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September 07, 2005
POLICY/HEALTH PLANS: What to do about coverage in Katrina's diaspora
Ezra Klein has an article up the thorny problem of how to get health coverage or continue it to those who have been displaced. Ezra suggests extending COBRA to all of them. The major problem there of course is that proving who worked where is going to be a nightmare, and with no income many people won't be able to afford COBRA (or any other kind of insurance, just before you jump in Ron!), and those employers that won't survive Katrina or which are already effectively finished, will not be able to make their monthly premium payments -- which will at some point mean the end of those employers' plans for ex-employees to buy into using COBRA. This solution may though work for those who have stable employers and have coverage that the employers are continuing to pay for while they're effectively laid-off or have the money to buy an extension of that employer's coverage (even if the employer itself is no more) if the insurers can be persuaded to allow that (which I'm sure under the circumstances they can).
For everyone else (which is probably the vast majority) Ezra basically suggests what seems to be the current prevailing thought. Let those people go on Medicaid in whichever states they end up and let the states make sure that the Feds pick up the tab as part of the overall disaster relief effort as promised.
Of course this is one more reason why a simple national universal insurance system would be a better way of handling things. If everyone was covered then providers could give services in the certainty that they'd get paid. Don't forget that this will be the situation for those who are over 65, as Medicare is a national system (albeit administered regionally).
And at the least Katrina has uncovered the ugly secret of what it's like to go without in America today....and going without health care coverage is a big part of going without.
I have never purchased COBRA in between jobs because I had no way of predicting that I would have a new job before the unemployment checks ran out. The unemployment checks themselves are, of course, only a fraction of the low income I normally make. This is the prudent thing for someone like me to do. Though I risk having no cushion when I'm sick (risk factors in higher likelihood due to genetic disorder), I have to weigh that risk against the more primary needs to cover food/rent for an extended period. At this time, I haven't worked for over two years, and I'm not eligible for any personal disaster relief, much less widespread public sympathy, lol. :-)
There is a valid complaint that when I get sick, I fall back on public resources. However, when I run out of rent/food money, I will also fall back on public resources. I think I read somewhere that resources for the homeless cost around $40,000/yr. per person (while the public would be outraged just to pay out $20,000 in cash). Therefore, I am saving the public more money by trying to hold out on my own funds for as long as possible and falling back on the ER for the occasionally medical problem.
I'd like to underscore that this approach hurts me more than the injury to the public purse. There is no consistent tracking of my medical record or diagnosis of ongoing problems: only emergency band-aids. Last year I lost a small patch of my vision (permanently) - and this loss will inevitably grow (but hopefully slowly). The tide of this problem could probably be stemmed by regular visits to the ophthalmologist and various medical interventions. However, I'm not in the class of people who gets that.
In my more paranoid moments, I suspect the cold hand of State Efficiency at work here: it's actually in society's interest to kill me off now so I won't be a public burden once I'm blind. I had disabled friends in grad school, and one of our frequent discussions pertained to how there seemed to be some background logic that discouraged "bad investments" in people who would have a shortened working career.
Posted by: gadfly | Sep 7, 2005 2:46:33 PM
Joe Paduda had a post up about a conversation with Donna Shalala in which she spoke about the merits of single-payer (without ever endorsing it), and I left a comment similar to your editorial. Katrina shows how much easier this would be to coordinate if there were a guaranteed federal payer for everyone.
Posted by: Abby | Sep 7, 2005 8:47:03 PM
The bureaucratic gaffes at all levels during the ongoing disaster should, and repeat should, be giving everyone pause about investing complete control over health care delivery in the government.
Everyone also ought to realize the fact that food, water, and shelter are more basic than healthcare. Given the logic in the above comments, perhaps nationalization of food, water and housing (and while we are at--- transportation) is the answer?
Posted by: Eric Novack | Sep 7, 2005 11:56:44 PM
Don't think for a second that ezra was smart enough to understand Katrina's health insurance ramifications. A couple of days ago when he was bashing the President, I posted Katrina's problem with mandated employer coverage, which of course he deleted. I was the first to post on this thread too, which he deleted again. But I did send him an e-mail, that was returned to sender, but here it is:
Your comment that most LA people have employer based health insurance comes from my post that you deleted yesterday. Now you use these words today and It almost sounds like you know what you are talking about, fat chance.
Today I commented:
Ezra, you know that businesses that were wiped away by Katrina and all their employees must now lose their health insurance. It's the law. Government mandates insist that employees have a dangerous group health employee plan that is terminated, without COBRA extensions.
