A Positive Tax Development

If you haven't already, do check out FoIB Joe Kristan's recently updated and beautified Tax Updates blog.

As always, there's great (and interesting) content, now with new features (including Ol' Joe's picture).

For cutting edge info on the tax scene, check out the (new and improved) Tax Updates blog.

A Difficult Situation

I received a phone call last week from a young man with a difficult problem. I’m wondering if one of the IB readers can think of a solution.

He was working for a 50+ person company that had a self-funded plan through a large carrier. The company was having financial problems and had notified the employees that the plan would terminate as of July 31, 2007. Because of this, he enrolled on his wife’s medical plan effective August 1. On July 14, the employee was involved in a serious bicycle accident, spent five days in the hospital and incurred in medical expenses in excess of $100K.

In early August, a bank seized the assets of the company…they were obviously in default on some agreement…and sold them to a third party. This has left no money to pay the medical bills.

Who’s going to pay the hospital and the doctors? There's nothing left of the company to pay anything. The health insurance carrier? They issued the Certificate off Credible Coverage showing a July 31 date termination date. It's not unreasonable to assume that a document showing a July 31 coverage end date actually means that the coverage is in effect through July 31. The company's General Liability policy? Assuming, that is, that it had employee benefit coverage. If not, would their P/C broker's E&O policy come into play? How about the Directors and Officers insurance policy? A strong argument could be made that a self-funded plan is unsuitable for a financially troubled company. The corporate officers must have known the company’s financial position...especially if the company was in (or close to) a default position on a loan. And lastly, what about the health insurance broker’s E&O policy? If the broker was aware of the company financial position and failed to recommend a change to a fully insured plan, does he (or she) share responsibility?

Beats me…I referred him to a good plaintiff attorney who works in this area. All I know for sure is that a client’s friend is lying sleepless at night, worried he’s going to lose his house.

Medical Tourism (with a twist)

Medical tourism (that is, traveling outside the country for medical care) has been a recurring theme here at IB. The rationale for this phenomenon has been almost exclusively for price; quality of care has been, if considered at all, an afterthought.

But what if that quality of care was the primary reason to travel outside one's native land for needed health care?

"[Canadian] Liberal MP Belinda Stronach, who is battling breast cancer, travelled to California last June for an operation that was recommended as part of her treatment."

And just why did the Hon Ms Stronach make the trip? For treatment of a "later-stage" operation in the U.S. after a Toronto doctor referred her.

But hold on there, pardner. I thought that the "free" Canadian health care system was far superior to our own "broken" one. Why would a leading Canadian pol make the trip stateside if that were true?

Well, one might suppose that since it was her very life on the line, she knew that she could trust good old American know-how over her fellow countrymen's less effective level of care.

Granted, Ms Stronach has some political "issues" of her own (as chronicled by the indefatigable Cap'n Ed), but she apparently knows a good thing when she sees it:

"MacEachern said the decision was made because the U.S. hospital was the best place to have it done due to the type of surgery required."

"The best place."

Hmmm...

Adam Lives With C.F.

I talked with a friend today. Someone I had lost contact with. It has probably been 2 years since we last talked.

I have known him for probably 30 years.

We used to meet for lunch on a regular basis. It has been a while since we did that.

One day I was driving in my car, listening to the radio. Normally I don't listen to commercials but this one caught my attention.

The voice on the radio sounded familiar.

The announcer was talking about a fund raiser for Cystic Fibrosis. At the end of the message the announcer gave his name. He told the audience he knows all about C.F. because his son lives with the disease every day.

The next day I called Carol, the guy on the radio. We agreed to meet for lunch. He shared his story about Adam, and his illness.

When he and his wife were told their son had the disease it meant nothing to them. They had never heard of C.F. and had no idea what it meant.

Then the doctor told them if he was lucky he might live to be a teenager.

That was 25 years ago.

When Carol called this week after getting through the small talk and catching up, I asked how his family was doing. Every time we talk, which is way too infrequent, I am always hesitant to ask about Adam.

He told me what was going on with his wife, his daughter, then he paused. He said, you remember Adam don't you?

I said I did.

He said Adam is working for an architectural firm and loves his work.

So, how old is Adam?, I asked.

Adam is 29.

Adam has done well. A few years ago he got on a new drug that breaks up the congestion in his chest. Now, instead of 5 or 6 visits a year to the hospital for 2 week stays he only goes twice a year and is usually discharged in about a week.

The medicine Adam takes is $1500 per month.

Living with C.F. is expensive. The various meds he takes run in excess of $2,000 per month.

Adam is a miracle. A young man who has already lived twice as long as expected.

When you tuck your children in tonight, say a prayer of thanks for their good health. I know Adam's parents do the same even though he is too big to be tucked in.

Mixed Messages

Quick: What's the American Cancer Society's number one issue?

Most (if not all) of us probably answered "well, cancer, of course." And we would be wrong:

"The American Cancer Society on Monday began a $15 million advertising campaign that seeks to make expansion of health insurance a top priority for presidential candidates ... The ads, which feature two cancer patients, will air about nine times weekly and will target politically active viewers."

So the ACS has decided to give up on its ads about the dangers of smoking and other risky behaviors in which we're prone to indulge, nor will it tout the importance of potentially life-saving cancer screenings. In their place, we'll see a year-long series of advocacy pieces about the wonders of "universal health care." Ironically, they won't mention that such systems themselves do a pretty poor job of fighting the disease.

Instead of focusing on (and funding) research to actually cure a deadly disease, the ACS is choosing to play politics, with money it ostensibly raised for that aforementioned research. I can hardly wait for next year, when they decide that global warming causes cancer, and start running ads about that.

The reality is that this is purely politics, with no scientific basis, and a deliberate sidetracking of funds for that purpose. How many patients will now die because the ACS has lied about the uses for which its fundraising was driven?

My suggestion: find another outlet for your charitable contributions and fundraising efforts (such as this one).

Starting now.

UPDATE: If you're in southwestern Ohio, this is a worthy cause, too:

$45,000 and No Insurance

[Welcome NRO Corner and Whiskey Fire readers!]

Had it not been for a federal health insurance program tailored for working families such as hers - ones lacking the income to purchase private health insurance - Frost is certain that she and her husband would be buried under a mound of unpaid medical bills.

The federal program referred to is SCHIP.

More than 100,000 Maryland children are covered under the federal program, according to state health officials. They estimate that the program will require an infusion of roughly $160 million in federal funds over the next five years - with the state also contributing dollars of its own - to continue providing coverage to those families.

Tax dollars.

Of course only the wealthy pay taxes.

The Frost family has a combined annual income of about $45,000, said Bonnie Frost. She and her husband have priced private health insurance, but they say it would cost them more per month than their mortgage - about $1,200 a month. Neither parent has health insurance through work.

$1200 per month for a family of 6 in Baltimore. Really? What are they smoking?

