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"


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:
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.

Monday, May 28, 2012

Memorial Day - A Time to Remember

Memorial Day is the time when pundits and politicians alike stand and proclaim, "One life lost is one too many." Despite their best intentions, the statement is a hollow cliche that reflects a world as we want it to be versus the realities of the world as it is. It is an empty response that lacks  eloquence and true understanding. It falls desperately short in its attempt to honor those who have laid down their lives for their country or pay tribute to their families who have truly sacrificed for our nation. But what does it all mean in the context of sacrifice, commitment and dedication? A life lost impacts a family, their friends, comrades and the community they represent. One life represents so much more than a number; it is reflective of a community, a county, a state and our nation.

continue reading . . .

Saturday, May 26, 2012

Question: Need Lower Costs? Answer: Higher Taxes !

 Kelley recently posted a thoughtful comment on what Massachusetts has been up to:

Additional taxes on physicians to reduce excessive medical cost? Yeah, that’s gonna work.

IMO, Physicians are getting a bum rap from people who blame them for rising medical insurance premiums. Yes, rising physician fees are among the reasons – but that cannot be the main reason.

First the big picture: physician charges, primary and specialists together, are + / - 30% of total national medical care spending.  (In the employer medical benefit plan I once managed, physicians’ charges amounted to 37% of our total yearly cost).  To blame rising premiums on a single component equal to 30% of the total medical spending is clearly wrong.

It’s true that insurance premiums rise because per capita medical costs rise.  So the right question is much broader: Why do medical costs rise?

I believe there are four main reasons:

1.  Aging population

Older populations have more chronic conditions that are more expensive to treat than conditions prevalent in a younger population.  (I assume everyone agrees that a “Soylent Green” strategy is no solution). 

2.  Impact of technology  

Modern innovations in medical care have generally been more expensive. (I assume everyone also agrees atorvastatin should remain on the market, along with MRI’s, laser surgery, and the multitude of examples of modern medical care that have value - not simply cost).

3.  Consumption of a more expensive mix of services year by year

A more expensive mix of services each year means the overall cost of medical care rises, even if not one physician raised her fees.  I almost never see this factor mentioned. 

It appears this change in mix results mainly from

(a) growth in the ratio of specialists to total physicians 
(b) evolution of more costly medical specialties (e.g., diagnostic radiology), driven by technology 
(c)  “downstream” impact on hospitals that must support the new kinds of treatments including necessary equipment/devices.   

4.  Overinsurance - insurance that reimburses medical expenses virtually in full. 

Medical professionals and institutions whose patients have their fees paid virtually in full have no incentive to find ways to reduce them.  And patients have no reason to care, or ask, if there may be perfectly adequate treatment alternatives that are less costly.

Are American policy decisions based on correct diagnosis of the problems we face?  For example, can anyone demonstrate whether Americans consumed too much care in 2009 or whether we consumed too little in 1980?  Why has the emergence of newer, super-specialty treatment not reduced the trend in total cost?  What is the evidence that the growth in specialist care is producing better outcomes - even for the same cost? How can medical care be delivered in many other nations with arguably comparable outcomes to the U.S. but at much less cost?   And by the way, if services are paid essentially in full by a third party - private or government, doesn’t matter – does it make sense to blame physicians for filling in numbers on what amounts to a blank check provided by the third-party payers?  The answers carry enormous policy implications.   IMO, the fees that physicians charge for their services are much less significant than these answers.  

Yet America has now been committed to specific “reforms” that don’t appear to consider, much less answer these questions.  Our health policy leaders and pundits have done a remarkably poor job explaining why.  In any case, I suspect that the answers aren’t to be found in any legislative body that behaves as though higher taxes are the right answer to every problem.

Friday, May 25, 2012

Memorial Day Tribute

Luke AFB is west of Phoenix and is rapidly being surrounded by civilization that complains about the noise from the base and its planes, forgetting that   it was there long before they were...  A certain lieutenant colonel at Luke AFB deserves a big pat on the back.  Apparently, an individual who lives somewhere  near Luke AFB wrote the local paper complaining about a group of F-16s that disturbed his/her day at the mall. 

