Agent in the Clink: Update

Last week, we reported on the unfortunate case of Aloha State insurance agent Kathleen Kau, who was recently sentenced to 10 years in prison for raiding her clients' insurance policies. We wondered what kind of life insurance policy came with a checkbook (as described in the original article), and reached out to the reporter and to TransAmerica.

We were unable to connect with the former, but yesterday got this answer from Cindy Nodorft (she's in Transamerica's Corporate Communications area):

"Thanks for your inquiry.  I’ve learned that the policy at issue was part of a block of business assumed by Transamerica Life Insurance Company that allowed policyholders to obtain policy loans.  This practice was discontinued in about 2005."

I guess that makes sense, although I'd never heard of carriers issuing checkbooks with loans. It strikes me that this sounds more like a line of credit than a typical loan, but at least we now have an answer.

Thanks, Cindy!

From the P&C Files: Iran, Shipping, Insurance and Oil

Although we primarily concern ourselves with life and health insurance, we're certainly no strangers to the Property and Casualty side of the biz. This item in the Washington Free Bacon Beacon (oops, sorry), piqued my interest:

"The insurance industry and ... lawmakers are attempting to water down a new Iran sanctions bill that would penalize any company that underwrites Iranian affiliates"

Since this is rather outside my bailiwick, I turned (again) to our resident on-call P&C guru, Bill M, who helped me get my head around it.

Here goes:

Acme Industries, which ships oil-drilling equipment to Iran, calls AIG (hey, it's called American International Group for a reason) for a quote. AIG asks all the pertinent questions (including what's being shipped, from where, to where, etc) and generates a quote. Acme likes what it sees, and purchases the policy.

Six months later, Acme is sanctioned for "bolstering the Iranian oil industry."

Under the bill currently wending its way through the House, AIG would then also be sanctioned.

The "prominent lawmakers" mentioned above would prefer to let AIG (or whomever) off the hook.

This item raises a number of questions:

First, would it have mattered if Acme had already been sanctioned before seeking that AIG quote? Are "sanctions" to this process what speeding tickets are to auto insurance?

Second, what if Acme had bought the policy from a broker in London? After all, it's not unreasonable to presume that a carrier might have offices in other countries in addition to a presence here.

If you have experience in this market, we'd appreciate any thoughts you might have on this.

ObamaTax: Told ya so

Bob mentioned this last night, but I wanted to toss in my 2¢. Regular IB readers won't be surprised that:

 "About one in 10 employers plan to drop health coverage when key provisions of the new health care law kick in"

I think that's lowballing it, and here's why:

First, the ridiculously onerous MLR requirements, which add nothing of value but do add lots of extra costs to group plans. Determining who's eligible, calculating employees' shares, and tracking down former employees who might have been covered for only a month sounds like a great reason to bail.

Second, those much-touted  small business tax credits (subsidies) were a complete bust; how bad is it when you can't even pay employers to offer group health plans?

Third, what about all those companies with, say 55 or 60 employees? They're over the mandate threshold, but not exactly in Fortune 500 territory. Letting go one or two folks might work (to get back below the threshold), but a dozen? Just doesn't sound viable. Smartest alternative? Dump the group and eat the fine.

Okay, maybe that's more like a quarter's worth.

Cavalcade of Risk #162: Come and get it!

Van Mayhall hosts this week's collection of interesting risk-related posts. Don't miss it.

Bye Bye Benefits

About one in 10 employers plan to drop health coverage when key provisions of the new health care law kick in less than two years from now, according to a survey to be released Tuesday by the consulting company Deloitte.


read more . . .

And now, the Anti-MVNHS©

Yesterday, we reported on the sad fate awaiting seniors who trust the Much Vaunted National Health System© to keep them alive. As we noted, many are forced onto a lethal "pathway," denied fluid and meds.

In response to this growing scandal, "the anti-euthanasia charity Alert is distributing cards to patients to prevent this happening. The cards simply read: 'Please do not give me the Liverpool Care Pathway treatment without my informed consent or that of a relative.'"

The problem with the Pathway is that it is often "prescribed" without the permission (or knowledge) of the patient or his (or her) advocate. It's an attractive option - for the MVNHS©, natch - because it reduces costs with little or no effort. According to Dr Gillian Craig, a retired geriatrician and former vice-chairman of the Medical Ethics Alliance, "[i]f you are cynical about it, as I am, you can see it as a cost-cutting measure, if you don't want your beds to be filled with old people."

