Nothing is Automatic

I worked for a carrier a number of years ago that sold group term life insurance and practically nothing else. It was a relatively simple job. You write a case and at renewal tell the client their rate will be the same as it was last year.

I used to tell people there was nothing to this. The policy was simple. If you die we pay if you don't we don't.

It doesn't get much more simple than that.

But the life insurance business isn't always that easy. Take the case of Heath Ledger.

Heath is an actor who died earlier this year. He is best known for his role in Brokeback Mountain and more recently, as the Joker in the Batman flick, The Dark Knight.

According to reports Heath died of "an accidental drug overdose."

He had a $10,000,000 policy through ING/ReliaStar.

Paying the claim should be a no brainer, right?

Not necessarily.

ReliaStar states in its legal response it is seeking more information about whether Ledger may have lied on paperwork and about whether his death may have been a suicide.

May have lied . . . on his application.

May have . . . been a suicide.

Sounds like they don't want to turn loose of the $10M.

Can't say I blame them. That's a lot of money.

William Shernoff, the lawyer representing LaViolette and Matilda Rose, said ReliaStar has told him it will seek the depositions of a masseuse who found Ledger's body and of actress Mary-Kate Olsen, who received a flurry of phone calls after the body was found.

The insurance company's lawyers also want to question Ledger's co-stars, agents and doctors, Shernoff said.

Most folks don't know it, but the carrier has 2 years after the policy is issued to review all pertinent facts and make a decision if the contract (and any ensuing claim) is valid. Almost all death claims that occur within the first 2 years are fully explored to determine if relevant information was withheld, intentionally or otherwise, from the application.

Nothing is automatic.

Not even death claims.

Grand Rounds: This Means War

Medical student and medblogger Jeffrey Leow hosts this week's roundup of the best medblogs around. Jeffrey's theme is "War;" and it's pretty intense. Interspersed among the terrific posts are haunting photographs that remind us why medicine and war go together.

L'Shannah Tova 5769

According to Jewish tradition, the world was created almost 6,000 years ago (of course, in those days, years were apparently a lot longer than they are now. Go figure). And so we celebrate the passing of another year, while welcoming the fresh start offered by the new one.

As with any holiday, there are associated traditions, customs and activities. When our family transitioned to Conservative Judaism some eight years ago, we adopted the practice of attending synagogue services for two days, not just one. It sounds counter-intuitive, of course: New Year's Day would seem to be, by definition, just the one day. But there's actually a very good reason for such an expansion: the opportunity for more food.

No, not really:

"Rosh Hashanah is celebrated as two days everywhere (in Israel and outside Israel), because it occurs on the first day of a month. Messengers were not dispatched on the holiday, so even people in Israel did not know whether a new moon had been observed, and everybody celebrated two days. The practice was also maintained as a custom after the mathematical calendar was adopted."

May the New Year be one of blessing, peace and health for all of our readers.

L'Shannah Tova!

Just What the Doctor (Val) Ordered

We're indeed honored to have Dr Val Jones guest-blogging here at IB. In Part 1, she identified some of the wasteful expenditures to which health insurance companies are prone. Now, we'll learn about some possible alternatives and solutions:

Unfortunately, the cognitive therapy- compliance solution hasn’t been sufficiently incentivized. Physicians are poorly compensated for teaching patients how to stay well, and highly compensated for performing procedures. Primary care physicians in particular are struggling to cover their office overhead as their work is undervalued and underpaid in comparison to their peers.

What should we do? Third party payers should fight the urge to reward care that can be quantified with spreadsheets and check boxes (e.g. procedures) and compensate cognitive services at a rate that would improve behavior modification and treatment compliance. That $50/visit that insurance companies are saving by low-balling PCP visits may be costing them 177 billion/year.

Do I think that (given enough time) a primary care provider could help their patients achieve a 100% compliance rate? No way. But I bet they could improve it by 20-30%. And that would save lives, reduce complication rates, decrease costs, and improve the health of many with chronic diseases.

Improving medication compliance, combating chronic disease, and helping America become a “wellness culture” begins with a solid primary care base. The health of the insurance industry (and pharmaceutical industry) rests in the hands of the very physicians who are currently being run out of business with decreasing reimbursements and increasing overhead.

Let’s change that.

Thanks to Dr Val for stopping by, and sharing with us a vision from inside the health care side of the table. We'll let our readers know right away when her new blog goes live.

Food Pyramid Alert: Cocoa No-No

Last Spring, Bob touted chocolate's many benefits for expectant mothers, and a year earlier I reported on its ability to lower blood pressure. There's a fine line though, between low BP and no BP:

"A Cadbury spokesman says preliminary tests show melamine in its Chinese-made chocolates."

Turns out, some of the "milk" in Cadbury's "milk chocolate" came from China, and has been found to be tainted with melamine, "which is used to make plastics and fertilizer," but doesn't seem to have a place in candy-making.

The British sweets giant isn't alone in its concern: "(T)wo U.S. food makers were investigating Indonesian claims that high traces of melamine were found in Chinese-made Oreos, M&Ms and Snickers."

Cookies and candy bars? I may have to switch to 'Nilla Wafers and Marshmallow Fluff.

Some futures are not much fun to contemplate - IX

A few days ago I read that ‘socialized medicine’ is when the doctors are employees of the state and the hospitals, drugstores, home health agencies and other facilities are owned and controlled by the government.

That's as good a definition as any.

But most people don't care about definitions like this because they already know what they want.

And IMO most people already know that they want a single-payer health care system, even though what most people really mean, but don't know that they mean it, is a single-payer health-insurance system but never mind that technicality because everyone knows that our health care delivery system is, like, broken, and everyone also knows that a single payer whatever-it-is will fix our broken health care delivery system and, even if it doesn't, people won't need to worry any more that health care is expensive because the government or someone else will pay for it, so when anyone wants any kind of health service it will promptly be provided to them by the world's best professionals and paid for without serious challenge at nominal or zero personal cost to them, and that will mean we all live longer, healthier lives, we can drink and eat whatever we wish, infant mortality will disappear and, oh yeah, all our children will grow up handsome and above average, and even though the experts disagree sometimes sharply over the impact of single-payer whatever-it-is, and, even though people don't really care to know the whole truth about other countries’ experience with single-payer whatever-it-is, that doesn't, like, matter because everyone knows single-payer whatever-it-is works better than whatever it is we have now because Michael Moore told us so, and therefore it’s obvious that we need to change the old whatever-it-is to the new whatever-it-is as soon as possible and the problems are all George Bush’s fault anyway.

Something like that.

So I think there is no doubt that socialized something-or-other is coming to the U.S.

And that right soon.

It's Actually a "Good Thing"

[Welcome Kaiser Network readers!]

