Thursday, August 6, 2009

health care solutions #3

The next compartment or part of the solution to bring down the cost of the health insurance premium deals with the insurance companies themselves. The insurance companies aren't the whole problem. They are a part of the solution.

This is not to say that I don't have some issues with the insurance companies. Premiums are very high and only getting worse. Many health insurance companies play the game of "deny and delay" with your insurance benefits. In my state of Arizona, last year alone, almost 50% of claims denied, which the department of insurance got involved in, were eventually overturned in favor of the insured.

Insurance companies do this to protect themselves from fraudulent insurance claims. Insurance fraud cost us billions of dollars each year. We all pay for this in our insurance premiums to the tune of several hundreds of dollars each year. We must do a better job curtailing fraud. I personally think fraud will only get worse in a government run plan.

Next, we need competition among insurers. In many states we only have a handful of companies competing for our business. We don't want to give insurance companies a monopoly. Competition is good for the consumer and it keeps the prices down and customer service up.

We need to have interstate competition. We have this for almost all other products and services which we purchase. Why not our health insurance? National center for Policy Analysis June 21, 2006 | Author: Devon Herrick. "Lack of Competition Drives Expensive Mandates. Since each state insurance market is protected from interstate competition, legislators can require insurers to cover services that drive up premiums. For example, about one-fourth of states mandate benefit packages that cover acupuncture and marriage counseling. More than half require coverage for social workers and 60 percent for contraceptives. Seven states require coverage for hairpieces and nine, hearing aids."

"When states force insurers to cover providers or benefits that consumers do not want (enough to pay for), both the insurer and the consumer lose. Consumers lose because they are required to pay for amenities they do not want. Insurers lose because mandated benefits and over-zealous insurance regulations drive up the cost and reduce the sales of insurance products."

We also need to fix the problem of portability. COBRA is not the answer. Those premiums are often outrageous in price and it is only a temporary stop gap. I'd like to see people own their own individual insurance policy. A policy that stays with you and goes wherever you go. If you lose your job, become self employed or whatever, you still have your existing policy. It also helps solve the problem of having a pre-existing condition. Because you keep your coverage and you keep your medical providers.

Tax incentives are available to employees whose employer provides insurance benefits. Tax incentives should be made available to all.

Government mandates add a large cost to our health insurance premiums. There should be a federal arm of the government to regulate the health insurance industry. By opening up the competition beyond state lines we won't need a separate agency in each state regulating. Rather each state have a branch to enforce rules for insurance transactions taking place in each given state.

Reduce the government mandates and allow the insurance companies to offer choices with the kinds of benefits that today's consumers want. This allows consumers to better control their premiums because they simply purchae the benefits important to them.

I'll have more on solutions in my next blog.

These are my opinions, I'd like to hear yours.

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