Monday, June 04, 2012

And that's why we call it ObamneyCare© [UPDATED & BUMPED]

And not just ObamaCare©:

"...former Bush HHS Secretary Michael Leavitt – the man who, according to Politico, is likely to become Mitt Romney’s chief of staff ... Leavitt has said some relatively positive things about certain elements of Obama’s health reform law ... “We believe that the exchanges are the solution to small business insurance market"

This is the man who would lead a Romney transition team.

UPDATE: In the comments, Mike has a solid rebuttal to my dragging Romney along. One of the great things about the IB crew is that we don't always see eye-to-eye, and I think that gives us an even broader perspective. Here's Mike:

"And that's why we call it ObamneyCare©"

Perhaps that is not being completely fair to Romney.

According to Avik Roy in Forbes this past April:

it is more accurate to say that the federal Affordable Care Act is modeled after the Democratically implemented version of the Massachusetts law, as opposed to the one that Romney had sought.”
Other snippets:
Just prior to the ceremony, Romney’s aides had announced that the Governor would be vetoing several key provisions of the bill, including its employer mandate
In the end, it didn’t matter what Romney thought about the employer mandate. The Democrats controlled 85 percent of the legislature. After the bill-signing ceremony was over, they went back to the State House and overrode each of Romney’s eight vetoes.”
There’s lots more in Roy’s article.  It’s lengthy but well worth reading the whole thing.
From an Anthem email I just received:

"Earlier today, our parent company announced it entered into an agreement to acquire 1-800 CONTACTS"

Oh, goody!

Now, if they'd only pick up PetMeds, we'd be in business.

Oh, you're probably wondering why WellPoint scooped up the contact lens retailer. Well, according to their press release, WP is looking to expand its non-insurance business.

And who can blame them?

Asked and Answered

FoIB Holly R sends us this poser:

"Are we in for a break from health care hikes?"

According to the linked article, "[h]ealth care spending is expected to grow next year by 7.5 percent, which is historically low"

The author cites economic woes and "cost-conscious" patients for this apparent good news.

Unfortunately, the real answer turns out to be less hopeful:

"Ed Fensholt, a compliance specialist at Lockton Companies L.L.C., Kansas City, Mo., said his firm believes that PPACA requirements already are increasing the typical client's health coverage costs about 2% to 3% and adding $1 per employee in health plan tax costs."

So there's the theoretical world (of staff reporters) and the real world (of actual business folks).

Which one are you going to believe?

FSA's meet ObamneyCare©

From email:

"On May 30, 2012, the Internal Revenue Service (IRS) issued a Notice on the new $2500 Limit on Health Care Flexible Spending Accounts (FSAs). The Notice clarifies that this provision of [ObamneyCare©] applies to plans beginning after December 31, 2012 ...

The limit applies on an employee-by-employee basis rather than per household"

Currently, folks can contribute up to $5,000 per household to the health care portion of their Flex Account. Beginning next year, that gets slashed in half (unless one's spouse also has access to an FSA through his/her employer).

Just another ObamneyCare© tax increase.

[Hat Tip: Cigna]

Sunday, June 03, 2012

O, What Fresh Hell is this? Part II


I believe this is still the most recent IRS guidance on taxability of MLR rebates.  The answer is “yes” and “no”.  (What did you expect?  This guidance is from IRS.)

The guidance is in the form of FAQ's - there are 15 of them.  The first one discusses the tax impact on insurance companies that make rebates.  The remaining 14 describe the tax impact on insured persons who receive rebates.  In summary, the Answers to the 14 Questions about individual insured persons are:

2.   NO
3.   YES
4.   YES
5.   NO
6.   NO
7.   YES
8.   NO
9.   NO
10. YES
11. YES
12. YES
13. YES
14. YES

If you are still awake, that’s 8 “yes” answers and 5 “no” answers.

Are we clear?

Fun fun fun boys and girls.

Saturday, June 02, 2012

Outside of the box generic solutions

Rx shortages have now become the norm:
At the Henry Ford Hospital in Detroit, pharmacists are using old-fashioned paper spreadsheets to track their stock of drugs in short supply - a task that takes several hours each day.
Self funded employers should come together and partner with Wal Mart or a mail order facility and form a non-profit, US-based generic pharmaceutical company. This way they can guarantee themselves an affordable supply of generic medications. With a guaranteed market they could have consistent supply runs.

Once that is established then they can aggressively start challenging patents. Instead of the current games of exclusive 6 month periods at inflated prices and years in court with BS legal arguments once a patent expires, they file to make the drug; if the brand manufacturer challenges,  then they all exclude the drug from coverage.

