You see, this week Mr. AOW's Medicare card arrived in the mail.
Even though Mr. AOW will not reach the age of sixty-five for nearly three more years, he is automatically enrolled in Medicare thirty months after the qualifying event that disabled him in 2009 and has confined him to a hospital bed with a bedside commode in our living room.
Frankly, we've been looking forward to Medicare: Mr. AOW's private health-insurance premiums have risen from $500 a month to $700 a month over a two year period. The next premium hike for Mr. AOW is scheduled for June 2012, at which point the premium will be $908 a month. Mind you, the private health-insurance policy that Mr. AOW has is of the catastrophic type without prescription coverage and with a high deductible — two features which keep the premium far below that of gold-plated health insurance.
So, what's the point of this post? Shouldn't I be dancing for joy that, in a few months, Mr. AOW's health-insurance premium will drop from hundreds of dollars a month to $117.00 a month? Not exactly.
Mr. AOW's policy has one excellent feature: a maximum annual out-of-pocket amount. Therefore, when he had a brain hemorrhage in 2009 and ran up medical bills of some $180,000 within less than ten weeks, we were not burdened with the usual 80/20 split of the bill and instead had to pay only $5000. Do the math! 20% of $180, 000 is $36,000! The following year, even though the medical bills were not in the six figures, Mr. AOW's medical care again easily reached the $5000 annual out-of-pocket limit; without that limit, another sizable medical bill would have loomed, a bill in the high four figures.
The annual out-of-pocket maximum is a critical feature of health insurance and the feature that limits expenditure as well as the amount a medical provider can attach as a lien on one's home.
Medicare coverage has no out-of-pocket limits. I repeat: Medicare coverage has no out-of-pocket limits. Instead, Medicare is an 80/20 plan. No wonder that many who have Medicare only find themselves in medical bankruptcy! No wonder some elderly couples divorce after a catastrophic medical event! No wonder that eighty percent of those in nursing homes are on Medicaid!
Medicare's 80/20 split is the reason that you often see advertisements for Medigap coverage, typically affordable policies and a good investment.
Catch 22! Because Mr. AOW is not sixty-five years of age, he does not automatically qualify for Medigap plans! Thus, if we cannot find a Medigap plan, our budget will have a significant vulnerability should another catastrophic medical event occur. Furthermore, all property is vulnerable; here in Virginia, husband and wife cannot separate assets, no matter the origin of those assets.
Most people believe that health insurance will prevent medical bankruptcy. Not so!
The 80/20 provision with no out-of-pocket limit poses great peril — and not only for the elderly. Some years ago, a family that I personally knew lost everything when their sixteen-year-old daughter sustained a grave head injury in an automobile accident. Health insurance, an 80/20 policy with no out-of-pocket maximum, could not save them financially: they lost the family home. And their daughter died anyway. The few years that she "lived" were hideous because of the closed head injury she sustained in an accident not her fault. More to the point of this post, the insurance policy of the man who caused the accident barely paid for the first few minutes in the emergency room, and the parents' insurance policy exceeded its allowable limits over a period of less than two years.
Late yesterday evening, I called a particular health-insurance carrier for which I saw an advertisement on television. Over the phone, the company representative insisted that the company did indeed have a Medigap policy for Mr. AOW and at a reasonable cost ($128 a month). Of course, I won't know if the company representative was telling the truth until I examine the packet; the policy may well exclude those with pre-existing conditions. There is no federal mandate for affordable Medigap coverage for those under the age of sixty-five. never mind that one can be totally disabled before that magical number — and never mind that one has paid and paid premiums all of one's working life.
The Democrats aren't correct about much, but they are correct about the following:
...work together to form something that might be palatable to – to help the 40 some million that don’t have insurance or the vast majority of other folks who are one medical catastrophe away from bankruptcy?I am a conservative. And if you're a conservative, you're probably shaking your head as you read this post. Perhaps you're even angry that I'm saying all this.
But I'm telling you right now that a monster is lurking and will consume many of you if our nation doesn't come to terms with viable health-insurance reform before the Baby Boomers reach the point of skilled nursing care. For your information, a nursing home can easily cost around $18,000 a month (extensive home care often costs nearly as much); Mr. AOW's five weeks in a nursing home over two years ago cost over $15,000. Do the math, and remember that Medicare doesn't pay for residential care! How many people can put aside enough of a nest egg to pay for care for one year in a skilled nursing facility? And what if — God forbid — one of your children should end up in a skilled-nursing facility?
And how will Medicaid, choice of last resort, be sustainable with the coming tsunami of aging Baby Boomers?
Who is discussing the dangers that I've pointed out in this post? Not many, as far as I can tell.
One who has discussed this topic in some depth is Jane A. Gross, the author of A Bittersweet Season: Caring for Our Aging Parents — and Ourselves, a book that I highly recommend. The book primarily discusses the trials of taking care of an aging parent, but the principles can apply to a couple and their children as well.
Remember this: if you are married, the odds are that at least one of you will become seriously disabled or seriously ill before leaving this life. How will your care be paid for? Without leaving behind an impoverished widow or widower, that is.