Grocery Insurance? [UPDATED]

One of my very favorite IB posts was actually an extended comment by Mike (writing under a pseudonym). Unfortunately, it's been lost in the mists of the intertubes [ed: see update below], here's a taste:

"[Mike] proposed a "national, single-grocer plan ... many people go hungry because wholesome groceries cost too much."

It appears that at least some Home Office Critters are fans of Mike's work, because we received this announcement via our friend Holly R:

"As one of the country’s largest health-insurance companies, Humana regularly has a say in where its members seek care. Now it wants sway over what groceries they buy. Humana announced a new partnership with Wal-Mart on Wednesday that will give the more than 1 million members of its wellness program, HumanaVitality, a 5 percent discount on healthy groceries."

On the one hand, this carrot-vs-stick approach is attractive, and it is voluntary. But does anyone else find it creepy that one's insurer is micro-managing our diet?

UPDATE: Thanks to Mike for providing us his original Single-Grocer proposal (available here).

Life and Death (but mostly death) and the MVNHS©

An acquaintance of ours is a paramedic who was recently diagnosed with cancer. Despite a weakened immune system and the effects of chemo, she continues to work as many days as she can. She's just that dedicated. We understand that this is not atypical - these are folks who really care and are committed to serving others.

Lucky for her, she's not subject (yet) to the vagaries of the Much Vaunted National Health System©:

"David Smith spent much of his working life as an ambulanceman, saving lives by administering basic first aid as patients were being rushed to their nearest hospital.

But when he suffered a heart attack and needed the urgent attention of the NHS himself, paramedics had to drive him to a hospital half an hour away ... because his local [Accident and Emergency facility] had closed."

His widow ascribes his death to the delay.

Now, that might seem a bit of a stretch - after all, how much difference could a 30 minute ambulance ride make? But here's "the rest of the story:" it took 37 minutes for the crew to arrive after her 999 [9-1-1] call. It seems pretty likely that 67 minutes, when someone's had a heart attack, is pretty egregious.

But of course, that's life (or death) under government-run healthcare - and what we have to look forward to as the ObamaTax is fully implemented.

Make cash off Medicare?

We are all aware, all of us but those running the program, of the rampant fraud in Medicare; most perpetrated by providers. I see a whole new type of fraud developing. It started with an increase in commercials advertising free no hassle products to those with Medicare.

"offering FREE diabetic supplies to Medicare and private insurance members"

then I started seeing another type of advertising;


"Thank you for visiting Dollars4DiabeticSupplies. We will continue to purchase your extra diabetic supplies in the future so please bookmark us and return to our site again. We value your diabetic supplies and time and we take our mission seriously."

So one company gives away free supplies to Medicare beneficiaries and another buys, for cash, excess supplies.....could there be a connection here?

This is in addition to the already serious problem of pill peddling. But we are expected to believe EMRs, MLR, and Exchanges will fix this whole cost problem.

EMRs save Cost Money

Besides the millions of people that work in these fields for a living who could have possibly seen this comming;

http://www.nytimes.com/2012/09/22/business/medicare-billing-rises-at-hospitals-with-electronic-records.html?_r=0

"When the federal government began providing billions of dollars in incentives to push hospitals and physicians to use electronic medical and billing records, the goal was not only to improve efficiency and patient safety, but also to reduce health care costs.

But, in reality, the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care."

EMRs make it very easy to bill, just like the increase in billing we saw with EDI, if it didn't cost a doctor anything to send the bill why not bill anyone, anything, for everything. We got far more junk claims when the cost to bill was pushed to us, we pay to receive EDI claims, from the provider, they get it free or a flat rate no matter how much they bill.

We are seeing the same thing with EMRs, it makes it easy to document and bill additional services rendered, upcode existing services, or bill for services never done. Instead of documenting tedious medical records now you cut and paste.

Every time the government promises us savings instead we get higher cost, then endless speeches on the failure of private markets to control cost. And those that think single payor or global billing(anything but FFS) would solve these problems;

"In e-mailed statements, representatives for both hospitals said the increases reflected more accurate billing for services. Faxton also said its patients required more care than in past years.

Over all, hospitals that received government incentives to adopt electronic records showed a 47 percent rise in Medicare payments at higher levels from 2006 to 2010, the latest year for which data are available, compared with a 32 percent rise in hospitals that have not received any government incentives, according to the analysis by The Times" 

Sicker and "more accurate" record keeping will do in any global pay scheme just as well as it does FFS.

A reasonable ADA ruling. Why does this seem so unusual?

