Thursday, March 31, 2011

Carefree Lifestyle? ObamaCare© to the Rescue!

You'll have to watch the PSA to learn what's in it:

Picking and Choosing: The Makena Saga continues...

Does the FDA have the right to selectively enforce its own reg's? Reason I ask is this:

"Responding to the public and political pressure, the FDA said it had no intention of blocking pharmacies from selling their own versions of Makena."

By way of background, Bob reported several weeks ago that the price of Makena (a progesterone synthetic) was set to go from $20 a shot to $1500 a pop. Talk about a rate increase! As usual, though, there was more to the story than first met the eye:

"That's because the drug, a form of progesterone given as a weekly shot, has been made cheaply for years, mixed in special pharmacies that custom-compound treatments that are not federally approved."

Since it didn't need FDA approval, the exorbitant costs associated with gaining that approval didn't apply. Pretty much everything the gummint touches, however, begins to cost more gold, and the price of course skyrocketed.

Now, the technology to actually produce the medication didn't disappear overnight from the local apothecary; it was just that the heavy hand of the government had come down upon it, in the form of a letter from the manufacturer to said pharmacists, "warning them of possible FDA enforcement action if they kept compounding the drug."

This is as much a protection for the consumer as the manufacturer, of course, but fine-wary druggists were understandably concerned that they'd be fried under a Federal microscope.

Never fear, however, because the FDA itself has now publicly folded their hand, announcing that they have "no intention of blocking pharmacies from selling their own versions of Makena."

That's correct: they're going to preemptively cede control to the private sector, and abrogate their legal duty to enforce regulations.

This is unconscionable: once the agency stops enforcing one such regulation, how can they enforce others? Obviously, the neighborhood pharmacy just got an FDAWaiver©.

Quelle surprise.

AARP vs Seniors: The $Billion Story

We've wondered before why AARP would be so willing to throw its membership under the bus. After all, one of the cornerstones of ObamaCare© is draconian cuts in Medicare. On its face, this would seem contra the interests of the folks which AARP ostensibly represents.

Not surprisingly, it's all about the green (and I don't mean windmills or solar panels):

"AARP stands to reap an extra billion dollars in profits from ObamaCare ... Worse, this extra profit is largely BECAUSE of the Medicare cuts."

That bears repeating: due entirely to reductions in Medicare, at the express expense of its members, the "leadership" at the American Association of Retired Peons, er, Persons stands to reap a fortune.

Remind me again, why would anyone voluntarily join this disgraceful organization?

Medicaid Train Wreck

Most of the focus on Obamacrap has centered on the impact it has had on premiums (higher, not lower), covering children (almost non-existent except as a dependent), the Obamacrap risk pool (PCIP, requires you to be uninsured for 6 months) and of course those Medicare death panels.

But a big part of "covering everyone" is expanding Medicaid rolls by some 16 million folks. How well is that going to work?

So glad you asked.

Seems the folks at (unbiased) Kaiser Health News have a thing or two to say about Medicaid.

A new Census Bureau report find revenues for local and state governments are growing but many states are still having difficulty funding Medicaid programs. In Conn., the governor says he has reservations about a proposal to create a new entity to oversee state health care. California and New Jersey officials are having trouble finding cuts to balance the budget

Well, that is just a few cry babies, right?

States also are coping with fast-increasing costs for Medicaid and higher education, while they are bracing for the loss of about $50 billion in federal stimulus money in the coming budget year

Obama purse strings tightening up?

What happened to "spending our way out of the recession"?

(Gov. Chris) Christie is hoping to save $300 million from overhauling Medicaid through a global waiver from the federal government.

The popular governor (at least in some circles) has not detailed his plan yet.

Wonder if the Chinese would like to toss a few bucks in the till? Or maybe Mo Ghadafi would like to make a donation to the cause?

MVNHS© Hates Atheists

Well, how else to explain this:

"Former NHS director dies after operation is cancelled four times at her own hospital"

Seems to me, this is God's way of proving that he exists, and has a wicked sense of humor.

If there's any silver lining to this, of course, it's that the Brits' system is at least "fair:" no waivers for previous Directors.

The truly sad part is that the poor woman was hospitalized for quite some time before her family finally decided to bring her home, concerned that she was becoming "institutionalised" from the extended stay. One wonders, given previous examples of poorly equipped and run "trusts" (the MVNHS© name for "hospitals"), whether the family was also concerned about additional health risks, given her condition.

But remember: the MVNHS© (and its ilk) is so much more efficient than our system (for now).

Health Wonk Review: It's Opening Day!

Jason Shafrin hosts this week's all-star line-up of great health care policy and polity posts. As usual, he hits a homerun.

Wednesday, March 30, 2011

LTCi in Perspective

As we've mentioned over the years, Bob and I frequently contribute to an online forum answering various insurance questions. Along the way, we met Herman Bruns, a Long Term Care insurance specialist with vast knowledge and a big heart. A while back, Herman graciously provided us with a guest post on when it's appropriate to consider purchasing LTCi.

Now, he's added a tremendous, intuitive way to quantify that decision. It's really just a simple test:

How long can you afford to pay $150-200+/day for your care?

How long can you afford to pay $5/day for your care?

As he explains, "if the answer to the first question is "not very long", but the answer to the second is "forever"....then you have just answered your own question. $5/day will buy many people lots of LTC insurance that pays the $150+/day if you need care. (age/health/benefit dependent of course)."

Thanks again, Herman!

Saving Medicare

Obama and the folks in Congress have figured out how to save tax dollars and fix Medicare at the same time. Just like those rides at the theme park that declare "you must be this tall to ride", if Congress gets' their way the same thing will apply to Medicare.

"You must be this old to ride".

The Columbia Tribune cites a Kaiser Foundation report on Medicare that reads like a Frankenstein novel.

