You say STOLI, I say STOA

Earlier this year, we posted on a fairly sophisticated scheme that seems to have cost at least one insurer a pretty penny:

"For example, one participant (it's really difficult to call her a "victim," since she profited, as well) was dying from stomach cancer when she "saw a flier from what appeared to be a Catholic charity, says her husband, Dan. Mr. Bulpitt says the family of four was on food stamps after he quit his auto-dealership job to care for his wife." She and her family received some $8,000 for her participation."

The take-away here is that someone other than the annuitant apparently owned and paid for the contract. As we noted at the time, the whole plan was predicated on circumventing the principle of "insurable interest." As with Stranger Owned Life Insurance (STOLI), these plans have come under fire by the National Association of Insurance Commissioners, who recently "formed a new working group to evaluate next steps on a model bulletin designed to help regulators deal with the practice of stranger-originated annuity transactions (STOA)."

The NAIC is looking for ways to put the kibosh on these kinds of schemes, which cost the carriers - and, ultimately its policyowners and stakeholders - big bucks. Their first move has been to "[urge] insurers to conduct due diligence with detection methods." They could start, as we noted in February, by "[seeking] information about the buyer's relationship to this annuitant."

Of course, this presumes a certain intelligence on the part of Home Office Critters.

No comment.

ACO's Revisited: Connecting the Dots, Part 1

And so the end-game is revealed:

■ Data Point 1:

"A new survey demonstrates that very few doctors believe that government reform plans for the health care system will improve patient care .... 500 general practitioners and 500 hospital doctors ... found that only 22% believed the health service will be able to keep improving efficiency while implementing the planned changes ... only a quarter of those polled believed that the new health care practices would make it easier to tackle public health issues."

Given the topic of this post, it would have been even more helpful to know the breakdown of how many "regular" doc's feel that way vs how many "hospital" doc's concur. Alas and alack, we'll have to make do.

■ Data Point 2:

"The health care overhaul law closes the door on future physician-owned hospitals, requiring new ones to be open and certified by Medicare by Dec. 31. Otherwise, they'll be barred from taking part in Medicare, the health program for the elderly, as well as other federal health programs ... The facilities' rivals — non-profit community hospitals and for-profit institutions without physician investors — have long pressed Congress to curb physician facilities."

Starting to see the pattern?

■ Data Point 3:

"The idea of accountable care organizations ... is starting to attract a lot of national attention. One reason for the interest is that CMS plans to start a shared-savings program involving ACOs in 2012 ... ACOs must include primary-care physicians and must coordinate care across all care settings. But they need not include a hospital."

That last is, at best, disingenuous.

Why?

I am fortunate to have a number of physician clients, one of whom was willing to discuss the issue with me at some length. Bill (not his or her real name) and I spoke for almost an hour on this subject, and he was quite candid about what he's seeing. It helps to know that he practices in a town with just one local hospital, and we discussed the implications of that, as well:

IB: What can you tell us about ACO's [Accountable Care Organizations]?

Bill: First, this is a major hot-button issue with physicians; hospitals have become quite predatory, because they're in the driver's seat. The model for this is Medicare's "capitation" system, which is in place around the country. Basically, Medicare cuts one check, to the hospital, which then "divvies it up" to the various providers involved. So the hospital keeps some for the OR, the anesthesiologist gets a cut, the surgeon gets one, etc. Right now, the hospital can pay an outside physician, but the ACO model changes that.

IB: What do you mean?

Bill: With ACO's, the hospital can only pay physicians who are credentialed and the model encourages economic credentialing [ed: more on that in a moment]. So if I have a patient who needs, say, an earectomy, and I do that at XYZ Memorial Hospital, I can't get paid for that or, if I fight it, it's a major hassle.

IB: Well, some would say that this isn't necessarily a bad idea; after all, we've been trying for a while to get global billing on the table.

Bill: There's that, but this is different. The idea behind global billing is that the patient gets one bill, and everything's disclosed. This is different, because the hospital gets a check, and it's got to disburse the money to the various doctors and other providers. And then there's a major catch called "economic credentialing" [EC]. What EC does is look for which doctor does a given procedure the cheapest. Now, there's a counter-balance to that, because outcomes are also part of that equation: if he's doing it cheap but has a lot of follow-up care because of complications and the like, that counts against him.

In Part 2 [now posted], we discuss some implications of this practice, and then finish connecting the dots.

[Hat Tip for Doc Survey: FoIB Bob D. Hat Tip for Trendspotter post: FoIB Kelley B]

Cavalcade of Risk #117: Call for Submissions

Ironman hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 18th). 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.

ObamaCare© vs Health Care (Costs, that is)

In our Medicare Shanda post yesterday, we explored how ObamaCare© really doesn't do much to actually rein in costs, focusing on how little transparency there is in allocating Medicare funding. But there's another facet we've previously explored, that of whether or not regulating insurance rates would actually help rein in the cost of health care.

As we suspected, not so much:

"Consumers, by and large, cannot be made better off with insurance rate suppression and other forms of insurance regulation according to a new report released today by the Pacific Research Institute."

[ed: The PRI is a California-based think-tank]

Now, this study focused on regulation of Property and Casualty insurance, but as regular readers know, P&C and health insurance are very similar, since they're both based on the principle of "indemnification." So it's not really a stretch to use the P&C lens to examine ObamaCare©'s draconian efforts to control health insurance costs (rates):

■ Regulatory efforts to suppress rates are likely to yield consequences that would increase costs and reduce consumer welfare.

■ Rate suppression is analogous to a tax imposed upon the market, which must be borne by someone; most likely not the insurers.

"(I)ncrease costs and reduce consumer welfare?" Check.

"(Tax) imposed upon the market?" Also check.

Pretty much spot-on, I'd say.

Health Wonk Review: Ghosts and Goblins edition

The New Health Dialog blog presents this week's roundup of scary-smart posts, including Skittles and Zombies.

Check it out - if you dare.

More on "Free Advice"

As we noted earlier this year, the actual administration of a Health Savings Account can pose some interesting challenges. That's why we recommend a local expert to our own clients, and why I'm a proponent of the "you get what you pay for" school of thought.

A recent personal experience has only underscored the importance of that advice. For many years, we were covered under my spouse's group insurance, an HSA plan to which her employer also contributed. A few months ago, she left that job to pursue a dream, starting her own business (which is both exciting and terrifying). Subsequently, we switched our insurance over to my employer's plan, which is also an HSA.

The "old" group insurance plan used Chase Bank as its HSA administrator, and we could have stayed with them when we made our change. But I'm a big believer in taking my own advice, so we immediately contacted our local HSA gurus at FlexBank.

And boy, am I glad we did.

Over the course of just a few weeks, we had a number of issues come up (not the least of which was that we couldn't just start a new account in my name and transfer the money from an account in hers). Needless to say, we've had numerous phone conversations and exchanged a few emails. Throughout, the folks at FlexBank have been professional, courteous and - above all - knowledgeable about the various intricacies of our situation.

