No good answers

Ms Shecantbeserious finds herself once again in the hot seat:

"House Republicans on Tuesday pressed the country’s top health official to cut through the government red tape in order to let a dying child have a chance at getting a lung transplant"

Here's the thing, though: there are no "right" answers here. As much as we like to bust Ms Kathy's chops, I find myself siding with her in this particular instance.

Are you kidding, Henry?

No, and please hear me out.

As we saw in the Nataline Sarkisyan case, sometimes the legacy media is quick to pounce on what appears to be a case of process over life. But is this really the case here?

From the media coverage, it's impossible to know for sure. But the rules have (apparently) been in place since 2005, so it's not exactly news that they exist. And here's the thing: while each life (and especially a child's) is precious, if an exemption is made in this case, how do you tell the next set of parents "no?"

Maybe you don't, but obviously the rule was implemented for a reason. Perhaps we should pause to consider Mr Chesterton's observations on fences.

ObamaTax Scam Alert

As if the actual law itself isn't enough of a headache, clever fraudsters continue to prey on citizens already confused about whether or not they'll be insured. I wrote about one such scam in April, and Patrick had one in May.

Now, FoIB Holly R tips us to the newest iteration:

"USCT [United States Contractors Trust] is targeting people over the Internet with pre-existing health conditions who are experiencing difficulty finding insurance. Desperate to secure individual or family health insurance, the Ohioans eagerly completed contact information forms on innocuous-looking websites"

Unsuspecting Buckeyes provide their contact and bank info, and are told that coverage is in place. The first few claims seem to process fine, but then become ensnared in what USCT says are "computer problems" but which the Ohio Department of Insurance characterizes as a"scam". All the while, premiums (as high as $550 per month) continue to bleed out of the victims' bank accounts.

The Ohio Department of Insurance has "issued a cease and desist order" to the alleged fraudsters; in the meantime, if you (or someone you know) has been targeted, contact the DOI immediately, and direct your bank to stop the auto-withdrawals.

You'll be glad you did.

California Dreamin' (a Nightmare?)

Can't win for losin':

"For years, politicians and labor unions have pilloried Wal-Mart and other large employers for paying workers so little that many qualify for government health insurance at taxpayers' expense."

The ObamaTax was supposed to fix that, what with Exchanges and subsidies and (Evil) Employer Mandates and all. So how's that working out for y'all in the Golden State?

Apparently things aren't so, well, sunny:

"Legislators, backed by unions, consumer groups and doctors, are calling for fines that could reach about $6,000 per full-time employee who ends up on Medi-Cal," the state's struggling Medicaid program. Here's the thing, though, Wal-Mart (et al) doesn't pay the tax fine, their customers do. This isn't rocket surgery, it's simple economics.

Sheesh.

Where Is The Outrage? The Compassion? [UPDATED]

"For too long, Americans with pre-existing conditions have been locked out of our health insurance market. Today, the Pre-Existing Condition Insurance Plan gives them a new option -- the same insurance coverage as a healthy individual if they've been uninsured for at least six months because of a medical condition. This program will provide people the help they need as the nation transitions to a more competitive and fair marketplace in 2014."    - HHS Secretary Kathleen Sebelius in 2010

Yes Kathy, the biggest objective for The Patient Protection and Affordable Care Act was to provide access to cost effective health insurance. Back in 2010 we heard the President, HHS, and several members of Congress talk about the benefits uninsured with pre-existing conditions would receive by getting insurance through a high risk pool. This high risk pool would guarantee coverage at an affordable cost. This affordable insurance would become known as the Pre-existing Condition Insurance Plan (PCIP).

PCIP was projected to cover 350,000 people from August 1, 2010 through December 31, 2013. To do so the government set aside $5 billion to cover the projected claims.

Actual enrollment is 135,000 and effective March 2, 2013 HHS has officially "suspended" new enrollment in the program. According to Gary Cohen,  director of the Department of Health and Human Services’ Center for Consumer Information and Insurance Oversight, the program is being suspended due to lack of funds. Cohen said:

"We’re being very careful stewards of the money that has been appropriated to us and we wanted to balance our desire to maximize the number of people who can gain from this program while making sure people who are in the program have coverage...This was the most prudent step for us to take at this point in time.”

Prudent for who?

