Continuing Education: An Ethical Conundrum

In addition to selling and writing about insurance, I'm also a licensed Continuing Education instructor for Ohio, Kentucky and Indiana. These states require (as do, to the best of my knowledge, all states) licensed insurance agents to have a certain amount of updated knowledge of our industry and the laws and agencies which regulate it. The number of hours vary, but they are not insubstantial.

Other industries have similar requirements: lawyers have CLE, accountants must take CPE courses, and physicians have CME classes.

Costs for these courses vary, depending on industry and subject matter. But it can get expensive: I recently complained about the $100 charge for an 8 hour long term care course I was required to take. That is, until I asked my better half (a certified Project Management Professional) how much her courses cost, and was told that $30 an hour was a "good deal." And my surgeon brother-in-law told me that CME can run $100 (or more) an hour.

But that's only if you pay for it.

Many industries allow (encourage?) vendors to sponsor CE classes, at no charge to the actual licensee (doctor, lawyer, agent, whatever). So one might have BMW pay for lawyers' CLE classes, or Anthem pay for insurance agents' (this is more ubiquitous than you might have thought).

Or Pfizer paying for doctors' CME courses.

Apparently, that last is too much for the nanny-statists at the American Medical Association. I received an email (not sure why) that "actions are in motion by the American Medical Association’s Council on Ethical and Judicial Affairs (CEJA) and proponents to eliminate commercial support of certified CME."

The Council's concern is that there's an inherent conflict of interest when a vendor pays for CME for a physician. I'm not sure I buy that, unless the vendor is also the instructor. The email went on to inform me that "the Accreditation Council for Continuing Medical Education (which accredits providers of CME) found ‘no evidence to support or refute the assertion that support biases CME’." Granted, that's lukewarm, at best. Far more telling were the results of a recent poll claiming that "92% of physicians disagreed with the Committee’s call to end commercial support of CME." Of course, these doc's have a vested interest: free CME beats $100 an hour CME every time.

So what's this got to do with insurance?

Well, as I mentioned above, I teach CE myself, and we're paid (directly and indirectly) by carriers to do so. That is to say, the agents who take our classes don't pay anything, our fees are picked up by carriers. And as regular readers know, I don't carry any insurance company's water. So how does that work?

Well, it's pretty simple: a carrier wants to present itself in a positive light to its customers (agents), and so it offers "free CE." It's not really "free," of course: the company pays us so that the agent doesn't have to. And the company chooses the topic (from a rather extensive "catalog" of courses). We're the licensed providers, and we write and develop and file - and teach - the courses. The carrier's involvement stops at the classroom door, and then picks back up when we present our bill.

So where's the conflict of interest?

And why would that be any different for doctors, or lawyers, or accountants?

The Grift of the Magi?

The (unfortunate) headline reads like a convoluted novel:

Feds go after Christ, 3 others, charging kickback scheme

The good news, such as it is, is that this is not a hit piece on organized religion. Rather, it's a report on the (alleged) shenanigans of some local health care providers. It's an insight, as well, on how "the system" works:

"The suit seeks damages from Christ Hospital, the Health Alliance of Greater Cincinnati, Ohio Heart and Vascular Center and the now defunct Medical Diagnostic Associates for an alleged kickback scheme in which Ohio Heart and Christ Hospital traded referrals for patients whose services were billed to Medicare and other federal programs."

What's interesting (frightening?) about this is that there's no indication of actual monetary damage. No allegation that Medicare was billed for fictitious services, or that patients were treated for non-existent maladies. It seems that the appearance of impropriety is enough to warrant legal action.

In some ways, this is not unexpected.

About a year ago, we reported that Christ Hospital had actually parted ways with the Cincinnati-based Health Alliance. The news account mentions that the (alleged) violations occurred over a seven year period, ending in 2004; this would certainly jive with the date of the "break up." During that time, the feds say, physicians were "rewarded" for throwing business to the alliance and its hospitals.

