Friday, September 19, 2014

Essential Re-Calculating

Feature or bug?

"A flaw in the federal calculator for certifying that insurance meets the health law’s toughest standard is leading dozens of large employers to offer plans that lack basic benefits"

This problem poses several challenges:

First, if your company's health plan is deemed to be ObamaTax-compliant by the calculator, then you're likely not going to be eligible for any subsidy if you opt for an Exchange-based plan instead.

Another issue is that the calculator seems to be approving plans that lack hospitalization coverage, one of the the key essential health benefits (EHBs). That doesn't necessarily mean that employers are actually offering such plans, but it's a bit disturbing to think that they could.

But I think that Kaiser buries the lede here. It's only when you scroll down that you see this little gem:

"HHS is aware of potential problems with the calculator but has not changed it"

Now, there could be several innocent reasons for this. For example, based on their top-notch efforts rolling out the site, they may not be competent to even address the issue. But I wonder what will happen to employers who rely on the calculator, offering "sub-par" plans to their employees. If and/or when this issue is resolved, what kinds of penalties will they face (if any)? And how many employees will have substantial and unreimbursed hospital expenses while this gets sorted out?

It's just one more example of the real-world consequences of incompetent government over-reach.

Thursday, September 18, 2014

Of Gas Lines and Med's

Those of us of a certain age recall the gasoline shortages of the early 70's. Oil prices had jumped considerably, and so the government (in its infinite wisdom and keen understanding of market forces) put in place price controls, basically telling the oil companies how much they could charge for their product.

As one might expect, these companies, faced with the reality that they were going to lose money on each sale, began to limit availability of their product. This lead to the infamous "gas lines," where folks lined up to purchase their 10 gallon maximum, every other Thursday between 9:00AM and 1:00PM.

I'm reminded of this because of a rather silly piece in yesterday's New York Times, with the deceptive title "How Insurers Are Finding Ways to Shift Costs to the Sick."

First, the Grey Lady gets the premise exactly wrong: by purchasing insurance, consumers shift their risk to the carrier, not the other way around. All that a carrier can do is to limit the amount of risk it's willing to assume.

In the event, the point of the article is that some carriers, chafing under the restrictions placed on them by the ObamaTax but still needing to turn a profit, necessarily have to find ways to limit their exposure. One way is by the use of "narrow networks," whereby fewer and fewer providers are actually in-network.

But that only goes so far: a lot of people are on some form of prescription, often a "maintenance" one (for chronic conditions). Many of these are of the generic variety, which used to be the most efficient way of reining in out-of-control med costs. Unfortunately, this has proved to be insufficient for the task. So what's a carrier to do?

Well, if they're smart (and they generally are), they'll do what Shell and Sunoco did 40 years ago, and cut their losses. Limiting how much they'll pay for generics, or even which generics they'll cover at all, is simply their version of a gas line. To categorize it, as the NYT does, as "trying to skirt the spirit of the [ObamaTax]" is not only pernicious, but irrelevant: they are doing what they need to do to stay in business. It's perfectly understandable, perfectly legal, and it's what happens when the heavy hand of government meddles in the market.

[Hat Tip: David Harlow]

Wednesday, September 17, 2014


The 2015 Obamacare open enrollment is less than 2 months away and already some carriers
have cold feet and are ready to bail.

With less than 4 months of credible claim data to work with the "Blue Ox" of Minnesota is pulling the plug.
PreferredOne, the insurer that sold nearly 60 percent of all private health plans on Minnesota's Obamacare exchange, on Tuesday said it would leave that marketplace. PreferredOne's plans were the lowest-cost options on that exchange, known as MNSure.
PreferredOne cited the costs of doing business on MNSure as the reason for its surprising decision, saying that selling plans is "not administratively and financially sustainable going forward,"
Well duh!
For those who came in late to class, under Obamacare insurance carriers
  • abandon almost 100 years of risk model pricing
  • are told what is to be covered
  • are told who is to be covered (anyone who can fog a mirror)
  • have pricing margins dictated by DC
  • if rates are deemed too high (arbitrarily, no guidelines of course) are required to back down
  • are prevented from asking health questions other than tobacco use
  • must apply community, unisex rating models with strict 3:1 age banding
In other words, the rocket surgeons in Congress have written a law about a topic they clearly do not understand and passed a law under cover of darkness that was never read before counting the (party line) votes.

What could possibly go wrong?


But enough about them. What possessed a new carrier (provider-owned, no less) to jump into a market without any practical experience or firsthand knowledge regarding day-to-day management?

