Tuesday, October 18, 2011

The Note That I Just Sent To Rep. Labrador (R-ID) Concerning Health Insurance

Dear Rep. Labrador:

Here is a chance for Republicans to both deregulate the economy AND make it easier for low-income working people to get health insurance at reasonable rates.  I am an adjunct instructor at College of Western Idaho.  Adjuncts get no health insurance as an employee benefit because we are part-timers.  Because teaching the next generation is so important to our society, adjuncts are very poorly paid, and many cannot afford to purchase health insurance at the individual health insurance policy rate.

Many of the adjuncts would love to have some way to purchase group health insurance, which would be substantially cheaper than individual policies.  For this reason, the College looked into the possibility of organizing an insurance plan for the adjuncts, one that would be paid for completely by the adjuncts, since the College cannot afford to pay anything towards a health insurance plan.  The College discovered that there is a federal law that actually PROHIBITS this.  Any group health insurance plan offered by an employer must be at least half paid by the employer.

For employers with a poorly paid workforce, this effectively prohibits the employer from offering health insurance--even if the employees would be willing, even eager, to pay the costs themselves.  This is a problem not just for colleges, but for all the other employers of low-paid workers: restaurants; agribusiness; independent retail stores.

Here is an opportunity for Republicans to demonstrate the superiority of laissez-faire economics, and what a joke Obamacare was (which did not create this situation, but did not fix it, either).  Think of the number of your constituents who cannot buy group health insurance through their employers because of this law, and are either forced to pay the higher individual rates, or go without coverage at all.  Please: try and get this fixed.  Otherwise, Republicans are just playing into the Democrats' hands concerning single-payer health insurance.

Very Truly Yours,

Clayton E. Cramer


PhaseMargin said...

There are issues even for professional associations, and even ten years ago that would have been my suggestion as an answer. You can see some of what IEEE has faced trying to provide this here. Back in the 90s the IEEE plan was better than most startups and most folks I knew used it, but these days that's not the case since IEEE got out of the health insurance business except for catastrophic coverage where you crank past $25K in expenses.

Der Hahn said...

I can sympathize but I can also see why insurance companies probably pushed for this requirement. (disclosure - I work for a life insurance company as a computer technician). An insurer needs some way to establish that the group was not being formed solely for the purpose of purchasing insurance. A substantial financial contribution from the sponsoring entity is probably the best way to establish that it is a legitimate business without a lot of legal wrangling over what groups would qualify. It would also help prevent an insurance scammer from setting up an AARP style marketing group from scratch. I know most professional people are quite responsible about obtaining insurance 'just in case' but as the article points out, the adverse selection risk is pretty high when a company must offer a policy with no exclusions and no underwriting that can be retained past Medicare eligiblity.

I'm pretty convinced the real answer to the problem is finding a way to transtion the employeer tax benefit for insurance premiums to employees and establishing universal HSA's. That would make 'health insurance' into real insurance rather than pre-paid health care. A robust market for individual policies coupled with tax incentives to purchase insurance should make them affordable.

Clayton said...

I can see why insurers would be concerned about the situation you describe--but why pass a federal law? Could insurers not simply refuse to insure pools that they believed were set up as a method of providing coverage to high risk groups? An insurer has considerable freedom to decide whether to take on a particular customer, and at what rate (as long as they do not discriminate based on one of the sacred criteria).