Thursday, July 24, 2014

I see fake people...

So here's the thing:

"Investigators ... created 12 fake health insurance test applicants and... have gotten qualified health plan (QHP) coverage for 11 through the [ site]."

So what's the big deal?

If someone hacks your Visa card, they can (potentially) rack up some major purchases. But who in their right mind wants to steal insurance?

Here's the problem(s):

As Bob points out, it underscores just how poorly the 404Care site was designed and implemented, and how it continues to be an embarrassment to all who've worked on it (assuming they had any shame to begin with). More importantly, though, folks who successfully game the system in this way:

"Get free (or almost free) insurance until such time as the Feds figure out that they never were entitled to it (again, assuming they're even caught at all). So after claims have been paid and the government (and the carriers) want their money back, the perp is long gone."

Nate offers another scenario:

"If I was an illegal alien undocumented guest with a serious medical condition, free insurance would be great. You don’t even have to really try to fake it; just provide a valid insurance ID and they will treat and gladly bill the carrier for you."

And Pat offers this:

"The bigger point is that HHS isn’t verifying jack squat. Income, identity, Social Security number, even residence may not be accurate. If 11 of 18 fraudulent attempts got through then how many of the “true enrollments” are not accurate?"

And that's truly scary: recall that thousands (perhaps tens or even hundreds of thousands) of folks experienced enrollment "glitches," so we have no way of knowing how many folks really enrolled, and how many of those that did were, in fact, fraudsters using someone else's ID.

Warm fuzzies, anyone?

Heroic Carrier Tricks: CNA edition

Back in the day, the Cincinnati Life Insurance Company sold Long Term Care insurance (LTCi), and a colleague (since retired) sold a number of these. Recently, a Cincinnati LTCi client called to complain about a claims problem, and I was happy to try to help out.

Note: I had understood (mistakenly, as it turned out), that Cincinnati had actually sold its block of business to another carrier. This is a not-infrequent occurrence in the LTCi biz, but was not the case here. Instead, they had turned over policy service to a Third Party Administrator, LTCG, which also services other carriers' policies, including CNA. Unfortunately, I hadn't known this.

I invited the client to come into the office so that we could call in to try to resolve the problem. This turned into a roughly 90 minute call, during which time I know that I heard the rep with whom we were speaking say "CNA." I made a note of that, and made the assumption that Cincinnati had sold their policies to them. Later, I figured out that she had simply misspoken.

We were unable to get resolution to the problem, and so I reached out to CNA's media relations folks to let them know that I would be posting an unflattering review of the situation. I was contacted almost immediately by the very nice, professional Jennifer, who offered to reach out to their claims folks to see what could be done.

I was also contacted by a gentleman named Terry, who works for LTCG (the policy administrators). He had done some research, and was convinced that this was not a CNA policy at all. Since my mind was already made up, and Jennifer had already taken ownership, I paid that little heed.

This was a mistake.

Behind the scenes, Jennifer connected with a supervisor in the CNA claims department, and they were able to ascertain not only that this was not a CNA policy, but in fact a Cincinnati one. And that would have been enough: they could have just stopped right there and told me to take it up with Cincinnati and LTCG.

But they did not:

Instead of simply shrugging it off and passing it back to me, they reached out to the Cincinnati folks on behalf of this client - not CNA's - and helped to resolve the issues. Late yesterday afternoon, I received a text from the client that Cincinnati (well, LTCG) had reached out to her, and that they had everything necessary to approve the claim.

I was, and am, stunned.

CNA was under zero obligation to do anything more than confirm that this wasn't their policyholder. And yet they went out of their way to help her get a claim issue resolved. That is world class service, and I am absolutely grateful to Jennifer at CNA and Terry at LTCG for their help, patience and perseverance in getting us to this point.

Kudos, CNA!

Wednesday, July 23, 2014

Cavalcade of Risk #213: Don't Panic edition

Econ-blogger extraordinaire Jason Shafrin hosts this week's short but eclectic collection of risk-related posts, from life and health insurance to Worker's Comp, and plenty in-between.

