Nick's Story [BUMPED TO TOP]

[Welcome IHIAA members!]

(This is a bit long, but well worth the read).

My father never was the picture of health. He smoked, he drank, and he ate things that most people wouldn’t touch unless they had to break into the box marked “Survival Kit - Last Option.” Vienna sausage does not a meal make. He constantly had some manner of cold, cough, or other malady, and we never really thought much of it. Normally, he would shuffle around for a few days, then get back to life. So, at Thanksgiving 2006 we didn’t really think anything of it when Chock developed a nagging cough that just wouldn’t go away.

By Christmas 2006, it still hadn’t gone away. He was also beginning to have some balance issues, some troubles with his memory, and was tripping over words. He didn’t want to see a doctor - half because he didn’t want to believe something could be wrong, and half because he just wasn’t the type to go to see someone until limbs were actively falling off.

He got progressively worse over the next few months and eventually couldn’t deny the fact that he truly needed to go see a doctor. It was May 9th, 2007 - my parents’ 32nd wedding anniversary - when he was formally diagnosed with Stage IV cancer (brain, lung, bone, blood, and colon). He started aggressive chemotherapy on May 13th, his 71st birthday.

On July 19th, 2007, at 12:40 in the morning, my father died. Very shortly thereafter, we realized that we had some serious problems.

You see, before Chock passed away, he had had a brain tumor the size of a baseball. His mental faculties were somewhat impaired, to say the least, and so some of his last financial decisions were...less than rational. Just before he passed, in one of his last moments of lucidity, he told my mother “I’m sorry, Jo. But I sure am glad I’m not going to have to be the one who has to clean up the mess I made.”

And holy crap, was he right. When Chock died, the bills hit us hard. Chemo had cost $8,000 a round. The cost of his two-month hospital stay in a private room was astronomical. Numerous tests, multiple labs, home hospice care, none of it was cheap. The $1,000 a month my family was paying for his “insurance” had drained us as well - the only thing that “defined benefit” plan defined was exactly what position we were expected to take as we were screwed. Add to that his already extant debt, and we were in deep.

Did I mention that this was all piled on top of my mother’s medical bills? She’s been handicapped for fifteen years with Meinere’s disease. Twenty-three surgeries haven’t been cheap - especially when several of them were excluded from coverage as “experimental procedures.”

Now, let’s make matters worse. Before Chock passed away, he told us that he had a $250,000 life insurance policy through New York Life. Well, that was partly true - at one time, yes, he had life insurance through NYL. The tumor that was altering his speech was also mixing up the chronological order of his memories. Tracing the money flow would reveal that the policy had lapsed years and years ago when he had pulled all the cash value out.

I always wondered how he had been able to afford that boat.

The average American family declares bankruptcy at $11,000-ish of debt. We were in to the tune of $167,000 (before funeral costs) with no life insurance coming.

If you’ll recall, mid-2007 was around the time the real estate market had really settled into its free-fall. My mother’s only option was to sell the house that she and my father had lived in together for thirty-two years. There was no such thing as a quick sell in that market, and the process was torturous. We couldn’t afford storage, and we had to clean out a massive amount of my father’s things in a short period of time to prepare the house for sale. I drove twelve hours round-trip every weekend for months, coming home from college to help my mother throw out over thirty years of memories. It was easily as depressing as sitting next to my father’s bed while he died.

Though we watched the money as closely as possible, there was only so much of it - and it was running out. By the time the house sold, my mother would later tell me, she had about thirty days of cash left before she would have had to declare bankruptcy. And when it sold, it did so for $75,000 under its appraised value.

Now, sad though that story was, it has a happier ending than most. My mother lives in Alabama now, back where she grew up. Between her disability, teacher retirement, and social security, she has enough to get by each month and put some back in savings. And I have a new career path than the one I originally envisioned. I sell insurance now, and I know that there’s not a single person that I work with who will ever find themselves in the situation that my family was in. I’m saving the world, one policy at a time.

This story has several morals worth remembering:

Don’t count on the ability to sell your assets in the event of a death in the family to float you. It might not come through in time, it’s painful, and you’re not going to be in any sort of position to get yourself in a positive bargaining position.

Life insurance does more than provide a bit of money upon a death. It allows the survivors time to grieve in dignity instead of spending sleepless nights throwing out years of accumulated memories.

That $2000 prescription drug cap might not seem like such a big deal when you’re taking a z-pack once every two years for a sinus infection. It’s a huge deal when you’re staring down $8,000 a day of chemotherapy drugs.

Plan for the worst when things are good. You’re rational, you’re calm, and you can think clearly. If you wait until the crap has already hit the fan, you’re going to end up scrambling - like we did.

Don’t just buy insurance. Hire an agent, and make it someone you trust. Talk to them. There are a few insurance agents that give us all a bad name, but I promise, some of us truly do care about keeping your family safe.

Nick Perry

(Nick is a friend, and fellow agent in the Atlanta area. He is wise beyond his years. Perhaps that is because he has lived through things most of us never want to think of, and pray we never experience).

ERISA-roni, that San Francisco treat!

[Welcome Industry Radar and Kaiser Network readers!]

This article from the WSJ Health Blog reports the progress of Golden Gate Restaurant Association v. City of San Francisco. The Supreme Court has now agreed to hear an appeal from the judgment of the Ninth Circuit Court of Appeals, which reversed the original trial court’s decision.

IMO, Golden Gate Restaurant Association wins in the Supreme Court, and the City loses. The Ninth Circuit is frequently reversed.

The WSJ article fails to clarify a frequent misrepresentation in the media about the fundamental legal issue in this case. Specifically, the fundamental issue is regulation of “insurance plans” vs the regulation of "ERISA plans”. This distinction is essential to understand.

An insurance plan operates under a contract of insurance issued by an insurance company. The States are authorized to regulate insurers and the business of insurance. In contrast, an ERISA benefit plan is provided under a contract of administrative services only. In an ERISA plan, there is is no contract of insurance, no insurance company, and no insurance premiums. These plans are called ERISA plans because they are regulated by the Federal law called ERISA.

Most of the largest employers/plan sponsors, nationally and in San Francisco, manage their employee benefits thru ERISA plans. I think the Restaurant Association does the same and therefore the fundamental premise of their objection is that their plan is not subject to regulation by the City or the State. (If otherwise, I doubt the Association would have chosen to incur the expense of a trial and, now, two appeals. I also believe the Supreme Court would not waste its time if this were about an insurance plan – which the States have clear authority to regulate.)

I believe the City attorneys understand the law - but the City went ahead anyway. Why? I think because, if ERISA plans are ruled exempt from the requirements and tax the City wants to impose, then the City’s ability to manage its scheme of insurance for the uninsured would be greatly diminished. I understand the City's motivation. I just think the City is wrong on the law.

Another Treat-Worthy Carrier Trick

[Welcome Industry Radar readers!]

Regular readers are aware of our (ever growing) Stupid Carrier Trick series. Lesser known (and less populated) is our Treat Worthy Carrier series. I'm tickled pink to present our latest addition, Assurity Life Insurance Company.

