Turnabout as Fair Play: Guest Blogging Elsewhere [UPDATED]

Over the years, we've had the privilege of some really terrific guest bloggers. Recently, I was asked by John Power, of the Insurance And Annuities blog, to pen an essay on the recent collapse of Penn-Treaty, and how it affects my fellow Buckeyes.

PT wasn't exactly a major player in the Ohio Long Term Care insurance market, but this case illustrates the value of state guaranty funds. If you're interested, click here to see the post.

UPDATE: Got this in email from the LifeHappens folks:

"Even as the average annual cost of a home health aide now tops more than $40,000 and private nursing home care is approaching an average cost of $75,000 a year, a new survey by the nonprofit LIFE Foundation finds nine out of 10 Americans do not have a realistic plan to pay for these expenses."

Those are some pretty hefty numbers; if you're curious about how much LTC runs in your neck of the woods, you can click here for their cost estimator tool.

Medical Tourism Update: Hold the Plane!

Despite the efforts of some carriers to promote so-called "medical tourism," the floundering economy is taking its toll on the nascent industry. Today's McPaper reports on a study "by the Deloitte Center for Health Solutions, a research center focused on trends in the health care system":

"From 2007 to 2009, the number of Americans traveling abroad for elective medical procedures is expected to have fallen as much as 13.6%"

That's quite a drop in such a short period. Of course, it's kind of a double-bind: folks look to overseas providers in order to save money on health care costs, but find that any savings is offset by incrweased travel costs and decreased assets.

Of course, this may be just a short-term hit; if and/or when the economy rebounds, one would expect that these folks will once again find that traveling abroad for certain procedures is a net savings. Indeed, the Center expects that "the number of American medical tourists will rise by 35% each year through 2012," due to "[p]ent-up demand and improvements in international medical care."

My Magic 8-Ball (on loan from Bob), though, says "Maybe."

AIDS/HIV Patients Denied Access to Health Care

AIDS/HIV patients are being denied access to health care under a government run public health plan.

Government regulations prohibit treatment for AIDS and HIV.

This is happening in Jarkarta, but who say's it won't happen here?

Putra, not his real name, said that if a person admitted he had HIV/AIDS, no insurance company, especially government-insurance schemes including Askes and Jamkesnas, would cover their health care costs.

"What should I say to get my health care covered by insurance? Putra asked.

Ida Ayu Miswahirati, head of the hospital's health care section, admitted that the majority of insurance companies did not cover health costs for people living with HIV/AIDS. She advised patients to mention health complications caused by HIV/AIDS such as Tuberculosis and other infections.

"This is one of the challenging problems in the Indonesian health care system, which does not include health schemes for people with HIV/AIDS," she explained.

Rationed health care under a government run plan. Who would have imagined?

Carnival of Personal Finance now online

This week's Carnival of Personal Finance is hosted by Revanche at the Gai Shan Life blog. This edition is chock full of amusing (and on-target) finance-related webcomics.

This Sceptered Isle, Part LXVI

There's been another distressing report from the Telegraph of London regarding hospital trust mismanagement within UK’s National Health System.

As if the news is not bad enough on its face, scroll down to the 13th paragraph to read this:

“Ratings given to hospitals rely on their own assessment of their performance.”

What could POSSIBLY go wrong?

Well, management malfeasance, for one: “At Basildon Hospital, managers gave themselves 13 out of a 14 possible marks for safety and cleanliness. The ratings were published just weeks before the damning inspection report was drawn up.”

Previous reports of problems at Basildon are linked here and here.

However, it is clear that Basildon is not some isolated, one-off failure in a sound system.

The linked articles also report that disclosures such as these are harming the public trust in NHS. Gee, ya think?

These are not simply management failures, but are governance failures within the NHS model. They show NHS is seriously at risk to incompetence, indifference, and lack of public accountability that are so prevalent in government bureaucracies.

Health Insurance: Moral Imperative or Risk Management?

Power Line's Paul Mirengoff takes conservative pundit Charles Krauthammer to school regarding the latter's assertion that "[i]nsuring the uninsured is a moral imperative." Paul's thesis is that, while this is a lofty goal, it doesn't rise to quite that level. I would suggest that the serious student of this debate read Paul's post in its entirety; I have a sympathetic, but slightly different, take.

There is, surprisingly, little to be found on the web viz: defining a "moral imperative." Wikipedia identifies it with the work of Immanual Kant, defining it as "a principle originating inside a person's mind that compels that person to act." I find this to be wholly unsatisfying: what differentiates this from any other urge? What, in fact, is the moral dimension to this definition?

I would argue that morality has no place in the lexicon of "insurance." Over time, we've re-defined the nature and purpose of insurance away from its primary use as a tool to help us manage, and perhaps mitigate, risks, and toward the funding of routine items. Take, for example, one of Bob's favorite aphorisms: how much would auto insurance cost if it covered wiper blades and oil changes? Of course these are properly identified as ordinary and expected "wear and tear;" the true purpose should be to protect us from losing our assets if, for example, we're responsible for a major accident with serious injuries or even loss of life.

Health insurance is similar to auto insurance only in that it is rooted in the same underlying principle: indemnity. In this case, "indemnity" means "to make whole." That is, to put us back, financially, as closely as possible to our condition pre-accident. In the case of health insurance, it means to protect our assets if we face an expensive course of treatment (for example). No one confuses auto insurance with the actual vehicle. Unfortunately, it's become fashionable to conflate health insurance with the actual care received.

And thus, the idea that providing everyone with health insurance is somehow a moral imperative: some folks believe that our ethics require that we provide everyone with insurance because then everyone has access to health care.

But this is a false conclusion, based on a faulty premise: no one in this country is denied health care based on economics (and when they are denied care, it's a big deal). It's true that some folks have access to (arguably) better health care, but that's not the same thing. We take it as a given that we should all have access to food and shelter, as well; some folks live in mansions, and others in homeless shelters. Do we have a moral obligation (imperative) to give everyone in a shelter a new home? Likewise, some folks eat at fancy restaurants, while others shop at Aldi's. Are we obligated to provide the latter with steak every evening?

Some time ago, our own Mike Feehan (commenting under a pseudonym) proposed a "national, single-grocer plan." It's well worth re-reading that gem, because it offers an excellent insight into why health insurance is no more "morally imperative" than groceries.

There may well be solid economic arguments supporting the principle of "universal coverage" (although I have yet to see a convincing one), but there is no "moral" argument to be made.

This Sceptered Isle - Part LXV

An interesting suggestion floated yesterday in U.K: when a hospital fails this badly the staff should no longer work for NHS, but instead be transferred to a private contractor employed by NHS.

That's change I could believe in.

Incidents like this seem to have more people over there wondering if NHS is broken.

I don't think it's "broken" so much as the model itself is so deeply flawed it cannot be sustained. IMO, a health care system like NHS is no bargain at any price.

