Friday, April 30, 2010

Top 50: IB Admin?

Not sure how we made this list, but we're really quite flattered:

"A career as a hospital administrator is exciting, fulfilling and demanding. The hospital administrator, like the doctor or nurse, plays a huge role in saving people’s lives, but the administrator doesn’t need a scalpel. You might discover from the current blogs listed below that hospital administrators assist their medical staffs, have a hand in local publicity, technical issues and usually has a broad knowledge about health care business, policy and law. These top 50 health administration blogs provide resources for those topics."

And there we are, under the Health Insurance and Disease Management Blogs category. We're in august company, as well: Jaan Sidorov's Disease Management Care Blog and Julie Ferguson's Workers’ Comp Insider also made this list.

Thanks to Bill for the heads' up!

Cavalcade of Risk #104: Call for submissions

Jason Shafrin, The Health Care Economist, hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 3rd). Please remember 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.

Thursday, April 29, 2010

OMB Director: Rationing out the Truth

Via HotAir, Peter Orszag (Director of the Office of Management and Budget) admits (boasts?) that ObamaCare© explicitly rations care, and that so-called "Congressional oversight" is but a myth:

I'm Not Bad, I'm Just Drawn That Way

The health insurance industry has been vilified in the media and by self serving politicians over a practice of cancelling contracts when fraud is discovered. To read some of the stories you would think policy rescission was rampant any time someone files a claim.

Most of the reports are greatly exaggerated with omission of facts that are relevant to the issue. InsureBlog has examined several of these over the years including this oldie but goody from 2008 involving HealthNet and Patricia Bates.

The case got a lot of press and HealthNet was branded unjustly (in our opinion) since more was made of the rescission and almost nothing was said about the fact that Ms. Bates lied on her application about her weight or her heart condition.

Part of Obamacare is a provision that prohibits carriers from rescinding coverage. Many will view that as a good thing but like everything else in Obamacare, it comes with a price.

Politico is reporting that carriers will cease the practice of rescinding policies starting next month.

The decision to end rescission, as the practice is known, was made during a Tuesday afternoon conference call of chief executives organized by their trade group, America’s Health Insurance Plans, and represents the industry’s latest attempt to build political good will after the bruising health care fight.

The decision came on the same day that WellPoint, under fire for reports that it had targeted breast cancer patients for rescission, announced it would end the practice by Saturday. On Wednesday, UnitedHealth also announced it had eliminated the practice,

Big cheer goes up.

But wait, there's more . . .

Congressional Democrats and Health and Human Services Secretary Kathleen Sebelius had pressured companies to end the practice early. The overhaul plan will ban the practice in September, except in cases of fraud or intentional misrepresentation, and subject it to a third party review.
(emphasis added).

So really nothing has changed.

If you lie on your application, like Patricia Bates, you can still lose your coverage. The only real change is a "third party review".

Even then, there is little change from the current policy. Cases of suspected fraud are routinely reviewed by outside medical experts before a decision is made to approve or deny a questionable claim.

Same thing for possible rescissions.

Legal counsel is consulted to make sure the carrier is on sound footing before tendering a rescission letter.

So in spite of all the hype, the rescission issue is more of a sound bite than something that will really . . . change . . .

"Health reform made rescissions illegal"

No, it didn't.

Unjust rescissions were a violation of contract law before. Nothing changes now.

Like the line delivered by Jessica Rabbit, the health insurance industry isn't bad, they are just drawn that way.

NBA meets HWR

Jason Shafrin hosts this week's edition of the Health Wonk Review. He presents his 'Top 16," much like the playoffs.

Wednesday, April 28, 2010

In Fairness: HHS Shecantbeserious Update

Earlier this week, we reported that HHS Shecantbeserious had deliberately withheld damning information regarding the true costs of ObamaCare©.

According to Jake Tapper of ABC News, the Secretary has disavowed any knowledge of this action:

"That story’s not true,” Richard Foster, the chief actuary for the Center for Medicare and Medicaid Services, told ABC News ... Foster tells ABC News that he received a copy of the bill on March 18, and knew then that he wouldn’t be able to do a thorough analysis of it before the vote."

The bill was rammed through on March 21st.

At this point, we really don't know who's telling the truth, so we'll leave it to our readers to form their own opinions.

About that "You can Keep your Current Insurance" Promise

Yeah, well, not so much:

As with so much of ObamaCare©, this one's going under the bus, as well. Recently, I pointed out that savvy folks will avoid buying major medical insurance altogether, opting instead for the much less expensive "penalty" (i.e. "tax"), secure in the knowledge that they can easily pick up coverage later. As Bob points out, though, these folks need to be aware that the ObamaPool may not be open to them at that time (or it may be, who knows). Regardless, Corporate America has already reached the same conclusion:

"The president didn't have to actually strong-arm companies into dumping their employee health insurance because his bill carried financial incentives to virtually guarantee that result ... like AT&T found out, paying $600 million in penalties will allow you to stop paying $2.4 billion for insurance."

Quite so. It seems to me that this is likely by design: what quicker way could there be to a so-called "Single Payer" (i.e. Government-run) system?

Maybe it's just TPC (The Phone Companies), because Verizon has also seen the light:

"To avoid additional costs and regulations, employers may consider exiting the employer health market and send employees" to state-run insurance exchanges."


[Hat Tip: PowerLine]

Cornhuskers Say No to Obamapool

Obamacare is coming apart at the seams. The much talked about national risk pool (Obamapool) for uninsurables is falling flat on its' face before it even get's going.

Simply put, if you have a "qualified" pre-existing medical condition AND have been uninsured for 6 months or longer, you may be able to purchase health insurance via the Obamapool.

So what is a qualified pre-existing condition?

We don't know. Until the HHS Sebelius sails and decides to tell us what is on her secret list of approved medical conditions no one knows how a qualified condition is defined.

We also don't know the benefit structure for the Obamapool but we are promised "lower rates".

Keep in mind the Obamapool is supposed to roll out in less than 90 days and so far there are no states that we are aware of, or no carriers, who have agreed to underwrite this mess.

Nebraska is the latest state to bail on Obamapool.

Nebraska Attorney General Jon Bruning has joined 19 other state attorneys general challenging federal health care reform, a fact Heineman pointed out in a letter to state lawmakers notifying them of his decision to turn down the federal program.

"As you know, most Nebraskans are opposed to this legislation because it will raise taxes, cut Medicare and premiums will continue to increase," Heineman said in the letter to lawmakers. "I share their concern."

Georgia was one of the first to opt out of Obamapool and we fully expect most, if not all, will do likewise.

Nebraska already has a risk pool with 4,820 participants, but "with so much financial uncertainty, the state of Nebraska cannot afford to subsidize a second high-risk insurance program,"

You see, Nebraska and other states are not like the federal government when it comes to funding entitlement programs. Washington can write checks even though they don't have any money in the bank. But state and local governments are like businesses as well as you and me. If we don't have the money in the bank we can't pay for it.

The next 3 months should be interesting as Washington tries to force Obamapool on the states only to discover no one wants to play. In effect, the states are peeing in the Obamapool and no one wants to get in.

I can't blame them one bit.

