Who hasn’t heard a story of a health insurance provider who refused to pay on a  legitimate claim just to increase the provider’s profits? With every claim paid, their profits decrease. Yes, it happens, but then, bad apples are found in every  industry, from Wall Street to Main Street, from City Hall to the Capital. The question is how widespread the practice is, and there’s no telling. Still, we  shouldn’t paint the entire industry with the same brush. The health insurance industry has as many honest companies as any industry. Still, the U.S. Congress has put constraints on the industry in the new Health Reform Law of 2010 that should  help alleviate this industry of some of its embarrassments.

The health industry accounts for fully one sixth of the United States economy! Americans spend $2 trillion a year on health care, most dollars coming from health insurance providers who, of course, collect their money as premiums on health insurance policies. Health insurance providers make 3 to 6 percent profit from their premiums; the rest goes to operations and claims payments. The new Health Reform Law of 2010 has now put providers on notice: by 2011, providers must allocate at least 80 percent of premium payments to treatment. They’ll be forced to operate on 20 percent of their collections and extract their profit as well. This measure is intended to force providers to streamline their operations, control their expenses, and to reduce tendencies to deny claims. In the future, we can be assured, our providers will pay all legitimate claims without too much fuss. Good news indeed.

Health insurance providers have been saddled with additional burdens as a result of the passage of the Health Reform Law. After March 23, 2010, when President Obama signed the bill into law, providers were to immediately cease the practice of dropping a person’s coverage just because they get sick. Neither are they to deny coverage to sick children. In 2010, they are also ordered to remove lifetime caps, enabling the elderly sick to continue receiving care. The first year insures the sick will be able to get treatment, and that no one covered by insurance be denied when they need it most. Following this law, the health care insurance industry will no longer be open to accusations of inhumanity.

As said above, 2011 will require health insurance providers to spend 80 percent of their premiums on medical treatment. It is in 2012 that the industry will experience the full force of the law, as then, no provider will be permitted to refuse insurance to any U.S. citizen. They’ll have to make insurance available to everyone, sick or not. While this could prove an unfair burden as new claims from the sick will increase their payouts, the law has balanced this possibility with an equally binding force requiring all Americans to have medical insurance. Since insurance for the about 24 million poor Americans will be subsidized by $350 billion from the U.S. government, 2012 should see health insurance providers realize an increase in profits.

All of these measures are meant to control health care costs in the U.S., to provide all citizens access to insurance, and to assure the sick always have care. If all goes as planned, we can expect to see the reputation of health insurance providers at all time highs. Given what they do provide for society, that reputation should have always been high. Getting rid of those ‘bad apples’ should  renew our confidence in them again, with heartfelt gratitude.

Tags: health insurance providers

The United States is a country dedicated to the principles of free trade, the freedom of businesses to rise, grow, and mature, to employ the nation’s citizens, to use its infrastructure, and to profit. Business is the lifeblood of the American way of life, a way of life that Americans have defended with blood, sweat, and tears. In exchange for this exalted position, business has been required to pay taxes, but also to provide health care plans for their employees. Until recently, the cost of health care plans for employees have seriously reduced the employer’s bottom line, especially those of small businesses. With the passage of the health care reform bill of 2010, small businesses will be given help to meet this responsibility, and still be able to make a profit.

Assigning to business the provision of health care plans for their employees was the country’s way of affirming that many people become ill as a result of working hard, that businesses ‘use up’ these people, and that businesses have a moral responsibility to care for their employees, some of whom virtually give up their lives for the company’s goals. Teddy Roosevelt expressed this understanding when he castigated business for “throwing back upon the community the human wreckage due to its wear and tear.” For him, and as it turned out, for the nation, business could meet its responsibility to its employees and to the nation by providing insured health care.

In the future, robots might well run the whole enterprise, but for now, businesses require people to achieve their business goals. It’s also true that work does takes its toll on humans, on their bodies, minds, and family life. Before business was assigned the responsibility of providing health care plans for their employees, the money paid to the employee was regarded as compensation for both the work performed and the cost to the employee’s health. That changed, as the impact of work on the employee became clearer, and the dependence of business on the employee  was no longer understated. Eventually, compensation for labor was no longer strictly defined by a paycheck; fair compensation came to include health insurance. Today,  its no longer just an expectation; health insurance in now our national law.

The United States health care reform bill of 2010 requires businesses employing 50  persons or more to provide health insurance to their employees. However, this provision doesn’t take effect until 2014, four years from now. In the meantime, to encourage business to provide health care coverage for their employees now, small businesses will receive tax credit incentives if they do. This will enable small businesses to achieve a better bottom line than they currently enjoy, due to the high cost of medical insurance, including their group health care plans.

Whether the rationale for assigning health care coverage to businesses today is valid or not, business has been irrevocably assigned the task. At least you can be sure your competitors are having their profits reduced by the same health care expense. They’re not going to have the extra profit to spend on quality improvement any more than you are. Quality products and services are what made the U.S. the great economic power that it was. Quality employees are a significant factor in creating quality products and services. Finding and training good employees can be expensive. Inexpensive, but comprehensive health care plans can be used as an enticement for getting and keeping quality employees. Your employees will, at some point, get sick. Without medical treatment, they could be absent a long time or could even die. Getting them healthy as quickly as possible and keeping them alive, as crude as it may sound, increases the probability that your company will continue to provide the quality products or services that keep your profits high. The burden may be hard, although there are also some benefits to be gained. However, the real prize of providing health care plans is in being not only a profitable company, but a noble one.

Tags: health care plans