The cards act as garlic to vampires, hopefully fending off over-zealous providers from pulling the plug prematurely. Unfortunately, there doesn't seem to be any way to enforce them; that is, what's the consequence to the provider if that card is ignored? After all, it's the MVNHS© that's footing the bill (hey, it's free health care, right?).

Exchanges, Subsidies and intent

[Note: This post was co-written by Henry Stern and Bob Vineyard]

We've often lamented that it's too bad no one read the ObamaTax bill before they passed it, and with good reason. A fundamental problem is that the 2000+ pages of the bill, and the 13,000+ (so far!) pages of reg's promulgated to enforce it, keep handing up surprises. As we've pointed out, folks in states which opted for Federally-run Exchanges aren't eligible for the ObamaSubsidies, thereby driving their costs even higher.

Or are they?

Cato's Michael Cannon has been, perhaps, the most vocal in pointing out this discrepancy:

"This was no “drafting error.” During congressional consideration of the bill, its lead author, Sen. Max Baucus (D-MT), acknowledged that he intentionally and purposefully made that bailout conditional on states implementing their own Exchanges ... On May 24, the IRS finalized a regulation that says the law’s $800 billion [subsidy funding] will not be conditional on states creating Exchanges"

So what's the big deal?

The following appeared on a forum for insurance professionals in which Bob participates (it's about the ObamaSubsidies noted above):

"If you are ELIGIBLE to join any employer group plan where your portion of the premium is less than 9.5% of your income, then you won't get a subsidy. Next - drumroll please - this also holds true for dependents ... Due to the fact that the EMPLOYEE portion is less than 9.5% of the FAMILY income, the entire family is disqualified from a subsidy even if the employer pays nothing for dependent coverage."

In fact, and this is a real kick in the shins, it doesn't seem to matter whether you actually sign up for the group or not: maybe you found a better deal on the Exchange [ed: hey, it could happen!] and buy it, presuming that the net premium will be less because of the subsidy. Nope.

And it's no better if you do sign up for the group plan:

"Actually, the employer doesn't even have to pay a large portion in order for this to kick many families out of the subsidy ... a family of four must pay $729 in premium to equal 9.5% of their income if they make 400% of FPL. That means that any employer group health plan that charged that employee less than $729 for the EMPLOYEE-ONLY coverage would disqualify him and his dependents from receiving a subsidy. Nice."

And it only gets better worse:

"If you have an increase in earnings, putting you over the limit, part of your subsidy can be taken from you later."

Talk about the gift that keeps on giving.

Bob notes that, unfortunately, this "gift" also comes with more questions than answers:

■ How much intrusion into our lives will be required to determine if someone is entitled to a subsidy?

■ Will everyone's return require an audit (which implies an after-the-fact review)? If you get your subsidy and then an audit later determines you were not entitled to it do you owe the money back plus penalty and interest?

■ Will the IRS be smart enough to run all the calculations?

■ Will this create an additional burden on employers who will then drop health insurance rather than put up with the red tape? Will this exercise remind employers of what they had to go through for MLR rebates and create a backlash?

■ Will Dudley be able to save Nelle from being blown up by Snidely?

And he points out that the only real answer we have is that this latest wrinkle illustrates how impossible this law will be to execute, and how much money will be wasted trying to implement and enforce it.

Our forum participant continues:

"How many will qualify [for the subsidies]? The government estimated 20 million. I hope they're closer than their estimates for PCIP enrollment. Their estimates for the small business health insurance premium subsidy was as much of a flop."

As we've pointed out here, the PCIP program, while itself laudable, has thus far enjoyed underwhelming success.

The lynchpin here is whether or not HHS Secretary Shecantbeserious, and her colleagues the Revenooers, can make their interpretation rule stick. So far, the law says what HHS (and, of course, Chief Justice Roberts) says it says.

Time (and, of course, November 6th) will tell.

MVNHS© "Expediting" Health Care Costs

One of the major problems facing nationalized health care systems is that, despite all promises to the contrary, they do very little (if anything) to reduce the cost of delivering care. There are, after all, only so many ways to do so; by far the most efficient (at least for the Much Vaunted National Health System©) is to simply deny it to "undeserving" folks:

"[S]ix doctors in the U.K. ... claim that the country has gone too far with a publicly funded program aimed at supporting terminally ill patients."