The Public Be Damned - or, Not

Ideas such as this are understandably seductive:

The government will enact reforms that offer everybody unimpeded access to health care at affordable personal cost, will not increase public debt, and will not result in higher taxes.

This statement leaves out some vital information that most people know – but prefer to ignore. Let’s include that information:

Our government, led by corrupt or greedy politicians who accept campaign contributions from corrupt or greedy health care organizations (i.e., pharmaceutical companies, insurance companies, legal and medical lobbyists, etc) will actually force these very organizations to reform their businesses in ways they refuse to do on their own. These reforms will work to the public's advantage rather than to the advantage of the corrupt or greedy politicians or to the advantage of the corrupt or greedy organizations who contributed all that campaign money to the politicians. After the reforms are in place, their financing will - astonishingly - be found inadequate, despite all the “savings” that were invented to limit taxes to pay for the reforms. Too late now to do anything about it but borrow huge sums, increase the public debt, and impose more taxes. Another government boondoggle is born.

If you have marveled at how brazenly Congress ignores the peoples’ voice in the evolving “debate” over health care – beginning with the arrogant, closed-mindedness that became clear during the “town hall” meetings in August – think about the preceding paragraph.

What Congress is doing is just not all that marvelous. It’s only politics as usual.
And, as usual, the public be damned . . . unless . . . unless we make a LOT of noise.

If what Congress is doing worries you, then you are already in the majority of Americans. Think seriously about doing more to tell your Senators what YOU think. If there is enough noise outside their windows they may look to see what the public really thinks before voting on the Senate Bill.

Cavalcade of Risk #93: Call for Submissions

Nancy at Insurance Copywriter hosts next week's Cavalcade of Risk. Submissions are due this Monday (November 30th); please 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.

Something Freezes Over: ObamaCare, Children Hardest Hit

There's little I can add to this insightful commentary by erstwhile Presidential candidate and spokesdoctor for the DNC:



While I obviously disagree with his prescription, we're in total agreement that ObamaCare is deeply flawed.

[Hat Tip: Say Anything blog]

This Sceptered Isle Part LXIV

Hundreds of patients may have died needlessly at an NHS hospital due to appalling standards of care, a damning report has found.

Well, OK, we’ve seen this kind of NHS report before. They are not less dismaying because they are frequent.

But this article notes additional outrages that are less often articulated, yet are so worth facing: the indifference to urgent problems and the lack of accountability, that are displayed by the NHS bureaucracy.

You’ll need to scroll well down into the article to find these paragraphs:

“Concerns about standards at Basildon were raised as long ago as 2001, when the Royal College of Nursing described conditions there as "third world" . . .

“Katherine Murphy, director of the Patients Association said . . . "We’re sick and tired of NHS managers and senior staff walking away unscathed when families are left with a life sentence of grief.”

These problems were identified 9 YEARS AGO? The NHS bureaucrats who let them persist might walk away "unscathed"? This is no utopian dream, it is a hellish nightmare. Yes, the UK Hell is an inexpensive Hell - if government Hell on the cheap turns you on.

I have seen no evidence or reason to believe that Americans won’t also experience the same kind of bureaucratic indifference to urgent problems and lack of accountability, after our government takes over the American health care system. I fear for my children and for my grandchildren.

As Zed remarked to J, "Sucks, don't it?"

A Special Thanksgiving Post

This year, we're participating in the 2nd Annual Thanksgiving Blog Rally for the Engage With Grace One Slide Project. The project's goal is to "find a simple way to encourage families to talk about their wishes for care in an advanced illness."

We'd like to encourage our readers to take a moment between second helpings, and second quarters, to give some thought to this important (and often neglected) issue.

And for a lighter look at Thanksgiving, this classic:

May your Thanksgiving be filled with joy, family and love.

Joe W was Right!

When Rep Joe Wilson (R-SC) called out PresBo regarding coverage for illegal aliens, he was castigated for his breach of etiquette. While that may or may not have been correct, the substance of his brief critique was apparently spot on:

"H.R. 3962 would deliberately permit illegal aliens to participate in the government health insurance exchange and in the public option insurance program."

In the current parlance, those pushing to "reform" our system consider this a feature, not a bug. The bill actually goes further than just rewarding folks who illegally enter our country, it encourages them to do so:

"All illegal immigrant women who do not have private health insurance and who give birth inside the United States will have the full cost of childbirth paid by the U.S. taxpayers."

And they'll not be required to repay thee and me, ever. Contrast this to how we "reward" seniors who need long term care: first, they must "spend down" their life's savings in order to become eligible for Medicaid. After they pass away, the state then takes their remaining assets in order to repay itself (or, rather, the taxpayer) for having done so.

In short, ObamaCare would treat those who are here illegally far better than our legal seniors. What's wrong with this picture?

Health Care Reform: Doctors Notes

Dr. Kleaveland offers his views on health care reform. It is not a pretty sight, but we face off in a battle of dueling public letters.

You can read his complete dissertation by using the link, but here are some lowlights.

Consumer protection in the health industry is addressed as follows:

No denial for pre-existing conditions or gender.

Guaranteed coverage to all individuals and employers and automatic renewal of coverage.

Prohibits premium variance except for reasons of area or family enrollment and sets limits on higher premiums based on age.

Prohibits cancelling of health insurance coverage except for convincing evidence of fraud.

Pious platitudes but this demonstrates how little the good doctor actually knows about the current system. Every state has provisions that allow access to health insurance on a guaranteed issue basis. Every one. Yet this fact is ignored over and over.

Setting premium limits sounds great but as has been demonstrated over and over in states that have attempted to over-regulate health insurance, the result is less competition and significantly higher premiums for almost everyone.

All states have laws that prohibit the cancellation of health insurance except for reason of fraud or non-payment of premium.

Skipping around a bit, we find the following.

Lists required covered services, including hospitalization, prescription drugs, mental health services, preventive services, maternity care, and children’s dental, vision and hearing services.

Payments for primary care services would be increased

These are admirable, but costly. But let's look at the doctors arguments as to why "health care reform" is needed.

Medical insurance premiums have more than doubled in the past 10 years.

OK, and why is that?

Health insurance premiums are driven by the underlying cost of medical care and the benefits they are required to cover. Most of the things Dr. Kleaveland proposes are built in to the House and Senate proposals. None of the provisions will serve to lower health insurance premiums, so what is really accomplished?

Requiring health insurance companies to take on more risk (banning medical underwriting), covering more items (dental, vision, mental health parity) and compressing the premium spread will result in massive premium increases if this form of health "care" reform passes.

Look at it this way. If Washington required auto insurance carriers to cover tires, brakes and oil changes as well as all routine maintenance and repairs, would auto insurance rates come down under this kind of reform? If you paid little or nothing for maintenance and repairs, but rather used your auto insurance plan to cover these costs, do you think the underlying cost of auto repair would decrease?

If you answered "yes" you are clearly out of touch with reality.

If you answered "no" then you are beginning to understand why health care reform will do nothing to lower health insurance premiums and make coverage more affordable.

