The Insurance Blog

Obamacare and Mega Blue

The Obama administration plans on Monday to announce scores of new health insurance options to be offered to consumers around the country by the Blue Cross and Blue Shield Association and the United States Office of Personnel Management, the agency that arranges health benefits for federal employees, according to administration officials.

The options are part of a multistate insurance program that Congress authorized in 2010 to increase options for consumers shopping in the online insurance markets scheduled to open on Tuesday.

Congress conceived multistate plans as an alternative to a pure government-run insurance program — the “public option” championed by liberal Democrats and opposed by Republicans in 2009-10.

NY Times

And this is good because . . . .?

The federal government negotiated the benefits and premiums for the Blue Cross and Blue Shield products, so this plan carries a federal seal of approval.

But how is this good for consumers?

Supporters of the multistate plans authorized by Congress say the plans will increase competition in local health insurance markets, many of which are dominated by one or two carriers.

Introducing a "super plan", issued by ONE carrier, will increase competition in markets dominated by one or two carriers.

Really?

Cavalcade of Risk #193: Call for Submissions (And A Special Note)

Dennis Wall hosts next week's Cav, and he's chosen to build it around a rather interesting (and provocative) theme:

The Rich Get Richer from the Great Recession, The Unemployed Stopped Looking.

So, please try to submit a post that fits this theme (of course, non-themed posts are also welcome).

Submissions are due by Monday the 30th.

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 unless directly theme-related). And please only submit if you are willing to link back to the carnival if your submission is accepted.

Cute vs Real

This is how Ms Shecantbeserious sees the ObamaTax:

And this is reality, barking back at her:

[HatTip: Ace of Spades]

ObamaTax Exchange Crunch-Time edition

Poor Ms Kathy: the clock keeps on tickin', and her pet project keeps getting a lickin'.

To wit:

■ Capital City itself

"The ObamaCare exchange serving Washington, D.C. is delaying important parts of its operations less than a week before it is scheduled to open for enrollment"

Not only won't potential enrollees be unable to calculate their subsidies (if any), but they can't even determine whether or not they're eligible for Medicaid.

■ Colorado

"Colorado exchange managers revealed Monday ... that customers who want tax credits to make health insurance more affordable will have to call for help, rather than navigating the multi-million dollar computer system on their own."

I'm sure that'll go over big with the 20-somethings that hold the key to the whole train-wreck's "success."

■ Utah

"Obamacare’s insurance marketplace was supposed to have “no wrong door ... Consumers will need to find the right door ... or they will possibly face delays in obtaining coverage"

The whole "No Wrong Door" meme was heavily promoted in the Exchange Certification training. Why am I not surprised that it's DOA?

■ Oregon

When it rains, it pours:

"Oregon ... won’t meet all the requirements for its health-insurance exchange when the online marketplace opens Oct. 1 ... For at least two weeks, people using Cover Oregon won’t be able to complete their purchase without help from a certified insurance broker or community group"

Feature or bug? What difference, at this point, does it make?

A Gentle Reminder...

For HHS Secretary Shecantbeserous:

COUNTDOWN CLOCKS

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

"In response, Joel Ario, a former HHS official who oversaw health exchange matters at the agency, told The Washington Post’s Sarah Kliff that “nobody is going to say we’re not starting on October 1, but in some situations, you may see a redefinition of what ‘start’ means.”

Health Wonk Review is up!

Peggy Salvatore presents this week's terrific Health Wonk Review, celebrating blogger Brad Wright's 700th post (Mazel Tov, Brad!). The main theme of this week's collection of wonky posts is (no surprise), the ACA. Lots of quality entries this week - enjoy!

Bonus: Mike's post (about how the ACA is playing out in the Golden State) got top billing - go Mike!

Singles for Obamacare

Psst. Wanna save money on your Obamacare plan? Stay single. If you are married, get a divorce.

The "wedding tax" is upon us.

To illustrate, let’s start with the 60-year-old married couple with no children

If they have identical earnings totaling $65,000, which will usually net down to $50,000 or below after all income and payroll taxes, their Obamacare exchange Silver Plan premium next year with the same earnings will be $16,382, or about one-third of what used to be their take-home pay. (And they call it the “Affordable Care Act”?)

PJ Media

That's going to hurt. But wait.

What can this couple do? Well, they could decide to earn a few thousand dollars less, which will negate the five-figure premium hit. Encouraging ordinarily willing workers to put in less effort isn’t good in any economy, but especially not this one. But if either spouse’s earnings are unpredictable or hard to precisely track, they could still “mess up” and get socked with a premium they can’t afford.

The “easiest” solution would be to avoid the “wedding tax” entirely by getting divorced while still living together. Here’s what would happen if they make that choice:

Similar occurrences at other ages. Do you suppose this was planned?

