On the Colorado tragedy, medical bills and health insurance

Our hearts of course go out to the victims of last week's horrific shooting spree, and we wish the survivors a quick and full recovery. But some folks have already decided to politicize the attack, noting that "[s]ome of the victims ... may face another challenge when they get out of the hospital: enormous medical bills without the benefit of health insurance."

The article then goes on to speculate, with zero evidence, that even though there's "no exact count of how many of them don't have insurance ... statistics suggest many of them might not be covered."

Let's leave aside for the moment that such speculation is what got Brian Ross in hot water in the first place, and grant that some (many?) of those at the theater were uninsured.

How come no one's asking "why?" It appears that most of those in attendance were young (teens, twenties and thirties), hardly a high-risk (and thus high premium) demographic. And remember, under the new health care law, those 26 and younger COULD have been on their parents' plans. That they chose to be uninsured is on them. Heck, the wife of one victim is pregnant – without insurance. How were they going to pay for that? HOW they ended up in the hospital has NOTHING to do with the fact that they CHOSE to be uninsured.

Some years ago, we discussed the sad case of "Amanda," another young person who chose not to buy insurance. She ran up almost $2 million in bills for cancer treatment. She didn't expect to get cancer any more than the folks in the theater expected to be shot.

The good news for the Colorado victims is that at least some of their bills will be waived, and their fellow citizens (and Warner Brothers) have generously contributed funds to help pay for their care. But using their plight to score political points is an insult to folks who do play by the rules and accept personal responsibility.

Agent in the Clink: Update

Last week, we reported on the unfortunate case of Aloha State insurance agent Kathleen Kau, who was recently sentenced to 10 years in prison for raiding her clients' insurance policies. We wondered what kind of life insurance policy came with a checkbook (as described in the original article), and reached out to the reporter and to TransAmerica.

We were unable to connect with the former, but yesterday got this answer from Cindy Nodorft (she's in Transamerica's Corporate Communications area):

"Thanks for your inquiry.  I’ve learned that the policy at issue was part of a block of business assumed by Transamerica Life Insurance Company that allowed policyholders to obtain policy loans.  This practice was discontinued in about 2005."

I guess that makes sense, although I'd never heard of carriers issuing checkbooks with loans. It strikes me that this sounds more like a line of credit than a typical loan, but at least we now have an answer.

Thanks, Cindy!

From the P&C Files: Iran, Shipping, Insurance and Oil

Although we primarily concern ourselves with life and health insurance, we're certainly no strangers to the Property and Casualty side of the biz. This item in the Washington Free Bacon Beacon (oops, sorry), piqued my interest:

"The insurance industry and ... lawmakers are attempting to water down a new Iran sanctions bill that would penalize any company that underwrites Iranian affiliates"

Since this is rather outside my bailiwick, I turned (again) to our resident on-call P&C guru, Bill M, who helped me get my head around it.

Here goes:

Acme Industries, which ships oil-drilling equipment to Iran, calls AIG (hey, it's called American International Group for a reason) for a quote. AIG asks all the pertinent questions (including what's being shipped, from where, to where, etc) and generates a quote. Acme likes what it sees, and purchases the policy.

Six months later, Acme is sanctioned for "bolstering the Iranian oil industry."

Under the bill currently wending its way through the House, AIG would then also be sanctioned.

The "prominent lawmakers" mentioned above would prefer to let AIG (or whomever) off the hook.

This item raises a number of questions:

First, would it have mattered if Acme had already been sanctioned before seeking that AIG quote? Are "sanctions" to this process what speeding tickets are to auto insurance?

Second, what if Acme had bought the policy from a broker in London? After all, it's not unreasonable to presume that a carrier might have offices in other countries in addition to a presence here.

If you have experience in this market, we'd appreciate any thoughts you might have on this.

ObamaTax: Told ya so

Bob mentioned this last night, but I wanted to toss in my 2¢. Regular IB readers won't be surprised that:

 "About one in 10 employers plan to drop health coverage when key provisions of the new health care law kick in"

I think that's lowballing it, and here's why:

First, the ridiculously onerous MLR requirements, which add nothing of value but do add lots of extra costs to group plans. Determining who's eligible, calculating employees' shares, and tracking down former employees who might have been covered for only a month sounds like a great reason to bail.

Second, those much-touted  small business tax credits (subsidies) were a complete bust; how bad is it when you can't even pay employers to offer group health plans?

Third, what about all those companies with, say 55 or 60 employees? They're over the mandate threshold, but not exactly in Fortune 500 territory. Letting go one or two folks might work (to get back below the threshold), but a dozen? Just doesn't sound viable. Smartest alternative? Dump the group and eat the fine.

Okay, maybe that's more like a quarter's worth.

