Carnival of Personal Finance now online

Free Money Finance once again hosts the venerable collection of all thing financial. There's a LOT of material, and you're sure to find something useful.

Much Ado About...Well?

Of all the "hot button issues" extant, perhaps none is more volatile than abortion. We take no official stand on this issue at IB (although I presume that each of us has our own opinion)(or maybe more than one), but this "theory" seems to be making the radar:

"Doctors are forecasting the closure of hospitals and clinics across America and a mass migration of physicians and their assistances to other careers should the Obama administrationsucceed in its attempt to overrule their rights of conscience."

In brief, existing laws grant an exemption of sorts to health care providers who have moral reservations regarding abortion, allowing them to turn away patients who seek them. And I'd add that, although the linked article doesn't mention it, one would presume that pharmacists who refuse to dispense the so-called "abortion drug" (RU-486) would also fall under this proposal.

This seems to me to be rather more complex than it would at first seem: on the one hand, folks (currently) have the right to seek an abortion; on the other, providers shouldn't be forced to perform procedures (or dispense meds) with which they have moral and/or ethical problems. And, of course, there are few, if any, insurance plans that would cover either abortion or RU-486; perhaps those will become mandated benefits under the proposed new regulations.

Frankly, I'm skeptical that we'll see a wave of hospital closures as a result; it's not as if the rules require that providers perform the procedure. In fact, this isn't really a new set of laws, per se, but a rescission of a "rule that currently protects civil rights and the exercise of conscience in healthcare." If the rule is rescinded, then it seems to me that this will become a matter for the courts to decide. Whether that's good or bad remains to be seen.

David Stevens, CEO of the Christian Medical Association, avers that "(t)he real threat to healthcare access is driving out every healthcare professional who conscientiously practices medicine according to life-affirming ethical standards." While I personally object to the rule's rescission, I also think that statements like this do more harm than good, in that they seem to vastly overstate the case, thereby reducing their own credibility.

What do our readers think?

Not qualified to be governor of California

This article discusses one of the dirty little secrets of health plans. They have future liabilities.

“[California] already owes another $48.2 billion in unpaid costs for retiree health and dental benefits.”

In the public sector, prime example California, these future liabilities tend not to be funded.

Suggestion from InsureBlog: if in this world of increasing pandemonium, you yearn for a brief respite of total silence - ask your town manager or mayor how much is the unfunded liability in your town employees' health plan.

Years ago, FASB decreed that all private companies disclose this unfunded health plan future liability and, in fact, reflect it as a cost on their financial statements. Not so for public entities like cities, counties, and states.

Or Medicare.

You don't think California is the only government entity with unfunded future liabilities, do you?

The unfunded future liability in Medicare is something like $60 trillion – give or take a trillion.

Just who do you think is going to pay these bills? Bernie Madoff? The tooth fairy? Your children and their children and their children?

Oh, and I can’t resist noting this additional gem:

“$11 billion in new borrowing”

See, that’s how states get out of debt these days. Ain’t it swell?

‘sfunny. It never occurred to me to borrow money to avoid indebtedness. Oh well.

All these things explain why I’m not qualified to be governor of California.

Another twist in the new COBRA rules

[Welcome Industry Radar readers!]

Here's another interesting twist in the new COBRA rules...the 65% subsidy starts phasing out if an individual's income is above $125,000 ($250,000 for couples) and is completely gone at the $145K ($290K) income point.

Admittedly this won't affect too many people, but let's think about how this works in practice. You get laid off. You take COBRA and pay the 35% that the plan administrator bills you. Your government pays the other 65% via the payroll tax subsidy to your ex-employer. You think that this is a great deal and add Obama to your holiday gift list.

Then you get another highly paid position and end up, at year end, with taxable income above the threshold. Guess how the subsidy gets paid back to the government...

You got it. On your tax return. Not only will you face a surprise tax bill, can you say "Underpayment penalties ??"

COBRA/Spendulus Update, Part 2

[ed: For background, click here and/or here]

FoIB and regular commenter Chad made this observation:

"As far as I can tell the subsidy applies to all group health plans subject to COBRA including dental, vision, HRAs, and [wait for it] health FSAs. Who wouldn't elect COBRA for their HFSA if the taxpayer is going to pick up 65% of the cost of the annual election. What a sweet deal!"

