ObamaCare© vs Jobs

Over at PowerLine, Paul Mirengoff writes that "[e]mployers thus have a strong incentive not to employ more than 50 workers. By avoiding that threshold, they won't have to provide health insurance and will gain a cost advantage over competitors." That's because ObamaCare© requires employers with 50 or more employees (which includes, mathematically, even part-timers) to provide health insurance. Now, regular readers know that employers don't actually pay for health insurance anyway, but I'd like to expand on Paul's point a bit.

If it's a given (and it is) that employers don't pay health insurance or taxes, it follows that they won't pay any fines, either. We noted some weeks ago (far in advance of the MSM) that "employers may consider exiting the employer health market and send employees to state-run insurance exchanges;" so the effect is actually magnified.

Hunh?

Let's revisit that 2006 post on unintended consequences:

"When Joe was hired, his employer budgeted $60,000 for Joe's compensation; $50,000 is paid to Joe as wages, and the other $10,000 is sent to the insurance company and various government agencies (and, of course, some is to defray the costs of vacation and sick days, etc)."

Now let's presume that the cost of insurance has increased, say, 30% in the past 4 years (a reasonable supposition), and Joe's total cost of employment (what his employer puts in his paycheck plus sends to Washington and the insurer) has increased to $66,000 (a modest 10% over 4 years). If $13,000 of that represents his insurance costs, then the $2,000 "penalty" represents an 85% savings. Paying Washington an additional $2,000, but saving $13,000 in insurance premiums is an easy $11,000 net gain to his employer.

Now that's a good deal.

Friday COBRA/ARRA Update

As we noted previously, the latest COBRA/ARRA extension peters out at the end of this month. But according to admin guru Ceridian Benefit Services, it's looking increasingly likely that the extension will be, well, extended:

"Recently the Senate Budget Committee passed a bill that outlines the Senate’s health care priorities for the rest of the year. While the budget bill is not law, it signals that the Senate may extend eligibility for unemployment insurance and COBRA premiums subsidy until the end of the year."

No word yet on how we'd actually, you know, pay for that.
health insurance hdhp hsa cobra arra obamacare health care reform hipaa hcr masscare romneycare co-pays rx dental vision disability life insurance long term care ltc ltci sebelius cms smms medicare medicaid schip bonds surety short term medical mini med mini-med limited benefit defined benefit defined contribution deductible copay copays coinsurance co-insurance 80/20

HWR at IB

We have the delightful honor of hosting next week's Health Wonk Review. This is a great opportunity to see your best HWR-related post highlighted and available to a perhaps wider audience than "normal." Submissions should 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 health "policy, funding, insurance, managed care, infrastructure, IT, the uninsured, economics and trends" will be accepted.

You can submit your post (or even someone else's!) via Blog Carnival. Submissions are due no later than 9AM (Eastern time) next Wednesday (the 12th).

Caution: Short Term Wonkiness Ahead

Short Term Medical (STM) insurance is kind of an interesting product: written for a short, specific length of time (as opposed to year-to-year for "regular" major medical plans), they provide quick, simple and relatively inexpensive coverage for folks between jobs, or in their new job's probationary period, or for recent grads (although that market will probably take a hit due to ObamaCare©). Typical STM's couldn't be simpler: the plan's in effect from Date A to Date B, there's a deductible (which is the real point of this post), and some co-insurance. Doctor's visits, prescriptions, MRI's (and so on) accumulate towards that deductible and co-insurance; once the out-of-pocket maximum is reached, the plan pays 100% up to a specified amount (which may also change due to ObamaCare©).

All of that is by way of background for what I really want to talk about: the nature of the STM deductible. There are really three different iterations:

■ Policy Term

■ Per Cause

■ Per Day

"Policy Term" means that the deductible accumulates over the life of the plan (e.g. 3 months, or 62 days, etc). Per Cause means that there's a separate deductible for each claim (one for the broken arm, one for the stitches, another for the MRI). And Per Day means that each day that there's an expense, the deductible applies.

Now, I've always used plans with the Per Term deductible. This seemed (and seems) to me the easiest to understand and fairest to apply. But I received an email today from a marketer pushing the Per Day configuration, including some pretty compelling evidence that this may be a better way. They made their case with a simple FAQ:

A daily deductible means more out-of-pocket for [the insured].

False. [A Per Day deductible plan] actually minimizes out-of-pocket exposure with a low daily deductible instead of a larger, calendar-year deductible plus coinsurance out-of-pocket. The daily deductible, coupled with the added protection of a manageable out-of-pocket maximum, gives clients comprehensive benefits at an economical price.

And:

A daily deductible will be confusing for [the insured].

False. Once the daily deductible has been met, additional same-day covered charges are paid at 100 percent. The client will be able to clearly understand that his or her total out-of-pocket for a given day is the selected deductible amount.

That makes some sense to me, but I'm curious if any of our readers have had any experience with these types of plans, good or bad, which they'd like to share, as well as any conclusions about whether they're better or worse than Per Term plans.

The name is Bond, Surety Bond

No, we're not talking about James Bond's younger brother, but a very specialized area of insurance. Surety is a promise to pay, which sounds a lot like "insurance." But surety bonds are a bit more complex than "regular" policies.

And that's as far as this blogger's willing to go with the idea. Recently, we were offered some insights into this rather arcane area of insurance by Kevin Kaiser, a principal for Surety Bonds Dot Com, a nationwide leader in that sector of our business. Take it away, Kevin:

Although surety bonds are different than insurance, the two often get confused. It doesn’t help that “surety bonds” and “surety insurance” mean the same thing, which tends to confuse consumers. Making use of surety bonds guarantees project owners and contractors fulfill any and all contractual agreements.

■ The primary difference

Even though money could change hands, surety bonds are not insurance. Surety bonds involve three parties, whereas most insurance policies rely on policy holders’ premiums that cover any losses. Instead of placing the risk with one party, insurance policies usually distribute the risk over its policy holders.

■ How surety bonds work

Let’s consider an example. A city’s parks and recreation department wants to build an outdoor pool for the summer months. The city hires a contractor who gets a payment bond.

■ Surety bonds’ payments

Now, if the contractor fails to hold up its end of the contract, workers and subcontractors still get paid. The surety guarantees that the contractor pays any subcontractor who files a claim against the bond. Most surety bonds include a clause that requires the contractor (principal) to make such repayments when the surety pays out a claim. Thus, the city and surety do not assume any financial risk in the unlikelihood of the contractor’s default.

It seldom happens, but the surety has to cover costs if the principal cannot. Thanks to stringent underwriting procedures, surety companies eliminate unpredictable companies.

■ The cost of surety bonds

Surety bonds do not anticipate financial loss like insurance does. Consequently bond premiums typically finance underwriting and other prequalification services. The cost of the premium depends on the surety company, the type of bond applied for and the applicant’s financial history. One to four percent is a sound estimate of premium costs, but if a surety company classifies an applicant as high-risk, the premium falls between five and 20 percent of the bond amount.

