ObamaCare comes up short (again)

Just over 3 years ago, Mike asked "[w]hy has Medicaid failed to protect the poor?" In the interim, we've been introduced to ObamaCare, one explicit goal of which was to increase health care (and health insurance) access to the poorest among us.

So, how's that working out?

You be the judge:

"Some people earning less than $30,000 a year will remain at risk for expenses that go beyond their means. Those individuals may face choices between skipping care and staying sick, or getting treatments they know could put them into debt."

This, already several years into the ObamaCare regime. But it'll get better, right?

Um:

"[T]he financial help gets smaller as incomes rise, and cuts off completely at 400 percent of poverty, $44,680 in 2012. This could leave some lower-income people with high medical expenses facing out-of-pocket costs as high as $2,000 to $6,000 a year."

Ooops.

[Hat Tip: FoIB Holly R]

Utopia meets Reality

Russell Hutchinson, proprietor of Chatswood Moneyblog, has a thought-provoking post up at the Good Returns financial "news center." In it, he lists all the elements of an "ideal" health insurance plan, and then turns the filter of reality onto it.

Here's a sample:

"[W]e don't yet have the perfect medical product. Consumers rightly see the perfect product as being one that pays for everything and costs nothing. Dialling back just a notch or two from that Nirvana we could sensibly describe what might be a ‘super-premium' medical product ... All of these cover features are available. The only problem is, you can't buy them all from one provider. In fact, I don't think you can even buy them all from less than three providers. If you did buy them all they total two to four times the typical total cost of a more stripped down major-medical product."

Read the whole thing. And definitely stop by Russell's place for a perspective from the Land of the Kiwi.

Cavalcade of Risk #165: Vegas-Style

Jason Shafrin combines Vegas and the start of the NFL season to present this week's round-up of risk-related bloggetry. What's so unique (and interesting) about this edition is Jason's use of Vegas-style odds as applied to each post.

Very cool.

Don't go away mad, Bart...

Just go away. Stupid stunts like this won't absolve you:



You made it happen, Bart. Man up.

[Hat Tip: RedState]

ObamaCare's Solyndra

LifeHealthPro has a mushy article on CA passing Co-op legislation.

In the article they mention 19 non-profits offering coverage in 18 states that have already been awarded $1 billion. That leaves $2.8 billion left to be "had".

Like most news articles, they mention that do-nothing conservatives are against it, like they are against everything and already the house is investigating.

"the House Oversight Committee recently announced it would investigate an estimated $845 million announced so far in subsidized loans to 10 CO-OPs operating in 10 states, citing a potential default rate as high as 50 percent."

Potential default rate of 50%; shouldn't all tax payors be against that? Co-ops suffer the same failure of logic that the green energy write-offs did.  The Liberals constantly tell us how greedy business owners are, if these entitled 1%er`s aren't willing to risk their own money then maybe there isn't a good business model to support?

Insurance is very simple: take the claims, add expense and profit and there is your premium. Unless you can fundamentally alter one of those three items there is no way to reduce premiums. As the article mentions co-ops did exist prior to PPACA;

"The country's largest co-op is Health Partners, a Minnesota-based co-op. It offers traditional comprehensive coverage for as low as $88 a month."

If there was a viable opportunity the market is obviously capable of taking it. What is more likely is that connected or quick thinking "non-profits" will start up a co-op with government loans, collect nice salaries, hire friends and family to provide for profit services such as underwriting, marketing, claims, then fold when the money runs out. See the numerous failures under the green jobs program.

The entire PPACA co-op concept doesn't increase the probability of success for these plans, doesn't alter the playing field or laws that current carriers operate under. It just gives away $3.8 billion to those quick enough to apply. I think the tax payors will be lucky if only 50% of them fail.

Life Insurance Awareness Month

September is Life Insurance Awarenesss Month, an effort by a number of industry organizations and insurance carriers to get the message out on why life insurance is important. A few weeks back, we reprised Nick's Story, a very personal account of how the lack of insurance impacted a young man and his family.