A check of a quote engine for zip code 21250 (Baltimore) finds a plan for $641 with a $0 deductible and $20 doc copays.

Adding a deductible of $750 (does not apply to doc visits) drops the premium to $452. That's almost a third of the price quoted in the article. Doesn't anyone bother to check the facts?

Apparently not.

UPDATE: The article linked at the top of this post has apparently been pulled by the BS, er, Baltimore Sun. An alternate version, with essentially the same info, is here.

Forgetting Something?

As it stands now, the hot topic for the political season seems to be health care reform. No doubt Iraq and the war on terror will not go away, but it seems everyone is ramping up to present their solution to the uninsured and underinsured.

Problems include the following.

No one ever wants to admit it will require a tax increase.

No one really has a handle on how much it will cost.

And here is a biggie. No one wants to address how their plan will handle medical inflation.

Someone on the left coast is calling their hand on this. Ken Terry at the S. F. Chronicle is spot on in his analysis.

Even with the average spread of risk found among federal workers, FEHBP rates are increasing as fast as those of private plans outside the program.

Similarly, Medicare costs have been growing almost as quickly as private insurance rates for decades, when you compare benefits that are common to public and private plans. So expanding the FEHBP and adding a Medicare-like plan won't do much to control cost growth.

So all you are doing by moving folks from the private sector to the public sector is swapping one "gas guzzler" for another.

Clinton suggests other methods to curb spending. She'd require the coverage of preventive care, encourage chronic disease management, reward doctors for improving the quality of care, and kick-start the national adoption of health information technology with $3 billion in government grants. She cites an estimate that widespread use of electronic health records could eventually save $77 billion per year. But she and her advisers seriously underestimate the cost and time that will be required to get interconnected EHRs into all hospitals and doctors' offices; in fact, the RAND study she mentions assumes it would take 15 years to fully implement a national information network. Similarly, preventive care and disease management are fine ideas, but they cost money and won't save substantial amounts for years to come. And the fragmentation of our health care system will inhibit all of these initiatives. So Clinton's claim that they can save the federal government $35 billion a year right off the bat is speculative, at best.

Speculative. That's a good word.

So is ludicrous.

None of the presidential candidates - Clinton included - wants to face the fact that we can't provide comprehensive, universal health care until we find a way to control costs.

Neither the press nor the public is asking the hard questions.

Toe Money

Got yellow toenails? Digger encouraged you to see your doctor about a $300 per month cure.

Now you can fight back and pocket some green.

The generic form of Lamisil is Terbinafine. So how much for a 30 day supply of the generic med?

$48.99 at Drugstore.

$20.63 at Costco.

Now Wal-Mart is adding Terbinafine to its' list of $4 generics.

That is a 6 year supply of generic vs. a 30 day supply of Lamisil.

P. T. Barnum said it best.

American Indian Insurance

No, not American Indian as in native American. Rather it is health insurance with a hefty discount.

As long as you agree to receive treatment in India.

American health insurance firms, particularly from the US are offering their customers a carrot: If you’re unwell, you've got two options. Either you pay the regular premium and get admitted to a hospital in your country of residence.

Alternatively, you choose to go to India for treatment; in return for which you get a hefty 30-40% discount on the annual premium you pay.

That's a major difference.


Hospitals in India usually charge around $6,000-8,000 for coronary bypass surgery, $6,500 for a joint replacement and $6,500 for a hip resurfacing, which represent a small fraction of the typical costs at US hospitals. "India is not just known for its outsourced back-office skills any more, like reading of X-rays, medical transcription or billing. It's the actual clinical care that is now being outsourced," says Bali.

How far will this trend go?

Something New

As we're dragged, kicking and screaming, into the 21st century, we're trying some new "blog tech" (well, new to us old fogeys). So, Bob did our first YouTube embed, and he and I are taking a swing at online polling. If it goes over well, we may add it as a weekly feature (with new questions each week, of course).

Our first one may be found near the top of the righthand sidebar. We're still looking for a tool to allow us to embed it in a given post.Have fun!

Cavalcade of Risk #35 is up!

A little late, but well worth the wait, Justin at the Investments & Loans blog has an outstanding Cav. Fighting an ever increasing load of spam submissions (and calling folks on it, as he should), Justin has an eclectic collection of risk-related posts.

Do check it out.

And don't forget, you can host one, too. Just drop us a line.

Much Ado About Mandates

Want your lay midwife to be paid by your insurance carrier? Go to Washington, New Mexico or Maine to give birth.

Perhaps you want your Pastoral counseling to be a covered item, or your Naturopath needs some extra business.

Maybe you want your exam for STD's to be covered. After all, that is a procedure that could cost as much as $100 if your insurance doesn't pay for it.

Need a hair prosthesis? Ask your insurance carrier to pay for it. You might live in one of the 9 states where it is required.

What about Port Wine stain removal? Only 2 states require that coverage.

You can view a comprehensive list with the approximate added cost to health insurance premiums by clicking here.

Tech Bleg (Polling Widget)

Okay, we'd like to post an online poll, but do not want to "upgrade" our Blogger setup. I've tried a bunch of different "free poll" tools, all of which give me html code, and none of which work. I get all kinds of "can't open tag" kinds of error messages, etc. It would be nice if we could "embed" a poll in a post, as opposed to on the sidebar.

Any suggestions?

(Already tried vizu, freepoll, adpoll, and several others)

The Government Made Me Fat

If you are fat, or have lifestyle related health issues, there is good news. It is not your fault.

I have arrived at this conclusion by carefully analyzing comments and responses of prospective clients who come to me looking for individual health insurance. This is not a scientific poll by any stretch, but I still believe it has some level of statistical accuracy.

A case in point.

Yesterday I was contacted by a man who is being downsized . . . so to speak. His job is going away in a few months and he is looking for health insurance. He is 55 years old, highly skilled, with a wife and one child still at home.

Finding a job is going to be tough.

Finding health insurance even tougher.

COBRA will be available but only for 18 months. Covering his family will run around $1300 per month and $400 just for him.

He is 6' 5" and tall and weighs 265.

He also has lost 50 pounds in the last 12 months.

He is on meds for hypertension, cholesterol, depression and RLS.

He is uninsurable.

When I told him of the issues he proceeded to tell me how "my industry" has failed the American public and that is why I will be out of a job in a few years. The government is going to take over my business and I will be out of work.

Sounds to me like the government has conspired to make people fat in order to put me out of work.

Rather than argue with him I suggested he keep my number. If he wants my help he can call, or he can wait on the government to lay me off when they provide health insurance to everyone regardless of their medical condition or ability to pay.

Sure, no problem. When you call just ask for the blue man. I am the one holding my breath while waiting on people to start acting like an adult and taking responsibility for their own actions.

Is More Better?

