From the P&C Files: Unclear on the concept

Um...

 [Hat Tip: mir&uh]

Interesting Accidental Carrier Trick

With networks getting skinnier and skinnier, receiving emergency care out-of-network is becoming a bigger and bigger challenge. Most plans still use the PPO model, so there's at least some level of coverage, albeit with substantially greater out of pocket. And of course HMO model plans will typically have none (or even more substantially reduced coverage).

UHC has just announced a set of 3 new "Accident SafeGuard" plans that seek to address this potential financial catastrophe. From email:

"Accident SafeGuard pays fixed benefit amounts for loss resulting from qualifying accidental injuries and does not limit your client to any network of hospital or doctors." [emphasis in original]

First thing, of course, is that this doesn't help if you're out-of-network for chemo or if you get sick while on vacation. But for broken limbs or the like, perhaps a valuable coverage addition. Rates will vary depending on where you live, your age, and the like, but I can't imagine they'd be terribly expensive (since qualifying expenses are pretty narrowly defined).

Insurance insurance.

NAHU *almost* gets it

Full Disclosure: I was a member of the National Association of Health Underwriters (NAHU) for many years and was, in fact, co-founder of my local chapter. That being said, I am generally ill-disposed towards most so-called agent associations, because - by and large - they tend to represent the carriers more than the agents. On the other hand, the organization's current president has a background as an actual agent, which lends some legitimate cred to his latest offering on why some carriers have decided to forgo paying commissions on business written after Open Enrollment ended.

Here's his take:

"Carriers are cutting out their brokers because they don’t want to sell their policies."

And that, in a nutshell, is exactly right: carriers lose money on virtually every policy they sell, particularly those sold on-Exchange (primarily because the vast majority of these are subsidized).

And he goes on to (quite correctly) point out the value that agents bring to the table (which is, of course, part of his job). And that's what we call "necessary, but insufficient;" that is, it's demonstrably true that the agent adds value in sorting through all of the options, calculations and decision-making. But I don't hear Mr Goldmann calling out state DOIs to investigate what's happening to those unpaid commissions. As we've pointed out, they are priced into the products already, a separate calculation from MLR, etc.

Instead: crickets.

Well, Mr G?

[Hat Tip: EBA Magazine]

Privatizing CanuckCare©

We've written about the Canadian health care system many times over the years. It's "free," which means that one gets what one pays for. As with all such schemes, actual care is rationed, most often by the use of long wait times that work on the basis of attrition.

That's changing, however, at least in one Province:

"Wait times ... dropped significantly in the Saskatchewan province after private, for-profit clinics were introduced to the area."

On the one hand, this would seem blindingly obvious to anyone with even the most remote grasp of how markets work. But it's a hopeful sign that, at least for now, some government bureauweenie(s) "get" it.

Interestingly, this isn't the first time our Neighbors to the North© have considered privatizing at least a part of the health care sector.

From 2009:

"Hoping to capitalize on patients who might otherwise go to the U.S. for speedier care, a network of technically illegal private clinics and surgical centers has sprung up in British Columbia, echoing a trend in Quebec."

What's Canadian for "What took you so long?"

[Hat Tip: FoIB Holly R]

UHC Folds, Anthem Stands Pat?

As we saw this morning, UHC continues to exit the Marketplace in state after state. Which should be a pretty strong signal of unsustainability.

But perhaps the death of the Marketplace has been exaggerated:

"Anthem ... seems inclined to help the [PPACA] public exchange system keep its doors open and products on its shelves in 2017."

So (at least) another year promised by The Blues.

Be interesting to see what their stakeholders think of this move.

Too good *not* to post

Unvetted from the web:

I've reached out to Mr Alameddine in an effort to ascertain from whence he obtained his screenshot. It's not from the 404Care.gov site (I've been on that enough times to know) but perhaps from a state-based Exchange or carrier website? Will update this post as appropriate.

UH C You Later - UPDATED

Add Iowa and Kentucky to the list of casualties - that makes 26 out of 34. UPDATED MAP BELOW

The shake up of the individual market begins. On Tuesday United Health Care announced that they were going to be leaving the individual marketplace in all but "a handful" of states in which they currently sell Obamacare policies.

This isn't something that we should be surprised to see. With losses in 2015 of $475,000,000 and projected losses in 2016 of $500,000,000 why would any business continue to operate in a losing market? Especially considering UHC's enrollment across the 34 states they participate in is only 795,000 people.

So where does UHC stand at this point? Thanks to some excellent tracking by Zach Tracer at Bloomberg we know that UHC is leaving 24 states. They have verbally agreed to participate in only two states so far for 2017.  Here's a handy little map to see where UHC stands in your state.

