Well, well, what have we here?

From Bloomberg (the news service, not hizzoner the mayor):

"Drugmakers led by Pfizer Inc. agreed to run a “very significant public campaign” bankrolling political support for the 2010 health-care law, including TV ads, while the Obama administration promised to block provisions opposed by drugmakers . . .

Whole lotta backscratchin goin on.  For whose benefit?  Yours?  Mine?  Well, not exactly:

 “President Obama’s efforts to enlist the support of private industry are exactly what presidents have always done to enact major legislation,” U.S. Representatives Henry Waxman of California and Diana DeGette of Colorado said in a joint statement"

Exactly. 

And isn't that absence of transparency exactly, precisely, and without doubt one of the principal problems that occurs so often in Washington? 

No-High Weed

From time to time, we've written about medical marijuana. One of the potential arguments against its use is that simply saying "it's for medicinal purposes" seems somewhat disingenuous.

Now comes word of a pot breakthrough:

"Israeli scientists have cultivated a cannabis plant that doesn't get people stoned in a development that may help those smoking marijuana for medical purposes ... the new cannabis looks, smells and even tastes the same, but does not induce any of the feelings normally associated with smoking marijuana"

Interesting development.

Yeah, about that 3000% Premium *Decrease*

"Curtis Johnson got the shock of his life yesterday when he opened a letter from Clearwater Christian College and discovered that his student health insurance fee was going to more than double – thanks to [ObamneyCare©]."

Ooops.

Alphabet Soup News

CongressCritters will be working on tweaking Health Savings Account (HSA) and Flexible Spending Account (FSA) rules tomorrow:

"One of the bills, for example, H.R. 5842, the Restoring Access to Medication Act bill, would restore health account holders' ability to use HSA and FSA cash to pay for over-the-counter medications not prescribed by physicians."

As we've pointed out before, this rule made no sense at all to begin with. Aren't we supposed to be using less health care?

"Other bills up for consideration could make it easier for FSA holders to get back or roll over unused balances at the end of the year."

Again, one of the major problems with FSA "use it or lose it" requirements is that it encourages profligate spending.

"A third bill up for consideration, H.R. 5858, would let early retirees over the age of 55 use HSA funds to pay for health insurance without paying income taxes on the distributions."

Currently, HSA funds can only be used to pay for (some) Long Term Care (LTCi) and COBRA premiums, and Medicare premiums once one hits the magic 65.

Nail number 27 in the Coffin

HHS recently released new guidelines outlining who can be a provider in a hospital setting.  The headline reads:
 

HHS FINALIZES NEW RULES TO CUT REGULATIONS FOR HOSPITALS AND HEALTH CARE PROVIDERS, SAVING MORE THAN $5 BILLION

“Today, Health and Human Services (HHS) SecretaryKathleen Sebelius announced significant steps to reduce unnecessary, obsolete,or burdensome regulations on American hospitals and health care providers.“

Four changes were announced, including this one:

“Require that all eligible candidates, including advanced practice registered nurses and physician assistants, be reviewed by medical staff for potential appointment to the hospital medical staff and then be granted all of the privileges, rights, and responsibilities accorded to appointed medical staff members.”

With this change, an APRN (Advanced Practice Registered Nurse) or PA (Physician's Assistant) can do everything a doctor can do at an 85% reimbursement rate of a doctor.  The government will save significant monies if they are paying 15% less for the same service by virtue of the fact that a doctor is not performing the procedure.  One of the stated advantages is to free up doctors for more complex cases, but the real advantage is financial.  In addition to collecting less, these mid level providers also cost a hospital less with salaries being half that of a physician.  So, even though the hospital will get a reduced payment, they will not have the overhead associated with doctors.

If these rules are approved, then hospitals will be able to reduce their physician staff to the bare minimum to handle the more complex cases and hire on less expensive APRN’s and PA’s to do the work currently being done by Doctors.

Cavalcade of Risk #158 at Nina's Place

 Nina Kallen hosts this week's round-up of interesting and insightful risk-related posts, including some interesting personal anecdotes.

Pioneering MassCare, Part Deux

Last week, Kelley posted on the folly of taxing the "RichDoctor," including a video on that new MassCare scheme. Today, the Pioneer Institute presents the second video in that series.

In the video, Josh  Archambault (Pioneer's Health Care Policy Director) interviews Brian Rosman (Health Care for All's Research Director):

Late to DIAM

That would be Disability Insurance Awareness Month, which is (or, was) May. Well, better late than never.

Do you know how much money you'll make over your lifetime? It may well be more than you've considered. And, of course, disability insurance helps protect those potential earnings, keeping food on the table and a roof over our heads.

But how to quantify that?

The folks at the Life and Health Insurance Foundation for Education (LIFE) have made available from helpful calculators to make that easier.

Just click here, and have at it.

And once you've figured out how much you'll make, and decided you want to protect it, contact your local, independent agent for recommendations.

Question: Need Lower Costs? Answer: Higher Taxes !

