What is the state of the American insurance industry right now? This is probably the most violent, rough, convoluted and messy situation I have encountered in the insurance business in 26 years. We have health reform on us. There is a lot of fear of change. I don’t think the government developed the best plan here in terms of reforming our health care industry and helping people get affordable care. The Affordable Care Act is kind of a misnomer because I can’t see anything affordable about it right now. It’s really driving costs up. Reality is, I’m seeing rates skyrocket right now and I think this is just the beginning. We’ve got a number of things in the package that are driving costs. The plan now covers pre-existing conditions. In the past, insurers were able to underwrite a medical risk or you could be declined. Now, that isn’t the case. We are going to take one, take all.
In November 2012, Missouri voters passed Proposition E, which gave the state legislature, rather than the governor, power to create a state health exchange under ACA rules. However, the legislature failed to do so and Missouri will now have a federally-run exchange. How will that affect the state? Our legislature, and the majority of the people in the state, did not want Obamacare. I think we are the Show-Me State and they said, “Show me why this is good for us when you are asking us to pay.” A lot of people were worried about losing their own coverage and the fact is, they are being forced to change their own coverage. We don’t even know what we need to do as insurance professionals until sometime in July, when they determine what the rules and qualifications are. I think we are going to see somewhat of a Medicare system in private health insurance, especially in these exchanges with open enrollment starting this October.
What is the open enrollment process going to look like for business owners? Right now, the feds have come out and said there will only be one option available for employers when the enrollment starts. They call it SHOP – the Small Business Health Options Program – and it’s just like the individual, except it is for small employers, those with under 50 employees. They would be able to go in and purchase plans just like an individual.
With the ACA in place, are employers going to see rate changes? We are going to see a lot of rate changes because of the community rating systems. Everybody in a particular area will have the same rate. Right now, age, and maybe smoking status, will be factors. The older population, before they hit Medicare at 65, can’t be charged more than 300 percent of the youngest person in the pool. So, the older people’s premiums may come down a bit, but these young immortal males out here, their premiums are going to go way up. Which brings about talk of the individual mandate. I talk to people all the time who don’t know what the law is, don’t know there is a law or are just going to pay the fine because it’s cheaper. The first year, the fine is $97. For a 27-year-old male, he is looking at $2,000 to $2,500 premiums now. In his eyes, he just pays the $97 fine and moves on. The fine will escalate, to $295 next year, but for the first few years, it will still be cheaper.
How will health insurance companies stay vital with the open exchange? There have been things online for years to get your coverage, but the phone still rings. People want that personal interaction and an adviser, someone who knows the ifs, ands or buts about a particular plan. People want someone to tell them the upside and downside of a plan. I can’t imagine, if I have a problem, calling into the federal government. It’s become so many levels and layers to deal with. The government is hiring what they call navigators, people who are non-bias and will help everyone enroll in the exchange. Insurance agents can sell on the exchanges too. I think anyone who has dealt with a broker sees the value in that.
What do you see as the future of American health care reform? Eventually, this thing is going down. It has too. It’s just not workable. They either need to overhaul the whole program and think about how the market really works, or it will have to go. It’s a mess. It needs to be simpler. It can’t possibly work without the cost going up. I delivered a 35 percent increase to a client just last week and that’s not uncommon. There are no free lunches and there never was. Nothing is free.
There is no doubt America needs some type of health care reform; I just don’t think the ACA is the answer.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