Friday, June 01, 2012

What Fresh Hell is this?

As Mark Twain once said, "Life is just one damned thing after another."

The May 31, 2012 Wall Street Journal contained this tiny article buried on Page B6 that said (subscription required):

“CVS Caremark Corp.'s pharmacy-benefit business is prepared to escalate a campaign against drug-industry coupons that the company says encourage unnecessary use of expensive brand-name drugs.”

CVS Caremark has an obvious interest in promoting generics because of its enormous mail order business, in which dispensing generic drugs is quite profitable.

Oh the other hand, manufacturers make more money from brand-name drugs. So naturally a battle is escalating. But there's more to the story.

The effect of manufacturer’s coupons is that people aren't required to pay the full retail price. The manufacturer is giving a price reduction to the coupon holder. Therefore insurers and self-funded plans could decide their benefit plans will only allow, or cover, the lower price - after the coupon is applied. This would reduce the benefit payable by the plan.

Example:

Say the plan has a brand drug copay of 50%, and say a brand prescription retails at $200. The manufacturer’s coupon is worth $100 (equal to the 50% copay). If manufacturers' advertising suggests their coupons mean prescriptions are “free” that's what people will expect. In this example, they will expect the coupon to pay half the cost, and their insurance to pay the other half. But wait. What if the insurer or self-funded plan says the price the member is required to pay, net of the coupon, is only $100? If that happens, the expense covered by the plan is $100 and insured person's copay is $50. Not zero. Not what people will expect.

That’s still a better deal than 50% of $200 .. . but people expecting to pay nothing won’t get that prescription for free.

Why might insurers and self-funded plans decide to do this? Simple - it reduces their cost - in the example, from $100 to $50. So is this what will happen? We'll soon see.

Fun fun fun boys and girls.

Game on.

Video Friday

Cato's Michael Cannon has been on a tear lately, advocating that states pro-actively shun setting up ObamneyCare© Exchanges. Here, he explains why:



If you've been following the Pioneer Institute's series on the latest MassCare Payment Reform train-wreck efforts, here's Part 3:

End of Life Care: A Conundrum

From email:

"Why Does End-of-Life Care Cost So Much?‏
$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 ... sick people are paying hundreds of thousands of dollars for “comfort care” at the end of their lives. The expensive scans, tests, and treatments that dying patients receive often provide a false hope, and at the end of it, many are surprised to suddenly learn they will still die. The incentives are skewed ... the high cost of staying alive ... and why the notorious “death panels” may be just what patients need."

Having experienced this first-hand, I'm particularly sensitive to the issues involved here. But I'm not the only one: everyone here at IB has been touched by it in some way. So I've asked each of the co-bloggers for their reactions, and would very much appreciate yours, as well - either in the comments or by email:

Bob: The lady is spot on in her assessment.

Problem is, many of us will say it is time to let a loved one go but too often it turns out more like the movies . . . . "Spare no expense. I don't care what it takes, let him live"

Kelley: Back when I was a Social Worker, I worked in an Adolescent Rehab Hospital. My main case load was the diabetic kids, but the other section of the hospital were for children and adolescents who had had life altering injuries which left them as vegetables.

I had a nurse tell me that she would advise her ER nurses not to work so hard to "save" people from catastrophic injuries as the emotional toll and financial costs were simply too much to bear. I recall a brain injured teenager, male, whose only recourse was a nursing home as he was a vegetable, no brain activity. I agree with this woman: doctors are only paid for doing something, not for doing nothing.

Nate: What bothers me is that $33,382 hospital bill probably only cost the hospital $6000 to deliver care. It’s one thing to profit off death but 400% profit margins these people should be outcast of society not pillars of the community.

Mike: Death with dignity - and palliative care - is the idea behind hospice. Not a bad idea. Maybe we should be thinking how to expand the idea so more people can reach death with dignity.

Notice that in the article linked, the author reports that decisions about her father's end of life care were taken away from the family:

"[T]he doctor we had never met before admitted Terence to an advanced-cancer-care ward at the University of Pennsylvania Hospital. And then an entirely new set of doctors took over"

Doctors the family had never met before - strangers - making medical care decisions about her father, instead of her family. Exactly "taking over." Bennett laments that. IMO well she should.

Follow her thought thru another step. If one prefers not to have strangers making the decisions about medical treatment for you or your family members, how much more might one also prefer not to have strangers making the decisions about your or your family member's death ?