The Americans with Disabilities Act (ADA) does not bar charging higher health plan premiums to employees who don't complete wellness screenings, the 11th US Circuit Court of Appeals has ruled. The 11^th Circuit Court is located in Atlanta and has jurisdiction in Alabama, Florida, and Georgia.  The parties are Bradley SEFF, Plaintiff–Appellant, v. BROWARD COUNTY, FLORIDA, a political subdivision of the State of Florida, Defendant–Appellee.

“The district court granted Broward's motion for summary judgment, finding the employee wellness program fell within the ADA's safe harbor provision for insurance plans. We [the 11th Circuit Court] affirm.”

I think it’s important that this finding was based on ADA’s “safe harbor”.  Wellness plan sponsors who charge more for persons who do not take part in health screenings must take care that those screenings meet the safe harbor test. If they do not, the plan may risk similar legal challenge.

FaceBook Insurance

Several years ago, we noted that social media-using British property owners faced the prospect of higher insurance premiums:

"Users of social networking websites could face higher insurance premiums because burglars are using them to 'shop' for victims' personal details."

Never let it be said that the British P&C insurance industry stands still for long (it's the homeland, after all, of LLoyd's of London). Understanding that those social media users also face an increased risk of identity theft and threats to their reputation from some of their more salacious fellow countrymen, at least one British insurance firm is breaking new ground:

"There can be real defamation of character when the trolls get geared up for war, and UK-based insurance company ALLOW has decided that people need protection."

The carrier has introduced a line of products to mitigate the damage done by "reputational damage, account jacking and other forms of ID theft."

At a cost of less than a latté a day a month (about $6.50), one can purchase virtual peace of mind, or whatever amount of such $16,000 of coverage will allow one to buy. They even offer a 30 day free trial - sweet.

The downside: so far, the coverage is available only to our Cousins Across the Pond©.

[Hat Tip: Ace of Spades]

Friday LinkFest

■ Turns out salt can actually be good for you:

"Simply soaking in a bath of salt water could ease the agony of arthritis."

And you don't need special, expensive, designer salt, either: even plain old table salt will do. Although it seems to me that kosher salt would give the best cure.

■ As we've long noted, the AARP has been working hard against its own members' best interests, so it's nice to see the WSJ picking up on this, as well:

"Thanks to just-released emails from the House Energy and Commerce Committee, we now know that AARP worked through 2009-10 ... to pass a health bill that slashes $716 billion from Medicare, strips seniors of choice, and sets the stage for rationing."

Told ya so. And shame on anyone who supports this organization.

■ The good folks at the Council for Disability Awareness tip us to this helpful tool that seeks to educate working Americans about the risks to their incomes from illness or injury. After all, they say, we all face the risk of disability, with way higher odds than most of us might imagine.

■ Need more proof of our longstanding assertion that health care costs drive health insurance costs?

Wish granted:

"Two of the most prestigious names in Southern California healthcare — Cedars-Sinai and UCLA — are getting shut out of a major insurance plan for being too expensive."

Anthem Blue Cross cut the two A-List facilities from its network roster to rein in overblown expenses. Bet that got someone's attention.

Blast from the Past

It appears that we have resolution to a case we posted about 5 years ago:

"(A) pulmonary specialist at Denver's National Jewish Medical and Research Center has written to federal agencies to say doctors there believe they have the first case of a consumer who developed lung disease from the fumes of microwaving popcorn several times a day for years."

According to the New York Daily News, (then 54 year old) Wayne Watson has just won a $7 million judgement in his case against several grocery stores and the popcorn manufacturer whose product he blames for respiratory problems. No word yet on whether that decision will be appealed.

But when we do find out, we'll let you know in a jiff.

MLR news

Regular readers know of our disdain for the Medical Loss Ratio (MLR) requirements in the ObamaTax plan. One of the reasons - although by no means the most egregious - is that the rules include agent compensation as part of the calculations. As we pointed out last year, "[b]y mandating a specific disbursement threshold, agents' commissions go away, making it impossible for us to continue servicing existing clients" who would then be subject to the "tender" mercies of the federal leviathon bureaucracy.

There may be good news on the horizon, however:

"Legislation that would exempt agent commissions from the medical loss ratio (MLR) calculation ... passed a House committee today."

That's the good news.  And then, of course, there's the bad:

"[G]iven that both the House and Senate will recess Friday until after the November election, final action is unlikely before late fall."

One step forward, two steps back.

The MVNHS© turns a blind eye

Quite literally:

"Thousands of elderly people are having to put up with deteriorating sight because they are denied cataract surgery"

When it's not giving boob jobs to teenaged girls, the Much Vaunted National Health Service© is determined to make sure that its senior victims beneficiaries are denied necessary cataract surgery. It's a simple case of supply and demand, of course: You can't have it.

What's ironic is that the procedure is both effective and (relatively) inexpensive. And, of course, this is the same kind of rationing we have to look forward to here under the ObamaTax plan.

