We get mail!

A reader sends along this link to Avik Roy's take on the ObamaTax Medicaid expansion, and asks:

"What was that again [about] how medical costs cause premium hikes?"

Of course, we always welcome feedback, and appreciate the opportunity to reinforce our long-stated (and well-proven) positions.

I replied:

"Interesting article - Thanks!

Still don't see how that contradicts our position: increasing medical costs cause higher insurance costs. And of course other things also cause increased insurance costs. But the reverse is not true: increasing insurance costs don't cause higher health care costs.

Again, nothing in that article contradicts this very basic, very obvious observation."

Mike had a slightly different take:

"I think your correspondent is just being obtuse.

Of course increasing enrollment increases overall insurance expense.  Doesn't it always?  Specifically, ACA will cause Medicaid enrollment to increase.  This means the overall medical cost for the Medicaid population will be greater than its overall medical cost is today.  Why would it be otherwise?

[Avik] Roy makes the point that ACA - by increasing the Medicaid population - will increase the cost shift to private insurance, so private insurance premiums will experience higher trend and therefore private insurance premiums will be higher.

In other words, higher private sector insurance cost result directly from the Medicaid medical costs shifted to the private sector.

And so, it's medical cost that drives insurance cost.  Exactly what we have been saying for years and years.

The difference here - which your correspondent does not recognize - is that additional Medicaid medical cost will be shifted to private insurance.  That means the private insurance premiums will bear the impact.  Clearly that doesn't prove medical costs don't drive medical premiums.  Instead, it illustrates that very point.  And it reveals once again the ongoing failure of government meddling to accomplish anything constructive about overall medical costs in the first place."

Bob also weighs in:

"About that cost shifting ...

Medicaid = lower reimbursement = cost shift to private patients = higher insurance premiums

Of course we all (should) know this, but Medicaid is a Catch 22:

If the government doesn't provide health insurance for those people, they still get sick and those unpaid bills are shifted to private pay. With Medicaid, only a portion of the bills are shifted to private pay with the rest picked up by taxpayers.

Rearranging the deck chairs.

The issue with Medicaid expansion is, even though DC will print magic money to fund the expansion for 5 years (or whatever the time frame is) after that point the burden falls on the states their "fair share."

As I said, I have the best co-bloggers.

Belated Blogiversary!

Can't believe I missed this, but - about a week or so ago - InsureBlog turned eight.

5,600+ posts and countless comments in, and still going strong.

My hearty and heartfelt thanks to the best co-bloggers in the 'sphere: Bob, Mike, Nate, Kelley and Bill, y'all are terrific, and I'm honored to share pixels with you.

And, of course, to our many, many readers: Thank You!

The MVNHS© and The Obamatax

Here's a cautionary tale of what happens when you put the government in charge of health care:

"Britain was rocked this week by one of the biggest scandals in the recent history of its health system ... The report, which examined conditions…over a 50-month period ... cites example after example of horrific treatment: patients left unbathed and lying in their own urine and excrement; patients left so thirsty that they drank water from vases; patients denied medication, pain relief and food by callous and overworked staff members"

And the list goes on (and on).

It's all about - what else? - cost control. As regular readers know, the Much Vaunted National Health System© (and its ilk) are simply no better at controlling spiraling health care costs than our own soon-to-be-dismantled system. Which doesn't stop unelected and unaccountable bureauweenies from playing God, of course:

"It’s a textbook case of how structural incentives in government-dominated health care systems can lead to terrible outcomes."

Coming soon to hospitals near you.

HealthTech Update

Even as the ObamaTax takes a bite out of medical R&D, some folks continue to develop cutting edge health care solutions. Cases in point:

■ We're all familiar with those MedicAlert bracelets (and even tattoos!). Now, ScanMed QR has come out with a smart-phone app that promises to digitize this often vital info. It's pretty remarkable, especially since one can "dynamically enter, edit and change information." The company plans to market the app's associated devices through pharmacies and other retail outlets.

■ FoIB Holly R tips us to this somewhat creepy new technology:

"Autodesk is developing CAD tools that can design new blood vessels, liver tissue and other replacement parts for the human body in collaboration with 3-D bioprinter company Organovo"

The idea is that, someday, we can actually print out organs in real-time. The tech is still in its infancy (heh!), but seems promising.

On the other hand, imagine the cost of replacing those printer cartridges.

■ Finally, one more smart phone-related item:

"[W]ould you want to know in under 10 seconds if your daughter, wife, mother or other loved one was in danger and needed assistance?"

Well, Clandestine Development has, er, developed a personal safety application for iPhones and Androids (sadly, my brand new 2007 tech phone isn't on the list). It touts the product as "the only app that utilizes patent-pending IntelliTouchTM technology, which activates upon natural, human reaction and responds instantaneously without requiring the users interaction to emergency situations."

But don't just take our word for it:

Medicaid Sleight-of-Hand?

Here in the Buckeye State, our (Republican) Governor has opted to buy into the ObamaTax Medicaid expansion program, to the consternation of many conservatives and/or fellow Republicans. Likewise Jan Brewer in The Grand Canyon State, and several others. Since we're not a political blog, we generally leave it to others to dissect the "behind the scenes" for us, and today Josh Archambault, co-blogger at Avik Roy's Apothecary blog at Forbes, does a masterful job:

"Governors are not the sole policymakers in their respective states ... The other state trying to experiment with reforming Medicaid in a meaningful manner is Florida. HHS granted approval earlier this week for a waiver to allow more long term  care patients into managed care. However, the state is still waiting for a federal decision on a second Medicaid waiver that would allow Florida to move the bulk of its other Medicaid recipients into a statewide managed care program"

As usual, Avik cuts through a lot of the rhetoric (on all sides) to get at the kernel(s) of truth.

Read the whole thing.

ObamaTax Ka-Ching!

It seems that every day brings a new ObamaCost. Whether it's birth control convenience items, or our groceries or sky-rocketing premiums, it's the gift that keeps on taking.