Five Takeaways from Halbig and King

1. The decision on Halbig (D.C. Circuit) isn't taking subsidies away from people nor is the decision on King (4th Circuit) to allow everyone who qualifies to receive a subsidy. It is simply about the law and how it is interpreted. One might also ask how one court ruling said 36 states were federal exchanges while the other ruling said 34 states were federal exchange. This is what happens when a law is poorly written, rushed to a vote, and passes. We end up with a discombobulated mess. This isn't unique to Obamacare. Many other laws that were rushed through end up with unintended consequences too. Obamacare is still full steam ahead on rickety tracks and those who are on board still have ways to purchase heavily discounted tickets. Until further court rulings, these discounted tickets can still be purchased in every state.

2. Media loves a crisis even more than Rahm Emanuel. Coverage of both cases were headline news across the country. But as Bob pointed out yesterday, maybe this isn't such a BFD. The number of people this impacts is less than 2.5% of our population. While that number is projected to rise, CBO figures it will max out at 8% of our population.

3. We are more divided as a nation than ever. Six judges voted exactly along partisan lines for yesterday's rulings. Immediately following the release of Halbig the Twitter world lit up with liberals claiming Republican judges were guilty of Judicial Activism then followed it up - in the same article - with how the White House would request the entire D.C. Circuit Court hear the case and that the court leans 7-4 in favor of democrats. Evidently they don't see this side of it as Judicial Activism.

4. Lobbyists. The American Hospital Association, Association of Health Insurance Plans, and AARP were three of the organizations that filed amicus briefs on behalf of the government in the Halbig case. Obamacare is a gravy train for the people and the businesses they represent. There is no doubt that these groups have some legitimate business concerns surrounding these rulings. But they also see Obamacare as an opportunity. I would expect a very strong grassroots effort by these groups to begin extensive lobbying at the state level. Someone once said elections have consequences. 2014 will no doubt be about Obamacare once again. There are 33 senate seats, all house seats, and 36 governorships up for election this year.

5. Expect a huge push for states to establish their own exchanges over the next several months. Lobbyists and backers of Obamacare will inundate states who didn't set up exchanges. It will also push states that were looking to go from their state based exchange to the federal exchange. The only point agreed upon by all courts is that an exchange established by a state is eligible for federal subsidies. To make this mess go away the only avenue to take is for all 57 states to step up and create their own. For supporters of subsidies, waiting on John Roberts to decide the outcome would be like playing a game of Russian roulette.

Tuesday, July 22, 2014

Dumb Carrier tricks...Kaiser Edition

For the last month, I've been receiving emails from Kaiser about a change in policy:
As your business partner, we want to make you aware that Kaiser Permanente’s subscriber termination policy will be enforced effective August 1, 2014, for small groups only (not applicable for large groups). Small groups can no longer retroactively terminate subscribers or dependents prior to the month we receive the request. As a result, all subscriber terminations will be effective in the month we receive the request unless a future termination date is requested. 
For example, if you or one of your clients requests to terminate a member’s coverage beginning August 1, we must receive the request no later than August 31. A termination request received in August cannot be made effective retroactively to July 1 or June 1.
Assume, just for a moment, that you're a company with an ex-employee covered under Cobra.  You don't receive a premium payment from the employee.  The end of the month approaches.  What do you do?  

The short answer is "nothing."  The employee has a 30 day grace period to pay the late premium.  Payment is considered made on the date that it is sent to the plan.  There's no way to know by month-end whether or not the employee's coverage should be cancelled. 

Under the previous policy, you could notify Kaiser in the middle of the following month and cancel coverage back to the paid-to date.  Under the new one, you can't.  As far as I can tell, under the new policy, every time a small employer has an employee elect Cobra, they're going to be stuck paying for the last month's premium themselves. 

More on Halbig [UPDATED]

Continued from this morning.

Meanwhile, the Fourth Circuit Court of Appeals just ruled that the subsidies do, in fact, apply across all the Exchanges, putting it in direct conflict with Halbig.

One would think that this would mean a certain trip to the Supremes, but maybe not:

"One thing the Supreme Court takes into consideration when deciding to take cases is whether or not there's a split in how various circuits are treating an issue. Right now there's a split but if they go en banc at the DC circuit and the heavily Democratic full court overturns the panel's decision that eliminates the split and could give SCOTUS an out on taking this issue on."