I use Assurity primarily for blue and gray collar disability income plans. These are typically folks whom the "Big Boys" eschew in favor of doctors, lawyers and politicians. The particular case which has earned Assurity its place in the pantheon of "Good Guys" is somewhat unique:

Mike [ed: not his real name] works for a company which has tasked him with two seemingly unrelated jobs: one is inside sales, with little chance of major injury; the other involves some pretty hefty manual labor "out in the field." One of the primary factors in disability insurance pricing is occupation: more "hands on" jobs generate higher premiums. Because I tend to be fairly conservative in quoting policies, I erred on the side of caution and assigned Mike's case a relatively low occupation class, which resulted in a sizeable (but still reasonable) premium. I submitted his completed application, and waited.

A week or so later, I received an email from Assurity informing me of two things: first, that I had used an outdated app (my fault for not checking the date), which necessitated Mike having to complete a new one (not a huge deal, but my bad).

The second item regarded his occupation class: in reviewing the application, the underwriter noticed the dual jobs, and asked me to confirm with Mike more precisely the division of his labors. The underwriter felt that Mike may well qualify for a lower rate. So while Mike was re-completing the application, I had him be more precise in describing his typical day. We sent that off, and awaited an answer.

When the policy arrived, I was, to put it mildly, pleasantly surprised to see that the premium was reduced by some 40 percent; Mike had indeed qualified for the higher job classification.

This is an example of a carrier not just doing the right thing, but actively engaged in doing so. It is obviously a big part of their corporate culture. I pay little (if any) attention to carriers' "mission statements;" rather, I look at how they do business. It's obvious that Assurity looks for ways to make it easier on their clients (and would-be clients), and for that, they earn an IB Treat.

Kudos, Assurity Life.

[And a Very Special Thank You to Shannon Smith at Assurity]

Vet's Draw Sniper Fire

Marie Antoinette declared, "Let them eat cake".

Apparently the new regime in Washington is taking their cue from the headless wonder. CNN reports that "the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance."

Like a lot of other things in the news lately, my initial reaction is, "they are kidding, right?".

No official proposal to create such a program has been announced publicly, but veterans groups wrote a pre-emptive letter last week to President Obama voicing their opposition to the idea after hearing the plan was under consideration.

The groups also cited an increase in "third-party collections" estimated in the 2010 budget proposal -- something they said could be achieved only if the Veterans Administration started billing for service-related injuries.

Let me see if I understand.

We have an all volunteer army. Everyone who enlists does so willingly because of a desire to serve their country. They knowingly put themselves in harm's way. Their reward is . . . pay for your own damn health care.

Asked about the proposal, (VA Affairs Secretary) Shinseki said it was under "consideration."

"A final decision hasn't been made yet," he said.

Under consideration. So this is one way Obamaman wants to save money and pull us out of a nosediving economy?

Incredible!

Europe to MVNHS©: More Rationing, Faster

To be fair, this one isn't entirely the doing of the MVNHS©:

"Patients face a significant increase in waiting times for operations as 'insane' European rules mean doctors' hours are cut so much medics will not be able to cope."

Recently, the British health service has been trying to cut wait times for patients, enjoying modest success in that endeavor. But "two steps forward, one step back" seems to be the order of the day, as new rules will limit "junior doctor's" work week, cutting them by some 15%. These new rules, called the European Working Time Directive [ed: insert punchline here], severely curtail how many hours physicians can work, and thus patients' access is reduced, as well.

Of course, when the gummint runs health care, these are the kinds of things that will happen, regardless of the consequences to the public. One might presume that our own providers would chaff under such a system, but I'm not convinced. In the event, this results in even less health care for our cousins Across the Pond:

"It means patients will have to wait months for routine operations as surgeons prioritise emergencies rather than scheduled cases."

These reductions translate into real lossses, since it's estimated that the average hospital will lose the equivalent of three interns. This is, of course, rationing of health care, which may well be necessary to reduce costs. The question is whether we'd be satisfied wth a system that essentially dictated how many hours a provider could work. That seems to be rather shortsighted.

Survey Says: Cavalcade of Risk!

Jason Shafrin hosts a clever and interesting Cavalcade of Risk. He even includes a Surgeon General's warning, so you know it's risky.

Enjoy!

Clueless

[Welcome Industry Radar readers!]

Insurance giant Aetna released a report which is a poor reflection on our ability as agents to get the word out.

With unemployment exceeding 8%, thousands are finding themselves out of work and (apparently) no clue about their health insurance options.

The survey found that 69 percent of consumers had never heard of individual health insurance plans or did not know much about them. While general awareness of COBRA plans was higher, 38 percent of respondents said they expected to pay the same premiums as when they were employed.

Some of the blame can lie at the feet of employers who rarely do enough to educate their workforce on the value of health insurance benefits. But I find it almost incredulous that 69% have never heard of individual insurance plans.

My initial reaction is, you're kidding, right?

Forget that I get regular calls from people complaining that their employer health insurance deductions for their family of 9 is increasing from $15 per week to $20 per week and saying they need something cheaper. Or the calls from those with sticker shock who got their COBRA notice, and the $1400 monthly price tag, and wondering what they can pick up that will cover their 13 monthly medications.

But to have never HEARD of individual health insurance?

Of course recent changes in COBRA as amended by ARRA will reduce the monthly outlay for many. But even paying 35% of the premium for family coverage when you don't have a paycheck can be a bite.

Have we created a nanny state?

Poor Man's Viagra

Having problems, guy's? Can't afford to go to the doctor or pay for Viagra?

Go sniff some rotten eggs.

A malodorous gas behind the smell of rotting eggs has been found to play a key role in giving men erections. Scientists believe the discovery could lead to the development of a male impotence drug to rival Viagra.

And it seems they are dead serious.

The whiff of hydrogen sulphide – a gas not traditionally associated with lovemaking – accompanies the biological degradation of sulphur-containing substances. It also belches from the exhausts of cars fitted with catalytic converters.

So if you don't have any rotten eggs, find an exhaust pipe.

Yeah, that always get's me in the mood.

The discovery that hydrogen sulphide gas helps penile erection mirrors the earlier discovery that another gas, nitric oxide, is involved in a similar biochemical process. That led to Viagra being used as an anti-impotence drug.

Kinda makes you wonder how scientists discover this stuff, doesn't it?

"Hydrogen sulphide, like nitric oxide, was best known as a toxic pollutant until recent years, when it has been proposed to be a gaseous neurotransmitter,"

Toxic pollutant, gaseous neurotransmitter . . . they are all the same to me.

About one third of men with erectile dysfunction do not respond to Viagra,

Maybe they need to find some rotten eggs. Probably a lot cheaper.

Ohio & COBRA/ARRA: More Questions than Answers [UPDATED]

[Welcome Industry Radar readers!]

[Please scroll to bottom for update]

In looking through the latest missive from the (Ohio) Department of Insurance, I was drawn to this innocuous-looking requirement:

"Employers are required to send a notice to former employees so that former employees can elect to continue their group coverage and receive the subsidy."

What, exactly, does that mean? As we've discussed before, it's just not cost-effective for a small employer to contract out this kind of administration, but it would be nice to know what, exactly, is going to be required of him in the event a former employee (exployee?) becomes eligible under this new program. Then, too, there are budget considerations regarding how far back the employer will need to pay.