At a consumer bulletin board that Bob and I frequent, a commenter posted a recent NYT article on Presidential contender Sen John McCain's health care proposal. A key point made in the column, which was penned by Bob Herbet, was that "the radical changes that John McCain and Sarah Palin are planning for the nation’s health insurance system...set in motion nothing less than the dismantling of the employer-based coverage that protects most American families."

For some unknown reason, Mr Herbert seems to think that this would be a bad thing, and I responded to the poster that this was unfortunate. I'd like to share with our readers an expanded version of that response, including a few points that also seem relevant.

First, it's important to note that such a substantive change is unlikely to occur any time soon. It would, however, be a good thing.

To understand why, it's necessary to understand that employer-based coverage is a relatively recent development. It came about during WWII, when wages were frozen, and employers sought ways to increase workers' compensation through non-cash means.

It is essentially a destructive influence:

Employers do not pay for employees' health insurance. Never have, never will. They simply redirect a portion of their employees' wages directly to the insurance company. They receive a tax benefit for doing so, and the employee is none the wiser.

Employers don't pay for our home or auto insurance, either, but no one complains about that. They don't provide our groceries or house, and again, no one complains. An employer pays one a wage, from which one buys appropriate auto and home insurance, chooses which groceries to buy, and whether to buy a house or rent an apartment.

Why, then, should health insurance be any different?

In point of fact, there are some very good reasons why our employers don't buy our groceries for us: for example, Bob enjoys seafood, whereas I'm enjoined from eating it at all (not that I didn't enjoy it, back in the day). If an employer attempted to satisfy all his employees' food needs and preferences, imagine the accounting mess that would ensue. Likewise with cars: Bill's Porsche Boxster suits him fine, but we really need the mini-van. And while Mike's penthouse condo is spacious enough, I really like sitting out in the backyard, enjoying an adult beverage and the nocturnal symphony provided by the crickets, et al.

For some reason, though, the one-size-fits-all (but, of course, not very well) theory behind group insurance is deemed satisfactory. Yes, large corporations can set up "cafeteria plans," offering a variety of optional benefits. But what if the coverage I need is not among the handful available? Wouldn't it make more sense for me to buy the coverage I need and want, rather than the one "forced upon" me by my employer?

[ed: Of course, no one is "forced" to buy insurance in this fashion; but there are substantial economic costs in failing to do so.]

There are, of course, several challenges to moving away from employer-sponsored, or "group," plans, not least among them being underwriting and coverage of pre-existing conditions. But these are not insurmountable problems, and would have to be addressed in such a transition.

Still, I believe that the basic idea is sound, and attractive.

La Plus ca Change...

Recently, I was cleaning out an overstuffed filing cabinet, and came across an Op-Ed I'd written for the Dayton Daily News some time ago.

Over 15 years ago, in fact.

Re-reading it, I was struck by just how little has changed in the past decade-and-a-half; and, of course, by some of the progress we've made. It occurred to me that our readers might find it interesting, as well.

Oh, and see if you can spot the sentence that would one day become the overarching meme of InsureBlog:

[Click article to enlarge]

Diagnosis Code "Z"

Patient - "Well doc, how bad is it?"

Doc - "It appears you have zzzzzzzzzzzzz."

Patient - "Is that bad?"

Doc - "Hard to say. But don't worry. Medicare has you covered."

The government paid more than $1 billion in questionable Medicare claims for medical supplies that showed little relation to a patient’s condition, including blood glucose strips for sexual impotence and special diabetic shoes for leg amputees, congressional investigators say.

Billions more in taxpayer dollars may have been wasted over the last decade because the government-run health program for the elderly and disabled paid out claims with blank or invalid diagnosis codes, such as a “?” or “zzzzz.” Medicare officials say even smiley-face icons could have been accepted.

OK, compared to the Wall Street mess, a billion dollars seems like chump change. But it does make you wonder if anyone in Washington is minding the store.

I mean, smiley-face icons and shoes for amputees? Give me a break.

The report by Republicans on the Senate Homeland Security investigations subcommittee, obtained by The Associated Press, is the latest to detail lax oversight in the $400 billion program that has been cited by government auditors as a high-risk for fraud and waste for nearly 20 years.

Going on for 20 years. That's 10 years before the mortgage mess got started . . . courtesy of, you guessed it, the folks in Washington.

The panel’s review of millions of claims submitted by sellers of wheelchairs, drugs and other medical supplies on behalf of Medicare patients from 2001 to 2006 found at least $1 billion in which the listed diagnosis code appeared to have little, if any, connection to the reimbursed medical item.

Doc - "Looks like you have a touch of flu. What do you say I write a prescription for one of those scooters?"

Other questionable claims included wheelchairs or wheelchair accessories for patients listed as having a deformed nose or sprained wrist;

Questionable claims . . . but they were paid any way.

CMS has acknowledged that its medical equipment program is susceptible to fraud and waste, estimating in 2007 that $1 billion of the roughly $10 billion in Medicare payments over a one-year period were improper. A recent report by the HHS inspector general suggested that annual waste could actually be as high as $2.8 billion, citing particularly shoddy government oversight.

Guess it's a good thing Medicare isn't in the lending business.

Political Insurance

We are not a poli-blog (political blog), but occasionally politics intrudes on insurance.

Or insurance intrudes on politics:

"If the U.S. presidency were an insurance policy, both John McCain and Barack Obama would be cleared for coverage."

In health insurance (which is probably the most common subject on which we post), risk is based on morbidity: the chances that one will become ill or injured. Life insurance risk is predicated on something called mortality: the chances that someone will die in a specified period of time. Thus we have "mortality tables;" essentially spreadsheets that presume that a certain number of people will die at a certain age, or how long folks of a certain age are likely to live.

Given that one of the contenders for President of these United States is 72 years old, and has had previous brushes with cancer, it seems relevant to ask whether that person is likely to die while in office (of course, there's a 100% chance that any person will die, eventually).

It's said that the difference between an extroverted accountant and an extroverted actuary is that the actuary, as he walks along, looks at other people's feet. In the event, an actuary's job is to help the insurance company "evaluate the likelihood of events and quantify the contingent outcomes in order to minimize losses, both emotional and financial, associated with uncertain undesirable events." These folks enable the insurer to appropriately "price the risk."

Since the younger candidate has a history of smoking (and, of course, inhaling), there is some question about his expected health, as well. Most life insurers charge much higher premiums for smokers than non-, a reflection of the increased risk of that person dying "on the company's dime."

The good news is that, health histories notwithstanding, it appears that neither candidate is likely to die (of natural causes) while in office. Since an actuary literally puts the insurance company's money where his (or her) own mouth is, that seems pretty final.

