Tuesday, January 04, 2011

MVNHS©: "Hello, Tech Support?"

Behold the new face of the Much Vaunted National Health System©:

"The NHS should move more call centres and offices to India if it wants to beat the spending cuts, a key government health adviser has claimed."

Leaving aside all the inevitable tech support jokes, the move would have the benefit of potentially lowering the cost of health care delivery under the financially-strapped MVNHS©. According to that "key advisor," the problem isn't the quality of the sub-continent's workers, but a reluctance among the Brits to discuss personal health issues, and make doctor appointments, with "foreign operators." The upside, though, is a projected savings of over $30 billion.

Such moves are nothing new on this side of The Pond: as Bob noted over 4 years ago, "In an effort to hold down costs, hospitals and other medical practices are outsourcing certain functions half way around the globe." Aside from privacy and HIPAA concerns, there's the potential for security breaches. But these are, perhaps, offset by cost savings and efficiencies of scale. Of course, a key difference here is that, should such a security problem arise, our legal system is available for remedies. The Brits', though, are stuck with a government-run system which is much more difficult to prosecute.

Have a nice day!

Are ya ready for some Grand Rounds?!

Glenn Laffel has the play-by-play of great year-end medblog posts. Grab a dog and a brew, and root for your favorite teams, er, bloggers.

Monday, January 03, 2011

It's On (ObamaCare© Repeal)! [UPDATED]

I'll leave it to the polibloggers to dissect the partisan aspects of this (not to mention its viability), but a few thoughts strike me. That it will pass the House, I have little doubt. Once it hits the Upper Body, however, it faces (at least) two significant parliamentary hurdles:

1) 61 votes to invoke cloture

2) 50+1 votes to pass

If the first is accomplished, what doubt is there of the second?

But as to that second, the calculus is, um, interesting:

There are now 47 Republicans in the Senate. If one assumes (and this is, perhaps, a leap of faith) that they vote en bloc, they're still 4 shy of the required 51 votes to pass. So the question becomes: are there perhaps 4 Democrat Senators, facing re-election either 2 or 4 years hence, who can be persuaded to vote for repeal?

ADDED: Saw this at one of the aforementioned polibloggers:

"Eliminate the exemptions. That will make them squeal."

Yup.

COURTESY OF MICHELLE MALKIN: The "ObamaCare© Waiver For The Rest Of Us" bill:



HR__-Repeal -

What the heck is VBID?

Caution: extreme wonkery ahead. Which is not to say that that there's extreme clarity ahead: after all, on what planet does this phrase make sense:

"Value-based insurance design (VBID) has emerged as an important tool for tamping down health care spending by lowering consumer cost-sharing."

Get that? Spend more, cost less.

But that's the kind of mental gymnastics in which the folks behind ObamaCare© must engage. It's basic economics: make something more available and cheaper, and demand will rise. When demand rises, one of two things will occur:

One, prices will continue to decline (e.g. e-Books, flat-screen TV's), or

Two, prices will increase (e.g. insurance, health care)

Which path a given product will follow is a function, as Bob's pointed out, of its "elasticity:"

"Sugar has price elasticity. As the price of sugar rises, demand decreases since there are substitutes for sugar ... Gasoline is inelastic ... At this time, there really is no substitute for gasoline."

Same for health care: there is no "substitute" for it, like Equal or Truvia (or honey, for that matter). When you remove an insured's "skin in the game," their own share in the cost, then there's no reason for the consumer to refrain from accessing the benefit. The problem is that there is a finite, and steadily shrinking, supply of providers who can, well, provide these services. Short of capping physicians' wages (and who believes that this is beyond the pale when it comes to HHS Secretary Shecantbeserious?), how does increasing the demand for health care translate to lowering its cost?

And so I would propose a somewhat more accurate translation for the aforementioned acronym: Very Bad Idea, Dimwits.