So here are three more vignettes, tied together by a common theme; see if you can guess what that is:

■ "The Congressional Budget Office's just-released economic forecast for 2013 is dispiriting ... ObamaCare will cost 7 million their health insurance."

What's so interesting to me is that the various factors they cite - reduced GDP, higher unemployment and so many folks losing their health insurance - are all symptoms of the same disease, not discrete phenomena.

■ Along those same lines, the (ostensibly non-partisan) Congressional Budget Office has "quietly raised the 10-year cost of [The ObamaTax] insurance subsidies offered via the health law's exchanges by $233 billion." This brings the projected total cost to over $1 trillion over the next 10 years. Given that the initial projections were in the neighborhood of $800 billion (not exactly peanuts to begin with), how long do you think it'll be before that $1 trillion estimate gets left in the dust?

■ And, finally, from the "pass it to learn what's in it" files, comes this gem:

"[HHS Secretary Shecantbeserious] and the Internal Revenue Service (IRS) talk about the gaps in the "universal coverage" requirements in the [ObamaTax] in three batches of proposed PPACA regulations."

Wait, what?

There are "gaps?" What part of "universal" don't they understand?

Oh, right, this is the gang that can't seem to get any of their numbers correct, so why would we expect them to get the underlying requirements right?

The so-called "gaps" center around the Minimum Essential Coverage requirements and exemptions (and why are there "exemptions" in the first place? Oh yeah, it's "universal"), as well as the slight problem that the IRS is essentially toothless when it comes to actually enforcing those requirements.

Sheesh.

The Purging Begins

Somehow, I don't think they really have our best interests at heart:

"[HHS Secretary Shecantbeserious] is proposing to reform existing healthcare regulations and purge unnecessary ones ... We are committed to cutting the red tape for health care facilities"

Oh, I can certainly think of one "unnecessary" healthcare law tax, can't you?

In a fit of uncontrolled irony, Ms Shecantbeserious has released a "114-page proposal cover[ing] a range of medical positions and services"

You really can't make this stuff up.

The problem, of course, is that - with these folks - one must always look for the actual, usually hidden, motivation. That is, nothing they do is ever really for our own good. So although this looks good on (lots and lots of) paper, it's fair to ask "what are they really trying to accomplish?"

In this case, it seems pretty reasonable that they're beginning to understand the incredible provider shortage that they've created, and are now scrambling for a way to somehow mitigate the damage.

Rotsa ruck with that.

Cavalcade of Risk #176: Short and Sweet edition

Dennis Wall hosts this week's collection of risk-related posts. From telecommuting to drug prices, you're sure to find something helpful.

Everyone Counts (except you) . . . A timely reminder about government exercise of power

Via Drudge, we learn this from the London Daily Mail Feb 1:

The British National Health Service (NHS) is launching a program called Everyone Counts.  This program requires family physicians to hand over to NHS their patients’ confidential and personally-identifiable records including drinking habits, waist size, weight, cholesterol, BMI, family health history and pulse rate, and other details.  Physicians are ordered to comply.  Patients cannot opt out.

NHS plans to “analyze” the data.

I’ll just bet they do, too.

NHS officials say the data will be stored in a giant information bank where, they insist, it will be “anonymous and deleted after analysis.”

This raises several questions about the program er, excuse me, programme. 

Will anonymous third-parties be supplied with this patient data for analysis? 

Is the patient data easier to hack when it resides in a “giant information bank” or when it's supplied to an unknown number of anonymous third-parties, or when it remains where it is now, in tens of thousands of physician office files?

How long “after analysis” will NHS delete the data?  A day?  A decade?

Here's a better question  – will a day ever come that is "after" NHS “analysis” ends?

Here's the best question of all – what reasons do the British public have, to believe anything NHS officials say about this new program, er programme?

This seems to me a timely reminder that, when the people agree to give powers to the government, the government will actually, you know, use those powers.  This also seems a timely reminder that sometimes governments will use their powers for purposes the people don’t want - and which the government may strenuously deny it's doing.  Thus, the article quotes an unidentified NHS spokesman: "The NHS constitution makes clear what information can be used for by the NHS and this proposal complies exactly with that."

History teaches that to expect governments to behave otherwise is foolishly naïve. 

Excise tax on Medical equipment costing jobs

The 2.3% excise tax on medical equipment kicked in and has already been blamed for hundreds of layoffs.

Looking back at some larger claims we have paid over the years, this tax could be fairly significant. Seeing $100,000 in equipment charges is not at all uncommon for back surgeries and other procedures. This would appear to be another great reason to go out of country to have these procedures done. $2,300 would cover airfare and accommodations.

"The medical device excise tax applies to manufacturers and importers and generally does not apply to individual consumers."

Those attacking our healthcare system will cheer the $300,000 back Surgery bill  only costing $40,000 in India, Costa Rica, or where ever else. I think the American workers who used to make the equipment and perform these procedures - who are now out of work - might not agree so much.

How long before this loss of revenue has the TSA screening for people wearing untaxed equipment crossing back over the border? Are you bringing any fruits, vegitablles or untaxed medical devices with you today?

Someone who passed economics might have an interesting time rationalizing the impact of $300,000 in domestic spending replaced by $40,000 in foreign spending and its impact on our economy. I have a feeling we don't really "save" $260,000.

Stupid Consumer Tricks

From the same LA Times act of Psuedo Journalism comes this gem of projection;

"The Long Beach woman said she sought treatment in 2009 for a pain in her abdomen. First her doctor ordered a CT scan of her abdomen and pelvis at Liberty Pacific Medical Imaging, an independent facility near Long Beach Memorial.

She got approval from Blue Shield, and she paid the negotiated rate of $660."

