Health care update, Friday, Jan. 29, 2010
Preamble to most recent chronology
Every year or two, when the headache from the previous year's healthcare investigations has abated, I once again look for some sort of exit from the rat trap of American Health Insurance for Self-Employed People Who Have Made the Mistake of ever taking any kind of prescription medication or ever receiving treatment for any kind of condition.
Very quickly, I find myself ensnared in the mind-numbing "head's I win; tail's you lose" bureaucratic minutiae rigged for the endless benefit of those who profit from our system.
Writing about this, I know, is a lost cause--in large part because it is hard to conceive of a more boring topic, nor one less likely to attract the attention let alone empathy of the vast majority of my fellow citizens who are not yet being so overtly screwed.
Nevertheless, I cannot help myself from jotting down this year's exercise in head-bashing. The rat trap, alas, for the most part holds; I have found some possible crannies that represent possible exit points, provided I gnaw away feverishly and indefatigably enough. However, even if I do manage to get out, it is almost impossible to spy from inside what lies on the other side.
I am expiring slowly within the trap, but are these possible exits--if they are, indeed, real and not an illusion--booby-trapped with guillotines? The question from the start remains the same: which is better--death by the installment plan, or a more sudden and catastrophic demise?
On Monday, I decided to look for other options because we are running out of money with the status quo. Insurance premiums last year: $20,500, add in out of pocket costs and it goes up to nearly $24,000. My gross writing income was less than $65,000 before expenses. We also pay $25,000 on property taxes. Bottom line: unsustainable.
My first step was to call BC/BS of MN to find out what we have and if any of the terms can be altered in any way to make it more affordable. For $1711.50 a month, the four of us have $500 deductible each, with a total family deductible of $1500 after which the company pays 80 percent up to $5000, then a lifetime cap of $5 million, no annual cap.
Ben and Jack can stay on the plan till they are 25 unless they get married.
At the outset, I was told that I was on a recorded line. I told the customer service rep I was recording the call, too; she said that was okay.
She said that because we no longer live in MN, we can't change anything, but that we can do an interplan transfer to Western PA's BCBS affiliate, Highmark, and get something vaguely similar to what we have now, and then change the terms once we are in with the new company.
She said they could initiate the interplan transfer from MN.
ŸTo do this, we would need to send a request in writing with our address, id #, date when the new policy is effective, and our request to cancel the MN plan; sign and date and mail to BCBS of MN PO Box 64024, attn: Interplan Transfer, St. Paul, MN 55164. Or we could fax the letter to 651 662 6606.
At this point, I asked if BCBS of MN has any kind of in-house charitable foundation that might be able to help us. No.
At this point, I asked how they calculate our $1711.50 monthly payment. On insurance wallet cards the company sends out yearly, we do have a "group" number, but it turns out this is not the same kind of "group" enjoyed by those receiving "group insurance" and its manifold legal protections. The lady rep was not able to articulate in a way I could understand answers to my questions about the nature of this odd non-group "group" we are in, or whether we are, in fact, caught in a death spiral.
I then asked her about something I'd read someplace that insurance companies are regulated by law to give out in benefits some fixed minimum percentage of what they take in in premiums. I thought that for our plan, this percentage was somewhere around 74 percent. She maintained it was closer to 92 percent. I said that we paid $20,500 in premiums last year, and I was certain we did not get back 92 percent of this in benefits ($18,860) or even 74 percent ($15,170). She said that this is not how insurance works, that our risk is spread out over a bunch of people.
This, of course, made me return to my earlier question about who my fellow "group" members are, that is to say, who else is sharing this risk with me.
She didn't know and offered to give me the number of the State of Minnesota Insurance Commissioner: 651 296 6025.
I was, at this point, becoming testy.
I asked to speak to her supervisor.
She said no. I reminded her again that just as they were taping me, I was taping her. I reiterated my question more forcefully. "You are saying that I am legally prohibited from talking to your supervisor?"
She said that's not how it works, that the supervisor would not know the answers to my questions either, and that she wouldn't switch me to the supervisor to just ask the same questions.
I told her that I paid her company $20,500 last year and that I felt I had a right to know where the money went. I reiterated my point--"So you are saying I have no legal right to talk to your supervisor? You don't know what I am going to ask her. I might ask her different questions than I have asked you."