Sooner or later

Cato's Michael Cannon may count another ObamaTax Exchange scalp:

"Based on arguments we present in that article [ed: link here], Oklahoma’s attorney general today amended that state’s dormant ObamaCare lawsuit to add a complaint challenging the IRS rule on the grounds that it unlawfully taxes Oklahoma employers and deprives the state of its sovereignty."

Turns out, the new rules affect over a quarter of a million Sooners, each of whom may have their own legal "standing" in such a suit.

In a follow-up email, Michael provides some additional relevant links:

■ The Oklahoma AG’s amended complaint (plus additional related info)

■ An article from the Tulsa World about the lawsuit

Thanks, Michael!

B&B Insurance News

While the subject is a bit outside our wheelhouse (my new favorite expression), we're big fans of the Bed & Breakfast phenomenon. As regular readers know, we're not P&C agents, so we often turn to our on-call P&C guru, Bill M. As it turns out, we're not the only ones.

In this month's issue of National Underwriter:

[click picture to embiggen]

Kudos, Bill!

Cavacade of Risk #166: Now online

Jeff Rose makes his CavRisk hosting debut with a terrific round-up of great risk-related posts. He helpfully includes a summary for each one, too.

Exchange already hacked

"With the news that the Utah health exchange -- one of just two state-run online insurance marketplaces in operation -- was recently hacked, states planning their own exchanges as prompted by the Affordable Care Act (ACA) might want to take a closer look at how they’ll handle cybersecurity."

Private firms, like your insurance broker, fear allowing this to happen as it can put them out of business. The notification requirements of a potential break-in alone could bankrupt someone, let alone paying any damages.  When the government is careless and gives away a few million peoples' personal info, no big deal, they usually can't be sued and even if they are its not their money.

A notoriously careless entity holding personal and sensitive info on 300 million people, what could possibly go wrong. Wiki Leaks Health Edition? 

Keeping abreast of the MVNHS©

So how is this medically necessary?

"More than 250 girls aged 16 and under have had breast enlargements paid for by the NHS ... Across all age groups, more than 3,000 women had augmentation surgery last year"

And will the Much Vaunted National Health Service© also pay for breast reduction surgery when these women have back problems later in life?

A Protection Racket By Any Other Name

In order to afford to offer health insurance a number of my clients audit their hospital bills to make sure the charges are reasonable and undelivered services are not slipped in. As most PPO contracts are a percentage off billed charges that starting number is very important.

Following is part of a letter we received from a hospital's attorney last week;

"Hospital personnel were in communication with your office and were told that you needed the itemized bill. I question whether you are entitled to receive an itemized bill, given the fact that this claim should be repriced through the XXX PPO (not it`s real name), which presumably has a contract with either your company or the plan, and I believe that the contract would preclude your request."

Few key points here, this presents employers with two choices;

1. Either don't employ a PPO and subject your plan and members to 100% of hospitals` billed charges, remember these are charges no one actually pays because they are so high, discounts run up to 80%+ off these artificial charges; or

 2. Employ a PPO and forfeit all rights to review or question the bill.

Keep in mind how one sided PPO agreements are, a plan is purchasing a discount but they have no idea what that discount is off of. A 5% discount on a $2,000 bill is better then a 50% discount on a $20,000 bill (20K is an actual claim we received for what should have been a 2K colonoscopy, even with a 50% discount hospital was still trying to collect 10K for a 2K procedure).

If someone in almost any other field tried what this attorney is they would be brought up on extortion charges. The good news is it might not be long till he is;

State of California, ex rel Rockville Recovery Associates, Ltd. v. Multiplan, Inc., et al.

 In summary, the memorandum describes fraudulent billing practices perpetrated by hospitals and other healthcare facilities, whereby these billing entities routinely submitted invoices for services that were not performed, were already paid for as part of other claims, or were simply inexcusably excessive. The memorandum identifies these practices as fraudulent, and the plaintiffs seek to pursue legal action against the billing parties.

In addition to these predatory billing practices, the memorandum goes on to accuse the applicable PPO network of aiding and abetting these fraudulent billing practices. Indeed, the network contract that bound the benefit plan in this matter, prohibited the plan from auditing the claims in question, and precluded the payer from examining the claims for inappropriate, excluded, and/or excessive charges. This is likely a scenario with which you are already familiar.

Rosh HaShannah 5773

These yeshiva students from Jerusalem know that life goes in one direction:



To all of our readers, may you be inscribed in the Book of Life, and may the new year be one of joy, health and happiness for you.

About Pre-ex

Finally, a breath of fresh air regarding pre-existing conditions:

"The emphasis on pre-existing conditions is aimed at creating the false impression that the only way to cover anyone who might become seriously ill is with ObamaCare’s heavy-handed and government-centric requirements."

