Are You Underinsured?


ConversationI have worked with insurance since 1987.  I know a bit about how to help people during rough times.

Over the past 4 years America has heard much about the problems of the “uninsured.”  Obamacare’s Essential Benefit Plans and Exchanges are supposed to do away with that problem.

However, I am afraid that the problem of the “under insured” in America has just started.

After reading and rereading the PPACA, from the viewpoint of an insurance agent and not a politician, I have come to the conclusion that the Patients Protection and Affordable Care Act promised more than it delivered.

I honestly do not care about who is in the White House.  Although I do not trust the present occupant, America chose to give him another 4 years last November.  That is enough for me.  (I may not agree with the choice America made but I understand that I live in a nation where the majority rules.)

Before I say what I am about to say, it might help you to know more about me.

  • I am from Texas.  I am quite content with the two senators we have and the individual who represents my town in the House of Representatives.
  • I do not belong to any political party.  Neither do I send money to any Political Action Committee so they can “Lobby” on behalf of me.  I find it hypocritical to complain about actions from one special interest group while I am sending money to another special interest group.

Maybe I am a bit jaded.  It is my belief that the politicians in D.C. are supposed to be looking out for my benefit.  Unfortunately, after several readings of “Obamacare” combined with 4 years of observation, I am convinced that the good of Americans was not the driving force behind the PPACA.

The PPACA was forced on Americans for political reasons.  The politicians were too anxious to secure their own re-election that they would not take the time to find a solution to the “Health Care Crisis.”

HOW WILL HEALTH PROFESSIONALS BENEFIT FROM OBAMACARE?

From an accounting standpoint, the PPACA solves the Accounts Receivable problems of doctors and hospitals.  Since all Americans are “mandated” to buy one of four government approved Essential Health Benefit Plans, health care providers know they are going to get paid whatever they ask.

Unfortunately, while the PPACA mandates new taxes and fees on insurance companies, that will be passed down to insureds in the form of higher premiums, it only encourages doctors and hospitals to limit their fees.  It does not mandate that they do anything about their charges.

Since the PPACA went into effect, many hospitals and doctors have raised their fees and charges.  Most states already have regulations for insurance companies that require them to collect enough money in premiums to pay for the medical bills for all of their customers.

When doctors and hospitals raise their rates, insurance companies must pay the bill that is presented to them.  Those bills are reflected in the premiums that you and I pay for health insurance.

Most states already had laws on the books, long before Barack Obama declared the “Health Care Crisis,” that require health insurance companies to collect enough money each year to pay for the medical bills they get for their insureds.

When doctors and hospitals raise their fees, our health insurance premiums must increase.

WHAT ABOUT THE UNDER INSURED?

All of the Essential Benefit Plans that are authorized in Obamacare require you to pay up to $6250 in either deductibles or co-insurance.  The major difference between the plans is in how fast you elect to meet that “maximum out-of-pocket” level.

If you have at least $6250 per person in your household in your Rainy Day fund you can skip over the point I make about Medically Necessary health care.

However, if you do not have sufficient money in your Rainy Day fund, you are under insured.

Medically Necessary

With Obamacare’s Essential Benefit Plans most, but not all, of your doctor, hospital and pharmacy bills will be paid for you.  However, if you do not have enough money in your Rainy Day fund to pay for the portion of the bill that is not paid, you will either need to make payment arrangements or buy a supplement to go along with your Essential Benefit Plan.

I expect insurance companies to develop new supplements to go along with the plans in Obamacare in the future but I wanted to list some of the supplemental policies that already exist that you might want to consider if you do not have enough money in you Rainy Day fund.

  • Accident Supplements
  • Dental Insurance
  • Critical Illness Insurance
  • Hospital Indemnity

Non-Medically Necessary

During the Health Care Reform debates of 2009, politicians in D.C. who were in favor of Obamacare wear eager to point out that the major reason for people to file for bankruptcy, even when they had health insurance, was medical bills.

(As an insurance agent, I know there is no standard definition of “Health Insurance.”  When someone says they have health insurance they could be referring to a piece of crap that only pays a benefit for named accidental injury of a comprehensive Major Medical plan.  Both people can say they had health insurance.)

Now that Obamacare is the law of the land, it is time to face an inconvenient truth.  Those people who had good Major Medical insurance but still had to file for bankruptcy did so not because their doctors and hospitals did not get paid.  Their Major Medical insurance company paid them something.

The problem is that, after paying their deductible and co-insurance, they were not able to pay their regular bills, like mortgage, utilities, groceries, etc.

None of Obamacare’s Essential Benefit Plans will pay those bills.  Unless you have enough money in your Rainy Day fund to last you while you recover from a serious illness or accident, you will need to supplement your Essential Benefit Plan with either a Critical Illness or Disability Income policy.

Many employers offer these types of policies either as a voluntary (you pay the premium) or involuntary (your employer pays the premium) benefit.  If you work for a company that does not offer a benefit like this, you can get them as a stand alone policy.

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