ObamaTax "Gotcha!"

By now, you've probably seen the news that, much like your phone bill includes a charge to pay for others' "free" service, come 2014 your new health insurance bill will include one to pay for folks with pre-existing conditions:

"The [$63 per covered person]  charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies"

Of course, you'll never see that, because employers usually pick up all those costs.

Just kidding!

Here's my favorite quote:

"Most of that is likely to be passed on to workers."

No: all of it will be passed on to employees - employers never pay any health insurance premiums. Never have, never will.

Sheesh.

ObamaTax for Vets

No, not those vets, but veterinarians.

Now, you may be wondering what the ironically-named Patient Protection and Affordable Care Act (the ObamaTax) has to do with pet care, but it's nothing new to long-time IB readers. Almost 2 years ago, we reported on BoCare©, "to extend federal funding for vet's (as in veterinarians) in order to spend even more money (that we don't have) so that Fido can enjoy the same kind of health care that we enjoy."

Apparently, they take this pretty seriously in DC, and so now we have a new IRS rule that "some medical devices used in veterinary practices will be hit by Obamacare’s 2.3 percent device tax."

One supposes that it's fair for Fifi's leg pin be treated the same as her owner's new pacemaker, but the reality is that - of course - it ain't Fifi footin' the bill.

To be fair, that leg pin probably won't be affected, but items such as exam gloves and catheters (to name two) will be. So expect your next vet bill (not to mention your own insurance premiums) to be higher.

Why's that, you ask?

Pretty simple, really: you don't expect the vet to pick up the higher costs, do you?

Rx Recall: Atorvastatin [Updated]

The drug, a generic version of Lipitor), is being recalled by its manufacturer.

From Medical Mutual email:

"Ranbaxy... has announced a retail- or pharmacy-level recall of multiple lots of this medication ... The recall includes several lots of 10mg, 20mg and 40mg atorvastatin tablets distributed between September 25, 2012, and October 26, 2012. It does not include the 80mg tablets." [emphasis in original]

NB: As Mike points out in the comments, be sure to check your bottle's label. So far, at least, Ranbaxy is the only manufacturer involved in this.

The voluntary recall is due to the possibility that some batches may have been tainted by some foreign material (small glass particles).

If you've got some on your shelf, now'd be a good time to head back with it to the pharmacy.

UPDATE: And Bob sends along links to the latest on the matter from the FDA:

FDA Statement on the Ranbaxy Atorvastatin Recall

Questions and Answers on the Ranbaxy Atorvastatin Recall

Thanks Mike and Bob!

There's more than one "cliff"

We know the cost of insurance is driven upward by the rising cost of medical care.  In a similar way the cost of medical care is driven upward by the growing cultural apathy in America toward personal health care.

That is, more and more Americans are apathetic about taking even simple steps to protect their personal health in the first place.  Result:  a growing need for medical care, driving higher total medical cost and higher insurance cost.

And, keep in mind, health care (as opposed to medical care) is virtually free.

I fear what this means is that a demand-management strategy for America’s medical cost problem thru so-called "wellness" programs has little chance of success.

Why do I "fear" this is true?

Because this cultural apathy toward personal health care plays right into the worst command-and-control instincts of government.

Medical spending – Medicare, Medicaid, VHA, TRICare, etc - is the largest single slice of the national budget. Medical spending is also the largest deficit driver – Obama himself said 3 years ago “nothing else comes close”.

It seems to me that our government even now sees no alternative to hard-rationing controls. Is it so surprising that ObamaCare creates significant new machinery necessary to impose such a system? Or that the regs issued so far create even more such machinery?

In a way, I feel the country is like Wile E. Coyote. We’ve run headlong off a cliff chasing something we don't know how to catch.  Now we are temporarily hanging suspended in  mid-air; after a brief cartoon moment we face the inevitable crash to the desert floor.

Kasich and the ObamaTax

[Original post updated and revised]

Contrary to some reports, the newly enacted House Bill 613 is not an attempt by the Ohio GOP to "[enable] socialized medicine."

In fact, it's designed to put strict limits on how "Navigators" in the new Ohio Exchange can operate, and requires them to adhere to the same regulatory and licensing guidelines as real agents, including obtaining Errors and Omissions coverage and completing Continuing Education requirements.

In fact, you can read the actual text of the bill here.

As FoIB Patrick Paule points out, the bill "also underscores the important role that ODI will play in the process.

I don't want navigators (who aren't licensed and have no E & O) to have free reign to do whatever they want in Ohio."

Excellent points!

I'll try to connect with the bill's sponsor, Barbara Sears, for her thoughts on how this will likely play out.

[Special IB Thank You! to reader Patrick Paule]

Is Life Insurance going over the (Fiscal) Cliff? [UPDATED]

Maybe:

"The potential elimination of many tax preferences currently afforded life insurance is one facet of today’s fiscal cliff discussions ... proposals include provisions that could result in the imposition of taxes and elimination of deductions for both individual and corporate-owned life insurance policies"

More ominously, the two primary tax benefits of life insurance - tax-advantaged build-up of cash values and tax-free death claims - are also under fire. This makes sense: why should responsible people gain an advantage over those who plan to fail fail to plan?

Gee, I'm just full of good news today, aren't I?

ADDENDUM: Jeff Root has an interesting post about life insurance and buy-sell arrangements, how they're used and how they work. It occurs to me that taxing the death death benefit in those situations could create a triple-whammy: the premiums aren't deductible, the death benefit would be taxable, and there may well be taxes on the transaction (sale of the business interest) as well.

Ouch!

