Movin' on up (Again)!

When last we mentioned it, InsureBlog was ranked 10th out of all the health-related blogs tracked by Wikio. Last month, we had moved into the #5 spot, and Wikio Community Executive Nicolas Boiteux informed us today that the September rankings have us in the #3 slot. In an email, Nicolas told me that they "create a 'top 500' for the different categories" (e.g. health).

Wow!

I was also pleased to see that we're ranked #1122 out of all the blogs that Wikio tracks this way (some 37,000 web logs); this puts us in the top 3%. Thanks to all of our readers, who make this effort worthwhile, and to my co-bloggers for their much appreciated contributions.

Read More

Movin' on up (Again)!

When last we mentioned it, InsureBlog was ranked 10th out of all the health-related blogs tracked by Wikio. Last month, we had moved into the #5 spot, and Wikio Community Executive Nicolas Boiteux informed us today that the September rankings have us in the #3 slot. In an email, Nicolas told me that they "create a 'top 500' for the different categories" (e.g. health).

Wow!

I was also pleased to see that we're ranked #1122 out of all the blogs that Wikio tracks this way (some 37,000 web logs); this puts us in the top 3%. Thanks to all of our readers, who make this effort worthwhile, and to my co-bloggers for their much appreciated contributions.

Read More

Told Ya So!

Thanks to regular reader (and commenter) Scuzz, we learn of a horrendous example of one of our favorite memes here ("health care costs drive health insurance costs"):

"Several months after back surgery, Linda Burdick sat holding a hospital bill for almost $60,000. ... Burdick hired two billing investigators. After demanding an itemized accounting, health care navigators Lin Osborn and Beth Morgan believe Burdick was overcharged by $40,000."

That's a lot of overcharge. For example, she was charged over $1,700 (each!) for a half dozen surgical screws [ed: don't you dare - this is a family blog!]. The moral of the story is to be proactive; just because a provider says you owe additional money doesn't make it so.

And beware of balance billing: if you're in network, it's strictly forbidden. It's always a good idea to check your EOB's (Explanation of Benefits); these are the forms that your carrier will send you to let you know what charges have been paid and why.

And, of course, for more egregious cases, there are a number of claims services that can help you get to the truth. These usually involve a fee, but can literally pay for themselves with one mistaken claim.

[Hat Tip: Scuzz]

UPDATE: In the comments, Lisa Emmrich has links to another story of provider gouging.

Read More

Told Ya So!

Thanks to regular reader (and commenter) Scuzz, we learn of a horrendous example of one of our favorite memes here ("health care costs drive health insurance costs"):

"Several months after back surgery, Linda Burdick sat holding a hospital bill for almost $60,000. ... Burdick hired two billing investigators. After demanding an itemized accounting, health care navigators Lin Osborn and Beth Morgan believe Burdick was overcharged by $40,000."

That's a lot of overcharge. For example, she was charged over $1,700 (each!) for a half dozen surgical screws [ed: don't you dare - this is a family blog!]. The moral of the story is to be proactive; just because a provider says you owe additional money doesn't make it so.

And beware of balance billing: if you're in network, it's strictly forbidden. It's always a good idea to check your EOB's (Explanation of Benefits); these are the forms that your carrier will send you to let you know what charges have been paid and why.

And, of course, for more egregious cases, there are a number of claims services that can help you get to the truth. These usually involve a fee, but can literally pay for themselves with one mistaken claim.

[Hat Tip: Scuzz]

UPDATE: In the comments, Lisa Emmrich has links to another story of provider gouging.

Read More

The Feds, Health Care, and Illegals

Although we're known more for championing transparency in health care and rallying against socialized medicine, I hadn't realized that we've also written quite a bit about illegal immigration's drain on our health care system:

Some are contractors who sue the citizen who hired them.

Some are quadriplegics left unattended and unwanted, with little hope and no resources.

Some are cancer patients who cost Texas taxpayers some $12 million.

Regardless, we all pay for them via increased taxes and higher insurance premiums. And the tab keeps getting higher. In fact, in the story referneced directly above, we learned that at least one Texas hospital planned to curtail cancer treatments to illegal immigrants.

In nearby Arizona, "Tucson-area hospitals estimate that providing emergency care for illegal immigrants has cost them more than $66 million since 2005;" The good news (such as it is) is that the Federal government (you know, thee and me) repaid them about a quarter of that. Since 2005, Medicare has been matching a certain percentage of expenses that hospitals incur under EMTALA, in order to offset those costs.

But that gravy train appears to have come to a grinding halt:

"(O)n Oct. 1, the beginning of the federal 2009 fiscal year...the reimbursement program ends."

Even under the reimbursement program, "local hospitals try to send illegal immigrants who need expensive or long-term care back to their country of origin." Not a bad idea (cf: "Schengen Convention"), but it doesn't always work: if we don't know who someone really is, how do we know their country of origin? And of course, there are those who are too ill to be transported. But health care costs money, which has to come from somewhere. Unsurprisingly, you and I foot a lot of that bill:

"Under Section 1011 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, the government designated $250 million a year to be divided among the 50 states for emergency care of illegal immigrants. Arizona received $44.5 million in fiscal year 2007."

On the one hand, that's a lot (our) money; on the other, it gets spent awfully fast. And, as previously noted, that program goes away in another month or so, leaving hospitals scrambling to figure out their next move. Of course, a new congress could renew (or reinstate) the program, letting the hospitals off the hook for at least some expenses, for a while. The question, of course, is how much money we're willing to throw at the problem.

Time will tell.

Read More

The Feds, Health Care, and Illegals

Although we're known more for championing transparency in health care and rallying against socialized medicine, I hadn't realized that we've also written quite a bit about illegal immigration's drain on our health care system:

Some are contractors who sue the citizen who hired them.

Some are quadriplegics left unattended and unwanted, with little hope and no resources.

Some are cancer patients who cost Texas taxpayers some $12 million.

Regardless, we all pay for them via increased taxes and higher insurance premiums. And the tab keeps getting higher. In fact, in the story referneced directly above, we learned that at least one Texas hospital planned to curtail cancer treatments to illegal immigrants.

In nearby Arizona, "Tucson-area hospitals estimate that providing emergency care for illegal immigrants has cost them more than $66 million since 2005;" The good news (such as it is) is that the Federal government (you know, thee and me) repaid them about a quarter of that. Since 2005, Medicare has been matching a certain percentage of expenses that hospitals incur under EMTALA, in order to offset those costs.

But that gravy train appears to have come to a grinding halt:

"(O)n Oct. 1, the beginning of the federal 2009 fiscal year...the reimbursement program ends."