This word, "support" - I dunna think it means what you think it means:

"[T]he Liverpool Care Pathway program is being used to cut costs instead of as simply a more humane mode of care ... allows medical staff to withhold fluid and drugs in a patient’s final days"

Under the Brits' system, "support" means "death," which is an interesting (if macabre) spin on things. We've discussed 'end of life' care here at IB, and determined that there are no easy answers [ed: no kidding]. Although some folks (notably those who advocate it) applaud these "pathways" as both cost-effective and humane, they conveniently ignore the fact that the folks making the decision have a vested interest in the outcome:

"[T]he number of hospital deaths that implemented such end-of-life care measures doubled in the last two years."

That's a lot of dead grannies.

Blogroll Update

We're pleased as punch to add Jeff Root's interesting and helpful life insurance blog to our blogroll. Jeff's an independent life insurance agent, licensed in all 50 states(!), who specializes in high risk life insurance.  He works with consumers and agents alike, helping those with health issues obtain needed coverage at affordable rates.

Jeff performs thorough evaluations of a consumer's risk and submits that to underwriters with whom he's built lasting  relationships (as well as other general underwriting desks). He then screens the offers that come back and offers the best one(s). As Jeff says "it's something I wish most life insurance agents would do instead of taking shots in the dark."

Amen to that!

What makes his blog so interesting is that he shares these experiences in a consumer-friendly way. He believes that "there's a lack of helpful information for consumers with health issues on the web," and so he tries hard to fill that void. Do click through.

Cavalcade of Risk #162: Call for submissions

Van Mayhall hosts next week's Cavalcade of Risk - Entries are due by Monday (the 23rd).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

Thanks!

Another Agent in the Clink

Regular readers may recall the sad story of Glen Neasham, who sold an annuity and went to jail. A bit further west, insurance agent Kathleen Kau has just been sentenced to 10 years in prison for "stealing more than $360,000 over five years from two longtime clients."

Most definitely not good customer service.

I'm a little unclear on how this worked, exactly: "Kau opened a post office box to receive mail for her victims after falsely informing Transamerica Life Insurance Co. that a fire destroyed [their] home ... Kau also asked the insurance company to mail a checkbook allowing her clients to tap their life insurance account savings because of the home loss."

I've never heard of a policy that has a checkbook feature as a living benefit. I've reached out to the reporter for clarification, and will update this post if/when I receive that.

This case obviously differs greatly from Mr Neasham's: according to the story, the agent clearly set out to defraud her clients victims. The prosecutor noted that she stopped doing so only "because there was no money left in the victims' accounts." Although TransAmerica has reimbursed the looted funds, one can only imagine how difficult it will be for the insureds to ever again trust a financial advisor.

No winners here.

Outstanding Carrier Trick [UPDATED]

[UPDATE: To participate, click here, then click "Like"]

MassMutual and Easter Seals are once again teaming up to increase awareness of the important decisions and financial challenges facing families with special needs members. Taking advantage of social media, they've launched a cool FaceBook video giving folks a glimpse into the every day lives of a mother with a special needs child. What's more, MassMutual will donate $5 to Easter Seals for every "Like" the video garners.

Courtney Denning offered us the opportunity to interview Joanne Gruskos, director of MassMutual’s SpecialCares program, and we (of course) jumped at the chance:

InsureBlog: How did you become interested in/involved with MM and the special needs area?

Joanne Gruskos: Well, I'm a longtime employee of MassMutual, primarily in sales and marketing. After we started the trust company in 2000, we began to grow our relationship with Easter Seals. We had a lot of interest from trust administrators from around the country, which we took as an opportunity to do something new.

This grew into a partnership with the American College, with which we developed an exclusive special needs curriculum and designation. This is slated to go industry-wide in the near future.

IB: Would you share some of the home history of the MM/ES partnership?

JG: Let's say you're a financial planner. and one of your clients is a family with children developing just fine, and one special needs child. Your task is now complicated by the fact that you have to account for the parents' lifetimes, plus the special needs child's lifetime. This can be quite challenging.

And it gets more difficult: you have to coordinate this with government and other programs, because if you screw up eligibility, you could cost the family a lot of money. Easter Seals is instrumental in helping us thread these needles.

IB: Is there a central directory/database of folks who've earned the spcial needs consultant designation?

