September 23rd has shown us the first phase of health care reform.

We have mass confusion on how the law would effect current health plans. This health care reform was written without taking in to consideration things like math.  The health care reform sounds warm and fuzzy but now we are witnessing what happens when it hits the real life market place. It seems most aspects of the the health care reform was not thought out.

The first big blunder by the administration was the guaranteedissue of children’s stand alone policy. The bill states all children under 19 cannot be declined coverage.  Yet the Gov. does not give any additional details to this law. So now you have the carriers fear that the gaming the system is going to occur. This is where a parent waits for the child to get sick andthen takes out a policy. The next thing to occur is the complete withdraw of every carrier for the stand alone child policy market.  As of right now there are no private companies in this market.

The grandfather status is still a mess.  This law was also not thought through. In the group market most plans will not be able to keep their current benefits. This is because of plan changes. Any increase in benefits loses the grandfather status which creates more cost in premium. What the administration failed to consider is what  happens if the insurance company no longer offers that plan design or if there are change by the carrier to the plan. These are big issues that should have been thought through.

The next major hurdle is the medical loss ratio. This is where 80%-85% of premium has to go to claims. This sounds like a fair deal but back to reality it is going to cause major disruption in the market place. We are already seeing carriers withdraw from current markets. Once the Administrationcomes out with a clear definition of the MLR we could see most small carriers fold. I don’t think it that difficult to under stand why this destroy small carriers. If you have a block of business and you have one group where you make money on and  you have 2nd group that you lose money. The group that the carrier made money on offset the group they lost money on. Now you take that technique a way from the carrier they can no longer can stay in the market.

So far the health care reform negatives far out weight the positives. If these laws were not thought out do you think they thought out the true cost of this reform?