While we don't know the exact fallout yet, consumers should be prepared for more insurers to follow. With a couple of years of actual claims data and the constant churn happening in the individual marketplace, it's going to be difficult for insurers to find profitability in this space. At least they won't be profitable until the true costs of care are actually factored in to the premium pricing.

Then we will have what we always believed Obamacare to be, an unsustainable high risk pool paid for by your tax dollars.

"Junior" Fights Back: Tales from the MVNHS©

Earlier this year, we reported that "junior doctors" employed by the Much Vaunted National Health System© had engaged in a pretty severe work slowdown, in protest over "pay and working conditions." In fact, these "junior doctors" comprise up to half of all doc's in England.

As with almost all government-run enterprises, the folks in charge heard the junior doc's pleas, and agreed to a mutually beneficial resolution.

Er, no:

"U.K. Junior Doctors Withdraw Emergency Care in ‘All Out Strike’"

On the one hand, the work stoppage lasted a mere nine hours, but of course that impacted tens, perhaps hundreds of thousands of patients (for better or worse is another question entirely, of course).

Under proposed MVNHS© regs, junior doc's would be required to work weekends and evening at "regular" pay scale, not "premium" (aka overtime, one presumes). This is necessary, of course, in order to rein in out-of-control healthcare costs.

Whoa there, Henry, wait just a second:

It is a well-known fact that government-run health care schemes systems are far more efficient than our own, and that they're able to keep strict control of health care costs with zero impact on quality or quantity of care.

Um, not so much:

"[T]he British Medical Association, the union for doctors, has countered that it will stretch an already-overburdened workforce even thinner, endangering patient safety."

Oh.

Good thing that can't happen here.

[Hat Tip: FoIB Holly R]

Obama Signature Legislation and Legacy

Will Obama's legacy be the end of the best health care system in the world? This president's experiment in fascism may well go down in history as a complete failure.

Ronald Reagan told the American people: “The nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help.’ ” Obama wanted to convince Americans that they were not terrifying. And the way he was going to do it was through the only great liberal legislative achievement of his presidency: Obamacare. 

He failed. Even before he leaves office, Obamacare has begun unraveling. - Washington Post

For the handful of people that have been helped by Obamacare there are thousands who now have health insurance they cannot afford, or cannot afford to use.

Health insurance carriers have lost billions. These are the same carriers that, in the years prior to Obamacare, either made a small profit on health insurance (usually 2 - 4% of premiums) or broke even.

The president promised these insurers taxpayer bailouts if they lost money, but Congress in its wisdom passed legislation barring the use of taxpayer dollars to prop up the insurers. Without the bailouts, commercial insurers are being forced to eat their losses — while more than half of the Obamacare nonprofit insurance cooperatives created under the law failed.

There is no way to spin this.

Obamacare is a failure.

#ObamacareFail  #Fascism

Top o'The Week LinkFest

■ Despite the best (?) efforts of its proponents, ObamaPlan enrollment continues to crater:

"More than 1 million ObamaCare exchange customers have likely dropped out since open enrollment ended on Feb. 1"

That's according to newly released numbers from a handful of states. Interestingly, 80% of those states use their own Exchange portals, while only one (Oklahoma, okay?) sends their victims citizens to 404Care.gov.

Make of that what you will.

■ Meanwhile, the ripples from UHC's withdrawal from most markets (as graphically reported last week by our own Patrick P) continue their impact:

"United's financial results in the Obamacare exchanges are more than a blip, they are indicative of what is happening in almost all of the states to almost all of the health plans operating in the insurance exchanges."

That is, UHC represents the (admittedly large) canary in the coal mine. If the largest health insurer can't make money in this market, one has to question the sustainability of that market itself. As uber-wonk Bob Laszewski notes, "Obamacare is not about the insurance companies, it is about the consumers that have nowhere else to purchase individual health insurance in the United States and are already finding the offerings––with subsidies or without––lousy deals."

The reality is that 85% of the folks who buy on the Exchange are being subsidized with taxpayer dollars.

And it gets worse: some 60% of those eligible for subsidies don't even bother to use them.

What's that tell ya?

■ Finally, via FoIB Holly R, we learn that telemedicine was actually predicted in 1925:

La plus ca change...

More O'Care Lies

We all fondly recall President Obama's pledge that rates would decrease 3000%, right?

Well - and you may want to sit down for this - turns out that he may have fudged just a teensy, tiny bit.

And by "teensy, tiny bit" we mean, well:

"Marilyn Tavenner, the president and CEO of America’s Health Insurance Plans (AHIP), said ... that the culmination of market shifts and rising health care costs will force stark increases in health insurance rates in the coming year."

