It’s a little like a game of Pin the Tail on the Donkey, except there’s a maze to find him and the donkey is on the move.
That’s what some area healthcare insurance brokers said they’re trying to go through in order to keep their clients covered, in compliance with government regulations and abreast of the constant flux created by healthcare reform.
“It’s making my life much more complicated because it’s making the lives of my customers much more complicated,” said Greg Seifert, a Vancouver health insurance broker. “Not all of the changes are bad, but change is change and requires a response.”
Some of the changes Seifert said are positive are the changes in coverage of children until age 26 and preventative care coverage. However, the administrative portion of an adult child covered by a parent’s healthcare plan has Seifert scratching his head. An adult child may be married and covered by a parent’s health insurance now. Typically, healthcare coverage hasn’t included pregnancy care for a child. But it could now, according to Seifert, at least in theory.
There’s also a W-2 dilemma, depending on where you live. Oregon state laws don’t allow for untaxed premiums, which is in direct conflict with new federal laws. So, at least right now, Seifert and others aren’t clear how the year’s administrative chores will shake out.
“It happens very quickly and it’s very complex,” he said.
On the preventative side of things, brokers said it’s a double-edged sword. With preventative procedures covered by health insurance, it will, in theory, keep Americans healthier by nipping health problems in the bud or treating them earlier, which is typically less costly. But even prevention has a price tag.
Kathy Frazier, a Vancouver healthcare insurance broker offers this example: A colonoscopy is a good idea and an important screening tool for men. Under the new healthcare reforms, it’s free to patients. Though in reality, Frazier said, it’s not free. On average, the procedure costs about $2,200, according to Frazier. If insurance companies are shouldering more of these “free” procedures, she believes the cost will return to customers in the form or rate increases, which can rise by 22 percent per year.
“In this country, we expect what we want, when we want it and we don’t expect it to cost us much,” Seifert added.
Seifert estimates 90 cents of every dollar an insurance company takes in by way of premiums is spent to pay claims.
“Claims drive premiums,” he said.
To Seifert’s way of thinking, healthcare reform needs more than just additional people covered by additional insurance companies to spread out the risk. It needs to be a systemic system change, with tort reform, patient care changes, lifestyle changes and a true understanding of the cost of healthcare procedures.
“Employers and employees have been insulated from the cost of care,” Seifert said. “It has to impact the wallet of the consumer.”
Rather than a flat co-pay, Seifert suggested his clients offer their employees higher co-pays, so that care is available but not used indiscriminately, which drives up overall costs and raises premiums for everyone.
When asked how healthcare reform has affected business, area brokers echoed Seifert, saying that keeping up-to-date is crucial and educating their clients is an even bigger part of their jobs. However, it’s a mixed bag when it comes to through-the-door business. Seifert said he’s seen a reduction in business and some employers dropping healthcare coverage altogether. Frazier, however, said she’s seeing an uptick in her business.
While the crystal ball is murky at best when projecting business and the effects of healthcare reform when it’s scheduled to go into full effect in 2014, brokers tell us the cost of healthcare insurance keeps rising because the cost of healthcare keeps rising.
For individuals who are now cast into the waters of healthcare insurance solo, it’s mixed. Nancy Thompson, a health insurance broker who works with both employers and individuals, offered up the example of a 30-something who recently came to her for healthcare coverage. The woman was able to get medical coverage for less than her employer offered, but the coverage wasn’t as comprehensive and didn’t include dental care. A 50-year-old, by contrast, would pay significantly more for coverage than he or she might under an employee-sponsored plan, he said.
Meanwhile, Families USA recently released a report conducted by the Lewin Group to calculate the savings to Washington state families under healthcare reform. The report estimates that, if the full changes were in effect this year, some 299,900 Washington families would save $541.1 million from out-of-pocket spending caps.
Still, area brokers appear to be keeping a wary eye on Washington D.C.
“We’re trying to position ourselves and trying to make sure that we don’t get legislated out of business,” Seifert said.