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2009-08-01 13:52:00

Health care, spending, lab work and innocent until proven guilty

Question: So, what’s up since the last issue?

Answer: As always, I am glad you asked. (If you are a new reader, you need to know, I really didn’t receive this question this month, but did several months ago, which “opened the door” for me to write each month about all kinds of things). I have several comments this month about different topics that I would like to share with you. First item - In the midst of all of this debate on national health care, let me offer a little information about a few things that some of you, may want to use to help inform and educate someone in your morning coffee group. Among the “too many” things I do, I am a licensed agent for Life, Health, Property and Casualty insurance. I never realized how often insurance companies take advantage of people and how dishonest they are until I listened to some of our elected officials this past month. Almost every time the subject of health care comes up, suggestions or resolutions on what to do are accompanied by the remark, “We’re doing this to keep the insurance companies honest.” This of course implies that they are normally “dishonest?” Wow! I would hate to think of what this country would be without the insurance industry...but if all of the companies are dishonest...then I guess they need to go. You see, I am one of the those agents who spends more time helping my clients get their claims satisfied (i.e..like needing long term care in an Assisted Living residence, Home Care, or Skilled Care in a nursing home; getting an adjustor out to look at hail damage to a crop, roof or siding; helping with the paperwork to get a claim on a life insurance policy; satisfying a work compensation claim; etc), than I do selling policies. How do I stay in business? Repeat customers help a lot. Does something need to be done to provide coverage to those who have none? Of course. It’s just that so many people need so much more information and education about this matter before they get out in public and talk about it, trying to sway the masses. There are many situations where the insurance company has erred, just as there are many cases of companies in every industry in America having erred. But there is always redress for the insured in these insurance situations. If the dispute cannot be resolved directly with the insurance company, there is always the State Insurance Commissioner and his/her staff. You see, an insurance policy, for any type of insurance, is a contract, between you or your company (the insured) and the insurance company (the insurer). It is almost always…very straightforward. In return for the premium being paid, the insurance company will insure the risk against the stated perils (wind, hail, fire, tornado, sickness, theft, liability, gall bladder attack, boiler blowing up, etc.), to the limits defined in the policy. It’s no different than you paying a monthly fee to the local, daily newspaper to get your morning paper delivered, or any other contract. In return for you making the monthly payment, the local, daily paper will be delivered to your home or business. It’s a contract. In more than 20 years in the insurance business, I have NEVER had an insurance company fail to pay a claim, in accordance with its terms and conditions, to one of my clients. Furthermore, if the terms and conditions in the policy are ambiguous (and they never are for long as the wording is changed with an added amendment), the company pays the claim in favor of the insured. This is called “onus,” a Latin term that means the insurance company wrote the contract and since they do insurance for a living, they are responsible for clarity. Ambiguity therefore goes against them and inures to the benefit of the insured. One of the most discussed things in the town hall meetings this past month is the “pre-existing conditions” clause in health insurance policies. Let me tell you a little about this. The first two things you learn when you become a licensed insurance agent, whether for Life, Health, Property or Casualty, are: 1) insurance is most always based upon the law of large numbers; and 2) in order for a risk to be insurable, the loss must be uncertain to occur. The first should be understood by most. The larger the “class” covered...the more predictable the loss...the more fair the premium. What about premium increases? Surprising enough...decisions to increase premiums are made as often by the State Insurance Department (SID) as they are by the insurance company. The SID monitors all financial data of every insurance company doing business within its boundaries. They mandate a certain level of reserves (money) in order to take care of ordinary losses first...and excessive or catastrophic losses second. If there have been a lot of claims that have depleted this reserve, the SID will mandate a premium increase by the insurance company. If the insurance company wants to increase a premium, it must first submit the request to the SID, along with supporting data of claims and reserves, and get it approved before the premium can be increased on any insurance policy. The final premium will include losses (actual and predicted, based upon the actuarial tables discussed below), reserve and profit, with profit monitored by the SID. “Risk” means the likelihood of a peril occurring that can cause a loss for the item or person being insured. The risk is always in synch with the normal odds of the peril occurring. There are actuarial tables that are continually updated that list these probabilities. For instance, presently…1 in 88 homes will burn down or blow away this year, causing a total loss, according to the actuarial tables. 