■ Getting a surety bond

Applicants with mediocre credit or a fledgling business can still obtain a surety bond. Of course, lower credit scores make applicants more likely to be labeled high-risk [ed: we understand that this is the case with, for example, home and auto insurance, as well]. Some startup companies may be legally required to get a bond to pay for an operation license. To determine what kind of bond an applicant receives surety companies consider credit, references, reputation, financial reserves and the ability to operate among other things.

The time it takes for a surety to approve a bond depends on the type of bond, restrictions of the surety and the underwriting process. After paying the premium, applicants will probably get the bond in one or two days. Processing a surety bond may take up to four days, though some sureties approve bonds immediately.

Thanks, Kevin! I have to admit, I’d never really considered the surety side of the biz before; this helps make it a bit more accessible.

ObamaCare© Lacks Teeth

In what's sure to be disappointing news to Austin Powers, it turns out that key portions of ObamaCare© don't apply to stand-alone dental coverage (I guess the ADA's lobby was all gummed up). For example, restrictions on annual and lifetime benefits caps don't apply, nor does the requirement to carry 20-somethings.

That really bites.

[Hat Tip: The Dental Care Plus Group]

EMR: Homespun Privacy?

Sometimes, two seemingly disparate items hit my radar simultaneously, and it's interesting to see if there's a "connection" of some kind. Of course, some of these are more obvious than others, as in this case.

My friend Holly R sent me the link to a new, free program that organizes and stores your medical info on your computer. We've seen that on-line services like Google let you centralize your personal health data, but they also raise (legitimate) privacy concerns. On the other hand:

"HeyDoc! ... lets you organize detailed data about your health. But all of it is stored on your computer. It remains under your control. You can use it however you'd like."

That last part may be the most important: "You can use it however you'd like."

When you control the data, you get to make those decisions. Contrast that concept with:

"Vice President Joe Biden, touting the importance of electronic health records, on Tuesday announced $220 million in grants for 15 communities to pave the way for wide-scale use of health information technology."

These programs may sound similar to HeyDoc!, but there's at least one big difference:

"Under the government policies, patients will not be able to opt out of having an electronic health record, said Sue Blevin, president of the Institute for Health Freedom."

Given how easily credit and other information has been compromised, that seems a legitimate concern. I'd feel a lot more sanguine about this idea if it weren't so Orwellian. This administration seems quite comfortable forcing people to toe the line (cf: Individual Mandate). I thought they were "pro-choice."

Cavalcade of Risk #104: What's on the menu?

Jason Shafrin, aka The Healthcare Economist, presents a tantalizing buffet of delectably risky posts. Try the veal, he's here all week.

May is National Disability Income Awareness Month

We talk a lot about health insurance (to pay the docs and hospitals) and life insurance (to pay the funeral home and provide funds for those left behind), but we don't write a lot about disability (or income replacement) insurance. This valuable, but undersold and underbought, coverage can help put food on the table and keep a roof overhead if one is seriously hurt or ill.

Many people believe - erroneously - that Social Security is all the safety net they need. Of course, a lot of folks also believe - erroneously - that Medicare will pay for their long term care needs. Neither of these are really true in practice, which is why it's so important to understand what disability insurance can (and can't) do, and how much one might need.

Fortunately, the folks at the Life and Health Insurance Foundation for Education (LIFE) have set up a helpful, easily navigable website so folks can get a clear picture of how this kind of coverage works. Called LifeHappens, there are all kinds of tools and resources available, including videos like this:



Do check it out.

Grand Rounds: The 1st (Annual?) Non Narcissist, Non Personally Aggrandizing Edition

This one's special: as usual, there are some terrific medblog posts. But the Grunt Doc has added a twist: he requested that we "don’t send me a post of yours, send a post of someone elses’." Want to know who I "nominated?" Then click on over.

Callous

Last weekend, we went out to dinner in Palo Alto with some friends. As we were walking back to our car, we passed a well-dressed lady at an outside restaurant with her chihuahua sitting on her lap. On the next block were a couple of homeless men sitting on the sidewalk, asking for money and holding various cardboard signs.

David turned to me, "You know, I bet that dog gets better health care than those homeless guys."

I replied, "Probably, but the dog gets put down when it develops an expensive enough medical condition."

I'm curious. Can anybody cite authoritative stats (and the source) on the average lifetime cost of treating an indigent person through the Medicaid/MediCal/Medicare/MediEtcetera/VA systems?

Congressional ObamaCare© Screw-up, Cont'd

Several weeks ago, we reported that the Congressional Research Service had concluded that ObamaCare© "may remove members of Congress and Congressional staff” from their current coverage, in the Federal Employees Health Benefits Program, before any alternatives are available."

As if that wasn't bad enough, now comes word from the CRS that "[ObamaCare©] could impose tens of millions of dollars in fines on Congress, state and local governments."

But that's not even the worst of it:

"[A] slew of states are challenging the health-care law’s legality in court. If governments were found to be exempt in court, a ruling could establish one set of rules for the private sector and another more lenient set for the rapidly expanding public sector."

In short, there are now even more constitutional questions than just the individual mandate. And on top of that (gee, it's not like we want to pile on, it's just so darned easy), "[a] spokesperson for Speaker Nancy Pelosi admitted the government would be considered an “employer” under the law, thus subject to the fines."

In short, no one really knows. And as Bob's pointed out, there are actual, legal deadlines looming. What happens when (I think we're past "if") these aren't met?

A good friend forwarded an email invitation he'd received from a local insurance agency. These rocket surgeons boast that they'll "provide ... the most complete, accurate and up-to-date information available ... After this seminar, you will know what is fact, what is fiction, and you will understand the reality of what is "yet to be determined."

Quite an accomplishment, considering the folks that actually wrote this train-wreck don't have a clue. Could be worth it for entertainment value, though.

Top 50: IB Admin?

Not sure how we made this list, but we're really quite flattered:

"A career as a hospital administrator is exciting, fulfilling and demanding. The hospital administrator, like the doctor or nurse, plays a huge role in saving people’s lives, but the administrator doesn’t need a scalpel. You might discover from the current blogs listed below that hospital administrators assist their medical staffs, have a hand in local publicity, technical issues and usually has a broad knowledge about health care business, policy and law. These top 50 health administration blogs provide resources for those topics."

And there we are, under the Health Insurance and Disease Management Blogs category. We're in august company, as well: Jaan Sidorov's Disease Management Care Blog and Julie Ferguson's Workers’ Comp Insider also made this list.

Thanks to Bill for the heads' up!

Cavalcade of Risk #104: Call for submissions

Jason Shafrin, The Health Care Economist, hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 3rd). Please remember 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.

