Disingenuous ObamneyCare© Proponents

Since the train-wreck itself is indefensible on any logical or legal grounds, it just make sense to hire union members to astro-turf ginned up protests. Here, a gaggle of SEIU-related "women" explicitly discuss how much they were paid for their participation:

[Courtesy of The Daily Caller]

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SwedishCare: "Shut up or die"

Welcome to SvenCare©, where your nurses are hot (or not), you can literally be saved by the bell (or not), and you can call 911 but you better not say anything when you do:

"Swedish health authorities have come under criticism over the death of a woman whose repeated calls to emergency services were ignored because she was still able to talk."

But not, of course, for long. In Sweden, apparently, those cell phone minutes can kill you.

Literally:

"Jill Soderberg, 22, died in her home... shortly after she had placed her third and last call ... requesting an ambulance"

Hey, just because she was having major respiratory failure is no reason to be alarmed, right? After all, she could still talk, right?

Right?!

[Hat Tip: FoIB Jeff M]

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Subrogation in South Carolina Part II: Proper Parties to the Action

Subrogation in South Carolina Series: Part II

Post by Lee Floyd

An initial question when evaluating and bringing a subrogation claim is who are the proper parties to identify as bringing suit?  While ordinarily a fairly simple question in most litigation, this issue creates numerous complexities when dealing with subrogation claims, and resolving these issues can have a substantial impact on the perceived value of a subrogation claim. 

The impact of the named parties is apparent when you consider whether a jury will be directly informed that not only is insurance involved, but any award will be for the partial or complete benefit of an insurance company.  Further, because South Carolina law firmly prohibits any reference to the existence of (or non-existence of) liability insurance, the jury will not expressly know whether the burden of an award will be placed on the defendant or the defendant’s insurance carrier.  This scenario can easily present a situation in which a jury perceives the case as one where a multi-million dollar insurance company is asking to recover damages from a small company or an individual.  In short, the parties may present a picture of Goliath pursuing David. 

While some issues remain unanswered in South Carolina, the following general rules exist for the proper parties for bringing a subrogation claim.  Each depends upon the total amount of the loss the insurer has paid. 

1. The insured alone may bring the claim:  It appears that in most situations the subrogation claim may be brought exclusively in the name of the insured.  In South Carolina, an insured is the only proper party to institute a subrogation claim where an insurer has not yet paid for the loss or disputes coverage depending on the outcome of the claim against the third party.  While obvious in its reasoning, this rule has important implications: an insurer appears capable of always bringing a subrogation claim solely listing the insured as the plaintiff and still retains control over prosecution of the claim under the terms of the insurance policy. Using this rationale, there is no need to identify the plaintiff as “insurance company X as subrogee of” or similar language. 

2. The insured and the insurer are both proper parties to the action: This approach has been recognized in South Carolina where an insurer pays only a portion of the insured’s loss due to the actions of the defendant. This rule is consistent with South Carolina’s recognition of equitable subrogation as automatic on a pro-rata basis.

3. The insurer may bring the action solely in its own name: An insurer may file a Complaint solely in its own name only where it is has paid the total loss.  It is unclear, in South Carolina, whether this requires the insurer to have waived any amount due under the policy for the deductible or if this amount is excluded from calculating the total loss.

While this issue can be overlooked, determining the proper parties to Complaint in a subrogation claim may have significant ramifications on how the claim is presented to a jury and the perceived value of a claim.  As it currently exists, South Carolina law appears to permit an insurer to institute a subrogation claim in solely the insured’s name in most, if not all, circumstances.  It appears that this approach may be underutilized or overlooked in current practice.

This blog post is the second in a series by Collins & Lacy attorney Lee Floyd that seeks to identify some common issues that arise in subrogation claims for property damage and provide some general guidelines for resolving those issues.  Read the first post Subrogation Claims in South Carolina.  To learn more about how Collins & Lacy handles subrogation claims, visit our subrogation webpage.  

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Nate vs Chad: Entering the Ring

[Regular readers may recognize Nate Ogden as a frequent commenter and occasional guest-blogger here at InsureBlog. Well, it's our pleasure today to welcome Nate on board as a full-fledged Contributor. Nate's a Third Party Administrator in Northeast Ohio, and brings a very unique perspective to the whole insurance and risk-management business. In his debut post, Nate corrects the MSM on the subject of how self-funded plans are taxed. Welcome aboard, Nate! HGS]

Writing in the LA Times, Chad Terhune offers up his take on " a new type of self-insurance for small businesses with as few as 25 workers." While he does a better job than most media types (talk about a low bar), he still missed the mark. For one thing, this is not new at all. Some 15-20 years ago, there used to be a huge self-funded market for small groups. This is just a normal market cycle that repeats itself all the time. My family owns three TPAs(Third Party Administrators), we process the claims for self funded employers, and were based in Costa Mesa from 1980-2006. We had tons of 15 life, self-funded groups. There were carriers like Vasa Brougher that specialized in small group self funding.