Another young man, Buddy Valastro, dreamed of joining his father in the family bakery. That dream seemed to have died with his father, at the incredibly young age of 54:

"Buddy lost his best friend and mentor. And his family lost its breadwinner. Buddy had to drop out of high school to run the family business. That meant 12- to 18-hour workdays, six days a week and overseeing 30 employees."

That's because his dad had owned no life insurance. Things eventually worked out for young Buddy - or as you may know him, The Cake Boss.

On the other hand, any number of other successful business might have failed - or never have even gotten off the ground - without life insurance. Pretty much every life agent knows the story of how James Cash Penney kept his fledgeling business afloat during the Great Depression with the cash values of his life insurance. But there are others, as well:

■ Walt Disney used his life isnurance as collateral to help fund Disneyland

■ And Ray Kroc borrowed against his life insurance policies to help with cash-flow when McDonald's was just a start-up

■ Even home economist Doris Christopher tapped her life insurance policy to get the Pampered Chef cooking along.

All of these folks understood the value of life insurance. Do you?

Do it yourself Life Insurance

There was an interesting article on NPR regarding life insurance for the Apollo 11 astronauts.  Apparently, traditional life insurance companies were charging such a high premium that the astronauts decided to do something on their own...they signed hundreds of envelopes (aka "covers" to those who collect these things) to be postmarked on the day that launched, stepped on the moon, etc.  They were to be sold if they didn't make it back as a way of supporting their families.  They obviously made it back, but the covers made their way out into the market...they're selling for up to $30K each.

Clever, but begs the question why NASA didn't pay for coverage.  It does seem a bit cheesy.

Fight the Feds, Lose City Hall

We've discussed the concept of "shanda" before; briefly, it's an embarrassing scandal. And it's quite apropos today, as we read about one employer's successful fight against HHS Secretary Shecantbeserious and the shameful way that employer is being treated by the city (some 300 citizens of which he employs):

"The Catholic owners of a Colorado-based business won an injunction recently against implementing an ObamaCare mandate -- only to be denied a proclamation now from the Denver City Council."

Hercules Industries has been doing business in the area for a half century, and was on track for "Good Citizens Award," based on its various community contributions, and for providing "generous employee health care coverage."

That was before the owners found themselves on the wrong end of the convenience items birth control mandate, and thus the PC crowd.

No word yet on whether or not they'll continue to be in a position to offer "great health care coverage" once ObamaCare is fully implemented.

Cavalcade of Risk #165: Call for submissions

Jason Shafrin hosts next week's Cavalcade of Risk - Entries are due by Monday (the 3rd).

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

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

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

Thanks!

NB: We're starting to schedule Fall Cav's - click here to grab yours!

Thursday NewsLinks

■ As Isaac continues to pound the Gulf region, at least one insurer has thrown out a lifeline:

"Aetna is making it easier for members affected by Hurricane Isaac to refill prescriptions and behavioral health programs. We are also extending claim and appeal filing times, and helping members who have evacuated find care outside of their homes"

If you're an Aetna health plan member, they've got a list of toll-free numbers available - drop us a line or leave a request in the comments and we'll be happy to pass them along.

■ It's been a while since we've heard anything about the Life Partners fiasco. Now comes word that the folks behind it have been granted their request for "a full evidentiary hearing before a Texas state agency," to begin in September.

Interestingly, it appears that they've been allowed to continue doing business in the meantime. They're supposed to pay a dividend mid-September, but that's currently on hold pending another injunction. And, of course, there's still the on-going Federal case.

Oy, what a mess.

Digital insurance?

Here's something you may not have thought about (I know I hadn't): "what happens to all of your online stuff when you die?"

Many (most?) of us have an iTunes library, multiple email accounts, and various social media accounts (Twitter, FaceBook, and the like), even online financial accounts (PayPal, for instance). Some of these (like Amazon or PayPal) may even have a virtual wad of cash sitting in them.

