Tuesday, February 21, 2017

*Tweet* insurance? Really‽

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

"Companies buy ‘Trump tweet’ insurance policies"

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

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

Big bucks.

Hence, Tweet Insurance.

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

Methinks it'll be yuuuge.

[Hat Tip: Claire Wilkinson]

Monday, February 20, 2017

Ethical Conundrum: Who owns your cells?

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

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

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

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

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

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

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

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

So, what do our readers think?

Thursday, February 16, 2017

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

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

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

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

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

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

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

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

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

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

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

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

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

So what's the deal?

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

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

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

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


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

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

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

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

Gee, thanks.

[Hat Tip: @JeremyWallace]

Wednesday, February 15, 2017

Running out the clock

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

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

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

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

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

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

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

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

Tick, tock...

Tuesday, February 14, 2017

One down, one to go?

So a couple weeks ago, the Humana/Aetna "wedding" was put on hold (again) by a Federal judge.

Now, someone's blinked:

"Aetna And Humana Call Off Merger After Court Decision"

Turns out, the annulment didn't come cheaply, either:

"Aetna announced it would pay Humana a $1 billion fee for backing out of the agreement"

And lest you think that was a major windfall for the latter, think again:

"Humana announced about $370 million of that would be paid as taxes."

Nice little chunk-o-change for Uncle Sugar.

Again, although I don't really have a horse in this race, I'm not terribly disappointed: more carriers should mean more competition, which is generally a good thing, no?

[Hat Tip: FoIB Holly R]

Underwriting Love

So it turns out that, once again, co-blogger Bob was prescient when, 8 1/2 years ago, he posted about the weird machinations some couples will go through for insurance coverage:

"[A] poll conducted by the Kaiser Family Foundation, a leading health policy research group, found ... 7 percent of U.S. adults married so one or the other could get on a partner's health insurance plan."

Fast forward almost a decade, and we learn that folks in The Middle Kingdom aren't all that different when it comes to insurance, love and marriage:

"This Valentine’s Day Chinese insurers have their hearts set on wooing customers with the sale of love insurance ... One policy ... entitles customers to a congratulatory payment if they and their designated significant other get married any time between three and 13 years after taking out the policy."

Kind of like an old-fashioned endowment plan, and looks to be affordably-priced, as well:

"Customers choose a one-time premium payment ... in return for a respective payout ... providing a valid marriage certificate is shown to the insurer in the allotted timeframe"

For example, $14 nets the lucky couple $291 (assuming they get hitched in time). Not too shabby.
So, a loaf of bread, a jug of wine, and ... this here insurance policy

[Hat Tip: Claire Wilkinson]

Highly Questionable Agent Trick

I'm usually the last one to criticize a colleague's actions, particularly when I don't know all the facts, but this case is so egregious that I'm quite comfortable calling out an Erie Insurance agent. Here's why:

As long-time readers know, I've been highly critical of first-gen Universal Life policies. But, there are almost always exceptions, and our long-time client Marcus is one of those.

His plan, purchased 26 years ago at age 43, is essentially "paid up," with $86,000 of cash value and 5% minimum guaranteed interest rate, with a net death benefit of about $336,000. He hasn't paid premiums for many years, and it doesn't look like he'll need to.

So, for once, a Universal Life policy that actually works.

Which was why I was quite taken aback to receive a letter from our carrier's Home Office that it's being replaced. Now, there were no specifics on which Erie plan is being used, but given the circumstances, it seems certain that it's their version of UL, which (according to a colleague who also represents Erie) tops out at a 3% minimum interest rate, a full 40% lower than his current plan's.

Now why would an agent do this, and why would a client be foolish enough to agree to it?

Well, a couple reasons come to mind:

First, perhaps this new plan incorporates additional features, such as a Long Term Care rider. My colleague informs me that this is, in fact, not currently available, so scratch potential validation #1.

