Oh No She Din't!

(That's not a typo - it's yours truly trying to be "hip")

Maybe she just can't help it, but HHS Secretary Shecantbeserious just doesn't quite "get" why those of us who oppose the train-wreck that is ObamaCare© might take some slight umbrage at this:

"So, we have a lot of reeducation to do" [emphasis added]

For those historically-challenged readers, here's why it's so offensive, and telling:

"The re-education camp remained the predominant device of social "control" in the late 1980s. It was used to incarcerate members of certain social classes in order to coerce them to accept and conform to the new social norms."

Looks like Kathy let the ol' mask slip.

BlogRoll Update

I've been meaning to add Andrew Garland's entertaining and enlightening blog for some time, and am pleased as punch to have finally done so. You'll see the Easy Opinions link about 5 spots down from the top (look for the "NEW!" tag), and I heartily recommend clicking through.

You'll be glad you did.

Wolverines jump in the pool [UPDATED]

[Please scroll down for update]

"Michigan is set to launch a subsidized insurance pool for people who haven't been able to get coverage because of a pre-existing health condition, but it's not clear if the program will be big enough to handle everyone who wants to buy in."

Really?

"[B]ig enough to handle everyone who wants to buy in[?]"

One supposes that they honestly believe that they'll attract more than, say, New Jersey, but I'm not convinced. In order to be eligible, ObamaCare© requires that one be uninsured for at least six months, and (of course) be "uninsurable." In the event, the Grand Opening is tomorrow (August 31st), and officials estimate that there are some 3,500 Michiganders [ed: Michiganders?] who may qualify. As with Pennsylvania, coverage doesn't begin immediately; the earliest available effective date is October 1st.

Michigan has been given some $140 million as seed money for their version of the ObamaPool©, which tracks with Pennsylvania's $160 and Ohio's $150 million. They're also counting on folks ponying up anywhere from $200 to $700 a month in premiums (which are age- but not sex-rated). And of course it's a typical, generic co-pay plan (aka Phantom Insurance), which will increase utilization and, hence, costs. How much different (read: better) such plans would work if they were built on an HSA high deductible chassis. But we can't have that pesky personal responsibility component, can we?

There is, however, some good news: this plan, unlike some others, does not count a current pregnancy as a qualifying pre-existing condition (I confirmed this with the folks running the program). That should help delay the inevitable financial melt-down.

On the other hand, though, is this world-class non-sequitor:

"Plan administrators say the coverage will be more comprehensive and in many cases less expensive than typical Michigan policies for individuals."

Hunh?! More coverage at lower rates? Guess who pays for that?

But it gets better (or worse, depending on one's perspective):

"Many of those who will be in the plan aren't able to get commercial coverage at any price because they're so expensive to insure."

Let's see if I follow this: "more" coverage at "lower prices" for folks who can't get health insurance in the open (competitive) market because they're too "expensive" to insure.

Only in Lansing (or DC) could someone say that with a straight face.

[Hat Tip: FoIB Holly R]

[UPDATE]: While we've had our issues with Best's insurance ratings services in the past, they're still the "go-to" folks when trying ascertain a carrier's financial outlook. And based on Best's analysis, one has to wonder what the rocket surgeons in Lansing were smoking when they awarded this little plum:

"[Physicians Health Plan of Mid-Michigan]

Financial Strength Ratings
Rating: NR-5 (Not Formally Followed)
Outlook: Not Applicable
Action: Affirmed
Effective Date: May 21, 2010"

A rating of "NR-5" means that this carrier isn't even on Best's radar. Does this mean that the company's on the rocks? Of course not, but it does give one pause: after all, a carrier's financial ability is only as good as its underlying strength.

Or apparent lack of thereof.

Gift Ideas...

And then you can give her a colonoscopy for Christmas...

Maxine on Healthcare

[Welcome, Investor Village readers!]

From the mailbag:

[IMAGE OF "MAXINE" REMOVED AT

REQUEST OF TM HOLDER]

Let me get this straight. We're going to be "gifted" with a health care plan we are forced to purchase and fined if we don't,

written by a committee whose chairman says he doesn't understand it, passed by a Congress that hasn't read it but exempts themselves from it,

to be signed by a president who also smokes,

with funding administered by a treasury chief who didn't pay his taxes,

and financed by a country that's broke.

Now, honestly just ask yourself, what could possibly go wrong?

[Hat Tip: FoIB Laurel L]

From the mailbag: MassTravelers

"My husband and I are residents of Massachusetts. We will be quitting our jobs and traveling outside the country for several months. I hadn't planned on using COBRA since we will be out of the country and using travel insurance that covers other medically and otherwise. I am concerned about being fined for this. Is there a way to avoid fees if we can prove we are out of the country?"

This is a great question, with ramifications beyond Massachusetts. ObamaCare©'s (evil) mandate will have the same effect, and will of course affect Americans in the other 56 states, as well. It does seem unfair to require someone who's out of the country for an extended period to purchase insurance they probably won't need.

I contacted the Bay State's Department of Insurance, and was told that, if one is uninsured for less than 90 days, then it's not an issue or a problem. If it's more than 90 days (and it appears that this reader will, in fact, be gone longer than 3 months) then the fine is assessed. However: there's an exemption for folks who were uninsured because they were out of the country (such as our reader). These folks would have to file a special appeals form, but I was assured that this is not a big deal and that the fine would be waived.

The email continues:

"Also, when we return what is our best option for becoming insured if we do not become re-employed full time right away?"