One Down, Ninety-Nine More To Go

Obamacare navigators. Much has been written about this job creation project that is tied to

Obamacare. Take 3 days of training and you are qualified to answer any and all questions about Obamacare. Background checks not required.

The state of Georgia decided to pass on creating our own exchange which meant the feds had to handle that task . . . along with setting up exchanges in 32 other states.

Navigators will earn $10 - $14 per hour and even more if you are fluent in Spanish or other languages.

Georgia's insurance commissioner has not hid his feelings about Obamacare. One good thing he did for the citizens was to require 40 hours of training and a proficiency exam before you can work as a navigator.

So what's the problem?

A major part of The Affordable Care Act will go into effect and some say Georgia is nowhere near ready and the state's top insurance official won't talk about the topic.

Channel 2 political reporter Lori Geary has learned there will be very few people ready to help Georgians sign up for health insurance when the law takes effect next week.

The state has issued a license to just one navigator and there should be nearly 100.

WSB-TV

One navigator to serve the entire state.

That person will be very busy.

"Isn't it the insurance commissioner's job to inform Georgians about what are your options in obtaining that health care?" (State Sen. Nan) Orrock asked.

No it isn't.

There are insurance agents who can handle that task. Navigators are not now, nor were they ever needed to promote Obamacare.

"I don't think that accelerating anyone's entry into a program that I believe is destined for failure is doing anyone any kind of service," (State Sen. Josh) McKoon said.

"I think the reason we're not hearing more about it in Georgia is that we're going to see over the next couple of months, I think, is the beginning of the end of The Affordable Care Act because it is a tremendous over promise," McKoon said.

Train.

Wreck.

Spain's Obamacare on the Ropes

Spain is like most other European countries in providing their own version of Obamacare, a

government managed health care delivery system funded by taxpayers. And like other countries that provide "health care for all", the program is bleeding profusely.

"The impact we have seen in the year since the reform is simply devastating," the president of the organisation, Alvaro Gonzalez, told a news conference, launching a new publicity campaign against the cuts.

Citing government figures, he said 873,000 people had had their access to Spain's free public healthcare system discontinued since September 2012 -- most of them immigrants whose entitlement lapsed because they lost their jobs.

France24

Almost a million people have lost access to "free" health care in the last year. Immigrants who lost their jobs and health insurance.

One supposes they could just pay for health care but that defeats the purpose of free.

"The government is insisting that the economy is recovering... but still our health system, which in past years was the envy of neighbouring countries, is suffering one cut after another," Gonzalez said.

Is Obama running their country too?

Some of the regional authorities that control local health budgets have also started making patients pay part of the cost of their prescriptions.

"This has meant that 16 percent of the pensioners in our country are being cast out of the healthcare system because they cannot meet the cost of paying for medicine for their chronic illnesses," Gonzalez said.

Pensioners would be the equivalent of U.S. seniors on Social Security and Medicare. Is this a prediction of what will happen here?

Donde esta Obamacare?

Euthanasia in Netherlands up 13% in 2012. Aren't the Dutch happy?

“The number of Dutch people killed by medical euthanasia has more than doubled in the 10 years since legislation was changed to permit it, rising 13 per cent last year to 4,188 . . . One explanation for the steep rise of Dutch cases is the introduction last year of mobile euthanasia units allowing patients to be killed by voluntary lethal injection when family doctors refused.”

Is this bad news or good news? Does the growing use of euthanasia mean the Dutch are actually becoming less happy? Could it be the Dutch are less happy than Americans - even though - on the prestigious, European-based "Happy Planet Index" - Netherlands ranks 67th while the U.S. ranks only 105th?

Even after 10 years, I still think it's not yet possible to know the answers to these kinds of questions. We can measure transactions and form opinions, but can those tell us whether the Dutch are doing the right thing? I think not. And besides, what does euthanasia have to do with happiness?

Decisions about caring for people at the end of life remain among the most significant and difficult decisions facing families today. The Dutch model for euthanasia is a meaningful effort to help families deal with these decisions and therefore deserves the careful observation and analysis that it is receiving.

Officially the Dutch model relies on families and family physicians to reach decisions about euthanasia. That does not entirely avoid the future possibility that someday, the Dutch national health care program, or some other government's program - say, in the U.S. - may actually prescribe euthanasia as a matter of law or regulation, in order to save money. That’s my idea of the ultimate death panel. Brave New World indeed.

History shows that governments insist on participating in financial decisions when they are paying for the outcomes. In other words, a government health care program cannot pretend to be a fair and impartial third-party, because it is an interested participant in the outcome. It's a conflict of interests that won't go away.

How can America avoid that possible future? For one thing, the public cannot afford to rely on lawmakers; we must do our best to watch what other governments - such as the Netherlands - are doing. And for another, we must watch what our own government is doing.

