Health care bill will alter Medicare

I would like to start this month's column with an update to my May column. In that column, I explained that I had written to 20+ government officials, both elected and appointed, regarding my observations and opinions of the Medicare system.

The letter was mailed on May 1 and as I write this, on July 29, I have had a response from three recipients. For this I would like to publicly thank Sen. Patty Murray; Mr. Daniel Schreiner, the Medicare beneficiary ombudsman; and Teresa Decaro, an acting director at Medicare, for their responses.

Of the three responses, the one from Ms. Decaro at Medicare provided specific details that showed she had actually taken the time to read my letter and respond thoughtfully.

The others were basically form letters thanking me for taking the time to voice my concerns.

To those other recipients, including President Barack Obama, Rep. Norm Dicks and Kerry Weems, CMS administrator, I say, "Shame on you for not having your staff have the courtesy to reply."

Talking of President Obama:

I have had numerous conversations with friends and clients about the upcoming health care bill that is likely to become law in one form or the other.

People are concerned about their own coverage but also about me as an insurance agent. From everything I have seen and read, Medicare recipients will face the least number of changes. While Medicare benefits may be reduced slightly, I am sure that the supplemental policies most people have will pick up the differences. This will, of course, lead to higher supplemental premiums.

Medicare recipients who are covered under the Medicare Advantage plans also will see some changes in either the premiums or benefit levels, as funding for those plans is guaranteed to be lower.

People under 65 who are not on Medicare will face the most changes but it is too soon to speculate on what those changes will be. Once they become more apparent, I will keep everyone apprised of the situation.

Regarding me personally:

Will I be out of a job?

The way I look at it is, if those people on Medicare need a supplement to their government coverage, why would anyone under 65 also not need some form of supplemental coverage? So I see the market place exploding with opportunity, not shrinking or disappearing.

As of July 26, Washington state has altered the Standard Health Questionnaire for those persons applying for individual health insurance.

While the questionnaire still has more than 200 questions to determine eligibility, the number of people required to complete this form has decreased.

COBRA changes

Previously, a person had to wait until their COBRA

coverage was exhausted before they were eligible for guaranteed issue health insurance. However, as of July 26, a person need only be eligible for COBRA after being on a group plan for two years to be eligible.

This primarily will affect people who retire early or are out of work due to a disability. The COBRA programs available through their employers generally are very comprehensive and correspondingly have high premiums.

These people now can purchase individual coverage on a guaranteed basis and can tailor a plan to meet their needs and also their budget.

Talking of change, this last item really slipped under my radar. I was not aware of this until recently, so I am guessing a lot of other folk are not aware of this also.

Lower CD rates

When Kitsap Bank took over Westsound Bank a couple of months ago, it made all the local news. People were relieved that their savings were safe and sound, and no one lost a penny of his/her deposit investments.

What I was not aware of, was that Kitsap Bank sent letters to the holders of Westsound certificates of deposit (CDs) and arbitrarily lowered the interest rates they were going to pay. So people who had bought CDs from Westsound in the 4-percent range now found themselves with CDs paying in the 1- to 2-percent range.

Because Kitsap changed an existing contract, they waived any and all penalties for people who want to shop around for higher rates. That was nice of them.

Be careful out there and please read the fine print. The devil is in the details, don't you know?

Phil Castell is an independent insurance agent in Sequim. He can be reached at 683-9284 or

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