Transjenner Insurance

Bruce Jenner may be the celebrity-du-jour of the transgender set, but he's certainly not the only member of it. While he and his extended family can most likely afford to pay for the procedure(s) out-of-pocket, most folks lack the requisite funds to do so.

And just how much does this process cost? Well:

"The total typical cost of a transition usually includes: expenses incurred in the year before surgery, during which hormone therapy, counseling and living full-time as the target sex are recommended; the cost of the surgery and follow-up care; and ongoing costs after the surgery, including hormone therapy for life and continued doctor visits."

All told, a successful (for certain values of "success") transition seems to run between $40,000 and $50,000. That's a lot of scratch for a non-celebrity, so to what other source might one turn for help?

If you thought "health insurance," give yourself a cigar (preferably a candy one: tobacco use results in higher insurance rates). Now, you may be thinking "Henry, I understood that health insurance covers only medically necessary procedures; how can this possibly fit that bill?"

And you'd be right again.

Sorta:

My initial reaction was "no way a health insurance policy covers this."

But then alert reader and FoIB Jeff M sent me this gem:

"Obamacare to cover majority of transgender woman's sex reassignment surgery costs ... with the help of Obamacare, Larson says she is looking at paying $5,000 out of pocket for the surgery."

Surely that can't be right: what carrier in its right mind would cover such a thing?

Turns out, more than a few: Aetna, Anthem Blue Cross Blue Shield, Cigna and several others cover the surgery (or surgeries), subject to a very specific definition of medical necessity. Interestingly, UHC generally doesn't.

And those plans that do offer coverage treat it the "same as any other illness;" that is, subject to deductibles and co-insurance, as well as any network pricing issues. So depending on what plan one has, out-of-pocket could be as little as a few thousand dollars. Reason #4,835 why premiums are skyrocketing.

Ah, what brave, new world.

BX in the Crosshairs

Surprised only that it took this long:

"Blue Cross and Blue Shield (BCBS), along with the Blue Cross Blue Shield Association, was sued across all states in a class action brought by two types of plaintiffs ... BCBS is able to buy services as a cartel and is not passing savings on to consumers."

This would be news, of course, only to those who haven't been following along, or who don't understand the true role of Blue Cross/Blue Shield (BX):

"In the insurance world, MFN (no, that's not an acronym for something dirty) means "Most Favored Nation," a term usually reserved for international trade agreements. In this case, it's an agreement between an insurer and a provider (or many providers) which grants the insurer exclusive and substantial discounts on medical services."

Back in Aught 10, we noted how BX had (seemingly) abused this status, but the sad truth is that they are the 800 pound gorilla in (virtually?) every market.

The challenge here is that as premiums increased, there was no concomitant rise in provider reimbursements. And in true vicious cycle fashion, these savings weren't then funneled back to the insureds.

Now, the lawsuit covers the period from 2000 to 2007, so it pre-dates the ObamaTax and thus MLR (Medical Loss Ratio) requirements. The fact that the case is still going forward is interesting, inasmuch as the underlying problem seems to have been resolved. Still, one supposes that those (allegedly) harmed by it deserve their day in court.

On the other hand, who do they think is going to actually pay should plaintiffs prevail?

It's official (Assurant waves buh-bye)

As we predicted a month-and-a-half ago, Assurant is saying adios to health insurance:

"Assurant Inc. said today it will exit the health insurance market and sell some small group business lines ... Assurant Health will cease sales of its individual major medical, small group fully insured and short-term medical health insurance policies on June 15 and will not participate in open enrollment under the Affordable Care Act for 2016."

No reason was given for this shocking development.

Just kidding!

It was The ObamaTax:

"Approximately half Assurant’s projected 2015 losses are attributable to a reduction in 2014 estimated recoveries from the ACA risk mitigation programs"

That would be the highly suspect touted Risk Corridors.

And what about the other half?

Well:

"The remainder reflects elevated claims on 2015 ACA policies."

Hey, remember that promise?

Front!

We first took a substantive look at (so-called) "Concierge Medicine" over 7 years ago, noting that "[p]rimary care physicians are battling to save their practices by looking at new ways to increase revenues ... a few have gone to concierge services."

So it was with some bemusement that I read this piece, sent to us by FoIB Jeff M, lauding a Tar Heel State physician purportedly at the forefront of this phenom:

"It turns out that a physician from North Carolina was one of the trailblazers who adopted early this type of practice. Dr. Brian Forrest is a family practitioner who owns and operates Access Healthcare Direct in Apex, NC."

His practice's website doesn't indicate when it was founded, but another article refers back to a 2009 "Cardiovascular Centers of Excellence" award, so I'll give him that mulligan.

More important, he recognizes that both political parties are heavily invested in "mak[ing] insurance-based medicine extraordinarily burdensome." We see this with HI-TECH and EHR regs, and the lowball reimbursements from Medicare and Medicaid, which also drive non-governmental providers' revenues (via insurance).

About 2½ years ago, we interviewed Dr Rob Lamberts, who at the time had just  set up his own version. He noted at the time that an overarching motivation was being able to walk away from the administrative costs and overhead of dealing with multiple carriers, each with their own rates and rules. This tracks very well with Dr Forrest's experience.

Of course, signing up with one of these practices doesn't obviate the need for some kind of catastrophic coverage: hospitals and oncologists don't use this model. Still, it seems to be a growing trend, and I think that may well be a good thing.

Yeah, about that promise...

You know, this one:



Sitting down?

