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Health Care Reform: Unintended Consequences

Tue, 20 Jul 2010 18:52:07 +0100

Bits and pieces of Health Care Reform are beginning to fall into place, although of course the lion's share will not go into effect until 2014. As we agents figure out how to best help our current and future clients get and keep coverage, I'll be keeping you up to date on the latest and how it may impact your health insurance decisions. Decisions which, directly or indirectly, often affect life decisions
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There is one particularly crucial point of which you should be aware, particularly if you currently (or will soon) provide your own coverage.

Be extremely careful which carrier you choose. I foresee carriers - possibly many, if not most - leaving the individual market over the next couple of years. Carriers leaving the market have no obligation to see that you get comparable or affordable coverage.

And just what crystal ball does Sharon have? A valid question. Health Care Reform includes a requirement that insurance companies meet a "minimum loss ration." What this essentially means is that an insurance carrier must pay out at least 80% of incoming premiums in outgoing claims. The other 20% has to cover everything else - physical facilities, salaries, administration, dividends, and, yes, sales commissions.

Over the last couple of months, we contracted agents have received letters from many of our carriers. These letters (after telling us how much they loved us and appreciate all our efforts) advise us that our commissions will have to change (read "decrease") in August in order for them to meet the minimum loss ration. But the kicker is they won't be able to tell us what our new, lower (retroactive to August) commissions are until sometime around December!

So, why am I telling you this and what does it mean to you? The upshot of these communiques is essentially that most agents will stop putting business with these carriers. Think of it this way: You're offered Job A and Job B (yeah, I know, a pipe dream in this job market, but bear with me here). Job A tells you what your salary will be; Job B says, "Come work for us in August, and we'll tell you in December what we're going to pay you." Which job would you take?

When an insurance company stops bringing in new, healthy insureds (whose premium dollars help offset the claims for those already insured who have become less healthy), rates have to go UP. And as rates spiral upwards, the healthier insureds jump off that carrier over to another. This is called "adverse selection" and what happens very quickly is that the only insureds left on the plan are the less healthy ones. You can imagine what that does to rates.

Now that we have the state and/or federal risk pool plans, those with serious pre-existing conditions will be able to get coverage through one of those. In additon to being complicated to qualify and apply for, those plans are still too expensive for many budgets, causing many to drop coverage completely.

The end result of all this is that many carriers will no longer be able to maintain a viable presence in the individual marketplace. Worse, still, is that I predict many insureds will still be left (at least until 2014 - the outcome of which still remains very much an open question) without affordable health insurance.

The good news is that I think there are certain carriers who will definitely be "last-men-standing." Unless there's a compelling reason to do otherwise, that's where I'll be placing my own clients in the coming months unless or until I see evidence that I should do otherwise.

Warning: Combining Medications Can Be Hazardous to Your Health

Tue, 30 Mar 2010 23:29:33 +0100

Did you know that over 600,000 emergency room visits each year involved adverse reactions to or interactions of prescriptions or over-the counter drugs or supplements? Here are some of the main risks:

Taking different drugs prescribed by more than one doctor
Using drugs to treat conditions for which they weren't originally prescribed
Taking leftover drugs that were stockpiled and later used incorrectly
Using a drug that was appropriate initially but caused a toxic interaction when a new drug was prescribed
Taking OTC medications or supplements incorrectly or in combination with prescription drugs

Some examples of types of drugs that can result in dangerous interactions with others are:

Central nervous system depressants. Opioid painkillers (e.g. Oxycontin) on their own can be dangerous when taken in sufficient quantities. Sedating drugs such as benzodiazepines (e.g. Valium) taken for anxiety added into the mix can result in a deadly combination.
Blood thinners. The drug warfarin (Coumadin) has what's call a 'narrow therapeutic range,' meaning that just a bit too much or too little in the blood can be dangerous. Taking antibiotics can lead to higher levels of warfarin in the body, resulting in hemorrhaging. NSAIDS (aspirin, ibuprofen, etc.) can result in the same consequences. Acetaminophen (Tylenol) can be a safer OTC pain killer for those on blood thinners.
Antidepressants. Combining one type of antidepressant with another can result in a rare but potentially fatal reaction called 'serotonin syndrome.' This is most likely to occur when moving from one type of antidepressant to another without allowing one to clear the system before starting the new one.
Acetaminophen. Various cold and flu "combo" medicines may contain acetaminophen. Before taking acetaminophen tablets or capsules, always read the labels of any of these combo cold medications you're taking. An overdose of acetaminophen can result in liver damage or even failure.

56% health insurance company profits? Absolutely not!

Tue, 16 Feb 2010 21:26:21 +0100

On my way home from a BCBSNC meeting today, I stopped to indulge one of my guilty pleasures, eating at McDonald's, and a less-guilty pleasure, reading the Charlotte Observer. I practically choked on my chicken strip when I came upon this letter to the editor on the Forums page:

In response to "Health care insurers' profits up 56% in '09" (Feb. 12):
Huge profits to health insurers while uninsured die? Shameful
So health care insurers made a 56 percent profit in 2009, and there's no chance for reduced insurance bills in 2010?
Ironically the billions of dollars healthcare insurers have spent on lobbying politicians to keep the gravy train running would provide quality health care for every man, woman and child in America.
When health care is available for everyone, healthy babies become healthy adults who are productive and patriotic. To read that 44,000 people in the U.S. died last year because they couldn't afford health care is a disgrace.
L.T. Cantrell
Charlotte

I couldn't get in my car and head back to my computer fast enough! Since the odds that my letter will make it into print are probably slim, and make it into print unedited are slimmer still, here is my response:

BlankNo, no, NO! Obviously, someone needs a tutorial in basic business mathematics. A 56% increase in profits is not even remotely similar to Cantrell's erroneous statement that "health care insurers made a 56 percent profit in 2009." If a health insurer made, for example, a 2% profit in one year and then made 3.12% profit the next year, THAT is a 56% increase. And shame on you, Charlotte Observer, for printing a letter in the forums with such an erroneous and inflammatory statement!

We all know our health care system and methods of paying for said health care need fixing, but painting health insurers' low single-digit profits as the problem is putting the blame in the wrong place when pharmaceutical and medical equipment companies' profits are in the high teens.
Sharon Nuttall
Charlotte

I'm well aware that the Forum is open to everyone and is designed to be an opinion page, but you and I know that people see things "in the paper" all the time and assume they are accurate. I know the beleaguered Observer is down to about 2 full-time staffers, but wouldn't you think someone would have caught that egregious misstatement? And I'll try (probably unsuccessfully) to avoid thinking that it just might have been allowed to "slip" through in an un-accidental way.

Declined for health insurance coverage?

Mon, 01 Feb 2010 18:50:09 +0100

Nobody likes rejection. And it really feels bad (and scary) to be rejected, officially called "declined," for health insurance coverage. We agents don't like it either, but it's a fact of life in our world and one we have to help clients with.

If you've been upfront about any health issues during early discussions with your agent, he or she should be able to give you an idea of what to expect in terms of underwriting outcomes. Most (but not all) carriers make available to agents a list of conditions that will trigger an automatic decline. Sometimes, however, there is more gray area, particularly when it's the additive effect of multiple conditions rather than any one single condition that is cause for decline. And for some carriers (the ones who don't give us underwriting guides), we pretty much have to base our recommendations on a combination of other carriers' guidelines and past experience.

In North Carolina and South Carolina, the two states I cover, the Plan B in the event of a declination is a state high risk pool. While not inexpensive (particularly in South Carolina), the risk pool plans at least offer an alternative to going uninsured.

