I guess not...The Outlook for Major Health Care Programs and Social Security
Growth in spending on health care programs remains the central fiscal challenge facing the nation. CBO projects that if current laws do not change, federal spending on major mandatory health care programs will grow from roughly 5 percent of GDP today to about 10 percent in 2035 and will continue to increase thereafter. (Mandatory programs are those that do not require annual appropriations; the major mandatory health care programs include Medicare, Medicaid, the Children’s Health Insurance Program, and the subsidies that will be provided through the insurance exchanges that will be established as a result of the new health care legislation.)
That estimate includes all of the effects of the recently enacted health care legislation. Although, CBO expects the legislation to reduce federal budget deficits over the first 10 years and in subsequent decades (through its effects on both revenues and spending), it is expected to increase federal spending in the next 10 years and for most of the following decade; by 2030, however, that legislation will slightly reduce federal spending for health care if all of its provisions are fully implemented, CBO projects. (The estimates for the health care legislation that are used in this report are unchanged from the ones that CBO and the staff of the Joint Committee on Taxation published in March, when the legislation was being considered.)
Under current law, spending on Social Security is also projected to rise over time as a share of GDP, albeit much less dramatically—from 5 percent to 6 percent of GDP. (Later this week, CBO will release a report on a number of different policy options for changing Social Security.)
All told, CBO projects, the aging of the population and the rising cost of health care will cause spending on the major mandatory health care programs and Social Security to grow from roughly 10 percent of GDP today to about 16 percent of GDP 25 years from now if current laws are not changed. (By comparison, spending on all of the federal government’s programs and activities, excluding interest payments on debt, has averaged 18.5 percent of GDP over the past 40 years.)
Wednesday, June 30, 2010
Straight from the Congressional Budget Office...
Wasn't this supposed to save us money???
Grandpas and Teeth
Well, "grandfathering," anyway. A recent Anthem email included their take on how plans may remain eligible under ObamaCare©:
■ "In general, a group health plan or group or individual health insurance coverage is considered "grandfathered" if it had members enrolled before March 23, 2010 ... [but] new policies sold in the group or individual market after March 23, 2010, are not grandfathered, even if the product was offered before March 23, 2010."
Ooops. Better hope your group plan was in place in March. All you new businesses, though (and there probably were some, despite the dismal Obaconomy), are outta luck:
■ "If a plan made changes before the interim final rules ... those changes would impact the plan's grandfathered status, the plan has a grace period within which it can revoke or modify these changes to maintain its grandfathered status."
Rotsa ruck with that: what carrier will let you go back and retroactively change your plan?
So what will trigger that dreaded "no grandfathering for YOU!" outcome?
■ "Increasing coinsurance by any amount above the level at which it was set on March 23, 2010"
So if your employer raised the group plan's co-insurance limits to offset the last renewal, or you did that with your individual plan, then you're SOL. And this may be a bigger problem than you think: how many employers tweaked their plans this way before they had a clue that this would screw them up going forward? There's also a litany of other plan changes, based on obscure formulae that could only come from Poppa Washington, that could trip you up.
The bottom line is: Most folks won't be able to keep the plan they have.
Of course, medical insurance is only one piece of the benefits pie. A lot of employers also offer dental coverage, which is not subject to the draconian provisions we've been discussing. In Ohio (and other states), new rules have been promulgated for the gorup health market to make sure everyone's on the same Obamapage. That means, for example, that your 26 year old "child" is still eligible to stay on your group health plan, but not necessarily the dental cover.
From Superior Dental Care, we learn that Ohio's "new regulation applies only to medical insurance carriers; dental is not included." [emphasis in original] So unless you're a full-time student or an "IRS dependent," you're off the dental at age 19 (although groups may choose to set that upper limit lower). It's nice to see at least one segment of the industry that refuses to cave.
■ "In general, a group health plan or group or individual health insurance coverage is considered "grandfathered" if it had members enrolled before March 23, 2010 ... [but] new policies sold in the group or individual market after March 23, 2010, are not grandfathered, even if the product was offered before March 23, 2010."
Ooops. Better hope your group plan was in place in March. All you new businesses, though (and there probably were some, despite the dismal Obaconomy), are outta luck:
■ "If a plan made changes before the interim final rules ... those changes would impact the plan's grandfathered status, the plan has a grace period within which it can revoke or modify these changes to maintain its grandfathered status."
Rotsa ruck with that: what carrier will let you go back and retroactively change your plan?
So what will trigger that dreaded "no grandfathering for YOU!" outcome?
■ "Increasing coinsurance by any amount above the level at which it was set on March 23, 2010"
So if your employer raised the group plan's co-insurance limits to offset the last renewal, or you did that with your individual plan, then you're SOL. And this may be a bigger problem than you think: how many employers tweaked their plans this way before they had a clue that this would screw them up going forward? There's also a litany of other plan changes, based on obscure formulae that could only come from Poppa Washington, that could trip you up.
The bottom line is: Most folks won't be able to keep the plan they have.
Of course, medical insurance is only one piece of the benefits pie. A lot of employers also offer dental coverage, which is not subject to the draconian provisions we've been discussing. In Ohio (and other states), new rules have been promulgated for the gorup health market to make sure everyone's on the same Obamapage. That means, for example, that your 26 year old "child" is still eligible to stay on your group health plan, but not necessarily the dental cover.
From Superior Dental Care, we learn that Ohio's "new regulation applies only to medical insurance carriers; dental is not included." [emphasis in original] So unless you're a full-time student or an "IRS dependent," you're off the dental at age 19 (although groups may choose to set that upper limit lower). It's nice to see at least one segment of the industry that refuses to cave.
Cavalcade of Risk #108 now online
Wenchy hosts this week's HOT roundup of risk-related posts. Do check it out!
Crediting Anthem?
No, but they're certainly crediting their policyholders (although not necessarily by choice):
"Some Anthem Blue Cross and Blue Shield members in Ohio will receive a credit and a premium reduction."
According to the article, some 30,000 Ohio policyholders are affected, and can expect to see a $20 or so credit on their September premium notice. I'm a little confused about the math here, though: my calculator says 30 thousand members times $20 a pop comes to $600,000. But the article says that the "total amount of adjustments is about $6 million." Apparently, that includes legitimate rate increases that Anthem has agreed to forego (at least for now).
Which still leaves me wondering about this release from the Ohio Department of Insurance [via email]:
"Ohio Department of Insurance Director Mary Jo Hudson ... announced that more than 45,000 Ohioans will receive a refund or credit from ... Anthem, due to Anthem charging consumer rates that were not consistent with the rates filed with the Ohio Department of Insurance." [emphasis added]
The carrier apparently cooperated with the Department, and has agreed to a Consent Order (available here) resolving the issue to the Department’s satisfaction.
According to the press release, the overcharge affected pretty much every kind of individual health insurance plan Anthem currently sells. If you had an individual plan with Anthem in the past year or so, it'd be worthwhile calling them to see if you're eligible for the refund.
[Hat Tips: FoIBs Rick B and Holly R]
"Some Anthem Blue Cross and Blue Shield members in Ohio will receive a credit and a premium reduction."
According to the article, some 30,000 Ohio policyholders are affected, and can expect to see a $20 or so credit on their September premium notice. I'm a little confused about the math here, though: my calculator says 30 thousand members times $20 a pop comes to $600,000. But the article says that the "total amount of adjustments is about $6 million." Apparently, that includes legitimate rate increases that Anthem has agreed to forego (at least for now).
Which still leaves me wondering about this release from the Ohio Department of Insurance [via email]:
"Ohio Department of Insurance Director Mary Jo Hudson ... announced that more than 45,000 Ohioans will receive a refund or credit from ... Anthem, due to Anthem charging consumer rates that were not consistent with the rates filed with the Ohio Department of Insurance." [emphasis added]
The carrier apparently cooperated with the Department, and has agreed to a Consent Order (available here) resolving the issue to the Department’s satisfaction.
According to the press release, the overcharge affected pretty much every kind of individual health insurance plan Anthem currently sells. If you had an individual plan with Anthem in the past year or so, it'd be worthwhile calling them to see if you're eligible for the refund.
[Hat Tips: FoIBs Rick B and Holly R]
Tuesday, June 29, 2010
What a TERRP
Both Humana and United HealthCare have alerted me (via email) that the new Temporary Early Retiree Reinsurance Program (TERRP) is up and running. Another little under-the-radar ObamaCare© nugget, this one funnels some $5 billion to insurance carriers, via early retirees participating in their erstwhile employers' group health insurance plans.
As a side note, ObamaCare©'s certainly turning out to be quite the cash cow for those evil, greedy, heartless insurance carriers, isn't it? Funny how that happened.
To be eligible, these lucky first adopters, er...retirees must be between 55 and 64 and not Medicare-eligible. The subsidy also includes their spouses (and surviving spouses) as well as dependents.
I particularly love UHC's spin:
"The objective of the legislation addresses erosion of benefits for early retirees through making health benefits ... More affordable to both members and employers ... [and] Accessible to more Americans than they would otherwise be without this program."
How nice. Sure it wasn't just to keep those premium dollars flowing to UHC, et al?
Just askin'.
As a side note, ObamaCare©'s certainly turning out to be quite the cash cow for those evil, greedy, heartless insurance carriers, isn't it? Funny how that happened.
To be eligible, these lucky first adopters, er...retirees must be between 55 and 64 and not Medicare-eligible. The subsidy also includes their spouses (and surviving spouses) as well as dependents.
I particularly love UHC's spin:
"The objective of the legislation addresses erosion of benefits for early retirees through making health benefits ... More affordable to both members and employers ... [and] Accessible to more Americans than they would otherwise be without this program."
How nice. Sure it wasn't just to keep those premium dollars flowing to UHC, et al?
Just askin'.
Grand Rounds: Medical Education edition
Dr Elaine Schattner (no, wrong Shatner) presents this week's Grand Rounds. It's short, sweet and focused like a laser-pointer. There's some great humor interspersed with remarkable gravitas.
Do check it out!
Do check it out!
Monday, June 28, 2010
Dead Wrong
From personal experience, I can attest that seeing a loved one die from an incurable illness is no picnic. And the ethics of "end-of-life care" are beyond the purview of this blog. But I am also a big believer in choice, and in honesty when being presented different options.
One of my major issues with ObamaCare© is the implementation of death panels; when one's choices become delegated to nameless, faceless, unaccountable bureaucrats, then one ceases to actually have any choice. But it's more insidious than just "passing the bill:" it's also the willing complicity of our mass media in perpetrating that fraud.
To wit:
"The doctors finally let Rosaria Vandenberg go home ... That precious time at home could have come sooner if the family had known how to talk about alternatives to aggressive treatment."
Agreed. One of the major benefits of consumer-centric health care is the removal of that "wall" between patient and provider, empowering the consumer of health care to understand the plethora and impact of various choices.
But that's not the purpose of the Yahoo piece. This is:
"Americans increasingly are treated to death, spending more time in hospitals in their final days, trying last-ditch treatments that often buy only weeks of time, and racking up bills that have made medical care a leading cause of bankruptcies."
That's sleight of hand that would make Houdini blush. The fact is, we spend more because medical care costs more. The sleight of hand comes from the easy - and entirely deceptive - segue into a discussion of the economics of that care. Once it becomes "all about the money," then the moral choice is no longer relevant. And when it's about a bureaucrat deciding whether or not your 32 year old wife may even have the choice of these treatments, then it's even worse.
And let's dispense - again - with the long-since-debunked canard about "medical care [as] a leading cause of bankruptcies." This has never been true, yet it's the 'go-to justification' for everything from withholding treatment to passing ObamaCare© itself. It's also another way to inject economics into a debate about life and death. Are financial considerations relevant? Of course they are, but they are not the deal-maker or -breaker here.
At least not yet.
One of my major issues with ObamaCare© is the implementation of death panels; when one's choices become delegated to nameless, faceless, unaccountable bureaucrats, then one ceases to actually have any choice. But it's more insidious than just "passing the bill:" it's also the willing complicity of our mass media in perpetrating that fraud.
To wit:
"The doctors finally let Rosaria Vandenberg go home ... That precious time at home could have come sooner if the family had known how to talk about alternatives to aggressive treatment."
