ObamneyCare© News Update

Add another to the roster of states taking a pass on setting up an ObamneyCare© Exchange:

"New Jersey Gov. Chris Christie ...  a bill that would create a health insurance exchange, or Web-based insurance marketplace, in his state."

New Jersey joins Alabama on the roster of states choosing to roll the dice.

Cato's Michael Cannon has an interesting take on this:

"Even if you support ObamaCare, there’s no point in creating an exchange today when the Supreme Court could strike down the entire law as soon as next month ... But even if the Supremes uphold ObamaCare, there is no valid reason to create one of these things."

Michael cites the billions of dollars in state revenues that would have to be shunted from useful programs to fund Exchanges, as well as the inevitable tax increases necessary to sustain them.

And there's this: the (unfunded) Employer Mandate penalizes companies that choose not to offer government-approved health insurance plans. But, as Michael notes, there's a nice little loophole:

"[T]hat tax is only enforceable if a state creates an exchange itself. It disappears in states that don’t create exchanges."

That is, there's a real disincentive for any of the 58 states to actually put an Exchange in place.

Guess we had to pass the bill to learn what's not in it.

Cavalcade of Risk #157: Call for submissions

Dennis Wall hosts next week's CavRisk. Entries are due by Monday (the 14th).

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

You'll need to provide:

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

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

Thanks!

Prozac Nation

Seems we may really be a Prozac Nation after all. According to the UK Mail Online, the US is a pill popping nation, consuming 80% of the world supply of pain pills.     

That's enough drugs to give every single American 64 Percocets or Vicodin. And pain pill prescriptions continue to surge, up 600 percent in ten year, thanks to doctors who are more and more willing to hand out drugs to patients who are suffering. 

That's pretty frightening.


Nationwide, police are reporting increases in robberies and other crimes by people who are addicted to oxycodone and hydrocodone, the key ingredient in most prescription pain pills. 

 One of the people lured into crime by drug dependency was Rich Elassar, 36, who once owned a successful business in New Jersey.

But an addition to painkillers led to him taking 90 Percosets a day, he told BBC. When the money ran out he was desperate for more drugs.

One day, he walked into a bank and handed the teller a note demanding cash. He was caught and arrested shortly after the robbery.

Sounds like a Nurse Jackie episode. I am blown away by the thought of someone taking 90 Percocet's a day. Years ago I took one to cope with pain following surgery and it knocked me for a loop.

From the P&C Files: Marvel-ous insurance

The recently released blockbuster "The Avengers" is (apparently) filled with excitement, mayhem and thrills. But have you ever wondered what kind of damage those great battle scenes might wreak in real life?

Me, either (hey, it's suspended disbelief, after all).

Still, some folks do ponder these things, and I'm kinda glad they do. Else how would we know, for instance, the kind of hits insurers might face if these were real claims (assuming they were covered in the first place):

"Nick Fury and “The Avengers” save the world from imminent doom ... but in real life ... would cost New York City a fortune in the process"

Total (hypothetical) price tag?

"Real-life ‘Avengers’ would cost New York $160 billion in damages"

Still skeptical?

Oh ye of little faith:

Health Wonk Review: Spring Hath Sprung! Edition

Well, flowers are a-bloomin' and veggies are a-growin' and we've got a bloomin' bumpercrop of interesting and wonky posts. This time, I'm eschewin' an official theme, and presenting posts in more-or-less the order received.

That qualifier's in there because this first post, from Dr. Bradley Flansbaum, wins my coveted (and extremely rare) "Editor's Choice" nod for his post that's at once informative, accessible, snarky and insightful.

 In his post, Dr. Flansbaum (who's the Director of Hospitalist Services at Lenox Hill Hospital in New York City), discusses the shortcomings of the well intentioned, but imperfect, Choosing Wisely campaign.  This was an effort, led in part by Consumer Reports, to identify questionable medical practices. Dr F notes that, ironically, "[v]oluntary guidelines generally do not command attention."

And he takes it from there. A most excellent read.

☼ Health Business Blog's David Williams, a longtime HWR contributor and host, scores an interview with the CEO of Taxachusetts  Massachusetts Blue Cross/Blue Shield. As we've long noted here at IB, MassCare has its flaws, but David's interview focuses on the role that commercial insurers play in reining in health care costs, and pushing for higher quality of care.

