Friday, August 29, 2014

Insuring Ferguson: Update/Correction

Earlier this week, we posted on a couple interesting P&C-related items, one of which was the "civil unrest" in Ferguson, MO (there's a reason for the scare-quotes, we'll get to that directly). In that post, I reported - incorrectly - that riot-related claims would not be covered under standard commercial policies.

Ted Kinney, Director of Education for the Alabama Independent Agents association, graciously emailed me with a correction:

"Ferguson is probably more of a “civil commotion” than a riot.  Most standard policies do cover riot & civil commotion.  If  a covered peril damages property on the policy’s described premises, the business interruption coverage (if there is coverage) would also be triggered."

He went on the explain that "riot and civil commotion are not defined in commercial property insurance policies and forms (or homeowners forms, for that matter). Instead, major court decisions ... provide the guidelines, often based on dictionary definitions or statutes."

So there you have it: the damages, and the concomitant loss of business, are most likely covered - assuming, of course, that the store owners actually had policies in force.

Thanks, Ted!

Cavalcade of Risk #216: Call for submissions

Tim Dodge makes his CavRisk hosting debut with next week's edition. Entries are due by Monday (the 1st).

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). And please only submit if you are willing to link back to the carnival if your submission is accepted.

We need hosts for Fall Cav's - Please drop us a line to claim yours. It's easy, fun and a nice traffic bump. Thank you!

Thursday, August 28, 2014 Security Chief Was Distracted

It's no secret that the Obamacare website is not only dysfunctional, but also has major security
flaws. There may be a good reason for the latter problems. The IT chief of security apparently had his, uh, hands full with other distractions.
Timothy DeFoggi, who had been the lead IT specialist at the Department of Health and Human Services, was found guilty Tuesday for accessing and viewing child porn, and discussing his fantasies — which included the rape and murder of children — on message boards.
[He] was found guilty of engaging in a child exploitation enterprise, conspiracy to advertise and distribute child pornography and accessing a computer with intent to view child pornography.
Apparently he was dallying when he should have been dillying.
In May, the Department of Homeland Security announced the major bust of a childhood pornography ring leading to the arrest of 71 individuals, in part due to the monitoring of elicit activities on a web group with over 3,000 members.
The offenders came from all walks of life, including “two police officers, a Little League coach, and a mother.”
And the chief of security for the Obamacare web site ............

Obamacare SNAFU - The Gift That Keeps On Giving

It all started with a failed website (that STILL isn't fixed), followed by lack of full disclosure about
just how bad the new Obamacare plans were, then you had doctors that refused to accept patients with Obamacare, applications that were never properly submitted to carriers, premiums that were never paid ......... the list goes on.

As bad as that is, how would you feel if you worked very hard for 5 months, investing not only your time but money, only to later discover you would not be paid for your efforts.

Six brokers filed a lawsuit Tuesday in Clark County District Court, seeking class-action status for their claim that the Silver State Health Insurance Exchange and its website contractor, Xerox, have failed to pay commissions on coverage they sold through the exchange’s Nevada Health Link website.
 The brokers are Patrick Casale, Mary Elsberry, Dwight Mazzone and Jeremy Shugarman of Clark County, and Grace Butler and Andrew Perwein of Washoe County.
Matt Callister, an attorney representing the brokers, said the six are collectively owed “a very significant amount well in excess of $200,000.”
Applicants that never received their policies, who can't find participating providers, and can't get their claims paid have company.
Like a bad penny, Obamacare problems just won't go away.
Meanwhile, out on the golf course ................

MVNHS© Rocket (but not Cancer) Surgeons

First, the good news: 66 year old Roger Mollison is cancer free.

That's good news because the folks who run the Much Vaunted National Health Service© don't exactly have a great track record when it comes to cancer care. The not-so-great news is that, despite their "best" efforts, they couldn't cure Mr Mollison of cancer.

Mostly because he didn't have cancer in the first place:

"Doctors at Ninewells Hospital in Dundee told Mollison to prepare for the final nine months of his life after diagnostic testing revealed a deadly case of mesothelioma"

Imagine the sheer horror of receiving such a diagnosis, and then undergoing years of debilitating (and expensive) chemo, hoping that it will buy at least some time.

And then learning that, contra the original diagnosis, he didn't have the dread disease after all. And just how did he learn this?

