Friday, February 24, 2017

We Called It - Grandma Lives

It's almost as if we have a crystal ball. More like it was just that obvious.

Two weeks ago I posted on transitional relief for policies owned before Obamacare went into effect. Under the Obama regime CMS granted two extensions allowing people and small businesses to keep their insurance plans they owned prior to 2014. While it was a reprieve for insurers to insulate current customers from some of the laws craziest provisions, the rule stated these plans were not allowed to extend beyond December 31, 2017.

Well, as we predicted, the Trump administration has decided to continue the Obama tradition. Yesterday CMS issued a new bulletin allowing transitional plans to continue through December 31, 2018.

Back to gazing into the crystal ball. With the extension going through next year I'm going to make a few more predictions for the upcoming year:

  • Repealing Obamacare will take much longer than conservatives want.
  • Very few significant rules will change.
  • More insurers will drop out of the individual market.
  • Government will eventually make risk corridor payments.
  • The individual marketplace will see big rate increases again.

While I can't guarantee any of these points will come to fruition, I'm confident that one thing is certain, since Obamacare passed nothing involving health insurance has been predictable.

Thursday, February 23, 2017

The ObamaCare Success Story: Zip, nada and zilch.

Not that this is really news, but it's nice to have confirmation of something we've known all along:

"The best statistical estimate for the number of lives saved each year by the Affordable Care Act (ACA) is zero." [bold in original]

The problem is that, while it's certainly true that lives are saved every day, there's really no way top quantify how many of those are the result of ObamaPlans, Medicaid, group plans or even non-ACA-compliant or grandfathered plans.

On the other hand, there is actual, empirical evidence that "public health trends since the implementation of the ACA have worsened, with 80,000 more deaths in 2015 than had mortality continued declining during 2014–15."

Now, we all know that correlation is not causation, and sometimes a cigar really is just a cigar, but as my better half says: there are no coincidences.

Take your pick.

[Hat Tip: FoIB Michael Cannon]

Health Wonk Review: Preezy Day Edition

FoIB David Williams hosts this week's round-up of interesting and provocative posts on health care policy and polity. As usual, he includes helpful context, as well.


Wednesday, February 22, 2017

(At least) Two Americas

Remember this guy? Back in Aught Four he said:

"I spoke often of the two Americas: the America of the privileged and the wealthy, and the America of those who lived from paycheck to paycheck"

Back then, he was running for Vice President, commenting on the economy as a whole. A few years later, running for the top spot itself, he threatened:

"When I'm president I'm going to say to members of Congress and members of my administration ... if you don't pass universal health care by July of 2009 — in six months — I'm going to use my power as president to take your health care away from you."

Well, that was just so much smoke, but his take on a country divided seems to have been spot on. As FoIB Jeff M alerts us, there really are two Americas, divided by a common foe:

"Michael Schwarz is a self-employed business owner who buys his own health insurance. Subsidized coverage through "Obamacare" offers protection from life's unpredictable changes and freedom to pursue his vocation, he says.
Brett Dorsch is also self-employed and buys his own health insurance. But he gets no financial break from the Affordable Care Act. "To me, it's just been a big lie," Dorsch says, forcing him to pay more for less coverage."

The real take-away here is that it's only "affordable" to folks who either qualify for a subsidy, or those who make so much (or so little) money that they can either self-insure or go on the government dole. For those of us "stuck in the middle" it's become a nightmare of balancing the need for coverage against the expense of obtaining - let alone using - it.

Thus, two very different Americas.


Tuesday, February 21, 2017

Stupid Industry Tricks

So, the life insurance industry runs a side-gig called "Life Happens" that's designed to ramp up awareness of the need for life insurance (d'unh). We've blogged about it a few times (here, for example) as a way to promote these efforts.

So today's email contained a neat little item from Illinois Mutual promoting a new campaign called "Insure Your Love," which is "an industry-wide event aimed at raising awareness around the importance of proper insurance planning."

You can read more about it here.

So far, so good.

I thought it'd be an especially good idea to see if there were any promotional materials (such as videos and the like) at the actual Life Happens website, so I popped on over.

The good news is that yes, there are such materials available. The bad stupid news is that the rocket surgeons in charge think it's a good idea to put all of the good stuff behind a paywall.

Hey dummies: no one is going to pay you for the privilege of promoting your agenda.


