MassCare© meets ObamaCare©: Travesty Ensues

It's generally accepted, "conventional" wisdom that RomneyCare© begat ObamaCare© (hence Bob's newest buzzword, ObamneyCare). Along with the (Evil) Individual Mandate, RomneyCare introduced other problems, many of which have (until now) flown under the radar.

Remember back during the original ObamaCare© "debate," when we first learned about the "Cornhustler" deal? Nebraska was vying for the very first ObamaWaiver©, wherein it would be exempted from onerous new Medicaid financing requirements. Well, that particular effort failed to pay off for the Cornhusker State, but over on the east coast, there's a new storm a-brewin':

"Sen. John Kerry inserted a provision into Obamacare that changed Medicare reimbursements for hospital pay ... The Globe reported that Massachusetts hospitals will rake in an extra $275 million a year from the change."

Or, more accurately: hospitals in most of the the other 57 states are on track to be screwed out of almost $300 million. Per year. How many indigents would this pay for? How many new doc's or nurses? How many MRI's?

This pretty much sums it up:

"It is a massive wealth transfer from the rest of the country to those seven states."

Pretty tasty ketchup, Sen Kerry.

Coming up short?

Maybe, maybe not:

We've written pretty extensively about Long Term care insurance (LTCi), but there's a new kid in town, goes by the name of Short Term Care insurance (STCi).

Issued by Banker's Life (#7 on the LTCi charts, and rising), it offers some interesting twists on the LTCi concept. For one thing, the maximum benefit amount available is $100, and there's no real "choice" in product design: there's a 30 day waiting (elimination) period and a maximum benefit period of 180 days My bad: the maximum daily benefit amount can be up to $200, and other elimination periods and benefit multipliers are available.

There's one inflation protection option (5% compound), and it's available as a facility-only or facility and home care plan.

Two things I really like about this design:

First, it's issued based on a "simplified underwriting" basis; that is, the application is fairly simple, with just a few "gatekeeper" questions. This makes it appealing for folks who may not qualify for a full-blown underwritten LTCi plan.

Second, it's a "pool" based plan. That is, once you settle on a plan, you're given a "pool" of money on which to draw, which makes it a little more flexible than it might appear at first blush.

Let's say you pick the $100 a day plan. That immediately gives you $18,000 worth of care dollars to play with. So let's say you're in a nursing home for 2 months (60 days), and the cost is actually $80 a day. Starting in the second month, Banker's would pay out $2,400 ($80 times 30 days), but you'd still have over $15,000 in your "bank."

Pretty cool.

Of course, it's not Partnership Compliant, but I'm of the opinion that, for folks looking at this kind of policy, that's not a major issue.

In any case, it's nice to see some outside-the-bun thinking.

Customer Service Carnivale - The Good Mix edition

We usually participate in only a few "carnivals" (CavRisk, of course, and Grand Rounds and Health Wonk Review). But I was so impressed with my recent experience with the Sirius radio folks that I submitted that post to the Customer Service Carnivale.

Little did I know that that submission would get top billing...

Just Like a Bad Penny

Health insurance scams seem to keep coming back. We have addressed the AIM Health plan on numerous occasions including this post where the plan was exposed.

You might think that was the end of it, but apparently not. We were recently contacted by an agent that sold the AIM Health plans who is looking for some advice on how to track down the promoters and hopefully get his clients claims paid.

A snowball has a better chance in Hell.

When you have been around long enough you can smell these scams a mile away. Henry and I were approached by the promoters of AIM a few years back. Wild promises were made and talk of riches for agents that sold these plans.

Henry checked with the OH DOI and I with the GA DOI.

In both cases we got similar responses.

The DOI had no knowledge of the plans, they were not filed (and consequently never approved) by the states of Ohio or Georgia and never would be.

In short, the folks selling these as "approved" plans were lying.

Been there, done that.

Employers Mutual was one of the biggest health "insurance" frauds in the last 10 years. Not the only one, but certainly one of the larger ones.

Eventually the folks who conspired to manufacture and promote Employers Mutual were tracked down and sent to prison. You can read the tale of woe here and here.

Obamacare has added to the confusion as some people believe 1) health insurance will be free, and 2) they can wait until they get sick and buy health insurance at that time.

Come 2014 some 18 million or so will indeed have free health insurance since they will qualify for Medicaid under relaxed rules but the rest of us will have to pay a premium that will be considerably higher than rates currently charged.

And unless things change, you will be able to wait until you get sick and buy health insurance but that is then, this is now.