OMB Director: Rationing out the Truth

Via HotAir, Peter Orszag (Director of the Office of Management and Budget) admits (boasts?) that ObamaCare© explicitly rations care, and that so-called "Congressional oversight" is but a myth:

NBA meets HWR

Jason Shafrin hosts this week's edition of the Health Wonk Review. He presents his 'Top 16," much like the playoffs.

In Fairness: HHS Shecantbeserious Update

Earlier this week, we reported that HHS Shecantbeserious had deliberately withheld damning information regarding the true costs of ObamaCare©.

According to Jake Tapper of ABC News, the Secretary has disavowed any knowledge of this action:

"That story’s not true,” Richard Foster, the chief actuary for the Center for Medicare and Medicaid Services, told ABC News ... Foster tells ABC News that he received a copy of the bill on March 18, and knew then that he wouldn’t be able to do a thorough analysis of it before the vote."

The bill was rammed through on March 21st.

At this point, we really don't know who's telling the truth, so we'll leave it to our readers to form their own opinions.

About that "You can Keep your Current Insurance" Promise

Yeah, well, not so much:

As with so much of ObamaCare©, this one's going under the bus, as well. Recently, I pointed out that savvy folks will avoid buying major medical insurance altogether, opting instead for the much less expensive "penalty" (i.e. "tax"), secure in the knowledge that they can easily pick up coverage later. As Bob points out, though, these folks need to be aware that the ObamaPool may not be open to them at that time (or it may be, who knows). Regardless, Corporate America has already reached the same conclusion:

"The president didn't have to actually strong-arm companies into dumping their employee health insurance because his bill carried financial incentives to virtually guarantee that result ... like AT&T found out, paying $600 million in penalties will allow you to stop paying $2.4 billion for insurance."

Quite so. It seems to me that this is likely by design: what quicker way could there be to a so-called "Single Payer" (i.e. Government-run) system?

Maybe it's just TPC (The Phone Companies), because Verizon has also seen the light:

"To avoid additional costs and regulations, employers may consider exiting the employer health market and send employees" to state-run insurance exchanges."

Indeed.

[Hat Tip: PowerLine]

Wednesday Link-Fest

We're always grateful for the interesting tidbits we receive from loyal readers and others; the challenge is that many of these items just don't merit their own post. Still, it would be selfish of us not to share our bounty:

First up, another STOLI death mystery solved. Stranger Owned Life Insurance policies are the source of much confusion, occasionally leading to murder most foul. Thanks to Bob, we learn that one insurance agent has been "arrested on numerous counts of alleged fraud and grand theft in connection with a stranger-originated life insurance (STOLI) scheme involving $78 million in death benefits." Yikes - that's a lot of life insurance. We presume that The Million Dollar Round Table discourages this kind of "production."

Next, Companion Global's Brian Kroll points us to an interesting video about medical tourism. This type of coverage helps to pay for medical care folks seek outside their home countries.

Our favorite CMS Guy, Jack Cheevers, tells us that the "U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) ... announced grants to 41 health programs operated by the Indian Health Service; tribes and tribal organizations; and urban Indian organizations." We've written about the Indian Health Service before; this promises to be more positive.

And finally, our good friend Lindsi Thomas alerts us to an interesting podcast by Reason's Peter Suderman, who discusses "problems that came about when states like Hawaii, Tennessee and Massachusetts tried to implement universal health care coverage."

Enjoy!

More ObamaCare© Shenanigans: HHS Shecantbeserious vs The Truth [Updated]

Why is this not surprising?

"The economic report released last week by Health and Human Services, which indicated that President Barack Obama's health care "reform" law would actually increase the cost of health care and impose higher costs on consumers, had been submitted to the office of HHS Secretary Kathleen [Shecantbeserious] more than a week before the Congressional votes on the bill."

Get that?

These folks knew that the final bill was going to be much, much higher than advertised, and withheld that vital information anyway. Would it have made a difference in the final vote tally? That's debatable and, of course, unknowable. But it might have given political "cover" to folks on the fence.

Which was exactly why it was buried:

"The reason we were given was that they did not want to influence the vote," says an HHS source. "Which is actually the point of having a review like this, you would think."

Ya think?

[Hat Tip: Ace of Spades]

UPDATE: There appears to be some question as to the veracity of this story. Please click here for details.

Babelicious Grand Rounds

ChronicBabe hosts this week's "ladylike" Grand Rounds. It's pink, it's powerful, and it's pfull of great medblog posts.

HIPAA Jumps the Shark

[Welcome Industry Radar readers!]

The father of a close friend is about to begin chemo for cancer. His oncologist's office has a special area for this, with seats for up to four patients; each treatment session lasts 4 hours.

Unbelievably, his wife is not allowed to sit with him during this physically and emotionally painful time.

Why is that, you ask?

Because she "might see other patients, which would violate their HIPAA privacy rights."

Really?

Seeing another patient somehow violates their privacy rights? What if she was in the downstairs waiting room and one of these poor folks walked out? Wouldn't she see them then? How about on the street?

But Henry, what if one of these patients disclosed their name?

Well, then, that person just waived their privacy under HIPAA; problem solved.

I suggested an alternative: mom should just tell the doc's office that she's gay.

HHS Shecantbeserious vs the 10th Amendment

And so it begins:

“Only hours after the Florida House and Senate voted to “opt out” of the new federal health law, the top U.S. health official said Thursday night that will not be permitted.

Without mentioning any particular state or going into detail, Health and Human Services Secretary Kathleen [Shecantbeserious] said that state and local officials can vent all they want about a so-called “federal takeover” of health care. But they cannot deny their citizens access to its benefits or requirements.”

Really, Madame Secretary?

Really?!

I ask because you were wrong about how and when kids would be covered, about the cost of ObamaCare©, even about whether or not the CongressCritters who passed it are even covered by it.

And you seemed open to the idea that states could opt out of the new risk-pools, so why would this "flexibility" not extend to other components of this train-wreck?

And so it seems reasonable to me that you might want to take a more, shall we say nuanced approach when it comes to opining about issues best left to those actually familiar with the 10th Amendment.

Incredibly Stupid Carrier Trick? Maybe. [Updated & Bumped]

[Please scroll down for important update]

It would seem that WellPoint is eagerly looking forward to government intervention, if not outright control:

"They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators."

If true, this is not only incredibly short-sighted, but morally egregious.

But is this story true?

Certainly we've seen our share of Stupid Carrier Tricks, but we've also seen how the press routinely misses both the facts, and the point. There are a number of facts missing from the stories I've seen, starting with how many of these women had already been diagnosed with breast cancer before seeking coverage, and whether or not this was disclosed on their applications. It would also be helpful to know if there are other health issues involved which might have triggered rescission.

Unfortunately, a lot of this information is probably covered under HIPAA privacy rules, effectively gagging the carrier from coming to its own defense. But I didn't see anything in the news stories thus far which even hint that the reporter tried to ascertain whether or not there was more here than we're being told.