Cavalcade of Risk #172: Call for submissions

Rebecca Shafer next week's Cavalcade of Risk - Entries are due by Monday (the 10th).

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). And please only submit if you are willing to link back to the carnival if your submission is accepted.

We've started scheduling 2013 Cav's, and need hosts for March and April. Just click here to grab yours!

Thanks!

Why HSA's are ObamaDoomed

Had an interesting discussion yesterday with a North Carolinian colleague. He asked me to share my thoughts on the future of Health Savings Account (HSA) high deductible plans, and it occurred to me that I should probably also share these thoughts with the wider IB audience.

It goes something like this:

Back when HIPAA (remember HIPAA? aka Kennedy-Kassebaum?) was first passed, the focus was almost exclusively on its impact on health insurance. But buried deep within, there was a little provision that would have a great impact on another line of business: long term care insurance.

Nutshell: Pre-HIPAA, long term care insurance (LTCi) benefits were received tax-free. These plans were non-standardized, but had to be approved for sale by state insurance departments.

HIPAA standardized language and benefits, and conferred tax-free benefits status only (and specifically) on plans that met the criteria (ie were standardized). The problem was that it didn't specifically state that non-standardized ("compliant") plans' benefits were tax-free (or taxable).

Carriers decided that it wasn't worth the headache to offer both compliant and non-compliant-plans (guess which ones they chose to market).

The same thing will happen with HDHP's (High Deductible Health Plans). Under the ObamaTax Exchange rules, all plans are standardized ("Platinum, Gold," etc). There's nothing that prohibits carriers from offering non-compliant plans outside the Exchanges, but why would they?

Hence, HSA-compliant plans go by-bye.

Which brings up several interesting questions:

First, what happens to the HSA funds you've already accumulated? No one really knows, but my best-guesstimate is that they'll freeze (no more funds may be contributed), but you'll still be able to withdraw them for eligible expenses (or roll them into an IRA). YMMV.

But what will happen to in-force HDHP's? Or, for that matter, any existing health plan? So-called "grandfathered" plans will be exempted, but the reality is that very few of these will exist come 2014 (and they'll all be gone a year or so later). Carriers will not offer any but "compliant" plans at all (inside or outside the Exchanges). The administrative and accounting burdens would be too great (see: non-HIPAA compliant LTCi plans above). My educated guess is that we'll see this:

Mid to late 2013, all non-compliant plans will be withdrawn from the market.

Beginning with 2014 renewals, insureds (group and individual) will be offered the choice of keeping their non-grandfathered plans for another year (and be subject to the whopping $95 ObamaTax) or be "mapped" (re-written) to a comparable compliant plan with no underwriting (or a richer, underwritten compliant plan).

In 2015, all non-complaint plans will be mapped (transitioned) to comparable compliant plans.

Since HSA's are, by definition, non-compliant (their out-of-pocket maximums exceed those allowable under the ObamaTax), they'll be gone by 2015, latest.

What was that?

"If you like your current health insurance plan, you can keep you're current health insurance plan?"

What moron told you that?

Health Wonk Review: Festival of Lights edition

Contrary to popular belief, the Jewish Festival of Chanukah has nothing to do with a can of oil that lasted 8 days (it didn't). It is at once an inspiring and a dark story, about both liberation and intolerance. As with almost all things Jewish, the sweetness is tempered with bitter reality.

On the other hand, the celebration of the holiday (which begins this Saturday evening) is pretty cool: fried potato pancakes (latkes), spinning the dreidl and lighting candles each night serves as a fun and meaningful way of acknowledging our rich heritage.

So for this edition of the venerable Health Wonk Review, I'm going to light up the posts with pictures of some of our favorite Chanukah accoutrements as well as some of the more off-beat ways the holiday is celebrated around the world.

But first:

My mother once gave me two sweaters for Chanukah. The next time we visited, I made sure to wear one. As we entered her home, instead of the expected smile, she said, "What's the matter? You didn't like the other one?"

Bet you'll like these great posts.

■ Our very first entry comes from Adam Fein, who sends in this wonderfully wonky post about new CMS rules on how prescription drugs are to be covered under the PPACA's [ed: known around these parts as the ObamaTax] Essential Health Benefits mandate. Thorough, yes. Dry, nope.

■ Forbes' Avik Roy draws a line in the sand, arguing that opposing ObamaCare doesn't go far enough, arguing that Republicans need to be offering their own, more conservative set of solutions.

[Our family's secret latke recipe...]

■ Dr Jaan Siderov offers both an interesting blog post and "aliquots of Aquavit" (the latter guaranteed to "knock the unwary on their behinds").

The former, though, may have a similar effect, as he reviews an evidence-based article from the Journal of the American Medical Association (JAMA) that shows that a state-of-the-art electronic health record (“EHR”) was associated with a significant increase in utilization. Now that's a bitter brew!.

■ Soaring in on the Wing of Zock, Dr Drew Lee (a Fellow at the  American Medical Student Association) examines a proposed $10 million cut in funding for graduate medical education.

Speaking from his own experience, he's concerned that this will lead to major problems in health care, including deterring would-be physicians from considering the critical (but often low-paying) field of primary care.

[The dreidl - a spinning toy - includes the Hebrew acronym for "A Great Miracle Happened There" (left). In Israel, the final letter changes the wording to "A Great Miracle Happened Here"]

Perspectives

FoIB Jeff M sends us this tidbit:

"North Carolinians projected for enrollment in a health-insurance exchange in 2014 could have the nation’s lowest level of covered pharmaceutical drugs"

The article goes on to (unfavorably) compare the Tar Heel State's prescription med requirements to those of Virginia and West Virginia.