Good, because this is shocking (not):

"Due to changes for 2015 requiring H S A deductibles be a minimum of $2600/$5200 for embedded deductible plans, plans E51, E52, and E1 with copays are no longer eligible as an H S A plan. These plans will be removed from the quoting tool around 6/12. We have added E58, E59, and E5 with copays to replace those plans." [ed: from Anthem email]

Got that? Folks who were perfectly happy with their existing Health Savings Account compliant plans have just been forcibly moved into new ones with different (perhaps unwanted/unneeded) "benefits."

[Hat Tip: FoIB Beth D]

Centennial State HIX Hiccups

The latest news from Colorado reinforces the fact that state-run Exchanges are no panacea, either (as if further confirmation was needed - Aloha!):

"Colorado’s health exchange board today approved a final budget for the next fiscal year that requires aggressive sales growth and higher fees, but still doesn’t bring in enough cash."

Shorter: we're losing money hand-over-fist, but we'll make up for it in volume.

A big part of the problem is that a disproportionate population of folks are being added to the Medicaid rolls, which bring in zero premium dollars, and exacerbate an already-overwhelmed health care delivery system.

But they certainly have their priorities in order:

"Kevin Patterson, the new interim CEO, pledged that his primary goal is to improve customer service"

Yeah, because that's the most pressing issue.

Top. Men.

Fellow insurance agent John Luhman notes that a key problem (aside from, you know, customer service) is that the Exchange itself is plagued with technical problems. In response, the rocket surgeons tasked with maintaining it claim that "that’s the case about 10 percent of the time and they are trying to build a better shared IT system with state Medicaid officials."

"10%" Sure, sure.

But the best quote comes from board member Davis Fansler, who said he’s "concerned about the projected losses. There’s a gap here (between revenue and expenses) no matter how we slice it ... We’re ultimately going to have to take a look at what some ancillary revenues might be."

No kidding. And what are these "ancillary" revenues of which he speaks?

Good question.

ObamaTax Breakage

There's an old saying in retail: You break it, you bought it. One most often encounters this in, for example, fine china shops. Notice, though, the construction: if you break it, then you buy it.

On the other hand, I've never understood why, since no Republican voted for (or supported) the ACA, they are in any way obligated to offer any alternative. And yet, the press (and even members of the party) insist that there's some kind of obligation to "replace" it with some other (no doubt cobbled together) plan.

This is akin to saying "well, a rival of yours broke it, now you must pay for it."

Rubbish.

And it appears that I'm not alone in this calculation:

"No Republicans voted for Obamacare, so it’s not their problem to fix."

So opines David Harsanyi, writing at the National Review. David's expertise in this area goes back a long time, which adds credibility (as if it's needed) to his argument:

"Most [Republicans], in fact, cautioned that passing the largest health-care reform in American history — written by one party, jammed through using reconciliation, and haphazardly implemented — could be problematic as not only an ideological matter but a practical one. Now they have to act?"

Spot on.

Of course, we don't call it The Stupid Party© without reason, so expect to see a spate of articles like this one (from Employee Benefit Advisor):

"House Republicans [have] introduced a plan to repeal the Affordable Care Act and replace key pieces of it with high-risk health pools and tax credits that benefit industry experts oppose, saying it would undermine the employer-sponsored health care system in place today."

Leaving for a moment the relative merits of such a plan (and I do, in fact, think it's worth consideration), there are a number of problems with the formulation:

First, as noted above, Republicans are not obligated to put forth any plan, let alone a "replacement" one. And second, why is it a given that "employer sponsored" health plans are the bee's knees? As we've previously blogged, employers don't tell us what groceries or house to buy: they pay us our wages and we're free to make our own choices. Why should health insurance be any different?

Clear as mud

(via Twitter) Well. This clears that up. The Obamastration has released some 750 pages of emails and other doc's on Herr Gruber's role in drafting the ObamaTax.

Here's a sample for your edification:

Thursday ObamaTax News (Oy)

■ First up, FoIB Jeff M tips us to this breaking news lie:

"Blue Cross and Blue Shield of North Carolina requested a 25.7 percent increase to premium rates ...  the N.C. Department of Insurance must approve the request ... apply only to ACA plans, meaning those purchased largely through the federally facilitated marketplace"

Why is this a lie? Because we were explicitly promised 3000% rate decreases.

Let's unpack this a bit farther: these plans affect only those bought On-Exchange, meaning that most (if not all) of them will be subsidized (why else risk the 404Care.gov security black hole?). Higher premiums mean higher subsidies, and thus higher taxes for the rest of us.

Gee, thanks!

On and, by the way?

In late-breaking "news," looks like most other Tar Heel State insureds will get to share in the joy noted above:

"Most state residents will see their health insurance costs rise next year under proposed pricing plans from insurers offering health coverage."

You're welcome!

■ Next up, Green Mountain State citizens may have dodged the aforementioned 404Care.gov bullet, but they'd be wrong:

"The online insurance marketplace that Vermont built to enroll people in private coverage under the law had extensive technical failures ...  even though its residents’ subsidies appear safe for now, Vermont stands as a cautionary tale."

As readers may recall, the current SCOTUS subsidy cases are about states (like North Carolina) that outsourced their marketplace efforts to the Feds. Since Vermont went the DIY route, their citizens' subsidies should be safe (for the nonce). Still, state leaders had hoped to springboard into single-payer, and now see those plans crumbling.

Gee, darn.

■ And finally (but by no means least): you know all those folks touting the recent "success" of Open Enrollment v2.0? You know, the one where they (allegedly) enrolled an additional 10 million suckers folks on ObamaPlans?

