On October 16, The Centers for Medicare and Medicaid Services (CMS) announced the Medicare premiums and deductibles for 2010.
This announcement contains the usual annual increases in premiums and deductibles. For 2010, the Part A hospital deductible reaches $1,100 per admission. The Part B ambulatory deductible is $155 per year. The Part B monthly premium increases 15% to $110 monthly per participant. (The Part B premium has increased by 41% in just the past 5 years – from $78 to $110. Wow.)
It’s important to recognize that in setting the 2010 Part B premiums, CMS has followed current law. The law includes certain limitations on growth of physician reimbursements. The $110 rate for 2010 reflects these limitations. For 2010 the limitations would reduce present physician reimbursements by 21% (!) Congress has waived these limitations in each of the past 5 years and is expected to waive them again for 2010. Why is this relevant? Because waiving the limitations will require a recalculation of the physician cost, meaning that both the Part B deductible and the Part B premiums will be higher than shown here. Wonderful.
The remainder of this post contains a brief summary of Medicare benefits for 2010. If, or as, you scan this summary (I know, it’s boring) please ask yourself: "would I want to be covered by THIS plan, at THESE rates?"
1. Medicare has many deductibles, all of them are increasing. Values for 2010 are:
a. Part A inpatient deductible = $1,100 per confinement.
•Inpatient benefits are limited to 150 days per confinement.
•Medicare pays inpatient benefits at 100% up to 60 days per confinement after the $1,100 deductible
•Medicare requires a $275 per day deductible from 61-90 days
•Medicare requires a $550 per day deductible from 90-150 days.
•After 150 days – no coverage
b. Part B Medicare deductible for all other types of expenses = $155 per year
2. For these other types, Medicare pays 80% of allowed expenses after the deductible
3. Medicare does not limit the residual expenses (the 20% that you must pay)
4. Medicare will continue to reimburse 80% regardless how large your expenses may grow - and you will continue to pay your 20% - no matter how large that may grow.
5. Medicare does not have a health reimbursement or health savings account.
6. Medicare contains no limit to the share of your own medical costs that you must pay in any year
7. Preventive care is subject to the same deductible and 80% reimbursement
8. Medicare does not cover retail Rx – no prescriptions – unless you buy Part D for an extra premium
9. Medicare does not reimburse any expenses incurred outside the U.S.
12. The Medicare gross premiums (before subsidy) are $461 per month for Part A and $442 per month for Part B, a total of $903 monthly or $10,836 per person, per year. This friends, is what Medicare COSTS.
The Medicare benefits may seem, well, skimpy compared with the relatively high premiums. On the other hand, an older population is expensive to insure, given the numerous chronic conditions and other health issues that people accumulate over a lifetime. This cost is not decreasing, it is increasing. And the government’s response year after year is to reduce benefits (e.g., increase deductibles) and increase premiums - but not to attempt to manage the overall cost. What else could it do? Well, it could aggressively seek out rampant fraud; or implement specific disease-management programs; or help physicians and hospitals identify and eliminate wasteful cost in the system. That’s only three of many possibilities. Oh, but hey, I forgot – Medicare has such a wonderfully low expense ratio in part because it doesn't do these things.
Note: By law, for citizens and legal residents who have at least 40 quarters of Social Security earnings, Medicare subsidizes the cost of the premiums. For the typical Medicare participant, Medicare (i.e., taxpayers) subsidizes 100% of the Part A premiums, and 75% of the Part B premiums. As the result, the typical Medicare participant will pay about $110 monthly in 2010 for Part B. That's equivalent to 12% of the overall Medicare cost. Still, it's an increase of about 15% above the $96 monthly per participant cost of Part B for 2009.
Friday, October 30, 2009
Good News on the Economic Front
The Obama Administration has announced that the stimulus package has saved approximately 650,000 jobs.
That's good.
The stimulus package cost $787 Billion. That works out to $1,210,000 per job. Roughly speaking, of course..
That's good.
The stimulus package cost $787 Billion. That works out to $1,210,000 per job. Roughly speaking, of course..
"XX vs XX"
The rather inflammatory characterization of risk management put forth by the National Women's Law Center, "Being a Woman Is Not a Pre-Existing Condition,” is rather telling: first, of course it is, just as being male or 25 years old or diabetic. All of these carry a certain risk profile, and it's the job of the insurer to adequately price those risks. So being a healthy male, I pay up to 40% more for life insurance than a similarly-aged female, and my 22 year old daughter pays significantly less than her 22 year old male peers. Shall we level that playing field, as well?
Didn't think so.
But somehow, when it comes to health insurance, risk is suddenly a bad word? If we were to adopt rules which require healthy folks to pay the same as unhealthy ones, or men to pay the same as women despite having fewer claims, this would be acceptable?
Didn't think so.
But I'm not alone in this; the Independent Women's Forum recently surveyed some 800 of those females, and found something interesting:
"When asked the relative priority of healthcare to other issues, only 16% said healthcare should be top issue for Congress to address ... 51% of women are unsatisfied and 42% are satisfied with what they have read, seen, or heard about the proposals or legislation to change the way healthcare is covered and delivered here ... Most would prefer that any expanded involvement exclude them personally." [emphasis in original]
Three-quarters of those surveyed would prefer that their own healthcare be left untouched, or only slightly modified. What's even more telling is the reaction to the current meme that our health care system is in crisis: "43% of women say that Congress and the President should enact healthcare reform 'only when quality legislation is developed, even if it means there is no deadline.'" [emphasis in original]
It seems to me that if there was a groundswell of support for "leveling" that premium playing field, we'd have seen that reflected in these numbers, which we don't. "Leveling" those premiums, that is, removing the element of risk from the equation, changes everything. As I mentioned in the KHN article, "(i)f you don't base it on risk, you don't have insurance. You have income redistribution." I stand by that and, apparently, so do a lot of women.
Didn't think so.
But somehow, when it comes to health insurance, risk is suddenly a bad word? If we were to adopt rules which require healthy folks to pay the same as unhealthy ones, or men to pay the same as women despite having fewer claims, this would be acceptable?
Didn't think so.
But I'm not alone in this; the Independent Women's Forum recently surveyed some 800 of those females, and found something interesting:
"When asked the relative priority of healthcare to other issues, only 16% said healthcare should be top issue for Congress to address ... 51% of women are unsatisfied and 42% are satisfied with what they have read, seen, or heard about the proposals or legislation to change the way healthcare is covered and delivered here ... Most would prefer that any expanded involvement exclude them personally." [emphasis in original]
Three-quarters of those surveyed would prefer that their own healthcare be left untouched, or only slightly modified. What's even more telling is the reaction to the current meme that our health care system is in crisis: "43% of women say that Congress and the President should enact healthcare reform 'only when quality legislation is developed, even if it means there is no deadline.'" [emphasis in original]
It seems to me that if there was a groundswell of support for "leveling" that premium playing field, we'd have seen that reflected in these numbers, which we don't. "Leveling" those premiums, that is, removing the element of risk from the equation, changes everything. As I mentioned in the KHN article, "(i)f you don't base it on risk, you don't have insurance. You have income redistribution." I stand by that and, apparently, so do a lot of women.
Cavalcade of Risk #91: Call for Submissions
Debbie Dragon hosts next week's Cav; submissions are due by Monday (the 2nd). Debbie asks that you include:
■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post
And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).
You can submit your post via Blog Carnival or email.
BTW, we're now scheduling for early 2010. Please let me know if you'd like to host.
■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post
And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).
You can submit your post via Blog Carnival or email.
BTW, we're now scheduling for early 2010. Please let me know if you'd like to host.
Thursday, October 29, 2009
ObamaCare Meltdown?
Now that Speaker Pelosi has officially released the House version of health care "reform" (available here; Thank to reader Jeff M!), a 2000-page behemoth which I'm quite sure that she's read from cover to cover. And because she wants to tout the many wonderful benefits contained therein, she's announced a press conference to herald its publication. One would think that one of the points of this exercise is to gain maximum exposure for her efforts.
One might be wrong:
"Multiple people are telling RedState that the Democrats are blocking the public from attending their health care conference on Capitol Hill."
Really?
If that's true, and it's certainly credible (if unconfirmed), then we'll ask again: "What are they hiding?"
(There appears to be actual video of at least one Republican congressional staffer being turned away)
Well, not the bill itself, obviously, but if they're not interested in at least facing the folks who'll be affected by this risky scheme, one may be justified in a healthy does of skepticism regarding it. And for good reason: it seems to me that there are 3 key political considerations regarding the viability of PelosiCare (one can't really credit/blame PresBo for this, inasmuch as he chose not to put forth his own plan).
First, abortion coverage. On page 109 of the bill, we learn that plans will not be required to offer this coverage, but may elect to do so. I think that will be a potential deal-killer with the more liberal members of Congress, since they've been pushing so hard for it to be a covered expense. On page 110, we learn that some federal funds will be used to pay for abortions, which would seem to be a deal-killer for pro-life Members.
Perhaps the most divisive issue in this regard pops up on page 147:
"Nothing in this Act shall be construed to have any effect on Federal laws regarding
(A) conscience protection;
(B) willingness or refusal to provide abortion; and
(C) discrimination on the basis of the willingness or refusal to provide, pay for, cover, or refer for abortion or to provide or participate in training to provide abortion."
It seems to me that this section alone would be a non-starter for the left-wing.
The second political "grenade" would be coverage for illegal aliens. Here, too, Ms Pelosi et al have been disingenuous: the only reference to this issue in the bill is eligibility for federal tax credits. I could find nothing which prohibited, or even discourage, illegals from participating in the Insurance Exchange itself. Without some kind of guarantee that illegals won't be allowed to buy an Exchange-compliant plan, it seems unlikely that moderate or conservative Members would go along.
The last, and of course most troubling, political issue here is the inclusion of a Public Health Option. We've already covered this extensively, I'll add only that this effectively sets forth a nationalized health insurance program. And since the public is largely opposed to such, I don't see how Members in, for example, so-called Red states could afford to vote for it.
Oh, one more little tidbit: how would you define a "young adult?" If you said "a 27-year old," you win a cheroot. Carriers (in both the group and individual markets) will be required keep them on their parents' plan, regardless of health. How much do you think that will cost?
One might be wrong:
"Multiple people are telling RedState that the Democrats are blocking the public from attending their health care conference on Capitol Hill."
Really?
If that's true, and it's certainly credible (if unconfirmed), then we'll ask again: "What are they hiding?"
(There appears to be actual video of at least one Republican congressional staffer being turned away)
Well, not the bill itself, obviously, but if they're not interested in at least facing the folks who'll be affected by this risky scheme, one may be justified in a healthy does of skepticism regarding it. And for good reason: it seems to me that there are 3 key political considerations regarding the viability of PelosiCare (one can't really credit/blame PresBo for this, inasmuch as he chose not to put forth his own plan).
First, abortion coverage. On page 109 of the bill, we learn that plans will not be required to offer this coverage, but may elect to do so. I think that will be a potential deal-killer with the more liberal members of Congress, since they've been pushing so hard for it to be a covered expense. On page 110, we learn that some federal funds will be used to pay for abortions, which would seem to be a deal-killer for pro-life Members.
Perhaps the most divisive issue in this regard pops up on page 147:
"Nothing in this Act shall be construed to have any effect on Federal laws regarding
(A) conscience protection;
(B) willingness or refusal to provide abortion; and
(C) discrimination on the basis of the willingness or refusal to provide, pay for, cover, or refer for abortion or to provide or participate in training to provide abortion."
