Tax the Rich{Doctors} to Lower the cost of Healthcare [VIDEO ADDED]

In the ongoing drum beat against the doctor in terms of income earned, Massachusetts lawmakers are trying to lower the cost of healthcare and have decided that doctors simply charge too much.  I spoke about this perception of the richdoctor previously as more of an attitude, but Massachusetts has taken it to a practical level with monetary penalties for the richdoctor.

“Massachusetts House leaders released amajor proposal to curb health care costs Friday, calling for new limits on thefees charged by hospitals and doctors and for creation of an independent agencyto monitor medical spending….Providers that charge prices deemed excessive andthat they cannot prove are linked to above-average quality would pay a tax,similar to the luxury tax Major League Baseball imposes on the big-spending NewYork Yankees and Boston Red Sox”

Of course the doctors and hospital groups are fighting this:

“Lynn Nicholas, president of the state hospital group, said, “To expect the health care industry to perform at less than the economy overall is unreasonable and will impinge on our ability to deliver care at the level people expect. . . . That may damage the economy more than it helps it, and, because of that, jobs may be lost.’’

The bill will not only lower what a physician can charge for an appointment or procedure, but a tax will be levied on the provider if he/she cannot prove that the care was more exceptional than the care down the street.  Medicine is a service and we all have different definitions of quality service.  Thus, an immeasurable item cannot be proved or disproved.  The only measurable component in healthcare is if you are still alive after the appointment or procedure.  If you are, then the quality was excellent.

Physicians today are being squeezed financially, with increasing overhead and stagnant reimbursement due to a frozen Medicare fee schedule for approximately 10 years, now Massachusetts not only wants to lower reimbursement rates, but tax providers for simply trying to stay viable in business.  Ms. Nichols states this rather well, one cannot expect a business person to perform their skill or sell a product at less than is needed to keep one’s business profitable.

“The bill also encourages providers to form so-called accountable care organizations to care for patients in a more efficient coordinated fashion, and pushes insurers to shift toward global payments, which pay providers a lump sum to care for a group of patients, and away from paying separate fees for every service.”

If this bill passes and implemented, then doctors will have to consider if they are willing to take pay cuts, live at a lower standard of living than doctors a generation ago, and continue to work the same number of hours they work now, in Massachusetts at least.

UPDATE: This video, from the Pioneer Institute, offers five ways that payment reform legislation on Beacon Hill misses the mark on true health care reform:

Cavalcade of Risk #158: Call for submissions

Nina Kallen hosts next week's CavRisk. Entries are due by Monday (the 28th).

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!

Ezra K finally finds a nut!

As we've repeatedly knocked Ezra Klein's less-than-stellar grasp of insurance issues, it seems only fair to point out when he actually gets it right. An on-going IB meme has been consumer-centric health care, the goal of which is to educate and empower insureds to make more efficient health care choices.

Ezra reports that Blue Cross of Massachusetts (BXM) is attempting to do just that. He may actually be a closet IB reader, acknowledging early on that "Massachusetts has had, for years now  ... some of the highest health insurance premiums in the country."

BXM has introduced a new "tiered" co-pay system to incent its insureds to choose less expensive, but equally effective providers. It's not really new - Golden Rule flirted with this a few years ago, as did other carriers - but it's notable for the particular market, and its scope.

And it seems to be working. CEO Andrew Dreyfus reports that:

"[We] haven’t heard much in the way of complaints from the employers ... however, heard from one of Boston’s more expensive hospitals.

They were starting to lose referrals because of the new payment model... ‘can I lower my prices?’ I said, ‘absolutely.’”

Qualified kudos to Klein.

[Hat Tip: FoIB Holly R]

The Tutu Project

Nothing to do with Desmond Tutu. Pink tutu's. A grown, hairy man. In a pink tutu. And little else.

The Tutu Project is a love story.


Nothing kinky. True love of a man, Bob Carey and his wife Linda.


Linda has been battling breast cancer since 2003. Initially it seemed she had won the battle but then the cancer returned in 2006.


Bob started The Tutu Project as a way to raise money for breast cancer awareness. The self portrait pictures he has taken have brought joy to many individuals and families dealing with cancer. In Bob's own words:


During these past nine years, I’ve been in awe of her power, her beauty, and her spirit. Oddly enough, her cancer has taught us that life is good, dealing with it can be hard, and sometimes the very best thing—no, theonly thing—we can do to face another day is to laugh at ourselves, and share a laugh with others.


Read the story of Bob and Linda Carey. "Like" them on Facebook. Revel in their story. Make a contribution.

Monday Lagniappe

■ We haven't really addressed the new ObamneyCare© CO-OP program, and now's a good time to start. Scheduled to launch in 2014, these are essentially "mini-insurers" designed to compete with the big boys. CO-OP's (the misnomered Consumer Operated and Oriented Plan) would be state-licensed, and available both inside and outside of the Exchanges, targeting the small group and individual medical markets.

