by Jim Lentini
At the end of 2014, there was an article in The Signal that was a recap of Obamacare, and it discussed comments from local providers and doctors regarding what healthcare under Covered California meant to us locally.
When Obama created this law in March of 2008, he said the insurance companies were making too much money, building big buildings, and it was time for all Americans to have “affordable” health insurance. Most of us who represent the healthcare industry didn’t agree with his evaluation and realized he did not understand the industry he was “changing.” Or he did, and was following his agenda as instructed by those who wanted a different order and control of our economy and services by government. This is proven by the events, costs, and mistakes by those who are implementing the “Affordable Care Act” or ACA.
First, health insurance companies are mandated by federal and state law to make a profit to remain solvent to pay future claims. Health care rates are controlled by the State Insurance Commissioner and require any insurance company that needs to raise rates on a block of business must first prove there is a loss ratio of at least 80 percent or better of premiums collected. That means that an insurance company has to operate on 20 percent gross profit, pay all of its overhead, pay commissions, and make a profit of 3-5 percent required by federal mandate to remain viable and able to meet future claims. This has not changed in 100 years!
To the best of my knowledge, and with 55 years of experience in financial planning and insurance, there is no private company on earth that can function and work for such a minimal gross profit other than the insurance industry, which is overseen by the state and federal government. So, the question is, why would the government want to take over an industry that affects all Americans and is 1/6 of our present economy? Obama’s camp blames insurance companies for the mess, but why has a buddy of Michelle Obama, a Canadian, received the contract for the website that doesn’t work and paid him over 600 million of our taxpayer dollars, when an American group in Silicon Valley said it could be done for 1 million and would work? And, it would be secure!
Since 1993, here in California we have had AB1672 that guarantees anyone who is turned down for health insurance can obtain coverage guaranteed through the MRMIP (Major Risk Medical Insurance Plan) program underwritten by most of the insurance companies licensed to do business in California. Now, today, we see government and leadership not addressing the healthcare issues properly and now admitting to making mistakes, and lying to the American people! Americans who pay for their insurance and pay taxes are assured of increases in premiums and reduction of benefits and tax increases like never before!
And, now Obama is making changes to the law, 14 to date within last 4 months, which may be illegal. The cost of “The Affordable Care Act” is going to be far greater for all Americans whether coverage is provided by an employer’s group or an individual plan. Both employers and individuals will pay more for their coverage and benefits, and services are going to be reduced! So, what is really the meaning of the title, “Affordable Care Act”?
As a certified agent to help guide our agency clients that are required to make changes on their healthcare coverage, I have helped two or three individuals that had medical issues that the subsidy and guarantee issue through Covered California is a benefit for them. But, that is only two out of over 1000 clients, just the tip of the iceberg, and benefits only a few individuals not covered by an employers group. Remember, it wasn’t the tip of the iceberg, but the iceberg under the surface that sank the Titanic.
And now the latest news as of May 2015, we have major medical providers not accepting any insurance plan written under the ACA rules for Healthcare. And, when full implementation of Obamacare was done in 2016, the first thing done was to charge insurance companies 30 percent of their gross profit to cover the added cost of unnecessary more government regulation, reducing gross profit to 14 percent. This resulted in agents receiving 90 percent less commission and working five times more helping insureds to deal with unnecessary and excessive communication and paperwork. Plus, all insureds who are taxpayers and pay for their health insurance are now paying more than 300 percent more and receiving less benefits than before Obamacare. And, providers both doctors and hospitals have more paperwork and receive less benefits. Send a thank you to Obama!
Pray that we get corrected leadership that benefits the American way of life, and those of us who pay for healthcare.
Have a good day!