Cavalcade of Risk #174: Risky Risk

Nina Kallen hosts this week's outstanding collection of risk-related posts, with a twist: she's nicknamed this edition "the Cavalcade of Risk of Risk, in honor the many posts that discuss how an obvious risk (drunk-driving, getting sick) leads to a different sort of risk (personal financial disaster; having your medical records kidnapped.)"

Very cool - Thanks, Nina!

ObamaTax Schadenfreude

Perhaps it's a bit misanthropic of me to take satisfaction in the fact that the young folks, who voted overwhelmingly to reconfirm the ObamaTax, will now reap the "benefits" of that decision:

"A new study predicts that health premiums could increase as much as 40 percent for young adults once [the ObamaTax] goes into effect in 2014 ... close to 4 million uninsured individuals . . . can expect to pay more out of pocket for single coverage than they otherwise would"

And this is despite anticipated premium subsidies that were supposed to mitigate those costs. Since the age 21-29 cohort comprises almost twice the number of those uninsured than other age groups, they'll be feeling the pinch pretty hard. And since, come 2014, they'll be required by law to buy (more expensive) coverage, they'll soon learn this the hard way.

On the other hand, those of us a bit older (but not necessarily wiser) shouldn't rest too easily:

"Oregon residents who buy their own health insurance "face major cost changes."

And by "changes" they mean "major increases."

And this is, of course, a national trend, as we're beginning to see.

The topsy-turvy world of health care

Overlawyered found this gem in an otherwise reasonable report on continuing findings of the Dartmouth Atlas of Health Care:

"In the topsy-turvy world of health care, doctors and hospitals have a very powerful influence on how you are treated"

Do tell?

There must be SOME problem that Obamacare can solve for America.  

Maybe this is it?

Have it your way...or not

Maybe it's something to do with company names that start with W:

"Walmart, the nation’s largest private employer, plans to begin denying health insurance to newly hired employees who work fewer than 30 hours a week"

This in response to the ObamaTax mandate that employers provide group health insurance benefits to "full-time" workers. But that was then, and this is now:

"A fast-food chain is slashing employee hours so franchise owners don't have to pay health benefits ... The company has announced that all non-management positions will have their hours reduced to 28 a week"

The move affects about 100 Omaha area Wendy's employees - for now. But don't expect it to stop there; how long do you suppose it will take Mickey D's and other fast-food emporia to reach the same conclusion?

Risky Bulbs

About 3 years ago, we noted some of the dangers of those new-fangled "curly bulbs" (CFLs) that are now mandated for our continued lighting needs:

"In addition to toxic mercury, our Neighbors to the North are becoming increasingly concerned that they may also be giving off "potentially harmful ultraviolet radiation."

Turns out, Canadian authorities may have been prescient:

“When there is something in your house, you don’t perceive any danger, you wouldn’t get that close to an x-ray in a doctor’s office ... compact fluorescent light bulbs emit high levels of ultra violet radiation ... the bulbs emit rays so strong that they can actually burn skin and skin cells."

Cursing the darkness, or the light?

You be the judge:

Additional Info - CO-OPs over the cliff

This is a follow on to Hank's post on CO-OPs a couple days ago.  Authority for CO-OPs  was created by PPACA.  CO-OPs are nonprofit, customer-owned health plans, designed to compete against the major for-profit insurers.

According to Kaiser Health News, the fiscal cliff deal approved by Congress on New Year’s Day eliminated most of the $1.4 billion in remaining funding from the federal health law for new CO-OPs.  The fiscal cliff deal does not affect the $2 billion in loans already awarded by HHS to a number of CO-OPs around the U.S.  The start-up loans are interest-free.  (. . . which means the taxpayer bears the cost of the money - as well as the business risk of these new businesses.)

Initially, the health law allocated $6 billion to help co-ops start up and meet state insurance solvency requirements. In 2011, Congress reduced that funding to $3.4 billion as part of broader budget cuts.

One organization that has received CO-OP loans: the Freelancers Union. This organization is a nonprofit created to represent freelance workers and independent contractors. It’s reported that the Freelancers Union will receive $341 million in loans from the U.S. government to start health insurance plans in three states – New York, New Jersey, and Oregon.

“It’s like venture capital for health care,” said Sara Horowitz, the group’s executive director.

Just what we need – a federal snowstorm of high-stakes venture-capital wagers, based on political calculations, not business calculations. Another wager like Solyndra.  Be still, my beating heart!

Notwithstanding this generous, reckless federal plunge into more “investments” it does not understand, CO-OPs will encounter harsh reality.  Can they really compete with the large, established companies like United, Wellpoint, and Aetna? How much marketing overhead will be necessary to overcome those major companies’ existing name recognition, public confidence, and enormous membership base over which their expenses are spread?   Will a hoped-for 5%-6% “advantage” arising from the CO-OPs’ non-profit status translate into premiums low enough to persuade people to risk joining an untried CO-OP?  If CO-OP membership does not materialize, how long before the feds give up and cancel further subsidies?

