Insurance Dispatch...

In this week's 'Dispatch, I share my thoughts on the proposed HPV vaccine mandate.

For those IB readers who may be unfamiliar with the subject, check it out at Trusted.MD

BS Update

A couple of weeks ago, I expressed my doubts about mandated HPV vaccination. Among other things, I questioned the efficacy of such a program, as well as the wisdom of implementing it.

If anything, I may have underplayed the hand:

"A researcher who worked on a vaccine for the human papillomavirus is warning that it hasn't been tested on young girls, is "silly" for states to mandate the vaccination, and in a worst-case scenario could even increase cervical cancer rates."

Dartmouth professor Diane Harper actually worked on the study which formed the basis for the vaccine's approval, and notes that it was tested only on women aged 15 to 25. In fact, she believes that it's most helpful for those who are at least 18. It also appears that at least one member of the Centers for Disease Control's advisory committee on immunizations has reported that "while the vaccine may be helpful, it should not be mandatory."

What really brought it home for me, though is her assertion that "it's not been tested for effectiveness in younger girls, and administering the vaccine to girls as young as 9 may not even protect them at all. And, in the worst-case scenario, instead of serving to reduce the numbers of cervical cancers within 25 years, such a vaccination crusade actually could cause the numbers to go up." [NB: that link seems to work only sporadically]

She echoes my concern that we really don't know what the long-term effects of the vaccine will be. I generally try to err on the side of caution, which would initially seem to be "heck, go for the vaccine - after all, where's the harm?" But the risks here are great, and the downside is particularly troublesome.

It's nice to be validated.

Blues News You can Use...

Sometimes, a carrier can actually contribute something helpful to the on-going debate about health care and health insurance. For example, the Blue Cross Blue Shield Association has published its 2007 Medical Cost Reference Guide.

In it, you'll find some interesting (and enlightening) numbers:

■ In 2006, health care spending in the U.S. reached $2.2 trillion

■ The gummint continues to account for almost half the total costs, mostly through public programs like Medicare and Medicaid

■ Private health insurance accounts for about one-third of the total

■ About 2/3 of us are covered through commercial (private sector) insurance plans, mostly through our employers

There's lots more, if you're willing to dig a little.

Cavalcade of Risk #21 is up...

Rita Schwab hosts this stellar edition, with 32 excellent posts, in 7 "risky" categories.

We at IB have long argued that the cost of health care drives the cost of health insurance, and blogger biggie Arnold Kling's post really drives this home.

Grand Rounds...

Bertalan Meskó, blogging at ScienceRoll, hosts this weeks 'Rounds. Built around a Monthy Python theme (NOBODY expects the Monty Python Grand Rounds!), and rife with Python video, this remarkable effort (over 50 posts!) by a 4th year medical student is a lot of fun.

I've been meaning to link this for some time: You may recall our post on Baby Ashley, and especially the blogging efforts of Dream Mom. well, she's collaborated with a neonatal doc to produce a compelling blog mini-series about the travails of a newborn. Recommended.

GrannyScam Update

Regular IB readers may recall our story from last summer, wherein two elderly women bought insurance policies on the lives of homeless (and helpless) men, and then (allegedly) ruthlessly murdered them for the death benefits.

At the time, I was skeptical of the tale, because it seemed so far fetched (even in this day and age). Turns out, though, that truth is stranger than fiction:

"Checks and life insurance forms show that two women made millions from the deaths of two transient men they are accused of killing, a prosecutor said in a preliminary hearing Monday.

Helen Golay, 76, and Olga Rutterschmidt, 74, are accused of befriending the men, convincing them to sign the women's names on to their life insurance policies before drugging and running them over in secluded alleys."

Both women have pleaded "not guilty," and may soon face trial.

In an ironic twist, at least one of the issued policies was for accidental death only, and the insured (apparently) died of natural causes. The best laid plans...

Hoosier Health Care Provider?

Here at IB, one of our pet topics (and interests) is transparency in health care, about which we've written numerous times. Now comes word from Indiana that a group of Hoosier business-folks have glommed onto a new Federal initiative which seeks to offer more information about the quality of care offered by health care providers.

