Friday, February 12, 2016

(Un)Sustainability: 1,000 Words

[click pic to embiggen]

[Hat Tip: SoIB GS; Source]




[Hat Tip:

Late Breaking: Money, Money Health Wonk Review

Steve Anderson hosts this week's break-out edition of the Health Wonk Review. It's about money, for sure, bit it's also about egregious wealth creation (well, okay, that's money) and wasteful legislation, patient-centered care and connectivity.

In fact, it's just a great collection of thought-provoking insights - kudos to Steve!

Thursday, February 11, 2016

North Carolina Blue Cross Struggling

Last month, we reported on some of the major challenges facing the Tar Heel State's Blue Cross/Shield:

"[M]essing up plan selections and effective dates, and dropping the ball on confirmations ... increasing security and safety measures at their facilities due to incidents involving “extremely frustrated customers.”

Well, the heat's now been turned up to red hot:

"The N.C. Department of Insurance will examine Blue Cross and Blue Shield of North Carolina to monitor the health insurer related to billing, coverage verification and other software issues ... [and] monitor compliance with statutes and regulations.”

Talk about an unenviable position.

But wait, it gets better (for certain values of "better"):

"Blue Cross CEO says insurer may leave ACA market in NC in 2017 ... expects to report its second consecutive financial loss in the coming weeks."

Y'know, when we mention "catastrophic plans" we're talking about HSA's, not bailing out water from a sinking boat.

[Hat Tip: FoIB Jeff M]

MVNHS© Struggling

Britain's Much Vaunted National Health System© is "on its knees:"

"[T]hanks to migrants from the European Union (EU) taking advantage of free movement rules.

Cancer treatment can cost up to £200,000 for the UK’s socialised healthcare service, and under Brussels law Britain must offer it to all EU nationals

Long-time readers may recall co-blogger Mike's post on the Schengen Convention, which required  "that persons seeking an entry visa to a signatory country must have adequate medical insurance of their own." At the time, this was apparently vigorously enforced. Now, not so much:

"NHS Trusts were not prepared for the millions of EU migrants who have poured into Britain because the Government estimate was nowhere near the reality."

Sounds familiar, no?

The result, of course, is that the already shaky national health care scheme has become even less stable, as the government (really the British taxpayer, of course) scrambles to provide even modest levels of care. Add in the ever-increasing provider shortage ("less than 20 per cent of students wanting to become GPs") and you having the makings of an impending total collapse of the system.

But don't get too confident about our own, since we're facing pretty much the same (bleak) future under ObamaCare and open borders.

My favorite part of the MVNHS© saga, though, is this gem:

"Britain is attracting thousands of health tourists from across the EU who cannot get certain drugs or treatments in their home country so come to Britain and demand them as EU citizens."

"Health tourists." Yeah, go with that.

[Hat Tip: Co-blogger Bob V]

Wednesday, February 10, 2016

Genworth Struggling

Several days ago, Genworth Financial (one of the major LTCi carriers) suspended "new sales of life insurance products and fixed annuities to help reverse financial losses."

On the one hand, this should save the troubled carrier upwards of "$50 million in annual expenses." On the other, and this is the puzzler to me, it means they've also cut off a major source of revenue. I especially don't understand why they're stopping annuity sales; seems to me that these would be one of their more profitable lines.

Apparently not, though.

It's not surprising that they took major hits on their Long Term Care insurance business, that's pretty much industry SOP. As we noted the other day, these policies are quite different in terms of underwriting and claims than life insurance. Still, seems like there's something else going on here.

And, of course, there is.

We were able to obtain a copy of the February 5th report that Genworth sent to its field force. It's marked "FOR PRODUCER USE ONLY: NOT TO BE SHOWN TO THE PUBLIC," so we'll respect that but note some interesting tidbits:

"GAAP (Generally Accepted Accounting Principles) loss recognition testing margins for the business written since late 1995 were approximately $2.5 to $3.0 billion as higher expected future claim costs and expenses were more than offset by the impact of future in-force rate actions."

