Punctuation Counts

Are you the type that pays attention to punctuation? How about an asterisk that directs you to a footnote.

If you just ignore them, you should consider changing.

Here's a wake up call about your Social Security statement.

At first glance, the statement did not appear menacing. I was told I could expect to receive a benefit of “about $2,136 a month” upon reaching age 70 — which certainly seems like good news. But immediately I thought of a parallel of President Obama’s infamous Obamacare promise: “If you like your Social Security, you can keep your Social Security.” - National Review

Get ready for the asterisk.

The law governing benefit amounts may change because, by 2033, the payroll taxes collected will be enough to pay only about 77 percent of scheduled benefits.

That's 18 years away. So what? They can just increase FICA taxes on the working class, right? That's only a 30% increase.

Yes, but they can also do this.

I could not believe I was seeing the equivalent of what I was just thinking, but with a new twist, “If I like my Social Security, I can keep 77 percent of it.”

Yeah, that's going to hurt a bit.

About that promise

So I'm currently going through a batch of renewals for clients with Grandmothered individual medical plans. Briefly, these are older plans that are exempt from some (but not all) SCOTUScare requirements. In general, they have much lower out-of-pocket maximums and (for co-pay plans) unlimited co-pays for doctor's visits and the like.

The downside is that, although these can (currently) be renewed, they can't be changed in any substantive way (such as increasing the deductible to lower the premium). This creates a challenge: my clients want to keep plans that are becoming increasingly less affordable.

So, no problem, we'll just shop around for a new plan with a different carrier; in the past, this was nearly guaranteed to save dollars. The problem is that the reason that this strategy worked is no longer operative.

Allow me to explain:

Pre-ACA, as years went by, the initial underwriting went "stale;" that is, insureds aged, had claims, developed health problems (or not). Information that was true when the policy began was no longer operative. Applying for a new plan meant the underwriter for the new policy got new, current information, and could then make an informed decision. Healthy folks benefited from this because they could then get new plans with lower rates (in general).

This is no longer operative - can you guess why?

Exactly: ObamaPlans are Guaranteed Issue, so there is no underwriting, and hence no way to effectively assess the risk. So, no new underwriting means no new savings.

A couple examples:

Client 1's plan was written when both he and his wife smoked; she's subsequently quit, but neglected to let me know. That's a shame, because we could have asked the company to adjust her to non-smoker rates (yeah, there's some paperwork, but it's minimal). Their HSA-compliant plan has a $6,000 maximum family out-of-pocket, and their renewal rate is $900. They're not subsidy-eligible, so have the privilege of paying full freight for their plan.

Shopping should be easy: after all, I can plug her in as a non-smoker [ed: yes, I know, industry lingo is now "non-tobacco." Get off my lawn]. Turns out, not so much:

Company A's comparable plan, with a $12,800 family max (more than twice their current plan) is $938, and that's with the wife unit as non-smoker.

Company H's is $914, again as non-smoker.

Company H does offer a plan with "only" $7,300 family max, but it's over $1,000 a month. Some bargain.

Needless to say, Client 1 got me the non-smoker paperwork tout suite.

Client 2 is subsidy eligible, but that may not help him much; he has a slightly different problem. His grandmothered co-pay plan has a maximum $10,000 family out-of-pocket, and unlimited co-pays for doc visits. His renewal rate just broke the $1,000 barrier ($1110, to be precise). Thing is, even with the subsidy, he's only able to lower the premium by about $100 or so per month.

But Henry, that's $1,200 a year savings - what's not to love?

Well, his new plan would be effective September 1. His family's already met a good portion of their 2015 deductible, which would then reset to zero under the new plan in September, and then again in January. So they'd have three deductibles in 12 months.

Still sound like a good deal?

Yeah, didn't think so.

Gee, SCOTUScare's been such a boon for working folks, no?

Don't Believe Everything

Just because you saw it on the internet, does not mean it's true. - A. Lincoln

Headline reads, "Obamacare rates only going up 4%".

However .............

While average premiums will rise only 4 percent statewide, rates will climb as high as 12.8 percent in Santa Cruz County, 7 percent in Santa Clara County and more than 6 percent in Alameda and San Mateo counties, exchange officials revealed. - Washington Times

Even then, it could be worse.

But he acknowledged that Northern California would be harder hit in 2016. So did others.
“Particularly in the Bay Area and Sacramento there is a lack of choice among providers, putting the health plans in a difficult place in terms of getting a good price,” 

Guess we will wait until October to learn the truth.

LTCi in 1,000 words

Interesting Long Term Care insurance infographic (although they missed one in the "Care Giver Troubles" category: loss of Social Security and other retirement plan buildup, payout):

[Click image to embiggen]

[Hat Tip: FoIB Allison Bell]

Wednesday LinkFest (Cui Bono edition)

■ From the "Hey, It's Only Money" Department:

"The federal government and the states have no idea what happened to billions of dollars given to create Obamacare's exchanges ... The Government Accountability Office charged the Obama administration and many state-run healthcare exchanges with not adequately tracking federal funding"

To be fair, you can bet that was never in the job description.

■ LifeHealthPro's Allison Bell opens a discussion on how insurance professionals can help our clients (and other folks in our communities) manage the costs of long term care. These range from volunteer work to "informal non-family care."