Yesterday's McPaper characterized one aspect of the ObamaTax pricing regime as the "Family Glitch:"

"Congress defined "affordable" as 9.5% or less of an employee's household income ... the "error" was that it only applies to the employee — and not his or her family. So, if an employer offers a woman affordable insurance, but doesn't provide it for her family, they cannot get subsidized help through the state health exchanges."

Why is this both an "error" and a "glitch?" And why presume in the first place that it was not, in fact, intentional? After all, even the folks in Capital City had to foreseen how many employers would be ~~dumping~~ shifting their employees (and retirees) onto the Exchanges in an effort to gain some control over the financial hurdles being placed before them.

Our Elected Betters© wouldn't have done something stupid, right?

Right?

Patient Protection Act - Cause it isn't Affordable

With insurance ~~Exchanges~~ Marketplaces nearing their grand opening HHS has released another issue brief on the "low rates" people will pay after subsidies. In one of the examples they use a 27 year old in Texas who makes $25,000 per year. This person will pay $145 for the second lowest cost silver plan or $83 for the bronze plan after the subsidy.

HHS is so focused on premiums and making this trainwreck look affordable that they are missing the boat on a key component, the benefits. Without knowing the health history of the individual they may in fact be promoting the exact opposite of what the person is looking for: the greatest value for their dollar.

If I am a 27 year old with diabetes, am extremely obese, and suffer from Crohn's disease would I want to purchase a plan with a $5000 deductible and $6350 out of pocket maximum? That is what I will likely get for $83 per month.

From a financial standpoint:

Income: $25,000

Premiums: $996

OPM: $6350

Net Income: $17,654

30% of income for insurance and health care costs. This is what HHS considers "affordable".

Alzheimer's Update: Good news (for once)

SoIB Gail S tips us to this recent story in the Dayton Daily News, recounting an award-winning therapy that's deceptively simple:

"Three years ago, Wright State University professor Dr. Govind Bharwani was given a challenge: Find a way to help people living with Alzheimer’s disease so they are less prone to becoming confused, agitated, withdrawn and falling."

And it appears that he has, in fact, succeeded:

"The therapy works by providing each person with their own “memory box” filled with family photos, books and movies they love and other special items."

Once you think about it, it's kind of intuitive: one of the reasons that Alzheimer's patients become so frustrated is that loss of "connection" to the world. I recall that, with my mother, I eventually realized that she wasn't having "good" days or "bad" ones, so much as "today she's in her own world" versus "our world" days. What better way to restore (or at least enhance) that connection than re-establishing treasured experiences?

Another benefit is that this is all done with no drugs, which can be expensive and often have undesirable side effects. Research is now continuing to see how (or if) this can be applied to those living at home with this dread condition.

Kudos to WSU and Dr Bharwani.

Take two apps and call me in the morning

Introducing the iDoc® (not really, but we're getting close):

[Hat Tip: FoIB Jeff M]

How uninformed can NYT readers, commentors possibly be?

Every once in awhile you see a comment that just makes you stop and ask how clueless and misguided people can be, then you remember they are allowed to vote.

Your typical NYT tripe from some blowhard that doesn't understand 90% of what he is talking about. The real gem is down in the comments though;

mikeoshea
Hadley, NY

"All Republican Congresspeople - except those on Medicare - should be required to buy their own and their family's health care BY THEMSELVES, just as I must buy my wife's (I'm on Medicare, thank the gods) health insurance by myself."

Odd, I thought that is exactly what the law (ACA) required.....until a Democrat President ordered OPM to ignore the law and subsidize it. I also have seen only Republicans fighting to undo the waiver.

In a news report today, Rep. Phil Gingrey, M.D., expressed his opposition to the Obamacare exemption for Members of Congress and their congressional staffs.

“This is yet another example of the Obama administration changing the law for political gain,” Gingrey said. “The exemption for members of Congress and their staffs must be rescinded. Between increased health care costs, scores of missed deadlines and political handouts to friends, this is further proof that Obamacare must be repealed.”

Lets all just hope this Mike O'Shea idiot doesn't vote. And to the NYT, great job informing your readers there paper of record!

So yesterday, I did my Exchange training and exams. Started at about 9:30 in the morning, finished about 4:30 in the afternoon.

I understand Pat completed this in just a few hours, but he's a lot younger (and apparently smarter) than I am. And I also took the liberty of saving all the training material for future reference (which no doubt added some time, as well)

I'll have a more complete report soon, but here are some of my initial impressions fresh off the training and exams:

I'll just say this: if you're comfortable having ALL your personal medical, financial, tax and what-all info being zipped around between SSA, IRS and DHS (Department of Homeland Security?? Really??), then by all means head right for 'em on 10/1 (assuming they're actually online then).

I'm pretty knowledgeable about this stuff (really!) and even I was amazed and appalled at the level of intrusion this train-wreck has wrought. Oh, and you'll be pleased to know that as taxpayers, you'll have the double-mitzvah of paying through the nose not just for your own health care, but for all those wonderful "others" who qualify for premium and "cost-sharing" subsidies.

