Stoopid Client Tricks #928

Perhaps the greatest compliment one can pay an insurance agent (or any salesperson, really) is the referral: telling your friends, co-workers or relatives what a great job your agent has done for you. If there's anything that tops this, it might be when one agent refers a case to another, as if to say "hey, this guy may do an even better job for you than I can."

It's quite heady, really, to be the recipient of such largesse, and I am pleased when this happens to (for?) me.

Most of the time.

Recently, a fellow agent (who I've had in some of my CE classes over the years) had a difficult situation: a small group client, with whom he'd had a cordial and mutually beneficial relationship for many years, retired due to medical problems, and her daughter took over the family business. The daughter, a middle-aged woman whose primary employment is as a paralegal, and the agent butted heads, and they both agreed that a new agent would be just the ticket. Al [ed: not his real name] called me, and asked if I'd be interested in taking on the case. He gave me a little background, filled me in on the clients' current situation, and offered to do the introductions. I was flattered to be asked, and happy to take on a new client with a minimum of effort.

Or so I thought.

Briefly, this client had been with the same carrier for many years, and had for the past few been on a generic co-pay plan ($500 deductible, $20 office visits, prescription card; you know the drill). At the last renewal, Al and the client had agreed to change to a High Deductible Health Plan coupled with a Health Reimbursement Arrangement (HRA). Simple enough, right?

Well, no.

I met with the client this morning. Well, eventually. We had set a 9:30 appointment, and I arrived promptly, meeting with her second-in-command, an affable fellow who seemed genuinely interested in discussing what it was they wanted to accomplish. I explained some of the facts of (insurance) life to him, and made some suggestions. By 10:00, the new boss (we'll call her Elphaba) hadn't arrived, and I needed to confirm something with the carrier. So, I whipped out the old cell-phone, and called to ask a few questions. While I was thus engaged, in she breezed. I quickly rang off, and introductions were made. I asked a few questions, and she told me that she wanted her new plan set up in certain ways.

I should have known.

For one thing, this is a small company with some 15 employees, only 3 of whom were on the plan. All insurance carriers have participation requirements that dictate what percentage of employees must be covered; some are more stringent about enforcing these than others. Fortunately, the carrier here was one of the former. Still, they have certain rules and requirements. For example, she's just hired two new employees, and wishes to subsidize their premiums at a different (lower) level than those already on the plan. This can be accomplished by using classes, but the company has to be notified of such things. She argued, rather forcefully, that it was none of their business, and that she's not required to put anything of the sort in writing.

Did I mention that she's been a paralegal for over 30 years? Well, she mentioned it (more than once), as if this would magically induce the carrier to waive its requirements. I pointed out to her (nicely!) that her employment history, while certainly admirable, was irrelevant. She didn't seem to care for that.

She also wanted to self-administer the HRA. I explained that this was not a good idea: for one thing, was she familiar enough with HIPAA and Privacy Act requirements to handle such an endeavor? For another, the carrier itself offered a free such service, which included necessary plan documentation. That service might not have been flexible enough to meet all of her requirements, but certainly that would be a better choice than going it alone.

And she wanted to fund the HRA itself differently, based on when these new employees "came on board." When I explained that this is, to use industry jargon, a "no-no," she huffily explained that she was paying for the plan, and she could do anything she wanted. I agreed that, as American citizens, we are indeed free to do pretty much what we want, but doing illegal things generates consequences. She didn't like that one bit.

Can't say I blame her.

At that point, it was clear that we weren't going to be doing business together (I have enough stress dealing with recalcitrant carriers, I hardly need the additional aggravation of a stubborn, and yet clueless, client).

After I left, I called Al to thank him again for the referral, but to inform him that I wasn't going to be taking over that case after all. He sighed (more in resignation, I think, than surprise), and apologized for the apparent waste of my time. I told him firmly that he owed me no such apology: there was no way to know ahead of time that this would be the result. Elphaba and I might well have hit it off, and things might have been fine. That we didn't was no fault of his.

Plus, I got this great blog post out of it.

Full Disclosure...

No, not mine, but the health care and health insurance industries'. Part of the transparency efforts we champion so often here at IB has to do with pricing: how much does this procedure cost? What's the price of that MRI? Is the generic really the best deal?

One problem consumers have is that there's a basic disconnect in how much they are charged for a given service as opposed to how much the insurance company allows, and how much they actually pay. Anyone who's seen an EOB (Explanation of Benefits) form knows that what the provider initially charge has little to do with how much they ultimately collect (from the insured and the carrier).

We've talked about various insurers' programs before: Aetna's initial pilot program in Cincinnati, Blue Cross of Minnesota's HealthCare Facts efforts come immediately to mind. A new survey by PNC Financial Services Group found that there is widespread support for such information:

"A majority of consumers (83 percent), hospitals (77 percent) and insurance executives (60 percent) responded that insurance companies should disclose what they reimburse for medical services."

They surveyed 1,000 consumers, as well as 150 hospital executives and 50 health insurance company executives. Granted, this isn't a huge sample, but it certainly indicates a growing trend that both industries are going to have to address, apparently sooner rather than later.