People would learn more if you would quit deleting my posts and then say YOU have a good idea. Remember, it was Democrats that took the freedom and security of individual insurance away from employees in the first place. If I were you I would delete this post too.
The last thing you need is for someone who knows the law, like me, commenting on your health care posts.
Posted by: Ron Greiner | Sep 7, 2005 6:57:16 AM
In the main stream propaganda this issue has not been raised. Today, another storm is off the Florida coast. Matthew, you should write a letter to the New York Times and break the news about Katrina and employer based coverage. This is the perfect opportunity for you to blather away about Socialized Medicine.
I want to thank The Health Care Blog for not deleting my post even if you disagree with my comments. This is a much fairer debate here than at ezra's controlled site. Also, I want to thank Matthew for being much more interesting than ezra. ezra pretends he has a clue but clearly that's not the case.
If you do write to the New York Times Matthew, don't say you think COBRA could be extended for those that don't qualify, that's goofy. The best solution would be to give employees more choices, more options, more freedom, including the security of individual health insurance so they may be save, if they so choose.
Of course if that did happen you can kiss those Group Health Plans goodbye and pray for those shareholders.
Ezra beating all others in the press, get real.
Posted by: Ron Greiner | Sep 8, 2005 5:32:17 AM
I will ignore Ron's comments about "state mandated dangerous group health" since he really has no clue about how the overall third party payor system works. Maybe eventually the light will come on . . .
This is a cataclysmic problem, not just health care, but economic. For some reason few seem to want to really analyze this issue from the roots up.
Somewhere personal accountability must come in to play. While the residents of the affected gulf states had no way to prevent this natural occurrence, many of them did have the option to leave, but they chose not to.
It has been said that many (most?) American workers live paycheck to paycheck, whose fault is that? Monies should have been set aside for contingencies (not just hurricanes) but they have not. Why is it the responsibility of the govt to step in and fill a void created by an unwillingness on the part of some to attend to their own needs. In a Socialist nation, it IS the responsibility of the govt to take care of their own. Last time I checked, this is a Republic in which individuals are allowed to decide how to best use their resources.
To get back on task, no one has yet produced evidence a single payor system works in an efficient manner. Medicare is reasonably sound for now, but once the Rx program kicks in it will be interesting to see how long it lasts before tinkering with benefits and costs have to be reviewed and adjusted.
Medicaid, a federal program administered by the states, is a joke in most areas. Many states are revising eligibility to exclude participants because of a lack of funding. The most infamous is of course TennCare which is bankrupt.
For those who cry for a single payor system, I have this to say. Until the current taxpayer funded system is fixed, there is no way to assume adding to those roles will improve the delivery system.
Posted by: Bob | Sep 8, 2005 6:04:05 AM
You wrote, //I will ignore Ron's comments about "state mandated dangerous group health" since he really has no clue about how the overall third party payor system works. Maybe eventually the light will come on . . .//
Really Bob, I wear a ring from the largest individual health insurance carrier in America for producing more business than any other agency in the country. Tell us please what your experience is. I will admit that today my wife is the General Agent and I did not get yesterday's call from the V.P., but she did, figures.
If you are so knowledgeable Bob, please inform us all which state allows employers to purchase individual insurance on employees?
I also assume you understand when an employer goes belly up the employees, including the owners, lose their group health employee plan without COBRA extension.
I will e-mail you this question and maybe you will come back and answer. Please shed your so-called "light" on us.
Posted by: Ron Greiner | Sep 8, 2005 6:29:57 AM
My experience is 30+ years in the industry at the corporate level as well as 15+ in the reinsurance industry. During that time I have placed more premium, and covered more lives than you will in 10 lifetimes with your Fortis individual plans.
States dont prohibit or even regulate what coverage an employer can purchase for employees. That happens at the federal level.
COBRA is available (in most situations) until the group plan is terminated. Beyond that most (all?) states have mandated conversion coverage. About 35 have high risk pools when COBRA is no longer an option.
Those that are insurable have even more affordable options.
Singing lessons are now officially over.
Posted by: Bob | Sep 8, 2005 8:42:57 AM
Eric, don't fall for that argument. Reagan began it, Bush is propagating it better than anybody could have hoped/feared.
