Archive for July, 2010

Employees Can Now Request a “Federal External Review” On Health Claims

Saturday, July 31st, 2010

New health care reform regulations clarify how health care plans must handle disputed claims. The law now mandates that employees in self-funded plans can request a “federal external review” after their request for coverage of a claim or benefit is denied through internal reviews conducted by employers and plan administrators.

Does this mean that after the normal course of claim appeals governed by ERISA, the insured can then request additional review/s through a government agency? And how long will this extend the contestation period? Two, three, four years down the road? How are stop loss carriers going to handle this additional risk? The current “short tail” could now be a long one.

Blue Cross Blue Shield of Texas Announces Broker Compensation Cut

Saturday, July 31st, 2010

Darrell Beckett, VP Texas Marketing and Sales sent out an announcement July 28 to the brokerage community announcing upcoming “reductions to our Individual Product distribution costs.”

“As you are aware, compliance with the Patient Protection and Affordable Care Act is bringing significant changes for Blue Cross and Blue Shield of Texas and others in our industry……………Impacting BCBSTX and our Agents is the PPACA provision that requires 80 percent medical loss ration as of January 1, 2011………………………….the significance of the new MLR provision will also require reductions in our Individual Product distribution costs.”

Agent commissions for individual health policies in Texas can run as high as 20-25% of premium.

Editor’s Note: This is just the beginning of reduced brokerage commissions for health insurance agents. Carriers in other states are already selling policies net of commission, but paying the broker a fee outside the insurance contract. We have seen one carrier set that fee at $37 per employee per month as broker compensation.

This trend mimics airlines who issue tickets with all kinds of add-on costs. For example, on a recent trip to Costa Rica we noticed that the add-on fees doubled the price of the ticket from Houston to San Jose.

Many group employers are questioning the value of their broker and are going direct to the carrier. Many employers are amazed and angered to learn how much their health insurance broker earns. Two recent examples include a 600 life employer group who discovered that their broker was earning over $250,000 but only showed up once a year at renewal time. Another group, a Texas school district, found their broker was earning well over $100,000 per year. When asked what he did for his client, he replied “I take them to lunch every time Im in town.”

We expect many health insurance brokers will find employment elsewhere in the coming months. Those that survive will become fee based insurance advisors specializing in all aspects of employment insurance.

Friday, July 30th, 2010
How Much Is Too Much:
 

Have Nonprofit Blue Cross Blue Shield Plans
Amassed Excessive Amounts of Surplus?
BCBS surplus report

Molly Mulebriar Investigates

Free Cell Phone For Medicaid Recipients

Thursday, July 29th, 2010

Are you currently on Medicaid?  If so, then you may be eligible for free cell phones for Medicaid recipients.  These free cell phones, like the Medicaid program, are meant for low income families and individuals who are unable to afford a cell phone.  Cell phones may not seem like something people would need.  However, almost everyone use a cell phone now.  The benefits of having a cell phone are also considerable.  The most obvious would be when there is an emergency.  Anytime you are in a situation where there is nobody around and you don’t have access to a landline phone, you can use your cell phone to call for help. 

Like with the Medicaid program, you have to get approved in order to get free cell phones for Medicaid recipients.  Your income is used to assess whether or not you get a free phone.  But since you are already receiving Medicaid, then you should have no problems signing up for the free cell phone program.  To sign up you need to go Safelink Wireless, which is the cell phone service provider.  Check with them whether your state offers free cell phones for people on Medicaid.  Currently, not all states do so.  Then you need to submit the application along with information on your income like your W2 or pay stub.  You can also submit documentation showing you are on Medicaid.

Another thing you should be aware of for free cell phones for people on Medicaid is that it’s not unlimited use for free.  You only get about one hour of free minutes each month.  That’s why it is very important you conserve your minutes for times of real need.  You won’t have enough to chat with your friends all the time.  Another thing is that you are only allowed one free cell phone per household.  So won’t be able to give every one of your family members a free phone.  At the end of your yearly contract, you have to resign and resubmit information showing that you can qualify for free cell phones.  If you don’t, then you can’t use the phones for free anymore.  However, you can keep the cell phone and aren’t obligated to return it.

Editor’s Note: Free government issue Colt 45’s may be next.

SPBA Email Alert – Fred Hunt

Thursday, July 29th, 2010
SPBA Email Alert – July 26, 2010Health Reform Insights 

Candid personal observations from SPBA President Fred Hunt

This e-mail is mainly a series of heads-up background on things you may hear in the news so that you will not be blind-sided, and so you will understand the context in order to be able to explain to others.

 >>  PUBLIC OPTION:  This was the main battleground of the health reform legislation, and seemed defeated, but a new bill has been introduced into the House to require a “robust” public option among the options in every state’s exchange.  Don’t panic.  The bill right now, with 128 sponsors, is just a stalking horse to put the idea on the table. There is virtually zero chance of it passing before Congress adjourns.  Lame Duck sessions are unpredictable, but still doubtful.  This bill is like when you plant bulbs in your garden.  The planter hopes it will come up next Spring….especially if the Congressional Budget Office (CBO)  comes up with some glowing estimate that it will save billions of dollars.

Reminder: CBO estimates can be easily rigged by the Congressmen requesting it.  The Congressmen set the assumptions.  So, for example, if CBO is told to assume that health costs will drop and no one will have expensive medical needs…the estimates will look phenomenal.  Then, next year, proponents of this would cloak the bill as a way to help solve the deficit.

 This proposal should not come as a surprise.  Not only is there a strong pool of single-payer sentiment in public opinion and political circles, but anyone watching the Massachusetts version of exchange as the model for the national health reform (described below) can see that there is a chance that there won’t be any private insurers to be in exchanges, and so public option could be the needed default.

 
Caution:  Don’t fall into the too-widely-believed fantasy that public option equates with cheap or free coverage with readily available services.  Deficit-conscious Congress will want something closer to self-supporting than Medicare & Medicaid have been (especially since the exchanges will not be for old or needy folks).  There is also the major serious issue I have discussed in the past that medical providers are going to be backing away from serving government-plan patients, because it is does not cover their costs of operation.  So, existence of even a “robust” public option does not spell the death sentence for private health employee benefit plans.

 The bigger risk to the willingness of employers to sponsor health plans will be out-of-control health costs (the same risk we’ve faced for 30 years).  Sky-high medical costs could some day change the cost/value balance between sponsoring a plan and paying a fine to government (although the rising costs will also hit the government plans, so that is not an easy escape.

 MASSACHUSETTS AS MODEL:  Health reform proponents proudly pointed to the Massachusetts health reform as the shining model of what national health reform will be.  Wow, that’s like comparing an upcoming cruise to the Titannic!  Things are going badly in just about every way in the MA model.   The State’s budget load for health costs have jumped from 16% of the state budget in 1990 to 22% in 2000, to 35% in 2010.  Similarly, the average cost for health coverage for a family of 4 in MA is $14,723, compared to a national average of $13,027, and costs are rising faster than nationally.  Many people are gaming the system by only signing up for coverage when they need it or opting for the fairly-low fine rather than pay for coverage.  So, the problem of uninsured has not been solved (as it similarly, will not be solved in the national health reform).

 As I have warned before, state financial solvency is a very weak link in the health reform and national economic chain.  Besides presumably following the MA example of fast-increasing draining of the state’s finances, health reform also adds about 1/3 more people in Medicaid, and a few years ago, SPBA & states were warning that even the previous drain of Medicaid was killing states economically.  So, state bankruptcy or much higher costs or cut-backs is a major risk for almost every state.

 As states brace for their own exchanges, here are the main worries on their mind:

(1).  Anti-selection against state exchanges, by people gaming the system by only signing up when they need expensive services and/or the state exchanges becoming the dumping ground for the sickest.

(2).  What will be the impacts of integrating with Medicaid, CHIP, etc.?