There was some discussion as to whether or not this was accurate, so I checked in with my Guru of All Things FSA/HSA/HRA, Pete Deist. He responded this morning that:

"It is but they still have to pay 35% AND have qualifying expenses to use up the money. I doubt many people will ... figure this one out."

So there you have it. For now.

And from co-blogger Bob Vineyard, this site has a plethora of up-to-date and helpful information on this complex and volatile issue.

Bad News, Good News

■ Item the 1st, Bad News Dept: On the one hand, it's remotely possible that, over the years, I may have had occasion to, um, disappoint my wife and/or daughters. Thankfully, however, it's never gotten quite this far [ed: that you know of]:

"(A)uthorities told [Kenneth Hughes] his wife of 34 years, Shirley Hughes, and his oldest daughter, Tammy Lewis, had plotted a murder-for-hire scheme to collect on his $200,000 life insurance policy."

Ouch!

But wait, there's a twist:

"(H)e was shocked at the allegations made against his wife but not his daughter." [emphasis added]

Memo to self: No more chores for Junior.

Of course, even had the plan succeeded, it's likely that neither wife/mom nor daughter would have collected a cent on the policy: since it's illegal for someone to profit from their crimes, the benefits would have been paid to either a contingent beneficiary or Mr Hughes' estate.

■ Item the 2nd, Bad News Dept: I've never been a big fan of dental insurance (at best, it's swapping dollars with the insurer), but this seems like a good reason to stay in-network:

"The attorney for a Woodland dentist told jurors that his client massaged women's chests as part of a medical treatment."

The, um, unorthodox "procedure" was ostensibly to treat his patients' temporomandibular disorder; TMJ generally affects the jaw and some facial muscles, so this defense seems unlikely to prevail.

Memo to self: Always accompany the wife to her dentist appointment.

■ Item the 3rd, Good News Dept: It seems safe to say that we've all heard of CAT scans, but would you believe that the MVNHS© is now using DOG scans?

Okay, it's not really the British health care system's newest medical tech, but a 64 year old woman's collie who made the potentially life-saving discovery:

"After Max began sniffing Mrs Burns's breath and then gently nudging her right breast, the 64-year-old examined herself and discovered a small lump in the same breast."

One wonders if this new technique will gain wider acceptance, but there's no doubt that, in this case, "Max" really was her best friend. Oh, in case you're wondering, Mrs Burns has "since had the lump removed and her prognosis is excellent."

Obama Doesn't Read InsureBlog

[Welcome FoxNews and Kaiser Network readers!]

Else he would know the difference between health insurance and health care. He would also understand that health care costs drive health insurance costs, and that simply extending insurance coverage to more people does nothing to cut the cost of health care.

So why is this important?

Because he's recommending that Congress spend an additional two-thirds of a trillion dollars to expand health insurance coverage.

Well, that's not quite right either: as we've pointed out many times here at IB, the gummint doesn't actually have any money: it simply takes funds from one group of people and redistributes them to another. This is called "taxes," and it's the primary means by which Congress can "pay for" such schemes.

The problem is that this is a well that can quickly dry up, especially as those folks targeted for additional taxation -- "the rich" -- stand by helplessly as their actual worth goes plummeting down the memory hole as the stock market continues its downward plunge. Then, too, there's the indisputable historical fact that higher taxes result in lower revenue for the gummint, thereby short-circuiting the process.

Historically, too, such programs inevitably outgrow their initially estimated size (cf: Medicare), and become cures which are worse than the underlying disease. Thus, a big problem becomes an even bigger one, with little hope of slowing down. Our political class has always been loathe to cut out programs which exhibit these traits (again, cf: Medicare), why would we believe that this one would somehow break that cycle?

The President is said to rely on "eight principles to guide his health reform effort," including freedom of choice as regards health care providers. But that flies in the face of experience: there are already two national health care schemes extant, Medicare and the VA. Both of these restrict that choice; why would any other program be any different? Indeed, how could another such system be any different?

