Turnabout as Fair Play: Guest Blogging Elsewhere [UPDATED]

Over the years, we've had the privilege of some really terrific guest bloggers. Recently, I was asked by John Power, of the Insurance And Annuities blog, to pen an essay on the recent collapse of Penn-Treaty, and how it affects my fellow Buckeyes.

PT wasn't exactly a major player in the Ohio Long Term Care insurance market, but this case illustrates the value of state guaranty funds. If you're interested, click here to see the post.

UPDATE: Got this in email from the LifeHappens folks:

"Even as the average annual cost of a home health aide now tops more than $40,000 and private nursing home care is approaching an average cost of $75,000 a year, a new survey by the nonprofit LIFE Foundation finds nine out of 10 Americans do not have a realistic plan to pay for these expenses."

Those are some pretty hefty numbers; if you're curious about how much LTC runs in your neck of the woods, you can click here for their cost estimator tool.

Medical Tourism Update: Hold the Plane!

Despite the efforts of some carriers to promote so-called "medical tourism," the floundering economy is taking its toll on the nascent industry. Today's McPaper reports on a study "by the Deloitte Center for Health Solutions, a research center focused on trends in the health care system":

"From 2007 to 2009, the number of Americans traveling abroad for elective medical procedures is expected to have fallen as much as 13.6%"

That's quite a drop in such a short period. Of course, it's kind of a double-bind: folks look to overseas providers in order to save money on health care costs, but find that any savings is offset by incrweased travel costs and decreased assets.

Of course, this may be just a short-term hit; if and/or when the economy rebounds, one would expect that these folks will once again find that traveling abroad for certain procedures is a net savings. Indeed, the Center expects that "the number of American medical tourists will rise by 35% each year through 2012," due to "[p]ent-up demand and improvements in international medical care."

My Magic 8-Ball (on loan from Bob), though, says "Maybe."

Carnival of Personal Finance now online

This week's Carnival of Personal Finance is hosted by Revanche at the Gai Shan Life blog. This edition is chock full of amusing (and on-target) finance-related webcomics.

This Sceptered Isle, Part LXVI

There's been another distressing report from the Telegraph of London regarding hospital trust mismanagement within UK’s National Health System.

As if the news is not bad enough on its face, scroll down to the 13th paragraph to read this:

“Ratings given to hospitals rely on their own assessment of their performance.”

What could POSSIBLY go wrong?

Well, management malfeasance, for one: “At Basildon Hospital, managers gave themselves 13 out of a 14 possible marks for safety and cleanliness. The ratings were published just weeks before the damning inspection report was drawn up.”

Previous reports of problems at Basildon are linked here and here.

However, it is clear that Basildon is not some isolated, one-off failure in a sound system.

The linked articles also report that disclosures such as these are harming the public trust in NHS. Gee, ya think?

These are not simply management failures, but are governance failures within the NHS model. They show NHS is seriously at risk to incompetence, indifference, and lack of public accountability that are so prevalent in government bureaucracies.

Health Insurance: Moral Imperative or Risk Management?

Power Line's Paul Mirengoff takes conservative pundit Charles Krauthammer to school regarding the latter's assertion that "[i]nsuring the uninsured is a moral imperative." Paul's thesis is that, while this is a lofty goal, it doesn't rise to quite that level. I would suggest that the serious student of this debate read Paul's post in its entirety; I have a sympathetic, but slightly different, take.

There is, surprisingly, little to be found on the web viz: defining a "moral imperative." Wikipedia identifies it with the work of Immanual Kant, defining it as "a principle originating inside a person's mind that compels that person to act." I find this to be wholly unsatisfying: what differentiates this from any other urge? What, in fact, is the moral dimension to this definition?

I would argue that morality has no place in the lexicon of "insurance." Over time, we've re-defined the nature and purpose of insurance away from its primary use as a tool to help us manage, and perhaps mitigate, risks, and toward the funding of routine items. Take, for example, one of Bob's favorite aphorisms: how much would auto insurance cost if it covered wiper blades and oil changes? Of course these are properly identified as ordinary and expected "wear and tear;" the true purpose should be to protect us from losing our assets if, for example, we're responsible for a major accident with serious injuries or even loss of life.

Health insurance is similar to auto insurance only in that it is rooted in the same underlying principle: indemnity. In this case, "indemnity" means "to make whole." That is, to put us back, financially, as closely as possible to our condition pre-accident. In the case of health insurance, it means to protect our assets if we face an expensive course of treatment (for example). No one confuses auto insurance with the actual vehicle. Unfortunately, it's become fashionable to conflate health insurance with the actual care received.

