Of course, we're most pleased and proud about that last: it's our readers that drive us, and we're grateful to all of you.
Thanks!!
Sunday, January 31, 2010
IB @ 5
Of course, we're most pleased and proud about that last: it's our readers that drive us, and we're grateful to all of you.
Thanks!!
Saturday, January 30, 2010
Better late...Cavalcade of Risk Edition
I've been away for a few days, and apologize for my tardiness. Please pop over to Wenchy's site for the latest edition of the Cavalcade of Risk.
As usual, Wenchy does a masterful job of presenting varied and interesting (and, of course, very interesting) risk-related posts.
As usual, Wenchy does a masterful job of presenting varied and interesting (and, of course, very interesting) risk-related posts.
Friday, January 29, 2010
Watch for Rising Premiums
Huliq is reporting that the game for insurers may be about to change dramatically. The McCrarran-Ferguson Act gave insurer's immunity against anti-trust regulation.
The threat of ending this protection has been thrown about by politicians with an ax to grind and picked up by some in the media as proof positive there is collusion among carriers to artificially keep premiums high.
Bull!
And the point is?
Those with liberal arts degrees and small sex organs claim this is proof of a price fixing monopoly. Fact is, if they had any business acumen at all they would say just the opposite. As we have stated ad infinitum, market domination by one or a handful of carriers in a given market is proof that competitive market forces are in play.
Antitrust exemption does indeed allow carriers to share information but it has nothing to do with price fixing. The kind of data that is "shared" are things that relate to loss information and risk management.
They do not get together in smoke filled rooms and plot price increases.
If Congress succeeds in repealing McCrarran-Ferguson you can expect premiums to rise for virtually all lines of coverage, not just health insurance.
Think that one over while listening to NPR.
The threat of ending this protection has been thrown about by politicians with an ax to grind and picked up by some in the media as proof positive there is collusion among carriers to artificially keep premiums high.
Bull!
It is no secret that there is a monopoly on health insurance. Google health insurance and one is likely to come with Blue Cross or Aetna.
And the point is?
Those with liberal arts degrees and small sex organs claim this is proof of a price fixing monopoly. Fact is, if they had any business acumen at all they would say just the opposite. As we have stated ad infinitum, market domination by one or a handful of carriers in a given market is proof that competitive market forces are in play.
Antitrust exemption does indeed allow carriers to share information but it has nothing to do with price fixing. The kind of data that is "shared" are things that relate to loss information and risk management.
They do not get together in smoke filled rooms and plot price increases.
If Congress succeeds in repealing McCrarran-Ferguson you can expect premiums to rise for virtually all lines of coverage, not just health insurance.
Think that one over while listening to NPR.
Eat Pork for Better Sex
According to Yahoo News, Argentine President Cristina Fernandez claims the path to a better sex life is to eat more pork.
I wouldn't know. I am not allowed to eat in bed . . .
"I didn't know that eating pork improved sexual activity," Fernandez said in a meeting with representatives of the swine industry late Wednesday. "It is much more gratifying to eat some grilled pork than to take Viagra."
She even joked that "it was all good" after she enjoyed some pork with her husband, former President Nestor Kirchner.
I wouldn't know. I am not allowed to eat in bed . . .
Thursday, January 28, 2010
Robo-underwriting
There is a change you can believe in when it comes to underwriting health insurance plans and it is not what you had hoped for. More people who apply for health insurance in Georgia are being declined for coverage. More are having coverage denied for certain pre-existing medical conditions. More are getting offers from health insurance companies at much higher premiums than originally quoted.
The reason?
The biggest reason is, most people do not know how to properly fill out a health insurance application. They give too much information, or not enough.
Even if you do all the right things the next obstacle is the application itself. All health insurance companies now offer online, electronic applications. Some companies will ONLY accept electronic applications.
This may seem like a good thing but in fact it can be a hornet's nest.
The electronic applications are designed to have almost no human intervention. Give the wrong answer to any one question and you will find your application rejected. Many health insurance companies are routinely rejecting 40 - 50% of applications due to medical reasons.
These automated, or as I like to call them, robo-underwriters, are creating havoc. I can't tell you how often I hear from people who have applied to 2 or 3 health insurance companies only to be denied coverage. Once I hear the details the only thing that is apparent is that they did not know how to fill out an application that would satisfy robo-underwriter.
Most of the time I am able to find a health insurance company that WILL issue coverage. Sometimes I can even get a policy issued by a company that has previously rejected them (although this is becoming increasingly difficult and time consuming).
My best advice is to avoid the robo-underwriter if at all possible by allowing an experienced agent to review and advise the best way to construct and submit an application. A knowledgeable agent will also review possible outcomes from each health insurance company based on your health history and will provide a detailed, written evaluation of offers that may be forthcoming.
So you can take your chances with robo-underwriter and risk getting rejected or rated up for a condition that another health insurance company will consider standard, or you can use an agent to assist.
The reason?
The biggest reason is, most people do not know how to properly fill out a health insurance application. They give too much information, or not enough.
Even if you do all the right things the next obstacle is the application itself. All health insurance companies now offer online, electronic applications. Some companies will ONLY accept electronic applications.
This may seem like a good thing but in fact it can be a hornet's nest.
The electronic applications are designed to have almost no human intervention. Give the wrong answer to any one question and you will find your application rejected. Many health insurance companies are routinely rejecting 40 - 50% of applications due to medical reasons.
These automated, or as I like to call them, robo-underwriters, are creating havoc. I can't tell you how often I hear from people who have applied to 2 or 3 health insurance companies only to be denied coverage. Once I hear the details the only thing that is apparent is that they did not know how to fill out an application that would satisfy robo-underwriter.
Most of the time I am able to find a health insurance company that WILL issue coverage. Sometimes I can even get a policy issued by a company that has previously rejected them (although this is becoming increasingly difficult and time consuming).
My best advice is to avoid the robo-underwriter if at all possible by allowing an experienced agent to review and advise the best way to construct and submit an application. A knowledgeable agent will also review possible outcomes from each health insurance company based on your health history and will provide a detailed, written evaluation of offers that may be forthcoming.
So you can take your chances with robo-underwriter and risk getting rejected or rated up for a condition that another health insurance company will consider standard, or you can use an agent to assist.
Ban Underwriting and Call It A Day?
A reader asks Consumer Reports, "Why not ban underwriting of pre-existing conditions?".
Here is part of their response.
Subsidies do nothing to reduce the cost of health care, which is the primary driver of health insurance premiums. Subsidies come from taxes, that come from tax payers.
Subsidies just rearrange the deck chairs.
Here is part of their response.
But there’s a problem with that when it comes to health care. In the U.S., we spend more than $7,000 a year on health care for every man, woman, and child. "Even if you had every person in America in the risk pool, a family of four would have to pay $28,000 for health care," said Karen Pollitz, an insurance expert at the Georgetown University Health Policy Institute. "That’s why you’ll never expand coverage without subsidies."
Subsidies do nothing to reduce the cost of health care, which is the primary driver of health insurance premiums. Subsidies come from taxes, that come from tax payers.
Subsidies just rearrange the deck chairs.
SOTU Notes
The State of the Union addressed health insurance reform and a lot of other things that impact all of us, regardless of political persuasion or profession. Here are some links that may be of interest.
Text of SOTU.
AP fact check of SOTU.
Enjoy.
Text of SOTU.
AP fact check of SOTU.
Enjoy.
Wednesday, January 27, 2010
Cart-Horse. Or is that Horse-Cart?
Back in the day - oh, say, a year or so ago - it used to be that Congress would write a bill, Congresscritters and we of the unwashed masses would read it, and then there'd be a vote on it.
That is to say, in the dark middle-ages of - oh, say a year or so ago - the electorate and its representatives would actually know what was in a bill before deciding whether or not it merited passage.
Heck, they even wrote a song about it.
But that was then - oh, say, a year or so ago - and this is now:
"Mr. Axelrod also issued a warning to Democrats who were reconsidering their support for the health care measure.
“As a political matter, the foolish thing to do would be for anybody else who supported this to walk away from it ... people will never know what’s in that bill until we pass it, the president signs it and they have a whole new range of protections they never had before.” [emphasis added]
Did I hear (or rather, read) that right? Pass a bill before knowing what's in it?
Are you kidding me?
I'm thinking of an old Yiddish proverb.
[Hat Tip: James Taranto]
That is to say, in the dark middle-ages of - oh, say a year or so ago - the electorate and its representatives would actually know what was in a bill before deciding whether or not it merited passage.
Heck, they even wrote a song about it.
But that was then - oh, say, a year or so ago - and this is now:
"Mr. Axelrod also issued a warning to Democrats who were reconsidering their support for the health care measure.
“As a political matter, the foolish thing to do would be for anybody else who supported this to walk away from it ... people will never know what’s in that bill until we pass it, the president signs it and they have a whole new range of protections they never had before.” [emphasis added]
Did I hear (or rather, read) that right? Pass a bill before knowing what's in it?
Are you kidding me?
I'm thinking of an old Yiddish proverb.
[Hat Tip: James Taranto]
Tuesday, January 26, 2010
Short Term Medical Pitfalls
Many times people will buy a Short Term Medical (STM) plan as a stop-gap or bridge between coverage. Most of the time things work out. You have purchased a plan, "just in case something happens", and you never have to use the plan.