Sadly, you probably won't be surprised:

"It wasn’t until he received a second opinion in accord with a claim he was filing ... that he learned that he was not suffering from mesothelioma but rather a non-life-threatening asbestos-related illness."

Where's Emily Litella when you need her?

Wednesday, August 27, 2014

This Obamacare Winner Will Save $78,420!

Thanks to President Obama's promise of keeping their current plan my client is seeing his premiums increase by 13% for the upcoming plan year. Annual premiums for this company's 15 employees are going from $129,684 to $146,508.

They offer a very rich plan design (Platinumesque) and until October of 2010 they paid 100% of the premiums. Back then the company was spending $100,164. With a tough economy the owner made a difficult but necessary decision: employees would have to pay a portion of their premiums. They were asked to contribute 10% of the premium. Now they pay 15% of the premium.

You might be asking yourself, how is this employer an Obamacare winner? How are his employees winning? Allow me to explain.

In Ohio insurers are allowed to offer an "Extended Transition to Affordable Care Act-Compliant Policies." This is a DELAY in the law extended by CMS (after Obama promised you could) allowing people and small employers to keep their plans until they renew in 2016. Then this employer will be forced into community rated products with strict benefit mandates that must fall within narrow parameters at the renewal in October of 2016.

Why didn't we move them into an Obamacare compliant plan? They could have. In fact we did our diligence exploring various insurers in the market. There were several options to choose from. They would have had a different plan design but it would have been very similar to the actuarial value of their current plan. But doing that would have cost the company $224,928.

13% increases are unacceptable by Obamacare standards. For this company it will cost them $16,824 more this year than last year. That is a tough pill to swallow. But, words can't describe the pain from the $95,244 suppository had the company been forced into an Obamacare compliant plan - which is exactly what is going to happen in 2016.

Medical ID Theft Revisited

Back in February, we again sounded the alarm about Medical Identity Theft:

"Most identity theft in the United States is medical-related ... In 2012 alone, medical identity theft increased by nearly 25 percent, affecting 1.85 million Americans"

And things haven't really improved since then.

So what's the big draw for hackers looking to steal your records?

How about $50 a pop? Multiply that over thousands - or tens of thousands - of unsuspecting victims, and you've got quite the successful business model.

On the other hand, there may are some common sense ways to protect yourself from this risk (or at least mitigate it). A security consultant writing at LinkedIn offers some pointers for healthcare providers - might be a good idea to see if yours is taking the threat seriously:

■ Encryption. This seems pretty obvious, but it's also a pain (and we're all familiar with the ubiquitous sticky notes hanging from monitors).

■ Biometrics. This is even better, but of course it's also more expensive. On the other hand, higher demand may force prices down, so this may be the future.

Go read the whole thing - it's a quick read, and pretty informative.

And Now a Word From Our Sponsor

Did you buy one of those brand spanking new Obamacare plans? If you did, you may get an email from (Carrier) that reads something like this:

Immediate attention is needed to keep your health coverage. Take action before Sept. 5, 2014.

Carrier wants to help you keep your current insurance coverage and maintain your current monthly payment amount.

IMPORTANT: The federal government-sponsored Health Insurance Marketplace (also known as the “Exchange”) has been attempting to reach you. At the request of the federal government, we are reaching out to you because you are at risk of losing your current Carrier coverage or any financial assistance you may currently be receiving, also known as Advance Premium Tax Credit (APTC). 

The deadline to take action is September 5, 2014.

What you need to know:

• The federal government-sponsored Health Insurance Marketplace needs more information to ensure you can keep your current coverage. They have been attempting to reach you for one of two reasons: 
• The marketplace would like you to provide proof of your yearly income for 2014 for everyone who was on your tax return, if they had income.
• The marketplace would like you to provide proof that you are a U.S. citizen, U.S. national, or have an eligible immigration status.

What do you need to do immediately?

• To determine which documents the marketplace is requesting, please contact the Marketplace at 1-800-318-2596. There are marketplace experts ready to answer your call 24 hours a day, seven days a week.
• For either situation, you need to provide a copy of the documents the marketplace is requesting. You can do so by adding copies to your “My Account” online at (this is the fastest way to get your documents processed) OR mailing the documents to:
Health Insurance Marketplace
Attn: Supporting Documentation
465 Industrial Blvd.
London, KY 40750

*If you have any issues adding copies to your “My Account” please contact the marketplace at 1-800-318-2596. There are marketplace experts ready to answer your call 24 hours a day, seven days a week.
*If you have already provided this information to the marketplace and/or you have heard from the marketplace that they have received the additional information, please disregard this note.

