America: Land of the Free?

On Thursday (July 8), I attended a meeting in which we reviewed some new requirements of healthcare reform. Assuming that the law has been interpreted properly up to this point, here’s what some of it boils down to:

1. If you were enrolled in an insurance plan before March 23, you’ll be grandfathered in that plan, thus allowing you to keep similar covered benefits to what you already have.


2. If you enroll anytime after that date, some of your benefits will change on January 1, 2010, or sometime thereafter, depending on your anniversary date. One new benefit will be increased coverage for preventive services, which will now be paid at 100%. (Previously, you may have had to pay an office visit copay or perhaps had to pay 50% of the costs. It would vary by plan.)

Of course, it’s a little more complicated than this, but you get the idea. Basically, with the new requirements of extra coverage along with some other changes, you should expect to pay more for the second scenario. Come this November, people in the non-grandfathered plan, especially young, healthy adults, could see a hefty price increase.

Consider it this way. You can join AAA in their basic plan for let’s say $60. That will get you five miles of towing if you need it. However, if you think you’ll need to be towed longer distances, then you’ll want to join their premium plan. But guess what? It’s going to cost you $80. Of course, in all of this, they’re betting on the fact that not everyone is going to need towing, no matter which plan they join.

Insurance is the same way. As a result, if you are in the non-grandfathered plan, you’re getting better benefits because you have more coverage for preventive services. So it should cost more, right?

Here’s the problem. If you check out the link below from the US government, you’ll find this statement:

“Individuals whose plan changes and is no longer grandfathered will gain access to free preventive services, protections against restricted annual limits, and patient protections such as improved access to emergency rooms.” (Click here for details.)

Did you notice the word free? For those of you who know me, I really like the word free. It’s up there with other great words like cheap, inexpensive, sale, and so on. I like free stuff, but there are two guidelines I use to determine whether or not something is free.

1. I didn’t pay anything for it, nor did I exchange something for it.


2. I’m buying one item and getting something else at no extra charge. The kicker to this scenario, though, is that the original item I bought would still cost the same amount whether or not I got the free item.

I’ve seen deals in stores where I can pay $10 for something or else pay $12 for it and get something else for free. That’s not free. And that’s how I see this preventive benefit. To call it free is misleading.

Before I contacted HHS (Health and Human Services) about this issue, I decided to make sure I knew what I was talking about. My best bet was to call the Indiana Department of Insurance (IDOI) and ask them if it was legal for an insurance company to advertise benefits as free.

When I explained my concern to the person at the IDOI, he immediately said, “You can’t say it’s free. You’re paying for it.” So based on regulatory requirements, insurance companies cannot say something is free if there is an increase in cost to have that benefit. So the government is using misleading language on their website, language which does not hold up to the regulatory requirements of the states. For some reason, after all of this, you would think I would no longer be surprised by this kind of thing, but I must admit, I still am. (And as a side note, you’ll be ever so glad to hear that the IDOI doesn’t sound too happy about these new laws.)

I called HHS to ask about what the meant by “free preventive services.” I told him that from my understanding thus far, rates would have to go up to cover these additional benefits, thus nullifying the fact that it’s free. There’s a big difference between paid at 100% and free. It may seem like the same thing at the doctor’s office, but it’s not when it comes to paying the insurance premium. But this is what he told me: “We’re not aware of any rate increases being caused by the extra coverage for preventive benefits.”

What? Are you serious? You didn’t know that rates would have to go up because of this? What don’t you understand about insurance? Is the government completely ignorant on this subject? (That last question is rhetorical.)

After a little discussion, he really couldn’t tell me what was meant by free preventive services. I did inform him about what the IDOI had told me, that it would be illegal for an insurance company to make a statement like that. But he told me he would be willing to investigate it for me and call me back.

At the end of the conversation, he asked me a question that puzzles me. He wanted to know if I was a reporter or if I worked for some sort of organization because my question would have to be directed to the appropriate person. At the time, I didn’t think about it, but why would a reporter get a different answer than a concerned taxpayer? Shouldn’t the answer be the same? Is this a reason to be concerned?

By the way, if you’re thinking I’m just being nitpicky about wording, it’s these simple, misleading statements that cause problems. I may be wrong, but if rates do increase in November, I’m expecting a backlash against insurance companies because President Obama has promised rate decreases by up to 20%! (Technically, I believe that decrease is based on rates for the year 2016, but I'm guessing most people don't know that.) (Read more info here.)

Contrary to President Obama’s promises, I’m coming to believe that America is no longer the land of the free. With all the extra taxes, excise fees, property taxes, sales taxes, and so forth, our paychecks are being cut by 50%. Depending upon you're viewpoint, I guess we’re either America: Land of the Half Off or America: Land of the Fee.