"This time, her surgeon referred her to the hospital's imaging center. Snyder said she assumed her bill would be about the same because it was the identical test. Instead, Blue Shield's rate with Long Beach Memorial was $3,497 and the insurer told Snyder she owed $2,336,"

Wow. I would be pissed, too, if I was asked to pay $2,336 for a test I could get down the street for $660. She should go after the hospital or the doctor who referred her to the hospital....right...?

"In a complaint filed last month in Orange County Superior Court, Snyder accused Blue Shield of unfair business practices, breach of good faith and misrepresentation over her medical bills. The suit seeks class-action status on behalf of other Blue Shield customers."

HIPAA would make it hard to find out, but I have to wonder if her chronic case of stupid was pre-existing or not. Sue your health insurance because you assumed a hospital would charge the same as a free-standing imaging center.

What is the Part B late enrollment penalty?

This is not intended to be a trick question.  But in the Fair Kathleen Sebelius' HHS, it appears to have a trick answer.

On page 25 (page 26 in the on-line version) the 2013 Medicare handbook "Medicare and You" states that "Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn't sign up for it."

That sounds pretty clear - what's the praahblem? 

Well.  Since you ask.

It seems there is a Social Security document called the “Program Operations Manual System.”  This document is essentially the operating instructions and rules for Social Security.

As it happens, a little-known, double-secret codicil in this manual requires that anyone who declines Medicare benefits thereby forfeits their Social Security benefits.

In early 2012, a legal challenge arose - Hall v Sebelius - over this double-secret Social Security rule.  The plaintiff argued that neither the Social Security Act nor the Medicare Act allows administrative agencies to precondition benefits under one program on acceptance of benefits from another.

The district court disagreed and the U.S. Court of Appeals for the D.C. Circuit affirmed the lower court decision. Both decisions were sharply divided.  In January 2013, the Supreme Court declined to hear the case. By its decision, the Supreme Court let stand the lower courts' controversial ruling.

So the "trick answer" is yes, you face a 10% per year premium penalty for failing to enroll in Part B when eligible.  But that is the least of your worries -  your penalty is actually much greater.  You have forfeited your Social Security benefits.

This much greater penalty for non-enrollment is NOT included on page 25 (or 26) of the Medicare and You handbook.  It's still double-secret, you see.  

Are we all clear now?

Left unanswered at this time - "how long does the SS Admin wait after you are eligible for Medicare but don't enroll, to take away your SS benefits?"  One quarter?  One month?  One hour?

LA Times' Pseudo Journalism

I have believed for a long time that one of the major reasons our healthcare system has sunk so far is the public knows so little. They are fed endless misinformation and downright lies by politicians and our so-called journalists,  while the public blames greedy insurance companies with 40% profit margins. The LA Times has dumped the latest pile of journalistic malpractice on us; So many problems with this piece of agenda propaganda, possibly the worst:

"For those patients who have insurance, getting the lower price would typically mean withholding that information from the hospital or clinic. Experts warn that doing so, however, means any payments don't apply to customers' annual insurance limits for out-of-pocket spending."

According to these "Experts" (and why are they never named?), if you pay a medical bill, you can not submit it to your insurance company.  Apparently insurance companies don't have claim forms or mail boxes where members can submit claims.

As usual, hacks like Chad Terhune - who rush in to push a lie - miss the real story: the far bigger problem is people paying cash to get a discount, then submitting to insurance and getting deductible credit for more than they pay. If someone accepted the cash discount then billed their insurance, the insurance company would have no way to know the member paid a discounted rate and would process the deductible credit at the higher allowable. Not exactly the story Chad was trying to sell, is it?

We see this already in Rx: Member co-pay cards circumventing plan designs and allowing members to pay substantially less then their benefit plan calls for.

The error was pointed out to Chad, but don't expect the LA Times to actually correct an article. They don't like facts getting in the way of their agenda.

Did Shecantbeserious Blink?

Perhaps, but any celebration over victory of her usurpation of the 1st Amendment is premature:

"[HHS Secretary Shecantbeserious and/or her minions] on Friday announced a broader opt-out for religious-affiliated groups that want to skirt the so-called contraceptive convenience item mandate ... Businesses like Hobby Lobby ... would probably not be affected by the change ... For those with insured plans, the insurer would be required to provide enrollees with "no-cost contraceptive coverage" through a separate policy."

As usual with these rocket surgeons, there's more exemptions than anything else. So who would likely benefit?

A much smaller list:

"[R]eligious nonprofits that object to the mandated coverage of contraceptives, one that will allow large faith-based hospitals and universities to issue plans that do not directly provide birth control coverage."

But even that's a cop-out, because they'll still be required to provide a "stand-alone, private insurance policy that would provide contraceptive coverage at no cost."

At "no cost" to whom?

Yeah, I know.

By the way, sharp-eyed readers will note that I elided over "self-insured plans, a third-party administrator would work with an insurer to set up no-cost coverage through other policies." Your patience will be rewarded.

Cavalcade of Risk #176: Call for submissions

Dennis Wall hosts next week's Cav. Entries are due by Monday (the 4th).

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.

The New ObamaRate$

Remember this:

"Your health insurance premiums will decrease by 3000%"

Yeah, no:

"[T]he Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year ... In the examples, the IRS assumes that families of five who are uninsured would need to pay an average of $20,000 per year to purchase a Bronze plan in 2016."

Which is, of course, much higher than any (non-enforceable) penalty tax that might be due.

Adding insult to injury, those expected rate increases will be coming in ahead of schedule. In email this morning from Aetna:

"On January 17th, we sent an email message announcing our decision to discontinue the initial 12-month rate guarantee for new business policies with a January 15, 2013 or later effective date ... To prepare for 2014 when new health care reform changes regarding products and rates will take effect"

As Aetna notes, they are not the only carrier to make this change, and I can't imagine any other carrier sticking with annual rate guarantees from here on out.

Glad we passed it to find out what's in it?

