Tuesday, March 31, 2015

Explosive Renter's Coverage?

Last week's terrible explosion claimed 2 lives (so far) and left scores homeless. Jeanne Salvatore, of the Insurance Information Institute, explains how renter's insurance helps in these circumstances:

My Answers.com article has a more detailed explication of this valuable coverage, as well.

Tuesday Potpourri

Interesting items for your early week perusal.

Item 1 - Not exactly a surprise:

"[A] survey of 743 personnel executives by the Society of Human Resource Management ... Nearly 14% of firms have cut part-time hours for workers ... and another 6% plan to do so."

But hey, free health care.

Item 2 - And some more good news (for certain values of "good"):

"The death spiral isn’t just a theory. Eight states learned this the hard way in the 1990s when they enacted two policies known as “community rating” and “guaranteed issue ... Obamacare includes both community rating and guaranteed issue"

Three guesses where this is heading (and the first two don't count).

Item 3 - As we head into the tax season home stretch, the IRS has "put out a plea for consumers and their tax preparers to look on HealthCare.gov for advice about exemptions from the [ObamaTax]."

Of course, since they ask for zero documentation, one wonders how many folks will just go ahead and check "yes." Trying to figure out the downside of that.

Happy Tuesday!

Monday, March 30, 2015

Face-Palming HIX Tricks

Regular readers may recall Bob's post a week or so ago lambasting the folks running the ObamaTax for shortchanging citizens by effectively locking out their agents and brokers:

"[T]there is also a concern for the lack of informed advice available to the consumer that dialogues with a navigator who has barely a few weeks of training (if that) buys through the exchange. What kind of counsel are they getting? Do the navigators understand the nuances of a PPO plan vs. HMO? And what about drug formularies?"

Of course not, but because the "agents are unnecessary (if not evil)" meme was fully entrenched, it seemed that folks who could truly benefit from having access to a knowledgeable, accountable agents were outta luck.

The good news is that at least one state, Washington, has seen the light:

"If you want to get people insured, you go to agents and brokers ... the board notes it is working to increase broker participation, and therefore increase enrollment participation."

And it gets even better: the folks running the beleaguered Maryland Exchange "said they were looking to brokers to reach those remaining uninsured. That including rotating brokers into their call centers." [ed: not sure how well that'll work, since agents work best independently, but perhaps time will tell].

Are eyes being opened at long, long last?

Sunday, March 29, 2015

Yeah, 'bout those ObamaTax Sign-ups

Saw an interesting comment at another blog I frequent:

"Did [my taxes] early, with TurboTax. If I explained why, you would definitely not suspect I was some kind of overachiever. I was expecting a bunch of paperwork to prove I had health insurance, but all there was was some sort of affirmation and no further hassle.

Which tells me that the stats about who has health insurance and who does not will be lies

And then I thought back to ours, and remembered I was surprised that no documentation was required (nor was there any indication that it could be attached).

I'm mildly disappointed in myself for failing to make the connection the commenter did.

But it's spot on, no?

Friday, March 27, 2015

More March (Open Enrollment) Madness

As we noted a few weeks ago, Our Betters in DC© have (illegally) extended Open Enrollment season for those who flaunted the (evil) Individual Mandate last year:

"The Centers for Medicare & Medicaid Services (CMS) announced today a special enrollment period (SEP) for individuals and families who did not have health coverage in 2014 and are subject to the fee or “shared responsibility payment

Aetna has emailed a helpful "message for the brokers" to let us know that "[t]his Special Enrollment Period is for on-exchange business only and all applications must go through the Marketplace." That's actually a helpful bit of info: it means that one can only satisfy the requirement this way by going to the buggy, security-challenged Exchange.

The carrier also "expects premiums to be paid prior to the member’s specified due date. Exchange rules require a payment grace period. Although this is not a new term, the grace period for Exchange premium payments will differ between non-subsidized and subsidized members."

Which is a rather long-winded way of saying that some insureds are more equal than others. You'll also note that they don't specify exactly how some are more equal, presumably to avoid giving folks any ideas about gaming the system (heh). The bottom line is that, if you're eligible for and take a subsidy, your grace period is 3 times greater than the rest of us proles.

Isn't that special.

Oh, and ICYMI, only those who meet these criteria are eligible at all:

  • Are not already enrolled in a 2015 plan.
  • Were unaware or did not understand the implications of the fee for not enrolling for 2014 until after the end of open enrollment (February 15, 2015).
  • Owe a fee for not having coverage in 2014

Thursday, March 26, 2015

Outstanding Carrier Trick

A few months ago, I "inherited" a small group from a colleague transitioning out of that side of the business. One of the challenges with this process is that the new agent doesn't have any of the original paperwork (applications, etc) to refer to should the need arise.

Yesterday morning, I received a frantic call from the employer: one of her employees had recently changed doctors, and needed to have a prescription filled. For some reason (I'm still unclear on the specifics), the pharmacist couldn't get the okay from the insurer because the employee's birth date didn't match what the carrier had on file.

