Blue Cross/Blue Shield recently announced a significant price increase for individual health insurance plans, and it may be the start of something else. Clemon-Maki Insurance agent Jeff Maki expressed concern.
“When the cost of health care goes up, that affects the cost of health insurance,” Maki said. “Claims go in and money comes out.”
There are a number of possibilities for the increase in prices, but no one knows for sure. Maki believes prices went up either because more people are consuming health care or because health care costs went up. There already have been major changes announced this year, and Maki does not know what next year will bring.
“One thing that we do not know is what 2014 will look like, as far as what those individual premiums will look like,” Maki said. “As an agent, I don’t know what role I will have in 2014. We don’t know where this is going. Right now, it will be the end of health insurance that we know of today. It will probably impact 100,000 plus agents around the country.”
The health care law will require insurance agents to become navigators. All the details are not available, but from what Maki has seen it has him worried. Currently, he is required to be licensed by the state and have error and omission insurance, but in 2014 he will not be required to be licensed by the state. Insurance agent salaries will no longer be commission based.
“We don’t know what a navigator is going to look like,” Maki said. “It’s a new term in this health care law. Basically it looks like it’s going to be an 800 number combined with a website that’s going to be a combination of a federal and state mold. A lot of other states have set it up in different ways. Its got to meet some federal criteria.”
In 2014, younger males will have to pay more for health insurance.
“What is going to happen in the new health care law is insurance providers will be banned from discriminating from gender and age. Younger males will be paying more this time next year. Younger females will pay less. They also regulated it so they do a three to one ration versus a five to one ratio.”
A higher range means a significant increased cost. If an individual in that is in their 20s pays $80 a month and an older individual pays $880 per month, the 20-year-old could now be paying $250 a month.
“The averages are going to be much higher,” Maki said. “Everyone I talk to said it is going to be great — people are going to be required to buy insurance. I tell them, ‘You don’t understand. I may face a very limited role.”
A typical government bill is one to three pages, and the health care bill is 2,409 pages. The bill proposed changes in mandates for preventive care and maternity care.
“This whole bill, I have yet to see anything part of it that is gong to reduce the cost of the health care received,” Maki said. “In the state of Iowa, we have a high senior population. If they (hospitals) accept medicare funding they have to treat everything. They are taking federal dollars. For every patient that a doctor sees, that doctor losses money.”
Maki added that it is not the fault of Medicare patients for the lack of funding that hospitals receive.
“Those facilities have no choice,” Maki said. “They lose money for every 65 or older person they see. Where are they going to make up that lost ground at? They will make it up with the people who are under 65, or have private insurance or people who pay cash only. It gets spun around. That is why over the last several years you have seen the drastic increase in health insurance in Iowa. Iowa is one of the lowest reimbursed states in the union for Medicare. It is ironic that the way Medicare reimburses states has nothing to do with senior population.”
Insurance companies negotiate health care cost with hospitals. Medicare does not negotiate. Maki said the reason health insurance rose is because hospitals have to make up the loss with clients who have insurance.
Maki believes another cause for rising prices is society being pill friendly.
“People want a quick fix,” Maki said. “People don’t realize the true cost of health care. When people get insurance it is not like going to a grocery store. We don’t consume like that. The general population does not know is that their co-pay went up $10. The actual cost of that office call maybe rose $75 to $100.”
Employers have been so flustered with health insurance that some have dropped it entirely. Maki heard of one employer that made employees go through a few lines to demonstrate the cost of health insurance has on the company. The first line the employees received their full pay check. The second line employees paid taxes and benefits. The demonstration was quickly shut down due to legal reasons.
Ultimately, Maki said, some employers may not provide insurance because of the cost by the end of 2014.
“I know of several employers, that I work with, that may tell them (employees) at the end of 2013, ‘You are now going to the exchange,” Maki said. “That will happen. Some people may benefit. Others may not.”
Staff writer Matthew Shepard may be contacted at (641) 792-3121, ext. 425, or at email@example.com.