Here's my favorite part, though:

"QHPs [Qualified Health Plans] in a Marketplace must also provide coverage that meets one of five levels of generosity ... It is important to emphasize that AV is an average measure of generosity ... the percentage of medical costs the plan will cover after premium payments."

And just who's being generous with MY money? Oh, yeah.

And to top it off, this just in at the WSJ:

"Less than two weeks before the launch of insurance marketplaces created by the federal health "overhaul, the government's software can't reliably determine how much people need to pay for coverage"

Yeah, this is going to end well....

ObamaTax School's Now In Session!

Learn it, live it, love it:

I've been remiss....

In case you missed it, I'm the newly-installed Content Expert Writer (Insurance) for Answers.com. It occurs to me that IB readers might be interested in some of my work in that venue, so here are some free samples:

Part 1 of a 3-part series on Universal Life

An explication of Insurable Interest

Enjoy!

But it's a nice hat. That's because the people paid for that hat.

Remember the President's assurances that his ACA would finally “bend the cost curve”?

Despite a determined rear-guard media that clings to Obama's every word as universal truth, evidence accumulates that the President was talking thru his hat.

On September 17, 2013, CBO released it's most recent Long-Term Budget Outlook.

According to CBO, in 20 years, “major health care programs” will be the largest component of federal spending.

CBO expresses its estimate relative to GDP - which is also growing. CBO's estimate is that federal health care spending will increase from roughly 3% to north of 8% of GDP. That's almost tripling the share of a base number that is itself growing every year. CBO thus anticipates federal dollar spending growth for health care more like 4X's to 5X's its level in 2013.

Bend the cost curve, indeed.

Talking thru his hat.

(btw, the same CBO estimate finds that within the next 25 years, federal debt held by the public will be 100% of America’s entire GDP "without accounting for the harmful effects that growing debt would have on the economy." The corresponding percentage as late as 2007 was less than 40% of GDP. This administration's failure to bend the federal spending cost curve is clearly a serious problem that extends well beyond "health care".)

Cavalcade of Risk #192: Galloping Into View edition

Nancy Germond hosts this week's romp through the wilds of risk, a maze of medical conditions, and a not-so-*fowl* post on chickens (cluck all you want).

Bored Game

If you have nothing to do, what happens? Some drink. Some go shopping. Others create board

games.

"Everybody has to pay. Nobody ever wins,"

Each player starts out on the "Buy Insurance" square as a small business owner (except for the Occupy Wall Streeters, who begin the game unemployed). Along the way, players are taxed, troubled, hospitalized, or may even fall victim to a death panel as they make their way across the board.

CNS News

Do not pass Go.

Do not collect $200.

"We may have added some funny exaggerations in the game," LeFeber said. "But since the original bill was brought to you by the same folks who so efficiently manage the US Postal Service, Social Security Trust Fund, recent Bank Bailouts, and soon-to-be $17,000,000,000,000.00 in government debt--you know the game is rigged against us from the start."

Just like real life. You have to play the game to know what is in it.

Obamacare Cry Babies

Employees of Bibb County (GA) schools got an early peek at their new benefit plan for 2014.

Through the end of this year employees had a choice between several plans administered by UHC or Cigna. They could pick an HMO or PPO. Copay or high deductible HSA or high deductible HRA.

Choices, choices.

That was then. This is now.

The Georgia Blue's got tired of sitting on the sideline and made a winner take all offer to the SHBP (State Health Benefit Plan) administrator.

Blue won the contract. Cigna and UHC are gone.

Say bye-bye to copay plans and freedom of choice. Employees can pick from one of three plans and their choice is Blue or Blue.

No more copay plans.

They are calling the new design a PPO with an HRA wrap.

Last year the state provided this comparison between the 2012 and 2013 plans. The plans were not bad and not good. Most employees preferred the HMO because of the doc copay's.

2014 is a new year and copay's are last years news. The new PPO Wrap looks like this.

As you can guess, most of the employees are not happy.

Where are the copay's? Gone . . . .

They can't do this to us! Yes they can . . .

I want my Obamacare plan. This IS your Obamacare plan . . .

For some reason I am reminded of that scene from Private Benjamin.
Pvt Benjamin - "I think they sent me to the wrong place. I did join the army, but it was a different army. I joined the one with the condo's and private rooms."

No doubt, many Pvt. Benjamin's will be checking out the exchange offerings when it opens in a few weeks. Some may even sign up, expecting to get a subsidy . . . or a condo with a private room.

A subsidy that will never happen.

The law says if you have an "affordable" health insurance plan through your employer, you can still buy from the exchange but you are not eligible for subsidies.

How is affordable defined?

Glad you asked. If the employee premium is less than 9.5% of the employee's W-2 gross income the plan is deemed affordable.

If the employer plan meets that criteria, neither the employee or their dependents will qualify for an Obamacare subsidy.