I replied that, once they're back stateside, they can go online to the MassCare Connector to find coverage. Of course, the challenge there will be finding a plan that fits the budget and coverage goals, but is apparently the only real option left to Bay Staters in need of individual coverage.

That deals with the MassCare issue, but not the ReaderCare one. As Bob points out:

"Leaving the country with coverage allows you to have benefits around the world. Even if she is not traveling to a Schengen Convention country, at the very least she needs an international travel policy to supplement the back home stuff. If she relies on something like IMG alone she is exposing herself to some serious potential out-of-pocket.

Seems to me like she is willing to roll the dice and assume she won't need the US based coverage while out of country and assumes she can pick back up where she left off when she returns. Romneycare does not have waiting periods but it doesn't mean she won't come back and be able to get immediate coverage."

Something to consider.

Cavalcade of Risk #112: Med School edition

Ever wondered what it would be like to go to medical school? Well wonder no more. The first year med student behind the Notwithstanding blog takes this week's Cavalcade of Risk to class. Don't be late!

Bleg: We need a host for the 10/6 Cav - please drop us a line to claim it.

Running up the score...

As housing sales plummet, it may be instructive to draw some parallels:

"Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas."

Try this:

"Sales of new high risk pool insurance plans plunged last month, despite the fact that they are readily available and require no underwriting."

Moving on:

"The irony is that, in failure, the GSEs (Fannie Mae and Freddie MAC) have become more important than ever. Private lenders, which once regarded a mortgage secured by a home as a highly safe investment, now see it as highly risky."

Versus:

"The irony is that, in failure, ObamaCare© has become more important than ever. Private insurers, which once provided insurance to some 85% of those not insured by the government, now find themselves unwilling to issue plans on children because of onerous underwriting handicaps."

Of course:

"This means that sudden withdrawals of support might deepen housing's depression."

Or:

"This means that sudden withdrawals of plans and carriers from the market might lead to even more uninsured."

Shall we go on?

Let's:

"The single-minded promotion of homeownership failed and, paradoxically, undermined the American dream."

Meaning:

"The single-minded promotion of providing health insurance to an additional 10-13% of Americans has failed and, as intended, undermined the American dream."

That about sum it up?

[Hat Tip: Ace of Spades]

Grand Rounds: The Cartoon edition

Laughter, they say, is the best medicine (although I prefer penicillin). This week's Grand Rounds illustrates that theory, to great effect. Stop by for a smile and some great info.

Lexis-Nexis Insurance Community: Special Announcement

Sharp-eyed readers may have noticed a slightly different Lexis-Nexis badge in our sidebar. After much deliberation, the folks at that august organization have confirmed InsureBlog as one of the Top 50 Insurance Law Blogs for 2009 (yeah, they're a little slow, but they're lawyers...).

We’re proud as punch, especially since it’s “on the merits” and not an internet voting arrangement.

Click here for the complete list.

Just to clarify: The 2009 appellation includes the current year – this isn’t “old news.”

More from the "I Told Ya So" files

So much for the health care, er, insurance "crisis::

"Just two people in New Jersey will begin receiving coverage Monday under new plans created by federal health care reforms."

The Garden State's new Risk Pool - like those in other states - requires one to have been uninsured for at least six months in order to be eligible. The plans are age-rated, and come in two flavors, neither of which, apparently, are palatable to New Jersey residents who might otherwise qualify.

This should come as no surprise; as we noted long ago, folks are reluctant to sign up for these kinds of plans, even when they're free, let alone upwards of $800 per month. And it's not for lack of interest:

"[M]ore than 600 applications were downloaded and 268 information kits were sent out" once the plan went online at the beginning of the month. Yet only two such plans were actually purchased.

Let me repeat that: only two such plans were actually purchased.

While it may be a surprise to gummint types, we agents have known all along that insurance is rarely purchased: it is sold. Of course, this point is lost on the folks in DC (and state capitals).

Gee, wouldn't it be nice if there was some existing distribution channel to help folks make this purchase?

From the mailbag: About ObamaCare© and your W-2

No blog (or bloggers) hold ObamaCare© in more contempt than IB, but we have been (and continue to be) scrupulously fair in our criticism of this train-wreck. In that spirit, it seems necessary to debunk an email currently making the rounds (in fact, there are several versions) which goes something like this:

"Beginning in 2011, employees covered under their company's health insurance plan will see the value of that plan reflected on their W-2's, and they will owe taxes on that value."

Wrong on three counts:

First, the relevant portion of Obamacare© doesn't take effect until 2018.

Second, only so-called "Cadillac plans" are subject to this provision.

And third, there is no "tax" on these benefits. Carriers which continue to sell relevant plans will be taxed on them, and of course no business (including insurers) pays any taxes, so these increases will be passed along. But there's no specific amount that can be imputed to that increase, so individuals won't see it reflected on their W-2's.

There are lots of reasons to oppose ObamaCare©, and of course most people want to see it repealed, but let's continue to base our arguments on the facts.

Your Tax $$ at work

We've discussed the medical benefits of beer before, most recently as a risk management tool against developing prostate cancer.

Unfortunately, it turns out that beer may have other, less helpful side-effects, and it only took two major studies to determine that:

"a few drinks can suddenly make other people seem more attractive -- and receptive -- than they actually are, according to two new studies that help explain the "beer goggle" effect."

No word yet on whether or not "beer goggles" are covered vision-care expenses.

Helpful Carrier Trick

As regular readers know, we've been a leading edge resource for ObamaCare© information. Some folks, though, would prefer to have more details about application of these changes.

Fortunately, Humana has prepared a handy little booklet which should answer most (if not all) of the most pressing questions. It's available here.

