Monday, June 27, 2016

IB In The News

Well this is nice:

The folks at PR Newswire have published a list of insurance-related sites that "do a good job with promoting and contributing to the conversation." There are only a handful of sites listed, and we're in the top two.

Very cool!

Friday, June 24, 2016

Friday Afternoon Dreams

I'll take "Wishful Thinking" for $400, Alex:


Settling for Life

We've written before about viaticals, which are generally used by folks with end-of-life financial needs. But there's another, related strategy called life settlements:

"The insured had a $300,000 term policy that was also at that end of the level premium paying period and conversion period. When he called his agent to drop the policy because he no longer needed the coverage, the agent said, “Before you do, let’s see if there could be value in the secondary market.”

That is, the client had no particular health issues, but no longer needed the plan. Since life insurance is property, it can generally be sold. In this case, the client saved the annual premium and picked up an easy $5,000.

Which sounds great, and far be it from me to pooh-pooh anyone coming into a windfall. But I also have some major reservations about mentioning this "secondary market." It's not that I have any particular ethical qualms; after all, it's my client's policy, so why should I care? It just feels ... weird to bring this up.

So I reached out to some colleagues for their thoughts; FoIB Brian D immediately pegged it for me:

"I also fear how it would be received. Would it poison the well right before finalizing a sale."

Exactly. Now, perhaps this makes sense after the application has been approved, as a way to help the client pick up some extra cash now that their new plan is in place. And to be fair, this may well be what the folks who wrote that article do, as well, but it's just not explicitly noted.

And full disclosure: here in Ohio, agents are allowed to help make, and receive compensation for, these arrangements.

Something to consider going forward.

Thursday, June 23, 2016

Thursday Insurance Conundrum

Good question:


Waivin' in the wind

We've written before about group plans suspending spousal coverage, or applying a penalty to employees whose spouses have access to coverage through their own employers. It's a way to reduce overall health insurance spending, to be sure, but it comes with its own set of problems.

Over at Benefit News, Zack Pace takes a look at how this practice affects real people, and how it continues to grow:




Zack takes a page from our own experience, and writes about a young lady who's reached out to him for advice. It's compelling, disturbing, but quite insightful.

Recommended.

Wednesday, June 22, 2016

Potential Good Small Employer News

Yesterday, I met with a couple who own their own small business, and had recently hired their first employee. They wanted to offer health insurance, but really don't qualify for a group plan. Regardless, they wanted to do something to help out the young man and his family.

So we started looking at individual plans, and they asked if they could pay some of the premium. Time was, they could do this, but those days are long gone, thanks to The ObamaTax.

Of course, we can still do it the old-fashioned way, via salary bonus; that has its own set of issues, as well.

Now, there's some hopeful news out of DC:

"Members of the U.S. House of Representatives are getting ready to vote on H.R. 5447, a bill that could let small employers reimburse employees for individual health insurance premiums."

FoIB Allison Bell reports that the bill passed, by voice-vote, this morning.

Be interesting to see how much farther it gets.

Interesting LTCi Idea

So, have a client interested in Long Term Care insurance (LTCi), with some provisos. First, they are very concerned about potential rate increases. Second, they want to deal with only top-rated carriers, and third, they really don't care about Partnership compliance. So we ran our usual pre-screen process (which vets financial suitability and medical history) and went to town.

Here's what we came up with, and I thought it might be of interest to our readers:

We start with a monthly benefit of $6,000 (client's request), a three year benefit period and a 3% inflation guard. Both plans include the "shared care" benefit.

Company A offers a "traditional," pay-as-you-go product, and the initial annual premium for this is $5,400, which yields a total pool of $430,000 for their long term care needs.

Company B is what we call "one-and-done;" that is, they make an initial, one-time deposit ($150,000 in this case), which yields a total pool of $610,000 (about 30% higher than Company A).

Flash forward 10 years, and Company A's received $54,000, and the pool has grown to $590,000. But, if my clients quit or die, they get back exactly $0. And that assumes that there've been no rate increases.

Company B has received nothing past the initial $150,000, and its pool has grown to over $700,000. But here's the thing: if they quit, they get back almost all the money they'd deposited, and if they die, they (well, their beneficiaries) get back twice as much as they'd put in (and tax-free, to boot).

Plus, they have the peace of mind that comes from knowing that they will never see a rate increase.

Pretty cool.

[Thanks to FoIB Randy G!]

Tuesday, June 21, 2016

Hotdoggin' it with Oscar

Almost three years ago, Bob wrote about the travails of a New York-based health insurance start-up called Oscar. The fledgling carrier's "hook" was to be an emphasis on telemedicine and consumerism.

Bob was understandably skeptical, noting that "if it delivers anywhere close to the promise, Oscar should run for public office."

So, how's the campaign going?

"Oscar has attracted 135,000 customers ... But for every dollar of premium Oscar collects in New York, the company is losing 15 cents. It lost $92 million in the state last year and another $39 million in the first three months of 2016"

Ooops.

On the bright side, Oscar's CEO 'gets' it:

That’s not a sustainable position

No kidding there, Mario.

So what seems to be the problem, not just with Oscar but others, such as InHealth? It's simple economics, really:

"[I]nsurers put prices on their plans that have turned out to be too low to make a profit."

No kidding. And, of course, there's increasing pressure on state departments of insurance to rein in double digit rate increases. Anyone who owned a car and needed to buy gas in the early 70's knows exactly how this'll turn out.

Monday, June 20, 2016

Monday Morning Linkage

We first noted the Institute for Clinical and Economic Review (ICER) back in May, noting how it so closely resembled the famed Independent Payment Advisory Board (aka Death Panel). Well, seems that the cat is now officially out of the bag as regards the insurance industry's subterfuge as implemented by this organization:

"In the wake of ridiculous Obamacare mandates, the insurance industry is under tremendous cost pressure to deny its customers access to expensive lifesaving drugs. But those insurance companies don’t want to take the public relations hit for denial of these drugs that cost billions in research and development to get to market"

Hence: ICER

It's almost become too easy taking shots at the 3000% rate decrease, but the hits just keep on coming:

"Health insurers are seeking steeper premium hikes in 2017 than in previous years ... The report offers the most comprehensive and alarming data so far about the premium costs that ObamaCare customers will see when they renew their coverage this fall."

Just in time for Open Enrollment.

Oh, and an election.

Hunh.

From the Lay Down With Dogs Department:

"A nonprofit health insurer in Maryland is suing the federal government to avoid more than $22 million in fees ... said it has been unfairly asked to pay millions of dollars — about one-quarter of its 2014 premiums revenue – under the law’s “risk adjustment” program"

That fine print'll kill ya, brah.

[Hat Tip: FoIB Holly R]

Friday, June 17, 2016

Friday Afternoon Hat Trick

The Political Hat
No, not three posts, but one very interesting - and provocative - post from a blog friend:

"Rationing Healthcare, Misunderstanding Healthcare, Privatizing Healthcare?"

The Political Hat hosts an eclectic blog about - you guessed it! - politics, but this post is focused on a couple related health care ideas or themes, which are really about free market health care solutions versus socialized schemes.

Really interesting, and TPH has a, well, unique way with words.

Good Friday afternoon fare.