Agreed. One of the major benefits of consumer-centric health care is the removal of that "wall" between patient and provider, empowering the consumer of health care to understand the plethora and impact of various choices.
But that's not the purpose of the Yahoo piece. This is:
"Americans increasingly are treated to death, spending more time in hospitals in their final days, trying last-ditch treatments that often buy only weeks of time, and racking up bills that have made medical care a leading cause of bankruptcies."
That's sleight of hand that would make Houdini blush. The fact is, we spend more because medical care costs more. The sleight of hand comes from the easy - and entirely deceptive - segue into a discussion of the economics of that care. Once it becomes "all about the money," then the moral choice is no longer relevant. And when it's about a bureaucrat deciding whether or not your 32 year old wife may even have the choice of these treatments, then it's even worse.
And let's dispense - again - with the long-since-debunked canard about "medical care [as] a leading cause of bankruptcies." This has never been true, yet it's the 'go-to justification' for everything from withholding treatment to passing ObamaCare© itself. It's also another way to inject economics into a debate about life and death. Are financial considerations relevant? Of course they are, but they are not the deal-maker or -breaker here.
At least not yet.
Friday, June 25, 2010
Deadlines, Shmeadlines [UPDATED!]
Have you seen the specs for the new ObamaPool(s)?
No?
Well, don't feel bad: neither has anyone else, despite the fact that they're required to be up and running in less than a month.
What's that?
You need health care, and you were told you'd have it "any day now?"
You mean like no exclusions for pre-existing conditions for folks under 19? Sorry, but that doesn't really take effect right away.
What about that pesky lifetime limit on expenses? Certainly that's going "live" in September, right? Nope. Sorry!
Well, of course the rules on "Arbitrary Rescissions of Insurance Coverage" (which are really no different than those currently in effect in all 57 states) will become "the law of the land" come September 23rd, right? Um, how do I tell you this? In a word: No.
The little-known fact is that all these rules (and a few more besides) don't actually take effect on September 23rd. As healthcare giant Cigna reminds us via email:
"All provisions are effective on the first plan anniversary on or after 9/23/2010" [emphasis added]
But I thought "People are dying, we have to pass something - anything - right now!"
Ahem.
BREAKING: Thanks to FoIB Rick B, we've just learned that the State of Ohio "plans to designate Medical Mutual of Ohio as the non-profit entity that will operate the temporary high risk pool program for Ohioans, as created through the federal Patient Protection and Affordable Care Act, in order to provide uninsured people with pre-existing conditions the opportunity to purchase more affordable health insurance."
They'll have about $150 million top play with [ed: look for that to be gone toot-sweet]; no word yet on benefits or premium structure.
They do provide this handy number for Bereft Buckeyes to call: 1-800-686-1526, and have set up a handy website, as well.
Congratulations to Medical Mutual!
[ed: or is that condolences? Time will tell]
No?
Well, don't feel bad: neither has anyone else, despite the fact that they're required to be up and running in less than a month.
What's that?
You need health care, and you were told you'd have it "any day now?"
You mean like no exclusions for pre-existing conditions for folks under 19? Sorry, but that doesn't really take effect right away.
What about that pesky lifetime limit on expenses? Certainly that's going "live" in September, right? Nope. Sorry!
Well, of course the rules on "Arbitrary Rescissions of Insurance Coverage" (which are really no different than those currently in effect in all 57 states) will become "the law of the land" come September 23rd, right? Um, how do I tell you this? In a word: No.
The little-known fact is that all these rules (and a few more besides) don't actually take effect on September 23rd. As healthcare giant Cigna reminds us via email:
"All provisions are effective on the first plan anniversary on or after 9/23/2010" [emphasis added]
But I thought "People are dying, we have to pass something - anything - right now!"
Ahem.
BREAKING: Thanks to FoIB Rick B, we've just learned that the State of Ohio "plans to designate Medical Mutual of Ohio as the non-profit entity that will operate the temporary high risk pool program for Ohioans, as created through the federal Patient Protection and Affordable Care Act, in order to provide uninsured people with pre-existing conditions the opportunity to purchase more affordable health insurance."
They'll have about $150 million top play with [ed: look for that to be gone toot-sweet]; no word yet on benefits or premium structure.
They do provide this handy number for Bereft Buckeyes to call: 1-800-686-1526, and have set up a handy website, as well.
Congratulations to Medical Mutual!
[ed: or is that condolences? Time will tell]
Risk Management: Is Your Business Prepared? - Wrap Up [UPDATED & BUMPED]
Originally posted 6/23/10:
As noted yesterday, the SBA is full-on regarding disaster preparedness. I attended the afternoon webinar, and was just blown away by how professional, yet accessible, it was. The moderator, Bob Boyd, did a great job of keeping our interest (although I wish he'd included some more real-life examples). The whole presentation was centered on this simple but comprehensive "to do" list:
As noted yesterday, the SBA is full-on regarding disaster preparedness. I attended the afternoon webinar, and was just blown away by how professional, yet accessible, it was. The moderator, Bob Boyd, did a great job of keeping our interest (although I wish he'd included some more real-life examples). The whole presentation was centered on this simple but comprehensive "to do" list:
The folks at SBA have promised us a link to the archived version of the program, and we'll post that when it comes in. In the meantime, I can recommend the Prepare My Business site unconditionally.[UPDATE: The presentation is available in .pdf form here; the video is here]
Thursday, June 24, 2010
"Doc Fix" Fixed?
It would appear so, at least for now:
"The House ... approved a six-month plan to prevent a steep cut in doctors’ fees paid by Medicare, agreeing to a short-term solution that Speaker Nancy Pelosi called “totally inadequate” but said the House had decided to adopt after concluding that the Senate was hopelessly gridlocked and could do no better."
"[A] six-month plan."
AKA "Kickin' it down the road."
Or, as our resident Medical Office Manager has previously noted, physicians' "revenue cycle has been a roller coaster this year; I cannot count on revenue coming in in a timely manner."
Ho hum.
UPDATE: In the comments, Bob points out that, according to the American Medical Association (which represents almost 17% of physicians!):
"Additional results from our survey find that even with a temporary action, physicians say they will be forced to limit the number of Medicare patients they can treat. Our new survey shows that if Congress enacts a short-term delay of four to seven months, 54 percent of physicians say they will limit the number of Medicare patients they can treat. Even if Congress enacts a three to five year delay of the cut, 48 percent will limit the number of Medicare patients they treat."
"The House ... approved a six-month plan to prevent a steep cut in doctors’ fees paid by Medicare, agreeing to a short-term solution that Speaker Nancy Pelosi called “totally inadequate” but said the House had decided to adopt after concluding that the Senate was hopelessly gridlocked and could do no better."
"[A] six-month plan."
AKA "Kickin' it down the road."
Or, as our resident Medical Office Manager has previously noted, physicians' "revenue cycle has been a roller coaster this year; I cannot count on revenue coming in in a timely manner."
Ho hum.
UPDATE: In the comments, Bob points out that, according to the American Medical Association (which represents almost 17% of physicians!):
"Additional results from our survey find that even with a temporary action, physicians say they will be forced to limit the number of Medicare patients they can treat. Our new survey shows that if Congress enacts a short-term delay of four to seven months, 54 percent of physicians say they will limit the number of Medicare patients they can treat. Even if Congress enacts a three to five year delay of the cut, 48 percent will limit the number of Medicare patients they treat."
Cavalcade of Risk #108: Call for submissions
Wenchy hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 28th). 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.
■ 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.
Lexis-Nexis Top Blogs Reboot
For the past several years, we've been featured as one of the Lexis-Nexis Top 50 Insurance Blogs. This is quite an honor, and we've proudly displayed the "badge" proclaiming our status. The folks in charge are in the process of refreshing that list, and we've been nominated for "re-election." As part of the process, they're asking for input from the blogosphere.
We would really appreciate our readers letting Lexis-Nexis know why they find InsureBlog worthy of remaining in that Top 50. To do that, you'll need to leave a comment; it's easy and only takes a minute. First, click here to logon to your free web center account (don't worry, it's free) Then, scroll . . . all . . . the . . . way . . . down to the bottom of the page, fill in your name, type your comment in the box and press "Add".
The comments period ends on July 6.
Thanks so much, and we'll let you know how things go.
We would really appreciate our readers letting Lexis-Nexis know why they find InsureBlog worthy of remaining in that Top 50. To do that, you'll need to leave a comment; it's easy and only takes a minute. First, click here to logon to your free web center account (don't worry, it's free) Then, scroll . . . all . . . the . . . way . . . down to the bottom of the page, fill in your name, type your comment in the box and press "Add".
The comments period ends on July 6.
Thanks so much, and we'll let you know how things go.
Health Wonk Review - Research edition: Now online
Brad Wright does a great job presenting the best posts on health care policy and polity (and I'm not just saying that because we snagged the coveted top spot). The focus this time is on research, from "the medical home" to defensive medicine, ObamaCare© to Rwanda.
Recommended.
Recommended.
Wednesday, June 23, 2010
One of ours wins...
Just a quick note to mention that Tim Scott won his party's primary fight in South carolina last night. He's running for Congress, and he's one of ours:
"A graduate of Stall High School and Charleston Southern University, he has risen to success in the insurance business ..." [emphasis added]
It appears that he represents Allstate, but we won't hold that against him [ed: we kid!], and is a Certified Insurance Counselor (CIC).
Mazel Tov, Tim!
"A graduate of Stall High School and Charleston Southern University, he has risen to success in the insurance business ..." [emphasis added]
It appears that he represents Allstate, but we won't hold that against him [ed: we kid!], and is a Certified Insurance Counselor (CIC).
Mazel Tov, Tim!
Tuesday, June 22, 2010
Risk Management: Is Your Business Prepared?
Did you know that some 40 to 60 percent of small businesses never recover from a disaster, and must close their doors? But it doesn't have to be that way:
"Disaster planning and preparedness can be your lifeline to staying in business. With proper education, planning, testing and disaster assistance, you will be able to stay in business through any interruption and beyond."
Says who?
Says the Small Business Administration, which has a brand new online resource that can help you identify and manage catastrophic risks. Called 'Prepare My Business,' this site is easy to navigate and chock full of tools, educational materials and helpful links that could turn your potentially devastating loss into a business that weathers the most violent of storms.
Think it can't happen to you?
Guess again:
In fact, the SBA is presenting a webinar on this critical subject this afternoon (2PM Eastern, June 22). Click here for details and to register.
In the meantime, head over to Prepare My Business to learn that:
■ Smaller disasters, such as server failure, burst pipes and fires however happen every day. Companies often prepare for the worst but forget the everyday challenges, which can be just as crippling.
■ Testing your continuity plan is the best way to ensure that your business will remain in operation no matter what.
■ There are many resources available, including information to help you prepare ahead of time, free sample emergency plans, business preparedness checklists, and templates.
And much, much more.
[See Part 2 for a report on the webinar]
"Disaster planning and preparedness can be your lifeline to staying in business. With proper education, planning, testing and disaster assistance, you will be able to stay in business through any interruption and beyond."
Says who?
Says the Small Business Administration, which has a brand new online resource that can help you identify and manage catastrophic risks. Called 'Prepare My Business,' this site is easy to navigate and chock full of tools, educational materials and helpful links that could turn your potentially devastating loss into a business that weathers the most violent of storms.
Think it can't happen to you?
Guess again:
In fact, the SBA is presenting a webinar on this critical subject this afternoon (2PM Eastern, June 22). Click here for details and to register.
In the meantime, head over to Prepare My Business to learn that:
■ Smaller disasters, such as server failure, burst pipes and fires however happen every day. Companies often prepare for the worst but forget the everyday challenges, which can be just as crippling.
■ Testing your continuity plan is the best way to ensure that your business will remain in operation no matter what.
■ There are many resources available, including information to help you prepare ahead of time, free sample emergency plans, business preparedness checklists, and templates.
And much, much more.
