Shopping for Health Care

A recurring motif here at InsureBlog is Consumer Driven Health Care. In general, this means avoiding plans with expensive “first dollar” benefits (such as $20 office co-pays and $10 prescription cards). By choosing plans with high deductibles, and using one’s insurance as a safety net for large claims, more dollars stay in one’s pocket. And, in many cases, result in favorable tax benefits, as well.

Inherent in this philosophy is the idea that consumers will become more pro-active in deciding how and where to spend their health care dollars. For example, Provider X charges $100 for a mammogram, while Provider Y’s is only $85. Assuming equal quality, why would one choose Provider X?

The challenge is that, for the most part, health care costs are like airline fares: one never really knows ahead of time how much a given service will cost, and different patients (with different plans) will pay different amounts.

Confusing? You bet.

Some carriers, like Aetna, are coming around, and making this information more accessible to insureds. But not all:

“The California HealthCare Foundation recently had a small army of "mystery shoppers" -- people posing as uninsured patients -- call or visit hospitals in the state asking for specific medical procedures.”

These mystery shoppers soon learned what most of us already knew: the folks at the doctor’s office rarely (if ever) knew how much the service or procedure would cost. In fact, less than a third of these shoppers could get firm prices in a single call. I have no reason to suspect that it’s much different for actual shoppers, either.

Of course, this is a national phenomenon, not limited to the Golden State:

“A survey by the Kaiser Family Foundation and USA Today found that 52 percent of people polled nationwide said their doctors never or rarely discuss the costs associated with the procedures they recommend.”

Of further course, one wonders whether or not most patients ever ask about those costs. But those patients who’ve bought into the CDHC model, generally through Health Savings Accounts (HSA’s), probably do. I went poking around the net, but have thus far been unable to find a study of how many HSA’ers [ed: you just made up that word!] do, in fact, ask about these costs. In an admittedly informal and non-scientific survey, I asked some of my HSA clients whether they asked about these costs. To my surprise, only about half of them said they do.

Yet there is evidence that older “tried and true” treatments can be just as effective as the newest, at far lower cost. Now, your provider may have a very good and valid reason for suggesting the latest technology or purple pill, but that’s really another reason to discuss the issue.

Last winter, for example, my daughter experienced the thrill of a kidney stone. I am assured that this pain is second only to that of childbirth, and seeing her retching, I can believe it. At the hospital, a very brusque resident put her on the fast track for a certain procedure, somewhat akin to an ultrasound, but more invasive. He was quite taken aback when I called an immediate halt to the proceeding. “But she must have this procedure,” he exclaimed. “Fine,” I replied, “please explain to me why it is preferable to the old sonic blast method.”

Which rendered him quite speechless.

My point was that, before we go for the latest tech, let’s examine the options for both cost and efficacy. Eventually, the chief urologist came in to explain, to my satisfaction, why this procedure was, in my daughter’s case, superior and ultimately, more cost effective. At which point she underwent it, and has been quite the happy camper since.

The lesson here is not that I don’t care about my daughter’s welfare, but that I wanted to be an informed consumer. The resident was apparently unaccustomed to having his word (or authority) challenged. But that’s really the point: if we are to be informed consumers, we have to act as informed consumers.

Judy Rupp, information and assistance case manager with the Northern Oklahoma Development Authority Area Agency on Aging, recently wrote:

“Every decision that is made regarding health care has multiple repercussions that all involve cost — both short and long term — as well as personal well being. By being an informed consumer, you can make decisions that will keep you healthy, wealthy and wise.”

Couldn’t have said it better myself.

UPDATE: Hospital Impact blog has another take on this subject. Recommended.

Another Ethical Question...

We have an acquaintance who has a medical condition which requires surgery. Complicating matters is the fact that she is currently planning to establish residency in another country. She is currently in that other country, but cannot afford to have the operation there. Since she is still an American citizen, an alternative she is considering is to temporarily move back here where, due to her circumstances she will be eligible for Medicaid, which will pay for the surgery. She would make the permanent move overseas once she recovers.

A more accurate statement would be: “to temporarily move back here where American taxpayers would fund her operation, after which she would move overseas.”

A still more accurate statement would be: “to temporarily move back here where you and I would pay for her operation, thus enabling her to move overseas.”

As one who promotes and encourages personal responsibility, I have a problem with this. We give the State the power to take our money and give it to someone else (or to pay for services on their behalf). Is it “right” that the State will take our money to pay for such services on behalf of one who will then move (permanently) to another country?

Your thoughts?

[NB: I would prefer not to discuss the whole issue of Medicaid (and other such mechanisms) paying the cost of health care for persons here illegally; I understand that the issues are related, but I’d really like to focus on this specific situation.]

Post-Christmas Carnivals

For an interesting look at the medblogosphere, Grand Rounds is up at The Health Care Blog. Host Matthew Holt has a slew of great links. Two of our favorite MedBloggers, Elisa of Healthy Concerns and Kate of Health Policy, have interesting articles.

The Carnival of the Capitalists is hosted this week by Josh Cohen of Multiple Mentality.

And the Mighty Bargain Hunter serves up the Carnival of Personal Finance.

A Taxing Post...

Joe at Roth & Co has a multi-part series on year-end tax planning.

Important, useful information.

Buy & Sell, Part 2

In Part 1, we saw the consequences of a business failing to plan for the demise of one of its owners. In Part 2, we’ll discuss why properly funded Buy-Sell Agreements (BSA’s) can be valuable tools to ensure the continuation of a business in similar circumstances.

The problem arises because the needs and goals of the heirs (typically family) of the deceased owner aren’t necessarily (or even usually) shared by the surviving owner or owners. The heirs want the maximum amount of dollars for their shares in the business, a prompt estate settlement, and an end to their anxiety about potential creditors. And, they’d like to settle the issue of the business’ value for estate taxes.

On the other hand, the surviving owners would like to minimize their costs for transfer of ownership, while moving that transfer along as quickly as possible. Usually, they also put a premium on regaining full control of the business, free of (often meddlesome) family who have no experience in it.

The challenge is that, absent some formal, written contract that spells out and addresses each of these concerns, neither party gets their wishes, and the business often dies, too.

The first part of the solution is a written agreement which provides for an orderly transfer of the business at a mutually predetermined price, a method of valuing the business that will satisfy the IRS, and stability for the business, its staff and its creditors. Obviously, it’s far more effective for this to be in place beforehand.

There are two basic “flavors” of BSA: Entity Plans and Cross-Purchase Plans. Each business must determine which of these is most appropriate for itself (click on graphic to enlarge):
 Once an agreement has been produced (with the help of the attorney and the accountant), it’s necessary to fund it. Why? Well, here’s the thing: all the best intentions aside, just because there is a mechanism (the BSA) in place to facilitate an orderly transition, if there’s no way for the surviving owners (or the business itself) to pay the transition costs, then the whole exercise was a waste of time.