Just another reason why we're believers.

Medicare Shanda

"Shanda" is a Yiddish word meaning "scandal" (it also implies shame and embarrassment). And it's an entirely appropriate description of how the AMA should feel. Although it purports to represent all physicians, its membership comprises fewer than 1 in 5 of them. Yet it wields power completely out of proportion to its membership:

"Three times a year, 29 doctors gather around a table in a hotel meeting room. Their job is an unusual one: divvying up billions of Medicare dollars ... convened by the American Medical Association, has no official government standing."

It's not enough that they own, and profit substantially from, the diagnostic codes required for reimbursement from Medicare and insurers:

"The Centers for Medicare and Medicaid Services, which oversee Medicare, typically follow at least 90% of its recommendations in figuring out how much to pay doctors for their work."

And the dollar amounts are astounding: over $60 billion a year from Medicare alone. Elected by no one, accountable only to themselves, these physicians (who, by the way, aren't even necessarily the best in their own fields) control vast sums of our dollars, both directly and indirectly.

This is an area that one would think so-called "health care reform" would address, but it's nowhere to be found in the 2000+ pages of ObamaCare©.

Gee, wonder why that is.

(Low) CLASS Act

One of the stated reasons for John Hancock's recent rate hike on some of its Long Term Care (LTCi) business was its large book of government-employee business. No surprise, but apparently gummint workers generated far more claims than anticipated.

So what, you ask?

So this: we've mentioned the so-called CLASS Act (part of ObamaCare©) before, but missed an important point. As Avik Roy points out:

"Another point in the report that deserves further attention is the Ponzi scheme known as the CLASS Act ... CBO determined that the “CLASS program could be subject to considerable financial risk in the future if it were unable to attract a sufficiently healthy group of enrollees."

And how likely is that? The Congressional Budget Office (CBO) thinks it's not only likely, but a near-certainty:

"Because the law requires the CLASS program to enroll all eligible individuals who apply, CBO said it is “likely that some enrollees would be people who were unable to obtain coverage in the private market because of their poor health status."

Guaranteed issue? Attracting unhealthy folks? Causing substantial premium shortfalls?

Where have we heard that before?

Grand Rounds: Lesson Learned edition

The Spice Island blog hosts this week's roundup of touching and intructional medblog posts.

$2000 and out...

It shouldn't take a sitting Democrat Governor to make this obvious connection, but maybe it's for the best:

"For a person starting a business in 2014, it will be logical and responsible simply to plan from the outset never to offer health benefits ... the eventual penalty for not providing coverage, of $2,000 per employee, is still far less than the cost of insurance it replaces."

We've made this same argument, of course, but it's startling to hear it from a Democrat governor.

But is it accurate?

You betcha:

That $2000 fine comes to about $166 per employee (per month). Under almost any scenario, that number is less than (often substantially less than) the actual insurance premium for that employee. Add in the cost of administration, and it becomes even more lop-sided in favor of the fine. Add in the intangibles (employee meetings, annual renewal reviews) and the cost savings are obvious and compelling.

That "thud!" you hear is the sound of your current employer-based coverage going under the bus.

LTCi: Another reason to buy

Many folks reason that Long Term Care insurance is an unnecessary expense because they have family members who will care for them. And it's true that for non-critical, maintenance-level care, this is an obvious choice (assuming one's children or sibling's are amenable to the idea). What's not so obvious, though, is the cost to the caregiver:

"About 73% of the primary caregivers – and 40% of the secondary caregivers – said they had reduced contributions to savings accounts as a result of caregiving responsibilities, and 80% of the primary caregivers and 55% of the secondary caregivers said they had reduced retirement contributions."

Ooops.

Genworth Financial, one of the LTCi "Big Boys" commissioned the study, based on over 800 adults, both caregivers and those receiving care. The problem is that those giving the care cost themselves major chunks of their own nest-eggs; giving up their ability to contribute to 401(k)'s and the like means that there's less available to them when they need it.

A vicious cycle, indeed.

From the mailbag: Retirees and Dependents

From a reader:

"My spouse is a retiree of [a well-known financial institution]. We are both in our late 50's and on [the former employer's] group health insurance. Our daughter turned 24 last Spring, and "aged off" our insurance due to that event. We were told by the [former employer] in August that she could be added back during open enrollment for coverage effective 1/1/2011 under the new provision of Obamacare, since she is under age 26.

Open enrollment began today and now they've changed their tune. They are now saying that because my wife is a retiree, and not an active participant, that the changes in the law pertaining to dependent coverage do not apply. I have read both the text of the law itself from the Federal Register and the federal regulations promulgated by the IRS, the Dept. Of Labor, and the Dept. Of Health and Human Services. I see nothing that makes this distinction. In fact, the regulations specifically state that even if my daughter were married, or not living with us, she would still be covered. The only exception seems to be, for grandfathered plans, if she were eligible for coverage under a different employer’s group plan, they could exclude her. This does not apply to her.

The [former employer] has promised to research further and get back to me in 5 business days. I asked them specifically to site me the law or regulation that allows them to distinguish a retiree’s dependent coverage from an active employee’s dependent coverage.

Do you know anything that backs up their position, or are they completely wrong, as I suspect? Thank you very much for your help in this matter."

We're always grateful for a challenge, and this one seems both current and important. Here's what I replied:

"You'll find that the employer didn't actually "change its tune," but gave you inaccurate info in the first place. Retiree plans are exempt from that part of ObamaCrap.

Sorry!!

If she's healthy, you might be better off putting her on her own plan, anyway. Often, these are less expensive than dependent coverage on a group plan, and will offer a choice of benefits designs.

Have a GREAT rest of the day!!"

Our reader, being the tenacious sort (which we like), wasn't wholly satisfied with this reply, and (as it turns out), with good reason:

"She does have her own plan, but it’s not very good. Guess we’ll have to shop around for something better for her. Do you know where in the law this exception for retiree plans is? (Sorry, I’m a lawyer, so I like the details).

Thanks for the quick reply."

He's right to call me on this, because he had asked for a specific citation, not just our analysis. Here's my reply:

Here ya go!

"Among other things, the regulations, set to be published in the Federal Register on Thursday, June 17 ... also confirm that retiree-only plans are exempt from certain PPACA requirements."

And:

[Link to relevant Federal Register]"

And so our work was done. Or so I thought.

As our own Mike Feehan points out:

"Actually, Hank, behind the curtains there's a little more involved than just being a retiree or the dependent of a retiree.