It's a pretty transparent ploy, but it completely misses the point, so let's correct that lede:

"North Carolinians projected for enrollment in a health-insurance exchange in 2014 could have the nation’s lowest premiums."

There, that's better.

Told Ya So: Primary Care edition

We've been beating this particular drum for a while (most recently, here): fewer and fewer folks are interested in becoming part of the primary care provider world. After all, after spending years (and precious dollars) in medical school, why would you opt for the bottom rung of the health care income ladder?

Makes no sense.

In a heartening development, it appears that medical school students are figuring that out, too:

"More than three-quarters of U.S. medical students continue to shun primary care for higher-paying specialties, setting the stage for a shortage of doctors as the population ages and health care expands"

And I would submit that that's a low-ball guesstimate, since the ObamaTax creates more demand and lower reimbursement rates. If one is bright enough to get into medical school, one is probably bright enough to read the writing on that particular wall.

Sleep tight.

MVNHS©: "We don't play favorites"

That is, doesn't matter if you're a factory worker or an elected government official, your life (or that of your loved one) really doesn't count for much in Jolly Old:

"Ann Clwyd broke down as she spoke about the final moments of Owen Roberts, who contracted pneumonia after being admitted [to a hospital]. They had been married nearly 50 years."

But these things happen, right?

I mean, there's no evidence that the "caregivers" of the Much Vaunted National Health Service© mistreat or abuse their wards, right?

Um:

"[H]er husband was squashed against the side of his bed, his lips dry, and cold from a fan that had been turned on for a patient in an adjacent bay."

The Goddess of Irony does her best Cheshire Cat here:

"Ms Clwyd, the Labour MP for Cynon Valley since 1984 and Tony Blair’s former human rights envoy to Iraq" [emphasis added]

Through the looking glass, indeed.

But hey, don't just take my word for it:

ObamaTax cuts the Cheese(cake Factory)

Ah, the wonderful world of the ObamaTax:

"Cheesecake Factory CEO David Overton spotlighted the looming economic impact of [the ObamaTax] implementation, especially on small enterprises: "For those businesses that don't cover their employees, they'll be in for a very expensive situation." Overton also warned that the cost of the law would be passed on to customers."

No kidding.

Bon appetit!

LinkFest Tuesday

■ FoIB Michael Cannon reports that support for "universal coverage" is way down; in fact, he says, the majority of Americans now oppose it:

■ Seth Menacker tips us to this Wall Street Journal item on the intersection of plastic surgery, health insurance, and the holidays:

"After many cosmetic procedures patients want to go underground during the days-long recovery period, which might involve swelling, bruising and oozing ... This year, with Christmas and New Year's both falling on weekends, a patient can be under the knife or laser beams early in the week and still be presentable by the time the parties start."

Dr Adam Schaffner, a noted New York plastic surgeon, says that he's long noted "a dramatic increase in demand for procedures around the holidays. This could be due to the extra down time, or perhaps people meeting their annual insurance deductible.”

■ And because DC wouldn't be DC without spewing forth hundreds of pages of regulations every day, we have crap results like this:

"The Centers for Medicare & Medicaid Services (CMS) has proposed 373 pages of regulations that could affect how health plans fund and draw from new, multi-billion-dollar risk-management programs."

These kinds of regs, which are all a result of the ObamaTax, are a big reason why businesses are reluctant to grow and to hire: after all, they never know from day to day what new burdens they'll be forced to shoulder.

■ And speaking of which, the ObamaTax is taking a major toll on those it was ostensibly meant to help the most:

"About 100 servers, line cooks and dishwashers working at the Charleston Crab House don’t have health insurance ... they will either receive coverage or face financial penalties."

Because no one really knows for sure how all of the mandates and fines penalties taxes will ultimately play out, businesses have no way to know what they should (or should not) be doing. All they really know is that costs are going up and revenues going down.

Countdown to Exchange

The gauntlet has been thrown:

"Gary Cohen, director of the Center for Consumer Information and Insurance Oversight (CCIIO), told a panel of state insurance regulators that the U.S. Department of Health and Human Services (HHS) "will be able to open our doors" on Oct. 1, 2013."

Color me skeptical.

But hey, he's from the government, and DC folks never lie, so we'll take him at his word. Because we're so impressed with the job that Mme Shecantbeserious has done thus far, we've added a new feature in the sidebar: a Countdown to Coverage Clock.

We await with bated breath.

Health Wonk Review Comin' Up - Another Nudge

We'll be hosting this week's Health Wonk Review, and (as usual) the emphasis will be on "health policy, funding, insurance, managed care, infrastructure, IT, the uninsured, economics and trends."

You can submit your wonky post here, and be sure to include:

■ Your name
■ Your blog's name
■ Your post's link
■ A brief summary of the post

Submissions are due by this Wednesday (the 5th),  but early birds get better seats at the table (hmmm, bit of a mixed metaphor, that). And speaking of seats at the table, make sure to bring some apple sauce and sour cream (and maybe some peanut M&M's).

And matches. Definitely matches. Or a lighter.

Avik's Apothecary

FoIB Avik Roy's Weekly Digest is a must read for serious health care policy wonks. His insights and analysis are at once easily understood and remarkably thorough. Here's this week's edition - and we recommend signing up for his email distro list so you don't miss out.

Tiers in my eyes

No, that's not a typo, but the latest strategy by Big Insurance to find creative ways to rein in costs, of both health care and health insurance It's actually a pretty cool idea.