Here's an idea. Pick an age - say, 60. Starting at that age, it shall be illegal for anyone to have medical insurance - public or private, individual or group - regardless of ability to pay. And upon attaining that age, each citizen shall be granted a lifetime stipend of $200,000 to use in any manner whatsoever, but with a strong suggestion that it be set aside for future medical care. Beyond that, for citizens above age 60, no more insurance, no more public subsidies of any kind, no welfare, nothing more for medical care.

Now, does that sound kindlier than "death panels?"

Bob: Sure Mike.

Of course you don't have to worry about getting re-elected. Those weenie's in DC can't even agree on making changes that won't impact anyone 55 or older. No way they would offer up your $200k You Bet Your Life plan.

You can make a similar argument for/against premature babies, those with significant birth defects including severe retardation, CP or any number of conditions.

I have known more than a handful of folks with children that are running up $50 - $100k/yr for "maintenance" and these kids will live for years. Poor quality of life, but alive none the less.

Kelley: And here's another thing. The author lumps all charges, hospital and providers into one number. Nate notes that the care would be a certain number, which may be true if the hospital did the care, but the care was done by each different provider, the radiologist reading the cat scans, the PT providing physical therapy, the Hospitalist providing care and diagnoses, so as to be paid, etc. The only providers that cannot bill are the nurses provided by the hospital for care; the hospital bills a facility fee to cover those costs and nurses are very expensive. If you were to take the overhead expenses of all the providers, taking out the hospital-only costs, you will probably find a much more narrow margin, such that the costs are justifiable.

The point is that once you enter the hospital for a terminal condition, all the staff can do is test, not cure, so one must decide if more tests stating the obvious is worth the cost. As the author pointed out, the last hospitalizations resulted in no treatment, only tests and confirmation diagnoses.

Hank: As previously noted, I'm a big fan of Hospice. BUT: Hospice is a choice - not a requirement. So when will HHS Secretary Shecantbeserious announce a "Hospice Mandate?"

There's no question that EOL care needs to somehow be reined in.

My issue is with the idea of an unelected, unaccountable panel of gummint-appointed bureauweenies making that decision.

Mike: Hank, that's exactly my beef as well.

Bill: Is there a solution to the EOL financial problem? As long as some belief systems preach the sanctity of life at any cost, some people will continue to spend other people’s money indefinitely. A healthy body, a dead mind and an irrational hope…those are the cases that become insanely expensive.

Behind the testing, there’s always another question, “Is it really terminal?”

Sometimes, you just don’t know. I had a relative who had an episode of ventricular fibrillation. According to his doctor, less than one out of twenty VFib patients make it to the hospital alive. Of those, a very small percentage survive without substantial neurological damage. He had virtually none. Five years and a pacemaker later, he’s still alive and practicing law. (There’s a bad joke in there somewhere!) With an initial Glasgow score of 6 (aka TFU), would an “efficient” system have spent the $150K to keep him alive? I doubt it.

[Hat Tip: Joyce Tang]

Taking a Mulligan on Obamacare

Obamacare, the red-haired stepchild of the president's administration, is now being considered for a do-over. In a meeting with potential donors, Obama is making a bid for a second term by making a pledge to revisit his signature legislation which has been all but ignored since signing it in to law.             
On April 3, Obama professed “enormous confidence” the law is constitutional and “the court is going to exercise its jurisprudence carefully,” in response to a question at the Associated Press’s annual meeting. A day earlier, he said the Supreme Court would have to take “an unprecedented, extraordinary step” to throw out “a law that was passed by a strong majority” in Congress.
Yet a planning memo, including a reminder that it’s important “to continue projecting confidence that the court will uphold the law,” was discussed at a May 29 meeting hosted by a group called Protect Your Care, attended by officials from the White House and Department of Health and Human Services, said one of the attendees, who requested anonymity to discuss a private meeting.
I have always found it odd that someone who taught Constitutional law as a college professor would not only trample on the Constitution repeatedly, but then publicly chide SCOTUS in a State of the Union address but also make veiled threats against the Court should they decide to overturn part, or all, of Obamacare.
As he previewed his agenda for donors at a May 14 fundraiser, Obama said he may be forced to try to revise parts of his health-care plan, depending on how the court rules later this month, said one activist, who requested anonymity to discuss the president’s comments.
If the Court rules against part or all of Obamacare, the re-election campaign may include a pledge to fix Obamacare.
Sounds like a quarterback asking the coach to send him back in in spite of throwing nothing but interceptions.