Under the guidance of HHS honcho Mike Leavitt, the US Department of Health and Human Services has launched an on-line project called Value-Driven Health Care (okay, so they're not so creative at names). The project's motto ("Transparency: Better Care Lower Cost") seems to sum up its mission nicely. At the website, consumers can learn about what transparency is all about (well, at least the gummint's take on it), and even find pilot programs that may help them in their search for quality health care with understandable prices.

Indiana Governor Mitch Daniels is a big fan, and recently signed an executive order agreeing to collect information on the quality of care provided to the state's 30,000 employees. The Indiana Health Information Exchange is touted by the HHS as a pilot project to initiate methods of reporting on quality of care. Presumably, this information will become available to the private sector, as well.

I've mentioned before that Transparency has been in its infancy...one supposes that it's now reached toddlerhood.

Carnival Monday...

The Carnival of Personal Finance is now up, hosted this week at The Sun's Financial Diary. Our host has accumulated 64 links, most with helpful commentary.

Our friend Jeffrey Strain, who blogs at Personal Finance Advice, has some tips on where not to hide your goodies.

And this week's Carnival of the Capitalists is available at Small Business Trends blog, where hostess Anita Campbell presents 28 interesting choices.

Nina at Queercents has an interesting post on "creative" marketing ideas. Something about the right hand, I believe.

P1K

Wow.

InsureBlog began life just a little over two years ago, and this marks our 1,000th post. One supposes that it would be appropriate to mention the latest on champagne and insurance, but alas, there seems to be a drought on the subject.

So I'll raise my own flute (metaphorically speaking) to my co-bloggers: Bob Vineyard, Bill Halper and Mike Feehan, and toast them for a job well done.

Here's to the next 1,000.

Insurance Dispatch...

This week's 'Dispatch covers a recent survey showing employers don't know how much they spend on disability benefits, and employees don't seem to care.

Check it out at Trusted.MD

Heads I win, Tails You Lose...

On the one hand, I'm used to seeing unlikely information coming out of the insurance industry, but this is kind of strange:

"U.S. individual life insurance sales rose 7 percent in new annualized premium in 2006, a pace unmatched since 2000, according to the quarterly survey by LIMRA International."

So who's (or what's) LIMRA, and why is this strange?

First things first:

LIMRA is the Life Insurance Marketing and Reseach Association (on whose Producer Panel I serve, along with thousands of my closest friends). They're kind of an industry-sponsored think-tank and research bureau. In a March 7, 2007 press release, LIMRA announced that the industry was breaking all kinds of production records. Well, not the industry so much as insurance agents.

Great!

Maybe.

The Medical Information Bureau (about which we've written before) has a somewhat different story:

"North American Application Activity for individually underwritten life insurance declined 7.4% in January year-over-year, according to the MIB Life Index. Applications were off 3.3% when compared to December 2006."

Seems like quite a disconnect. I say "seems" because it appears that while the LIMRA piece touts sales growth for the whole of 2006, the MIB report indicates things slowed down in January 2007, which is apparently typical. What's still troublesome, though, is that "(y)ear-to-year activity comparisons have been falling since March 2006."

Something to watch.

Cavalcade #21: Submissions Due

Submissions for next week's CoR, hosted by Rita Schwab, are due this coming Monday (the 12th).

You can submit your (or someone else's!) risk-related post via:

Blog Carnival

or

Email

Please include:

► Your blog's url

► Your post's url

► The trackback url (if applicable)

► A (brief) summary

PS We're scheduling hosts for Spring '07, so don't wait too long to sign up!

Health Wonk Review...WooHoo!

Joe Paduda hosts this week's HWR, and boy, it's a doozy! Along with almost a dozen and a half interesting, insightful and thought-provoking posts, Joe includes spicy commentary and analysis.

I just discovered attorney-blogger Eric Turkewitz recently, while hunting for interesting Cavalcade of Risk posts. His HWR entry on why doc's may want to think twice about promoting malpractice suits is a must-read.

And while not part of HWR, please check out this article at SoloGig News (a resource for freelancers). Our own Bob Vineyard is interviewed, and shares some tips for entrepreneurs looking for health insurance. Mazel Tov, Bob!