Beyond these practicalities, the odor of political cronyism and paybacks is heavy around the CO-OP awards.   Devon Herrick, a senior fellow at the National Center for Policy Analysis, says "the federal loans will likely enrich unions and the executives who administer the plans, but the coverage is unlikely to be any more efficient than commercial insurers.”

I think the appropriate taxpayer response to CO-OPS, is “Uh-oh”.

LCP vs Stafford

As Mike pointed out last week, the Brits' Much Vaunted National Health System© has a slight problem:

"60,000 patients put on death pathway without being told ... It also appears family members and even family physicians are not being advised."

The Liverpool Death Panel Care Pathway may have competition for its race to the bottom, though, if the folks at the Mid Staffordshire's Stafford Hospital have anything to say about it.

And - no surprise here - they do:

"Hundreds of hospital patients died needlessly. In the wards, people lay starving, thirsty and in soiled bedclothes, buzzers droning hopelessly as their cries for help went ignored. Some received the wrong medication; some, none at all."

This is par for the course for the MVNHS©, and demonstrates just how efficiently a government-run health "care" system (like the ObamaTax) can save money when it wants to. How can one doubt the efficacy of a system that denies treatment to hundreds of patients citizens?

But Henry, you may object, this is but one hospital in a vast system. Surely this is the exception, and not the rule?

Object away, dear reader, but ponder this:

"LOTHIAN [Scottish] patients who have been diagnosed with cancer are facing stressful and unacceptable delays in receiving their lifesaving treatment ... For patients with colorectal cancer and cancer affecting the head and neck, NHS Lothian hit the target in fewer than 80 per cent of cases, and in urological cancers, such as bladder, kidney, prostate and testicular, 82.5 per cent of sufferers began their treatment on time – the lowest rate in all of Scotland."

Something about a stiff upper lip?

Ship, sailed

Noted ObamaTax flip-floppers at AHIP (Association of Health Insurance Plans) have once again weighed in - a dollar short and many days late - on the role of states and insurers under the new regime:

"Federal regulators should give states and health insurers enough flexibility to keep new Patient Protection and Affordable Care Act (PPACA) rules from pushing up costs or disrupting the market in other ways ... The EHB package requirement may make coverage more comprehensive for some, but it also could increase the cost of coverage for many"

Um, guys? That's already a done deal. We've already seen dramatic rate increases (with more on the horizon). And there's zero indication that HHS Secretary Shecantbeserious has any intention of negotiating with you.

After all, why should she?

Meanwhile, the National Association of Insurance Commissioners (all 58 of 'em!) are "concerned about “rate shock” from the younger and healthier portion of the population leaving the health insurance marketplace and skewering it by taking the penalties in the first years when they are low."

These guys crack me up. This is not new, folks, regardless of the fact that you've had 3-plus years to understand it. And this is priceless:

"States need flexibility to develop a regulatory environment that will discourage adverse selection"

Guaranteed issue, gents: do you speak it?

Best Defense from Adverse Selection....

.....is fair rates.

The brilliant minds at NAIC are concerned about adverse selection, as they should be.


"State insurance regulators remain concerned about “rate shock” from the younger and healthier portion of the population leaving the health insurance marketplace and skewering it by taking the penalties in the first years when they are low."

 It won't be just the first years, at that rate of subsidy they are expecting the young to contribute they would need to triple the current tax for it to make sense for a young, healthy person to buy coverage. Before we toss young healthy males in with the 1% and blame them for everything that is wrong, though, let's look at their situation.

• Just out of High School or college and making entry level wages
• Auto Insurance is not community rated or age subsidized costing them many times what older drivers pay.
• Medicare and SS taxes already increased and sure to increase far more for the acturially excessive benefits seniors have already been promised.

A very specific segment of the population is going to bear the brunt of healthcare reform, and that is young males. If politicians really felt it was in the public interest to subsidize the premiums of sick and older individuals then the public as a whole should do so. Allow insurers to charge rates actuarially derived for the risk they are taking and subsidize them on the back end.

Instead of driving people out of the system and encouraging fraud, you would attract far more, eliminating most of the problems before they happen. We need to remember insurance is already guaranteed renewable 99% of the time, the key is to get people insured before they get sick, healthcare reform so far does the exact opposite.

The Gray Lady: Corrected

A bit of a different take on Bob's post:

"Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, [because] of the Obama administration’s health care law"

Fixed that for you.

[Hat Tip: FoIB Jeff M]

But this I know and know full well . . .

Dr. Ezekiel Emanuel wrote this article in the NY Times on January 3.

