The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Federal Judge Finds Individual Mandate Constitutional

Posted by Alan on October 7, 2010

Challenges to President Barack Obama’s health care reform legislation aren’t coming just from Republicans in Congress. Several law suits are challenging the constitutionality of the Patient Protection and Affordable Care Act, too. While various theories are being used to attack the legislation, most focus on the the individual mandate in the PPACA – a provision that requires all Americans to obtain health care coverage starting in 2014.

While the biggest case, brought by 20 states, is being heard in Florida, a Michigan Federal Court judge is the first to actually issue a decision on the merits of the new health care reform law. Judge George Steeh ruled against the plaintiffs, finding that the individual mandate did not exceed the federal government’s authority under the Constitution’s commerce clause. The plaintiffs in the case, who also claimed, among other complaints, that the penalty to be imposed under the law for failing to obtain health care coverage was an illegal tax, have vowed to appeal Judge Steeh’s ruling. Specifically, Judge Steeh denied the plaintiffs request for a preliminary injunction that would have stopped the reforms.

According to the Los Angeles Times, Judge Steeh cited the impact failing to be insured causes on the health care system as a whole. “Far from “inactivity,” by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants….” He also noted that, in the context of a health care reform bill that requires carriers to accept all applicants regardless of their medical condition, an mandate on individuals to be insured would be undermine the nation’s health care system.

This argument, that forcing carriers to guarantee issue coverage without a balancing requirement for consumers to obtain coverage would lead to adverse selection leading to ever higher premiums, is frequently made by policy makers and others (including me) justifying an individual mandate. What’s different is that the judge defines the failure to obtain medical coverage as an economic action that, while locally made, impacts interstate commerce. “[P]laintiffs in this case are participants in the health care services market. They are not outside the market. While plaintiffs describe the Commerce Clause power as reaching economic activity, the government’s characterization of the Commerce Clause reaching economic decisions is more accurate.”

Judge Steeh’s decision is not binding on other courts, although it will no doubt be cited as precedent by the government in defending against the other law suits filed against the PPACA. Decisions in these cases will be coming relatively soon: a suit brought by the Virginia Attorney General is scheduled for a hearing on October 18th while a hearing on the suit in Florida is scheduled for December 16th.

Ultimately, the Supreme Court will no doubt determine the constitutionality of the Patient Protection and Affordable Care Act. Judge Steeh’s decision is simply the first of many court rulings to come.


46 Responses to “Federal Judge Finds Individual Mandate Constitutional”

  1. JimK said

    Judge Steeh’s ruling:

  2. JimK said

    The following link is to the decision in the Florida case. The Judge allowed two Counts to continue to Hearing. The two counts are 1) The Individual Mandate and whether the Penalty(Judge agrees penalty is not a tax) Provisions exceed Congressional Authority; 2) whether the provisions to expand Medicaid are coercive.

    Judge dismmised 4 other counts.


    I incorrectly stated in a previous post that even if the States opt out they would still be responsible for establishing coverage consistent with the PPACA. According to the decision this process would fall to the Federal Government.

  3. Alan, I have followed many of the comments your article has elicited. The trends are like the comments on my own blog a couple of weeks ago. People have forgotten that your article was about a legal judgement on a matter of constitutional law. It has devolved into moral arguments. Perhaps you need to write a follow-up detailing the difference between the letter of the law and the spirit of the law. They are not always the same.

    • Insurance Barn can I just call you “Barn”?,

      Perhaps what you’re observing is that posting members aren’t as concerned about the constitutionality of the mandate (that has been established) as they are the philosophy of our government, big and oversized or small and non-instrusive, promoting “Individual Responsibility” as opposed to “Societal Welfare-ism”.

      Frankly, “Barn”, I think that this discussion can be useful as long as it is seen with the perspective of “Mandating” certain “Social Consciousness” regarding relying on others to carry one’s baggage when they are perfectly capable of carrying it themselves.

  4. Ann H. said

    All very valid arguments. No doubt the arguments about the constitution, our rights, our freedoms and our responsibilities are valid, albeit a little bit off point.

    On just the point of health care reform, you can’t have “must cover” if you don’t have “must carry”. Insurers can’t cover all people, all conditions, all the time unless they are guaranteed a large and varied risk pool without adverse selection. Must cover” is a siamese twin to “must carry” and they can’t be separated.

    Looking at the problem from a macro economic standpoint, it’s one of 3 answers. 1) Must cover/must carry. 2) Universal nationalized health care. 3) Underwritten policies with some reform.

    If it’s must cover/must carry, then the individual mandate needs to be higher than $700 or this is a moot point. If it’s universal healthcare (gulp), funded through involuntary taxation (gulp), we have lots of new issues to solve. If it’s back to the system of individual choice and underwritten policies, we still need to bend the cost curve by controlling the true drivers of health care costs, and we still need to provide access to people who cannot afford or cannot qualify for an underwritten policy.

    Anyway you slice it, we have big problems to solve. This administration made a choice and it was must cover/must carry. They did it badly. If the individual mandate is removed the must cover/must carry answer is dead. I’m not against having the individual mandate removed, mind you, but that’s not my point. The must cover/must carry option needs an individual mandate (one stiffer than $700), or it won’t work.

    If it doesn’t work, that leaves 2 more options. Let’s hope the “nationalized healthcare” people aren’t in office at that time. The last option is to properly reform the current system of individual choice, insurer underwriting decisions, and the true drivers of health care. For me, personally, that’s the preferred choice. But it’s not the choice on the table right now. Unless we repeal (or drastically weaken) the ACA laws, then must cover/must carry is the road we’re on. If we remain on that road, the individual mandate must be stiffer than $700 or the old & sick will take the insurance and the young & health (or risky or irresponsible) will not.

    I understand that killing the individual mandate is the way some people want to kill the ACA law. But it’s kind of a wild bullet method. If they manage to kill the individual mandate, (the must carry portion of the law), but not repeal the whole law, then the “must cover” portion becomes extremely expensive. Premiums spike and things get worse. Catch 22.

    Actually, the Republicans in their pledge said they want to keep the “must cover” portion with no exclusions for pre-existing conditions and with guaranteed issue for all applicants, but without the “must carry” requirements for individuals. Won’t work. But perhaps the Republicans know that, and since most people like the “must cover” part but not “must carry”, this is just campaign rhetoric to get elected. Once they get elected, if they don’t have an individual mandate with a strong penalty (higher than $700), they need to start over with new health care reform. Let’s hope they do it right this time.

  5. Jim Sugden said


    Please take one point away from my comments. The constituional challenge has very little to do with the INDIVIDUAL MANDATE!

    Yes, an enforceable mandate is needed in order to enact universal coverage. However, it comes at a price. (no matter how small in dollars) That price is the sacrifice of a principle – the principle that a person should make their own decisons and be responsible for their own actions.

    The mandate represents another step in the continued invasion of our private lives by the federal governemnt. It is up to us to decide a which point we draw a line. Is it here, with the mandate that we buy a product just because we are legal residents of this country?