Look for the Union Label (ObamaTax Schadenfreude Part Deux)

Politically astute readers already know that The ObamaTax had major Union backing, both financially and manpower-wise. Now that it's in full-swing, though, those same folks are experiencing a bit of buyer's remorse:

"Union leaders say many of the law's requirements will drive up the costs for their health-care plans and make unionized workers less competitive"

Ya think?

They're counting on their lower-paid member having access to the much-touted "subsidies" that promise to lower their net cost. But as Bob pointed out earlier today, these subsidies are often elusive, meaning that the very folks that The ObamaTax was ostensibly designed to help may feel its pinch the worst.

So what's a Union to do?

Ah, so glad you asked:

"A handful of unions say they already have examined whether it makes sense to shift workers off their current plans and onto private coverage subsidized by the government."

Here's a free clue, fellas: Yes, yes it does.

But the winner of the coveted "Rocket Surgeon Union Honcho" has to be John Wilhelm, the leader of Unite Here Health, who:

"recalls standing next to Barack Obama at a rally in Nevada when he was a 2008 presidential candidate.
"I heard him say, 'If you like your health plan, you can keep it,' " Mr. Wilhelm recalled. Mr. Wilhelm said he expects the administration will craft a solution so that employer health-care plans won't be hurt. "If I'm wrong, and the president does not intend to keep his word, I would have severe second thoughts about the law."

Might want to clean those specs, Mr W.

Health Wonk Review - Waste, Warnings and the Future

Maggie Mahar hosts this week's roundup of wonky posts. Lots of material, well laid-out. Do stop by.

Truth AND Consequences

So, the ObamaTax Mandate is scheduled to take full effect in 11 short months.

Or is it?

"The Obama administration took new steps ... toward implementing the individual mandate ... downplaying the scope of the unpopular provision by stressing rules that allow exemptions from the requirement to purchase insurance."

Hmm, now where have we heard that before?

Oh yeah: ObamaWaiver Mania.

Aside from the fact that the mandate itself has no teeth (well, unless one is expecting a tax refund), what's the point?

Or, as HHS Secretary Shecantbeserious opines:

"The mandate penalty "applies only to the limited group of taxpayers who choose to spend a substantial period of time without coverage despite having ready access to affordable coverage"

Of course, since plans will be guaranteed issue, community rated and required to cover pre-existing conditions, wouldn't this apply to every policy? And if, according to their own calculations, fewer than 2% of us will have to pay any penalty, then what's the point?

And then there's this:

"Some families could get priced out of health insurance due to what's being called a [feature of the ObamaTax] ... families that can't afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own."

So they face a selectively enforced mandate that requires them to purchase insurance they can't afford but for which they're ineligible for subsidies. What could possibly go wrong?

Free money?

It's that time of year again: various tax services touting "maximum refund," sundry retailers with "suggestions" on how to spend those rebates, and the annual Flight of the W-2's as employers inform us how much we got paid last year.

Oh, and something new this year: Box 12.

"What the heck's a Box 12" you ask?

Thanks to The ObamaTax, it's how your employer informs you how much you paid for your health insurance last year.

"Now wait a gosh-darned minute there, Henry. I know how much I paid - I saw it coming out each week."

Um, no: that's how much you paid in addition to Box 12.

What, you thought your employer paid for any of your health insurance? Not paying attention, I see.

Bet you thought he paid those unemployment premiums and Social Security taxes, too. Now you know.

[Hat Tip: FoIB Holly R]

Is there no virtue among us?

The difficult and heartbreaking public discussion continues over how to unravel the Newtown catastrophe and respond effectively.  Everyone has ideas. Some of the ideas make sense to me, others do not, including the notion that increased regulation of mental health insurance benefits is a necessary part of the response. 

More generally, politicians seem to think  - and exhort the public to believe – that additional regulation or a new law is always the remedy for every problem.  I think that mind-set needs examination.

Here’s an example of what I mean:  In the Greater NY section of the WSJ this morning there’s an 18-paragraph article entitled “Conn. Ponders Mental Health.” [$link at this time] The article reports on progress of the state’s commission on mental health, appointed after Newtown.  It observes that Connecticut “is moving toward sweeping changes” to its mental health laws including additional insurance mandates.

This movement is happening despite reported testimony of the chief psychiatrist at Hartford Hospital and a State Commission member, that because of privacy laws, it is impossible to ascertain whether the Newtown shooter was ever treated for mental illness and therefore “with nothing confirmed it is really impossible to say how changes in the mental health system could address his specific circumstances.”

As usual, telling information is buried at the end of the article.  In the 16th paragraph we read:  “Experts say the mental health parity laws [intended to force insurers to equalize benefits for mental health and physical health] aren’t adequately enforced.”  In the 17th paragraph, an attorney notes that “we are supposed to have [mental health] parity, but it just doesn’t seem to play out in practice.”  Is there any reason the public can expect that new laws or new regulations will be more strictly enforced?  No.  There is no reason.

Yet our politicians propose sweeping changes to mental health laws?  Go figure.

In a better world, more of our so-called leaders would take the time to think rather than rush to enact even more laws that will be poorly-enforced and accomplish little (aside from attaching their names to bravely-titled, wordy, but ultimately worthless documents.)

So what’s to be done?  I wish I knew.  But I believe this is as true now as when it was first said more than 200 years ago:

“Is there no virtue among us? If there be not, we are in a wretched situation. No theoretical checks-no form of government can render us secure. To suppose that any form of government will secure liberty or happiness without any virtue in the people, is a chimerical idea”

--James Madison

Ch-ch-changes, HRA-style

The ObamaTax promises to touch just about anything and everything health insurance-related. A recent email informed us about the latest on The ObamaTax 's impact on Health Reimbursement Arrangements (HRAs):

"The preamble to [The ObamaTax] distinguished between HRAs that are "integrated" with a group health plan and HRAs that are "stand-alone." ... The question has been whether a stand-alone HRA can be quilted with individual health insurance coverage (not employer-sponsored group coverage) to satisfy the requirements."