(3).  Prior to 2016 when separate systems need to be in place for individuals + small group, should the states start out with a merged system?

 If we look at the “model” of MA, another huge problem is showing itself.  The 5 major participating insurance companies have lost $116 million recently, and 3 of the 5 are under state supervision for financial solvency fears.  State policies of reviewing (veto or virtually setting) premium costs based on political expediency, not actuarial science is a key cause.  So, ask yourself, how can insurance companies survive in this kind of system, and if insurers don’t participate in exchanges, then what???

 For patients in MA, costs & waiting times have increased, and ER use has not declined.  In other words, the major supposed-achievements of health reform are getting worse, not better.

 So, what is MA thinking of doing in response?  MORE price-setting.  They want to extend price “review” to medical providers…and there are reports that they also plan to make accepting participation in the government plans a condition of being licensed.

 The proponents of health reform appear to be correct.  MA is probably an accurate model for where national health insurance will take us.

 ONGOING SKIRMISHES:  Almost every one of the hundreds of specific issues getting regulatory interpretation is also a battleground for special interests in that arena.  For example:

 >  MLR skirmishing has heated up.  Insurers were perceived as making progress in convincing NAIC (who is doing the drafting for HHS) to be a bit more lenient.  So, now Senator Rockefeller and others who consider insurers to be sneaky are applying more pressure to come up with a tight interpretation.  The outcome will do much to spell the future if insurers will stay in the US health insurance market.

>  Abortion is a running battle popping up in several issues.

YOU’LL HAVE 500 BOSSES:  Normally, the interpretation & implementation of new laws is done almost exclusively by the major agencies, such as IRS/Treasury, DOL & HHS.  However, health reform creates or empowers a reported 500 commissions, study-groups, etc., and much of the long & short term impacts & outcomes of health reform will be steered by them.

 INFORMATION SOURCES EVERYWHERE?

 >>  Now that the legislative process is over, there are starting to be briefings for both Democrat & Republican Congressional staffers.

>>  i-phone has a new app for health care reform.  It gives access to various health policy papers.  It is mainly designed for health policy-makers. It had 400 downloads in its first hour of availability, and became the 38th most popular app in the Apple Store .

>>  Insurance companies are coming up with their own informational websites, a combination of explanation and infomercial.

>>  There is also an unending offering of briefings & webinars from associations, law firms, consultants, etc.  On the one hand, that is good, but for your own protection, please keep two cautions in mind:  First of all many of the details have not been decided and some will take years to fully emerge from the agencies and the hundreds of commissions.  Second (and related to the first), many experts feel the need to give a complete story, so if there is a blank piece (something not yet decided) they make some logical assumption.  However, we have found over the years that logical assumptions are often not the final outcome, so the logical assumption leads to mistakes.  So, as much as you and the presenter would like to have a handy presentation with all the answers, it is risky.  This is why SPBA does not hesitate to tell you when there is no answer to your question, and why we get you at SPBA meetings & webinars hearing directly from the decision makers.  This warning is not to disrespect other presentations, my intent is merely a real-world caution we have seen people learn the hard way over the decades, and we get hundreds of calls from members who themselves or their clients heard some inaccurate “fact” from somewhere else.

 
OTHER NEWS BLIPS:

<<  HHS has created a new position for a chief privacy officer to help/oversee privacy policies of providers as they undergo major changes in EHR and other information handling.  The job will also probably be guidance and oversight for the rush of IT vendors to create the new systems for doctors & hospitals.

 <<  In the states which have the new federal high risk pools up and going, they have had 351 applications from 21 states, mostly FL & TX.  If those numbers seem low, remember that the prices in the government program set were either unaffordable for most of the people who would need it, and employers tended to get gun-shy the more they considered the bureaucracy factors.

 <<  Republicans were very angry about President Obama’s recess appointment of the new CMS director Berwick.  Many Democrats also felt it was a snub or slap to the Senate and the separation of powers.  So the White House is planning a new concept of submitting the name for nomination of the person already appointed.  It is not clear whether the White House felt the pressure, or will go through a charade to be able to say that Berwich got the advice & consent of the Senate (and not mention that the process was after the fact).

 <<  Treasury is getting strong pressure to ease PPACA rules for Flex.

 <<  On the new business-to-corporation1099 requirement, there are indications (not final decision) that IRS will consider payments made by credit card do not need to be included in the $600 tally triggering 1099 filing because the intermediary banks apparently report to IRS as part of their processing.  This is not final, but a positive sign. 

<<  Legal eagles will be amused that in the original defense against state constitutional challenges to health reform, the mantra was that it was allowed under the commerce clause of the constitution and was not a tax.  Recently, the mantra seems to be reversing.  Recent statements now say that it is not the commerce clause, but is merely a tax.  Go figure!

 <<  Big Bucks:  Legislation is long over, but payments for lobbying services continue to report, analyze, and try to influence health reform.  For example, federal lobbying reports show:

PhaRma (association of drug companies) spend $4,650,000 from April-June 2010 + $7,010,000 from January to March 2010.

AMA spent $6,360,000 from January-March.

Does money talk?  Interestingly, if you compare associations & businesses who paid the biggest bucks for lobbying & political payments, they have gotten the roughest treatment.  It is not just health issues.  BP was a mega donor to the politicians now damning them.

 Fred

Insurance Agent’s Sentencing Postponed Again

Wednesday, July 28th, 2010

Aaron Gonzalez, a former South Texas insurance agent, was to be sentenced for his crimes on July 23. His sentencing, however, was postponed again “until further notice.” The Wheels of Justice, it seems, turns ever so slowly.

One wonders why sentencing takes so long. Could it have to do with an on-going investigation assisted by cooperating witnesses?

“Half Guilty, Half Pregnant” Arnulfo Olivarez, another South Texas insurance agent, has had his sentencing postponed numerous times during the past two years. His next scheduled sentencing is August 22 in McAllen, Texas.

Published Friday, April 04, 2008 2:12 AM

Insurance agent accused of bribery

Associated Press

HARLINGEN — A Harlingen insurance agent is accused in a federal indictment of providing cash, plane tickets and condo rentals to some Edcouch-Elsa school district officials in exchange for public contracts.

Arnulfo Olivarez was named in a three-count federal indictment returned last month.

According to the indictment, the bribes were made to then-school board President Aaron Luiz Gonzalez and other district officials between 1999 and 2005 in exchange for votes on insurance contracts with the district.

Investigators said the kickbacks were valued at more than $26,000.

Olivarez, owner of Insurance Associates of the Valley, is one of three contractors indicted in connection with a similar scheme with the Pharr-San Juan-Alamo school board.

Federal prosecutors say Olivarez often used illegal means to get business for the insurance companies that employed him.

Gonzalez, who pleaded guilty to extortion charges in a similar case in June 2006, was not charged in the latest case under a plea deal with prosecutors, The Monitor in McAllen reported in its Friday editions.

Olivarez faces charges of conspiracy, bribery and mail fraud in the Edcouch-Elsa and PSJA cases and has pleaded not guilty in both. If convicted on all counts, he could face 20 years in prison and $250,000 in fines.

J.J. Ybarra, the current Edcouch-Elsa school board president, said the district now brokers its contracts directly with insurance companies.

“This activity is all from several years back,” he told the newspaper. “We had a lot of obstacles, but we just keep moving on.”

Strongest & Weakest Health Insurance Companies

Wednesday, July 28th, 2010

JUPITER, FL, Jul 22 (MARKET WIRE) —  The new Patient Protection and Affordable Care Act is expected to squeeze the profits and finances of the nation’s smaller health insurers, forcing many to withdraw from the market, be acquired, or fail. However, most of the nation’s largest insurers have the capital and efficiencies needed to handle the expanded coverage and buy out the smaller companies, according to a new study by Weiss Ratings, the nation’s only provider of independent insurance company ratings. “Sweeping changes mandated by health care reform, such as the removal of certain limits and mandated coverage for pre-existing conditions, will inevitably force health insurers to spend more on medical care,” commented Martin D. Weiss, president of Weiss Ratings. “Most large health insurers will be able to handle it. But we are concerned that weaker, less profitable insurers will be forced out of the market, reducing competition and ultimately leading to fewer choices and higher premiums for consumers.”