Cavalcade of Risk #162: Come and get it!

Van Mayhall hosts this week's collection of interesting risk-related posts. Don't miss it.

And now, the Anti-MVNHS©

Yesterday, we reported on the sad fate awaiting seniors who trust the Much Vaunted National Health System© to keep them alive. As we noted, many are forced onto a lethal "pathway," denied fluid and meds.

In response to this growing scandal, "the anti-euthanasia charity Alert is distributing cards to patients to prevent this happening. The cards simply read: 'Please do not give me the Liverpool Care Pathway treatment without my informed consent or that of a relative.'"

The problem with the Pathway is that it is often "prescribed" without the permission (or knowledge) of the patient or his (or her) advocate. It's an attractive option - for the MVNHS©, natch - because it reduces costs with little or no effort. According to Dr Gillian Craig, a retired geriatrician and former vice-chairman of the Medical Ethics Alliance, "[i]f you are cynical about it, as I am, you can see it as a cost-cutting measure, if you don't want your beds to be filled with old people."

The cards act as garlic to vampires, hopefully fending off over-zealous providers from pulling the plug prematurely. Unfortunately, there doesn't seem to be any way to enforce them; that is, what's the consequence to the provider if that card is ignored? After all, it's the MVNHS© that's footing the bill (hey, it's free health care, right?).

Exchanges, Subsidies and intent

[Note: This post was co-written by Henry Stern and Bob Vineyard]

We've often lamented that it's too bad no one read the ObamaTax bill before they passed it, and with good reason. A fundamental problem is that the 2000+ pages of the bill, and the 13,000+ (so far!) pages of reg's promulgated to enforce it, keep handing up surprises. As we've pointed out, folks in states which opted for Federally-run Exchanges aren't eligible for the ObamaSubsidies, thereby driving their costs even higher.

Or are they?

Cato's Michael Cannon has been, perhaps, the most vocal in pointing out this discrepancy:

"This was no “drafting error.” During congressional consideration of the bill, its lead author, Sen. Max Baucus (D-MT), acknowledged that he intentionally and purposefully made that bailout conditional on states implementing their own Exchanges ... On May 24, the IRS finalized a regulation that says the law’s $800 billion [subsidy funding] will not be conditional on states creating Exchanges"

So what's the big deal?

The following appeared on a forum for insurance professionals in which Bob participates (it's about the ObamaSubsidies noted above):

"If you are ELIGIBLE to join any employer group plan where your portion of the premium is less than 9.5% of your income, then you won't get a subsidy. Next - drumroll please - this also holds true for dependents ... Due to the fact that the EMPLOYEE portion is less than 9.5% of the FAMILY income, the entire family is disqualified from a subsidy even if the employer pays nothing for dependent coverage."

In fact, and this is a real kick in the shins, it doesn't seem to matter whether you actually sign up for the group or not: maybe you found a better deal on the Exchange [ed: hey, it could happen!] and buy it, presuming that the net premium will be less because of the subsidy. Nope.

And it's no better if you do sign up for the group plan:

"Actually, the employer doesn't even have to pay a large portion in order for this to kick many families out of the subsidy ... a family of four must pay $729 in premium to equal 9.5% of their income if they make 400% of FPL. That means that any employer group health plan that charged that employee less than $729 for the EMPLOYEE-ONLY coverage would disqualify him and his dependents from receiving a subsidy. Nice."

And it only gets better worse:

MVNHS© "Expediting" Health Care Costs

One of the major problems facing nationalized health care systems is that, despite all promises to the contrary, they do very little (if anything) to reduce the cost of delivering care. There are, after all, only so many ways to do so; by far the most efficient (at least for the Much Vaunted National Health System©) is to simply deny it to "undeserving" folks:

"[S]ix doctors in the U.K. ... claim that the country has gone too far with a publicly funded program aimed at supporting terminally ill patients."

This word, "support" - I dunna think it means what you think it means:

"[T]he Liverpool Care Pathway program is being used to cut costs instead of as simply a more humane mode of care ... allows medical staff to withhold fluid and drugs in a patient’s final days"

Under the Brits' system, "support" means "death," which is an interesting (if macabre) spin on things. We've discussed 'end of life' care here at IB, and determined that there are no easy answers [ed: no kidding]. Although some folks (notably those who advocate it) applaud these "pathways" as both cost-effective and humane, they conveniently ignore the fact that the folks making the decision have a vested interest in the outcome:

"[T]he number of hospital deaths that implemented such end-of-life care measures doubled in the last two years."

That's a lot of dead grannies.

Blogroll Update

We're pleased as punch to add Jeff Root's interesting and helpful life insurance blog to our blogroll. Jeff's an independent life insurance agent, licensed in all 50 states(!), who specializes in high risk life insurance.  He works with consumers and agents alike, helping those with health issues obtain needed coverage at affordable rates.