But sometimes you actually need your short term health insurance plan to do more than originally planned.
As indicated, short term medical insurance plans are designed to fill a gap in coverage when transitioning from one health insurance plan to another. Many times you will purchase the coverage for a specific time period, such as 3 months. Others may have an undetermined need and purchase their STM on a month to month basis.
In either case, coverage expires at the end of the term, usually 6 months or in some cases 12 months. If you need health insurance after the term expires you apply for a new plan.
Unlike traditional major medical insurance, short term medical plans do not renew. With each application you start a new waiting period on pre-existing conditions.
Short term medical plans usually have very loose (by traditional standards) underwriting qualifications. As such, many who cannot qualify for a traditional health insurance plan may be accepted by a short term medical plan.
STM plans have a very unique characteristic that allows this "flex underwriting" and at the same time keeps the rates low. Short term health insurance plans do not cover anything for which you have been diagnosed or treated for in the 5 years immediately prior to the effective date of coverage.
This is true if you are a new applicant, or re-applying for a new term with the same health insurance company.
Therein lies the rub.
I got a call a short while ago from a client. Last year we looked at health insurance plans that would meet her needs and budget. Money was tight and since she was getting married in a few months she decided to pick a short term medical plan with a lower price.
She applied. Coverage was issued. Her wedding date was postponed.
Coverage expired at the end of 6 months so she applied for a new health insurance plan and was approved.
Three weeks after the new short term medical plan went into effect she was involved in an auto accident. Injuries were serious and to make matters worse, the other driver only had minimal auto insurance coverage.
The good news is, her short term plan did what it was supposed to do and has paid out over $100,000 in benefits to cover 4 surgery's as well as medication, doctor visits and so forth.
The bad news is, she will need at least 3 more surgery's and her 6 month policy is coming to an end in a month.
She called, looking for a permanent major medical plan that will pick up where this one leaves off and pay for future surgery, rehab, etc..
I had to break the bad news to her. She can't get a new major medical plan with anyone until she is released from a doctor's care for her existing conditions. Any new STM plan will not cover treatment for this injury since it is a pre-existing condition.
This was not good news.
I am not the type to beat up my clients and make them take one plan over another. Rather, I outline their options, give them advice, and let them pick. If they are leaning toward a plan that has pitfalls, I encourage them to avoid that plan but in the end I say the same thing.
"This is your plan and your money. Pick the one that satisfies your needs and budget".
That is what my client did. She picked a plan that fit what she felt like were her needs at the time. The few dollars saved will do nothing to make up for the emotional and financial impact of future treatment without the benefit of health insurance to pay the bills.
Georgia Insurance Shop is a leading resource for health insurance information. We offer a wide range of affordable Georgia health insurance plans to fit any need or budget and we do not charge extra for expert advice.
And for our California readers, Bill Halper offers great advice as well.
But sometimes you actually need your short term health insurance plan to do more than originally planned.
As indicated, short term medical insurance plans are designed to fill a gap in coverage when transitioning from one health insurance plan to another. Many times you will purchase the coverage for a specific time period, such as 3 months. Others may have an undetermined need and purchase their STM on a month to month basis.
In either case, coverage expires at the end of the term, usually 6 months or in some cases 12 months. If you need health insurance after the term expires you apply for a new plan.
Unlike traditional major medical insurance, short term medical plans do not renew. With each application you start a new waiting period on pre-existing conditions.
Short term medical plans usually have very loose (by traditional standards) underwriting qualifications. As such, many who cannot qualify for a traditional health insurance plan may be accepted by a short term medical plan.
STM plans have a very unique characteristic that allows this "flex underwriting" and at the same time keeps the rates low. Short term health insurance plans do not cover anything for which you have been diagnosed or treated for in the 5 years immediately prior to the effective date of coverage.
This is true if you are a new applicant, or re-applying for a new term with the same health insurance company.
Therein lies the rub.
I got a call a short while ago from a client. Last year we looked at health insurance plans that would meet her needs and budget. Money was tight and since she was getting married in a few months she decided to pick a short term medical plan with a lower price.
She applied. Coverage was issued. Her wedding date was postponed.
Coverage expired at the end of 6 months so she applied for a new health insurance plan and was approved.
Three weeks after the new short term medical plan went into effect she was involved in an auto accident. Injuries were serious and to make matters worse, the other driver only had minimal auto insurance coverage.
The good news is, her short term plan did what it was supposed to do and has paid out over $100,000 in benefits to cover 4 surgery's as well as medication, doctor visits and so forth.
The bad news is, she will need at least 3 more surgery's and her 6 month policy is coming to an end in a month.
She called, looking for a permanent major medical plan that will pick up where this one leaves off and pay for future surgery, rehab, etc..
I had to break the bad news to her. She can't get a new major medical plan with anyone until she is released from a doctor's care for her existing conditions. Any new STM plan will not cover treatment for this injury since it is a pre-existing condition.
This was not good news.
I am not the type to beat up my clients and make them take one plan over another. Rather, I outline their options, give them advice, and let them pick. If they are leaning toward a plan that has pitfalls, I encourage them to avoid that plan but in the end I say the same thing.
"This is your plan and your money. Pick the one that satisfies your needs and budget".
That is what my client did. She picked a plan that fit what she felt like were her needs at the time. The few dollars saved will do nothing to make up for the emotional and financial impact of future treatment without the benefit of health insurance to pay the bills.
Georgia Insurance Shop is a leading resource for health insurance information. We offer a wide range of affordable Georgia health insurance plans to fit any need or budget and we do not charge extra for expert advice.
And for our California readers, Bill Halper offers great advice as well.
Skiing Holidays In France
Health Insurance For Winter Sports
After the recent weather we have experienced here in the UK it comes as a bit of a surprise that thousands of Brits will be going on a winter sports holiday over the coming months with the likes of skiing and snowboarding at the top of the list. And what’s even more worrying is that half of them will be doing so without international health insurance.
Out of the many sports around the world surprisingly skiing isn’t at the top of the injury list with the likes of horse riding and football way in front. Although not at the top of the list you only have to check out sites like YouTube to see what can happen when out skiing and believe me after you see this you will be looking for health insurance cover straight away.
It goes without saying taking part in such a great exciting sport comes with the risk of being seriously injured or can even end up in a death. It only takes one dodgy miss place of your foot or a quick turn and you could lose your balance in a second. So remember if you’re planning on taking a winter break this year with sports involved make sure your covered for all injuries.
LOL Grand Rounds (Featuring Teh Kittehs)
I have no idea how or where the whole LOLKitten meme got started, but Nurse Kim harnesses their cloying cuteness to good effect with this week's edition of Grand Rounds.
Drop by for the kittens, stay for the great medblog posts.
Drop by for the kittens, stay for the great medblog posts.
Monday, January 25, 2010
Zombies in CA
Golden State politicos have turned a deaf ear to their Bay State cousins, who last week roundly rejected ObamaCare by sending Scott Brown to DC. The folks in Sacramento think that a state-run health care system is the way to go, proving that, like the undead, the concept of gummint-run health care is difficult to put down:
"A key legislative committee in California revived a bill Thursday to create a government-run health care system in the nation's most populous state ... Creating a single-payer system would cost California an estimated $210 billion in its first year."
Surprisingly, though, I rather like this idea. As we've previously noted, experimenting at the state level makes a lot of sense: in a worst-case scenario, only one state's citizens are put at risk, rather than the whole country. On the other hand. if any part of it is successful (it could happen!), there may be ways to translate that to other states. At the very least, we can learn from one state's mistakes, or successes.
Of course, at a time when California's budget is deep in the red, it may be difficult to push this through. It's not clear whether, given the rejection of ObamaCare by an overwhelming majority of American's, this will pass the state's Senate. Stay tuned.
"A key legislative committee in California revived a bill Thursday to create a government-run health care system in the nation's most populous state ... Creating a single-payer system would cost California an estimated $210 billion in its first year."
Surprisingly, though, I rather like this idea. As we've previously noted, experimenting at the state level makes a lot of sense: in a worst-case scenario, only one state's citizens are put at risk, rather than the whole country. On the other hand. if any part of it is successful (it could happen!), there may be ways to translate that to other states. At the very least, we can learn from one state's mistakes, or successes.
Of course, at a time when California's budget is deep in the red, it may be difficult to push this through. It's not clear whether, given the rejection of ObamaCare by an overwhelming majority of American's, this will pass the state's Senate. Stay tuned.
Roll of the Dice: Insurance or Lotto?
[Welcome Industry Radar readers]
One of the very first lessons in Insurance 101 is that insurance is risk management, not gambling. I never quite bought into that, especially as regards indemnity-based products (such as health or home insurance). Life insurance is, almost by definition, something of a gamble as well: the fact of one's mortality is a given, the when, however, remains uncertain. I don't really see a contradiction here: after all, risk management and gambling are really just two sides of the (ahem) same coin.
Some scientific folks, though, wonder if there's a connection between buying insurance and playing the numbers:
"It's all in the genes, contends a team of economists and molecular geneticists from the Hebrew University of Jerusalem and two Asian universities."
It's an interesting look inside the decision making processes we employ, and how they're influenced by our genetic and psychological makeup. It's a safe bet you'll find it intriguing.