As always, we're available to answer more detailed questions; feel free to drop us a line or leave a comment - we'll do our best to provide accurate and timely answers.

Cavalcade of Risk #112: Call for Submissions

The Notwithstanding Blog hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 23rd). 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.

We need a host for the October 6th Cav. Help??

Good News/Bad News Thursday

First, the good news, at least for those undergoing chemo for cancer:

"Yale researchers have developed a medication based on a Chinese herbal recipe more than 1,800 years old to counteract the adverse effects of chemotherapy."

I've always had a soft spot for "alternative medicine" (although I've been assured that Frozen Margarita's are not considered such). This "new" protocol is designed to alleviate "gastrointestinal side effects" of a particular chemotherapy med called CPT-11 (aka "Irinotecan"); it's been tested, with some degree of success, on mice. In fact, it seemed to actually enhance the latter's efficacy.

Even though the treatment is derived from a "recipe" that's almost two thousand years old, it's been refined to a point where it can be manufactured in a consistent way. No word yet on when, or even if, it'll be available.

The bad news is for folks who still believe, despite overwhelming evidence to the contrary, that they'll be able to "keep the insurance they have:"



Remember, though, we had to "pass the bill to see what's in it." Dont'cha just love surprises?

HWR: Health Reform Implementation edition

HWR co-founder Joe Paduda hosts this week's Health Wonk Review. It's a great "survey course" on health care policy and polity, especially if you're interested in health care "reform." Do check it out.

Um, about those tax breaks...

You're not getting them:

"Fewer than 2 million of the nation’s 6 million companies with employees qualify for the small-business tax credits included in the new health insurance reform law."

Says whom? Says the National Federation of Independent Business. Now, we've had our issues with the NFIB in the past, but this seems to comport with the fact that there are so many hoops through which to jump that most small business - which the "break" was supposed to benefit - will, in fact, be ineligible.

Why is that?

Here's why. To be eligible, an employer must meet all three of these criteria:

■ have fewer than 10 employees
■ with an average compensation of less than $25,000
■ and pay at least half of their health insurance premium

For one thing, how many employers can still afford to pay for "at least half" of their employees' premiums? I daresay not many. And good luck, by the way, if you're hoping to become the 11th employee at XYZ Widgets, or expect that raise to take you over $25k a year if you're fortunate enough to already work there.

It's far more likely that these employers will drop group cover altogether: that's a lot more cost effective than some potential tax break.

Earlier this week, Bill posted his findings regarding the Kaiser Family Foundation Health Reform Subsidy Calculator, a handy tool for individuals. The NFIB has their own little widget, which can help employers determine whether or not they're in line for this much vaunted tax break.

And what about all those entrepreneurs, both voluntary and involuntary? Well, they're outta luck, as well.

But surely, even without the tax credits, insurance premiums will decline as promised, right?

As will come as no surprise to regular readers, not so much:

[Video Hat Tip: Hot Air]

Is this a leap?

What would you think if the Speaker of the House were to say:

"There is no question there is a concerted effort to make this a political issue by some. And I join those who have called for looking into how is this opposition to [health care reform] being funded ... something we've been working on for decades, something of great interest to our [country] as we go forward to an election about the future of our country."

Would she be referring to folks who object to a major change in how health care is delivered and financed? People like the Cato Institute, or Tea Party participants, or even humble bloggers? Wouldn't that be using the power of the federal government to criticize its critics?

Now, you may be wondering why I would even think that Ms Pelosi would make such an outrageous suggestion. Certainly she would never advocate silencing principled opposition, denying us our 1st Amendment rights?

Right?

Not so much.

Here's what she said yesterday:

"There is no question there is a concerted effort to make this a political issue by some. And I join those who have called for looking into how is this opposition to the mosque being funded ..."

So if she's comfortable threatening those opposed to the Ground Zero Mosque, a position supported by 70% of the citizenry, then why would it be a stretch to believe she feels the same way about ObamaCare©, something opposed by almost as wide a margin?

Funny, it's mid-August, yet I feel a chill in the air.

Redefining "Child"

Jane and Mike are insured under an individual medical plan, and their 20 year old son Tom is covered under a similar, separate one. Yesterday, they emailed me to ask when and how they could add Tom to their own plan, so that they have just one, family deductible. Under ObamaCare©, "children" encompasses young'uns up to age 26 (or 28, here in the Buckeye State. Back to that shortly).

Since coverage for "children" continues to be a moving target, I could answer based only on the process as it stands today. At his age 20, this coverage is NOT guaranteed issue, so he'd have to complete a new application. Assuming he's approved, he would then be added to Jane and Mike's HSA plan, and Bob's your uncle.

I can certainly see the value of this process from Jane and Mike's perspective: instead of two sets of deductibles (one for Jane and Mike, and a separate one for Tom), there's just the one family deductible. It's likely that Tom's rate as a dependent will be lower than his separate plan.

All good so far, right?

From Jane and Mike's (and Tom's) point of view, of course it is.

But then it gets sticky. Under ObamaCare© rules, Tom can stay on the folks' policy until he's 26. But in one of those Stupid Government Tricks, Ohio has decreed that "the insurer must offer to cover the unmarried child until the child's 28th birthday" (assuming he or she is otherwise still eligible).

Now, discerning readers may ask "what boots it? What possible difference does it make to you, or the carrier?" And that's a valid question.

The problem is that dependent coverage is underwritten and priced for, well, dependents, not adult children. We're already seeing the effects of the new rules on pricing and availability; this little "trick" serves to exacerbate them.