Well, aside from the fact that they repeatedly (and conveniently) fail to disclose how many of those folks had been previously insured and then lost their old plans, the results themselves are, in fact, a bitter disappointment:

"A little bit of math shows that sign-ups in 2015 came in 22% below the CBO's earlier forecast."

Ooops.

So it seems that - quelle surprise! - O'Care proponents not only moved the goalpoats, they also failed to score.

Oh well: lose some, lose some.

Health Wonk Review: Hello Summer!

Our good friend Louise Norris hosts this week's collection of interesting and thought-provoking posts on health care wonkery.

Come for Roy Poses fisking of the JEJM, stay for Jaan Siderow's excellent advice on planning for the future.

The Lighter Side of Health Care

Our own Kelley B has written about the new ICD-10 codes that providers use for billing purposes. Not everyone, though, is as up to speed as she is:

MVNHS© Doubles Down

It's been a while since we last checked in with Britain's Much Vaunted National Health System©, and it's, um ... heartening to see that they haven't lost their touch. On the one hand:

"Elderly people are being denied life-saving operations because of age discrimination within the [MVNHS©] ... New data reveal for the first time that across large areas of the country, almost no patients above the age of 75 are receiving surgery for breast cancer or routine operations"

Now, we were assured two years ago that the (infamous) Liverpool Pathway was no more. And yet, here we are:

"Last October, the Government introduced age discrimination laws which mean patients should not be denied procedures on grounds of age ... [but] Prof Norman Williams, said the scale of the differences was “extremely worrying,” raising suspicions that some parts of the NHS were operating covert blanket bans against procedures on age grounds."

That is, while the practice is technically illegal, it is at least tacitly  approved for use by the rocket surgeons who provide care to seasoned citizens. On the other hand, maybe seniors just need to pony up a bit of coin:

"Hospitals are letting patients jump NHS queues for knee and hip replacement surgery if they pay for the operations themselves."

Actually, this isn't exactly breaking any new ground. Early last year, we reported on the case of Grandma Stanton, an elderly subject of the Crown, who was denied life-saving chemo and was forced to sell her house to pay for it. She would probably have appreciated knowing that simply greasing the correct palms might have saved her home - and her life.

As it is, "[p]atients are being charged up to £14,000 for some procedures – almost treble the cost to the Health Service – leading to accusations that hospitals are ripping off the sick." So the Brit's do, in fact, have in place a tiered health care system favoring those with the cash to pay for that care. In fact, there's quite the little cottage industry amongst the various MVNHS© "trusts" (hospitals) to attract such patients:

"[M]ore than 40 trusts are promising patients they can have the ops in as little as a week – if they can afford it."

Seems like a promising candidate for GroupOn, no?

Monday Morning Spindle-clearing

In no particular order:

■ Our thoughts and prayers go out to the Biden family on the loss of Beau to brain cancer. The fight against this terrible disease is still on-going, but help may soon be on the way to save other families from experiencing this kind of loss:

"MD Anderson researchers identify protein with therapeutic potential for brain cancer ...  FGL2 protein is a crucial immune-suppressive factor in glioblastoma multiforme (GBM) cancer. As such, blocking FGL2 may promote GBM patients’ enhanced survival."

Still early days, but promising.

■ Courtesy of FoIB Holly R, we learn that "44% of Covered California customers report difficulty paying premiums." Of course, this must be a lie, since the President explicitly promised that rates would decrease by 3000%.

So there.

■ Regular readers know that part of that Medical Loss Ratios are a grab-bag of admin costs which carriers must use to determine whether or not they're paying out enough in claims. One controversial such expense has been agent compensation (fees and/or commissions). The Center for Consumer Information & Insurance Oversight (CCIIO) has recently clarified when that comp may not be excluded from carriers' MLR calculations (Spoiler Alert: pretty much always). Look for lower commissions and fewer agents (that's NOT a good thing, by the way).

The Flip Side of Halbig/King/Burntwell

The goal of The ObamaTax was to extend health insurance (and thus, presumably, health care) to the minority of Americans without it. It's been an article of faith that the subsidies are what will drive that goal. The Supreme Court has yet to rule on Halbig (etc), but that hasn't stopped the chattering class from opining on what a tragedy it will be if they strike down the government's (illegal) extension of subsidies to residents of states using the 404Care.gov Exchange.

But there's another side to this, one which has thus far gone unremarked: is there a potential upside to folks whose subsidies go away? Turns out, there likely is. In fact, the case for enforcing the law train-wreck as written is pretty strong:

"Nearly 8 million people currently enrolled in 37 states through the HealthCare.gov site would lose their health insurance [by] losing their subsidies. Premiums would spiral out of control as the only ones left in the exchanges would be the sickest and most expensive patients."

Okay, making the defendants' case, so what's that "flip-side?"

"[A] new report ... says that these critics are looking at only one side of the equation ... the claim [is] that 8 million will lose insurance assumes that everyone who loses subsidies in the federal exchange would cancel their health plans."

While it's likely that many - perhaps most - would, in fact, opt for the (toothless) penalty fine tax, it's by no means certain that all of these folks would bail. After all, as IBD points out, most of these folks were already paying for insurance before the ObamaTax. It seems reasonable, then, to presume that a good portion of them would suck it up and continue paying unsubsidized premiums.

But wait, there's more:

"[P]eople in [the affected] states would be eligible to enroll in low-cost catastrophic plans, something that they can't do now without also paying the individual mandate penalty."

