Creative Carrier Trick: RMD edition

Folks with IRA, 401(k) and similar plans may be familiar with the term RMD (Required Minimum Distribution):

"The amount that ... qualified plan participants must begin distributing from their retirement accounts by April 1 following the year they reach age 70.5. RMD amounts must then be distributed each subsequent year."

It's not a choice: the law says you have to start using up your retirement savings at age 70½, even if you're still working. Still, one company has come up with a unique way to turn potential lemons into lemonade:

Gleaner Life has developed a product called RMD Life. Basically, it's a single premium, whole life insurance policy with a Guaranteed Purchase Option (GPO) rider. One more often sees GPO's on disability or even Long Term Care insurance policies, where one retains the ability to increase one's protection even if in ill-health.

Every year (beginning at age 70) the GPO allows you to buy an additional amount of life insurance, regardless of your health. Each "certificate" (additional coverage amount) is paid for by the RMD, and can even be assigned to different beneficiaries. And you can even skip a year or two if you find a better use for that year's RMD (but be careful: you have to buy at least once every 3 years to keep the option available).

FoIB Jeff M also helpfully points out that, since this is a single premium plan, any withdrawals from the cash value will be taxable. One presumes that the cash value is of secondary importance to folks interested in this plan, but it's still important to be aware of any potential tax consequences.

Although it's not really clear how much demand there'll be for this product, it's nice to see a carrier think outside-the-bun. And of course, with some 10,000 "Boomers" retiring every day, this could be a pretty decent-sized market.

[Special IB Thanks to Jeff M]

About today's deadline

As most folks know, today's the last day of Phase 1 of the 2015 Open Enrollment season. That means that, for most of us, it's the last day to lock down coverage for a January 1, 2016 effective date.

Waitaminute Henry: what do you mean "most?"

Just received in email:

"Good news, Medical Mutual has made the decision to extend the deadline for Individual Off Exchange Application submissions to 12-31-15 in order to get a January 1st effective date."

So Buckeye State procrastinators have been given a two week reprieve (at least with one carrier); but keep in mind that this is only for Off-Exchange plans (no subsidies or cost-sharing help).

Be interesting to see if other carriers follow suit.

Self-promoting Agent Tricks

No, not that kind, this kind:

I was recently asked by a friend to help her colleague with his family's health insurance needs. The catch? He lives in Indiana, and I'm not licensed in the Hoosier State. I did offer to help him find a good, professional agent, and to help him double-check that the advice he was getting was sound.

One of the most wonderful blessings that's come from blogging here at IB has been the connections to many professional, knowledgeable agents in almost all 58 states, and I was able to help Chris find one near his hometown.

Now comes the self-aggrandizement part; I just received this email from Chris:

Hello Hank. I just wanted to say thanks for connecting us with the Van Vleet Agency here locally; they were very professional and helped us navigate all this!

There may be a nationwide crisis for people who are trying to separate in their minds the professional insurance people and the scammers that have arisen in even greater numbers since we are required by law to have insurance now, and things have gotten confusing and rates have gone up for many of us, so we are looking anywhere we can to find something that is now too good to be true. Many of them are obviously scams but after we said no thanks, then they keep calling and calling even though we tell them take us off your list, we are not interested, and they use different phone numbers so you cannot block them. When we finally found one we thought was good, I was too busy to research it and my wife believed their hype but the next day we found out it wasn't even insurance at all, it was a discount program, and we would have still been faced with a penalty for not having insurance. With the other plan we had before, we kept hearing from all the doctors in our area that they did not accept marketplace insurance plans. It is so bad that there is no point in trying to find out any reliable information online, because of the overwhelming prevalence of partial or misleading information. Even within the marketplace system there is only partial information.

Well it turns out that [the carrier we chose] is accepted by the doctors and hospital here either way, whether on- or off- marketplace, but we never would have known it without Jessica's help. And going to an off-marketplace plan with them has given us the potential of some benefits if we do decide to go out of network. We are going with a Silver HSA 4000 deductible which we likely will reach in a few months due to my wife's conditions and then we are fully covered for her and soon thereafter fully covered by the family, saving on taxes too up until the HSA contribution limit.