On the one hand, there's been precious little evidence that consumers are clamoring for this in great numbers: we seem to be more interested in our own out-of-pocket than the total cost of services received. Still, well over half of the consumers in that survey indicated that knowing how much a given procedure or treatment would cost would affect their ultimate buying decision.

And it is a buying decision: we purchase health care, not simply receive it.

And hear this, Medicare administrators and health insurance exec's: almost 8 in 10 of those consumers would like to see a break-out of how much of each bill goes to administrative costs as opposed to clinical care.

Ka-Ching!

And now, a word from our Sponsor...

Astute IB readers may have noticed an addition to the sidebar.

For our first two years, I made the conscious decision not to accept advertising. For one thing, we didn't really need it; IB isn't designed to be a profit center [ed: obviously!]. For another, I wanted to decisively avoid even the appearance of a conflict of interest. We tend to skewer pretty much every party to the insurance contract -- carriers, providers, insureds and agents -- and I wanted to make certain that those efforts wouldn't be compromised.

So why now?

Again, a pair of reasons: one, I'd really like to upgrade some of our tools (SiteMeter, etc), and perhaps move to a non-Blogger platform. The second is that Home Town Quotes is a lead generation program for agents (not necessarily us, BTW) but not affiliated with any one carrier or product, thus avoiding the conflict of interest dilemna.

Thank you to all of our readers, whom I respect and appreciate more than words can say.

Cavalcade of Risk #22 is up...

This week's start-studded edition is available now at The Sentinel Effect. Richard's collected almost 20 (!) terrific risk-related posts.

But who's the "really smart (and not bad-looking) guy at The Sentinel Effect?"

Remember, though, you don't have to be smart or good-looking to host a Cav. Just drop us a line.

Light at the End of the Tunnel?

Last month, we had a brief item on efforts to have Holocaust-related life insurance benefits paid out. Today comes word from Washington that Rep. Ileana Ros-Lehtinen (R-FL) "is filing legislation that would give untold victims of Nazi concentration camps a legal right to sue European insurers in U.S. courts."

This is important for a number of reasons, not the least of which is that it would lend some powerful cred to the claimants' cause. If the Congress of the United States has a stake in the outcome (as it would if the legislation passes), then this will be a powerful tool for those who are fighting to see justice done.

The problem is that the insurers, perhaps justifiably, require death certificates in order to approve the claims. Yet much like those who perished in the World Trade Center tragedy, producing such paperwork is problematic. It's not like those who ran the death camps took the time to fill out death certificates so that families could someday collect on life insurance policies.

There's a potential problem here that may make passage of the bill difficult: such legislation would conflict with the President's primacy in handling foreign policy. We're already seeing Congress grappling with the issue vis Iraq, and members may be reluctant to wage a similar battle for such a small constituency.

Still, the cause is just, so it will be interesting to watch how this plays out.

Not Exactly "Breaking News"

According to a new study published by the Kaiser Family Foundation, uninsured folks seem to receive less health care than those with insurance. The study goes on to say that those without insurance suffer worse outcomes than insured folks.

Why would this surprise anyone?

If anything, this is an indictment of the medical field: why are providers short-changing their patients? Isn't everyone entitled to the very best care?

Well, no:

Folks with no (or poor) credit must pay higher interest rates than those with excellent credit. In fact, many auto and home insurance carriers charge folks with poor credit higher premiums. Does this mean that folks with no or poor credit can't rent an apartment? No, of course not. And they can insure it, as well. They'll pay more, and get less. But that's how the system works.

Am I unsympathetic to the uninsured? Not really, but the the problem with studies like this one is that they do a poor job of educating the public because they misrepresent the issues.

For one thing, they treat the uninsured as a static population; it is not. Folks constantly move in and out of this demographic. So many people who were uninsured last year are insured this year, and vice-versa. Doesn't mean they won't get care, or that their lives are forever ruined. For the relatively few hard-core uninsured, there are a myriad of government programs to help them. But, as Mike's pointed out, that same system has done a poor job of taking care of them.

One sentence in that release stood out for me: "the uninsured were more likely to report not fully recovering and no longer being treated following an accident and roughly seven months after the initial health shock." Whose fault is that? I don't know, and I suspect that the authors were none to interested in following that up (or if they were, the answers may not have supported some inferences). There are clinics and other facilities available to pretty much everyone (at little or no cost), but there's no law that forces folks to follow up with their own care.

Patty & Cathy, Move Over

Okay, this really has nothing to do with insurance, but as the uncle of twins (both Eagle Scouts, BTW), I found this quite fascinating:

"Researchers discovered twins who are identical on their mom's side of the equation but share only half their genes from dad."

It appears that one egg was fertilized by two sperm cells, resulting in twins that are neither identical nor fraternal.

Or maybe both?

Interestingly, there don't seem to be any IVF issues at play here; they were apparently conceived "the old-fashioned way." There are some health issues: one has abnormal genitalia. On the other hand, they seem to be developing normally.

Hopefully, they'll continue to do so.

Oy, Canada! (Part #753)

One in an occasional series of PSA contributions to the debate on "Universal Health Care:"

Grand Rounds...