 Kelley recently posted a thoughtful comment on what Massachusetts has been up to:

“Providers that charge prices deemed excessive and that they cannot prove are linked to above-average quality would pay a tax”

Additional taxes on physicians to reduce excessive medical cost? Yeah, that’s gonna work.

IMO, Physicians are getting a bum rap from people who blame them for rising medical insurance premiums. Yes, rising physician fees are among the reasons – but that cannot be the main reason.

First the big picture: physician charges, primary and specialists together, are + / - 30% of total national medical care spending.  (In the employer medical benefit plan I once managed, physicians’ charges amounted to 37% of our total yearly cost).  To blame rising premiums on a single component equal to 30% of the total medical spending is clearly wrong.

It’s true that insurance premiums rise because per capita medical costs rise.  So the right question is much broader: Why do medical costs rise?

I believe there are four main reasons:

1.  Aging population

Older populations have more chronic conditions that are more expensive to treat than conditions prevalent in a younger population.  (I assume everyone agrees that a “Soylent Green” strategy is no solution). 

2.  Impact of technology  

Modern innovations in medical care have generally been more expensive. (I assume everyone also agrees atorvastatin should remain on the market, along with MRI’s, laser surgery, and the multitude of examples of modern medical care that have value - not simply cost).

3.  Consumption of a more expensive mix of services year by year

A more expensive mix of services each year means the overall cost of medical care rises, even if not one physician raised her fees.  I almost never see this factor mentioned. 

It appears this change in mix results mainly from

(a) growth in the ratio of specialists to total physicians 

(b) evolution of more costly medical specialties (e.g., diagnostic radiology), driven by technology 

(c)  “downstream” impact on hospitals that must support the new kinds of treatments including necessary equipment/devices.   

4.  Overinsurance - insurance that reimburses medical expenses virtually in full. 

Medical professionals and institutions whose patients have their fees paid virtually in full have no incentive to find ways to reduce them.  And patients have no reason to care, or ask, if there may be perfectly adequate treatment alternatives that are less costly.

Are American policy decisions based on correct diagnosis of the problems we face?  For example, can anyone demonstrate whether Americans consumed too much care in 2009 or whether we consumed too little in 1980?  Why has the emergence of newer, super-specialty treatment not reduced the trend in total cost?  What is the evidence that the growth in specialist care is producing better outcomes - even for the same cost? How can medical care be delivered in many other nations with arguably comparable outcomes to the U.S. but at much less cost?   And by the way, if services are paid essentially in full by a third party - private or government, doesn’t matter – does it make sense to blame physicians for filling in numbers on what amounts to a blank check provided by the third-party payers?  The answers carry enormous policy implications.   IMO, the fees that physicians charge for their services are much less significant than these answers.  

Yet America has now been committed to specific “reforms” that don’t appear to consider, much less answer these questions.  Our health policy leaders and pundits have done a remarkably poor job explaining why.  In any case, I suspect that the answers aren’t to be found in any legislative body that behaves as though higher taxes are the right answer to every problem.

Tax the Rich{Doctors} to Lower the cost of Healthcare [VIDEO ADDED]

In the ongoing drum beat against the doctor in terms of income earned, Massachusetts lawmakers are trying to lower the cost of healthcare and have decided that doctors simply charge too much.  I spoke about this perception of the richdoctor previously as more of an attitude, but Massachusetts has taken it to a practical level with monetary penalties for the richdoctor.

“Massachusetts House leaders released amajor proposal to curb health care costs Friday, calling for new limits on thefees charged by hospitals and doctors and for creation of an independent agencyto monitor medical spending….Providers that charge prices deemed excessive andthat they cannot prove are linked to above-average quality would pay a tax,similar to the luxury tax Major League Baseball imposes on the big-spending NewYork Yankees and Boston Red Sox”

Of course the doctors and hospital groups are fighting this:

“Lynn Nicholas, president of the state hospital group, said, “To expect the health care industry to perform at less than the economy overall is unreasonable and will impinge on our ability to deliver care at the level people expect. . . . That may damage the economy more than it helps it, and, because of that, jobs may be lost.’’

The bill will not only lower what a physician can charge for an appointment or procedure, but a tax will be levied on the provider if he/she cannot prove that the care was more exceptional than the care down the street.  Medicine is a service and we all have different definitions of quality service.  Thus, an immeasurable item cannot be proved or disproved.  The only measurable component in healthcare is if you are still alive after the appointment or procedure.  If you are, then the quality was excellent.

Physicians today are being squeezed financially, with increasing overhead and stagnant reimbursement due to a frozen Medicare fee schedule for approximately 10 years, now Massachusetts not only wants to lower reimbursement rates, but tax providers for simply trying to stay viable in business.  Ms. Nichols states this rather well, one cannot expect a business person to perform their skill or sell a product at less than is needed to keep one’s business profitable.

“The bill also encourages providers to form so-called accountable care organizations to care for patients in a more efficient coordinated fashion, and pushes insurers to shift toward global payments, which pay providers a lump sum to care for a group of patients, and away from paying separate fees for every service.”