Thanks again for your part in helping us get this figured out!

Trust me, Chris, it was my pleasure.

40 years and Pfft! The HealthSpan Story

"We’ve been helping Ohio families be healthier for more than 40 years"

That's the claim of small-time health insurer HealthSpan (located in scenic Cleveland, Ohio). The carrier offers (well, offered, bear with me) Medicare supplements, and individual and group health insurance plans.

That is, until it ran into the ObamaTax buzzsaw.

From email a few minutes ago:
 

After carefully assessing its Small Group business and its volatility, it is adjusting broker commissions for its 2016 Small Group Plan policies on and off the exchange.

• New Small Group business:
• No Broker commissions will be paid effective February 1, 2016.

• Existing Small Group business:
• No Broker Commissions will be paid after the contract renewal date. This is effective starting February 1, 2016.
• No Renewal Plan Options will be made available for renewing small groups. There will be no options or changes allowed for renewal, only the existing plan will be presented.

To be fair, they did give agents who represent them the requisite 30 days notice, which is nice.

Some questions arise, of course:

■ Since it will no longer be paying commissions, will HealthSpan now refund the portion of its clients' premiums that represent that cost?

■ How are agents already on the hook (ie with HealthSpan clients) supposed to be paid for their service work? Or are they required to provide this for free?

■ How long will HealthSpan survive?

Inquiring minds want to know.

[Hat Tip: Cornerstone]

Another CO-OP foundering

As the list of failing CO-OPs continues to grow, it's beginning to seem like the model may, in fact, be fatally flawed. When the only such example to actually turn a profit make money* starts faltering, well then perhaps it's time to re-think the whole concept:

"Maine's Community Health Options lost more than $17 million in the first nine months of this year, after making $10.9 million in the same period last year."

There's now less than a dozen of these organizations left, just under half of the total number of them started.

On the other hand, how many new carriers of any model actually break even (let alone make a profit) in their first years of operation?

So, will they still be standing this time next year? Uber-wonk Bob Laszewski is skeptical, and he's got a pretty good track record on these kinds of things. I've actually been pretty impressed with the local one (InHealth): strong network, good plan designs, decent rates.

Time will tell, of course.

*These are, after all, non-profits, so....

Some additional thoughts on the ObamaTax

Yesterday, we discussed the utter futility of the penalty/tax/fine/pumpkin as an inducement for folks to buy over-priced ObamaPlans vice paying a basically nominal amount for failure to "comply."

It occurs to me, though, that there's an inherent flaw in how the ObamaTax is actually calculated and applied:

One's premium and subsidy (if applicable) are based in part of where one lives (zip code, county), but the penalty is simply a flat percentage of income regardless of one's location. This seems completely capricious and unjust: that percentage of income is going to have a much bigger effect on folks in certain areas where the cost of living is higher.

So how come no one's taken up this battle (yet)?

Mysterious Carrier Tricks: UHC edition

What the heck?

From email just now:

"As of the end of today,12/10/15,  the option to quote Bronze plans will no longer be available on E-Store!

Please go on to E-Store and print off any saved quotes you have as they will no longer appear as of the end of today."

But never fear:

"You can still earn commissions selling Off Exchange"

In this market (Southwest Ohio) there are no non-Bronze level plans available on- or off-Exchange.

What game are they playing here?

[Hat Tip: Cornerstone]

Still sexist after all these years

So, Ms Burntwell and her minions have released the new guidelines on first-dollar preventive care services. These include:

■ Lactation services, including breastfeeding devices and counseling
■ Enhanced breast cancer detection coverage, including genetic screening (for women only)
■ Anorexia (overwhelmingly female)

Notice anything (still) missing?

Here's a clue.