Elections have consequences.

The Lame Stream Media prides itself on its unerring accuracy and commitment to getting the facts straight. As it turns out, at least when it comes to life insurance, this pride is, in fact, unjustified. As we pointed out almost 4 years ago, they can't even get the relatively simple suicide exclusion correct:

"...it appears that this may well have been an elaborately staged suicide, the point of which was to leave the proceeds of a life insurance policy to the victim's son ... “There’s no such thing as suicide insurance."

Which is true, but as we pointed out, irrelevant. It would have taken the reporter five minutes to interview a life insurance agent to provide clarity and context (not to mention accuracy).

And now we see the same shoddy reporting in another tragic case:

"... for Cindy Karlsen, there was the $1.2 million policy that her husband had now taken out on her life ... She learned Karlsen had invested some of the insurance money from his son's death into a life insurance policy on her."

And how did the erstwhile Mrs Karlsen learn this? Apparently it came as a big surprise to her that she had applied for life insurance, but some simple fact-checking by the (so-called) reporter might have revealed that it's almost impossible to buy life insurance on another person without his or her consent, let alone knowledge. And a policy with over $1 million on the line is going to require not just a physical examination, but (at least according to the carriers I represent), a telephone interview with the prospective insured.

So we are left to believe one of two things is true:

1) A life insurance company issued a million dollar policy strictly off an application - no exam, no blood or urine draw, no interview - and no effort to confirm the information on the application.

or

2) She agreed to complete and sign a lengthy life insurance application, take a fairly invasive physical exam - including, depending on her age, a stress-test and the release of her medical records - and do an exhaustive telephone interview, without the slightest clue that this was for a ... wait for it .... life insurance policy.

How dumb does the LSM think we are?

[Major IB Thanks to Jeff M for helping me noodle through this post]

Lately, we've had an embarrassment of riches concerning the ObamaTax and other related news. Because there are only 24 hours in a day, it's not really possible to give each one the blog-space it probably deserves, but at least we can give our readers a heads' up on what's hot:

1 - We've been warning folks about the very real probability of fraud in the new Navigator program. From FoIB Holly R here's the latest:

"...officials are watching for look-alike websites that could lead consumers to be the victims of fraud or simply confuse people ... States are on the lookout for websites created by interest groups, private insurance companies and sometimes scammers that have similar web addresses and the appearances of the official state exchange websites."

So-called "phishing" sites have been around for a long time, this seems to be the latest iteration of that phenomenon.

2 - Holly also tips us to this story - surely only one of many to come - about pushback on so-called "wellness" programs. In this case, certain employees at Penn State University are protesting a new requirement that they either participate in one of these, with the added benefit that they'll get to divulge some very personal information, at least some of which seems pretty intrusive (and doesn't seem to be particularly "health"-related):

"The plan requires nonunion employees, like professors and clerical staff members, to visit their doctors ... and submit to an extensive online health risk questionnaire that asks, among other questions, whether they have recently had problems with a co-worker, a supervisor or a divorce"

Cost for declining to participate? $100 a month (or $200 if they're married and have their spouse on the plan).

Potential solution (and probably rationale for the whole exercise): opt out of the Penn State plan and onto the Exchange.

3 - We've noted before that the Public Exchanges seem to be having a problem attracting (and keeping) carriers. Our Friend Jeff M reports from North Carolina that the Tar Heel State is no exception:

"FirstCarolinaCare Insurance abruptly pulled out of the North Carolina market, saying there are too many unknowns about how the Affordable Care Act will play out here."

So what if they gave an Exchange and no carrier came?

We may find out.

4 - And circling back around to Navigators and the likelihood of shenanigans, Florida has banned them from county health departments:

"Local health departments can accept public exchange brochures and other exchange outreach material, but they can distribute the materials only if consumers ask for information"

Florida heath officials wanted to make sure that they're agencies know that Navigators "aren't acting on behalf of the state."

Gee, one wonders why anyone would think that.

As Bob noted last month, the grand folks in Capital City aren't too keen on rubbing elbows with us rubes waiting on line at the Health Insurance Exchange. Far beneath their stations in life, don'tcha know.

Well, it should probably comes as no surprise, then, to learn that Federal "workers" really don't want to give up their gold-plated (but Yugo-priced) health insurance. After all, they were promised that "if they liked their insurance, they could keep their insurance."

[Ironic, I know]

But if you'd really like to know just how much they don't want to forced off those great/affordable plans, "[a] new survey of 2,500 federal employees and retirees found that 92.3 percent believe federal workers should keep their current health insurance and not be forced into ObamaCare."

Frankly, I'm surprised that number's so low.

Exchange THIS

The LA Times reports some major California insurers have built "narrow networks" of doctors and hospitals for plans that will be offered thru the State's Obamacare Exchange.