[Hat Tip: FoIB Holly Robinson]
One of the very first lessons in Insurance 101 is that insurance is risk management, not gambling. I never quite bought into that, especially as regards indemnity-based products (such as health or home insurance). Life insurance is, almost by definition, something of a gamble as well: the fact of one's mortality is a given, the when, however, remains uncertain. I don't really see a contradiction here: after all, risk management and gambling are really just two sides of the (ahem) same coin.
Some scientific folks, though, wonder if there's a connection between buying insurance and playing the numbers:
"It's all in the genes, contends a team of economists and molecular geneticists from the Hebrew University of Jerusalem and two Asian universities."
It's an interesting look inside the decision making processes we employ, and how they're influenced by our genetic and psychological makeup. It's a safe bet you'll find it intriguing.
[Hat Tip: FoIB Holly Robinson]
Is Health Care still Free?
Some of you might have noticed recently that moves are afoot in the Spanish Health Service. Normally UK citizens are entitled to the same services as any Spanish citizen under a reciprocal agreement between the Spanish & UK Governments.
However, there is a mood growing within both the Spanish Health Service and various regional governments [to whom health-care is devolved], that the the should be clarified, read tightened, as to who does and does not qualify for it.
Currently, all EU citizens who are registered as resident in Spain, those working and paying taxes, and those over the age of retirement are able to benefit from the Spanish Health Service. But everyone else from now on will only be entitled to emergency treatment, under the auspices of the European Health Insurance Card. And from now on the Spanish Public Sector Union SiMAP has indicated that it's members are going to tighten up which ailments they consider emergencies and which not.
The meaning of this for Brits who wish to spend time in Spain, is that unless you wish to fully integrate yourself into Spanish society, you had better start thinking about taking out some form of International Health Insurance. As Spain is getting tough on 'freeloaders'.
Currently, all EU citizens who are registered as resident in Spain, those working and paying taxes, and those over the age of retirement are able to benefit from the Spanish Health Service. But everyone else from now on will only be entitled to emergency treatment, under the auspices of the European Health Insurance Card. And from now on the Spanish Public Sector Union SiMAP has indicated that it's members are going to tighten up which ailments they consider emergencies and which not.
Saturday, January 23, 2010
Friday, January 22, 2010
Doc's Behaving Badly: The Note on the Door
So my primary care doc decided to retire, but declined to announce this decision to his patients. Before (apparently) skipping town, he and his (former) practice posted a letter to that effect on the front door. The practice (which continued on) also decided not to notify its patients of this material and substantial change to their health care equation.
This, of course, creates a number of problems:
First, by failing to notify its patients, the practice puts their insurance coverage at risk. As most professional agents counsel their clients, just because one doc in a practice is in-network doesn't automatically mean that they all are.
Second, although I was not a regular fixture at this office, I've been a patient for over 10 years, and the fact that the now-retired physician -- we'll call him Dr S -- is no longer available seems relevant. For example, after much nagging, er, urging by my better half, I (finally!) scheduled a full-scale routine exam. Mind you, I scheduled this exam after Dr S flew the coop, but before I was aware of "the sign on the door." In fact, the only reason I knew about it at all is that one of my clients is (or was) also a long-time patient of Dr S, and called me to find out what I knew about it.
And so I stopped by the office, saw (and read) "the note on the door," and popped in for details. I was told by the very nice young lady behind the glass window that the staff had strongly encouraged Dr S to send out a letter announcing his forthcoming retirement, but (for reasons known only to himself, apparently) he demurred. I nodded, and asked why the other, remaining doc (his erstwhile partner) hadn't felt it necessary to notify her new patients of the change. The young lady replied that they were telling patients as they called in; I quickly corrected her, reminding her that I had made my appointment after the event, but was told nothing.
There really wasn't anything she could say to that, nor did I expect her to. It's not her call to make.
The more I pondered this, the angrier I became; just as in a marriage, the doctor-patient relationship is built on trust: the doc trusts that I will inform him (or her) about symptoms or whatever, and I trust that I will receive appropriate care, or a referral, or whatever. By failing to explicitly notify me of this change, the practice broke that trust.
Obviously, there's nothing to be done about Dr S. He did what he did, and there's really no recourse there. But his (now former) partner abused that relationship, and I wondered if perhaps the Montgomery County Medical Society might have something to say about that.
I called the society and left several voice mails, one of which was eventually returned. I was eventually transferred to a Ms Mahle, who apparently forgot to take her "be nice to people who call in" pills that morning. For one thing, she completely mischaracterized how insurance networks operate, and when I corrected her, she got, well, let's just call it "snippy." She did provide me with the number for the Ohio Medical Board, but then told me she didn't want to talk with me, and hung up before I could reply.
Which was probably just as well.
When I called the Ohio Medical Board, I learned several interesting things:
First, it was obvious that I wasn't the first person to have, um, issues with the Montgomery County Medical Society, but that they weren't at liberty to discuss this in any detail. That's because of the second thing I learned: the "Medical Society" is simply an association of providers who pay dues for, well, whatever the Society does for them. They apparently have no power (nor, apparently, desire) to discipline errant physicians. That's up to the State Medical Board, which is the actual government agency which oversees physicians (and, one presumes) other providers. They do have a formal complaint process, of which I may or may not avail myself.
Needless to say, I won't be using that practice anymore: they've squandered my trust with "a note on the door."
This, of course, creates a number of problems:
First, by failing to notify its patients, the practice puts their insurance coverage at risk. As most professional agents counsel their clients, just because one doc in a practice is in-network doesn't automatically mean that they all are.
Second, although I was not a regular fixture at this office, I've been a patient for over 10 years, and the fact that the now-retired physician -- we'll call him Dr S -- is no longer available seems relevant. For example, after much nagging, er, urging by my better half, I (finally!) scheduled a full-scale routine exam. Mind you, I scheduled this exam after Dr S flew the coop, but before I was aware of "the sign on the door." In fact, the only reason I knew about it at all is that one of my clients is (or was) also a long-time patient of Dr S, and called me to find out what I knew about it.
And so I stopped by the office, saw (and read) "the note on the door," and popped in for details. I was told by the very nice young lady behind the glass window that the staff had strongly encouraged Dr S to send out a letter announcing his forthcoming retirement, but (for reasons known only to himself, apparently) he demurred. I nodded, and asked why the other, remaining doc (his erstwhile partner) hadn't felt it necessary to notify her new patients of the change. The young lady replied that they were telling patients as they called in; I quickly corrected her, reminding her that I had made my appointment after the event, but was told nothing.
There really wasn't anything she could say to that, nor did I expect her to. It's not her call to make.
The more I pondered this, the angrier I became; just as in a marriage, the doctor-patient relationship is built on trust: the doc trusts that I will inform him (or her) about symptoms or whatever, and I trust that I will receive appropriate care, or a referral, or whatever. By failing to explicitly notify me of this change, the practice broke that trust.
Obviously, there's nothing to be done about Dr S. He did what he did, and there's really no recourse there. But his (now former) partner abused that relationship, and I wondered if perhaps the Montgomery County Medical Society might have something to say about that.
I called the society and left several voice mails, one of which was eventually returned. I was eventually transferred to a Ms Mahle, who apparently forgot to take her "be nice to people who call in" pills that morning. For one thing, she completely mischaracterized how insurance networks operate, and when I corrected her, she got, well, let's just call it "snippy." She did provide me with the number for the Ohio Medical Board, but then told me she didn't want to talk with me, and hung up before I could reply.
Which was probably just as well.
When I called the Ohio Medical Board, I learned several interesting things:
First, it was obvious that I wasn't the first person to have, um, issues with the Montgomery County Medical Society, but that they weren't at liberty to discuss this in any detail. That's because of the second thing I learned: the "Medical Society" is simply an association of providers who pay dues for, well, whatever the Society does for them. They apparently have no power (nor, apparently, desire) to discipline errant physicians. That's up to the State Medical Board, which is the actual government agency which oversees physicians (and, one presumes) other providers. They do have a formal complaint process, of which I may or may not avail myself.
Needless to say, I won't be using that practice anymore: they've squandered my trust with "a note on the door."
Medical Bill Helper: The Rest of the Story
As promised when introducing the newest member of the "Resources" section of our sidebar, here's what Rick Lifsitz, CEO of Medical Bill Helper, shared with me in an extended phone interview:
InsureBlog: First, thanks so much for taking the time to help our readers understand what your service is all about. Can you tell us about your background? Are you a physician, for example?
Rick Lifsitz: I'm always happy to explain what we do. No, I'm not a physician, I'm a businessman, MBA, with many years of experience starting and running companies. Mostly with technology and how to apply technology to solve business problems.
IB: What was the original motivation for Medical Bill Helper (MBH)?
RL: As a business owner, I'd heard lots of stories, and seen firsthand, how folks with no insurance, or who had to go out of network, were routinely charged much more than the insurance companies paid. They needed the health care, and were stuck with the bills. I didn't think that was right.
For example, I looked at what radiologists were charging in a specific area for a certain test. The exact same test ran anywhere from $300 to $3,000, all from providers all within a few blocks or miles of each other. It just didn't seem to make sense. And it didn't seem fair that people without insurance were having to pay such high amounts. I knew that a lot of these prices could be negotiated, but most people don't know that, or know how to go about it. [ed: This may be particularly helpful when dealing with Hidden Providers]
IB: How is MBH different from, for example, those discount card programs we see advertised so heavily?
