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Jim Lentini: An examination of health care changes and costs

Business commentary

Posted: August 30, 2010 10:52 p.m.
Updated: August 31, 2010 4:55 a.m.

Brokers and agents are receiving change notices from major carriers outlining how we conduct business under the new federal health care law orders which began June 1.

This is creating a tremendous amount of work for insurance companies, agents and consumers.

Of course, when the government becomes involved in an area that affects nearly everyone who must pay for health insurance, costs will increase for those who have to provide the coverage, and therefore for those who have to pay for it.

According to the latest report from Blue Cross, which is one of the major health carriers in California, health insurance companies must remove lifetime and annual dollar limits on covered services (in network and out of network) that the U.S. Department of Health and Human Services considers “essential health benefits.”

The change in the lifetime benefits cap takes effect Sept. 23, although certain annual limits can be removed in phases over the next four years.

The change is only one part of the report dated Aug. 20 and sent to all agents regarding the changes that must be implemented at the six-month anniversary of when the president signed the new law into effect March 23.

A report in The Signal (“State advances bill for health insurance”) dated Aug. 21 stated, “The state Assembly approved legislation Friday that will begin the process of establishing a health insurance exchange in California, one in a series of steps the Legislature is considering to enact changes prescribed by federal health care reforms. The exchange would allow people to compare insurance plans and buy coverage through a consumer friendly website.”

Also reported was the debate over the cost to set up the plan: “It was passed on a nearly party-line 44-22 vote and returns to the Senate for consideration of Assembly amendments.” The article stated, “Republicans objected to SB 900, saying the state should not be expanding government when it has a $19 billion budget deficit. “

Assemblyman Bill Monning (D-Santa Cruz) disagreed with his Republican colleagues. He stated, “The establishment of the exchange puts no onus, no obligation on the general fund. This positions California to draw down federal dollars.”
I fail to see the logic to Monning’s position. Whether it costs state dollars or federal dollars, we the taxpayers who pay both state and federal taxes, pay the bill.

Reports from economists and insurance experts who have read the new health care bill passed by Congress, including the chief actuary of Medicare, state the costs will continue to increase in all areas — government and companies who provide coverage. And, of course, for the taxpayer.

The chief actuary of Medicare in his report published in June stated that, of the approximately 32 million uninsured today, there will still be 23 million uninsured by 2019, even with the new law governing health care.

As for the “consumer friendly” online system of buying health insurance, as proposed in SB900, this could pose a complex task for consumers trying to sort through and select numerous health plan options, both new and existing, as well as managing annual changes for individual and group coverage.

Please advise your representatives of your feelings as you start to experience the changes and costs of the new health care plan. Remember, you the taxpayer must pay the bill, both for your health care and your taxes to the state and federal government. It’s your money!

Jim Lentini, CLU, ChFC, IAR is president of Lentini Insurance & Investments, Inc. His column reflects his own views and not necessarily those of The Signal.


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