, thus lowering rates. (Those who do not pass the health questionnaire are provided the opportunity to sign up on the Washington State Health Insurance Pool, a high-risk pool with significantly higher premiums) If a business has an employee who does not pass the health questionnaire, then it can still prove less expensive to cover the high risk pool premium for that individual employee versus paying higher group rates for all employees.

Group plans in Washington do not have a health questionnaire, so the insurance company has no way of ‘weeding out’ the unhealthy employees. The rates have a ‘built in’ risk factor, whether warranted or not, because the insurer has no way of separating the high risk groups from the low risk. Groups of 2-50 employees are ‘community rated’ meaning they are in the same risk pool whether their employees have low utilization or high. Therefore, the small business with healthy employees ends up paying a higher rate because of other businesses who may have employees with expensive high risk chronic health problems.

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