☼ Louise Norris, of the Colorado Health Insurance Insider's Norrises, is also a longtime 'Review contributor and frequent hostess. This week, she offers her insights into whether, as hospitals continue to grow and grow, they become "too big to fail." And if one of these behemoths does bite the dust, are we in for another government bailout (ala GM)?

☼ One of my favorite health care bloggers is the phantom known only as NWS (NotWithStanding)(real name: Geoffrey Prescott). NWS is about to take leave of us for a while to begin prepping for a medical licensing exam, but not before blessing us with this pair of gems about the ongoing "physician brain drain" and whether or not it's a valid claim:

Part 1.

Part 2.

☼ HWR co-founder Joe Paduda takes on the Grand Old Party, noting that while a lot of Republican lawmakers tout overturning [what we here at IB call ObamneyCare©], there seems to be a deficit of alternatives being offered. Further complicating matters, Joe observes, is that some GOP lawmakers want to keep at least part of the law intact. Interesting times, indeed.

☼ The host of the last HWR, Wing of Zock (have I mentioned that this would be a most excellent name for a rock band?) reports on a recent meeting, held in Beantown, about "Avoiding Avoidable Care." While that may seem redundant, WoZ notes that two of the major stakeholders (that being providers and insurers) seem to have competing interests, but are still "probably in the best position to effectively intervene: They are submitting or paying the claims for this care." The resulting stalemate is a challenge, but one which needs to be addressed.

☼ The estimable Dr Roy Poses has an exposé about a highly compensated CEO, whose company just happens to be in the health care business, and which company has also been fined almost $200 million (US) for violating the False Claims Act. Ouch! So how does the CEO square that circle? Well, you'll have to click the link to find out.

☼ At his Evidence Based blog, Michael Gavin offers a post on unintended consequences. What's a payer really on the hook for if treatment for (say) an accident leads to other drug use down the road?

☼ Jon Coppelman, blogging at Workers Comp Insider, ponders the fine line between voluntary and required. In this case, he takes a hard look at the recent Florida kerfluffle over drug testing for those on the dole and those on the state payroll.


☼ Dr Kerry Willis - a practicing family physician in Beaufort, NC - offers his advice on health care reform, from a physician's perspective.

☼ Over at the Disease Management Care Blog, Dr Jaan Siderov thinks we're in for a wave of mergers in the health care field. The key seems to be whether or not these will ultimately redound to the benefit of the consumer (and Dr S thinks it will).

☼ In her guest post at the Health Affairs blog, Diane Meier, Director of of the Center to Advance Palliative Care, takes to task physicians who really don't "get" the value of such care. She uses the case of a woman with Stage 4 breast cancer to make the point.

☼ Maggie Mahar's post claims that health care reform has been a huge victory for women. I think she's wrong, but her post is noteworthy for its analysis of women's health care costs.

☼ Do hospitals engage in aggressive debt collection practices? Anthony Wright lays out the case, including a special cameo.

☼ Greg Scandlen, posting at John Goodman’s Health Policy Blog, thinks that the major problem with individual health plans is that they're not subsidized by the taxpayer, and makes the case that employees and insurers would benefit by moving away from employer-based plans.

☼ Kat Haselkorn offers an interesting take on whether or not artificially lowering cholesterol levels is necessarily a good thing. While that may seem like a dumb question, consider this: all those statins cost real money, and may also offer a false sense of health security to overweight folks. And there's a real cost to all of those.


☼ Finally, exercising Host's Privilege, I'm offering two posts for your consideration. This actually makes sense, though: two of my (awesome) co-bloggers take opposite sides in the debate on whether or not insurance policies should be bought and sold across state lines. Both offer cogent, interesting rationales for their respective positions.

Con.

Pro.

(Any double entendre is in the mind of the reader)

And that wraps up this week's Health Wonk Review. Please join Dr Jaan Siderov, another of my absolute favorite health wonk bloggers, when he hosts the next edition on the 24th.

Pennsylvania Dreamin'

We first reported on the collapse of long term care insurance carrier Penn-Treaty in late '09. Hard to believe that 2-and-a-half years later, this is still making news.