While I appreciate her efforts at raising awareness, I'm concerned about potential liability issues arising from non-family caregivers. I think that one needs a lot more thought first.

■ As if SOTUScare wasn't causing enough financial headaches, here's one we're just now starting to hear about:

"Hey, employers, don’t even think about reimbursing your workers’ health-insurance premiums.

Beginning this month, the IRS can levy fines amounting to $100 per worker per day or $36,500 per worker per year, with a maximum of $500,000 per firm."

Best part: this never even shows up in the actual ObamaTax text, but that isn't stopping the Infernal Revenue Service from "enforcing" it. What's so ironic about this is that it's actually counter to the ostensible goal of the new regime, making health insurance more affordable.

Big surprise there, no?

TX BX lying

Why would a carrier tell such an obvious fabrication?

"BlueCross BlueShield of Texas to drop individual PPO plans in 2016"

We all know that it couldn't possibly be true:



[Hat Tip: FoIB Holly R]

Fitbit vs HIPAA

As who's actually subject to HIPAA restrictions becomes ever murkier, technology continues to pile on. And it's not just Electronic Health Records (EHR). As we noted a few months ago, John Hancock is tapping into the FitBit craze, offering policyholders the chance to trade laps around the track for dollars off their premiums.

It seems pretty obvious that buying and using a FitBit for oneself doesn't entail HIPAA issues (although it could cause problems for would-be criminals). But what if it's tech that was prescribed (and/or provided) by a medical provider?

We've posted about who actually owns the data in these kinds of cases, but not really addressed HIPAA considerations (if any). Over at SearchHealthIT, David Reis, Ph.D., vice president of information services and chief information security officer at Lahey Hospital and Medical Center in Burlington, MA (there's a mouthful!) notes:

"[I]f a person receives a wearable device through their hospital or doctor, the healthcare data that device collects is covered by HIPAA. At least, the data HIPAA defines as protected healthcare information (PHI) is safeguarded."

So what does HIPAA consider as "healthcare data?" Well, ostensibly that could be anything from your latest MRI but probably not your BP (if not linked to you specifically).

But is that really the case?

Security litigation specialist Kirk Nahra is skeptical. He thinks that wearables may fall outside HIPAA's authority (well, CMS's authority to enforce the regs).

Here's the problem, though: he posits this example to bolster his position:

"If a person is in a car accident, both the health insurer and auto insurer receive that person's medical bills. The health insurer protects that person's health data under HIPAA, while the auto insurer does not."

That struck me as unlikely, so I contacted a claims supervisor for a major P&C company to confirm whether or not this was the case.

In a word: No.

Any medical info that the auto insurer receives is absolutely subject to HIPAA confidentiality rules. Still, Mr Nahra's basic point, that 1996-era (when it was written) tech couldn't realistically predict the explosion of so much new technology and its ramifications is sound.

In the event, the key question remains: How, if at all, does HIPAA apply to "wearables?"

Part of the problem is that one doesn't necessarily know exactly where one's data is going to end up:

"[The] U.S. Federal Trade Commission recently tested 12 mHealth and fitness applications and discovered these apps sent consumer data to 76 third-party companies."

Did users agree to this? Well, one presumes that the info was disclosed in the EULA (and, of course, we all read those religiously). So there's that.

The sticking point seems to be: what happens to the data when it hits the end-vendor? Well, that seems to depend on whether that vendor has some kind of relationship with a "HIPAA covered entity" (basically, one that deals with personal health info, such as a provider or insurer).

I've reached out to FoIB David Williams, who's written extensively on wearables and health care, for his insights on this.

Meantime, something to think about while you're walking up and down the stairs.

[Hat Tip: FoIB Holly R]

Feel the Love

Anthem wants to add Cigna to their stables. But Blue Cross is not pleased.

Anthem (ANTM), may be causing anxiety for fellow Blue Cross and Blue Shield plans across the country with its $54 billion purchase of Cigna (CI). - Forbes

Why is that you ask? Aren't they the same company?

Nope.

The (Blue Cross) association’s rules prevent Anthem from using the well-recognized Blue Cross and Blue Shield brand in regions where Anthem doesn’t have the Blue Cross license or own a Blues plan, Anthem is forced to sell health insurance under a different brand like Amerigroup, which will fight for business against other Blues plans.

“The deal sets Anthem in direct competition against other Blue Cross Blue Shield plans nationwide,”

Tough.

Blue Cross needs to put on their big boy pants and move into the 21st century.

But have no fear.

In the past, Anthem’s commercial businesses that operated without the benefit of the Blue Cross license haven’t always done so well when they couldn’t market as “Blue.” 

“There’s amazing wellness programs that Cigna’s developed,” DeVeydt said. “I think our Blue brethren, they compete today in those markets with us and others and have always welcomed competition. From our perspective, we hope the consumer can get the best of both brands, and that includes the value of the Blue network.”

Sounds like Anthem is looking forward to competing with their Blue brethren.

State HIX circling the drain

Who could have seen this coming?

"State-run health insurance markets ... are struggling with high costs and disappointing enrollment."

Well, the high costs were a given (as we correctly predicted almost 6 years ago!), and not exactly a surprise.

