Mandatory Coverages and The Cost of Your Health Insurance

A common theme we run across in our health insurance agency is the lamentation of days gone by, when premiums were low, deductibles were only $250, prescription co-payments were no more than $2 and office visit co-payments were no more than $5.  Clients remember the good old days, and really cannot comprehend how health insurance premiums haven risen so dramatically over the past 20 years.  My husband, Scott, who is also the President of our health insurance agency has a great way of explaining this to our clients, and I’d like to share it with you.  He always draws these great umbrella pictures to give our clients a visual of what has happened.   Below is my attempt at replicating his lovely artwork.  I hope you can see it well enough:

My drawing is quite simple, and there’s really a lot more to this, but as you can see, there are a lot more services being covered under today’s plans when compared to the “old days”.  If today’s deductibles were only $250, insurance premiums would be out of reach for most people.  But, we as consumers demanded it.  We wanted the latest and the greatest technology to be covered by our insurance, and with that comes a cost.  It’s not just technology that has changed and added to the cost of coverage, it’s the mandatory “benefits” we must purchase, whether we want them or not.  Our heavily regulated health insurance industry dictates “mandatory benefits” both at the State and Federal level….benefits we cannot opt out of, even if we don’t want or need them. Some of these include:

  • Maternity Coverage
  • Pediatric Dental and Vision Coverage
  • Gastric Bypass Surgery
  • Infertility Coverage
  • Mental Health Coverage
  • Drug Addiction and Abuse Coverage
  • Preventive Care at 100%
  • Contraception at 100%
  • Chiropractic Services
  • Coverage for Autism
  • ….the list goes on and on……

Back in the “old days”, consumers could choose not to have maternity or mental health coverage, and pay less for their plan, for if they didn’t feel they were at risk for mental health disease and wanted to risk going without mental health coverage, they could!  This is not an option anymore; and with the passage of the Affordable Care Act, the list of mandatory coverages has grown!  You might wonder why this is happening. Well, now that we have a healthcare system where everyone is required to have health insurance, and pre-existing conditions cannot be excluded from coverage, the government must step in to determine the minimum level of coverage that everyone must have.  Of course, it wouldn’t be fair if I was sicker than you, and had to buy a more expensive plan to cover my needs, so everyone in the pool must now have the same benefits.  This is called “minimum essential coverage (MEC)”. When the government is in charge of the definition of MEC, of course, lobbying groups from every type of health care sector want their product/service to be part of the mandatory MEC, and they are often successful.

The best article I’ve ever seen on this subject was written by my friend, Dr. Paul Hsieh.  I really encourage you to read it:

Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America

Every state in the union is required to have a “Benchmark” Plan, and that plan defines the minimum level of coverage that must be included in all plans sold in your state.  Here is a link so you can view the benchmark plan for your state.  Believe me, it’s eye opening, and explains a lot as to why our insurance is so expensive these days.

Benchmark Plans – All States

I wrote this entry in an effort to communicate with the average Joe about why health insurance is so expensive.  Knowing why is step 1 towards finding a solution.  If you take away from this something you didn’t know before, then I have done my job!

What can you do to be a part of the solution?  If after reading this, you have something to say to your local representatives, please let them know your thoughts and ideas.

Contact Your Representatives

The following webpage goes into great detail on current legislative issues revolving around healthcare, and within the links, there are forms to find your elected officials.  Visit the following link to stay abreast of Health Care Reform and the legislative issues surrounding Health Care Reform:

Legislative Issues and Health Care Reform

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