So I poked around the DOI and DOL websites for a bit, but was unable to find anything helpful. The phone seemed to beckon me, and so I called Columbus and ended up speaking with a very nice (if befuddled) gentleman from the DOI. After introducing myself, I explained why I had called, and what had me confused. Then, I asked what it means that an employer is "required to send a notice to former employees?"

The answer was not comforting: "we really don't know yet; the legislature is working on it now." The problems include the fact that Ohio's current coverage continuation law runs for only 6 months, while COBRA/ARRA goes for up to 9. So those two have to be reconciled.

Another problem is that there's never really been any formal notice required on the state level; that is, it was up to the employee to seek out coverage. But the new law has this pesky employer requirement, which begs the question we've already mentioned. It seems to me that, with the clock already ticking, this would have been resolved and implemented. But of course, we don't want to confuse governance with common sense.

A related problem is the next sentence: "Former employees will have from the first day they are eligible until 60 days after receiving the notice to enroll." The way I read that, if one became eligible on, say December 1st, but the notice isn't received until, say April 1st (being generous and/or optimistic), how is this going to help the former employee, who now has to come up with 5 months of premium (well, 35% of premium) when they've potentially been unemployed the whole time? And, of course, the employer's 65% liability is at issue, as well.

I hate to keep saying "we'll keep you posted," but as this continues to evolve, that's the best we can do.

UPDATE: In the comments, FoIB Chad (co-blogger at Tusk and Talon) informs us that:

ARRA does require the employer (whether subject to COBRA or state continuation) to send notices to employees terminated between 9/1/08 and 12/31/09. A model notice is due to be issued by the US DOL on 3/17. For those who did not elect COBRA, coverage would be effective for coverage periods starting 2/17 or after (or 3/1 if coverage is monthly). Unlike normal COBRA, coverage is not retro to the qualifying event, rather only to the 2/17 or 3/1 date. ARRA generally does not modify state law as far as the duration of coverage.

So the coverage elected in OH should still only last for 6 months from the date of the event (e.g., if the event was 5 months ago, the EE would only get 1 month of coverage from 3/1 to 4/1). Employers/Carriers will only be able to claim a subsidy for the 6 months or less of coverage extended under OH's state continuation law. There are lots of other nuances but I'd be surprised if the DOI provides any assistance beyond leaning on your carriers to figure out, and do, whatever it is they are supposed to do.

Thank you, Chad!

Grand Rounds: Live! Edition

Dr. Jan Gurley hosts this week's edition of all that's interesting in the medblogosphere. This one's special, though, because it also includes a "LIve!" version with podcasts.

Please stop by.

Carnival of Personal Finance is up

Stock Trading to Go hosts this week's edition. Do check it out.

About Wellpoint's PBM Auction

So Wellpoint is auctioning off its in-house pharmacy benefits management company. The likely purchaser will be one of the big PBM’s whose larger volume will presumably result in lower pharmacy costs for employer plan sponsors.

This article from WSJ Health Blog quotes Citigroup analyst Charles Boorady who believes that insurers would better manage health costs and quality “if they focused on the 85 percent of health care costs that are doctors and hospitals and leave the 15 percent that’s drugs to companies that are already much better at it.”

Boorady is a very smart guy and I think what he says is true as far as it goes - - but I think he is overlooking or discounting a larger point.

Specifically, is health benefits management more effective when pharmacy data are integrated into the management model along with medical data? There’s growing evidence that the answer is yes. To the extent that’s true, an in-house PBM and an in-house medical management capacity are synergistic and neither is as effective standing alone.

To state another way, a PBM may be able to manage its 15% of total health care costs better than an insurer, but the PBM cannot directly manage the other 85% of total health care costs costs at all. The insurer can manage both - if it operates a PBM. That's a good reason for an insurer to have both medical and pharmacy management capacity.

An example is Aetna, which not only has a subsidiary PBM but also owns ActiveHealth whose business is disease management. ActiveHealth asserts that its medical results are noticeably better when it has immediate access to pharmacy records along with medical records.

Ironically, when ActiveHealth was a start-up it received substantial assistance and direction from Empire Blue Cross (today a component of Wellpoint). In retrospect, I think Empire’s failure to acquire ActiveHealth was a strategic error. Anyway, it appears that Wellpoint’s PBM today has more value to another PBM than to Wellpoint - which is probably one of the reasons it’s being auctioned off.

Cavalcade of Risk #73: Call for Submissions

Healthcare Economist Jason Shafrin hosts next week's Cavalcade of Risk, slated for the 11th. Submissions are due by this coming Monday (the 9th). Please be sure to 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.

Presidential Cold Cuts

[Welcome Industry Radar readers!]


Look who's talking now.

Obamaman, sent to earth to save the world, has single-handedly promised to save jobs, forestall home foreclosure, and make the world a safer place by having everyone join hand and sing Kumbaya is now ready to tackle "one of the major reasons why small businesses close their doors and corporations ship jobs overseas".

Health care consumes roughly 16% of GDP. Unless you can harness the cost of health CARE you cannot lower the cost of health INSURANCE.

It would seem that the Prez understands this.

Or does he?

Part of his plan calls for changes in Medicare and Medicaid that are projected to save $300 billion over the next 10 years which sounds great.

Of course it sounds great. That is what he does best.

But consider this. Medicare & Medicaid currently consume $720 billion and are expected to double to $1.4 trillion in 10 years.

The total projected 10 year savings of $300 billion vs. a total projected expenditure over the same period of $8.2 trillion is a drop in the bucket.

Saving dollars is noble, but at what price?

Of the 12 items listed in the graphic (above), 5 involve some form of rationing health care. The biggest savings ($37 billion) comes at the expense of shifting the cost of home health care away from Medicare to the patient.

Controlling costs is a step in the right direction. I am not convinced that Washington is the answer.

Perdue Cold Cuts

Here at InsureBlog we like to stay on top how the state of Georgia is spending our tax dollars. Like most states, and the federal government, we are looking at steep budget cuts to keep from going under. All areas are subject to the knife. Roads, schools and even Medicaid are trying to find ways to keep rolling on less money.

When you cut Medicaid, everyone loses, both rich and poor.

Georgia Governor Perdue has proposed a 10% cut in Medicaid funding to hospitals. This translates into a loss of almost $81 million.

The proposed Medicaid cut is expected to be magnified since hospitals will lose $2 in federal matching funds for every $1 in state Medicaid money that gets cut, said Kevin Bloye, spokesman for the Georgia Hospital Association.

"When you add the federal matching dollars," Bloye said, "hospitals could lose an additional $120 million."

Most hospitals lose money serving Medicaid patients, so this only makes it worse.

The Medicaid cuts could be the "last straw" for some hospitals in the state, industry insiders said.

Hospitals are suffering from rocketing unpaid medical bills, a decline in high margin elective procedures, and the growing rolls of uninsured.

So what happens when hospitals refuse to accept Medicaid patients?

Everyone loses.

