increase. This was declared excessive by the State insurance commissioner. The requested increase would have jumped the cost from $408 to $480 per year per person. Connecticut-65 finally received permission to increase the cost 10 percent and downward adjustment in the benefits provided under the policy. New York-65 and Massachusetts-65 expect to apply for rate increases soon. Western-65 and Texas-65 have just begun to sell and it is too soon to tell about these plans. Continental Casualty Co., announced a rate increase for their senior citizen policies offered through mass enrollments. This company has 1,450,000 policyholders over age 65. The anticipated increase in cost to the seniors is $86 million a year. Individually, they have been paying $21 a month, and this amount will go up to $25.50 a month or from $252 a year to $306 a year. This policy is less advantageous than Blue Cross-Blue Shield. It pays only $10 a day for hospitalization. Wherever they can afford it, seniors report that they seek to supplement the regular Continental Casualty policy with an additional insurance policy to cover the portion of the hospital costs which their Continental policy will not take care of. Mutual of Omaha offers a number of part-pay policies ranging from $5 a day for hospital care for 60 days at a premium cost of $5.80 per month, to a more expensive one at $13.90 per month which covers $20 a day for hospital care. This latter policy has more benefits but even these are limited; for example, to a maximum of $225 for surgical per operation. It is logical and good business for private insurance companies to try to reduce the number of poor risks which they assume and attempt to terminate high risk policies. The most common methods by insurance companies, particularly the less reputable, are Selective advertisement and sales among predominately lower risk groups of older persons. Long periods of exempting preexisting conditions. "Small type" exceptions in the policies to eliminate high cost operations or illnesses. Complicated language in the actual policy to prevent the purchaser from understanding what he is actually buying. Selling a particular policy to people when they are in the lower age bracket. When this group of policyholders reach their middle seventies, the company starts increasing premiums until people have to drop out or they close out the entire policy group, reissuing new high-priced policies, and drop the high risk persons. Placing low-dollar maximums on the total amount that the insurance company will have to pay during the lifetime of the individual. These maximum lifetime benefits, written into the older peoples' policies issued 15 to 20 years ago, mean that people are left without any protection when they reach the advanced years and need it most. Contesting every large payment of a policy where large claims have been made and doing it in a manner that will encourage the person to discontinue his policy. If the older person discontinues, he has difficulty getting insurance at all or at a reasonable rate. Making it difficult for the individual to find out which hospitals are approved for the policy (means that the company does not have to pay claims for bills incurred at nonapproved facilities). Rate changes on senior policies after an initial sale at low prices. More than 100 million group health policies are now in force. Ninety percent of this number are in groups connected with a person's employment. Despite claims to the contrary, most of these policies are terminated either when a person reaches age 65 or retires, or the person must convert to a higher price policy. The number of Blue Cross policies sold to people over age 65 has dropped 50 percent. An HEW survey of Blue Cross-Blue Shield associations who sell the largest number of health insurance policies to people over 65 showed that during the years 1961-62 they sold an average of 35,000 policies per month to older people. During the years 1962-63, they sold only 16,000 per month or half the number of the previous year despite a massive campaign launched at the time of the 1962 elections. Early in the fall of 1962, Blue Cross-Blue Shield announced with much fanfare and publicity a nationwide senior citizen plan which was supposed to sell at $12 a month or $144 a year. Thirty-five of the Blue Cross associations sold their policies at rates higher than the announced national price. The remain. ing Blue Cross plans almost all reduced the level of benefits from those advertised with national publicity. The average price was about 70 percent higher than the previously offered prices to seniors by the same Blue Cross association. Only 53 of the 73 plans provided the nationally advertised 70 days of hospital care. Only half the plans offered the nationally advertised nursing home care, and only half offered the visiting nurse care (home health services). In fact, only 27 of the plans meet the benefit levels which were nationally advertised. They did, however, induce more Blue Cross-Blue Shield associations to offer seniors a policy which they could buy and did reduce the entrance limitations and extended the range of benefits of existing plans. One Blue Cross plan, Michigan Blue Cross, took in $18 million on their senior policies, but had to pay out $32 million; leaving a deficit to be picked up from somewhere of $16 million. Michigan, like most Blue Cross associations, has had to or is planning to seek rate increases on their senior policies for the future. The