This is key: many folks really just want/need catastrophic cover, without unnecessary (and expensive) bells-and-whistles.

As an aside, this would be a perfect opportunity to expand HSA eligibility to these types of plans. Hint, hint.

Perhaps the greatest benefit is the one least discussed:

"Getting rid of the subsidies has benefits, too: Namely, both the individual and employer mandates would get flushed away with them."

How's that, you ask?

Well, if getting rid of the subsidies renders coverage "unaffordable" (an ACA "term of art"), then the penalty no longer applies, thus saving consumers even more money. In fact, the "study finds that 11.1 million people will be free of the individual mandate, and more than a quarter million businesses will be liberated from the employer mandate" if the plaintiff prevails: "No subsidies, no mandate."

Four words I can get behind.

Oh, and the other upside?

That would be the north of 230,000 new jobs, plus higher pay for both full- and part-time workers.

So what's the rub?

Well, all of these goodies likely go away if the rocket surgeons in Congress decide to "fix" the ObamaTax instead of deleting it. What are the odds of that?

A Quarter Trillion here, A Quarter Trillion there...

And pretty soon, you're talking real dollars:

"Obamacare is set to add more than a quarter-of-a-trillion—that's trillion—dollars in extra insurance administrative costs to the U.S. health-care system"

Keep in mind, these costs will be borne by insureds; that is, carriers will simply increase premiums to cover them. Remember: companies don't pay taxes or premiums.

And at "a whopping 22.5 percent of the total estimated $2.76 trillion in all federal government spending for the Affordable Care Act," it's just one more example of the way that the ObamaTax continues to hurt the very folks it was ostensibly passed to help.

BONUS: The rocket surgeons that wrote the report itself continue to buy into the long-since-debunked idea that Medicare "has overhead of just 2 percent." They then use this faulty "data" to justify the move to single-payer.

Of course.

[Hat Tip: Co-Blogger Bob]

Unfortunate Client Timing

Got  a call this morning from the daughter of one of our agency's long-time clients. In addition to his auto and home, my long-since-retired colleague had written a life insurance policy for him. As the official "Life/Health guy," it fell to me to get the ball rolling on the claim, so I called the carrier's home office to get that started.

The first question I always ask is "is the policy in force?" That is, is it still active and thus able to be paid out. The answer is almost always "yes," and then I start asking about beneficiaries, face amounts and the like.

So I was a bit startled when the customer service rep said "no, that policy was cancelled at the insured's request."

Whoa.

In fact, the cancellation request came in almost exactly a year ago. Of course, unless he was being treated for a terminal illness at the time, it seems unlikely that the insured knew that this was, perhaps, premature. I have no idea why he cancelled the plan; perhaps he had adequate coverage with another agent, or it had grown unaffordable, or some other reason. All I know is that it's now my sad duty to let his daughter know that there's going to be no payout from that policy.

'Tis a shame.

Potentially Stupid Customer Tricks [UPDATED]

[First posted @ 5-26-15. Please scroll down for Update]

We first blogged on the insurance issues associated with ride-sharing services (eg Uber, Lyft) back in 2011:

"Seeing a business opportunity in millions of cars that sit idle at office parking lots or on weekends, several start-up companies have introduced "peer-to-peer" car-sharing services ... Likewise, renting out your car to someone you've never met (and will probably never even see!) is a dramatic change in the nature of your insurance policy's risk."

Fast forward 4 years, and despite the success of these ventures, and the swelling population of drivers and fares customers, many of the same issues remain. In fact, the very first sentence of this post contains an egregious error: it ain't "ride sharing," which sounds more like car-pooling than what Uber, Lyft, et all actually comprise, which is ride selling (and buying).

These transportation networking companies (TNCs) are, for purposes of insurance, pretty much taxi (or livery) services, and your personal auto policy isn't designed (or priced) to reflect that. The TNCs may offer some protection through a corporate liability policy, but that may apply only when a driver is actively engaged in transporting a customer.

And that's just one of the many insurance challenges facing both drivers and passengers:

■ How much coverage is actually available when the driver does have a fare?
■ How will your insurer react if you have a claim?
■ What happens if you don't tell your agent?

And more. Unsurprisingly, I tend to fall in the "better safe than sorry" camp.

[Hat Tip: P&C Guru Bill M]

UPDATE: Home Office friend of mine sent me this:

"Just saw your post. We've been discussing this issue (Uber, etc); currently our view is that there are 3 stages of Uber: 1) you are listed as available, 2) you accept a pickup request, and 3) you pick up the customer and take him/her to the destination. If an accident occurs during #1, there is coverage. If an accident happens during #3, no coverage. During #2, very grey area."

Thanks! Color me (still) skeptical, though: seems to me that stages 1 and 3 still make one a taxi/livery service (else why advertise "availability?"). But hey, I'm a simple unfrozen caveman lawyer life and health guy.

Life Partners back in the news

We first started blogging on this monumentally bad idea in 2010:

"So who really loses here?  [I]t would have to be the poor saps who bought into this idea, and forked over $50,000 (minimum!) to do so."

In 2012, we noted that "Life Partners Holdings, Inc. has been cleared of allegations by Texas state securities officials that it did not register life settlement transactions as securities under state law."

So, bullet dodged, right?

Not so fast there, pardner:

"The bankruptcy trustee for Life Partners Holdings Inc. is seeking to control the proceeds of life insurance policies held by its customers after his own investigation revealed a number of new ways he said the company committed fraud."

Yeah, the ol' shock meter seems busted right now.