On the plus side, one of the major "glitches" in colonoscopy coverage has been resolved:

"After colonoscopy is performed as a screening procedure based on USPSTF recommendation, the plan or issuer must cover any pathology exam on a polyp biopsy without cost-sharing."

That's nice.

[Hat Tip: United Healthcare]

Much ado about the ObamaTax

FoIB Jeff M alerts us to this terrifying news:

"[H]ouseholds that opt to go without health insurance in 2016 are set to get hit with an average Obamacare fine of $969."

Oy vey!

That's almost $81 per month; better hurry up and lock down some of that sweet, affordable health insurance right away.

But it gets worse (for certain values of "worse") for families that don't qualify for free money premium subsidies:

"Households without insurance that earn too much to qualify for financial aid to buy Obamacare plans will pay an even larger fine for 2016 — an average of $1,450"

My goodness, that's almost $121 per month!

Or, as any rational person would put it: 1/10th of a typical family's insurance premium (with a very high deductible, at that).

Yeah, no.

Aggregate vs Embedded: Interesting "Glitch"

So the other day I was quoting a case for a family (HSA plan, natch), and ran across this rather interesting puzzler:

[click to embiggen]

It appears that the plan with the lower deductible (and thus total out-of-pocket) is substantially less expensive than the one with more family finances at-risk. In all other respects that I could see they were identical: deductible then 100%. So I reached out to the folks at InHealth for clarification.

Regular readers may recall that ACA-compliant health insurance plans are no longer allowed to use aggregate deductibles, but must now use embedded ones only. What I learned from our IH rep is that there's a rather obscure, but notable, exception. When IH (re-)filed its rates for 2016, it mistakenly included a plan with an aggregate deductible. I thought for sure that this was a no-no, but as JR explained to me, they're allowed to do that if an individual's actual out-of-pocket is no more than $6,850 for the year.

So in our example, let's assume that the Smith's choose the lower priced plan with a $3,750 deductible. In this case, the aggregate deductible means that the family checkbook would need to spend $7,500 before the 100% coverage kicks in (obviously this excludes mandated first-dollar items). But if Little Joey actually accrues $6,850, then he's good to go at the 100% from that point on (the rest of the family still has a few hundred to go).

I would presume that this plan will go away for the 2017 plan year, but interesting nonetheless. And hey, learned something new!

UHC Doubles Down on Comp

We noted a few weeks ago that the rocket surgeons at United Healthcare were dramatically reducing agent compensation for on-Exchange business. This of course has the direct and immediate effect of substantially reducing the carrier's risk from that demographic.

Apparently, though, the reduction wasn't drastic enough. From email this morning:

"Effective January 1, 2016, no commissions will be paid for any new UnitedHealthcare Individual On-Exchange ... enrollments received on or after this date, in most states."

This means applications enrollments proffered as of January 1 will generate zero agent comp. In fairness, at least they're giving us a heads' up on this, although one would expect exactly zero backlash from the agent community regardless (long story).

As I mentioned before, this is entirely their call to make, although one might expect to see other carriers begin to follow suit. Interesting times.

[Hat Tip: Cornerstone]

Frustrating Carrier Trick, Resolved

Last year, we signed Suzy up for a Silver plan from Humana; she also chose to add the dental rider. This year, despite that well-known promise ("If you like your plan..."), she received the dreaded "Your plan has been discontinued" letter from them. In and of itself, this wasn't really a huge deal: she was disappointed, of course, and quite interested in keeping at least the dental plan with them. We determined that she could, and went shopping.

Ultimately, we ended up staying with Humana (albeit under a slightly different plan), including the dental.

All seemed good.

Unfortunately, things did not go as seamlessly as we'd hoped (and been promised): Humana levied a $35 (re-)activation fee on the dental, then double billed the actual premium in November.

Suzy tried calling, spending over an hour on the phone, to no avail. That's when I stepped in.