The employer called me to see if there was anything I could do to resolve this as quickly as possible, preferably by the end of the day. I explained that insurance companies (very) rarely move that fast, but that I'd see what I could do.

Fortunately, I had the contact info for the carrier's rep. Even though this wasn't his area (he toils on the individual side), he was able to access the original application to confirm that the records didn't match. He quickly helped me get to the proper department, where I explained the problem to a very nice lady, who told me that all she needed was an email with some basic info (group and ID number, and correct date of birth) and that we needed this resolved ASAP. I immediately fired that off, and let the employer know that we'd at least gotten a good start, I also advised her that she should urge the employee to wait until (at least) today to try getting the scrip filled, since it generally takes a while for these things to resolve.

Oh me of little faith!

About an hour later, I got an email telling me that "[t]he correction has been made to the drug system.  She can pick up her Rx now."


So, kudos to Medical Mutual of Ohio, and especially Mike B and Nancy K for a job (very) well done.

And The Winner Is ........

Obamacare is 5 years (and a few days) old.

If you listen to the administration, and news media, this is a popular program.

Of course the same administration thought it was a good idea to swap 5 terrorists for a deserter.

So how is Obamacare really doing? Who is benefiting? Who isn't?

Glad you asked.

Much has been made about income inequality. In an off the cuff remark by candidate Obama to Joe the plumber Obama said it was a good idea to spread the wealth around.

Candidate Obama also said, "At some point you have made enough money".

But few paid attention.

Maybe they are listening now.
A whopping 76 percent of Obamacare-eligible individuals who earned between $11,770 and $17,655 annually actually signed up for a plan this year on the federally run insurance exchange HealthCare.gov, which serves 37 states, Avalere found. That income group represents the low end for qualifying for Obamacare subsidies, and as a rule those people would receive the largest amount of financial aid.
But there were steep declines in the next two income groups, even though those people receive not only help paying their monthly premiums, but as with the lower earners remain eligible for financial assistance to cover out-of-pocket medical expenses.
Just 41 percent of eligible people earning between 151 and 200 percent of the federal poverty level bought HealthCare.gov plans. And just 30 percent of eligible people in the next income group, earning up to 250 percent of the poverty level, bought such a plan. - CNBC

Looks like this spread the wealth around idea is working.

Just can't figure out why they had to dismantle a working system that most people liked and replace it with something that is costly, dysfunctional and mostly unpopular.

Health Wonk Review: We're not really in Daytona edition

Over at Wing of Zock (which, as we've noted before, would make a great name for a band), Jennifer Salopek hosts this week's outstanding round-up of health care wonkery, covering a panoply of topics from who owns our health records to the recent travails at California Blue Cross (about which our own Bill Halper has written).

It's a grand edition, and worth perusing.

Wednesday, March 25, 2015

Medicaid & Long Term Care: An Update

FoIB Holly R tips us to this from the folks at NPR:

"The Morgans live in Stockton, California. They are in their early 60s and are retired, aside from Rod’s occasional construction jobs ... In 1993, Congress passed a law requiring states to recover the costs of long-term care services spent on Medicaid recipients over the age of 55 after they die, the exact burden the couple was hoping to avoid."

No kidding.

In fact, we've noted this issue many times (most recently a few months ago). Unlike the ObamaTax clawback problem, this one's entirely reasonable: if your fellow taxpayers are footing your long term care bills, then we have a right to be reimbursed from your remaining assets. Fair's fair.

Of course, some folks don't see it that way:

"Pat McGinnis, the executive director of California Advocates for Nursing Home Reform, says estate recovery hurts the people who need inheritance the most."

No doubt, but that's where planning and risk management come into play: Partnership-compliant Long Term Care plans help defray the cost of long term care and preserve part (maybe most) of your estate.

Something to think about.

Tuesday, March 24, 2015

Tangled Webs

Maybe it's the troubled economy, or perhaps folks are really pressed for funds to pay their ObamaTax, but it seems like there's been a spate of fraudulent life insurance death claims of late. A few months ago, it was a "widow" filing for $2 million worth of life insurance; turned out, her "late" hubby was very much alive. That one was truly a family affair: "Her son ... was charged with actively concealing the fraudulent scheme." That one included another nice touch: "At her request ... the body was cremated."

One way to get rid of evidence.

But even that well-planned scheme pales in comparison to the intriguing case of The Gorman and The Fox:

"When a man was found dead in a Houston-area motel room of apparent natural causes in January, police figured it would be an open-and-shut investigation ... the man — whose fingerprints identified him as Gerard Joseph Gorman — was suspected of murder in Colleyville."

And it just gets worse from there; it appears that Mr G and his son "stalked and killed Anita Fox, an elderly Alvarado housekeeper."

Grisly, yes. Tragic, of course. But what has any of this to do with life insurance, let alone fraud?

Well, ya see, Danny boy, the Gorman's were Irish Travelers, "a secretive and nomadic ethnic group whose members often garner their wealth by doing dubious repair work and executing scams — and by taking out exorbitant life insurance policies on one another."

In this case, it appears that the late Anita Fox was no stranger to these schemes, even as she fell victim to one.

Here's my question, though: Mrs Fox is described as "an elderly Alvarado housekeeper;" how, exactly, did someone convince the carrier to issue a million dollar policy on a maid? Generally speaking, a policy that large is going to require at least some "financial underwriting;" that is, one's income and/or assets have to justify such a large (even by today's inflated standards) amount.

As an aside, I really hate it when reporters just take their subject's word for something, as if either one of them had an actual clue:

"In America, there’s a clause which allows you to insure anyone with a blood connection"

This is simply wrong: no such "clause" exists, and it doesn't even pass the smell test: Really? An insurance company will let me buy a $1 million insurance policy on my second cousin, in another state, no questions asked? So "insurable interest" is trumped by blood?

I don't think so, Deanna. Next time, do a bit more research.

Something just doesn't add up.

Medicare - The Fix Is In

Well, almost.

Congress admists SGR (Sustainable Growth Rate), the "permanent" fix for controlling Medicare costs, isn't working.

Every year the SGR triggers a cut in payments to medical providers.

Every year Congress caves in and votes for a lesser cut.

And then kicks the can further down the road.

Now there are no less than 4 (and probably more) proposed "fixes" for the Medicare problem. Kaiser Health takes a look.

Their goal is to cut $200 billion from Medicare over the next 10 years.

The White House wants to cut $423 billion.

How will they do that?

By making seniors on Medicare pay more.

Higher premiums.

Higher deductibles.

Higher out of pocket expenses.
Starting in 2018, wealthier Medicare beneficiaries (individuals with incomes between $133,500 to $214,000, with thresholds likely higher for couples) would pay more for their Medicare coverage, a provision impacting just 2 percent of beneficiaries, according to the summary.
Starting in 2020,   “first-dollar” supplemental Medicare insurance known as “Medigap”  would not be able to cover the Part B deductible for new beneficiaries, which is currently $147 per year but has increased in past years. - KHN
Sorry Charlie.

We paid into Medicare all our working lives, and now they expect us to pay more?

Don't think so.

DC logic.
Experts contend that the “first-dollar” plans, which cover nearly all deductibles and co-payments, keep beneficiaries from being judicious when making medical decisions. According to lobbyists and aides, an earlier version of the “doc fix” legislation that negotiators considered would have prohibited “first dollar” plans from covering the first $250 in costs for new beneficiaries.
If we have to pay more to see the doctor we may not go as often.

What could possibly go wrong with that?

Monday, March 23, 2015

The Best Laid Plans [Updated]

From the "No D'unh!" Department:

"A special enrollment period to obtain health insurance for millions of uninsured people who owe a tax penalty under the Affordable Care Act is off to a slow start ... Only 12% of uninsured people would buy policies if informed of the penalty"

In other words, a lot of folks with even rudimentary math skills have figured out that paying the fine penalty tax and "going bare" is a much more cost-effective choice than buying coverage.

No kidding.

UPDATE: Rubbing salt in the ObamaTax wound, we also learn that (surprise!), the overall enrollment picture ain't exactly rosy:

"Of the 8 million people who signed up for a marketplace plan last year, 6.7 million actually enrolled"


Sunday, March 22, 2015

Uneven Playing Field

Even before Obamacare limped out of the gate in October, 2013, I was concerned about the uneven playing field and competing with the likes of the federal government while trying to build and even maintain a client base.

In essence, agents like myself who have devoted years (40 in my case) to studying the health insurance industry, designing and implementing plans to deliver the most value to our clients, would now have to compete with the government. To make matters worse, we are taxpayers funding our own competitors.

But going beyond what may be perceived as selfish motivation, there is also a concern for the lack of informed advice available to the consumer that dialogues with a navigator who has barely a few weeks of training (if that) buys through the exchange. What kind of counsel are they getting? Do the navigators understand the nuances of a PPO plan vs. HMO? And what about drug formularies?


Their job is to direct you to the lowest cost plan for your area and service after the sale is non-existent.

David vs Goliath
Back to the original topic, how is the agent to compete against the federal government with a limitless budget and the ability to blow $700 million on a website that still doesn't work properly? On top of that, all the proclamations from the president on down as well as media reports never mention buying coverage through an agent. It is all directed at the dysfunctional healthcare.gov and staff enrollers paid to guide you to the lowest cost plan based on your guesstimate of future earnings.

Sounds like a perfect storm.

The country's largest health insurance agency, eHealthinsurance, is having trouble coping with this brave new Obamacare world. For all the talk about how many MORE people would buy health insurance one would think insurance agents and places like eHealthinsurance would be in a profitable growth mode.

Not so.
Obamacare is only its second year of enrollment, but Uncle Sam has already sidelined eHealth, which has announced that it will lay off 15 percent of its workforce and take a restructuring charge of up to $4.7 million dollars. - Forbes
The first full year of Obamacare in all its' glory created a low and RIF for eHealthinsurance.

So, 160 eHealth employees will lose their jobs. That does not seem like much, compared to the overall reduction of 2.5 million jobs lost due to Obamacare by 2017. Still, they are jobs that would not disappear, if the government had simply allowed eHealth to compete. Instead, the government used taxpayers’ money to compete against eHealth, both directly and by subsidizing state exchanges.
Read that again and notice the observations regarding employment.

The White House likes to talk about job growth and lower unemployment yet Forbes has the gall to challenge those statements.

Game changer
While some may slough off those numbers, the frightening part to someone with a Libertarian view is this. Anyone in the health insurance business before 2014 suddenly found themselves in direct competition with the federal government. Taxpayer dollars were used, not for the national defense, not for social welfare programs but to compete head to head with business owners.

This has ramifications that go beyond health insurance.

If the government can and will create an entirely new market while implementing laws designed to destroy an existing industry and at the same time build a new delivery system to compete with business owners, what is to stop them from duplicating this process for other industries?

What's next?
What if they decide to tell the news media what they can and cannot report and then create a Soviet style organization that delivers information to the public?

Or maybe the government decides to issue rules governing the internet and use that power to suppress free speech?

A government that could do that could also make it illegal for citizens to own firearms or say you can own a gun but you can't buy bullets.

Business owners have to deal with challenges every day and competition is a fact of life. You can say it is unfair for the mom and pop hardware store that has to compete with Home Depot, or the family department store that now finds themselves challenged when Wal-Mart comes to town.

But when entrepreneurs find the rules of engagement changed in such a way as to limit what they can offer to the public, laws that dictate when their product can be sold and when it must be shelved and then on top of all that they must compete against a taxpayer funded entity, what happens?

Where does it all stop? What will be the next industry targeted for extinction by the power of the federal government?

Industrialist Henry Ford is quoted as saying, "Any man who thinks he can be happy and prosperous by letting the government take care of him, better take a closer look at the American Indian” 

A lot of truth in that.

Friday, March 20, 2015

Top. Men. An IRS Story...

The folks in charge of your health care now:

"The IRS sometimes uses old software without key security patches that leave its computer systems vulnerable and could endanger taxpayers’ private information ... Part of the problem is that the IRS hasn’t even always followed its own guidelines for assessing risks and creating information security plans"

Here's the best part: as a broker who sells on-Exchange plans, we have to take annual re-certification training, part of which is an extensive section on security and privacy, including computer security issues.

Which apparently don't apply to the folks enforcing the rules.

Nice double-standard there, guys.

Thursday, March 19, 2015

Yeah, about that *Affordable* Care Act

Contra the President's explicit promise to lower health insurance premiums by 3000%, the reality is that average premiums rose 23% from last year, and that's after subsidies.

Yes, those wonderful gimme's designed to (artificially) reduce premiums actually didn't.

Shocking, I know.

One big reason is that the subsidies themselves actually decreased at the same time that, due to medical inflation and other factors, premiums increased. So the net result is that the ObamaTax is less "affordable" than ever. And it's not likely to get any better:

"Next year is likely to bring more premium pain, if the Congressional Budget Office is right. It says insurance costs will climb 8.5% in 2016"

And let's also not forget the other elephant on the table: MOOPs. But hey, we had to pass it to...

Another Potential Alzheimer's Break-through

An alert reader tips us to this potentially outstanding news:

"[A] team of researchers have discovered a new non-invasive ultrasound technology that could be used to treat it and even possibly restore memory."

While we usually think of ultra-sounds at the other end of the life cycle, it appears that the tech could hold promise for folks at the far end suffering from dementia. It does this by attacking "neurotoxic amyloid plaques;" as we've previously blogged, "beta-amyloid, a protein fragment that accumulates in the brain of Alzheimer's sufferers to form the disease's signature plaques." In that post, we noted that some research seems to indicate that prolonged cell-phone use could actually be a way to break those down; this sonogram-type process seems a lot safer.

What's really exciting about this process is that it appears to actually restore memory, not just halt progression of the disease.

Research is still in the embryonic stage (SWIDT?), so only time will tell. Still, some really great news for those for whom this disease has been so horrible.

[Hat Tip: DoIB HS]

Wednesday, March 18, 2015

Blue Shield of CA has its state tax-exempt status revoked...

I guess you can't have $4.2 Billion surplus in the bank, pay your CEO $5 Million/yr. and still call yourself a non-profit.  Bummer.

California's Franchise Tax Board apparently revoked the non-profit last August and ordered the company to file State taxes for 2013 forward.  The news is just now coming out.

More information is in the LA Times article.

And the Hits Keep Comin'

It seems like only weeks ago that Anthem suffered a catastrophic security breach of sensitive, private customer info.

Wait, it was just weeks ago, and now sister (?) company Premera Blue Cross reports that it, too, has been hacked:

"[I]nformation on 11 million people may have been exposed in a cyber attack uncovered six weeks ago."

Wait, what?

Six weeks to report it? According to Evergreen State insurance commish Mike Kreidler, it took Premera officials that long to notify his office. What could possbly justify that kind of lag-time?

Stolen info seems to include the usual: names, social security numbers, bank and private health information. The good news (for certain values of "good")  is that this represents a much smaller database than Anthem's, which topped off at just under 80 million clients affected.

Tuesday, March 17, 2015

The Public Option Lives!

Co-blogger Mike was eerily prescient last summer when he wrote about the Public Option as it relates to Medicare Advantage plans:

"Medicare has not chosen to respond to its Medicare Advantage competition by improving its own product. Instead, Medicare chose to respond to its competition by using its power to kill its competitor, rather than compete with it.  That illustrates pretty well how governments tend to "compete" and we all need to keep this in mind when the "public option" idea again surfaces."


But what does that have to do with the price of tea in China?

Well, as Our Betters in DC© continue to "streamline" ObamaTax alternatives, they've (perhaps unwittingly) turned the spotlight once again to the Public Option, which for so long has been presumed dead.

So, what's the "Public Option," you may ask?


"The "Public Option" is a euphemism for Single Payer, the obvious end-game for the ObamaTax from the get-go.

And how do we know this?

That is, the government sets up its own health insurance racket scheme to "compete" with the private sector. Of course, the private sector is made up of commercial carriers that are enjoined from collaborating in a way that the government is not. The government, of course, has the lawful power of force, which it can use to ensure an unfair and insurmountable market advantage. Thus, the end of the private insurance business.

So, why bring this up now? The Public Option is dead, right?

Maybe so, maybe not:

"The BHP [Basic Health Program] system could appeal to states that would have liked to see Congress offer a government-run, "public option" health insurance throughout the country, in addition to or in place of the PPACA exchange system"

In fact, the power of the government's purse is so strong, there's no "maybe" about it. Seems to me that this alone dwarfs the current Halbig/King/Burwell kerfluffle: by definition, the Public Option is itself simply one big subsidy.


Monday, March 16, 2015

Time Lord, CLU

Dalek coverage optional:

Saturday, March 14, 2015

Yeah, about that "If you like your plan..." Dealio

Residents of the The Centennial State are about to get a rude wake-up call:

"Colorado Sen. Cory Gardner (R) said he’s “utterly appalled” by the Colorado Division of Insurance decision to cancel 190,000 health plans that don’t comply with Obamacare regulations"

Colorado is one of 14 state-based HIX (Exchanges); as an aside, these are the states with legitimate subsidies. The plans at issue had been "Grandmothered" in, meaning that they could continue to be sold as long as the state's insurance department allowed. Colorado's insurance commish justified the cancellation because "by delaying it, it doesn’t give us a good pathway into full implementation of the ACA.”

Which is an eminently reasonable rationale.

The problem, of course, is that it's part of why The Obamastration's explicit promise about keeping your plan was always a lie: under the ObamaTax, all plans would eventually have to come into compliance, an impossibility given how they're structured.

But hey, they had to pass it to...

Friday, March 13, 2015

Insuring Pi

In honor of Pi Day tomoorow, we have this great infographic courtesy of our friend Claire Wilkinson at III:

[Click on pic for details]

Thursday, March 12, 2015

Health Wonk Review springs forward

Brad Wright hosts this week's refreshing collection of health care wonkery from around the 'net.

'Tis a breath of fresh air!

Wednesday, March 11, 2015

'Til Death Us Do Sleep

Euthanasia is not really euthanasia if you are just sleeping.

At least that's the way the French view it.

Seems the frogs are having their own issues with the cost of socialized medicine and looking for some relief.
France's Parliament started debate Tuesday on a bill aimed at allowing doctors to keep terminally ill patients sedated until death comes, amid national debate about whether to legalize euthanasia.
The proposed bill — backed by the Socialist government — stops short of recommending lethal injections and avoids the terms euthanasia or assisted suicide.
Prime minister Manuel Valls praised "a reform that proclaims the right to die peacefully, in dignity and without suffering," in a speech at France's lower house of Parliament. - Yahoo News

Not enough drugs to kill you but enough to put you to sleep.

In a manner of speaking.


And another thing...

In yesterday's Linkfest, I included a link to United Healthcare's informative booklet on Special Open Enrollments. Turns out, though, that it's a lot easier to game the system than UHC or I had thought. The folks at CMS have thoughtfully (and, of course, illegally) opened up another Open Enrollment Period. From the horse's, erm, mouth:

"The Centers for Medicare & Medicaid Services (CMS) announced today a special enrollment period (SEP) for individuals and families who did not have health coverage in 2014 and are subject to the fee or “shared responsibility payment” when they file their 2014 taxes in states which use the Federally-facilitated Marketplaces (FFM)"

That's right, flout the law one year, get rewarded the next. Sweet.

Bonus question: What with Halbig/King/Burwell hinging on "Five Little Words," isn't this tacit acknowledgement by CMS that plaintiffs are correct? After all, if there's really no difference between Federal and state-run Exchanges (as argued by the Obamastration), then why does this new extension make the distinction? Doesn't this unfairly punish folks in states that run their own Exchanges?

Tuesday, March 10, 2015

Tuesday Afternoon Linkfest

■ Item 1: Now that Open Enrollment v2.0 is behind us, I'm still getting calls from folks who want to buy new coverage or change their current plan. For the most part, I have to tell these folks that they're out of luck until the Fall. But some lucky (for a given value of "lucky") individuals will experience a life change that triggers a Special Open Enrollment opportunity. Click here for a run-down of how that works.

■ Item 2: Our friends at FlexBank (resident gurus for all things HSA/FSA/HRA) have some news for folks paying their disability premiums pre-tax: if you do, your benefit is likely going to be taxed if/when you have a claim. I like to advise people thusly: would you rather pay tax on the seed, or the harvest?

In any case, here's their take:
• If premiums are paid entirely with pre-tax dollars (through the Section 125 plan), then the benefits an employee receives upon becoming disabled are taxable; or
• If premiums are paid entirely with after-tax dollars, then the benefits are not taxable. This includes employee post-tax contributions as well as employer paid premiums reported as income on the employee's Form W-2; or
• If premiums are paid with a combination of pre-tax and after-tax dollars, then the benefits are taxable on a pro rata basis, calculated using a three-year look-back period for group disability plans and a one-year look-back period for individual disability policies.
The more you know...

■ Item 3: For the most part, the ObamaTax outlawed so-called "mini-med" plans, but that doesn't mean that their completely dead in the water. Evidence of that comes from an unlikely source: Our Betters in DC

"Regulators want to keep insurers or other parties from using cleverly designed excepted benefits products that would create a new class of limited-benefit medical insurance plans that would be exempt from the PPACA [regs]"

The challenge is that many of the applicable rules also affect more traditional lines like dental. On the other hand, they may have found an interesting new life for mini-meds as "limited wraparound products." I've long believed that this was a great use for these plans: since ACA-compliant policies often come with outsized deductibles and out-of-pocket costs, having a "supplement" (ala MediGap plans) might make sense.

That is, if there's any money left over in the budget after paying the hefty ACA plan premiums.

Affordable Plumbing Act

Only weeks after leaving office on January 20, 2017, former President Barack Obama discovers
a leak under his sink, so he calls Troy the Plumber to come out and fix it. Troy drives to President Obama's new house, which is located in a very exclusive, gated community near Chicago where all the residents have a net income of way more than $250,000 per year.

Troy arrives and takes his tools into the house. He is led to the guest bathroom that contains the leaky pipe under the sink. Troy assesses the problem and tells President Obama that it's an easy repair that will take less than 10 minutes. President Obama asks Troy how much it will cost. Troy checks his rate chart and says, "$9,500."

"What?! $9,500?!" Obama asks, stunned, "But you said it's an easy repair. Michelle will whip me if I pay a plumber that much!"

Troy says, "Yes, but what I do is charge those who make more than $250,000 per year a much higher amount so I can fix the plumbing of poorer people for free. This has always been my philosophy. As a matter of fact, I lobbied the Democrat Congress, who passed this philosophy into law. Now all plumbers must do business this way. It's known as the 'Affordable Plumbing Act of 2014'. I'm surprised you haven't heard of it."

In spite of that, Obama tells Troy there's no way he's paying that much for a small plumbing repair, so Troy leaves. Obama spends the next hour flipping through the phone book calling for another plumber, but he finds that all other plumbing businesses in the area have gone out of business. Not wanting to pay Troy's price, Obama does nothing and the leak goes un-repaired for several more days. A week later the leak is so bad President Obama has had to put a bucket under the sink. Michelle is not happy as she has Oprah and guests arriving the next morning. The bucket fills up quickly and has to be emptied every hour, and there's a risk the room will flood, so Obama calls Troy and pleads with him to return.

Troy goes back to President Obama's house, looks at the leaky pipe, checks his new rate chart and says, "Let's see, this will now cost you $21,000."

President Obama quickly fires back, "What? A few days ago you told me it would cost $9,500!"

Troy explains, "Well, because of the 'Affordable Plumbing Act,' a lot of wealthier people are learning how to maintain and take care of their own plumbing, so there are fewer payers in the plumbing exchanges. As a result, the price I have to charge wealthy people like you keeps rising. Not only that, but for some reason the demand for plumbing work by those who get it for free has skyrocketed! There's a long waiting list of those who need repairs, but the amount we get doesn't cover our costs, especially paperwork and record-keeping. This unfortunately has put a lot of my fellow plumbers out of business, they're not being replaced, and nobody is going into the plumbing business because they know they can't make any money at it. I'm hurting too, all thanks to greedy rich people like you who won't pay their ‘fair share'. On the other hand, why didn't you buy plumbing insurance last December? If you had bought plumbing insurance available under the 'Affordable Plumbing Act,' all this would have been covered by your policy." 

"You mean I wouldn't have to pay anything to have you fix my plumbing problem?" asks Obama.

"Well, not exactly," replies Troy. "You would have had to buy the insurance before the deadline, which has passed now. And, because you're rich, you would have had to pay $34,000 in premiums, which would have given you a 'silver' plan, and then, since this would have been your first repair, you would have to pay up to the $21,000 deductible, and anything over that would have a $7,500 co-pay, and then there's the mandatory maintenance program, which is covered up to 17.5%, so there are some costs involved. Nothing is for free."

"WHAT?!" exclaims Obama. "Why so much for a puny sink leak?!"

With a bland look, Troy replies, "Well, paperwork, mostly, like I said. And the internal cost of the program itself. You don't think a program of this complexity and scope can run itself, do you? Besides, there are millions of folks with lower incomes than you, even many in the 'middle class', who qualify for subsidies that people like you must support. That's why they call it the 'Affordable Plumbing Act'! Only people who don't make much money can afford it. If you want affordable plumbing, you'll have to give away most of what you have accumulated and cut your and Michelle's income by about 90%. Then you can qualify to get your 'Fair Share' instead of giving it."

"But who would pass a crazy act like the 'Affordable Plumbing Act'?!" exclaimes the exasperated Obama.

After a sigh, Troy replies, "Congress... . they didn't read it." 

Learn more at The American Philosopher

Monday, March 09, 2015

We get it. Now stop doing that.

In the course of working in Medical Administration for over 15 years, I am always amazed at what people will do to circumvent the policies of seeing a doctor. One of the basic policies is to present an  insurance card to confirm identity (the presentation of a valid photo ID, at time of service). So I was a bit perplexed when not once, but twice in the past few months, I had patients who presented a photocopy of their Medicare Card with their billing number (which is their social security number) blacked out. Each time I gave the “card” back to the patient and said I could not accept a photo copy, I needed the original card with all the information visible. You see, the only way I can get my doctor paid is to bill Medicare for your service and I need that number to bill. Then I ran across this article and it became clear:

Why you shouldn't give your doctor your Social Security number”.

According to the article, doctors do not need your social security number to bill. That is correct; however, we do need your social security number if you choose not to pay your bill and we have to turn you over to collections. You see, when you go to a doctor, we are becoming a creditor, and we are accepting your word that you will pay us whatever your insurance company says you will pay after we've billed them. Surprisingly, many of you decide, after the fact and for a variety of reasons, not to pay us:
1) I shouldn't have to pay that much.
2) My insurance company said you billed wrong and you need to recode.
3) I thought it was free (preventive/well visits).
4) I do not believe in paying for medical care.
5) And many more that I have heard over the years.
So, if you do not want to give your doctor your social security number, then pay for your appointment in full, at the doctor’s fee schedule, and then wait for any refund after the doctor bills and receives notification from your insurance company.

The article makes suggestions about how to get out of giving your social security number, but alas, your social security number is your Medicare number, so this is suggested:

CR’s advice: If you're on Medicare, you still have to share your Social Security number with your health care providers (in the form of your Medicare card), so they can get paid by Medicare. But you can get some protection by making a copy of your original card and, after the first visit, blacking out all but the last four digits of your Social Security number. That way you won’t have to carry around your original card, with your complete Social Security number, at all times.”

Okay so why is this so wrong? Simple: because of identity theft and the ability to change insurances during the open enrollment each year (and sometimes more often), the physician has to confirm each time you visit that you do, in fact, have insurance, and that insurance is, in fact, yours. This is done by confirming your Insurance Number and Name with outside entities that assure your doctor that, yes, the insurance is active and you are you. Thus, you can never bring in a photocopy, as each visit is its own self contained event which must be verified. So with all due respect to Consumer Reports: this advice is wrong, so please stop doing it.

Friday, March 06, 2015

Everything Old...

About a year ago, we wrote about a Tar Heel State municipality considering dumping its group coverage altogether. While we've long predicted that employers in general might find this attractive, the folks who run Montgomery County (NC) proposed an alternative based on an old life insurance standby, the "Executive Bonus" (EB) arrangement.

Briefly, an EB arrangement is used when an employer offers to buy life insurance for a valued employee, who could then name his beneficiary (usually his spouse). To keep the arrangement simple, the employer simply "bonused" the premium to the employee. Since the bonus was taxable, employers often included the estimated amount of the taxes in the bonus.

Fast forward a year, and "Christopher Condeluci ... says employers can offer a non-conditional cash bonus that employees use to purchase health care coverage."

[ed: Mr C is apparently a benefits attorney]

Sound familiar?

His idea is that employers could simply identify how much they want to pay towards their employee's health insurance (perhaps based on the soon-to-be-deleted group plan?) and then simply bonus the employees that amount. Because the ObamaTax outlaws using tax-advantaged Health Reimbursement Arrangements (HRAs) to accomplish this, the employee must receive the cash with no strings attached. So he can use those funds for his insurance, or a new car, or a cruise.

Where it gets interesting, though, is the means by which Mr C proposes to ensure that the proceeds do, in fact, go for insurance: "use a payroll vendor to allocate the money to be paid to a carrier for monthly premiums." That is, arrange it so that, even though the money technically goes to the employee, it's actually routed to the payroll vendor and then on to the individual's health insurer of choice.

I had some questions about the legality (not to mention efficacy) of this arrangement, and reached out to Louise Norris, proprietress of the Colorado Health Insurance Insider blog and a valued colleague. I wondered whether she also had reservations about this, since it's certainly pushing the envelope.

Here's her take:

"Personally, if I were an employer, I'd stay away from stuff like that, because I wouldn't want to have even a hint of anything that might be seen as skirting the law."

Succinct, and exactly on point. I also wonder how much the payroll vendor will charge to set up multiple accounts with various carriers to process these transactions. And I further question how insurers will react to payments for individual plans from payroll companies.

I just don't see value here.

Wednesday, March 04, 2015

Two strikes?

As the Halbig/King/Burwell circus plays on in the background, it might be instructive to see how the ObamaTax is working out so far in real life:

Case 1: FoIB Jeff M tips us to this article from Brant Clifton [ed: what a great name!], who relates the story of friends of his that endured the bureaucratic nightmare of learning that they're not as American as they thought they were:

"This couple had — apparently — not sufficiently proved to Blue Cross Blue Shield that they are legal US citizens.  (Now, for the record, these two are the whitest white  people with the whitest white people names ... They both have social security numbers and birth certificates showing that they were born in US states.)"

And they're still not covered.

Case 2: And a bit of schadenfreude. California citizen Melissa Klein was a good little Democrat, faithfully supporting the President and his signature legislation. But that was then, and this is now:

"Dear @CoveredCA - you've turned a staunch supporter of #Obamacare into an opponent. Id rather die broke than have to go thru your exchange."

Something about fury and a woman scorned?


"[I] support obamacare, but not incompetence. i cant file my taxes because of a form that was never generated and may never be"

Um, cognitive dissonance much?

But wait, it gets better:

"[T]here is an app for purchasing weed & yet our health care system can't generate a form for the IRS"

So she's saying that the ObamaTax has gone to pot?

Read the whole thing - consider it an antidote for the Clifton story above.

Tuesday, March 03, 2015

You're doing it wrong...

So, some years back, one of our clients - we'll call him Bruce - bought a life insurance policy on his son, Bruce Jr. He named himself as the sole beneficiary, and declined to name a contingent.

(A contingent beneficiary is one who would receive the proceeds if the primary pre-deceased the insured)

About 4 years ago, Bruce Sr died, and his estate settled by his widow, Susie, who then passed away. Very sad, but that's how life goes.

Now Bruce Jr has passed away.

Quick: who gets the insurance money?

I must admit to a bit of surprise here: according to the carrier, the son's estate would get the proceeds. This makes no sense to me: he was merely the insured, with no ownership or beneficiary rights.

Here's another way of looking at this: suppose I bought an insurance policy on my mechanic (assume I could show insurable interest), naming myself as the sole beneficiary. He makes no premium payments, has no rights rights in the policy. I pass away. Why would his widow (or children) have any claim on the proceeds?


The primary lesson here is that periodically reviewing your insurance policies - particularly the beneficiaries thereof - is a good idea.

Another day, Another CoOp Snafu

Last week, Bob posted his take on the rather tumultuous CoOp situation. As fate would have it, I was working on a post about the same thing, but with a slightly different "angle." Now, I frequently claim that "I was told there'd be no math" here, but for once I'm going to be the culprit.

Thanks to a heads' up from FoIB Josh Archambault, we have this little gem:

"The Minuteman Health Inc. Co-op in Massachusetts got more than $156 million and covered only 1,822 people – over $86,000 per enrollee."

But wait, that's not all!

"HealthyCT Inc. Co-op in Connecticut got more than $128 million and covered only 6,094 people – more than $21,000 per enrollee."

If that doesn't give you the warm fuzzies, I have no idea what will.

Cancel that, sure I do: there are another handful of CoOp "success" stories at that link (for a given value of "success"), with a combined cost of $800 million in 2014, insuring a total of just over 22,000 people. For those keeping score at home, that's an average cost of $35,000 per enrollee.

To really drive home the point of just how wasteful this whole exercise has become, that's about $3,000 per month per enrollee.

Seems spendy.

So, I meandered over to the 404Care.gov site to find out how much a Platinum plan would cost a 64 year old Prairie Stater (the MA connector link appeared to be broken when I tried it). You'll likely not be surprised that the most expensive plan I could find was just over $1,500 a month, roughly half the cost of the average CoOp.

Your tax dollars (not) at work.

[Thanks to Co-Blogger Pat P for his help]

Monday, March 02, 2015

Five Little Words: An Epiphany

"Exchange established by the State under 1311"

I've always believed the adage that "words mean things;" that is, words have meaning and one should be careful in how they're used. Sometimes, silence is golden: not speaking can communicate better than words.

In the original series opening of Star Trek, William Shatner speaks of the ship's "5 year mission." That always struck me as self-limiting: what if it had been picked up for a 6th season? Would Captain Kirk have become Captain Steubing?

Likewise, in The Next Generation, Patrick Stewart calls it an "on-going mission," an unnecessary redundancy. How much more sense it would have made to just say - in both shows - "its mission,"  no qualifier needed.

And so it is with the subsidies. The whole of Section 1311 refers to "each State" and "a State" over and over; if Congress had truly wanted subsidies available for everyone whose income justified it, why not just say so? It would have been simple enough: "... enrolled in through an Exchange established  under the Patient Protection and Affordable Care Act."

Easy peasy.

That they chose to specify Exchanges established by a "State"  means something. Words matter.