I remain skeptical of their viability, but "[t]he organizers ... are facing plenty of competition and strict scrutiny."

We'll see.

■ As we've repeatedly pointed out, MLR's (Medical Loss Ratios) are a dumb idea. Nevertheless, they're real (and not so spectacular); UHC has a new report out predicting that the total payout will be "less than 1% of total premium for 2011."

Be still my beating heart.

■ Frequent IB tipster Holly R dropped a dime on this interesting item:

"While UCLA Health System has long prided itself on being at the forefront of treating patients ... it is now trying to lower sharply the cost of providing that care. By enrolling young patients with complex and expensive diseases in a program called a medical home, the system tries to ensure that doctors spend more time with patients ... to coordinate care."

The "medical home" concept is relatively new, but seems promising. By communicating and coordinating care, it's hoped that the cost of that care can be reined in. And as we all know, the cost of care drives the cost of insurance.

Potential win-win.

Health Wonk Review: In-Depth edition

Dr Jaan Siderov hosts an outstanding edition of the Health Wonk Review. Great posts, and lots of 'em, all deftly edited with Dr Siderov's insight and gentle humor.

It Depends...

No, no, no.

Ever heard of the "Dependency Ratio?" Me either, but it's important, and it's scary:

"The U.S. Census Bureau recently reported that the dependency ratio, or the number of people 65 and older to every 100 people of traditional working ages, is projected to climb rapidly from 22 in 2010 to 35 in 2030"

Right now, about 1 in 5 of us is 65 or older. So what, you ask? Well, let's look at that number. It means that about 8 out of ten are working age. But with real unemployment at almost 15%, there are less than 7 working people supporting every 10 retirees. And that number's likely to go even lower as the Boomers continue reaching retirement age.

Why is this scary? Glad you asked:

"A Pennsylvania state appeals court has ruled that the adult son of a nursing home resident is responsible for her unpaid $93,000 bill. And the decision has some elder care lawyers wondering if this is just the beginning of a trend."

The Keystone State is just one of the 30 states which currently have "filial responsibility statutes" on the books. These regs impose an affirmative duty on "adult children to care for their indigent parents;" providers like nursing homes can seek restitution from them. And as the situation continues to deteriorate, how long will it be before the other 28 states follow suit?

So why bring it up?

Well, this is InsureBlog - perhaps there's a clue. How many of us have seriously considered Long Term Care insurance for ourselves? How many fewer have considered it for their parents? Well, LTCi can cost some decent bucks. But with the potential for a $93,000 (or more!) "filial financial burden" it may turn out to be very cheap indeed.

UPDATE: Courtesy of Bob, here's a list of the 30 states with "Filial Responsibility" statutes.

About Those Exchanges

The folks in la-la land are at it again, doing everything in their power to make sure no one in the Republik of Kalifornia has affordable health insurance. In an attempt to get the jump on health insurance exchanges the gummint is using "focus groups" to get an idea of what Kalifornian's want and expect from a health insurance exchange.

Many uninsured California residents think buying health coverage through a new health insurance exchange, or Web-based insurance market, would be cheaper than buying coverage through a broker.

Asking uninsured folks their opinion on something they don't own and perhaps have never bought is about like asking a man to describe childbirth.                 


Apparently the participants in this focus group never considered that an exchange will have overhead, salaries and probably benefits that are factored in to the cost of health insurance. These are the same folks that believe they can get a lower rate by purchasing direct from a carrier.

Researchers talked to a total of 36 uninsured California residents ages 18 to 44 who intend to use the California exchange.

Well that is certainly a large sample. I would think it would be fairly easy to find considerably more than 36 folks living on the dole that would be glad to participate in a survey. Just this last weekend while riding on mass transit to the airport I overheard a couple of people who were comparing notes on how to get paid by focus groups. One person said she got $75 just for tasting chocolate.


How hard is that?


And, "You don't have to report it to the government so they won't reduce your check".

"Some participants reported having shopped for insurance in the past either through their employer or by using a broker, insurance company website, or going to a local social service office," Bye writes in the focus group report. "Most preferred to shop on the Web as opposed to through brokers (who they viewed as expensive middlemen) or social service offices."

Expensive middlemen. Of course Social Workers not only volunteer their time and services (so no need to pay them) but they are infinitely well versed in insurance contracts.

Participants said they think the exchange will encourage plans to lower their prices and help consumers avoid paying broker fees, and decrease the amount of paperwork consumers must fill out.

The participants said they want to shop "at their own pace without pressure from salespeople."

There are those expensive broker fee's again . . .

I have a website and offer visitors the chance to run their own rates and even apply "direct" with the carrier if they choose. After several years of doing this, I can tell you about half never get around to completing the application. Roughly 70% of those that do submit an application are rejected due to health issues.

Quite a few pick plans that do not cover prescription drugs.

When asked about coverage affordability, the focus group participants said they might be able to afford $25 to $50 per month for individual coverage and $100 to $150 per month for family coverage.