Cost of health care have risen to 16 percent of the Gross Domestic Product (GDP) and is predicted to rise to 20 percent of GDP by 2018. No country can survive or compete in the global market if they spend 20 percent of their GDP on health care.

Unless and until the cost of health care is addressed, health care reform will not do a thing to stop this type of inflationary pressure. None of the proposals in Congress, and none of the items in Dr. Kleaveland's letter will slow down or control the cost of health care.

The Public Be Damned

Here’s an excerpt from a recent poll conducted by the Robert Wood Johnson Foundation:

"Asked how the health care overhaul would affect their own access to medical care, 57 percent said it would stay the same. Similarly, 61 percent said their personal financial situation would stay about the same."

"Among those who do expect a change, 28 percent said they thought their access to care would get worse, while 15 percent said they thought it would improve. On finances, 27 percent said they thought the health care bill would make them worse off financially, while 12 percent expected an improvement."

Somebody check my arithmetic - I think this says that 68% expect no effect or a negative effect on their own access to care and 72% expect no effect or a negative effect on their personal finances. What kind of “overhaul” is that?

I think these results suggest it’s unlikely that there is in fact some widespread groundswell of public support for the House or Senate health care bills. People just don’t get enthusiastic over nothing or less than nothing. Yet the President, Nancy Pelosi, Harry Reid, and their minions all claim they have overwhelming public support. What voices are they listening to?

I think it’s clear they are NOT listening to the public's voice.

They got an earful during the August recess - and ignored it.

And since August, polls show public support for the proposed health care overhaul has eroded, week by week. A few days ago, Rasmussen found that 56% of the public now opposes the plans in the House and Senate, and only 38% approve.

Americans still support reform of the health care system, but we aren’t buying the present House and Senate overhaul proposals. I think that’s because the true cost of the plans can’t be papered over any more. As the truth emerges about the staggering cost, more and more people realize that these proposals will significantly expand government spending, grow the deficit, and become a tax burden for us and our children and our children’s children. So the longer this “debate” goes on, the less public support there is for the overhaul proposals in the House and Senate. Rasmussen says

"63% of voters agreed with the president earlier this year when he said, “We must make it a priority to give every single American quality affordable health care.” Yet while they agree in theory, only 28% are currently willing to pay higher taxes to achieve that goal."

And are the House and Senate listening? No. Their leadership remains stubbornly intent on ramming a final bill through Congress despite the rapidly eroding public support. And, despite the very serious flaws in the current House and Senate Bills, despite the flaky and frankly bogus financial promises that these bills will not increase the deficit or taxes, and despite the serious economic troubles the nation faces.

So here’s how I see it: we have a runaway Congress. The House and Senate leadership long ago decided what it intends to do, and is now doing it. The public be damned.

Suicide Insurance? Setting the Record Straight [Updated & Bumped]

PoliBlogger Michelle Malkin has an update on a tragic story from September; news junkies may recall that a census worker was found dead, apparently hung. On his stomach was scrawled the word "Fed," leading many to believe that this was a cold-blooded murder. Suspicion fell on moonshiners and "rednecks," but there was scant evidence to support either of these theories (among others).

According to new information released by the authorities, it appears that this may well have been an elaborately staged suicide, the point of which was to leave the proceeds of a life insurance policy to the victim's son. Unfortunately, the news reports cited by Ms Malkin leave much to be desired vis: suicide and life insurance.

For example:

"Life insurance policies typically do not cover suicides within a certain time period after the policy begins."

Correct, to a point.

And:

"“If it’s deemed suicide, there’s no point in even looking at insurance,” the son said. “There’s no such thing as suicide insurance."

Again, correct - to a point.

Until just after the Great Depression [ed: what was so "great" about it?], suicide was excluded by life insurance policies. There was, it was thought, a very good reason for this: it would be against the public interest to encourage folks to kill themselves to enrich those left behind. And there's some validity to this: we don't want to make such an outcome attractive to people to leave an inheritance at the cost of one's own life.

But a lot of people who lost everything in the Depression killed themselves anyway; not for the insurance (there wouldn't be any) but out of desperation and despondence. And this left behind a lot of widows and children who lost a parent and a spouse along with their life's savings. This was also against the public interest.

So, how to reconcile these two seemingly irreconcilable principles?

New laws were enacted that required life insurance policies to cover suicide after a "reasonable" period ("reasonable" in this case meaning no more than two years). The premise is that no sane person is going to buy a policy with the intent of waiting two years to jump out a window; that a person would do this was ample demonstration of mental illness, and that would be a covered exposure. This protects the interests of innocent family members, while still discouraging a casual view of suicide.

So no, there is no "suicide insurance;" but that was never really the point in the first place.

UPDATE: It's now official:

"A Kentucky census worker found hanging from a tree with the word "fed" written on his chest killed himself and staged his death to look like a murder, authorities said Tuesday."

Turns out, he had recently purchased not one, but two new life insurance policies on himself; the amount at risk has not been disclosed.

This is truly a tragedy: any time someone takes his (or her) own life it leaves behind unanswered questions and leaves grieving families without closure. It's just a shame that some chose to exploit this particular situation for their own political ends.

Counter-Intuitive: RWJF and IB Agree

With unemployment currently north of 10% (some would say significantly so), it seems odd that the left-leaning Robert Wood Johnson Foundation would find that "Americans’ confidence in their health insurance coverage and ability to access health care increased sharply in October ... The survey also found that fewer people are concerned about losing their coverage."

On the one hand, this is good (if not exactly surprising) news; as we've maintained all along, most folks are insured, and few actually lose their insurance. Many of those who do are eligible for various government-sponsored programs. Regardless, the RWJF reports that this recent spike "is the largest increase in the Future Health Cost Concerns Index since the survey began."

On the other hand, what to make of this assertion, coming on the heals of an acknowledgement that the current system, while imperfect, is doing fine: "Americans of every ideology know that our health care system needs to be fixed and want some type of reform." If the percentage of folks who are satisfied with the status quo is so great, then on what basis can this statement be supported?

Obviously, it can't.

Note: For more on this study, see Mike's post.

Grand Rounds: A Feast for the Mind...

Coping with Pain presents a pain-free (but quite filling) Thanksgiving week edition of Grand Rounds.

Helpful Carrier Trick: Aetna Edition

Starting next year, Aetna insureds will have access to a new, and potentially very useful, online tool. SmartSource connects an insured's "profile" (sex, age, any medical issues, etc) with a search engine that will kick out:

■ Local doctors and specialists who participate in the user’s Aetna health plan
■ Medications and treatment options
■ Estimated health care costs
■ Aetna programs and discounts associated with the health topic
■ Easy-to-understand health information and articles

And if that's not cool enough, how about their new HealthMap feature, a "visual guide to the member's search topics helps them see the full spectrum of their health topic (i.e. symptoms, tests, treatments, costs, prevention steps) in an easy-to-grasp graphic format."

Now, how soon until they connect the iTriage app to this?

