May 2010 Archives

WASHINGTON - SEPTEMBER 18:  U.S. first lady Mi...

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Last fall, author Michael Pollan wrote an op-ed in the New York Times offering a simple defense of the not-yet-passed healthcare reform proposal: It would push the health insurance industry to take more interest in America's obesity problem and use its influence to reshape agricultural and food policy, he argued.

Pollan is best known for writing The Ominovore's Dilemma, and played a large role in kick starting the growing "food consciousness" in America. What began as a few scattered academic arguments about obesity and agribusiness has now morphed into a movement, with reality television shows about eating fruits and vegetables and a campaign by First Lady Michelle Obama to reverse childhood obesity, in part by offering healthier food choices in schools.

And Pollan thinks insurers can be a champion for that movement. Although health insurers have long been aware of the burden of obesity and its connection to chronic diseases, until now they have had strategies for keeping certain high-risk patients out of their pool of customers. But because insurance companies can no longer exclude patients because of pre-existing conditions or other health indicators, preventing chronic disease is now a top business priority.

"A patient with Type 2 diabetes incurs additional healthcare costs of more than $6,600 a year; over a lifetime, that can come to more than $400,000. Insurers will quickly figure out that every case of Type 2 diabetes they can prevent adds $400,000 to their bottom line. Suddenly, every can of soda or Happy Meal or chicken nugget on a school lunch menu will look like a threat to future profits," Pollan wrote.

The argument is a little simplistic, and it isn't as if insurers aren't well aware of the costs associated with obesity. But he has a point. Maybe it's time for insurers to get more involved in preventing obesity at the national level.

What if the insurance industry threw its full weight behind a tax on soda and sugary drinks? Or lobbied for agricultural policy that brought down the cost of fruits and vegetables? Individual payers could even significantly increase their reimbursements for wellness and weight loss services, and hopefully see a return on that investment in a healthier America.

Savvy insurers are already taking innovative steps to incentivize weight loss and focus on prevention. But a recent study in the American Journal of Public Health suggests some may not yet be seeing the bigger picture. Companies providing health and life insurance own roughly $1.9 billion worth of stock in the fast-food industry, according to the study.

Granted, this was probably a drop in the bucket relative to their overall portfolios. But any individual or institution interested in improving Americans' health should think twice before investing in an industry that provides the cheap, unhealthy food that helps fuel the obesity epidemic.

The campaign by Mrs. Obama to reverse childhood obesity provides a perfect jumping in point. Partnering with the White House on this initiative could not only improve the health status of the industry's future customers, but it could also help repair its tarnished public image.

And ultimately, reversing these 30-year trends will not only be good for the nation. It will be essential to insurers' bottom lines, as well.

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Janet Trautwein, CEO of the National Association of Health Underwriters (NAHU), issued the following statement recently on the passage of the health care bill:

 "The high cost of health care is the primary problem with our current health care system and unfortunately the 'Patient Protection and Affordable Care Act' (H.R. 3590) does little to truly rein in these costs. 

Health care costs are rising at an unsustainable rate, and if we don't get these costs under control, we will no longer be able to deliver the top-notch medical care that most Americans enjoy today. 

H.R. 3590 also contains an unworkable individual mandate which will encourage people to wait until they are sick to purchase coverage, causing premiums to skyrocket significantly for everyone. 

Tens of billions of dollars in new insurer fees and taxes, expansion of Medicaid, tight limits on age rating and high minimum benefit levels will make private health insurance unaffordable for the hundreds of millions of Americans who are currently insured. 

Instead of alleviating the financial difficulties caused by the current economic situation, the legislation will continue to exacerbate the problem by driving up private health insurance costs significantly for millions of American families and businesses and disrupt the quality coverage on which millions of Americans rely.
   

We have long advocated for members of Congress to work together in a bipartisan fashion to develop an affordable and responsible means of achieving the needed reforms to our nation's health care delivery system, and unfortunately this was not the case."

These are ominous words, but there is still an opportunity for you to effect change that will improve our health care system. So, as we approach our mid-term election cycle, it is incumbent on every individual and business owner to make your voices heard on this issue when you go to your ballot box to vote.

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The Patient Protection and Affordable Care Act is the law of the land. And it will stay that way for a long time. The new health reform law will evolve, but it won't be repealed. President Barack Obama would veto any outright appeal, which means a two-thirds vote in both Chambers would be required to overcome that veto. There's no mathematical possibility, outside of a Karl Rove's hallucination, in which that two-thirds threshold comes close to being met any time soon.

So the law is here to stay. However, that doesn't mean the law won't be changed. Legislation is like a blueprint, in this case defining the outline of health care reform. But it is the regulators, judges, businesses and civilians interpreting, implementing and simply trying to figure out how things are supposed to work that make the law real. That process has only just begun. For example, one of the few elements of the law that takes effect in 2010 concerns the tax credits available to some small businesses to offset the cost of health insurance premiums they provide their workers. The IRS has begun providing guidelines on how this tax credit will work.

Another example: The Department of Health and Human Services has clarified an ambiguity in the law as to whether carriers must accept children for coverage regardless of any preexisting conditions. HHS has decided children under 19 years of age are eligible for guarantee issue and carriers have agreed to go along with this interpretation.

There are a lot of guidelines, clarifications and new regulations still to come. But here's the good news: like those mentioned above, they will be coming well in advance of the effective date of the health care reform package's various provisions.


All of this means now is not the time to panic. Instead, now is the time to take stock of your business practices and determine which ones foster readiness - and which don't. Now is the time to ignore the blathering of so-called news organizations that are more interested in whipping up partisan passion than informing the public (yes, I'm looking at you Fox and MSNBC). Instead, plug into the vast support network out there, starting with your insurance professionals who are ready, willing and able to help you understand not just the letter of the new health care reform law, but how it is being brought to life.


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From the LA Times, April 13, 2010. 

 "Public outrage over double-digit rate hikes for health insurance may have helped push President Obama's healthcare overhaul across the finish line, but the new law does not give regulators the power to block similar increases in the future. ... 

At least in the short term, regulators will be able to do little more than require insurers to publicly explain why they want to raise rates. 

Consumer advocates think that will not be an effective deterrent against premium increases such as the 39% hike that Anthem Blue Cross sent some California customers last year." 


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