Thursday, April 18, 2013

PCIP - A True Story

Wednesday was a tough day for me. One of my long time group clients has a small union division. I am very close personally and professionally with both sides of the negotiating table. They have trusted my recommendations and know that I have always stepped up to make sure that everything that is done is in the best interest of both parties.

The employee (Jim) who heads up the union representation has been through a rough several years. In 2005 his mother (Jane) was diagnosed and beat breast cancer. In 2007 his father (John) was diagnosed with lung cancer. In 2008 his wife was diagnosed and beat breast cancer. Unfortunately while his wife and mom were given clean bills of health his father took a turn for the worse and ended up terminal.

John was the sole breadwinner of the family and losing his income without long term disability insurance was devastating. Financially the family had spent down all of their assets to continue payments for their bills.

From a health insurance perspective, the plan available to the employee carried a $600 annual out of pocket maximum (Yes, you all read that correctly). When John passed in the middle of 2009 his life insurance and pension kicked in for Jane. Not only that but Jane was eligible for COBRA under John's employer sponsored insurance plan. Here was our conversation back then:

ME: Jane, you are eligible for COBRA for three years. This will give you the best insurance coverage at the most reasonable price. Because of your cancer history individual carriers are not willing to insure you. The other option is Ohio's Guaranteed Issue Product. At your age the premiums are more than double what COBRA will cost and benefits are less.

JANE: If this is the only choice then I will have to take COBRA. I can't believe how expensive this is. John never had to pay a penny for insurance through work.

Fast forward to Fall of 2012. Jane is coming off of COBRA and I am meeting with her and her son. With her breast cancer history only being seven years removed, I was finding it very difficult to insure her. Not only that but with little to no income and assets paying for the premiums was going to stretch the budget.

ME: Jane, we have exhausted all of our options for you and we still don't have an insurance company willing to take you based on your past cancer history. With the changes in the health law we have found that many of the insurance companies have become more strict in their underwriting. They aren't as lenient as they used to be. The only option to keep you insured is the expensive Ohio Guaranteed Issue product that we discussed a couple of years ago.

JANE: What about President Obama's health care law? Doesn't it allow me to purchase insurance no matter what my health is?

ME: That is a part of the law but doesn't begin until 2014.

Jane and her entire family are strong supporters of President Obama and his signature law. Knowing little bits and pieces and hearing from the Union that represents her son and her late husband she inquired with me about "that high risk pool thing". I informed her that while it would provide decent benefits at a very affordable price she wasn't able to participate.

JANE: Why not?

ME: Because the law says you have to go without insurance for six months before you are eligible.

So that is what she did. She went without insurance. Now I have to call her and tell her that they suspended the program.

Unintended consequences are having a real impact. I doubt you will ever see this story or any like it in the mainstream media, but they are occurring everywhere. If you have encountered an experience similar to this one type a short comment. I would love to be able to share with my client that they are not alone. And you never know, if there are enough responses we might just be able to get someone in the MSM to actually pay attention.
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