But it is, and not in a good way:

"[I]n an unprecedented decision of significant national consequence, the Commonwealth Court of Pennsylvania has disallowed efforts by the Pennsylvania Insurance Department (PID) to liquidate ... Penn Treaty Network America Insurance Company and its subsidiary American Network Insurance Company."

The ruling seems to hinge on the Court's belief that the company can be "rehabilitated" (a fancy word for "brought back to life"). This is a potentially historic ruling because it marks "the first time a petition to liquidate an insurance company has been defeated in Pennsylvania." By contrast, these things are usually rubber stamped once the Department of Insurance has deemed the case hopeless.

We've been offered the opportunity to speak with someone "in the know" about this case and its national implications (whatever these may be), and have expressed an interest in doing so. More to follow (fingers crossed hopefully).

[Hat Tip: Robin Ireland]

58 State Insurance Recap

Well, maybe not all 58, but a select few:

■ First up, Empire State officials have nailed health insurers - hard - for violating Timothy's Law. InsureBlog readers have known about this regulation for almost 6 years. Then in 2007, we reported on the law's initial implementation:

"[C]arriers who want to continue marketing in the Empire State must cover mental health claims much the same as they cover any "regular" medical condition"

But it went far beyond that: the law also requires that insurers offer to sell an enhanced mental health benefits package to its group customers; failure to do so has proven, well, expensive:

"New York's Department of Financial Services (DFS) has fined insurers  $2.7 million because the insurers failed to notify small businesses that they were eligible to buy special insurance coverage for mental illnesses and children with serious emotional disturbances"

An expensive lesson. Of course, it's the consumer who ultimately pays this fine: carriers simply pass it along in the form of (additional) rate hikes. Well played, DFS, well played.

■ The "next big thing" arising from ObamneyCare© seems to be Multi-State Plans (MSP's). These are essentially supersized Exchanges, promising increased competition, lower costs, more choice and great taste (not to mention less filling).

■ From the "Careful What You Wish For" Files:

"The individual health insurance price difference limits in [ObamneyCare©] could lead to big increases in rates for some young consumers starting in 2014."

Ya think?!

That this is "news" just goes to show how ignorant the press is regarding how health insurance has worked for many, many years. They have only to look at states which mandate Community Rating to see that this model always increases rates.

Always.

■ Finally, some good news on the exchange front. FoIB Michael Cannon, the Cato Institute's director of health policy studies, reports that Yellowhammer State Governor Robert Bentley has vowed to veto Alabama's proposed Exchange:

"This legislation is premature.  The federal government has yet to establish clear guidelines for a health insurance exchange ... Doing so without clear guidance from Washington would simply be a guessing game"

Quite so.

Retirement Planning and Health Care Costs: Major Disconnect

IRA's, 401k's and the like have taken some major hits the past few years as the economy continues to sputter. Still, lots of Americans choose to (or must) retire each year, all hoping that they've saved enough to finance their Golden Years. They've (presumably) factored in the cost of food and shelter, transportation and the like. And to some extent, they've tried to sock away enough to cover their health care needs over the long haul.

Unfortunately, many of those plans will fall far short:

"According to Fidelity [Investments], couples retiring this year will need, on average, $240,000 to cover medical expenses throughout retirement"

That's up almost 4% from last year, and comes to just shy of $11,000 per year for medical expenses.

The problem:

"Most Americans, however, only anticipate spending about $5,621 a year"

That 50% disconnect can add up to some big bucks over one's lifetime. And it's getting worse, as medical inflation continues to outstrip the overall inflation rate (a little less than 4%).

Of course, Medicare will be there to bear the brunt of most of these expenses, right?

Right??!!

Well, not so much:

"Americans anticipate Medicare covering 68 percent of their health-care costs in retirement ... When pressed to explain this number, nearly three-quarters admitted to guessing. "

And they guessed wrong.

Very wrong:

"Medicare only covers about 51 percent of the expenses associated with health-care services"

That 17 point gap is big enough to drive a truckful of scooters through. And it assumes (unjustifiably) that Medicare itself will still be around. But that's not necessarily a sure thing, given that ObamneyCare© takes a big chunk of that program's funding and shifts it elsewhere.

Death Panels, anyone?