A while back, we looked at whether the HPV vaccine was a good idea or a Big Pharma profit center. This morning's McPaper brings us a full page ad from Generation Rescue, an autism advocacy group (no, they don't advocate for autism, but on behalf of folks afflicted with it). It's their contention that the increasing number of vaccinations "recommended" by the CDC may be responsible for an increase in the number of children diagnosed with autoism.

Obviously, correlation does not mean causation, but it doesn't preclude it, either.

So the group commissioned an in-depth study of chillun on the west coast (some 17,000 of them), to see if there was any overlap between those who'd been vaccinated and those with autism. The results are here.

It's kind of interesting, and scary. Turns out, of those surveyed, vaccinated boys were 2.5 times more likely to have neurological disorders (such as autism) than those who had not "had all their shots." Interestingly, GenRes isn't calling for a boycott or moratorium, but rather more study of the issue. As one who supports consumer empowerment and transparency in health care, I certainly applaud and support that.

Which isn't to say that the GenRes study was without flaws. As they themselves ask: "Are parent responses a reliable indicator of a child's diagnostic status?" Well maybe, and maybe not. But that just underscores the need to ask more questions. As I opined in that HPV vaccination post, "the risks here are great, and the downside is particularly troublesome."

Medical Care Disconnect

According to the L A Times "(n)early two dozen private hospitals in Los Angeles and Orange counties, accounting for up to 15% of beds in the region, are in dire financial straits and in danger of bankruptcy or closure, according to hospital administrators, industry experts and state data."

This is not the first time we've talked about the dire financial straits in which hospitals have found themselves, sometimes justifiably.

But it underscores a critical problem: how to balance the public good (adequate access to necessary health care services) with the funding necessary to pay for it. One way, of course, is to increase reimbursement rates. This may be difficult, however, given Medicare's notorious (and ever increasing) tight-fistedness [ed: you just made up that word!]. Insurers follow suit, of course, when they can, but lack the purchasing power of the gummint-run health care program.

Of course, California's solution is to require everyone to buy insurance (rotsa ruck with that), and subsidize folks who "can't afford it." And where would that subsidy come from (remember, the gummint has no money, it simply confiscates what it needs from the taxpayer)? Let's see, now: How about we add an additional 4% tax on the already overburdened hospital system? Yeah, that sounds about right.

Not.

1901 Reasons Why . . .

Sally Pipes wants to get rid of employer provided health insurance and she has 1,901 reasons why it makes sense.

Get rid of employer-sponsored health care and let workers buy their insurance on their own. Think it's too expensive? It wouldn't be, if we got rid of the miles of red tape that regulate insurance.

The first regulations we need to go after are the 1,901 state-level mandates dictating what health insurance policies must cover.

Why do we have state mandated benefits?

Because politicians need something to justify their reason for holding a position in the state house or senate I suppose.

The interesting thing about Ms. Pipes editorial? She refers to 1,901 mandates.

A report from 2005 by the NCPA lists 1,823 mandates.

Have we really added 78 mandates in two years time?

What are some examples?

According to Ms. Pipes they include:

In Massachusetts, for example, every insurance policy must cover in vitro fertilization, even if you're a 25-year-old male, or a nun. In California, there are 46 such mandates, which drive up the cost of insurance for everyone.

IVF for males & nun's. Yeah, that's got to be a high demand benefit.

Whether the count is 1,901 or 1,823 I think it is evident someone needs to get in touch with reality.

...a failure to communicate

There are few (if any) things insurance agents sell that are simpler than fixed annuities, particularly immediate ones. These are instruments that are used to provide an inexhaustible (or nearly so) stream of income to folks who need one.

One of my clients is a law firm which represents a local company which had a defined benefit retirement program for some long-time employees. Such programs are designed to provide a fixed, usually small, retirement income. The company has a number of folks who have reached retirement age (or are approaching it), and wanted to offload the administrative details. A Single Premium Immediate Annuity is an ideal vehicle for this, because it provides a guaranteed income for the retiree, and zero effort (past writing the check) by the company. The law firm wins, because they provide the resource (that would be moi) to handle the transaction, and I win because there's a nice (although not outrageous) commission check for my efforts.

I've done a few of these for the firm, and in July, they asked me to do another one. I use a "wholesaler" that provides me with quotes based on criteria I provide (the monthly benefit amount, age and sex of the annuitant, A M Best rating of the carrier, etc) as well as the paperwork I'll need to write the case. I trust them to get me accurate information and proper forms.

Until now, I've had no complaints.

The wholesaler (whom we'll refer to here as XYZ) gave me the three quotes I requested, and we settled on a carrier. I received the quotes and forms via email (which is very convenient), we completed the paperwork, and I overnighted the completed case to XYZ on August 7. We had requested a payment date of August 31, which I presumed wouldn't be a problem (annuities such as this aren't underwritten like a life or health insurance policy; it's more enrollment than application). Case closed, or so I thought.

Mid-September, I get a call from the law firm, asking where the check was. Turns out, the retiree ("annuitant") hadn't received it. That didn't sound right to me, so I sent off an email to XYZ (the wholesaler) inquiring about it. The answer I received did not bode well: apparently, there were several forms missing, which would have to be completed before any check was cut. The carrier was firm: unless and until they had all the forms, they would put a hold on all funds.

Major oops.

As one can imagine, this didn't sit well with me; after all, I had counted on XYZ to provide me with all the proper documentation, and had in good faith secured the information, signatures and check. It seemed to me that XYZ had an obligation to supply me with all the necessary paperwork, and they had two opportunities to make sure all was in order: once when they emailed the forms to me, and again when they received the FedEx package I had sent back. I had no way of knowing what was missing, because I don't work directly with the carrier. I explained this to a number of folks as I made my way up the corporate ladder, becoming more and more frustrated as I did so.

In Part 2, we discuss how problems like this get resolved.

Battleground

In the war between providers and carriers, the providers now have new weaponry to unleash upon the insurgent carriers. Operation Desert Storm gave us smart bombs capable of dropping down a smokestack or slipping in through the front door with deadly accuracy to destroy the enemy.

Now Athenahealth seems bent on doing likewise by developing a kind of smart EMR for physician practices.

Unlike most physician practice software, Athenahealth is different. Their web-based software is designed to help docs increase their collection rate from carrier reimbursement. A testimonial from their website reveals the following.

The practice’s collections have increased an impressive 27% since going live on athenaNet®. As for days in AR, the number has dropped more than 20 days since the practice first went live. In 2003, the days in AR were 45.6 and now that average is 25.3.

“Two years ago, the physicians here were borrowing money trying to keep the practice open. Today, the practice is transformed. Money is stable and everyone is happier,” said administrator Shari Reynolds.

Of course the AR problem could all but be eliminated if providers, particularly those in primary care, would eliminate the practice of billing carriers for routine office visits and require payment at time of service.

Cavalcade #35: Submissions Due

Just a reminder that submissions for next week's CoR are due this Monday (the 24th). Our host, Justin Broadbent-Shaw of the Investments and Loans blog, asks that you PLEASE include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

You can submit them via Blog Carnival or email.