The customer service lady, who by now had been on the phone with me for 27 minutes, was getting testy herself. She put me on hold.
The supervisor answered several minutes later and was actually very kind. It crossed my mind that perhaps the company has hired soothing female psychologists with affable voices to calm down irascible hot heads like me. It crossed my mind that I am becoming increasingly paranoid about the machinations of AHIP. The supervisor reiterated that she did not know how my family's individual rate was calculated, but that it was true that I could not change any of the terms of the policy, that it was, indeed, a "take it or leave it" proposition because we are no longer residents of MN.
Note: I took out the policy in 1984 in St. Paul, where we lived for the next 11 years. Then we moved to PA in 1995, where a Highmark employee told us, in error in retrospect, that we could not do an interplan transfer and would have to apply for the prohibitively expensive high risk pool. We kept our MN insurance because, thanks to this false advice, we thought we had no other option.
I told the supervisor now that if we had to let our BCBS of MN policy lapse, we would not be able to be medically underwritten for a new policy because of preexisting conditions, i.e., the use of statin drugs and antidepressants by both my wife and me. She expressed her sympathy and thought that interplan transfer might at least provide some more options. In her soothing voice, she wished me well. Then gently slammed the rat trap shut.
2. Dan Williams, Minnesota Health Insurance Broker
My next call was to a Minneapolis-based broker recommended by my Minnesota friends, Eric Hanson and Faith Adams. They are both self-employed--he's an artist, she's a writer--and have two children. Both Eric and his son have a pernicious form of genetic arthritis that makes it impossible for them to get coverage through private insurance. Faith and their daughter have no such preexisting black marks on their health resumes. Their broker, Dan Williams, was able to get the males covered by an affordable (though far from ideal) state-subsidized program; and the females an affordable policy through BCBS of MN.
Dan answered my call on the first ring. I identified myself, outlined my predicament, and he immediately said that he thought that we could, in fact, alter the terms of our plan, even though we were out of state. He offered to call BCBS of MN for me, using a special broker line, and get back to me. Five minutes later, he called back with the bad news: I was right--we can't change the terms.
Then he suggested that what we could do is take our sons off the policy. Neither has any pre-existing conditions and thus could qualify for their own much cheaper policies. He then suggested that my wife and I consider whether either or both of us should make the interplan transfer. I told him that I didn't think we were allowed to change who was on the policy, that BCBS of MN had made it clear over the years that no changes whatsoever are allowed. Dan said that he was sure we could drop individuals from the policy and said he would call back on the agent line to make sure.
Five minutes later, he called to say that we could, indeed, remove any of us from the policy and that whoever remained on it would still get his or her current coverage for their share of the premium amount. This is the first time anyone had ever explained that the $1711.50 per month is actually being broken down into individual amounts per person. Dan said that we are currently paying this:
Jim, age 57, nonsmoker: $689 per month
Debbie, age 52, nonsmoker: $548.50 per month
Ben, age 21, nonsmoker: $237 per month
Jack, age 21, nonsmoker: $237 per month
Total: $1711.50 a month
Just learning this fact, which no one at BCBS of MN had even hinted at over the years, was highly eye-opening. My kids almost never go to the doctor except for sports physicals, and have been this way for years. I almost never go the doctor either unless a visit is required to get a prescription refill (I went nine years getting refills by phone till my doctor finally insisted I have to come in and see him). Debbie goes to doctors more often, but usually just for Pap smears, mammograms, and the like that are so often recommended. Our coverage, of course, doesn't include dental or vision. So we have been paying $5,688 a year for our sons, who basically don't use any of it.
Dan recommended looking at our interplan transfer options in PA and see if the entire family should switch, or that we might be better off with some sort of mix-and-match strategy of some of us transferring and some of us not. He said that since both sons are healthy with no preexisting conditions, we should at the very least get them their own policies.
Again, I can't tell you how irksome it is to discover that we have always had the legal right to peel the boys off our family policy and save money this way. After being on the phone earlier with BCBS of MN for nearly an hour, neither the first customer service rep nor her supervisor every mentioned this possibility. It was only through a recommended broker's assistance that I know of this option now.
I thanked Dan and asked him if he could become our "agent of record." He said he would do this to help with the interplan transfer, should we elect to do this, but once transferred, he would not be able to represent us in the PA.
