Putting It All Together
By Kate Kinkade, CLU, ChFC

A perusal of California Broker news items highlights the challenge California is facing with the rest of the country when it comes to healthcare.  Putting the items together provides a daunting picture:

"Age-adjusted death rates in the United States declined significantly between 2005 and 2006. Life expectancy hit another record high, according to preliminary death statistics by CDC’s National Center for Health Statistics”

"A married couple would need current savings of $154,000 to have a 50% chance of having enough money for retirement health costs or $235,000 for a 90% chance, assuming full Medicare benefits.”

"Forty-six percent of U.S. employees have not taken any steps to determine income need in retirement. In contrast, 71% of U.K. workers have taken steps to determine their households’ retirement needs.”

"The (NASE) survey shows that micro-businesses grossing less than $50,000 annually spend a median of 17.6% of their gross 2007 sales on health insurance, compared to a median of only 1% spent annually by companies generating more than $500,000 annually.”

"Of the micro businesses offering health insurance, only 18.6% offer coverage for full-time employees. That is a significant decline from 2005, when 46.2% covered full-time employees.”
So. People are living longer – which is wonderful – and not planning or saving for retirement, while the cost of medical care not covered by Medicare is growing. Fewer small businesses are providing employee coverage, and, as we know from other news, large businesses are reducing coverage due to cost. So we have fewer employed people insured today, and we are facing a significantly underinsured retired population in the not-so-distant future.

Now move to a perusal of insurance legislation sights to see “what is being done” about the issue. State Net is a Sacramento based organization that tracks legislation nationally. When it comes to health insurance legislation, State Net had these two snippets in this month’s “Issues”:

"There are seemingly only two kinds of states these days: Those that already have (or soon will have) some form of universal healthcare - Massachusetts, Maine and Vermont - and those that want it. The problem is, of course, how to pay for it. At least 21 states introduced a universal healthcare bill in 2007, and many of those measures will carry over into 2008. Many observers were also waiting to see what happened in California, where Gov. Arnold Schwarzenegger (R) made healthcare reform a major issue this year. But Schwarzenegger and Democratic leaders in the Legislature have yet to reach an agreement on a funding mechanism, and with the Golden State budget inching toward a $14 billion deficit, that compromise may not happen. New York Gov. Eliot Spitzer (D), however, recently set up a task force to explore bringing universal care to the Empire State, so the issue will remain a hot topic no matter what happens in California.”

"Despite healthcare cost inflation outpacing national inflation, legislators are expected to continue to respond to policyholders/voters efforts to require additional medical treatment benefits from insurers. Two benefits categories expected to lead the coverage list are bariatric/gastric (weight-loss) surgery and "medically necessary rehabilitative services" such as autism, Asperger's Disorder and attention-deficit hyperactivity disorder (ADHD), the latter for persons younger than 19 and for services not provided through the individual's school.”
So. Everyone is looking at universal healthcare, nobody knows how to pay for it, and people want more coverage, not less.

None of this is new, of course. In the process of researching for this month’s column, however, these disparate pieces of information leapt out at me. How can a reasonable educated electorate, a reasonably developed economic and political system, in the most powerful country in the world not have the systems and maturity to work through these inherent conflicts and solve this basic need before it becomes more of a crisis? One must admit that it is rather remarkable.
Each entity in the medical delivery and financing system continues to represent itself and legislators continue to react to pieces rather than taking on the difficult decisions required to provide a real solution. This dysfunctional dance would be interesting to watch if you didn’t have parents, children, and grandchildren who are or will be affected by the lack of adequate healthcare. And, of course, if you are not one of the uninsured or underinsured.