When that individual read the response from a Luke AFB officer, it must have stung quite a bit. 

The complaint: 
'Question of the day for Luke Air Force Base: 

Whom do we thank for the morning air show?  Last Wednesday, at precisely 9:11 A.M, a tight formation of four F-16 jets made a low pass over Arrowhead Mall, continuing  west over Bell Road at approximately 500 feet.  Imagine our good fortune!  Do the Tom Cruise-wannabes feel we need this wake-up call, or were they trying to impress the cashiers at Mervyn’s early bird special? 

Any response would be appreciated. 

The response: 

Regarding ’A wake-up call from Luke's jets' On June 15, at precisely 9:12  a.m .  , a  perfectly timed four- ship fly by of F-1 6s from the 63rd Fighter Squadron at Luke Air Force Base flew over the grave of Capt. Jeremy Fresques.  Capt Fresques was an Air Force officer who was previously stationed at Luke Air Force Base and was killed in Iraq on May 30, Memorial Day.  

At 9 a. m. on June 15, his family and friends gathered at Sunland Memorial Park in Sun City to mourn the loss of a husband, son and friend.  Based on the letter writer's recount of the fly by, and because of the jet noise, I'm sure you didn't hear the 21-gun salute, the playing of taps, or my words to the widow and parents of Capt. Fresques as I gave them their son's flag on behalf of the President of the United States and all those veterans and servicemen and women who understand the sacrifices they have endured ..  

A four-ship fly by is a display of respect the Air Force gives to those who give their lives in defense of freedom.  We are professional aviators and take our jobs seriously, and on June 15 what the letter writer witnessed was four officers lining up to pay their ultimate respects. 

The letter writer asks, ’Whom do we thank for the morning air show'?  The 56th Fighter Wing will make the call for you, and forward your thanks to the widow and parents of Capt Fresques, and thank them for you, for it  was in their honor that my pilots flew the most honorable formation of their  lives. 

Only 2 defining forces have ever offered to die for you....Jesus Christ and the American Soldier.  One died for your soul, the other for your freedom. 

Lt.  Col. Grant L. Rosensteel, Jr. 


Tax the Rich{Doctors} to Lower the cost of Healthcare [VIDEO ADDED]

In the ongoing drum beat against the doctor in terms of income earned, Massachusetts lawmakers are trying to lower the cost of healthcare and have decided that doctors simply charge too much.  I spoke about this perception of the richdoctor previously as more of an attitude, but Massachusetts has taken it to a practical level with monetary penalties for the richdoctor.
Of course the doctors and hospital groups are fighting this:
Lynn Nicholas, president of the state hospital group, said, “To expect the health care industry to perform at less than the economy overall is unreasonable and will impinge on our ability to deliver care at the level people expect. . . . That may damage the economy more than it helps it, and, because of that, jobs may be lost.’’
The bill will not only lower what a physician can charge for an appointment or procedure, but a tax will be levied on the provider if he/she cannot prove that the care was more exceptional than the care down the street.  Medicine is a service and we all have different definitions of quality service.  Thus, an immeasurable item cannot be proved or disproved.  The only measurable component in healthcare is if you are still alive after the appointment or procedure.  If you are, then the quality was excellent.

Physicians today are being squeezed financially, with increasing overhead and stagnant reimbursement due to a frozen Medicare fee schedule for approximately 10 years, now Massachusetts not only wants to lower reimbursement rates, but tax providers for simply trying to stay viable in business.  Ms. Nichols states this rather well, one cannot expect a business person to perform their skill or sell a product at less than is needed to keep one’s business profitable.
The bill also encourages providers to form so-called accountable care organizations to care for patients in a more efficient coordinated fashion, and pushes insurers to shift toward global payments, which pay providers a lump sum to care for a group of patients, and away from paying separate fees for every service.”
If this bill passes and implemented, then doctors will have to consider if they are willing to take pay cuts, live at a lower standard of living than doctors a generation ago, and continue to work the same number of hours they work now, in Massachusetts at least.

