Too good NOT to share

[Hat Tip: Bob and Bill]

Speaking of fine messes

As the ObamaTax kicks into high gear heading into its full implementation in '14, it doesn't take a Nostradamus to foretell the consequences. Indeed, some are already making themselves rudely obvious:

"The next year is one massive scramble for employers to implement the [ObamaTax] now that it’s been upheld, and not all the regulations businesses need to follow have been written."

Most of these will affect businesses with 50 or more employees (ouch!), which means a lot of small to mid-sized firms have to be thinking "why do I need this headache?"

Here in the Buckeye State, the [Evil] Mandate ObamaTax may cost north of "$940 million in 2014 and 2015 based on the 400,000 people in the state who are eligible for Medicaid but are not enrolled"

Of course, Gov Kasich could just go all Walker/Jindal here. Good times, good times.

Finally (well, for now):

"The [Deloitte Center for Health Solutions] is set to release a study that says the number of businesses offering coverage – 130 million – could be cut in half during the next decade"

Told. You. So.

[Hat Tip: FoIB Holly R]

MedTech: VERY cool

"What if you were found unconscious or unable to clearly communicate, suffering from an injury or other medical crisis? It could take an emergency responder or a doctor precious time to figure out two key things: your medical profile and how to get in touch with a family member or friend."

That's the premise behind EmergencyLink, a free app and service accessible on your smartphone. You create a profile and contact list, and the service takes it from there.

Very cool.

But what if you just need some quick, helpful answers to a non-emergency qiestion? Well, that's where HealthTap comes in:

Like EmergencyLink, HealthTap can be accessed from your smartphone, but it also offers a web-portal for those of us with dumb ones. The service even lets you exchange files for more in-depth conversations with its 12,000+ physicians.

No word yet on how many of them make housecalls.

Time to get to work

Now that ObamaCare is here to stay, for now, the real work begins. How do we make the best of the situation and minimize the damage?


Tens of Thousands if not hundreds of thousands of mostly small employers self fund under a high deductible that will be going away in 2 years or less. This model has been extremely effective, save 15% on your auto insurance in 15 minutes comes to mind. Employers can offer the same benefits just 10-20% cheaper. It also has brought the expertise of true professionals onto the issues of excessive provider reimbursement, inefficient care, and cost control. Ten thousand engaged brokers and TPAs will deliver far better results then 500 politicians and 100 Academic quacks any day. This model is counter to the principals of ACA which is looking for high premiums and top down cost control. It is going to take some major efforts and lots of luck for these plans to survive. Small employers need to be prepared for not only a 10-20% increase when high deductible plans go away but a 30-50% increase when their new low deductible plan is community rated. If your in Ohio and rated 1-36 in small group everyone under 20 better be prepared. If your under 10 I don't think a 3 digit rate increase is out of the realm of possibility.


The people that think professionally are strong believers that a $100 tax, penalty, tax is going to prevent adverse selection. 30+ years of reality says it will just make the issue worse. Employers are going to have to find an affordable plan they can pay 100% of the employee cost for to maintain participation. Prepaid plans sponsored by a local health system might be back in vogue pretty quickly. Choice will be the first casualty of ACA.


Tax rates will be the second, when this doesn't work, reform always fails to do what reform says it will, the logical thing to do would be to scrap it, just like Medicare they will borrow to cover it instead. Eventually we will hit our credit limit and when we do taxes will skyrocket. If you can't stomach health insurance as a career any longer accounting and financial planning are going to be very busy.


Finally the practice of medicine is about to get considerably more altruistic. You would think providers learned their lesson after getting suckered on Medicare. This time they are not getting flowers and dinner first. 80-85% of spending goes to providers, when the budget is busted that is going to stick out like a cancer for the scalpel.


The one positive I see is every time government has tried to fix healthcare they have made a complete mess of things and created entire new industries to address it. There is going to be a whole lot of fixing to be done and thus a whole lot of work for those that identify it.

The 50th Employee

Lost amid the shuffle of yesterday's ObamaTax ruling is the Employer Mandate. Way that works is, if you employ more than 49 people, you've either got to offer (and help pay for) a group plan or pay a penalty tax. For most employers this will be a no-brainer: the penalty tax will be much lower than the insurance premium.

Here's the problem: if you currently employ 49 people, you're not going to be hiring that 50th guy, because that would cancel your exemption. Which means your current workforce is either going to have to work harder (to make up for that missing 50th employee), or you're going to need to scale back even further.