Even under the reimbursement program, "local hospitals try to send illegal immigrants who need expensive or long-term care back to their country of origin." Not a bad idea (cf: "Schengen Convention"), but it doesn't always work: if we don't know who someone really is, how do we know their country of origin? And of course, there are those who are too ill to be transported. But health care costs money, which has to come from somewhere. Unsurprisingly, you and I foot a lot of that bill:

"Under Section 1011 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, the government designated $250 million a year to be divided among the 50 states for emergency care of illegal immigrants. Arizona received $44.5 million in fiscal year 2007."

On the one hand, that's a lot (our) money; on the other, it gets spent awfully fast. And, as previously noted, that program goes away in another month or so, leaving hospitals scrambling to figure out their next move. Of course, a new congress could renew (or reinstate) the program, letting the hospitals off the hook for at least some expenses, for a while. The question, of course, is how much money we're willing to throw at the problem.

Time will tell.

Read More

Medical Bankruptcy (Revisited)

Many people are struggling to pay their bills, including health care bills. They rock along living paycheck to paycheck and then sudden illness or an accident happens.

We have looked at medical bankruptcy before, here and here, but perhaps it is time to revisit.

An article from CNN lists the 5 mistakes you make that can land you in debt. Good information, but it comes up short.

The lead in is a wake up call to most people.

It took the Trim family of Arlington, Texas, three hours to go $15,000 into debt.

That's some shopping spree.

How did they rack up that much debt?

That didn't even count bills from the doctors and the ambulance service. Plus, Trim, who has insurance, owed more than $1,100 in copayments from when he'd had kidney stones earlier in the year.

Which leads us to the question of the hour. Did he have insurance?

His son did not have insurance. Trim said it was "very expensive" to add him to his own policy at the private school where he's an IT director. His wife, Gayle, had just started a job as an executive assistant at a commercial real estate company and wasn't yet eligible for insurance.

While much is made about those who lack health insurance, this story has a mixed message.

In addition to the $15k trip to the ER the Trimm's had $1,100 in unpaid COPAYMENTS from earlier in the year when they (presumably) had health insurance.

For some at least the issue is not having health insurance or not, it is a problem of living paycheck to paycheck.

Four-in-ten workers (41 percent) say they often or always live paycheck to paycheck, according to CareerBuilder.com's latest survey.

Failing to plan for events such as the car breaking down, a major appliance that gives up the ghost, or a medical emergency.

Because workers' paychecks are often spent before they even hit the bank, saving is often not an option. One-in-five said they don't set aside any money for savings each month. Twenty-eight percent save $100 or less per month and 16 percent save less than $50.

According to Znet, 77% of households have cable, satellite or both.

And there is credit card debt.

According to Cardweb, 61% of consumers carry over debt from one month to the next, 31% pay their cards off each month and 7% of households don't have a credit card. The average balance of those who carry a balance is $9,900.

Maybe the problem isn't so much who has health insurance and who doesn't, but who is doing a better job of managing their income.

But the American public isn't the only one who can't manage money.

During each of the last 5 years Congress has spent in excess of $500,000,000 MORE than it took in. The total debt owed by government agencies exceeds $9.3 TRILLION.

It get's worse.

According to USA Today US household's share of the national debt is a staggering $516,348!

Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.

The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition.

We are a nation of glutton's and suffering from financial obesity. The issue of unpaid medical bills is only the tip of the iceberg.

On top of all this we are in an election year and politician's, including those running for Congress, are promising more and more while they can't cover their existing debts.

This is a train wreck.

Read More

Medical Bankruptcy (Revisited)

Many people are struggling to pay their bills, including health care bills. They rock along living paycheck to paycheck and then sudden illness or an accident happens.

We have looked at medical bankruptcy before, here and here, but perhaps it is time to revisit.

An article from CNN lists the 5 mistakes you make that can land you in debt. Good information, but it comes up short.

The lead in is a wake up call to most people.

It took the Trim family of Arlington, Texas, three hours to go $15,000 into debt.

That's some shopping spree.

How did they rack up that much debt?

That didn't even count bills from the doctors and the ambulance service. Plus, Trim, who has insurance, owed more than $1,100 in copayments from when he'd had kidney stones earlier in the year.

Which leads us to the question of the hour. Did he have insurance?

His son did not have insurance. Trim said it was "very expensive" to add him to his own policy at the private school where he's an IT director. His wife, Gayle, had just started a job as an executive assistant at a commercial real estate company and wasn't yet eligible for insurance.

While much is made about those who lack health insurance, this story has a mixed message.

In addition to the $15k trip to the ER the Trimm's had $1,100 in unpaid COPAYMENTS from earlier in the year when they (presumably) had health insurance.

For some at least the issue is not having health insurance or not, it is a problem of living paycheck to paycheck.

Four-in-ten workers (41 percent) say they often or always live paycheck to paycheck, according to CareerBuilder.com's latest survey.

Failing to plan for events such as the car breaking down, a major appliance that gives up the ghost, or a medical emergency.

Because workers' paychecks are often spent before they even hit the bank, saving is often not an option. One-in-five said they don't set aside any money for savings each month. Twenty-eight percent save $100 or less per month and 16 percent save less than $50.

According to Znet, 77% of households have cable, satellite or both.

And there is credit card debt.

According to Cardweb, 61% of consumers carry over debt from one month to the next, 31% pay their cards off each month and 7% of households don't have a credit card. The average balance of those who carry a balance is $9,900.

Maybe the problem isn't so much who has health insurance and who doesn't, but who is doing a better job of managing their income.

But the American public isn't the only one who can't manage money.

During each of the last 5 years Congress has spent in excess of $500,000,000 MORE than it took in. The total debt owed by government agencies exceeds $9.3 TRILLION.

It get's worse.

According to USA Today US household's share of the national debt is a staggering $516,348!

Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.

The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition.

We are a nation of glutton's and suffering from financial obesity. The issue of unpaid medical bills is only the tip of the iceberg.

On top of all this we are in an election year and politician's, including those running for Congress, are promising more and more while they can't cover their existing debts.

This is a train wreck.

Read More

Cavalcade of Risk #59 is up

Host John Leppard has this week's edition of risk-related posts from around the blogosphere. Take a chance and stop on by.

You, too, can host a Cav. We've got openings available for Late Fall, so drop us a line to grab yours.

Read More

Cavalcade of Risk #59 is up

Host John Leppard has this week's edition of risk-related posts from around the blogosphere. Take a chance and stop on by.

You, too, can host a Cav. We've got openings available for Late Fall, so drop us a line to grab yours.

Read More

Beating the Revenooers...

First, a little background: life insurance companies come in (essentially) two flavors, stock and mutual. Stock companies are owned by (wait for it...) stockholders, who may or may not own policies issued by a given carrier. Any dividends accruing from the stock are distributed to the folks who own shares.