The report from the nonpartisan Kaiser Family Foundation shows that federal taxpayers would save billions if the Medicare eligibility age, currently 65, is increased by two years.

However, this does have a few drawbacks.

But people ages 65 and 66, employers — along with states, Medicare recipients and even some younger families — would see ripple effects that add to their costs.

They must have taken a cue from my wife.

If she can get me to buy her some new shoes then she has money left over to buy the purse.

To save money, anything not paid for by the federal government is paid for by the individual.

And who says these folks aren't bright?

Are you ready for some *Real* Death Panels?

Much has been made of the Death Panels enabled by ObamaCare©; last we looked, they had morphed into “end of life counseling” programs. Or so we thought.

Unfortunately, there's new news on this front:

"(T)he Independent Payment Advisory Board (IPAB), will face heat in the coming months from Congress and from the courts ... the IPAB is the “real death panel” in the health care law."

Quite so.

For those who may not be aware, the IPAB is an unelected, unaccountable panel whose job it is to dole out (ie "ration") health care dollars to Medicare beneficiaries. One can see, by the way, why there are those who would wish to opt out of such a system. The board's criteria is based not on need or efficacy, but cost alone.

And here's where it gets really scary: this process is every bit as transparent as the ObamaWaiver©'s. That is, unelected officials will be in charge, with no oversight, determining who lives and who dies, potentially based on political affiliation and support.

What could possibly go wrong?

Tuesday, March 29, 2011

Exchanging Your Plan

One of the unintended consequences of Obamacrap is the millions of people who could LOSE their employer sponsored group health plan and are dumped in to the Exchange. According to The Hill:

Big companies may eventually look to dump their employees onto new state-run health insurance markets in the future if a key aspect of healthcare reform turns out to be successful, an Obama administration health official predicted Tuesday morning. Starting in 2014, millions of individuals are expected to purchase insurance through new state health insurance exchanges, which are supposed to offer more affordable and quality coverage. But comments from some large employers have sparked fears that major corporations will eliminate health insurance when the exchanges open, adding an unanticipated burden of millions more onto the new markets.

Yes, that is the promise.

More affordable health insurance.

Problem is, it's a lie.

Under Obamacrap, health insurance premiums will rise precipitously rather than going down. The lie is the kinetic energy that supposedly will flow back to the participants in the form of tax credits which are supposed to reduce your monthly cost.

What happens when the government runs out of Chinese federal dollars to create those tax credits?


“Congress estimated that as many as four million people would move from employer-provided care to the exchanges,” the HR Policy Association wroteto state governors on Monday. “We believe, however, Congress may have significantly underestimated the shift to exchange-based care that will result from the new law.”

Just like they underestimated how much Obamacrap would save the taxpayer.

Oh, what a tangled web we weave when once we practice to deceive.

“If it plays out the exchanges work pretty well, then the employer can say ‘This is a great thing. I can now dump my people into the exchange and it would be good for them, good for me,'

Everybody wins, right?

And let's not forget, "if you like the plan you have you can keep it . . ."

But hey, it's only money!

Remember how the bill we had to pass to learn what's in it was going to save us boatloads of dollars?

Turns out, not so much:

"In particular, the provisions related to expanding health insurance coverage were projected to increase the deficit between 2012 and 2021 by $1.04 trillion ... they are now projected to increase the deficit by $1.13 trillion over that period."

That's an 8% increase in one fell swoop. And that's only the beginning:

"The estimated cost of the coverage provisions ... is a good deal larger over the 2012-2021 period than over the 2010-2019 period."

Why is that, do you suppose?

Well, it's really by design (such as it is): by "frontloading" the costs and then tacking on the "benefits" down the road, the actual impact on the deficit is delayed, but not gone.

Never let it be said, though, that the CBO lacks a sense of humor:

"As we have noted repeatedly, our projections of the budgetary impact of last year’s major health legislation are quite uncertain because assessing the effects of making broad changes in the nation’s health care and health insurance systems requires assumptions about a broad array of technical, behavioral, and economic factors."

More succinctly: "we have met the enemy, and he is us."

[Hat Tip: Bob Vineyard, CLU]

Grand Rounds is up

Family doc Mike Sevilla (formerly known as Doctor Anonymous) hosts this week's great collection of interesting medblog posts. Do check it out.

Monday, March 28, 2011

Use it vs Lose it

The major benefit of Flexible Spending Accounts (FSAs) is that contributions go in pre-tax, and eligible withdrawals come out tax-free. The major downside is that money left in the account at the end of the year is forfeit, which can discourage folks from participating in them.

A new bill, HR 1004, seeks to ameliorate this problem by allowing folks with unused balances to "cash out" at the end of the year (albeit with some tax penalties, which is fair).

Since ObamaCare© caps the amount at risk (ie the maximum contribution) at $2500, the sponsors of the bill believe that more folks will be willing to take a chance, driving up participation levels.

What say you?

[Hat Tip: National Underwriter]

Goodwin's Law Prevails

No, not Godwin's Law, Goodwin's, as in Wayne Goodwin, the Tar Heel State's Insurance Commissioner. In some ways, it's old news:

Settlement? What settlement?

This one:

"Cigna Healthcare of North Carolina will pay a $600,000 fine and customer refunds and credits totalling $637,974.98"

That's north of $1 million in fines and restitution, all because of sloppy record keeping and premium calculations, not to mention a consistent failure to process "claims in a timely fashion and ... failing to send acknowledgment letters within three business days for member grievances."

The aforementioned refunds were actually paid out late last summer, but the fines are due now. Incidentally, said fines will be "distributed to the state public school system."

Talk about lessons learned.

