InsureBlog

Question: Need Lower Costs? Answer: Higher Taxes !

noreply@blogger.com (Mike Feehan) — Sat, 26 May 2012 12:02:00 +0000

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

“Providers that charge prices deemed excessive and that they cannot prove are linked to above-average quality would pay a tax”

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.

Memorial Day Tribute

noreply@blogger.com (Bob Vineyard, CLU) — Fri, 25 May 2012 17:00:00 +0000

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.

USAF

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

noreply@blogger.com (Kelley Beloff) — Fri, 25 May 2012 13:00:00 +0000

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.

“Massachusetts House leaders released amajor proposal to curb health care costs Friday, calling for new limits on thefees charged by hospitals and doctors and for creation of an independent agencyto monitor medical spending….Providers that charge prices deemed excessive andthat they cannot prove are linked to above-average quality would pay a tax,similar to the luxury tax Major League Baseball imposes on the big-spending NewYork Yankees and Boston Red Sox”

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

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Fri, 25 May 2012 12:30:00 +0000

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).

Thanks!

Ezra K finally finds a nut!

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Thu, 24 May 2012 20:21:00 +0000

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

noreply@blogger.com (Bob Vineyard, CLU) — Thu, 24 May 2012 17:46:00 +0000

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

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Thu, 24 May 2012 16:30:00 +0000

■ 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

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Thu, 24 May 2012 12:46:00 +0000

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.

It Depends...

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Wed, 23 May 2012 18:45:00 +0000

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

noreply@blogger.com (Bob Vineyard, CLU) — Wed, 23 May 2012 18:29:00 +0000

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

noreply@blogger.com (Bob Vineyard, CLU) — Wed, 23 May 2012 17:28:00 +0000

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?

Rubbish.

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©

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Wed, 23 May 2012 13:50:00 +0000

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©].”

Uh-hunh.

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?

Intrepid Carrier Trick: Rx Edition

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Tue, 22 May 2012 18:00:00 +0000

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

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Tue, 22 May 2012 13:14:00 +0000

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.

RomneyCare, Then and Now

noreply@blogger.com (Bob Vineyard, CLU) — Mon, 21 May 2012 20:39:00 +0000

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

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Mon, 21 May 2012 19:12:00 +0000

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

Apparently, his Ginkgo Biloba ran out:

"For the first time, the total bill for the typical family of four with an employer-sponsored health-care plan ... breached $20,000 in 2012."

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

Math is hard.

[Hat Tip: FoIB Holly R]

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Mon, 21 May 2012 18:00:00 +0000

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.

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Mon, 21 May 2012 16:36:00 +0000

Last time we looked, the Catholic Church was none too pleased with the direction ObamneyCare© had taken vis: ~~convenience items~~ birth control.

Now, they've turned up the heat:

"Catholic archdioceses and institutions filed suit in federal district courts across the country [today] against the so-called contraception mandate, in one of the biggest coordinated legal challenges to the rule to date ...

The groups are objecting to the requirement from the federal health care overhaul that employers provide access to contraceptive care."

That's gonna leave a mark.

Medical Loss Ratio

noreply@blogger.com (Bob Vineyard, CLU) — Mon, 21 May 2012 14:32:00 +0000

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.

Health Insurance Rates Drop 60%

noreply@blogger.com (Bob Vineyard, CLU) — Fri, 18 May 2012 13:54:00 +0000

Health care reform will result in lower health insurance rates, up to 60% lower than current rates. Yes, health care reform seems to be working . . . for those who live in Maine.

Falling health insurance rates due to health care reform is the lead in of a post at The Maine Wire.

PL 90, the free market based health reform law, was passed last March by a Republican majority in Maine’s legislature. Governor Paul LePage signed the bill in a ceremony at the statehouse amid cries from Democrats that it wasn’t right for Maine.

Well that's a twist.

Republican health care reform but Democrat's protest the move.
The law has resulted in a drop in rates for small group plans but individual rates are expected to drop as much as 60% . . . for some age groups . . .