Oh, probably need to find a better way to put that.

Dr Val Pays a Housecall (to IB)

Medblog maven Dr Val Jones is a graduate of Columbia University College of Physicians and Surgeons, and completed her residency in Physical Medicine and Rehabilitation at Saint Vincent's Hospital in New York City. Formerly blogging at Revolution Health, she's recently "gone Indie." Her new blog isn't online yet, but we're expecting great things from her there.

In this first of a two-part guest-blog series, Dr Val asks if perhaps there might be some wasteful spending in the health insurance arena:

Are Health Insurance Dollars Being Wasted Due To Medication Non-Compliance?

In case the answer to that question isn’t obvious, it is a resounding “yes.” Non-compliance costs the health insurance industry a staggering 177 billion dollars a year. It is estimated that fifty percent of patients forget to take their meds and over 30 percent don't refill their prescriptions. Twenty percent say they don't take the full course of treatment and fifty percent of patients don't take drugs as directed. So much for preventing that heart attack, stroke, or limb amputation.

The health insurance industry (as well as pharmaceutical companies) have invested heavily in patient compliance initiatives, most of which have failed to produce substantially improved outcomes. The reason? Although there are quite a few variables here, I believe that the common denominator is that medication reminders, text messages, automated emails, online educational materials, brochures and handouts are all missing the human element. The most dramatic power of persuasion rests with the patient’s healthcare provider – when a caring physician takes the time to look their patient in the eye and carefully explain why missing that medication could result in them eventually missing a limb, patients often take heed. This is the kind of conversation that galvanized Governor Mike Huckabee into losing 110 pounds through diet and lifestyle changes, and probably saved his life.

Of course, behavior modification may not require a face-to-face encounter, though it still needs a caring connection. I’ve had great success with an online weight loss initiative where I offer guidance and information to those seeking healthy weight loss strategies. Because I’m regularly present in the group, genuinely concerned, and offer accurate and helpful information as a credible source – my membership is 10 times larger than any other expert-led group. Although I can’t confirm the weight loss reported by the members since I don’t see them in my office, I believe that there are substantial health improvements occurring.

In Part 2, Dr Val will offer some possible solutions to this dilemna.

Cavalcade of Risk #61 now online!

American Consumer News' Debbie Dragon hosts her debut edition of the Cavalcade of Risk. As usual, there are lots of great choices, from health care to Fannie & Freddie.

Don't miss it!

And don't be afraid to host your own Cav, just drop us a line to reserve your slot.

Vindicated!

[Welcome Kaiser readers!]

Many times over the years, we've debunked "The Myth of the 47 Million" uninsured. Many of these folks can afford at least catastrophic coverage, while many others are eligible for government-sponsored plans but choose not to enroll. Still others are illegal aliens who access our first-class health care system at no (or little) cost to themselves.

Now, DC Examiner columnist Sally Pipes has startling new evidence busting this myth. According to the most recent Census figures, that "47 million" has dropped almost 3%, to just over 45 million. While that in itself is, of course, good news, it's her analysis of that 45 million that really illustrates the nature of the problem.

First, she divvies the total into 4 distinct sub-groups: the "invincibles;" young people who choose not to spend their hard earned cash on frivolous items like health insurance, opting instead for iPhones and DirectTV. Second, over 30% make over $50,000 a year. While that's not knockin' on T Boone Pickens' door, it's certainly not peanuts. Third, over 20% are, in fact, in this country illegally. One supposes a national health plan would have to cover these folks, as well. Lastly, 14 million, or another third, of the total are eligible for programs such as S-CHIP, but fail to take advantage of them. Again, that's a choice, folks, not a plight.

In fact, Ms Pipes sites a recent Georgetown University Health Policy Institute study that found that over 70% of uninsured kids are eligible for one or more government-sponsored health care programs, but their (irresponsible) parents choose not to enroll them. Whose fault is that?

At the other end of the spectrum, the Urban Institute reports that over a quarter of Americans eligible for Medicaid choose not to sign up, and go naked (well, at least as regards health insurance). Again, if folks choose to be irresponsible, how is that "the system's" fault?

Add to this the fact that many of the folks who are without health insurance at a given time later pick up coverage. This is called a "rolling population," and represents another chunk of the total. In fact, when one digs deep enough, one finds that only 8 million folks can be classified as "chronically uninsured;" that's still a problem, of course, but a much more manageable one, and puts the lie to the canard that our system is irretrievably broken.

As they say, read the whole thing.

[Hat Tip: Power Line]

5th Anniversary Grand Rounds

Dr Val Jones, currently "between blogs," hosts this week's compendium of all that's good from the medblogs. Grand Rounds founder KevinMD has graciously allowed Dr Val to guest-blog at his site, and the results are spectacular. If you're not familiar with the 'Rounds, it's really worth your time to see how many great health bloggers are out there.

And if you're a "regular," you'll be impressed with the scope of this one.

Bueller? Bueller?

An article in the September 22nd Wall Street Journal commented on the effect the economy is having on some medical utilization – especially prescriptions and doctors’ visits.

One of the most worrisome phenomena of the U.S. health care environment has been high utilization and even over-utilization of health care services. So it’s not immediately clear that a reduction in utilization is ipso facto a bad thing. For some people, it surely is – and a few of those people were interviewed for this article. But is all reduction in utilization a bad thing? At best, that is an open question.

Two charts accompany the WSJ article. One shows that the rate of increase in prescriptions filled has steadily declined since 1999, and is now negative. The other shows that doctors visits have declined in absolute numbers by about 4% since 2007.

These charts got my attention.

One frequently hears the argument, both implicitly and explicitly, that fewer prescriptions filled and fewer physician visits must result in worsening health condition for our population. However, both charts show very sharp increases in prescriptions filled 1998-1999 and in physician visits 2003-2005. I seem to have missed the reporting of correspondingly sharp improvements in the health of our population during those periods.

Anyone have those stories that I missed? Anyone? Bueller?

Top 100: Another Resource & Accolade

The folks at RN Central have compiled a list of top Health Care Policy blogs, everything from Pediatrics to Politics. We're honored to be listed at the top of the Health Insurance and Coverage category.

Check it out.

Carnival of Personal Finance is up

Hosted this week by Aryn at Sound Money Matters, the venerable Carnival of Personal Finance is all about your wallet, and how to keep it full.

Beyond the Anecdote

It seems a recent post (Be Careful What you Wish For) touched off a firestorm of challenges to the incidents reported by our guest poster.

For some reason, situations as told by those who have direct knowledge are dismissed as anecdotal. But those same stories, if posted in the press, are given credence.

Apparently reporters, who are notorious for missing pertinent details, are credible while those who have lived the experience are not.