If, and it's a very big "if," WellPoint is simply casting these women off willy-nilly, then they deserve any and all consequences that come their way, and we'll proudly add this episode to our pantheon of the aforementioned Stupid Carrier Tricks.

At this point, however, that would be premature.

UPDATE: [NB: the original post was published on Friday, April 23rd] Well, that didn't take long. Turns out this is actually a "Stupid MSM Trick." Bob just alerted me to Reuter's correction, which pretty much undermines the entirety of the original story. To wit:

"Removes all references to Robin Beaton ... that the insurance company that canceled her policy was not a WellPoint subsidiary."

And:

"Technically, rescission was not the reason Reilling lost her health insurance ... Rather, it was canceled because she did not answer letters from her insurance company requesting information about her employment history."

"Technically." Kinda like saying "technically, Joe didn't rob the bank at all, but he was riding a bike." Unfortunately, the damage has been done to WellPoint's reputation (such as it might be); one can't "unring the bell."

Now, one may take issue with the idea that one's employment history should form the basis for a rescission (I certainly do), but this is a far, far cry from the sensational headline claiming that breast cancer patients are routinely kicked off their plans. But it's of a piece with these kinds of stories (as I mentioned in the original post): go with the sensational (but baseless) headline, paint a stark picture of dire straits, and hit "publish." So much for "professional journalism."

Told Ya so...

Courtesy of RedState:

One note: early on (at about :35), one of the talking heads makes the critical point that "14 million Americans ... are going to be losing employer-based health coverage." [emphasis added]

This is critical because, as we've pointed out ad naseum, health coverage is not the same as health care. Why is that critical? Because as we've also pointed out, ObamaCare© was never about "care."

ObamaCare©: Dunh!

As Bob notes below, failing to anticipate costs can be, well, costly. And it's not just at the state level:

"The sobering assessment by the Centers for Medicare and Medicaid Services concludes ... that the double-counting of Medicare spending -- as both savings and as a means to shore up the debtridden government fund for seniors' health care -- means the cost is unrealistic."

This should come as no surprise to those who've been following this train-wreck, but it's worth repeating: ObamaCare© has never been about controlling health care costs, it's been about government control of health care itself. This news simply underscores that point; note as well that the innocuous "1 percent over 10 years" is just silly: as we continue to see, this administration has no clue about how to actually (or accurately) predict the full impact of their efforts.

For example:

[Chart courtesy Innocent Bystanders]

MVNHS©: Sex and Drugs (But no Rock and Roll)

The bad news for (certain) Brits is that Big Pharma, um, Biggies Novartis and Roche are looking for the exit as the Much Vaunted National Health Service© continues to flex its muscles. There are several issues at stake, the two most prominent being a conflict in how much the firms can charge for their products; the other issue arises because the approval process for new meds is perceived to be "too expensive and bureaucratic."

The result: a potential loss of some 5,000 jobs, and the financial benefits that accrue therefrom.

The good news is that, despite (because of?) rationing for medically necessary services (and savings from actual medications), the MVNHS© apparently has all kinds of extra money lying around, all the better to ensure that transgendered Brits are, um, served:

"The number of sex change operations carried out on the NHS has almost tripled in the last eight years."

These numbers are a bit skewed, since the ratio of men becoming women to women becoming men is roughly 70:1. And I'm not going to get any more detailed than that.

At about $15,000 a pop, that translates to some $2 million for this apparently vital public health service.

Guess there's no pill for that, now.

Interesting Carrier Tricks: Aetna Edition

[Welcome Industry Radar readers!]

Aetna recently notified agents in its Mid-Atlantic Region that the carrier would be discontinuing its "100%" Health Savings Account (HSA) plan designs. This is by far the most popular (and sensible) configuration for these kinds of plans (once the deductible is met, covered expenses are paid at 100% - no confusing 80/20 or co-pays). As a free-market kind of guy, I certainly respect this decision, even as I have trouble understanding it. Regular readers may recall that, a few months ago, Aetna undertook similar drastic measures with regard to its Health Reimbursement Arrangement (HRA) plans.

Now, I don't do a lot of business with Aetna - they're a fine company, but I just haven't found them to be all that competitive in this market - but was curious why they'd take such a dramatic step. Fortunately, I was able to connect with a carrier rep, who was happy to answer my questions as best she could (given that this is a recent development, details were understandably scarce).

So far, this blanket withdrawal affects only the "small group" market (2-50 lives); it's unclear whether it will eventually extend to the individual market, as well ("large group" plans are in another business unit). Our source found it ironic that they had just announced a raft of shiny new 100% plans, only to see them pulled a few days later.

I was curious about Aetna's rationale for scrubbing these seemingly popular plans. And that, actually, turned out to be the problem: they were popular. Very popular, in fact: apparently, quite a few groups found that they could install one of these plans and use the premium savings to reimburse employees (through their HSA's) enough to compensate for any additional out-of-pocket, thereby defeating the entire purpose of the plan. Claims apparently soared, and the company felt the sting of increased losses. This was basically a pricing problem: not enough premium to cover the unanticipated additional utilization. Of course, this begs the obvious question: why not just increase the rates on these plans instead of pulling them altogether?

The logic of that conundrum also puzzled our rep, but of course, what Home Office says...

Turns out that this is not necessarily a national phenomenon: while Ohio plans were deleted, this was not the case in other states. A big part of that is because loss ratios on this line were markedly different even in nearby markets. For example, I was told that Ohio loss ratios for this product ended up in the mid-90's, while just a few hundred miles away, Chicago-area losses were in the mid-70's. That's quite a difference. I did ask if we could see some of the actuarial studies which underpin these numbers, but (understandably) these probably won't be forthcoming.

One last bit that I found interesting, but may be a bit "wonkish:" based on the numbers, Aetna's actuaries seem to believe that a $2500 deductible is too low. While that might seem counter-intuitive, I'm not convinced that it is. Think about it: a typical co-pay plan with a $1000 annual deductible would actually incur $3000 in total out-of-pocket costs. By contrast, the maximum exposure on that HSA plan is about 17% less, with a lower premium, to boot! So one can see the attraction if the product is being "gamed."

It's a shame, really, because the point of these plans is to encourage consumer participation in the process, not to over-utilize.

[Hat Tip: Sara J]

Cavalcade of Risk #103: Up & Running

My Wealth Builder hosts this week's collection of risk-based posts. Based on a unique ratings system, MWB presents posts in order of previous participation.

All the more reason to participate!

Another way is to host your own Cav: just drop us a line to claim yours!

Unum, IB and Long Term Care: Same Page?

Among other products, Unum sells Long Term Care insurance [full disclosure: I am licensed to do business with Unum]. This is a growing market (as "Boomers" age and as 50-something's start "getting it"), with decent competition among the top-tier carriers.

Now though, these private-sector companies face competition from the government.

Or do they?