I started a poll/thread on health insurance costs at the United States Masters Swimming web site. No doubt in large part because of my own frustrations, this eventually devolved into a bit of a political shouting match, with the Ayn Rand free marketeers taking the Republican "kill this abomination" approach to Obama's reform, and those who have been injured by the system siding with me--i.e., the system has to be fixed.
3. Miscellaneous advice gleaned from miscellaneous parties
Based on 65 or so respondents to my poll, less than 5 percent of us pay over $1500 a month. About 86 percent pay less than $1,000; 70 percent pay less than $500; and 19 percent pay less than $100. Very few of my swimming peers, in other words, are getting screwed in the kind of obvious way that imperils their ability to, say, hold onto their house. I can definitely understand how some of those in a better position might feel some lip service sympathy for my plight, perhaps even genuine compassion for those much worse off (i.e., unable to get insurance at all), but would rather not spend as much time on the subject as I have been spending of late!
Some of the more obnoxious bits of advice I have received are: to move to another state with better insurance laws; get a job at Starbuck or similar corporate setting that provides health insurance benefits (this in the middle of the worst recession in our lifetimes, when there is one job opening for every six people looking); and to try to get an association policy--as if this latter had never occurred to me. (What most people don't seem to understand is that associations are not companies.
The way our system is based, group coverage is dependent on working for a company that chooses to provide insurance to its workforce. It is illegal to form any other kind of group "for the purposes of obtaining group health insurance." What associations usually offer are HSA plans with huge deductibles, but which nevertheless still require medical underwriting. Because of the huge deductible, the underwriting requirements may be looser, but they are still there. And even with this, you still pay huge amounts for, at best, uncertain coverage.
When I talked to one company, for instance, that insures free lance writers, I learned that for $864 a month, my family might qualify for a $10,000 deductible policy with all sorts of limitations. It's a big might, however, because my wife and I both take statin drugs and antidepressants prophylactically--that is to say, to reduce the risk of heart problems and to keep emotional problems at bay.
Why preventive medicine should be held against us, I can't pretend to understand. And even though this association policy seemed to me far from ideal (and far from certain we could qualify), I was set to apply anyhow. This is when yet another broker told me she stopped recommending this company after they approved one of her clients and then rescinded him a year later when he got cancer.
Sometimes you just want to scream to people who have not had to do this: There is no simple solution to this mess. If there was, people would know about it, and everyone in this boat would not have to spend half their lives researching options.
My swimming friend Loren H. has an insurance agency in Hollidaysburg, PA, which is in a different BCBS zone of Pennsylvania from us (it is like the Balkan states here). Nevertheless, at a recent meet he told me a couple things of note. First, as long as you pay $10 a month towards a hospital bill, no matter how gargantuan this may be, they are legally barred from siccing the credit agencies and debt collectors on you. Once you die, the debt goes away. They cannot go after your house, and they cannot go after you retirement money. He didn't know if they could go after other assets such as other rental or commercial real estate. I will have to look into incorporation to protect this. To be honest, Jim Thornton the "person" is pretty much at the end of his useful life. Jim Thornton, Inc., on the other hand, can't wait to begin enjoying whatever new advantages our Supreme Court has decreed we deserve.
Loren also advised adding a $1 million hospitalization rider on our auto insurance. This would help pay in the event we were injured in a car wreck. This sounds like health insurance, but it's actually a form of accident insurance. One of the most likely ways any of us are to suffer catastrophic health problems, he says, is through vehicular misadventure of one sort or another.
So I called up my car insurance agent, and she told me that to add this would cost $140 extra a year for all four of us. She was pretty sure it also would cover us in the event that we were injured as pedestrians. I said, "What if I am driving along and have a heart attack that causes me to crash?" She said she didn't know. I suggested that I could try to claim later that I had the heart attack as a result of crashing, not vice versa. It would be hard to disprove, I'd imagine. Then again, that's why insurance companies have young lawyers that can delay things till you're dead.
(It turns out, alas, that my trips on my beloved Honda Metropolitan gas-sipping motor scooter are not covered. I will have to drive more carefully in the future. Risk homeostasis: factor this newly discovered factoid into long term memory.)