JG: Yes, in fact we have an extensive website that's chock full of helpful information, including advisors, FAQ's, all kinds of resources to help navigate all the different programs and opportunities.

IB: What would be the one thing you'd most like our readers to know about MM/ES and special needs?

JG: We believe that "who matters to you matters to us." In fact, we've distilled this into a short but powerful video that helps people understand more of what we do and why we do it.

We're here to help you when you're ready to start planning. This is such a critical need that we really don't push product, we push education.

Thanks, Joanne, for your time and insights. For readers who are interested in learning more (and for agents interested in pursuing the special needs designation), there's a wealth of information at the MassMutual Special Needs website.

Oh, and that video Joanne mentioned above? Here you go:

Health Insurance Exchanges

Health insurance exchanges. That place on the internet where magic happens. Citizens and business owners can view, compare and purchase government designed and priced health insurance plans . . .  all with the click of a mouse.

But it appears some of the states are lagging behind in establishing this new insurance flea market. According to NCSL, only 12 states have established "The Exchange."

Health Insurance Exchanges are, for most states, new entities that will function as a marketplace for buyers of health insurance, giving them choices for health coverage. They will offer a variety of certified health plans and provide information and educational services to help consumers understand their options. The 2010 Affordable Care Act (ACA) gives states the option to establish one or more state or regional exchanges, partner with the federal government to run the exchange, or to merge with other state exchanges. If a state chooses not to create an exchange, the federal government will set up the exchange(s) in the state. 

That last line is the key.

Why spend state money (that they don't have) if the government will do it for them?

Kind of like owning a business . . .

Health Wonk Review: Smokin' hot edition

Julie Ferguson presents this week's sizzlin' round-up of wonky posts. As usual, there's  lots to choose from, so enjoy the A/C and the HWR.

Mandate, Shmandate?

Regular readers know that, come 2014, it'll be more economically efficient to drop their health insurance than to keep it, since plans will be guaranteed issue with no exclusions for pre-existing conditions. Since the ObamaTax is (at least initially) going to be a lot less than one's premium, why would one purchase insurance before a claim?

Now you may be thinking: "But Henry, if I don't buy coverage I'm going to have to pay that tax or I'll be in hot water with the IRS."

Um, maybe not so much. Reason's Jacob Sullum makes the case:

"Even paying the penalty is effectively optional, because Congress ... barred the Internal Revenue Service from using its most effective tools — liens, forfeiture, and prosecution — to collect it... the IRS, confronted by uninsured taxpayers who refuse to pay the penalty, must instead resort to "scary letters and threats to withhold tax refunds."

Hmm, scary letters? I can handle that. As I think most people could.

The problem here is that Mr Sullum's just not thinking this through. If millions (or tens of millions) of Americans "opt out" and also refuse to pay the penalty tax, what's left of the system falls apart. For the Obamastration, this is a feature, not a bug, because it paves the way for what they really want.

[Hat Tip: FoIB Holly R]

Even More MLR Fun

Got this from a forum used by insurance agents all over the country. It shows the insanity of the MLR debacle.

United Healthcare just informed me that I can look online and see what rebate amounts my group clients received. A group with 44 enrolled employees in 2011 and an annual premium of $132,211.45 for 2011 will receive a rebate of $124.97 representing .001%. What a mess.

Humana didn't list the rebate amounts for my clients, but I just received an e-mail from a client who has 5 enrolled employees on one of Humana's lowest cost plans ($5,000 deductible 70% plan), and they received a $1018 rebate. 

Thank you HHS for this wonderful gift.

As we now know, if you own a business you didn't build it by yourself. You had help from the government.

10 Things You Probably Didn't Know

but were afraid to ask about Obamacare.

So you think the Supreme Court upheld a law that requires most people to buy health insurance? That's only part of it. The measure's hundreds of pages touch on a variety of issues and initiatives that have, for the most part, remained under the public's radar. Here's a sampling:  