[Hat Tip: FoIB Jeff M]

Friday, March 25, 2011

POMS and ObamaCare© [UPDATED]

All those naysayers who pooh-pooh the idea that ObamaCare© will deprive Americans of the basic freedom to choose appropriate health care certainly got an eye-opener this week:

"Judge Rosemary Collyer has ruled that Americans have a legal obligation to accept subpar government health benefits."

But surely, Henry, you must be quoting selectively; there's no way a Federal Judge can force people into such a system.

Actually, I'm being kind, and to understand why, it's necessary to rewind a bit, back to October of 2009:

"Under existing rules, if one elects not to be covered by Medicare, one is also ineligible for Social Security benefits ... The judge went further than just denying the feds' request, though: she explains that these POM's are not supported by the statute. In short, they're making their own law (which is a no-no)."

[ed: POMS are Program Operations Manuals used by the Social Security Administration]

In effect, Judge Collyer said that the POM's were clearly extralegal, and allowed the plaintiffs to proceed against the Feds.

But that was then, and this is now:

"The Medicare Act is very clear that persons entitled to Social Security retirement benefits, i.e., of an age and work history and application therefore, are immediately and automatically entitled to Medicare Part A benefits upon their 65th birthdays"

She goes on to note that the plaintiffs are "trapped in a government program intended for their benefit... and wish to escape."

Seems reasonable enough.

But then, she turns this completely on its ear by ruling that there's "no loophole or requirement that the secretary provide such a pathway."

So what caused this 180-degree shift into bizarro-world?

We went back to the source, Kent Masterson Brown, the plaintiffs' attorney who's been leading the charge. Mr Brown (whom we'd interviewed several times a few years back), graciously shared his time and observations with us, Since his appeal is currently pending, he was constrained in what he could tell us, but he was equally stunned that Judge Collyer could do such an about-face with no new facts presented.

In effect, he told us, her 2009 ruling that the POM's were out of bounds has become a confirmation that the agencies can, in fact, deny his clients basic freedom of choice. Somehow, as he understands the ruling, the idea that one is entitled to a benefit now means one must accept it, regardless of one's wishes.

And he draws a straight line directly to ObamaCare©: the same (kinds of) folks who wrote the POM's will be writing these new reg's. Why would anyone believe these will be any less onerous?

The case now heads to the Appeals Court, where, in effect, Judge Collyer will be arguing with herself. Should be interesting, to say the least.

[A Special InsureBlog Thank You to Mr Brown for his time and expertise]

UPDATE: Mr Brown has written a piece for today's Washington Post, in which he warns that the decision "would allow the "health reform" law to become even more Orwellian than it already is, without any action from Congress ... More immediately, whether they want it or not, seniors will now be forced into Medicare, a program that even Judge Collyer asserts "may bankrupt all of us."

Definitely read it all.

Thursday, March 24, 2011

Man Bites Dog

In a headline worthy of "man bites dog", or "pot calls kettle black", we have this tidbit about Aetna.

Hartford managed care provider Aetna Inc. is suing six New Jersey doctors over medical bills it calls "unconscionable," including $56,980 for a bedside consultation and $59,490 for an ultrasound that typically costs $74, Bloomberg News reports.

The lawsuits could help determine what pricing limits insurers can impose on "out-of-network" physicians who don't have contracts with health plans that spell out how much a service or procedure can cost, the online news service said.

One defendant billed $30,000 for a Caesarean birth, and another raised his fee for seeing a critically ill patient in a hospital to $9,000 in 2008 from $500 the year before, the insurer alleges in the suits. The Caesarean price was more than 10 times the in-network amount Aetna quotes on its website.

"If these charges are accurate, consumers and purchasers should be outraged," said David Lansky, president of the San Francisco-based Pacific Business Group on Health, a coalition of health-insurance buyers that includes Chevron Corp., Walt Disney Co. and General Electric Co.

Lawyers for the doctors declined to comment on specific charges in the suits, and said their clients did nothing wrong, Bloomberg reports.

We now return you to your regular programming.


So the bill we had to pass to see what's in it, touted as the solution to the critical problem of the uninsured, turns out to be a colossal failure?

No kidding:

"(T)he percentage of U.S. residents under age 65 who were uninsured increased to 16.3%, from 15.4%."

I'm shocked, shocked I tell you!

Weiner Wants a Mulligan

U.S. Rep Anthony Weiner, who voted for Obamacrap before he was against it, wants a do over. We are unsure if he had to pass the bill to know what was in it or not. What we do know is on the first anniversary, he wants a waiver for New York.

“The president said, ‘If you have better ideas that can accomplish the same thing, go for it,’” said Weiner. “I’m in the process now of trying to see if we can take [President Barack Obama] up on it in the city of New York, … and I’m taking a look at all of the money we spend in Medicaid and Medicare and maybe New York City can come up with a better plan.”

New York is one of two states that pass on Medicaid expenses to cities and localities, so “the city winds up having an enormous Medicaid expense,” Weiner said.

Sounds like pass the buck time in Yankee town.

New York is one of the wealthiest cities in America so it seems the solution to their problem is . . . tax the rich.

The congressman was trying to debunk Republican “myths” about the health care law during a speech at the Center for American Progress. He used the waivers as way to describe how flexible the law actually is and how “this notion that the government is shoving the bill down people’s throats” is not true.

If it is that flexible, then is it really a law?

Or merely a suggestion . . .

Seems to me the American people, including some who voted for Obamacrap, want a change you can believe in.

Wednesday, March 23, 2011

Inquiring Minds

Seems the vast right wing conspiracy is at it again. On the first anniversary of Obamacrap comes word a "high profile conservative group" is planning on suing HHS to find out the criteria for granting Obamacrap waivers.

I thought it was obvious . . . they use ping-pong balls with numbers.

According to Fox, Crossroads GPS will file suit in the next few days.