On a couple of occasions, I've been able to find a short-term plan that would at least provide basic coverage until other coverage, either Medicare or an employer group plan, can be obtained. However, this isn't a perfect solutions, as short-term plans, while at least affordable, don't cover pre-existing conditions. And often, the same health issues that caused the original decline will also render the individual ineligible for short-term coverage.

This is one of the major issues that we in the health insurance industry would like to see addressed by Congress. If they would at least level the playing field and require certain things of all insurers, I really do think there is a solution for this part of the healthcare puzzle.

Individual health insurance has gone green!

Wed, 27 Jan 2010 19:21:50 +0100

It didn't occur to me until just recently (um, like yesterday) that the way I do business nowadays is WAY greener than it used to be. How so, you ask? Well, let me iterate some of the "old" ways:

Everything used to be on paper. Everything! Paper brochures, paper contracts, paper rate sheets, paper marketing materials, and on and on.
All that paper stuff changed constantly and so was delivered to me regularly in (you guessed it) paper envelopes and cardboard boxes.
All that paper and cardboard stuff was delivered to me in fuel-guzzling and exhaust- and CO2-spewing trucks.
Many times, when a prospective client called, I had to hop in the car and drive to who-knows-where for an in-person appointment, often more than once.
If I could manage to get off the hook for the initial in-person appointment, I would run the person a quote on my computer and then print it out on (you guessed it again) paper, put it and a paper application (with a paper SASE) into a paper envelope to be mailed -- ah, more trees felled and more fuel-guzzling and exhaust- and CO2-spewing trucks!
At least some of my marketing was via mail - and there go some more trees, more petroleum and more air pollution.
If I wanted to network, it had to be at an event, in person and/or meeting with people at coffee shops, etc. More car miles.

So what are the new, cleaner, greener ways of doing things?

Pretty much everything is still available in a paper form, but I hardly every use that format.
When somebody calls about health insurance, we usually have a long conversation discussing the options.
I run all quotes on the computer and most of them get emailed straight to the person. I can even attach a PDF of the brochure to an email. Some of the carriers' quoting software includes a PDF right with the quote.
While I still offer in-person appointments, most people feel comfortable after having had their questions answered via phone and they know I'm always available to answer followup questions.
Most people opt to complete the entire application online; a few still complete a paper application, but that's usually something they print out from a PDF of the application that I've emailed them that they (admittedly) snail mail back to me. Still, once I get their paper application, I usually enter the information online, ending the paper trail.
Most opt for the bank draft payment option, although direct bill is still available from most carriers (albeit often for an additional fee).
I still go to networking events and meet people for coffee or lunch, but there are huge (and largely free and non-polluting) additional marketing options now using the internet: this blog, my website, social networking sites, and email marketing like my weekly e-newsletter.

So, there you have it. Health insurance gone green - not to mention far more time and cost effective! And how many people REALLY get excited at the thought of having an insurance agent in their home, anyway?! :-)

Is a short-term health plan a good option for you?

Tue, 19 Jan 2010 17:26:59 +0100

A short-term, or temporary, health plan might be just what the doctor ordered for some situations. If you'll have a coverage gap of of just a few month until other coverage (employer-sponsored, Medicare or an individual health plan) is set to begin, it can be the perfect filler.

I usually don't recommend that short-term coverage be used in place of a regular major medical plans because of its limitations. Pre-existing conditions and annual physicals are not covered. However, in those situations where major medical coverage is either unobtainable or unaffordable, short-term health plans are certainly far better than going uninsured.

If you think you might be a good candidate for short-term coverage, why not run a quick quote and complete the very short application to see if it would be a good option for you. The link below will take you directly to the website for Assurant short-term health insurance:

http://stmdirector.eassuranthealth.com/STMConsumer/Default.aspx?linkid=C2A17D4984DC451C

If you have any questions about it, please feel free to call me at 704-366-4977 or email me at sharon@ehealthinsurancesolutions.com.

Do your health insurance premiums make sense?