I turned to our on-call Alternative Benefits Guru, Lou G, who explained that "there have been employers who would provide an HRA benefit to their employees who are not covered by the group health plan (they have individual coverage, or coverage through a spouse, no coverage at all etc).  The IRS is saying that this is no longer allowed.

In order to have an HRA you must be enrolled in the group health plan, the concept of a "stand alone" HRA will not be permitted."

In other words, if you're not on the group plan, you don't get access to those sweet, sweet HRA dollars. But remember: if you like your health plan, you can keep your health plan.

[Hat Tip: Angela F and FoIB Jeff M]

MiniMed Maelstrom [UPDATED]

It had appeared that so-called MiniMed (aka "limited benefit") plans would be (for the most part) exempt from ObamaTax requirements. The ObamaTax itself seems to say that, but it's not really that simple (these things rarely are):

"[HHS Secretary Shecantbeserious] said the agency PPACA regulations include a number of rules governing when an indemnity policy included in an employer benefits package falls outside the PPACA framework."

The problem isn't necessarily with the plans themselves, but how they're integrated (or not) with employer-sponsored plans. There must be a fairly visible (if virtual) "wall of separation" between the traditional group plan and any MiniMeds that are purchased, and there have to be completely separate accounting and payroll deduction processes, which of course add to the employer's admin costs.

The plan must also be an indemnity-only configuration; that is, it "must pay a fixed dollar amount per day (or per other period) of hospitalization or illness (for example, $100 per day) regardless of the amount of expenses incurred." The problem comes from whether these benefits are calculated "per claim" or "per period." So, for example, if the plan reimburses $40 for a doctor's office visit, rather than $40 per day that you had medical services performed, there's a problem. Since this describes the bulk of plans that I've seen, this could be a big issue for employers that offer both "regular" and "limited benefit" type plans.

What's not clear to me right now (and I'll update this post as appropriate) is whether these rules apply to plans purchased by individual outside an employer rubric. If so, this could be a real problem for a lot of MiniMed marketers.

UPDATE: Perusing the linked FAQ, I see MiniMeds ("indemnity plans") referenced only in the context of an employer-sponsored plan:

"Fixed indemnity coverage under a group health plan meeting the conditions outlined in the Departments' regulations(3) is an excepted benefit"

and

"The Departments' regulations provide that a hospital indemnity or other fixed indemnity insurance policy under a group health plan provides excepted benefits" [emphasis added]

By the way, I think this:

"When a policy pays on a per-service basis as opposed to on a per-period basis, it is in practice a form of health coverage instead of an income replacement policy. Accordingly, it does not meet the conditions for excepted benefits."

is pure hokum. In a just world, Ms Shecantbeserious and her minions would find themselves in deep doo-doo for overstepping their regulatory bounds.

Fat chance of that, of course.

Pancreatic Cancer: Good News and Bad

It appears that a high-school student may have come up with an inexpensive, accurate and early method for detecting pancreatic cancer:

"Jack Andraka [has] developed a simple dip-stick test for levels of mesothelin, a biomarker for early stage pancreatic cancer found in blood and urine ... His novel patent-pending sensor has proved to be 28 times faster, 28 times less expensive, and over 100 times more sensitive than current tests."

This is pretty important stuff: the disease kills over 95% of its victims, usually because it's difficult to detect in its early (more treatable) stages. Being able to catch it early on would be a real boon.

That's the good news.

The bad news, of course, is that The ObamaTax promises to severely limit additional research, let alone development of this new tech:

"As of Jan.1, Obamacare imposes a new tax of 2.3 percent on medical device manufacturers ... The tax is imposed on gross sales -- even if the company does not earn a profit in a given year."

And since we're already seeing med-tech companies rapidly downsizing as a result of that tax, it's no sure thing that young Jack's new invention will ever see the light of day.

Too bad, that.

Cannon Fire!

FoIB (and Cato Institute director of health policy studies) Michael Cannon fires another volley across the bow of ObamaTax advocates:

Unfortunate Agent Tricks - An Update

Oy, where to begin? One supposes that the beginning would be a good place:

"[Insurance agent] Mark String Sr pleaded not guilty to 59 counts of promotion of prostitution"

Generally speaking, this would not be auspicious. And, of course, it wasn't.

Now fast-forward a few months, and we learn about the latest "doings" in The Pine Tree State:

"The defense and the judge aren't happy with delays in the trial of the business partner in a prostitution scandal ... Prosecutors aren't happy, either, after the judge dismissed nearly four dozen charges."

And the jurors - sequestered for days on end - aren't exactly happy campers, either. Proceedings screeched to a halt late last week when Justice Nancy Mills "dismissed 46 of 59 counts" against Mr Strong. The latter, by the way, vehemently denies any untoward sexual contact between himself and Ms Zumba (or Zoomba - I've heard it both ways).

We'll continue to stay on top of the story as best we can.

Oh, Pew!

Bob noted this morning that folks who choose to engage in risky behavior (smoking, over-eating, etc) end up paying more for health insurance. But as (presumably responsible) adults are we doing enough to mitigate those very risks?

FoIB Holly R tips us to this Pew Research graphic, according to which we're making some strides:

 

Frankly, though, I have to call BS on at least some of this. My guess is that what's really happening is that "60% of US adults CLAIM they track..."

And, of course, "tracking" doesn't necessarily lead to "doing something about it."

A very expensive butt

No, not that kind; this kind:

"Millions of smokers could be priced out of health insurance because of tobacco penalties in [The ObamaTax] ... allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums"

This is hysterically funny.

First, since health insurance plans will be guaranteed issue, pre-existing conditions covered almost immediately, and insurers are essentially prohibited from cancelling for anything short of failing to pay the premium, what possible penalty could there be for lying on the enrollment form?

[Since plans are guaranteed issue, they're not applications]

But wait, it gets better:

"[G]overnment tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers."

So again, why would anyone disclose tobacco use?