Mutual companies are owned (primarily) by their policyholders; buying a policy automatically makes you a part owner. Dividends from these companies generally flow back to their insureds. Dividends on these policies can be used to pay premiums, or provide additional insurance, or paid directly in cash. As with any such arrangement, dividends are not guaranteed.

But the focus here really isn't on dividends, but ownership itself. What does that really mean? It's not as if the president of the company calls up each policyholder for suggestions or ideas. From a practical standpoint, there are really only two benefits: one is, of course, the aforementioned dividends. The other is the potential for a nice settlement if (when?) a mutual company "demutualizes." That's not as scary as it sounds; it just means the carrier decides it doesn't want to be a mutual company anymore, and goes through a (lengthy) process to convert itself into a stock company.

That's all well and good, but let's remember that the "owners" are the policyholders, and they're entitled to "a piece of the action." So when a company demutualizes, it essentially "cashes out" the policyholders' ownership, and sends everyone a check representing their fair share. This can amount to a nice little windfall, but it can also mean tax problems. After all, what's the basis for the value? Is this a capital gains situation? Ordinary income? Or something else entirely?

For a long, long time, the IRS has taken the position that policyholders "hadn't paid anything for the shares and owed taxes on the full amount when the shares were sold. Cash distributions also were fully taxable."

Yikes!

Could that be right?

Well, for the past 7 years, Minnesota-based accountant Charles Ulrich has said "no." His thinking is that folks "had paid for their ownership rights through their premiums so the distributions should have been tax-free." In other words, he took the underlying insurance principle and applied it to the tax law. Pretty cool.

And now, pretty successful:

"A federal court recently agreed with his interpretation."

And this is no small victory: Ulrich thinks that there are some 30 million policyholders who've received such distributions. MetLife alone settled with 11 million insureds back in 2000, to the tune of $7 billion. That's a lot of dec pages.

Of course, the IRS wasn't exactly a big fan of Ulrich's efforts, and accused him of "promoting abusive tax shelters." They even demanded his client list, which he refused to turn over. Eventually, the Feds gave up on that tack.

Of course, the IRS has virtually unlimited funds and resources, and could appeal this decision. They could also fight future such claims, hoping for a different result. So the story's not completely over.

But it sure has a happy ending for Mr Ulrich, his clients, and a host of folks who may get a nice refund check from the Feds.

Read More

Beating the Revenooers...

First, a little background: life insurance companies come in (essentially) two flavors, stock and mutual. Stock companies are owned by (wait for it...) stockholders, who may or may not own policies issued by a given carrier. Any dividends accruing from the stock are distributed to the folks who own shares.

Mutual companies are owned (primarily) by their policyholders; buying a policy automatically makes you a part owner. Dividends from these companies generally flow back to their insureds. Dividends on these policies can be used to pay premiums, or provide additional insurance, or paid directly in cash. As with any such arrangement, dividends are not guaranteed.

But the focus here really isn't on dividends, but ownership itself. What does that really mean? It's not as if the president of the company calls up each policyholder for suggestions or ideas. From a practical standpoint, there are really only two benefits: one is, of course, the aforementioned dividends. The other is the potential for a nice settlement if (when?) a mutual company "demutualizes." That's not as scary as it sounds; it just means the carrier decides it doesn't want to be a mutual company anymore, and goes through a (lengthy) process to convert itself into a stock company.

That's all well and good, but let's remember that the "owners" are the policyholders, and they're entitled to "a piece of the action." So when a company demutualizes, it essentially "cashes out" the policyholders' ownership, and sends everyone a check representing their fair share. This can amount to a nice little windfall, but it can also mean tax problems. After all, what's the basis for the value? Is this a capital gains situation? Ordinary income? Or something else entirely?

For a long, long time, the IRS has taken the position that policyholders "hadn't paid anything for the shares and owed taxes on the full amount when the shares were sold. Cash distributions also were fully taxable."

Yikes!

Could that be right?

Well, for the past 7 years, Minnesota-based accountant Charles Ulrich has said "no." His thinking is that folks "had paid for their ownership rights through their premiums so the distributions should have been tax-free." In other words, he took the underlying insurance principle and applied it to the tax law. Pretty cool.

And now, pretty successful:

"A federal court recently agreed with his interpretation."

And this is no small victory: Ulrich thinks that there are some 30 million policyholders who've received such distributions. MetLife alone settled with 11 million insureds back in 2000, to the tune of $7 billion. That's a lot of dec pages.

Of course, the IRS wasn't exactly a big fan of Ulrich's efforts, and accused him of "promoting abusive tax shelters." They even demanded his client list, which he refused to turn over. Eventually, the Feds gave up on that tack.

Of course, the IRS has virtually unlimited funds and resources, and could appeal this decision. They could also fight future such claims, hoping for a different result. So the story's not completely over.

But it sure has a happy ending for Mr Ulrich, his clients, and a host of folks who may get a nice refund check from the Feds.

Read More

Promising Diabetes News...

The Lone Star State is in the forefront of research into this dread disease, and a Dallas-based researcher "says he's pulled off a medical first: successfully treating mice and rats dying of insulin-dependent diabetes without using insulin."

Dr Roger Unger thinks this has great potential, but actual human testing (and treatment) is a few years away. The key to the process is fat cells; actually, a "protein hormone that plays a key role in regulating energy intake and energy expenditure" called leptin.

Using Leptin-based treatments could help with several facets of diabetes, including "rapid weight loss and altered blood chemistry that make the untreated disease fatal." And of course, one supposes most folks would be pleased to be "off the needle" (not to mention the cost savings accruing from no longer having to buy insulin).

A lot of questions remain, of course. For one thing, there's concern that the effect may be short-term. For another, there's no guarantee that success in rodents will translate to curing people. Still, one hopes that this will indeed be the case.

Good for science!

Read More

Promising Diabetes News...

The Lone Star State is in the forefront of research into this dread disease, and a Dallas-based researcher "says he's pulled off a medical first: successfully treating mice and rats dying of insulin-dependent diabetes without using insulin."

Dr Roger Unger thinks this has great potential, but actual human testing (and treatment) is a few years away. The key to the process is fat cells; actually, a "protein hormone that plays a key role in regulating energy intake and energy expenditure" called leptin.

Using Leptin-based treatments could help with several facets of diabetes, including "rapid weight loss and altered blood chemistry that make the untreated disease fatal." And of course, one supposes most folks would be pleased to be "off the needle" (not to mention the cost savings accruing from no longer having to buy insulin).

A lot of questions remain, of course. For one thing, there's concern that the effect may be short-term. For another, there's no guarantee that success in rodents will translate to curing people. Still, one hopes that this will indeed be the case.

Good for science!

