Friday, August 29, 2014

Insuring Ferguson: Update/Correction

Earlier this week, we posted on a couple interesting P&C-related items, one of which was the "civil unrest" in Ferguson, MO (there's a reason for the scare-quotes, we'll get to that directly). In that post, I reported - incorrectly - that riot-related claims would not be covered under standard commercial policies.

Ted Kinney, Director of Education for the Alabama Independent Agents association, graciously emailed me with a correction:

"Ferguson is probably more of a “civil commotion” than a riot.  Most standard policies do cover riot & civil commotion.  If  a covered peril damages property on the policy’s described premises, the business interruption coverage (if there is coverage) would also be triggered."

He went on the explain that "riot and civil commotion are not defined in commercial property insurance policies and forms (or homeowners forms, for that matter). Instead, major court decisions ... provide the guidelines, often based on dictionary definitions or statutes."

So there you have it: the damages, and the concomitant loss of business, are most likely covered - assuming, of course, that the store owners actually had policies in force.

Thanks, Ted!

Cavalcade of Risk #216: Call for submissions

Tim Dodge makes his CavRisk hosting debut with next week's edition. Entries are due by Monday (the 1st).

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.

We need hosts for Fall Cav's - Please drop us a line to claim yours. It's easy, fun and a nice traffic bump. Thank you!

Thursday, August 28, 2014 Security Chief Was Distracted

It's no secret that the Obamacare website is not only dysfunctional, but also has major security
flaws. There may be a good reason for the latter problems. The IT chief of security apparently had his, uh, hands full with other distractions.
Timothy DeFoggi, who had been the lead IT specialist at the Department of Health and Human Services, was found guilty Tuesday for accessing and viewing child porn, and discussing his fantasies — which included the rape and murder of children — on message boards.
[He] was found guilty of engaging in a child exploitation enterprise, conspiracy to advertise and distribute child pornography and accessing a computer with intent to view child pornography.
Apparently he was dallying when he should have been dillying.
In May, the Department of Homeland Security announced the major bust of a childhood pornography ring leading to the arrest of 71 individuals, in part due to the monitoring of elicit activities on a web group with over 3,000 members.
The offenders came from all walks of life, including “two police officers, a Little League coach, and a mother.”
And the chief of security for the Obamacare web site ............

Obamacare SNAFU - The Gift That Keeps On Giving

It all started with a failed website (that STILL isn't fixed), followed by lack of full disclosure about
just how bad the new Obamacare plans were, then you had doctors that refused to accept patients with Obamacare, applications that were never properly submitted to carriers, premiums that were never paid ......... the list goes on.

As bad as that is, how would you feel if you worked very hard for 5 months, investing not only your time but money, only to later discover you would not be paid for your efforts.

Six brokers filed a lawsuit Tuesday in Clark County District Court, seeking class-action status for their claim that the Silver State Health Insurance Exchange and its website contractor, Xerox, have failed to pay commissions on coverage they sold through the exchange’s Nevada Health Link website.
 The brokers are Patrick Casale, Mary Elsberry, Dwight Mazzone and Jeremy Shugarman of Clark County, and Grace Butler and Andrew Perwein of Washoe County.
Matt Callister, an attorney representing the brokers, said the six are collectively owed “a very significant amount well in excess of $200,000.”
Applicants that never received their policies, who can't find participating providers, and can't get their claims paid have company.
Like a bad penny, Obamacare problems just won't go away.
Meanwhile, out on the golf course ................

MVNHS© Rocket (but not Cancer) Surgeons

First, the good news: 66 year old Roger Mollison is cancer free.

That's good news because the folks who run the Much Vaunted National Health Service© don't exactly have a great track record when it comes to cancer care. The not-so-great news is that, despite their "best" efforts, they couldn't cure Mr Mollison of cancer.

Mostly because he didn't have cancer in the first place:

"Doctors at Ninewells Hospital in Dundee told Mollison to prepare for the final nine months of his life after diagnostic testing revealed a deadly case of mesothelioma"

Imagine the sheer horror of receiving such a diagnosis, and then undergoing years of debilitating (and expensive) chemo, hoping that it will buy at least some time.