The Weiss Ratings study covers 585 of the nation’s health insurers, including 353 companies that already meet the mandated requirement going into effect next year to pay out at least 85% of their premium dollars in medical expenses.

Among the 585 companies, 95, or 16.2%, received a Weiss Rating of D+ (weak) or lower, putting them at risk of future financial difficulties caused by higher medical costs, a weaker economy or other pressures. In addition, another 186, or 31.8% of the industry, are rated C+, C or C- (fair), many of which could also have some difficulty absorbing the additional costs mandated by health care reform.

Weiss added: “Smaller insurers with less capital and fewer efficiencies of scale are more likely to suffer difficulties or even go out of business due to health care reform. Already, even before any additional expenses mandated by health care reform, 174 health insurers reported losses last year. In contrast, the largest, most efficient insurers with abundant capital and solid profits are not only in a position to absorb the higher expenses mandated by reform but could also expand their market share by buying up the weaker companies.” 

Among the nation’s 16 largest health insurers, controlling 45.7% of the industry’s assets, the nation’s largest health insurer, Kaiser Foundation Health Plan Inc. with $37.8 billion in assets merited a Weiss rating of A- (excellent), while the second largest, Health Care Service Corp., with $11.4 billion in assets, was rated A+. Also receiving excellent grades were Blue Cross Blue Shield of NC (A+), Blue Cross Blue Shield of SC (A-), Blue Cross of California (A+), California Physicians’ Service (A), Community Insurance Co (A-) plus two New York companies — Empire HealthChoice Assurance (A-) and Excellus Health Plan (A+). None of the 16 largest were in the weak (D+ or lower) or fair (C, C+, C-) category. 

To help consumers avoid the weakest health insurers and find the strongest licensed to do business in their state, Weiss Ratings has released its lists of the 118 strongest and 100 weakest health insurance companies. Consumers can immediately receive both lists at no charge by providing their email address at www.weissratings.com/healthlists

attachments_2010_07_28

Oklahoma Insurance Tax Unconstitutional?

Wednesday, July 28th, 2010

 

Extract from Aetna’s Health Reform Weekly (Week of 7/26/10) Following is an update to the status of OK HB 2437-

 OKLAHOMA: Insurance Commissioner Kim Holland filed a petition with the Oklahoma Supreme Court last week seeking to prevent the application of a new tax on health plans enacted earlier this year. The petition challenges the new law’s constitutionality. The legislation creates the Health Carrier Access Payment Revolving Fund and imposes a tax of 1 percent on all paid claims for individual and employment-based health plans, to be collected by the Insurance Department beginning August 27. The Oklahoma Health Care Authority will disperse an estimated $240 million in additional funds to pay for the state’s Medicaid program. The petition argues that the state constitution requires that any revenue measures must pass at least three-quarters of the legislature or be submitted to a vote of the people. The new health plan tax did not. Additionally, the petition argues that the bill violates the state law that prohibits the passage of any revenue bill within five days of adjournment. Commissioner Holland also questioned the transparency and accountability of the legislation as well as the state’s authority to tax self-insured plans that are fully funded by employers and subject to federal ERISA law. Other large self-funded plan entities are expected to join her lawsuit and challenge the law on ERISA grounds as well. Aetna will be closely monitoring the litigation going forward.

Tuesday, July 20th, 2010
Tue, July 20, 2010 4:30:17 PM
Humana Dental ASO Plans – special pricing options for California
From:
Humana Dental <humana@humana-email2.com>  

Add to Contacts

To: riskmanager@sbcglobal.net  

When you partner with Humana as your plan administrator, you’ll work with a company that has more than 30 years of dental benefits experience. With Humana, you’ll get:
• A recognized service leader
• One of the largest dental PPO networks
• More than 130,000 dentist locations nationwide
• Significant in-network discounts
Plus, you’ll have direct influence in the design and benefit offerings of your dental plan.
We now offer our California brokers a premier ASO dental
plan that includes:
Savings — Your employees will benefit from our network discounts, which average 34 percent in California. Service guarantees — Humana often agrees to service standards. We’ll place a portion of the administrative fees at risk.
Network strength — Our dental PPO network is one of the largest in California, with more than 27,000 dentist locations. Nearly 99 percent of dentists who join our network stay in our network. Friendly, personal service — You and your employees can expect friendly, prompt, and accurate answers to your questions. We also can assist non-English-speaking members.
Provider recruitment — We commit to a unique recruiting campaign targeting the dentists your employees use. We encourage our members to nominate dentists through our dental referral card that can be used during open enrollment, our website, or toll-free number. Education — Your employees have access to information on the importance of regular dental care They can go to MyDentalIQ.com and take a free dental health assessment. They also can visit Humana.com to read BrushUp, an online publication that provides tips on how to maintain good dental health.
Claims processing — We audit and pay most dental claims in 14 days with 99.8 percent accuracy. We also provide detailed reports of claim payments.    
         
 
Editor’s Note: You will begin to see carriers re-positioning their offerings to self-funded platforms. Fully insured business offerings for health insurance will evaporate with MLC requirements to kick in in 2011.

TPA Refuses to Disclose Underwriter Notes (Continued)

Tuesday, July 20th, 2010

Molly Mulebriar reports that further investigation indicates that the TPA owns the brokerage for which the group’s insurance agent works for.

“Bill, found documentation that the TPA incorporated XXXXXX Insurance Agency in June 2001. M M works for the agency and is the group’s insurance agent. So what you have here is a TPA that owns the insurance agency that placed the business, and also has a profit/loss marketing agreement with the stop loss carrier which currently insures the group. A definite conflict of interest.”

“I called the three MGU’s that the SEC 10k report shows are the carrier’s agents, and none show record of insuring the group. I then called the carrier direct and left a message. I am awaiting their return phone call. At this point, I am not asserting that there is no stop loss in place, and I certainly hope that is not the case. I will get down to the bottom of this and report back to you by week end.”

“Thanks for the check – I need a new dress and this will help.”

BELOW IS THE ORIGINAL POST

We recently aquired a new client in Texas that is self-funded. Our task is to evaluate the current plan and make recommendations.

The current TPA is Texas based, but relatively unknown. The stop loss contract in force is between the employer and the carrier but was brokered by the TPA several years ago.

In reviewing the existing program, we asked for the carrier’s underwriter notes from the TPA. The TPA refused to release the underwriter notes, as well as refused to disclose the name and telephone number of the underwriter handling this case. We found this suspicious and unprecedented. Certainly, the employer has a right to this information. The TPA was, after all, not a party to the stop loss contract. They simply acted as an insurance broker in placing the cover.

Usually, when a TPA, carrier or insurance agent refuses to give you information proprietary to you, then you are probably paying too much. At least that has been our experience gleaned over the past 35 years in the business.

So, we wondered, what was the TPA hiding?

We compared the Stop Loss Contract rates to the rates being billed by the TPA on behalf of the stop loss carrier. They did not match. We reviewed the loss runs produced by the TPA and noticed that the contract type on the worksheets indicated, in tiny print, that the specific contract was an aggregating specific. So we went back to the actual Stop Loss Contract and noticed that under Options, the box next to the Aggregating Specific Option was not marked, but next to it in the margin it was, or so it seemed.  Then, we discovered that on the past four renewals, the Stop Loss Contract was renewed on a 12/12 basis each year. That is unusual and could put the employer at risk every renewal (but save the stop loss carrier added exposure therefore better chance for profits).