Read More

Piling On Socialized Health Care...

At the risk of striking a metabolically-challenged equine, I'd like to share with you something I received in a recent email:

"Government-controlled health care systems promote longer wait times, reduced quality of care and denials of coverage. Learn first-hand from patients, health care workers and thought leaders from health care systems abroad to learn more about potential costs and consequences of government-run health care systems."

While the idea of a nationalized system sounds good, we've seen that there's scant evidence that it's superior to our own. And because statistics themselves tell only a part of the story, it may be intructive to hear what actually happens to real people, folks just like you and me, who are forced to deal with such systems.

It's not a pretty sight.

[Hat Tip: Elizabeth Terrell]

Read More

Piling On Socialized Health Care...

At the risk of striking a metabolically-challenged equine, I'd like to share with you something I received in a recent email:

"Government-controlled health care systems promote longer wait times, reduced quality of care and denials of coverage. Learn first-hand from patients, health care workers and thought leaders from health care systems abroad to learn more about potential costs and consequences of government-run health care systems."

While the idea of a nationalized system sounds good, we've seen that there's scant evidence that it's superior to our own. And because statistics themselves tell only a part of the story, it may be intructive to hear what actually happens to real people, folks just like you and me, who are forced to deal with such systems.

It's not a pretty sight.

[Hat Tip: Elizabeth Terrell]

Read More

Going Dutch

"Universal" health care is the buzz. It seems everyone wants to know why other countries have "free" health care and we don't.

But no one ever bother's to find out if these other systems work.

The short answer is, they all have flaws. None are perfect.

But one system seems to have promise.

Starting in 2006 residents of the Netherlands were required to have health insurance.

Period.

The government subsidizes policies for adults who can’t afford to pay premiums and makes “risk-equalization” payments to insurers that cover the elderly and those with some chronic conditions such as diabetes.

The government (taxpayer) subsidizes policies for low income residents and those who have high risk medical conditions.

The idea behind the Dutch is that individuals will enroll in health plans that provide the coverage they need instead of a one-size-fits-all plan chosen by an employer. And individuals will pay more attention to health costs, which are largely ignored when the government picks up the tab.

I think it has promise.

Read More

Going Dutch

"Universal" health care is the buzz. It seems everyone wants to know why other countries have "free" health care and we don't.

But no one ever bother's to find out if these other systems work.

The short answer is, they all have flaws. None are perfect.

But one system seems to have promise.

Starting in 2006 residents of the Netherlands were required to have health insurance.

Period.

The government subsidizes policies for adults who can’t afford to pay premiums and makes “risk-equalization” payments to insurers that cover the elderly and those with some chronic conditions such as diabetes.

The government (taxpayer) subsidizes policies for low income residents and those who have high risk medical conditions.

The idea behind the Dutch is that individuals will enroll in health plans that provide the coverage they need instead of a one-size-fits-all plan chosen by an employer. And individuals will pay more attention to health costs, which are largely ignored when the government picks up the tab.

I think it has promise.

Read More

Blind Ambition

Remember Mitt Romney? The good looking guy who had his sights set on a house on Pennsylvania Avenue. Native son of the former Michigan governor. Family man. Chief architect of RomneyCare.

It seems like those who have eyes on the presidency are all talking about making health care available and affordable for everyone.

If Taxachussetts can make headlines for having one of the highest percentage of citizen's with health insurance, why not the rest of the country?

Anyone making campaign promises and pointing to the "success" of Massachusetts might want to look at the facts.

Since legislation was passed in 2006 mandating health insurance coverage for all citizens the number of uninsured have dropped from 657,000 to 307,000.

A success, right?

Among these 350,000 newly covered people, some 174,000 joined Commonwealth Care, a government-supported plan that insures families of four up to 300 percent of the federal poverty line, or roughly $63,000 in annual income. Another 55,000 people joined Medicaid, which is funded by local and federal tax dollars. Only about 18,000 have purchased private insurance.

That means 332,000 opted for health insurance funded by taxpayers.

Folks who make up to $63,000 per year.

Before the legislation, taxpayer funded plans were available but not mandated.

Oops!

Pacific Research Institute's Sally Pipes writes that "the program is in intensive care, surviving only on massive infusions of other people's money."

How much is massive?

RomneyCare should cost taxpayers $625 million in 2008. That's $153 million, or 32 percent, beyond this year's original $472 million appropriation. For 2009, costs may hit $869 million, or another $244 million, 39 percent premium above today's already vertiginous spending curve.

Well it's only money, right?

Unfortunately, Massachusetts's residents love "free" and cheap health care, at someone else's expense. As usual these days, everybody parties, and then taxpayers spend the next morning collecting the empty bottles and cleaning the overflowing ashtrays. This mop-up will cost at least $129 million in new taxes

Toga! Toga! Toga!

Read More

Blind Ambition

Remember Mitt Romney? The good looking guy who had his sights set on a house on Pennsylvania Avenue. Native son of the former Michigan governor. Family man. Chief architect of RomneyCare.

It seems like those who have eyes on the presidency are all talking about making health care available and affordable for everyone.

If Taxachussetts can make headlines for having one of the highest percentage of citizen's with health insurance, why not the rest of the country?

Anyone making campaign promises and pointing to the "success" of Massachusetts might want to look at the facts.

Since legislation was passed in 2006 mandating health insurance coverage for all citizens the number of uninsured have dropped from 657,000 to 307,000.

A success, right?

Among these 350,000 newly covered people, some 174,000 joined Commonwealth Care, a government-supported plan that insures families of four up to 300 percent of the federal poverty line, or roughly $63,000 in annual income. Another 55,000 people joined Medicaid, which is funded by local and federal tax dollars. Only about 18,000 have purchased private insurance.

That means 332,000 opted for health insurance funded by taxpayers.

Folks who make up to $63,000 per year.

Before the legislation, taxpayer funded plans were available but not mandated.

Oops!

Pacific Research Institute's Sally Pipes writes that "the program is in intensive care, surviving only on massive infusions of other people's money."

How much is massive?

RomneyCare should cost taxpayers $625 million in 2008. That's $153 million, or 32 percent, beyond this year's original $472 million appropriation. For 2009, costs may hit $869 million, or another $244 million, 39 percent premium above today's already vertiginous spending curve.

Well it's only money, right?

Unfortunately, Massachusetts's residents love "free" and cheap health care, at someone else's expense. As usual these days, everybody parties, and then taxpayers spend the next morning collecting the empty bottles and cleaning the overflowing ashtrays. This mop-up will cost at least $129 million in new taxes

Toga! Toga! Toga!

Read More

Man Bites Dog

If it bleeds it leads.

Bad news sells. Good news doesn't.

Perhaps that is why almost nothing is said about the recent DROP in the number of uninsured.

