A Tale of Two Bills: Show Me the Money

Let's put aside for a moment whether ObamaCare (that is, the Senate version -such as it is - and PelosiCare) includes coverage for abortions (it does) or Death Panels (it does), and focus instead on actual costs. According to the Congressional Budget Office, "in their true first 10 years, the House bill would cost $1.8 trillion, and the Senate bill would cost $1.7 trillion." [emphasis in original]

And just to drive home the point that Granny's been thrown unceremoniously under the bus, PelosiCare includes some $800 billion in Medicare cuts, which is trumped only by the Senate version's $900 billion reduction. No more cookies for you guys.

For those keeping score, those $2 trillion price tags are almost double what the Majority Leader and the Speaker have previously claimed. I'm reminded of something an old sage once observed.

Contrast those ginormous numbers with this one: "a gross cost of $61 billion that is partly offset by about $52 billion in additional revenues associated with the coverage provisions." Those provisions include such outrageous schemes as tort reform and interstate sale of insurance (Full Disclosure: Bob maintains, and I agree, that this particular change will result in premium reductions for, at best, a very short time).

Lets compare those numbers: almost $2 trillion vs about $61 billion.

To be fair, Obamacare proponents will claim, justifiably, that the so-called Boehner Amendment cited above results in about 85% of the population being insured, while their efforts would result in some 95% covered. What they won't tell you is that their 95% includes illegal aliens (it does), which account for about 20% of the 15% of the uninsured; this means that ObamaCare and BoehnerCare are within about 5% of each other with regard to covering the uninsured.

As to how much they'll cost, well, do the math.

AARP Throws Seniors Under The Bus: Turnabout Fair Play?

After several false starts, AARP has pulled the trigger on its endorsement of PelosiCare, and the draconian Medicare cuts which will result. Any organization that seeks to put its own members at risk is, of course, free to do so, but it seems reasonable that there should be consequences for such a betrayal.

Since I've never been a member, I can't tear up my AARP membership card, enclose it with a letter expressing my disgust and disdain, and then mail that to AARP's headquarters.

But if you are, then I would encourage you to do so as soon as possible, and then head over to the American Seniors Association, which is on record as being against ObamaCare (and its various incarnations).

And if you join today (as I just did), there's a special two-fer deal going on. Making an important statement and saving money: priceless.

Showdown at the It's-Not-OK Corral

It's high noon (really!), the sun is beating down on the dry, dusty town below as the gunslingers saunter out into the middle of the street. Eyeing each other carefully, squinting from the relentless heat and light, they face off, knowing that only one will walk away.

A scene from a classic oater at InsureBlog?

Hardly.

FoIB Lyndsi Thomas tells us that "High Noon for Health Care is a joint project of an unprecedented coalition opposed to the government takeover of our heath care system."

Once there, you can email, call or even twitter your congresscritter about PelosiCare. The idea is that funneling thousands of voices further empowers each one. So click over, and use the power of the 'net to raise your voice.

Long Term Care Insurance: When's the best time to buy?

As previously noted, we don't recommend specific policies here at IB; everyone has their own needs, goals and budgets. But we do often suggest that many (perhaps most) folks might benefit from specific kinds of policies. One of these is Long Term Care insurance (LTCi), about which we've written before. But a colleague recently posted an informative and highy-readable piece on when to buy LTCi, and we're reprinting it here (with his permission).

Herman Bruns is a veteran agent in the Metro Atlanta area (does this make him a MetroGeorgian?) who specializes in the often complex field of LTCi. In response to a recent question posed at a public bulletin board which Bob and I frequent, he explains some of the factors that should be considered in deciding when to purchase this coverage:

As with most types of insurance, the ideal time to purchase LTC insurance (LTCi) is about one month before you need it. That way, you can potentially collect from the LTC carrier for a lifetime and have only paid one month’s premium. Of course, without a crystal ball, very few of us can predict when we will have a car accident or a stroke, or be diagnosed with cancer or Alzheimer’s. Many of us may be one doctor’s visit away from a diagnosis that will either cause us to pay more for LTC premiums, or possibly not even qualify for the insurance.

Christopher Reeves (Superman) never planned to fall off his horse.