RL: Well, for one thing, we don't have any kind of on-going fee arrangement. You sign up and we charge you a percentage of what we save on a claim. There's no monthly "membership fee" or the like. And we don't charge anything if we aren't able to save our client at least 10%. I think that any consumer can go to their doctor and ask for a simple 10% discount, so we don't charge unless we generate a bigger savings than that. And that's also why we don't work with charges under $500; the point is to deal with the runaway costs, not the small ones.
IB: Okay, but that begs the question, just how do you know what the "right" number or charge should be?
RL: We have databases with UCR [ed: Usual, Customary and Reasonable] for different procedures and areas, and we have people on staff with many years of experience negotiating these costs for the insurance companies. Even though we actually opened up MBH in 2009, our people have decades of experience in these kinds of negotiations.
IB: One of the challenges with the discount cards is that they typically require payment in full at time of service, or within a very narrow timeframe afterwards; there's generally no "payment plan" arrangement available. Does MBH work pretty much the same way?
RL: Well, by definition there's no requirement for payment at time of service; we only come into the picture afterwards. Our experience is that providers, while the preference is for payment in full, we've also had occasions where there's been a payment arrangement set up. The big issue is that there are really two kinds of people in this situation: those that have no intention of paying, and those that want to but have finance or budget issues. That first group (non-payers) isn't coming to us, anyway; why bother negotiating on something you're not going to pay in the first place? It's that second group that we're trying to help.
IB: Thanks so much for your time, and we'll remind our readers that they can find the MBH link in the "Resources" section of our sidebar. And we'll also point out that that's a direct link to MBH; we don't receive any compensation for folks who find you because of us [ed: darn!].
InsureBlog: First, thanks so much for taking the time to help our readers understand what your service is all about. Can you tell us about your background? Are you a physician, for example?
Rick Lifsitz: I'm always happy to explain what we do. No, I'm not a physician, I'm a businessman, MBA, with many years of experience starting and running companies. Mostly with technology and how to apply technology to solve business problems.
IB: What was the original motivation for Medical Bill Helper (MBH)?
RL: As a business owner, I'd heard lots of stories, and seen firsthand, how folks with no insurance, or who had to go out of network, were routinely charged much more than the insurance companies paid. They needed the health care, and were stuck with the bills. I didn't think that was right.
For example, I looked at what radiologists were charging in a specific area for a certain test. The exact same test ran anywhere from $300 to $3,000, all from providers all within a few blocks or miles of each other. It just didn't seem to make sense. And it didn't seem fair that people without insurance were having to pay such high amounts. I knew that a lot of these prices could be negotiated, but most people don't know that, or know how to go about it. [ed: This may be particularly helpful when dealing with Hidden Providers]
IB: How is MBH different from, for example, those discount card programs we see advertised so heavily?
RL: Well, for one thing, we don't have any kind of on-going fee arrangement. You sign up and we charge you a percentage of what we save on a claim. There's no monthly "membership fee" or the like. And we don't charge anything if we aren't able to save our client at least 10%. I think that any consumer can go to their doctor and ask for a simple 10% discount, so we don't charge unless we generate a bigger savings than that. And that's also why we don't work with charges under $500; the point is to deal with the runaway costs, not the small ones.
IB: Okay, but that begs the question, just how do you know what the "right" number or charge should be?
RL: We have databases with UCR [ed: Usual, Customary and Reasonable] for different procedures and areas, and we have people on staff with many years of experience negotiating these costs for the insurance companies. Even though we actually opened up MBH in 2009, our people have decades of experience in these kinds of negotiations.
IB: One of the challenges with the discount cards is that they typically require payment in full at time of service, or within a very narrow timeframe afterwards; there's generally no "payment plan" arrangement available. Does MBH work pretty much the same way?
RL: Well, by definition there's no requirement for payment at time of service; we only come into the picture afterwards. Our experience is that providers, while the preference is for payment in full, we've also had occasions where there's been a payment arrangement set up. The big issue is that there are really two kinds of people in this situation: those that have no intention of paying, and those that want to but have finance or budget issues. That first group (non-payers) isn't coming to us, anyway; why bother negotiating on something you're not going to pay in the first place? It's that second group that we're trying to help.
IB: Thanks so much for your time, and we'll remind our readers that they can find the MBH link in the "Resources" section of our sidebar. And we'll also point out that that's a direct link to MBH; we don't receive any compensation for folks who find you because of us [ed: darn!].
Thursday, January 21, 2010
Cavalcade of Risk #97: Call for submissions
Wenchy hosts next week's Cavalcade of Risk. Submissions are due this Monday (January 25th); please include:
■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post
And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).
You can submit your post via Blog Carnival or email.
We need hosts for March and April - please click here to volunteer!
■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post
And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).
You can submit your post via Blog Carnival or email.
We need hosts for March and April - please click here to volunteer!
MassCare: No Brownie Points
FoIB Michael Cannon (director of health policy studies for the Cato Institute) has published a new study that shows some major cracks in MassCare. For example, it's significantly reduced the number of private insurer options in the Bay State, and it's cost a lot more than originally advertised (which we've long since noted). All the while failing to actually improve health.
Download the study here.
By the way, that may also explain why " [f]ifty-two percent of Bay State voters who were surveyed as the polls closed [on Tuesday] said they opposed the federal health care reform measure and 42 percent said they cast their ballot to help stop President Obama from passing his chief domestic initiative."
Download the study here.
By the way, that may also explain why " [f]ifty-two percent of Bay State voters who were surveyed as the polls closed [on Tuesday] said they opposed the federal health care reform measure and 42 percent said they cast their ballot to help stop President Obama from passing his chief domestic initiative."
Supersize Me
[Welcome Industry Radar readers!]
Air France will start charging obese flyers for an extra seat if they cannot fit in a regular seat.
The good news is, supersized passengers will only have to pay 75% of the cost of the second seat.
If you want to protest the Air France position, you can fly British Airways. They don't impose a weight limit but do encourage chubby's to buy a second seat for comfort and safety reasons.
Air France will start charging obese flyers for an extra seat if they cannot fit in a regular seat.
The good news is, supersized passengers will only have to pay 75% of the cost of the second seat.
If you want to protest the Air France position, you can fly British Airways. They don't impose a weight limit but do encourage chubby's to buy a second seat for comfort and safety reasons.
Health Wonk Review: What's Your Avatar edition
Health Wonk Review, the biweekly collection of posts on health care policy and polity, continues to get better and better (no mean feat!). For example, the Disease Care Management Blog's Jaan Siderow hosts this week's 'Review, built around the current hit movie "Avatar."
It. Is. Awesome.
Jaan has obviously taken the time to read each and every submission, and offers both excellent commentary and a sly wit to present a screenplay-worthy HWR. Highly recommended.
It. Is. Awesome.
Jaan has obviously taken the time to read each and every submission, and offers both excellent commentary and a sly wit to present a screenplay-worthy HWR. Highly recommended.
Wednesday, January 20, 2010
What a Life!
For the past 15 years, the LIFE Foundation ("a nonprofit organization dedicated to helping consumers make smart insurance decisions to safeguard their families’ financial futures") and Newsweek (the magazine) have co-sponsored a campaign to highlight how life insurance has helped to make a difference in the lives of real people.
Last year, FoIB Nick Perry shared his own family's moving story with us. Perhaps you have a similar experience. Agents can submit their entry for this year's award:
"Agents have until March 31, 2010 to submit a short essay describing how the benefits of insurance, along with their advice and assistance, made a big difference in a client's life at a time of great financial need. An independent panel of judges will select four stories to be featured in a September 2010 special advertising section in Newsweek magazine, seen by nearly 13 million readers. In addition to the Newsweek special feature, each of the award recipients and their clients, along with a guest, will receive an all-expenses paid trip to Seattle, Wash., Sept. 11-14, 2010."
I've asked the folks running this if a consumer can "nominate" his or her agent for services "above and beyond;" we'll let you know if that's an option.
Click here for more details and to submit your nomination.
Last year, FoIB Nick Perry shared his own family's moving story with us. Perhaps you have a similar experience. Agents can submit their entry for this year's award:
"Agents have until March 31, 2010 to submit a short essay describing how the benefits of insurance, along with their advice and assistance, made a big difference in a client's life at a time of great financial need. An independent panel of judges will select four stories to be featured in a September 2010 special advertising section in Newsweek magazine, seen by nearly 13 million readers. In addition to the Newsweek special feature, each of the award recipients and their clients, along with a guest, will receive an all-expenses paid trip to Seattle, Wash., Sept. 11-14, 2010."
I've asked the folks running this if a consumer can "nominate" his or her agent for services "above and beyond;" we'll let you know if that's an option.
Click here for more details and to submit your nomination.
Rewarding Incompetence: Your Tax Dollar$ at Work
In a preview of ObamaCare, the Indian Health Services folks are in the news again ("Indian" as in Sitting Bull, not Gandhi). Regular readers may recall our warning about the Epic Fail nature of this agency last June:
"On some reservations, the oft-quoted refrain is "don't get sick after June," when the federal dollars run out."
But health care is apparently not the only commodity that the IHS has difficulty keeping track of:
"[The] government-run health agency for native Americans and Alaskan natives, has lost or had stolen millions of dollars worth of equipment over the last several years, but has yet to implement recommendations for improvement."