The number of Americans without health insurance dropped by more than 1 million people in 2007, the first annual decline in seven years, U.S. Census Bureau officials announced Tuesday.

In this election year politician's want to talk about the uninsured and how their plan will save you.

What they don't tell you are the facts behind the numbers.

1 million FEWER uninsured in 2007 than the year before and the first DROP in the number of uninsured in 7 years.

"Both the percentage and number of people without health insurance decreased in 2007," David Johnson, chief of the Census Bureau's Housing and Household Economic Statistics Division

Just under 10,000,000 of the uninsured are children under the age of 18.

More than 90% of them have one or more parents who work.
60% live in two-parent families.
70% have incomes below 200% of the federal poverty level (1997).

Almost 3 out of 4 uninsured children live in homes that qualify for existing taxpayer funded plans such as Medicaid and SCHIP.

So why aren't the parents availing themselves of this coverage?

For obvious reasons, it is difficult to get a handle on how many of the uninsured are illegal aliens. Estimates range from 10 - 15 million.

This problem is worse in border states, particularly California and Texas where almost 1 in 4 residents do not have health insurance.

Read More

Man Bites Dog

If it bleeds it leads.

Bad news sells. Good news doesn't.

Perhaps that is why almost nothing is said about the recent DROP in the number of uninsured.

The number of Americans without health insurance dropped by more than 1 million people in 2007, the first annual decline in seven years, U.S. Census Bureau officials announced Tuesday.

In this election year politician's want to talk about the uninsured and how their plan will save you.

What they don't tell you are the facts behind the numbers.

1 million FEWER uninsured in 2007 than the year before and the first DROP in the number of uninsured in 7 years.

"Both the percentage and number of people without health insurance decreased in 2007," David Johnson, chief of the Census Bureau's Housing and Household Economic Statistics Division

Just under 10,000,000 of the uninsured are children under the age of 18.

More than 90% of them have one or more parents who work.
60% live in two-parent families.
70% have incomes below 200% of the federal poverty level (1997).

Almost 3 out of 4 uninsured children live in homes that qualify for existing taxpayer funded plans such as Medicaid and SCHIP.

So why aren't the parents availing themselves of this coverage?

For obvious reasons, it is difficult to get a handle on how many of the uninsured are illegal aliens. Estimates range from 10 - 15 million.

This problem is worse in border states, particularly California and Texas where almost 1 in 4 residents do not have health insurance.

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Atta Boy, Gov!

This would be filed under "Intelligent Government Tricks," if we had such a category. Still, given our enthusiasm for pointing out the dumb things gummint does, it seems only fair to celebrate rational decisions made by the state.

There's been a push in Ohio to make paid sick leave mandatory. This is commonly called a "stealth tax," (or "unfunded mandate") because it would force employers to pay extra wages, with no reimbursement from the state. These extra costs would be passed on to consumers, in a state economy that's already in the doldrums.

Fortunately, Democrat Governor Ted Strickland understands the economics of these kids of tactics, and has come out against the ballot issue that would enable them (Issue 4). He and Lt Governor Lee Fisher have said that the mandate would be "unworkable, unwieldy and would be detrimental to Ohio's economy."

Hear, Hear!

[Hat Tip: Ohio PIA]

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Atta Boy, Gov!

This would be filed under "Intelligent Government Tricks," if we had such a category. Still, given our enthusiasm for pointing out the dumb things gummint does, it seems only fair to celebrate rational decisions made by the state.

There's been a push in Ohio to make paid sick leave mandatory. This is commonly called a "stealth tax," (or "unfunded mandate") because it would force employers to pay extra wages, with no reimbursement from the state. These extra costs would be passed on to consumers, in a state economy that's already in the doldrums.

Fortunately, Democrat Governor Ted Strickland understands the economics of these kids of tactics, and has come out against the ballot issue that would enable them (Issue 4). He and Lt Governor Lee Fisher have said that the mandate would be "unworkable, unwieldy and would be detrimental to Ohio's economy."

Hear, Hear!

[Hat Tip: Ohio PIA]

Read More

It's the Outcomes, Silly

Well-meaning but ignorant folks from the AMA to AARP [ed: sorry, couldn't find any Z org's that fit the bill] have long touted gummint-run healthcare, a la Medicare, as the ideal solution to a system they consider "broken." Nationalized health care, they argue, provides the most fair and efficient means of delivery.

Um, no:

"More than 825,000 Canadian citizens are currently on waiting lists for surgery and other necessary treatments...Canada also limits access to common medical technologies."

But wait, the MVNHS© has it right!

Um, no (again):

"In Britain, more than 1 million sick citizens are currently waiting for hospital admission...Britain even has a government agency explicitly tasked with limiting people’s access to prescription drugs."

We've mentioned these problems numerous times here at IB (for example, our Oy Canada and MVNHS© series). The problem, of course, isn't the cost or availability of health insurance, it's the cost of health care. And if a system can't control that (as no socialized scheme has ever managed to do), then one is left with rationing and substandard care.

As Sally Pipes, president and CEO of the Pacific Research Institute, notes, the pundits and pols love the sound bites, but not the facts. They're quick to cite the recent World Health Organization's ranking of various countries' health care systems (which we also posted on) which placed the US near the bottom of the top 20%, behind countries like Morocco and even Costa Rica. But they looked at only two of the important factors that contribute to a nation's true health care picture: a modified definition of mortality and "fairness" (whatever that means). What the study failed to consider are much more important factors, such as cancer and cardiac care.

The truth is, our system is actually superior to socialized schemes when it comes to saving, and prolonging, lives. Why is it, for example, that Italian Prime Minister Silvio Berlusconi chose the Cleveland Clinic, over his own country's "free" medical care, when he needed heart surgery a couple of years ago? I doubt it was just for a trip to Corky and Lenny's.

And what about that "free" health care? Surely a gummint-run system guarantees better cost efficiency?

Sadly, no:

"The United States produces over half of the $175 billion in health care technology products purchased globally. In 2004, the federal government funded medical research to the tune of $18.4 billion. By contrast, the European Union — which has a significantly larger population than the United States — allocated funds equal to just $3.7 billion for medical research."

You get what you pay for.

The bottom line is that there is no "universal" health care scheme that can control costs, guarantee access and deliver consistently superior outcomes. Does this mean that our system is perfect? Of course not. But market-driven changes beat central planning committee ones every time.

[Hat Tip: Power Line]

Read More

It's the Outcomes, Silly

Well-meaning but ignorant folks from the AMA to AARP [ed: sorry, couldn't find any Z org's that fit the bill] have long touted gummint-run healthcare, a la Medicare, as the ideal solution to a system they consider "broken." Nationalized health care, they argue, provides the most fair and efficient means of delivery.