largest number of private insurance plans, but fortunately not the largest number of policies, are what should be called token policies. They pay inadequate benefits, have high cancellations, have much fine print, and confusing language in their policies; give poor service, and avoid anyone who might have a chronic condition, etc. The older people of America are bitter about the type of hoaxes that are being perpetrated by this type of plan. They get little or no help from the State insurance commissioners or anyone else who can help them guard against such frauds. The case histories which follow illustrate what is happening. Following a pro-medicare rally in the State of Washington, a union retiree group, which has a neogtiated group hospital insurance plan, was told that the previously announced rate increase for their group would not be necessary. Representatives were told that this rate increase was not necessary as the insurance company had just been able to get a rate increase from the group plan for the workers at the company where the retirees had formerly worked. Apparently the insurance company was letting the younger workers and company pick up the difference. They probably hoped that the retirees would not be quite so vocal in their support of medicare. Retirees in many areas of the country have raised the question, "Were the sales campaigns of Blue Cross-Blue Shield and Continental Casualty senior-type policies purposely timed to coincide with the Madison Square Garden rally, the 1963 Ways and Means Committee hearings on medicare, and the 1962 elections or was the timing merely coincidental?" The following is the 1960 census income figures for various States for single persons and the comparative Blue Cross rates where available. The cost of Continental Casualty is now $306 a year. The cost for Mutual's more limited policies is about $150 a year. You judge whether the average single person over age 65 can afford good health insurance protection. With hospital insurance costs rising faster than any other item in the cost of living, how many will be able to afford hospital care in 5 years-10 years? 1 Source of median income of nonmarried persons: State variations in the income of the aged, 1959 U.S. Department of Health, Education, and Welfare, Social Security Administration, Division of Research and Statistics, note 14, Nov. 20, 1963. Prepared by Elizabeth A. Lankford, Division of Research and Statistics. 2 Source of median income heads of household over 65: Table 139, U.S. Census, 1960. 3 Source: Blue Cross-Blue Shield hospital nongroup enrollement contracts: Blue Cross-Blue Shield nongroup coverage for older people, research report 4, U.S. Department of Health, Education, and Welfare, Social Security Administration, Division of Research and Statistics, table 1. Only plan offered; combined hospital-surgical-medical. Los Angeles-Long Beach. Standard Consolidated area, Chicago and northwest Indiana. 7 Allentown-Bethlehem-Easton. Wilkes-Barre-Hazleton. 'No statewide plan offered in Lynchburg, Richmond, and Roanoke. I. CASE HISTORIES CONCERNING HOSPITALIZATION AND PRIVATE INSURANCE We would like to share with you the contents of a letter which recently came to us from one of our members: "Re policy No. J-1,039,343. "CONSTITUTION LIFE INSURANCE CO., "Chicago, Ill., June 18, 1962. "Mrs. IRENE F. HEBBELN, "Houston, Tex. "DEAR MRS. HEBBELN: I'm glad you wrote. Any time there's anything about your insurance not fully clear be sure to write. I'm happy to answer your question. "Your sickness and accident policy doesn't cover doctor or hospital expenses. So, I am returning the doctor bill. The "Your claim was paid under part 5B, all other nonconfining sickness. policy says we can pay a maximum benefit of 15 days at $15 a month. We paid benefits from December 15 to December 30. We also paid 50 percent accumulated benefits under part 8. From our total payment it was necessary to take off 50 percent due to your age. This is explained in general provision No. 1. "From the information we have, it does not appear that your policy would pay any more benefits. I'm sorry about this but I know you will agree we can only pay what the policy permits. "How are you feeling now? Better, I hope. We wish you the best of health. "Your friends at Constitution Life, From Connecticut "CHARLES MINER, Claim Department." Case History of Complications Due to Illmess The story of Louis Radack: Only income is from social security, $92 monthly. Pays $10 weekly to a widowed daughter for room and board. Currently paying $161.40 a year for hospital and medical insurance. Annual total income (social security). Leaves (year) –– $1, 104. 00 681.40 422.60 (A little over a dollar a day for all other living expenses including laundry, barber, medications, etc.) In 1961 fell and broke hip causing 29 days hospitalization followed by about 6 months as wheelchair patient at home; 1962 hospitalized 7 days for stomach examination, X-rays, etc. While doctors didn't say what the trouble is, he is a very sick man, skin and bones and doubled up so that he cannot straighten up. In addition to what his insurance covered, his children had to go in hock to pay all the expenses involved above that were not covered by his meager insurance. From Minneapolis, Minn. "In 1958, I had an operation on my foot, and had a so-called specialist to perform it. They, we know, have a special charging too. I paid something like, I would say, $300 to have it done. The Blue Shield and