"We can see hospital closures, we can see major damage to large hospital systems and we can see individual physicians who are getting out of the business, all because we didn't take the stimulus package money and use it directly for Medicaid," hospital lobbyist Jimmy Lewis said.

Oh yeah. About that Spendulus money.

The stimulus money doesn't come "close" to offsetting the tax revenue hit facing Georgia, Brantley said.

So even Obamaman can't save us.

Having fun?

Concierge? Mais Non...

Bob's written several posts on the idea of "concierge medicine;" that is, one pays a (flat) fee for unfettered, priority access to one's primary care physician, bypassing the normal appointment issues and, perhaps, first dollar insurance coverage for doc office visits (these plans don't help you with big ticket items like hospitalizations, surgeries, etc). Whether or not they're viable alternatives is, of course, open to debate, but they at least offer one a choice.

Unfortunately, the New York Department of Insurance thinks they run contrary to the Empire State's insurance laws:

"A New York City doctor's flat-fee, $79-a-month medical practice has run afoul of state insurance regulators who have told him to shut it down."

It seems that Dr Muney's plan, which "includes unlimited office visits, some tests and in-office surgeries," looks a bit too much like a pre-paid medical insurance plan, but lacks the requisite capitalization and legal paperwork of an actual carrier. He's currently in talks with the DOI, looking to find some way to keep the plan running without breaking any laws.

I'm actually on Dr Muney's side in this; as an insurance agent, it might seem counterintuitive to be rooting for his success, since it may be perceived as "competition." But I've always felt that competition was a good thing, and I also appreciate that he's looking for ways to help his patients gain quicker access. We'll have to wait and see if he's able to navigate the regulators' waters.

[Hat Tip: FoIB Brad Ford]

New P&C Blog

Thanks to a tip from FoIB Bill Montgomery (who, by the way, is considered the "go to guy" for vacant dwelling cover here in southwest Ohio), we learn of an outstanding blog focusing on the Property/Casualty side of the insurance business. Hosted by Tim Norris, an agent in Cincinnati, the National Real Estate Insurance Group blog offers insights on everything from umbrellas to commercial property coverage, all written in an easy-to-follow format.

Recommended.

Thursday Potpourri

■ Can we actually control cancer? That's the question being discussed by the Global Leadership Forum for Cancer Control. This international, grassroots organization believes that with "existing knowledge, it is possible to prevent at least one-third of the 10 million cases that occur annually. Where sufficient resources are available, current knowledge allows the early detection and treatment of another one-third of cases."

That seems a tall order, but perhaps they're on to something. If you're interested, they're holding their first Global Leadership Forum for Cancer Control in Canada later this year. For more info, check out their website.

■ Regular readers know that we don't do paid advertising here, but we do offer links to a few specialty products, primarily as a convenience for our clients. You may have noticed a new product at the bottom of the sidebar: "HIPAA Compliant Special Risk Medical." We're sort of ambivalent about limited benefit (aka "mini-med") plans: while they can be a terrific safety net for folks with severe, chronic health problems, they're often misused by agents who may not fully appreciate their limitations (or who don't really care about them). Still, they can be helpful because they're (usually) guaranteed issue, and will eventually cover pre-existing conditions.

That "eventually" is really the sticking point: why should one pay premiums for 6 or 12 months even before coverage for pre-existing conditions takes effect? Well, if that's your only choice, then so be it. But this new plan will cover pre-ex immediately (assuming previous coverage), neatly avoiding that problem.

■ Finally, this video from a group called "Conservatives for Patients' Rights." What I found so interesting about this video, which outlines four "pillars" of health care reform, is that it stresses (at least) two IB themes: transparency and personal responsibility. I also appreciated that it takes only about 30 or so seconds to make its point.

Health Wonk Review worth "Watching"

Brady Augustine takes a page from the comics, presenting a rather unique edition of the Health Wonk Review. Based on the new movie "Watchmen," this week's edition is short, sweet, and to the point.

Enjoy!

Pfizer Generic Play

Generics are big business and Pfizer wants a piece of the action.

The company said today it has inked a set of deals with Indian generics maker Aurobindo Pharma for rights to 39 generic oral drugs in the U.S. and 31 in Europe, including 11 in France alone. The drugs are for heart disease and neurological disorders, among other things. The company will sell the drugs in the U.S. through its Greenstone generics unit.

Interesting approach. Most manufacturers are finding ways to push brand names. I won't say Pfizer is waiving the white flag but this is a positive for consumers.

Pfizer said it expects to reap $200 million in annual sales from the recent agreements with Aurobindo by 2013.

Sweet.

Windy City Treat: Connecting the Dots

Back in the day (well, a few short months ago, really), the University of Chicago Medical Center undertook to reduce its exposure to the costs associated with treating the uninsured. In particular, the neighborhood in which the Center was located, which boasted a particularly high percentage of these folks. Curiously, they also happened to be predominantly poor. And did I mention, black?

Now, one might suppose that this would have resulted in a hew and cry from that community's leadership, which also happened to share some of those demographics. After all, if you're a hospital turning away black people, one would think there was a problem, no?

As it turns out, one would be wrong:

"Michelle Obama...helped create the program, which aims to find neighborhood doctors for low-income people who were flooding the emergency room for basic treatment."

For those in the dark on this, Ms Obama's other job is currently First Lady. Interesting also is the involvement of David Axelrod, currently serving as Senior Advisor to President Obama. His PR firm was given the task of "selling" the program, dubbed the "Urban Health Initiative" to the public and in particular, the folks who live in the neighborhood surrounding the UCMC.

Does anyone else see a disconnect between the stated goals of the new administration (more access, better care) and a program designed to save a particular hospital money by turning away those most in need?

Maybe it's just me.

More ARRA/COBRA Confusion

[Welcome Industry Radar and Wall Street Journal readers!]

Received in the mail this morning a letter which included the following:

"...small employers that are exempt from COBRA (e.g. employers with less than 20 employees) but subject to state continuation laws [ed: "mini-COBRA] will have to comply with the new subsidy requirements..."

Which we already knew, but:

"The new rules require employers to send out special notices and to allow certain individuals who originally declined coverage a second opportunity to elect to continue coverage." [emphasis added]

Now, this is from a noted expert on COBRA (in fact, he's one of our favorite CE instructors on the subject), so one might presume that this could be taken as "gospel."

Not so fast.

Let's back up a moment: as we've discussed, the Spendulus included some radical changes to COBRA, one of which extended the "subsidy" to smaller groups. From what we've learned so far, this applied only to the "subsidy" itself, not the notification requirements. Until now, Ohio (for example) had none: it was up to the (former) employee to seek out that coverage continuation. COBRA requirements in that area, however, are onerous, and almost always contracted out by employers. This is cost-effective for a larger group, but prohibitive for smaller ones.

If true, this new notification requirement would be a severe blow to any small employer's budget: under COBRA, the penalties for screwing up notifications are severe and not just applicable to the employer, but to the hapless employee who was assigned the task. So many groups (and most of the smart ones) contract with a COBRA administrator to handle this chore. That's probably not an option for a group of, say 10 or 12 employees, so the temptation to do this in-house will be great.

And unwise.

