HEALTH INSURANCE LEADER SAYS MANY QUESTIONS REMAIN

As Democrats and President Obama declared with certainty that new health insurance reforms would force immediate and long-term changes to the nation’s health care system, business leaders are expressing caution while addressing the new provisions.

“There’s confusion out right now about how these things get implemented,” said Mike Stock, president and CEO of QualChoice, one of Arkansas’ largest health insurance providers.

“While the law may say, ‘This goes into effect 6 months after enactment,’ does that mean that 6 months down the road every insurance policy out there gets that or does it mean 6 months after enactment new policies written after that date it goes into effect on? Nobody knows right now,” Stock tells Talk Business.

Several cornerstones of the new health care reform law are subject to major interpretation, Stock contends. For instance, how will the “no pre-existing conditions” clause exactly work?

“That’s a fine line in the industry that we understand but the general public doesn’t,” he said.

“Guaranteed issue” means no matter what your medical condition you get health insurance coverage. “No pre-existing condition” means insurance companies have the ability to accept or reject you, but if they accept you, then previous conditions don’t allow them to drop your coverage.

“It’s not clear in the law and there’s different interpretations being made about that,” Stock added.

Several large companies warned before the legislation’s passage that their companies could take major hits to health care plans. Caterpillar, John Deere, and Verizon are a few firms that expressed concerns.

On Friday, AT&T took a $1 billion write-off on its financial statements to account for a tax credit loss it expects to lose related to prescription drug coverage for its current and retired employees.

Stock warns that for most employers there will be months before the rules and interpretations will make clear what the law’s application will be.

“Employers, in general, are kind of taking a wait-and-see attitude, I think,” he said.

Stock also noted that there are some positives that will come from the landmark legislation, although it will help groups of uninsured at the expense of others. He said that uninsured individuals and small businesses that haven’t been able to find coverage should benefit from the tax credits in the bill.

“That’s a positive for those people, but somebody else is going to pay for that. There’s no free lunches.” Stock said.

“I think the big picture is that with any kind of legislation this massive, there’s going to be a lot of unintended consequences. What this legislation really does is create expanded access,” he said. “But it really doesn’t do anything to tackle the real problem of why the cost of care is so expensive in the first place. That’s because of the way that we finance health care in this country.”

Stock advocates more money in the pocket of employees and consumers to allow them to make informed health care decisions through free market forces.

“Today, almost everyone in the country buys access to their health care where they only pay something like less than 20 percent of what the true cost of the care is. A third party – whether that’s the state through Medicaid, the federal government through Medicare, or your employer is picking up the other 80, 85 percent. As long as that system exists in the country, you’re going to have inflated demand and demand that can’t be met.”