But low enrollment? Whatever do they mean?

"The viability of state health insurance exchanges has been a challenge across the country, particularly in small states, due to insufficient numbers of uninsured residents."

Whoa - hold the presses!

What was that again?

"[I]nsufficient numbers of uninsured"

Um, wasn't the whole point of this fiasco to address the roughly 87 billion Americans without health insurance, affordable or otherwise? And here's Aloha State (Democratic) Gov. David Ige lamenting the fact that this was - how to put it gently? - a big, fat lie?

Who'da thunk it?

[Hat Tip: Ace of Spades]

A Tangled Web Update

A few months ago, we posted on the strange case of the elderly housekeeper and the $1 million life insurance policy. At the time, we wondered how she was able to qualify for that much coverage given her apparently meager income.

More information has come to light that (perhaps) explains the apparent discrepancy.

According to her family's lawyer, Ms Fox "was not some poor, desolate little lady ... Her husband owned and operated mobile homes and RV parks and developed them. They had a pretty substantial income and made some pretty good money selling those.”

And then there's this:

In 2013, Mark Buckland (Mrs Fox's son-in-law) called the agent who wrote the policies [ed: yes, "policies" - told you this was a convoluted situation], and asked about converting them from term pans to whole life. When he was told that the total monthly premiums for such a conversion was north of $6,000 (yes, that's thousands) he took a pass.

Nothing wrong with that, of course, but it's his next move that's, um, interesting:

Allegedly, the agent (Charles Mercier),  "suggested entering into a plan where a third party invested in one of the converted policies so that they could share the benefits when the policy paid out ... that transferring one of the policies to a third party was “legal and done all the time.”

Um, no, it's not, and these kinds of "arrangements" have come under increasing scrutiny. Add to that the fact that Mercier wasn't even licensed to facilitate such a deal, and one has the makings of quite the kerfluffle.

Meantime, the beneficiaries are suing the carriers to try to collect on the policies.

Ellery Queen fans should definitely read the whole piece.

Provider insurance filing bleg

From email:

"I paid upfront $6900 for a TMJ treatment of which my insurance will pay $2000.

However my doctor is not helping me with the claim since I already paid him. My date of service was back in March and he sent incomplete records to my insurance so my claim was denied. I wrote the doctor a letter demanding he complete the missing documents in my records and he hasn't done it. What can I do? He is depriving me of my right to my insurance benefits. I am in California. Any suggestion will be highly appreciated it."

Only thing that pops out at me is that, if he's a network provider, perhaps our correspondent could file a complaint with the carrier.

No idea how effective that might be.

Any suggestions would be most appreciated.

Another Obamacare Co-op Departs

As 2016 approaches when the bell rings for round 3 of Obamacare (full Monty version) the Louisiana Health Cooperative will stay in their corner.

Louisiana Health Cooperative Inc., a nonprofit health insurer created with a $65.8 million federal loan under the health care law is winding down its operations at the end of the year and will not offer coverage in 2016. - New Orleans Advocate

That's another $65 million in taxpayer money pissed away by the Obama administration.

In the two years they were in operation they issued policies on 17,000 residents that applied through the exchange.

The Louisiana co-op was one of 23 companies created nationally by the Affordable Care Act and $2 billion in total loans. The Consumer Operated and Oriented Plans, or CO-OPs, were designed to ensure competition and offer affordable and innovative alternatives to the coverage offered by private insurance companies.

Care to guess what the track record is for these creations?

According to Standard and Poor .......

“All but one of the [23] co-ops included in our study reported negative net income through the first three quarters of 2014. … Most co-ops’ weak operating performance is a result of high medical claims trend and not enough scale to offset administrative costs. … In fact, nine of the co-ops (including CoOportunity Health) reported a MLR [i.e., medical loss ratio; the claims compared to premiums] of 100% or more through September 2014.”

During the 2012 presidential debates, Gov. Romney observed the following regarding Obama's "green energy" stimulus programs.  In one year alone, Obama provided $90 BILLION in tax credits to firms like Tesla, Solyndra and Fisker. Romney's summation of this failed policy?

"You don't just pick the winners and losers, you pick the losers."

Anthem Gobbles Up Cigna [UPDATED]

As you've no doubt heard, Anthem has won this round of Carrier Feeding Frenzy '15:

"Earlier today, Anthem Blue Cross and Blue Shield’s parent company announced that it has entered into a definitive agreement with Cigna Corporation, under which our parent company will acquire Cigna in a cash and stock transaction. This transaction will accelerate the realization of our vision to be America’s valued health partner primary Single Payer Health Plan administrator."

Fixed for accuracy.

We'll have more on this in the coming days.

UPDATE: The folks over at Forbes have an interesting take:

"Though insurers say narrow provider lists allow them to keep costs low and ensure high quality doctors are on the menu of preferred providers and bad physicians are not, providers say they will be in greater danger of being shut out of a network if consumer choices dwindle."

This speaks to access, and once again puts the lie to the promise that "if you like your doctor, you can keep your doctor." Fewer carriers means, in this construction, fewer providers.

I'm not convinced that this is necessarily so: if one presumes that the Venn Diagram of Anthem's providers isn't a 100% overlap with Cigna's, it seems to me that this could potentially broaden at least some regional networks.