At issue is the Obama administration's criteria for granting 1,040 of the temporary health care reform waivers to businesses, labor groups and a handful of states. Those organizations are being allowed to opt out of the Patient Protection and Affordable Care Act -- at least until 2014 -- in order to let them develop systems and alternatives to meet the health care reform law's strict coverage requirements.

HHS data suggest more than 2.6 million people, or 2 percent of people with private insurance, will not be required to enter the new federal system.

Which once more begs the question, if Obamacrap is so great why are folks wanting to get out?

Seems the folks at Crossroads are not the only ones with questions.

Utah Republican Sen. Orrin Hatch and others have complained about the lack of transparency in the waiver process.

"The Obamacare waiver program has all the same flaws as the underlying law: unfettered government power, federal bureaucrats picking winners and losers and the appearance, if not the reality, of favoritism to political cronies," said Crossroads President Steve Law. "UntilPresident Obama is willing to grant the entire country a waiver from Obamacare, his administration needs to come clean on how they decide who wins and losers in the waiver lottery."

And let's not overlook this . . .

President Obama, who famously promised as a presidential candidate to have the most transparent and open government in American history, was scheduled to receive an award for government transparency from a coalition of good-government groups last week. But at the last minute, the presentation was postponed to a future date.

Perhaps his idea of transparency meant something different.

Midweek Link-Fest

For your edification and edutainment pleasure:

First up, it's the one year ObamaVersary©, and the Pioneer Institute hosted a debate on the financial impact of this train-wreck. Courtesy of Josh Archambault, the Institute's Director of Health Care Policy, here's the highlight reel:

2011 Hewitt Health Care Lecture from Mike Dean on Vimeo.

The full debate's available here.

Next, Jane Sanders has put together a pretty alarming graphic about the specific costs of obesity. Here's an excerpt:

Get the rest of the big picture here.

And finally, FoIB Jeff M reports that public employee benefits-cut fever has arrived in North Carolina, where state workers "would pay more for health insurance but get fewer benefits" under a new budget proposal. On the one hand, the proposed changes "scrap a provision that pushed cigarette smokers and those who were very obese into less-generous coverage until they quit puffing or lost weight" (see item above).

On the other hand, the proposal would impose onerous new contribution requirements on said employees, forcing "all active state employees and those retirees in a more-generous plan to pay monthly premiums of between $11 and $22 a month." [emphasis added]

Oh, the humanity!

Children's Health Insurance in Georgia

In Georgia, and almost every other state, parents cannot buy "child only" health insurance. Doesn't matter if your child is healthy or sick. You can't buy it as a stand alone policy.

This has been true since 9/23/2010 and you would think the word would have gotten out by now but apparently not.

WSBTV reported on an elderly Gainesville couple that wanted to buy health insurance on an adopted child. The child is apparently healthy, but they cannot find a carrier anywhere that will insure her.

The Hollanders are in their late-60s and the parents of five biological children and 10 grandchildren.

They took Teri in when they learned her biological mother, who is not a blood relative, could not care for Teri. Karen Hollander told Channel 2’s Diana Davis, “Rather than have the state step in and put her into the system, we took guardianship of her. It’s not something I planned on doing at this stage of the game, starting all over, but life happens,” she said.

When the Hollanders legally adopted Teri three months ago, they were hit with a bombshell.

They said they learned that no insurance company in the United States will cover her.

They could not understand why, and apparently the reporter is clueless as well.

The simple answer is, Obamacare created this situation.

More precisely, HHS Sec. Sebelius took a bad situation and made it worse.

The original law said essentially this. If a carrier accepted an application on a child they could not rider (exclude) any pre-existing conditions. They were allowed to charge a higher rate for sick children, or they could deny them coverage.

HHS decided this was not fair and issued a regulation that prohibited health insurance companies from denying coverage to children.

The result is, no more child only health insurance plans.

The reason for this pushback by the carriers is simple. Many times the standard premium for a child is less than $200 per month. Some carriers are permitted by the state to charge up to 3x the standard rate which may still be insufficient to cover the ongoing medical needs of the child.

To balance out the loss, carriers are allowed to require the child to apply as a dependent to the parents plan. If the parent is accepted, the child will be as well, regardless of how expensive treatment is for the child.

Here is where I take issue with this provision of Obamacrap.

Auto insurer's are not required to issue a policy on a teenage driver. Life insurance companies can refuse to issue a policy on a child, but health insurance is different.

Why is that?

Probably because the idiots that wrote the law, but never bothered to read it before they voted on it, had no clue what they were doing. And if you think it is bad now, just wait. Come 2014 when everyone can apply for insurance without worry of being rejected, guess how much it will cost then?

About 3x current rates.

One good thing that came out of Obamacrap is PCIP (Pre-existing Condition Insurance Plan). Several states, including GA, offer this taxpayer subsidized plan to those who cannot otherwise obtain coverage.

But that does not include children UNLESS they have a health condition that precludes them from obtaining health insurance. Of course that won't happen because if a parent applies for coverage on their child, healthy or sick, the application is automatically rejected but has nothing to do with the health of the child.

And if they apply for coverage and list the child as a dependent, the child is automatically approved (if the parent is likewise approved) which would preclude the child from gaining entrance to PCIP.

Even if the parents did manage to get a carrier to issue a letter of denial because of the child's health, that child would have to be uninsured for 6 months before they could apply for PCIP.

Heck, at least they didn't do like Medicare and make them wait until age 65 or have been disabled for 2 years before they could become eligible.

And speaking of Medicare . . .

The Hollanders have Medicare -- the federal insurance program for Americans over the age of 65. It doesn't cover kids. Though the Hollanders aren’t rich, they're not poor either.

Teri doesn't qualify for the state's Peach Care program or Medicaid.

I still maintain the government did a better job of selling cars (Cash for Clunkers) than they have in designing and managing health insurance.


