Polar Vortex Risk Management

While much of the country continues to shiver from Polar Vortex v2.0, the biggest risk most of us are thinking about is frostbite and slipping on the driveway.

Or perhaps our pipes freezing [ed: from a strictly utilitarian viewpoint, the gentleman was successful].

But there are really a number of other severe weather risks about which we should be aware, and for which we should be prepared. Courtesy of FoIB Bill M and the fine folks at Auto Owners Insurance, here are few key Polar Vortex-related risks:

■ Ice Dams: these are "accumulation(s) of ice at the lower edge of a sloped roof ... [as] interior heat melts the snow on the roof, the water [runs] down and refreeze(s) a the roof's edge." This, of course, leads to a build-up of ice and creates major drain blockage which could end up forcing water into your walls and ceiling.

How to mitigate this risk: make sure your attic is well ventilated and keep the floor of the attic insulated. 

■ Freezing pipes: as mentioned above, a blow torch (while effective) is not recommended. Water is funny: it expands when it freezes (perhaps you've noticed this phenomenon in your freezer's ice tray). When the water in a pipe freezes, it can expand so fast and so much that it breaks (bursts) the pipe.

How to mitigate this risk: insulate exposed pipes with special (and inexpensive) foam sleeves. You should also seal any cracks in outside walls, and keep cabinet doors open so warm air can circulate. Don't forget to keep a slow trickle of water going, especially on lines that pass through exterior walls.

Oh: a hair dryer beats a propane torch if you do have a frozen pipe (really!).

Be safe, and stay warm.

Good News for Medicare Advantage

Aetna CEO Mark Bertolini was interviewed today on CNBC and offered a number of important insights about Medicare Advantage.

First, overall Medicare Advantage enrollment for 2014 rose more than anyone expected. 

Next Bertolini suggested that Medicare Advantage is now “too big” for the federales to shut down.  Nearly 30% of all Medicare-eligible seniors today have elected to buy a private Medicare Advantage policy rather than enroll in traditional Medicare.  That’s around 14 million people.   Bertolini also said that today's employees are increasingly willing to sign up for Medicare Advantage when they reach age 65, because they have had years in which to become familiar with managed care.  I think that means enrollment growth in Medicare Advantage is likely to accelerate over the next few years; an accelerating trend would of course be compounded as more “boomers” retire.

CMS pays private insurers to take over the risk for each senior who enrolls for Medicare Advantage.  At one time, the average CMS payment was 114% of the cost for traditional Medicare enrollees. These higher payments were partly because of risk-adjusters in the CMS payment formula – and partly because Medicare Advantage provides better coverage than traditional Medicare.  However – and this is important information – Bertolini said the average government payment to Medicare Advantage insurers is now down to 106%, and is “headed to zero.”  

In other words, private Medicare Advantage insurers believe they have figured out how to provide better benefits and better service than traditional Medicare, for the same cost. That's big.

It's big because it would bring good news all around: CMS will shed even more traditional Medicare risk – and cost – thus reducing its financial strain; private insurers will pick up even more Medicare Advantage enrollment on a profitable basis even when paid the same as the cost of traditional Medicare; the taxpayers will benefit if there is reduced need for higher taxes to support traditional Medicare; and seniors who prefer Medicare Advantage over traditional Medicare will still have that highly popular option available to them. 

My new article is up...

At Answers.com:

"Deferred Compensation plans, also known as Salary Continuation plans, are used by businesses to reward and retain certain key employees while minimizing their current taxes."

Healthy Food News

It's been almost a year since our last Food Pyramid update, and there's some great news to share:

"Chocolate and red wine can help stave off diabetes: High levels of antioxidants can regulate blood glucose levels"

Turns out, the candy, booze and fruit diet provides a boatload of "flavenoids" - antioxidant compounds - that may help to regulate one's glucose levels.

Eat, drink and be healthy!

Another Sceptered Isle falsehood – this one from a Quango

From an article in the London Telegraph today, January 22,  “ . . . patients suffering from cancer and other serious illnesses are being denied the drugs they need from the NHS, according to a Quango report." Even though the treatments have been approved by the health service rationing body [“NICE”], the Quango finds that at least 14,000 patients a year are not receiving them.

So a long-established government-run medical care service ignores its official death panel by withholding medical services from citizens who have the most serious illnesses?  Alarming, is it not?

How can this happen?  Locally, it seems.  The Quango report continues “patients were being condemned to an early death because local NHS bodies were failing to fund drugs even though they had been proven to work.”

It's important to understand that less than one year ago, legal responsibility for managing most of the NHS budget was transferred to new local bodies, overseen by an NHS Commissioning Board  ". . . charged with ensuring [the local bodies] do not overspend their budgets."  To protect their budgets, it appears these local bodies decided not to spend money on expensive drugs for some of their sickest patients.  

As a sad result there will likely be more local bodies than just the new NHS bodies.