Probably the same thought process used by those who voted for a one term Senator who lacked real world experience and had the thinnest resume' of any prior presidential candidate.

PreferredOne's relatively low-priced plans on MNSure for the 2014 enrollment season were a big reason why 59 percent of the 47,902 people who bought health coverage on the exchange by mid-April selected the insurer.
Those customers now face the prospects of higher rates if they want to remain in those same plans next year, as is their option, while existing customers of other insurers and new customers in the market will have fewer price options from which to choose.
Any fool can write to gain market share by offering the lowest price.
Who will be the next carrier to bail?

Exchanges, Carriers and Ch-ch-changes

Just because the Federal Exchange is a hot, hacktastic mess, there's no reason to think that those run by individual states are in such sorry shape.



"Maryland officials are planning a gradual rollout of the state's health insurance website to avoid problems"

Oh? And what kind of "problems" are we talking about?

Oh, those kinds of problems:

"... glitches can be worked out and the system won’t be overwhelmed with requests"

Yeah, one could see where that might be a problem. After all, there'll likely be tens (hundreds?) of thousands of Old Line State citizens eagerly shopping for their new - or replacement - ObamaPlans. Would be kind of embarrassing if they crashed the system.


Meanwhile, the folks behind the Green Mountain State Exchange have actually shut it down, albeit only temporarily [ed: uh-hunh]:

"Anyone clicking on the Vermont Health Connect website sees a message in bold black letters on a pale green screen that advises the site is down for maintenance."

Must be pretty heavy duty, since the closure is set to last for "weeks before health insurance customers would be able to resume buying plans, check accounts or pay electronically on Vermont Health Connect."

Interesting choice of words, that: "weeks."

It doesn't take long for "weeks" to become "a month." Or months.

And it's not just the folks Back East who are in for some potentially unpleasant surprises. FoIB Jeff M alerts us to this alarming development in The North Star State:

"PreferredOne, the insurer that sold nearly 60 percent of all private health plans on Minnesota's Obamacare exchange, on Tuesday said it would leave that marketplace."

Unsurprisingly, P1 offered the lowest rates on that Exchange.

No way there could be a connection between these two facts, though,


Cavalcade of Risk #217 is up!‏

Rebecca Shafer turns in another great roundup of risky posts, from Dopey Audacity to Your Mama's WC (Worker's Comp):

Do check it out!

Champions? Are You Serious?

I happened to run across a webinar invite for assorted Obamacare helpers that included the
term Champions for Healthcare.

What the heck?

So I asked Prof. Google and here is what I found.
Millions of people signed up for health coverage in the initial year of the federally-run Health Insurance Marketplace. For 2015 coverage, the open enrollment period will run from November 15, 2014 to February 15, 2015. Champions are key to sharing this information with their networks and communities.

Another DC giveaway program that spends taxpayer money instead of using EXISTING conduits (that would be insurance agents) with several years of experience educating people about health insurance options.

This is like spending a billion+ dollars on a website that STILL doesn't work vs. hiring someone in the private sector that had EXPERIENCE creating a health insurance shopping mall build it for you.

But then, "they didn't build that".

How many taxpayer funded "partners" and Champions are out there?

We don't know the exact number but there are at least 900 entities that got funding to promote Obamacare.

How much taxpayer money is at stake?
Last week (prior to August 22, 2013), HHS awarded $67 million to 105 Navigator grant applicants.  More than 1,200 community health centers across the country have received more than $150 million to help enroll uninsured Americans in coverage.

And $150M is just the tip of the iceberg.

For what it's worth, I know people who have spoken with navigators and similar entities and the feedback clearly indicates most of those people have no clue what they are doing.

Why does this not surprise me?

La plus ca change,

Another week, another security scandal. The latest iteration come to us courtesy of the General Accounting Office:

" [sic], President Barack Obama's health insurance exchange, has security and privacy protection vulnerabilities ... despite steps taken by [CMS] for security and privacy protection, weaknesses remain in the processes used for managing information security and privacy."

No kidding.

But here's something that seems to be under the radar, and which I think may prove to be another major problem for those of us who continue to sell health insurance:

Yesterday, a very nice gentleman called, referred to me by another agent, looking for help and advice on purchasing health insurance. His COBRA plan is due to expire soon, and he needed help figuring out what to do. As is typical in these interactions, I took some basic information (age, tobacco use, etc) and asked about his current plan. Eventually, we got to the part about subsidies; like so many people, he really had no idea what that was all about.

So we discussed how the program works, the criteria for qualifying, that kind of thing. And then I explained to him that, if he qualified for a subsidy, and wanted to take advantage of it (not necessarily a no-brainer), then he would eventually find himself interacting with the government's website, and potentially exposing his personal, financial and medical information to hackers.