Child only health insurance is now available in Georgia. HEALTH ACCESS is a basic health insurance plan available for children's health insurance in Georgia.

Hackles and Meds

In recent posts, we've explored the rising costs and potential supply problems of "specialty meds" such as Makena and immune deficiency therapies. Fellow medblogger Lisa Emrich is deeply concerned about the increasing volatility of MS (Multiple Sclerosis) medications:

"It is expected that Gilenya will net more than $3 billion in annual sales. When the pricing of Gilenya was announced in September, members of the MS community were outraged. I was disappointed to say the least. $4000 per month for any medication is outrageous."

Almost $50 thousand a year to treat this condition, most of the cost of which is borne by insurance companies (and thus, thee and me). And even this number is suspect because, as Lisa points out, "you will note that the numbers quoted vary from source to source. Such is the nature of the pharmaceutical business. Patients do not have easy access to information such as wholesale price."

I urge you to read the whole thing for some thought-provoking insights.

Cavalcade of Risk #127 now online

Making his hosting debut, Irwin Jacobs presents this week's Cavalcade of Risk. It's a (not very) dangerous job, but someone's gotta do it.

Tuesday, March 22, 2011

Birthin' and such

Did you know that we spend over $50 billion a year for child-birth related expenses? I didn't, either, but FoIB Kate H sent us the link to an interesting infographic with all kinds of birth-related info. Some, like the aforementioned costs, are more interesting than others (such as predominant hair colors). The graphic itself was apparently put together by the folks at Ultrasound Technician.

The graphic leans heavily on information gleaned by researchers at "Giving Birth Naturally," which provides more than ample citations to back up its findings.

I also found this statistic rather telling: an "[u]ncomplicated delivery ... costs anywhere from $8,000-$10,000 (which) doubles for a C-section." Group medical plans generally cover both eventualities; individual plans generally cover only unplanned C-sections. Come 2014, of course, all of these expenses will be covered under all (non-waivered) medical plans, so look for premiums to sky-rocket based on that provision alone.

One place the graphic fell short was its claim that "America ranks 29th in the world for its infant mortality rate." We've debunked this canard before, of course, but it never hurts to stress how completely screwy it is. In fact, more recent information skewers this claim even more. For example:

"France, the Netherlands, and other European countries don’t count as live births babies who weigh less than 500 grams or had less than 22 weeks of gestation. They are, instead, counted as stillbirths ... in this country, we actually try to save premature and low-birth-weight babies rather than just chalk them up to stillbirths to make our numbers look good."

Spot on.

Quakes, Tsunamis and Reinsurance

The recent disasters in Japan will likely send financial shockwaves across the P&C side of the insurance industry.

A M Best reports that "Swiss Re is estimating claims costs of about US$1.2 billion, net of retrocession and before tax, from the March 11 earthquake and tsunami in Japan" and that AIG "expects to incur a pretax insurance loss of US$700 million for its nonlife subsidiary Chartis Inc. from the March 11 earthquake and tsunami."

When both the wholesale (Swiss Re) and retail (AIG) markets are reeling, one can expect substantial price increases on related lines of coverage (such as homeowners, business and the like). The basic structure of insurance is, of course. "spreading the risk," which translates to "spreading the cost of the risk based on actual losses."

And so our wallets take another hit.

Baby Joseph Update: Still with us (for a little while)

An Emotional Grand Rounds

Dr Val presents this week's collection of medblog posts organized by various emotions. Provocative and effective.

Monday, March 21, 2011

Do We Really Need Insurance For This?

Acupuncturists who are getting snubbed by insurance companies are watching carefully as the Colorado Legislature nears approval of a bill requiring insurers to include them in covered treatments.

A bill given preliminary approval in the Senate on Monday doesn't require health insurers to cover acupuncture treatments. But for those policies that do, insurers would have to accept claims by licensed acupuncturists.

Currently some insurers will pay chiropractors or physicians, but not licensed acupuncturists.
How long before we need insurance to cover a manicure?

Email From a Friend

This arrived a short while ago and I decided to share it. No one knows when their health will change.

Everything happens for a reason.

God has a plan for me - I just wish His plan didn't include cancer.

On the first of the year, we discovered a lump on the left side of my neck. After a failed ten day regimen of antibiotics, a CT scan was done on the February 25 which indicated three tumors. Of course, this prompted an immediate biopsy the next day that ultimately indicated the malignancy - squamous cell carcinoma. The doctors didn't know where these tumors came from, an "unknown primary" as they
call it.

Well, it seems that not only do I have squamous cell carcinoma in my neck, I also have colon cancer. (I know, it's a bad joke - a pain in the ass and a pain in the neck...) In a completely unrelated preventive
test, my GI did a colonoscopy on March 8 and removed six polyps, one of which turned out to be malignant. I have a fraternity brother from Emory who is an oncology surgeon at the Winship Cancer Institute at Emory Healthcare. Charlie has "fast-tracked" me with the best physicians there in all the pertinent areas: ENT, Radiation Oncology, and Surgery. I am fortunate to have such a good friend - we have truly felt like the red carpet has been laid down for us. On March 16, we had to change our original strategy to now include the colon cancer with my other cancer therapy. Last Friday the 18th, I had surgery with the ENT who discovered the "primary" of my neck cancer, the left tonsil, and removed it. This will enable the radiation to be more precise with its targeting. While under anesthesia, Charlie installed a feeding tube or "peg" that will be needed to ensure that I get nourishment when my throat is too sore from the radiation to swallow food. And to complete the day, for the third surgery he also removed the cancerous section in my colon/rectum area.

