Trends in Health Insurance
Group health insurance is a program that insurance companies offer to employers. The insurance company can offer health insurance to employers because they are spreading the risk over a large number of people.
Perhaps the greatest change in health insurance in recent history is the federal government allowing employees to retain their current coverage in the event that they change or lose their jobs. Congress passed the Health Insurance Portability and Accountability Act, hereafter referred to as HIPAA, in 1996 and allowed companies to come into full compliance by 2006.
The intention of this law was to ensure that people could retain their insurance coverage upon separation from an employer. In addition, HIPAA also reduced the time that a new employer’s insurance company that is offering group insurance can refuse benefits for the individual with a pre-existing condition. The insurance company can only refuse benefits for pre-existing conditions for a year. Reduction of the time for exclusion is less for employees who have existing coverage from a previous employer. The exclusion period is proportionate to the time that the employee has had their coverage after separation from their previous employer.
Another area that has affected many employees is that health insurance coverage for small businesses has been historically prohibitive. As a result, the number of small businesses that offer employees health insurance has been steadily declining since the late 1990s. This has also had a negative effect on small businesses, as they are unable to attract better employees. However, there are some alternative insurance coverage plans for small businesses.
Indemnity plans have an annual deductible and just cover 80% of medical expenses after the individual has met the deductible requirement. For the average employee who typically only sees a doctor once a year for an annual physical and who otherwise remains healthy, this plan provides security in the event that he or she develops a serious illness or becomes involved in a severe accident.
PPO plans keep expenses low by requiring participants to see a select group of physicians, referred to as a network. This network of doctors has an agreement to offer participants a reduced rate in exchange for the anticipated volume of employees insured through this type of plan.
Similar to PPOs, HMO plans also offer employees a limited number of physicians and they have managers who carefully manage situations that require the services of doctors who are specialized. This helps keep the overall group costs down. The employee can still receive the proper medical attention that he or she needs: he or she just has to go through the proper channels.
Point of service plans are a mix of PPOs and HMOs. The insured must have a referral from a manager to obtain medical attention outside of their primary physician in order to have the services paid for by the insurance company. However, the individual has the option of acting independently but must pay for the additional outside service.
Perhaps the biggest trend in health insurance is the insurance companies’ stance on coverage of groups where any members of that group uses tobacco products. This has led to employers giving their employees the choice between quitting the use of tobacco or the loss of their jobs. In addition, employers are also discriminating against job applicants who use tobacco products and/or refuse to submit to tests to determine if they use said products.
This has led to a lot of legal litigation and people who are using tobacco products are on the losing end. In fact, some states, such as Michigan, freely allow employers the right to discriminate openly against people who use tobacco products. It appears that this trend, perhaps the biggest trend in health care, is a growing one. Of course, insurance companies have discriminated against tobacco users in the form of higher premiums for a long time.