I also spent almost two (ultimately unproductive) hours on the phone with Humana, including being shunted to multiple people (all with different, often contradictory, answers) and being hung up on (twice). Eventually, I threw in that towel and reached out to their media relations folks to let them know I'd be sharing the gory details with our readers.

To their credit, they responded promptly, and efficiently. I was contacted by Natalie, who's in a special problem resolution area, who asked me how she could help. I explained the circumstances, and my three goals:

1 - Refund of the $35 fee
2 - Accounting for the second premium withdrawal
3 - That they review and correct the various service issues I'd experienced (so that the next poor shlub who called wouldn't have such a hard time).

Natalie proved to be very helpful, and noted that this was actually a good learning experience for their customer service folks. Within a day we had Humana's agreement to refund the errant $35 application fee, as well as the extra month's premium.

I understand that MLR has greatly exacerbated the already difficult challenges of hiring (and keeping) adequate service staff, but my (and Suzy's) experience was unacceptable under any circumstances. So I'm pleased that Humana has resolved this quickly and fairly, and really appreciate Natalie's persistence and help.

[Special IB Thanks to Humana's Natalie K and Jeff B]

Health Wonk Review Parade is up

Peggy Salvatore hosts this week's Parade of (Wonky) Posts, covering everything from healthcare service guarantees to fun with diabetes (commercials), even a proposed Patient Bill of Rights.

Just a terrific job - kudos, Peggy!

Promising Life Insurance/HIV news

Generally speaking, it's very difficult to find life insurance coverage for folks with fatal illnesses. It can be done, but at great expense and with substantial restrictions. Now, the folks at Prudential Life have partnered with ÆQUALIS to offer coverage to folks stricken with HIV.

There are, of course, certain underwriting requirements to be met, and they're currently offering only term plans. Still, this represents a potentially big step forward for folks living with HIV; previously, their choices were limited to restrictive guaranteed-issue plans or viaticals.

Kudos to Pruco and ÆQUALIS.

Blue Grass Bevin HIX Blues

Some Obamatax supporters have their knickers in a twist over KY Governor-elect Matt Bevin's plans to shutter his state's ill-conceived and potentially illegally founded health insurance exchange, called (oh so cleverly) Kynect:

"Bevin's plan to end Kynect has brought a strong rebuke from Obamacare advocates and outgoing Kentucky Gov. Steve Beshear"

In fairness, Ben Miller (author of the piece linked above) points out that it's really not clear that one form of Exchange is superior to the other. That is, the jury's still out on whether it's in a given citizen's (or state's) interest whether that state has its own portal or just piggybacks onto the 404Care.gov site.

Talk about damning with faint praise.

Meantime, as FoIB David Adams, proprietor of the Kentucky Progress blog, points out, the whole Kynect effort was actually never anything more than a massive overreach by (shortly former) Governor Bashear:

"Governor Steve Beshear "created" the Kentucky Health Benefit Exchange, Kynect, with an executive order in 2012 and then after the legislature declined to ratify his order as required by law, he tried again in 2013, 2014 and 2015."

So, our first 'rump Exchange.' And one that cost over a quarter of a billion dollars to implement, to boot.

Sounds like it's about time to to dis-Kynect the Blue Grass Exchange.

(Male) Cancer Wars

A year-and-a-half ago, we noted the shameful discrepancy in the kinds of "first dollar" care offered women (and children) versus us Y-chromosome types:

"All ACA-compliant plans must include a laundry list of Essential Health Benefits, including very specific preventive care coverage ... there is no corresponding requirement to cover, say, prostate exams or even STD screening for [menfolk]."

[ed: "first-dollar" coverage means not subject to deductibles or co-pays; ie "freebies"]

And it looks like the unstated goal of that omission is bearing fruit:

"The administration wants to penalize doctors who routinely order the PSA blood test."

So it's not enough just to make it expensive, we must go even farther, by punishing those recalcitrant doc's - who show no compunction about amputating feet willy-nilly - who care enough about their male patients to order a simple test that could very likely save their life (one sees no corresponding threat against mammography).

