Some Retirees Slip Through Cracks In Insurance System

For years, Sanford and Ella Munro have been going without basic health care insurance, living on the ragged edge of financial ruin, and getting the runaround from government.

For good and sundry reasons, the 69-year-old retired couple did not pay enough into Social Security during their working years to receive benefits, which I will come back to later.

The law says that because they are not eligible for Social Security, they do not qualify for so-called “free” Medicare either. Medicare is a fringe benefit of Social Security.

But the couple, with monthly income of a little over $1,300, aren’t complaining about not getting Social Security. Nor about not getting Medicare.

What stumps them is this: Though they aren’t eligible for “free” Medicare, they are eligible to pay for it - at a cost of $700 a month, without prescriptions. That’s 60 percent of their total income. And because they are “eligible” to buy unaffordable Medicare coverage, state law says they are not eligible for the Washington Basic Health Plan. Not even if they pay full price for it.

If they were not “eligible” to buy Medicare for $700 a month without prescriptions, the state would subsidize their health care for a total cost to them - including prescriptions - of just $46.76 a month! They are victims of a devilishly convoluted Catch 22.

But it gets worse.

A revolution in American health care, which has seen tens of millions of consumers switch from fee-for-service to managed-care programs, makes it much less lucrative for underwriters to offer the one type of insurance policy the Munros can afford - catastrophic coverage.

The Munros want a policy with a $5,000 deductible. They’ll pay cash for everything up to that level - as they have been doing right along. Above $5,000, they need the catastrophic coverage to keep a major illness from wiping them out.

But insurance underwriters no longer offer such policies - not to people over 65. The couple can’t afford anything else. They have fallen through a crack in the health care system, and they can’t get out.

What it all comes down to is a whole category of people over 65 who can’t get health care coverage. There is no niche for them. They are a financial disaster waiting to happen. It’s only a matter of time.

How many others like this couple are out there? Sanford Munro offered a wild guess of 5 percent of retirees. I can’t imagine that.

But for many, the problem is real.

“It’s a cold, hard fact,” says Chris Carlson, the leading local expert on senior health care solutions, “that there is no answer for couples like this. Absolutely none. It’s crazy.”

Carlson, who is attached to the State Insurance Commissioner’s Office, is well aware of the problem the Munros face. It appears to be most prevalent, she thinks, among retired school teachers from California, where she used to sell insurance. “We have a great many retired Californians up here,” she says, “and an awful lot used to be teachers.”

How do they get into this fix?

Easy.

As a young man, Sanford Monroe worked as a caddy. Next came a stint in the Coast Guard. Like the golfers, Uncle Sam paid in cash and didn’t contribute to Social Security. Then followed 31 years in the California public school system as a teacher and administrator.

Most employees of the school system were women teachers whose husbands had jobs that contributed to Social Security. They voted to preserve their financial independence on a statewide basis, not pay into Social Security, and put their money into a state teachers pension program. It pays the Munros just over $16,000 a year - their total income.

When they retired 16 years ago, it was enough. They built a retirement cabin up in the woods of northeast Washington on the banks of the Pend Oreille River near Usk.

Living there is cheap. All except health care.

Everyone with whom I talked in all the agencies I called expressed total confidence at the outset that they could ferret out a solution for the Munros. All failed utterly. My phone search for answers dragged on and on.

Sanford Munro told me he’s been at it for five years, and no luck.

Indeed, there is no existing answer. It remains for one to be created.

, DataTimes MEMO: Associate Editor Frank Bartel writes on retirement issues each Sunday. He can be reached with ideas for future columns at 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review