It's not like we are telling stories about little green men in flying saucers.

None the less, for those who want to challenge the linked article about high risk pregnancies being transported to the U.S., we wanted to help you out. Apparently your Google skills need some work.

Some Canadian women needing specialized care for anticipated high-risk preterm births are coming to Spokane to deliver their babies due to a spike in such births north of the border and a shortage of neonatal facilities and specialists there.

So far, though, all such births here—involving solely British Columbia residents—are being handled primarily at Deaconess Medical Center, which has 44 neonatal intensive care beds, under an arrangement through which the hospital is being reimbursed by the British Columbia Ministry of Health.

And there is this:

Could you imagine having your baby 10 weeks early, it has to be airlifted to a hospital in another country and you can’t be there with them because of a passport issue?

This is exactly what happened to a B.C. mom who was refused travel with her newborn preemie due to the fact that she didn’t have a Canadian passport.

The health minister got involved blaming the whole mix up on a U.S. customs official. Protocols are in place between the U.S. and Canada that are supposed to allow patients to be transferred across the border without delays caused by passport regulations.

Protocols are in place. This suggests the practice is a regular event.

Carri Ash of Chilliwack, B.C. was sent to the U.S. to have her baby after her water broke on Sunday, ten weeks ahead of schedule.

"And they came in and said 'you're going to Seattle,'" she said.

Ash's hospital couldn't handle the high-risk pregnancy. Doctors searched for another hospital bed, but even hospitals in Vancouver, B.C. didn't have a neo-natal bed.

Sounds anecdotal to me.

As the Toronto Globe & Mail explains, Jepp and her husband, J.P., were sent across the border because no neonatal intensive care unit in Canada had enough beds for them. She was two-centimeters dilated and having contractions when airlifted 300 miles.

Who makes up this stuff? After all, the Canadian system is far superior to ours.

Stupid Regulator Tricks

Let's say that you're the Utilities Commissioner of your state, responsible for overseeing the conduct of the electric and phone companies. Would it not be an insurmountable conflict of interest for you to resign your post to become president of your local electric company?

Of course it would, and there are laws against it.

Same thing with insurance commissioners, right?

Sadly, no:

Walter Bell was, until last month, the Insurance Commissioner for the state of Alabama, and the immediate past president of the National Association of Insurance Commissioners. One would think that a person in this position would be enjoined from leaving one's post to take a job with an insurance company which does business in one's state.

One would be wrong.

Oh, sure, both the state and the NAIC have rules against this sort of thing, but these rules apparently read:

"Thou shalt not jump directly from thy high and exalted regulatory position to become an executive of an insurance company."

(I'm paraphrasing, of course: "high and exalted" would really read "reasonably but not extravagantly compensated.")

Quick: what's missing from that little law?

If you said "or else what?" you win a cheroot.

Absent any "teeth," such rules are meaningless, a fact which apparently did not escape the notice of the aforementioned Mr Bell. He's now the Chairman of Swiss Re, a large reinsurance carrier which is connected to many insurers which do business in the Yellowhammer State.

In fairness, his response is along the lines of "well, I'm not working for the companies I regulated, just the company that owns the companies I regulated. Big difference, bub."

Well gee, kinda hard to argue with logic like that, right?

And it's not as if his job entails any kind of lobbying on behalf of Swiss Re with his erstwhile colleagues: he'll only "oversee and direct regulatory and public affairs for all of Swiss Re’s North America businesses."

Nope, no conflict of interest there, nothing to see, move along.

And folks wonder why the insurance industry is held in such low regard.

AIG UPDATE: Meanwhile, several days in, neither of the primary life or health insurance agents associations have anything on their sites relating to the recent AIG debacle. Of course, this is no surprise: they're most likely still trying to figure out how to spin this as "a good thing."

And the PIA (which is geared more toward P&C agents) has a news release announcing the acquisition, but no official statement regarding it. Again, why would this obscure, indeed trivial story be of interest to insurance agents?

Cavalcade of Risk #61: Submissions Due

Debbie Dragon makes her CoR debut next week. Please help her out by submitting your post by Monday (the 22nd), and be sure to 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 your post via Blog Carnival or email.

We're scheduling mid-Fall Cavs, so please drop us a line to reserve yours.

Collateral Damage: AIG and A M Best

A M Best is dead to me. The venerable (if not venerated) insurance rating service has lost whatever credibility it may have had.

Gee, Henry, what brought that on?

I'm so glad you asked. Propitiously, this morning's mail brought the September issue of Best's Review (a magazine published by the company), and a bonus booklet explaining how carrier ratings are assigned. "The Guide to Understanding Insurance Ratings" is chock full of interesting and potentially useful facts, figures and anecdotes, and provides a glimpse "behind the scenes" of how Best ratings are determined.

The Guide walks folks through the rating process, explaining various tests and thresholds that ultimately determine whether a carrier's an A or an F (or somewhere in between).

Problem is, as late as this summer, Best rated AIG as A+ (Superior). In contrast, as of last December, Weiss Ratings had AIG as a B+; they actually downgraded the carrier some 5 years ago. AIG's problems didn't happen overnight, yet they continued to enjoy one of A M Best's top ratings. Talk about asleep at the switch.

But wait, it gets worse:

Near the beginning of the guide, there are stories of some of the most spectacular and well-known carrier failures in the past 3 decades. The Guide does an admirable job describing the events and factors contributing to these massive failures, but never once mentions the carriers' A M Best rating at the time of, um, fizzlement.

I know, though, that at least two of those listed were A or A+ at the time of their demise.

And what was the most common cause associated with these failures? If you guessed "risky investments" and "too much real estate" you win a cheroot.

Sound familiar?

Believe it or not, it gets even more egregious. See if this rings a bell (from "The Guide to Understanding Insurance Ratings"):

"During the last decade of the ... Century, leading life insurers were enjoying a great accumulation of capital as many smaller rivals went under ... soon the insurance companies were flowing assets ... for large scale ... projects. This move essentially put the insurance companies into the banking business, corrupting the nature of what historically had been a conservative industry.

This relationship between the executives of big life insurance companies and ... Wall Street ... did not go unnoticed ... an investigative committee was formed to examine ... insurance companies and make recommendations for regulatory reform."

Sorry for all the ellipses, but I wanted to make this point: all of the above took place in the early 20th Century, over a hundred years ago. Has anything really changed? Has A M Best learned nothing?!

It would seem so.

Quick Note on Comments

With the power and connectivity issues we're dealing with here in Southwest Ohio, it's challenging for me to get comments approved quickly. We appreciate your patience on this, and rest assured that it's not a content issue, just availability.

UPDATE: All good now.

Well, except for the siding that blew off the blogroll. But I'm pretty sure we're covered.