UPDATE: This video, from the Pioneer Institute, offers five ways that payment reform legislation on Beacon Hill misses the mark on true health care reform:

Cavalcade of Risk #158: Call for submissions

Nina Kallen hosts next week's CavRisk. Entries are due by Monday (the 28th).

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 ("Remarks")

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).


Thursday, May 24, 2012

Ezra K finally finds a nut!

As we've repeatedly knocked Ezra Klein's less-than-stellar grasp of insurance issues, it seems only fair to point out when he actually gets it right. An on-going IB meme has been consumer-centric health care, the goal of which is to educate and empower insureds to make more efficient health care choices.

Ezra reports that Blue Cross of Massachusetts (BXM) is attempting to do just that. He may actually be a closet IB reader, acknowledging early on that "Massachusetts has had, for years now  ... some of the highest health insurance premiums in the country."

BXM has introduced a new "tiered" co-pay system to incent its insureds to choose less expensive, but equally effective providers. It's not really new - Golden Rule flirted with this a few years ago, as did other carriers - but it's notable for the particular market, and its scope.

And it seems to be working. CEO Andrew Dreyfus reports that:

"[We] haven’t heard much in the way of complaints from the employers ... however, heard from one of Boston’s more expensive hospitals.

They were starting to lose referrals because of the new payment model... ‘can I lower my prices?’ I said, ‘absolutely.’”

Qualified kudos to Klein.

[Hat Tip: FoIB Holly R]

The Tutu Project

Nothing to do with Desmond Tutu. Pink tutu's. A grown, hairy man. In a pink tutu. And little else.

The Tutu Project is a love story.

Nothing kinky. True love of a man, Bob Carey and his wife Linda.

Linda has been battling breast cancer since 2003. Initially it seemed she had won the battle but then the cancer returned in 2006.

Bob started The Tutu Project as a way to raise money for breast cancer awareness. The self portrait pictures he has taken have brought joy to many individuals and families dealing with cancer. In Bob's own words:

During these past nine years, I’ve been in awe of her power, her beauty, and her spirit. Oddly enough, her cancer has taught us that life is good, dealing with it can be hard, and sometimes the very best thing—no, theonly thing—we can do to face another day is to laugh at ourselves, and share a laugh with others.

Read the story of Bob and Linda Carey. "Like" them on Facebook. Revel in their story. Make a contribution.

Monday Lagniappe

■ We haven't really addressed the new ObamneyCare© CO-OP program, and now's a good time to start. Scheduled to launch in 2014, these are essentially "mini-insurers" designed to compete with the big boys. CO-OP's (the misnomered Consumer Operated and Oriented Plan) would be state-licensed, and available both inside and outside of the Exchanges, targeting the small group and individual medical markets.

I remain skeptical of their viability, but "[t]he organizers ... are facing plenty of competition and strict scrutiny."

We'll see.

As we've repeatedly pointed out, MLR's (Medical Loss Ratios) are a dumb idea. Nevertheless, they're real (and not so spectacular); UHC has a new report out predicting that the total payout will be "less than 1% of total premium for 2011."

Be still my beating heart.

Frequent IB tipster Holly R dropped a dime on this interesting item:

"While UCLA Health System has long prided itself on being at the forefront of treating patients ... it is now trying to lower sharply the cost of providing that care. By enrolling young patients with complex and expensive diseases in a program called a medical home, the system tries to ensure that doctors spend more time with patients ... to coordinate care."

The "medical home" concept is relatively new, but seems promising. By communicating and coordinating care, it's hoped that the cost of that care can be reined in. And as we all know, the cost of care drives the cost of insurance.

Potential win-win.

Health Wonk Review: In-Depth edition

Dr Jaan Siderov hosts an outstanding edition of the Health Wonk Review. Great posts, and lots of 'em, all deftly edited with Dr Siderov's insight and gentle humor.

Wednesday, May 23, 2012

It Depends...

No, no, no.