Wednesday Link-Fest

We're always grateful for the interesting tidbits we receive from loyal readers and others; the challenge is that many of these items just don't merit their own post. Still, it would be selfish of us not to share our bounty:

First up, another STOLI death mystery solved. Stranger Owned Life Insurance policies are the source of much confusion, occasionally leading to murder most foul. Thanks to Bob, we learn that one insurance agent has been "arrested on numerous counts of alleged fraud and grand theft in connection with a stranger-originated life insurance (STOLI) scheme involving $78 million in death benefits." Yikes - that's a lot of life insurance. We presume that The Million Dollar Round Table discourages this kind of "production."

Next, Companion Global's Brian Kroll points us to an interesting video about medical tourism. This type of coverage helps to pay for medical care folks seek outside their home countries.

Our favorite CMS Guy, Jack Cheevers, tells us that the "U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) ... announced grants to 41 health programs operated by the Indian Health Service; tribes and tribal organizations; and urban Indian organizations." We've written about the Indian Health Service before; this promises to be more positive.

And finally, our good friend Lindsi Thomas alerts us to an interesting podcast by Reason's Peter Suderman, who discusses "problems that came about when states like Hawaii, Tennessee and Massachusetts tried to implement universal health care coverage."


Tuesday, April 27, 2010

More ObamaCare© Shenanigans: HHS Shecantbeserious vs The Truth [Updated]

Why is this not surprising?

"The economic report released last week by Health and Human Services, which indicated that President Barack Obama's health care "reform" law would actually increase the cost of health care and impose higher costs on consumers, had been submitted to the office of HHS Secretary Kathleen [Shecantbeserious] more than a week before the Congressional votes on the bill."

Get that?

These folks knew that the final bill was going to be much, much higher than advertised, and withheld that vital information anyway. Would it have made a difference in the final vote tally? That's debatable and, of course, unknowable. But it might have given political "cover" to folks on the fence.

Which was exactly why it was buried:

"The reason we were given was that they did not want to influence the vote," says an HHS source. "Which is actually the point of having a review like this, you would think."

Ya think?

[Hat Tip: Ace of Spades]

UPDATE: There appears to be some question as to the veracity of this story. Please click here for details.

Babelicious Grand Rounds

ChronicBabe hosts this week's "ladylike" Grand Rounds. It's pink, it's powerful, and it's pfull of great medblog posts.

Monday, April 26, 2010

HIPAA Jumps the Shark

[Welcome Industry Radar readers!]

The father of a close friend is about to begin chemo for cancer. His oncologist's office has a special area for this, with seats for up to four patients; each treatment session lasts 4 hours.

Unbelievably, his wife is not allowed to sit with him during this physically and emotionally painful time.

Why is that, you ask?

Because she "might see other patients, which would violate their HIPAA privacy rights."


Seeing another patient somehow violates their privacy rights? What if she was in the downstairs waiting room and one of these poor folks walked out? Wouldn't she see them then? How about on the street?

But Henry, what if one of these patients disclosed their name?

Well, then, that person just waived their privacy under HIPAA; problem solved.

I suggested an alternative: mom should just tell the doc's office that she's gay.

HHS Shecantbeserious vs the 10th Amendment

And so it begins:

Only hours after the Florida House and Senate voted to “opt out” of the new federal health law, the top U.S. health official said Thursday night that will not be permitted.

Without mentioning any particular state or going into detail, Health and Human Services Secretary Kathleen [Shecantbeserious] said that state and local officials can vent all they want about a so-called “federal takeover” of health care. But they cannot deny their citizens access to its benefits or requirements

Really, Madame Secretary?


I ask because you were wrong about how and when kids would be covered, about the cost of ObamaCare©, even about whether or not the CongressCritters who passed it are even covered by it.

And you seemed open to the idea that states could opt out of the new risk-pools, so why would this "flexibility" not extend to other components of this train-wreck?

And so it seems reasonable to me that you might want to take a more, shall we say nuanced approach when it comes to opining about issues best left to those actually familiar with the 10th Amendment.

Sunday, April 25, 2010

Incredibly Stupid Carrier Trick? Maybe. [Updated & Bumped]

[Please scroll down for important update]

It would seem that WellPoint is eagerly looking forward to government intervention, if not outright control:

"They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators."

If true, this is not only incredibly short-sighted, but morally egregious.

But is this story true?

Certainly we've seen our share of Stupid Carrier Tricks, but we've also seen how the press routinely misses both the facts, and the point. There are a number of facts missing from the stories I've seen, starting with how many of these women had already been diagnosed with breast cancer before seeking coverage, and whether or not this was disclosed on their applications. It would also be helpful to know if there are other health issues involved which might have triggered rescission.

Unfortunately, a lot of this information is probably covered under HIPAA privacy rules, effectively gagging the carrier from coming to its own defense. But I didn't see anything in the news stories thus far which even hint that the reporter tried to ascertain whether or not there was more here than we're being told.

If, and it's a very big "if," WellPoint is simply casting these women off willy-nilly, then they deserve any and all consequences that come their way, and we'll proudly add this episode to our pantheon of the aforementioned Stupid Carrier Tricks.

At this point, however, that would be premature.

UPDATE: [NB: the original post was published on Friday, April 23rd] Well, that didn't take long. Turns out this is actually a "Stupid MSM Trick." Bob just alerted me to Reuter's correction, which pretty much undermines the entirety of the original story. To wit:

"Removes all references to Robin Beaton ... that the insurance company that canceled her policy was not a WellPoint subsidiary."


"Technically, rescission was not the reason Reilling lost her health insurance ... Rather, it was canceled because she did not answer letters from her insurance company requesting information about her employment history."

"Technically." Kinda like saying "technically, Joe didn't rob the bank at all, but he was riding a bike." Unfortunately, the damage has been done to WellPoint's reputation (such as it might be); one can't "unring the bell."

Now, one may take issue with the idea that one's employment history should form the basis for a rescission (I certainly do), but this is a far, far cry from the sensational headline claiming that breast cancer patients are routinely kicked off their plans. But it's of a piece with these kinds of stories (as I mentioned in the original post): go with the sensational (but baseless) headline, paint a stark picture of dire straits, and hit "publish." So much for "professional journalism."

Saturday, April 24, 2010

Told Ya so...

Courtesy of RedState:

One note: early on (at about :35), one of the talking heads makes the critical point that "14 million Americans ... are going to be losing employer-based health coverage." [emphasis added]

This is critical because, as we've pointed out ad naseum, health coverage is not the same as health care. Why is that critical? Because as we've also pointed out, ObamaCare© was never about "care."

Friday, April 23, 2010

ObamaCare©: Dunh!

As Bob notes below, failing to anticipate costs can be, well, costly. And it's not just at the state level:

"The sobering assessment by the Centers for Medicare and Medicaid Services concludes ... that the double-counting of Medicare spending -- as both savings and as a means to shore up the debtridden government fund for seniors' health care -- means the cost is unrealistic."

This should come as no surprise to those who've been following this train-wreck, but it's worth repeating: ObamaCare© has never been about controlling health care costs, it's been about government control of health care itself. This news simply underscores that point; note as well that the innocuous "1 percent over 10 years" is just silly: as we continue to see, this administration has no clue about how to actually (or accurately) predict the full impact of their efforts.

For example:

[Chart courtesy Innocent Bystanders]

Heads You Lose, Tails You Lose

Even though we have been focusing on the battle of rates in Massachusetts, there is a similar war going on on Maine between the DOI and Anthem Blue Cross.

