Affordable Health Insurance

Guaranteed issue individual health insurance coverage, regardless of medical condition – is it possible?

Americans have always been asking for guaranteed issue individual health insurance coverage for all, regardless of their medical condition. The health insurance industry has always resisted this idea until recently, when the two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association announced their support for guaranteed individual health insurance coverage, in conjunction with an enforceable mandate for individual coverage.  The only issue now is how to enforce individual coverage mandate.

Here is one enforcement idea from First Eagle Insurance Services, with over 25 years of experience in individual health insurance:

• The enforcement mandate should have some kind of basic coverage standard model set by the government that can include protection against major medical expenses, including emergency care, some preventive care coverage to keep people healthy, and prescription drug coverage.  Each individual must have an equivalent or better coverage to avoid being penalized for being uninsured. Government can set a premium for this standard package, based on some criteria like age, zip code, etc…  People who chose to stay uninsured should be charged this premium for the number of days that they were uninsured during a calendar year. This premium should be somewhat higher than what private insurance carriers would charge (may be 20% to 30%) to encourage people to get insurance on their own.
   
• Insurance carriers should use that basic coverage standard model as the foundation of any health insurance plan offered, and they may also offer better plans with additional coverage, or more options (just like Medicare Advantage plans).
   
• At the end of the calendar year all health insurance providers should send a uniform confirmation of creditable health coverage form to each individual policyholder indicating the coverage period. This form should be issued to all individuals, regardless of policy type, whether it is individual, family or group policy. A copy of this form should be forwarded to the government office designated for the enforcement of mandatory health insurance.
   
• Each individual should file this health coverage form along with his/her federal income tax return, just like a W-2 form. If the tax filer and his\her family member(s), have full 365 days of creditable coverage, verified with a health coverage form , then they do not pay any additional charges with their tax return. However, if the creditable coverage is for less than a full year period, then they pay the cost of the government set premium charges for the numbers of days that they have been uninsured.
   
• Government can also set different levels of premium standards based on tax filers’ income level (premium costs for lower income people can be spread into premium costs of remaining payers), so people with lower income will be charged premiums that they can afford to pay.  Premium credits should apply to lower income people whether they purchased the coverage themselves or were forced to pay the penalties.
   
• Premiums collected through the tax forms can be deposited into a pool set aside to provide coverage for the uninsured, and any uncollected funds by medical providers, due for services provided to uninsured and/or underinsured, can be sent to this fund for payment.  Any shortage of this fund can be spread backed to insured population through insurance carriers or by increasing the original standard premium set by the government.

These are just some preliminary thoughts about how the system can work, and of course the details have to be worked out by cooperation of insurance industry, medical care providers and the government.  Nonetheless, everyone agrees that any comprehensive health care reform should include containment or reversal of health care cost inflation trends.  Health care cost inflation trends can be implemented by allowing more competition in insurance industry, and in medical care provider industry.  Of course, this is a separate issue to be analyzed for comprehensive health care reform.

Based on this individual coverage mandate enforcement concept, each individual will pay their fair share of health insurance cost.  It will promote personal responsibility. It will provide choices to all Americans to get the coverage type they want without restriction to a certain plan or carrier, and it will keep competition alive in the insurance industry.

Vic Vartanian
Principle
First Eagle Insurance Services
HealthInsurancePlansInfo.com

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