Industrial Arts: Insurance, part 1, Erica and Sidney

Eva Murray: A system that makes it hard on people who want to do the right thing

Posted:  Thursday, March 21, 2013 - 8:30am
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I am going to relate the experiences of four people; two in this article and two in another to follow. All of this is recent, all of it is local, and none of this is likely to sound unfamiliar. I hope you all get good and mad.

“Erica” (not her real name) works for a large local employer; she also works a part-time seasonal job and takes on some occasional photography. Working in health care, she must be responsible, well-trained, technologically adept, compassionate, reliable, and very careful. She performs EKGs, draws blood, and trains people among other duties. The health-care job pays $10.49 an hour. She enjoys her work. She is married with three small children, and her quality child care costs $10.50 an hour. Obviously, without another family member helping pay for the child care, she’d be going behind a penny an hour to even go to work, but the thing is, most of her income doesn’t come home in her paycheck. It goes to her family’s health insurance. From a biweekly paycheck of roughly $420, about $370 is taken out for health insurance coverage.

You might think her family has a worry-free, “Cadillac” plan at that rate. They do not. When their 3-year-old suffered a common but extremely painful childhood accident (and I have checked — my friend the doctor says it’s very common in toddlers — the emergency room visit still cost Erica and her husband a lot of money:

“My daughter dislocated her elbow playing. I called her pediatrician and they told us to take her to the ER. She was there maybe 20 minutes and they popped it back into place [providing immediate relief to the child]. The charge was extreme and was hardly covered by insurance due to us not having met her co-pay on the insurance [apparently each family member has a separate deductable], and then they only cover a certain amount of a charge, plus we have to pay a $100 minimum ER charge. We paid roughly $600 out of pocket."

We often hear people complain about others who are on public assistance; hard-working folks ask, “Why don’t they go out and get a job?” In this case, a few might ask instead, “Why don’t those people go on public assistance?”

Erica makes just-barely-too much to be eligible for Maine Care or food stamps, but not enough to cover everything. Her husband works for a small business and his situation is also typical of this area. Although he likes his job, works for nice people, and takes responsibility in the shop, he doesn’t make a lot, and there are no insurance benefits offered. The locally-owned small business he works for cannot afford to offer health insurance. There are no better-paid levels to “rise to”; he’s already doing all he can within that particular company. His degree doesn’t help.

After Erica had her third child, she considered not going back to work, for any number of good, economically sound reasons, but she needed surgery for a painful condition, so she needed that health insurance. She didn’t have much choice.

This family is doing the right thing by all traditional reckoning. Both parents are working while also making sure their children have quality care and time with family. The kids get three squares a day and sit at the table to eat with their parents. Erica and her husband are continuing their college educations in hopes of better employment in future, living lives that include creative endeavors (although there isn’t much time for art while you’re working, studying, and parenting little ones), economizing as much as possible while also patronizing local small businesses, and paying for their health insurance. They rely on family help more than they want to. What else can they do?

This family is planning to move out of Maine soon, and to take their education and skills with them.

 

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“Sidney” lives and works on an island. He works part-time — because that is all that is offered — for several local utilities and is self-employed as an electrician and general-purpose handyman. Here, on this island with a population of under 100 and no way to commute, there are few ways of making a living; most everybody who isn’t a lobster fisherman has to combine a variety of jobs. There are exactly two positions in this entire town that offer health insurance coverage or any other benefits: the one elementary school teacher and the postmaster. Everybody else has to manage on their own.

However, Sidney’s story is not about health insurance, but rather about his attempt to purchase a homeowner’s policy. Island and coastal residents all over Maine report difficulty with this. I did some research — including an extensive survey — a few years ago and heard stories from all over the coast of people being dropped by their insurer for spurious, nonsensical, or unfair reasons: “You don’t really have an address.” “The homeowner died” (ignoring the rest of the family who still needs the house). “An animal might crawl under your steps.” “We just don’t insure islands; you’re in the same category as the Lower Ninth Ward now.” I heard from people who did not dare to upgrade their policies for fear of attracting attention and being dropped, and of people trying to buy island homes, who are of course required by the lending bank to have homeowner’s insurance, having to inquire of dozens of agents, thus having cause to wonder if their policy is even “real” should it be needed.

Anyway, our man Sidney received a mail solicitation for homeowner’s insurance recently from a company recommended by one of his employers. He called, got a very cheerful agent on the phone, and proceeded to answer all the questions in detail: yes, a new electric service on the house; yes, a relatively new septic system, and so on. The property is on high ground, not shore frontage, not a real flood risk. He doesn’t even have a big dog anymore! Things were sounding rosy until the agent asked, “Do you run any businesses from your residence?” There is no point in being cagey; if you ever do have a claim, you can’t have the insurance company thinking you were dishonest in your application. As the island’s maintenance man and summer-cottage caretaker, he sells propane in 100-pound exchange cylinders and stores them on his property. Somebody has to. It doesn’t make him a lot of money, either. “I figure I get my own propane paid for; that’s probably about it.”

He told the agent about the small propane business. All of a sudden the tone of the insurance conversation changed. The chipper salesperson on the phone line went cold.

They probably thought “huge tank farm,” although it is really a few dozen tubes, stored in a manner considered safe by the State of Maine Propane and Solid Fuel Board (this is important, by the way. These tanks are not “a potential ticking time-bomb,” as some people wrongly think.) Sidney has a propane technician/installer’s license with all its related safety training, a hazardous materials endorsement on his driver’s license, and a building permit for the loading dock. There are no other options for location of this propane. Remember that he lives on a small island; there is no Industrial Park.

That’s just too bad.

The rosy agent disappeared from the line for a few minutes to speak with her next-higher-up, and then came back much less hopeful. The insurance company did not tell Sidney that the problem was the propane; instead, they told him he was located too far from the firehouse.

What can the homeowner do about a response like that? It does no good to argue; they hold all the cards. Sidney is actually located less than a mile from the town fire truck garage and is one of the volunteer firemen himself. He can go get a fire truck himself should he need to. There was no opportunity to insert that information into his application. Not that it has anything to do with propane, but if they’re using fire safety as the excuse there is also a source of water a few yards from the house (an old, easily accessible dug well, covered by a new, safe wooden well curb, kept as a “fire pond.” This might be the rural equivalent of having a hydrant near your city home.) There was nowhere for that detail to fit in. There was also no option to exclude the propane from a policy to insure the home from an unrelated fire or other damage.

This wasn’t a matter of the price of a policy being a bit higher, either; this was a flat “No, goodbye.”

What is a customer who is willing to do business in good faith supposed to do?

 

Next time: Lee on paperwork and Margaret on fraud

 

Eva Murray lives on Matinicus.

 

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