Published: April 13, 2008 12:43 am            

GENCO: Health insurance is hurtful thing

I attended the Wheatfield Business Association’s Health Insurance Forum on April 4 as both a concerned citizen and someone licensed to sell health insurance.

Health insurance is among the most complex products out there. Nothing is ever simple about it and the only thing certain is that over time, it will continue to get more expensive.

One of the most interesting facts of the evening was that there used to be a law in place that forced insurers to justify rate increases, but it had a sunset provision and has expired. Hence, the insurance companies can raise rates with only the forces of competition available to keep them in check, reported Tom Fusco, an attorney with the State Insurance Department.

While that might seem like a bad thing, understand that requiring pre-approval would merely add a layer to the bureaucracy — utility companies always seem to get their way when they increase rates, even with pre-approval requirements.

The other thing to be very aware of is that as high as our rates are in Western New York, there are some areas of the country (California) where family’s are paying as much as $20,000 or more in premium.

Anyone associated with a small business or self-employed is faced with the same pain, no matter where they are: Health insurance is among the most expensive costs of staying in business. Some manufacturers offering it as a benefit even report getting applicants applying for $10 per hour jobs simply for the benefits.

Health insurance administration also is the single most significant business of most chambers of commerce. It’s not as much about building commerce as it is about grouping businesses for better rates. Thankfully, it also drives some revenue for chambers, supporting their ability to promote meaningful growth.

Recently, high deductible plans and health care savings accounts have become more popular. The way they function is for plan participants, or their employer, to fund a savings account that pays deductibles when treatment is needed.

The difficulty with that plan is twofold: If employers fund the HSA, ask employees to pay the deductible out of pocket and be reimbursed, employees may not seek needed treatment because of the perceive bureaucratic hassle. If employees are asked to fund the HSA out-of-pocket in pre-tax dollars, they may have a tendency not to do so because it’s easier to think a catastrophic loss won’t happen to me. The other element at hand is the that broker servicing a client like the business association has to set up individual HSAs for each employer, which is not only labor intensive but expensive.

Two things that seem to be coming increasingly common as well with high deductible plans are annual and lifetime maximum benefit. It might seem like a lot when you see a plan with a $1 million lifetime maximum benefit, but that can be chewed through quickly by one premature baby, bout with a stubborn cancer or diabetes diagnosis resulting in dialysis.

Unfortunately, as with so many problems of this magnitude, there is no simple solution, especially when our state elected officials provide themselves with such grand coverage that they can only pretend to understand when we point out how painful it is to live here.

I believe we have come to the point where it is time to consider some sort of nationalized health care plan. Lacking a plan, the line between the haves (those who can afford coverage) and have-nots will continue to grow.

If you are interested in helping the Wheatfield Business Association in its lobbying efforts, contact Tom Stevenson at 553-6465. The Business Association is sponsoring a lobbying trip to Albany on May 20 and 21.

LM Boyd of the Week: England’s Birmingham has more miles of canals than Venice.

Word of the Week: Coaming – The molding along the edge of the deck on a ship.

Contact Joe Genco at jgenco@localnet.com.

        

• Click to discuss this story with other readers on our forums.