Insurance companies (and consultants and many large employers) say that these narrow networks reduce costs by increasing the insurers' ability to negotiate price discounts. Physicians and hospitals say they oppose these narrow networks because they fear patients won't be able to find the doctor or hospital they like, in the plan they like.

As for the State, Peter Lee - executive director of Covered California [the State's Obamacare Exchange] - says "Our interest is in assuring everyone enrolled in a plan has ready access to the clinicians they need . . . That means if a plan can't serve patients, we'll close it down from taking new enrollment"

So if a plan doesn't provide what the Exchange deems sufficient access, the Exchange will make sure the plan can't provide ANY additional access.

Is that a solution?

The Times goes on to say "Consumers could see long wait times, a scarcity of specialists and loss of a longtime doctor."

Isn't that exactly what people say who worry about rationing under Obamacare - and have been relentlessly ridiculed for saying it?

With the horrific flooding going on in Colorado, folks may be wondering how (or even if) their homeowner's insurance policy will cover them. The folks at the National Flood Insurance Program have a neat little widget that helps you determine your home's risk of flooding, and how much flood insurance coverage might cost.

As always, it's best to check with your professional, independent homeowner's insurance agent.

Obamacare Security Breach

Much has been made, at least in some circles, of the vulnerability of your personal information

that will be filtered through the #Obamacare #datahub.

For the most part, the lame stream media has ignored this topic and when they have mentioned it they simply parrot what DC says indicating there is nothing to fear.

Security watchdogs know that hacking is a potential threat but most data breaches come from within, not outside the firewall.

That being said, the first known problem in the Obamacare #exchange has already been reported.

Two reviews are planned of MNsure, the state's new online health insurance exchange, after an employee accidentally distributed confidential information about more than 2,400 insurance agents.

A legislative panel and the legislative auditor said Friday they want more information about the breach. MNsure officials acknowledged mishandling private information. They said the employee sent an email to the office of an Apple Valley insurance broker on Thursday afternoon that contained Social Security numbers, names, business addresses and other identifying information.

LaCrosse Tribune

"Only" 2400 insurance agents.

No big deal, right?

If you buy from the Minnesota health insurance exchange, or any other exchange, how can you be 100% this won't happen to you?

Users of the exchanges will have to provide sensitive information, including Social Security numbers. The information will be sent to a federal hub to verify such things as citizenship and household income. The privacy of confidential data has been a long-time concern for some skeptics of the exchange.

"The people who believe in this are so driven that there's a sub-context of, `Just let us do our job and get as many people signed up as possible, and we'll pick up the debris later,'?" said Steve Parente, a University of Minnesota finance professor who specializes in information technology related to the health industry.

Yes, the push is to sign as many up as quickly as possible. Get more people dependent on the government for free money.

I would be remiss if I failed to mention another option for purchasing your new Obamacare health insurance plan, and it does not involve the data hub or navigators who have had 3 days of training..

Buy OFF exchange through a licensed insurance professional.

This Sceptered Isle, Part DCIV

From the Telegraph of London on 9/11:

"Death rates in NHS hospitals are among the highest in the western world, shock figures revealed yesterday. British patients were found to be almost 50 per cent more likely to die from poor care than those in America."

Hat tip to Tim Worstall's enjoyable blog, which generally focuses on economics.

The Telegraph article also cites this comment from a U.K. Professor Sir Brian Jarman, who is considered a globally-recognised expert on hospital performance:

"I expected us to do well and was very surprised we didn’t do well – but there is no means of denying the results as they are absolutely clear."

Paul Krugman famously attempted to pre-empt this kind of factual finding several years ago, when he declared "In Britain, the government itself runs the hospitals and employs the doctors. We’ve all heard scare stories about how that works in practice; these stories are false."

Shucks, a school child knows facts cannot be both absolutely true and absolutely false. Facts are facts, and in that sense are not political.

Yet in real life the debate over centralized government control of the medical care system rages on, in many cases fueled by expert disagreement over whether facts are true or false.

Another Day, Another Obamacare Payoff

Obamacare. The master plan to deliver (almost) universal access to health care for everyone.

Promises of lower premiums.

Promises that you can keep your plan and your doctor.

Promises of no new taxes.

What's not to love about that?

Then one day, someone started reading the law and it was discovered the promises could not be kept. So HHS and the White House started down a path of handing out pardons.

Pardons for insurance carriers that offered limited benefit plans.

Pardon's for unions and businesses in Nancy Pelosi's district.

Pardon's for college student health plans.

Pardon's for religious institutions that objected to the mandated abortion pill.

Of course the latest round of pardons orchestrated by the White House was an exemption for members of Congress and their staff.

But that was last week.

In case you have been sleeping under a rock, the AFL-CIO, a MAJOR supporter of the Democrat party and Mr. Teleprompter's election campaigns has been whining about the impact of Obamacare. Today we find out someone is coming to dinner at the White House and it isn't Sidney Poitier.