An email I received from Unum's R.G. Peterson, a sales executive with the company, asks "How does the health care reform package affect Unum’s long term care insurance and other private plans?"

And that's a good question.

As we've previously pointed out, the so-called "CLASS" (Community Living Assistance Services and Supports) Act ostensibly offers a gummint-sponsored long term care plan. There are few details available as yet, but Unum has provided some much-appreciated clarity in the form of a downloadable "recap." One of the first things I noticed was that this coverage will apparently not qualify as a "Partnership Eligible" plan. And the rocket surgeons who've decided that the gummint is capable of designing its own version one of the most complex insurance policies extant can't even tell us how much such a plan will cost.

Try that in the open market.

Still, as Mr Peterson mentions (and as we noted some time ago), comparing a real plan to one from the government may be just the ticket to convince you (or someone you love) to start getting serious about this most important coverage.

Travel: Interrupted

The Icelandic Etna just keeps spewing, and thousands of folks on business trips, family vacations, even weddings are stuck in airports while their planes remain grounded. In addition to the inconvenience of it all, there's also no question that there's a monetary price to pay, as well.

I don't think we've ever discussed travel insurance (not to be confused with travel medical coverage). More commonly known as "trip interruption insurance," this type of coverage falls under the Property/Casualty rubric. There are, of course, differences in coverage between plans and carriers; regardless, there are typically three general categories of risk: travel accident coverage (which helps pay for ER visits and the like), trip interruption and/or cancellation, and baggage loss. It's the second of these on which we'll focus today.

According to the New York Times, the "travel insurance industry is generally paying claims to travelers stranded in Europe and elsewhere by the drifting Icelandic volcanic ash, treating it mostly as a weather-related event in their policies, industry officials said."

They expect to pay millions of dollars in claims, but for what, exactly?

In this case, the two primary exposures would be for:

■ Trip cancellation: that is, to cover non-refundable fees to airlines and/or booking agents, tour operators and the like. These can be pretty substantial.

■ Trip interruption: there are likely a lot of folks who budgeted for a week's stay at the Ritz who must now pony up who knows how many additional days. This coverage could help ease that pain.

Local expert Bill Montgomery, CIC recommends that, in addition to this kind of insurance policy, travelers check to see if their credit card has trip protection built in, as well. He also suggests that folks contact their own agent (and/or a local, independent agent) to see if such coverage can be obtained from that trusted source.

[Thanks to TravelGuard for policy information]

Grand Rounds: Seeing IS Believing

The Sterile Eye presents a compelling image-based collection of appealing medblog posts. Do stop by for a unique and fun way to enjoy this weekly compendium.

Laudable Carrier Tricks: College Edition [UPDATED]

While I have my issues with the whole idea that 26 year olds should be considered "dependents" on their parents' health insurance, it is the law (for now).

Or rather, it will be the law, come late September. For now, when college students "age off" ther parents' plans, they're on their own (which is perhaps a valuable lesson in personal responsibility). Nevertheless, soon carriers will be forced to postpone that separation.

United HealthCare (while the target of several episodes of Stupid Carrier Tricks) has pre-emptively decided to implement that postponement effective immediately. According to an email from the carrier:

"We want students to graduate into a secure future, not the ranks of the uninsured. We saw an issue with this possible gap in coverage and are the first health insurance company taking action ahead of the new requirements."

Of course, the premise - that 22- and 23-year olds aren't capable of purchasing their own insurance - is quite flawed. But the sentiment is compelling, and so UHC "will work with ... clients that wish to extend the health coverage that graduating college students currently have under their parents' plans."

Partial kudos to UHC.

UPDATE: My inner cynic finally determined why I found UHC's concern about young adults not joining "the ranks of the uninsured" so disingenuous. Healthy young people are essentially "free money" to insurers, producing few claims. When a 22- or 23-year old ages off his/her parents' plan, the carrier loses that money; since so many young people choose to remain uninsured, carriers lose revenue. By pre-emptively implementing the new regs, a carrier mitigates that loss.

Yes, dependent coverage has historically been less expensive than a stand-alone plan (although that will likely change now), but "half a loaf..." Can't say I blame them, either.

Latest on COBRA/ARRA

We haven't written about the COBRA/ARRA subsidies in a while, but there's good news for folks who've recently been involuntarily terminated:

"The Continuing Extension Act of 2010 was passed by both the U.S. Senate and the U.S. House on April 15" (how ironic!); the president signed it into law later that day.

The previous extension had run its course as of March 31st; this legislation breathes new life into the program by extending the subsidy for another couple of months (through May 31st). Regardless, the total length of time one may be eligible for the premium assist is 15 months. So folks currently "running out the clock" won't see any relief by way of this extension.

As always, we would urge those readers with more specific concerns to contact their (former) employers' HR folks for detailed, personalized answers. The Department of Labor also has a helpful website.

[Hat Tip: Beth D]

NY and ObamaCare©: "Your lab results are in"

As we've opined here on numerous occasions, one of the best things about individual state-based health care "reform" is the ability to see how these things work in the microcosm, before implementation on a national scale. Such is the case with MassCare (aka RomneyCare), about which Bob notes below the most recent problems with that system. Each state represents a laboratory, each system an experiment.

Directly west of the Bay State, we can see how New York's "experiment" is faring. In a word: Poorly.

To wit:

"New York’s insurance system has been a working laboratory for the core provision of the new federal health care law — insurance even for those who are already sick and facing huge medical bills — and an expensive lesson in unplanned consequences. Premiums for individual and small group policies have risen so high that state officials and patients’ advocates say that New York’s extensive insurance safety net for people like Ms. Welles is falling apart."

An "expensive lesson," indeed: according to insurance industry trade group AHIP, the Empire State boasts the highest individual medical premiums in the country. The problem is that, although New York does have a fairly high cost of (medical) care, the plans are designed so that only the unhealthy have any real incentive to buy health insurance. Because "normal" markets attract a mix of healthy and unhealthy, average rates can remain affordable for most. When the scale is tipped to such an extent as we see in New York, though, healthy folks are understandably reluctant to so heavily subsidize those in ill health.

So how does this relate to ObamaCare©? Well, most healthy folks will (correctly) conclude that the ostensible fine (tax, really) for going without insurance is much lower than premiums under a system which rewards those who wait until the last minute to buy a policy. And the policies themselves will be much more expensive because of guaranteed issue, immediate coverage of pre-existing conditions, and a new raft of mandated benefits.

To quote Bob: Can you say "train wreck?"

[Hat Tip: RWN]

Stupid Blogging Tricks‏

This one is so jaw-droppingly insipid that I had to wash out my eyes:

“Corporate Hall of Shame Award ... Angela Braly, president and CEO of health insurer WellPoint, got a nice bonus that raised her salary to $13.1 million from $8.7 million the year before.”

Exactly why is this shameful?

An executive serves at the pleasure of his or her board; if he or she isn't doing the job well, then they're gone. Rewarding people for doing their job well is called "capitalism," and it is by far the most successful economic system in the world.