FoIB Jeff M recently attended a Lunch-And-Learn put on by Blue Cross/Shield of North Carolina (pizza, natch). The purpose was to roll-out the next generation of group insurance products, and some of the new strategies being built into them in anticipation of the full implementation of the ObamaTax in a little over a year.

BX introduced two new plans for 2013: "Blue Value" for groups of 1-50 1-48 (what rational employer wants to butt up against the mandate?) and "Blue Select" for groups of 51 and up.

They share a common goal: to reduce rates by anywhere from 2-12 percent over existing plans.

And how, exactly, do they intend to accomplish this?

Common sense. That is, under the ObamaTax, there's a practical limit of how much you can tweak the internal plan design. Ratings structures will be closely monitored by Mmme Secretary Shecantbeserious, and the Medical Loss Ratios will continue to exert downward (or is that upward?) pressure. Carriers have already "adjusted" how prescription drugs are covered, what with separate deductibles, tiered co-pays and cost-sharing, formulary changes, and the like. There's not a lot of wiggle room left on those.

But the concept of "tiers" doesn't have to apply only to meds. What if you could unbundle your provider network, and steer your insureds to cheaper/more efficient docs and hospitals? Might not that improve the bottom line? Of course it would, but how to get that to happen?

Well, you bake it into the cake policy.

Take a look at the different plan designs (generously provided by Jeff M and available here). The change is clearest with the Blue Select plans, where there's a 20% out-of-pocket differential between Tier 1 and Tier 2 providers. That's a heck of an incentive to go online to confirm that your doc (or hospital) is in the "right" Tier.

It has an additional effect, as well: when you reward something, you get more of it. By incenting insureds to patronize Tier 1 providers, BX is rewarding both the consumer (who pays less) and the provider (who, presumably, enjoys a bump in patient count). And Tier 2 providers will get this message, one way or the other.

Very interesting - Thanks, Jeff!

From the P&C Files: Marathon Insurance

No, not that Marathon, this one:

"The New York Roadrunners Club and its insurers have been waging a pitched battle the past four weeks over how much money race organizers will be able to reclaim in the wake of last month's canceled New York City Marathon."

When Mayor Bloomberg cancelled the annual event (in the wake of Hurricane Sandy), it seemed like the right thing to do. After all, tens (if not hundreds) of thousands of area residents were still without power, and relief efforts were (at best) haphazard. Add in the fact that area hotels were at capacity with displaced storm survivors, and there seemed no reasonable way to actually hold the run.

Now, in addition to all the other financial headaches, there's the matter of the non-refundable entry fees prospective participants had to pony up for a chance at glory, and the millions more would-be spectators had plunked down for tickets.

Hard to believe but we first covered the concept of "Special Event" insurance over 6 years ago:

"Special Event insurance is just that: coverage to protect one from a sudden loss during some unusual activity or promotion. Think "$1 million Hole In One Contest."

Well, the New York City marathon is indeed a "special event," and had (propitiously) obtained coverage through a Lloyd's of London syndicate. Of course, these things are never as simple as they might at first appear:

"A person familiar with the Lloyd's deliberations said the company already has authorized a "large payment," a sign that it has acknowledged liability, even though the running club actually decided on its own to cancel the race. The person said Lloyd's is still working with NYRR officials regarding the size of the payment, and a significant disagreement remains."

Of course, of course.

The "disagreement" stems from the fact that the event organizers don't "have enough money to refund all the investments made in the race by runners, sponsors, broadcasters and the travel partners who arranged trips for foreign participants."

On the other hand, "the marathon has a clear no-refund policy, even if severe weather forces organizers to cancel the race." So it's unclear (at least to me) why there's a problem: doesn't "no" mean "no?"

Beats me.

Nurse: 50cc's Johny Walker, Stat!

Gotta love the Kiwi's:

"The 65-year-old Taranaki man suddenly went blind when vodka he had been drinking reacted with his diabetes medication. He regained his sight only after hospital staff administered expensive whisky."

Seems that the gentleman, a catering tutor, was celebrating his parents' 50th wedding anniversary (yeah, I didn't get the math there, either) with hooch his students had gifted him. When he found himself unable to see, he made haste to the nearest hospital. As surgeons cut him open, they got a string whiff of "nail polish remover" and believed they'd found formaldehyde poisoning. The standard treatment is to administer ethanol, which tends to counteract the methanol (a component of formaldehyde):

"Auckland City Hospital intensive care medicine specialist Tony Smith said administering ethanol was a well-established treatment for methanol poisoning.

It worked because the ethanol competed with the methanol and prevented it from being metabolised into harmful formaldehyde, which can cause blindness."

So what was this magic potion?

"Johnnie Walker Black Label. It was good whisky, yeah."

L'chaim!

Don't Ask, Don't Tell: MVNHS©-style

So, what do (sickly) grandparents and their (sickly) grandchildren have in common?

They both get to travel the Liverpool Pathway, and at least half of them aren't even asked about it:

"Almost half of dying patients placed on the controversial Liverpool Care Pathway are never told that life-saving treatment has been withdrawn ... around 57,000 patients a year are dying in [MVNHS©] hospitals without being told that efforts to keep them alive have been stopped."

Well, why should they be?

After all, it's not their money being spent on care. And, of course, there's the remote chance that they (or their parents) might raise nasty, totally unnecessary objections. Of course, this is entirely logical: what sense would there be in disclosing the distasteful fact that while health "care" is free, there's a finite supply of it, and that supply is much more efficiently spent on folks who have some hope of survival, right?

Now, if this sounds familiar, it should: the ObamaTax's IPAB's Death Panels are right around the corner to enforce this course of (non-)treatment on us.