It seems to me that this section alone would be a non-starter for the left-wing.
The second political "grenade" would be coverage for illegal aliens. Here, too, Ms Pelosi et al have been disingenuous: the only reference to this issue in the bill is eligibility for federal tax credits. I could find nothing which prohibited, or even discourage, illegals from participating in the Insurance Exchange itself. Without some kind of guarantee that illegals won't be allowed to buy an Exchange-compliant plan, it seems unlikely that moderate or conservative Members would go along.
The last, and of course most troubling, political issue here is the inclusion of a Public Health Option. We've already covered this extensively, I'll add only that this effectively sets forth a nationalized health insurance program. And since the public is largely opposed to such, I don't see how Members in, for example, so-called Red states could afford to vote for it.
Oh, one more little tidbit: how would you define a "young adult?" If you said "a 27-year old," you win a cheroot. Carriers (in both the group and individual markets) will be required keep them on their parents' plan, regardless of health. How much do you think that will cost?
It's Alive! Health Wonk Review
Tinker Ready hands out the treats in this week's edition of the Health Wonk Review.
Don't say you weren't warned!
Don't say you weren't warned!
Wednesday, October 28, 2009
Higher Costs: Guaranteed
As Bob has noted extensively (here and here, for example), "reform" efforts like ObamaCare will lead to significant premium increases for pretty much every insured. Other folks have also shown this to be true; CongressCritters worried about the impact of such efforts on their constituents turned to one of the eeeeevil insurance companies for actual, you know, data. WellPoint (Blue Cross/Shield) obliged, "mining" their substantial databases for information on how (what we know about) ObamaCare would affect actual insureds in 14 states.
The information gleaned took into account a number of factors which previous studies have not, including demographic and market variables; this is important because other studies basically studied national trends, which don't give as precise a picture. It's also critical to understand that these are based on actual insured populations, not a hypothetical one.
"In all of the 14 states ... ObamaCare would drive up premiums for the small businesses and individuals ... Young and healthy consumers will see the largest increases."
Those increases, by the way, amount to double and even triple the cost of current rates. One example they gave struck close to home: that of a young (well, relatively: age 25) male living in Columbus, Ohio (just a scant 75 minutes away from IB Central). This young man's current monthly premium is $52 [ed: based on the county, age and sex, and guessing at underwriting, I presume this would be a high deductible, HSA type plan]; under the underwriting and pricing provisions of both the Senate and House bills (i.e. guaranteed issue and community rating), this gentleman's premium would jump to $134. Adjust the benefits (because ObamaCare requires lower out-of-pockets and more first-dollar coverages), and the bill tops out at a whopping $157, almost triple the current rate.
Families will see tremendous cost increases, as well: in the example cited by the WSJ, a typical family of four would see their premiums double. What a great idea in a floundering economy.
Of course, naysayers will claim that this is simply another industry shot at "reform;" after all, their excessive profits are at stake. This ignores the fact that companies like WellPoint would actually benefit from these increases: higher premiums mean higher profits, and richer plans means higher renewals. But why let logic and common sense enter the picture now?
Something else that no one seems to be discussing is that none of the plans currently under consideration substantively address the primary reason that insurance costs continue to increase: higher medical costs. In fact, richer plans (with lower deductibles and more "freebies") will guarantee greater costs, since the demand on providers will increase dramatically.
As Bob says: Smaller cars, bigger health insurance, Poppa Washington.
The information gleaned took into account a number of factors which previous studies have not, including demographic and market variables; this is important because other studies basically studied national trends, which don't give as precise a picture. It's also critical to understand that these are based on actual insured populations, not a hypothetical one.
"In all of the 14 states ... ObamaCare would drive up premiums for the small businesses and individuals ... Young and healthy consumers will see the largest increases."
Those increases, by the way, amount to double and even triple the cost of current rates. One example they gave struck close to home: that of a young (well, relatively: age 25) male living in Columbus, Ohio (just a scant 75 minutes away from IB Central). This young man's current monthly premium is $52 [ed: based on the county, age and sex, and guessing at underwriting, I presume this would be a high deductible, HSA type plan]; under the underwriting and pricing provisions of both the Senate and House bills (i.e. guaranteed issue and community rating), this gentleman's premium would jump to $134. Adjust the benefits (because ObamaCare requires lower out-of-pockets and more first-dollar coverages), and the bill tops out at a whopping $157, almost triple the current rate.
Families will see tremendous cost increases, as well: in the example cited by the WSJ, a typical family of four would see their premiums double. What a great idea in a floundering economy.
Of course, naysayers will claim that this is simply another industry shot at "reform;" after all, their excessive profits are at stake. This ignores the fact that companies like WellPoint would actually benefit from these increases: higher premiums mean higher profits, and richer plans means higher renewals. But why let logic and common sense enter the picture now?
Something else that no one seems to be discussing is that none of the plans currently under consideration substantively address the primary reason that insurance costs continue to increase: higher medical costs. In fact, richer plans (with lower deductibles and more "freebies") will guarantee greater costs, since the demand on providers will increase dramatically.
As Bob says: Smaller cars, bigger health insurance, Poppa Washington.
Tuesday, October 27, 2009
Government Run Long Term Care Insurance: A Non-Starter
[Welcome Industry Radar readers!]
First, we are big fans of Long Term Care insurance (LTCi); too many folks (wrongly) believe that Medicare will cover an extended stay in a long term care facility. It does not; in some cases, Medicaid will pick up part of the tab, but this can eat up the assets you've spent a lifetime accumulating, and your choice of facilities may be limited.
State-sponsored Partnership Programs are a step in the right direction: these encourage folks to purchase LTCi, and offset Medicaid's "spend down" requirements for those who purchase PP compliant plans.
A proposed Federal LTCi program, on the other hand, is a leap in the wrong direction:
"House health care legislation expected within days is likely to include a new long-term care insurance program to help seniors and disabled people stay out of nursing homes..."
Really?
Let's examine that premise:
The Feds can't even handle a simple flu vaccine distribution, but they can administer a new long term care plan? They have the experience and expertise to adjudicate claims? What happens when (not if) they're wrong? Will they raise those "modest rates?" Cut back on that "generous" $50 a day benefit? Or simply deny claims, as they do now with Medicare?
There's no question that folks in the middle class, and especially those approaching (or in) their Golden Years, will feel a major squeeze when it comes to long term care. But trusting the government to manage this effectively is non-optimal. What would work would be to expand the Partnership Programs, and for the industry and government to better publicize their existence.
First, we are big fans of Long Term Care insurance (LTCi); too many folks (wrongly) believe that Medicare will cover an extended stay in a long term care facility. It does not; in some cases, Medicaid will pick up part of the tab, but this can eat up the assets you've spent a lifetime accumulating, and your choice of facilities may be limited.
State-sponsored Partnership Programs are a step in the right direction: these encourage folks to purchase LTCi, and offset Medicaid's "spend down" requirements for those who purchase PP compliant plans.
A proposed Federal LTCi program, on the other hand, is a leap in the wrong direction:
"House health care legislation expected within days is likely to include a new long-term care insurance program to help seniors and disabled people stay out of nursing homes..."
Really?
Let's examine that premise:
The Feds can't even handle a simple flu vaccine distribution, but they can administer a new long term care plan? They have the experience and expertise to adjudicate claims? What happens when (not if) they're wrong? Will they raise those "modest rates?" Cut back on that "generous" $50 a day benefit? Or simply deny claims, as they do now with Medicare?
There's no question that folks in the middle class, and especially those approaching (or in) their Golden Years, will feel a major squeeze when it comes to long term care. But trusting the government to manage this effectively is non-optimal. What would work would be to expand the Partnership Programs, and for the industry and government to better publicize their existence.
Grand Rounds, All Hallow's Eve Edition
Treat yourself to a scary-good time with this week's Halloween-themed Grand Rounds. Hosted by Gina at Code Blog, it's a fun-house of interesting posts.
Monday, October 26, 2009
Why Isn't Health Care Compulsory ?
I say it’s time for Congress to face up to Americans’ needs, and make health care compulsory. It's not too late.
I’m not talking about health insurance. I’m talking about health care. Health insurance is not the same as health care. Who calls their insurance agent when sick or injured? Who calls an actuary? Don’t real people call their doctor or go to the emergency room? Yet our so-called leaders go on and on about compulsory insurance as though insurance is what we need even though it’s obvious that health care is what we need. The public is being sold insurance when we should be buying health care. If anything needs to be made compulsory, it is health care – not health insurance.
Once this concept is understood, it's clear what must be done. First, all health care professionals become employees of the Federal Government, paid a living wage from public funds. Second, hospitals, clinics, labs and other facilities are nationalized and their staffs also become employees of the Federal Government. Fair compensation is paid to the former owners just as for the condemnation of any other private property for public use. Third, the Federal health care professionals examine any person who wants health care, and issue health care orders to anyone who is determined to actually need health care. Fourth, it is illegal to seek or receive health care from anyone except a Federal health care professional. Fifth, everyone in the country is included in the plan; however the full cost (plus an administration fee) for non-legal aliens' health care is charged back to their home country via the home country’s foreign exchange account maintained at the U.S. Treasury. Finally a system of regional Federal Health Tribunals will be established.
The Federal Health Tribunals are empowered to impose heavy fines upon individuals who shirk their civic duty to follow health care orders, including refusal to alter lifestyle when so ordered (e.g., exercise, stop smoking, lose weight). The Tribunals also have authority to order health shirkers confined until treated. Depending on the seriousness of the condition, the confinement may be in a hospital or if hospitalization is not required, to (a) the Governors’ mansion, (b) the home of any elected State or local official, (c) any residence maintained by a member of Congress, or (d) any private home larger than 3,000 square feet.
The Tribunals also have the power to order a provider who refuses to deliver care that is ordered by a regional Federal Health professional, to perform unpaid community service within the Tribunal’s region.
Refusal by a health shirker or a health care provider to comply with an order of a Health Tribunal will carry penalties similar to contempt of Court and may involve fines or imprisonment or both.
Making health care compulsory would address actual need. Public funds to pay for compulsory health insurance would not be wasted on “insurance” but would be spent directly for health care. Everyone would then be healthy, happy, and handsome, and all our children would be smarter than average. Overnight, our life expectancy would be the highest in the world and infant mortality would drop to zero.
I call on Congress to scrap the current plans under debate and proceed forthwith to craft legislation making health care compulsory.
I’m not talking about health insurance. I’m talking about health care. Health insurance is not the same as health care. Who calls their insurance agent when sick or injured? Who calls an actuary? Don’t real people call their doctor or go to the emergency room? Yet our so-called leaders go on and on about compulsory insurance as though insurance is what we need even though it’s obvious that health care is what we need. The public is being sold insurance when we should be buying health care. If anything needs to be made compulsory, it is health care – not health insurance.
Once this concept is understood, it's clear what must be done. First, all health care professionals become employees of the Federal Government, paid a living wage from public funds. Second, hospitals, clinics, labs and other facilities are nationalized and their staffs also become employees of the Federal Government. Fair compensation is paid to the former owners just as for the condemnation of any other private property for public use. Third, the Federal health care professionals examine any person who wants health care, and issue health care orders to anyone who is determined to actually need health care. Fourth, it is illegal to seek or receive health care from anyone except a Federal health care professional. Fifth, everyone in the country is included in the plan; however the full cost (plus an administration fee) for non-legal aliens' health care is charged back to their home country via the home country’s foreign exchange account maintained at the U.S. Treasury. Finally a system of regional Federal Health Tribunals will be established.