[See Part 2 for a report on the webinar]
[Hat Tips: Josh Pope and Carol Chastang and Sandy Buzzard]
STOLI on ice
Years ago, we used to sell a type of policy called Single Premium Whole Life (SPWL). It was an interesting product, used primarily for estate planning, with some amazing tax benefits built in. The guaranteed, tax-free nature of the cash build-up was also attractive to investor types, who ultimately sold many more of these plans to their clients than we "regular" insurance guys ever did. So much so, in fact, that SPWL went from "outstanding but limited purpose" life insurance plan to "abused tax shelter," and gave us terms like TAMRA and MEC (but that's another post).
Once again, the folks that insist on conflating a risk management tool (life insurance) with pie-in-the-sky investment schemes have managed to screw up another useful insurance product, but this time the result may be even worse. As we've noted here time and again, Stranger Owned Life Insurance can be a helpful way for folks to take care of, say, business continuation and charitable bequests (to name just two). Unfortunately, they can also be used for illegal purposes (like, say, murder) and risky fast-buck investment schemes.
It's that latter that now threatens the very nature of how life insurance may be bought - and owned - from now on. Life insurance, especially the permanent variety (eg whole and universal life) have always been considered property, much like owning a home. The cash value is exactly the same as equity, with a fixed cost and specific tax benefits.
But there are also rules about how these are applied.
First, we need to address the concept of "insurable interest." This phrase has taken on a lot of new connotations of late, but it is (or at least should be) relevant only at the point of initial sale. That is, someone (and this could be a person, organization or business) must risk a demonstrable loss were one to pass away. Typically, this would be a spouse or business partner, perhaps one's alma mater, that kind of thing. When AIDS was making front page news, a lot of folks looked to sell their life insurance policies to fund treatment or lifestyle enhancements (i.e. viaticals). All of these uses have some benefit to society as a whole.
As the real estate and stock markets have tanked over the recent past, sophisticated financial vehicles like hedge funds began looking for "alternatives." And they found one:
"In a frenzy that bears some similarities to the subprime-mortgage debacle, billions of dollars of stranger-originated life insurance was sold to senior citizens between 2004 and 2008 with the intention of selling the policies to investors. The investors thought they spotted an opportunity in policies that seemed underpriced; some funds accumulated hundreds of such policies."
This wasn't just seniors selling decades-old policies, but agents targeting a potentially lucrative - but vulnerable - niche. Some agents made literally millions of dollars enticing (cajoling?) seniors and others to buy life insurance policies which were then sold to these investor groups. The abuse really grew from two practices:
The first is that many insurance companies really didn't practice aggressive, thorough financial underwriting, instead focusing primarily (perhaps exclusively) on the health of the proposed insured. The second was that agents knew this, and often engaged in blatant misrepresentation:
"... Ohio regulators revoked the license of an agent who allegedly promised a 74-year-old Cleveland woman $8,000 to let him take out $9 million of insurance on her life. The application to Prudential Financial Inc. indicated she had a net worth of $12.5 million. In reality, she and her husband had a net worth of just $2,000 and combined monthly income of $950 ..."
One could argue that the carriers should have been more diligent, but it seems to me that these agents were clever (and motivated) enough to dodge mist obstacles that might be thrown in their way. And of course the funds (investors) didn't care: as long as the policy was past the two year "contestability period" they had no reason to be concerned. Now, of course, carriers are fighting back, arguing that this practice interferes with their risk evaluation methods, and in fact should void the contract outright.
Are they right?
Well, at least a few state Departments of Insurance think so, and are moving against the agents who arranged the sales, and who thought that forging insureds' signatures (for example) was a legitimate way to "move product." The end result may be a redefining of "insurable interest" (and not for the better), and new bureaucratic "safeguards" that make buying life insurance even more onerous.
Once again, the folks that insist on conflating a risk management tool (life insurance) with pie-in-the-sky investment schemes have managed to screw up another useful insurance product, but this time the result may be even worse. As we've noted here time and again, Stranger Owned Life Insurance can be a helpful way for folks to take care of, say, business continuation and charitable bequests (to name just two). Unfortunately, they can also be used for illegal purposes (like, say, murder) and risky fast-buck investment schemes.
It's that latter that now threatens the very nature of how life insurance may be bought - and owned - from now on. Life insurance, especially the permanent variety (eg whole and universal life) have always been considered property, much like owning a home. The cash value is exactly the same as equity, with a fixed cost and specific tax benefits.
But there are also rules about how these are applied.
First, we need to address the concept of "insurable interest." This phrase has taken on a lot of new connotations of late, but it is (or at least should be) relevant only at the point of initial sale. That is, someone (and this could be a person, organization or business) must risk a demonstrable loss were one to pass away. Typically, this would be a spouse or business partner, perhaps one's alma mater, that kind of thing. When AIDS was making front page news, a lot of folks looked to sell their life insurance policies to fund treatment or lifestyle enhancements (i.e. viaticals). All of these uses have some benefit to society as a whole.
As the real estate and stock markets have tanked over the recent past, sophisticated financial vehicles like hedge funds began looking for "alternatives." And they found one:
"In a frenzy that bears some similarities to the subprime-mortgage debacle, billions of dollars of stranger-originated life insurance was sold to senior citizens between 2004 and 2008 with the intention of selling the policies to investors. The investors thought they spotted an opportunity in policies that seemed underpriced; some funds accumulated hundreds of such policies."
This wasn't just seniors selling decades-old policies, but agents targeting a potentially lucrative - but vulnerable - niche. Some agents made literally millions of dollars enticing (cajoling?) seniors and others to buy life insurance policies which were then sold to these investor groups. The abuse really grew from two practices:
The first is that many insurance companies really didn't practice aggressive, thorough financial underwriting, instead focusing primarily (perhaps exclusively) on the health of the proposed insured. The second was that agents knew this, and often engaged in blatant misrepresentation:
"... Ohio regulators revoked the license of an agent who allegedly promised a 74-year-old Cleveland woman $8,000 to let him take out $9 million of insurance on her life. The application to Prudential Financial Inc. indicated she had a net worth of $12.5 million. In reality, she and her husband had a net worth of just $2,000 and combined monthly income of $950 ..."
One could argue that the carriers should have been more diligent, but it seems to me that these agents were clever (and motivated) enough to dodge mist obstacles that might be thrown in their way. And of course the funds (investors) didn't care: as long as the policy was past the two year "contestability period" they had no reason to be concerned. Now, of course, carriers are fighting back, arguing that this practice interferes with their risk evaluation methods, and in fact should void the contract outright.
Are they right?
Well, at least a few state Departments of Insurance think so, and are moving against the agents who arranged the sales, and who thought that forging insureds' signatures (for example) was a legitimate way to "move product." The end result may be a redefining of "insurable interest" (and not for the better), and new bureaucratic "safeguards" that make buying life insurance even more onerous.
Grand Rounds: Customer Service edition is up
Deb Gordon hosts this week's roundup of medblog posts, focusing on customer service issues. Very interesting.
Monday, June 21, 2010
Burying Grandpa: The TRUTH about keeping your insurance
One of the most oft-repeated lies, er, promises in the run-up to ObamaCare© was that, "if you like your plan, you can keep your plan."
Don't believe me? Well, here's PresBo himself, on the record, a scant 3 months ago:
[ed: skip to 5:41 for the money-quote]
As we now know, of course, this is (and always was) untrue; this morning, benefits maven Ceridian emailed some interesting analysis from Jim O’Connell, their legislative affairs consultant:
"The guidance states, in summary, that employer-sponsored health plans will lose their grandfather status if they significantly cut benefits or significantly increase out-of-pocket spending for employees ... What remains to be seen, however, is what losing grandfather status means to employers in terms of how much their costs would increase by having to comply with additional mandates in the law."
As we've noted before, it's more likely that employers will opt to simply pay the nominal fine. The reality, of course, is simpler still: regular readers know that employers don't pay for health insurance now, so the true costs of any increases are going to be borne by their employees regardless. It's really just another tax on working folks (because Lord knows we don't pay enough taxes now); whatever costs they aren't saddled with will of course be passed on to the consumer.
The reality is that, since ObamaCare© does nothing to rein in the costs of health care, premiums for health inurance will have to increase, and some benefits will have to be drastically reduced or go away altogether. Coupled with the loss of risk-related underwriting (aka "guaranteed issue"), there are precious few alternatives. Pragmatists (and/or cynics) may see an end-game here, but I'll let readers draw their own conclusion.
The most telling quote from Mr O'Connell concerns the incredibly cynical view taken by the Obamastration. On the one hand, “I think the big news is that the administration estimates that by the end of 2013, between a third and two-thirds of employer-sponsored plans will remain grandfathered ...”
On the other: “It’s conceivable that because of the tight limits on permissible changes, a majority of existing plans over time could lose their grandfather status.”
Couldn't have said it better myself.
Related: Oh, you can keep your doctor, too.
[Hat Tip: Beth D]
Don't believe me? Well, here's PresBo himself, on the record, a scant 3 months ago:
[ed: skip to 5:41 for the money-quote]
As we now know, of course, this is (and always was) untrue; this morning, benefits maven Ceridian emailed some interesting analysis from Jim O’Connell, their legislative affairs consultant:
"The guidance states, in summary, that employer-sponsored health plans will lose their grandfather status if they significantly cut benefits or significantly increase out-of-pocket spending for employees ... What remains to be seen, however, is what losing grandfather status means to employers in terms of how much their costs would increase by having to comply with additional mandates in the law."
As we've noted before, it's more likely that employers will opt to simply pay the nominal fine. The reality, of course, is simpler still: regular readers know that employers don't pay for health insurance now, so the true costs of any increases are going to be borne by their employees regardless. It's really just another tax on working folks (because Lord knows we don't pay enough taxes now); whatever costs they aren't saddled with will of course be passed on to the consumer.
The reality is that, since ObamaCare© does nothing to rein in the costs of health care, premiums for health inurance will have to increase, and some benefits will have to be drastically reduced or go away altogether. Coupled with the loss of risk-related underwriting (aka "guaranteed issue"), there are precious few alternatives. Pragmatists (and/or cynics) may see an end-game here, but I'll let readers draw their own conclusion.
The most telling quote from Mr O'Connell concerns the incredibly cynical view taken by the Obamastration. On the one hand, “I think the big news is that the administration estimates that by the end of 2013, between a third and two-thirds of employer-sponsored plans will remain grandfathered ...”
On the other: “It’s conceivable that because of the tight limits on permissible changes, a majority of existing plans over time could lose their grandfather status.”
Couldn't have said it better myself.
Related: Oh, you can keep your doctor, too.
[Hat Tip: Beth D]
Into the Breach: Anthem and PHI
According to the Department of Health and Human Services (HHS), Protected Health Information (PHI) is "(i)nformation your doctors, nurses, and other health care providers put in your medical record ... Conversations your doctor has about your care or treatment with nurses and others ... Information about you in your health insurer’s computer system," even most billing information that providers might have on hand. For providers (and insurers, as well), keeping this private information, well, private is a big deal.
Unfortunately, it's not always possible to prevent its unauthorized disclosure; according to email that hit my inbox this morning:
"Anthem Blue Cross recently learned of a situation in which a small number of individuals ... gained unauthorized access to certain private information." They did this by hacking the online tool that one can use to track the status of one's insurance application. The irony is that, according to the email that hit my inbox this morning, the "vast majority of the manipulation and the resulting unauthorized access occurred at the hands of certain attorneys ... conducted to support a class action lawsuit ... over the very breach they were committing."
Oy.
The carrier has now "made the necessary security changes to prevent it from happening again."
They hope.
As a goodwill gesture (and, perhaps, to mitigate the potential damages caused by the unauthorized access), Anthem will "will (offer) identity protection services for one year at no cost" to those affected by the virtual break-in.
If you've recently applied for individual health insurance with Anthem, it might be a good idea to check back with your agent (or the carrier) to see if your information has been compromised. After all, better safe...
Unfortunately, it's not always possible to prevent its unauthorized disclosure; according to email that hit my inbox this morning:
"Anthem Blue Cross recently learned of a situation in which a small number of individuals ... gained unauthorized access to certain private information." They did this by hacking the online tool that one can use to track the status of one's insurance application. The irony is that, according to the email that hit my inbox this morning, the "vast majority of the manipulation and the resulting unauthorized access occurred at the hands of certain attorneys ... conducted to support a class action lawsuit ... over the very breach they were committing."