Um, no:

"More than 825,000 Canadian citizens are currently on waiting lists for surgery and other necessary treatments...Canada also limits access to common medical technologies."

But wait, the MVNHS© has it right!

Um, no (again):

"In Britain, more than 1 million sick citizens are currently waiting for hospital admission...Britain even has a government agency explicitly tasked with limiting people’s access to prescription drugs."

We've mentioned these problems numerous times here at IB (for example, our Oy Canada and MVNHS© series). The problem, of course, isn't the cost or availability of health insurance, it's the cost of health care. And if a system can't control that (as no socialized scheme has ever managed to do), then one is left with rationing and substandard care.

As Sally Pipes, president and CEO of the Pacific Research Institute, notes, the pundits and pols love the sound bites, but not the facts. They're quick to cite the recent World Health Organization's ranking of various countries' health care systems (which we also posted on) which placed the US near the bottom of the top 20%, behind countries like Morocco and even Costa Rica. But they looked at only two of the important factors that contribute to a nation's true health care picture: a modified definition of mortality and "fairness" (whatever that means). What the study failed to consider are much more important factors, such as cancer and cardiac care.

The truth is, our system is actually superior to socialized schemes when it comes to saving, and prolonging, lives. Why is it, for example, that Italian Prime Minister Silvio Berlusconi chose the Cleveland Clinic, over his own country's "free" medical care, when he needed heart surgery a couple of years ago? I doubt it was just for a trip to Corky and Lenny's.

And what about that "free" health care? Surely a gummint-run system guarantees better cost efficiency?

Sadly, no:

"The United States produces over half of the $175 billion in health care technology products purchased globally. In 2004, the federal government funded medical research to the tune of $18.4 billion. By contrast, the European Union — which has a significantly larger population than the United States — allocated funds equal to just $3.7 billion for medical research."

You get what you pay for.

The bottom line is that there is no "universal" health care scheme that can control costs, guarantee access and deliver consistently superior outcomes. Does this mean that our system is perfect? Of course not. But market-driven changes beat central planning committee ones every time.

[Hat Tip: Power Line]

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A Latesummer's Day Grand Rounds

Dr Theresa Chan, hostess of Rural Doctoring, is a small town doc and a scholar of The Bard. She presents this week's Grand Rounds in true Shakespearean style. Unlike some of Willy's works, however, this collection is easy to follow, and full of useful info.

Go forth!

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A Latesummer's Day Grand Rounds

Dr Theresa Chan, hostess of Rural Doctoring, is a small town doc and a scholar of The Bard. She presents this week's Grand Rounds in true Shakespearean style. Unlike some of Willy's works, however, this collection is easy to follow, and full of useful info.

Go forth!

Read More

Profiles

I get daily reports from a vendor about people looking for health insurance. The demographics are interesting to say the least.

Over the last 3 days the report reveals the following.

103 people visited their site in search of coverage. (These are just those who live in Georgia).

76 did not have health insurance. Some have just recently lost insurance, usually coverage that was tied to their job. They received their COBRA notice and went through sticker shock. Most have been without coverage for months or even years. Some will have, or suspect they have, health issues. They are looking for insurance to pay for something that could be expensive.

Insurance doesn't work that way.

It doesn't matter if it is health insurance, auto, or life insurance. If you want the coverage you must buy it BEFORE you need it.

16 currently have health insurance but are also Type 1 diabetics. They will not be able to secure medically underwritten insurance and will either have to keep their current plan or go into the high risk market.

2 more have health insurance but have had a heart attack.

1 has AIDS.

4 are currently pregnant.

4 are currently insured and have indicated no significant health issues.

Read More

Profiles

I get daily reports from a vendor about people looking for health insurance. The demographics are interesting to say the least.

Over the last 3 days the report reveals the following.

103 people visited their site in search of coverage. (These are just those who live in Georgia).

76 did not have health insurance. Some have just recently lost insurance, usually coverage that was tied to their job. They received their COBRA notice and went through sticker shock. Most have been without coverage for months or even years. Some will have, or suspect they have, health issues. They are looking for insurance to pay for something that could be expensive.

Insurance doesn't work that way.

It doesn't matter if it is health insurance, auto, or life insurance. If you want the coverage you must buy it BEFORE you need it.

16 currently have health insurance but are also Type 1 diabetics. They will not be able to secure medically underwritten insurance and will either have to keep their current plan or go into the high risk market.

2 more have health insurance but have had a heart attack.

1 has AIDS.

4 are currently pregnant.

4 are currently insured and have indicated no significant health issues.

Read More

Pricetag for the Uninsured

[Welcome Industry Radar readers!]

Just how much do the uninsured pay for health care?

According to the WSJ, about $30,000,000,000.

If you apply the popularly quoted figure of 47,000,000 uninsured, that breaks out to less than $630 per person.

That's a bargain.

Health-care spending accounted for 16.3% of gross domestic product in 2007, or about $2.2 trillion, and that amount could nearly double in 10 years, according to federal figures. More of the cost is expected to shift to the government, even as it seeks to shrink large deficits.

Shifting cost to the government, who in turn shifts the cost to the taxpayer.

And how about those deficits?

Some doctors and hospitals donate time and forgo profit to cover poor people, and in some cases private donations cover the costs. Just how much money doctors and hospitals lose in caring for the uninsured is difficult to pin down, partly because group plans often negotiate lower payment rates than other consumers are billed.

Doctor's and hospital's forgo profits. In most cases they collect nothing.

I thought profits only existed for the insurance carriers.

"group plans often negotiate lower payment rates than other consumers are billed".

Billed charges mean nothing. All that matters is what is paid.

While many have argued that uncompensated care will translate into higher premiums to patients with private insurance, Mr. Hadley said the impact is "very small," noting that despite an increase in the number of uninsured, hospital spending on uncompensated care has been relatively stable. That is partly because the public hospitals and clinics that most often care for the uninsured often don't have many privately insured patients to absorb the costs.

"It's more through taxes than private insurance bills," Mr. Hadley said

So increased premiums AND increased taxes.

Great.

Read More

Pricetag for the Uninsured

[Welcome Industry Radar readers!]

Just how much do the uninsured pay for health care?

According to the WSJ, about $30,000,000,000.

If you apply the popularly quoted figure of 47,000,000 uninsured, that breaks out to less than $630 per person.

That's a bargain.

Health-care spending accounted for 16.3% of gross domestic product in 2007, or about $2.2 trillion, and that amount could nearly double in 10 years, according to federal figures. More of the cost is expected to shift to the government, even as it seeks to shrink large deficits.

Shifting cost to the government, who in turn shifts the cost to the taxpayer.

And how about those deficits?