But wait, it gets even better:

"For a 55-year-old smoker, the penalty could reach nearly $4,250 a year."

That's in addition to the underlying premium, which is already inflated due to - you guessed it - guaranteed issue and community rating requirements. A very realistic annual premium, then, would be north of $10,000. But the penalty tax for going bare is a fraction of that. So again, why would this poor smoker even bother to purchase insurance until the very last minute?

The mind boggles.

Cute, but naive: LTCi and DNA

Long Term Care insurance is one of the two most complicated products we sell. There are a lot of "moving parts," and underwriting is especially important. These plans represent a tremendous risk for carriers (and are priced to reflect this, of course). One factor upon which they rely is ones' family history and, sometimes, one's actual genetic predisposition.

As we've discussed previously, the use of genetic information in insurance underwriting is - to put it mildly - controversial. Under the Genetic Information Nondiscrimination Act (which dates back to 2008), health insurance carriers are proscribed from its use. But LTCi has not been considered "health insurance" and so was exempt from this prohibition.

Now, HHS Secretary Shecantbeserious is weighing the possibility of unilaterally changing that.

In a post at LifeHealthPro, actuary and LTCi wholesaler Claude Thau makes the case against her doing so, but undermines himself from almost the very start:

"A belief on the part of HHS that it has the right to unilaterally expand GINA would be similar to HHS’s position on the CLASS Act ...  The separation of powers  is the genius of the U.S. Constitution and it would be scary to me to see the Executive Branch undermine the constitution in that regard"

Cue laughtrack.

Since when has Madame Kathy cared a whit about overstepping her authority? Perhaps Mr Thau should consult with the owners of Domino's and Hobby Lobby about "unilateral expansion." Heck, she even offers advice on how insureds should defraud their carriers. Does he really think there are depths to which she wouldn't willingly plunge?

I sure don't.

Why you need Disability Insurance

Because, well:

Network Numbness

From email I received this morning:

"Kettering Anesthesia Associates, which serves [various providers in the Dayton, OH area], has chosen to terminate its provider contract with Anthem ... Consequently, Anthem members may be billed by Kettering Anesthesia Associates for any balance not covered by Anthem"

This is SOP when dealing with network-based plans: with some exceptions, providers are  barred from "balance billing" their patients for amounts written off as discounts. The big problem here is that PARE providers generally have an exclusive relationship with hospitals; that is, if you're going to be "put under" at (for example) Kettering Hospital, you don't have a choice of gas-passers. If they're not in-network, they can bill you pretty much anything they want, and you're on the hook.

[As an aside, I was quite surprised to learn that KAA was even in a network: that's highly unusual]

On the plus side, I must commend Anthem for recognizing this:

"[S]ince our members do not have a choice of anesthesiologists for surgeries performed at Kettering Medical Center, Anthem will apply the equivalent of any member liability amounts such as co-payments, deductibles, etc., at the member’s in-network level (rather than the out-of-network benefit level equivalent). In most circumstances, payment for services will be issued to the member"

Two things of interest here: first, that they'll essentially continue to treat these claims as in-network, so as not to penalize their members. Second, I love that they're going to send that balance due amount directly to the insured. This accomplishes several things: it increases patients' awareness of just how much their health care costs, and it also puts the onus on the provider to collect whatever's due (something we mentioned almost 7 years ago).

Kudos to Anthem on a clever and effective solution to what could have been a major snafu.

[Hat Tip: Beth D]

Health insurance? Aisle 12

[Oy - scooped AGAIN! Still, mine is a bit different take on the subject. HGS]

This may start in the Golden State, but don't doubt for a New York minute that it won't catch on across the country:

"The California Health Benefit Exchange board is hoping to get retail stores to provide in-store enrollment assistance for the state's [ObamaExchange] ... Members of the ... team believe that retail stores are good vehicles for reaching uninsured residents"

In theory, these "trained and certified" employees would be able to help you choose a melon and a health plan. I have my doubts: one doesn't see a lot of rocket surgeons wearing those bright blue or red, pin-emblazoned vests. On the other hand, given how The ObamaTax policies must be structured, it wouldn't take a rocket surgeon to explain them, either.

Perhaps the model isn't the guy stocking the shelves, but the butcher or pharmacist behind a counter. That seems to me a bit more workable: someone tasked with handling the insurance questions, not where one can find the canned soups.

And I can't help but think that this is doomed to failure: after all, how would the store make money on this deal? They can "provide Tier 2 marketing support, by helping with marketing, education and referral activities, but not with actual enrollment services," but why would they? After all, they're taking all the risk (what if their advice is bad and they're sued or fined?) for zero financial reward.

Of course real, professional agents won't be much better off if they agree to become ObamaExchange Navigators, since "they cannot get compensation from the insurers selling products through a state's PPACA exchange program."

I know - we'll make up for it in volume!

John Kerry on How to Kill Medicare

Medicare has always been a failure measured by what it was supposed to accomplish: protect Grandma from losing the shirt off her back, and cost. But it was a very popular failure. Conservatives have wondered for years how to rid the nation of this albatross. Thankfully John Kerry has struck the first blow for freedom:

"Meanwhile, John Kerry found another way to raid the health care system. The Senator from Massachusetts did what diligent Senators do; he added a provision to the Affordable Care Act to allow his state’s hospitals to increase their Medicare reimbursements by a factor of ten:

Here’s how Massachusetts gets extra money: Hospitals in urban areas have to be paid at least the same amount as rural hospitals. Massachusetts only has one rural hospital—a 19-bed facility on Nantucket island. So, the Nantucket Cottage Hospital sets the floor for every hospital in the state.
But because Nantucket is so wealthy, its cost of living is high—and thus so are its Medicare payments. That drives up the payments for every other hospital in the state. And under Kerry’s provision in the Affordable Care Act, hospital payments come from a nationwide pool.