Oy.
The carrier has now "made the necessary security changes to prevent it from happening again."
They hope.
As a goodwill gesture (and, perhaps, to mitigate the potential damages caused by the unauthorized access), Anthem will "will (offer) identity protection services for one year at no cost" to those affected by the virtual break-in.
If you've recently applied for individual health insurance with Anthem, it might be a good idea to check back with your agent (or the carrier) to see if your information has been compromised. After all, better safe...
Saturday, June 19, 2010
The "Doc Fix:" Jury-rigged
We reported yesterday that the perennial "Doc Fix" was scuttled, but that appears to have been premature:
"After a week of partisan wrangling, the Senate on Friday passed legislation to spare doctors a 21 percent cut in Medicare payments looming for months. But the last-ditch effort came too late."
At issue is the fact that, although the upper chamber voted to temporarily extend last year's reimbursement rates, its little brother can't approve its own version until (at least) next week. And since our august legislators lost their little game of chicken with the 21% cut in those rates, CMS has no choice but to process claims from the last few weeks under the drastically lower numbers.
As our favorite Medical Office Manager noted earlier, her (and presumably her colleagues') "revenue cycle has been a roller coaster this year; I cannot count on revenue coming in in a timely manner." Now she can't even count on what that revenue will be.
Never fear, though, all these providers will have to do is to resubmit each and every claim, and wait with anxious anticipation for those additional dollars to roll in.
Meanwhile, the "D'oh! Award" goes to the AMA, which opined that the "continuing financial uncertainty may lead some doctors to stop taking new Medicare patients."
Ya think?
"After a week of partisan wrangling, the Senate on Friday passed legislation to spare doctors a 21 percent cut in Medicare payments looming for months. But the last-ditch effort came too late."
At issue is the fact that, although the upper chamber voted to temporarily extend last year's reimbursement rates, its little brother can't approve its own version until (at least) next week. And since our august legislators lost their little game of chicken with the 21% cut in those rates, CMS has no choice but to process claims from the last few weeks under the drastically lower numbers.
As our favorite Medical Office Manager noted earlier, her (and presumably her colleagues') "revenue cycle has been a roller coaster this year; I cannot count on revenue coming in in a timely manner." Now she can't even count on what that revenue will be.
Never fear, though, all these providers will have to do is to resubmit each and every claim, and wait with anxious anticipation for those additional dollars to roll in.
Meanwhile, the "D'oh! Award" goes to the AMA, which opined that the "continuing financial uncertainty may lead some doctors to stop taking new Medicare patients."
Ya think?
Friday, June 18, 2010
The Mandate Update: Evil AND a Tax
Looks like Aunt Nancy was wrong on this: we didn't need to "see the plan to know what's in it" as regards the (evil) Individual Mandate:
"In order to protect the new national health care law from legal challenges, the Obama administration has been forced to argue that the individual mandate represents a tax -- even though Obama himself argued the exact opposite while campaigning to pass the legislation."
Whoa – The Obamaman lied about ObamaCare©?!
I'm shocked, shocked I tell ya!
Well, not really, since we had already made that call early on. This is a significant development, though, because it not only puts the lie to claims that the mandate is not in fact a tax, but that it is an unprecedented one, at that.
Until now, taxes were levied on things we bought or owned, but this is a tax on merely existing. Unlike the red herring that auto insurance is mandated, being taxed because one demurred from participating means that you'll be taxed simply for being a living American. I used to joke that these folks would tax the air that we breathe if only they could; turns out, this piece of ObamaCare© does just that.
If there's a bright side, it's that as more and more "clarifications" come forth, an overwhelming majority of Americans want this train-wreck repealed. It remains to be seen, of course, whether or not that translates into action, but it's a hopeful sign that folks understand just how bad this is, and that the pro-ObamaCare© forces are being forced to defend the indefensible.
"In order to protect the new national health care law from legal challenges, the Obama administration has been forced to argue that the individual mandate represents a tax -- even though Obama himself argued the exact opposite while campaigning to pass the legislation."
Whoa – The Obamaman lied about ObamaCare©?!
I'm shocked, shocked I tell ya!
Well, not really, since we had already made that call early on. This is a significant development, though, because it not only puts the lie to claims that the mandate is not in fact a tax, but that it is an unprecedented one, at that.
Until now, taxes were levied on things we bought or owned, but this is a tax on merely existing. Unlike the red herring that auto insurance is mandated, being taxed because one demurred from participating means that you'll be taxed simply for being a living American. I used to joke that these folks would tax the air that we breathe if only they could; turns out, this piece of ObamaCare© does just that.
If there's a bright side, it's that as more and more "clarifications" come forth, an overwhelming majority of Americans want this train-wreck repealed. It remains to be seen, of course, whether or not that translates into action, but it's a hopeful sign that folks understand just how bad this is, and that the pro-ObamaCare© forces are being forced to defend the indefensible.
Latebreaking: The "Doc Fix" still broken, more
It was just a week or so ago that we pointed out that the so-called "Doc Fix" wasn't:
"The assumption was that there would be no actual cut. But we all know what happens when we assume ... If it does not pass, then CMS will process all claims from June 1 on based on the reduced 2010 fee schedule."
Well guess what?
The Washington Post is now reporting that "[t]he Senate effectively rejected a slimmed-down package of jobless benefits and state aid late Thursday ... The measure would protect doctors from a steep cut in Medicare rates scheduled to take effect [today]."
The bill would also have extended the notorious COBRA/ARRA subsidy, which has since expired.
Are we on the verge of seeing actual financial discipline out of Poppa Washington?
Doubtful, but hope (and change?) springs eternal.
"The assumption was that there would be no actual cut. But we all know what happens when we assume ... If it does not pass, then CMS will process all claims from June 1 on based on the reduced 2010 fee schedule."
Well guess what?
The Washington Post is now reporting that "[t]he Senate effectively rejected a slimmed-down package of jobless benefits and state aid late Thursday ... The measure would protect doctors from a steep cut in Medicare rates scheduled to take effect [today]."
The bill would also have extended the notorious COBRA/ARRA subsidy, which has since expired.
Are we on the verge of seeing actual financial discipline out of Poppa Washington?
Doubtful, but hope (and change?) springs eternal.
Thursday, June 17, 2010
The $56 Million Question
When he died at the ripe old age of 81, Empire State attorney Arthur Kramer left behind a sizeable estate, including over $50 million of life insurance purchased in the waning years of his life. The twist?
"Investors, not relatives, would collect upon the death of the prominent attorney"
Now, we've covered this subject before, but it bears repeating: there are good and sufficient reasons to sell (or buy, depending on one's perspective) an in-force life insurance policy. But there are dangers here, as well, some of which may play a part in how this story is ultimately resolved.
For one thing, it appears that, in New York, death certificates aren't a matter of public record, and thus not available to the average citizen (or, specifically, the investors who bought Mr K's policies). Without such a document, the insurance company won't release the funds (i.e. pay off), depriving these investors of their return. And the carrier is not only within its rights to do so, but really has no choice, legally. Absent that document (or acceptable proxy, if any), there's no way for the insurer to confirm that the deceased is actually, you know, deceased.
In this case, the poor widow, seeing those dollars flowing away from her purse, simply refused to release a copy of the certificate to the investors. And again, she's well within her rights to do so: after all, she wasn't a party to the sales contract, and thus has no obligation to abide by it.
Ms Kramer is also the executor of the estate; in New York (among some other states), the executor can actually sue the investors to recoup at least some of the proceeds, which she's done. Of course, that's currently a moot point, inasmuch as there has actually been no payout. The bigger issue is this:
"Her late husband, she alleged, had arranged deals with investors that skirted a state "insurable interest" law, which says people can't procure life insurance on someone they aren't close to."
This is a gross misstatement of how "insurable interest" really works. She may have a more tenable claim in her assertion that "state law prohibit(s) taking out a policy on your own life and immediately transferring the rights to an investor, never intending the policy as protection for your loved ones." Now that's a court-worthy question.
And it's a big-picture one, as well:
"From 2004 to 2008, tens of thousands of older people sought to make some fast cash by taking out multimillion-dollar policies on their own lives and flipping these to brokers, who resold them to investors like hedge funds and investment banks."
That's potentially thousands of policies that may end up in legal limbo while the extant cases wend their way through the judicial system. But it seems to me that the answer is really simple: if, as has been the case for hundreds of years, life insurance is property, then one has the right to buy and sell it based on market forces.
I have a feeling that it won't be that simple, though.
Lagniappe: While I admire The Widow Kramer's tenacity, I can't help but think that she made the wrong play here: that death certificate is worth $56 million to "the investors;" surely the two parties could have come to some mutually beneficial - and private - agreement.
[Hat Tip: Bob Vineyard]
"Investors, not relatives, would collect upon the death of the prominent attorney"
Now, we've covered this subject before, but it bears repeating: there are good and sufficient reasons to sell (or buy, depending on one's perspective) an in-force life insurance policy. But there are dangers here, as well, some of which may play a part in how this story is ultimately resolved.
For one thing, it appears that, in New York, death certificates aren't a matter of public record, and thus not available to the average citizen (or, specifically, the investors who bought Mr K's policies). Without such a document, the insurance company won't release the funds (i.e. pay off), depriving these investors of their return. And the carrier is not only within its rights to do so, but really has no choice, legally. Absent that document (or acceptable proxy, if any), there's no way for the insurer to confirm that the deceased is actually, you know, deceased.
In this case, the poor widow, seeing those dollars flowing away from her purse, simply refused to release a copy of the certificate to the investors. And again, she's well within her rights to do so: after all, she wasn't a party to the sales contract, and thus has no obligation to abide by it.
Ms Kramer is also the executor of the estate; in New York (among some other states), the executor can actually sue the investors to recoup at least some of the proceeds, which she's done. Of course, that's currently a moot point, inasmuch as there has actually been no payout. The bigger issue is this:
"Her late husband, she alleged, had arranged deals with investors that skirted a state "insurable interest" law, which says people can't procure life insurance on someone they aren't close to."
This is a gross misstatement of how "insurable interest" really works. She may have a more tenable claim in her assertion that "state law prohibit(s) taking out a policy on your own life and immediately transferring the rights to an investor, never intending the policy as protection for your loved ones." Now that's a court-worthy question.
And it's a big-picture one, as well:
"From 2004 to 2008, tens of thousands of older people sought to make some fast cash by taking out multimillion-dollar policies on their own lives and flipping these to brokers, who resold them to investors like hedge funds and investment banks."
That's potentially thousands of policies that may end up in legal limbo while the extant cases wend their way through the judicial system. But it seems to me that the answer is really simple: if, as has been the case for hundreds of years, life insurance is property, then one has the right to buy and sell it based on market forces.
I have a feeling that it won't be that simple, though.
Lagniappe: While I admire The Widow Kramer's tenacity, I can't help but think that she made the wrong play here: that death certificate is worth $56 million to "the investors;" surely the two parties could have come to some mutually beneficial - and private - agreement.
[Hat Tip: Bob Vineyard]
Wednesday, June 16, 2010
Cavalcade of Risk #107 now online
My Wealth Builder presents this week's roundup of risk-related posts, helpfully split into two general categories.
Do check it out!
Do check it out!
Health Insurance Health Care Policy Medicare Medicaid Cancers Breast Cancer Children's Health Women’s health
Food Pyramid Update: Early Summer edition
Maybe Archie Bunker had it right all along:
"Meat and potato diet 'reduces risk of lung cancer by half"
Turns out, there's a vitamin, present in high doses in foods like meat and potatoes, fish and even whole grains that can have a profound effect in reducing the risk of lung cancer.
Even among smokers!
Just cutting out the cigs isn't enough, though: piling on the burgers and taters could reduce the chances of contracting lung cancer by an amazing 50%.
The secret ingredient: Vitamin B6.
But beware, just loading up on the vitamin itself doesn't seem to do the trick:
"Paul Brennan, of IARC [the International Agency for Research on Cancer] ... rejected suggestions that people should take supplements to boost levels of the vitamin. "We have had several bad experiences in the past with supplements. Twenty years ago, beta-carotene was given to people with lung cancer and found to increase, not decrease, deaths. I doubt if trials with supplements will go ahead."