That makes sense: as noted above, there are decent profit margins built into life insurance and annuity plans.

The report also expands on the cost-cutting moves mentioned previously:

"Actions taken in 2015 are expected to reduce cash expenses by approximately $90 to $100 million pre-tax on an annualized basis, bringing total expected cash expense reductions to $150 million or more."

That's a substantial chunk of change; whether or not it's sufficient remains to be seen.

In a bit of damage control, the report confirms that "Genworth’s life insurance companies have more than sufficient capital to pay all eligible claims as they arise." This in order to squelch the (reasonable) objection "will y'all actually be around to pay my claim?"

And, of course, the company will continue (at least for now) to service existing policyowners. Of course, that's not necessarily a permanent commitment (just ask folks with Time or John Hancock life insurance policies).

One question that the report does not effectively address is the future of its LTCi business. It notes that the carrier is planning to "separate and isolate" that line from the life/annuity side, while noting in passing the very real challenge of its "LTC legacy block issues that continue to pressure ratings across the organization." In other words: they're getting hammered on older in-force plans.

We've discussed this before: "[T]oo many folks have kept their policies (not a bad thing, per se, just that carriers count on a certain amount of attrition), so both claims and reserves continue to mount." And of course, the longer the plans stay in force, the more likely they are to generate a claim (or claims).

[Hat Tip: FoIB Jeff M and Brian D]

Tuesday, February 09, 2016

Privacy, Shmivacy Redux

"You have no reasonable expectation of privacy regarding any communication or data transiting or stored on this information system"

As we noted several years ago, that's the (explicitly hidden) message greeting newly-registered visitors to the site. But that rat's nest is far from the only place that your "private" health info isn't so private. To be sure, we've been blogging on this very issue for over a decade, but the stakes have grown higher, and the problem larger.

FoIB Ʀєfùsєηíκ did some heavy-duty research to document the claim that nothing's really private anymore:

"No one told the average American that HIPAA loosened data exchange and that it’s expanded now with HITECH, even to the community level, such that individuals are targeted for intervention by social services agencies.

And no one told patients that “de-identified data” is a myth ... Technology has advanced such that patients can rather easily be re-identified

And since a picture's worth 1,000 words:

[click to embiggen]

I'm still not convinced that the whole ObamaTax isn't just a brilliant marketing scheme by LifeLock.

[Pic source]

How Much Does That Website Cost?

Open Enrollment 3.0 is complete. Now the brain trusts of Obamacare are touting the great success of in managing the people who signed up without issues this year. Before they get too excited maybe we should step back and take a look at what we are paying for this "experience".

The Federally Facilitated Marketplace (FFM) charges a user fee of 3.5% of the premium. With an average premium of $4,152 in 2014 each enrolled person was paying $145.32. That's a cool $785 million based on the ASPE figures of 5.4 million people enrolled.

One would think that as the number of users increased an economy of scale would make this more affordable. Unfortunately this isn't the case. Since premiums increased (I know, can you believe it?) and HHS has kept the user fee at 3.5% we have seen a higher cost per person to operate the exchange.

With an average premium of $4,896 in 2016 the new cost per enrolled person is $171.36. With 9.6 million enrolled in the FFM it is now costing $1.65 billion to operate the exchange.

By the way, thanks taxpayers. You are paying 67% of these costs.

Tell me again why we haven't abandoned this tire fire yet.

Monday, February 08, 2016

Assumption status: #Fail

What with carriers cutting (and threatening to cut) agent commissions on individual health policies, I thought it'd be interesting to see if there was any change in the number of us who made the effort over the past few years  to become Marketplace certified. I assumed (yeah, I know) that the number would trend down, but had difficulty tracking accurate info on that.