Jeff performs thorough evaluations of a consumer's risk and submits that to underwriters with whom he's built lasting  relationships (as well as other general underwriting desks). He then screens the offers that come back and offers the best one(s). As Jeff says "it's something I wish most life insurance agents would do instead of taking shots in the dark."

Amen to that!

What makes his blog so interesting is that he shares these experiences in a consumer-friendly way. He believes that "there's a lack of helpful information for consumers with health issues on the web," and so he tries hard to fill that void. Do click through.

Cavalcade of Risk #162: Call for submissions

Van Mayhall hosts next week's Cavalcade of Risk - Entries are due by Monday (the 23rd).

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

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

Thanks!

Another Agent in the Clink

Regular readers may recall the sad story of Glen Neasham, who sold an annuity and went to jail. A bit further west, insurance agent Kathleen Kau has just been sentenced to 10 years in prison for "stealing more than $360,000 over five years from two longtime clients."

Most definitely not good customer service.

I'm a little unclear on how this worked, exactly: "Kau opened a post office box to receive mail for her victims after falsely informing Transamerica Life Insurance Co. that a fire destroyed [their] home ... Kau also asked the insurance company to mail a checkbook allowing her clients to tap their life insurance account savings because of the home loss."

I've never heard of a policy that has a checkbook feature as a living benefit. I've reached out to the reporter for clarification, and will update this post if/when I receive that.

This case obviously differs greatly from Mr Neasham's: according to the story, the agent clearly set out to defraud her clients victims. The prosecutor noted that she stopped doing so only "because there was no money left in the victims' accounts." Although TransAmerica has reimbursed the looted funds, one can only imagine how difficult it will be for the insureds to ever again trust a financial advisor.

No winners here.

Outstanding Carrier Trick [UPDATED]

[UPDATE: To participate, click here, then click "Like"]

MassMutual and Easter Seals are once again teaming up to increase awareness of the important decisions and financial challenges facing families with special needs members. Taking advantage of social media, they've launched a cool FaceBook video giving folks a glimpse into the every day lives of a mother with a special needs child. What's more, MassMutual will donate $5 to Easter Seals for every "Like" the video garners.

Courtney Denning offered us the opportunity to interview Joanne Gruskos, director of MassMutual’s SpecialCares program, and we (of course) jumped at the chance:

InsureBlog: How did you become interested in/involved with MM and the special needs area?

Joanne Gruskos: Well, I'm a longtime employee of MassMutual, primarily in sales and marketing. After we started the trust company in 2000, we began to grow our relationship with Easter Seals. We had a lot of interest from trust administrators from around the country, which we took as an opportunity to do something new.

This grew into a partnership with the American College, with which we developed an exclusive special needs curriculum and designation. This is slated to go industry-wide in the near future.

IB: Would you share some of the home history of the MM/ES partnership?

JG: Let's say you're a financial planner. and one of your clients is a family with children developing just fine, and one special needs child. Your task is now complicated by the fact that you have to account for the parents' lifetimes, plus the special needs child's lifetime. This can be quite challenging.

And it gets more difficult: you have to coordinate this with government and other programs, because if you screw up eligibility, you could cost the family a lot of money. Easter Seals is instrumental in helping us thread these needles.

IB: Is there a central directory/database of folks who've earned the spcial needs consultant designation?

JG: Yes, in fact we have an extensive website that's chock full of helpful information, including advisors, FAQ's, all kinds of resources to help navigate all the different programs and opportunities.

IB: What would be the one thing you'd most like our readers to know about MM/ES and special needs?

JG: We believe that "who matters to you matters to us." In fact, we've distilled this into a short but powerful video that helps people understand more of what we do and why we do it.

We're here to help you when you're ready to start planning. This is such a critical need that we really don't push product, we push education.

Thanks, Joanne, for your time and insights. For readers who are interested in learning more (and for agents interested in pursuing the special needs designation), there's a wealth of information at the MassMutual Special Needs website.

Oh, and that video Joanne mentioned above? Here you go:

Health Wonk Review: Smokin' hot edition

Julie Ferguson presents this week's sizzlin' round-up of wonky posts. As usual, there's  lots to choose from, so enjoy the A/C and the HWR.

Mandate, Shmandate?

Regular readers know that, come 2014, it'll be more economically efficient to drop their health insurance than to keep it, since plans will be guaranteed issue with no exclusions for pre-existing conditions. Since the ObamaTax is (at least initially) going to be a lot less than one's premium, why would one purchase insurance before a claim?

Now you may be thinking: "But Henry, if I don't buy coverage I'm going to have to pay that tax or I'll be in hot water with the IRS."