Desperate people do desperate (and sometimes foolish) things. People who wanted to believe they could buy health insurance after they get sick and expect the plan to pay their bills forked over hard earned cash to buy plans like Employers Mutual, AIM and other frauds.

No doubt these type of scams will continue, especially after 2014 when some slick marketing organization will come up with a "health insurance exchange approved plan" that is half the rate of plans in the Exchange and folks will buy it.

Too bad the folks that push these plans don't wear a mask and carry a gun. If they did maybe fewer people would fall prey to the scam.

Grand Rounds, Rants and Whines edition

Dr Pullen hosts this week's interesting (despite the title) collection of medblog posts.

You Lied!

Remember “Under [our] plan, if you like your current health insurance, nothing changes, except your costs will go down by as much as $2,500 per year,” ? That was then, this is now. As Joe Wilson said, "you lied".

Cost of Health Care to Triple Under Obamacare

According Medicare actuary Richard Foster, implementing Obamacare will triple the cost of health care:

In 2014, the actuaries find that growth in the net cost of health insurance will increase by nearly 14 percent, compared to 3.5% if PPACA had never passed. The growth rate of private insurance costs will rise to 9.4 percent, from 5.0 percent under prior law: an 88% increase.

Say it ain't so!

You add new benefits such as "free" preventive care, "free immunizations", "free counseling for diabetes, smoking and weight loss, so what? Just because more people are seeking medical services that are perceived as free, what's the big deal?

Taking 18 million people who have limited access to health care and putting them on Medicaid surely won't increase the cost of health care.

And requiring insurance companies to issue policies to people AFTER they are sick or injured can't possibly increase the cost of health care.

And here is a bonus of Obamacrap.

For 2015–20, growth in private health insurance premiums is expected to slow somewhat and average 5.6 percent annually. Underlying this expectation is that some employers of low-wage workers will stop offering health coverage (and many of their employees will move to the exchange plans, while others move into Medicaid or become uninsured).

But what about the penalty tax employers must pay if they fail to follow the government rule and provide health insurance?

The penalty tax is much less expensive than paying premiums.

Regardless of whether the employer pays the penalty tax or pays health insurance premiums, the customers are the ones who will pay in the form of higher prices for goods and services.

Corporations Don't Pay Taxes

You see, Romney was right when he said "Corporations are people too".

Corporations don't pay taxes.

People pay taxes and those who buy goods and services from corporations that have to follow stupid government mandates are paying in the form of higher prices.

This isn't rocket surgery.

Movin' on up....

It is with deep-felt pride and pleasure that we are able now to announce that our own Kelley Beloff has accepted the position of Medical Office Manager for a much larger practice, in...wait for it...Tampa, Florida!

The good news for us is that she'll continue as a contributing member of the InsureBlog team; her new position, both professional and geographically, will give her even more opportunities and insights to share with us.

Mazel Tov, Kelley!

Why you need disability insurance...

Because you never know:

(Evil) Mandate Unconstitutional?

Maybe:

"A divided U.S. appeals court in Atlanta ruled Friday that a key provision of last year's federal health-care overhaul is unconstitutional, siding with a group of 26 states that challenged the law."

We last wrote about this particular case in June.

Of course, this is but one battle....

Free Health Care

Obamacare says "Bring us your tired, your poor, your illegal immigrants and we will give you care". Seriously. Washington is using OUR tax dollars to provide free health care to anyone regardless of citizenship or legal status.

Taxpayer Funded Health Care Centers Won't Check Immigration Status

According to CNS News:

“Health centers do not, as a matter of routine practice, ask about or collect data on citizenship or other matters not related to the treatment needs of the patients seeking health services at the center,” Andrews said.

Further, the grant recipients are required to serve "all residents" who walk through their doors.

“The Program’s authorizing statute does not affirmatively address immigration status,” said Andrews. “Rather, it simply states that health centers are required to provide primary health care to all residents of the health center's service area without regard for ability to pay.”

You are probably thinking, this isn't what we were told when Obamacrap was signed in to law.

You would be correct.

“The reforms I'm proposing would not apply to those who are here illegally,” Obama said then.

Of course that was then, this is now.

I suppose the part that does not apply to illegal immigrants is the requirement to buy health insurance.

But why buy health insurance when you can get treated for free?

Keeping Abreast of Cancer: Double-Standard edition

When we hear that someone has been diagnosed with breast cancer, our immediate reaction is most likely to be "oh, poor Sally, hope they caught it early."