In addition to cutting off enrollment, those currently enrolled are also facing significant changes. On January 1, 2013 anyone covered under the Federal pool saw their out of pocket maximums increase from $4000 to $6250 per year. Starting in July most of the states who were running their own pools are migrating over to the Federal pool meaning that these folks will also be subject to an increase in the out of pocket maximum. Oh behalf of the many people I have helped enroll in this program I would like to ask the following:

1. Why in 2011 did HHS decrease premiums for a program that has blown through the projected funding?
2. Why hasn't HHS or the Obama Administration asked for funding?
3. Why did the Administration vow to veto a bill that was set to be put forth in the House of Representatives?

Secretary Sebelius and the Obama Administration, if  these are the very people you vowed to help and protect, then why aren't you doing anything about it?

UPDATE [HGS]: And adding insult to injury, FoIB Holly R sends us this:

"Nearly two-thirds of Americans who currently lack health insurance don't know yet if they will purchase that coverage by the Jan. 1 deadline set by the [ObamaTax]"

And worse yet, "less than half of those in the survey ... think they'll get better health care after Obamacare takes full effect. Nearly 50 percent believe the [ObamaTax] will make it more difficult for them to get tests and procedures done in a timely manner"

Sounds like they've been paying attention.

It's a salad dressing AND a cancer screen!

Okay, this is too cool:

"A simple vinegar test slashed cervical cancer death rates by one-third in a remarkable study of 150,000 women"

You will never guess where - so I'll tell you: "in the slums of India."

In the West, "[p]ap smears and tests for HPV" have saved countless lives, but these are apparently too expensive for poorer nations. Enter vinegar which, when swabbed on the cervix, changes abnormal cells' color, indicating potentially life-threatening cancer.

According the the study, it's "cut the cervical cancer death rate by 31 percent."

Beat that, Honey Mustard!

E(HR)xtravaganza

So the other day, I'm corresponding with the practice manager of one of my physician group clients. This particular PM is extremely professional and knowledgeable, to the point that I rarely hear from her unless I instigate the conversation. I had emailed her regarding the upcoming ObamaTax compliance issue we wrote about earlier this week.

I really just wanted to know if she had any questions, or would like to meet for a mid-year plan review. She politely declined, but what got my attention was her reason: she was knee-deep in implementing new EHR (Electronic Health Record) tech, and that it was proving to be a massive challenge for her - she simply couldn't spare the time for anything else.

This is an obvious problem with such a massive new requirement. But inherent in that challenge is an even greater one: how can smaller practices afford this kind of investment? It is, in fact, one of the most egregious (intended?) consequences of the ObamaTax:

"[F]or those who don’t meet the electronic medical records deadline for implementation, the government has laid out a series of penalties. The message to doctors is clear: implement electronic records or pay a price."

But if you're a small(er) practice, how do you afford this implementation? As Nate pointed out last Fall, "the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients ... hospitals that received government incentives to adopt electronic records showed a 47 percent rise in Medicare payments at higher levels from 2006 to 2010"

Which brings me to my real question: doesn't (expensive) EHR implementation actually encourage smaller providers to seek refuge in (ie be bought out by) larger ones? In the long run, economy of scale will always trump the little guy.

Late Morning LinkFest

■ HHS Secretary Shecantbeserious sure loves her slushies. No, not that kind, this kind:

"A little-noticed part of [the ObamaTax] channels some $12.5 billion into a vaguely defined “Prevention and Public Health Fund" ... the department can spend the money as it sees fit and without going through the congressional appropriations process. The sums involved are vast. By 2022, the department will be able to spend $2 billion per year at its sole discretion. In perpetuity."

Well, at least until the money runs out.

■ As we've long documented here at IB, the Much Vaunted National Health System© has become a (sick) joke, and yet the Brits are only now beginning to "get" it:

"The truth is, though, that these problems have been going on for years. The difference now – and the Government deserves credit for this – is that this dirty linen is starting to be washed very publicly"

What's truly frightening, though, is that at one point, the British government allowed a private group to run an MVNHS@ hospital, one which (when under government control) had been "under threat of clsoure due to poor care and financial deficits."

So what happened when a private consortium of doctors took over? Guess.

■ And, finally, some sobering news from FoIB Holly R, who sends us this very helpful, well-balanced NPR story on the travails of long term care, including this moving and informative video:



"48 years old and single"

Who'll take care of Rebecca?

People don't plan to fail, they fail to plan.

