HEARING - U.S. Senate Special Committee on Aging

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41 Mrs. FISH. That is a question that really bothered me. Then, is there encouragement for people like me to take care of a person in the home? Is there any good outlook? Senator HEINZ. There is not nearly enough. Mrs. FISH. I mean, will there be? Chairman MELCHER. We think there will be a lot more, because we think that-in absolutely the best of all worlds, your mother would not be ill; but secondly, she does need a lot of care, and by far the best place is at home. So we hope we can generate more encouragement for exactly what you are doing. Mrs. FISH. I hope so. Chairman MELCHER. Thank you very much, Mrs. Fish. We have a witness now from the insurance industry, Robert Shapland, the vice president of Mutual of Omaha Insurance Co., representing the Health Insurance Association of America. Mr. Shapland, the committee very much welcomes your participation today, and we want to thank you for making the effort to come here today to be a witness. STATEMENT OF ROBERT SHAPLAND, VICE PRESIDENT AND AC- TUARY, MUTUAL OF OMAHA INSURANCE CO., ON BEHALF OF THE HEALTH INSURANCE ASSOCIATION OF AMERICA Mr. SHAPLAND. Good afternoon. I want to thank you for inviting me and giving me a chance to help in solving the problem of catastrophic costs. I think we all know that there are catastrophic costs, and we all want to work together to solve them. I also want to thank you for having the snow. In Omaha we have not had any snow, and I love snow and I think it is beautiful outside-so thank you for that, too. I am always pleased when I have attended hearings-I have not had a chance to attend too many-but I am always pleased at my strengthened vision or insight as to the work you guys are dedicated to doing and the way you approach the hearings. Every time I have been to a hearing, I have always thought that it is too bad that the people back home cannot see how you approach the hearings on a very fair basis and look for the answers without any foregone conclusions, and do an honest job. Almost everything that you, Senators, have said here today and the witnesses have said today, I think is absolutely right. There are some problems that need to be solved. As Senator Heinz said, there are some potholes that need to be filled; there is education that needs to be conveyed-there are all kinds of things. I know that this is a pretty knotty problem. I have spent a lot of time on this, and you are probably fairly new to it. The Health Insurance Association stands ready to help you in the education process. I have made some notes during the hearing about the questions that were raised and statements that were made, so I thought I might respond to some of those. So my testimony might be sort of disjointed, but at least I am trying to help in any way I can. I know you will have some questions for me later, and I hope I can help you understand the insurance industry and the Government's and
42 industry's role in providing catastrophic care and where they. are not providing catastrophic care. The statement was made that the Government needs to take care of people as the last sort; people need to feel that they are taking care of themselves to the extent they can-that is rightand then, Government needs to realize where people cannot take care of themselves and step in. It is the same thing with Government's role in any other field, like transportation, food, national defense, or anything; where people cannot take care of themselves, the government steps in. And there are some areas here where the Government does need to step in and already has stepped in-to some degree, and I think we need to ask ourselves what expanded role of stepping in does the Federal Government need to do. Talking about education, I think you are absolutely right, and it has been made clear here at the hearing, that there are great misunderstandings about what Medicare does. I work with it every day in insurance, so I have learned it. But even for me it was a long process. Insurance of any kind is hard to comprehend. Somebody made a comment about a burglary and what does the insurance company cover. I have the same problems, even though I am an actuary and work with insurance every day. Insurance is not an easy subject, and it takes a lot of education. I think the Government has probably been remiss in its efforts on educating the public about Medicare. Surveys have shown that the vast majority of people in the United States think that Medicare pays for nursing care, when it does not, and some other kinds of care, and have relied falsely on their honest perceptions of what Medicare is. I think the industry, on the other hand, has been way more active and deserves plaudits for its efforts at educating the public regarding Medicare. We go out and sell Medicare supplement policies and spend a lot of energy explaining to the public what Medicare pays, what our policies pay, what Medicare does not pay and what our policies do not pay. We have developed, in conjunction with HCFA, buyers' guides that explain what Medicare is all about and what the Medicare supplement pays, and it also says that Medicare does not cover long-term care, for example, and that our policies do not. Actually, when we sell a Medicare supplement policy, we have got to give the purchaser several pieces of paper that say what we do not cover and also tell him that the Government does not cover it, either. So we have gone out of our way to help educate the public and be honest about what we do not do. I think we have probably done more of that than any other industry. I do not know that the auto industry or any other industry have gone out there and said what their product does not do, like we are. But that does not mean that that is enough. I think that it has been proven here today by the witnesses that there is just a lot more educating to be done. There was a lot of discussion here about Medicaid and people having to be impoverished to get Medicaid. I think that that is something that you are going to really have to wrestle withwhether somebody should be able to keep $4,000 for burial before they go on Medicaid, and those kinds of questions. Those questions
Page 1 and 2: S. HRG. 100-69 CATASTROPHIC HEALTH
Page 3 and 4: CONTENTS Opening statement by Senat
Page 5 and 6: 2 Second, I think the private insur
Page 7 and 8: 4 So the question before us is how
Page 9 and 10: 6 the elderly, long-term health car
Page 11 and 12: 8 ments for our retirement. I might
Page 13 and 14: 10 Mrs. YELINECK. Well, it would be
Page 15 and 16: 12 As I understand it, you have not
Page 17 and 18: 14 Mrs. YELINECK. One does not expe
Page 19 and 20: 16 Senator BURDICK. Well, thank you
