The Health Insurance Dilemma

I cannot imagine anyone wants another human being to go without health care. We all need it at some point in our lives. However, health care has become an incredibly polarizing subject in America and that is a shame.

We’ve been discussing health insurance in the United States for many years now. If you are curious, I am not a proponent of Obamacare primarily because it was more about the government overseeing and taking over the total health care industry than in covering the 30-40 million uninsured. When has the government ever done anything efficiently over a long period of time without becoming bloated and hugely inefficient, and without growing far beyond their intended scope and purpose.

I would be happy if the government had formulated a more simple plan to figure out how to provide services to the uninsured and let the rest of the health care industry alone. We have had the best health care in the world and Obamacare is likely to reduce our quality of care. If you disagree, we will simply have to wait and see.

Perhaps one exception to the above comment is our need to reduce the cost of prescription medicine. Anytime you can drive across the border into Mexico and buy the same drug for far less there is a problem. Of course you hear and read about political parties being in bed with the drug industry. Does anyone believe that likely is not accurate?

Anyway, no matter how you land on this difficult subject there is no arguing the impact health insurance or lack of health insurance has on our nation and people.

Back in 2002 the Institute of Medicine figured that around 18,000 U.S. citizens between the ages of 25 and 64 die annually due to a lack of health insurance. The following information is not rocket science yet still informative.


Uninsured adults without health insurance:

…are far less likely to receive preventive services

…and with cancer are generally in poorer health and die more prematurely than those with insurance primarily due to delayed diagnosis issues.

…and with diabetes are less likely to receive recommended services, which causes uncontrolled blood sugar levels which puts patients are greater risk

…and with hypertension or high cholesterol are less likely to be screened, less likely to receive prescription medication and are at greater risk

…and with end-stage renal disease receive dialysis later than other patients

…and with HIV receive medication later that can improve odds of survival and die sooner

…and are hospitalized are more likely to die in the hospital, receive fewer services after being admitted and experience more substandard care.

…and experience a trauma injury are less likely admitted to hospitalization, receive fewer services and more likely to die as a result

…and with acute cardiovascular disease are less likely to receive hospitalization to receive angiography or revascularization procedures and more likely to die

Again, nothing in this that would shock your world. It’s still important to remember that we have lot of people who forgo health care and the basic services they need.

Long Term Care Insurance Unaffected by Obamacare

One of the mandates behind Obamacare is to treat men and women equally under the health insurance umbrella. However, Long Term Care Insurance is not under the same guidelines so they will continue to charge more for women.

According to Genworth Financial, $2 out of every $3 claim dollars is for women. Women live longer than men and a big reason they require more claim dollars. Insurers will ratchet up rates on women who buy long term care insurance as a result. Women’s premiums are expected to increase 20-40%.

Long Term Care Insurance provides coverage for those unable to care for themselves in a nursing home or need partial care – assisted living. Costs for these services are very high if paying out of pocket. Insurance plans generally coverage a specific dollar amount of coverage for a specific number of years, typically two years or five years.

For example, a LTC policy might provide $200 per day coverage for 2 years.

The rising rates are not expected to impact existing clients or clients who apply together as husband and wife.

Insurers selling group health insurance, beginning 2014, will be able to vary rates based on geography, age, family size and tobacco use but not for gender. So far, Long Term Care plans have avoided this stipulation.

LTC Rates Rising in California

The California Public Employees Retirement System has announced plans to raise long term care insurance rates by 85% in 2015. Not all employees purchase the optional long term care insurance in their benefits package. But those who do will see their premiums nearly double. John Hancock raised rates by 40% and CNA Financial increased rates by 45%.

Long Term Care Insurance helps cover costs associated with nursing home assistance or assisted living. Most everyone knows someone who has been in a nursing home or in an assisted living facility. Costs are rising in both. It makes some wonder if the LTC industry will eventually be an insurance product that is only available to the very wealthy.

At least with life insurance almost everyone can afford a cheap term life insurance policy. That is, until you get into the retirement years when all life insurance is pricey. But long term care will eventually be a product that ceases to exist or becomes known as the rich man’s insurance plan. And you cannot blame the insurance industry. Costs are skyrocketing. They have to do what is needed to remain solvent and hopefully ensure profitability.

The long term care industry has seen staggering increases over recent years as they begin to experience an onslaught of claims. LTC sales took off in the 1980’s. Customers are now in their 70’s and 80’s or beyond and many are needing long term care assistance. Claims are rising. Many carriers sold policies that offered lifetime benefits for as long as the client lives and needs care. Life expectancy has risen and is causing issues with profitablity.

The economy is also causing issues for the insurance industry. Once upon a time, the insurance industry could put money into conservative and fixed investments and earn a sizable return on their hundreds of millions of dollars. Now, as everyone else knows, there are few places to earn a decent, safe return. The lack of investment opportunities is costing the insurance industry profits. And those fewer profits are being passed along to consumers as the need to not lose money on basic insurance products is more important than ever.