While many know Maine for their lobsters, that tiny state is also the home of high health insurance rates. It has nothing to do with the climate but rather the state legislature that decided years ago they wanted to make health insurance available to anyone, regardless of any pre-existing medical condition.

So they proceeded to place restrictive mandates on plans that could be offered to the populace.

The result was a mass exodus of carriers which essentially left the market pretty much to Anthem Blue Cross and a handful of HMO's.

Premium rates shot up almost overnight and the number of plans available to consumers dropped dramatically to only a handful of plans.

Does any of this sound familiar?

To counter rising premiums the state created Dirigo which has since gone bust a couple of times due to lack of taxpayer funding. The idea of Dirigo was to provide a taxpayer subsidized plan to help pay for coverage for the states 130,000 without insurance.

Currently there are only 8300 on the plan and it is closed to new applicants.

Care to guess why these type of plans never seem to work?

But back to Anthem vs. the Maine DOI . . .

A few months back, Blue Cross ask for a rate increase which was denied. The justification was, even though Blue Cross had slim margins on their individual major medical business in Maine, the parent company (that would be Anthem) made money so the requested increase was denied.

This is like telling Ford they have to keep selling Pinto's, even though they lose money on every one, because as a whole the company made money.

Just because the government doesn't have to bring in enough revenue to cover their marker doesn't mean businesses can do likewise.

Blue protested and went to court. Here is what the courts have said.

The Maine Superior Court has affirmed a decision by state regulators to cut the increase in Anthem Blue Cross and Blue Shield of Maine’s rates for individual health plans from 18.1 percent to 10.9 percent.

Superior Court Chief Justice Thomas Humphrey said in a ruling Wednesday that Maine law does not “expressly entitle insurers to a mandated profit margin.’’

That was a silly ruling.

Of course companies (of any flavor) are not GUARANTEED a profit. All they want is a CHANCE to make a profit.

The company has not decided whether it will appeal the ruling.

“That said, we stand by our position that filed rates need to both cover the medical costs for our members and allow for an adequate risk margin to cover unanticipated costs,’’ said spokesman Christopher Dugan

Regardless of what happens, the consumer will lose.

Blue will agree to write business at the lower rate and be forced to take other action such as restricting benefits on new applicants, or they could pass on the rate hike on renewals but leave new business rates in compliance.

The other thing Blue can do is decide to leave the state. In that same vein they can stop offering individual major med business and concentrate on other lines (such as group) that is potentially more profitable.

Regardless of what Blue does, the consumer will ultimately lose.

This scenario will play out on a national scale as well as Obamacare rolls out.

Wednesday, April 21, 2010

MVNHS©: Sex and Drugs (But no Rock and Roll)

The bad news for (certain) Brits is that Big Pharma, um, Biggies Novartis and Roche are looking for the exit as the Much Vaunted National Health Service© continues to flex its muscles. There are several issues at stake, the two most prominent being a conflict in how much the firms can charge for their products; the other issue arises because the approval process for new meds is perceived to be "too expensive and bureaucratic."

The result: a potential loss of some 5,000 jobs, and the financial benefits that accrue therefrom.

The good news is that, despite (because of?) rationing for medically necessary services (and savings from actual medications), the MVNHS© apparently has all kinds of extra money lying around, all the better to ensure that transgendered Brits are, um, served:

"The number of sex change operations carried out on the NHS has almost tripled in the last eight years."

These numbers are a bit skewed, since the ratio of men becoming women to women becoming men is roughly 70:1. And I'm not going to get any more detailed than that.

At about $15,000 a pop, that translates to some $2 million for this apparently vital public health service.

Guess there's no pill for that, now.

Interesting Carrier Tricks: Aetna Edition

[Welcome Industry Radar readers!]

Aetna recently notified agents in its Mid-Atlantic Region that the carrier would be discontinuing its "100%" Health Savings Account (HSA) plan designs. This is by far the most popular (and sensible) configuration for these kinds of plans (once the deductible is met, covered expenses are paid at 100% - no confusing 80/20 or co-pays). As a free-market kind of guy, I certainly respect this decision, even as I have trouble understanding it. Regular readers may recall that, a few months ago, Aetna undertook similar drastic measures with regard to its Health Reimbursement Arrangement (HRA) plans.

Now, I don't do a lot of business with Aetna - they're a fine company, but I just haven't found them to be all that competitive in this market - but was curious why they'd take such a dramatic step. Fortunately, I was able to connect with a carrier rep, who was happy to answer my questions as best she could (given that this is a recent development, details were understandably scarce).

So far, this blanket withdrawal affects only the "small group" market (2-50 lives); it's unclear whether it will eventually extend to the individual market, as well ("large group" plans are in another business unit). Our source found it ironic that they had just announced a raft of shiny new 100% plans, only to see them pulled a few days later.

I was curious about Aetna's rationale for scrubbing these seemingly popular plans. And that, actually, turned out to be the problem: they were popular. Very popular, in fact: apparently, quite a few groups found that they could install one of these plans and use the premium savings to reimburse employees (through their HSA's) enough to compensate for any additional out-of-pocket, thereby defeating the entire purpose of the plan. Claims apparently soared, and the company felt the sting of increased losses. This was basically a pricing problem: not enough premium to cover the unanticipated additional utilization. Of course, this begs the obvious question: why not just increase the rates on these plans instead of pulling them altogether?

The logic of that conundrum also puzzled our rep, but of course, what Home Office says...

Turns out that this is not necessarily a national phenomenon: while Ohio plans were deleted, this was not the case in other states. A big part of that is because loss ratios on this line were markedly different even in nearby markets. For example, I was told that Ohio loss ratios for this product ended up in the mid-90's, while just a few hundred miles away, Chicago-area losses were in the mid-70's. That's quite a difference. I did ask if we could see some of the actuarial studies which underpin these numbers, but (understandably) these probably won't be forthcoming.

One last bit that I found interesting, but may be a bit "wonkish:" based on the numbers, Aetna's actuaries seem to believe that a $2500 deductible is too low. While that might seem counter-intuitive, I'm not convinced that it is. Think about it: a typical co-pay plan with a $1000 annual deductible would actually incur $3000 in total out-of-pocket costs. By contrast, the maximum exposure on that HSA plan is about 17% less, with a lower premium, to boot! So one can see the attraction if the product is being "gamed."

It's a shame, really, because the point of these plans is to encourage consumer participation in the process, not to over-utilize.

[Hat Tip: Sara J]

Cavalcade of Risk #103: Up & Running

My Wealth Builder hosts this week's collection of risk-based posts. Based on a unique ratings system, MWB presents posts in order of previous participation.

All the more reason to participate!

Another way is to host your own Cav: just drop us a line to claim yours!

Tuesday, April 20, 2010

Unum, IB and Long Term Care: Same Page?

Among other products, Unum sells Long Term Care insurance [full disclosure: I am licensed to do business with Unum]. This is a growing market (as "Boomers" age and as 50-something's start "getting it"), with decent competition among the top-tier carriers.

Now though, these private-sector companies face competition from the government.

Or do they?

An email I received from Unum's R.G. Peterson, a sales executive with the company, asks "How does the health care reform package affect Unum’s long term care insurance and other private plans?"

And that's a good question.