The distinction comes about because, apparently, the former employee and her family are enrolled in a "retiree-only" plan. Since they are both under 65, and presumably not Medicare-eligible, it's possible they could have the same plan (i.e., same benefit design) as the former employer's active employees. The employer's corrected answer tells me that this couple is enrolled in a distinct, retiree-only plan. (HHS says a retiree-only plan can enroll no more than 1 current employee). Thanks in large part to lobbying by AARP, retiree-only plans are, as you point out, exempt from PPACA. Of course, the plan sponsor of a retiree-only plan can voluntarily choose to comply with the reform requirements. But if they claim exemption they obviously can ignore the requirements - and the extra cost that the requirements entail. To claim the exemption, the plan sponsor must certify that the plan covers no more than 1 current employee, that a separate Form 5500 for the plan is filed with DOL, and that there is a separate SPD [ed: Summary Plan Description].

Clearly and in hindsight, the former employer gave them bad information the first time. While learning the truth of the matter may have angered them, I don't see that they "lost" anything they were entitled to. Maybe, if their daughter immediately canceled some other individual policy in anticipation of group coverage, they could claim to have been damaged by relying on the employer's erroneous advice. But that seems unlikely. So I doubt the employer's bad answer has harmed them - at least not in any way that I can see. It just made them angry. I bet there's a lot of plans out there bumping into things in the dark, trying to figure this out. It's almost as though the government deliberately made all this as complex as possible . . . naw, that can't be right . . . .can it?"

Blues Cross MFN

In the insurance world, MFN (no, that's not an acronym for something dirty) means "Most Favored Nation," a term usually reserved for international trade agreements. In this case, it's an agreement between an insurer and a provider (or many providers) which grants the insurer exclusive and substantial discounts on medical services. These are generally perfectly legal, but - as Blue Cross of Michigan has found out, to its chagrin - it's easy enough to cross the line.

In this case, Michigan Blue Cross (BX) is considered the "dominant carrier" in that state's health insurance market (no big surprise). This is a double-edged sword: it means a larger market share, but it also means that they're considered the "carrier of last resort," meaning they absorb a lot of high-claim insureds, as well.

Being the dominant carrier has at least one advantage: they can demand - and get - much greater discounts from medical service providers (e.g. hospitals). That makes sense, too: greater numbers of insureds mean greater numbers of patients that can be funneled to network providers. It's a win-win situation.

These discounts can be huge, by the way: up to 15% (or more!) off covered services. This helps the carrier two ways: one, it lowers their claims costs, which helps ameliorate rates (to a point). It also means that their insureds have less out-of-pocket, which is good PR, and helps with retention.

So where's the beef?

In a nutshell, it appears that BX decided to up the ante, and not only get their own discounts, but force providers to reduce the discounts they offered to other insurers. That's a double whammy, because it means an even greater reimbursement differential, and thus higher claims costs, for the other, non-dominant carriers.

And that's apparently where they stepped off the (metaphorical) cliff: as one of our sources put it, they were "writing into their own contract with the hospitals – 70 of the 131 in the state, and mostly small rural ones who need the business – that the hospital would charge competing insurers a higher rate. In other words, not just negotiating the terms of their own contract, but dictating the terms of contracts with competitors." [emphasis added]

It's one thing that your competitors are at a disadvantage - that's the free market, after all - but proactively interfering with your competitors' ability to conduct business is quite another. And that seems to be the case here, and why both the Feds and the State are going after the Blues: the Department of Justice for Sherman Antitrust Act violations, and the Wolverines for violations of that state's statutes.

It's worth noting, by the way, that the Federales have a pretty good batting average on these cases: over the past 16 years, they're 5-0 on health plan MFN cases.

Finally, there's this: this doesn't bode well as we look toward 2014 and the Exchanges. That is, if carriers are forced from the market (as has been the case in Michigan, among other states), it leaves fewer "players" to offer plans. Fewer choices means less competition, which was, after all, one of the major goals of ObamaCare©.

Of course, both sides will have their day(s) in court, and I'm sure that this won't be the last we hear of this sordid affair.

[Special IB Thank You to Rick B for his help in explaining the issues]

BREAKING: Blue Cross gets greedy, slapped

My father used to have a saying about the stock market: bulls make money, and bears make money, but pigs go to market. Meaning, "don't be greedy." But that's apparently just what's happened with Michigan Blue Cross Blue Shield:

"The Justice Department alleged Monday in a lawsuit that [the carrier] is discouraging competition by engaging in practices that raise hospital prices ... The suit targets "most favored nation" clauses between Michigan Blue Cross Blue Shield and health care providers."

We're fortunate to have some really informed sources to help verify and explain exactly what this means, and will be updating this post shortly with more information.

[NEW: Details and analysis here]

[Hat Tip: FoIB James P]

ACO's: Accountable Care Organizations and Keeping Your Doc

Once again, we're delighted to present our favorite Medical Office Manager Kelley Beloff. Regular readers know that she brings to the table a unique perspective, and is willing to share with us some of the "backroom dealings" of health care. This time out, she reports on the devastation that looms ahead due to ObamaCare©'s new rules on Accountable Care Organizations:

Several months ago, Hank and I had a discussion about Accountable Care Organizations. What is this concept in Obamacare? As a medical practice manager, I actively read all aspects of Obamacare and how it would affect my profession. In April I attended a Medical Management Seminar, where this policy was discussed. I asked the lawyer leading the discussion what this guideline meant for privately owned businesses. He stated that no one knew what would happen.

Now we know:

"In 2005, more than two-thirds of medical practices were doctor-owned, a share that was largely constant for many years. By next year, the share of practices owned by physicians will probably drop below 40 percent, according to data from the Medical Group Management Association. Hospitals or health plans will own the balance of doctor practices."

I work for one of those doctor-owned medical practices, and Medicare Patients currently account for approximately 20% of the practice. If our practice is not purchased by a hospital before Jan. 2012, my physicians can no longer get paid by Medicare for treating Medicare patients. As with most micro and small businesses, we operate on a tight profit margin. A loss of 20% of our revenue is enough to cause our business to fold. So we have two options: go out of business in Dec. 2011 or negotiate with a hospital to purchase our business. This creates a buyers market, so hospitals can name the price and the physician has to accept or go out of business. Physicians will be forced to accept the pay from a Hospital, or go out of business.

The government, through legislation, will cause the demise of privately owned physician practices.

Physicians are already opting out of Medicare. Opting out of being in network with Medicare. Opting out of treating Medicare patients.

Currently "Medicine" is the only business where revenue is regulated by the Federal Government. In 2012, your medical care will be regulated by the Federal Government through Hospitals.

This is short post because the article says it all.

Thanks, Kelley!

Cavalcade of Risk #116 now online

LexisNexis Top Workers Comp Blogger Julie Ferguson hosts this week's roundup of risky posts. As usual, Julie does an outstanding job of keeping things simple and interesting. And be sure to check out the commercials!

Agent to Blue Cross: "You're fired!"