And if you're the 50th employee right now, you'd best be updating your resume.

HWR Supplemental: SCOTUS rules edition [UPDATED]

Health Wonk Review co-founder Joe Paduda hosts a special edition highlighting blggers' reactions to yesterday's ObamaTax decision. Pro or con, there's some great analysis all conveniently available - check it out.

UPDATE (7/2/12): Joe's now posted a second part to this Special Edition. Kudos!

ObamaTax: A Silver Lining

Now that SCOTUS has affirmed that we must pay higher taxes, while placing our health care in the hands of unelected and unaccountable Death Panels, it's helpful to know that there are alternatives.

Since we'll now be seeing fewer medical innovations, what can folks do if (when?) they need health care and can no longer find it (or are denied outright)?

Well, the folks at Medical Travel Today report that "[s]afety is and has always been a key issue in the world of healthcare and medical travel ... one organization is doing its part to bring a new level of safety to many medical travelers' first step: the search."

MTT has an exclusive interview with DotHealth CEO Andy Weissberg; DotHealth "aims to create a safer, more secure environment for both consumers and global health stakeholders from a variety of fields."

Those of us with Health Savings Accounts (HSA's) will also be interested in this item, which reports that "HSA account holders will now have the opportunity to take advantage of a medical travel option and access high quality healthcare services at significant savings virtually anywhere in the world."

Of course, HSA-compliant plans will be phased out as ObamaTax is fully implemented, and it's unclear how the accounts themselves will fare down the road. But for now, it's up, up and away!

Words fail...

And thus freedom dies.

From Bob: Text of the decision.

Something else to ponder...

Although we've had an unofficial moratorium on predicting tomorrow's SCOTUS decision re: ObamneyCare©, it's worth noting that the [Evil] Individual Mandate and the Exchanges aren't the only issues to be decided:

" [T]here are some major health-insurance regulations besides community rating and guaranteed issue ... Medicaid expansion"

Although the CornHusker "dodge" was withdrawn, the very real financial (and legal) issues that accrue to the expansion (at state cost!) to Medicaid are very real.

Money is money.

Cavalcade of Risk #160: Wildfire Edition

Louise Norris hosts this week's smokin' hot edition of the Cavalcade of Risk. Come for Money Mustaches, stay for the Financial Cents. But do stop by.

More Stupidity from Ezra [UPDATED]

Alleged health blogger Ezra Klein, noted rocket surgeon extraordinaire, continues to double down on the stupid. Today he opines that even the Father of Our Country liked him some mandates. As reported on Twitter:

"In 1798, Congress mandated that sailors buy health insurance. John Adams signed it into law."

The twit (tweet?) directs the unwitting to Ezra's latest contrivance, wherein he demonstrates profound difficulty discerning the difference between forcing all citizens to purchase a product as a condition of citizenship and specifying that certain individuals must buy a product in order to serve in the military.

Seems pretty clear to me.

In order to show that he really doesn't get it, Ezzie doubles down by citing a 1790 Congressional mandate that "ship owners buy medical insurance for their seamen." Perhaps noticing that there's a pretty glaring logical fallacy here [ed: is there any other kind with this guy?], he observes that "in 1798, Congress ... enacted a federal law requiring the seamen to buy hospital insurance for themselves."

Again, one can choose whether or not to be a sailor. But the [Evil] Individual Mandate applies to all citizens (well, almost all). How come you don't talk about those exceptions, Ezra?

[Hat Tip: FoIB Holly R]

UPDATE/IRONY ALERT: I can't believe I missed this before posting. Ezra Klein relies on legislation from the 18th Century to make his "point?" Is this the same Ezra Klein that pooh-poohs the Constitution because it's "not a clear document. Written 100 years ago, when America had thirteen states and very different problems, it rarely speaks directly to the questions we ask it?"

Why yes, yes it is.

The stupid burns strong in that one.

So, are you a Hep Cat?

FoIB Jeff M alerts us to this disturbing news for the Boomers among us:

"A government proposal that all baby boomers get tested for hepatitis C may be drawing high praise for its potential health benefits, but it’s also raising questions about the unintended consequences of screening for those seeking insurance."

We see this a lot: doc's prescribing tests and/or med's for conditions that may (or, you know, may not) exist, which then show up in the medical records of folks seeking insurance. I recently spoke with a Long Term Care insurance prospect whose physician had prescribed a particular med for her anxiety; this has caused her some grief in the application process.