This kind of irresponsibility should not go unpunished, and of course our ever-efficient gummint is right there to save the day, teaching these rascals a bitter lesson:
"The reward for poor performance was to give bonuses and awards" says "Gregory Kutz, managing director of forensic audits and special investigations for the GAO."
Oh, goody!
But of course, the buck ultimately stops with the one in charge of the wasteful agency, right?
Well, not so much:
When asked "last week what measures have been taken to amend these problems and whether the agency has taken measures to ensure individual accountability...Dr. Yvette Roubideaux, the director of the Indian Health Service ... [responded that] “We’ve done a lot to address the property issue, and I’d be happy to talk with you with an interview to address that issue. I want to keep the focus today on H1N1 which is the most important thing that we have to talk about today.”
Of course, of course.
Tens of millions of taxpayer dollars lost or stolen, but gotta get right on that flu vaccine.
In January.
After the big scare.
Gee, I can't wait 'til these folks are in charge of everyone's health care!
"On some reservations, the oft-quoted refrain is "don't get sick after June," when the federal dollars run out."
But health care is apparently not the only commodity that the IHS has difficulty keeping track of:
"[The] government-run health agency for native Americans and Alaskan natives, has lost or had stolen millions of dollars worth of equipment over the last several years, but has yet to implement recommendations for improvement."
This kind of irresponsibility should not go unpunished, and of course our ever-efficient gummint is right there to save the day, teaching these rascals a bitter lesson:
"The reward for poor performance was to give bonuses and awards" says "Gregory Kutz, managing director of forensic audits and special investigations for the GAO."
Oh, goody!
But of course, the buck ultimately stops with the one in charge of the wasteful agency, right?
Well, not so much:
When asked "last week what measures have been taken to amend these problems and whether the agency has taken measures to ensure individual accountability...Dr. Yvette Roubideaux, the director of the Indian Health Service ... [responded that] “We’ve done a lot to address the property issue, and I’d be happy to talk with you with an interview to address that issue. I want to keep the focus today on H1N1 which is the most important thing that we have to talk about today.”
Of course, of course.
Tens of millions of taxpayer dollars lost or stolen, but gotta get right on that flu vaccine.
In January.
After the big scare.
Gee, I can't wait 'til these folks are in charge of everyone's health care!
NHS "more efficient in England" than Scotland - Nuffield Report
The NHS in Scotland was dealt a blow today with the publication of a report from The Nuffield Trust into the state of the NHS in the UK post-devolution. It's principal finding is that despite having the highest spending levels, doctor numbers, nurses and gp's - the NHS in Scotland has highest levels of poor health and the lowest rate of health staff productivity.
Nicola Sturgeon, the Scottish Government health secretary has tried to counter the report by claiming that it is already out of date, telling Radi0 4:
The health secretary has also claimed that Scotlands population dispersal and unique socio-economic factors (areas with long standing problems associated with poverty) render the report unfair.
Do you agree with this report?
You can read for yourself by downloading it from the Nuffield Trust website. There is also a Powerpoint presentation available with key facts and figures.
Nicola Sturgeon, the Scottish Government health secretary has tried to counter the report by claiming that it is already out of date, telling Radi0 4:
"There's been a massive shift in the balance of care towards care in the community and the report takes no account of that whatsoever".
The health secretary has also claimed that Scotlands population dispersal and unique socio-economic factors (areas with long standing problems associated with poverty) render the report unfair.
Do you agree with this report?
You can read for yourself by downloading it from the Nuffield Trust website. There is also a Powerpoint presentation available with key facts and figures.
Tuesday, January 19, 2010
Introducing Medical Bill Helper
Just as HamburgerHelper© makes it easier to stretch your food budget, a new service called Medical Bill Helper makes it easier to stretch your health care budget. Put simply, MBH helps folks negotiate their medical bills. Unlike discount cards, though, there's no monthly fee or charge; in fact, you only pay them if they save a certain percent off your bill.
This is a service that seems tailor-made for insured folks who've used non-network providers, as well as those who are currently uninsured and need help minimizing their costs.
MBH was recommended to us by one of our long-time readers, and I'll be posting an interview with its CEO shortly. In the meantime, check them out here; we've already added them to our Resources list in the sidebar.
BlogBurst for Haiti
We've been asked by fellow MedBlogger Dr Lisa Marcucci (proprietress of the InsideSurgery blog) to help spread the word that "the American College of Surgeons ... the American Academy of Orthopedic Surgeons ... are requesting help from the medical blogosphere in disseminating information that might be helpful to those deployed, deploying and wishing to volunteer in some way."
The idea is to let people know how they can help, whether it's donating money, or food, or time, or expertise (or some combination of those). We'll try to help by publishing (and updating) links for folks who can help in one or more of those ways. Here are two to get the ball rolling:
■ Sponsored by the American College of Surgeons, Operation Giving Back is "a comprehensive resource designed to help surgeons find volunteer opportunities best suited to their expertise and interests, whether across town or across the world."
■ Crudem "is the largest private hospital in the North of Haiti ... the 73 bed hospital has provided uninterrupted service for 23 years. This premier Haitian healthcare facility has been a beacon of hope for the people of Northern Haiti."
The idea is to let people know how they can help, whether it's donating money, or food, or time, or expertise (or some combination of those). We'll try to help by publishing (and updating) links for folks who can help in one or more of those ways. Here are two to get the ball rolling:
■ Sponsored by the American College of Surgeons, Operation Giving Back is "a comprehensive resource designed to help surgeons find volunteer opportunities best suited to their expertise and interests, whether across town or across the world."
■ Crudem "is the largest private hospital in the North of Haiti ... the 73 bed hospital has provided uninterrupted service for 23 years. This premier Haitian healthcare facility has been a beacon of hope for the people of Northern Haiti."
A Delicious Grand Rounds
Dr John Lapuma serves this week's menu, er, collection of great medblog posts featuring Food as Health Care.
Bring a napkin!
Bring a napkin!
Cheap Health Insurance - Some tips for small businesses
1 Make a list of what you need in a minimum health insurance policy. One health insurance policy can never fit all your employees' health care needs. Are you just looking for basic health care coverage in case of emergencies? Are you looking to make it more flexible for different needs? Determine exactly what is important for your situation.
2 Contact some reputable firms for a guide of what is on offer, and what kind of prices are available, you can either do this on you're own, or through a third party.
3 Ask your own personal GP! Strange as it sounds some GPs work for both Private and Public sectors, and are therefore experienced at both ups and downs of both systems, allowing you to cherrypick which ones might suit your situation. Your doctor might also be in a position to recommend companies/plans.
4 Ask/research Health Insurance Plans of other companies. Try both competitors and firms from other sectors. Compare the policies of large, medium and small companies, see which parts work best for which situation.
5 Contact 2 or 3 of your preferred choices directly. Be up front, tell them your situation and ask about the policies they offer. Tell them the policy you are looking for and ask them if they have any alternatives available.
6 Consider a joint overall Health Insurance scheme with one or two of your trusted business partners. as some Health Insurance companies offer better deals depending on the number of members of the scheme, this is to the benefit of everyone involved.
2 Contact some reputable firms for a guide of what is on offer, and what kind of prices are available, you can either do this on you're own, or through a third party.
3 Ask your own personal GP! Strange as it sounds some GPs work for both Private and Public sectors, and are therefore experienced at both ups and downs of both systems, allowing you to cherrypick which ones might suit your situation. Your doctor might also be in a position to recommend companies/plans.
4 Ask/research Health Insurance Plans of other companies. Try both competitors and firms from other sectors. Compare the policies of large, medium and small companies, see which parts work best for which situation.
5 Contact 2 or 3 of your preferred choices directly. Be up front, tell them your situation and ask about the policies they offer. Tell them the policy you are looking for and ask them if they have any alternatives available.
6 Consider a joint overall Health Insurance scheme with one or two of your trusted business partners. as some Health Insurance companies offer better deals depending on the number of members of the scheme, this is to the benefit of everyone involved.
Monday, January 18, 2010
Our Runaway Congress
And now this: "The White House and Democratic Congressional leaders, scrambling for a backup plan to rescue their health care legislation if Republicans win the special election in Massachusetts on Tuesday, have begun laying the groundwork to ask House Democrats to approve the Senate version of the bill and send it directly to President Obama for his signature."
I’m not one who says that the government should never become involved. And I do not feel our health care system is running fine. But while change is needed, that does not mean ANY change will do.
Our health care delivery and financing systems clearly have significant problems. Why haven’t the House and Senate focused on them? Why haven’t the leadership of the House and Senate steered toward solutions to THESE problems instead of creating the monstrous fraud of health care “reform” they are trying to foist off on America?
I think the answers are that this Congress is only pretending to reform health care. It is not reforming medical care. It’s not even reforming health insurance. Those are just fig leaves hiding the real substance. The real substance is deals. Deals that will get a bill passed enabling the majority party to extend its power to control 17% of the entire economy.
How is Congress forging these political deals? The promise of transparency has been discarded like the worthless lie it always was. The real impact of the House and Senate bills is carefully hidden behind a curtain of thousands of pages of arcane verbiage that even the legislators haven't read. The intent is to ram a deal thru before the people or anyone else might actually read it and figure out what has happened.