On the one hand, Ms T has her own issues. On the other, it's not as if there's insufficient 3rd party evidence to support her contention. The reality is that  the ObamaTax is unsustainable, and that we're in for devastating premium increases for the foreseeable future.

Despite President O's promises.

[Hat Tip: FoIB Jeff M]

Passover 5776/2016

In case you were wondering:



Chag Pesach Sameyach!

[Hat Tip: David Williams]

Stossel Nails It

First, r'fua shleima to Mr Stossel:

"I write this from the hospital. Seems I have lung cancer."

The post highlights some of the more egregious examples of customer service faux pas, but I'd like to focus on one or two specific points he makes along the way.

For example:

"I get X-rays, EKG tests, echocardiograms, blood tests. Are all needed? ... [N]o one discusses that with me or mentions the cost. Why would they? The patient rarely pays directly. Government or insurance companies pay."

This is crucial: when a third party is footing the lion's share of the bill, we become less sensitive (or completely desensitized) as to what that bill actually is. Hence, the kinds of pricing distortion we read about in Kelley's (fantastic) post yesterday on how providers calculate what a given encounter will cost.

Reinforcing this theme, he continues:

"Instead of answering to consumers, which forces businesses to be nimble, hospitals report to government, lawyers and insurance companies."

By implication, reporting to these outside agencies causes the business (hospital) to focus on the process, not the results. And since the provider's true "customer" is the government or insurer, why would it really care about the patient's convenience?

And then he gets to a very interesting point. He notes that we're told, over and over, that we can't legitimately second-guess these providers, because health care is " too complex for consumers to negotiate."

That may nor may not be true (and I would argue that it's likely at least partially true in the case of brain surgery or cancer treatment, but perhaps less so when it comes to less serious ailments), but Mr S notes that:

"[C]ars, computers and airplane flights are complex, too, and the market still incentivizes sellers to discount and compete on service."

True, and he underscores that by pointing out that we generally buy these goods and services with our own money, not the government's or an insurance company (company cars and travel excepted, of course).

Regular IB readers know that I've long been a fan of consumer-driven healthcare; the challenge is that I fear that that ship has sailed.

Springtime Health Wonk Review

Peggy Salvatore hosts this week's innovative collection of health care wonkery. From Big Pharma to Grandthered ObamaPlans to a video on Worker's Comp there's bound to be something to pique your interest.

Medical Fee Schedule: Explained

David Williams from Health Business Blog has some questions about how the medical world comes up with its fee schedules. Specifically, he was relating a story regarding his wife’s recent visit to an Urgent Care Facility and the resulting charges associated with that visit. Let’s take a look at those questions and see if we can provide some answers for inquiring minds.

If something is billed for $427 but reimbursed at just $22, it seems that BI is overcharging or Blue Cross is underpaying. Or is it both?

Actually it is neither. The only set fee schedule that is relevant is the fee schedule put out by Medicare each year. This is the fee schedule from which all other fee schedules are derived.

To create a fee schedule for a medical office there are several factors to take into account:

1) The reimbursement set by Medicare via the Medicare Fee Schedule,

2) The usual and customary charge for a similar service in your geographical location,

3) The fee schedules of all other insurances of which you are contracted, and

4) How much money the facility/doctor needs to generate to stay in business.

In creating a fee schedule for a medical facility the starting point is 150% of the Medicare fee. Then this number is compared to all other reimbursements from all other in network contracts to ensure that you are billing more than they are paying (if you bill less than the contracted amount, you will be paid the amount billed. If you bill more than the contracted amount you will be paid the contracted amount.) Next, you ascertain how much your competition is charging for the same service and finally you figure out how much money is needed to keep the doors open. From all these factors a fee schedule is created.

A final piece to remember is that in medicine the worth of a practice, hospital, or urgent care is based on its Accounts Receivables. In Medicine, A/R is the charges billed, not the monies received. If charges are high, then the A/R is high. This means that conceivably the A/R amount will be coming into the business.

What happens to the poor schlub who’s out of network, or worse, lacks insurance? Is the $427 from rare patients like that –who pay 20x what Blue Cross pays– accounting for more than 100% of the center’s profits?

In terms of the out-of- network patient or the patient without insurance, their overall patient responsibility will be higher based on the higher charge. However, in today’s high premium/high deductible atmosphere few patients seek out out-of-network or cash payments. Straight out-of-network/cash patients do not financially support a medical facility, unless that facility’s business model is set up as such. In this case, the Urgent Care is set up on an Insurance Reimbursement Model.