Quite so.

In health insurance parlance, a pre-existing condition (or "px") is generally defined as an illness or injury for which medical advice, diagnosis care or treatment was recommended or received in the 6 months or year preceding the proposed effective date. This is, of necessity, a rather broad definition, but the point is that it's not an insurmountable obstacle to coverage.

HIPAA pretty much did away with that problem when dealing with group (employer-based) coverage: once you'd been insured for at least a year, going from group to group (or even individual to group) meant that you'd be covered right away.

The real problem is in the individual market. Those HIPAA provisions didn't apply to individually underwritten plans, and companies could exclude conditions or people from coverage. Until ObamaCare, the options were so-called "HIPAA plans" (one of the very few individual marketplace reforms in that legislation) and state-based high risk pools.

As Bob's noted, the PCIP program was about the only bright spot in ObamaCare, and even that was hobbled by the stupid requirement that one go "bare" for 6 months.

What's needed is a simple, and ultimately fair, system that recognizes the problem, and applies the group rule to the individual market: once you've been insured for a year, you can "jump ship" to a new plan which would have to cover any (disclosed) px.

Regular readers will notice the problem: isn't that, then, "guaranteed issue?" Not necessarily: some carriers have already long since done away with exclusions and riders, making underwriting more of a binary decision. Coverage is either offered (generally with a higher than quoted premium), or not. I can tell you from experience that far more folks are accepted than declined, which brings us back to PCIP: the current iteration requires not just that one has been turned down, but that one has been uninsured for a half a year. How big a deal would it be to simply swap out that requirement with one that waives coverage for the pre-existing condition for the first 6 months of coverage?

Is this a "perfect" solution? Of course not, but it brings the (perceived) problem down to a manageable size. The linked article goes into some detail about how to "smooth out" some of the wrinkles, especially as regards premium subsidies, and is well worth the read.

I should add: The point of the 6-month wait for px (in the PCIP plan) is that it discourages folks who wait until they're sick to actually, you know, buy the insurance. Beats the heck out of a mandate tax penalty fine.

LifeBridge at 10

Today's episode of Life Insurance Awareness Month is pretty cool: the 10th anniversary of MassMutual's LifeBridge program.

Longtime readers may recall our 2006 post celebrating the program's 4th anniversary; the folks at MassMutual reached out to us to bring us up to date as it reaches the decade mark.

We're joined today by Nick Fyntrilakis, Vice President of MassMutual's Community Responsibility department.

InsureBlog: Nick, what can you tell us about the MassMutual Community Responsibility department?

Nick Fyntrilakis: Many carriers have Community Affairs or Relations departments, we chose "Responsibility" to reflect our core values, a commitment to our communities. It just seems more appropriate. We run MassMutual's charitable giving and philanthropic activities - in fact, MassMutual donates over $7 million to these causes, including scholarships, grants and the like. I should point out, though, that this does not include the money we budget for the LifeBridge program, that's over and above.

IB: As we understand the program, LifeBridge provides free life insurance to struggling families. How does it work?

NF: MassMututal issues a $50,000 policy [ed: 10 year term chassis], payable to a trust for the benefit of one's progeny. If tragedy strikes, the funds can be used for tuition, books, even room and board.

Parents must be aged 19 to 42, a permanent, legal US resident with an annual income of no more than $40,000, and must pass underwriting. That last could be a problem for folks with Type I Diabetes or HIV, for example.

The process itself is pretty simple: there's an eligibility form and an application, and some financial info is also required (to confirm eligibility). [Full details are available here]

IB:. How many LifeBridge policies has MassMutual issued over the past 10 years? How many LifeBridge claims have been paid?

NF: We've issued about 12,500 policies nationwide, which amounts to about $625 million in life insurance coverage. To date, we've had about 20 or so claims, which represent over a $1 million paid out to those left behind.

IB: Is there anything else you think our readers should know about LifeBridge?

NF: We're very proud to be the only life insurance company that has this kind of program in place, to have developed and implemented this unique way of giving back. It's literally putting our money where our mouth is, putting our principles into action. And we have a website with all the information your readers might need.

Thanks, Nick, for your time, and continued success with this very worthy endeavor.

[Special IB Thanks to Caitlin Bricker for setting this up]

Cavalcade of Risk #166: Call for submissions

Jeff Rose hosts next week's Cavalcade of Risk - Entries are due by Monday (the 17th).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

Thanks!

NB: Thanks to these folks, we're all scheduled 'til the end of the year: Russell Hutchinson, Irwin Jacob, Ray at Excess Return, Jay Norris, Emily Holbrook, Becky Shafer and Van Mayhall.