	Postpartum Depression (Sec. 2952) Urges the National Institute of Mental Health to conduct a multi-year study into the causes and effects of postpartum depression. It authorized $3 million in 2010 and such sums as necessary in 2011 and 2012 to provide services to women at risk of postpartum depression.
	Abstinence Education (Sec. 2954) Reauthorizes funding through 2014 for states to provide abstinence-only sex education programs that teach students abstinence is "the only certain way to avoid out-of-wedlock pregnancy, sexually transmitted diseases, and other associated health problems." Federal funding for these programs expired in 2003.
	Power-Driven Wheelchairs (Sec. 3136) Revises Medicare payment levels for power-driven wheelchairs and makes it so that only "complex" and "rehabilitative" wheelchairs can be purchased; all others must be rented.
	Oral Health Care (Sec. 4102) Instructs the Centers for Disease Control and Prevention to embark on a five-year national public education campaign to promote oral health care measures such as "community water fluoridation and dental sealants."
	Privacy Breaks for Nursing Mothers (Sec. 4207) Requires employers with 50 or more employees to provide a private location at their worksites where nursing mothers "can express breast milk." Employers must also provide employees with "a reasonable break time" to do this, though employers are not required to pay their employees during these nursing breaks.
	Transparency on Drug Samples (Sec. 6004) Requires pharmaceutical manufacturers that provide doctors or hospitals with samples of their drugs to submit to the Department of Health and Human Services the names and addresses of the providers that requested the samples, as well as the amount of drugs they received.
	Face-to-Face Encounters (Sec. 6407) Changes eligibility for home health services and durable medical equipment, requiring Medicare beneficiaries to have a "face-to-face" encounter with their physician or a similarly qualified individual within six months of when the health professional writes the order for such services or equipment.
	Diabetes & Death Certificates (Sec. 10407) Directs the CDC and the HHS Secretary to encourage states to adopt new standards for issuing death certificates that include information about whether the deceased had diabetes.
	Breast Cancer Awareness (Sec. 10413) Instructs the CDC to conduct an education campaign to raise young women's awareness regarding "the occurrence of breast cancer and the general and specific risk factors in women who may be at high risk for breast cancer based on familial, racial, ethnic, and cultural backgrounds such as Ashkenazi Jewish populations."
	Assisted Suicide (Sec. 1553) Forbids the federal government or anyone receiving federal health funds from discriminating against any health care entity that won't provide an "item or service furnished for the purpose of causing … the death of any individual, such as by assisted suicide, euthanasia, or mercy killing." Source: Kaiser Health News

How Now Brown MLR?

MLR is confusing. It shouldn't be, but it is. Perhaps it is confusing because it was a rule created by those who did not have to implement it, or deal with the associated problems, particularly for employers.

Employers.

Those that actually CREATE jobs vs. just talking about saving or creating jobs.

MLR seems to be simple.                      

Carriers are assigned loss ratio's based on line of coverage. If your loss ratio fails to meet the guideline you are required to issue a policyholder refund. If your loss ratio exceeds the mandate, you suck it up.

How difficult is that?

Complicated enough for carriers. How about employers?

Well . . .

Fortunately the DOL has issued this handy dandy technical release on how to allocate and distribute those wonderful MLR rebates.

If you have insomnia, this is highly recommended. It is effective and non-habit forming

Click here for sleep therapy.

So how do employers allocate and distribute the refund?

Funny you should ask.

First you need to remind yourself that those who wrote the law, issued the regs and then wrote the DOL technical release are not employers. They have never walked a mile in your shoes. They have no clue how to run a business.

They are government employees.

Not private sector employers.

Got it?

However they did provide a "hotline" you can call if you have questions.

(202) 693-8510

Burn that number into your mind. Put it on speed dial.

You will need it.

So how does an employer allocate the refunds?

You start by counting all covered participants during the PLAN YEAR that generated a refund. Not the calendar year (unless your plan follows a calendar year schedule), the plan year.

Include current employees that were covered as well as former employees. Don't forget those that may have only been covered for a few months. Include any employees that went on COBRA during the plan year.

If you had more than one plan from more than one issuing carrier during 2011 you will need to repeat this process for each carrier.

Of course you may have only received a rebate from one carrier, not both.

That is a good thing.

If you had COBRA participants from carrier A for the first 6 months of the year and you changed carriers, you need to calculate the refund separately for carrier A vs. carrier B.

This calculation also applies to active and former employees covered by two different carriers during the year.

Segregate those employees that only had single coverage from those that had dependents.

Calculate the rebate based on the percent of premium you (the employer paid) vs. the premium paid by the employee.

Now total up the MLR rebate from carrier A and allocate accordingly. Repeat this process for carrier B.

Issue refund checks (from each carrier) to active employees.

Now do the same for former employees.

Don't have a forwarding address for former employees? Issued a refund check and it came back addressee unknown?

Call (202) 693-8510.