I think it is becoming quite clear why these folks are uninsured. They seem to think you can buy health insurance for less than you pay your cable company each month.

High Anxiety Over High Deductibles

There are some things in life that are baffling. Why do electric appliances come with warning labels that tell you not to use the appliance while bathing? Why are there no smoking signs at the gas pump? Why do men's pants come in sizes that correspond to the circumference of your waist but women's dresses come in 0 to infinity?

Then there is the issue of high deductible plans.


Thirty years ago a high deductible plan was $1000 and you can forget about copay's. You saved your receipts and when you hit your deductible you filed a claim and sent in your collected receipts.


In a retro move, individuals and employers are now looking at plans without copay's and deductibles from $2500 - $5000 or so.


At a time when it is not unusual to have a credit card with a $5000 - $10,000 limit, and many people have several cards, what is the big deal if you have a bad year and have to spend $2500 - $5000 of your own money? And what if you saved $5,000 per year in premiums by opting for the high deductible plan over the lower deductible copay plan?


Of course the low deductible copay plans are an illusion since your OOP (out of pocket) on a large claim will almost always exceed $5,000, so what have you gained?


Not a damn thing.


And then we have articles, like one in The Tennessean, about how high deductible plans are leading to financial ruin.

Aileen Stalvey says she was “born to shop,” but shopping for surgery left her with a bill from Baptist Hospital for more than twice the amount she’d been quoted.

Her quandary is one that more will face as employers increasingly switch to high-deductible health plans — some of which require workers to spend as much as $5,000 before filing an insurance claim.

More on Aileen in a moment, but how about that comment that you must spend $5,000 before filing a claim?


Rubbish.


For starters, most folks don't file claims, their providers do it for them. Second, when a claim is filed it is adjudicated and when you use a par provider the bill is repriced (discounted) according to the agreed upon fee schedule.


You get a discount even if the carrier has not paid a dime. Somehow this escapes the whiners who say they don't "get anything" for their premium dollars.

Stalvey’s problems began when she felt a strange sensation in her hip while mowing an embankment at her home last summer. The hip gradually got more painful until she learned weeks later that the neck of her leg bone — the part that fits into the hip socket — had fractured.

A British citizen married to an American, she had three options. She could stay in bed in hopes that it would heal. She could fly back to the United Kingdom, where the surgery would be free because of socialized medicine. Or she could have it done in Nashville and pay for it out of pocket.

While the reporter does not state it explicitly, it would appear that Aileen does not have health insurance.


And I especially love that part about getting free surgery in the UK. Wonder what the wait time would be for hip surgery?

When Baptist quoted a discounted cost of $4,586 because she was self-pay, she and her husband, Kim Stalvey, opted for her to have the surgery here. The couple paid that amount before her discharge, but later received a bill for an additional $4,751.

Herein lies the rub.


The hospital quoted a price for their anticipated services, but how about the surgeon, anesthetist, etc.?

“There isn’t standardization of practice in surgery where every surgeon does a procedure the same way or with the same equipment for every patient,” said Kristi Gooden, director of media relations for the hospital.

“Surgery pricing can vary greatly based on many factors, including the physician’s preference of technique for a particular procedure, instrumentation used or choice of implants or other supplies.”

Hip surgery isn't like getting the oil changed in your car or even new brakes. I recently had brakes installed on 4 wheels and was quoted a price up front. After pulling the tires and inspecting the brakes the price jumped another $200 because I also needed new calipers.


I could pay the extra $200 now or forget it and have to replace the brakes again in a few months plus calipers at that time.


Things happen, even with automobiles.

Aileen Stalvey is wary about any kind of medical procedure, even getting a hearing aid, after her hospital billing dispute.

“Trying to shop here for medical care is impossible,” she said. “When you call a doctor up and ask for an appointment, you can’t get an answer.

“They say they will charge you so much to come in and bill you later, but they can’t say what a hospital visit will cost or what a hearing aid will cost. That’s just so frustrating.”

I understand the frustration, up to a point, but really. Who shops for the cheapest surgeon?


If boob jobs are $5,000 each do you really want someone that will do both for $250?

It's for the ObamaKids©

Gotta give the proponents of ObamneyCare© credit: they're still pushing the lies. Hard. Having previously recruited Matlock to take the case to senior citizens, they've now taken aim at another kind of senior, 12th graders:

"In a press announcement released [Monday], HHS stated that HHS Secretary Kathleen [Shecantbeserious] and Secretary of Education Arne Duncan “are reaching out to campus leaders to remind graduating high school, college and university seniors about their new health insurance options under [ObamneyCare©].”

Uh-hunh.

And what, exactly, are those options? Well, thanks to Kathy and her boss, child-only major medical plans are extinct (and have been for  a while). So-called "adult children" can snag a ride on their folks' policy, but at a greatly inflated cost. So much for flying the nest.