Health Care Reform or Something - Massachusetts Style

Bob's already commented on this developing story; here are some more details as reported by The Boston Globe on March 5th:

"Governor Deval Patrick yesterday unveiled significantly lower prices." How much lower? Look in the 10th paragraph “average monthly premium for residents of Eastern Massachusetts of $305. That indicates a decrease of nearly 20 percent in premiums from the earlier bids” (why is the good news always buried in the 10th paragraph?)

But averages can cover up a lotta things. For example:

1. The plans are age-rated. The least-expensive plan is offered by Neighborhood Health Plan (a Boston-area Medicaid insurer) and costs $175 a month - provided you are age 35-39. If you are over 56, the premium is $347 a month. Who will actually pay the "average" premium? Anyone?

2. The plans are geographically-rated. "coverage will be less expensive in Central Massachusetts compared with the eastern and western parts of the state."

3. The benefits are bare-bones at the lowest price points, even for the Boston Medicaid insurer. The plan "covers preventive care, office visits, hospitalization, and prescription drugs". Mandates? what mandates? More: "The annual deductible for the basic plan would be steep: $2,000 for an individual and $4,000 for a family" and "Similar plans from the three major health plans". Stripping the benefits sure does lower the premium, but isn’t that a tactic that only the greedy private insurance companies use? Yikes.

The Massachusetts plan is widely called "health care reform" but it looks and sounds to me like plain-old insurance, subsidized by the State. In other words, true to a grand Boston tradition, Gov. Romney "stuck a feather in his cap and called it macaroni". And now Gov Patrick is doing the same.

The Eye of the Storm

Time for another of our occasional forays into the dark and mysterious world of Property and Casualty insurance. Last week, Bob wrote about State Farm (et al) and the insurance market aftermath of Katrina.

NOLA wasn’t, of course, the only area affected by hurricanes in the past few years; Florida has certainly seen it’s fair share (or more) of the deadly storms. And, of course, the insurance market there isn’t exactly considered a rosy picture.

But one carrier is bucking the trend, and intends to begin writing business in the Sunshine State:

“As most big insurers are cutting back coverage in Florida and other coastal states after a string of catastrophic hurricanes, Mr. Buchmueller has started a company offering policies that hardly anyone else wants to sell — and at as little as half the going rates.”

His “hook” is that his company will only write homes that are worth at least a million dollars. Why?

Well, for one thing, the industry’s own statistics seem to show that such homes (especially newer ones) are better built, with features (such as special windows and shutters) that are, to coin a phrase, hurricane-resistant.

And although he hasn’t explicitly said so, it occurs to me that such homes will also generate larger than average premiums, as well as little “extra’s” like scheduled items (lots of jewelry and art), and excess liability umbrellas (insert your favorite “umbrella in a hurricane” joke here).

He’s also hedging his bets in another way: limiting the amount of business (number of homes) that he’ll write this year (his first), and using a lot of reinsurance to offload his own exposure.

[ed: Reinsurance is a mechanism insurers use to limit their own potential losses. They contract with insurance “wholesalers” for specific amounts, so that the policy is really insured by at least two entities]

If nothing else, I like the creative thinking that went into this kind of plan. As to whether or not it’ll work, well, there’s always the next hurricane season to test it out.

Grand Rounds...

Four time host GruntDoc (a first!) has put together a terrific collection of some 60 posts, and (TaDa!) no theme. There are however, interesting categories and helpful context.

And for those keeping score, Bob's up 2 to 1 (yes, my post made it in).

Here at IB, we often talk about the pitfalls of nationalized health care. An English physician, who lives that "dream," has some insights on how expectant mom's can anticipate being treated under such a system.

Carnival Monday (Yay!)

MapGirl hosts a terrific Carnival of Personal Finance this week. Built around a Circus theme, she's put together almost 60 high quality posts, in a half dozen clever categories.

What's more, she put Bob's post on the perils of mandatory coverage at the very top...WooHoo!

It will come as no surprise to regular IB readers that I found Wenchypoo's helpful (and unique) kitchen tips to be the Star of the Show.

The Carnival of the Capitalists is also up, at its new home: Bizosphere. CotC honcho Jay has "rebooted" this venerable financial potpourri, "to return to the root concept of showing off the best business and economics posts you might not otherwise see."