Some doctors and hospitals donate time and forgo profit to cover poor people, and in some cases private donations cover the costs. Just how much money doctors and hospitals lose in caring for the uninsured is difficult to pin down, partly because group plans often negotiate lower payment rates than other consumers are billed.

Doctor's and hospital's forgo profits. In most cases they collect nothing.

I thought profits only existed for the insurance carriers.

"group plans often negotiate lower payment rates than other consumers are billed".

Billed charges mean nothing. All that matters is what is paid.

While many have argued that uncompensated care will translate into higher premiums to patients with private insurance, Mr. Hadley said the impact is "very small," noting that despite an increase in the number of uninsured, hospital spending on uncompensated care has been relatively stable. That is partly because the public hospitals and clinics that most often care for the uninsured often don't have many privately insured patients to absorb the costs.

"It's more through taxes than private insurance bills," Mr. Hadley said

So increased premiums AND increased taxes.

Great.

Read More

Carnival of Personal Finance

This week's roundup of all things financial is hosted by the Broke Grad Student. Featuring an Olympics theme, it's a champion effort.

Read More

Carnival of Personal Finance

This week's roundup of all things financial is hosted by the Broke Grad Student. Featuring an Olympics theme, it's a champion effort.

Read More

Carrot or Stick?

Which produces better results?

Positive reinforcement or punishment?

It's the age-old question which now is being applied in the workplace. Some employers are willing to reward employees who make lifestyle changes such as losing weight or stop smoking while others choose to punish non-compliant workers with a higher share of the premiums.

A few states are surcharging smokers. Now Alabama will be doing likewise for overweight workers.

Obese workers must be prepared to pay a $25 per month "fine" if they are not ship shape.

The State Employees' Insurance Board this week approved a plan to charge state workers starting in January 2010 if they don't have free health screenings.

If the screenings turn up serious problems with blood pressure, cholesterol, glucose or obesity, employees will have a year to see a doctor at no cost, enroll in a wellness program, or take steps on their own to improve their health. If they show progress in a follow-up screening, they won't be charged. But if they don't, they must pay starting in January 2011.

Seems fair enough.

Not all state employees see it that way.

"It's terrible," said health department employee Chequla Motley. "Some people come into this world big."

Computer technician Tim Colley already pays $24 a month for being a smoker and doesn't like the idea of another charge.

That's a new one on me. "I came into this world big and I am going to continue to get bigger."

You really can't control what happens in utero, but you are responsible if you feel a need to super-size every meal after that.

E-K. Daufin of Montgomery, a college professor and founder of Love Your Body, Love Yourself, which holds body acceptance workshops, said the new policy will be stressful for people like her.

People like to make excuses for coming in extra large sizes. Why can't they just admit they have a problem?

"I'm big and beautiful and doing my best to keep my stress levels down so I can stay healthy," Daufin said. "That's big, not lazy, not a glutton and certainly not deserving of the pompous, poisonous disrespect served up daily to those of us with more bounce to the ounce."

I have never met or heard of a person who lost weight and regretted it.

research shows someone with a body mass index of 35 to 39 generates $1,748 more in annual medical expenses than someone with a BMI less than 25, considered normal.

So the extra $600 doesn't even compensate for the additional cost of insuring the obese.

Carrot cake anyone?

Read More

Carrot or Stick?

Which produces better results?

Positive reinforcement or punishment?

It's the age-old question which now is being applied in the workplace. Some employers are willing to reward employees who make lifestyle changes such as losing weight or stop smoking while others choose to punish non-compliant workers with a higher share of the premiums.

A few states are surcharging smokers. Now Alabama will be doing likewise for overweight workers.

Obese workers must be prepared to pay a $25 per month "fine" if they are not ship shape.

The State Employees' Insurance Board this week approved a plan to charge state workers starting in January 2010 if they don't have free health screenings.

If the screenings turn up serious problems with blood pressure, cholesterol, glucose or obesity, employees will have a year to see a doctor at no cost, enroll in a wellness program, or take steps on their own to improve their health. If they show progress in a follow-up screening, they won't be charged. But if they don't, they must pay starting in January 2011.

Seems fair enough.

Not all state employees see it that way.

"It's terrible," said health department employee Chequla Motley. "Some people come into this world big."

Computer technician Tim Colley already pays $24 a month for being a smoker and doesn't like the idea of another charge.

That's a new one on me. "I came into this world big and I am going to continue to get bigger."

You really can't control what happens in utero, but you are responsible if you feel a need to super-size every meal after that.

E-K. Daufin of Montgomery, a college professor and founder of Love Your Body, Love Yourself, which holds body acceptance workshops, said the new policy will be stressful for people like her.

People like to make excuses for coming in extra large sizes. Why can't they just admit they have a problem?

"I'm big and beautiful and doing my best to keep my stress levels down so I can stay healthy," Daufin said. "That's big, not lazy, not a glutton and certainly not deserving of the pompous, poisonous disrespect served up daily to those of us with more bounce to the ounce."

I have never met or heard of a person who lost weight and regretted it.

research shows someone with a body mass index of 35 to 39 generates $1,748 more in annual medical expenses than someone with a BMI less than 25, considered normal.

So the extra $600 doesn't even compensate for the additional cost of insuring the obese.

Carrot cake anyone?

Read More

Cavalcade of Risk #59: Submissions Due

Next week's Cavalcade of Risk is hosted by John Leppard.

John's eagerly awaiting your risk-related submission, and requests that you please include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

You can submit your post via Blog Carnival or email.

We're scheduling mid-Fall, so please drop us a line to reserve your Cav.

Read More

Cavalcade of Risk #59: Submissions Due

Next week's Cavalcade of Risk is hosted by John Leppard.

John's eagerly awaiting your risk-related submission, and requests that you please include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

You can submit your post via Blog Carnival or email.

We're scheduling mid-Fall, so please drop us a line to reserve your Cav.

Read More

Happy Wonkday!

Julie Ferguson hosts this week's edition of the Health Wonk Review. It's chock full of interesting posts featuring the best of health care policy and polity.

Check it out.

Read More

Happy Wonkday!

Julie Ferguson hosts this week's edition of the Health Wonk Review. It's chock full of interesting posts featuring the best of health care policy and polity.

Check it out.

Read More

Stupid Admin Tricks

Once again, we're delighted to present a post from our favorite anonymous guest blogger (whose most recent work, on Florida's newest health care initiative, can be found here and here). Our anonymous friend is well placed enough in the industry to offer us some unique insights.

In this post, AGB laments the games that are played by some of those who administer ERISA (aka "self-insured") plans:

Here is something to consider. We have seen a rash of material misrepresentation and “gamesmanship” lately resulting in substantial claims costs. In three cases, the administrator filled out all the individual apps (not disclosing any medical information) and just had the employees sign. In another, an app was sent in three days after an incident of care but was dated on the date of the incident. Of course 1 day after the same incident of care, they requested a change in waiting period, thus making this person eligible for benefits.