Which got me to thinking: if I assist a client in enrolling through the site, and their information is hacked, am I culpable? After all, I was the one that sent them there, and perhaps helped them complete the necessary steps. But for my efforts, said client may never have visited the site, let alone participated in the information-gathering process, and thus not become hacker-bait.

Kind of a scary thought, no?

Tuesday, September 16, 2014

It's a dog eat dog (insurance) world
It was marginally amusing when Baxter Smith was successfully enrolled in an ObamaPlan. After all, the 14-year-old Yorkie was simply an innocent bystander:

"Smith ... had to sign up for coverage through the state exchange because his health insurance plan was cancelled under ObamaCare. He isn’t sure how Baxter wound up getting enrolled instead, but he ... did give Baxter’s name as a security question as part of the registration process."

And perhaps it wasn't a total waste. The Medical Device Tax impacts vet's offices, too:

"Some vets say they can’t afford it ... “I’m extremely concerned how this is going to be a hidden tax to our consumers that is going to be passed on.”

So, what to do?

Well, we've recently partnered with Hartville, one of the oldest - and largest - pet insurance programs, to offer readers a reasonably-priced plan that could reimburse up to 90% of your pet's health care costs. There are three benefit levels available, but they all cover exams, meds and even MRI's.

Click here for a brochure and here for a quote.

Life is short...

About two years ago, we took a gander at the cost of end-of-life-care:

"$33,382 for one hospital stay. $43,711 for the next. And a final $14,022 for the last three days of life. This is the cost of dying in America"

One imagines that these figures haven't changed much, and certainly that they haven't gone down. Still, it's something many of us have faced or will face, whether for ourselves or (often) a loved one. When to "pull the plug" is rarely an easy decision, but a company called Vital Decisions may be on to something:

"Imagine you're at home. Maybe that's in Florida, Wisconsin, Rhode Island, wherever. You have cancer. You just had another round of chemo, and the phone rings ... This is no telemarketing call - it’s about the end of your life."

Vital Decisions employs 50 social workers who reach out to folks to offer counseling and other assistance, even offering to reach out to the patient's health care provider or other family members.

The service is paid for by the insurer.

It's an interesting article, and a fascinating story, but there are a few details that remain unclear to me:

First, although it mentions that the service is provided and paid for by insurance companies, it doesn't say how Vital Decisions gets looped in./ One imagines that a participating carrier has a set of criteria, and once an insured hits a certain point (discernible from their claims history), the file is forwarded to Vital Decisions. According to the article, this practice is permissible, but I'm a little wary of that. I also wonder how amenable the health care providers are to discussing case details with the service, regardless of the patient's approval.

One can see why an insurer would want to bring in a 3rd party: it would seem, well, a bit self-serving for the carrier itself to suggest less-than-heroic measure, however rational that may actually be. By subcontracting this out to another party, there's a sort of arms-length quality to the discussion.

And there's this:

"By Daitz’ own rough estimate, the company’s services have resulted in about $10,000 less in health care spending per patient, “$100 million to the health care system in 2014.”

That's a lot of health care dollars not being spent, which may well be a good thing. But I'm also wary of looking at one's life as a series of calculations. No question that many folks would suffer a great deal less if they moved from acute to palliative care, and Vital Decisions claims that this is at least partly because "critical conversations about end-of-life care just aren't happening enough and the company's goal is to foster them."

That in and of itself seems pretty admirable. On the other hand, I can't help but think that insurance companies are not hiring companies like Vital Designs in order to just spend more money: they have a real incentive to cut costs. And that's also not a bad thing: again, look at those numbers from 2012. Since health care costs drive health insurance costs, it's to everyone's benefit to look for meaningful, justifiable ways to rein in spending.

What say you? Is this a good way to encourage end-of-life-care decision-making, or simply another way for carriers to cut costs?

Monday, September 15, 2014

If you like your plan...Well, too bad, so sad

Alert reader Jeff M sends along this timely reminder of the upheaval the ObamaTax has had on those most vulnerable:

"Two of Pattie Curran’s three sons have rare bone marrow failure syndrome combined with a secondary mitochondrial disease ... this Piedmont-Triad family “has witnessed their family’s insurance coverage slip away as premiums, deductibles, and medication co-pays have drastically increased"

And that's just for things that are covered. It actually gets worse.

Much, much worse:

"Pattie has now been notified that her sons’ life-saving compounded medications will be dropped from coverage all together as of September 15"

September 15 - hey, that's today!

And this despite her son's doc, who diagnosed the Mitochondrial Disease in the first place, actually wrote a letter to the carrier explaining why the med was so critical, and that there's really no substitute for it.

The challenge with ObamaPlans is that which plagues any "one size fits all" program; it's only half the sentence: "... but not very well." In order to comply with ObamaTax regs, carriers have had to re-write their plans to fit a band of specific benefits - no more, no less.

It's probably not much consolation to Ms Curran that her son's policy does cover birth control pills.

Here's more:

Obamacare 2.0, Outlook Not So Good

Obamacare 2.0 is about to be unveiled (after the fall election, of course) and already skeptics are Don't count on it going well.
playing "what if?". The automatic renewal process for those who don't pick a plan by December 15, 2014 may be disappointing.

If you bought an Obamacare plan any time in 2014 that plan will automatically expire on 12/31/14. If you don't pick a new plan your carrier will pick one for you.

Assuming that carrier is returning for 2015. If you think your current plan will be available in 2015, don't count on it.

If your plan is subsidized by working taxpayers, your credits may increase or decrease for 2015. The government will apply the same subsidy amount your guesstimated for 2014 against your 2015 plans.

It is very doubtful things will work out if you opt for the automatic route.
But consumers who go that route may regret it. They risk sticker shock by missing out on lower-premium options. And they could get stuck with an outdated and possibly incorrect government subsidy. 

I doubt there will be lower priced plans for 2015. Signs point to increases of 10% or higher rates.
Of those enrolled this year, the overwhelming majority received tax credits to help pay their premiums. Because those subsidies are tied to income, those 6.7 million consumers will have to file new forms with their 2014 tax returns to prove they got the right amount.
Sounds great, but when will you file your 2014 taxes?

Most likely it will be AFTER open enrollment closes on February 15.

What could possibly go wrong?
Insurers say they continue to worry about connections not fully straightened out between their computer systems and the government's.
They also are concerned about retaining customers. One quirk troubling the industry is that policyholders who want to update their subsidies and stay in the same plan will have to type in a 14-character plan identifier when they re-enroll online. That's longer than a phone number or a Social Security number, and customers may not know where to find it.

So will things be different?

Without a doubt.

Friday, September 12, 2014

Observable results

Years ago, my youngest had a particularly painful episode which necessitated a trip to the ER at the local Children's Hospital. She actually stayed there overnight, but was not technically admitted.

I never really understood that, but was told it had to do with billing and insurance issues. Fortunately, she responded quickly and was sent home 23 hours after we arrived.

That 23 hours is the key: had we stayed just 60 more minutes, it would have been considered an "admission,": and additional costs involved. On the other hand, no one ever asked me what we wanted to do; apparently, my opinion about my daughter's care was unimportant. In fact, I didn't actually put 2+2 together until after we were home, and I had spoken with others more knowledgeable than I on these matters.

Reason I bring this up is because of this little doozy from Kaiser Health News:

"An increasing number of seniors who spend time in the hospital are surprised to learn that they were not "admitted" patients -- even though they may have stayed overnight in a hospital bed and received treatment, diagnostic tests and drugs."

So far, this sounds eerily familiar.

In the case of Seasoned Citizens, though, there may well be a very good reason for the 23 hour cut-off:

"Seniors must have three consecutive days as admitted patients to qualify for Medicare coverage for follow-up nursing home care"

That is, Medicare will only pay for follow-up care in a nursing facility if you've been admitted to, and stayed at least 3 days in, a hospital.

[By the way, this may be why so many folks believe - erroneously - that Medicare will cover their Long Term Care expenses.]

And, of course, different insurance plans may treat a 23 hour stay very differently than an actual admission:

"Because observation care is provided on an outpatient basis, patients usually have co-payments for doctors' fees and each hospital service"

There may be additional expenses for needed medications, as well.

So, what to do?

Well, first of all, make sure you understand what your specific plan says about "observation stays" versus actual admissions. And where possible, ask your attending or other staff how they're going to code this particular claim. There may be little or nothing you can do about that, but knowing how it's likely to be billed may at least give you an idea of what your out-of-pocket's going to be.

And knowing is half the battle.

Lyin' liars gonna lie...

Due to the ObamaTax, nearly a quarter of a million Virginians will lose their current healthcare plans.

So says NBC's Sharon Gregory.

To which Harry Reid replies:

So, who ya gonna believe?

[NBC clip Hat Tip: FoIB Holly R]

Cavalcade of Risk #217: Call for submissions

Rebecca Shafer hosts next week's edition. Entries are due by Monday (the 15th).

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.

We need hosts for Fall Cav's - Please drop us a line to claim yours. It's easy, fun and a nice traffic bump. Thank you! 

Thursday, September 11, 2014

Get a Life!

The fine folks at MassMutual remind us that September is Life Insurance Awareness month. And they've even come up with a quick, easy and helpful widget to help you figure out how much you are worth (well, financially speaking, anyway). Click here for that.

And believe it or not, the LifeSpan calculator that we posted on 5 1/2 years ago is still, well, live.

So what are you waiting for?

Health Wonk Review is up....

David Williams hosts this week's collection of posts on health care policy and polity. As usual, he has a great selection and helpful context. Do check it out. the Sequel

Hard to believe it has been almost a year since Obamacare gave birth to 

The first year for was in many ways no different from the first year of life for a newborn.

The crying, constant attention, midnight crises, messes that need to be cleaned up. This billion dollar baby was never really ready for prime time.

And it still isn't.

Bob Laszewski at Health and Policy Market pretty much nails it.
With almost no valid claims data yet and the "3Rs" Obamacare reinsurance program, insurers have little if any useful information yet on which to base 2015 rates and the reinsurance program virtually protects the carrier from losing any money through 2016. I've actually had reports of actuarial consultants going around to the plans that failed to gain substantial market share suggesting they lower their rates in order to grab market share because they have nothing to lose with the now unlimited (the administration took the lid on payments off this summer) Obamacare reinsurance program covering their losses.
We won't know what the real Obamacare rates will be until we see the 2017 rates––when there will be plenty of valid claim data and the Obamacare reinsurance program, now propping the rates up, will have ended.

This kind of analysis has flown under the radar, at least for the general public.

The translation goes like this.

Those who bought subsidized Obamacare plans haven't really seen the impact this new way of doing business has pushed premiums higher. Taxpayer funded subsidies hid the real cost of health insurance from the participants.

On the carrier side the scenario is similar. At this point the carriers have less than 6 months of real claim data and it is probably more like 3 months.

In addition to nominal claim data the federal reinsurance program (also funded with tax dollars) will shield the carriers from realizing the impact of large claims. 

2015 rates are just a wag at this point.

It will be another 2 years before the claim data is mature enough to evaluate AND the government reinsurance program goes away and carriers realize the real cost of this mess.
The backroom is not built yet––a year and counting after it should have been.
How many people are enrolled in Obamacare? Without a government to insurance company accounting system yet built, no one knows. 

Yes, that's right. is still incomplete. No one really knows how many people are insured, how many have paid, how many received a subsidy (but weren't legally entitled to), and how many that bought coverage on the exchange had prior coverage.

In spite of the claims of success by D.C. the truth is, they don't have the metrics to back up their claims.

And they probably don't care since they are accountable to no one.
While the administration tells Obamacare policyholders their automatic renewal will go smoothly, the fact is every one of these subsidy-eligible people needs to go to the exchange website and re-enroll. 
Major glitch.

This is deja vu all over again.

Even if you like your Obamacare plan you can't keep it.

Even if you like your taxpayer subsidy you can't keep it.

You have to re-enroll via healthcare.flub to find out what your new plan and new subsidy will be.

An estimated 5 million will need access to in order to complete the re-enrollment process plus an estimated 5 million new enrollees will the site be ready?

Oh, and did I mention the window of opportunity begins on 11/15/14 and ends 30 days later?

No worry.

Been there done that with the "energy crisis". Some of us are actually old enough to remember endless waits in line just to get $3 worth of gas.

Of course gasoline was a lot cheaper then.

And so was health insurance.

Want to Save 25% on Obamacare Insurance?

A couple of small known facts about Obamacare could provide a savvy (though not necessarily smart) purchaser of health insurance with a way to save 25% on their annual premiums.

1. The grace period for not paying premiums until an insurer cancels an insured is 90 days (on exchange).
2. The amount of time one can be uninsured before they are subject to the individual mandate tax is 90 days.

Couple these two items above along with open enrollment that includes no pre-existing conditions, guaranteed issue, and community rating and consumers can take advantage of the following loophole.

Let's say I purchased my Obamacare plan last year and paid my premiums on time from January through November. I just got my invoice for December but have decided that I'm going to roll the dice for the short term. December and January pass and I have yet to pay either premium. It's now February 28th - my 90th day without paying for insurance. I've had zero claims and went into between February 1st and February 15th and enrolled in the exact same plan I had last year for 2015. The new plan takes effect on March 1st.

No premiums. No penalty. Perfect cancellation date. Obamacare!