1 in 44 vehicles will be totaled this year through some sort of a peril (i.e. accident, hail, etc.) Now, how does this apply to health insurance underwritten by an insurance company? Answer...an insurance company cannot cover pre-existing conditions…EVER…if you are going to call what that company does INSURANCE. You can call it health care coverage and cover expenses related to a pre-existing condition, but it is NOT insurance. You see, it isn’t a fair proposition. To explain this another way…would you think it would be fair for you to be able to buy insurance on your home as you stood by the side of the road and watched it burn? You may want to be able to do it, but it wouldn’t be fair. The current plan out of the House of Representatives will force insurance companies to cover pre-existing conditions. This cannot happen and still call it insurance. And, if you do not call it insurance…what do you call it? Whatever that is…is what it should be called…but not insurance. There is another caveat that you should know about. There is a term in life and health insurance that is called “guaranteed renewable.” All life and health policies have it included, for the protection of the insured. This term means that if you pay your premium on time, the company cannot raise your premium or cancel your policy, unless the company raises premiums for all policies, or cancels all policies like yours, in the state in which you reside. The current House bill wants to have people in Kansas be able to buy health insurance in any other state, so it would be more competitively priced. This may be true but the insured gives up way too much to get this done. You see, this can’t happen with the present “guaranteed renewable” clause. WITHOUT the “guaranteed renewable” clause, the company can raise your premium or cancel your policy for any reason…just yours…not the family living next door to you…just yours. WITH the “guaranteed renewable” clause, the insurance company MUST raise premiums or cancel all policies like yours in the state in which you reside. This is of great benefit to each insured. Think this through for a few minutes. If an insurance company insures people in 20 states, its power by virtue of the “guaranteed renewable” clause allows it to raise premiums and/or cancel policies throughout all 20 states…at once. I don’t think this inures to the benefit of the insured. Do you? You know how I stated earlier that I would hate to think of what this country would be like without the insurance industry? But it could happen. They either go out of business immediately or they must call what they do something else if they must cover pre-existing conditions. In any event, they would no longer be insurance companies. Second, if the “guaranteed renewable” clause is spread throughout all states in which the insurance company writes policies, instead of just the state in which the insured resides, the insured (you) have considerably less protection against premium increases and/or policy cancellations than you do now, which should in turn drive more people to a “public option.” Third, if the insurance companies cannot write health insurance that covers pre-existing conditions, and a public option of health “care coverage” will cover them, the number of people covered by the insurance company will dramatically decrease; and since insurance is based upon the law of large numbers...which would no longer be the case...so now their losses would be spread over many fewer people...can you not color them “gone?” So when the present House bill says, “You can keep your present insurance if you want,” well...okay, but probably not, because they won’t be around. There are so many things associated with the effort to have national health coverage. These are just a few of them, yet…in all the discussion…no one has mentioned these…which are paramount…or at least they are in my opinion. Don’t get me wrong, and please don’t turn me in for “bad mouthing” anything, because I am not a “bad mouthing” anything. Something needs to be done to provide health care coverage to those who have none. The Declaration of Independence states we are all entitled to life, liberty and the pursuit of happiness...and certainly good health is a big part of “life.” We just need to do it the right way...and for the sole reason of that better “life” for all, instead of some hidden agenda(s). Second item - (a bit of Will Rogers philosophy) Again, please don’t turn me in for poking fun at something, but I have owned or co-owned more than two dozen