What will happen if the additional documents are not received by the federal government-sponsored Health Insurance Marketplace?

• The marketplace will terminate your Carrier coverage or no longer provide you with financial assistance. When the marketplace does this, they will notify Carrier. Carrier will then follow instructions from the marketplace that requires us to send you a notification of changes with your coverage. These changes will include either a termination of coverage OR a change to your monthly payment.

Again, Carrier wants to help you keep your current coverage and maintain your current monthly payments. Please provide the requested documentation to the marketplace no later than September 5, 2014. If you have questions, contact the marketplace at 1-800-318-2596. There are marketplace experts ready to answer your call 24 hours a day, seven days a week.

Thank you again for being a Carrier member. 

We look forward to continue being your partner in health.
Protecting your privacy is important to us. To learn more about our privacy policies, view our Internet Privacy Statement and our Privacy Practices.
Please visit for additional information.

Any questions?

Smoke them if you have them.

Tuesday, August 26, 2014

IRS Form 1095-A

Obamacare fans, here is what you have been waiting for.

If you bought an Obamacare plan through and received a premium subsidy or APTC, you will need to file form 1095-A with your taxes.

Here is your link to a DRAFT of 1095-A

But wait, there's more.

You (and your tax adviser) might also be interested in form 8962

And you thought this was going to be easy.

Who Do You Believe

According to CNN, the Inspector General is expected to release a report that claims there were no deaths due to excessive wait times or denied access to care at the Veterans Administration facilities.

Monday, August 25, 2014

(Sex) Ch-ch-changes

Well, it took some time, but the future is finally here:

"Then Payne, who had a wife and four children, realized she could no longer live as a man."

Wait, what?

Demonstrating the mother (er, father?) of all "pre-existing conditions," Ms Payne (and what a gloriously appropriate moniker) waited until her wife died of alcohol-related liver disease (gee, who could have seen that coming?) and then went shopping for a surgeon.

Thing is, this is expensive (if entirely elective) surgery, and she didn't think it was fair that she shoulder that burden alone. Her Blue Shield-issued ObamaPlan (and we taxpayers who foot some - maybe all - of the premiums) is now on the hook for some yet-to-be-determined chunk of change:

"She found an out-of-network doctor in Palo Alto who would do the surgery ... got a cashier’s check for nearly all her savings, $27,000, to pay the doctor, hoping her insurance plan would reimburse most of it."

You're welcome.

Her friend Jenny (Jerald?) hasn't been so fortunate: she also bought an ObamaPlan, but from the Volunteer State Exchange. Her doc was also out-of-network, and she had "no hope of reimbursement." Part of that is because her hormone regimen is only dispensed to women, and her ID still listed her as male (how cisgendered!). One supposes that that would be an easy fix (so to speak), but apparently not.

So of course she's moved to California, where she hopes to also glom onto a Covered California plan.

Wait, you didn't know that moving enabled you to buy a new plan?


On the other hand, they probably don't have to worry about the free birth control.

Two Timely P&C Notes

■ Now that things seem to have down a bit in Ferguson, it's worth noting that the clean-up from all the looting and rioting will take some time, but that it's unlikely any of the damage will be covered by business owners' insurance policies.

According to P&C Guru Teresa S, "riots are not covered, therefore anything resulting from a riot is not covered.  It usually goes back to the government.  Looting, I would say is not covered due to it being part of the rioting."

So of course, you and I will become the insurers.

■ Now that school's starting back up, lots of student athletes will also be warming up on and off the field. Some of them, though, will become injured, perhaps bad enough to effectively end their college sports career - and scholarships.

Never fear, though,  California-based EPIC Insurance Brokers is now marketing their Education Protector plan:

"[T]he first of its kind policy that provides funds for tuition reimbursement in the event a student athlete is injured between receiving a verbal offer for an athletic scholarship or grant and signing a Letter of Intent, which binds the athletic scholarship or grant."

Apparently, they've done their homework [ed: heh] and determined that over 126,000 student athletes are expected to receive some $2 billion in scholarship money. That's a lot of cash at risk.