If this bill passes and implemented, then doctors will have to consider if they are willing to take pay cuts, live at a lower standard of living than doctors a generation ago, and continue to work the same number of hours they work now, in Massachusetts at least.

UPDATE: This video, from the Pioneer Institute, offers five ways that payment reform legislation on Beacon Hill misses the mark on true health care reform:

Cavalcade of Risk #158: Call for submissions

Nina Kallen hosts next week's CavRisk. Entries are due by Monday (the 28th).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post ("Remarks")

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

Thanks!

Ezra K finally finds a nut!

As we've repeatedly knocked Ezra Klein's less-than-stellar grasp of insurance issues, it seems only fair to point out when he actually gets it right. An on-going IB meme has been consumer-centric health care, the goal of which is to educate and empower insureds to make more efficient health care choices.

Ezra reports that Blue Cross of Massachusetts (BXM) is attempting to do just that. He may actually be a closet IB reader, acknowledging early on that "Massachusetts has had, for years now  ... some of the highest health insurance premiums in the country."

BXM has introduced a new "tiered" co-pay system to incent its insureds to choose less expensive, but equally effective providers. It's not really new - Golden Rule flirted with this a few years ago, as did other carriers - but it's notable for the particular market, and its scope.

And it seems to be working. CEO Andrew Dreyfus reports that:

"[We] haven’t heard much in the way of complaints from the employers ... however, heard from one of Boston’s more expensive hospitals.

They were starting to lose referrals because of the new payment model... ‘can I lower my prices?’ I said, ‘absolutely.’”

Qualified kudos to Klein.

[Hat Tip: FoIB Holly R]

Monday Lagniappe

■ We haven't really addressed the new ObamneyCare© CO-OP program, and now's a good time to start. Scheduled to launch in 2014, these are essentially "mini-insurers" designed to compete with the big boys. CO-OP's (the misnomered Consumer Operated and Oriented Plan) would be state-licensed, and available both inside and outside of the Exchanges, targeting the small group and individual medical markets.

I remain skeptical of their viability, but "[t]he organizers ... are facing plenty of competition and strict scrutiny."

We'll see.

■ As we've repeatedly pointed out, MLR's (Medical Loss Ratios) are a dumb idea. Nevertheless, they're real (and not so spectacular); UHC has a new report out predicting that the total payout will be "less than 1% of total premium for 2011."

Be still my beating heart.

■ Frequent IB tipster Holly R dropped a dime on this interesting item:

"While UCLA Health System has long prided itself on being at the forefront of treating patients ... it is now trying to lower sharply the cost of providing that care. By enrolling young patients with complex and expensive diseases in a program called a medical home, the system tries to ensure that doctors spend more time with patients ... to coordinate care."

The "medical home" concept is relatively new, but seems promising. By communicating and coordinating care, it's hoped that the cost of that care can be reined in. And as we all know, the cost of care drives the cost of insurance.

Potential win-win.

Health Wonk Review: In-Depth edition

Dr Jaan Siderov hosts an outstanding edition of the Health Wonk Review. Great posts, and lots of 'em, all deftly edited with Dr Siderov's insight and gentle humor.

It Depends...

No, no, no.

Ever heard of the "Dependency Ratio?" Me either, but it's important, and it's scary:

"The U.S. Census Bureau recently reported that the dependency ratio, or the number of people 65 and older to every 100 people of traditional working ages, is projected to climb rapidly from 22 in 2010 to 35 in 2030"

Right now, about 1 in 5 of us is 65 or older. So what, you ask? Well, let's look at that number. It means that about 8 out of ten are working age. But with real unemployment at almost 15%, there are less than 7 working people supporting every 10 retirees. And that number's likely to go even lower as the Boomers continue reaching retirement age.

Why is this scary? Glad you asked:

"A Pennsylvania state appeals court has ruled that the adult son of a nursing home resident is responsible for her unpaid $93,000 bill. And the decision has some elder care lawyers wondering if this is just the beginning of a trend."

The Keystone State is just one of the 30 states which currently have "filial responsibility statutes" on the books. These regs impose an affirmative duty on "adult children to care for their indigent parents;" providers like nursing homes can seek restitution from them. And as the situation continues to deteriorate, how long will it be before the other 28 states follow suit?

So why bring it up?

Well, this is InsureBlog - perhaps there's a clue. How many of us have seriously considered Long Term Care insurance for ourselves? How many fewer have considered it for their parents? Well, LTCi can cost some decent bucks. But with the potential for a $93,000 (or more!) "filial financial burden" it may turn out to be very cheap indeed.

UPDATE: Courtesy of Bob, here's a list of the 30 states with "Filial Responsibility" statutes.

It's for the ObamaKids©

Gotta give the proponents of ObamneyCare© credit: they're still pushing the lies. Hard. Having previously recruited Matlock to take the case to senior citizens, they've now taken aim at another kind of senior, 12th graders:

"In a press announcement released [Monday], HHS stated that HHS Secretary Kathleen [Shecantbeserious] and Secretary of Education Arne Duncan “are reaching out to campus leaders to remind graduating high school, college and university seniors about their new health insurance options under [ObamneyCare©].”