And my 5 year old prediction seems pretty much confirmed:

"Artificially shortened life-expectancy figures supplied by the company convinced investors that their returns would be greater ... [LP] charged massive undisclosed fees and misrepresented the company’s business practices."

And the list goes on.

Look for this to get even messier, and we'll keep you posted.

Health Wonk Review at Julie's Place

HWR co-ordinator Julie Ferguson steps up to host this week's 'Review (your scheduled host, moi, is dealing with end-of-life issues with the canine member of our family).

Please drop by for some great insights.

Unalienable Insurance?

Via co-blogger Bob:

Dear HHS, Will You Share My ACA Success Story?

March 23, 2010 was an historic day for health insurance in America. It was on this day when we all rejoiced knowing that Obamacare was going to reduce the average premiums for a family of four by $2500. It was going to help small businesses find affordable options to offer employees. It was going to eliminate "junk" insurance policies. Employees were told that if they liked their plans they could keep them.

So how has this Obamacare thingy helped my small company:

• We have seen an overall decrease in benefits since 2010.
• From November 2010 to our current plan year premiums have increased 58.7%.
• If we would have been forced to an Obamacare compliant plan the increase would have been 116.7%

Numbers don’t lie. Click on the picture to see the real impact.

Blue Grass State HIX Blues

So this happened:

"[T]he Kentucky Health Cooperative, an ObamaCare creation funded initially by federal dollars and then bailed out with tens of millions of dollars more last year, is insolvent."

Ooops. And of course, the bureauweenies behind this massive #fail appear to be circling the wagons. Which is not unexpected, but a shame, nonetheless.

And why is it a shame, you ask?

Well:

"The Kentucky Hospital Association outlined its concerns in a report released Friday called “Code Blue,” saying payment cuts to hospitals are expected to reach nearly $7 billion through 2024. “Kentucky hospitals will lose more money under the Affordable Care Act than they gain in revenue from expanded coverage”

It's almost as if the system itself is imploding. The bigger question, of course, is whether this is by happenstance or design.

You be the judge.

Another 1,000 Words on O'Care

Courtesy FoIB Jeff M:

(Not So) Shocking O'Care news

Last week, we reported on the latest Volunteer State health insurance premium woes:

"BlueCross BlueShield of Tennessee has filed to increase its health insurance premiums for 2016 individual plans by 36 percent, on top of a 19 percent increase approved last year"

Never fear, though, 5 other states are next in line:

"[E]xchange insurers in six states where 2016 rate requests have already been filed are seeking to raise rates an average 18.6% next year."

That 36% hike in Tennessee was the high water mark this time 'round; Beaver State carriers are seeking a more modest 24% increase. Folks in Connecticut get a break, with average rates increasing just shy of 8%.

Now, there are some that would argue that this is to be expected, and can't be totally the fault of The ObamaTax.

These folks would be wrong, it is 100% attributable to the train-wreck:

Gender Bender Preventive Care

So, the kind folks at Ballard Spahr (a well-known benefits law firm) passed along info on the efforts by Our Betters in DC© to more stringently enforce the so-called Preventive Care requirements in ObamaPlans. There's the usual litany of "free" (cf: TAANSTAFL) items, and then this particular turn of phrase caught my eye:

"In applying preventive service recommendations that are sex-specific to particular individuals (for example, a transgender individual)"

Regular readers know that the exhaustive list of preventive care requirements contain exactly ZERO male-specific benefits. So here's a conundrum: folks undergoing female-to-male "transitioning" will be giving up valuable coverage, with no corresponding decrease in premium.

Is this fair?

When can we expect to see the first lawsuit?

Will there be popcorn?

Cover Cali sputtering

As Bob pointed out last month, The Golden State's health exchange (Covered California) continues to burn through tax-payer dollars at an alarming rate. That wouldn't necessarily be a bad thing if, say, they had something - anything, really - to show for it.

But alas:

"After using most of $1 billion in federal start-up money, California's Obamacare exchange is preparing to go on a diet"

And why is that?

Well, it's actually pretty simple:

"[A] reduced forecast calling for 2016 enrollment of fewer than 1.5 million people."

You'll recall, of course, that the primary purpose of The ObamaTax was to increase the roles of the insured. Adding insult to injury, that pesky first 'A' in PPACA continues to remain out of reach, even with subsidies:

"[H]ealth policy experts said that some uninsured folks still find health insurance unaffordable"

The problem, of course, is that folks who qualify for subsidies still find it difficult to come up with the scratch to cover mega out-of-pocket maximums, and that's when they're successful even finding a provider who takes ObamaPlans.

So, the state is tightening its metaphorical belt:

• Spend $58 million less compared with the current fiscal year, a 15% reduction.

• Devote the largest portion, $121.5 million, to outreach, sales and marketing. That's down 33% from the current year.

• Maintain the monthly $13.95 fee for each individual policyholder, which would raise $233.2 million in revenue.

I find #2 to be the most ludicrous: sell all you want, if folks can't afford what you're selling, well...

So, who's next?

Breaking: Silver State HIX Plot Thix

LifeHealthPro's Allison Bell tips us to this interesting news, thus far flying under the radar:

"The #Nevada exchange, @NVHealthLink, has canceled a meeting that was scheduled to take place tomorrow"

Last time we checked in, Nevada's Exchange was having trouble paying commissions on policies written through it by agents.

Was that a portent of things to come?

Your Genes vs Your Job

Every once in a while, the question of genetic testing in the workplace - and especially as relates to employer-based health insurance - rears its (ugly?) head.