Perhaps there's a cost savings? Well, if my client has his home and auto coverage with Erie (a distinct possibility, since it's not with our agency), then there's an additional discount available on those two lines if he also buys a life policy.

Here's the thing, though: his cash value means that the 2% difference represents about $1700 a year. That multi-policy discount is worth about 5%, which means that my client's home and auto policies would have to be in excess of $34,000 (that's thousand) a year to get close.


Now why am I so worked up? After all, I have literally zero skin in this game (we're long past getting any commissions or residuals from this plan, and he has no other policies with us).

It's simple, really: what's right is right, and what's wrong is wrong.

And this is egregious.

Monday, February 13, 2017

MVNHS©: Oh how "The Mighty" have fallen

Once upon a time, the Much Vaunted National Health System© was "declared the best healthcare system by an international panel of experts who rated its care superior to countries which spend far more on health."

While we would vigorously dispute that, it's really not necessary to do so, as recent events just shore up our claim that the socialized medicine scheme is, in fact, failing.

And what evidence can we provide? Well, thanks to co-blogger Bob V, here are just two examples that "free" "good."

Case the First:

"NHS Health Check ... The number of patients on hospital wards in England has been at unsafe levels at nine out of 10 NHS trusts this winter"

Wow, a 90% fail rate. Now that's impressive.

But it gets better (for certain values of "better"). Let's put a more personal face on it:

"A family has launched a desperate appeal to send their three-year-old son to America for cancer treatment. They are now attempting to raise enough money to travel to Cincinnati to get Charlie treatment that the NHS doesn't provide."

Thus proving that "free" = "what you pay for it."


Tale of Two DI's: Part 2

In Part 1, we discussed the case of a neurologist who had some quirky ideas about both disability and homeowner's insurance. As one might imagine, I'm still waiting to hear back from him (but not holding my breath, nor particularly bothered that I haven't). I also promised to share the tale of another client who was also looking for this type of coverage at about the same time, and the very different tack that story took.

And so here 'tis:

Ted is a barber, and a long-time client (life and health insurance). He came to me recently because he thought it'd be a good idea to have some disability insurance in case he had to miss work due to an illness or injury. Of course, being self-employed means that this is particularly important. I did my usual pre-screen (just to make sure things were more or less the same health-wise) and confirmed his income. There are several carriers that do well in this market, but the plan design I got from Illinois Mutual was really top-notch. For one thing, they offer a special occupation class "bump" for folks in Ted's position, which meant he could qualify for more coverage at a reduced rate.

He qualified for about $2,000 a month of coverage, at a cost of about $65 per month. That was a good deal, but he was concerned about what would happen if he had a bad month (or three) and couldn't swing the premium. I explained that he didn't have to apply for the full amount; a lower amount would be more affordable, and since I like to include a guaranteed insurability rider on plans I sell, he can always bump that up down the road, regardless of his health at the time. As I often do with clients, I urged him not to let 'the perfect' be the enemy of 'the good.'

He liked that. A lot.

So we settled on $1,200 a month benefit, with a $43 per month premium, completed an application, and the policy was approved in under a week (which is fantastic!). It was in my hands a few days later for delivery and review.

So here we have someone who understands both the need for this kind of coverage, and the value of a professional, independent agent who can help guide one through the process (not to mention a great carrier that was happy to work with me on getting appropriate quotes).


Friday, February 10, 2017

And another block

Last month, the new administration followed through on the previous admin's threat to put the kibosh on the proposed Humana/Aetna merger:

"A U.S. federal judge blocked the companies merger deal, saying it violated antitrust law."

Fast forward a couple weeks, and we get similar news on the other big merger story:

"[Wednesday], the U.S. District Court for the District of Columbia issued a decision granting the Department of Justice’s request to block Anthem’s acquisition of Cigna."

As expected, Anthem's "disappointed" in this latest setback, and has vowed to press forward through the legal system to obtain a favorable outcome.