The Individual Mandate is Evil [UPDATED]

The other day, I had breakfast with an old friend and mentor. In the course of discussing ObamaCare, he asked me which part I considered the most egregious. I think I surprised him when I said it wasn't coverage for abortions or illegal aliens, or even the so-called "Public Option" which most offended me.

It's the individual mandate.

Now, one might think that, because I sell insurance for a living, I'd be all for a law that required folks to buy what I sell. But I'm an American first, and I find this particular idea repugnant and, frankly, unAmerican. Here's why:

There is no precedent for requiring us to buy a product or service simply for living. There are those who argue, incorrectly, that we're required to buy automobile insurance. But they neglect to finish the sentence: "if one chooses to own and/or operate a car." Many folks go through life relying on public or alternate transportation, never having the need or requirement to buy auto insurance. But there are no choices here: simply being alive would require one to buy insurance.

Second, this is far beyond a slippery slope: if the government can require you to buy something you don't need or want, then it can require you to do anything. There simply is no limit.

Third, a friend of mine recently raised a First Amendment issue: what about those folks who, because of their religion, don't use medical services? Would Scientologists and the Amish (for example) be exempted from this requirement? If not, then they're paying for something that they cannot use due to their faith. This is a gross infringement on their 1st Amendment rights. If they are exempt, then how many folks will join (or claim to join) one of these faiths in order to avoid the mandate, and how would that square with its goals?

There is just no valid case to be made for such a law, and its adoption would be a very, very bad thing.

UPDATE: It appears that the most egregious penalties vis: the Individual Mandate have beentoned down in Dr Harry's version of ObamaCare:

‘‘(C) INDEXING OF AMOUNT.—In the case
5 of any calendar year beginning after 2017, the
6 applicable dollar amount shall be equal to $750,
7 increased by an amount equal to—
8 ‘‘(i) $750, multiplied by
9 ‘‘(ii) the cost-of-living adjustment de
10 termined under section 1(f)(3) for the cal
11 endar year, determined by substituting
12 ‘calendar year 2016’ for ‘calendar year
13 1992’ in subparagraph (B) thereof.
14 If the amount of any increase under clause (i)
15 is not a multiple of $50, such increase shall be
16 rounded to the next lowest multiple of $50."

In other words, a penalty far less than called for by Nurse Nancy's edition.

And it also appears that they've dropped the threat of jail-time:

"WAIVER OF CRIMINAL AND CIVIL PENALTIES AND INTEREST.
—In the case of any failure
12 by a taxpayer to timely pay any tax imposed by this
13 section—
14 ‘‘(A) such taxpayer shall not be subject to
15 any criminal prosecution or penalty with respect
16 to such failure,"

That subsection goes on to say that penalties will be that the gummint gets to keep any tax refunds, that kind of thing.

On the other hand, it will still be illegal to choose to be uninsured. So the principle that one will be required to buy insurance remains unchanged.

And here I thought these guys were pro-choice.

[Update Hat Tip: Ace of Spades]

Just What the Doctor Ordered...

Via RedState:

Indian Insurance

The more time the House and Senate bills spend in the light of day, the more insidious they become. Pages 264 - 265 tell us that Indians whose income is below 300% of the FPL will receive free health care.

My wife has some Cherokee in her ancestry if you go back far enough. Suppose she can qualify?

Page 443 of the bill substitutes "legal residents" with the language "those lawfully residing in the United States."

What is that all about?

Page 369 of the bill protects workers from retribution if they complain that their employer is not providing health insurance benefits.

If you are an Indian does that mean your employer doesn't have to provide coverage?

Isn't this fun?

Paging Dr. Facebook

Nathalie Blanchard is on medical leave after being diagnosed with major depression. She is collecting monthly sick leave benefits from Manulife. This was not a problem until she decided to take a trip and post some pics on Facebook.

When Blanchard called Manulife, the company said that "I'm available to work, because of Facebook," she told CBC News this week.

She said her insurance agent described several pictures Blanchard posted on the popular social networking site, including ones showing her having a good time at a Chippendales bar show, at her birthday party and on a sun holiday — evidence that she is no longer depressed, Manulife said.

When my wife is depressed, a trip to Chippendales always cheers her up. Apparently Manulife views it differently.

Blanchard said that on her doctor's advice, she tried to have fun, including nights out at her local bar with friends and short getaways to sun destinations, as a way to forget her problems.

She also doesn’t understand how Manulife accessed her photos because her Facebook profile is locked and only people she approves can look at what she posts.

Apparently Canadian insurance companies can be as dastardly as U.S. based ones.

Her lawyer Tom Lavin said Manulife's investigation was inappropriate.

"I don't think for judging a mental state that Facebook is a very good tool," he said, adding that he has requested another psychiatric evaluation for Blanchard.

Well of course not.

If Facebook can diagnose psych issues then why do we need real docs? Paging Dr. Facebook . . .

Stupid Government Tricks - Senate Edition

The folks at The Heritage Foundation have nailed it in today's Morning Bell. This should be required reading of anyone, ESPECIALLY those who will be called to vote on the legislation.

Excerpt . . .

Last Saturday night Speaker Nancy Pelosi (D-CA) forced through a vote on her 2,032 page health care bill only a few days after releasing it to the public. Now Senate Majority Leader Harry Reid (D-NV) is poised for another Saturday night cram down, forcing a Senate cloture vote mere days before his 2,074 page bill was given to Senators. Yet again, Congress will be forced to vote on a bill that none of them have actually read. More importantly, as we pour through the details, it becomes obvious that none of them even believe the plan will do what the bill says.

Kills Jobs: All told, the Reid Bill raises taxes by $370.2 billion over the next ten years with many of those taxes starting to be collected this year while unemployment is at 10.2% and rising. Worse, the bill includes a job killing employer mandate which taxes companies for hiring people. Specifically, companies with more than 50 employees that do not offer a health plan approved by federal bureaucrats will be forced to pay a $750 per employee job tax.

Hurts Small Businesses: The Reid Bill acknowledges it is terrible public policy for small businesses and tries to address this problem by including a “small business tax credit” to minimize the impact of the job killing employer mandates and regulation-caused rises in private health insurance premiums. But the tax credit only lasts two years and largely excludes small business owners, small businesses with high-average payrolls, and firms with 25 or more workers. After all exclusions, essentially the only eligible firms are those firms with 10 or fewer workers as well as those with low-income workers—the least likely to offer coverage even with a significant price reduction.

For the rest of the story, click the link above to Heritage.

This is truly another example of a stupid government trick.

Stupid Carrier Tricks: Anthem Renewal Edition

One of my groups recently received their annual Anthem renewal. They've been with that carrier for several years, absorbing a number of rate increases because, based on demographics and health, it still beat the new business offers from the other carriers. This time, though, Anthem threw in a little twist, one which I inadvertently missed for a bit.

Generally, a renewal quote will include a recap of the current plan design and premium, and the new rates for that plan design. This is standard, and well-accepted. Where a particular plan design is no longer offered, the closest "new" design is substituted, and there's a notation to that effect.