[Hat Tip: FoIB Jeff M]

OnLine UpDate

Last week, we interviewed J D Powers' Jeremy Bowler regarding insurers' online sales efforts. Turns out, a lot of insurers are turning to - or at least beginning to use - social media to build brand recognition:

"About 85 percent of asset management firms and insurers have seen increased brand awareness on social media platforms ... but very few are experiencing increased sales"

It seems to me that there are several reasons for this. For one thing, just because folks follow you on Twitter or connect with your company on LinkedIn doesn't necessarily mean that they're in a buying mood - or even shopping at all. Lots of people use LinkedIn, for example, for building their own "brand."

For another, these companies need to decide which is their priority: is it brand recognition or instant sales? One is a long term strategy; the other is what puts dollar signs on bottom lines.

Dealing on Health Care

Here's a thought: as we noted as recently as yesterday, government distorts the costs of health care, making it more - not less - expensive. Wouldn't it be great if we let the market determine what health care should cost?

Well, that's exactly what some enterprising folks out in San Fransisco are doing:

"Daily deal sites ... are giving the uninsured and underinsured a chance to afford health care services ... Daily deal sites are offering more than dental visits. Dr. Julie Orman, a chiropractor, recently offered a $25 LivingSocial deal for care"

This is precisely how insurance used to work: people paid for the small, routine services out of pocket, and providers vied for their (cash) business. Insurance was for the catastrophic claims, like heart attacks and strokes. And this is duly noted, as well:

"Don’t expect to find deals on major surgery, though. Doctors mainly offer discount for elective services"

Quite so.

And it's good business for the docs, as well. FoIB David Williams, proprietor of the Health Business Blog, acknowledges that in the article. But he also offers this advice:

“I would be careful about the upselling and I would also be worried that a [provider] once they have you in the office may find some kind of problem”

True enough, but that can happen just as easily to an insured patient. And it may well be that there is something else wrong; perhaps that sore throat is a harbinger of cancer, for example, and is treatable due to that early detection.

Caveat emptor, anyone?

Medicare and Circumcision

Medicare and circumcision. Now there are two words you don't expect to hear mentioned in the same sentence.        

THE LONG-RUNNING debate on circumcision is set to return as the federal government considers whether the surgical practice should continue to qualify for Medicare payments.

There you go.

Critics say there is little medical reason to circumcise an infant and that it should be withdrawn from Medicare coverage unless found to be medically necessary.

An opponent, Simon Harris, a non-doctor who runs a web-based group called Circumcision Doctors Australia, says about 12 per cent of newborn boys in Australia have circumcision attracting the Medicare benefit.

The Australian health care system is called Medicare.


And THEIR Medicare system is debating if the cost of circumcision should be paid for by taxpayers.


In America, Medicare will pay for Viagra, but will it pay for circumcision?


I really don't know.


I just wanted to use Medicare and circumcision in the same post.

POTUS and SCOTUS on Bizarro World

It's not enough, apparently, that the noted Constitutional Scholar-in-Chief doesn't understand the role of the Judiciary. Doubling down, President Obama is warning the Supreme Court that striking down ObamneyCare© will wreak havoc on Medicare, freezing that agency's "much vaunted" payment system.

Of course, this is exactly backwards from reality:

"About 65 percent of the cost of [ObamneyCare©] is supposed to be met by Medicare expense reductions"

That is, reducing the amount Medicare will pay providers, thereby exacerbating - not resolving - the current senior care issue. And yet the President and his minions continue to push the now debunked meme that gutting ObamneyCare© will somehow hurt Medicare even more.

The truth is, they've got this bass akwards:

"[B]y striking down the law, the Court would forestall $500 billion in Medicare cuts called for by Obamacare as well as deep slashes in Medicare Advantage."

Yeah, but that's just some blogger in his pajamas, right?

Well, no, that's "former CMS administrator Thomas A. Scully."

Unlike his successor, Ms Shecantbeserious, Mr Scully seems to have a clue.

Interesting Medicaid Stat

According to the Kaiser Family Foundation, "Medicaid’s per-person costs grew 2.5 percent between 2007 and 2010, significantly slower than the rate of growth in private insurance and a full point lower than overall medical trend"

KFF provides this handy chart for comparison purposes:

Pretty impressive, no?

Then see if you can spot the flaw in this conclusion:

"Medicaid has done considerably better in controlling per capita costs than has private coverage.”

