Health Insurance Crisis Challenges Younger Retirees

Like so many these days, Tom and Jane Hainline of Spokane retired too early to qualify for Medicare, which doesn’t kick in until age 65.

Fortunately, the Hainlines had an individual health insurance plan to fall back on for coverage.

They bought it from MSC eight years ago, after Tom Hainline arrived at work one day and discovered that his employer of 30 years had locked the doors and folded the company.

It took a year to land another job. His new employer provided insurance, but the couple kept their individual plan with MSC paid up, too just in case.

Then three years ago, Hainline retired at age 56. The couple knew they’d have to pay for insurance. They were prepared for that. But not for this.

Since safeguards in the 1993 Washington health insurance reform act were repealed by state lawmakers and insurance lobbyists a year ago, rates for individual insurance plans have soared. This, while group rates have stabilized or declined.

And now insurance companies are trying to stop covering individuals and only cover groups, throwing the health care industry into turmoil.

State Insurance Commissioner Deborah Senn has declared that a “crisis” exists for 400,000 Washington citizens not covered by group insurance policies.

“The premiums just keep going up and up and up!” a distraught Jane Hainline testified during a town meeting on health issues conducted recently in Spokane by Commissioner Senn.

“It’s costing us $428 a month now,” Hainline said. “And now they want more again. We need help.”

Laurie and Rocky Weatherbee are a business couple who appear to be in their 30s or 40s. Like a great many small business owners and others who are self employed, they don’t qualify for group insurance and therefore must buy individual health coverage.

“I am an insurance agent,” said Laurie Weatherbee. “I am not here (at the meeting) as an agent, or as an advocate of insurance companies, but as a consumer. I have a Blue Cross plan because I am self employed, and have seen my rates going sky-high the past year.

“I don’t know how many rate increases I’ve had,” said the agent. “In November, I sat down and called every company in the phone book that had an individual health care plan. Some wouldn’t sell any plans - they said they are in the process of applying to get out of the state.

“Individual rates of other firms were so exorbitantly high that I couldn’t have bought from them anyway. And the coverage I’ve got - the one I thought was too high - is actually the cheapest I could find.”

But hard as it is on those who opt to retire early, the self employed, and small business owners who don’t qualify for group plans, their troubles don’t compare with the woes of workers who get downsized.

“These people really take it on the chin,” says the state insurance commissioner. “And the group 55 to 65 years old is getting hit the worst, no doubt about it.”

To begin with, she says, these senior employees are the chief targets of companies that downsize. Older workers are higher paid and higher health risks.

Overnight, they go from valued employees to excess baggage. And after they are dumped, it is much more difficult for them to recoup, find another worthwhile job in today’s market. Yet, they are unable to retire. They haven’t the resources. They can’t get Medicare.

And now they can’t get individual health insurance.

Indeed, she said, “Last year when universal health care was going down to defeat nationally, I thought, if Congress doesn’t do anything else, why not just take Medicare and step it down to age 55?

“But now politicians are so busy cutting Medicare back - you can’t even broach the subject.”

To ease the crisis here at home, Senn is throwing her weight behind a bill drafted by state Sen. Kevin Quigley that requires all insurers who sell lucrative group plans to offer individual plans as well. Individual rates could not exceed 105 percent of small group rates. Higher costs for higher risks would be spread among all insurance companies.

What are the bill’s chances?

“I think we have an excellent shot,” says the commissioner.

, 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