Irony abounds as well in that colleges are now dropping student health insurance plans (good riddance, by the way), leaving these new graduates with fewer choices than ever. And, of course, the employer mandate's going to leave them with fewer group health plan options.

But Henry, at least smaller employers will continue to offer affordable health insurance plans, what with the great ObamneyCare© tax breaks, right?

Um, no:

"Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible ... According to employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance."

Shocking, ain't it?

Intrepid Carrier Trick: Rx Edition

This is an interesting and frustrating confluence of several InsureBlog themes: Pharmacy Benefits Management (PBM), transparency and consumer-centric health care. On the one hand, we're encouraged to become more "hands on" regarding our own care, to be more cost-conscious consumers with "skin in the game." On the other, carriers often put up major roadblocks that actively prevent us from saving both ourselves and the insurance company some major bucks.

And sometimes, persistence and common sense prevail. Here's the story:

Melvin and his family have been clients for many years. He early on bought into the Health Savings Account (HSA) idea, and has enjoyed both the savings that it represents and the ability to bring at least some of his health care under his own control. Recently, his wife was diagnosed with a serious (but thankfully not life-threatening) condition, the only treatment for which has been costing him over $600 a month. The good news is that this quickly eats up their $3,000 family deductible. The bad news is that he has to come up with the $600 every month for almost half the year.

A few months ago, he learned about a Canadian supplier that can provide the exact same medicine at about $100 a month. His carrier, Medical Mutual of Ohio (MMO), even has a claims form for just this circumstance. So, Melvin bought a 30-day supply in December (to cover Mrs Melvin until the Canadian supplies kicked in), and then a 90-day supply early this year, waiting the required 30 days before doing so.

He then downloaded and completed the rx claim form, and (as instructed) mailed it to MMO's Pharmacy Benefit Manager, Medco. What we didn't know at the time was that, even though the meds are covered, the process for this method required dealing directly with MMO, not Medco.

It took us several weeks, phone calls and emails, but in the end, Medical Mutual followed through, coming up with a workable, long-term solution. We know this because Melvin has now tested it, and everything went precisely as it should.

This is critical, because as more folks access alternative delivery options (such as from Canada or other exotic locales), these kinds of processes will need to be implemented. Melvin and I are quite happy with how Medical Mutual, once prodded, stepped up and did the right thing.

[Special InsureBlog Thanks and Kudos to MMO's Ed B and Regina D]

An Historic First

Way back on this date in 1761, the first life insurance policy sold in America was purchased by the Rev. Francis Allison of Philadelphia. This makes sense, since the company which issued the policy was called the 'Corporation for the Relief of Poor and Distressed Presbyterian Ministers and of the Poor and Distressed Widows and Children of Presbyterian Ministers,' which was "formed by Presbyterians for their ministers."

But wait, it gets even more interesting: according to an item in the February 3, 1902 edition of the New York Times, the company (by then known as the Presbyterian Ministers' Fund), was also the first insurer to offer non-forfeiture options and cash values.

By 1990, the carrier had become the Covenant Life Insurance Company; four years later, it became part of the Provident Mutual Life Insurance Company, which was itself bought by Nationwide 10 years ago.

RomneyCare, Then and Now

RomneyCare begat Obamacare. We believe states are the best "test tubes" for anything proposed on a national level, so if you want to get an idea how something such as Obamacrap is going to play out over time, see how it has performed at the state level.            

The folks at Kaiser Foundation have provided us with this nifty update on RomneyCare, 6 years later.

Since 2006 the residents of Massachusetts have:

• 94% of their population covered by health insurance 
• Witnessed increased access to health care
• Failed to control health care spending 
• Per capita health care spending is 15% higher than the national average
• Health care spending AND health insurance premiums are HIGHER than any other state in the country

Meanwhile, the number of citizens in taxpayer subsidized health insurance programs continue to rise.

• 158,000 low income families in non-Medicaid health insurance plans
• "Low income" is defined as less than 300% of the FPL (federal poverty level)
• Added 61,000 children to Medicaid and SCHIP rolls
• 1% of the citizens paid a fine for failure to comply with the individual mandate

And then there are the taxpayer funded subsidies . . .

• $1.3 billion from MA taxpayers to subsidize the cost of health insurance for low income individuals and families
• $26.75 billion from CMS paid over 3 years. For those not paying attention, the $26.75 billion came from you and me.

So there you have it. After 6 years nominal gains have been made in lowering the percentage of uninsured citizens (from 10% to 6%).

Health care costs, and premiums, continue to rise faster than the national average and health insurance premiums are the highest in the country.

In addition to premiums paid, taxpayers will chip in an extra $1.3 billion in NEW taxes for 2012 plus another roughly $8 billion from the rest of us.

The folks in D.C. call that spreading the wealth around.

At InsureBlog we call it that hopey-changey thing.

How is this working for you?

The 3000% Lie

Remember back in the day, when Dear Leader promised folks a 3000% decrease in health insurance premiums?