We've talked before about the inherent conflict of interest when physicians have ownership in various other medical-related industries. Doctors are human, after all, and subject to the same temptations as the rest of us mortals. It appears that the Health Alliance took advantage of this fact (and I didn't see anything in the story indicating that they had to force the doc's to participate), and ended up profiting from it (as did the doc's, apparently). The good news is that at least one physician, a Dr Harry Fry [ed: how ironic is it that a cardiologist is named Fry?], warned the Alliance that the practice was illegal, but was apparently ignored.

I suspect that, ultimately, the real issue will turn out to be "who was harmed?" There's a lot of finger-pointing going on right now; we'll let you know how it ends up.

[Hat Tip: Holly Robinson]

UHC and OhioHealth: Update

About a month ago, we learned that United HealthCare had pulled a little faux pas (literally, fox's paw) by (erroneously) notifying some 176,000 insureds that their provider of choice, OhioHealth, would no longer be in-network. To say the least, they chose poorly.

Now, though, it's time to pay the piper, to the tune of a quarter of a million dollars (or, as insurers call it, petty cash). That's a heck of a fine for some letters, especially since the two parties eventually inked a deal.

The fine itself amounts to $150,000; the balance is for unspecified "administrative costs". I bet.

[H/T: Industry Radar]

Car 54, Where Are You (and how's your insurance)?

A few months ago, we reported on efforts by some insurers to link data from folks' GPS systems to their insurance rates. The idea is that by monitoring where insureds traveled (and how long it took them to get there), and other data, the carrier could more accurately assess (and rate for) the risk. On its face, this seemed innocuous enough.

But there are also privacy concerns, and worry over just how this data will be used. And, over course, there's a "slippery slope" from insureds voluntarily submitting this data to legislation mandating that it be supplied.

Progressive Insurance (headquartered here in the Buckeye State), has introduced a new program that sort of straddles that line:

"A high-tech monitoring device makes it possible to reduce insurance premiums for drivers who avoid jackrabbit starts and slam-on-the-brakes stops...The catch? Bad drivers who take a chance on the program may wind up paying a surcharge instead."

To some extent, this makes sense. For one thing, auto insurance employs many of the same principles as health insurance: stop-and-go driving, peeling rubber, and such might be likened to smoking or high fat diets. All of those indicate a higher risk, and should generate a higher premium to offset it. And the program is voluntary: Progressive "has begun offering its drivers the chance to cut their costs based on how they actually drive."

So far, they're not requiring it.

But that could change: I recall some years ago that at least one insurer sent out an innocent-looking survey to its customer base, asking (among other things) whether that person owned a radar detector. Those who answered in the affirmative saw a spike in their auto premiums, even though they'd had no accidents or tickets.

And Progressive's not alone in looking for "creative" ways to re-underwrite risks: GMAC Insurance has linked data from the auto manufacturer's OnStar program to ostensibly offer discounts to safer drivers. That program also is voluntary. For now.

As we noted back in February, though, those who "watch the watchers" are somewhat skittish about the whole concept. There's a real fear that once companies start collecting this data, it may be difficult to control:

"Charles Samuelson, executive director of the American Civil Liberties Union of Minnesota...has worries about privacy.

We see this as kind of a creeping abduction of people's data," he said. "Basically, once they collect that data, it belongs to the insurance company. That's a big problem."

Maybe. Risk management is always at odds with behavior: what people should be doing is very often not reflected in what they actually are doing. And it does seem fair to reward those who practice good risk-management techniques (e.g. careful driving) while penalizing those who don't.

Personally, I'd also like to see this data used to target folks who are almost as dangerous as speeders: slow-pokes. Fair's fair, and if we're going to penalize those who break the speed limit, we ought to be having a talk about folks who drive dangerously slow, as well.

The MVNHS© Strikes Again!

War hero, and NHS victim, Jack Tagg wanted nothing more than the sight restored to his right eye. Mr Tagg, a sprightly 89, was in danger of losing that sight due to macular degeneration (MD), a function of his advancing years.