Don't you get it? Bush's plan is to make government as incompetent as possible precisely because people like you will then come in and say "see? you can't trust the government to do anything." Of course you can't trust the government to do anything when it is run in as spectacularly incompetent a manner as Bush is. "Brownie" is an idiot, FEMA is a joke. Government doesn't always have to do things poorly, you just have to commit to doing things well. Bush couldn't succeed in industry, but now his lack of success in government is viewed as a good thing by those who hate government.
Posted by: spike | Sep 8, 2005 9:09:08 AM
You wrote,//My experience is 30+ years in the industry at the corporate level as well as 15+ in the reinsurance industry. During that time I have placed more premium, and covered more lives than you will in 10 lifetimes with your Fortis individual plans.//
Selling group health plans huh? I hope you are telling employees if they become too sick to work they will lose their health insurance after a short COBRA. Then you probably say, "But then there is conversion." I hope you disclose that these conversion policies have different benifits and premiums. One goes up and the other goes down. Consumer Reports said it best when they said, "(large insurance company name deleted) top of the line conversion policy pays a maximum of $300 a day." And of course the cost is extreme. Let's see, 10 days in the hospital and a $94,000 claim and what is $300 X 10? The people will be a bit short. But you know that. Get insurance from Bob and end up on the State's uninsurable pool and pay through the nose, if your state has one.
You are correct Bob with//COBRA is available (in most situations) until the group plan is terminated.//
That is exactly what we are talking about with Katrina.
Not one of my clients has ever lost their insurance because they are too sick to continue to work. Please tell us Bob how many of your clients have lost their insurance because they met you.
Group salespeople like you Bob always say don't worry about that cancellation clause because of the State's uninsurable Pool. There is one commentor here who informed us the Uninsurable Pool in Texas was $800 a month for just her single coverage.
Now you know why I call Group Health Insurance agents "Merchants of Death".
And Bob, you will never catch up to me with individual insurance.
Is that Bob Vineyard selling "Basic Plans" you, that I e-mailed to you?
I hope not. This Bob's coverage is pretty poor.
Posted by: Ron Greiner | Sep 8, 2005 9:57:04 AM
And Bob Vineyard,
Why was Michigan messing around with "small group reform" if state's have no say?
Posted by: Ron Greiner | Sep 8, 2005 10:01:29 AM
President Bush as the Governor of Texas signed a "small group reform" bill that reduced the number of employees down to 2 before the outlawing of individual insurance.
Are you absolutely sure this is true what you wrote? //States dont prohibit or even regulate what coverage an employer can purchase for employees.//
I wish you were correct because then I wouldn't need all these different "Employer Sponsored" forms from all of the different states.
Who was your biggest group health plan last year Bob?
Posted by: Ron Greiner | Sep 8, 2005 10:13:10 AM
Those of you reading this may not know that I had an open thread about Ron's postings last year, and by and large people were happy to leave him be. I as yet don't have an "ignore" feature on this blog (as say the Yahoo stock message boards do). So while Ezra may boot his comments, I won't.
However, I agree that some kind of portable non-employment based coverage is the best option -- and in every other country national health insurance is that option. Ron thinks that we should all have individual high-deductible plans. Forgetting the other issues connected with that, Ron tell me -- what happens when your clients lose their jobs and cannot pay their premiums?
Posted by: Matthew Holt | Sep 8, 2005 10:34:09 AM
Another reason to be concerned about those poor people who "won't take care of themselves" (with their 0 income). I've had a bad case of the flu for the last week (which came on top of an infection, for those obsessively following my adventures in uninsurance). That means I'm spreading the flu all over every time I go outside. Yesterday I had to go to the grocery story - I wonder how many people I infected then? Because I'm uninsured and my immune system was already compromised by the infection (a common problem for the poor/uninsured), the flu will probably last longer for me. My productivity and ability to participate in society (which, granted is low for me anyway - but not necessarily for other poor people) is minimal. If I had been temping, I would have infected everyone in the office because I didn't have sick days, or I would have lost my job because temps are expendable and sick temps are unpleasant to be around. I can actually see the scenario where the office workers go on Opray hand-wringing over the evil of sick people wandering out in public and infecting them, creating a huge public scare and random attacks of people who cough, without a hint of concern for why that person was sick in the first place.
Posted by: gadfly | Sep 8, 2005 10:58:24 AM
When an insured employee quits the employer usually calls and asked for their insurance to be terminated. We inform them that no one can terminate the employee's insurance besides the employee themselves. We then inform the client that they can continue the insurance if they so desire. Some people continue some do not. If they are sick they usually continue like the lady that I talked to yesterday. She has a very expensive condition and the employer has made HSA deposits, it was originally an MSA, and the balance is $4,000.