I'm ambivalent about the whole thing, but tend to come down on the side of "competition is good;" that is, I'm not terribly upset with this latest development.

Time, of course, will tell.

How to achieve a competitive market?

In the past few weeks we've watched our courts block two giant mergers: Aetna-Humana, and Anthem-CIGNA. The reasons were the same.  The mergers would harm consumers by reducing competition and stifling innovation.


"the government alleged that the merger of Aetna and Humana would be likely to substantially lessen competition in markets for individual Medicare Advantage plans and health insurance sold on the public exchanges," 


"the merger is likely to result in higher prices, and [will have] other anticompetitive effects,” the judge wrote. “It will eliminate the two firms’ vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market.”

Isn't this wonderful news!  

Because now the American economy is prepared for a national, single-payer medical insurance program that will not lessen competition thereby benefiting consumers and stimulating innovation!

Wait.  What???

Impact of Decades of National Health Care

National health care is a universal right? At least that is what some people think they want.

If you agree, this 7 minute video might just change your mind.

#NationalHealthService #UniversalHealthCare

Thursday, February 09, 2017

Health Wonk Review: Alt-Facts edition

Steve Anderson hosts this week's comprehensive round-up of health care polity and policy. He does a great job of contextualizing the entries - makes for interesting reading and easy navigation.

(And our own Patrick Paule gets the top spot!)

Kudos, Steve!

Headache Caused by Cockroach

The next time you get a headache, thank your lucky stars it is probably nothing serious.

The woman knew after waking up suddenly in the middle of the night that the pain in her head -- which had an itchy, scratchy feel to it -- couldn't be normal. Boy was she ever right.

A trip to the hospital yielded the cause -- doctors pulled a live cockroach from her skull. - CNN


The Many Lives of "Grandma"

If you like your plan you can keep it. One of the biggest lies of Obamacare might end up having a little more truth than we all believe.

Back in November of 2013 President Obama directed his minions to write a rule extending the life of insurance policies that were in force before Obamacare to extend them an additional year. Less than six months later they issued a second order extending the deadline out to policies that end on January 1st of 2018.

These policies have become known as Grandmothered plans. Here at IB we have written extensively about these plans and the impending death of "Grandma".

Well, it turns out Grandma might be making a miraculous recovery. According to numerous industry insiders, the Trump Administration is making a strong push toward using Obama's own decisions against him. The push is so strong that the big elephant UHC, released a broker communication stating their intent to extend Grandmothered plans into 2018 "contingent on transitional relief being offered beyond December 31, 2017."

The good news for Grandma, at least in my opinion, is that once Tom Price is approved as Secretary of HHS I believe this move will be done immediately.

Obamacare hasn't pushed Grandma off a cliff. Her euthanizing has been postponed a couple of times. But now it appears that Grandma is stable and in fact could be immortal.

Tuesday, February 07, 2017

Thanks for your patience!

I'm currently out of town (and mostly offline) due to a family health crisis.

Regular blogging should resume shortly.

Friday, February 03, 2017

Obamacare Has Mold

Replace. Repair. These are the words I hear when watching my favorite home remodeling shows. Suspect wiring, bad plumbing, shoddy roofing. These are some items that a home remodeler like Mike Holmes sees in his everyday work. But what happens when a contractor builds a house with a porous foundation and it infests with mold? What if that mold has been growing for seven years and moisture has taken over the entire home? In almost all cases the best alternative is to simply level it and start the building process over.

This analogy is a perfect fit to the ongoing battle with Obamacare.

Built by a shoddy contractor in 2010 and riddled with poorly framed walls by untrained carpenters, Obamacare has survived by hiring fly by night journeymen who have come in to do patch repair jobs when necessary, and pushing off the high cost repair jobs to future dates.