Emory has what I call "Tumor Talk" on every Tuesday where the entire oncology department discusses their respective cases. I meet next with my oncologist this Wednesday to implement their strategy. At the moment, my lead oncologist feels that we need to begin with radiation to reduce my neck cancer. I'll have the spot radiation for five days a week for seven consecutive weeks. Chemotherapy will run concurrently but for only three weeks.

At first glance, it seems like another terrible event. In the words of Lou Gehrig, "today, I feel like the luckiest man on the face of this earth". Thankfully, I finally stepped up and had the colonoscopy. Had I waited even two or three years, my GI said that I might have "lost my rectum and be forced to poop in a bag for the rest of my life". This way, we caught it early and we can treat it at the same time as the other cancer. If even done next year, I would not want to face another bout
with chemo, radiation, and surgery.

Prognosis is good, even if the next several months are not. Regardless, I'm blessed to have a wonderful medical team, caring and supportive friends and family, and, if I do say so myself, a sense of humor about it all and a positive attitude.

I'll be back in touch as the process continues.

He is one of the most positive, upbeat people I know. I will support him through this in my prayers and any way I can.

The Good of the Many, The Needs of the Few

Over the years, we've posted numerous entries to our "Stupid Carrier Tricks" series. The common theme is that insurance companies, like any other corporation, have no "ethics." And yet, carriers are made up of people, and people do (or don't).

The other day, I attended a CE (Continuing Education) class on Ethics. My fellow participants couldn't understand why I was giggling about an "Ethics" course given - for free! - to agents who'd received a "goody bag" full of tschochkes (chip clips, staplers, etc). Often there's an obvious "line in the sand" across which we dare not step.

Sometimes, though, it's not so simple.

I recently received an email from the Immune Deficiency Foundation (IDF) about Highmark Blue Cross' newest policy regarding those with immune system disorders. This is serious stuff: folks who suffer from these conditions lack the ability to fight off even simple infections. The cost to treat it can be enormous; as regular readers know, prescription costs are a major driver of insurance rates.

And yet.

The people who have these conditions face potentially life-threatening results if their meds are changed or excluded.

Highmark Blue Cross and Blue Shield recently changed the way they cover medications for this fairly exclusive group. And thus begins our saga. After receiving the IDF email, I replied that I was, in fact, interested in learning more. But I also know, from previous experience, that there are usually (at least) two sides to these kinds of stories, and so I reached out to Highmark, as well.

After speaking with the Highmark rep, and reading his follow-up email, I connected with Larry La Motte, the IDF's Director of Public Policy. Larry very graciously gave me about an hour of his time, and I came away from the experience with quite mixed feelings. What struck me deeply is that, from my perspective, both sides are "right." That is, there's no obvious "bad guy" here. The good news, such as it is, is that the folks from IDF (and other such groups) have obviously swayed the debate: it appears that Highmark's initial position has softened.

So what's the story?

According to Highmark's Aaron Billger, there are about 350 Highmark insureds potentially affected by this policy. To put that into perspective, the carrier insures over 4 million people. By any objective measure, 350 out of 4.something million is less than a rounding error. Of course, the lives of these 350 people are no less (and no more) important than the other 4.something million, but the cost of their meds affect every single one of them. What to do?

Well, one way to handle this would be to exclude all such treatments. That seems draconian (although not something I'd put past "Sir" Donald Berwick), but continuing to pay for all manner of treatment isn't fiscally sound, either. What Highmark plans to do is to change the way it covers these treatments, both for those currently covered and those who come on board beginning next month.

The aforementioned IDF is, understandably, displeased with what they see as a potential death sentence for those insureds affected by the new plan design. Briefly, it is their belief that the status quo ante was sufficient and justifiable, and they'd prefer that no such changes be implemented. The carrier demurs, and thus the impasse.

According to the IDF's email, there were 4 major sticking points:

"IDF has asked that any Highmark policy should:

• Not determine the specific IgG therapy a patient must use

• Ensure that patients already stabilized on an IgG therapy not be switched to another therapy without medical cause

• Allow physicians an opportunity to prescribe an alternative if they determine it is in the best interest of the patient

• Better inform patients and physicians about its policy plans and gain direct feedback on their recommendations

It seems to me that the first one is unreasonable: if the carrier is expected to pay for something, then it seems to me that they get to make that call (within reason). The second and third, however, do seem reasonable (the fourth is bluster).

What's heartening is that, in the Mr Billger's email, "a large majority [of the affected insureds] are already on our preferred IG product. They will not be directly impacted by this policy." He also reported that the new policy will now "provide continued coverage for members currently using non-preferred IG products, when clinically appropriate, with no disruption." And finally, the new "policy will cover a non-preferred IG product for someone new to therapy when the prescribing physician documents ... why the preferred product is not suitable."

Seems to me that this has been resolved in a manner that's fair to all involved, and causes the least disruption and potential danger to the affected members. Still, it offers a valuable lesson in how carriers can work with special interest/needs groups to find common cause and solutions.

Kudos to Highmark and the Immune Deficiency Foundation (as well as the other groups involved) for defusing a potentially volatile situation and working towards a resolution that's in everyone's best interest.

Goodbye Health Insurance, Hello Health Care

Obamacare was hammered out behind closed doors and passed in the middle of the night by people who never bothered to read the bill or even think about the consequences of what they had unleashed.

One year later and Obamacrap is still in its' infancy but is already having a noticeable impact on health insurance . . . most of it negative from a consumer perspective.

Health insurance companies have responded by withdrawing from some markets (leading to less competition and higher premiums), laying off workers, closing offices and dramatically cutting compensation to agents.

They have also started to diversify into non-regulated businesses in order to preserve profits. Kaiser Health News reports the following.

UnitedHealth Group bought ChinaGate, which helps bring medical treatments to market in China; Picis, a technology vendor specializing in clinical and financial management systems for hospital emergency departments and intensive care units; the medical screening company Wellness; and six other firms.