businesses in my lifetime. I do not say this for prideful reasons. Many were not a success. I say this only to make a point. I have been the one responsible for the “bottom line” in most of them. In all the years I have been doing what I do and being held accountable for the same, I never did think that a solution to garner more net income (profit) was to spend more than what I had budgeted for expenses. Do you know how much more, the hundreds of sales people I have had working for me, would love me today if I were to have done this…instead of pushing them harder to produce sales and working so hard with vendors and management to cut costs? To think…all I had to do was to outspend by 200% or more, my budget for expenses, and I could have made all of these unsuccessful endeavors “shine.” Next item - I have been telling you about this purplish liquid I have been taking for more than three months. Well, in late July, I had lab work done on my blood. It was too late to get you the results in the August issue. But, while there are many things blood lab work shows about your physical state of being, the things I depend upon it to show me are my cholesterol (total and both good and bad), my triglycerides, my blood sugar, my PSA and my creatinine (something to do with kidney function). I have graphed the three dates of my last three blood lab works: April 30th, June 8th and July 30th. So, what have I done? I have done nothing (other than what I have told you about in my columns) in the way of prescription drugs, exercise or diet…EXCEPT for drinking this purplish liquid. It is a concoction made from the extracts of 7 different botanicals (plants). Each of these is supposed to do something for your body to put it in “balance.” My weight is down, my overall cholesterol is down, my good cholesterol is up and my bad cholesterol is down, my blood sugar is lower, my PSA is lower, my creatinine is lower…the only thing that is up a smidgen is my triglycerides count and I don’t know why that is. It started at 64 and has gone up to 86, but well within a most acceptable range. I have had probably three dozen phone calls wanting to know about the lab results from late July…so I have furnished them here for everyone. Do I know why this is all happening? No. It might be, as I have said for weeks, just coincidence. If so, it’s the type of coincidence I like. Lastly - I got a call from a man about the time we were going to press. I was moved by his story and thought I would include it here. He said a friend of his was charged with a serious crime and incarcerated, awaiting trial, since November of 2007! Yes, as surprising as it might sound, he has been in the Sedgwick County Jail since then, in a “pod” with 64 other men who have been charged with serious crimes. He has been there since November of 2007 because…(according to this caller)…there is not enough money to fund the public defender’s budget and his trial has been moved 3 or 4 times (he couldn’t remember exactly). There are 14 in this pod that have been in for as long as he and are in the same shape. In the mean time, he has lost his family, his job and his house, since he wasn’t making payments on it. The man who called me said the charge was a serious charge…but a bogus charge. I told him that of course is not up to him…or me…to determine. It is up to the courts. He has a bond of $1 million but no way to bond out. Now, take a look at this situation. If he is proven guilty, I would imagine whatever sentence he receives, he would deserve and it would be reduced by his time already served. But…what if he is found not guilty? Take a look at what has happened to this man. In the period of time he has been incarcerated, I have been on vacation three times, had two birthday dinners with my family, two Thanksgivings, two Christmases, celebrated my wife’s birthday twice, each of my children’s birthdays and their significant others’ twice… played with our girls (dogs) hundreds of times, played over 400 rounds of golf, slept in nice linens each night, etc. What has he been doing? The man who called me said he had tried to call the TV stations and the newspapers about this situation but no one would give him the time of day. They say they might look into it when their “reporters get off vacation.” This man mentioned two or three other excuses they had given him…but to me…they all sounded the same. Again, I don’t know who is right and who is wrong. That’s not my job. But goodness, do you suppose all of the 64 men in this “pod” are guilty? Do you suppose all of the 14 that have been there for going on two years are guilty? Is there even one who is innocent? Are we still not innocent until proven guilty in this country? How can it happen that such a long time goes by without something happening? How many times does this happen…to how many people…here in Wichita…and throughout the world? We all have good and bad days, but imagine the plight of these men. May God bless them and make them whole if they are innocent. If they are guilty, may He have mercy on them. If you are aware of this situation and I have portrayed it differently than the way it is, please let me know.