The Hep C issue is, I must admit, news to me. On the one hand, it was a routine blood exam for a life insurance policy that turned up HIV in a famous professinal athlete. On the other, well:

"Even treatment for hepatitis C might not guarantee acceptance since current protocols may not be 100 percent effective."

I do have a problem with this:

"I would never, ever tell anybody to delay getting any kind of medical exam ... But you have an advantage over the insurance company if you apply for insurance before undergoing any kind of medical checkups.”

Ooops.

Here's the problem: life and health applications ask not just whether you've seen a doc recently, but whether or not you've experienced any "issues" which might be a clue that you do so. Long Term Care apps are especially stringent on these points. And although carriers routinely act stupidly, they're not run by stupid people.

Hoosier Healthcare Hijinx

We last discussed the Healthy Indiana program almost 4 years go. At the time, we noted that low income Hoosiers were eligible for Health Savings Account (HSA) plans. Even then, preventive benefits were available with little or no out-of-pocket. The major downside seemed to be the $300k lifetime cap on all covered expenses.

Well, a few years later and along comes ObamneyCare©, and the most vulnerable of Hoosiers can kiss their Healthy Indiana coverage goodbye:

[Hat Tip: FoIB Bob D]

Ill-advised Citizen Tricks

FoIB Patrick P sent us this item:

"I canceled my very expensive individual health insurance coverage through California's state-run high-risk plan and became insurance-free ... no one will insure me on the individual market ... I have made do with the state's high-risk insurance plan. California ... The federal high-risk plan would cost me just $265 a month"

It's hard not to feel some compassion for Randy Dotinga (Mr D): his health issues don't seem to be self-inflicted. But I have a number of issues with what he proposes. Of course, I completely respect his right to make this choice, even if ill-advised.

University of Chicago professor Harold Pollack nails it:

"[Randy's] responding in an understandable way ... Any program that requires people to be actively uninsured creates a very paradoxical and painful set of incentives and encourages people to do what you're doing."

As we've noted before, PCIP requirements are not only counter-intuitive, they actually punish folks who've played by the rules (as Mr D appears to have done). In this case, he's taking a calculated risk that he'll make it through that half-year wait without a major setback (ie "claim"). Given that he's already acknowledged his precarious (if not imminently threatened) heart health, this is either really gutsy, or really stupid.

And to be frank, I'm not sure which way I lean here.

I do respect that he at least touched base with the government agency overseeing the program. They were less than enthused that he might encourage others to follow his example, which I suppose is justified, but I think unfair. After all, it was the rocket surgeons who dreamed up the train-wreck ObamneyCare© that insisted on making folks "go bare" for six months. What did they suppose was going to happen?

I have two particular problems with this strategy, both of which Mr D acknowledges: first, there's no guarantee that there'll be space for him once he's eligible; and second, the program has limited funding (and a sunset provision) that could leave him in the middle of a claim with no coverage.

 Mr D's claim that he was uninsurable through the individual market gave me pause, so I reached out to California health insurance gurus David Fluker and our own Bill Halper. Turns out, this claim is likely valid; as Bill notes "any cardiac condition that requires ongoing treatment is pretty much death in the individual market." David expanded on this, explaining that "California individual health plans do not provide for any waivers, exclusions or riders. It’s all or nothing whatever the plan covers.  As such our decline rates are much higher here and any condition of the heart is too risky for an insurer to cover."

Which is good to know.

The real problem, though, is the timing. As noted in the article, one must be uninsured for (at least) six months to be eligible. But (at least in California), one can't even apply for coverage prior to that six month "waiting period." David went above and beyond, and caught a disturbing flaw on Mr D's part:

"With the enrollment process for PCIP, a person would likely be uninsured 7-8 months by the time they were enrolled in PCIP, which is very risky for those with serious health conditions.  PCIP enrolls 10th of the month for 1st of the following month and since you have to be uninsured 6 or more months before you apply, the 10th of month 7 is the earliest one can apply.   If a person submits the application prior to the 6 months having elapsed, the app is deemed ineligible for PCIP and sent over to MRMIP.

It can be done but it’s a bit complicated."

Talk about understatement.

I've had more than one client (or potential client) in the same boat as Mr Dotinga, and I must admit that I am torn about what to advise. I am not comfortable telling folks they should "roll the dice," but the alternatives are difficult, as well.

On the other hand, there are any number of programs available to folks in his position to access health care for nominal or no cost. In fact, we've linked to some of these in the sidebar for many years. Of course, one must take the initiative and at least contact these folks, but help is available.

For now, anyway.

Will SCOTUS striking down ACA cause for reflection?