So, we employed Molly Mulebriar, investigative reporterette, to check into this. Her initial report is below:

“Bill, did some quick checking this morning over a bloody mary at Star Bucks. I checked the Security & Exchange Commission (SEC) 10k report for XXXXXXXX XXXXXXXXX XXXXXXX (name of stop loss carrier) through 12/31/2009 and found that there is a marketing agreement between them and XXXXXXXXX XXXXXX XXXXXX (TPA) that expires 12/31/2014. Among other things, in exchange for $2.5 million the carrier shares underwriting profits and losses with the TPA of 35%, with bonus compensation payable annually based on a formula of profit/loss ratio of the entire block of business generated by the TPA.”

“I also found out that in 2007 the TPA got into a tift with a mutual insurance company, a nasty lawsuit was filed, and the carrier pulled all their business from the TPA and sued for repayment of a promissory note totaling about $4 million. So it seems, according to the SEC 10 k report referenced above, that the TPA moved their block of businss to the new carrier and negotiated a profit and loss sharing arrangement to “sweeten the offer.”

“I also found that about the same year, the Texas Department of Insurance issued a Commissioners Order against the TPA including a fine of over $150,000. Seems there was some sort of scheme in play to stiff the Texas Risk Pool to the tune of over $12 million by siphoning off poor risks within an employer group to the small group fully insured market.”

“This is amazing stuff. Will continue to investigate. When are you going to pay me for my time and efforts on this?”

Editor’s Note: We hesitated to put this story on our blog since there is definitly more to learn here. But to molify Molly, we felt the urgency of reporting this to our three regular readers. More to follow, with actual name of the TPA and a copy of the Commissioners Orders to be posted. Regarding Mulebriar’s quest for compensation – she is on a retainer, rather sizable. We have to continuously remind her of that.

Monday, July 19th, 2010
Mon, July 19, 2010 12:00:37 PM

Health Care Reform update — dependent age extension for dental and vision
 
     

View this email in your favorite browser

Guardian - We take your business personally
     
  Giving your clients greater control over benefit decisions Guardian’s Approach to Dental & Vision Dependent Age Extension

As previously communicated in our Legislative Update, and recently confirmed by the Department of Health and Human Services, dental and vision coverages are exempt from the near-term provisions of the Patient Protection and Affordable Care Act (PPACA), including the requirement to offer coverage to dependents up to age 26.

However, the extension of dependent medical coverage to age 26, as well as its impact on non-medical coverages, is generating a lot of discussion in the marketplace.

Covering more dependents for an extended period of time will ultimately increase the claims paid under the plan, and that added claims expense will eventually be passed on to the planholder, whether the plan is fully insured or self-funded.

Many employers have expressed concern over these increased costs. In fact, three recent surveys from Mercer, Hewitt Associates and the International Foundation of Employee Benefit Plans found that at least two-thirds of employers will delay extending the age limit on their medical plans as long as possible (ie. the first renewal after 9/23/10).

Click here to see how Guardian is addressing this concern.

For Broker/Agent Use Only.
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Guardian
2010-6086
 
     

Upcoming Funeral for PPO’s Announced

Sunday, July 18th, 2010

Health Care Reform will end PPO’s as we know them today. Effective January 1, 2012, “Insurers must submit annual reports to Secretary on disease management, care coordination, hospital readmission rates, patient safety and provider rate reimbursement structures.”

Provider rate reimbursement structures, or fees, will become part of the public domain and no longer hidden in secretive PPO contracts.

The secret world of PPO provider contracts will be no more.

Sometimes change is good. This is good.

Less is Better

Sunday, July 18th, 2010

It started three years ago with employers beginning to realize the fallacy of PPO network discount “savings” and finally doing something about it. Bill Miller BBQ, a San Antonio based restuarant chain, was the first employer in Texas take the initiative which started the Cost-Plus revolution (Bill Miller Forbes).

Relying on less providers to provide health care makes sense for both the consumer and the provider. It has certainly worked well for Bill Miller BBQ and over 45 other employer groups in Texas that have followed their lead.

Providers get paid a fair and reasonable fee, quickly and hassel free while consumers enjoy significant savings. And, the situation gets even better with improved benefits to the employees, and less Accounts Receivable problems for the providers.

With the savings realized, calendar year deductibles can be removed, hard to track out-of-pocket expenses are eliminated, replaced with a co-pay system in place for all benefits, including hospital admissions. Patients know up front what their cost will be, and providers know up front what their reimbursement will be too. No secretive PPO contracts to worry about – total transparency.

 Now that Health Care Reform has passed, carriers are scrambling to make sense of the bill, and devise strategies to survive competitively in the upcoming months and years. Carriers are beginning to realize that “Less is Better” too, as outlined in a recent article (http://www.nytimes.com/2010/07/18/business/18choice.html).

In an earlier posting, we noted that there will be tremendous opportunities for those of us in the insurance industry that have the ability to think out of the box and seize upon events as they unfold in the marketplace. We promised to post a piece on “Opportunities Before Us that Will Make Us Millionaires” in total, however with things moving so rapidly these days, we decided to provide this posting as a hint of future postings to be made here for the benefit of our four readers (yes, we added one new reader over the weekend – thank you Dino).

TPA Refuses to Disclose Stop Loss Carrier’s Underwriter Notes

Saturday, July 17th, 2010

We recently aquired a new client in Texas that is self-funded. Our task is to evaluate the current plan and make recommendations.

The current TPA is Texas based, but relatively unknown. The stop loss contract in force is between the employer and the carrier but was brokered by the TPA several years ago.

In reviewing the existing program, we asked for the carrier’s underwriter notes from the TPA. The TPA refused to release the underwriter notes, as well as refused to disclose the name and telephone number of the underwriter handling this case. We found this suspicious and unprecedented. Certainly, the employer has a right to this information. The TPA was, after all, not a party to the stop loss contract. They simply acted as an insurance broker in placing the cover.

Usually, when a TPA, carrier or insurance agent refuses to give you information proprietary to you, then you are probably paying too much. At least that has been our experience gleaned over the past 35 years in the business.

So, we wondered, what was the TPA hiding?

We compared the Stop Loss Contract rates to the rates being billed by the TPA on behalf of the stop loss carrier. They did not match. We reviewed the loss runs produced by the TPA and noticed that the contract type on the worksheets indicated, in tiny print, that the specific contract was an aggregating specific. So we went back to the actual Stop Loss Contract and noticed that under Options, the box next to the Aggregating Specific Option was not marked, but next to it in the margin it was, or so it seemed.  Then, we discovered that on the past four renewals, the Stop Loss Contract was renewed on a 12/12 basis each year. That is unusual and could put the employer at risk every renewal (but save the stop loss carrier added exposure therefore better chance for profits).

So, we employed Molly Mulebriar, investigative reporterette, to check into this. Her initial report is below:

“Bill, did some quick checking this morning over a bloody mary at Star Bucks. I checked the Security & Exchange Commission (SEC) 10k report for XXXXXXXX XXXXXXXXX XXXXXXX (name of stop loss carrier) through 12/31/2009 and found that there is a marketing agreement between them and XXXXXXXXX XXXXXX XXXXXX (TPA) that expires 12/31/2014. Among other things, in exchange for $2.5 million the carrier shares underwriting profits and losses with the TPA of 35%, with bonus compensation payable annually based on a formula of profit/loss ratio of the entire block of business generated by the TPA.”

“I also found out that in 2007 the TPA got into a tift with a mutual insurance company, a nasty lawsuit was filed, and the carrier pulled all their business from the TPA and sued for repayment of a promissory note totaling about $4 million. So it seems, according to the SEC 10 k report referenced above, that the TPA moved their block of businss to the new carrier and negotiated a profit and loss sharing arrangement to “sweeten the offer.”

“I also found that about the same year, the Texas Department of Insurance issued a Commissioners Order against the TPA including a fine of over $150,000. Seems there was some sort of scheme in play to stiff the Texas Risk Pool to the tune of over $12 million by siphoning off poor risks within an employer group to the small group fully insured market.”

