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Charlotte Amalie
Thursday, March 28, 2024
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Individual Health Insurance Still a Hot Topic

Until the fall of 2010, only two companies wrote individual health insurance policies in the territory. Both Atlantic Southern and BUPA stopped issuing new policies and raised rates on people who already had policies when several provisions of what is commonly called Obamacare went into law in Sept, 23, 2010.

While health insurance is an issue for nearly everyone, it’s particularly acute for people who don’t qualify for a group plan or a public insurance plan such as Medicare or Medicaid.

For the most part, they are people who are self-employed or whose employers don’t offer group health insurance. Most paid high prices for minimal policies, but even that became unavailable for those seeking new policies.

Those who already had individual insurance with those two companies faced increased scrutiny and high premium increases to keep their insurance.

According to Carl Gotts, who owns Gotts Insurance Associates on St. Croix, the two companies stopped writing new individual health insurance policies because they didn’t want to comply with Obamacare, a law upheld last week by the Supreme Court.

Gotts cited requirements like annual physicals that insurance companies would have to fully fund and the end of the maximum lifetime limit.

“It made it unattractive,” he said.

John McDonald, director of banking and insurance at the Lieutenant Governor’s Office, agreed. He said that the provisions of the law that began in Sept. 23, 2010, coupled with the ones mandated to start in 2013 and 2014 convinced them to stop writing insurance in the territory.

“Those two companies came to us unsure about their business models,” McDonald said.

Those who wanted individual health insurance are still without it.

Gotts said he gets about one to two inquiries a week at his small agency, some from former local government employees who lost their jobs due to government cuts. He said there are no statistics on how many people want health individual health insurance but can’t get it.

A 2009 survey commissioned by the Bureau of Economic Research and forwarded by Government House Health Reform Coordinator Taetia Phillips-Dorsett, does show some interesting numbers.

It indicated that in 2009, 3.8 percent of those insured had individual polices. This was down from 4 percent in 2003, a difference that isn’t statistically significant.

The survey showed that in 2009 about 28.7 percent of people across the territory had no health insurance. This was up from 24.1 percent when a similar survey was conducted in 2003.

A total of 67.9 percent of those surveyed in 2009 said they were not eligible for a group or public plan.

Across the territory, 53.4 percent of those uninsured in 2009 fell into the 18 to 24 age bracket.

In an island-by-island breakdown, St. John topped the list of uninsured with 35.8 percent in 2009, up from 22.5 percent in 2003. St. Thomas and St. Croix came in at 27.8 and 28.9 percent respectively in 2009. In 2003, the numbers were 26.1 percent for St. Thomas and 22.4 percent for St. Croix.

Other data in the survey showed that in 2009, 22.2 percent of residents were on some form of public insurance including Medicare or Medicaid, up from 20.6 percent in 2003.

A total of 45.3 percent had some sort of group insurance in 2009, with the figure standing at 51.2 percent in 2003. The survey points out that as the rate of those insured under group insurance declined, the number of those uninsured increased.

Phillips-Dorsett said plans are in the works to update the statistics.

While the individual health insurance picture appears gloomy, McDonald said that he feels confident that some companies will decide to offer individual health insurance in the territory.

“I’ve had no real commitment but some say they are looking at the territory,” he said.

The issue is further complicated by the fact that some companies are no longer writing health insurance on the mainland or are planning to get out of the business, McDonald said. “Every state has seen some sort of a cutback,” he added.

As for if and how the territory will implement Obamacare, McDonald said that territories are not required under the law to set up a key provision of the law called Health Care Exchanges.

McDonald said a decision must be made by January 2013 with the Health Care Exchange going into effect in January 2014.

“A lot of things are up in the air,” McDonald said.

While Health Care Exchanges appear complicated, McDonald said they will serve as electronic insurance agents and will group “like” people together. He said the Health Care Exchanges will give those seeking insurance a choice of plans.

“You’ll have bronze, gold and platinum – that’s with all the bells and whistles,” McDonald said.

According to the Health Insurance Reform Task force link of www.governordejongh.com, Health Care Exchanges are intended to expand the availability and accessibility of health insurance by providing “one-stop shopping” that will enable Americans to find a plan that is right for them.

The idea behind the Health Care Exchanges is to “pool” the purchasing power of those individuals and small employers who are not covered by group plans utilized by big businesses and thereby reduce the cost of healthcare and increase competition for the business by the insurance companies.

The website continues that if the territory opts to create a Health Care Exchange, the Virgin Islands can receive up to $30 million in federal funds to provide premium and cost-sharing assistance to residents buying insurance through the exchange.

That assistance would help to provide relief to families who have no insurance or otherwise could not afford to buy it. However, if the territory decides not to create an exchange, it can trade in this allocation for additional Medicaid dollars.

“We are in the midst of exploring both options to determine which would be feasible for the V.I.,” Phillips-Dorsett said in an email response.

Additionally the websites indicates that Virgin Islands residents are exempt from paying the 2.5 percent penalty on income for those individuals who do not have or acquire health insurance. This is another key provision of the Obamacare law.

McDonald said the territory lags behind the states in formulating how it will implement the new law because it didn’t get federal funding until five months after the states.

In her email response, Phillips-Dorsett said the Health Reform’s Task Force’s goal is to “conduct due diligence in terms of medical service delivery modeling to ensure the most access and affordability.”

She urged those without health insurance to seek care at Health Department community clinics, the St. Thomas East End Medical Center or the Frederiksted Health Center.

“These sites are primary care health sites which provide a self-pay option using a sliding-fee scale,” Phillips-Dorsett said.

For more information on Obamacare and how it relates to the territory, visit www.governordejongh.com/healthreform.

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