Dr Stuart Henochowicz, who blogs at Medviews, hosts a jam-packed edition of Grand Rounds. He's included over 3 dozen posts arranged into 3 helpful categories. My only quibble is that everything is kinda jammed together, so it's a bit of a challenge getting through.

It's worth the digging, though, to get to this thought-provoking item from Dr Domenico Savatta at Thoughts from a Robotic Surgeon. He reports (and comments) on pending legislation in South Carolina that would allow inmates to barter organs and marrow for reduced time in the slammer. Wow.

Blue Cross of California and the DMHC

By now, you've probably heard that Blue Cross of California is being fined $1 million for improperly rescinding membership in their health plans.

I'm busy writing a much longer post on the subject, but I thought I'd post links to the Department of Managed Health Care's report and the Response by Blue Cross. They make interesting reading and provide much more detail than I've seen in the press reports.

The Long Run...

The New York Times has a disturbing piece on the travails of those who've purchased Long Term Care insurance (LTCi), especially from Conseco. It's a look at the "dark underbelly" of the biz, and it's not flattering.

It's not necessarily all that helpful, either.

It starts with the sad story of Mary Rose Derks, a 65 year old widow who bought such a plan some 17 years ago. Over the years, she (and her family) have spent tens of thousands of dollars on premiums, only to have claim after claim denied. On the face of it, this is unconscionable, but perhaps there's more to the story than what the Gray Lady has deigned to share with us.

For one thing, Conseco has long had an industry reputation as, um, problematic. They got into this line with obviously underpriced products, and have had numerous rate increases over the years as a result. Contrast that with industry leaders like UNUM, Hancock and Genworth, all of which have relatively quiet rate histories, and substantially fewer claims issues.

What's the difference?

It goes unremarked in the NYT article, but there's one entity which fails to make an appearance in all 3,000 words: where's the agent?

This is an important, if egregious, omission for a number of reasons. First and foremost, the agent is the first-line defense against unscrupulous claims practices. How so? Simple: we're advocates for the insured. Independent agents, especially, fulfill that role, because we work for the client (we represent the carrier - a vast difference). It's our job to make sure that the carriers we represent have solid reputations (and yes, that's not a fool-proof guarantee against problems, but it's certainly insurance against them), and to dissuade our clients from looking at price alone.

That, by the way, is the most likely culprit here: again, the Newspaper of Record fails to enlighten us, but it's a sure bet that many (most?) of these folks bought on (low) price alone. That doesn't, of course, absolve the carriers from their responsibility, but it certainly must be a factor.

No doubt some of our commenters will take me to task for all the assumptions I've made here. To which I offer the following affirmative defense: if the NYT had done the full job, and not left so many critical questions unanswered, we'd know for sure, wouldn't we?

UPDATE: Eric Turkewitz has a slightly different take over at New York Personal Injury Law Blog.

Stoopid Client Tricks -- Basic Economics II

Last week I received a call from an old client. He has been paying for his son’s health insurance policy and wanted to cancel it. It seems that the son had gone in for his annual checkup and, with a $1500 deductible, the policy didn’t pay for all the lab tests.

A bit of background…This family was uninsured and had virtually no assets when their teenage son almost died from Leukemia. Medi-Cal (a.k.a. the taxpayers) picked up the tab for his treatment. He fully recovered, but needed to have periodic exams to make sure that it had not recurred. When the Dad contacted me, I found out that he had a small business. With California’s guaranteed issue rules, this meant that he was eligible to set up a group policy. I set one up and the family moved off the dole.

Four years later, the business went under. Since COBRA wasn’t an option and the son certainly wasn’t insurable, he took out a HIPAA policy. Premiums were around $230 per month for a $1500 deductible plan, Rx coverage, and $35 doctor office co-pays. No annual maximum and a $5 million lifetime maximum. Altogether not a bad policy.

It’s now been three years since the HIPAA policy was issued and the Dad wants to cancel it. Not only didn’t it pay for the lab tests (It did sharply discount them.), the family’s now into “herbal medicine”. Herbal Medicine? That’ll help big time if the leukemia returns. Luckily, he’s probably again eligible for Medi-Cal.
Besides telling him that he’s an idiot, what would you do?

An editorial comment: This illustrates why the "high deductible" solution, as proposed here in California, won't solve our health insurance crisis. Health insurance simply isn't perceived as insurance. It's evaluated with a mental cost / benefit calculation and if the cost is greater than the benefit, many people make the (entirely rational) decision to not buy it. Medi-Cal limits the downside. Now, if that didn't exist, and the cost of a recurrence of the Leukemia was charitable care or a probable death, do you think he would be dropping the policy?

La Plus Ca Change...

Please excuse my French. It's the start of a famous quote: The more things change, the more they stay the same.

Or, as Yogi Berra once observed: It's deja vu all over again.

Our readers may recall that not so long ago, Anthem and a local group of providers had a falling out, with predictably (at least by us) problematic results. Claims went unpaid, or reimbursed at drastically reduced levels, checks were cut to insureds instead of providers, there were daily diatribes in the local press (some pro-Anthem, others pro-Premier).

In short, it was ugly (if you don't believe me, just do a search here on "Premier").