NEWS FLASH: The October 10 edition is still available; PLEASE let us know if you'd like to host it.

UPDATE: Hooray for Bob Laszewski, who's taken the 10/10 Cav. Thank you!

Health Wonk Review is up

FoIB Joe Paduda (founder and chief bottle washer of the HWR) hosts this week's "Back to School" edition, with over two dozen of the most interesting and insightful posts on health care policy and polity.

Transparency in health care is a frequent topic here at IB; The Health Care Blog's Brian Klepper is also a proponent, but with an interesting twist: in a "sauce-for-the-gander" post, Brian thinks we should be demanding the same from health plans, not just providers.

Oy Canada (Again)!

From time to time, we like to take a look at our Neighbors to the North(tm), to get a sense of how well their health care system, so often touted here in the 'States as "health care nirvana," is faring.

Alas, not so good.

When even the president of the American Medical Association (AMA) finds major fault lines, it's time to reevaluate how much stock we should put in that kind of system. Less than a month ago, his Canadian counterpart opined that their "system was built to meet the needs of the underprivileged. It is now failing both them and everyone else, because it has not adapted to the times."

Ooops.

What could have gone so drastically wrong?

Well, for starters, Michael Moore's fantasy about the bullet-proof Canadian health care system turns out to have missed the target, by a wide margin:

"Annual survey data for the past four years indicate that these perceived access problems have worsened or remained about the same, with no significant improvement for any single service. Moreover, about half of the respondents believe that health care services will get somewhat worse (34%) or much worse (15%) during the next two to three years."

That doesn't portend well for a system which stateside advocates fervently wish for us to emulate. In fact, the leadership of the Canadian Medical Association is now on record as recommending "that Canadians be entitled to obtain government-funded treatment outside their home jurisdiction or within the private sector," if those who run the system don't find a way to effectively rectify its many failings, including rationing and excessive waiting times for services.

And for those who think that the future of nationalized health care is all sunshine and flowers, consider this:

"Among the 800 physicians participating online, 39% said that Canada's health care system should allow for an increased role for private financing and delivery of health care services. A rather low 63% said they would recommend medicine as a rewarding career to aspiring young people."

That defines a vicious cycle; is that really the kind of system we want here?

Hard Hat, Pumps and Health Insurance

[Welcome Industry Radar Readers!]

Seems Madame Hillary is further refining her stance on the government role in health insurance.

She said she could envision a day when "you have to show proof to your employer that you're insured as a part of the job interview:

"Your resume' is impressive, and you certainly meet the qualifications we need for this position. However, there is one thing keeping us from making you an offer. You don't have proof of health insurance."

One the one hand, I agree with this stance. (Agree with Hillary? Are you ill?)

In some positions you need proof of citizenship. Almost every hiring situation requires some form of picture ID such as a drivers license, and you must show your Social Security card.

Some jobs require you not only to have a valid drivers license but proof of (auto) insurance as well.

In my position I must show I am licensed by the state and that I have E&O insurance.

So why not proof of health insurance?

Foreign nationals here on visa's must show proof of insurance. Why not citizens?

Some say she is stepping on our rights as citizens. Perhaps so. But aren't those who go without insurance and skip out on paying for their health care also infringing on MY rights?

Is Madame Hillary actually right on this issue? Or is she just saying things to warm the heart of a right wing conspirator?

Shopping Grand Rounds

Six Until Me's Kerri hosts a clever, entertaining and informative Grand Rounds. Laid out as a story unfolding as she meanders the supermarket, Kerri manages to tie informative but disparate posts together around common themes. Unique and highly readable.

Regular readers know that we're big on consumer empowerment, which means increased consumer knowledge. Walter at Highlight Health cautions us, though, to step back and assess just what it is that we think we know, because it might be wrong.

Uninsured In America

Universal Unhealthy Care

The pols are out in force of late: The Junior Senator from New York proposes HillaryCare II, a $110 billion (to start) program to bring about a gummint-run [ed: don't you mean gummint-mandated?] health system. Meanwhile, the non-Senator from North Carolina is waving a big stick, threatening to cut off Congress (and, to be fair, the executive branch, as well) from their cushy health plans if they don't pass "universal care" by mid-ought nine.

If nothing else, these are ambitious folks, so perhaps they're to be forgiven for overlooking the salient fact that these types of plans don't work.

I know, I know, they work great in England, and France, and Canada (or not, as the case may be). But they've proven themselves to be something less than stellar here. No one likes to mention it, but we already have a gummint-run health care system (several, in fact), and the problems become increasingly absurd, and yet painful:

"An obscure provision slipped into a $120 billion Iraq spending bill in May threatens to leave some poor and disabled Medicaid recipients without prescription drugs in October."

Ooops.

Never mind why Medicaid prescription benefits became part of an Iraq war bill (then again, it is a War on Terror, and few things are more terrifying than "I'm from the government, and I'm here to help you").

"In a case of unintended consequences..."

By far the best clause in the whole article, and one which should give any thinking person pause before even contemplating the idea of giving the feds even more control over our health care.

The Health Plan to Nowhere

It all started with the bridge to nowhere.

In case you don't recall, Sen. Ted Stevens of Alaska threatened to resign from the Senate if appropriations totaling $453M for two Alaska bridges were cut. Approximately half that amount ($223M) was slated to build a bridge from the town of Ketchikan (population 8900) to the airport on the island of Gravina (population 50).

It seems the ferry that is currently used has long waits of 15 - 30 minutes and cost's $6.

The bridge, if built, would be longer than the San Francisco Golden Gate bridge and would be funded by taxpayers.

Apparently the folks in Washington think money is made of paper and there is no reason why they should be held accountable for the way they spend OUR dollars.

Now comes Madame Hillary and her proposal to provide health care for the 47M who are currently without insurance.

"This is not government-run," Clinton said of her plan to extend coverage to an estimated 47 million Americans who now go without.

Not government run, said she.

Perhaps hoping to quell the wrath of insurance carriers.

Nice of her to be inclusive.

She called for a requirement for businesses to obtain insurance for employees, and said the wealthy should pay higher taxes to help defray the cost for those less able to pay for it.


Sure. Make business owners and the wealthy pay for it.

Of course we know (even if she doesn't) that businesses don't pay taxes.

Wonder how she defines wealthy?

How much will it cost you ask?

She put the government's cost at $110 billion a year.

The government's cost.

But the government doesn't have any money.

She must mean the TAXPAYER's cost.

Let's see. $110B to cover 47M uninsured.

That works out to about $2340 per year.

For health care.

For everyone who is not insured now.

Who is she kidding?

Oh yeah. Since the tax will come from the wealthy, the majority of voters will assume that does not include them, so why bother running the numbers?

Sounds like the health plan to nowhere if you ask me.

Carnival Time!