Apparently, his Ginkgo Biloba ran out:

"For the first time, the total bill for the typical family of four with an employer-sponsored health-care plan ... breached $20,000 in 2012."

For those keeping score at home, that's almost 7% more than last year.

Math is hard.

[Hat Tip: FoIB Holly R]

ObamneyCare© Updates

While we wait for the SCOTUS ruling on whether or not any of this will really matter. HHS Secretary Shecantbeserious and her minions continue inexorably on their way towards full implementation. To wit:

■ From the "Death and/or Taxes" Department:

"Final regulations for implementing the health insurance purchase tax credit provisions in [ObmaneyCare©] are set to appear in the Federal Register Wednesday [the 23rd]. "

The income redistribution scheme subsidy program is designed to make the unaffordable health insurance premiums less unaffordable, except for those who must actually pay for coverage.

■ FoIB Jeff M alerts us to this news from the Mountain State:

"West Virginia is peering over the cliff of a Medicaid funding shortfall ... Medicaid goes into FY 2013 with a slight budget surplus, but FY 2014 poses a $236 million shortfall, “which is daunting."

2014? What could possibly be on tap for 2014 that would create such a major budget crisis?

'Tis a puzzler.

■ And, finally, from Dr Brad Flansbaum, this story from The Gray Lady on how small business owners are trying to cope with the onsalught of new regs and requirements being handed down by Ms Shecantbeserious and Co:

"During the most recent meeting of our business group, we asked the owners to talk about how they are handling this increasingly complicated, costly and uncertain issue."

It's an interesting discussion.

The Church vs ObamneyCare© - Breaking News

Last time we looked, the Catholic Church was none too pleased with the direction ObamneyCare© had taken vis: convenience items birth control.

Now, they've turned up the heat:

"Catholic archdioceses and institutions filed suit in federal district courts across the country [today] against the so-called contraception mandate, in one of the biggest coordinated legal challenges to the rule to date ...

The groups are objecting to the requirement from the federal health care overhaul that employers provide access to contraceptive care."

That's gonna leave a mark.

Medical Loss Ratio

Medical loss ratio's as defined (dictated) under Obamacare were supposed to bring premiums down, saving taxpayers untold millions of dollars. As Henry recently pointed out, the average "rebate" to OH consumers is about $268 to individual consumers.

And that is only for those who are entitled to a rebate.                

About 1 in 3 policyholders will get a rebate, the rest of you get a lump of coal.

The folks at Kaiser Foundation calculate the average rebate at $39 so you folks in Ohio must be living right.

Don't spend it all in one place.

Currently the MLR (medical loss ratio) provisions of Obamacrap apply only to those with individual major medical or employer (fully insured) group health plans. But changes may be coming. (More on that in a future post).

What impact has MLR had on health insurance premiums, and on health insurance in general?

• Premiums are still rising at the same or higher clip than before Obamacrap/MLR
• Carriers are reducing support staff and/or hiring cheap overseas call centers
• Longer processing times for new health insurance applications
• Longer processing times for health insurance claims
• Fewer carriers offering health insurance plans
• Fewer carriers = fewer choices = higher premiums
• Fewer agents willing to offer health insurance products for their clients
• Agents that do still offer health insurance cannot afford to offer the same level of service as before
• More cost shifting to the consumer as carriers "gut" plans to produce lower premium choices

How is this working for you so far?

Bet the seniors on Medicare can't wait to see what surprises are in store for them. And let's not forget that AARP was and still is a major supporter of Obamacare.

Health Insurance Rates Drop 60%

Health care reform will result in lower health insurance rates, up to 60% lower than current rates. Yes, health care reform seems to be working . . . for those who live in Maine.  

Falling health insurance rates due to health care reform is the lead in of a post at The Maine Wire.

PL 90, the free market based health reform law, was passed last March by a Republican majority in Maine’s legislature. Governor Paul LePage signed the bill in a ceremony at the statehouse amid cries from Democrats that it wasn’t right for Maine.

Well that's a twist.


Republican health care reform but Democrat's protest the move.
The law has resulted in a drop in rates for small group plans but individual rates are expected to drop as much as 60% . . . for some age groups . . .


Maine has two provisions on the books that make health insurance premiums unaffordable for most folks. Community rating and guaranteed issue, two things that are cornerstones of Obamacare, drive premium rates through the roof.


Community rating means essentially everyone pays the same rate, regardless of age or gender. Guaranteed issue means anyone can buy coverage, regardless of their health or existing medical conditions.


In the parlance of Obamacrap, "Insurance companies can no longer discriminate against you because you have a pre-existing condition".


The flip side of that argument is, "Insurance companies will be allowed to charge significantly higher premiums to those who are healthy to pay for the claims of those who have expensive medical conditions".


That is analogous to auto insurance carriers charging drivers with perfect records the same rate as one who has had multiple DUI's and speeding violations. Or banks imposing much higher interest rates to the most creditworthy so they can also extend credit to those with severely damaged credit.