But what if it wasn't "Sally," what if it was "Steve?"

Our first reaction in that case would probably be "hunh?!"

Sad to say, every year about 2,000 men are diagnosed with the dread disease, accounting for about 1% of all cases. But it is breast cancer, regardless of the sex of the victim.

Well, make that should be "regardless of the victim's sex."

Because, thanks to a tip from FoIB Patrick P, we learn that Raymond Johnson, a 26 year old with no health coverage, just found out two horrible things:

First, that he has breast cancer.

And second, that even though there's a special Medicaid program for breast cancer victims, he's not eligible. That's right, the obscenely mis-named "Breast and Cervical Cancer Prevention and Treatment Act" is available only to those without the Y chromosome.

And it gets worse:

New rules promulgated by HHS Secretary Shecantbeserious require regular health plans to cover:

■ Well-woman visits
■ Screening for gestational diabetes for all pregnant women
■ Human papillomavirus DNA testing for all women 30 years and older
■ Annual sexually transmitted infection counseling for all sexually active women
■ Annual counseling and screening for HIV for all sexually active women
■ FDA-approved contraception methods, sterilization procedures and contraceptive counseling
■ Breastfeeding support, supplies, and counseling, including costs for renting breastfeeding equipment
■ Domestic violence screening and counseling

But guess what?

There are no corresponding benefits for men. What about condom coverage? Or domestic violence screening for the estimated 835,000 male victims of domestic violence each year?

How come HIV screenings for men aren't covered?

Fair's fair.

Here's a Puzzler

You wake up one day with a growth in your nostril, big enough to interfere with your breathing and hinder your sense of smell. Most folks might not be too upset at the latter, but what if your job requires you to discern between varieties of wine?

So, you schedule an appointment with the local surgeon to have it removed. It's medically necessary (since it impedes breathing), so it's most likely covered by your medical plan, but you have a high deductible, HSA-style policy; you're responsible for the first $2,500, and the procedure, after in-network re-pricing, comes to only $1,200.

You understand that it's also a tax-deductible medical expense, but only if you itemize and it's part of a bunch of medical expenses that hit that magic 7.5% of Adjusted Gross Income.

Now here's the puzzler:

“Can I write this off as a business expense? After all, I need my nose for my job.”

This is pretty important: since you're generally pretty healthy, it's unlikely that you'll hit that 7.5% of AGI's worth of medical expenses.

The Fox News story on which this post is based offers several possible outcomes, but I've just added a twist that makes it a lot simpler.

See if you can spot it, and let's discuss in the comments...

Cavalcade of Risk #137: Headline Grabbers edition

Jason Shafrin presents this week's terrific collection of risk-related blogetry. Do stop by.

HOSTING BLEG: We're currently scheduling for Fall Cavs. Just drop us a line to claim yours.

CLASS Warfare

FoIB Avik Roy has some profound thoughts on the mis-named CLASS Act, and especially on a recent article in Foreign Affairs magazine by former Obamastration official Peter Orzag. In the FA piece, Mr Orzag acknowledges what we said some time ago, namely that:

"There is a serious risk that healthy people may be reluctant to join the program, whereas those who most need long-term care will be eager to do so, jeopardizing the idea of a broad and stable risk pool."

No kidding?

Avik then quotes, verbatim, Mr Orzag's proposed "solution:"

"[T]o make the purchase of such insurance mandatory or to require employers to provide it by default unless employees opt out."

Hmmm....a mandatory health insurance program. What a novel idea!

In response, Mr Orzag took Avik to task for...wait for it...quoting him verbatim:

"You (and Sen. Thune, for that matter) mischaracterize and misunderstand the sentences cited from my Foreign Affairs article. It was not that we should mandate CLASS. "

Seriously? You're going with that? Because that's precisely what you said, Mr Orzag. It's one thing to "walk back" what you said, but to deny it altogether?

I'm actually a bit disappointed that Avik let that go; frankly, Mr Orzag should be embarrassed by his own amateur attempt at spin.

What's worse, of course, is Mr Orzag's - and, by extension, this regime's - understanding of even basic insurance principles. Long Term Care insurance is a complicated product, but it's not rocket surgery. Folks like Mr O appear to be totally clueless as to how these risk management tools work, and for whom they're designed.

Let's start with some basics:

The LTCi market is, by definition, narrow and focused. That is, neither the very wealthy nor the poor need it. One of the most fundamental rules of the insurance business is that first there must be a need for the coverage.There's a specific, well-defined middle-class swath that most benefits from LTCi, and that's further diminished by the fact that it's not inexpensive coverage.