As more and more baby boomers become aware of the devastating financial and emotional effects that a long term care need can have on their family, the average age at which people purchase LTC insurance has been steadily dropping every year. Government awareness programs advising people to look into this type of insurance is also causing people to get educated on how these plans work and to start early. LTC insurance is surprising affordable when you buy it at a younger age, so more and more people are simply taking advantage of it sooner. My own personal experiences with my elderly parents and in-laws in nursing homes and assisted living (all paid out of their own pocket) caused my wife and I to purchase our plan when I was 52 and she was 50. I happily pay the premium every year, even though in the back of my mind, I hope I never have to use the insurance at all. Statistically, my wife has a much better chance of using the plan than I do.

The cost of purchasing LTC insurance goes up every year you delay. Carriers raise their rates for new purchases periodically, too. The older you get, the faster it rises. As one starts to move into their early to mid 60’s, you begin to enter into what the mathematicians call the “exponential curve” of rapid price increases. The good news is that when you buy a LTC plan from a quality carrier, you are essentially “locking in” your rate for the rest of your life. Now it is true that the rates on existing policies can and do in fact increase, but many of the top carriers in the industry have a long history of little or no rate hikes. No matter when you purchase a plan, it is always going to offer you tremendous protection for a fraction of the cost of an extended nursing home stay.

Sadly, as we grow older, many of us also get less healthy. Blood pressure, arthritis, diabetes, and other ailments show up frequently as we get into our late 50’s. Many of us simply don’t take good care of ourselves, and others of us are a product of our heredity. LTC carriers give preferred health discounts to those who qualify of between 10% and 20%, so it pays to be healthy. There are a lot more healthy 55 year olds than 65 year olds out there.

Back to the original question: when should you buy LTC insurance? Although you can buy it at any age up to 84 with some carriers as long as you can medically qualify, I would urge everyone to start considering it by age 50, and try to get it in your early to mid 50’s if at all possible. If you can handle the premiums at that time, it can be a great value……and with the power of a 5% compound benefit increase, the benefit you purchase at age 50 will immediately start growing. This will provide you with a huge plan of protection by the time you statistically will most likely need the coverage, which is in your 80’s. In the long run, even though you start paying the premium sooner, the overall amount of premium paid out can be less by starting early.

Everyone’s financial situation is different, and no one plan fits all. Not everyone can start at age 52. You may have to wait until the kids get through college to afford LTCi. You may first need to move to a more cost effective high deductible or HSA eligible health insurance plan, or wait until you are on Medicare, so you can free up the funds to pay for LTC insurance. If you are already 65 and reading this blog, then the time to buy LTCi is before you turn 66….assuming LTCi makes sense for your situation. The key is to first learn more about how LTC insurance works by speaking with an experienced LTC agent representing a variety of carriers and who can advise you as to all your options.

Thanks, Herman, for your insights and for permission to share them. Readers with additional questions or thoughts are encouraged to share them in the comments.

This man is a national treasure

Ample proof here and here.

Enjoy.

From the Hot Stove League . . .

Late last week, God summoned Casey Stengel to his office. Casey (God said) I'd like to see a baseball game in Heaven. Don't we have enough old players to field a team? So let it be written, so let it be done!

Casey went back to his cubicle, his head spinning. Mantle! DiMaggio! Grove! Mathewson! Gehrig! Ruth! Hornsby! Sisler! . . . wow! (Casey said). What a team I'll have in Heaven!!

Casey decided on his lineup in no time. Then he called Satan to set up a game. But Satan seemed unsure. I dunno, Case (Satan said), do you really want to play us?

Why sure (Stengel said). Satan, I think you're afraid of us because we've got all the ball players.

Well (Satan said) maybe so, Case, maybe you do have all the players - but remember, I've got all the umpires.

. . . .

And so friends, that's why private enterprise such as insurance companies cannot compete against a "public plan". Because the government has all the umpires.

A Pair of Mysteries: Data and Laws Edition

First, the Mystery of the Missing Context: The Blogger Known as McQ takes Ezra Klein to task for missing some obvious problems with this chart:

[Chart courtesy RWN]

McQ notes, correctly, that the graph's missing some key information, including the definition of "doctor's visit" (i.e. diagnostic, treatment, routine, etc), the fact that it says nothing about the quality of the care, and that it fails to point out that a primary reason that the Medicare visit costs so much less is because that agency shifts its costs to the private sector.