[Hat Tip: FoIB Kelly W and FoIB Fred W]

Told Ya So: Money Talks Edition

As noted here:

"And so, by the stroke of a pen on March 23, the administration may well have set this country on an irreversible course toward a two-tier health insurance system - one for haves, and one for have-nots."

Think Mike was overreaching?

Think again:

"Dallas' top Democratic donors will cut big checks to share dinner later this month with House Speaker Nancy Pelosi ... Fred Baron, was dying of bone marrow cancer. His only option was an experimental drug whose manufacturer refused to give permission to use it for Baron's condition ... Somehow – Blue still isn't sure how – Pelosi cajoled the FDA to find a legal justification that let Mayo administer the drug, even without Biogen's consent."

Haves and have-nots, who lives and who dies.

Do the math.

[Hat Tip: Ace of Spades]

Obamacare Tax Planning

I've been playing with the Kaiser Family Foundation Health Reform Subsidy Calculator and noticed something interesting...

Scenario One:
$93,000 annual income
Family of 4
Age 50
No Employer Coverage
Estimated annual premium: $16,858
Out-of-pocket cost after government subsidy: $8,835

Scenario Two:
$94,000 annual income
Family of 4
Age 50
No Employer Coverage
Estimated annual premium: $16,858
Out-of pocket cost: $16,858 (ineligible for subsidy)

Bottom Line:
At age 50, a $1000 increase in income costs $8000 in additional premium.
At age 60, a $1000 increase in income costs $15,200 in additional premium.
At age 64, the $1000 increase adds $18,500 to the premiums.

Smart guys. Really smart.

Avastin Goes Under the Bus [UPDATED]

[Please scroll down for update]

Let's say that you're being treated for breast cancer. Four-and-a-half years ago, Bob observed that folks "really don’t need health insurance for routine things like doctor visits for mundane afflictions or even for most meds. Instead, what they need is catastrophic coverage."

So what?

Here's what:

"Avastin is an example of a tier 3 or non-formulary medication. You won’t find it on any carriers list of meds that can be purchased for a $20 copay. Instead it will be in the non-formulary column that could carry a $60 copay or even higher."

Of course, that was then, and this is now:

"Federal regulators are considering taking the highly unusual step of rescinding approval of a drug that patients with advanced breast cancer turn to as a last-ditch hope.

The debate over Avastin, prescribed to about 17,500 women with breast cancer a year, has become entangled in the politically explosive struggle over medical spending and effectiveness that flared during the battle over health-care reform."

Ooops.

Here's the problem: it's one thing for Medicare, or a private insurer, to put a med on it's "less favorable" list; in essence, telling folks that they're going to pay more out of pocket for a given medication. But when the FDA rescinds approval for that drug, it means that it is no longer available, at any price.

Of course, given the predilections of our new CMS head honcho, Donald Berwick, this is of a piece with the idea that rationing care is the way to go:

"The FDA is not supposed to consider costs in its decisions, but if the agency rescinds approval, insurers are likely to stop paying for treatment."

The takeaway here isn't that insurers may stop covering Avastin [ed: another reason why consumer-centric health care could have been key] but that the gummint, in the form of Medicare and Medicaid, now have justification for denying coverage for it. And if you think they'll stop at Avastin, I have some prime property to sell you.

And who's the hardest hit? Not the elites: they have their own plans, and the means to pay for non-covered med's. No, the folks who will pay the ultimate price for this are those least able to afford it:

"...cancer patients would lose eligibility for a program in which Genentech caps the annual cost of the drug at $57,000 for women with annual incomes of less than $100,000."

That's aimed square at (what's left of) the middle class; those less fortunate (i.e. Medicare and Medicaid beneficiaries) pay that price, as well.

Poppa Washington: Be elite, or die trying.

UPDATE [from Bob]: “…while Avastin does not extend life, it does extend quality of life, alleviating pain and suffering for women who are suffering from late-stage breast cancer."

More Americans will not die if Avastin is withdrawn for breast cancer. But, since the agony of end-stage cancer will come sooner rather than later, almost 18,000 women a year will soon wish they were dead, thanks to Obamacare.

Truth to Power: Healthcare Edition

Picture + 1000 words. Some assembly required.

Some reflections on the "Pool" [UPDATED]

[Please scroll down for update]

I've been giving more thought to the whole process of the new Ohio ObamaPool©, and have come to two conclusions (thus far):

There are some rather stringent requirements put on me as an agent (see below), a relatively meager "finders fee" associated with steering folks to the Pool, and the likelihood that this will be a fairly labor-intensive process. So, I've decided to charge a non-refundable $50 retainer, upfront, before I will answer any questions about the Pool or help folks through the process of accessing it. As this is a "non-commissionable" product, I feel justified in doing so.

And what's so "labor intensive" about it? Well, consider that, in order to "sell" one of these, I need to complete and submit a special Broker Verification Form with each "application," and that this will require some fairly heavy pre-screening on my own part. And there's this rather daunting verbiage to which I am required to attest:

"I certify that I understand the eligibility, enrollment and anti-dumping requirements required by Section 1101 of [ObamaCare©] and I have explained these requirements to the applicant ... and that the enclosed application is complete and meets these requirements."

Okay, that seems pretty straightforward, but, as FoIB Rick B wondered:

"[O]ut of curiosity, as an agent, if a pregnant woman came to you and knew the high-risk pool would allow her to get immediate coverage. Assume she already has coverage, but her plan excludes maternity, how would you advise her?"