Perhaps the most important benefit of modern LTCi products is Partnership Compliance, which encourages folks to buy policies in order to stave off the Medicaid folks. But CLASS Act plans are not Partnership compliant, making them even less attractive and less valuable.

On the other hand, one must admire the chutzpah of Mr Orzag to suggest that purchasing these plans must be mandatory, with an optional opt-out mechanism. One can easily imagine the nature of that mechanism, by the way: how soon until we see HHS Secretary Shecantbeserious selling handing out CLASSWaivers©?

Mr Orzag and his ilk may protest all they wish, but it is past disingenuous to claim that he's not calling for a CLASS Act mandate.

Several years ago, my eldest misplaced her keys. She became increasingly frustrated as we tried to help her noodle out where she might have left them, until, finally, she bellowed "they're not lost - I just can't find them!"

Where are your keys, Mr Orzag?

Stupid Insurance Company Death Claim Tricks

Perhaps the most important part of my job is delivering death claims. This is never a "fun" experience, but it's very rewarding to hand a grieving widow or widower, or son or daughter, or business partner a check that will help ensure that the kids get to college, or the house is paid off, or the business will go on.

Although I almost always prefer to handle these personally, sometimes that's just not possible, and I'll let the carrier handle it for me. I expect my companies to handle the claim in a professional but kind manner, and to treat the beneficiary with the respect and dignity that he or she deserves.

And then there's these bozo's:

Sheesh.

[Hat Tip: Someecards]

Grand Rounds: Music Lovers edition

Dr Deb takes the term 'Rounds" pretty seriously - and it shows in the great job she does with this week's collection of great medblog posts.

Obamacare Sinks Ships

Five more health insurance companies become casualties in the Obamacare war on consumers. Aetna, Cigna, Guardian, American Community and Pekin will all leave the individual major medical market in the next few months. Together, these 5 insurance companies cover about 10% of those with individual health insurance in the state of Indiana.

As reported by the IBJ . . .

Their major complaint is about the new health law’s requirement that at least 80 percent of premiums be spent on medical bills. That new rule, known formally as a medical loss ratio or MLR, takes effect this year for all individual policies the insurers hold, not just new policies.

The insurers argue that the marketing and administrative expenses on individual policies are so high that they cannot transition so quickly to the new standard.

Even if they could make the change, policyholder services are already suffering due to downsized customer service departments. This means longer hold times and a greater chance of getting voice mail in lieu of a real person.

Many carriers have already shifted their customer service overseas to places like India and Pakistan where wages are lower.

Imposing loss ratio's on company's operating in a competitive market is stupid to say the least. If a carrier spends too much on themselves and it leads to an increase in premium rates they will lose market share.

The idiot's in DC look at pockets where market saturation is dominated by one or more carriers and claim this is proof positive that more regulation is needed. According to the report, Anthem Blue Cross has a 65% market share which politicians use to defend their position.

I look at the same thing and say they must be doing something right, delivering good value, or else their market share would be significantly less.

Golden Rule health insurance is number 2 in Indiana with 10% of the market.

If Blue Cross has 6.5x the market share of Golden Rule one must conclude that Blue delivers a better value than Golden Rule. Their pricing has nothing to do with how much, or how little, either carrier spends internally on administration.

So far Georgia is pretty much immune to the wholesale withdrawal by health insurance companies but our time is coming. I would not be surprised to see Aetna or Cigna pull out of Georgia before the end of the year.

MVNHS©: That does not compute!

Last time we looked at Electronic Medical Records (EMR), we noted that early-adopter Google had finally thrown in the towel. Now, that still left more than a few players in that market, but it (again) raised the question as to the viability, let alone the effectiveness, of this phenomenon.

Well, we need wait no longer:

"A plan to create the world's largest single civilian computer system linking all parts of the National Health Service is to be abandoned by the Government after running up billions of pounds in bills."

Ooopsies!

The premise behind this effort was a centralized data repository, administered (for lack of a better term) by the Much Vaunted National Health Service© itself. As is typical of nationalized health care "systems," of course, the whole effort cost, well, tonnes of pounds, with precious little (to be charitable about it) to show for it:

"The department has been unable to demonstrate what benefits have been delivered from the £2.7bn spent on the project so far," Margaret Hodge, chair of the PAC, said." [ed: PAC is The Commons Public Accounts Committee, which seems to be analogous to our own CBO]

So we have a bloated, inefficient bureaucracy which spends wads of taxpayer cash on a gargantuan and ill-conceived system, which is finally scrapped when it becomes blindingly obvious that it's an epic waste of resources.

