Health Insurance Seminar by John Klimchak - Part 2

And then also at the same time, Medicade was signed in, which is basically health insurance for poor people if you will.

So that's where we are today, the cost of healthcare across the country is roughly 17% of the GDP. One in every five dollars spent today is going towards the cost of healthcare, it's a problem.

The factors that are increasing the cost is the aging population, the rise of chronic conditions—people get sick, advances in medicine and technologies.

And interestingly enough, I would have never thought this one but you see a lot of hospital market consolidations, and it was actually an article a couple weeks ago in Newsday.

But you would think that if there's gonna be hospital consolidations,the price of service should be coming down, cost has gone up due to these mergers and acquisitions.

In addition, the underlying cost of healthcare services is lack of price negotiations, high provider salaries as compared to other countries, arbitrary pricing, high cost of drugs under the unregulated drug pricing, expensive patient protection.

That's what's driving our cost up as a country. Roughly 69% of the population is 54 years or younger accounting for 44% of the total spent. Those that are 55 or over 31% account for 56 which makes sense, the older you get the more things you're gonna have.

People under age 35 comprise of 44% of the population and only 21% of the spending. It all makes sense, the older you get the more spend you're gonna have cause more likely you're gonna getting sick or getting diseases what's gonna happen.

Out of pocket spending, the top 1% spending average about 24,000 out of pocket expenses, top 10% spent roughly sixty two hundred, the bottom 50% spent about $358.

So I'm sharing this with you because at the end of the day when we're looking at different how to structure different models for different employers, you wanna keep these factors in mind with respect to the different—I'm gonna call them insurance tools that are available to you to try to maximize the benefits to the employees but also minimize the cost to the employers.

That's the reason I wanted to share those particular facts. Now interestingly enough, half of adults say it's difficult to afford healthcare costs, agree?

One in four report putting off healthcare because of cost, because of the out of pocket they're gonna have, not necessarily because of the out of pocket.

Six and ten uninsured adults say they have skipped or postponed getting healthcare, they need in the past 12 months due to the cost.

Four and 10 currently have debt due to medical or dental bills and that's even while being insured which is still a staggering number. Then so we spoke about the introduction.

So roughly 65-35 is where we are today 65% private, 35% government, you know between Medicare and medicate. Then what had happened is in March 2010 we had the Affordable Care Act, remember Obama care?

Now, New York itself, before we get into Obama care was a pretty progressive state itself meaning the state had protections for their residents if you will and people coming in their insurance plans more so than any other states.

So what got passed in the Affordable Care Act that much of the effect was really in 2014 but it was passed in 2010—it took time to get through— but this is a big one prohibition against pre existing conditions.

You hear that now but I will share with you at before this happened, we had a groups in New Jersey and Kentucky. And in Kentucky we wrote the insurance out of Kentucky because they had less state regulations less state requirements.

And interestingly enough, one of the employees who was a relatively new hire, he wasn't on the plan for 12 months because normally the pre existing condition rule was 12 months. If something happened in 12 months you're not covered as a result of a particular condition.

Poor guy had a heart attack and he had heart problems. He was in the hospital the insurance company denied him. So, that was a that was a real thing at that time.

Now, had it been written in New York, it wouldn't have applied because New York had pre existing conditions way before the Affordable Care Act came into being but that was a big thing.

And now at least today, switching from one plan to another, that's a current concern that you don't have to worry about anymore and we still get those questions today "hey do I have to worry about pre existing conditions?" No, you don't have to worry about that anymore.

Then no. 2, lifetime limits. Take a look at your health plan right now the benefits are unlimited prior to the Affordable Care Act we used to provide these a lot of the—I'm gonna call it the lower income employees, I'm gonna call it the working poor.

Employers would provide this limited medical benefit. Maybe the maximum benefit might have been only 25,000 or fifty thousand dollars but most of the time the cost or the expected claims were gonna be significantly less than that anyway.

So, most of the time it worked however due to the passage of the Affordable Care Act those plans went away so it became a little bit more difficult you know for these working poor and I'll get into that in a moment speaking about some of the other requirements.

You'll also notice and I'm experiencing this right now that kids are covered up to the age of 26 and then the other point that the Affordable Care brought in which I think is pretty important, very important, is annual preventative exams are covered 100.

And that's irrespectable, we're gonna talk about plans a little bit later but irrespectable over the plan that you're on and your preventative are always free. Now you have to be careful because when you go to the doctor's office they're gonna say well you know you owe me a copay well technically you don't.

Well the other thing is this, when I go for my annual preventative it's oh Johnny this is what you get for your annual preventative but for another hundred dollars you can have your EKG and you can have this and you can have that so they always they always find more other ways to you know to to increase their revenue but that's what they do.

Then also as a result of the Affordable Care Act was the establishment of the healthcare exchanges and I'm getting at home speaking specifically about New York right now but in New York prior to the healthcare reform getting individual coverage the cost was obscene.

Single coverage was running maybe $2,000 a month, it was crazy so in New York, the Affordable Care Act the healthcare exchange was a big thing because now brought it down to be somewhat reasonable for individual cover.

It's really not cheap.

It's not cheap.

But it's not what it was.

Cobber is a fortune too, if you lose your job.

Thirteen hundred dollars a month for a single is not cheap.

I'm not disagreeing with you but it's better than 2,000. So, at the same time what what they did part of the Affordable Care Act they said okay you know based upon your income, you may be eligible for premium subsidy. So, originally it was up to 400% of the of the medical poverty level if you were earning up to 400.

You were able to get a premium subsidy for what was known as a silver plan through the exchange so there are some lower income you were talking about the working poor. If you will they were able to get on health insurance or individual coverage for relatively little or no cost which was big it's a big deal.