Friday, December 31, 2010

Honest... I ran out of gas. I had a flat tire. Someone stole my car. There was an earthquake. A flood. Locusts. IT WASN'T MY FAULT, I SWEAR TO GOD

“If I had seen the memo, I would have suggested it be worded differently,” Blumenauer told The Hill.

Aw, gee, not your fault then, huh?

Thus this bozo retreats into one of the oldest, most cowardly, and least-ethical managers’ excuses in history. Blame your secretary.

Makes one wonder: if this bozo’s staff had only bothered to SHOW him the health care reform act before he voted for it - would he have voted against it?

I think it’s worth noting that this bozo is a U.S. representative from Oregon - the state that already operates a death panel for its Medicaid population. Blumenauer (or his staff, anyway) seems to believe it’s working well enough to foist it off on the rest of us. Yeah, well, first please read about Barbara Wagner. Right here.

Thursday, December 30, 2010

Oh, Nuts!

From time to time, readers ask why we constantly refer to the MVNHS© or CanuckCare as exemplars of socialized medicine. After all, we're told, other countries also employ such schemes, to no ill effect. Perhaps they're right.

On a tip from Bob, we have this story from the land of meatballs:

"A Swedish man was forced to have his penis amputated after waiting more than a year to learn he had cancer."

Ooops.

Maybe that's not what our critics had in mind. But the cat's out of the bag, so to speak, and the details demonstrate that it's not just the British and Canadian systems that fall short. In this case, an otherwise healthy 60-year-old man had what appeared to be a urinary tract infection, but was instead diagnosed with "a simple case of inflammation" (and not the good kind, either). When the medication for that condition failed to make headway, he was directed to another facility.

Unfortunately, that fine establishment put him on a waiting list, so he went almost another half year before being seen. Problem is, it turned out that the "inflammation" was, in fact, cancer. Because he'd been denied treatment for so long, the only option left was amputation.

So much for the "heads above the rest" Swedish medical system.

But wait, there's more!

Lest we become too complacent about our own socialized medical scheme, aka Medicare, it's worth noting that "Medicare officials are debating whether the agency should cover a new prostate-cancer treatment."

At $93,000 a pop, one can understand why, but again, this smacks of rationing. One supposes that it's only fair, since Avastin, a treatment for women with breast cancer, is also under review. All of which makes sense, of course, if one presumes (as is only reasonable), that the Death Panels are real, and we're seeing their initial roll-out.

A Risky Snow Job

We've discussed "special event" insurance before, but here's a story that fits the season:

"A North Carolina jewelry store owner made a $400,000 bet against a white Christmas — and lost."

Alan Perry, the store's owner, promised to refund all his customers' purchases between Thanksgiving and a week or so before Christmas if Asheville experienced a White Christmas.

It did.

So did he "lose" that bet?

No, not really: he had the foresight to purchase one of those aforementioned "special event" policies, which paid off just under a half million dollars. So he's out the (most likely nominal) premium, but bought a sleighful of great publicity and good will.

And that's a risk well worth taking.

Wednesday, December 29, 2010

Rock, Meet Hard Place

If the stakes weren't so darned high, this would be funny (think pathos):

"Retired city of Cincinnati workers argued in court Tuesday that City Hall is obligated to provide them for the rest of their lives with an extremely generous health coverage plan ... City attorneys, however, countered by contending that doing so could devastate other city services and that Cincinnati never promised that retirees' medical coverage would never change."

Facing a potential $60 million annual shortfall to pay for these bennies, the City is looking to cut its losses. On the other hand, the retirees, some making well in excess of $100,000 a year in retirement benefits, believe that their generous medical coverage (much better than most private sector employees could hope for) are sacrosanct:

"...the central issue ... is whether City Hall may change ... the medical plan former city workers initially received upon retiring ... Two former city employees testified Tuesday that retirement handbooks and briefings by city pension officials led them to believe that the city could not "reduce, change, revoke or eliminate" their health coverage after they retired."