Thursday, May 31, 2012

Well, well, what have we here?

From Bloomberg (the news service, not hizzoner the mayor):

"Drugmakers led by Pfizer Inc. agreed to run a “very significant public campaign” bankrolling political support for the 2010 health-care law, including TV ads, while the Obama administration promised to block provisions opposed by drugmakers . . .

Whole lotta backscratchin goin on.  For whose benefit?  Yours?  Mine?  Well, not exactly:

 “President Obama’s efforts to enlist the support of private industry are exactly what presidents have always done to enact major legislation,” U.S. Representatives Henry Waxman of California and Diana DeGette of Colorado said in a joint statement"

Exactly. 

And isn't that absence of transparency exactly, precisely, and without doubt one of the principal problems that occurs so often in Washington? 



Small Employer Health Insurance Tax Credit

The Small Employer Health Insurance Tax Credit, part of the grand scheme of Obamacare to overhaul the current health care system and make health insurance affordable, is another money hole and dismal failure.

According to the Government Accounting Office:
Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible. While 170,300 small employers claimed it, estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million.
That's fewer than 10% of the estimated eligible groups who said thanks, but no thanks, to a tax credit.

If the government can't even GIVE money away, what does that say about the way they are going to manage health insurance going forward?
One factor limiting the credit’s use is that most very small employers, 83 percent by one estimate, do not offer health insurance. According to employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance
Well yeah, that's a problem all right. You would think the brainiac's in DC would have considered that. But then these are the same folks that pass laws without ever bothering to read them before they vote on them.
The base of the credit is premiums paid or the average premium for an employer’s state if premiums paid were higher. In 2010, for small businesses, the credit was 35 percent of the base unless the business had more than 10 FTE employees or paid average annual wages over $25,000.
Even a 35% direct tax credit failed to provide enough incentive for businesses to provide health insurance if they did not do so already.

This won't improve in 2014 and there is no reason why it should. Of course, small businesses (those with fewer than 50 employees) are not penalized for failure to provide health insurance. In addition, most low wage employees will get their health insurance through the Medicaid expansion as ordered by Obamacrap.

Of course the states can't cover their current Medicaid costs so one wonders where the money will come in 2014.

Somehow this hope and change thing doesn't seem to be working too well. I hope those who voted for change the last time will have become a bit wiser and educated in the interim.

No-High Weed

From time to time, we've written about medical marijuana. One of the potential arguments against its use is that simply saying "it's for medicinal purposes" seems somewhat disingenuous.

Now comes word of a pot breakthrough:

"Israeli scientists have cultivated a cannabis plant that doesn't get people stoned in a development that may help those smoking marijuana for medical purposes ... the new cannabis looks, smells and even tastes the same, but does not induce any of the feelings normally associated with smoking marijuana"

Interesting development.

Wednesday, May 30, 2012

Yeah, about that 3000% Premium *Decrease*

Alphabet Soup News

CongressCritters will be working on tweaking Health Savings Account (HSA) and Flexible Spending Account (FSA) rules tomorrow:

"One of the bills, for example, H.R. 5842, the Restoring Access to Medication Act bill, would restore health account holders' ability to use HSA and FSA cash to pay for over-the-counter medications not prescribed by physicians."

As we've pointed out before, this rule made no sense at all to begin with. Aren't we supposed to be using less health care?

"Other bills up for consideration could make it easier for FSA holders to get back or roll over unused balances at the end of the year."

Again, one of the major problems with FSA "use it or lose it" requirements is that it encourages profligate spending.

"A third bill up for consideration, H.R. 5858, would let early retirees over the age of 55 use HSA funds to pay for health insurance without paying income taxes on the distributions."

Currently, HSA funds can only be used to pay for (some) Long Term Care (LTCi) and COBRA premiums, and Medicare premiums once one hits the magic 65.

Nail number 27 in the Coffin


HHS recently released new guidelines outlining who can be a provider in a hospital setting.  The headline reads:
 
HHS FINALIZES NEW RULES TO CUT REGULATIONS FOR HOSPITALS AND HEALTH CARE PROVIDERS, SAVING MORE THAN $5 BILLION
Four changes were announced, including this one:
Require that all eligible candidates, including advanced practice registered nurses and physician assistants, be reviewed by medical staff for potential appointment to the hospital medical staff and then be granted all of the privileges, rights, and responsibilities accorded to appointed medical staff members.”
With this change, an APRN (Advanced Practice Registered Nurse) or PA (Physician's Assistant) can do everything a doctor can do at an 85% reimbursement rate of a doctor.  The government will save significant monies if they are paying 15% less for the same service by virtue of the fact that a doctor is not performing the procedure.  One of the stated advantages is to free up doctors for more complex cases, but the real advantage is financial.  In addition to collecting less, these mid level providers also cost a hospital less with salaries being half that of a physician.  So, even though the hospital will get a reduced payment, they will not have the overhead associated with doctors.

