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  • don5009

Was Health Insurance Reform Needed?

Updated: Aug 28, 2020

Did our health care system need reform? Yes, but the real reforms needed to be done at the medical systems arena. When we remodel our bathroom, we get 3 bids. Do we do this same comparison shopping when facing an expensive medical procedure? For most of us, no. Even if we wanted to, we wouldn’t be able. Medical systems and insurance companies are tight lipped about what rates will be charged for various services with various insurance companies. This secrecracy in part is to help add future negotiations between hospital and medical groups and the insurance plans. In the glory days, no one much cared what the prices were.  The doctors and hospitals charged the rates and no one much complained except once a contract was up and the powers at be once again sat down at the negotiating table. Now that consumers have more teeth in the game with higher deductibles and copays, they are desiring to do more shopping. Also, the government has put the squeeze on insurance companies so they need to be the bad guy and put the squeeze on hospitals and medical groups.  This “squeeze” needed to happen but before it had real impact we threw guarantee issue coverage in the mix. If premiums are unaffordable, the healthy people, especially those without many assets, will go uninsured and only the unhealthy will sacrifice to have the insurance. This will in turn compound the issue.

As a broker, I am asked often, will the Affordable Care Act aka Obamacare help or hurt me? My answer, it could easily go either way.  Will the uninsured sign up in droves like some think will happen now that health insurance is mandatory or you pay a tax? The ones eligible for a tax credit, likely. The ones with dramatically higher incomes? Most of them were insured already and they likely have more asset they would risk losing without insurance, so yes, probably. Those in the middle? I think we will see more of these people go uninsured then currently.  My end conclusion, it’ll be a net wash at least initially until cost of care can be tackled. Will it be tackled? Will there be enough legislators willing to go after the powerful American Medical Association? I will wait to see with anticipation.

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