To the drive-through, stat!
"Meat and potato diet 'reduces risk of lung cancer by half"
Turns out, there's a vitamin, present in high doses in foods like meat and potatoes, fish and even whole grains that can have a profound effect in reducing the risk of lung cancer.
Even among smokers!
Just cutting out the cigs isn't enough, though: piling on the burgers and taters could reduce the chances of contracting lung cancer by an amazing 50%.
The secret ingredient: Vitamin B6.
But beware, just loading up on the vitamin itself doesn't seem to do the trick:
"Paul Brennan, of IARC [the International Agency for Research on Cancer] ... rejected suggestions that people should take supplements to boost levels of the vitamin. "We have had several bad experiences in the past with supplements. Twenty years ago, beta-carotene was given to people with lung cancer and found to increase, not decrease, deaths. I doubt if trials with supplements will go ahead."
To the drive-through, stat!
Tuesday, June 15, 2010
Turn Up the AC
As in American Community Mutual, the erstwhile group and individual health insurance carrier that's been on the rocks for a while:
"...it appears that the American Community Mutual Insurance Company has hit the skids. According to email from a reliable source, the carrier has entered into a consent agreement with the Ohio Department of Insurance. Under the terms of the agreement, no new business has been accepted from Ohio beginning December 23rd."
Now comes word that its former rival, UnitedHealthcare's Golden Rule Insurance Company (Golden Rule) has "won" the exclusive right to take over AC's "book of business." This is actually the ideal solution for policyholders (as opposed to "the other way"); policyholders who choose to do so can make the switch to Golden Rule with no underwriting or lapse in coverage.
Two additional items of note: first, I had been under the impression that Anthem pretty much "ran the show" in the Michigan market; that UHC aced them out for this makes me go "hmm." And second, it's not clear whether or not agents who wrote the original AC business will continue to receive commissions on it once their insureds make the switch to Golden Rule.
"...it appears that the American Community Mutual Insurance Company has hit the skids. According to email from a reliable source, the carrier has entered into a consent agreement with the Ohio Department of Insurance. Under the terms of the agreement, no new business has been accepted from Ohio beginning December 23rd."
Now comes word that its former rival, UnitedHealthcare's Golden Rule Insurance Company (Golden Rule) has "won" the exclusive right to take over AC's "book of business." This is actually the ideal solution for policyholders (as opposed to "the other way"); policyholders who choose to do so can make the switch to Golden Rule with no underwriting or lapse in coverage.
Two additional items of note: first, I had been under the impression that Anthem pretty much "ran the show" in the Michigan market; that UHC aced them out for this makes me go "hmm." And second, it's not clear whether or not agents who wrote the original AC business will continue to receive commissions on it once their insureds make the switch to Golden Rule.
Latest MVNHS© Scandal
Talk about a long weekend:
"More than 3,000 patients are dying every year because of short staffing in hospitals at weekends."
In fact, a recent study found that more Brits die due to understaffed hospitals than accidents, primarily because there's a shortage of experienced physicians.
Sound familiar?
And the problem just keeps getting worse for the Much Vaunted National Health Service©:
"Just weeks ago, another study found the out-of-hours GP service was not fit for purpose as trusts were not checking whether stand-in doctors could speak English properly and even whether they were medically competent."
This on the heels of a visiting German doc who, on his very first shift, managed to kill a senior citizen. The underlying problem is that the service just doesn't pay enough for experienced physicians to work a weekend shift.
There's an easy fix, though: just be sure to put off "heart attacks, heart failure, stroke, some cancers and aortic aneurysms" until Monday.
"More than 3,000 patients are dying every year because of short staffing in hospitals at weekends."
In fact, a recent study found that more Brits die due to understaffed hospitals than accidents, primarily because there's a shortage of experienced physicians.
Sound familiar?
And the problem just keeps getting worse for the Much Vaunted National Health Service©:
"Just weeks ago, another study found the out-of-hours GP service was not fit for purpose as trusts were not checking whether stand-in doctors could speak English properly and even whether they were medically competent."
This on the heels of a visiting German doc who, on his very first shift, managed to kill a senior citizen. The underlying problem is that the service just doesn't pay enough for experienced physicians to work a weekend shift.
There's an easy fix, though: just be sure to put off "heart attacks, heart failure, stroke, some cancers and aortic aneurysms" until Monday.
A Funky (Heart) Grand Rounds
Steve at The Funky Heart blog hosts this week's non-themed collection of the best medblog posts.
From music as pain relief to the latest on Flex Spending Accounts, you're sure to find something to make you go "hmmm."
From music as pain relief to the latest on Flex Spending Accounts, you're sure to find something to make you go "hmmm."
Monday, June 14, 2010
So you REALLY thought you could keep your insurance? Ha!
As Bob notes below, the ObamaCare© campaign's promise that "if you like your [current] health care plan, you can keep it" is becoming more unlikely by the day:
"Internal White House documents reveal that 51% of employers may have to relinquish their current health care coverage by 2013 due to ObamaCare. That numbers soars to 66% for small-business employers."
Oops.
But of course this was never really the case, and this promise (like so many others) was quickly thrown under the bus. Because the reality is that, regardless of whether or not you were satisfied with what you had, you were never going to be able to keep it:
"...an early draft of an administration regulation estimates that many employers will be forced to make changes to their health plans under the new law ... What we are getting here is a clear indication that most plans will have to change."
And of course these "changes" (in actuality, additional mandated benefits) will increase premiums, not decrease them, forcing employers to seek cuts elsewhere, and consumers to consider the more attractive alternative.
"Internal White House documents reveal that 51% of employers may have to relinquish their current health care coverage by 2013 due to ObamaCare. That numbers soars to 66% for small-business employers."
Oops.
But of course this was never really the case, and this promise (like so many others) was quickly thrown under the bus. Because the reality is that, regardless of whether or not you were satisfied with what you had, you were never going to be able to keep it:
"...an early draft of an administration regulation estimates that many employers will be forced to make changes to their health plans under the new law ... What we are getting here is a clear indication that most plans will have to change."
And of course these "changes" (in actuality, additional mandated benefits) will increase premiums, not decrease them, forcing employers to seek cuts elsewhere, and consumers to consider the more attractive alternative.
The Doc Fix ISN'T in... [UPDATED AND BUMPED]
[Please scroll down for update]
As we've mentioned before, proponents of ObamaCare© planned to try a little sleight of hand with the numbers:
"In order to avoid "adding one dime to the deficit", Obamacare ... had to play shell games with the funding. One way was to cut pay to doctors who treat Medicare patients by 21%.
In doing so they stripped billions out of the cost of Obamacare by projecting a $200 billion savings ... The game plan was to add those billions back in via a separate bill termed "doc fix."
Of course, this "savings" was anything but, since the trick was to just add those dollars back in under a different budget line. The assumption was that there would be no actual cut. But we all know what happens when we "assume:"
"President Barack Obama is asking Republican lawmakers to approve billions of dollars in new spending to avert a scheduled 21 percent cut in payments to doctors who treat Medicare patients."
It's interesting that, as usual, PresBo is attempting to make this a Republican problem; last time I looked, it was his party that controls congress (and its purse strings). In other words, he decided to play chicken with the lives of some of our most vulnerable citizens, and then blinked.
On the one hand, the folks pushing ObamaCare© want us to believe that it will add nothing to the (record breaking) deficit, while on the other doing nothing to actually control costs. The result is that they failed to plan for the very real possibility (now reality) that their little legerdemain would fall flat. Faced with mind-boggling debt, responsible legislators simply put up the stop sign.
It's true that both parties have played this game before, but it's also true that the stakes have never been this high. That's what you get, one supposes, when "you have to pass it to see what's in it."
UPDATE: In the comments, Bob mentions that he "was under the impression the Medicare cut went into effect 6/1 when Congress went home rather than voting another extension. The doc fix was supposed to be part of the COBRA subsidy and unemployment benefits package."
Great point, so I asked our resident Guru, guest-blogger and Medical Office Manager Kelley Beloff for an explanation:
"On June 1st the extension of 2009 fee schedule ended and the 2010 fee schedule, with a 21% percent cut went into effect. However, CMS suspended processing all claims for 10 business days, that is until June 15th, in the hope that Congress would again, for the third time this year, extend the 2009 fee schedule. For example, it was extended on January 15 to April 1. Congress did not extend in time to stop the April 1st deadline and CMS held all claims the first 10 business days in April. At the last minute, the extension was passed for June 1 and now we are in the same situation we were in on the first of January and again on April 1 of this year. At this time, it does not look promising that the bill will pass. If it does not pass, then CMS will process all claims from June 1 on based on the reduced 2010 fee schedule. My revenue cycle has been a roller coaster this year; I cannot count on revenue coming in in a timely manner."
As we've mentioned before, proponents of ObamaCare© planned to try a little sleight of hand with the numbers:
"In order to avoid "adding one dime to the deficit", Obamacare ... had to play shell games with the funding. One way was to cut pay to doctors who treat Medicare patients by 21%.
In doing so they stripped billions out of the cost of Obamacare by projecting a $200 billion savings ... The game plan was to add those billions back in via a separate bill termed "doc fix."
Of course, this "savings" was anything but, since the trick was to just add those dollars back in under a different budget line. The assumption was that there would be no actual cut. But we all know what happens when we "assume:"
"President Barack Obama is asking Republican lawmakers to approve billions of dollars in new spending to avert a scheduled 21 percent cut in payments to doctors who treat Medicare patients."
It's interesting that, as usual, PresBo is attempting to make this a Republican problem; last time I looked, it was his party that controls congress (and its purse strings). In other words, he decided to play chicken with the lives of some of our most vulnerable citizens, and then blinked.
On the one hand, the folks pushing ObamaCare© want us to believe that it will add nothing to the (record breaking) deficit, while on the other doing nothing to actually control costs. The result is that they failed to plan for the very real possibility (now reality) that their little legerdemain would fall flat. Faced with mind-boggling debt, responsible legislators simply put up the stop sign.
It's true that both parties have played this game before, but it's also true that the stakes have never been this high. That's what you get, one supposes, when "you have to pass it to see what's in it."
UPDATE: In the comments, Bob mentions that he "was under the impression the Medicare cut went into effect 6/1 when Congress went home rather than voting another extension. The doc fix was supposed to be part of the COBRA subsidy and unemployment benefits package."
Great point, so I asked our resident Guru, guest-blogger and Medical Office Manager Kelley Beloff for an explanation:
"On June 1st the extension of 2009 fee schedule ended and the 2010 fee schedule, with a 21% percent cut went into effect. However, CMS suspended processing all claims for 10 business days, that is until June 15th, in the hope that Congress would again, for the third time this year, extend the 2009 fee schedule. For example, it was extended on January 15 to April 1. Congress did not extend in time to stop the April 1st deadline and CMS held all claims the first 10 business days in April. At the last minute, the extension was passed for June 1 and now we are in the same situation we were in on the first of January and again on April 1 of this year. At this time, it does not look promising that the bill will pass. If it does not pass, then CMS will process all claims from June 1 on based on the reduced 2010 fee schedule. My revenue cycle has been a roller coaster this year; I cannot count on revenue coming in in a timely manner."
Saturday, June 12, 2010
Are YOU prepared? More on Personal Risk Management
[Welcome Industry Radar readers]
So you've made it home safely, only to find that your house has:
a) Burned to the ground,
b) Is under 18 feet of water,
c) Been destroyed by a fierce tornado, and/or
d) Been burgled
No problem, though, because you have a complete, accurate and up-to-date home inventory, safely secured off-site.
You do have such a useful and necessary list, right?
Well, for those of us who've just never gotten around to that, the Insurance Information Institute has developed a helpful (and free!) software tool to do just that:
"A home inventory will help you purchase enough insurance to replace your possessions and can help speed the claims process and substantiate losses for income tax purposes. To make this task simple, the I.I.I. offers free, Web-based software and information on how to create and store your inventory at KnowYourStuff.org."
Just click on over to the KYS site, sign up and sign on, and get to work.