The Federal Health Tribunals are empowered to impose heavy fines upon individuals who shirk their civic duty to follow health care orders, including refusal to alter lifestyle when so ordered (e.g., exercise, stop smoking, lose weight). The Tribunals also have authority to order health shirkers confined until treated. Depending on the seriousness of the condition, the confinement may be in a hospital or if hospitalization is not required, to (a) the Governors’ mansion, (b) the home of any elected State or local official, (c) any residence maintained by a member of Congress, or (d) any private home larger than 3,000 square feet.
The Tribunals also have the power to order a provider who refuses to deliver care that is ordered by a regional Federal Health professional, to perform unpaid community service within the Tribunal’s region.
Refusal by a health shirker or a health care provider to comply with an order of a Health Tribunal will carry penalties similar to contempt of Court and may involve fines or imprisonment or both.
Making health care compulsory would address actual need. Public funds to pay for compulsory health insurance would not be wasted on “insurance” but would be spent directly for health care. Everyone would then be healthy, happy, and handsome, and all our children would be smarter than average. Overnight, our life expectancy would be the highest in the world and infant mortality would drop to zero.
I call on Congress to scrap the current plans under debate and proceed forthwith to craft legislation making health care compulsory.
Unintended Consequences: Wellness, Genetics and GINA
Last year, Congress passed, and the President signed into law, the Genetic Information Nondiscrimination Act of 2008 (GINA). This was a far-reaching bill that sought to address some issues regarding genetic testing and the results of such testing. As we've noted before, insurance carriers aren't generally allowed to use genetic predispositions in underwriting and pricing; GINA sought to clarify and tighten this restriction.
Unfortunately, the law's definition of "underwriting" was overly broad, and has led to some presumably unforeseen problems:
"However, DMAA believes the definition of “underwriting” included in the interim final regulations far exceeds Congressional intent and will have dramatic and unintended consequences on programs designed to support at-risk and chronically ill individuals."
Ooops!
Although there's no persuasive evidence showing that wellness programs actually reduce health insurance costs, a lot of employers offer, and carriers encourage, their use. One of the factors in designing such programs is a tool called an HRA, a Health Risk Assessment. These are essentially questionnaires which help identify employees' problem areas, and can help providers design programs targeting them. Until now, one of the areas often included in HRA's were genetic factors. The problem now is that GINA effectively prohibits an HRA from asking about one's genetic "background," or from using that information if it is disclosed. This means that providers may not be able to design an appropriate wellness plan.
So, the aforementioned DMAA Care Continuum Alliance is requesting that these new rules be put put on hold, and that the definitions be revisited.
For those readers who are interested, the interim regulations are here.
[Thanks to Dan Vorhaus for his help]
Unfortunately, the law's definition of "underwriting" was overly broad, and has led to some presumably unforeseen problems:
"However, DMAA believes the definition of “underwriting” included in the interim final regulations far exceeds Congressional intent and will have dramatic and unintended consequences on programs designed to support at-risk and chronically ill individuals."
Ooops!
Although there's no persuasive evidence showing that wellness programs actually reduce health insurance costs, a lot of employers offer, and carriers encourage, their use. One of the factors in designing such programs is a tool called an HRA, a Health Risk Assessment. These are essentially questionnaires which help identify employees' problem areas, and can help providers design programs targeting them. Until now, one of the areas often included in HRA's were genetic factors. The problem now is that GINA effectively prohibits an HRA from asking about one's genetic "background," or from using that information if it is disclosed. This means that providers may not be able to design an appropriate wellness plan.
So, the aforementioned DMAA Care Continuum Alliance is requesting that these new rules be put put on hold, and that the definitions be revisited.
For those readers who are interested, the interim regulations are here.
[Thanks to Dan Vorhaus for his help]
About Those "Ginormous" Insurance Industry Profits
The Associated Press reports that:
"Health insurance profit margins typically run about 6 percent ... Profits barely exceeded 2 percent of revenues in the latest annual measure."
The actual profit margin appears to be 2.2%; contrast that with railroads (12.6%) or communications equipment (over 20%), and the caterwauling about those eeeevil insurance companies seems, well, misplaced.
[Hat Tip: Ace of Spades]
"Health insurance profit margins typically run about 6 percent ... Profits barely exceeded 2 percent of revenues in the latest annual measure."
The actual profit margin appears to be 2.2%; contrast that with railroads (12.6%) or communications equipment (over 20%), and the caterwauling about those eeeevil insurance companies seems, well, misplaced.
[Hat Tip: Ace of Spades]
Carnival of Personal Finance: Halloween Edition
This edition of the Carnival of Personal Finance , hosted at Money Crashers, is scary-good. Don't be afraid to head over for some great treats.
Sunday, October 25, 2009
Mom too heavy? Say goodbye, kids!
Well, yeah, we're all heavy, but some are more heavy than others.
Note: Let no one get the wrong idea. This could never happen in the USA.
Never.
(23st = 322 pounds).
Note: Let no one get the wrong idea. This could never happen in the USA.
Never.
(23st = 322 pounds).
Saturday, October 24, 2009
Stepping in it, Again
It seems that my propensity for straight talk viz: risk is at the fore, again. This week, I was interviewed by a very nice lady from Kaiser HealthNews, Jenny Gold. Jenny was doing a story on so-called "gender-rating" in health insurance, and was referred to me by an old blog-buddy, Kate Steadman. The article is now available on-line.
It may also end up on NPR; we'll let you know how that goes.
By the way, I referred to "so-called gender rating" because I'm somewhat of a stickler for correct grammar; as my former teacher explained, "words have 'gender,' people have 'sex.'" Her point was that, when identifying whether or not one is male or female, the correct term is "sex," not "gender."
Enjoy the article!
It may also end up on NPR; we'll let you know how that goes.
By the way, I referred to "so-called gender rating" because I'm somewhat of a stickler for correct grammar; as my former teacher explained, "words have 'gender,' people have 'sex.'" Her point was that, when identifying whether or not one is male or female, the correct term is "sex," not "gender."
Enjoy the article!
Comments: Good News and Bad News
First, of course, the Good News: We have successfully migrated to the Disqus commenting platform. This system enables us to track comments across all posts, "white-list" frequent and valued commenters, and allows co-bloggers to moderate comments. There are some other commenter-friendly features, as well, which I'm only beginning to appreciate.
The bad news is that I've been unable (so far) to import comments from our previous system, but we'll keep working on it.
You don't have to register with Disqus to comment (anonymous comments are welcome): other logins that will work include Twitter, OpenID and Yahoo. If you do decide to register with Disqus, just click here and create an account.
PLEASE let me know what you think of the new system. As with most "new" things, it will take some getting used to, but I really hope that you'll find it useful and user-friendly.
The bad news is that I've been unable (so far) to import comments from our previous system, but we'll keep working on it.
You don't have to register with Disqus to comment (anonymous comments are welcome): other logins that will work include Twitter, OpenID and Yahoo. If you do decide to register with Disqus, just click here and create an account.
PLEASE let me know what you think of the new system. As with most "new" things, it will take some getting used to, but I really hope that you'll find it useful and user-friendly.
Friday, October 23, 2009
Well, THAT Was Fun (and Expensive)! [Updated]
Remember a while back, when we were informed that, without the Spendulus, unemployment would skyrocket? But that, through the Magic of Gummint Spending© we could avoid this potential cataclysm, restore the economy to its formerly robust state, and once again enjoy the fruit of our labors?
Turns out, not so much:
Turns out, not so much:
What, you may ask, does this have to do with insurance?
Glad you asked. It's pretty simple, really: if the rocket surgeons in DC got this so bone-achingly wrong, why would anyone believe they could get health care right?
[Chart courtesy Innocent Bystanders]
UPDATE: On a related note, all those TARP (Toxic Asset Relief Program) dollars that went to bail out ailing financial institutions (like AIG)? Bet you thought that, like all good gummint programs, there was some adult supervision.
You'd lose that bet:
"In his 256-page report to Congress, [TARP Inspector General Neil]Barofsky notes that the Treasury Department's failure to implement anti-fraud measures, or even to require TARP recipients to report how they used the billions Congress and the Treasury Department gave them, makes it highly unlikely that the $317 billion outstanding -- nearly half the TARP total -- will ever be returned to taxpayers."
What's that sound?
Get to Work, Sonny!
Ever thought about how all this spending's going to affect "the children?"
Here's one way:
Here's one way:
Thursday, October 22, 2009
Oy Canada: Insurance Insurance
A while back, we reported on one insurance carrier's unique (if odd) plan that essentially guaranteed that one could jump back onto an individual medical plan if one's group insurance was lost. The hook was that "(f)or a fee, one buys the right to purchase some kind of health coverage if one becomes at once uninsured and uninsurable." The idea was that one was essentially buying one's future insurability.
Of course, such a plan would be a waste of money for our Friends to the North©, right? After all, they already have free health care, and lots of it.
Or maybe not:
"A group in British Columbia has offered medical waiting-list insurance to members whose government treatment is on hold."
Yup. Although we've detailed Canada's major shortage of actual health care over the years, even we hadn't quite grasped just how little is actually readily available to the average Canuck. Much as our AAA offers roadside assistance to stranded motorists, the British Columbia Automobile Association wanted to offer its members bedside assistance to those stranded on the side of the rocky Canadian health care road.
Folks who bought the policy and subsequently endured a 45 day wait for a covered expense were guaranteed access to a private clinic in BC, or even in the good ol' U S of A.
Or would have been:
"The program, which took two years to develop, never got beyond the pilot phase ... The association shut it down when critics howled and government officials checked to see if such a program was actually legal in Canada."
"Actually legal in Canada." If that doesn't send Arctic chills down your spine, then you're not paying attention: it is apparently illegal in Canada to actually try to help oneself gain access to health care. Yet that's exactly the kind of system that many proponents of a nationalized health care system want to impose on us.
Tell me again why that's a "good thing?"
Of course, such a plan would be a waste of money for our Friends to the North©, right? After all, they already have free health care, and lots of it.
Or maybe not:
"A group in British Columbia has offered medical waiting-list insurance to members whose government treatment is on hold."
Yup. Although we've detailed Canada's major shortage of actual health care over the years, even we hadn't quite grasped just how little is actually readily available to the average Canuck. Much as our AAA offers roadside assistance to stranded motorists, the British Columbia Automobile Association wanted to offer its members bedside assistance to those stranded on the side of the rocky Canadian health care road.
Folks who bought the policy and subsequently endured a 45 day wait for a covered expense were guaranteed access to a private clinic in BC, or even in the good ol' U S of A.
Or would have been:
"The program, which took two years to develop, never got beyond the pilot phase ... The association shut it down when critics howled and government officials checked to see if such a program was actually legal in Canada."
"Actually legal in Canada." If that doesn't send Arctic chills down your spine, then you're not paying attention: it is apparently illegal in Canada to actually try to help oneself gain access to health care. Yet that's exactly the kind of system that many proponents of a nationalized health care system want to impose on us.
Tell me again why that's a "good thing?"
Demutualization and Taxes
Earlier this week, guest blogger Jay briefly discussed insurance company "demutualization;" that is, when a heretofore mutual company (owned by its policyholders) converts to a stock model (owned by investors and the like). But what are the tax consequences of such a change? Our favorite taxblogger Joe Kristan knows, and so can you.
HIPAA vs Oklahoma: Perfect Storm?
Regardless of where one stands regarding abortion, this can't be a good idea:
"The law, which will take effect on Nov. 1, compels the Oklahoma Department of Health to publish data online on all abortion patients -- including the woman's race, marital status, financial circumstances, years of education, number of previous pregnancies, and her reason for seeking the abortion."