In December, Aetna acquired Medicity, a business that helps hospitals share patient information. The federal government will reward hospitals and doctors with more than $30 billion in increased Medicaid and Medicare payments by 2015 for adopting electronic medical records, but only if they can share their data.

Also in December, Humana bought Concentra, a Texas-based urgent- and occupational-care provider with clinics in 40 states. More than one-third of Humana members live within 10 miles of a Concentra clinic, making its services convenient for the insurer's members. Last year it also bought a health coaching firm that helps employers keep workers healthy, and in February it partnered with a South African company to launch new wellness services in the United States.

So many confuse health care with health insurance, now maybe they will understand the difference and find something new to complain about.

The current trend is largely driven by the health law, said Ana Gupte, an analyst with Sanford C. Bernstein & Co.

The newer ventures will not replace the core business of selling health coverage.

"They're very synergistic with the health-insurance [product]," Gupte said, giving insurers more tools to control medical costs while potentially increasing earnings.

More control over the cost of health care. That is a good thing for consumers if it lowers the cost of health care, which is something only promised by Obamacrap, but never addressed.

Sunday, March 20, 2011

The MVNHS© Hates Seniors

Well, what other conclusion can you draw from this:

"Thousands of older cancer patients are being denied potentially life-saving surgery because of ageism in the NHS."

As we've documented countless times before, the Much Vaunted National Health System© consistently looks for ways to ration care to its elderly population. Certainly, this is an easy (if morally bankrupt) way to rein in runaway health care costs, but it should certainly give pause to those proponents of Obamacare© who are themselves reaching maturity.

Or are just closing in on it:

"The chances of being operated on start falling in middle-age and plummet for those in their 70s and older ... They reinforce evidence showing older people still get a raw deal from the ‘institutionally ageist’ NHS[sic]"

And that's not all: in those cases where local expertise is lacking, few elderly patients are being referred to other experts. Recognizing that Brits lag far behind us in cancer survival rates, lead researcher Mick Peake acknowledges that "internationally our biggest gap in terms of survival is in the elderly," adding "if you can give a seventysomething-year-old ten or 15 years of active life, you should certainly offer it to them."

Or not.

At the risk of emulating a broken record, I would remind our readers that this is the system which "Sir" Donald Berwick (current CMMS honcho) advocates and admires.

Saturday, March 19, 2011

Viagra - It's Not For Everyone

Seems the taxpayers have been funding fun for seniors on Medicare to the tune of $3 million. Since 2007 we have been paying for Viagra for Medicare and Medicaid beneficiaries.

The Medicare Part D program was not supposed to fund prescriptions for erectile dysfunction but due to a computer glitch the prescription drug program has paid for it any way.

The insurance program for the elderly and disabled paid out an estimated $509 billion in benefits in 2010, about 11% of which went for outpatient prescription drugs.

But still, the inspector general tells CMS to figure out whether it can claw back some of that money from the pharmacy-benefit managers and insurers that sponsor the Part D plans. (They were supposed to know that ED drugs were excluded.)

That is some recall.

All because of a software problem . . .

Friday, March 18, 2011

Why is this News?

According to HuffPo, "57% of Americans that lost jobs could not afford to buy health insurance".

Well duh?

They probably are having trouble affording housing, food and basic necessities of life.

So why is this the headline?

In addition, 19 million Americans who tried to buy a health plan in the individual insurance market between 2007 and 2010 were either rejected due to a prior health condition or unable to find affordable coverage that fit their needs,

This is so vague as to be meaningless. Why not break it out and tell us how many were rejected for insurance vs. lumping them in with those that could not find a plan they like or could afford?

Of course they neglect to say that those losing jobs will normally have access to COBRA and after that expires, a HIPAA conversion plan. So even if they are denied coverage on a medically underwritten basis it isn't like they are totally shut out of the market.

Somehow this bit of information never makes it into the piece.

The government allows laid-off workers to remain on their former employers' health insurance via the COBRA program, but workers must pay the full cost of the insurance -- their share plus their former employer's share -- which is often unaffordable. The stimulus bill of 2009 provided a 65 percent subsidy for COBRA plans, but Congress dropped the subsidy last May due to deficit concerns.

Flash: The government doesn't have any money. They are tapped out and the Chinese aren't willing to spot us more cash until we show some fiscal responsibility.

The problem isn't health insurance so much as it is the economy. When people have jobs and steady income everything else pretty much evens out.

But I suppose it was a slow news day at HuffPo.

I mean it's not like there is anything going on in Japan or Libya . . .

Close, but no cigar?

I've often wondered why group plans, unlike individual medical, don't differentiate between smokers and non-smokers. It's long been known that tobacco-users have higher frequency of claims, miss more work, and generally drive up the cost of healthcare (and thus, insurance).

Until recently, though, this has not been reflected in group medical plan rates. When requesting group quotes, we typically include sex and age, family status and at least some medical underwriting information, but not tobacco use.

That may be changing, however:

"Some Maricopa County employees are fuming over a new health-plan requirement forcing them to submit saliva for nicotine analysis ... those testing negative for tobacco use are spared a premium that is $480 higher per year."

Covered employees who decline to submit to the testing are automatically assumed to use tobacco, and get hit with that $40 per month surcharge. On the other hand, employees are concerned that the information garnered from these tests may not be limited to tobacco use, but for more invasive purposes.

And then there are those who, on principle alone, refuse to participate, even though they're not tobacco users:

"I'm going to be penalized this year, but I'm still not taking it," he said. "This is a forced penalty and I've never seen anything like this. It's a disgrace."

I have little sympathy for this particular fellow: as a government employee, the taxpayers foot the bulk of his health insurance costs, and have a right to demand value for their taxes. The gentleman (and his cohorts) are free to opt out of the county-provided plan and find their own coverage in the open market, at their own (increased) expense.