Ever heard of the "Dependency Ratio?" Me either, but it's important, and it's scary:

"The U.S. Census Bureau recently reported that the dependency ratio, or the number of people 65 and older to every 100 people of traditional working ages, is projected to climb rapidly from 22 in 2010 to 35 in 2030"

Right now, about 1 in 5 of us is 65 or older. So what, you ask? Well, let's look at that number. It means that about 8 out of ten are working age. But with real unemployment at almost 15%, there are less than 7 working people supporting every 10 retirees. And that number's likely to go even lower as the Boomers continue reaching retirement age.

Why is this scary? Glad you asked:

"A Pennsylvania state appeals court has ruled that the adult son of a nursing home resident is responsible for her unpaid $93,000 bill. And the decision has some elder care lawyers wondering if this is just the beginning of a trend."

The Keystone State is just one of the 30 states which currently have "filial responsibility statutes" on the books. These regs impose an affirmative duty on "adult children to care for their indigent parents;" providers like nursing homes can seek restitution from them. And as the situation continues to deteriorate, how long will it be before the other 28 states follow suit?

So why bring it up?

Well, this is InsureBlog - perhaps there's a clue. How many of us have seriously considered Long Term Care insurance for ourselves? How many fewer have considered it for their parents? Well, LTCi can cost some decent bucks. But with the potential for a $93,000 (or more!) "filial financial burden" it may turn out to be very cheap indeed.

UPDATE: Courtesy of Bob, here's a list of the 30 states with "Filial Responsibility" statutes.

About Those Exchanges

The folks in la-la land are at it again, doing everything in their power to make sure no one in the Republik of Kalifornia has affordable health insurance. In an attempt to get the jump on health insurance exchanges the gummint is using "focus groups" to get an idea of what Kalifornian's want and expect from a health insurance exchange.
Many uninsured California residents think buying health coverage through a new health insurance exchange, or Web-based insurance market, would be cheaper than buying coverage through a broker.
Asking uninsured folks their opinion on something they don't own and perhaps have never bought is about like asking a man to describe childbirth.                 

Apparently the participants in this focus group never considered that an exchange will have overhead, salaries and probably benefits that are factored in to the cost of health insurance. These are the same folks that believe they can get a lower rate by purchasing direct from a carrier.
Researchers talked to a total of 36 uninsured California residents ages 18 to 44 who intend to use the California exchange.
Well that is certainly a large sample. I would think it would be fairly easy to find considerably more than 36 folks living on the dole that would be glad to participate in a survey. Just this last weekend while riding on mass transit to the airport I overheard a couple of people who were comparing notes on how to get paid by focus groups. One person said she got $75 just for tasting chocolate.

How hard is that?

And, "You don't have to report it to the government so they won't reduce your check".
"Some participants reported having shopped for insurance in the past either through their employer or by using a broker, insurance company website, or going to a local social service office," Bye writes in the focus group report. "Most preferred to shop on the Web as opposed to through brokers (who they viewed as expensive middlemen) or social service offices."
Expensive middlemen. Of course Social Workers not only volunteer their time and services (so no need to pay them) but they are infinitely well versed in insurance contracts.

Participants said they think the exchange will encourage plans to lower their prices and help consumers avoid paying broker fees, and decrease the amount of paperwork consumers must fill out.
The participants said they want to shop "at their own pace without pressure from salespeople."
There are those expensive broker fee's again . . .
I have a website and offer visitors the chance to run their own rates and even apply "direct" with the carrier if they choose. After several years of doing this, I can tell you about half never get around to completing the application. Roughly 70% of those that do submit an application are rejected due to health issues.
Quite a few pick plans that do not cover prescription drugs.
When asked about coverage affordability, the focus group participants said they might be able to afford $25 to $50 per month for individual coverage and $100 to $150 per month for family coverage.
I think it is becoming quite clear why these folks are uninsured. They seem to think you can buy health insurance for less than you pay your cable company each month.

High Anxiety Over High Deductibles

There are some things in life that are baffling. Why do electric appliances come with warning labels that tell you not to use the appliance while bathing? Why are there no smoking signs at the gas pump? Why do men's pants come in sizes that correspond to the circumference of your waist but women's dresses come in 0 to infinity?

Then there is the issue of high deductible plans.