So who "inherits" them once you've gone to that big digital vault in the sky?

Turns out, the answer's not so simple: sure, you can leave a note with your logons and passwords, but will it be found? And do you really want someone updating your FaceBook page after you're gone (although that might be kinda funny)?

These are just some of the issues we face as this digital age begins to mature. One company, called SecureSafe, offers a pretty neat service: it lets "users upload all their documents and passwords to their account, once it is set up and assign the content to beneficiaries." It even includes a "fail-safe" option in case "reports of your death are exaggerated."

One wonders if there isn't an insurance product opportunity in here somewhere...

The Myth of the Unbiased Media

Rueters has published an article trying to debunk what they call the Top Six Myths of Medicare by Mark Miller:

“The debate already is generating plenty of claims and counter-claims about what is and is not working- often based on misinformation about how Medicare actually functions today. Solet's take a look at the six biggest myths about Medicare, along with thefacts.”

The “facts” as outlined by Mr. Miller are as believable as Rep. Todd Akin (R-MO) being endorsed by NOW.  Let’s take a look at his Myths and the reality in Medicine today.

Myth 1: MEDICARE COSTS ARE OUT OF CONTROL

This myth assumes that once you agree that the government should be in the business of managing healthcare and that secondly that even though “Medicare spending will soar in the years ahead as the number of seniors grows” it is okay because” its per-capita growth is slower than private health insurance”.  The problem is that my tax dollars do not go to supporting private health insurance, yet a deduction for Medicare is taken out of every one of my paychecks.  Comparing Medicare to private insurance is inappropriate since they operate on different guidelines and financial contributions, i.e. Medicare being mandatory by the government and private being a choice by the consumer (for now).

As to whether or not Medicare costs are out of control, a report by the CBO projects that “The cost of Medicare is expected to nearly double over thecoming decade…. Medicare's spending is expected to increase to $1,058 billionin fiscal 2022 from $565.3 billion in fiscal 2011. The program's annualspending increases—7.6% in fiscal 2011—are expected to slow to 1.3% in fiscal2012 before accelerating to 10.7% in fiscal 2022.”

Finally, let’s go with Mr. Miller’s assumption that Medicare is needed, then let’s look at a true representation of spending of a government agency by comparing it to growth in the economy.  In a report by the Center for American Progress it states that  “{a}lthough Medicare spending perenrollee has grown more slowly than private health care spending for most ofits history, health care spending in general and Medicare in particular havegrown faster than the economy.”

Myth 2: MEDICARE IS GOVERNMENT HEALTHCARE

Mr. Miller reports his fact as “The government funds Medicare, but healthcare delivery is entirely private.”

Mr. Miller argues that since the government does not actually provide the medical care, as in England under the National Health System or here in America as the Veteran’s Administration, it is not government healthcare.  He offers as further proof a quote by Richard Kaplan, a professor at the University Of Illinois College Of Law who specializes in elder law matters:

"The government provides the financing, so it's appropriate to say the government is the health insurance company… But all the doctors, pharmacies, and nursing homes are private. The provider sends a bill - instead of Blue Cross Blue Shield, the federal government writes the check. But you go to whatever hospital you want."

Thus Mr. Kaplan argues that Medicare is not government health insurance due to the right to choose your own hospital.  However, in an article on the BBC reviewed by Dr. Gill Jenkins on Oct. 2010, patients in England were being offered more choice about where they want to be treated.

So, like England, the US government offers choices of where a patient can go to be treated and then pays the doctor for that treatment.  So in going back to Mr. Miller’s “fact,” what is the difference between Medicare and other government healthcare?

Finally, to argue that Medicare is a government entity, Medicare was voted into law by the United States Congress and Senate and signed into law by President Lyndon B. Johnson on July 30, 1965.  As a medical practice manager, I am directed by the Center of Medicare and Medicare Services (CMS), a government agency, on how to distribute care, how to bill, and most importantly what I will be paid by the government for treating patients with Medicare.  In all cases the doctor is paid directly by the federal government for services rendered, based on a fee schedule designed by the government. 

