By Chloe Finn
Kyle MeGraw is a consultant at Health Insurance by Design in New Albany, IN.
Bagpiper: Why do you think healthcare and health insurance is so expensive nowadays?
Kyle MeGraw: Healthcare reform didn’t work. While healthcare reform originally only affected about 23 million people, it’s had a trickle effect. One of the biggest things in my opinion that’s caused the cost of healthcare to go up for everybody—it’s called the Medical Loss Ratio… What the Medical Loss Ratio is saying is that 80-85 cents of every dollar brought in by a carrier has to be paid out in claims. Every premium dollar going to a company, if 85 cents of that isn’t paid out in claims, then there are companies out there that get rebates. That means that for every 1 dollar brought in, 15 cents on that dollar can be used by the carriers for salaries. And we’re not talking just the CEOs… a lot of them [other employees] are in Medicare, coding, call centers. They’re not making these hundreds of thousands of dollars or millions of dollars… 15 cents is the most the carriers can make because of the cap the MLR put on, which started in 2014…. [companies] have to have a certain revenue amount. Another reason the cost of insurance is going up is because those uninsured people, they’re going to the emergency room because they know they have to be seen. Hospitals and doctors don’t work for free. I don’t work for free… if all these uninsured people go to hospitals, they [hospitals] have to be able to reclaim some of these costs. Well, that do that by increasing the price of services to those of us who have insurance.
B: What is the deal with preexisting conditions? How do you know if they’re going to be covered by insurance or not?
KM: It depends on the type of plan. And preexisting conditions, that’s a very touchy subject for some people and a very gray area. When healthcare reform hit, a law said that if you were going to buy a plan through healthcare.gov, preexisting conditions will be covered. Well, what did that do? If the carriers are being forced to cover preexisting conditions—there’s the third component of your price going through the roof… cost is going to rise as utilization rises. People with preexisting conditions have always had an option… they were just on high-risk state plans. Which means that cancers, diabetes, rheumatoid arthritis, and leukemias, and all of these folks—they’re sick. So their utilization is going to be much higher, so they pay a higher premium. But the thought that “Oh, you have a preexisting condition, you can’t get health insurance—“ that’s just wrong. That’s just false. You can, you just pay more for it
On alternatives to traditional insurance plans: Short-term policies are a great alternative to the Marketplace because of the price, and the network of doctors and hospitals… it’s a national network, it’s a PPO, which means that I can go to any doctor in the country. With these Marketplace plans, you cannot. They’re EPOs. Very limited network of doctors, very limited network of hospitals.
A short term policy can last 364 days. There’s 365 days in a year… so the term “short term?” It’s not really short term.
B: How does the process of enrolling in health insurance work? How does one know what plan is best for them?
KM: There’s different ways to do it. You can do it yourself, or probably the more efficient way, is to make an appointment with somebody like me.
I help them [clients] decide what’s the best plan for them. Most people can make payments on a 6,000 bill if that’s what their deductible is. But if they don’t have health insurance, that 6,000 dollars is now 125,000 dollars. Let’s say it’s negotiated down to 80 [thousand] by the hospital, well, 80,000 dollars is a lot bigger hole to get out of than this 6 if you would’ve had insurance. But back to how to know what plan, it depends on your demographic makeup. Am I an individual? Do I have a spouse, kids? Am I over 18, am I under 18, am I in school? Am I under 26? That’s really kind of how you decide on what you’ve got going on.
B: What can teens and young adults do or learn how in order to be more secure in the future when it comes to obtaining insurance and care?
KM: One, is just take care of your health. Because the healthier you are, the easier it’s gonna be… if you’re 26 and coming off your parents’ plan, if you’re not on medications, if you are healthy, if you haven’t been to the hospital in a while, it makes buying health insurance a lot easier, because you don’t have some of the factors or the costs associated with healthcare that you would if, let’s say, you smoked and now you have lung cancer, or you drank entirely too much and now you have liver or kidney problems. One of the biggest ones [conditions] that I see is people with sleep apnea… if the cause is they’re overweight, and the fatty tissue around the flap that goes over your esophagus is keeping it from staying open, lose weight. That sounds super simplistic… but when you really think about it, it’s “if I could lose weight, the fatty tissue goes away, or lessens, that flap could stay open, it doesn’t close, I don’t stop breathing and my heart doesn’t stop.”
So health is a big thing. The other thing too, is just don’t ever take what somebody says as the gospel that isn’t in the industry. Find a professional. And that’s in anything, that’s not just this.
Knowledge is power. Learn as much as you can, be cognizant of your sources, just do your homework.
B: Finally, is there anything else you would like readers to know?
KM: The biggest thing is to understand the information that’s coming in. Especially with this election coming up… you’re gonna hear stuff from both sides. We’re gonna hear so much about healthcare in the next year, and “Medicare for all,” and “Repeal and Replace.” So when you hear that, consider the source. If somebody wants to have an intelligent conversation about healthcare or health insurance, talk to brokers… we have to be able to understand from an unbiased perspective what’s going on with our healthcare industry. Your political stance doesn’t matter when it comes down to understanding what’s really going on.