Exchange already hacked

"With the news that the Utah health exchange -- one of just two state-run online insurance marketplaces in operation -- was recently hacked, states planning their own exchanges as prompted by the Affordable Care Act (ACA) might want to take a closer look at how they’ll handle cybersecurity."

Private firms, like your insurance broker, fear allowing this to happen as it can put them out of business. The notification requirements of a potential break-in alone could bankrupt someone, let alone paying any damages.  When the government is careless and gives away a few million peoples' personal info, no big deal, they usually can't be sued and even if they are its not their money.

A notoriously careless entity holding personal and sensitive info on 300 million people, what could possibly go wrong. Wiki Leaks Health Edition? 

Keeping abreast of the MVNHS©

So how is this medically necessary?

"More than 250 girls aged 16 and under have had breast enlargements paid for by the NHS ... Across all age groups, more than 3,000 women had augmentation surgery last year"

And will the Much Vaunted National Health Service© also pay for breast reduction surgery when these women have back problems later in life?

A Protection Racket By Any Other Name

In order to afford to offer health insurance a number of my clients audit their hospital bills to make sure the charges are reasonable and undelivered services are not slipped in. As most PPO contracts are a percentage off billed charges that starting number is very important.

Following is part of a letter we received from a hospital's attorney last week;

"Hospital personnel were in communication with your office and were told that you needed the itemized bill. I question whether you are entitled to receive an itemized bill, given the fact that this claim should be repriced through the XXX PPO (not it`s real name), which presumably has a contract with either your company or the plan, and I believe that the contract would preclude your request."

Few key points here, this presents employers with two choices;

1. Either don't employ a PPO and subject your plan and members to 100% of hospitals` billed charges, remember these are charges no one actually pays because they are so high, discounts run up to 80%+ off these artificial charges; or

 2. Employ a PPO and forfeit all rights to review or question the bill.

Keep in mind how one sided PPO agreements are, a plan is purchasing a discount but they have no idea what that discount is off of. A 5% discount on a $2,000 bill is better then a 50% discount on a $20,000 bill (20K is an actual claim we received for what should have been a 2K colonoscopy, even with a 50% discount hospital was still trying to collect 10K for a 2K procedure).

If someone in almost any other field tried what this attorney is they would be brought up on extortion charges. The good news is it might not be long till he is;

State of California, ex rel Rockville Recovery Associates, Ltd. v. Multiplan, Inc., et al.

 In summary, the memorandum describes fraudulent billing practices perpetrated by hospitals and other healthcare facilities, whereby these billing entities routinely submitted invoices for services that were not performed, were already paid for as part of other claims, or were simply inexcusably excessive. The memorandum identifies these practices as fraudulent, and the plaintiffs seek to pursue legal action against the billing parties.

In addition to these predatory billing practices, the memorandum goes on to accuse the applicable PPO network of aiding and abetting these fraudulent billing practices. Indeed, the network contract that bound the benefit plan in this matter, prohibited the plan from auditing the claims in question, and precluded the payer from examining the claims for inappropriate, excluded, and/or excessive charges. This is likely a scenario with which you are already familiar.

Rosh HaShannah 5773

These yeshiva students from Jerusalem know that life goes in one direction:



To all of our readers, may you be inscribed in the Book of Life, and may the new year be one of joy, health and happiness for you.

About Pre-ex

Finally, a breath of fresh air regarding pre-existing conditions:

"The emphasis on pre-existing conditions is aimed at creating the false impression that the only way to cover anyone who might become seriously ill is with ObamaCare’s heavy-handed and government-centric requirements."

Quite so.

In health insurance parlance, a pre-existing condition (or "px") is generally defined as an illness or injury for which medical advice, diagnosis care or treatment was recommended or received in the 6 months or year preceding the proposed effective date. This is, of necessity, a rather broad definition, but the point is that it's not an insurmountable obstacle to coverage.

HIPAA pretty much did away with that problem when dealing with group (employer-based) coverage: once you'd been insured for at least a year, going from group to group (or even individual to group) meant that you'd be covered right away.

The real problem is in the individual market. Those HIPAA provisions didn't apply to individually underwritten plans, and companies could exclude conditions or people from coverage. Until ObamaCare, the options were so-called "HIPAA plans" (one of the very few individual marketplace reforms in that legislation) and state-based high risk pools.

As Bob's noted, the PCIP program was about the only bright spot in ObamaCare, and even that was hobbled by the stupid requirement that one go "bare" for 6 months.

What's needed is a simple, and ultimately fair, system that recognizes the problem, and applies the group rule to the individual market: once you've been insured for a year, you can "jump ship" to a new plan which would have to cover any (disclosed) px.