    My dividing line may be the requirement that I buy a product. Yours may be the ability of governemnt to dictate your diet or the college your child can attend because the “common good” requires that they train in a certain field (after all we need more engineers don’t we?)

    The argument is about freedom. If government continues to believe that we are too stupid and too irresponsible to make our own decisions and suffer the consequences then anything is possible.

    • As a health insurance broker, I whole heartedly agree with the mandate to purchase health insurance. I am weary from searching for affordable options to rescue my clients from double digit renewal rates. I know that there are many factors that contribute to the high cost of health insurance but it does not take a rocket scientist to figure out that if we had more people paying into the insurance pool then the hospitals and doctors would not have take on so many charity cases. It is not fair for the paying public to bear the burdens of those who will not make the financial sacrifice to pay for their health insurance. For those who cannot qualify medically for health insurance or are below the poverty level, then we need to give them some assistance. We need our government to protect our rights and that includes the right to health care. We should not turn our backs on those that really need the health insurance but it is a harder pill to swallow if that person who became sickly did not purchase the health insurance when they were healthy. The purchase of health insurance is a necessity not a luxury and if you don’t understand that principle then you need to be prepared to pay a hefty penalty. If everyone stops paying for their health insurance then the quality and deliverance of health care will go down the toilet.

      • Jeanette,

        I concur.

      • brett said


        As an insurance broker myself, I am shocked that you believe the individual mandate will drive down the costs of insurance premiums. Insurance costs reflect the costs of health care. PPACA has done nothing to mitigate the actual costs of health care. Just because you mandate each person to buy insurance does not guarantee in the least that insurance premiums as a whole will decrease. If you really want to help your clients and the rest of our fellow American citizens find quality insurance plans at a reasonable price help support efforts calling for TORT reform, lowering the price of prescription drugs, value-based health plans, etc. We can not logically expect doctors to lower their costs when it takes half their salary to pay for E&O insurance due to the fact that our country has become sue crazy. If a doctor prescribes his patient to the best possble method our technology can provide, to fight diabetes lets say, then that doctor should be safe from any lawsuits because he prescribed to the best practices our country could provide. Why don’t we lower the number of years for a prescription drug patent, that way other companies can create a generic alternative in a timely manner. Or go a step further from an industry standpoint and have insurance carriers offer value-based health plans that provide incentives for its participants to get an annual physical, perform standard lab tests and fill out a health questionairre every year which will result in early detection. Think of our current health industry as an upside down pyramid with the majority of our insurance money going towards major surgeries and costly procedures and the smallest protion going towards preventive care or early detection. Now imagine if we flip that pyramid right side up with the more of our money and efforts going towards early detection so we dont have to perform as many of those costly procedures. I also would like to add that the American people as a country need to start actively participating in getting healthy. With the obesity rates rising and more junk food restaurants opening our health care costs can only continue to trend upwards. No wonder healthy people currently choose not to participate in our insurance market, do they deserve to be punished because more of us are becoming unhealthy? It’s called accountability and its what we try to teach our children everyday.

        All of us in the health insurance industry are tired of reporting negative news to our clients and of course we all have tried our best to have our voices heard. Unfortunately, our voices have fallen upon deaf ears in the White House no doubt due to a political agenda that has superceeded the best interests of American citizens. If you take the time to research the bill and dive into the direction we are heading in 2014 you can easliy see we are moving towards socialized medicine. For example, if small businesses would like to qualify for the small business tax credit in 2014 they can only do so if they purchase a plan in the insurance exchange. Can you guess where struggling small businesses will turn when they can no longer pay for premiums without the tax credit? What makes this piece of legislation even more important to the rest our colleagues and clients is the fact that now unlicensed health care navigators, which are hired through the government, now have the ability to advise individuals on which insurance plan to buy. These so called “navigators” are not licensed by any state nor are their interests in line with idividuals searching for health insurance. They are government employees! I pray you take the time to broaden your knowledge of what was really passed and is now being implemented.

        Thanks, Godbless America, and America Bless God

        • One question: Who pays for all of the uninsureed that end up in the hospital?

          How are those costs absorbed into a system that is already taxed and laden with all the frailities that you describe?

          Ask any doctor how they feel about the individual mandate…they are estatic.

          You have good ideas that will work and I hope that they are implemented but I still agree with the individual manadate because I feel that if we don’t have one then people will continue to forego health insurance and then be a burden on our already taxed health care system.

          I say implementing the individual mandate is one small step for health care reform and one giant leap in the right direction.

        • Brett:

          I strongly agree with Jeanette.

          The American public is pathetic and irresponsible. We have become a society that relies on “Societal Welfare-ism” instead of “Individual Responsibility”. Too many of our citizens that can afford coverage don’t carry it because they can’t see further than Reno, Las Vegas, or the closest casino from their home. Or they want that big-screen TV that has 3-D. They do not want to invest in insurance, no matter who it harms in their family; spouse, children, whomever.

          Instead of our continuing to perpetuate a Welfare-based society, let’s promote a society based on “Individual Responsibility”, as those of us who are 65, or close, remember being raised.

          One of the few things about ObamaCare (PPACA) that I like, besides some of the Insurance Company Reforms, is the Individual Responsibility Mandate. It’s about time.

        • Ann H. said

          You know guys, sometimes multiple answers fit a single question. Brett is right and Jeanette and Spencer are also right (in my humble opinion of course! Laugh). Your viewpoints are not mutually exclusive. Sometimes an answer gives a 10% solution to the problem and another answer adds another 25% solution and so forth until we (hopefully) add up to 100%.

          For instance, adding 30 million uninsureds to health care insurance resolves some of the cost-shifting that happens when the uninsureds use the emergency room. But analysts say the “uninsured” cost-shifting only adds $1100 a year to the average family’s premium. With prices this high $1100 is only a partial fix. The worst cost-shifting is caused by low-payers like Medicare, Medicaid and other governmental programs. (Think how much that will affect us in 2014!) So, adding the uninsured to insurance rolls is just a cost-shifting of the cost-shifting. Currently we pay extra premiums to pay for uninsured people who misuse emergency rooms, and now we are going to pay taxes for previously uninsured people to get insurance to pay for their health care at emergency rooms or a more reasonable point of service. It’s all the same people and all the same dollars. Other than the fact that they may seek less costly points of service than an emergency room (at more appropriate times than an abject emergency), and other than the fact that 30 million of them will completely change the laws of supply & demand of services by primary care physicians, we have really changed nothing. Adding 30 million people to a cost-spiraling system is kind of like pumping air into a flat tire without plugging the hole. Cost shifting from here to there solves nothing. Obama is cost shifting when he says it will lower the deficit and save money over 10 years. He’s talking about the federal government only. It INCREASES costs to the states, taxpayers, consumers, health care providers, medicare recipients, insurers and businesses. The only thing it decreases is the federal deficit (if you believe their math), only after investing a trillion dollars into it (if you believe their expense tally). Cost shifting magic.