Cool idea.

Friday, August 22, 2014

Has Medical Tourism Jumped the Shark?

Over the years, we've written many times about medical tourism: from folks traveling to the US for treatments to folks who found better options abroad.

But this, this boggles the mind:

"The number of foreigners traveling to Switzerland to commit assisted suicide doubled over a four-year period"

Europeans made up the bulks of their "customers," the article didn't mention how many Yankees participated.

Tax Form 1040(OY)

Let's suppose that, against all odds, you've successfully navigated the site and enrolled in an ObamaPlan. And let's further suppose that, against all odds again, you're deemed eligible for a subsidy.

Now - and bear with me here - let's suppose even further that you're gainfully employed and need to file your taxes. Piece of cake, right?


"Obamacare customers won’t be able to file their tax returns next year until the government sends them a form detailing their coverage and tax credits"

Well, we're all familiar with the prompt, efficient and accountable IRS, so no problem, right?


If you're due a refund, well then you're stuck: until you can attach those forms to your return, you're getting bupkis.

But that may be the least of it: what if you owe taxes? You can't complete the return without the form, so will you now owe penalties and interest, too?

And there's this: if you miscalculated (or just had a stroke of mid-year good luck) and end up making too much income, you're going to have to refund at least some of your subsidy back to Uncle Sugar. That's only fair, right?

Click here for a more detailed explication.

Carefree, or Free to Care?

Dr Rob Lamberts (whom we interviewed a few short years ago, when he dove into the concierge medicine pool) has a touching, sad but ultimately hopeful post on end of life care, and the compassion one can bring to the table:

"Thank you, sir, for letting me into your home.  Thank you for trusting me when you didn't want to trust a doctor.  Thank you for letting me help you stay at home and live out your last days as you wanted them to be."

Read the whole thing.

Thursday, August 21, 2014

What's Old is New: The AMA, Medicare and Value

Almost four years ago, we wrote about a little known committee, nestled deep in the bowels of the American Medical Association (AMA), that exercised outsized power over how much money doctors will receive in Medicare reimbursements:

Pretty cozy: the government feeds them, and they divvy up the loot. Nice gig (for them).

But how does that affect thee and me?

Well, it's actually not that complicated: Primary Care docs (representing about 30% of US physicians) are at the bottom of the food chain, even though they are critical frontline actors when it comes to assessing a problem and recommending alternatives. And by "alternatives," we increasingly mean "specialists." And how does that work?


"[T]he committee has ... skewed Medicare fees in favor of expensive specialists over ordinary general practitioners ... Because Medicare fees are the baseline for the rest of the pricing in the health care system, this has had a broad effect, contributing to a situation where primary care doctors are in general underpaid, underappreciated."

Now , we're not playing the Rich Doctor, Poor Doctor game here, but it's worth noting that the docs who are most involved in our initial care are the ones with the least time at the payment feeding-trough. Here's why: Medicare fees drive (to a significant extent) private insurers' reimbursement schedules. So when that Relative Value committee essentially sets Medicare's fees, they're also effectively setting Anthem's, and Aetna's and Humana's (to name a few). And since most (but not all) docs still accept insurance, the effect is magnified.

It's also worth remembering that the AMA itself represents less than 17% of all US physicians, yet wields this enormous power with little (if any) accountability or oversight. Food for thought.

Wednesday, August 20, 2014

Wednesday Potpourri

■ Craig Gottwals has the scoop on the latest Golden State efforts to come into line with the new group waiting period requirements:

"A year and a half ago, California decided that the 90-day waiting period limit imposed by PPACA ... was too long and cut that period to 60 days via a series of confusing state laws."

After driving benefits folks nuts trying to comply with conflicting federal and state requirements, the state's finally shelved their own ill-advised rule. Click on through for why this is so critical.

Speaking of small groups, the news on the alleged SHOP (small group marketplace) isn't promising for the folks in DC:

"[Secretary Burntwell] is allowing insurance commissioners in states that are part of the federally facilitated marketplace to opt out of SHOP’s employee-choice provision for 2015 if they determine that it would produce adverse selection. So far, 18 states were given permission to do so."

That's about half of the states with Fed-run Exchanges. Something about preference cascades?

And it's not just small businesses looking for group cover; entrepreneurs have long had to procure coverage on their own, something that's becoming easier said than done. FoIB Holly R tips us to this story of one such fledgeling businessman who left his previous employer to strike out on his own:

"I quickly discovered I would need to qualify for a “special enrollment period” to purchase a new plan at this time. Otherwise, it appeared, I would need to wait for open-enrollment season in November ... Please Note: If you enroll in COBRA you are not eligible for special enrollment until the next open enrollment period or until your COBRA maximum period expires."


Do you ever get the impression that the site was designed and implemented in (and for) Bizzaro World? You may not be too far off:

"Investigators at the U.S. Government Accountability Office (GAO) created 12 fake health insurance test applicants and, for now, at least, have gotten qualified health plan (QHP) coverage for 11 through the [ website]."

And that's the (ostensible) good guys; wonder what the Chinese hackers are up to....

Remember Fuller Brush and Avon folks? Well, they're no longer pushing cleaning and beauty supplies:

"[Some Navigators] can sell exchange plans and services door-to-door ... "

The new regs apply primarily to those working for the Fed-run Exchanges, but could also impact state-run ones, as well.

Remember, though, these are folks with no background checks or accountability, and minimal insurance training. But sure, let 'em in the house, they're (mostly) harmless.

Finally, Thanks to Bob, we'll leave you with this eye-opening video of Aetna Chairman Mark Bertolini discussing the major changes to our health care system. Bottom line: our new ObamaTax-based system is unaffordable (but you knew that):

Tuesday, August 19, 2014

Facebook for Physicians

Earlier this month, the Wall Street Journal reported that Wellpoint and Blue Shield of California are partnering to create a Health Information Exchange, or HIE.

An HIE is a federally-funded network designed to “allow patients’ records to be shared digitally among the providers caring for them.”

HIE’s already exist in several parts of the country.  The Journal article cites an HIE in Indiana in which more than 100 hospitals and 25,000 physicians participate.   There is an HIE in my state, Connecticut.

According to the article, the California HIE will - for example - ensure that physicians will have immediate access to patient information in emergencies [which suggests the database is not strictly limited to a patient’s own physicians after all] or ensure that a specialist could review past test results and avoid ordering duplicates.

In general, the theory behind an HIE predicts that when physicians have more complete and readily available patient information, duplication and patient risks decline, and patient outcomes improve.  This is a rational prediction based on experience; HIE’s simply bring better technology to bear.

The theory also appears to predict that more effective care will be less costly by much more than enough to offset “user fees” that the HIE charges to its participating providers.   HIE’s will test this theory.

And in theory I suppose, the HIE databases will be secure – which is not quite to say unhackable.  No doubt this will also be tested.

According to the Journal, the two California insurers “want hospitals, doctors and other insurers around the state to contribute their patients' information as well. In turn, they will be able to draw on records for their patients that were placed in the exchange by other participants.”   The Journal further explains what “contribute” means.  It means automatically posted - i.e.,  “Patients' records automatically will be included in the new California network if their health plans or health-care providers join”

However, individuals will be able to “opt out and block their information from being shared.“ [btw, I don’t recall being offered this opt-out in Connecticut].

Also, “Patients initially won't be able to see their own records but should get that ability later, the insurers said.”

So let’s review.  These California insurers and providers are bringing up a huge new hackable database of personal health information; the database will automatically contain the information they post for their members/patients; all physicians can readily access the database; but, initially at least, the members/patients won’t be able to see their own records.

Cool.  It’s Facebook for Physicians.

UPDATE [HGS]: FoIB David Williams has a related post discussing Patient Portals:

"They’re good for checking lab results, asking non-urgent clinical questions, renewing prescriptions, managing appointment schedules, patient education and paying bills."

Transparency redefined

We've long been fans of transparency in health care, both its delivery and its financing. That is, the ability of the consumer to pre-determine how much a given procedure or med may cost, in order to make an informed decision.

But transparency only works well when both parties participate: providers and insurers offering useful and informative tools (generally on-line) and consumers taking advantage of them.

But what happens when the biggest provider and financer of health care refuses to play?

