Friday, August 18, 2017

About that Obamacare Poster Child

After two years of the media and government gushing over their success, Obamacare darling Molina is having a rough 2017. How rough? Well...

  • In February Molina announced losses from the 4th quarter of 2016 to be $110 million. They also report a profit of $52 million. This is a huge fall from their 2015 record profits of $143 million coupled with 2014 profits of $62 million.
  • On May 2nd they fired CEO J. Mario Molina and CFO John Molina. The move came as a surprise and the board claimed it was due to poor financial performance.
  • The following day they announced 1st quarter 2017 earnings that actually beat Wall Street expectations. Coupling this with the ouster of Brothers Molina and speculation began of a possible sale of the company.
  • On May 4th Mario Molina went on record suggesting that the board ousted him due to his political views. Mario Molina has been a vocal critic of President Trump and a significant supporter of the Democratic party contributing well over $70,000 to various campaigns and PAC's in 2016 alone. Shoot, he gave the Hillary Victory Fund $33,400! Talk about lighting money on fire. But, I digress.
  • On May 15th the board voted to retain Brothers Molina on their board of directors. This is an interesting twist based on their abrupt departure.
  • The latest, on August 2nd, Molina announces a 2nd quarter of 2017 loss of $230 million. They also announced that they will be leaving individual markets in two states - Wisconsin and Utah. Piling on, they stated that 2018 rates will increase on average of 30% (I'm assuimg CSR's will be funded).
The question is, why is this 180 degree turn happening?

Back in 2013 Molina insured nearly 2 million Medicaid patients in 9 states. Managing Medicaid was their core business but they saw a need within the individual market. The need was to serve the low income population that Molina felt big insurers weren't interested in. They went on a hiring frenzy to help with their enrollment efforts as they entered the new individual Obamacare market. Molina's individual market offerings included very narrow networks, limited geographic availability, low premiums, and razor thin profit margins.

Membership has grown in all of their business. Medicaid, their core business, jumped approximately 1.7 million new members from 2014 to the end of 2016. Almost half (673,000) came from Medicaid Expansion. For their new endeavor into the individual insurance market, at the end of 2014 they had 15,000 individual customers. By the end of 2015 that number had exploded to 205,000 then catapulting to 526,000 at the end of 2016.

Profitability for Molina in the early Obamacare years is likely attributed to Medicaid growth with their individual Marketplace participation being limited. This is where the tide has changed. Over the last two years Molina's growth in Medicaid has slowed while growth in their individual market has risen exponentially. This is the inverse of what is happening to overall markets. Medicaid has continued to accelerate and the individual market has flatlined.

With competition exiting the markets due to losses and uncertainty, this leaves Molina to take on the risk. It's well known that the higher risk population gravitated towards health plans that had broader networks. Molina thrived because of their limited networks where by not having major high cost specialty facilities in their network led to a healthier risk pool.

Molina's "competitive" advantage was tied to avoiding high dollar risks (adverse selection) and that advantage is now gone.

From the P&C Files: I have issues

As regular readers know, I tend to be a purist when it comes to insurance. So I've railed on medical necessity as regards health insurance; the whole point is risk management.

And specifically the concept of Frequency vs Severity.

For example, it's unlikely that any one person will contract cancer (frequency), but those who do face some pretty steep bills (severity).

Or, closer to home, what are the odds that a 9 month old puppy will need expensive (and multiple) knee surgery? Again, not often, but a true pain-in-the-checkbook.

One more thing: insurance is (or ought to be) more about covering the unexpected, which is why your auto policy doesn't pay for oil changes or new wiper blades.

On the other hand, birth control convenience items are generally bought fairly often, but at a very nominal cost, so: frequency, but not severity, so not really appropriate to insure.

But insurance has a cousin: warranties. Typically, one purchases these to cover things like dishwashers and refrigerators and the like. But again, these aren't insurance (notice they never use the words "risk" or "premium"). Nothing wrong with that, and I'm not aware of any company offering these plans that claim to be.

Wish I could say the same for the insurance industry.

Our longtime guru of all things P&C, Bill M, asked me the other day if I'd heard about the newest trend in his side of the biz: equipment breakdown and service line coverage.