Oh, did you have a Section 125 plan?

Let's just say the refund calculation is more complicated.

Besides, you have probably already dozed off  . . . 

MVNHS© circling...

Ah, the Much Vaunted National Health Service©:

"Thousands of over-75s 'are being denied statins by GPs' that could prevent heart attacks and strokes ... Researchers believe that GPs are reluctant to prescribe such medication for the elderly as they are worried about the possible side-effects." [emphasis added]

Researchers speculate? Who cares?! What do the doc's themselves offer by way of explanation? Well, it may soon become illegal for British physicians to refuse treatment to elderly folks, which is nice.

In theory.

The reality is a bit different, though:

"A map produced by The Roy Castle Lung Cancer Foundation, using the latest NHS data, shows that in some areas patients are twice as likely to be offered surgery."

This in response to claims that Brits with lung cancer face an uphill battle to receive treatment. In point of fact, MVNHS© results in this area are abysmal, revealing that "only a third of hospital trusts met its 80 per cent target of referrals ... The map shows big variations in two affluent areas of southern England."

But, but, but ... national health care schemes are the most fair, offering equal treatment to all. Yes, but some demographics are more equal than others, wink wink, nudge nudge.

Don't just take our word for it, though; here's an actual victim patient:

"I had no idea then that a patient had died from thirst. My fear of the place was born from my own bitter experiences ... Almost everyone I know locally has a story to tell about its services falling short ... After a four-hour wait, a female doctor looked at my weeping skin and said: ‘Dermatology is not an emergency at weekends.’

Luckily for Ms Kite, the "free" system isn't the only game in town. Those with dollars pounds to spare can opt for "a  private hospital where, for £100, a doctor diagnosed a nasty form of eczema and put me on steroids."

Meanwhile, "regular" folks can look forward to sharing the fate of Kane Gorny, a 22 year who had just successfully fought brain cancer. Unfortunately, he "needed drugs to regulate his hormone levels ... during a hospital stay nurses forgot to give him his medication" and he promptly became the late Kane Gorny.

Once again underscoring the truly insidious nature of nationalized health care (aka ObamaTax).

Domino's Part Deux

And speaking of Domino's . . .     

What happens to all those hundreds of thousand of people covered by risk pools and PCIP?

Come 2014 these money-losing plans are no longer needed. You can say goodbye to COBRA as well, at least for those who lose their employer coverage after January.

With 10,000 baby boomers turning 65 every day there will be more than 5,000,000 new beneficiaries on Medicare when the calendar turns over to January 1, 2014.

And then there are 15,000,000+ who will become eligible for Medicaid on that date.

It takes about 10 years to produce a new doctor. Will we have enough medical personnel to handle all these people? 

Will the federal government have the funds, and personnel to administer health insurance for 20,000,000 more people in January, 2014?

With 43 million on Medicare now, and 54 million on Medicaid, where will the money and staff come from to handle another 20 million new "policyholders"?

Did anyone in Washington bother to think this through?

And this just in, courtesy of Holly Robinson . . .

(Ohio) Gov. John Kasich says he doesn’t know if the state can afford adding more poor, uninsured Ohioans to Medicaid rolls as called for in President Barack Obama’s health-care law.

Even if Ohio opts out of expanding Medicaid, as the U.S. Supreme Court ruled last month states could do, the Kasich administration projects nearly 400,000 Ohioans already eligible will sign up, costing taxpayers $940 million in 2014 and 2015.

That price tag cited by Kasich, a staunch opponent of Obama’s health-care law, is 63 percent ($365 million) higher than projections his administration produced a little more than a year ago.

Domino's

The tiles, not the pizza. Stack them up, give them a little push, watch them fall.  


Years ago Pete Seeger penned a song titled "Where have all the flowers gone?". Recorded and made famous by the Kingston Trio and Peter, Paul and Mary in the 60's, the song, with some lyric modifications might now be re-titled "Where have all the carriers gone?".


Much has been discussed and cussed about Obamacare but very little has been said about the impact on the economy once Obamacare unfolds in 2014 and beyond.


Many carriers will simply withdraw from the market rather than put up with the frustration. The ones that remain will scale back their operations. Support staff, including home office service reps, claims adjudicators and premium accounting staffers will go. Regional offices will close.


Sales reps that promote individual major med and small group insurance plans will be the first to go, starting about a year from now in the summer of 2013. Underwriters will depart in early 2014.