Bonus hint: Make sure to print out a copy for your homeowners insurance agent, too. That way, you'll have multiple, off-site copies and he (or she) will be able to help you assess whether or not your adequately covered.
So you've made it home safely, only to find that your house has:
a) Burned to the ground,
b) Is under 18 feet of water,
c) Been destroyed by a fierce tornado, and/or
d) Been burgled
No problem, though, because you have a complete, accurate and up-to-date home inventory, safely secured off-site.
You do have such a useful and necessary list, right?
Well, for those of us who've just never gotten around to that, the Insurance Information Institute has developed a helpful (and free!) software tool to do just that:
"A home inventory will help you purchase enough insurance to replace your possessions and can help speed the claims process and substantiate losses for income tax purposes. To make this task simple, the I.I.I. offers free, Web-based software and information on how to create and store your inventory at KnowYourStuff.org."
Just click on over to the KYS site, sign up and sign on, and get to work.
Bonus hint: Make sure to print out a copy for your homeowners insurance agent, too. That way, you'll have multiple, off-site copies and he (or she) will be able to help you assess whether or not your adequately covered.
Friday, June 11, 2010
Cavalcade of Risk #107: Call for submissions
My Wealth Builder hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 14th). 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.
■ 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, June 10, 2010
Color me skeptical: An InsureBlog Investigative Report (Conclusion)
Did ObamaCare© kill nHealth?
In Part 1, we learned that group health carrier nHealth believes itself to be the first corporate casualty of ObamaCare©, but that this may not be accurate. We also learned that there are more issues here than may be obvious to the casual reader, and attempted to identify them.
On the other hand, we were left with a number of unanswered questions, and we hate unanswered questions:
First up, I did hear back from the nice lady at the Virginia Department of Insurance [ed: actually, they call it the Bureau of Insurance, but we're sticking with "Department"], who had more insights into both the Guaranty Fund and the nature of the "wind down" of nHealth. For openers, the specific process here is called a "solvent runoff" (as opposed to what normally happens when a carrier hits the financial skids). The Department has been (or will be, it wasn't clear) in contact with the policyholders and agents. One thing that I was able to confirm is that nHealth's policyholders will not have recourse to the Guaranty Fund (that's important: we'll discuss why in a moment).
Second, my contact told me that a copy of "the order" would be sent to policyholders and agents, but I could find no such "order" anywhere on the Department's web page. I had also asked whether there were any "financial issues" that might be the cause of the shut-down (as opposed to anxiety over ObamaCare©), and was told that this was "confidential." That's bothersome: it seems to me that, although nHealth is (was?) a privately-held company, the actions of the Department of Insurance in this case are, by definition, a matter of public record.
Which brings us to the issue of the (non-)Guaranty Fund. In "normal" circumstances (e.g. bankruptcy), policyholders of the defunct carrier can access the state's life and health guarantee fund much as savers access the FDIC safety net. But that's not the case here: after 11:59PM on December 31st, any insureds on claim, and still covered by nHealth, will see their benefits closed off, with no recourse to, well, anything. The Guaranty Fund won't help, and the company will no longer exist. That has nothing to do with ObamaCare©, and everything to do with the apparently feckless folks who decided to voluntarily "shut it down."
Perhaps the most telling piece comes from this article in the Richmond (VA) Biz Sense:
"[nHealth co-founder Paul] Nezi and other investors helped fund the company out of the gate with a $12 million investment."
The article goes on the tell us that the nascent company has been unable to up that initial capitalization. The problem is that, given the existing marketplace, and the increasingly growing footprints of "the big boys," that $12 million proved woefully inadequate. Couple that with what appears to be a top-heavy administrative function (50 employees to service just 100 groups?), and you have a recipe for failure.
On the one hand, kudos to Nezi and company for at least trying to increase competition, and especially for focusing on consumer-centric health plans. But it seems to me that this attempt was doomed from the git-go; ObamaCare© may have been the final nail in the coffin, but that grave's been dug for quite a while.
Final answer: I call BS.
In Part 1, we learned that group health carrier nHealth believes itself to be the first corporate casualty of ObamaCare©, but that this may not be accurate. We also learned that there are more issues here than may be obvious to the casual reader, and attempted to identify them.
On the other hand, we were left with a number of unanswered questions, and we hate unanswered questions:
First up, I did hear back from the nice lady at the Virginia Department of Insurance [ed: actually, they call it the Bureau of Insurance, but we're sticking with "Department"], who had more insights into both the Guaranty Fund and the nature of the "wind down" of nHealth. For openers, the specific process here is called a "solvent runoff" (as opposed to what normally happens when a carrier hits the financial skids). The Department has been (or will be, it wasn't clear) in contact with the policyholders and agents. One thing that I was able to confirm is that nHealth's policyholders will not have recourse to the Guaranty Fund (that's important: we'll discuss why in a moment).
Second, my contact told me that a copy of "the order" would be sent to policyholders and agents, but I could find no such "order" anywhere on the Department's web page. I had also asked whether there were any "financial issues" that might be the cause of the shut-down (as opposed to anxiety over ObamaCare©), and was told that this was "confidential." That's bothersome: it seems to me that, although nHealth is (was?) a privately-held company, the actions of the Department of Insurance in this case are, by definition, a matter of public record.
Which brings us to the issue of the (non-)Guaranty Fund. In "normal" circumstances (e.g. bankruptcy), policyholders of the defunct carrier can access the state's life and health guarantee fund much as savers access the FDIC safety net. But that's not the case here: after 11:59PM on December 31st, any insureds on claim, and still covered by nHealth, will see their benefits closed off, with no recourse to, well, anything. The Guaranty Fund won't help, and the company will no longer exist. That has nothing to do with ObamaCare©, and everything to do with the apparently feckless folks who decided to voluntarily "shut it down."
Perhaps the most telling piece comes from this article in the Richmond (VA) Biz Sense:
"[nHealth co-founder Paul] Nezi and other investors helped fund the company out of the gate with a $12 million investment."
The article goes on the tell us that the nascent company has been unable to up that initial capitalization. The problem is that, given the existing marketplace, and the increasingly growing footprints of "the big boys," that $12 million proved woefully inadequate. Couple that with what appears to be a top-heavy administrative function (50 employees to service just 100 groups?), and you have a recipe for failure.
On the one hand, kudos to Nezi and company for at least trying to increase competition, and especially for focusing on consumer-centric health plans. But it seems to me that this attempt was doomed from the git-go; ObamaCare© may have been the final nail in the coffin, but that grave's been dug for quite a while.
Final answer: I call BS.
Health Wonk Review, Boston style
Over at Boston Health News, Tinker Ready serves up chowdah garnished with wonkery. Good to the last drop!
Wednesday, June 09, 2010
Are Mini-Meds on the Chopping Block?
The lies that comprise ObamaCare© continue to pile up. As we've noted before, one of the first to go is the promise that one can keep one's current plan:
"As with so much of ObamaCare©, this one's going under the bus, as well ... 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."
Now comes word that folks on limited benefit (aka "mini-med") plans may also see their plans tossed under the bus:
"If you have a low premium, low cost insurance plan, you are going to lose your coverage and be forced into a much higher-cost plan. The Politico piece specifically finds this problem in the mini-med market, where as many as 1 million people will lose their coverage under Obamacare."
The problem is that under the new law, the internal benefit caps inherent in the mini-med product will become illegal. So the plans will have to either adjust (meaning: delete the caps and increase premiums dramatically) or bail. If the latter, a lot of folks who either can't qualify for or can't afford "regular" major medical insurance will find themselves in dire straits:
It's estimated that some 1 million people currently own one of these plans; many of them have no other choice. ObamaCare©'s guaranteed issue provision doesn't kick in for another three-and-a-half years, and - as Bob has pointed out - the ObamaPools are (at least so far) non-starters. If and/or when they actually do become available, a lot of people on the low-end of the economic spectrum may find them unaffordable (especially as compared to their current premiums), thus adding to the ranks of the uninsured.
But, as with the nHealth kerfluffle, there may be less here than meets the eye:
According to John Ferguson, an expert on limited-benefit plans (and whose company has been marketing them for a number of years), the folks playing Chicken Little may be premature. John points out that, as far as mini-meds are concerned, "everything is an opinion now ... [and we] believe we are filed in all the right ways to stay in the market."
How can he be so sure?
Glad you asked:
John explains that "[w]ithin the limited medical industry there are two styles of limited medical benefit plans: co-insurance (sometimes referred to as co-pay-based or expense-incurred) and indemnity-based (sometimes called fixed indemnity) insurance. Fixed-indemnity-style limited medical plans that do not issue creditable coverage letters or represent themselves as a “true group health insurance plan” are exempt from the new regulations because they are considered supplemental-insurance-based limited medical plans." The plans based on the co-insurance model, however, will most likely be the ones headed out the door. At this point, of course, no one knows how many of each type are in force, so there's no way to gauge the ultimate impact.
[Full disclosure: I use John's company for my mini-med clients]
Regardless, I have no doubt that at least a few folks, and perhaps many, will lose their existing coverage as a result of these changes. And so another ObamaCare© promise bites the dust, but that's hardly a surprise.
[Hat Tip: FoIB Brian D]
"As with so much of ObamaCare©, this one's going under the bus, as well ... 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."
Now comes word that folks on limited benefit (aka "mini-med") plans may also see their plans tossed under the bus:
"If you have a low premium, low cost insurance plan, you are going to lose your coverage and be forced into a much higher-cost plan. The Politico piece specifically finds this problem in the mini-med market, where as many as 1 million people will lose their coverage under Obamacare."
The problem is that under the new law, the internal benefit caps inherent in the mini-med product will become illegal. So the plans will have to either adjust (meaning: delete the caps and increase premiums dramatically) or bail. If the latter, a lot of folks who either can't qualify for or can't afford "regular" major medical insurance will find themselves in dire straits:
It's estimated that some 1 million people currently own one of these plans; many of them have no other choice. ObamaCare©'s guaranteed issue provision doesn't kick in for another three-and-a-half years, and - as Bob has pointed out - the ObamaPools are (at least so far) non-starters. If and/or when they actually do become available, a lot of people on the low-end of the economic spectrum may find them unaffordable (especially as compared to their current premiums), thus adding to the ranks of the uninsured.
But, as with the nHealth kerfluffle, there may be less here than meets the eye:
According to John Ferguson, an expert on limited-benefit plans (and whose company has been marketing them for a number of years), the folks playing Chicken Little may be premature. John points out that, as far as mini-meds are concerned, "everything is an opinion now ... [and we] believe we are filed in all the right ways to stay in the market."
How can he be so sure?
Glad you asked:
John explains that "[w]ithin the limited medical industry there are two styles of limited medical benefit plans: co-insurance (sometimes referred to as co-pay-based or expense-incurred) and indemnity-based (sometimes called fixed indemnity) insurance. Fixed-indemnity-style limited medical plans that do not issue creditable coverage letters or represent themselves as a “true group health insurance plan” are exempt from the new regulations because they are considered supplemental-insurance-based limited medical plans." The plans based on the co-insurance model, however, will most likely be the ones headed out the door. At this point, of course, no one knows how many of each type are in force, so there's no way to gauge the ultimate impact.
[Full disclosure: I use John's company for my mini-med clients]
Regardless, I have no doubt that at least a few folks, and perhaps many, will lose their existing coverage as a result of these changes. And so another ObamaCare© promise bites the dust, but that's hardly a surprise.
[Hat Tip: FoIB Brian D]
Tuesday, June 08, 2010
Color me skeptical: An InsureBlog Investigative Report (Part 1)
[UPDATE: Part 2 is here]
As an ardent opponent of ObamaCare©, I would like nothing better than to say "I told you so:"
"A Virginia-based insurance company says “considerable uncertainties” created by the Democrats’ health care overhaul will force it to close its doors by the end of the year."
nHealth, in business for just over two years, specialized in High Deductible Health Plans, and employed about 50 people to service its 100 insured groups. They've stopped writing new groups, and "will terminate all business by Dec. 31."
Which raises a couple of questions:
First, since when does a carrier just voluntarily shutter its doors? We've all heard about companies going belly-up, at which point the state's Department of Insurance steps in and takes over. And the various Life and Health Guaranty Funds help insure that claims continue to be paid. But what happens when the company just decides to throw in the towel altogether?