Pleasant dreams!

Health Wonk Review Comin' Up

We'll be hosting next week's Health Wonk Review, and (as usual) the emphasis will be on "health policy, funding, insurance, managed care, infrastructure, IT, the uninsured, economics and trends."

You can submit your wonky post here, and be sure to include:

■ Your name
■ Your blog's name
■ Your post's link
■ A brief summary of the post

Submissions are due by next Wednesday (the 5th),  but early birds get better seats at the table (hmmm, bit of a mixed metaphor, that). And speaking of seats at the table, make sure to bring some apple sauce and sour cream (and maybe some peanut M&M's).

And matches. Definitely matches. Or a lighter.

Babies and Gramps: On the road to Death

Well at least they're consistent: The Much Vaunted National Health System© seems hell-bent on applying the same (dubious) health care standards on helpless infants as vulnerable seniors:

"Sick children are being discharged from [MVNHS©] hospitals to die at home or in hospices on controversial ‘death pathways'"

What they're talking about there is the Liverpool Pathway, about which we've written pretty extensively in recent weeks (for example: here and here). Typically, the LP had been used to dispose of decrease treatment for the elderly, since the MVNHS© had already been doing a bang-up job killing off post-birth-aborting children.

One can see their point, of course: much more efficient to combine the two programmes, and the Pathway has already proven quite helpful in reducing health care expenditures (well, health care, anyway) for seniors. We'd best be paying attention to this ourselves, since the ObamaTax is our version of that vaunted system.

Sweet dreams.

PHI and Speed Bumps

Yesterday, Bob posted on the increasingly intrusive role data and its management play in modern health care. But it goes beyond physicians typing in notes on their iPads:

"The small box inside Amanda Hubbard's chest beams all kinds of data about her faulty heart to the company that makes her defibrillator implant."

That data gets shot to her cardiologist, but is essentially inaccessible to Ms Hubbard.

Wait a minute, Henry, haven't we seen this show before?

Indeed we have:

"Hugo Campos has [an ICD] buried in his chest to help keep him alive. But he has no idea what it says about his faulty heart."

All the pertinent data is collected and then sent back to the manufacturer, which then shares some of it with Hugo's doc."

So why the re-run?

Well:

"Medtronic [the device's maufacturer] says federal rules prohibit giving Ms. Hubbard's data to anyone but her doctor and hospital."

But it apparently doesn't prohibit Medtronic from seeking to make a buck off that data. The so-called "money quote," though, is this:

"[B]usiness agreements with doctors and hospitals restrict [Medtronic] to relaying information only to them."

This is reminiscent of the discounted rates insureds pay for in-network covered services, but which are excluded for those that fall outside the plan. That is, these agreements are quite lucrative for the providers (be they hospitals, device manufacturers or doctors), but not so much for the actual patient.

One argument will be that laypeople have no real use for the data because it's incomprehensible to them anyway; we already know from Mr Campos' experience that this isn't necessarily true.

A second argument would be that the law prohibits manufacturers from disclosing that data. Actually, my layperson's read is that since it falls outside the rubric of HIPAA (and/or the ObamaTax), manufacturer's aren't required to disclose it. Not quite the same thing.

So we'll ask again: Who (really) owns the data?

On Death Files, Competence and Confidence

As we noted last Spring, the Social Security Administration's Death Master File (DMF) "is itself rife with potential errors and misinformation." We reported this as part of our report on how life insurers are having an increasingly difficult time tracking down insureds and beneficiaries.

But there's another problem with that DMF, as well.

And this one's not so much about incorrect information as it is missing information.

One of my (very long term) clients lost her daughter 28 years ago, victim of a murder-suicide. Both her daughter and son-in-law have been gone almost 3 decades, but that didn't stop the government from reaching out to the long-dead perpetrator to remind him that he's now eligible for both Social Security and Medicare benefits.

But Henry, you may be asking, why are you even posting this?

Because it's just one more example (as if any were really needed) of how incompetent the Feds are at even the simplest of tasks, and these are the folks now in charge of our health care. In this case, it's simply a minor waste of postage, but what happens when it's your upcoming surgery?

Sleep well.

MVNHS©: Cruel and Unusual

When bureauweenies run your "health care" system, this really shouldn't come as a surprise:

"Patients experience “coldness, resentment, indifference" and "even contempt” in some hospitals, the Health Secretary has claimed"

And why not? They're not paying the bills.

And so you get, well, government-run health care:

"[P]atients left to lie in their own excrement in Stafford Hospital, with members of the public taking soiled sheets home to wash ... The man with dementia who was supposed to be monitored every 15 minutes who managed to leave Pontypool Hospital and drown ... residents kicked punched, humiliated, dragged by their hair and forced through cold showers"

And the list goes on...

At the risk of stealing his thunder, Mike's been working on a post detailing a rather interesting and provocative theory of how and why this is the natural result of state-run health care systems (like, for example, the ObamaTax). Suffice it to say, there really is a perfectly good reason why this sort of behavior is becoming "the new normal."

And the fact that the Brits' version of Mme Shecantbeserious is just now lashing out only serves to underscore how putting government agencies between ourselves and health care providers never ends well.

LTCi Gets More Expensive

Kinda wondered when the carriers would get around to this:

"Until now, insurers have charged the same premiums regardless of gender for [Long Term Care insurance] policies ... beginning early next year, Genworth Financial, the country's largest long-term-care insurer, plans to start charging women applying for coverage as much as 40% more than men."

This actually makes sense: women tend to live longer than men, so have an increased chance of needing some kind of assistance. As a result, two thirds of LTCi claims dollars go to the fairer sex. Add in carriers' measly investment income in these low-interest rate times, and there's a recipe for some major problems.