Maine has two provisions on the books that make health insurance premiums unaffordable for most folks. Community rating and guaranteed issue, two things that are cornerstones of Obamacare, drive premium rates through the roof.

Community rating means essentially everyone pays the same rate, regardless of age or gender. Guaranteed issue means anyone can buy coverage, regardless of their health or existing medical conditions.

In the parlance of Obamacrap, "Insurance companies can no longer discriminate against you because you have a pre-existing condition".

The flip side of that argument is, "Insurance companies will be allowed to charge significantly higher premiums to those who are healthy to pay for the claims of those who have expensive medical conditions".

That is analogous to auto insurance carriers charging drivers with perfect records the same rate as one who has had multiple DUI's and speeding violations. Or banks imposing much higher interest rates to the most creditworthy so they can also extend credit to those with severely damaged credit.

PL 90, the health reform law that Republicans guided through the legislature despite passionate opposition from Democrats, expanded the “rate bands” to allow a wider variation in cost between different aged applicants. In the past, insurance companies had to treat a 21-year-old and 55-year-old as basically the same. The new law allows for distinction in age groups.

Once the new rates are approved, a 21 year old will pay $215 per month for a plan with a $2,000 deductible. Before health care reform, that person would pay $448 per month.

The rates are still high, mostly because the guaranteed issue provisions remain in play, but are much more affordable. A healthy 21 year old in Atlanta, Georgia could buy a comparable plan from Cigna for $98 per month.

So the Obamacrap-like guaranteed issue provisions mean healthy people will still pay double the normal premium so everyone can have health insurance.

Seems fair, right?

“Getting more young people into the market is a major plus for all Mainers and was a primary goal of the law,” Allumbaugh notes. “As this happens, the claims experience tends to improve and it can lower the rates even further for all age groups,” Allumbaugh said.“This is precisely the impact the health reform law aimed for, lowering rates generally, but in a way that helps our insurance markets reverse the death spiral and begin to grow.”

Death spiral. Now that's a word you don't hear every day.

Hyper-regulation by the Maine Department of Insurance has resulted in most health insurance carriers leaving the state. Anthem Blue Cross controls most of the health insurance market in Maine. Less competition, higher rates.

The same thing we will have in 2014 when Obamacrap is in play.

How is this health care reform idea working for you?

About as well as hope and change.

Java Overboard!

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Thu, 17 May 2012 13:48:00 +0000

A few years ago, we noted that even just a few cups of coffee each day might help "slow the progress of Alzheimer’s disease and even reverse the condition."

Turns out, more may be even better, because loading up on the brew may actually help with longevity:

"[M]en who drank at least six cups of coffee a day had a 10 percent lower chance of dying during the 14-year study period than those who drank none. For women, the risk was 15 percent lower"

And it's not necessarily the caffeine, either; regular and decaf see similar results.

I do have a problem with the article's headline, though:

"6 cups a day? Coffee lovers less likely to die, study finds"

Really? Last I looked, the risk of dying is pretty much 100%, beverage of choice notwithstanding.

Be Careful What You Wish For . . .

noreply@blogger.com (Bob Vineyard, CLU) — Wed, 16 May 2012 12:41:00 +0000

The folks at Consumer Reports open their mail bag . . .

I'm pregnant. Can my health plan refuse maternity coverage?

Q. I thought I had completed my family, and was confident of never getting pregnant again because I had an IUD. So we bought an individual family plan from Blue Shield of California that excludes pregnancy. But I got pregnant anyway. I asked to be moved to a plan that covers pregnancy, and was denied because of my "pre-existing condition." Is this legit?

A. It sure is. In every health-plan underwriting manual I have ever seen, pregnancy is on the list of conditions that will get you turned down flat for new individual coverage.Moreover, the vast majority of health plans sold to individuals exclude maternity coverage. A recent study of some 3,300 individual policies by the National Women's Law Center, a Washington, D.C. advocacy group, found that only 12 percent included maternity coverage, and half of those were in the handful of states with laws that require it. In a few states, including Colorado, Connecticut, Nevada, and South Carolina, not a single plan available to a 30-year-old woman included maternity coverage.