I figured it would be easy to find information on Virginia's Guaranty Fund, but came up blank. So I called the Virginia DOI, which directed me to the appropriate site. The problem was that this particular issue wasn't addressed. Time to put on the deerstalker and cape.
I asked the nice lady at the Department of Insurance if there was someone who could help me noodle this through, and she directed me to one of the examiners who work in the appropriate department. I asked two questions:
First, if a company voluntarily shuts down, would any of its (now former) policyholders have recourse to the Guaranty Fund? Second, was the stated reason (ObamaCare©) the real reason? The impetus for the second question was that one of the folks I spoke with mentioned that nHealth was being "monitored." This led me to wonder whether this was less a question of "reform" and more a question of "oops!" Unfortunately, this information was outside my contact's ken; she's promised to investigate this and let me know.
My next call was to the folks at nHealth itself, where I spoke with a charming young lady named Tiffany. In response to my questions, she told me that they hope to transition their policyholders to other carriers before the end-of-year deadline. They're taking a two-pronged approach: at the corporate level, they're negotiating with other carriers to sell the entire block of business. At the other end, some of their more conscientious agents are looking to move their nHealth groups to their other carriers.
But what if the corporate-level efforts don't bear fruit, and a particular group is unable to move to a new carrier? As far as she's been told, that group's coverage ends when Dick Clark wishes us all a Happy New Year. She also didn't know whether or not the Guaranty Find would come into play, but that's not really her area of expertise, so no harm or foul.
I did ask if there was any outside pressure to make this move, but she reiterated that this was a decision voluntarily undertaken by the board.
Next, I emailed Sarah Kliff (who wrote the original Politico article) to ask for clarification; I'm patiently awaiting a response.
There are bigger stakes in this story than might appear at first blush. If - and it's a big if - ObamaCare© really is the culprit, then we can expect to see more of the smaller, regional carriers fold up their tents. But I'm not convinced that this is truly the case here, which means that someone's not being entirely forthright.
We'll let you know either way. [Update: Part 2 is here]
[Hat Tip: RWN]
As an ardent opponent of ObamaCare©, I would like nothing better than to say "I told you so:"
"A Virginia-based insurance company says “considerable uncertainties” created by the Democrats’ health care overhaul will force it to close its doors by the end of the year."
nHealth, in business for just over two years, specialized in High Deductible Health Plans, and employed about 50 people to service its 100 insured groups. They've stopped writing new groups, and "will terminate all business by Dec. 31."
Which raises a couple of questions:
First, since when does a carrier just voluntarily shutter its doors? We've all heard about companies going belly-up, at which point the state's Department of Insurance steps in and takes over. And the various Life and Health Guaranty Funds help insure that claims continue to be paid. But what happens when the company just decides to throw in the towel altogether?
I figured it would be easy to find information on Virginia's Guaranty Fund, but came up blank. So I called the Virginia DOI, which directed me to the appropriate site. The problem was that this particular issue wasn't addressed. Time to put on the deerstalker and cape.
I asked the nice lady at the Department of Insurance if there was someone who could help me noodle this through, and she directed me to one of the examiners who work in the appropriate department. I asked two questions:
First, if a company voluntarily shuts down, would any of its (now former) policyholders have recourse to the Guaranty Fund? Second, was the stated reason (ObamaCare©) the real reason? The impetus for the second question was that one of the folks I spoke with mentioned that nHealth was being "monitored." This led me to wonder whether this was less a question of "reform" and more a question of "oops!" Unfortunately, this information was outside my contact's ken; she's promised to investigate this and let me know.
My next call was to the folks at nHealth itself, where I spoke with a charming young lady named Tiffany. In response to my questions, she told me that they hope to transition their policyholders to other carriers before the end-of-year deadline. They're taking a two-pronged approach: at the corporate level, they're negotiating with other carriers to sell the entire block of business. At the other end, some of their more conscientious agents are looking to move their nHealth groups to their other carriers.
But what if the corporate-level efforts don't bear fruit, and a particular group is unable to move to a new carrier? As far as she's been told, that group's coverage ends when Dick Clark wishes us all a Happy New Year. She also didn't know whether or not the Guaranty Find would come into play, but that's not really her area of expertise, so no harm or foul.
I did ask if there was any outside pressure to make this move, but she reiterated that this was a decision voluntarily undertaken by the board.
Next, I emailed Sarah Kliff (who wrote the original Politico article) to ask for clarification; I'm patiently awaiting a response.
There are bigger stakes in this story than might appear at first blush. If - and it's a big if - ObamaCare© really is the culprit, then we can expect to see more of the smaller, regional carriers fold up their tents. But I'm not convinced that this is truly the case here, which means that someone's not being entirely forthright.
We'll let you know either way. [Update: Part 2 is here]
[Hat Tip: RWN]
Swine Flu Rip Off?
We've documented our own skepticism about the true nature of the so-called "Swine Flu Epidemic" (here, here and here, for example); now comes word that our incredulity was, perhaps, well-founded:
"Scientists who advised the World Health Organization on its influenza policies and recommendations — including the decision to proclaim the so-called swine flu a "pandemic" - had close ties to companies that manufacture vaccines and antiviral medicines like Tamiflu, a fact that WHO did not publicly disclose."
As in: "follow the money."
At issue is the fact that we put a lot of faith and trust in ostensibly objective "scientists" to accurately report their findings, and to acknowledge whatever biases they may bring to the table (gee, it's a good thing that this kind of scandal is limited to the medical field, isn't it?). When major improprieties like this come out (and they always do), it not only reflects poorly on the scientific community, but makes us question the motives of other such studies, as well.
Of course, our own deeply flawed Department of Health and Human Services quickly jumped in to defend the now-discredited "scientists:"
"The WHO handled the outbreak in a very measured and appropriate manner ...It's very easy to look back through a 20-20 lens and essentially be an armchair quarterback."
Um, no: this is about ethically challenged researchers who explicitly failed to disclose their own conflicts of interest, which may have prevented the waste of untold millions of dollars, and avoided a major public scare. That's not "Monday morning quarterbacking," that's just good science.
Exit question: where do folks go for a refund?
"Scientists who advised the World Health Organization on its influenza policies and recommendations — including the decision to proclaim the so-called swine flu a "pandemic" - had close ties to companies that manufacture vaccines and antiviral medicines like Tamiflu, a fact that WHO did not publicly disclose."
As in: "follow the money."
At issue is the fact that we put a lot of faith and trust in ostensibly objective "scientists" to accurately report their findings, and to acknowledge whatever biases they may bring to the table (gee, it's a good thing that this kind of scandal is limited to the medical field, isn't it?). When major improprieties like this come out (and they always do), it not only reflects poorly on the scientific community, but makes us question the motives of other such studies, as well.
Of course, our own deeply flawed Department of Health and Human Services quickly jumped in to defend the now-discredited "scientists:"
"The WHO handled the outbreak in a very measured and appropriate manner ...It's very easy to look back through a 20-20 lens and essentially be an armchair quarterback."
Um, no: this is about ethically challenged researchers who explicitly failed to disclose their own conflicts of interest, which may have prevented the waste of untold millions of dollars, and avoided a major public scare. That's not "Monday morning quarterbacking," that's just good science.
Exit question: where do folks go for a refund?
Grand Rounds: The ABC's version
Drew Hanson hosts this week's roundup of interesting medblog posts. I like the simple, common-sense format, which is fair but still interesting.
Monday, June 07, 2010
Oh, that Deadly MVNHS©
Speaking of Death Panels:
"A showcase hospital that won the Government's highest three-star rating allowed nurses to prescribe illegally and administer powerful drugs which police believe killed three patients and injured many more."
Well, that's certainly one way to cut down on hospital overcrowding. And it sure beats "boarding," (another wonderful practice of the MVNHS© where critically ill patients are forced to wait outside so as not to be shown on the hospital's "inventory"). In the event, these Florence Nightingales-cum-Dr Kevorkians have apparently been routinely administering lethal doses with impunity, while the administration turned a blind eye.
Of course, these managers were working with increasingly tight budgets so they may have considered this extra-curricular activity as a feature, not a bug.
"A showcase hospital that won the Government's highest three-star rating allowed nurses to prescribe illegally and administer powerful drugs which police believe killed three patients and injured many more."
Well, that's certainly one way to cut down on hospital overcrowding. And it sure beats "boarding," (another wonderful practice of the MVNHS© where critically ill patients are forced to wait outside so as not to be shown on the hospital's "inventory"). In the event, these Florence Nightingales-cum-Dr Kevorkians have apparently been routinely administering lethal doses with impunity, while the administration turned a blind eye.
Of course, these managers were working with increasingly tight budgets so they may have considered this extra-curricular activity as a feature, not a bug.
Sunday, June 06, 2010
From the P&C Files: Rate Increases Looming
But not from the usual suspects:
"For commercial insurers, the Gulf of Mexico oil spill and the volcanic-ash disaster may prove relatively light in claims costs but may give the firms justification to raise premiums for some types of coverage."
PresBo's Gulf Oil Catastrophe (aka Deepwater Horizon) is estimated to have cost over $600 million so far, but the final tally is expected to top several billion. The good news - if it can really be said to be such - is that "only around 20% of the losses incurred so far in connection with spill are being carried by the industry." The bulk of the cost will be borne by, one presumes, BP and others.
But that's only half the story: the eruption of Mount [unpronounceable] this spring led to thousands of flight delays and cancellations, but that also meant that there were few ash-related damage and business interruption claims.
So why does that presage rate increases? After all, if losses were lower than anticipated, then why would premiums go up? It's more a matter of anticipation:
'[P]roperty coverage for oil rigs is rising, and with the hurricane season approaching, any additional loss in the Mexican Gulf could further bolster pricing. Prices for offshore energy liability insurance are also certain to rise as insurance companies reevaluate the complex risks associated with drilling in deep waters."
While it's tempting to think that this won't affect the rest of us, the reality is that the affected businesses will simply pass on the increases to the consumer. And insurers will also look to spread their rate increases to the larger book, as well.
"For commercial insurers, the Gulf of Mexico oil spill and the volcanic-ash disaster may prove relatively light in claims costs but may give the firms justification to raise premiums for some types of coverage."
PresBo's Gulf Oil Catastrophe (aka Deepwater Horizon) is estimated to have cost over $600 million so far, but the final tally is expected to top several billion. The good news - if it can really be said to be such - is that "only around 20% of the losses incurred so far in connection with spill are being carried by the industry." The bulk of the cost will be borne by, one presumes, BP and others.
But that's only half the story: the eruption of Mount [unpronounceable] this spring led to thousands of flight delays and cancellations, but that also meant that there were few ash-related damage and business interruption claims.
So why does that presage rate increases? After all, if losses were lower than anticipated, then why would premiums go up? It's more a matter of anticipation:
'[P]roperty coverage for oil rigs is rising, and with the hurricane season approaching, any additional loss in the Mexican Gulf could further bolster pricing. Prices for offshore energy liability insurance are also certain to rise as insurance companies reevaluate the complex risks associated with drilling in deep waters."
While it's tempting to think that this won't affect the rest of us, the reality is that the affected businesses will simply pass on the increases to the consumer. And insurers will also look to spread their rate increases to the larger book, as well.
Friday, June 04, 2010
June Wikio Rankings: Movin' on up...
The new Wikio Health-related blog rankings are out, and we've moved up 10 spots, back into the Top 10:
Ranking made by Wikio
Oh, That Crafty MVNHS©
In case one still harbored any doubts as to the end-game that is ObamaCare©, one has only to look at the latest news from the Emerald Isle:
"Millions of patients face losing NHS care as bosses prepare to axe treatments to make £20billion [about $30B US] of savings by 2014"
So who'll be hardest hit?
Regular readers will already know the answer; after all, what demographic is most likely to need:
"hernias, joint replacements, ear and nose procedures, varicose veins and cataract surgery"
And then there's that word again:
"Earlier this year the Government's rationing body said more cuts in medical treatments are planned to save the NHS at least £600million." [ed: emphasis added]
So even though the Much Vaunted (British) National Health Service© is touted as a "model" for the future of care here, they still can't control spiraling health care costs. "But ObamaCare© is different," claim its supporters, "we'll save oodles of money and still deliver high quality care in copious amounts."