If there's any silver lining here, it's that patients' names aren't being published, so there's no way to link a particular person to a given procudure. Still, it's hard to see how publsihing the data itself helps anyone; absent context, what's the point?
According to the state Representative who authored the bill, the purpose is "stepping up education that targets demographics with high rates of unwanted pregnancies." What kind of education, one may ask? The article doesn't say, but it's likely linked to funding of some sort (perhaps Medicaid?). Granted, the Hyde Amendment prohibits federal funds from paying for abortions, but this seems a stretch.
HIPAA (the Health Insurance Portability and Accountability Act) is pretty stringent when it comes to protecting personal health information (PHI); omitting names from the published data would seem to adhere to the letter of these requirements. But it's not hard to imagine that in small, rural communities (of which I'm sure The Sooner State has at least its share) it would be fairly easy to link up demographics with specific people. While I'm not a proponent of abortion, this seems to me to be an unnecessary and potentially dangerous government intrusion on one's privacy.
"The law, which will take effect on Nov. 1, compels the Oklahoma Department of Health to publish data online on all abortion patients -- including the woman's race, marital status, financial circumstances, years of education, number of previous pregnancies, and her reason for seeking the abortion."
If there's any silver lining here, it's that patients' names aren't being published, so there's no way to link a particular person to a given procudure. Still, it's hard to see how publsihing the data itself helps anyone; absent context, what's the point?
According to the state Representative who authored the bill, the purpose is "stepping up education that targets demographics with high rates of unwanted pregnancies." What kind of education, one may ask? The article doesn't say, but it's likely linked to funding of some sort (perhaps Medicaid?). Granted, the Hyde Amendment prohibits federal funds from paying for abortions, but this seems a stretch.
HIPAA (the Health Insurance Portability and Accountability Act) is pretty stringent when it comes to protecting personal health information (PHI); omitting names from the published data would seem to adhere to the letter of these requirements. But it's not hard to imagine that in small, rural communities (of which I'm sure The Sooner State has at least its share) it would be fairly easy to link up demographics with specific people. While I'm not a proponent of abortion, this seems to me to be an unnecessary and potentially dangerous government intrusion on one's privacy.
Wednesday, October 21, 2009
Outstanding Customer Service
Although this is not strictly an insurance-related post, I feel compelled to relate an example of "delighting your customer." Recently, my eldest was involved in a relatively minor (but no less traumatic) "fender bender." She drives a 16 year old car, handed down from her (late) grandmother, and she rear-ended another vehicle. Her car got the worst of that exchange, with a busted headlight, buckled hood and a slightly bent cross-bar under said hood.
No one was injured (the most important thing), and her car was driveable, but we felt it was unsafe and started looking around for someone to repair it. Since it is such an old car, we don't carry collision insurance on it, so the repairs would have to be done on "our dime." Needless to say, we were not looking forward to the experience (or the bill).
My good friend Bill Montgomery recommended Chuck's Body Shop in nearby Fairborn, Ohio (about a 20 minute drive away). I called Chuck's, and explained our dilemna to Rick (who seems to run the place). He assured me that this was not going to be a budget-busting repair, and we took the car in. Rick eyeballed it, came up with a rough estimate, and we then went inside, where he carefully looked up all the parts he'd need, ran the numbers, and (this was the cool part) came up with a final tally that was within a few dollars of his top-of-the-head guesstimate.
We've just returned from picking it up, the repairs having been done when Rick had promised, at the price we had agreed upon. No surprises.
Well, there were one or two:
After replacing the hood, he noticed that its shiny newness would look rather strange next to the rest of the front-end's 16 year old patina, so he buffed out the fenders and doors to soften the transition. And when he was washing the car for final delivery, he noticed a decent-sized rust spot on the roof, which he sanded out and touched up.
Needless to say, we were both thrilled at the condition of the car, and the obvious pride that Rick and company (justifiably) take in their work. If you're in the Dayton area and need body work for your vehicle, I can unequivocally and enthusiastically recommend Chuck's.
No one was injured (the most important thing), and her car was driveable, but we felt it was unsafe and started looking around for someone to repair it. Since it is such an old car, we don't carry collision insurance on it, so the repairs would have to be done on "our dime." Needless to say, we were not looking forward to the experience (or the bill).
My good friend Bill Montgomery recommended Chuck's Body Shop in nearby Fairborn, Ohio (about a 20 minute drive away). I called Chuck's, and explained our dilemna to Rick (who seems to run the place). He assured me that this was not going to be a budget-busting repair, and we took the car in. Rick eyeballed it, came up with a rough estimate, and we then went inside, where he carefully looked up all the parts he'd need, ran the numbers, and (this was the cool part) came up with a final tally that was within a few dollars of his top-of-the-head guesstimate.
We've just returned from picking it up, the repairs having been done when Rick had promised, at the price we had agreed upon. No surprises.
Well, there were one or two:
After replacing the hood, he noticed that its shiny newness would look rather strange next to the rest of the front-end's 16 year old patina, so he buffed out the fenders and doors to soften the transition. And when he was washing the car for final delivery, he noticed a decent-sized rust spot on the roof, which he sanded out and touched up.
Needless to say, we were both thrilled at the condition of the car, and the obvious pride that Rick and company (justifiably) take in their work. If you're in the Dayton area and need body work for your vehicle, I can unequivocally and enthusiastically recommend Chuck's.
Pre-Halloween CoR: Better Than Candy Corn
Workers Comp Insider has a pre-Halloween edition full of treats (and a few tricks). Be sure to check it out.
Tuesday, October 20, 2009
Stupid Consumer Tricks
Regular readers are familiar with our "Stupid Carrier Tricks" series; a lesser-known version recounts those all-too-infrequent occasions where a carrier "gets it right." I'm very pleased to say that this is one of the latter.
In an email I received yesterday, Aetna says that it's finally had enough of agents and employers taking advantage of the low rates afforded to and by high deductible health plans. The point of these plans is to encourage and empower consumer participation in health care decisions, making more economically and medically efficient choices regarding health care. The problem is that some folks are "gaming" the system by wrapping these plans with substantial first-dollar benefits, thereby defeating the purpose, and diluting the net gain.
Okay, let's try that in English, instead of insure-speak:
By choosing a high deductible, "no frills" health insurance plan, consumers (whether that's an employer group or folks on individual policies) enjoy lower premiums. That's because the insurer doesn't have to adjudicate a lot of small, routine claims and can thus save money on administrative costs. It also encourages consumers to make conscious decisions about health care, because they now have "skin in the game." These premium savings help the consumer more easily absorb the occasional catastrophic claim, because they've sent less money to the insurance company.
A classic "win-win" scenario.
Except when it isn't:
Apparently, a number of employer (or group) plans have been providing first dollar coverage to their covered employees. So that if, for example, the plan has a $1500 deductible, the employer is ponying up $500 or $1000 of that on the employees' behalf (or reimbursing them when claims are made). Thus, the employee has little or no incentive to make careful health care decisions, since the lower-cost high deductible plan ends up working pretty much like the high-cost co-pay plan it replaced.
If this sounds like an HRA (Health Reimbursement Arrangement), you're not far off.
Aetna finally figured out that a lot of their insured groups were doing just that, and using the savings to subsidize the higher out-of-pocket, thereby defeating whatever cost savings the plan might have engendered. And they're putting the kibosh on it:
"In recent months, Aetna has seen an increase in "underlying" or "wrap-around" plans that have not been disclosed prior to premium quoting.
We define an underlying or wrap around plan as any plan that either partially or completely subsidizes any member cost sharing outside of a federally-qualified Health Reimbursement Account (HRA) or Health Savings Account (HSA). Member cost sharing includes but is not limited to co-pays, deductibles and/or member coinsurance balances. (Employee funded Flexible Spending Accounts are not considered underlying plans) .*" [emphasis in original]
The offending employers have been kicking in 50% - or more! - of the underlying deductible, which has resulted in adverse selection, reduced health care savings, and increased "trend" (one factor in rate increases). This in turn has led to tainted risk pools and reduced end-user (consumer) savings, and presumably higher than expected rate increases at renewal time.
So what, you may ask, do they propose to do about this?
Going forward, they'll be requiring employers to "attest that no such underlying plans are present and that they are not funding the deductible in excess of 50% annually whether through an HRA or HSA." It's a separate form that must accompany all applicable new group applications. The form will essentially require the employer to promise not to pay more than 50% of the plan deductible. And this new rule has teeth: if the employer lies on that form and ends up subsidizing in excess of that 50% cap, it faces "rate increases, non-renewal, or termination."
Which, of course, begs the question: how would they know?
And that's a great question. I called Aetna this morning, and was told that, much like Blanche DuBois, they'll be relying on the employers' honesty. In other words, that they'll drop a dime on themselves. Uh-hunh.
While it would be easy to dismiss this out of hand, I must admit that I don't know how they'd track this, either. One would think that patterns could be seen in offending groups' claims, but perhaps that's not yet feasible. It's a shame, really, because it unfairly affects those groups who do choose to play by the rules.
In an email I received yesterday, Aetna says that it's finally had enough of agents and employers taking advantage of the low rates afforded to and by high deductible health plans. The point of these plans is to encourage and empower consumer participation in health care decisions, making more economically and medically efficient choices regarding health care. The problem is that some folks are "gaming" the system by wrapping these plans with substantial first-dollar benefits, thereby defeating the purpose, and diluting the net gain.
Okay, let's try that in English, instead of insure-speak:
By choosing a high deductible, "no frills" health insurance plan, consumers (whether that's an employer group or folks on individual policies) enjoy lower premiums. That's because the insurer doesn't have to adjudicate a lot of small, routine claims and can thus save money on administrative costs. It also encourages consumers to make conscious decisions about health care, because they now have "skin in the game." These premium savings help the consumer more easily absorb the occasional catastrophic claim, because they've sent less money to the insurance company.
A classic "win-win" scenario.
Except when it isn't:
Apparently, a number of employer (or group) plans have been providing first dollar coverage to their covered employees. So that if, for example, the plan has a $1500 deductible, the employer is ponying up $500 or $1000 of that on the employees' behalf (or reimbursing them when claims are made). Thus, the employee has little or no incentive to make careful health care decisions, since the lower-cost high deductible plan ends up working pretty much like the high-cost co-pay plan it replaced.
If this sounds like an HRA (Health Reimbursement Arrangement), you're not far off.
Aetna finally figured out that a lot of their insured groups were doing just that, and using the savings to subsidize the higher out-of-pocket, thereby defeating whatever cost savings the plan might have engendered. And they're putting the kibosh on it:
"In recent months, Aetna has seen an increase in "underlying" or "wrap-around" plans that have not been disclosed prior to premium quoting.
We define an underlying or wrap around plan as any plan that either partially or completely subsidizes any member cost sharing outside of a federally-qualified Health Reimbursement Account (HRA) or Health Savings Account (HSA). Member cost sharing includes but is not limited to co-pays, deductibles and/or member coinsurance balances. (Employee funded Flexible Spending Accounts are not considered underlying plans) .*" [emphasis in original]
The offending employers have been kicking in 50% - or more! - of the underlying deductible, which has resulted in adverse selection, reduced health care savings, and increased "trend" (one factor in rate increases). This in turn has led to tainted risk pools and reduced end-user (consumer) savings, and presumably higher than expected rate increases at renewal time.
So what, you may ask, do they propose to do about this?
