Ohio & COBRA/ARRA: More Questions than Answers [UPDATED]

[Welcome Industry Radar readers!]

[Please scroll to bottom for update]

In looking through the latest missive from the (Ohio) Department of Insurance, I was drawn to this innocuous-looking requirement:

"Employers are required to send a notice to former employees so that former employees can elect to continue their group coverage and receive the subsidy."

What, exactly, does that mean? As we've discussed before, it's just not cost-effective for a small employer to contract out this kind of administration, but it would be nice to know what, exactly, is going to be required of him in the event a former employee (exployee?) becomes eligible under this new program. Then, too, there are budget considerations regarding how far back the employer will need to pay.

So I poked around the DOI and DOL websites for a bit, but was unable to find anything helpful. The phone seemed to beckon me, and so I called Columbus and ended up speaking with a very nice (if befuddled) gentleman from the DOI. After introducing myself, I explained why I had called, and what had me confused. Then, I asked what it means that an employer is "required to send a notice to former employees?"

The answer was not comforting: "we really don't know yet; the legislature is working on it now." The problems include the fact that Ohio's current coverage continuation law runs for only 6 months, while COBRA/ARRA goes for up to 9. So those two have to be reconciled.

Another problem is that there's never really been any formal notice required on the state level; that is, it was up to the employee to seek out coverage. But the new law has this pesky employer requirement, which begs the question we've already mentioned. It seems to me that, with the clock already ticking, this would have been resolved and implemented. But of course, we don't want to confuse governance with common sense.

A related problem is the next sentence: "Former employees will have from the first day they are eligible until 60 days after receiving the notice to enroll." The way I read that, if one became eligible on, say December 1st, but the notice isn't received until, say April 1st (being generous and/or optimistic), how is this going to help the former employee, who now has to come up with 5 months of premium (well, 35% of premium) when they've potentially been unemployed the whole time? And, of course, the employer's 65% liability is at issue, as well.

I hate to keep saying "we'll keep you posted," but as this continues to evolve, that's the best we can do.

UPDATE: In the comments, FoIB Chad (co-blogger at Tusk and Talon) informs us that:

ARRA does require the employer (whether subject to COBRA or state continuation) to send notices to employees terminated between 9/1/08 and 12/31/09. A model notice is due to be issued by the US DOL on 3/17. For those who did not elect COBRA, coverage would be effective for coverage periods starting 2/17 or after (or 3/1 if coverage is monthly). Unlike normal COBRA, coverage is not retro to the qualifying event, rather only to the 2/17 or 3/1 date. ARRA generally does not modify state law as far as the duration of coverage.

So the coverage elected in OH should still only last for 6 months from the date of the event (e.g., if the event was 5 months ago, the EE would only get 1 month of coverage from 3/1 to 4/1). Employers/Carriers will only be able to claim a subsidy for the 6 months or less of coverage extended under OH's state continuation law. There are lots of other nuances but I'd be surprised if the DOI provides any assistance beyond leaning on your carriers to figure out, and do, whatever it is they are supposed to do.

Thank you, Chad!

COBRA/ARRA Update: Gay Pride Edition

As previously noted, we have no problem discussing alternative lifestyle issues and insurance. This latest comes from Alert Reader© Jeff M, who asks (and then answers) "did the new COBRA rules change taxation of domestic partners?"

This is especially relevant as we see more and more carriers offering "family plan" type coverage to unmarried couples (and those same-sex marriages in relevant locales). In general, domestic partners (DP's) aren't eligible for dependent status on 1040's, so the question of how (and/or if) they should be taxed on employer provided health insurance is a poser.

Add in all the confusion about COBRA/ARRA, and you've got the makings of a real mess.

Fortunately, Benefits Attorney Frank Palmieri has the answer: a resounding "No!"

