Simple Changes, Big Benefits

There are certain simple law changes that could greatly improve the Health Insurance market in California and other states. Health insurance is a multiple discipline industry, including underwriting, finance at the consumer level, and finance at the State and Federal level. In the next few blogs, I will make suggestions that would make the free market more competitive, create access to all people regardless of pre-existing conditions, and make health insurance easier to maintain through one’s lifetime.

The first subject to address is those points in time, when due to current law and contracts certain people could lose their insurance because of a technicality or circumstance beyond their control. For instance: Why does someone’s dependent need to come off their insurance at some random age like 18 if they are not students or 23 if they are? I have communicated with the insurers about this stipulation, and they cannot tell me why it is there. The young and healthy dependents are good risk for them. A parent should be able to keep their child on their family health plan as long as they pay the premium with no limit.

Another point of contention is when a person with an individual policy gains employment and group insurance from a company. The insured gives up his individual policy to take on the group insurance. If the employee is laid-off or loses the job for some reason he has the option of COBRA which can cost twice as much as the individual plan they gave up to get on the group plan. In many cases the laid-off employee cannot afford the COBRA. If a person gives up their individual plan to take a group plan and then loses his job, the group insurance company should have to offer that individual an individual plan that is issued at the same underwriting rate as his previous individual plan when he took the job. I would recommend a basic plan defined by the State with a low cost (not loaded with expensive mandates). The insurer is already on the hook for the individual but this gives the laid-off worker an option to take a lower cost individual plan instead of the expensive group coverage. I will talk about the low-cost plan (Cal Basic) in another blog.

The Health Insurance Guy