Not this time.

The underlying medical plan didn't change (much), but instead of prescription plan "x" they subbed in plan "z," without noting the substitution. The renewal rate, even with the lesser benefit plan, was 29% higher than last year. Definitely time to shop again.

This was both easier and harder than last time 'round: harder because, as we've noted before, we need to submit completed applications to get realistic bids; easier because the demographics and health of the group had changed in a positive way.

After submitting the ubiquitous UHC applications to several carriers, it looked like we were stuck once again: none of the offers were really outstanding; UHC's was close, but added a $100 per person prescription deductible (in addition to the underlying plan's deductible). I really have no problem with that: rx costs comprise a disproportionate share of claims, and encouraging more consumer awareness of these costs is a good thing. Still, why switch carriers for essentially the same plan and rate?

Or so we thought.

In re-reviewing (no, that's not a typo) the renewal, the business owner and I finally noticed that the Anthem prescription benefit had changed, and not for the better. We asked Anthem if we could still get the same rx plan as we'd had and, if so, at what additional cost. Turns out, they would be happy to restore the full benefits, at an additional cost of about 15% of the premium (about $5000 per year). That earned a double-take, but the numbers didn't lie. No wonder they'd snuck in the rx change: if they'd sent the real renewal, it would have been a 35% hit.

Ouch!

Fortunately, I had put the UHC process on hold, but not cancelled it, so we were able to successfully transition there. A happy ending, but: a very bitter taste as a result of the underhanded way that Anthem presented its renewal.

Lesson: review those renewals very carefully, because what you see may not be what you thought you were supposed to get.

Getting to 60

When it is your money Congress is spending, there is no limit. Care to guess how much Sen. Mary Landrieu want's for a yes vote for health insurance reform?

Try $100 million.

On page 432 of the Reid bill, there is a section increasing federal Medicaid subsidies for “certain states recovering from a major disaster.”

The section spends two pages defining which “states” would qualify, saying, among other things, that it would be states that “during the preceding 7 fiscal years” have been declared a “major disaster area.”

I am told the section applies to exactly one state: Louisiana, the home of moderate Democrat Mary Landrieu, who has been playing hard to get on the health care bill.

In other words, the bill spends two pages describing would could be written with a single world: Louisiana. (This may also help explain why the bill is long.)

No kidding.

This falls under the category of saving or creating a health insurance reform bill.

Change you can believe in.

This Just In: "Told Ya So..."

Last evening, in our report on HarryCare (aka HariKariCare), we noted:

"Absent these [Medicare] cuts ... there are no savings, only additional expenditures."

Now comes word from the Congressional Budget Office that:

"CBO estimates that enacting both H.R. 3961 and H.R. 3962 would add $89 billion to budget deficits over the 2010–2019 period."

[ed: 3961 increases reimbursement rates, and 3962 is the so-called "Affordable Health Care for America Act"]

So instead of decreasing the deficit by some $127 billion, it would actually increase it by $89 billion (that's a 216 billion dollar hole Sen Reid just dug).

Doctors Don't Need Health Insurance

Aetna health insurance plans are some of the best available in Georgia, but some of them are lacking in coverage. I tell folks that, when looking at a health insurance policy, look at what it does NOT cover before deciding if it is right for you or not.

"I'm a health care provider and I don't think I will get sick, so I don't need comprehensive health insurance that includes prescription drug coverage."

That was the line used to justify this woman's position during a phone interview.

She called me looking for dental insurance. Something most people don't need.

She has an Aetna PPO Value 10,000 plan. Not a bad plan . . . until you get sick.

Non-preferred brand name drugs are not covered. That includes most cancer drugs.

Preferred brand drugs are covered but only up to $5,000 per year. Someone who is ill can run through that amount in a few months.

The plan also has a $1,000,000 annual limit on all benefits.

But back to the health care provider.

"I can always change my plan if needed because of portability laws."

Really?

Portability only applies to group health insurance plans. She has an individual health insurance plan.

"As long as I don't have a break in coverage they have to cover my pre-existing conditions."

True . . . assuming they will even accept you. Of course if you are really sick, needing a medication that runs $5,000 per month what are your chances of them taking you on as a policyholder?

"I'm not planning on getting sick."

I decided it was time to end this call. Probably should have asked if she worked in Washington. That is the kind of argument I would expect to hear out of those folks.

Meanwhile, Over at the MVNHS©...

Woe to the British citizen who develops liver cancer. That great example of socialized medicine continues to implement its own brand of Death Panel (coming soon to a hospital near you?):

"The health watchdog has blocked a critical liver cancer drug, saying it is too pricey for the state health service ... the drug — Nexavar — is one of the only options left, and it has been shown to prolong life by almost four months on average."

Of course, some lives are more equal than others, and the Brits have apparently decided (much like our Congress) that sickies really should move on.

Of course, that's only bad news for those folks fortunate enough to live long enough to even get liver cancer. If you're a baby Brit, then you'd better hope you went full-term:

"Doctors left a premature baby to die because he was born two days too early, his devastated mother claimed."

The infant was born about 4 months early, and so his life was deemed unimportant enough to waste precious health care dollars in saving. What a compassionate system.

Quick - let's have that here!

About that "Public Option:" He who makes the rules...

Sometimes, seeing something in action is far more convincing than just discussing it:



[Hat Tip: Lyndsi Thomas]

German health care costs: Uber oder unter alles?

I was struck by the chart that accompanied this Wall Street Journal article today (scroll down).

The chart lists 5 countries (Netherlands, France, Switzerland, Germany, and Canada) whose overall health care spending - according to OECD data - is between 9.8% and 11.0% of GDP.

Not that long ago, spending in the US was at 11% of GDP and pundits were predicting disaster. Well, now these 5 countries are at that level.

I think this information suggests that these nations have not really "solved" the problem of health care spending because they have failed to stabilize their health care spending. They have maintained a lower overall spending level than the US (which may be related to other factors, e.g. behaviors, diet, income levels, etc) but they have not stabilized the growth of their costs and as a result have caught up to where the US was, not so long ago. It's tempting to believe their costs will continue to grow and will reach the level where we are now, in not so many more years. Shouldn’t we know for sure whether that’s true?

So wouldn't it be useful to compare per capita US health care spending for our Medicare population with the corresponding per capita numbers in other countries for their over-65 populations? Such a comparative analysis could be designed so as to reflect like populations, insured in like manners by federal programs of health insurance (Medicare in the US, the national health systems in the other countries). If per capita US expenditures for this population are consistent with the other countries', well then that could be evidence that extending a Medicare-like, federal, single-payer system to the rest of our population would result in lower spending - like the rest of THEIR populations. If the US per capita expenditures are higher, that could mean that universal single payer systems may not be so effective as is widely believed.

I'd be surprised if this comparative analysis has not already been done - but I've been unable to locate anything. Yet.

[Graphic courtesy WSJ]

On Phantom Numbers

So Sen Reid has (finally) deigned to share with his Senate colleagues his phantasmagorical health care "reform" package.