If the provision remains in place, Massachusetts’s payments will rise over the next decade from $367 million to about $3.5 billion. The pool operates on a zero-sum basis, so all the money the Bay State gets will be funded by cutbacks from other states."

MA is a small State, it took some chutzpah to pull this off. Other states and hospitals are obviously not going to stand for this. Luckily for the taxpayers we are broke, so they can't just give every hospital a 10-fold pay raise. The more states fight over the small pot of blood money and more games like this the politicians play the sooner the public will see this for the failure it is and get rid of it.

Well Duh! then how much higher?

Bob discussed a WSJ blog explaining why rates are going to go up. Forbes has a hint just how bad it might be and early discussion of pushing back some of the expensive parts:


"A California insurance broker, who sells health plans to individuals and small businesses, told me that she’s prepping her clients for a sticker shock. Her local carriers are hinting to her that premiums may triple this fall, when the plans unveil how they’ll billet the full brunt of Obamacare’s new regulations and mandates."

"There’s buzz in Washington that to ease the price hikes, the Obama team may slow down some of the most expensive regulations. This might include the law’s mandatory community rating. One approach they’re said to be considering is allowing some of the historically based underwriting to stay in place for a time."

Obama already started most of the taxes after his reelection; who would be surprised that in order to protect his legacy he pushes the worst parts of ACA onto the next President? Let them figure out how to fulfill his promises or take the blame for repealing Obamacare,  all he cares about is getting credit for covering 30 million people and fixing healthcare. Neither of those things have to actually happen: the MSM has already credited him with accomplishing these goals

It will be amusing to watch Obama and the Media dance their way out of this way. Plenty more to come.

Cavalcade of Risk #175: A Lighter Side of Risk

Julie Ferguson hosts a light-hearted edition of our bi-weekly collection of risky posts. There's little risk that you won't be amused and enlightened.

So drop by for a laugh, and stay for an insight (or three).

Schooling the ObamaTax

As we reported in November, higher education employment opportunities are on the chopping block thanks to the ObamaTax. In just a few short months, the ripple effect has continued to grow:

"A handful of schools, including Community College of Allegheny County in Pennsylvania and Youngstown State University in Ohio, have curbed the number of classes that adjuncts can teach in the current spring semester to limit the schools' exposure to the health-insurance requirement."

Interesting choice of words: "handful." Kinda minimizes the problem, doesn't it? Well maybe for the "ins," but not so much for folks like instructor Robert Balla, who "faces a new cap on the number of hours he can teach at Stark State College. In a Dec. 6 letter, the North Canton school told him that "in order to avoid penalties under the Affordable Care Act…employees with part-time or adjunct status will not be assigned more than an average of 29 hours per week."

Mr Balla, it should be noted, teaches (among other things) technical writing, and is well thought-of by his students. But that doesn't matter under the ObamaTax, and now his students (and prospective students) are worse off for it.

On the other hand, he's apparently bought into the popular (yet erroneous) assumption that the ObamaTax would result in lower costs and better coverage:

"In education, we're working for the public good, we are public employees at a public institution; we should be the first ones to uphold the law, to set the example."

No, you're providing a service for a fee, much like health care providers. Perhaps we need to mandate a college education, as well. What could possibly go wrong?

[Hat Tip: FoIB Holly R]

More ObamaTaxes

And in case you were wondering about your W-2: no, it's not just your withholding that'll be affecting your take-home, it's the ObamaTax at work, as well:

"Beginning for the 2012 calendar year, certain employers are required to report in Box 12 of the IRS Form W-2 provided to their employees, the aggregate cost of employer-provided health care coverages."

That's just one of a litany of new tax-related rules that took affect 3 weeks ago. Courtesy of Assurant Health, an easy-to-follow recap of the new W-2 rules and regs is available for download here.

Get 'em while they're hot (or not).

Shecantbeserious hits bottom, keeps digging

[UPDATE: Looks like Nate has scooped me!]

Words fail:

"When patients pay for medical care out of pocket, they should be able to keep doctors and hospitals from telling their health insurers about the care."

This advice is just part of a new, 560+ page compendium of final rules and regs just released by Madame Secretary and her minions. Masochistic readers may peruse them at their leisure here. Oh, and in case you're wondering, the initial projected cost of implementing these new rules is up to $225 million, and up to $43 million annually after that. I think that's low-balling it.

Among the many wonderful new rules are more onerous compliance requirements on private health info, while at the same time expanding school vaccination programs and the sending of a deceased's health information (he's dead, Jim) to survivors.

But the most egregious part is this little gem:

"[A]nother provision restricts "disclosures to health plan concerning treatment for which  the individual has paid out of pocket in full"

The problem is that this hinders insurance carriers from accurately pricing the risk, and it's going to be a major problem for in-network providers, whose contracts generally include this kind of disclosure. Not to mention, how does the doc (or his office staff) know which info to pass along, and which not?

As usual, the rocket surgeons now running our health care system leave a lot to be desired.

ADDENDUM: Our resident Medical Office Manager, Kelley B, noticed something, um, odd:

This is the dumbest thing I have read today:

"Commenters also asked what providers should do when patients said they would pay for sensitive care out of pocket but failed to pay for it"

Uh, if the patient presents at checkout and states he will pay for the service, he does not want it billed, then the money is collected right there, there is no billing the patient, as there is no electronic billing.  If he says, "oh I didn't know you would want my money now," then we tell the patient, too bad, so sad, but now we will bill insurance.

HHS Codifies Insurance Fraud

I would love to see a list of which other industrialized nations with healthcare spending half ours has laws like this;

http://www.lifehealthpro.com/2010/07/08/hhs-doctors-can-help-patients-hide-care-from-plans

"If, for example, a patient received care for asthma and for diabetes from the same physicians and paid for the diabetes-related care out of pocket, the patient could keep the physicians from telling the health plan about the diabetes, officials say.

The health care provider or other covered entity could still contact the health plan if the patient did not really pay the full out-of-pocket costs for the care. If, for example, a patient's check bounced, a provider could contact the health plan for payment, officials say."

