Will it be ‘back to square one’ with govt’s health insurance program?

By William H. Stewart
Special to the Saipan Tribune

I recall a televised forum several years ago consisting of retired people in the United States who were attempting to convince the U.S. government to make reforms in Social Security retirement and health benefit laws. Those senior citizens referred to themselves as the “Gray Panthers,” not to be confused with the more militant “Black Panthers.” They were the elderly people who had retired after years of work. At one point during a rally, a young, muscular FBI agent mounted the platform in an attempt to remove a frail 85-year-old gray-haired lady speaker from the podium. I can’t recall in detail the incident to curb the woman’s right to free speech, but I do remember her comment to the agent. She said, “Sonny, we are demonstrating for you as well.” Meaning, of course, that the reforms she and others were advocating could one day also benefit the FBI agent and his family.

I think of this incident often when reading about the serious financial condition of the NMI Retirement Fund and the Fund’s “stock holders” who are the island’s “Gray Panther” community that have retired, many of whom depend on their twice monthly payments for their livelihood. Then there are those members not yet retired—the “Young Panthers” of today. Both groups have placed their trust in the government and the Fund’s administration to maintain the well-being and integrity of the Fund and its assets. Sorry to state, I don’t see this concern exhibited by many in the Commonwealth legislature, which, when you get down to it, is more the Fund’s member’s fault than that of their elected representatives.

I read about the government’s interest in encouraging a “cafeteria style” medical and health insurance program but never read in any details as to exactly what that involves. So let me jump the gun with an inquiry—before the gun goes off.

I presume that eventually there will be a selection of insurance companies that retirees can contract with as they choose as a replacement to their current program within the Retirement Fund. I am aware that the Fund has contracted with a firm in Honolulu (other than HPMR) for the purpose of identifying companies for this purpose. I’m curious if those firms that will eventually be suggested will have been thoroughly investigated as to their financial capacity and general background experience in the field.

It would be a pity if a firm was recommended to retirees by the Fund, only to find out at a later date—and after the retiree paid a series of insurance premiums—that the firm had gone bankrupt or otherwise misrepresented themselves in the beginning, in which case the Fund or the central government might be sued for its negligence or culpability in recommending the organization in the first place. The CNMI is a now very litigious society and there are many attorneys that would take on a case even when there is only the slightest hint of impropriety.

Many local people have worked for the government for years at low wages and many, if not most, have considered the medical and health program within their retirement package as part of their employment agreement with the government. They considered the program as a form of deferred compensation along with an implied promise that if one worked for the government and paid into the retirement program it would be there when their working years were over. Now they find the very real possibility that they won’t have the program they thought they had because the government wants to change the original employment covenant.

If you have diabetes, high blood pressure, a heart condition, ulcers, tuberculosis, epilepsy, emphysema, kidney problems, cancer, high cholesterol, (LDL), glaucoma, HIV, Lupus Vulgaris, Lytigo and Bodig, Alzheimer’s, Parkinson, Hansen, IBS or one of the numerous other illnesses, you probably won’t be able to purchase medical insurance to cover your existing condition at a cost you can afford. Has the government told you that or will the bad news be left to the insurance companies to tell you? Seems to me there might be a whole lot of people in that group. Just make certain that your illnesses are confined to only a common head cold. Then you’ll be alright.

With respect to the ineligibility of medical coverage for, say, a prostrate condition which is quite common among men of retirement age, I’m curious as to whether this condition would be among the classification of SAT (Sorry About That).

It would be a great help if the Fund would publish a monthly newsletter to keep its “owners” appraised of issues of interest such as the above. As it is now everything appears to go on behind closed doors. We need a little sunlight on the inner workings of the Fund. If it doesn’t have the staff to do it, contract the effort out.

In my judgment before any privatization policy is adopted a survey should be undertaken either by the government or NMIRF to learn the number of retirees that would probably drop out and forego participating in the program due to the increased cost and or the restrictiveness limiting medical coverage for prior illness.

Certainly two questions that such a survey should answer are the percentage of the 1,890 (‘03) current retirees and the percent of the 5,225 (‘03) government employees currently paying into the fund that will:

(1) have a pre-existing illness that will not be covered if and when the system is privatized and, (2) what percent of both groups will simply drop out and cut their health and medical insurance because they can’t afford the cost for their family.

At the very least a check with CHC should be made to determine the number of retirees afflicted with any ailment for which insurance most likely will be unavailable. This would provide some indication of the number that probably won’t be able to purchase insurance coverage when and if the system is privatized and thus ultimately will be forced to rely on CHC for free treatment.

Let me forecast what I think will happen with the effort to privatize the government’s medical and health program. Aside from the fact that any new insurance firm will not cover any existing illness, the premiums will be so expensive that many retirees and active government employees will simply drop their coverage. The result being when they or their families are in need of medical treatment they will show up at CHC and receive their treatment as always—only this time CHC will not be paid and the hospital will continue to carry an ever larger record of uncollected bills, forcing it to go to the Legislature for ever increasing annual appropriations for operating capital. Result—back to square one—nothing solved and the CHC will apply to the Retirement Fund for a loan or go with hat in hand and a tin cup to Interior and ultimately the U.S. taxpayer for a “bail-out.”

Concerning the subject of payment permit me to cite a personal example to support my belief. In February, 2004 I received an invoice from CHC’s attorney stating that I have had an outstanding bill with the hospital since May 1998 in the amount of $191 as my co-payment resulting from a medical procedure as an “in-patient” resulting from a simple 20 minute catheter (well, not so simple if you are on the receiving end). Total bill: $955. CHC’s attorney threatened to turn the matter over to a collection agency. After a long and protracted correspondence, and at my persistent insistence, I attempted to make the following points:

(1) I have never been an “in-patient” in the hospital in more than 30 years as a Saipan resident; and

(2) This was the first notice over the six-year period which had lapsed since the “out-patient” procedure was performed that I had been advised (by regular mail rather than registered) of an outstanding amount due the hospital. CHC’s attorney didn’t believe me—which was tantamount to calling me a “dead beat.” More distressing, she refused to meet with me to discuss the issue any time at her convenience even after requesting a meeting and providing two weeks advance notice. I suspect I was viewed as a nuisance.

However, I did meet with Ms. Yvonne B. Sablan and Ms. Rosa Sorensen, two very helpful and dedicated staff, in an attempt to explain that I was never an “in-patient” and the amount billed as my co-payment of $191 was not correct and furthermore the amount billed to, and presumably paid by, the Retirement Fund’s medical program in the amount of $764 was also incorrect and that the Fund should be reimbursed for it’s over payment to the hospital.

The CHC comptroller researched the issue in my presence and did indeed discover that, as a result of an erroneous billing code, I had been billed as an “in-patient” when I should have been billed at a much lower rate as an “out-patient.” A profound apology was extended for their error. Problem solved, the invoice amount was substantially reduced to a lower amount.

Now here’s the “kicker”—When I asked if there would be a refund made to the Retirement Fund for their overpayment, I distinctly remember being told by the CHC official “No, because the Fund never pays it’s portion anyway.” This being true, I could never figure out why CHC was prepared to sue me for 20 percent of the total but not the Fund for the other 80 percent.

Even though I didn’t have to do so, I accepted the apology, wrote a check and donated the full $191 and told the hospital staff to give the money to their favorite charity. I had to prove I wasn’t a “dead beat”—only a “beaten down” unappreciated economist.

(Stewart is an economist, military cartographer, historian, and an occasional contributor to the Saipan Tribune.)