President Barack Obama is meeting with union leaders at the White House to discuss labor's growing concerns about the new health care law.

Friday's meeting comes after the AFL-CIO approved a resolution this week saying the law could drive up the cost of union-sponsored health plans, encouraging some employers to drop coverage.

White House officials and labor leaders have been trying to work out a possible resolution. Unions want members to be eligible for the same federal subsidies available to low-income workers in the new health exchanges. The White House has resisted that fix, saying the law doesn't allow it.

Townhall

Just because the law doesn't allow it doesn't mean an exception can't be done.

If the president can pardon the Thanksgiving turkey he can certainly arrange another pardon for 11 million of his closest friends.

Everyone get's a pardon.

Everyone except you and me.

Empty promises from an empty suit.

HHS Wants You to Meet Jamie

Continuing their ongoing effort to "educate" people on PPACA, HHS has introduced us to Jamie. Jamie is a 27 year old college graduate. She has been working at the coffee shop for four-and-a-half years and has never made more than $20,000 in a year.

Self admittedly, she really "has no plan...but that's just how her life has worked out." She hasn't been to the doctor since her junior year of high school. If she ever got really ill or injured she couldn't afford to pay for treatment. She doesn't have any savings and struggles to get by with all of her current bills.

For Jamie life with health insurance will provide her with "comfort and stability and safety". She's very eager to sign up for subsidized insurance.

Starting October 1st (maybe?) Jamie will be able to get the health insurance she so desires. Here is her scenario after running through the Kaiser Family Foundation subsidy calculator:

Purchase a Silver Plan: Cost to Jamie is $1,021 per year. She will also qualify for MOOP (Max Out Of Pocket) assistance under this plan which will lower her worst case scenario to $2250.
Purchase a Bronze Plan: Cost to Jamie is $480 per year. However, if she takes this option she will not qualify for MOOP assistance and will face a worst case scenario of $6350.
Stay without insurance and pay Uncle Sam a "shared responsibility payment" of roughly $200 and role the dice that she will stay healthy.

I wonder what option Jamie will choose? Surely her Navigator will explain all of this and the implications behind each option.

Unusual and Interesting Insurance News

Over the years, we've chronicled such things as virginity and alien abduction insurance (different posts), the risk posed by superheroes simultaneously destroying much of a city while trying to save it, and hole-in-one coverage for sporting events.

And now for more:

■ Terrorism Risk insurance - Back in 2009, we interviewed Chris Klein, Global Head of Business Intelligence for Guy Carpenter (major risk and reinsurance specialists), who explained why government involvement was necessary in providing reinsurance for major terrorist acts.

Four years later, The Cato Institute argues that the Federal Terrorism Risk Insurance Act (TRIA) has passed its sell-by date:

"... the Terrorism Risk Insurance Act of 2002 to create a “temporary” federal backstop against catastrophic losses. This program subsidized private risk with public funds through a cost-sharing program for which the government does not receive any compensation ... The private market is capable of underwriting this risk."

Interesting analysis.

■ On a brighter note, MassMutual recently kicked off a campaign to get parents looking at the topic of life insurance through the eyes of their children. Through a series of cute and compelling videos, MassMutual hopes to get this conversation kickstarted.

Here's a sample:

■ Finally, I know we've never blogged on this one before:

"The Mid-Autumn Festival (scheduled on Sept. 19), is one of China's biggest holidays and features a lantern festival, the exchange of mooncakes and dining with family and friends while gazing at the harvest moon."

Very interesting Henry, and now I'm hungry for some fried won-tons. But what's that got to do with insurance?

Ah, so:

"Residents of three cities—Shanghai, Guangzhou and Shenzhen—can buy insurance online for 20 Yuan (about $3) and be compensated for up to 50 Yuan if clouds obscure moon-viewing between 8 p.m. and 12 a.m. on Sept. 19. The plan is being offered by Alibaba Small and Micro Financial Services Co. and Allianz Insurance China."

The plan's being offered in 41 other cities, as well, but at a higher premium. Still, this may be a true insurance bargain.

So if you're headed to China for this annual event, be sure to stop by the insurance counter (and bring a sweater).

Cavalcade of Risk #192: Call for submissions

Nancy Germond hosts next week's Cav. Entries are due by Monday (the 16th).

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). And please only submit if you are willing to link back to the carnival if your submission is accepted.

What a Waste of Time

For the last several months agents have been working on educating ourselves and our clients on the various administrative atrocities of PPACA. The latest one is the so called "Notice of Exchanges". The notice is a three page document that essentially all employers must provide all employees about the Health Insurance Marketplace. The notice is to "assist" people as they evaluate options for health insurance products they are being forced to purchase in 2014.

My guess is that I have over 40 hours put into developing a plan of action for distributing the notices to my clients. Even yesterday Hank and I were exchanging emails on this topic. On top of my time, many hours have been put in across our professional organization in determining and defining things like minimum value standard and affordability.

