Tuesday, April 20, 2010


When all of the health care legislation was going on. The one thing I said was, "How does this make sense, I currently pay over $4000 per year for health insurance, but If I opt not to buy under the new reform package, I will get a fine of around $900." Now especially if I can get guarantee issue health insurance. Why should I buy it when I am healthy, if I can get it when I am sick, and pay the same amount. Well I got some information about how things have been working in Massachusetts, who have a similar program. Please see the link below, and I thank the National Center for policy analysis for thier column. It was written by Merrill Mathews.

The key to ObamaCare is the individual mandate, which requires individuals to have health insurance or pay a fine. The mandate is supposed to push nearly everyone into the pool to minimize free-riding on the system. But what if millions of Americans decide it's a better deal to pay the fine and remain uninsured until they need coverage? It appears that's exactly what's happening in Massachusetts, which passed its own ObamaCare-like reform with an individual mandate in 2006, says Merrill Matthews, executive director of the Council for Affordable Health Insurance and a resident scholar with the Institute for Policy Innovation.

Last year, Charles Baker, former CEO of Harvard Pilgrim Health Care, one of Massachusetts's largest health plans, noticed some health insurance brokers posting comments on his widely read blog. They were suspicious that people were applying for health coverage after a medical condition developed, got the care they needed, and then dropped the coverage.

Coverage for an individual, noted Baker, now a Republican candidate for governor, might be $2,000 to $3,000 a year, while the penalty was only about $900. So he asked his finance people to see if they noticed any discernible patterns. What did the find?

From April 2008 to March 2009, 40 percent of the individuals who applied to Harvard Pilgrim stayed covered for less than five months; yet claims were averaging about $2,400 a month, about six times what one would expect.
Blue Cross and Blue Shield of Massachusetts has now confirmed it is experiencing similar problems; the company says that in 2009, 936 people signed up for three months or less and ran up claims of more than $1,000.
The disparity between the cost of expensive coverage and the fine for not getting it encourages individuals buying their own coverage -- i.e., those not in an employer plan -- to game the system by paying the fine and remaining uninsured until they need coverage, says Matthews.

Insurers have long recognized this problem, known as "adverse selection," which is why every type of insurance normally restricts people from obtaining coverage after an incident has occurred. Someone can't, for example, buy a homeowners policy for a house that is already on fire. But Democrats have decided to do away with that basic actuarial principle with regard to health insurance, says Matthews.

Source: Merrill Matthews, "Gaming The Health Insurance Mandate," Investor's Business Daily, April 19, 2010.

It basically states what I said all along, all though worse. Because now people not only buy it when they need something, they cancel it after they have the surgery.

The system makes no sense. I wish our elected officials would not only read the bills that come through, really study them and think about what MIGHT HAPPEN, if you do not think it through.

If you want to fix the bill we do not need 2700 pages. We need about one sentence. When the HIPPA law was passed 14 years ago. It stated that if you went from one group plan to another group plan, the pre-existing condition clause was waived, because you had creditable coverage. They did not put that in if you went from a group plan to an individual plan or individual plan to individual plan, That is the only fix that was needed. Extend it to INDIVIDUAL HEALTH PLANS. One sentence that everyone understands.


Eric Wilson is an insurance broker in Chicago. He services Illinois, Wisconsin, Ohio and Indiana. He can be reached toll free at 888-448-5370 or online at www.isellhealth.net

Monday, April 12, 2010

The effects of Health Care Reform have begun!!

During the reform "campaigning" I kept hearing how, health care reform will make buying health insurance more affordable because they were trying to create more competition. Now, I do not know how many insurance carriers there are. I do know that I represent about 16. Some like Medical Mutual, write only in Ohio, and Consumers Life, is their sister company in Indiana and Pennsylvania. Either way, there were enough companies to have competition.

We are starting to see the NEGATIVE affect. In the last two weeks, Insurance Resouce Group, National States, and the big one of American Community, have stopped taking applictions. They will not be able to survive in a "guarantee issue environment". The law is not even in effect yet, and we are starting to see what will happen.

My belief is when it is said and done, most insurance companies cannot survive under the requirements of the health care reform bill. In four years, when the bulk of this goes in place, you will see a lot of carriers go out of business. I think in ten years, there will only be government run health care.

If you have followed my blogs, you know I am totally opposed to the government running anything, it destroys the capitalist society.

Stay tuned to see how it ends up.

I hope, we get this right!!

Eric Wilson is a health insurance broker in Chicago. He writes in in Illinois, Wisconsin, Indiana, and Ohio.

He can be reached toll free at 888-448-5370 or online at www.isellhealth.net.

Thanks for reading.