Insurance Quotes & Advice

There may come a day when you can no longer take care of yourself and will require long term care.  It’s not something any person really wants to think about because it can be a frightening prospect.  That’s not even taking the costs into consideration because it’s expensive and can eat away at your assets fast.

The current average annual cost of a nursing home stay is over $70,000, the cost for assisted living is about half that,  and like regular healthcare, it’s rising at a faster rate than inflation.  And don’t think that you can just rely on Medicare or Medicaid either because even if your lucky at the most they might cover about 50% of the cost and if you’ve read some of my previous articles then you know by now that those two programs aren’t exactly financially stable.

When planning for your retirement nowadays, you need to consider long term care insurance.  While most people will have health insurance not all of them will purchase long term care insurance.  It’s something you need to think about sooner rather than later because the older you get, the more expensive the premiums will become.

A healthy individual in their 50’s can expect to pay somewhere between $2,000-$3,000 a year in premiums with prices almost doubling every decade after that.  Also keep in mind that costs can vary from state to state since insurance isn’t regulated at the federal level.

Even though the insurance isn’t exactly cheap, it’s a lot less than if you had to pay for long term care out of your own pocket. Also with the huge influx of baby boomers about to hit retirement age, who knows what that will due to the future cost of long term care.

The rest of the nation is anxiously watching Massachusetts as it attempts to institute a universal healthcare system in the state.  State law now requires that all residents must be enrolled into a healthcare plan by December 31 or face penalties.  For the first year the penalty for residents will be loss of their personal exemption on state tax returns, which is about $219.  Next year the penalty is expected to rise to as high as $1,000.

As expected, there have been growing pains in this bold plan.  A state program was instituted to help subsidize insurance for low income individuals and families.  While participation was better than expected, it’s already straining the budget of the program and it’s estimated that as many as two thirds of the previously uninsured are still without health insurance coverage.

With an estimated 60 million Americans in our country currently without health care, this is an important test to see if such a system might work nationwide.  The U.S. is the only wealthy industrialized nation in the world without universal healthcare.  Despite what we may believe, we do not have the best healthcare system in the world.

Although we have some of the best trained medical professionals and best hospitals found anywhere in the world, we compare poorly to countries with universal health care systems.  Life expectancy and infant mortality rates ranks well behind the other industrialized nations.

The problem with healthcare in this country has always been cost.  The U.S. spends more money per capita on healthcare than any country in the world.  Some experts estimate that on average Americans spend about 40% more on healthcare than countries with universal healthcare systems.  It’s also estimated that the government accounts for over 45% of total healthcare spending in the country.

The facts speak for themselves.  I think it’s time for our government leaders to consider to following the example of the rest of the civilized world and make affordable healthcare a right of our citizens.

Currently insurance companies are regulated by each individual state.  Congress has been for years discussing legislation to reform the current regulatory system.  The MacCarran-Ferguson Act passed in 1945 exempted insurance companies from federal anti-trust laws and gave states the power to regulate the business of insurance.

There are three basic sides in this battle over reform, state regulatory commissions, insurance companies plus their agents and consumer advocacy groups.

State Regulatory Commissions

For many years states have been fighting any attempts to give the federal government oversight over insurance companies.  They feel strongly against that preempting state laws would be a big mistake and that adding an extra layer of bureaucracy would make the entire system unwieldy and  unresponsive to consumer needs.

Insurance Companies

This is a complicated issue for them.  On the one hand, being subject to federal anti-trust laws has to be a main concern but on the other, having a uniform regulatory code that doesn’t vary from state to state would be very beneficial to them.

Consumer Advocacy Groups

Many of these groups have sharply criticized the insurance industry over it’s handling of the Hurricane Katrina disaster.  At issue are the claim’s paying practices of mainly property and casualty insurers as well as pricing practices.  It has been this sort of public outcry that has prompted Congress to review insurance regulation reform.

There is a lack of trust on all sides of the issue.  States don’t trust the federal government and feel sweeping reform isn’t necessary.  The insurance industry feels that some states over reach with their regulatory powers and hurt business.  Consumer activists meanwhile mistrusts the powerful lobbying efforts of the industry in seeking reforms favorable to them.

It will be interesting to see how the battle plays out and it is quite possible none of the sides will get what they want.