Maybe there's something in the southwest Ohio air (or water), but it appears that an eerily similar brouhaha is shaping up in the Cincinnati market. There, the big player is the Cincinnati Health Alliance, comprising some 8 hospital networks and who knows how many physicians. Reading the press is weird: it sounds like a rerun of the Anthem-Premier grudge-match. The carrier claims that the Alliance's demands are out of reason, while the providers aver that Anthem is playing hard ball with their patients' care.

Sound familiar?

Fortunately, I have access to top secret materials (not really: these are flyers sent out by the providers, pleading their case) that may shed some light on the matter.

For Anthem's part, they claim that the Alliance is already overpaid, and that meeting their new demands would be unfair to premium payors and other providers.

Of course, we all know who really ends up with the short end, right?

Carnival Monday

The Carnival of The Capitalists is up at Political Calculations. Host Ironman is apparently a serious geek: he's got it laid out in an easy-to-navigate spreadsheet format, sortable and categorized. Very cool.

With April 15 peeking around the corner, Joe Kristan has a timely post on the AMT, and how congress is exploring ways to make a bad situation even worse.

Insurance Dispatch...

Graduations and job changes can make insurance a challenge. In this week's 'Dispatch, we take a look at how Short Term Medical plans can help out.

Check it out at Tusted.MD

Cavalcade #22: Submissions Due

Submissions for next week's CoR, hosted by Sentinal Effect, are due this coming Monday (the 26th).You can submit your (or someone else's!) risk-related post via:

Blog Carnival

or

Email

Please include:

■ Your blog's url

■ Your post's url

■ The trackback url (if applicable)

■ A (brief) summary

PS We're scheduling hosts for Early Summer '07, so don't wait too long to sign up!

Health Wonk Review

This week's HWR is hosted by medblog biggie Matthew Holt. Lots to choose from this time around, with some twenty posts, all with helpful context.

Educators are grappling with the idea of school vouchers, but until I saw this post from Jason Shafrin, I didn't know that there's a similar concept being bandied about for health insurance.

Stupid Admin Tricks

Well, why not? We've had Stupid Carrier and Stupid Client tricks, and now we have a new category.

So what brings this on?

One of my groups, which has been a client for almost 20 years, recently agreed with me that they should change from their generic co-pay plan to a high deductible plan coupled with an HRA (Health Reimbursement Arrangement). The primary benefits of this move were two-fold: the employer saved a great deal on the premium (one of those unfortunately-rare cases where the price differential was substantial), and could afford to generously fund the reimbursement account.

Regular IB readers know that we almost always redact the names of carriers when we discuss them. This is not so much for purposes of liability as it is that most carriers do stupid things, so that it is not really useful to identify which one in any given scenario. But what happened in this instance was so egregious that I feel compelled to actually name the entity involved.

The carrier we're using in this case owns an HRA administrative company, called Definity. Their offer is simple and attractive: if you write your case with the parent company, Definity will set up and administer your HRA for free. This can be significant: set-up fees alone can run into the hundreds of dollars, and on-going administrative services into the thousands.

Still, it is said that free advice is worth what you pay for it, and so appears to be the case with free HRA administrative services.

Of a Monday, I called the number I had, to get the ball rolling (arrange for paperwork and instructions to be sent to the client). But when I called the number I had been given (by the carrier), the "gentleman" who answered refused to identify either himself or his company. That was odd, so I asked if I had gotten the right number, was this Definity? Instead of answering this reasonably straight-forward question, he asked if I was a "member." Hunh?

So I asked again, had I connected with Definity. He replied that he couldn't tell me that (would he have had to kill me?) unless I confirmed that I was a member. I pointed out that he was being moronic, that all I wanted to know was whether or not I had dialed the correct number, and if this was indeed Definity. He refused to budge, so I asked for his supervisor. I was told that "Dan" was not going to be available to me, and I observed that this was idiotic. The "gentleman" objected to this characterization, and warned me that if I persisted, he would hang up. I replied "Too late!" and disconnected. Redialing the number, I was connected with a different person, who was apparently empowered to divulge the fact that this was, in fact, Definity, but that the number I had been given was for claims, not "sales," and that she couldn't connect me to that one.

At this point, it occurred to me that I had learned something quite valuable: if these folks were this incompetent when I'm trying to get a relatively simple plan set up, I can only imagine how poorly they would have managed the arrangement itself. Thankfully, I was able to save my client from such a fate by referring him to a local admin who charges a reasonable fee for his services. It's true: Definity's plan was free but, at that, it would have been far too expensive for my tastes.

Sick Time Blues...

According to a new poll, conducted by the Wall Street Journal and Harris Interactive, some 80% of us think it's a good idea to require our employers to give us paid sick days. To add insult to injury, almost as many claim that employers who take a pass on this unofficial tax will end up paying for it anyway.

Perhaps mitigating this entitlement mentality is the finding that about half of the 2,700 respondents understand that such a requirement would have adverse effects on their employers' business. So, there's some hope, after all.

What sparked this whole debate? Well, it seems that (no surprise) San Francisco now requires employers to grant paid sick time to their employees. And, certain members of Congress (who shall remain nameless) are looking to expand this nationally.