And thus, the idea that providing everyone with health insurance is somehow a moral imperative: some folks believe that our ethics require that we provide everyone with insurance because then everyone has access to health care.

But this is a false conclusion, based on a faulty premise: no one in this country is denied health care based on economics (and when they are denied care, it's a big deal). It's true that some folks have access to (arguably) better health care, but that's not the same thing. We take it as a given that we should all have access to food and shelter, as well; some folks live in mansions, and others in homeless shelters. Do we have a moral obligation (imperative) to give everyone in a shelter a new home? Likewise, some folks eat at fancy restaurants, while others shop at Aldi's. Are we obligated to provide the latter with steak every evening?

Some time ago, our own Mike Feehan (commenting under a pseudonym) proposed a "national, single-grocer plan." It's well worth re-reading that gem, because it offers an excellent insight into why health insurance is no more "morally imperative" than groceries.

There may well be solid economic arguments supporting the principle of "universal coverage" (although I have yet to see a convincing one), but there is no "moral" argument to be made.

This Sceptered Isle - Part LXV

An interesting suggestion floated yesterday in U.K: when a hospital fails this badly the staff should no longer work for NHS, but instead be transferred to a private contractor employed by NHS.

That's change I could believe in.

Incidents like this seem to have more people over there wondering if NHS is broken.

I don't think it's "broken" so much as the model itself is so deeply flawed it cannot be sustained. IMO, a health care system like NHS is no bargain at any price.

The Public Be Damned - or, Not

Ideas such as this are understandably seductive:

The government will enact reforms that offer everybody unimpeded access to health care at affordable personal cost, will not increase public debt, and will not result in higher taxes.

This statement leaves out some vital information that most people know – but prefer to ignore. Let’s include that information:

Our government, led by corrupt or greedy politicians who accept campaign contributions from corrupt or greedy health care organizations (i.e., pharmaceutical companies, insurance companies, legal and medical lobbyists, etc) will actually force these very organizations to reform their businesses in ways they refuse to do on their own. These reforms will work to the public's advantage rather than to the advantage of the corrupt or greedy politicians or to the advantage of the corrupt or greedy organizations who contributed all that campaign money to the politicians. After the reforms are in place, their financing will - astonishingly - be found inadequate, despite all the “savings” that were invented to limit taxes to pay for the reforms. Too late now to do anything about it but borrow huge sums, increase the public debt, and impose more taxes. Another government boondoggle is born.

If you have marveled at how brazenly Congress ignores the peoples’ voice in the evolving “debate” over health care – beginning with the arrogant, closed-mindedness that became clear during the “town hall” meetings in August – think about the preceding paragraph.

What Congress is doing is just not all that marvelous. It’s only politics as usual.
And, as usual, the public be damned . . . unless . . . unless we make a LOT of noise.

If what Congress is doing worries you, then you are already in the majority of Americans. Think seriously about doing more to tell your Senators what YOU think. If there is enough noise outside their windows they may look to see what the public really thinks before voting on the Senate Bill.

Cavalcade of Risk #93: Call for Submissions

Nancy at Insurance Copywriter hosts next week's Cavalcade of Risk. Submissions are due this Monday (November 30th); please include:

■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post

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

You can submit your post via Blog Carnival or email.

Something Freezes Over: ObamaCare, Children Hardest Hit

There's little I can add to this insightful commentary by erstwhile Presidential candidate and spokesdoctor for the DNC:



While I obviously disagree with his prescription, we're in total agreement that ObamaCare is deeply flawed.

[Hat Tip: Say Anything blog]

This Sceptered Isle Part LXIV

Hundreds of patients may have died needlessly at an NHS hospital due to appalling standards of care, a damning report has found.

Well, OK, we’ve seen this kind of NHS report before. They are not less dismaying because they are frequent.

But this article notes additional outrages that are less often articulated, yet are so worth facing: the indifference to urgent problems and the lack of accountability, that are displayed by the NHS bureaucracy.

You’ll need to scroll well down into the article to find these paragraphs:

“Concerns about standards at Basildon were raised as long ago as 2001, when the Royal College of Nursing described conditions there as "third world" . . .

“Katherine Murphy, director of the Patients Association said . . . "We’re sick and tired of NHS managers and senior staff walking away unscathed when families are left with a life sentence of grief.”

These problems were identified 9 YEARS AGO? The NHS bureaucrats who let them persist might walk away "unscathed"? This is no utopian dream, it is a hellish nightmare. Yes, the UK Hell is an inexpensive Hell - if government Hell on the cheap turns you on.