Attorneys for the Queen City countered that these retirees apparently aren't averse to any changes, "only ones that cost them more money. Dental and vision coverage, for example, has been added to the coverage without complaint."

Something else to ponder: starting next month, "more than 10,000 baby boomers per day will turn 65." Talk about fighting City Hall.

[Hat Tip: FoIB Holly R]

Cavalcade of Risk #121: Year End Edition

The inestimable Wenchy presents this year-end collection of great risk-based posts, conveniently categorized as "insurance-related" and "non-insurance related." Either way, she's got you covered.

Tuesday, December 28, 2010

Employers get mental, see the light

As we've noted many times, mandates increase insurance costs. But when is a mandate not really a mandate? As Mr Miyagi said in the second Karate Kid movie: "Best way to avoid punch, no be there." And so it is with the Mental Health Parity mandate; the law, enacted in 2008, requires that group plans which offer any mental health benefits must treat mental health-related claims the same as any other illness. That means no internal caps or restrictions on, say, in-patient days or out-patient counseling. Of course, this leads to increased claims, and even higher premiums.

What to do, what to do?

Well, if you're the Screen Actors Guild or the Plumbers Welfare Fund, you notice the little "out:" if you don't offer any mental health benefits, you don't have to worry about "parity."

And that's just the (sensible) conclusion to which these two groups, among others, have come:

"The guild's health plan represents one of a small number of unions, employers and insurers that are scrapping such benefits for their enrollees because of a 2008 law that requires that mental-health and substance-abuse benefits, if offered, be as robust as medical or surgical benefits. By dropping such coverage, providers can circumvent the requirements."

See, that wasn't so difficult.

[Hat Tip: FoIB Holly R]

ObamaCare© and the *Other* Constitutional Problem

We've spent a great deal of time explaining why the (Evil) Individual mandate doesn't pass Constitutional muster, but there's an even more (potentially more damaging) issue: the General Welfare Clause. To fully appreciate its relevance to ObamaCare©'s fate, we'll need to rewind all the way back to the beginning of the year, and the shameful "Cornhustler" deal:

"Under the terms of a deal Nelson cut with Senate leaders to secure his crucial vote for the health care package, Nebraska would be exempted from having to pay for the coverage of its new Medicaid enrollees ..."

And therein lies the kernel of the problem: ObamaCare©'s numbers rest almost entirely on the fact that it increases the Medicaid burden on the states (and definitely see Bob's explication of how this applies in the real world outside the Beltway). The case currently popping in Florida, wherein 20 of the 57 states are challenging ObamaCare©'s legality, rests almost entirely on this issue.

But what, exactly, is the General Welfare Clause? Since I'm not a lawyer (nor do I play one on TV ), I'll defer to the Wall Street Journal's Barnett and Oedel, both professors of constitutional law at prestigious universities:

"Although the constitutional objections to its individual insurance mandate—the requirement that any person who isn't provided insurance by his employer buy it on his own—have gotten all the public attention, the law also has a "general welfare" problem ... But the Court also acknowledged that "in some circumstances, the financial inducement offered by Congress might be so coercive as to pass the point at which 'pressure turns into compulsion'" ... ObamaCare won't alter Medicaid in a relatively small way. It's an "all in or all out" proposition ... but a threat of losing 100% of the single largest federal outlay to the states."

A 100% loss is, in the words of our silver-tongued Vice President, a Big...Deal.

How big, you ask?

How about:

"The annual federal spending on Medicaid is now over $250 billion, more than all federal spending on transportation and education combined, and it is climbing quickly. States on average devote about 18% of their tax revenues to Medicaid, typically funding between 40% and 50% of their state's total Medicaid costs."

Now take that last to 100%, and that initial 18% is, well.

The problem is that, although ObamaCare© does, in fact, have an "escape" (or opt-out) clause for the states, the penalty for exercising it is that aforementioned 100% onus. And it's that burden that lies at the crux of the current Florida case. You see, all that money that would have gone to, for example, Texas, will now flow instead to, for example Michigan. And that's welfare only to the Wolverine State. It's a "heads I win, tails you lose" proposition.

