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Longview insurance agent: Health care law a middle-class tax

By Sherry Koonce
June 28, 2012 at 11 p.m.

Now that the Supreme Court has affirmed the constitutionality of the Affordable Health Care Act, local businesses are waiting to see what comes next.

Will coverage be affordable for all - making health care available to 30 million uninsured Americans - or will the ruling drive premiums so high that they are out of reach for many, as is predicted by one local insurance broker?

Within minutes of the court's 5-4 ruling Thursday, the phone started ringing at David Self's insurance office in Longview.

"I had four agents calling already this morning. They said they were working on group plans, but the companies were pulling out," Self said.

While stocks of hospital companies rose sharply, most insurance company stocks fell immediately after the decision was announced that Americans must carry health insurance or pay a penalty, the Associated Press reported.

Some analysts expressed surprise at the quick sell-off in insurance stocks. After all, those insurance companies also will gain millions of premium-paying customers, the AP reported.

Self has serious doubts the new customers will materialize.

"I think it will be a tax on the middle class, period," Self said. "They can't fund the plan the way it is because the cost is going to be astronomical. Young people are not going to buy coverage; they will pay the penalty, and then it will become an IRS issue."

Self, who sells insurance polices to 200 agents in five states, said he has watched premiums rise over the years largely as a result of malpractice claims made against physicians and hospitals.

He is bracing for health care premiums to rise at least 30 percent, possibly more, as insurance companies try to meet mandates set forth in the new health care act.

Even before the Supreme Court affirmed the health care bill, Cassity Jones/Floor Plus, a small business in Longview, had to make drastic decisions concerning employee health care benefits.

Human Resource Director Melissa Harris attributed the company's decision this past year to drop dependent health care coverage to the anticipated implementation of the health care bill.

Cost of premiums, she said, had escalated to the point where the company could no longer pay its benefit share for dependent coverage.

"The health care reform was a significant factor in that area," Harris said.

Though Harris is concerned insurance costs will not decrease as hoped, she said there are positive aspects to the president's health care bill that will offer much needed protections to individuals.

"I like the component that says you can keep kids on (their parent's policies) until age 26," Harris said. "Removing the pre-existing illness clause is also a good idea."

Harris said she was not surprised at the Supreme Court decision, but thought the health care bill is focused in the wrong direction.

"We need to put more focus on the insurance companies and regulating them," Harris said. "If we had a more level playing field, I think we could make a lot more progress than mandating that every person in the country has insurance."

For now, Cassity Jones is waiting until the presidential election in November, before the company decides whether to make additional changes to its health care benefit.

Republican nominee Mitt Romney has vowed to repeal the health care bill if elected - an action that further affirms Self's belief that health care is driven more by politicians' desires to get re-elected than to find a remedy.

"It has really gotten down to one thing: politics, that's all it is," Self said.

As it stands, the bill will not do what it is crafted to do, Self said.

"The nation's health care does need to be revamped, but it does not need to be mandatory that people have to buy something," Self said.

The Texas Association of Business issued a statement Thursday following the court's decision.

"It is disappointing that the U.S. Supreme Court has upheld the Affordable Care Act, especially as it pertains to the individual mandate. The business community has always been very concerned about the cost of the law, the economic effect it will have on the country when fully implemented, and the effect on employees trying to navigate a complicated and confusing system," said Bill Hammond, president and CEO of the Texas Association of Business.

Unless Congress takes action to replace this plan with something that is more workable, we will see many jobs lost and many businesses that offer insurance to their employees now will drop that coverage, Hammond said.



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