The house itself looks spectacular. Shining bright above the beautiful oak table is the glittering new light fixture hanging in the dining room. The brick wainscot is an image of craftsmanship at it's finest. From the outside this is what we see. This is what we want to see. We don't want to believe that the beautiful home would ever have any defects.

However, buried between the walls where very few people ever look is a problem. Growing rapidly due to a foundation that isn't solid, is the mold of Obamacare. Seven years of moisture has completely engulfed the beautiful house and it is rotting from the inside out. The mold has spread from room to room and threatens the joists holding up the flooring and the frames of the windows. In a few spots it has shown itself through the painted walls only to be covered up by a quick touch up of paint that leaves a slight discoloration on the wall.

We don't want people to know about this issue. The mold has been in there for so long and has spread so much that a contractor simply can't come in and repair it. The foundation is so unstable and weak that it can't be patched and repaired either. 

We can look at replacing the foundation but that would come at a very high cost. And, only replacing the foundation won't eliminate the moisture that has penetrated the wood frame and created the deadly mold. To make this home right is going to require more than repairs and replacement.

It's going to require a complete tear down and new fresh start. It's going to take a full repeal. 

For all those decrying tearing down the house please have patience and hope. Because when the tear down begins rest assured, the beautiful brick you saw and the glittering new light fixture have both been removed.

The new house will be built. It will use the same brick wainscot and light fixture. Only this time the foundation will be stronger and waterproof. The wood used to build will be mold resistant. So will the insulation and drywall. This will come at a price. A price that has to be higher than what was originally spent on the first house. We can't cut corners on this. Doing so will create the same outcome we had on the first try.

There will be some changes to the house that we don't all find attractive. The view from the outside will be slightly different. Some of the finishes will have less glimmer and others will look immaculate. Normal wear and tear will occur and some repairs will be made. We might even add an addition down the road. Personally, I would prefer an outdoor space with a pool. But that may not fit the yard or be best for future resale.

It's time we all realize that building the perfect house will never happen. Some of us like a modern look while others prefer a more traditional style. We are going to have to compromise on fixtures and paint colors, countertops and flooring. Cosmetics can change. But, the one thing that must be agreed upon is making sure that the foundation is strong and dry. This is what allows us to live safely in the house.

Thursday, February 02, 2017

"If you like your plan..."

Too bad, so sad:

"Pamela Weldin’s experiences with Obamacare can be boiled down to just a few numbers.

Since the health care law’s implementation three years ago, Weldin, 60, has lost her insurance four different times

If that name sounds familiar, well:

"Pamela Weldon played by the rules, and for her efforts, she's outta luck:"[CoOpportunity]'s liquidation marked the third time she would lose her health insurance under Obamacare"

She's now on Plan #5, after having the metaphorical insurance rug pulled out from beneath her four times now. And she's actually an ObamaCare poster child, having been previously declined for coverage under the "old system."

But hey, let's "repeal and repair" (Whatever the heck that even means)

[Hat Tip: The Political Hat]

Wednesday, February 01, 2017

The Truth Will Out [Corrected]

Just a quick reminder that, prior to The ObamaTax, the actual decline rate in the individual health insurance market was nominal:

"Out of 1,763,000 applicants who were medically underwritten in 2008, AHIP reports that 223,000 were denied coverage"

That works out to less than 0.01%.

[ed: Ooops! As has been (correctly) pointed out in the comments, my math here was, um, off. In fact the article itself says there was about a 13% decline rate. My bad, no excuse. And Thank You to commenters for the correction!]

But hey, #Winning!

[Hat Tip: Dean Clancy]

Almost missed it: Happy Blogiversary!

Yesterday marked our 12th blogiversary, and what a ride it's been:

8,000+ posts, over 3
½ million page views, countless comments (literally, since we've switched comment hosting services several times).

And the best co-bloggers in the 'sphere:

Thank you Bob, Mike, Patrick, Kelley, Bill and Nate!!

And here's to the next dozen: L'chaim!