“This is amazing stuff. Will continue to investigate. When are you going to pay me for my time and efforts on this?”

Editor’s Note: We hesitated to put this story on our blog since there is definitly more to learn here. But to molify Molly, we felt the urgency of reporting this to our three regular readers. More to follow, with actual name of the TPA and a copy of the Commissioners Orders to be posted. Regarding Mulebriar’s quest for compensation – she is on a retainer, rather sizable. We have to continuously remind her of that.

Major Carrier Gearing Up for Change – Others to Follow

Wednesday, July 14th, 2010

A major health insurance carrier operating in Texas has made a corporate decision to expand their self-funded business and is preparing to exit the fully-insured market within the next 18 months. Final decison to exit the fully-insured market will be made once final regulations are issued on the 80-85% minimum loss ratio requirement due to take effect on all renewals after January 1, 2011.

In our opinion, we will see unprecedented growth in self-funded plans due to Health Care Reform. Carriers and third party administrators will compete for record keeping positions with employer groups.

Stop loss carriers will reap a bonanza in new sales opportunities. More will enter the market than leave. Rate competition will create a soft market initially.

In a future posting, we will provide our definitive predictions of the direction of health care delivery in the near term, as well as outline new and lucrative business opportunities available to those with the ability to think out of the box with tempered risk tolerance to be assumed as a key element of success.

Wednesday, July 14th, 2010
Wed, July 14, 2010 11:38:31 AM
New Tax Credit Estimator Tool, Cost-Savings Self-funded Plan Introduced
 
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July 14, 2010 – Health Care Reform, New Self-funded Plan

 

 

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Business Opportunity for Soon to Be Extinct Health Insurance Brokers?

Friday, July 9th, 2010

Doctors Express Urgent Care Franchise

Doctors Express franchisees across the country are capitalizing on increasing demand for quick and convenient medical care with our turnkey urgent care franchise model.

Business Type: Franchise
Startup Costs: $450,000 – $600,000
Can be run part-time: Yes
 
Doctors Express Urgent Care Franchise Opportunity

Are you a savvy, entrepreneurial individual looking to get into the rapidly growing, recession-resistant healthcare industry? Doctors Express is the first nationally branded urgent care center model.

This exceptional business opportunity allows franchisees to bring high-quality, quick and convenient medical care to their communities. Founded by an emergency physician and a team with extensive franchise and business experience, Doctors Express urgent care centers are quickly becoming synonymous with easily accessible, high tech and high touch care.  

When a patient visits a Doctors Express urgent care center, no appointment is necessary, wait time is on average 15 to 20 minutes, care is affordable, most insurances are accepted, and there are many services under one roof.  Unlike a typical retail clinic, Doctors Express can handle higher level acuity medical issues for both adults and children. Rather than waiting in an emergency room for hours to be seen for a cough, cold, break, sprain, rash or cut, patients are choosing urgent care.

Patients prefer Doctors Express because:

  • Every patient is seen by a trained and certified physician
  • On-site lab services allow for rapid diagnosis
  • X-ray capabilities are always available, including on-site x-ray tech  
  • Most prescriptions can be purchased directly from our in-house pharmacy
  • We’re open 7 days a week, including extended evening hours

Both experienced entrepreneurs and seasoned medical professionals are joining the Doctors Express team because of our turnkey franchise program in this high-growth, recession-resistant industry. Doctors Express franchisees can take advantage of multiple revenue streams in addition to urgent care- including providing physicals, drug testing and occupational medicine services to local employers, offering travel medicine and vaccines in-center, and partnering with nearby physicians for after-hours care and pre-op physicals.  

As a franchisee, you will benefit from a comprehensive support system designed to assist with all aspects of opening and operating your Doctors Express center. From site selection and center design assistance, robust marketing programs for consumers and businesses, advanced back-end systems and exclusive software programs for charting and billing, and extensive training and operations support, you will be well-positioned for success!

The initial investment ranges from $450,000- $600,000 per unit. Single- and multi-unit opportunities significant discount for purchase of multiple territories) are available in highly desirable areas across the country.  Third party financing is available. If you are an entrepreneurial individual or physician interested in joining the first nationally branded urgent care center and bringing quality, convenient care to your local area, please complete the form to the right. A representative from the Doctors Express development team will be in touch soon. Thank you for your interest in Doctors Express Urgent Care franchise opportunities.

Telemedicine – Future Growth Potential for Medical Providers?

Friday, July 9th, 2010

High-speed broadband can help doctors and hospitals deliver state-of-the-art care, particularly to the underserved communities most in need.

Last week, the FCC announced a joint meeting with the FDA to discuss how to implement the Broadband Plan’s recommendation to get innovative wireless medical devices to consumers as quickly and safely as possible.

As exciting as this is, it is just a hint at the possibilities that broadband innovation holds for health care in America.  For example, telemedicine is a promising field that can help rural communities stay safe and healthy.

Neil in Abilene, Texas

Citizens of rural Texas communities have very little, if any, access to professional medical care. Telemedicine brings critically needed medical care to rural communities; however, without broadband services Telemedicine is physically impossible.

Medical providers are willing to see patients over a Telemedicine system, the technology exists to make Telemedicine a reality, and patients are willing to see providers via Telemedicine. Until a broadband system is in place to provide the needed bandwidth Telemedicine will never reach the citizens that truly need the services. Rural Texas needs the bandwidth to make Telemedicine a reality for these small communities that otherwise may not have a hospital, doctor, clinic, or other healthcare provider.

Access to health care and information is an issue for many providers as well.  Without broadband, health care professionals can be stifled in their work and professional development.

Humana Offers Up to $25,000 Bonus for New Sales

Friday, July 9th, 2010

New small business bonus when you sell medical and specialty benefits products

You can earn up to a $25,000 bonus for placing small group Humana medical and specialty plans with effective dates of coverage between July 1, 2010 and Jan. 31, 2011. Bonus applies to groups with 2-99 eligible employees. Here’s how to qualify:

Humana medical products:

  • $20,000 for placing 20 or more cases
  • $10,000 for placing 10 cases
  • $3,000 for placing 5 cases

Humana specialty benefits:

  • $5,000 for placing 40 or more lines of coverage
  • $3,000 for placing 30 lines of coverage
  • $2,000 for placing 20 lines of coverage

Plus, the Underwriting Days bonus for medical cases has increased.

View bonus details (PDF)

Contact your Humana sales executive for details.

Bonus Rules and Regulations
Humana believes that agents should fully disclose to the insured or applicant the programs under which they are compensated including base commissions, bonuses, incentives or other forms of remuneration for which the agent is eligible for the sale or renewal of insurance products. Humana determines each cases effective date of coverage and eligibility for this promotion. Bonuses will be charged back for qualifying coverages that terminate before their first anniversary. The transfer of an in-force Humana coverage or placement of a renewal does not qualify for the agent for payment under this promotion. An agent of record may earn up to one bonus payment under this promotion. The number of cases and coverages placed during this promotion is measured according to agent of record listed on the employer group application, and production across agents of record will not be combined for the purposes of this promotion. Individual products are excluded from this promotion, except for those issued as part of a Workplace Voluntary Benefit offering. Cases split into subgroups to segment business units or locations are combined as one case to determine eligibility for this promotion. In cases where commissions are split between two or more producers, the case count is prorated according to the commission split percentages. All of the provisions of the Group Producing Agent or Agency Contract and Producer Partnership Plan apply to this bonus promotion. Humana may modify or terminate this promotion at any time without notice. Humana is the final arbiter of any issues related to this promotion. Bonus will be paid by the end of April, 2011.

 

Garcia’s Pharmacy Advertisement Lures Americans

Friday, July 9th, 2010

. .

Thursday, July 8th, 2010

Wednesday, July 7, 2010                                                                                                                    THE WALL STREET JOURNAL

 

 

The Massachusetts Health-Care ‘Train Wreck’

The future of ObamaCare is unfolding here: runaway spending, price controls, even limits on care and medical licensing.