PL 90, the health reform law that Republicans guided through the legislature despite passionate opposition from Democrats, expanded the “rate bands” to allow a wider variation in cost between different aged applicants. In the past, insurance companies had to treat a 21-year-old and 55-year-old as basically the same. The new law allows for distinction in age groups. 

Once the new rates are approved, a 21 year old will pay $215 per month for a plan with a $2,000 deductible. Before health care reform, that person would pay $448 per month.


The rates are still high, mostly because the guaranteed issue provisions remain in play, but are much more affordable. A healthy 21 year old in Atlanta, Georgia could buy a comparable plan from Cigna for $98 per month.


So the Obamacrap-like guaranteed issue provisions mean healthy people will still pay double the normal premium so everyone can have health insurance.

Seems fair, right?

“Getting more young people into the market is a major plus for all Mainers and was a primary goal of the law,” Allumbaugh notes. “As this happens, the claims experience tends to improve and it can lower the rates even further for all age groups,” Allumbaugh said.“This is precisely the impact the health reform law aimed for, lowering rates generally, but in a way that helps our insurance markets reverse the death spiral and begin to grow.”

Death spiral. Now that's a word you don't hear every day.


Hyper-regulation by the Maine Department of Insurance has resulted in most health insurance carriers leaving the state. Anthem Blue Cross controls most of the health insurance market in Maine. Less competition, higher rates.


The same thing we will have in 2014 when Obamacrap is in play.


How is this health care reform idea working for you?


About as well as hope and change.

Java Overboard!

A few years ago, we noted that even just a few cups of coffee each day might help "slow the progress of Alzheimer’s disease and even reverse the condition."

Turns out, more may be even better, because loading up on the brew may actually help with longevity:

"[M]en who drank at least six cups of coffee a day had a 10 percent lower chance of dying during the 14-year study period than those who drank none. For women, the risk was 15 percent lower"

And it's not necessarily the caffeine, either; regular and decaf see similar results.

I do have a problem with the article's headline, though:

"6 cups a day? Coffee lovers less likely to die, study finds"

Really? Last I looked, the risk of dying is pretty much 100%, beverage of choice notwithstanding.

Be Careful What You Wish For . . .

The folks at Consumer Reports open their mail bag . . .


I'm pregnant. Can my health plan refuse maternity coverage?

Q. I thought I had completed my family, and was confident of never getting pregnant again because I had an IUD. So we bought an individual family plan from Blue Shield of California that excludes pregnancy. But I got pregnant anyway. I asked to be moved to a plan that covers pregnancy, and was denied because of my "pre-existing condition." Is this legit?

A. It sure is. In every health-plan underwriting manual I have ever seen, pregnancy is on the list of conditions that will get you turned down flat for new individual coverage.Moreover, the vast majority of health plans sold to individuals exclude maternity coverage. A recent study of some 3,300 individual policies by the National Women's Law Center, a Washington, D.C. advocacy group, found that only 12 percent included maternity coverage, and half of those were in the handful of states with laws that require it. In a few states, including Colorado, Connecticut, Nevada, and South Carolina, not a single plan available to a 30-year-old woman included maternity coverage.

In other states, you can get limited maternity coverage through an add-on rider that costs extra, but typically must wait a year or more before the benefits kick in, meanwhile paying an additional premium that may cost more than the basic policy itself.

"You can buy coverage in $1,000 or $2,000 increments, but by the time you've waited, you get back $100 or so if it's a normal delivery," says Judy Waxman, the center's vice president for health and reproductive rights. "It's just not worth it."This is one of many ways that individual health insurance is inferior to group coverage, which has included maternity care without exception for years.

But you, dear California resident, are in luck. Last year, California became the ninth state to pass a law requiring all individual health plans to cover maternity care. The new law takes effect July 1, 2012. According to a spokeswoman for Blue Shield of California, as of that date, the new benefit will automatically be added to all the company's individual plans, starting immediately. If your due date is any time after that, your remaining expenses for prenatal care and delivery will be covered.

The Affordable Care Act, aka Obamacare, will fix this problem for good. As of Jan. 1, 2014, all individual health plans sold in the U.S. must include maternity coverage. And you can sign up for a plan even if you're already pregnant, because insurers won't be able to turn you down for any pre-existing condition.

Yes dear readers, Obamacare will "fix" all that. Starting in 2014 all major medical plans will be required to cover maternity. Not only will men have to pay for maternity coverage, but so will pre-menstrual girls, post-menopausal women, sterilized women and those who, for any number of reasons, are unable to get pregnant.

Everyone will see their rates increase. How much? We will get an idea by looking at California.

Expect Dave Fluker to post something on his blog as soon as July rates are released, but don't expect it to be pretty.

All this is part of that spreading around the wealth thing.

Cavalcade of Risk #157 now online!

Dennis Wall presents this week's collection of risk-related posts. Please drop by.