And don't be surprised to see underwriting tighten up, as well, as carriers are starting to better understand long-term trends.

And there's this: just because Genworth's going first doesn't mean that the other carriers won't follow their lead, so look for plan prices to begin jumping pretty soon.

Ouch.

Cracks in the MVNHS©?

Hmm, this sounds familiar:

"The [MVNHS©] can’t go on like this. Patients today – baby boomers, especially – bother the doctor with minor complaints ... and have unrealistic expectations of what the health service can provide. The system is at breaking point ... We are going to have to start paying for some medical services at the point of delivery."

Heh.

So the Much Vaunted National Health System© has been no more successful at reining in costs with "free" health care than our own "dysfunctional" system?

Who'da thunk it?

Oh, yeah.

This diagnosis, by the way, comes from physician (and Tory MP) Phillip Lee, who adds that the system "probably can limp on for the rest of this decade ... but the reality is the pressures coming from the baby boomer generation and their expectations of health care, their perceptions of pain and suffering is profoundly different [than] their stoic parents who survived the war.”

In other words: suck it up, buttercup.

Or it's hit the Pathway for you.

Cavalcade of Risk #171: Up and running

Emily Holbrook hosts this week's episode featuring the best of risk-related posts from around the 'sphere. It's short, sweet and packs a punch (and a mighty hammer, too).

Yeah, about that promise...

You know the one:

"If you like your health insurance you can keep your health insurance."

That sound you hear? It's that promise going under the proverbial bus.

From Medical Mutual of Ohio (email):

"As part of the renewal process for our individual health plans ... we will introduce several key changes starting with January 2013 renewals.

... the Internal Revenue Service (IRS) changed the 2013 key amounts for health savings accounts (HSAs) and HSA-qualified high-deductible health plans.

Due to the revised guidelines, we can no longer offer Wellness HSA 1200 plans to our SuperMed One and Ohio Farm Bureau members. As a result, we will transfer all members enrolled in these plans at their renewal.

SuperMed One members will move to the Wellness HSA 1500 and Ohio Farm Bureau members will move to the Wellness HSA 1750. These members will see an increase in their deductible"

Ch-ch-changes, indeed.

Off the Beaten Path(way)

As we noted late last month, MVNHS© "trusts" (hospitals) that participate in the British Death Panel Liverpool Care Pathway have been handsomely rewarded for their efforts. This makes sense: by scrimping on care they save the system cold hard cash, thereby earning their (not so) little finder's fees.

But all that may be coming to an end:

"Ministers ... ordered an independent inquiry into why hospitals have been paid to hit targets for numbers of patients dying on the Liverpool Care Pathway."

I'm sure this will be welcome news for those currently on the path; for those whose lives bought Angus steak dinners for the bureauweenies, not so much.

I did find this little tidbit darkly humorous:

"Mr Lamb said the inquiry would ‘consider the value of locally set incentives, and whether they are leading to bad decisions or practice’"

Well, that really depends on whether one believes killing off patients is a bug or a feature, doesn't it?

ObamaTax Job Killer

As we've previously noted (most recently here), the ObamaTax is quite the efficient job killer.

Orlando Health (FL) is a large hospital system employing some 16,000 folks.

Strike that.

Orlando Health (FL) is a large hospital system which used to employ 16,000 folks, but which has just downsized 400 of them in anticipation of changes being wrought by the ObamaTax.

Meanwhile, the Community College of Allegheny County (PA) is drastically reducing the hours of 400 employees of its own. These adjunct professors will be re-classified as part-time to avoid the ObamaTax Employer Mandate. But of course they'll be able to find quality, affordable coverage of their own through the Exchange.

Eventually.

Right?

And speaking of killing the goose that lays the golden eggs jobs, here's an ObamaTax "benefit" that's been flying under the radar:

"Section 4205, the menu labeling provision .... meant to “aid consumers in selecting more healthful diets” ... the regulation will likely have job-killing effects and result in little, if any, significant reductions in obesity rates and/or improved health."

The problem is that, as benign as the idea might appear, it is just one more unfunded (by gummint) mandate that will drive up the cost of doing (food) business, with no discernible positive effects, but with the very real consequence that employers will have to pay for implementation at the cost of their employees' jobs.

Ooopsies.

A Belated Thank You

I inadvertently let Thanksgiving come and go without acknowledging the invaluable contributions made by my fantastic co-bloggers.

I'd like to remedy that:

Thank you Bob, Mike, Nate, Kelley and Bill for all of your great posts, insightful advice and unstinting help here at IB.

There's no better team in the blogosphere.

"Free" keeps getting more expensive

Dr Peter Weiss, Director and Founder of The Rodeo Drive Women's Health Center, is finally catching on to at least one ObamaTax gotcha, the "free" annual exam. As Bob noted last summer, "if you don't follow the rules, your free annual exam could cost you $500 - $1000 or more."

Fast forward a few months, and Dr Weiss reports some changes reflecting this reality at his practice:

"I have now posted a notice in my office and each exam room stating exactly what Obamacare will cover for those yearly visits. Remember Obama promised this as a free exam — no co-pay, no deductible, no charge. That’s fine and dandy if you are healthy and have no complaints."

Aye, thar's the rub: as long as you're fit-as-a-fiddle in the first place (and/or if you had previously treated and now stable conditions) then you're likely to get out of the examining room with wallet intact. But woe to the patient who also has new issues:

"[Y]ou will not be covered if you want to discuss any new ailment or unstable condition. I cannot bait and switch to another code — that’s illegal."

