The Sky Is Not Falling

Sunday, October 28, 2012
A Power of Attorney. The elderly couple wanted to give me a Power of Attorney. They were convinced that President Obama is going to win re-election and that their Medicare coverage is in jeopardy. What happens when(!) he changes Medicare and they don’t get into my office fast enough to be protected?

Can we give you a Power of Attorney to change our policies so that we have the right coverage?

It was Republican Week at my office. I can normally tell whether my clients are Democrats or Republicans just by the questions they ask. The talking heads on FOX create a climate of fear and misinformation on some parts of the Patient Protection and Affordable Care Act (PPACA). Rachel Maddow and Ed Schultz create a competing sense of dread and foreboding amongst their viewers.

I watch both channels so that I can anticipate my clients’ concerns.

My last post, Collateral Damage, noted the unintended consequences of a badly written piece of legislation. But, the PPACA has helped a lot of people. In the interest of fairness, we should spend a moment or two discussing a few of those victories. All of these examples are from last week. And all involved Republicans. Key details have been changed to protect the identities of all involved.

Bruce has been self-employed for over ten years. He was covered under his spouse’s health policy. When they divorced, he took full advantage of COBRA for the entire thirty-six months. The story then gets murky. Either a bad agent sold him a crappy policy or he cheaped out and purchased something that did not meet his needs. Either way, his health got worse, the mediocre policy didn’t pay for his care, and the premium became unaffordable. Bruce is now an unhealthy 56 year old with no insurance facing possible surgery.

Bruce will qualify for the Ohio High Risk Pool policy. The premium isn’t cheap, $428 per month. It would be far worse if there wasn’t premium support built into the legislation. The Ohio High Risk Pool is not for everyone. Not everyone qualifies. The rules are complicated. But the PPACA is a lifeline for Bruce and he wasn’t the only winner last week.

Jane is another Ohio High Risk Pool winner. She is 61. Jane was terminated by a major local employer last November. She could have been covered through COBRA if she could have afforded it. She couldn’t. She has a number of preexisting conditions that would result in an automatic decline if she applied for individual health insurance. Jane qualifies for the Ohio High Risk Pool policy and the $428 premium may be a challenge, but she has had a year without insurance. $428 is a gift.

The Ohio High Risk Pool plan is not placed through an agent’s office. I have nothing to do with it and I am not compensated for helping people access this insurance. Educating the uninsured is just part of doing the right thing.

Amanda has four sons, two in college, one in middle school, and her youngest is only 8. They are all healthy except for Billy, age 14. Billy is in remission, thank G-d, but he has had hundreds of thousands of dollars of medical care. He might not require additional expensive care. Who knows? I would have had a very hard time covering Billy three years ago. Today? No big deal. Amanda is healthy. The insurers will readily approve her. Billy and his brothers will go through underwriting to determine price, not insurability. The price will be a little higher, but the cost of insurance won’t even begin to reflect the potential cost of care.

The PPACA allows Amanda to purchase affordable health insurance for her entire family. To deny this is to deny reality.

I completely understood why the elderly couple was afraid. All day long they are bombarded with solicitations for different Medicare plans, pleas to support candidates who will fix Medicare, and television reports that the sky is falling. Whatever healthy skepticism they may have once had has been beaten down by the constant repetition of the same facts.

The elderly couple came to my office to be protected. What they need was to be reassured.  


Beneficio adicional por Hospitalizacion

Monday, October 22, 2012
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Collateral Damage

Monday, October 1, 2012
It was 1986. A bank opened about ten new locations in the Cleveland area. Somehow or another I ended up as the life insurance agent for many of the branch managers. The bank’s marketing department decided to brand these guys as Financial Planners. I was sitting with one of my clients in his branch, a kiosk inside the Kmart at 260th and Euclid (did I forget to mention that all of these new branches were inside Kmart’s?) and laughed at the idea that he and his peers were Financial Planners.

A Financial Planner is a stock broker with delusions of grandeur or an insurance agent with low self-esteem.

It would be years and years before financial professionals like my partners Jeff Bogart and Kathy Browning would embrace the concept of fee based money management and financial planning would no longer be just another way to sell a policy, a loan, or an annuity.

I bring this up not to laugh at the wide variety of people, qualified or not, who call themselves Financial Planners, but to remind you, dear readers, that in America anyone can claim to be an expert on anything. And in this age of disinformation overload, your email inbox and Facebook news feed are a constant source of rumor, innuendo, and out right lies.

The health care debate is a prime example.

This blog has consistently contended that the Patient Protection and Affordable Care Act (PPACA) is a poorly written law that fails to address our biggest problem, the cost of care. Badly written laws lead to poorly crafted regulations which are a disaster in execution. The unintended consequences are the people who fall through the cracks, in essence, the collateral damage. Today’s post is about a couple of these casualties.

But it is important to note that the way to solve the inherent problems of the PPACA isn’t to scrap it (which isn’t going to happen) but to amend it. If you got lost on the way to Cedar Point would you turn the car around and take your kids back home, or would you stop, get directions, and get on the correct road? We need to correct our path. We need to amend the bill.

The politicians and functionaries that created and backed the PPACA either have a different, unstated agenda or are just lost. Twice in the last few months I have had to deal with the consequences of a health care bill that ignores health care and costs and instead focuses on insurance reconstruction. They are my examples of collateral damage.

The new law made insurance coverage on children guaranteed issue. We can’t deny any child coverage regardless of his/her preexisting conditions. So if we are taking the parents, we have to take the kids. That part is fine, but the other part, the part that was easily predicted by anyone who understands the process, was that the legislation eliminated “Children, only” policies. That is a huge problem.

Some employers don’t choose to pay for the health insurance coverage of dependents. I was able to save families, usually lower income or middle class, a lot of money by writing policies that covered just the kids. If there was an unhealthy child, he/she would stay on the parent’s coverage. That, however, is a discussion of choice and savings. What if there isn’t a choice?

What happens if someone is a single parent? What if that individual is severely ill or injured and after a year plus of treatment is granted Medicare? Who covers the kids? The quick answer – NO ONE. There isn’t a regularly priced major medical policy in the marketplace for a couple of healthy children. After considerable time and research I was able to find a short term catastrophic major medical policy. I have used this option twice in the last few months and shared the information with my peers.

The new Summary of Benefits and Coverage (SBC) regulations kicked in last week. We are just learning how this will impact employer based health insurance policies. We know that this regulation will help people find out what is and isn’t covered under their health insurance policies. We also know that it will prevent employers from changing policies quickly if their business environment forces them to cut costs. That second point is significant. Restructuring benefits, with the same insurer or with a different company, is how many of my clients were able to retain employee benefits during this last recession. What do we do now? No one knows.

The PPACA is a classic example of the blind leading the visually impaired. The experts in Washington, like many so-called Financial Planners, are self-anointed. Without a clear understanding of how their goals impact the average American’s realities, we have laws that may be well-intentioned, but have real, negative consequences for lots of us.
And do you know what we call those Americans, the ones who suffer from the mistakes of others? Collateral Damage.