I have seen no evidence or reason to believe that Americans won’t also experience the same kind of bureaucratic indifference to urgent problems and lack of accountability, after our government takes over the American health care system. I fear for my children and for my grandchildren.

As Zed remarked to J, "Sucks, don't it?"

A Special Thanksgiving Post

This year, we're participating in the 2nd Annual Thanksgiving Blog Rally for the Engage With Grace One Slide Project. The project's goal is to "find a simple way to encourage families to talk about their wishes for care in an advanced illness."

We'd like to encourage our readers to take a moment between second helpings, and second quarters, to give some thought to this important (and often neglected) issue.

And for a lighter look at Thanksgiving, this classic:

May your Thanksgiving be filled with joy, family and love.

Joe W was Right!

When Rep Joe Wilson (R-SC) called out PresBo regarding coverage for illegal aliens, he was castigated for his breach of etiquette. While that may or may not have been correct, the substance of his brief critique was apparently spot on:

"H.R. 3962 would deliberately permit illegal aliens to participate in the government health insurance exchange and in the public option insurance program."

In the current parlance, those pushing to "reform" our system consider this a feature, not a bug. The bill actually goes further than just rewarding folks who illegally enter our country, it encourages them to do so:

"All illegal immigrant women who do not have private health insurance and who give birth inside the United States will have the full cost of childbirth paid by the U.S. taxpayers."

And they'll not be required to repay thee and me, ever. Contrast this to how we "reward" seniors who need long term care: first, they must "spend down" their life's savings in order to become eligible for Medicaid. After they pass away, the state then takes their remaining assets in order to repay itself (or, rather, the taxpayer) for having done so.

In short, ObamaCare would treat those who are here illegally far better than our legal seniors. What's wrong with this picture?

The Public Be Damned

Here’s an excerpt from a recent poll conducted by the Robert Wood Johnson Foundation:

"Asked how the health care overhaul would affect their own access to medical care, 57 percent said it would stay the same. Similarly, 61 percent said their personal financial situation would stay about the same."

"Among those who do expect a change, 28 percent said they thought their access to care would get worse, while 15 percent said they thought it would improve. On finances, 27 percent said they thought the health care bill would make them worse off financially, while 12 percent expected an improvement."

Somebody check my arithmetic - I think this says that 68% expect no effect or a negative effect on their own access to care and 72% expect no effect or a negative effect on their personal finances. What kind of “overhaul” is that?

I think these results suggest it’s unlikely that there is in fact some widespread groundswell of public support for the House or Senate health care bills. People just don’t get enthusiastic over nothing or less than nothing. Yet the President, Nancy Pelosi, Harry Reid, and their minions all claim they have overwhelming public support. What voices are they listening to?

I think it’s clear they are NOT listening to the public's voice.

They got an earful during the August recess - and ignored it.

And since August, polls show public support for the proposed health care overhaul has eroded, week by week. A few days ago, Rasmussen found that 56% of the public now opposes the plans in the House and Senate, and only 38% approve.

Americans still support reform of the health care system, but we aren’t buying the present House and Senate overhaul proposals. I think that’s because the true cost of the plans can’t be papered over any more. As the truth emerges about the staggering cost, more and more people realize that these proposals will significantly expand government spending, grow the deficit, and become a tax burden for us and our children and our children’s children. So the longer this “debate” goes on, the less public support there is for the overhaul proposals in the House and Senate. Rasmussen says

"63% of voters agreed with the president earlier this year when he said, “We must make it a priority to give every single American quality affordable health care.” Yet while they agree in theory, only 28% are currently willing to pay higher taxes to achieve that goal."

And are the House and Senate listening? No. Their leadership remains stubbornly intent on ramming a final bill through Congress despite the rapidly eroding public support. And, despite the very serious flaws in the current House and Senate Bills, despite the flaky and frankly bogus financial promises that these bills will not increase the deficit or taxes, and despite the serious economic troubles the nation faces.

So here’s how I see it: we have a runaway Congress. The House and Senate leadership long ago decided what it intends to do, and is now doing it. The public be damned.

Suicide Insurance? Setting the Record Straight [Updated & Bumped]

PoliBlogger Michelle Malkin has an update on a tragic story from September; news junkies may recall that a census worker was found dead, apparently hung. On his stomach was scrawled the word "Fed," leading many to believe that this was a cold-blooded murder. Suspicion fell on moonshiners and "rednecks," but there was scant evidence to support either of these theories (among others).