Fortunately, a med called Lucentis held promise: it's an injectable drug that blocks abnormal blood vessel growth and leakage (which cause macular degeneration). Although it's not cheap (it can run $15,000 or more), it's apparently quite effective. And it's also one of the few effective treatments available.

In the event, Mr Tagg dutifully contacted the MVNHS©, believing that the service would quickly approve the treatment, and he could go on about his daily life. Obviously, poor Mr Tagg hasn't been reading IB, else he'd know that this was but a pipedream:

"Tagg's local health board rejected his request for NHS funding, saying they wouldn't pay the high price of Lucentis unless the disease hit his second eye."

Well, that makes sense, doesn't it? Can't really help him until he's truly blind, don't you see?

The misinformed former pilot even thought he could just pay for the treatment himself:

"Tagg was astonished. "I would have gone blind, unless we could have sold the house and got some money," he says."

Sadly, no; as we've seen, this course of action could prove even more costly.

Fortune was smiling on Mr Tagg, though, in the form of his neighbor, Dr. Martin Rankin. The good doctor went online, soliciting contributions to help defray the cost of the medication. He collected hundreds of checks, which he and Mr Tagg hand delivered to 10 Downing Street, press in tow. The Prime Minister wasn't having any of this, however, and returned all the checks.

Then our hero's own Member of Parliament stepped up to the plate, and demanded answers from the MVNHS©, which intervened on Mr Tagg's behalf, pressuring the local representatives to make an exception (and/or stop the bad press). But fighter that he is, Mr Tagg demurred unless and until the service offered the same treatment to everyone with MD.

And that's apparently exactly what's happened:

"In fact, NICE now says local health boards shouldn't wait for the first eye to go blind, they should pay for Lucentis right away in situations where it's warranted. Officials at NICE say it wasn't a result of Tagg's activism, but a scheduled reconsideration of the data."

Not "a result of Tagg's activism." But of course.

One might be tempted to say that this demonstrates how flexible the NHS can be when its back is to the (metaphorical) wall. But that's most assuredly not the lesson here; rather, it's that when something's "free," you can bet that there will be strings attached.

Cavalcade of Risk #57: Up and Running!

Richard Eskow got a head start on this week's Cav, and it's a good thing he did: it's chock full of interesting and spot-on posts. Take a chance and head on over.

And don't be afraid to risk hosting a Cav yourself. It's fun and easy, and we have slots available for early fall. Just drop us a line to claim yours.

Gamer Awards: Ennie Voting: UPDATE

UPDATE: Tom just sent me this:

Looks like they had a voting snafu yesterday. If you voted for Fat Dragon Games in the ENnie Awards before 7am TUESDAY morning, you need to go back and recast your vote. Sorry and thanks again!

Last year, in its first year of eligibility, Fat Dragon Games was nominated for two industry awards, winning one (against stiff competition).

This year, they're in the hunt again: Fat Dragon's been nominated in the "Best Miniature Product" category. Please cast your vote* for this outstanding young entrepreneur - whether you're a "gamer" or not.

Voting starts today (July 28th) and runs through August 6th. To vote, please click here*.

*To vote, scroll down to "Best Miniature Product" Click on "Choice #1" and then click on "Dragon Tiles: Forest Adventures, Fat Dragon Games" (You can also scroll down a bit further, to "Fan Choice Best Publisher" and click on "Fat Dragon Games")

The remarkable thing about FDG is that, in an industry dominated by "the big boys," it's a one-man show, the brainchild (and dream) of its founder, Tom Tullis. A true entrepreneur, Tom's carved out a great niche, and provides gamers (young and old) with affordable gaming items.

Thanks!

Grand Rounds (and it really is!)

Edwin Leap jumps into this week's 'Rounds, offering an amazing variety of interesting posts. It's built around the question of "why do we do it?" and he explains in a sort of prologue his own drives and concerns. It's an impressive debut.

As a coffee drinker, I certainly appreciated this item from Highlight Health: apparently, coffee can help lower the risk of liver disease. Yay!

Oh, Oh, Oregon!