The equipment breakdown rider "covers the perils of mechanical, electrical and pressure systems breakdown," such as A/C units, TV's, even kitchen appliances. And service line coverage is for coverage "provides protection against a leak, break, tear, rupture, collapse or arcing of a covered service line," such as water and sewer lines, even from ordinary wear and tear.

How in the wide world of sports are any of these insurable risks? Well, obviously, now they all are, which offends my sensibility as an insurance purist.

But now I want to add both of those to my own policy.

Go figure.

Interested for yourself? As always, ask your agent (or seek out a local, independent one).

Thursday, August 17, 2017

Health Wonk Review is up

Peggy Salvatore hosts the jam-packed Lulls of Summer edition. From the philosophical to the urgent, you'll be glad you stopped by.

Batting Averages, The Weather, Businesses & Obamacare Co-ops

In baseball being successful 3 out of 10 times at the plate will likely get you into the Hall of Fame.

A meteorologist forecast projecting out 10 days is right about 40% of the time

The Farmers Almanac claims a success rate of 80%.

Start up businesses - according to the SBA - make it beyond the first year 50% of the time

According to a Harvard study, new businesses using venture capital succeed 25% of the time.

So what about those non-profit, government funded, competition enhancing, Obamacare Co-ops? You know, the newly formed "insurance companies" that would create more competition and force the big bad insurance industry to play fair and quit price gouging with high premiums to pay fat cat CEO's and shareholders fists full of money.

Well, they are batting a whopping .174 - below the Mendoza Line. Of the 23 co-ops that actually got off the ground (there were 24 but we won't count the Vermont debacle) as of 2018 only 4 will remain. One of them, Montana, took measures last year to halt enrollment amid concerns they wouldn't be able to meet their financial obligations.

What's worse than the 17% success rate? That would be the "venture capital" we (taxpayers) gave Co-ops for start up funds. Of the $2.4 billion low/no interest loans given, the four remaining Co-ops received $402 million - a loss of close to $2 billion.

Yet government wonders why we don't trust them to be good stewards of our hard earned money.

Wednesday, August 16, 2017

Mid-Week Linkpourri

From FoIB Holly R we learn about a "start-up called Aledade [that] has figured out a way of reducing healthcare costs while improving care." Founded by the "national coordinator for health information technology at the [HHS] in the Obama administration," the firm is focused on reducing the cost of healthcare (and, hopefully, health insurance).


A pair of items courtesy of FoIB Rich W. First up, individual plan enrollment continues to crater:

Next, Rich wonders who remembers Obama's promise that the ACA would entail no tax increases. Turns out, get this, that was a lie. He provides a link to "newly imposed Obamacare tax per person by state."


Tuesday, August 15, 2017

Death be not proud (But....)

I'm beginning to sense a theme from the medical front these days. If it's not ObamaCare's death toll, it's a culture that seems not just "okay" with assisted suicide but apparently insists on it.

Wow, Henry, that's quite a claim there, care to back it up?

Sure. (Literally) Ripped from the headlines:

"California Hospital Sued for Refusing to Assist Suicide"

The patient eventually died of cancer, and now her children are suing the medical facility which treated her because it "conceal[ed] its oncologists’ decision not to provide life-ending drugs to patients who ask for them."


I'm assuming they also deny diet pills to anorexics who request them, as well.

Meantime, FoIB Holly R alerts us that the Much Vaunted National Health System© apparently has no such problem reducing its patient load:

"One-Third Of Life Support Patients Die Under British Health Care System."


Turns out that "free" health "care" is absolutely worth every penny, er, farthing. So, if you're on a vent or other life support system provided by the MVNHS©, best make sure your affairs are all in order.

The sooner the better, natch.

But wait, there's more good news (well, for certain values of "good"):

"CBS Reports Iceland Has 'Virtually Eliminated' Down Syndrome with Abortion"

Well first, as Patricia Heaton points out, killing unborn Downs babies isn't eliminating "Downs," it's eliminating babies:

Notice that the trend, here and abroad, is to ration care by rationing life.

Pretty rational, I guess.

Scary, too, no?

[Hat Tip for CA hospital story: The Political Hat]

Monday, August 14, 2017

Better than a crystal ball

From 5 years ago, predicting the impact of ObamaCare. Eerily prescient:

[Hat Tip: Co-blogger Bob V]

Friday, August 11, 2017

A *Really* Big Case (of fraud)

We seem to be on something of a life insurance fraud roll here. Almost exactly a month ago we reported on the case of a rocket surgeon greedy wife's efforts to collect on her husband's life insurance policy after arranging his premature demise (spoiler alert: she failed).