Student Health Exchanges

No, not those Exchanges. These Exchanges:

"Students at [University of Illinois Chicago] covered by the school’s health insurance will have an added benefit come the fall: sex change surgery."

We've long dismissed student health plans as poor values, but we never expected this turn of events.

One presumes that Ms Shecantbeserious is eying this development with a gleam in her eye....

ObamaTax: Another Nail

As we've long documented, one of the (intended?) effects of the ObamaTax is a looming physician shortage. But perhaps some clarification is needed: the shortage is most likely to hit the insured and/or less wealthy demographic first.

Why is that, you ask?

Well:

"Dr. Michael Ciampi [has] ... stopped accepting all forms of health insurance. In early 2013, Ciampi sent a letter to his patients informing them that he would no longer accept any kind of health coverage, both private and government-sponsored"

And to make sure his patients know exactly how that would impact them, he's also taken the full-transparency route (for which we also applaud him) by posting all his prices on-line.

Regular readers may recall our (exclusive) interview with Dr Rob Lamberts last fall, when he explained how his new practice model - Direct Primary Care (DPC) - works:

"The DPC model is one in which the patient pays the doctor directly for their care, usually in the form of a monthly "subscription," plus or minus a fee for visits."

That's different from how Dr Ciampi has evolved his practice; he "collects payment at the end of the visit, freeing him of the time and costs associated with sending bills."

It also frees him to charge whatever he likes (well, whatever the market will bear, anyway) without having to answer to insurance or government bureaucracies. It also means that he can spend more time with patients. Nothing wrong with that.

California's Sneaky Little Trick

There has been much discussion about affordability in the insurance exchanges. From huge potential rate increases to lower than current rates being proposed under Covered California, the range of costs vary significantly.

So it came as a surprise last week when news broke that California's program was showing lower than projected premiums. Ezra Klein called it "Very Good News for Obamacare." Major news networks cited the release telling viewers that premiums were going down.

Then came the rest of the story. Indeed Covered California was going to see a rate reduction for individual insurance. BUT, these plans were compared to the average small group plans. For perspective, the average premium for individual plans sold through EHealthInsurance in California last year was $177 a month. Covered California said the average premium for the three lowest Silver plans statewide was $321 a month, albeit for more comprehensive benefits.

So, why compare 2014 individual rates to today's small group rates? Well, Covered California provided this little gem for you:

"It is difficult to make a direct comparison of low rates to existing premiums in the commercial individual market because in 2014 there will be new benefits and today’s coverage on an actuarial basis is all over the map. The best frame of reference is by looking at current rates available in the small group market in California. Each market is a competitive market with guaranteed issue. Comparing rates to comparable products in the small employer market, rates ranged from two percent above the 2013 average premium to 29 percent below the rates in California’s most populous markets. This is impressive since the 2014 products include doctor visits, prescriptions, hospital stays and more essential benefits."

What's really going to be impressive is if these "preliminary" rates will actually hold.

Cavalcade of Risk #184: Post-Memorial Day Risk-a-thon

Jeff Rose hosts this week's small - but powerful! - roundup of risk-related posts. From fast-food to k-rations, you'll run little risk of being disappointed.

Thanks, Jeff!

MVNHS© Back in the News

Thanks to alert IB reader Peter K, we have two new items to add to our Much Vaunted National Health System© database. Last month, we noted that "[MVNHS©] doctors are prematurely ending the lives of thousands of elderly hospital patients because they are difficult to manage or to free up beds;" this was one side of the coin. It only gets worse, though, when one considers the other side of it:

"Patients undergoing planned operations on the NHS are far more likely to die if they have their operations towards the end of the week ... those who had surgery on a Friday were 44 per cent more likely to die following the procedure than those who had the same operations on a Monday." Of course, when you have an overworked and largely unaccountable group of people providing "care," that TGIF mantra becomes somewhat problematic, no?

It gets worse, though. One of the early criticisms of the ObamaTax is that you'd have care providers with the compassion of the DMV. This is already the case under the MVNHS©, and it's the direction we're headed:

"Almost 3,000 people may have died unnecessarily in just one year at the 14 NHS trusts whose excessive mortality rates were reviewed in the wake of the Mid Staffordshire scandal"

Regular readers may recall that we covered that particular shanda over 4 years ago (and it's still making news):

"Appalling standards of care that may have contributed to the deaths of at least 400 patients at a hospital trust were missed repeatedly by managers and regulators ... at Mid Staffordshire NHS Foundation Trust"

At least they've learned their lesson, though, right?