By the way, exactly who or what is a “Quango”?   It’s a quasi-autonomous non-governmental organization. Her Majesty’s government defines a Quango as a non-departmental public body that has a role in the processes of national government, but is not a government department or part of one.  This means a Quango is meant to operate more or less at arm's length from Ministerial control.  This particular Quango is the “Health and Social Care Information Centre”.

But now - let’s get real.  This story – like others before it and in fact any story critical of NHS that you might read from today until the end of time -  is false.  How do we know these stories are false?  Because Paul Krugman told us so, that’swhy.

So relax everyone.  Besides, neither the U.S. government nor one of the States would ever, ever do his kind of thing.

Cavalcade of Risk #200(!): Community Gratitude edition

Jeff Root hosts this week's milestone Cav, with another eclectic and interesting collection of risk-related posts. Come for the alarming news on first-day-on-the-job deaths, and stay for risks of marijuana laws.

And here's to the next 200 Cav's!

PS: We're still looking for Spring-time hosts - just drop us a line to sign up.

About that Convenience Item Mandate

What do trolley cars and birth control have in common?

Dr Jaan Sidorov, one of my favorite med-bloggers due primarily to his uncanny ability to cut through the chaff, has penned a remarkable post laying out the case of the Little Sisters of the Poor and their case against the ObamaTax birth control convenience item mandate. It is by far the most concise post I've seen on the topic, and lays out the case, the issues, and the implications in the context of the Trolley Car thought experiment:

"There is a runaway trolley barreling down the railway tracks. Ahead, on the tracks, there are five people tied up and unable to move. The trolley is headed straight for them."

Click on through to see why this is relevant.

Twisting the Cost Curve

One of my clients inadvertently let his pre-ACA health insurance plan lapse this past fall. Unfortunately, he didn't act quickly enough to get it reinstated.

So we've been looking at new ObamaTax plans, and he's in for rather a shock:

His "old' plan was a $2,500, 0% co-insurance HSA plan. That is, once he met his $2,500 annual deductible, covered expenses were paid at 100%. His monthly premium was just about $265.

Fast forward a couple months, and here are his choices: a $6,000 deductible, 0% co-insurance plan for about $400 a month; that is, a 240% increase in out-of-pocket along with a 150% premium increase.

Or:

If he'd like to get back down to somewhere close to his previous out-of-pocket max, he could choose the Gold option with its sexy and seductive $2,000 deductible (and no co-insurance) for the low, low monthly price of ... wait for it .... $647 a month, or 245% higher premiums.

Could be worse.

Obamacare data security - an awakening issue

It's said that the wolf who sleeps is still a wolf.  I think the issue of Obamacare data security is a big, bad wolf that has been sleeping but will soon awaken.   It won't be pretty.

From Powerline Blog, this today:

"Web security expert David Kennedy appeared before a House Committee this past week to testify on the security flaws of Healthcare.gov . . . According to Kennedy, site security is a joke."

An administration witness who appears in the clip embedded in the Powerline article claims that their own testing met "all industry standards" and was completed in a "stable environment".   (stable environment?  when did that happen?)

But then David Kennedy notes a half-dozen other independent security researchers who reviewed Kennedy's analysis and agree that Obamacare security is inadequate.  

It appears that, once again, the Obama administration may not be telling the truth, the whole truth, and nothing but the truth. This time the clever evasions are about the security of the systems that hold and process Americans' confidential financial and health information. 

Why would the administration be evasive about this?  So that an uninformed public would continue to enroll for Obamacare?  Say it ain't so, O!

Sadly, it is becoming more and more difficult to believe anything this administration says about Obamacare - or about many other things, for that matter.  

UPDATE:  Full clip of the Kennedy interview - about 9 minutes

SEIU Recycling Failed Ideas

Some ideas just never die no matter how many times they're tried and fail:

SEIU-United Healthcare Workers says its proposed measures represent the nation's most wide-ranging and aggressive ballot efforts to control hospital costs. They include one measure that would prohibit hospitals from charging more than 25 percent above the actual cost of providing patient care, and another that would bar the executives of not-for-profit hospitals from earning more than $450,000 a year.

Cost Plus use to be the predominant way insurance was administered and the basis of many provider reimbursement schemes. They all end the same way;

1. Massive Fraud inflating cost basis
2. Legal inflation of cost basis

It's nice to see the true problem with health care's cost getting discussed, but SEIUs blatant, opportunistic proposal should be called out for what it is.

Why would SEIU prefer this over other reference pricing schemes? It doesn't hinder the pay of their members. Hospitals can pay bloated salaries to employees or over-staff egregiously and actually be rewarded for it.

Looking still worse.

Following similar recent reports on the web - and a few even in the legacy media - WSJ reports this morning that "Early signals suggest the majority of the 2.2 million people who sought to enroll in private insurance through new marketplaces through Dec. 28 were previously covered elsewhere" [subscription required].

Credible estimates suggest two-thirds of the 2.2 million were previously covered elsewhere.

Could it be good news if there are too few newly-insured to create meaningful adverse selection?

But seriously it's bad news if so far only 10% of the administration projection of new enrollment has materialized.  (700,000 out of 7 million projected by March 31).  After considering the millions who lost their policies because Obamacare defined them as "substandard" the enrollment so far has not begun to reduce the number of uninsured.  