          Nonetheless, there is wisdom in the idea of taking those people off the “free healthcare at the emergency room” system. It’s a partial answer to a complex problem, and I must agree with Spencer and Jeanette that we need to solve the “uninsured free loader” problem. I worry, though, that irresponsible people will persist in their irresponsibility. How many people signed up for the national high risk pool’s pre-existing condition plan? A piddly number. Last time I looked it was 1200 people in the 22 states that use the federal plan. Why such low enrollment? It’s too costly? It wasn’t marketed well? (they should have used brokers!). The deductible is too high? (reality check!) The prescription coverage is piddly? (reality check!) They can just use the emergency room anyway? Many people have no intention of paying for insurance if they can free-load no matter what programs are available? The answer is probably a mixture of all of these. In year 2014 we will have the same problem with people not enrolling. As a matter of fact, they estimate that 30 million people will join but something like 58 million are actually uninsured. The numbers change with the wind, but clearly the administration understands that about half of those people might leave the “emergency room free-loader” system and take the “tax subsidized premium free-loader” system. The other half will stay uninsured. We have that problem now and we’ll have it later. Currently, at emergency rooms & clinics social workers enroll people in Medicaid and other programs, because the patients are ignorant of the resources or lack interest in pursuing them. Not everyone will want to sign up, and a $700 IRS penalty is nothing to people who don’t file taxes anyway. Some of them don’t know what “IRS” stands for. I’m not disagreeing totally with Spencer & Jeannette, because I agree that it’s a partial answer and has wisdom in it. But it seems futile given the enormity of the problem, the absurdity of the cost, and the small scale of the partial fix.

          I also agree with Brett. How could anyone argue with Brett’s comments that some things that will control root health care costs include Tort reform, lowering the price of prescription drugs, value based health plans, a healthier society, etc. Well, maybe lawyers & pharmaceuticals could argue… But Brett is looking at it from a root driver viewpoint and he has such a valid point. Still, it’s a partial answer with all the other complexities in the system.

        • Ann,

          I just read your analysis/commentary (:)) and am impressed with your being able to touch on so many different shades of coloring on this issue.

          I agree, the penalty for non-compliance is too low, as also mentioned Alan in his opening remarks. It should be at a level that will cause a noticeable financial “hit” for those who elect to pay the fine rather than purchase coverage.

          Regarding Lawyers, no question whatever that you are “on point”. I think that it is important to remember, when wondering (if anyone wonders) why the one specific profession untouched by “Reform” is the Law, that approximately 40% of the House and close to 60% of the Senate are comprised of members who previously worked in one component of the Legal Profession. Those are overwhelming percentages, and it is clear to me that those who come from the Legal Professions are protecting their own. Can there be any other answer given the many times that Tort Reform has been proposed, never to pass?

          Issues regarding Big Pharma are easier to analyze. An article in today’s issue of the WSJ commented that since ObamaCare has taken effect (those parts that have) Rx charges have gone up. Of course they have. Obama had secret, closed door meetings with Big Pharma in which certain deals were struck, one of them being that buying meds from Canada, or any other country, would be illegal. Other deals with Big Pharma were also struck with the Obama White House in order to get Big Pharma on-board the ObamaCare boat.

          There were other backroom, closed door deals struck, with Unions, at one point the AMA, and other entities Obama and/or Democrat Members of Congress deemed necessary to the passage of HCR into law. None of these deals, of course, were in the Public’s best interest, they were in the best interests of each separate entity with whom a deal was cut. The latest in this strange land of ObamaCare is the recent granting of waivers from the HCR Law by Kathleen Sebelius to over 50 major companies who have been covering a number of their employees on “Mini-Meds”, beginning with McDonald’s, and including Staples, Home Depot, and many others.

          I take great umbrage with this law, the very negative effects the IRS reporting rules are having on small businesses (most of us are a small business), and the exceptions now being made which certainly “smack” of political “shenanigans” on the eve of the mid-term elections.

          All of that said, I still applaud a component of ObamaCare that I see as a mandate to promote “Individual Responsibility” to a public too long used to being irresponsible.

        • Ann H. said


        • brett said

          To Ann, Spencer and Jeanette,

          These are the types of discussions that needed to be brought to light for the American public prior to the passage of PPACA. I truly appreciate all of the responses you folks have submitted for this blog and I look forward to reading your ideas in the future. I have to agree with Ann, and I’m sure we all do, that this individual mandate is not the fix all that will reduce insurance premium costs. It is a mere Band-Aid trying to cover a gaping wound. I would love for the entire country to realize how important health insurance and that if everyone purchases it premium costs would be slightly lower for everybody. However, the problem I have with this requirement is that it is forcing people into commerce without their consent. Our country is blessed with plenty of intelligent people who can brain storm a better way of reducing premiums than forcing every individual to purchase insurance or pay a penalty. The true problem was this legislation was rushed through Washington without the time it required to fully understand what its impacts would be nor did it address the real issues plaguing our health care industry.

        • “These are the types of discussions that needed to be brought to light for the American public prior to the passage of PPACA.”

          Brett, you’re right. Unfortunately, the Obama WH and the Democrat controlled Congress really didn’t want to hear any of our thoughts (from Insurance Agents?) and didn’t ask for input, from anyone.

          I agree that the “Individual Mandate” probably won’t do what it could have done had the penalty for not carrying coverage been set at a ridiculously low limit. That said, and I’m only repeating myself, it is the first step I’ve seen in over 40 years of the Public being told that they must become responsible, individually, for the decisions that they make in life. Many of us could say, “If I only had a nickel for each time some fool said he/she would never need [fill in the blank] insurance because:

          1. They took really good care of themselves (never met or heard about James Fixx, obviously).

          2. They took care of their children, and now if they need care their children can take care of them.

          3. “We’re spending our children’s inheritance” (I think that’s a bumper sticker). That’s nice…it is your money.

          4. “Please leave your card so we can call your boss and tell him what a good job you did.” Oh, God, don’t do that! I am the boss and if you aren’t interested then I did a lousy job of educating you!

          Brett, we have spent over four decades creating an “Entitlement” philosophy in this country, and if it doesn’t change, we will go much further down the drain than we have to this point.

          Therefore, anything that exists in the HCR law that dictates “Individual Responsibility” is good by me, and if you’ve read any of my many posts on Alan’s very well done blog, then you’ll know that there is little about this law that I like; most specifically, the way it was passed into law against the clearly stated wishes of the majority of the electorate.

        • Ann H. said

          Brett, your wisdom was packaged with a discussion on another issue, and it was easy to overlook. I was impressed with many things that you said.

          You ended your last comment with, “The true problem was this legislation was rushed through Washington without the time it required to fully understand what its impacts would be nor did it address the real issues plaguing our health care industry.” So true!

          Thank-you for your kind words, and also for the wisdom you’ve shared about bringing down root costs. In our discussions about what HAS been done, we sometimes overlook what SHOULD HAVE BEEN DONE. I really like some of the issues you brought up in an earlier post like “TORT reform, lowering the price of prescription drugs, value-based health plans, etc”, and another place where you advocated for “incentives for participants to get an annual physical, perform standard lab tests and fill out a health questionairre every year which will result in early detection” and another place where you said, “the American people as a country need to start actively participating in getting healthy. With the obesity rates rising and more junk food restaurants opening our health care costs can only continue to trend upwards.”