The issue is one of imputed value; that is, the monetary benefit of insurance, um, benefits. To the extent that these are (currently) not taxable for "regular" dependent coverage, the question of how they're treated for "non-traditional" arrangements becomes problematic. There was some concern that the new COBRA/ARRA rules in some way affected the taxation of these benefits with regard to DP's, but this appears to be a non-starter.

Well, so far, anyway.

[Thanks to reader Jeff M!]

Friday COBRA/ARRA Update

As we noted previously, the latest COBRA/ARRA extension peters out at the end of this month. But according to admin guru Ceridian Benefit Services, it's looking increasingly likely that the extension will be, well, extended:

"Recently the Senate Budget Committee passed a bill that outlines the Senate’s health care priorities for the rest of the year. While the budget bill is not law, it signals that the Senate may extend eligibility for unemployment insurance and COBRA premiums subsidy until the end of the year."

No word yet on how we'd actually, you know, pay for that.
health insurance hdhp hsa cobra arra obamacare health care reform hipaa hcr masscare romneycare co-pays rx dental vision disability life insurance long term care ltc ltci sebelius cms smms medicare medicaid schip bonds surety short term medical mini med mini-med limited benefit defined benefit defined contribution deductible copay copays coinsurance co-insurance 80/20

More COBRA Bites

Earlier this year, IB was the "go-to" place for COBRA/ARRA info, and we certainly wouldn't want to let our readers down. This morning's email brought news from COBRA admin Ceridian about new developments on the COBRA and ARRA front.

First, that 65% COBRA subsidy on which so many folks count? Well, it sunsets at the end of this year. If and/or when that happens, folks who lose their group benefits on or after December 31st won't be eligible for the subsidy (although insureds currently receiving it won't be cut off on that date).

Second, there are currently two House bills and one in the Senate that seek to extend the subsidy into (at least) next year. As Ceridean notes, with unemployment officially at over 10% (and unofficially at 22%), it's a pretty good bet that a lot more folks will be clamoring, not to mention eligible, for the subsidy. This, of course, will put even more pressure on Congress to "do something."

We'll keep you posted as things develop.

Oh, something else that caught my eye in that aforementioned e-mail: in analyzing their enrollment data, Ceridian found some interesting patterns. For example, "COBRA enrollments increased approximately 40 percent from pre-ARRA rates. About 18 percent of eligible workers chose COBRA health care continuation coverage, up from about 12 percent." Since someone else was footing up to 65% of the bill, that's not exactly a surprise. Click here for a copy of their full report.

COBRA/ARRA: Misinformation Abounds

[Welcome New York Times and Industry Radar readers!]

Had a call today from a prospect looking for information on COBRA/ARRA, specifically how she could access the gummint's subsidy. It seems that until recently, she worked at a large national retailer which had shuttered its doors. She was under the impression that she could still elect COBRA (this was understandable, since she had already received the required paperwork for continuation). Unfortunately, the company folded before she could complete, let alone return, the forms.

In the event, it wouldn't have mattered had she been able to do so, since that option evaporated with the company:

COBRA allows one to continue coverage even after one has left an employer. If that employer subsequently goes bankrupt (completely, not a reorganization plan), the insurance goes away; there is nothing to "continue."

[ed: Some states require carriers to offer "conversion plans" in certain circumstances, but that wasn't the case here]

If there's nothing to continue, there's nothing to "subsidize." Indeed, since the company no longer exists, it's not possible for it to pay the 65% at issue. Being a persistent sort, my caller opined that this was okay, she'd opt for an individual medical plan, "since the government's subsidizing it anyway."

Once again, I had to explain that this was not the case (and it's truly disturbing how much misinformation abounds out there): the government never directly paid the subsidy anyway, and there was no provision for any subsidy for non-group plans [ed: Hush up - don't give 'em any ideas!].

In short, if your (previous) employer goes belly-up, so does your COBRA-based health insurance. By the way, this can also happen if the employer simply decides to cancel the group plan altogether (although, in that case, a conversion plan may be available). This is especially problematic for folks with chronic and/or severe pre-existing conditions.

This is just one more reason why I generally suggest to folks that they get off of COBRA as quickly as possible. If you're not on it, it can't bite you.

COBRA/ARRA: The State Fair Edition

Previously, we noted that some states have so-called "mini-COBRA" laws which apply to smaller groups (under 20 employees). There was some confusion as to how COBRA/ARRA would apply in these situations, which has now been cleared up a bit, thanks to (no kidding!) Anthem.

Readers may recall that the new "regular" COBRA rules require the employer to bear the cost of the employees' subsidy; the rules for "mini-COBRA" differ in that they require the carrier to, um, carry those costs, and then (hopefully) recoup them through their own payroll tax filings.

While one may enjoy the "schadenfreude" of the carrier being put in the position of premium payer, it would be well to remember that these costs are actually borne by their insureds (that would be thee and me). Something about the Law of Unintended Consequences.

And, of course, these folks will be eligible for the subsidy effective last September (some 7 months ago). That could end up being a nice chunk of change coming out of carriers' coffers.

And ultimately, our wallets.

COBRA/ARRA Extension Update

We'd be remiss if we failed to remind folks that the famed COBRA/ARRA Subsidy has been extended (along with more and more folks' status as unemployed), The good news for those affected is that "[e]ligibility for the subsidy now runs through Feb. 28 ... and the duration of the subsidy can be up to 15 months. For state continuation, the length of the subsidy period depends on a particular state’s current continuation legislation. "

That last refers to states with so-called "mini-COBRA" regs.

There are, of course, a lot of reasons to stay on COBRA when one's (former) employer is footing most of the bill; still, if one is healthy, it's usually best to get off of such a plan as quickly as possible (again, taking the subsidy into account). It's a shame that there's no mechanism to, well, pay folks to get their own plans.

Unless I'm missing something?

[Hat Tip: UHC]

COBRA/ARRA Update: HIPAA Gets Bigger

Amid all the uproar resulting from last year's COBRA/ARRA expansion, one very vital piece has gone largely under the radar:

"ARRA extends HIPAA's privacy and security rules to “business associates” of a covered entity. A business associate is a person or entity who performs, on behalf of a covered entity, a function or activity involving the use or disclosure of individually identifiable health information."

For those of us who sell life and/or health insurance, HIPAA's lookin' at you, kid.

What does that mean?

Well, beginning February 17, strict new requirements apply to folks who routinely handle clients' confidential health data. This includes everything from applications to follow-up correspondence. Paper records must be kept under stricter control, and electronic ones more heavily protected. And any breaches of this extra security must be dealt with immediately, including notifying those whose records have been inappropriately (or illegally) accessed.

FoIB John Nail, who runs the respected Industry Radar aggregator site, has been all over this, including setting up a section specifically geared toward helping agents make sense of all this. John also tells me that at least one carrier "is automatically incorporating your compliance in their BA agreement for you and your sub producers and requires no signature or authorization from you. Takes effect 2/1 even though the law is effective 2/17…oh by the way you are responsible to see that all your sub producers are compliant as well. Good luck!"

John also has an excellent suggestion: if you're an insurance agent, check your new Broker/Producer Agreements for reference to the new HIPAA regs. If you find any, we'd appreciate it if you'd forward copies of them (with personal info redacted, of course) to us to send on to John.

More ARRA/COBRA Confusion

[Welcome Industry Radar and Wall Street Journal readers!]

Received in the mail this morning a letter which included the following:

"...small employers that are exempt from COBRA (e.g. employers with less than 20 employees) but subject to state continuation laws [ed: "mini-COBRA] will have to comply with the new subsidy requirements..."

Which we already knew, but:

"The new rules require employers to send out special notices and to allow certain individuals who originally declined coverage a second opportunity to elect to continue coverage." [emphasis added]

Now, this is from a noted expert on COBRA (in fact, he's one of our favorite CE instructors on the subject), so one might presume that this could be taken as "gospel."

Not so fast.

Let's back up a moment: as we've discussed, the Spendulus included some radical changes to COBRA, one of which extended the "subsidy" to smaller groups. From what we've learned so far, this applied only to the "subsidy" itself, not the notification requirements. Until now, Ohio (for example) had none: it was up to the (former) employee to seek out that coverage continuation. COBRA requirements in that area, however, are onerous, and almost always contracted out by employers. This is cost-effective for a larger group, but prohibitive for smaller ones.

If true, this new notification requirement would be a severe blow to any small employer's budget: under COBRA, the penalties for screwing up notifications are severe and not just applicable to the employer, but to the hapless employee who was assigned the task. So many groups (and most of the smart ones) contract with a COBRA administrator to handle this chore. That's probably not an option for a group of, say 10 or 12 employees, so the temptation to do this in-house will be great.

And unwise.

I'm still not convinced that this is the new law of the land, however. We've been keeping a very close watch on this issue, and haven't seen this particular item come in, except for this letter. So I called the Department of Insurance to see if they knew about it.

They did not.

In fact, their response was to "stay tuned" because the Department of Labor (the federal agency tasked with overseeing COBRA) was still ironing out details. Better yet, I clicked on over to the DOL, and found a brief FAQ about the new rules, none of which addressed the notification issue at the state level. Ditto at the dedicated COBRA site.

So, is this fact or urban legend?

At this point, no one seems to know. We'll keep you posted.

Do You Know the Way to T-A-A?

FoIB Rick B tips us to a little known, but well-established, Federal program that's been around since the early 60's. The Trade Adjustment Assistance program began in 1962 as part of a major labor law overhaul. It was originally intended to help workers whose jobs were shipped overseas by helping them obtain new jobs at pay similar to their previous employment. It's since been expanded to offer additional benefits.

Unlike "regular" unemployment compensation coverage, TAA funds are accessed by groups of laid-off folks: a group of newly unemployed workers file with the Department of Labor, if that group is approved each person in it can then apply for the services and benefits that he or she needs.The criteria seems to be based on proving that these workers' jobs have been sent outside the country (or they've suffered a significant reduction in hours and income as a result of outsourcing). Rick believes that this program is a major reason why Michigan and Ohio (with relatively high unemployment rates) still sport a lower than average percentage of uninsureds. Part of that reason is that the taxpayer picks up 65% of one's group insurance premium (deja vu all over again) for up to two years, and the new COBRA/ARRA program expanded that rate to 80%.

Interestingly, this newly expanded subsidy comes via a mechanism called the Health Coverage Tax Credit, which is now available to eligible employees retroactively: the newly expanded program provides eligible employees "with retroactive payments to help cover up-front costs of obtaining health coverage prior to the start of HCTC." It also applies, to some extent, to individual states' "mini-COBRA" programs.

Of course, if someone else is picking up 80% of your tab, it's a lot easier to afford to stay on the plan. Rick posits that the TAA was essentially a starting point for COBRA/ARRA: after all, why start from scratch? That makes a lot of sense, since it's an already established program easily adapted to other, similar efforts.

COBRA/ARRA: Ohio Update [UPDATED]

[Please scroll down for important update. HGS]

The good news is that we continue to see clarifications regarding how this massive new entitlement will be implemented. The bad news is that we continue to receive clarifications regarding how this massive new entitlement will be implemented.

Case in point: Ohio's "mini-COBRA" law.

Until a few weeks ago, the threshold for whether or not one would qualify under Ohio's (existing) insurance continuation law was simple: if you qualified for unemployment compensation and had been previously covered for 3 months, you're golden. The main sticking point was always that "eligible for unemployment" wording: the only way for one to know for certain was to apply and await a decision. If you passed, you were entitled to stay on the previous plan for up to 6 months (albeit completely on your own dime).

That's all changed now. The new regs, signed into law on April 1 (how appropriate), lift that key qualifier. Now, that threshold is simply that one has been involuntarily terminated (except for "gross misconduct"), and the continuation has been extended to 12 months (to more closely align with "regular" COBRA/ARRA).