This administration is like the little kid trying to fix a mistake with a dirty eraser. The more he rubs, the worse his paper looks.

Your Tax Dollars at Work

Words truly fail. There are Six. Long. Painful. Hours of this:



[Hat Tip(?): Ace of Spades]

Cavalcade of Risk #200(!): Call for submissions

Jeff Root hosts next week's Cav. Entries are due by Monday (the 20th).

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.

HOSTING BLEG: We have open slots for March and April - Please consider hosting a Cav of your own. Just drop us a line here. Thanks!

Cat Plan and HSA Update [UPDATED]

[Please scroll down for update - Thanks!]

So it turned out that my prediction regarding the availability of Catastrophic plans to the over-30 crowd has been confirmed: of the 5 major carriers in this market (southwest Ohio), only 1 offers this option. Surprisingly (to me, anyway), that carrier is Golden Rule, er, United Health One. None of the others surveyed offer it.

On the one hand, 20% is still decent, but I think it's unlikely that any of the other carriers are going to be scrambling to get a piece of that action.

And while we're on the subject of high deductible plans, Bob pointed out, in comments to yesterday's same-sex couples' insurance woes post) that "Some HDHP (HSA qualified) plans use an aggregated deductible for family plans. As a family you must satisfy $12,000 in expenses before the carrier pays [aggregate model]. But if you split them into two separate plans the carrier will pay once you (as an individual) hit $6,000 [embedded model]."

This is a critical point of distinction, and I did a little digging this morning to see which plans offered which model. So far, it appears that all of our carriers are going the aggregate deductible route [incorrect: please see update below].

This is important because, as Bob noted, the aggregate model requires that the entire family's deductible (usually two or three times the individual) must be met before covered expenses are paid. To take the example of the folks in North Carolina, an aggregate deductible means that either one or both of them must have enough expenses to meet the $12,700 (Bronze plan) family deductible; with separate policies, one might easily satisfy the $6,350 individual deductible and be done with it.

One last note: only one of the carriers' brochures (Anthem) explicitly states this; I had to contact each of the others to find out. I think that's a bit disingenuous on the carriers' part.

UPDATE & CORRECTION (1/17/14): As it turns out, I was initially misinformed about one carrier's "take" on the embedded/aggregate issue and HSA's. Late yesterday afternoon, my Assurant rep called to let me know that his company's HSA-compliant plans do, in fact, use embedded deductibles. As noted above, this can be a very important factor when comparing plans, especially for couples.

Good to know, and Thanks to Assurant's William W. for the heads' up.

Hacktastic!

Yesterday, Bill posted about some of the travails facing Golden Staters trying to muddle through the Medi-Cal/Exchange labyrinth. The troubles don't stop there, however:

"Two months ago, L.A.-based security researcher Kristian Erik Hermansen was signing up for Obamacare via the Covered California site ... critics started calling the main federal Obamacare site a “hacker’s dream” ... Hermansen discovered a vulnerability that would allow someone to take over another person’s account on the California site"

While this is no surprise to anyone who's been paying attention, there's also am more sinister element at play here:

"Hermansen then spoke by phone to the lawyer and a chief security person. “They were not interested in talking about the security issues but about getting the video or any other online mention of the flaw taken down"

See, the problem isn't the wide-open portal, it's the folks trying to alert the folks who run it that there is, in fact, a problem. I'm reminded of a certain Middle East river.

More alarming still, though, is that that it's not just the state folks yelling "burn the witch:" now the FBI has warned Mr Hermansen to zip his lips. That'll sure make the problem go away.

The ObamaTax and Same-sex Spouses

FoIB Jeff M sends us this interesting story

"A Moore County couple claims Blue Cross Blue Shield of North Carolina canceled their coverage because the state doesn't 'recognize' same-sex marriage ... They were married in Washington, D.C. last October and signed up for with the state insurance exchange for family benefits and paid the premium"

Unfortunately for them, North Carolina doesn't recognize same-sex marriage, and Blue Cross abides by the laws of the states in which it's licensed to do business. So the "family" plan has been cancelled, but they are of course eligible to purchase two individual plans.

Although the couple is rather unhappy with the situation ("You just feel stuck, like to feel discriminated against"), one wonders if they've really thought this through:

For example, there is no real advantage to a plan which covers both of them: since it's just two people, there are two deductibles and two sets of co-insurance to satisfy, and there is no multi-life premium break. The only advantage might be the convenience of one bill and one policy number to deal with.

And I wonder if they're aware of the ObamaTax subsidy marriage penalty?

"Any married couple that earns more than 400 percent of the federal poverty level—that is $62,040—for a family of two earns too much for subsidies under Obamacare."

So depending on their incomes they may actually be better off with two different policies. Food for thought.

Health Wonk Review: The half a glass edition

David Williams hosts this week's eclectic roundup of health care policy and polity. Are you a glass half full or half empty sort of person (an engineer would observe that the glass is twice as big as it needs to be)? Well, David has you covered either way.