Dying for a quiet ride

File this under "Risky Unintended Consequences:"

"Hybrids are so quiet that pedestrians never hear them coming ... NHTSA studies ... confirmed what many long suspected: Hybrids and electric cars are too quiet for the blind or even the fully sighted to hear them coming."

Ooops.

On the other hand, I was taught to always look both ways before crossing the street.

Of course, that doesn't really apply to the sight-impaired, who count on a certain noise level to assess risk before stepping off the curb. 'Tis a puzzler.

Then again, maybe not:

"Thanks to the Pedestrian Safety Act of 2010 ... the National Highway Traffic and Safety Administration is required to initiate a rulemaking process for minimal vehicle noise—not how quiet, but how loud a car must be." [emphasis in original]

"Initiate a process." As in, start to consider the idea of a study to determine how to proceed.

How many people will die (or be seriously injured) while they commission the blue ribbon panel?

And the problem's only going to get worse, of course, as more and more electric and hybrid cars roll off the assembly lines and into traffic. The good news is that the Chevy Volt contains its own vehicle announcement system:

Tuesday Morning LinkFest

■ We recently learned how resveratrol, a compound found (for example) in red wines, works. But that's not all: turns out, it's also potentially useful in combating the effects of Alzheimer's.

■ The 'web can be a very useful and powerful tool for critiquing vendors, but be careful whom you critique and how:

"Two years ago, Dennis Laurion logged on to a rate-your-doctor website to vent about a Duluth, Minnesota neurologist ... McKee wasn't amused. He sued Laurion for defamation"

It may well be that the truth is a valid defense, but prudence is always a valid idea.

■ From FoIB Jeff M, we learn that upcoming Medicare changes are going to be very costly for at least one hospital - and the odds are good that this isn't going to be an exclusive club.

■ Is this something? The Feds are starting to "audit" ObamneyCare© compliance, including double-checking "grandfathering" status.

And even MORE ObamaFail©

In case you missed it yesterday:

Now what does that banner remind me of?

Stupid MLR Tricks

From the "Be Careful What You Wish For" Department:

"Health-insurance companies must tell customers who get a premium rebate this summer that the check is the result of [ObamneyCare©], according to federal guidelines (late last week)"

The idea is that grateful consumers will necessarily credit their windfall with the new train-wreck law, a net boon for the President's reelection campaign.

Or is it?

As we've noted here at IB, the average rebate is in the neighborhood of $127. That's total, not per month. Yet average premiums under ObamneyCare© have skyrocketed, more than wiping out that piddly savings. So what are the odds that the average insured is going to look at the additional thousands of dollars in premiums he laid out, and then feel good about the measly $127?

Oh wait, did I say $127? Well, that's before taxes.

Yup, as we also noted previously, if your premiums come out pre-tax (as many group plans make available), this is a taxable event. Don't believe me?

Well, believe the IRS.

So not only does Joe Shmo get a token $127, he doesn't even get to keep all of that. Plus, he now has to file an amended return for that year, at a cost that could well exceed the rebate.

And what about those individuals who receive rebates? They may dodge the tax bullet, since very few are able to deduct their premiums. But if they're self-employed, and did take the deduction, well, see above.

MLR may well be the gift that keeps on taking.

Should we pay $11,000 a year to facilitate riskier behavior?

Last week there was news about the possible approval of a drug to treat HIV to now be used to prevent from getting infected in the first place.

"The first drug shown to prevent HIV infection won the endorsement of a panel of federal advisers Thursday, clearing the way for a landmark approval in the 30-year fight against the virus that causes AIDS.

In a series of votes, a Food and Drug Administration advisory panel recommended approval of the daily pill Truvada for healthy people who are at high risk of contracting HIV, including gay and bisexual men and heterosexual couples with one HIV-positive partner."

The quick answer; this is a great opportunity to prevent the spread of a terrible disease.

The more pragmatic answer; at what cost? Condoms accomplish the same outcome with greater success and cost $30 a month if you're doing very well.

Truvada:

"Other speakers worried that wide scale use of Truvada would divert limited funding from more cost-effective options. Truvada sells for about $900 a month, or just under $11,000 per year. The AIDS Healthcare Foundation, which opposes approval of Truvada, estimates that 20 HIV-positive patients could be treated for the cost of treating one patient with preventive Truvada.

"Truvada for prevention will squeeze already-constrained health care resources that can be better spent on cheaper and more effective prevention therapies," the group states in a petition to the FDA."

That is an additional $10,640 per year per individual. From the same article 1.2 million people have HIV and an additional 240,000 are unaware they carry it. How many of them have partners that will now expect someone else to pay $11,000 per year for them to engage in risky sexual behavior?