Um, maybe not so much. Reason's Jacob Sullum makes the case:

"Even paying the penalty is effectively optional, because Congress ... barred the Internal Revenue Service from using its most effective tools — liens, forfeiture, and prosecution — to collect it... the IRS, confronted by uninsured taxpayers who refuse to pay the penalty, must instead resort to "scary letters and threats to withhold tax refunds."

Hmm, scary letters? I can handle that. As I think most people could.

The problem here is that Mr Sullum's just not thinking this through. If millions (or tens of millions) of Americans "opt out" and also refuse to pay the penalty tax, what's left of the system falls apart. For the Obamastration, this is a feature, not a bug, because it paves the way for what they really want.

[Hat Tip: FoIB Holly R]

MVNHS© circling...

Ah, the Much Vaunted National Health Service©:

"Thousands of over-75s 'are being denied statins by GPs' that could prevent heart attacks and strokes ... Researchers believe that GPs are reluctant to prescribe such medication for the elderly as they are worried about the possible side-effects." [emphasis added]

Researchers speculate? Who cares?! What do the doc's themselves offer by way of explanation? Well, it may soon become illegal for British physicians to refuse treatment to elderly folks, which is nice.

In theory.

The reality is a bit different, though:

"A map produced by The Roy Castle Lung Cancer Foundation, using the latest NHS data, shows that in some areas patients are twice as likely to be offered surgery."

This in response to claims that Brits with lung cancer face an uphill battle to receive treatment. In point of fact, MVNHS© results in this area are abysmal, revealing that "only a third of hospital trusts met its 80 per cent target of referrals ... The map shows big variations in two affluent areas of southern England."

But, but, but ... national health care schemes are the most fair, offering equal treatment to all. Yes, but some demographics are more equal than others, wink wink, nudge nudge.

Don't just take our word for it, though; here's an actual victim patient:

"I had no idea then that a patient had died from thirst. My fear of the place was born from my own bitter experiences ... Almost everyone I know locally has a story to tell about its services falling short ... After a four-hour wait, a female doctor looked at my weeping skin and said: ‘Dermatology is not an emergency at weekends.’

Luckily for Ms Kite, the "free" system isn't the only game in town. Those with dollars pounds to spare can opt for "a  private hospital where, for £100, a doctor diagnosed a nasty form of eczema and put me on steroids."

Meanwhile, "regular" folks can look forward to sharing the fate of Kane Gorny, a 22 year who had just successfully fought brain cancer. Unfortunately, he "needed drugs to regulate his hormone levels ... during a hospital stay nurses forgot to give him his medication" and he promptly became the late Kane Gorny.

Once again underscoring the truly insidious nature of nationalized health care (aka ObamaTax).

Stormy Weather: Buckeye style

Got this in email:

"Due to the severe weather throughout Ohio on June 29, 2012, the Ohio Department of Insurance has issued a notice requesting that insurance companies give affected subscribers additional time to pay their insurance premiums."

We had some rip-roaring weather hear the end of last month; lots of folks lost power for days, even weeks. The "request" is really a bit more than "pretty please," though:

"The bulletin, 2012-02, states that insurance companies are to give those who have been directly impacted by the storms 60 days from the date the premium was due to pay their premiums, interest free ... This request to insurers derives from the Federal Emergency Declaration for the state"

Still, it's nice that those seriously affected by the storms and subsequent power loss get a little breathing room.

[Hat Tip: MMO]

Trendy Diabetics

So, received an interesting piece of mail yesterday from my primary life company: Current Trends in Diabetes and Underwriting Diabetic Applicants.

(And yes, I am geeky enough that I find this stuff fascinating)

Turns out, a lot of the hype we see and hear on TV and the radio isn't really hype, after all, The mailing quoted CDC studies which revealed that:

■ The number of Americans diagnosed with diabetes more than tripled from 1980 to 2010

■ In 2010, more than 200,000 Americans under age 20 had diabetes

■ Almost 80 million Americans are considered "pre-diabetic."

In a follow-up conversation with my underwriter, I was told that this carrier alone (hardly one of the biggest names) receives over 300 apps a year on folks who didn't even know they were diabetic.

Yikes!

Ironically Sensible

Political Calculation's "Ironman" has a VERY interesting question regarding the mandate ObamaTax and whether (come 2014) one should buy coverage or roll the dice:

"Does it make more financial sense for you to pay for health insurance or to pay the ObamaCare mandate tax instead?"

The premise is that, at least initially, the tax is going to be much less than the premium for most people, so why bother buying insurance until one actually needs it?

What makes this such an outstanding post is that he quantifies the problem, and offers readers a tool to calculate their decision.

Very cool.

Promising Alzheimer's News

The results of testing of three new drugs may give hope to those with Alzheimer's (or those with a family member suffering the dread condition):

"Results are due within a month or so from key studies of two drugs that aim to clear the sticky plaque gumming up patients' brains.

A pivotal study of a third drug will end later this year, and results from a small, early test of it will be reported next week"

Namenda and Aricept (the two current "leaders") really just ease symptoms, but aren't considered "cures." What's remarkable about these new options is that they're not really "drugs" in the accepted sense, but "anti-bodies." Since we don't really know what causes Alzheimer's, it's something of a gamble, but the payoff could be huge: "if brain imaging or spinal fluid tests show the drugs are hitting their target, 'they will be regarded as successes ... because that would let you know you had a drug that worked."

Time will tell, of course.

Wednesday afternoon at the movies

A bit simplistic, but gets the job done:

Promises, Promises

As in broken promises:

"Nothing in the law ensures that people happy with their policies now can keep them."

That means, of course, folks with consumer-centric Heath Savings Account (HSA) plans are outta luck. And folks with higher deductible co-pay plans are, too.

But it's not just our health insurance that's circling the drain; as we've long maintained here at IB, health insurance is not health care. To drive that point home, let's hear from a surgeon who's "worked in a government-run socialized medical care system, and [seen] the waste and inefficiency:"

"The longer people worked in that system, the less work they wanted to do, because the more you wanted to do, the more they dumped on you.  So after a while you stop doing it, because they're not paying you to do more ... Because nobody wanted to work, it would take an hour to turn over the surgical room.  In my private practice now, it takes ten minutes."

So, say goodbye to 10 minutes and hello to 10 hours.

But it's not just health insurance and health care that are under the ObamaTax gun:

"Income inequality appears to be growing in the United States.  And [ the ObamaTax) will dramatically exacerbate it."

Says whom?

Says Merrill Matthews, resident scholar with the Institute for Policy Innovation in Texas. Writing at Forbes, Mr Matthews lays out his case with deadly precision, including numbers form the Census and the Social Security Advisory Board. As noted above, HSA's and higher deductible co-pay plans are soon to be verboten, forcing folks to purchase more expensive policies. Since these premiums will necvessarily eat up a larger proportion of their income, the divide between rich and not-so-rich will be exacerbated.

Just another broken promise, though.

Cavalcade of Risk #161: Summer weight edition

David Williams presents this week's cool round-up of risk-related posts, including rugby, robots and rebates.

BTW: We're scheduling Fall Cav's - just drop us a line to claim your slot.

How much is that ObamaTax in the window?

Apologies in advance for the math, but it's important to understand that almost everything we were told about "PPACA" was a lie: insurance will be more expensive and harder to get, people will be denied care, and your taxes will go up.

A lot:

•The penalty/tax will be phased in from 2014 to 2016
•The minimum penalty/tax per person will start at $95 in 2014 (and then increase through 2016)
•The $695 per-person penalty [beginning in 2016] is only for those who make between $9,500 and ~$37,000 per year. If you make less than ~$9.500, you’re exempt. If you make more than ~$37,000, your penalty [will be MUCH greater]
•The penalty is 2.5% of any household income above the level at which you are required to file a tax return. That level is currently $9,500 per person and $19,000 per couple. The penalty on any income above that is 2.5%. So the penalty can get expensive quickly if you [have a job]

But that's just the tip of the (proverbial) iceberg. Take a look at the penalty tax structure:

•Less than $9,500 income = $0
•$9,500 – $37,000 income = $695
•$50,000 income = $1,000
•$75,000 income = $1,600
•$100,000 income = $2,250
•$125,000 income = $2,900
•$150,000 income = $3,500
•$175,000 income = $4,100
•$200,000 income = $4,700

Notice anything interesting? Yup: this is a highly regressive tax scheme. In fact, over 75% of it will be borne by folks earning $120,000 or less, hardly the upper tier. So not only is this the largest such tax in history, but it's aimed squarely at what used to be called the "middle class," but which now sports a new moniker:

Peons.

There's more at the link - read it and weep.

[Hat Tip: Ace of Spades]

Interesting Paycheck Insurance Trends

"Paycheck insurance" (aka Disability Income insurance) replaces a chunk of one's paycheck if it's impacted by illness or injury. It's one of the two most complicated products we offer (the other being LTCi). Offered in both individual and group "flavors," it's pretty customizable.

MassMutual is one of the few top-shelf DI carriers still slugging away in the individual market, mostly to white- (and some grey-) collar professions. Recently, they sent out a chart identifying "policy design trends" which I found interesting. Here's a sample:

■ Over 80% of these plans are issued with a 90 day waiting period. That is, one must be disabled for three months before the checks start rolling in. This has long been the "sweet spot;" by contrast, less than 15% were issued with a 6 month wait.