In other states, you can get limited maternity coverage through an add-on rider that costs extra, but typically must wait a year or more before the benefits kick in, meanwhile paying an additional premium that may cost more than the basic policy itself.

"You can buy coverage in $1,000 or $2,000 increments, but by the time you've waited, you get back $100 or so if it's a normal delivery," says Judy Waxman, the center's vice president for health and reproductive rights. "It's just not worth it."This is one of many ways that individual health insurance is inferior to group coverage, which has included maternity care without exception for years.

But you, dear California resident, are in luck. Last year, California became the ninth state to pass a law requiring all individual health plans to cover maternity care. The new law takes effect July 1, 2012. According to a spokeswoman for Blue Shield of California, as of that date, the new benefit will automatically be added to all the company's individual plans, starting immediately. If your due date is any time after that, your remaining expenses for prenatal care and delivery will be covered.

The Affordable Care Act, aka Obamacare, will fix this problem for good. As of Jan. 1, 2014, all individual health plans sold in the U.S. must include maternity coverage. And you can sign up for a plan even if you're already pregnant, because insurers won't be able to turn you down for any pre-existing condition.

Yes dear readers, Obamacare will "fix" all that. Starting in 2014 all major medical plans will be required to cover maternity. Not only will men have to pay for maternity coverage, but so will pre-menstrual girls, post-menopausal women, sterilized women and those who, for any number of reasons, are unable to get pregnant.

Everyone will see their rates increase. How much? We will get an idea by looking at California.

Expect Dave Fluker to post something on his blog as soon as July rates are released, but don't expect it to be pretty.

All this is part of that spreading around the wealth thing.

Cavalcade of Risk #157 now online!

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Wed, 16 May 2012 12:00:00 +0000

Dennis Wall presents this week's collection of risk-related posts. Please drop by.

Dying for a quiet ride

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Tue, 15 May 2012 18:29:00 +0000

File this under "Risky Unintended Consequences:"

"Hybrids are so quiet that pedestrians never hear them coming ... NHTSA studies ... confirmed what many long suspected: Hybrids and electric cars are too quiet for the blind or even the fully sighted to hear them coming."

Ooops.

On the other hand, I was taught to always look both ways before crossing the street.

Of course, that doesn't really apply to the sight-impaired, who count on a certain noise level to assess risk before stepping off the curb. 'Tis a puzzler.

Then again, maybe not:

"Thanks to the Pedestrian Safety Act of 2010 ... the National Highway Traffic and Safety Administration is required to initiate a rulemaking process for minimal vehicle noise—not how quiet, but how loud a car must be." [emphasis in original]

"Initiate a process." As in, start to consider the idea of a study to determine how to proceed.

How many people will die (or be seriously injured) while they commission the blue ribbon panel?

And the problem's only going to get worse, of course, as more and more electric and hybrid cars roll off the assembly lines and into traffic. The good news is that the Chevy Volt contains its own vehicle announcement system:

Tuesday Morning LinkFest

noreply@blogger.com (Henry Stern, LUTCF, CBC) — Tue, 15 May 2012 13:45:00 +0000

■ We recently learned how resveratrol, a compound found (for example) in red wines, works. But that's not all: turns out, it's also potentially useful in combating the effects of Alzheimer's.

■ The 'web can be a very useful and powerful tool for critiquing vendors, but be careful whom you critique and how:

"Two years ago, Dennis Laurion logged on to a rate-your-doctor website to vent about a Duluth, Minnesota neurologist ... McKee wasn't amused. He sued Laurion for defamation"

It may well be that the truth is a valid defense, but prudence is always a valid idea.

■ From FoIB Jeff M, we learn that upcoming Medicare changes are going to be very costly for at least one hospital - and the odds are good that this isn't going to be an exclusive club.

■ Is this something? The Feds are starting to "audit" ObamneyCare© compliance, including double-checking "grandfathering" status.