At the same time, the political bribery is out in the open. The Senator from Nebraska? Bribed for his vote. The Senator from Louisiana? Bribed for her vote. Big Labor? Bribed for its support. How can anyone believe other similar bribes haven't also been doled out behind the curtains?
If none of this were so, the unequal taxation of employer-sponsored and individual insurance wouldn't be permitted to continue. If none of this were so, the fraud and waste in Medicare and Medicaid wouldn't be ignored (except as a means to “fund” the administration’s proposals.) If none of this were so, cross-state purchase of individual insurance wouldn't be ignored. If none of this were so, tort reform wouldn't be ignored. If none of this were so, the CBO scoring of the administration’s proposals wouldn't be ignored. If none of this were so, the emerging will of the people wouldn't be ignored.
And the will of the people is being ignored by our runaway Congress.
I’m not one who says that the government should never become involved. And I do not feel our health care system is running fine. But while change is needed, that does not mean ANY change will do.
Our health care delivery and financing systems clearly have significant problems. Why haven’t the House and Senate focused on them? Why haven’t the leadership of the House and Senate steered toward solutions to THESE problems instead of creating the monstrous fraud of health care “reform” they are trying to foist off on America?
I think the answers are that this Congress is only pretending to reform health care. It is not reforming medical care. It’s not even reforming health insurance. Those are just fig leaves hiding the real substance. The real substance is deals. Deals that will get a bill passed enabling the majority party to extend its power to control 17% of the entire economy.
How is Congress forging these political deals? The promise of transparency has been discarded like the worthless lie it always was. The real impact of the House and Senate bills is carefully hidden behind a curtain of thousands of pages of arcane verbiage that even the legislators haven't read. The intent is to ram a deal thru before the people or anyone else might actually read it and figure out what has happened.
At the same time, the political bribery is out in the open. The Senator from Nebraska? Bribed for his vote. The Senator from Louisiana? Bribed for her vote. Big Labor? Bribed for its support. How can anyone believe other similar bribes haven't also been doled out behind the curtains?
If none of this were so, the unequal taxation of employer-sponsored and individual insurance wouldn't be permitted to continue. If none of this were so, the fraud and waste in Medicare and Medicaid wouldn't be ignored (except as a means to “fund” the administration’s proposals.) If none of this were so, cross-state purchase of individual insurance wouldn't be ignored. If none of this were so, tort reform wouldn't be ignored. If none of this were so, the CBO scoring of the administration’s proposals wouldn't be ignored. If none of this were so, the emerging will of the people wouldn't be ignored.
And the will of the people is being ignored by our runaway Congress.
Memes have two sides
Hank, I think cross-state buying is an idea whose time has come. You make good points in your post today on this subject. Yes, the underlying problem is the cost of medical care; and yes, the idea of cross-state purchase of insurance does nothing about this underlying cost. But - - our health care system does contain government-imposed distortions to the insurance markets that cause medical insurance to be more expensive than it needs to be. I think the prohibition against cross-state purchase of insurance is one of those distortions and I think that allowing interstate sales would reduce insurance premiums.
Here's why I think so.
In the example of Georgia vs. Manhattan, the Georgia insurers would simply set premiums for New York buyers based on the cost of medical care in New York. Georgia BCBS for example can easily obtain the needed cost data for New York from New York BCBS - both are Wellpoint companies. And Georgia BCBS actuaries are perfectly capable of using that data to set prices for New York residents (Keep in mind that medical costs aren't the same in every part of New York, just as they aren't the same in every part of Georgia. Setting different premiums for areas where the medical costs differ is the same actuarial exercise whether within one state, or across state lines.) So there is no reason Georgia buyers would be affected. Note that this is not different from current pricing within the state of Georgia, where premiums vary based on where a person lives within the state e.g., Atlanta vs. Macon. Conclusion: Georgians wouldn't pay more for their insurance, just because New Yorkers were permitted to buy policies issued in Georgia.
However . . . real savings would occur for New Yorkers because they would no longer be forced to buy policies that include all the mandates required by the state of New York. They could choose instead to buy a policy issued in another state – in this case, Georgia, that includes only the Georgia mandates. The result is a lesser premium for New Yorkers - even if their premium is still greater than Georgia residents pay because medical cost might be higher in New York.
So escaping the New York mandates would result in a real premium savings for New York buyers with no impact on Georgia buyers.
There’s more. Issuing additional policies in Georgia would increase premiums written in Georgia. That increases Georgia’s premium tax revenue and reduces New York’s. The increased premium volume would also benefit Georgia companies and agents who, presented with a national market would have every incentive to figure out which states offer the most attractive opportunities, and design plans that would be most attractive to the residents of those states. Perhaps then -voila - we will also have state legislatures actually forced to compete with one another on insurance mandates. (I'm not terribly optimistic that competition among legislatures would actually happen. A similar situation is present with state taxes and yet high-tax states such as Ct and Ma and NY seem oblivious to the net population exodus to other states). Still, allowing cross-state purchase of insurance would not be a bad thing. In fact, it would be a very good thing for anyone who lives in a "high-mandate" state.
Here's why I think so.
In the example of Georgia vs. Manhattan, the Georgia insurers would simply set premiums for New York buyers based on the cost of medical care in New York. Georgia BCBS for example can easily obtain the needed cost data for New York from New York BCBS - both are Wellpoint companies. And Georgia BCBS actuaries are perfectly capable of using that data to set prices for New York residents (Keep in mind that medical costs aren't the same in every part of New York, just as they aren't the same in every part of Georgia. Setting different premiums for areas where the medical costs differ is the same actuarial exercise whether within one state, or across state lines.) So there is no reason Georgia buyers would be affected. Note that this is not different from current pricing within the state of Georgia, where premiums vary based on where a person lives within the state e.g., Atlanta vs. Macon. Conclusion: Georgians wouldn't pay more for their insurance, just because New Yorkers were permitted to buy policies issued in Georgia.
However . . . real savings would occur for New Yorkers because they would no longer be forced to buy policies that include all the mandates required by the state of New York. They could choose instead to buy a policy issued in another state – in this case, Georgia, that includes only the Georgia mandates. The result is a lesser premium for New Yorkers - even if their premium is still greater than Georgia residents pay because medical cost might be higher in New York.
So escaping the New York mandates would result in a real premium savings for New York buyers with no impact on Georgia buyers.
There’s more. Issuing additional policies in Georgia would increase premiums written in Georgia. That increases Georgia’s premium tax revenue and reduces New York’s. The increased premium volume would also benefit Georgia companies and agents who, presented with a national market would have every incentive to figure out which states offer the most attractive opportunities, and design plans that would be most attractive to the residents of those states. Perhaps then -voila - we will also have state legislatures actually forced to compete with one another on insurance mandates. (I'm not terribly optimistic that competition among legislatures would actually happen. A similar situation is present with state taxes and yet high-tax states such as Ct and Ma and NY seem oblivious to the net population exodus to other states). Still, allowing cross-state purchase of insurance would not be a bad thing. In fact, it would be a very good thing for anyone who lives in a "high-mandate" state.
Fisking Another Health "Reform" Meme [UPDATED]
[UPDATE: Mike has a different take on this issue. I suggest reading both.]
In addition to tort reform, one of the alternatives being touted by those opposed to ObamaCare is the pithy "interstate sales" idea. The premise is that under current regulations, it's illegal for a New Yorker (for example) to buy an insurance policy approved for sale in Georgia but not the Empire State. If only this weren't so, goes the argument, people would be able to find much better "deals" on their health insurance.
Um, no.
I agree that, as a practical matter, there would probably be a (very) short term benefit as the folks from higher-premium jurisdictions (should we be calling those "Cadillac States?") rush out to buy Ohio plans. But this would quickly sputter, for a number of reasons:
First, insurers in Georgia (for example) base their premiums on health care costs in -- of all places! -- Georgia. When they see an influx of buyers from Manhattan, they'll have to raise everyone's rates (including Georgians') to make up for the higher cost of health care in the Big Apple.
More important, though, is that no one seems to be addressing the more fundamental, and thus critical, question: Why is health insurance so much more expensive in New York than Georgia (or Indiana)? There are a number of factors in play here, but the two most important are:
■ Cost of health care. For better or worse, health care costs more in some areas than others. If you try to equalize that across the country, then folks in higher cost areas will see a short-term decrease, at the expense of those in lower cost states.
■ The cost of mandates. States like New York York and New Jersey are "community rating" states, which means that carriers can't charge different rates based on health, age, or sex (among others). This leads to much higher rates for everyone. States like Georgia don't, so the cost of insurance is much lower.
Of course, addressing that critical question doesn't fit our leadership's current narrative, so it doesn't get asked.
Let alone answered.
Sunday, January 17, 2010
Saturday, January 16, 2010
Hazards and Risk
[Welcome Industry Radar readers!]
No, not those Hazzards: moral hazards. We've discussed this principle before:
"[T]he risk that coverage against a loss might increase the risk-taking behavior of the insured."
But insurance isn't the only sector to employ this principle; the lending industry has its own version, which unfortunately seems to have been given short shrift of late. The Center for Freedom and Prosperity explains:
[Hat Tip: Hot Air]
No, not those Hazzards: moral hazards. We've discussed this principle before:
"[T]he risk that coverage against a loss might increase the risk-taking behavior of the insured."