I next emailed Alan Katz, a health insurance broker in California and author of the Alan Katz Health Care Reform Blog: Reform From One Agent's Perspective. I made Alan's acquaintance while researching an article on health insurance for the self-employed and quickly became a great fan of his blog. Many if not most of his readers are fellow brokers who appear rabidly against any form of reform that reduce their own professional role as Cumaen Sybils who understand how to navigate through our broken system. I have nothing but respect for these navigators; on the other hand, I find their generally anti-reform stance at times self-serving. If the system were fixed, their navigational prowess will not be so useful anymore. This doesn't seem to me, at least, a good reason to keep the system broken. I am sure the Buggy Whip Manufacturers Guild was not all that eager to see cars invented. But enough. Here is the recent correspondence with Alan:
Jim Thornton here, your great admirer who happens to be also a victim of the current healthcare insurance status quo.
First of all, I apologize if some of my recent postings on your always excellent blog have been a bit heated lately. I just find myself so steamed by the slavish allegiance of certain right wingers to “the market can do no wrong” ideology. Many of your readers, I suspect, are Republican brokers who face a double whammy if any meaningful reform ever passes. I suspect they fear the potential for losing income if the current system ever becomes understandable by the average person.
I have two masters degrees, and I have spent much of the past three days doing little more than researching my options. I know my situation is complicated, but it seems odd that you have to be on the phone for 45 minutes with a health insurance representative before they tell you info that is actually usable.
I could go on ad nauseam regarding the details here, but with the held of a broker in MN, I began to discover some of my options that my current insurer never mentioned, let alone explained.
Anyhow, we are looking to do an interplan transfer to PA, where we now live. Alas, the very helpful MN broker can’t help us in PA. I am wondering if you know anybody who you trust in the Pittsburgh area that would be able to help us weigh our bewilderingly complex array of options.
Thanks so much, and keep up the great, great blog. You might not enjoy this comparison, but your unflappability in discussing this topic does remind me a little of President Obama, who seems to be able to keep a cool head despite whatever criticism is heaped upon him. Some Democrats don’t like this. I think that civility is the only chance we have, even if I am unable to muster it myself.
First, I enjoy your posts to the blog, even when they’re heated. You bring a refreshing honesty and passion to the blog along with an absolutely critical perspective: someone who is getting screwed by the status quo. So thank you.
Second, thanks for the kind words about the blog – and I’m delighted it reminds you of the president’s style. I think he blundered, but I’m still a supporter and glad that he’s there. So I take your words as high praise.
Third, I unfortunately don’t know any brokers in Pittsburg (sic) very well. My advice is to check out the NAHU membership list and search for a member in your area (I don’t even know the names of the suburbs of Pittsburg (sic), so I can’t narrow the search down below the Pennsylvania level. You’ll have an easy time of it).
Then check their web sites and see how you feel about them.
The other way to find an agent is to ask friends if they know a broker they trust.
A third way is to call eHealth – they have brokers who should know both MN and PA. The operative word being “should.”
Local, independent brokers are usually far superior than those in a call center.
Sorry I can’t be of more help with this one. Now, if it was someone in California ….
Good luck, and again, thanks,
4. Highmark BCBS of Western PA
At this point, I would like to find a reputable broker in our area to provide advice on what to do. The MN plan is set to change rates in April. It is possible our rates won't go up; it is even possible they will go down. However, neither such scenario has occurred since I first bought that policy in 1984. From the beginning of 2006 to today, it has gone up from about $950 per month to over $1,700. I would not be surprised if the next rate increase takes it to $1,800 per month or more by April. If not this year, soon, we absolutely will not be able to pay.
I called up Highmark to see my options through the guaranteed interplan transfer, where we would not be subject to underwriting. The choices are bewildering, but the bottom line here is something called PPO Blue. For $1200 deductible, Debbie and I could get this for $582.15 each per month. (Note: this is less than the $689 I currently pay MN, but more than the $548.50 Debbie currently pays MN. The new deductible goes up from $500 to $1200--a terrible deal for Debbie, and a debatable deal for me. Our kids would probably be able to qualify for their own separate high deductible policies at around $68 each, much better than their current $237 if they don't need to use it--which, so far, they haven't.) Debbie and I could further reduce our monthly rate by increasing the deductible to a maximum of $3500 per person. This would cut our monthly premiums to $494.45 per person. (Note: our current policy lets each individual exhaust his or her own deductible, then the 80/20 coverage kicks in for that person up to $5,000, at which point the insurer pays for everything. Looking at the fine print of the "comparable" Highmark plan, however, I see that the whole family deductible must be met before any individual starts getting the 80/20 coverage. This is one of the many hard-to-understand and not-immediately-obvious fine print aspects that make an apples-to-apples comparison very difficult for us laymen to undertake. Moreover, it just seems sneaky and underhanded to bury this significant difference in the fine print.)