[Welcome Industry Radar readers!]

About a month ago, we reported that Oregon's state-run "health" plan made Barbara Wagner "an offer she couldn't refuse:"

"State officials have offered a lung cancer patient the option of having the Oregon Health Plan, set up in 1994 to ration health care, pay for an assisted suicide but not for the chemotherapy prescribed by her physician."

Turns out, it was considered more cost effective for her to, um, "go away" than to pay for life-extending meds.

And now the compassionate bureaucrats in the Beaver State have apparently decided to make that wonderful option more readily, and easily, available to even more desperately ill citizens:

"Since the spread of his prostate cancer, 53-year-old Randy Stroup of Dexter, Ore., has been in a fight for his life. Uninsured and unable to pay for expensive chemotherapy, he applied to Oregon's state-run health plan for help.

Lane Individual Practice Association (LIPA), which administers the Oregon Health Plan in Lane County, responded to Stroup's request with a letter saying the state would not cover Stroup's pricey treatment, but would pay for the cost of physician-assisted suicide."

Sound familiar?

The "health" plan won't pay for treatment, but has no trouble coming up with the funds for doctor-assisited "suicide." Of course, this makes perfect sense, when one considers that "state officials reported a new emphasis on preventive care and cost effectiveness." What could possibly be more effective than euthanasia? It's guaranteed to provide a complete and permanent resolution to the problem, without all that expensive medicine and stuff.

Who knew Dr Jack would be in-network?

Amigo? No Gracias!

And yes, that is how one says "no, thanks" in Spanish. And what's the reason behind our bilingual foray? I'll answer that question with another question.

What's wrong with this picture:

Dear Henry,

Recently I emailed you information on our LOW cost “Amigo” Short-Term Life...You may recall this is the short-term [plan] that

· Has only a $50.00 deductible at any Urgent Care Facility

· Has NO Proof of Citizenship

· GREAT Rates

[From email]

Catch that? "Has NO Proof of Citizenship."

Anyone else have a problem with that?

Okay, as an insurance guy, my first thought is supposed to be: "Great, a vast new untapped market. And now illegal aliens will have access to insurance products to help pay for health care, thereby reducing my costs."

And there's obviously merit in that position.

But I take a different view: Why are we promoting and enabling folks who are here illegally to become "part of the system?" Isn't there a greater issue here? Shouldn't we be focusing on folks who are here legally, by rewarding them for playing by the rules (i.e. following the law), rather than those who flaunt them? And if someone is willing to break one set of laws, then why would we suppose that any answers on an application would be truthful? And just so we have no doubts about the point of this excercise, or the target market, the website immediately offers "Click Here for a quote in Spanish."

I am appalled.

[H/T to Hannah S for the Spanish lesson]

ER Tragedy: Update

Earlier this month, we saw horrific video of a woman literally dying on the floor of a Brooklyn hospital, as uncaring hospital staff stood idly by. Esmin Green died at the relatively young age of 49, killed as much by an apathetic health care provider as her pulmonary embolism.

And while the circumstances of her actual death are horrible to contemplate, there's an even scarier sub-text: why she had the embolism in the first place. Ms Green had been waiting -- sitting -- for so long that blood had begun to pool in her legs, perhaps because of a shortage of inpatient beds.

Whoa, Henry, what's the one got to do with the other?

Well, turns out that "(a) major cause for E.R. crowding is the hospital practice of boarding inpatients in emergency departments... If there are no inpatient beds in the hospital (or no extra inpatient nurses on duty that day) then the patient stays in the E.R. long past the completion of the initial emergency work."

It could be worse, of course: the MVNHS© routinely parks its ER patients in the (actual) parking lot, waiting aboard the ambulances which brought them.

The problem here is that, if there's no place for admitted patients to go, then they're going to begin stacking up somewhere, and that somewhere is often the ER. This is especially becoming the case for those hospitals serving poorer communities [ed: Hello! Grady, anyone?]. It's called "boarding," and it's a growing problem.