But insurance isn't the only sector to employ this principle; the lending industry has its own version, which unfortunately seems to have been given short shrift of late. The Center for Freedom and Prosperity explains:
[Hat Tip: Hot Air]
Friday, January 15, 2010
Plastic Chef
I've been an avid fan of the Iron Chef series on Food Network, both the (campy but fun) original, and the new "American" version. Unlike most of the network's shows, I don't really come away having learned much that I can apply in my own kitchen (unfortunately, squid ink ice cream is a kosher no-no), but it's always fun to watch incredibly talented food-meisters perform feats of culinary derring-do.
I was especially pumped up about the much-touted Mega Challenge on January 3rd; Batali, Lagasse and Flay all in the same place at the same time?! Nirvana!
The "hook" was that the "secret ingredient" was, in fact, "ingredientS:" veggies from the White House garden. Very cool idea, whatever one's politics.
And so the three master chefs, joined by White House Executive Chef Cristeta Comerford, rooted through the copious vegetation, selecting fresh produce by the basketful, destined for culinary legend.
Or so we were lead to believe. The truth is somewhat less appetizing:
"As first reported on AOL's Politics Daily blog, the fruits and vegetables used on the show weren't from the White House. They were stunt produce. Ringers."
No one really believes that any of the the show's "secret" ingredients is actually unknown to the chefs beforehand. It's a bit of suspension-of-disbelief that really harms no one.
But this...this is different:
The episode consistently referred to the vegetables as having come from the WH garden. Every chef participated in the fraud.
"Fraud," Henry? Please! It's a cooking show, for heaven's sake. It's not the Nightly News.
True enough, but the advertisers are now complicit in the perpetuation of this myth, as are all the chefs and sous-chefs who participated. Did the judges know? We can't be sure, but their objectivity is now tainted, as well.
Who was really hurt by this little stunt? No doubt most folks will view this as nothing more than that: a TV stunt. But the credibility of the First Lady is now in question, since she was obviously a willing participant in this obfuscation. As I mentioned before, there's always a subtle wink-wink when the "secret ingredient" is announced, but that doesn't really matter: who cares that the chefs know ahead of time and can prepare a menu? There's at least the challenge of working against the clock, and the other chef. There's an honesty to the battle.
Not anymore.
For once, I don't blame the White House: this is squarely on the Food Network's head. How they choose to deal with it may well determine how long they'll be on the air.
And as FoIB Brian D points out that, if they're willing to carry the charade this far, how do we know who really won?
Color me: disappointed.
I was especially pumped up about the much-touted Mega Challenge on January 3rd; Batali, Lagasse and Flay all in the same place at the same time?! Nirvana!
The "hook" was that the "secret ingredient" was, in fact, "ingredientS:" veggies from the White House garden. Very cool idea, whatever one's politics.
And so the three master chefs, joined by White House Executive Chef Cristeta Comerford, rooted through the copious vegetation, selecting fresh produce by the basketful, destined for culinary legend.
Or so we were lead to believe. The truth is somewhat less appetizing:
"As first reported on AOL's Politics Daily blog, the fruits and vegetables used on the show weren't from the White House. They were stunt produce. Ringers."
No one really believes that any of the the show's "secret" ingredients is actually unknown to the chefs beforehand. It's a bit of suspension-of-disbelief that really harms no one.
But this...this is different:
The episode consistently referred to the vegetables as having come from the WH garden. Every chef participated in the fraud.
"Fraud," Henry? Please! It's a cooking show, for heaven's sake. It's not the Nightly News.
True enough, but the advertisers are now complicit in the perpetuation of this myth, as are all the chefs and sous-chefs who participated. Did the judges know? We can't be sure, but their objectivity is now tainted, as well.
Who was really hurt by this little stunt? No doubt most folks will view this as nothing more than that: a TV stunt. But the credibility of the First Lady is now in question, since she was obviously a willing participant in this obfuscation. As I mentioned before, there's always a subtle wink-wink when the "secret ingredient" is announced, but that doesn't really matter: who cares that the chefs know ahead of time and can prepare a menu? There's at least the challenge of working against the clock, and the other chef. There's an honesty to the battle.
Not anymore.
For once, I don't blame the White House: this is squarely on the Food Network's head. How they choose to deal with it may well determine how long they'll be on the air.
And as FoIB Brian D points out that, if they're willing to carry the charade this far, how do we know who really won?
Color me: disappointed.
Name That Beneficiary
Recently, consumer advocate Bruce Williams was asked about life insurance proceeeds when no beneficiary is named. His answer was fine, but it made me realize that we haven't addressed this particular issue. The question to which Bruce replied involved group life insurance, but is equally valid regarding personally owned policies.
Naming someone in a will is not the same as naming that person on a policy. When there's no beneficiary listed on a life insurance policy, any proceeds will be paid to the deceased's estate, and could be subject to probate and even estate taxes. It also means that the funds may not be immediately available for final expenses. So, it's worth checking your group life plan to make sure that you've named someone to receive the proceeds.
But leaving that line blank isn't the only problem: if you've divorced and remarried (or even just stayed single), your ex- may still be listed as the beneficiary of your plan. Again, this could be a problem if, for example, your new spouse needs those funds for final expenses. The ex- is under no obligation to pony up his or her windfall.
Of course, these issues apply to any non-group plans you own. It's a good idea to review those periodically, and to make sure that the beneficiary designations meet your current needs and goals.
Better safe than sorry.
Naming someone in a will is not the same as naming that person on a policy. When there's no beneficiary listed on a life insurance policy, any proceeds will be paid to the deceased's estate, and could be subject to probate and even estate taxes. It also means that the funds may not be immediately available for final expenses. So, it's worth checking your group life plan to make sure that you've named someone to receive the proceeds.
But leaving that line blank isn't the only problem: if you've divorced and remarried (or even just stayed single), your ex- may still be listed as the beneficiary of your plan. Again, this could be a problem if, for example, your new spouse needs those funds for final expenses. The ex- is under no obligation to pony up his or her windfall.
Of course, these issues apply to any non-group plans you own. It's a good idea to review those periodically, and to make sure that the beneficiary designations meet your current needs and goals.
Better safe than sorry.
Thursday, January 14, 2010
A few thoughts on the "Cadillac" PlanTax
The stated reason behind the proposed Cadillac plan tax (besides the obvious revenue raising) is the discouragement of rich benefit plans. To me, this makes absolutely no sense.
- From a financial perspective, it is immaterial what benefits are offered as long as the plan is priced to cover the actuarial cost of those benefits.
- The bill drafters seem to be saying that expensive plans are, by definition, underpriced. Otherwise, there's no economic reason for a selective tax to discourage their use. I suspect that exactly the opposite is true and that the richest benefit plans have the highest gross margins...it's axiomatic in every other industry that premium products have premium pricing.
- People will quickly drop the Cadillac plans. Who wants to pay a 40% tax to the government when you can buy a plan just under the threshold and use the 40% saving to offset the decrease in benefits?
- As the plans are dropped, two things will happen: At the carrier side, maintaining margins will force a compensating increase in the cost of less expensive, lower margin plans. Secondly, projected tax revenue from the Cadillac plans will fall off a cliff.
- An argument can be made that richer benefit plans cause higher utilization. With a fixed supply, higher demand equates to higher prices. But I don't see medical prices driven by capacity limitations. I see them driven by cost-shifting from the public to private sector, prescription advertising, mandated benefits, medical malpractice issues and a host of other factors. Capacity limitations, where they exist, are reflected in waiting times to get appointments, not higher prices.
- Lastly, individual and small group plans are age rated. Even though the proposed legislation compresses the spread in premiums between young and old, the tax will impact older people more than younger people.
Am I missing something?
- From a financial perspective, it is immaterial what benefits are offered as long as the plan is priced to cover the actuarial cost of those benefits.
- The bill drafters seem to be saying that expensive plans are, by definition, underpriced. Otherwise, there's no economic reason for a selective tax to discourage their use. I suspect that exactly the opposite is true and that the richest benefit plans have the highest gross margins...it's axiomatic in every other industry that premium products have premium pricing.
- People will quickly drop the Cadillac plans. Who wants to pay a 40% tax to the government when you can buy a plan just under the threshold and use the 40% saving to offset the decrease in benefits?
- As the plans are dropped, two things will happen: At the carrier side, maintaining margins will force a compensating increase in the cost of less expensive, lower margin plans. Secondly, projected tax revenue from the Cadillac plans will fall off a cliff.
- An argument can be made that richer benefit plans cause higher utilization. With a fixed supply, higher demand equates to higher prices. But I don't see medical prices driven by capacity limitations. I see them driven by cost-shifting from the public to private sector, prescription advertising, mandated benefits, medical malpractice issues and a host of other factors. Capacity limitations, where they exist, are reflected in waiting times to get appointments, not higher prices.
- Lastly, individual and small group plans are age rated. Even though the proposed legislation compresses the spread in premiums between young and old, the tax will impact older people more than younger people.
Am I missing something?
Another Winger Disses MassCare and Obamacare
President Present has cut a new commercial, ostensibly to help Martha Coakley retain the vacant "Massachusettes" (sorry, but that's how she spells it) senate seat for her party. One of the issues he addresses is, of course, ObamaCare, and how Ms Coakley represents a key vote for its enactment.