The only way she can lose her coverage is non-payment of premium. Because she is now uninsurable and can hardly stand I doubt if she and her husband will terminate her coverage.
I personally think that insurance companies should notify the state if insurance is in danger of lapse. Then the state could decide to pay the premiums or end up paying the medical bills. With this lady, who is not in danger of lapse, the state would rather just pay the premiums. The cost of her medication is extreme, thousands per month.
Posted by: Ron Greiner | Sep 8, 2005 11:04:09 AM
Spike- Call it my naivete, but I cannot agree with your argument. Remember that this president signed, and both parties in Congress passed, the single largest expansion of the federal entitlement system in 40 years with the medicare drug bill. I do not think- but please correct me- that you are suggesting that by expanding an unfunded endless entitlement, that President Bush wants to destroy the US... A little too conspiracy theory-ish for me.
I presume the upcoming investigations will not shed much positive light on local (democratic), state (democratic) or federal (republican) initial response. Those who suggest that increased centralized control- i.e. bigger federal government- will solve the problems, be more responsive, more cost effective, reliably save more lives- are sorely mistaken.
To draw from comments I have made previously, I would like someone to show me a large government program/ bureaucracy of any kind, that functions efficiently and is responsive.
Shameless plug-- this weekend on my show I interview Robert Moffit, director of health policy studies about the medicare drug plan. It is very informative. I also interview a nurse volunteering at the Phoenix Memorial Coliseum to provide care to evacuees.
Posted by: Eric Novack | Sep 8, 2005 11:42:21 AM
I saw at your site that Dr. Moffit was coming, congradulations.
Our advertising has started and so have the calls. I was training a new rep today and the first two calls were both paying over $2,100 a month for their family health insurance.
It sure costs alot for those people over 50.
Posted by: Ron Greiner | Sep 8, 2005 1:05:39 PM
Will Fortis cover when one applies for coverage with any of the following in their medical history? Here is a brief list . . .
AIDS, ALS, Autism, CP, CHF, Diabetes, Down syndrome, Hemophilia, MS, Pacemaker, Sleep apnea, Tourettes.
Well, I could go on but why?
Let me save you the keystrokes. Every one of these is a decline.
Yeah, that group insurance is dangerous coverage alright.
And thanks for posting the Basic Health link. I have quite a few diabetics covered, as well as those with heart conditions and cancer. Everyone of them would be declined by Fortis.
Posted by: Bob | Sep 8, 2005 1:42:03 PM
RE: paying premiums after losing a job. Its a lot easier to pay $150 a month (HSA Premium) out of savings than to pay $815 a month (group plan COBRA premium).
Posted by: rdg | Sep 8, 2005 2:15:11 PM
Bob, let us look at what you are selling from your own website:
Doctor Office Visits
Child Wellness Visits
$100 a day
Intensive Care Unit
$200 a day
Surgery (Inpatient / Outpatient)
$500 / $200
Please, you can call $100 a day in the hospital insurance, but this sucks. I'm so proud of you Bob. I have many clients with cancer as we speak. They are so lucky they met me instead of you.
Yes, every one of our commercials say - "Medical Underwriting Required." So what.
How much do you charge for your $100 a day plan? What ever it is, it's too much. This is the most pitiful plan I have ever seen. How do you sleep at night?
Posted by: Ron Greiner | Sep 8, 2005 2:39:48 PM
This is just an observation, and maybe it means nothing, but I do notice that every time Ron Greiner gives an anecdotal tale of woe, his new customer was always "paying $800 a month," "paying $1,200 a month," "paying $2,100 a month." It seems to me this gives us an idea of just who HDHP/HSAs are intended for. That someone can afford to pay more for insurance (whether they are doing so willingly or not) than I'm paying for my house payment, car payment and cell phone bill combined, tells me they are not a Walmart clerk or a waitress.
When someone comes up with a way that those kinds of folks can get decent, portable coverage at a price they can afford, then I'll believe you have the next great thing.
Until then, HDHP/HSA is to group insurance what compact cassettes were to 8-tracks -- evolutionary, not revolutionary.
Posted by: Rick | Sep 8, 2005 3:09:37 PM
For the most part, folks paying $800+ a month 1) have family coverage and 2) are either paying a COBRA premium (not always out of necessity) or have been with an individual carrier for so long they are now in the high risk block.
