Archive for the ‘insurance premium’ Tag

Concerns about the Affordable Care Act   2 comments

Some of the reasons why the Affordable Care Act (ACA) gives me a great deal of concern about it’s potential economic impact:

  • Employers are required to provide coverage if they have 50 or more full-time employees, or face paying taxes and fines
  • Individuals are required to carry coverage, or face paying taxes and fines
  • A 5% Affordable Care Act tax to subsidize uninsured individuals
  • Limits employer contribution to flexible spending account to $2500
  • Confusing definitions on who is an employee vs sub-contractor
  • An excise (read: sales) tax will be charged on “Cadillac” health plans starting in 2018

The two really serious kickers to the whole program:

  •  Health insurance companies will be required to spend at least 80% of premiums collected on the provision of care, drastically limiting how much revenue can be used for administrative costs and profit.  This will likely create incentive for companies to reduce overhead expenses, such as customer service and claims-processing employees.

AND THE MOST CONTROVERSIAL POINT OF ALL:  

  • Starting in 2014, health insurers cannot charge higher rates to those who will use more medical services (and thus costing insurers more money)!!  This creates a subsidy situation where customers who don’t use medical services very often will still pay increased premiums to pay for the medical services of those who use them more often.

In other words, forget underwriting, forget being able to charge more for the customers who will cost more.  EVERYONE is going to have to pay more in order to subsidize those who are more expensive to the insurance companies – for example, people who have pre-existing conditions and, usually, women.  I certainly have nothing against women.  But if the reality is that insuring a woman is more expensive that insuring a man, then a comparable plan for a woman should cost more than a man’s.  That, unfortunate though it may be, is how insurance works – if you cost more, you pay more.  This will no longer be the case under the Affordable Care Act.

Not charging more for those with pre-existing conditions would be comparable to an auto insurance company not being allowed to charge more for drivers who have prior claims.  So even though people with pre-existing conditions will cost carriers more money than those without pre-existing conditions, they cannot be charged more.  Top that off with the 80% premiums-for-care requirement, and we are facing a situation where a health insurer cannot hire the most qualified individuals (because they are not allowed to divert the money from revenue for care), cannot provide the best services (by hiring more customer service representatives, adjusters, billing employees, etc), and cannot charge people based on their potential cost to the company.

Dog Blog ACA

The Insurance Dogger is not looking forward to 2014 or the implementation of the ACA….

3 Things I really hate about Insurance   2 comments

I mean, who doesn’t hate insurance, right?  You know what I’m barking about.  All the money paid out, and for what?  Make my agent rich!  Go figure.

This blog is devoted to my top 3 bones to pick (get it, bones?).  What do you mean, my daddy has to pay more for his policy?  That’s less treats, less trips to the doggy park (and less trips to the kennel.  This may not be all bad).  What do you mean, the claim is denied?  Who’s gonna pay for it now…. me??  I think not!

Without further ado:

  • I haven’t had a claim in forever!  I’ve NEVER had a claim, for that matter.  Why does my premium keep going up?  This is one my daddy cries about all the time – he gets this question a lot, and he comes home and has to bend my ear at least once or twice a week about it.  So, believe me, I know ALL about this one.

I’ll keep it simple.  Basically, when my daddy pays his insurance premium, that money goes into a bucket – a big bucket full of money from everyone’s monthly premiums.  Claims are paid out of that same bucket.  So when there are too many claims, or the claims are too expensive, the bucket gets empty.  When the bucket gets empty, then my daddy’s premium goes up a little, even if he hasn’t had a claim.  Those who have had claims pay more, but everyone sees a little bit of an increase:  that’s what insurance is – the spread of risk of a large loss over a large number of people paying premium.  And so, that’s why, some times, premiums go up even if you haven’t had a loss!

  • What am I even paying for here?!  My claim was denied!! This is one that really stresses my daddy out.  There are a lot of reasons that a claim could be denied, and he says that some times there’s a lot to explain.  Insurance can be difficult to understand, but basically, a claim would be denied if the policy does not provide the coverage.  Insurance does not cover everything, and that’s something that more people like my daddy need to help clients to understand.  For example, insurance is not meant to be a warranty – if your car breaks down, the cost of repair would not be covered.  Also, apparently, if the dog chews up his mommy’s glasses (who would do something like that?!), that also wouldn’t be covered.  Another thing to keep in mind is that not every policy is comprehensive, but in most cases, the coverage can be added.  For example, any surface water (overflowing rivers, heavy rains, an above ground pool that bursts [yes, that HAS happened!]) that comes into our house and does damage is NOT covered by homeowners; however, if you purchased flood insurance, it WOULD be.
  • This might as well be written in Chinese.  I don’t understand how insurance works at all! Daddy tells me that I should be more patient with people.  I just don’t get why people don’t want me to jump up and say hello, a few kisses to the face, that sort of thing.   He says that not everyone likes that, and not everyone understands that it’s my love language.  Insurance is kinda like that – it has it’s own language, and most people don’t get it.  What people need is someone who can translate all the mumbo jumbo and make some sense out of everything.  There IS a logic behind it, and all it takes is someone who is patient enough to sit down and explain it all, answer questions, etc.  There ARE answers out there, there ARE translators out there… it just takes some time, effort, and patience to find them and listen to them.

That’s all for me today.  It’s been a busy day, and I’m dog tired (enough already!!).  I hope you have a wonderful evening!

insurance sucks

Who did that?! Not me, that’s for sure…. *shhhhhh!*

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