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Today is Thursday, May 17, 2012

Buying Insurance

What Mitt Romney should but won’t say about RomneyCare and health care reform

On Thursday, Mitt Romney, a yet-to-be-announced presidential candidate, will try to get the RomneyCare Massachusetts health insurance disaster off his back.

Romney experimented with health insurance markets in Massachusetts, and his stab at increasing access to health services while containing costs has failed big time. Health insurance is more expensive and health care is harder to get in Massachusetts under Romney care. And 100,000 still are uninsured.

In his speech, he needs to spell out the failures in RomneyCare and explain what he has learned from those failures. He should not play the blame game.

Then he should propose a new experiment for the country and the states. I think putting the health insurance and health care reform burden on uninformed, self-interested and gullible state legislators and governors would be a huge mistake. Even more than members of Congress, state legislators are over influenced by the experiences that they, their families, their friends and their biggest contributors have had and are having with specific illnesses, medical procedures, drugs, medical devices and providers.

Indeed, I think Medicaid should be federalized and standardized rather than continue with the state involvement that we have today. It's just to complicated for state politicians and bureaucrats to manage cost effectively and for patients. And I'm a libertarian Republican who is against socialized medicine and centralized planning. But I've also been covering health policy since 1976, and I think Medicaid is broken because both members of Congress and members of state legislators have voted for their personal power, not for patients nor taxpayers.

Private health insurance markets should be re-regulated to give consumers and insurers the freedom to buy and offer products that meet the needs of consumers at a profit for insurers.

Both consumers and insurers need financial incentives to buy right and create cost-effective products. The key is to make sure that consumers know what they are buying and have the freedom to buy as much or as little coverage as they want so long as they end up paying for all of their health care without tax credits or government subsidies unless they truly need subsidies. No one who needs subsidies pays taxes, which means those who don't pay income taxes should not get tax credits of any kind. No one should be allowed to declare bankruptcy so they can avoid paying the uninsured portions of their medical and health care bills.

People should have strong financial incentives to buy the insurance that would cover the catastrophic losses that they could not afford to put on their credit cards. People who under insure should be required to sell their homes, cars and any other assets to raise the money to pay their medical bills, and they should be put on payment plans that hurt until they get their bills paid.

High deductible insurance is what you should buy to avoid the pain of paying catastrophic medical bills and the cost of fixing cars when they are wrecked. If you don't buy the insurance, you should suffer the consequences, not taxpayers nor people who do buy insurance and pay their bills.

Take all employers out of the health benefits business. Employers buy what's good and affordable for them, not what's good and affordable for their workers. Employers game the system, the tax codes and their workers on health benefits. After politicians, employers are the most dishonest players in health care.

Thus, there should be no tax credits for anyone who buys health insurance. It should be an after tax expense for everyone. Tax incentives are for the favored few, which, amazingly in this case, are those who make enough money to pay income taxes.

And tax incentives promote wasteful spending on low deductible policies that pay insurers to hold insureds' money until they need to buy preventive care and routine medications that should be paid for out of their pockets. We don't use insurers to pay for oil changes in our cars or for the maintenance of our homes, and we should not pay insurers to hold our money until we needed it for preventive and routine health care services and products. We don't pay banks to hold our savings until we need our money.

Further, tax incentives redistribute incomes in ways that increase government spending, increase financial incentives for politicians to pander to the favored few and kill jobs.

Health insurers should be regulated to ensure that they create and sell products that consumers with 4th and 5th grade educations can understand and evaluate. They should be required to spend the time and money needed to make sure that every customer understands insurance, health care and how their health plans will work and what they will cost.

Insurance is complex, and if insurers offer too many options, no one will know what to do. Part D Medicare's drug benefit plans have taught even those of us who believe in consumer choice and free markets that insurers can make decision making very difficult. Indeed, the politicians who write the laws and regulations force insurers to confuse consumers, imho. New health laws and regulations should be easy to understand, comply with and enforce.

Even though Romney knows all this, I doubt that he'll take this approach.

Like all politicians, he'll pander to special interests in health care and government as well as in the insurance business. He'll suck up to the moocher nation because most Americans believe in free lunches---tax credits, government subsidies, government programs and no deductible health insurance policies.

Sadly, few Americans want to pay their own way, which is why we have a huge budget deficit and totally dysfunctional health insurance and health care markets.

Posted by Donald E. L. Johnson on 05/10/11 at 03:31 PM
'12 President • Health insurance • Buying Insurance • Health Insurance Reform • Medicaid • Medicare • Permalink

People who are smart about money won’t buy health insurance until they become sick

ObamaCare will give working Americans who are smart about money strong financial incentives to become and stay uninsured until they need catastrophically expensive health care. If they recover and no longer need insurance, they’ll drop it until the next time. The number of people who can afford to buy health insurance today but don’t is about 15 million. In five years, it could be several multiples of that.

Economists are just figuring it out here and here. Even liberal bloggers are getting it.

What this means:

Posted by Donald E. L. Johnson on 04/02/10 at 01:51 PM
Colorado • PPC • Health insurance • Buying Insurance • Health Insurance Reform • Healthcare Providers • Hospitals • Read More

How to buy long-term care health insurance for seniors; new regulations needed

Millions of Americans are hoping and some even are expecting to live into their 90s, but they don’t have the long-term care insurance that would make their long lives affordable and more comfortable.