O frabjous day!

According to the Congressional Budget Office, this all-in-one solution will cost a mere $849 billion, while allegedly reducing the federal deficit by some "$127 billion over the next ten years."

I understand that it slices and dices, as well.

To put that purported $127 billion in perspective: it represents, over 10 years, less than last month's deficit alone.

That bears repeating: if (and that's a big if) it really meets expectations, Sen Reid's baby will cut, over 10 years, the equivalent of one month's deficit. Color me underwhelmed.

It does this, by the way, by drastically cutting Medicare expenses to seniors, to the tune of half a trillion dollars. If, in fact, it cuts them at all.

Hunh?

Since 1997, there have been regularly scheduled Medicare reimbursement "adjustments" (i.e. decreases), every one of which has been deferred. That is, there have been no actual cuts to Medicare reimbursement schedules. Now we're to believe that, willy nilly, after 12 years of non-activity the gummint is suddenly going to get serious about cutting providers' Medicare reimbursements?

Perhaps I can interest you in a bridge, as well.

Absent these cuts (on which the CBO "scoring" is predicated), there are no savings, only additional expenditures. Of course, with these cuts, Seniors will "enjoy" a double whammy: being thrown under the bus, and drastically reduced medical services when they hit the ER (and beyond).

Regardless, The Gang That Couldn't Count Straight© has some credibility issues when it comes to these massive expenditures to solve economic problems. Here's another 1,000 words to illustrate:

[Chart Courtesy Innocent Bystanders]

[Hat Tip: Ace of Spades]

For Your Reading Pleasure...

Ladies and Gentlemen, I present to you H.R. 3590, aka HarryCare.

All 2,074 fun-filled pages.

Enjoy.

Irony, Thy Name is Obama

Perhaps the most annoying type of TV commercial is the (apocryphal?) car dealer who claims to lose money on each sale, but will "make it up on the volume." Ostensibly, this is supposed to mean that he'll sell so many cars that he'll end up with a profit.

Unless you're a state Attorney General, you probably understand enough economics to know that, if you're losing money on each car, you're going to lose more money on lots of cars.

Okay, that last sentence is unfair; let's make it more accurate: Unless you're a state Attorney General or the President of the United States, you probably understand enough economics to know that, if you're losing money on each car, you're going to lose more money on lots of cars.

As witness:

"President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession."

So let's get this straight: if we don't cut spending, we're going to continue to further damage an already floundering economy, and the way to cut spending is to spend almost $2 trillion dollars on a government takeover of our health care system?

Gosh, what kind of mileage does that baby get?

[ed: Our apologies to car salesfolks for comparing them to President Obama]

In the Hot Seat (Again)

Several months ago, the very pleasant Claire McGuire interviewed me on behalf of FoIB Chris Brooks' Term Life Insurance Policy blog. Claire was researching a piece on whether (and how) disclosing one's medical history could adversely affect one's life insurance application.

The results of that interview are part of a very interesting post now up at Chris' blog.

Ignorant Government Tricks: Economics and the Flu

It appears that officials in some states aren't familiar with the concept of market-driven solutions. Case in point from today's McPaper:

"Some pharmacies are charging three times what others are for a scarce liquid form of the H1N1 drug Tamiflu used by children, USA TODAY has found. At least two states' attorneys general are investigating."

Apparently, "at least two states attorneys general" are clueless: increasing the price of something in short supply is a feature, not a bug. That is, the price increases because there's a shortage, not the other way around. When the cost of something is artificially depressed, the demand goes up, and shortages ensue. In this case, the relatively low cost of the vaccine (the article quotes $43, although I've seen it for much less locally) encourages folks who are at low risk of getting H1N1 (or, if they do, experiencing much difficulty) to get it anyway, reducing the supply available to those who are at-risk. By making the opportunity cost (and, of course, the nominal one, as well) more painful, it alleviates pressure on the supply chain. This is a good thing because more of the vaccine is then available to those truly in need.

It's akin to the price of hotel rooms after a major weather disaster: if rates remain fairly low, some families figure "hey, we'll get two or three rooms so the kids have some space;" this reduces the available supply for those who come in later. Temporarily increasing room rates discourages this behavior. It's basic economics.

Seems like that concept is lost on gummint-types.

Cavalcade of Risk #92: FAQ's

Jason Shafrin hosts this week's Q&A version of the Cavalcade of Risk. It's a safe bet that you'll learn something new.

Group Term Life Insurance - Open Enrollment

For some, open enrollment is going on as employees scramble to make elections for the coming year. I consulted with a client today on their options.

The family has been covered under a family major medical plan but his wife has recently returned to work and has been offered a benefit package. The health plan is good and very inexpensive for her after factoring in the employer contribution.

Like most employer plans, the heavy cost is shifted to the employee that has a family looking for coverage. After reviewing the benefits of their current plan vs. the one through the employer and weighing the cost of both plans the husband decided to keep what he has now.

The husband and children will remain on the current plan, the wife will choose the employer plan.

We then looked at other benefits such as life insurance, dental and vision. The dental and vision plans both have nominal premiums (due to heavy employer subsidy) and were essentially a no-brainer.

He dismissed the life insurance but I encouraged him to look at it further. Like many plans, the employee will receive life insurance at no charge that is a multiple of salary.

Free is good.

They also have a dependent life insurance plan that allows the wife to buy $50,000 of life insurance on her husband. Since this is open enrollment he can pick up the insurance without evidence of insurability.

This last item is a key in the decision process.

My client has cancer.

He has been battling cancer for 2 years. He applied for SSDI (Social Security Disability Insurance) in January and was approved in three weeks.

No one is approved that quickly.

If he were to apply for life insurance in the open market he would be denied. I strongly encouraged him to pick up as much life insurance as he can get under the employer plan.

After I explained the way the plan will work, that he will not be required to answer health questions or submit to a physical exam, he agreed that purchasing life insurance through the employer was a good idea.

So did I.

How Much?

It's been a while since we've discussed transparency in health care. Thanks to commenter Christine Lynch, here's a pretty good summary of why it may be overdue:

Skip that Mammogram? Maybe... [UPDATED & BUMPED]

[Please scroll down for updates]

Earlier this year, we reported on surprising news that perhaps PAP tests weren't "all that." Now comes news that, for many 40-something women, mammograms may not be "all that," either:

"Most women don't need a mammogram in their 40s and should get one every two years starting at 50 ... It's a major reversal that conflicts with the American Cancer Society's long-standing position."

But wait, it gets better (or worse):

"[B]reast self-exams do no good and women shouldn't be taught to do them."

If this was just any old think-tank, one might be tempted to call this irresponsible and potentially dangerous advice. But it isn't, it's "the U.S. Preventive Services Task Force, whose stance influences coverage of screening tests by Medicare and many insurance companies."