If these rules are approved, then hospitals will be able to reduce their physician staff to the bare minimum to handle the more complex cases and hire on less expensive APRN’s and PA’s to do the work currently being done by Doctors.

Summer Travel Insurance

Travel insurance for summer vacation. Luxury or good idea? What to look for, and what to look out for.

The Georgia Dept. of Insurance issued a public service memo offering advice on what to consider in evaluating travel insurance.              

Some travel insurance can protect against the loss of non-refundable travel costs such as air fare or hotel costs. Other travel insurance plans offer protection against financial loss due to medical emergencies, damage to personal property and death.
  • Trip Cancellation - Reimburses you for pre-paid travel expenses if you have to cancel your trip due to unforeseen situations such as illness, death or other conflicts.
  • Travel Delay - Reimbursement for out of pocket expenses if you have to delay your flight due to circumstances beyond your control, such as flight delay or cancellation.
  • Medical or Health - Reimburses out of pocket expenses for medical or dental emergencies, including those not covered by your major medical plan.
  • Medical Evacuation - Transport to a hospital near your location or back home.
Air ambulance charges, even for local transport, can run $5,000 or more. If you have to be returned to your home country, a charge of $30,000+ is not out of the ordinary.

Another concern, especially when traveling to a foreign country, is the need for translation of medical records. If you have something serious enough that may require follow up treatment, your doctor(s) back home may not have the ability to read Mandarin. Translation of medical records can easily run in the thousands but is a common benefit included in travel insurance plans.

If you are on Medicare you should be aware that you have no coverage outside the U.S. borders in most cases. Some (but not all) Medigap plans have limited coverage up to $50,000 for travel outside the United States.

Travel insurance policies are written on a "stand alone" basis but are best used as an adjunct to major medical coverage. As Karl Malden used to say, "Don't leave home without it".


Cavalcade of Risk #158 at Nina's Place

 Nina Kallen hosts this week's round-up of interesting and insightful risk-related posts, including some interesting personal anecdotes.

Tuesday, May 29, 2012

Pioneering MassCare, Part Deux

Last week, Kelley posted on the folly of taxing the "RichDoctor," including a video on that new MassCare scheme. Today, the Pioneer Institute presents the second video in that series.

In the video, Josh  Archambault (Pioneer's Health Care Policy Director) interviews Brian Rosman (Health Care for All's Research Director):

Medicare at Risk

Medicare is at risk and in desperate need of reform. With 48 million on Medicare and an aging baby boomer generation, Medicare must be overhauled before it goes bust.
Medicare became law in 1965 under President Johnson.

Since that time the number of people covered by Medicare has expanded while the number of workers paying Medicare taxes have shrunk. Roughly 88% of Medicare benefits are paid for through payroll taxes.

If Congress decides to cover the funding deficit through increased taxes, the amount a median family pays will jump from $1430 to almost double at $2630 per year.

Obamacare makes things even worse for seniors by cutting $421 in Medicare funding in order to pay for health insurance for the uninsured. Obamacare also dramatically cuts reimbursement to doctors and other medical personnel under the guise of saving money.

The next time you are with your doctor ask them how the feel about taking a 27% pay cut for treating Medicare patients. How would you feel if, in order to save Medicare, Congress decided to cut your Social Security benefits by 27%?

Currently the unfunded liability for Medicare and Social Security exceeds $40 trillion and the share of that burden for our children and grandchildren is roughly $200,000 each.

You can learn more about a Heritage proposal called Saving the American Dream at their website (just follow the link).

Late to DIAM

That would be Disability Insurance Awareness Month, which is (or, was) May. Well, better late than never.

Do you know how much money you'll make over your lifetime? It may well be more than you've considered. And, of course, disability insurance helps protect those potential earnings, keeping food on the table and a roof over our heads.

But how to quantify that?

The folks at the Life and Health Insurance Foundation for Education (LIFE) have made available from helpful calculators to make that easier.

Just click here, and have at it.

And once you've figured out how much you'll make, and decided you want to protect it, contact your local, independent agent for recommendations.