Unfortunately, that sounds about right to me.

So, good news this morning, (likely) reality this afternoon.

UPDATE FROM BOB: I don't see this as big either way. If the subsidies go, no big deal.

Using admin numbers:

■ 8.5M applied, 85% got subsidies
That's about 7M
1.2M failed to pay their initial premium. Another 2.5M have lapsed (or will lapse) due to non-payment by the end of the year.
Net about 4M that got subsidies and some of those got them legally through state exchanges.
If the subsidies are clawed back (certainly possible) that leaves 4M pissed off voters.
As a raw number that is not a game changer.

Game Changer [UPDATED]

U.S. Court of appeals delivers body blow to Obamacare handouts. 

In a case with potential to scramble the Affordable Care Act, the U.S. Court of Appeals ruled that federal subsidies for health insurance were not properly designed.
If upheld by the Supreme Court, the ruling could limit subsidies on the federal exchange currently used by 36 states. (Click link to see ruling)
Washington Examiner

From HGS: This is, in fact, VERY big, and we'll have more on this as the day progresses

CAVEAT: While this is, indeed, good news, it's not a "done deal:" this was a small panel of  three judges on the DC District Cout of Appeals, and the Obamastration has already indicated that it will "seek en banc review by the full D.C. Circuit." That court is made up of many Obama appointees, so don't hold your breath for a positive outcome.

More later....

Later ............
The government will immediately seek review of the court’s decision and in the meantime nothing has changed for people getting premium tax credits, Justice Department spokeswoman Emily Pierce said. A White House official said the U.S. will seek a review by the full appeals court, where seven of the 11 judges were nominated by Democratic presidents, including four by Obama. 
Where 7 of the 11 were Dimocrat appointees. 
Of course never assume there is any kind of political motivation .............
But then there is this.
President Obama’s old Harvard Law professor, Laurence Tribe, said that he “wouldn’t bet the family farm” on Obamacare’s surviving the legal challenges to an IRS rule about who is eligible for subsidies that are currently working their way through the federal courts.
National Review
Farmer Obama may still lose the family jewels if Prof. Tribe is correct.

Monday, July 21, 2014

Stupid Anthem Tricks: One Week Later

For those following along at home, it's now been a week since we reached out to Anthem for the answer to a very simple question:

"Does one receive deductible credit from a "legacy" plan when one transitions to an ACA one or not?"

[ed: I had initially reached out to Anthem last Monday, but gave them a few days to respond before posting that]

I just emailed my contact to see if she'd gotten a definitive answer yet, and she's replied "I have not. Still waiting."

Since this seems to be dragging on, I've suggested to my client that we file a formal complaint with the Ohio Department of Insurance. I'll let you know if she's up for doing so.

Friday, July 18, 2014

Navigator Two-fers

So those unlicensed, unvetted Navigators, which (at last count) cost over $67 million, have racked up some pretty impressive numbers.

For certain values of "impressive:"

"If you do the math, 28,000 individuals assisting 10.6 million people over 210 days breaks down to 1.8 people per day per service representative."

Bob broke these numbers down a little differently, but the point remains the same: a colossal failure. Part of the problem was baked into the cake: because of the complexity of the subsidy calculations and the sheer number of available plans, coupled with folks with no prior insurance experience or knowledge, Navigators were spending upwards of two hours per "prospect." Not exactly cost-efficient.

But then, this is the gummint, not exactly known for it's spendthrift ways.

Cavalcade of Risk #213: Call for submissions

Jason Shafrin hosts next week's Cav. Entries are due by Monday (the 21st).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like). And please only submit if you are willing to link back to the carnival if your submission is accepted.

Thursday, July 17, 2014

And now for something completely different... [BUMPED and UPDATED]

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For the next two days (today and tomorrow), you can download - Gratis! [ed: Peruvian for Free] - his newest effort: Information Technology Strategic Leadership. All he asks in return is that you give it a positive comment on Amazon if you like it.

Tom says he's making this generous offer because he "feels strongly about the subject of IT leadership. Frankly, as an outside consultant and as an executive staff member, I have watched too many people promoted to the leadership ranks based on their great technical knowledge rather than their leadership ability. This is never a good decision for the enterprise."