But wait, there's more!

While I absolutely agree with McQ's analysis, I don't think he takes it quite far enough. For one thing, the Medicare price point in the chart is what it is because Medicare decides how much it's going to pay.

A bigger issue regarding how much the "USA fee range" (i.e. non-Medicare charges) is that, for the most part, this number is invisioble to the consumer. That is, 85% (or more) have insurance, the majority of which requires only a nominal co-pay for the typical office visit. When one is responsible for only a small portion of the bill, one is less concerned with the actual cost. It's this disconnect which helps drive the cost of the care; as the unofficial InsureBlog motto goes, "health care costs drive health insurance costs."

[Hat Tip: McQ at RWN]

Which brings us to:

The Mystery of the Missing Bill: While we find it replete with new and unnecessary bureaucracies, tax increases and health care rationing, we must at least credit Speaker Pelosi with actually having a bill to discuss (if not debate).

Which is more than we can say for Sen Reid:

"…there is no bill to release publicly — it does not exist."

Well, glad we cleared that up! Turns out, the much-discussed Baucus Bill is not, in fact, a done deal, nor (apparently) is it the de facto reform effort turned out by the Upper House. That's because, so far, there is no such bill available, it hasn't been reduced to writing. So all this talk about a vote "any day now" is just that, talk. There's nothing to vote on, much less to examine. Such is what passes for legislative action in today's Senate.

"Shut up," they explained.

Cavalcade of Risk #91 is up

Debbie Dragon hosts this week's roundup of risky posts, with a heavy emphasis on insurance. Sometimes, that's just the way it rolls.

We're scheduling for early 2010, so please drop us a line if you'd like to host a Cav.

111 and Counting... [UPDATED & BUMPED]

That's the number of new federal bureaucracies contained in the PelosiCare boondoggle. From the Health Choices Administration (#6) to Comparative Effectiveness Research Trust Fund (#39) to a Clinical Prevention Stakeholders Board (#52) to the Centers for Disease Control Office of Women’s Health (#88) to, well, you get the point.

In fact, there are 6 new such agencies just for women, and (but of course), 1 for men.

There are also 2 just for "yutes," and 11 -- count 'em, 11! -- just for Indians/Native Americans.

This one's a gem: Program for treatment of child sexual abuse victims and perpetrators (#108). The perps get their piece the taxpayer pie, too. Isn't that special.

As Bob says, "Smaller cars, bigger health insurance, Poppa Washington."

[Hat Tip: Red State]

UPDATE: Thanks to Bob, here's the actual list of all 111 new bureacracies.

Medicare Demos: Then and Now

Back in 1983, the Medicare system introduced its prospective payment system for hospitals. The program, considered successful, apparently represents the last time such a plan was deemed a success.

Now, Kaiser Health News confirms something we've been saying for a long time: that Medicare's alleged cost-savings mechanisms are illusory. In a ground-breaking story, KHN vets Chris Weaver and Kate Steadman examine how provisions in PelosiCare, et al may well be based on some false conclusions.

Recommended.

[Hat Tip: FoIB Kate Steadman]

November Wikio Rankings: InsureBlog Exclusive

Thanks to Wikio's Clara Chappaz, we're proud to present - exclusively here at IB! - this month's new Wikio (Health) rankings. And we're mighty proud to have moved up 3 notches to the #5 spot. Thanks, Clara!

1 Highlight HEALTH 2 Kevin, M.D. - Medical Weblog 3 The Covert Rationing Blog 4 In the Pipeline 5 InsureBlog 6 The Carlat Psychiatry Blog 7 Health Care Renewal 8 Diabetes Mine 9 Six Until Me. 10 Healthcare Economist 11 DB's Medical Rants

12 Fight Aging! 13 John Goodman's Health Policy Blog 14 Doctor Anonymous 15 Pharmalot 16 The Last Psychiatrist 17 The Doctor Is In 18 Disease Management Care Blog 19 Musings of a Dinosaur 20 Schwitzer health news blog Wikio Blogs

Grand Rounds is up...

