Health Insurance 101 with Industry Insider and Watchdog, C. Steven Tucker  

Show Notes

• Archived Blog Post

  Date / Time: 4/14/2009 9:12 PM UTC

  Medicaid Expansion Programs Buckle Under the Stress of "Open Enrollment"
  

  I have been an insurance broker in the state of Illinois for the past 15 years and I have seen first hand what happens when an over burdened, tax funded, Government controlled, entitlement program like Medicaid is offered to those with incomes well into the middle class.
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  Last year, SCHIP covered about 7 million low-income children and Medicaid covered an additional 23 million. This year, the U.S House of Representatives passed the H.R.2 SCHIP Expansion Bill which adds another 6.5 million children to Medicaid.
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  In fact, according to U.S. Census Bureau data, 42 million children will now be eligible. The bill also allows States to receive federal reimbursement for adding more immigrant children and pregnant immigrant mothers, and removes the 5 year waiting period now required for legal immigrants to be eligible.
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  This would enable immigrants to come to the United States and qualify for health benefits the moment they get here. The present income eligibility cap is $44,000 for a family of 4. The new bill raised the Medicaid limit to $66,000. New York will even include families who earn $88,000 and other states allow families to subtract from their income calculation what they spend on rent or mortgage or heating or food or transportation. So children in some families with incomes well over $100,000 will now be eligible.
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  With the median U.S. household income being $50,000 and 60% of U.S. households earning less than $62,000, this means that 3 out of 5 American households will now qualify for free health care for their children. The other 2 out of 5 will have the burden of paying for all of this!
  

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  In fact, several Medicaid "expansion" programs have been enacted in my State, Illinois, by recently impeached and now infamous Democratic Governor Rod Blagoyevich. To read more on how Blago handled Medicaid in Illinois, click here:
  http://blogs.wsj.com/health/2008/12/18/blagojevich-a-childrens-hospital-and-medicaids-stingy-ways
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  In fact, Illionois state was the first to expand these Medicaid entitlement programs to include the "All Kids Covered" plan http:www.allkidscovered.com, the "Mom's & Babies" plan" http://www.allkids.com/pregnant.html and the"Family Care" plan http://www.familycareillinois.com
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  These entitlement programs not only have provided FREE health insurance coverage to all low income women who are currently pregnant (Mom's & Babies) and all children - here legally or ILLEGALLY (All Kids Covered) but they also provide FREE health insurance to all low income mothers of children who are insured under the "All Kids Covered" program (Family Care).
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  Now, one does not need an actuarial degree to quickly conclude that these types of entitlement expansion programs simply can not continue to work without massive and endless influxes of tax payer dollars. In fact, the State of Illinois is currently $1.5 Billion (yes that's BILLION) behind in payment of claims to medical practitioners who have provided treatment for Medicaid recipients. Furthermore, submitted claims by unpaid practitioners have accrued a potential liability of $81 million in interest due to payment delays over the past 8 years!
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  Read more about the problems with claims payments here: http://www.mysuburbanlife.com/broadview/archive/x1874998363/Illinois-must-fix-Medicaid-woes 
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  Update: As of January 2009 a moratorium has been placed on the sliding scale portion of the Illinois Family Care and the Mom's & Babies program. One can only wonder why. Could it be due to lack of funding?
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  Illinois was lauded as the "Flagship" state for all others to follow regarding the expansion of the Medicaid entitlement programs. If this is the template for all others to follow, then god help us all, or at least those of us that actually fund the Medicaid system through our hard earned tax dollars.
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  Weighty decisions such as expanding the Medicaid system to virtually "All Kids" regardless of their actual need, simply can not be made based entirely on emotion! Prudent decision makers must weigh the DESIRE to help all mankind against fiscal REALITY. There simply is not enough money to provide such irresponsible expansions of the Medicaid program.
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  Most especially with the $780,000,000,000 (BILLION) "Porkulus Maximus" Bill just passed in the Senate. This is the real reason why President Bush vetoed the SCHIP program http://www.nytimes.com/2007/10/03/washington/03cnd-veto.html which was pushed irresponsibly forward by the Democratic Party.
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  The Conservative side of the House shares the same concern for those truly in need. This side of the House wishes to help those who are deserving of such entitlements e.g. legal residents of this country who actually qualify during a legitimate needs assessment. Most certainly NOT a needs assessment that includes the middle class who can and should insure themselves against medical risk.
  

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  Expansion of these entitlement programs to anyone else is a well meaning, but a fiscally irresponsible act. One that, in the end, will end up crippling the already over burdened Medicaid system. This will especially be true when the "Baby Boomers" all start entering the assisted living arena without Long Term Care coverage to help shoulder the burden of the ever increasing cost of professional care that will, without a doubt, be needed for this gigantic population of new senior citizens. This can all be avoided by shifting the risk where it belongs, namely, to the private health insurance industry. This is where the money is, and always has been, to shoulder this huge financial burden.
  

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  Those of us who are in need of health insurance have many options to choose from. These options are priced very affordably, most especially so if one takes advantage of the recently expanded tax incentives awarded to those who own HSA qualified HDHP's http://www.sbisvcs.com/Health%20Insurance%20products.htm 
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  Even if one can not qualify for the aforementioned HDHP option due to underwriting restrictions, then there are many other options now available to those who have been rendered "uninsurable" in the individual health insurance market.
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  These options include the following:    

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  1. State Insurance Risk Pool Coverage provided under HIPAA http://www.naschip.org/states_pools.htm  

   

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  2. Small Group or Employer Sponsored Health Insurance which contains the all important "Guaranteed Insurability" clause.
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  3. HIPAA certified "Defined Benefit" Health Insurance policies issued on an individual basis to anyone regardless of medical history http://www.sbisvcs.com/guarantee_issue.htm
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  An integral part of making fiscally sound responsible decisions, means you must explore ALL of your options before leaning on a Medicaid system that is already over burdened by those deserving, and most recently, those who are undeserving.
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  This is why it is always prudent to consult with a reputable and knowledgeable health insurance broker (not a captive agent who can only offer one company's products). Since it does not cost a penny more to buy your health insurance through a broker, why would anyone risk purchasing thier health insurance blindly on the internet? Working with someone who is knowledgeable about the insurance industry and can offer you a diverse group of products that can be customized to fit your health care needs takes the frustration out of shopping for health insurance and gives you greater peace of mind.
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  If you have other options, you should never leave your healthcare decisions up to government bureaucrats and a failing Medicare system. You have to assume that the quality of care that you will receive by a medical practitioner who knows that a payment for services rendered may never come may be very different than then the type of services you would receive if you have private health care coverage that timely reinburses your health care practioner for medical services rendered.
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  To read more about Illinois Medicare "Flagship" program with respect to reimbursing medical practioners, click here: http://www.mchenrycountyblog.com/labels/Kids%20Care.html

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  About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.

  • Tags:
  • Medicaid
  • expansion
  • schip
  • low-income
  • open enrollment
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