By ROBERT PIERCE
• Leader & Times
Two problems currently facing the insurance industry these days are how to handle the federal government’s Affordable Care Act, also known as Obamacare, and how to get uninsured motorists off the nation’s highways.
David Powell believes he has solutions to both concerns, and the candidate for Kansas insurance commissioner was at Liberal’s Coronado Museum Wednesday to tell locals about those solutions.
Powell began his presentation by pointing to the approximate $114 million the state’s insurance department put into Kansas’s general budget last year.
“Those come from the 2 percent premium tax that every insurance company pays on any policy sold in the state in of Kansas,” he said.
Powell said this is similar to taxes levied in other states, and he added that the insurance department is a major contributor to the general budget.
Powell is one of five candidates running for insurance commissioner, and he is the only one that has been licensed in all five major insurance categories – health, life, auto, home and commercial.
“I’m not currently licensed in them, but I’ve been in the business for 37 years and sold my share of home, auto and so forth,” he said.
Powell, who said he has read the entirety of Obamacare, has also written a book on the law entitled “ObamaCare Unwrapped,” and he talked Wednesday about some of the myths of the act.
“Everybody’s heard taxes are real big if you’re a big company,” he said. “You’ll pay $2,000 per employee to $3,000 per employee if you don’t offer it. It’s not affordable, so on and so forth.”
Powell said it is also a myth that small employers are in less danger of being penalized under ObamaCare.
“In fact, a two-person business could be subject to the largest tax,” he said. “That tax is $100 per day per affected employee. It’s called an excise tax. Any of the taxes or penalties are non-deductible to a business.”
That tax, Powell said, went into effect Jan. 1, 2011, just about a year and a half after ObamaCare was signed into law.
“They haven’t enforced it yet until the IRS issues its final regs on that section,” he said. “They have the ability to make this retroactive to Jan. 1, 2011, should they choose to do so.”
Powell said under ObamaCare, there are ways in which no individual, family or business should pay a tax or penalty.
“There are provisions in the law that say if you do this, you don’t have a tax, or you do that, you don’t have a penalty,” he said.
Powell said the law likewise has provisions that allow states to opt out of the ACA.
“If the insurance commissioner will do the things that the insurance commissioner can do, we don’t have Obamacare in Kansas,” he said. “Section 1312 of the law is called ‘Consumer Choices.’ That allows you as individuals or business owners to buy either inside or outside the exchange. You don’t have to buy a plan that’s offered in the exchange if you don’t want to.”
Under Obamacare, the majority of people gaining new coverage are being declared eligible for Medicaid rather than being provided with subsidies to purchase private insurance through the health care exchanges.
Powell said, though, people can purchase insurance outside of the exchange, which would keep the government from capturing a significant amount of personal information.
“They don’t know history from the day you first breathed,” he said. “When you buy outside the exchange, it’s a simple form with no questions. Here it is, you applied, it’s guaranteed issued, and you’re done. The price is the same either way.”
Powell added a section of the law tells what kinds of plans can be sold and still qualify under the law.
“It says any plan approved for sale by the insurance department in its state qualifies as a plan that offers essential coverage,” he said. “One of the first things I’m going to do is every company that sells health insurance in the state of Kansas is going to be notified that they can bring whatever plans they have sold in the past to Kansas and sell them legally, and they qualify under the health care law. Insurance companies would love to sell you whatever you want, and they’re going to charge you only for what you buy.”
Powell said clients will have a menu which allows them to pick and choose what they want and don’t want.
“You only pay for what you buy,” he said. “Who knows better than you what you want, what you need and what you don’t need? Why pay for something you don’t need?”
Powell then steered the conversation to one of his major focuses should he be elected – uninsured drivers. He said while other candidates have stated what they want to do, he has already started doing things to improve the insurance industry.
“I actually have things that I’m working on today, not sometime in the future, that will reduce the cost of your insurance here in Kansas, your auto, your home, your health, commercial insurance,” he said.
Powell has been working with sheriffs and highway patrol officials across the state to get uninsured motorists off the road.
“Insurance companies tell me if we reduce the number of uninsured motorists on our roadways in Kansas, that reduces the cost of your vehicle insurance by about 10 percent,” he said. “We have, in Kansas, more uninsured motorists on our highways than we have uninsured for health insurance.”
Powell said about 16 to 18 percent of the motorists on Kansas highways are uninsured.
“My idea that I presented to them is real simple,” he said. “We’ve got computer systems, and we’re going to tie those from the insurance companies to the insurance departments right to the patrolman’s dashboard computer.”
Powell said law enforcement then can run license plates without stopping the car and get information about whether the vehicle has current insurance, all in real time.
“With a computer system, when somebody lapses a policy, it’s immediately sent to the insurance department and on to the database,” he said. “Even without stopping you, they’ll know whether you have current insurance. Is that an invasion? No, it is not. It’s simply verifying that you’re legally driving on Kansas roads.”
Powell said rather, this gives law enforcement probable cause to stop a driver.
“They can impound your vehicle, put a boot on it, have it towed, and you pay the ticket for the boot,” he said.
Powell said a similar measure was put in place in Dallas.
“The one-year result is there’s 47 percent fewer accidents in the city of Dallas,” he said. “It turns out there’s one class of people that were mostly uninsured. Most of those vehicles were impounded, never reclaimed and sold.”
Powell said the results were simply fewer accidents and fewer problems.
“Their numbers have decreased from about 14 percent to about 1 percent uninsured on the highway,” he said. “We can bring the same thing to Kansas.”