Some Thoughts on AIG

Inasmuch as this is a blog about insurance, it seemed obvious that we'd want to comment on the recent events surrounding our acquisition of the largest American insurance company. The issues are, of course, complex and somewhat disturbing. I've asked Bob to put together a more comprehensive piece, so I don't want to step on any toes (no pressure there, Bob). But I have some preliminary observations that I'd like to share.

Oh, you're wondering about that first sentence: our acquisition of AIG.

Like it or not, you and I just bought an insurance company. As we've repeatedly pointed out here at IB, the gummint has no money. It has the power to take money from thee and me, which is how it pays its bills (or not). So while it's convenient to say that the Fed has "bailed out" a massive financial institution, it's more accurate to say that you and I just bought it.

Did we get a good deal?

At this point, it's impossible to say. For one thing, it seems to me that although this looks like Fannie and Freddie, it's really not. Those were quasi-government entities to begin with, while AIG is - or was - a publicly traded company wholly in the private sector. It seems to me that there are a number of issues; I'll touch on just a few:

First, insurance is a highly competitive business. Carriers often operate on razor-thin margins, and try very hard to build market share with the resources available to them. But that's all they have: the resources on hand. AIG, however, now has the ultimate reinsurer: the US Government. Or, to be more precise, the US Taxpayer.

Second, what kind of signal does this send to the rest of the market? It's no great stretch to say that carriers can now comfortably take even more substantial risks, secure in the belief that, should they not pan out, you and I will step up to the plate for them, as well. That doesn't bode well, particularly when one stops to think about the nature of risk itself. The message here, whether intentional or not (and I'm reasonably certain that it wasn't), is that carriers are now free to assess risk with a much more liberal attitude.

Finally, it bothers me that an industry that has long fought to keep regulation at the state level isn't screaming out loud at federal intervention. Yes, a carrier failure of this magnitude would send major shockwaves through all kinds of financial sectors, but ultimately, state guaranty funds are there for a reason. As are state regulators. I think the industry is making a very big mistake by accepting this situation with nary a whimper.

Okay, that's where I am right now, and I suspect that my co-bloggers will be sharing their thoughts, as well. Obviously, there's nothing we can do about this except to deal with the new paradigm.

I just think that this particular change was ill-advised.

Health Wonk Review is up!

Jaan Sidorov makes his HWR hosting debut in rip-roarin' fashion. It's heavy on the politics, which is entirely appropriate this time of year. I especially like how he summarizes each entry; it's obvious that he read each and every one.

Kudos, Jaan!

HDHP: By the Numbers

[Welcome Kaiser readers!]

At my request, FoIB Rick Byrne sent me some interesting new stats on enrollment numbers vis: High Deductible Health Plans. Earlier this month, I noted industry-wide numbers reflecting major growth in the number of folks signing up for HSA's and other consumer driven health plans.

Warning: Extreme wonkiness and geekitude follow.

Rick has graciously shared some carrier-specific info, and agreed to let me share it with our readers. Of course, as a Buckeye, I was most interested in how many Ohio insureds went the HDHP route, and I wasn't disappointed. Aetna Health Fund reports some 35,000 Ohio enrollees, although they didn't specify whether these were HSA's, HRA's or some other configuration. Texas led the list, with over 46,000 folks opting for one of these types of plans.

Interestingly, California placed only third, with just over 30,000.

CIGNA's numbers reflect those consumer who chose Health Savings Accounts (HSAs), and once again, the Lone Star State led the pack, with almost 68,000 participants. North Carolina took second place, with almost 60,000, and California again managed only to "show,: reporting just over 40,000 enrollees.

Health insurance Bad Boy UnitedHealthcare reported their HRA and HSA numbers as a group, so we don't have a breakdown by configuration. I'd like to have that, because it's my opinion that Health Reimbursement Arrangements (HRAs) are more likely to result in overutilization than their HSA cousins.

UHC's Sunshine State insureds beat out the folks from Texas by over 70,000 participants. New York took the third place slot, while Ohio was a distant fourth.

So what does this all mean?

I think that it indicates a growing acceptance of consumer-centric health care. After all, when the insured has "skin in the game," he's more likely to be interested in actual cost of care, not just premium outlay. Of course, this is by no means an overwhelming endorsement: after all, we're talking about tens of thousands of folks out of millions who may be eligible. Still, I think it's a positive sign that folks are beginning to understand that low co-pays and expensive drug cards may not be the most efficient use of their health care dollars.

Belated Carnival Huzzahs

Given the level of destruction in the Gulf Coast and on Wall Street, readers may be forgiven for not knowing that the remnants of Hurricane (I Don't Like) Ike left a trail of tears here in Southwestern Ohio, as well. We've been without power (and hence, 'Net access) since Sunday afternoon. Of course, the rest of the country, and the blogosphere, went on without us, so we have some catching up to do.

First, the Carnival of Personal Finance went live yesterday, hosted by Dorian Wales, the Personal Financier. It's chock full of helpful finance-related items, from credit to budgeting.

And Nurse Ratched hosts this week's round-up of medblog posts at Grand Rounds. This collection of posts features everyone from doctors to insurance agents (even former Peace Corps volunteers).

Mo Money

Education is broken. The solution?

Mo money.

The economy is broken. The solution?

Mo money (higher tax rates).

The health care system is broken. The solution?

Mo money.

And who has mo money than anyone? Certainly not the government. They are flat broke to the tune of $9.3 TRILLION.

Wealthy individuals? Sure. Tax the wealthy. No problem right?

Unless of course you need a job.

You only have two choices when you want a job.

Work for the government, or work for a rich person. Over-tax the rich person and where do the jobs go?

OK then. How about the insurance companies? They have lot's of money lying around.

It seems Dr. Rhonda Medows wants to do just that.

The state of Georgia is running short of cash. Funding may not be available for education, government jobs . . . or health care.

So what is her solution?

Ask health insurance companies to pony up the money.

But I am getting ahead of myself. Let's look at how this idea evolved.

More than half of Georgia’s population is excluded from private health insurance.

Really? How did she arrive at that conclusion?

Approximately 38 percent of Georgians receive health care through government-funded programs, i.e. Medicare, Medicaid, PeachCare, etc. An additional 17 percent are uninsured and receive some care from safety net clinics funded in part by local, state and federal governments.

If her figures are correct, then 55% of the population is already covered as a result of taxes. Apparently Dr. Medows is unclear on how governments derive their income.

And why should carriers make a contribution to this plan?

Hopefully the health insurance companies will choose to contribute this as civic rent to assist with a societal need as opposed to passing more costs onto their remaining clients.

Civic rent.

And where will this money come from?

Higher prices.