Um, not so much:

"The worst figures were recorded at Blackpool Teaching Hospitals where, in the year to October 2012, the number of deaths anticipated was 1,947 but actually there were 2,357, a difference of 410." [emphasis added]

This is extraordinary, on several levels. First, whatever are they teaching at this hospital? Advanced courses in euthenasia? Second, that "difference of 410" doesn't seem like so much, until one looks at the fact that they were off by almost 30%.

That's not "margin of error," that's Margin of Kevorkian.

Tuesday Afternoon LinkFest

■ First up, via email, United Healthcare lets us know that its "Early Warning Report forecasts the states, legal entities and group sizes ... that are currently eligible to be issued MLR premium rebates by [UHC] associated with the 2012 calendar year. Any owed rebates will be paid in July ... There are 21 states and two territories in which UnitedHealthcare does not currently anticipate paying any rebates associated with group business"

Don't spend it all in one place.

■ The Council for Disability Awareness has just released its 2013 Research Report, focusing on the differences between how employees perceive disability benefits versus how HR folks understand them. As one might imagine, it's a rather wide gap:

♦ Most HR professionals (84 percent) believe the ability to earn an income is their employees’ most valuable financial resource, yet only 26% thought their employees were adequately prepared to withstand a disability

♦ HR professionals believe their employees are financially vulnerable to a loss of income

♦ Both HR professionals and their employees severely underestimate the odds of becoming disabled

There's more, including the odds of becoming disabled and for how long. Recommended, and available here.

 ■ Some good news and bad news on the ObamaTax front. First, the bad news (from its proponents' POV): voters favor repeal by a 22-point margin. One supposes that will only increase as we head into Fall, and the (scheduled) Exchange roll-out.

 ■ And now the good news (for ObamaTax opponents): businesses are beginning to "get" just how bad this train-wreck is going to be, and more of them are looking to hop on the self-funded wagon:

"[H]ealth insurers are stepping up. Among their latest offerings: allowing ever-smaller companies to switch to a riskier form of coverage traditionally favored by big employers."

I'm sure Nate would disagree (as do I) with the "riskier" characterization, but the point is, going this route is likely to save some big dollars for employers.

There's a bit of irony here: way back in 2006, we had an exclusive interview with the folks at (now-defunct) ACMG, which was just then rolling out a self-funded program for smaller businesses. Kind of a shame that they were so far ahead of their time, but the post is a good introduction to how these plans work, and why they really aren't all that "risky."

E & Ooops

Much like doctors and lawyers carry malpractice insurance, licensed insurance agents carry Errors and Omissions (E&O) coverage. This type of liability policy protects policyholders (clients) if/when the agent screws up, causing financial loss.

Now come the Navigators. In addition to having to pass no background checks or graduate high school, these folks will also not be required to carry any kind of E&O coverage. Which is actually a good thing (from their perspective) because it's not clear that such coverage would actually be available to them even if they wanted it.

Professional liability insurance (including E&O) requires certain things to be true. In the case of E&O, one must be licensed to sell insurance. Okay, Henry, what about someone who isn't licensed, but needs this kind of coverage, such as an IT professional? There's no Ohio Bureau of Geek Licensing, but these folks would be eligible to purchase Professional Liability insurance due to training and expertise.

Navigators may be neither licensed nor certified, heck, they don't even need a high school education to qualify; they'll simply attend 20 to 30 hours of instruction and be sent out the door, where they'll spread their, um, "expertise" to unsuspecting victims "clients." But what happens if/when they screw up? What financial recourse will their "clients" have? Their homeowner's policy (if any) won't cover them because it's business, and it's unlikely that they're independently wealthy (deep pockets).

Where's the consumer's protection?

Co-blogger Patrick pointed me to this article, which reports that Navigators in the Hawkeye State will be required to purchase surety bonds. The problem is that a surety bond is not the same as professional liability; it essentially covers theft of money.

For example, a Navigator tells a "client" that coverage will definitely be in force the next day. Three days later, the "client" has a heart attack and runs up tens of thousands of dollars in hospital bills, only to find out that coverage was not, in fact, in force. The most that "client" can recover from the Navigator is whatever he paid the Navigator for his services, not the huge hospital bills he now owes.