1.2 million people times $11,000 is $13.2 billion in additional spending. Around 13 billion more than the more effective condom. Who is going to say no? If you do the left will attack you as anti gay. The government doesn't care, it's not their money and sure to buy some votes. Insurance companies won't care, 15% margin on $11,000 is an extra $1,650 they can make now. Self-funded employers would object but HHS would probably just slap them with another mandate then castigate them for not controlling the cost of insurance. 

A simple solution would be to allow the market to charge more for polices that covered this drug, PPACA pretty much killed that solution. If free birth control is now a right granted by our constitution how can this right also not be "found"?

The Passing of a Legend

"Legend" is not a word to be used lightly, and rightly so. When someone is referred to as a legend, more often it is reserved for those in the public eye, and usually in sports.

Cal Ripken, Vince Lombardi, Arnold Palmer.    

Those of  us in the insurance field have legends too but rarely are their names known outside of our "inner circle". Ben Feldman, Mehdi Fakharzadeh, Al Grannum.

Not exactly household names.

We lost a legend last week.

Frank Stastny, pronounced Staz-nee.

Frank was an unassuming man with a gentle spirit and incredible sense of humor. A humble man who had done well in life, mostly by just being himself.

I should note that I never met Frank personally. Never heard him speak in public, but we did chat on the phone on several occasions.

When I "met" Frank he lived on a goat farm in Missouri. He raised goats, I suppose, for profit. I can't imagine anyone raising goats for fun.

Frank's claim to fame was his incredible wealth of knowledge about Medicare and especially his real love (other than his wife Jacqueline), Medicare supplement plans.

Medigap plans (the other name for Medicare supplements) were his specialty. Roughly 17 years ago he started selling Medigap plans and never looked back.

Over that time period he met thousands of seniors, made friends with all of them and even turned several hundred in to clients.

Never pushy. Always willing to educate those who would listen. And that is how I met Frank.

He was part of an online community of insurance agents. In a world of anonymity, Frank stood out, not only for his willingness to share information and train anyone who was willing to learn, but he did not hide behind a moniker (although we did affectionately refer to him as the goat man).

If anyone posted a question about Medicare, usually the first response was "Frank will be along shortly to answer your question".

There may be people that knew more about Medicare supplement plans than Frank, but he was our acknowledged guru.

A friend and fellow agent started a thread on May 7 that was simply titled "Frank Stastny - RIP". At first, several thought it was a sick joke. The one who posted the comment is known for his warped sense of humor but this seemed to be credible, and totally out of character even for him.

A few questioned it, but slowly the reality sank in.

Frank Stastny really was gone.

Five days later and almost 200 comments and condolences, the thread is still alive. Frank's widow threw us a loop a few days ago when she logged in under Frank's persona and posted a word of gratitude for all the kind words.

There are literally countless other threads on the forum filled with thanks to Frank for his support, training and encouragement.

As Yogi would say, "They must have been posted before his death".

Yes, they were.

Almost invariably the thread would be hijacked by someone poking gentle fun at Frank, but done in a way as to convey the love and respect we held for this man.

"God believes Frank created the universe".

"When Frank bowls, he bowls overhanded".

"The worlds most interesting man brings Frank a latte and cookie every morning".

"Frank's personality is so magnetic he is unable to carry credit cards"

"Frank counts to infinity every morning before breakfast".

Dare I say, Frank was loved?

Loved, and sadly missed by all, even though most never met the man . . . but they did know the legend.

Not really at odds at all

In the HWR Joe Paduda made the following point, which has been made by others on the left;

"- most GOP-authored bills allow people to shop for insurance across state lines, which seems to be at odds with other GOPconcerns that health insurance should be the purview of the states, and the Feds ought not to be involved"

There is nothing at odds in this belief and it has been settled case law for decades. Insurance is regulated where it is sold. This means if I live in MA but drive to DE to purchase an insurance policy the policy will be regulated in DE where it was sold. This is not only commonly done between states but also countries. There are types of risk, usually P&C, that businesses and individuals will insure offshore. Since the policy is purchased outside of America it is not subject to American insurance laws. You need to be careful when you do this as there are tax issues and money laundering concerns but as long as you are legitimately purchasing insurance for an insurable risk, leaving the jurisdiction where the risk resides to buy insurance in another jurisdiction in order to be subject to that jurisdiction's laws is far from new or uncommon, despite what the left would like you to believe.

ObamneyCare© Mecca

We've noted before that certain religious groups have been granted ObamaWaivers© as regards the (Evil) Individual Mandate. Exactly how that's legal has been unclear, though.

Until now:

"[ObamneyCare©] uses the Social Security language of the Internal Revenue Code to determine who is eligible for “religious conscience” objection to the insurance mandate."

That is, since Moslems consider insurance as "haraam" (forbidden), they're not going to be required to buy health insurance. Other religions, including the Amish and Christian Scientists, are also being given free passes on the Mandate.

I find this fascinating: after all, mandate is defined as "[a]n authoritative command or instruction." I googled around, and couldn't find it defined as "[a]n authoritative command or instruction. Unless it's inconvenient or offensive."

Funny, that.