The Carnival of Personal Finance is up at Money, Matter, and More Musings blog. Our host has whittled the 100 submissions down to a more manageable (heh!) 88 posts, neatly categorized in helpful little "chunks."

One of our major themes here at IB is personal responsibility. We obviously apply this to insurance and health care decisions but, as the folks at One Million and Beyond point out, it's also critical in how we manage our debts, as well.

Codependent Relationship

During the first 30 years of my life, I had no health insurance. Neither did a lot of other people, back in those days.

During those 30 years, I had a broken arm, a broken jaw, a badly injured shoulder, and miscellaneous other medical problems. To say that my income was below average during those years would be a euphemism.

How did I manage? The same way everybody else managed: I went to doctors and I paid them directly, instead of paying indirectly through taxes.

Paying providers out of pocket. What a novel idea.

(Comment: I am not an advocate of going naked but I do believe the referenced article makes some salient points)

This was all before politicians gave us the idea that the things we could not afford individually we could somehow afford collectively through the magic of government.

Sounds like a vast left wing conspiracy.

When my jaw was broken, I was treated in an emergency room and was given a bill for $50 -- which was like a king's ransom to me at the time, 1949. But I paid it off in installments over a period of months.

Personal responsibility and accountability. Sounds like an adult kind of thing.

Some hospitals -- whether public or private -- could absorb such costs, with the help of donors. There were people with polio living in iron lungs, which is why rich and poor alike gave money to the March of Dimes.

But that is very different from hospitals being stiffed every day by emergency room users whose only emergency is that they want to keep their money to spend on fun, instead of on doctors.

Spending money on fun rather than on health care (or health insurance).

Bling or health insurance. Tough choice.

The biggest of the big lies in the "health care" hype is that a lack of insurance means a lack of medical care. The second biggest lie is that health care and medical care are the same thing.

Must be a regular reader of InsureBlog.

Few people show the slightest interest in what has actually happened in countries with government-controlled medical care.

We are apparently supposed to follow those countries' example without asking about the months that people in those countries spend on waiting lists for medical treatments that Americans get just by picking up a phone and making an appointment.

It is amazing how many people seem uninterested in such things as why so many doctors in Britain are from Third World countries with lower medical standards -- or why people from Canada come to the United States for medical treatment that they could get cheaper at home.

Don't confuse them with facts. Their mind is already made up.

Besides, we have the government to take care of us . . .

Net Worth Reduction

[Welcome Insurance Forum readers!]

Howard Rocket bought disability insurance when he started practising as a dentist in 1972.

But he let his policy lapse in 1986, when he left dentistry to start a public company, Tridont Health Care Inc.

"I was drawing about $30,000 a month from the business," he says. "So why did I need insurance? I had money and I could self-insure."

Certainly a rational thought.

However, there is nothing rational about sudden illness, accidents or economic set backs.

Tridont went bust in 1990, but Rocket kept a career as an entrepreneur. In 1995, while playing touch football with friends, he fell and landed on his neck.

Six weeks later, he had a massive stroke. He was in rehabilitation for years and still hasn't completely recovered.

"I paid about $1 million in hard costs – things like wheelchairs, canes, drivers, physiotherapy, occupational therapy, massage, chiropractic therapy and acupuncture," he says.

This is why self insuring is a foolish wager.

"To me, self-insurance is net-worth reduction. And insurance is net-worth protection."

Couldn't have said it better myself.

Hoosier Carrier?

State officials have selected Anthem Insurance to offer a health care plan for low-income adults that will be subsidized by this year's increase in Indiana's cigarette tax.

Anthem, AKA Blue Cross of Indiana, is the winner of Indiana's booby prize.

Officials expect that the 44 cents per pack increase in the cigarette tax that took effect July 1 - to 99.5 cents - will raise enough money to provide health insurance to more than 100,000 low-income Hoosiers and fund other health initiatives.


Some have a problem with so-called sin taxes.

I am not one of them as long as the money is used as outlined.

I also prefer the term stupid tax over sin tax. I feel it is much more fitting.

The program approved by legislators this spring calls for the state to provide subsidized health care to adults who earn too much to qualify for Medicaid but less than twice the federal poverty level - $41,300 for a family of four. Children can receive other government-subsidized health care.

Sounds like a plan to me.

The state estimates as many as 367,000 Indiana adults qualify for the subsidized coverage, but the legislation provides funding for only an estimated 140,000, so enrollment will be on a first-come, first-served basis.

Rationed health insurance from the government. Where have we seen that before?

Annual deductibles for the plan are not exceed 5 percent of household income, up to $1,100 a year.

I am sure there will be cries of foul over this one.

Still, it is a start in the right direction.

Pass the Mayo

Mayo Clinic believes America's health care system urgently needs reform to ensure the future of quality patient care.

Reform? What kind of reform?

universal insurance coverage, coordinated care, value and payment reform.


OK, let's see what they propose.

Keep in mind, the Mayo clinic is the supply side of the economic equation. They don't have to worry about how to fund the changes.

Provide health insurance and access to basic health care for all Americans -- regardless of their ability to pay.

Health insurance (and basic care) regardless of ability to pay. How do they propose this will be handled?

Move from employer-based insurance to portable, individual-based coverage. Employers could still help finance a portion of their workers' health care expenses and should be encouraged to promote employee wellness.

Portable individual insurance. I'm all for it.

Employers can finance a portion of the cost. Of course we all know that employers don't finance anything.

Employee wellness has been tried for years with almost no success. More recently employers have switched from the carrot to the stick and are now getting the attention of their workers. When smokers, those who are obese or have preventable medical conditions (HTN and Type II diabetes for example) are charged extra premiums, only then are lifestyle changes implemented.

Create a simple mechanism (similar to the Federal Employees Health Benefit Plan) to offer private insurance packages to buyers.


The Federal Employees Health Benefit Plan is a self funded MEWA. Will someone tell me what this plan does to control health care inflation?

Require individual ownership of health insurance, with sliding-scale subsidies for people with lower incomes.


Low income people already have access to free or subsidized care.

Appoint an independent health board (similar to the Federal Reserve) to define essential health care services. Allow people to purchase more services or insurance, if desired.

Why do we need a governmental body to define "essential health care"? Is the general population really that ignorant?

Patient care services must be coordinated across people, functions, activities,
sites and time in order to increase value. Patients must be active participants
in this process.

Coordinated patient care. I believe case managers already do this.

Realign the health system toward improving health rather than treating disease.

Nice idea, and it can be handled with more free or sliding scale clinics (such as Minute Clinic).

This is well and good, but until we find a way to tame the XXL generation all the clinics in the world are not going to do much good.

Increase quality and patient satisfaction. Decrease medical errors, costs
and waste.

This sounds more like fluff than anything.

Reward consumers for choosing high-quality health plans and providers

Rewards? You mean like air miles and trips to exotic places?