Simply put, boarding is when a hospital, knowing that it has finite bedspace, looks toward filling that space with insured or other private pay patients, as opposed to the indigent. It's sort of a balancing act between EMTALA and the bottom line. The problem is, the folks who end up on the wrong end of that balancing act may be the ones who need care the most.

The challenge is that there's really no ideal solution. As noted above, it's just as much a problem for gummint-run health care systems as our own. More beds means less waiting, but it also means higher costs. And of course higher health care costs leads to higher health insurance costs [ed: just had to get that in there, didn't you?].

None of which excuses the unconscionable treatment afforded the late Esmin Green. Unfortunately, it's too late for her.

The Carnival of Personal Finance is up

Hosted this week at You Need A Budget, this week's compilation of finance-related posts is punctuated by some interestong and pithy quotes from the world of finance, both high and low.

With all the recent news of problems in the banking world, My Wealth Builder asks (and answers) a pretty important question: "Are my bank deposits insured?"

Rethinking Genetic Testing

Over the years, I've come down pretty hard on the use of genetic testing, especially as it regards insurance underwriting. Until now, I've felt that the dangers outweighed the benefits, and that there were other, more unobtrusive, means to accomplish the stated goals.

But I'm beginnging to rethink that position:

"Researchers from Oxford have discovered that a common gene variation is a major cause of a rare side-effect of the cholesterol-lowering drugs, statins."

Turns out, some folks are genetically predisposed toward a potentially fatal complication that can arise through the use of statins (kind of a "the operation was a success, but the patient died" kind of thing). Since statins continue to be a front-line weapon in the war on cholesterol, it seems to me that this new development merits some new thinking on my part, as well.

In addition to genetic factors that could lead some folks to higher "bad" cholesterol levels, despite diets and excercise, it may be that its treatment could also elicit some dangerous problems as well, and if a genetic screening could help lower that risk, then it seems to me to be worthwhile awaiting further developments.

This impacts insurance in two areas. First, from an underwriting standpoint, where I'm still ambivalent. But from a claims standpoint, as well: what if the med that the doctor prescribes (and that the insurer subsidizes or outright pays for) causes major problems for the insured?

Definitely something to consider.

HIPAA, HIPAA, Hooray!

Two years ago, I wrote that I was "puzzled, bordering on angry, that, (i)n the three years since Americans gained federal protection for their private medical information, the Bush administration has received thousands of complaints alleging violations but has not imposed a single civil fine and has prosecuted just two criminal cases."

Be careful what you wish for:

"WASHINGTON - The Department of Health and Human Services has levied a $100,000 fine on Seattle-based Providence Health and Services for alleged violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules."

According to its web site, Providence isn't an insurer, per se, but a "not-for-profit health system" which includes hospitals, clinics, physicians, even a university. They both provide and finance health care, so make of that what you will.

In the event, Providence was cited for a number of violations, including "unprotected backup tapes, optical disks and laptops, [which] compromised the protected health information of more than 386,000 patients." That's a lot of PHI.

If you'd like to see a copy of the agreement itself, just click here.

What I found to be even more interesting was this little factoid:

"The OCR [Office for Civil Rights] and the Centers for Medicare & Medicaid Services report they have successfully resolved more than 6,700 HIPAA Privacy and Security Rule cases." I recently had my own experience with a carrier and PHI, and ended up filing such a claim (which was later resolved to my satisfaction), and it surprised me that the process itself is generated from the OCR website. And, as noted above, it looks like the gummint's been a bit more proactive in cracking down on these violators.

And that's a good thing.

[H/T: Regular Reader Fred W]

Massachusetts in the (Mail) Bag

Regular reader and frequent commenter Scuzz alerts us to the latest from the Bay State:

"Gov. Deval Patrick is calling on insurers, employers and hospitals to help cover costs. Many people have seen their co-pays and premiums rise, and a new cigarette tax is in the works.

"Our goal here is to spread the pain, as people are saying, and to continue the concept of shared responsibility which we think is part of the reason why Massachusetts has been successful...Everybody is contributing to the cost."