As we've previously pointed out, the so-called "CLASS" (Community Living Assistance Services and Supports) Act ostensibly offers a gummint-sponsored long term care plan. There are few details available as yet, but Unum has provided some much-appreciated clarity in the form of a downloadable "recap." One of the first things I noticed was that this coverage will apparently not qualify as a "Partnership Eligible" plan. And the rocket surgeons who've decided that the gummint is capable of designing its own version one of the most complex insurance policies extant can't even tell us how much such a plan will cost.

Try that in the open market.

Still, as Mr Peterson mentions (and as we noted some time ago), comparing a real plan to one from the government may be just the ticket to convince you (or someone you love) to start getting serious about this most important coverage.

Travel: Interrupted

The Icelandic Etna just keeps spewing, and thousands of folks on business trips, family vacations, even weddings are stuck in airports while their planes remain grounded. In addition to the inconvenience of it all, there's also no question that there's a monetary price to pay, as well.

I don't think we've ever discussed travel insurance (not to be confused with travel medical coverage). More commonly known as "trip interruption insurance," this type of coverage falls under the Property/Casualty rubric. There are, of course, differences in coverage between plans and carriers; regardless, there are typically three general categories of risk: travel accident coverage (which helps pay for ER visits and the like), trip interruption and/or cancellation, and baggage loss. It's the second of these on which we'll focus today.

According to the New York Times, the "travel insurance industry is generally paying claims to travelers stranded in Europe and elsewhere by the drifting Icelandic volcanic ash, treating it mostly as a weather-related event in their policies, industry officials said."

They expect to pay millions of dollars in claims, but for what, exactly?

In this case, the two primary exposures would be for:

Trip cancellation: that is, to cover non-refundable fees to airlines and/or booking agents, tour operators and the like. These can be pretty substantial.

Trip interruption: there are likely a lot of folks who budgeted for a week's stay at the Ritz who must now pony up who knows how many additional days. This coverage could help ease that pain.

Local expert Bill Montgomery, CIC recommends that, in addition to this kind of insurance policy, travelers check to see if their credit card has trip protection built in, as well. He also suggests that folks contact their own agent (and/or a local, independent agent) to see if such coverage can be obtained from that trusted source.

[Thanks to TravelGuard for policy information]

Grand Rounds: Seeing IS Believing

The Sterile Eye presents a compelling image-based collection of appealing medblog posts. Do stop by for a unique and fun way to enjoy this weekly compendium.

Monday, April 19, 2010

Laudable Carrier Tricks: College Edition [UPDATED]

While I have my issues with the whole idea that 26 year olds should be considered "dependents" on their parents' health insurance, it is the law (for now).

Or rather, it will be the law, come late September. For now, when college students "age off" ther parents' plans, they're on their own (which is perhaps a valuable lesson in personal responsibility). Nevertheless, soon carriers will be forced to postpone that separation.

United HealthCare (while the target of several episodes of Stupid Carrier Tricks) has pre-emptively decided to implement that postponement effective immediately. According to an email from the carrier:

"We want students to graduate into a secure future, not the ranks of the uninsured. We saw an issue with this possible gap in coverage and are the first health insurance company taking action ahead of the new requirements."

Of course, the premise - that 22- and 23-year olds aren't capable of purchasing their own insurance - is quite flawed. But the sentiment is compelling, and so UHC "will work with ... clients that wish to extend the health coverage that graduating college students currently have under their parents' plans."

Partial kudos to UHC.

UPDATE: My inner cynic finally determined why I found UHC's concern about young adults not joining "
the ranks of the uninsured" so disingenuous. Healthy young people are essentially "free money" to insurers, producing few claims. When a 22- or 23-year old ages off his/her parents' plan, the carrier loses that money; since so many young people choose to remain uninsured, carriers lose revenue. By pre-emptively implementing the new regs, a carrier mitigates that loss.

Yes, dependent coverage has historically been less expensive than a stand-alone plan (although that will likely change now), but "half a loaf..." Can't say I blame them, either.

This is What Happens

when you pass a law that you have not read or tried to comprehend. The Daily Caller comments on Obamacare as such.

Congress may be fined tens of millions of dollars a year under its own health-care law, in part because the bill dumps members of Congress and their staffs from their current health-care plans.

But no one really knows for sure what the bill does, not even the experts. For instance, exactly who qualifies as an “employer” — and therefore is subject to fines up to $3,000 per employee — is undefined in the bill.

I got a chuckle out of that one although I would hardly classify members of congress as "experts".

Building on Hank's post of a few days ago, it seems the rocket surgeons who crafted this bill never bothered to weigh in on the implications.

If Congress were subject to a $3,000 fine for each of its employees, it would need to shell out approximately $50 million each year to Uncle Sam.

On the one hand, it is only money and small potatoes by DC standards. But the other side makes me wonder if they will do like they have so many times before and say, "well yeah, but this doesn't apply to us".

Seems a bit elitist, don'tcha think?

Latest on COBRA/ARRA

We haven't written about the COBRA/ARRA subsidies in a while, but there's good news for folks who've recently been involuntarily terminated:

"The Continuing Extension Act of 2010 was passed by both the U.S. Senate and the U.S. House on April 15" (how ironic!); the president signed it into law later that day.

The previous extension had run its course as of March 31st; this legislation breathes new life into the program by extending the subsidy for another couple of months (through May 31st). Regardless, the total length of time one may be eligible for the premium assist is 15 months. So folks currently "running out the clock" won't see any relief by way of this extension.

As always, we would urge those readers with more specific concerns to contact their (former) employers' HR folks for detailed, personalized answers. The Department of Labor also has a helpful website.

[Hat Tip: Beth D]

NY and ObamaCare©: "Your lab results are in"

As we've opined here on numerous occasions, one of the best things about individual state-based health care "reform" is the ability to see how these things work in the microcosm, before implementation on a national scale. Such is the case with MassCare (aka RomneyCare), about which Bob notes below the most recent problems with that system. Each state represents a laboratory, each system an experiment.

Directly west of the Bay State, we can see how New York's "experiment" is faring. In a word: Poorly.

To wit:

"New York’s insurance system has been a working laboratory for the core provision of the new federal health care law — insurance even for those who are already sick and facing huge medical bills — and an expensive lesson in unplanned consequences. Premiums for individual and small group policies have risen so high that state officials and patients’ advocates say that New York’s extensive insurance safety net for people like Ms. Welles is falling apart."

An "expensive lesson," indeed: according to insurance industry trade group AHIP, the Empire State boasts the highest individual medical premiums in the country. The problem is that, although New York does have a fairly high cost of (medical) care, the plans are designed so that only the unhealthy have any real incentive to buy health insurance. Because "normal" markets attract a mix of healthy and unhealthy, average rates can remain affordable for most. When the scale is tipped to such an extent as we see in New York, though, healthy folks are understandably reluctant to so heavily subsidize those in ill health.

So how does this relate to ObamaCare©? Well, most healthy folks will (correctly) conclude that the ostensible fine (tax, really) for going without insurance is much lower than premiums under a system which rewards those who wait until the last minute to buy a policy. And the policies themselves will be much more expensive because of guaranteed issue, immediate coverage of pre-existing conditions, and a new raft of mandated benefits.

To quote Bob: Can you say "train wreck?"

[Hat Tip: RWN]

Obamacare Doesn't Want You

Got a pre-existing medical condition? Having trouble paying your risk pool premiums?

Too bad.

Obamacare doesn't want you.