 

By JOSEPH RAGO

 

President Obama said earlier this year that the health-care bill that Congress passed three months ago is “essentially identical” to the Massachusetts universal coverage plan that then-Gov. Mitt Romney signed into law in 2006. No one but Mr. Romney disagrees.

As events are now unfolding, the Massachusetts plan couldn’t be a more damning indictment of ObamaCare. The state’s universal health-care prototype is growing more dysfunctional by the day, which is the inevitable result of a health system dominated by politics.

In the first good news in months, a state appeals board has reversed some of the price controls on the insurance industry that Gov. Deval Patrick imposed earlier this year. Late last month, the panel ruled that the action had no legal basis and ignored “economic realties.”

In April, Mr. Patrick’s insurance commissioner had rejected 235 of 274 premium increases state insurers had submitted for approval for individuals and small businesses. The carriers said these increases were necessary to cover their expected claims over the coming year, as underlying state health costs continue to rise at 8% annually. By inventing an arbitrary rate cap, the administration was in effect ordering the carriers to sell their products at a loss.

Mr. Patrick has promised to appeal the panel’s decision and find some other reason to cap rates. Yet a raft of internal documents recently leaked to the press shows this squeeze play was opposed even within his own administration.

In an April message to his staff, Robert Dynan, a career insurance commissioner responsible for ensuring the solvency of state carriers, wrote that his superiors “implemented artificial price caps on HMO rates. The rates, by design, have no actuarial support. This action was taken against my objections and without including me in the conversation.”

{{

Mitt Romney signs health-care reform into law as Ted Kennedy (third from right) looks on, April 2006.

Mr. Dynan added that “The current course . . . has the potential for catastrophic consequences including irreversible damage to our non-profit health care system” and that “there most likely will be a train wreck (or perhaps several train wrecks).”

Sure enough, the five major state insurers have so far collectively lost $116 million due to the rate cap. Three of them are now under administrative oversight because of concerns about their financial viability. Perhaps Mr. Patrick felt he could be so reckless because health-care demagoguery is the strategy for his fall re-election bid against a former insurance CEO.

The deeper problem is that price controls seem to be the only way the political class can salvage a program that was supposed to reduce spending and manifestly has not. Massachusetts now has the highest average premiums in the nation.

In a new paper, Stanford economists John Cogan and Dan Kessler and Glenn Hubbard of Columbia find that the Massachusetts plan increased private employer-sponsored premiums by about 6%. Another study released last week by the state found that the number of people gaming the “individual mandate”—buying insurance only when they are about to incur major medical costs, then dumping coverage—has quadrupled since 2006. State regulators estimate that this amounts to a de facto 1% tax on insurance premiums for everyone else in the individual market and recommend a limited enrollment period to discourage such abuses. (This will be illegal under ObamaCare.)

Liberals write off such consequences as unimportant under the revisionist history that the plan was never meant to reduce costs but only to cover the uninsured. Yet Mr. Romney wrote in these pages shortly after his plan became law that every resident “will soon have affordable health insurance and the costs of health care will be reduced.”

One junior senator from Illinois agreed. In a February 2006 interview on NBC, Mr. Obama praised the “bold initiative” in Massachusetts, arguing that it would “reduce costs and expand coverage.” A Romney spokesman said at the time that “It’s gratifying that national figures from both sides of the aisle recognize the potential of this plan to transform our health-care system.”

An entitlement sold as a way to reduce costs was bound to fundamentally change the system. The larger question—for Massachusetts, and now for the nation—is whether that was really the plan all along.

“If you’re going to do health-care cost containment, it has to be stealth,” said Jon Kingsdale, speaking at a conference sponsored by the New Republic magazine last October. “It has to be unsuspected by any of the key players to actually have an effect.” Mr. Kingsdale is the former director of the Massachusetts “connector,” the beta version of ObamaCare’s insurance “exchanges,” and is now widely expected to serve as an ObamaCare regulator.

He went on to explain that universal coverage was “fundamentally a political strategy question”—a way of finding a “significant systematic way of pushing back on the health-care system and saying, ‘No, you have to do with less.’ And that’s the challenge, how to do it. It’s like we’re waiting for a chain reaction but there’s no catalyst, there’s nothing to start it.”

In other words, health reform was a classic bait and switch: Sell a virtually unrepealable entitlement on utterly unrealistic premises and then the political class will eventually be forced to control spending. The likes of Mr. Kingsdale would say cost control is only a matter of technocratic judgement, but the raw dirigisme of Mr. Patrick’s price controls is a better indicator of what happens when health care is in the custody of elected officials rather than a market.

Naturally, Mr. Patrick wants to export the rate review beyond the insurers to hospitals, physician groups and specialty providers—presumably to set medical prices as well as insurance prices. Last month, his administration also announced it would use the existing state “determination of need” process to restrict the diffusion of expensive medical technologies like MRI machines and linear accelerator radiation therapy.

Meanwhile, Richard Moore, a state senator from Uxbridge and an architect of the 2006 plan, has introduced a new bill that will make physician participation in government health programs a condition of medical licensure. This would essentially convert all Massachusetts doctors into public employees.

All of this is merely a prelude to far more aggressive restructuring of the state’s health-care markets—and a preview of what awaits the rest of the country.

Mr. Rago is a senior editorial writer at the Journal.

Protected: How to Make $1 Million a Year Selling Health Insurance

Thursday, July 8th, 2010

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Who Really Pays the Tax?

Thursday, July 8th, 2010

With ObamaCare taking full effect in 2014, employers who dont provide health insurance will be subject to an 8% payroll tax. Who will really pay that?

Suppose annual company payroll is $1 million. An 8% punishment tax comes out to $80,000. If the employer reduces payroll by 7.5% (sorry, times are tough and I just had no choice. If you dont like it, go find another job), he saves $75,000 and his punishment tax is $74,000. 

Employees benefit by reduced taxes too – a win win situation it seems.

So Uncle Sam gets $74,000. Employer makes $1,000. Employees get screwed but pay less taxes.

This is really nothing new – employees have been funding 100% of Social Security and Medicare all along. And, they have been funding 100% of employer sponsored health care too.

This makes perfect economic sense doesnt it?

Thursday, July 8th, 2010
  Sponsers

Wednesday, July 21, 2010   Add to CalendarAdd to Calendar
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Join us for a special live Webinar on how to set the stage for success with health insurance, sponsored by Insurance Journal and Channel Harvest.

What’s the upside of national healthcare reform? Find out! This unprecedented opportunity for property/casualty broker and agency principals, producers and account reps will focus on the strategic issues firms should consider from the outset and over the 2010-2014 period when exploring business opportunities in the new health insurance era. This is a must-attend event for those looking to increase their business.

The new law–and the regulations still being written–will create opportunities for independent agencies who position themselves to take advantage of them. Agents who participate in this unique Webinar will be able to “make it happen”—while others are wondering “what happened”?

This Live 90-minute Session Will Address Emerging Health Insurance Issues:

  • Most likely directions Congress and regulatory agencies will influence the implementation of health insurance reform.
  • The new role of independent agents in the purchase of health insurance.
  • Positioning an agency as a go-to life/health/benefits provider and multi-line source.
  • Using the new health insurance reform as a strategic opportunity to deepen relationships with personal and commercial lines customers, and grow cross-sale revenue.
  • Likely changes in broker compensation and agency value, including a look ahead at how Medical Loss Ratios (MLRs) can affect your revenue opportunity.
  • What we can learn from the Massachusetts and Utah experiences.

This is not just another training session that regurgitates information found on the Internet. This is a rare opportunity to learn directly from those involved in influencing the new government requirements, and those who have already dealt successfully with similar state-level efforts! Your Webinar registration includes these added benefits:

  • Conference attendance for you and your entire team.
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If you have any registration questions, you can call our Registration Desk (866) 872-5840 (international callers, please call 972-588-8036) or email: webinar@channelharvest.com.