For numerous reasons the market disappeared:

• Provider contracting favored the large carriers who did not rent their PPO networks. When you're self funded, you have to rent a PPO; generally, rental PPO's didn't have the deep discounts available to the "big boys." This was especially true in California until the Blues starting giving access to their PPOs 10 or so years ago.

• Poorly written COBRA laws made it extremely risky for small groups. Congress wrote the law, then left it up to the courts to interrupt the details. Large employers could afford a lawsuit while it put small employers out of business.

• The reinsurance market didn’t recognize the different needs of small employers compared to large ones, and thus the stop-loss policies didn’t provide all the protection small employers needed.

When we have these debates about health care reform and insurance it's important that the public be given accurate information. Small group self-funding is not some new concept just invented to circumvent State Regulation or PPACA reform. It has been around since the late 70's and early 80's. The failure of heavily regulated small group reform is just making it incredibly attractive right now. I would argue the reason you're seeing it more in California is that you have higher regulation there.

In most other States employers have been buying $5000+ deductible, fully insured plans, and then self-funding that deductible down. In California, most of the carriers worked hard to forbid this or to put enough restrictions on it to make it impossible.

Anyone arguing that self-funding only peels off the healthy risks has no idea what they are talking about. The vast majority of our business is groups that are moderately to very sick. Super healthy groups have premiums too low to make self-funding attractive. If everything works perfectly, they save a couple percent; if anything goes wrong, as it does on average once every five years, they pay considerably more. The groups flocking to self-funding are those that have been getting double digit rate increases year after year with no help from the carrier to fix the problem. Mr Terhune does mention getting claims data but doesn’t give it nearly as much discussion as it merits. Educating employees, often face to face, fighting with providers, finding waste and inefficiency is where the savings come from. Isn’t that what all groups should be looking to do?

Two more things: Mr Terhune is incorrect that self-funded groups don’t pay premium tax: they do, just on a smaller amount. This is one error the media always repeats and has for decades. Premium taxes apply to premiums (imagine that!), so the stop-loss premium is subject to them. For the most part, the claims paid by the employer are not subject to premium taxes (a handful of states have taxes based on claims).

Also, claiming that self-funded plans don’t contribute to the pools in PPACA is absolutely incorrect: self-funded plans have to pay the same per employee tax that fully insured plans do.

It sure would be nice to see the media care as much about accuracy as framing their message.

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Business Incentives to Help Conquer Sick Days

Many businesses large and small have now taken action to prevent their employees from going off unwell and eating into company margins whilst doing so.  Sick days are currently costing UK businesses and the economy £13 billion per year and more and more employers have been introducing incentives such as gym memberships, employee assistance programmes and personal medical insurance programmes to stem the amount of sick days being taken across the country.  We have put together a quick overview of what’s on offer with some employers and how they look to have a positive impact.

Many employers have, for a while now, have been offering private medical insurance as an incentive or a tool in which to manage their employee’s health.  There are many variations in which PMI is offered and lots of different levels of coverage ranging from those who have their own businesses who would opt for a self employed healthinsurance to grander schemes for larger companies such as group health insurance.  The idea behind these plans was to improve employee’s healthcare and have them back to work quicker as PMi’s  provide quicker, more efficient treatments and well as the flexibility to choose when treatments are undertaken.

An incentive lots of businesses are using is the provision of gym memberships at a discount rate and offering partnership schemes with gyms such as Pure Gym or Virgin Health clubs.  Many may even have the set up in their buildings to provide a work out area for those before and after work.  Employers see this as a wise investment because if their workforce is fitter then that can see off infections and colds that someone who is possibly less fit would be more susceptible to, thus less work days off.

What is becoming more and more common is the introduction of employee assistance programmes (EAP’s) where identifying staff who maybe suffering from work related issues such as stress or may have external pressures in their personal lives.   An EAP will provide help and advice 24 hours a day and can also involve face to face counselling to support an employee’s state of well being.  This can also be linked to limiting their exposure with the long term costs associated with stress and would incur extra premiums with a PMI supplier, income protection and critical illness. 