Having shopped for long term care insurance, I can tell you that figuring out what’s affordable and makes economic sense is very difficult.

It is difficult to find an experienced agent to help you with the search. You need someone who represents several insurers and has been in the business for a long time, not a newby who is representing one insurer. If you have a financial advisor, ask him or her for the names of several insurance agents, but don’t use the financial advisor as a long-term care insurance agent. Few financial advisors spend enough time in the long-term care insurance markets to be experts in those markets. You need an expert. If a financial advisor claims to be an expert in long-term care insurance, I’d wonder whether that advisor was more interested in earning commissions or in helping me. It’s human nature to take care of yourself first.

Then you need to know what questions to ask, which is difficult for even those of us who know health insurance and health care and have lived with elderly parents and other elderly relatives.

In the June 26, 2009, edition of the New York Times, Walecia Konrad, the daughter of a 92-year-old man, gives some pointers on shopping for long-term care insurance. In addition to following her advice, talk to several agents. The more people you interview, the better you’ll understand your options. Don’t let the first agent you interview make the sale. Talk to half a dozen or so agents, read the policies they offer, and then decide.

Consumer Reports also has published useful articles on long-term-care insurance. You can find back issues of Consumer Reports at your library or at http://www.consumerreports.org.

Another resource may be the free subscription newsletter LTC123.com.

Many people are benefitting from long-term care insurance. And many others have been disappointed when they claimed coverage.

The long-term care insurance industry is very good at confusing and misleading its prospects and customers.

States and the federal government need to rewrite long-term care regulations to make it easy for consumers to evaluate the insurers’ offerings.

But insurers buy off state and federal legislators and even state insurance commissioners with campaign contributions.

So don’t look for the long-term care insurance market to be cleaned up anytime soon.

Posted by Donald E. L. Johnson on 06/28/09 at 09:44 AM
Health insurance • Buying Insurance • States' Health Legislation • Health Insurance Reform • Permalink

How to buy health insurance

Shopping for health insurance probably is more difficult than buying a car or a house because you have to be very good at finding a reliable agent, comparing plans and reading the fine print, which can be a challenge for lawyers.

About 202 million Americans have private health insurance. By 2010 about 20 million people will buy health insurance through insurance agents and insurers rather than through their employers. In 2007, according to the Census Bureau, 177.4 million people were covered by employment-based insurance. Please note that Census Bureau figures are very questionable, but these are the best figures I can find at the moment.

In the June 24, 2009, edition of The Wall Street Journal, Anna Wilde Mathews’ article, Going it alone when buying a health policy, explains how to research the health insurance markets.

Since you may spend $5,000 to $20,000 a year, or $25,000 to $100,000 over five years, on health insurance, it pays to learn how to play the health insurance markets. Nobody will look after you, your family and your money as carefully as you will, especially if you know what you’re doing.

Simply put, the first step is to read her article and the some 55 comments on the article. (Paid subscription required, and it’s worth it if you’re about to spend $10,000 to $20,000 for a year’s worth of health insurance.)

The second step is to talk to, say, half a dozen insurance agents. Get names of agents and brokers from friends. The more agents you visit with, the more you’ll learn about the agents and about your options. Look for an agent who represents several insurers and works for you as well as for commissions. Those commissions range from 3% to 20%, Mathews reports. So, be careful.

Mathews recommends that you talk to agents who specialize in health insurance, not new agents nor agents who also sell property and casualty or life insurance. Understanding and keeping up with health insurance is a full time job.

Third, visit online insurance sites and brokers. Web-based brokers suggested by Mathews include:

www.eHealthInsurance.com
http://www.HealthPlanOne.com
http://www.HealthInsurance.com
http://www.InsureMonkey.com

Other resources include:

www.healthinsuranceinfo.net
http://www.familiesusa.org
http://www.healthcarecoach.com

Impact graphs from Mathews:

Some consumers choose plans based solely on online research. But without guidance, it can be tough to fully understand the nuances of a plan and how it compares to other options. First, make sure you‚Äôre actually buying insurance, not some other product such as a discount card. Don‚Äôt just look at premiums. Figure in other fees you will face, such as a percentage of the cost of doctor visits. Make sure you understand the policy‚Äôs annual out-of-pocket maximum, meaning the most you might have to spend in a year, since certain charges might not count toward the total.

Also, watch out for benefit limits or exclusions. If you focus just on price, ‚Äúon the back end, you‚Äôre going to get stung,‚Äù says Ida Schnipper, founder of patient-advocacy firm Health Champion LLC.

Before making a final decision to purchase a policy, closely review the full plan explanation, sometimes called the certificate of coverage or the evidence of coverage, and seek help from the Web brokerage‚Äôs agents or other experts if you don‚Äôt understand it. Insurers may let you review this document only after you tentatively choose a plan.

If buying health insurance looks like a lot of work, it is.

We’ve been buying health insurance for ourselves and employees since 1986. And despite our expertise in insurance and health care, we always depend on our health insurance broker for information and guidance. But it helps to know what questions to ask, and you can save a lot of money and grief by asking good questions.

Do your home work.

Posted by Donald E. L. Johnson on 06/27/09 at 05:34 AM
Health insurance • Buying Insurance • Individuals • Small Groups • Small Business • Permalink