In other words, if you're in for your routine exam, make sure not to ask the doctor about your stiff neck or new-found acid reflux. You'll need another appointment for that, one in which your deductible or co-pay will apply.

But hey, it's free, right?

BONUS: Dr Weiss also takes his scalpel to the canard of "the rich doctor" (gee, where have we heard that term before?):

"[D]octors are not rich and, like most of you, actually work terribly hard for a living. Second, Obamacare is the law — and as I said earlier, we are audited all the time now."

And this is only going to get worse: as we've noted, there's already a shortage of providers, and Dr Weiss thinks we're seeing just the beginning of of that trend:

"By 2014, less than 25% of physicians will be in private medicine. Obama was right in stating you can keep your doctor if you want to — the problem is he or she will rarely be available."

Three cheers for the ObamaTax, no?

ObamaTax Rule Dump: More Questions Than Answers

As Bob noted the other day, we're still awaiting final rules on full implementation of the ObamaTax. But that's about to change.

Today, HHS Secretary Shecantbeserious is set to "pump three major [ObamaTax] regulation proposals into the Federal Register." These include new rate review rules (say that 3 times fast!), the new group wellness program rules, and new provider accreditation rules.

Of course, the phrase "clear as mud" comes to mind, but I'm sure that there'll be no problem implementing all of these rules, and that providers and insurers will be delighted to comply with them. After all, it's only taken almost 4 years to develop them.

Meanwhile, some parts of the ObamaTax have already been rolled out, and their effects are starting to take their own toll. For example, the 2.3% medical device tax:

"This damaging tax will force job cuts and investments in tomorrow's treatments and cures ... Continued medical innovation is key to driving public health gains by reducing costs associated with chronic diseases like diabetes and obesity ... Simply put healthier lives mean healthy economies."

That last bit is a sketchy (I've never seen that particular claim before, nor evidence of its veracity) but the rest is spot on. Throwing up additional barriers (ie taxes) like this discourages new tech, while making the delivery of health care ever more expensive.

But then again again, that's apparently where the IPAB Death Panels come in.

How pointless will CER be...

...and how long till we realize it was nothing but a slush fund for Obama like his green jobs money?


"The routine use of mammograms has led to more than 1 million women being unnecessarily treated for breast cancer over the past three decades, according to the latest scientific report to cast skepticism on the effectiveness of the test."

"Even before those findings, in November 2009, a key federal panel revised its guidelines on mammograms to say that women should begin regular screenings at age 50 rather than age 40, and then get the exam every other year rather than annually."

"In 2010, lawmakers tweaked a mandate in the health-care law requiring insurers to cover preventive services recommended by the task force free of charge. The law specifies that when it comes to mammograms, insurers must follow the task force’s old guidelines"

Why spend the money if we are just going to ignore the results? 

Do premiums matter under PPACA?

As a small claims payor I am always keeping my eyes open for experienced claim processors by searching resume boards. The last few months I have seen a large number of adjusters that used to work for Anthem. Normally you don't see adjusters leaving the large carriers as they pay great and have better benefits and retirement opportunities. Seeing a couple let alone a dozen is rare. In speaking with a few of them I was told they outsourced their claims processing to the Philippines and India. This got me wondering what this foretells of the future.

If you're a carrier and you're locked into 15% of revenue, do you spend that money on claims adjusters to control your claims cost, and thus reduce your revenue...

...or do you auto-adjudicate as many claims as you can, 70-80%+, then outsource the remaining claims to some low cost foreign country?  They won't do as good of a job (meaning they will pay more in claims then they should) but that actually increases their revenue, a perverse reward for a job poorly done.

This has been the Medicare model for decades and resulted in the most inefficient and fraud ridden program in the country. But if no one is directly paying the bill who cares? Medicare beneficiaries pay a minute fraction of the actual cost of their benefits so they don't care if 10%+ is lost to fraud. If the majority of the exchange members are going to be subsidized they won't mind either. The only people that would care are workers actually paying federal taxes, a minority when it comes to voting.

From the anecdotal evidence I have seen so far, it appears private insurance is adopting the worst qualities of Medicare already, before the exchanges even start.

For claim processors, 60% of expenses going to salaries is normal; if you drastically reduce that the business goes from low margin commodity to very profitable very quickly.

This Sceptered Isle - Part CCXXIV

"A new system of “virtual clinics” is being planned in which GPs connect with patients via iPads and Skype, an idea that NHS bosses are importing from India.  The reforms would save £2.9billion “almost immediately” and improve the lives of most patients, for example by avoiding the need to find child care during appointments, Health Minister Dr Dan Poulter said last week."

Notice the best NHS can say about this "reform" is that this will improve Brits' lives by "avoiding the need to find child care during appointments"?  Really? That's it??

But don't forget - NHS will save £2.9billion ($4.65 billion)  “almost immediately”.  We must assume those savings will also improve the lives of most patients almost immediately even though the article does not say how. 

Anyhow my guess is, if you're not British, and not a patient, you won't much care.  This kind of thing could never happen here. Government doesn't have that much control over the U.S. medical care system.  Right?

Cavalcade of Risk #171: Call for submissions

Emily Holbrook next week's Cavalcade of Risk - Entries are due by Monday (the 26th).

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). And please only submit if you are willing to link back to the carnival if your submission is accepted.

Thanks!

Remembering the First Thanksgiving

One of the earliest and arguably most historically significant North American colonies was Plymouth Plantation, founded in 1620 in what is now known as Plymouth, Massachusetts.