There are several ways to fund a BSA. The ideal solution would be relatively inexpensive, easy to administer, and wouldn’t interfere with the day-to-day operations of the business. In general, there are four funding alternatives:

• Cash

• Loan(s)

• Installment

• Insurance

Let’s tackle these one at a time.

The problem with paying cash for the deceased's interests is that there’s no way to know when it’s going to be needed: what if an owner dies tomorrow? Such funds must be put aside after taxes, and thus become somewhat expensive. There’s an opportunity cost: money put aside to fund this potential future liability are unavailable for other business uses, such as expansion or capital improvements.

If a principal dies, how easy would it be for a company to access additional credit? Even if sufficient funds can be borrowed, the additional debt is another burden facing a wounded company.

“Installment” means paying the deceased owner’s heirs over time – maybe a long time. That may well be distasteful to the heirs, and it (like loans) can be a drag on the company’s ability to move forward.

Insurance, on the other hand, satisfies all three criteria: it is (generally) inexpensive, fairly easy to administer (just remember to pay the premiums on time), and provides an immediate infusion of cash to settle debts and allow the company to have a chance at recovery.

These two “legs” – a written agreement and the funding to enable it – may well have resulted in a different, better holiday season for our jewelers.

For more on Buy-Sell Agreements and related issues, I recommend Allison Consulting's estate and business law blog.

Carnival Time!

A distinctly "Saturday morning" feel to this week's entries:

♦ Host Warren Meyer of Coyote Blog (as in Wile E.) brings us the Carnival of the Capitalists. Be sure to check out his offbeat "advertisements."

♦ And the Carnival of Personal Finance is up at Political Calculations. Ironman presents this week's installment in a uniquely useful "dynamic table" format.

♦ And for the best of the Medblogosphere, be sure to stop in at Grand Rounds. This week's episode is at MedPundit. This one has a Dickensian feel to it.

From the Peanut Gallery...

One of our commenters took issue with us regarding what happens when a group health plan is disbanded (that is, goes away altogether). Rather than address this in the comments section, it seems more helpful to explain the ramifications as a separate post.

In my reply to the commenter, I said that if the group was cancelled, “COBRA (and/or state-mandated continuance) is not available.”

I should probably clarify that little nugget: "and/or state-mandated continuance."

In Ohio, we have a state law which we lovingly call "mini COBRA." In certain circumstances, an (ex-)employee may elect to continue their group cover for an additional six months. Obviously, if there is no longer a group plan in place, this option is not available; it was to this benefit that I referred.

Also under Ohio law (YMMV), most group plans must offer a "conversion" plan with no exclusion for pre-existing conditions. Unfortunately, these can be quite expensive, and offer minimal coverage. Still, they may well be “better than nothing.”

There is also a mechanism available through HIPAA (which, BTW, is not the same as “Hippa,” which is a Greek word referring to “Eve”) which allows an uninsurable person to access a state-mandated benefit plan. This, like the conversion plan, would cover pre-existing conditions, but with correspondingly higher premiums.

Interestingly, we covered this ground back in March, and I recommend that post to those interested in a case study of this method.

A Ray of Hope (Anthem vs Premier)?

UPDATE (12/22/05): Just received this announcement: "Anthem Blue Cross and Blue Shield has reached an agreement with Premier Health Partners in Dayton, effective January 1, 2006." I'll have a bit more on this shortly.

Maybe; according to this article in the Dayton Daily News, Anthem and Premier “are talking at length again after nearly a year — expressing guarded optimism about the outcome.”

What’s really interesting is that the DDN story is the only source for this information, which leads me to view it with some skepticism. That’s not to say that it couldn’t happen, but if substantive negotiations were taking place, one would expect to see multiple “leaks.” After all, these are the two largest players in the local health care market, and any forward movement in their tempestuous relationship would be newsworthy.

Of course, even if it is true, cautious optimism is in order:

“(F)rom the perspective of members, I'd hate to get somebody's hopes up," Anthem spokeswoman Kim Ashley warned. "We do not have a definitive, signed agreement."

No kidding.

On the other hand, Premier may want to reconsider reconsidering:

“Doctors say that Anthem…made an arbitrary change in company policy that means physicians are being underpaid for some services rendered.

The change…put into effect Nov. 1 is shortchanging doctors about $25 for each of certain types of office visits when additional services are provided to patients.”

According to the physicians, Anthem now "blends" (whatever that means) codes for different services in order to arrive at a lower reimbursement level. Anthem claims that this new method will actually increase how much they'll pay out.

I know which way I’d bet.

UPDATE (12/21/05): According to my Anthem sales rep, negotiation is ongoing. As noted above, however, there has been no resolution. Interesting.

Shopping for Info...

A survey by UICI, a health savings account provider, indicates that consumers will not "shop" for health care online. Why is this interesting, let alone important? Because one of the fundamental tenets of Consumer Driven Health Care (CDHC) is that the consumer, well, drives the healthcare decision making process. He’s supposed to be involved, interested, and willing to invest his time and efforts in learning as much as possible about the costs and consequences of those decisions.

According to UICI, when it comes to car shopping, for example, 56% of shoppers consult the web for pricing and availability. And 44% of folks looking for a new computer also use the web to research their options.

On the other hand, only 22% of consumers use the web to choose new doctors, and even fewer (12%) of hospital patients used the Web to compare hospitals. It certainly isn’t for lack of resources: many carriers have web tools, and a lot of providers have websites chock full of helpful information.

Only a little more than a third of internet users said they were even aware that information comparing prices and quality of doctors is available online. And about a third also they were aware that this type of information is available about hospitals online.

Frankly, that’s pathetic. And no, I’m not blaming the consumer (well, not completely, anyway). It seems to me that if carriers are going to continue to push CDHC, and they are, then they’re going to have to do a better job of educating consumers about the resources that are available. And, of course, agents (this one included) could stand to put in more effort on that front, as well.

Of course, if one purchases such a plan, then one has already agreed to take a more proactive role in the health care process. This means taking the initiative in researching treatment and provider options and, whenever possible, treatment costs. It would be nice, for example, if Aetna expanded its transparency program. It would be nicer still if other carriers implemented their own.

Makin' the Cut...

*** VOTING'S OVER ***

WooHoo! Thanks to our readers, InsureBlog is a Finalist (one of only 15!) in the 2005 Weblog Awards (Best of the Top 5001-6750). Thank You!

You can see the results here.

Thank you so much for your support!

Death of a Salesman (and his business)...

When Bob Gross, co-owner of a local jewelry store, dropped dead of a heart attack this past July, his business died with him. Sure, it took a while, several months, in fact, for the store to succumb, but succumb it did.

A buy-sell agreement, and the means to fund it, would have saved the business, and its employees would not now – at the height of the Christmas season – be looking for jobs instead of gifts.

Such an arrangement would also have meant that his friend and business partner would not be left out in the cold, either, with no store and few prospects. And it would have also made a difference for his widow and children, who face the holidays without their husband and father, and without the income and financial stability he provided.

"Bob just assumed I'd be Larry's partner and the business would go on," Mrs. Gross said. Instead, Gross's estate is moving through probate court and the shares will be divided among his wife and other heirs. "People don't know this is how it works," Mrs. Gross said. "They just assume."

Interestingly, this was no fly-by-night, cut-rate jewelry clearinghouse: "We're not a discount jewelers, our clients wouldn't stand for it," Jaffe said.

So presumably finances were not the reason that the business was left unprotected. We may never know the reason, but it doesn’t really matter; what matters is that this was a problem that had a simple and generally inexpensive solution, but for lack of foresight, was left untreated.

Buy-sell agreements are tools businesses use to ensure that there is a smooth transition should one of the owners die: an orderly transfer of ownership, a mutually agreed upon sales price and terms of sale, and stability for customers, staff and creditors.

Such agreements are especially important when dealing with closely held businesses like Messrs Gross and Jaffe owned. Had one been in place, and properly funded, this business need not have died with its owner.

How simple is it to put together a buy-sell agreement, and how does one fund it? Click for Part 2…

It's Carnival Time!

The Carnival of Personal Finance is up at Wealth Junkie.

And Rob of the Sama Blog hosts this week's Carnival of the Capitalists.

Both offer interesting posts that can help save you money (especially this time of year!).

For the best of medblogging, mosey on over to Grand Rounds, hosted this week at Corante. Be sure to check out Healthy Concern's take on new facelift technology.

The Game of Life...

Now takes even longer to play. But that’s a good thing.

Regarding our post about lower term insurance prices, commenter John F took us to task for missing one of the most important reasons for that cost reduction: life expectancy.

And he’s right; life insurance rates are based substantially on mortality tables, which tracks life expectancy among groups of people. In a recent study, the National Center for Health Statistics found that “(t)he US life expectancy has hit an all-time high at 77.6 years.” On the one hand, this will serve to exert downward pressure on life insurance rates, which makes purchasing life insurance easier to afford.

On the other hand, the same study found that “(h)alf of Americans in the 55-to-64 age group have high blood pressure, and two in five are obese.” Aside from the obvious health risks these two problems pose, it also means that, while life insurance prices may fall, qualifying for these less expensive plans could be more difficult. Since the margins on term insurance products tend to be razor-thin, you can bet that underwriting (that is, the process by which an insurer determines how medically fit you are, and thus your actual rate, not necessarily what the agent quoted) will become correspondingly more stringent.

There’s another potential problem lying in wait, as well: as a group, Americans are living longer, and that’s good. But that also means that high ticket items like Social Security and Medicare will be paying out more dollars for more seasoned citizens. And it also means that the 30 year term insurance policy you bought at age 45 may not last the rest of your life; what happens to your plans on your 76th birthday?

More food for thought.

Coming to Terms...

While health insurance costs continue to climb, there is good news on the life insurance front: term insurance rates continue their downward trend, which can be good news for consumers.

According to an article in Investment News “insurers are cutting the cost of term life policies as a result of heightened competition and streamlined sales processes.”

One reason for this is that, as a whole, sales of life insurance are down across the industry. One measure of this is “policy count;” that is, the total number of life policies written in a given year, irrespective of the face amounts or premiums. Compounding the problem is that average policy size is also much lower than one would expect.

Since the law of supply and demand applies no less to the life insurance business than any other, it stands to reason that insurers would like to make buying life insurance more attractive.

Of course, lower price is one way. But equally important is the purchase process itself: much like obtaining a mortgage, buying insurance can mean a daunting array of paperwork, and a seemingly endless underwriting process. To minimize both, carriers have finally come into the 20th century (that’s not a typo): electronic applications and fewer health questions help to speed things along.

Another trend is worksite marketing: used to be, the blue collar market was served by companies that sold “industrial” policies. These were low face amount, inexpensive plan paid weekly to agents who came by one’s house to “collect the debit.” Of course, those days are gone, but the folks who were well-served by that system are not completely on their own. More and more carriers sell more standardized plans that can be deducted directly from one’s wages, much like the old weekly plans.

In any case, term life insurance really is getting better (at least for now).

Early December Carnivals

• The Carnival of Personal Finance is up at Frugal Underground. This week's hostess, Sarah, chose an interesting format: by word count. And Believe It or Not, I'm not the wordiest!

• Adam at Techronization hosts this week's Carnival of the Capitalists. Be sure to check out Roth & Co's item on S Corporations (What's a Family?); you might be surprised by the definition.

• And Grand Rounds is hosted this week by Dr Charles. He's got a cool Norman Rockwell theme going on.

IVF in the News (Again)...

Back in October we took a pretty extensive look at In Vitro Fertilization (IVF) and insurance. The underlying premise of that article was that “IVF fails to meet the threshold of “medical necessity,” ergo it should not be covered by insurance.”

Apparently, most employers (and their group carriers) must agree with that assessment, because

"Only 25% of employers offer any type of infertility treatment, and even some of that is not very comprehensive. They might just cover the diagnosis of a disease," says Julie Salz Greenstein, government relations director for Resolve, a national infertility advocacy group.

Ms Greenstein opines that “(w)e believe it's the right of people to try to build their families." Well, of course she – and her colleagues – are free to believe anything they’d like; the problem arises only because she apparently believes that it is also her right to force others to help pay for her treatment.

What bothers me about this attitude is that proponents of lifestyle-related benefits, whether they be for IVF or Rogaine, seem not to understand the underlying economic factors at work. For example, Connecticut recently became the 12th state to require coverage for IVF. This means that policyholders in Connecticut will now subsidize the cost of this expensive treatment, whether or not they want to do so. This effectively means that insureds will now see rates increase due to treatment for a lifestyle choice, not a medically necessity. Doesn’t seem quite fair.

Why, for example, would we cover IVF but not trans-gender or bariatric surgery? Both of these are lifestyle issues, as well, so why is it fair to exclude them? Each new covered benefit results in higher premiums. Is it Ms Greenstein’s contention that health insurance isn’t expensive enough? That doesn’t seem reasonable, or likely. But it is the end result of mandating coverage for treatments that are not medically necessary.

Interesting Links for the Weekend...

• We've talked about "chutzpah" before, but Joe Kristan at Roth & Co writes about a fellow who not only defrauded the California Medicare system (to the tune of $40 million), but decided he didn't need to pay taxes on his ill-gotten gains, either.

• In my previous two posts, we talked about overweight Americans. Well, Elisa at HealthyConcerns has a disturbing post about the other side of that coin, anorexia.

• And David at the Health Business Blog tells us about the latest in "consumer driven" care: some insurers are apparently using graphic videos to discourage consumers from (over?) utilizing certain services.

Sensing a Theme...

In my last post, we looked at the importance of exercise in maintaining good health. But why is this so important, and why are we talking about this on an insurance blog?

Well, one aspect of insurance has to do with mortality and life expectancy, both of which are directly affected by one’s general health:

“Americans could see a decline in life expectancy if they don't start making healthy decisions, two speakers said at (a recent) University of Rhode Island Honors Colloquium.”

Now, I’m not normally a “chicken little” kind of guy, but this is important information, and it affects my clients, their families, and all ther kind folks who frequent this blog. One of the doctors at the conference warned that “(f)or the first time in history this generation of children may not live as long as their parents because of lifestyle choices.”

This is of a piece with an article brought to my attention by my colleague, Bob Vineyard: “Fatter rear ends are causing many drug injections to miss their mark, requiring longer needles to reach buttock muscle.” Regular, standard sized needles are often too short to reach past the layers of fatty tissues, and allow the needed medications to get into the bloodstream. This is actually a double-whammy, because it can lead to irritation and even infections. My only real quibble with this study is that it was limited to a very small test group: 25 men and an equal number of women. I’d prefer to see a larger sample size [ ed: you just had to say that, didn’t you?].

In any case, the population that may be most in danger is our children. More and more young people are overweight, which has led to an increase in diabetes. From an insurance perspective, this makes it more difficult for folks to find affordable coverage later, if they can find it at all.

Get Fit, Save Money...

Having just devoured the Thanksgiving turkey, and looking forward to holiday shopping, many of us are looking at our waistlines, cholesterol levels, and wallets, wondering: what to do now?

Sure, joining a health club is a great idea – exercise, swimming, nutrition education – but who has the time and, just as critical, who has the money?

Believe it or not, now’s a great time to gym shop, you just need to do your homework. Many fitness clubs offer great incentives this time of year, it‘s a matter of tracking them down.

In a recent article for Market Watch, Kristen Gerencher tells us that “shopping for a gym during the last weeks of the year can yield surprising discounts -- if you know how to ask. At Curves International, the company is pushing franchisees to waive their monthly fees through the end of the year for women who sign up for a year's contract before January.”

Saving money’s not the only reason to consider joining a fitness club, though; "(d)uring the holidays when everyone's stressed out and pressed for time, if you're working out you'll sleep better, have more energy."

On the other hand, after Christmas sales work as well in the health club industry as the toy store. The folks at Gold’s Gym offer their best deals in January, as consumers look for ways to implement those New Year’s resolutions. According to Gold’s spokesman Dave Reiseman, "January is to the gym business what December is to the retail business.”

In fact, even if the club you’d like to join isn’t officially offering any deals, it never hurts to ask for one, anyway. By negotiating, you may be able to save the equivalent of a month’s – or even several months’ – fees.

Another favorite club gambit is the ‘bring a friend’ sale. For example, Bally’s pre-Christas offer is a free one-year gift membership for a friend to anyone who signs up for a 3-year contract.

But saving money is only one benefit. According to the Archives of Internal Medicine, folks who get off the couch, and engage in moderate to high levels of physical activity, can add almost 4 years to their lives by delaying heart disease. And the Centers for Disease Control says that “(a)dults should get at least 30 minutes of moderately intense physical activity most days.” The benefits include not just weight loss, but also reduced risk of depression, osteoporosis, even arthritis.

And if the year-end (or year-beginning) deals at the health club still don’t fit your budget, they’re not the only game in town: according to the CDC, walking or biking, walking the dog, even gardening (next spring) can contribute to your good health.

More (Shameless) Self Promotion

Hot on the heels of the Weblog Awards is The 2005 Medical Weblog Awards.

The InsureBlog seems to be eligible in two categories: Best New Medical Weblog and/or Best Health Policies/Ethics Weblog. Either one is fine with your humble host.

Grand Rounds

This week's episode is hosted at Over My Med Body.

Given the study and work schedule of a 3rd year medical student, I'm really impressed with this week's Grand Rounds.

This Week In Finance...

■ The Carnival of Personal Finance is up at Financial Fruition. I like the simple, easy-to-follow format (maybe 'cuz I'm pretty simple, myself).

■ And Gill Blog hosts this week's Carnival of the Capitalists. Be sure to check out Roth & Co's entry about some of the hidden implications of the new tax bill, and perhaps bid on Joe's "tacks shelter".

A Healthy Date (Tree)...

It’s not every day that ancient plants can inspire our modern-day, disposable, get-it-quick society.

But scientists at the Natural Medicine Research Center (NMRC) in Jerusalem, have just the ticket:

“A sapling germinated earlier this year from a 2,000-year-old date palm seed is thriving, according to Israeli researchers who are cultivating the historic plant.”

The seeds were found more than 30 years ago, at the ancient site of Masada. Ironically, they were kept in a drawer, all but forgotten, for over 3 decades, before Dr Sarah Sallon, director of the NMRC, asked for a few. She planned to give them to a desert agricultural expert, to see if they could be “revived.”

This is a really fascinating story, of patience and science and a little biblical input, as well. For instance, in biblical times, dates were "were widely used for different kinds of diseases—cancers, TB [tuberculosis]—all kinds of problems."

A really interesting read. Recommended.

A healthy environment...

Elisa over at Healthy Concerns has an interesting post about the increased use of enviro-friendly medical supplies.

In the words of Johny Carson, I did not know that.

Shameless Self-Promotion

Nominations closed...

The folks over at WizBang have opened nominations for the 2005 Weblog Awards. There are, of course, many worthy blogs out there, but your humble correspondent wouldn't mind if folks nominate InsureBlog in, for example, the Best Business Blog category, or even Best of the Top 5001-6750. Or both.

I'm just sayin'.

Oh, if you have any questions about the Weblog Awards, here's the faq.

Happy Thanksgiving!

Light blogging ahead.

Have a great -- and safe! -- Thanksgiving.

Good (Insurance) News for Cancer Survivors

Not so very long ago, marking “yes” to the cancer question on a life or health insurance application meant an automatic decline. Well into the 90’s, in fact, it was exceedingly difficult for folks with a cancer history to find life insurance (and almost impossible to find health insurance).

But times, and the industry, have changed.

For one thing, diagnosis and treatment have both come a long way. Advanced screening technology and alternative medical treatments have opened up the market in a way not anticipated only a few years ago. Survivors are finding that it’s even possible to buy insurance at standard rates.

A recent article in the National Underwriter mentions one life insurance carrier which “will now offer individual life insurance at standard rates to many women over 40 who have early-stage (Stage 1) breast cancer, who have strong prospects of survival and who have no major health problems.”

There have always been life carriers who specialize in the “high risk” or “substandard” markets, and who have offered quality plans, at often less-than-competitive rates, or with waiting periods before full coverage takes effect (so-called “guaranteed issue” plans). Health carriers have been even more reluctant to offer cover; of course, this is a different risk, with the potential for multiple claims.

Historically, carriers have either declined cancer survivors outright, or placed such onerous additional premium requirements that plans were unaffordable. But in a nod to increased recovery rates, carriers are beginning to reassess how they price policies. For example, one trend is toward limiting how long these rate-ups (commonly called “flat extra’s”) remain in force. By automatically dropping off after a few (usually 2 to 3) years, they encourage folks to stick with the plan, and ultimately reward them for doing so by permanently reducing the premiums. Very much a win-win.

The health insurance side has also seen some improvement, although not as dramatic. Since this type of policy allows for potential repeat claims (as opposed to life insurance plans), underwriters tend to be more circumspect. Still, there seems to be an acknowledgement that at least some survivors can be underwritten. The more information an underwriter has, the more likely he (or she) is to take a serious look a survivor’s insurance application.

The message here is simple, really: if you’re a cancer survivor, don’t assume that you’re uninsurable. It’s at least worth trying.

UPDATE: Post on cost of treatment here, and more good life insurance news here.

Thanksgiving Week Grand Rounds

is up, hosted this week by Geena over at Codeblog. Grand Rounds offers posts from around the medblogosphere [ed: is that even a word?], including one that informs us that the number one cause of death in women is cardiovascular disease - not breast cancer.

Check it out.

Thanksgiving Week Carnivals

While you're waiting for that turkey to brine (you do brine your bird, right?), take a few moments to check out this week's Carnival of the Capitalists. Host Brian Gongol chose an easy to digest format for this installment.

At Frugal for Life, you can whet your appetite with this week's Carnival of Personal Finance. While you're there, check out Roth & Co's roast of a not-quite-legal "Lawman."

"Dead Peasant" Insurance is Dead

Joe Kristan over at Roth & Co informs us that so-called "Dead Peasant insurance" -- technically known as Corporate Owned Life Insurance (COLI) -- has been laid to rest under a new bill passed yesterday by the Senate.

You can catch the obit here.

The “A” in HSA

Health Savings Accounts include the ability to sock money away to pay for potential claims. And they enjoy a special tax advantage, to boot. I’ve been selling HSA’s (and they’re forerunner, MSA’s) since about 1992, and I’ve always been impressed at how consistent my clients have been in putting dollars in their accounts. I’ve also found it interesting that these accounts do grow every year, because – for the most part – my clients choose to leave the funds untouched.

So it was heartening to learn that they’re not alone:

“HSA Bank...announced its third-quarter account statistics, which indicate that most HSA Bank accountholders are saving at least a portion of their health savings account (HSA) funds.”

We know from previous posts that well over a million HSA’s have been purchased, and HSA Bank says that they've sold over 60,000 plans in 2005 alone. In fact, 9 out of 10 of their customers choose to contribute at least some money in their accounts. That’s over 55,000 folks last year alone, just at HSA Bank.

Another interesting factoid is that the average balance in these accounts is almost $1,600. If one assumes that most individuals choose the $2,000 deductible, that means a lot of folks who’ve got quite a nice cushion against a catastrophic claim. Of course, families would have a higher deductible still, but that $1,600 is a nice safety net even there.

It would be interesting to know the average income level (and net worth) of those folks who’ve set up accounts with HSA Bank. The article doesn’t disclose this information, but I wonder whether or not it would support my contention that it isn’t the very wealthy who are buying these plans.

I’ll post an update if/when this information becomes available.

Discount Plans Debunked...

An InsureBlog reader writes:
“If a person walks into a doctor's office without health insurance, they will pay more for their care than someone with insurance. That's because the insurance companies are big and powerful and can negotiate lower rates. If I ask for that rate for myself, I'd get laughed out of there.

So why don't all of the uninsured people band together into some sort of membership organization? Kind of like how AAA or AARP can negotiate lower rates for hotels. Neither is in the hotel business, but they have enough clout to get discounts.

Would this organization, which is not in the insurance business, be able to negotiate rates for its members? (The members could, of course, go somewhere else if an office refuses to negotiate. You would end up with "in club" and "out of club" providers.) Would this violate the contract doctors sign with insurer networks?

Of course, this would be a ridiculously huge undertaking. But is it theoretically possible?”

Here was my reply:

“Thanx for writing; I always appreciate fan-mail ;-)

Actually, what (I believe) you've proposed is neither random nor new. There are many "provider discount plans" on the market (e.g. CareEntree, etc) which purport to accomplish just what you've suggested.

For folks who are truly uninsurable (and they represent a very small fraction of those who are uninsured), such plans can be a big help, but they are not without drawbacks.

For example, every plan I've seen requires the member to pay the entire cost either upfront, or within a very short timeframe (10-30 days, max). For a relatively inexpensive procedure (setting a broken finger, for example) this would be no problem. But for a substantial claim (surgery, MRI, etc) how many folks have thousands of $$ in ready cash?

Another problem with such plans is that they are often sold by unscrupulous folks who gloss over the fact that it is NOT insurance, and so the consumer unwittingly believes that he is insured when, in fact, he is not.

Finally, in looking at such plans myself (in the event that I wanted to market one), I've noticed a large discrepancy in prices; some plans cost hundreds of $$ a year for what is, essentially, a modest service.

Have a great week, and feel free to drop me a line any time.”

The ostensible point of these plans is to encourage folks to seek medical attention, and in some way soften the financial hardship of doing so. Theoretically, this is admirable, but like so many such endeavors, this one is fraught with peril.

As I mentioned in my reply, such plans are often wrongly sold as alternatives to insurance, or even as insurance products (which they are not). This is dangerous because, as I told my correspondent, it may give the purchaser a false sense of security.

But there’s another, more insidious reason: because of HIPAA, folks going onto a group plan may qualify for a reduction in, or complete waiver of, the 12 month exclusion for pre-existing conditions. Individual major medical plans count as such creditable coverage, and in some states even short term medical plans do, as well. There is even (at least) one guaranteed issue medical plan which counts as creditable.

But these “discount” plans do not, and thus may leave the purchaser even worse off than before, out many hundreds of dollars in premiums, without creditable coverage.

There are better solutions.

This Week's Carnivals

Professor Jeff Cornwall host's this week's Carnival of The Capitalists over at the Belmont University Blog. It's based on a particularly clever theme: a university catalog.

And the Carnival of Personal Finance is posted over at Consumerism Comnmentary. The scheduled host apparently bailed, so kudos to "Flexo" for stepping in.

The best of MedBlogging, Grand Rounds, is now up over at Doc Shazam's place. If you read nothing else, do not miss "Kim's Letter" (but keep the tissues handy).

Transparency Revealed (Conclusion)

In Part 1, we introduced Dr Dexter Campinha-Bacote, Medical Director for Aetna, and one of the folks responsible for that company’s pilot transparency program. Today, we conclude InsureBlog’s exclusive interview, and offer some thoughts on the program's benefits, and potential shortcomings.

7) One of my readers is concerned with "glass pockets;" that is, consumers looking only (or primarily) for the lowest price on procedures without regard to provider credentialing or success rates.

According to Dr Campinha-Bacote, all of Aetna’s providers are Board certified, and Aetna conducts frequent member surveys to determine the level of satisfaction each provider enjoys. Of course, the company isn’t responsible for the decisions that its members ultimately make.

8) As a follow-up to the last question, what safeguards are in place to prevent “upcharging?” For example, an expectant couple looking for the lowest price on L&D may not factor in services like anesthesia vs going for natural birth.

The negotiated rates that one sees on the website include only those procedures that the doctor provides in his office, and of course exclude outside lab charges, etc. If and when the whole transparency phenomenon expands, then the other pieces will come into play.

For now, though, the idea is to keep things simple, and thus post only the limited number of procedures done in-office.

The doctor also told me that all the numbers available on the site are posted in real-time; that is, the rates are all current, not based on 6 month old data. To some extent, this should help mitigate “upticking,” although this is still a concern.

Dr Campinha-Bacote couldn’t have been more gracious, or open. This whole program is so new, though, that there are a number of unanswered questions, which will hopefully be addressed as the program matures and expands.

Other carriers are watching, too: I’ve noticed an uptick of my own, in terms of hits from carrier websites to my previous transparency posts, and by requests for links to this interview.

Which is not to say that the program is without warts. As Dr Siegrist notes in the comments section of Part 1, “(b)y listing prices only (with no context of the rationale behind prescribed tests and treatment), patients are left with only big dollar signs.” And I think this is a valid concern. To a great extent, the biggest challenge confronting more widespread “buy-in” to Consumer Driven Health Care (CDHC) is the willingness of the consumer to actually take an active role in determining courses of treatment. This means, for example, getting on the web (using Google, or WebMD, or even Intellihealth) and researching the pro’s and con’s of various treatment options.

In some ways, this is counter-intuitive: on the one hand, we need to trust that our physician will steer us in the right direction, and on the other hand, we need to be willing to ask hard questions to determine if that is, in fact the case.

There is no question that this can be a valuable tool for those covered by any qualified reimbursement plan (HSA/HRA/FSA). At the same time, there is a danger that folks will lose sight of what’s truly important: their health. Making health care decisions based solely on the price of a service seems to me to be a dangerous sort of game.

Still, I find it encouraging that this tool is available (albeit on a very limited basis). As we saw in the QwikHealth model, there is a demand for this kind of upfront information:

The other day, I had occasion to call on a new prospect, a pediatricic practice to which I was referred. As I walked in the front door, I noticed a sign on the receptionist’s window: “Yes, we do ear piercing.” At first, I smiled at the apparent incongruity. But then I realized that this was simply a way for that practice to let its patients know of another service they provide. All that was missing was “Just $9.95 an ear.”

That day may soon be coming.

Beam Me To Grand Rounds, Scotty!

Rita at The Nexus Blog hosts an out of this world Grand Rounds this week. It's definitely the "Real McCoy."

Financial Fun (Carnival Time)

The good folks over at Bargaineering (who knew that was a verb?) are hosting this week's episode of the Carnival of Personal Finance.

You'll find the current Carnival of the Capitalists over at Part Time Pundit's blog. And while you're there, be sure to check out Joe Kristan's timely advice on how to Harvest the Fall Tax Deductions.

Transparency Revealed...

INSUREBLOG EXCLUSIVE!

Recently, I had the opportunity to interview Dr Dexter Campinha-Bacote, Aetna Medical Director. He’s the “go to guy” for Aetna’s new transparency pilot program in the Cincinnati area. We covered a lot of ground, and he was quite forthcoming and comprehensive in his answers. If you’re the least bit interested in the future of CDHC, I think you’ll find the following to be quite helpful:

First, I asked Dr Campinha-Bacote to tell InsureBlog readers a little bit about himself and his position.

Dr Campinha-Bacote’s training was in Family Practice, and he’s been involved in Managed Care since 1992. With Aetna for about 5 ½ years now, he’s currently Medical Director for southwest Ohio, southeast Indiana, and all of Kentucky.

Could you tell InsureBlog readers a little about how Aetna came up with the idea, and a brief description of how it works?

Actually, this is a great example of consumer driven health care (CDHC): several employers (whose companies use Aetna for their group coverage) approached Aetna with their concern that, as more and more of their employees opted for high deductible plans (HDHP), they lacked vital information. These employers asked Aetna to develop tools that their employees could use to make “better informed decisions.” One of these tools is the pilot transparency program.

As Dr Campinha-Bacote explained it, Aetna lists the 25 most common services for each physician (provider) in the Cincinnati-area market, and the negotiated reimbursement rate for each service. This way, the patient (insured) knows ahead of time what a given service will cost.

These services will vary from provider to provider; after all, a vascular surgeon will offer different services than a pediatrician.

Aetna insureds can access this information a couple of ways: through Aetna’s web portal, Navigator or by phone. Interestingly, Dr Campinha-Bacote told me that one doesn’t have to be in a HDHP to access this info: any Aetna insured can pull it up. This is helpful for those who have co-insurance requirements as part of their plan.

What criteria will you use to judge whether or not to expand this program to other markets?

Dr Campinha-Bacote explained that Aetna will base that decision on three criteria:

a) Physicians response

b) Member feedback, and

c) Employer feedback

So far, the response has been very positive from all three.

A year or so ago, I was involved in a CE class with Humana’s Medical Director, who was touting what he called “Consumer-Centric Health Care;” Humana’s version of CDHC. His emphasis was on encouraging insureds to be more pro-active in their health care, especially with regard to researching options.

I discussed this with Dr Campinha-Bacote, who agreed, but felt that only a small percentage of insureds really take advantage of the wealth of knowledge available, but that he sees this changing. He gave an example of how this would work: a patient consults with his vascular surgeon, who recommends an invasive surgical procedure. In researching the procedure, the patient learns that there is also a non-invasive alternative. Armed with this information, he can now discuss treatment options more effectively, by asking why the physician recommended the invasive procedure over the non-invasive one.

In fact, Aetna now has an online service called IntelliHealth that’s available to the public.

Are you concerned that providers, knowing what their competitors are charging, will seek more aggressive increases in their own negotiated rates?

Frankly, I was surprised by the answer: while all of this information is available to Aetna insureds, it’s not available to the physicians themselves (unless, of course, their insurance is with Aetna). In other words, a given doc doesn’t have access to his competitors’ negotiated rates. Dr Campinha-Bacote went on to explain that, in this market, the rates tend to be pretty level across the board, so it’s not likely to be a bone of contention, anyway.