Blue Cross covered some of it, but it seemed like forever before I had the part over what the insurance paid, finally paid up. I am still looking for the receipts. I didn't think I would need them so I misplaced them. About a month later I had to go to the hospital again. This time with pneumonia. The insurance paid part of the bill each time. But then I retired and had to discontinue the group insurance. I was promised that I could have it on my own. They would bill me at home they said. But they never did. I contend that they dropped me. At that time they could assert their independence more than they do now. I am now paying over $250 a year for health insurance, and one of the policies still has a rider on it which they refuse to take off. I am paying $92 for this policy and if I get sick with arthritis, I get nothing. Also, since my money is dwindling, I asked them if I could pay it semiannually. For this service I have to pay $8 extra. This amount doesn't mean anything to a big moneyed insurance company. Also, the other policies have been increasing from time to time. The reason that I feel that I have to carry so much is because they all give one such a small coverage so that one has to carry several in order to meet the high expense of illness when it strikes. I haven't used any of them since 1958, and it's mighty tough meeting these payments. I also am spending around $90 to $100 a year for doctor bills and about $50 for drugs. "MARY H. STOLZE," From Virginia Letter From a Minister "I knew the moment I walked into her hospital room that Mrs. Wills was determined to die. A week later, as minister of the First Baptist Church, Danville, Va., I conducted her funeral service. "Mr. and Mrs. J. E. Wills, a couple without children, retired about 7 years ago from employment in a local department store. They owned their neat, modest home and had some $5,000 in savings which they had painstakingly accumulated across the years. They expected this money to see them through to the end of life. "Four years ago Mrs. Wills fell and broke a hip. After 3 weeks in the hospital, the break had to be reset. Other complications developed and Mrs. Wills was left in a wheelchair. All of their life savings were spent within 3 months. "Our church members were concerned for the couple. One family did their grocery shopping regularly. Another man mowed the grass without charge. A ladies' Sunday school class employed a maid to clean their house once a week. The appreciative couple managed on their small monthly check. "But Mrs. Wills confided to me as her pastor that she was deeply concerned lest another illness strike. She preferred death to the city charity nursing home, or to selling their house and being paupers. "That next illness came and our good church member died rather than face the alternative. "As a minister, I support the concept of medicare. I have studied the KingAnderson bill quite carefully. It is reasonable financially and contains a humanitarian concern for the extreme needs of older people. It is the only comprehensive program for the severe health problems of senior citizens that I know about. "As a part of social security all of us can pay our own way across the years and maintain the dignity of independence when expensive hospital costs strike during the years of small income. "Mrs. Wills, and multiplied thousands like her, deserve better than we have provided. Case History of Joe L. "ROBERT L. McCAN, Ph. D.” "Joe L. was 75. He had gangrene of the leg and a heart condition. He was getting $110 each month from social security, had $3,000 in the bank and owned a two-room cabin worth another $3,000, making him ineligible for public assistance and for a free bed at the county hospital. That year he'd been hospitalized several times, and each time he'd been admitted to the public ward of what is considered an excellent hospital, six patients to a room. He had to pay $40 a day for room, board and such incidentals as X-rays, drugs and laboratory tests. In other words, 3 days at the hospital cost Joe a whole month's income. And this did not include the possible amputation of his leg and medical treatment. After 70 days in the hospital, his life savings had melted to $700. "Joe finally talked to me about his worries, and made no attempt to hide his bitterness. What he told me was a story typical of millions of other oldsters like himself. Soon the welfare worker paid a visit to Joe with forms and questionnaires and asked him to take the pauper's oath. But it turned out that Joe couldn't do that yet. He still had $700 and the house to his name. Only once his assets would be down to the lawful maximum of $600 and he'd have mortgaged his cabin, would he be allowed to apply for relief and get admitted as a charity recipient to the county hospital. Why don't you leave a little morphine on my bedside table?' he asked the social worker. 'I'd get the message.' "This is the way an American is robbed of his independence, human dignity, and self-respect. This is the way our country turns out paupers on the assembly line of callous indifference. There was anger in Joe's voice as he said, 'And we're supposed to be the richest and most charitable people in the world. And nobody wants a welfare state. But between you and me, I'm beginning to wonder whether there isn't something wrong with our system. What should we do?" Written by Mr. Hans Natonek (now deceased) and published by the Golden Age Club, Sisterhood of K'Hall Adath Jeshurun, New York. |