[Hat Tip: FoIB Holly R]

Friday Morning LinkFest

■ A few weeks ago, we mentioned that Cato Institute director of health policy studies Michael Cannon had fired a volley across the bow of the ObamneyCare© Exchanges. Now, at least one state is paying heed:

“I’ve suspended the talks on the Illinois insurance exchange until the Supreme Court makes its decision, which we expect in June,” Rep. Frank Mautino (D- Spring Valley, IL)"

How many of the other 57 states will follow his lead?

■ Last time we looked, LabCorp was in a heap o' trouble. And it seems that they still haven't bailed themselves out. FoIB Ania Kapla tips us that "[m]onths after U.S. senators requested financial documents in an investigation of how medical lab and insurance companies bill customers, LabCorp is the only company that hasn’t provided information to the Senate."

Blowing off the United States Senate? Is that really a smart business move?

■ FoIB Holly R sent along this interesting item:

" [O]ne place where handwriting persists is on medical prescriptions, and that’s unfortunate ... Studies show that errors are much less likely if a doctor clicks to select medications from an onscreen list"

There's a lot of tech out there that one would think might be up to the task, but so far there's no clear path to adoption.

■ From the "Poor Baby" Department, it just doesn't get any sweeter than this:

"IRS Wrestles with Coverage Reporting Rules ... The IRS is on track to be in charge of managing or helping with administration of many of the [ObamneyCare©] health coverage provisions ... [and] has issued one document, a tax return information disclosure rulemaking notice."

Bottom line: they, like HHS Secretary Shecantbeserious, are clueless.

■ Finally, a life insurance-related item:

"Genworth [Life Insurance Company] has announced that as of 5/07 they will no longer be selling 30 year term"

This just months after pulling their 15-year level term products. It also appears that their 10 and 20 year level term products will see major new-business premium increases shortly.

It doesn't take a rocket surgeon to divine why this is happening: with the economy in the doldrums, and no clear signs of relief, carriers can't count on major investment profits. And with term insurance rates currently at historic lows, there's not much in the way of underwriting profit to be had, either.

Rock, meet hard place.

Health Wonk Review at InsureBlog

We're pleased as punch to once again host the Health Wonk Review. Submissions are due by next Wednesday (the 9th), and once again we're looking only for posts pertaining to "health policy, funding, insurance, managed care, infrastructure, IT, the uninsured, economics and trends."

To be considered, please include:

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

Click here for the email addy.

Have a GREAT weekend!

It Hurts When I Do This

Man walks in to a doctor's office. Holds out his arm and wiggles it around. "Doc, it hurts when I do this".

Doc, "Well stop doing it".      

Ba-da-bing . . .

The folks in Washington (and elsewhere) seem to think the way to solve the problem with rising health care costs is to simply pay doctors less money. That's what people in Maryland have decided to do in order to stem the tide of higher hospital bills.

For the past two years the MD Hospital Commission has authorized increases in the rates hospitals can charge but has limited those increases to a figure less than the rate of inflation. This year they are proposing to allow no increases in hospital rates.

“We are very concerned that this will really jeopardize hospitals’ financial condition at a time when we need to strengthen it,” Coyle said. “This will have serious consequences.”

She noted that Rockville-based Adventist HealthCare has announced that it will let go up to 100 workers, citing expected rate cuts by the commission as a major reason.

This hospital rate commission is unique to Maryland. In other states hospitals negotiate rates directly with insurance carriers.

in Maryland, everyone — private insurers, individuals paying out of their own pocket, Medicaid and Medicare — pays hospitals the same fixed rate set by the commission.

Supporters say the result is a far more equitable, rational system. But because it essentially empowers Maryland to set its own, higher rates for Medicare, the federal government requires the state to meet a special waiver test. The test requires that Maryland’s charge per case not grow faster than the rate at which national Medicare payments grow.

If the rates are higher for Medicare and Medicaid than usual, how does this save money?

Seems to me they are gaming the system by shifting things around and not really saving any money at all.

So how do folks in Maryland save money on hospital costs? They limit the number of hospital stays and pay the hospitals less.

Ba-da-bing!

Buying insurance across state lines - another view

Bob, I think cross-state buying is an idea whose time has come.

You make good points in your post today on this subject. Yes, the underlying problem is the cost of medical care; yes, the idea of cross-state purchase of insurance does nothing about this underlying cost; and yes, discounts that Alabama insurers have wouldn’t apply at Georgia providers.