Consumers have access to more information than ever before on health care and ways to finance the cost of their care. Yet they are overwhelmingly lazy in taking advantage of information that is literally at their finger tips.

We have a society of quick-fixes. Instant food from package to microwave to table in under 5 minutes. Instant cash from an ATM 24/7. We demand quick results from our health care providers in the form of a pill and shy away from lifestyle changes that could be much more beneficial than introducing more chemicals into our bodies.

Change the way providers are paid in order to improve health and minimize waste

As in an all cash system like we once had?

Design payment systems to provide patients with no less than the care they need and no more than fully informed, cost-conscious patients would want.

That would be cash.

Pay providers based on value.

Cash again.

Further develop and test models of payment based on chronic care coordination, shared decision-making and mini-capitation (i.e., one bundled fee for the physicians and hospital delivering acute care).

Capitated fee structures already exist for many routine procedures such as normal delivery. I doubt it will work that well on chronic situations.

"Well Mr. Jones, it seems you have hit your limit on insulin for this month. Come back in two weeks when the new month begins and we will start you up again."

Yeah, that works.

Loose Cannon Update

Recently, we noted that FoIB and Cato Institute biggie Michael Cannon had an op-ed in USA Today. Well, building on his new-found celebrity (notoriety?), Michael will be a featured guest on this evening's edition of ABC's 20/20. In fact, the whole show is on the health care delivery and finance debate, facilitated by John Stossel.

As they say: Check your local listings.

Legalized Gambling

Small business owners Gordon and Babette Brennan used to pay as much as $800 a month for health insurance. But the Jupiter, Fla. couple felt like they received little in return: Claims for ordinary pediatrician visits for their son Ryan were denied. Procedures like blood tests weren't covered. Co-pays were $40 a pop.

Received little in return.

Who buys an insurance policy hoping for a return? Where does this kind of mentality originate?

But making a combined salary of $90,000 from their dog-training school, "we were in this pocket where we made too much to get assistance but couldn't afford a good plan," says Babette, 39.

$90,000 disqualifies them for public (taxpayer funded) assistance.

Wow. Who woulda thunk?

So in 2002 the couple decided to drop their policy and go off the health insurance grid.

Going naked.

Wonder what kind of return they will get on money they did not spend on premiums?

It seemed like a reasonable gamble at the time: Pay out of pocket and maybe spend less than premiums and co-pays combined. For a while it worked too.

When Babette became pregnant with their second child in 2004, she negotiated with her doctor for delivery costs - and spent $2,000 less than insurance would have charged in premiums alone.

So far it looks like they gambled and won.

But everyone knows the customer rarely wins.

The only way to "win" (get back more than you pay in) with an insurance policy is to suffer a major loss. What kind of logic is that?

Then baby Sarah was diagnosed with Leber's amaurosis, a congenital eye disease that leaves her legally blind. Over the next few years, the doctors say, she'll require about $1,500 a year in ongoing care, a test that will cost $20,000 and possibly surgery costing $5,000 or more.

With Sarah's pre-existing condition, the Brennans feel like they won't get an affordable insurance policy at this point. Yet with little savings, they face the prospect of borrowing money from family to pay for Sarah's care or getting a corporate job just for the benefits.

Sounds like they gambled and lost.

I bet they wish they had done things differently.

Any takers?

Citizens Rights

Hardly a week goes by that I do not learn something new. Guess that's a good thing.

I just talked with a lady visiting in the states from Australia. Her husband is here as part of an exchange program with the University of Georgia.

They are here legally.

He has a J-1 visa, she and their daughter have J-2 visa's.

They are looking for health insurance.

They have been here long enough to satisfy the residency requirements. They were covered under an employer plan but that is going away the end of this month so they contacted me.

It seems that the U.S. State Department has certain requirements for folks here on a visa. Among those being, they must have health insurance.

Not only must they have health insurance, but the deductible can be no greater than $500. The maximum benefit per accident or illness can be capped at $50,000.

Wow. That's the government for you.

We don't want you to have more than $500 in deductibles but you can stiff the docs & hospital if your bill runs over $50,000.

What kind of stupidity is that?

Want to know the real kick in the butt?

Foreign nationals here legally must have proof of insurance.

U.S. citizens are free to go without coverage with impunity (other than running the risk of losing their home, car & wages).

Who thought up that rule?

Oh yeah.

The folks in Washington.

US life expectancy rises to an all time high...

There's an interesting article published today on Reuters that says that the US life expectancy continues to rise, following a decades long trend. That's absolutely amazing considering the shoddy level of health care that we enjoy. Oh. Wait. Maybe it's not so shoddy after all...

Just Can't Win

The headline reads "Health Insurance Premiums Vault Past Inflation."

The only reasonable response is "And so?"

In the very same edition of USAToday, we find that housing costs (which include ever-increasing property taxes) easily eclipse even health insurance, while the price of gasoline continues to climb to Olympian levels, as well.

What do these things all have in common (other than the obvious)?

Things cost more to buy.

It's called economics, and it's not that complicated: prices for goods and services rise to meet demand, and some things are more in demand than others.

And so, to borrow a line of thought from Mike, how come we don't see a push for nationalizing mortgage brokers? Or gas stations?

It's kind of frustrating that, according to USAToday, health insurance premiums rose a measly 6.1% last year, but that's not good enough: that increase was higher than the rate of inflation. But that really tells us very little: as noted above, the cost of a lot of things we need and use increased at a higher rate. What's critical, and missing from the article, is the rate of medical inflation. After all, the increasing cost of providing care drives the cost of financing it.

The other salient fact which jumps out in that story is this 'throw away:' a business owner, by simply adding a modest deductible, saw his rates climb a paltry 5%, two years running. That in itself is remarkable, but he also added an HRA (Health Reimbursement Arrangement) to mitigate his employees' increased exposure. The best part? "So far, not very many of his workers have needed to take him up on the offer."

Now what does that tell us?

Well, for one thing, the owner has a wise and competent agent, who helped him to see how a simple rearrangement of benefits could help his own, and his employees', bottom line. But the other, perhaps more important message is that a lot of folks pay for insurance that they don't even use.

Unfortunately, according to the Kaiser Foundation study on which the article's based, the number of insured employees who've enrolled in higher deductible plans hasn't grown much, which is a shame.

Just think how much lower rates would be if they did.

Cavalcade of Risk #34 is up!

Host David Williams, of the Health Business Blog, hosts this week's round up of risky posts from around the blogosphere.

David did an outstanding job, and you can, too: just drop us a line to reserve your Cav.

L'Shannah Tova, 5768!

Our Jewish readers, as well as half the IB team, celebrate our New Year (Rosh HaShannah - the head of the year) beginning this evening. For some, this is a one-day holiday; others celebrate for two. Regardless, it's less a time of champagne and fireworks as for introspection and rededication.