So hiding information from your healthplan who is being told to better manage health and cost is going to be law, sounds counter productive.

Plans have filing limits, if the doctor waits until the patient doesn't pay they might miss the time they have to file for reimbursement under the plan, or will plans now also be required to extend the time to file claims based on employees wanting to hide information form them. Not to mention the mess that makes of reinsurance contracts.

My advice to clients, this is reason 328 to go back to reimbursement plans. Dump the PPO and assignment of benefits and let members submit claims and be reimbursed at plan allowable. Solve not only this issue but excessive provider cost as well.

An after thought, employee suffers some condition related to smoking which they lie and tell their healthplan they do not do in order to get the lower premium. In order to continue paying the lower premium they hide any claims related to smoking. Until they get major claim at which time they let the plan pay. 

On Medicare and The ObamaTax

A friend of mine just posted this on his FaceSpace page:

"Participating in one of my favorite annual activities (not)........trying to determine why Medicare cannot accurately, efficiently bill me for my premium! Starting my second year on Medicare, and premium for February is different than January. Same thing happened last year. Last year it took three months for Medicare rep's to give an explanation of why my premium changed during my first quarter on Medicare. Good thing I have a sense of humor."

And folks think that these same bureauweenies can run the rest of our health care system any better?

Finally: Some good news from the Much Vaunted National Health System©

It appears that a significant number of providers have had enough with treating illegal immigrants:

"While [MVNHS©] hospitals are allowed to charge foreign patients for treatment if they do not come from a country with a reciprocal arrangement, GPs are forced to take on people without charging."

What to do, what to do?

Ah:

"A survey of GPs has found that the majority think this is too generous and the rules should be changed."

The docs claim that the rules themselves are quite confusing, and reimbursement levels for illegals is significantly reduced. They even manage to work in medical tourism as a potential culprit. In an eerily prescient statement, Dr Paul Roblin, who chairs the Berkshire, Buckinghamshire and Oxfordshire Local Medical Committee, notes:

"GPs are expected to practice with limited healthcare funding and if we are using that money for treating visitors, the taxpayer loses out."

On this side of The Pond, we call that The ObamaTax.

Cavalcade of Risk #175: Call for submissions

Julie Ferguson hosts next week's Cav. Entries are due by Monday (the 21st).

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.

Health Wonk Review: 2nd Inauguration edition

Chris Fleming hosts this week's historic roundup of interesting and provocative posts from around the wonkosphere.

What's so great about Chris's efforts is that he's woven a lot of disparate posts into a cohesive narrative - no easy feat.

They ain't birthin' no more babies

In case you missed it, another ObamaTax domino has fallen. Pregnant women in southwestern Pennsylvania don't get to keep their doctors, after all:

"The Windber Medical Center will stop delivering babies after March 31 because its obstetricians are either leaving or refocusing their practices, and because hospital officials believe they can't afford it based on projected reimbursements under looming federal health care reforms." [emphasis added]

That's a big problem with the ObamaTax: at the same time as it (purportedly) expands the number of insured folks - either in the marketplace or on Medicaid - the actual amount that docs can expect to earn from them is dropping. Kind of reminds me of those crazy car commercials of yesteryear, "sure we lose $100 on each sale, but we make it up in volume!"

Or, as this case so vividly illustrates, not.

[Hat Tip: FoIB Jeff M]

Mental Health and "Gun Control"

This is a strange confluence of two seemingly unrelated items. Yesterday, the New York legislature passed a far-ranging "gun control" agenda, one portion of which apparently requires "mental health professionals to report patients they believe could harm themselves or others."

As we learned yesterday, HIPAA privacy regs don't seem to prohibit this, but that doesn't really address the underlying problem: just because we can do something doesn't (necessarily) mean that we should. In 2002's "Minority Report," the police can arrest a potential perp under the concept of "pre-crime." While that's an interesting sci-fi "hook," is that really where we want to be?

On the one hand, there's no question that mentally unstable folks could pose a threat, but I think it's more nuanced than that: are we really going to lock people up because they might become dangerous? I realize that there's a difference between "reporting" and arresting, but what would be the point of the former if the latter wasn't a potential outcome? I have an issue with this – it’s related to our discussion the other day about the young lady having the double mastectomy because she might get breast cancer someday. In that case, though, it’s her choice. This one is the state (“government”) deciding. Not exactly a slam-dunk.

We talk a lot here at IB about "risk," and that's appropriate (after all, insurance is all about risk - or at least it used to be). So we have the risk that a mentally unstable person could commit violent crimes, versus the risk that society (or its duly appointed agents) might abuse an individual's rights. To paraphrase another iconic movie, do the needs of the many outweigh the needs of the few?

Or the one?

[Hat Tip: FoIB Holly R]

HIPAA vs "Gun Control"

HIPAA (the Health Insurance Portability and Accountability Act; note that, unlike the ObamaTax, there was no pretense regarding affordability) is a widely misunderstood piece of legislation. But it's in its application that we often find the most trouble.

Tomorrow, President Obama is threatening promising to release a slew of Executive Orders to more rigidly control legal access to firearms:

"Actions the president could take on his own are likely to include ... compelling federal agencies to improve sharing of mental health records"

Now, there's been some chatter on the internets that this would be a flagrant violation of HIPAA privacy rules. The thinking seems to be that signing a HIPAA privacy form prohibits health care professionals from releasing information to, for example, federal authorities without prior authorization.

This would be untrue:

"5b.9

(1) Except as provided in paragraph (b) of this section authorizing disclosures of records without consent, no disclosure of a record will be made without the consent of the subject individual.

(b) Disclosures without the consent of the subject individual. The disclosures listed in this paragraph may be made without the consent of the subject individual. Such disclosures are: (7) To another government agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law"

So like it or not, HIPAA offers no "safe harbor" in this scenario.