KIRKLAND, Wash. — The traditionally conservative insurance industry can come to terms with a Democratic Congress on health reform, according to one insurance leader, Denise Gott, who today heaped praise on Senator Edward Kennedy (D-MA) for his crusading efforts. “He sees more clearly than anyone the need to reform not only acute health care, but long-term care, which affects the quality of life and pocketbooks of virtually every American family,” she says. Gott is Chairman of the Board of LTC Financial Partners LLC (LTCFP) — http://www.ltcfp.com — one of the nation’s largest and most experienced long-term care insurance agencies.
The Senate Health, Education, Labor and Pensions Committee, which Kennedy chairs, is now working on a comprehensive health bill, the “The American Health Choices Act,” that is expected to include key provisions covering long-term care. “I agree with the major thrust, that we need a program embracing the long-term care needs of all Americans,” Gott says, “but have concerns on two points.” They are —
1. The “public option” which would create a government-run program insuring people in competition with private carriers.
GOTT’S CONCERNS: “Instead of competing with insurance companies, unfairly I believe, I’d rather have the government offer new tax incentives to make long-term care policies more affordable.” She points to recently-introduced bills, H.R. 2096 and S. 702, that would allow LTC insurance to be included in employer-sponsored cafeteria plans and flexible spending accounts, enabling people to pay their LTC premiums using pre-tax dollars. “These bills, with bipartisan sponsorship, show the way to go,” she says.
“However, if Kennedy and Congress are determined to offer a public option for long term care, competing with the private plans, there’s a way it could work. Instead of automatically enrolling everyone in the public LTC option, the government would have people make one of the following choices: the public option, or a private plan (which they could choose from any state-certified carrier), or the public option plus a supplemental private plan.” The benefit amount of the public option is expected to be $50 to $100 a day depending on the degree of disability. “This isn’t enough to cover all one’s care needs. A minimal private plan pays $200 a day.”
2. New “insurance exchanges” where people would shop for a policy from multiple carriers.
GOTT’S CONCERNS: “This might be a good idea but could turn bad if the government itself designs and runs it. As an analogy, imagine — before the days of YouTube — Washington creating a video-sharing service. How good would it be with bureaucratic coders and no competition to assure constant improvement?” Gott might approve, however, of a plan that offers guidelines and incentives for entrepreneurs to create insurance-selection exchanges.
“There are many complexities that government employees aren’t likely to take into account,” she says. “Selecting the right long-term care policy is much more important and complex than buying a car. And who would buy their car just by going to a website? Also, a government exchange would probably send people directly to insurance carriers, as the online prescription-drug system did. This would be like sending people to auto manufacturers for their cars, when auto agencies, with their hand-holding and value-added services, are the right destination.” In Gott’s view, a proper exchange for long-term care insurance would send people to independent agents who know which carriers are soundest, and can advise on the right policy features at the lowest cost.
“With the online system for choosing a prescription-drug plan, people went crazy with all the complexity,” Gott says. “They’d really tear their hair out with a long-term care choice system. An informed, unbiased advisor is absolutely essential.”
When rectified with another plan being crafted by the Senate Finance Committee, Kennedy’s plan could gain momentum. But will it find enough bipartisan support to pass? “With the right adjustments, I think so,” says Gott. “With the tweaks I suggest, I believe it would be much more acceptable to Republicans and conservative Democrats.”
On the central point she agrees 100 percent with Senator Kennedy: “We desperately need reform, for long-term care as well as acute health care. About 46 million Americans lack regular health insurance, but many times that number lack long-term care insurance. Only about 9 million have it out of a population of more than 300 million; and among those at greatest risk, 45 and older, more than 90 percent go uncovered.”
Gott encourages concerned citizens to make their views known to their representatives in Congress. Legislators’ phone numbers and fill-in forms may be found at — http://www.usa.gov/Contact/Elected.shtml. “Women in particular should speak up,” Gott says. “They’re at risk even when they themselves stay well and fit. Typically they’re the ones forced into unpaid care giving when a family member suddenly develops a care need.”