It amazes me how often I see comments like this from Jodi Kantor of the NY Times:

"By summer 2009, with the country still stunned by economic crisis and Republicans falsely raising the specter of death panels, some aides practically begged the president to scale back, take interim steps and move on to other issues."

 The article in whole is about SCOTUS striking down all or part of Obama's Affordable Care Act, something these same people said was impossible. To question the constitutionality of ACA was dismissed and ridiculed; yet here we are today widely expecting just that to happen.

When will people like Jodi realize they are idiots, the problem is not the aggressive courts or divisive politics? They just don't understand healthcare or the law and thus tend to get analysis wrong. Just as the ACA was always unconstitutional, Death Panels were always a legitimate concern, Jodi just isn't intelligent enough to understand why.

We can only hope that people like Jodi Kantor take some time after the court ruling and reflect on why, once again, they got it wrong and make the connection to their lack of talent. Jodi could have had a perfectly accurate article if she had left that partial sentence out, yet for some reason they always feel compelled to over reach and show just how little they know.

Health Wonk Review: SCOTUS on hold edition

FoIB and HWR founder Joe Paduda hosts this week's assortment of posts on health care policy and polity. As usual, it's chock full of interesting, sometimes provocative posts.

Do check it out.

Cavalcade of Risk #160: Call for submissions

Next week's Cavalcade of Risk will be at Jay and Louise's place. Entries are due by Monday (the 25th).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

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

Thanks!

Propaganda Never Dies

Commenting on another blog I came across an all too familiar problem:

"Yes, we should create a system that covers everyone and follow the examples of nearly every other developed country in the world where all citizens are covered, are healthier and their costs are significantly lower than ours.

We are hurting our job creation and productivity by failing to do so. As an example, my husband and I would desperately like to start our own business (create jobs!). However, since he had a heart attack and stents placed during his marathon training a couple of years ago, he is uninsurable. So we don’t create jobs. Maybe in 2014 if the powers that be don’t unravel the coverage guarantees of the ACA…" [by K. Marq, emphasis added]

Ignoring the debatable opinion in the first paragraph, it is the highlighted part that is really the problem. Since HIPAA passed in 1996 small groups are not only guaranteed issued but the rates are capped meaning sick groups are subsidized by healthier groups. As Kaiser shows all 57 States have Guarantee issue up to 50 lives; the only variable is does it start at one or two. Husband and wife is two, so no matter what state she lives in they are guaranteed insurance.

Maybe this is Darwin's way to prevent people from starting businesses that shouldn't, but it is concerning that people with these misbeliefs are voting. If someone wants to start a business so badly but is stopped by a problem that doesn't exist to what measure will they go to solve this imaginary problem?

MLR vs SCOTUS: Under the radar

As we wait breathlessly for the SCOTUS decision on ObamneyCare©, I'll engage in some completely baseless (but fun) speculation. We've written extensively on the stupidity that is MLR (Medical Loss Ratio), and FoIB Holly R sent us this link on the latest:

"Health insurance plans owe $1.1 billion in rebates ... Millions of consumers and businesses will receive $1.1 billion in rebates this summer from health insurance plans that failed to meet a requirement of the new health-care law"

Thus sayeth HHS Secretary Shecantbeserious.

As an aside, do "professional journalists" and/or "editors" actually proofread the stuff they spit out? It would appear not, since they seem to be saying that Madame Secretary envisions checks totaling multiples of billions of dollars ("Millions of consumers" will be getting checks for "$1.1 billion"). On the other hand, given the current regime, maybe that's just the next Spendulus.

Compounding this idiocy is that Madame Secretary and her minions have no idea how many rebates will be "earned," let alone the total dollar value. I guess we'll have to send out the checks to see how many - and how much - they are.

But here's the piece that has me chuckling: the naysayers claim that if SCOTUS scuttles ObamneyCare©, “adult children” will be booted off parents’ insurance, policies will be rescinded willy-nilly, and other assorted clamors of doom.

So here's my question: in that scenario, wouldn't those who received MLR-generated rebates have to return them to the carrier(s)? And yes, I'm quite serious. Sauce for the goose, and all that.

The "Other" Mandate: Not Just for Catholics

While it might be tempting to write off objections to the mandating of coverage for convenience items birth control and abortion as a purely Catholic issue, it's really not:

"Many Protestant institutions are also trying to overturn the compromise that coerces private religious institutions to fund health insurers who can provide beneficiaries with abortion-inducing drugs"

Cans of worms....