On the positive side, the above Highmark plans are HSA-eligible, which allows you to contribute pre-tax dollars. The problem with this is there is only so much blood you can squeeze from a turnip. We are living, in part, off a home equity loan now; to borrow more money to contribute to an HSA seems of dubious value somehow. Moreover, we can deduct our premiums now; reducing the premiums (albeit slightly) would mean less deductions, since we cannot deduct out of pocket costs. All this seems of marginal benefit to someone who is not terribly well-heeled at this stage of life, and trying to put two kids through college and save for retirement.
The Highmark agent then mentioned a state-subsidized plan based on income and called AdultBasic. The problems with this are: you must be without health insurance for 90 days (I was imagining myself spending the next three months in bubble wrap); your income has to pretty low; the waiting list is over two years long. However, if you qualify, you can pay the full cost of this insurance while on the waiting list. For a family of 3 (my older son is now 21 and can't qualify), the cost is about $380 or so per month. If you ever actually get on it, it's $37 per month. I asked how much income we could make and still qualify. He said for a family of three, the limit is now $36,620. I asked how they determine income--is it gross adjusted, or something else? He didn't know.
I called the state office for AdultBasic in Harrisburg, PA and learned that income is what appears on line 37 of your tax statement.
I called my accountant to find out what our line 37 was last year: $41,463. This year, my gross writing income is down by a little over $30,000, so it looks almost certain we will qualify. However, even if we didn't, it is clearly in my self interest to earn less to qualify for state assistance.
I called back Highmark and they told me about another state-assisted plan through Highmark itself. This one is called SpecialCare. The new rep told me that he thought we would be able to qualify for it, and that he thought (but was not absolutely certain) we would neither need to be uninsured for 90 days first, nor have a year where no preexisting conditions would be covered (despite the fact that Highmark's promotional literature lists both these as likely.) The rep explained that we would have to do the interplan transfer first, then switch to SpecialCare once underneath the Highmark umbrella.
The good news here is that my wife, younger son, and I would have to pay only $368.50 a month (I think this is for the three of us; Jack might be more). Our other son, who is over 19, would not qualify, so we'd still have to get him his own policy. Once Jack turns 19, he too would have to get his own policy.
The bad news is the policy doesn't cover very much. We get 4 doctor visits a year max, but only if we are injured or sick. We can go to the ER. Debbie gets a pap smear and mammogram once a year. We get a vision exam once every two years. No other preventive visits are included. We get up to $1000 for diagnostic services per year. We get 21 days of hospital coverage. After 90 days, this resets and we can go in for another 21 days. Nothing else is covered, so we would have to go on all generics and/or make occasional trips to Canada.
As of now, this seems like the best of a bad situation. I do, however, have a number of questions, and the Highmark reps and their literature seem to be saying different things. Do we have to go 90 days without coverage to qualify? If we get on SpecialCare and later our income goes up above the maximum allowed, can we switch to some plan within Highmark that does not require underwriting? Could we, in other words, go to the PPO Blue described above? If one of us did need to be hospitalized, say because of a coma, what happens after 21 days? Can the hospital administrators legally force us to stay in till we have been bled dry financially? Or could I put in writing somewhere right now that the nanosecond my 21 days are up, I demand to be taken to the curb and deposited thereupon to die with dignity and not one more cent being siphoned out of my brain-dead (though still arguably animated) corpus?
Ah, American healthcare! Legal to charge your estate for $10 aspirin; illegal to commit suicide (or have someone aid you in this direction if you are no longer able to accomplish it on your own)!
Assuming we do qualify for SpecialCare, as spotty as the coverage may be, and assuming the hospital and doctors of the world cannot keep us incarcerated once coverage runs out, what should we do?