Forbes also addresses the affordability aspect of the merger as it relates to SCOTUScare:

"One of the main goals of the Affordable Care Act was to restore competition in the health insurance sector ...This consolidation will reverse these gains of the Affordable Care Act.”

Here I think they're on firmer ground: certainly, fewer players means less comptetion, and that in turn likely means higher rates.

Time will, of course, tell.

It's a small, small (but connected!) world

So what do Facebook, Twitter and other "social media" have to do with insurance? Turns out, plenty:

"When Blanchard called Manulife, the company said that "I'm available to work, because of Facebook," she told CBC News this week. She said her insurance agent described several pictures Blanchard posted on the popular social networking site, including ones showing her having a good time at a Chippendales bar show"

Now, we noted that almost 6 years ago, so why bring it up now?

Well, it seems that other sectors of the insurance world are starting to take notice:

"Historically the insurance industry has operated knowing little about its customers; however, now with new technologies and the Internet, it no longer has to."

I think this may be painted with too broad a brush: certainly insurance companies have never been particularly "connected" or engaged, but good agents always have been (I've always called this a "relationship business"). Still, better late than never, right?

"Usage of social media has not been standardized within the insurance industry yet ... it seems that social media is a boon to underwriters and claims adjusters"

Indeed. one has only to look to our example above to see how adjusters have made use of the tech. On the other hand, it seems that carriers (American ones, at least) are already behind the 8-ball:

"Users of social networking websites could face higher insurance premiums because burglars are using them to 'shop' for victims' personal details."

That's also from 2009, and concerns insurers in the UK. One supposes it's nice that we're finally catching up to them on our side of The Pond©.

Wednesday LinkFest

■ Longtime readers may recall our post from 2006 (almost 9 years ago!) wherein we introduced (and applauded) a new transparency program from MN Blue Cross. That was just one example of consumer-centric health care, whereby insured's are encouraged to take more control over their own care. Of course, high deductible, HSA-compliant health plans under-gird and simplify this effort, but they're by no means the only such plans to do so.

One of the arguments against such plans has been that folks shouldn't have to direct the ambulance to the least expensive ER:

"The caricature is that consumer-directed health care means that patients have to shop around when having a heart attack. But in the event of a truly immediate or catastrophic illness, insurance will continue to cover the costs. The truth is that the overwhelming majority of health services result not from emergencies but from chronic, long-term illnesses. Most patients do have the time and the ability to make decisions on the source and course of treatment, from knee replacements to cancer care. But the industry today makes thoughtful choice almost impossible."

■ In this Tale of Two Bob's, our good friend Bob Graboyes tips us to an insightful article by uber-wonk Bob Laszewski on why SCOTUScare likely won't go the distance. In 1,000 words:

The obvious point is that the new regime just isn't attractive to the middle class, who made up (and continue to make up) the bulk of folks most affected by it. But he offers a deeper analysis in the article.

Recommended.

■ SCOTUScare proponents like to point to Medicaid expansion as a net positive aspect of the plan. But is it really?

"Two dozen states immediately took the bait, lured by the promise the federal government would pay 100% of costs in the first three years and 90% for the newly eligible on into the future. Several more have joined since."

Of course, Uncle Sugar has his price, as well, and so many of these states are beginning to suffer a bit of buyer's remorse:

"At least 14 of these states have seen enrollment surge unexpectedly, forcing at least half to increase their cost estimates. And we're not talking about a few percentage points."

Oh really?

Yup:

* The Blue Grass State saw double their anticipated enrollment, thuis increasing their costs twofold.

* Cali experienced an enrollment rate three times what they'd anticipated, and now a **third** of its citizens are on Medicaid.

* That bears repeating: "1 in 3 Californians are on Medicaid."

And the list goes on.

At some point, that dam's gonna break, no?

Reverting to type

Recently, I received an email touting a new (to me, anyway) product called a "reversionary annuity." Having never heard the term before, I was intrigued, and so I reached out to the email's sender, Nancy Woo for an explanation and an example.

Reversionary anntuities are a riff on Pension Max (maximization):

"A retirement income strategy that combines an insurance policy with an immediate annuity to provide for a surviving spouse ... upon the insured's death, the beneficiary receives a guaranteed lifetime income instead of a lump sum payment."

Seems simple enough, and quite on-track with traditional Pension Max, but I wondered about the mechanics; that is, how would one of these work? Ms Woo was kind enough to send me an illustration, along with this explanation:

"In our case study, we have a 56 year old male client who can choose to take a life only pension for $3,042/mo or the joint life 100% survivor at $2,434/mo. We can replace the survivor’s $2,434/mo for only $249/mo in premium.

In doing so, we’re saving the client $359/mo.  Assuming the client is insurable and healthy, this is the most ideal alternative. The present value of the future monthly survivor income stream is $362,035.56. The cost of a guaranteed fixed UL to age 100 would run him $377/mo. Also you’ll see that the income paid out the beneficiary is treated as an annuity income with an exclusion ratio, so the beneficiary will have more after tax income than the pension."

That last is pretty important: it means that, net-net, the client's beneficiary would come out ahead (if even just a bit). So, another interesting retirement planning tool for folks with an eye to the future.