I'm still not convinced that this is the new law of the land, however. We've been keeping a very close watch on this issue, and haven't seen this particular item come in, except for this letter. So I called the Department of Insurance to see if they knew about it.

They did not.

In fact, their response was to "stay tuned" because the Department of Labor (the federal agency tasked with overseeing COBRA) was still ironing out details. Better yet, I clicked on over to the DOL, and found a brief FAQ about the new rules, none of which addressed the notification issue at the state level. Ditto at the dedicated COBRA site.

So, is this fact or urban legend?

At this point, no one seems to know. We'll keep you posted.

Email of the Day

From FoIB Brian D, comes this breaking news from Washington. We're proud to have scooped the MSM on this important, ground-breaking new program: 

The Americans With No Abilities Act

Washington , DC - (Dateline March 3, 2009) President Barack Obama and the Democrat controlled Congress are considering sweeping legislation that will provide new benefits for many Americans. The Americans With No Abilities Act (AWNAA) is being hailed as a major legislative goal by advocates of the millions of Americans who lack any real skills or ambition.

"Roughly 50 percent of Americans do not possess the competence and drive necessary to carve out a meaningful role for themselves in society," said California Senator Barbara Boxer - Democrat. "We can no longer stand by and allow People of Inability (POI) to be ridiculed and passed over. With this legislation, employers will no longer be able to grant special favors to a small group of workers, simply because they have some idea of what they are doing."

In a Capitol Hill press conference, House Majority Leader Nancy Pelosi – Democrat, and Senate Majority Leader Harry Reid – Democrat - pointed to the success of the U.S. Postal Service, which has a long-standing policy of providing opportunity without regard to performance. Approximately 74 percent of postal employees lack any job skills, making this agency the single largest U.S. employer of Persons of Inability.

Private-sector industries with good records of non-discrimination against the Inept include retail sales (72%), the airline industry (68%), and home improvement warehouse stores (65%). At the state government level, the Department of Motor Vehicles also has an excellent record of hiring Persons of Inability (63%).

Under AWNAA, more than 25 million mid-level positions will be created, with important-sounding titles but little real responsibility, thus providing an illusory sense of purpose and performance.

Mandatory non-performance-based raises and promotions will be given so as to guarantee upward mobility for even the most unremarkable employees.. The legislation provides substantial tax breaks to corporations that promote a significant number of Persons of Inability into middle-management positions, and gives a tax credit to small and medium-sized businesses that agree to hire one clueless worker for every two talented hires.

Finally, the AWNAA contains tough new measures to make it more difficult to discriminate against the non-abled, banning, for example, discriminatory interview questions such as, "Do you have any skills or experience that relate to this job?"

"As a Non-abled person, I can't be expected to keep up with people who have something going for them,"said Mary Lou Gertz, who lost her position as a lug-nut twister at the GM plant in Flint, Michigan, due to her inability to remember rightey tightey, lefty loosey."This new law should be real good for people like me," Gertz added. With the passage of this bill, Gertz and millions of other untalented citizens will finally see a light at the end of the tunnel.

Said Senator Dick Durbin (Democrat-IL), "As a Senator with no abilities, I believe the same privileges that elected officials enjoy ought to be extended to every American with no abilities. It is our duty as lawmakers to provide each and every American citizen, regardless of his or her inadequacy, with some sort of space to take up in this great nation and a good salary for doing so."

No Patients Left Behind

[Welcome Industry Radar and Kaiser Network readers!]

LBJ conceived the Great Society to eliminate poverty and racial injustice.

George H. W. Bush created the No Child Left Behind to provide quality basic education to all children.

Obama is promising there will be No Patients Left Behind as part of his master plan to save the USA from economic collapse.

We still have poverty, racial inequity and students in public schools are still failing. So will the Spendulus Bill with promises to end inequity in health care and provide universal coverage succeed? Will there be No Patients Left Behind?

Let's see what Cassandra Kelsey has to say about that.

Cassandra lost her job with Verizon in January.

Kelsey walks with a cane and lists a litany of ailments, including degenerative arthritis and hypertension. For her, going without health insurance is unthinkable.

COBRA became law in 1986 and provided, among other things, a way for employees to continue their group insurance plan for up to 18 months (in most cases), providing them a way to bridge over to their next job with benefits. For the last 22+ years employees have had an option to assure they would not be without health insurance after leaving their job. So how many have prepared for that situation?

Very few.

Outside a District of Columbia career center on a recent morning, Kelsey clutched copies of her COBRA invoice, clippings from a newspaper about the stimulus bill, and a form letter she received from the White House after writing to President Obama.

Kelsey knew about the reduced premium and said it would bring her COBRA costs below $200 a month. But when she called her benefits department, she was distressed to learn that she would not be able to get the reduced cost immediately, probably not until May.

"I can't take advantage of it now, which I think is totally unfair,"

Unfair? As much as I empathize with Ms. Kelsey I fail to see how this burdensome new program from the O.G.M. (Office of Government Meddling) is unfair.

As part of the Spendulus Bill, employers are now required to subsidize 65% of the COBRA premiums for severed employees for up to 9 months. Supposedly they will get a credit against future payroll taxes to offset this cost but the program has only been in the air for a few weeks and already some employers are considering dropping their group coverage as a way of avoiding the financial burden of paying for benefits for laid off employees.

A $25 billion provision in the stimulus plan aimed to cut COBRA's price tag, reducing its cost 65 percent for workers laid off as far back as Sept. 1.

That's $25 billion out of $787 billion to spendulate the economy. If Congress really wanted to help those out of work you would think they would allocate more to COBRA subsidies and find a way to make it less onerous for employers who are already struggling.

Instead, Congress deems it better to spend $1 million on Mormon Crickets in Utah, a total of $41.5 million to renovate libraries for 3 dead presidents, and another $1.8 million for Swine Odor and Manure management.

In the big scheme of things, when you are talking about spending billions of taxpayer money, allocating $300,000 for GoGirlGo is not a lot of money. But somehow I don't think Ms. Kelsey will agree that it is better to support mormon cricket research and pig farts is more noble than helping out people who are unemployed.

Grand Rounds 5:24

FoIB David Williams, proprietor of the Health Business Blog, hosts this week's roundup of great medblog posts. Once again, it's obvious that David's taken the time and trouble to actually read each submission, and it shows in the recaps of each post.

Well done!

Shut Up and Take Your Medicine

The O.G.M. (Office of Government Meddling) seems to think they know more about how to treat us than our doctors do. It's bad enough that Washington wants to take all our money and spend it for us, now they want to control health care as well.

If you have never heard of the National Coordinator of Health Information Technology, you need to take notice.

According to the HHS.gov site, the NCIH performs the following tasks.

Health information technology (Health IT) allows comprehensive management of medical information and its secure exchange between health care consumers and providers. Broad use of health IT will:
Improve health care quality;
Prevent medical errors;
Reduce health care costs;
Increase administrative efficiencies;
Decrease paperwork; and
Expand access to affordable care.

Interoperable health IT will improve individual patient care, but it will also bring many public health benefits including:

Early detection of infectious disease outbreaks around the country;
Improved tracking of chronic disease management; and
Evaluation of health care based on value enabled by the collection of de-identified price and quality information that can be compared.