The underlying problem is that the administration's “goal is still to bring down the cost of care and to get universal coverage." The problem is that it ignores the third leg: quality of care. As the saying goes, "you can have it fast, you can have it cheap, you can have it good. Pick any two."

Which ones would you choose?

Insurance Person of the Year Awards

No, not us (heck, none of us is even eligible!). Our friends at the Lexis-Nexis Insurance Law Center (which has deemed us as one of the Top 50 Insurance Law Blogs) is debuting its First Annual Person of the Year Awards for 2008. Categories include:

■ Policyholder Attorney of the Year

■ Insurer Attorney of the Year

■ Insurance Regulator of the Year

and

■ Insurance Jurist of the Year

According to FoIB Karen Yotis, nominations are being taken through March 6, "comments will be taken through March 13, and the ILC Board will make its selections at its monthly meeting on March 16. Recipients of the award will be featured in ILC’s April “Meet Me” campaign."

You can submit your nomination(s) directly to Karen via email.

Cavalcade of Risk #72 online now

From The Land Down Under, Russell Hutchinson hosts this week's roundup of all that's risky in the blogosphere.

Do stop by!

COBRA/Spendulus Update

[Updated - scroll down]

FoIB Bill Montgomery, CIC, points us to another "deal killer" in this bill. According to a memo from United Healthcare, "the subsidy provisions apply to state continuation coverage that is comparable to federal COBRA. That would include so-called "mini-COBRA" state laws that cover groups below the 20 employee threshold for COBRA."

Here in Ohio, groups with 2 (!) or more employees must indeed offer such an option; the key threshold is whether the (former) employee is eligible for unemployment compensation. If so, he or she may elect to continue the group coverage, at his/her own expense, for up to 6 months. Of course, this now means "at a substantial discount" for up to 6 months.

This does not bode well for small employers, who may have believed that they'd "dodged a bullet" when it appeared that these new reg's applied only to larger, COBRA compliant groups.

Of course, since "mini-COBRA" admin requirements are much less onerous than COBRA's, it's up to the (now former) employee to seek out this coverage. Still, if the extra costs are a problem for COBRA compliant groups, they could be disasterous for mom-and-pop shops.

Ooops.

Over on the Left Coast, co-blogger Bill Halper reports that California has CalCobra. He says that it "covers all group health plans (except those regulated by ERISA) with 2-19 eligible employees. The eligibility requirements are the same as Federal Cobra: as long as you are on the employer’s plan, pretty much anything short of walking in carrying an Uzi means you’re eligible. Voluntarily quitting your job, which would make you ineligible for unemployment, doesn’t affect your CalCobra eligibility. You can stay on CalCobra for 36 months; normally premiums are 110% of the employer’s premiums [ed: well, they were 110%. Now, not so much].

It’ll be amusing to see how this is implemented. Under CalCobra, the carriers are responsible for all of the administrative work. The employer notifies the carrier of a qualifying event, the carrier sends out the notice and then bills the participant and collects the premium. The employer is completely out of the loop. The Federal Law complicates things a bit.

OY! UPDATE: Just got this from one of our dental carriers: "Dental benefits are included in the health plan definitions of COBRA."

Exit question: If I didn't have dental before, will I be able to elect it at termination?

More (Bad) AIG News

From the Throwing Good Money After Bad Department:

"American Insurance Group, the insurance giant that is 80-percent owned by the US government, is in discussions with the government to secure additional funds so it can keep operating after next Monday, when it will report the largest loss in U.S. corporate history." [ed: emphasis added]

As we averred when the political class began schushing down this slippery slope, "When the gummint is your reinsurer, you're pretty much bullet-proof as to claims, reserves, you name it." And thus we see the results of unfettered access to someone else's (i.e. taxpayer) money. We're already some $150 billion into the struggling, ertswhile insurance giant, with no "happy ending" in sight. In fact, the rocket surgeons in Washington are now looking at swapping "some of the debt held by the government for equity in AIG."

What part of "enough is enough" don't these people understand?

There should come a point where the market is left to correct itself (I hesitate to say "must" because, with the gummint, all bets regarding common sense are off); sometimes this correction is painful. But it's the nature of risk; that is, sometimes you lose. Based on what we've seen so far, it doesn't seem likely that another infusion of hard-earned taxpayer dollars will net a long-term positive effect.