Perm vs Term, Round 2

Back in April, we recommended Michael Markey's terrific takedown of Dave Ramsey's dangerous insurance "advice" at LifeHealthPro.

Well, this month he's back with more, specifically showing how DR's "counsel" likely cost a middle-aged couple several thousand dollars.

Good Great read.

Smokin' Hot Vendor Tricks

Several years ago, I bought a CharBroil brand Commercial Series Infrared gas grill. Because I tend to grill almost year 'round, it's seen a lot of use, and some of the internal parts have begun to wear out (which is to be expected: there were no commas on its price tag).

CharBroil offers a nifty "refresher" kit which includes new cooking grates and assorted other parts at a decent price, and so I ordered one. The way it works is that you buy the kit that matches up with your grill's serial number; somehow, the kit that arrived a few days after ordering was the wrong one.

But I didn't know it (hey, parts is parts, right?).

In the event, the replacement grates were made of a different material than the original, and it was unclear how to 'season' them. So I called the company to ask for advice on seasoning the new grates, and as I described them to the young lady on the other end of the line, she realized that they had sent the wrong ones. This was a problem: I'd already disposed of the packaging material (which pretty much every company requires in order to return defective merchandise). No problem, she told me: they had shipped the wrong item, they would credit my account for the full amount (including shipping!) and then ship me the correct kit, charging only for the kit itself.

I pointed out that this meant that I was actually coming out $16 ahead, which didn't seem fair; she explained that they would rather have satisfied customers.

Wow.

I've really enjoyed this grill (it does a great job), and now I'm even more impressed with the company behind it.

Kudos, CharBroil!

No um, kidding, Sherlock

We've noted before that the 404Care site isn't exactly a paragon of security or efficacy:

"Investigators ... created 12 fake health insurance test applicants and... have gotten qualified health plan (QHP) coverage for 11 through the [404Care.gov site]."

But that was then, and this is now, so surely things have improved, right?

Right??!!

Not so much (and stop calling me Shirley!):

"Phony applicants that investigators signed up last year under President Barack Obama's health care law got automatically re-enrolled for 2015."

Hey, at least these folks got to keep their plans.

And in case you were wondering, things got even better (for certain values of "better"):

"[F]ive bogus beneficiaries who were reinstated even got their monthly subsidies bumped up a bit"

And taxpayers will be delighted to know that they received these increases unbidden. Just a nice gesture of generosity on the part of Uncle Sugar.

But the very best part of the report is this gem, which basically summarizes the whole exercise:

"[404Care].gov's document-processing contractor "is not required to seek to detect fraud"

Of course not:



[Hat Tip: Moe Lane]

Health Wonk Review: Hot Summer Nights, Cool Summer Drinks

Good morning, fellow Wonkers and Wonkettes, and welcome to the midsummer collection of refreshing blog posts (and, perhaps, an adult beverage or three). In addition to the usual excellent health care policy and polity, you'll find a generous selection of unusual summer quaffs.

A word of caution: If you're going to indulge in the latter, please arrange for a DB (Designated Blogger).

[Note: Cocktail photos/recipes courtesy Delish.com]

And now to quench our thirst for knowledge (amongst other things):
 

■ Joe Paduda, HWR co-founder and all-around nice guy, believes that there is no "Obamacare," and offers some clarification about what PPACA is, and isn't.

■ Our good friend Louise Norris reports on the Centennial State's health insurance rate environment. She notes that, as always, "premium is king," but that that's always been the case. So what's different now? Click through to find out.

By the way: when you get there, be sure to congratulate hubby Jay on his recent appointment to the Connect for Health Colorado board of directors. Mazel Tov, Jay!

■ Over at The Hospital Leader, Brad Flansbaum tells us about "super-utilizers," folks who consume a disproportionate amount of health care, and what this means for the rest of us "normal" folks.
 

■ Jaan Siderov has always been one of my very favorite bloggers in this corner of the blogosphere, and his submission this week further cements that: we've all heard concern about the various carrier mergers; Jaan offers his own take, with some currently-under-the-radar concerns.

■ As usual, David Harlow casts an outsized shadow with his unique insights into something that, at first glance, seems so simple: patient reviews of their docs. David asks a simple question ("Where are the metrics to guide rational choice of provider?") and then dives right in.

■ Uber-wonk Roy Poses takes to task former President WJ Clinton for touting a liver pill (no, not this one) that costs $1,000 a pop, yet shows little evidence of actually, you know, working very well.
 

■ Jason Shafrin, my favorite Health Care Economist, also asks a question: "What is the key driver of regional variation in the cost of treating patients with cancer?" Think you know? Well, then, click on through to check your knowledge.

■ The Health Affairs Blog sends along this post by Donald Light on the risks versus rewards of certain FDA-approved meds, and notes an "epidemic of harm from medications [that] makes our prescription drugs the fourth leading cause of death in the United States." Talk about the cure being worse than the disease!

■ Another good friend, David Williams, wrestles with the conundrum [ed: what a great use of that term in this context] that capping insured patients' specialty drug co-pays may actually do more financial harm than good, in the form of higher prices. 
 

■ Workers Comp maven Tom Lynch has his sights on the alarming fact that injury rates for home health and personal aides is two-and-a-half times that of other workers, and that OSHA's really failing these folks.

