Health Insurance That Works

When Congress was debating health-care reform, prior to passage of The Patient Protection and Affordable Care Act, there were what I considered inflated examples of individuals denied insurance, and claims not paid by insurers. These examples ignored the fact that historically insurers have paid 99.5% of all claims.

In many states, group plans, which are defined as employer-sponsored plans with two or more employees, offer guaranteed insurance coverage with no waiting period for preexisting conditions. Individuals with complicated medical histories can also obtain coverage, but at rates which are higher, in order to cover the risk.

One of unintended consequences of the new law, however, is that many carriers will withdraw coverage for individuals, as has already happened in Florida. Because the law permits anybody to get insurance at any time, companies fear that people, especially parents of children, will wait until they are sick and then seek coverage. This places the companies in danger of facing highly unpredictable costs, which there is no way to control.

As a financial consultant who sells and advises business owners and individuals about life and health insurance, I would like to share with you a real-life experience. I was referred to a young hairdresser who owned her own shop and employed two additional people. She was six months pregnant with her fourth child, and was estranged from the father of this baby. Her other three children were covered by her ex-husband. She had no health insurance.

Since she had a business and employees, we were able to establish a small group plan, which insured herimmediately. Her premium was $300 a month. Two months later, complications occurred, and the baby was delivered early by cesarean section. (All her previous prior pregnancies were normal, and this pregnancy was as well, up until this point.)

Since the new baby girl was premature, it was necessary for her to remain in the hospital for over a month. Today, mom and daughter are healthy and doing well. Our client is back at work with the comfort of knowing her medical bills, in excess of $20,000, have been fully paid, no hassles, no questions asked. That’s what good insurance companies do: protect individuals and families at the time an unexpected life event occurs.

The new regulations are the wrong prescription for what ails health care. Free markets and less regulation, not more, is what is needed.