We've covered this several times over the years; in fact, our very first year we reported that "40 percent of people already undergoing genetic testing are worried that participation might affect their future insurance coverage.”

At the time, this seemed kind of a stretch, inasmuch as health insurance companies were forbidden to use these results in their underwriting process (and since group insurance has been guaranteed issue for almost 20 years, it was moot to begin with).

On the other hand, you really can't be too careful, and so we got the Genetic Information Nondiscrimination Act of 2008 (GINA), "which prohibits genetic information discrimination in employment" (the law went into effect the following year). In fact, the law goes even further, in that it also forbids the use of this information as regards benefits (including insurance).

And yet:

"Big companies are considering blending genetic testing with coaching on nutrition and exercise to help workers lose weight and improve their health before serious conditions like diabetes or heart disease develop."

At first glance, this specific use seems to skirt the letter of the law, so it's probably "kosher."  As long as the results aren't used to, for example, determine premium contribution or subsidy levels (ie how much of the premium the employer pays*), this seems to be a legitimate use of the data.

Now, the efficacy of using the information in the manner being proposed may indeed be questionable:

"[E]mployee benefits experts have doubts that such a novel approach will gain momentum. It first has to conquer steep challenges like ... employer skepticism about its effectiveness."

That is, whether or not there's actual value there, and whether it's worth the cost of implementation (these tests aren't necessarily cheap, and one presumes that the employer will be footing the bill).

A potentially more serious concern arises as to who will have access to this information, and how secure it will be. But that's another post.

[*For illustrative purposes only; regular IB readers know that employers actually pay 0% of the premium]

ObamaCare Aloha

Here's co-blogger Bob almost exactly a year ago:

"Hawaii Medical Services Association posted losses of $30.1 million in the first quarter and said it recorded $46.1 million in fees related to Obamacare."

Fortunately, the success of O'Care has helped immensely...

Wait. What?

"The Hawaii Health Connector has prepared a contingency plan to shut down operations by Sept. 30 after lawmakers failed to pass legislation to keep the state's troubled Obamacare insurance exchange afloat."

Looks like ObamaCare #Fail from sea to shining sea.

Under the plan, Aloha State residents will be cut off from enrolling in new plans at the end of this week, and be completely shuttered by the end of next February (costing another 73 hard-working Americans their jobs). It appears that Island citizens will be transitioned to the 404Care.gov site for Open Enrollment Season v3.0 beginning this fall.

Chalk up another one to the Unaffordable "Care" Act.

MassCare unraveling

We've been covering the Massachusetts health insurance Connector since it was merely a gleam in Johnathan Gruber's eyes. So it comes as less than a surprise to us that it continues to implode under the new ObamaTax regime. Thanks to the intrepid Josh Archambault (senior fellow at the Foundation for Government Accountability), we learn that the noose is tightening. Turns out, Bay State Brahmins:

■ Failed to execute a contract with CGI, the vendor hired to build the site, that would track the progress of the project and ensure on-time delivery of a product that included all required features

■ Failed to implement a governance structure that would ensure ongoing quality of the project

[And worst of all:]

■ Attempted to conceal these shortcomings by misrepresenting the progress of the health insurance exchange to a number of stakeholders including the Centers for Medicare and Medicaid Services [among others]

Major no-no there. In fact, their behavior was so egregious that the Feds "have subpoenaed records related to the commonwealth’s ‘connector’ dating to 2010.”

In other words, this is now a criminal matter, with actual fines and (hopefully) jail time potentially on the table.

One wonders which of the other 57 states will be next...

Bob G on O'Care

Our good friend Bob Graboyes (senior research fellow for the Mercatus Center at George Mason University) has some key insights into the failed ObamaTax roll-out. Among them:

"Other than “more people with insurance,” the law’s goals were never clearly stated, so there are few objective metrics on which to judge it. More are insured, but there’s no increase in supply of health care to meet any new demand."

As our own Bob Vineyard pointed out some years ago, this is an utterly predictable result of inelasticity:

"The economics of goods and services can be reduced to simple demand and supply. Health care is no different. It follows economic theory just like every other consumer good.At either extreme you have inelastic price curves and elastic curves. Most consumer items track a bell curve but some things are totally elastic or totally inelastic."

That is, more people may have insurance (although this remains unproven), but the supply of actual health care remains steady (or is, in fact, falling). So how valuable is your ObamaPlan if you can't find a provider who accepts it?

Then there's the little problem of administering your plan if you're fortunate enough to be able to afford and are successful in actually buying one:

"[T]he back end is still dysfunctional. It’s very difficult for a consumer to conduct a transaction as you would with, say, Amazon.com, that results in verifiable coverage. Pen, paper, and processing time are still required"

And how does one track changes made this way?

There's lots more, all of it good, all of it important.

Read the whole thing.

Health Wonk Review - Grumpy Cat edition

Steve Anderson hosts this week's compendium of health care policy and polity, channeling negative vibes into positive outcomes.

Kudos!

ObamaCare ka-boom

As if we needed them, two more reasons why the ObamaTax is imploding. One we've already covered:

"Almost half of the insurance exchanges set up by states are struggling financially"

Again, this should surprise exactly no one.

But the Daily Caller article then posits an interesting possibility:

"[O]fficials are considering raising fees on insurers, asking the state for more money and working with other states to improve their exchange. Connecticut plans to sell advice and strategy to struggling states."

Given its history, seems like the only bit of Connecticut's advice of any value would be on how not to set up or run an Exchange.