But - - the fact remains that current law distorts the insurance markets.  It does so by (1) allowing states to set their own, independent benefit mandates and (2) prohibiting citizens from shopping in other states for policies that are less expensive because they have fewer mandates.  

You and I can shop in other states for thousands of products – even fertilizer.  Why not insurance? 

Allowing interstate insurance sales would afford more consumer choice and reduce insurance premiums by allowing people to avoid mandates that they don’t want, and don’t want to pay for.

Let’s assume cross-state purchasing were legal; here are my thoughts on how it might work in Georgia and Alabama. 

Alabama has fewer benefit mandates than Georgia so the pure actuarial cost of Georgia policies (i.e., exclusive of demographics, utilization, and discounts) is greater than Alabama policies.  The new market here will be among Georgians who wish to buy the less expensive, Alabama-level benefits.   Alabamans can already buy these policies.

Alabama-licensed and Georgia-licensed insurers would be allowed to sell in both states.  They could sell any policy they choose, so long as the policy benefits are approved by some state – California, Rhode Island, Idaho, Alabama, Georgia - any state. 

Now, how will Georgia-licensed insurers respond?  If they choose not to sell Alabama-approved policies, they will lose some of their market. That’s because Georgians could shop in Alabama. Georgia-licensed insurers might decide to let that happen.  However, I think it’s more likely that the Georgia-licensed insurers would gear up to sell policies with benefits approved by Alabama. In fact, I think they are eager to do so already.

How would these policies be priced?  Not a problem. The requirement is simple – price out a specific set of benefits (e.g., Alabama-level) for a population in a specific area (e.g., a Georgia county).  This is the kind of thing actuaries and underwriters do every day and twice before breakfast. Insurers already licensed in both states could gear up quickly for this.   

How would the states regulate the new policies?  All policies for Georgia residents would still be issued in Georgia, so the situs remains well-defined. The Georgia insurance department would keep its regulatory duties intact, except that it would have the additional duty to allow people to buy policies that include benefits approved in another state.  This would mean additional oversight duties.  Yeah, more work for them.   

Would the cost of Alabama-benefit policies for Georgians be greater than for Alabamans?  Maybe—but that does not matter.  What matters is whether those policies are less expensive for Georgians than the existing Georgia-approved policies.  And they will be, because they contain lesser benefits. Georgians therefore have a new and attractive option - to pay lower premiums than they do now, provided they are willing to choose the lesser Alabama-approved benefits.

Cross-state availability could mean the days of captive populations on which any state legislature can impose insurance mandates without limit, without regard to consumer cost, and without consumer recourse, would be over.  Would that be so terrible?

Making Health Insurance Cheaper

Health insurance will be cheaper once Obamacare is in place. Really? Not happening yet, and guess what. It will never happen.
Politicians think because you can drive to North Carolina and buy cheap cigarettes the same principle should apply to health insurance.   
                     
Problem is, health insurance doesn't work that way, and our Georgia politicians are scratching their heads. The AJC reported on new legislation that was supposed to make it easier for Georgian's to purchase health insurance across state lines.

Nobody has even asked to be approved to sell across state lines,” Georgia Insurance Commissioner Ralph Hudgens said. “We’re dumbfounded. We are absolutely dumbfounded.”

Dumbfounded. That's a good word.

Do you suppose anyone under the gold dome has heard of Obamacare?

With all the massive changes that will affect health insurance in 2014 (assuming Obamacare survives the Supreme Court and the November elections) carriers are not making any major moves involving health insurance, especially those that involve huge sums of money in filing fees.

Hudgens, a conservative Republican who strongly supports free-market ideas, said he expected policies sold in states such as Alabama, which have fewer requirements for health plans, to be offered in Georgia after enactment of the law.

Under the new law, health plans approved under the rules of other states could be sold in Georgia, even if they don’t meet Georgia requirements.

However, the companies still would have to be registered in Georgia and prove they are financially solid. And any complaints from policy holders would be resolved in Georgia, instead of forcing customers to go to the state that approved the plan to resolve a dispute.

The health insurance policies and rates would also have to be filed in GA and approved by the Department of Insurance. This is expensive and time consuming.