All sounds well and good.

But now look at what Betsy McCaughey opines at Bloomberg.com.

The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors.

Even this sounds benign, but it get's worse.

Hospitals and doctors that are not “meaningful users” of the new system will face penalties. “Meaningful user” isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose “more stringent measures of meaningful use over time” (511, 518, 540-541)

What penalties will deter your doctor from going beyond the electronically delivered protocols when your condition is atypical or you need an experimental treatment? The vagueness is intentional. In his book, Daschle proposed an appointed body with vast powers to make the “tough” decisions elected politicians won’t make.

The stimulus bill does that, and calls it the Federal Coordinating Council for Comparative Effectiveness Research (190-192). The goal, Daschle’s book explained, is to slow the development and use of new medications and technologies because they are driving up costs. He praises Europeans for being more willing to accept “hopeless diagnoses” and “forgo experimental treatments,” and he chastises Americans for expecting too much from the health-care system.

Even though Mr. Daschle is not the HHS head, does not mean his fingerprints will not be all over any health care initiative coming from Washington. Kind of makes you wonder why the Prez is so adamant about EHR/EMR.

The Federal Council is modeled after a U.K. board discussed in Daschle’s book. This board approves or rejects treatments using a formula that divides the cost of the treatment by the number of years the patient is likely to benefit. Treatments for younger patients are more often approved than treatments for diseases that affect the elderly, such as osteoporosis.

In 2006, a U.K. health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye. It took almost three years of public protests before the board reversed its decision.

This almost has a Star Chamber quality to it.

Of course there is a positive to all this. If you want to control health care spending, the easiest way is to deny coverage for treatment. Rationing always works.

AIG: Chutzpah Redefined

Honestly, I had decided not to post yet another diatribe on the travails of disgraced (former) insurance giant AIG. After all, there's an ethical Rubicon that I feared to cross, given that we'd beaten up on the carrier so often of late.

This morning brought news that they were back at the trough, demanding that we taxpayers fork over another $30 Billion.

But that was then, this is now:

"In the midst of its negotiation with the federal government over revised terms of its bailout, American International Group Inc. sued the U.S. on Friday over a disputed $306 million in taxes, interest and penalties."

And guess who pays for that bit of litigation?

Thee and me.

Please remind me again why we threw them a safety net?

Told Ya So...

Earlier this week, referring to the President's "vision" of health care reform, I observed that "(h)istorically, too, such programs inevitably outgrow their initially estimated size (cf: Medicare), and become cures which are worse than the underlying disease. Thus, a big problem becomes an even bigger one, with little hope of slowing down."

Lo and behold:

"Orszag [director of the White House Office of Management and Budget] described the $634 billion the administration built into the new budget over the next 10 years -- as a “down payment” for health reform." [emphasis added]

But of course.

Far-reaching programs such as this always grow, whether by design or implementation.

And of course, no such program would be complete without its backers conflating health care with health insurance: e.g. "(r)educing premiums and other health-care costs."

Sheesh!

As our own Mike Feehan observed in the comments in a recent post:

"The difference between health care and health insurance is not mere semantics and it is not hair splitting. It's a difference that truly makes a difference.

The economic law of demand says that price and demand reach equilibrium at some point.

The more billions the government pours into subsidizing health insurance, the higher health insurance prices can go before reaching equilibrium with demand."

I certainly can't improve on that.

COBRA/Spendulus: Another Update

[Welcome Industry Radar readers!]

Just got another email from our FSA/HRA/HSA Guru, who clarifies that:

"FSAs were specifically excluded from the temporary COBRA subsidy program. There are a couple of links below that speak to the subsidy and note the exclusion of FSAs."

He also sent along this helpful link.

Thanks, Pete!

Carnival of Personal Finance now online

Free Money Finance once again hosts the venerable collection of all thing financial. There's a LOT of material, and you're sure to find something useful.

Much Ado About...Well?

Of all the "hot button issues" extant, perhaps none is more volatile than abortion. We take no official stand on this issue at IB (although I presume that each of us has our own opinion)(or maybe more than one), but this "theory" seems to be making the radar:

"Doctors are forecasting the closure of hospitals and clinics across America and a mass migration of physicians and their assistances to other careers should the Obama administrationsucceed in its attempt to overrule their rights of conscience."

In brief, existing laws grant an exemption of sorts to health care providers who have moral reservations regarding abortion, allowing them to turn away patients who seek them. And I'd add that, although the linked article doesn't mention it, one would presume that pharmacists who refuse to dispense the so-called "abortion drug" (RU-486) would also fall under this proposal.

This seems to me to be rather more complex than it would at first seem: on the one hand, folks (currently) have the right to seek an abortion; on the other, providers shouldn't be forced to perform procedures (or dispense meds) with which they have moral and/or ethical problems. And, of course, there are few, if any, insurance plans that would cover either abortion or RU-486; perhaps those will become mandated benefits under the proposed new regulations.

Frankly, I'm skeptical that we'll see a wave of hospital closures as a result; it's not as if the rules require that providers perform the procedure. In fact, this isn't really a new set of laws, per se, but a rescission of a "rule that currently protects civil rights and the exercise of conscience in healthcare." If the rule is rescinded, then it seems to me that this will become a matter for the courts to decide. Whether that's good or bad remains to be seen.

David Stevens, CEO of the Christian Medical Association, avers that "(t)he real threat to healthcare access is driving out every healthcare professional who conscientiously practices medicine according to life-affirming ethical standards." While I personally object to the rule's rescission, I also think that statements like this do more harm than good, in that they seem to vastly overstate the case, thereby reducing their own credibility.

What do our readers think?

Not qualified to be governor of California

This article discusses one of the dirty little secrets of health plans. They have future liabilities.

“[California] already owes another $48.2 billion in unpaid costs for retiree health and dental benefits.”

In the public sector, prime example California, these future liabilities tend not to be funded.

Suggestion from InsureBlog: if in this world of increasing pandemonium, you yearn for a brief respite of total silence - ask your town manager or mayor how much is the unfunded liability in your town employees' health plan.

Years ago, FASB decreed that all private companies disclose this unfunded health plan future liability and, in fact, reflect it as a cost on their financial statements. Not so for public entities like cities, counties, and states.

Or Medicare.

You don't think California is the only government entity with unfunded future liabilities, do you?

The unfunded future liability in Medicare is something like $60 trillion – give or take a trillion.

Just who do you think is going to pay these bills? Bernie Madoff? The tooth fairy? Your children and their children and their children?

Oh, and I can’t resist noting this additional gem:

“$11 billion in new borrowing”

See, that’s how states get out of debt these days. Ain’t it swell?

‘sfunny. It never occurred to me to borrow money to avoid indebtedness. Oh well.

All these things explain why I’m not qualified to be governor of California.

Another twist in the new COBRA rules

[Welcome Industry Radar readers!]

Here's another interesting twist in the new COBRA rules...the 65% subsidy starts phasing out if an individual's income is above $125,000 ($250,000 for couples) and is completely gone at the $145K ($290K) income point.