Under "normal" circumstances, it's up to the applicant/insured to prove prior coverage (via a Certificate of Creditable Coverage). It seems to me, then, that the carrier acknowledges that it has no way to independently verify prior cover. So, if someone comes to the new Pool, and is otherwise eligible (denied or waivered, pregnant, etc), how would Medical Mutual (MMO) prove that this individual had previous coverage (assuming it wasn't with MMO)?

For example: Sally is insured with Humana under an individual plan with no maternity coverage. She's now 3 months pregnant. Why not submit an app for the Pool, mark "no" for prior insurance, and have immediate cover for the pregnancy? Marking "no" means that MMO would have to prove a negative; i.e. how would they be able to prove she DID have coverage? And if I was not her agent for the Humana plan, how would I be any the wiser?

One answer might be for MMO or HHS Secretary Shecantbeserious to contact Sally's doctor. But if she's preggers, especially early on, why not just switch doc's? At $5000 or $6000 (or more!) for the claim, there's a pretty powerful incentive to be "creative."

Comments?

UPDATE [8-19-10]: A colleague with whom I was discussing this pointed out - correctly, I think - that in this instance Sally isn't really lying when she answers "no" to prior coverage. After all, her Humana plan does not cover her for maternity; therefore she is, technically, uninsured.

That's what "is" means, right?

Alien insurance?

We have this morning two apparently disparate items for your consideration.

First up, from FoIB Jeff M, this rather startling video documenting the cost of "the undocumented:"



That's a lot of money spent on health care (not to mention attorneys' fees) for folks who shouldn't have even been here in the first place.

Second, via Ace of Spades, is this rather disturbing development regarding AIG and sharia:

"The financial jihad has now achieved its greatest coup so far: It has co-opted the U.S. government as a partner. In fact, if you would like to see a contributor to the jihad, have a look in the mirror."

As with GM and Chrysler, we taxpayers own insurance behemoth AIG. In addition to bailing them out, we're also complicit in their new "investment" strategy: sharia law.

Under Islamic sharia law, one is forbidden to charge (or pay) interest. But AIG is now operating under "SCF" (sharia-compliant finance), so at least some of its "investments" will now fall under that rubric. This means, for example, that it can no longer invest in companies that deal in, for example, pork, or alcohol, or even those which support our own armed forces.

Inasmuch as AIG needs to rebuild its capital base, this presents a problem:

Insurance companies need investments for several reasons: first, because they need to maintain and grow their financial assets in order to be able to pay future claims. They also need to be able to provide their policyholders who own cash-value policies (e.g. whole and universal life) with interest, as they are contractually bound to do. Tying their hands in this fashion makes it well nigh impossible to accomplish either goal.

Talk about hope and change.

What Spock meant: "Live Long and . . . Collect Your Father's Pension"

From the New York Times yesterday,

“the police found the body of a man thought to be one of Japan’s oldest, at 111 years, mummified in his bed, dead for more than three decades. His daughter, now 81, hid his death to continue collecting his monthly pension payments, the police said.”

“To date, the authorities have been unable to find more than 281 Japanese who had been listed in records as 100 years old or older.”

Huh? What?

Can there possibly maybe potentially be Japanese 90 or older who are deceased but still collecting pension? 80 or older? 70 or older?

Say it ain’t so, Ito! Say it ain't so!

More HSA Mischief

Only this week I learned that HSA's will not reimburse over-the-counter medications without a doctor's prescription, starting January 1 [more here].

So medications such as antacids, allergy & sinus pills, laxatives, pain relievers (Tylenol, aspirin, Aleve etc), ointments for baby rash, cough/cold/flu medications, and sleep aids, among others, will require a doctor's prescription if you want to pay for them using your HSA.

C'mon. Sudafed? Aspirin?

This would seem only silly and petty except that its intent is doubtless to raise taxes (yep, gotta pay for Obamacare). It will do this by reducing the tax preferments in HSA's. The administration is consistent here--its view of HSA's is that they benefit upper-income people. Well, they can only benefit people who actually, you know, PAY taxes. That much is true.

Will this new rule harm HSA's? Well, sure. But the administration does not care about that and likely even intends to harm HSA's. After all, the more people who accumulate an HSA, the less people would have to rely on the government to subsidize their health insurance. Can't have that.

This petty tactic reminds us again just how government "competes". A government does not "compete" by trying to improve its services. It "competes" by using its powers to make rules that disable or destroy its rivals. It is an abuse of words to suggest that it's possible for a private entity to "compete" with a government.

Lies, more lies, and ObamaCare©

Here's a question:

"What does global warming have to do with ObamaCare©?"

Here's an answer:

"Global warming data apparently cooked by U.S. government-funded body shows astounding temperature fraud ... the two institutions show temperature maps for northern Lake Michigan registering an absurd 430 degrees Fahrenheit"

For those of us who are science-impaired, the boiling point of the water in Lake Michigan is 212 degrees; I'm still looking for reports on the late Lake Michigan.

Anyone still lend any credence to the health care "crisis" that precipitated ObamaCare©?

[Hat Tip: Ace of Spades]

Cavalcade of Risk #111: Biff! Bang! Pow! Edition

Nancy Germond presents this week's Cavalcade of Risk, replete with great references to a certain 60's icon. Wing on over for the exciting conclusion.

From the mailbag: Boutiques, Co-pays and HSA's

FoIB Jeff M writes:

"My wife's primary care provider is going out on her own and will no longer accept insurance, but her business model is a flat-fee based practice ... since the PA-C does not contract with any insurance companies, can my wife use her HSA for the fee?[practice] does not contract with any insurance companies, can my wife use her HSA for the fee? "

The short answer is: it depends.