Page 21 and 22: 18 Mrs. YEL.INECK. No. I started ou
Page 23 and 24: 20 Therefore-I am supposed to take
Page 25 and 26: 22 Chairman MELCHER. Well, I am ple
Page 27 and 28: 24 month. Let us assume it costs $1
Page 29 and 30: 26 STATEMENT BY SENATOR PETE WILSON
Page 31 and 32: 28 Mrs. RIEGER. We have; we have wo
Page 33 and 34: 30 Four years ago this August was w
Page 35 and 36: 32 she has only 50 percent vision i
Page 37 and 38: 34 Senator HEINZ. So it is both a p
Page 39 and 40: 36 rich. Indeed, in the academic co
Page 41 and 42: 38 pointedly in the comment from Mr
Page 43: 40 finding out is that it is very l
Page 47 and 48: 44 Senator HEINZ. So things are wor
Page 49 and 50: 46 Chairman MELCHER. In exactly the
Page 51 and 52: 48 plement policy, what should that
Page 53 and 54: 50 - 2 - I am Robert Shapland, Vice
Page 55 and 56: 52 - 4 - CATASTRIPC PROTECTION IiDE
Page 57 and 58: 54 -6- MiCIGAP INSJRANCE: A RPL1C/P
Page 59 and 60: 56 To ensure that all of these cont
Page 61 and 62: 58 - 10 - The HJAA also endorses Me
Page 63 and 64: 60 - 12 - Finally, given that Congr
Page 65 and 66: 62 - 14 - A recent HLAA survey of o
Page 67 and 68: 64 Chairman MELCHER. Senator Heinz.
Page 69 and 70: 66 Mr. SHAPLAND. I think we are in
Page 71 and 72: 68 Those problems are real problems
Page 73 and 74: 70 Mr. SHAPLAND. Oh, no. There are
Page 75 and 76: 72 comprehension, and it is growing
Page 77 and 78: 74 that educational process, and we
Page 79 and 80: 76 So we have supported and activel
Page 81 and 82: 78 Mr. SHIAPLAND. How much would nu
Page 83 and 84: 80 rently being offered by the indu
Page 85 and 86: 82 Recently, Karri Lynn has started
Page 87 and 88: 84 Mr. Chairman and Members of the
Page 89 and 90: 86 standards for voluntary certific
Page 91 and 92: 88 non-group subscribers of reporti
Page 93 and 94: 90 We believe a new federal program
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92 However, public awareness is nee
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94 Item 3 Testi~ony of GAIL SHEARER
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96 to Secretary Bowen's proposals c
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98 -4- most-states do not monitor t
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100 Catastrophic Protection within
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102 - a - participants and in part
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104 - 2-- Consumers Union suV orts
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106 29), but fails to acknowledge t
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108 explore all alternatives to lon
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110 adds to the complexity of Medic
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112 - 10- Consider first the propos
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114 - 12- insurance premiums and me
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Consunmer Unon Pubtishcr of Consume
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FOR RELEASE AT 9:00 P.M. H2ST) TUES
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120 Itema I CENTER FOR MEDICARE ALw
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Page 3 122 aide services, however,
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Page 5 state treasuries." 124 Judge
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126 462 6485 New Developments 10,05
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128 462 6-85 New Developments 10,05
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130 462 6-85 New Developments 10,05
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132 10,930 New Developments tI.PZ ;
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10,932 134 New Davelopments 492 346
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136 10,934 New Developments It! ;6
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10,936 138 New Developmenlt I. Thc
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140 10,938 New Development. 492 S-8
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10,940 142 New Developments i92 586
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ATroR EYS -HARLES C. -ULiIN JUDITH
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146 reformed its decision-making pr
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148 : 14 2i57 New Developments 13,1
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~ 150 a>, rsn Cdw ~w (e d rum 0A7,.
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152 All Of these figures are based
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154 The requirements of this Act sh
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156 Drefting Note: Where the word "
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158 (b) The issuance of the group p
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160 (2) Contain a provision establi
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162 and competitive reasons. It is
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164 -13- E. Affordability of Long T
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NAIC LTC ADVISORY COMMITEE EXPOSURE
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Setinzn IS. Poicyx D~efinitieno aid
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170 3. The term "noncancellable' ma
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172 extension of benefits beyond th
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artinM B Requirmnts for Rplnmacwt 1
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176 The above "Notice to Applicant"
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(pinnal Rasting &mdsninn 178 Benefi
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APPEMI!X B 180 OCWARISCN OF lVLCY i
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COMPAIeSON OF LOtG TEIM CoAt PfLtCI
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COMPABI:SZN OF LC#C TE" CAiE -OLICI
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COWaPAISON Of LOSt TERM CARE POLICI
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cowRiiSOi or touTE reM CasE nOuczcS
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COGPARISON OF LONG TERM CARE POLICI
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SOME BASIC THINGS YOU SHOULD KNOW M
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Private health insurance is availab
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WHAT MEDICARE PART B PAYS 196 MEDIC
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EXPENSES NOT COVERED BY MEDICARE Me
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HEARING - U.S. Senate Special Committee on Aging

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