Precept Employee Benefits Blog

I agree that our health care system needs reform. I believe that everyone should be able to buy insurance, and that they shouldn’t have to take out a loan to do it. However, Congress, while stating they are acting in the best interest of our country, is saddling true reform with special interest. Do we really need a 2,000+ page bill to reform health care? No. Instead, reform needs a KISS – Keep It Simple Senators! What if we put a 5 page cap on the bill, and just focus on the real issues:

Access to healthcare. Mandate coverage for everyone (sorry twenty-somethings, you are not invincible). The insurance industry has said for years that if everyone is required to have coverage, then they will drop pre-existing condition clauses. It also alleviates the costs associated with adverse selection. Allow people to purchase individual polices when an employer-sponsored plan is not available.

Drive out costs associated with health care. Many health plans, both employer-sponsored and individual, are loaded with mandated benefits, such as behavioral health, substance abuse, maternity, etc., but does everyone really need these benefits? Not necessarily. Further, it is very expensive, and often cost-prohibitive, to administer a different plan in each state. Reform should address this issue, either by allowing individual purchasers to select a plan from any state (like 529 plans), and/or allow insurers to offer plans that meet federal minimum guidelines (e.g., Medicare A and B). This drives out administrative costs from the carriers, and offers individuals more options from which to select a plan that truly meets their needs, both in terms of benefits and costs.

Affordability. If the pool of insureds increases, adverse selection decreases, which drives down premiums. If the costs of administering the plan decreases, so do premiums (assuming free markets are allowed to work). Further, if people have the option to only purchase what they need, and individual purchasers can deduct their health care premiums, thus receiving the same benefits as employee contributions processed through a Section 125 plan, affordability starts to become a reality.

So in conclusion, let’s keep it simple and focus on feasible solutions to the real issues. The individual market is the best place to start.