Disability trends '12

The Council for Disability Awareness (CDA) has just published its 2012 Long Term Disability Claims Review, an annual study which analyzes disability claims as reported by CDA member companies. The study comprises stats from 2007 through 2011.

Here are some examples:

■ In 2011, CDA member companies paid out over $9 billion in claims, surpassing 2010 totals by 2%

■ Not surprisingly to us, 43% of participating companies reported increased claim incidence from 2010 to 2011; most, but not all, companies continue to believe the economic environment is a factor.

■ Much as we saw last year, the total number of disabled workers currently receiving SSDI payments continues to escalate. At the same time, unemployment remains at historic levels, which means fewer folks actually paying in to the system.

Marmite vs MRSA

Released 30 years ago, the song Land Down Under included this memorable line:

"Buying bread from a man in Brussels
He was six foot four and full of muscle
I said, "Do you speak-a my language?" 
He just smiled and gave me a vegemite sandwich"

Well, its cousin, Marmite, is in the news today, for a very good reason:

"An ingredient in the savoury spread could help doctors defeat MRSA by massively boosting the body’s defences against the deadly bacteria."

Turns out, Marmite (made primarily from yeast extract) is especially rich in B vitamins, including niacin, which scientists believe "can bolster the body against staphylococcus bacteria." Now, this doesn't meant that we should all begin mega-dosing on niacin (or snarfing down Marmite). For one thing, too much niacin can cause liver problems and increased uric acid levels (which can lead to gout).

Pass me a biscuit, please.

College health plans taking off

And not in a good way. We've long noted that these plans are mediocre (at best) and overpriced to boot. Now comes word from FoIB Jeff M that another college is set to bring its premiums in line with the train-wreck's requirements:

"Guilford College in North Carolina is poised to raise the prices they charge students for health insurance by 75 percent as a direct result of the implementation of [ObamaCare] ... There is no reason why it has gone up except the requirements of the new law have forced it to go up. That is the whole story.”

Of course, some (many?) students will be eligible to stay on their folks' health plan (assuming they have one), but this is just another example of how the promise of lower premiums was never realistic.

MVNHS©: It's for the chillun' (or maybe not)

The Much Vaunted National Health Service©, not content with killing off hospital-bound victims patients, has set its sights a bit lower:

"[MVNHS©] won't pay for child cancer treatment that 'cuts deaths by 25% - Some British parents are taking their children to the US to receive a three-drug treatment"

Question: Why does President Obama hate British children?

The Brits are "refusing to fund a treatment for one of the most common cancers suffered by children." That's actually a bit misleading: under a nationalized health care scheme, "refusing to pay" means "denying treatment to." It's a terrifically (or horrifically, depending on one's perspective) efficient means of rationing care. And, of course, it's exactly how ObamaCare is designed to work.

Oh well, it's just kids, right?

MLR means More Ludicrous Recalculating

Benefits Guy blogger (and FoIB) Patrick P reports that it’s going to cost one of his clients more in payroll updates and accounting fees than the value of the MLR rebate they actually received.

Here's a taste:

"Taking the Arizona employee we were able to come up with the following calculation of his premium rebate:  Total rebate is $17.85.  Through the end of August they will have already had 18 pay runs of the 26 total.  With 8 remaining pay runs it works out to the employee having a reduction in insurance premium contributions of $2.23 per pay."

Read the whole thing to see how ridiculous the process turns out to be.

ObamaCare's Hinkle Wrinkle

One supposes that this could be quite humorous, if the stakes weren't so darned high:

"As critics warned [ObamaCrap] will not “bend the cost curve downward” as promised. To the contrary, a June report ... predicts that national health spending through 2021 will continue to grow at a considerably faster clip than Gross Domestic Product."

Yeah, yeah, those whingers are always carping on PresBo's greatest legislative achievement.