■ Nearly two thirds of MM's insureds chose the "To Age 65" benefit period. This means that, once they've satisfied the waiting period, benefits would be payable to "traditional" retirement age (as long as one is still disabled, of course). About a fifth of their clients opted for an additional two year extension (to age 67).

■ Almost 80% of their policies included the "extended partial disability" rider. Also commonly referred to as "residual," this benefit looks to see if one's wallet remains disabled even if one's body has healed.

■ About half also chose a "catastrophic" benefit rider, which mimics Long Term Care insurance thresholds (eg "activities of daily living") to determine benefit eligibility.

■ I was surprised that only about half of their clients added a Cost of Living Rider, which can help as a hedge against inflation. This is most likely a result of the sluggish economy over the past few years.

It's estimated that two-thirds of folks in the private sector lack long term disability insurance. Are you one of them?

[Hat Tip: MassMutual's Harold K]

How does CBO score it...

We actually know CBO only scores what they are told to score meaning their projections will never be accurate. Here is a good example:

"Overpayments are a rampant problem in the unemployment insurance system. The federal government and states overpaid an estimated $14 billion in benefits in fiscal 2011, or roughly 11% of all the jobless benefits paid out, according to reports from the U.S. Labor Department."

If actual subsidies are projected to be $681 billion what will the real world amount be when you add in fraud, gaming the system, and government incompetence? 

At 11% that is an extra $75 Billion.

We get mail!

Alert reader Elliott S (no, not that Elliot S) sends us this item:

"Study: Women With Bigger Breasts More Likely To Get Breast Cancer"

According to the article, there's now evidence of a genetic link between breast size and incidence of breast cancer. As reader Elliott observes:

"For a given probability of cellular mutation, a larger sample size has more mutated cells."

He then makes an interesting correlation:

"Translation: For a given marginal tax rate, high income individuals pay more tax dollars."

Which prompts him to wonder:

"Should insurance companies/Obamacare encourage breast reduction procedures to reduce future cancer treatment costs?"

Well?

Largest Tax increase ever...counter, counter

The right claimed ObamaCare is now the largest tax increase ever...

The left was aghast at such a claim(their long history of being anti-tax being expunged and all) and accused them of lying...

The Loud Talker did a great job of presenting all the perspectives and letting you decide for yourself.  (If only we had some reliable institution that would do this for everything, gather the facts, present them in an unbiased manner and let us think for ourselves. If only.....)

Yes there is an argument that % GDP or $ per citizen are more accurate measures but that doesn't change the fact the claim is factually true and deny that accurate context is far more misleading. Personally being only the 5th largest tax increase instead of the largest isn't really a victory I would fight for.

Read the full article to see why controlling the House and Senate should be our number one priority.

Incentives and Economist are fallible?

This short story was on a rerun on Freakonomics;

The quick version is an economist and his wife are trying to potty train their three year old. The Economist uses M&Ms as an incentive for her to use the potty. A few days later she can control her bladder to maximize how many bags of M&Ms she can get in a day.

A three year old getting over for a couple extra bags of candy is funny.

When we are talking about 1 Trillion of tax payor dollars; not so funny any more.

Subsidies                                         $681,000,000,000
Small Business Tax Credits            $021,000,000,000
Uninsured Penalties                        $045,000,000,000
Employer Penalties                         $096,000,000,000
Cadillac Tax                                    $079,000,000,000


Total                                                $922,000,000,000

300,000,000 million Americans have a one trillion dollar incentive to outsmart a group of economist who aren't half as smart as they believe they are. It is beyond naive to think they wont figure out how to get far more then 681 billion in subsidies, every government program to date proves they can and do. Further every tax ever implemented makes it clear they will never pay the full 241 billion in expected taxes.

Cost go up, revenue goes down and this projected 1.083 Trillion increase to our deficit is now a 2-3 trillion dollar increase to our deficit.

The opening to the clip sums up the situation perfectly.

And speaking of waiting: Oy, Canada!

"At some point in time, every Canadian will be placed on a medical waitlist."

Says whom?

Says the folks who actually market "wait list" insurance to our Neighbors to the North. And they should know, since they actually live it, literally putting their money where their mouth is.

But wait, health insurance in Canada is free!

Indeed, and worth every penny (or is that loonie?).

The truth is, some lucky Canadians can skip the lines and head for the border; those left behind face often excruciatingly long wait times for treatment. Which is where the clever folks at Acure [ed: get it? "A cure"] come in:

"Medical Access Insurance provides Canadians with expedited access to specialist consultation, diagnostics and surgery for over 135 treatments and conditions. Medical treatment for covered conditions will be provided in weeks – not months or years."

One wonders about franchise opportunities as ObamaTax comes to fruition.