And, of course, the insurer is responsible for forwarding the 65% subsidy. Contrary to popular belief, by the way, the insurer isn't really "paying" anything; they're simply rerouting dollars, which they'll recoup quickly enough at the next renewal. Something about a "free lunch."

We all caught up yet?

ADDENDUM/UPDATE (4-28-09): FoIB Don Deaton points out that since the new law was signed (and took effect) on April first, employees of groups that haven't renewed "until (April 2, 2009) will still only get 6 months of continuation, and ... will still have to be eligible for unemployment to get the coverage at all." The law specifically states that "policies issued, delivered or renewed after April 1, 2009, must include" the new language.

Latest on COBRA/ARRA

We haven't written about the COBRA/ARRA subsidies in a while, but there's good news for folks who've recently been involuntarily terminated:

"The Continuing Extension Act of 2010 was passed by both the U.S. Senate and the U.S. House on April 15" (how ironic!); the president signed it into law later that day.

The previous extension had run its course as of March 31st; this legislation breathes new life into the program by extending the subsidy for another couple of months (through May 31st). Regardless, the total length of time one may be eligible for the premium assist is 15 months. So folks currently "running out the clock" won't see any relief by way of this extension.

As always, we would urge those readers with more specific concerns to contact their (former) employers' HR folks for detailed, personalized answers. The Department of Labor also has a helpful website.

[Hat Tip: Beth D]

COBRA/ARRA Update: No Kidding? We Called It

This morning's McPaper had this headline in its Money section:

Health insurance subsidy for laid-off workers has holes

The paper describes several scenarios under which laid off employees may fail the AEI (Assistance Eligible Individual) test:

• Their former employer has gone out of business.

As we noted earlier this week, "COBRA allows one to continue coverage even after one has left an employer. If that employer subsequently goes bankrupt ... the insurance goes away; there is nothing to "continue."

• They worked for a small company and live in a state that doesn't provide extended COBRA coverage

So-called "mini-COBRA" laws extend many of the COBRA requirements to employers with fewer than 20 employees, as we reported almost two months ago.

Unfortunately, this is one case where we're not particularly pleased to be right; a lot of folks have learned the hard way that government largesse often comes with major strings attached.

ADDENDUM: Okay, so you're not eligible for COBRA, let alone the subsidy. What options are available?

Well, that depends largely on your health. If you're in decent shape, not taking a lot of medications, individual medical plans are a great deal. For one thing, you can customize the plan to fit your own needs (unlike "one size fits all" group plans). For another, rates for these plans are often lower than comparable group policies. Your first step should be to consult with a professional, independent agent who specializes in this kind of insurance.

If you're in California, that means someone like Bill Halper; if you're in Georgia, look up Bob Vineyard. The key is to find someone who can help you explore all the alternatives.

But what if you're on a limited budget, especially after being laid off? Or perhaps you have major health issues? Then you need to click on over to Coverage4All, an online resource that helps you find low-cost, even free health care options.

It doesn't have to be the end of the world; it just takes a little time and effort to find the right solution.

Ohio DOI vs The Feds?

In an online forum to which both Bob and I contribute, there's an on-going discussion regarding my post from last month reporting on Ohio's implementation of the new COBRA/ARRA regs. In brief, the new Ohio rules state that "(s)mall employers will not be obligated to pay any portion of the premium. The former employee will pay 35% of the premium and the insurance company will claim the credit from the IRS for the 65% of the premium not paid by the former employee."

All well and good, but for one (ahem) minor detail: as Bob points out, "it does not appear to say how that credit will be achieved. Nor does it indicate the IRS will go along with this scheme."

It's that last bit that's the real poser: how can state insurance law trump federal tax law?