Well, then, you get this:

"The White House has rejected a request to publicly disclose documents relating to the kinds of security software and computer systems behind the federal health care exchange website ... We concluded that releasing this information would potentially cause an unwarranted risk to consumers' private information"

Orwell called this "doublespeak," and it's an excellent example of the genre. We already know what a complete mess the various contractors have made of the Exchange's so-called "security." To add insult to injury, "Obama instructed federal agencies in 2009 to not keep information confidential "merely because public officials might be embarrassed by disclosure, because errors and failures might be revealed, or because of speculative or abstract fears."

Seems they weren't so abstract or speculative, after all.

Cavalcade of Risk #215 – Dog Days of Summer Edition is up

Paul Dzielinski makes his CavRisk debut (a day early, how's that for promptness!) with an excellent round-up of interesting posts, and his own helpful insights on each one.

Bravo, Paul!

Monday, August 18, 2014

It's Not Discrimination

Today must be the whiner day. Or perhaps a full moon. 

Or both.
More than 300 patient advocacy groups recently wrote Health and Human Services Secretary Sylvia Mathews Burwell to complain about some insurer tactics that "are highly discriminatory against patients with chronic health conditions and may ... violate the (law's) nondiscrimination provisions."
Yahoo News

Heads up.

If you are offered coverage there is no discrimination.
The advocates also say they are disappointed by how difficult it's proved for consumers to get a full picture of plans sold on the new insurance exchanges. Digging is often required to learn crucial details such as drugs covered, exact copayments and which doctors and hospitals are in the network.
Uh, the information is there. Qualified, experienced agents with years of health insurance can answer your questions.

But if you insist on working with a navigator or community organizer that is more comfortable asking if you want fries with that order, then you can expect misinformation.
Much of the concern is about coverage for prescription drugs. Also worrisome are the narrow networks of hospitals and doctors that insurers are using to keep premiums down. Healthy people generally shop for lower premiums, while people with health problems look for access to specialists and the best hospitals.
If you want more comprehensive coverage you must be prepared to pay more for your coverage.

You don't get a Mercedes for the price of a Pinto.
"Insurance companies are basically singling out certain conditions by placing some medications on high-cost tiers," said Hill. That "is pretty blatant discrimination in my mind."
No, it isn't discrimination.

It is a sound business practice.

Here. Look up the definition of discrimination. Let me help.

Do you complain at the grocery store because lobster costs more than tilapia?

If you want better information, deal with a professional.

If you want more comprehensive coverage, pay a higher premium.

Pretty simple.

T.R.A.G.I.C. is Back and Still Clueless

T.R.A.G.I.C. (Teachers Rally Against Georgia Insurance Choices) is in the news again, railing against the new SHBP (State Health Benefit Plan) choices. 

They whined earlier this year when they came out of the ether and realized the plan choices for 2014 which were FULLY EXPLAINED during open enrollment did not meet their expectations.

Perhaps a remedial reading class is in order.

The state completely revamped the 2014 plans and made RETROACTIVE changes to add doctor copay's. This only partially placated them.

They still whined.

Now the state of Georgia has released pro forma information on 2015 plans. Instead of one carrier (Blue Cross) state employees will have 3 choices with the addition of UHC and Kaiser.
“They’ve brought back options –- that’s a huge win,’’ Cline, founder of TRAGIC, told GHN on Monday. “But if you have choices that are unaffordable, there’s no benefit.”
Cline added, “The deductibles and out-of-pocket maximum are still way out of line with the salaries of SHBP members, and out of line with comparable plans offered under the University System of Georgia.”
Georgia Health News

Well ...........

Teachers and other state employees are not obligated or compelled to take the SHBP coverage. They can go into the market place and pick an individual or family plan that meets their needs and budget.

They can also seek employment elsewhere.

And the renewed complaint about SHBP coverage being less comprehensive that plans offered to UGA employees? The University does not participate in the SHBP. They have their own plan.

School systems are free to do the same. Go find their own plan rather than listening to whiny teachers.
Last week, the Department of Community Health said that not only would those staying in the Blue Cross and Blue Shield HRA not see any increase in premiums for next year’s plan, but that members who had Gold plans and were looking to switch would see reduced premiums.
But Cline said Monday that she is most concerned about the difference in cost between the Blue Cross HMO and the one run by United – more than $140 a month. Many members are unhappy with their current Blue Cross plan, she said.

Can't win here.

The 2014 and 2015 plans are designed comply with Obamacare rules.

You get lower premiums (from UHC) but want to keep your Blue plan.


This isn't Burger King.