*Tweet* insurance? Really‽

Over the years, we've covered some, well, unusual types of insurance products, from hand models to lovers in China to folks insuring one's virginity. But this one's something else:

"Companies buy ‘Trump tweet’ insurance policies"

Whichever side of the political divide you fall on, it's undeniable that our new President does like his Twitter, happily (or not-so-happily) tweeting out commentary on a regular basis. One of his favorite strategies, it seems, is to take a given company to task for (for example) outsourcing jobs to other countries, or taking stances on a particular partisan issue. And these tweets, coming as they do from someone in ultimate authority, do have an effect. We saw this recently with Carrier and Ford, but also with Macy's and others.

And if your company ends up in Mr T's electronic crosshairs, it can cost bucks.

Big bucks.

Hence, Tweet Insurance.

Now, these plans aren't really what one would call a traditional insurance product; rather than indemnifying via dollars, they "instead offer 24-7 public relations assistance should Trump’s ire befall them."

Methinks it'll be yuuuge.

[Hat Tip: Claire Wilkinson]

Monday, February 20, 2017

Ethical Conundrum: Who owns your cells?

Sometimes the tech threatens to overwhelm the law. For example, we've posted before about who actually owns the data that various medical devices gather:

"Hugo Campos has [an ICD] buried in his chest to help keep him alive. But he has no idea what it says about his faulty heart."

That's because it was being collected (and analyzed, and perhaps sold to 3rd parties) by the manufacturer.

But the issue actually predates all these newfangled gizmos, as we learn from this article that was tipped to us by FoIB Holly R:

"The eldest son of Henrietta Lacks doubled down Friday on his efforts to reclaim his mother's legacy, calling for a congressional inquiry into Johns Hopkins Medicine's unauthorized use of her cells."

It seems that, way back in 1951, Ms Lacks went in for some (routine?) diagnostic testing, which required harvesting some of her cells for analysis. Although she passed away a short time later, her cells live on and "have become the most widely used human cells that exist today in scientific research."

And therein lies the rub: Johns Hopkins (which collected and analyzed the cells) reaps significant financial rewards as a result of their unique access to them. Ms Lack's estate doesn't think this is right, and is looking for some kind of government intervention. There are other issues, as well, but it seems to me that it really boils down to essentially the same question we asked in Mr Campos' case: who owns the data (or the cells from which the data is derived)?

It seems to me that Ms Lacks sought treatment, and (presumably voluntarily) gave Johns Hopkins permission to use those cells, so it's not really clear what standing her estate has here to interfere.

So, what do our readers think?

Thursday, February 16, 2017

Beware of geeks bearing gifts marked “free stuff”. They lie.

Occasionally some member of America’s health-policy leadership triumvirate – a politician, a government bureaucrat, a starry-eyed pundit  - repeats the notion that Americans have a “right to healthcare” and that America can, and must, provide “free healthcare” for everyone.  The details differ, but the schemes are most often called Medicare-for-all, or single-payer.  Regardless of the details, about how much would the “right” of “free healthcare” actually cost?

First please, let’s observe that healthcare is already “free”.  Anyone can cut down on smoking - that's free.  Anyone can exercise, choose a healthy diet, get plenty of exercise.  Free, free, free.  Anyone can drive carefully, reduce alcohol use, avoid drugs, get enough sleep.  These healthy behaviors cost nothing, or so near to nothing that the cost is no obstacle.  Yet people cling to unhealthy behaviors even as they cling to the notion that this country has a problem with its "healthcare" costs.  Maybe the main "healthcare" problem we have, is denial. 

For some reason our health policy leadership triumvirate promotes this denial and confuses the issue by failing to distinguish between health care and medical care.  It’s medical care that is expensive; it's the cost of medical care that is the obstacle to getting it; and it’s the cost of medical care that makes medical insurance so costly.   Once we’re clear on that, it’s possible to re-state the question, look at the factors, and come up with an answer:  How much would the "right" of “free” medical care actually cost?  A rough answer to that question turns out to be sorta straightforward. 

How much do Americans spend for medical care today?   The federales  - specifically CMS - recently released its update of national medical expenditures (of course, they call it “Health” Expenditures).  Here is a summary.

In this summary, CMS reports that national medical expenditures reached $3.2 trillion in 2015.  Elsewhere in another report, CMS estimates that 2016 medical costs rose 4.8% above 2015, and projects that 2017 medical costs will rise 5.7% above 2016.  In other words, CMS projects total national medical spending will rise from $3.2 trillion in 2015 to $3.55 trillion in 2017.  That's roughly how much the "right" of "free medical care" costs.  

Next logical question:  what resources do the federales have?  Total US tax revenues for 2017 are estimated to be $3.64 trillion.  (That’s the highest ever, by the way). 