If a medical facility so chooses, they can institute a policy where by out-of-network or cash patients pay a discounted rate, as long as the discount is given to each patient.

Is what I see on the EoB actually the economic reality behind the transaction? Or is BI or my wife’s BI practice being paid a capitated amount for her care and is this bill only meaningful for calculating our cost?

The charge listed on the EOB is the fee that the practice has determined is the equitable amount of money it should receive for the service provided. The reimbursement from the Insurance Company is the amount of money that it is willing to pay for the service rendered. Each insurance company has its own fee schedule, so the charge has to be high enough to ensure payment from each company for each service rendered (see answer question 1).

As a matter of practice most medical facilities will have a 30-40% write-off from what was paid to what was billed.

This is not a capitated amount. Capitation is a set amount of money paid lump sum to a provider for the overall care of a patient. An urgent care facility would not receive capitation payments since it caters to emergency one time only patients and does not cover a full episode of care.

What is a patient who’s interested in “transparency” and “cost effectiveness” supposed to think? Did we do the right thing by going to urgent care or not? I think it would have been a lot more useful to see a comparison between the actual urgent care visit cost and a hypothetical visit to the ER or physician office.

You are correct, the information from the EOB does not allow you to compare to any other facility. Transparency is defined as the medical facility notifying the patient of the charge for the procedure. I would not compare my price to my competitor since my goal is to get your business, nor would I give out my fee schedule to any other provider for the same reason.

There is no hypothetical visit as each medical facility would have its own charge and each facility will have its own contracted rate, thus there could never be apples to apples comparison.

I understand that on the surface the difference between the charge and the fee seem in-congruent, but you have to remember you are looking at one small piece of a very large financial picture. Another patient with the same procedure may have an insurance company that reimburses that charge at 66% and yet another patient’s insurance company reimburses at 80%. Fee schedules are created to ensure that all reimbursement possible is captured.

Obamacare Repealed and Replaced

At first I thought Obamacare would never become law.

I was wrong.

Then I decided, OK, we have this mess, but it will never make it.

Wrong again.

Sort of.

Almost 7 years of this mess and now I feel almost certain Obamacare will be repealed and replaced. It has to happen no matter who moves into the public housing unit on Pennsylvania Ave next year. Obamacare is collapsing under its' own weight (which I also predicted).

So what will replace it?

Here's what they haven't been saying so loudly: They're making scads of money from Obamacare — so much that almost universally, they're expanding their participation. 

What's the catch? The big profits have come not from the insurance exchanges, but via the ACA's Medicaid expansion, in which the largest insurers have been playing a major role. The same insurance executives who go out of their way to badmouth the ACA's individual exchange plans talk as though they can't get enough of the Medicaid business, especially its managed care component. - LA Times

Obamacare will be replaced by Medicaid for all.

You heard it here first.


#ObamacareFail #MedicaidForAll

Nice, but "D'Uh!"

Pretty much been the plan all along:

"MLR provision causing ‘disincentive’ to sell health insurance"

So says Palmetto State Senator Tim Scott.

He's referring to the elimination of commissions for agents.

And he gets at best partial credit.

Why?

Because we already know that MLR has nothing to do with why commissions aren't being paid now, during the off-season. We can only speculate as to whether they'll return in the fall.

Time will tell.

Stupid Premier Health Tricks (Part 2)

As noted previously, Premier Health Plans has an unnecessarily confusing and, to be frank, barely functional web quoting system. To get a quote, one must enter the potential client's information as a "lead," which then leads one through a series of screens and tabs to enter basic info. Everything is keyed off the client's email, which, once entered, is immutable.

As is the client's name.

I found this out after trying - unsuccessfully - for three days to sell a plan. I almost got through this morning when I was able to log in, and get through most of the screens, but came up short on the enrollment one because I had entered "Geoff" instead of "Jeff," and it wouldn't let me change that spelling. Since I'd already used his email address, and needed to start over (a 3rd time!), I set up a new account in his name at one of those free-mail sites.

That accomplished, I logged back in and was - finally! - able to complete the application.

I cannot say enough bad things about this carrier's quoting and enrollment system. For one thing, once a "lead" is saved, there's no (obvious) method for deleting it. Second, there's no way to change those email addresses without contacting tech support. Which I tried to do (twice!) this morning with no success.

Heckuva way to run a railroad.

Insurance GIGO

That's an old computer term meaning "Garbage In, Garbage Out;" that is, if your program or data is faulty, the results you get are going to be unreliable. And it seems that a bunch of us aren't quite getting that message:

"Half of Insurance Shoppers Giving Inaccurate Information"

Turns out that, in a recent survey at one of those insurance quoting sites, over 50% of the folks gave erroneous info. It's not clear whether that was inadvertent or deliberate, of course, but if you're giving the wrong answers, you're going to get useless quotes.