Regular readers will notice the problem: isn't that, then, "guaranteed issue?" Not necessarily: some carriers have already long since done away with exclusions and riders, making underwriting more of a binary decision. Coverage is either offered (generally with a higher than quoted premium), or not. I can tell you from experience that far more folks are accepted than declined, which brings us back to PCIP: the current iteration requires not just that one has been turned down, but that one has been uninsured for a half a year. How big a deal would it be to simply swap out that requirement with one that waives coverage for the pre-existing condition for the first 6 months of coverage?

Is this a "perfect" solution? Of course not, but it brings the (perceived) problem down to a manageable size. The linked article goes into some detail about how to "smooth out" some of the wrinkles, especially as regards premium subsidies, and is well worth the read.

I should add: The point of the 6-month wait for px (in the PCIP plan) is that it discourages folks who wait until they're sick to actually, you know, buy the insurance. Beats the heck out of a mandate tax penalty fine.

LifeBridge at 10

Today's episode of Life Insurance Awareness Month is pretty cool: the 10th anniversary of MassMutual's LifeBridge program.

Longtime readers may recall our 2006 post celebrating the program's 4th anniversary; the folks at MassMutual reached out to us to bring us up to date as it reaches the decade mark.

We're joined today by Nick Fyntrilakis, Vice President of MassMutual's Community Responsibility department.

InsureBlog: Nick, what can you tell us about the MassMutual Community Responsibility department?

Nick Fyntrilakis: Many carriers have Community Affairs or Relations departments, we chose "Responsibility" to reflect our core values, a commitment to our communities. It just seems more appropriate. We run MassMutual's charitable giving and philanthropic activities - in fact, MassMutual donates over $7 million to these causes, including scholarships, grants and the like. I should point out, though, that this does not include the money we budget for the LifeBridge program, that's over and above.

IB: As we understand the program, LifeBridge provides free life insurance to struggling families. How does it work?

NF: MassMututal issues a $50,000 policy [ed: 10 year term chassis], payable to a trust for the benefit of one's progeny. If tragedy strikes, the funds can be used for tuition, books, even room and board.

Parents must be aged 19 to 42, a permanent, legal US resident with an annual income of no more than $40,000, and must pass underwriting. That last could be a problem for folks with Type I Diabetes or HIV, for example.

The process itself is pretty simple: there's an eligibility form and an application, and some financial info is also required (to confirm eligibility). [Full details are available here]

IB:. How many LifeBridge policies has MassMutual issued over the past 10 years? How many LifeBridge claims have been paid?

NF: We've issued about 12,500 policies nationwide, which amounts to about $625 million in life insurance coverage. To date, we've had about 20 or so claims, which represent over a $1 million paid out to those left behind.

IB: Is there anything else you think our readers should know about LifeBridge?

NF: We're very proud to be the only life insurance company that has this kind of program in place, to have developed and implemented this unique way of giving back. It's literally putting our money where our mouth is, putting our principles into action. And we have a website with all the information your readers might need.

Thanks, Nick, for your time, and continued success with this very worthy endeavor.

[Special IB Thanks to Caitlin Bricker for setting this up]

Cavalcade of Risk #166: Call for submissions

Jeff Rose hosts next week's Cavalcade of Risk - Entries are due by Monday (the 17th).

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

You'll need to provide:

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

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

Thanks!

NB: Thanks to these folks, we're all scheduled 'til the end of the year: Russell Hutchinson, Irwin Jacob, Ray at Excess Return, Jay Norris, Emily Holbrook, Becky Shafer and Van Mayhall.

Shecanbe-unemployed?

"The Office of Special Counsel (OSC) has concluded that Secretary of Health and Human Services Kathleen Sebelius violated the Hatch Act by engaging in political activity during an official appearance at the Human Rights Campaign’s gala in the battleground state of North Carolina this past February."

"The matter now has been referred to President Obama, who has the statutory responsibility to take “appropriate action” in light of the OSC’s finding that Secretary Sebelius violated the Hatch Act. The presumptive penalty for a Hatch Act violation is termination from government employment, which, if challenged, can be reduced to a suspension of no less than 30 days without pay. Notably, a former U.S. attorney was suspended last year for 100 days for a violation that was considerably more nuanced than the violation by Secretary Sebelius."

I wouldn't hold your breath expecting any accountability here, which is a good thing for this blog, that would be a lot of canned jokes that would need replaced if she was fired.