Oh really?
"But while the research compiled in the Dartmouth Atlas of Health Care has been widely interpreted as showing the country’s best and worst care ... in fact it mainly shows the varying costs of care in the government’s Medicare program. Measures of the quality of care are not part of the formula."
And so?
"As any shopper knows, cheaper does not always mean better ... the real difference in costs between, say, Houston and Bismarck, N.D., may result less from how doctors work than from how patients live."
Which brings us to the bottom line:
"The debate ... is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful ... Cuts, if not made carefully, could cost lives."
See a connection with the dilemna facing our Cousins Across the Pond? In making their case for "action, any action, but right away," Harry, Nancy and Barry have sold us a bill of goods upon which they cannot deliver. No matter how you slice it, we'll be sacrificing quality of care without actually reducing the total net costs of that care. Kind of the "worst of both worlds."
As Bob says, "Smaller cars, fewer health care choices, Poppa Washington."
"Millions of patients face losing NHS care as bosses prepare to axe treatments to make £20billion [about $30B US] of savings by 2014"
So who'll be hardest hit?
Regular readers will already know the answer; after all, what demographic is most likely to need:
"hernias, joint replacements, ear and nose procedures, varicose veins and cataract surgery"
And then there's that word again:
"Earlier this year the Government's rationing body said more cuts in medical treatments are planned to save the NHS at least £600million." [ed: emphasis added]
So even though the Much Vaunted (British) National Health Service© is touted as a "model" for the future of care here, they still can't control spiraling health care costs. "But ObamaCare© is different," claim its supporters, "we'll save oodles of money and still deliver high quality care in copious amounts."
Oh really?
"But while the research compiled in the Dartmouth Atlas of Health Care has been widely interpreted as showing the country’s best and worst care ... in fact it mainly shows the varying costs of care in the government’s Medicare program. Measures of the quality of care are not part of the formula."
And so?
"As any shopper knows, cheaper does not always mean better ... the real difference in costs between, say, Houston and Bismarck, N.D., may result less from how doctors work than from how patients live."
Which brings us to the bottom line:
"The debate ... is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful ... Cuts, if not made carefully, could cost lives."
See a connection with the dilemna facing our Cousins Across the Pond? In making their case for "action, any action, but right away," Harry, Nancy and Barry have sold us a bill of goods upon which they cannot deliver. No matter how you slice it, we'll be sacrificing quality of care without actually reducing the total net costs of that care. Kind of the "worst of both worlds."
As Bob says, "Smaller cars, fewer health care choices, Poppa Washington."
Thursday, June 03, 2010
ObamaCare© Going Forward: What the Future Looks Like
As Bob noted the other day, we're only now beginning to see the implementation of key pieces of this train-wreck. But we can already extrapolate the results, based solely on the two pre-existing nationalized services under which so many Americans already suffer: Medicare and the Veteran's Administration.
We discussed Medicare's many faults before, from its ubiquitous claims denials (far worse than any private insurer's) to its strangling of providers. But we haven't really looked at the VA; luckily for us, FoIB Mike Cannon has done the legwork, and it's not pretty:
"The Veterans Health Administration shows how incompetent the federal government is when it comes to making medicine a patient-centered enterprise ... John Lamie survived six roadside bombings in Iraq, only to have the Department of Veterans Affairs refuse to accept three months’ worth of medical tests he underwent for jaw and shoulder wounds — tests performed by VA-approved doctors at VA facilities."
Believe it or not, it actually gets worse from there.
At this point, of course, there are two potential outcomes: either ObamaCare© is repealed (less likely) or that a lot of folks will be looking elsewhere for care.
Time will tell.
We discussed Medicare's many faults before, from its ubiquitous claims denials (far worse than any private insurer's) to its strangling of providers. But we haven't really looked at the VA; luckily for us, FoIB Mike Cannon has done the legwork, and it's not pretty:
"The Veterans Health Administration shows how incompetent the federal government is when it comes to making medicine a patient-centered enterprise ... John Lamie survived six roadside bombings in Iraq, only to have the Department of Veterans Affairs refuse to accept three months’ worth of medical tests he underwent for jaw and shoulder wounds — tests performed by VA-approved doctors at VA facilities."
Believe it or not, it actually gets worse from there.
At this point, of course, there are two potential outcomes: either ObamaCare© is repealed (less likely) or that a lot of folks will be looking elsewhere for care.
Time will tell.
Medical Tourism Insurance
According to this recent article, the insurance broker Lockton Singapore has launched an insurance product to cover the cost of medical complications for medical travellers receiving surgery abroad.
The underwriter is QBE, the Australian general and reinsurance provider.
The article notes that residents from most countries around the world travelling to accredited hospitals are eligible for the policy. The policy only covers treatment in just over 300 hospitals accredited by JCI. JCI is an international accreditation body.
Note however,
Eligibility includes most countries - but not the US. None of the 300 accredited hospitals are in the USA.
I suspect the reason is the high cost of medical care in the US - and the underwriter is not willing to bear that cost. This strategy will keep down the premiums for this coverage. It also excludes Americans from the benefits of the coverage at other world facilities.
The underwriter is QBE, the Australian general and reinsurance provider.
The article notes that residents from most countries around the world travelling to accredited hospitals are eligible for the policy. The policy only covers treatment in just over 300 hospitals accredited by JCI. JCI is an international accreditation body.
Note however,
Eligibility includes most countries - but not the US. None of the 300 accredited hospitals are in the USA.
I suspect the reason is the high cost of medical care in the US - and the underwriter is not willing to bear that cost. This strategy will keep down the premiums for this coverage. It also excludes Americans from the benefits of the coverage at other world facilities.
Wednesday, June 02, 2010
BIG Food Pyramid Update
Well, not so much Food Pyramid as food itself. You know how we're supposed to be watching our weight in order to avoid fates worse than death?
Turns out, not so much:
“Being obese before you are 40 has no correlation to your health either. The risk that people are told about does not exist.”
Now, after 40 is, perhaps, another matter, although that's not necessarily a given:
"The report ... shows that between the ages of 25 and 70 there is little difference in the health of normal compared with overweight people based on the amount of medication they are taking."
Granted, that's only one metric, but it seems to me that it's a pretty important one. Does this mean that we should all start pigging out? Of course not: common sense hasn't been disproven (yet).
Still, pretty decent food for thought.
Turns out, not so much:
“Being obese before you are 40 has no correlation to your health either. The risk that people are told about does not exist.”
Now, after 40 is, perhaps, another matter, although that's not necessarily a given:
"The report ... shows that between the ages of 25 and 70 there is little difference in the health of normal compared with overweight people based on the amount of medication they are taking."
Granted, that's only one metric, but it seems to me that it's a pretty important one. Does this mean that we should all start pigging out? Of course not: common sense hasn't been disproven (yet).
Still, pretty decent food for thought.
Cavalcade of Risk: 4th Anniversary Edition is up
Julie Ferguson hosts the 4th Anniversary Edition of the Cavalcade of Risk. And there are a LOT of great posts, as befits an anniversary.
Do check it out.
And please consider hosting one yourself - just drop us a line!
Do check it out.
And please consider hosting one yourself - just drop us a line!
Tuesday, June 01, 2010
Medical Tourism Interview: An InsureBlog Exclusive
Last month, we mentioned a new resource available to those wishing to travel abroad for medical care. All Medical Tourism's site offers a variety of tools to help one determine availability and cost of various treatments. I was so impressed with the site that I contacted the folks behind AMT for more details.
I soon received a reply from Michael Thomas, the company's Chairman and CEO. We met up by phone last Friday, and here's what I learned:
InsureBlog (IB): What was your motivation to put this together?
Michael Thomas (MT): Back in 2000 or 2001, I received a gift certificate for a full checkup in Atlanta. I was impressed and began to make it an annual occurrence. A few years later, I found myself spending more and more time in Bangkok, and while there, check-up time rolled around. I decided to try out a local facility to see how it compared with the one in Atlanta, and my eyes were really opened. For one thing, the checkup in Atlanta cost about $3700 in total; in contrast, the one in Bangkok was only about $450. But the Bangkok facility was much nicer, the exam more thorough, and I had test results in a day instead of a week or more.
I eventually decided to "become a little wiser" and look into this as both a cost- and health-saving technique. So I began meeting with hospital administrators in Bangkok and Singapore, where I picked up a lot of general information on medical tourism, but had some difficulty with more specific kinds of details.
My experience with the Bangkok checkup was that these were more professional services than in the 'States; here, "preventive medicine is immature;" we're more geared to the reactive and the preventive.
IB: That's very interesting. So when you started putting this together, and as you continue to grow, how do you "vet" providers? We've interviewed the folks at Companion Global, who offer similar services, and they use Joint Commission International accredited facilities.
MT: As we sign up new providers we provide a clear listing of each provider in our directory. There, we outline the medical accreditations and if they are a member of the medical tourism association, as well as clearly state each provider's area of specialties. I think that they do their work thoroughly as we seek patient feedback regarding their interactions and satisfaction with providers, and in over two years we have not had a single problematic issue to resolve.
IB: We believe that ObamaCare© will have a negative impact on health care delivery here in the US. What's your take?
MT: Oh, absolutely. In fact, we recently put together a presentation on this issue, where we show that:
■ More employers will implement medical tourism as a method of cost-savings
■ As a result of the sudden increase of newly-insured, waiting times and doctor shortages will grow, making medical tourism even more attractive
■ As Medicare rolls continue to grow while reimbursement levels shrink, more hospitals here will opt out of Medicare altogether, exacerbating the situation
[ed: copies of the full presentation are available; just drop us a line]
It's really a case of simple supply and demand.
Michael, Thank You so much for your time and insights. We'll be sure to pass along any comments and questions from our readers.
I soon received a reply from Michael Thomas, the company's Chairman and CEO. We met up by phone last Friday, and here's what I learned:
InsureBlog (IB): What was your motivation to put this together?
Michael Thomas (MT): Back in 2000 or 2001, I received a gift certificate for a full checkup in Atlanta. I was impressed and began to make it an annual occurrence. A few years later, I found myself spending more and more time in Bangkok, and while there, check-up time rolled around. I decided to try out a local facility to see how it compared with the one in Atlanta, and my eyes were really opened. For one thing, the checkup in Atlanta cost about $3700 in total; in contrast, the one in Bangkok was only about $450. But the Bangkok facility was much nicer, the exam more thorough, and I had test results in a day instead of a week or more.
I eventually decided to "become a little wiser" and look into this as both a cost- and health-saving technique. So I began meeting with hospital administrators in Bangkok and Singapore, where I picked up a lot of general information on medical tourism, but had some difficulty with more specific kinds of details.
My experience with the Bangkok checkup was that these were more professional services than in the 'States; here, "preventive medicine is immature;" we're more geared to the reactive and the preventive.
IB: That's very interesting. So when you started putting this together, and as you continue to grow, how do you "vet" providers? We've interviewed the folks at Companion Global, who offer similar services, and they use Joint Commission International accredited facilities.
MT: As we sign up new providers we provide a clear listing of each provider in our directory. There, we outline the medical accreditations and if they are a member of the medical tourism association, as well as clearly state each provider's area of specialties. I think that they do their work thoroughly as we seek patient feedback regarding their interactions and satisfaction with providers, and in over two years we have not had a single problematic issue to resolve.
IB: We believe that ObamaCare© will have a negative impact on health care delivery here in the US. What's your take?
MT: Oh, absolutely. In fact, we recently put together a presentation on this issue, where we show that:
■ More employers will implement medical tourism as a method of cost-savings
■ As a result of the sudden increase of newly-insured, waiting times and doctor shortages will grow, making medical tourism even more attractive
■ As Medicare rolls continue to grow while reimbursement levels shrink, more hospitals here will opt out of Medicare altogether, exacerbating the situation
[ed: copies of the full presentation are available; just drop us a line]
It's really a case of simple supply and demand.
Michael, Thank You so much for your time and insights. We'll be sure to pass along any comments and questions from our readers.
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