Waiting on the Forgetful MVNHS©

The Much Vaunted National Health Service© (the Brits' version of ObamaTax), has developed a unique and, one supposes, highly effective means for enforcing its Death Panels:

"THOUSANDS of dementia sufferers are being abandoned by the [MVNHS©], with shocking variations in the time it takes to get a diagnosis and support ... some patients are not informed for at least five years that they have the disease, meaning treatments that are available are not as effective."

Really, what a great idea! Folks with dementia are unlikely to complain about care they haven't received; after all, who'd believe them?

And by making seniors wait until it's too late for most med's to be effective, the "service" saves money on costly treatments. Of course, this is what we here in the 'States have to look forward to under ObamaTax.

And speaking of waiting:

"Tens of thousands of patients who face having to wait more than 18 weeks for [MVNHS©] treatment will be offered a bed in a private hospital."

With just shy of 150,000 Brits waiting at least 18 weeks for treatment, that's a pretty gutsy bet.

And here's the truly scary part:

"In the last year the NHS has reduced the number of people waiting longer than 18 weeks for treatment to a record low."

Almost 150,000 folks waiting over 4 months for medical treatment is a low??

Yikes!

Sure glad that can't happen here.

Wait, what?

Cavalcade of Risk #161: Call for submissions

David Williams hosts next week's Cavalcade of Risk - Entries are due by Monday (the 9th).

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

You'll need to provide:

■ Your post's url and title
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PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

Thanks!

A proposed Revolution

For years providers and pharmaceutical companies have been gouging employers and their health plans.

ObamaCare is a clear indication the government has zero interest in addressing the real problem, cost of healthcare, and more interest in social engineering and getting their hands on trillions more of our dollars.

It is past time for employers to say they have had enough and to take control of the situation. Here is an opportunity for the brightest minds in America, business owners not politicians, journalist and pseudo soft scientist,  to solve this problem.

I propose we form an American Association of Self Funded Plans. By joining together we will have the unity to stand up to providers and government with a very simple but proven platform. All members upon joining pledge to do the following;

On January 1, 2014 our plans will reimburse Medicare +/- X% or Cost Plus X%.

On January 1, 2014 our Drug formulary will consist solely of generic medications unless there is no therapeutic generic for that condition in which case a brand name will be covered.

Hospitals: you have 18 months to get your affairs in order at which time you will be seeing a substantial reduction in revenue.

Governments: you have 18 months to make sure your consumer protection laws are sufficient to protect consumers from price gouging providers.

Pharmaceutical companies: we will only reimburse the generic price of prescriptions, if a member wants a brand name drug you need to convince them of the added value. Plans are no longer going to pay 5 to 10 times as much for a tweak in time release or combination of two old pills. If a member sees value in these one offs they can pay the difference.

From our experience implementing these and similar changes we would expect participating employers to see an immediate 20-30% reduction in insurance cost. The system has been able to bully individual employers in the past, threats of collection letters to members, high price attorneys, etc. If tens of thousands of employers representing millions of members join together and do it at once, those tools of extortion will not be nearly as effective.

Together this is a problem business can easily solve.

The Power of Taxing Authority

"WASHINGTON — When the companies that supply motor fuel close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law.

 But there was none to be had. Outside a handful of laboratories and workshops, the ingredient, cellulosic biofuel, does not exist"

Not a great position to be in, use a product that doesn't exist or the government will fine you. Healthcare is about to experience a similar problem, offer affordable health insurance or they will fine you.

"a high-cost health plan is defined as costing more than $10,200 for an individual or $27,500 for a family, including worker and employer contributions to flexible spending or health savings accounts."

Community rating and guarantee issue coupled with all the new benefits like "free" preventive care and unlimited lifetime maximums it is easy to see premiums reaching these points. The real kick in the teeth is having your hands tied behind your back to prevent from reaching this point. Historically employers could control cost the following ways;

1. Charge employees more to be on the plan. No longer an option, if you exceed the employees' affordable percent of income you pay a penalty.
2. Increase deductibles or co-pays; passing more out of pocket cost onto the employees. Government has set low OOP limits that can not be exceeded.
3. Cap annual or lifetime spending. No longer allowed.  

How is a plan to stay under the $10,000 limit if all management of the plan has been taken away from them? We see the government clearly has no problem penalizing business for failing to do the impossible. It's almost like they don't want businesses offering insurance.....

The only solution I have come up with is to unilaterally pay providers less, not sure if this will comply with the OOP regulations but plans might need to go to a scheduled reimbursement. They will pay X regardless of what the hospital is willing to accept and the member is liable for either finding a provider that will accept it or paying the difference.