The site itself offers quotes across multiple lines of coverage, including home and auto.

Is this the end of the world? Of course not, but what it means to those giving inaccurate answers is that they're going to be waiting in line a bit longer, and their purchasing decision just got slower and more difficult.

Exit question: why would someone go to the trouble of requesting a quote and then provide bogus data? I just don't get it.

Fee for Service Insurance

So, with more and more carriers cutting health insurance commissions, the idea of a fee-based model becomes more and more attractive. Here in The Buckeye State, we're allowed to do so, with some caveats [ed: those in any of the other 57 states should consult their Department of Insurance]. Since I'm basically cheap frugal, I was hoping that my good friends at Cornerstone would be able to provide guidance (vice me paying mega-$$'s to my attorney).

And yesterday I was pleasantly rewarded (but not surprised - they are first-rate); it occurred to me that it might be interesting to share some of what I learned, particularly as it seems to be the wave of the future, and I know a lot of our readers are also consumers with a horse in this race.

So, some basic info:

As noted above, Ohio agents may charge a fee when selling health insurance. Almost counter-intuitively, it may not be offset by any commissions that are ultimately paid (I'll circle back to that). Further, one can't discriminate regarding protected classes; that is, one can't charge different fees based on a customer's race or sex, etc. One may discriminate between current and new clients, though.

The next challenge is determining the amount and frequency of that fee. In reverse order: one must decide whether this is a one-off, or annual (recurring, such as during Open Enrollment). One must also determine on what it's based: a flat dollar amount or some percentage of premium. By far the most rational and effective is the flat amount method (for a variety of reasons).

The hardest part, of course, is determining the size of that fee: too much, and one's priced oneself out of the market; not enough, and one's both undervaluing oneself and risking a potentially crushing workload with little to show for it.

Quite the conundrum, and one I'm still noodling through.

There are also various disclosure requirements: basically, one has to tell folks upfront that one charges a fee (and how much, etc), and cannot offer to refund any part of it based on the completion of a sale or any commissions. This makes sense: anything that looks like rebating most likely is rebating (and thus verboten).

So, that's the big picture, and I'm still wrestling with how and when (maybe even if) to implement it. The good news is that Cornerstone has graciously (and generously) shared their disclosure and other forms so that, once I've figured out my end, it's pretty turn-key.

Interesting times ahead.

Frustrating Carrier Tricks: Premier Health edition

One of our local hospital chains recently (last couple of years) set up its own health insurance company. As is typical with these kinds of plans, they use the HMO model, which means that, with a few very rare exceptions, there's no coverage at all for out-of-network care. I'm not generally a fan of these, but I've written a couple cases when clients have insisted.

Adding to my dislike for the carrier, they use a convoluted quoting/application system that is far from intuitive, and buggy to boot.

Case in point:

A very nice young man was referred to me by his father. We looked at various options, and he selected a Premier Health plan. So he came by the office yesterday, and we signed on to sign him up.

Almost an hour later, we were no further along than when we'd started. I even referred to the detailed instructions that they'd sent along; unfortunately, the screens in the instructions didn't match those showing up in real life. We finally gave up, and I called my service rep for help. It's now well over 24 hours later, and she was unable to get this case to work, either, even after speaking with tech support.

Now, I have written a couple cases with them, so I know that (at least at one point in the not-too-distant past) it was possible to do so. Why they've decided to make the process even more arduous and customer-unfriendly remains a mystery.

Shame on you, Premier Health Plan.

Speaking of (ObamaCare) Spikes

"If you like your plan..." Wait, what?

[Hat Tip: Larry Levitt]

Tuesday LinkFest

■ Believe it or not, the 404Care.gov site isn't the only fraudulent thing that affects our financial and personal health. Robert Malove has a very interesting, exhaustive post on how healthcare fraud harms pretty much everyone, directly or indirectly.

For instance:

"Fraudulent Practice #1: Upcoding ... when a service is provided or a diagnosis is made, but the provider bills insurance for a more expensive service"

And there's plenty more.

■ We've blogged before about the Fitbit (and similar devices), but generally focused on who owns the data and how it is used. Here's a story about how one man's Fitbit saved his life:

"[A] 42-year-old man who went to the emergency room ... immediately following a seizure, the data tracked on his Fitbit helped inform doctors of the appropriate course of action to take to save his life."

No word yet on whether or not he made his step goal that day.