Any savings that may be achieved due to fewer mandates in Alabama would be offset, at least in part, by network discounts and overall cost of health care in Georgia.

And Alabama is a poor example in this case. Blue Cross of Alabama dominates the state when it comes to health insurance. They control so much of the market very few health insurance carriers even offer their product there. If Alabama Blue were to try and compete for health insurance here they would lose the advantage of their deep network discounts making it impossible to compete against home grown BCBSGA or other health insurance carriers such as Humana, Cigna and other health insurance carriers.

Kyle Jackson, Georgia state director for the National Federation of Independent Business, had high hopes that the new law would help small business operators who buy their own health plans.

“It’s frustrating,” Jackson said. “You can’t force the insurance companies to write these policies. But I know in talking to folks in my membership that there is a real demand ... especially if you are talking about the possibility of some lower-cost health insurance plans that do not have the mandates we have.”

No doubt, mandates add an average of 30% to the cost of health insurance, but the only way to significantly reduce health insurance premiums in most cases is to totally obliterate all mandates.

That won't happen.

[Click here for Mike's response]

Introducing STCi

No, that's not a typo: we've written quite extensively on Long Term Care insurance (LTCi), but this is new to us.

The major challenge with LTCi is the premium. While these plans can be cost-effective, there's no question that they can be, as my sister says, spendy. So, a lot of folks decide that, if they can't afford the plan they want they'll just take a pass altogether. While that's certainly understandable, it can be a big mistake.

But how to resolve the dilemna?

Well, that's where Short Term Care insurance (STCi) comes in:

"Short-term care (also known as Recovery Care or “LTC Lite”) is not a new product but it has been gaining ground in the last 2 years ... With its shorter underwriting cycle, high-issue rates, and low premiums it’s becoming increasing popular"

Unlike traditional or Partnership plans, these policies typically have benefits that last for a year (or even less). On the other hand, unlike the typical 90-day waiting period common to LTCi, these plans boast elimination periods of less than 60 days. So they pay out quicker (albeit for far shorter periods). In fact, they could be used to fill that "gap" in traditional plans.

Underwriting on these plans is claimed to be much quicker than LTCi (although I have no direct knowledge of this. YMMV).

The target market for these plans seems to be those who have already hit "senior" stage (age 65+) and have less than $100,000 in savings and investments. This is a somewhat different makeup from the typical LTCi policyholder.

Is this a panacea? Of course not, but it is a potentially helpful alternative to folks who've considered - and rejected - traditional Long Term Care plans.

How it works: Red wine and health

We've reported on the health benefits of red wine before, specifically the role of resveratrol.

But here's a more detailed look at why it does what it does:

"The ‘miracle ingredient’ resveratrol credited with anti-ageing powers, and the ability to work against cancer, heart disease and obesity, really does boost the body’s supply of cell energy ... But it is only ‘switched on’ in the presence of a gene called SIRT1 that is the key to longevity and energy."

Kind of like how epoxy glues work, where both "pieces" are necessary for the product to work as advertised. The challenge is that it's not clear whether or not everyone has the SIRT1 gene, so it may not be a "universal" panacea.

Still, it's promising news.

Obamacare’s biggest problem? It’s small-ball.

Obama is thinking way too small.  He needs to venture outside the box.  There is a way to provide universal medical insurance for all, and simultaneously end unemployment in the U.S.  To see the way, Obama needs to think big.  Then, with enough hope, he can change everything.

The key concept is “single-employer” i.e., a universal employment system.

This does not exist today in the U.S. Instead, we have tens of thousands of separate employers, each with its own employment practices and payrolls. Every grocery store has its own staff – plus separate stocking, pricing, and purchasing arrangements. This separate-grocery business model causes food access and cost problems. For example, some grocers do not offer fresh produce in low-income neighborhoods while suburban grocers stock an ample supply of fresh foods. But more important, the "separate enterprise" business model causes the same access and cost problems for every other type of enterprise, public and private.  This is why high cost is such an obstacle to consumers who want – but often cannot afford - the products of auto manufacturers, drug stores, retail outlets, banking, insurance, hospitals, physicians’ offices, schools, local governments, and thousands of other enterprises.

It is common sense that the more consolidation, the cheaper the cost. Therefore consolidation of the separate-enterprise business model should be the goal. And that means a national, single employer.