Uh-hunh.

And what, exactly, are those options? Well, thanks to Kathy and her boss, child-only major medical plans are extinct (and have been for  a while). So-called "adult children" can snag a ride on their folks' policy, but at a greatly inflated cost. So much for flying the nest.

Irony abounds as well in that colleges are now dropping student health insurance plans (good riddance, by the way), leaving these new graduates with fewer choices than ever. And, of course, the employer mandate's going to leave them with fewer group health plan options.

But Henry, at least smaller employers will continue to offer affordable health insurance plans, what with the great ObamneyCare© tax breaks, right?

Um, no:

"Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible ... According to employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance."

Shocking, ain't it?

Intrepid Carrier Trick: Rx Edition

This is an interesting and frustrating confluence of several InsureBlog themes: Pharmacy Benefits Management (PBM), transparency and consumer-centric health care. On the one hand, we're encouraged to become more "hands on" regarding our own care, to be more cost-conscious consumers with "skin in the game." On the other, carriers often put up major roadblocks that actively prevent us from saving both ourselves and the insurance company some major bucks.

And sometimes, persistence and common sense prevail. Here's the story:

Melvin and his family have been clients for many years. He early on bought into the Health Savings Account (HSA) idea, and has enjoyed both the savings that it represents and the ability to bring at least some of his health care under his own control. Recently, his wife was diagnosed with a serious (but thankfully not life-threatening) condition, the only treatment for which has been costing him over $600 a month. The good news is that this quickly eats up their $3,000 family deductible. The bad news is that he has to come up with the $600 every month for almost half the year.

A few months ago, he learned about a Canadian supplier that can provide the exact same medicine at about $100 a month. His carrier, Medical Mutual of Ohio (MMO), even has a claims form for just this circumstance. So, Melvin bought a 30-day supply in December (to cover Mrs Melvin until the Canadian supplies kicked in), and then a 90-day supply early this year, waiting the required 30 days before doing so.

He then downloaded and completed the rx claim form, and (as instructed) mailed it to MMO's Pharmacy Benefit Manager, Medco. What we didn't know at the time was that, even though the meds are covered, the process for this method required dealing directly with MMO, not Medco.

It took us several weeks, phone calls and emails, but in the end, Medical Mutual followed through, coming up with a workable, long-term solution. We know this because Melvin has now tested it, and everything went precisely as it should.

This is critical, because as more folks access alternative delivery options (such as from Canada or other exotic locales), these kinds of processes will need to be implemented. Melvin and I are quite happy with how Medical Mutual, once prodded, stepped up and did the right thing.

[Special InsureBlog Thanks and Kudos to MMO's Ed B and Regina D]

An Historic First

Way back on this date in 1761, the first life insurance policy sold in America was purchased by the Rev. Francis Allison of Philadelphia. This makes sense, since the company which issued the policy was called the 'Corporation for the Relief of Poor and Distressed Presbyterian Ministers and of the Poor and Distressed Widows and Children of Presbyterian Ministers,' which was "formed by Presbyterians for their ministers."

But wait, it gets even more interesting: according to an item in the February 3, 1902 edition of the New York Times, the company (by then known as the Presbyterian Ministers' Fund), was also the first insurer to offer non-forfeiture options and cash values.

By 1990, the carrier had become the Covenant Life Insurance Company; four years later, it became part of the Provident Mutual Life Insurance Company, which was itself bought by Nationwide 10 years ago.

The 3000% Lie

Remember back in the day, when Dear Leader promised folks a 3000% decrease in health insurance premiums?

Apparently, his Ginkgo Biloba ran out:

"For the first time, the total bill for the typical family of four with an employer-sponsored health-care plan ... breached $20,000 in 2012."

For those keeping score at home, that's almost 7% more than last year.

Math is hard.

[Hat Tip: FoIB Holly R]

ObamneyCare© Updates

While we wait for the SCOTUS ruling on whether or not any of this will really matter. HHS Secretary Shecantbeserious and her minions continue inexorably on their way towards full implementation. To wit:

■ From the "Death and/or Taxes" Department:

"Final regulations for implementing the health insurance purchase tax credit provisions in [ObmaneyCare©] are set to appear in the Federal Register Wednesday [the 23rd]. "

The income redistribution scheme subsidy program is designed to make the unaffordable health insurance premiums less unaffordable, except for those who must actually pay for coverage.

■ FoIB Jeff M alerts us to this news from the Mountain State:

"West Virginia is peering over the cliff of a Medicaid funding shortfall ... Medicaid goes into FY 2013 with a slight budget surplus, but FY 2014 poses a $236 million shortfall, “which is daunting."

2014? What could possibly be on tap for 2014 that would create such a major budget crisis?

'Tis a puzzler.