Phase I of Obamacare is slated to kick in by July of this year with a national risk pool for those who have been denied health insurance in the individual major medical market. Fulfilling a campaign pledge to make health insurance more affordable the national risk pool will offer premiums that are no greater than the standard premium charged to healthy people.

Ignore for now the fact that it the plan is doomed to fail financially. Yahoo News points out that many of those who want in the pool will not be allowed.

Suppose your cancer is in remission. You had to quit your job while you were having chemotherapy, and your employer coverage ran out. You can't find a private insurer who'll take you, but you're lucky to live in a state that has its own high-risk pool. Still, you have to struggle to pay the premiums, well above standard insurance because sicker people are in the group. Yet as the federal program is designed, you wouldn't be able to switch over and take advantage of significant savings.

The reason: You have to be uninsured to qualify for the new plan.

That means some 200,000 patients now enrolled in more than 30 state high-risk insurance pools will be stuck paying higher premiums. Many are on tight budgets, drawing down their savings and borrowing from family members.

The risk pool won't help those in high cost, guaranteed issue states like NY, ME and MA (home of Romneycare). But how about those who reside in the 34 states with risk pools that are paying up to 200% of the standard rate for risk pool coverage?

Like the Soup Nazi in Seinfeld, no Obamapool for you.

So by doing the responsible thing and paying high health insurance premiums through an existing risk pool, you will be denied access while those who stayed out of a risk pool will be accepted.

Kind of like those who pay their mortgage on time, even though it may be a stretch are penalized while those who stopped paying are offered taxpayer assistance by way of the federal government.

Presumably, many of those currently paying risk pool premiums are also paying federal taxes. I wonder how they feel about not only missing out on Obamapool but seeing their tax dollars used to provide lower cost plans to those who did not buy health insurance?

(Obamapool) will be temporary, a bridge to 2014, when denial of coverage for medical reasons will be against the law, and new insurance markets will offer taxpayer subsidized coverage for millions. Number crunchers at Medicare estimate that 375,000 people will sign up this year.

Crank those numbers through your logic calculator. Roughly 200,000 in a risk pool are paying premiums as high as 200% of standard rates for a program that loses money in every state where a risk pool exists. The Obamapool will charge even lower rates, by as much as half, and is expected to pick up almost double the number of people already in state risk pools.

Can you say train wreck?

The Future of Health Care Cost Control

In spite of all the fanfare about lowering the cost of health insurance, Obamacare does just the opposite.

Premiums will rise and do so in dramatic fashion.

Even worse, it does nothing to lower the cost of health care which is the driving force behind 85% of premiums.

Well, there was the scheduled 21% reduction in payments to Medicare providers but that was quickly wiped out when Obama signed the recent extension of unemployment benefits. That bill restored the cut that went into effect on April 1 which means the cost of Medicare will continue to rise and payouts will exceed Medicare tax collections.

Romneycare is the model for Obamacare. So how well is Romneycare working?

Not so well.

The folks at have been a great source of how Romneycare is really working, and Prof. Stern likes to make sure I don't miss the latest news.

So how is Massachusetts going to make Romneycare more affordable?

By making sure policyholders don't use the higher priced hospitals . . .

Health insurers are starting to sell policies that largely bar consumers from receiving medical care at popular but expensive hospitals such as Massachusetts General and Brigham and Women’s — a once radical idea that is gaining traction as a way to control soaring health care costs.

Governor Deval Patrick and Senate President Therese Murray have included such restricted provider networks in their recent legislative proposals to control rising insurance rates. And the state this month began offering limited-network plans to 300,000 state employees, retirees, and their families, promising 20 percent discounts on premiums if they are willing to give up access to some of the Boston area’s most renowned hospitals.

The federal government seeks to control the cost of health care by paying medical providers less than a market rate.

The keepers of the Romneycare flame lower the cost of health care by limiting your choice of providers.

Kind of makes you wonder if the folks in Washington think this is a good idea and will incorporate it into Obamacare.

Smaller cars, fewer health care choices, Poppa Washington.

Saturday, April 17, 2010

Stupid Blogging Tricks‏

This one is so jaw-droppingly insipid that I had to wash out my eyes:

Corporate Hall of Shame Award ... Angela Braly, president and CEO of health insurer WellPoint, got a nice bonus that raised her salary to $13.1 million from $8.7 million the year before.”

Exactly why is this shameful?

An executive serves at the pleasure of his or her board; if he or she isn't doing the job well, then they're gone. Rewarding people for doing their job well is called "capitalism," and it is by far the most successful economic system in the world.

By way of contrast, Alex Rodriguez made $231 million last year. Is that "shameful?"

Brad Pitt gets paid $30 million to act in a movie. Is that "shameful?"

Lady Gaga makes millions of dollars to sign and strut. Is that "shameful?"

Ms Braley (while not my favorite person in the world) makes what she makes because WP stakeholders think she's worth it. Or does Dr Brayer just have a problem with a woman executive making that much money?

Friday, April 16, 2010

The Myth of the "Richdoctor"

No, not the witchdoctor, the richdoctor. And what, pray tell, is this "richdoctor" of which you speak? Well, let's let guest-blogger and Medical Office Manager Kelley Beloff explain:

Arizona Doctor says Obamacare will force him to close shop

That is the headline of the article sent to me by a colleague. Is this true? Will physicians stop practicing if Obamacare goes into effect? YES. Physicians have been saying for years that there is too much government regulation and the pay is simply too low. They are simply tired of the intrusion by the government. But there is more to the story:

Scherzer said he hasn’t been fined but he was audited by the Centers for Medicare and Medicaid Services several years ago and spent months awaiting their findings.”

This statement refers to the RAC, the Recovery Audit Commission, which are hired mercenaries that go into physicians’ offices looking for Medicare Fraud and have unrestricted power to fine any physician they find who has committed fraud, whether knowingly and unknowingly. The fines are extensive and have bankrupted physicians since the implementation. The “auditors” are paid a commission based on the amount of fraud found, thus the investigations almost always find fraud. This physician was very lucky that he survived the RAC: most do not.

He also takes issue with the Democrats’ argument that much of the waste in the health-care system is driven by a profit motive on the part of physicians.”

Ah, the richdoctor syndrome. Notice "richdoctor" is one word. This is a myth built around wealth envy. It is this attitude that was behind the founding of the RAC (is it a coincidence that this was a favorite form of torture during the inquisition? Just saying). Anyway, back to those pesky richdoctors. I recently received a report stating that the average reimbursement of the average office visit code (99213) for physicians is $65.49. Yep, $65.49. That is all your physician gets for seeing you in a normal 15 minute appointment. This is the average, so some insurances pay less; Medicare is one that pays less. Medicare reimburses $63.74. But Kelley, you will say, that is $254.96 an hour, which is a lot of money to make in an hour. You’re right, but let’s look at a few factors:


1) Government has mandated that all physicians implement an Electronic Medical Records system by 2014 or face punishments. An average EMR costs $100,000 for installation and the first physician. Any additional provider costs between $30,000 and 50,000. That is the initial payment, there are yearly payments to update the software and keep it functioning.

2) Government has mandated that all physicians must have on staff a certified coder by 2012 or face punishment. The average annual salary for a certified coder ranges from $50,000 to $75,000. Once the mandate goes into effect, that figure will raise.

3) Any efficient medical office needs three staff members to every provider. Do the math for your physician. The average salary of medical staff is $30,000 (including benefits).