Medi-Cal? Really??? But...but...but...

I've had at least a half-dozen phone calls over the last week from people whose children ended up involuntary enrolled in Medi-Cal.  They weren't happy.   And, like the similar situation Henry posted recently, Medi-Cal bears an annoying resemblance to the Roach Motel...you can check in, but you can't check out.

The problem stems from different and very liberal qualification levels for children.  In this area, a typical family of four has to have a Modified Adjusted Gross Income (MAGI) of over $62,643 before the kids are allowed onto a regular insurance plan.   For the adults to qualify, the MAGI has to be below $32,499.  There are an awful lot of families sitting between the thresholds.

As far as I know, the only way around it is to go outside the exchange, forgo the Advance Premium Tax Credit (a.k.a. the revokable subsidy) and pay full freight for separate policies for the children.   I'm not sure, though, if having a mixture of policies inside a family - Exchange plans for the adults and Off-Exchange plans for the kids - impacts APTC eligibility for the adults.  Any other suggestions?

Household Size	MAGI Medi-Cal Threshold	MAGI Medi-Cal/CHIP Threshold
	138% Fed Poverty Lvl	266% Fed Poverty Lvl
1	$15,856	$30,563
2	$21,403	$41,256
3	$26,951	$51,949
4	$32,499	$62,643
5	$38.406	$73,336
6	$43,594	$84,029
7	$49,141	$94,722
8	$54,689	$105,415
Each Additional	$5,547	$10,693

Breaking: District Judge shoots down Halbig

We've been following this case, championed by Cato's Michael Cannon, for a long time. Briefly, the suit seeks to enforce the actual law [ed: how quaint] regarding which states' citizens are actually eligible for ObamaTax subsidies.

This afternoon, U.S. District Judge Paul Friedman said "nyet;" the plaintiffs plan to appeal.

We'll keep you posted on how that goes.

Another day, Another ObamaTax "Issue"

As we've previously noted, one of the major problems with the 404Care.gov site is that folks are being indiscriminately, and often incorrectly, shunted off to Medicaid. This is actually two problems:

First, if one is found to be eligible for Medicaid, even if one chooses not to actually enroll, one is barred from receiving any subsidy when purchasing an Exchange plan.

Second, and this is the more serious problem (as we'll see in a moment), is that many folks are being enrolled in Medicaid who a) aren't actually eligible and/or b) don't want to be enrolled in the first place. Here's why that's the more serious issue:

"...you cannot cancel this plan. You have been enrolled in a state Medicaid program. If you disagree, you must file an appeal with the state.”

Previously insured Carol Sauers made the mistake of signing up at the 404Care.gov site so that she could find what choices might be available for her family. Her (then-)current insurance was set to increase by up to 100% (Yikes!), so she thought it might be a good idea to check out her other options. And that proved to be a major error on her part:

"It took more than a dozen attempts to get an online application filled out ... Basically I had to start over each time from scratch." When she was finally able to do so, she was informed that she (and her family) might be eligible for Medicaid. She knew better (their income was too high), but by then it was too late: she was enrolled and that was that.

And thus began her incredible journey through the labyrinth of state and Federal bureaucracies, trying to find some one to help her get disenrolled, but to no avail.

One wonders how many other "Carol's" are out there now, languishing in Medicaid limbo.

Service with a smile...

Last week, at 11:55, I thought I'd try CoveredCA's on-line help...





12:24 PM

12:26 PM

12:43 PM

1:07 PM

1:54 PM

1:55 PM

Just a brief update...After waiting for another hour on the phone, I managed to talk to one of their internal customer service reps.  It took a while, but he managed to get my client switched from Anthem to Health Net.  I have to say that every interaction I've had with CoveredCA personnel has been good.  They're friendly, helpful and basically have bent over backwards to answer questions and get things fixed.  If the web site didn't have so many rough edges, their job would be a lot easier.  (Bumped to add some new information...)

On Death Panels, the ObamaTax, and the MVNHS©

From the annals of the Much Vaunted National Health System©, another glimpse into our own newly revised one:

"A grandmother has been ‘left to die’ by the NHS after being refused life-saving chemotherapy - because her cancer is not ‘exceptional’ enough."

Really? And what do our Cousins Across the Pond consider "exceptional" enough to be saved?

Here's a clue:

"Each case is considered on an individual basis and has to meet set criteria, which includes exceptional clinical circumstances"

Well, when you put it that way...

Mrs Stanton, the 69 year young grandmother of four doesn't fit whatever double-top secret criteria on which the MVNHS© has chosen to rely. She now faces the prospect of having to sell her house to pay for the £40,000 ($65,000+) treatment.

Perhaps she should have bought a Private Medical Insurance policy.

Back on track

We've been following the harrowing tale of California insurance agent Glenn Neasham for almost 2 years (our most recent report was this past October, when we learned that his conviction had been overturned.)

Today comes news that Mr Neasham's insurance license has been reinstated, and that he may once again ply his chosen trade.