■ And, finally, from Dr Brad Flansbaum, this story from The Gray Lady on how small business owners are trying to cope with the onsalught of new regs and requirements being handed down by Ms Shecantbeserious and Co:

"During the most recent meeting of our business group, we asked the owners to talk about how they are handling this increasingly complicated, costly and uncertain issue."

It's an interesting discussion.

The Church vs ObamneyCare© - Breaking News

Last time we looked, the Catholic Church was none too pleased with the direction ObamneyCare© had taken vis: convenience items birth control.

Now, they've turned up the heat:

"Catholic archdioceses and institutions filed suit in federal district courts across the country [today] against the so-called contraception mandate, in one of the biggest coordinated legal challenges to the rule to date ...

The groups are objecting to the requirement from the federal health care overhaul that employers provide access to contraceptive care."

That's gonna leave a mark.

Java Overboard!

A few years ago, we noted that even just a few cups of coffee each day might help "slow the progress of Alzheimer’s disease and even reverse the condition."

Turns out, more may be even better, because loading up on the brew may actually help with longevity:

"[M]en who drank at least six cups of coffee a day had a 10 percent lower chance of dying during the 14-year study period than those who drank none. For women, the risk was 15 percent lower"

And it's not necessarily the caffeine, either; regular and decaf see similar results.

I do have a problem with the article's headline, though:

"6 cups a day? Coffee lovers less likely to die, study finds"

Really? Last I looked, the risk of dying is pretty much 100%, beverage of choice notwithstanding.

Cavalcade of Risk #157 now online!

Dennis Wall presents this week's collection of risk-related posts. Please drop by.

Dying for a quiet ride

File this under "Risky Unintended Consequences:"

"Hybrids are so quiet that pedestrians never hear them coming ... NHTSA studies ... confirmed what many long suspected: Hybrids and electric cars are too quiet for the blind or even the fully sighted to hear them coming."

Ooops.

On the other hand, I was taught to always look both ways before crossing the street.

Of course, that doesn't really apply to the sight-impaired, who count on a certain noise level to assess risk before stepping off the curb. 'Tis a puzzler.

Then again, maybe not:

"Thanks to the Pedestrian Safety Act of 2010 ... the National Highway Traffic and Safety Administration is required to initiate a rulemaking process for minimal vehicle noise—not how quiet, but how loud a car must be." [emphasis in original]

"Initiate a process." As in, start to consider the idea of a study to determine how to proceed.

How many people will die (or be seriously injured) while they commission the blue ribbon panel?

And the problem's only going to get worse, of course, as more and more electric and hybrid cars roll off the assembly lines and into traffic. The good news is that the Chevy Volt contains its own vehicle announcement system:

Tuesday Morning LinkFest

■ We recently learned how resveratrol, a compound found (for example) in red wines, works. But that's not all: turns out, it's also potentially useful in combating the effects of Alzheimer's.

■ The 'web can be a very useful and powerful tool for critiquing vendors, but be careful whom you critique and how:

"Two years ago, Dennis Laurion logged on to a rate-your-doctor website to vent about a Duluth, Minnesota neurologist ... McKee wasn't amused. He sued Laurion for defamation"

It may well be that the truth is a valid defense, but prudence is always a valid idea.

■ From FoIB Jeff M, we learn that upcoming Medicare changes are going to be very costly for at least one hospital - and the odds are good that this isn't going to be an exclusive club.

■ Is this something? The Feds are starting to "audit" ObamneyCare© compliance, including double-checking "grandfathering" status.

And even MORE ObamaFail©

In case you missed it yesterday:

Now what does that banner remind me of?

Stupid MLR Tricks

From the "Be Careful What You Wish For" Department:

"Health-insurance companies must tell customers who get a premium rebate this summer that the check is the result of [ObamneyCare©], according to federal guidelines (late last week)"

The idea is that grateful consumers will necessarily credit their windfall with the new train-wreck law, a net boon for the President's reelection campaign.

Or is it?

As we've noted here at IB, the average rebate is in the neighborhood of $127. That's total, not per month. Yet average premiums under ObamneyCare© have skyrocketed, more than wiping out that piddly savings. So what are the odds that the average insured is going to look at the additional thousands of dollars in premiums he laid out, and then feel good about the measly $127?

Oh wait, did I say $127? Well, that's before taxes.

Yup, as we also noted previously, if your premiums come out pre-tax (as many group plans make available), this is a taxable event. Don't believe me?

Well, believe the IRS.

So not only does Joe Shmo get a token $127, he doesn't even get to keep all of that. Plus, he now has to file an amended return for that year, at a cost that could well exceed the rebate.

And what about those individuals who receive rebates? They may dodge the tax bullet, since very few are able to deduct their premiums. But if they're self-employed, and did take the deduction, well, see above.

MLR may well be the gift that keeps on taking.

Should we pay $11,000 a year to facilitate riskier behavior?

Last week there was news about the possible approval of a drug to treat HIV to now be used to prevent from getting infected in the first place.

"The first drug shown to prevent HIV infection won the endorsement of a panel of federal advisers Thursday, clearing the way for a landmark approval in the 30-year fight against the virus that causes AIDS.