The case now at hand is particularly intriguing; at first, I was somewhat dumbfounded as to how the insurer could have been so easily duped, but as the story unfolded, it got even weirder. And that this all took place about a half hour away from me added a sense of the macabre.

A brief underwriting refresher: when applying for life insurance (especially anything over $100,000) one is required to undergo (at least) some sort of physical exam. Depending on the amount at risk, this can range from simple blood and urine tests to EKG's and stress tests. In this case, West Coast Life was set to be on the hook for just shy of $3 million, so of course the medical underwriting would be vigorous.There's another angle (financial) but we'll elide over this for purposes of this post.

Here's where it begins to get weird: the application was apparently written in Ohio, but the applicant chose to have the exam done in Texas. I'm thinking that right there's a red flag, but apparently WCL wasn't bothered by it (or perhaps, they became retrospectively concerned). In the event, a person claiming to be the applicant shows up, all 176 pounds of her.

Which would not necessarily be weird in and of itself, but the person who actually died clocked in at almost 400 pounds [ed: Hey. it could happen! Spend a few days at the Golden Corral and Bob's your uncle]. Kind of a clue. The fact that the applicant indicated no substantial health history, and yet was dead within a few short years of (presumably) natural causes was likely another.

And so now the family of the insured is being charged with life insurance fraud; one presumes a lawsuit on behalf of West Coast Life will follow directly.

[Hat Tip: FoIB Holly R]

Thursday, August 10, 2017

Something Different

So here's a question: you're in your 50's or 60's, retired (or about to be), and looking around wondering "what's next?"

For some folks it's travel, for others it's gardening or bucket lists.

For some, though, it's time for a second (or third, or whatever) career. But how to find "just the right one?"

Well, there's a cool new answer:

Check it out.

[Hat Tip: FoIB Mark G]

Wednesday, August 09, 2017

From the P&C Files: Hopefully not a client

Doing it wrong, defined:

Baby Charlie Redux

As we noted regarding the tragic case of little Charlie Gard, government-run health "care" really isn't about the care at all: it's actually all about control:

"Charlie's parents weren't asking for special care, or special funding, or that the Much Vaunted National Health System© (because ultimately, they own this) do anything more than get out of the way"

Now, another young Briton's health is in danger, this time a teenaged dancer participating in Britain's Got Talent, with a severe spinal condition:

"15-year-old Julia Carlile, who appeared on Cowell’s show "Britain’s Got Talent" along with her interpretive dance group ... she was going to need corrective surgery shortly after the performances on the show."

Problem is, the only treatment allowed by the Much Vaunted National Health System© would require steel rods that would effectively end her just-now-burgeoning dance career.

Enter Simon Cowell (really!), who has graciously donated almost a quarter of a million dollars to pay for her surgery - in the US.

That's right:

"Carlile opted for a medical procedure only offered in the United States called vertebral body tethering"

This procedure eschews rods for screws, promising her greater range of motion and a real shot at resuming her dancing. It's not even *offered* by the Much Vaunted National Health System© (or that other beacon of healthcare brilliance, Cuba).

Good thing she wasn't in hospital (as they say Across the Pond), else the rocket surgeons running the MVNHS© may well have locked her down, too.

Tuesday, August 08, 2017

Oblivious Carrier Tricks

This isn't really a big deal, but I sometimes wonder about Home Office Critters and whether they actually read what they write.

Case in point:

I'm currently working on a Retirement Income Disability plan quote for a physician (like this). So as I'm reading through one proposal (to be fair, not from the carrier in that link), I notice among the included benefits:

[click to embiggen]

Um, no you don't.


Evolution of Medical Tourism

It's been a while since we looked at medical tourism in-depth, although we did mention it yesterday when we noted that upwards of 60,000 Candians sought care outside that country's failing government-run health scheme.

And, perhaps more to the point, we reported in January that the "cost of international private medical insurance is climbing globally, with an inflation rate of 9.2 percent reported for 2016."

And, of course, the ACA has been steadily chipping away at physicians' incomes here at home.

Okay, Henry, very interesting, if disparate, items. What's your point?