Sound familiar?

More Swedish Meatball Medicine

Again and again we've documented the utter failure of the alternative medical schemes on which ObamaCare© has been modeled. Less than two months ago, we reported on how Swedish "medical authorities" dealt with a critically injured young girl:

"After sustaining an open chest wound of 10cm long while trimming her horse’s mane, Sweden’s emergency response services refused to send an ambulance, suggesting the 11-year-old girl take aspirin instead."

As if to prove their incompetence - or is it just lack of compassion? - these same "authorities" risk the life of a senior citizen:

"Rather than send an ambulance to respond to a call from an injured woman in Borlänge in central Sweden, emergency services operator SOS Alarm elected to call on an elderly couple living nearby to check on her instead."

In fact, the couple thus called upon couldn't even find the injured woman's apartment, wasting precious time.

But remember: nationalized medicine is so much more efficient, and compassionate, than our "broken" system.

We'll have a gay old time (Revisited)...

So this week's National Underwriter/Life & Health edition hits my desk, and the cover catches my attention:

"Born This Way: Could same-sex couples be the next big market opportunity?"

Okay, I'll bite (metaphorically speaking, of course).

Truth is, I've never really cared one way or the other about my clients' sexual orientation. On the few occasions that it's been brought up, it's always been the clients who do so. Off the top of my head, I can name just 2 cases where this information was discussed, and in neither case was it particularly relevant.

Still, the marketing possibilities are intriguing: if one takes the generally-accepted percentage of gay Americans as about 3%, well, that's a lot of potential clients. And with gay marriage a hot-button issue, and now legal in several states, that number seems to be growing.

In many regards, one supposes that gay couples (married or otherwise) face pretty much the same financial issues that their straight counterparts must address: life insurance and estate planning, retirement plans and health insurance. I've noticed for a while, for example, that most of the health insurance quote engines no longer automatically assume an "F" for the secondary when the primary is an "M." Of course, one presumes that two guys won't really worry too much about maternity coverage.

But where it gets really interesting is when we take a look at life insurance.

There are typically two ways that heterosexual couples buy life insurance: either two separate policies (with the other spouse as the beneficiary), or one policy with a primary and secondary insured. In the first case, John and Mary each buy a life insurance policy; John names Mary as his beneficiary, and Mary names John as hers. The second way would be for John to buy a life insurance policy, and then add Mary as a rider (of course, it could be the other way around, as well). The second way is typically less expensive (at least early on), but has some disadvantages (but that's another post). The point is, both methods are tried and true.

But let's suppose that instead of John and Mary, we're talking about Bruce and Tim. Traditionally, the only way that they could go the first route - naming each other as beneficiaries of separate policies - would have been as a business-related buy-sell agreement. There would have been no way for them to access the second method.

Now, though, with the onset of legalized gay marriage, the rules have changed, and it's not just in states which recognize them. I spoke with the underwriter at my primary life company, and asked how this would play out now in this Brave New World. Turns out, both the times and the opportunities have changed.

The key principle here is "insurable interest;" that is, whether or not one person would be financially harmed by the death of the other [ed: yes, this is an oversimplification, but it'll do]. Let's assume that Bruce and Tim live in a state that does not recognize same-sex marriage. Could they name each other as beneficiaries of their (separate) life insurance policies? Turns out, they probably can: the key is that insurable interest. If they can honestly claim to be life partners, or have bought a property together (for example), then the carrier is most likely going to issue those policies (assuming they pass underwriting).

In states that do recognize same-sex marriage, the second method becomes relevant, as well. My primary carrier no longer offers spouse riders at all, so I turned for help to the insurance department of a state which recognizes same-sex marriage. On condition of anonymity (really!), my source confirmed what I had already suspected: that state's law recognizes "marriage," period, and so a company which offered spousal riders to hetero-sexual married couples would have to extend the same courtesy to same-sex married couples.

Bob brought up another interesting point as regards this issue: the increased likelihood of running into an HIV-positive applicant. I'm side-stepping that issue for now, because it's really an underwriting question, not an insurable interest one.

Something else that the article failed to mention was long term care insurance: very often, these plans are written on married couples. Would a a healthy same-sex couple in, say, their 50's be declined? It would seem to be less and less likely, especially in same-sex marriage states.

So, is there really a great new untapped market out there? It seems logical that there is. Now, how to tap into that market is a whole 'nother question.