He also explained that another benefit to this transparency of rates is that the doctor has an opportunity to discuss his own value in the transaction: “why I’m worth more than Dr Smith.” After all, you get what you pay for.

Dr Campinha-Bacote added that another facet is that such decisions are not made “in isolation.” In other words, he anticipates that patients will discuss these issues with their family doctors, not just specialists.

We’ll conclude the interview, and I’ll offer some observations, in Part 2.

A special Thank You to Wendy Morphew of Aetna’s Media Relations Department, whose persistence and cooperation made this project possible.

Battling Cylons: Coda

Well, I received an email today from the Department of Insurance. It included the official reply from VID regarding my client’s recent “troubles.”

In their official reply, VID’s “Regulatory Advocate” restates the situation as it developed, and neatly inserts a CYA clause: “There is no indication that [VID] received this request on [stipulated date].” In other words, even though they’ve acknowledged that they erred in not processing the change which started the whole mess, and in fact acknowledged that error in writing, they apparently did so even though there was no indication that they were, in fact, at fault. And notice the weasel wording “there is no indication;” they don’t explicitly deny having received the change request, only that we offered no proof that they had. Of course, I don’t recall ever being asked for any such proof.

It does, however, get even better, because according to the Regulatory Advocate, once he reviewed the situation (nine days after it was submitted to VID by the Department of Insurance), he decided that my client was right, after all, and notified the appropriate department to reinstate Oriental Hut’s coverage because “the amount due to be reimbursed was more than the amount due for the October premiums.” Nice, and it only took him an extra 9 days to determine this.

But it gets even better.

Imagine his surprise when he learned that, shortly before he (allegedly) called for reinstatement, my client had indeed called in the payment, thus obviating the need for this Regulatory Advocate to have done anything in the first place. If you find this all confusing, you’re not alone. I’m also a bit flummoxed by the idea that a carrier can make a mistake and yet my client faces potential financial ruin, and there’s precious little that can be done about it. In reading the final report, I also noticed something else that was missing:

A simple apology.

As it is, I answered the DOI’s email, thanking the Claims Specialist for her help, and posing two additional questions:

It appears that not only did [VID] err in how they applied the credits, but that [my client] actually owed no premium for October, yet was cancelled anyway. Apparently, [VID] will face no consequences for this. Is that correct?

It also appears that [VID]'s procedure for reinstatement looks a lot like extortion: "we made a mistake, but you must follow our rules in resolving it, meantime you have no coverage." Is this acceptable insofar as the DOI is concerned?

In her response, the Claims Specialist explained that her role is “to make the consumer "whole", if there is a violation of our insurance statutes or the insured's contract. As an administrative agency, our legal authority is limited to ensuring that [the] insurance company abide by the consumer's insurance contract with them, and with our Ohio insurance statutes.”

Which is a roundabout way of saying “hey, it’s in the contract, and they haven’t actually killed anyone, so deal with it.”

She then deftly sidestepped the whole issue by explaining that “(o)ur Market Conduct Division tracks repeated "errors" or statue violations.” Ahah! It’s someone else’s problem! Good to know that.

If you detect a drop of bitterness in this post, it’s because the underlying issue – company makes a mistake, insured pays the price – has not been addressed, or resolved.

Maybe next time…

Marcus Welby meets Jiffy Lube

We’ve discussed medical care alternatives before, but – as Emeril would say – this idea “kicks it up a notch:”

In a little strip mall in San Mateo, California, nestled “between a UPS store and a hair salon” is a new type of doctor’s office.

“A large banner hangs across the top of the entrance, advertising doctor visits for $39. Another sign encourages passersby to "Get your flu shot now!"

The office itself is as much coffee shop as medical center: prices for various services and procedures are prominently displayed above a reception desk, and there are even “packages” of related health care services available for one’s convenience.

It’s apparently first in the nation to implement this model. The San Mateo location “is [their] prototype store and [they] hope to roll it out to many locations.”

Called QwikHealth, the Burlingame, CA based company is the brainchild of entrepreneur David Mandelkern. Mr. Mandelkern looked at the millions of uninsured folks clamoring for medical attention, and saw a business opportunity. In addition to serving as a primary care provider for these folks, the convenience of a “drop in” medical service is appealing to insured people who need (or just want) quick service.

QwikHealth offers a panoply of services at relatively low rates because there’s no 3rd party (i.e. insurance) involved; it’s a strictly cash business. That helps cut down both overhead and wait time for payment, and keeps things simple, as well.

Of course, California itself is home to a lot of, shall we say “undocumented” workers, who don’t have insurance. Such a facility would appeal to that population for a number of reasons, not the least of which would be that since there’s no insurance, there’s probably not a lot of other personally identifiable information changing hands, either.

Regardless, the concept seems sound, and it will be interesting to see if Mr. Mandelkern can transfer it to other areas. Or, perhaps some other forward-thinking business critter will capitalize on it.

I’m actually pretty impressed with the idea: it is, after all, the ultimate in transparency. One area of concern, however, is quality of care. Typically, network providers are subject to multiple layers of quality control, which seem to be absent in this model. On the other hand, one gets what one pays for.

UPDATE: In a related post, Health Business Blog has an item on "TelaDoc, which provides telephone consults to patients 24x7." Interesting read.

Of Interest...

This week's installment of Grand Rounds may be found at KidneyNotes, a blog hosted by a nephrologist.

And if you either own an HSA, or are considering one, Joe Kristan at Roth & Co has the latest info on the 2006 contribution limits.

Flu Shot FYI

With winter (and flu season) quickly approaching, here's an important resource for you and those you care about:

A new website, FluCentral, has a nationwide flu-shot locator where one can search for dates, times and locations of vaccinations.

There's also an interactive map that sends out e-mail alerts about the spread of influenza in one's area, and medical articles about the flu.

Recommended.

Goin' to the Carnival!

This week's edition of the Carnival of Personal Finance is up at WealthyWeb.

And TriplePundit hosts the Carnival of the Capitalists.

Battling the Cylons...(BUMPED)

Believe it or not, I’m actually a pretty reasonable guy. Sure, I like to spend quality time yelling at insurance companies, and I don’t mind tilting at the occasional windmill of carrier “customer service” now and then.

But this is ridiculous:

Oriental Hut is a local restaurant that has been a client for many, many years. And they’ve had the same group carrier, VID, for almost three (which is quite remarkable in this market). Last Spring, one of their employees added her husband to the plan. Within two weeks, she learned that his premium would be almost $1000, and she called me to take him off because they couldn't afford that (yes, she should probably have called first to see what his rate would be, but she didn't; water under the bridge). In any case, I asked her to fax me the request, and we would have him taken off.

I faxed the request to the carrier, and presumed that all was taken care of; I never heard back from Oriental Hut that there was a problem until early September. Apparently, VID never took the husband off the policy, and had been charging the group for him all along. The employer told me this in early September, and I contacted our service rep to have it fixed. It should be noted that the employer handled it as he saw fit, which is to say, in a logical manner. Logic and insurance rarely coexist peacefully.