Among other things, Dr. Emanuel states  "A related intervention - an idea that never actually was in the Affordable Care Act but inspired the death panel accusation - is that physicians should be paid a one-time fee to talk with patients about their preferences for end-of-life care."

This is technically true.   However - this end-of-life “intervention” WAS INCLUDED in HR3200 – the Bill that eventually was passed as the Affordable Care Act.  The end-of-life provision was removed from the final version of the Bill only because of widespread public outcry.

Dr. Emanuel knows this history full well and thus his statement above must be considered deliberately misleading.   Besides, Dr Emanuel is a long-time advocate of withholding care from some people in favor of other people.

More specifically, Section 1233 of HR3200 went on for 11 pages and 249 lines of text - remarkably long for a provision that its defenders claimed was innocuous.

Section 1233 of HR3200 would have compensated physicians for mandatory end-of-life counseling. It stated in detail exactly what physicians shall discuss, with whom, and at what times. Keep in mind Section 1233 was proposed legislation. Regulations are written after enactment and are always much more prescriptive than legislation.

So, was the objection to Section 1233 about compensating physicians?  Of course not.  People who objected to Section 1233 did not fear “physician compensation”  - they feared a “death panel”.  And why was that? The Affordable Care Act depends on a large reduction to Medicare spending.   Medicare patients fear that such a large reduction will end up harming them by making care less available.  Given that fear, mandatory end-of-life counseling was not seen as a means to bring out patients' "preferences" but rather as a tactic for the administration to reduce Medicare spending. 

That is, Medicare participants perceived a threat of withholding end of life care. This issue still has traction because neither the administration nor the Congress has ever, persuasively, answered the concerns raised about this threat.  By appearing evasive, the administration actually intensified the fears.

Those fears have not disappeared.  Dr. Emanuel also knows that full well.

Co-ops over the cliff

The New Year's Day "fiscal cliff deal fiasco" also included some bad news for proponents of so-called "co-ops." As we discussed last Spring, these are essentially "mini-insurers designed to compete with the big boys. CO-OP's (the misnomered Consumer Operated and Oriented Plan) would be state-licensed, and available both inside and outside of the Exchanges."

What might have been...

Turns out, the CO-OPs are now taking their turn under the bus:

"The new fiscal cliff deal could hurt the nonprofit groups that want to set up Consumer Operated and Oriented Plan (CO-OP) health insurers ... Section 644, the Consumer Operated and Oriented Plan program contingency fund section, would cut 90 percent of the CO-OP program loan funding that is not already "obligated."

And thanks to co-blogger Nate, we already know that "19 non-profits offering coverage in 18 states ... have already been awarded $1 billion. That leaves $2.8 billion left to be "had"."

Or not.

As one might imagine, proponents of the CO-OP plans are less than pleased:

"John Morrison, president of the National Alliance of State Health CO-OPs (NASHCO), is blasting [the aforementioned] Section 644 ... Since long before the fiscal cliff agreement, the big health insurance companies have fought the new CO-OPs because they represent a real opportunity to lower health insurance premiums and allow consumers to belong to a member-governed heath insurer"

Funny, we used to call them MEWAs, and that's not a good thing. As for lowering health insurance premiums, well, color me skeptical.

Cavalcade of Risk #174: Call for submissions

Nina Kallen hosts the last Cav of 2012 next week. Entries are due by Monday (the 7th).

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). And please only submit if you are willing to link back to the carnival if your submission is accepted.

Thursday Afternoon LinkFest

■ First up, from the D'Uh! Department:

"Human resource firms say many businesses will hire more part-time workers, trim hours of full-time staff or hold off on hiring because of the new health care law."

This isn't news so much as confirmation of something we've been saying for quite some time. But it's nice to see that someone in the MSM is paying attention.

■ Next up, the clock continues to tick for HHS Secretary Shecantbeserious:

"Today is the day [Ms Shecantbeserious] tells states whether their plans for health insurance exchanges pass muster."

Inasmuch as she's as clueless as the 58 state departments of insurance, this should be fun.

■ And finally, speaking of Ms Shecantbeserious and her minions (aka the Centers for Medicare and Medicaid Services, or CMS), we're now officially in the rolling out stages of new ObamaTax rules and regs (and, of course, major tax increases). The list is extensive, but here's a sample:

"Single risk pool. Issuers are required to establish a single risk pool in each state where they offer coverage for each of their non-grandfathered individual (one pool) and small group markets (separate pool)."

As we've already seen, these sound great in theory, but in practice....

[Hat Tip for first two items: FoIB Holly R; and UHC for the CMS info]

Health Wonk Review: Happy New Year! edition

Brad Wright hosts the first Health Wonk Review of 2013, and it's a doozy. From workers comp to government subsidized health insurance to new tech, there's something to whet your wonketite (that's word, right).

Pay & Chase for Individual Subsidies?