If by "fee" one means the annual subscription cost for access to the practice, then the answer is no. But if it's a flat fee per visit, then that fee would be considered an eligible expense for both a Health Savings and Flexible Spending Accounts.

This question, by the way, is more relevant than it might at first appear:

There can be little doubt about the looming shortage of primary care physicians, and it's also likely that more and more of those in practice will be giving great consideration to the "boutique" or pre-paid business model. And as reimbursement rates continue to decline, it's likely that more practices will begin declining to accept health insurance, optinng instead for the fee-for-service model which was, after all, the hallmark of health care before insurance became so prevalent.

Something to consider in light of ObamaCare©'s necessary Medicare cuts.

How Much is Too Much Ado About Nothing Much??

Consumers' Union recently published a report entitled "How Much is Too Much?"

I've read the CU report carefully. I think it's much ado about nothing much.

The CU report questions the surplus accumulated by not-for–profit Blue Cross and Blue Shield plans ("Plans"). CU clearly believes it’s a good idea to drain this surplus down to some level much closer to the minimum amounts regulators thought was necessary 20 years ago. CU does not suggest what level of surplus may be the right amount. But it is apparently convinced that the present surpluses are too high. CU suggests reducing these surpluses by using a large chunk of them for "rate stabilization" implying that rates might actually level out. In fact, leveling of rates is not likely.

I think the main flaws in the report are

(a) CU ignores or glosses over significant changes in the insurance business over the last 20 years that have increased risk (e.g., the huge growth in medical costs, expanded federal and state regulation, more litigation, consumerism, et al),
(b) after misreading insurance business conditions, CU argues that the financial risks of underwriting losses, insurance business reversals, or even insolvency are in fact much lower today compared with 20 years ago, and
(c) CU believes that taking surplus amounts from the Plans is a practical means to achieve "rate stabilization" without harming the Plans' financial strength.

OK, let's look at "rate stabilization".

1. CU states that America’s Blue Cross plans together hold “more than $32 billion in surplus as of the end of 2008.” (p.5). The reader is given no information to compare the $32 billion to anything but regulatory minimums. This ginormous number is intended, I suppose, to make us gasp and check our wits at the door.

So Table 1 on page 8 compares the surplus of several Plans to the regulatory minimums. CU presents this information as evidence that the Plans are holding too much surplus.

2. But look at more meaningful comparison - surplus to revenues. [I could find revenues for 4 of the plans -a bit surprising how difficult it is to find this information.] The 4 plans I looked at are Alabama, Arizona, Michigan, and North Carolina. Together the 2008 revenues for these plans were $38 billion. The combined accumulated surplus for these 4 plans at the end of 2008 was $4.8 billion. In other words, the total accumulated surplus for these plans was about 12% of current revenues. OK, so how much of this might be used for "rate stabilization"? CU estimates the non-solvency portion of total surplus as 15% -25% of total surplus. (p.12). That seems like a pure guess, but let's play along. Using the top of this range, the Plans would hold 75% of their accumulated surplus for insolvency. That leaves 25% of the surplus for other purposes. That’s the part of the surplus that CU is complaining about. Using CU's method of averaging Plan results together, 25% of the 12% accumulated surplus is about 3% of revenue. So if these 4 Blue plans reduced their accumulated surplus by the amount CU suggests, the impact on rates would be . . . about 3% . . . for one year.

Why only one year? Because the Plans can't spend the same dollars more than once.

3. Now let’s suppose your family insurance rate with a not-for-profit Plan is $1,800 per month. Using the surplus CU says is excess, your Plan might allow 3% subsidy in Year 1, which would reduce your rate to $1,746 per month. That would save you about $650 for the year. Keep in mind medical costs increase by about 10% a year. So "rate stabilization" might mean your rate increase for Year 1 was only 7%. Unfortunately, that’s not the whole story. Your rate would still rise to $1,980 = $1,800 x 110% for Year 2. Why? Because medical costs continue to increase at 10% per year, and the rate needed for Year 2 will the same as if there had been no subsidy in Year 1. So for Year 2 your rate increases from $1,746 to $1,980, or more than 13%. An increase of 7% followed by increase of 13%. That's "rate stabilization".

4. But that’s still not the whole story. The 13% rate increase for year 2 is larger than the 10% rise in medical costs. Your Plan's ability to keep and grow membership has been weakened vs. other insurance companies whose rates go up by a lesser amount. The higher rate increase may attract the attention of someone like HHS Secretary Sebelius who has no interest in keeping your Plan strong. Also, because your Plan spent down its surplus it is less financially able to withstand further underwriting losses - or to absorb some truly significant loss that might even threaten the Plan’s solvency. So your Plan's financial risk is now greater than before, while its premiums are lower than before. (Think about it: as your Plan’s risk grows, yours does, too.) Your Plan may also find that borrowing money to finance new products or update its systems is more costly if its surplus is thin. These outcomes are ultimately costly to you and to the Plan and all are avoidable.

5. CU states that surplus used to "stabilize rates" could be replenished “in periods when rate pressure was relatively modest”. (p.14)

CU does not cite any period in which this actually happened. I can’t think of any such period, either. Competitive and regulatory pressures on premium rates have steadily increased, not diminished. This makes it more difficult to raise rates, not less. Maybe when pigs fly to a hockey game in hell, rate pressures might become “relatively modest” for some short period of time. Maybe.

Would you bet your own money that will happen? I think CU fails to make a case for betting Blue Cross’ money on it.

No matter how we might wish it to be otherwise, tinkering with the amount of premiums simply has no effect on the continuing rise in the cost of medical care.

6. In sum, CU advocates an increase to regulatory authority, in order to force not-for-profits to bear greater business risks and, at the same time, reduce their contingency reserves to some undefined bare minimum.

What could possibly go wrong?

Cavalcade of Risk #111: Call for Submissions

Nancy Germond hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 9th). 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.

Throwing a Keystone into the Pool

Like Ohio, Pennsylvania's now opened up their High Risk ObamaPool©. Called the PA Fair Care Plan, it's also built on what looks like an off-the-shelf PPO plan, with a few "tweaks." For example, only generic meds are covered (unless none's available). And, of course:

"Maternity and Newborn Care (31 days): 80% after deductible"

That is, "same as any illness." As we've mentioned before, this is a terribly expensive benefit (and completely inappropriate as an insured expense), and often (generally?) not available in the "regular" individual market without great cost and additional waiting periods. And, of course, pregnancy is one of the eligibility "triggers." As in Ohio, one must be uninsured for the prior 6 months (or longer); unlike Ohio's plan, coverage is not effective almost immediately:

"On average, it takes four to six weeks for an application to be processed after we receive your 1st monthly premium payment."

That's helpful to the extent that Pennsylvania's $160 million ObamaPool© funding may not run out quite as quickly as Ohio's. And speaking of funding, it's interesting to note that the premium is "about $283.00" per month. So is that a good deal, or a bad one? Depends on one's perspective, doesn't it?

One must provide either proof that one has been denied coverage (or offered coverage with one or more exclusions) or a letter from one's physician "stating that [one has] an existing medical condition that may result in denial of creditable coverage by a health insurance company." The Pennsylvania list of acceptable medical conditions is actually two-and-a-half times as long as Ohio's.

Medical Mutual is the insurer of choice for Ohio's Pool; Pennsylvania has selected its Blue Cross carrier, Highmark. One wonders who lost that particular bet.

In the event, all of these plans are due to "sunset" at the end of 2013; the so-called "Exchanges" are due to come on-line the first of January, 2014. We all await with bated breath.

[Hat Tip: FoIB Bob D]

Sew what?!

While we're quite hard on the MVNHS© and CanuckCare©, we would be remiss not to point out that these socialized medical schemes aren't the only ones with major issues. A major problem with goovernment control of health care is that government really controls access to health care. And as it turns out, Sweden's much-vaunted bikini team doesn't hold exclusive rights to the term "skimpy:"

"A 32-year-old took the needle into his hands when he tired of the wait at Sundsvall hospital in northern Sweden and sewed up the cut in his leg himself."

The victim, er, patient had cut himself while renovating his kitchen, and was directed to the local health clinic. After being ignored for an hour, he looked around, found a needle and thread, and proceeded to stictch himself up, thereby saving time and money for the obviously over-burdened "health care" facility.

No harm, no foul, right?

Um, not so much:

"The man was later reported to the police for his impromptu handiwork."

Yes, you read that correctly: he was actually accused of "criminal dispossession ... for having used hospital equipment without authorization."

Welcome, by the way, to the brave new world of ObamaCare©. Think that can't or won't happen here? Given that the gummint can force you to buy insurance or face criminal penalties (including jail time!), why would you believe that self-help would be condoned?

[Hat Tip: PowerLine]

Up, up and away with the Health Wonk Review

Dr Jaan Sidorov presents a high-flyin' Health Wonk Review, featuring a lot more than a skimpy bag of peanuts. Hop on board!

Matlock Blows It

Looks like ObamaCare© is about to zing you again:



What, you really think that ol' Andy is talking about this because he believes it? Please. First, as a senior citizen, he's about to see his own Medicare benefits - including choice of doctors - severely curtailed (or maybe not: I'm sure the SAG has its own little game going on). Second, none of what he says is true:

"This year, like always, we'll have our guaranteed benefits"

Except, of course, we won't: between employers dumping their group plans and uninsured folks who have to wait 6 months - and have major health issues - to even buy insurance, that "guarantee" is deader'n Aunt Bee.

"[M]ore good things are coming. Free checkups, lower prescription costs..."

Objection, your honor!

Checkups aren't "free:" either the insured or the taxpayer is paying for the insurance, or the doc has been enslaved. "Lower prescription costs?" Hardly: we're about to see increased taxes on any number of medical devices, as well as increased taxes on the R&D folks.

The best part? You and I paid almost three quarters of a million dollars for this parody of itself.

Sheesh.

[Hat Tip: Ace of Spades and JWF]

ObamaCare© Changes (Pretty Much) Everything

Let's start at the top with the new "Grandfathering" provisions (which if course begs the obvious question: what about Grandma?). These make it pretty much impossible to keep the insurance that you currently have, because any changes you might like to make to it (like increasing deductibles or co-pays) will require a new set of forms:

"Starting with benefit changes being submitted Monday August 2nd [MMO is] requiring Groups and Individuals to complete the attached form and for this form to be included with the benefit change submission. MMO is requiring this form to be completed to ensure that Groups and Individuals are aware that they may lose Grandfathered status with their plan change."

And what does "Grandfathered status" mean? Well, it's the provision that renders your plan immune to the penalties and requirements of ObamaCare© except, of course, it doesn't (since you have to complete a new set of forms). This may not be a big deal for an individual, but it will be a major migraine for small groups:

"Member cost sharing for in-network preventive benefits" is removed, meaning that the plan will now have to include first dollar preventive benefits. While that may, in fact, be a good idea, it comes at a price.

As we've mentioned before, there's a whole new (and complex) "internal claims appeal and external review" process.

And just what kinds of "changes" would trigger these requirements? Here are just a few of the seemingly simple but dangerous items:

■ Increasing co-insurance (thinking about an HSA plan? Fuggedaboutit!)