A very compelling and well-written post by California insurance agent David Fluker. Here's a sample:

"After due and careful consideration I have decided to eliminate offering for sale any Anthem Blue Cross HIPAA or underwritten individual & family coverage plans after today. This was not an easy decision to make ... Anthem Blue Cross of California has demonstrated erratic, inconsistent, irregular and unfathomable enrollment procedures for those trying to get coverage under HIPAA ... No one who needs medical care and medications, who may be ill, should be waiting many weeks and enduring the level of stress that Anthem Blue Cross creates during these enrollments."

Definitely read the whole thing.

[Hat Tip: Bob V]

If you like your (Medicare Advantage) plan, you can keep it. Not:

From email:

"Did you know that the 236,000 displaced Private Fee for Service members nationwide are eligible for an SEP (Special Election Period) and can enroll now?"

This is an announcement (from Anthem) about the upcoming Special Election Period (no, not that election - although it's relevant); HHS Secretary Shecantbeserious has ordained this unique opportunity for folks being booted from their preferred plans.

This "special" opportunity actually began a few weeks ago (on October 1st), and extends through the end of the year.

Which is convenient for those unfortunate seniors who actually believed DC.

Constitution State Rate Spike

Once again, HHS Secretary Shecantbeserious has proven herself to be quite fangless in her efforts to cajole insurers into artificially suppressing rates:

"[Connecticut]'s largest insurer has been approved to raise health premium rates by 41 percent to 47 percent for some of its policies sold to individual buyers..."

The good news is that the bulk of Anthem's business in the state will experience only a "modest" 19% increase.

Oh frabjous day!

In utter disregard of the Federales, the carrier had the temerity to claim that the "reason for the increases is the new federal health reform mandates." [emphasis added]

Oh wait, did I say "the carrier?"

I meant "the Connecticut Department of Insurance."

I wonder if Ms Shecantbeserious will now threaten them.

More from the "Real World" files

A very nice young lady called the other day, looking for individual health insurance. She's a student at a local university, on her own at the tender age of 18. Her mother has moved out of state, and for a number of reasons, Karen [ed: not her real name] can't be on mom's plan. She is eligible for the university's health plan, but is (understandably) not enthused. She'd really like to have a real plan.

But she can't.

No, she's not ill, nor is she pregnant. But she is 18, and therefore ineligible for an individual medical plan. She's one of the (unintended?) victims of ObamaCare©, which has essentially destroyed the individual market for young adults.

Too bad we had to pass it to see how Karen would be hurt by it.

Ch-Ch-Changes, ObamaCare© style

As we move further out from September 23rd, the state of the individual health insurance market continues to crystallize. Here's what we know as of this morning (October 18, 2010).

Plans that have "grandfathered" status are subject to some (but not all) ObamaCare© provisions. Of course, it's likely that these plans will quickly lose this vaunted status as insureds make changes to keep their plans affordable. These changes comprise:

■ Expanded Dependent Coverage
■ No Lifetime Limits
■ New Patient Protections
■ New Limitations on Rescission

Newly-written plans, and those which have already lost their grandfathered status, "enjoy" these benefits:

■ Expanded Dependent Coverage
■ No Annual Dollar or Lifetime Limits
■ Expanded Preventive Care
■ No Pre-existing Condition Waiting Period for Children under 19
■ New Patient Protections
■ New Limitations on Rescission

Interestingly, some ostensibly grandfathered plans will also be subject to these provisions, as well; it's not at all clear what benefit their grandfathered status still confers on them.

In related news, Anthem (and perhaps some others) will be offering an "Open Enrollment" period during November. Only two "classes" of insureds are eligible:

■ Adult Dependents (from age 19 to age 28) who are not currently enrolled on a member's policy or who were previously canceled from a member's policy due to age, student or marital status are eligible for enrollment. The member's policy to which the adult dependent will be added must have an effective date prior to September 23, 2010 [ed: in other words, must be grandfathered].

■ A covered family member who previously reached his or her lifetime maximum can enroll for benefits on a member's existing policy during this special period.

We're still awaiting word on how much lower premiums will be due to these enhancements.

[Hat Tip: Anthem BCBS]

About that Individual Mandate (Video)

As we've long noted, the Individual Mandate is evil. The folks at Amendment63 show us why:



[Hat Tip: RWN]

Obamacare© and Your W-2: An Update

From reliable sources:

It appears that the requirement to report -- set to begin next year (2011) -- is voluntary only for that year. It's anticipated that the IRS will provide more guidance in the future, including clarity for 2012 W-2s. It's also anticipated that it will rain unicorns.

What this (probably) means:

■ If an employee leaves in, say, March 2011, the employer doesn't have to provide the info, but may still choose to do so.

■ When employers (or their payroll services) send out that mass of W-2s in January 2012 (for tax year 2011), this info will still be optional.

■ On the other hand, if an employee leaves in, say, April 2012, the employer does have to provide the info within a few weeks (unless, of course, the IRS pulls an Emily Litella).

■ When employers send out that mass of W-2s in January 2013 (for tax year 2012), this info is no longer optional, (unless - you guessed it - the IRS pulls another Emily L).

Hey, we're here to help clear things up.

Cavalcade of Risk #116: Call for Submissions

Julie Ferguson hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 18th). 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.

In Memorium: Bye, Papa

[ed: This post is in loving memory of Robert (Bob) Keller, who passed away yesterday, 10/13/10]

I suspect that most readers will wince when I mention "The Brady Bunch;" the theme song is an almost tribal memory for most of us. In "real life," of course, blended families don't always (or frequently) actually "blend." Because of his indomitable spirit and bottomless heart, my step-dad, Bob Keller, managed that incredible feat.

My father passed away when I was 22; a few years later, Mom found her other true love when she met Bob. I remarked often that it must have been terribly convenient for her: both of her beloved husbands were Roberts. From the moment we met, Bob and I connected and when they wed a few months later, his family and ours had already begun to bond. I still fondly recall our family Chanukah parties, with the kids and the adults all happily chattering and feasting on latkes. Bob had a way of bringing all those who were close to him close to each other.

When our eldest was born, there was no "well, he's a step-grandfather;" he held her proudly and lovingly, as if to announce to the world "hey, look at this!" My daughters knew only love from him, and for him, as did my better half.

I adored him.

For many years, we would meet for lunch every week, often sharing wings at, well, the wing's place. Even more often, we shared our mutual love of rare hamburgers at a local pub (and by rare, I mean "walk it through the kitchen - quickly!" - rare). This was usually preceded by our monthly trip to Max's, where Ralph, our balding barber, would neatly trim us up.

It was with Bob that I shared the last few hours of my mother's life, and it was Bob who had the strength to let the hospice nurses know that "Mrs Keller has passed."

I realized today that Bob had actually been in my life longer than my own father. He was a great dad, a terrific grandfather, and an adoring husband. His first wife, Lynn, had passed several years before he and my mother met, but it was obvious to all who knew him that the size and depth of his heart was enough to deeply love both of his wives.

Thank you, Bob Keller, for your kind, strong hands (oh, did I mention that he was an accomplished wood and stained glass artist?), your bottomless and generous heart, and for the love you shared with my mother, my family, and me.