In this case, he's posted 19 entries (out of 34!), and we're pleased that Bob's post on the dangers of carriers being forced to pay claims that weren't really covered made the cut. (hmmm, looks like a two-fer for Bob, we'll see if I make the Grand Rounds Cut tomorrow).

In the event, I really lit up for this post at Photon Courier; it's an illuminating expose of light bulbs.

Insurance Dispatch...

This week's column asks "What’s the relationship between insurance and risk?" Even though you can buy wedding insurance, and cancer insurance, should you?

Check it out at Trusted.MD

Stupid Carrier Tricks # (What, 327?)

We’re a very small agency, in a little suburb of a modest-sized Midwest town, but we do provide health insurance for those of our employees who want (and/or need) it. For a number of reasons, we’ve stayed with the same carrier for more than a few years (NTTAWWT). Of course, we’ve changed configurations over those years; the most recent was selecting a slightly higher deductible and installing an HRA (Health Reimbursement Arrangement).

Our renewal came up recently, and we had to make some choices. On the one hand, we’re not dissatisfied with the coverage and overall service of this carrier (they’re no worse – and no better – than anyone else currently in this market), but the experience I’m about to relate certainly earns it a spot in our (not so) coveted Pantheon of Stupid Carriers:

Our current plan is no longer being offered, but was a fairly typical PPO. We had coupled it with the HRA. The carrier’s automatic renewal option (the plan we’d go on by default, unless we specified otherwise, and which we’ll call Option A) is attractive: a $2,000 deductible, then 100%. Office visits are on our own nickel, but count towards the deductible (something the present plan’s co-pays don’t do). There’s still a prescription drug (rx) card, but it would be subject to that $2,000 deductible, which is “non optimal.” On the other hand, the rate is some $700/month lower than a plan with benefits similar to our present one. That would enable us to bump up the HRA numbers to offset the increased out of pocket.

But the deductible/rx tie-in is a non-starter. So I asked if they had a plan that did everything this new one would, but with an rx card that’s “turned on” from the get-go (no deductible). Turns out they do (we’ll call it Option B), so I asked for a quote on that plan.

So far, so good.

So what’s so stupid?

Well, I get all the numbers, and see something very strange : for one thing, they included the numbers for the plan we don’t like (Option A), but the premium is now some $170/month lower than what my actual renewal, which I got from the carrier in the first place, says it costs. They also included the plan we did want (Option B; same as Option A, but the rx card has no deductible), and it’s even less! Now, I’m not usually one to look a gift horse in the mouth, but this is getting stupid: why would the “better” plan (Option B) cost less than the not-as-good one (Option A)? And why are the numbers for Option A now almost $200 a month less than what we were originally told?

But wait, there’s more! I noticed on the speadsheet the carrier sent that there were TWO versions of Option A (the plan we don’t like). They were absolutely identical in benefit structure, but had two different product numbers. Plus: one was almost $200 per month more than the other.

I’ve asked, and I gotten the following response from the carrier (BTW, I’ll give them credit: at least they did respond):

“Yes, the premium is typically higher on the [“better”] plans vs. the [“not as good”] due to the up-front [no deductible] drug card. I have seen a few cases come back where that is not the case but they are pretty rare.

Additionally the [two identical but for price plans] are priced differently primarily due to experience. The [one] series did not run as well as they anticipated which has caused them to receive a higher rate than the [other] series.”

Okay then.

I do this for a living, and am reasonably adept at it, and this blows even me over.

(Warning to those who will say “Well gee, Prof, all the more reason for a national plan, so we don’t have this kind of confusion.” Oh yeah? I’ve got three words for you: I. R. S.)

Across the Pond: Is the NHS "Buggy?"

I really shouldn't make fun of this [ed: but you're going to anyway, aren't you?], but this newest cost-cutting move by England's "much vaunted National Health Service" is too good to pass up:

"THE NHS could save a fortune, free up beds and prevent killer bug MRSA by treating wounds with MAGGOTS.

The larvae take only five days to clean a wound compared to 89 with more conventional treatments."

I'd heard of using leeches to "restore circulation in blocked blood veins," but this technique goes a step further; touted as a replacement for anti-biotics, these little bugs could save the government-run health system millions of pounds.

It may be only a matter of time before this medical breakthrough catches on over here. I suppose that means that Bob and I will have to stop referring to home office critters as "lousy maggots."