■ Long time HWR contributor Peggy Salvatore introduces us to the 21st Century Cures Act. Overall, she likes it, but is puzzled by the fact that its proposed funding mechanism is revenue not from Big Pharma and the NIH, but the oil industry. That's not necessarily a bad thing, but she wonders why the health care sector is turning to the energy sector for cash.

■ The folks at healthinsurance.org offer a post from Amy Lynn Smith extolling the virtues of the ACA as it relates to the LGBT community.

■ To finish up, I'm going to exercise Host's Privilege and tout this two-parter from my co-blogger Mike Feehan. We spend a lot of time at IB correcting folks who conflate health care with health insurance, but Mike tackles new ground in his posts: despite popular usage, health care and medical care are not the same.

Mike makes a compelling case. Click here for Part 1, and here for Part 2.

Well, that's it for this week. Hope you enjoyed the good reads and tasty concoctions. Don't forget to drop by Peggy Salvatore's place on August 20th for the next edition.

Continuing VA Shanda Saga

Well, well, well.

When last we looked, the Veterans Administration was about to be awarded a clean bill of health:

"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."

Very nice.

So how'd that work out for those who sacrificed life and limb for our country?

Turns out, not so good:

"According to a leaked internal document from the Department of Veterans Affairs, nearly one-third of veterans awaiting healthcare coverage at the VA have already died."

Now, to be fair, that means that upwards of two thirds managed to survive the VA's tender ministrations. And batting .330 in the majors is a big deal (just ask Hall of Famers Ty Cobb or Shoeless Joe). Then again, they weren't responsible for keeping our vets healthy (and alive!).

Warm fuzzies.

SSM & Insurance - An Update

Earlier this week, we responded to a post at Legal Insurrection about the liability insurance implications of the recent SCOTUS same sex marriage (SSM) ruling. Kemberlee Kaye, the LI post's author, was kind enough to link back to our post.

She has some kind things to say about us, and some additional insights, as well.

Thanks, Kemberlee!

Obama lied, Grandpa died

Remember this?



Well, just like that storied 3000% rate decrease, not so much:

"Reminder: Non-Grandfathered Plans Must Implement Embedded Out-of-Pocket Maximums"

The article points out that this rule applies not only to individual medical and fully insured group plans, but self-funded groups, as well.

But what does it mean?

There are essentially two ways to apply deductibles in policies covering more than one person (aka "family" coverage): embedded and aggregate:

"An embedded deductible is when the plan begins to make payments as soon as one member of the family has reached the individual deductible limit."

That is, each person has his own deductible to meet before any co-insurance is applied. So if John meets his deductible the plan will immediately shift to co-insurance (or 100% if there is none). Under an aggregate plan, the total family deductible must be met before co-insurance kicks on. So even though John meets his deductible, nothing gets paid out until Sue meets hers.

Whether one method is superior is debatable, but the point here is that once again, we are not allowed to keep the plan design we prefer.

Just one more ObamaCare lie.

SSM & Church Insurance

The other day, we looked at how health insurance (particularly group plans) will be impacted by the recent SCOTUS ruling on Same Sex Marriage (SSM). Now, the legal beagles over at Legal Insurrection have a very interesting post about the future of liability insurance in this new, enlightened age, and it's not pretty:

"On July 1, David Karns, vice president of underwriting at Southern Mutual Church Insurance Company (which “serve[s] more than 8,400 churches”), wrote ... The main concern is whether or not liability coverage applies in the event a church gets sued for declining to perform a same-sex marriage"

The short answer: No.

As usual when it comes to issues involving Property and Casualty (P&C), I turned to good friend and guru Bill M for his insights:

The reason that coverage in such circumstances would (likely) be declined is that it was an intentional act of violating the law. So if (when?) a church (or synagogue, or mosque) is sued for refusing to perform a SSM, the resulting lawsuit would not be covered. That also means the carrier has no "duty to defend" (basically: provide legal counsel).

Of course, any fines imposed by the state would also be excluded.

This is not quite the same as the linked post's headline:

"Churches refusing to perform same sex marriages may be denied liability insurance"

At this point, no carrier is refusing to actually underwrite and issue a policy to non-complying churches for the simple reason that it's not currently a part of the underwriting process. That is, there's no question on the app that reads "Do you refuse to perform gay weddings?" If and/or when a claim arises because of such refusal, the carrier would simply deny coverage.

Now, actually declining to write a policy in the first place is currently pretty speculative. But as Bill pointed out to me, such a scenario is not necessarily farfetched:

Imagine Acme Church Insurance Company with 50,000 policyholders, 10,000 of which get sued for refusing SSM, and all 10,000 of these claims are denied. That's a lot of ticked off customers, no? So what's the likelihood that the next application version's going to include a question about SSM, and if the answer's not "sure, all the time," then no soup policy for you.

Is that likely to happen in the next year or two? Probably not, but don't be surprised when it does happen a few years down the road.

Bill also brought up another very disturbing thought: many (most?) churches have Boards of Directors (or Elders, or Deacons, etc), and thus likely have D&O (Directors and Officers) coverage:

"Errors and omissions coverage for an organization, its leaders, and governing bodies while acting within the scope of their duties."