The People v ObamaCare©: This just in...

A Florida judge has ruled that the 20 of the 57 states may, in fact, continue pressing their lawsuit against ObamaCare©:

"U.S. District Judge Roger Vinson ... said the case would continue as scheduled. He had previously set a hearing for Dec. 16."

Not much more than that right now; interested readers may peruse the decision here.

Health Wonk Review: Rescue Me Edition

Our favorite health care economist, Jason Shafrin, hosts this week's wonky round-up. Jason asks (and answers) the question "What do the Chilean miners have to do with health policy blogs?"

ObamaCare© and Your W-2: In the news

This is how the IRS characterizes the health care/W-2 kerfluffle:

"The Internal Revenue Service (IRS), an arm of the U.S. Treasury Department, has decided to include health expense codes that employers can use, but do not have to use, in the draft version of the 2011 W-2 wage tax withholding form." [emphasis added]

Gee, thanks fellas.

I find that ironic because of this:

"The IRS on Tuesday announced it has delayed the filing requirement for companies to report the cost of supplying healthcare coverage to their employees."

Regular readers may recall our recent post on this subject, which pointed out that the folks at NFIB "believe the provision really starts earlier. If someone leaves his job in 2011, the employer must provide the W-2 – with the added info – within a few weeks of the employee’s departure." So does this new announcement change that calculus?

One problem, of course, is that it doesn't seem to address the issue of when the actual reporting must begin. I've asked our friends at NFIB for their thoughts, and will let our readers know what we find out from them.

["Hill" Hat Tip: FoIB Patrick P]

Stupid Government Trick: Hit a cop, Sell a Policy

We had to go back all the way to our very first year (2005!) to find an idea this reprehensible:

"On at least six occasions, state Chief Financial Officer Alex Sink approved felons’ applications to sell insurance in Florida."

Ms Sink, currently running for Governor of the Sunshine State, presently serves as the state's Chief Financial Officer. It's not just that her office thought this was a good idea, but she (apparently) personally signed off on all six applications. And these weren't speeding tickets or spitting on the sidewalk, either:

"(A)pplicants ... had been convicted of, or pleaded guilty to ... Assault on a police officer ... Resisting arrest with violence ... Grand larceny" and several other serious offenses. Florida, as in most states, prohibits convicted felons from obtaining licenses to sell insurance. Unfortunately, these six (that we know of) fellows were approved to sell life and health insurance policies (now there's a scary thought!) to unsuspecting prospects.

It certainly gives new meaning to high pressure sales.

[Hat Tip: Hot Air]

Old Dog, New Trick: Apologia

Years ago, Saturday Night Live featured a funny sketch called "Common Knowledge," the point of which was to show that a lot of what we think we know is, in fact, wrong. This past summer, in one of my posts about Ohio's new ObamaPool©, I inadvertently mis-characterized how renewal rates are calculated in the individual market. I said:

"by law, carriers can't single out individual insureds for rate increases"

Turns out, there is no such law; the relevant section of the Ohio Revised Code (ORC) is silent as to this issue. This discrepancy was pointed out to me by the reporter who wrote the story on which that post was based, Ms Carrie Ghose; she emailed me yesterday to challenge my claim regarding renewals. After poring over the ORC (and checking with other sources), I found, to my dismay, that there is no such provision. I've updated the original post with this information, but in fairness to Ms Ghose, I wanted to make sure that our readers know the facts regarding renewal rates in the Ohio individual medical market.

A spoonful of sugar...

Perhaps it's all in one's perspective:

"Growing numbers of Americans with health insurance are walking away from their prescriptions at the pharmacy counter, the latest indication that efforts to contain costs may be curbing health-care consumption."

The Journal's thesis is that, because folks have higher co-pays and/or deductibles, they can't afford to pay as much for their meds.

I think it's something else: when 3rd parties are paying the bulk of your expenses, you have no real incentive to cut back. DTC (Direct to Consumer) advertising also plays a role, increasing demand, regardless of whether or not it's justified. Bob wrote about this some time ago, pointing out that "(s)ome studies suggest that newer, more expensive meds are no more effective than older, less expensive drugs."

So there's an increase in demand, fueled by the fact that someone else is footing the bulk of the bill, but what happens when that equation tilts the other way? People make the conscious choice to take a flyer, perhaps understanding that they don't really need that med, after all (not unlike those who choose to go without health insurance). Seems pretty rational to me.

Supporting this thesis is the fact that "(p)atients are deserting prescriptions for the most expensive drugs most often." That makes sense, although one wonders why they even bothered having them filled in the first place. It's not as if the cost, and one's portion of it, is a surprise: the cash register pretty much tells the story. Simple enough to pull an Emily Litella.

To some extent, ignorance of how health insurance works is a factor:

"After switching employers in April, Ms. Brockway said, she chose a high-deductible plan for herself and her 12-year-old son because it took less out of her paycheck ... when she went to pick up asthma medicine for her son and an antidepressant for herself, the pharmacist told her it would cost more than $335."

And?

How much did she save in premiums, and where did that go? How much is her cable bill (if any)? Just once, I'd really like to see so-called "journalists" ask (and report) about what other choices their subjects are making. We have no idea whether Ms Brockway's son has his own cell-phone, for example, and how much that costs. What other discretionary expenses do people make that tells us about their priorities? Why aren't these part of the story, as well?

And there's this: "She returned later and bought a less-expensive prescription for her son." So she did in fact, make the choice to put her son's health first. Why didn't she ask about less expensive medication in the first place? Why didn't the pharmacist (or her doctor) suggest the lower priced alternative? I submit that it's because, until recently, cost wasn't a factor: someone else was paying for it.

The fact is, her high-deductible plan (apparently) worked exactly as advertised, she just didn’t understand how to use it. Once she had "skin in the game," it was to her advantage to begin asking questions, and looking for ways to lower the cost of her (and her son's) health care.

And that's a good thing.

ObamaCare© Travelin': Medical Tourism under PPACA

Steven Lash, President of Satori World Medical, thinks that there's a silver lining in ObamaCare©: it's his belief that it will continue to fuel, and in fact increase the demand for, medical tourism. He bases this belief, in part, on the fact that this train-wreck has already begun to show the stress fractures in our system as a result of increased demand without adequate supply.

With Steven's permission, here's his take:

The changes in legislation [ed: ObamaCare©] will offer both positive and negative impacts to U.S. businesses. One of the benefits of the legislation is that we now know how the future of health care is going to be shaped. There are a specific set of deliverables and timetables that have been set.

With the completion of PPACA, businesses are focused again at looking for measures to save on rising health care costs. Because of this, businesses are starting to see a place in their employee benefit plans for medical travel.

With the addition of 40 million Americans having access to health insurance, there will be increased demand for health care services. Couple that with an existing shortage of nurses and doctors, queuing for medical care will be a natural by-product.

As the time to see a specialist increases, more individuals will seek to get immediate help through medical travel. Employers and employees will come to understand the high-quality health care that is available to them internationally as they look to end pain and ill health.

The PPACA utilizes similar features as the state-wide Massachusetts plan, which was implemented several years ago. In the Massachusetts plan, queuing for primary and specialty care has more than tripled the wait time for appointments and treatment.

As the low cost option, medical travel will be an attractive network option for employer-based medical plans.

Thanks Steven!

Retro Risk Reduction

It's tempting to think that the long, heavy "big metal" cars of bygone eras were safer than today's smaller versions. Take, for example, the venerable '59 Chevy Bel Air, its 211 inches weighing in at an impressive 3225 pounds. At the other end of the spectrum, last year's Chevrolet Malibu which, while actually a bit heavier (by about 200 pounds), is about 20 inches shorter. In a head-to-head (literally!) battle, the survisor might surprise you:



[Hat Tip: FoIB Sam B]

ObamaCare© Dreamin': I've got some questions

Currently, and since the advent of HIPAA, I can go from a group plan to another group plan, or an individual plan to a group plan, on a guaranteed issue basis, and any pre-existing conditions will be covered immediately.

[ed: Yes, there are a variety of hoops through which to jump, but assume those for sake of discussion]

In order to accomplish this, I need but a simple piece of paper, called a Certificate of Creditable Coverage, which "proves" that I've been covered for (at least) the previous 12 months. Absent this Cert, my new employer's carrier can delay covering any pre-existing conditions for a while.

Yes, yes, Henry. What's your point?

Well, as long as I have that little piece of paper, I can prove prior coverage, which is the point of the exercise, and demonstrates that one can, in fact, prove a positive.

But can one prove a negative?

Implicit in the PCIP (ObamaPool©) program is the applicant's assertion that he has not been insured during the previous six months. Which leads us to Question #1:

How does the Pool's© lifeguard prove that I did?

Follow up question: by what mechanism is the new carrier allowed to investigate the veracity of my claim?

Next, we turn our attention to the problem of the child; that is, the fact that one can no longer buy a child-only policy. Carriers which have gone this route (and I'm aware of none that haven't) generally allow a child to be covered if at least one of his parents is also on the policy. Which brings us to Question #2:

What happens when Mom and Junior apply and are issued a policy, and a month later Mom drops coverage on herself?

Follow-up question: by what mechanism would the carrier be allowed to then cancel coverage on Junior?

Well?

Friday LinkFest

■ At Frontpage, Tait Trussell makes the case that ObamaCare© constitutes "Medicare Malpractice" by essentially shafting "millions of low-income folks, minorities, and Hispanics." As we've noted, a lot of seniors covered by Medicare Advantage plans have been thrown under the bus.

■ David Hogberg offers his fisking of the New Republic's Jonathon Cohn's take on efforts at repealing ObamaCare©. He notes that this train-wreck "will force a lot of people to pay higher premiums ... lavish subsidies on the private insurance industry ... [and] put life-and-death decisions in the hands of bureaucrats." Sounds like a hat-trick to me.

■ Finally, the AP reports that the ObamaPools© are off to an underwhelming start (something we've long since noted), including one that we missed: "California, which has money for about 20,000 people, has received fewer than 450 applications."

Enjoy!

The Sad (Real) Faces of ObamaCare©

Yesterday, I had to turn away two prospective insureds. That's happened before ObamaCare© was a gleam in Ol' Nancy's eyes, but it was particularly troublesome because there are fewer choices now on which these folks can "land."

Let me explain:

Steve is a 45 year old gentleman who was laid off from his job last month. He's eligible for COBRA, but his means are (obviously) more limited, and the cost is prohibitive. With ARRA subsidies gone, he's stuck. Compounding his troubles is the fact that he's way to short for his weight, and has a number of other health issues. In fact, but for one "glitch," he'd be a prime candidate for the ObamaPool©.

Unfortunately, he's been insured within the past half-year, so he's outta luck, and outta the 'Pool©.

Then there's Tonya, a young lady in her late 20's, a single mom with a healthy five year old. Her employer offers a very nice group insurance plan, which just experienced a 35%+ rate increase, much (most?) of which comes courtesy of ObamaCare©. She'd like to jump off, but she has a number of problems.

No, her height and weight are within normal guidelines, but she's a Type I diabetic, and therefore uninsurable in the "regular" market. The 'Pool© might be a great option for her, but - you guessed it - no can do. Adding insult to injury, she can't do what we used to do: peel Junior off the group plan and put him on his own, much less expensive, policy. It's really a nasty trick, because even though we could write Junior on a plan with Mom, if Mom doesn't qualify (and she doesn't), Junior's not eligible. Then again, it's doubtful now that they'd save any money if they could get him his own plan.

I guess now that we're seeing what's in the bill....

Irony, Thy name is Cliff Clavin

Let me get this straight: Postal Workers' union elections are on hold because ballots have been lost in the mail?

Yep:

"But the union announced that only about 39,000 ballots were turned in -- and that "a large number of union members had not received their ballots."

You're kidding, right?

Um, no:

"The American Postal Workers Union has extended its internal election after thousands of ballots appeared to have gotten lost . . . in the mail."

As Warner Huston notes, these are the folks that want to run our health care system?

It's a little known fact that...

Shecantbeserious Waivering: You want fries with that?

On the heels of the recent McDonad's/Mini-med kerfluffle, we now learn that over 2 dozen companies have been granted temporary ObamaCare© exemptions. This of course raises a number of -- shall we say uncomfortable? -- questions:

First, under what criteria were these waivers granted? What, if any, quid pro quo was extracted from the corporate coffers of those which benefitted?

Second, what happens next year, when these waivers expire? Will they automatically renew? If not, what process will be implemented to review whether or not such exemptions will continue?

Third, what companies applied for an exemption and were declined, and on what basis?

Fourth, why is it that not only employers and insurers were granted exemptions, but also unions?

One more little time-bomb that was in the bill we had to pass to see.

The Commish (An InsureBlog Exclusive!)

Although the Whitman-Brown (or is that Brown-Whitman?) race seems to be sucking up all the air in the room, there's another electoral competition going on in the Golden State. In California, the Commisioner of Insurance is an elected position. It's a tough race, but independent insurance agent Rick Bronstein aims to give it all he's got. Rick graciously agreed to an (Exclusive!) email interview with InsureBlog:

InsureBlog (IB): So, Rick, can you tell our readers a bit about yourself (including how long you've been in the insurance business)?

Rick Bronstein (RB): I’ve lived in the Los Angeles area all my life, graduating from UCLA in 1978. I’ve been licensed since August 1977 when I began working in a small P& C agency part time. Ultimately I became the office manager and remained there for 9 years. Since then I’ve worked for a credit union as their insurance department manager, as an outside salesperson for Secure Horizons, and been on my own since 1996.

I enjoy long walks on the beach golf, profitable trips to Las Vegas, and riding my motorcycle [ed: since this is a family-friendly site, no centerfold].

IB: How would you characterize the current state of CA insurance markets? I realize that this is a somewhat loaded question; maybe a little bit about the P&C side, and more on the life/health (especially health) side.

RB: Like most states, mandates and regulations have created more problems than they have solved. Carriers are forced to provide benefits that may not be wanted, and every benefit has a cost.

We have a state run workers compensation company that as part of its mandate is to be revenue neutral to taxpayers. A few months ago our insurance commission sent $5,000,000 to various district attorneys throughout the state to fight fraud. How is that revenue neutral? Insurance companies should fight their own fraud cases.

The insurance commissioner has been holding Anthem Blue Cross “hostage” and has not approved their plans with effective dates after 9/22/10. How is that helping residents of California?

We’ve gone from oversight to over-regulation.

IB: Why run for insurance commissioner instead of, say, letters to the editor, that kind of thing?

Letters to the editor are almost impossible to have published, and if so, are rarely more than one or two paragraphs. While I know it’s unlikely that I will receive more votes than the establishment candidates (Democrat and Republican), at least I can get out the message of allowing a free market to actually be free.

What are your Top 3 goals should you become elected? Or, if you prefer, the first 3 things you plan to address?

The most pressing issue right now is the ObamaCrap that the brain surgeons in Washington passed. So the first 3 things I would do is to encourage the state to do everything possible to have this overturned. Among all the other unconstitutional provisions, the entire bill violates states’ rights.

Since I do not believe the insurance commissioner’s job is to make it more difficult for insurance companies to do business in California, I would reduce the regulations that thwart competition and lead to higher prices.

The third item is to once again allow for gender rating for Medicare Supplements. Several months ago the state required unisex rates which had the effect of raising prices for women on many plans by 20% or more. Once again, regulation where none was needed.

IB: One last question: With all the news out of DC, what do you think about ObamaCare, and specifically as it might effect Californians?

RB: This is a family site, right?

Thanks, Rick, for your forthright answers, and your commitment to fight the good fight. Hopefully, at least some of your ideas will find their way to implementation.

[This interview is not intended as an endorsement of any candidate]

Movin' on up... (An IB Exclusive)

In the Wikio Health Blog rankings. The new numbers are out, and we've moved up quite a bit, all the way to the (lucky) 13 spot (pretty good for an insurance blog!).

Thanks to Wikio's Oliver Orlik for the heads' up, and for the (exclusive!) opportunity to post this before the official publishing date:

1	Well
2	Respectful Insolence
3	Science-Based Medicine
4	Kevin, M.D. - Medical Weblog
5	Dr. Wes
6	Health Beat
7	The Health Care Blog
8	In the Pipeline
9	Pharmalot
10	White Coat Underground
11	Better Health
12	John Goodman's Health Policy Blog
13	InsureBlog
14	The Last Psychiatrist
15	Health Care Renewal
16	Managed Care Matters
17	Healthcare Economist
18	Disease Management Care Blog
19	DB's Medical Rants
20	The Happy Hospitalist

Ranking made by Wikio

Foreign Serendipity

My better half has long cautioned me that "there are no coincidences," but what am I to make of this?

First, my office email brings word from Golden Rule (Health) Insurance outlining "3 Reasons You Should Add International Health Insurance to Your Portfolio."

Among these are the opportunity to provide "an additional service to your current clients, and attract new ones, when you offer international health insurance ... International health insurance is a growing market and ... you can add a quoting link to your website that practically does all the work for you!"

WooHoo!

But where would these droves of new (international) clients go for medical care?

The King and I know (no, not that King):

"The Tourism Authority of Thailand’s Medical Tourism Blog Contest kicks off with cash and prizes worth nearly US$20,000 up for grabs, including a seven-day all-inclusive medical tour of Thailand for 12 finalists."

Yep, the Thai Tourism agency is sponsoring a blogging contest, with many valuable prizes. Me, I'd settle for a nice dish of pad thai , but I'm a simple guy. But say I was interested (or maybe Bob, Bill or Mike would like a round-trip to an exotic foreign land); what's the deal?

"In order to win, finalists must write the best blog post and attract the highest number of unique visitors."

Hmmm. Could you be more specific?

"The competition is open to anyone who has experience writing blogs related to tourism or medical tourism in English language or containing English language."

Ah hah! Thanks for clearing that up.

So, any takers?

AIG Update: Good news?

Yeah, sorta:

"The Treasury Department says it expects the total cost of Troubled Asset Relief Program (TARP) aid to American International Group Inc. (AIG) and other federal aid to AIG to be about $30 billion."

I know, how's that good news?

Wait for it....

"The Treasury Department invested about $40 billion in helping AIG ... and the Federal Reserve System invested about $182 billion"

So according to Washingtonian-style advanced financial calculations, there's a "savings" of $192 billion, which is a good thing.

Of course, in the real world, we don't look at it as "saving" almost $200 billion, we look at it as wastefully spending $30 billion.

As Bob says: Smaller cars, bigger debts, Papa Washington.

Cavalcade of Risk #115 now online

Wenchy outdoes herself with this week's outstanding roundup of risky posts. Come for the Open Enrollment, stay for the RTFM (if you have to ask...).

Still looking for a host for the November 17th edition - take a risk and sign up!

Timing is everything...

Remember the health care "crisis" that necessitated that we had to quickly "pass the bill to learn what's in it."

Remember that?

If you do, then you're a few steps ahead of HHS Secretary Shecantbeserious and her minions of bureauweenies:

"A new report from the non-partisan Congressional Research Service ... finds astounding proof of the total administrative failure of the administration in implementing Obamacare. According to the report, HHS has missed one-third of the deadlines contained within the legislation for the first six months under Obama's new health care regime."

Ooops.

Up to 11 (eleven!) key deadlines were missed, including a number of state ObamaPools© and Medicare/Medicaid provider screening guidelines.

On the other hand, perhaps we should be grateful for their incompetence: anything that slows this train-wreck down has got to be a good thing.

[Hat Tip: RedState]

Ahoy, mateys! (From the P&C Files)

When Somali pirates [ed: did they actually swash their buckles?] forcibly captured Captain Richard Phillips and his crew last year, the primary concern was, of course, for their safety. But what of the ship's cargo? About a third of the 17 thousand metric tons was "relief supplies bound for Somalia, Uganda, and Kenya."

The other two-thirds, one supposes, were commercial; one further supposes that most, if not all, of that cargo was insured. Regular readers may recall our story from three summers back, detailing how (since-disgraced) insurance carrier AIG put together a veritable A-Team to fight fires threatening their clients' high-end homes.

Taking a page from AIG's fire-fightin' heroes, a "group of London-based insurance companies ... is planning to create a private navy to protect commercial shipping passing through the Red Sea and the north-western Indian Ocean."

These are big-dollar (or pound sterling) losses, too: at an average of $4 million a pop, pretty soon you're talking about real booty. The insurers have been thus far underwhelmed by the prowess of their respective countries' official military forces, and have decided to go full Chuck Bronson.

Or not:

"Instead, this private navy would operate under the direct control of the international naval force that is already in the area, with "clear rules of engagement valid under international law."

Then what's the point?

And it seemed so promising.

RELATED: Speaking of fire fightin', what do you think of this?

"Each year, Obion County residents must pay $75 if they want fire protection from the city of South Fulton. But the Cranicks did not pay ... Because of that, not much is left of Cranick’s house."

On the one hand, fair's fair: the Cranick's knew the potential consequences, and made their choice.

On the other hand: how big a deal would it have been for the firefighters, already on the scene to protect the neighbor's property, to turn the hoses on the Cranick's house?

On the gripping hand: it's a fire service; what's the incentive to prepay if you know that you'll be rescued anyway?

So here's an IB poll:

"Should the fire department have tried to put out the house fire once they were on the scene?" As always, comments on this issue are welcome.




[Hat Tip for the Cranick's story: Hot Air]

Real Life ObamaCare@ Consequences: Buckeye Edition

At the risk of beating a dead horse, here's the current state of Ohio's individual health insurance market:

Aetna, Assurant, Anthem, Humana and Medical Mutual of Ohio (MMO) will no longer write any child-only policies (where "child" is defined as "under age 19"). MMO had not made this decision final until after the 23rd, so any such applications submitted have been returned. In addition, MMO is opening itself up to major adverse selection, er, uh....has announced that "dependents under the age of 19 who apply as new business and part of a family plan will be eligible for coverage year-round." In other words, no "Open Enrollment" necessary.

It actually gets a bit more convoluted, but that's the gist.

Anthem also addressed the grandfathering issue pretty much head-on, as well. Parents with grandfathered plans will be able to add their under-19 aged kids; they'll still need to submit an application for underwriting (to assign the proper risk category and price), but won't be subject to decline for medical reasons, and (disclosed) pre-existing conditions will be covered.

I predict that's going to be the next major battle-ground (or at least one of them), by the way. The new rescission rules are pretty clear-cut, so carriers are going to have a very real incentive to pay close attention to these "minor" apps.

How's that, you ask?

Simple:

"Rescission is permitted only for an act, practice, or omission that constitutes fraud, or an intentional misrepresentation of a material fact, as prohibited by the terms of the plan or coverage. Rescission is not permitted in the case of inadvertent misstatements of fact." [emphasis added]

Who makes the call as to what was "inadvertent" and what was "deliberate?" Methinks that the application will be even more important for carriers going forward. This is another example of why having to "pass the bill to learn what's in it" is so fraught with danger.

[Hat Tip: FoIB T Shook]

Grand Rounds: Minimalist Edition

Sharp Brains blogger Alvaro Fernandez hosts this week's roundup of interesting medblog posts. It's done list-style; each entry is a helpful summary.

Monday morning "Told ya so!"

As we've previously pointed out, ObamaCare©'s impact on the delivery of health care is likely to get ugly, and here's another piece of evidence supporting this:

"The U.S. healthcare reform law will worsen a shortage of physicians as millions of newly insured patients seek care"

Says whom?

Says the Association of American Medical Colleges in a statement released late last week. And they don't mean "someday," they mean "right around the corner:"

"While previous projections showed a baseline shortage of 39,600 doctors in 2015, current estimates bring that number closer to 63,000, with a worsening of shortages through 2025"

Ooops.

And it's not just those wing-nut doctors. Left-of-center NPR reports that:

"In the latest episode, Obama's health officials published a sweeping amount of information on 4,000 individual insurance plans ... The data include plans' prices, descriptions of benefits, and — to insurers' consternation — estimates of how many applicants each plan rejects. It's all on HealthCare.gov."

Bob's already pointed out just how drain-bramaged this "tool" actually is, but the folks at NPR tell us that the information it kicks out is, at best, misleading. For example, the site tells prospective applicants the percent of applicants a given insurer rejects, without explaining the basis for the rejections (e.g. incomplete forms, mismatched identification information ,etc).

So not only don't we (or they) know what's in the bill (cf: McDonald's) but they can't even implement a simple website.

[Hat Tip for the NPR link to FoIB Holly R]

Principal Out, UHC in... [UPDATED!]

[Scroll down for update]

From today's email (9/30/10):

"UnitedHealthcare has entered into an agreement to renew medical insurance coverage for The Principal®'s commercial medical plan customers."

The $64,000 Question, of course, is why? They've scheduled a conference call for tomorrow (Friday) afternoon, from which I hope to learn whether or not ObamaCare© played any role in this. While it's tempting to believe so, the nHealth kerfluffle demonstrated that it's not necessarily the case.

We'll keep you posted.

UPDATE [Oct 1]: Well that was interesting. Just got off a conference call with "teams" from Principal and UHC, and have several pages of notes. Here are some first impressions:

Principal's apparently been shedding medical business for a while; that line currently makes up something like 15% of its business. So this is not exactly "unexpected." As a result, they're transitioning their health business to UHC; this process is anticipated to be complete within the next 36 months.

Second, the Principal's team was adament that this decision was not driven primarily by ObamaCare©; if one accepts the prior point, this makes sense. They did acknowledge that, again due to their diminishing book of business, they are ill-equipped to handle the onslaught of ObamaCare©-driven changes.

Another key point is that as a result, all of their groups will (eventually) be "un-grandfathered." While both teams acknowledged this reality, they did try very hard to downplay its significance. Make of that what you will.

Finally, and consider this an IB "scoop," we were told that the Mayo Clinic will be in-network with UHC as of November 1.

I'll be happy to share more, just ask away in the comments.

What's Gold Got To Do With It?

Quick: What do Kinko's, Ft Knox and Century 21 have in common?

Answer: They're all instruments of ObamaCare©.

Hunh?

Thomas Sowell points out that, among other silliness, ObamaCare© includes "a provision ... regulating people who sell gold." As Dr Sowell concludes, this has "nothing to do with medical care but everything to do with ... government's power over gold."

And therein lies the problem (well, not really the problem, but a major one) with the idea that we had to "pass the bill to see what's in it." Because no one (least of all the rocket surgeons who voted for it) really knows "what's in it," we keep finding things like new 1099 requirements, new taxes on certain home sales, and now increased government power over the private sale and ownership of a precious metal.

None of these things has to do with medical care (or even health insurance), but they have everything to do with increasing government control of our lives. And they come at a huge cost: increased government oversight means increased government bureaucracy, which means increased government spending, not less. Could someone please explain to me how regulating the sale and ownership of gold, or increased tax-prep paper shuffling, or new taxes on the sale of only certain homes will lower my premiums by 3000%?

I'm waiting....