While it's very nice that the Ohio Department of Insurance is willing to give the insurer a break, what makes the DOI think it can offer a federal tax break? This morning, I posed that question to the folks at the Ohio DOI, and was delighted to learn that this has the "blessing" of the IRS:

"For this purpose, payroll taxes are defined as Federal income tax withholding ... The credit is claimed on the person’s payroll tax return ... Under ARRA, the “person to whom premiums are payable” is based on the nature of the plan and which COBRA continuation coverage provisions apply ... For any other group health plan subject to ARRA (generally, fully insured coverage subject to State continuation coverage requirements), the insurer providing coverage under the group health plan is allowed the credit." [emphasis added]

So it appears that the state is simply reiterating what the Feds have already specified. Good news, right?

Update Mania: Things That End With "A"

■ COBRA/ARRA: From the mailbag, we get this inquiry from Pete Peterson:

"Has anyone addressed the Pre-x issue concerning the new law. For example it seems that an employee could be involuntary terminated without paying the premium for 5 months, then come back on the plan by paying 35% of one months premium, have both knees replaced with no pre-x conditions because the creditable coverage period does not apply.

If the participant discontinues coverage after one month the adverse carrier risk is brutal to say the least."

Unfortunately (for the carrier, at least), this is correct. ARRA defines a "late-electing person" as one who had previously been offered, and rejected, COBRA extension, and who subsequently became eligible under the new rules [ed: new "rules?" Are they really "rules" if they can be changed on a whim?]. Such a person could, indeed hop back on the plan by simply paying their portion of one month's premium, have such a procedure, then bail.

As a practical matter, though, I'm not convinced that this will be a common occurrence. For one thing, they'll still have their deductible and co-insurance, and the pre-cert requirements may well take longer than the person would have under this one-month scenario. Also, any such procudure is likely to require follow-up care, not to mention rehab, which would also take at least a few months.

■ Aetna/Humana: FoIB Rick emails that this is more likely to be a distraction than a certainty; it seems that there's more happening under the radar than in plain sight:

"WellPoint ... announced today that it has selected Availity, LLC as a strategic part of its suite of online provider solutions."

Rick explains that "Availity is working towards -- and in testing in selected Florida markets has actually achieved -- real-time claims adjudication, the Holy Grail of claims processing." One of the challenges of Consumer Driven Health Plans (e.g. HSA) is lack of hard data at time of service. Since there's no co-pay, and the provider generally has no real idea of what that claim will really cost (after repricing and depending on deductible and/or co-insurance), most folks leave the office parting with no cash. The doc then has to wait for the claim to be processed for payment to be received, from either the insured or the carrier (or some combination of the two).

A system that allows the provider to immediately know how much to collect from a patient, and the patient immediately knows what the service will cost, is a major step towards more transparent health care delivery. This is a good thing.

In related news, however, Rick reports that the aforementioned partnership now adds up to almost 50 million "medical lives, not counting Part D standalone or Med supp members, from the first, fourth, seventh and thirteenth largest insurers in the country. Hmmm. The words "too big to fail" come to mind, and not necessarily in a good way."

A year ago, I would have pooh-poohed such sentiments, but based on the AIG and Big 3 fiascos, I'm not so quick to dismiss this concern. On the other hand, there's not much we can do about it (even if we wanted to) except to hope for the best.

COBRA/ARRA Update: Tough Luck Edition

Rather than take a principled stand on whether or not to extend the extension, Nancy and Harry have bailed in favor of a long, peaceful Holiday Weekend, secure in the knowledge that at least they're insured:

"Legislation that would provide an extension of federal extended unemployment benefits ... was not approved by the Senate prior to adjourning for the Memorial Day holiday weekend ... As of now, the measure is a scaled down version that extends filing deadlines through November and does not include the COBRA subsidy."

Come Tuesday, when their benefits cease, a lot of newly-uninsured folks may (rightly) wonder why they've been left behind.

Hope and Change, anyone?