The reason for this coverage is that board members could be sued individually, putting their personal assets at risk for something their church or its leaders may have done (or not done).

Bill mused about whether such policies might also decline coverage for SSM-related claims. Talk about a chilling effect on lay folks volunteering for leadership positions in their congregations.

Brave new world, indeed.

It's Greek To Me

For all the talk about how great "universal health care is" the socialist cheerleaders never want to talk about the economics of health care.

“Of all the damage done during the last five years, healthcare has been hit the worst.”

The Greek healthcare system is in meltdown after years of austerity. State-run hospitals have had to slash budgets but as much as 50% in that time. Basic supplies such as gloves, syringes, gauze, cotton wool, catheters and paper towels have long been in low supply. The numbers of doctors and nurses is critically low.

Rising poverty and rocketing unemployment has left 2.5 million Greeks – a quarter of the population – without national state healthcare coverage (Health benefits are only available for up to a year after losing a job, after which patients must pay for their own treatment).  - The UK Guardian

While the Greek banking system is making the headlines, nothing is said about the health care system.

Five years ago, most of the patients at this clinic were refugees or other foreign nationals with no access to healthcare. Now, the 1,500 patients who come each month are largely Greeks, many of whom once ran businesses or shops in the city but who are now unemployed and with no healthcare access. 

And no end in sight.

Are health care and medical care the same? (Part 2)

[Continued from Part 1]

Your health care is mainly the sum of your own behaviors that bear on your own health.  And unlike a medical professional’s services, health care - your own behavior - is free.  You don’t get a bill for quitting smoking; for avoiding junk food; for getting plenty of exercise and so forth.  Your behavior is free. 

This is poorly understood and yet people really need to know because it affects their own health.  It would help if our political leaders addressed this need.  Sadly they are too busy playing the politics.  So long as health care and medical care are widely considered to be the same, I think America will overlook significant opportunities to improve public health and at the same time control our overall medical costs.

In addition to being free, healthy personal behaviors can help reduce the incidence and severity of many types of diseases – e.g., overweight can lead to muscular and joint problems, respiratory problems, even diabetes.  A lesser impact from these ailments would benefit individuals, and would also help control overall medical costs.  In other words, the insight that health care is not the same as medical care leads to increased appreciation of the fundamental importance of public health. 

I think it will also lead to more serious consideration of demand-management strategies for the cost of medical care.   

For the past 50 years, we’ve been trying without much success to manage the cost of medical care by managing supply - limiting benefits, limiting provider reimbursements, even limiting the number of med school grads.  Those supply-management strategies have not worked in the past, and Obamacare evidence suggests they aren’t working now, either. 

I don't suggest we dismantle reasonable strategies for managing medical cost by managing supply.  I do suggest America also needs an explicit and coordinated strategy to manage demand for medical care.   That's because we have a near-critical need for improved public health starting at a personal level.  In other words, we need health care, not just medical care.  And the crucial insight that leads us to this conclusion, is that health care and medical care are not the same. 

“All there is to thinking is seeing something noticeable which makes you see something you weren't noticing which makes you see something that isn't even visible.”
― Norman Maclean, A River Runs Through It and Other Stories

Are health care and medical care the same? (Part I)

This is in two parts and kinda long.  Sorry.

So-called pundits, thought leaders and politicians have confused medical care with medical insurance so often and for so long, one almost wearies of calling them out.  I think there's another confusion of terms that may seem innocuous, but which is equally careless, mistaken and damaging to analysis: that health care and medical care are the same

I think it’s useful to point out the obvious - that despite popular usage, health care and medical care are not the same.  I think this insight enables clearer understanding of our medical cost problems.  For one thing, you'll notice that health care is free, it’s medical care that’s expensive. But there are many more, some less-obvious, things to notice.  Important things

For example, people who aren’t careful about their health tend to have higher medical expenses. Second, despite our medical ability to treat far more effectively, American public health has been deteriorating for decades.  Part of the reason is that we Americans are failing to be careful about our own health. Deteriorating public health has become a huge driver of medical costs. Third and most important, when we fail to understand – or choose to ignore - that health care and medical care are not the same, I think we make it harder to diagnose our problems and set ourselves up to miss significant opportunities to improve the public health and at the same time save overall medical costs.

When pundits, thought leaders and politicians use health care and medical care interchangeably, it’s natural for people to believe that e.g., a physical exam delivered by a medical professional is health care.  But is it?  It’s also common thinking that an exam delivered to a “well person” is not medical care.  But is that true? In what way exactly is an exam health "care"?  Besides, it’s not logical to believe that the way to care for our health is to visit an office someplace and get an exam “delivered” by a licensed professional.  I don’t know how much you may have read about the effectiveness of regular physical exams in the early detection of disease; the marketing pieces are rosy but the peer-reviewed literature is not so encouraging. 