According to the original draft, the notice was supposed to be sent out by March 1, 2013, but then there was a delay. So, now the notice must be distributed no later than October 1, 2013. The DOL guidelines state that non compliance will result in a $100 per employee per day fine. So you can see why we have such a sense of urgency behind this matter.

This came September 11, 2013 at 4:55PM. In a frequently asked questions release the DOL determined that while the notice should be distributed there are no fines or penalties for failing to provide the notice. So in the course of a couple of months the government has gone from "we will fine you" to "meh, no big deal".

Just another one of our great government efficiencies...

Although the ObamaTax was heavily promoted by various unions, it appears that buyer's remorse is inexorably setting in:

"The AFL-CIO on Wednesday approved a resolution critical of parts of [the ObamaTax] ... The strongly worded resolution says ... will drive up the costs of union-sponsored health plans to the point that workers and employers are forced to abandon them."

Oh, methinks that ship sailed some time ago.

But not to worry, the new health insurance Exchanges will provide a safe landing for union members (and regular folks), so there's a silver lining.

Or maybe not:

"Obamacare is likely to have a "rocky" enrollment start on October 1 in some U.S. states, because of ongoing technology challenges facing new online health insurance exchanges"

Oh.

According to consulting firm Leavitt Partners (a Utah-based consulting firm that "has been involved in the design and development of some state exchanges and tracks exchange progress nationwide"), "not a single state appears to be completely ready" for the roll-out, scheduled to begin in less than 3 weeks.

And remember, final security testing has been put off until (literally) the last minute, so October 1st should prove, um, interesting.

The problem we have when people like Obama and his apostles write sweeping reform is they have no clue how the system works which leads to all sorts of unintended consequences. We have a doozy of one coming.

Large Employers and self funded plans must comply with the out of pocket (OOP) cap. For 2014 they can have separate caps if, for example, an Rx plan is administered separate from a medical plan; in 2015 they must be combined. Currently that cap is $6,350 for an individual.

Lets look at a real world situation: we have a client with a member taking Xyrem. It cost $9,000 per month or $108,000 per year. Plan has a 20% co-pay currently so the plan pays $86,400 and the member pays $21,600.

Except the member doesn't really pay $21,600. Like most Brand name drugs Xyrem has an assistance program, the manufacturer increases the price then refunds the member some portion of their liability. In this case the member pays $35 per month; that is correct, they only pay $$420.00 a year of their $21,600 co-insurance. The pharmaceutical company writes off the rest.

Under Obama's ingenious plan though, once we show the member was liable for $6,350 we need to start paying it at 100%. Now my client will be spending $101,650 per year. That extra $15,250, is pure profit to the pharmaceutical company. In Obama's world that apparently translates into affordability.

And for the member, their OOP for the year, thanks to Pharmaceutical games, is a whopping $35.

In case you think this is an isolated problem: while not all Rx cost this much, almost every brand name drug has a similar program.

Health Wonk Review - Big Data edition

The delightfully-named Tinker Ready hosts this week's round-up of wonky posts, with a major emphasis on the role of data, its collection and application. As always, you're sure to find something interesting and new.

Alphabet Soup Update: Why Local Matters

As we've noted time and again, having a local expert to administer Flex Spending Accounts and Health Reimbursement Arrangements is ideal. Our local gurus, FlexBank, just proved that again. Via email, they've tipped us to a little-known - but potentially major - option for groups utilizing Section 125 plans (so-called "POP Plans").

Premium-only plans are the vehicles by which companies make it possible for employees to pay their portion of health insurance premiums pre-tax. This can be a major cost-saver for both the employee and the employer. But there are rules for these plans, one of which is that mid-year changes are verboten (unless there's a "qualifying event").

The new Exchange policies, which many employees may wish to purchase, go into effect on January 1. If your employer has a calendar-year POP plan, no problem, you make the change. But what if your employer's plan isn't on a calendar-year basis? Some employees may elect to drop their current group coverage in favor of an Exchange-based individual plan, but that's not one of the recognized "qualifying events."

Until now.

Thanks to the folks at FlexBank, we learn that the folks in Capital City have heard those pleas, and are offering a one-time only "out" for employees in this situation. The IRS has stated that employers with non-calendar year based POP plans may amend them to allow employees to drop off of (or join!) these "cafeteria" plans effective January 1, 2014.

Good news indeed.

Another One (Thousand) Bites the Dust

As Nate noted some months ago, the Medical Device Tax has put a crimp in the medical R&D sector. The latest casualties of this component of the ObamaTax are the 1,000 soon-to-be-former employees of Michigan-based Stryker.

Adding insult to injury, the beleagured firm also owes Uncle Sugar some $100 million just from this year, and it's estimated to "cost the company fully 20 percent of its total research and development investments."

Train. Wreck.

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