Admittedly this won't affect too many people, but let's think about how this works in practice. You get laid off. You take COBRA and pay the 35% that the plan administrator bills you. Your government pays the other 65% via the payroll tax subsidy to your ex-employer. You think that this is a great deal and add Obama to your holiday gift list.

Then you get another highly paid position and end up, at year end, with taxable income above the threshold. Guess how the subsidy gets paid back to the government...

You got it. On your tax return. Not only will you face a surprise tax bill, can you say "Underpayment penalties ??"

COBRA/Spendulus Update, Part 2

[ed: For background, click here and/or here]

FoIB and regular commenter Chad made this observation:

"As far as I can tell the subsidy applies to all group health plans subject to COBRA including dental, vision, HRAs, and [wait for it] health FSAs. Who wouldn't elect COBRA for their HFSA if the taxpayer is going to pick up 65% of the cost of the annual election. What a sweet deal!"

There was some discussion as to whether or not this was accurate, so I checked in with my Guru of All Things FSA/HSA/HRA, Pete Deist. He responded this morning that:

"It is but they still have to pay 35% AND have qualifying expenses to use up the money. I doubt many people will ... figure this one out."

So there you have it. For now.

And from co-blogger Bob Vineyard, this site has a plethora of up-to-date and helpful information on this complex and volatile issue.

Bad News, Good News

■ Item the 1st, Bad News Dept: On the one hand, it's remotely possible that, over the years, I may have had occasion to, um, disappoint my wife and/or daughters. Thankfully, however, it's never gotten quite this far [ed: that you know of]:

"(A)uthorities told [Kenneth Hughes] his wife of 34 years, Shirley Hughes, and his oldest daughter, Tammy Lewis, had plotted a murder-for-hire scheme to collect on his $200,000 life insurance policy."

Ouch!

But wait, there's a twist:

"(H)e was shocked at the allegations made against his wife but not his daughter." [emphasis added]

Memo to self: No more chores for Junior.

Of course, even had the plan succeeded, it's likely that neither wife/mom nor daughter would have collected a cent on the policy: since it's illegal for someone to profit from their crimes, the benefits would have been paid to either a contingent beneficiary or Mr Hughes' estate.

■ Item the 2nd, Bad News Dept: I've never been a big fan of dental insurance (at best, it's swapping dollars with the insurer), but this seems like a good reason to stay in-network:

"The attorney for a Woodland dentist told jurors that his client massaged women's chests as part of a medical treatment."

The, um, unorthodox "procedure" was ostensibly to treat his patients' temporomandibular disorder; TMJ generally affects the jaw and some facial muscles, so this defense seems unlikely to prevail.

Memo to self: Always accompany the wife to her dentist appointment.

■ Item the 3rd, Good News Dept: It seems safe to say that we've all heard of CAT scans, but would you believe that the MVNHS© is now using DOG scans?

Okay, it's not really the British health care system's newest medical tech, but a 64 year old woman's collie who made the potentially life-saving discovery:

"After Max began sniffing Mrs Burns's breath and then gently nudging her right breast, the 64-year-old examined herself and discovered a small lump in the same breast."

One wonders if this new technique will gain wider acceptance, but there's no doubt that, in this case, "Max" really was her best friend. Oh, in case you're wondering, Mrs Burns has "since had the lump removed and her prognosis is excellent."

Obama Doesn't Read InsureBlog

[Welcome FoxNews and Kaiser Network readers!]

Else he would know the difference between health insurance and health care. He would also understand that health care costs drive health insurance costs, and that simply extending insurance coverage to more people does nothing to cut the cost of health care.

So why is this important?

Because he's recommending that Congress spend an additional two-thirds of a trillion dollars to expand health insurance coverage.

Well, that's not quite right either: as we've pointed out many times here at IB, the gummint doesn't actually have any money: it simply takes funds from one group of people and redistributes them to another. This is called "taxes," and it's the primary means by which Congress can "pay for" such schemes.

The problem is that this is a well that can quickly dry up, especially as those folks targeted for additional taxation -- "the rich" -- stand by helplessly as their actual worth goes plummeting down the memory hole as the stock market continues its downward plunge. Then, too, there's the indisputable historical fact that higher taxes result in lower revenue for the gummint, thereby short-circuiting the process.

Historically, too, such programs inevitably outgrow their initially estimated size (cf: Medicare), and become cures which are worse than the underlying disease. Thus, a big problem becomes an even bigger one, with little hope of slowing down. Our political class has always been loathe to cut out programs which exhibit these traits (again, cf: Medicare), why would we believe that this one would somehow break that cycle?

The President is said to rely on "eight principles to guide his health reform effort," including freedom of choice as regards health care providers. But that flies in the face of experience: there are already two national health care schemes extant, Medicare and the VA. Both of these restrict that choice; why would any other program be any different? Indeed, how could another such system be any different?

The underlying problem is that the administration's “goal is still to bring down the cost of care and to get universal coverage." The problem is that it ignores the third leg: quality of care. As the saying goes, "you can have it fast, you can have it cheap, you can have it good. Pick any two."

Which ones would you choose?

Insurance Person of the Year Awards

No, not us (heck, none of us is even eligible!). Our friends at the Lexis-Nexis Insurance Law Center (which has deemed us as one of the Top 50 Insurance Law Blogs) is debuting its First Annual Person of the Year Awards for 2008. Categories include:

■ Policyholder Attorney of the Year

■ Insurer Attorney of the Year

■ Insurance Regulator of the Year

and

■ Insurance Jurist of the Year

According to FoIB Karen Yotis, nominations are being taken through March 6, "comments will be taken through March 13, and the ILC Board will make its selections at its monthly meeting on March 16. Recipients of the award will be featured in ILC’s April “Meet Me” campaign."

You can submit your nomination(s) directly to Karen via email.

Orphan Illness

The cost of health care in the U.S. is currently 16% of G.D.P. and projected to consume 25% of G.D.P. by 2025. Controlling the cost of health care is not just a U.S. concern, but worldwide.

To wage this war on health care inflation, the Spendulus Bill allocates $1.1 billion of the total $787 billion to compare the efficacy of drugs, medical devices, surgery and other ways of treating specific conditions. A total of $59 billion in the package is allocated for health care.

So what about the rest of the $59 billion? The bill allocates $20 billion to move us towards E.H.R. (electronic health records) which are supposed to save significant dollars in the big scheme of things, but even that is questionable.

So $787 billion distills down to $59 billion to tweak a portion of the economy that consumes 16% of the G.D.P.

Of that $59 billion they propose to use $1.1 billion to study the efficacy of health care treatment protocols.

Seems to be upside down in my opinion, but what do I know?

Already we are seeing fallout from the spending bill and it's impact on medications that may never reach the market. Drug giant Pfizer has pulled the plug on two drugs that are in the research stage.

The good news is, newer drugs usually cost more and may not be any more effective than current treatment protocol. Eliminating marginally effective drugs can be a good thing for your wallet.

The bad news is, if you have an orphan illness, one that afflicts only a small portion of the population, you may miss out on a new medication that might actually work.