You can't have it your way.

Stupid Congressman Tricks

Democratic member of the House Ron Barber is donating his Obamacare subsidy to charity! What a great act of kindness.

Under PPACA, all members of Congress are required to purchase their insurance through the DC Health Link. Unlike you and I, these congresscritters are allowed to receive their traditional employer contribution - not a subsidy - from the Federal Government under the FEHB Plan. This contribution, which could exceed $900 a month, comes from our tax dollars. It is also tax deductible to Mr. Barber.

To recap: taxpayers provide what could amount to $900+ per month for Mr. Barber and his spouse for health insurance that is tax deductible. Mr. Barber then goes on to donate this amount, which he also will deduct from his taxes, to charity. Yes, he is taking your money and giving it to charity and using it to his advantage for tax purposes.

Oh, and I almost forgot, Mr. Barber is 68 years old. Anyone see what I just did there?

Be careful what you wish for...

The other day, Mike posted about the efficiency of Britain's Much Vaunted National Health System©, and made this observation:

"[T]he UK has for years led the US in terms of restrictions on its citizens’ access to specialized medical services and newer technologies.  In many respects, such restrictions make sense where overutilization is known to occur; in many other respects, setting an army of bureaucrats on a mission to "cut medical costs" is a terrifying idea."

He went on to note that we're now "committed to a [similar] path over the next 20 years." To which I would reply: You wish it was that far out:

"More than 300 patient advocacy groups recently wrote Health and Human Services Secretary Sylvia Mathews Burwell to complain about some insurer tactics that "are highly discriminatory against patients with chronic health conditions"

And what's their beef?

"Coverage of expensive drugs tops their concerns."

No kidding.

Here's the very simple Econ 101 response: you can have it good, you can have it fast, you can have it cheap.

Pick any two.

That is, when carriers are forced to accept all comers, regardless of their health and what meds they're on, and to cover any and all pre-existing conditions, something's going to give: astronomical premiums, restricted networks, or lower drug coverage.

Or maybe all three.

The folks behind the complaints clearly understand what's at stake:

"[The Administration] ought to make it very clear that if there is any kind of discrimination against people with chronic conditions, there will be enforcement action"

Or else, what?

It's been clear to many of us for a (long) while now that this is actually by design; that is, the true end goal of the ObamaTax is, in fact, Single Payer. And that is clearly what these "advocates" would prefer: after all, the government, unlike the insurance companies, is compassionate and has access to a bottomless well of money.

Or so they believe.

Perhaps, though, they should look to the MVNHS© to see how that story *really* ends.

Hint: not happily ever after.

[And be sure to check out Bob's take on this, as well]

Friday, August 15, 2014


On August 14, the Wall Street Journal carried this op-ed piece by Dr. Scott Atlas of the Hoover Institution at Stanford University (subscription required, sorry).

You’ll find it well worth the time to read. Particularly interesting to me is Atlas’ statement that “NHS insurance costs $3,500 annually for every British man, woman and child.” 

I looked up the corresponding figure for the U.S. in the National Health Expenditure Tables published by CMS each year.  Doesn't everyone know by now that the US per-capita annual expenditures are far higher than the UK’s?  So that’s not the interesting part.

The interesting part is that the annual US per-capita health expenditures were $3,500 back about 1994.   But in 1994, that level of expenditure was accepted in many quarters as conclusive evidence that the US needed single-payer medical care; that the private insurance industry had failed to control medical cost; and even that the American free market system had failed.  And here we are 20 years later observing the same annual $3,500 per capita . . . as evidence of NHS success in UK!  Meanwhile the much higher US cost is still accepted in the same quarters as evidence that the US needs single-payer medical care; that the private insurance industry is failing to control medical cost; and that the American free market system has failed.   

I’d like to suggest a slightly different interpretation.  I suggest the history shows that the UK trails the US on cost by about 20 years.  In other words, UK's cost reached our 1994 level in 2014; and so UK’s cost may well reach what ours is today, in 2034.  This interpretation also suggests the UK is not retarding the growth of medical cost any more successfully than the US.  The US is simply the leading indicator for cost growth over time.  This interpretation also suggests the higher US point-in-time costs arise from other factors.