The employer simply deducted the amount that the (uninsured) husband was being charged, assuming that eventually VID would figure it out.

He was only partially correct.

In early September, the employer told me that the husband still hadn’t been taken off the group. I contacted our service rep, and within a week or so had confirmation that everything was now fine: he was cancelled as if he’d never been on it in the first place.

Early this month (October), the employer received a letter from VID confirming that they (VID) had, in fact, made a mistake; it basically reiterated what I had been told by email.

Case closed, right?

Don’t be silly: this is insurance we’re talking about.

Two days ago, the client received a cancellation letter from VID, informing him that the group was terminated for non-payment. Ooops.

Now, I had understood -- incorrectly, as it turns out -- that VID was charging for the husband’s May/June premium (one month), and that it was this $1000 that was in dispute. This was not correct: they were charging all the way through for him, a total of about $6,000. Their position is that, even though the husband was ultimately cancelled back to the original effective date, Oriental Hut should have been deducting the premium from his wife’s paycheck and forwarding said sum to them. They won’t reinstate the plan unless and until they receive that $6,000, which, of course, the employer has never collected. They will then reimburse that amount as a credit on the November invoice.

So, their position is: "we made a mistake, you're cancelled anyway, pay us $6,000 now to reinstate coverage, and we'll give it back to you in a few weeks."

Riiiiight.

As one can imagine, I’ve spent a great deal of the past 24 hours trying – in vain – to get VID to at least negotiate a more reasonable amount. They remain intransigent. I enlisted the help of my service rep, and eventually got as far up the corporate “food chain” as I could, all to no avail.

So, I played the only card I had left, which is the power of the gummint: I called the Department of Insurance, and was able to talk my way into skipping the on-line electronic form and directly to a specialist. The employer had to call her to grant me permission to act on his behalf, and I have submitted all the relevant details to her.

We now play wait and see…

Updates as warranted.

UPDATE 1 (Thursday 10/20): The plot thickens. The Claims Specialist at the DOI has received my email, and has started working on the case. OTOH, not a peep from the VID "supervisor," despite 3 voice mails. What to do?

As I pondered this dilemna, a fax comes in from the owner of Oriental Hut: another letter from VID, dated the 13th, indicating a balance due of only $1,700. As we recall from early math classes, $1,700 is less than $6,000, so this is a good thing.

Trouble is, I no longer trust the carrier, and neither does my client. So, I call VID to see what they say today. Ooops, still showing the $6,000.

So, a follow-up letter to the DOI Claims Specialist, including the new $1,700 balance letter, and the conclusion that we have now entered the realm of "bad faith." Back to wait and see...

UPDATE 2 (FRIDAY 10/21 AM): Promising developments. Late yesterday afternoon, the business owner indicated that he would be willing, for the sake of his employees, to capitulate on the $6,000. However, neither of us trusts the insurance company to reimburse those funds as promised. Hence, a quandary. The owner suggested that a letter from VID (confirming that once the funds were received the plan would be reinstated, and that the relevant funds would then be reimbursed/ credited on the November bill) would be acceptable.

I called my service rep with this proposal, and this morning received a fax that was about 75% of what we requested; that is, they would reinstate, and would reimburse, but indicated that this could be on either the November or December bill. My feeling is that if they can put it off til December, they will put it off to December, but it’s not my call. I got the owner’s voice mail, and left a message bringing him up to date. Then, back to my service rep requesting that VID tighten up the letter to specifically say November.

And that seemed to work: they agreed to the November reimbursement, but suggested that we hold a conference call between the 4 parties (the owner, my sales rep, the carrier’s billing rep and me) to make sure that we are all on the same page. The Good Lord willin’ and the creek don’t rise, this should take place early this afternoon, and the matter resolved by late this afternoon.

Well, sorta:

Two issues remain hovering in the background. First, the owner is of the opinion (and perhaps rightly so) that he and his employees should be reimbursed for the 4-5 days that they were without coverage while all of this was going on. I’m inclined to agree with him, but this seems to me a secondary issue that should be addressed after we have the group reinstated.

The other issue is that, even though we continue to negotiate an amicable resolution with VID, the Department of Insurance is “hot on the case,” and has opened its own investigation. Even assuming that the parties reach a satisfactory resolution, I’m not sure that we can “call off the dogs;” and to be perfectly frank, I’m not so sure that we should. After all, even if (when!) we resolve the reinstatement issue, the fact remains that this whole situation should have never reached this point in the first place. And the fact that we now have so many different written claims regarding how much is owed indicates a real problem at VID. There is justice to be served here, as well.

UPDATE 3 (FRIDAY 10/21 PM): No closure, yet. After a 1½ hour conference call (see above), it was finally determined that we could all agree at how unfair and unreasonable the situation was, but reinstatement would still take $6,000 and no letter would be forthcoming.

After the call, I spoke privately with the owner, who is seriously considering just letting the cancellation go through, and finding other coverage. I did remind him that this would be easier said than done [the subject, perhaps, of another post], and he indicated that he would consult with his employees about whether or not he should accept VID’s terms.

To sum up, the owner is willing to part with the $6,000, in return for a letter which would simple say “We accept your $6,000 and your group is reinstated. On the November bill we will refund to you the credits to which you are entitled.” Notice, the only reference to actual dollars is the premium. This seems an innocuous enough statement, and indeed is simply a reduction to writing of that to which VID verbally agreed.

Of course, I was disappointed: I had really expected and hoped for closure before the weekend. I mentioned my disappointment to a colleague, who opined “Henry, you’re trying to get this done from the bottom up. Why don’t you start at the top, instead?”

Excellent advice!

So, I googled for the company headquarters and explained my purpose, eventually landing at the desk of a very professional-sounding young woman. She was understandably reluctant to write such a letter until she had investigated the circumstances, and asked me to fax her what we had so far. She is also familiar with the claims investigator from the DOI, which may or may not be important.

And so it goes.

UPDATE 4 (THURSDAY 10/27 PM): Know when to fold 'em. Neither the "executive level" woman at VID nor the Claims Specialist at the DOI have returned repeated calls over the past few days, and the meter's running out. Ostensibly, the owner has until midnight on the 31st to make the payment, but realistically he must do so in the next 24 hours.

And since he just asked me for the hot-line number to make payments by phone, it appears that that is the course he has chosen.

UPDATE 5 (FRIDAY 10/28 PM): Paid the Piper. Well, the owner called in the payment, thereby obtaining some measure of closure. On the whole, I agree that it was the right thing -- or perhaps just the least wrong thing -- for him to do.

Now, we await the resolution of several loose ends:

First, will he receive the credits due him on the November premium notice?

Second, will we hear from the VID contact person?

Third, what (if anything) will the Department of Insurance do now?