InsureMe Agent Blog: A (Hopefully) Objective Look at Health-Care Reform

There’s no question; the health-insurance industry is floundering—millions uninsured, ever-increasing premiums accompanied by less comprehensive coverage.

And although President Bush’s health proposal has its critics, it addresses an issue that has long plagued Americans, particularly the 47 million uninsured.

His proposal, while vastly different from former President Clinton’s attempt at health-care reform, has one similarity. It guarantees to upend a health-insurance system that has covered most Americans for the last 60 years.

And even though change is inevitable, especially the reform of a faulty system, it has the tendency to incite fear and doubt.

But let’s not jump to partisan conclusions just yet.

The state of affairs…for now

The least expensive, most popular way to purchase health insurance is tax free through an employer. If an individual contributes, he or she is covered, regardless of health or age.

Because many partake in their employers’ health insurance program, the majority of uninsured Americans comprise lower-income families, children and minorities. However, in recent years the issue has ceased being one of socio-economic status or race and begun to affect middle-class Americans, many of whom are self employed or working for small businesses that don’t offer health insurance.

The uninsured masses either purchase individual health insurance, with no tax deductions, or remain uninsured and possibly dependent on government programs, such as Medicaid.

What the proposal means for you (as a citizen)

The plan is to provide assistance to those who need health coverage, in the form of tax deductions. Under the proposed system, both individuals insured through their employer and those who are self insured will receive deductions up to $7,500 for an individual and $15,000 for a family. If a person spends less than the deduction cap, they’ll receive a tax credit. If they spend more, a tax increase.

The thought is that tax deductions will encourage employer-insured individuals to seek out less expensive, individual health insurance, if their plan becomes too expensive.

However critics object, arguing that health-care costs out pace inflation—the measure to which health-care caps are indexed. According to the Tax Policy Center, within 10 years, 40 percent of plans will exceed standard deductions.

Supporters maintain the new system will level the playing field, offering those who purchase individual health insurance the same tax breaks as those who are insured through work—thus making health insurance more obtainable.

But the proposal still faces opposition from some who argue the uninsured, low-income population still won’t afford the upfront cost of health insurance despite the tax deductions.

Although the proposal has received mixed reviews, it is no doubt a step toward finding the cure for an ailing system. Whether this plan is a spoonful of Robitussin that will merely mask the symptoms or a dose of penicillin remains to be seen.

What the proposal means for you (as an agent)

Individual health insurance will be more attainable then it is under the current system, which means people who are uninsured now may be able to afford coverage with the help of tax deductions. And more people may begin to shop their health insurance like they do auto, home, life and LTC.

If enacted, the policy won’t take effect until 2009, which buys you a little adjustment period so you can strategize how to use this health-care makeover to your advantage.

Health insurance is one of the more complicated and important forms of insurance. And the majority of the population has had an HR rep to hold its hand through the important decisions. As an agent, you have the knowledge and information to guide your prospects to make educated health-care choices.

Regardless of your political persuasion, a possible boost in business is something most everyone can get behind.