4) Patients enjoy a clean office with lights, restrooms, heat and air conditioning, exam tables, sanitary equipment, new needles, chairs in the waiting room, telephones, fax machines, computers. These aren’t free (to the provider).

5) Patients expect the medical office staff to bill their insurance companies, deal with any problems, see them promptly when they are sick, fill out their paperwork, and generally manage their healthcare, all without any cost to them.

Thus, all of the overhead expenses are paid by that $65.49. When this physician started practicing, the ratio of overhead to physician’s salary was 20:80. Today that ratio is reversed. Overhead in any medical office accounts for 80%. The physician, if he is lucky, gets 20%. So for math, 20% of $65.49 is $13.10, which is $52.40 an hour. This physician went to medical school for 4 years, internship, and residency for $52.40 an hour. And when Obamacare goes into effect the reimbursement rates will be LOWERED. Why would any sane person want to go into medicine?

It’s interesting how every time someone has concerns or opposed the bill you hear the Democratic party call the individual or group liars. It’s almost the mantra,” Scherzer said. “They’re providing disincentives to care that are making the practice of medicine repugnant.”

This point almost goes far enough: I would say IT IS THE MANTRA. The political environment has made it almost impossible to practice medicine. The government has put a wedge between patients and physicians and that wedge is MONEY. Patients today believe that they should not have to pay their medical bill, not their deductible, not their co pay, not their co-insurance, not their out-of-pocket expenses. NOTHING, NADA, NONE. My staff is harassed on a daily basis by patients who fight their bill with every ounce of their being; because the government is telling them that their health care is a RIGHT and these are just greedy richdoctors (see above). More and more practices, mine included, are putting anti-abuse clauses in their contracts with patients. That is, if a patient is verbally abusive with staff that is grounds for dismissal.

There is a physician shortage currently,
and it will get worse. Physicians will retire rather than adhere to government take-over. What good will the “right to healthcare” be then, when there are no physicians willing to treat you?

Thanks, Kelley, for your insights and analysis. You’ve given us all a lot to think about.

[Hat Tip: Hot Air]

Cavalcade of Risk #103: Call for submissions

My Wealth Builder hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 19th). Please remember 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.

Thursday, April 15, 2010

Mysterious Insurance Tricks

We've discussed both Stranger Owned Life Insurance and business-owned life insurance before, but this is a new twist altogether:

"The mother-in-law of a nationally known executive is found dead in her bathtub. She is fully clothed from an evening out at a martini bar, high heels still on her feet. The authorities rule she accidentally drowned."

Sure it sounds like the opening scene in an episode of Columbo, but it could happen.


Maybe: turns out that the owner and beneficiary of the policy was a local entrepreneur (and "companion" of the aforementioned MIL, Germaine Tomlinson) by the name of JB Carlson. According to Mr Carlson, he escorted the soon-to-be-late Ms Tomlinson home on the evening in question; she was apparently rather "tipsy" when he left her in her living room. How she got to the bathtub is anyone's guess.

Now about that policy: as mentioned, we've discussed before how important a funded buy-sell agreement can be to the continuity of a business. That was apparently Mr Carlson's take, as well, which is why he "legitimately bought the insurance on Ms. Tomlinson as a "key man" policy, sometimes taken out by a business to protect itself from financial damage if a top executive dies. Ms. Tomlinson introduced him to potential investors and told people she was a board member of his company."

[ed: in this case, "key man" is simply industry jargon, no disrespect is intended to the deceased]

If this was indeed the case, then it seems to me to be a legitimate use of the product. To go a step further, a $15 million policy on a septuagenarian would require some significant underwriting. I spoke with an underwriter at my favorite carrier, who told me that a case like this would require a lot of background work:

Obviously, there would be a complete physical, including an EKG and, based on the insured's age, perhaps a "mature assessment." There would be significant financial underwriting, as well, including credit checks and even financials from Mr Carlson's company. The writing agent would also have to supply a cover letter explaining the case.

Of course, this applies only if it was a new policy taken out by Mr Carlson on the life of Ms Tomlinson.

There's another possibility: Although this case involved a new policy, what if Ms Tomlinson had instead simply changed the beneficiary of an existing plan? "Insurable interest" is relevant only at time of issue; if the carrier received a properly executed change of beneficiary form, it would have to comply.

There may well be less here than meets the eye.

[Hat Tip: Teresa and Sara]

Health Wonk Review now online

Uber-wonk David Harlow hosts this week's collection of posts on health care polity and policy, and I don't mean metaphorically.

Wednesday, April 14, 2010

Obamacare Encourages Breastfeeding

You never know what you will find hidden in legislation. The folks at CNN found this gem on page 1239 of the health reform bill.

It requires employers to provide "a place, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public, which may be used by an employee to express breast milk." Only companies with less than 50 employees can claim it's an undue hardship.

You can't make this stuff up.

Pre-Tax Day Small Group (Good) News

Tuesday, April 13, 2010

Mid-April LinkFest: Gummint Edition

From our "Medicare Guy," Jack Cheevers, some interesting Medicare info:

■ First, Medicare spanks Aetna for its handling of drug benefits:

"Aetna was served with the intermediate sanction notice because it has continued to improperly administer the Medicare drug benefit in the plan’s national standalone prescription drug plan (PDP) and its 25 Medicare Advantage prescription drug (MA-PD) contracts. Approximately 400,000 Medicare beneficiaries are enrolled in the organization’s MA-PD plans and another 600,000 are enrolled in the Aetna PDP."

The problems cited include a failure to meet Medicare’s "transition requirements ... Improperly processing coverage determinations and expedited appeal requests in cases where delays would jeopardize the life or health of the enrollee .. [and] ... Failing to take timely and proper steps to ensure that enrollees are eligible for the Part D low-income subsidy."

The good news is that this is an "intermediate sanction;" presuming that Aetna cleans up its act, they'll be back on the prowl for new enrollees.

■ An updated Medicare website is now online:

"The improved Web site provides users with a summary of Medicare benefits, coverage options, rights and protections, and answers to the most frequently asked questions about Medicare."

Why not take it for a test-drive?

[Hat Tip: "CMS Guy" Jack Cheevers]

■ And from the Web, this link has up-to-date info on how one state is attempting to deal with ObamaCare©.

Do They or Don't They: Congress Screws Up (Again)?

Looks like John Edwards' prediction may have been spot on:

"When I'm president I'm going to say to members of Congress and members of my administration ... I'm going to use my power as president to take your health care away from you."

Ha! The joke's on Mr E:

"In a new report, the Congressional Research Service says [ObamaCare©] may have significant unintended consequences for the “personal health insurance coverage” of senators, representatives and their staff members.

For example, it says, the law may “remove members of Congress and Congressional staff” from their current coverage, in the Federal Employees Health Benefits Program, before any alternatives are available

In short, it looks like, at the very least, new CongressCritters and staff won't be able to sign onto the prized health insurance benefits package currently enjoyed by the Political Class. It may even be worse:

"It is unclear whether members of Congress and Congressional staff who are currently participating in F.E.H.B.P. may be able to retain this coverage."


How did this "sad" state of affairs come about? Simple: they didn't read what they wrote (gee, where have we heard that before?), and simply rammed it through, no matter what the consequences. And because karma apparently has a wicked sense of humor, these folks may actually be left with fewer choices than us common folks:

"The new exchanges do not have to be in operation until 2014. But because of a possible “drafting error,” the report says, Congress did not specify an effective date for the section excluding lawmakers from the existing program."