          These are ROOT CAUSES, and if we modify them we can bend the cost curve back down. I believe some will object that our civil liberties are violated if we are asked to complete annual health questionnaires or get physicals. Currently, discrimination issues abound over employer sponsored wellness incentives. But somewhere, somehow we will have to step on some toes in order to become healthier and in order to afford health care costs.

          How about extra taxes on junk food like there is on cigarettes? Or perhaps tax incentives to fast-food and convenience stores to push healthy alternatives? Yes, it’s opening a whole new set of issues, but at least it’s not scapegoating the insurance companies who are simploy payors of the expenses.

          Consumers must become more engaged, not only at the dinner table but also at the checkbook. There’s no transparency in our health care system. Do you buy a TV, take it home, and then find out it costs 10 times more than you imagined? Many employees don’t even know the true cost of the premium, much less the true cost of the Dr. visit or the hospitalization. Many doctors don’t even know the retail price of the medicines they are prescribing, nor the comparative price of a generic or formulary alternative. How can we control prices when they are cloaked? We need transparency, and some of that only comes when the consumer is responsible for more of the cost (like in an HSA). Add to that the 3rd party payor system, where the payor isn’t the consumer, but the payor is an insurance company funded by employer paid premiums (and tax subsidies). The consumer is a tiny fish in a big pond, and this system will weaken anyone’s grip on responsibility to control costs.

          There could have been some very sound elements to this bill, that would have effectively bent the cost curve, but they were overlooked. I understand that those who work in fast food, pharmaceuticals, doctor’s offices and hospitals may not like this any more than insurers & brokers liked an overhaul of our current system. But we could still keep some of the insurance reforms. Brokers usually agree that there is room for true reform in our own industry. I am sure that professionals in the health care field feel likewise about their industry. We can tread carefully and still be effective. This should not have been ramrodded behind closed doors.

          Thanks again, Brett, for your input. You, Spencer, Alan, and many of the other commentators on this blog have taught me so much, and have given me a solid affirmation of deep instincts that I had but was afraid to voice until I heard others voice it, too.

    • Jim,

      I understand the point you’re trying to make.

      My point is that attempting to adhere to your point is, at this point, a day late and a dollar short. Not to mention about 70 to 80 years too late, given the dates of enactment of Social Security, Medicare, Medicaid, and a handful of other Entitlements.

      We must now decide which mandates make sense, and which do not. Mandates requiring that all Americans carry health insurance or sign up for an alternative (Medicaid, for example) make a great deal of sense. These kinds of mandates, that require that all citizens be “Individually Responsible”, make far better sense to me than having a system that allows individual citizens to be irresponsible and end up with me (the Taxpayer) paying their way. I, for one, am sick and tired of Individual Citizens deciding that they choose to be irresponsible, and then end up on the “Public Dole”.

      It’s that simple.

      • One more point about making sure that the uninsured pay for their own insurance. It is not so much to cover their costs in case they get sick or have a traumatic accident, it is also to help carry the load or burden for others. At any given point in time, we have loved ones, friends, and even strangers who occupy hospital beds. This care is costly regardless of who is paying for it. I never give a second thought to what I pay each month in health insurance premium because I know that one day I will likely get sick or end up in the hospital. Therefore, I never feel like the money that I am paying towards health insurance is a waste if I have not used it for that month.

        This is the way insurance works- we need everyone paying into the system to make it easier and better for everyone else. So bring on the individual mandate because it is benefits the greater majority even those that are healthy!

        Case in point, I am writing this from my mom’s hospital room. She is healthy but she ran over a tire going 65 miles an hour and now has a fractured sternum, neck and back and we are in the ICU. So you never know what life’s misfortunes might bring you, even if you are healthy!

  6. I just finished watching the Frost/Nixon Interview movie and was inclined to post a few thoughts:

    Anyone as old as I (65) may remember that time. I do, well. I was absolutely convinced of Nixon’s culpability in “The Watergate” as I am today.

    I’m also reminded of the moment, during that time, when Vic Hanzeli, the King County President of the King County Democratic Party asked me to run for the King County Democratic Central Committee. I asked Vic to help advise me on what I should do to campaign. It was 1974, and I was a very young politically involved Democrat, Precinct Committee person then. I was only 29 years old.

    Vic’s answer to me was “Nothing.” “It’s already been “arranged” (read “fixed”).” I resigned from the Democratic Party the next day, infuriated that the Party in which I held belief of ethics and integrity, was a corrupt as the “Party of Nixon”. I remained an “independent” for the next 29 years. I then agreed to be the Chairman of the man who became, “Representative Phil Dyer”, Chairman of the House Health Care Committee in WA State. As Phil was a Republican, I thought it only appropriate that I join the party. I almost resigned as soon as I had been elected as a King County Delegate, read the Party Platform, and was disgusted at the racist tone of the “message” in the platform. Many so called “Lincoln Republicans” called me to convince me to stay the course (I had made a very strong and angry comment at the King County meeting, met with derision, though many walked out with me).

    I agreed to stay, and did, until Phil (thank God!) quit after three successful terms. He said he quit to save his life, and mine. I resigned from the GOP the next day.

    Today I am a “John Avlon independent”, beholding to no party, and no one. I only vote my conscience, and for the person I consider the most able.

    Why all this, here? Because, dear friends, we are in another really stressful time. The mid-term elections are just around the corner. I urge all of you to vote your conscience, not a partisan line. Neither party is clean, they are both corrupt. I view the Democrats as being “Anarchistic Corruption”, and the Republicans as being “Focused Corruption”. I don’t trust either party. As a result of the Dems, including the “Blue Dogs”, folding to the Administration and the Pelosi House and the Reid Senate, the Dems are really on my “Sh*t” list. That said, the Republicans, in my opinion, are shooting themselves in both feet by pandering to the extremes.

    Vote your conscience, friends, only vote for those in whom you have a measure of trust.

    In any circumstance, Vote!


  7. I view this ruling with mixed emotions. On one hand I agree that the “mandate” in the PPACA is required to prevent adverse selection. On the other hand, I am not able to find the words,”adverse selection” in the US Constitution. In my opinion, either the Michigan judge ruled out of pragmatism and ignored the US Constitution or the attornies were inadequate to the task of arguing a constitutional issue.

    The last time the federal government attempted a mandate regarding the purchase of a commodity was Prohibition and it required a Constitutional Amendment with a popular vote of 2/3 of the states. Congress was not allowed to make a final decision. The issue was presented to all citizens and the majority of citizens agreed to Prohibition. A decade later, the people, not congress or the president, recognized that Prohibition was a failure and again voted to change the US Constitution.

    If the Constitution is to be superceded by pragmatism, why do we even have it? Is it time again for a Constitutional Convention?