The HDHP is actually a throwback to the time when the CMM (comprehensive major medical) was first introduced about 30 years ago.
At that time most folks were conditioned into buying the base + major med plans popularized by BX. Those plans offered first dollar benefits for things like doc visits. This was before copays. Instead, you paid nothing for the office visit but were limited to 1 a month.
Most meds were paid by the consumer outside the health insurance. At best they were covered under the major med portion which had a (GASP) $100 deductible which only the REALLY sick ever had to pay.
Carriers wanted to find a way to eliminate low dollar claims (which were costly to administer) and introduced the CMM which had no first dollar benefits. The insured could only file a claim once the deductible of $100 - $250 was satisfied.
The result was about half the claim volume was eliminated and low premiums were available. One carrier offered a plan with a $500 deductible. Individuals could buy the plan for about $6/month single and $14 for family.
Very few were sold because, even though the premium was affordable most could never imagine having $500 in claims during the year.
Keep in mind we are talking the mid 70's, not horse & buggy days.
The plan stayed on the market for 2 - 3 years and premiums eventually started to rise. The CMM became more popular and eventually the policy was withdrawn from the market as other, similar plans with bigger name carriers caught up.
So the HDHP is a retro plan more than anything.
And for what its worth, the HDHP is available on a group basis. Many of my business clients are buying this kind of plan.
Individual clients will get the most coverage they can qualify for based on their medical history. Most will get full coverage, including coverage for pre-ex, and no riders, exclusions or waiting periods.
Family plans usually run in the $300 - $400 range for a comprehensive major med; $100 or less for single coverage. Typical MM deductible is $2500 and OOP is maxed around $5k on a major claim.
Posted by: Bob | Sep 9, 2005 3:58:05 AM
Bob is correct that a Group Health insurance plan would cost your family about $400 a month instead of your $150. A 55 year old family would pay a lot more on group coverage. I bet Bob's group clients are buying HSA Qualifying coverage this year. A recent survey reported 32% of employers will be offering "Consumer Directed" health plans for employees next year. It's an explosion.
Always remember, even if your coverage is so much cheaper than what Bob is selling, it's much more secure. If Bob's covered employees become so sick they can not fulfill their eligibility requirements, example: working "full" time, they will be put to a short COBRA and their insurance at $400 a month will terminate. I'm sure Bob is fully disclosing this flaw in his coverage to every single employee because in my opinion anything short of full and proper disclosure is a serious "Ethics" violation because Bob is licensed.
Some group health insurance salespeople never even talk to the new employees enrolling on the company's group health employee plan and instead allow unlicensed, untrained, HR people to explain their plan while the group health insurance salespeople spend their time playing golf. These fruitcake HR people are not bound by ethics, like Bob is with his license, when they "SELL" insurance to other employees. So basically, we have untrained, non-licensed company fruitcakes "Selling" insurance to uninformed employees without full and proper disclosure.
Besides, you have children and you have a dependent conversion privilege so if your child becomes sick or hurt they can keep their coverage at a majority age at "standard" rates, no questions asked. I know Bob isn't telling his group health employees, with dependent children, that piece of good news. If I ever met one of Bob's insureds, with children, on his less secure group health employee plans I would say, "Lucky they don't give tests to be parents because you two would of flunked, and your husband is a lawyer mame. Why did you even marry him?"
I assume you have as many lawyers as clients as i do Bob with your boast from yesterday.
Bob you really need to bone up on the tax free HSA and the "Ownership Society," it's the wave of the future.
Posted by: Ron Greiner | Sep 9, 2005 7:30:20 AM
Note to RG:
The correct spelling is Crohn's, not Crone's . . .
Posted by: Bob | Sep 9, 2005 8:04:00 AM
I know that. Did I mis-spell somewhere? My son has that, as you must know.
Lucky I didn't get my health insurance from you Bob. I'm sure you know that too.
Posted by: Ron Greiner | Sep 9, 2005 8:20:48 AM
I can give you two examples: Medicare (based on working in the billing and eligibility sectors of healthcare, I maintain that Medicare is the most efficient and effective payer to work with), and FEMA during Clinton's presidency. I'm sure there are many more. It's a ruse that government can't do anything well. Republicans have been saying it for so long, some people believe it.
Posted by: spike | Sep 9, 2005 8:29:45 AM
Whenever someone yammers on about "the government cant do something" I always contrast Fox with the BBC and ask them to take their pick.
Enough for this thread.
Posted by: Matthew Holt | Sep 9, 2005 10:04:28 AM
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