By way of contrast, Alex Rodriguez made $231 million last year. Is that "shameful?"

Brad Pitt gets paid $30 million to act in a movie. Is that "shameful?"

Lady Gaga makes millions of dollars to sign and strut. Is that "shameful?"

Ms Braley (while not my favorite person in the world) makes what she makes because WP stakeholders think she's worth it. Or does Dr Brayer just have a problem with a woman executive making that much money?

The Myth of the "Richdoctor"

No, not the witchdoctor, the richdoctor. And what, pray tell, is this "richdoctor" of which you speak? Well, let's let guest-blogger and Medical Office Manager Kelley Beloff explain:

“Arizona Doctor says Obamacare will force him to close shop”

That is the headline of the article sent to me by a colleague. Is this true? Will physicians stop practicing if Obamacare goes into effect? YES. Physicians have been saying for years that there is too much government regulation and the pay is simply too low. They are simply tired of the intrusion by the government. But there is more to the story:

“Scherzer said he hasn’t been fined but he was audited by the Centers for Medicare and Medicaid Services several years ago and spent months awaiting their findings.”

This statement refers to the RAC, the Recovery Audit Commission, which are hired mercenaries that go into physicians’ offices looking for Medicare Fraud and have unrestricted power to fine any physician they find who has committed fraud, whether knowingly and unknowingly. The fines are extensive and have bankrupted physicians since the implementation. The “auditors” are paid a commission based on the amount of fraud found, thus the investigations almost always find fraud. This physician was very lucky that he survived the RAC: most do not.

“He also takes issue with the Democrats’ argument that much of the waste in the health-care system is driven by a profit motive on the part of physicians.”

Ah, the richdoctor syndrome. Notice "richdoctor" is one word. This is a myth built around wealth envy. It is this attitude that was behind the founding of the RAC (is it a coincidence that this was a favorite form of torture during the inquisition? Just saying). Anyway, back to those pesky richdoctors. I recently received a report stating that the average reimbursement of the average office visit code (99213) for physicians is $65.49. Yep, $65.49. That is all your physician gets for seeing you in a normal 15 minute appointment. This is the average, so some insurances pay less; Medicare is one that pays less. Medicare reimburses $63.74. But Kelley, you will say, that is $254.96 an hour, which is a lot of money to make in an hour. You’re right, but let’s look at a few factors:

Overhead:

1) Government has mandated that all physicians implement an Electronic Medical Records system by 2014 or face punishments. An average EMR costs $100,000 for installation and the first physician. Any additional provider costs between $30,000 and 50,000. That is the initial payment, there are yearly payments to update the software and keep it functioning.

2) Government has mandated that all physicians must have on staff a certified coder by 2012 or face punishment. The average annual salary for a certified coder ranges from $50,000 to $75,000. Once the mandate goes into effect, that figure will raise.

3) Any efficient medical office needs three staff members to every provider. Do the math for your physician. The average salary of medical staff is $30,000 (including benefits).

4) Patients enjoy a clean office with lights, restrooms, heat and air conditioning, exam tables, sanitary equipment, new needles, chairs in the waiting room, telephones, fax machines, computers. These aren’t free (to the provider).

5) Patients expect the medical office staff to bill their insurance companies, deal with any problems, see them promptly when they are sick, fill out their paperwork, and generally manage their healthcare, all without any cost to them.

Thus, all of the overhead expenses are paid by that $65.49. When this physician started practicing, the ratio of overhead to physician’s salary was 20:80. Today that ratio is reversed. Overhead in any medical office accounts for 80%. The physician, if he is lucky, gets 20%. So for math, 20% of $65.49 is $13.10, which is $52.40 an hour. This physician went to medical school for 4 years, internship, and residency for $52.40 an hour. And when Obamacare goes into effect the reimbursement rates will be LOWERED. Why would any sane person want to go into medicine?

“It’s interesting how every time someone has concerns or opposed the bill you hear the Democratic party call the individual or group liars. It’s almost the mantra,” Scherzer said. “They’re providing disincentives to care that are making the practice of medicine repugnant.”

This point almost goes far enough: I would say IT IS THE MANTRA. The political environment has made it almost impossible to practice medicine. The government has put a wedge between patients and physicians and that wedge is MONEY. Patients today believe that they should not have to pay their medical bill, not their deductible, not their co pay, not their co-insurance, not their out-of-pocket expenses. NOTHING, NADA, NONE. My staff is harassed on a daily basis by patients who fight their bill with every ounce of their being; because the government is telling them that their health care is a RIGHT and these are just greedy richdoctors (see above). More and more practices, mine included, are putting anti-abuse clauses in their contracts with patients. That is, if a patient is verbally abusive with staff that is grounds for dismissal.

There is a physician shortage currently, and it will get worse. Physicians will retire rather than adhere to government take-over. What good will the “right to healthcare” be then, when there are no physicians willing to treat you?

Thanks, Kelley, for your insights and analysis. You’ve given us all a lot to think about.

[Hat Tip: Hot Air]

Cavalcade of Risk #103: Call for submissions

My Wealth Builder hosts next week's Cavalcade of Risk. Submissions are due this Monday (the 19th). Please remember 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.

Mysterious Insurance Tricks

We've discussed both Stranger Owned Life Insurance and business-owned life insurance before, but this is a new twist altogether:

"The mother-in-law of a nationally known executive is found dead in her bathtub. She is fully clothed from an evening out at a martini bar, high heels still on her feet. The authorities rule she accidentally drowned."

Sure it sounds like the opening scene in an episode of Columbo, but it could happen.

Right?

Maybe: turns out that the owner and beneficiary of the policy was a local entrepreneur (and "companion" of the aforementioned MIL, Germaine Tomlinson) by the name of JB Carlson. According to Mr Carlson, he escorted the soon-to-be-late Ms Tomlinson home on the evening in question; she was apparently rather "tipsy" when he left her in her living room. How she got to the bathtub is anyone's guess.

Now about that policy: as mentioned, we've discussed before how important a funded buy-sell agreement can be to the continuity of a business. That was apparently Mr Carlson's take, as well, which is why he "legitimately bought the insurance on Ms. Tomlinson as a "key man" policy, sometimes taken out by a business to protect itself from financial damage if a top executive dies. Ms. Tomlinson introduced him to potential investors and told people she was a board member of his company."

[ed: in this case, "key man" is simply industry jargon, no disrespect is intended to the deceased]

If this was indeed the case, then it seems to me to be a legitimate use of the product. To go a step further, a $15 million policy on a septuagenarian would require some significant underwriting. I spoke with an underwriter at my favorite carrier, who told me that a case like this would require a lot of background work:

Obviously, there would be a complete physical, including an EKG and, based on the insured's age, perhaps a "mature assessment." There would be significant financial underwriting, as well, including credit checks and even financials from Mr Carlson's company. The writing agent would also have to supply a cover letter explaining the case.