  8. Jim Sugden said

    The argument regarding the individual mandate is actually two arguments; one of function and one of principle. As a matter of function, an enforceable individual mandate is one of the few tools available to assure widespread participation in a mandatory and compliance with a national health plan. In truth, inclusion of health premiums in our income or sales taxes is probably a more effective enforcement system. If our only concern is making the system work, forget about small penalties, pick up the entire premium through taxation.

    The matter of principle is one that many folks either don’t understand or claim not to understand. The question is “how far will I allow my government to encroach into my life and liberty”? This is a question posed on principle by many who, just like me own health insurance and have no intention (yet) of dropping it.

    If the government can dictate that we buy an insurance product, specifically, one that meets their specifications, for “the common good”, what else can they compel? Can they dictate the specs of the car I drive? Can they meddle in my dietary choices? Can they impose rules on whom I may marry or how I plan my family? Surely, management of the population including its health and gender characteristics might be essential to “the common good”. It’s not so far fetched, China has a governemnt supported one child policy and we don’t seem outraged by that.

    The question of principle being asked is where does the mandate take us in constitutional terms?

    Another factor for governemnt to remember is that the power of a judge to interpret a law is only as powerful as the government’s will (and ability)to enforce it. Think prohibition and drug policy.

    • Mark said

      The government doesn’t dictate the car you drive. The government (state) does dictate that you have auto insurance

      • Jim Sugden said

        Sorry Mark, the government already does dictate to some degree, the car you buy or at least, many of its specs. Try importing a noncompliant car into California from Europe and it won’t be allowed off the ship. If you wish to register your car, you must own auto insurance, however, no on is compelled to buy a car in the first place. It’s a piviledge to drive and we have agreed to government regulation of the roadways. Auto insurance, leash laws, no littering laws, these are all sociial contracts that we allow.

        But, my questions is about not that. My question is of the degree of imposition we give our government. Under PPACA Government now dictates that you buy a product; health insurance. Not to exercise a priviledge, but because you are alive and a citizen of America. What’s next? Mandatory purchase of Organic only foods? A firearm to promote personal safety in dangerous cities? Governemnt mandated CPap machines if you fit the diagnostic pattern? It might reduce national healthcare costs and doesn’t cost nearly as much as a insurance health policy.

        My point is this (and it has very little to do with reforming health care), once we allow governemnt to compel us to purchase a product simply because we are alive in this country, we have crossed a line and we don’t then know where the journey will end.

        For those of you who feel that this argument is irrelevant because this administration will never impinge on your rights, remember legal a precendent gets used by all future administrations and administrations change hands regularly.

        • Jim,

          WOW. This issue of the Individual Mandates sure seems to have opened a hornet’s nest of “Differing Opinions”. What surprises me most is that while many of our “Societal Entitlements”, I.e. Medicaid (Welfare…it is what it is, and I don’t like euphemisms that make it “sound better”…it’s like saying “Undocumented Workers”…Many Illegal Aliens do NOT come here to work), Medicare, State Industrial (L & I in some states), Worker’s Comp, Un-Employment Benefits, yada, yada) seem to rouse little real interest, but this Individual Mandate to buy Health Insurance is generating a real opposition. Why is that?

          In my many years working with the public, and the many times I heard potential clients say, “Heck, I’ll just spend down and go on Medicaid like everyone else.” and would say, “If you want to risk everything that is your business, but why not sign a letter that says that if you lose it all, the Taxpayers will not have to be responsible for you.”

          I am as Fiscally Conservative (Socially very liberal) as most people whom I know to be fiscal conservatives, and don’t want anyone telling me what I should do, However: I am a responsible person. That is how I was raised. I began carrying my own individual health insurance when I was 21 (no, it was not provided for me). I have never NOT carried car insurance, or Life insurance. I have never “stiffed” a debt. I have always met my responsibilities. Yet, I know plenty who have not. They rely on OPM (Other People’s Money) to help them when they are down because they didn’t bother to help themselves.

          The Constitution continues to be brought up, as in the lawsuits launched against ObamaCare because of the “Individual Mandate”. I haven’t seen lawsuits against ObamaCare because it was rammed through Congress against the wishes of the majority of the Electorate. Where in the Constitution does it say that we will allow rich people, or even simply people who are doing well, to go uninsured, lose everything, and then rely on others to carry their load? That isn’t to be found in the Constitution any more than “Adverse Selection” can be found, yet it is expected that a “Civil Society” will take care of those who have lost everything, and we don’t ask them to meet a litmus test explaining how and why they lost everything. All they need to do is prove that they are broke.

          Jim, and those others of you who think that the “Individual Mandate” is Unconstitutional, I think that there are times when we must insist that “Individuals” must display and exercise “Individual Responsibility”. While I take umbrage with many of the components of ObamaCare, this isn’t one of them. In fact, the penalty for not carrying coverage is ridiculously low. Alan made that observation in his commentary and I agree with him 100%. Were I able to be the USA King for a Day, I’d also make it mandatory that those who earn over a certain means tested amount of money, or have that amount of money in assets, carry LTCi. No, no “Government” LTCi program, I think that our government sucks, and most politicians are corrupt. I would like to see those among our 300,000,000 citizens who can afford to be responsible, be required to act responsibly. Something has gone very wrong in our country, over the last five decades, and as a result the Government is now expected by far too many to do far too much to require the taxpayer to pick up the slack for the far too many who won’t behave in a mature and responsible manner.

          Until we start mandating “Individual Responsibility” and demonstrate that a philosophy of “Societal Welfare-ism” is nothing of which to be proud, this country will continue to wither.

          As a matter of fact, I find the “Individual Mandate” to be very Conservative in thought, not Liberal. Surprising, given the apparent primary philosophies of the current Administration and the majority of the current Congress.

          [Jim, your URL to your site is entered with the word “exchange” misspelled. A couple of letters are misplaced (“hiexchnage”, instead of “hiexchange”). Just thought you’d like to know.]

        • Mark said

          So health insurance is a privilege?

    • brett said


      I think the point you are making about the principle argument regarding the individual mandate is spot on. There is no doubt that those individuals who have the means to purchase health insurance should take the responsible route and buy insurance. I was raised with the idea that acting responsible not only benefits yourself but all those around you, which clearly is the case with purchasing health insurance. With that said, I agree with Alan and Spencer’s argument that our country/industry is in need of everyone purchasing health insurance. It is the responsible thing to do and everyone should participate.

      However, I am a firm believer in limiting the power of government and I don’t think responsibility can be forced upon our citizens. The revenues generated from taxing those who do not participate will not go back to the insurance companies to help off set our premiums. It will go directly to the goverment and they will have the ultimate power to send that money where they feel is appropriate at the time, which doesn’t necessarily mean it will be spent in our best interest. We are currently witnessing the greatest government spending spree in history, allowing them to manage more money is like giving a 16 year old girl a credit card for Tiffany & Co with no maximum limit and expecting her to only spend $1000.

      We are approaching a very dangerous time in our Nation’s history and if we don’t start paying attention to what is really going on in Washington and around the country we may lose the America that we once knew. I am not saying that the individual mandate is the end of America as we know it, but I believe it is one of many steps in the worng direction. My biggest fear is as you stated,”how far will we allow my government to encroach into my life and liberty?” I believe a better answer is out there we just have to open our minds to recieve it.