MVNHS© still swirling

As we continue our inexorable march off the ObamaCare cliff, it may be instructive to note how such a plan fares "in the real world:"

"Patients’ lives are at risk in [MVNHS©] hospital wards that are “on the brink of collapse” due to a critical shortage of out-of-hours doctors and growing numbers of the elderly."

Turns out, when the government runs health "care," people die. That's because care is secondary to rules, and docs aren't incented to put patients' needs first:

"[D]octors’ shifts are limited by the European Working Time Directive and they do not want to work anti-social hours."

In fact, the Much Vaunted National Health Service© just killed off over a thousand seniors, which just has to be good for the ol' bottom line. That's due to the fact that some 70% of hospital beds are occupied by "over-65's." Since the US now has over 10,000 citizens a day turning that magic age, the Brits have company in that regard.

Add to that the existing shortage of hospital beds under MVNHS© "management," and one can see where selective thinning of the senior herd may be desireable.

But hey, it's just economics, nothing personal.

How much do YOU know?

For Life Insurance Awareness Month, the folks at H&R Block (whom Bob quoted the other day as awaiting final IRS rules on ObamaCare) have produced a pretty neat infographic on - of all things - life insurance:

Click image to see a larger versionHow Much Do You Know About Life Insurance via H&R Block

Health Wonk Review: Gridiron edition

Louise at Colorado Health Insurance Insider presents this week's collection of wonky posts, all looking to score a touchdown for your attention. here's a LOT of great material here, well worth your time.

MVNHS©: Cold and Dead

Fresh off killing young cancer victims, the Much Vaunted National Health Service© continues illustrating the deadly consequences of government-run "health care."

The cold:

"A retired schoolmaster took his own pillows and duvet into a new £170million hospital wing because he was so shocked by the conditions in which his son was being treated."

William Handy (no relation), under treatment for a stomach issue, was found "shivering under blood-stained sheets." When his father complained, he was told that cleaners had "refused to come in because they feared catching an infection."

An infection? At a hospital? Really?

There was also trash on the floor, which the alleged cleaners also refused to handle.

But Mr Handy was the lucky one.

The dead:

"A young mother died from a heart condition after doctors repeatedly told her she only had heartburn when she complained of severe chest pains."

The 28-year old, Gemma Jones, had been seen by various minions of the MVNHS© providers over several months. Each time, she was brushed off, even though a simple (and inexpensive) test could have immediately shown the problem.

Good thing she didn't have to worry about blood-stained sheets, though.

But those are just one-offs, right?

Right?

Not so fast:

"Britain is suffering from an exodus of doctors ... [MVNHS©] is suffering a 'brain drain' of doctors as more medics trained at taxpayers' expense choose to pursue their careers overseas."

And why not? As we've seen above, British medical "facilities" are a disgrace, pay is low, and there's no incentive or reward to excel.

Good thing that can't happen here, though.

Right?

Life Happens

Continuing our coverage of Life Insurance Awareness Month:



Now, you may be wondering what this has to do with life insurance.

The risk of your bikini (unintentionally) coming off is remote.

The chance of dying isn't.

[HatTip: Jon Bloom]

Post-Isaac Insurance Tips

The folks at the Insurance Information Institute sent us some helpful information to pass along to our readers. Since this is an area outside our own expertise, I turned to our on-call P&C guru Bill M for vetting. He gave it his seal of approval, so here ya go:

1. Is damage from hurricanes covered under my homeowners insurance policy?

Standard homeowners insurance policies cover damage to the structure of your home and to personal possessions from windstorms such as hurricanes, tropical storms and tornadoes. There is also coverage for storm damage to a garage, deck, gazebo, shed, swimming pool and other structures on your property.

2. Does my renters insurance cover damage from hurricanes?

A renters policy provides coverage for personal belongings damaged by a hurricane. Damage to the apartment’s structure, such as walls and floors, is covered under the insurance policy of the building owner.

3. Are flood losses covered under my homeowners or renters insurance policy?

Flood damage is generally not covered under standard homeowners and renters insurance policies. Flood coverage is available from the National Flood Insurance Program (NFIP) and from a few private insurers. Flood insurance covers losses resulting from heavy or prolonged rain, coastal storm surge and failure of levees or dams ... For more information about flood insurance, watch the I.I.I. video, Water and Flood Damage: What Is Covered and What Is Not.

Introducing: RahmCare!

