Bailout Craziness

Exchanged emails today with Jason Shafrin (host of this week's Health Wonk Review) regarding the "doings" on Wall Street. Jason, I should note, is a remarkably bright and able young man, who's just about completed his Ph.D. in health economics, and will soon be available for whatever company is smart (and swift) enough to grab him up.

Jason asked me if (and how) the bailout was affecting the health insurance business or any of my work, and wondered whether or not I supported the bailout. Since this is an insurance blog, not a finance or political one, I'll stick with the insurance related issues here.

The first part is simple: for the most part, the life insurance piece really hasn't affected me. I don't use AIG for that, so no problem. Likewise the health side: they're not in the small group or individual markets. As I remarked recently regarding this situation, I was incensed that the gummint (i.e. the taxpayer) essentially bought an insurance company, and lamented the sad state of affairs vis A M Best.

From an insurance perspective, the latest iteration from the Senate includes what I would consider a "poison pill:" mental health parity. This is an expensive and unnecessary intrusion of the government, which has no place in the discussion of whether or not we should be bailing out Wall Street. As I remarked to Jason, I think its inclusion inferred a surprisingly candid connection between our congress critters and the need for mental health coverage.

It's not that I believe that mental health is trivial, nor that it shouldn't be addressed. But as we've demonstrated numerous times here at IB, mandated benefits add to the overall cost of health insurance, and this one will most assuredly increase premiums, causing more folks to choose to be uninsured. Perhaps that's the intent, but who knows?

What I do know is that the fact that it had to be covertly added to a ginormous financial bill (pun in 10 did) speaks volumes about its true value.

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Bailout Craziness

Exchanged emails today with Jason Shafrin (host of this week's Health Wonk Review) regarding the "doings" on Wall Street. Jason, I should note, is a remarkably bright and able young man, who's just about completed his Ph.D. in health economics, and will soon be available for whatever company is smart (and swift) enough to grab him up.

Jason asked me if (and how) the bailout was affecting the health insurance business or any of my work, and wondered whether or not I supported the bailout. Since this is an insurance blog, not a finance or political one, I'll stick with the insurance related issues here.

The first part is simple: for the most part, the life insurance piece really hasn't affected me. I don't use AIG for that, so no problem. Likewise the health side: they're not in the small group or individual markets. As I remarked recently regarding this situation, I was incensed that the gummint (i.e. the taxpayer) essentially bought an insurance company, and lamented the sad state of affairs vis A M Best.

From an insurance perspective, the latest iteration from the Senate includes what I would consider a "poison pill:" mental health parity. This is an expensive and unnecessary intrusion of the government, which has no place in the discussion of whether or not we should be bailing out Wall Street. As I remarked to Jason, I think its inclusion inferred a surprisingly candid connection between our congress critters and the need for mental health coverage.

It's not that I believe that mental health is trivial, nor that it shouldn't be addressed. But as we've demonstrated numerous times here at IB, mandated benefits add to the overall cost of health insurance, and this one will most assuredly increase premiums, causing more folks to choose to be uninsured. Perhaps that's the intent, but who knows?

What I do know is that the fact that it had to be covertly added to a ginormous financial bill (pun in 10 did) speaks volumes about its true value.

Read More

Good News, Bad News

First, the good news.

Assurant Health has inked a new 10 year marketing agreement with State Farm Insurance. This allows State Farm agents nationwide to continue offering Assurant products to their clients.

Assurant Health has been in business since 1892 and is the brand name for products underwritten and issued by Time Insurance Company, John Alden Life Insurance Company and Union Security Insurance Company. Together, these three underwriting companies provide health insurance coverage for almost one million people nationwide.

Now, the bad news.

In most states, Assurant products are not the most competitive. In Georgia they are often 20% higher than comparable products from other well known carriers.

One of their best selling products has artificial limits on benefits that are needed most when you have a serious illness or accident. The plan caps the carriers liability on a major claim at $2500 per year on outpatient benefits. It also caps Rx at $2,000 per year.

No problem until you need a medication that is $2,000 or more per dose. Some meds can run $8,000 per dose.

It also sets an annual cap on all benefits of $100,000. On a major claim you can run through that in a few days.

In all fairness you can "buy up" your benefits to something more adequate. But since these plans are sold by State Farm agents, they are rarely versed in health care benefits. They can tell you anything you need to know about car insurance but most don't know the difference in bipolar and bipedal.

The plans are also designed to hit a certain price point. They will appeal to the uninformed shopper who is looking for something inexpensive.

It is kind of like buying an auto insurance policy that will cover the cost of replacing your vehicle, but with a cap of $500. That's not a problem if you are driving a $500 car. The price on the insurance is right but for most people will fall way short when you need it.

Assurant does have some plans that are actually quite good . . . as long as you don't mind paying extra for something you can get elsewhere for a lot less.

So this is good news for Assurant. They gain access to buyers who are willing to accept a lesser plan in order to keep a relationship with their "auto" guy or gal.

It is not so good for the people who actually buy these plans.

Read More

Good News, Bad News

First, the good news.

Assurant Health has inked a new 10 year marketing agreement with State Farm Insurance. This allows State Farm agents nationwide to continue offering Assurant products to their clients.

Assurant Health has been in business since 1892 and is the brand name for products underwritten and issued by Time Insurance Company, John Alden Life Insurance Company and Union Security Insurance Company. Together, these three underwriting companies provide health insurance coverage for almost one million people nationwide.

Now, the bad news.

In most states, Assurant products are not the most competitive. In Georgia they are often 20% higher than comparable products from other well known carriers.

One of their best selling products has artificial limits on benefits that are needed most when you have a serious illness or accident. The plan caps the carriers liability on a major claim at $2500 per year on outpatient benefits. It also caps Rx at $2,000 per year.

No problem until you need a medication that is $2,000 or more per dose. Some meds can run $8,000 per dose.

It also sets an annual cap on all benefits of $100,000. On a major claim you can run through that in a few days.

In all fairness you can "buy up" your benefits to something more adequate. But since these plans are sold by State Farm agents, they are rarely versed in health care benefits. They can tell you anything you need to know about car insurance but most don't know the difference in bipolar and bipedal.

The plans are also designed to hit a certain price point. They will appeal to the uninformed shopper who is looking for something inexpensive.

It is kind of like buying an auto insurance policy that will cover the cost of replacing your vehicle, but with a cap of $500. That's not a problem if you are driving a $500 car. The price on the insurance is right but for most people will fall way short when you need it.

Assurant does have some plans that are actually quite good . . . as long as you don't mind paying extra for something you can get elsewhere for a lot less.

So this is good news for Assurant. They gain access to buyers who are willing to accept a lesser plan in order to keep a relationship with their "auto" guy or gal.

It is not so good for the people who actually buy these plans.

Read More

Health Wonk Review: Bailout Edition

No, host Jason Shafrin isn't "bailing out" of the HWR; quite the contrary. This week's edition includes several posts highlighting how the finance sector and overlaps the medical. As always, there are plenty of interesting subjects, from Wall Street to Pennsylvania Avenue.

Be sure to check it out.

Read More

Health Wonk Review: Bailout Edition

No, host Jason Shafrin isn't "bailing out" of the HWR; quite the contrary. This week's edition includes several posts highlighting how the finance sector and overlaps the medical. As always, there are plenty of interesting subjects, from Wall Street to Pennsylvania Avenue.

Be sure to check it out.

Read More