[cancer] One example of the weird things sick people have to deal with

Our system is so strange, and so unkind to the seriously ill. Insurance and benefit processes are optimized to mitigate fraud, not to help people in need. That means real people in real, desperate need have to jump through sometimes bizarre hoops to achieve compliance. This at a time in their lives when they are least equipped to deal with bullshit. As I’ve said before, I wonder if it would be cheaper to remove all the complex infrastructure of compliance enforcement and fraud management and just accept a percentage of free-riding scammers in any given benefit program. Basically, shift the overhead to kinder place. Not that we’ll ever do that, because of the apparently horrible thought that someone, somewhere, might be enjoying an unearned benefit at our expense. As a society, we value punishing the non-compliant far, far above the value we place on actually helping people in worst need of their lives.

Sobeit. That’s the system we live under. During the 43 years I enjoyed the privilege of good health, I didn’t question it either. I don’t really expect healthy people to question it now. Once you need the system, it’s a bit late to start protesting. Frankly, none of us seriously ill people have the time and energy to do so. We’re too exhausted trapped in our conditions, and too busy dealing with the Byzantine healthcare and benefits systems. Meanwhile, very few of you healthy people are even aware of the need to do so.

So here’s the latest wheeze: Disability benefits.

Like most people with a white collar job, I have coverage for both short term disability (STD — Yes, I know. Quit giggling in the back.) and long term disability (LTD). STD is a benefit my employer provides, LTD is an elective benefit that I pay for with a little dip into every paycheck.

As it happens, determining what qualifies as a disability under either coverage umbrella is a pretty strange process. STD isn’t quite as weird as LTD, but it has its quirks. The rules are complex and contradictory, and require cross-referencing different systems and rulesets written to differing standards. In LTD, for example, the question of whether I qualify under the rules of the Social Security Administration (SSA) affects whether or not I will qualify under my private, employer-sponsored, self-paid plan. Likewise, the precise information my physician provides to my health insurance carrier can make a significant difference.

I’m not seeking LTD yet. I don’t need it right now. But I am trying to understand the process so that if and when my cancer goes terminal, or if I reach a point where I will likely be in continuous treatment for the rest of my life — either or both of these things are probable in the next year or so — I’d like to know what to do. STD applies to my forthcoming surgery leave, albeit with some weird conditions.

Something cropped up yesterday in the LTD discussion that struck me as especially strange. (My Dad has been researching a lot of this for me. As a retired senior Federal bureaucrat who’s managed some very large budgets under Federal accounting rules, as well as living under the strict requirements of high level security clearances for almost four decades, he’s quite good at sorting out paperwork and rules.) As it happens, I hold a small LTD plan as a rollover benefit from a job I left over a decade ago. I pay a modest quarterly premium, and the plan will provide me with a modest supplementary income should I ever claim LTD status. Their criteria are, of course, different from that of the SSA or my employer-sponsored plan.

Yesterday, the payroll department at my Day Jobbe informed me that according to the rules of my employer-sponsored LTD plan, any income from other LTD sources, including SSA or my privately-paid LTD plan, will be deducted from my employer-sponsored LTD benefit.

What? The? Hell?

I pointed out that this was both illogical and punitive, and asked what the reasoning was. The response I received was sympathetic but unhelpful. Basically, they don’t know, and they also find it weird. To be clear, my employer has been fantastically supportive through these past five years, both in terms of corporate policy and in terms of my individual managers and co-workers. I am very lucky to work where I do. They are not creating this problem in any direct sense. I told payroll I would be consulting an attorney, and they asked me to please share whatever opinion I received with them.

Here’s what I see as the problem in this case. If I’m wise and foresighted enough to have a separate LTD benefit paid for privately, what does that have to do with the insurance plan that would pay out my LTD claim? Presumably their premium rates and actuarial calculations are geared toward paying full benefit. My secondary, private plan is essentially income supplementation, as the employer-sponsored LTD pays out at 66-2/3% of my income level. So because I was smart enough to buy “gap” insurance against the possible income loss, now I am to be punished by having the amount of that “gap” benefit deducted to cap me at 66-2/3%? What possible justification is there for this? How is this even legal?

Note that health insurance carriers do something similar, but it’s logical enough. They’re trying to avoid double paying claims. That makes sense to me. But health insurance plans don’t work on a defined benefit basis. They’re at-need, and they’re paying for that need. With two carriers covering the same patient, they can negotiate amongst themselves as to which carrier will pay what percentage of which needs.

LTD benefits are defined — in my case, 66-2/3% of base salary. Income from other sources is irrelevant to that benefit definition. This would be like your 401(k) provider deducting any other income from your retirement account payout. The LTD benefit is defined, and paid for according to a specific schedule.