According to new information released by the authorities, it appears that this may well have been an elaborately staged suicide, the point of which was to leave the proceeds of a life insurance policy to the victim's son. Unfortunately, the news reports cited by Ms Malkin leave much to be desired vis: suicide and life insurance.

For example:

"Life insurance policies typically do not cover suicides within a certain time period after the policy begins."

Correct, to a point.

And:

"“If it’s deemed suicide, there’s no point in even looking at insurance,” the son said. “There’s no such thing as suicide insurance."

Again, correct - to a point.

Until just after the Great Depression [ed: what was so "great" about it?], suicide was excluded by life insurance policies. There was, it was thought, a very good reason for this: it would be against the public interest to encourage folks to kill themselves to enrich those left behind. And there's some validity to this: we don't want to make such an outcome attractive to people to leave an inheritance at the cost of one's own life.

But a lot of people who lost everything in the Depression killed themselves anyway; not for the insurance (there wouldn't be any) but out of desperation and despondence. And this left behind a lot of widows and children who lost a parent and a spouse along with their life's savings. This was also against the public interest.

So, how to reconcile these two seemingly irreconcilable principles?

New laws were enacted that required life insurance policies to cover suicide after a "reasonable" period ("reasonable" in this case meaning no more than two years). The premise is that no sane person is going to buy a policy with the intent of waiting two years to jump out a window; that a person would do this was ample demonstration of mental illness, and that would be a covered exposure. This protects the interests of innocent family members, while still discouraging a casual view of suicide.

So no, there is no "suicide insurance;" but that was never really the point in the first place.

UPDATE: It's now official:

"A Kentucky census worker found hanging from a tree with the word "fed" written on his chest killed himself and staged his death to look like a murder, authorities said Tuesday."

Turns out, he had recently purchased not one, but two new life insurance policies on himself; the amount at risk has not been disclosed.

This is truly a tragedy: any time someone takes his (or her) own life it leaves behind unanswered questions and leaves grieving families without closure. It's just a shame that some chose to exploit this particular situation for their own political ends.

Counter-Intuitive: RWJF and IB Agree

With unemployment currently north of 10% (some would say significantly so), it seems odd that the left-leaning Robert Wood Johnson Foundation would find that "Americans’ confidence in their health insurance coverage and ability to access health care increased sharply in October ... The survey also found that fewer people are concerned about losing their coverage."

On the one hand, this is good (if not exactly surprising) news; as we've maintained all along, most folks are insured, and few actually lose their insurance. Many of those who do are eligible for various government-sponsored programs. Regardless, the RWJF reports that this recent spike "is the largest increase in the Future Health Cost Concerns Index since the survey began."

On the other hand, what to make of this assertion, coming on the heals of an acknowledgement that the current system, while imperfect, is doing fine: "Americans of every ideology know that our health care system needs to be fixed and want some type of reform." If the percentage of folks who are satisfied with the status quo is so great, then on what basis can this statement be supported?

Obviously, it can't.

Note: For more on this study, see Mike's post.

Grand Rounds: A Feast for the Mind...

Coping with Pain presents a pain-free (but quite filling) Thanksgiving week edition of Grand Rounds.

Helpful Carrier Trick: Aetna Edition

Starting next year, Aetna insureds will have access to a new, and potentially very useful, online tool. SmartSource connects an insured's "profile" (sex, age, any medical issues, etc) with a search engine that will kick out:

■ Local doctors and specialists who participate in the user’s Aetna health plan
■ Medications and treatment options
■ Estimated health care costs
■ Aetna programs and discounts associated with the health topic
■ Easy-to-understand health information and articles

And if that's not cool enough, how about their new HealthMap feature, a "visual guide to the member's search topics helps them see the full spectrum of their health topic (i.e. symptoms, tests, treatments, costs, prevention steps) in an easy-to-grasp graphic format."

Now, how soon until they connect the iTriage app to this?

The Individual Mandate is Evil [UPDATED]

The other day, I had breakfast with an old friend and mentor. In the course of discussing ObamaCare, he asked me which part I considered the most egregious. I think I surprised him when I said it wasn't coverage for abortions or illegal aliens, or even the so-called "Public Option" which most offended me.

It's the individual mandate.

Now, one might think that, because I sell insurance for a living, I'd be all for a law that required folks to buy what I sell. But I'm an American first, and I find this particular idea repugnant and, frankly, unAmerican. Here's why:

There is no precedent for requiring us to buy a product or service simply for living. There are those who argue, incorrectly, that we're required to buy automobile insurance. But they neglect to finish the sentence: "if one chooses to own and/or operate a car." Many folks go through life relying on public or alternate transportation, never having the need or requirement to buy auto insurance. But there are no choices here: simply being alive would require one to buy insurance.