In other words, why won't they let us cut our losses?

Yummy! Grand Rounds is on the Table

The Blog That Ate Manhattan (burp!) hosts this week's roundup of medblog posts. From soup to nuts, you're sure to find some tasty food for thought.

Knowledge is Power. Except when it's not...

[Welcome Industry Radar readers!]

Here at IB, an overarching theme is "empowerment." Generally, this means consumer driven health insurance plans (e.g. HSA's), but it also means taking a more pro-active role in learning about treatment options. Of course, the two are interrelated: when one has more "skin in the game," as in high deductible health plans, one has a greater financial stake in finding out as much as possible about what one's physician is recommending.

Which brings us to our first bit of news:

"Cancer patients who research treatment options are three times more likely to get the newest drugs than patients who don't spend extra time learning about their condition."

This makes sense, since it implies that those folks who take the time and put forth the effort to research their options are bound to know more about their possible choices than those who don't. These are folks who've scoured the 'net, read newspaper and magazine articles, and (presumably) talked to other folks with similar conditions.

And it gets better, since "those who pursued second opinions from doctors as part of their research were the most likely actually to be prescribed" one (or more) of the newer cancer med's, such as Erbitux, and Avastin. These are drugs which seem to slow the growth of tumors (although the article is quick to point out that they don't necessarily cure cancer).

On the other hand, those "first adopters" also face increased risk of developing negative side effects from these meds: "Avastin increases the risk of strokes, heart attacks and serious blood clots. Erbitux can cause a disfiguring rash."

Still, they show promise, especially for folks who face a death sentence.

On the other hand, just relying on the doc's, without doing one's own "due diligence," may backfire. The University of Michigan recently surveyed over 3,000 folks, all over 40, who had recently had office visits:

■ In "93% of talks about taking cholesterol or blood pressure drugs and in a majority of talks about cancer screening and elective surgery," the doc's initiated the conversation.

■ Doctors were much more likely to recommend taking action rather than adopt a "wait and see" posture.

That second may not seem like a big deal, but sometimes not taking action is the right course; at the very least, there's concern that, as researcher Brian Zikmund-Fisher oberves, "You need to have an opportunity to say yes or no."

Which is not to say that the doc's themselves are completely to blame here; after all, how many of us do make the time and effort to ask questions? Yet that's exactly what we should be doing, regardless of what kind of insurance we have. Or whether we're insured at all.

It really comes down to this: personal reponsibility and empowerment.

Carnival of Personal Finance is up

The Broke Grad Student hosts this week's extravaganza, replete with (questionable) YouTube clips. It's a great way to see a lot of interesting finance-related posts.

Shut Up, and Call Me in the Morning

It's as American as apple pie: the right to complain about poor service. But beware, you may have to give up that right if you want your doctor to continue treating you.

"Doctors across the country are forcing their patients to sign waivers giving up their right to post comments and reviews about them online."

Of course, just because you sign something doesn't automatically mean that you're bound by it. But there are usually consequences for ignoring the rules, especially ones to which you've explicitly agreed. In this case, the consequence is a boot out the door - of the doc's office, that is.

According to Laurence McCullough, a professor of medical ethics at Baylor College of Medicine, "(t)his is just the guild trying to protect itself from accountability to those it serves. That's not professional behavior — this is self-interested behavior." Of course, the medical profession has been under fire of late for other potential lapses in ethics, so this isn't necessarily breaking new ground.

But it is troubling:

Dr. Wendy Mariner, a law professor and director of the Patients' Rights Program at Boston University, opines that "the waivers create an adversarial relationship between doctors and patients, and could possibly limit options for patients seeking care. If this kind of thing gains any traction, medical licensing boards will, and I think should, prohibit it."

On the other hand, the reviews in question are often, well, questionable themselves. After all, how is one to know if the person posting an online complaint against Dr Smith was actually a patient of his, or simply a disgruntled employee, for example? Absent some kind of monitoring, who's to know. But that, of course, begs the question: who does the vetting? There doesn't seem to be any reasonable answer to that one.