Just click here to download your copy.

Frustrating Carrier Tricks

So apparently, Anthem has hired Nancy Pelosi:

"We cannot tell if the accums have been moved from facets until there is an actual claim on the new ACA policy/system."

[Translation: "she must have new expenses for us to learn whether her previous ones count"]


Allow me to explain:

One of my clients has had an Anthem HSA-compatible health plan for a number of years. Effective July 1, her plan was "mapped" (transitioned) to a new, similarly-configured ACA-compliant plan with a slightly higher deductible.

A few weeks before the "new" plan took effect, she had an injury. The cost of treatment satisfied her deductible, and we wanted to know if these expenses would apply to her new plan, or whether she has had a brand new deductible as of July 1.

Look, this is not complicated: Does one receive deductible credit from a "legacy" plan when one transitions to an ACA one or not?

Since I couldn't get a straight answer from my regular sources, I reached out to the media relations folks (a practice with which I have had previous success) for help. I had already written the bulk of this post, castigating Anthem for its lack of transparency and forthrightness, and included several quotes from it.

I was soon contacted by a very nice young lady who asked for a copy of the proposed post, which I gladly provided. She promised to look into it. This was Monday. It is now Thursday, and the fact that we still have no definitive answer (despite also providing my client's name and policy number) tells me all that I need to know.

The rocket surgeons at Anthem will not give us a straight answer to a very simple question. It seems to me that there can be only two reasons for this:

One, they truly don't know, in which case they are so incompetent as to have no business issuing "insurance" contracts that they don't even understand themselves, or they are deliberately obfuscating (for what purpose I have no idea).

Right now I'm leaning towards the former. In which case, one would do well to avoid having anything to do with Anthem's "insurance" policies.

Health Wonk Review: It's a Dry Heat edition

Jennifer Salopek hosts this week's terrific round-up of wonky posts, including David Williams' cool v-logs and Julie Ferguson's update on a lab tragedy that cost a young woman her life.

Wednesday, July 16, 2014

80% Closing Ratio

According to the folks at Kaiser Health News, "navigators and assisters" helped 10.6 million people navigate the Obamacare nightmare. 

During the Affordable Care Act’s first open enrollment period, about 10.6 million people received personal help from navigators and other enrollment assisters, according to an online survey of the programs released Tuesday by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
Kaiser Health News

And 8 million bought coverage.

Damn good closing ratio.
Almost 90 percent of assister programs surveyed reported that most or nearly all of the people they helped were uninsured. More than 40 percent said that most and or nearly all of the people they helped did not have Internet access.
They can't use their Obamaphones?
“How can you explain coverage options to someone who doesn’t know what a deductible is?” asks Pollitz. “It’s just a much longer conversation,” which might help explain why most of the programs reported that assistance required one to two hours per client. “
I wonder how many assisters knew what a deductible is.

How many checked provider networks and drug formularies before suggesting a plan?

Stupid Governor Tricks

One of the problems with the ObamaTax (and they are legion) is that so many states have opted in to the Medicaid expansion scam scheme. Among those, to my regret, is my own home state:

"Enrollment in Medicaid under Ohio Governor John Kasich’s Obamacare expansion has rocketed to 285,553 in just six months"

But that's just the tip of the iceberg:

"Gov. Kasich, a Republican, projected that 366,000 Ohioans would enroll in Medicaid under Obamacare by July 2015."

Why is this such a problem?


"Nearly all of those covered by Kasich’s Obamacare expansion are able-bodied childless adults."

It's bad enough that so many folks qualify for subsidies (a euphemism for income redistribution); at least some of those folks are paying something in the form of premiums. But Medicaid is essentially a free ride, and the fact that so many folks are opting in means gargantuan tax increases on the rest of us once Uncle Sugar pulls the plug in a few short years.

Now, another way to look at this - and this isn't exactly great news, either - is that it means that a lot of Buckeyes who could work just aren't able to make ends meet because they can't find jobs in this listless economy. Of course, these are not mutually exclusive phenomena.

Regardless, this expansion is not sustainable in the long run, and one wonders what will happen when the Federal funds run out, and taxpayers can't handle the burden.