In the other corner, of course, Dr. Len Lichtenfeld, deputy chief medical officer of the American Cancer Society, responds that "[o]ur concern is that as a result of that confusion, women may elect not to get screened at all. And that, to me, would be a serious problem."

So which is it?

Hard to say, but even the ACS has apparently been "backing off promoting breast self-exams in recent years because of scant evidence of their effectiveness."

And since most health insurance plans cover mammograms, some at no cost to the insured, it's unlikely that we'll see demand for them sagging. And we'll leave it at that.

[Hat Tip: SoIB Joyce Ferreiro]

UPDATE: There may be a diabolical undercurrent to the panel's findings. Hot Air's Ed Morrissey reports that as recently as 6 months ago, the same panel was sounding the alarm in a statistically insignificant drop in the number of 40-something women having these exams. Now, they're lauding the same outcome. What's changed? Under ObamaCare, "the government will be paying for a lot more of these exams ... That will put a serious strain on resources, especially since many of the providers will look to avoid dealing with government-managed care and its poor compensation rates."

Ed also notes that none of the 16 members of the U.S Preventive Services Task Force is an oncologist.

Death and Taxes: An Ethical Dilemna

FoIB and tax-blogger extraordinaire Joe Kristan has an intriguing post about organ donations, taxes and the thousands of patients who've died as the result of a perhaps mis-guided policy.

What do you think?

Health Care Reform Disappearing Act

Health insurance reform is about give and take. If you waddle through the maze and countless pages in all the various bills before Congress you really have to wonder what is going to come out on the other end if and when this massive spending bill is finalized.

I have wondered about all the new taxes to pay for health insurance (supposedly for the uninsured) but something I read this morning crystalized the games they are playing in Washington with our money. The AP reported this on the tax credits that everyone got as part of our share of stimulus.

The tax credit, which is supposed to pay individuals up to $400 and couples up to $800, was President Barack Obama's signature tax break in the massive stimulus package enacted in February.

Most workers started receiving the credit through small increases in their paychecks in April. The tax credit was made available through new withholding tables issued by the Internal Revenue Service.

The withholding tables, however do not take into account taxpayers with multiple jobs or married couples in which both people work. They also don't take into account Social Security recipients with jobs that provided taxable income.

The Social Security Administration sent out $250 payments to more than 50 million retirees in the spring as part of the economic stimulus package. The payments were meant to provide a boost for people who didn't' qualify for the tax credit.

However, they went to many retirees who also received the credit. Those retirees will have the $250 payment deducted from their tax credit — but not until they file their tax returns next year, long after the money may have been spent.

That's a bit of a rude awakening.

President Obama called and he wants his money back.

Congress is doing the same thing with health insurance reform under the guise of taxing the rich to pay for health insurance for the poor.

That finding from a new Associated Press poll will be welcome news for House Democrats, who proposed doing just that in their sweeping remake of the U.S. medical system, which passed earlier this month and would extend coverage to millions of uninsured Americans.

The poll found participants sour on other ways of paying for the health overhaul that is being considered in Congress, including taxing insurers on high-value coverage packages derided by President Barack Obama and Democrats as "Cadillac plans."

That approach is being weighed in the Senate. It is one of the few proposals in any congressional legislation that analysts say would help reduce the nation's health expenditures, but it has come under fire from organized labor and has little support in the House.

Lawmakers also are looking at levying new taxes on insurance companies, drug companies and medical device makers.

Think about this for a moment.

They want to assess health insurance companies, drug companies and medical device makers to pay for health insurance for the poor. But what happens when the tax is imposed?

Drug companies will pass the tax on to consumers who will pay more for medication. Prescriptions covered by health insurance will be more expensive which will result in higher premiums.

Medical devices like pacemakers and wheelchairs will become more expensive which will result in higher costs to the consumer and health insurance company. This mean higher premiums.

Of course let's not forget that drugs, pacemakers and wheelchairs are also covered by Medicare and Medicaid, so those costs will increase as well.

And that tax on health insurance companies? It will be passed through as well to those who pay the premium.

As health insurance premiums rise, to cover the cost of new taxes, higher prices for medication, pacemakers and wheelchairs those plans are in danger of becoming a "Cadillac" plan . . . which will be taxed.

These changes don't even take into account the required 30%+ increase in premiums caused by health insurance reform that mandates more expansive (and expensive) coverage for wellness and mental health parity as well as the "no restrictions on pre-existing conditions" requirement.

So just like the government is giving us a break by lowering our withholding taxes and tossing a bone to Social Security beneficiaries, then taking it back next April, they are doing the same thing with health insurance reform.

Giving us more benefits (no pre-existing, low copays, wellness, mental health parity) which increase premiums so we will have to pay more tax. Actually, it is a double tax.

We pay the tax the first time when we consume goods like medication and medical devices, and then we pay again because we were forced to buy an expensive "Cadillac" plan.

This is a dog only a politician could love.

Change you can believe in. Yes you can.

Pre-Thanksgiving Grand Rounds

FoIB Louise Norris hosts this week's edition of Grand Rounds, and there's a lot for which to be grateful. For one, she's obviously taken the time to read every submission, and offers her own thoughts on each.

The Gang That Couldn't Count Straight: Spendulus & Health Care

Back in the day, we poked fun at then-Presidential candidate Obama's claim that he'd been to "all 57 states." Not having a Harvard Law degree, we relied on our high school teachers' claims that there were but 50. But it appears that President Obama's Spendulous efforts are indeed reaching all 57 states:

"In Arizona's 9th Congressional District, 30 jobs have been saved or created with just $761,420 in federal stimulus spending. At least that's what the website set up by the Obama Administration to track the $787 billion stimulus says."

Good news, right?

Well, not so much:

"There is no 9th Congressional District in Arizona; the state has only eight Congressional Districts."

Ooops.

But that's just a fluke, right? A one off?

Well....

"There's no 86th Congressional District in Arizona either, but the government's recovery.gov Web site says $34 million in stimulus money has been spent there."

And the list goes on from there.

Quick - Put these guys in charge of our health care!

It's no fable, it's the Carnival of Personal Finance

Miss M (as in M is for Money) hosts this week's roundup of finance posts, built round some old chestnuts.

CMS on ObamaCare: Epic Fail

Two of the major (purported) benefits of ObamaCare cited by its proponents are reduction of health care costs and increased availability of health insurance. Advocates also claim that we can achieve these two goals while saving tax-payer money.

As we recently noted, a study by Wellpoint put the lie to these assertions.

Now comes another report, this one from that noted mouthpiece for private insurers, the Centers for Medicare and Medicaid Services (CMS), which drives the nails even deeper into the coffin:

"With the exception of the proposed reductions in Medicare payment updates for institutional providers, the provisions of H.R. 3962 would not have a significant impact on future health care cost growth rates."

In fact, absent those hundreds of billions of dollars in Medicare cuts, the cost of health care actually increases under Obamacare. And that's based on historically low-ball gummint-touted numbers. The reality is likely to be far worse.