This would be in addition to exiting FMLA legislation, and could have some deleterious effects on our competitiveness in the global marketplace. And, of course, it could mean that a lot of Mom-and-Pop shops will find themselves shuttered, forced out of business by even more required benefits.

And this is, indeed, a "benefit:" many of us already have employer-subsidized health insurance, as well as short or long term disability cover. In effect, this kind of law would force employers to self-insure short- (or potentially long-) term disability claims. Since we know from previous excercises that employers don't pay premiums or taxes, such a mandate will lead to higher prices, fewer jobs, or both.

Kinda sickening, isn't it?

Ho Hum

What’s happening with the Massachusetts universal health plan these days? Oh, nothing. Or maybe everything. Perhaps your reaction will depend on - or even change - your mood.

"Mar. 20--Leaders of the business community and major health insurers called yesterday for the state to delay for two years, until July 2009, the requirement that all residents have health insurance that meets state standards."

"To spare thousands of insured residents from having to buy expensive upgrades, the letter also urges the Connector Authority to allow plans with no prescription drug coverage to meet minimum standards. It also asks that plans with dollar caps on lifetime coverage be included."

Dollar caps on lifetime coverage? Don’t I get junk mail offering that kind of plan every month or so??

Keep in mind the Massachusetts plan already includes a $2,000 deductible ($4,000 family).

As they say, read the whole thing.

Basic Economics

Let’s play a game. Roll time forward a bit…universal healthcare has arrived and you are now a Regional Head of the Healthcare System. You have an annual budget that you absolutely can’t exceed. The medical expenses for your region have been increasing and this year you’re going to exceed your budget. What do you cut? Medical staff? Drug expenditures? Or do you defer maintenance and maybe cut back on some housecleaning?

Want to see something interesting? Do a search on Google for “Canadian Hospitals filthy.” Then do the same thing for American hospitals filthy” and “NHS filthy.”

The Canadian search produces a stream of articles decrying deplorable conditions in their hospitals. The American search turns up articles on the VA system and, more interestingly, quite a few articles on the England’s National Health Service. At the time I ran the search, no civilian American hospital was mentioned on the first couple of pages of the search results. And the search on NHS produces an appalling number of hits.

According to the articles, both the NHS and the Canadian systems have one thing in common – both systems have cut back on cleaning as a way of saving money. In many cases, the cleaning staff has been replaced by subcontractors…I assume by the lowest bidder willing to agree to the contractual terms. Thing are so bad that, according to one of the articles, one dying patient left money in his will to clean the windows of his ward.

The result has been predictable… the incidence of secondary infections has increased to hundreds of thousands of cases per year. Antibiotic-resistant bacteria are flourishing (click on the findarticles.com link) and killing thousands of people annually. All in all, it sounds like many hospitals are equivalent to what you’d expect in a Dickensian novel.

Take a look at these articles:
Here
And here
And here
The environment that is described is truly disgusting.

Can this happen here?

Absolutely. It’s basic economics…a question of resource allocation. All it will take is the establishment of a centrally managed non-competitive health care system. When budgets are tight and somebody has to decide between purchasing medicine and having an “extra” janitor, guess which one will lose out. The lack of medicine will have an immediate measurable impact. The loss of a janitor? Well, I guess the other ones can just work a bit harder.

You disagree? Need another example? Look inside of one of California’s public school bathrooms. The same principle applies. With no extra money, sanitation isn’t high on the priority list…just ask my kids.

To be continued…

Carnival Monday!

The Lazy Man and Money blog hosts this week's Carnival of Personal Finance. It's an interesting and diverse compendium of over 4 dozen posts, neatly categorized and helpful annotated.

We've blogged on Identity Theft here at IB, most recently here, so I found Money Smart Life's post on the IDT risks hidden inside our copiers to be both timely, and chilling.

Insurance Dispatch...

In this week's 'Dispatch, I share my thoughts on the proposed HPV vaccine mandate.

For those IB readers who may be unfamiliar with the subject, check it out at Trusted.MD

BS Update

A couple of weeks ago, I expressed my doubts about mandated HPV vaccination. Among other things, I questioned the efficacy of such a program, as well as the wisdom of implementing it.

If anything, I may have underplayed the hand:

"A researcher who worked on a vaccine for the human papillomavirus is warning that it hasn't been tested on young girls, is "silly" for states to mandate the vaccination, and in a worst-case scenario could even increase cervical cancer rates."

Dartmouth professor Diane Harper actually worked on the study which formed the basis for the vaccine's approval, and notes that it was tested only on women aged 15 to 25. In fact, she believes that it's most helpful for those who are at least 18. It also appears that at least one member of the Centers for Disease Control's advisory committee on immunizations has reported that "while the vaccine may be helpful, it should not be mandatory."

What really brought it home for me, though is her assertion that "it's not been tested for effectiveness in younger girls, and administering the vaccine to girls as young as 9 may not even protect them at all. And, in the worst-case scenario, instead of serving to reduce the numbers of cervical cancers within 25 years, such a vaccination crusade actually could cause the numbers to go up." [NB: that link seems to work only sporadically]

She echoes my concern that we really don't know what the long-term effects of the vaccine will be. I generally try to err on the side of caution, which would initially seem to be "heck, go for the vaccine - after all, where's the harm?" But the risks here are great, and the downside is particularly troublesome.