But what's remarkable to me is how many folks still don't 'get' that insurers don't pay these fees, and that states don't have money: customers pay the fees, and tax-payers provide the funds.

So the only thing they're going to accomplish is higher premiums (so fewer folks buying or keeping plans) and raising taxes (same same). Where do they think all this money's coming from?

Oh yeah, us proles.

[Hat Tip: FoIB Holly R]

Three sides of a coin

When one considers insurance, the majority of claims are paid to 3rd parties. For example, life insurance proceeds are paid to one's beneficiary, auto claims to the body shop, medical claims to a doctor or hospital, and so on.

But three types of plans, all of which are fairly similar, actually pay benefits to the insured. These are  (in no particular order) critical illness (CI), long term care (LTCi), and disability insurance (DI).

We've blogged on LTCi many times (most recently here). Thanks to FoIB Sandy M, we learn that Fidelity (of investment fame) has produced "a pretty cool chart of US and various sorts of health care" including a very useful interactive map of how much long term care costs around the US.

We haven't blogged much on Critical Illness coverage, which is a shame, because these plans also pay the insured cash benefits for things like heart attacks and cancer. These plans can be particularly useful if one has a high deductible (HSA) plan or one of the newfangled ObamaPlans with sky high out-of-pocket exposures. By providing a quick injection of cash, these plans can mitigate a lot of financial pain.

Finally, the fine folks at the Council for Disability Awareness remind us that May is Disability Insurance Awareness Month. To that end, they're sharing the results of their 2014 consumer survey. Among the key findings:

• 57% of working adults report having no private disability insurance
• One third would consider buying disability insurance if they knew more about it
• 41% would consider buying it if it were less expensive, but perceptions about costs vary considerably

That last is important: many (most?) folks think disability coverage is unaffordable, but seldom check to confirm that by asking for a quote. So if you're one of the 57%, why not check with your employer about a short or long term disability  group plan or - better yet - ask your professional, independent agent for a quote.

You may be surprised by just how affordable coverage can be.

Assuring Clarification

We're not generally in the habit of carrying water for insurance companies, but last week's news about Assurant Health has engendered some confusion. Briefly, Assurant Health is (was?) a subsidiary of a larger company that also owns Assurant Employee Benefits (which sells group non-medical coverage, such as dental and disability).

Unlike its sister company, Assurant Employee Benefits continues to enjoy robust growth and financial stability. According to the carrier:

"Assurant Employee Benefits (AEB) is not exiting the benefits market ... By approaching the sale of Assurant Employee Benefits in this public manner, it allows for us a faster process.  The public announcement allows us to be transparent and control the process.  We expect to know within a few short months who our new parent company will be."

I've been fortunate to work with some great folks there over the years, and know them to be a solid company. Someday I'll have to tell you about my first death claim with them....

Who'da thunk it?

As Bob reported a week or so ago, the Golden State's health exchange is fast approaching room temp. But they're not alone:

"Nearly half of the 17 insurance marketplaces set up by the states and the District under [the ObamaTax] are struggling financially ... wrestling with surging costs, especially for balky technology and expensive customer call centers"

That's right: the much-touted call centers don't work, but we'll keep throwing money at them anyway.

Makes sense (if you're in DC).

On the other hand, even Ms Burntwell (et al) may have begun to see the value that professional agents bring to the party:

"The agency that runs the public exchange system in the HealthCare.gov states has given navigators, certified application counselors (CACs) and other nonprofit assisters a webinar on how to work with insurance agents and brokers."

Unlike these "counselors," agents must be vetted for prior criminal activity, licensed by their state, have strict continuing education requirements, and carry malpractice (Errors & Omissions) insurance.

Nice that DC finally got a clue.

On keeping your plan if you like it

By now, posts on "grandfathered" and "grandmothered" plans must seem like old news. And yet, the hits keep on comin'. In email from Medical Mutual of Ohio:

"“T" Plans Now Available on MyBrokerLink/Converting Grandfathered "S" Plans to New Grandfathered "T" Plans"

Clear as mud, no?

This is what happens when the government takes over the health insurance industry (and make no mistake, if you exercise control over a market segment, you own that segment). And so we get authentic frontier gibberish like the above.

Oh, what does it mean?

Basically, the Feds have graciously (and illegally) allowed insurers to make modest changes to grandfathered/grandmothered plans, which MMO will be implementing as they renew. This particular email targets small group plans. The change is ostensibly an effort to help hold down premiums; let's just say that I'm not holding my breath.

Covering Baltimore

As was the case in Ferguson last year, the riots in Baltimore over the past few days have caused widespread property damage, mostly to folks who had nothing to do with the proximate cause of them:

Homes, businesses and cars have been burned, looted and otherwise damaged, leaving owners wondering what, if any, insurance payments they can expect.

The Insurance Information Institute (III) has helpfully published a media advisory confirming that, generally speaking, such damage is considered a covered event, and claims will likely be honored:

"Auto, homeowners, and business insurance policies generally include coverage for property losses caused by riots and civil commotions, such as those occurring this week in Baltimore ... Standard business property insurance policies provide coverage for the structure of the building as well as the contents inside"

And for folks with Business Interruption coverage, "insurance reimburses losses when a covered peril forces a business to temporarily close its doors ... [and pays] employees and vendors, not to mention the rent and electric bills."

Whew!

As always, be sure to check with your own carrier to confirm whether or not these exposures are, in fact, covered.