This would be where professional liability (E&O) insurance would come into play had a licensed agent been involved. From the article, it appears that Iowa Navigators must be licensed, so they may, in fact, be eligible for E&O coverage. But this is not the case in all 58 states; and therein lies the rub. Having spoken with two actual experts in this area, neither could think of a carrier that would write this coverage.

Which is not to say that it couldn't be developed, should the marketplace demand it. The problems inherent in underwriting such a plan, though, seem pretty insurmountable. And how would one price this in a competitive way? It's unlikely that most of the Navigators are going to be clearing $96-large; more likely, this will be another part-time job to help ends meet. So how do they afford even a minimum premium (generally hundreds - if not thousands -  of dollars a year)?

Yeah, that's what I thought, too.

[Huge IB Thanks to P&C Gurus Teresa S and Bill M for helping me noodle through this post]

ObamaTax Compliance heads' up

Received a sample notice that will (when finalized) have to be sent from employers to their employees later this summer. If you're interested, click here to download it. It's 3 pages, and pretty scary.

Scary, Henry?

Well, here's the thing. The employer will need to complete this form, and attest that, for example, his group plan meets the "minimum value standard." That is, that "the plan's share of the total allowed benefit costs covered by the plan is no less than 60 percent of such costs."

One presumes that the carrier will notify employers whether their group does, in fact, meet that criteria, but it's not entirely clear that this will be so for all carriers in all markets.

There's a related issue that so far seems to be flying under the radar: Exchanges and participation requirements. All carriers require that a minimum percentage of eligible employees sign up for coverage. This is to help reduce the chance of adverse selection, where only the least healthy enroll. The term "eligible" is somewhat flexible, but in general it's full-time employees who don't have "valid waivers." A valid waiver might be, for example, coverage through a spouse, or Medicare. Oddly, an individual medical plan does not qualify as a valid waiver, so that employee must be accounted for in the grand total.

So here's a question: if an employee opts off the group plan in favor of a (subsidized) individual plan from his state's Exchange, is that a "valid waiver?" This matters - a lot - because if enough folks opt off the group plan, it's going to go away, whether or not this is what the employer (and the other employees) want.

But remember: if you like your current plan, you can keep your current plan.

Or not.

[Hat Tip: FoIB Beth D]

Outstanding Carrier Trick

As we reported almost 8 years ago, in our exclusive interview with its Medical Director Dr Dexter Campinha-Bacote, Aetna has long been in the forefront of health care transparency.

Now, our good friend David Williams blogs that the carrier has "won an Award of Distinction  for its short videos designed to help members comprehend and use their benefits."

David offers some great reasons why he approves of this development, and singles out Aetna's terrific payment estimator in particular:

Kudos, Aetna!

About that Union Label

Nice to see the legacy media catching up with us:

"[S]ome unions leaders have grown frustrated and angry about what they say are unexpected consequences of the [ObamaTax] ... The problem lies in the unique multiemployer health plans that cover unionized workers ... union plans were already more costly to run than traditional single-employer health plans. The [ObamaTax] has added to that cost"

Gee, who could have seen that coming?

Oh, yeah.

And it's not just the unions, either. A large majority of Americans (56%) believe it would be "[b]etter to go back to previous system" (pre-ObamaTax).

And this is before the Exchanges and (Evil) Mandate kick in.

What could *possibly* go wrong - An Update

Last week, we noted that the IRS was knee-deep into building the enforcement mechanisms for the ObamaTax. But just how deep are they really?

This deep:

"The Internal Revenue Service ... has created eight offices and special "teams" to handle the chore, way more than initially revealed."

And just how "special" are those teams? Here's 1000 words on them:

[Click graphic to embiggen]

Hospital Claim of the Day

Received an audit back on behalf of a client. When we can our plans only pay Hospitals their cost plus a 12% profit margin or Medicare plus 20%, which ever is greater. A member went to a new Spine Surgery Center and the bill was $8,300. Medicare + 20% was $620.28. Billed Charges are 1300% increase of Medicare allowable.

Luckily this new facility was out of Network so we don't have a PPO telling us we have to pay inflated prices. Even a 50% discount, top side for this market, would have been over a $4,000 bill.

Cavalcade of Risk #184: Call for submissions

Jeff Rose hosts next week's Cav. Entries are due by Monday (the 27th).

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.