And that, too, is a Big...Deal.

[Hat Tip: Ace of Spades]

Monday, December 27, 2010

HHS Secretary Shecantbeserious on OTC: "Shut up, that's why"

As Bob recently noted, HHS Secretary Shecantbeserious has decreed that going forward, OTC (Over The Counter) med's may be eligible for FSA/HRA/HSA reimbursement only if they're accompanied by a prescription. In her original missive, Ms Shecantbeserious further prohibited the use of debit cards to purchase tax-qualified OTC med's (as to why she hates convenience, you'll have to ask her directly).

Now, thanks to alert reader and FoIB Jeff M, we learn that Kathy's backed off on her plastic-prohibition:

"The IRS last week backed off an earlier rule for next year that prohibits flexible spending and health reimbursement account holders from using debit cards to pay for over-the-counter drugs that now need a prescription."

Now, you may be wondering why I said "HHS Secretary Shecantbeserious has decreed" when, in fact, the IRS is the agency which has "backed off" the rule. The reason is that, in this instance, the IRS is simply the enforcer of the rules laid down by the Madame Secretary; it is at her feet that we lay the ultimate blame for this silliness.

Oh, you may also be wondering about the title of this post. It's pretty simple: in his email, Jeff M asked "If the product is available OTC, then why would someone need a prescription?"

And there's your answer.

Employer-sponsored LTCi: Some words of warning

Once again, we're delighted to welcome our resident Long Term Care insurance (LTCi) guru, Herman Bruns, to IB. Today, Herman sets his sights on plans offered through one's employer:

I was in my car the other day listening to a well-known "consumer advocate" on the radio, when a perfectly healthy 42ish year old couple called in asking what benefit amounts they should choose on the group LTCi plan being offered on the husband's job.

The good advice they got was that it was still ok at their age to get LTC insurance, as they had no problem affording the insurance. The radio host then proceeded to discuss the limited benefit choices that they had available with daily benefit amounts and inflation options. He did not discourage them from shopping; the challenge is that they had only until the end of the year to sign up for something, anything, on the job.

The problem I have with his advice is what was left unsaid: that group LTC insurance is almost NEVER a good choice for a reasonably healthy married couple, no matter who the carrier is. WHAT!!!… you say? How can this be?

People seem to think that if it is a group plan, it must be a good deal. After all, isn’t their wonderful health insurance a bargain at work? What people sometimes forget is that their health insurance is subsidized by their employer. They find this out the hard way when they get offered COBRA when they're laid off. Their Long Term Disability plan is certainly a good deal, too, but it goes away when they leave the job.

Long Term Care insurance, in almost all cases except for some executive comp plans, is NOT subsidized by the employer. If you think about it, you are EXPECTED to take it with you when you leave: What good would LTC insurance be if it went away when you retired at 65, or the rates doubled if you left your job, since you are not supposed to need it until you are 83 in general? Therefore, it's a fully portable plan, and you pay 100% of the cost through payroll deduction.

Since the employee pays full price, with maybe a small affiliation discount, the ONLY time group LTCi tends to be a good value is possibly for a single person, or for someone who may have health issues, and thus find it difficult qualifying without simplified or guaranteed underwriting. When the employee has a spouse, or a life partner, they would have to purchase two separate LTCi polices, each with an affiliation discount. However, and here comes the shocker…….when you purchase LTC insurance on the private market, the spouse (life partner) gets up to an 80% discount on his or her LTCi plan. This effectively blows away the rates they would have to pay for two plans on the job. [I should add that there are ways to properly structure group LTC plans that are a good value for couples, it is just that it is not done that often].

There are lots of other reasons that group plans tend to be a poor choice. Lack of “shared plan” options, not being “partnership eligible” (which could stop the government from taking your house one day to settle your LTC debts), and just general lack of options. Group plans offer limited choices to avoid confusing the employee too much.