The original Plymouth Plantation had written into its charter a system of communal property and labor.

illiam Bradford recorded in his Of Plymouth Plantation, that a people who had formerly been known for their virtue and hard work became lazy and unproductive. Resources were squandered, vegetables were allowed to rot on the ground and mass starvation was the result. And where there is starvation, there is plague.

Plague. Lest we forget: there was, and remains to this Thanksgiving Day, an unbreakable connection between economic productivity and public health. The Plymouth Colonists' very survival was threatened (and they had neither NHS nor ObamaCare).

After 2 1/2 years, the leaders of the Plymouth colony decided to abandon their socialist charter and create a different system - one which honored private property.

Under their new system, the colony not only survived but thrived, and the abundance which resulted was celebrated at the iconic First Thanksgiving feast.

More here.

May everyone enjoy a peaceful Thanksgiving Day with our families and loved ones - and may we also not forget where the bounty of our great country actually comes from.

Winning Carrier Trick

Bob's written before about P.A.R.E. claims (Pathology, Anesthesiology, Radiology, Emergency), wherein certain providers choose not to participate in networks, and thus are free to charge pretty much what the market will bear. While there's not much one can do about that, one can at least reasonably expect such providers to follow the rules that are in place.

Like not double-billing for the same procedure:

"Blue Cross and Blue Shield of North Carolina ... argued that radiology practices were charging double for services provided only once and wanted the opportunity to cut reimbursements. It estimated that some $16 million was improperly charged annually because of this billing method."

That's not exactly pocket change.

As one might expect, the radiologists cried foul, arguing that this was tantamount to a contract re-negotiation without, you know, negotiation. BX countered that they were simply looking to "protect consumers and our customers from unreasonable charges."

In the end, the Tar Heel State's Department of Insurance sided with the BX folks; the losers doc's retain the right to appeal the decision in court.

[Hat Tip: FoIB Jeff M]

Die, Baby, Die (MVNHS© Edition)!

Turns out, it's not just our Neighbors to the North whose health care "system" has no real use for the weakest among us. Across the pond, the Brits' Much Vaunted National Health System© has its eye on the prize, as well:

"A mother has described how her baby was left to die 'like an abandoned animal' after hospital doctors repeatedly ignored her desperate pleas for help."

Hayley Fullerton, barely a year old, had survived a major heart procedure, but experienced complications that left her struggling to breathe. Her mother tried, desperately but unsuccessfully, to get those compassionate government health care "providers" to even look at the little girl.

Of course, they couldn't be bothered.

Nearly 3 years later, an official inquest concluded that "there had been 'serious failings' in Hayley's care."

Um, dunh?

Oh, but there's a bright side:

"Birmingham Children's Hospital admitted full liability for her 'avoidable' death."

See, everything's doddle!

[Hat Tip: Power Line]

MedTourism close to home

One of the issues we've had with the Not So Vaunted Health System© is that health care is becoming more scarce. As providers scramble for a way to stay in business, the cash-only model of health care delivery seems to be growing in popularity.

On the other side of the ledger, employers looking for ways to rein in health care costs are thinking outside the box, as well:

"This year, grocery giant Kroger Co. has flown nearly two dozen workers to Hoag Orthopedic Institute in Irvine and several other hospitals across the U.S. for hip, knee or spinal-fusion surgeries in an effort to save money and improve care."

As Bob reported last week, Wal-Mart is offering its employees free heart and spine surgery at a half dozen health centers of its own.

A major challenge is, as we've so long lamented, the lack of consistency and transparency in the cost of health care. Compounding the problem is the fact that there are separate fees for each service, so that a patient receives a bill from the hospital, the surgeon, the anesthetist, and so on. So-called "global billing" hasn't really happened, so employers are taking a cue from the cable and phone companies, putting together "bundles" that can help hold costs down and make price negotiations more meaningful.

As Rand Corporation's senior policy analyst Susan Ridegly puts it:

"We want to stop paying by the widget in healthcare."

Well said.

Ohio Draws a Line [UPDATED]

[Although we rarely do this, I am changing the published headline of this post to more accurately reflect what's actually going on. HGS]

This just in:

"Ohio will let the federal government run its health care exchange, a key portion of health care reform, Gov. John Kasich said today."

Oh, well, guess that means we avoid a nasty state constitutional crisis.

And this is priceless:

"Benefits of a federal exchange start with cost ... annual operating costs of a state exchange would range from $19 million to $34 million, excluding technology. Fees from providers and insurers would pay most of those costs." [emphasis added]

Yeah, be sure to let us know how that works out.

Not to mention: Buckeyes now get the privilege of susbsidizing the folks in states that set up their own Exchanges, forcing up our costs while driving down theirs (at least for a while).

Yippee!

[Hat Tip: FoIB Holly R]

UPDATE: Unlike Ohio's Gov Kasich, Pelican State Gov Bobby Jindal was a bit more forceful in rejecting a state-built ObamaExchange. Co-blogger Mike tips us to the Governor's official rejection:

"The full extent of damage the PPACA causes to small businesses, the nation’s economy, and the American health care system will only be revealed with time. The State of Louisiana has no interest in being a party to this failure by implementing a state based exchange."

That's gonna leave a mark.

UPDATE THE 2ND: And now add Texas to the list:

"Texas Gov. Rick Perry officially notified the federal government on Thursday that the state will not set up an exchange to help people buy health insurance."

I'm wondering if perhaps thinking that my title for this post was inappropriate.

Hmmm....

UPDATE THE 3RD: Thanks to the folks at RedState, here's the latest tally of states which have told Shecantbeserious to take a flying leap off the nearest ObamaExchange: