Workers' Comp and The Mandalay

In the comments section at the link to the most recent Health Wonk Review, IB regular BernieFlatters wrote:

"A little off topic, but I read that some "first responders" during the Las Vegas shooting are being denied workers comp claims. What the article doesn't say from the headline is that these guys were at the concert as attendees, not as law enforcement. So they spring into action, get hurt, fly home, make claims because "never off duty" or something like that, and the rest makes a good example why we are a nation of emotions and not laws."

I found this to be particularly intriguing, so I reached out to FoIB (and Workers' Comp guru) Julie Ferguson for her thoughts, which she graciously agreed to share with us:

That’s pretty interesting, but there are no easy answers there.

Workers comp is for injuries that occur in the course & scope of the job. Every state has a slightly different law, but that is fairly common wording. In a case like this, there is a lot of gray.

They call that issue compensability. Was the injury compensable? With any claim, that is the first thing the insurer does is determine compensability. Did the injury happen at work? Probably 90% or more of the cases, that is clear cut, but there are cases like the ones you describe that end up in court.

The cops who were working, if injured, that is a clear case of workers comp.

The off-duty cops who spring into action? Not so clear.  Most laws are clear that it is “in the course and scope of work” and many edge cases wind up in court.   “Never off duty” is not a very precise phrase when it comes to legalities. It would be  nice to think that an employer would just say “gee, that guy did the right thing, let’s cover him” but you have to be consistent and precise about compensability legalities or you can find yourself in quicksand.  Your insurer, lawyer, taxpayers or board of directors  are not likely to accept sentiment as valid legal basis.

Some of these issues came up in a big way in 9/11.  For example, generally people are not covered by workers comp when they are “going to and fro” – traveling to or from work. You’re on your own health insurance plan if you get hit by a car or fall down. But if you are going to & fro and you fall in the employer’s parking lot, you would be covered. On 9/11, so many people were killed on their way to work or on their way fleeing from work that it got to be a big issue.  Were they on the property or weren’t they? Were they working on weren’t they? It was pretty hard to sort out.

Thanks so much, Julie!

DisHartening News

(BTW: That's not a typo - wait for it...)

So FoIB The Political Hat reports that:

"More Millennials Are Turning to Witchcraft for Activism & Self-Care"

I replied that since the alternative was ObamaCare, perhaps that wasn't the poorest choice available.

To which our other good friend, Allison Bell, responded:

"But, really: What do we know about medical witchcraft economics? Maybe there's a lot of inflation in the care to goat ratio."

Which is a fair point, and one that has actually been previously addressed (now):

Shopping Medicare: The Movie

Co-blogger Bob V is trying something new, and we're pleased as punch to introduce his first video on shopping for Medicare supplements. Pretty timely, too, seeing as how it's Open Enrollment season.

Enjoy!

More Life Insurance Horribles

That's not how this works:

"Natalie Finn’s parents took out two life insurance policies on their adopted daughter before the 16-year-old died from starvation and abuse in the family's West Des Moines home"

The fiends "parents" had allegedly purchased a $10,000 Hartford Life policy, as well as one from Modern Woodsman for $25,000.

So this poor girl was starved to death for (a measly) $35,000.

Words fail.

[Hat Tip: FoIB Joe K]

#Affordable (Care Act)

Or, you know, not:

64 yr old couple, Laramie WY, $65k income, above subsidy level, pays $49,000/yr for #ObamaCare Silver. After taxes, lives on $500/month! pic.twitter.com/CQfQs1eunk

— Edw. Mitchell MS MBA (@coldstreams) October 31, 2017

[Hat Tip: FoIB Rich W]

Life Insurance Poser

So this afternoon, I'll be meeting with the widow of a long-time client to file a claim. Matt passed away last week after a brief battle with cancer. It's the worst part of my job, and the best. Complicating matters is the fact that we just re-did his insurance a year ago this past August, which means that the policy is still in the contestability period. I'm not really anticipating any issues, but it's just one more thing.

Still, it's a reminder that, as simple as life insurance can be, there are often exceptions.

Take this case, for example, to which we were alerted by FoIB Jeff M:

"Wife Accused of Killing Husband Can Sue Insurer That Froze Life Insurance Proceeds"

Seems that Mrs Bailey has been accused of murdering her (now late) husband, presumably to collect the $343,000+ in life insurance proceeds. Now, accusation ≠ convistion, but courts generally refrain from allowing the accused from profiting from their crime.

She was indicted, but that apparently wasn't enough to satisfy this court, which basically ordered Pru to pony up, ruling that the carrier could always come back later and pull it back if the widow is convicted.

Gee, I can see no possible way for that to go wrong.

Be interesting to see how this turns out.

Sacrifices

So, despite the fact that I still have no current plans to actually sell ObamaPlans, as a service to my clients (and IB readers), I fell on my sword and spent half the day taking the 2018 Marketplace Refresher Course, for which I received a beautiful certificate of completion (suitable for framing!).

As expected, there really wasn't much new ground covered, although I was once again nonplussed to find this tidbit:

"The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if a taxpayer owes a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to the taxpayer."

Once again I ask: if there's literally no teeth here, how many folks have actually, voluntarily ponied up their "fair share?" And again, I could find no definitive answer on the Interwebs.

Would gladly accept any suggestions or info.

Breaking: CVS & Aetna

Unconfirmed reports about this just popping up:

CVS is in talks to buy health insurer Aetna. Scoop on WSJ: https://t.co/WHcYG0AY65 $CVS $AET

— Dana Mattioli (@DanaMattioli) October 26, 2017

Huge if true (and consummated). Dana is a WSJ reporter, so: credible.

Renewal Mania 2017

Riffing off Patrick's report below: In the past, we've seen how hard even grandmothered plans have been hit by ObamaCare rate decreases. Today got very interesting: email from Medical Mutual of Ohio alerted me to a handful of individual major medical plans with January 1, 2018 renewals.

And for once, it really was a pretty picture (mostly):

■ Out of 6 plans, two had no change (increase) at all.

■ 3 had nominal (a few pennies or dollars a month) increases (one was 7 cents!)

■ 1 had a whopping 5% increase (about $30 a month for a family of four)

On the other hand, the one ObamaPlan that came up experienced a rate drop of 26%, as promised.

Oh, I'm sorry, my bad:

That's a 26% rate increase (over $60 a month for a single, middle-aged lady).

#ACAWinning, indeed.

Just got my Medical Mutual Grandmothered renewals...

Here's the monthly increases by client:

$0.01

$0.02

$0.02

$0.04

$0.44

$10.74

$18.55

While it's not the 3000% decrease we were promised, it's definitely a far cry from the huge increases in the ACA market. 

Health Wonk Review: The Sky is Falling edition

Our good friend David Williams hosts this week's health care policy and polity roundup, all the more impressive because he is recovering from being hit by a car.

As usual, David does a great job of summarizing each post - a very attentive host, indeed!

LTCi "Refresher"

So, I did something dumb. Or rather, I carelessly neglected to do something, and so ended up spending the day yesterday in an 8 hour Long Term Care insurance course, once again taught by the inestimable Ray Copenheaver.

In order to sell Long Term Care insurance (LTCi) here in The Buckeye State, one must take an initial 8 hour training course, and then biannual 4 hour "refresher" ones. The challenge is that it's not just "every two years," but specifically 24 months from the date of one's most recent previous course.

Which in my case was this past August 19th.

And which I completely blew past.

So, in order to continue selling this valuable product, I was required to take the full 8-hour version.

Of course, not that much has changed in the intervening two years 26 months, but two thing piqued my interest:

First, those hybrid life/annuity/LTCi plans (well, the "good" ones) all fall under section 7702B. This is important because it defines which plans' benefits aren't taxable.

The other interesting tidbit was part of the Deficit Reduction Act (DRA), specifically Section 844, which lets retired safety officers (police officers, firefighters, etc) use money from their retirement plans to buy partnership-compliant long term care insurance. There are some interesting "hoops" through which they must jump, but may be worthwhile.

Oh, and I immediately made a note on the October 2019 calendar...

Tuesday Odds-and-Ends

■ "The Hartford Signs Agreement To Acquire Aetna's U.S. Group Life And Disability Business "

This move will apparently create the 2nd largest group life and disability carrier in the market.

Mazel tov (I think)!

■ Via FoIB Jeff M, a story that doesn't quite pass the smell test:

"Insurer allegedly sends coverage denial letter to 9-month-old with brain cancer"

Supposedly, the vital treatment was denied due to "medical necessity," or lack thereof, actually.

As I told Jeff, though, I see the term "allegedly" more than once in that story. There's also no mention of appeal, which would have been automatic, and no indication that anyone's been in contact with the DOI. We've seen something similar before, so I'm a bit skeptical at this point.

Still, a big deal if true.

■ And this, also from Jeff M, who is obviously lying:

"Tens of thousands of North Carolinians got letters in the mail from Blue Cross Blue Shield this week, saying their already steep monthly health insurance premiums will close to double in many cases starting January 1"

Looks like someone misspelled "3000% rate decrease."

Dragonlock 3 Kickstarter Counting Down

If you're a gamer you need to at least take a look at this, especially if you're even thinking about making the move to 3D printing.

FoIB Fat Dragon Games has pulled out all the stops: cutting edge designs, outstanding stretch rewards and excellent support.

Take a look.

Making Strides: Lagniappe and Gratitude

Well that was a great time: Yesterday was our Making Strides Against Breast Cancer walk. Thanks to the generous contributions of our friends and family, I was privileged to raise over $1,000.

Collectively, our team raised over $3,600, and came in 9th out of 480 teams.

Wow!

Thank you so much to all of you who so generously supported this wonderful opportunity!

Making Strides Against Breast Cancer: Last Chance...

Once again, I'm raising money with my team: Love, Hope and Faith. Our walk is tomorrow (October 21st) and I'd really like to break the $1,100 mark.

Will you please help out by making a donation - Thank You!!

Thank you!

3D Kickstarter Counting Down

FoIB Fat Dragon Games' latest 3D DragonLock Kickstarter is winding down, and if you're even the least bit interested in cutting edge 3D printed game terrain (or think you some day might be), this is a must-have:

"Snap-link dungeon terrain on Kickstarter, don't miss out on FREE stretch rewards, and our GM SCREEN OF DOOM"

Cost Sharing Reductions: It's Not Sabotage. It's Not a Bailout: Part 2

In Part 1, we learned the difference between subsidies and the much misunderstood CSR's, and why ending the latter isn't a bailout. Now we learn why it's also not "sabotage:"


It's Not Sabotage

Obviously if the Government won't pay their obligation and an insurer still must offer the better level of benefits they will have to factor these expected claims costs into their standard rates. This will push premiums up substantially. Many studies have been done on the financial impact but for ease of math let's assume it will increase costs to Silver plans by 20%.

Yes, 20% is a lot. But keep in mind rate increases in 2014, 2015, and 2016 all rose by significant amounts too. We didn't hear cries of "sabotage" back then. Instead we heard "this won't impact very many people because subsidies (tax credits) will protect them from the increases." So, how is this different? It's not. In fact, because the increases are on Silver plans it will raise the tax credit amounts and reduce the costs for Bronze, Gold, and Platinum plans to those who qualify for subsidies.

This leaves one income group potentially getting the shaft on Silver plan premiums. Anyone who doesn't qualify for a tax credit/subsidy must pay full price. It's easy to assume that these people will suffer because all the discussion - even in this post - has focused for insurance plans sold ON exchange. It's true that insurers must price the same product equally both on-exchange and off-exchange. But, insurers can also offer plans off-exchange that have slight benefit variations at different prices.

Using my example above, an insurer will offer this plan both on and off exchange. The new plan without CSR funding will cost 20% more. The smart insurer will also create a plan that closely mirrors their original plan with a slight tweak - let's say a $6,200 deductible. Because this plan is only offered off-exchange the insurer doesn't have to include the 20% mark up to fund CSR risk. This solves the problem of the 400% and above person not being able to afford a Silver plan.

So, who does this hurt? Over the next 10 years CSR payments are expected to cost more than $200 billion. It's either going to come from Congress appropriating the funds or through higher premium tax credits given to consumers.

The answer is it hurts everyone. Because those in DC want to focus on political agendas and not the real problem we all suffer. Higher taxes, higher premiums, lesser benefits, market uncertainty. All will continue. Because nobody wants to focus on the 80% side of the equation. That 80% side is the actual costs of care.

Cost Sharing Reductions: It's Not Sabotage. It's Not a Bailout: Part 1

Congress and the media are hyperventilating over the Trump Administration announcement that they will end Cost Sharing Reductions (CSR). The result is news feeds full of over-exaggeration, misrepresentation, blatant lies, and name calling. One side of the political aisle calls it sabotage. The other says it's an insurer bailout. Reality is, it's neither.

Before I explain, let's first start by answering what is the cost sharing reduction (CSR) and how does it work? It's quite simple when it's not used as a political football. But, like everything in our political world, the more the bureauweenie can confuse the consumer, the more reliant the consumer becomes on the bureauweenie.

Obamacare has two methods of "financial assistance" written in to the law to help low income individuals. The first method is premium tax credits to help pay health insurance premiums. Those have been funded and have nothing to do with the second method, CSR's.

Under Obamacare, insurance companies are required to offer people making between 100% and 250% of the Federal Poverty Level Silver level insurance plans that have lower deductibles, copays, coinsurance and out-of-pocket-maximums than the standard Silver level plans. Pricing for these plans are equal to Silver level plans that don't include the CSR's. In exchange for offering these better benefits to low income individuals, Obamacare made a promise that they would refund insurers for the claims they incur between the better benefit Silver CSR options and the standard Silver plans.

Here's an example: three 42-year old's who live in the same zip code that purchase insurance through the exchange. Each has a different income. The first has an income of $19,500, the second has an income of $30,250 and the third an income of $55,000. The actual monthly cost of the lowest priced Silver plan is $248.57. It includes a deductible of $6,100, an out-of-pocket limit of $7,000 and has an office visit copay at $30.

The first person has an income below 250% of the poverty level and the other two don't. So, under Obamacare the first person is eligible for a premium tax credit (subsidy) AND a Silver plan that has better benefits (CSR). His benefits include a $1,100 deductible, an out-of-pocket limit of $2,000 and an office visit copay of $15.

The second person has an income just above 250% but below 400% of the poverty level. Under Obamacare he is eligible for a premium tax credit (subsidy) but not a Silver plan with CSR. He will pay less than the full premium price but have the standard plan with a $6,100 deductible.

The third person is over 400% of the poverty level. He pays full price for the standard insurance plan.

Now that we understand CSR's let's explain why it's not a bailout or sabotage.

It's Not a Bailout

When insurers price their plans they are based on the standard plan. This is where the $248.57 premium comes from. The insurance company math nerds (actuaries and underwriters) develop rates based off assumed risk. This risk does not include the difference between the standard plan benefits and the better plan benefits available to those between 100% and 250% of FPL. The Federal Government -through Obamacare - agreed to reimburse insurers for these claims that they have not financially accounted for.

The amount the insurer hasn't accounted for is the difference in deductible, copay, coinsurance, and maximum out-of-pocket the consumer is liable for. Let's assume all three guys from above have a claim for $25,000. The lowest income guy is only liable for a maximum of $2,000. The second and third guys would be liable for $7,000. Insurers priced for $7,000 out-of-pocket knowing that Obamacare promised to pay the difference in claims between the standard plan limit and the better benefit limit due to Cost Sharing Reductions. In this scenario the difference in the first guy's liability and the standard liability ($7,000-$2,000) would be submitted by the insurer to the Government for reimbursement. It's also important to note that if the first guy is healthy with no claims the Government doesn't pay the insurance company at all.

As you can see, this isn't a bailout to insurers. It's reimbursement for claims they incur that weren't factored in to insurer pricing. Under Obamacare the law states that CSR's are a financial obligation of the Federal Government to insurers. Failure to pay represents a default of our Government.

We explain how it's not "Sabotage" in Part 2.

Canary in the Coal Mine – This Sceptered Isle, Part LXXIX

“The NHS will ban patients from surgery indefinitely unless they lose weight or quit smoking, under controversial plans drawn up in Hertfordshire.”

Unprecedented abuse of power by NHS?  Well of course it’s abuse of power.  But unprecedented?  Not so much.  Remember this? 

"You must go blind in one eye before NHS will treat you"

Fortunately, the public outcry over that one caused NHS to back down.  Who knows what NHS will do this time?

People who believe these things cannot happen in the US are seriously misinformed. Nearly the same thing happened in my own town.  It happened to neighbors of ours whose daughter was diagnosed with mitochondrial disease.  And then the hospital and bureaucrats in the State of Massachusetts took over and tortured the whole family for years.  

People who say nothing like this happens in a nationalized insurance scheme are living in a dream world. These situations will surely arise in the US even if  - and maybe especially if - we end up with some kind of government single-payer medical welfare scheme.

Mark my words.