One of Medicare's biggest systemic failures (if not its biggest) is pay and chase. Claims must be processed in 15 days and payment sent, at some point down the road, usually a year or two after they get around to checking if the claim should have actually been paid. If they find out it should not have been paid they then try to recover these monies. A system only a politician could accept.

Appears that this is the plan for ObamaCare as well:

"Employers will receive notice if their employees are certified for premium tax credits and will have an opportunity to respond.  The IRS will then present the employer with a notice and demand for payment.  It appears that this will happen in 2015 for penalties owed for 2014."

January 1st, 2014 employees go to the exchange and gets a subsidy to buy coverage. Come some point in 2015 the IRS will send a notice to employers trying to collect the penalty. What if the employer proves the employee was not eligible for  the subsidy and thus they are not subject to the penalty? Does the IRS then go after the employee to recoup the subsidy? This is money that went to buy insurance so it is doubtful the employee would have it to repay. 

Can anyone dream of a system our government could implement that would accurately determine eligibility? They want individuals to instantly be able to price policies and buy online. How do you instantly gather that information from employers?

It almost seems as if there is some layer of administrative work provided at the employer level, between the worker and carrier,  that accurately and timely makes these determinations, within 30 day window or so. Those arguing, mainly clueless academics, that insurance could more efficiently be offered if decoupled from employment never grasped the administrative savings of bulk buying. If employers were not contributing that would make things easier, but I have yet to see an affordable or palatable system employers did not contribute to financially. If you think individual polices subsidized through the tax system would work you would just be ignorant. 25% of owed taxes aren't collected and fraud is rampant, see refund fraud as a clear example.

ObamaTax(es) for all!

Courtesy of Grace-Marie Turner (Galen Institute president and Forbes contributor):

■ "[T]he Medical Device Tax that hits entrepreneurial firms making equipment such as heart valves and hip replacement parts."

As regular readers already know, corporations don't pay taxes, their customers (that would be you) do.

■ "A new Medicare Tax ... a big hit especially for the self-employed."

That would also be job creators (who now won't be so inclined).

■ "The new Flexible Spending Account Tax limits the amount of money that workers can set aside tax-free for medical costs."

This is a double-whammy (at least): just as the ObamaTax itself has increased the cost of health care, ways to mitigate the damage are drying up.

There's more at the link - but only for those with strong stomachs (and/or access to adult beverages).

Gray Lady Joke of the Day

You really can't make this up:

"In a long-awaited interpretation of the [ObamaTax], the Obama administration said Monday that employers must offer health insurance to employees and their children, but will not be subject to any penalties if family coverage is unaffordable to workers."

Wait, what?

So first they make it impossible to write child-only health plans, and now they've decided that "dependents" doesn't include spouses?

But the best part?

Remember: the "official" name of the ObamaTax is the "Patient Protection and Affordable Care Act" [emphasis/irony added]. But they've now officially backtracked on that "affordability" requirement:

"[T]he meaning of “affordable” depends entirely on the cost of individual coverage for the employee"

Reminds me of something....

[Hat Tip: FoIB Holly R]

EHR and the MVNHS©

Electronic Health Record-keeping is an integral part of the ObamaTax and, as we noted last week, these records aren't necessarily safe from prying eyes. So how are we to know how safe our newly-digitized medical records will be once they're on-line in a national database?

Well, we can look to Britain's Much Vaunted National Health System© for a peek at our own future:

"More than one in three [Brits] have had their medical details uploaded onto a central database accessible by healthcare professionals across the country, many without their knowledge ... the majority of those patients whose records have been uploaded will not be aware and said there are dangers the information could be hacked, bought by private companies or matched to other publicly available details on individuals."

Of course, that last part is pure hype, right?

Maybe, but this kind of thing isn't exactly reassuring:

"[E]mployees, who work for NHS Lothian ... had the temerity to assume that their own medical records were their own business. Or at the very least, that they had as much right to read them as some other government employees did."

But why would they believe that? They've already ceded their health care to their fellow government bureauweenies, why would their medical records be sacrosanct?

When the government is in charge of your healthcare, they mean it:

"There is a fair warning system on the computers but people don’t always read it and they don’t actually realize they're not allowed to look at their own records"

Seems pretty clear to me.

And this is the (very near) future of our health care "system" under the ObamaTax.

[Hat Tip for NHS Lothian story: FoIB Fred W]

Another ObamaTax speedbump

Last Friday, an Illinois-based business was granted an injunction against HHS Secretary Shecantbeserious enforcing the birth control convenience item mandate.

Now, another federal judge has issued one on behalf of a Michigan-based property management company:

"U.S. District Judge Lawrence Zatkoff ruled Sunday in favor of Tom Monaghan and his Domino's Farms Corp ... Zatkoff granted Monaghan's emergency motion for a temporary restraining order until a final decision is made in the case."

And the slow slog continues apace.