In a series of votes, a Food and Drug Administration advisory panel recommended approval of the daily pill Truvada for healthy people who are at high risk of contracting HIV, including gay and bisexual men and heterosexual couples with one HIV-positive partner."

The quick answer; this is a great opportunity to prevent the spread of a terrible disease.

The more pragmatic answer; at what cost? Condoms accomplish the same outcome with greater success and cost $30 a month if you're doing very well.

Truvada:

"Other speakers worried that wide scale use of Truvada would divert limited funding from more cost-effective options. Truvada sells for about $900 a month, or just under $11,000 per year. The AIDS Healthcare Foundation, which opposes approval of Truvada, estimates that 20 HIV-positive patients could be treated for the cost of treating one patient with preventive Truvada.

"Truvada for prevention will squeeze already-constrained health care resources that can be better spent on cheaper and more effective prevention therapies," the group states in a petition to the FDA."

That is an additional $10,640 per year per individual. From the same article 1.2 million people have HIV and an additional 240,000 are unaware they carry it. How many of them have partners that will now expect someone else to pay $11,000 per year for them to engage in risky sexual behavior?

1.2 million people times $11,000 is $13.2 billion in additional spending. Around 13 billion more than the more effective condom. Who is going to say no? If you do the left will attack you as anti gay. The government doesn't care, it's not their money and sure to buy some votes. Insurance companies won't care, 15% margin on $11,000 is an extra $1,650 they can make now. Self-funded employers would object but HHS would probably just slap them with another mandate then castigate them for not controlling the cost of insurance. 

A simple solution would be to allow the market to charge more for polices that covered this drug, PPACA pretty much killed that solution. If free birth control is now a right granted by our constitution how can this right also not be "found"?

Not really at odds at all

In the HWR Joe Paduda made the following point, which has been made by others on the left;

"- most GOP-authored bills allow people to shop for insurance across state lines, which seems to be at odds with other GOPconcerns that health insurance should be the purview of the states, and the Feds ought not to be involved"

There is nothing at odds in this belief and it has been settled case law for decades. Insurance is regulated where it is sold. This means if I live in MA but drive to DE to purchase an insurance policy the policy will be regulated in DE where it was sold. This is not only commonly done between states but also countries. There are types of risk, usually P&C, that businesses and individuals will insure offshore. Since the policy is purchased outside of America it is not subject to American insurance laws. You need to be careful when you do this as there are tax issues and money laundering concerns but as long as you are legitimately purchasing insurance for an insurable risk, leaving the jurisdiction where the risk resides to buy insurance in another jurisdiction in order to be subject to that jurisdiction's laws is far from new or uncommon, despite what the left would like you to believe.

ObamneyCare© Mecca

We've noted before that certain religious groups have been granted ObamaWaivers© as regards the (Evil) Individual Mandate. Exactly how that's legal has been unclear, though.

Until now:

"[ObamneyCare©] uses the Social Security language of the Internal Revenue Code to determine who is eligible for “religious conscience” objection to the insurance mandate."

That is, since Moslems consider insurance as "haraam" (forbidden), they're not going to be required to buy health insurance. Other religions, including the Amish and Christian Scientists, are also being given free passes on the Mandate.

I find this fascinating: after all, mandate is defined as "[a]n authoritative command or instruction." I googled around, and couldn't find it defined as "[a]n authoritative command or instruction. Unless it's inconvenient or offensive."

Funny, that.

ObamneyCare© News Update

Add another to the roster of states taking a pass on setting up an ObamneyCare© Exchange:

"New Jersey Gov. Chris Christie ...  a bill that would create a health insurance exchange, or Web-based insurance marketplace, in his state."

New Jersey joins Alabama on the roster of states choosing to roll the dice.

Cato's Michael Cannon has an interesting take on this:

"Even if you support ObamaCare, there’s no point in creating an exchange today when the Supreme Court could strike down the entire law as soon as next month ... But even if the Supremes uphold ObamaCare, there is no valid reason to create one of these things."

Michael cites the billions of dollars in state revenues that would have to be shunted from useful programs to fund Exchanges, as well as the inevitable tax increases necessary to sustain them.

And there's this: the (unfunded) Employer Mandate penalizes companies that choose not to offer government-approved health insurance plans. But, as Michael notes, there's a nice little loophole:

"[T]hat tax is only enforceable if a state creates an exchange itself. It disappears in states that don’t create exchanges."

That is, there's a real disincentive for any of the 58 states to actually put an Exchange in place.

Guess we had to pass the bill to learn what's not in it.

Cavalcade of Risk #157: Call for submissions

Dennis Wall hosts next week's CavRisk. Entries are due by Monday (the 14th).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post ("Remarks")

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

Thanks!

From the P&C Files: Marvel-ous insurance

The recently released blockbuster "The Avengers" is (apparently) filled with excitement, mayhem and thrills. But have you ever wondered what kind of damage those great battle scenes might wreak in real life?

Me, either (hey, it's suspended disbelief, after all).