Earlier this year, Bob noted that, although sound in theory, so-called "workplace wellness programs" aren't really all that effective at reining in health insurance costs:

"Workplace wellness programs sound like a win-win ... Actuarial studies covering thousands of employees over the last 25 years or so don't bear that out"

That hasn't stopped erstwhile presidential advisor (and current Windy City mayor) Rahm Emmanual from implementing his own version:

"Chicago Mayor Rahm Emanuel has announced a new “wellness program” for all city employees and their spouses ... The program, called Chicago Lives Healthy, is technically voluntary; but those refusing to participate in it will be penalized $50 a month"

Gotta love that parsing: it's "voluntary" but refuseniks face a $600 annual penalty tax fine assessment. Unsurprisingly, almost half of those eligible have signed up. The program itself entails an initial biometric screening, a comprehensive written assessment, monthly check-ins with a disease-management company, and the list goes on. It'll be interesting to see how this obtrusion into folks' personal life will ultimately play out, and if the city sees any substantive rate relief as a result.

By the way, I would be remiss if I failed to point out that Hizzoner's brother is the "esteemed" Dr. Ezekiel Emanuel, an outspoken proponent of the "social resource allocation model" of health care.

We know it as "rationing."

Cars and Care (Or: Volts and Valves)

Did you know that General Motors we taxpayers lose almost $50,000 each time a Chevy Volt gets sold?

"[The taxpayer] is taking a $49,000 bath on each Chevy Volt it sells ... the ballyhooed pug-in hybrid vehicles is currently costing upward of $89,000 to produce ... a sticker price of just less than $40,000"

Now, you may be wondering what this has to do with health care.

It's simple, really: the government is (reasonably) good at doing the things for which it was originally intended. But our form of government was never designed to own the means of production - car factories, for example. And because the government is, by definition, the ultimate non-profit, it bring that not-for-profit mindset to everything it touches.

And under ObamaCare, the government essentially owns the means of health care.

Don't you feel better already?

The Best (and Longest) Sentence of the Year

[Hat Tip: Ace of Spades]

Life insurance in 1,000 words (give or take)

Continuing our efforts to promote Life Insurance Awareness Month, here's a nifty "infographic" from Life Insurance Selling magazine:

They also have a very helpful interactive widget featuring easy-to-understand definitions of common (and not-so-common) life insurance terms. Click here for that.

It's not over 'til it's over

In contrast to the brouhaha stirred up by the February 10, 2012 IFR (Interim Final Regulation) mandating contraceptive coverage, the revised IFR released August 15 has received relatively little public attention. (There's a link below to the revised IFR).

The revised IFR says it clarifies that non-church plan sponsors who have a religious objection to the mandatory coverage of contraceptives, may now obtain a one-year deferral of the regulation’s effective date if they meet certain criteria and self-certify their objection. 

The original February 10 IFR exempted church plans from having to cover contraceptive methods, sterilization procedures, and related patient education and counseling.  But the exemption did not apply to church-sponsored colleges, universities, hospitals and other organizations operated in furtherance of the churches' religious missions.  The churches and the church-related organizations objected to the February 10 IFR almost immediately.  The Catholic Church and other churches have sued the administration arguing among other things that the regulation violates the First Amendment.  It’s my understanding those actions are still pending.

The February 10 IFR was implemented August 1^st as originally written.  The August 15 IFR states that "In reissuing this bulletin, CMS is not changing the February 10 policy."  While it is a clear abuse of words to call the reissued IFR a "compromise", the administration itself has never called it a compromise but was careful from the very first to call it an “accommodation”. Thus the sole purpose of the August 15 IFR is to add content "clarifying” that plan sponsors who have religious objections - other than churches themselves which are permanently exempted - can defer the effective date of contraceptive coverage in their plans . . . for one year.

The August 15 IFR contains the criteria for obtaining the one-year effective date deferral.  Organizations can obtain the one-year deferral by self-certifying that they meet the criteria.  Naturally, self-certification requires completion of forms, plus distribution of notices to plan members stating that contraceptive coverage will be delayed. 

The IFR as reissued August 15 is here. Additional background here and here and here and here. 

Meanwhile, some Catholic Universities have already begun to cancel their student health plans.

As Yogi Berra once said, “Its not over ‘til it’s over.” (Berra also said “I never said half the things I said.”)

Anyway, this is definitely not over.

SLIRP it up

In honor of Life Insurance Awareness Month, we'll be stepping up our postings on this valuable, but often neglected, coverage. In addition to providing valuable death benefit protection, life insurance can be a useful retirement funding vehicle. FoIB Jeff M explains:

"Using permanent life insurance contracts to supplement a qualified plan is well-established. Called SLIRP, or supplemental life insurance retirement planning, is helpful if one has maxed out on IRA's or other qualified plans.