The fly in this particular ointment, though, comes from a spokescritter who admits that they "do not keep data on how much tobacco users cost to insure compared with non-tobacco users." It's not enough that they "believe" that tobacco users cost more in claims; facts, not faith, are required here. It doesn't seem to me unreasonable that such data would be easy enough to get from their insurer(s).

The bottom line, of course, is the bottom line:

"I don't like my fluids on record in some file ... I would prefer not doing it, but we have to, to get the $480. That's about what it comes to."


Cavalcade of Risk #127: Call for submissions

Irwin Jacob at My Personal Financial Journey makes his hosting debut next week. Submissions are due this Monday (the 21st), and Irwin asks that you 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.

Thursday, March 17, 2011

Testing 1, 2, 3....

The folks at the Kaiser Family Foundation (KFF) have introduced an interesting (if flawed) interactive quiz about ObamaCare©. It's 10 simple questions that ostensibly test one's knowledge of that train-wreck, and then offers up your "score."

The problem is that at least two of their "correct' answers are wrong:

2. Will the health reform law allow a government panel to make decisions about end-of-life care for people on Medicare?

KFF claims that "(n)o such panels exist;" we know better.


3. Will the health reform law cut benefits that were previously provided to all people on Medicare?

KFF says "no;" again, IB readers are much better informed.

Since their own answers are only 80% correct, I'll give this one a B-.

Show some CLASS, man!

As we've reported, the Community Living Assistance Services and Supports (CLASS) act, part of ObamaCare©, has some major structural flaws. One of the most critical of these is that it is, to be blunt, unsustainable.

But what does that mean?

The dictionary defines 'unsustainable' as "not able to be maintained or supported in the future," or, as we put it, "a plan that's guaranteed issue, with (ostensibly) no waiting or elimination period and "unlimited" benefits is not exactly a candidate for "most stable rates."

But that's only part of the story.

Today, the House Energy and Commerce Committee will begin its own investigation into the program's long-term viability. On the one hand (and as we noted previously), "for several years, program managers would collect premiums for workers without providing benefits."

[As an aside: that seems to be the hallmark of the whole ObamaCare© "model:" pay now, benefits (maybe) later]

So what happens when the older folks, who haven't paid in all that long, start making claims? Well, premiums rise, resulting in classic adverse selection, and ... well, "(a) resulting series of losses, premium increases and decisions by younger, healthier insureds to drop coverage could lead to a death spiral that would kill the program."

And all those premiums paid in?

Well, you know.

Health Wonk Review: Spring has sprung!

Glenn Laffel hosts this week's round-up of wonky posts, in his own version of spring training.

Wednesday, March 16, 2011

In case there were any doubts...

About the endgame here, noted rightwinger John Conyers thoughtfully explains:

[Hat tip: Hot Air]

Open Mic Night: HHS Secretary Shecantbeserious

They say that when one door closes, another opens. It appears that even as Gilbert "Aflac" Gottfried exited stage left, Cabinet member cum comedienne Shecantbeserious has entered stage right. In her stand-up debut at Politico, she rocked the house with some great one-liners:

"Just 12 months after [ObamaCrap] became law, the American people are enjoying new protections, greater freedoms and lower costs.

Children are now protected from being turned away by insurers because of a pre-existing condition

Good one, Kathy!

The punchline is spoiled, of course, by the fact that (with few exceptions) there are now no child-only policies available. So the fact that that they can't be declined for pre-existing conditions is scant comfort to those who can't buy it at all.

"Seniors enrolled in Medicare now have the freedom to get preventive care ... for free."

Really? The doc's no longer get paid for their services? Bet that's news to them! Of course, the rest of us do pay for these services, in the form of higher taxes and, of course, less choice.

Here's a howler:

"Early signs show that ... the number of small businesses offering coverage to employees is increasing."

Is that right? One supposes it would be asking too much of Ms Shecantbeserious to offer a cite for this claim; the truth is that, because of the poor economy, more small businesses are failing, and fewer that are left plan to continue offering plans.

And another cute one:

"Perhaps less widely recognized ... has been the way the law is demanding transparency and accountability from the insurance industry to bring down premiums."

It certainly takes a certain chutzpah to rail on the insurance industry about "transparency" given the process by with this train-wreck was forced onto an unwilling citizenry. And premiums going down? That's Lenny Bruce-level funny right there.

But wait, there's more!

"And for the first time, insurers are being held accountable for the way they spend consumer premiums."

That'll come as a surprise to the states that have always required that carriers justify rate increases based on claims and other factors. Had she herself been an insurance commissioner. she might have known that. Oh, wait... Never mind!

The hits, they keep on coming:

"Today, Americans also have a new Web-based tool that allows them to comparison shop for the best insurance options ... Go to www.[obamacrap].gov to check it out."

As Bob's noted, this site is itself quite the joke.

But the lady's on a roll:

"These efforts are helping to make the health care marketplace more competitive"

Excuse me a moment while I catch my breath.

With fewer choices available as carriers exit the market, this one's quite the knee-slapper.

For some reason, she turns serious at the end:

"Ultimately, we know that the biggest factor driving up premiums is the soaring cost of care."

I was unaware that we'd made Ms Shecantbeserious an honorary co-blogger. After all, we've been saying this for years in the (previously) vain hope that someone in DC would listen. Apparently, she's been an avid IB reader all this time. The problem, of course, is that she still misses the mark: "Analysts predict that by 2019, these efforts could save an additional $2,000 for a family policy for employer-based coverage."

The only thing missing is context: what good is that savings if it still means that coverage is unaffordable? How many people seriously say "sure I'd buy that Bugatti if they'd knock $2000 off the list?"

Don't quit the day job, Kathy.