Sure, medical professional may advise you about healthy behaviors.  But here is the key distinction: those behaviors are UP TO YOU.  Health care is fundamentally what you do to take care of your own health.  In other words, you are responsible for your diet; your sleep habits; your exercise; whether you smoke; whether you abuse alcohol or other drugs; whether you drive carelessly or recklessly, whether you follow your doctor’s advice, etc, etc.  Your health care is fundamentally not some service you must pay for, provided to you by someone else.  That’s nearly a definition of medical care.  Instead, your health care is mainly the sum of your own behaviors that bear on your own health.  And unlike a medical professional’s services, health care - your own behavior - is free.  You don’t get a bill for quitting smoking; for avoiding junk food; for getting plenty of exercise and so forth.  Your behavior is free.

[Click here for Part 2]

Radar Visibility: Community Rating

In email from Anthem this morning:

"Community rating is one of the health care reform changes that applies to businesses classified as small groups. As of January 1, 2016 this means employers with 1 to 100 employees. With the ACA law, new small group health care plans have to be priced using community rating."

So what does that mean?

Well first, let's step back and define Community Rating (CR) [ed: an excellent primer may be found here]:

Basically, CR says that rates may only be determined based on the area in which you live, your age, and (generally) whether or not you use tobacco. This is how the individual market's been priced for a while now, and we've all seen how well that's worked out. Soon it will be applied to small group plans, exacerbating already skyrocketing premiums.

But Henry, this means that employers with lots of unhealthy employees won't have to pay more than healthier groups. Isn't that a good thing?

In a word: no.

And why not, you ask?

Suppose your auto insurance was based on CR. This means that your insurer could only base your rates on your age and where you live. That means you get to pay the same rate as your neighbor with 3 DUI's and two major accidents so far this year. What do you think's going to happen to everyone's rates under that system?

The same thing applies to health insurance (they're both indemnity-based products). So where's the incentive to encourage employees to live healthier lifestyles, since their rates are going to be the same as your competitor's across town (the one that has daily keg parties). It's also a major hit on male employees, who will end up subsidizing their female counterparts (since working-age women tend to have more and costlier claims). So one wonders how many groups are going to fold once they see the effects of this new regime.

Some states are generously offering another one of their highly successful (for some values of "success") "transitional relief" program to help ease the burden through most of 2017. Check out co-blogger Pat's Federalist post on how well that's working out.

Ten Feet Tall and Bulletproof

Young people these days. Living carefree lives. Don't need no stinking health insurance. Got better things to spend money on.

These adults, mostly in their 20s, see access to preventive or primary care as the biggest advantage of insurance, and the financial strain of paying for coverage as the main disadvantage, the study found. - Yahoo News

Just like our car insurance covers tires, brakes and oil changes.

Despite their price concerns, however, nearly half of them couldn’t define “deductible,” the amount they need to pay before insurance will pick up the bill. And 78 percent of them incorrectly defined “co-insurance,” the portion of costs they need to pay after the deductible has been met.

I will admit, coinsurance can be a challenging term. But deductible?

They certainly know the word copay.

The survey followed 36 "yutes", average age 26, as they shopped for health insurance online at hc.gov. Most chose silver plans, a middle of the road plan. But some also looked for other alternatives rather than actually PAYING for health insurance.

Many young adults also considered other alternatives such as getting insurance through their employer’s plan, their parents or their school.

Three months later a follow up interview was conducted.

Eight of the 33 participants enrolled in a plan through HealthCare.gov at the time of their follow-up interview. Six of them selected silver plans, while one chose catastrophic and one opted for bronze.

They were generally satisfied with their selections, the study found.

Five participants remained uninsured at the time of the follow-up interview. All of them cited unaffordability as a reason for not purchasing insurance.

It begs the question, how many of those who indicated they were satisfied had actually used the plan for anything other than routine care.

And what about the remaining 20? (33 - 8 - 5 = 20)

Assuming they got coverage through mommy's plan or an employer, it makes you wonder why DC had to spend a trillion dollars they didn't have to provide "affordable" health insurance for such a low percentage of low information voters.

Going forward, I wonder how many people will be satisfied with the advice they get from the 30 day wonders that answer the phones at goodluck.gov?

Gay Ol' Time Redux

Two years ago, we reported on this SSM (same sex marriage) health insurance wrinkle:

"I got a call today from a woman who needed to find new coverage. She had been covered by her same sex partner as a domestic partner, but since Maryland passed gay marriage, she's now been told that she can no longer stay on the policy unless they get married. She was not happy with this turn of events"

Well that was then, and this is now, and post-Obergefell SSM is the law of the land. So, what does this new regime portend for health insurance, specifically for same sex couples?

From email I received this morning from United Healthcare:

"Employers who offer health coverage for spouses will now be required to provide coverage to same-sex spouses if they aren’t already."

It's not entirely clear whether this will entail the same consequences noted in the 2013 post:

"What if an employer group wants to remove domestic partnership coverage?

If the state law allows, we will make the change at renewal."

So it may be that non-married same sex couples can keep their group coverage intact. I suspect that we'll see a flurry of states enacting laws to clarify this, and carriers reacting to these changes.

Plus, this email specifically addresses Employer Sponsored Insurance (ESI) plans; it's not clear how the individual market will finally resolve the issue. One supposes that it will be generally the same as group.

Which then brings up an interesting point: many unmarried hetero couples currently living together have one partner on the other's insurance plan. If carriers can require same sex couples to be married to enjoy that benefit, why wouldn't that also apply to hetero couples? One suspects a lot of these folks will be plum outta luck.