You may be wondering about that photo. Every week, my better half bakes two special loaves of bread, called challah; one for our family, and one for another, older couple who are among our dearest friends. It is traditional to bake a special challah for Rosh HaShannah; it's the same basic recipe, but the bread is braided into round loaves, and topped with a sprinkling of sugar (for a sweet new year).

Those two pictured above came out of our oven just a few minutes ago (and boy, do I wish we had pod-smelling technology!). What a delightful, special, and meaningful way to usher in the New Year.

This season is also a time to thank those who have been helpful, indeed inspirational to us through the past year. And so I especially thank our readers, and my esteemed co-bloggers: Bob Vineyard, Bill Halper and Mike Feehan.

May your New Year be filled with joy, health, prosperity and peace.

Treating the $1400 Cold

[Welcome Industry Radar readers!]

“Over 20,000 Georgians visited the emergency room last year with dental problems,” said Cagle. “The top condition treated in Georgia’s emergency rooms last year was an upper respiratory infection — mainly just a cold.” Treating that cold at a doctor’s office could cost $100; at the emergency room, $1,400. Non-emergencies added $33 million to emergency room expenses last year.

Who goes to the ER for a cold?

Apparently quite a few.

The solution?

create something he calls Safety Net Clinics for indigents, something similar to the clinics for paying patients now being added by chains such as Walgreens, Publix and CVS, which has 224 MinuteClinics across the nation and is opening 28 in the metro area.

This is an idea from a politician I can actually applaud.

The next step, then, is to increase affordability, by allowing consumers to shop for policies across state lines, free of mandates interest-groups have coerced state legislatures into adding on.

I have never understood this thought process. Policies in NY are higher than those in GA for a reason. When yankees start buying policies in Georgia and carting them back home where medical costs are higher do you think the carriers might catch on and reprice those products?

This is not like those who trek to NC to buy cigarettes and take them back home.

At least he made a good start.

Grand Rounds

This week's edition of Grand Rounds is hosted at The Efficient MD. There's a theme with this one: innovations in health care (and new tech). Clocking in at two dozen posts (including several blogs with two each, which I had thought was counter to GR guidelines, but what do I know?), this is one of the smaller 'Rounds I've seen in a while, which is actually quite nice (I'm sort of a quality over quantity kind of guy).

As a gadget-lover, I was intrigued by Gene Ostrovsky's report on a new type of wheelchair, one operated by essentially "thinking" at it. Skeptical? So was I, but the video that accompanies the post is compelling.

9/11: 2007

A year ago, we paid tribute to Jerome Robert Lohez, who perished in the flames and destruction of the World Trade Center.

In his memory, and those of his fellow Americans who died on that horrible day, I'm honored (if saddened) to reprise that post:

As regular InsureBlog readers know, my better half has long maintained that “there are no coincidences.” That is, she believes that everything happens for a reason, although we may not be aware just what that reason is.

As for me, I’ve gradually become 90% convinced that she’s right on this (in everything else, of course, she’s 100% right). But one evening, a few weeks ago, that all changed.

I have a confession: My name is Henry, and I’m a news junkie. It is my habit to stay up way too late reading news blogs. Which I was doing several weeks ago, when I came across an item about one man’s extraordinary effort [ed: back online] to harness the power of the blogosphere, in tribute to our fellow Americans who died in The Towers, exactly five years ago today.

The concept was deceptively simple: 2996 victims, 2996 blogs, each one remembering a single person. Bloggers were invited to sign up, and each was assigned – at random – one name.

Stop for a moment, and consider this: one blogger, reading one news item, decides it’s the right thing to do, signs up, and is assigned the name of a person he’s never even heard of, let alone met. We’ll come back to this shortly.

And so I was assigned the name of Jerome Robert Lohez, given a photo of him, and told the briefest of biographical information: age 30, lived in Jersey City, New Jersey.
That was it. A name, a face, a place.

The assignment was simple: On September 11, post his name and picture.

But I’m a news junkie, and that wasn’t good enough. I had to know more about Jerome. So I Googled his name (hey, why not?) and came across a site that CNN put together in December of ’01. It had pictures and names, of course, but I also learned that Jerome, born in France, married Dening Wu some three years before The Towers fell.

One month before The Towers fell, Jerome got his Green Card, and the happy couple flew to Europe to celebrate with his family. When they got back, two days before The Towers fell, Jerome told Dening “Only in New York do we have so much sunshine."

That was Sunday, September 9, 2001.

On Tuesday morning, he left for work. And The Towers fell.

And now we've come full circle: One. Random. Name.

Jerome didn’t just work in The Towers. He worked for Empire Blue Cross and Blue Shield. He worked in the insurance industry.

90% doesn’t cut it anymore.

Thank you, Jerome, for the lives you touched, the joy you brought, your love for New York and America, and for the privilege of paying you tribute.

Au revoir, Monsieur Lohez, au revoir.

Peanuts, Cracker Jack & Health Insurance

It's very odd to see a booth for state-sponsored health care planted under the bleachers at Boston's Fenway Park. Health insurance has a kiosk at the baseball game? The people manning the booth stand there hawking the program, directly across from the balloon guy and directly behind one of the dozens of beer stands where young men wait in line, six-deep, for 20-ounce beers.

State sponsored health care pitched at Fenway. What a novel idea.

The state will help you pay if you cant afford it. And the state has worked with a handful of insurance companies to offer several low cost policies that are much cheaper (family plan with drug coverage, $662 per month) than what the rest of us could buy on the open market, where the average price is $11,000.

The state will help you pay. Isn't that special.

Whose money are they using?

Lower cost policies.

Any guess how that 30%+ reduction is achieved?

It was hilarious to watch that stream of raving Red Sox fans juggling cheese dogs, tankers of beer-- and flyers for health insurance.

One has to wonder how much they pay for hot dogs & beer at Fenway. My daughter took me to see a Braves game for my birthday a week ago. That outing costs $10 for the seats, $6 to ride MARTA, $7 for a beer and $10 for the hot dog "meal".

Per person.

And the tickets were discounted.

We had fun and it is something I hope to repeat next year. I wonder if I could set up a booth hawking health insurance in the stadium?

Sure, it is not a much fun as quaffing a cold brew on a hot day but you gotta admit, it is different.

Please Sir, May I Have More?

Proposals to reduce the number of uninsured Colorado residents might cost more than $1 billion for state residents, employers, and the state and federal governments

Reducing the number of uninsured. Truly a noble gesture.

Two of the plans, proposed by the Colorado State Association for Health Underwriters and the Committee for Colorado Health Solutions, would require all state residents to obtain health insurance.

Mandated coverage. Great!

Under the plans, the state would provide subsidies to residents who cannot afford to obtain health insurance

Subsidies for the poor. Outstanding!

Of course we already know who is doing the subsidizing. It is the taxpayer. Rob from those who are financially successful and redistribute their wealth to the poor.

The report found that the SEIU plan would insure 40% of the current uninsured population, mostly through a new limited-benefit plan that would be offered by private insurers

Limited benefit plans.