Going forward, they'll be requiring employers to "attest that no such underlying plans are present and that they are not funding the deductible in excess of 50% annually whether through an HRA or HSA." It's a separate form that must accompany all applicable new group applications. The form will essentially require the employer to promise not to pay more than 50% of the plan deductible. And this new rule has teeth: if the employer lies on that form and ends up subsidizing in excess of that 50% cap, it faces "rate increases, non-renewal, or termination."
Which, of course, begs the question: how would they know?
And that's a great question. I called Aetna this morning, and was told that, much like Blanche DuBois, they'll be relying on the employers' honesty. In other words, that they'll drop a dime on themselves. Uh-hunh.
While it would be easy to dismiss this out of hand, I must admit that I don't know how they'd track this, either. One would think that patterns could be seen in offending groups' claims, but perhaps that's not yet feasible. It's a shame, really, because it unfairly affects those groups who do choose to play by the rules.
Monday, October 19, 2009
Singin' the Blues: A History Lesson
[Welcome Industry Radar readers!]
Bob and I frequently offer advice and opinion at a consumer-related bulletin board; folks post questions or describe insurance problems, and we (along with a few others) try to help out.
One of the other "regulars" there is a gentleman named Jay, who is an active, involved and knowledgeable insurance regulator. Jay brings an interesting perspective to the board: although he doesn't sell insurance, he has a unique, "insiders view" of how it works (and how it doesn't). Recently, a poster asked about whether or not Blue Cross/Blue Shield was a not-for-profit venture. Jay was kind enough to recount some of the history of that organization, and has agreed to let us share that with our readers:
[JAY:]
This is a pretty close history. Back in the Depression days (the FDR one), doctors and hospitals were concerned about getting paid during the hard times. Obviously, medical care was needed, even during the Depression, so the states provided "seed" money to start BC/BS plans in the states. These were initially organized by the doctors [Blue Shield] and the hospitals [Blue Cross] in the states, sort of like the state medical association.
What the public generally doesn't know is that each plan is a separate entity, and some states have, or had, several Blues operating. Ohio had plans in Cleveland, Columbus and Cincinnati at one time. Illinois had plans in Chicago and Rockford. These were organized under special sections of the state insurance code....not the same laws that governed "commercial" insurers like Prudential or Mutual of Omaha. They got special treatment because of the public need to continue medical care and keep facilities open. They were all non-profits to start with under this organizational model.
Then, in the 1980's I think, the Blues in Chicago was the first to convert to a "for profit" and reorganized as a mutual insurance company. This was not without much controversy and consternation. Repayment of the seed money to the state, or other charitable purposes was required. The Illinois Blues in Chicago was my very first exam back in October 1974, 35 years ago [ed: Jay was a child prodigy: he was a mere 5 years old at the time]. They were still non-profit, but somehow had several hundred million dollars in cash sitting in bank accounts. Other Blue plans followed suit after Illinois, and a couple other state plans broke the ice and ceased being organized as non-profits.
Nearly all have now converted to either stock or mutual insurance companies and have surrendered the special treatment they once enjoyed under the various state insurance codes. The North Dakota plan is still non-profit and there may be a few others left.
Some of the perks for being a non-profit were substantial; exemption from state taxation, agents didn't have to be licensed to sell Blue plans if that was all they sold, many other very favorable accommodations due to the crisis in the depression.
[IB:]
Thanks, Jay! Readers with additional questions or information are encouraged to share them in the comments; we'll be happy to pass them on.
Bob and I frequently offer advice and opinion at a consumer-related bulletin board; folks post questions or describe insurance problems, and we (along with a few others) try to help out.
One of the other "regulars" there is a gentleman named Jay, who is an active, involved and knowledgeable insurance regulator. Jay brings an interesting perspective to the board: although he doesn't sell insurance, he has a unique, "insiders view" of how it works (and how it doesn't). Recently, a poster asked about whether or not Blue Cross/Blue Shield was a not-for-profit venture. Jay was kind enough to recount some of the history of that organization, and has agreed to let us share that with our readers:
[JAY:]
This is a pretty close history. Back in the Depression days (the FDR one), doctors and hospitals were concerned about getting paid during the hard times. Obviously, medical care was needed, even during the Depression, so the states provided "seed" money to start BC/BS plans in the states. These were initially organized by the doctors [Blue Shield] and the hospitals [Blue Cross] in the states, sort of like the state medical association.
What the public generally doesn't know is that each plan is a separate entity, and some states have, or had, several Blues operating. Ohio had plans in Cleveland, Columbus and Cincinnati at one time. Illinois had plans in Chicago and Rockford. These were organized under special sections of the state insurance code....not the same laws that governed "commercial" insurers like Prudential or Mutual of Omaha. They got special treatment because of the public need to continue medical care and keep facilities open. They were all non-profits to start with under this organizational model.
Then, in the 1980's I think, the Blues in Chicago was the first to convert to a "for profit" and reorganized as a mutual insurance company. This was not without much controversy and consternation. Repayment of the seed money to the state, or other charitable purposes was required. The Illinois Blues in Chicago was my very first exam back in October 1974, 35 years ago [ed: Jay was a child prodigy: he was a mere 5 years old at the time]. They were still non-profit, but somehow had several hundred million dollars in cash sitting in bank accounts. Other Blue plans followed suit after Illinois, and a couple other state plans broke the ice and ceased being organized as non-profits.
Nearly all have now converted to either stock or mutual insurance companies and have surrendered the special treatment they once enjoyed under the various state insurance codes. The North Dakota plan is still non-profit and there may be a few others left.
Some of the perks for being a non-profit were substantial; exemption from state taxation, agents didn't have to be licensed to sell Blue plans if that was all they sold, many other very favorable accommodations due to the crisis in the depression.
[IB:]
Thanks, Jay! Readers with additional questions or information are encouraged to share them in the comments; we'll be happy to pass them on.
Sunday, October 18, 2009
It's a Small (Blog) World
One of the coolest things about blogging is the (occasional) opportunity to meet blog-friends in real life. I had that pleasure last year when Bob and I met in person for the first time. And today, I had a similar experience when Joe Kristan and I crossed paths at the 2009 DePaul University Family Weekend.
Joe's son and my daughter are both freshman at the home of the Blue Demons, and both of us were looking forward to connecting while we were there. Our schedules finally meshed this morning when our families met for brunch at the Student Center.
Regular readers know that I turn to Joe when there's an accounting issue or, for example, the Stranger Owned Life Insurance debacle. He brings a unique sense of humor to an otherwise dry topic, and has become a good "blog buddy." It was truly a pleasure to meet Joe and his lovely family, and we're looking forward to seeing them again as our students wend their way through their undergraduate careers.
'Til then:
Joe's son and my daughter are both freshman at the home of the Blue Demons, and both of us were looking forward to connecting while we were there. Our schedules finally meshed this morning when our families met for brunch at the Student Center.
Regular readers know that I turn to Joe when there's an accounting issue or, for example, the Stranger Owned Life Insurance debacle. He brings a unique sense of humor to an otherwise dry topic, and has become a good "blog buddy." It was truly a pleasure to meet Joe and his lovely family, and we're looking forward to seeing them again as our students wend their way through their undergraduate careers.
'Til then:
Friday, October 16, 2009
Cavalcade of Risk #90: Call for Submissions
Next week's edition is hosted by the lovely and talented Julie Ferguson, who also coordinates the Health Wonk Review. Submissions for next week's edition are due this Monday (the 19th), and CavRisk #90 goes live on the 21st. Julie asks that you include:
■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post
And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).
You can submit your post via Blog Carnival or email.
ALSO: We're scheduling fall Cav's now, please let me know if you'd like to host one.
■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post
And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).
You can submit your post via Blog Carnival or email.
ALSO: We're scheduling fall Cav's now, please let me know if you'd like to host one.
Thursday, October 15, 2009
Health Wonk Review: Lean, Mean, & Clean Edition
The most frustrating thing about the last time I hosted was the number of bloggers who refused, even after repeated cajoling, to actually post a link to the edition. I was determined to exclude their entries this time; while there's no rule which requires folks to link, I believe that it's a moral imperative to do so when your post is featured.
Alas and alack, nary a one of the offenders submitted a post this time ((perhaps out of shame?). And that's great, because we have some new faces in this edition, blogs and bloggers with which I was previously not familiar (and I bet a bunch of y'all weren't, either!). I've elected a rather pedestrian format for this outing: first in, first up.
So sit back, relax, and enjoy the best that Health Policy Wonks have to offer:
■ Anticlue Blogress Elyse Nielsen takes a look at the graying of an interesting, and oft-ignored, demographic: nurses. Elyse points out that "(n)urses are known for making workarounds work to get the job completed in the best interests of patient safety." But, having "too many changes for nurses to digest at a single time is a chief cause of burnout."
Who knew?
Who knew?
■ On the "swine" flu front, David Harlow sneaks in with an early post about Microsoft's new partnership with Emory University. The Redmond Giant has "launched a simple-on-its face online tool in that leads visitors through a simple Q&A to let them know if they should go see a doctor for H1N1 or stay home and rest."
But wait, there's more! "Behind the façade are a host of goodies and architecture for more to come, including a new sort of real-time epidemiological study tool."
But wait, there's more! "Behind the façade are a host of goodies and architecture for more to come, including a new sort of real-time epidemiological study tool."
I hope David forgives me for this, but do you know what to do if you're diagnosed with either the "bird" or "swine" flu strains?
Well, "bird" flu requires tweetment, while "swine" flu responds to a simple oinkment (I'm here all week, try the veal).
Well, "bird" flu requires tweetment, while "swine" flu responds to a simple oinkment (I'm here all week, try the veal).
■ Is there a moral component to our increased longevity? Brian at the How to Live a Longer Life blog thinks so. He notes that, while "medicine is able to keep people alive much longer than in decades past, the lifestyles of our oldest people has always been based on a mortality schedule that was much shorter." Quite the conundrum.
But what's so wrong with that? Well, Brian believes that "bodies break down as directed but new medicine keeps them alive anyway resulting in sometimes huge personal and societal costs."
A valid point.
A valid point.
■ Healthcare Hack Amer Kaissi wonders what lessons we can take from Massachusetts "universal coverage" plan, and finds it wanting on several levels. Amer asks if perhaps there's something to be learned from this.
I, for one, believe there is.
I, for one, believe there is.
■ UberWonker Dr Roy Poses has a scathing review of the politics of running a hospital. What, exactly, renders someone as qualified to serve on a hospital's board? Is it relevant experience, prestige or simply wanting to mix "with one's own kind?"
Dr Roy ponders the impact of these choices on the future of health care reform efforts.
Dr Roy ponders the impact of these choices on the future of health care reform efforts.
■ Jaan Sidorov is one of my very favorite health policy bloggers. His posts are clear and concise, and raise interesting, thoughtful questions. And this one's no different: Looking at the Baucus Bill one is almost required to conclude that if it passes, Fee For Service Medicare will be "'transmogrified,’ Calvin n Hobbs style, into managed care." Perhaps that explains all those Angry Seniors this past August.
■ Meanwhile, Richard Elmore reports on the Congressional Budget Office’s (CBO) scoring of the costs and revenues attached to the Baucus Bill. He wonders out loud "where does that $829 billion go?" Thankfully, he has the numbers to back up his conclusions.
■ Jason Shafrin is another of my favorite Wonks. While so many folks focus on the medical side of, well, medicine, Jason casts his critical, economist's eyes on the numbers that drive it. In this post, he has the story of how, in 1996, Pennsylvania repealed "certificate of need laws" for coronary artery bypass graft (CABG) surgeries, and he evaluates whether or not this helped improve efficiency.