Well, FoIB Dr Valerie Jones alerted us to this rapidly growing opportunity that uses virtual medical tourism to help boost actual physician income:

"This Startup Connects U.S. Doctors with Patients in China ... that deal in the domain of telemedicine, sometimes called telehealth, which uses technology to remotely connect doctors and patients otherwise separated by physical distance."

After all, what difference does it make if the patient is 10 miles away, or 6000? Other than the slight inconvenience of time-zone shifting, why not? And it's certainly a potential money-making powerhouse:

"Estimates on telemedicine’s market size vary  ... projects it will more than double from $25.53 billion in 2015 to $57.92 billion in 2020."

That's a lot of revenue for a few minutes on the phone (or Skype, etc).

Telehealth itself isn't all that new, but this application of it seems to be burgeoning. Definitely something to keep an eye on.

Monday, August 07, 2017

Breaking News from Our Neighbors to the North

CanuckCare© continues to auger in:

"“Free” Canadian healthcare is not free, according to a report released Tuesday ... a “typical Canadian family of four will pay $12,057 for health care in 2017—an increase of nearly 70 percent over the last 20 years.”

So how's that Single Payer system working out?

Still, that $12 large may be a bargain since it buys great care, right?

Turns out, not so much:

"[T]here is still a long waiting list for a host of operations, both routine and urgent."

And over 60,000 Canadians sought actual care outside the country last year.

But "free" (or, you know, not).

[Hat Tip: FoIB Holly R]

Thursday, August 03, 2017

P&C Files Update

Last Fall, we blogged on Kanye West's health issues, specifically as they applied to the cancellation of much of his concert tour schedule. In that post, we noted that Mr West had apparently purchased an insurance policy to cover that eventuality:

"[H]e's since cancelled the balance of his tour, at a cost of at least $30 million. That's a lot of scratch even for a successful musician, which is why he (reportedly) has an insurance policy that likely covers this kind of situation."

As it turns out, he did, in fact, make that purchase. And the story might have ended there, but for one small problem:

"Kanye West has filed a lawsuit claiming insurers failed to pay nearly $10 million for the singer's canceled Saint Pablo Tour last year."

As an aside, I'm curious about the rather substantial discrepancy between the $30 million loss cited in the original post, and the $10 million in dispute.

Nevertheless, this is an interesting case: it seems to turn on the definition of "accidental bodily injury or illness," which being hospitalized seems to pretty much qualify.

One wonders whether this will be settled out of court, or taken to trial. We'll keep you posted.

[Hat Tip: FoIB Jeff M]

Wednesday, August 02, 2017

The Creation of Obamacare's Individual Market Mess

It has been four years since insurers submitted their initial rates to buy market share in Obamacare's individual market. Back then insurers were using assumptions that the segment would grow through government forcing people to purchase their product, existing policyholders coming over from "crappy" insurance plans, the promise of enforcing the rules, huge transfers of funds from competitors, and large sums from taxpayer funded subsidies.

Nevermind the ginormous turd of a website, the bigger problems occurred when those in power issued major changes - literally weeks into the first open enrollment. Some problems have continued because of a lack of enforcement. Others have come from bipartisan Congressional changes that were signed by President Obama.

The first was a reprieve for those already insured who found out that "if they liked their plan" they couldn't keep it. These transitional plans (Grandmothered) kept a large number of healthy folks out of the Obamacare markets when HHS issued a rule allowing people to retain their medically underwritten insurance.

The second problem was the expansion of - but no policing of - "hardship waivers". There are a plethora of waivers people can take advantage of. Some are legit. Others, not-so-much. The most egregious (IMO) is the exemption for Christian Health Care Sharing Ministries (HCSM). HCSM's aren't insurance products. They don't have mandated benefits nor do these Ministries pay in to the Obamacare taxes and fees. Don't get me wrong, if it's the right fit for a person they should look at it as an alternative. My objection is the double standard that Obamacare considers this "good" but a mini-med/limited benefit plan is considered crap.

Lack of enforcement continues to be a significant contributor. The primary culprit on the enforcement front stems from Special Enrollment Periods (SEP). While these have been tightened under the Trump Administration, the first three years under Obama was a free-for-all. In discussions with insurance company underwriters and executives, all had a similar response to how HHS policed SEP's. The short answer was, they didn't. As one insurer put it:

"They (Obama's HHS) rubber stamped everything. Politically they had to. Think of it this way. If someone was without insurance in January then was diagnosed with cancer in March they would have to wait until January of the following year to obtain coverage. These type of situations happen more often than you know. Imagine the backlash if people were diagnosed with major health conditions then were denied insurance due to Obamacare's own rules? The simple way to make it work was to allow people in, then place blame on insurers when rates went up."