Congratulations, Glenn!

My new article is up...

At Answers.com:

"The loss of a key employee can wreak havoc on a company's productivity, profitability and ability to stay in business. A life insurance policy on that key employee can guarantee that sufficient funds are available, in a timely manner, to help mitigate that loss."

If there's a particular insurance topic you'd like me to cover, please let me know.

¡Hola, 404Care!

One of the most (unintentionally?) humorous things I ever saw on TV was back in the 70's: The Streets of San Francisco paired an older, experienced detective (Karl Malden) with a younger partner (Michael Douglas). In one episode, they arrive at the storefront of a Latino business, only to see a sign on the door: "El Close-o." (Really!)

I was reminded of this by the news that the Spanish-language version of the train wreck website isn't any more well designed or implemented than the English one. In fact, well, it was apparently written by Adam Sandler:

"The site, CuidadoDeSalud.gov, launched more than two months late. A Web page with Spanish instructions linked users to an English form."

Not only that, but the translations themselves are straight out of 'Spanglish:'

"...the name of the site itself can literally be read "for the caution of health."

On second thought, that may actually be a case of truth in advertising.

Humana says "Ruh Roh"

Forbes' Avik Roy notes that Humana has expressed concern over the mix of business in its Exchange plans. Specifically, that young and/or healthy consumers are staying away from these plans in droves:

"Humana “now expects the risk mix of members enrolling through the health insurance exchanges to be more adverse than previously expected.”

That's worrisome for a number of reasons, not the least of which is the so-called "risk corridor," which is essentially a giant re-insurer or, in English, "thee and me." Briefly, if carriers suffer significant losses as a result of the Guaranteed Issue/No Pre-Ex Exclusion nature of the ObamaTax, you and I get to bail them out.

How lovely for them.

That Humana is signalling so early that this is already a probability does not bode well for those of us who actually pay taxes [ed:and, as Bob correctly notes in the comments, premiums].

My new article is up...

At Answers.com:

"Making informed and economically rational choices in planning for retirement income can be challenging. Using Pension Maximization to insure the greatest possible retirement income stream for both you and your surviving spouse can make it easier."

Barn Doors and Horses

Four months after the disastrous roll-out of the 404Care.gov site, Ms Shecantbeserious appears ready to cut ties with the rocket surgeons who developed and implemented it:

"The Obama administration has decided to jettison CGI Federal, the main IT contractor that was responsible for building the defect-ridden online health insurance marketplace and has been immersed in the work of repairing it"

That's the good news (for a certain value of "good"); the bad news is that the Feds managed to blow through almost $680 million in taxpayer funds in the first place.

It seems that, having apparently had a change of heart about using a Canadian company to build and run an American portal, Ms Shecantbeserious has chosen Accenture, "one of the world’s largest consulting firms, [with] extensive experience with computer systems on the state level, [including] California’s new health insurance exchange."

For real?

That Golden State Health Insurance Exchange?

Oy!

Cream, sugar and pediatric dental care

From FoIB Jeff M:

My new article is up...

At Answers.com:

"Partnership-complaint Long Term Care insurance plans can be a valuable tool in protecting one's hard-earned assets, while providing access to government-funded care."

Queen City Drama Update - Early '14 edition

Hard to believe, but we've now been tracking this story since 2011:

"Retired city of Cincinnati workers argued in court Tuesday that City Hall is obligated to provide them for the rest of their lives with an extremely generous health coverage plan"

Last year, the city's Solicitor reported that the Ohio Supreme Court was taking a pass on even hearing the case, so it seemed like that was the end of the story.

Turns out, not so much:

"The city of Cincinnati can change its medical benefits for retirees and those benefits are not considered “vested,” an Ohio appeals court has ruled ... the court has reconfirmed the city’s position that retiree medical benefits are not vested and are subject to change"

This appears to finally put the issue to rest, but this case seems to have more lives than a video game hero.

[Hat Tip: FoIB Holly R]

Cavalcade of Risk #199: New Year edition

Michael Stack presents this year's very first Cav, with posts from risky places for cancer treatment to medical child abuse (a term that's new to me). Do check it out, and Happy New Year!

Welcome to WallyWorld General!

Does your health care provider wear a stylish blue vest? No? Well maybe you should re-think your choices:

"[A] Washington Examiner comparison of the two health insurance programs found that Walmart's plan is more affordable and provides significantly better access to high-quality medical care than Obamacare."

Not only that, but it's cheaper than ObamaTax plans, "there are no income eligibility requirements," and unlike the ObamaTax, rates aren't tied to age. What's even better is that "[m]any top-rated Walmart hospitals — such as the Mayo and Cleveland clinics — are left out of most Obamacare exchange plans."

So: lower premiums, lower out-of-pocket (due to Walmart's Health Reimbursement Arrangements) and access to better hospitals and care centers. Could it get any better?

Why yes, yes it can:

"You will notice there are 9,837 doctors [under Obamacare]. But the larger [Walmart] network is 24,904 doctors."

Substantially better than twice as many under Sam Walton than Kathy Shecantbeserious. Sweet.

