Overview:
The Obamacare insurance regulations were structured so that the US federal government would assume complete control of how a health care insurance company is structured and the terms by which the company can provide services to customers. The regulations include specific mandates of what must be covered and how much money can be deployed in to each treatment. Failure to comply would result in the company’s exclusion from the “exchanges”
- No denials: Insurance can’t deny coverage to anybody, regardless of pre-existing conditions.
- Price: Rates can only be based on:
- Age – Companies may not charge the oldest customers greater than 3 times the rate of the youngest with the same coverage plan.
- Geography
- Smoking
- Individual vs. family plan
- Insurance plan regulations:
- The Exchanges: There will be a minimum requirement of services that are to be provided to customers by insurance companies. If they are not provided the insurance company will not be allowed in the “Exchange”. The exchange is the only place where a US citizen will be able to buy a new health insurance plan.
- Minimum required services:
- Ambulatory services
- Emergency services
- Hospitalizations
- Maternity and newborn
- Mental health
- Substance abuse treatment
- Prescription druges
- Rehab services
- Laboratory services
- Preventive service
- Wellness services
- Chronic disease management
- Pediatrics
- Dental and vision for children
- Anything else special interest lobby’s may desire.
- No lifetime caps – Insurance companies can’t put a cap on total benefits received. This will be the job of the federally run death panel, otherwise known as the Independent Payment Advisory Board.
- Deductible – No insurance company on the exchange can charge more than $2000 for a deductible.
- Insurance company structure: 85% of premiums must be paid out in the form of benefits. Any amount under this number will be refunded to the customers.
Arguments
No denials and price controls
Arguements In favor:
People have been denied coverage due to pre-existing health conditions. They are also forced to pay higher premiums if they have medical conditions.
Arguements Against:
Anybody that makes this argument does not know how insurance works. Imagine a 40 yo driver of a Volvo with a clean record. Should he pay the same as an 18 yo driving a Ferrari with a record including reckless driving charges and a DUI? If Obamacare was applied to auto insurance then the answer is yes. Is it fair to charge somebody that treats themself well the same for health insurance as somebody tears down their body? According to Obama, the answer is yes. He does not care what you think, because his opinion is now law.
Another provision that is fatal to the insurance industry is the idea that you can’t deny insurance for pre-existing conditions. The tax is less expensive than the policy. If somebody is healthy, what is the motivation to pay more money. They will wait until they are sick. How long do you thing an auto insurance company would last if people waited until the car was wrecked to buy insurance at the rate of anybody else. It would not.
Minimum required services
Arguements In favor:
There are basic necessities in health care. Services that are important should be mandated by the government.
Arguements Against:
This was already one of the largest drivers of health care costs at the state level. Lobbies were lining the pockets of state politicians to require services to be covered. Men had to pay for 48 hours of inpatient post-partum care in Massachusetts. By 1994, there was mandated coverage for chiropractors in 45 states. http://www.chirobase.org/05RB/AHCPR/06.html. Overall, there are over 1800 mandates in this country. The mandates have nothing to do with medical necessity. All were put in to place by lobbies. The purpose of this law is to make sure all services and products provided send somebody with an open wallet and on their knee’s to Washington. Every time a service is mandated. The price of insurance goes up for everybody.
Maximum deductible
Arguments In Favor:
Placing a maximum rate will make insurance more affordable and keep the company from gouging the customer.
Arguments Against:
The maximum will wipe out health savings accounts. Health savings accounts allow people to put money aside for medical costs. They pay a lower insurance premium because they have a high deductible. Fewer people abuse the medical system, because they have to pay for minor services. Market forces are finally introduced into the medical system because there is a direct interaction between the customer and the provider. This drives down costs (example: every free industry since the beginning of civilization).
Obama wants to take away the ability to choose to pay lower premiums and control how somebody manage their own health care dollars. This is not an isolated example of the democrat’s war on free choice. They have destroyed vouchers for schools, health savings accounts, Medicare plus, and privatizing social security. If the individual is making the decision for themselves instead of a bureaucrat it drives them mad.
Insurance company structure
Argument in favor:
Insurance companies make too much money off of sick people. They should be held accountable for how much money goes back to pay for services.
Argument against:
This law was created by somebody that has no clue what goes into running a business. Insurance companies have one of the lowest profit margins in the business world at 3.3% (rank#86). It is well behind such industries as Waste management (5.6% rank #55), publishing periodicals (5.2% rank 59) and metal fabrication (4.8% rank 63). Any claim that premiums are going towards profit margins is nothing more than a liberal’s dream. Where will the money come from to comply with the new law for an industry that is so streamlined to stay viable? That question was not answered by the politicians. The likely result will be the eventual death of the insurance industry.