Oh, that "winger?" I meant "lifelong Democrat." Posted in the comments section of that Politico story is this little gem:
"I am a lifelong Democrat that will vote for Brown on Tuesday. My main reason is the universal health care plan that is said to be similar to the Massachusetts plan. Under Massachusetts universal health care, I have seen my care and that of my adult children decline during the past year. My daugher has a serious chronic condition and must wait 6 months to see a specialist - she never had to wait more than 4 weeks before the universal health care plan. I have seen my own insurance premiums go up nearly 50%. My son has been assigned a primary care physician who is located three towns away from where he lives and who has a backlog of several weeks. I don't like the plan working through the Congress because there are too many mandates and I believe the cost will be prohibitive. I also believe it analogous to the Mass plan that has given my family poor and deteriorating service. I believe that the federal plan should go back to the drawing board. There should be no denial of coverage because of pre-existing conditions, but there should be fewer other mandates and no one should be mandated to have health insurance. I also think that there is much too much new spending by the federal government. New initiatives used to cost millions, then billions, and now trillions. I don't believe these initiatives are well planned nor efficient. I voted for President Obama -- I thought he was more centrist than he seems to be now. I will be voting for Brown precisely for the reasons that the President outlines as the reasons to vote for Coakley. I am not alone among Democrats in Massachusetts who will vote for Brown -- that is why the polls are so close in this election. - Ben from Boston"
Now, can we guarantee with 100% credibility that "Ben" really is a "lifelong Democrat," or that he even really exists? Nope.
But he's certainly more credible than, say, Jonathan Gruber.
Oh, that "winger?" I meant "lifelong Democrat." Posted in the comments section of that Politico story is this little gem:
"I am a lifelong Democrat that will vote for Brown on Tuesday. My main reason is the universal health care plan that is said to be similar to the Massachusetts plan. Under Massachusetts universal health care, I have seen my care and that of my adult children decline during the past year. My daugher has a serious chronic condition and must wait 6 months to see a specialist - she never had to wait more than 4 weeks before the universal health care plan. I have seen my own insurance premiums go up nearly 50%. My son has been assigned a primary care physician who is located three towns away from where he lives and who has a backlog of several weeks. I don't like the plan working through the Congress because there are too many mandates and I believe the cost will be prohibitive. I also believe it analogous to the Mass plan that has given my family poor and deteriorating service. I believe that the federal plan should go back to the drawing board. There should be no denial of coverage because of pre-existing conditions, but there should be fewer other mandates and no one should be mandated to have health insurance. I also think that there is much too much new spending by the federal government. New initiatives used to cost millions, then billions, and now trillions. I don't believe these initiatives are well planned nor efficient. I voted for President Obama -- I thought he was more centrist than he seems to be now. I will be voting for Brown precisely for the reasons that the President outlines as the reasons to vote for Coakley. I am not alone among Democrats in Massachusetts who will vote for Brown -- that is why the polls are so close in this election. - Ben from Boston"
Now, can we guarantee with 100% credibility that "Ben" really is a "lifelong Democrat," or that he even really exists? Nope.
But he's certainly more credible than, say, Jonathan Gruber.
In Which a Meme is Rejected [UPDATED]
When people refer to an item as the "Cadillac of [fill in the blank]," it's meant to praise that item as top-notch and feature-rich. There's an implied quality about something being the "Cadillac" of its ilk. Implicit also is the idea that the item in question is more expensive than its competitors, but well worth it.
It's become fashionable to refer to the excise tax on health insurance plans with premiums over a certain threshold as applying to "Cadillac plans." Again, implicit in this comparison is the idea that the plans in question are more expensive because they have richer benefits. We refer to those kinds of plans as "Phantom Insurance," but that's another post. The problem with the idea that the excise tax would apply only to these feature-rich plans is that it is (at best) misleading.
I have sitting on my desk, for example, the renewal for a small group with premiums that would now make the carrier subject to the proposed new tax. It has a $2,000 per person annual deductble, no office visit co-pays and no prescription drug card. It is a very simple configuration and, in conjunction with a company-sponsored HRA, works well. But some of the insureds in this particular group have significant and expensive health problems which result in a pretty high premium. None of them are lifestyle-related, so there's little that can be done to mitigate these costs. It is by no means a "Cadillac plan;" perhaps a Kia at best. Still, the renewal premium would automatically trigger the new tax.
I've chosen to call these kinds of plans "mandate-driven;" my reasoning is that a significant savings could be achieved simply by removing some of the special-interest-generated mandated benefits. But I'm a reasonable sort: what would you call them? After all, there are thousands, perhaps millions of small employers whose premiums will trigger the new tax, but whose benefits certainly aren't at a "Cadillac" level.
Suggestions?
UPDATE - Overtaken by Events Edition: It's now being reported that the most appropriate term for these high-premium policies would be "Non-Union-Sponsored Health Plans."
It's become fashionable to refer to the excise tax on health insurance plans with premiums over a certain threshold as applying to "Cadillac plans." Again, implicit in this comparison is the idea that the plans in question are more expensive because they have richer benefits. We refer to those kinds of plans as "Phantom Insurance," but that's another post. The problem with the idea that the excise tax would apply only to these feature-rich plans is that it is (at best) misleading.
I have sitting on my desk, for example, the renewal for a small group with premiums that would now make the carrier subject to the proposed new tax. It has a $2,000 per person annual deductble, no office visit co-pays and no prescription drug card. It is a very simple configuration and, in conjunction with a company-sponsored HRA, works well. But some of the insureds in this particular group have significant and expensive health problems which result in a pretty high premium. None of them are lifestyle-related, so there's little that can be done to mitigate these costs. It is by no means a "Cadillac plan;" perhaps a Kia at best. Still, the renewal premium would automatically trigger the new tax.
I've chosen to call these kinds of plans "mandate-driven;" my reasoning is that a significant savings could be achieved simply by removing some of the special-interest-generated mandated benefits. But I'm a reasonable sort: what would you call them? After all, there are thousands, perhaps millions of small employers whose premiums will trigger the new tax, but whose benefits certainly aren't at a "Cadillac" level.
Suggestions?
UPDATE - Overtaken by Events Edition: It's now being reported that the most appropriate term for these high-premium policies would be "Non-Union-Sponsored Health Plans."
Wednesday, January 13, 2010
Herr Gruber: "I Know Nussing!"
There's an old adage in crime-solving: "Follow the money." The ancient Romans put it even more succinctly: "Cui bono," who benefits?
When it comes to health care "reform," we know quite well who doesn't benefit: the American people. But not, apparently, all Americans:
"The White House is placing a giant collective bet on Gruber's "assumptions" to justify key portions of the Senate bill such as the "Cadillac tax," which they allowed people to believe was independent verification. Now that we know that Gruber's work was not that of an independent analyst but rather work performed as a contractor to the White House and paid for by taxpayers..."
Please note that this indictment comes not from some right-wing, ultra-conservative source, but from uber-leftist Jane Hamsher, writing at the proto-liberal Huffington Post. She painstakingly documents a "peer review" process that would make the ClimateGate perpetrators blush. In short, the Obamastration's minions have been touting Dr Gruber's "analysis" of costs under ObamaCare as the work of a disinterested, independent third party, rather than the paid political hack that he actually is.
And, of course, old media readily lapped it up.
This morning, I had the pleasure of being interviewed (again) by Jenny Gold of Kaiser Health News. The focus of the interview [ed: link when available] was about the impact of the proposed tax on mandate-driven health insurance plans (I reject the nonsensical term "Cadillac plans"). I explained to Jenny why it would drive small businesses to shed their group insurance plans, and how it would actually affect plans not specifically subject to the tax.
This latest information underscores the disingenuous nature of those pushing for the tax, and reveals a stunningly cynical White House. I'd add "hypocritical" as well, but it's obvious that this whole exercise is very much in keeping with how stupid our leaders really believe us to be.
For them, this kind of fraud is a feature, not a bug.
[Hat Tip: Ace of Spades]
When it comes to health care "reform," we know quite well who doesn't benefit: the American people. But not, apparently, all Americans:
"The White House is placing a giant collective bet on Gruber's "assumptions" to justify key portions of the Senate bill such as the "Cadillac tax," which they allowed people to believe was independent verification. Now that we know that Gruber's work was not that of an independent analyst but rather work performed as a contractor to the White House and paid for by taxpayers..."
Please note that this indictment comes not from some right-wing, ultra-conservative source, but from uber-leftist Jane Hamsher, writing at the proto-liberal Huffington Post. She painstakingly documents a "peer review" process that would make the ClimateGate perpetrators blush. In short, the Obamastration's minions have been touting Dr Gruber's "analysis" of costs under ObamaCare as the work of a disinterested, independent third party, rather than the paid political hack that he actually is.
And, of course, old media readily lapped it up.
This morning, I had the pleasure of being interviewed (again) by Jenny Gold of Kaiser Health News. The focus of the interview [ed: link when available] was about the impact of the proposed tax on mandate-driven health insurance plans (I reject the nonsensical term "Cadillac plans"). I explained to Jenny why it would drive small businesses to shed their group insurance plans, and how it would actually affect plans not specifically subject to the tax.
This latest information underscores the disingenuous nature of those pushing for the tax, and reveals a stunningly cynical White House. I'd add "hypocritical" as well, but it's obvious that this whole exercise is very much in keeping with how stupid our leaders really believe us to be.
For them, this kind of fraud is a feature, not a bug.
[Hat Tip: Ace of Spades]