Dr Joseph Kim presents this week's round-up of great med-related posts. Do check it out.

MVNHS©: Compare and Contrast

If you haven't already done so, please take a moment to read this compelling and life-affirming guest-post.

Then, think about the implications of this:

"Cancer patients will receive funding for private treatment if they have not seen an NHS specialist within two weeks of GP referral."

This is not the current "law of the land," merely a piece of pending legislation.

Much like PelosiCare.

One More Flu Vaccine Post

60 Minutes did another piece on the swine flu vaccine last evening. Two items stood out for me:

First, HHS Secretary Sibelius came across as especially clueless: when pressed on citizens' skepticism regarding this adminstration's clumsy attempts at frustrating transparency, she blamed talk radio and TV's Glenn Beck, rather than address the very real concerns of a substantial number of Americans who just want to make an informed decision. And the fact that the House has put forth a 2000-page behemoth which we're not supposed to question does nothing to allay these concerns. No wonder people have doubts.

Second, a University of Michigan (?) professor made an especially specious comparison, likening taking the vaccine with wearing a seat belt. This is stupid on two levels: first, seat belt use is mandatory when traveling in a car - it's the law. So far at least, taking the vaccine isn't (which is probably a good thing, since it's in short supply; unless, of course, you're a terrorist. Second, and more important, no one has ever been injured by simply buckling a seat belt, but there are any number of cases of folks who've had life-altering complications from taking vaccines.

If the goal of the piece was to reassure us that this is safe, effective and available, it failed on all counts.

The Blair Witch meets Nancy & Harry

Even though Halloween's over, be afraid.

Be very, very afraid:



[Hat Tip: Reader Fred W]

"He chose...poorly."

I'm still ambivalent about the wisdom of taking the swine flu vaccine, but I don't begrudge my fellow Americans their choice to do so. It looks, though, as if they'll have to wait, because there's another group who gets first dibs:

"(T)he Pentagon has offered to give swine flu shots to detainees [at] Guantanamo Bay, Cuba ... Detainees at JTF Guantanamo are considered to be at higher risk and therefore they will be offered the H1N1 vaccination."

Oh really? People whose mission in life is to kill Americans get to cut in line ahead of those Americans?

Words fail.

Medicare 2010

On October 16, The Centers for Medicare and Medicaid Services (CMS) announced the Medicare premiums and deductibles for 2010.

This announcement contains the usual annual increases in premiums and deductibles. For 2010, the Part A hospital deductible reaches $1,100 per admission. The Part B ambulatory deductible is $155 per year. The Part B monthly premium increases 15% to $110 monthly per participant. (The Part B premium has increased by 41% in just the past 5 years – from $78 to $110. Wow.)

It’s important to recognize that in setting the 2010 Part B premiums, CMS has followed current law. The law includes certain limitations on growth of physician reimbursements. The $110 rate for 2010 reflects these limitations. For 2010 the limitations would reduce present physician reimbursements by 21% (!) Congress has waived these limitations in each of the past 5 years and is expected to waive them again for 2010. Why is this relevant? Because waiving the limitations will require a recalculation of the physician cost, meaning that both the Part B deductible and the Part B premiums will be higher than shown here. Wonderful.

The remainder of this post contains a brief summary of Medicare benefits for 2010. If, or as, you scan this summary (I know, it’s boring) please ask yourself: "would I want to be covered by THIS plan, at THESE rates?"

