Archives for the month of: March, 2012

General Verrilli made a comment that illustrates a lack of understanding of both the individual insurance market and current tax code.  He claimed that that the individual market does not provide affordable care because subsidies are not available.

The most recent Kaiser Foundation study on group and individual premiums shows that in every state the average individual premium rate is lower than the average group insurance rate.  This spread can be as low as 3-4% in states like Massachusetts and Vermont to as high as 60-65% in states like Alabama and California.

The reasons for the differences in premium can be attributed to carrier risk selection, greater choice in plan designs and greater competition among carriers.

I am assuming that the  “lack of subsidies” comment means that the employer is not contributing to the individually purchased health insurance.  It is true that the employer can not directly pay for an individual health insurance policy, it is not true that it is not possible for an employer to provide funding for an employee’s health care and insurance expenses.  Section 105 of the IRS code permits employer funding of insurance premiums and any other section 213d expense via an employer funded Health Reimbursement Arrangement (fancy name for Section 105).  The accounts are subject to ERISA and offer the same tax advantages to the employer and employee as a traditional plan.

Setting up a benefit program in this way is the same thing as offer a 401(k) instead of a Defined Benefit Pension plan.  Employers can still provide compensation that is specifically targeted to health care expenses, but employees get to make their own choices in a personal and private setting.

I can wait to get past the first 30 seconds of the General’s open remarks from Tuesday.

General Verrilli offered up the primary reason so many people can’t afford health insurance.

He said that “insurance has become the predominant means of paying for healthcare”. That is not what insurance was designed to be. Here is the dictionary.com definition:

in·sur·ance   [in-shoor-uhns, -shur-] noun
1.
the act, system, or business of insuring property, life, one’s person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a payment proportionate to the risk involved.
2.
coverage by contract in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract.
3.
the contract itself, set forth in a written or printed agreement or policy.
4.
the amount for which anything is insured.
5.
an insurance premium.

How much would auto insurance cost if it were required to “cover” such losses as gas, oil changes, wash, wax, dings and etc. ?  Would the Prius driver be happy paying the same premium as the Hummer driver?

 

I think a lot of the people behind the PPACA are really for a “Single Payer” system.  So am I.  Of course I believe the single payer should be the same single payer who makes the utility payment, car payment, TV purchase and food purchase.  

Even in the ultra regulated insurance market there exists a path to allow all of us to pay for routine care, accumulate the wealth required for more expensive procedures, purchase the catastrophic protection required for the $50K+ claims and not have to spend 30% of our take home for “insurance” that covers items that are easily budget-able.

The 60 years of 3rd party payment have brought us where we are today and it is unsustainable.  Stop arguing about whether your boss or your neighbor should pay for your health care expenses.  Let’s debate who the Single Payer should be – the individual/consumer or the federal government.

Just keep in mind that when someone else pays they bills they get to set the limits.

Testing the new http://www.simplifibenefits.com site and getting ready to set entreprenuers free, no matter what SCOTUS decides on ObamaCare.

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