A final problem is revenues. "Not one dime to the deficit" was BS. When you have an initial CBO score that uses 10 years of revenues but only 6 years of expenses and it barely is at breakeven we know it won't be true. Making matters worse, the expenses continue to exceeded expectations. The bending of the cost curve is going in the wrong direction. Instead of shoring up the costly overruns Congress does the opposite - cuts revenues. Look at this list of changes to Obamacare that are causing the fiscal crisis to rise:

Every one of these revenue cuts had bipartisan support.

There are lots of nails in the coffin of the individual health insurance market. Many come from the sledgehammers that Obama's administration pounded. Some have come from a Republican controlled Congress.

Both sides continue to point fingers. Which brings me to something I was told as a young child. When you point a finger at someone remember that three fingers are pointing at you.

Tuesday, August 01, 2017

CongressCare: A Reminder [UPDATED]

One of the issues that's just now coming into view is just how sneaky ObamaCare-enablers have been in exempting themselves from its disastrous effects.

And which enablers are those, you may be wondering?

That would be Congress, which has been (illegally) benefiting from the law's small group exemption. Last I looked, there were 535 members CongressCritter (plus various support staff). And yet, we have this (courtesy of Phil Kerpen):

[click to embiggen]


UPDATE: Meanwhile, the Golden State's fine citizens have this to look forward to:

"Anthem Blue Cross is pulling out of 16 of 19 regions in California's individual market next year."

And that apparently apples to both on- and off-Exchange plans.

Ah, the Good Ol' Days...

Monday, July 31, 2017

Restoration Project

Last month, we reported on the increasing number of counties across the fruited plain that will have no carriers from which to buy insurance.

Now comes news, via FoIB Ʀєfùsєηíκ, that folks here in the Buckeye State may be getting a slight reprieve:

"Ohio Department of Insurance Director Jillian Froment today joined five major Ohio health care insurers to announce that health insurance options have been restored on the federal exchange in 19 Ohio counties following the withdrawal of other insurers earlier this year."

The carriers include Buckeye Health Plan, CareSource, Medical Mutual of Ohio, Molina Health Care of Ohio and Paramount Health Care, which is great news for folks in those counties, for certain values of "great." As co-blogger Patrick reminds us:

"Molina's nearest physician in Findlay, OH (Hancock County) is 22 miles away. Closest hospital 23 miles away. Great 'option'."

And a reminder, as well, that these plans are available only on the Exchange, which is nice if one is eligible for a subsidy, not so much if not.

So, one step forward....

A friendly reminder

For those folks still on the fence about whether or not ObamaCare has always been about getting to government-run health "care", well:

Friday, July 28, 2017

Rest in Peace, Little One

Dayan HaEmet; may his memory be for a blessing

Note: This was not, as characterized by Reuters, a "dispute over hospital treatment," but a vivid, graphic demonstration of the power of the State when unaccountable bureaucrats are in charge of health care.

Quitting vs Losing

Courtesy of FoIB Scott M:

[click to embiggen]

"Opting out" ≠ "Losing"

Thursday, July 27, 2017

Much Vaunted National Health System© puts the hammer down

Well, it was only a matter of time. After all, we noted exactly 3 months ago that:

"NHS bosses are planning a massive expansion of the controversial rationing that forces smokers and obese patients to wait months in pain before they can have surgery"

That's how government-run health "care" works, after all: limited resources controlled by unaccountable bureaucrats. And if the threat of such rationing isn't enough, well:

"NHS units impose surgery ban on obese and smokers ... including an end to the routine funding of hip and knee operations for patients with osteoarthritis"

Sorry (not sorry), grandma!

It gets squirrely from there, though:

"In one area of England obese patients must wait two years for hip and knee replacements while another area plans to deny surgery for smokers, including heart and brain operations."

Might pay to move, no?

But again, this is what happens when you put the DMV (or IRS) in charge of health care.

Worth noting, again, that this is the explicit end-goal of ObamaCare.

Sleep tight.

