A California Exchange in 2011, only 10 plans available….Don’t change your individual plan!
I thought this was not going to take place until 2014?
It’s happening already and the individual market is about to feel some major pain. That is some of you, my clients and the middle class population that is doing the right thing in owning an individual or family health insurance plan. What I am telling my clients in the under 65 market – not in group or company plans, but rather, own individual or family health insurance policies; STAY PUT! After you send your fax to Governor Schwarzenegger’s office and tell him not to sign these Bills, don’t make any changes to your plan for the moment. Let’s talk first and review your plan. Let your plan be grandfathered in, take the rate increase until the end of the year and then let see what happens. Some Insurance companies have already stopped selling plans with one year rate guarantees and gone to monthly in anticipation of Bills such as SG 900 and AB 1602 passing the Governors desk.
Wait until January. If California goes to only 10 plans (5 HMO and 5 PPO) and they all have to cover preventative care with no member copay, unlimited coverage limits, no preexisting conditions without a strong mandate to buy, we are going to wind up with really expensive plans, with the mass majority of new members getting in that are sick, and the healthy will stay out; it is going to be a mess. Believe me I know that people with pre-existing conditions need coverage, it is just not as simple as it seems, if it were, it would have been done a long time ago. With 2011 coming up quick, the first group to benefit under current reform will be those under age 19 this January, with the rest to come later in 2014. We want things to get better not worse. If 2011 starts with what is proposed in these Bills below and you combine that with the even bigger HR3590 (National Reform Law) in its current form, get ready to say HELLO to adverse selection, no choices and accelerated insurance premium increases beyond the average 15% levels.
Recently at a NAHU meeting, I was able to get caught-up on our California Legislative activity. Mr. David Benson, Vice President of Legislation on the Board for CAHU (California Association of Health Underwriters) was able to give us a very insightful update concerning some Bills that if they pass both Houses and are signed by the Governor, will become law in California. If they become law, they will have a rather devastating effect on the individual market place as mentioned above. Individuals and families with health insurance policies, especially those with high deductible and HSA compatible plans will see much higher premiums in the future unless things change. Not good news seeming how I have been working with all my clients over the years to move to higher deductible and HSA compatible plans. Pay less in premiums, get your preventative care and save the difference. Now those premiums are high but as cost or care (claims) go higher, the cost of financing goes higher. We pay twice per capita then most all other countries, yet we are the most obese country in the world with no better outcomes for the additional dollars spent. Back to the Bills at hand and why you should think twice before making any changes to your individual or family health plan.
As HR 3590 (the federal health care bill) regulations are being written, the states and the California Legislature are coming out to address some of those issues. Right now, we have SG 900 which was authored by Elaine Alquist the Senate Health Chair and Daryl Steinberg who is the Senate Pro Tem; this is an exchange Bill that will create a new exchange that will start in 2011. There is a companion Bill, AB 1602, authored by the Assembly Speaker John Perez that does the same thing. Both of the Bills have passed in their original House and its now committees in its opposite House and if these Bills are signed by the Governor, they will go into effect January, 2011, and so we will have a new exchange to deal with. The other Bill that’s of interest is SB 890, and this is a Bill that will take 138 individual plans now being offered in the individual market place, and reduce it down to 10 individual plans; 5 HMO’s and 5 PPO’s. Well in rural areas, you don’t have HMO’s, so they will go down to 5 plans, and these are very rich benefit plans, so anybody that’s on a high deductible plan or limited benefit plan could be in for a very rude awakening; very large premium increases if this Bill is signed in to law.
Below, I have listed the two Bills and the Author of each one along with Governor Arnold Schwarzenegger’s fax number. I have also included a letter that you can personalize, cut and paste, and then fax to the Governor. If these two bills go through and we don’t get things changed in the health care reform legislation, we could be looking at $1700 per month premiums for a guy in his thirties. If you don’t think so, compare our rates, or nearby these states will similar legislation. Connecticut rates for a man in his thirties are a $200 and plans with similar coverage for the same age man in New York are $1700 or try $800 in New Jersey. That is what happens when you remove private sector competition, have weak or no mandates to buy (all citizens must purchase) insurance and make it a guarantee issue market on the shoulders of insurance companies. The unhealthy get in; the healthy get out, and there are no penalties for purposely living unhealthy life styles and not changing behaviors. There must be consequences for one’s actions; people must own up to personal responsibilities and we must help those that can’t help themselves. We cannot put this on the backs of the middle class and the private sector to finance while the government and states control it, it will fail and we will pay for it again.
We need responsible reform, not government control. It is a bill of goods that the public is be sold. The reality of things if not changed, will result over the next decade and it will be destructive. Please fax the letter below.
BILL NUMBER: A.B. No. 1602
AUTHOR : John A. Perez
TOPIC : California Health Benefit Exchange.
TYPE OF BILL: Active, Appropriations, Majority Vote Required, State-Mandated Local Program
BILL NUMBER: S.B. No. 890
AUTHOR : Acquits
TOPIC : Health care coverage.
TYPE OF BILL: Active, Non-Urgency, Non-Appropriations, Majority Vote Required
State-Mandated Local Program
A SIMPLE thing from you is NEEDED right now…today, please. The Governor will decide on signing or vetoing AB 1602 & SB 900 within the next week. (9-30-10 is the deadline for his decisions). Just COPY and PASTE the letter below on your Letterhead and FAX it to the Governor’s office @ 916-558-3160.
[letter to the Governor]
Dear Governor Schwarzenegger:
I am writing today to request your veto of AB 1602 (Perez) and SB 900 (Alquist) which would create a Health Benefits Exchange, a huge state bureaucracy with broad authority and no oversight or accountability. If signed, these bills could lead to increased costs for millions of Californians seeking health insurance and unnecessary costs to the state.
AB 1602 and SB 900 are totally irresponsible given California’s huge Budget Deficit!!! How could this Bills EVER be justified to Californians when the State can’t even pay its obligations and is facing a 20 Billion Dollar deficit, again!!!
There is still sufficient time for California to develop an effective Exchange by crafting a model that is accountable to all Californians.
Please Do Not Sign These Bills!!!