■ Over at EHR Bloggers, Dr Glen Laffel [ed: is it just me, or do we have a run of doc's here today?] reviews a study of the Veteran Administration's vaunted Electronic Health Records program, called VistA.
That study seems to show that "physicians prompted by quality-related alerts regarding their patients didn't always respond to the alerts." The result? "(T)his lack of follow-up frequently was associated with quality of care problems."
Ya think?
Ya think?
■ Health Business Blogger David Williams tends to look at health care as a, well, business, and he wonders if either the California or Massachusetts plans offer us any "clues to the fate of Federal health reform." You'll have to read the post to find out (and I promise you won't be disappointed).
■ Adam Fein takes a look at Wal-Mart’s claim that many health-care services should be priced as low-cost commodities and explains what it means for pharmacies and PBMs.
■ Workers Comp Insider's Jon Coppelman deviates from that worthy blog's usual mission to comment on a peculiar kind of underwriting denial by health insurance plans in seven states. In his post The Battered Need Not Apply, Jon makes it quite clear that he's not impressed.
■ At the Health Access Blog, Anthony Wright wonders if AHIP (the Association of Health Insurance Plans) was ever really "on board" for reform.
■ Joanne Kenen, blogging at New America, has a message for folks who are disappointed in the current crop of reform legislation: "go back a year to what we thought the best case scenario was at the time, and realize how far we've come."
■ Ken Terry parses Rahm Emanuel's stint on a recent PBS news show, and takes issue with the Mr E's notion that any of the bills now under consideration guarantees health care to anyone.
■ Health Affairs blogger Chris Fleming has some thoughts on whether or not Congress can still turn around the slumping poll numbers for reform.
■ Louise Norris, co-blogger at Colorado Health Insurance Insider, is concerned about Cover Colorado (a state effort to extend health insurance coverage to the uninsured). As Louise explains, part of the problem is that they'd like to "attract healthier applicants and perhaps improve their loss ratio." The challenge is how to do that.
■ Our own contribution has some startling information about health insurance claim denials, and which insurer has the worst record (the answer may surprise you).
Or maybe not.
Well, that's it for this week's edition; please remember to tune in on the 29th when Tinker Ready at Boston Health News hosts.
And consider hosting an HWR yourself: Julie and Joe make it easy, painless and fun. Just click here to volunteer. I guarantee you'll have fun (or double your money back!).
Wednesday, October 14, 2009
Flying the (Not So) Friendly Skies
One of the primary reasons that we don't already have a nationalized health care system is the so-called "Public Option." For it or agin, it is a deal-breaker. Include it, and moderates and those right-of-center balk. Exclude it, and those on the left scream bloody murder. The current ploy seems to be a variation on bait-and-switch: exclude it from the bill, then add it back in during reconciliation. That, of course, has its own perils.
But would the Public Option really be all that bad? Isn't it possible to have "a little bit o'gummint" in the game, to keep the insurance carriers honest?
You be the judge:
[Hat Tip: Hot Air]
But would the Public Option really be all that bad? Isn't it possible to have "a little bit o'gummint" in the game, to keep the insurance carriers honest?
You be the judge:
[Hat Tip: Hot Air]
Michelle's Law: Something New Under the Sun
Suppose you're a college student who develops a serious, perhaps even life-threatening condition such as colon cancer. And further suppose that, as part of your treatment, your oncologist recommends that you take time off from school in order to promote the healing process and receive more treatment. All well and good, except that you're on your dad's employer's health plan, and one of the requirements for continued eligibility is to be a full-time student.
Now you're faced with an impossible conundrum: if you stay in school, you stay on the health plan, but your odds of beating the cancer plummet. On the other hand, if you follow your doctor's orders, you'll be dropped from the plan, and then what?
Talk about a rock and a hard place!
But this is not just a hypothetical scenario: New Hampshire college student Michelle Morse faced just this dilemna. Unfortunately, she passed away in 2005, but her legacy is a gift to others who might face the same problem: In October of last year, President Bush signed into law HR 2851, commonly referred to as "Michelle's Law." The law, which became effective last week, requires that health insurance policies must keep a dependent's coverage in force during a "medically necessary leave of absence." And they must maintain that plan until "one year after the first date of the medically necessary leave of absence, or the date coverage would otherwise terminate under the plan."
There are, of course, some mechanisms built in to discourage abuse, such as physician certification and the like. But the point is, the previously onerous decision between coverage and health has been obviated. How many young people will this really effect? Who knows, but if just one life is saved, isn't that worth it? I can't imagine that this would significantly effect premiums; yes, it's an additional mandate, which we're generally not too fond of here at IB, but it's the exception that (perhaps) proves the rule.
[Hat Tip: Humana]
Now you're faced with an impossible conundrum: if you stay in school, you stay on the health plan, but your odds of beating the cancer plummet. On the other hand, if you follow your doctor's orders, you'll be dropped from the plan, and then what?
Talk about a rock and a hard place!
But this is not just a hypothetical scenario: New Hampshire college student Michelle Morse faced just this dilemna. Unfortunately, she passed away in 2005, but her legacy is a gift to others who might face the same problem: In October of last year, President Bush signed into law HR 2851, commonly referred to as "Michelle's Law." The law, which became effective last week, requires that health insurance policies must keep a dependent's coverage in force during a "medically necessary leave of absence." And they must maintain that plan until "one year after the first date of the medically necessary leave of absence, or the date coverage would otherwise terminate under the plan."
There are, of course, some mechanisms built in to discourage abuse, such as physician certification and the like. But the point is, the previously onerous decision between coverage and health has been obviated. How many young people will this really effect? Who knows, but if just one life is saved, isn't that worth it? I can't imagine that this would significantly effect premiums; yes, it's an additional mandate, which we're generally not too fond of here at IB, but it's the exception that (perhaps) proves the rule.
[Hat Tip: Humana]
Tuesday, October 13, 2009
Stupid Agent Tricks: Indexed Life
We don't generally take positions regarding the kinds of life insurance plans folks should buy. The primary reason for this is that we don't know you, or your needs or goals, so it would be presumptuous of us to try. From time to time, we'll recommend that you buy, for example, disability income or long term care coverage, or look to see if your existing life insurance plans are adequate (and adequately funded).
But that's as far as we'll go.
Unfortunately, there are folks in our industry who speak first (and loudly) before thinking. Such is the case, apparently, with agent Brian Anderson. I came across Mr Anderson's name and claim to fame via this thorough fisking by "The Irrational Investor," Allan Roth. Mr Roth is not a fan of annuities (and, presumably, other forms of cash value insurance products). He challenged insurance folks to convince him that their product would out-perform more traditional investments, and promised to invest $100,000 with them if they could rise to that challenge.
Apparently, Mr Anderson was long on hat and short on cattle:
"The first promise to go in the challenge was the claim that I could “take out the gains Tax Free for retirement income.” That went out the door because paying the full $100,000 up front disqualified it from IRS rules letting me borrow gains against the policy, as this is technically called a Modified Endowment Contract (MEC)."
Ooops! That's really very basic stuff to get so wrong, and it didn't get any better. If you're interested in why insurance and investing seldom mix, I recommend reading the whole thing.
But that's as far as we'll go.
Unfortunately, there are folks in our industry who speak first (and loudly) before thinking. Such is the case, apparently, with agent Brian Anderson. I came across Mr Anderson's name and claim to fame via this thorough fisking by "The Irrational Investor," Allan Roth. Mr Roth is not a fan of annuities (and, presumably, other forms of cash value insurance products). He challenged insurance folks to convince him that their product would out-perform more traditional investments, and promised to invest $100,000 with them if they could rise to that challenge.
Apparently, Mr Anderson was long on hat and short on cattle:
"The first promise to go in the challenge was the claim that I could “take out the gains Tax Free for retirement income.” That went out the door because paying the full $100,000 up front disqualified it from IRS rules letting me borrow gains against the policy, as this is technically called a Modified Endowment Contract (MEC)."
Ooops! That's really very basic stuff to get so wrong, and it didn't get any better. If you're interested in why insurance and investing seldom mix, I recommend reading the whole thing.
Res Ipsa Loquitur, or: Buying Len a Clue
Sometimes, the email we receive is so unintentionally funny, I just have to respond. In this case, the New America Foundation, in the person of its Director of the Health Policy Program Len Nichols, went off on a baseless and error-infested rant regarding AHIP's opportunistic ObamaCare about-face.
Having initially tied itself to the ObamaCare wagon, the self-proclaimed spokesgroup for health insurance companies has decided to untie itself, having finally figured out something we've been saying for quite some time: that Obamacare will lead to major premium increases, less competition and health care rationing. In the spirit of graciousness, we welcome the AHIP to reality.
What has Len's knickers in a wad is that AHIP finally decided that maybe it would be a good idea to have an independent organization vet the plan (such as it is), to see if it truly was the Holy Grail. To that end, they engaged the respected accounting firm Price Waterhouse Cooper to run the numbers. What PWC found is that "the typical family premium in 2019 could cost $4,000 more than projected." And as Bob has pointed out, it will also shift the cost of Medicare cuts to privately insured patients, and rate increases will disproportionally impact younger folks. What a great deal!
Len begins by constructing a straw man that would do L Frank Baum proud: "Most think tank work is funded by Foundations, which by law are nonpartisan."
That would be wrong: there is nothing that requires (or even suggests) that any "Foundation" be apolitical. And if he wants to cast stones, then he ought not to be quoting two of the most hyper-partisan such groups around, the Urban League and the Robert Wood Johnson Foundation.
Shooting the messenger is, of course, a time-honored tradition, but Mr Nichols isn't content with just shooting it, he means to obliterate it:
"Good policy research uses nationally and statistically representative data so that its conclusions reflect behavior of the actual population."
Since when?
Almost all polls are done with samples that are weighted for a specific bias. His take isn't even good statistics.
Gotta love this one:
"The report ignores the subsidies included in the Finance Committee bill." Hunh? From where does he think these "subsidies" come? Here's a clue, Len: they come from the taxpayer, including that hypothetical family of four.
And this, along the same lines:
"The report ignores the excise tax on high-cost plans." Who do you think pays those, Len? Certainly not those on funemployment, thanks in large part to the Spendulus.
This is simply amazing:
"The report assumes that all Medicare savings will be converted into private sector cost shifts."
Well, dunh! That's because Nancy, Harry and Barry have been claiming this to be one of the primary goals of the legislation. Are you calling them liars now?
And this is pure gold:
"The report ignores the fact that under the Senate Finance bill, "If you like your coverage, you can keep it."
That's because, as we've documented, you can't; this was never a goal of ObamaCare, and it's disingenuous to suggest it ever was.
It's unfortunate that Mr Nichols and his crew must resort to obfuscation to try to save this quickly sinking ship. But it's of a piece with those who believe that a nationalized health care scheme is a "good thing."
Not even close.
Having initially tied itself to the ObamaCare wagon, the self-proclaimed spokesgroup for health insurance companies has decided to untie itself, having finally figured out something we've been saying for quite some time: that Obamacare will lead to major premium increases, less competition and health care rationing. In the spirit of graciousness, we welcome the AHIP to reality.
What has Len's knickers in a wad is that AHIP finally decided that maybe it would be a good idea to have an independent organization vet the plan (such as it is), to see if it truly was the Holy Grail. To that end, they engaged the respected accounting firm Price Waterhouse Cooper to run the numbers. What PWC found is that "the typical family premium in 2019 could cost $4,000 more than projected." And as Bob has pointed out, it will also shift the cost of Medicare cuts to privately insured patients, and rate increases will disproportionally impact younger folks. What a great deal!
