Busting the Top 10 Health Care Reform Act Myths

By on May 22, 2010 in Facts about Health Care Reform

In the midst of the political debate about reforming the health care system in 2009 and 2010, a number of unfortunate myths were spread about what this reform would actually mean to individuals and their families. Since the bill was actually passed in March 2010, it’s important for people to get a real sense of what it means and what’s going to happen, so that they can prepare themselves for the changes that will occur over the next several years.

Myth: There will be ‘death panels’ deciding who deserves care and who instead be subjected to euthanasia.

Fact: This was never in the bill, and was never intended to be added to the bill. At one point there was a provision designed to compensate doctors for time spent discussing end-of-life care with those patients who wished to have the discussion. In fact, these kinds of discussions between a patient and their doctor are designed to make the patient’s wishes clear when it comes to whether they’ll be put on a ventilator or given a feeding tube. The hope is that people who are nearing the end of their lives will have the security of knowing that their wishes will be respected, no matter what their wishes are. This provision ultimately had to be removed from the bill to avoid the political arguments about ‘death panels’.

Myth: Health care is being nationalized.

Fact: While the possibility of a single-payer system was in discussion for some time, it was rejected early in the process. Instead, the bill maintains the current system of health insurance and adds as an option state-run health insurance exchanges through which individuals and small businesses will be able to purchase health insurance coverage.

Myth: Any government involvement with health care will automatically make it into a disaster.

Fact: The government has been running Medicaid and Medicare, along with care through the Veteran’s Administration, for years, and many of the same people arguing that the government’s involvement with health care would be disastrous were claiming that one of their reasons for this was the desire to protect Medicare. The people who receive health care through these programs actually have higher than average levels of satisfaction with their coverage.

Myth: Doctors will have their wages dictated to them by the government.

Fact: Currently, doctors practice privately and then decide what they bill to whoever the patient has coverage through. Often, the company then negotiates with the doctor or dictates what they’ll be willing to pay for the services. This will work the same way under the new system.

Myth: You can’t keep your private insurance.

Fact: There is nothing in the health care reform bill that would take away your private insurance. They’re only adding additional options to make sure that health care will be available, affordable, and actually purchased by a larger portion of the population. At one time they did consider the possibility of moving to a single-payer system, but this idea was dropped early in the process.

Myth: The bill cuts Medicare coverage

Fact: This is one is true, partially. While the money going into Medicare is projected to be cut, the target of the cuts is in the area of making the system more efficient. Also, people who fall into the Medicare coverage gap (often referred to as the ‘doughnut hole’) are going to begin receiving tax rebates to help them deal with the otherwise uncovered expenses. In general, Medicare’s financial situation is projected to improve under the recent health care reform.

Myth: There’ll be no choices for the kind of coverage you want.

Fact: You’ll still get to choose your coverage as you do today. If you work for an employer who offers health care benefits, you’ll pick among the plans that they offer to you (or if you don’t like those plans, you can look elsewhere). If you don’t receive health care coverage, you’ll have the option to buy it through the state-run exchanges and you’ll get to choose which of the plans on the exchange you purchase.

Myth: Health care reform is socialized medicine.

Fact: Creating a socialized system of medicine was never the intention of the reform bill, and isn’t one of the things the bill will do. While the reform does take steps to make coverage available to more people who can’t afford it, similar myths that this amounted to socialized medicine were spread during the debate over the creation of the Medicare system (and notably, even the people complaining about the evils of ‘socialized medicine’ have generally not been calling for the complete dismantling of Medicare).

Myth: You’ll pay higher taxes to cover health care reform.

Fact: The only people who are projected to pay higher taxes are those in the highest tax brackets (above $200,000 for individuals, and $250,000 for married couples filing jointly). Eventually, those receiving very expensive health care plans from their employers will also be taxed on that benefit. The vast majority of the country will not be paying any additional taxes.

Myth: Health care reform will cause health care to be rationed.

Fact: It’s already the case that health care is effectively being rationed. Only the extreme minority of the country can currently afford to directly pay for any health care they could possibly need without having to deal with whether their insurance company will give permission for a procedure or trying a particular drug. Many people currently avoid seeking care at all because they have no insurance and can’t pay for the care they need directly. In addition, when people try to use their insurance coverage they’re always in fear that the company will refuse to cover them, or come up with an excuse to cancel their policy entirely. The purpose of the health care reform bill is to address these injustices, and improve the availability of health care to everyone.

The political fight over health care reform may have confused many people about what the final bill would actually do, but now that the smoke is beginning to clear the real information is coming to light. You should do your best to familiarize yourself with the schedule for the parts of the bill to go into effect and exactly what they’ll do so that you’ll have every possible opportunity to make the decisions about health care and your finances that will best serve the well-being of yourself and your family.

Comments { 0 }

Individual Health Insurance vs. Group Health Insurance

By on May 17, 2010 in Individual and Group Health Insurance

A health insurance plan is a legal agreement entered into by an insurance company and an individual or an organization. As per the legal agreement, the insurance company agrees to pay a specified amount of medical expenses arising during the contract period in exchange of a payment termed as premium. The cost covered by the insurance company will purely depend on the premium amount and the type of Health insurance policy that you choose – for individual – or offered – for organization.

