Phil’s Insurance Opinions

As you are probably aware I am from the UK and grew up under the National Health Service (NHS).  I left the UK at 18 years of age and had not had any real experience with the NHS prior to that time, other than terrible experiences with an NHS dentist before my parents decided to pay for a private dentist. But maybe I will save those details for another day.

However in the past few years I have heard anecdotally from family and friends lot’s of experiences of the NHS in the UK and also in Canada.

For the most part if a person has an emergent situation or a life threatening condition the service is adequate.  For example, when my Mom was diagnosed with cancer she received fairly prompt attention.  They lived in rural Scotland and for some of the tests she went to three different locations all within a 50 mile radius, between Dumfries, Glasgow and Edinburgh.  Dumfries as that was her local hospital 20 miles away and then Glasgow and Edinburgh for different specialist tests and equipment.

In the US we have far greater accessibility to technology where that amount of travel would be unusual. Look at little ‘ol Sequim where we now have a pretty amazing new cancer center with state of the art technology. Amazing.

A few years ago it was reported that Washington State with a population of around 5 million at that time had more MRI machines than did the whole of Canada with a population five times larger.

So, once your condition is diagnosed the treatment is somewhat comparable to the US, with frequently different results.  By that I truly believe that if a person is proactive about their health, conditions will be diagnosed sooner in the US than in the UK and that will lead to a better outcome.  For example, my father is 78 and to my knowledge he has never had his prostrate checked.

That is just but one example. The following comments are from the NHS web-site on Prostate screening and I find them utterly amazing

“It is in some ways a lifestyle choice,” says Dr Parker. “If you want to do everything to maximise your chances of living to a great age, and are willing to risk the side effects of treatment, then PSA testing makes sense.

“If, on the other hand, you are more accepting of your ‘allotted span’, and are keen to preserve normal sexual and urinary function, then you may decide not to have the test.”

Can you believe on the government run web-site they make it sound bad that you want to maximise your chances of a long life, and they then continue to talk about your “allotted span”.

According to the NHS web-site over 1.6 million women a year have a mammogram.  This is for a country of something over 60 million people.  It is available only to those women between ages 50 and 70, and even then only every three years.  Here is a link from the NHS web-site.  http://www.nhs.uk/Conditions/Cancer-of-the-breast-female/Pages/Screeningbreastcancer(female).aspx

I believe the same can be said for Canada.  We have a cousin whose daughter needed a heart transplant as an infant 10 years ago.  That surgery had to be performed in Toronto as that was the only place in the whole country capable of performing such a complex operation at that time.  The cousin became a bit of a crusader and activist and now 10 years later then are very close to having the capabilities for similar surgeries here in Vancouver as opposed to the other side of the country.

The area that I believe both Canada and the UK are lacking is in the treatment of non emergency conditions such as back surgery or hip replacement. The anecdotal reports of extreme waiting periods do have a basis in fact. The NHS has a handbook that outlines what are to be considered acceptable wait times.  The major one is 18 weeks to see a specialist, or 62 days if it is suspected you have cancer.

I don’t know about you but I don’t want to wait 2 months if the doctor’s think I may have cancer, do you???

I sincerely think that the UK system does a certain amount of rationing of services and testing based upon age etc, and this does possibly lead to what has been called “the death panels” in ObamaCare.  From a cynic’s point of view if the government can delay and postpone services it will lead to higher mortality, and if the same government saves money via either social security benefits or in the UK pensions, they have a financial interest and what I believe is a direct conflict of interest in your wellbeing.

My next email will be my opinions on The Patient Protection and Affordable Care Act or what the press call ObamaCare.

A CLASS Act Dies

I know what a depressing title for my first column of a New Year, but more on that later.

As I write this on January 1^st, I have just finished reading all the comic’s in the Sunday paper and was amazed at how many of them made reference to the Mayan prediction of the end of the year in 2012.  If you think that is a likely scenario then you have no need to read the rest of this article as this is about planning for a future hopefully beyond that timeframe.

In 2012 I will celebrate my 25^th anniversary as a licensed insurance agent, and I have a feeling that things are coming full circle.

When I first started in the insurance profession I was primarily offering Long Term Care Insurance (LTCi) which at the time was far more affordable than it is today.  At that time many professionals in the business were somewhat pessimistic in their outlook for the future as it was thought that the government would step in and mandate or cover LTC through either Medicare or another program.

In the ensuing 25 years many attempts have been made on both a national as well as a state basis with very limited, if any level of success.

First, let’s look at the problem.  People are living longer and while most will have a far healthier lifestyle, of those who make it into their late 80’s many will require some level of assistance. Medicare does not cover LTC. Medicare will cover you fully for 20 days, and offer limited coverage up to 100 days for care in a Skilled Nursing Facility, but only if you meet the stringent requirements of three days of prior hospitalization as well the needing skilled nursing. Medicare does cover limited Home Health Care with very real limitations.

Medicare does not cover custodial care if that is the only level of service you require.  Custodial care is when a person requires assistance with Activities of Daily Living (ADL’s). These ADL’s include things like bathing, toileting, transferring from bed to bathroom etc.  These are services that are usually performed by persons who have had minimal training.

Medicare does not cover Assisted Living Facilities, where a person generally have their own room, and can ambulate themselves to the dining room etc.

Four attempts of government influence have been as follows.

In the early 1990’s the IRS created a provision where plans that were designed to be Tax Qualified allowed for LTCi premiums to be included as medical expenses and thereby be eligible for a tax deduction if a persons eligible medical expenses met a certain threshold.

This provision did stimulate for a short period of time increased consumer participation in the purchase of insurance plans.

Secondly the federal as well as several state governments (including Washington) introduced an LTCi plan that was available for employees on a Guaranteed Issue Basis (no health questions) as with limited underwriting for spouses and additional family members.

Thirdly state governments have implemented various attempts to encourage the purchase of LTCi plans.  In Washington Gov. Gregoire sent a letter to all state residents over the age of 50 urging them to consider the purchase of LTCi.  This had a very minimal impact as it was a suggestion or a recommendation with no incentives for the public.

A number of other states have introduced what are called Partnership Plans, where if a person purchased a plan with let’s say $300,000 of benefits, the state would allow that amount to be exempted as assets in the situation of a LTC confinement and application for Medicaid benefits. This has met with greater success as this has a very real and tangible benefit to policyholders.

Lastly and this is where the title of the article comes from. President Obama had introduced a program called the Community Living Assistance Services and Supports (CLASS act).  This bill was to mandate the compulsory purchase of a limited LTCi plan by all employees, both in the public as well as the private sector.

The twin goals of the program was to provide meaningful benefits at a reasonable costs.  These goals were basically incompatible with each other, as with everything in life, you get what you pay for.

This bill was repealed on November 30^th, which by a strange coincidence was the final day of the annual National Long Term Care Awareness Month.

So folks, the news is that you are not alone as millions of other middle class people are in the same boat as you.  How do you plan for a catastrophic personal expense, you hope you will never face.

The costs of care is expensive with assisted living costing around $5,000 per month and skilled nursing homes in the $6 ~ 8,000 per month.  Care in your own home can be a less costly expense but has a whole other set of inherent problems.

The costs are guaranteed to only increase each year, and your options become more unpalatable as your age and health changes.  So, why don’t you start the New Year by reviewing your options and facing the reality of this situation. Don’t procrastinate, learn the facts.

Many fine resources are available online from both the State of Washington as well as the Federal Government.  The local SHIBA office located at 411 W. Washington, Sequim likewise have information and resources, as well as many local insurance agents and financial professionals.