At the risk of making this post way too long, the best examples I can give are:

■ IBM, unless they recently changed, uses John Hancock as their group LTCi carrier. I have sold John Hancock LTCi policies to IBM employees that had more benefits and cost less than they could get through their job. Now the last I recall, IBM is still a fairly large company, and it should really make you wonder why I can get their employees more coverage than they can. If I only had a list off all the married IBMers who bought a LTCi plan at work for them and their spouse in the last 2 years, I could switch them to a better cheaper policy and probably retire.

■ State of Georgia uses UNUM as their LTCi carrier. I ran numbers for a state employee the other day who was shocked that I can up with a better value than the state program. So, when is a benefit not a benefit?

■ I saw a local Georgia county school LTCi plan that required 3 ADL’s to qualify for payment, yet the standard on the individual market is 2 ADLs. This could be real tough at claim time one day.

■ The Federal plan (not to be confused with the Class Act), for its own government employees, has the exact same problem. How many unknowing married postal workers bought into this plan without realizing their plan was not partnership eligible and they paid too much? I met one a few months ago, and she was not happy.

And I could go on, but remember that even if the plan is cheaper for a single person, it is still not partnership eligible, which could be huge in the future.

Anyway, back to the purpose of the post, the radio host would have given the people better advice if he simply stressed that group LTCi tends to not be a good deal in general for married couples…….and they should IMMEDIATELY go to the open market first and see what else they can find from a LTCi specialist, and not sign up for anything on the job until they completed that task.

Hope this helps someone, and of course there are exceptions to every rule….else consider this a simple public service announcement. Happy holidays.

Thanks Herman, and Happy New Year!

Sunday, December 26, 2010

It's the E-Mail, Stupid!

Back in the day (20 or so years go), when I first began using email, a Good Samaritan gave me this bit of advice (to which I more or less scrupulously still adhere):

"Never write anything in email that you wouldn't want showing up in the next day's New York Times."

How incredibly prescient:

"While we are very happy with the result, we won’t be shouting it from the rooftops because we aren’t out of the woods yet,” Mr. Blumenauer’s office said in an e-mail in early November to people working with him on the issue ... We would ask that you not broadcast this accomplishment out to any of your lists, even if they are ‘supporters’ — e-mails can too easily be forwarded."

And where do you suppose this top-secret (and damning) email showed up?

You guessed it.

By now, you may be wondering what, exactly, the author of the email found so potentially damaging. No problem:

"Under the new policy, outlined in a Medicare regulation, the government will pay doctors who advise patients on options for end-of-life care, which may include advance directives to forgo aggressive life-sustaining treatment."

As we've previously written, the problem with the concept is that doc's now have financial incentives to push for a quick end to life. Certainly, that's one way to reduce the cost of health care (not to mention help with solvency issues under Social Security and Medicare), but is it right? On its face, sure: choice is almost always a good thing, and one (or one's loving family) should be told of all the choices available.

The problem is that this new missive seems to have been lifted, in toto, from an earlier effort on the part of the VA, written by "Dr. Robert Pearlman ... a man who in 1996 advocated for physician-assisted suicide in Vacco v. Quill before the U.S. Supreme Court and is known for his support of health-care rationing."

Which brings us back to the email: if this is such a benign and harmless effort, why the need for subterfuge? Inquiring minds want to know.

[Hat Tip: Ace of Spades]

Tetris vs PTSD

Over the years, we've documented the strange, but undeniable, effects that certain foods can have on our health. But strange - and helpful - health phenomena can come from even more remarkable sources.

Like video games:

"Flashbacks are vivid, recurring, intrusive and unwanted mental images of a past traumatic experience. They are a sine qua non of Post-Traumatic Stress Disorder (PTSD) ... clinicians would prefer to utilize some sort of early intervention to prevent flashbacks from developing in the first place."