■ And we've also posted on marriage's impact on buying (and paying for) health insurance, but here's an interesting twist, courtesy of the folks at HotAir:

"Several studies have found that being married improves survival in cancer patients"

It's been said that married men don't necessarily live longer, it just seems longer, but this study appears to contradict that.

Wonky Blabermouths

But in a very nice way:

Join David Harlow, Joe Paduda and special guest stars for this week's vidcast highlighting select posts from last week's outstanding Health Wonk Review. Tune it at 1:00PM (Eastern) this afternoon for a rollicking good time.

Exchange (In)Security Alert

We've long chronicled the terrible security hole that is the ObamaTax Marketplace (most recently here). But wait, it gets better worse:

"Federal investigators found significant cybersecurity weaknesses in the health insurance websites of California, Kentucky and Vermont that could enable hackers to get their hands on sensitive personal information about hundreds of thousands of people"

So it's not just the Federales with the gaping hole where their cybersecurity should be. It's also interesting [ed: and by "interesting" we mean "frightening"] that the Government Accountability Office actually found these flaws last Fall, but we're only learning of them now, some six months later.

But never fear, our intrepid ObamaTax CyberCop Task Force is on the job!

Or maybe not:

"[G]iven the number of weaknesses they discovered in just the three states studied, other state-run health insurance exchanges could be vulnerable, too"

Oy.

Oh, how big a deal is this, you may be wondering?

Well, how about this:

"[O]ne state did not encrypt passwords ... One state did not properly use a filter to block hostile attempts to visit the website ... one state did not use the proper encryption on its servers, making it easier for hackers to get in"

These are all computer security 101 level things; heck, it's hard to even set up a new cell phone without all of these in place.

The good news is that newly elected Blue Grass State Governor Blevin is already hard at work dismantling his state's ill-conceived and poorly designed Exchange. Perhaps others will file suit. Of course, this will put even more pressure on the Fed's to clean up their act.

Nah, that's a sucker bet.

More bad news about Obamacare Co-Ops - Part CCIX

“Eight of the 11 remaining Obamacare health insurance co-ops appear likely to fail this year”

Read the whole article.  You’ll be better informed – if a bit disgusted – if you do.

This means that by the end of 2016, only one or two of the original 23 non-profit health insurance providers is likely to survive.  These are the organizations Obama promised would make for-profit insurers reduce prices and improve services.  Another promise not delivered.

These co-ops were sold to a credulous (Jonathan Gruber said "gullible") American public who still very much want to believe that the reason for high medical insurance premiums is (a) excessive insurance company profits and (b) greedy, overpaid insurance executives.

But no one who understands why insurance premiums are high can be one bit surprised at these co-op failures. The co-ops, like Obamacare itself, stand on a fundamental, fatal flaw: they address a symptom of the problem (high medical insurance cost) as though it were the disease itself (high medical care cost). As Nipsy Russell might have observed, the Obama administration's health policy is running thru Hell in gasoline pants.

None of us would willingly visit a physician who treated only symptoms and ignored real ailments. But that is exactly what the people behind Obamacare - and these failed co-ops - have been telling us to do for the last 7 years.

As a result, the ailment has worsened, and we are not only sicker, but poorer for it.

Sci-Fi insurance

About 4 years ago, we blogged on the (fictional) financial impact of the Avengers' New York battle. That post looked at how all the damage inflicted by the various superheroes and supervillains might be covered by insurance. It's the only instance we've seen combining science fiction and insurance.

Until now:

"Rifts happen, so you should be ready when universes collide. A policy with Stranger & Stranger can cover all of your interdimensional insurance needs. Rated “Number One in Customer Satisfaction” for three years running, no claim is too big or too weird for Tom Stranger to handle."

That's right, an interdimensional insurance agency (think Dirk Gently, CPCU).

It's an audiobook, and (perhaps best of all) it's currently free for those who pre-order.

Sweet!

[Hat Tip: Ace of Spades]

Medical Tourism Gone (Horribly) Wrong

It's been a while since we've covered Medical Tourism, but this one's a doozy.

For folks just tuning in, Medical Tourism is (basically) leaving one's home country to obtain care, often surgery or dental work, in another country where costs are lower. Unfortunately, he learned the hard way that "you get what you pay for:"

"Australian man dies days after traveling to Malaysia for cheaper plastic surgery"

Seems that 31 year old Leigh Aiple had traveled to Malaysia for a "tummy tuck, liposuction, an upper eye lift" and other appearance enhancements. What he got, though, was  "gaping holes, there was stitching everywhere."

How's that saying go? Oh, yeah.