Thirty years ago a high deductible plan was $1000 and you can forget about copay's. You saved your receipts and when you hit your deductible you filed a claim and sent in your collected receipts.

In a retro move, individuals and employers are now looking at plans without copay's and deductibles from $2500 - $5000 or so.

At a time when it is not unusual to have a credit card with a $5000 - $10,000 limit, and many people have several cards, what is the big deal if you have a bad year and have to spend $2500 - $5000 of your own money? And what if you saved $5,000 per year in premiums by opting for the high deductible plan over the lower deductible copay plan?

Of course the low deductible copay plans are an illusion since your OOP (out of pocket) on a large claim will almost always exceed $5,000, so what have you gained?

Not a damn thing.

And then we have articles, like one in The Tennessean, about how high deductible plans are leading to financial ruin.
Aileen Stalvey says she was “born to shop,” but shopping for surgery left her with a bill from Baptist Hospital for more than twice the amount she’d been quoted.
Her quandary is one that more will face as employers increasingly switch to high-deductible health plans — some of which require workers to spend as much as $5,000 before filing an insurance claim.
More on Aileen in a moment, but how about that comment that you must spend $5,000 before filing a claim?


For starters, most folks don't file claims, their providers do it for them. Second, when a claim is filed it is adjudicated and when you use a par provider the bill is repriced (discounted) according to the agreed upon fee schedule.

You get a discount even if the carrier has not paid a dime. Somehow this escapes the whiners who say they don't "get anything" for their premium dollars.
Stalvey’s problems began when she felt a strange sensation in her hip while mowing an embankment at her home last summer. The hip gradually got more painful until she learned weeks later that the neck of her leg bone — the part that fits into the hip socket — had fractured.
A British citizen married to an American, she had three options. She could stay in bed in hopes that it would heal. She could fly back to the United Kingdom, where the surgery would be free because of socialized medicine. Or she could have it done in Nashville and pay for it out of pocket.
While the reporter does not state it explicitly, it would appear that Aileen does not have health insurance.

And I especially love that part about getting free surgery in the UK. Wonder what the wait time would be for hip surgery?
When Baptist quoted a discounted cost of $4,586 because she was self-pay, she and her husband, Kim Stalvey, opted for her to have the surgery here. The couple paid that amount before her discharge, but later received a bill for an additional $4,751.
Herein lies the rub.

The hospital quoted a price for their anticipated services, but how about the surgeon, anesthetist, etc.?
“There isn’t standardization of practice in surgery where every surgeon does a procedure the same way or with the same equipment for every patient,” said Kristi Gooden, director of media relations for the hospital.
“Surgery pricing can vary greatly based on many factors, including the physician’s preference of technique for a particular procedure, instrumentation used or choice of implants or other supplies.”
Hip surgery isn't like getting the oil changed in your car or even new brakes. I recently had brakes installed on 4 wheels and was quoted a price up front. After pulling the tires and inspecting the brakes the price jumped another $200 because I also needed new calipers.

I could pay the extra $200 now or forget it and have to replace the brakes again in a few months plus calipers at that time.

Things happen, even with automobiles.
Aileen Stalvey is wary about any kind of medical procedure, even getting a hearing aid, after her hospital billing dispute.
“Trying to shop here for medical care is impossible,” she said. “When you call a doctor up and ask for an appointment, you can’t get an answer.
“They say they will charge you so much to come in and bill you later, but they can’t say what a hospital visit will cost or what a hearing aid will cost. That’s just so frustrating.”
I understand the frustration, up to a point, but really. Who shops for the cheapest surgeon?

If boob jobs are $5,000 each do you really want someone that will do both for $250?

It's for the ObamaKids©

Gotta give the proponents of ObamneyCare© credit: they're still pushing the lies. Hard. Having previously recruited Matlock to take the case to senior citizens, they've now taken aim at another kind of senior, 12th graders:

"In a press announcement released [Monday], HHS stated that HHS Secretary Kathleen [Shecantbeserious] and Secretary of Education Arne Duncan “are reaching out to campus leaders to remind graduating high school, college and university seniors about their new health insurance options under [ObamneyCare©].