Of course, this applies only if it was a new policy taken out by Mr Carlson on the life of Ms Tomlinson.

There's another possibility: Although this case involved a new policy, what if Ms Tomlinson had instead simply changed the beneficiary of an existing plan? "Insurable interest" is relevant only at time of issue; if the carrier received a properly executed change of beneficiary form, it would have to comply.

There may well be less here than meets the eye.

[Hat Tip: Teresa and Sara]

Health Wonk Review now online

Uber-wonk David Harlow hosts this week's collection of posts on health care polity and policy, and I don't mean metaphorically.

Pre-Tax Day Small Group (Good) News

If you own a small business (fewer than 25 full-time employees), and you have a group health insurance plan, you may be eligible for some tax lovin' from Uncle Sam:

"The credit is worth up to 35 percent of a small business' premium costs in 2010 ... On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers) ... The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers."

So get it while the gettin's good!

[Hat Tip: FoIB Beth D]

Mid-April LinkFest: Gummint Edition

From our "Medicare Guy," Jack Cheevers, some interesting Medicare info:

■ First, Medicare spanks Aetna for its handling of drug benefits:

"Aetna was served with the intermediate sanction notice because it has continued to improperly administer the Medicare drug benefit in the plan’s national standalone prescription drug plan (PDP) and its 25 Medicare Advantage prescription drug (MA-PD) contracts. Approximately 400,000 Medicare beneficiaries are enrolled in the organization’s MA-PD plans and another 600,000 are enrolled in the Aetna PDP."

The problems cited include a failure to meet Medicare’s "transition requirements ... Improperly processing coverage determinations and expedited appeal requests in cases where delays would jeopardize the life or health of the enrollee .. [and] ... Failing to take timely and proper steps to ensure that enrollees are eligible for the Part D low-income subsidy."

The good news is that this is an "intermediate sanction;" presuming that Aetna cleans up its act, they'll be back on the prowl for new enrollees.

■ An updated Medicare website is now online:

"The improved Web site provides users with a summary of Medicare benefits, coverage options, rights and protections, and answers to the most frequently asked questions about Medicare."

Why not take it for a test-drive?

[Hat Tip: "CMS Guy" Jack Cheevers]

■ And from the Web, this link has up-to-date info on how one state is attempting to deal with ObamaCare©.

Do They or Don't They: Congress Screws Up (Again)?

Looks like John Edwards' prediction may have been spot on:

"When I'm president I'm going to say to members of Congress and members of my administration ... I'm going to use my power as president to take your health care away from you."

Ha! The joke's on Mr E:

"In a new report, the Congressional Research Service says [ObamaCare©] may have significant unintended consequences for the “personal health insurance coverage” of senators, representatives and their staff members.

For example, it says, the law may “remove members of Congress and Congressional staff” from their current coverage, in the Federal Employees Health Benefits Program, before any alternatives are available."

In short, it looks like, at the very least, new CongressCritters and staff won't be able to sign onto the prized health insurance benefits package currently enjoyed by the Political Class. It may even be worse:

"It is unclear whether members of Congress and Congressional staff who are currently participating in F.E.H.B.P. may be able to retain this coverage."

Ooops!

How did this "sad" state of affairs come about? Simple: they didn't read what they wrote (gee, where have we heard that before?), and simply rammed it through, no matter what the consequences. And because karma apparently has a wicked sense of humor, these folks may actually be left with fewer choices than us common folks:

"The new exchanges do not have to be in operation until 2014. But because of a possible “drafting error,” the report says, Congress did not specify an effective date for the section excluding lawmakers from the existing program."

This seems to mean that they'll be booted off their current plan immediately, but since there's no "Exchange" or federal risk pool, they're going to have to turn to the tender mercies of the current health insurance system. While I haven't yet fielded any such calls, it's probably just a matter of time before I'm inundated with quote requests from hapless CongressCritters.

I'll let you know how that goes.

Grand Rounds is up...

Dr Emer hosts this week's collection of interesting medblog posts. A very cool layout makes it easily navigable, as well.

MVNHS© Update: Mid-April Edition

This first item’s a two-fer, combining our previous posts on the Much Vaunted NHS©'s aversion to cleanliness with its predilection for political correctness:

"Muslim doctors and nurses are to be allowed for religious reasons to opt out of strict NHS dress codes introduced to prevent the spread of deadly hospital superbugs."

So, British patients risk potentially deadly infections so as not to offend the tender sensibilities of their Muslim caregivers. I'm sure that the families of the deceased will be grateful that their loved ones died for such a noble cause.

On the other hand, there's good news for British health care professionals. And by "professionals," we of course mean administrators:

"The pay of NHS bosses has soared by almost 7 per cent in a year - more than twice the rise for nurses."

I'm sure our own nurses will be grateful for whatever crumbs they're left with once ObamaCare©'s in full swing.

Rethinking Mini-Meds

[Welcome Kaiser Health readers!]

I have a theory about how ObamaCare© will eventually come to "work" in the Real World:

Mini-med (aka "limited benefit" plans) will become "supplements" (much like MediGap plans) for folks sophisticated enough to use them that way.

Only suckers and those eligible for subsidies will buy the exorbitantly priced health insurance plans that will become the norm under ObamaCare©. Thoughtful people will do the math, concluding that paying the non-compliance tax is much cheaper than paying premiums. Mini-meds will be "just what the doctor ordered" for non-acute care. If and/or when there's a major claim, then time to buy a "real" medical plan (since they'll be guaranteed issue with no exclusions for pre-existing conditions).

There's another factor, as well. If (as seems likely) a significant number of physicians decide to "Go Galt," there'll be a substantial uptick in medical tourism. At least one mini-med vendor's offering has a built-in benefit to help pay for this; I suspect others will follow suit.

No one ever called Harry, Barry and Nan rocket surgeons.

Mandate or No Mandate?

Well, Rep. Debbie Wasserman Schultz (Duh.-Fla.) says that "the new health care law she voted for last month does not mandate that individuals buy health insurance, despite language in the law that plainly says otherwise."

Who ya gonna believe, Debbie or your lyin' eyes?

Apparenty, some 36% of the states (or, if you're a fan of the President's, 31.5%) think otherwise:

"The joint lawsuit led by Florida and now grouping 18 states was filed on March 23 ... It claims the sweeping reform of the $2.5 trillion U.S. healthcare system ... violates state-government rights in the U.S. Constitution."

To be fair, they're not suing just because of the mandate, but that is certainly a major part of the argument. Or maybe they just aren't paying attention to Ms Wasserman-Schultz.