Fibromyalgia is "a condition characterized by long-standing pain, has been the subject of controversy over its legitimacy, despite being recognized as a disease by the FDA and insurers." But fibromyalgia, once thought to be psychosomatic, only affects a relative handful of people.

There are two drugs on the market that have received F.D.A. approval for treatment of fibromyalgia . . . Lyrica and Cymbalta.

A 30 day supply of Lyrica runs $75 while a 30 day supply of Cymbalta is $125. Is one more effective than the other?

Like many illnesses, it varies by individual.

Would Esreboxetine, the Pfizer drug that is being shelved any better than Lyrica or Cymbalta?

We may never know.

Cavalcade of Risk #72 online now

From The Land Down Under, Russell Hutchinson hosts this week's roundup of all that's risky in the blogosphere.

Do stop by!

COBRA/Spendulus Update

[Updated - scroll down]

FoIB Bill Montgomery, CIC, points us to another "deal killer" in this bill. According to a memo from United Healthcare, "the subsidy provisions apply to state continuation coverage that is comparable to federal COBRA. That would include so-called "mini-COBRA" state laws that cover groups below the 20 employee threshold for COBRA."

Here in Ohio, groups with 2 (!) or more employees must indeed offer such an option; the key threshold is whether the (former) employee is eligible for unemployment compensation. If so, he or she may elect to continue the group coverage, at his/her own expense, for up to 6 months. Of course, this now means "at a substantial discount" for up to 6 months.

This does not bode well for small employers, who may have believed that they'd "dodged a bullet" when it appeared that these new reg's applied only to larger, COBRA compliant groups.

Of course, since "mini-COBRA" admin requirements are much less onerous than COBRA's, it's up to the (now former) employee to seek out this coverage. Still, if the extra costs are a problem for COBRA compliant groups, they could be disasterous for mom-and-pop shops.

Ooops.

Over on the Left Coast, co-blogger Bill Halper reports that California has CalCobra. He says that it "covers all group health plans (except those regulated by ERISA) with 2-19 eligible employees. The eligibility requirements are the same as Federal Cobra: as long as you are on the employer’s plan, pretty much anything short of walking in carrying an Uzi means you’re eligible. Voluntarily quitting your job, which would make you ineligible for unemployment, doesn’t affect your CalCobra eligibility. You can stay on CalCobra for 36 months; normally premiums are 110% of the employer’s premiums [ed: well, they were 110%. Now, not so much].

It’ll be amusing to see how this is implemented. Under CalCobra, the carriers are responsible for all of the administrative work. The employer notifies the carrier of a qualifying event, the carrier sends out the notice and then bills the participant and collects the premium. The employer is completely out of the loop. The Federal Law complicates things a bit.

OY! UPDATE: Just got this from one of our dental carriers: "Dental benefits are included in the health plan definitions of COBRA."

Exit question: If I didn't have dental before, will I be able to elect it at termination?

More (Bad) AIG News

From the Throwing Good Money After Bad Department:

"American Insurance Group, the insurance giant that is 80-percent owned by the US government, is in discussions with the government to secure additional funds so it can keep operating after next Monday, when it will report the largest loss in U.S. corporate history." [ed: emphasis added]

As we averred when the political class began schushing down this slippery slope, "When the gummint is your reinsurer, you're pretty much bullet-proof as to claims, reserves, you name it." And thus we see the results of unfettered access to someone else's (i.e. taxpayer) money. We're already some $150 billion into the struggling, ertswhile insurance giant, with no "happy ending" in sight. In fact, the rocket surgeons in Washington are now looking at swapping "some of the debt held by the government for equity in AIG."

What part of "enough is enough" don't these people understand?

There should come a point where the market is left to correct itself (I hesitate to say "must" because, with the gummint, all bets regarding common sense are off); sometimes this correction is painful. But it's the nature of risk; that is, sometimes you lose. Based on what we've seen so far, it doesn't seem likely that another infusion of hard-earned taxpayer dollars will net a long-term positive effect.

In other words, why won't they let us cut our losses?

Yummy! Grand Rounds is on the Table

The Blog That Ate Manhattan (burp!) hosts this week's roundup of medblog posts. From soup to nuts, you're sure to find some tasty food for thought.

Start Spreading the News

I'm leaving today. I want to be part of it, New York, New York.

Apologies to ole blue eyes aside, why would one of the wealthiest men in the world come to New York for surgery?

Because he can.

Saudi Crown Prince Sultan bin Abdul-Aziz flew to New York for surgery.

"This operation is the completion of medical tests and treatment his Excellency had received recently and it was ... successful,"

Details were not released.

the prince had arrived in New York for follow-up medical checks and treatment after undergoing a "prescribed convalescence" in Morocco.

Prescribed convalescence in Morroco. My guess is he doesn't have an HMO.

So why come here?

One would presume because the standard of care here is the best in the world.

Try convincing Michael Moore of that . . .

Knowledge is Power. Except when it's not...

[Welcome Industry Radar readers!]

Here at IB, an overarching theme is "empowerment." Generally, this means consumer driven health insurance plans (e.g. HSA's), but it also means taking a more pro-active role in learning about treatment options. Of course, the two are interrelated: when one has more "skin in the game," as in high deductible health plans, one has a greater financial stake in finding out as much as possible about what one's physician is recommending.

Which brings us to our first bit of news:

"Cancer patients who research treatment options are three times more likely to get the newest drugs than patients who don't spend extra time learning about their condition."

This makes sense, since it implies that those folks who take the time and put forth the effort to research their options are bound to know more about their possible choices than those who don't. These are folks who've scoured the 'net, read newspaper and magazine articles, and (presumably) talked to other folks with similar conditions.

And it gets better, since "those who pursued second opinions from doctors as part of their research were the most likely actually to be prescribed" one (or more) of the newer cancer med's, such as Erbitux, and Avastin. These are drugs which seem to slow the growth of tumors (although the article is quick to point out that they don't necessarily cure cancer).

On the other hand, those "first adopters" also face increased risk of developing negative side effects from these meds: "Avastin increases the risk of strokes, heart attacks and serious blood clots. Erbitux can cause a disfiguring rash."

Still, they show promise, especially for folks who face a death sentence.

On the other hand, just relying on the doc's, without doing one's own "due diligence," may backfire. The University of Michigan recently surveyed over 3,000 folks, all over 40, who had recently had office visits:

■ In "93% of talks about taking cholesterol or blood pressure drugs and in a majority of talks about cancer screening and elective surgery," the doc's initiated the conversation.

■ Doctors were much more likely to recommend taking action rather than adopt a "wait and see" posture.

That second may not seem like a big deal, but sometimes not taking action is the right course; at the very least, there's concern that, as researcher Brian Zikmund-Fisher oberves, "You need to have an opportunity to say yes or no."

Which is not to say that the doc's themselves are completely to blame here; after all, how many of us do make the time and effort to ask questions? Yet that's exactly what we should be doing, regardless of what kind of insurance we have. Or whether we're insured at all.

It really comes down to this: personal reponsibility and empowerment.

Carnival of Personal Finance is up

The Broke Grad Student hosts this week's extravaganza, replete with (questionable) YouTube clips. It's a great way to see a lot of interesting finance-related posts.