Will Health Insurers Be Part Of The Solution?

With a health care reform bill already passed by the House earlier this month, and with the Senate giving the green light to debate its own very different proposal after Thanksgiving, it looks like legislation might yet be passed after all. The question is, what will its final form be, and what impact will it have on the insurance industry and consumers?

In football vernacular, I wish we knew whether it's the second, third or fourth quarter of this political Super Bowl! The Senate's quarterback–Majority Leader Harry Reid–is acting like he's in the fourth quarter with the ball and two minutes left to score, but we may yet have a long way to go before we finish playing.

Politics is not a spectator sport. We can be players in this epic game.

I personally have been selling health insurance for over 30 years now. The most dreaded message I've had to deliver numerous times was: "I'm sorry, but because of your previous health history, this insurance carrier has denied your coverage."

Complete denial was just one option. Insurance carriers would also charge additional premium for preexisting conditions. They could also refuse coverage on the preexisting condition for one or two years after the inception of the policy.

Affordability has also been a problem. With double-digit increases in health premiums, over the last 10 years many middle-income families simply cannot afford to pay these premiums.

Small employers have discontinued their plans or require employees to pay more. Even families that may have modest coverage might not have enough to cover their costs–thus high medical bills have caused many to file bankruptcy.

Don't get me wrong. I am proud to be a part of not only the health insurance arena, but the insurance industry in general. Insurance enables our society to build, grow and conserve with immeasurable confidence and prosperity.

Through research and development, this industry has financed many innovative projects and technologies that have improved the lives and lifestyles of all Americans.

As far as government intervention is concerned, personally I am for less government imposition whenever possible. Historically, the government intervenes where it feels we, the people, have failed (or may fail) at consumer protection or human rights.

Maybe we, the insurance community, should be more proactive in research and development–especially concerning topics that could invite government encroachment, such as health insurance.

A proactive approach would be an effective public relations tool for the insurance industry. Currently, we are in a reactive mode, mostly on the defensive, trying to kill off the "public option" while facing the possibility of competing with the federal government.

I see the national health care reform debate as an opportunity to advance our society. A healthier America will be the result. More Americans will have access to much needed preventive care and medicine, which should lessen the dollars spent for more expensive care in the long run.

Politics aside, I feel health care should be available for all U.S. citizens. We have here in the United States the best medical facilities in the world. Let's not deny our U.S. citizens reasonable access to these facilities. Our citizens should also not face "financial ruin" because they need medical attention.

Public option or not, let's not lose sight that any plan must include the following basic features. Care and coverage must be:

o Affordable.

o Accessible for all U.S. citizens.

o Available to all, despite preexisting conditions.

o Gender neutral.

o Part of a plan to control escalating health care costs

While there are many differences between the House and Senate bills, both set minimum standards for policies that would be offered in the new insurance exchanges proposed, where small businesses and individuals without employer-sponsored insurance could shop for policies.

A government-run health plan–referred to as a public option–is in both the House and Senate bills. The Senate bill would allow states to opt out from offering the federal health plan. If the Senate bill passes, this will surely shift the health care reform debate to each individual state.

Both the House and Senate plans will require most people to obtain health insurance. Both plans will penalize those by tax or fee who are non-compliant–with a wide disparity between the two, dollar-wise, right now.

As far as "employer mandates" are concerned, the House version does require employers with payrolls over $500,000 to provide health insurance for workers or face being fined up to 8 percent of payroll.

The Senate bill has no employer mandates, per se, but if any employees of firms with 50 or more workers obtain federally subsidized coverage on the exchange, their employer will be subject to a fine up to $3,000 per worker to help cover the costs to taxpayers.

The biggest difference between the two bills is in how they are financed. Basically, the House bill would impose a 5.4 percent surtax on individuals earning more than $500,000 a year and couples making more than $1 million. It also raises money by imposing a 2.5 percent excise tax on medical devices, by ending some tax breaks for multinational companies and by closing a biofuels tax loophole for paper companies.

The Senate bill's financing includes a 40 percent excise tax on high-cost health insurance plans. It also raises payroll taxes for Medicare to 1.95 percent from the current 1.45 percent for individuals earning $200,000 or more, and for couples earning $250,000 or above.

The Senate bill includes special fees on insurers, drug companies and medical device makers, and it imposes a 5 percent tax on elective cosmetic surgery.

Now, how do we reconcile these bills?

I am totally confident our bright minds, collectively, can make this work for the greater good. Let's get it done.

I encourage all of you to contact your local congressional representative and tell them how you feel. This is not the time to sit back and watch the debate on television. It is time to speak up, and loud, to help shape this historic legislation.

Whatever the final outcome, I am sure we all will endure.

Jerald L. Tillman, LUTCF, is founder of the National African American Insurance Association (www.NAAIA.org), as well as principal of the JL Tillman Insurance Agency in Cincinnati, Ohio. He may be reached at tillman_jeraldins@fuse.net.