It's nice to be validated.

Blues News You can Use...

Sometimes, a carrier can actually contribute something helpful to the on-going debate about health care and health insurance. For example, the Blue Cross Blue Shield Association has published its 2007 Medical Cost Reference Guide.

In it, you'll find some interesting (and enlightening) numbers:

■ In 2006, health care spending in the U.S. reached $2.2 trillion

■ The gummint continues to account for almost half the total costs, mostly through public programs like Medicare and Medicaid

■ Private health insurance accounts for about one-third of the total

■ About 2/3 of us are covered through commercial (private sector) insurance plans, mostly through our employers

There's lots more, if you're willing to dig a little.

Cavalcade of Risk #21 is up...

Rita Schwab hosts this stellar edition, with 32 excellent posts, in 7 "risky" categories.

We at IB have long argued that the cost of health care drives the cost of health insurance, and blogger biggie Arnold Kling's post really drives this home.

Grand Rounds...

Bertalan Meskó, blogging at ScienceRoll, hosts this weeks 'Rounds. Built around a Monthy Python theme (NOBODY expects the Monty Python Grand Rounds!), and rife with Python video, this remarkable effort (over 50 posts!) by a 4th year medical student is a lot of fun.

I've been meaning to link this for some time: You may recall our post on Baby Ashley, and especially the blogging efforts of Dream Mom. well, she's collaborated with a neonatal doc to produce a compelling blog mini-series about the travails of a newborn. Recommended.

GrannyScam Update

Regular IB readers may recall our story from last summer, wherein two elderly women bought insurance policies on the lives of homeless (and helpless) men, and then (allegedly) ruthlessly murdered them for the death benefits.

At the time, I was skeptical of the tale, because it seemed so far fetched (even in this day and age). Turns out, though, that truth is stranger than fiction:

"Checks and life insurance forms show that two women made millions from the deaths of two transient men they are accused of killing, a prosecutor said in a preliminary hearing Monday.

Helen Golay, 76, and Olga Rutterschmidt, 74, are accused of befriending the men, convincing them to sign the women's names on to their life insurance policies before drugging and running them over in secluded alleys."

Both women have pleaded "not guilty," and may soon face trial.

In an ironic twist, at least one of the issued policies was for accidental death only, and the insured (apparently) died of natural causes. The best laid plans...

Hoosier Health Care Provider?

Here at IB, one of our pet topics (and interests) is transparency in health care, about which we've written numerous times. Now comes word from Indiana that a group of Hoosier business-folks have glommed onto a new Federal initiative which seeks to offer more information about the quality of care offered by health care providers.

Under the guidance of HHS honcho Mike Leavitt, the US Department of Health and Human Services has launched an on-line project called Value-Driven Health Care (okay, so they're not so creative at names). The project's motto ("Transparency: Better Care Lower Cost") seems to sum up its mission nicely. At the website, consumers can learn about what transparency is all about (well, at least the gummint's take on it), and even find pilot programs that may help them in their search for quality health care with understandable prices.

Indiana Governor Mitch Daniels is a big fan, and recently signed an executive order agreeing to collect information on the quality of care provided to the state's 30,000 employees. The Indiana Health Information Exchange is touted by the HHS as a pilot project to initiate methods of reporting on quality of care. Presumably, this information will become available to the private sector, as well.

I've mentioned before that Transparency has been in its infancy...one supposes that it's now reached toddlerhood.

Carnival Monday...

The Carnival of Personal Finance is now up, hosted this week at The Sun's Financial Diary. Our host has accumulated 64 links, most with helpful commentary.

Our friend Jeffrey Strain, who blogs at Personal Finance Advice, has some tips on where not to hide your goodies.

And this week's Carnival of the Capitalists is available at Small Business Trends blog, where hostess Anita Campbell presents 28 interesting choices.

Nina at Queercents has an interesting post on "creative" marketing ideas. Something about the right hand, I believe.

P1K

Wow.

InsureBlog began life just a little over two years ago, and this marks our 1,000th post. One supposes that it would be appropriate to mention the latest on champagne and insurance, but alas, there seems to be a drought on the subject.

So I'll raise my own flute (metaphorically speaking) to my co-bloggers: Bob Vineyard, Bill Halper and Mike Feehan, and toast them for a job well done.

Here's to the next 1,000.

Insurance Dispatch...

This week's 'Dispatch covers a recent survey showing employers don't know how much they spend on disability benefits, and employees don't seem to care.

Check it out at Trusted.MD

Heads I win, Tails You Lose...

On the one hand, I'm used to seeing unlikely information coming out of the insurance industry, but this is kind of strange:

"U.S. individual life insurance sales rose 7 percent in new annualized premium in 2006, a pace unmatched since 2000, according to the quarterly survey by LIMRA International."

So who's (or what's) LIMRA, and why is this strange?

First things first:

LIMRA is the Life Insurance Marketing and Reseach Association (on whose Producer Panel I serve, along with thousands of my closest friends). They're kind of an industry-sponsored think-tank and research bureau. In a March 7, 2007 press release, LIMRA announced that the industry was breaking all kinds of production records. Well, not the industry so much as insurance agents.