"(S)pread the pain?" And here I always thought that insurance was about spreading the risk. Silly me.

A fundamental precept here at IB is that health insurance costs increase primarily because health care costs do. Looks like Governor Patrick isn't a regular reader.

I'll give Scuzz the last word:

"Hmmm. Co-pays and premiums still rising due to health care costs. Just like in the private sector. Except the private sector can't just raise taxes whenever they want to make up for the gap. "Everybody is contributing to the cost". Stunning new concept, isn't it? Seems I've heard that somewhere before. That's the concept of the private sector now."

Indeed.

Cavalcade of Risk #57: Submissions Due

Sentinel Effect's Richard Eskow hosts next week's Cavalcade of Risk. Submissions are due by next Monday (the 28th). Richard encourages you to include:

■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post

You can submit your post via Blog Carnival or email.

We're scheduling late summer, so please drop us a line to reserve your Cav.

Caitlin's Story Jumps the Shark

[Welcome Industry Radar readers!]

Thank goodness for the Tampa Tribune, which brought Aetna to its (proverbial) knees.

Oops, I mean: Thank goodness for Fox News, which brought Aetna to its (proverbial) knees.

Oops again! I mean: Thank goodness for Florida Governor Charlie Crist, who brought Aetna, well, you know.

Of course, not all of them (or indeed any of them) can claim credit. For one thing, as we reported earlier, the procedure was never authorized, or not authorized, because there was no pre-authorization necessary in this case.

But hey, let's not let any facts get in the way of a good story, shall we?

I spoke late yesterday with our aforementioned Aetna rep, who was able to confirm several key facts, deferred on a couple others, and will try to help me with a few more. Here's what we know for sure:

■ There was no issue of scheduling or pre-authorization regarding the surgery. So reports that the surgery was cancelled at the last minute because of pre-certification issues was simply untrue, and the Tampa reporter knew this.

Here's what Aetna cannot confirm or refute because of HIPAA restrictions:

■ While I don't understand how this is covered by HIPAA, Aetna isn't allowed to confirm or deny that the coverage was cancelled, or that benefits had "run out."

And here's what we hope to find out:

■ Whether this was an ERISA (self-funded) or fully insured plan, and whether it was group or individual medical. My contact was unsure whether or not she could divulge this and, as a favor, agreed to ask her HIPAA compliance guru for guidance.

All of these questions, by the way, should have been asked by the various news folks, but there's no indication that such was the case. As we noted before, it is frustrating that the media just won't do its job, settling instead for the sensational over the informative.

Now, there are some who would claim that the Aetna rep would lie (or at least mislead) about the nature of the problem. And it would be fair to at least regard such information with a dose of (ahem) healthy skepticism. The problem with the "he said, she said" scenario in this case is that, because of stringent HIPAA privacy regs, Aetna is proscribed from offering policy details that might confirm (or refute) their position. There's an easy solution to that, of course: Caitlin's family has only to waive those privacy rights, and allow the carrier to answer completely, including documentation to support its claim. We're waiting...

And while we're waiting, let's discuss why this is such a crucial case. If, and it's a big if, Aetna "caved" in the face of media and political pressure, then we can effectively kiss health insurance as a risk management tool goodbye.

That's a bit overwrought, isn't it?

Sadly, no: if a carrier folds based solely on PR, then the next step is buying insurance in the ambulance. After all, if the carrier balks at the claim, one has only to threaten with Fox and Friends to have the claim paid. It would set a dangerous precedent, and literally change the face and nature of health insurance. This is not tinfoil hat time; it is simply the logical end result of such an action.

Interesting times, indeed.

Health Wonk Review now up

David Williams, proprietor of the Health Business Blog, hosts this week's edition of the Health Wonk Review. He's got almost 2 dozen(!) interesting posts, all in helpful categories. The HWR is always worth checking out.

Beware the dreaded Law of Unintended Consequences: Jon Coppelman, of Workers Comp Insider, reports that the American with Disabilities Act seems to have actually hurt employment opportunities for those it was designed to protect.