That makes sense; medicine and other treatments come at a price, not to mention potentially negative side effects. Wouldn't it be great if there were a treatment protocol that didn't involve medication, intervention or incarceration?

Kevin Flynn would no doubt approve of this breakthrough:

"(R)esearchers at Oxford University appear to have found one. Remarkably all it takes is playing Tetris. Yes, Tetris!"

Read the whole thing over at Pizaazz, then fire up the ol' Atari.

Saturday, December 25, 2010

Have yourself a merry little Christmas

Under PPACA, 85% or more of most medical insurance premiums must consist of reimbursed medical care expenses.

If insurers reduce their costs by 10%, the savings are 1.5%. (10% x 15%)

If medical service providers reduce their costs by 10%, the savings are 8.5% (10% x 85%).

Well, then, 8.5% would be more, wouldn't it?

So why is Milady Sebelius and HHS paying so much attention to insurance costs?

Perhaps because we had to pass PPACA so that we could find out what is in it?

Or, maybe because Milady Sebelius doesn't understand the difference between health insurance and health care?

Or, maybe because she understands the difference full well, but is afraid of the doctors?

I suspect the latter.

My opinion: Milady Sebelius' blend of cost mismanagement and cowardice once again illustrates the oxymoronic nature of "political leadership".

So have yourself a merry little Christmas . . . now.

Friday, December 24, 2010

A Christmas Treat

There's nothing like a warm, homemade Christmas Dinner.

And this is nothing like a warm, homemade Christmas Dinner, but it sure is funny:



As for my family, well, we'll be carrying on an ancient Jewish tradition:

Merry Christmas!

Thursday, December 23, 2010

Cavalcade of Risk #121 Call for submissions

Wenchy hosts next week's End-Of-Year edition of the Cavalcade of Risk. Submissions are due by Monday (the 27th). Wenchy 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.

Reminder: The Cav is about risk, but not necessarily or exclusively about insurance. So feel free to think outside-the-box (e.g. driving and texting, the environment, vaccination, etc).

Opening our "Holiday" gift from the Elves at HHS

HHS has unwrapped its latest “Holiday” gift to the public – a spiffy new regulation in which HHS confirms, once again, its intention to ignore the rising cost of medical care in the United States.

Instead, HHS will require that health insurance companies “disclose and justify any rate increases of 10 percent or more.” The New York Times further notes, “The proposed rule represents a major expansion of federal authority in an area long regulated by states.”

For several reasons, I think the bigger picture is - this is good news. Because HHS has once again underestimated the intelligence of the American public.

First of all, the immediate effect will be to increase the cost of insurance, not reduce it. HHS will spend more money regulating, and the industry will spend more money responding to regulation. There will be few meaningful premium reductions - on the contrary, premium increases will be larger. (More about this below). You will pay for these higher costs thru your taxes, thru lower wages, thru the prices of products you buy, and of course thru your insurance premiums. Only Washington DC claims to save money for the taxpayers by forcing them to bear more cost. And isn't it always "for the taxpayers"? (Probably the same principle at work here as last year’s splendid federal insight that PPACA reduces the cost of medical insurance in part by taxing insurers an additional $60 billion annually.)

Anyway, here is a CORRECT insight: the rising cost of medical care explains almost 100% of rising medical insurance premiums. Check the numbers here, in Table 12, Lines 1 and 2. The increase to premiums year over year, and over many years, tracks exactly with the increase in the cost of medical benefits paid. That’s a fact.

The public does not understand this fact; mainly, I think, because the media have chosen to hide it; and the political classes pretend they don’t know about it.

However . . . the rate reviews now required by HHS will generate a great deal of public discussion that will be centered on this fact. Public discussion means no more hiding of the fact, no more pretending it doesn't exist, no more excuses not to know it.

In this way, the public will discover the correct insight that the underlying problem is the high and rising cost of medical care in the United States.