I have not yet been able to speak to an attorney. I suspect the answer I’m going to ultimately receive is that this is somehow written into Federal law. This is still an illogical and punitive step on the part of my LTD provider which makes no sense to me. If nothing else, I may as well quit paying the premiums for my private LTD plan, as it is literally useless to me in light of these rules from my employer-sponsored LTD plan.

So, one more example of the kind of weird things sick people have to deal with. While sick and unable to cope with the bizarre details. I’m lucky I have my Dad in the loop, because I can’t imagine how I’d be fielding this all by myself along with everything else.

13 thoughts on “[cancer] One example of the weird things sick people have to deal with

  1. --E says:

    Can you calculate what you have paid to your private LTD carrier over the years and at least sue the current LTD carrier for that? You wouldn’t have spent t
    hat money

  2. Jack Harraghy says:

    Jay,

    Analogous to what I’ve seen with retiring neighbors in both Boston and Florida. Setbacks assessed against survivor SS benefits being received (after death of a spouse) upon retirement…against government pensions.

  3. Mazarkis.Williams says:

    This reminds me of when my mother was ill. Each new thing that happened was a new diagnosis requiring a new fight with insurance. And then each move from nursing home to emergency room, from emergency room to rehab, required another complicated process. Some hospitals are equipped with an advocate to help the patient and the family find a way to pay for everything. Other hospitals really don’t. It’s a lottery, depending on which bed is available at the moment it’s needed. I think at the very least some kid of unified code across health insurers, providers (such as employers) and the government would be a great benefit and allow families to focus on what’s really important during their time of need.

  4. pelican says:

    “I wonder if it would be cheaper to remove all the complex infrastructure of compliance enforcement and fraud management and just accept a percentage of free-riding scammers ”

    Yes. That’s how the rest of the developed world does it. It is cheaper.

    Anyhoo, I’m almost 5 years out of the sadistic shell game that is “health & disability” in the US, so my info isn’t current, but I the most likely problem here is a tiny clause somewhere in your employer-sponsored LTD plan that allows this in the name of cost re-capture.

    And, depending on the size of your company and the craftiness of your upper management, a call to the right person at the LTD insurer may well lead to an “exception” in your case. Your employer will probably need to politely say that they didn’t intend for such a clause, they will pay more for a policy in the future without such a clause, and they will take their business elsewhere if they don’t get this sorted for you.

    Glad your dad is available to help.

    It is a terrible, terrible system. And, you’re right, once people realize how bad it it, they’re too sick to fight the insurance lobbies, who put all other lobbies (with the exception of defense) to shame for shamelessness.

  5. Kittenherder says:

    I have struggled with this concept myself for the last couple of years. As my chronic pain situation worsens, there have been days where I wondered how much longer I could continue to function in the work-a-day world. On bad days, I remind myself that there is no way that I can afford to live on a ‘disability’ income. I actually gave up my supplemental LTD insurance when I discovered the ‘fine print’ dilemma you’re finding out about. Slowly, very slowly, I’m figuring out ways to live on a lot less income since there will come a day (either through disability or retirement) where I will have to.

    It really is silly, but both the SSA and the insurance companies figure that disabled people can live on a lot less money. The max cap on both disability and retirement payments from SS are around 50% of my current TAKE HOME pay. In order to live on that, I would have to give up my house and any concept of ‘home ownership’. I’d probably have to move into a small apartment in a not-so-great neighborhood. Just what an older disabled person needs!

    Sucks. I hope that your lawyers figure out a way to force the insurance company to pay the 66% without the deductible foolishness.

  6. Rachel Sinclair says:

    Jay, I can tell you why your LTD plan has those deductions It’s to prevent you from earning as much or more while disabled as you would earn while working. LTD is designed for people who are expected to return to health – and work – not for people who will be disabled for the rest of their lives.

    If/when you start the LTD process, start the SS one too. It takes much longer. The SSA also typically declines most claims on the first try unless it’s very clear that the claimant is totally disabled or terminally ill.

    As a morbid bit of advice, check your LTD plans for a benefit paid to your surviving children or your estate if you die while on LTD. Also check your life insurance for a benefit that will let you withdraw some of the benefit while you are still living if you become terminally ill. Let me know if you have questions. I am a fluent reader of insurance-ese.

  7. Kevin Atherton says:

    I work for a health insurance company and lately we had a person that was covered by 2 different plans. He needed a drug that costs $10,000. We were forced to pay for it with 1 plan and pay him $10,000 for the other. Yes, he made money. You should ask an attorney because we didn’t think we had to do something like that.

  8. Kevin Atherton says:

    Oops, I forgot to tell you I am taking my wife in for colon cancer surgery on 1/23/13. I don’t usually comment on your blog but I’ve found it to be extremely helpful. I’m an RN and I know some of this crap, but your expicit personal bout with cancer isn’t incorporated in any stinkin’ textbook. Thankyou

    1. Jay says:

      Kevin… Good luck and good health to her. I’m glad my info has helped.

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