Preezy-free Health Wonk Review

Our good friend Jaan Sidorov hosts this week's compilation of wonky links, blissfully free of primary-related politics. What it does have is great info on O'Care signups, Apple CareKits, and the fate of HSA's. Good stuff.

HSA Death Knell: Premature?

Earlier this week, I blogged on a National Review article that predicted the imminent demise of HSA's (Health Savings Accounts). I agreed with Mr Ramthun's conclusion (although not with many of his theses in support of it).

Our good friend and colleague Louise Norris does not, and offers some compelling insights into why she disagrees, and some helpful stats to back them up.

Recommended.

Hey DOI, Where'$ The Money?

Insurance agents make their living from the commissions that they earn on policies they sell. Those commissions are "baked into the cake;" that is, they're already included in the premium (except for certain group plans that are essentially fee-based). Some commissions are calculated as a percentage of the premium, others are a flat amount. Until recently (past 3 or 4 years), individual health insurance almost always used the percentage of premium model; that changed and most (all?) now pay a flat fee.

The key point to keep in mind is that the commissions are already included in the premiums, which are filed with and approved (or not) by the 58 state Departments of Insurance.

Come now carriers that have decreed that they will no longer pay those commissions (at least on plans written between Open Enrollment seasons), and the question arises: what happens to those commission dollars?

If you answered "well, since the agent's not getting them, then the consumer must be" you'd be wrong. Sure, it makes sense, but that's not what's happened. Instead, the carriers are keeping these dollars allegedly to offset other costs. But they'd already (ostensibly) calculated those costs, and priced their products accordingly. So in reality, this is just pure profit for the carrier.

But Henry, you may note, if that's true, then why isn't the Department of Insurance stepping in and making them reimburse that excess back to the policyholders?

Good question, and one I decided some months ago to pursue. I reached out to my own state's Department of Insurance seeking an answer.

Multiple times, with no response.

Finally, frustrated, I contacted every state representative and senator associated with my zip code, as well as the chairman of the Insurance Committee, asking them for assistance.

To his credit, and all the others' shame, only State Representative Niraj Antani replied. He (like his colleagues) was unaware of the conflict, and agreed to look into it.

Which he did, relentlessly. Over the course of several months he reached out to the Department of Insurance (DOI). I don't know that they're connected, but it was after Rep Antani began his quest that I finally received an answer from the DOI; unfortunately, they answered only a few of my questions, completely ignoring the most important one: where's the money going?

[ed: For those interested, I've posted the letter here]

Eventually, Rep Antani got an answer from the DOI's Deputy Director, who told him that she was aware of the issue, but that the rates were already filed and couldn't be changed at this time. Which is nice and all, but irrelevant: no one's asking Anthem (for example) to change their rates, only to refund to consumers the amount that should have been paid out as commissions. She also said that the Department has no power to "compel" carriers to do so.

Hunh.

Seems like government agencies have a lot of power to force other industries to toe the line, just not insurance? Interesting.

So here's where we are: carriers priced commissions into their rates and aren't paying them to agents or reimbursing them to their insureds. And from the media? /crickets. I know that Rep Antani also broached this to the Ohio Consumers Council folks, but that seems to have gained no traction.

Why isn't this a bigger issue, especially in an election year? One would think that it's custom-tailored for state and national candidates: most folks have to buy insurance, and here's a very obvious, and easily fixed, rip-off.

Well?

[Special IB thanks to Rep Antani and Lindsay S]

HSA's in the Crosshairs

Apparently, Health Savings Accounts (HSAs) - or at least some versions of them - died last month:

"[F]inal regulations published on March 8 will make it impossible to offer HSA-qualified plans in the future"

Seems provocative, but is there any "there, there?"

Maybe, but it's not that simple:

"HHS stated that HSA eligibility was not a meaningful distinction for health plans because consumers can determine whether a plan is HSA-qualified by examining a plan’s cost-sharing amounts. So, it will not require HSA-qualified plans to be designated as such."

The term of art which used to denote HSA-compliant plans is "High Deductible Health Plan" (HDHP). With Bronze level ObamaPlans touting $6,000+ individual deductibles, though, this seems a distinction without a difference: why is this $6000 deductible plan HSA-compliant, and that one not? Seems silly.

So where's the beef?

The linked article points to two requirements that (allegedly) sound the HSA death-knell:

"1) Plans must apply specific deductibles and out-of-pocket limits that are outside the requirements for HSA-qualified plans.

2) Plans must cover services below the deductible that are not considered “preventive care.”

Let's unpack these, shall we?