For one low price—when you register by July 12, you and your entire staff (in one location) can participate in this exclusive Channel Harvest audio conference without ever having to leave your office. You’ll come away with first-hand, actionable information.

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It’s a seminar that you can view and listen to online. No need to dial in on the telephone! You’ll also have the opportunity to submit your questions online through our chat feature. To participate in this event, simply follow the instructions that will be emailed to you. Now you can train your team for one low price per dial-in site! Additional online connections and/or phone lines require additional registrations.

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Thursday, July 8th, 2010

The inevitable future of the health care system

Stephen Cecchetti
7 July 2007
Print   Email
Comment   Republish
Technology will force private health insurance to disappear; social pressure to provide equal access to care will remain. The inevitable result will be that health care systems everywhere will provide universal coverage and be publicly run.


Economists believe in markets. Market-determined prices allocate scarce resources efficiently, encouraging individuals to put them to their best possible uses. This improves everyone’s welfare. But there are times when private markets break down, and insurance is one of them.  When markets fail, the government inevitably has to step in and provide insurance.  That’s the case with deposit insurance as well as with insurance against the devastation from natural disasters.  The future is one in which health care will fall into this same category.  Even in countries like the United States, the government, not the market, will ultimately control the level and cost of the medical care we will receive.<!–[if !supportFootnotes]–>[1]<!–[endif]–>

A single-payer, publicly run, health-care system is the inevitable consequence of the nearly continuous scientific revolution in molecular genetics that began a half century ago.  One day it is James Watson, one of the discoverers of the structure of DNA, being handed the complete genetic code inside his own cells.  The next day, researchers tie yet another chronic disease to the presence of specific patterns on individual chromosomes.  And then, a few days after that, we learn that scientists are learning to make stem cells from skin cells.

The time is fast approaching when we will have an inexpensive test that is capable of revealing a person’s genetic propensity to contract a broad array of chronic diseases.  That means that we will be able to accurately assess the cost of medical treatment over their lifetime.

I grant that there are a number of things about my medical future that I would rather not know. For example, I am not anxious to learn about my genetic predisposition to develop Alzheimer’s disease or my propensity to contract heart disease or type 2 diabetes.

While I may shy away from knowing the details, I am interested in the medical equivalent of my credit score – call this my “health score.”  Without revealing the specifics of any future diseases I am likely to contract, a health score will summarise my overall health-care risks.  And, each year, with new information on my weight, blood-pressure, and the like, my score will be refined.

The fact that we will all have health scores has profound implication for insurance; or, more accurately, for the failure of market-based insurance.<!–[if !supportFootnotes]–>[2]<!–[endif]–>  If I have the information revealing that I am likely to be healthy, living a long and low-medical-care-cost life, this knowledge alone will create adverse selection, causing me to forgo insurance for everything except treatments arising from accidents, which can never be forecasted.

To understand the problem, think about a simple case in which there are only two kinds of people, those with high and low expected future medical-care-costs lives. Imagine that the insurance company can’t distinguish the two types, so it charges all comers the average cost across the entire population.  For the healthy people, the cost of the insurance will look very high, so they won’t buy it.  That means that the only people who will buy the insurance are the unhealthy.  Realising this, the insurance company will have to raise their price further to compensate for the fact that only the high cost people are willing to buy insurance.  This is the classic “lemons” problem that causes markets to fail and was first described by George Akerlof.<!–[if !supportFootnotes]–>[3]

Alternatively, if my insurance company can obtain my health score, then, in the same way that lenders use my credit score to calibrate the interest rate they offer on a loan, they will adjust my health insurance premium based on their precise estimate of the cost of my future medical care. And, importantly, a clever insurance company that is precluded from learning my health score directly will find a pricing scheme that leads me to reveal it to them through the choices that I make.<!–[if !supportFootnotes]–>[4]

The fact that private insurers can accurately compute customer premiums to reflect expected future payouts means that the insurance market will break down. Insurance is about shifting risk, pooling large groups of undifferentiated individuals.  When either the insurer or the insured can forecast future events, and accurately distinguish one person from another, the rationale for insurance disappears.

In thinking about the provision of medical care, it is important to realise that we view it differently from other goods and services.  When it comes to housing, cars, vacations, and the like, we are fairly tolerant of disparities between rich and poor.  Our focus is on equal opportunities, not equal outcomes.

Granted, Americans accept greater inequality than the citizens of many other countries do.  Not so for health care.  Members of wealthy societies share the view that their members are entitled to high quality medical care.  Social justice demands that the rich and poor among all of us receive roughly comparable treatment.

Over the past decade, there have been several attempts to reform the American health care system.  The US spends nearly 15½% percent of our GDP on medical care, roughly 50% more than countries like France, Germany and the Netherlands.  And, as measured by life expectancy and infant mortality, Americans’ health outcomes are worse than those in much of the industrialised world.  Something has to change. But change is politically and socially difficult, so in designing the new system we should make changes that are likely to last.

Looking into the future, we see that technology will force private health insurance to disappear at the same time that the social pressure to provide equal access to care will remain.   This makes it inevitable that health care systems everywhere will provide universal coverage and be publicly run.  Governments will replace markets, insuring that the poor and uninsurable receive medical treatment at the same time that the healthy are forced to participate in a comprehensive system.

Unfortunately, we will be forced to restrict access to the most expensive treatments, but even so, everyone is going to receive adequate health care. The operation replacing my disintegrating brain and over-worked liver with the new ones grown from my skin cells may not be covered; but then again, maybe it will.  Regardless, I’m off to my wine cellar to ponder the best way to design a publicly run, single-payer health care system.

American National to Cease Sales of Individual Health Insurance

Wednesday, July 7th, 2010

American National Insurance Company has announced that its subsidiaries, American National Life Insurance Company of Texas and Standard Life and Accident Insurance Company will discontinue the sale of individual medical expense insurance plans effective June 30, 2010.

American National Insurance Company said that it continues to be committed to the health insurance market place and will focus on Medicare supplement insurance and large group coverage as well as other supplementary health products.

According to the company, the decision to cease new sales was made after careful consideration of the recent healthcare legislation and based on the knowledge that the companies’ individual medical expense plans will not meet the requirements of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 recently enacted by the US Federal Government.

Congressman Ortiz Spends Taxpayer Money Touting Health Care Reform

Wednesday, July 7th, 2010

Congressman Ortiz from the Texas 27th Congressional District mailed out, at taxpayer’s expense, “Congressman Solomon P. Ortiz’s Health Care Reform Report”. This is the same congressman who refused to attend any town hall meetings in South Texas due to his fear of his constituents.

Highlights of this taxpayer funded propaganda piece includes:

“Bans the worst behaviour by insurers by ending their ability to deny coverage based on pre-existing conditions, drop coverage when people get sick and charge people more based on their gender or occuption.” (NO LONGER INSURANCE – NOW A WELFARE PLAN – SOCIALISM)

“Requires shared responsibilty among individuals, business, and government.” (SOCIALISM)

“Assures that health care is affordable by providing tax credits to low and moderate income families.”(SOCIALISM)

“Provides tax credits to small businesses to help them provide coverage to their employees.” (SOCIALISM)

Congressman Ortiz proudly states “THIS SPRING, CONGRESS AND THE PRESIDENT MADE HISTORY BY ENACTING COMPREHENSIVE HEALTH CARE REFORM THAT GUARANTEES AFFORDABLE, QUALITY COVERAGE FOR ALL AMERICANS. I WAS PROUD TO SUPPORT THIS VITAL LEGISLATION.”

This exemplifies the arrogance of incumbency funded by punishing taxation.