Before you decide on the exact type of health insurance plan you need or an organization need, it is always better to know the different coverage in market. It is good to know what you are eligible for and also the various benefits of that health insurance plan offered, which should help you to take the correct insurance plan.

Below is a short illustration to make the distinction between the individual and group health insurance more clearly:

1. Individual Health Insurance. Individual health insurance plans are designed for unemployed or self-employed people who paid premium in exchange for health insurance coverage.

Individual health insurance plans are expensive, because the cost involved in medical expenses is very high, the narrow spread of risk makes the risk factor of the insurance company become higher and the premium payment comes from a single individual. The individual who takes the health insurance also needs to go through certain medical tests (as per the insurance company) in order to get the health insurance plan, but under individual health insurance you can also cover for your spouse or children.

In relation with the high cost of an individual health insurance plan, the insurance company usually let you choose Health insurance plan that you need, so as to adjust with your budget and you can renew it annually as far as you need and you like.

2. Group Health Insurance. Group health insurance plan is designed for large number of people and in majority of cases for companies or organizations. Group health insurance is usually taken by company or organization for their employees as an added advantage for the employee and a benefit given by the employer. Since the premium amount is usually paid by the company or organization, majority of the employed people will have group health insurance plan.

In group health insurance, the insurance company covers everybody under the group and this effect in the larger span of risk which makes the risk factor of the insurance company become lower. As the insurance covered a lot of who are assumed to have the same level of risk, then no pre medical test is required for group health insurance. The previous condition plus higher receiving from a single source – whereas they are collecting premium from everybody in group – resulting in lower rate of premium amount, which is make sense for insurance companies as they are covering a large group of people and probably they will end up paying or covering medical expense for a relatively less number of people.

However, in a group health insurance the plan is selected by the company or organization for all the employees and incase you leave the company or organization where you work, you will not be entitled to claim the insurance benefit any longer.

In the end, I would recommend that every individual should have a health insurance plan. You might be in good health or rarely visit a doctor but nobody can predict what is going to happen tomorrow. One illness or even an accident can result in high medical expense which can upset your financial situation. However, just by paying a premium you can be assured that the amount specified by the insurance companies will be paid by them and you can live in peace.

Comments { 0 }

Timeline: How the Health Care Reform Act will Affect You

By on May 14, 2010 in Health Care Reform Act

The new health care reform bill has been passed successfully and is in the process of being implemented. Thanks to the hard work of President Obama, despite attempted opposition the bill finally got through Congress and is on its way to making American lives better! For those of you who are curious about whether this healthcare reform concerns you at all and if so, how you are going to be affected, here are some of the key points of how the bill will be rolled out.

Within the first year:

The biggest and the immediate reform is the introduction of a nationwide high risk pool for insurance coverage supported by $5 billion of federal money. While 34 states already had insurance pools available for high risk customers, this makes the same option available to the remainder of the country beginning 90 days after the passage of the bill. Under this setup, people not covered under any health insurance scheme for the past six months who have been refused for other insurance will have the option of purchasing insurance through the high risk pools. Due to the nature of the pools, insurance in this form is more expensive than standard insurance for the same coverage, but this is mitigated somewhat by the backing from federal money.

The reform also abolishes annual limits and lifetime limits set by health insurance companies. This should cure a lot of worry for people who are at risk of contracting diseases like cancer that are very expensive to treat.

Children under the age of 27 will be covered by the health insurance coverage plan of their parents. While this officially takes effect at the beginning of the first plan year following September, so you shouldn’t cancel separate coverage from your child’s school or private insurance just yet, some insurance companies have pledged to begin making this available immediately.

Next year:

Those on Medicare who fall into the coverage gap (often called the ‘Medicare doughnut hole’) will get rebates to help them meet their expenses. Medicare will also begin making wellness checks and illness prevention plans available to the people it covers with no out-of-pocket fees. This should be a great boon to older people who have to meet their expenses on fixed incomes.

In 2014:

In the year 2014, everyone will be required to have health insurance or they’ll be hit with additional taxes. The tax penalty is based on income, and will begin at 1% the first year and rise after that, with a maximum cap of $750. Families not covered by any health insurance scheme might have to pay up to $2500 as IRS penalty. However, for those who choose to buy insurance, subsidies will be available to help ensure that it remains affordable to as much of the population as possible.

Companies with more than 50 employees should provide health insurance coverage for their employees, failing which they will be fined $2500 per employee and this fine is exempt for the first 30 employees.

Insurance companies can no longer deny insurance coverage to people just because they have pre-existing medical conditions. This will allow the people using the state high risk pools to move into regular insurance pools. As a result, the high risk pools will either be closed down or will be made into part of the regular insurance exchanges that the states will run. Annual limits for benefits will also go out of existence.

Insurance companies with a net premium of over $25 million as income per year will be levied an annual health insurance provider fee.