Wait, what?

"...To the contrary, a June report by the Centers for Medicare and Medicaid..."

Hardly a bastion of right wing activism, CMMS is charged with actually implementing the bill we had to pass to learn what's in it. And they see what we've been saying for quite some time: ObamaCrap does nothing to lower the cost of health care delivery. It's basic economics hard at work: offer something for nothing, and you get a lot of takers.

And this growth is quite lopsided:

"Private health insurance spending will rise about 8 percent. Medicaid spending will grow about 20 percent. In a few years, government will account for 50 cents of every health care dollar spent in America." [emphasis added]

That last bit bears repeating: "In a few years, government will account for 50 cents of every health care dollar spent in America."

Currently, that number is about 41%. That's a 25% increase in federal health care spending in a very short time span.

And from where do these dollars come? Regular readers already know.

ObamaCare goes to college (a double whammy)

While I've never understood the connection between health care and college loans, they are nevertheless an integral part of ObamaCare. And just as that train-wreck has greatly depleted Medicare, it also threatens student loans in general, and how the 58 states will have to balance college needs and folks on Medicaid:

"Parents and students facing sky-high state-run college tuitions aren't likely to be thinking about ObamaCare ... ObamaCare relies heavily on Medicaid — the federal/state program that provides health insurance for the poor — to expand coverage."

Okay, we get it, poor folks need health care, too. But what's that got to do with the price of tomatoes, or college?

Just this:

"Medicaid is already swallowing up state budgets, forcing states to cut back on everything else, especially support for two- and four-year public colleges."

As ObamaCare forces more and more folks out of the private insurance market, and onto Medicaid, something's gotta give. And that something, it turns out, is young peoples' dreams:

"As the Medicaid mandate rises, the educational funding declines. That is passed on to universities and they raise tuition in order to make up for it."

That's why we've always called mandates "hidden taxes:" there are no free lunches. Someone has to pay for health care. And since SCOTUS has green-lighted the individual mandate, the problem is exacerbated. That is, buying health insurance is now the law, but going to college is a choice. The former trumps the latter every time.

But the problem with Medicaid doesn't stop there: in addition to "regular" health care, the program is also expected to pick up the tab for long term care (aka nursing home costs). The problem is that there are only so many dollars available, so states will be looking at individuals to pick up more and more of the tab. We saw this with the new Partnership Plans - the government implicitly recognized that folks need to fend for themselves, and so it waved a big carrot. But the stick isn't far behind:

"Some 29 states currently have laws making adult children responsible for their parents if their parents can't afford to take care of themselves."

This is a completely separate issue from the so-called "look-back" provisions, which merely dissuaded folks from transferring assets to their kids. These "filial responsibility" laws (which, as the article notes, are nothing new) require even more blood and treasure from kids who may have already reached a breaking point paying off college loans, which are inflated because the cost of that education keeps going up (helped in no small part - as noted above - by ObamaCare).

Seems like this vicious cycle is just getting revved up.

[Hat Tip: FoIB Brian D]

ObamaCare 2013: HSA/FSA Update

As we round the corner and head into 2014, the IRS has issued new minimum deductible guidelines for those of us still clinging bitterly to our (soon to be gone) HSAs. For 2013, the minimum deductible for tax-qualified HDHP plans will be $1,250 per person, or $2,500 per family (or: $2,500 for "embedded deductible" plans).

Please consult your insurance professional if you don't know what an embedded deductible is.

Oh, and for folks participating in healthcare Flexible Spending Accounts (FSAs), your maximum allowable contribution for next year will be $2500. This new requirement applies to all FSA plans whose taxable years begin after Dec. 31 of this year.

It won't apply, though, to FSAs with plan years that begin before 2013. For example, if your company has a July 1 plan year, then the new cap doesn't apply until next July 1rst.

Confusing enough for you?

If so, then you need to get with your FSA/HSA/HRA guru post-haste. I know I'll be speaking with mine.

[Hat Tip: UHC]