Single-employer would be administered by the federal government, and would be our sole national purchaser of labor. Government single employer would eliminate the duplicative and needlessly expensive overhead of our present independent and poorly coordinated employers. The cost of business administration and related payroll costs would drop by 50%.

The trillions saved would permit our government single employer to employ everyone above age 15.

In fact, no one who wants to work would be denied a job. Not just junk jobs, but meaningful, high-paying jobs. The government would assign people to jobs using modern, efficient planning processes without regard to gender, race, national origin or ability to work. Every working-age American will have a job and earn a decent living wage paid from public funds. Result: the curse of unemployment is gone forever, financed by savings from the change to single-employer.

Implementation would be simple – just delegate the details to the Senate and Department of Labor (thus also avoiding one of the Obama’s biggest mistakes in 2009 – permitting the House to write the Obamacare law).

Everyone could then have medical insurance through their employer - the federal government - at less cost than today, giving citizens even more spending money as well as making American goods more competitive.

Mr. Obama – think big.

Cavalcade of Risk #156: Short and sweet edition

FMF hosts this week's roundup of the best risk-related posts you'll find anywhere. Do check it out.

And a big CavRisk Thank You to all the folks who volunteered for summer hosting slots!

Helpful Home Hint

If you're one of the many thousands of homeowners looking at Spring as remodeling season, the Insurance Information Institute urges you to let your insurance agent know.

The primary reason, of course, is so that you don't end up underinsured if there's a subsequent loss (this is, after all, tornado season).

Something else to consider is potential liability if one of the contractors or laborers were injured while on your property. Your agent can help you ask the right questions before there's a problem.

Online Powers

Got an interesting offer in email the other day:

"J.D. Power and Associates will release the results of the 2012 Insurance Shopping Satisfaction Study ... I’d welcome the opportunity to arrange an interview with our study director."

An enticing proposition, to be sure. Turns out, the report is on the changing face of the auto insurance market, but I think we can also draw some conclusions about health insurance from it. After all, these two seemingly disparate lines of business have a lot in common: they're both based on the principle of indemnity, and most folks need (or believe they need) them.

Jeff Perlman, whose email extended the offer, helpfully included a copy of last year's report, which had this news:

"For the first time, a majority of new buyers of auto insurance initiated their policy purchase by applying for a rate quote online."

Can't say I was terribly surprised at this revelation: between the Mayhem Guy, Flo and President Palmer, it's hard not to be tempted. The question, of course, is the role of the agent in the process. It seems that more folks are initiating the process online; this doesn't necessarily mean that they're buying that way.

But that was then (2011) and this is now; what's new this year? The first is really non-news: the number of folks who actually bought off "the 'net" stayed steady at around 43%. This is somewhat misleading: I thought it meant direct from the carrier, but it really means that plus agent sites, social media, that kind of thing.

This share of the distribution channel has remained fairly steady over the past few years. The major development there is that more folks who started the process online were able to successfully make the purchase that way.

The other "big news" that I found quite interesting is that the "auto insurance shopping rate has reached the lowest point in the past five years, with only 25 percent of insurance customers indicating they shopped for a new insurer in the past 12 months, down eight percentage points from 2011."

It wasn't readily apparent why there was such a big drop-off, so I asked Jeremy Bowler (J D Powers' senior director of the global insurance practice) for his thoughts. Jeremy was the director of this study, and we had a very interesting, 45-minute conversation about it.

An almost 10-point drop in consumer interest seems like a big deal, and I wondered what might account for such a change. Jeremy offered two (non-mutually exclusive) hypotheses:

First, diminishing returns and frequent (what Jeremy called "serial") shoppers. What happens is that folks who have been with one carrier for a while look around, and find that they can save many hundreds of dollars on their premiums just by switching. And that's great (for them), but the next year, thinking they can recapture that glory, they're unexpectedly disappointed by the paltry savings to be had. They may have saved $400 in the initial switch, but the next one might save them only $50, and so they decide it's not worth the hassle.

His other thought had to do with carrier strategies. That is, they offer big savings to new customers, and then hit them up with rate increases the next year (Jeremy laughed when I told him that folks in my side of the business call that "the Blue Cross model").

It was an interesting insight into a side of the business that's generally foreign to me.

[Major InsureBlog Thanks to Jeremy Bowler and Jeff Perlman!]