Moving Goalposts

We've talked in the past about various caps and limitations on health insurance policies. Some limit outpatient meds, others maternity expenses, still others limit how much the carrier will pay out annually, or in one's lifetime.

We've also talked about "the uninsured," including folks who choose to "go bare."

Recently, Ezra Klein posted a thoughtful (albeit misinformed) piece on a relatively new phenomenon, "the underinsured." We've actually discussed this before, but there are some new studies out purporting to tell us just how bad the situation has become. And, of course, to tout various (and ill-fated) gummint-based solutions to a non-problem.

A "non-problem?" What's that supposed to mean?

Ezra reports on a Commonwealth Fund study released in June. Interestingly, the CF doesn't even try to hide its partisan nature; a quick search through OpenSecrets shows that their directors donate a lot of dollars to Democrats, and none to Republicans. Nothing wrong with that, of course, but understand that they have a very specific agenda here.

The study, in defining folks who are "underinsured" arbitrarily chose "10% of income spent on health care" as its cutoff. That is, if folks "spent 10 percent of more of their income...on out-of-pocket medical expenses, or if they had deductibles that equaled 5 percent or more of their income," then they were "underinsured."

Why those numbers?

The report really doesn't tell us. One might presume that spending 10% of one's income would be a significant drain. But are these catastrophic claims? That is, one-shot deals from which the patient either recovers or dies? Or are they chronic claims, such as MS or cancer treatments? And wouldn't there be both quantitative and qualitative differences between these two types of claims? It would also be helpful to know how it was that the insured had such an ostensibly high OOP. Did they choose a plan with internal maximums to save a few bucks in premium? Isn't that called risk management? We're just left in the dark.

Ezra then goes on to discuss those who are affected by this problem: "some folks being half insured and half uninsured." What does that even mean? How is one "half insured?" Seems to me, that's like being "sorta pregnant:" you either are or you're not. If one has insurance that isn't getting the job done, why is that? Certainly there are poorly designed plans out there, and some are purposely designed to look good on paper, if not in practice. But how many folks choose their coverage based on price alone [ed: I'd bet it's more than we think]? If price is the sole criterion, and we really don't know from the CF study that it was, then whose fault is it that someone ends up disappointed?

On the other hand, many folks are ignorant of their own plight, or have little choice about it. I recently blogged on a situation where the underlying plan looked fine, but had a $100,000 annual cap on all benefits paid. In today's environment, a hundred grand doesn't go as far as it used to, leaving a potentially catastrophic financial risk. Still, there are solutions to that problem; one has only to do a little research.

And what about people who choose high deductible (perhaps HSA compliant) plans? Are they "underinsured?" First, basing the criterion on income, as opposed to worth, is (ahem) "risky." If one has sufficient assets to cover the deductible (not terribly difficult to do, particularly with the help of an HSA), then what does income ratio have to do with it? And now that folks can jump-start those plans with a boost from their IRA, there's even less "there, there."

Which is not to say that there aren't problems. For example, I know that some folks choose to replace their major medical plans with less expensive (but also less useful) "mini-med" plans. I think that this is playing with fire: for the dollars saved, it's an awfully big risk to take. And there are folks who choose cheaper "hospital only" plans, incorrectly assuming that in-patient care is much more expensive than out. Sometimes that's true, but it's often not the case, again leaving a big financial hole.

So what's my point [ed: um, yeah, we were kinda wondering that ourselves]? There are no "magic bullets," no truly effective "one size fits all" solutions. As long as folks are free to make choices, they're free to make mistakes (or be mislead). But "underinsured" seems to me so ill-defined as to be essentially meaningless. And that just adds more confusion to an already complex problem, instead of actually offering substantive answers.

[H/T: Holly Robinson]

Grand Rounds now available!

The infamous GruntDoc (aka Dr Allen Roberts) hosts this week's compendium of the best of the medblogs. There are a LOT of interesting posts; start at the top and work your way down.