Comment to Dr. Medows. The government doesn't have any money of their own. Businesses do not pay taxes (or civic rent).

The government derives income from taxpayers. Businesses derive income from customers.

Bottom line is, we all pay.

(Thanks to Paul Manchester for the tip)

Mandated Missteps

[Welcome Kaiser Blog Watch readers!]

One of the problems with requiring everyone to buy health insurance is that, absent sufficient "teeth" to enforce such a rule, healthy (read: young) folks just aren't that interested in complying. That is, unless the gummint makes it more painful to not buy coverage than to do so, people are more likely to ignore any such requirement.

We saw this in Massachusetts, where folks who failed to play along lost an exemption worth about $200. Compared to potentially thousands of dollars for insurance premiums, who can blame them? Young, healthy people aren't stupid: if you don't hurt them in the wallet, a lot of them are just going to say "the heck with it."

And if, at the same time, the system causes the cost of health insurance to increase, you're going to get even less compliance.

Don't believe me?

"The coverage guarantee is not a new concept. But it has had a troubled history in several states that tried it for people seeking coverage through the insurance market. Some states, such as Kentucky and South Dakota, eventually dropped the guarantee after insurers left. In the few states where guaranteed coverage continues, monthly premiums generally are much higher for younger, healthier people than in nearby states."

But what does that mean?

"[Young people are] very price sensitive. They're healthy. They think they're invincible and getting them to buy coverage is a challenge. If it's expensive, they'll walk away," said Mary Lehnhard, a senior vice president at Blue Cross and Blue Shield Association."

One way to do that, of course, is to punish these "invincibles" who choose to opt out. But of course, these "shirkers" are mobile, as well, so there's every reason to believe that they'll vote with their feet, to a more economically-friendly clime.

But even in those states where this experiment has been tried, the result has been less than, well, optimal:

"South Dakota enacted the guarantee mandate in 1995. By 2001, claims exceeded the premiums collected by $2 million. By 2003, the state was down to only three major insurers; one, American Family Insurance Group, notified state officials that it was about to leave, too."

Ooops.

The solution?

"Within months, the South Dakota Legislature passed a bill that relieved the private insurers of their most costly customers. Those people are still insured, but as part of a high-risk pool. The state pays expenses that are over and above the premiums collected."

Several states use the risk-pool model, where the government acts as a sort of reinsurer for the costliest claims. Of course, the very phrase "the state pays expenses," is a lie: the "state" has no money. Rather, it collects what it needs from its citizens (this is known as a "tax"). So these folks face a double-whammy: higher insurance costs and higher taxes.

Ooops, redux.

On the other hand, and somewhat counter-intuitively, I'm actually in favor of this sort of mechanism. Although it doesn't actually address the real, underlying problem -- increasing health care costs -- it does seem to me to be a more equitable resolution to the challenge of covering more people. If one were to simultaneously shed some of the expensive mandated benefits that abound, one might actually bring health insurance costs down a bit, too.

[Hat Tip: Elizabeth A. Terrell]

LexisNexis and InsureBlog: Top 50

"The LexisNexis Insurance Law Center has selected its 2008 honorees for the Top 50 Blogs for Insurance."

And we're in the top 25 of those [ed: noticed you failed to point out that the list is in alphabetical order]. Seriously, we're very proud of the work we do here, and quite pleased and honored to have made such an august list.

The announcement says that these blogs "contain some of the best writing out there on coverage, catastrophic loss, regulatory compliance, life insurance, health care and insurance issues in general."

Wow.

We've also added a "LexisNexis Top Blog" badge to the sidebar.

Did I mention "Wow?"

UPDATE: And Mazel Tov! to fellow insurance/risk bloggers and LexisNexis honorees Joe Paduda, Martin F. Grace and J. Tyler Leverty, and Bob Sargent!!

Stuck? Not Hardly.

Occasionally I run into folks who are in a plan and can't move. Sometimes, if they made the wrong choice from the start, it can be a bad thing.

But when they make an informed choice the outcome is much improved.

One of my clients has been with the same plan for almost 2 years. His renewal is coming up and, while the increase isn't dramatic, I made a pre-emptive decision to offer some plans as a comparison.

One of the suggested plans has better benefits and a premium that is about $80 less than his renewal.

I sent the proposal over and followed with a phone call.

He was glad to hear from me and had briefly reviewed the proposal. He asked about the qualifying process for the new plan.

My ears perked up.

While last year (his first year under the HSA) was a good year (saving over $7,000 in premiums) this year wasn't as good.

He had a melanoma surgically removed followed by chemotherapy. His wife also had some issues and required surgery as well. In his words, "You were right. We satisfied our $5,800 deductible the first 4 hours in the hospital."

He went on to tell me that every claim for all family members had been paid at 100% since January 10th. He had no complaints at all about his Golden Rule HSA.

Of course the cancer knocks him out of moving for a few years but he isn't stuck.

Over the last 2 years he has saved over $15,000 in premiums vs. what he would have paid his former carrier. Even with the $5,800 out of pocket this year, it is less (by almost half) than he would have paid out of pocket for he and his wife under the old plan.

Total savings over 2 years, more than $20,000 in premiums and out of pocket.

Granted, this is not the way I want my clients to save money but the news is, the plan worked exactly as billed. He has no complaints and tells everyone how great his plan is.

But what about the alternative plan?

True, if he could move he could save almost $1,000 in premiums but his renewal premiums are in line with other carriers. The plan I had suggested (before learning of his health change) just happens to be super-competitive right now in the Atlanta market.

If there are any regrets it is this. HIPAA prevents carriers from sharing information with the agent. There was a time when I could go online and look at claim history (summary reports, not full details) and would be alerted to issues. Those times are past which makes the agent look like a disinterested bystander.

The reward in our business is client satisfaction and knowing that the plan works exactly as it should. Not only has my client saved over $20,000 in the last 2 years but he is confident that should he need the plan in the future it will work just as well as it did in the past.

Over-the-Top Insurance

It's fairly "common knowledge" that Betty Grable's legs were insured for $1 million. Of course, one can't really insure body parts: what one is insuring is the loss of their commercial or other value (cf: Jimmy Durante's $50,000 schnoz). The principle is called "indemnification," and it's the same one that we use to cover our cars and homes, and even our incomes.

Indemnification is simply that a particular item has independently measurable value, which then forms the basis for the risk. In Ms Grable's case, for example, her legs were an asset (no different than one's laptop or tow truck) which was essential to her success as a screen actress. If something bad happened to them, her career would have suffered, and that loss of value could be determined and the risk transferred to a 3rd party (e.g. XYZ Mutual).

Reason I bring this up is a fascinating article at MSN:

"If you think the rich and famous aren't that different from the rest of us, you should read their insurance policies."

