February 26th will go down as the day of infamy in the insurance world because the House Democrats introduced Medicare for All. It is not clear if the speaker will allow it to go to the floor or not for a vote?
Right off the bat, all insurance companies will not be allowed to offer coverage if that coverage is the same as Medicare. Meaning the insurance companies can provide coverage for anything not covered by Medicare which really means cosmetic surgery or any elective type services. Hospital care, prescriptions and doctor visits will be covered under Medicare for all.
Well, that means that in excess of 2 million insurance company employees will now be unemployed. Great start!
The other interesting factor is that all medical facilities would be put on a budget for the year. Meaning hospitals and Doctors would be reimbursed differently than previously under Medicare. Since all facilities would have an annual budget, supposedly provided by new regional directors, many things would change.
Just on these issues alone indicates that Congress will be overseeing the regional directors or even HHS or CMS. Either way, the control over your own healthcare is eliminated and turned over to someone else with complete authority over your life.
What the bill doesn’t address is the cost and the loss of all employer-based insurance.
The cost cannot be determined yet but should be in excess of 30 trillion dollars, according to several sources. Where that money will come from hasn’t been determined yet and it is scary to think about it without fear for our future.
The loss of employer-based coverage is huge and not many understand the implications. It means that employees who were getting half of their insurance covered by their employer will no longer have it. So, all employees getting 50% of their insurance paid by their employer will now pay 100% of that coverage. Not what these employees would want.
A 50% increase in their insurance costs because those in Congress think it’s a good idea? Will those employees be able to afford it is another very important question that needs to be answered. Do you think those employees will be happy paying 50% more for coverage? I don’t and that is one of the biggest issues Congress will have to deal with in the near future. About one third to one half of all Americans get their insurance through work.
Will Congress be on the same coverage? They would have to as there wouldn’t be any more insurance companies. What will happen to private doctor practices? That hasn’t been discussed yet but needs to. What incentive would people have to become Doctors and have their own practices? They would be told what they can and cannot do medically.
As you can see, this is the start of a complete takeover of health insurance by our government.
What will happen to all those seniors on Medicare Advantage plans? Since there are no more insurance companies, these seniors will be forced onto Medicare for All.
What happens to those seniors on Medicare Supplement plans with separate drug plans? The supplement plans are from private insurance companies that won’t exist under Medicare for All. These supplement plans are guaranteed renewable as long as the premiums are paid. That was established by the government which designed these plans. They are contractually guaranteed for life. Also, the drug plans are provided by insurance companies and again, the implied indication that they would be around because the supplemental plans don’t include drug coverage.
So far, more questions than answers. It will take a great deal of time to answer all these questions before Congress can present this to America but from the start, the concept is flawed and full of holes and some dangerous ideas that will curtail our freedom of choice.
Enough said for now but more will follow as things unfold. Stay tuned.
The Barend Agency Inc.
Len Barend, broker