Rusty Rice on Healthcare Reform

OurBlook interview with Rusty Rice, president of the Texas Association of Health Underwriters ... www.tahu.org.

The healthcare reform debate often seems to center on those with the most medical needs ... i.e., seniors. Yet we have Generation Y coming up that will have to pay the bills to finance this care. What aspects in the debate should members of this generation be aware of and concerned about?

RR: We have been told that the proposed healthcare reform will not add to the federal deficit ... with the savings coming from restructuring Medicare and taxing the insurance carriers. With the legislation proposed, the insurance carriers may survive in some capacity ... however, the taxes being considered are on what their business is today. If the insurance carriers’ membership drops due to enrollment in a national healthcare system, the anticipated taxes will not be realized. Funds will have to come from somewhere. It is my opinion that a tax increase across the board will have to take place.

It is sometimes said that many young people don't trust that Social Security will be around for them when it's their turn to retire. How, then, would the notion of a so-called public option be greeted by Gen Y'ers?

RR: I also believe that the Social Security system and Medicare will not be available when I reach the qualifying age. I believe at that time, I will have the option of purchasing an individual insurance policy that I can offset the cost for using a qualified Healthcare Retirement Plan. This plan allows me to set money aside in a healthcare account to use toward my future healthcare expenses. Many have already started this process and without government intervention, I think it will be key in the future of healthcare.

Generation X comprises the two decades (born in '60s and '70s) before Y ('80s and '90s). Considering most people in X and most people in Y, would there be any generally held different points of view between the two about healthcare reform?

RR: Absolutely, many members of the so-called Generation Y are often referred to as the "invincibles," believing that they do not need health insurance at this time because they rarely become ill. Under the proposed plan, they will be required to obtain an insurance plan or pay a penalty at the end of each year. These individuals will lose a large portion of their disposable income to pay for their insurance plan and will have to adjust their lifestyle to accommodate the loss.

Those individuals falling under the Generation X category are not only concerned for what they have access to now but also how to lower their cost and make sure they have affordable access to health insurance when they retire.

Your group of independent health insurance agents is the largest of its kind in the U.S. Has it taken a stand on any issues in the healthcare reform debate?

RR: We have taken a stance both on a national and state level. Both NAHU and TAHU support healthcare reform that includes the insurance agent as part of the delivery system. We are not in favor of a national healthcare plan that is not required to play by the same rules of the state they plan to operate in. We also do not support a plan that will add to the federal deficit. We believe our healthcare system and the delivery of that system is the best available. We need to do a better job of educating the consumer on the importance of healthcare and educate those members who are eligible for coverage now on how to obtain that coverage. This will reduce the number of uninsured and ultimately reduce the cost of health insurance.  

Your group is based in Texas. Is there anything different about the health care situation in Texas compared to the rest of the country? In other words, is this a totally national issue or are there state and regional aspects as well?

RR: Some legislation allows for the creation of a Healthcare Exchange at the state level, so we are all affected.  It is my opinion that the state has a better understanding of the needs of its residents and should be involved in the reform process.

Is there anything else you'd like to say about Generations X and Y or the healthcare reform debate?

RR: One of my main concerns that has not been considered is the loss of disposable income created by mandated healthcare coverage. Thirty-two percent of the uninsured have a household income in excess of $50K per year. This equals nearly 15 million people who will have $300-$400 taken out of their paycheck that they would normally spend each month on various items.This equals $4.5 billion less money spent and will have a huge impact on the economy.

On average, health plans spend 85 percent of their premium dollars on medical claims. This covers everything from physician claims, hospital claims and prescription drugs. The focus for healthcare reform seems to be concentrated on the 15 percent that insurance companies spend on administrative costs and profit. If we really want to make an impact in the healthcare delivery system, shouldn't we be concentrating on where most premium dollars are being spent?

Thirty-four percent of the uninsured are eligible for a government program for healthcare. If we were able to enroll half of those members in the plan they are eligible for, we would reduce the number of uninsured by 16-17 percent, which will have an impact on reducing overall healthcare costs.

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