This correct insight won’t be easy to ignore, because there will be rate hearings every month, perhaps every week. Why? Because almost every insurance rate increase for every company will be higher than 10%. Why is that? Because the current trend in the cost of medical benefits paid is about 9%. And, as Table 12 linked above shows, insurance premiums follow the medical costs.

If the rate for 2011 is $100, one might expect that the rate for 2012 will be $109. And maybe it will be. But premiums are based on the actual medical benefits paid by the policies. If actual benefits paid exceed the estimated costs, the following year’s premiums will have to increase more than the base trend. Remember employers have found that PPACA will increase their 2011 medical benefit costs by 2% to 4% - - despite HHS hysterical blustering to the contrary. So the base trend rate will be higher than 9% meaning that for 2011, 2012 and on into the future, premium increases of 10% and more are likely to be common.

And, btw, incessant rate hearings will also remind people in every state what a fraud the government has perpetrated in claiming to have "reformed" health care. All the government has done is attempt to slap price controls on insurance. That does not come close to reforming the delivery of medical care so that it will cost less.

I am not talking about reducing the incomes of physicians. I think physicians earn their incomes. I'm talking about changes in the delivery system that will reduce their COSTS, so they can reduce their fees and still maintain their incomes. I’m talking about changes in the delivery system that will relieve hospitals of some of their COSTS, so their charges don’t need to be so high.

I’m also not talking about subsidizing insurance. All insurance subsidies do is pour oceans more money into a system that has not shown the will or the ability to restrain its own costs. That is no solution. In fact subsidizing costs makes the cost problem worse. It’s running thru Hell in gasoline pants. Unfortunately, it’s all our government has shown that it knows how to do.

Most other developed countries, and many developing countries, deliver medical care of comparable quality to the U.S. at substantially less cost. We need to understand as a nation how they do this, and a national debate will help meet this need. The rate reviews required by HHS will, I think stimulate just this sort of national debate. That is clearly not the outcome HHS expects. To which I say, good !

So, yes, please - - it's high time the public begins to understand that our insurance is expensive because medical care is expensive; and that our insurance premiums are rising because the cost of medical care is rising.

The cost of medical care is the problem that must be addressed. HHS is not doing it.

So I say, let the rate reviews and the debates begin. And I say, the sooner the better.

Shecantbeserious and the Uncertainty Bubble [UPDATED]


UPDATE:
Definitely see Mike's more in-depth analysis of this idiocy.

Apparently, she just can't help herself: ObamaCare© applies to everyone, except it doesn't. Then the doc fix is in, except it isn't. ObamaCare© will insure millions of children, except it won't.


And the list goes on.

The newest twist is the (potentially illegal) usurpation by the Fed's of states' rights to regulate health insurance. In a blatant move to wrest those powers, without any apparent statutory justification, HHS Secretary Shecantbeserious has set her sights on rate increases:

"In a new HHS regulation ... if a health insurance company’s “proposed rate increase equals or exceeds a defined threshold, it would be considered ‘subject to review.’ The review process would then determine if the increase is, in fact, unreasonable.”

That threshold, by the way, is 10%.

Are you kidding me?

Here's the problem: by assigning an apparently arbitrary ceiling on costs over which insurers have little (if any) control, coupled with the draconian MLRs (medical loss ratios), insurers are hobbled. If they raise rates to cover costs, they face expensive regulatory battles. By law, they can't just "eat" the expenses, so they'll seek the path of least resistance: phased plan withdrawal. What will that look like? Well, come 2014, they won't be able to decline applicants for health issues. But for the next three years, you're going to see underwriters with guns pointed squarely at their heads, the result of which will be that marginally healthy folks will be declined or offered extremely unattractive rates.

Why is that?

Simple: if carriers know that they can't count on making up the difference next year, they'll impose them beforehand. The result: fewer folks insured, paying more premiums for less service (hey, those home office CSR's are cost centers, not revenue producers).

Way to go, Kathy!