Great!

Maybe.

The Medical Information Bureau (about which we've written before) has a somewhat different story:

"North American Application Activity for individually underwritten life insurance declined 7.4% in January year-over-year, according to the MIB Life Index. Applications were off 3.3% when compared to December 2006."

Seems like quite a disconnect. I say "seems" because it appears that while the LIMRA piece touts sales growth for the whole of 2006, the MIB report indicates things slowed down in January 2007, which is apparently typical. What's still troublesome, though, is that "(y)ear-to-year activity comparisons have been falling since March 2006."

Something to watch.

Cavalcade #21: Submissions Due

Submissions for next week's CoR, hosted by Rita Schwab, are due this coming Monday (the 12th).

You can submit your (or someone else's!) risk-related post via:

Blog Carnival

or

Email

Please include:

► Your blog's url

► Your post's url

► The trackback url (if applicable)

► A (brief) summary

PS We're scheduling hosts for Spring '07, so don't wait too long to sign up!

Health Wonk Review...WooHoo!

Joe Paduda hosts this week's HWR, and boy, it's a doozy! Along with almost a dozen and a half interesting, insightful and thought-provoking posts, Joe includes spicy commentary and analysis.

I just discovered attorney-blogger Eric Turkewitz recently, while hunting for interesting Cavalcade of Risk posts. His HWR entry on why doc's may want to think twice about promoting malpractice suits is a must-read.

And while not part of HWR, please check out this article at SoloGig News (a resource for freelancers). Our own Bob Vineyard is interviewed, and shares some tips for entrepreneurs looking for health insurance. Mazel Tov, Bob!

Health Care Reform or Something - Massachusetts Style

Bob's already commented on this developing story; here are some more details as reported by The Boston Globe on March 5th:

"Governor Deval Patrick yesterday unveiled significantly lower prices." How much lower? Look in the 10th paragraph “average monthly premium for residents of Eastern Massachusetts of $305. That indicates a decrease of nearly 20 percent in premiums from the earlier bids” (why is the good news always buried in the 10th paragraph?)

But averages can cover up a lotta things. For example:

1. The plans are age-rated. The least-expensive plan is offered by Neighborhood Health Plan (a Boston-area Medicaid insurer) and costs $175 a month - provided you are age 35-39. If you are over 56, the premium is $347 a month. Who will actually pay the "average" premium? Anyone?

2. The plans are geographically-rated. "coverage will be less expensive in Central Massachusetts compared with the eastern and western parts of the state."

3. The benefits are bare-bones at the lowest price points, even for the Boston Medicaid insurer. The plan "covers preventive care, office visits, hospitalization, and prescription drugs". Mandates? what mandates? More: "The annual deductible for the basic plan would be steep: $2,000 for an individual and $4,000 for a family" and "Similar plans from the three major health plans". Stripping the benefits sure does lower the premium, but isn’t that a tactic that only the greedy private insurance companies use? Yikes.

The Massachusetts plan is widely called "health care reform" but it looks and sounds to me like plain-old insurance, subsidized by the State. In other words, true to a grand Boston tradition, Gov. Romney "stuck a feather in his cap and called it macaroni". And now Gov Patrick is doing the same.

The Eye of the Storm

Time for another of our occasional forays into the dark and mysterious world of Property and Casualty insurance. Last week, Bob wrote about State Farm (et al) and the insurance market aftermath of Katrina.

NOLA wasn’t, of course, the only area affected by hurricanes in the past few years; Florida has certainly seen it’s fair share (or more) of the deadly storms. And, of course, the insurance market there isn’t exactly considered a rosy picture.

But one carrier is bucking the trend, and intends to begin writing business in the Sunshine State:

“As most big insurers are cutting back coverage in Florida and other coastal states after a string of catastrophic hurricanes, Mr. Buchmueller has started a company offering policies that hardly anyone else wants to sell — and at as little as half the going rates.”

His “hook” is that his company will only write homes that are worth at least a million dollars. Why?

Well, for one thing, the industry’s own statistics seem to show that such homes (especially newer ones) are better built, with features (such as special windows and shutters) that are, to coin a phrase, hurricane-resistant.

And although he hasn’t explicitly said so, it occurs to me that such homes will also generate larger than average premiums, as well as little “extra’s” like scheduled items (lots of jewelry and art), and excess liability umbrellas (insert your favorite “umbrella in a hurricane” joke here).

He’s also hedging his bets in another way: limiting the amount of business (number of homes) that he’ll write this year (his first), and using a lot of reinsurance to offload his own exposure.

[ed: Reinsurance is a mechanism insurers use to limit their own potential losses. They contract with insurance “wholesalers” for specific amounts, so that the policy is really insured by at least two entities]

If nothing else, I like the creative thinking that went into this kind of plan. As to whether or not it’ll work, well, there’s always the next hurricane season to test it out.

Grand Rounds...

Four time host GruntDoc (a first!) has put together a terrific collection of some 60 posts, and (TaDa!) no theme. There are however, interesting categories and helpful context.

And for those keeping score, Bob's up 2 to 1 (yes, my post made it in).