Len begins by constructing a straw man that would do L Frank Baum proud: "Most think tank work is funded by Foundations, which by law are nonpartisan."
That would be wrong: there is nothing that requires (or even suggests) that any "Foundation" be apolitical. And if he wants to cast stones, then he ought not to be quoting two of the most hyper-partisan such groups around, the Urban League and the Robert Wood Johnson Foundation.
Shooting the messenger is, of course, a time-honored tradition, but Mr Nichols isn't content with just shooting it, he means to obliterate it:
"Good policy research uses nationally and statistically representative data so that its conclusions reflect behavior of the actual population."
Since when?
Almost all polls are done with samples that are weighted for a specific bias. His take isn't even good statistics.
Gotta love this one:
"The report ignores the subsidies included in the Finance Committee bill." Hunh? From where does he think these "subsidies" come? Here's a clue, Len: they come from the taxpayer, including that hypothetical family of four.
And this, along the same lines:
"The report ignores the excise tax on high-cost plans." Who do you think pays those, Len? Certainly not those on funemployment, thanks in large part to the Spendulus.
This is simply amazing:
"The report assumes that all Medicare savings will be converted into private sector cost shifts."
Well, dunh! That's because Nancy, Harry and Barry have been claiming this to be one of the primary goals of the legislation. Are you calling them liars now?
And this is pure gold:
"The report ignores the fact that under the Senate Finance bill, "If you like your coverage, you can keep it."
That's because, as we've documented, you can't; this was never a goal of ObamaCare, and it's disingenuous to suggest it ever was.
It's unfortunate that Mr Nichols and his crew must resort to obfuscation to try to save this quickly sinking ship. But it's of a piece with those who believe that a nationalized health care scheme is a "good thing."
Not even close.
Budgeting for Healthcare
Humana's released another of their "Now You Know" type videos; this one is a sort of follow-up to last month's vid about handling catastrophic losses. I'm not sure I agree with their snarky comment that "if your savings get wiped out because of health care costs, you won't be getting a bailout:" what makes them so sure?
Still, I like the way they introduce how to budget for health care costs; one of the things they recommend is choosing Consumer Driven Health Plans. Regular readers are familiar with Bob's characterization of co-pay plans as "Phantom Insurance;" it appears that Humana endorses this principle (that's a good thing):
Still, I like the way they introduce how to budget for health care costs; one of the things they recommend is choosing Consumer Driven Health Plans. Regular readers are familiar with Bob's characterization of co-pay plans as "Phantom Insurance;" it appears that Humana endorses this principle (that's a good thing):
Carnival of Personal Finance is up
JLP, blogging at All Financial Matters, hosts this week's roundup of finance-related posts.
Monday, October 12, 2009
Kindle'ing IB
No, not that kind of kindling, this kind of Kindle.
Our readers may not be aware, but for a number of years we've been a featured contributor to a news aggregator called Newstex. Newstex is a service to which a lot of corporate offices subscribe, and I just received an email from our contact there:
"We are happy to report that Newstex, with Amazon Kindle, is extending your brand into new and exciting technologies, such as e-book reading devices. Congratulations, InsureBlog is available on the Kindle store ... Newstex is pleased to announce that Amazon has chosen Newstex's Blogs On Demand for distribution of Newstex blogs for purchase on the Kindle."
Cool!
So, if you own one of these devices (I'm jealous!) you can subscribe to have IB delivered straight to your backlit screen. Have fun!
Our readers may not be aware, but for a number of years we've been a featured contributor to a news aggregator called Newstex. Newstex is a service to which a lot of corporate offices subscribe, and I just received an email from our contact there:
"We are happy to report that Newstex, with Amazon Kindle, is extending your brand into new and exciting technologies, such as e-book reading devices. Congratulations, InsureBlog is available on the Kindle store ... Newstex is pleased to announce that Amazon has chosen Newstex's Blogs On Demand for distribution of Newstex blogs for purchase on the Kindle."
Cool!
So, if you own one of these devices (I'm jealous!) you can subscribe to have IB delivered straight to your backlit screen. Have fun!
Social Security Disability: FYI
We've all heard the horror stories of how difficult it is to apply, and ultimately qualify, for Social Security disability benefits. First, there's the rather onerous definition of what it means to be disabled:
■ You cannot do work that you did before;
■ We decide that you cannot adjust to other work because of your medical condition(s); and
■ Your disability has lasted or is expected to last for at least one year or to result in death.
What you may not have known is what happens after you've been approved. My understanding has always been that once one's claim is approved, the gummint sends a check for what should have been paid for the preceding months (years?) while the claim was under review, back to the date that Social Security has determined one first became disabled.
This is incorrect.
Recently, a very good friend was helping out a cousin who had become disabled (medically, if not by SSA's definition). He obtained all the necessary documentation (POA, HCPOA, etc) and filed the claim. During the porocess, he also made at least one trip to the Columbus (OH) SSA office to drop off even more paperwork and answer even more questions. Eventually, his cousin's claim was approved.
But that's just the beginning.
On September 22nd (less than a month ago), he received the approval letter from Social Security. It informed him that his cousin "became disabled under our rules on August 4, 2008" (he had filed the claim with a 2007 date of disability, this was pushed forward by the folks at Social Security). It also informed him that:
"(Y)ou have to be disabled for 5 full calendar months in a row before you can be entitled to benefits ... your first month of entitlement to benefits is February 2009"
That means that, instead of a check representing a year of benefits (August of 2008 through August of this year), she would receive a check for only 7 months (February through August). In her case, this is almost $8,000 that won't be paid out.
And the hits keep coming:
"You will receive $[redacted] around September 18, 2009" (remember, the letter is dated September 22nd). He received similar letter on the 30th, promising his cousin's check a week later.
Then on October 7th, he was told that "the check is in the mail," but that seems to be inoperative, as well.
There are a number of important lessons here:
First, contrary to popular belief, the "lump sum payment" is not based on the date of disability, but rather 5 months later, amounting to a 5 month "waiting period" (similar to personal disability policies). One could easily lose the house and everything else waiting for that.
Second, it shows how vitally important it is for folks to own their own disability policies (or at least take advantage of group plans at one's workplace). If you're counting on Social Security disability, it could be even longer than you believed to actually receive a check.
■ You cannot do work that you did before;
■ We decide that you cannot adjust to other work because of your medical condition(s); and
■ Your disability has lasted or is expected to last for at least one year or to result in death.
What you may not have known is what happens after you've been approved. My understanding has always been that once one's claim is approved, the gummint sends a check for what should have been paid for the preceding months (years?) while the claim was under review, back to the date that Social Security has determined one first became disabled.
This is incorrect.
Recently, a very good friend was helping out a cousin who had become disabled (medically, if not by SSA's definition). He obtained all the necessary documentation (POA, HCPOA, etc) and filed the claim. During the porocess, he also made at least one trip to the Columbus (OH) SSA office to drop off even more paperwork and answer even more questions. Eventually, his cousin's claim was approved.
But that's just the beginning.
On September 22nd (less than a month ago), he received the approval letter from Social Security. It informed him that his cousin "became disabled under our rules on August 4, 2008" (he had filed the claim with a 2007 date of disability, this was pushed forward by the folks at Social Security). It also informed him that:
"(Y)ou have to be disabled for 5 full calendar months in a row before you can be entitled to benefits ... your first month of entitlement to benefits is February 2009"
That means that, instead of a check representing a year of benefits (August of 2008 through August of this year), she would receive a check for only 7 months (February through August). In her case, this is almost $8,000 that won't be paid out.
And the hits keep coming:
"You will receive $[redacted] around September 18, 2009" (remember, the letter is dated September 22nd). He received similar letter on the 30th, promising his cousin's check a week later.
Then on October 7th, he was told that "the check is in the mail," but that seems to be inoperative, as well.
There are a number of important lessons here:
First, contrary to popular belief, the "lump sum payment" is not based on the date of disability, but rather 5 months later, amounting to a 5 month "waiting period" (similar to personal disability policies). One could easily lose the house and everything else waiting for that.
Second, it shows how vitally important it is for folks to own their own disability policies (or at least take advantage of group plans at one's workplace). If you're counting on Social Security disability, it could be even longer than you believed to actually receive a check.
Saturday, October 10, 2009
Deficit Neutral? Not So Much...
So that CBO report that ostensibly showed the minimal impact that the Senate ObamaCare bill would have on the deficit? You know, the one that purported to show that spending an additional $829 Billion would actually decrease that deficit? Well, it turns out that there was a little Iron Chef magic going on:
"Their subpar accounting includes revenue from tax increases and cuts to Medicare and Medicare Advantage starting in 2010. However, the bulk of expenditures begin in 2013."
Let me get this straight: we'll base our numbers on 10 years of cuts, but only seven of actual, you know, spending? Talk about odoriferous. Wouldn't it be nice if we could run our family budgets that way: "Hey honey, I didn't get that raise, but we'll just pretend not to spend more for the next few years."
Yeah, that'd work.
"Their subpar accounting includes revenue from tax increases and cuts to Medicare and Medicare Advantage starting in 2010. However, the bulk of expenditures begin in 2013."
Let me get this straight: we'll base our numbers on 10 years of cuts, but only seven of actual, you know, spending? Talk about odoriferous. Wouldn't it be nice if we could run our family budgets that way: "Hey honey, I didn't get that raise, but we'll just pretend not to spend more for the next few years."
Yeah, that'd work.
Friday, October 09, 2009
Priorities
This is what the Obamistration appears to believe is the most critical health issue facing us today:
Good to know they have their priorities straight.
[Hat Tip: David Harlow]
Good to know they have their priorities straight.
[Hat Tip: David Harlow]
It's the Context, Stupid (Nataline's Story, Updated)
In a tragic, though probably unavoidable, turn of events, a young lady died. She was a daughter, a friend, a student. And that's overwhelmingly sad.
Now, lawyers and activists are looking to turn this tragedy to their own ends, motivated by greed and power. And that, too, is overwhelmingly sad:
I received an email yesterday from a group called "Americans United for Change," who claim that "(t)hrough aggressive earned and paid media outreach, grassroots and online organizing ... has challenged the far right conservative voices and ideas that for too long have been mistaken for mainstream American values."
Ahem.
So personal responsibility, the desire to keep more of one's own hard-earned money, and freedom of choice are simply talking points for the right-wing, and not true American values? Okay.
In the event, the email breathlessly quotes an L A Times piece that avers "Cigna employees, looking down into the atrium lobby from a balcony above, began heckling her, she said, with one of them giving her 'the finger.'" What a reprehensible, inexcusable thing to do. Regular readers know from our on-going series on Stupid Carrier Tricks that we hold no truck for shenanigans by any insurer, and this would be at the top of that list.
But:
Something about the wording rang false, and having seen how the press mismanaged the original story, I decided to re-connect with the Cigna folks to see if there wasn't a bit of, well, context missing. And indeed there was.
The first thing to understand is that, if anyone "killed" Nataline, it was her doctors and the hospital that refused to treat her without being paid. Where was their compassion? Surely a few dollars should have been no impediment to saving a young girl's life. Perhaps it was because this was, by their own admission, experimental surgery - one wonders if their malpractice carrier put the kibosh on it. After all, experimental procedures are generally and routinely denied in all health care financing scenarios (including the MVNHS©).