As to the first, the article anticipates that no 2017 Gold, Silver or Bronze plan designs will likely meet HSA plan requirements. But it admits that these requirements aren't even determined yet. Funny, but my Ouija board lacks dollar signs.

The article then goes on to note that the 2017 Bronze level deductible will be $6,650, while the max allowable HSA deductible is $100 less.

Um, so? Easy fix: adjust the HSA plan requirements. If they can make up additional sub-deductible requirements out of whole cloth, seems like there's no obstacle to adjusting the HSA requirements.

As to the second issue: in order to make ObamaPlans more "attractive to consumers" (yeah, I couldn't keep a straight face typing that, either), HHS is throwing another boatload of "freebies" into the first dollar coverage area. These include non-preventive benefits that are specifically prohibited in HSA plans.

Now that does seem pretty dispositive: they've basically set up a can't-win scenario for HSA's. Are there fixes for this? Sure: just exempt HSA plans from the requirement.

Will they do this?

I have to go with the article's author on this: No.

Someone asked me recently why the government would seek to phase out HSA plans, and I think it's a very simple calculus:

First, money inside the cash account is tax deductible and tax advantaged, which means fewer dollars for Uncle Sugar. Can't have that, don'tcha know.

And I think there's a second, more insidious reason: folks attracted to HSA's tend to be those with good planning and financial acumen, who want more control over their health, and fewer dollars to the government and its lackeys insurance companies.

Want proof of the latter?

Then ask yourself this: if the Bureauweenies in DC© really wanted to enable us to be more self-regulating, why not make all plans HSA-compliant? That is, anyone with any plan can set up and contribute to an HSA.

Fat chance, I know.

[Hat Tip: Ace of Spades]

In$ult to Injury

So this came in the morning email:

"Under OH law, insurance carriers are required to pay an appointment renewal fee of $45 every year for their active appointed agents. Under the agent agreement, Anthem is permitted to pass the cost of the appointment renewal fee ... on to the agent. To remain appointed with us for 2016, please use the link below to process your payment ... May 04, 2016"

So not only do we get stiffed on commissions, we get to pay for the privilege.

Classy move, Anthem.

Monday O'Care news

■ California dreamin' - of health insurance:

"A number of people who have signed up for Covered California coverage have been dumped from their plans unexpectedly, without explanation — even though their premium payments were up to date."

Ooops.

Turns out, and you may want to sit down for this one, neither Golden State bureauweenies nor the Rocket Surgeons at Blue Cross have any clue as to why this is happening. To make matters worse, said bureauweenies have no idea how many folks have been affected by this, or even if it extends to other carriers.

Warm fuzzies, no?

■ Pioneer insurance nightmare (courtesy FoIB Jeff M):

"Pioneer Health Services, the parent company of Pioneer Community Hospital of Stokes County, has filed for Chapter 11 bankruptcy."

Pioneer serves the Magnolia State's rural market, and includes a handful of hospitals. At present, they've kept the doors to those facilities open.

For now.

■ Something new for followers/fans of the Health Wonk Review: Joe, Julie and the crew have set up a half-hour vidcast highlighting posts that really piqued their interest. The pilot version is available here (should be playable through your browser, but there's also a smartphone/tablet app available), covering the most recent edition.

IRS vs [REDACTED]

As we've mentioned over and over (and over) again, these nifty little "schemes" that purport to enable employers to pay for their employees' individual health plans through various twists, trusts and tricks just don't fly. We've cited the opinions of our own experts, as well as other sources.

But apparently the folks pushing them persist.

Perhaps this will at least slow them down (although I'm not holding my breath):

[click to embiggen]

'Nuff said?

[Hat Tip: Cornerstone]

Fridays 1,000 Words on O'Care

Courtesy of FoIB Holly R:

Cutting edge insurance cover

Don't miss the disclaimer at the end....

Friday Health Links

■ Bwahahaha!

"Long term vegetarianism can lead to genetic mutations which raise the risk of heart disease and cancer, scientists have found."

Pretty much says it all, no?

■ FoIB Holly R alerts us to a Cincinnati-area company that's developed some rather promising new tech:

"Aprecia Pharmaceuticals are making a strong pitch with doctors ... launched production last week of its 3D printed pill, the first such pill approved by the FDA."

The med in question is used to treat epilepsy; the primary advantage to using the 3D tech seems to be better disolvability, although one would think that lower manufacturing costs must play a role, as well.

■ And speaking of 3D printing tech; It's widely believed (understood?) that one's attitude can have a very real affect on how a disease progresses. A Detroit hospital is taking that idea one step further:

"Cancer patients at a Detroit hospital can now take out their aggression on their disease— with a sledgehammer"

Click on through to read how they did that.