Here at IB, we often talk about the pitfalls of nationalized health care. An English physician, who lives that "dream," has some insights on how expectant mom's can anticipate being treated under such a system.

Carnival Monday (Yay!)

MapGirl hosts a terrific Carnival of Personal Finance this week. Built around a Circus theme, she's put together almost 60 high quality posts, in a half dozen clever categories.

What's more, she put Bob's post on the perils of mandatory coverage at the very top...WooHoo!

It will come as no surprise to regular IB readers that I found Wenchypoo's helpful (and unique) kitchen tips to be the Star of the Show.

The Carnival of the Capitalists is also up, at its new home: Bizosphere. CotC honcho Jay has "rebooted" this venerable financial potpourri, "to return to the root concept of showing off the best business and economics posts you might not otherwise see."

In this case, he's posted 19 entries (out of 34!), and we're pleased that Bob's post on the dangers of carriers being forced to pay claims that weren't really covered made the cut. (hmmm, looks like a two-fer for Bob, we'll see if I make the Grand Rounds Cut tomorrow).

In the event, I really lit up for this post at Photon Courier; it's an illuminating expose of light bulbs.

Insurance Dispatch...

This week's column asks "What’s the relationship between insurance and risk?" Even though you can buy wedding insurance, and cancer insurance, should you?

Check it out at Trusted.MD

Stupid Carrier Tricks # (What, 327?)

We’re a very small agency, in a little suburb of a modest-sized Midwest town, but we do provide health insurance for those of our employees who want (and/or need) it. For a number of reasons, we’ve stayed with the same carrier for more than a few years (NTTAWWT). Of course, we’ve changed configurations over those years; the most recent was selecting a slightly higher deductible and installing an HRA (Health Reimbursement Arrangement).

Our renewal came up recently, and we had to make some choices. On the one hand, we’re not dissatisfied with the coverage and overall service of this carrier (they’re no worse – and no better – than anyone else currently in this market), but the experience I’m about to relate certainly earns it a spot in our (not so) coveted Pantheon of Stupid Carriers:

Our current plan is no longer being offered, but was a fairly typical PPO. We had coupled it with the HRA. The carrier’s automatic renewal option (the plan we’d go on by default, unless we specified otherwise, and which we’ll call Option A) is attractive: a $2,000 deductible, then 100%. Office visits are on our own nickel, but count towards the deductible (something the present plan’s co-pays don’t do). There’s still a prescription drug (rx) card, but it would be subject to that $2,000 deductible, which is “non optimal.” On the other hand, the rate is some $700/month lower than a plan with benefits similar to our present one. That would enable us to bump up the HRA numbers to offset the increased out of pocket.

But the deductible/rx tie-in is a non-starter. So I asked if they had a plan that did everything this new one would, but with an rx card that’s “turned on” from the get-go (no deductible). Turns out they do (we’ll call it Option B), so I asked for a quote on that plan.

So far, so good.

So what’s so stupid?

Well, I get all the numbers, and see something very strange : for one thing, they included the numbers for the plan we don’t like (Option A), but the premium is now some $170/month lower than what my actual renewal, which I got from the carrier in the first place, says it costs. They also included the plan we did want (Option B; same as Option A, but the rx card has no deductible), and it’s even less! Now, I’m not usually one to look a gift horse in the mouth, but this is getting stupid: why would the “better” plan (Option B) cost less than the not-as-good one (Option A)? And why are the numbers for Option A now almost $200 a month less than what we were originally told?

But wait, there’s more! I noticed on the speadsheet the carrier sent that there were TWO versions of Option A (the plan we don’t like). They were absolutely identical in benefit structure, but had two different product numbers. Plus: one was almost $200 per month more than the other.

I’ve asked, and I gotten the following response from the carrier (BTW, I’ll give them credit: at least they did respond):

“Yes, the premium is typically higher on the [“better”] plans vs. the [“not as good”] due to the up-front [no deductible] drug card. I have seen a few cases come back where that is not the case but they are pretty rare.

Additionally the [two identical but for price plans] are priced differently primarily due to experience. The [one] series did not run as well as they anticipated which has caused them to receive a higher rate than the [other] series.”

Okay then.

I do this for a living, and am reasonably adept at it, and this blows even me over.

(Warning to those who will say “Well gee, Prof, all the more reason for a national plan, so we don’t have this kind of confusion.” Oh yeah? I’ve got three words for you: I. R. S.)

Across the Pond: Is the NHS "Buggy?"

I really shouldn't make fun of this [ed: but you're going to anyway, aren't you?], but this newest cost-cutting move by England's "much vaunted National Health Service" is too good to pass up:

"THE NHS could save a fortune, free up beds and prevent killer bug MRSA by treating wounds with MAGGOTS.

The larvae take only five days to clean a wound compared to 89 with more conventional treatments."

I'd heard of using leeches to "restore circulation in blocked blood veins," but this technique goes a step further; touted as a replacement for anti-biotics, these little bugs could save the government-run health system millions of pounds.

It may be only a matter of time before this medical breakthrough catches on over here. I suppose that means that Bob and I will have to stop referring to home office critters as "lousy maggots."