Ignore those practicing the soft sciences

Health Care reform is quickly starting to look like global warming with all the supposedly educated individuals talking way above their knowledge base. An Insurance broker that experiences something every day for 20 years is not reliable, an economist with zero experience writing a paper that makes no logical sense on the other hand is credible. It would be amusing if there wasn't millions of people reading this crap and making decisions based on it. Here is a recent example of a fallacy I see quit a bit;

"You’re right. There is no evidence one way or the other that Obamacare caused his premium to go up 30%. So don’t go there.

You can say that your premium went up. You can say Obamacare exists. There’s no causal evidence for the latter causing the former (especially since most of the regulations haven’t taken effect yet, and insurance went up pretty much every year WITHOUT Obamacare), so don’t say there is."

A slightly more honest version of this argument is that, according to academics, ObamaCare has only increased the cost of insurance a couple percent. That may or may not be true but that is little comfort to someone's who actual premium did go up 30%. If I have to pay 30% more at renewal I don't take much comfort in knowing everyone else only had to pay a couple percent higher rates.

Just a few examples of substantial rate increases I have personally seen;

1. Student plans that doubled in rates due to lifetime maximum increases. 
2. Limited/Mini Med plans that went away or had substantial rate increases to comply with limits on maximums.
3. Small group plans that picked up sick dependents under the age of 26, this can easily increase your rates 10-40% depending how close to the rate cap they already were. 
4. Self funded groups that increased the maximum annual reimbursement on their specific policies, I have seen increases from 3-13% to go to an unlimited annual reimbursement. 

 I am sure other agents could add considerably more. The point is; it is a fact ObamaCare has increased rates over 100% for some groups/individuals and I know first hand of groups that stopped offering benefits due to the increase directly caused by ObamaCare. This doesn't include the individual market for kids it wiped out. The propogandist on the left would prefer you now know this. Which is ironic considering all of the sob stories they ran for years prior to reform about those that couldn't get or lost coverage.

Independence Day 2012

Nobody does it better:

OK boys and girls: What is macaroni?

I'm SO glad you asked.

'Macaroni products are the class of food each of which is prepared by drying formed units of dough made from semolina, durum flour, farina, flour, or any combination of two or more of these, with water and with or without one or more of the optional ingredients specified in paragraphs (a) (1) to (6), inclusive, of this section.' 

At first I laughed.  But a bad case of seriousness set as it dawned on me this is not a joke.

It's actually part of the United States Code of Federal Regulations (21 CFR 139.110 - Macaroni Products).  This means federal regulators actually drafted, debated, and finalized this Reg; it means there is some federal law, somewhere, that the regulators cite as the "authority" to issue this regulation in the first place; and of course it means that the time required for the bureaucracy to perfect this regulatory gem was paid for with our taxes.

OK, admiral, but why is this relevant here?

Only to suggest that we will experience the same kind of mind-boggling and intrusive minutiae when the federales have written the regs under the Affordable Care Act.  

But the PPACA regs will have a truly serious impact on us all.  They will define the conditions under which we as citizens will be permitted to seek medical care, and will direct our physicians in the types of medical care we will be permitted to actually, you know, receive.   Until the end of time.

I can barely contain my enthusiasm. 

Stop asking questions and pay your tax...

...or penalty. The left seems to have gotten their panties twisted being accused of the largest tax increase in history. I had a short but spirited debate with Austin Frakt here.

Austin referenced Kevin Drum who referenced Josh Marshall who just made the claim with no reference to who he is arguing with, moment of silence for the poor straw-men, they are the real victims in all this. I linked to Forbes which clearly included the cost of premium:

"And if both the premium and the penalty are considered a tax, the mandate becomes the largest tax increase in U.S. history. And that doesn’t include all of the other taxes imposed by the legislation."

When Frakt/Drum/Marshall dismiss this claim they leave out the part which specifically includes premiums. When challenged on this Frakt says to look it up, so I did, third from the top was Rush; one of the early and widely heard places so lets see what they say:

"OBAMA: No, no. B-b-but George y-y-y-you can't just make up that language and decide that that's called a tax increase.

STEPHANOPOULOS: I don't think I'm making it up. Merriam-Webster Dictionary: "Tax: A charge, usually of money, imposed by authority --

OBAMA: (snickering)

STEPHANOPOULOS: -- on persons or property for public purposes.

OBAMA: George, the fact that you looked up Miriam's dictionary (sic), the definition of tax increase indicates to me that you're stretching a little bit right now. Otherwise you wouldn'ta gone to the dictionary to check on the definition! I mean --"

Maybe the rest of us non-ivy educated normal folks need to look words up now and then but we know if it cost us like a tax, is forced on us by government like a tax,  and the IRS is making sure we pay it, then its a tax.

Everyone needs to pay close attention to the level of distortion coming from the White House and those that support this mess. If the bill is so bad you need to lie this blatantly to cover for it we have problems.