How many thousands of people will lose jobs, how many offices will go dark?


Hard to calculate at this point.


How much will this impact a failing economy?


And what will happen when the carriers finally leave the market entirely? When, not if, because they will eventually withdraw and we will have Medicare for everyone.


States will lose a major tax base as the health insurance business shifts from the private sector to government (taxpayer) funded plans. Premium taxes rank in the top 3 revenue sources for every state. Those lost revenues will have to be made up somewhere else and there will be further reductions in state provided services.


The hits just keep on coming.


How is this working for you?

Stormy Weather: Buckeye style

Got this in email:

"Due to the severe weather throughout Ohio on June 29, 2012, the Ohio Department of Insurance has issued a notice requesting that insurance companies give affected subscribers additional time to pay their insurance premiums."

We had some rip-roaring weather hear the end of last month; lots of folks lost power for days, even weeks. The "request" is really a bit more than "pretty please," though:

"The bulletin, 2012-02, states that insurance companies are to give those who have been directly impacted by the storms 60 days from the date the premium was due to pay their premiums, interest free ... This request to insurers derives from the Federal Emergency Declaration for the state"

Still, it's nice that those seriously affected by the storms and subsequent power loss get a little breathing room.

[Hat Tip: MMO]

Company Check Up

How well is your health insurance company doing under the Obamacare regime and MLR? The mandated Medical Loss Ratio was intended to keep premiums down and penalize carriers that were viewed as greedy.        

As we have stated before, regulating premiums AND "profit" margins is nonsensical in a competitive market place but try telling that to the folks in Washington who have never held a real job.

None the less, if you want to know how carriers in your state have done, the architects of the final solution to eliminate free choice with regard to health insurance are providing data at HealthCare.

We decided to look at some Georgia health insurance companies and see how they fared under Obamacare MLR.

What follows is a summation by carrier name, individual MLR, rebate, small group MLR, small group rebate.

Company	Individual MLR	Rebate	Group MLR	Rebate
Blue Cross	83.3%	0	82.6%	$0
Coventry	68.4%	$44	80.3%	0
Kaiser	126.7%	0	90.5%	0
Humana	113.5%	0	81.5%	0
United Healthcare	NA	0	84.0%	0

Missing from the report are Assurant, Aetna, Celtic and Cigna. If a carrier has fewer than 1000 policyholders for that particular line of coverage they are not subject to MLR rules.

United has fewer than 1000 individual major medical policyholders and are not subject to MLR for that line, but are subject to MLR for small group.

If you were covered by an individual major medical or small group plan from any of the above carriers only those with a Coventry individual plan got a rebate.

Don't spend your $44 in one place.

Obamacare is supposed to bring down the cost of health insurance.

How is this working for you?

Trendy Diabetics

So, received an interesting piece of mail yesterday from my primary life company: Current Trends in Diabetes and Underwriting Diabetic Applicants.

(And yes, I am geeky enough that I find this stuff fascinating)

Turns out, a lot of the hype we see and hear on TV and the radio isn't really hype, after all, The mailing quoted CDC studies which revealed that:

■ The number of Americans diagnosed with diabetes more than tripled from 1980 to 2010

■ In 2010, more than 200,000 Americans under age 20 had diabetes

■ Almost 80 million Americans are considered "pre-diabetic."

In a follow-up conversation with my underwriter, I was told that this carrier alone (hardly one of the biggest names) receives over 300 apps a year on folks who didn't even know they were diabetic.

Yikes!

Ironically Sensible

Political Calculation's "Ironman" has a VERY interesting question regarding the mandate ObamaTax and whether (come 2014) one should buy coverage or roll the dice:

"Does it make more financial sense for you to pay for health insurance or to pay the ObamaCare mandate tax instead?"

The premise is that, at least initially, the tax is going to be much less than the premium for most people, so why bother buying insurance until one actually needs it?

What makes this such an outstanding post is that he quantifies the problem, and offers readers a tool to calculate their decision.

Very cool.

Fad Diet

Need to lose 100 pounds? You might want to give this a shot.

The Guinness Worlds Fattest Woman (over 700 pounds) found a novel way to lose weight with the help of her ex.

when her ex-husband Alex saw Pauline’s record-breaking entry, he visited for the first time in three years – and, incredibly, despite Pauline’s size, reignited their sex life. They now make love up to seven times in one day, despite 10st Alex risking suffocation if Pauline gets on top.ex at 10 stones is about 140 pounds.