There's bad news about the much-touted "Public Option," as well:

"[P]ublic plan premiums would be roughly 4 percent higher than private as a result of antiselection by enrollees." [emphasis in original]

So much for the promise of lower health insurance costs.

But then, that's what we've been saying all along.

[Hat Tip: Politico]

Swine Flu Deaths Increase - Fact or Fiction?

On 11/6/2009 the CDC reported there were 129 swine flu related deaths year to date beginning 4/26/2009 and going forward. Six days later Fox news is reporting the CDC claims 4,000 have died as a result of swine flu.

So which is it?

Have over 3,800 people died in the last 6 days from swine flu? Are these swine flu cases "saved or created" like so many other numbers coming out of Washington these days?

Is it just a coincidence that the number of deaths increased after the House voted to approve H.R. 3962?

Is this just another stupid government trick?

Change you can believe in.

Cavalcade of Risk #92: Call for submissions

Next week's Cav is hosted by Jason Shafrin, the Health Care Economist. Submissions are due this Monday (the 16th), and Jason would like to remind you to 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.

Thanks, and have a GREAT Weekend!

The Skinny on Fat Mums versus the MVNHS©

It's not enough that the MVNHS© considers newborns "at risk" if their mums are a bit zaftig.

Now comes word that expectant mums may not have the opportunity to actually be admitted to hospital (as the Brits say):

"Mothers-to-be who have a body mass index (BMI) of over 34, the equivalent of an average woman of 5ft 6ins weighing 15 stone, will be turned away from Weston General Hospital, Weston-super-Mare, Somerset."

Ooops, better watch that weight gain, gals!

Fear not, though, portly preggies have to travel but 20 miles to the next closest facility. Assuming, of course, that they can make it that far when contractions are minutes apart.

Quick - Let's do that here!

Unconstitutional, But "Fair"

Seems that the lower chamber of Congress echoes the sentiments of the upper:



"The legislation is very fair in this respect."

Dear. Lord.

[Video courtesy of RedState]

Southwest Ohio Network Alert: Medical Mutual Edition

Once again, Premier Health (and its associated hospital network, including Miami Valley) is on the outs with a major carrier. This time, Medical Mutual of Ohio has declined to renew its contract with Premier, effective January 1st of next year (about 7 weeks away). This could mean a potentially huge disruption of service: in addition to over 100 local doc's, the network includes Miami Valley and Good Samaritan Hospitals, and a home health care agency.

This isn't the first time that the network has clashed with insurers: about this time last year, Humana and Premier parted ways, and have yet to reconcile. And a few years before that, Anthem and Premier separated for quite some time before they kissed and made up.

My guess, based on the timing, is that MMO is looking to pressure Premier into concessions on price; this isn't a bad tactic, per se, and could result in some savings for their insureds. This far out, it gives both sides time to posture, and still come to an agreement before the clock runs out.

We'll keep you posted.

Small Town, Big (Insurance) Troubles

Recently, FoIB Rick Byrne tipped me to a fascinating, if convoluted, story out of northeast Ohio. There's as much small-town politics as group health insurance in this tale; I'll be focusing on the latter as much as possible.

Briefly, this suburb of Youngstown is home to some 12,000 residents. It's governed by an eight-person city council, and and has about 60 employees. These employees (and some of the city council staff) are covered by a group health insurance plan issued by Anthem, which has recently notified them of a renewal rate increase.

And thus our story unfolds.

A short time ago, one of the council members proposed deleting staff from the group plan. Dan Yemma, an insurance broker himself (although not the agent for the city's plan), thought that only certain classes of employees should be covered, and that shrinking the group would be an efficient way to save money. For whatever reason, this proposal was deep-sixed, and things went on as they had.

To a point:

The Anthem renewal increase was for 13% (a not unreasonable percentage in this market, but well above the city's anticipated budget for insurance). The agent of record, Michael Caparso, agreed to "shop" the group, which is generally a good idea. Until recently, this would have involved simply generating a census (a list of employees, their family status and ages, etc) and adding whatever additional underwriting information was available (autistic dependendents, pregnant spouses, etc) in order to generate a "pre-screened" rate. Absent that medical information, the carrier would simply issue a "street rate" quote; that is, one which assumed (rightly or wrongly) that everyone was in fine health. In the past year or so, though, carriers have become more stringent in their screening process, and now require completed applications (or waiver form) for each employee. This can be a real burden if one is seeking quotes from multiple carriers; the good news is that pretty much every carrier will generate a quote off of a UHC application.

And so, the agent supplied apps to everyone, and all but one were completed and returned. The one holdout was the aforementioned council member with an apparent axe to grind. He refused to submit either a completed application or a waiver; without that, the carriers wouldn't issue a "pre-screened" quote.

[ed: it should be noted that throughout the linked article and the emails I've received, folks keep referring to these as "binding quotes." They are not: a "binding quote" in this instance is an oxymoron. What they're really talking about are "pre-screened" numbers]

The city's dilemna was that they really couldn't afford the 13% hit from Anthem, but their agent's hands were tied because of the missing form.

And there things stood. And (apparently) stand.

When I first read Rick's email, I was a bit puzzled by a number of issues. First, I didn't understand why the other council members didn't force their recalcitrant colleague to cough up the form (although I really didn't know what leverage they may have had to do so). I was also puzzled by the revelation that the city auditor, who was tasked with getting and evaluating the quotes, was on the city's plan and apparently felt it was her only option. Finally, I wondered about some of the things that Mr Yemma allegedly said, which did not reflect well on his professionalism or ethics. A number of things just didn't add up for me, and so I decided to do a little research.

Jeanne Starmack, the reporter who broke the initial story, quickly and graciously responded to my email asking if she'd be willing to discuss the situation. In reply to my questions, Ms Starmack told me that, as of the 5th, Mr Yemma had yet to submit either a completed application or a waiver. She also noted that the other council members really had no means by which to force him to comply: "He's not an employee, he's an elected official and they can't make him do anything." That makes sense, of course, and explains why there's been no official sanctions. I had wondered if there was perhaps some professional jealousy involved (since he's an agent, but not the agent), but Ms Starmack quickly quashed that. She also helped me understand exactly which kinds of folks he'd have preferred be taken off the plan: "the city council, the mayor, the law director and the auditor." Interestingly, she also told me that the city's group insurance is the auditor's "only source of insurance."

Ms Starmack told me that, in a series of emails, the auditor and Mr Yemma had quite a few disagreements about what was necessary to obtain pre-screened quotes. According to the article, and Ms Starmack's email, Mr Yemma claimed that it was not, in fact, necessary for him to submit an app or waiver in order to obtain the necessary quotes. Since we already know that this is untrue, I was a bit nonplussed that he would make this claim; as an agent himself, he either knew it and was lying, or he'd slept through a few CE classes. Neither of those alternatives seemed likely to me.

In Part 2, we'll learn the Insurance Department's reaction, as well as information directly from two principles: Mr Yemma and the city auditor.

[A Very Warm InsureBlog Thank You to Jeanne Starmack for her help]