■ Increasing employees' share of the premium (looking to cut some costs by asking folks to chip in an extra 10% means losing your status - wonder how many actual, you know, jobs will be lost due to this provision alone).

■ Changing carriers, fer Pete's sake! Perhaps the simplest, most cost-effective means to reduce premiums, and it's a no-no.

We've said it before, and will state it - unequivocally - again: this is the final nail in the employer-based health care coffin. Now, I happen to think that severing the tie between employment and health insurance is actually a good thing, but this is most assuredly not the way to do it.

Killer Grand Rounds

Life in the Fast Lane presents this week's collection of "killer" medblog posts. Oh, and watch out for the Funnel Web Spiders.

Jump in the Pool, Make $50

Medical Mutual of Ohio is the official carrier for Ohio's new ObamaPool©, and starting today, the pool is open for business:

"Medical Mutual will begin accepting applications for the Ohio High Risk Pool program, with coverage to be effective for the first enrollees on September 1, 2010."

What's interesting is that they're offering a finder's fee for agents to steer folks into the pool. As an agent, I'm pleased that any efforts I make to encourage folks to take advantage of the program will be rewarded in some way (unlike, say, Cigna). On the other hand, there are a lot of hoops through which to jump, which make the $50 "reward" somewhat questionable; for example, I'll have to confirm an individual's eligibility and help them complete and submit the paperwork (including some onerous documentation). I'll also need to collect and submit my new client's check, as well as my own "Broker Verification" form.

Those seeking to purchase coverage through the ObamaPool© have some hoops of their own, which include (among others):

" ■ Be a citizen or national of the United States or lawfully present in the United States;
■ Be uninsured for six months prior to the date the person applies for coverage;
■ Have a qualifying pre-existing condition as evidenced by a denial of coverage by two insurers, or by documentation from a healthcare provider."

My biggest issue is with the second: why six months? Why not 2 months? Or a year? This is arbitrariness for its own sake. In fact, it seems to me that the shorter the better for those who are uninsured. And isn't that one of the stated goals of ObamaCare©: to insure the uninsured?

Or am I missing something obvious?

I'm also having trouble with one of the alternate qualification requirements:

"Written certification by a licensed physician or nurse practitioner, issued within the past six months, certifying that the individual has a history of or suffers from a qualifying medical or health condition."

On the one hand, the site lists almost 100 different qualifying conditions, from Addison's Disease to Wolff-Parkinson-White Syndrome (no word on Zuska's Disease). And you'll need to bring that list with you to the doc. Which of course begs the question: who pays for that doc visit if you're uninsured?

I think we already know the answer to that.

So you have a very serious illness and need insurance. You've been uninsured for at least half a year, and now you can purchase insurance that can take effect in as little as two weeks' time. But what can you buy, and how much will it cost?

There are two plans available, one with a $1500 annual deductible, the other at $2500. Once that deductible's been met, there's an additional $3000 or $4950 in co-insurance, depending on which deductible you choose. The plans themselves appear to be based on the company's "Elite" plan configuration.

Both options include a $30 co-pay benefit for office visits ($50 for specialists), and a $40 urgent care co-pay. Nice. There's also first-dollar preventive benefits for things like mammograms and immunizations. Hospitalized? No problem, the plan takes care of 80% of your covered expenses after the deductible's met; unless it's an ER visit, for which you'll be dinged a reasonable $200 (which they'll forego if you end up admitted to the hospital).

There's even a prescription drug card benefit, including a break if you choose mail-order (home delivery). Heck it even covers "The Pill." All in all, a very nice plan (although I'll remind readers that, around here, we call that "Phantom Insurance").

And since this is part of ObamaCare©'s effort to reduce the number of uninsured, I'm sure it's a bargain.

Fortunately, the site includes handy rate charts, as well. Let's see how the numbers stack up:

Let's take a typical Columbus area resident, say a 27 year old non-smoker (interestingly, the rates are unisex). Should you opt for the $1500 plan, the monthly premium would be $150 (there's a 25% surcharge for smokers). The $2500 plan would save you $14 a month (or $168/year). Frankly, that's not even close to enough of a rate differential to encourage folks to opt for the higher deductible plan.

But let's compare that rate to those for a "healthy" 27 year old, using MMO's own plan design and rates. In that case, Joe would pay just $96 and Jane $133. But that's not the most interesting part: a 37 year old healthy Joe pays just $130 for the $1500 version, versus over $200 for his very sick twin brother. But a healthy 37 year old Jane pays about $190 a month, while her sickly twin pays just $16 more.

Which is actually a much bigger problem than one might think: according to the benefits recap, "Maternity Services" are covered. "Healthy" Jane would pay an additional $456 per month for this (optional) coverage, and have to wait 9 months for it to become effective. Not so for "sick and pregnant" Jane, whose coverage could be in effect in as little as a fortnight. In fact, "pregnancy (current)" is one of the automatic qualifiers for coverage.

And then it gets interesting:

The website offers a helpful FAQ section, under which we find the following: "What happens to my first payment if I am placed on the waiting list?" Ironically, this section is the first, last and only one to even mention the term "Waiting List." So I called up the helpful folks at MMO, where I confirmed what I'd already inferred: remember that the budget for the whole Ohio version of ObamaPool© is $150 million? You guessed it: when that initial funding is gone, then whoever's left behind has to wait for the next round (if and/or when). How many childbirths are going to chip away at that $150 mil before it's gone?

Your guess is as good as mine.

[Hat Tip: FoIB Beth D]