The "key" to making this work in the manner it's designed is to over-fund a permanent life insurance policy up to the point where one extra dollar paid in premium would make the contract what's known as a Modified Endowment Contract. Typically, this means a Universal Life policy. Another key factor is that it takes about 12-15 years of this maximum funding to realize the level of cash value to ensure long term success.

And, of course, this is a life insurance policy first. Properly structured, the face amount of the policy is kept as low as possible with the maximum amount of premium paid in allowed. And this is where so many of these go awry: failing to properly fund (over-fund) will derail this plan. If/when this happens...the end result hoped for often times isn't realized.

Businesses purchase insurance of this type on their key executives to provide supplemental retirement benefits. Once again, the key for it to be successful is time and money...enough time to fund it properly and funding it to the level needed to generate the income later on. The income comes first in the form of withdrawals and then policy loans.

For business owners looking to start one of these on themselves, I always counsel my clients to make sure that they have the appropriate amount of insurance in-force before taking this additional plunge.

So, is SLIRP right for you? Best to meet with your professional insurance advisor to make sure."

Thanks, Jeff!

But a lunch break is in our contract

From the Swedish Medical Meatball© files:

"A 72-year-old man having a tumour removed from his kidney died after the chief anesthetist and nurse took a lunch break in the middle of the surgery."

Words fail.

Is this racist?

I really don't know what to make of this (from email):

"Patients’ race and disability status make a significant difference in their compliance with a life-prolonging medication regimen ... Even among individuals with nearly full drug coverage, the difference in adherence rates between racial groups remains" [link to abstract]

They're referring to post-event medication, finding that members of certain groups aren't really keen on follow-through regarding their own health, even if they can afford to.

Here's the problem:

“Physicians should be aware of these differences in adherence as they treat patients”

How?

Just reinforcing the point that one should be taking one's medicine could be construed as racist, with potentially dire consequences to follow. And whatever happened to personal responsibility?

Oh, yeah.

[Hat Tip: UPMC]

ObamaTax News

Almost a half century ago, Supreme Court Justice Potter Stewart observed that "hard-core pornography" was hard to define, but that "I know it when I see it." Now, this post isn't about pornography, but the point holds: how do you define a full-time employee?

If you answered "I'll know one when I see one," you may not be far off:

"Employers can take up to 12 months to determine whether workers are full-time employees for purposes of applying the new federal "play or pay" health benefits rules."

Which becomes an interesting game of chicken with that potential 50th employee.

Regular readers may recall that the so-called "play or pay" rule, aka Employer Mandate, requires companies with 50 or more employees to provide group health insurance. This has the net effect of reducing employment opportunities at a time of record unemployment numbers. Not to mention, what if you're employee #50? How secure are you feeling right now?

Never fear, though, because your boss can apparently take up to a year to decide whether or not you (or your replacement) are worth it.

Don'tcha just love the warm fuzzies?

Hey Grandpa, time's a-runnin' out!

This Friday (September 7th) marks the beginning of the end for so-called "Grandfathered" health plans. Regular readers know that we think it's much ado about, well, not much, but it's another sign of the increasing burden of ObamaTax. From a UHC email I just received (notice today's date):

"Grandfather Certification Forms are required for any 1-99 group policies that are in a grandfather position, and must be postmarked no later than Friday, Sept. 7, 2012."

Wow, thanks for the heads' up, guys!

ObamaCare comes up short (again)

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

So, how's that working out?

You be the judge:

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

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

Um:

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

Ooops.

[Hat Tip: FoIB Holly R]

Utopia meets Reality

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

Here's a sample:

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

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

Cavalcade of Risk #165: Vegas-Style

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

Very cool.

Don't go away mad, Bart...

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



You made it happen, Bart. Man up.

[Hat Tip: RedState]

ObamaCare's Solyndra

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

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

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

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

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

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

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

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

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

Life Insurance Awareness Month

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

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

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

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

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

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

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

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

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

Do it yourself Life Insurance

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

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

Fight the Feds, Lose City Hall

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

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

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

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

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

Cavalcade of Risk #165: Call for submissions

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

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

You'll need to provide:

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

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

Thanks!

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

Thursday NewsLinks

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

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

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

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

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

Oy, what a mess.

Digital insurance?

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

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

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

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

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

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

The Myth of the Unbiased Media

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

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

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

Myth 1: MEDICARE COSTS ARE OUT OF CONTROL

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

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

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

Myth 2: MEDICARE IS GOVERNMENT HEALTHCARE

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

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

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

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

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

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

Disability trends '12

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

Here are some examples:

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

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

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

Marmite vs MRSA

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

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

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

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

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

Pass me a biscuit, please.