In 2018:

The health care reform also imposes an excise tax on high cost plans provided by employers. For costs more than $27,500 per family and $10,200 per person will fall under this category. Retirees and people who work in high risk environments would be affected even more, as the tax could be as high as $30,000 for families and $11,800 dollars for individuals.

While the health care reform bill is too large to cover in one reading, these are some of the important aspects of which you should be aware so that you can make the best decisions for yourself and your loved ones.

Comments { 0 }

What differentiates individual from group health insurance?

By on May 11, 2010 in Individual and Group Health Insurance

In our everyday lives, we must make many important decisions, but there are few as important as deciding what kind of medical insurance to get. We all want to know that we will have the resources we need available to us when we require them, and so we’re confronted with some challenging questions when it comes to deciding what kind of individual health insurance to seek. One such question is whether to choose individual or group health insurance. If you don’t know all of the facts, this can be a serious roadblock for you. This article will help you to better understand the similarities and differences between these two very unique types of insurance.

To begin, let’s explore what these types of insurance are. Individual health insurance consists of coverage bought by a single individual for him- or herself and/or that person’s family. The name can be misleading, as individual health coverage can actually cover more than just a single person. Group health insurance is the kind of insurance designed to be offered by an employer to an employee. These plans can be bought by individuals, or they can be set up by a company for its employers, or sometimes both. The law mandates what kinds of benefits must be included in group policies, and health insurance coverage is therefore often more extensive than the kind you are likely to get from an individual policy. A couple of examples of this extensive coverage are maternity coverage and treatment for substance abuse: just a couple of perks you’re less apt to receive should you choose to buy an individual medical insurance policy. Extra coverage like this is sometimes referred to as “optional rider.”

One of the primary concerns when buying any insurance policy is cost, and it’s important to take this into account when making considerations. In general, the cost of an individual policy will be more than that of a group policy, and the benefits you get for your money will be fewer. Furthermore, you will probably be required to pay out a higher deductible for individual medical insurance than you will for group insurance, and cost-sharing (the fees paid to medical caregivers for their services) are usually higher, too. This can be a deciding factor for many people weighing the pros and cons of medical insurance policies.

Another advantage of a group insurance policy is that companies cannot refuse to cover people who suffer from pre-existing conditions in the way that individual insurers can. You cannot be turned down if you have a disability or a serious ailment. With an individual policy, applicants will frequently be denied coverage on the grounds that they are “uninsurable” due to pre-existing conditions: something else to keep in mind when deciding what kind of insurance to get.

One of the drawbacks of a group plan is that your insurance package may include features that you will never have occasion to use. This may make the group plan impractical for younger or healthier people who are less likely to require as frequent or as intensive medical attention. Such people might then be interested in purchasing a less costly individual plan.

Comments { 0 }

The Health Reform Act and When you Need to Buy Health Insurance to Avoid Penalties

By on May 9, 2010 in Health Care Penalty

During December of 2009, the United States Senate passed the Health Care reform act, which was later adopted by the House of Representatives. This bill represents monumental changes in the American health care system, both for consumers of health care, as well as employers and health care providers. Among other things, the bill requires health care policies to be approved by the government, and provides monetary penalties for citizens not covered by approved health care policies. The reason for such penalties, as described in the health care bill, is that by allowing citizens to go uninsured they become significantly less likely to seek preventative care for conditions they may experience. This translates into increased costs for the health care system as a whole, and indirectly to the taxpayers.

Wait a minute – you may be asking yourself, what does this mean for me? To begin with, rest assured that if you are currently covered by health insurance, you will be unaffected by this change: all existing health care plans will be grandfathered in by the bill and designated as approved policies. Furthermore, if you are currently uninsured, the government will not penalize you until the bill comes fully into effect in 2014. Even then, the legislation provides exceptions for those who cannot afford individual health insurance, object for religious reasons, are incarcerated, or citizens who do not currently reside in the United States.

The penalties thereafter will begin at $95 for uninsured persons in 2014, increase to $325 in 2015, and $695 in 2016. Under the House’s amendments to the bill, the final amount of the penalty is $695 each year for each person for whom the taxpayer is liable. This can accrue up to either $2250 (three uninsured individuals) or 2.5% of the taxpayer’s household income, whichever is greater. Some of the bill’s proponents feel that this figure is too lenient, as it allows taxpayers to simply pay the penalty until they require a medical procedure. They can then purchase insurance which would normally be more expensive, especially if the health insurance were not provided by an employer. This type of “adverse selection” could potentially be detrimental to the social health care system, though it is possible that a future amendment may increase the penalties for uninsured persons to prevent this.

By and large, effects of the bill will not be felt until 2014, though some regulatory acts will come into effect sooner, including regulations on health care plans renewing after September 23, 2010, requiring greater transparency in any existing health care plans, as well as the creation of a federal high-risk pool that will begin this summer.

The bill represents an unprecedented change in the United States government’s stance on health care. The goals of the Act are certainly very ambitious, and time will tell whether it achieves its goals. Though the Act may be changed by future amendments, and even challenged legally on constitutional grounds, it is imperative that taxpayers, insurers, and employers alike understand the bill and its implications, since they will have a profound and lasting impact in the landscape of America’s health care.

Comments { 0 }