Personal Finance Tips

Everyone in the US understands the importance of the current healthcare debate. Premium rates are rising across the nation. The WellPoint subsidiaries in California and Indiana raising their rates on individual health plans by up to 39%. The results are inevitable. The number of families unable to afford health insurance is bound to rise dramatically. Estimates vary, but one thing is clear. There are probably less than 50 million Americans without health cover right now. By the end of this year, it will be more than 50 million. It is a sad reflection on the US. This country prides itself on being the best in whatever it does. Yet, when it comes to healthcare, it is one of the worst performing countries in the world. Look at any international comparison and you will see a lower life expectancy and more deaths caused by failures in the healthcare services than almost every other developed nation. Yet the February Healthcare Summit showed the political parties as far apart as ever. There’s no sign of any bipartisan move to improve the situation for the ordinary people of this country. Instead, the GOP want reform stopped in its tracks. How this appeals to voters is hard to understand. Why should anyone vote for a party that wants to keep this present broken system?

Anyway, we now wait to see whether the Democratic Party has the strength of character to pass the reform bill using the budget reconciliation procedure. This allows a bill to become law on a simple majority. If the bill is signed into law, it will begin the slow process of reforming the current reality. But this is going to take more than one year to produce obvious results so, for those of you looking for affordable insurance now, you have to assume there will be no reform bill riding to your rescue like some Marvel hero. This is frustrating but there’s no sense in having false expectations. You have to deal with the world as it is and make the best of it.

This brings us back to the mechanics of this site. Here we have a search engine that contacts all the heath plan providers in your state. As an aside, one ironic point of agreement between the two political parties is that you should be allowed to buy a plan across state lines. Unless and until that becomes the law, you are restricted to buying a plan from an insurer licensed in your own state. This restricts competition and makes it more difficult to find an affordable plan. Because the use of this site is completely free, you can get multiple sets of health insurance quotes, and compare and contrast the plans and their premium rates. Now, more than ever, it’s important to shop around and collect the most information you can about what the market is offering. The more health insurance quotes you collect, the wider the choice and the better the chance of finding an affordable plan. While you search, consider the new power of influence claimed by the Tea Party. They want to tear down big government. It would be good to see some more support for the other side of the argument. With elections coming around later this year, you should get involved and make sure the right message on healthcare reform gets through to Washington. Do not let the negative voice go unanswered. If you want health insurance premiums to fall, make your voice heard and push for reform.

There are times when you get an overview and then it hits you, “Somethings just don’t add up.” Well, you remember Wellpoint, don’t you? This is the friendly company that, around January or February, announced it was going to increase premium rates by up to 39% in a number of states around the Union. President Obama got himself all worked up, citing them as the real reason why all the Democrats in Washington should band together and take a stand against the insurance industry. Then, sure as eggs is eggs, there was a stampede to get the healthcare reform bill to the President for him to sign it into law. Those Democrats sure did have fun beating on Wellpoint. So the big question is what happened next? Here’s one of the largest corporations in the insurance market demanding premium increases. Did it get its way?

The answer starts off in California where the maximum rate of 39% was due to take effect. The state referred the proposed increase to independent auditors for an opinion. The answer came back negative. It seemed Wellpoint couldn’t add up. Well, that’s oversimplifying things a little. But the reality is that the numbers Wellpoint offered to support their premium increases were based on some very shaky mathematical assumptions. When news of the report became public, Wellpoint withdrew the proposed increase. Acting on this, Kathleen Sebelius who is Secretary of the Department of Health and Human Services sent out a letter to all state insurance commissioners encouraging them to review every proposed premium increase. This is the first sign that the balance of power is shifting against the insurance industry and in favor of the consumer. For too long, insurance companies have hidden behind complicated mathematical explanations and gamed the system. With the Affordable Care Act now law, Sebelius is encouraging every state to give itself the power to approve rate increases. The first sign of continuing good news for consumers comes out of Connecticut where Attorney General Blumental forced an audit of Blue Shield and Anthem Blue Cross, both Wellpoint subsidiaries. Connecticut’s Insurance Commissioner Sullivan rejected these companies requests for increases last year. It seems likely the same thing will happen this year.

By moving so quickly to encourage states to review all proposed rate increases, Secretary Sebelius is demonstrating one of the key advantages now available to the Federal Government under the new laws. That the interests of the consumer will be put before the interests of the health insurance industry. This means every state should be going through a routine of analysis every time premium rate increases are proposed. The assumptions, evidence, claims histories and trends asserted should all be rigorously tested. If there are any problems, the increases should be denied. The aim should always be to ensure affordable individual health insurance plans are available to the majority of people living in the US. For too long, the insurers have been allowed to bamboozle regulators with math and complicated explanations. With independent audits now coming into play, the kind of success enjoyed by the citizens of California should be felt around the US.

This February, the Department of Health and Human Resources has issued a report identifying an alarming trend for insurance companies to seek premium rate increases. This is not limited to one or two states. This is not limited to one or two percentage increases in the rates. This is all the leading insurance companies asking for the right to significantly higher premiums: in Michigan hikes of 56%, in California hikes of 39%, and so on. If this only affected small numbers of policyholders, it might have passed unnoticed. But, with millions of policyholders affected across the country, these rate increase requests have attracted the full scrutiny of the federal government. Secretary Sibelius has been leading the attack, using the requests to push the reform agenda forward.

Because of the national anger, some companies have paused. WellPoint had proposed the increases take effect from March 1. Any increases, even if approved by the states, will now be delayed until May at the earliest. This decision is partly in response to the summons of WellPoint’s chief executive officer to Washington to justify the requested increases. Insurance companies find themselves in a difficult political situation. Their management teams accept a duty to maximize profits for the benefit of the stockholders. They look around at an America seriously affected by the recession. Increasing numbers of people are unable to afford the premiums, some because of unemployment, others because of a squeeze on credit. More worrying from the insurance industry is that more healthy people are deciding not to insure at all. This means the group of people left holding policies has a higher percentage of those with existing health problems. Without more healthy people in the group paying premiums and not claiming, it becomes more expensive to insure those less healthy people who remain. It is also a verified fact that hospitals and healthcare service professionals have also been increasing their fees and charges. The pharmaceutical companies have increased the price of almost all the most commonly used drugs. The insurance industry is under pressure from both sides. As Secretary Sibelius points out, however, this is not a completely accurate picture. Every year, insurance companies are required to submit reports to all the US states in which they are licensed to sell policies. This data shows many companies actually increased the number of policyholders during 2009.

The market in health insurance plans is complicated by the political situation. Democrats and Republicans are two armies unable to agree a truce long enough for some reform to be made. As it stands, there is no immediate likelihood that medical costs will be controlled. If the costs continue to rise faster than inflation, insurers will have no choice other than increasing their premiums. If they do not, they will not have enough cash in hand to pay out on all the claims. This means, for the average person, it will become increasingly difficult to find cheap health insurance. For those with a pre-existing condition, group health insurance will be the only option but, for those plans, premiums are rising at their fastest rates. For years, it has been obvious that the healthcare industry is broken. It would be ironic if, having come this close to some meaningful reforms, we not only saw the reform bills lost in Washington, but also found every major insurer imposing massive premium increases. That really would be the final nail in the coffin.