This seems to mean that they'll be booted off their current plan immediately, but since there's no "Exchange" or federal risk pool, they're going to have to turn to the tender mercies of the current health insurance system. While I haven't yet fielded any such calls, it's probably just a matter of time before I'm inundated with quote requests from hapless CongressCritters.

I'll let you know how that goes.

Grand Rounds is up...

Dr Emer hosts this week's collection of interesting medblog posts. A very cool layout makes it easily navigable, as well.

Monday, April 12, 2010

Georgia Opt's Out of Obamacare, Phase I

The HHS Sebelius has asked for a "show of hands" on those states that want to participate in a federal high risk pool for individuals who cannot qualify for health insurance in the open market. According to a memo just released by Georgia Insurance Commissioner John Oxendine, Georgia will not participate in a program that he believes will:

  • burden Georgia taxpayers, and

  • ultimately be declared unconstitutional

I am not a constitutional lawyer (or any other kind of lawyer) but it will be interesting to see who is right and what repercussions there are from this move.

MVNHS© Update: Mid-April Edition

This first item’s a two-fer, combining our previous posts on the Much Vaunted NHS©'s aversion to cleanliness with its predilection for political correctness:

"Muslim doctors and nurses are to be allowed for religious reasons to opt out of strict NHS dress codes introduced to prevent the spread of deadly hospital superbugs."

So, British patients risk potentially deadly infections so as not to offend the tender sensibilities of their Muslim caregivers. I'm sure that the families of the deceased will be grateful that their loved ones died for such a noble cause.

On the other hand, there's good news for British health care professionals. And by "professionals," we of course mean administrators:

"The pay of NHS bosses has soared by almost 7 per cent in a year - more than twice the rise for nurses."

I'm sure our own nurses will be grateful for whatever crumbs they're left with once ObamaCare©'s in full swing.

Sunday, April 11, 2010

Firedog Has Questions Too

Firedoglake has questions for PresBO about health insurance reform. We understand the Prez is busy, showing off his Nobel Prize secret decoder ring to the "What nukes? We ain't got no stinking nukes" crowd in Washington, so we will answer for him.

What specific mechanisms are in place to cut my health insurance and out of pocket expense costs?

Ha, ha, ha. We have no plan. We don't need a plan. All we have to do is convince the voters we have a plan.

What provisions are your administration to further cut the health insurance costs to businesses and the self employed?

Silly boy. Your premiums will go up but what you pay will go down thanks to tax credits. Of course we will never take away those credits.

Trust me.

Should we encourage our children to migrate to a less costly country? Canada, Australia, New Zealand, China or Thailand?

Of course. Muslim countries are preferable. Muslims would never own or use nukes.

Should we migrate to Europe? We would be eligible for benefits there.

Sounds great. The weather is nice there and just because Greece is in the dumper with their currency there is no need to worry since there are 15 other nations that support the Euro and they will be willing to bail out Greece. They have some secret plan called Grecian Formula to stabilize the economy.

Is there any plan, anywhere in Government, the House, the Senate, or any State, Democratic or Republican to meet or approach the cost levels of Health Insurance of my Canadian friends and family?

We plan to reduce the amount paid to docs and hospitals for Medicare patients. Once they get accustomed to treating Medicare patients for less money, they will agree to see all patients and charge less. Once this happens we will have a system just like the Canadians but without the cold weather.

Should I discontinue our health insurance and become a public charge?

Sounds like a plan.

We are going to introduce 15 million people to the wonderful world of welfare and the Medicaid system. That is just a start.

We hope to have everyone except those fat cat Wall Street types on welfare before the next presidential election.

How does Hawaii’s health insurance function?

Very well.

Instead of paper gowns you get a grass skirt. Shots are served up with fruit punch and a parasol.

Q&A With the Food Consumer

We recently ran across a site called the FoodConsumer and found a Q&A section on health insurance reform. Apparently it is not enough to provide information on nutrition and food safety, the folks at FC have taken on the task of being an expert on health insurance reform.

Here are a few of their questions and answers provided by the experts at InsureBlog. Compare our answer to those provided by FoodConsumer.

Will my premiums or costs go up because of health care reform bill?

Don't be silly!

Health insurance reform will lead to fewer health insurance companies willing to write new business. Fewer companies competing means the ones who survive will get bigger and bigger. Bigger companies means the administrative costs will go down. This alone could drop premiums by as much as 1%.

Math whizzes will realize there is a difference in a 1% drop in premium vs. the 3,000% drop promised by El Prez, but the other 2999% will come from elimination of waste, fraud and abuse.

In addition, carriers will have to provide free preventive care. Since the carriers have to make it available to policyholders at no charge, that means the doctors and labs won't be able to bill the carriers for their services.

That's how it becomes free just like Obamaman promised.

Companies will be prohibited from denying coverage for pre-existing conditions. That means that fit and trim people will subsidize those who are obese. Non-smokers will be treated just like chain smokers. People who decide to wait until they have a cancer diagnosis and are facing expensive treatment will be able to apply for health insurance so they don't have to worry about paying their bills.

To put this in food terms, this means people can buy lobster at the same price as catfish, or filet mignon at the same price as ground chuck.

Will the government take my choice of doctor away?

Of course not.

You can still see your doctor along with the other 32 million newly insured people, some of whom will also want to see your doc. About half of your doctors newly insured patients will be welfare recipients using their new Medicaid card. Even though Medicaid reimburses 30 - 40% less than insurance companies pay for the same services, your doctor will consider it a pleasure to see more people for less money.

It is their patriotic duty, just like paying taxes. I know this because VP O'Biden told us so.

What does the new law require the insurance companies to do with all the confusing forms?

The new forms will be very easy to understand. Here are some sample questions from a new application.

Are you really sick?

If no, you don't need health insurance. Come back when you get sick.

If yes, tell us how much your bill will be so we can start writing checks

Can you afford the premium?

If yes, you are making way too much money. Chill out. You don't need to work that hard.

If no, don't worry, be happy. The government will pay your premiums for you.

What consumer protections will I get this year?

Starting in September of this year, health insurance companies will have to offer coverage to children regardless of any pre-existing conditions. If your child is autistic, has severe asthma or psychological problems or even something serious like cancer or diabetes, companies will have to issue a policy that will cover all the treatment your child needs.

Prior to September they can send you packing. Those greedy bastards claim they can't make big fat profits if they cover thousands of dollars in medical treatment each month in exchange for a premium of less than $100 per month. After September the rules change. You child's $3,000 per month autism bills will be covered. No problem.

In terms food consumers can understand, now when you go to a grocery store they are allowed to charge you more for a vintage, imported French wine vs. a bottle of Ripple. After September both bottles will be the same price.

Thanks to the FoodConsumer for explaining health insurance reform in terms we can all understand.

Saturday, April 10, 2010

Is Medical Marijuana Covered by Obamacare?

Michael Schundler asks some good questions about the future of health insurance under Obamacare. This is just one of them.

Why do California residents have so many individuals that need marijuana for medicinal purposes? Should it be covered under their health care insurance?

Now, what was the question?

Hey man. Got any munchies?

Massachusetts Standoff

The standoff between insurance carriers and the Massachusetts regulators continues.

The carriers want rate hikes on health insurance premiums while the DOI expects them to continue to write new business at last years rates.