Tue, 12 Jan 2010 19:32:28 +0100

Everybody complains about them but most don't do anything about them. I'm talking about health insurance premiums.

When was the last time you ran the numbers to see if what you're paying makes sense for your situation?

If you're dealing with major illness and have been in and out of the hospital and are receiving ongoing treatments, by all means, stay with what you have. You're most likely getting WAY more than your money's worth! (Which brings me to a question for a whole other day: why do people complain about NOT getting their money's worth from their health insurance? But I digress.)

Fortunately (from a personal health perspective), most people are in the "paying more than they need to" category. Even some of my clients, although I do my best not to have that happen. (First rule of sales: you have to give people what they want, not what you think they need, or in this case, don't need.)

Recently, I had a call from a young woman whose family's premium had recently gone to over $2000 a month, which gives me a headache just to think about! As many people do, they had bought their plan a number of years ago and had just adjusted their budget as they got hit with each rate increase.

The solution was absolutely simple and totally painless. Staying with the same company, we moved her to a $10,000 deductible HSA health plan. That deductible, by the way, is per family, so everyone's medical expenses go toward meeting it. The new premium? Just over $400/month!

Dollars saved? Over $19,000 per year! And that's not all...

She and her husband can put up to $6,150 tax-FREE into a health savings account each year. There's no requirement that they fully fund the health savings account of course (or even open one, for that matter). But if they do, depending on their income tax bracket, that can be in the range of an additional $2,000 saved in income taxes. (Of course, I'm no tax advisor so consult yours for details.)

I'm not the "Hey buddy, I can get it for ya' wholesale" type -- but I just LOVE when I can play with the numbers and save people money like that. It just makes me feel all warm and fuzzy...and those clients seem just a little pleased, too!

HSA Health Plan = Different Way of Practicing Medicine?

Tue, 12 Jan 2010 19:35:33 +0100

Bill and I (and many of my clients) have an HSA-qualified high deductible health plan. The premiums are wonderfully low, but of course we had to give up a few things to get those low premiums - like office visit and prescription drug copays. We have found it an excellent trade-off. (And, by the way, we do have full coverage for our annual physicals.)

What hadn't occurred to me was how differently doctors tend to practice medicine when there aren't any copays. A key part of this has been that we're not bashful about communicating to our doctors the fact that we'll be paying for this test or that prescription "out of pocket."

I've found that doctors are wonderfully accommodating when I utter that three-word phrase. Many of them fully understand what I mean when I say I have an HSA-qualified health plan, and I'm surprised when some say that they have the same type of plan themselves!

When I ask if the test or prescription is really necessary, I've been amazed that the doctors are usually quite straightforward, honest and downright helpful. It's almost as if I've given them permission to practice medicine the old-fashioned way.

Too often, I think we forget that many doctors are, by nature, people-pleasers -- which is probably what drew them into one of the helping professions to begin with. And I think many of them feel that a patient expects them to do something, even when the best course of action would be to do nothing -- no expensive prescription or fancy test needed. Just a little time!

High Premiums? Don't rush to drop coverage!

Tue, 12 Jan 2010 19:39:20 +0100

Health insurance rate increases happen - no big news there. And sometimes, they're either just too big to swallow or they're the proverbial straw that broke the camel's back. But it really concerns me when I have a client who lets their policy lapse without ever having contacted me and who doesn't reply to my calls or emails.

There are almost always alternatives to just dropping health insurance coverage altogether. Even if you're healthy and "never" go to the doctor, going without coverage is just too risky. Broken bones and appendicitis can happen to anyone at any time, and they're way more expensive than you would think!

Moving to a higher deductible, a slightly less benefit-rich plan, or shifting to an HSA-qualified plan are all ways to decrease those monthly premiums while still protecting against the big things. And getting medical services at the lower, PPO-negotiated rate is always a big plus of having health insurance.

If your premiums become too big to handle, let a qualified health insurance agent have a "go" at saving you money. That's our job!