This makes sense, of course, when you consider what co-blogger (and Certified Medical Office Manager) Kelley observed two years ago:

"Wal-Mart will succeed because Medicine is a business. Back in 2009, I wrote that “physicians, like all technicians, understand the art of medicine, that is their training, and they are effective in their art. However, medical schools do not teach physicians how to relate to the enterprise of medicine or to the business of medicine.” Wal-Mart will succeed because they appreciate the patient and they can offer low prices"

Kelley was discussing health care but the principle holds: Walmart is a business and adheres to profitable business principles. One of those is providing value for dollars spent, whether for lawn furniture, dish soap, vacuum cleaners or insurance.

I wonder if they're hiring agents....

Budget Buster

Every business wants to plan for their future. Budgets, forecasts, sales projections, expenses, and hopefully profits. For a small insurance agency whose focus is on employee benefits this is a challenge. Especially with PPACA constantly changing.

After wages, health insurance is my second highest cost for employee compensation. We have two employees and this year I will pay $22,000 for a plan with an 87.1% actuarial value. We are very close to a Platinum plan but not close enough according to the law. Come next year I can't keep the plan that we like. Instead we must either purchase better benefits or reduce the benefits we currently offer. This means raising deductibles, copays, coinsurance, and out of pocket maximums. I don't want to offer a lesser plan, so I have been leaning towards the better insurance.

That all changed when I ran new premiums last week. Losing our plan is peanuts compared to the new premiums that we are going to see.

Because of the new rules Obamacare forces upon us I will see my rates go up in 2015 by a minimum of $16,000. Let me repeat that, starting next year my group rates will go up by a minimum of $16,000. All because of Obamacare.

According to the US Census Bureau (latest data - 2008) there are 5.3 million businesses with less than 20 employees. In total they have payroll for 21.5 million people. Many who offer health insurance to employees as a part of their compensation package will face the same dilemma that is highlighted above.

We haven't heard about it in the MSM yet. Just wait, though: before long small businesses will start getting these outrageously high renewals. For most they will see these renewals between September and November. Just in time for a reminder as to who voted for this law right before elections.

Called. It.

The mask slips:

"For-profit health insurance is on some level morally offensive ... I consider it a deceptively sneaky way to get the health care system both of us really want."

So says Noam Scheiber, senior editor at The New Republic. And what, exactly, do he and Mr Moore "want?"

Ah, glad you asked:

"In wonk terms, progressives are likely to get their beloved public option one way or another, and probably not too far in the future."

The "Public Option" is a euphemism for Single Payer, the obvious end-game for the ObamaTax from the get-go.

And how do we know this?

Well, our own Mike Feehan called it over 4 years ago:

"The administration still intends to control medical costs by ... a single payer mechanism"

Now if I could only convince him to get me those pesky winning lottery numbers...

[Hat Tip: FoIB Holly R]

The ObamaTax/Medicaid Shanda

I've been reading recently that a lot of folks trying to sign up for a plan at 404care.gov are being unceremoniously (and involuntarily) dumped onto Medicaid, and that it's well-nigh impossible to dis-enroll once that's happened. Turns out, that bug has now bitten the family of Sen Rand Paul (R-KY):

"At least one member of the Paul family is, though, albeit erroneously. The Kentucky senator held up the Medicaid card his son received through the Kentucky exchange. We didn’t try to get him Medicaid, I’m trying to pay for his insurance,” Paul said"

But at least that's just an isolated incident, right?

Um, no.

As our friend David Adams reports from The Bluegrass State:

"Since Kentucky started taking applications for ObamaCare and forcing most applicants into Medicaid, the Kentucky Health Benefit Exchange has been excluding disability payments from income used to determine Medicaid eligibility ... That means potentially thousands of applicants to Kentucky ObamaCare who were placed into Medicaid were put there erroneously."

Not to worry, though: the folks who run the Medicaid program have things well under control.

Right?

Well....

"The [North Carolina] state Department of Health and Human Services issued a written release saying that new Medicaid cards for nearly 49,000 children were mailed on Dec. 30 to the wrong people."

Top. Men.

It's Catastrophic

So it's 9:00 PM on Thursday, December 19th, and President Obama magnanimously announces that ACA-compliant Catastrophic ("Cat") plans, heretofore available only to those under age 30, will now be available to folks who can't be trusted 30-and-up. As I pointed out the next day:

"With roughly 84 hours left on the clock - and a weekend taking up most of that - carriers are supposed to price these plans for people aged, oh, 35 or 45 or 55. This, despite the fact that rates have already been reviewed and approved (or not) by the 58 different states' departments of insurance, which will now also have to review and approve (or not), these new rates."

Fast forward a couple weeks, and here's email from Aetna:

"The government recently announced Catastrophic Plan eligibility changes for members whose plans were cancelled with the implementation of the Affordable Care Act (ACA).  We want to update you on these changes and explain how we are modifying our Catastrophic Plan application process.

