Just to set the stage, my first “real” job out of college, forty years ago, was for a major insurer, and I wrote group insurance contracts in 17 states. State laws vary, but there hasn’t been a benefit written that I don’t understand. Then I moved on to labor relations (negotiating benefits with labor unions), human resources, and employee relations. All told, I spent 27 years in related fields, so I think I have a handle on this.
Going back to the 1970s, about 27% of the workforce was unionized. Another 33% of the workforce was employed full time in other companies, and the remaining 40% had part time jobs. The employers of part time workers did not then, and do not now provide benefits. The majority of full time non-union employers had to provide benefits similar to their unionized counterparts in order to compete for workers.
One thing many people don’t know is that the unions created virtual monopolies for insurance companies in certain states and regions, depending on the amount of influence they wielded. A case in point: at one point in time, my employer had factories in MD, OH, and WVA, all covered by Blue Cross/Blue Shield. The MD plant paid about $220 per month for “family coverage,” the WVA plant was paying $375, and the Ohio plant was paying $425 – all for the same basic coverage. Well, guess which factory was the first to be sold, and which one was the first to be closed. The thing about BC/BS was that the employees didn’t have to complete claim forms. Just flash your card, see the doctor, and out the door.
The first PC was still about ten or fifteen years in the future, and many of those employees weren’t the most literate, having entered the work force in the 1940s and 1950s. Heck, those were the days when “Joe” would hand his pay check over to the wife, and she’d give him his $5 “allowance” to go to the bar on Friday night. The rest of the week all Joe did was go to church, mow the lawn, fix the car, and eat, sleep, and go to work. What a life that was. He only had to sign his name 52 times a year, when he cashed his pay check. Fifty-three if you count his tax return.
Along around the late 1970’s, a new kind of health insurance plan became popular among employers. It was called, in industry vernacular, a “health care plan.” The old Blue Cross (doctor bills) and Blue Shield (hospital bills) were rolled into one. Blue Shield was a traditional “major medical” plan, where you paid a deductible, and then the balance of your bills were paid at a certain percentage, usually 80%. (BC/BS was known as a “base/major plan”.)
Under the “new-fangled” health care plans, the insured was responsible for a “co-pay” at the doctor’s office or specialist’s office ( a miniscule $5 or $10 back in the day), a deductible at the hospital, and then the excess was covered at a certain percentage (again, usually 80%). And, you had to fill out CLAIM FORMS and MAIL THEM IN! How horrible! Suddenly, people had to know how to read, write, do math, and buy a stamp! Then came the plans where EVERYTHING was subject to a deductible, and you didn’t get reimbursed until you or your family incurred $200 or $400 in medical bills. Oh my God, Joe now had to save his receipts, too! More forms! Give me the Excedrin!
Well, now those plans require an individual to incur $1000 or more, or his family to incur $2000 or more in medical bills before they get reimbursed at 80%! (And I’ve seen $5000/$10,000 plans.)
The next iteration of health insurance was the “cafeteria plan.” Companies would give every employee a certain number of “benefit dollars” to spend, depending on single or married status, and the person could choose from a “cheap plan” (for younger workers) to an “all inclusive plan” (for older workers). You could even “opt out” and get money back in your pay check if you didn’t buy insurance.
Now we come to the concept of “adverse selection.” If you own a business of even only 100 employees, an insurer will look at the age and gender of those 100 people and their dependents when giving you a group insurance quote. If you have too many women of child-bearing age, you pay more. If you have too many older males, you pay more. If you have too many dependents enrolled in a certain age group, you pay more.
Don’t confuse this with the “pre-existing condition” that ObamaCare loves to flout. If you look at the women of child-bearing age, the insurance company is worried about the proverbial “million dollar baby.” If you have too many older males, they look at the heart attack statistics. If you have too many dependents in a certain age group, they look at the “million dollar motorcycle accident.” It’s just actuarial science.
If anything, pre-ObamaCare employers had better options. They could carve out the “high risk” groups, and buy “pooled insurance,” along with other companies, to minimize the effect of those groups on the majority of their low risk employees and dependents. They were still covered, but that million dollar baby or million dollar motorcycle accident would go against the “pool,” and not the basic group rates.
On the topic of “pre-existing conditions,” I’ve never, ever, seen a plan that denied coverage for more than six or twelve months. Furthermore, the definition of a pre-existing condition usually had a frequency or dollar limit. Yes, a dependent may be receiving chemo or dialysis. In that case, you are one in 10,000 or more. But, I pose the question: if that is the case, why would you change jobs in the first place? And, if you don’t have coverage to begin with, due to unemployment or whatever, you would be no worse off than when you started if you get a new job. You have the option of charity care from hospitals or sliding scales from clinics. The only result of the pre-existing condition aspect under ObamaCare is to raise the rates of everyone else in the group. This may sound callous, but it’s the truth. The PEC clause under ObamaCare is the ultimate definition of “adverse selection.” And then, the law allows you to pay your miniscule “fine” until you actually ARE sick, and THEN get insurance. Sorry, you just stuck your hand in MY wallet! When I wrote insurance contracts, we had things called “Catastrophic Coverage,” such as “cancer insurance,” and “nursing home insurance,” which were literally dirt cheap, but some states wouldn’t allow them because of the political lobbyists’ influence.
I’ll close this with the impact on the taxpayers. Anyone who has been following ObamaCare should know these facts: [a] it has been estimated that 200,000 government jobs will be created, just to man the “exchanges,” and [b] 36,000 IRS agents will be hired to “track down” those of us who refuse to sign on to the program. Government employees make 150% more than their private sector counterparts earn.
My “rough calculation,” based on salary and benefit costs, says we will spend $221,000,000,000 (that’s BILLION) on these do-nothing government employees.
What makes them worth so much? Give a government employee Voice Mail, and god help you trying to get a “human” on the phone! They use it to “screen” their phone calls! They can’t be “bothered” talking to you!
Since I had a relative employed by the IRS, I know that those 36,000 hires will ALL have college degrees, if not MBA’s. And since I know how the government bureaucracy works, those other 200,000 will have job titles like Head Coordinator, Liaison Officer to the Head Coordinator, Assistant Director to the Liaison Coordinator’s Office, Regional Liaison Officer to the District Director, etc., and at least half of them will be making $100,000 a year. Then toss in the 16 holidays…then toss in the medical plan that Obama says they can keep, and their retirement pensions at 75% of salary.
But, all this is going to LOWER health insurance costs for Americans? Someone please tell me how?
I think not! How about the young, healthy workers who don’t even WANT insurance?
This “act” is an act of sedition.