The piece goes on to list various celebrity's insurance tales, including a wine taster's taste buds and Mark McGwire's ankle. It goes to great lengths to distinguish these "special risks" as somehow completely different than, say, the rider on your spouse's wedding ring. In a sense, these risks are different: you can't just drop in your local agent's office and pick up a plan to cover your billion dollar yacht or your tennis prodigy daughter's left wrist.

But: most independent agents have access to these kinds of markets, if they're willing to look. I'll share two such personal stories; perhaps Bob and Bill will add a few of theirs, as well (and we'd welcome any readers' contributions in the comments section).

Many years ago, I was licensed for P&C (Property and Casualty). I've long since let that go by the wayside, but at the time I wrote a handful of auto and home policies every month or so. One day, I had a call from a gentleman who had recently purchased a putt-putt golf business which included a batting cage. When he approached his agent, he was told that there was no way to cover the liability on the cage, and so he started calling around. I was too young (and inexperienced) to say "no way," so I started looking, and eventually placed the risk. That was my first policy underwritten through Lloyd's. Very heady stuff, but also a great learning opportunity.

What did I learn?

Simply this: if money is no object, you can insure any thing or any one. Sometimes, that's pretty useful.

My other "special case" involved a young physician. She was referred to me by another physician-client, who hoped I might be of help. Dr Jones was a relatively young lady, who had a number of major physical problems, none of which actually prevented her from practicing her specialty. Still, no "regular" carrier would touch her, and she was quite frustrated and discouraged. I found a "specialty risk" company that offered her decent coverage, at a reasonable price. Again, it's not that I'm Super Agent, it's just that I'm too stubborn to give up.

The moral of the story is that one needn't be a celebrity or multi-zillionaire to have a "special risk," and that it's really not magic to cover it.

Cavalcade of Risk #60 now online

Worker's Comp Insider celebrates their 5th(!) blogiversary by hosting this week's Cavalcade of Risk. Five time hostess Julie Ferguson presents this week's round-up of all that's risky and, as usual, does a fine job of it.

Congratulations, Julie and Jon!

Someone Else "Get's It"

Every once in a while a new reader will wander by and share their thoughts in the comment section.

Steve Trinward is one of those.

Steve offered these words on our assessment in Going Dutch.

A large part of why healthcare costs so much is the "employee benefit model" by which so much of it has been insulated from any semblance of "free market pricing" for services. When: (a) there's a huge number of people for whom "wellness" is no longer their direct concern (because "if I get sick, I'm covered at my job!"); (b) that "coverage" is isolated from both the provider (MD, hospital, etc.) and the patient, in terms of cost of actual services, or economies in what superfluous high-dollar testing and examination may be undertaken (in the name of avoiding a 'malpractice" suit?); (c) hospitals and other providers are almost encouraged to inflate "list prices" for services (to boost Medicare reimbursement, even though the actual charges to insurance companies are well below those levels); and (d) politicians obscure the real problems by blaming anyone seeking to shift the parameters ... the results are pretty obvious.

Moving from employer-based to individual-linked "coverage," and away from such "insured" status for anything but major "catastrophic" issues (Since we don't insure cars for oil-changes, we should consider annual physicals and periodic basic screenings as similar "maintenance costs"), ... while seeking to encourage "wellness" and prevention as a primary focus (one for which we are willing to pay reasonable amounts to preclude the need for later aftercare and nursing-home treatment?)

this is the direction we need to move in, if we are to turn the tide of "healthcare" before it swallows us all.

We enjoyed his comments so much, we asked if we could link to his blogpost on this topic.

Steve graciously agreed.

You can see his thoughts on this by going here.

Thanks, Steve, for allowing us to share your insight with our readers.

Stella

[OOOPS! Looks like we've fallen for an internet hoax. Still, it's interesting that our current legal system renders these at least plausible. HGS]

It's time again for the yearly 'Stella Awards'!

For those unfamiliar with these awards, they are named after 81-year-old Stella Liebeck who spilled hot coffee on herself and successfully sued the McDonald's in New Mexico where she purchased the coffee. You remember, she took the lid off the coffee and put it between her knees while she was driving. Who would ever think one could get burned doing that, right? That's right; these are awards for the most outlandish lawsuits and verdicts in the U.S. You know, the kinds of cases that make you scratch your head. So keep your head scratcher handy.

Here are the Stellas for the past year:

7TH PLACE :
Kathleen Robertson of Austin , Texas was awarded $80,000 by a jury of her peers after breaking her ankle tripping over a toddler who was running inside a furniture store. The store owners were understandably surprised by the verdict, considering the running toddler was her own son.

6TH PLACE :
Carl Truman, 19, of Los Angeles , California won $74,000 plus medical expenses when his neighbor ran over his hand with a Honda Accord. Truman apparently didn't notice there was someone at the wheel of the car when he was trying to steal his neighbor's hubcaps.

Go ahead, grab your head scratcher.

5TH PLACE :
Terrence Dickson, of Bristol , Pennsylvania , was leaving a house he had just burglarized by way of the garage. Unfortunately for Dickson, the automatic garage door opener malfunctioned and he could not get the garage door to open.

Worse, he couldn't re-enter the house because the door connecting the garage to the house locked when Dickson pulled it shut. Forced to sit for eight, count 'em, EIGHT, days on a case of Pepsi and a large bag of dry dog food, he sued the homeowner's insurance company claiming undue mental anguish.

Amazingly, the jury said the insurance company must pay Dickson $500,000 for his anguish. We should all have this kind of anguish. Keep scratching. There are more...

4TH PLACE :
Jerry Williams, of Little Rock, Arkansas, garnered 4th Place in the Stellas when he was awarded $14,500 plus medical expenses after being bitten on the butt by his next door neighbor's beagle - even though the beagle was on a chain in its owner's fenced yard. Williams did not get as much as he asked for because the jury believed the beagle might have been provoked at the time of the butt bite because Williams had climbed over the fence into the yard and repeatedly shot the dog with a pellet gun.

Grrrrr . Scratch, scratch.

3RD PLACE :
Third place goes to Amber Carson of Lancaster , Pennsylvania , because a jury ordered a Philadelphia restaurant to pay her $113,500 after she slipped on a spilled soft drink and broke her tailbone. The reason the soft drink was on the floor: Ms. Carson had thrown it at her boyfriend 30 seconds earlier during an argument.

Whatever happened to people being responsible for their own actions?

Scratch, scratch, scratch. Hang in there; there are only two more
Stellas to go...