Employer Sponsored Insurance: Behind the Little Tree is Obamacare's Forest

Obamacare was passed with a promise to reduce premiums, elevate the level of care we receive, and put an end to rising health care costs. It was also promised that everyone would have access to good insurance and that if we liked our plans we could keep them. These promises have gone empty, yet in the eye of public perception, the favorability/unfavorability of the law (according to the Kaiser Family Foundation Poll) is tracking close to even. However, the most important question that is asked, but not discussed, is what will lead to changes in views in the next few years.

For now, the favorable perception can be attributed to the fact that Obamacare is front loaded with warm and fuzzy feel good benefits. From "free" benefits like birth control and preventive visits, to the slacker rule - keeping your "kid" on insurance to age 26 - every provision of the law that has been implemented has a positive result.

On-the-other-hand, things that have a negative impact have been repealed, cancelled, delayed, or extended. We have had a repeal of the 1099's and CLASS Act, an offer to extend "transitional" policies (the lie that if you like your plan you can keep it), and numerous delays in employer reporting including a year long delay in the employer mandate. We also haven't felt the impact of "indexing" which will increase what people have to pay for premiums while reducing benefits.

In keeping with the "kick the can down the road" theme, two new pieces of legislation are gaining momentum. One is to repeal the Health Insurance Tax and the other - introduced today - is to eliminate the Cadillac Tax.

These taxes, reduced benefits, higher costs, and administrative burdens will increase over the next few years. Moreover, they will reach the employer sponsored markets impacting a much larger share of our population (roughly 55% of our population are covered by their employer). 

Which takes us to the most important question asked when discussing public views on Obamacare:

"Would you say the health care law has directly helped you and your family, directly hurt you and your family, or has it not had a direct impact?"

It's not who has been helped (19%) or hurt (22%) by the law. It's the significant majority of respondents - 56%!!! - who have felt no direct impact.

It's not a coincidence that the respondent percentage is almost identical to those with employer insurance. It shows that until Obamacare is fully implemented and a majority feels an impact, public opinion will see little change.

But until then, we will still be focused on the trees and completely be overlooking the forest.

Monday Afternoon Link Potpourri

Some interesting items for your consideration:

■ "Nearly a fifth of the National Football League settlement approved this week compensating former players with head injuries could go to their health insurers instead"

Briefly, the NFL settled a players-filed lawsuit asking for compensation for life-altering head injures. The problem is, most of the costs associated with treating those injuries were borne by the players' health insurers. Under the concept of subrogation (a common feature in health, auto and other indemnity-based insurance products), the players waived their rights to any amounts rewarded that could go towards reimbursing those carriers. It's not really "news" except that most people haven't read their policies, and are unfamiliar with the principle.

■ Next up, this helpful info courtesy of FoIB Jeff M:

"COBRA considerations when Medicare-eligible. Clients may not realize the need to combine them."

A lot of folks who've recently retired (voluntarily or otherwise) opt for COBRA continuation of their previous coverage, since that's often the path of least resistance. But that may, in fact, be disastrous:

"With rare exceptions, COBRA coverage is secondary to Medicare Parts A and B ... The result is that when Medicare-eligible individuals do not have Medicare Parts A or B, they are left to pay 80% of their costs out of their own pocket."

And that's not all:

"Medicare has a window of opportunity to enroll in Medicare Parts A and B that lasts eight months after leaving employment."

Miss that special enrollment opportunity and you're facing a lifetime of fines once you do manage to sign up, which could also be a while.

Good info here.

■ Finally, some news on the viatical front:

"In 2013, the top 15 life settlement providers paid more than $362 million for unwanted life insurance policies."

That "investment" was worth a potential $2.2 billion in death benefits. It's also a major (29%) increase over the previous year. But what's driving this thriving [ed: really?] market?

According to the article, it's a rebounding economy, with institutional investors looking for better returns. I'm not convinced: it seems to me that more and more middle class folks, still hurting in a reduced labor market, are looking for ways to raise capital quickly, and what better way than to sell off unwanted (or unaffordable) policies, raising quick cash and easing the budget?

From the Life Files

So about 30 years ago, my since-retired colleague wrote a policy on a 30 year old client (whom we'll call Gene). Gene's wife was named as the beneficiary, and all was well.

A few years - and two children - later, Gene and his wife divorced, and Gene changed the beneficiary of his policy to his brother.

Problem is, he never told his brother (or his kids) that he was doing so. Recently, Gene passed away, and his ex-wife called me to inquire about the policy. I called the home office and confirmed that a) he did, in fact, have a policy (and it was in force) and b) his brother was the beneficiary (again, news to all of us).

Fortunately, the brother lives relatively close by, and was in town attending to the funeral arrangements and such. I was able to connect with him, and we met yesterday to complete the claims paperwork (we're still awaiting the official death certificate, without which the claim can't be paid).

That's when I learned that not only did Gene never tell his brother about the policy, but that he died without a will (aka intestate for all you legal-beagles). The brother had no idea what Gene wanted to do with the proceeds of the policy (well, the balance after final expenses), nor of his house or other belongings. He's decided that he'll just divvy up the balance with his nieces once all the (modest) estate costs are settled.

This is just so sad: Gene died alone, and never made his wishes known to those that were (ostensibly) closest to him. I suppose there's a lesson here, somewhere, but danged if I know what it is. Any suggestions?

Health Wonk Review - Windy Spring edition

HWR co-founder Joe Paduda hosts this week's outstanding round-up of wonky blog posts, with an emphasis on the ACA. Come for Louise Norris on coverage gaps, stay for Dr Jaan Siderow's "pretty cool" moment.