Still, some folks do ponder these things, and I'm kinda glad they do. Else how would we know, for instance, the kind of hits insurers might face if these were real claims (assuming they were covered in the first place):

"Nick Fury and “The Avengers” save the world from imminent doom ... but in real life ... would cost New York City a fortune in the process"

Total (hypothetical) price tag?

"Real-life ‘Avengers’ would cost New York $160 billion in damages"

Still skeptical?

Oh ye of little faith:

Health Wonk Review: Spring Hath Sprung! Edition

Well, flowers are a-bloomin' and veggies are a-growin' and we've got a bloomin' bumpercrop of interesting and wonky posts. This time, I'm eschewin' an official theme, and presenting posts in more-or-less the order received.

That qualifier's in there because this first post, from Dr. Bradley Flansbaum, wins my coveted (and extremely rare) "Editor's Choice" nod for his post that's at once informative, accessible, snarky and insightful.

 In his post, Dr. Flansbaum (who's the Director of Hospitalist Services at Lenox Hill Hospital in New York City), discusses the shortcomings of the well intentioned, but imperfect, Choosing Wisely campaign.  This was an effort, led in part by Consumer Reports, to identify questionable medical practices. Dr F notes that, ironically, "[v]oluntary guidelines generally do not command attention."

And he takes it from there. A most excellent read.

☼ Health Business Blog's David Williams, a longtime HWR contributor and host, scores an interview with the CEO of Taxachusetts  Massachusetts Blue Cross/Blue Shield. As we've long noted here at IB, MassCare has its flaws, but David's interview focuses on the role that commercial insurers play in reining in health care costs, and pushing for higher quality of care.

☼ Louise Norris, of the Colorado Health Insurance Insider's Norrises, is also a longtime 'Review contributor and frequent hostess. This week, she offers her insights into whether, as hospitals continue to grow and grow, they become "too big to fail." And if one of these behemoths does bite the dust, are we in for another government bailout (ala GM)?

☼ One of my favorite health care bloggers is the phantom known only as NWS (NotWithStanding)(real name: Geoffrey Prescott). NWS is about to take leave of us for a while to begin prepping for a medical licensing exam, but not before blessing us with this pair of gems about the ongoing "physician brain drain" and whether or not it's a valid claim:

Part 1.

Part 2.

☼ HWR co-founder Joe Paduda takes on the Grand Old Party, noting that while a lot of Republican lawmakers tout overturning [what we here at IB call ObamneyCare©], there seems to be a deficit of alternatives being offered. Further complicating matters, Joe observes, is that some GOP lawmakers want to keep at least part of the law intact. Interesting times, indeed.

☼ The host of the last HWR, Wing of Zock (have I mentioned that this would be a most excellent name for a rock band?) reports on a recent meeting, held in Beantown, about "Avoiding Avoidable Care." While that may seem redundant, WoZ notes that two of the major stakeholders (that being providers and insurers) seem to have competing interests, but are still "probably in the best position to effectively intervene: They are submitting or paying the claims for this care." The resulting stalemate is a challenge, but one which needs to be addressed.

☼ The estimable Dr Roy Poses has an exposé about a highly compensated CEO, whose company just happens to be in the health care business, and which company has also been fined almost $200 million (US) for violating the False Claims Act. Ouch! So how does the CEO square that circle? Well, you'll have to click the link to find out.

☼ At his Evidence Based blog, Michael Gavin offers a post on unintended consequences. What's a payer really on the hook for if treatment for (say) an accident leads to other drug use down the road?

☼ Jon Coppelman, blogging at Workers Comp Insider, ponders the fine line between voluntary and required. In this case, he takes a hard look at the recent Florida kerfluffle over drug testing for those on the dole and those on the state payroll.


☼ Dr Kerry Willis - a practicing family physician in Beaufort, NC - offers his advice on health care reform, from a physician's perspective.

☼ Over at the Disease Management Care Blog, Dr Jaan Siderov thinks we're in for a wave of mergers in the health care field. The key seems to be whether or not these will ultimately redound to the benefit of the consumer (and Dr S thinks it will).

☼ In her guest post at the Health Affairs blog, Diane Meier, Director of of the Center to Advance Palliative Care, takes to task physicians who really don't "get" the value of such care. She uses the case of a woman with Stage 4 breast cancer to make the point.

☼ Maggie Mahar's post claims that health care reform has been a huge victory for women. I think she's wrong, but her post is noteworthy for its analysis of women's health care costs.

☼ Do hospitals engage in aggressive debt collection practices? Anthony Wright lays out the case, including a special cameo.

☼ Greg Scandlen, posting at John Goodman’s Health Policy Blog, thinks that the major problem with individual health plans is that they're not subsidized by the taxpayer, and makes the case that employees and insurers would benefit by moving away from employer-based plans.

☼ Kat Haselkorn offers an interesting take on whether or not artificially lowering cholesterol levels is necessarily a good thing. While that may seem like a dumb question, consider this: all those statins cost real money, and may also offer a false sense of health security to overweight folks. And there's a real cost to all of those.