2ND PLACE :
Kara Walton, of Claymont , Delaware , sued the owner of a night club in a nearby city because she fell from the bathroom window to the floor, knocking out her two front teeth. Even though Ms. Walton was trying to sneak through the ladies room window to avoid paying the $3.50 cover charge, the jury said the night club had to pay her $12,000 ..oh, yeah, plus dental expenses.

Go figure.

1ST PLACE : ...May we have a fanfare played on 50 kazoos, please.

This year's runaway First Place Stella Award winner is Mrs. Merv Grazinski, of Oklahoma City , OK , who purchased a new 32-foot Winnebago motor home. On her first trip home from an OU football game, having driven onto the freeway, she set the cruise control at 70 mph and calmly left the driver's seat to go to the back of the Winnebago to make herself a sandwich. Not surprisingly, the motor home left the freeway, crashed and overturned.

Also not surprisingly, Mrs. Grazinski sued Winnebago for not putting in the owner's manual that she couldn't actually leave the driver's seat while the cruise control was set. The Oklahoma jury awarded her (are you sitting down?) $1,750,000 PLUS a new motor home.

Winnebago actually changed their manuals as a result of this suit, just in case Mrs. Grazinski has any relatives who might also buy a motor home.

You can't fix stupid ..and now its profitable.

Be Careful What You Wish For . . .

[Welcome New York Times readers!]

Universal, free health care. Sounds great, right?

And why is it the United States is the "only" industrialized country that lacks universal health care? Why is it our citizens feel the current system is broken and want what others have?

Perhaps because they don't know the reality of how health care really works, or doesn't work, in other countries.

Take Canada for example.

Their national health care plan started about the same time Medicare started here. But how well does it work?

Why not ask someone who lived it?

Sarah Canez' mother was born in Canada. Many of her aunt's and uncle's still live there. Her was a nurse and her husband was a doctor. Both are now deceased but were employed by the government.

Here are some of Sarah's words.

"Those relatives of mine who have become pregnant or have small children have few complaints about their health care system. Canada's maternity and delivery hospitals are great, as long as there are no major problems. I have sent my relatives news stories about the lack of neonatal facilities in Alberta and Saskatchewan that recount that, recently, more than 200 laboring women with at risk pregnancies have been airlifted to Bozeman, Montana because there were no available beds anywhere in Canada for at-risk babies after delivery.

My relatives in Canada haven't heard anything about this - must not be something their press wants to publicize. However, if one of the children is sick, or has an earache, pediatricians will make house calls. Yes, it's true! And working moms can stay home after delivery and choose to receive either their full salary for six months or half their salary for 12 months. They tell me it is paid by the government but we all know it is paid by their taxes, which run 50-60% of gross income."

This is an eye opening article that is a must read for anyone wishing for the same thing other countries have.

For access to the full article, go here. Once you access the site, use the SEARCH feature and enter "Canada" to view the entire article.

Thanks to Sarah for her insight and willingness to share this information.

Sarah Canez is an agent in San Antonio, Texas. If you would like to contact her, you can reach Sarah by emailing sarahgcanez at yahoo dot com.

UPDATE: A number of folks at the NYT site are expressing doubts about the veracity of this story. Since the article in question is somewhat challenging to access, we've located an easier link.

UPDATE 2: For those who doubt that events such as these are extraordinary, Bob has some useful links here.

The Sound of 'Rounds

Cris, proprietor of AppleQuack, hosts this week's Grand Rounds with a delightful Sound of Music theme. Believe it or not, it really works!

Climb a mountain, forge a stream, but don't miss it.

From the P&C Files: "Green" Insurance

Got an email the other day from Cody Barbierri with Plymouth Rock Assurance Corporation. PRAC writes auto insurance for drivers in New England, marketing through independent agents (Yay!). Cody's email included a press release touting a new PRAC initiative:

"Plymouth Rock Assurance Corporation today announced it is the first automobile insurer in Massachusetts to reward its new and renewing policyholders with lower rates for “going green,” by driving less. Committed to reducing emissions and helping customers find new ways to save on their insurance policies, Plymouth Rock will lower rates for customers who drive fewer miles than the average customers in their geographic area."

Actually, they may be underselling themselves: they may well be the first carrier in the nation to offer this kind of incentive (and I'm sure our readers will let us know if I'm wrong on that). The program could save low mileage drivers as much as 15% on their auto insurance premiums. Not too shabby.

It works like this: Bay State drivers are subject to annual vehicle inspections, one facet of which is current mileage. PRAC insureds apparently give state DMV officials permission to share this info with the company, which can then confirm whether a given insured is eligible for the new "green" discount.

Be interesting to see if this idea catches on.

In Vino: An Update

Back in June, we reported that researchers at the University of Wisconsin had made a helpful discovery:

"(R)ed wine may be much more potent than thought in extending human lifespan."

The latest issue of Discover magazine [ed: sorry, no link to the article yet] has more on this exciting news:

"(T)he latest elixir to promise longer life - a molecule found in red wine - continues to surprise skeptics...In the past five years, that compound, resveratrol, has been shown to slow aging in worms, flies and mice."

(Sorry, worms, Tequila doesn't have any)

Scientists have even produced a synthetic version, which displays similar results.

And Big Pharma's buying into it (literally!): GlaxoSmith Kline recently bought a start-up, Sirtris, which has created some of those synthetics. GSK ponied up over $700 million for the company, which plans to have a version on the market within 10 years.

I imagine that'll make Bob happy: he'll be able to pay for his Merlot with his HSA.

MVNHS© vs Transparency

Thanks to Dr Paul Hsieh at We Stand Firm, we've finally managed to combine two favorite IB themes: the Much Vaunted National Health System© and Health Care Transparency. Turns out, a bunch of Brit docs have decided not to tell their cancer patients about potentially life-saving treatment options because....wait for it...."some of those options would not be permitted under the government system."

Hooray for gummint-run health care!

Not content with denying care to British victims, er, citizens at home, these docs refuse to tell their patients that they could obtain necessary treatment abroad. Of course, these compassionate care givers have a perfectly valid rationale: "such a discussion might "distress, upset or confuse" their patients."

Well, we can't have any of that.

As we've noted many times here at InsureBlog, health care costs drive health insurance costs, and one factor in this equation is that consumers have been kept unaware of just what those costs really are. Now that transparency in health care is gaining momentum, folks are becoming more aware of those costs, and cost efficient alternatives. These British physicians, on the other hand, seem to be tilting away from such transparency. By keeping information about treatment options hidden away from their patients, they are, in effect, artificially depressing costs at the expense of their own patients.

I share Dr Hsieh's conclusion that "what makes the system especially evil is not the fact that it allows a few doctors to act badly, but rather that it takes good doctors and turns them into bad physicians willing to betray their patients."

Indeed.

[Hat Tip: Elizabeth A. Terrell]