And there's this:

"Under the terms of the agreements, patients promise they "will not denigrate, defame, disparage or cast aspersions upon" their doctors or post comments to any Web pages by name or anonymously."

Of course, if it's anonymous, how would the doc know whom to "fire?"

For now, both sides seem to be finding their way around these questions. It may be a while before we see any substantive answers.

Cavalcade of Risk #72: Submissions Due

Next week's edition is hosted by Russell Hutchinson. Submissions are due by Monday, the 23rd, and should include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

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

You can submit your post via Blog Carnival or email.

Health Wonk Review: The Anti-Spam Edition

In honor of all the "spamblog" submissions I received for this outing, I thought it appropriate to include some useful spam tidbits. And so, each post this week is accompanied by a relevant, and yet tasty, Spam© concoction.

Enjoy!

(Oh, and if that doesn't work, try this)

■ We start off with a Singapore Salad, in honor of Pizaazz blogger Glenn Laffel's post reminding us that not all talk of health care reform is taking place here in the US: China's system is undergoing some changes, as well.

Careful though, about an hour after you read this post, you'll want to re-read it.

■ Moving on to the appetizer course, Sarah Axeen of the New Health Dialogue blog argues that we can both save the economy and reform our health care system, all in one fell swoop.

■ For those interested in lighter fare, we present Fiona Gathright's post at the Employee Wellness blog. She contends that folks are more likely to lose weight if they are paid for it, and that this weight loss would then translate to lower health care costs.

■ Sometimes, Puffs are a great idea. But David Williams, proprietor of the Health Business Blog, warns that looking for bargains in healthcare can lead to puffed up claims, particularly for uninsured and underinsured patients.

■ In a nod to our new president's heritage, we have a Hawaiian Spamburger, courtesy of Musings of a Distractible Mind's Dr Rob Lamberts.

The good doctor is thoroughly unimpressed with the state of Medicare, and in an Open Letter to the President, he explains why.

■ For a south of the border taste, we look to Nursing Degree blog. Looking to mix travel with surgery? Erika Collins has an indispensible guide to what she considers the Top 50 (and then some!) resources for Medical Tourism.

■ Interested in something that may sound good on paper, but might just be overreaching? Our own Bill Halper gives us his take on the "Stimulus" package (known around these parts as "The Spendulus"). Bill takes a look at all the health care provisions, and worries about their impact.

■ Like this recipe for incomparable corn chowder pot pies, Health Care Renewal guru Roy Poses has his own take on the comparative effectiveness research imperative in the recently passed "Stimulus" bill: if done right, he's all for it.

■ Sometimes, it's important to remember the basics, like a classic baked Spam loaf. Jason Shafrin, the Healthcare Economist, reviews some important healthcare statistics. These are classic, too, like health care spending that is expected to grow to almost 20% of GDP in 2017.

■ Remember when Egg McMuffins were first introduced, and folks wondered what they were? Well, just what is the Certification Commission for Healthcare Information Technology, and why should we care? Healthcare journalist Neil Versel explains both, including what they have in common with Bernie Madoff.

■ Is the Kaiser Family Foundation's recent report a bit cheesy? Disease Management blogger Jaan Sidorov thinks so, and gives the KFF a thorough fisking for its disingenuous criticism of insurance coverage for cancer patients. The good news, Jaan assures us, is that his own "pic is Obama-esque."

■ When grilling kabobs, managing heat is critical. So, too, is managing patient care, as Dr Rich reminds us in this "meditation" on why patients who receive stents are so poorly informed, and how policy decisions (i.e, how doctors are "managed") may play a role.

■ Talk about heartburn in a bowl: Blogger Merrill Goozner takes aim at the Atlantic Magazine's apparent misrepresentation of comparative effectiveness. Ouch!

■ This Mexican Extravaganza is sure to cause some gastric pain. And while we're thinking of it, does the level of pain you experience while recovering from surgery have any relationship to the type of coverage you have? Jon Coppelman of Workers' Comp Insider makes the case that it sometimes does.

■ If you're on a budget, these BLT Bites might be just the ticket. But, as Medicaid Front Page's Brady Augustine reports, the new SCHIP legislation may leave states scrambling to stay within their own budgets.

