How to Weather the Medicare Insurance Crisis

In the article AMA accuses Congress of Medicare Mismanagement we covered the “White Coat Rally” where physicians attending the AMA 2010 Annual Meeting of the House of Delegates sent a message to Congress to “Stop the Medicare Meltdown“.

The numbers of physicians who are taking early retirement or opting out of accepting Medicare patients are staggering.

Whether you’re a senior, a Boomer and or a member of the Sandwich Generation caring for aging parents this volatile health care climate continues to predict stormy weather ahead for you and the people you love.   Perhaps it’s time for a viable “Plan B”.  You can’t control what the government is going to do, but you can take control of some options for yourself.

Health Care Management Issues

Plan B is what you call your “Smart Plan”, akin to what the retirement industry refers to as “aging deliberately”; making proactive choices for yourself so that you can navigate within or outside of any employer or government health care system to ensure that you will not be left holding a bag of empty promises when you or a loved one needs care.

Working Boomers – how secure are your employee medical benefits?

The questions you need to ask yourself are:

1.  Is my employer looking at an insurance carrier with a built-in medical tourism component? If so, that’s a good sign that they are taking steps to ensure continuing medical coverage.

2.  Is my employer self-insured?  If so, are you aware of the financial incentives for your company to pay a penalty and drop employee coverage?  Is the incentive so financially significant as to be considered ” a deal they can’t refuse”?  “Forewarned is forearmed.”

3.  Do I have a Health Savings Account through my employer?  That’s a proactive step towards controlling your own choices.

The National Association of Health Underwriters (NAHU), according to a NAHU member, is stating that some large self-insured companies like AT&T, John Deere and Caterpillar, for example, may opt to pay the penalty and not provide insurance to their employees under the current restrictions and regulations.

The example given was that if AT&T with 280,000 employees chooses to drop their employee insurance coverage (for which the company pays 1.5 billion dollars/year) and instead pay the penalty for not providing insurance they would recognize a windfall profit of seven hundred fifty-five MILLION dollars.  That’s a sum that qualifies to be labeled “a deal you can’t refuse”.

It doesn’t help that self insured companies, like AT&T are now being required to pay a one-time-fee per employee, per year, of $2.00 for six years.  It’s just $2.00, right?  Well, times 280 thousand employees, that’s half a million dollars a year or a total of three million dollars in six years.

So it’s a real possibility that a self-insured company may drop employee medical benefits, or at the very least lay off a significant number of employees and hire part-time people to take their place.   And the trend is not limited to self-insured companies.

Retired Boomers – what if Congress doesn’t “stop the Medicare Meltdown” or just delays the inevitable?

There comes a time when picketing for what you want as a group, as in AARP, has to give way to taking care of your own family’s urgent healthcare needs.

The questions you need to ask yourself are:

1.  How much is that joint-replacement, hip surgery, or heart surgery going to impact your pocketbook, and

2.  How much will your health decline and your lifestyle diminish as a result of prolonged wait times to see a doctor?

“They are saying the wait time might be as high as 45 to 50 days to see a doctor,” reports an attendee at the American Medical Association’s 2010 Annual Meeting of the House of Delegates.

Being a “senior” myself, I know that waiting to get a health issue fixed has a domino effect on my body.  Delaying an operation or treatment due to wait times or lack of finances has far more damaging consequences to my health now than when younger.  Conversely getting care in a timely manner can turn back the clock and make me feel and act a decade younger.

Medical Tourism is Plan B for individuals

“People who are smart, people who say ‘I’m fed up with this’, will just save the money they spend on insurance premiums and if they need surgery they’ll go overseas,” said an insurance executive, “It’s so much cheaper for me to pay cash for what I need than to pay premiums.”

According to Roy Ramthun, a former White House Advisor on Health Initiatives, “People with HSA’s (health savings accounts) are the most likely to participate in medical tourism because they’re spending their own money – and are interested in saving money.”

Medical Travel Insurance is Plan B for Employers

Medical Tourism gains traction with employers as reinsurance treaties include covering health travel to highly qualified foreign doctors and hospitals.  Self-insured companies buy reinsurance to insure their companies against employee catastrophic claims.  It’s called a stop-loss policy.

For example, Swiss Re, one of the world’s largest and most diversified reinsurers already has medical tourism built into their stop-loss contracts.  They advertise, “Medical Travel coverage will now be recognized as a reinsured benefit, at no cost to the employer, in all our existing stop loss policies and on all new policies written.  With the addition of a new network abroad option, employees gain access to high quality doctors and hospitals through an industry leading logistics provider.”

The impact of healthcare reform on Medical Tourism is thoroughly discussed by industry experts in the article “What Health Reform Takes Away, Medical Tourism Gives Back“.