Like putting a Bandaid on a severed artery.

Sounds like Charles Dickens Mr. Bumble is alive and well.

Carnival Monday!

Kevin, blogging at kmull, hosts this week's Carnival of Personal Finance. There are a lot of entries, some of which include context. He does have things well organized, with posts divvied into helpful categories.

When it was on, I absolutely loved Win Ben Stein's Money. Over at My Retirement Blog, the anonymous blogger reports that Ben's an advocate of variable annuities (tax advantaged savings vehicles with investment components). Who knew?!

And the Carnival of the Capitalists is now up at Entrepreneurs blog. It's chock full of posts. On the one hand, I like that blogger Scott Allen has a "Top 3;" on the other hand, it's obvious that he simply copied/pasted the template from Blog Carnival, with little effort at originality. Very few of the other posts reflect an actual reading of what was submitted.

One obvious and refreshing exception to that was this post by the Silicon Valley Blogger. He has a decalogue of insightful stories on various wealth-building models.

Now THAT'S a Really Bad Idea...

Seems a local couple hasn't really tried shopping for health insurance with a professional, independent agent who specializes in that field:

"The Riverside resident and his wife soon found plans that were affordable but discovered they were wrapped in restrictions, tied to minimum health care services and anchored to premiums that would skyrocket once the couple's health care costs reached a certain threshold."

That doesn't even make sense:

"affordable but...tied to restrictions."

Such as?

Well, the article doesn't say, but one can guess: a limited benefit (mini-med) plan comes to mind, as does any product from Mega Life (et al). Regardless, affordable coverage doesn't have to mean "restricted" coverage - if properly designed.

"tied to minimum health care services"

Again, I have no idea what that is supposed to mean. One might infer that it offers minimal cover for routine items, but so what?

"anchored to premiums that would skyrocket..."

First, individual plan premiums aren't tied directly to individual claims; they're "pooled" with the experience of other plan owners, which helps to levelize premium increases. Since we already know that rates are leveling off, this scenario seems unlikely.

So what do the Whorton's plan to do about this seeming impasse?

Glad you asked:

"Dan and Carly Whorton decided a savings account for their health care costs was the safer bet."

Now that's just brilliant! Why didn't I think of that? Oh, yeah, right: because it's a mindnumbingly dumb idea.

Why's that, you ask?

Simple: insurance companies pay their actuaries handsome salaries to determine the likelihood and severity of future claims. It seems a stretch that Mr Whorton, "a welder by trade," has the expertise to make accurate calculations about his family's medical expenses (not picking on welders: insurance agents, lawyers and burger flippers are equally ill-equipped). What happens, for example, if Mr W has a heart attack? Or Mrs W becomes pregnant? Or little baby W develops respiratory problems? How long will that bank account last?

Had Mr and Mrs W availed themselves of a competent advisor, they would have learned about Health Savings Accounts (for example), which would allow the W's to put money aside for future claims (on a tax advantaged basis, to boot) while enjoying the security of a health insurance plan for catastrophic claims such as noted above.

Hard to believe, but it gets dumber. In addressing the estimated 70,000 local folks (a number which the authors of the article never question, even though it's preposterously large) who are uninsured (at the moment), one local official opined:

"We hope to be able to make sure that everyone in Montgomery County has some type of health care"

Yoohoo, Mrs Lieberman, every single resident already has access to health care. They may or may not be insured, but care is most definitely available.

Of course, our local pols aren't the only ones with tunnel vision:

"I think it unconscionable that the wealthiest country in the world can't provide universal coverage for its citizens."

Thus spake Tom Breitenbach, CEO of Premier Health partners, which has had its own issues with providing health care. Of course, Mr B will be the first to complain about recent cuts in Medicare, touted as a potential "jumping off point" for a nationalized health care financing and delivery system.

And we all know how well that's working out.

How Much Do You Make?

Seems like someone at the Billings (Montana) Gazette got their panties in a wad over agent compensation.

Regarding insurance agent commissions, we reported in the story that Blue Cross paid out $15 million in sales commissions last year, or 3 percent of the entire premium dollar collected from customers.

Three percent? Wow! No wonder he was chaffed.

Wonder how much the state of Montana makes?

Insurance companies in Montana now do more than $2 billion worth of business every year. The insurance department collects more than $40 million dollars every year for the state government through submittal of fees and premium taxes.

My calculator says 2% commission.

And what does the state do to earn their commission?

Not much.

So that's 3% to be active in the sales & service of the accounts and 2% to do nothing.

But back to the topic at hand . . .

Blue Cross won't reveal the amounts paid to top agents, but did confirm it has about 120 agents selling its policies.

Out of 24,000 agents in Montana, only 120 sell coverage for Blue.

That's a stretch.

Sources familiar with the company also told the Gazette State Bureau that as much as 80 percent of commissions goes to about half the agents, who are the top sellers in the state.

And your point is?

Seems to me that Mike Dennison has a case of paycheck envy.

States Gone Wild

Like alcohol induced antics on spring break, states have enacted anti-insurance legislation over the past few years with drunken abandon.

The results have not been pretty.

In a report commissioned by AHIP and numbers crunched by Milliman, the financial outcome of legislation designed to make health care more accessible is a disaster.

In 1994 the Kentucky legislature adopted rules requiring carriers to offer guaranteed issue individual medical insurance plans and institute community rating.

(Guaranteed issue means policies are issued to anyone who applies regardless of their current health.

Community rating is a formula whereby everyone within a specific geographic area pays the same rate regardless of health. Carriers may, in some situations, charge different rates based on age or gender but may not charge more to someone at deaths door than they would someone in perfect health.)

The result was an almost immediate exodus of 40 carriers from the individual market in Kentucky.

In 1998 community rating was repealed. In 2000 guaranteed issue was repealed.

In 1994 New Hampshire adopted guaranteed issue and a modified community rating model. Prior to the legislation about a dozen companies offered individual major medical. Only one carrier entered the market in NH after the legislation. In 1997 they exited the market due to heavy losses.

By 2000 only two carriers domiciled outside of NH were still in the market.

In 2002 both the guaranteed issue and modified community rating rules were repealed.

Since the repeal of these provisions the number of insured lives in the individual market has risen from 7,119 to 36,143. During this same time the average monthly premium for individual coverage has dropped from $144.34 to $141.85.

In 1993 New Jersey enacted legislation requiring guaranteed issue AND guaranteed renewal. They also required community rating and standardized plan designs.

In 1993 157,000 residents had individual health insurance. By 2006 the number had dropped to 83,000.

At this time NJ still maintains guaranteed issue and community rating requirements.

In 1992 Vermont adopted guaranteed issue and community rating.

In 1994 31,247 residents were covered by individual major medical plans at an average annual premium of $806. By 2005 this number had dropped to 9422 and an average annual premium of $2769.

This is what can happen when states go wild.