Column 43

Since the implementation of the ACA (Affordable Care Act) began, it has disturbed me that the government representatives have dismissed the role of the agent in the process.  This week I had a painful reminder of how this action has hurt the public.

An attorney called to ask if there was anything I could do to assist a client with an unusual situation.  The 64 year old couple had never had health insurance and always paid their own bills.  They resented the fact that they had to buy insurance, but dutifully applied though the CoveredCA website, only to find that their income made them eligible for MediCal.  They were concerned because the husband was just diagnosed with advanced stage cancer, and knowing that they will have claims costs, they will also be subject to the Asset Recovery provisions. They did not want to give up the equity in their home at death to repay the expected costs that the state will pay for them.

There are two issues here.  One is simply a lack of understanding of the options and the second is an ethical issue. 

First, had they come to any informed agent, they would have been given the option of simply buying insurance directly from the carriers or marking the box that they did not want premium assistance on the Covered CA app. Since there is no medical underwriting, the cancer claim would be covered.  This would protect their family from the potentially devastating costs associated with medical treatment. Under the old system this would not have been an option for them, because of the pre-existing condition. And after all, isn't that the purposes of insurance; to protect you from catastrophic risks?

Had they come to an agent initially, they would have known all the options, not just those through the Exchange.  They would have paid no fee for the consultation and should they have enrolled they would have paid no more for their premium.  Should they need assistance later, they would have had an advocate to work with them. Instead they are consulting an attorney to find options to protect their assets. 

The attorney will now assist them in trying to find a way to position their assets to protect them from recovery.  Herein lies the ethical dilemma.  I think this is an important discussion for each of us to have around the family table to determine a more global perspective on what we want from our government. 

Is it ethical to re-position your assets to preserve them, with the expectation that your neighbors will pay your medical bills?  This issue has come up countless times in the 36 years I have worked in financial planning. 

The goals of health care reform are many.  One of these is universal health insurance coverage for all, with a government safety net or assistance for those who cannot afford to pay the costs of insurance.   As flawed as the initial implementation may be, I doubt there is much argument with that goal. After all, as a nation we direct that emergency rooms must treat you regardless of your ability to pay.  Since there is no other segment of the economy that is required to deliver service regardless of your ability to pay, that tells me that we put some value on health services for our citizens.

We provide multiple safety nets in this country to help those that are unable to pay for health care.  Health Care Reform had a provision called the CLASS ACT that attempted to address the long term care costs, but it was deemed too costly.

The question becomes, is it appropriate to reposition our assets so our children can inherit our property, but allow other taxpayers to pay our medical bills?  It can be argued that as long as the law allows it, then one is wise to take advantage of that law.  Isn't this the same argument we use for tax deductions that reduce our income, so we don't have to pay more taxes?  Surely our taxes pay for our military and other services that are for the good of all. 

Some years ago, I watched a program on PBS called "Ethics in America".  The program featured a panel of high profile citizens, including Supreme Court justices and ordinary citizens. What appeared to be simple questions were presented, but then expanded just enough to take it out of the realm of a black and white answer. 

Health Care reform in the US is a complex issue with countless moving parts and includes many questions we have yet to answer as a society.  I hope that we will take time to consider those issues in a thoughtful and mutually respectful way.  This is one I hope you will consider discussing in your own families and circles.  We don't need angry diatribes on social media, but we do need to consider the issues.