■ Bet you never expected to see the words 'Spam' and 'cupcake' together, did you? Canadian Medicine blog's Sam Solomon reports on a similar surprise: the Canadian Medical Association is lobbying to reform the country's healthcare system to make it look more like one of the mixed public-private European systems.

■ These Tuscan Spam Bites aren't the only things with (metaphorical) fangs; Anthony Wright opines that the benefits of COBRA shows the complete disaster that is the individual insurance market.

■ Just as this Seven Layer Dip has many levels, Louise at Colorado Health Insurance Insider reports that the Stimulus Package [ed: referred to as "The Spendulus" here at IB] includes some not so obvious ingredients, including some that she hopes will help to ameliorate the problem of so many uninsured.

■ And for dessert, something both sweet and tart. THCB's Brian Klepper reports on a recent appeals court decision that held against the advocacy organization Consumers' Checkbook, and with the AMA and HHS. The latter two are looking to keep Medicare physician data secret, but this may conflict with increased efforts at transparency in health care.

Be sure to check out the comments for some great fireworks, um, debate.

Thanks for stopping by; be sure to catch the next edition when Brady Augustine hosts at MedicaidFrontPage.

Taxes and Top 10 Lists

Our good friend Joe Kristan has been named one of the Top 10 Tax Bloggers.

Congratulations, Joe!!

Medical Transparency Update

Boy, do we get results!

Regular readers may recall that we recently reported on regulations regarding physician rewards for recommending certain regimens [ed: okay, enough already with the alliteration!]. Specifically, "the pharmaceutical industry has agreed to a voluntary moratorium on the kind of branded goodies...that were meant to foster good will and, some would say, encourage doctors to prescribe more of the drugs."

First out of the box, it would appear, is Big Pharma Behemoth Pfizer, which has just announced that "will begin disclosing all sizable payments it makes to doctors, including those who test experimental drugs in people, a first for the industry." Now, that's not quite the same as, you know, actually ending said payments, but it certainly adds an element of transparency to a hitherto murky underworld of quid-pro-quo.

As Pfizer's Chief Executive Jeffrey Kindler noted, "It's very important that we earn the trust of patients and the public."

No kidding.

And it looks like Pfizer's move has sparked an interest in others, as well: "A handful of drugmakers, including Merck & Co. and Eli Lilly & Co., have recently announced plans to disclose payments for consulting, giving speeches and the like."

Another "freebie" sore point has gone unremarked; the underwriting of CME (Continuing Medical Education) credits by Big Pharma isn't mentioned. It would appear that this potentially valuable "gimme" will remain untouched by these new efforts. Actually, that doesn't really bother me: presuming that CME courses undergo at least as much scrutiny as insurance ones do, I don't think there's much danger of "contamination."

Word Problems

No, not that kind of word problems. More like this kind:

When is a rate reduction not a rate reduction?

When it's tied to buying another product. As in this lovely little offer that I recently received from our UHC service rep: "My UW [ed: underwriter] has provided 3% rate relief, off your groups medical rates, if you add any of our ancillary lines...dental...vision...or life."

A few simple words, and I blew my stack.

Why is that, you ask? Let's rephrase this, and perhaps it will become more apparent:

"We're offering a one-time, multi-policy discount on your group health rates if you also purchase dental, vision or life coverage. In fact, this discount could pay for itself."

(NB: I had to add the "one-time" bit because they already offer an on-going "package" discount)

So why would one phrase give me the warm fuzzies, and a simple re-wording send me through the roof?

Call me old-school, but when a carrier rep says "underwriter" and "rate relief" in the same sentence, it implies a whole series of specific processes and decisions, the results of which should be completely independent of whether or not we buy an additional line of coverage.

In fact, wording it in such a way strikes me as just shy of extortion ("(t)aking money by force, threats or deception or by excessive overcharging"). After all, if we're healthy, why not just offer the lower rates? In fact, if the underwriter has determined that we qualify for lower rates, isn't the carrier obligated to just put them in place?

Why not?

But recasting this as a completely separate business decision (which, after speaking with the rep, I came to understand it to be) makes it an attractive offer, not a thinly veiled attempt at squeezing even more premium.

As they say, "words mean things." And sometimes, they mean things we don't intend.