1. Medicare has many deductibles, all of them are increasing. Values for 2010 are:
a. Part A inpatient deductible = $1,100 per confinement.
•Inpatient benefits are limited to 150 days per confinement.
•Medicare pays inpatient benefits at 100% up to 60 days per confinement after the $1,100 deductible
•Medicare requires a $275 per day deductible from 61-90 days
•Medicare requires a $550 per day deductible from 90-150 days.
•After 150 days – no coverage
b. Part B Medicare deductible for all other types of expenses = $155 per year
2. For these other types, Medicare pays 80% of allowed expenses after the deductible
3. Medicare does not limit the residual expenses (the 20% that you must pay)
4. Medicare will continue to reimburse 80% regardless how large your expenses may grow - and you will continue to pay your 20% - no matter how large that may grow.
5. Medicare does not have a health reimbursement or health savings account.
6. Medicare contains no limit to the share of your own medical costs that you must pay in any year
7. Preventive care is subject to the same deductible and 80% reimbursement
8. Medicare does not cover retail Rx – no prescriptions – unless you buy Part D for an extra premium
9. Medicare does not reimburse any expenses incurred outside the U.S.
12. The Medicare gross premiums (before subsidy) are $461 per month for Part A and $442 per month for Part B, a total of $903 monthly or $10,836 per person, per year. This friends, is what Medicare COSTS.

The Medicare benefits may seem, well, skimpy compared with the relatively high premiums. On the other hand, an older population is expensive to insure, given the numerous chronic conditions and other health issues that people accumulate over a lifetime. This cost is not decreasing, it is increasing. And the government’s response year after year is to reduce benefits (e.g., increase deductibles) and increase premiums - but not to attempt to manage the overall cost. What else could it do? Well, it could aggressively seek out rampant fraud; or implement specific disease-management programs; or help physicians and hospitals identify and eliminate wasteful cost in the system. That’s only three of many possibilities. Oh, but hey, I forgot – Medicare has such a wonderfully low expense ratio in part because it doesn't do these things.

Note: By law, for citizens and legal residents who have at least 40 quarters of Social Security earnings, Medicare subsidizes the cost of the premiums. For the typical Medicare participant, Medicare (i.e., taxpayers) subsidizes 100% of the Part A premiums, and 75% of the Part B premiums. As the result, the typical Medicare participant will pay about $110 monthly in 2010 for Part B. That's equivalent to 12% of the overall Medicare cost. Still, it's an increase of about 15% above the $96 monthly per participant cost of Part B for 2009.

Good News on the Economic Front

The Obama Administration has announced that the stimulus package has saved approximately 650,000 jobs.

That's good.

The stimulus package cost $787 Billion. That works out to $1,210,000 per job. Roughly speaking, of course..

"XX vs XX"

The rather inflammatory characterization of risk management put forth by the National Women's Law Center, "Being a Woman Is Not a Pre-Existing Condition,” is rather telling: first, of course it is, just as being male or 25 years old or diabetic. All of these carry a certain risk profile, and it's the job of the insurer to adequately price those risks. So being a healthy male, I pay up to 40% more for life insurance than a similarly-aged female, and my 22 year old daughter pays significantly less than her 22 year old male peers. Shall we level that playing field, as well?

Didn't think so.

But somehow, when it comes to health insurance, risk is suddenly a bad word? If we were to adopt rules which require healthy folks to pay the same as unhealthy ones, or men to pay the same as women despite having fewer claims, this would be acceptable?

Didn't think so.

But I'm not alone in this; the Independent Women's Forum recently surveyed some 800 of those females, and found something interesting:

"When asked the relative priority of healthcare to other issues, only 16% said healthcare should be top issue for Congress to address ... 51% of women are unsatisfied and 42% are satisfied with what they have read, seen, or heard about the proposals or legislation to change the way healthcare is covered and delivered here ... Most would prefer that any expanded involvement exclude them personally." [emphasis in original]

Three-quarters of those surveyed would prefer that their own healthcare be left untouched, or only slightly modified. What's even more telling is the reaction to the current meme that our health care system is in crisis: "43% of women say that Congress and the President should enact healthcare reform 'only when quality legislation is developed, even if it means there is no deadline.'" [emphasis in original]

It seems to me that if there was a groundswell of support for "leveling" that premium playing field, we'd have seen that reflected in these numbers, which we don't. "Leveling" those premiums, that is, removing the element of risk from the equation, changes everything. As I mentioned in the KHN article, "(i)f you don't base it on risk, you don't have insurance. You have income redistribution." I stand by that and, apparently, so do a lot of women.

Cavalcade of Risk #91: Call for Submissions

Debbie Dragon hosts next week's Cav; submissions are due by Monday (the 2nd). Debbie asks that you 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.

BTW, we're now scheduling for early 2010. Please let me know if you'd like to host.