And what, exactly, are those options? Well, thanks to Kathy and her boss, child-only major medical plans are extinct (and have been for  a while). So-called "adult children" can snag a ride on their folks' policy, but at a greatly inflated cost. So much for flying the nest.

Irony abounds as well in that colleges are now dropping student health insurance plans (good riddance, by the way), leaving these new graduates with fewer choices than ever. And, of course, the employer mandate's going to leave them with fewer group health plan options.

But Henry, at least smaller employers will continue to offer affordable health insurance plans, what with the great ObamneyCare© tax breaks, right?

Um, no:

"Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible ... 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."

Shocking, ain't it?

Tuesday, May 22, 2012

Intrepid Carrier Trick: Rx Edition

This is an interesting and frustrating confluence of several InsureBlog themes: Pharmacy Benefits Management (PBM), transparency and consumer-centric health care. On the one hand, we're encouraged to become more "hands on" regarding our own care, to be more cost-conscious consumers with "skin in the game." On the other, carriers often put up major roadblocks that actively prevent us from saving both ourselves and the insurance company some major bucks.

And sometimes, persistence and common sense prevail. Here's the story:

Melvin and his family have been clients for many years. He early on bought into the Health Savings Account (HSA) idea, and has enjoyed both the savings that it represents and the ability to bring at least some of his health care under his own control. Recently, his wife was diagnosed with a serious (but thankfully not life-threatening) condition, the only treatment for which has been costing him over $600 a month. The good news is that this quickly eats up their $3,000 family deductible. The bad news is that he has to come up with the $600 every month for almost half the year.

A few months ago, he learned about a Canadian supplier that can provide the exact same medicine at about $100 a month. His carrier, Medical Mutual of Ohio (MMO), even has a claims form for just this circumstance. So, Melvin bought a 30-day supply in December (to cover Mrs Melvin until the Canadian supplies kicked in), and then a 90-day supply early this year, waiting the required 30 days before doing so.

He then downloaded and completed the rx claim form, and (as instructed) mailed it to MMO's Pharmacy Benefit Manager, Medco. What we didn't know at the time was that, even though the meds are covered, the process for this method required dealing directly with MMO, not Medco.

It took us several weeks, phone calls and emails, but in the end, Medical Mutual followed through, coming up with a workable, long-term solution. We know this because Melvin has now tested it, and everything went precisely as it should.

This is critical, because as more folks access alternative delivery options (such as from Canada or other exotic locales), these kinds of processes will need to be implemented. Melvin and I are quite happy with how Medical Mutual, once prodded, stepped up and did the right thing.

[Special InsureBlog Thanks and Kudos to MMO's Ed B and Regina D]

An Historic First

Way back on this date in 1761, the first life insurance policy sold in America was purchased by the Rev. Francis Allison of Philadelphia. This makes sense, since the company which issued the policy was called the 'Corporation for the Relief of Poor and Distressed Presbyterian Ministers and of the Poor and Distressed Widows and Children of Presbyterian Ministers,' which was "formed by Presbyterians for their ministers."

But wait, it gets even more interesting: according to an item in the February 3, 1902 edition of the New York Times, the company (by then known as the Presbyterian Ministers' Fund), was also the first insurer to offer non-forfeiture options and cash values.

By 1990, the carrier had become the Covenant Life Insurance Company; four years later, it became part of the Provident Mutual Life Insurance Company, which was itself bought by Nationwide 10 years ago.

Monday, May 21, 2012

RomneyCare, Then and Now

RomneyCare begat Obamacare. We believe states are the best "test tubes" for anything proposed on a national level, so if you want to get an idea how something such as Obamacrap is going to play out over time, see how it has performed at the state level.            

The folks at Kaiser Foundation have provided us with this nifty update on RomneyCare, 6 years later.