And she says their sex sessions are helping her slim. She’s lost 7st in seven months and, at 45st, can stand up again – but admits Alex does most of the work in the bedroom. She says: “I can’t move much in bed, but I burn 500 calories a session – it’s great exercise just jiggling around.”500 calories huh?

3500 calories to burn a pound.

That's a pound a day . . .

Obamacare Spin Doctor

The Obamacare full court press continues as DC pretends the Unaffordable Care Act is really a good thing. This op ed piece from chief spin doctor Sebelius illustrates how far they will go to embellish the benefits of the train wreck we know as Obamacare.

For tens of millions of Americans with health insurance, repeal would also mean paying more for preventive care. Under the law, 54 million people with private health insurance including 1.7 million in Georgia can now get free preventive care like vaccinations, check-ups and cancer screenings. Repeal would mean that hundreds of dollars in savings a year could disappear.

Free preventive care has such a nice ring to it.

Like "kids eat free" at restaurants, or "buy 3 tires get the 4th free".

Do you really think you can drop your kids off at the restaurant and come back later to pick them up once they have had their free meal? Can you tell the tire store you only need one tire so "just give me the free one"?

Free preventive care only exists in the minds of the snake oil salesmen (and women) in DC.

Repeal would also take us back to the days when insurance companies were not accountable to anyone. With the new health law, your insurance company now generally has to spend at least 80 cents of every premium dollar on health care and quality improvements, not CEO salaries or advertising. If they don’t, you get a rebate. This summer 147,000 Georgia families with private insurance will benefit from an average of $134 in rebates from insurance companies as a result of this new provision.

Read more here: http://www.macon.com/2012/07/11/2090999/the-affordable-care-act-whats.html#storylink=cpy

If you buy this lie, you would believe the health insurance carriers operated in a vacuum without any oversight at all.

Truth is, carriers have always been closely monitored for loss ratio's, reserves and rate action. Even without oversight Georgia health insurance carriers operate in a fiercely competitive market. If one carrier charges to much they lose market share to others willing to offer the same product for a lower price.

This is called free market competition. A term that is completely foreign to those in Washington who have never worked in the private sector or run a company.

And how about those $134 rebates? Did you get one?

If you had a Humana One policy the answer is no.

Even if you did get a rebate did it make you want to double down and buy more health insurance in anticipation of an even bigger check next year?

Or did you blow it all on lottery tickets?

Since the law was enacted, 5.2 million Medicare beneficiaries in the donut hole have saved more than $3.7 billion on prescription drugs. In the first five months of 2012, 20,516 people with Medicare in Georgia received an average savings of $634. Repealing the law would add hundreds of dollars in additional costs for many seniors at a time when they can least afford it.

Ah yes, more "free" benefits . . . paid for with higher copay's, higher premiums and fewer drugs on formulary.

Insurance companies could once again throw children with pre-existing conditions like asthma and diabetes, off a family policy, or refuse to cover their illness. And repealing the health care law would threaten the lives of 2,066 in Georgia with serious health conditions like cancer who are getting life-saving care today thanks to a program, created by the law, for people who cannot otherwise find coverage.

Insurance carriers could NEVER "throw children with pre-existing conditions off a family plan."

As for the 2,066 in PCIP, there is no doubt this was a good thing about Obamacare. If PCIP had been created and nothing else it would be a good law, but the 20 new taxes, 2200 pages of law, 10,000 new pages in regulations and 16,000 new IRS agents is overkill.

Read more here: http://www.macon.com/2012/07/11/2090999/the-affordable-care-act-whats.html#storylink=cpy

Read more here: http://www.macon.com/2012/07/11/2090999/the-affordable-care-act-whats.html#storylink=cpy

RRepeal would also take us back to the days when insurance companies were not accountable to anyone. With the new health law, your insurance company now generally has to spend at least 80 cents of every premium dollar on health care and quality improvements, not CEO salaries or advertising. If they don’t, you get a rebate. This summer 147,000 Georgia families with private insurance will benefit from an average of $134 in rebates from insurance companies as a result of this new provision.

Read more here: http://www.macon.com/2012/07/11/2090999/the-affordable-care-act-whats.html#storylink=cpyead more here: http://www.macon.com/2012/07/11/2090999/the-affordable-care-act-whats.html#storylink=cpy