The question arises: what do we do with clients that are bad actors in these cases. The standard carrier here would adjust the rates to what they should have been underwritten at and make them retroactive, while continuing the policy. Is it time for carriers to start pursuing cases as worst case rather than best case? What is the disincentive for groups to do the same thing with the next carrier if the worst that will happen is that they have to pay what they should have paid in the first place? This affects premiums for all groups in the pool, thus negatively impacting other businesses that applied in good faith.

Ultimately it is the carrier’s decision, but is it time to start moving away from the slap on the wrist and start pursuing options that would be more punitive? Is it worth it or not? Any agent or broker that did this would have their appointment terminated and possibly reported to the department of insurance. What would be the next step for these administrators?

Read More

Stupid Admin Tricks

Once again, we're delighted to present a post from our favorite anonymous guest blogger (whose most recent work, on Florida's newest health care initiative, can be found here and here). Our anonymous friend is well placed enough in the industry to offer us some unique insights.

In this post, AGB laments the games that are played by some of those who administer ERISA (aka "self-insured") plans:

Here is something to consider. We have seen a rash of material misrepresentation and “gamesmanship” lately resulting in substantial claims costs. In three cases, the administrator filled out all the individual apps (not disclosing any medical information) and just had the employees sign. In another, an app was sent in three days after an incident of care but was dated on the date of the incident. Of course 1 day after the same incident of care, they requested a change in waiting period, thus making this person eligible for benefits.

The question arises: what do we do with clients that are bad actors in these cases. The standard carrier here would adjust the rates to what they should have been underwritten at and make them retroactive, while continuing the policy. Is it time for carriers to start pursuing cases as worst case rather than best case? What is the disincentive for groups to do the same thing with the next carrier if the worst that will happen is that they have to pay what they should have paid in the first place? This affects premiums for all groups in the pool, thus negatively impacting other businesses that applied in good faith.

Ultimately it is the carrier’s decision, but is it time to start moving away from the slap on the wrist and start pursuing options that would be more punitive? Is it worth it or not? Any agent or broker that did this would have their appointment terminated and possibly reported to the department of insurance. What would be the next step for these administrators?

Read More

Goofy Retirement

Let's play a game.

Suppose your employer offered a retirement plan that went something like this.

The company will withhold 6.2% of your paycheck and match it with an equal amount. The money will be used to fund a retirement plan that you can start to collect as early as age 62 if you wish.

If you leave this employer you cannot cash out your balance.

If you make it until age 62, you can begin drawing a monthly benefit for as long as you live.

If you die before reaching retirement your designated beneficiary will receive $255. If you have minor children they will receive nominal monthly checks until the turn 18, then the checks will stop.

The money you receive from Social Security will vary according to your earning power during your working years. In general, low wage earners could receive upwards of 40% or so of their pre-retirement earnings. High wage earners might be lucky if they receive 10% of pre-retirement earnings.

In other words, high achiever's are penalized while low achiever's are rewarded.

In any event, according to the Cato Institute, the amount you could have received from privately invested funds vs. from Social Security is anywhere from 3x to 6x greater.

How much better would your post-retirement standard of living be if you could have taken the same amount of money as paid in to Social Security and invested it yourself?

Social Security.

Your earnings, their rules.

That's just goofy.

Read More

Goofy Retirement

Let's play a game.

Suppose your employer offered a retirement plan that went something like this.

The company will withhold 6.2% of your paycheck and match it with an equal amount. The money will be used to fund a retirement plan that you can start to collect as early as age 62 if you wish.

If you leave this employer you cannot cash out your balance.

If you make it until age 62, you can begin drawing a monthly benefit for as long as you live.

If you die before reaching retirement your designated beneficiary will receive $255. If you have minor children they will receive nominal monthly checks until the turn 18, then the checks will stop.

The money you receive from Social Security will vary according to your earning power during your working years. In general, low wage earners could receive upwards of 40% or so of their pre-retirement earnings. High wage earners might be lucky if they receive 10% of pre-retirement earnings.

In other words, high achiever's are penalized while low achiever's are rewarded.

In any event, according to the Cato Institute, the amount you could have received from privately invested funds vs. from Social Security is anywhere from 3x to 6x greater.

How much better would your post-retirement standard of living be if you could have taken the same amount of money as paid in to Social Security and invested it yourself?

Social Security.

Your earnings, their rules.

That's just goofy.

Read More

Eyes and Teeth

Workers in corporate America are mostly spoiled. Until they leave their job, or their job leaves them, they are insulated and totally out of touch with health care costs in the real world.

They have no idea how much a routine office visit or prescription med's cost. They think in terms of $20 for health care.

The same is true for eye's and teeth.

Employer plans offer free or low cost annual exams. Fillings are usually $40 or less. Crowns might be $300. Eyeglasses are $40 or so unless you opt for designer frames and advanced optics.

When these orphans come to me looking for health insurance they also inquire about dental and vision insurance.

Now we start the re-education process.

Office visits to a medical doctor usually run $50 - $60 without a copay. Med's are another story, especially if you have the latest and greatest brand name.

I undertake the task of educating people not only on what health care costs, but how to effectively make better use of their dollars.

That is a major hurdle for most. But what about vision and dental insurance?

Individual vision insurance is almost impossible to find and when you can find it the premium is outrageous. According to an industry trade magazine American's spend an average of $240 per year on vision care and corrective lens.

Will someone explain why you need insurance for vision care? When you can find an insured vision plan the premium is in the $40 per month range.

Paying $500 per year to insure an average expense of $240 doesn't make sense to me.

The same magazine indicated average annual dental expenses for adults range from $1200 to $1800.

That figure seems high to me.

Two checkups and cleanings per year at $150 (or less) per visit still leaves over $1,000 in "other" dental expenses.

Reading between the lines it appears the BULK of dental expenditures are for cosmetic procedures such as bonding and teeth whitening. These procedures are usually not covered by dental insurance since they are not medically necessary.

So how much does individual dental insurance cost?

About $30 - $40 per month per adult.

And what is covered?

Almost nothing during the first year.

You can't access benefits for crowns, root canals or periodontal expenses. Orthodontia (braces) for adults is almost never covered. Braces for children can be covered after 12 months but the children have to be on on the parents plan, the premium doubles or triples and the maximum payout for orthodontia is usually $1,000 or less over their lifetime.

So the economics of insurance for eye's and teeth shakes out like this.

You can expect to spend $400 - $500 per year per person for a benefit valued at $300 or less.

My advice?

Save your money for things that really matter.

Read More