While insurers were told to have their revised rates ready by yesterday, Connector spokesman Dick Powers said none submitted updated rates by the end of the day. Because it takes time for the Connector to load and test new rates on its software, he said, they aren’t likely to be available until the middle of next week at the earliest. The Connector was created by the state’s 2006 health care law to help people obtain coverage.

Jamaica Plain software engineer David Heimann, who is out of work, was unable to purchase health insurance on the Connector site this week because state regulators ordered insurers to remove the rejected rates, which the companies had already posted. Heimann said he also couldn’t buy a policy from individual carriers yesterday.

This is what happens when government decides to dictate to private industry what they can and cannot do.

“We expect the carriers are going to supply consumers with accurate information about their prices, and that the prices are going to be based on April 2009 rates,’’ Anthony said.

“Carriers have a legal obligation to sell insurance, and no individual or small business should be denied coverage,’’ she said. “If we get complaints from consumers who are trying to buy insurance and they’ve been denied, we’ll investigate and take appropriate action.’’

A legal obligation to sell a product at a loss.


Just because Medicare, Medicaid, Social Security, et al can operate at a loss doesn't mean private industry can as well.

This scenario is merely a different verse of the same song that led to the mortgage meltdown where government told banks they had to make loans to anyone regardless of their ability to pay back the borrowed funds. We know how that one turned out.

Rethinking Mini-Meds

[Welcome Kaiser Health readers!]

I have a theory about how ObamaCare© will eventually come to "work" in the Real World:

Mini-med (aka "limited benefit" plans) will become "supplements" (much like MediGap plans) for folks sophisticated enough to use them that way.

Only suckers and those eligible for subsidies will buy the exorbitantly priced health insurance plans that will become the norm under ObamaCare©. Thoughtful people will do the math, concluding that paying the non-compliance tax is much cheaper than paying premiums. Mini-meds will be "just what the doctor ordered" for non-acute care. If and/or when there's a major claim, then time to buy a "real" medical plan (since they'll be guaranteed issue with no exclusions for pre-existing conditions).

There's another factor, as well. If (as seems likely) a significant number of physicians decide to "Go Galt," there'll be a substantial uptick in medical tourism. At least one mini-med vendor's offering has a built-in benefit to help pay for this; I suspect others will follow suit.

No one ever called Harry, Barry and Nan rocket surgeons.

Thursday, April 08, 2010

Health Insurance Exchange [Updated & Bumped]

[Originally posted 3/28/10 - please scroll down for update]

One of the more curious questions about health insurance reform addresses issues about the health insurance exchange that is supposed to be in place by 2014. The purpose of the exchange is to provide open information on plans, benefits and rates in an online format. Consumers will be able to review plan options and rates then pick a plan and sign up from the comfort of their home. At the Exchange, multiple health insurance companies will "compete" for their business, which is supposed to lead to lower premiums.

That's the line we have been fed. The truth is, given the constraints placed on carriers who will be allowed to compete, what we will get will bear little resemblance to the final product.

HR 3590, also known as the Patient Protection and Affordable Care Act can be viewed online for those who want to breeze through the 906 page document. This PDF version is in searchable format which makes it easy to find sections on provisions such as the Exchange.

In truth, the general structure of the exchange is no different from what consumers can find online now at a number of sites. Notable differences in the Exchange vs. current sites include the following.

FUNDING.—There is hereby appropriated to the Secretary, out of any funds in the Treasury not otherwise appropriated, $30,000,000 for the first fiscal year for which this section applies to carry out this section. Such amount shall remain available without fiscal year limitation.

This seems to indicate that, if the $30 million is not enough the Treasury can print more money to fund it as needed. Ongoing expenses after the first fiscal year use the same language.

The Exchange will be a governmental agency or a nonprofit entity.

It is unclear if the participating carriers must be nonprofit entities or not. If so, the number of carriers will be limited. In Georgia the bulk of the nonprofit organizations offering health insurance are regional HMO's.

The idea of the exchange is to promote competition and introduce lower cost plans. The truth is, there will be fewer plans, less competition and higher premiums. A few states already have their own version of Obamacare and in each of those states there are only a handful of carriers offering a handful of plans and premiums in those states are outrageously high.

If you like, go online and compare health insurance rates and benefits in your own state to places like New York, Maine, Massachusetts and Vermont.

Yes, that Massachusetts.

The one that has Romneycare and also sent a Republican to Washington to fill a seat held by the Kennedy family for over 50 years.

Of course if you buy a plan through the Exchange you will be entitled to a taxpayer subsidy if your family income is less than 400% of the FPL (federal poverty level).

It will be interesting to see how long the individual subsidies stay in place. Subsidies for small employers that do not currently offer group health insurance, but decide to do so will receive subsidies but those subsidies are slated to end in 2015. What happens when the subsidies stop?

I probably don't have to draw a picture . . .

As mentioned earlier, the current format of online health insurance exchanges are not terribly efficient. The costs of running such operations is quite high and their customer service staff are usually low paid novices.

If the new Exchange is staffed by government employees the pay scale, and benefit structure will far exceed the pay and benefits for existing exchanges. As for the quality of the staff, think of any other government run entity and you have your answer.

Policy's sold by current exchanges have very high acquisition costs vs. those that are initiated by independent agents. Retention rates are also much lower than agent driven blocks of business which makes these ventures less profitable for carriers.

There is no reason to believe the new Exchange will be any different.

So here is a thumbnail sketch of the health insurance Exchange of the future. Online offerings of a handful of high priced products from a limited number of carriers. If these Exchanges are staffed by government employees the ability to interact with a human will be limited to non-holiday weekdays during regular business hours only. Service will be comparable to calling the Department of Motor Vehicles, Social Security Administration or the U. S. Postal Service.

Will someone explain to me why folks are looking forward to this brave new world of Obamacare?


"The Massachusetts Division of Insurance recently disapproved many of the premium rates proposed by insurers. The decision does not apply to CeltiCare.

The ruling pertains to plans effective April 1, 2010 and later. It also applies to all distribution channels, including the Health Connector.

With the exception of CeltiCare, insurers must withdraw their Commonwealth Choice plans until they recalculate their rates to comply with the ruling. CeltiCare offers coverage in the Greater Boston area

Think that's scary?

How's this:

"Insurers are required by law to issue and renew policies for small employer groups and individuals and families."

To which I would reply "or else what?"

Stay tuned.

Bob's response.

Well, if you have to ask . . .

Apparently there are fines for non-compliance.

Fines, or lose money writing at last years rates. Hmmmmm, tough choice.

Mandate or No Mandate?

Well, Rep. Debbie Wasserman Schultz (Duh.-Fla.) says that "the new health care law she voted for last month does not mandate that individuals buy health insurance, despite language in the law that plainly says otherwise."

Who ya gonna believe, Debbie or your lyin' eyes?

Apparenty, some 36% of the states (or, if you're a fan of the President's, 31.5%) think otherwise:

"The joint lawsuit led by Florida and now grouping 18 states was filed on March 23 ... It claims the sweeping reform of the $2.5 trillion U.S. healthcare system ... violates state-government rights in the U.S. Constitution."

To be fair, they're not suing just because of the mandate, but that is certainly a major part of the argument. Or maybe they just aren't paying attention to Ms Wasserman-Schultz.

[Hat Tip: HotAir]