Second, this is far beyond a slippery slope: if the government can require you to buy something you don't need or want, then it can require you to do anything. There simply is no limit.

Third, a friend of mine recently raised a First Amendment issue: what about those folks who, because of their religion, don't use medical services? Would Scientologists and the Amish (for example) be exempted from this requirement? If not, then they're paying for something that they cannot use due to their faith. This is a gross infringement on their 1st Amendment rights. If they are exempt, then how many folks will join (or claim to join) one of these faiths in order to avoid the mandate, and how would that square with its goals?

There is just no valid case to be made for such a law, and its adoption would be a very, very bad thing.

UPDATE: It appears that the most egregious penalties vis: the Individual Mandate have beentoned down in Dr Harry's version of ObamaCare:

‘‘(C) INDEXING OF AMOUNT.—In the case
5 of any calendar year beginning after 2017, the
6 applicable dollar amount shall be equal to $750,
7 increased by an amount equal to—
8 ‘‘(i) $750, multiplied by
9 ‘‘(ii) the cost-of-living adjustment de
10 termined under section 1(f)(3) for the cal
11 endar year, determined by substituting
12 ‘calendar year 2016’ for ‘calendar year
13 1992’ in subparagraph (B) thereof.
14 If the amount of any increase under clause (i)
15 is not a multiple of $50, such increase shall be
16 rounded to the next lowest multiple of $50."

In other words, a penalty far less than called for by Nurse Nancy's edition.

And it also appears that they've dropped the threat of jail-time:

"WAIVER OF CRIMINAL AND CIVIL PENALTIES AND INTEREST.
—In the case of any failure
12 by a taxpayer to timely pay any tax imposed by this
13 section—
14 ‘‘(A) such taxpayer shall not be subject to
15 any criminal prosecution or penalty with respect
16 to such failure,"

That subsection goes on to say that penalties will be that the gummint gets to keep any tax refunds, that kind of thing.

On the other hand, it will still be illegal to choose to be uninsured. So the principle that one will be required to buy insurance remains unchanged.

And here I thought these guys were pro-choice.

[Update Hat Tip: Ace of Spades]

Just What the Doctor Ordered...

Via RedState:

Stupid Carrier Tricks: Anthem Renewal Edition

One of my groups recently received their annual Anthem renewal. They've been with that carrier for several years, absorbing a number of rate increases because, based on demographics and health, it still beat the new business offers from the other carriers. This time, though, Anthem threw in a little twist, one which I inadvertently missed for a bit.

Generally, a renewal quote will include a recap of the current plan design and premium, and the new rates for that plan design. This is standard, and well-accepted. Where a particular plan design is no longer offered, the closest "new" design is substituted, and there's a notation to that effect.

Not this time.

The underlying medical plan didn't change (much), but instead of prescription plan "x" they subbed in plan "z," without noting the substitution. The renewal rate, even with the lesser benefit plan, was 29% higher than last year. Definitely time to shop again.

This was both easier and harder than last time 'round: harder because, as we've noted before, we need to submit completed applications to get realistic bids; easier because the demographics and health of the group had changed in a positive way.

After submitting the ubiquitous UHC applications to several carriers, it looked like we were stuck once again: none of the offers were really outstanding; UHC's was close, but added a $100 per person prescription deductible (in addition to the underlying plan's deductible). I really have no problem with that: rx costs comprise a disproportionate share of claims, and encouraging more consumer awareness of these costs is a good thing. Still, why switch carriers for essentially the same plan and rate?

Or so we thought.

In re-reviewing (no, that's not a typo) the renewal, the business owner and I finally noticed that the Anthem prescription benefit had changed, and not for the better. We asked Anthem if we could still get the same rx plan as we'd had and, if so, at what additional cost. Turns out, they would be happy to restore the full benefits, at an additional cost of about 15% of the premium (about $5000 per year). That earned a double-take, but the numbers didn't lie. No wonder they'd snuck in the rx change: if they'd sent the real renewal, it would have been a 35% hit.

Ouch!

Fortunately, I had put the UHC process on hold, but not cancelled it, so we were able to successfully transition there. A happy ending, but: a very bitter taste as a result of the underhanded way that Anthem presented its renewal.

Lesson: review those renewals very carefully, because what you see may not be what you thought you were supposed to get.