☼ Finally, exercising Host's Privilege, I'm offering two posts for your consideration. This actually makes sense, though: two of my (awesome) co-bloggers take opposite sides in the debate on whether or not insurance policies should be bought and sold across state lines. Both offer cogent, interesting rationales for their respective positions.

Con.

Pro.

(Any double entendre is in the mind of the reader)

And that wraps up this week's Health Wonk Review. Please join Dr Jaan Siderov, another of my absolute favorite health wonk bloggers, when he hosts the next edition on the 24th.

Pennsylvania Dreamin'

We first reported on the collapse of long term care insurance carrier Penn-Treaty in late '09. Hard to believe that 2-and-a-half years later, this is still making news.

But it is, and not in a good way:

"[I]n an unprecedented decision of significant national consequence, the Commonwealth Court of Pennsylvania has disallowed efforts by the Pennsylvania Insurance Department (PID) to liquidate ... Penn Treaty Network America Insurance Company and its subsidiary American Network Insurance Company."

The ruling seems to hinge on the Court's belief that the company can be "rehabilitated" (a fancy word for "brought back to life"). This is a potentially historic ruling because it marks "the first time a petition to liquidate an insurance company has been defeated in Pennsylvania." By contrast, these things are usually rubber stamped once the Department of Insurance has deemed the case hopeless.

We've been offered the opportunity to speak with someone "in the know" about this case and its national implications (whatever these may be), and have expressed an interest in doing so. More to follow (fingers crossed hopefully).

[Hat Tip: Robin Ireland]

58 State Insurance Recap

Well, maybe not all 58, but a select few:

■ First up, Empire State officials have nailed health insurers - hard - for violating Timothy's Law. InsureBlog readers have known about this regulation for almost 6 years. Then in 2007, we reported on the law's initial implementation:

"[C]arriers who want to continue marketing in the Empire State must cover mental health claims much the same as they cover any "regular" medical condition"

But it went far beyond that: the law also requires that insurers offer to sell an enhanced mental health benefits package to its group customers; failure to do so has proven, well, expensive:

"New York's Department of Financial Services (DFS) has fined insurers  $2.7 million because the insurers failed to notify small businesses that they were eligible to buy special insurance coverage for mental illnesses and children with serious emotional disturbances"

An expensive lesson. Of course, it's the consumer who ultimately pays this fine: carriers simply pass it along in the form of (additional) rate hikes. Well played, DFS, well played.

■ The "next big thing" arising from ObamneyCare© seems to be Multi-State Plans (MSP's). These are essentially supersized Exchanges, promising increased competition, lower costs, more choice and great taste (not to mention less filling).

■ From the "Careful What You Wish For" Files:

"The individual health insurance price difference limits in [ObamneyCare©] could lead to big increases in rates for some young consumers starting in 2014."

Ya think?!

That this is "news" just goes to show how ignorant the press is regarding how health insurance has worked for many, many years. They have only to look at states which mandate Community Rating to see that this model always increases rates.

Always.

■ Finally, some good news on the exchange front. FoIB Michael Cannon, the Cato Institute's director of health policy studies, reports that Yellowhammer State Governor Robert Bentley has vowed to veto Alabama's proposed Exchange:

"This legislation is premature.  The federal government has yet to establish clear guidelines for a health insurance exchange ... Doing so without clear guidance from Washington would simply be a guessing game"

Quite so.

Retirement Planning and Health Care Costs: Major Disconnect

IRA's, 401k's and the like have taken some major hits the past few years as the economy continues to sputter. Still, lots of Americans choose to (or must) retire each year, all hoping that they've saved enough to finance their Golden Years. They've (presumably) factored in the cost of food and shelter, transportation and the like. And to some extent, they've tried to sock away enough to cover their health care needs over the long haul.

Unfortunately, many of those plans will fall far short:

"According to Fidelity [Investments], couples retiring this year will need, on average, $240,000 to cover medical expenses throughout retirement"

That's up almost 4% from last year, and comes to just shy of $11,000 per year for medical expenses.

The problem:

"Most Americans, however, only anticipate spending about $5,621 a year"

That 50% disconnect can add up to some big bucks over one's lifetime. And it's getting worse, as medical inflation continues to outstrip the overall inflation rate (a little less than 4%).

Of course, Medicare will be there to bear the brunt of most of these expenses, right?

Right??!!

Well, not so much:

"Americans anticipate Medicare covering 68 percent of their health-care costs in retirement ... When pressed to explain this number, nearly three-quarters admitted to guessing. "

And they guessed wrong.

Very wrong:

"Medicare only covers about 51 percent of the expenses associated with health-care services"

That 17 point gap is big enough to drive a truckful of scooters through. And it assumes (unjustifiably) that Medicare itself will still be around. But that's not necessarily a sure thing, given that ObamneyCare© takes a big chunk of that program's funding and shifts it elsewhere.

Death Panels, anyone?

[Hat Tip: FoIB Jeff M]