[Hat Tip: HotAir]

Howdy Pardner: LTCi Update [Updated & Bumped]

[Please scroll down for update]

Regular readers may recall my report, almost two years ago, on my 8-hour long Long Term Care class. That was a mind-number; not so the "refresher" course I attended yesterday afternoon. Taught once again by local LTCi guru Ray Copenheaver, this 4-hour course was anything but mind-numbing. We heard from Ray about some very interesting new developments (I'll get to these in a moment). A registered nurse explained some of the differences between levels of care, and a local Elder Law Attorney provided invaluable insights into the inner workings of Medicaid. Atypically, this class "flew by,"

There are some new developments on the Long Term Care insurance (LTCi) front, and I'll cover some of the highlights (and one potential lowlight).

As an aside, if you're a consumer looking for advice about whether (and/or when) you should consider buying LTCi, I heartily recommend Herman Bruns' post on the subject.

First up, reciprocity: As a result of the Deficit Reduction Act of '05, all 57 states now offer some form of "reciprocity." That is, if one buys a Partnership Qualified (PQ) plan in Ohio (for example), and moves to Florida, the safety net provided by the plan is honored in The Sunshine State. That reciprocity, by the way, even extends to states such as New Mexico, even though there are no such plans currently available for sale in that state. NB: Wisconsin is apparently an exception, but that's being resolved even now.

Another interesting development is the implementation of the Pension Protection Act of '06. One of the provisions in this legislation make it possible for folks to "trade-up" to an annuity with a long term care rider. For example, someone with a "regular" annuity may be able to trade it in, on a tax-advantaged basis, for one with a long term care rider. It's one way to stretch one's long term care dollars even further.

The "fly in the ointment" is the CLASS(less) program: The Community Living Assistance Services and Supports Act is a part of ObamaCare© that "mandates the creation of a national long-term care insurance program that will provide average benefits of no less than $50 per day to help people pay for non-medical expenses." As I opined before, I'm quite sure that the gummint will find a way to screw up Long Term Care, as well. On the other hand, it may be beneficial as an example of "how not to do it;" that is, it may well motivate folks to finally consider buying a real LTCi plan.

UPDATE: Almost forgot something else I learned at this class. One carrier has developed (and is test-marketing) a new configuration which offers a zero day elimination period (in other words, benefits begin pretty much right away) but pays on an 80/20 basis. It's apparently priced significantly lower than current products.

Typically, products come in three "flavors:"

■ Reimbursement, which is the most common. Here, you pay the bill (to the nursing home, for example) and submit the receipt to the carrier.

■ Indemnity, which typically costs about 10-15% more; these don't require receipts, and pay the daily benefit.

■ Cash Benefit, which cost even more than Reimbursement, but pays the full amount directly.

The "new" plan works a little differently. Say you buy such a plan with a $100 per day ($3000 per month) benefit. You go into a nursing home that costs $110 a day. They'll pay 80% of that $110 (or $88). If the cost was $150 a day, they'd cap the reimbursement at the $100 you bought (not the $120 that represents 80%). It's fairly new, and I don't have any other details, but expect to see more carriers introducing these kinds of products.

Doc's on the Record

Dr Marc Siegel, a New York internist, has some storm warnings for folks who think that ObamaCare© is a good idea:

"More than 40 local and national medical societies representing over half a million doctors came out against the health reform legislation."

That's a lot of providers who don't think that this will end happily. Dr Siegel may, in fact, be a closet IB reader: he posits that covering all those pre-existing conditions will inevitably cause insurance rates to rise (although, to be fair, we're far from the only ones who've made this point). The more immediate problem, as he sees it, is that doctors will be seeing a lot more patients for a lot fewer dollars, at a time when their own overhead is rapidly increasing.

The other major disaster looming on the good doctor's horizon is the coming shortage of physicians. According to the Association of American Medical Colleges, it's expected that we'll be shy some 160,000 (that's thousand!) doctors over the next decade and a half.

My only complaint with Dr Siegel's analysis is that he seems to be laboring under the mistaken belief that this was ever about health care in the first place.

Cavalcade of Risk #102

The "Ironman" does an absolutely fantastic job hosting this week's roundup of risk-based posts. Replete with his patent-pending ratings system, it's chock full of thought-provoking ideas and analysis.

We're looking for folks to host June and July Cav's - please drop us a line to volunteer.

The True Cost of ObamaCare©, Part ??

This video neatly and succinctly encapsulates the true cost of ObamaCare©:



[Hat Tip: Bob Vineyard]

Scam or Implementation?

When I saw this headline, "Scam alert issued on new health care law" I immediately thought "good, someone's finally called ObamaCare© what it really is." But alas, it's a hit piece on some poor, hard-working individuals looking on the bright side of our new health care financing system:

"Some of the [entrepreneurs] are going door to door claiming there's a limited open-enrollment period to buy health insurance now."

Which is, after all, quite true: once the new law is in full effect, there will be limited types of plans and providers, and most insurance policies are likely to be quite unaffordable.

The article says that "Health and Human Services Secretary Kathleen [Shecantbeserious] said Tuesday she's writing state officials about a proliferation of scams involving the new health care law." Not sure why she'd do that; seems to me that she should be directing her correspondence to Sens Nelson and Landrieu (to name just two), since they're primary instigators of the scam writ large.

Perhaps she'll get to that, eventually.

An Insurance Mandate in Action

Thanks to a pointer at National Review Online, I found this article in the Boston Globe Sunday April 4:

"Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses." . . . "The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month."

Ouch - but there's more:

"The problem is, it is less expensive for consumers — especially young and healthy people — to pay the monthly penalty of as much as $93 imposed under the state law for not having insurance, than to buy the coverage year-round. This is also the case under the federal health care overhaul legislation signed by the president, insurers say."

. . . also the case under federal health insurance overhaul legislation. Swell. What can possibly go wrong?

But, the people are pretty smart huh? We figure this stuff out. How's come the legislators don't figure this out? They had actuaries and insurance experts advising them. Don't the legislators pay attention? Who DO they listen to? What were they thinking by making the penalty so much less than the premiums? Did they think they were doing some kind of big favor for people who still couldn't afford insurance?

Oy Canada! Runaway Costs Coming Home to Roost

So our "broken system" needed a mutli-trillion dollar fix, based at least in part on the "success" of Canada's?

Not so fast there, pardner:

"The light bulb has gone on and the Ontario government has finally realized that the current method of financing health care in this province is not sustainable ... Premier Dalton McGuinty warned that if serious reforms are not implemented soon, health spending will consume 70 cents of every provincial dollar spent in 12 years. Not only would this increase government rationing of health care services, it would also crowd out other critical public services."

A couple of key points here:

■ What exactly comprise "serious reforms?" Is the Premier perhaps hinting at returning to a privatized system?

■ I found this little throw-away particularly delicious: "increase government rationing of health care services." In fact, this is a profound admission that the Canadian system is, in fact, based on rationing health care, and they still can't hold down costs.

Boy, I'm thrilled we've chosen that route, too.

Healthcare and the oPad

ObamaCare© in easy-to-follow format:



[Hat Tip: Lucianne]