COBRA/ARRA Update: Pre-Christmas Edition

Lost amid the ruckus that is health care "reform" is news is that the House has passed an extension for the so-called COBRA subsidy, from the original 9 months to 15. In typical, unfathomable congresscritter fashion, this change was actually part of the Defense Appropriations bill.

Go figure.

The measure now goes to the upper chamber, where one presumes it will pass (seeing as how our troops, if not the funemployed, are counting on it), and then on to the president for signing.

Some features of the extension include eligibility for folks who exhausted their original 9 months of the subsidy, as well as expanding eligibility to those whose involuntary employment terminations take place on (or before) February 28th of next year.

[Hat Tip: Ceridian Benefits]

McCarran-Ferguson vs Sebelius

Once again, our dim-bulb Secretary of Health and Human Services has failed her civics test:

"Over the last year, America's largest insurance companies haverequested premium increases of 56 percent in Michigan, 24 percent inConnecticut, 23 percent in Maine, 20 percent in Oregon, and 16 percentin Rhode Island, to name just a few states."

So what?

That's a problem, obviously, for insured folks in those states; who are, fortunately, protected by their states' department of insurance. And that's the beauty of the system: if you don't like how that department's working (or not working), then you vote the suckers out. At some level, they're accountable to the electorate.

Furthermore, she can huff and puff all she wants but, at the end of the day, she has exactly as much authority over the carriers as they're willing to cede to her. It astounds me that their CEO's don't just tell her (and her congressional enablers) that they have zero authority to regulate at this level.

Of course, I'm just an insurance industry shill (but not a shameless one!), so I'm merely touting the company line, right?

Not at all:

"This spat deserves more attention, because its real lesson is what will happen to health insurance costs around the country if ObamaCare passes." [emphasis in original]

Really? How's that?

"Wellpoint's rate hikes are the direct result of the Golden State's insurance regulations—the kind that Democrats want to impose on all 50 states."

Case in point: COBRA subsidies (about which we've written extensively). Prior to ARRA, few people elected COBRA, most opting for individually underwritten (and usually much cheaper) health plans. ARRA essentially paid folks to keep their insurance, and run up claims. This had two major, negative effects: it increased carriers' loss ratios (thereby driving up health insurance costs) and accelerated health care spending (thereby driving up health care costs, which in turn increased health insurance costs). Wow, a two-fer.

Lost in all the publicity-mongering in DC is the fundamental disconnect the policitcal class has with even basic level economics: profits aren't profit margins, and it's the latter that truly count. Does this mean that carriers can't work harder to avoid dramatic premium increases? Of course not, but as long as the public demands first dollar coverage for strep tests and bruised knees, instead of considering high deductible plans, there's not a lot of wiggle room.

As Bob often points out, we don't expect our car insurance to pay for wiper blades and oil changes; just imagine how expensive it would be if it did. I would add only that one needn't imagine the result, one need only look at the current state of health insurance.

IB @ 5

Hard to believe, but InsureBlog turns 5 today. Along the way, we've become a go-to source for COBRA/ARRA and health care "reform," a Lexis-Nexis Top 50 blog, consistently ranked in the Top 20 in the Wikio Health category, and enjoyed a steady growth in regular readership.

Of course, we're most pleased and proud about that last: it's our readers that drive us, and we're grateful to all of you.

Thanks!!

Latebreaking: The "Doc Fix" still broken, more

It was just a week or so ago that we pointed out that the so-called "Doc Fix" wasn't:

"The assumption was that there would be no actual cut. But we all know what happens when we assume ... If it does not pass, then CMS will process all claims from June 1 on based on the reduced 2010 fee schedule."

Well guess what?

The Washington Post is now reporting that "[t]he Senate effectively rejected a slimmed-down package of jobless benefits and state aid late Thursday ... The measure would protect doctors from a steep cut in Medicare rates scheduled to take effect [today]."

The bill would also have extended the notorious COBRA/ARRA subsidy, which has since expired.

Are we on the verge of seeing actual financial discipline out of Poppa Washington?

Doubtful, but hope (and change?) springs eternal.