The other problem with that scenario is that, in this case, Cigna had an ASO (Administrative Services Only) contract with Nataline's father's employer. That is, they were contractually bound by the employer to pay for only those items which the employer had agreed (in advance) would be covered. Again, experimental surgeries would have been near the top of the "no" list.
So we can see that Cigna did not, in fact, "kill" Nataline. But did they, or one or more of their employees, "flip the bird" at her grieving mother?
Yes, one employee did.
From the story currently making the rounds, one is left with the impression that this was an unprovoked, heartless and insensitive reaction aimed directly at a mother who'd recently lost her daughter. Perhaps, though, there was a bit more to this story than what we read in the paper?
I spoke this morning with a gentleman at Cigna who was actually in the lobby that morning, and who actually met with the group of people who had come to protest. What the L A Times story conveniently omits is that Mrs Sarkisyan was accompanied by a group of some 35 or so nurses with placards and loud voices, who descended on Cigna's headquarters. Of course, people are entitled to protest what they see as wrong, but this was a place of business, not a public forum, and so security was called in to control the crowd. Curious Cigna employees looked down from the atrium to see what was going on, and were met with shouts taunting "what's it like to work for a company that kills children?"
Apparently, a few minutes of this was more than enough for one employee, who (unprofessionally but understandably) invoked the obscene gesture. Did Mrs Sarkisyan see it? Probably. Was it directed at her"? Who knows, but she was not, in fact, an innocent bystander. So why is she suing Cigna for this singular event, and why, one year later, is it suddenly "news?"
Because her original case was tossed out, and the only bone which the judge could throw her was this claim of emotional distress. It's a win-win for the lawyers and activists: regardless of whether she prevails, this has rekindled the controversy and gotten Mr Geragos and the "Americans for Change" folks free publicity. Lost in the hubbub is the fact that Cigna had no financial stake in the original claim denial, and the providers who skimped on Nataline's care are held unaccountable.
Truly a sad coda to a tragic story.
[Thanks to Cigna's Chris Curran for his time and cooperation]
Now, lawyers and activists are looking to turn this tragedy to their own ends, motivated by greed and power. And that, too, is overwhelmingly sad:
I received an email yesterday from a group called "Americans United for Change," who claim that "(t)hrough aggressive earned and paid media outreach, grassroots and online organizing ... has challenged the far right conservative voices and ideas that for too long have been mistaken for mainstream American values."
Ahem.
So personal responsibility, the desire to keep more of one's own hard-earned money, and freedom of choice are simply talking points for the right-wing, and not true American values? Okay.
In the event, the email breathlessly quotes an L A Times piece that avers "Cigna employees, looking down into the atrium lobby from a balcony above, began heckling her, she said, with one of them giving her 'the finger.'" What a reprehensible, inexcusable thing to do. Regular readers know from our on-going series on Stupid Carrier Tricks that we hold no truck for shenanigans by any insurer, and this would be at the top of that list.
But:
Something about the wording rang false, and having seen how the press mismanaged the original story, I decided to re-connect with the Cigna folks to see if there wasn't a bit of, well, context missing. And indeed there was.
The first thing to understand is that, if anyone "killed" Nataline, it was her doctors and the hospital that refused to treat her without being paid. Where was their compassion? Surely a few dollars should have been no impediment to saving a young girl's life. Perhaps it was because this was, by their own admission, experimental surgery - one wonders if their malpractice carrier put the kibosh on it. After all, experimental procedures are generally and routinely denied in all health care financing scenarios (including the MVNHS©).
The other problem with that scenario is that, in this case, Cigna had an ASO (Administrative Services Only) contract with Nataline's father's employer. That is, they were contractually bound by the employer to pay for only those items which the employer had agreed (in advance) would be covered. Again, experimental surgeries would have been near the top of the "no" list.
So we can see that Cigna did not, in fact, "kill" Nataline. But did they, or one or more of their employees, "flip the bird" at her grieving mother?
Yes, one employee did.
From the story currently making the rounds, one is left with the impression that this was an unprovoked, heartless and insensitive reaction aimed directly at a mother who'd recently lost her daughter. Perhaps, though, there was a bit more to this story than what we read in the paper?
I spoke this morning with a gentleman at Cigna who was actually in the lobby that morning, and who actually met with the group of people who had come to protest. What the L A Times story conveniently omits is that Mrs Sarkisyan was accompanied by a group of some 35 or so nurses with placards and loud voices, who descended on Cigna's headquarters. Of course, people are entitled to protest what they see as wrong, but this was a place of business, not a public forum, and so security was called in to control the crowd. Curious Cigna employees looked down from the atrium to see what was going on, and were met with shouts taunting "what's it like to work for a company that kills children?"
Apparently, a few minutes of this was more than enough for one employee, who (unprofessionally but understandably) invoked the obscene gesture. Did Mrs Sarkisyan see it? Probably. Was it directed at her"? Who knows, but she was not, in fact, an innocent bystander. So why is she suing Cigna for this singular event, and why, one year later, is it suddenly "news?"
Because her original case was tossed out, and the only bone which the judge could throw her was this claim of emotional distress. It's a win-win for the lawyers and activists: regardless of whether she prevails, this has rekindled the controversy and gotten Mr Geragos and the "Americans for Change" folks free publicity. Lost in the hubbub is the fact that Cigna had no financial stake in the original claim denial, and the providers who skimped on Nataline's care are held unaccountable.
Truly a sad coda to a tragic story.
[Thanks to Cigna's Chris Curran for his time and cooperation]
Thursday, October 08, 2009
Democrats Channeling Bob...
Over the past few years, Bob has written extensively on the miserable failure that is MassHealth. As he's documented time and again, mandating both coverage and community rating lead directly to outrageous premium levels.
But of course, Bob has an axe to grind, so his message must be meaningless, right?
Turns out, not so much:
"I paid attention to the health care debate as a speechwriter who prepared speeches, talking points, op-eds, and debate prep material on the topic at different times for John Edwards, Barack Obama, Hillary Clinton and others. Now, I'm paying attention because I'm a citizen up the creek without a paddle."
Wendy Button is a Democrat activist who has, it seems, "seen the light." She echoes the clarion call for reform, but with a decidedly different twist:
"If Congress and the president want to fix health care, then it is time to start over. They need to look at what's worked and what has failed in Massachusetts. They are going to have to actually take former Gov. Sarah Palin's advice and "look north to the future."
"Start over." Not a bad idea - in fact, that's one with which we'd agree - but hardly what one would expect from someone so close to the campaigns of Obama and Edwards (not to mention the authoress of HillaryCare).
She continues:
"A rushed bill will have consequences. Reforms will not be cheap and some people may be priced out."
A point we've been making here for a number of years. Now, just because something "doesn't come cheap" doesn't automatically mean that it's not worth doing. But in the calculus of that undertaking, one would be wise to draw, and learn, from others' similar experiences and efforts. We've maintained all along that experimenting at the state level was a viable and desirable strategy: learning what works - and what doesn't - in 50 smaller labs is preferable to the potentially disastrous consequences that could come from one encompassing the entire nation.
But Ms Button isn't through:
"How could all of these weeks and months go by and no one is examining and talking about what has worked and what hasn't worked in Massachusetts?"
Well, as we've noted, some of us have been jumping up and down, pointing at MassHealth as the failed experiment that it is. Sadly, Ms Button doesn't appear to be an IB reader.
Or is she, perhaps, a closet one?
"I'm a critic because what Washington is talking about doing has made health insurance unaffordable in Massachusetts."
Amen, sister, amen.
[Hat Tip: Hugh Hewitt]
But of course, Bob has an axe to grind, so his message must be meaningless, right?
Turns out, not so much:
"I paid attention to the health care debate as a speechwriter who prepared speeches, talking points, op-eds, and debate prep material on the topic at different times for John Edwards, Barack Obama, Hillary Clinton and others. Now, I'm paying attention because I'm a citizen up the creek without a paddle."
Wendy Button is a Democrat activist who has, it seems, "seen the light." She echoes the clarion call for reform, but with a decidedly different twist:
"If Congress and the president want to fix health care, then it is time to start over. They need to look at what's worked and what has failed in Massachusetts. They are going to have to actually take former Gov. Sarah Palin's advice and "look north to the future."
"Start over." Not a bad idea - in fact, that's one with which we'd agree - but hardly what one would expect from someone so close to the campaigns of Obama and Edwards (not to mention the authoress of HillaryCare).
She continues:
"A rushed bill will have consequences. Reforms will not be cheap and some people may be priced out."
A point we've been making here for a number of years. Now, just because something "doesn't come cheap" doesn't automatically mean that it's not worth doing. But in the calculus of that undertaking, one would be wise to draw, and learn, from others' similar experiences and efforts. We've maintained all along that experimenting at the state level was a viable and desirable strategy: learning what works - and what doesn't - in 50 smaller labs is preferable to the potentially disastrous consequences that could come from one encompassing the entire nation.
But Ms Button isn't through:
"How could all of these weeks and months go by and no one is examining and talking about what has worked and what hasn't worked in Massachusetts?"
Well, as we've noted, some of us have been jumping up and down, pointing at MassHealth as the failed experiment that it is. Sadly, Ms Button doesn't appear to be an IB reader.
Or is she, perhaps, a closet one?
"I'm a critic because what Washington is talking about doing has made health insurance unaffordable in Massachusetts."
Amen, sister, amen.
[Hat Tip: Hugh Hewitt]
Now You See It...OOOPS! No, You Don't.
Let's start with some simple questions about ObamaCare:
■ Will I be able to keep the coverage I now have?
■ Will my taxes go up?
■ Will my Medicare plan change?
■ Will the bill cover abortions?
■ How about folks here illegally?
■ Will I be required to buy (and help pay for) health insurance?
Great questions!
And we have the definitive answer to every single one:
None of your business.
"Not only is the actual language of what is likely to become the main legislative vehicle for Obama’s signature health care reform not available on the Internet, it hasn’t been given to members of the key Senate committees or the Congressional Budget Office."
This despite then-candidate Obama's promise that he would require such bills to be posted on the internet at least five days prior to any vote, let alone to those responsible for actually, you know, voting on it. And the Party in Power© is thumbing its nose at the very concept of transparency:
"Sen. Jim Bunning, R-Ky., offered an amendment requiring the actual legislative language be posted on the Internet for 72 hours prior to final passage. Bunning’s amendment was soundly defeated."
It's worth noting, although not surprising, that this was an almost straight party-line vote; only one Democrat, Arkansas' Blanche Lincoln, voted in favor of transparency in government. Which begs one last question:
So what are they hiding?
■ Will I be able to keep the coverage I now have?
■ Will my taxes go up?
■ Will my Medicare plan change?
■ Will the bill cover abortions?
■ How about folks here illegally?
■ Will I be required to buy (and help pay for) health insurance?
Great questions!
And we have the definitive answer to every single one:
None of your business.
"Not only is the actual language of what is likely to become the main legislative vehicle for Obama’s signature health care reform not available on the Internet, it hasn’t been given to members of the key Senate committees or the Congressional Budget Office."
This despite then-candidate Obama's promise that he would require such bills to be posted on the internet at least five days prior to any vote, let alone to those responsible for actually, you know, voting on it. And the Party in Power© is thumbing its nose at the very concept of transparency:
"Sen. Jim Bunning, R-Ky., offered an amendment requiring the actual legislative language be posted on the Internet for 72 hours prior to final passage. Bunning’s amendment was soundly defeated."
It's worth noting, although not surprising, that this was an almost straight party-line vote; only one Democrat, Arkansas' Blanche Lincoln, voted in favor of transparency in government. Which begs one last question:
So what are they hiding?
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