Since 2006 the residents of Massachusetts have:

  • 94% of their population covered by health insurance 
  • Witnessed increased access to health care
  • Failed to control health care spending 
  • Per capita health care spending is 15% higher than the national average
  • Health care spending AND health insurance premiums are HIGHER than any other state in the country
Meanwhile, the number of citizens in taxpayer subsidized health insurance programs continue to rise.
  • 158,000 low income families in non-Medicaid health insurance plans
  • "Low income" is defined as less than 300% of the FPL (federal poverty level)
  • Added 61,000 children to Medicaid and SCHIP rolls
  • 1% of the citizens paid a fine for failure to comply with the individual mandate
And then there are the taxpayer funded subsidies . . .
  • $1.3 billion from MA taxpayers to subsidize the cost of health insurance for low income individuals and families
  • $26.75 billion from CMS paid over 3 years. For those not paying attention, the $26.75 billion came from you and me.
So there you have it. After 6 years nominal gains have been made in lowering the percentage of uninsured citizens (from 10% to 6%).

Health care costs, and premiums, continue to rise faster than the national average and health insurance premiums are the highest in the country.

In addition to premiums paid, taxpayers will chip in an extra $1.3 billion in NEW taxes for 2012 plus another roughly $8 billion from the rest of us.

The folks in D.C. call that spreading the wealth around.

At InsureBlog we call it that hopey-changey thing.

How is this working for you?

The 3000% Lie

Remember back in the day, when Dear Leader promised folks a 3000% decrease in health insurance premiums?

Apparently, his Ginkgo Biloba ran out:

For those keeping score at home, that's almost 7% more than last year.

Math is hard.

[Hat Tip: FoIB Holly R]

ObamneyCare© Updates

While we wait for the SCOTUS ruling on whether or not any of this will really matter. HHS Secretary Shecantbeserious and her minions continue inexorably on their way towards full implementation. To wit:

■ From the "Death and/or Taxes" Department:

"Final regulations for implementing the health insurance purchase tax credit provisions in [ObmaneyCare©] are set to appear in the Federal Register Wednesday [the 23rd]. "

The income redistribution scheme subsidy program is designed to make the unaffordable health insurance premiums less unaffordable, except for those who must actually pay for coverage.

FoIB Jeff M alerts us to this news from the Mountain State:

"West Virginia is peering over the cliff of a Medicaid funding shortfall ... Medicaid goes into FY 2013 with a slight budget surplus, but FY 2014 poses a $236 million shortfall, “which is daunting."

2014? What could possibly be on tap for 2014 that would create such a major budget crisis?

'Tis a puzzler.

And, finally, from Dr Brad Flansbaum, this story from The Gray Lady on how small business owners are trying to cope with the onsalught of new regs and requirements being handed down by Ms Shecantbeserious and Co:

"During the most recent meeting of our business group, we asked the owners to talk about how they are handling this increasingly complicated, costly and uncertain issue."

It's an interesting discussion.

The Church vs ObamneyCare© - Breaking News

Medical Loss Ratio

Medical loss ratio's as defined (dictated) under Obamacare were supposed to bring premiums down, saving taxpayers untold millions of dollars. As Henry recently pointed out, the average "rebate" to OH consumers is about $268 to individual consumers.

And that is only for those who are entitled to a rebate.                

About 1 in 3 policyholders will get a rebate, the rest of you get a lump of coal.

The folks at Kaiser Foundation calculate the average rebate at $39 so you folks in Ohio must be living right.

Don't spend it all in one place.

Currently the MLR (medical loss ratio) provisions of Obamacrap apply only to those with individual major medical or employer (fully insured) group health plans. But changes may be coming. (More on that in a future post).

What impact has MLR had on health insurance premiums, and on health insurance in general?

  • Premiums are still rising at the same or higher clip than before Obamacrap/MLR
  • Carriers are reducing support staff and/or hiring cheap overseas call centers
  • Longer processing times for new health insurance applications
  • Longer processing times for health insurance claims
  • Fewer carriers offering health insurance plans
  • Fewer carriers = fewer choices = higher premiums
  • Fewer agents willing to offer health insurance products for their clients
  • Agents that do still offer health insurance cannot afford to offer the same level of service as before
  • More cost shifting to the consumer as carriers "gut" plans to produce lower premium choices
How is this working for you so far?

Bet the seniors on Medicare can't wait to see what surprises are in store for them. And let's not forget that AARP was and still is a major supporter of Obamacare.