I would also note that the UK has for years led the US in terms of restrictions on its citizens’ access to specialized medical services and newer technologies.  In many respects, such restrictions make sense where overutilization is known to occur; in many other respects, setting an army of bureaucrats on a mission to "cut medical costs" is a terrifying idea.  But the US now seems committed to a path over the next 20 years at least, that will produce similar sorts of deterioration in hospital services, growing wait times, and other restrictions on specialty and high-tech care as have  plagued NHS.  In this sense, UK is the leading indicator for the US.  Our policy leaders should be paying attention.

Of course, as we learn more about Obamacare, we may find the US is sinking to the more restrictive UK service levels much faster than anyone imagined - but accompanied by increasing, not reducing, cost.  Lower access to medical care - - higher prices - - Yum!

Kliff Diving with Sarah

Recently, longtime foil Sarah Kliff (she who couldn't understand her own Explanation of Benefits) set out to enlighten folks in flyover country on how to negotiate better prices for their health care:

She then goes on to offer five steps one might take to entice the provider to offer a price break.

As someone with many years of first-hand experience actually running medical practices, here's my take on her efforts.

First, Miss Kliff is “surprised” that, after visiting a medical provider, having been provided medical services, and receiving a statement after each visit outlining all the various codes and associated costs, she received a bill that somehow she was not expecting. I have dealt with many, many patients who are just as “surprised” as Miss Kliff that the doctor actually billed them for services rendered, and who actively seek ways to avoid paying their share. There’s nothing inherently “wrong” about asking for a break; the problem is that there are a lot of sound reasons why they’re generally not available.

And as a Medical Healthcare Executive, let me say that this is an extremely selfish attitude to take about your financial responsibility for medical care. The medical provider whose valuable services you received has bills to pay and he/she can only pay those bills by charging individuals for the care they provide. Was Miss Kliff forced to have the medical care or did she enter into a contract with the medical provider to pay for services rendered based on the guidelines of her insurance policy? This is why “negotiating down a medical bill” is nonsensical; by being in an insurance plan the price has already been negotiated down. When I set my fee schedule, I account for a discount based on the contract that I signed with the insurance company to treat their patients. That discount can range anywhere from 5% to 60%, depending on the usual and customary charge set by the provider and the amount negotiated to be paid by the patient/insurance company.

Miss Kliff outlines five steps that I would like to refute:

Step One, “stay in network,” is only viable for primary care. For specialty care, finance should not rule your decision, your medical care should.

Step Two, “negotiate beforehand,” is impossible:  the doctor cannot tell you what he is going to code in regards to your injury or illness until he has examined you and made a diagnosis. He then sets up a plan for care that is reviewed and modified at each appointment during the treatment. A treatment plan is individualized for each patient, so a provider is unable to quote the charge before treatment begins.

As to the suggestion of asking the provider to accept what an insurance company would pay, which insurance company price should apply? Each carrier pays a different amount for any service rendered. I received as little as $33.00 for a 99213 (mid level exam) and as high as $65.00 for the same code. If you want to pay the negotiated insurance price, buy an insurance policy; if not, pay your bill.

Step Three, “check your bill for errors.” If I’ve heard this once I’ve heard it a million times from patients unhappy that they had to pay for their medical care. The most common refrain was “my insurance company said you coded wrong”. In today’s electronic billing to clearinghouses this cannot happen. Any incorrectly coded claim is kicked back to be corrected before it even reaches the insurance company. In my years as a medical practice manager, I can attest that 98% of all problems were the fault of the insurance company, not the provider.

Step Four, “ask for a prompt pay discount.” This does not exist. When you sign a contract for an insurance policy you agree to pay your provider as soon as you are notified of your responsibility, thus you have already agreed to pay promptly. Why should I reward you for following the guidelines of your policy and hopefully the financial statement you signed when you entered into care with your medical provider of choice?

Step Five is “don’t be an asshole.” While this is always good advice, she does admit that, in the end, the doctor does not have to negotiate. In fact, she finally gets to the crux of the article, that “your bill isn't wrong, … you just think it’s too expensive.”

Here’s a news flash, Sarah: medicine is expensive. 

Authentic gibberish

You really can't make this up:

"[T]hose looking for information about appealing a Marketplace decision are facing a brand new one: nonsense."

Here's 1,000 more words on the subject:

 [Click picture to embiggen]
I spent most of yesterday doing my annual Marketplace re-certification training (more on that Monday), so I can relate.