Thanks to co-blogger Patrick P, however, we now have that data, and it's pretty interesting, if surprising (at least to me):

2014: 71,322
2015: 77,478
2016: 80,684

Now, that includes both individual and SHOP registration, but as I pointed out to Patrick, I think it's unlikely that there would be many agents who would go through the rigorous individual certification process and then skip the very simple SHOP registration one.

So we see that from the first year to the second, there was an increase of about  8.5% in the number of agents pulling the FFM trigger. Then from last year to this, the total again grew, but by a much smaller margin (a little over 4%, or about half of the previous season's).

If that trend holds, than next year one would expect to see about 1,600 new agents sign on.

But I don't think they will; in fact, I suspect that there will be a significant drop in the number of agents who bother to go through the training just so they can "sell" a product that doesn't pay a commission.

Time will, of course, tell.

Friday, February 05, 2016

End of Week Linkage [UPDATED]

First up, a tale of wasteful spending courtesy of co-blogger Bob V. According to the Congressional Budget Office:

"It will cost the federal government – taxpayers, that is – $50,000 for every person who gets health insurance under the Obamacare law"

And keep in mind, that's in addition to any actual premiums paid directly to insurers. And it still doesn't actually solve the "problem" of the uninsured:

"The best-case scenario described by the CBO would result in ‘between 24 million and 27 million’ fewer Americans being uninsured in 2025"

That's almost 1½ trillion dollars spent over 20 years and there will still be millions of folks left uninsured.

Great job!

Next up, from FoIB Jeff M, is some bad news for some Tar Heel State employees, who "could lose access to a popular health insurance option and see costs for other options rise." [ed: Updated, see below]

This despite the fact that President Obama himself promised that this could never happen.

UPDATE: It appears that this plan will not be eliminated (at least for now). Interesting.

Oh, and the bureauweenies in charge are also considering "eliminating coverage for spouses."

To be fair, lots of employers have begun adopting this strategy, and from their perspective it makes a lot of (financial) sense. And everyone then talks about how that's "dumping" these people "onto the Exchange." But what no one seems to have noticed is that it also creates an additional burden on families: health insurance plans have both individual and family Maximum Out-of-Pockets. But when you split them up, so that Dad's covered on one plan, and Mom and the kids on another, you've just added an additional additional out-of-pocket expenses.


For Ohio-licensed insurance agents, there's some good news: the Buckeye State joins "21 other states that already allow insurance agents to carry over excess CE credits." This is welcome news for those of us who find themselves with extra CE's at the end of a cycle.

So what's keeping those other 36 states from joining in?

Wednesday, February 03, 2016

Finally! Free male cancer screening

Regular readers already know that the long list of ObamaTax "freebies" (preventive care bennies paid at 100% with no deductible, etc) does not include male-specific items such as prostate screenings.

But never fear, turns out a completely different Federal agency has that covered:

"At the Newark Liberty Airport TSA agent Dennis Brown discovered a lump on a local man’s testicle."

I for one had no idea that the pre-flight exam screening was so...thorough:

"TSA agents are told to “Thoroughly inspect the testicles.”

Guess Mom was right again about that whole clean underwear advice.

[Hat Tip: ‏@BrentCochran1]

Interesting Underwriting Dilemna

Had an unusual message when I arrived at the office today:

"Good morning! I'm considering donating a kidney to my father, and I've been told to ask about my life insurance. For one thing, can they cancel it or raise my rates if I do go through with with the donation, and will it affect my ability to increase my coverage later on?"

Great questions. First, no, companies can't cancel or increase the premiums on existing plans if you do go ahead. Carriers are only allowed to cancel existing plans if you either stop paying premiums (which is really you cancelling them) or for committing fraud when you applied.

The going forward part is interesting though: I presumed that there could (indeed, probably would) be some negative impact, at least initially. But I offered to reach out to the underwriter at my primary company, and she told me that "the client can be considered for coverage and for preferred class as long as the remaining kidney is functioning normally."

Pretty nifty!