And then learning that, contra the original diagnosis, he didn't have the dread disease after all. And just how did he learn this?

Sadly, you probably won't be surprised:

"It wasn’t until he received a second opinion in accord with a claim he was filing ... that he learned that he was not suffering from mesothelioma but rather a non-life-threatening asbestos-related illness."

Where's Emily Litella when you need her?

Wednesday, August 27, 2014

This Obamacare Winner Will Save $78,420!

Thanks to President Obama's promise of keeping their current plan my client is seeing his premiums increase by 13% for the upcoming plan year. Annual premiums for this company's 15 employees are going from $129,684 to $146,508.

They offer a very rich plan design (Platinumesque) and until October of 2010 they paid 100% of the premiums. Back then the company was spending $100,164. With a tough economy the owner made a difficult but necessary decision: employees would have to pay a portion of their premiums. They were asked to contribute 10% of the premium. Now they pay 15% of the premium.

You might be asking yourself, how is this employer an Obamacare winner? How are his employees winning? Allow me to explain.

In Ohio insurers are allowed to offer an "Extended Transition to Affordable Care Act-Compliant Policies." This is a DELAY in the law extended by CMS (after Obama promised you could) allowing people and small employers to keep their plans until they renew in 2016. Then this employer will be forced into community rated products with strict benefit mandates that must fall within narrow parameters at the renewal in October of 2016.

Why didn't we move them into an Obamacare compliant plan? They could have. In fact we did our diligence exploring various insurers in the market. There were several options to choose from. They would have had a different plan design but it would have been very similar to the actuarial value of their current plan. But doing that would have cost the company $224,928.

13% increases are unacceptable by Obamacare standards. For this company it will cost them $16,824 more this year than last year. That is a tough pill to swallow. But, words can't describe the pain from the $95,244 suppository had the company been forced into an Obamacare compliant plan - which is exactly what is going to happen in 2016.

Medical ID Theft Revisited

Back in February, we again sounded the alarm about Medical Identity Theft:

"Most identity theft in the United States is medical-related ... In 2012 alone, medical identity theft increased by nearly 25 percent, affecting 1.85 million Americans"

And things haven't really improved since then.

So what's the big draw for hackers looking to steal your records?

How about $50 a pop? Multiply that over thousands - or tens of thousands - of unsuspecting victims, and you've got quite the successful business model.

On the other hand, there may are some common sense ways to protect yourself from this risk (or at least mitigate it). A security consultant writing at LinkedIn offers some pointers for healthcare providers - might be a good idea to see if yours is taking the threat seriously:

■ Encryption. This seems pretty obvious, but it's also a pain (and we're all familiar with the ubiquitous sticky notes hanging from monitors).

■ Biometrics. This is even better, but of course it's also more expensive. On the other hand, higher demand may force prices down, so this may be the future.

Go read the whole thing - it's a quick read, and pretty informative.

And Now a Word From Our Sponsor

Did you buy one of those brand spanking new Obamacare plans? If you did, you may get an email from (Carrier) that reads something like this:

Immediate attention is needed to keep your health coverage. Take action before Sept. 5, 2014.

Carrier wants to help you keep your current insurance coverage and maintain your current monthly payment amount.

IMPORTANT: The federal government-sponsored Health Insurance Marketplace (also known as the “Exchange”) has been attempting to reach you. At the request of the federal government, we are reaching out to you because you are at risk of losing your current Carrier coverage or any financial assistance you may currently be receiving, also known as Advance Premium Tax Credit (APTC). 

The deadline to take action is September 5, 2014.

What you need to know:

• The federal government-sponsored Health Insurance Marketplace needs more information to ensure you can keep your current coverage. They have been attempting to reach you for one of two reasons: 
• The marketplace would like you to provide proof of your yearly income for 2014 for everyone who was on your tax return, if they had income.
• The marketplace would like you to provide proof that you are a U.S. citizen, U.S. national, or have an eligible immigration status.

What do you need to do immediately?

• To determine which documents the marketplace is requesting, please contact the Marketplace at 1-800-318-2596. There are marketplace experts ready to answer your call 24 hours a day, seven days a week.
• For either situation, you need to provide a copy of the documents the marketplace is requesting. You can do so by adding copies to your “My Account” online at (this is the fastest way to get your documents processed) OR mailing the documents to:
Health Insurance Marketplace
Attn: Supporting Documentation
465 Industrial Blvd.
London, KY 40750

*If you have any issues adding copies to your “My Account” please contact the marketplace at 1-800-318-2596. There are marketplace experts ready to answer your call 24 hours a day, seven days a week.
*If you have already provided this information to the marketplace and/or you have heard from the marketplace that they have received the additional information, please disregard this note.

What will happen if the additional documents are not received by the federal government-sponsored Health Insurance Marketplace?

• The marketplace will terminate your Carrier coverage or no longer provide you with financial assistance. When the marketplace does this, they will notify Carrier. Carrier will then follow instructions from the marketplace that requires us to send you a notification of changes with your coverage. These changes will include either a termination of coverage OR a change to your monthly payment.

Again, Carrier wants to help you keep your current coverage and maintain your current monthly payments. Please provide the requested documentation to the marketplace no later than September 5, 2014. If you have questions, contact the marketplace at 1-800-318-2596. There are marketplace experts ready to answer your call 24 hours a day, seven days a week.

Thank you again for being a Carrier member. 

We look forward to continue being your partner in health.
Protecting your privacy is important to us. To learn more about our privacy policies, view our Internet Privacy Statement and our Privacy Practices.
Please visit for additional information.

Any questions?

Smoke them if you have them.

Tuesday, August 26, 2014

IRS Form 1095-A

Obamacare fans, here is what you have been waiting for.

If you bought an Obamacare plan through and received a premium subsidy or APTC, you will need to file form 1095-A with your taxes.

Here is your link to a DRAFT of 1095-A

But wait, there's more.

You (and your tax adviser) might also be interested in form 8962

And you thought this was going to be easy.

Who Do You Believe

According to CNN, the Inspector General is expected to release a report that claims there were no deaths due to excessive wait times or denied access to care at the Veterans Administration facilities.

Monday, August 25, 2014

(Sex) Ch-ch-changes

Well, it took some time, but the future is finally here:

"Then Payne, who had a wife and four children, realized she could no longer live as a man."

Wait, what?

Demonstrating the mother (er, father?) of all "pre-existing conditions," Ms Payne (and what a gloriously appropriate moniker) waited until her wife died of alcohol-related liver disease (gee, who could have seen that coming?) and then went shopping for a surgeon.

Thing is, this is expensive (if entirely elective) surgery, and she didn't think it was fair that she shoulder that burden alone. Her Blue Shield-issued ObamaPlan (and we taxpayers who foot some - maybe all - of the premiums) is now on the hook for some yet-to-be-determined chunk of change:

"She found an out-of-network doctor in Palo Alto who would do the surgery ... got a cashier’s check for nearly all her savings, $27,000, to pay the doctor, hoping her insurance plan would reimburse most of it."

You're welcome.

Her friend Jenny (Jerald?) hasn't been so fortunate: she also bought an ObamaPlan, but from the Volunteer State Exchange. Her doc was also out-of-network, and she had "no hope of reimbursement." Part of that is because her hormone regimen is only dispensed to women, and her ID still listed her as male (how cisgendered!). One supposes that that would be an easy fix (so to speak), but apparently not.

So of course she's moved to California, where she hopes to also glom onto a Covered California plan.

Wait, you didn't know that moving enabled you to buy a new plan?


On the other hand, they probably don't have to worry about the free birth control.

Two Timely P&C Notes

■ Now that things seem to have down a bit in Ferguson, it's worth noting that the clean-up from all the looting and rioting will take some time, but that it's unlikely any of the damage will be covered by business owners' insurance policies.

According to P&C Guru Teresa S, "riots are not covered, therefore anything resulting from a riot is not covered.  It usually goes back to the government.  Looting, I would say is not covered due to it being part of the rioting."

So of course, you and I will become the insurers.

■ Now that school's starting back up, lots of student athletes will also be warming up on and off the field. Some of them, though, will become injured, perhaps bad enough to effectively end their college sports career - and scholarships.

Never fear, though,  California-based EPIC Insurance Brokers is now marketing their Education Protector plan:

"[T]he first of its kind policy that provides funds for tuition reimbursement in the event a student athlete is injured between receiving a verbal offer for an athletic scholarship or grant and signing a Letter of Intent, which binds the athletic scholarship or grant."

Apparently, they've done their homework [ed: heh] and determined that over 126,000 student athletes are expected to receive some $2 billion in scholarship money. That's a lot of cash at risk.

Cool idea.

Friday, August 22, 2014

Has Medical Tourism Jumped the Shark?

Over the years, we've written many times about medical tourism: from folks traveling to the US for treatments to folks who found better options abroad.

But this, this boggles the mind:

"The number of foreigners traveling to Switzerland to commit assisted suicide doubled over a four-year period"

Europeans made up the bulks of their "customers," the article didn't mention how many Yankees participated.

Tax Form 1040(OY)

Let's suppose that, against all odds, you've successfully navigated the site and enrolled in an ObamaPlan. And let's further suppose that, against all odds again, you're deemed eligible for a subsidy.

Now - and bear with me here - let's suppose even further that you're gainfully employed and need to file your taxes. Piece of cake, right?


"Obamacare customers won’t be able to file their tax returns next year until the government sends them a form detailing their coverage and tax credits"

Well, we're all familiar with the prompt, efficient and accountable IRS, so no problem, right?


If you're due a refund, well then you're stuck: until you can attach those forms to your return, you're getting bupkis.

But that may be the least of it: what if you owe taxes? You can't complete the return without the form, so will you now owe penalties and interest, too?

And there's this: if you miscalculated (or just had a stroke of mid-year good luck) and end up making too much income, you're going to have to refund at least some of your subsidy back to Uncle Sugar. That's only fair, right?

Click here for a more detailed explication.

Carefree, or Free to Care?

Dr Rob Lamberts (whom we interviewed a few short years ago, when he dove into the concierge medicine pool) has a touching, sad but ultimately hopeful post on end of life care, and the compassion one can bring to the table:

"Thank you, sir, for letting me into your home.  Thank you for trusting me when you didn't want to trust a doctor.  Thank you for letting me help you stay at home and live out your last days as you wanted them to be."

Read the whole thing.

Thursday, August 21, 2014

What's Old is New: The AMA, Medicare and Value

Almost four years ago, we wrote about a little known committee, nestled deep in the bowels of the American Medical Association (AMA), that exercised outsized power over how much money doctors will receive in Medicare reimbursements:

"Three times a year, 29 doctors gather around a table in a hotel meeting room. Their job is an unusual one: divvying up billions of Medicare dollars"

As reported at the time in the Wall Street Journal, "the influence of the secretive panel, known as the Relative Value Scale Update Committee, is enormous ... the impact of the decisions made by the doctors on the RUC goes well beyond physician fees"

And indeed, the effects are still incredible: that committee "with the assent of the government, has enormous power to determine Medicare prices by assessing the relative value of the services that physicians perform."

Pretty cozy: the government feeds them, and they divvy up the loot. Nice gig (for them).

But how does that affect thee and me?

Well, it's actually not that complicated: Primary Care docs (representing about 30% of US physicians) are at the bottom of the food chain, even though they are critical frontline actors when it comes to assessing a problem and recommending alternatives. And by "alternatives," we increasingly mean "specialists." And how does that work?


"[T]he committee has ... skewed Medicare fees in favor of expensive specialists over ordinary general practitioners ... Because Medicare fees are the baseline for the rest of the pricing in the health care system, this has had a broad effect, contributing to a situation where primary care doctors are in general underpaid, underappreciated."

Now , we're not playing the Rich Doctor, Poor Doctor game here, but it's worth noting that the docs who are most involved in our initial care are the ones with the least time at the payment feeding-trough. Here's why: Medicare fees drive (to a significant extent) private insurers' reimbursement schedules. So when that Relative Value committee essentially sets Medicare's fees, they're also effectively setting Anthem's, and Aetna's and Humana's (to name a few). And since most (but not all) docs still accept insurance, the effect is magnified.

It's also worth remembering that the AMA itself represents less than 17% of all US physicians, yet wields this enormous power with little (if any) accountability or oversight. Food for thought.