Related articles

• Health insurance as part of staff benefits - inducements required? (healthinsurancejournal.blogetery.com)
• Offering an Employee Assistance Program (frankcrum.wordpress.com)

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Unlucky 7

Lucky 7. 7 seas. 7 brides for 7 brothers. 7 hills of Rome. 7 hills of Constantinople. 7 Wonders of the World.

Throughout history 7 has been an almost magical number, even termed "lucky 7".

Maybe 7's luck just ran out.

Especially if your name is Barack Obama.

The folks at Heritage offer this recap and assessment of Obamacare.

In the 2 years since the passage of Obamacrap, there have been 7 failures directly tied to this law.

• The disappearance of child-only policies. Obamacare requires insurers who sell child-only plans to accept all applicants regardless of health condition. This allows parents to wait until their children are sick to enroll them in health plans. Two years later, one survey found that “17 states indicated that no insurers were selling child-only policies to new enrollees, and 39 states responded that at least one insurer exited the child-only market since the new law took effect.”
• “Free” preventive services cost Americans. Obamacare requires coverage of certain preventive services with no cost-sharing for the individual. Two years later, the list includes abortion-inducing drugs, sterilization, and other contraceptives as mandated coverage—even for many religious organizations. Heritage analysts report, “This created an outcry from members of many faiths who feel this decision is an attack on religious freedom and their ability to serve communities across the country.”

An addendum to the "no child health insurance left behind" comment, there are a few states (such as Georgia) where child only health insurance can be sold. The problem, the policies are not true major medical.

Parents can buy a child only health insurance plan in Georgia as long as they are willing to either buy a limited benefit basic health insurance plan, or a short term medical plan that is only good for 6 months.

Either of these options is fine as long as your child does not become seriously ill or has a major accident.

• A failing small business tax credit. Obamacare provides a temporary tax credit to small employers as an incentive for them to offer health insurance to their employees. Two years later, the IRS reports that only 7 percent of the originally estimated 4.4 million eligible small businesses have claimed the credit.
• A broke program for early retirees. Obamacare established a temporary reinsurance program from May 2010 to January 2014 to pay a portion of companies’ costs to insure early retirees between the ages of 55 and 65. Two years later, the program ran out of money almost three years early and is no longer accepting additional applications. As Heritage analysts explain, the program “clearly shifts the costs of paying for unsustainable promises made to public and private employees to federal taxpayers and further underscores how the true cost of implementing the health care law exceeds original estimates.”

These items get very little play in the media since they directly affect employers and only indirectly impact individuals and families. Still, this is just another example of what some may believe was good intentions gone awry.

Seems to me this is yet another case of government interference.

• Low enrollment in high-risk pools. Obamacare creates high-risk pools for individuals with pre-existing conditions who have been uninsured for at least six months to purchase insurance. Two years later, using the Administration’s own numbers, enrollment in the high-risk pools remains low: only 13 percent of initial estimates. Heritage analysts point out, “At the same time, medical-claims costs have been 2.5 times higher than initially projected, and the high-risk pools may still exhaust or exceed the available funding, even though they serve such a small portion of those they were intended to help.”
• A damaging medical loss ratio (MLR). Obamacare requires insurers to spend 80 percent (85 percent for large group plans) of premium revenue on medical claims or quality improvement. Two years later, Heritage analysts point out, “Seventeen states applied for the MLR waivers, arguing that the regulations would destabilize their markets.” The Administration has granted a full waiver to only one state; six received a partial waiver, and 10 requests were rejected. Some insurers have already left the market because of the requirement, and the strict medical loss ratio threatens the existence of health savings accounts, which are used by 11 million Americans.
• An unsustainable new entitlement. Obamacare created the CLASS Act, a government-run long-term care insurance program. Two years later, the Administration has declared the CLASS program unsustainable and halted its implementation. Heritage analysts report, “On February 1, 2012, the House of Representatives voted 267 (including 28 Democrats) to 159 to repeal the troubled CLASS program, and it now awaits consideration by the U.S. Senate.”

PCIP, the high risk pool substitute was actually a good idea. Had Obamacare created this plan and stopped there we would be much better off.

But Obama and company wanted something bigger. Something grand. Something regal.

The number 7 also has other associations.

The 7 dwarfs. 7 deadly sins.

Maybe Obamacare isn't such a BFD any more.

Perhaps 7 will now be known as an unlucky number.

At least if your name is Obama.

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