Previous to this modification, Catastrophic Plans were intended only for members under the age of 30.  With the government announcement, we are now offering two age categories for Catastrophic Plan eligibility.

1. Under 30 years old

2.30 years and older whose pre-ACA plan is not being renewed."

Co-blogger Pat and I have been discussing this, and have come up with some observations:

■ In checking the various quoting sites (and my own General Agent), there don't seem to be any actual rates for such plans. Which makes sense: as I noted last month, even if carriers wanted to sell these plans, they still have to price and file them with the 58 states' departments of insurance, and then feed these rates into their quoting engines (and that's just from the carriers' side: heaven only knows how 404care.gov will handle this).

■ The original announcement seemed to imply that anyone whose pre-ACA plan had been cancelled could buy one of the (allegedly) less expensive Cat plans. Sadly, this is not true: one must also file for, and be granted, a Hardship Exemption. This isn't quite as simple as it sounds. This 6-page form outlines the 14(!) different criteria under which one might qualify, including "You were homeless ... You had medical expenses you couldn’t pay in the last 24 months ... You received a notice saying that your current health insurance plan is being cancelled, and you consider the other plans available unaffordable."

And of course, it's not as if they'll simply take your word for it; no, most require additional documentation.

■ Once you've completed and submitted the form (via snail mail, phone, or the famously functional 404care.gov site), you then have to find a carrier in your geographic region that actually sells them. And good luck with that: thus far, there don't seem to be any carriers offering these plans to the 30+ crowd.

■ And speaking of which: why should they? Think about it from the carriers' perspective: as noted above, you have to price and file it, wait for approval, and then feed it into your quoting engine. And for what? The small group of folks who actually meet one of the criteria and might be interested in a quote? Uh-hunh. 

■ And about those quotes. Since there are no actual rates available for 30+ Cat plans, I ran numbers for a 27 year old. Here's the good news:

PPO Cat Plan w/$6350 deductible, then 100% (also: $40 PCP co-pays): $169/month
 

PPO Bronze HSA (!!) w/6000 deductible then 100% (but $6350 maximum out-of-pocket): $201/month

Not hateful, but not exactly bargain-basement, either.

As Pat pointed out, though, that's only part of the story:

"I wonder what they look like at different ages. Because of the age I can see carriers writing lower premiums based on the low likelihood of health risk [at younger ages]. Expanding the CAT plans to age 64 would have to change the entire Actuarial Value and rating process. CAT plans can lower the rates knowing that the risk pool will only comprise of 20-somethings who are in good health. Any unhealthy person under 30 will be better off with more robust coverage. Moving to offer these plans to a totally new demographic with the 3 to 1 premium factors for age will most definitely increase costs to policies for 20-30 year olds in order to cover the price point for a 61 year old."

Ooops. So much for that idea.

It's almost as if the folks in Capital City have no idea what they're doing.

My new article...

(the first this year!) is up at Answers.com:

"Variable annuities offer consumers looking for tax-advantaged growth the opportunity for more direct control over how quickly their assets can accumulate. On the other hand, they lack many of the guarantees available in traditional fixed annuities, so one needs to be very careful when choosing one of these plans."

And so it begins (well, continues)...

To the surprise of very few (and certainly no one who's been actively following the train-wreck), the ObamaTax has certainly lived up to its hype:

"Hospital staff in Northern Virginia are turning away sick people on a frigid Thursday morning because they can't determine whether their Obamacare insurance plans are in effect."

Given the last-minute shenanigans played by the Obamastration and its chief henchcritter, Ms Shecantbeserious, it would be a wonder if there weren't health care delivery "glitches." Remember, too, that the 404care.gov site makes it well-nigh impossible to either pay for coverage, or to confirm that it is, in fact, in effect.

[ed: nor can folks add newborns, add or delete spouses, or account for pretty much any life cycle event that would impact their plan]

But it's not just hospitals, and it's not just in NoVa:

"The new year brought relief to some Illinois patients newly insured under the nation’s health care law. Others still weren’t sure whether they were covered, despite their best efforts to navigate the often-balky new system."

That's out of Chicagoland, where "[p]aperwork problems almost delayed suburban Chicago resident Sheri Zajcew’s scheduled surgery." Fortunately, her surgeon decided to go ahead and operate anyway, on the theory that he can obtain post-authorization.

Here's the thing: you can't really do that. Prior authorization is a pretty serious thing, and there's a likelihood that the carrier will decline to retroactively grant it.

"Oh, but Henry, they're stuck, too, surely they'll understand and work with the surgeon and the patient (their insured)."

Maybe, maybe not. But gambling that the insurance carrier, already facing incredible pressure from stakeholders and the folks in Capital City, will suddenly decide to go wobbly on established process is, at best, dubious. Remember, this was a "scheduled," ie elective, procedure, not an emergency.

Still wanna bet on it?

Cavalcade of Risk #199: Call for submissions

Happy New Year! Mike Stack hosts next week's Cav. Entries are due by Monday (the 6th).

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.

But mostly losers...