      On a side note to Spencer: I am thoroughly impressed with the level of facts and passion you bring to your arguments. I can tell you have been in the business for sometime now and I look forward learning more from you.

      • “On a side note to Spencer: I am thoroughly impressed with the level of facts and passion you bring to your arguments. I can tell you have been in the business for sometime now and I look forward learning more from you.”

        Wow, what a nice compliment, Brett! In candor, I”m not used to that! You made my day!

        You’re correct, I do feel a lot of passion for what we, as caring Agents, do to help the public. I will do my best to bring you and others, good and valid information, as I can.

        Thank you, Brett! I shall go into the weekend feeling better than I have this week!


  9. Deborah Weatherspoon said

    From what I have seen there is a gap in the public’s education regarding
    the costs of long term care and what is and what is not covered by Medicare. Many people believe that Medicare covers it and only find out when they need it or a loved one needs LTC. This misconception is partly propagated by the allowed time that Medicare will pay for skilled nursing care following an injury or illness. To the public it appears that Medicare pays for LTC.

    I don’t agree that the entire 90% without coverage set out with an estate planning attorney… although I know it happens, most of the admissions that I have seen are unexpected. A fall with a broken hip leads to a need for rehab but the aged person never reaches the point of independence to return home. No one ever really plans to go to a nursing home. We simply all dream of a long life and dying peacefully in our sleep.

    As to the example, the average American trying to prepare for their future might think that buying that policy and paying faithfully would cover their costs never considering the need for a yearly meeting to update their plan.

    Thanks to everyone for all your comments, I didn’t intend to drift so far away from the issue of current healthcare reform but I too feel strongly about our aging population and their need for assistance when they cannot care for themselves. As we sort out the changes in healthcare for the future, perhaps we should consider this population and their needs as well.

    • Deborah,

      I certainly didn’t mean to imply that the 90% without coverage all could have afforded to purchase coverage and decided to work with an attorney instead. Good grief, that would be ludicrous.

      I don’t know what percentage of the population can afford to buy coverage, but I do know that it is far greater than 10%. In my 38 years of educating the public, and marketing LTCi, I can tell you that a very large percentage of those with whom we worked had credit union share accounts with ample funds, or lived in expensive retirement centers (usually CCRCs), or had other means to purchase coverage. We didn’t work with Welfare recipients, or even those called “The Working Poor”. We only worked with those who had the means to purchase coverage. The reason that the Individual Mandate in ObamaCare is important is because the vast percentage of the population that should be buying insurance, doesn’t.

      You are correct about the misconceptions about Medicare. Who is responsible for not correcting those misconceptions? First, the Federal Government, whose efforts at educating the very people on Medicare are not just thin, they are nil. Most Federal Employees, those whose job it is to inform the public, have little to no understanding of how the very program they provide, works. When the Medicare Catastrophic Act, signed into law in 1988 and took effect in 1989, It was I who was asked by the local Social Security office in Seattle to come give a presentation to their employees, because they hadn’t been educated by their superiors. How can that be? Second, Elder Law Attorneys have done a horrible job of educating their clients about the need to buy LTCi.

      A proper interview with a client in their home, or in a meeting room with multiple attendees, isn’t an hour, or two of work. First, all of the negatives, the what aren’t covered must be explained, in detail, explaining properly the various legal terms that must be explained; only then can the professional agent can begin to educate that person on what is covered. It cannot be done in one hour. It can be done in two hours if the client has any knowledge whatever, and the vast majority of our clients purchased coverage on their second interview. An Agent, skilled in this discipline, can easily spend three hours or longer with that client, and add another hour or two for drive time, meaning that we invest a huge amount of our income to provide the education that should have been provided by the Feds. It is estimated with most agents that they will have about 50% of those they see purchase coverage, and we don’t see those who cannot afford it, not if we’re working with qualified groups. A far higher percentage of those I saw bought coverage, but only because I was willing to spend that extra time to educate my client. About 80% of those I saw purchased coverage.

      If an individual expected to need LTC, and bought it with that kind of foolish reasoning, no company would insure them. We do know, factually, that the chance of needing LTC is 1-4 for younger ages, 1-3 for those from 65 to 75, and one in two, 50% need, for those older. It is difficult for a layperson, such as yourself, to understand what really is entailed in properly educating the public. It is a very hard business, and we receive no salary or fee for our time, it is all based on whether or not we have done a good job in educating the public.

      You, even though you work in LTC situations, should never be advising anyone about whether or not they should be buying coverage, and neither should their lawyer. Their lawyer, CPA, and physician know nothing about the details of this field. Those of us who have gone through intensive training and courses of study(I am a Registered Health Underwriter…RHU, earned after taking a three year program at Northeastern University). It is far to easy for laypersons to make light of the importance of this kind of education, yet isn’t it interesting that I spend many of my years in my career traveling from Coast to coast to give seminars on this subject (my greatest honor was being the 1996 Guest Lecturer at Drake University in Des Moines, Iowa, as the choice by the university to be the recipient of the Archie R. Boe Guest Lectureship Series. Who was in the audience? over 200 Physicians, Hospital Administrators, Presidents of Insurance Companies, and they were enthralled by the talk…I only know this because my wife was sitting next to the Dean of the Insurance School who told her that only someone with my education, knowledge of the subject matter, and an ability to verbalize, articulate to the audience that knowledge could have held the audience in complete attention for two solid hours). This can be very boring stuff…I had one “student” fall asleep at a seminar.

      Of course no one plans to go to a nursing home. Do you plan on having a car accident? Do you plan on going to a hospital? Do you plan on torching your home so that you can collect benefits? Of course not. Do you carry coverage for all of those items. Yes. What’s the difference, especially given the incredible risk? The chance of having a car accident is 1 in 88. The chance of needing the insurance protection that I provide is 1 in 4. Why would you buy car insurance (forget for a moment that the state requires that you do) and not buy LTCi. That makes no sense whatever. Just because you “plan on dying peacefully in your sleep” doesn’t excuse your being irresponsible and refuse to carry coverage “In the Event” that you will need LTC.

      That’s the problem with America today, and the social welfare system that we promote. It is way beyond time for Individual Citizens to be “Individually responsible” for their futures and NOT rely on others to carry our own load. I find it terrific that one part of ObamaCare requires, by law, that everyone must carry insurance. Did you know, Deborah, that the percentage of those uninsured in Canada is estimated to be 7%? Why? Because you have to “Sign up”. 7% do not. Even though it is Socialized Health Care, they do not sign up.

      Clearly, we as a country that cares about its citizens must provide for those who cannot provide for themselves, but that doesn’t let those who CAN provide for themselves an excuse to be irresponsible.

      By the way, the average citizen does NOT need to meet with their agent to review their coverage. A good, professional agent will work with their client to make certain that they are buying adequate coverage. That your example of “Mr.T” only had a one year benefit period, with no inflation protection tells me that “Mr. T” either worked with a very poor excuse for an agent, or he was very foolishly cheap. Maybe a big screen TV was more important to him than having adequate coverage that would meet his needs if and when the time came.

      As far as the “Government” providing adequate coverage in the future for LTC, it isn’t going to happen. That cost is now estimated to be in the hundreds of billions of dollars per year. Should you think that the taxpayers of this country will agree to break our already broken bank to an ever much larger degree, don’t hold your breath. It will not,and should not become another Entitlement that would have the effect of breaking our children’s futures. Let us instead work to educate the taxpayers to be responsible, and to protect their own individual futures.

      This issue isn’t about one individual, it is about hundreds of millions of individuals, who need to learn tomorrow what their parents taught them years ago; to be responsible, and learn to pay your own way.

      Enough for tonight. Please, if you have any other questions or would like to address other areas of LTC that I am able to address, ask.

      Any who wish to contact me to further discuss this issue, you may email me at My advice is free. As I said, I’m retired, and I am passionate about Long Term Care funding.


      • One quick correction:

        I had said that it isn’t necessary to met with your agent for a review, and I meant to say, annually. Every three to five years is adequate.

      • Deborah Weatherspoon said


        Thank you so much, you are a wealth of knowledge and support the primary assertion that I was attempting to make. Let me be clear, I recognize and respect your credentials and those of other RHU certified agents…I have a personal RHU whom I trust to provide me with accurate information and the coverage that I need. Not to be contrary, but I will note that it was a RHU agent that sold a policy to Mr. T, and that it was at that time, the “gold standard” policy leaving them to naively believe that they never had to worry about it again…just keep paying the payments. So again I see a knowledge gap…the clients didn’t know that the cost of LTC had gone up so precipitously in the decades since the origin of their policy and that their once “golden” policy would be quickly depleted. Perhaps the agent changed areas, I don’t know why there wasn’t follow up but I do know that it happens and that even individuals who think they are being responsible may not have all the information they need to make sound choices.

        I believe that there is an education gap for the general public on what is covered and what is not covered for LTC. Although the government could, and perhaps should, take the lead on this education one could argue that their position is to educate what Medicare does cover…not what it doesn’t. When you were advocating for the insurance policies you represent surely you didn’t spend a lot of time talking about the things it wouldn’t cover (and no one would expect you too!).

        I too believe that there should be individual responsibility.And often the problem is the “stick your head in the sand ostrich syndrome”. Dr S. Chin, RN, PhD studied decision making for the aged and simply asked “What will you do when you cannot go to the bathroom by yourself?”. By placing the bigger question into something that each of us would relate to, she was able to demonstrate how the decision for LTC is often made. This is the area that I think we should address earlier in life…getting people to think about the logistics of what will happen if they can’t care for themselves.

        So I believe that we agree individuals need to be responsible but they need education regarding their options. I also agree that someone with your education, knowledge, and experience is ideal to provide information on LTCi. I certainly would never offer specific advice on LTCi, other than to say I think it is important. But is that part of the problem? If doctors, nurses, pharmacists, or anyone who is at the point of care for individuals knows little about LTCi (as you pointed out by their enthrallment at your lecture) and cannot or would not attempt to share that information how do we reach the masses?

        While we recognize your expertise what I am seeking here is how to fill that identified educational gap? How could health care policy help us fill that gap? Because I believe that if we can get the individual to realize the importance then they will be ready to learn what you have to offer.


        • Deborah,

          In case you may be thinking as many do, about the lack of caring agents may have in their zeal to make a sale, it is true that we have more than our share of agents whose primary goal seems to be to see how many bags of gold they can deposit in their bank.

          That acknowledged, I have found that the majority of my colleagues really do adhere to the old saying, “People won’t care how much you know until they know how much you care”. It really isn’t different in most, if not all fields of endeavor, including nursing. There are those who enter a field to build their careers more concerned that they will “do well” than having altruistic reasons for choosing that career as well.

          Those agents who feel as do I, and I find that agents that don’t aren’t agents with whom I spend time, insist that adequate time be spent explaining, up front to allow time to deal with the negatives first and not have anything rear up later, causing the potential client to question the motives of the agent, all negatives, in detail. Few consumers today are foolish enough to not ask many questions regarding all of the negatives about which they’ve heard. What can possibly be gained in not behaving as a total professional, removing any doubt about the veracity and efficacy of that agent? It would be foolish to invest hours of work only to have that client drop the coverage within their 30 day “Right to Refuse” and cancel that coverage. Thus, a good agent, a professional agent, will take the time from the “get-go” to do the job right.

          A Large part of a good agent’s business is built on making clients from the referrals we get from already existing clients. We wouldn’t be building a good referral business if we didn’t do our jobs well, with the client’s best interests at heart.

  10. It amazes me every day how our country continues to allow government to control our lives. We are becoming a nation of entitlements instead of accepting the responsibility ourselves. Mandates to guarantee individuals coverage or pay a minimal penalty only supports adverse selection. The PPACA’s name is to achieve “patient protection” and “affordable care”. Adverse selection only adds to the increasing medical trend, making “affordable care” a joke. Responsible citizens who maintain health insurance coverage are tired of paying for entitlements for the irresponsible. Government is trying to control our lives and stifle entrepreneurs. Please vote for change on November 2nd.

    • Alan said

      Gary: Thanks for sharing your thoughts, but I’m not sure I follow your logic. In today’s system, consumers and businesses who forgo buying health insurance still receive medical care. Doctors and hospitals shift those costs onto those “responsible citizens” — some have estimated this cost shift as adding $1,100 per year to medical premiums. Requiring people to buy health insurance is not an entitlement, it’s mandating that they accept the responsibility you talk about. The result will be a more fair and equitable system for those who already are doing the right thing by obtaining health care coverage. There’s much that needs fixing in the PPACA. The idea of an individual mandate, I believe, is not one of them. In fact, the problem with the current requirement is that the penalty for failing to get medical insurance is too low, providing an incentive for individuals to continue to game the system.

      • “There’s much that needs fixing in the PPACA. The idea of an individual mandate, I believe, is not one of them. In fact, the problem with the current requirement is that the penalty for failing to get medical insurance is too low, providing an incentive for individuals to continue to game the system.”


        Excellent comment. I couldn’t agree more strongly.

        All of us should remember that if all of those Individuals who can afford to purchase Health Insurance did so, the percentage of “Adverse Selection” that hits the companies would be dramatically reduced. Our “Risk Pools” would be, conversely, dramatically increased, allowing for an axiom of insurance to be more closely followed, “The many paying (in this case) for not quite as many”. Clearly, this would allow for the “Insurance Dollar” to be more adequately and equitably spread to those who need more expensive care without putting the insurance companies at risk.

        Most states require that all those driving vehicles either carry insurance or prove “financial responsibility” (also far too low a sum). I’ve not heard anyone complain about mandates requiring that drivers be “Individually Responsible” and carry automobile insurance. I don’t understand the argument that we shouldn’t have a mandate to carry Health insurance.

        Again, good comments.


      • Alan, I agree in mandating the irresponsible to obtain health insurance so the rest of us will not have to bear the “total” cost of the uninsured, but having an option to “opt out” and pay a minor penalty will not encourage consumers to carry coverage. This is why I still feel we will have adverse selection until a big health issue occurs. Then an only then will the consumer buy coverage to help pay for those high claim costs.

  11. Deborah Weatherspoon said

    Thank you, I appreciate your sharing your insight and I agree with much of what you have said. As a nurse with experience working in LTC I have seen estate planning that purposefully protects “family” assets. There is a problem though, many LTCs are private and are not required to accept any particular patient leading to the practice of “cherry picking”, this time by the provider. What will happen as the proportion of our population age 65 and older swells beyond the system? As beds become more scarce and lack of reimbursement leads to denial of care for the elderly unable to live alone increases what will happen?

    Another area that perhaps you can clear up for me is how the lifetime cap will work, will it also be removed for LTC costs? What will that do to the rates for LTC insurance? Perhaps an example will help define my concern. Thirty years ago Mr.and Mrs. “T” purchased a LTC policy and diligently paid the premiums; it was a really good policy that promised to cover the cost of their care should they need it and the lifetime cap seemed unreachable 30 years ago. About 18 months ago, Mr. T was placed in a LTC due to progressive dementia; the policy maxed out after little more than one year. So now Mrs. T faces paying out of pocket until all of their life savings are gone. How will the reform help prevent this happening?

    • Alan said

      Thank you for your comment and questions Deborah. I’m not an expert on LTC, but while the health care reform legislation does create an optional LTC program for workers, but I don’t believe the new law seeks to reform that type of insurance. So the lifetime cap and other limits in long term care policies remain unchanged by the PPACA.

      • Deborah,

        Many LTCi plans being carried by the Public have no Lifetime Caps. Had a larger percentage of the population chosen to invest in LTCi it is likely that those kinds of plans would still be available.

        Further, many existing plans still in effect have generous Inflation Protection benefits and keep pace to a certain degree with increasing costs for LTC.

        Unfortunately, and in my opinion what should be illegal, many Elder Law Attorneys went after the older market and taught them how to divest themselves of their assets and go on Welfare (MediCal, Medicaid), passing the wealth on to their children. I find it appalling that in our country we actually have a segment of our population that can well afford an insurance policy but choose instead to lay the costs an everyone else (the Taxpayer).

        I specialized in LTCi in my career, beginning in 1974. Why have so few (10%) chosen to avail themselves of good coverage? A poor job of education by the government, for the past four decades; Elder Law Attorneys teaching those who have any amount of “wealth” how to cheat; individuals who would rather play golf during the day and gamble at night, anywhere, than invest in insurance.

        As a result of the above many of the top level of insurance companies that used to market LTCi no longer do. They are running out their not at all profitable books of business. Before I retired, we used at least ten to fifteen companies at any given moment, worked with groups like school districts, retirement centers, and credit unions, received low monthly commissions but built up thousands of clients. We also had “Group endorsements” which allowed us to provide discounted premiums, receive larger commissions, and every one won. No longer. The market providing the product has dramatically “shrunk”, loss ratios are through the roof, and the really quality benefits that we used to be able to offer no longer exist, because too many of our neighbors decided to let someone else pay for their care. That market can come back, but only if mandates to carry LTCi are passed into law.

        Regarding ObamaCare, a program called the “Class Act” is an adjunct to the primary law. Unfortunately, the benefits, in a word, suck. Further, there are no benefits for the first five years of coverage, allowing the Feds to acquire money before paying our benefits. That kind of nonsense was ILLEGAL for any insurance company to offer until ObamaCare and the Class Act, and now the Feds have decided that it is okay to mess with the public’s welfare and the benefits they may receive, because the are “The Government” and can do whatever they want.

        The upside to this unconscionable LTC law is that intelligent agents will conduct numerous seminars and educate the public on what is good and what isn’t. I’m lucky, I had many clients, earned over many years of hard work and a lot of public speaking and work with Senior Citizen Advocacy groups, and made some relatively intelligent investments. It is a very difficult market with which to work, though I still feel passionate about it. I do, however, see a very bright future for those who are entering or are in this market as professional agents as the “Government” will now, in the promoting of their own really rotten plan, finally be helping to educate the public on the importance of purchasing LTCi. It will now be up to the really good professional agents to continue that education and demonstrate to that public that far better coverage is available.

        • Curt Cella said

          Spencer –
          I believe my comment to Deborah was deleted but my thoughts echo yours. The government’s LTC “plan” does suck and the real injustice here is that we already have a great way to pay for LTC plans – with a HSA plan that will let plan owners effectively save for both post-retirement health services needs and the purchase of a LTC plan.

          Unfortunately the HSA may very well go the way of the insurance agent….and Dodo bird….and buggy whip….and statesmen…..

        • Curt,

          I believe that you bring up an excellent vehicle for funding LTCi, the HSA. The use of an HSA makes perfect sense, is another way of using funds wisely to fund another vehicle, and should be promoted.

          Kudos for keeping your eye on the ball!


    • Scott said


      What would help this was if Mr & Mrs T sought the advice of a professional agent every year to make sure their plan was up to date and the LTC value reflected realistic costs in the market. Obviously, this was not done in your example. Costs can and will rise faster then the insurance benefit and you need to reacess your plan annually. There is no FREE ride. Those that want to be protected and have the piece of mind that not all other have, must pay for that comfort and be mindful to stay on top of their plan. You either pay before or after, as Mr. T is now doing.

  12. Alan,

    Thank you for a timely commentary, and update.

    Interestingly, while I’ve voiced my negative feelings regarding the HCR Law, this happens to be an area with which I am in agreement.

    Many, who have shown as “Uninsured” in the past, who have been uninsured by choice, not because of financial considerations, will now have to “play or pay.” Those numbers are many. This problem also exists, to a much larger degree, in the area of Long Term Care insurance. In 1995 the percentage of those not insured by some form of LTCi (aside from those on Medicaid, or in CA, MediCal) was 90%. Only a very small 10% had availed themselves of excellent coverage, and in those years, relatively low rates.

    Today, in 2010, the number of insureds is estimated to be 10%, those uninsured, 90%.

    Why? Because they were/are never going to need LTC. Because they were/are never going to go to a nursing facility. The “Real Reason”, they want to spend their money on anything but insurance, and besides, their friends never bought any, and when they needed it they just went on the “State” (Welfare).

    Sadly, in the LTC arena, many Elder Law Attorneys have exploited the “Welfare” system by helping their clients to divest themselves of any assets, spend down, and qualify for Welfare.

    In my opinion, law that requires the public to be “Individually Responsible” and not rely on “Societal-Welfare-ism” (I made that phrase up, but not because Shakespeare did it, only because I think it gets the point across :)) is good law.

    Just for the record, I am not opposed to many parts of ObamaCare, a lot of “Insurance Company Reform” has been a long time coming, only the method in which it was done.

    I’m glad to see that this area now has a precedence setting legal decision behind it.

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