Tuesday, July 6th, 2010

Aetna withdraws Calif. health insurance rate hike

Aetna withdraws Calif. health insurance rate hike after errors found by independent review

ap

Shaya Tayefe Mohajer, Associated Press Writer, On Thursday June 24, 2010, 7:28 pm EDT

LOS ANGELES (AP) — Another health insurer has withdrawn a proposed rate hike after an independent review discovered errors in the complicated calculations the company used to justify boosting 65,000 policyholders’ rates by an average of 19 percent.

The review ordered by a California regulator discovered Aetna Inc.’s proposal incorrectly multiplied when converting the monthly premium into an annual one, and the rate increase was not compounded correctly.

The mathematical errors resulted in inflated rate hikes, but it’s unclear how far off the rates were because the insurer withdrew the rate hike before the review was completed, Department of Insurance spokesman Darrel Ng said.

The review was part of a broader regulatory move by Insurance Commissioner Steve Poizner, who earlier this month ordered independent reviews of all rate hikes for individual policies at the state’s four biggest insurers.

The top four companies control 90 percent of the market for the 1.1 million individual health policies regulated by Department of Insurance. The Department of Managed Health Care regulates another 1.4 million such policies.

In a statement, Aetna said it conducted a third round of internal reviews of the rate hike and “found a miscalculation not previously detected. This was simple human error.”

A proposed increase from Blue Shield is currently under review, and future increases from Anthem Blue Cross and Health Net Inc. will be reviewed.

In California, insurers are required to spend 70 cents of every dollar collected in health insurance premiums on medical benefits.

In April, Anthem Blue Cross withdrew a plan to hike rates 39 percent for some customers after facing similar scrutiny and broad public criticism.

Anthem’s rate hike was repeatedly held up by President Barack Obama as an example of a broken health care system in the run up to the vote on the federal health care reform bill.

Anthem withdrew its hike one day after its parent company, Wellpoint Inc. of Indianapolis, announced its first-quarter profit soared 51 percent.

Poizner has pledged more transparency in the process of health insurance rate hikes because two of the four major health insurers have submitted erroneous filings.

“I have decided to take the exceptional step to post future individual health insurance filings on the Department of Insurance’s website,” said Poizner. The move will “allow any member of the public to scrutinize these rate filings and will, in the end, minimize rate increases by keeping markets as competitive as possible.”

(This version CORRECTS number of policies regulated by the Department of Insurance.)

Tuesday, July 6th, 2010

Fact Check: Health care benefits not taxable but are reportable

FACT: The IRS needs to know who doesn’t have insurance as of 2014.Posted: June 20, 2010 – 3:25am

Times-Union readers want to know:

Is it true that we will have to pay income tax on the health care benefits provided by our employers?

The new health care law seems to provoke a lot of questions – and false claims.

This is one of them.

The value of your employer-provided health care insurance will appear on your W-2 form, but it won’t be considered taxable income. The value is purely for informational purposes, according to the fact-finding sources, FactCheck.org and PolitiFact.com, and various other media outlets who quote tax experts.

A widely circulated e-mail quotes a summary of the bill that became law, FactCheck.org reports: “[Section 9002] requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer-sponsored group health coverage.”

That’s accurate.

But the e-mail incorrectly assumes that the cost will be “added to your gross pay” and that “you will be taxed on the total.”

“See what $15,000 or $20,000 additional gross does to your tax debt,” the e-mail claims. “That’s what you’ll pay next year. For many, it also puts you into a new higher bracket so it’s even worse. This is how the government is going to buy insurance for 15 percent that don’t have insurance and it’s only part of the tax increases.”

The actual health care law says nothing of the sort. The value of your employer-paid insurance is not taxed now, nor will it be when the provision of the new health care law goes into effect.

The requirement begins for the tax year 2011, so employees will see it on their W-2s in 2012.

The chain e-mail also cites an April 5 article by Joan Pryde, a senior editor of the Kiplinger letters, as proof that the tax is coming. The e-mail states, “Go to Kiplingers and read about 13 tax changes that could affect you. Number 3 is what I just told you about.”

But FactCheck.org, a nonpartisan fact-finding project of the Annenberg Public Policy Center at the University of Pennsylvania, and PolitiFact.com point out that the Kiplinger article actually contradicts the claim. The article says:

“3. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011. The amount reported is not considered taxable income [emphasis added].”

So if we’re not being taxed for our employer-paid benefits, why include the value on our W-2 forms? PolitiFact.com, the Pulitzer Prize-winning nonpartisan project of the St. Petersburg Times, tells why:

Beginning in 2014, people who do not get health insurance will be fined. The W-2 reporting requirement will help the Internal Revenue Service verify that people have coverage for themselves and their dependents. The requirement will also help the IRS more easily collect a tax on the so-called “Cadillac” health insurance policies, those that cost significantly more than the national average. The Cadillac tax goes into effect in 2018.

FactCheck.org reminds us of a little history: During the 2008 presidential campaign, Republican candidate John McCain did propose to make the value of employer-sponsored health insurance taxable. A response ad for Barack Obama claimed, albeit falsely, that it would be the largest middle-class tax increase in history. But Obama was clearly against the idea and used harsh rhetoric against it in the campaign – until, as president, he said he might be willing to support it as a way to help pay for the plan and if it kept the health care process on track. The idea never made it into the final legislation.

carole.fader@jacksonville.com, (904) 359-4635

Need Health Insurance But Have a Pre-existing Condition? No Problem

Thursday, July 1st, 2010

 Are you kidding me? What’s the catch?

It’s finally here! No need to buy expensive health insurance anymore and pay those high premiums. Why pay something when you dont need it?

Now, you can buy a health plan when you need it, and pre-existing conditions will be covered! What a novel idea!

Go to www.pcip.gov and apply on-line today.

Editor’s Note: Why would someone pay COBRA coverage if they can fall back on this policy only when they get sick? Why would an employer continue to offer group health insurance to their employees when the sick ones can get coverage only when they need it?  The only draw back is you have to prove you had no health insurance for the previous 6 months – so you roll the dice for 6 months and hope your eventual pre-existing condition surfaces later.

Health Care Reform: Tanning Tax Begins Today

Thursday, July 1st, 2010
Today is the first day of the racist tanning tax of 10% passed as part of health care “reform.”
Ever seen a black person at the tanning booth?

Brownsville Blog Rips Brownsville ISD

Thursday, July 1st, 2010

CAVAZOS USES SPRINGSTEEN FOR GREEDY ENDS!

Since we’ve run this photo of BISD Superintendent Bruce Springsteen receiving a $50,000 check from Johnny “Caliche” Cavazos, we have been haunted by the image of money–allegedly for an honorable cause–exchanging hands right before our eyes. Cavazos, who received his nickname as a result of his practices as a low-life Cameron County Commissioner, has been buying politicians and gouging school district employees for decades with his insurance scams. And we’re talking millions. According to rabblerouser Carlos Quintanilla of Accion America, Springsteen wouldn’t be superintendent if it weren’t for the politicians that Cavazos had lured to his lucrative cause. The beginning of the end for former Superintendent Hector “El Ganso” Gonzales began when he refused to slip Cavazos the $38 million healthy insurance contract last year. Trustees “Slick” Rick Zayas and Ruben “El Caveman” Cortez were part of an alliance to force Gonzales’ hand. The BISD paid an “independent” expert, a longtime crony of Cavazos, to evaluate the applicants and make a recommendation. To the surprise of no one, he endorsed Cavazos’ plan. Gonzales dug in his heels and Zayas and Cortez cut him at the knees. They fired Gonzales and rigged the hiring process to assure Springsteen’s elevation. He was the only candidate for a position that pays more than $200,000 annually. And Cavazos, triumphant again, walked away millions richer. With a board and an administration committed to the special interests getting theirs and indifferent to the needs of its own employees, we would suggest that Springsteen avoid photographs accepting thousands from the conniving Cavazos. Whenever we have an upset stomach and Pepto-Bismol isn’t working its magic, we look at this picture and immediately vomit!
Posted by EL ROCINANTE at 11:19 AM 7 comments