#MaleLivesMatter

[Hat Tip: Co-Blogger Mike F]

What Comes Down Must Go Up?

Readers may recall the September Daraprim kerfluffle, regarding the preferred treatment of the potentially deadly (but rare) "parasitic infection called toxoplasmosis." Briefly, Turing had purchased the rights to the medication used to fight the infection, and then boosted its price from about $13 to $750. The company eventually promised to back off the spike.

But that was then (two months ago) and this is now:

"Turing Pharmaceuticals is reneging on its pledge to cut the $750-per-pill price.Instead, the small biotech company is reducing what it charges hospitals, by up to 50 percent, for its parasitic infection treatment"

Which is great news (well, for certain values of "great:" after all, it does represent a pretty hefty increase over its pre-Turing cost) for hospitalized patients, but what about those playing along at home?

The bad news is that the $750-a-copy price will apparently stand.

The good news is that Imprimis Pharmaceuticals, a competitor, is making available a low-cost alternative.

How low-cost?

This low-cost:
 

The only real challenge right now is getting insurers to cover it. My take is that, at $1 a pop, that really shouldn't be a major issue.

Peggy & Your Private Health Data

We've been writing about who really has access to your personal health info for a very long time:

"In a time zone 17 hours ahead, a radiologist in Australia, working for a company called NightHawk Radiology Services, had been sitting before the same images ... Once your medical information travels to Australia, India or wherever you basically lose your HIPAA rights."

That's from 2006, and things haven't improved. As we noted last month, even something as innocuous as your Fitbit is fair game for data hunters. Fortunately, the folks behind that product have voluntarily agreed to comply with (some?) HIPAA privacy regs.

On the other hand, the bigger picture is much less sunny:

"At-home paternity tests fall outside the law's purview. For that matter, so do wearables ... that measure steps and sleep, gene testing companies such as 23andMe, and online repositories where individuals can store their health records."

This can lead to unfortunate consequences, primarily because the government agencies responsible for enforcing HIPAA's privacy reg's much authority to do so:

"A 2009 law called on HHS to work with the Federal Trade Commission ... to submit recommendations to Congress within a year on how to deal with entities handling health information that falls outside of HIPAA. Six years later, however, no recommendations have been issued."

Shocking, I know.

The bottom line is that, at this point, a lot of our ostensibly private health info is potentially freely available to any number of government agencies, vendors, even fellow consumers:

"Part of the lab's website address caught her attention, and her professional instincts kicked in. By tweaking the URL slightly, a sprawling directory appeared that gave her access to the test results of 6,000 people."

How many others are out there?

Another ObamaTax "Success" Story

Speaking of rates going down 3000%, here's the story of a family doing its best to not only provide for itself, but to take on another unfortunate. The Smith's had already adopted a baby several years ago, and have just recently completed the grueling task of adopting another.

In the meantime, their current medical plan - an HSA with a $12,000 family deductible - renews on January 1 with a 30% rate increase No problem, let's go shopping:

Company A offers a $13,100 family deductible for $1,006 (saving $670 a year in premiums, but raising the potential out-of-pocket by $1,100)

Company U's plan has a $13,000 family out-of-pocket, but saves the family only $300 a year (for an additional $1,000 potential exposure)

Company I's plan seems to be the "bargain:" it saves the family $840 a year in premiums, and only increases the max out-of-pocket by $500.

So, which would you choose?

404Care.gov strikes again

Via email from Anthem:

"Healthcare.gov missing information will require some individual members to re-enroll for 2016 - We recently learned that the Health Insurance Marketplace (also called the exchange) is missing some information that some of our members provided on their applications last year when they bought their plans through the exchange."



The good news is that Anthem (and, presumably, the other carriers involved) is moving quickly to notify its affected insureds and get the issue resolved. Private sector to the rescue!

If you're insured through an Exchange-based plan, might be worth your while to get ahead of this by contacting your carrier right away.