So according to the best government estimates, 2017 medical costs will equal 98% of all 2017 federal revenues. A very fancy price tag for something that we’re told should be “free”.   It seems obvious the federales cannot afford it and neither can the taxpayers.

Another conclusion is obvious: calling something “free” is misleading when someone else is paying for it.   It’s my understanding that the taxpayers presently finance nearly half of total US medical expenditures.  Still, I think it is misleading to suggest the federales have anywhere near the means to pay for the rest of it – to pay for “free” medical care to all Americans - without an enormous increase in taxes.  It would not be enough to levy such taxes only on “the wealthy” unless perhaps you define “wealthy” as, say, anyone who is paying federal taxes today.   Oh, and don’t forget the federales have a few other duties that cost money to guarantee: to establish Justice, to insure domestic Tranquility, to provide for the common defence, and to secure the Blessings of Liberty to ourselves and our Posterity.  Besides which, the national debt is $20 trillion and, on top of that, Medicare and Medicaid have enormous unfunded liabilities that are not included in the official national debt number.  The federales are simply not in a position to chase after "free" medical care for all Americans.

[btw, the preceding illustrates an obvious fact that our health policy leadership triumvirate does not like to point out.  Medical care is not “free”.  Medical care is either pre-paid; paid at time of service; or paid afterward, via some combination of out-of-pocket payments, insurance premiums, government subsidies, write-offs of bad debt, or charity care. In no case is medical care “free” even if there is some “right” to it.]

From the P&C Files: A Very Big Deal, Indeed

For want of a nail, so the story goes, a kingdom was lost. In this case, the "kingdom" may well be the Sunshine State's homeowner's insurance market:

"An Ohio insurance-rating company has warned that recent court rulings and skyrocketing losses ... have created an "uncertain operating environment" for Florida's property insurers and that it will downgrade the financial stability of 10 to 15 Florida-based companies."

So what's the deal?

As usual when we consider the Property/Casualty side of the business, I turn to our P&C Guru, Bill M. Here's the scoop:

When one has (for example) a roof damage claim, there's an "assignment of benefits" where the insured actually assigns the claim itself to the contractor.

In 2006, Florida carriers paid out about 400 of these claims.

In 2016, they paid out 28,000 of them.


As a result, a number of these carriers are really hurting, and that's about to create a rather serious ripple effect:

Homeowners who have their mortgages financed by Fannie Mae or Freddie Mac are required to not only have insurance on their homes, but the carriers they use must be at least A-rated. But now that the aforementioned ratings company has downgraded a number of these insurers, those mortgages are going to be in default. Now, in normal times, it'd be easy enough to just say "oh well, a-shopping I will go," but when you're talking thousands, or perhaps tens of thousands, of policyholders now flooding the market, well, that's going to be a problem. At the very least, agents are going to be very busy quoting and binding coverage.

But there's another potential problem lurking below the surface: capacity. That is, at any given time, there are only so many carriers who can take on only so much (additional) risk. Normally, that's not an issue, since there are lots of companies out there. But there aren't necessarily that many A-rated ones, and hence the problem.

Bill confirmed to me that, at the best of times, homeowners insurance in Florida is a challenge; now things promise to get "interesting."

Gee, thanks.

[Hat Tip: @JeremyWallace]

Wednesday, February 15, 2017

Running out the clock

Is it possible that the "Repeal" part of "Repeal & Replace" is becoming moot?

Certainly recent events seem to support the theory (which I just made up):

Exhibit A: Yesterday, we learned that the proposed merger of Aetna and Humana was officially declared null-and-void by the parties themselves. Since they were both apparently counting on the increased market share (and, presumably, decreased operating expenses) of one massive carrier, it's not unlikely that this was a mortal wound.

Exhibit B: Following close on the heals of the merger meltdown, Humana has announced that it "plans to pull out of Obamacare exchanges in 2018."

Now, the article seems to conflate pulling out of Exchanges with pulling out of the individual medical market altogether (which doesn't appear to be the case). Still, when most US counties now have (at most)) 2 carriers vying for business, that hoary old promise that "you can keep your plan" seems even more quaint.

Exhibit C: The fear of paying The ObamaTax is one of the most compelling reasons (and, for many folks, the only reason) to even consider buying an ObamaPlan. Now it appears that there's even less bark in that dog:

"How much difference does a single line on a tax form make? For Obamacare's individual mandate, the answer might be quite a lot."

To wit: the IRS is now saying that completing Line 61 (attesting that one had, in fact, been covered by an ACA-compliant plan the previous year) is now optional. This is a major step towards effectively repealing the individual mandate, which is, in turn, a linchpin to the whole ObamaCare regime itself.

Tick, tock...