This morning, Nate posted about "happy ObamaCare enrollee ... Allena Ruszkiewicz," who was able to procure a shiny new plan to cover her GHB the date rape drug narcolepsy med Xylem. While that's good news for Ms Ruszkiewicz, it pales in comparison to what's happened to "Karri Kinder, a mother of two from Auburn, Alabama" whose policy, contra the President's explicit promise, was cancelled, and whose son's ADHD prescription just became prohibitively more expensive:

"His medicine is a life saver for him and helps him function like a normal seven year old, without it he can’t focus, his grades slip and his mind literally goes back to the mind of a three or four year old. When he was first put on his medicine his reading went up 20 points and he went from writing one to two sentences to paragraphs, all in the course of a week. He is a straight A student and very bright, but without the proper medical care that could slip away from him."

And that's just the beginning of her family's nightmare.

I highly recommend clicking through and reading the whole article, but first, put down any sharp objects.

Winners or suckers?

One of the big problems with ObamaCare is that it doesn't really solve any problems as much as it either masks or nationalizes them. A great example out of NY:

"One happy ObamaCare enrollee is Allena Ruszkiewicz, 36, of Jackson Heights, Queens, who had been uninsured since July after quitting her job as a phlebotomist because she suffers from narcolepsy and other ailments.

Without benefits, she couldn’t afford the $5,000-a-month cost of the prescription drug Xylem to prevent daytime sleeping attacks.

Instead, Ruszkiewicz said, she relied on a home remedy of “Red Bull and really strong coffee, which really doesn’t work so well.”

Since signing up for a top-tier ObamaCare “platinum” plan, she’s paid the $462.69 monthly premium, and now feels like “a huge winner.”

The average price of this drug is actually closer to $8,000 a month, it increases around 7 times a year. What is really interesting about this very high cost drug; its a legal version of GHB, the date rape drug. Commonly made around the world in peoples' homes for a hundred dollars for a years worth. Jazz Pharmaceuticals had $0 R&D; they were awarded an exclusive right by our Federal Government to manufacture the otherwise illegal drug, Express Scripts has the exclusive right to distribute it. 

If you can buy the drug on the street for $10 a dose why is it selling for $263 a dose? Has ObamaCare really "solved" her problem or just perpetuated a major flaw? The OOP caps have actually increased the excessive profits companies like Jazz and Express Scripts make: Jazz used to write off  thousands of dollars a month in members' cost share, now (once the member hits the magic $6,350) insurance must pay them 100%.

Mark the Unhappy Liberal

Self employment has been good to my client Mark. He went from working for "the man" four years ago to building his own small business. Over those years times were tough for Mark and his family. Getting the business off the ground was tough and because of a prior medical condition Mark's wife was uninsurable. The good news was he was able to utilize COBRA and pay an "outrageous" premium of $798 per month for a $3000 single deductible CDHP plan. When it expired in 2011 the family was forced to make a decision. I had advised him with his COBRA decision and now he was calling again hoping to find cost savings and make sure that his wife had insurance.

The good news was we were able to insure the entire family and lower the deductible to $2500 single deductible. The new cost was $498. Mark and his family couldn't be happier. In their opinion it was all because of Obamacare. Fast forward to last month.

With an income of $95,000 per year and a plan that was no longer going to be available because it doesn't meet the law, I encouraged Mark and his family to take an early renewal option to avoid the high costs associated with community rating and new mandated benefits. His 2013 rate was $632 and an early renewal option would only increase the rates to $651. 

Against my advice he refused the early renewal. "You've been a great help but I believe in the Affordable Care Act. There is no way that the costs and subsidies will make me any worse off." So we went the other direction and started the process at goodluck.gov. Finally on December 20th we were able to get through the website and pick a plan. The results only shocked one of us.

Starting tomorrow he will have a new plan. It is with one of three insurance companies who are contracted with his wife's specialists but wasn't the lowest cost option. His benefit will be better with a $500 savings in his deductible and the family will get a subsidy estimated at $101 per month. 

The problem is the new premium. It will cost him $1142 per month and this includes his subsidy. $5892 per year more than if he had simply early renewed. Unfortunately for Mark and his family Obamacare didn't bring peace and joy this holiday season. Instead it left him with a big lump of coal.

One Step Forward(?), Two Steps Back

A not-so-Happy New Year for those of us for whom health insurance, and health care, are a priority:

"More than 4.7 million Americans had their health insurance canceled as a result of [the ObamaqTax] ... but [HHS Secretary Shecantbeserious] confirmed Tuesday that between federal and state exchanges, just 2 million Americans have signed up for (coverage)."

Not that this is a major surprise, mind you, just a reminder that the train-wreck continues to provide a lesson in how not to solve any supposed health insurance (or care) crisis.

But wait, it gets better worse:

"CNN's Jim Acosta asked Bataille if she could at least say with confidence that a "very high percentage" of those 2.1 million had paid."

Long time readers can already guess the answer....

"Bataille said, “We are confident that those consumers have selected a plan and know what the next steps are for them in terms of securing coverage.”

Which is a rather long-winded way of saying "no."

Par for the course.