[Hat Tip: @Ʀєfùsєηíκ‏]

The Clinic and The Insurer

Not sure how this stayed under my radar, but thanks to FoIB Bill M we learn that the estimable Cleveland Clinic is about to jump into the individual medical insurance pool. And they're partnering with New York-based Oscar Health to do it:

"The venture, called Cleveland Clinic | Oscar Health ... will be available on the public exchange, off the exchange or directly through Oscar."

The catch?

They'll only be available in 5 counties in northwest Ohio.

Which, perhaps not so coincidentally, is also the home base of Medical Mutual.

Interesting. Particularly because of this:

"The Cleveland Clinic network now only is available on the exchange through a broad network offering provided by Medical Mutual of Ohio"


To be sure, Oscar's had its own issues:

"[F]or every dollar of premium Oscar collects in New York, the company is losing 15 cents. It lost $92 million in the state last year and another $39 million in the first three months of 2016"

As their CEO noted at the time, this is not "a sustainable position.”

Anyway, the product itself will apparently rely pretty heavily on the telehealth model, which seems like one area that carriers are starting to really embrace as an effective cost-containment strategy.

No word yet on whether or not they'll have any kind of marketing agreement with insurance agents (but smart money is on "no").

Wednesday, July 26, 2017

Another 1,000 Words on #Repeal/Replace


[Hat Tip: FoIB Scott]

Dammit’ Jim, I’m a Doctor, not a Coder

In my many years in Healthcare I know that Doctors are looked upon with awe and admiration, sometimes irritation, but never has anyone mistaken a Doctor for a Coder, until now.

In a report released earlier this year, the GAO found that just 15% of hospital patients accessed their medical records, even though 88% of hospitals offer access. A third accessed medical information from physician practices.

Carolyn Yocom, a director in the GAO’s healthcare team, said in an audio interview in the post that poor interoperability is another roadblock to access, which is especially frustrating when they're trying to prepare for an appointment or, worse, in an emergency.

Providers should make it easy for patients to access everything they need in one place to avoid a frustrating experience, Yocom said.”

I can tell you from front line experience, the majority of patients do not like the portal and there are many reasons. The reasons that I have heard include:

1)      I don’t use the internet
2)      Your portal uses cookies, I don’t do cookies
3)      There are too many portals. I can’t remember all the passwords.
4)      I don’t have a computer, only my phone (Portals do not work on phones).
5)      I want to talk to my doctor.
6)      I want to talk to a nurse about my lab work.
7)      It is too complicated and takes too much time.
8)      The government can track me; I don’t want my information on the internet.

So Carolyn Yocom says that “Providers should make it easier for patients…” WAIT, WHAT?

Does Ms. Yocom know that Doctors did not write the code for the EMR’s that support the Patient Portals? Doctors were only told by the government to buy these expensive EMR’s and provide the service to their patients. If the Doctors did/do not do this, then they can face reductions in their insurance reimbursements in the future. So as good Doctors we bought the EMR’s and we have established portals for our patients to use.

However, as this article points out, nobody bothered checking with patients if they would like to have a portal. It seems patients are not thrilled with this government mandate, as we experience daily with very loud and angry complaints.

On behalf of all Doctors and Medical Offices in America Ms. Yocom, I will not let you lay the blame for this disaster on our doorstep. It was the government that mandated the creation of Portals and it was the Coders who developed the Portals.

So, to Ms. Yocom I respond, “The Government and Coders should make it easy for patients to access everything they need in one place to avoid a frustrating experience; the Doctors have done all they can.

Tuesday, July 25, 2017

Tuesday Afternoon Linkfest

FoIB Avik Roy makes a point about the Emperor's New Clothes CBO scoring fiasco:

"73% Of Coverage Difference Between Obamacare & GOP Bills Driven By Individual Mandate"

Okay, but what does that mean? It's actually pretty simple: not forcing folks to buy something doesn't mean they won't, anyway. And it certainly doesn't "strip" anyone of coverage, either (another popular meme).


A few years ago, we blogged on the sad case of insurance agent Glenn Neasham, who ran afoul - quite by accident, it seems - of California insurance regulators and was sentenced to jail for selling an elderly woman an (as in one) annuity.

It appears that Mr Neasham was merely a piker:

"Prosecutors in California have accused Shawn Heffernan, a retirement planner and insurance agent, of persuading five older clients to surrender annuities and replace the contracts with new annuities"

To the tune of nearly half a million dollars, of which just shy of $300,000 (allegedly) went into Mr Heffernan's pockets.


Finally, our good friend Bob Graboyes dares to tell the ugly truth about all those nifty preventive care initiatives:

"[P]reventive measures generally increase rather than decrease costs."


Which is not to say that we should stop encouraging their use, just that we need to back off on the cost-savings-panacea talk:  "we shouldn’t spend time dreaming up ways to spend the savings that will result" (because we're going to be very disappointed).

Reminds me of something...

The Willard Scott Conundrum

For many years, Willard Scott would announce each morning those lucky folks who'd hit the 100 year marker in life. They likely didn't know, however, the impact that reaching such a milestone would have on any "permanent" life insurance they owned.

Wait just a minute there, Henry: what's with the "scare quotes?"

Glad you asked.

Recently, co-blogger Bob V tipped me to this article by insurance industry heavyweight Joseph Belth:

"For decades, life insurance carriers ... sold permanent universal life insurance policies, marketed as "insurance for life," utilizing outdated mortality tables that did not take into account the fact that Americans were, and are, increasingly living to and past the age of 100."

In his book "My Life in Court," the late, great litigator Louis Nizer wrote of a case where a young man was killed when the train he rode on his daily commute crashed and he was killed. The court originally based his lost and future wages on an older mortality table which generated a relatively modest settlement; Mr Nizer was able to show that this was a grave injustice due to more recent tables, and won a more substantial settlement for the young widow.

Now, what does a 1950's-era train wreck have to do with a centenarian's life insurance policy?

Well, it turns out that the life insurance industry seems to have been playing fast and loose with that word "permanent." The case at hand concerns a Universal Life policy, but this issue would appear to affect Whole and Variable Life plans, as well.

The problem is that when plans "mature" (end) at age 100, they aren't permanent:

"The life insurance industry has left its customers (who faithfully paid their premiums with the expectation that they would have coverage for the remainder of their lives) uninsured."

And it gets better:

"These terminations have exposed customers to adverse tax consequences that are in direct contradiction to the guarantees made when these policies were purchased."

One of the great benefits of cash value life insurance (another industry term of art, perhaps much more useful in this discussion) is that the equity in the policy grows with no taxes due if the policy is paid out as death benefit (those that do  cash in their policies early may have a tax liability if the amount they receive is greater than the premiums paid in). But what if you've paid your premiums in the expectation that the plan would pay out whenever it was that you shuffled off this mortal coil, only to learn that, upon reaching that wonderful milestone you'd be uninsured and, adding insult to injury, owe a potentially astronomical tax bill?

Now, some (many?) carriers have addressed this by issuing policies that go to age 120 (or 121). But that's only good for folks who've bought plans from these carriers in recent years. The vast majority of folks, I daresay, don't fall into this category.

And frankly, I'm a bit nonplussed that this issue has been so long under the radar. Why's that you ask?


"The United States currently has the greatest number of known centenarians of any nation with 53,364 according to the 2010 Census"

Of course, not all of them own life insurance, but even a small percentage means thousands, perhaps tens of thousands do.

What then?

Mr Belth proposes a class action lawsuit. My own understanding of these is that they generally benefit the lawyers that file them much more than the plaintiffs themselves. Still, if that's the clue-by-four my industry needs to address this, well...

Monday, July 24, 2017


Courtesy FoIB Bill M:

'Nuff said?

Interesting RC Twist

No, not that RC; RC as in Risk Corridor. Regular readers may recall that these were payments promised to insurers to help mitigate the extraordinary claims wrought by ObamaPlans, and which were woefully underfunded.

Back in 2015, HealthyCT (that state's now-defunct Co-Op) received "more than $128 million and covered only 6,094 people – more than $21,000 per enrollee." And that still wasn't enough: they went under last summer.

But in a surprising (well, to me) development, Juris Capital (a "litigation funding firm ") is offering to infuse over $10 million "to the estate of HealthyCT." First, I've never heard the term "estate of" used in the context of an insurance company, but it really does work, no?

And second, why they're throwing money down that particular hole is pretty interesting, as well: the failed insurer is still due over $30 million in RC funds; if those actually come through, well, nice payday for Juris Capital (of course, that's a big "if").

And they're at the mercy of two different government entities: Constitution State insurance regulators who are suing the Feds. Not an appealing notion, but best of luck to Juris Cap.

Mid-Summer Health Wonk Review

Steve Anderson hosts this month's eclectic collection of health care wonkery. From teamwork to Siri to ransomware, it's all interesting.

Friday, July 21, 2017

Taking it on Faith

So, got this in email today from Sally and Dave:

"Due to the cost per month now with [carrier], we are looking at one of the medical cost sharing programs.  If we finalize this, when do I need to notify [carrier]?  Our renewal date is August 1.  Thank you."

I replied:

"Don’t blame you. I actually know someone who’s in one of these and is pretty happy with it. He lives in another state, but presume is similar. Would you like me to connect you?

Also, whenever you do pull that trigger, just have to notify [carrier] to cancel. I can help with that when the time comes. It’s not a big deal

Sally responded:

"Thanks for the info.  Just wanted to make sure I didn't miss anything.  I will call them.  I am close to finalizing with Medishare, so I don't think I need more info, but I appreciate the offer!  Thank you so much!"

I thanked her and Dave for their years as clients, and my hope that they'll keep me in mind for future insurance purchases.

So, what's the lesson here? Well, this family has, as a direct result of ObamaCare, lost their coverage It was a plan that fit their needs at (for a while) an acceptable cost. But now, they can no longer afford it, and a new ObamaPlan would cost even more, with even higher out-of-pocket exposure.

Of course, they'd still get "free" birth control convenience items and maternity coverage, something no late-50's couple should be without.

Sad, really.

Thursday, July 20, 2017

Thursday LinkFest

First up, FoIB Dana Beezley-Smith has a really powerful post on her blog about the actual, real-world impact that ObamaCare has had on the individual insurance market. While various pundits and pols criticize (often justifiably) on the Republican's latest attempts, they seem to have missed the ACA's "trajectory of higher premiums and costs” and “fewer, if any, coverage choices.

Read the whole thing.

Co-Blogger Bob V has the latest from the annals of the Much Vaunted National Health System©, where a "nurse has revealed she was charged £80 for parking, on top of parking fees already docked from her wages," all because she overstayed her shift to provide actual, you know, care to a cardiac patient.

But hey, gotta pay for that "free care" somehow.

And today's new word comes from FoIB Holly R: "Buurtzorg," Dutch for "neighborhood care." And it's not just a fun tongue-twister, it "allows nurses to act as a ‘health coach’ for their patients, advising them on how to stay healthy, caring for their needs and using their initiative."

And the results are impressive, allowing the Dutch "healthcare system to reduce costs by around 40%, while the time it takes to administer care has been slashed by a staggering 50%."

Maybe worth a look here?

Wednesday, July 19, 2017

Tuesday, July 18, 2017

Stunning: 1,000 Words on ACA '18

Courtesy of co-blogger Bob V, "2018 Projected Health Insurance Exchange Coverage Maps." Here's the latest:

[click to embiggen]

As Bob notes, would suck to be in Nevada.

Monday, July 17, 2017

Tweeting up a storm

For those unfamiliar with the term, a Tweetstorm is a series of short messages posted in a string (a function of the Twittter's 140 character per message limit). These are often annoying, but two recent 'storms' are really great reads. Both are from Friends of InsureBlog, and both have important insights into the health insurance/health care debate.

The first is from Dave W, posting at Ace of Spades blog (mild language warning). A sample:

The other is from Cato's Michael Cannon. And a sample of his 'storm:'

Good stuff, all.

Health "Care" Fraud Bust: By The Numbers

Courtesy ForAmerica:

[click to embiggen]

Friday, July 14, 2017

It's Time To Fully Implement Obamacare

Enough of the BS already. Obamacare can't and won't be repealed without 60 votes in the Senate. Any Republican alternative claiming to replace Obamacare that takes away money from states won't pass either. Instead of trying to do the same thing over and over while expecting a different result why not simply implement what President Obama signed back on March 23, 2010?

Members of Congress - on both sides of the aisle - have two objectives, protect themselves and find a way to get reelected. Full implementation will put both of these objectives at risk.

Want to know the perfect place to start? Eliminate Congress' illegal status as a "small business" and force all 12,000+ members, staffers, and their dependents to purchase insurance legally as the law was written. Anything less would be uncivilized.